103D CONGRESS

1ST SESSION H. R. 2264

AN ACT

To provide for reconciliation pursuant to section 7

fiscal year 1994.of the concurrent resolution on the budget for
103D CONGRESS

1ST SESSION H. R. 2264

AN ACT

To provide for reconciliation pursuant to section 7 of the

concurrent resolution on the budget for fiscal year 1994.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Omnibus Budget Rec5 onciliation Act of 1993’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents is as follows:
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TITLE I—COMMITTEE ON AGRICULTURE

TITLE II—COMMITTEE ON ARMED SERVICES

TITLE III—COMMITTEE ON BANKING, FINANCE AND URBAN

AFFAIRS

TITLE IV—COMMITTEE ON EDUCATION AND LABOR

TITLE V—COMMITTEE ON ENERGY AND COMMERCE

TITLE VI—COMMITTEE ON FOREIGN AFFAIRS

TITLE VII—COMMITTEE ON THE JUDICIARY

TITLE VIII—COMMITTEE ON MERCHANT MARINE AND FISHERIES

TITLE IX—COMMITTEE ON NATURAL RESOURCES

TITLE X—COMMITTEE ON POST OFFICE AND CIVIL SERVICE

TITLE XI—COMMITTEE ON PUBLIC WORKS

TITLE XII—COMMITTEE ON VETERANS’ AFFAIRS

TITLE XIII—COMMITTEE ON WAYS AND MEANS—SAVINGS

TITLE XIV—COMMITTEE ON WAYS AND MEANS—REVENUES

TITLE XV—BUDGET PROCESS

1 TITLE I—COMMITTEE ON

2 AGRICULTURE

3 SEC. 1001. SHORT TITLE AND TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This title may be cited as the

5 ‘‘Agricultural Reconciliation Act of 1993’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this title is as follows:

Sec. 1001. Short title and table of contents.

Subtitle A—Commodity Programs

Sec. 1101. Wheat program.

Sec. 1102. Feed grain program.

Sec. 1103. Upland cotton program.

Sec. 1104. Rice program.

Sec. 1105. Dairy program.

Sec. 1106. Tobacco program.

Sec. 1107. Sugar program.

Sec. 1108. Oilseeds program.
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Sec. 1109. Peanut program.

Sec. 1110. Honey program.

Sec. 1111. Wool and mohair program.

Sec. 1112. Conforming amendments to continue deficit reduction activities in

crop years after 1995.

Subtitle B—Restructuring of Loan Programs

Sec. 1201. Restructuring of certain loan programs.

Sec. 1202. Reorganization of rural development functions.

Subtitle C—Food Stamp Program

Sec. 1301. Short title.

Sec. 1302. References to Act.

CHAPTER 1—ENSURING ADEQUATE FOOD ASSISTANCE

Sec. 1311. Maximum benefit level.

Sec. 1312. Helping low-income high school students.

Sec. 1313. Families with high shelter expenses.

Sec. 1314. Resource exclusion for earned income tax credits.

Sec. 1315. Homeless families in transitional housing.

Sec. 1316. Households benefiting from general assistance vendor payments.

Sec. 1317. Continuing benefits to eligible households.

Sec. 1318. Improving the nutritional status of children in Puerto Rico.

CHAPTER 2—PROMOTING SELF SUFFICIENCY

Sec. 1321. Income exclusion for education assistance.

Sec. 1322. Child support payments to nonhousehold members.

Sec. 1323. Child support exclusion.

Sec. 1324. Improving access to employment and training activities.

Sec. 1325. Vehicles needed to seek and continue employment and for household

transportation.

Sec. 1326. Vehicles necessary to carry fuel or water.

Sec. 1327. Demonstration projects testing resource accumulation.

CHAPTER 3—SIMPLIFYING THE PROVISION OF FOOD ASSISTANCE

Sec. 1331. Simplifying the household definition for households with children

and others.

Sec. 1332. Eligibility of children of parents participating in drug or alcohol

treatment programs.

Sec. 1333. Resources of households with disabled members.

Sec. 1334. Ensuring adequate funding for the food stamp program.

CHAPTER 4—IMPROVING PROGRAM INTEGRITY

Sec. 1341. Use and disclosure of information provided by retail food stores and

wholesale food concerns.

Sec. 1342. Additional means of claims collection.

Sec. 1343. Demonstration projects testing activities directed at street trafficking in coupons.

CHAPTER 5—IMPROVING FOOD STAMP PROGRAM MANAGEMENT

Sec. 1351. Clarification of categorical eligibility.
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Sec. 1352. Technical amendments related to electronic benefit transfer.

Sec. 1353. Disqualification of recipients for trading firearms, ammunition, explosives, or controlled substances for coupons.

Sec. 1354. Uncapped civil money penalty for trafficking in coupons.

Sec. 1355. Uncapped civil money penalty for selling firearms, ammunition, explosives, or controlled substances for coupons.

Sec. 1356. Modifying the food stamp quality control system.

CHAPTER 6—UNIFORM REIMBURSEMENT RATES

Sec. 1361. Uniform reimbursement rates.

CHAPTER 7—IMPLEMENTATION AND EFFECTIVE DATES

Sec. 1371. Implementation and effective dates.

Subtitle D—Miscellaneous Provisions

Sec. 1401. Maximum expenditures under market promotion program for fiscal

years 1994 through 1998.

Sec. 1402. Admission, entrance, and recreation fees.

Sec. 1403. Additional program changes to meet reconciliation requirements.

Sec. 1404. Environmental conservation acreage reserve program amendments.

Sec. 1405. Levels of insurance coverage under the Federal Crop Insurance Act.

1 Subtitle A—Commodity Programs

2 SEC. 1101. WHEAT PROGRAM.

3 (a) FIVE PERCENT REDUCTION IN PAYMENT

4 ACRES.—

5 (1) REDUCTION.—Subsection (c)(1)(C)(ii) of

6 section 107B of the Agricultural Act of 1949 (7

7 U.S.C. 1445b-3a) is amended by striking ‘‘85 per8 cent’’ and inserting ‘‘80 percent’’.

9 (2) APPLICATION OF AMENDMENT.—The

10 amendment made by paragraph (1) shall apply be11 ginning with the 1994 crop of wheat.

12 (b) CONTINUATION OF DEFICIT REDUCTION ACTIVI13 TIES IN CROP YEARS AFTER 1995.—
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1 (1) AGRICULTURAL ACT OF 1949.—Section

2 107B of the Agricultural Act of 1949 (7 U.S.C.

3 1445b–3a) is further amended—

4 (A) in the section heading, by striking

5 ‘‘1995’’ and inserting ‘‘1998’’;

6 (B) in subsections (a)(1), (a)(4)(C), (b)(1),

7 (c)(1)(A), (c)(1)(B)(iii), (e)(1)(G), (e)(3)(A),

8 (e)(3)(C)(iii), (f)(1), and (q), by striking

9 ‘‘1995’’ each place it appears and inserting

10 ‘‘1998’’;

11 (C) in the heading of subsection

12 (c)(1)(B)(ii), by striking ‘‘AND 1995’’ and insert13 ing ‘‘THROUGH 1998’’;

14 (D) in subsection (c)(1)(B)(ii), by striking

15 ‘‘and 1995’’ and inserting ‘‘through 1998’’; and

16 (E) in the heading of subsection (e)(1)(G),

17 by striking ‘‘1995’’ and inserting ‘‘1998’’; and

18 (F) in subsection (g)(1), by striking ‘‘and

19 1995’’ and inserting ‘‘through 1998’’.

20 (2) FOOD, AGRICULTURE, CONSERVATION, AND

21 TRADE ACT OF 1990.—Title III of the Food, Agri22 culture, Conservation, and Trade Act of 1990 (Pub23 lic Law 101–624; 104 Stat. 3382) is amended—
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1 (A) in section 302 (7 U.S.C. 1379d note),

2 by striking ‘‘May 31, 1996’’ and inserting

3 ‘‘May 31, 1999’’;

4 (B) in section 303 (7 U.S.C. 1331 note),

5 by striking ‘‘1995’’ and inserting ‘‘1998’’;

6 (C) in section 304 (7 U.S.C. 1340 note),

7 by striking ‘‘1995’’ and inserting ‘‘1998’’; and

8 (D) in section 305 (7 U.S.C. 1445a

9 note)—

10 (i) in the section heading, by striking

11 ‘‘1995’’ and inserting ‘‘1998’’; and

12 (ii) by striking ‘‘1995’’ and inserting

13 ‘‘1998’’.

14 (3) FOOD SECURITY WHEAT RESERVE.—Section

15 302(i) of the Food Security Wheat Reserve Act of

16 1980 (7 U.S.C. 1736f–1(i)) is amended by striking

17 ‘‘1995’’ both places it appears and inserting ‘‘1998’’.

18 SEC. 1102. FEED GRAIN PROGRAM.

19 (a) FIVE PERCENT REDUCTION IN PAYMENT

20 ACRES.—

21 (1) REDUCTION.—Subsection (c)(1)(C)(ii) of

22 section 105B of the Agricultural Act of 1949 (7

23 U.S.C. 1444f) is amended by striking ‘‘85 percent’’

24 and inserting ‘‘80 percent’’.
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1 (2) APPLICATION OF AMENDMENT.—The

2 amendment made by paragraph (1) shall apply be3 ginning with the 1994 crop of feed grains.

4 (b) CONTINUATION OF DEFICIT REDUCTION ACTIVI5 TIES IN CROP YEARS AFTER 1995.—

6 (1) AGRICULTURAL ACT OF 1949.—Section

7 105B of the Agricultural Act of 1949 (7 U.S.C.

8 1444f) is further amended—

9 (A) in the section heading, by striking

10 ‘‘1995’’ and inserting ‘‘1998’’;

11 (B) in subsections (a)(1), (a)(4)(C), (a)(6),

12 (b)(1), (c)(1)(A), (c)(1)(B)(iii)(I),

13 (c)(1)(B)(iii)(III), (e)(1)(G), (e)(1)(H),

14 (e)(2)(H), (e)(3)(A), (e)(3)(C)(iii), (f)(1),

15 (p)(1), (q)(1), and (r), by striking ‘‘1995’’ each

16 place it appears and inserting ‘‘1998’’;

17 (C) in the heading of subsection

18 (c)(1)(B)(ii), by striking ‘‘AND 1995’’ and insert19 ing ‘‘THROUGH 1998’’;

20 (D) in subsection (c)(1)(B)(ii), by striking

21 ‘‘and 1995’’ and inserting ‘‘through 1998’’;

22 (E) in the headings of subsections

23 (e)(1)(G) and (e)(1)(H), by striking ‘‘1995’’

24 both places it appears and inserting ‘‘1998’’; and
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1 (F) in subsection (g)(1), by striking ‘‘and

2 1995’’ and inserting ‘‘through 1998’’.

3 (2) FOOD, AGRICULTURE, CONSERVATION, AND

4 TRADE ACT OF 1990.—Section 402 of the Food, Ag5 riculture, Conservation, and Trade Act of 1990 (7

6 U.S.C. 1444b note) is amended—

7 (A) in the section heading, by striking

8 ‘‘1995’’ and inserting ‘‘1998’’; and

9 (B) by striking ‘‘1995’’ and inserting

10 ‘‘1998’’.

11 (3) RECOURSE LOAN PROGRAM FOR SILAGE.—

12 Section 403 of the Food Security Act of 1985 (7

13 U.S.C. 1444e–1) is amended by striking ‘‘1996’’ and

14 inserting ‘‘1999’’.

15 SEC. 1103. UPLAND COTTON PROGRAM.

16 (a) FIVE PERCENT REDUCTION IN PAYMENT

17 ACRES.—

18 (1) REDUCTION.—Subsection (c)(1)(C)(ii) of

19 section 103B of the Agricultural Act of 1949 (7

20 U.S.C. 1444–2) is amended by striking ‘‘85 per21 cent’’ and inserting ‘‘80 percent’’.

22 (2) APPLICATION OF AMENDMENT.—The

23 amendment made by paragraph (1) shall apply be24 ginning with the 1994 crop of upland cotton.
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1 (b) CONTINUATION OF DEFICIT REDUCTION ACTIVI2 TIES IN CROP YEARS AFTER 1995.—

3 (1) AGRICULTURAL ACT OF 1949.—(A) Section

4 103(h)(16) of the Agricultural Act of 1949 (7

5 U.S.C. 1444(h)(16)) is amended by striking ‘‘1996’’

6 and inserting ‘‘1999’’.

7 (B) Section 103B of such Act (7 U.S.C. 1444–

8 2) is further amended—

9 (i) in the section heading, by striking

10 ‘‘1995’’ and inserting ‘‘1998’’;

11 (ii) in subsections (a)(1), (b)(1), (c)(1)(A),

12 (c)(1)(B)(ii), (e)(3)(A), (f)(1), and (o), by strik13 ing ‘‘1995’’ each place it appears and inserting

14 ‘‘1998’’; and

15 (iii) in subparagraphs (B)(i), (D)(i),

16 (E)(i), and (F)(i) of subsection (a)(5), by strik17 ing ‘‘1996’’ each place it appears and inserting

18 ‘‘1999’’.

19 (C) Section 203(b) of such Act (7 U.S.C.

20 1446d(b)) is amended by striking ‘‘1995’’ and in21 serting ‘‘1998’’.

22 (2) AGRICULTURAL ADJUSTMENT ACT OF

23 1938.—Section 374(a) of the Agricultural Adjust24 ment Act of 1938 (7 U.S.C. 1374(a)) is amended by
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1 striking ‘‘1995’’ each place it appears and inserting

2 ‘‘1998’’.

3 (3) FOOD, AGRICULTURE, CONSERVATION, AND

4 TRADE ACT OF 1990.—Title V of the Food, Agri5 culture, Conservation, and Trade Act of 1990 (Pub6 lic Law 101–624; 104 Stat. 3421) is amended—

7 (A) in section 502 (7 U.S.C. 1342 note),

8 by striking ‘‘1995’’ and inserting ‘‘1998’’;

9 (B) in section 503 (7 U.S.C. 1444 note),

10 by striking ‘‘1995’’ and inserting ‘‘1998’’; and

11 (C) in section 505 (7 U.S.C. 1342 note)—

12 (i) in the section heading, by striking

13 ‘‘1996’’ and inserting ‘‘1999’’; and

14 (ii) by striking ‘‘1996’’ and inserting

15 ‘‘1999’’.

16 SEC. 1104. RICE PROGRAM.

17 (a) FIVE PERCENT REDUCTION IN PAYMENT

18 ACRES.—

19 (1) REDUCTION.—Subsection (c)(1)(C)(ii) of

20 section 101B of the Agricultural Act of 1949 (7

21 U.S.C. 1441–2) is amended by striking ‘‘85 per22 cent’’ and inserting ‘‘80 percent’’.

23 (2) APPLICATION OF AMENDMENT.—The

24 amendment made by paragraph (1) shall apply be25 ginning with the 1994 crop of rice.
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1 (b) CONTINUATION OF DEFICIT REDUCTION ACTIVI2 TIES IN CROP YEARS AFTER 1995.—Such section is fur3 ther amended—

4 (1) in the section heading, by striking ‘‘1995’’

5 and inserting ‘‘1998’’;

6 (2) in subsections (a)(1), (a)(3), (b)(1),

7 (c)(1)(A), (c)(1)(B)(iii), (e)(3)(A), (f)(1), and (n),

8 by striking ‘‘1995’’ each place it appears and insert9 ing ‘‘1998’’;

10 (3) in subsection (a)(5)(D)(i), by striking

11 ‘‘1996’’ and inserting ‘‘1999’’;

12 (4) in the heading of subsection (c)(1)(B)(ii),

13 by striking ‘‘AND 1995’’ and inserting ‘‘THROUGH

14 1998’’; and

15 (5) in subsection (c)(1)(B)(ii), by striking ‘‘and

16 1995’’ and inserting ‘‘through 1998’’.

17 SEC. 1105. DAIRY PROGRAM.

18 (a) ALLOCATION OF PURCHASE PRICES FOR BUTTER

19 AND NONFAT DRY MILK.—

20 (1) IN GENERAL.—Subsection (c)(3) of section

21 204 of the Agricultural Act of 1949 (7 U.S.C.

22 1446e) is amended—

23 (A) in the first sentence of subparagraph

24 (A), by striking ‘‘The Secretary’’ and inserting

25 ‘‘Subject to subparagraph (B), the Secretary’’;
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1 (B) by redesignating subparagraph (B) as

2 subparagraph (C); and

3 (C) by inserting after subparagraph (A)

4 the following new subparagraph:

5 ‘‘(B) GUIDELINES.—In allocating the rate

6 of price support between the purchase prices of

7 butter and nonfat dry milk under this para8 graph, the Secretary may not—

9 ‘‘(i) offer to purchase butter for more

10 than $0.65 per pound; or

11 ‘‘(ii) offer to purchase nonfat dry milk

12 for less than $1.034 per pound.’’.

13 (2) APPLICATION OF AMENDMENTS.—The

14 amendments made by paragraph (1) shall apply with

15 respect to purchases of butter and nonfat dry milk

16 that are made by the Secretary of Agriculture under

17 section 204 of the Agricultural Act of 1949 (7

18 U.S.C. 1446e) on or after the date of the enactment

19 of this Act.

20 (b) REDUCTION IN PRICE RECEIVED.—Subsection

21 (h)(2) of such section is amended—

22 (1) by striking ‘‘and’’ at the end of subpara23 graph (A);

24 (2) by striking the period at the end of sub25 paragraph (B) and inserting ‘‘; and’’; and
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1 (3) by adding at the end the following new sub2 paragraph:

3 ‘‘(C) during each of the calendar years

4 1996 through 1998, 10 cents per hundred5 weight of milk marketed, which rate shall be

6 adjusted on or before May 1 of each of the cal7 endar years 1996 through 1998 in the manner

8 provided in subparagraph (B).’’.

9 (c) CONTINUATION OF DEFICIT REDUCTION ACTIVI10 TIES IN FISCAL YEARS AFTER 1995.—

11 (1) IN GENERAL.—Section 204 of the Agricul12 tural Act of 1949 (7 U.S.C. 1446e) is further

13 amended—

14 (A) in the section heading, by striking

15 ‘‘1995’’ and inserting ‘‘1998’’;

16 (B) in subsections (a), (b), (d)(1)(A),

17 (d)(2)(A), (d)(3), (f), (g)(1), and (k), by strik18 ing ‘‘1995’’ each place it appears and inserting

19 ‘‘1998’’; and

20 (C) in subsection (g)(2), by striking

21 ‘‘1994’’ and inserting ‘‘1997’’.

22 (2) TRANSFER TO MILITARY AND VETERANS

23 HOSPITALS.—Subsections (a) and (b) of section 202

24 of such Act (7 U.S.C. 1446a) are amended by strik-
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1 ing ‘‘1995’’ both places it appears and inserting

2 ‘‘1998’’.

3 (3) FEDERAL MILK MARKETING ORDERS.—Sec4 tion 101(b) of the Agriculture and Food Act of 1981

5 (7 U.S.C. 608c note) is amended by striking ‘‘1995’’

6 and inserting ‘‘1998’’.

7 (4) DAIRY INDEMNITY PROGRAM.—Section 3 of

8 Public Law 90–484 (7 U.S.C. 450l) is amended by

9 striking ‘‘1995’’ and inserting ‘‘1998’’.

10 (5) FOOD SECURITY ACT OF 1985.—The Food

11 Security Act of 1985 is amended—

12 (A) in section 153 (15 U.S.C. 713a–14),

13 by striking ‘‘1995’’ and inserting ‘‘1998’’; and

14 (B) in section 1163 (7 U.S.C. 1731 note),

15 by striking ‘‘1995’’ each place it appears and

16 inserting ‘‘1998’’.

17 SEC. 1106. TOBACCO PROGRAM.

18 (a) TEN PERCENT INCREASE IN MARKETING AS19 SESSMENT.—Subsection (g)(1) of section 106 of the Agri20 cultural Act of 1949 (7 U.S.C. 1445) is amended by strik21 ing ‘‘equal to’’ and all that follows through the period and

22 inserting the following: ‘‘equal to—

23 ‘‘(A) in the case of the 1991 through 1993

24 crops of tobacco, .5 percent of the national average
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1 price support level for each such crop as otherwise

2 provided for in this section; and

3 ‘‘(B) in the case of the 1994 through 1998

4 crops of tobacco, .55 percent of the national average

5 price support level for each such crop as otherwise

6 provided for in this section.’’.

7 (b) CONTINUATION OF DEFICIT REDUCTION ACTIVI8 TIES IN FISCAL YEARS AFTER 1995.—Such subsection is

9 further amended by striking ‘‘1995’’ and inserting

10 ‘‘1998’’.

11 (c) ACREAGE-POUNDAGE QUOTAS FOR TOBACCO.—

12 (1) DEFINITIONS.—Subsection (a) of section

13 317 of the Agricultural Adjustment Act of 1938 (7

14 U.S.C. 1314c) is amended—

15 (A) by inserting ‘‘DEFINITIONS.—’’ after

16 ‘‘(a)’’; and

17 (B) by striking paragraphs (2), (3), (4),

18 (5), (6), (7), and (8) and inserting the following

19 new paragraphs:

20 ‘‘(2) FARM ACREAGE ALLOTMENT.—The term

21 ‘farm acreage allotment’ for a tobacco farm, other

22 than a new tobacco farm, means the acreage allot23 ment determined by dividing the farm marketing

24 quota by the farm yield.
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1 ‘‘(3) FARM YIELD.—The term ‘farm yield’

2 means the yield per acre for a farm determined ac3 cording to regulations issued by the Secretary and

4 which would be expected to result in a quality of to5 bacco acceptable to the tobacco trade.

6 ‘‘(4) FARM MARKETING QUOTA.—

7 ‘‘(A) IN GENERAL.—The term ‘farm mar8 keting quota’ for a farm for a marketing year

9 means a number that is equal to the number of

10 pounds of tobacco determined by multiplying—

11 ‘‘(i) the farm marketing quota for the

12 farm for the previous marketing year

13 (prior to any adjustment for

14 undermarketing or overmarketing); by

15 ‘‘(ii) the national factor.

16 ‘‘(B) ADJUSTMENT.—The farm marketing

17 quota determined under subparagraph (A) for a

18 marketing year shall be increased for

19 undermarketing or decreased for overmarketing

20 by the number of pounds by which marketings

21 of tobacco from the farm during the immediate

22 preceding marketing year (if marketing quotas

23 were in effect for that year under the program

24 established by this section) is less than or ex25 ceeds the farm marketing quota for such year.
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1 Notwithstanding the preceding sentence, the

2 farm marketing quota for a marketing year

3 shall not be increased under this subparagraph

4 for undermarketing by an amount in excess of

5 the farm marketing quota determined for the

6 farm for the immediately preceding year prior

7 to any increase for undermarketing or decrease

8 for overmarketing. If due to excess marketing

9 in the preceding marketing year the farm mar10 keting quota for the marketing year is reduced

11 to zero pounds without reflecting the entire re12 duction required, the additional reduction shall

13 be made for the subsequent marketing year or

14 years.

15 ‘‘(5) NATIONAL FACTOR.—The term ‘national

16 factor’ for a marketing year means a number ob17 tained by dividing—

18 ‘‘(A) the national marketing quota (less

19 the reserve provided for under subsection (e));

20 by

21 ‘‘(B) the sum of the farm marketing quo22 tas (prior to any adjustments for

23 undermarketing or overmarketing) for the im24 mediate preceding marketing year for all farms

25 for which marketing quotas for the kind of to-
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1 bacco involved will be determined for such suc2 ceeding marketing year.’’.

3 (2) CONFORMING AMENDMENTS.—Such section

4 is further amended—

5 (A) in the first sentence of subsection (b),

6 by striking ‘‘and the national acreage allotment

7 and national average yield goal for the 1965

8 crop of Flue-cured tobacco,’’;

9 (B) in the first sentence of subsection (c),

10 by striking ‘‘and at the same time announce the

11 national acreage allotment and national average

12 yield goal’’;

13 (C) in subsection (d)—

14 (i) in the sixth sentence, by striking ‘‘,

15 national acreage allotment, and national

16 average yield goal’’;

17 (ii) in the eighth sentence, by striking

18 ‘‘, national acreage allotment and national

19 average yield goal’’; and

20 (iii) in the ninth sentence, by striking

21 ‘‘, national acreage allotment, and national

22 average goal are’’ and inserting ‘‘is’’;

23 (D) in subsection (e)—

24 (i) in the first sentence, by striking

25 ‘‘No farm acreage allotment or farm yield
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1 shall be established’’ and inserting ‘‘A

2 farm marketing quota and farm yield shall

3 not be established’’;

4 (ii) in the second sentence, by striking

5 ‘‘acreage allotment’’ both places it appears

6 and inserting ‘‘marketing quota’’;

7 (iii) in the second sentence, by strik8 ing ‘‘acreage allotments’’ both places it ap9 pears and inserting ‘‘marketing quotas’’;

10 and

11 (iv) in the last sentence, by striking

12 ‘‘acreage allotment’’ and inserting ‘‘mar13 keting quota’’; and

14 (E) in subsection (g)—

15 (i) in paragraph (1), by striking

16 ‘‘paragraph (a)(8)’’ and inserting ‘‘sub17 section (a)(4)’’; and

18 (ii) in paragraph (3), by striking

19 ‘‘subsection (a)(8)’’ and inserting ‘‘sub20 section (a)(4)’’.

21 (3) FARM MARKETING QUOTA REDUCTIONS.—

22 Subsection (f) of such section is amended to read as

23 follows:

24 ‘‘(f) CAUSES FOR FARM MARKETING QUOTA REDUC25 TIONS.—(1) When an acreage-poundage program is in ef-
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1 fect for any kind of tobacco under this section, the farm

2 marketing quota next established for a farm shall be re3 duced by the amount of such kind of tobacco produced

4 on the farm—

5 ‘‘(A) which was marketed as having been pro6 duced on a different farm;

7 ‘‘(B) for which proof of disposition is not fur8 nished as required by the Secretary;

9 ‘‘(C) on acreage equal to the difference between

10 the acreage reported by the farm operator or a duly

11 authorized representative and the determined acre12 age for the farm; and

13 ‘‘(D) as to which any producer on the farm

14 files, or aids, or acquiesces, in the filing of any false

15 report with respect to the production or marketing

16 of tobacco.

17 ‘‘(2) If the Secretary, through the local committee,

18 finds that no person connected with a farm caused, aided,

19 or acquiesced in any irregularity described in paragraph

20 (1), the next established farm marketing quota shall not

21 be reduced under this subsection.

22 ‘‘(3) The reduction required under this subsection

23 shall be in addition to any other adjustments made pursu24 ant to this section.
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1 ‘‘(4) In establishing farm marketing quotas for other

2 farms owned by the owner displaced by acquisition of the

3 owner’s land by any agency, as provided in section 378

4 of this Act, increases or decreases in such farm marketing

5 quotas as provided in this section shall be made on ac6 count of marketings below or in excess of the farm mar7 keting quota for the farm acquired by the agency.

8 ‘‘(5) Acreage allotments and farm marketing quotas

9 determined under this section may (except in the case of

10 kinds of tobacco not subject to section 316) be leased and

11 sold under the terms and conditions in section 316 of this

12 Act, except that any credit for undermarketing or charge

13 for overmarketing shall be attributed to the farm to which

14 transferred.’’.

15 SEC. 1107. SUGAR PROGRAM.

16 (a) TEN PERCENT INCREASE IN MARKETING AS17 SESSMENT.—Subsection (i) of section 206 of the Agricul18 tural Act of 1949 (7 U.S.C. 1446g) is amended—

19 (1) in paragraph (1), by striking ‘‘equal to’’

20 and all that follows through the period and inserting

21 the following: ‘‘equal to—

22 ‘‘(A) in the case of marketings during fis23 cal years 1992 through 1994, .18 cents per

24 pound of raw cane sugar, processed by the

25 processor from domestically produced sugarcane
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1 or sugarcane molasses, that has been marketed

2 (including the transfer or delivery of the sugar

3 to a refinery for further processing or market4 ing); and

5 ‘‘(B) in the case of marketings during fis6 cal years 1995 through 1999, .198 cents per

7 pound of raw cane sugar, processed by the

8 processor from domestically produced sugarcane

9 or sugarcane molasses, that has been marketed

10 (including the transfer or delivery of the sugar

11 to a refinery for further processing or market12 ing).’’; and

13 (2) in paragraph (2), by striking ‘‘equal to’’

14 and all that follows through the period and inserting

15 the following: ‘‘equal to—

16 ‘‘(A) in the case of marketings during fis17 cal years 1992 through 1994, .193 cents per

18 pound of beet sugar, processed by the processor

19 from domestically produced sugar beets or

20 sugar beet molasses, that has been marketed;

21 and

22 ‘‘(B) in the case of marketings during fis23 cal years 1995 through 1999, .2123 cents per

24 pound of beet sugar, processed by the processor
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1 from domestically produced sugar beets or

2 sugar beet molasses, that has been marketed.’’.

3 (b) CONTINUATION OF DEFICIT REDUCTION ACTIVI4 TIES IN CROP YEARS AFTER 1995.—

5 (1) AGRICULTURAL ACT OF 1949.—Section 206

6 of the Agricultural Act of 1949 (7 U.S.C. 1446g) is

7 further amended—

8 (A) in the section heading, by striking

9 ‘‘1995’’ and inserting ‘‘1998’’;

10 (B) in subsections (a), (c), (d)(1), and (j),

11 by striking ‘‘1995’’ each place it appears and

12 inserting ‘‘1998’’; and

13 (C) in paragraphs (1) and (2) of sub14 section (i), as amended by subsection (a), by

15 striking ‘‘1996’’ both places it appears and in16 serting ‘‘1999’’.

17 (2) AGRICULTURAL ADJUSTMENT ACT OF

18 1938.—Section 359b(a)(1) of the Agricultural Ad19 justment Act of 1938 (7 U.S.C. 1359bb(a)(1)) is

20 amended by striking ‘‘1996’’ and inserting ‘‘1999’’.

21 SEC. 1108. OILSEEDS PROGRAM.

22 (a) CONTINUATION OF DEFICIT REDUCTION ACTIVI23 TIES IN CROP YEARS AFTER 1995.—Section 205 of the

24 Agricultural Act of 1949 (7 U.S.C. 1446f) is amended—
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1 (1) in the section heading, by striking ‘‘1995’’

2 and inserting ‘‘1998’’; and

3 (2) in subsections (b), (c), (e)(1), and (n), by

4 striking ‘‘1995’’ each place it appears and inserting

5 ‘‘1998’’.

6 SEC. 1109. PEANUT PROGRAM.

7 (a) ASSESSMENT TO COVER UNANTICIPATED LOSSES

8 IN ADMINISTERING THE PROGRAM.—

9 (1) ADDITIONAL ASSESSMENT.—Section 108B

10 of the Agricultural Act of 1949 (7 U.S.C. 1445c–3)

11 is amended—

12 (A) by redesignating subsection (h) as sub13 section (i); and

14 (B) by inserting after subsection (g) the

15 following new subsection:

16 ‘‘(h) ADDITIONAL MARKETING ASSESSMENT.—

17 ‘‘(1) TWO PERCENT ASSESSMENT.—In addition

18 to the marketing assessment required by subsection

19 (g), the Secretary shall also provide for a nonrefund20 able marketing assessment applicable to each of the

21 1993 through 1998 crops of peanuts and collected

22 and paid in accordance with this subsection. The as23 sessment shall be on a per pound basis in an amount

24 equal to 2 percent of the national average quota or

25 additional peanut support rate per pound, as appli-
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1 cable, for the applicable crop. No peanuts shall be

2 assessed more than 2 percent of the applicable sup3 port rate under this subsection.

4 ‘‘(2) FIRST PURCHASERS.—Except as provided

5 under paragraphs (3) and (4), the first purchaser of

6 peanuts shall—

7 ‘‘(A) collect from the producer a marketing

8 assessment equal to 1 percent of the applicable

9 national average support rate times the quan10 tity of peanuts acquired;

11 ‘‘(B) pay, in addition to the amount col12 lected under subparagraph (A), a marketing as13 sessment in an amount equal to 1 percent of

14 the applicable national average support rate

15 times the quantity of peanuts acquired; and

16 ‘‘(C) remit the amounts required under

17 subparagraphs (A) and (B) to the Commodity

18 Credit Corporation in a manner specified by the

19 Secretary.

20 ‘‘(3) OTHER PRIVATE MARKETINGS.—In the

21 case of a private marketing by a producer directly

22 to a consumer through a retail or wholesale outlet

23 or in the case of a marketing by the producer out24 side of the continental United States, the producer

25 shall be responsible for the full amount of the as-
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1 sessment under this subsection and shall remit the

2 assessment by such time as is specified by the

3 Secretary.

4 ‘‘(4) LOAN PEANUTS.—In the case of peanuts

5 that are pledged as collateral for a price support

loan made under this section, 1 6 ⁄2 of the assessment

7 under this subsection shall be deducted from the

8 proceeds of the loan. The remainder of the assess9 ment shall be paid by the first purchaser of the pea10 nuts as provided in subparagraph (B) of paragraph

11 (2). For purposes of computing net gains on peanuts

12 under this section, the reduction in loan proceeds

13 under this subsection shall be treated as having been

14 paid to the producer.

15 ‘‘(5) RESERVE ACCOUNT.—

16 ‘‘(A) ESTABLISHMENT.—The Secretary

17 shall establish in the Commodity Credit Cor18 poration a reserve account to be administered

19 by the Secretary for purposes of this section.

20 There shall be deposited in the reserve account

21 for each crop of peanuts an amount equal to—

22 ‘‘(i) the total amount remitted to the

23 Commodity Credit Corporation under para24 graphs (2) and (3) as the payment of the
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1 marketing assessment applicable to that

2 crop of peanuts under this subsection; and

3 ‘‘(ii) the total amount deducted from

4 the proceeds of a price support loan or

5 paid by first purchasers under paragraph

6 (4) as the payment of the marketing as7 sessment applicable to that crop of peanuts

8 under this subsection.

9 ‘‘(B) USE OF RESERVE ACCOUNT.—The

10 Secretary shall use amounts in the reserve ac11 count established in this paragraph to cover

12 losses incurred by the Commodity Credit Cor13 poration on the sale or disposal of peanuts for

14 which price support has been provided under

15 this section. Funds in the reserve account shall

16 be made available until expended.

17 ‘‘(6) APPLICATION OF OTHER PROVISIONS.—

18 Paragraphs (2)(B), (5), and (6) of subsection (g)

19 shall apply with respect to the marketing assessment

20 required by this subsection.’’.

21 (2) EFFECTIVE DATE.—The amendments made

22 by paragraph (1) shall take effect 15 days after the

23 date of the enactment of this Act.

24 (b) CONTINUATION OF DEFICIT REDUCTION ACTIVI25 TIES IN CROP YEARS AFTER 1995.—
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1 (1) AGRICULTURAL ACT OF 1949.—Section

2 108B of the Agricultural Act of 1949 (7 U.S.C.

3 1445c–3) is further amended—

4 (A) in the section heading, by striking

5 ‘‘1995’’ and inserting ‘‘1998’’;

6 (B) in subsections (a)(1), (a)(2), (b)(1),

7 and (g)(1), by striking ‘‘1995’’ each place it ap8 pears and inserting ‘‘1998’’; and

9 (C) in subsection (i) (as redesignated by

10 subsection (a)(1)(A)), by striking ‘‘1995’’ and

11 inserting ‘‘1998’’.

12 (2) AGRICULTURAL ADJUSTMENT ACT OF

13 1938.—Part VI of subtitle B of title III of the Agri14 cultural Adjustment Act of 1938 is amended—

15 (A) in section 358–1 (7 U.S.C. 1358–1)—

16 (i) in the section heading, by striking

17 ‘‘1995’’ and inserting ‘‘1998’’;

18 (ii) in subsections (a)(1), (b)(1)(A),

19 (b)(1)(B), (b)(2)(A), (b)(2)(C), (b)(3), and

20 (f), by striking ‘‘1995’’ each place it ap21 pears and inserting ‘‘1998’’; and

22 (iii) in subsection (d)(1), by inserting

23 after ‘‘5 calendar years’’ the following: ‘‘,

24 or such other period as the Secretary con-
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1 siders to be appropriated in the case of a

2 referendum held after 1995,’’;

3 (B) in section 358b (7 U.S.C. 1358b)—

4 (i) in the section heading, by striking

5 ‘‘1995’’ and inserting ‘‘1998’’; and

6 (ii) in subsection (c), by striking

7 ‘‘1995’’ and inserting ‘‘1998’’;

8 (C) in section 358c(d) (7 U.S.C.

9 1358c(d)), by striking ‘‘1995’’ and inserting

10 ‘‘1998’’; and

11 (D) in section 358e (7 U.S.C. 1359a)—

12 (i) in the section heading, by striking

13 ‘‘1995’’ and inserting ‘‘1998’’; and

14 (ii) in subsection (i), by striking

15 ‘‘1995’’ and inserting ‘‘1998’’.

16 (3) FOOD, AGRICULTURE, CONSERVATION, AND

17 TRADE ACT OF 1990.—Title VIII of the Food, Agri18 culture, Conservation, and Trade Act of 1990 (Pub19 lic Law 101–624; 104 Stat. 3459) is amended—

20 (A) in section 801 (104 Stat. 3459), by

21 striking ‘‘1995’’ and inserting ‘‘1998’’;

22 (B) in section 807 (104 Stat. 3478), by

23 striking ‘‘1995’’ and inserting ‘‘1998’’; and

24 (C) in section 808 (7 U.S.C. 1441 note),

25 by striking ‘‘1995’’ and inserting ‘‘1998’’.
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1 (c) ASSESSMENT UNDER PEANUT MARKETING

2 AGREEMENT.—Section 8b(b)(1) of the Agricultural Ad3 justment Act (7 U.S.C. 608b(b)(1)), reenacted with

4 amendments by the Agricultural Marketing Agreement

5 Act of 1937, is amended—

6 (1) by striking ‘‘and’’ at the end of subpara7 graph (A);

8 (2) by striking the period at the end of sub9 paragraph (B) and inserting ‘‘; and’’; and

10 (3) by adding at the end the following new sub11 paragraph:

12 ‘‘(C) any assessment imposed under such agree13 ment shall apply to peanut handlers (as that term

14 is defined by the Secretary) who have not entered

15 into such an agreement with the Secretary in addi16 tion to those handlers who have entered into such

17 agreement.’’.

18 SEC. 1110. HONEY PROGRAM.

19 (a) REDUCED SUPPORT RATE.—Subsection (a) of

20 section 207 of the Agricultural Act of 1949 (7 U.S.C.

21 1446h) is amended by striking ‘‘than 53.8 cents’’ and in22 serting ‘‘than—

23 ‘‘(1) 53.8 cents per pound for the 1991 through

24 1993 crop years; and
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1 ‘‘(2) 50 cents per pound for the 1994 through

2 1998 crop years.’’.

3 (b) PAYMENT LIMITATIONS.—Subsection (e)(1) of

4 such section is amended—

5 (1) by striking ‘‘and’’ at the end of subpara6 graph (C);

7 (2) by striking subparagraph (D); and

8 (3) by adding at the end the following new sub9 paragraphs:

10 ‘‘(D) $125,000 in the 1994 crop year;

11 ‘‘(E) $100,000 in the 1995 crop year;

12 ‘‘(F) $75,000 in the 1996 crop year; and

13 ‘‘(G) $50,000 in each of the 1997 and sub14 sequent crop years.’’.

15 (c) CONTINUATION OF DEFICIT REDUCTION ACTIVI16 TIES.—Subsections (a), (c)(1), and (j) of such section are

17 amended by striking ‘‘1995’’ each place it appears and

18 inserting ‘‘1998’’.

19 (d) TERMINATION OF ASSESSMENT.—Subsection

20 (i)(1) of such section is amended by striking ‘‘1995’’ and

21 inserting ‘‘1993’’.

22 SEC. 1111. WOOL AND MOHAIR PROGRAM.

23 (a) PAYMENT LIMITATIONS.—Section 704(b)(1) of

24 the National Wool Act of 1954 (7 U.S.C. 1783(b)(1)) is

25 amended—
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1 (1) by striking ‘‘and’’ at the end of subpara2 graph (C);

3 (2) by striking subparagraph (D); and

4 (3) by adding at the end the following new sub5 paragraphs:

6 ‘‘(D) $125,000 for the 1994 marketing

7 year;

8 ‘‘(E) $100,000 for the 1995 marketing

9 year;

10 ‘‘(F) $75,000 for 1996 marketing year;

11 and

12 ‘‘(G) $50,000 for each of the 1997 and

13 subsequent marketing years.’’.

14 (b) MARKETING CHARGES.—Section 706 of National

15 Wool Act of 1954 (7 U.S.C. 1785) is amended by inserting

16 after the second sentence the following new sentence: ‘‘In

17 determining the net sales proceeds and national payment

18 rates for shorn wool and shorn mohair the Secretary shall

19 not deduct marketing charges for commissions, coring, or

20 grading.’’.

21 (c) CONTINUATION OF DEFICIT REDUCTION ACTIVI22 TIES IN CROP YEARS AFTER 1995.—Subsections (a) and

23 (b)(2) of section 703 of the National Wool Act of 1954

24 (7 U.S.C. 1782) are amended by striking ‘‘1995’’ both

25 places it appears and inserting ‘‘1998’’.
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1 (d) TERMINATION OF MARKETING ASSESSMENT.—

2 Section 704(c) of the National Wool Act of 1954 (7 U.S.C.

3 1783(c)) is amended by striking ‘‘1995’’ and inserting

4 ‘‘1992’’.

5 (e) TECHNICAL AND CONFORMING AMENDMENTS.—

6 (1) POLICY OF CONGRESS.—Section 702 of the

7 National Wool Act of 1954 (7 U.S.C. 1781) is

8 amended—

9 (A) by striking ‘‘, strategic,’’ in the first

10 sentence; and

11 (B) by striking ‘‘as a measure of national

12 security and to promote’’ and inserting ‘‘that as

13 a method to promote’’.

14 (2) ELIMINATION OF OBSOLETE PROVISION.—

15 Section 703(b) of the National Wool Act of 1954 (7

16 U.S.C. 1782(b)) is amended—

17 (A) in paragraph (1), by striking ‘‘para18 graphs (2) and (3)’’ and inserting ‘‘paragraph

19 (2)’’;

20 (B) in paragraph (2), by striking ‘‘Except

21 as provided in paragraph (3), for’’ and inserting

22 ‘‘For’’; and

23 (C) by striking paragraph (3).
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1 (3) ADVERTISING AND SALES PROMOTION PRO2 GRAMS.—Section 708 of the National Wool Act of

3 1954 (7 U.S.C. 1787) is amended—

4 (A) by inserting ‘‘(a)’’ after ‘‘SEC. 708.’’;

5 and

6 (B) by adding at the end the following new

7 subsection:

8 ‘‘(b)(1) Except as provided in paragraph (2), to the

9 extent that the Secretary determines that the amount of

10 funds that would otherwise be made available under sub11 section (a) in any marketing year for agreements entered

12 into under such subsection is less than the amount made

13 available under such subsection in the previous marketing

14 year, the difference in such amounts shall be provided

15 from amounts available to support the prices of wool and

16 mohair under section 703 of this title. Any amount pro17 vided under this subsection shall be considered to be an

18 expenditure made in connection with payments to produc19 ers under this title for purposes of section 705 of this title.

20 ‘‘(2) Paragraph (1) shall not apply if the Secretary

21 determines that any portion of the difference between the

22 amounts made available under subsection (a) between two

23 consecutive marketing years is the result of a per unit re24 duction in the amount of the assessment imposed under

25 the agreements entered into under such subsection.’’.
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1 SEC. 1112. CONFORMING AMENDMENTS TO CONTINUE DEF2 ICIT REDUCTION ACTIVITIES IN CROP YEARS

3 AFTER 1995.

4 (a) SUPPLEMENTAL SET-ASIDE AND ACREAGE LIMI5 TATION AUTHORITY.—Section 113 of the Agricultural Act

6 of 1949 (7 U.S.C. 1445h) is amended by striking ‘‘1995’’

7 and inserting ‘‘1998’’.

8 (b) DEFICIENCY AND LAND DIVERSION PAY9 MENTS.—Subsections (a)(1), (b), and (c) of section 114

10 of the Agricultural Act of 1949 (7 U.S.C. 1445j) are

11 amended by striking ‘‘1995’’ each place it appears and

12 inserting ‘‘1998’’.

13 (c) DISASTER PAYMENTS.—Section 208 of the Agri14 cultural Act of 1949 (7 U.S.C. 1446i) is amended—

15 (1) in the section heading, by striking ‘‘1995’’

16 and inserting ‘‘1998’’;

17 (2) in subsection (d), by striking ‘‘1995’’ and

18 inserting ‘‘1998’’.

19 (d) MISCELLANEOUS.—Title IV of the Agricultural

20 Act of 1949 (7 U.S.C. 1421 et seq.) is amended—

21 (1) in section 402(b) (7 U.S.C. 1422(b)), by

22 striking ‘‘1995’’ and inserting ‘‘1998’’;

23 (2) in section 403(c) (7 U.S.C. 1423(c)), by

24 striking ‘‘1995’’ and inserting ‘‘1998’’;

25 (3) in section 406(b) (7 U.S.C. 1426(b))—
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1 (A) by striking ‘‘1995’’ each place it ap2 pears and inserting ‘‘1998’’; and

3 (B) by striking ‘‘1996’’ each place it ap4 pears and inserting ‘‘1999’’; and

5 (4) in section 408(k)(3) (7 U.S.C. 1428(k)(3)),

6 by striking ‘‘1995’’ and inserting ‘‘1998’’.

7 (e) ACREAGE BASE AND YIELD SYSTEM.—Title V of

8 the Agricultural Act of 1949 (7 U.S.C. 1461 et seq.) is

9 amended—

10 (1) in subsections (c)(3) and (h)(2)(A) of sec11 tion 503 (7 U.S.C. 1463), by striking ‘‘1995’’ each

12 place it appears and inserting ‘‘1998’’;

13 (2) in subsections (b)(1) and (b)(2) of section

14 505 (7 U.S.C. 1465), by striking ‘‘1995’’ each place

15 it appears and inserting ‘‘1998’’; and

16 (3) in section 509 (7 U.S.C. 1469), by striking

17 ‘‘1995’’ and inserting ‘‘1998’’.

18 (f) NORMALLY PLANTED ACREAGE.—Section 1001

19 of the Food and Agriculture Act of 1977 (7 U.S.C. 1309)

20 is amended in subsections (a), (b)(1), and (c) by striking

21 ‘‘1995’’ each place it appears and inserting ‘‘1998’’.

22 (g) AGRICULTURE AND FOOD ACT OF 1981.—Sec23 tion 1014 of the Agriculture and Food Act of 1981 (7

24 U.S.C. 4110) is amended by striking ‘‘1995’’ and insert25 ing ‘‘1998’’.
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1 (h) FOOD SECURITY ACT OF 1985.—The Food Secu2 rity Act of 1985 (Public Law 99–198; 99 Stat. 1354) is

3 amended—

4 (1) in section 902(c)(2)(A) (7 U.S.C. 1446

5 note), by striking ‘‘1995’’ and inserting ‘‘1998’’;

6 (2) in paragraphs (1)(A), (1)(B), and (2)(A) of

7 section 1001 (7 U.S.C. 1308), by striking ‘‘1995’’

8 each place it appears and inserting ‘‘1998’’;

9 (3) in section 1001C(a) (7 U.S.C. 1308–3(a)),

10 by striking ‘‘1995’’ both places it appears and in11 serting ‘‘1998’’;

12 (4) in section 1017(b) (7 U.S.C. 1385 note), by

13 striking ‘‘1995’’ and inserting ‘‘1998’’; and

14 (5) in section 1019 (7 U.S.C. 1310a), by strik15 ing ‘‘1995’’ and inserting ‘‘1998’’.

16 (i) OPTIONS PILOT PROGRAM.—The Options Pilot

17 Program Act of 1990 (subtitle E of title XI of Public Law

18 101–624; 104 Stat. 3518; 7 U.S.C. 1421 note) is

19 amended—

20 (1) in subsections (a) and (b) of section 1153,

21 by striking ‘‘1995’’ each place it appears and insert22 ing ‘‘1998’’; and

23 (2) in section 1154(b)(1)(A), by striking

24 ‘‘1995’’ both places it appears and inserting ‘‘1998’’.
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1 (j) READJUSTMENT OF SUPPORT LEVELS.—Section

2 1302 of the Agricultural Reconciliation Act of 1990 (7

3 U.S.C. 1421 note) is amended in subsections (b)(1),

4 (b)(3), and (d)(1)(C) by striking ‘‘1995’’ each place it ap5 pears and inserting ‘‘1998’’.

6 Subtitle B—Restructuring of Loan

7 Programs

8 SEC. 1201. RESTRUCTURING OF CERTAIN LOAN PROGRAMS.

9 (a) LOAN PROGRAMS UNDER THE RURAL ELEC10 TRIFICATION ACT OF 1936.—

11 (1) INSURED LOAN PROGRAMS.—Section 305 of

12 the Rural Electrification Act of 1936 (7 U.S.C. 935)

13 is amended—

14 (A) by striking subsections (b) and (d);

15 (B) by redesignating subsection (c) as sub16 section (b); and

17 (C) by inserting after subsection (b) (as so

18 redesignated) the following:

19 ‘‘(c) INSURED ELECTRIC LOANS.—

20 ‘‘(1) HARDSHIP LOANS.—

21 ‘‘(A) IN GENERAL.—The Administrator

22 shall make insured electric loans at an interest

23 rate of 5 percent per annum to any applicant

24 therefor who meets each of the following

25 requirements:
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1 ‘‘(i) The average revenue per kilowatt2 hour sold by the applicant is not less than

3 120 percent of the average revenue per kil4 owatt-hour sold by all utilities in the State

5 in which the borrower provides service.

6 ‘‘(ii) The average residential revenue

7 per kilowatt-hour sold by the applicant is

8 not less than 120 percent of the average

9 residential revenue per kilowatt-hour sold

10 by all utilities in the State in which the

11 borrower provides service.

12 ‘‘(iii) The average per capita income

13 of the residents receiving electric service

14 from the applicant is less than the average

15 per capita income of the residents of the

16 State in which the applicant provides serv17 ice, or the median household income of the

18 households receiving electric service from

19 the applicant is less than the median

20 household income of the households in the

21 State.

22 ‘‘(B) SEVERE HARDSHIP LOANS.—The Ad23 ministrator may make an insured electric loan

24 at an interest rate of 5 percent per annum to

25 an applicant therefor if, in the sole discretion of
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1 the Administrator, the applicant has experi2 enced a severe hardship.

3 ‘‘(C) LIMITATION.—The Administrator

4 may not make a loan under this paragraph to

5 an applicant for the purpose of furnishing or

6 improving electric service to a consumer located

7 in an urban or urbanized area (as defined by

8 the Bureau of the Census) if the average num9 ber of consumers per mile of line of the total

10 electric system of the applicant exceeds 17.

11 ‘‘(2) MUNICIPAL RATE LOANS.—

12 ‘‘(A) IN GENERAL.—The Administrator

13 shall make insured electric loans, to the extent

14 of qualifying applications therefor, at the inter15 est rate described in subparagraph (B) for the

16 term or terms selected by the applicant pursu17 ant to subparagraph (C).

18 ‘‘(B) INTEREST RATE.—

19 ‘‘(i) IN GENERAL.—Subject to clause

20 (ii), the interest rate described in this sub21 paragraph on a loan to a qualifying appli22 cant shall be—

23 ‘‘(I) the interest rate determined

24 by the Administrator to be equal to

25 the current market yield on outstand-
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1 ing municipal obligations with remain2 ing periods to maturity similar to the

3 term selected by the applicant pursu4 ant to subparagraph (C), but not

5 greater than the rate determined

6 under section 307(a)(3)(A) of the

7 Consolidated Farm and Rural Devel8 opment Act which is based on the cur9 rent market yield on outstanding mu10 nicipal obligations; plus

11 ‘‘(II) if the applicant for the loan

12 makes an election pursuant to sub13 paragraph (D) to include in the loan

14 agreement the right of the applicant

15 to prepay the loan, a rate equal to the

16 amount by which—

17 ‘‘(aa) the interest rate on

18 commercial loans for a similar

19 period that afford the borrower

20 such a right; exceeds

21 ‘‘(bb) the interest rate on

22 commercial loans for such period

23 that do not afford the borrower

24 such a right.
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1 ‘‘(ii) MAXIMUM RATE.—The interest

2 rate described in this subparagraph on a

3 loan to an applicant therefor shall not ex4 ceed 7 percent if—

5 ‘‘(I) the average number of con6 sumers per mile of line of the total

7 electric system of the applicant is less

8 than 5.50; or

9 ‘‘(II)(aa) the average revenue per

10 kilowatt-hour sold by the applicant is

11 more than the average revenue per

12 kilowatt-hour sold by all utilities in

13 the State in which the borrower pro14 vides service; and

15 ‘‘(bb) the average per capita in16 come of the residents receiving electric

17 service from the applicant is less than

18 the average per capita income of the

19 residents of the State in which the ap20 plicant provides service, or the median

21 household income of the households

22 receiving electric service from the ap23 plicant is less than the median house24 hold income of the households in the

25 State.
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1 ‘‘(iii) EXCEPTION.—Clause (ii) shall

2 not apply to a loan to be made to an appli3 cant for the purpose of furnishing or im4 proving electric service to consumers lo5 cated in an urban or urbanized area (as

6 defined by the Bureau of the Census) if

7 the average number of consumers per mile

8 of line of the total electric system of the

9 applicant exceeds 17.

10 ‘‘(C) LOAN TERM.—

11 ‘‘(i) IN GENERAL.—Subject to clause

12 (ii), the applicant for a loan under this

13 paragraph may select the term during

14 which the loan is to be repaid, and, at the

15 end of such term (and any succeeding term

16 selected by the applicant under this sub17 paragraph), may renew the loan for an18 other term selected by the applicant.

19 ‘‘(ii) MAXIMUM TERM.—Notwith20 standing clause (i), the applicant may not

21 select a term that ends more than 35 years

22 after the beginning of the 1st term the ap23 plicant selects under clause (i).

24 ‘‘(D) CALL PROVISION.—The Adminis25 trator shall offer any applicant for a loan under
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1 this paragraph the option to include in the loan

2 agreement the right of the applicant to prepay

3 the loan on terms consistent with similar provi4 sions of commercial loans.

5 ‘‘(3) OTHER SOURCE OF CREDIT NOT RE6 QUIRED IN CERTAIN CASES.—The Administrator

7 may not require any applicant for a loan made

8 under this subsection who is eligible for a loan under

9 paragraph (1) to obtain a loan from another source

10 as a condition of approving the application for the

11 loan or advancing any amount under the loan.

12 ‘‘(d) INSURED TELEPHONE LOANS.—

13 ‘‘(1) HARDSHIP LOANS.—

14 ‘‘(A) IN GENERAL.—The Administrator

15 shall make insured telephone loans, to the ex16 tent of qualifying applications therefor, at an

17 interest rate of 5 percent per annum, to any ap18 plicant who meets each of the following require19 ments:

20 ‘‘(i) The average number of subscrib21 ers per mile of line in the service area of

22 the applicant is not more than 4.

23 ‘‘(ii) The applicant is capable of pro24 ducing net income or margins, before in25 terest payments on the loan applied for, of
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1 not less than 100 percent (but not more

2 than 300 percent) of the interest require3 ments on all of the outstanding and pro4 posed loans of the applicant.

5 ‘‘(iii) The Administrator has approved

6 a telecommunications modernization plan

7 for the State under paragraph (3), and, if

8 the plan was developed by telephone bor9 rowers under this title, the applicant is a

10 participant in the plan.

11 ‘‘(B) AUTHORITY TO WAIVE TIER RE12 QUIREMENT.—The Administrator may waive

13 the requirement of subparagraph (A)(ii) in any

14 case in which the Administrator determines

15 (and sets forth the reasons therefor in writing)

16 that the requirement would prevent emergency

17 restoration of the telephone system of the appli18 cant or result in severe hardship to the appli19 cant.

20 ‘‘(C) EFFECT OF LACK OF FUNDS.—On re21 quest of any applicant who is eligible for a loan

22 under this paragraph for which funds are not

23 available, the applicant shall be considered to

24 have applied for a loan under title IV.

25 ‘‘(2) COST-OF-MONEY LOANS.—
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1 ‘‘(A) IN GENERAL.—The Administrator

2 may make insured telephone loans for the pur3 chase and installation of telephone lines, sys4 tems, and facilities (other than buildings used

5 primarily for administrative purposes, vehicles

6 not used primarily in construction, and personal

7 customer premise equipment) directly related to

8 the furnishing, improvement, or extension of

9 rural telecommunications service or the acquisi10 tion of a rural telecommunications capability, at

11 an interest rate equal to the then cost of money

12 to the Government of the United States for

13 loans of similar maturity, but not more than 7

14 percent per annum, to any applicant therefor

15 who meets the following requirements:

16 ‘‘(i) The average number of subscrib17 ers per mile of line in the service area of

18 the applicant is not more than 15.

19 ‘‘(ii) The applicant is capable of pro20 ducing net income or margins, before in21 terest payments on the loan applied for, of

22 not less than 100 percent (but not more

23 than 500 percent) of the interest require24 ments on all of the outstanding and pro25 posed loans of the applicant.
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1 ‘‘(iii) The Administrator has approved

2 a telecommunications modernization plan

3 for the State under paragraph (3), and, if

4 the plan was developed by telephone bor5 rowers under this title, the applicant is a

6 participant in the plan.

7 ‘‘(B) CALL PROVISION.—The Adminis8 trator shall offer any applicant for a loan under

9 this paragraph the option to include in the loan

10 agreement the right of the applicant to prepay

11 the loan.

12 ‘‘(C) CONCURRENT LOAN AUTHORITY.—On

13 request of any applicant for a loan under this

14 paragraph during any fiscal year, the Adminis15 trator shall—

16 ‘‘(i) consider the application to be for

17 a loan under this paragraph and a loan

18 under section 408; and

19 ‘‘(ii) if the applicant is eligible there20 for, make a loan to the applicant under

21 this paragraph in an amount equal to the

22 amount that bears the same ratio to the

23 total amount of loans for which the appli24 cant is eligible under this paragraph and

25 under section 408, as the amount made
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1 available for loans under this paragraph

2 for the fiscal year bears to the total

3 amount made available for loans under this

4 paragraph and under section 408 for the

5 fiscal year.

6 ‘‘(D) EFFECT OF LACK OF FUNDS.—On

7 request of any applicant who is eligible for a

8 loan under this paragraph for which funds are

9 not available, the applicant shall be considered

10 to have applied for a loan guarantee under sec11 tion 306.

12 ‘‘(3) STATE TELECOMMUNICATIONS MOD13 ERNIZATION PLANS.—

14 ‘‘(A) APPROVAL.—If, within 6 months

15 after final regulations are promulgated to carry

16 out this paragraph, the public utility commis17 sion of any State develops a telecommunications

18 modernization plan that meets the requirements

19 of subparagraph (B), then the Administrator

20 shall approve the plan for the State. Otherwise,

21 the Administrator shall approve any tele22 communications modernization plan for the

23 State that meets such requirements, which is

24 developed by a majority of the borrowers of
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1 telephone loans made under this title who are

2 located in the State.

3 ‘‘(B) REQUIREMENTS.—A telecommuni4 cations modernization plan must, at a mini5 mum, meet the following objectives:

6 ‘‘(i) The plan must provide for the

7 elimination of party line service.

8 ‘‘(ii) The plan must provide for the

9 availability of telecommunications services

10 for improved business, educational, and

11 medical services.

12 ‘‘(iii) The plan must encourage and

13 improve computer networks and informa14 tion highways for subscribers in rural

15 areas.

16 ‘‘(iv) The plan must provide for—

17 ‘‘(I) subscribers in rural areas to

18 be able to receive through telephone

19 lines—

20 ‘‘(aa) multiple voices;

21 ‘‘(bb) video images; and

22 ‘‘(cc) data at a rate of at

23 least 1,000,000 bits of informa24 tion per second; and
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1 ‘‘(II) the proper routing of infor2 mation to subscribers.

3 ‘‘(v) The plan must provide for uni4 form deployment schedules to ensure that

5 advanced services are deployed at the same

6 time in rural and nonrural areas.

7 ‘‘(C) FINALITY OF APPROVAL.—A tele8 communications modernization plan approved

9 under subparagraph (A) may not subsequently

10 be disapproved.’’.

11 (2) RURAL TELEPHONE BANK LOAN PRO12 GRAM.—Section 408 of the Rural Electrification Act

13 of 1936 (7 U.S.C. 948) is amended—

14 (A) in subsection (a)—

15 (i) by striking ‘‘, (1)’’ and all that fol16 lows through ‘‘(3)’’ and inserting ‘‘(1) for

17 the purchase and installation of telephone

18 lines, systems, and facilities (other than

19 buildings used primarily for administrative

20 purposes, vehicles not used primarily in

21 construction, and personal customer

22 premise equipment) directly related to the

23 furnishing, improvement, or extension of

24 rural telecommunications service or the ac-
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1 quisition of a rural telecommunications ca2 pability, and (2)’’; and

3 (ii) by striking ‘‘(2) hereof’’ and in4 serting ‘‘clause (1)’’;

5 (B) in subsection (b)—

6 (i) by amending paragraph (4) to read

7 as follows:

8 ‘‘(4)(A) The Governor of the telephone bank

9 may make a loan under this section only to an appli10 cant therefor who meets the following requirements:

11 ‘‘(i) The average number of subscribers per

12 mile of line in the service area of the applicant

13 is not more than 15.

14 ‘‘(ii) The applicant is capable of producing

15 net income or margins, before interest pay16 ments on the loan applied for, of not less than

17 100 percent (but not more than 500 percent) of

18 the interest requirements on all of the outstand19 ing and proposed loans of the applicant.

20 ‘‘(iii) The Administrator has approved,

21 under section 305(d)(3), a telecommunications

22 modernization plan for the State in which the

23 applicant is located, and, if the plan was devel24 oped by telephone borrowers under title III, the

25 applicant is a participant in the plan.’’;
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1 (ii) in paragraph (8)—

2 (I) by inserting ‘‘(A)’’ after

3 ‘‘(8)’’;

4 (II) by striking ‘‘if such prepay5 ment is not made later than Septem6 ber 30, 1988’’ and inserting ‘‘except

7 for any prepayment penalty provided

8 for in a loan agreement entered into

9 before the date of the enactment of

10 the Omnibus Budget Reconciliation

11 Act of 1993’’; and

12 (III) by adding at the end the

13 following:

14 ‘‘(B) If a borrower prepays part or all of a loan

15 made under this section, then, notwithstanding sec16 tion 407(b), the Governor of the telephone bank

17 shall—

18 ‘‘(i) use the full amount of the prepayment

19 to repay obligations of the telephone bank is20 sued pursuant to section 407(b) before October

21 1, 1991, to the extent any such obligations are

22 outstanding; and

23 ‘‘(ii) in repaying such obligations, first

24 repay the advances bearing the greatest rate of

25 interest.’’; and
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1 (iii) by adding at the end the follow2 ing:

3 ‘‘(9) On request of any applicant for a loan

4 under this section during any fiscal year, the Gov5 ernor of the telephone bank shall—

6 ‘‘(A) consider the application to be for a

7 loan under this section and a loan under section

8 305(d)(2); and

9 ‘‘(B) if the applicant is eligible therefor,

10 make a loan to the applicant under this section

11 in an amount equal to the amount that bears

12 the same ratio to the total amount of loans for

13 which the applicant is eligible under this section

14 and under section 305(d)(2), as the amount

15 made available for loans under this section for

16 the fiscal year bears to the total amount made

17 available for loans under this section and under

18 section 305(d)(2) for the fiscal year.

19 ‘‘(10) On request of any applicant who is eligi20 ble for a loan under this section for which funds are

21 not available, the applicant shall be considered to

22 have applied for a loan under section 305(d)(2).’’;

23 and

24 (C) by adding at the end the following:
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1 ‘‘(e) Loans and advances made under this section on

2 or after November 5, 1990, shall bear interest at a rate

3 determined under this section, taking into account all as4 sets and liabilities of the telephone bank. This subsection

5 shall not apply to loans obligated before the date of the

6 enactment of this subsection.’’.

7 (3) FUNDING.—Section 314 of such Act (7

8 U.S.C. 940d) is amended to read as follows:

9 ‘‘SEC. 314. LIMITATIONS ON AUTHORIZATION OF APPRO10 PRIATIONS.

11 ‘‘(a) IN GENERAL.—There are authorized to be ap12 propriated to the Administrator such sums as may be nec13 essary for the cost of loans in the following amounts, for

14 the following purposes and periods of time:

15 ‘‘(1) ELECTRIC HARDSHIP LOANS.—For loans

16 under section 305(c)(1)—

17 ‘‘(A) for fiscal year 1994, $125,000,000;

18 and

19 ‘‘(B) for each of fiscal years 1995 through

20 1998, $125,000,000, increased by the adjust21 ment percentage for the fiscal year.

22 ‘‘(2) ELECTRIC MUNICIPAL RATE LOANS.—For

23 loans under section 305(c)(2)—

24 ‘‘(A) for fiscal year 1994, $600,000,000;

25 and
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1 ‘‘(B) for each of fiscal years 1995 through

2 1998, $600,000,000, increased by the adjust3 ment percentage for the fiscal year.

4 ‘‘(3) TELEPHONE HARDSHIP LOANS.—For

5 loans under section 305(d)(1)—

6 ‘‘(A) for fiscal year 1994, $125,000,000;

7 and

8 ‘‘(B) for each of fiscal years 1995 through

9 1998, $125,000,000, increased by the adjust10 ment percentage for the fiscal year.

11 ‘‘(4) TELEPHONE COST-OF-MONEY LOANS.—

12 For loans under section 305(d)(2)—

13 ‘‘(A) for fiscal year 1994, $198,000,000;

14 and

15 ‘‘(B) for each of fiscal years 1995 through

16 1998, $198,000,000, increased by the adjust17 ment percentage for the fiscal year.

18 ‘‘(b) ADJUSTMENT PERCENTAGE DEFINED.—As

19 used in subsection (a), the term ‘adjustment percentage’

20 means, with respect to a fiscal year, the percentage (if

21 any) by which—

22 ‘‘(1) the average of the Consumer Price Index

23 (as defined in section 1(f)(5) of the Internal Reve24 nue Code of 1986) for the 12-month period ending
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1 on July 31 of the immediately preceding fiscal year;

2 exceeds

3 ‘‘(2) the average of the Consumer Price Index

4 (as so defined) for the 12-month period ending on

5 July 31, 1993.

6 ‘‘(c) MANDATORY LEVELS.—The Administrator shall

7 make insured loans under this title from the Rural Elec8 trification and Telephone Revolving Fund established

9 under section 301, for the purposes, in the amounts, and

10 for the periods of time specified in subsection (a), as pro11 vided in advance in appropriations Acts.

12 ‘‘(d) AVAILABILITY OF FUNDS FOR INSURED

13 LOANS.—Amounts made available for loans under section

14 305 are authorized to remain available until expended.’’.

15 (4) RULE OF INTERPRETATION.—Section

16 309(a) of such Act (7 U.S.C. 939(a)) is amended by

17 adding at the end the following: ‘‘The preceding sen18 tence shall not be construed to make section

19 408(b)(2) or 412 applicable to this title.’’.

20 (5) MISCELLANEOUS AMENDMENTS.—

21 (A) Section 2 of such Act (7 U.S.C. 902)

22 is amended—

23 (i) by inserting ‘‘(a)’’ before ‘‘The Ad24 ministrator’’;
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1 (ii) by striking ‘‘telephone service in

2 rural areas, as hereinafter provided;’’ and

3 inserting ‘‘electric and telephone service in

4 rural areas, as provided in this Act, and

5 for the purpose of assisting electric bor6 rowers to implement demand side manage7 ment and energy conservation programs’’;

8 and

9 (iii) by adding at the end the follow10 ing:

11 ‘‘(b) Not later than January 1, 1994, the Adminis12 trator shall issue interim regulations to implement the au13 thority contained in subsection (a) to make loans for the

14 purpose of assisting electric borrowers to implement de15 mand side management and energy conservation pro16 grams. If such regulations are not issued by such date,

17 the Administrator shall consider any demand side manage18 ment program which is approved by a State agency to be

19 eligible for such loans.’’

20 (B) Section 4 of such Act (7 U.S.C. 904)

21 is amended by inserting ‘‘and for the furnishing

22 and improving of electric service to persons in

23 rural areas, including by assisting electric bor24 rowers to implement demand side management
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1 and energy conservation programs’’ after

2 ‘‘central station service’’.

3 (C) Section 7 of such Act (7 U.S.C. 907)

4 is amended—

5 (i) by inserting ‘‘(a)’’ before ‘‘The Ad6 ministrator is’’;

7 (ii) by designating the 2nd undesig8 nated paragraph as subsection (b); and

9 (iii) by adding at the end the follow10 ing:

11 ‘‘(c) Section 306(b) of the Consolidated Farm and

12 Rural Development Act shall apply to a borrower of a loan

13 under this Act in the same manner in which such section

14 applies to an association referred to in such section.’’.

15 (D) Section 13 of such Act (7 U.S.C. 913)

16 is amended—

17 (i) by inserting ‘‘, except as provided

18 in section 203(b),’’ before ‘‘shall be deemed

19 to mean any area’’; and

20 (ii) by striking ‘‘city, village, or bor21 ough having a population in excess of fif22 teen hundred inhabitants’’ and inserting

23 ‘‘urban or urbanized area, as defined by

24 the Bureau of the Census’’.
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1 (E) Section 203(b) of such Act (7 U.S.C.

2 923(b)) is amended by striking ‘‘one thousand

3 five hundred’’ and inserting ‘‘5,000’’.

4 (F) Section 307 of such Act (7 U.S.C.

5 937) is amended by adding at the end the fol6 lowing: ‘‘The Administrator may not request

7 any applicant for an electric loan under this Act

8 to apply for and accept a loan in an amount ex9 ceeding 30 percent of the credit needs of the

10 applicant.’’.

11 (G) Section 406 of such Act (7 U.S.C.

12 946) is amended by adding at the end the fol13 lowing:

14 ‘‘(i) The Governor of the telephone bank may invest

15 in obligations of the United States the amounts in the ac16 count in the Treasury of the United States numbered

17 12X8139 (known as ‘the RTB Equity Fund’).’’.

18 (H) Section 18 of such Act (7 U.S.C. 918)

19 is amended—

20 (i) by inserting ‘‘(a) NO CONSIDER21 ATION OF BORROWER’S LEVEL OF GEN22 ERAL FUNDS.—’’ before ‘‘The Adminis23 trator’’; and

24 (ii) by adding at the end the follow25 ing:
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1 ‘‘(b) NO LOAN ORIGINATION FEES.—The Adminis2 trator and the Governor of the telephone bank may not

3 charge any fee or charge not expressly provided in this

4 Act in connection with any loan under this Act.’’.

5 (I) Title III of such Act (7 U.S.C. 931–

6 940d) is amended by inserting after section

7 306B the following:

8 ‘‘SEC. 306C. ELIGIBILITY OF DISTRIBUTION BORROWERS

9 FOR LOANS, LOAN GUARANTEES, AND LIEN

10 ACCOMMODATIONS.

11 ‘‘A distribution borrower not in default on the repay12 ment of any loan made or guaranteed under this Act shall

13 be eligible for a loan, loan guarantee, or lien accommoda14 tion under this title. For the purpose of determining such

15 eligibility, a default by a borrower from which a distribu16 tion borrower purchases wholesale power shall not be con17 sidered a default by the distribution borrower.

18 ‘‘SEC. 306D. ADMINISTRATIVE PROHIBITIONS APPLICABLE

19 TO ELECTRIC BORROWERS.

20 ‘‘The Administrator may not require prior approval

21 of, impose any requirement, restriction, or prohibition with

22 respect to the operations of, or deny or delay the granting

23 of a lien accommodation to, any electric borrower under

24 this Act whose net worth exceeds 110 percent of the out-
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1 standing principal balance on all loans made or guaran2 teed to the borrower by the Administrator.’’.

3 (b) EXPANDED ELIGIBILITY FOR LOANS FOR WATER

4 AND WASTE DISPOSAL FACILITIES.—Section 306(a)(1) of

5 the Consolidated Farm and Rural Development Act (7

6 U.S.C. 1926(a)(1)) is amended by inserting after the 1st

7 sentence the following: ‘‘The Secretary may also make

8 loans to any borrower to whom a loan has been made

9 under the Rural Electrification Act of 1936, for the con10 servation, development, use, and control of water, and the

11 installation of drainage or waste disposal facilities, pri12 marily serving farmers, ranchers, farm tenants, farm la13 borers, rural businesses, and other rural residents.’’.

14 (c) REGULATIONS.—Not later than October 1, 1993,

15 the Administrator of the Rural Development Administra16 tion shall issue interim final rules to implement the

17 amendments made by this section.

18 SEC. 1202. REORGANIZATION OF RURAL DEVELOPMENT

19 FUNCTIONS.

20 (a) ADMINISTRATION OF RURAL ELECTRIFICATION

21 ACT OF 1936 TRANSFERRED TO THE RURAL DEVELOP22 MENT ADMINISTRATION.—

23 (1) IN GENERAL.—The Rural Electrification

24 Act of 1936 (7 U.S.C. 901 et seq.) is amended by
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1 striking all after the enacting clause that precedes

2 section 2 and inserting the following:

3 ‘‘SECTION 1. SHORT TITLE; ADMINISTRATION OF ACT.

4 ‘‘(a) SHORT TITLE.—This Act may be cited as the

5 ‘Rural Electrification Act of 1936’.

6 ‘‘(b) ADMINISTRATION OF ACT.—The Administrator

7 of the Rural Development Administration (in this Act re8 ferred to as the ‘Administrator’) shall carry out this Act

9 under the general direction and supervision of the Sec10 retary of Agriculture.’’.

11 (2) CONFORMING AMENDMENTS.—

12 (A) Section 3(a) of such Act (7 U.S.C.

13 903(a)) is amended by striking ‘‘appointed pur14 suant to the provisions of this Act’’.

15 (B) Section 8 of such Act (7 U.S.C. 908)

16 is amended—

17 (i) by striking ‘‘authorized to be ap18 pointed by this Act’’; and

19 (ii) by striking ‘‘Rural Electrification

20 Administration created by this Act’’ and

21 inserting ‘‘Rural Development Administra22 tion’’.

23 (C) Each of the following provisions of

24 such Act is amended by striking ‘‘Rural Elec-
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1 trification Administration’’ and inserting

2 ‘‘Rural Development Administration’’:

3 (i) Section 306A(b) (7 U.S.C.

4 936a(b)).

5 (ii) Section 403(b) (7 U.S.C. 943(b)).

6 (iii) Section 404 (7 U.S.C. 944).

7 (iv) Section 406(c) (7 U.S.C. 946(c)).

8 (v) Section 410(a)(1) (7 U.S.C.

9 950(a)(1)).

10 (b) OTHER FUNCTIONS OF THE RURAL ELEC11 TRIFICATION ADMINISTRATION TRANSFERRED TO THE

12 RURAL DEVELOPMENT ADMINISTRATION.—Section 364

13 of the Consolidated Farm and Rural Development Act

14 (7 U.S.C. 2006f) is amended by adding at the end the

15 following:

16 ‘‘(g) TRANSFER OF FUNCTIONS OF THE RURAL

17 ELECTRIFICATION ADMINISTRATION TO THE RURAL DE18 VELOPMENT ADMINISTRATION.—

19 ‘‘(1) IN GENERAL.—All rights, interests, obliga20 tions, and duties of the Administrator of the Rural

21 Electrification Administration arising before the

22 date of the enactment of this subsection, from any

23 loan made, insured, or guaranteed by, or other ac24 tion of, the Rural Electrification Administration
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1 shall be vested in the Administrator of the Rural

2 Development Administration.

3 ‘‘(2) REFERENCES.—Any reference in any law,

4 regulation, or order in effect immediately before the

5 date of the enactment of this subsection to the Rural

6 Electrification Administration or to the Adminis7 trator of the Rural Electrification Administration, is

8 deemed to be a reference to the Rural Development

9 Administration or to the Administrator of the Rural

10 Development Administration, respectively.

11 ‘‘(3) EFFECT ON PENDING PROCEEDINGS AND

12 PARTIES TO SUCH PROCEEDINGS.—

13 ‘‘(A) NONABATEMENT OF PROCEEDINGS.—

14 This subsection shall not be construed to abate

15 any proceeding commenced by or against the

16 Rural Electrification Administration or the Ad17 ministrator of the Rural Electrification Admin18 istration.

19 ‘‘(B) EFFECT ON PARTIES.—If an officer

20 of the Rural Electrification Administration, in

21 the official capacity of such officer, is a party

22 to a proceeding pending on the date of the en23 actment of this subsection, then such action

24 shall be continued with the Administrator, or

25 other appropriate officer, of the Rural Develop-
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1 ment Administration substituted or added as a

2 party.

3 ‘‘(4) INCIDENTAL TRANSFERS.—The Secretary

4 shall transfer all personnel from the Rural Elec5 trification Administration to the Rural Development

6 Administration, and shall make such determinations

7 as may be appropriate to carry out this subsection.’’.

8 (c) STRUCTURE OF THE RURAL DEVELOPMENT AD9 MINISTRATION.—Such section 364 (7 U.S.C. 2006f), as

10 amended by subsection (b) of this section, is amended by

11 adding at the end the following:

12 ‘‘(h) STRUCTURE OF THE RURAL DEVELOPMENT AD13 MINISTRATION.—

14 ‘‘(1) DEPUTY ADMINISTRATOR FOR RURAL

15 UTILITIES.—The Administrator of the Rural Devel16 opment Administration shall appoint a Deputy Ad17 ministrator for Rural Utilities who shall

18 administer—

19 ‘‘(A) the programs authorized by the Rural

20 Electrification Act of 1936; and

21 ‘‘(B) the rural water and waste disposal

22 programs administered by the Rural Develop23 ment Administration.
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1 ‘‘(2) ASSISTANT ADMINISTRATORS.—The Ad2 ministrator of the Rural Development Administra3 tion may appoint—

4 ‘‘(A) an Assistant Administrator for the

5 electric programs authorized by the Rural Elec6 trification Act of 1936;

7 ‘‘(B) an Assistant Administrator for the

8 telephone programs authorized by such Act;

9 ‘‘(C) an Assistant Administrator who shall

10 be responsible for—

11 ‘‘(i) rural utility technical engineering

12 standards and specifications; and

13 ‘‘(ii) other utility management and ac14 counting functions assigned by the Admin15 istrator; and

16 ‘‘(D) an Assistant Administrator for water

17 and sewer programs.’’.

18 (d) RURAL ECONOMIC DEVELOPMENT.—

19 (1) IN GENERAL.—Such section 364 (7 U.S.C.

20 2006f), as amended by subsections (b) and (c) of

21 this section, is amended by adding at the end the

22 following:

23 ‘‘(i) RURAL ECONOMIC DEVELOPMENT.—A borrower

24 of a loan or loan guarantee under the Rural Electrification

25 Act of 1936 shall be eligible for assistance under all pro-
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1 grams administered by the Rural Development Adminis2 tration, and the Administrator of the Rural Development

3 Administration shall encourage and facilitate the full par4 ticipation of such a borrower in such programs.

5 ‘‘(j) TECHNICAL ASSISTANCE UNIT.—The Adminis6 trator of the Rural Development Administration shall es7 tablish a technical assistance unit to provide to borrowers

8 under the programs administered by the Rural Develop9 ment Administration advice and guidance on community

10 and economic development activities.’’.

11 (2) CONFORMING REPEAL.—Section 11A of the

12 Rural Electrification Act of 1936 (7 U.S.C. 911a) is

13 hereby repealed.

14 (e) REGULATIONS.—Not later than January 1, 1994,

15 the Administrator of the Rural Development Administra16 tion shall issue interim final rules to implement the

17 amendments made by this section.

18 Subtitle C—Food Stamp Program

19 SEC. 1301. SHORT TITLE.

20 This subtitle may be cited as the ‘‘Mickey Leland

21 Childhood Hunger Relief Act’’.

22 SEC. 1302. REFERENCES TO THE ACT.

23 Except as otherwise provided in this subtitle, ref24 erences in this subtitle to ‘‘the Act’’ and sections of the

25 Act shall be deemed to be references to the Food Stamp
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1 Act of 1977 (7 U.S.C. 2011 et seq.) and the sections of

2 such Act.

3 CHAPTER 1—ENSURING ADEQUATE FOOD

4 ASSISTANCE

5 SEC. 1311. MAXIMUM BENEFIT LEVEL.

6 Section 3(o) of the Act (7 U.S.C. 2012(o)) is amend7 ed by striking ‘‘(4) through’’ and all that follows through

8 the end of the subsection, and inserting the following:

9 ‘‘and (4) on October 1, 1993, and each October 1 there10 after, adjust the cost of such diet to reflect 104 percent

11 of the cost of the thrifty food plan in the preceding June

12 (without regard to adjustments made to such costs in any

13 previous year), as determined by the Secretary, and round

14 the result to the nearest lower dollar increment for each

15 household size.’’.

16 SEC. 1312. HELPING LOW-INCOME HIGH SCHOOL STU17 DENTS.

18 Section 5(d)(7) of the Act (7 U.S.C. 2014(d)(7)) is

19 amended by striking ‘‘who is a student, and who has not

20 attained his eighteenth birthday’’ and inserting ‘‘who is

21 an elementary or secondary school student, and who is 21

22 years of age or younger’’.

23 SEC. 1313. FAMILIES WITH HIGH SHELTER EXPENSES.

24 (a) COMPUTATION.—Section 5(e) of the Act (7

25 U.S.C. 2014(e)) is amended—
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1 (1) in the fourth sentence by striking ‘‘: Pro2 vided, That the amount’’ and all that follows

3 through ‘‘June 30’’; and

4 (2) in the fifth sentence by striking ‘‘under

5 clause (2) of the preceding sentence’’.

6 (b) LIMITATIONS.—

7 (1) FISCAL YEAR 1994.—Effective on the date

8 of enactment of this Act, section 5(e) of the Act (7

9 U.S.C. 2014(e)) is amended by inserting after the

10 fourth sentence the following:

11 ‘‘In the 12-month period ending September 30, 1994, such

12 excess shelter expense deduction shall not exceed $214 a

13 month in the 48 contiguous States and the District of Co14 lumbia, and shall not exceed, in Alaska, Hawaii, Guam,

15 and the Virgin Islands of the United States, $372, $305,

16 $259, and $158 a month, respectively.’’.

17 (2) REMOVAL OF CAP.—Effective October 1,

18 1994, section 5(e) of the Act (7 U.S.C. 2014(e)), as

19 amended by paragraph (1), is amended by striking

20 the fifth sentence.

21 SEC. 1314. RESOURCE EXCLUSION FOR EARNED INCOME

22 TAX CREDITS.

23 Section 5(g)(3) of the Act (7 U.S.C. 2014(g)(3)) is

24 amended by adding at the end the following:
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1 ‘‘The Secretary shall also exclude from financial resources

2 any earned income tax credits received by any member of

3 the household for a period of 12 months from receipt if

4 such member was participating in the food stamp program

5 at the time the credits were received and participated in

6 such program continuously during the twelve-month

7 period.’’.

8 SEC. 1315. HOMELESS FAMILIES IN TRANSITIONAL HOUS9 ING.

10 Section 5(k)(2)(F) of the Act (7 U.S.C.

11 2014(k)(2)(F)) is amended to read as follows:

12 ‘‘(F) housing assistance payments made to a

13 third party on behalf of the household residing in

14 transitional housing for the homeless;’’.

15 SEC. 1316. HOUSEHOLDS BENEFITING FROM GENERAL AS16 SISTANCE VENDOR PAYMENTS.

17 Section 5(k)(1)(B) of the Act (7 U.S.C.

18 2014(k)(1)(B)) is amended by striking ‘‘living expenses’’

19 and inserting ‘‘housing expenses, not including energy or

20 utility-cost assistance,’’.

21 SEC. 1317. CONTINUING BENEFITS TO ELIGIBLE HOUSE22 HOLDS.

23 Section 8(c)(2)(B) of the Act (7 U.S.C.

24 2017(c)(2)(B)) is amended by inserting ‘‘of more than one

25 month in’’ after ‘‘following any period’’.
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1 SEC. 1318. IMPROVING THE NUTRITIONAL STATUS OF CHIL2 DREN IN PUERTO RICO.

3 Section 19(a)(1)(A) of the Act (7 U.S.C.

4 2028(a)(1)(A)) is amended by—

5 (1) striking ‘‘$1,091,000,000’’ and inserting

6 ‘‘$1,111,000,000’’; and

7 (2) striking ‘‘$1,133,000,000’’ and inserting

8 ‘‘$1,158,000,000’’.

9 CHAPTER 2—PROMOTING SELF

10 SUFFICIENCY

11 SEC. 1321. INCOME EXCLUSION FOR EDUCATION ASSIST12 ANCE.

13 Section 5 of the Act (7 U.S.C. 2014) is amended

14 by—

15 (1) amending subsection (d)(3) to read as

16 follows:

17 ‘‘(3) all educational loans on which payment is

18 deferred (including any loan origination fees or in19 surance premiums associated with such loans),

20 grants, scholarships, fellowships, veterans’ edu21 cational benefits, and the like awarded to a house22 hold member enrolled at a recognized institution of

23 post-secondary education, at a school for the handi24 capped, in a vocational education program, or in a

25 program that provides for completion of a secondary

26 school diploma or obtaining the equivalent thereof,’’;
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1 (2) striking ‘‘, and no portion’’ and all that fol2 lows through ‘‘for living expenses,’’ in subsection

3 (d)(5); and

4 (3) striking subsection (k)(3).

5 SEC. 1322. CHILD SUPPORT PAYMENTS TO NON-HOUSE6 HOLD MEMBERS.

7 Section 5(d)(6) of the Act (7 U.S.C. 2014(d)6)) is

8 amended by striking the comma at the end and inserting

9 the following—

10 ‘‘: Provided, That child support payments made by a

11 household member to or for a person who is not a member

12 of the household shall be excluded from the income of the

13 household of the person making such payments if such

14 household member was legally obligated to make such pay15 ments: Provided further, That the Secretary is authorized

16 to prescribe by regulation the method(s), which may in17 clude calculation on a retrospective basis, that State agen18 cies may use to determine the amount of child support

19 excluded,’’.

20 SEC. 1323. CHILD SUPPORT EXCLUSION.

21 Section 5 of the Act (7 U.S.C. 2014) is amended—

22 (1) in subsection (d)(13)—

23 (A) by striking ‘‘at the option’’ and all

24 that follows through ‘‘subsection (m),’’ and in25 serting ‘‘(A)’’; and
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1 (B) by adding at the end ‘‘or (B) the first

2 $50 of any child support payment in the month

3 received if such payment was made by the ab4 sent parent in the month when due,’’; and

5 (2) by striking subsection (m).

6 SEC. 1324. IMPROVING ACCESS TO EMPLOYMENT AND

7 TRAINING ACTIVITIES.

8 (a) DEPENDENT CARE DEDUCTION.—Section 5(e) of

9 the Act (7 U.S.C. 2014(e)) is amended in clause (1) of

10 the fourth sentence by—

11 (1) striking ‘‘$160 a month for each depend12 ent’’ and inserting ‘‘$200 a month for a dependent

13 child under 2 years of age and $175 a month for

14 any other dependent’’; and

15 (2) striking ‘‘, regardless of the dependent’s

16 age,’’.

17 (b) REIMBURSEMENTS TO PARTICIPANTS IN EM18 PLOYMENT AND TRAINING PROGRAMS.—

19 (1) COSTS OTHER THAN COSTS OF DEPENDENT

20 CARE.—Section 6(d)(4)(I)(i)(I) of the Act (7 U.S.C.

21 2015(d)(4)(I)(i)(I)) is amended by striking ‘‘, except

22 that’’ and all that follows through ‘‘per month’’ and

23 inserting the following—

24 ‘‘(which may include reimbursements for costs of

25 any supportive services of the kinds provided or re-
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1 imbursed under the State’s plan under part F of

2 title IV of the Social Security Act (42 U.S.C. 681

3 et seq.)), except that State agencies may establish

4 limits on reimbursements to participants for such

5 costs, which limits may not be less than $25 per

6 month’’.

7 (2) COSTS OF DEPENDENT CARE.—Section

8 6(d)(4)(I)(i)(II) of the Act (7 U.S.C.

9 2015(d)(4)(I)(i)(II)) is amended to read as follows—

10 ‘‘(II) the actual costs of such dependent care

11 expenses that are determined by the State agency to

12 be necessary for the participation of an individual in

13 the program (other than an individual who is the

14 caretaker relative of a dependent in a family receiv15 ing benefits under part A of title IV of the Social

16 Security Act (42 U.S.C. 601 et seq.) in a local area

17 where an employment, training, or education pro18 gram under title IV of such Act is in operation, or

19 was in operation, on the date of enactment of the

20 Hunger Prevention Act of 1988) up to any limit set

21 by the State agency (which limit shall not be less

22 than the limit for the dependent care deduction

23 under section 5(e)), but in no event shall such pay24 ment or reimbursements exceed the applicable local

25 market rate as determined by procedures consistent
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1 with any such determination under the Social Secu2 rity Act. Individuals subject to the program under

3 this paragraph may not be required to participate if

4 dependent costs exceed the limit established by the

5 State agency under this subclause or other actual

6 costs exceed any limit established under subclause

7 (I).’’.

8 (c) CONFORMING AMENDMENTS.—Section 16(h)(3)

9 of the Act (7 U.S.C. 2025(h)(3)) is amended by—

10 (1) striking ‘‘$25’’ and all that follows through

11 ‘‘dependent care costs)’’, and inserting ‘‘the payment

12 made under section 6(d)(4)(I)(i)(I) and subject to

13 any limits the State has established under such sec14 tion’’; and

15 (2) striking ‘‘representing $160 per month per

16 dependent’’ and inserting ‘‘equal to the payment

17 made under section 6(d)(4)(I)(i)(II) but not more

18 than the applicable local market rate,’’.

19 SEC. 1325. VEHICLES NEEDED TO SEEK AND CONTINUE EM20 PLOYMENT AND FOR HOUSEHOLD TRANS21 PORTATION.

22 Section 5(g)(2) of the Act (7 U.S.C. 2014(g)(2)) is

23 amended by striking ‘‘$4,500’’ and inserting the following:

24 ‘‘a level set by the Secretary, which shall be $5,500

25 through September 30, 1994, and which shall be adjusted
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1 on each October 1 thereafter to reflect changes in the new

2 car component of the Consumer Price Index for All Urban

3 Consumers published by the Bureau of Labor Statistics

4 for the 12-month period ending on June 30 preceding the

5 date of such adjustment and rounded to the nearest $50’’.

6 SEC. 1326. VEHICLES NECESSARY TO CARRY FUEL OR

7 WATER.

8 Section 5(g)(2) of the Act (7 U.S.C. 2014(g)(2)) is

9 amended by adding at the end the following:

10 ‘‘The Secretary shall exclude from financial resources the

11 value of a vehicle that a household depends upon to carry

12 fuel for heating or water for home use when such trans13 ported fuel or water is the primary source of fuel or water

14 for the household.’’.

15 SEC. 1327. DEMONSTRATION PROJECTS TESTING RE16 SOURCE ACCUMULATION.

17 Section 17 of the Act (7 U.S.C. 2026) is amended

18 by adding at the end the following:

19 ‘‘(k) The Secretary may conduct, under such terms

20 and conditions as the Secretary may prescribe, for a pe21 riod not to exceed 4 years, demonstration projects to test

22 allowing eligible households to accumulate resources up to

23 $10,000 for later expenditure for a purpose directly relat24 ed to improving the education, training, or employability

25 (including self employment) of household members, for the
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1 purchase of a home for the household, for a change of

2 the household’s residence, or for making major repairs to

3 the household’s home. The Secretary is authorized to pay

4 up to $100,000,000 in food stamp benefits to households

5 participating in such demonstration projects during the

6 period in which such projects are in operation.’’.

7 CHAPTER 3—SIMPLIFYING THE

8 PROVISION OF FOOD ASSISTANCE

9 SEC. 1331. SIMPLIFYING THE HOUSEHOLD DEFINITION FOR

10 HOUSEHOLDS WITH CHILDREN AND OTHERS.

11 Section 3(i) of the Act (7 U.S.C. 2012(i)) is

12 amended—

13 (1) in the first sentence—

14 (A) by striking ‘‘(2)’’ and inserting ‘‘or

15 (2)’’;

16 (B) by striking ‘‘, or (3) a parent of minor

17 children and that parent’s children’’ and all

18 that follows through ‘‘parents and children, or

19 siblings, who live together’’, and inserting the

20 following:

21 ‘‘. Spouses who live together, parents and their chil22 dren 21 years of age or younger (who are not them23 selves parents living with their children or married

24 living with their spouses) who live together, and chil25 dren (excluding foster children) under 18 years of
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1 age who live with and are under the parental control

2 of a person other than their parent together with the

3 person exercising parental control’’; and

4 (C) striking ‘‘, unless one of ’’ and all that

5 follows through ‘‘disabled member’’; and

6 (2) in the second sentence by striking ‘‘clause

7 (1) of the preceding sentence’’ and inserting ‘‘the

8 preceding sentences’’.

9 SEC. 1332. ELIGIBILITY OF CHILDREN OF PARENTS PAR10 TICIPATING IN DRUG OR ALCOHOL ABUSE

11 TREATMENT PROGRAMS.

12 Section 3 of the Act (7 U.S.C. 2012) is amended—

13 (1) in the last sentence of subsection (i) by in14 serting ‘‘, together with their children,’’ after ‘‘nar15 cotics addicts or alcoholics’’; and

16 (2) in subsection (g)(5) by inserting ‘‘, and

17 their children,’’ after ‘‘or alcoholics’’.

18 SEC. 1333. RESOURCES OF HOUSEHOLDS WITH DISABLED

19 MEMBERS.

20 Section 5(g)(1) of the Act (7 U.S.C. 2014(g)(1)) is

21 amended by striking ‘‘a member who is 60 years of age

22 or older,’’ and inserting ‘‘an elderly or disabled member,’’.
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1 SEC. 1334. ENSURING ADEQUATE FUNDING FOR THE FOOD

2 STAMP PROGRAM.

3 Section 18 of the Act (7 U.S.C. 2027) is amended

4 by—

5 (1) striking the third and fourth sentences of

6 subsection (a)(1) and inserting the following—

7 ‘‘The Secretary shall, once every 3 months, submit a re8 port to the Committee on Agriculture of the House of Rep9 resentatives and to the Committee on Agriculture, For10 estry, and Nutrition of the Senate setting forth the Sec11 retary’s best estimate of the preceding quarter’s expendi12 ture, including administrative costs, as well as the cumu13 lative totals for the fiscal year. In each quarterly report,

14 the Secretary shall also state whether there is reason to

15 believe that supplemental appropriations will be needed to

16 support the operation of the program through the end of

17 the fiscal year.’’; and

18 (2) striking subsections (b), (c), and (d) and re19 designating subsections (e) and (f) as subsections

20 (b) and (c), respectively.
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1 CHAPTER 4—IMPROVING PROGRAM

2 INTEGRITY

3 SEC. 1341. USE AND DISCLOSURE OF INFORMATION PRO4 VIDED BY RETAIL FOOD STORES AND WHOLE5 SALE FOOD CONCERNS.

6 Section 9(c) of the Act (7 U.S.C. 2018(c)) is

7 amended—

8 (1) in the second sentence by inserting after

9 ‘‘disclosed to and used by’’ the following:

10 ‘‘State and Federal law enforcement and investigative

11 agencies for the purposes of administering or enforcing the

12 provisions of this Act or any other Federal or State law

13 and the regulations issued under this Act or such law,

14 and’’;

15 (2) by inserting after the second sentence the

16 following:

17 ‘‘An officer or employee of an agency described in the pre18 ceding sentence who publishes, divulges, discloses, or

19 makes known in any manner or to any extent not author20 ized by Federal law any information obtained under the

21 authority granted by this subsection shall be subject to

22 section 1905 of title 18 of the United States Code.’’; and

23 (3) in the last sentence by striking ‘‘Such pur24 poses shall not exclude’’ and inserting the

25 following—
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1 ‘‘Such regulations shall establish the criteria to be used

2 by the Secretary to determine that such information is

3 needed. Such regulations shall not prohibit’’.

4 SEC. 1342. ADDITIONAL MEANS OF CLAIMS COLLECTION.

5 (a) SAFEGUARDS.—Section 11(e)(8) of the Act (7

6 U.S.C. 2020(e)(8)) is amended by—

7 (1) striking ‘‘and (B)’’ and inserting ‘‘(B)’’;

8 and

9 (2) striking the semi-colon at the end and in10 serting the following:

11 ‘‘, and (C) such safeguards shall not prevent the use

12 by, or disclosure of such information, to agencies of

13 the Federal Government (including the United

14 States Postal Service) for purposes of collecting the

15 amount of an overissuance of coupons, as deter16 mined under section 13(b) of this Act and excluding

17 claims arising from an error of the State agency,

18 that has not been recovered pursuant to such sec19 tion, from refunds of Federal taxes as authorized

20 pursuant to section 3720A of title 31 of the United

21 States Code, or from Federal pay (including salaries

22 and pensions) as authorized pursuant to section

23 5514 of title 5 of the United States Code;’’.

24 (b) RECOVERY.—Section 13 of the Act (7 U.S.C.

25 2022) is amended by adding the following:
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1 ‘‘(d) The amount of an overissuance of coupons as

2 determined under subsection (b) and except for claims

3 arising from an error of the State agency, that has not

4 been recovered pursuant to such subsection may be recov5 ered from refunds of Federal taxes, as authorized pursu6 ant to section 3720A of title 31 of the United States Code,

7 or from Federal pay (including salaries and pensions) as

8 authorized by section 5514 of title 5 of the United States

9 Code.’’.

10 SEC. 1343. DEMONSTRATION PROJECTS TESTING ACTIVI11 TIES DIRECTED AT STREET TRAFFICKING IN

12 COUPONS.

13 Section 17 of the Act (7 U.S.C. 2026) is amended

14 by adding a new subsection (l) at the end thereof as

15 follows—

16 ‘‘(l) The Secretary may use up to $4 million of funds

17 provided in advance in appropriations Acts for projects au18 thorized by this section in Fiscal Year 1994 to conduct

19 projects in which State or local food stamp agencies test

20 innovative ideas for working with State or local law en21 forcement agencies to investigate and prosecute coupon

22 street trafficking by recipients, buyers, and authorized re23 tail stores.’’.
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1 CHAPTER 5—IMPROVING FOOD STAMP

2 PROGRAM MANAGEMENT

3 SEC. 1351. CLARIFICATION OF CATEGORICAL ELIGIBILITY.

4 Effective on the date of enactment of this Act, section

5 5 of the Act (7 U.S.C. 2014) is amended by—

6 (1) striking ‘‘and the third sentence of section

7 3(i)’’ each place it appears in subsection (a) and in8 serting the ‘‘, the third sentence of section 3(i), and

9 section 20(f)’’; and

10 (2) striking ‘‘II,’’ in subsection (j).

11 SEC. 1352. TECHNICAL AMENDMENTS RELATED TO ELEC12 TRONIC BENEFIT TRANSFER.

13 (a) ELIGIBILITY DISQUALIFICATION OF INDIVID14 UALS.—Section 6(b)(1)(B) of the Act (7 U.S.C.

15 2015(b)(1)(B)) is amended by striking ‘‘or authorization

16 cards’’ and inserting ‘‘, authorization cards, or access

17 devices’’.

18 (b) ELIGIBILITY DISQUALIFICATION OF RETAIL

19 FOOD STORES AND WHOLESALE FOOD CONCERNS.—Sec20 tion 12(b)(3)(B) of the Act (7 U.S.C. 2021(b)(3)(B)) is

21 amended by—

22 (1) striking ‘‘or authorization cards’’ and in23 serting ‘‘, authorization cards, or access devices’’;

24 and
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1 (2) striking ‘‘or cards’’ and inserting ‘‘, cards,

2 or devices’’.

3 SEC. 1353. DISQUALIFICATION OF RECIPIENTS FOR TRAD4 ING FIREARMS, AMMUNITION, EXPLOSIVES,

5 OR CONTROLLED SUBSTANCES FOR COU6 PONS.

7 Section 6(b)(1) of the Act (7 U.S.C. 2015(b)(1)) is

8 amended by striking subdivisions (ii) and (iii) and insert9 ing the following:

10 ‘‘(ii) for a period of 1 year upon—

11 ‘‘(I) the second occasion of any such deter12 mination; or

13 ‘‘(II) the first occasion of a finding of the

14 trading of a controlled substance (as defined in

15 section 102 of the Controlled Substances Act

16 (21 U.S.C. 802)); and

17 ‘‘(iii) permanently upon—

18 ‘‘(I) the third occasion of any such deter19 mination;

20 ‘‘(II) the second occasion of a finding of

21 the trading of a controlled substance (as de22 fined in section 102 of the Controlled Sub23 stances Act (21 U.S.C. 802)) for coupons; or
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1 ‘‘(III) the first occasion of a finding of the

2 trading of firearms, ammunition, or explosives

3 for coupons.’’.

4 SEC. 1354. UNCAPPED CIVIL MONEY PENALTY FOR TRAF5 FICKING IN COUPONS.

6 Effective on the date of enactment of this Act, section

7 12(b)(3)(B) of the Act (7 U.S.C. 2021(b)(3)(B)) is

8 amended by striking ‘‘(except’’ and all that follows

9 through ‘‘) in’’, and inserting ‘‘in’’.

10 SEC. 1355. UNCAPPED CIVIL MONEY PENALTY FOR SELLING

11 FIREARMS, AMMUNITION, EXPLOSIVES, OR

12 CONTROLLED SUBSTANCES FOR COUPONS.

13 Effective on the date of enactment of this Act, section

14 12(b)(3)(C) of the Act (7 U.S.C. 2021(b)(3)(C)) is

15 amended—

16 (1) by striking ‘‘substances (as the term is’’

17 and inserting ‘‘substance (as’’; and

18 (2) by striking ‘‘(except’’ and all that follows

19 through ‘‘) in’’, and inserting ‘‘in’’.

20 SEC. 1356. MODIFYING THE FOOD STAMP QUALITY CON21 TROL SYSTEM.

22 (a) AMENDMENTS.—Section 16(c) of the Act (7

23 U.S.C. 2025(c)) is amended—

24 (1) in paragraph (1)(C)—
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1 (A) by striking ‘‘payment error tolerance

2 level’’ and inserting ‘‘national performance

3 measure’’; and

4 (B) by striking ‘‘equal to’’ and all that fol5 lows through the period at the end, and insert6 ing the following:

7 ‘‘equal to—

8 ‘‘(i) the product of—

9 ‘‘(I) the value of all allotments issued

10 by the State agency in the fiscal year;

11 times

12 ‘‘(II) the lesser of—

13 ‘‘(aa) the ratio of—

14 ‘‘(1) the amount by which

15 the State agency’s payment error

16 rate for the fiscal year exceeds

17 the national performance meas18 ure for the fiscal year, to

19 ‘‘(2) the national perform20 ance measure for the fiscal year;

21 or

22 ‘‘(bb) one; times

23 ‘‘(III) the amount by which the State

24 agency’s payment error rate for the fiscal
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1 year exceeds the national performance

2 measure for the fiscal year.

3 ‘‘(ii) The amount of liability shall not be

4 affected by corrective action under subpara5 graph (B).’’;

6 (2) in paragraph (3)(A) by striking ‘‘60 days

7 (or 90 days at the discretion of the Secretary)’’ and

8 inserting ‘‘120 days’’; and

9 (3) in paragraph (6) by striking ‘‘shall be used’’

10 and all that follows through ‘‘level’’ the last place it

11 appears.

12 (b) STUDY BY THE OFFICE OF TECHNOLOGY AS13 SESSMENT.—The Office of Technology Assessment shall

14 undertake a study of measurement error, any bias in pen15 alty amounts, extreme value bias, regression formula, and

16 of geographical and temporal uniformity of measurements,

17 in the food stamp program quality control system, and

18 shall report the results and recommendations of such

19 study to the Committee on Agriculture of the House of

20 Representatives and the Committee on Agriculture, Nutri21 tion, and Forestry of the Senate not later than 12 months

22 after the date of enactment of this Act.

23 (c) STUDY BY THE SECRETARY OF AGRICULTURE.—

24 The Secretary of Agriculture shall conduct a study of

25 major causal factors which contribute to the payment
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1 error rate. The Secretary shall also conduct controlled ex2 periments under which various reviewers review identical

3 cases, with the objective of determining the degree of uni4 formity in quality control error-rate measurements and

5 the extent to which different levels of investment of re6 sources in the review process affect measurement error.

7 The Secretary shall report the results and recommenda8 tions (including recommendations as to what measures

9 would best reduce measurement error and increase uni10 formity of quality control error-rate measurements at rea11 sonable cost) of such study to the Committee on Agri12 culture of the House of Representatives and the Commit13 tee on Agriculture, Nutrition, and Forestry of the Senate

14 not later than 2 years after the date of enactment of this

15 Act.

16 CHAPTER 6—UNIFORM REIMBURSEMENT

17 RATES

18 SEC. 1361. UNIFORM REIMBURSEMENT RATES.

19 (a) AMENDMENTS.—Section 16 of the Act (7 U.S.C.

20 2025) is amended—

21 (1) in subsection (a)—

22 (A) by striking ‘‘and (5)’’ and inserting

23 ‘‘(5)’’;

24 (B) by inserting before the colon the

25 following—
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1 ‘‘, (6) automated data processing and information

2 retrieval systems subject to the conditions set forth

3 in subsection (g), (7) food stamp program investiga4 tions and prosecutions, and (8) implementing and

5 operating the immigration status verification system

6 under section 1137(d) of the Social Security Act (42

7 U.S.C. 1320b–7(d))’’; and

8 (C) in the proviso by inserting after ‘‘75

9 per centum’’ the following:

10 ‘‘through June 30, 1994, 70 percent for the 1-year

11 period beginning July 1, 1994, 60 percent for the 1-

12 year period beginning July 1, 1995, and 50 percent

13 for any subsequent period,’’;

14 (2) in subsection (g)—

15 (A) by inserting ‘‘through June 30, 1995,

16 equal to 60 percent for the 1-year period begin17 ning July 1, 1995, and 50 percent effective

18 July 1, 1996,’’ after ‘‘1991,’’; and

19 (B) by striking ‘‘automatic’’ and inserting

20 ‘‘automated’’; and

21 (3) in subsection (j) by inserting after ‘‘100 per

22 centum’’ the following:

23 ‘‘through June 30, 1994, 70 percent for the 1-year period

24 beginning July 1, 1994, 60 percent for the 1-year period
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1 beginning July 1, 1995, and 50 percent for any subse2 quent period,’’.

3 (b) APPLICATION OF AMENDMENTS.—The reductions

4 in enhanced Federal match rates for administration re5 sulting from the amendments made by subsection (a) shall

6 apply to payments to States for expenditures incurred only

7 after—

8 (1) the end of the State fiscal year that ends

9 during 1994; or

10 (2) in the case of a State with a State legisla11 ture which is not scheduled to have a regular legisla12 tive session in 1994, the end of the State fiscal year

13 that ends during 1995;

14 without regard to whether or not final regulations to15 carry out such amendments have been promulgated16 by the Secretary before the end of either of such17 State fiscal years.

18 CHAPTER 7—IMPLEMENTATION AND

19 EFFECTIVE DATES

20 SEC. 1371. IMPLEMENTATION AND EFFECTIVE DATES.

21 (a) GENERAL EFFECTIVE DATE AND IMPLEMENTA22 TION.—Except as otherwise provided in this subtitle, this

23 subtitle and the amendments made by this subtitle shall

24 take effect, and shall be implemented beginning on, Octo25 ber 1, 1993.
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1 (b) SPECIAL EFFECTIVE DATES AND IMPLEMENTA2 TION.—(1) Sections 1312, 1315, 1316, 1317, 1322, 1323,

3 1326, 1331, 1333, and 1353 and the amendments made

4 by such sections shall take effect, and shall be imple5 mented beginning on, July 1, 1994.

6 (2) Paragraphs (1) and (3) of section 1356(a) and

7 the amendments made by such paragraphs shall take ef8 fect, and shall be implemented beginning on, October 1,

9 1991.

10 (3) Paragraph (2) of section 1356(a) and the amend11 ment made by such paragraph shall take effect, and shall

12 be implemented beginning on, October 1, 1992.

13 Subtitle D—Miscellaneous

14 Provisions

15 SEC. 1401. MAXIMUM EXPENDITURES UNDER MARKET PRO16 MOTION PROGRAM FOR FISCAL YEARS 1994

17 THROUGH 1998.

18 (a) LIMITATION.—Section 211(c)(1) of the Agricul19 tural Trade Act of 1978 (7 U.S.C. 5641(c)) is amended

20 by striking ‘‘not less than $200,000,000 for each of the

21 fiscal years 1991 through 1995’’ and inserting ‘‘an

22 amount equal to $147,734,000 for each of the fiscal years

23 1991 through 1998’’.
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1 (b) APPLICATION OF AMENDMENTS.—The amend2 ment made by this section shall apply with respect to fiscal

3 years beginning after September 30, 1993.

4 SEC. 1402. ADMISSION, ENTRANCE, AND RECREATION FEES.

5 (a) AUTHORITY TO IMPOSE FEES.—

6 (1) ENTRANCE AND ADMISSION FEES.—The

7 Secretary of Agriculture may charge admission or

8 entrance fees at National Monuments, National Vol9 canic Monuments, National Scenic Areas, and areas

10 of concentrated public use administered by the Sec11 retary.

12 (2) RECREATION USE FEES.—The Secretary

13 may charge recreation use fees at lands administered

14 by the Secretary in connection with the use of spe15 cialized outdoor recreation sites, equipment, services,

16 or facilities, including visitors’ centers, picnic tables,

17 boat launching facilities, or campgrounds.

18 (b) AMOUNT OF FEES.—The amount of the admis19 sion, entrance, and recreation fees authorized to be im20 posed under this section shall be determined by the Sec21 retary.

22 (c) DEFINITIONS.—For purposes of this section:

23 (1) The term ‘‘area of concentrated public use’’

24 means an area administered by the Secretary that

25 meets each of the following criteria:
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1 (A) The area is managed primarily for out2 door recreation purposes.

3 (B) Facilities and services necessary to ac4 commodate heavy public use are provided in the

5 area.

6 (C) The area contains at least one major

7 recreation attraction.

8 (D) Public access to the area is provided

9 in such a manner that admission fees can be ef10 ficiently collected at one or more centralized lo11 cations.

12 (2) The term ‘‘boat launching facility’’ includes

13 any boat launching facility regardless of whether

14 specialized facilities or services, such as mechanical

15 or hydraulic boat lifts or facilities, are provided.

16 (3) The term ‘‘campground’’ means any camp17 ground where a majority of the following amenities

18 are provided, as determined by the Secretary:

19 (A) Tent or trailer spaces.

20 (B) Drinking water.

21 (C) An access road.

22 (D) Refuse containers.

23 (E) Toilet facilities.
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1 (F) The personal collection of recreation

2 use fees by an employee or agent of the Sec3 retary.

4 (G) Reasonable visitor protection.

5 (H) If campfires are permitted in the

6 campground, simple devices for containing the

7 fires.

8 (4) The term ‘‘Secretary’’ means the Secretary

9 of Agriculture.

10 SEC. 1403. ADDITIONAL PROGRAM CHANGES TO MEET REC11 ONCILIATION REQUIREMENTS.

12 The Secretary of Agriculture shall consolidate person13 nel and field, regional, and national offices of agencies

14 within the Department of Agriculture in order to reduce

15 personnel and duplicative overhead expenses as a result

16 of the consolidation such that Department expenditures

17 are reduced by—

18 (1) $90,000,000 in fiscal year 1995;

19 (2) $97,000,000 in fiscal year 1996;

20 (3) $135,000,000 in fiscal year 1997; and

21 (4) $178,000,000 in fiscal year 1998.

22 SEC. 1404. ENVIRONMENTAL CONSERVATION ACREAGE RE23 SERVE PROGRAM AMENDMENTS.

24 (a) ENROLLMENT REQUIREMENT.—

25 (1) CONSERVATION RESERVE PROGRAM.—
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1 (A) IN GENERAL.—Section 1231(d) of the

2 Food Security Act of 1985 (16 U.S.C. 3831(d))

3 is amended—

4 (i) by striking ‘‘may’’ and inserting

5 ‘‘shall’’;

6 (ii) by striking ‘‘the amount of acres

7 specified in section 1230(b)’’ and inserting

8 ‘‘a total of 38,000,000 acres during the

9 1986 through 1995 calendar years’’; and

10 (iii) by striking ‘‘each of calendar

11 years 1994 and 1995’’ and inserting ‘‘the

12 1995 calendar year’’.

13 (B) CONFORMING AMENDMENT.—Section

14 1230(b) of such Act (16 U.S.C. 3830(b)) is

15 amended by striking ‘‘to place in’’ and all that

16 follows through ‘‘acres’’.

17 (2) WETLANDS RESERVE PROGRAM.—

18 (A) IN GENERAL.—Section 1237(b) of

19 such Act (16 U.S.C. 3837(b)) is amended to

20 read as follows:

21 ‘‘(b) MINIMUM ENROLLMENT.—The Secretary shall

22 enroll into the wetlands reserve program—

23 ‘‘(1) a total of not less than 330,000 acres by

24 the end of the 1995 calendar year; and
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1 ‘‘(2) a total of not less than 975,000 acres dur2 ing the 1991 through 2000 calendar years.’’.

3 (B) CONFORMING AMENDMENT.—Section

4 1237(c) of such Act (16 U.S.C. 3837(c)) is

5 amended by striking ‘‘1995’’ and inserting

6 ‘‘2000’’.

7 (b) USE OF COMMODITY CREDIT CORPORATION.—

8 Section 1241 of such Act (16 U.S.C. 3841) is amended—

9 (1) in subsection (a)—

10 (A) by striking ‘‘(a)(1) During each of the

11 fiscal years ending September 30, 1986, and

12 September 30, 1987’’ and inserting ‘‘(a) During

13 each of the fiscal years 1994 through 2000’’;

14 and

15 (B) by striking paragraph (2); and

16 (2) in subsection (b), by striking ‘‘(A) through

17 (E)’’ and inserting ‘‘A through E’’.

18 SEC. 1405. LEVELS OF INSURANCE COVERAGE UNDER THE

19 FEDERAL CROP INSURANCE ACT.

20 (a) CONVERSION OF PROGRAM TO FOUR LEVELS OF

21 COVERAGE.—The Federal Crop Insurance Act is

22 amended—

23 (1) in subsection (a) of section 508 (7 U.S.C.

24 1508)—
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1 (A) in the first sentence, by striking ‘‘If

2 sufficient actuarial data are available, as deter3 mined by the Board,’’ and inserting ‘‘Subject to

4 section 508B, based on the actuarial and un5 derwriting data available to the Board,’’; and

6 (B) by striking the fifth, sixth, seventh,

7 eighth, ninth, tenth, fourteenth, fifteenth, and

8 sixteenth sentences; and

9 (2) by inserting after section 508A (7 U.S.C.

10 1508a) the following new section:

11 ‘‘SEC. 508B. FOUR LEVELS OF CROP INSURANCE COV12 ERAGE.

13 ‘‘(a) FOUR LEVELS OF COVERAGE.—In making crop

14 insurance available under section 508 to producers of agri15 cultural commodities grown in the United States, the Cor16 poration shall make available four levels of insurance cov17 erage against losses in yields of the insured commodity:

18 ‘‘(1) LEVEL I.—Coverage level I shall be avail19 able only to those producers who do not purchase in20 surance at coverage levels II, III, or IV and shall

21 provide for the indemnification of those producers

22 for losses in yield to the extent that such losses ex23 ceed 65 percent of the determined yield of the com24 modity for the farm, as established under subsection

25 (b).
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1 ‘‘(2) LEVELS II, III, AND IV.—Coverage levels

2 II, III, and IV shall provide for the indemnification

3 of producers for those losses in yield to the extent

4 that such losses exceed 50, 35, and 25 percent, re5 spectively, of—

6 ‘‘(A) the average proven yield on the farm

7 for a representative period based on the actual

8 production history of the farm, as determined

9 from the producer’s records; or

10 ‘‘(B) if such records are not available or

11 are insufficient, the recorded or appraised aver12 age yield of the commodity on the farm for a

13 representative period, subject to such adjust14 ments as the Board may prescribe to ensure

15 that the average yield for farms in the same

16 area, which are subject to the same conditions,

17 are fair and just.

18 ‘‘(b) DETERMINED YIELD.—For purposes of sub19 section (a)(1), the determined yield for a commodity shall

20 be equal to—

21 ‘‘(1) in the case of a crop of any commodity for

22 which the Agricultural Stabilization and Conserva23 tion Service establishes a yield for the farm, the

24 yield so established; and
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1 ‘‘(2) in the case of a crop of any other commod2 ity, the recorded or appraised average yield of the

3 commodity on the farm for a representative period,

4 subject to such adjustments as the Board may pre5 scribe to ensure that the average yield for farms in

6 the same area, which are subject to the same condi7 tions, are fair and just.

8 ‘‘(c) USE OF ASCS YIELD.—If the Agricultural Sta9 bilization and Conservation Service has established a yield

10 for a crop of a commodity for a farm and such yield is

11 higher than the yield determined for the farm under sub12 section (a)(2) for coverage levels II, III, or IV, the pro13 ducer may elect to use such higher yield for purpose of

14 coverage levels II, III, and IV. Use of such higher yield

15 shall be subject to an additional premium for the coverage

16 at such a rate as the Board determines appropriate to ac17 curately reflect the increased risk involved and that the

18 Board determines to be actuarially sufficient to cover

19 claims for losses on such insurance and to establish a rea20 sonable reserve against unforeseen losses. No premium

21 subsidy or administrative subsidy may be provided by the

22 Corporation in connection with any additional coverage

23 provided under this subsection.

24 ‘‘(d) PRICE ELECTIONS.—The Corporation shall es25 tablish a high and low price election for each agricultural
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1 commodity for which insurance is available under this

2 title. The high price shall not be less than the projected

3 market price of the commodity. Coverage levels II, III, and

4 IV shall be available to producers at any price election

5 that is equal to or less than the high price election and

6 shall be quoted in terms of dollars per acre coverage that

7 may be purchased. Coverage level I shall be offered only

8 at the low price election.

9 ‘‘(e) COVERAGE AND PRICE INFORMATION.—The

10 Corporation shall ensure that each producer is provided

11 accurate and adequate information at the time of applica12 tion regarding the amount of coverage available at each

13 level of coverage for the commodity to be insured and the

14 cost to the producer for such coverage.

15 ‘‘(f) ANNUAL REPORT.—The Corporation shall report

16 annually to the Congress the results of its operations re17 garding each commodity for which insurance is available

18 under this title. The report shall include for each insured

19 commodity a description of operations under this section

20 at each level of coverage.’’.

21 (b) PREMIUM PAYMENT.—Subsection (e)(3) of sec22 tion 508 of the Federal Crop Insurance Act (7 U.S.C.

23 1508) is amended to read as follows:
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1 ‘‘(3) For the purpose of encouraging the broadest

2 possible participation in the crop insurance program, the

3 Corporation shall pay—

4 ‘‘(A) with respect to each policy providing for

5 coverage level I, the full amount of the premium for

6 such coverage; and

7 ‘‘(B) with respect to each policy providing for

8 coverage level II, III, or IV, the portion of the pre9 mium that is equal to the amount that would have

10 been paid under subparagraph (A) if the producer

11 had elected coverage level I.’’.

12 (c) REINSURANCE.—Subsection (h) of section 508 of

13 the Federal Crop Insurance Act (7 U.S.C. 1508) is

14 amended to read as follows:

15 ‘‘(h) REINSURANCE.—The Corporation shall provide

16 reinsurance, to the maximum extent practicable, upon

17 such terms and conditions as the Board may determine

18 to be consistent with subsections (a) and (b) and with

19 sound reinsurance principles promulgated pursuant to the

20 Office of Federal Procurement Policy Act (41 U.S.C. 401,

21 et seq.), which the Board shall modify as necessary to con22 form to the purposes of this Act, taking into account the

23 expenses of the Corporation paid on its own policies of

24 insurance. Reinsurance shall be provided to insurers in25 cluding private insurance companies or pools of such com-
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1 panies, reinsurers of such companies, or State or local gov2 ernmental entities, including any political subdivisions

3 thereof, that insure producers of any agricultural commod4 ity under a plan or plans acceptable to the Corporation.

5 However, in the case of the sale of coverage level I policies

6 only (but not for the processing and adjustment of claims

7 on those policies), contractors of the Corporation shall be

8 paid only $50 per policy, of which $25.50 shall be paid

9 by the policyholder at the time of application and $24.50

10 shall be paid by the Corporation. Whenever the Corpora11 tion provides reinsurance under this subsection to any

12 such insurers, the Corporation shall pay (as provided in

13 subsection (e)) the portion of the producer’s premium for

14 such insurance so reinsured. Insurers of policies on which

15 reinsurance is provided shall make use of licensed private

16 insurance agents and brokers on the same basis as pro17 vided for policies of the Corporation under section

18 507(c)(3) of this title, except that the provisions for com19 pensating agents and brokers from premiums paid by the

20 insured shall not apply. The Corporation shall periodically

21 revise its reinsurance agreement with the reinsured com22 panies to provide for the reinsured companies to bear an

23 increased share of any potential loss under such agree24 ment, in cases in which the financial conditions of the rein-
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1 sured companies and the availability of private reinsurance

2 so permits.’’.

3 (d) APPLICATION OF AMENDMENTS.—The amend4 ments made by this section shall apply beginning with

5 crops to be harvested in 1995.

6 TITLE II—COMMITTEE ON

7 ARMED SERVICES

8 SEC. 2001. LIMITATION ON COST-OF-LIVING ADJUSTMENTS

9 FOR MILITARY RETIREES.

10 Paragraph (2) of section 1401a(b) of title 10, United

11 States Code, is amended to read as follows:

12 ‘‘(2) PRE-AUGUST 1, 1986 MEMBERS.—

13 ‘‘(A) GENERAL RULE.—The Secretary

14 shall increase the retired pay of each member

15 and former member who first became a member

16 of a uniformed service before August 1, 1986,

17 by the percent (adjusted to the nearest one18 tenth of 1 percent) by which—

19 ‘‘(i) the price index for the base quar20 ter of that year, exceeds

21 ‘‘(ii) the base index.

22 ‘‘(B) SPECIAL RULE FOR FISCAL YEARS

23 1994 THROUGH 1998.—In the case of the in24 creases in retired pay that, pursuant to para25 graph (1), become effective on December 1 of
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1 each of fiscal years 1994, 1995, 1996, 1997,

2 and 1998, the initial month for which each such

3 increase is payable as part of such retired pay

4 shall (notwithstanding such December 1 effec5 tive date) be as set forth in the following table:

First month for which

‘‘Fiscal year: increase is payable:

1994 ................................................................... April 1994.

1995 ................................................................... July 1995.

1996 ................................................................... October 1996.

1997 ................................................................... January 1998.

1998 ................................................................... April 1999.

6 ‘‘(C) EXCLUSION OF DISABILITY RETIREES

7 FROM ROLLING COLA.—Subparagraph (B) does

8 not apply with respect to the retired pay of a

9 member retired under chapter 61 of this title.’’.

10 SEC. 2002. ELIMINATION OF MILITARY PAY RAISE FOR FIS11 CAL YEAR 1994 AND REDUCTION IN THE

12 AMOUNT OF THE RAISE FOR FISCAL YEARS

13 1995 THROUGH 1998.

14 (a) FISCAL YEAR 1994.—During fiscal year 1994, no

15 increase in the rates of basic pay, basic allowance for quar16 ters, or basic allowance for subsistence of members of the

17 uniformed services shall be made or take effect pursuant

18 to section 1009 of title 37, United States Code.

19 (b) ONE PERCENT REDUCTION IN SUBSEQUENT FIS20 CAL YEARS.—If the General Schedule of compensation for

21 Federal classified employees is increased under section

22 5303 of title 5, United States Code, as amended by title
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1 X of this Act, during fiscal year 1995, 1996, 1997, or

2 1998, the elements of compensation of members of the

3 uniformed services shall likewise be increased during that

4 fiscal year in the manner provided in section 1009 of title

5 37, United States Code, based on the corresponding in6 crease under section 5303 of title 5, United States Code

7 (as so amended).

8 TITLE III—COMMITTEE ON

9 BANKING, FINANCE AND

10 URBAN AFFAIRS

11 SEC. 3001. NATIONAL DEPOSITOR PREFERENCE.

12 (a) IN GENERAL.—Section 11(d)(11) of the Federal

13 Deposit Insurance Act (12 U.S.C. 1821(d)(11)) is amend14 ed to read as follows:

15 ‘‘(11) DEPOSITOR PREFERENCE.—

16 ‘‘(A) IN GENERAL.—Subject to section

17 5(e)(2)(C), amounts realized from the liquida18 tion or other resolution of any insured deposi19 tory institution by any receiver appointed for

20 such institution shall be distributed to pay

21 claims (other than secured claims to the extent

22 of any such security) in the following order of

23 priority:

24 ‘‘(i) Administrative expenses of the re25 ceiver.
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1 ‘‘(ii) Any deposit liability of the insti2 tution.

3 ‘‘(iii) Any claim of an employee of the

4 institution, other than a senior executive

5 officer (as defined by the Corporation pur6 suant to section 32(f)), for pay accrued

7 but unpaid as of the date the receiver was

8 appointed for the institution.

9 ‘‘(iv) Any other general or senior li10 ability of the institution (which is not a li11 ability described in clause (v) or (vi)).

12 ‘‘(v) Any obligation subordinated to

13 depositors or other general creditors

14 (which is not an obligation described in

15 clause (vi)).

16 ‘‘(vi) Any obligation to shareholders

17 arising as a result of their status as share18 holders (including any depository institu19 tion holding company or any shareholder

20 or creditor of such company).

21 ‘‘(B) EFFECT ON STATE LAW.—

22 ‘‘(i) IN GENERAL.—The provisions of

23 subparagraph (A) shall not supersede the

24 law of any State except to the extent such

25 law is inconsistent with the provisions of
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1 such subparagraph, and then only to the

2 extent of the inconsistency.

3 ‘‘(ii) PROCEDURE FOR DETERMINA4 TION OF INCONSISTENCY.—Upon the Cor5 poration’s own motion or upon the request

6 of any person with a claim described in

7 subparagraph (A)(i) or any State which is

8 submitted to the Corporation in accordance

9 with procedures which the Corporation

10 shall prescribe, the Corporation shall deter11 mine whether any provision of the law of

12 any State is inconsistent with any provi13 sion of subparagraph (A) and the extent of

14 any such inconsistency.

15 ‘‘(iii) JUDICIAL REVIEW.—The final

16 determination of the Corporation under

17 clause (ii) shall be subject to judicial re18 view under chapter 7 of title 5, United

19 States Code.

20 ‘‘(C) ACCOUNTING REPORT.—Any distribu21 tion by the Corporation in connection with any

22 claim described in subparagraph (A)(vi) shall be

23 accompanied by the accounting report required

24 under paragraph (15)(B).’’.

25 (b) TECHNICAL AND CONFORMING AMENDMENTS.—
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1 (1) Section 11(c)(13) of the Federal Deposit

2 Insurance Act (12 U.S.C. 1821(c)(13)) is

3 amended—

4 (A) in subparagraph (A), by striking ‘‘sub5 ject to subparagraph (B),’’;

6 (B) in inserting ‘‘and’’ after the semicolon

7 at the end of subparagraph (A);

8 (C) by striking subparagraph (B); and

9 (D) by redesignating subparagraph (C) as

10 subparagraph (B).

11 (2) Section 11(g)(4) of the Federal Deposit In12 surance Act (12 U.S.C. 1921(g)(4)) is amended by

13 striking ‘‘If the Corporation’’ and inserting ‘‘Subject

14 to subsection (d)(11), if the Corporation’’.

15 (c) EFFECTIVE DATE.—The amendments made by

16 this section shall apply with respect to insured depository

17 institutions for which a receiver is appointed after the date

18 of the enactment of this Act.

19 SEC. 3002. TRANSFER OF FEDERAL RESERVE SURPLUSES.

20 (a) IN GENERAL.—The 1st undesignated paragraph

21 of section 7 of the Federal Reserve Act (12 U.S.C. 289)

22 is amended to read as follows:

23 ‘‘(a) DIVIDENDS AND SURPLUS FUNDS OF RESERVE

24 BANKS.—

25 ‘‘(1) STOCKHOLDER DIVIDENDS.—
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1 ‘‘(A) IN GENERAL.—After all necessary ex2 penses of a Federal reserve bank have been

3 paid or provided for, the stockholders of the

4 bank shall be entitled to receive an annual divi5 dend of 6 percent on paid-in capital stock.

6 ‘‘(B) DIVIDEND CUMULATIVE.—The enti7 tlement to dividends under subparagraph shall

8 be cumulative.

9 ‘‘(2) DEPOSIT OF NET EARNINGS IN SURPLUS

10 FUND.—That portion of net earnings of each Fed11 eral reserve bank which remains after dividend

12 claims under subparagraph (A) have been fully met

13 shall be deposited in the surplus fund of the bank.

14 ‘‘(3) PAYMENT TO TREASURY.—During fiscal

15 years 1994 through 1998, any amount in the sur16 plus fund of any Federal reserve bank in the excess

17 of the amount equal to 3 percent of the total paid18 in capital and surplus of the member banks of such

19 bank shall be transferred to the Board for transfer

20 to the Secretary of the Treasury for deposit in the

21 general fund of the Treasury.’’.

22 (b) ADDITIONAL TRANSFERS FOR FISCAL YEARS

23 1997 AND 1998.—

24 (1) IN GENERAL.—In addition to the amounts

25 required to be transferred from the surplus funds of
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1 the Federal reserve banks pursuant to section

2 7(a)(3) of the Federal Reserve Act, the Federal re3 serve banks shall transfer from such surplus funds

4 to the Board of Governors of the Federal Reserve

5 System for transfer to the Secretary of the Treasury

6 for deposit in the general fund of the Treasury, a

7 total amount of $106,000,000 in fiscal year 1997

8 and a total amount of $107,000,000 in fiscal year

9 1998.

10 (2) ALLOCATION BY FED.—Of the total amount

11 required to be paid by the Federal reserve banks

12 under paragraph (1) for fiscal year 1997 or 1998,

13 the Board of Governors of the Federal Reserve Sys14 tem shall determine the amount each such bank

15 shall pay in such fiscal year.

16 (3) REPLENISHMENT OF SURPLUS FUND PRO17 HIBITED.—No Federal reserve bank may replenish

18 such bank’s surplus fund by the amount of any

19 transfer by such bank under paragraph (1) during

20 the fiscal year for which such transfer is made.

21 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

22 (1) The penultimate undesignated paragraph of

23 section 7 of the Federal Reserve Act (12 U.S.C.

24 290) is amended by striking ‘‘The net earnings de25 rived’’ and inserting ‘‘(b) USE OF EARNINGS TRANS-
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1 FERRED TO THE TREASURY.—The net earnings de2 rived’’.

3 (2) The last undesignated paragraph of section

4 7 of the Federal Reserve Act (12 U.S.C. 531) is

5 amended by striking ‘‘Federal reserve banks’’ and

6 inserting ‘‘(c) EXEMPTION FROM TAXATION.—Fed7 eral reserve banks’’.

8 SEC. 3003. USE OF RETURN DATA FOR INCOME VERIFICA9 TION UNDER CERTAIN HOUSING ASSISTANCE

10 PROGRAMS.

11 Section 904 of the Stewart B. McKinney Homeless

12 Assistance Amendments Act of 1988 (42 U.S.C. 3544) is

13 amended as follows:

14 (1) CONSENT FORMS.—In subsection (b)—

15 (A) in the matter preceding paragraph (1),

16 by inserting ‘‘(including the Indian housing pro17 gram under title II of the United States Hous18 ing Act of 1937)’’ before the 1st comma;

19 (B) in paragraph (1), by striking ‘‘and’’ at

20 the end;

21 (C) in paragraph (2), by striking the pe22 riod at the end and inserting ‘‘; and’’;

23 (D) by inserting after paragraph (2) the

24 following new paragraph:
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1 ‘‘(3) sign a consent from approved by the Sec2 retary authorizing the Secretary to request the Com3 missioner of Social Security and the Secretary of the

4 Treasury to release information pursuant to section

5 6103(l)(7)(D)(ix) of the Internal Revenue Code of

6 1986 with respect to such applicant or participant

7 for the sole purpose of the Secretary verifying in8 come information pertinent to the applicant’s or par9 ticipant’s eligibility or level of benefits.’’; and

10 (E) in the last sentence, by striking ‘‘This’’

11 and inserting the following: ‘‘Except as pro12 vided in this subsection, this’’.

13 (2) APPLICANT AND PARTICIPANT PROTEC14 TIONS.—In subsection (c)(2)—

15 (A) in subparagraph (A)—

16 (i) in the matter preceding clause

17 (i)—

18 (I) by inserting after ‘‘compensa19 tion law’’ the following: ‘‘or pursuant

20 to section 6103(i)(7)(D)(ix) of the In21 ternal Revenue Code of 1986 from the

22 Commissioner of Social Security or

23 the Secretary of the Treasury’’; and

24 (II) by inserting ‘‘(in the case of

25 information obtained pursuant to such
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1 section 303(i))’’ before ‘‘representa2 tives’’; and

3 (ii) in clause (ii), by inserting ‘‘or

4 public housing agency’’ after ‘‘owner’’ each

5 place it appears;

6 (B) in subparagraph (B), by inserting

7 after ‘‘wages’’ each place it appears the follow8 ing: ‘‘, other earnings or income,’’; and

9 (C) in subparagraph (C), by inserting be10 fore the second comma the following: ‘‘at a

11 hearing that provides the basic elements of due

12 process’’.

13 (3) PENALTY.—In subsection (c)(3)—

14 (A) in subparagraph (A), by inserting ‘‘or

15 section 6103(l)(7)(D)(ix) of the Internal Reve16 nue Code of 1986’’ after ‘‘Social Security Act’’;

17 and

18 (B) in the first sentence of subparagraph

19 (B)—

20 (i) by striking clause (i) and inserting

21 the following: ‘‘(i) a negligent or knowing

22 disclosure of information referred to in this

23 section, section 303(i) of the Social Secu24 rity Act, or section 6103(l)(7)(D)(ix) of

25 the Internal Revenue Code of 1986 about
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1 such person by an officer or employee of

2 any public housing agency or owner (or

3 employee thereof), which disclosure is not

4 authorized by this section, such section

5 303(i), such section 6103(l)(7)(D)(ix), or

6 any regulation implementing this section,

7 such section 303(i), or such section

8 6103(l)(7)(D)(ix), or’’; and

9 (ii) in clause (ii), by inserting ‘‘such

10 6103(l)(7)(D)(ix),’’ after ‘‘303(i),’’.

11 (4) CONFORMING AMENDMENT.—The heading

12 of subsection (c) of section 904 of the Stewart B.

13 McKinney Homeless Assistance Amendments Act of

14 1988 is amended by striking ‘‘STATE EMPLOY15 MENT’’.

16 SEC. 3004. GNMA REMIC GUARANTEE FEES.

17 Section 306(g)(3) of the National Housing Act (12

18 U.S.C. 1721(g)(3)) is amended by adding at the end the

19 following new subparagraph:

20 ‘‘(E)(i) Notwithstanding subparagraphs (A) through

21 (D), fees charged for the guaranty of, or commitment to

22 guaranty, multiclass securities backed by a trust or pool

23 of securities or notes guaranteed by the Association under

24 this subsection and other related fees shall be charged by

25 the Association in an amount not to exceed the value, as
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1 determined by the Association, of the guarantee or com2 mitment to guarantee. The Association shall take such ac3 tion as may be necessary to reasonably assure that such

4 portion of the value of the guaranties or commitments to

5 guaranty as the Association determines is appropriate ac6 crues to the benefit of mortgagors under mortgages exe7 cuted after the date of the enactment of this subparagraph

8 by or upon which such securities or notes are backed.

9 ‘‘(ii) For each Federal fiscal year, the Association

10 shall submit a report to the Congress describing any ac11 tivities of the Association with respect to guarantying and

12 making commitments to guaranty multiclass securities de13 scribed in clause (i). The report shall be submitted not

14 later than 90 days after the end of the fiscal year for

15 which the report is made and shall identify the extent of

16 such activities during the fiscal year, the size of each

17 transaction closed during the fiscal year involving such se18 curities, the number of mortgages involved in each such

19 transaction, the amount of the fees charged and earned

20 by the Association for such transactions, and any persons

21 receiving payments for any services provided with respect

22 to any such transactions and the amounts of such pay23 ments, and shall include an estimate of the portion of the

24 value of the guarantee or commitment to guarantee accru-
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1 ing to the benefit of mortgagors and a description of any

2 action taken by the Association to ensure such accrual.

3 ‘‘(iii) The Association shall provide for the initial im4 plementation of the program for which fees are charged

5 under the first sentence of clause (i) by notice published

6 in the Federal Register. The notice shall be effective upon

7 publication and shall provide an opportunity for public

8 comment. Not later than 12 months after publication of

9 the notice, the Association shall issue regulations for such

10 program based on the notice, comments received, and the

11 experience of the Association in carrying out the program

12 during such period.’’.

13 SEC. 3005. MUTUAL MORTGAGE INSURANCE FUND PRE14 MIUMS.

15 To improve the actuarial soundness of the Mutual

16 Mortgage Insurance Fund under the National Housing

17 Act, the Secretary of Housing and Urban Development

18 shall increase the rate at which the Secretary earns the

19 single premium payment collected at the time of insurance

20 of a mortgage that is an obligation of such Fund (with

21 respect to the rate in effect on the date of the enactment

22 of this Act). In establishing such increased rate, the Sec23 retary shall consider any current audit findings and re24 serve analyses and information regarding the expected av25 erage duration of mortgages that are obligations of such
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1 Fund and may consider any other information that the

2 Secretary determines to be appropriate.

3 TITLE IV—EDUCATION AND

4 LABOR

5 SEC. 4000. TABLE OF CONTENTS.

6 The table of contents of this title is as follows:

TITLE IV—EDUCATION AND LABOR

Sec. 4000. Table of contents.

Subtitle A—Federal Direct Loan Program

CHAPTER 1—AMENDMENTS TO PART D OF TITLE IV OF THE HIGHER

EDUCATION ACT OF 1965

Sec. 4001. Short title; references.

Sec. 4002. Federal Direct Student Loan Program.

CHAPTER 2—CONFORMING AMENDMENTS

Sec. 4021. Preserving loan access.

Sec. 4022. Guaranty agency reserves.

Sec. 4023. Terms of loans.

Sec. 4024. Assignment of loans.

Sec. 4025. Termination of guaranty agency agreements; assumption of guaranty agency functions by the Secretary.

Sec. 4026. Administrative cost allowance.

Sec. 4027. Consolidation loans.

Sec. 4028. Student Loan Marketing Association.

Sec. 4029. Amendment to the Balanced Budget and Emergency Deficit Control

Act of 1985.

CHAPTER 3—EFFECTIVE DATES; STUDY

Sec. 4031. Effective dates.

Sec. 4032. Study of Internal Revenue Service collection of student loans.

Sec. 4033. Preference of committee for IRS collection mechanism.

Subtitle B—Cost Sharing by States

Sec. 4101. Cost sharing by States.

Subtitle C—ERISA Amendments Relating to Group Health Plans

Sec. 4201. Coordination of ERISA preemption rules with title XIX provisions

providing for liability of third parties.

Sec. 4202. Continued coverage of costs of a pediatric vaccine under group health

plans.

Sec. 4203. Temporary rules governing preemption of certain State laws.
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1 Subtitle A—Federal Direct Loan

2 Program

3 CHAPTER 1—AMENDMENTS TO PART D OF

4 TITLE IV OF THE HIGHER EDUCATION

5 ACT OF 1965

6 SEC. 4001. SHORT TITLE; REFERENCES.

7 (a) SHORT TITLE.—This subtitle may be cited as the

8 ‘‘Student Loan Reform Act of 1993’’.

9 (b) REFERENCES.—References in this subtitle to

10 ‘‘the Act’’ are references to the Higher Education Act of

11 1965 (20 U.S.C. 1001 et seq.).

12 SEC. 4002. FEDERAL DIRECT STUDENT LOAN PROGRAM.

13 Part D of title IV of the Act (20 U.S.C. 1087a et

14 seq.) is amended to read as follows:

15 ‘‘PART D—FEDERAL DIRECT STUDENT LOAN

16 PROGRAM

17 ‘‘SEC. 451. PURPOSE; PROGRAM AUTHORIZATION.

18 ‘‘(a) PURPOSE.—It is the purpose of this part—

19 ‘‘(1) to simplify the delivery of student loans to

20 borrowers and eliminate borrower confusion;

21 ‘‘(2) to provide a variety of repayment plans,

22 including income contingent repayment through the

23 EXCEL Account, to borrowers so that they have

24 flexibility in managing their student loan repayment

25 obligations, and so that those obligations do not
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1 foreclose community service-oriented career choices

2 for those borrowers;

3 ‘‘(3) to replace, through an orderly transition,

4 the Federal Family Education Loan Program under

5 part B of this title with the Federal Direct Student

6 Loan Program under this part;

7 ‘‘(4) to avoid the unnecessary cost, to taxpayers

8 and borrowers, and administrative complexity associ9 ated with the Federal Family Education Loan Pro10 gram under part B of this title through the use of

11 a direct student loan program; and

12 ‘‘(5) to create a more streamlined student loan

13 program that can be managed more effectively at

14 the Federal level.

15 ‘‘(b) PROGRAM AUTHORITY.—There are hereby made

16 available, in accordance with the provisions of this part,

17 such sums as may be necessary to make loans to all eligi18 ble students in attendance at participating institutions of

19 higher education selected by the Secretary (and the eligi20 ble parents of such students), to enable such students to

21 pursue their courses of study at such institutions during

22 the period beginning July 1, 1994. Such loans shall be

23 made by participating institutions that have agreements

24 with the Secretary to originate loans, or by alternative

25 originators designated by the Secretary to make loans for
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1 students in attendance at participating institutions (and

2 their parents).

3 ‘‘SEC. 452. FUNDS FOR ORIGINATION OF DIRECT STUDENT

4 LOANS.

5 ‘‘(a) IN GENERAL.—The Secretary shall provide, on

6 the basis of the need and the eligibility of students at each

7 participating institution, and parents of such students, for

8 such loans, funds for student and parent loans under this

9 part—

10 ‘‘(1) directly to an institution of higher edu11 cation that has an agreement with the Secretary

12 under section 454(a) to participate in the direct stu13 dent loan programs under this part and that also

14 has an agreement with the Secretary under section

15 454(b) to originate loans under this part, or

16 ‘‘(2) through an alternative originator des17 ignated by the Secretary to students and parents of

18 students attending institutions of higher education

19 that have an agreement with the Secretary under

20 section 454(a) but that do not have an agreement

21 with the Secretary under section 454(b).

22 ‘‘(b) FEES FOR ORIGINATION SERVICES.—

23 ‘‘(1) FEES FOR INSTITUTIONS.—The Secretary

24 shall pay fees to institutions of higher education (or

25 a consortium of such institutions) with agreements
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1 under section 454(b), in an amount established by

2 the Secretary, to assist in meeting the costs of loan

3 origination. Such fees—

4 ‘‘(A) shall be paid by the Secretary based

5 on all the loans made under this part to a par6 ticular borrower in the same academic year;

7 ‘‘(B) shall be subject to a sliding scale that

8 decreases the amount of such fees as the num9 ber of borrowers increases; and

10 ‘‘(C)(i) for academic year 1994–1995, shall

11 not exceed a program-wide average of $10 per

12 borrower for all the loans made under this part

13 in the same academic year; and

14 ‘‘(ii) for succeeding academic years, shall

15 not exceed such average fee as the Secretary

16 shall establish in regulations.

17 ‘‘(2) FEES FOR ALTERNATIVE ORIGINATORS.—

18 The Secretary shall pay fees for loan origination

19 services to alternative originators of loans made

20 under this part in an amount established by the Sec21 retary in accordance with the terms of the contract

22 between the Secretary and each such alternative

23 originator.

24 ‘‘(c) NO ENTITLEMENT TO PARTICIPATE OR ORIGI25 NATE.—No institution of higher education shall have a
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1 right to participate in the programs authorized by this

2 part, to originate loans, or to perform any program func3 tion under this part. Nothing in this subsection shall be

4 construed so as to limit the entitlement of an eligible stu5 dent attending a participating institution (or the eligible

6 parent of such student) to borrow under this part.

7 ‘‘SEC. 453. SELECTION OF INSTITUTIONS FOR PARTICIPA8 TION AND ORIGINATION.

9 ‘‘(a) PHASE-IN OF PROGRAM.—

10 ‘‘(1) GENERAL AUTHORITY.—The Secretary

11 shall enter into agreements pursuant to section

12 454(a) with institutions of higher education to par13 ticipate in the direct student loan programs under

14 this part, and agreements pursuant to section

15 454(b) with institutions of higher education to origi16 nate loans in such programs, for academic years be17 ginning on or after July 1, 1994. Alternative origi18 nation services, through which an entity other than

19 the participating institution at which the student is

20 in attendance originates the loan, shall be provided

21 by the Secretary, through one or more contracts

22 under section 456 or such other means as the Sec23 retary may provide, for students attending partici24 pating institutions that do not originate direct stu25 dent loans under this part. Such agreements for the
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1 first year of the program shall, to the extent fea2 sible, be entered into not later than January 1,

3 1994.

4 ‘‘(2) TRANSITION PROVISIONS.—In order to en5 sure an expeditious but orderly transition from the

6 loan programs under part B of this title to the di7 rect student loan programs under this part, the Sec8 retary shall, in the exercise of his or her discretion,

9 determine the number of institutions with which he

10 or she shall enter into agreements under sections

11 454 (a) and (b) for any academic year, except that

12 the Secretary shall exercise such discretion so as to

13 achieve the following goals:

14 ‘‘(A) for academic year 1994–1995, loans

15 made under this part shall represent 4 percent

16 of the sum of new student loan volume under

17 this part and part B of this title;

18 ‘‘(B) for academic year 1995–1996, loans

19 made under this part shall represent 25 percent

20 of the sum of new student loan volume under

21 this part and part B of this title;

22 ‘‘(C) for academic year 1996–1997, loans

23 made under this part shall represent 60 percent

24 of the sum of new student loan volume under

25 this part and part B of this title; and
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1 ‘‘(D) for academic year 1997–1998, loans

2 made under this part shall represent 100 per3 cent of the sum of new student loan volume

4 under this part and part B of this title.

5 ‘‘(3) CASH MANAGEMENT.—The requirements

6 of the Cash Management Improvement Act of 1990

7 (Public Law 101–453) shall apply to the program

8 under this part only to the extent specified in a

9 schedule established by the Secretaries of Education

10 and the Treasury, except that such schedule shall

11 provide for the application of all such requirements

12 not later than July 1, 1998.

13 ‘‘(b) SELECTION CRITERIA FOR PARTICIPATION.—

14 ‘‘(1) APPLICATION.—Each institution of higher

15 education desiring to participate in the direct stu16 dent loan program under this part shall submit an

17 application satisfactory to the Secretary containing

18 such information and assurances as the Secretary

19 may require.

20 ‘‘(2) AGREEMENT.—When the program author21 ized under this part is fully implemented, the Sec22 retary shall enter into agreements under section

23 454(a) with institutions that submit applications in

24 accordance with paragraph (1).
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1 ‘‘(3) TRANSITION SELECTION CRITERIA.—Until

2 such full implementation, the Secretary shall select

3 institutions for participation in the direct student

4 loan program under this part, and shall enter into

5 agreements with them under section 454(a), from

6 among those institutions that submit the applica7 tions described in paragraph (1), and meet such

8 other eligibility requirements as the Secretary may

9 prescribe, by—

10 ‘‘(A)(i) categorizing such institutions ac11 cording to anticipated loan volume, length of

12 academic program, and control of the institu13 tion; and

14 ‘‘(ii) selecting institutions that are reason15 ably representative of the respective categories;

16 and

17 ‘‘(B) if needed to carry out the purposes of

18 this part, selecting additional institutions.

19 ‘‘(c) SELECTION CRITERIA FOR ORIGINATION.—

20 ‘‘(1) IN GENERAL.—The Secretary may enter

21 into a supplemental agreement with an institution

22 (or a consortium of such institutions) that—

23 ‘‘(A) has an agreement under subsection

24 454(a);
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1 ‘‘(B) desires to originate loans under this

2 part; and

3 ‘‘(C) meets the criteria specified in para4 graph (2).

5 ‘‘(2) TRANSITION SELECTION CRITERIA.—For

6 academic year 1994–1995, the Secretary may ap7 prove an institution to originate loans only if such

8 institution—

9 ‘‘(A) made loans under part E of this title

10 in academic year 1993–1994 and did not exceed

11 the applicable maximum default rate under sec12 tion 464(g) for the most recent fiscal year for

13 which data are available;

14 ‘‘(B) is not on the reimbursement system

15 of payment for any of the programs under sub16 part 1 or 3 of part A, part C, or part E;

17 ‘‘(C) is not overdue on program or finan18 cial reports or audits required under this title;

19 ‘‘(D) is not subject to an emergency ac20 tion, or a limitation, suspension, or termination

21 under section 428(b)(1)(T), 432(h), or 487(c);

22 ‘‘(E) in the opinion of the Secretary, has

23 not had significant deficiencies identified by the

24 State postsecondary review entity under subpart

25 1 of part H of this title;
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1 ‘‘(F) in the opinion of the Secretary, has

2 not had severe performance deficiencies for any

3 of the programs under this title, including those

4 demonstrated by audits or program reviews

5 submitted or conducted during the 5 calendar

6 years immediately preceding the date of appli7 cation;

8 ‘‘(G) provides an assurance that it has no

9 delinquent outstanding debts to the United

10 States, unless such debts are being repaid

11 under or in accordance with a repayment ar12 rangement satisfactory to the United States, or

13 the Secretary in his or her discretion deter14 mines that the existence or amount of such

15 debts has not been finally determined by the

16 cognizant Federal agency or agencies; and

17 ‘‘(H) meets such other criteria as the Sec18 retary may establish to protect the financial in19 terest of the United States and to promote the

20 purposes of this part.

21 ‘‘(3) REGULATIONS GOVERNING APPROVAL

22 AFTER TRANSITION.—For academic year 1995–1996

23 and subsequent academic years, the Secretary shall

24 publish regulations governing the approval of institu25 tions to originate loans.
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1 ‘‘(d) CONSORTIA.—Subject to such requirements as

2 the Secretary may prescribe, eligible institutions of higher

3 education with agreements under section 454(a) may

4 apply as consortia to originate loans under this part for

5 students in attendance at such institutions. Such institu6 tions shall each be required to meet the requirements of

7 subsection (c) with respect to loan origination.

8 ‘‘SEC. 454. AGREEMENTS WITH INSTITUTIONS.

9 ‘‘(a) PARTICIPATION AGREEMENTS.—An agreement

10 with any institution of higher education for participation

11 in the direct student loan program under this part shall—

12 ‘‘(1) provide for the establishment and mainte13 nance of a direct student loan program at the insti14 tution under which the institution will—

15 ‘‘(A) identify eligible students who seek

16 student financial assistance at such institution

17 in accordance with section 484;

18 ‘‘(B) estimate the need of each such stu19 dent as required by part F of this title for an

20 academic year, provided that any loan obtained

21 by a student under this part with the same

22 terms (except as otherwise provided in this

23 part) as loans made under section 428A or

24 428H, or a loan obtained by a parent under

25 this part with the same terms (except as other-
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1 wise provided in this part) as loans made under

2 section 428B, or obtained under any State3 sponsored or private loan program, may be used

4 to offset the expected family contribution of the

5 student for that year;

6 ‘‘(C) provide a statement that certifies the

7 eligibility of any student to receive a loan under

8 this part that is not in excess of the annual or

9 aggregate limit applicable to the amount of

10 such loan, except that the institution may, in

11 exceptional circumstances specified in regula12 tions prescribed by the Secretary, refuse to cer13 tify a statement that permits a student to re14 ceive a loan under this part, or certify a loan

15 amount that is less than the student’s deter16 mination of need (as determined under part F

17 of this title), if the reason for such action is

18 documented and provided in written form to

19 such student;

20 ‘‘(D) set forth a schedule for disbursement

21 of the proceeds of the loan in installments, con22 sistent with the requirements of section 428G

23 (other than subsection (b)(1) of such section);

24 and
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1 ‘‘(E) provide timely and accurate

2 information—

3 ‘‘(i) concerning the status of student

4 borrowers (and students on whose behalf

5 parents borrow under this part) while such

6 students are in attendance at the institu7 tion and concerning any new information

8 of which the institution becomes aware for

9 such students (or their parents) after they

10 leave the institution, to the Secretary for

11 the servicing and collecting of loans made

12 under this part; and

13 ‘‘(ii) if the institution does not have

14 an agreement with the Secretary under

15 subsection (b), concerning student eligi16 bility and need, as determined under sub17 paragraphs (A) and (B), to the Secretary

18 as needed for the alternative origination of

19 loans to eligible students and parents in

20 accordance with this part;

21 ‘‘(2) provide assurances that the institution will

22 comply with requirements established by the Sec23 retary relating to student loan information with re24 spect to loans made under this part;
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1 ‘‘(3) provide that the institution accepts respon2 sibility and financial liability stemming from its fail3 ure to perform its functions pursuant to the agree4 ment;

5 ‘‘(4) provide that students at the institution

6 and their parents (with respect to such students)

7 will not be eligible to participate in the programs

8 under part B of this title for the period during

9 which such institution participates in the direct stu10 dent loan program under this part;

11 ‘‘(5) provide for the implementation of a quality

12 assurance system, as established by the Secretary, to

13 ensure that the institution is complying with pro14 gram requirements and meeting program objectives;

15 ‘‘(6) provide that the institution will not charge

16 any fees of any kind, however described, to student

17 or parent borrowers for origination activities or the

18 provision of any information necessary for a student

19 or parent to receive a loan under this part, or any

20 benefits associated with such loan; and

21 ‘‘(7) include such other provisions as the Sec22 retary determines are necessary to protect the inter23 ests of the United States and to promote the pur24 poses of this part.
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1 ‘‘(b) ORIGINATION.—An agreement with any institu2 tion of higher education for the origination of loans under

3 this part shall—

4 ‘‘(1) supplement the agreement entered into in

5 accordance with subsection (a);

6 ‘‘(2) include provisions established by the Sec7 retary that are similar to the participation agree8 ment provisions described in paragraphs (1)(E)(ii),

9 (2), (3), (4), (5), (6), and (7) of subsection (a), as

10 modified to relate to the origination of loans by the

11 institution;

12 ‘‘(3) provide that the institution will originate

13 loans to eligible students and parents in accordance

14 with this part; and

15 ‘‘(4) provide that the note or evidence of obliga16 tion on the loan shall be the property of the Sec17 retary.

18 ‘‘(c) WITHDRAWAL AND TERMINATION PROCE19 DURES.—The Secretary shall establish procedures by

20 which institutions may withdraw or be terminated from

21 the program under this part.

22 ‘‘SEC. 455. TERMS AND CONDITIONS OF LOANS.

23 ‘‘(a) IN GENERAL.—

24 ‘‘(1) PARALLEL TERMS, CONDITIONS, BENE25 FITS, AND AMOUNTS.—Unless otherwise specified in
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1 this part, loans made to borrowers under this part

2 shall have the same terms, conditions, and benefits,

3 and be available in the same amounts, as loans made

4 to borrowers under sections 428, 428A, 428B, and

5 428H of this title.

6 ‘‘(2) DESIGNATION OF LOANS.—Loans made to

7 borrowers under this part that, except as otherwise

8 specified in this part, have the same terms, condi9 tions, and benefits as loans made to borrowers

10 under—

11 ‘‘(A) section 428 shall be known as ‘Fed12 eral Direct Student Loans’;

13 ‘‘(B) section 428A shall be known as ‘Fed14 eral Direct Supplemental Loans for Students’;

15 ‘‘(C) section 428B shall be known as ‘Fed16 eral Direct PLUS Loans’; and

17 ‘‘(D) section 428H shall be known as ‘Fed18 eral Direct Unsubsidized Student Loans’.

19 ‘‘(b) INTEREST RATES.—

20 ‘‘(1) RATES FOR FDSL AND FDUSL.—(A) For

21 Federal Direct Student Loans and Federal Direct

22 Unsubsidized Student Loans made before July 1,

23 1997, the applicable rate of interest shall, during

24 any 12-month period beginning on July 1 and end-
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1 ing on June 30, be determined on the preceding

2 June 1 and be equal to—

3 ‘‘(i) the bond equivalent rate of 91-day

4 Treasury bills auctioned at the final auction

5 held prior to such June 1; plus

6 ‘‘(ii) 3.1 percent,

7 except that such rate shall not exceed 9 percent.

8 ‘‘(B) For Federal Direct Student Loans and

9 Federal Direct Unsubsidized Student Loans made

10 on or after July 1, 1997, the applicable rate of inter11 est shall, during any 12-month period beginning on

12 July 1 and ending on June 30, be determined on the

13 preceding June 1 for all such loans and be equal

14 to—

15 ‘‘(i) the bond equivalent rate of the secu16 rity with a comparable maturity as established

17 by the Secretary; plus

18 ‘‘(ii) 1 percent,

19 except that such rate shall not exceed 9 percent.

20 ‘‘(2) RATES FOR FDSLS.—(A) For Federal Di21 rect Supplemental Loans for Students made before

22 July 1, 1997, the applicable rate of interest shall,

23 during any 12-month period beginning on July 1

24 and ending on June 30, be determined on the pre25 ceding June 1 and be equal to—
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1 ‘‘(i) the bond equivalent rate of 52-week

2 Treasury bills auctioned at the final auction

3 held prior to such June 1; plus

4 ‘‘(ii) 3.1 percent,

5 except that such rate shall not exceed 11 percent.

6 ‘‘(B) For Federal Direct Supplemental Loans

7 for Students made on or after July 1, 1997, the ap8 plicable rate of interest shall, during any 12-month

9 period beginning on July 1 and ending on June 30,

10 be determined on the preceding June 1 for all such

11 loans and be equal to—

12 ‘‘(i) the bond equivalent rate of the secu13 rity with a comparable maturity as established

14 by the Secretary; plus

15 ‘‘(ii) 1.5 percent,

16 except that such rate shall not exceed 11 percent.

17 ‘‘(3) RATES FOR FDPLUS.—(A) For Federal

18 Direct PLUS loans made before July 1, 1997, the

19 applicable rate of interest shall, during any 12-

20 month period beginning on July 1 and ending on

21 June 30, be determined on the preceding June 1 for

22 loans and be equal to—

23 ‘‘(i) the bond equivalent rate of 52-week

24 Treasury bills auctioned at the final auction

25 held prior to such June 1; plus
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1 ‘‘(ii) 3.1 percent,

2 except that such rate shall not exceed 10 percent.

3 ‘‘(B) For Federal Direct PLUS loans made on

4 or after July 1, 1997, the applicable rate of interest

5 shall, during any 12-month period beginning on July

6 1 and ending on June 30, be determined on the pre7 ceding June 1 for all such loans and be equal to—

8 ‘‘(i) the bond equivalent rate of the secu9 rity with a comparable maturity as established

10 by the Secretary; plus

11 ‘‘(ii) 2.1 percent,

12 except that such rate shall not exceed 10 percent.

13 ‘‘(4) PUBLICATION.—The Secretary shall deter14 mine the applicable rates of interest under this sub15 section after consultation with the Secretary of

16 Treasury and shall publish such rate in the Federal

17 Register as soon as practicable after the date of de18 termination.

19 ‘‘(c) LOAN FEE.—For academic years 1994–1995,

20 1995–1996, and 1996–1997, the Secretary shall charge

21 the borrower of a loan made under this part a loan fee

22 of 5 percent of the principal amount of the loan. For aca23 demic years 1997–1998 and succeeding academic years,

24 the Secretary shall charge the borrower of a loan made
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1 under this part a loan fee of 3.65 percent of the principal

2 amount of the loan.

3 ‘‘(d) REPAYMENT PLANS.—

4 ‘‘(1) DESIGN AND SELECTION.—Consistent with

5 criteria established by the Secretary, the Secretary

6 shall offer to a borrower of a loan made under this

7 part a variety of plans for repayment of such loan,

8 including principal and interest on the loan. The

9 borrower shall be entitled to accelerate, without pen10 alty, repayment on his or her loans. The borrower

11 may choose—

12 ‘‘(A) a standard repayment plan, with a

13 fixed annual repayment amount paid over a

14 fixed period of time, consistent with subsection

15 (a)(1) of this section;

16 ‘‘(B) an extended repayment plan, with a

17 fixed annual repayment amount paid over an

18 extended period of time, provided that the bor19 rower annually repays a minimum amount de20 termined by the Secretary, consistent with the

21 requirements of section 428(b)(1)(L);

22 ‘‘(C) a graduated repayment plan, with an23 nual repayment amounts established at two or

24 more graduated levels and paid over a fixed or

25 extended period of time, provided that any of
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1 the borrower’s scheduled payments shall not be

2 less than 50 percent, nor more than 150 per3 cent, of what the amortized payment on the

4 amount owed would be if the loan were repaid

5 under the standard repayment plan; and

6 ‘‘(D) except for the borrower of a Federal

7 Direct PLUS Loan, an income contingent re8 payment plan known as the ‘EXCEL Account,’

9 with varying annual repayment amounts based

10 on the income of the borrower, paid over an ex11 tended period of time, not to exceed a maxi12 mum length of time determined by the Sec13 retary.

14 ‘‘(2) SELECTION BY SECRETARY.—If a bor15 rower of a loan made under this part does not select

16 a repayment plan described in paragraph (1), the

17 Secretary may provide the borrower with a repay18 ment plan described in subparagraph (A), (B), or

19 (C) of paragraph (1).

20 ‘‘(3) CHANGES IN SELECTIONS.—The borrower

21 of a loan made under this part may change his or

22 her selection of a repayment plan under paragraph

23 (1), or the Secretary’s selection of a plan for the

24 borrower under paragraph (2), as the case may be,
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1 under such terms and conditions as may be estab2 lished by the Secretary.

3 ‘‘(4) ALTERNATIVE REPAYMENT PLANS.—The

4 Secretary may provide, on a case-by-case basis, an

5 alternative repayment plan to a borrower of a loan

6 under this part who demonstrates to the satisfaction

7 of the Secretary that the terms and conditions of the

8 repayment plans available under paragraph (1) are

9 not adequate to accommodate the borrower’s excep10 tional circumstances. In designing such alternative

11 repayment plans, the Secretary shall ensure that

12 such plans do not exceed the cost to the Federal

13 Government, as determined on the basis of the

14 present value of future payments by such borrowers,

15 of loans made using the plans available under para16 graph (1).

17 ‘‘(5) REPAYMENT AFTER DEFAULT.—The Sec18 retary may require any borrower who has defaulted

19 on a loan made under this part to—

20 ‘‘(A) pay all reasonable collection costs as21 sociated with such loan; and

22 ‘‘(B) repay the loan pursuant to an

23 EXCEL Account in accordance with subsection

24 (e).

25 ‘‘(e) REPAYMENT THROUGH EXCEL ACCOUNTS.—
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1 ‘‘(1) INFORMATION AND PROCEDURES.—The

2 Secretary may obtain such information as is reason3 ably necessary regarding the income of a borrower

4 (and the borrower’s spouse, if applicable) of a loan

5 made under this part that is, or may be, repaid pur6 suant to an EXCEL Account for the purpose of de7 termining the annual repayment obligation of the

8 borrower. Return and return information (as defined

9 in section 6103 of the Internal Revenue Code of

10 1986) may be obtained under the preceding sentence

11 only to the extent authorized by section 6103(l)(13)

12 of such Code. The Secretary shall establish proce13 dures for determining the borrower’s repayment obli14 gation on that loan for such year, and such other

15 procedures as are necessary to implement effectively

16 repayment pursuant to an EXCEL Account.

17 ‘‘(2) REPAYMENT BASED ON ADJUSTED GROSS

18 INCOME.—A repayment schedule for a loan made

19 under this part and repaid pursuant to an EXCEL

20 Account shall be based on adjusted gross income (as

21 defined in section 62 of the Internal Revenue Code

22 of 1986, 26 U.S.C. 62) of the borrower or, if the

23 borrower is married and files a Federal income tax

24 return jointly with his or her spouse, on adjusted

25 gross income of the borrower and his or her spouse.
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1 ‘‘(3) ADDITIONAL DOCUMENTS.—A borrower

2 who chooses, or is required, to repay a loan made

3 under this part pursuant to an EXCEL Account,

4 and for whom adjusted gross income is unavailable

5 or does not reasonably reflect his or her current in6 come, shall provide to the Secretary other docu7 mentation of income satisfactory to the Secretary,

8 which documentation the Secretary may use to de9 termine an appropriate repayment schedule.

10 ‘‘(4) REPAYMENT SCHEDULES.—EXCEL Ac11 count repayment schedules shall be established by

12 the Secretary through regulations and shall require

13 payments measured as a percentage of the appro14 priate portion of the annual income of the borrower

15 (and the borrower’s spouse, if applicable) as deter16 mined by the Secretary.

17 ‘‘(5) CALCULATION OF BALANCE DUE.—The

18 balance due on a loan made under this part that is

19 repaid pursuant to an EXCEL Account shall equal

20 the unpaid principal amount of the loan, any ac21 crued interest, and any fees, such as late charges,

22 assessed on such loan. The Secretary may limit by

23 regulation the amount of interest that may be cap24 italized on such loan, and the timing of any such

25 capitalization.
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1 ‘‘(6) NOTIFICATION TO BORROWERS.—The Sec2 retary shall establish procedures under which a bor3 rower of a loan made under this part who chooses

4 or is required to repay such loan pursuant to an

5 EXCEL Account is notified of the terms and condi6 tions of such plan, including notification of such

7 borrower—

8 ‘‘(A) that the Internal Revenue Service will

9 disclose to the Secretary tax return information

10 as authorized under section 6103(l)(13) of the

11 Internal Revenue Code of 1986; and

12 ‘‘(B) that if a borrower considers that spe13 cial circumstances, such as a loss of employ14 ment by the borrower or his or her spouse, war15 rant an adjustment in the borrower’s loan re16 payment as determined using the information

17 described in subparagraph (A), or the alter18 native documentation described in paragraph

19 (3), the borrower may contact the Secretary,

20 who shall determine whether such adjustment is

21 appropriate, in accordance with criteria estab22 lished by the Secretary.

23 ‘‘(f) DEFERMENT.—

24 ‘‘(1) EFFECT ON PRINCIPAL AND INTEREST.—

25 A borrower of a loan made under this part who
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1 meets the requirements described in paragraph (2)

2 shall be eligible for a deferment, during which peri3 odic installments of principal need not be paid, and

4 interest—

5 ‘‘(A) shall not accrue, in the case of a Fed6 eral Direct Student Loan or a Federal Direct

7 Consolidation Loan that consolidated only Fed8 eral Direct Student Loans, or a combination of

9 such loans and Federal Student Loans for

10 which the student borrower received an interest

11 subsidy under section 428; or

12 ‘‘(B) shall accrue and be capitalized or

13 paid by the borrower, in the case of a Federal

14 Direct Supplemental Loan for Students loan, a

15 Federal Direct PLUS Loan, a Federal Direct

16 Unsubsidized Student Loan, or a Federal Di17 rect Consolidation Loan other than those de18 scribed in subparagraph (A).

19 ‘‘(2) ELIGIBILITY.—A borrower of a loan made

20 under this part shall be eligible for a deferment dur21 ing any period—

22 ‘‘(A) during which the borrower—

23 ‘‘(i) is pursuing at least a half-time

24 course of study at an eligible institution, as

25 determined by such institution; or
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1 ‘‘(ii) is pursuing a course of study

2 pursuant to a graduate fellowship program

3 approved by the Secretary, or pursuant to

4 a rehabilitation training program for indi5 viduals with disabilities approved by the

6 Secretary,

7 except that no borrower shall be eligible for a

8 deferment under this subparagraph, or a loan

9 made under this part (other than a Federal Di10 rect PLUS Loan, or a Federal Direct Consoli11 dation Loan), while serving in a medical intern12 ship or residency program;

13 ‘‘(B) not in excess of 3 years during which

14 the borrower is seeking and unable to find full15 time employment; or

16 ‘‘(C) not in excess of 3 years during which

17 the Secretary determines, in accordance with

18 regulations prescribed under section 435(o),

19 that the borrower has experienced or will expe20 rience an economic hardship, regardless of the

21 reason for such hardship.

22 ‘‘(g) FEDERAL DIRECT CONSOLIDATION LOANS.—A

23 borrower of a loan made under this part may consolidate

24 such loan with the loans described in subsections (a)(4)

25 and (d)(1)(C) of section 428C only under the terms and
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1 conditions established by the Secretary under this part.

2 Loans made under this subsection shall be known as ‘Fed3 eral Direct Consolidation Loans’.

4 ‘‘(h) BORROWER DEFENSES.—Notwithstanding any

5 other provision of State or Federal law, the Secretary shall

6 specify in regulations (except as authorized under section

7 458(a)) which acts or omissions of an institution of higher

8 education a borrower may assert as a defense to repay9 ment of a loan made under this part, except that in no

10 event may a borrower recover from the Secretary, in any

11 action arising from or relating to a loan made under this

12 part, an amount in excess of the amount such borrower

13 has repaid on such loan.

14 ‘‘(i) NONDISCHARGEABILITY IN BANKRUPTCY.—Not15 withstanding any other provision of law, a loan made

16 under this part shall not be dischargeable in bankruptcy.

17 ‘‘SEC. 456. CONTRACTS.

18 ‘‘(a) CONTRACTS FOR SUPPLIES AND SERVICES.—

19 ‘‘(1) IN GENERAL.—The Secretary may award

20 one or more contracts for services and supplies

21 under subsection (b). The entities with which the

22 Secretary may enter into such contracts may in23 clude, but are not limited to, agencies with agree24 ments with the Secretary under sections 428(b) and

25 (c), if such agencies are otherwise qualified and com-
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1 ply with the procedures applicable to the award of

2 such contracts.

3 ‘‘(2) EXEMPTION.—(A) The Secretary may,

4 through June 30, 1998, award contracts under this

5 section without regard to the requirements in section

6 303 of the Federal Property and Administrative

7 Services Act of 1949 (41 U.S.C. 253), section 18 of

8 the Office of Federal Procurement Policy Act (41

9 U.S.C. 416), and section 8(e) of the Small Business

10 Act (15 U.S.C. 637(e)) and the corresponding re11 quirements of the Federal Acquisition Regulations if

12 the Secretary—

13 ‘‘(i) determines in writing, on a case-by14 case basis, that the Government’s need for the

15 services and supplies to be provided under the

16 contract is of such an unusual and compelling

17 urgency that sources from which the Secretary

18 solicits bids or proposals must be limited; and

19 ‘‘(ii) notifies the Congress in writing of

20 that determination not more than 30 days after

21 the award of the contract.
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1 ‘‘(B) The Secretary may make the determina2 tion described in subparagraph (A)(i) if the Sec3 retary determines that exemption from the require4 ments described in subparagraph (A) is in the public

5 interest and necessary for the orderly transition

6 from the loan programs under part B to the direct

7 student loan programs under this part.

8 ‘‘(C) On and after July 1, 1998, all statutory

9 and regulatory requirements described in subpara10 graph (A) shall apply to the award of a contract

11 under this section.

12 ‘‘(b) CONTRACTS FOR ORIGINATION, SERVICING, AND

13 DATA SYSTEMS.—The Secretary may enter into one or

14 more contracts for—

15 ‘‘(1) the alternative origination of loans to stu16 dents attending institutions with agreements to par17 ticipate in the program under this part (or their par18 ents), if such institutions do not have agreements

19 with the Secretary under section 454(b);

20 ‘‘(2) the servicing and collection of loans made

21 under this part;

22 ‘‘(3) the establishment and operation of one or

23 more data systems for the maintenance of records

24 on all loans made under this part;
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1 ‘‘(4) services to assist in the orderly transition

2 from the loan programs under part B to the direct

3 student loan programs under this part; and

4 ‘‘(5) such other aspects of the direct student

5 loan programs as the Secretary determines are nec6 essary to ensure the successful operation of the

7 programs.

8 ‘‘SEC. 457. REPORTS.

9 ‘‘(a) ANNUAL REPORTS.—The Secretary shall submit

10 to the Congress not later than July 1, 1993, and each

11 July 1 for the 5 succeeding years an annual report de12 scribing the progress and status of the loan program

13 under this part.

14 ‘‘(b) RESEARCH, DEMONSTRATION, AND EVALUA15 TION.—The Secretary may use a portion of the funds de16 scribed in section 459 for research on, or the demonstra17 tion or evaluation of, any aspects of the program author18 ized by this part, including flexible repayment plans.

19 ‘‘SEC. 458. REGULATORY ACTIVITIES.

20 ‘‘(a) NOTICE IN LIEU OF REGULATIONS FOR FIRST

21 YEAR OF PROGRAM.—The Secretary shall publish in the

22 Federal Register whatever standards, criteria, and proce23 dures, consistent with the provisions of this part, the Sec24 retary determines are reasonable and necessary to the suc25 cessful implementation of the first year of the direct stu-
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1 dent loan program authorized by this part. Section 431

2 of the General Education Provisions Act shall not apply

3 to the publication of such standards, criteria, and proce4 dures.

5 ‘‘(b) CLOSING DATE FOR APPLICATIONS FROM IN6 STITUTIONS.—The Secretary shall establish a date not

7 later than October 1, 1993, as the closing date for receiv8 ing applications from institutions of higher education de9 siring to participate in the first year of the direct loan

10 program under this part.

11 ‘‘(c) PUBLICATION OF LIST OF PARTICIPATING IN12 STITUTIONS AND CONTROL GROUP.—Not later than Jan13 uary 1, 1994, the Secretary shall publish in the Federal

14 Register a list of the institutions of higher education se15 lected to participate in the first year of the direct loan

16 program under this part.

17 ‘‘SEC. 459. FUNDS FOR ADMINISTRATIVE EXPENSES.

18 ‘‘Each fiscal year, there shall be available to the Sec19 retary of Education from funds not otherwise appro20 priated, funds to be obligated for administrative costs

21 under this part, including the costs of the transition from

22 the loan programs under part B to the direct student loan

23 programs under this part and transition support for the

24 expenses of guaranty agencies in servicing outstanding

25 loans in their portfolios and in guaranteeing new loans,
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1 not to exceed $261,000,000 in fiscal year 1994,

2 $346,000,000 in fiscal year 1995, $552,000,000 in fiscal

3 year 1996, $596,000,000 in fiscal year 1997, and

4 $749,000,000 in fiscal year 1998. If in any fiscal year,

5 the Secretary determines that additional funds for admin6 istrative expenses are needed as a result of such transi7 tion, or the expansion of the direct student loan programs

8 under this part, the Secretary is authorized to use funds

9 available under this section for a subsequent fiscal year

10 for such expenses, except that the total expenditures by

11 the Secretary shall not exceed $2,504,000,000 in fiscal

12 years 1994 through 1998. The Secretary is also author13 ized to carry over funds available under this section to

14 a subsequent fiscal year.’’.

15 CHAPTER 2—CONFORMING AMENDMENTS

16 SEC. 4021. PRESERVING LOAN ACCESS.

17 (a) PURPOSE.—It is the purpose of the amendments

18 made by this section to provide the Secretary with flexible

19 authority as needed to preserve access to student and par20 ent loans under part B of title IV of the Act during the

21 transition from the Federal Family Education Loan Pro22 gram under such part to the Federal Direct Student Loan

23 Program under part D of such title.

24 (b) ADVANCES TO GUARANTY AGENCIES FOR LEND25 ER-OF-LAST RESORT SERVICES.—
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1 (1) AMENDMENT.—Section 428(j) of the Act is

2 amended by adding at the end thereof the following

3 new paragraph:

4 ‘‘(4) ADVANCES TO GUARANTY AGENCIES FOR

5 LENDER-OF-LAST RESORT SERVICES DURING TRAN6 SITION TO DIRECT LENDING.—(A) In order to en7 sure the availability of loan capital during the tran8 sition from the Federal Family Education Loan pro9 gram under this part to the Federal Direct Student

10 Loan program under part D of this title, the Sec11 retary is authorized to provide a guaranty agency

12 with additional advance funds in accordance with

13 section 422(c)(7), with such restrictions on the use

14 of such funds as are determined appropriate by the

15 Secretary, in order to ensure that the guaranty

16 agency will make loans as the lender-of-last-resort.

17 Such agency shall make such loans in accordance

18 with this subsection and the requirements of the

19 Secretary.

20 ‘‘(B) Notwithstanding any other provision of

21 this part, a guaranty agency serving as a lender-of22 last-resort under this paragraph shall be paid a fee,

23 established by the Secretary, for making such loans

24 in lieu of interest and special allowance subsidies,

25 and shall be required to assign such loans to the
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1 Secretary on demand. Upon such assignment, the

2 portion of the advance represented by the loans as3 signed shall be considered repaid by such guaranty

4 agency.’’.

5 (2) CONFORMING AMENDMENT.—Section

6 422(c)(7) of the Act is amended by striking ‘‘to a

7 guaranty agency’’ through the end thereof and in8 serting the following: ‘‘to a guaranty agency—

9 ‘‘(A) in accordance with section 428(j), in

10 order to ensure that the guaranty agency shall

11 make loans as the lender-of-last-resort during

12 the transition from the Federal Family Edu13 cation Loan Program under this part to the

14 Federal Direct Student Loan Program under

15 part D of this title; or

16 ‘‘(B) if the Secretary is seeking to termi17 nate the guaranty agency’s agreement, or as18 suming the guaranty agency’s functions, in ac19 cordance with section 428(c)(10)(F)(v), in

20 order to assist the agency in meeting its imme21 diate cash needs, ensure the uninterrupted pay22 ment of claims, or ensure that the guaranty

23 agency shall make loans as described in sub24 paragraph (A);’’.
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1 (c) LENDER REFERRAL SERVICES.—Section 428(e)

2 of the Act is amended—

3 (1) in paragraph (1)—

4 (A) by amending the paragraph heading to

5 read as follows: ‘‘IN GENERAL; AGREEMENTS

6 WITH GUARANTY AGENCIES.—’’;

7 (B) by inserting the subparagraph designa8 tion ‘‘(A)’’ immediately after the paragraph

9 heading;

10 (C) by striking ‘‘in any State’’ and insert11 ing ‘‘with which the Secretary has an agree12 ment under subparagraph (B)’’; and

13 (D) by adding at the end thereof the fol14 lowing new subparagraph:

15 ‘‘(B)(i) The Secretary may enter into agree16 ments with guaranty agencies that meet standards

17 established by the Secretary to provide lender refer18 ral services in geographic areas specified by the Sec19 retary. Such guaranty agencies shall be paid in ac20 cordance with paragraph (3) for such services.

21 ‘‘(ii) The Secretary shall publish in the Federal

22 Register whatever standards, criteria, and proce23 dures consistent with the provisions of this part and

24 part D of this title, the Secretary determines are

25 reasonable and necessary to provide lender referral
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1 services under this subsection and ensure loan access

2 to student and parent borrowers during the transi3 tion from the loan programs under this part to the

4 direct student loan programs under part D of this

5 title. Section 431 of the General Education Provi6 sions Act shall not apply to the publication of such

7 standards, criteria, and procedures.’’;

8 (2) in paragraph (2)—

9 (A) in the matter preceding subparagraph

10 (A), by striking ‘‘in a State’’ and inserting

11 ‘‘with which the Secretary has an agreement

12 under paragraph (1)(B)’’;

13 (B) by amending subparagraph (A) to read

14 as follows:

15 ‘‘(A) such student is either a resident of,

16 or is accepted for enrollment in, or is attending,

17 an eligible institution located in a geographic

18 area for which the Secretary (I) determines

19 that loans are not available to all eligible stu20 dents, and (II) has entered into an agreement

21 with a guaranty agency under paragraph (1)(B)

22 to provide lender referral services; and’’;

23 (4) in paragraph (3), by striking ‘‘The’’ and in24 serting ‘‘From funds available for costs of transition

25 under section 459 of the Act, the’’; and
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1 (5) by striking paragraph (5).

2 (d) STUDENT LOAN MARKETING ASSOCIATION.—

3 Section 439(q) of the Act is amended—

4 (1) in paragraph (1)(A)—

5 (A) in the first sentence, by striking ‘‘the

6 Association or its designated agency may begin

7 making loans’’ and inserting ‘‘the Association

8 or its designated agent shall, subject to the lim9 itations in section 428(j)(3), begin making

10 loans to such eligible borrowers’’; and

11 (B) by striking the second sentence;

12 (2) in paragraph (2)(A), by striking ‘‘the Asso13 ciation or its designated agent may’’ and inserting

14 ‘‘the Association or its designated agent shall, sub15 ject to the limitations in section 428(j)(3),’’; and

16 (3) in paragraph (3), by striking ‘‘that—’’

17 through the end thereof and inserting the following:

18 ‘‘that the conditions that caused the implementation

19 of this subsection have ceased to exist.’’.

20 SEC. 4022. GUARANTY AGENCY RESERVES.

21 Section 422 of the Act is amended by adding at the

22 end thereof the following new subsection:

23 ‘‘(g) PRESERVATION OF GUARANTY AGENCY RE24 SERVES.—
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1 ‘‘(1) AUTHORITY TO RECOVER FUNDS.—Not2 withstanding any other provision of law, the reserve

3 funds of the guaranty agencies, and any assets pur4 chased with such reserve funds, regardless of who

5 holds or controls the reserves or assets, shall be con6 sidered to be the property of the United States to

7 be used in the operation of the program authorized

8 by this part or the program authorized by part D of

9 this title. However, the Secretary may not require

10 the return of all of a guaranty agency reserve funds

11 to the Secretary unless he or she determines that

12 such return is essential to the operation of the pro13 gram authorized by this part or the program author14 ized by part D of this title, or to ensure the orderly

15 termination of the guaranty agency’s operations and

16 the liquidation of its assets. The reserves shall be

17 maintained by each guaranty agency to pay program

18 expenses and contingent liabilities, as authorized by

19 the Secretary, except that the Secretary may—

20 ‘‘(A) direct a guaranty agency to return to

21 the Secretary a portion of its reserve fund

22 which the Secretary determines is unnecessary

23 to pay the program expenses and contingent li24 abilities of the guaranty agency; and
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1 ‘‘(B) direct the guaranty agency to require

2 the return, to the guaranty agency or to the

3 Secretary, of any reserve funds or assets held

4 by, or under the control of, any other entity,

5 which the Secretary determines are necessary to

6 pay the program expenses and contingent liabil7 ities of the guaranty agency, or which are re8 quired for the orderly termination of the guar9 anty agency’s operations and the liquidation of

10 its assets.

11 ‘‘(2) TERMINATION PROVISIONS IN CON12 TRACTS.—To ensure that the funds and assets of

13 the guaranty agency are preserved, any contract

14 with respect to the administration of a guaranty

15 agency’s reserve funds, or the administration of any

16 assets purchased or acquired with the reserve funds

17 of the guaranty agency, that is entered into or ex18 tended by the guaranty agency, or any other party

19 on behalf of or with the concurrence of the guaranty

20 agency, after the effective date of this provision shall

21 provide that the contract is terminable by the Sec22 retary upon 30 days notice to the contracting parties

23 if the Secretary determines that such contract in24 cludes an impermissible transfer of the reserve funds
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1 or assets, or is otherwise inconsistent with the terms

2 or purposes of this section.’’.

3 SEC. 4023. TERMS OF LOANS.

4 Section 428 of the Act is amended—

5 (1) in subsection (b)(1)(D), by striking ‘‘be

6 subject to’’ through the end thereof and inserting

7 the following: ‘‘be subject to income contingent re8 payment in accordance with subsection (m);’’; and

9 (2) in subsection (m)—

10 (A) by amending paragraph (1) to read as

11 follows:

12 ‘‘(1) AUTHORITY OF SECRETARY TO RE13 QUIRE.—The Secretary may require any borrower

14 who has defaulted on a loan made under this part

15 that is assigned to the Secretary under subsection

16 (c)(8) to repay that loan under an income contingent

17 repayment plan, the terms and conditions of which

18 shall be established by the Secretary and the same

19 as, or similar to, the EXCEL Account established

20 for purposes of part D of this title.’’; and

21 (B) by striking paragraphs (2) through (4)

22 and inserting the following:

23 ‘‘(2) LOANS FOR WHICH INCOME CONTINGENT

24 REPAYMENT MAY BE REQUIRED.—A loan made

25 under this part may be required to be repaid under
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1 this subsection if the note or other evidence of the

2 loan has been assigned to the Secretary pursuant to

3 subsection (c)(8).’’.

4 SEC. 4024. ASSIGNMENT OF LOANS.

5 Section 428(c)(8) of the Act is amended by—

6 (1) inserting the subparagraph designation

7 ‘‘(A)’’ after the paragraph heading;

8 (2) striking the second and third sentences; and

9 (3) adding at the end thereof the following new

10 subparagraph:

11 ‘‘(B) An orderly transition from the Federal

12 Family Education Loan program under this part to

13 the Federal Direct Student Loan program under

14 part D of this title shall be deemed to be in the Fed15 eral fiscal interest, and a guaranty agency shall

16 promptly assign loans to the Secretary under this

17 paragraph upon his or her request.’’.

18 SEC. 4025. TERMINATION OF GUARANTY AGENCY AGREE19 MENTS; ASSUMPTION OF GUARANTY AGENCY

20 FUNCTIONS BY THE SECRETARY.

21 Section 428(c)(10) of the Act is amended—

22 (1) in subparagraph (C), by inserting a comma

23 and ‘‘as appropriate,’’ immediately after ‘‘the Sec24 retary shall’’;

25 (2) in subparagraph (D)—
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1 (A) by inserting the clause designation

2 ‘‘(i)’’ after ‘‘(D)’’;

3 (B) by striking ‘‘Each’’ and inserting ‘‘If

4 the Secretary is not seeking to terminate the

5 guaranty agency’s agreement under subpara6 graph (E), or assuming the guaranty agency’s

7 functions under subparagraph (F), a’’;

8 (C) by adding at the end thereof the fol9 lowing new clause:

10 ‘‘(ii) If the Secretary is seeking to terminate

11 the guaranty agency’s agreement under subpara12 graph (E), or assuming the guaranty agency’s func13 tions under subparagraph (F), a management plan

14 described in subparagraph (C) shall include the

15 means by which the Secretary and the guaranty

16 agency shall work together to ensure the orderly ter17 mination of the operations, and liquidation of the as18 sets of, the guaranty agency.’’;

19 (3) in subparagraph (E)—

20 (A) in clause (ii), by striking ‘‘or’’ at the

21 end thereof;

22 (B) in clause (iii), by striking the period at

23 the end thereof and inserting a semicolon; and

24 (C) by adding at the end thereof the fol25 lowing new clauses:
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1 ‘‘(iv) the Secretary determines that such

2 action is necessary to protect the Federal fiscal

3 interest;

4 ‘‘(v) the Secretary determines that such

5 action is necessary to ensure the continued

6 availability of loans to student or parent bor7 rowers; or

8 ‘‘(vi) the Secretary determines that such

9 action is necessary to ensure an orderly transi10 tion from the loan programs under this part to

11 the direct student loan programs under part D

12 of this title.’’;

13 (4) in subparagraph (F)—

14 (A) in the matter preceding clause (i), by

15 striking ‘‘Except as provided in subparagraph

16 (G), if’’ and inserting ‘‘If’’;

17 (B) by amending clause (v) to read as fol18 lows:

19 ‘‘(v) provide the guaranty agency with ad20 ditional advance funds in accordance with sec21 tion 422(c)(7), with such restrictions on the use

22 of such funds as is determined appropriate by

23 the Secretary, in order to—

24 ‘‘(I) meet the immediate cash needs of

25 the guaranty agency;
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1 ‘‘(II) ensure the uninterrupted pay2 ment of claims; or

3 ‘‘(III) ensure that the guaranty agen4 cy will make loans as the lender-of-last5 resort, in accordance with subsection

6 (j)(4);’’;

7 (C) in clause (vi)—

8 (i) by striking ‘‘and to avoid’’ and in9 serting ‘‘to avoid’’;

10 (ii) by striking the period at the end

11 thereof and inserting ‘‘, and to ensure an

12 orderly transition from the loan programs

13 under this part to the direct student loan

14 programs under part D of this title.’’; and

15 (iii) by redesignating such clause as

16 clause (vii); and

17 (D) by inserting after clause (v) the follow18 ing new clause:

19 ‘‘(vi) use all funds and assets of the guar20 anty agency to assist in the activities under21 taken in accordance with this subparagraph and

22 take appropriate action to require the return, to

23 the guaranty agency or the Secretary, of any

24 funds or assets provided by the guaranty agen-
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1 cy, under contract or otherwise, to any person

2 or organization; or’’;

3 (5) by striking subparagraph (G);

4 (6) by redesignating subparagraphs (H), (I),

5 and (J) as subparagraphs (I), (J), and (K), respec6 tively;

7 (7) by inserting after subparagraph (F) the fol8 lowing new subparagraphs:

9 ‘‘(G) Notwithstanding any other provision of

10 Federal or State law, if the Secretary has termi11 nated or is seeking to terminate a guaranty agency’s

12 agreement under subparagraph (E), or has assumed

13 a guaranty agency’s functions under subparagraph

14 (F)—

15 ‘‘(i) such guaranty agency may not file for

16 bankruptcy;

17 ‘‘(ii) no State court may issue any order

18 affecting the Secretary’s actions with respect to

19 such guaranty agency;

20 ‘‘(iii) any contract with respect to the ad21 ministration of a guaranty agency’s reserve

22 funds, or the administration of any assets pur23 chased or acquired with the reserve funds of the

24 guaranty agency, that is entered into or ex25 tended by the guaranty agency, or any other
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1 party on behalf of or with the concurrence of

2 the guaranty agency, after the effective date of

3 this provision shall provide that the contract is

4 terminable by the Secretary upon 30 days no5 tice to the contracting parties if the Secretary

6 determines that such contract includes an im7 permissible transfer of the reserve funds or as8 sets, or is otherwise inconsistent with the terms

9 or purposes of this section; and

10 ‘‘(iv) no provision of State law shall apply

11 to the actions of the Secretary in terminating

12 the operations of a guaranty agency.

13 ‘‘(H) Notwithstanding any other provision of

14 law, the Secretary’s liability for any outstanding li15 abilities of a guaranty agency (other than outstand16 ing student loan guarantees under this part), the

17 functions of which the Secretary has assumed, shall

18 not exceed the fair market value of the reserves of

19 the guaranty agency, minus any necessary liquida20 tion or other administrative costs.’’; and

21 (8) in subparagraph (K) (as redesignated by

22 paragraph (6)), by striking ‘‘system, together’’

23 through the end thereof and inserting the following:

24 ‘‘system and the progress of the transition from the
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1 loan programs under this part to the direct student

2 loan programs under part D of this title.’’.

3 SEC. 4026. ADMINISTRATIVE COST ALLOWANCE.

4 Section 428(f)(1) of the Act is amended—

5 (1) in subparagraph (A), by striking ‘‘The Sec6 retary’’ and inserting ‘‘For a fiscal year prior to fis7 cal year 1994, the Secretary’’; and

8 (2) in subparagraph (B), by inserting ‘‘prior to

9 fiscal year 1994’’ after ‘‘any fiscal year’’.

10 SEC. 4027. CONSOLIDATION LOANS.

11 Section 428C of the Act is amended—

12 (1) by amending subsection (a)(3)(A) to read as

13 follows:

14 ‘‘(3) DEFINITION OF ELIGIBLE BORROWERS.—

15 (A) For the purpose of this section, the term ‘eligi16 ble borrower’ means a borrower who, at the time of

17 application for a consolidation loan is in repayment

18 status, or in a grace period preceding repayment, or

19 is a delinquent or defaulted borrower who will reen20 ter repayment through loan consolidation.’’;

21 (2) in subsection (b)—

22 (A) in paragraph (1)—

23 (i) in subparagraph (A)(ii), by insert24 ing ‘‘with income-sensitive repayment

25 terms’’ after ‘‘obtain a consolidation loan’’;
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1 (ii) by redesignating subparagraph

2 (E) as subparagraph (F); and

3 (iii) by inserting after subparagraph

4 (D) the following new subparagraph:

5 ‘‘(E) that the lender shall offer an income6 sensitive repayment schedule, established by the

7 lender in accordance with the regulations of the

8 Secretary, to the borrower of any consolidation

9 loan made by the lender on or after July 1,

10 1994; and’’;

11 (B) in paragraph (4), by amending sub12 paragraph (C) to read as follows:

13 ‘‘(C)(i) provides that periodic installments

14 of principal need not be paid, but interest shall

15 accrue and be paid in accordance with clause

16 (ii), during any period for which the borrower

17 would be eligible for a deferral under section

18 428(b)(1)(M), and that any such period shall

19 not be included in determining the repayment

20 period pursuant to subsection (c)(2) of this sec21 tion; and

22 ‘‘(ii) provides that interest shall accrue and

23 be paid—

24 ‘‘(I) by the Secretary, in the case of

25 a consolidation loan that consolidated only
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1 Federal Stafford Loans for which the stu2 dent borrower received an interest subsidy

3 under section 428; or

4 ‘‘(II) by the borrower, or capitalized,

5 in the case of a consolidation loan other

6 than one described in subclause (I);’’; and

7 (C) by adding at the end thereof the fol8 lowing new paragraph:

9 ‘‘(5) DIRECT LOANS.—In the event that a bor10 rower is unable to obtain a consolidation loan with

11 income-sensitive repayment terms acceptable to the

12 borrower from a lender with an agreement under

13 subsection (a)(1), the Secretary shall offer any such

14 borrower who applies for it, a direct consolidation

15 loan to be repaid pursuant to an EXCEL Account

16 under part D of this title, except that the Secretary

17 shall not offer such loans if, in his or her judgment,

18 the Department does not yet have the necessary

19 origination and servicing arrangements in place for

20 such loans.’’; and

21 (3) in subsection (c)—

22 (A) in paragraph (1), by amending sub23 paragraphs (B) and (C) to read as follows:

24 ‘‘(B) A consolidation loan made before July 1,

25 1994, shall bear interest at an annual rate on the
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1 unpaid principal balance of the loan that is equal to

2 the greater of—

3 ‘‘(i) the weighted average of the interest

4 rates on the loans consolidated, rounded to the

5 nearest whole percent; or

6 ‘‘(ii) 9 percent.

7 ‘‘(C) A consolidation loan made on or after July

8 1, 1994, shall bear interest at an annual rate on the

9 unpaid principal balance of the loan that is equal to

10 the weighted average of the interest rates on the

11 loans consolidated, rounded upward to the nearest

12 whole percent.’’;

13 (B) in paragraph (2)(A)—

14 (i) in the matter preceding clause (i),

15 by striking out ‘‘income sensitive repay16 ment schedules. Such repayment terms’’

17 and inserting in lieu thereof ‘‘income sen18 sitive repayment schedules, established by

19 the lender in accordance with the regula20 tions of the Secretary. Except as required

21 by such income sensitive repayment sched22 ules, or by the terms of repayment pursu23 ant to an EXCEL Account offered by the

24 Secretary under subsection (b)(5), such re25 payment terms’’;
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1 (ii) by redesignating clauses (i), (ii),

2 (iii), (iv), and (v) as clauses (ii), (iii), (iv),

3 (v), and (vi), respectively;

4 (iii) by inserting immediately preced5 ing clause (ii) (as redesignated by clause

6 (ii)) the following new clause:

7 ‘‘(i) is less than $7,500, then such consoli8 dation loan shall be repaid in not more than 10

9 years;’’; and

10 (iv) by adding a period at the end of

11 clause (vi) (as redesignated by clause (ii));

12 (C) by striking out suparagraph (B) of

13 paragraph (2); and

14 (D) by redesignating subparagraph (C) of

15 paragraph (2) as subparagraph (B); and

16 (E) in paragraph (3)(A), by inserting after

17 the subparagraph designation the following:

18 ‘‘except as required by the terms of repayment

19 pursuant to an EXCEL Account offered by the

20 Secretary under subsection (b)(5),’’.

21 SEC. 4028. STUDENT LOAN MARKETING ASSOCIATION.

22 Section 439 of the Act is further amended by adding

23 at the end thereof the following new subsection:

24 ‘‘(s) TRANSITION STUDY.—The Secretaries of Edu25 cation and the Treasury shall prepare a study, to be com-
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1 pleted within 6 months of the enactment of this provision,

2 which shall examine alternatives concerning the status, op3 erations, and purposes of the Association during and after

4 the transition from the Federal Family Education Loan

5 program to the Federal Direct Student Loan program.

6 Such study shall—

7 ‘‘(1) consider how best to meet the needs of

8 students and taxpayers;

9 ‘‘(2) reflect the need for the Association to

10 maintain liquidity and perform other functions for

11 the Federal Family Education Loan program during

12 the transition from such program to the Federal Di13 rect Student Loan program under part D of this

14 title, including additional duties as specified by the

15 Secretary of Education or the Secretary of the

16 Treasury;

17 ‘‘(3) consider any appropriate change to part D

18 of title VII, relating to the College Construction

19 Loan Insurance Association; and

20 ‘‘(4) be considered by the Secretaries of Edu21 cation and the Treasury in developing any legislative

22 proposals concerning any changes to the status of

23 the Association as a Government-sponsored enter24 prise or its duties under the Federal Family Edu25 cation Loan program.’’.
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1 SEC. 4029. AMENDMENT TO THE BALANCED BUDGET AND

2 EMERGENCY DEFICIT CONTROL ACT OF 1985.

3 The Balanced Budget and Emergency Deficit Control

4 Act of 1985 is amended—

5 (1) in section 252(c)(1)(B), by striking ‘‘guar6 anteed’’;

7 (2) in section 256(b)—

8 (A) by striking the subsection designation

9 and heading and inserting the following:

10 ‘‘(b) EFFECT OF ORDERS ON STUDENT LOAN PRO11 GRAMS.—

12 ‘‘(1) FEDERAL FAMILY EDUCATION LOAN PRO13 GRAM.—(A)’’;

14 (B) by redesignating paragraphs (2) and

15 (3) as subparagraphs (B) and (C), respectively,

16 and by indenting such subparagraphs by an ad17 ditional 2 ems spaces;

18 (C) in paragraph (1)(A) (as redesignated

19 in subparagraph (B)), by striking ‘‘described in

20 paragraphs (2) and (3)’’ and inserting ‘‘de21 scribed in subparagraphs (B) and (C)’’;

22 (D) in paragraph (1)(B) (as redesignated

23 in subparagraph (C)), by redesignating sub24 paragraphs (A) and (B) as clauses (i) and (ii),

25 respectively; and
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1 (E) by adding at the end thereof the fol2 lowing new paragraph:

3 ‘‘(2) FEDERAL DIRECT STUDENT LOAN PRO4 GRAM.—(A) Any reductions that are required to be

5 achieved from the Federal Direct Student Loan pro6 gram operated under part D of title IV of the High7 er Education Act of 1965 as a consequence of an

8 order issued pursuant to section 254, shall be

9 achieved only by the application of the measures de10 scribed in subparagraph (B).

11 ‘‘(B) For any loan made during the period be12 ginning on the date that an order issued under sec13 tion 254 takes effect with respect to a fiscal year,

14 and ending at the close of such fiscal year, the loan

15 fee that is authorized to be collected pursuant to

16 section 456(c) of such Act shall be increased by 0.50

17 percent.’’.

18 CHAPTER 3—EFFECTIVE DATES; STUDY

19 SEC. 4031. EFFECTIVE DATES.

20 (a) IN GENERAL.—Except as otherwise provided in

21 this section, the amendments made by this subtitle shall

22 be effective upon enactment.

23 (b) INCOME CONTINGENT REPAYMENT.—The

24 amendments made by section 4023 of this Act shall be

25 effective for loans made in accordance with section 428
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1 for periods of instruction beginning on or after July 1,

2 1993, or made on or after July 1, 1993, in the case of

3 loans made in accordance with section 428A, 428B, or

4 428C of the Act.

5 (c) ADMINISTRATIVE COST ALLOWANCE.—The

6 amendments made by section 4026 of this Act shall be

7 effective on October 1, 1994.

8 (d) CONSOLIDATION LOANS.—The amendments

9 made by section 4027 of this Act (other than the amend10 ment made by section 4027(2)(B)) shall be effective for

11 loans made in accordance with section 428C of the Act

12 or after July 1, 1994.

13 SEC. 4032. STUDY OF INTERNAL REVENUE SERVICE COL14 LECTION OF STUDENT LOANS.

15 (a) GENERAL RULE.—The Secretary of Education,

16 in consultation with the Secretary of the Treasury, shall

17 conduct a study of the feasibility of implementing a system

18 for the repayment of Federal student loans through wage

19 withholding or other means involving the Internal Revenue

20 Service. Such study shall include an examination of—

21 (1) whether the Internal Revenue Service could

22 implement such a system within its current re23 sources and without adversely affecting the ability of

24 the Internal Revenue Service to collect tax revenues,
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1 (2) the cumulative impact on voluntary compli2 ance with the tax system of increased disclosure of

3 tax return information and increased Internal Reve4 nue Service involvement in nontax collection activi5 ties,

6 (3) the anticipated effect on the management of

7 Federal student loan collections and on borrower re8 payment of such loans, and

9 (4) the ability of the Internal Revenue Service

10 to effectively service student loans.

11 (b) RECOMMENDATIONS.—Not later than the date 6

12 months after the date of the enactment of this Act, the

13 Secretary of Education shall submit to the Congress a re14 port on the study conducted under subsection (a), together

15 with such legislative recommendations as such Secretary

16 may deem advisable.

17 SEC. 4033. PREFERENCE OF COMMITTEE FOR IRS COLLEC18 TION MECHANISM.

19 It is the sense of the Committee on Education and

20 Labor that—

21 (1) the Committee may not, consistent with its

22 jurisdiction under the Rules of the House of Rep23 resentatives, amend this Act to include provisions

24 providing for the collection of student loans pursu25 ant to the Internal Revenue Code of 1986 using the
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1 Internal Revenue Service of the Department of the

2 Treasury;

3 (2) the Committee would support the amend4 ment of this Act to include such provisions, as well

5 as amendments to the Higher Education Act of

6 1965, in the manner proposed by H.R. llll as

7 introduced on May 11, 1993; and

8 (3) the Committee recommends that the House

9 of Representatives consider and adopt such amend10 ments.

11 Subtitle B—Cost Sharing by States

12 SEC. 4101. COST SHARING BY STATES.

13 (a) AMENDMENT.—Section 428 of the Higher Edu14 cation Act of 1965 (20 U.S.C. 1001 et seq.) is amended

15 by adding at the end thereof the following new subsection:

16 ‘‘(n) STATE SHARE OF DEFAULT COSTS.—(1) In the

17 case of any State in which there are located any institu18 tions of higher education with cohort default rates that

19 exceed 20 percent, such State shall pay to the Secretary

20 an amount equal to—

21 ‘‘(A) the new loan volume attributable to all in22 stitutions in the State for the current fiscal year,

23 multiplied by

24 ‘‘(B) the percentage specified in paragraph (2),

25 multiplied by
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1 ‘‘(C) the quotient of—

2 ‘‘(i) the sum of the amounts calculated

3 under paragraph (3) for each such institution

4 in the State, divided by

5 ‘‘(ii) the total amount of loan volume at6 tributable to current and former students of in7 stitutions located in that State entering repay8 ment in the period used to calculate the cohort

9 default rate.

10 ‘‘(2) For purposes of paragraph (1)(B), the percent11 age used shall be—

12 ‘‘(A) 12.5 percent for fiscal year 1995;

13 ‘‘(B) 20 percent for fiscal year 1996; and

14 ‘‘(C) 50 percent for fiscal year 1997 and suc15 ceeding fiscal years.

16 ‘‘(3) For purposes of paragraph (1)(C)(i), the

17 amount shall be determined by calculating for each insti18 tution the amount by which—

19 ‘‘(A) the amount of the loans received for at20 tendance by its current and former students who (i)

21 enter repayment during the fiscal year used for the

22 calculation of the cohort default rate, and (ii) de23 fault before the end of the following fiscal year; ex24 ceeds
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1 ‘‘(B) 20 percent of the loans received for at2 tendance by all the current and former students who

3 enter repayment during the fiscal year used for the

4 calculation of the cohort default rate.

5 ‘‘(4) A State may charge a fee to an institution of

6 higher education that participates in the program under

7 this part and is located in that State according to a fee

8 structure, approved by the Secretary, that is based on the

9 institution’s cohort default rate and the State’s risk of loss

10 under this subsection. Such fee structure shall include a

11 process by which an institution with a high cohort default

12 rate is exempt from any fees under this paragraph if such

13 institution demonstrates to the satisfaction of the State

14 that exceptional mitigating circumstances, as determined

15 by the State and approved by the Secretary, contributed

16 to its cohort default rate.’’.

17 (b) EFFECTIVE DATE.—The amendment made by

18 this section shall be effective on October 1, 1994.
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1 Subtitle C—ERISA Amendments

2 Relating to Group Health Plans

3 SEC. 4201. COORDINATION OF ERISA PREEMPTION RULES

4 WITH TITLE XIX PROVISIONS PROVIDING FOR

5 LIABILITY OF THIRD PARTIES.

6 (a) IN GENERAL.—Paragraph (8) of section 514(b)

7 of the Employee Retirement Income Security Act of 1974

8 (29 U.S.C. 1144(b)(8)) is amended to read as follows:

9 ‘‘(8)(A) Subsection (a) of this section shall not apply

10 to any State law to the extent necessary to permit the

11 State to comply with the following requirements for the

12 receipt of Federal financial assistance under title XIX of

13 the Social Security Act:

14 ‘‘(i) subparagraphs (A), (B), and (H) of section

15 1902(a)(25) of such Act (relating to third-party li16 ability) and section 1903(o) of such Act (relating to

17 medicaid as secondary payor), as in effect on Octo18 ber 1, 1993; and

19 ‘‘(ii) sections 1902(a)(45) and 1912 of such Act

20 (relating to assignment of rights of payment), as in

21 effect on May 12, 1993.

22 ‘‘(B) Paragraph (2)(B) shall not apply to any State

23 law to the extent necessary to permit the compliance of

24 the State with any of the requirements described in sub25 paragraph (A).’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall take effect October 1, 1993.

3 SEC. 4202. CONTINUED COVERAGE OF COSTS OF A PEDI4 ATRIC VACCINE UNDER GROUP HEALTH

5 PLANS.

6 (a) IN GENERAL.—Part 6 of subtitle B of title I of

7 the Employee Retirement Income Security Act of 1974

8 (29 U.S.C. 1161 et seq.) is amended by adding at the end

9 the following new section:

10 ‘‘SEC. 609. CONTINUED COVERAGE OF COSTS OF A PEDI11 ATRIC VACCINE UNDER GROUP HEALTH

12 PLANS.

13 ‘‘A group health plan may not reduce its coverage of

14 the costs of pediatric vaccines (as defined under section

15 2162 of the Public Health Service Act) below the coverage

16 it provided as of May 1, 1993.’’.

17 (b) CONFORMING AMENDMENT.—The table of con18 tents in section 1 of such Act is amended by adding after

19 the item relating to section 608 the following new item:

‘‘Sec. 609. Continued coverage of costs of a pediatric vaccine under group

health plans.’’.

20 (c) EFFECTIVE DATE.—The amendments made by

21 this section shall apply with respect to plan years begin22 ning after the date of the enactment of this Act.
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1 SEC. 4203. TEMPORARY RULES GOVERNING PREEMPTION

2 OF CERTAIN STATE LAWS.

3 Paragraph (5) of section 514(b) of the Employee Re4 tirement Income Security Act of 1974 (29 U.S.C.

5 1144(b)(5)) is amended to read as follows:

6 ‘‘(5)(A)(i) Except as provided in clauses (ii) and (iii),

7 subsection (a) shall not apply to the Hawaii Prepaid

8 Health Care Act (Haw. Rev. Stat. §§ 393-1 through 393-

9 51).

10 ‘‘(ii) Nothing in clause (i) shall be construed to ex11 empt from subsection (a) any State tax law relating to

12 employee benefit plans.

13 ‘‘(iii) Notwithstanding clause (i), parts 1 and 4 of

14 this subtitle, and the preceding sections of this part to

15 the extent they govern matters which are governed by the

16 provisions of such parts 1 and 4, shall supersede the Ha17 waii Prepaid Health Care Act (as in effect on or after Jan18 uary 14, 1983), but the Secretary may enter into coopera19 tive arrangements under this subparagraph and section

20 506 with officials of the State of Hawaii to assist them

21 in effectuating the policies of provisions of such Act which

22 are superseded by such parts 1 and 4 and the preceding

23 sections of this part.

24 ‘‘(B)(i) Except as provided in clauses (ii) and (iii),

25 subsection (a) shall not apply to subtitle 2 of title 19 of
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1 the Annotated Code of Maryland (relating to the Health

2 Services Cost Review Commission).

3 ‘‘(ii) Nothing in clause (i) shall be construed to ex4 empt from subsection (a)—

5 ‘‘(I) any State tax law relating to employee ben6 efit plans, or

7 ‘‘(II) any amendment of the provision referred

8 to in clause (i) enacted on or after May 12, 1993,

9 to the extent it provides for more than the effective

10 administration of such Act as in effect on such date.

11 ‘‘(iii) Notwithstanding clause (i), parts 1 and 4 of

12 this subtitle, and the preceding sections of this part to

13 the extent they govern matters which are governed by the

14 provisions of such parts 1 and 4, shall supersede the provi15 sion referred to in clause (i) (as in effect on or after May

16 12, 1993), but the Secretary may enter into cooperative

17 arrangements under this subparagraph and section 506

18 with officials of the State of Maryland to assist them in

19 effectuating the policies of such provision which are super20 seded by such parts 1 and 4 and the preceding sections

21 of this part.

22 ‘‘(C)(i) Except as provided in clauses (ii) and (iii),

23 subsection (a) shall not apply to the following provisions

24 of the law of the State of Minnesota:
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1 ‘‘(I) section 295.52, Minnesota Statutes, as

2 amended in May 1993 by House File 1178 (relating

3 to receipts tax on providers);

4 ‘‘(II) section 19 of article 9 of the Minnesota

5 Health Right Act, as amended in May 1993 by

6 House File 1178 (relating to passthrough of 2 per7 cent gross receipts tax on providers); and

8 ‘‘(III) subdivision 2 of section 3 of article 1 of

9 such Act, article 7 of such Act, and section 1 of arti10 cle 3 of Minnesota House File 1178 and section 4

11 and all that follows through the end of such article

12 3, as enacted in May 1993 (relating to data collec13 tion).

14 ‘‘(ii) Nothing in clause (i) shall be construed to ex15 empt from subsection (a)—

16 ‘‘(I) any State tax law relating to employee ben17 efit plans (other than a provision described in clause

18 (i)), and

19 ‘‘(II) any amendment of any provision referred

20 to in clause (i) enacted on or after May 12, 1993,

21 to the extent it provides for more than the effective

22 administration of such provision as in effect on such

23 date.

24 ‘‘(iii) Notwithstanding clause (i), parts 1 and 4 of

25 this subtitle, and the preceding sections of this part to
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1 the extent they govern matters which are governed by the

2 provisions of such parts 1 and 4, shall supersede the provi3 sions described in clause (i) (as in effect on or after May

4 12, 1993), but the Secretary may enter into cooperative

5 arrangements under this subparagraph and section 506

6 with officials of the State of Minnesota to assist them in

7 effectuating the policies of such provisions which are su8 perseded by such parts 1 and 4 and the preceding sections

9 of this part.

10 ‘‘(D)(i) Except as provided in clauses (ii), (iv), (v),

11 and (vii), subsection (a) shall not apply to the following

12 provisions of the law of the State of New York:

13 ‘‘(I) subdivisions 1(b) and 4(e) of section

14 2807–c of the Public Health Law (relating to 13

15 percent surcharge);

16 ‘‘(II) subdivision 1(c) of section 2807–c of the

17 Public Health Law (relating to uniform hospital

18 charges);

19 ‘‘(III) subdivision 2–a of section 2807–c of the

20 Public Health Law (relating to the variable sur21 charge for HMOs);

22 ‘‘(IV) subdivision 14 of section 2807–c of the

23 Public Health Law (relating to basic percentage al24 lowances for bad debt and charity care);
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1 ‘‘(V) subdivision 14–b of section 2807–c of the

2 Public Health Law (relating to health care services

3 allowances);

4 ‘‘(VI) subdivision 14–c of section 2807–c of the

5 Public Health Law (relating to further allowances

6 for financially distressed hospitals); and

7 ‘‘(VII) section 18 of chapter 266 of the laws of

8 1986, as amended (relating to excess malpractice in9 surance adjustments).

10 ‘‘(ii) Except as provided in clause (iii), nothing in

11 clause (i) shall be construed to exempt from subsection

12 (a)—

13 ‘‘(I) any State tax law relating to employee ben14 efit plans, or

15 ‘‘(II) any provision referred to in clause (i) to

16 the extent that any law of the State of New York

17 appropriates amounts based on amounts collected by

18 the State under such provision for any purpose other

19 than carrying out the programs established under

20 the provisions described in clause (i).

21 ‘‘(iii) Notwithstanding clause (ii), subsection (a) shall

22 not apply to any provision of the law of the State of New

23 York to the extent that such provision constitutes—
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1 ‘‘(I) an HMO surcharge of the type provided

2 for under subdivision 2–a of such section 2807–c (as

3 in effect on February 2, 1993), or

4 ‘‘(II) an allowance, of the type provided for

5 under the provisions referred to in clause (i) (as so

6 in effect), for bad debts, charity care, health care

7 services, or excess malpractice insurance,

8 but only if the law of such State appropriates amounts

9 based on and equivalent to amounts collected by the State

10 under such provision solely for the purpose of carrying out

11 one or more programs established under the provisions de12 scribed in clause (i).

13 ‘‘(iv) Subsection (a) shall apply to any provision of

14 the law of the State of New York to the extent that such

15 provision constitutes a surcharge of the type provided for

16 under subdivisions 1(b) and 4(e) of section 2807–c of the

17 Public Health Law of the State of New York (as in effect

18 on February 2, 1993) unless such provision provides for

19 use of amounts collected under such provision solely for

20 the purpose of carrying out one or more programs estab21 lished under the provisions described in clause (i).

22 ‘‘(v) Nothing in clause (i) shall be construed to ex23 empt from subsection (a) any amendment of any provision

24 referred to in clause (i) enacted on or after February 2,

25 1993, to the extent it provides for more than the effective
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1 administration of such provisions as in effect on such date,

2 unless such amendment constitutes only a change in the

3 methodology of determining payments to hospitals and

4 would result in—

5 ‘‘(I) a surcharge described in clause (iii)(I) of

6 not more than 9 percent with respect to which the

7 requirements of clause (iii) are met,

8 ‘‘(II) an allowance described in clause (iii)(II)

9 which does not exceed in the aggregate a Statewide

10 average of not more than 10 percent and with re11 spect to which the requirements of clause (iii) are

12 met, or

13 ‘‘(III) a surcharge described in clause (iv) of

14 not more than 13 percent with respect to which the

15 requirements of clause (iv) are met.

16 ‘‘(vi) Subsection (a) shall not apply to any amend17 ment to chapter 2 of the laws of 1988 of the State of

18 New York, as amended, to the extent that such amend19 ment extends the period for which the provisions referred

20 to in clause (i) are in effect.

21 ‘‘(vii) Notwithstanding clause (i), parts 1 and 4 of

22 this subtitle, and the preceding sections of this part to

23 the extent they govern matters which are governed by the

24 provisions of such parts 1 and 4, shall supersede the provi25 sions described in clause (i) (as in effect on or after Feb-
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1 ruary 2, 1993), but the Secretary may enter into coopera2 tive arrangements under this subparagraph and section

3 506 with officials of the State of New York to assist them

4 in effectuating the policies of such provisions which are

5 superseded by such parts 1 and 4 and the preceding sec6 tions of this part.

7 ‘‘(viii) The provisions of this subparagraph shall be

8 effective as of February 2, 1993.

9 ‘‘(E) This paragraph shall cease to be effective as of

10 May 12, 1995.’’.

11 TITLE V—COMMITTEE ON

12 ENERGY AND COMMERCE

13 Subtitle A—Medicare Program

14 SEC. 5000. REFERENCES IN SUBTITLE; TABLE OF CON15 TENTS OF SUBTITLE.

16 (a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex17 cept as otherwise specifically provided, whenever in this

18 subtitle an amendment is expressed in terms of an amend19 ment to or repeal of a section or other provision, the ref20 erence shall be considered to be made to that section or

21 other provision of the Social Security Act.

22 (b) REFERENCES TO OBRA.—In this subtitle, the

23 terms ‘‘OBRA–1986’’, ‘‘OBRA–1987’’, ‘‘OBRA–1989’’,

24 and ‘‘OBRA–1990’’ refer to the Omnibus Budget Rec25 onciliation Act of 1986 (Public Law 99–509), the Omni-
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1 bus Budget Reconciliation Act of 1987 (Public Law 100–

2 203), the Omnibus Budget Reconciliation Act of 1989

3 (Public Law 101–239), and the Omnibus Budget Rec4 onciliation Act of 1990 (Public Law 101–508), respec5 tively.

6 (c) TABLE OF CONTENTS OF SUBTITLE.—The table

7 of contents of this subtitle is as follows:

Sec. 5000. References in subtitle; table of contents of subtitle.

CHAPTER 1—PROVISIONS RELATING TO PART B

SUBCHAPTER A—PHYSICIANS’ SERVICES

Sec. 5001. Reduction in default update for conversion factor for 1994.

Sec. 5002. Reduction in performance standard rate of increase and increase in

maximum reduction permitted in default update.

Sec. 5003. Classification of primary care services as a separate category of

services.

Sec. 5004. Phased-in reduction in practice expense relative value units for certain services.

Sec. 5005. Limitation on payment for the anesthesia care team.

Sec. 5006. Basing payments for anesthesia services on actual time.

Sec. 5007. Separate payment for interpretation of electrocardiograms.

Sec. 5008. Payments for new physicians and practitioners.

Sec. 5009. Geographic adjustment factors for medicare physicians’ services.

Sec. 5010. Extra-billing limits.

Sec. 5011. Relative values for pediatric services.

Sec. 5012. Antigens under physician fee schedule.

Sec. 5013. Administration of claims relating to physicians’ services.

Sec. 5014. Miscellaneous and technical corrections.

SUBCHAPTER B—OUTPATIENT HOSPITAL SERVICES AND AMBULATORY

SURGICAL SERVICES

Sec. 5021. Extension of 10 percent reduction in payments for capital-related

costs of outpatient hospital services.

Sec. 5022. Extension of current reduction in payments for other costs of outpatient hospital services.

Sec. 5023. 1-year freeze in ambulatory surgery rates.

Sec. 5024. Eye or eye and ear hospitals.

Sec. 5025. Extension of cap on payments for intraocular lenses.

Sec. 5026. Miscellaneous and technical corrections.

SUBCHAPTER C—DURABLE MEDICAL EQUIPMENT

Sec. 5031. Revisions to payment rules for durable medical equipment.

Sec. 5032. Payment for parenteral and enteral nutrients, supplies, and equipment during 1994.

Sec. 5033. Treatment of nebulizers and aspirators.
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Sec. 5034. Certification of suppliers.

Sec. 5035. Prohibition against carrier forum shopping.

Sec. 5036. Restrictions on certain marketing and sales activities.

Sec. 5037. Kickback clarification.

Sec. 5038. Beneficiary liability for noncovered services.

Sec. 5039. Adjustments for inherent reasonableness.

Sec. 5040. Payment for surgical dressings.

Sec. 5041. Payments for tens devices.

Sec. 5042. Miscellaneous and technical corrections.

SUBCHAPTER D—PART B PREMIUM

Sec. 5051. Part B premium.

SUBCHAPTER E—OTHER PROVISIONS

Sec. 5061. Payments for clinical diagnostic laboratory tests.

Sec. 5062. Treatment of inpatients and provision of diagnostic and therapeutic

X-ray services by rural health clinics and Federally qualified

health centers.

Sec. 5063. Application of mammography certification requirements.

Sec. 5064. Extension of Alzheimer’s disease demonstration.

Sec. 5065. Oral cancer drugs.

Sec. 5066. Extension of municipal health service demonstration projects.

Sec. 5067. Treatment of certain Indian health programs and facilities as Federally-qualified health centers.

Sec. 5068. Interest payments.

Sec. 5069. Clarification of coverage of certified nurse-midwife services performed outside the maternity cycle.

Sec. 5069A. Increase in, and study of, annual cap on amount of medicare payment for outpatient physical therapy and occupational therapy

services.

Sec. 5070. Miscellaneous and technical corrections.

CHAPTER 2—PROVISIONS RELATING TO PARTS A AND B

Sec. 5071. Elimination of add-on for overhead of hospital-based home health

agencies.

Sec. 5072. Study and report on medicare GME payments.

Sec. 5073. Medicare as secondary payer.

Sec. 5074. Extension of self-referral ban to additional specified services.

Sec. 5075. Reduction in payment for erythropoietin.

Sec. 5076. Medicare hospital agreements with organ procurement organizations.

Sec. 5077. Extension of waiver for Watts Health Foundation.

Sec. 5078. Improved outreach for qualified medicare beneficiaries.

Sec. 5079. Social health maintenance organizations.

Sec. 5080. Peer review organizations.

Sec. 5081. Hospice information to home health beneficiaries.

Sec. 5082. Health maintenance organizations.

Sec. 5083. Miscellaneous and technical corrections.

CHAPTER 3—PROVISIONS RELATING TO MEDICARE SUPPLEMENTAL

INSURANCE POLICIES

Sec. 5091. Standards for medicare supplemental insurance policies.
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1 CHAPTER 1—PROVISIONS RELATING TO

2 PART B

3 Subchapter A—Physicians’ Services

4 SEC. 5001. REDUCTION IN DEFAULT UPDATE FOR CONVER5 SION FACTOR FOR 1994.

6 Section 1848(d)(3)(A) (42 U.S.C. 1395w–

7 4(d)(3)(A)) is amended—

8 (1) in clause (i), by striking ‘‘clause (iii)’’ and

9 inserting ‘‘clauses (iii) and (iv)’’, and

10 (2) by adding at the end the following new

11 clause:

12 ‘‘(iv) ADJUSTMENT IN PERCENTAGE

13 INCREASE FOR 1994.—In applying clause

14 (i) for services (other than primary care

15 services) furnished in 1994, the percentage

16 increase in the appropriate update index

17 shall be reduced by—

18 ‘‘(I) 3 percentage points for sur19 gical services (as defined for purposes

20 of subsection (j)(1)), and

21 ‘‘(II) 2 percentage points for

22 other services.’’.
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1 SEC. 5002. REDUCTION IN PERFORMANCE STANDARD RATE

2 OF INCREASE AND INCREASE IN MAXIMUM

3 REDUCTION PERMITTED IN DEFAULT UP4 DATE.

5 (a) REDUCTION IN PERFORMANCE STANDARD FAC6 TOR.—Section 1848(f)(2)(B) (42 U.S.C. 1395w–

7 4(f)(2)(B)) is amended—

8 (1) by striking ‘‘and’’ at the end of clause (ii),

9 and

10 (2) by striking clause (iii) and inserting the fol11 lowing:

12 ‘‘(iii) for 1993 is 2 percentage points,

‘‘(iv) for 1994 is 31 13 ⁄2 percentage

14 points, and

15 ‘‘(v) for each succeeding year is 4 per16 centage points.’’.

17 (b) INCREASE IN MAXIMUM REDUCTION PERMITTED

18 IN DEFAULT UPDATE.—Section 1848(d)(3)(B)(ii) (42

19 U.S.C. 1395w–4(d)(3)(B)(ii)) is amended—

20 (1) in subclause (II), by striking ‘‘or 1995’’,

21 and

22 (2) in subclause (III), by striking ‘‘3’’ and in23 serting ‘‘5’’.
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1 SEC. 5003. CLASSIFICATION OF PRIMARY CARE SERVICES

2 AS A SEPARATE CATEGORY OF SERVICES.

3 (a) IN GENERAL.—Section 1848(j)(1) (42 U.S.C.

4 1395w–4(j)(1)) is amended by inserting ‘‘, primary care

5 services (as defined in section 1842(i)(4)),’’ after ‘‘Sec6 retary)’’.

7 (b) EFFECTIVE DATE.—The amendment made by

8 subsection (a) shall apply—

9 (1) to volume performance standard rates of

10 increase established under section 1848(f) of the

11 Social Security Act for fiscal years beginning with

12 fiscal year 1994, and

13 (2) to updates in the conversion factors for phy14 sicians’ services established under section 1848(d) of

15 such Act for physicians’ services to be furnished in

16 calendar years beginning with 1996.

17 SEC. 5004. PHASED-IN REDUCTION IN PRACTICE EXPENSE

18 RELATIVE VALUE UNITS FOR CERTAIN SERV19 ICES.

20 (a) IN GENERAL.—Section 1848(c)(2) (42 U.S.C.

21 1395w–4(c)(2)) is amended by adding at the end the fol22 lowing new subparagraph:

23 ‘‘(E) REDUCTION IN PRACTICE EXPENSE

24 RELATIVE VALUE UNITS FOR CERTAIN SERV25 ICES.—
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1 ‘‘(i) IN GENERAL.—Subject to clause

2 (ii), the Secretary shall reduce the practice

3 expense relative value units applied to serv4 ices described in clause (iii) furnished in—

5 ‘‘(I) 1994, by 25 percent of the

6 number by which the number of prac7 tice expense relative value units (de8 termined for 1994 without regard to

9 this subparagraph) exceeds the num10 ber of work relative value units deter11 mined for 1994,

12 ‘‘(II) 1995, by an additional 25

13 percent of such excess, and

14 ‘‘(III) 1996 and subsequent

15 years, by an additional 25 percent of

16 such excess.

17 ‘‘(ii) FLOOR ON REDUCTIONS.—The

18 practice expense relative value units for a

19 physicians’ service shall not be reduced

20 under this subparagraph to a number less

21 than 110 percent of the number of work

22 relative value units.

23 ‘‘(iii) SERVICES COVERED.—For pur24 poses of clause (i), the services described in

25 this clause are physicians’ services that are
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1 not described in clause (iv) and for

2 which—

3 ‘‘(I) there are work relative value

4 units, and

5 ‘‘(II) the number of practice ex6 pense relative value units (determined

7 for 1994) exceeds 110 percent of the

8 number of work relative value units

9 (determined for such year).

10 ‘‘(iv) EXCLUDED SERVICES.—For

11 purposes of clause (iii), the services de12 scribed in this clause are—

13 ‘‘(I) anesthesia services,

14 ‘‘(II) radiology services, and

15 ‘‘(III) services which the Sec16 retary determines at least 75 percent

17 of which are provided under this title

18 in an office setting.’’.

19 (b) DEVELOPMENT OF RESOURCE-BASED METH20 ODOLOGY FOR PRACTICE EXPENSES.—

21 (1) The Secretary of Health and Human Serv22 ices shall develop a methodology for implementing in

23 1997 a resource-based system for determining prac24 tice expense relative value units for each physician’s

25 service.
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1 (2) The Secretary shall transmit a report by

2 June 30, 1996, on the methodology developed under

3 paragraph (1) to the Committees on Ways and

4 Means and Energy and Commerce of the House of

5 Representatives and the Committee on Finance of

6 the Senate. The report shall include a presentation

7 of data utilized in developing the methodology and

8 an explanation of the methodology.

9 SEC. 5005. LIMITATION ON PAYMENT FOR THE ANESTHESIA

10 CARE TEAM.

11 (a) LIMIT ON PAYMENT TO A PHYSICIAN FOR MEDI12 CAL DIRECTION.—

13 (1) IN GENERAL.—Section 1848(a) (42 U.S.C.

14 1395w–4(a)), as amended by section 5008(a)(1), is

15 amended by adding at the end the following new

16 paragraph:

17 ‘‘(4) SPECIAL RULE FOR MEDICAL DIREC18 TION.—

19 ‘‘(A) IN GENERAL.—With respect to physi20 cians’ services furnished on or after January 1,

21 1994, and consisting of medical direction of

22 two, three, or four concurrent anesthesia cases,

23 the fee schedule amount to be applied shall not

24 exceed one-half of the amount described in sub25 paragraph (B).
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1 ‘‘(B) AMOUNT.—The amount described in

2 this subparagraph, for a physician’s medical di3 rection of the performance of anesthesia serv4 ices, is the following percentage of the fee

5 schedule amount otherwise applicable under this

6 section if the anesthesia services were person7 ally performed by the physician alone:

8 ‘‘(i) For services furnished during

9 1994, 120 percent.

10 ‘‘(ii) For services furnished during

11 1995, 115 percent.

12 ‘‘(iii) For services furnished during

13 1996, 110 percent.

14 ‘‘(iv) For services furnished during

15 1997, 105 percent.

16 ‘‘(v) For services furnished after

17 1997, 100 percent.’’.

18 (2) ELIMINATION OF REDUCTION FOR MEDICAL

19 DIRECTION OF MULTIPLE NURSE ANESTHETISTS.—

20 Section 1842(b) (42 U.S.C. 1395u(b)) is amended

21 by striking paragraph (13).

22 (b) PAYMENT TO A CERTIFIED REGISTERED NURSE

23 ANESTHETIST FOR MEDICALLY DIRECTED SERVICES.—

24 Subparagraph (B) of section 1833(l)(4) (42 U.S.C.

25 1395l(l)(4)) is amended—
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1 (1) in clause (i), by inserting ‘‘and before Janu2 ary 1, 1994,’’ after ‘‘1991,’’;

3 (2) in clause (ii)—

4 (A) by adding ‘‘and’’ at the end of

5 subclause (II),

6 (B) by striking the comma at the end of

7 subclause (III) and inserting a period, and

8 (C) by striking subclauses (IV) through

9 (VII); and

10 (3) by adding at the end the following new

11 clause:

12 ‘‘(iii) In the case of services of a certified registered

13 nurse anesthetist who is medically directed by a physician

14 and that are furnished on or after January 1, 1994, the

15 fee schedule amount shall be one-half of the amount

16 described in section 1848(a)(4)(B) with respect to the

17 physician.’’.

18 SEC. 5006. BASING PAYMENTS FOR ANESTHESIA SERVICES

19 ON ACTUAL TIME.

20 (a) PHYSICIANS’ SERVICES.—Section 1848(b)(2)(B)

21 (42 U.S.C. 1395w–4(b)(2)(B)) is amended by adding at

22 the end the following: ‘‘For anesthesia services furnished

23 on or after January 1, 1994, the Secretary may not mod24 ify the methodology in effect as of January 1, 1993, for
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1 determining the amount of time that may be billed for

2 such services under this section.’’.

3 (b) SERVICES OF CERTIFIED REGISTERED NURSE

4 ANESTHETISTS.—Section 1833(l)(1)(B) (42 U.S.C.

5 1395l(l)(1)(B)) is amended by adding at the end the fol6 lowing: ‘‘For anesthesia services furnished on or after

7 January 1, 1994, the Secretary may not modify the meth8 odology in effect as of January 1, 1993, for determining

9 the amount of time that may be billed for such services

10 under this section.’’.

11 SEC. 5007. SEPARATE PAYMENT FOR INTERPRETATION OF

12 ELECTROCARDIOGRAMS.

13 (a) IN GENERAL.—Paragraph (3) of section 1848(b)

14 (42 U.S.C. 1395w–4(b)) is amended to read as follows:

15 ‘‘(3) TREATMENT OF INTERPRETATION OF

16 ELECTROCARDIOGRAMS.—The Secretary—

17 ‘‘(A) shall make separate payment under

18 this section for the interpretation of electro19 cardiograms performed or ordered to be per20 formed as part of or in conjunction with a visit

21 to or a consultation with a physician, and

22 ‘‘(B) shall adjust the relative values estab23 lished for visits and consultations under sub24 section (c) so as not to include relative value

25 units for interpretations of electrocardiograms
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1 in the relative value for visits and consulta2 tions.’’.

3 (b) ASSURING BUDGET NEUTRALITY.—Section

4 1848(c)(2) (42 U.S.C. 1395w–4(c)(2)), as amended by

5 section 5004(a); is amended by adding at the end the fol6 lowing new subparagraph:

7 ‘‘(F) BUDGET NEUTRALITY ADJUST8 MENTS.—The Secretary—

9 ‘‘(i) shall reduce the relative values

10 for all services (other than anesthesia serv11 ices) established under this paragraph

12 (and, in the case of anesthesia services, the

13 conversion factor established by the Sec14 retary for such services) by such percent15 age as the Secretary determines to be nec16 essary so that, beginning in 1996, the

17 amendment made by section 5007(a) of

18 the Omnibus Budget Reconciliation Act of

19 1993 would not result in expenditures

20 under this section that exceed the amount

21 of such expenditures that would have been

22 made if such amendment had not been

23 made, and

24 ‘‘(ii) shall reduce the amounts deter25 mined under subsection (a)(2)(B)(ii)(I) by
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1 such percentage as the Secretary deter2 mines to be required to assure that, taking

3 into account the reductions made under

4 clause (i), the amendment made by section

5 5007(a) of the Omnibus Budget Reconcili6 ation Act of 1993 would not result in ex7 penditures under this section in 1994 that

8 exceed the amount of such expenditures

9 that would have been made if such amend10 ment had not been made.’’.

11 (c) CONFORMING AMENDMENTS.—Section 1848 (42

12 U.S.C. 1395w–4) is amended—

13 (1) in subsection (a)(2)(B)(ii)(I), by inserting

14 ‘‘and as adjusted under subsection (c)(2)(F)(ii)’’

15 after ‘‘for 1994’’;

16 (2) in subsection (c)(2)(A)(i), by adding at the

17 end the following: ‘‘Such relative values are subject

18 to adjustment under subparagraph (F)(i).’’; and

19 (3) in subsection (i)(1)(B), by adding at the

20 end ‘‘including adjustments under subsection

21 (c)(2)(F),’’.

22 (d) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to services furnished on or after

24 January 1, 1994.
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1 SEC. 5008. PAYMENTS FOR NEW PHYSICIANS AND PRACTI2 TIONERS.

3 (a) EQUAL TREATMENT OF NEW PHYSICIANS AND

4 PRACTITIONERS.—(1) Section 1848(a) (42 U.S.C.

5 1395w–4(a)) is amended by striking paragraph (4).

6 (2) Section 1842(b)(4) (42 U.S.C. 1395u(b)(4)) is

7 amended by striking subparagraph (F).

8 (b) BUDGET NEUTRALITY ADJUSTMENT.—Notwith9 standing any other provision of law, the Secretary of

10 Health and Human Services shall reduce the following val11 ues and amounts for 1994 (to be applied for that year

12 and subsequent years) by such uniform percentage as the

13 Secretary determines to be required to assure that the

14 amendments made by subsection (a) will not result in ex15 penditures under part B of title XVIII of the Social Secu16 rity Act in 1994 that exceed the amount of such expendi17 tures that would have been made if such amendments had

18 not been made:

19 (1) The relative values established under section

20 1848(c) of such Act for services (other than anesthe21 sia services) and, in the case of anesthesia services,

22 the conversion factor established under section 1848

23 of such Act for such services.

24 (2) The amounts determined under section

25 1848(a)(2)(B)(ii)(I) of such Act.
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1 (3) The prevailing charges or fee schedule

2 amounts to be applied under such part for services

3 of a health care practitioner (as defined in section

4 1842(b)(4)(F)(ii)(I) of such Act, as in effect before

5 the date of the enactment of this Act).

6 (c) CONFORMING AMENDMENTS.—Section 1848 (42

7 U.S.C. 1395w–4), as amended by section 5007(c), is

8 amended—

9 (1) in subsection (a)(2)(B)(ii)(I), by inserting

10 ‘‘and section 5008(b) of the Omnibus Budget Rec11 onciliation Act of 1993’’ after ‘‘(c)(2)(F)(ii)’’;

12 (2) in subsection (c)(2)(A)(i), by inserting ‘‘and

13 section 5008(b) of the Omnibus Budget Reconcili14 ation Act of 1993’’ after ‘‘under subparagraph

15 (F)(i)’’; and

16 (3) in subsection (i)(1)(B), by inserting ‘‘and

17 section 5008(b) of the Omnibus Budget Reconcili18 ation Act of 1993’’ after ‘‘under subsection

19 (c)(2)(F)’’.

20 (d) EFFECTIVE DATE.—The amendments made by

21 subsection (a) shall apply to services furnished on or after

22 January 1, 1994.
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1 SEC. 5009. GEOGRAPHIC ADJUSTMENT FACTORS FOR MEDI2 CARE PHYSICIANS’ SERVICES.

3 (a) REQUIRING CONSULTATION WITH REPRESENTA4 TIVES OF PHYSICIANS IN REVIEWING GEOGRAPHIC AD5 JUSTMENT FACTORS.—Section 1848(e)(1)(C) (42 U.S.C.

6 1395w–4(e)(1)(C)) is amended by striking ‘‘shall review’’

7 and inserting ‘‘shall, in consultation with appropriate rep8 resentatives of physicians, review’’.

9 (b) USE OF MOST RECENT DATA IN GEOGRAPHIC

10 ADJUSTMENT.—Section 1848(e)(1) (42 U.S.C. 1395w–

11 4(e)(1)) is amended by adding at the end the following

12 new subparagraph:

13 ‘‘(D) USE OF RECENT DATA.—In estab14 lishing indices and index values under this

15 paragraph, the Secretary shall use the most re16 cent data available relating to practice ex17 penses, malpractice expenses, and physician

18 work effort in different fee schedule areas.’’.

19 (c) DEADLINE FOR INITIAL REVIEW AND REVI20 SION.—The Secretary of Health and Human Services

21 shall first review and revise geographic adjustment factors

22 under section 1848(e)(1)(C) of the Social Security Act by

23 not later than January 1, 1995.

24 (d) REPORT ON REVIEW PROCESS.—Not later than

25 1 year after the date of the enactment of this Act, the

26 Secretary of Health and Human Services shall study and
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1 report to the Committee on Finance of the Senate and

2 the Committee on Ways and Means and the Committee

3 on Energy and Commerce of the House of Representatives

4 on—

5 (1) the data necessary to review and revise the

6 indices established under section 1848(e)(1)(A) of

7 the Social Security Act, including—

8 (A) the shares allocated to physicians’

9 work effort, practice expenses (other than mal10 practice expenses), and malpractice expenses;

11 (B) the weights assigned to the input com12 ponents of such shares; and

13 (C) the index values assigned to such com14 ponents;

15 (2) any limitations on the availability of data

16 necessary to review and revise such indices at least

17 every three years;

18 (3) ways of addressing such limitations, with

19 particular attention to the development of alternative

20 data sources for input components for which current

21 index values are based on data collected less fre22 quently than every three years; and

23 (4) the costs of developing more accurate and

24 timely data.
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1 SEC. 5010. EXTRA-BILLING LIMITS.

2 (a) ENFORCEMENT AND UNIFORM APPLICATION.—

3 (1) ENFORCEMENT.—Paragraph (1) of section

4 1848(g) (42 U.S.C. 1395w–4(g)) is amended to read

5 as follows:

6 ‘‘(1) LIMITATION ON ACTUAL CHARGES.—

7 ‘‘(A) IN GENERAL.—In the case of a

8 nonparticipating physician or nonparticipating

9 supplier or other person (as defined in section

10 1842(i)(2)) who does not accept payment on an

11 assignment-related basis for a physician’s serv12 ice furnished with respect to an individual en13 rolled under this part, the following rules apply:

14 ‘‘(i) APPLICATION OF LIMITING

15 CHARGE.—No person may bill or collect an

16 actual charge for the service in excess of

17 the limiting charge described in paragraph

18 (2) for such service.

19 ‘‘(ii) NO LIABILITY FOR EXCESS

20 CHARGES.—No person is liable for pay21 ment of any amounts billed for the service

22 in excess of such limiting charge.

23 ‘‘(iii) CORRECTION OF EXCESS

24 CHARGES.—If such a physician, supplier,

25 or other person bills, but does not collect,

26 an actual charge for a service in violation
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1 of clause (i), the physician, supplier, or

2 other person shall reduce on a timely basis

3 the actual charge billed for the service to

4 an amount not to exceed the limiting

5 charge for the service.

6 ‘‘(iv) REFUND OF EXCESS COLLEC7 TIONS.—If such a physician, supplier, or

8 other person collects an actual charge for

9 a service in violation of clause (i), the phy10 sician, supplier, or other person shall pro11 vide on a timely basis a refund to the indi12 vidual charged in the amount by which the

13 amount collected exceeded the limiting

14 charge for the service. The amount of such

15 a refund shall be reduced to the extent the

16 individual has an outstanding balance owed

17 by the individual to the physician.

18 ‘‘(B) SANCTIONS.—If a physician, supplier,

19 or other person—

20 ‘‘(i) knowingly and willfully bills or

21 collects for services in violation of subpara22 graph (A)(i) on a repeated basis, or

23 ‘‘(ii) fails to comply with clause (iii)

24 or (iv) of subparagraph (A) on a timely

25 basis,
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1 the Secretary may apply sanctions against the

2 physician, supplier, or other person in accord3 ance with paragraph (2) of section 1842(j). In

4 applying this subparagraph, paragraph (4) of

5 such section applies in the same manner as

6 such paragraph applies to such section and any

7 reference in such section to a physician is

8 deemed also to include a reference to a supplier

9 or other person under this subparagraph.

10 ‘‘(C) TIMELY BASIS.—For purposes of this

11 paragraph, a correction of a bill for an excess

12 charge or refund of an amount with respect to

13 a violation of subparagraph (A)(i) in the case of

14 a service is considered to be provided ‘on a

15 timely basis’, if the reduction or refund is made

16 not later than 30 days after the date the physi17 cian, supplier, or other person is notified by the

18 carrier under this part of such violation and of

19 the requirements of subparagraph (A).’’.

20 (2) UNIFORM APPLICATION OF EXTRA-BILLING

21 LIMITS TO PHYSICIANS’ SERVICES.—

22 (A) IN GENERAL.—Section 1848(g)(2)(C)

23 (42 U.S.C. 1395w–4(g)(2)(C)) is amended by

24 inserting ‘‘or for nonparticipating suppliers or
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1 other persons’’ after ‘‘nonparticipating physi2 cians’’.

3 (B) CONFORMING DEFINITION.—Section

4 1842(i)(2) (42 U.S.C. 1395u(i)(2)) is

5 amended—

6 (i) by striking ‘‘, and the term’’ and

7 inserting ‘‘; the term’’, and

8 (ii) by inserting before the period at

9 the end the following: ‘‘; and the term

10 ‘nonparticipating supplier or other person’

11 means a supplier or other person (exclud12 ing a provider of services) that is not a

13 participating physician or supplier (as de14 fined in subsection (h)(1))’’.

15 (3) ADDITIONAL CONFORMING AMENDMENTS.—

16 Section 1848 (42 U.S.C. 1395w–4) is amended—

17 (A) in subsection (a)(3)—

18 (i) by inserting ‘‘AND SUPPLIERS’’

19 after ‘‘PHYSICIANS’’,

20 (ii) by inserting ‘‘or a

21 nonparticipating supplier or other person’’

22 after ‘‘nonparticipating physician’’, and

23 (iii) by adding at the end the follow24 ing: ‘‘In the case of physicians’ services

25 (including services which the Secretary ex-
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1 cludes pursuant to subsection (j)(3)) of a

2 nonparticipating physician, supplier, or

3 other person for which payment is made

4 under this part on a basis other than the

5 fee schedule amount, the payment shall be

6 based on 95 percent of the payment basis

7 for such services furnished by a participat8 ing physician, supplier, or other person.’’;

9 (B) in subsection (g)(1)(A), as amended by

10 subsection (a), in the matter before clause (i),

11 by inserting ‘‘(including services which the Sec12 retary excludes pursuant to subsection (j)(3))’’

13 after ‘‘a physician’s service’’;

14 (C) in subsection (g)(2)(D), by inserting

15 ‘‘(or, if payment under this part is made on a

16 basis other than the fee schedule under this sec17 tion, 95 percent of the other payment basis)’’

18 after ‘‘subsection (a)’’;

19 (D) in subsection (g)(3)(B)—

20 (i) by inserting after the first sentence

21 the following: ‘‘No person is liable for pay22 ment of any amounts billed for such a

23 service in violation of the previous sen24 tence.’’, and
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1 (ii) in the last sentence, by striking

2 ‘‘previous sentence’’ and inserting ‘‘first

3 sentence’’;

4 (E) in subsection (h)—

5 (i) by inserting ‘‘or nonparticipating

6 supplier or other person furnishing physi7 cians’ services (as defined in section

8 1848(j)(3))’’ after ‘‘physician’’ the first

9 place it appears,

10 (ii) by inserting ‘‘, supplier, or other

11 person’’ after ‘‘physician’’ the second place

12 it appears, and

13 (iii) by inserting ‘‘, suppliers, and

14 other persons’’ after ‘‘physicians’’ the sec15 ond place it appears; and

16 (F) in subsection (j)(3), by inserting ‘‘, ex17 cept for purposes of subsections (a)(3), (g), and

18 (h)’’ after ‘‘tests and’’.

19 (b) CLARIFICATION OF MANDATORY ASSIGNMENT

20 RULES FOR CERTAIN PRACTITIONERS.—

21 (1) IN GENERAL.—Section 1842(b) (42 U.S.C.

22 1395u(b)), as amended by section 5014(e), is

23 amended by adding at the end the following new

24 paragraph:
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1 ‘‘(18)(A) Payment for any service furnished by a

2 practitioner described in subparagraph (C) and for which

3 payment may be made under this part on a reasonable

4 charge or fee schedule basis may only be made under this

5 part on an assignment-related basis.

6 ‘‘(B) A practitioner described in subparagraph (C) or

7 other person may not bill (or collect any amount from)

8 the individual or another person for any service described

9 in subparagraph (A), except for deductible and coinsur10 ance amounts applicable under this part. No person is lia11 ble for payment of any amounts billed for such a service

12 in violation of the previous sentence. If a practitioner or

13 other person knowingly and willfully bills (or collects an

14 amount) for such a service in violation of such sentence,

15 the Secretary may apply sanctions against the practitioner

16 or other person in the same manner as the Secretary may

17 apply sanctions against a physician in accordance with

18 section 1842(j)(2) in the same manner as such section ap19 plies with respect to a physician. Paragraph (4) of section

20 1842(j) shall apply in this subparagraph in the same man21 ner as such paragraph applies to such section.

22 ‘‘(C) A practitioner described in this subparagraph

23 is any of the following:
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1 ‘‘(i) A physician assistant, nurse practitioner, or

2 clinical nurse specialist (as defined in section

3 1861(aa)(5)).

4 ‘‘(ii) A certified registered nurse anesthetist (as

5 defined in section 1861(bb)(2)).

6 ‘‘(iii) A certified nurse-midwife (as defined in

7 section 1861(gg)(2)).

8 ‘‘(iv) A clinical social worker (as defined in sec9 tion 1861(hh)(1)).

10 ‘‘(v) A clinical psychologist (as defined by the

11 Secretary for purposes of section 1861(ii)).

12 ‘‘(D) For purposes of this paragraph, a service fur13 nished by a practitioner described in subparagraph (C) in14 cludes any services and supplies furnished as incident to

15 the service as would otherwise be covered under this part

16 if furnished by a physician or as incident to a physician’s

17 service.’’.

18 (2) CONFORMING AMENDMENTS.—

19 (A) Section 1833 (42 U.S.C. 1395l) is

20 amended—

21 (i) in subsection (l)(5), by striking

22 subparagraph (B) and redesignating sub23 paragraph (C) as subparagraph (B);

24 (ii) by striking subsection (p); and
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1 (iii) in subsection (r), by striking

2 paragraph (3) and redesignating para3 graph (4) as paragraph (3).

4 (B) Section 1842(b)(12) (42 U.S.C.

5 1395u(b)(12)) is amended by striking subpara6 graph (C).

7 (c) INFORMATION ON EXTRA-BILLING LIMITS.—

8 (1) PART OF EXPLANATION OF MEDICARE BEN9 EFITS.—Section 1842(h)(7) (42 U.S.C.

10 1395u(h)(7)) is amended—

11 (A) by striking ‘‘and’’ at the end of sub12 paragraph (B),

13 (B) in subparagraph (C), by striking ‘‘shall

14 include’’,

15 (C) in subparagraph (C), by striking the

16 period at the end and inserting ‘‘, and’’, and

17 (D) by adding at the end the following new

18 subparagraph:

19 ‘‘(D) in the case of services for which the billed

20 amount exceeds the limiting charge imposed under

21 section 1848(g), information regarding such applica22 ble limiting charge (including information concern23 ing the right to a refund under section

24 1848(g)(1)(A)(iv)).’’.
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1 (2) DETERMINATIONS BY CARRIERS.—Subpara2 graph (G) of section 1842(b)(3) (42 U.S.C.

3 1395u(b)(3)) is amended to read as follows:

4 ‘‘(G) will, for a service that is furnished with

5 respect to an individual enrolled under this part,

6 that is not paid on an assignment-related basis, and

7 that is subject to a limiting charge under section

8 1848(g)—

9 ‘‘(i) determine, prior to making payment,

10 whether the amount billed for such service ex11 ceeds the limiting charge applicable under sec12 tion 1848(g)(2);

13 ‘‘(ii) notify the physician, supplier, or other

14 person periodically (but not less often than once

15 every 30 days) of determinations that amounts

16 billed exceeded such applicable limiting charges;

17 and

18 ‘‘(iii) provide for prompt response to in19 quiries of physicians, suppliers, and other per20 sons concerning the accuracy of such limiting

21 charges for their services;’’.

22 (d) REPORT ON CHARGES IN EXCESS OF LIMITING

23 CHARGE.—Section 1848(g)(6)(B) (42 U.S.C. 1395w–

24 4(g)(6)(B)) is amended by inserting ‘‘the extent to which

25 actual charges exceed limiting charges, the number and
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1 types of services involved, and the average amount of ex2 cess charges and’’ after ‘‘report to the Congress’’.

3 (e) MISCELLANEOUS AND TECHNICAL AMEND4 MENTS.—Section 1833 (42 U.S.C. 1395l) is amended—

5 (1) in subsection (a)(1), as amended by section

6 5070(e)(2)—

7 (A) by striking ‘‘and’’ before ‘‘(O)’’, and

8 (B) by inserting before the semicolon at

9 the end the following: ‘‘, and (P) with respect

10 to services described in clauses (i), (ii) and (iv)

11 of section 1861(s)(2)(K), the amounts paid are

12 subject to the provisions of section

13 1842(b)(12)’’; and

14 (2) in subsection (h)(5)(D)—

15 (A) by striking ‘‘paragraphs (2) and (3)’’

16 and by inserting ‘‘paragraph (2)’’, and

17 (B) by adding at the end the following:

18 ‘‘Paragraph (4) of such section shall apply in

19 this subparagraph in the same manner as such

20 paragraph applies to such section.’’.

21 (f) EFFECTIVE DATES.—

22 (1) ENFORCEMENT AND UNIFORM APPLICA23 TION; MISCELLANEOUS AND TECHNICAL AMEND24 MENTS.—The amendments made by subsections (a)

25 and (e) shall apply to services furnished on or after
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1 the date of the enactment of this Act; except that

2 the amendments made by subsection (a) shall not

3 apply to services of a nonparticipating supplier or

4 other person furnished before January 1, 1994.

5 (2) PRACTITIONERS.—The amendments made

6 by subsection (b) shall apply to services furnished on

7 or after January 1, 1994.

8 (3) EOMBS.—The amendments made by sub9 section (c)(1) shall apply to explanations of benefits

10 provided on or after January 1, 1994.

11 (4) CARRIER DETERMINATIONS.—The amend12 ments made by subsection (c)(2) shall apply to con13 tracts as of January 1, 1994.

14 (5) REPORT.—The amendment made by sub15 section (d) shall apply to reports for years beginning

16 with 1994.

17 SEC. 5011. RELATIVE VALUES FOR PEDIATRIC SERVICES.

18 (a) IN GENERAL.—The Secretary of Health and

19 Human Services shall fully develop, by not later than July

20 1, 1994, relative values for the full range of pediatric phy21 sicians’ services which are consistent with the relative val22 ues developed for other physicians’ services under section

23 1848(c) of the Social Security Act. In developing such val24 ues, the Secretary shall conduct such refinements as may
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1 be necessary to produce appropriate estimates for such rel2 ative values.

3 (b) STUDY.—

4 (1) IN GENERAL.—The Secretary shall conduct

5 a study of the relative values for pediatric and other

6 services to determine whether there are significant

7 variations in the resources used in providing similar

8 services to different populations. In conducting such

9 study, the Secretary shall consult with appropriate

10 organizations representing pediatricians and other

11 physicians and physical and occupational therapists.

12 (2) REPORT.—Not later than July 1, 1994, the

13 Secretary shall submit to Congress a report on the

14 study conducted under paragraph (1). Such report

15 shall include any appropriate recommendations re16 garding needed changes in coding or other payment

17 policies to ensure that payments for pediatric serv18 ices appropriately reflect the resources required to

19 provide these services.

20 SEC. 5012. ANTIGENS UNDER PHYSICIAN FEE SCHEDULE.

21 (a) IN GENERAL.—Section 1848(j)(3) (42 U.S.C.

22 1395w–4(j)(3)) is amended by inserting ‘‘(2)(G),’’ after

23 ‘‘(2)(D),’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to services furnished on or after

3 January 1, 1994.

4 SEC. 5013. ADMINISTRATION OF CLAIMS RELATING TO PHY5 SICIANS’ SERVICES.

6 (a) LIMITATION ON CARRIER USER FEES.—Section

7 1842(c) (42 U.S.C. 1395u(c)) is amended by adding at

8 the end the following new paragraph:

9 ‘‘(4) Neither a carrier nor the Secretary may impose

10 a fee under this title—

11 ‘‘(A) for the filing of claims related to physi12 cians’ services,

13 ‘‘(B) for an error in filing a claim relating to

14 physicians’ services or for such a claim which is de15 nied,

16 ‘‘(C) for any appeal under this title with respect

17 to physicians’ services,

18 ‘‘(D) for applying for (or obtaining) a unique

19 identifier under subsection (r), or

20 ‘‘(E) for responding to inquiries respecting phy21 sicians’ services or for providing information with re22 spect to medical review of such services.’’.

23 (b) CLARIFICATION OF PERMISSIBLE SUBSTITUTE

24 BILLING ARRANGEMENTS.—
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1 (1) IN GENERAL.—Clause (D) of section

2 1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended to

3 read as follows: ‘‘(D) payment may be made to a

4 physician for physicians’ services (and services fur5 nished incident to such services) furnished by a sec6 ond physician to patients of the first physician if (i)

7 the first physician is unavailable to provide the serv8 ices; (ii) the services are furnished pursuant to an

9 arrangement between the two physicians that (I) is

10 informal and reciprocal, or (II) involves per diem or

11 other fee-for-time compensation for such services;

12 (iii) the services are not provided by the second phy13 sician over a continuous period of more than 60

14 days; and (iv) the claim form submitted to the car15 rier for such services includes the second physician’s

16 unique identifier (provided under the system estab17 lished under subsection (r)) and indicates that the

18 claim meets the requirements of this clause for pay19 ment to the first physician’’.

20 (2) EFFECTIVE DATE.—The amendment made

21 by paragraph (1) shall apply to services furnished on

22 or after the first day of the first month beginning

23 more than 60 days after the date of the enactment

24 of this Act.
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1 SEC. 5014. MISCELLANEOUS AND TECHNICAL CORREC2 TIONS.

3 (a) OVERVALUED PROCEDURES (SECTION 4101 OF

4 OBRA–1990).—(1) Section 1842(b)(16)(B)(iii) (42

5 U.S.C. 1395u(b)(16)(B)(iii)) is amended—

6 (A) by striking ‘‘, simple and subcutaneous’’,

7 (B) by striking ‘‘; small’’ and inserting ‘‘and

8 small’’,

9 (C) by striking ‘‘treatments;’’ the first place it

10 appears and inserting ‘‘and’’,

11 (D) by striking ‘‘lobectomy;’’,

12 (E) by striking ‘‘enterectomy; colectomy; chole13 cystectomy;’’,

14 (F) by striking ‘‘; transurerethral resection’’

15 and inserting ‘‘and resection’’, and

16 (G) by striking ‘‘sacral laminectomy;’’.

17 (2) Section 4101(b)(2) of OBRA–1990 is amended—

18 (A) in the matter before subparagraph (A), by

19 striking ‘‘1842(b)(16)’’ and inserting

20 ‘‘1842(b)(16)(B)’’, and

21 (B) in subparagraph (B)—

22 (i) by striking ‘‘, simple and subcutane23 ous’’,

24 (ii) by striking ‘‘(HCPCS codes 19160 and

25 19162)’’ and inserting ‘‘(HCPCS code 19160)’’,

26 and
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1 (iii) by striking all that follows ‘‘(HCPCS

2 codes 92250’’ and inserting ‘‘and 92260).’’.

3 (b) RADIOLOGY SERVICES (SECTION 4102 OF

4 OBRA–1990).—(1) Section 1834(b)(4) (42 U.S.C.

5 1395m(b)(4)) is amended by redesignating subparagraphs

6 (E) and (F) as subparagraphs (F) and (G), respectively.

7 (2) Section 1834(b)(4)(D) (42 U.S.C.

8 1395m(b)(4)(D)) is amended—

9 (A) in the matter before clause (i), by striking

10 ‘‘shall be determined as follows:’’ and inserting

11 ‘‘shall, subject to clause (vii), be reduced to the ad12 justed conversion factor for the locality determined

13 as follows:’’,

14 (B) in clause (iv), by striking ‘‘LOCAL ADJUST15 MENT.—Subject to clause (vii), the conversion factor

16 to be applied to’’ and inserting ‘‘ADJUSTED CONVER17 SION FACTOR.—The adjusted conversion factor for’’,

18 (C) in clause (vii), by striking ‘‘under this sub19 paragraph’’, and

20 (D) in clause (vii), by inserting ‘‘reduced under

21 this subparagraph by’’ after ‘‘shall not be’’.

22 (3) Section 4102(c)(2) of OBRA–1990 is amended

23 by striking ‘‘radiology services’’ and all that follows and

24 inserting ‘‘nuclear medicine services.’’.
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1 (4) Section 4102(d) of OBRA–1990 is amended by

2 striking ‘‘new paragraph’’ and inserting ‘‘new subpara3 graph’’.

4 (5) Section 1834(b)(4)(E) (42 U.S.C.

5 1395m(b)(4)(E)) is amended by inserting ‘‘RULE FOR

6 CERTAIN SCANNING SERVICES.—’’ after ‘‘(E)’’.

7 (6) Section 1848(a)(2)(D)(iii) (42 U.S.C. 1395w–

8 4(a)(2)(D)(iii)) is amended by striking ‘‘that are subject

9 to section 6105(b) of the Omnibus Budget Reconciliation

10 Act of 1989’’ and by striking ‘‘provided under such sec11 tion’’ and inserting ‘‘provided under section 6105(b) of the

12 Omnibus Budget Reconciliation Act of 1989’’.

13 (c) ANESTHESIA SERVICES (SECTION 4103 OF

14 OBRA–1990).—(1) Section 4103(a) of OBRA–1990 is

15 amended by striking ‘‘REDUCTION IN FEE SCHEDULE’’

16 and inserting ‘‘REDUCTION IN PREVAILING CHARGES’’.

17 (2) Section 1842(q)(1)(B) (42 U.S.C.

18 1395u(q)(1)(B)) is amended—

19 (A) in the matter before clause (i), by striking

20 ‘‘shall be determined as follows:’’ and inserting

21 ‘‘shall, subject to clause (iv), be reduced to the ad22 justed prevailing charge conversion factor for the lo23 cality determined as follows:’’, and

24 (B) in clause (iii), by striking ‘‘Subject to

25 clause (iv), the prevailing charge conversion factor to
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1 be applied in’’ and inserting ‘‘The adjusted prevail2 ing charge conversion factor for’’.

3 (d) ASSISTANTS AT SURGERY (SECTION 4107 OF

4 OBRA–1990).—(1) Section 4107(c) of OBRA–1990 is

5 amended by inserting ‘‘(a)(1)’’ after ‘‘subsection’’.

6 (2) Section 4107(a)(2) of OBRA–1990 is amended

7 by adding at the end the following: ‘‘In applying section

8 1848(g)(2)(D) of the Social Security Act for services of

9 an assistant-at-surgery furnished during 1991, the recog10 nized payment amount shall not exceed the maximum

11 amount specified under section 1848(i)(2)(A) of such Act

12 (as applied under this paragraph in such year).’’.

13 (e) TECHNICAL COMPONENTS OF DIAGNOSTIC SERV14 ICES (SECTION 4108 OF OBRA–1990).—Section 1842(b)

15 (42 U.S.C. 1395u(b)) is amended by redesignating para16 graph (18), as added by section 4108(a) of OBRA–1990,

17 as paragraph (17) and, in such paragraph, by inserting

18 ‘‘, tests specified in paragraph (14)(C)(i),’’ after ‘‘diag19 nostic laboratory tests’’.

20 (f) STATEWIDE FEE SCHEDULES (SECTION 4117 OF

21 OBRA–1990).—Section 4117 of OBRA–1990 is

22 amended—

23 (1) in subsection (a)—

24 (A) by striking ‘‘(a) IN GENERAL.—’’, and
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1 (B) by striking ‘‘, if the’’ and all that fol2 lows through ‘‘1991, ’’; and

3 (2) by striking subsections (b), (c), and (d).

4 (g) STUDY OF AGGREGATION RULE FOR CLAIMS OF

5 SIMILAR PHYSICIAN SERVICES (SECTION 4113 OF

6 OBRA–1990).—Section 4113 of OBRA–1990 is

7 amended—

8 (1) by inserting ‘‘of the Social Security Act’’

9 after ‘‘1869(b)(2)’’; and

10 (2) by striking ‘‘December 31, 1992’’ and in11 serting ‘‘December 31, 1993’’.

12 (h) OTHER MISCELLANEOUS AND TECHNICAL

13 AMENDMENTS.—(1) The heading of section 1834(f) (42

14 U.S.C. 1395m(f)) is amended by striking ‘‘FISCAL YEAR’’.

15 (2)(A) Section 4105(b) of OBRA–1990 is amended—

16 (i) in paragraph (2), by striking ‘‘amendments’’

17 and inserting ‘‘amendment’’, and

18 (ii) in paragraph (3), by striking ‘‘amendments

19 made by paragraphs (1) and (2)’’ and inserting

20 ‘‘amendment made by paragraph (1)’’.

21 (B) Section 1848(f)(2)(C) (42 U.S.C. 1395w–

22 4(f)(2)(C)) is amended by inserting ‘‘PERFORMANCE

23 STANDARD RATES OF INCREASE FOR FISCAL YEAR

24 1991.—’’ after ‘‘(C)’’.
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1 (C) Section 4105(d) of OBRA–1990 is amended by

2 inserting ‘‘PUBLICATION OF PERFORMANCE STANDARD

3 RATES.—’’ after ‘‘(d)’’.

4 (3) Section 1842(b)(4)(F) (42 U.S.C.

5 1395u(b)(4)(F)) is amended—

6 (A) in clause (i), by striking ‘‘prevailing

7 charge’’ the first place it appears and inserting

8 ‘‘customary charge’’; and

9 (B) in clause (ii)(III), by striking ‘‘second,

10 third, and fourth’’ and inserting ‘‘first, second, and

11 third’’.

12 (4) Section 1842(b)(4)(F)(ii)(I) (42 U.S.C.

13 1395u(b)(4)(F)(ii)(I)) is amended by striking ‘‘respiratory

14 therapist,’’.

15 (5) Section 4106(c) of OBRA–1990 is amended by

16 inserting ‘‘of the Social Security Act’’ after

17 ‘‘1848(d)(1)(B)’’.

18 (6) Section 4114 of OBRA–1990 is amended by

19 striking ‘‘patients’’ the second place it appears.

20 (7) Section 1848(e)(1)(C) (42 U.S.C. 1395w–

21 4(e)(1)(C)) is amended by inserting ‘‘date of the’’ after

22 ‘‘since the’’.

23 (8) Section 4118(f)(1)(D) of OBRA–1990 is amend24 ed by striking ‘‘is amended’’.
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1 (9) Section 4118(f)(1)(N)(ii) of OBRA–1990 is

2 amended by striking ‘‘subsection (f)(5)(A)’’ and inserting

3 ‘‘subsection (f)(5)(A))’’.

4 (10) Section 1845(e) (42 U.S.C. 1395w–1(e)) is

5 amended—

6 (A) by striking paragraph (2); and

7 (B) by redesignating paragraphs (3), (4), and

8 (5) as paragraphs (2), (3), and (4).

9 (11) Section 4118(j)(2) of OBRA–1990 is amended

10 by striking ‘‘In section’’ and inserting ‘‘Section’’.

11 (12)(A) Section 1848(i)(3) (42 U.S.C. 1395w–

12 4(i)(3)) is amended by striking the space before the period

13 at the end.

14 (B) Section 1834(a)(10)(B) (42 U.S.C.

15 1395m(a)(10)(B)) is amended by striking ‘‘as such provi16 sions apply to physicians’ services and physicians and a

17 reasonable charge under section 1842(b)’’.

18 (i) OTHER CORRECTIONS.—(1) Effective on the date

19 of the enactment of this Act, section 6102(d)(4) of

20 OBRA–1989 is amended by striking all that follows the

21 first sentence.

22 (2) Effective for payments for fiscal years beginning

23 with fiscal year 1994, section 1842(c)(1) (42 U.S.C.

24 1395u(c)(1)) is amended—
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1 (A) in subparagraph (A), by striking ‘‘(A) Any

2 contract’’ and inserting ‘‘Any contract’’; and

3 (B) by striking subparagraph (B).

4 (j) EFFECTIVE DATE.—Except as provided in sub5 section (i), the amendments made by this section and the

6 provisions of this section shall take effect as if included

7 in the enactment of OBRA–1990.

8 Subchapter B—Outpatient Hospital Services

9 and Ambulatory Surgical Services

10 SEC. 5021. EXTENSION OF 10 PERCENT REDUCTION IN PAY11 MENTS FOR CAPITAL-RELATED COSTS OF

12 OUTPATIENT HOSPITAL SERVICES.

13 Section 1861(v)(1)(S)(ii)(I) (42 U.S.C.

14 1395x(v)(1)(S)(ii)(I)) is amended by striking ‘‘fiscal year

15 1992, 1993, 1994, or 1995’’ and inserting ‘‘fiscal years

16 1992 through 1998’’.

17 SEC. 5022. EXTENSION OF CURRENT REDUCTION IN PAY18 MENTS FOR OTHER COSTS OF OUTPATIENT

19 HOSPITAL SERVICES.

20 Section 1861(v)(1)(S)(ii)(II) (42 U.S.C.

21 1395x(v)(1)(S)(ii)(II)) is amended by striking ‘‘1991’’ and

22 all that follows and inserting ‘‘1991 through 1998.’’.
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1 SEC. 5023. 1-YEAR FREEZE IN AMBULATORY SURGERY

2 RATES.

3 The Secretary of Health and Human Services shall

4 not provide for any update in the amounts of payment

5 described in paragraphs (2)(A) and (2)(B) of section

6 1833(i)(2) of the Social Security Act that otherwise would

7 occur in fiscal year 1994.

8 SEC. 5024. EYE OR EYE AND EAR HOSPITALS.

9 (a) IN GENERAL.—Section 1833(i) (42 U.S.C.

10 1395l(i)) is amended—

11 (1) in paragraph (3)(B)(ii)—

12 (A) by striking ‘‘the last sentence of this

13 clause’’ and inserting ‘‘paragraph (4)’’, and

14 (B) by striking the last sentence; and

15 (2) by inserting after paragraph (3) the follow16 ing new paragraph:

17 ‘‘(4)(A) In the case of a hospital that—

18 ‘‘(i) makes application to the Secretary and

19 demonstrates that it specializes in eye services or eye

20 and ear services (as determined by the Secretary),

21 ‘‘(ii) receives more than 30 percent of its total

22 revenues from outpatient services, and

23 ‘‘(iii) on October 1, 1987—

24 ‘‘(I) was an eye specialty hospital or an eye

25 and ear specialty hospital, or
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1 ‘‘(II) was operated as an eye or eye and

2 ear unit (as defined in subparagraph (B)) of a

3 general acute care hospital which, on the date

4 of the application described in clause (i), oper5 ates less than 20 percent of the beds that the

6 hospital operated on October 1, 1987, and has

7 sold or otherwise disposed of a substantial por8 tion of the hospital’s other acute care oper9 ations,

10 the cost proportion and ASC proportion in effect under

11 subclauses (I) and (II) of paragraph (3)(B)(ii) for cost

12 reporting periods beginning in fiscal year 1988 shall re13 main in effect for cost reporting periods beginning on or

14 after October 1, 1988, and before January 1, 1995.

15 ‘‘(B) For purposes of this subparagraph (A)(iii)(II),

16 the term ‘eye or eye and ear unit’ means a physically sepa17 rate or distinct unit containing separate surgical suites de18 voted solely to eye or eye and ear services.’’.

19 (b) EFFECTIVE DATE.—The amendments made by

20 subsection (a) shall apply to portions of cost reporting pe21 riods beginning on or after January 1, 1994.
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1 SEC. 5025. EXTENSION OF CAP ON PAYMENTS FOR INTRA2 OCULAR LENSES.

3 (a) IN GENERAL.—Section 4151(c)(3) of OBRA–

4 1990 is amended by striking ‘‘December 31, 1992’’ and

5 inserting ‘‘December 31, 1994’’.

6 (b) EFFECTIVE DATE.—The amendment made by

7 subsection (a) shall be effective as if included in the enact8 ment of OBRA–1990.

9 SEC. 5026. MISCELLANEOUS AND TECHNICAL CORREC10 TIONS.

11 (a) PAYMENT AMOUNTS FOR SERVICES FURNISHED

12 IN AMBULATORY SURGICAL CENTERS.—(1)(A) Section

13 1833(i)(2)(A)(i) (42 U.S.C. 1395l(i)(2)(A)(i)) is amended

14 by striking the comma at the end and inserting the follow15 ing: ‘‘, as determined in accordance with a survey (based

16 upon a representative sample of procedures and facilities)

17 taken not later than January 1, 1995, and every 5 years

18 thereafter, of the actual audited costs incurred by such

19 centers in providing such services,’’.

20 (B) Section 1833(i)(2) (42 U.S.C. 1395l(i)(2)) is

21 amended—

22 (i) in the second sentence of subparagraph (A)

23 and the second sentence of subparagraph (B), by

24 striking ‘‘and may be adjusted by the Secretary,

25 when appropriate,’’; and
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1 (ii) by adding at the end the following new sub2 paragraph:

3 ‘‘(C) Notwithstanding the second sentence of sub4 paragraph (A) or the second sentence of subparagraph

5 (B), if the Secretary has not updated amounts established

6 under such subparagraphs with respect to facility services

7 furnished during a fiscal year (beginning with fiscal year

8 1996), such amounts shall be increased by the percentage

9 increase in the consumer price index for all urban consum10 ers (U.S. city average) as estimated by the Secretary for

11 the 12-month period ending with the midpoint of the fiscal

12 year involved.’’.

13 (C) The second sentence of section 1833(i)(1) (42

14 U.S.C. 1395l(i)(1)) is amended by striking the period and

15 inserting the following: ‘‘, in consultation with appropriate

16 trade and professional organizations.’’.

17 (2) Section 4151(c)(3) of OBRA–1990 is amended

18 by striking ‘‘for the insertion of an intraocular lens’’ and

19 inserting ‘‘for an intraocular lens inserted’’.

20 (b) ADJUSTMENTS TO PAYMENT AMOUNTS FOR NEW

21 TECHNOLOGY INTRAOCULAR LENSES.—(1) Not later

22 than 1 year after the date of the enactment of this Act,

23 the Secretary of Health and Human Services (in this sub24 section referred to as the ‘‘Secretary’’) shall develop and

25 implement a process under which interested parties may
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1 request review by the Secretary of the appropriateness of

2 the reimbursement amount provided under section

3 1833(i)(2)(A)(iii) of the Social Security Act with respect

4 to a class of new technology intraocular lenses. For pur5 poses of the preceding sentence, an intraocular lens may

6 not be treated as a new technology lens unless it has been

7 approved by the Food and Drug Administration.

8 (2) In determining whether to provide an adjustment

9 of payment with respect to a particular lens under para10 graph (1), the Secretary shall take into account whether

11 use of the lens is likely to result in reduced risk of

12 intraoperative or postoperative complication or trauma,

13 accelerated postoperative recovery, reduced induced astig14 matism, improved postoperative visual acuity, more stable

15 postoperative vision, or other comparable clinical advan16 tages.

17 (3) The Secretary shall publish notice in the Federal

18 Register from time to time (but no less often than once

19 each year) of a list of the requests that the Secretary has

20 received for review under this subsection, and shall provide

21 for a 30-day comment period on the lenses that are the

22 subjects of the requests contained in such notice. The Sec23 retary shall publish a notice of his determinations with

24 respect to intraocular lenses listed in the notice within 90

25 days after the close of the comment period.
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1 (4) Any adjustment of a payment amount (or pay2 ment limit) made under this subsection shall become effec3 tive not later than 30 days after the date on which the

4 notice with respect to the adjustment is published under

5 paragraph (3).

6 Subchapter C—Durable Medical Equipment

7 SEC. 5031. REVISIONS TO PAYMENT RULES FOR DURABLE

8 MEDICAL EQUIPMENT.

9 (a) BASING NATIONAL PAYMENT LIMITS ON MEDIAN

10 OF LOCAL PAYMENT AMOUNTS.—

11 (1) INEXPENSIVE AND ROUTINELY PURCHASED

12 ITEMS; ITEMS REQUIRING FREQUENT AND SUBSTAN13 TIAL SERVICING.—(A) Paragraphs (2)(C)(i)(II) and

14 (3)(C)(i)(II) of section 1834(a) (42 U.S.C.

15 1395m(a)) are each amended—

16 (i) by striking ‘‘1992’’ the first place it ap17 pears and inserting ‘‘1992, 1993, and 1994’’;

18 and

19 (ii) by striking ‘‘1992’’ the second place it

20 appears and inserting ‘‘the year’’.

21 (B) Paragraphs (2)(C)(ii) and (3)(C)(ii) of sec22 tion 1834(a) (42 U.S.C. 1395m(a)) are each

23 amended—

24 (i) by striking ‘‘and’’ at the end of

25 subclause (I);
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1 (ii) by redesignating subclause (II) as (IV);

2 and

3 (iii) by inserting after subclause (I) the fol4 lowing new subclauses:

5 ‘‘(II) for 1992 and 1993, the

6 amount determined under this clause

7 for the preceding year increased by

8 the covered item update for such sub9 sequent year,

10 ‘‘(III) for 1994, the local pay11 ment amount determined under clause

12 (i) for such item or device for that

13 year, except that the national limited

14 payment amount may not exceed 100

15 percent of the median of all local pay16 ment amounts determined under such

17 clause for such item for that year and

18 may not be less than 85 percent of

19 the median of all local payment

20 amounts determined under such

21 clause for such item or device for that

22 year, and’’.

23 (2) MISCELLANEOUS DEVICES AND ITEMS.—

24 Section 1834(a)(8) (42 U.S.C. 1395m(a)(8)) is

25 amended—
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1 (A) in subparagraph (A)(ii)(III), by strik2 ing ‘‘1992’’ and inserting ‘‘1992, 1993, and

3 1994’’; and

4 (B) in subparagraph (B)—

5 (i) by striking ‘‘and’’ at the end of

6 clause (i),

7 (ii) by redesignating clause (ii) as (iv),

8 and

9 (iii) by inserting after clause (i) the

10 following new clauses:

11 ‘‘(ii) for 1992 and 1993, the amount

12 determined under this subparagraph for

13 the preceding year increased by the cov14 ered item update for such subsequent year;

15 ‘‘(iii) for 1994, the local purchase

16 price computed under subparagraph (A)(ii)

17 for the item for the year, except that such

18 national limited purchase price may not ex19 ceed 100 percent of the median of all local

20 purchase prices computed for the item

21 under such subparagraph for the year and

22 may not be less than 85 percent of the me23 dian of all local purchase prices computed

24 under such subparagraph for the item for

25 the year; and’’.
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1 (3) OXYGEN AND OXYGEN EQUIPMENT.—Sec2 tion 1834(a)(9) (42 U.S.C. 1395m(a)(9)) is

3 amended—

4 (A) in subparagraph (A)(ii)(II), by striking

5 ‘‘1991 and 1992’’ and inserting ‘‘1991, 1992,

6 1993, and 1994’’; and

7 (B) in subparagraph (B)—

8 (i) by striking ‘‘and’’ at the end of

9 clause (i),

10 (ii) by redesignating clause (ii) as (iv),

11 and

12 (iii) by inserting after clause (i) the

13 following new clauses:

14 ‘‘(ii) for 1992 and 1993, the amount

15 determined under this subparagraph for

16 the preceding year increased by the cov17 ered item update for such subsequent year;

18 ‘‘(iii) for 1994, the local monthly pay19 ment rate computed under subparagraph

20 (A)(ii) for the item for the year, except

21 that such national limited monthly pay22 ment rate may not exceed 100 percent of

23 the median of all local monthly payment

24 rates computed for the item under such

25 subparagraph for the year and may not be
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1 less than 85 percent of the median of all

2 local monthly payment rates computed for

3 the item under such subparagraph for the

4 year; and’’.

5 (b) PAYMENT FOR PROSTHETIC DEVICES AND

6 ORTHOTICS AND PROSTHETICS.—

7 (1) IN GENERAL.—Section 1834(h)(2) (42

8 U.S.C. 1395m(h)(2)) is amended—

9 (A) in subparagraph (A)(ii)(II), by striking

10 ‘‘1992 or 1993’’ and inserting ‘‘1992, 1993, or

11 1994’’;

12 (B) in subparagraph (B)(ii), by striking

13 ‘‘each subsequent year’’ and inserting ‘‘1993’’;

14 (C) in subparagraph (C)(iv), by striking

15 ‘‘regional purchase price computed under sub16 paragraph (B)’’ and inserting ‘‘national limited

17 purchase price computed under subparagraph

18 (E)’’;

19 (D) in subparagraph (D)(ii), by striking ‘‘a

20 subsequent year’’ and inserting ‘‘1993’’; and

21 (E) by adding at the end the following new

22 subparagraph:

23 ‘‘(E) COMPUTATION OF NATIONAL LIM24 ITED PURCHASE PRICE.—With respect to the

25 furnishing of a particular item in a year, the
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1 Secretary shall compute a national limited

2 purchase price—

3 ‘‘(i) for 1994, equal to the local pur4 chase price computed under subparagraph

5 (A)(ii)(II) for the item for the year, except

6 that such national limited purchase price

7 may not exceed 100 percent of the median

8 of all local purchase prices for the item

9 computed under such subparagraph for the

10 year, and may not be less than 85 percent

11 of the median of all local purchase prices

12 for the item computed under such subpara13 graph for the year; and

14 ‘‘(ii) for each subsequent year, equal

15 to the amount determined under this sub16 paragraph for the preceding year increased

17 by the applicable percentage increase for

18 such subsequent year.’’.

19 (2) EXCEPTION FOR CERTAIN ITEMS.—Section

20 1834(h) (42 U.S.C. 1395m(h)), as amended by

21 paragraph (1), is further amended—

22 (A) in paragraph (1)(B), by striking ‘‘sub23 paragraph (C),’’ and inserting ‘‘subparagraphs

24 (C) and (F),’’; and
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1 (B) by adding at the end of paragraph (2)

2 the following new subparagraph:

3 ‘‘(F) EXCEPTION FOR CERTAIN ITEMS.—

4 Payment for ostomy supplies, tracheostomy

5 supplies, and urologicals shall be made in ac6 cordance with subparagraphs (B) and (C) of

7 section 1834(a)(2).’’.

8 (c) EFFECTIVE DATE.—The amendments made by

9 this section shall apply to items furnished on or after Jan10 uary 1, 1994.

11 SEC. 5032. PAYMENT FOR PARENTERAL AND ENTERAL NU12 TRIENTS, SUPPLIES, AND EQUIPMENT DUR13 ING 1994.

14 In determining the amount of payment under part

15 B of title XVIII of the Social Security Act during 1994,

16 the charges determined to be reasonable with respect to

17 parenteral and enteral nutrients, supplies, and equipment

18 may not exceed the charges determined to be reasonable

19 with respect to such nutrients, supplies, and equipment

20 during 1993.

21 SEC. 5033. TREATMENT OF NEBULIZERS AND ASPIRATORS.

22 (a) IN GENERAL.—Section 1834(a)(3)(A) (42 U.S.C.

23 1395m(a)(3)(A)) is amended by striking ‘‘ventilators, as24 pirators, IPPB machines, and nebulizers’’ and inserting

25 ‘‘ventilators and IPPB machines’’.
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1 (b) PAYMENT FOR ACCESSORIES RELATING TO

2 NEBULIZERS AND ASPIRATORS.—Section 1834(a)(2)(A)

3 (42 U.S.C. 1395m(a)) is amended—

4 (1) by striking ‘‘or’’ at the end of clause (i),

5 (2) by adding ‘‘or’’ at the end of clause (ii), and

6 (3) by inserting after clause (ii) the following

7 new clause:

8 ‘‘(iii) which is an accessory used in

9 conjunction with a nebulizer or aspirator,’’.

10 (c) EFFECTIVE DATE.—The amendments made by

11 this section shall apply to items furnished on or after Jan12 uary 1, 1994.

13 SEC. 5034. CERTIFICATION OF SUPPLIERS.

14 (a) REQUIREMENTS.—

15 (1) IN GENERAL.—Section 1834 (42 U.S.C.

16 1395m) is amended by adding at the end the follow17 ing new subsection:

18 ‘‘(i) REQUIREMENTS FOR SUPPLIERS OF MEDICAL

19 EQUIPMENT AND SUPPLIES.—

20 ‘‘(1) ISSUANCE AND RENEWAL OF SUPPLIER

21 NUMBER.—

22 ‘‘(A) PAYMENT.—Except as provided in

23 subparagraph (C), no payment may be made

24 under this part after October 1, 1994, for items

25 furnished by a supplier of medical equipment
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1 and supplies unless such supplier obtains (and

2 renews at such intervals as the Secretary may

3 require) a supplier number.

4 ‘‘(B) STANDARDS FOR POSSESSING A SUP5 PLIER NUMBER.—A supplier may not obtain a

6 supplier number unless—

7 ‘‘(i) for medical equipment and sup8 plies furnished on or after October 1,

9 1994, and before January 1, 1996, the

10 supplier meets standards prescribed by the

11 Secretary; and

12 ‘‘(ii) for medical equipment and sup13 plies furnished on or after January 1,

14 1996, the supplier meets revised standards

15 prescribed by the Secretary (in consulta16 tion with representatives of suppliers of

17 medical equipment and supplies, carriers,

18 and consumers) that shall include require19 ments that the supplier—

20 ‘‘(I) comply with all applicable

21 State and Federal licensure and regu22 latory requirements;

23 ‘‘(II) maintain a physical facility

24 on an appropriate site;
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1 ‘‘(III) have proof of appropriate

2 liability insurance; and

3 ‘‘(IV) meet such other require4 ments as the Secretary may specify.

5 ‘‘(C) EXCEPTION FOR ITEMS FURNISHED

6 AS INCIDENT TO A PHYSICIAN’S SERVICE.—

7 Subparagraph (A) shall not apply with respect

8 to medical equipment and supplies furnished as

9 an incident to a physician’s service.

10 ‘‘(D) PROHIBITION AGAINST MULTIPLE

11 SUPPLIER NUMBERS.—The Secretary may not

12 issue more than one supplier number to any

13 supplier of medical equipment and supplies un14 less the issuance of more than one number is

15 appropriate to identify subsidiary or regional

16 entities under the supplier’s ownership or con17 trol.

18 ‘‘(E) PROHIBITION AGAINST DELEGATION

19 OF SUPPLIER DETERMINATIONS.—The Sec20 retary may not delegate (other than by contract

21 under section 1842) the responsibility to deter22 mine whether suppliers meet the standards nec23 essary to obtain a supplier number.

24 ‘‘(2) CERTIFICATES OF MEDICAL NECESSITY.—
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1 ‘‘(A) STANDARDIZED CERTIFICATES.—Not

2 later than October 1, 1994, the Secretary shall,

3 in consultation with carriers under this part,

4 develop one or more standardized certificates of

5 medical necessity (as defined in subparagraph

6 (C)) for medical equipment and supplies for

7 which the Secretary determines that such a cer8 tificate is necessary.

9 ‘‘(B) PROHIBITION AGAINST DISTRIBUTION

10 BY SUPPLIERS OF CERTIFICATES OF MEDICAL

11 NECESSITY.—

12 ‘‘(i) IN GENERAL.—Except as pro13 vided in clause (ii), a supplier of medical

14 equipment and supplies may not distribute

15 to physicians or to individuals entitled to

16 benefits under this part for commercial

17 purposes any completed or partially com18 pleted certificates of medical necessity on

19 or after October 1, 1994.

20 ‘‘(ii) EXCEPTION FOR CERTAIN BILL21 ING INFORMATION.—Clause (i) shall not

22 apply with respect to a certificate of medi23 cal necessity for any item that is not con24 tained on the list of potentially overused

25 items developed by the Secretary under
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1 subsection (a)(15)(A) to the extent that

2 such certificate contains only information

3 completed by the supplier of medical equip4 ment and supplies identifying such supplier

5 and the beneficiary to whom such medical

6 equipment and supplies are furnished, a

7 description of such medical equipment and

8 supplies, any product code identifying such

9 medical equipment and supplies, and any

10 other administrative information (other

11 than information relating to the bene12 ficiary’s medical condition) identified by

13 the Secretary. In the event a supplier pro14 vides a certificate of medical necessity con15 taining information permitted under this

16 clause, such certificate shall also contain

17 the fee schedule amount and the supplier’s

18 charge for the medical equipment or sup19 plies being furnished prior to distribution

20 of such certificate to the physician.

21 ‘‘(iii) PENALTY.—Any supplier of

22 medical equipment and supplies who know23 ingly and willfully distributes a certificate

24 of medical necessity in violation of clause

25 (i) is subject to a civil money penalty in an
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1 amount not to exceed $1,000 for each such

2 certificate of medical necessity so distrib3 uted. The provisions of section 1128A

4 (other than subsections (a) and (b)) shall

5 apply to civil money penalties under this

6 subparagraph in the same manner as they

7 apply to a penalty or proceeding under sec8 tion 1128A(a).

9 ‘‘(C) DEFINITION.—For purposes of this

10 paragraph, the term ‘certificate of medical ne11 cessity’ means a form or other document con12 taining information required by the Secretary to

13 be submitted to show that a covered item is

14 reasonable and necessary for the diagnosis or

15 treatment of illness or injury or to improve the

16 functioning of a malformed body member.

17 ‘‘(3) COVERAGE AND REVIEW CRITERIA.—

18 ‘‘(A) DEVELOPMENT AND ESTABLISH19 MENT.—Not later than January 1, 1996, the

20 Secretary, in consultation with representatives

21 of suppliers of medical equipment and supplies,

22 individuals enrolled under this part, and appro23 priate medical specialty societies, shall develop

24 and establish uniform national coverage and

25 utilization review criteria for 200 items of medi-
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1 cal equipment and supplies selected in accord2 ance with the standards described in subpara3 graph (B). The Secretary shall publish the cri4 teria as part of the instructions provided to fis5 cal intermediaries and carriers under this part

6 and no further publication, including publica7 tion in the Federal Register, shall be required.

8 ‘‘(B) STANDARDS FOR SELECTING ITEMS

9 SUBJECT TO CRITERIA.—The Secretary may se10 lect an item for coverage under the criteria de11 veloped and established under subparagraph

12 (A) if the Secretary finds that—

13 ‘‘(i) the item is frequently purchased

14 or rented by beneficiaries;

15 ‘‘(ii) the item is frequently subject to

16 a determination that such item is not

17 medically necessary; or

18 ‘‘(iii) the coverage or utilization cri19 teria applied to the item (as of the date of

20 the enactment of this subsection) is not

21 consistent among carriers.

22 ‘‘(C) ANNUAL REVIEW AND EXPANSION OF

23 ITEMS SUBJECT TO CRITERIA.—The Secretary

24 shall annually review the coverage and utiliza25 tion of items of medical equipment and supplies
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1 to determine whether items not included among

2 the items selected under subparagraph (A)

3 should be made subject to uniform national cov4 erage and utilization review criteria, and, if ap5 propriate, shall develop and apply such criteria

6 to such additional items.

7 ‘‘(4) DEFINITION.—The term ‘medical equip8 ment and supplies’ means—

9 ‘‘(A) durable medical equipment (as de10 fined in section 1861(n));

11 ‘‘(B) prosthetic devices (as described in

12 section 1861(s)(8));

13 ‘‘(C) orthotics and prosthetics (as de14 scribed in section 1861(s)(9));

15 ‘‘(D) surgical dressings (as described in

16 section 1861(s)(5));

17 ‘‘(E) such other items as the Secretary

18 may determine; and

19 ‘‘(F) for purposes of paragraphs (1) and

20 (3)—

21 ‘‘(i) home dialysis supplies and equip22 ment (as described in section

23 1861(s)(2)(F)), and

24 ‘‘(ii) immunosuppressive drugs (as de25 scribed in section 1861(s)(2)(J)).’’.
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1 (2) CONFORMING AMENDMENT.—Effective Oc2 tober 1, 1994, paragraph (16) of section 1834(a)

3 (42 U.S.C. 1395m(a)) is repealed.

4 (b) REPORT ON EFFECT OF UNIFORM CRITERIA ON

5 UTILIZATION OF ITEMS.—Not later than July 1, 1996,

6 the Secretary shall submit a report to the Committee on

7 Ways and Means and the Committee on Energy and Com8 merce of the House of Representatives and the Committee

9 on Finance of the Senate analyzing the impact of the uni10 form criteria established under section 1834(i)(3)(A) of

11 the Social Security Act (as added by subsection (a)) on

12 the utilization of items of medical equipment and supplies

13 by individuals enrolled under part B of the medicare pro14 gram.

15 (c) USE OF COVERED ITEMS BY DISABLED BENE16 FICIARIES.—

17 (1) IN GENERAL.—The Secretary of Health and

18 Human Services, in consultation with representa19 tives of suppliers of durable medical equipment

20 under part B of the medicare program and individ21 uals entitled to benefits under such program on the

22 basis of disability, shall conduct a study of the ef23 fects of the methodology for determining payments

24 for items of such equipment under such part on the
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1 ability of such individuals to obtain items of such

2 equipment, including customized items.

3 (2) REPORT.—Not later than one year after the

4 date of the enactment of this Act, the Secretary

5 shall submit a report to Congress on the study con6 ducted under paragraph (1), and shall include in the

7 report such recommendations as the Secretary con8 siders appropriate to assure that disabled medicare

9 beneficiaries have access to items of durable medical

10 equipment.

11 (d) CRITERIA FOR TREATMENT OF ITEMS AS PROS12 THETICS DEVICES OR ORTHOTICS AND PROSTHETICS.—

13 Not later than one year after the date of the enactment

14 of this Act, the Secretary of Health and Human Services

15 shall submit a report to the Committees on Ways and

16 Means and Energy and Commerce of the House of Rep17 resentatives and the Committee on Finance of the Senate

18 describing prosthetic devices or orthotics and prosthetics

19 covered under part B of the medicare program that do

20 not require individualized or custom fitting and adjust21 ment to be used by a patient. Such report shall include

22 recommendations for an appropriate methodology for de23 termining the amount of payment for such items under

24 such program.
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1 SEC. 5035. PROHIBITION AGAINST CARRIER FORUM SHOP2 PING.

3 (a) IN GENERAL.—Section 1834(a)(12) (42 U.S.C.

4 1395m(a)(12)) is amended to read as follows:

5 ‘‘(12) USE OF CARRIERS TO PROCESS

6 CLAIMS.—

7 ‘‘(A) DESIGNATION OF REGIONAL CAR8 RIERS.—The Secretary may designate, by regu9 lation under section 1842, one carrier for one

10 or more entire regions to process all claims

11 within the region for covered items under this

12 section.

13 ‘‘(B) PROHIBITION AGAINST CARRIER

14 SHOPPING.—(i) No supplier of a covered item

15 may present or cause to be presented a claim

16 for payment under this part unless such claim

17 is presented to the appropriate regional carrier

18 (as designated by the Secretary).

19 ‘‘(ii) For purposes of clause (i), the term

20 ‘appropriate regional carrier’ means the carrier

21 having jurisdiction over the geographic area

22 that includes the permanent residence of the

23 patient to whom the item is furnished.’’.

24 (b) EFFECTIVE DATE.—The amendment made by

25 subsection (a) shall apply to items furnished on or after

26 October 1, 1993.
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1 (c) CLARIFICATION OF AUTHORITY TO DESIGNATE

2 CARRIERS FOR OTHER ITEMS AND SERVICES.—Nothing

3 in this subsection or the amendment made by this sub4 section may be construed to restrict the authority of the

5 Secretary of Health and Human Services to designate re6 gional carriers or modify claims jurisdiction rules with re7 spect to items or services under part B of the medicare

8 program that are not covered items under section 1834(a)

9 of the Social Security Act or prosthetic devices or orthotics

10 and prosthetics under section 1834(h) of such Act.

11 SEC. 5036. RESTRICTIONS ON CERTAIN MARKETING AND

12 SALES ACTIVITIES.

13 (a) PROHIBITING UNSOLICITED TELEPHONE CON14 TACTS FROM SUPPLIERS OF DURABLE MEDICAL EQUIP15 MENT TO MEDICARE BENEFICIARIES.—

16 (1) IN GENERAL.—Section 1834(a) (42 U.S.C.

17 1395m(a)) is amended by adding at the end the fol18 lowing new paragraph:

19 ‘‘(17) PROHIBITION AGAINST UNSOLICITED

20 TELEPHONE CONTACTS BY SUPPLIERS.—

21 ‘‘(A) IN GENERAL.—A supplier of a cov22 ered item under this subsection may not contact

23 an individual enrolled under this part by tele24 phone regarding the furnishing of a covered

25 item to the individual (other than a covered
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1 item the supplier has already furnished to the

2 individual) unless—

3 ‘‘(i) the individual gives permission to

4 the supplier to make contact by telephone

5 for such purpose; or

6 ‘‘(ii) the supplier has furnished a cov7 ered item under this subsection to the indi8 vidual during the 15-month period preced9 ing the date on which the supplier contacts

10 the individual for such purpose.

11 ‘‘(B) PROHIBITING PAYMENT FOR ITEMS

12 FURNISHED SUBSEQUENT TO UNSOLICITED

13 CONTACTS.—If a supplier knowingly contacts

14 an individual in violation of subparagraph (A),

15 no payment may be made under this part for

16 any item subsequently furnished to the individ17 ual by the supplier.

18 ‘‘(C) EXCLUSION FROM PROGRAM FOR

19 SUPPLIERS ENGAGING IN PATTERN OF UNSO20 LICITED CONTACTS.—If a supplier knowingly

21 contacts individuals in violation of subpara22 graph (A) to such an extent that the supplier’s

23 conduct establishes a pattern of contacts in vio24 lation of such subparagraph, the Secretary shall

25 exclude the supplier from participation in the
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1 programs under this Act, in accordance with

2 the procedures set forth in subsections (c), (f),

3 and (g) of section 1128.’’.

4 (2) REQUIRING REFUND OF AMOUNTS COL5 LECTED FOR DISALLOWED ITEMS.—Section 1834(a)

6 (42 U.S.C. 1395m(a)), as amended by paragraph

7 (1), is amended by adding at the end the following

8 new paragraph:

9 ‘‘(18) REFUND OF AMOUNTS COLLECTED FOR

10 CERTAIN DISALLOWED ITEMS.—

11 ‘‘(A) IN GENERAL.—If a nonparticipating

12 supplier furnishes to an individual enrolled

13 under this part a covered item for which no

14 payment may be made under this part by rea15 son of paragraph (17)(B), the supplier shall re16 fund on a timely basis to the patient (and shall

17 be liable to the patient for) any amounts col18 lected from the patient for the item, unless—

19 ‘‘(i) the supplier establishes that the

20 supplier did not know and could not rea21 sonably have been expected to know that

22 payment may not be made for the item by

23 reason of paragraph (17)(B), or

24 ‘‘(ii) before the item was furnished,

25 the patient was informed that payment
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1 under this part may not be made for that

2 item and the patient has agreed to pay for

3 that item.

4 ‘‘(B) SANCTIONS.—If a supplier knowingly

5 and willfully fails to make refunds in violation

6 of subparagraph (A), the Secretary may apply

7 sanctions against the supplier in accordance

8 with section 1842(j)(2).

9 ‘‘(C) NOTICE.—Each carrier with a con10 tract in effect under this part with respect to

11 suppliers of covered items shall send any notice

12 of denial of payment for covered items by rea13 son of paragraph (17)(B) and for which pay14 ment is not requested on an assignment-related

15 basis to the supplier and the patient involved.

16 ‘‘(D) TIMELY BASIS DEFINED.—A refund

17 under subparagraph (A) is considered to be on

18 a timely basis only if—

19 ‘‘(i) in the case of a supplier who does

20 not request reconsideration or seek appeal

21 on a timely basis, the refund is made with22 in 30 days after the date the supplier re23 ceives a denial notice under subparagraph

24 (C), or
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1 ‘‘(ii) in the case in which such a re2 consideration or appeal is taken, the re3 fund is made within 15 days after the date

4 the supplier receives notice of an adverse

5 determination on reconsideration or ap6 peal.’’.

7 (b) CONFORMING AMENDMENT.—Section 1834(h)(3)

8 (42 U.S.C. 1395m(h)(3)) is amended by striking ‘‘Para9 graph (12)’’ and inserting ‘‘Paragraphs (12) and (17)’’.

10 (c) EFFECTIVE DATE.—The amendments made by

11 subsections (a) and (b) shall apply to items furnished after

12 the expiration of the 60-day period that begins on the date

13 of the enactment of this Act.

14 SEC. 5037. KICKBACK CLARIFICATION.

15 (a) IN GENERAL.—Section 1128B(b)(3)(B) (42

16 U.S.C. 1320a–7b(b)(3)(B)) is amended by inserting be17 fore the semicolon the following: ‘‘(except that in the case

18 of a contract supply arrangement between any entity and

19 a supplier of medical supplies and equipment (as defined

20 in section 1834(i)(4), but not including items described

21 in subparagraph (F) of such section), such employment

22 shall not be considered bona fide to the extent that it in23 cludes tasks of a clerical and cataloging nature in trans24 mitting to suppliers assignment rights of individuals eligi-
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1 ble for benefits under part B of title XVIII, or perform2 ance of warehousing or stock inventory functions)’’.

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall apply with respect to services fur5 nished on or after the first day of the first month that

6 begins after the expiration of the 60-day period beginning

7 on the date of the enactment of this Act.

8 SEC. 5038. BENEFICIARY LIABILITY FOR NONCOVERED

9 SERVICES.

10 (a) UNASSIGNED CLAIMS.—

11 (1) IN GENERAL.—Section 1834(i) (42 U.S.C.

12 1395m(i)), as added by section 5034(a)(1), is

13 amended—

14 (A) by redesignating paragraph (4) as

15 paragraph (5), and

16 (B) by inserting after paragraph (3) the

17 following new paragraph:

18 ‘‘(4) LIMITATION ON PATIENT LIABILITY.—If a

19 supplier of medical equipment and supplies (as de20 fined in paragraph (5))—

21 ‘‘(A) furnishes an item or service to a ben22 eficiary for which no payment may be made by

23 reason of paragraph (1);
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1 ‘‘(B) furnishes an item or service to a ben2 eficiary for which payment is denied in advance

3 under subsection (a)(15); or

4 ‘‘(C) furnishes an item or service to a ben5 eficiary for which payment is denied under

6 section 1862(a)(1);

7 any expenses incurred for items and services fur8 nished to an individual by such a supplier not on an

9 assigned basis shall be the responsibility of such

10 supplier. The individual shall have no financial re11 sponsibility for such expenses and the supplier shall

12 refund on a timely basis to the individual (and shall

13 be liable to the individual for) any amounts collected

14 from the individual for such items or services. The

15 provisions of subsection (a)(18) shall apply to re16 funds required under the previous sentence in the

17 same manner as such provisions apply to refunds

18 under such subsection.’’.

19 (2) CONFORMING AMENDMENT.—Section

20 1128B(b)(3)(B) (42 U.S.C. 1320a–7b(b)(3)(B)), as

21 amended by section 5037(a), is amended by striking

22 ‘‘1834(i)(4)’’ and inserting ‘‘1834(i)(5)’’.

23 (b) ASSIGNED CLAIMS.—Section 1879 (42 U.S.C.

24 1395pp) is amended by adding at the end the following

25 new subsection:
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1 ‘‘(h) If a supplier of medical equipment and supplies

2 (as defined in section 1834(i)(4))—

3 ‘‘(1) furnishes an item or service to a bene4 ficiary for which no payment may be made by reason

5 of section 1834(i)(1); or

6 ‘‘(2) furnishes an item or service to a bene7 ficiary for which payment is denied in advance under

8 section 1834(a)(15);

9 any expenses incurred for items and services furnished to

10 an individual by such a supplier on an assignment-related

11 basis shall be the responsibility of such supplier. The indi12 vidual shall have no financial responsibility for such ex13 penses and the supplier shall refund on a timely basis to

14 the individual (and shall be liable to the individual for)

15 any amounts collected from the individual for such items

16 or services. The provisions of section 1834(a)(18) shall

17 apply to refunds required under the previous sentence in

18 the same manner as such provisions apply to refunds

19 under such section.’’.

20 (c) EFFECTIVE DATE.—The amendments made by

21 this section shall apply to items or services furnished on

22 or after October 1, 1994.
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1 SEC. 5039. ADJUSTMENTS FOR INHERENT REASONABLE2 NESS.

3 (a) ADJUSTMENTS MADE TO FINAL PAYMENT

4 AMOUNTS.—

5 (1) IN GENERAL.—Section 1834(a)(10)(B) (42

6 U.S.C. 1395m(a)(10)(B)) is amended by adding at

7 the end the following: ‘‘In applying such provisions

8 to payments for an item under this subsection, the

9 Secretary shall make adjustments to the payment

10 basis for the item described in paragraph (1)(B) if

11 the Secretary determines (in accordance with such

12 provisions and on the basis of prices and costs appli13 cable at the time the item is furnished) that such

14 payment basis is not inherently reasonable.’’.

15 (2) EFFECTIVE DATE.—The amendment made

16 by paragraph (1) shall take effect on the date of the

17 enactment of this Act.

18 (b) ADJUSTMENT REQUIRED FOR CERTAIN ITEMS.—

19 (1) IN GENERAL.—In accordance with section

20 1834(a)(10)(B) of the Social Security Act (as

21 amended by subsection (a)), the Secretary of Health

22 and Human Services shall determine whether the

23 payment amounts for the items described in para24 graph (2) are not inherently reasonable, and shall

25 adjust such amounts in accordance with such section

26 if the amounts are not inherently reasonable.
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1 (2) ITEMS DESCRIBED.—The items referred to

2 in paragraph (1) are decubitus care equipment,

3 transcutaneous electrical nerve stimulators, and any

4 other items considered appropriate by the Secretary.

5 SEC. 5040. PAYMENT FOR SURGICAL DRESSINGS.

6 (a) IN GENERAL.—Section 1834 (42 U.S.C. 1395m),

7 as amended by section 5034(a)(1), is amended by adding

8 at the end the following new subsection:

9 ‘‘(j) PAYMENT FOR SURGICAL DRESSINGS.—

10 ‘‘(1) IN GENERAL.—Payment under this sub11 section for surgical dressings (described in section

12 1861(s)(5)) shall be made in a lump sum amount

13 for the purchase of the item in an amount equal to

14 80 percent of the lesser of—

15 ‘‘(A) the actual charge for the item; or

16 ‘‘(B) a payment amount determined in ac17 cordance with the methodology described in

18 subparagraphs (B) and (C) of subsection (a)(2)

19 (except that in applying such methodology, the

20 national limited payment amount referred to in

21 such subparagraphs shall be initially computed

22 based on local payment amounts using average

23 reasonable charges for the 12-month period

24 ending December 31, 1992, increased by the
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1 covered item updates described in such sub2 section for 1993 and 1994)

3 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

4 apply to surgical dressings that are—

5 ‘‘(A) furnished as an incident to a physi6 cian’s professional service; or

7 ‘‘(B) furnished by a home health agency.’’.

8 (b) CONFORMING AMENDMENT.—Section 1833(a)(1)

9 (42 U.S.C. 1395l(a)(1)), as amended by sections

10 5070(e)(2) and 5010(e)(1), is amended—

11 (1) by striking ‘‘and’’ before ‘‘(P)’’, and

12 (2) by inserting before the semicolon at the end

13 the following: ‘‘, and (Q) with respect to surgical

14 dressings, the amounts paid shall be the amounts

15 determined under section 1834(j)’’.

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to items furnished on or after Jan18 uary 1, 1994.

19 SEC. 5041. PAYMENTS FOR TENS DEVICES.

20 (a) IN GENERAL.—Section 1834(a)(1)(D) (42 U.S.C.

21 1395m(a)(1)(D)) is amended by striking ‘‘15 percent’’ the

22 second place it appears and inserting ‘‘45 percent’’.

23 (b) EFFECTIVE DATE.—The amendment made by

24 subsection (a) shall apply to items furnished on or after

25 January 1, 1994.
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1 SEC. 5042. MISCELLANEOUS AND TECHNICAL CORREC2 TIONS.

3 (a) UPDATES TO PAYMENT AMOUNTS.—Subpara4 graph (A) of section 1834(a)(14) (42 U.S.C.

5 1395m(a)(14)) is amended to read as follows:

6 ‘‘(A) for 1991 and 1992, the percentage

7 increase in the consumer price index for all

8 urban consumers (U.S. city average) for the 12-

9 month period ending with June of the previous

10 year reduced by 1 percentage point; and’’.

11 (b) TREATMENT OF POTENTIALLY OVERUSED ITEMS

12 AND ADVANCED DETERMINATIONS OF COVERAGE.—(1)

13 Effective on the date of the enactment of this Act, section

14 1834(a)(15) (42 U.S.C. 1395m(a)(15)) is amended to

15 read as follows:

16 ‘‘(15) SPECIAL TREATMENT FOR POTENTIALLY

17 OVERUSED ITEMS.—

18 ‘‘(A) DEVELOPMENT OF LIST OF ITEMS BY

19 SECRETARY.—The Secretary shall develop and

20 periodically update a list of items for which

21 payment may be made under this subsection

22 that are potentially overused, and shall include

23 in such list seat-lift mechanisms, transcutane24 ous electrical nerve stimulators, motorized

25 scooters, decubitus care mattresses, and any

26 such other item determined by the Secretary to
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1 be potentially overused on the basis of any of

2 the following criteria—

3 ‘‘(i) the item is marketed directly to

4 potential patients;

5 ‘‘(ii) the item is marketed with an

6 offer to potential patients to waive the

7 costs of coinsurance associated with the

8 item or is marketed as being available at

9 no cost to policyholders of a medicare sup10 plemental policy (as defined in section

11 1882(g)(1));

12 ‘‘(iii) the item has been subject to a

13 consistent pattern of overutilization; or

14 ‘‘(iv) a high proportion of claims for

15 payment for such item under this part may

16 not be made because of the application of

17 section 1862(a)(1).

18 ‘‘(B) ITEMS SUBJECT TO SPECIAL CARRIER

19 SCRUTINY.—Payment may not be made under

20 this part for any item contained in the list de21 veloped by the Secretary under subparagraph

22 (A) unless the carrier has subjected the claim

23 for payment for the item to special scrutiny or

24 has followed the procedures described in para25 graph (11)(C) with respect to the item.’’.
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1 (2) Effective January 1, 1994, section 1834(a)(11)

2 (42 U.S.C. 1395m(a)) is amended by adding at the end

3 the following new subparagraph:

4 ‘‘(C) CARRIER DETERMINATIONS FOR CER5 TAIN ITEMS IN ADVANCE.—A carrier shall de6 termine in advance whether payment for an

7 item may not be made under this subsection be8 cause of the application of section 1862(a)(1)

9 if—

10 ‘‘(i) the item is a customized item

11 (other than inexpensive items specified by

12 the Secretary); or

13 ‘‘(ii) the item is a specified covered

14 item under subparagraph (B).’’.

15 (3) Effective for standards applied for contract years

16 beginning after the date of the enactment of this Act, sec17 tion 1842(c) (42 U.S.C. 1395u(c)), as amended by section

18 5013(a), is amended by adding at the end the following

19 new paragraph:

20 ‘‘(5) Each contract under this section which provides

21 for the disbursement of funds, as described in subsection

22 (a)(1)(B), shall require the carrier to meet criteria devel23 oped by the Secretary to measure the timeliness of carrier

24 responses to requests for payment of items described in

25 section 1834(a)(11)(C).’’.
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1 (4) Section 1834(h)(3) (42 U.S.C. 1395m(h)(3)) is

2 amended by striking ‘‘paragraph (10) and paragraph

3 (11)’’ and inserting ‘‘paragraphs (10) and (11)’’.

4 (c) STUDY OF VARIATIONS IN DURABLE MEDICAL

5 EQUIPMENT SUPPLIER COSTS.—

6 (1) COLLECTION AND ANALYSIS OF SUPPLIER

7 COST DATA.—The Administrator of the Health Care

8 Financing Administration shall, in consultation with

9 appropriate organizations, collect data on supplier

10 costs of durable medical equipment for which pay11 ment may be made under part B of the medicare

12 program, and shall analyze such data to determine

13 the proportions of such costs attributable to the

14 service and product components of furnishing such

15 equipment and the extent to which such proportions

16 vary by type of equipment and by the geographic

17 region in which the supplier is located.

18 (2) DEVELOPMENT OF GEOGRAPHIC ADJUST19 MENT INDEX; REPORTS.—Not later than January 1,

20 1995—

21 (A) the Administrator shall submit a re22 port to the Committees on Energy and Com23 merce and Ways and Means of the House of

24 Representatives and the Committee on Finance

25 of the Senate on the data collected and the
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1 analysis conducted under paragraph (1), and

2 shall include in such report the Administrator’s

3 recommendations for a geographic cost adjust4 ment index for suppliers of durable medical

5 equipment under the medicare program and an

6 analysis of the impact of such proposed index

7 on payments under the medicare program; and

8 (B) the Comptroller General shall submit a

9 report to the Committees on Energy and Com10 merce and Ways and Means of the House of

11 Representatives and the Committee on Finance

12 of the Senate analyzing on a geographic basis

13 the supplier costs of durable medical equipment

14 under the medicare program.

15 (d) OXYGEN RETESTING.—Section 1834(a)(5)(E)

16 (42 U.S.C. 1395m(a)(5)(E)) is amended by striking ‘‘55’’

17 and inserting ‘‘56’’.

18 (e) OTHER MISCELLANEOUS AND TECHNICAL

19 AMENDMENTS.—(1) Section 4152(a)(3) of OBRA–1990

20 is amended by striking ‘‘amendment made by subsection

21 (a)’’ and inserting ‘‘amendments made by this sub22 section’’.

23 (2) Section 4152(c)(2) of OBRA–1990 is amended

24 by striking ‘‘1395m(a)(7)(A)’’ and inserting

25 ‘‘1395m(a)(7)’’.
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1 (3) Section 1834(a)(7)(A)(iii)(II) (42 U.S.C.

2 1395m(a)(7)(A)(iii)(II)) is amended by striking ‘‘clause

3 (v)’’ and inserting ‘‘clause (vi)’’.

4 (4) Section 1834(a)(7)(C)(i) (42 U.S.C.

5 1395m(a)(7)(C)(i)) is amended by striking ‘‘or paragraph

6 (3)’’.

7 (5) Section 1834(a)(3) (42 U.S.C. 1395m(a)(3)) is

8 amended by striking subparagraph (D).

9 (6) Section 4153(c)(1) of OBRA–1990 is amended

10 by striking ‘‘1834(a)’’ and inserting ‘‘1834(h)’’.

11 (7) Section 4153(d)(2) of OBRA–1990 is amended

12 by striking ‘‘Reconiliation’’ and inserting ‘‘Reconcili13 ation’’.

14 (8)(A) Section 1834(a) (42 U.S.C. 1395m(a)) is

15 amended by striking paragraph (6).

16 (B) Section 1834(a) (42 U.S.C. 1395m(a)) is

17 amended—

18 (i) in subparagraphs (A) and (B) of paragraph

19 (1), by striking ‘‘(2) through (7)’’ each place it ap20 pears and inserting ‘‘(2) through (5) and (7)’’;

21 (ii) in paragraph (7), by striking ‘‘(2) through

22 (6)’’ and inserting ‘‘(2) through (5)’’;

23 (iii) in paragraph (8), by striking ‘‘paragraphs

24 (6) and (7)’’ each place it appears in the matter pre-
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1 ceding subparagraph (A) and in subparagraph (C)

2 and inserting ‘‘paragraph (7)’’; and

3 (iv) in paragraph (8)(A)(i), by striking ‘‘de4 scribed—’’ and all that follows and inserting ‘‘de5 scribed in paragraph (7) equal to the average of the

6 purchase prices on the claims submitted on an as7 signment-related basis for the unused item supplied

8 during the 6-month period ending with December

9 1986.’’.

10 (9) The amendments made by this subsection shall

11 take effect as if included in the enactment of OBRA–1990.

12 Subchapter D—Part B Premium

13 SEC. 5051. PART B PREMIUM.

14 Section 1839(e) (42 U.S.C. 1395r(e)) is amended—

15 (1) in paragraph (1)(A), by inserting ‘‘and for

16 each month in 1996 and 1997’’ after ‘‘January

17 1991’’, and

18 (2) in paragraph (2), by striking ‘‘1991’’ and

19 inserting ‘‘1998’’.

20 Subchapter E—Other Provisions

21 SEC. 5061. PAYMENTS FOR CLINICAL DIAGNOSTIC LABORA22 TORY TESTS.

23 (a) LOWER CAP.—Section 1833(h)(4)(B) (42 U.S.C.

24 1395l(h)(4)(B)) is amended—

25 (1) by striking ‘‘and’’ at the end of clause (iii),
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1 (2) in clause (iv), by inserting ‘‘and before Jan2 uary 1, 1994,’’ after ‘‘1990,’’,

3 (3) by striking the period at the end of clause

4 (iv) and inserting ‘‘, and’’, and

5 (4) by adding at the end the following:

6 ‘‘(v) after December 31, 1993, is equal to 76

7 percent of the median of all the fee schedules estab8 lished for that test for that laboratory setting under

9 paragraph (1).’’.

10 (b) TWO PERCENT UPDATE FOR 1994 THROUGH

11 1998.—Section 1833(h)(2)(A)(ii)(III) (42 U.S.C.

12 1395l(h)(2)(A)(ii)(III)) is amended by striking ‘‘1991,

13 1992, and 1993’’ and inserting ‘‘1991 through 1998’’.

14 SEC. 5062. TREATMENT OF INPATIENTS AND PROVISION OF

15 DIAGNOSTIC AND THERAPEUTIC X-RAY SERV16 ICES BY RURAL HEALTH CLINICS AND FED17 ERALLY QUALIFIED HEALTH CENTERS.

18 (a) TREATMENT OF INPATIENTS.—Section 1861(aa)

19 (42 U.S.C. 1395x(aa)) is amended—

20 (1) in paragraph (1), in the matter following

21 subparagraph (C), by striking ‘‘as an outpatient’’

22 and inserting ‘‘as a patient’’;

23 (2) in paragraph (2)(A), by striking ‘‘furnishing

24 to outpatients’’ and inserting ‘‘furnishing to pa25 tients’’; and
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1 (3) in paragraph (3), in the matter following

2 subparagraph (B), by striking ‘‘as an outpatient’’

3 and inserting ‘‘as a patient’’.

4 (b) TREATMENT OF DIAGNOSTIC AND THERAPEUTIC

5 X-RAY SERVICES.—Section 1861(aa) (42 U.S.C.

6 1395x(aa)) is further amended—

7 (1) in paragraph (1)(A), by inserting ‘‘(i)’’ after

8 ‘‘(A)’’ and by adding at the end the following: ‘‘and

9 (ii) diagnostic and therapeutic x-ray services,’’, and

10 (2) in paragraph (2)(A), by striking ‘‘(A)’’ and

11 inserting ‘‘(A)(i)’’.

12 (c) CONFORMING AMENDMENT.—Section

13 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is amended by

14 striking ‘‘and services of a certified registered nurse anes15 thetist’’ and inserting ‘‘services of a certified registered

16 nurse anesthetist, rural health clinic services, and Feder17 ally-qualified health center services’’.

18 (d) EFFECTIVE DATE.—The amendments made by

19 this section shall take effect on January 1, 1994, and shall

20 apply to services furnished on or after such date.

21 SEC. 5063. APPLICATION OF MAMMOGRAPHY CERTIFI22 CATION REQUIREMENTS.

23 (a) SCREENING MAMMOGRAPHY.—Section 1834(c)

24 (42 U.S.C. 1395m(c)) is amended—
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1 (1) in paragraph (1)(B), by striking ‘‘meets the

2 quality standards established under paragraph (3)’’

3 and inserting ‘‘is conducted by a facility that has a

4 certificate (or provisional certificate) issued under

5 section 354 of the Public Health Service Act’’;

6 (2) in paragraph (1)(C)(iii), by striking ‘‘para7 graph (4)’’ and inserting ‘‘paragraph (3)’’;

8 (3) by striking paragraph (3); and

9 (4) by redesignating paragraphs (4) and (5) as

10 paragraphs (3) and (4).

11 (b) DIAGNOSTIC MAMMOGRAPHY.—Section

12 1861(s)(3) (42 U.S.C. 1395x(s)(3)) is amended by insert13 ing ‘‘and including diagnostic mammography if conducted

14 by a facility that has a certificate (or provisional certifi15 cate) issued under section 354 of the Public Health Serv16 ice Act’’ after ‘‘necessary’’.

17 (c) CONFORMING AMENDMENTS.—(1) Section

18 1862(a)(1)(F) (42 U.S.C. 1395y(a)(1)(F)) is amended by

19 striking ‘‘or which does not meet the standards established

20 under section 1834(c)(3)’’ and inserting ‘‘or which is not

21 conducted by a facility described in section

22 1834(c)(1)(B)’’.

23 (2) Section 1863 (42 U.S.C. 1395z) is amended by

24 striking ‘‘or whether screening mammography meets the

25 standards established under section 1834(c)(3),’’.
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1 (3) The first sentence of section 1864(a) (42 U.S.C.

2 1395aa(a)) is amended by striking ‘‘, or whether screening

3 mammography meets the standards established under sec4 tion 1834(c)(3)’’.

5 (4) The third sentence of section 1865(a) (42 U.S.C.

6 1395bb(a)) is amended by striking ‘‘1834(c)(3),’’.

7 (d) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to mammography furnished by a

9 facility on and after the first date that the certificate re10 quirements of section 354(b) of the Public Health Service

11 Act apply to such mammography conducted by such facil12 ity.

13 SEC. 5064. EXTENSION OF ALZHEIMER’S DISEASE DEM14 ONSTRATION.

15 Section 9342 of OBRA–1986, as amended by section

16 4164(a)(2) of OBRA–1990, is amended—

17 (1) in subsection (c)(1), by striking ‘‘4 years’’

18 and inserting ‘‘5 years’’; and

19 (2) in subsection (f)—

20 (A) by striking ‘‘$55,000,000’’ and insert21 ing ‘‘$60,000,000’’, and

22 (B) by striking ‘‘$3,000,000’’ and insert23 ing ‘‘$5,000,000’’.
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1 SEC. 5065. ORAL CANCER DRUGS.

2 (a) COVERAGE OF CERTAIN SELF-ADMINISTERED

3 ANTICANCER DRUGS.—Section 1861(s)(2) (42 U.S.C.

4 1395(s)(2)), as amended by section 5070(f)(7)(B), is

5 amended—

6 (1) by striking ‘‘and’’ at the end of subpara7 graph (N);

8 (2) by adding ‘‘and’’ at the end of subpara9 graph (O); and

10 (3) by adding at the end the following new sub11 paragraph:

12 ‘‘(P) an oral drug (which is approved by the

13 Federal Food and Drug Administration) prescribed

14 for use as an anticancer chemotherapeutic agent for

15 a given indication, and containing an active ingredi16 ent (or ingredients), which is the same indication

17 and active ingredient (or ingredients) as a drug

18 which the carrier determines would be covered pur19 suant to subparagraph (A) or (B) if the drug could

20 not be self-administered;’’.

21 (b) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to items furnished on or after Jan23 uary 1, 1994.
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1 SEC. 5066. EXTENSION OF MUNICIPAL HEALTH SERVICE

2 DEMONSTRATION PROJECTS.

3 Section 9215 of the Consolidated Omnibus Budget

4 Reconciliation Act of 1985, as amended by section 6135

5 of OBRA–1989, is amended—

6 (1) by striking ‘‘December 31, 1993’’ and in7 serting ‘‘December 31, 1997’’, and

8 (2) in the second sentence, by inserting after

9 ‘‘beneficiary costs,’’ the following: ‘‘costs to the med10 icaid program and other payors, access to care, out11 comes, beneficiary satisfaction, utilization differences

12 among the different populations served by the

13 projects,’’.

14 SEC. 5067. TREATMENT OF CERTAIN INDIAN HEALTH PRO15 GRAMS AND FACILITIES AS FEDERALLY16 QUALIFIED HEALTH CENTERS.

17 (a) IN GENERAL.—Section 1861(aa)(4) (42 U.S.C.

18 1395x(aa)(4)) is amended—

19 (1) by striking ‘‘or’’ at the end of subparagraph

20 (B);

21 (2) by striking the period at the end of sub22 paragraph (C) and inserting ‘‘; or’’; and

23 (3) by adding at the end the following new sub24 paragraph:

25 ‘‘(D) is an outpatient health program or facility

26 operated by a tribe or tribal organization under the
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1 Indian Self-Determination Act or by an urban In2 dian organization receiving funds under title V of

3 the Indian Health Care Improvement Act.’’.

4 (b) EFFECTIVE DATE.—The amendment made by

5 subsection (a) shall take effect as if included in the enact6 ment of section 4161(a)(2)(C) of OBRA–1990.

7 SEC. 5068. INTEREST PAYMENTS.

8 (a) IN GENERAL.—Section 1842(c)(2)(B)(ii)(IV) of

9 the Social Security Act shall be applied with respect to

10 paper claims received in the 9-month period beginning

11 January 1, 1993, by substituting ‘‘27 calendar days’’ for

12 ‘‘24 calendar days’’ and ‘‘17 calendar days’’.

13 (b) PROHIBITING PAYMENT OF INTEREST DURING

14 MANDATORY PAYMENT DELAY PERIOD.—Section

15 1842(c)(2)(C) (42 U.S.C. 1395u(c)(2)(C)) is amended by

16 adding at the end the following: ‘‘Notwithstanding any

17 other provision of law, no interest may be paid with re18 spect to a claim pursuant to the preceding sentence within

19 any period following the submission of the claim during

20 which no payment may be issued, mailed, or otherwise

21 transmitted with respect to the claim.’’.
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1 SEC. 5069. CLARIFICATION OF COVERAGE OF CERTIFIED

2 NURSE-MIDWIFE SERVICES PERFORMED

3 OUTSIDE THE MATERNITY CYCLE.

4 (a) IN GENERAL.—Section 1861(gg)(2) (42 U.S.C.

5 1395x(gg)(2)) is amended by striking ‘‘, and performs

6 services’’ and all that follows and inserting a period.

7 (b) EFFECTIVE DATE.—The amendment made by

8 subsection (a) shall apply to services furnished on or after

9 January 1, 1994.

10 SEC. 5069A. INCREASE IN, AND STUDY OF, ANNUAL CAP ON

11 AMOUNT OF MEDICARE PAYMENT FOR OUT12 PATIENT PHYSICAL THERAPY AND OCCUPA13 TIONAL THERAPY SERVICES.

14 (a) INCREASE IN ANNUAL LIMITATION.—Section

15 1833(g) (42 U.S.C. 1395l(g)) is amended by striking

16 ‘‘$750’’ and inserting ‘‘$900’’ each place it appears.

17 (b) STUDY.—(1) The Physician Payment Review

18 Commission shall conduct a study of the appropriateness

19 of continuing an annual limitation on the amount of pay20 ment for outpatient services of independently practicing

21 physical and occupational therapists under the medicare

22 program.

23 (2) By not later than January 1, 1995, the Commis24 sion shall submit to the Committees on Energy and Com25 merce and Ways and Means of the House of Representa26 tives and the Committee on Finance of the Senate a report
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1 on the study conducted under paragraph (1). Such report

2 shall include such recommendations for changes in such

3 annual limitation as the Commission finds appropriate.

4 (c) EFFECTIVE DATE.—The amendment made by

5 subsection (a) shall apply to services furnished on or after

6 January 1, 1994.

7 SEC. 5070. MISCELLANEOUS AND TECHNICAL CORREC8 TIONS.

9 (a) REVISION OF INFORMATION ON PART B CLAIMS

10 FORMS.—Section 1833(q)(1) (42 U.S.C. 1395l(q)(1)) is

11 amended—

12 (1) by striking ‘‘provider number’’ and inserting

13 ‘‘unique physician identification number’’; and

14 (2) by striking ‘‘and indicate whether or not the

15 referring physician is an interested investor (within

16 the meaning of section 1877(h)(5))’’.

17 (b) CONSULTATION FOR SOCIAL WORKERS.—Effec18 tive with respect to services furnished on or after January

19 1, 1991, section 6113(c) of OBRA–1989 is amended—

20 (1) by inserting ‘‘and clinical social worker

21 services’’ after ‘‘psychologist services’’; and

22 (2) by striking ‘‘psychologist’’ the second and

23 third place it appears and inserting ‘‘psychologist or

24 clinical social worker’’.
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1 (c) REPORTS ON HOSPITAL OUTPATIENT PAY2 MENT.—(1) OBRA–1989 is amended by striking section

3 6137.

4 (2) Section 1135(d) (42 U.S.C. 1320b–5(d)) is

5 amended—

6 (A) by striking paragraph (6); and

7 (B) in paragraph (7)—

8 (i) by striking ‘‘systems’’ each place it ap9 pears and inserting ‘‘system’’; and

10 (ii) by striking ‘‘paragraphs (1) and (6)’’

11 and inserting ‘‘paragraph (1)’’.

12 (d) RADIOLOGY AND DIAGNOSTIC SERVICES PRO13 VIDED IN HOSPITAL OUTPATIENT DEPARTMENTS.—

14 (1) Effective as if included in the enactment of

15 OBRA–1989, section 1833(n)(1)(B)(i)(II) (42 U.S.C.

16 1395l(n)(1)(B)(i)(II)) is amended—

17 (A) by inserting ‘‘and for services described in

18 subsection (a)(2)(E)(ii) furnished on or after Janu19 ary 1, 1992’’ after ‘‘1989’’; and

20 (B) by striking ‘‘1842(b)’’ and inserting

21 ‘‘1842(b) (or, in the case of services furnished on or

22 after January 1, 1992, under section 1848)’’.

23 (2) Effective as if included in the enactment of

24 OBRA–1989, section 1833(n)(1)(B)(i)(II) (42 U.S.C.
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1 1395l(n)(1)(B)(i)(II)) is amended by striking ‘‘January

2 1,’’ and inserting ‘‘April 1,’’.

3 (e) PAYMENTS TO NURSE PRACTITIONERS IN RURAL

4 AREAS (SECTION 4155 OF OBRA–1990).—(1) Section

5 1861(s)(2)(K)(iii) (42 U.S.C. 1395x(s)(2)(K)(iii)) is

6 amended—

7 (A) by striking ‘‘subsection (aa)(3)’’ and insert8 ing ‘‘subsection (aa)(5)’’; and

9 (B) by striking ‘‘subsection (aa)(4)’’ and insert10 ing ‘‘subsection (aa)(6)’’.

11 (2) Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)) is

12 amended—

13 (A) by striking ‘‘and’’ before ‘‘(N)’’; and

14 (B) with respect to the matter inserted by sec15 tion 4155(b)(2)(B) of OBRA–1990—

16 (i) by striking ‘‘(M)’’ and inserting ‘‘, and

17 (O)’’, and

18 (ii) by transferring and inserting it (as

19 amended) immediately before the semicolon at

20 the end.

21 (3) Section 1833(r)(1) (42 U.S.C. 1395l(r)(1)) is

22 amended—

23 (A) by striking ‘‘ambulatory’’ each place it ap24 pears and inserting ‘‘or ambulatory’’; and
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1 (B) by striking ‘‘center,’’ and inserting ‘‘cen2 ter’’.

3 (4) Section 1833(r)(2)(A) (42 U.S.C. 1395l(r)(2)(A))

4 is amended by striking ‘‘subsection (a)(1)(M)’’ and insert5 ing ‘‘subsection (a)(1)(O)’’.

6 (5) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is

7 amended by striking ‘‘subsection (s)(2)(K)(i)’’ and insert8 ing ‘‘clauses (i) or (iii) of subsection (s)(2)(K)’’.

9 (6) Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is

10 amended by striking ‘‘this Act’’ and inserting ‘‘this title’’.

11 (7) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is

12 amended by striking ‘‘1861(s)(2)(K)(i)’’ and inserting

13 ‘‘1861(s)(2)(K)(i) or 1861(s)(2)(K)(iii)’’.

14 (8) Section 1866(a)(1)(H) (42 U.S.C.

15 1395cc(a)(1)(H)) is amended by striking

16 ‘‘1861(s)(2)(K)(i)’’ and inserting ‘‘1861(s)(2)(K)(i) or

17 1861(s)(2)(K)(iii)’’.

18 (f) OTHER MISCELLANEOUS AND TECHNICAL

19 AMENDMENTS.—

20 (1) IMMEDIATE ENROLLMENT IN PART B BY IN21 DIVIDUALS COVERED BY AN EMPLOYMENT-BASED

22 PLAN.—(A) Subparagraphs (A) and (B) of section

23 1837(i)(3) (42 U.S.C. 1395p(i)(3)) are each

24 amended—
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1 (i) by striking ‘‘beginning with the first

2 day of the first month in which the individual

3 is no longer enrolled’’ and inserting ‘‘including

4 each month during any part of which the indi5 vidual is enrolled’’; and

6 (ii) by striking ‘‘and ending seven months

7 later’’ and inserting ‘‘ending with the last day

8 of the eighth consecutive month in which the in9 dividual is at no time so enrolled’’.

10 (B) Paragraphs (1) and (2) of section 1838(e)

11 (42 U.S.C. 1395q(e)) are amended to read as fol12 lows:

13 ‘‘(1) in any month of the special enrollment pe14 riod in which the individual is at any time enrolled

15 in a plan (specified in subparagraph (A) or (B), as

16 applicable, of section 1837(i)(3)) or in the first

17 month following such a month, the coverage period

18 shall begin on the first day of the month in which

19 the individual so enrolls (or, at the option of the in20 dividual, on the first day of any of the following

21 three months), or

22 ‘‘(2) in any other month of the special enroll23 ment period, the coverage period shall begin on the

24 first day of the month following the month in which

25 the individual so enrolls.’’.
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1 (C) The amendments made by subparagraphs

2 (A) and (B) shall take effect on the first day of the

3 first month that begins after the expiration of the

4 120-day period that begins on the date of the enact5 ment of this Act.

6 (2) BLEND AMOUNTS FOR AMBULATORY SUR7 GICAL CENTER PAYMENTS.—Subclauses (I) and (II)

8 of section 1833(i)(3)(B)(ii) (42 U.S.C.

9 1395l(i)(3)(B)(ii)) are each amended—

10 (A) by striking ‘‘for reporting’’ and insert11 ing ‘‘for portions of cost reporting’’; and

12 (B) by striking ‘‘and on or before’’ and in13 serting ‘‘and ending on or before’’.

14 (3) CLINICAL DIAGNOSTIC LABORATORY TESTS

15 (SECTION 4154 OF OBRA–1990).—Section 4154(e)(5)

16 of OBRA–1990 is amended by striking ‘‘(1)(A)’’ and

17 inserting ‘‘(1)(A),’’.

18 (4) SEPARATE PAYMENT UNDER PART B FOR

19 CERTAIN SERVICES (SECTION 4157 OF OBRA–1990).—

20 Section 4157(a) of OBRA–1990 is amended by

21 striking ‘‘(a) SERVICES OF’’ and all that follows

22 through ‘‘Section’’ and inserting ‘‘(a) TREATMENT

23 OF SERVICES OF CERTAIN HEALTH PRACTITION24 ERS.—Section’’.
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1 (5) COMMUNITY HEALTH CENTERS AND RURAL

2 HEALTH CLINICS (SECTION 4161 OF OBRA–1990).—

3 (A) The fourth sentence of section 1861(aa)(2) (42

4 U.S.C. 1395x(aa)(2)) is amended—

5 (i) by striking ‘‘certification’’ the first

6 place it appears and inserting ‘‘approval’’; and

7 (ii) by striking ‘‘the Secretary’s approval

8 or disapproval of the certification’’ and insert9 ing ‘‘Secretary’s approval or disapproval’’.

10 (B) Section 4161(a)(7)(B) of OBRA–1990 is

11 amended by inserting ‘‘and to the Committee on Fi12 nance of the Senate’’ after ‘‘Representatives’’.

13 (6) SCREENING MAMMOGRAPHY (SECTION 4163

14 OF OBRA–1990).—Section 4163 of OBRA–1990 is

15 amended—

16 (A) by adding at the end of subsection (d)

17 the following new paragraph:

18 ‘‘(3) The amendment made by paragraph

19 (2)(A)(iv) shall apply to screening pap smears per20 formed on or after July 1, 1990.’’; and

21 (B) in subsection (e), by striking ‘‘The

22 amendments’’ and inserting ‘‘Except as pro23 vided in subsection (d)(3), the amendments’’.

24 (7) INJECTABLE DRUGS FOR TREATMENT OF

25 OSTEOPOROSIS.—
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1 (A) CLARIFICATION OF DRUGS COV2 ERED.—The section 1861(jj) (42 U.S.C.

3 1395x(jj)) inserted by section 4156(a)(2) of

4 OBRA–1990 is amended—

5 (i) in the matter preceding paragraph

6 (1), by striking ‘‘a bone fracture related

7 to’’; and

8 (ii) in paragraph (1), by striking ‘‘pa9 tient’’ and inserting ‘‘individual has suf10 fered a bone fracture related to post-meno11 pausal osteoporosis and that the individ12 ual’’.

13 (B) LIMITING COVERAGE TO DRUGS PRO14 VIDED BY HOME HEALTH AGENCIES.—(i) The

15 section 1861(jj) (42 U.S.C. 1395x(jj)) inserted

16 by section 4156(a)(2) of OBRA–1990 is

17 amended by striking ‘‘if’’ and inserting ‘‘by a

18 home health agency if’’.

19 (ii) Section 1861(m)(5) (42 U.S.C.

20 1395x(m)(5)) is amended by striking ‘‘but ex21 cluding’’ and inserting ‘‘and a covered

22 osteoporosis drug (as defined in subsection

23 (kk), but excluding other’’.

24 (iii) Section 1861(s)(2) (42 U.S.C.

25 1395x(s)(2)) is amended—
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1 (I) by adding ‘‘and’’ at the end of

2 subparagraph (N), and

3 (II) by striking subparagraph (O) and

4 redesignating subparagraph (P) as sub5 paragraph (O).

6 (C) PAYMENT BASED ON REASONABLE

7 COST.—Section 1833(a)(2) (42 U.S.C.

8 1395l(a)(2)) is amended—

9 (i) in subparagraph (A), by striking

10 ‘‘health services’’ and inserting ‘‘health

11 services (other than covered osteoporosis

12 drug (as defined in section 1861(kk)))’’;

13 (ii) by striking ‘‘and’’ at the end of

14 subparagraph (D);

15 (iii) by striking the semicolon at the

16 end and inserting ‘‘; and’’; and

17 (iv) by adding at the end the following

18 new subparagraph:

19 ‘‘(F) with respect to covered osteoporosis

20 drug (as defined in section 1861(kk)) furnished

21 by a home health agency, 80 percent of the rea22 sonable cost of such service, as determined

23 under section 1861(v);’’.

24 (D) APPLICATION OF PART B DEDUCT25 IBLE.—Section 1833(b)(2) (42 U.S.C.
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1 1395l(b)(2)) is amended by striking ‘‘services’’

2 and inserting ‘‘services (other than covered

3 osteoporosis drug (as defined in section

4 1861(kk)))’’.

5 (E) COVERED OSTEOPOROSIS DRUG (SEC6 TION 4156 OF OBRA–1990).—Section 1861 (42

7 U.S.C. 1395x) is amended, in the subsection

8 (jj) inserted by section 4156(a)(2) of OBRA–

9 1990, by striking ‘‘(jj) The term’’ and inserting

10 ‘‘(kk) The term’’.

11 (8) OTHER MISCELLANEOUS AND TECHNICAL

12 CORRECTIONS (SECTION 4164 OF OBRA–1990).—

13 (A) OWNERSHIP DISCLOSURE REQUIRE14 MENTS.—(i) Section 1124A(a)(2)(A) (42

15 U.S.C. 1320a–3a(a)(2)(A)) is amended by

16 striking ‘‘of the Social Security Act’’.

17 (ii) Section 4164(b)(4) of OBRA–1990 is

18 amended by striking ‘‘paragraph’’ and inserting

19 ‘‘paragraphs’’.

20 (B) DIRECTORY OF UNIQUE PHYSICIAN

21 IDENTIFIER NUMBERS.—Section 4164(c) of

22 OBRA–1990 is amended by striking ‘‘publish’’

23 and inserting ‘‘publish, and shall periodically

24 update,’’.
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1 (g) EFFECTIVE DATE.—Except as otherwise provided

2 in this section, the amendments made by this section shall

3 take effect as if included in the enactment of OBRA–1990.

4 CHAPTER 2—PROVISIONS RELATING TO

5 PARTS A AND B

6 SEC. 5071. ELIMINATION OF ADD-ON FOR OVERHEAD OF

7 HOSPITAL-BASED HOME HEALTH AGENCIES.

8 (a) GENERAL RULE.—The first sentence of section

9 1861(v)(1)(L)(ii) (42 U.S.C. 1395x(v)(1)(L)(ii)) is

10 amended by striking ‘‘, with appropriate adjustment for

11 administrative and general costs of hospital-based agen12 cies’’.

13 (b) EFFECTIVE DATE.—The amendment made by

14 subsection (a) applies to cost reporting periods beginning

15 after fiscal year 1993.

16 SEC. 5072. STUDY AND REPORT ON MEDICARE GME PAY17 MENTS.

18 (a) STUDY.—The Secretary of Health and Human

19 Services shall conduct a study of the methodology used

20 to determine payments to hospitals under the medicare

21 program for the costs of medical residency training pro22 grams and shall include in the study an analysis of the

23 causes of variation among such programs in the per resi24 dent costs of direct graduate medical education, including
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1 the extent of support for such programs from non-hospital

2 sources.

3 (b) REPORT.—Not later than 1 year after the date

4 of the enactment of this Act, the Secretary shall submit

5 a report to Congress on the study conducted under sub6 section (a), and shall include in the report any rec7 ommendations considered appropriate by the Secretary for

8 modifications to the methodology used to determine pay9 ments to hospitals under the medicare program for the

10 costs of medical residency training programs that will en11 courage greater uniformity among medical residency train12 ing programs in the per resident costs of direct graduate

13 medical education.

14 SEC. 5073. MEDICARE AS SECONDARY PAYER.

15 (a) EXTENSION OF DATA MATCH PROGRAM.—Sec16 tion 1862(b)(5)(C)(iii) (42 U.S.C. 1395y(b)(5)(C)(iii)) is

17 amended by striking ‘‘1995’’ and inserting ‘‘1998’’.

18 (b) PERMANENT APPLICATION TO DISABLED INDI19 VIDUALS.—Section 1862(b)(1)(B) (42 U.S.C.

20 1395y(b)(1)(B)) is amended by striking clause (iii).

21 (c) APPLICATION OF ESRD RULES TO CERTAIN

22 AGED AND DISABLED BENEFICIARIES AND EXTENSION

23 OF APPLICATION OF 18-MONTH RULE.—
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1 (1) Subparagraphs (A)(iv) and (B)(ii) of section

2 1862(b)(1) (42 U.S.C. 1395y(b)(1)) are each

3 amended—

4 (A) by striking ‘‘Clause (i) shall not apply’’

5 and inserting ‘‘Subparagraph (C) shall apply

6 instead of clause (i)’’, and

7 (B) by inserting ‘‘(without regard to enti8 tlement under section 226)’’ after ‘‘or’’ the sec9 ond place it appears.

10 (2) The second sentence of section

11 1862(b)(1)(C) is amended by striking ‘‘on or before

12 January 1, 1996’’ and inserting ‘‘before October 1,

13 1998’’.

14 (d) UNIFORM RULES FOR SIZE OF EMPLOYER.—

15 (1) IN GENERAL.—Section 1862(b)(1) (42

16 U.S.C. 1395y(b)(1)) is amended by adding at the

17 end the following:

18 ‘‘(E) GENERAL PROVISIONS.—

19 ‘‘(i) EXCLUSION OF GROUP HEALTH

20 PLAN OF A SMALL EMPLOYER.—Subpara21 graphs (A) through (C) do not apply to a

22 group health plan unless the plan is a plan

23 of, or contributed to by, an employer or

24 employee organization that has 20 or more

25 individuals in current employment status
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1 for each working day in each of 20 or more

2 calendar weeks in the current calendar

3 year or the preceding calendar year.

4 ‘‘(ii) EXCEPTION FOR SMALL EMPLOY5 ERS IN MULTIEMPLOYER OR MULTIPLE

6 EMPLOYER GROUP HEALTH PLANS.—Sub7 paragraphs (A) through (C) also do not

8 apply with respect to individuals enrolled

9 in a multiemployer or multiple employer

10 group health plan if the coverage of the in11 dividuals under the plan is by virtue of

12 current employment status with an em13 ployer that does not have 20 or more indi14 viduals in current employment status for

15 each working day in each of 20 or more

16 calendar weeks in the current calendar

17 year and the preceding calendar year; but

18 the exception provided in this clause ap19 plies only if the plan elects treatment

20 under this clause.

21 ‘‘(iii) APPLICATION OF CONTROLLED

22 GROUP RULES.—For purposes of clauses

23 (i) and (ii)—

24 ‘‘(I) all employees of corporations

25 which are members of a controlled
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1 group of corporations (within the

2 meaning of section 1563(a) of the In3 ternal Revenue Code of 1986, deter4 mined without regard to subsection

5 (a)(4) or (e)(3)(C)), shall be treated

6 as employed by a single employer,

7 ‘‘(II) all employees of trades or

8 businesses (whether or not incor9 porated) which are under common

10 control (under regulations prescribed

11 by the Secretary of the Treasury

12 under section 414(c) of that Code)

13 shall be treated as employed by a sin14 gle employer,

15 ‘‘(III) all employees of the mem16 bers of an affiliated service group (as

17 defined in section 414(m) of that

18 Code) shall be treated as employed by

19 a single employer, and

20 ‘‘(IV) leased employees (as de21 fined in section 414(n)(2) of that

22 Code) shall be treated as employees of

23 the person for whom they perform

24 services to the extent they are so
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1 treated under section 414(n) of that

2 Code.

3 In applying sections of the Internal Reve4 nue Code of 1986 under this clause, the

5 Secretary shall rely upon the regulations

6 and decisions of the Secretary of the

7 Treasury respecting such sections.

8 ‘‘(iv) GROUP HEALTH PLAN DE9 FINED.—For purposes of this subsection,

10 the term ‘group health plan’ has the mean11 ing given such term in section 5000(b) of

12 the Internal Revenue Code of 1986, with13 out regard to section 5000(d) of such

14 Code.

15 ‘‘(v) CURRENT EMPLOYMENT STATUS

16 DEFINED.—For purposes of this sub17 section, an individual has ‘current employ18 ment status’ with an employer if the indi19 vidual is an employee, is the employer, or

20 is associated with the employer in a busi21 ness relationship.

22 ‘‘(vi) TREATMENT OF SELF-EM23 PLOYED PERSONS AS EMPLOYERS.—For

24 purposes of this subsection, the term ‘em25 ployer’ includes a self-employed person.’’.
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1 (2) CONFORMING AMENDMENTS FOR WORKING

2 AGED.—Section 1862(b)(1)(A) (42 U.S.C.

3 1395y(b)(1)(A)) is amended—

4 (A) by amending subclauses (I) and (II) of

5 clause (i) to read as follows:

6 ‘‘(I) may not take into account

7 that an individual (or the individual’s

8 spouse) who is covered under the plan

9 by virtue of the individual’s current

10 employment status with an employer

11 is entitled to benefits under this title

12 under section 226(a), and

13 ‘‘(II) shall provide that any indi14 vidual age 65 or over (and the individ15 ual’s spouse age 65 or older) who is

16 covered under the plan by virtue of

17 the individual’s current employment

18 status with an employer shall be enti19 tled to the same benefits under the

20 plan under the same conditions as any

21 such individual (or spouse) under age

22 65.’’;

23 (B) by striking clauses (ii), (iii), and (v),

24 and
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1 (C) by redesignating clause (iv) as clause

2 (ii).

3 (3) AMENDMENTS FOR DISABLED INDIVID4 UALS.—Section 1862(b) (42 U.S.C. 1395y(b)) is

5 amended—

6 (A) by amending the heading and clause

7 (i) of paragraph (1)(B) to read as follows:

8 ‘‘(B) DISABLED INDIVIDUALS UNDER

9 GROUP HEALTH PLANS.—

10 ‘‘(i) IN GENERAL.—A group health

11 plan may not take into account that an in12 dividual (or a member of the individual’s

13 family) who is covered under the plan by

14 virtue of the individual’s current employ15 ment status with an employer is entitled to

16 benefits under this title under section

17 226(b).’’;

18 (B) by striking clause (iv) of paragraph

19 (1)(B); and

20 (C) in the second sentence of paragraph

21 (2)(A), by striking ‘‘or large group health

22 plan’’.

23 (4) AMENDMENTS FOR INDIVIDUALS WITH

24 ESRD.—Section 1862(b)(1)(C) (42 U.S.C.

25 1395y(b)(1)(C)) is amended—
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1 (A) in the matter preceding clause (i), by

2 striking ‘‘(as defined in subparagraph (A)(v))’’,

3 (B) by striking ‘‘solely’’ each place it ap4 pears,

5 (C) by striking ‘‘by reason of’’ and insert6 ing ‘‘under’’ each place it appears, and

7 (D) by inserting ‘‘or eligible for’’ after ‘‘en8 titled to’’ each place it appears.

9 (e) SECONDARY PAYER EXEMPTION FOR MEMBERS

10 OF RELIGIOUS ORDERS.—Effective as if included in the

11 enactment of OBRA–1989, section 6202(e)(2) of such Act

12 is amended by adding at the end the following: ‘‘Such

13 amendment also shall apply to items and services fur14 nished before such date with respect to secondary payer

15 cases which the Secretary of Health and Human Services

16 had not identified as of such date.’’.

17 (f) IMPROVING IDENTIFICATION OF MEDICARE SEC18 ONDARY PAYER SITUATIONS.—

19 (1) SURVEY OF BENEFICIARIES.—

20 (A) IN GENERAL.—Section 1862(b)(5) (42

21 U.S.C. 1395y(b)(5)) is amended by adding at

22 the end the following new subparagraph:

23 ‘‘(D) OBTAINING INFORMATION FROM

24 BENEFICIARIES.—Before an individual applies

25 for benefits under part A or enrolls under part
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1 B, the Administrator shall mail the individual a

2 questionnaire to obtain information on whether

3 the individual is covered under a primary plan

4 and the nature of the coverage provided under

5 the plan, including the name, address, and iden6 tifying number of the plan.’’.

7 (B) DISTRIBUTION OF QUESTIONNAIRE BY

8 CONTRACTOR.—The Secretary of Health and

9 Human Services shall enter into an agreement

10 with an entity not later than April 1, 1994, to

11 distribute the questionnaire described in section

12 1862(b)(5)(D) of the Social Security Act (as

13 added by subparagraph (A)).

14 (C) NO MEDICARE SECONDARY PAYER DE15 NIAL BASED ON FAILURE TO COMPLETE QUES16 TIONNAIRE.—Section 1862(b)(2) (42 U.S.C.

17 1395y(b)(2)) is amended by adding at the end

18 the following new subparagraph:

19 ‘‘(C) TREATMENT OF QUESTIONNAIRES.—

20 The Secretary may not fail to make payment

21 under subparagraph (A) solely on the ground

22 that an individual failed to complete a question23 naire concerning the existence of a primary

24 plan.’’.
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1 (2) MANDATORY SCREENING BY PROVIDERS

2 AND SUPPLIERS UNDER PART B.—

3 (A) IN GENERAL.—Section 1862(b) (42

4 U.S.C. 1395y(b)) is amended by adding at the

5 end the following new paragraph:

6 ‘‘(6) SCREENING REQUIREMENTS FOR PROVID7 ERS AND SUPPLIERS.—

8 ‘‘(A) IN GENERAL.—Notwithstanding any

9 other provision of this title, no payment may be

10 made for any item or service furnished under

11 part B unless the entity furnishing such item or

12 service completes (to the best of its knowledge

13 and on the basis of information obtained from

14 the individual to whom the item or service is

15 furnished) the portion of the claim form relat16 ing to the availability of other health benefit

17 plans.

18 ‘‘(B) PENALTIES.—An entity that know19 ingly, willfully, and repeatedly fails to complete

20 a claim form in accordance with subparagraph

21 (A) or provides inaccurate information relating

22 to the availability of other health benefit plans

23 on a claim form under such subparagraph shall

24 be subject to a civil money penalty of not to ex25 ceed $2,000 for each such incident. The provi-
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1 sions of section 1128A (other than subsections

2 (a) and (b)) shall apply to a civil money penalty

3 under the previous sentence in the same man4 ner as such provisions apply to a penalty or

5 proceeding under section 1128A(a).’’.

6 (B) EFFECTIVE DATE.—The amendment

7 made by subparagraph (A) shall apply with re8 spect to items and services furnished on or

9 after January 1, 1994.

10 (g) IMPROVEMENTS IN RECOVERY OF PAYMENTS

11 FROM PRIMARY PAYERS.—

12 (1) SUBMISSION OF REPORTS ON EFFORTS TO

13 RECOVER ERRONEOUS PAYMENTS.—Section

14 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended—

15 (A) by striking ‘‘and’’ at the end of sub16 paragraph (H); and

17 (B) by inserting after subparagraph (H)

18 the following new subparagraph:

19 ‘‘(I) will submit annual reports to the Secretary

20 describing the steps taken to recover payments made

21 under this part for items or services for which pay22 ment has been or could be made under a primary

23 plan (as defined in section 1862(b)(2)(A)).’’.

24 (2) REQUIREMENTS UNDER CARRIER PERFORM25 ANCE EVALUATION PROGRAM.—Section 1842(b)(2)
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1 (42 U.S.C. 1395u(b)(2)) is amended by adding at

2 the end the following new subparagraph:

3 ‘‘(D) In addition to any other standards and criteria

4 established by the Secretary for evaluating carrier per5 formance under this paragraph relating to avoiding erro6 neous payments, the Secretary shall establish standards

7 and criteria relating to the carrier’s success in recovering

8 payments made under this part for items or services for

9 which payment has been or could be made under a pri10 mary plan (as defined in section 1862(b)(2)(A)).’’.

11 (3) DEADLINE FOR REIMBURSEMENT BY PRI12 MARY PLANS.—

13 (A) IN GENERAL.—Section

14 1862(b)(2)(B)(i) (42 U.S.C. 1395y(b)(2)(B)(i))

15 is amended by adding at the end the following

16 sentence: ‘‘If reimbursement is not made to the

17 appropriate Trust Fund before the expiration of

18 the 60-day period that begins on the date such

19 notice or other information is received, the Sec20 retary may charge interest (beginning with the

21 date on which the notice or other information

22 is received) on the amount of the reimburse23 ment until reimbursement is made (at a rate

24 determined by the Secretary in accordance with
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1 regulations of the Secretary of the Treasury ap2 plicable to charges for late payments).’’.

3 (B) CONFORMING AMENDMENT.—The

4 heading of clause (i) of section 1862(b)(2)(B) is

5 amended to read as follows: ‘‘REPAYMENT RE6 QUIRED.—’’.

7 (C) EFFECTIVE DATE.—The amendments

8 made by this paragraph shall apply to payments

9 for items and services furnished on or after the

10 date of the enactment of this Act.

11 (4) EFFECTIVE DATE.—The amendments made

12 by paragraphs (1) and (2) shall apply to contracts

13 with fiscal intermediaries and carriers under title

14 XVIII of the Social Security Act for years beginning

15 with 1994.

16 (h) MISCELLANEOUS AND TECHNICAL CORREC17 TIONS.—

18 (1) The sentence in section 1862(b)(1)(C)

19 added by section 4203(c)(1)(B) of OBRA–1990 is

20 amended by striking ‘‘clauses (i) and (ii)’’ and in21 serting ‘‘this subparagraph’’.

22 (2) Effective as if included in the enactment of

23 OBRA–1989, section 1862(b)(1) is amended—

24 (A) in subparagraphs (A)(v) and

25 (B)(iv)(II), by inserting ‘‘, without regard to
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1 section 5000(d) of such Code’’ before the period

2 at the end of each subparagraph;

3 (B) in subparagraph (A)(iii), by striking

4 ‘‘current calendar year or the preceding cal5 endar year’’ and inserting ‘‘current calendar

6 year and the preceding calendar year’’; and

7 (C) in the matter in subparagraph (C)

8 after clause (ii), by striking ‘‘taking into ac9 count that’’ and inserting ‘‘paying benefits sec10 ondary to this title when’’.

11 (3) Section 1862(b)(5)(C)(i) (42 U.S.C.

12 1395y(b)(5)(C)(i)) is amended by striking

13 ‘‘6103(l)(12)(D)(iii)’’ and inserting

14 ‘‘6103(l)(12)(E)(iii)’’.

15 (4) Section 4203(c)(2) of OBRA–1990 is

16 amended—

17 (A) by striking ‘‘the application of clause

18 (iii)’’ and inserting ‘‘the second sentence’’;

19 (B) by striking ‘‘on individuals’’ and all

20 that follows through ‘‘section 226A of such

21 Act’’;

22 (C) in clause (ii), by striking ‘‘clause’’ and

23 inserting ‘‘sentence’’;

24 (D) in clause (v), by adding ‘‘and’’ at the

25 end; and
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1 (E) in clause (vi)—

2 (i) by inserting ‘‘of such Act’’ after

3 ‘‘1862(b)(1)(C)’’, and

4 (ii) by striking the period at the end

5 and inserting the following: ‘‘, without re6 gard to the number of employees covered

7 by such plans.’’.

8 (5) Section 4203(d) of OBRA–1990 is amended

9 by striking ‘‘this subsection’’ and inserting ‘‘this sec10 tion’’.

11 (6) Except as provided in paragraph (2), the

12 amendments made by this subsection shall be effec13 tive as if included in the enactment of OBRA–1990

14 and shall be executed before the amendments made

15 by subsections (a) through (d) of this section.

16 (i) EFFECTIVE DATE.—

17 (1) IN GENERAL.—Except as otherwise pro18 vided in this section, the amendments made by this

19 section shall take effect on the date of the enactment

20 of this Act.

21 (2) ESRD AND UNIFORM SIZE RULES.—The

22 amendments made by subsections (c) and (d) apply

23 to items and services furnished on or after January

24 1, 1994.
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1 SEC. 5074. EXTENSION OF SELF-REFERRAL BAN TO ADDI2 TIONAL SPECIFIED SERVICES.

3 (a) EXTENSION TO DESIGNATED HEALTH SERV4 ICES.—

5 (1) IN GENERAL.—Section 1877 (42 U.S.C.

6 1395nn) is amended—

7 (A) by striking ‘‘clinical laboratory serv8 ices’’ and ‘‘CLINICAL LABORATORY SERVICES’’

9 and inserting ‘‘designated health services’’ and

10 ‘‘DESIGNATED HEALTH SERVICES’’, respectively,

11 each place either appears in subsections (a)(1),

12 (b)(2)(A)(ii), (b)(4), (d)(1), and (d)(3); and

13 (B) by adding at the end the following new

14 subsection:

15 ‘‘(i) DESIGNATED HEALTH SERVICES DEFINED.—In

16 this section, the term ‘designated health services’ means—

17 ‘‘(1) clinical laboratory services;

18 ‘‘(2) physical or occupational therapy services;

19 ‘‘(3) radiology or other diagnostic services;

20 ‘‘(4) radiation therapy services;

21 ‘‘(5) the furnishing of durable medical equip22 ment;

23 ‘‘(6) the furnishing of parenteral and enteral

24 nutrition nutrients, supplies, and equipment;

25 ‘‘(7) home health services; and

26 ‘‘(8) home infusion therapy services.’’.
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1 (2) CONFORMING AMENDMENTS.—Section 1877

2 is further amended—

3 (A) in subsection (g)(1), by striking ‘‘clini4 cal laboratory service’’ and inserting ‘‘des5 ignated health service’’, and

6 (B) in subsection (h)(7)(B), by striking

7 ‘‘clinical laboratory service’’ and inserting ‘‘des8 ignated health service’’.

9 (b) MULTIPLE LOCATIONS FOR GROUP PRAC10 TICES.—Section 1877(b)(2)(A)(ii)(II) (42 U.S.C.

11 1395nn(b)(2)(A)(ii)(II)) is amended by striking ‘‘central12 ized provision’’ and inserting ‘‘provision of some or all’’.

13 (c) TREATMENT OF COMPENSATION ARRANGE14 MENTS.—

15 (1) RENTAL OF OFFICE SPACE AND EQUIP16 MENT.—Paragraph (1) of section 1877(e) (42

17 U.S.C. 1395nn(e)) is amended to read as follows:

18 ‘‘(1) RENTAL OF OFFICE SPACE; RENTAL OF

19 EQUIPMENT.—

20 ‘‘(A) OFFICE SPACE.—Payments made by

21 a lessee to a lessor for the use of premises if—

22 ‘‘(i) the lease is set out in writing,

23 signed by the parties, and specifies the

24 premises covered by the lease,
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1 ‘‘(ii) the aggregate space rented or

2 leased is reasonable and necessary for the

3 legitimate business purposes of the lease or

4 rental and is used exclusively by the lessee

5 when being used by the lessee,

6 ‘‘(iii) the lease provides for a term of

7 rental or lease for at least one year,

8 ‘‘(iv) the rental charges over the term

9 of the lease are set in advance, are consist10 ent with fair market value, and are not de11 termined in a manner that takes into ac12 count the volume or value of any referrals

13 or other business generated between the

14 parties,

15 ‘‘(v) the lease would be commercially

16 reasonable even if no referrals were made

17 between the parties,

18 ‘‘(vi) the lease covers all of the prem19 ises leased between the parties for the pe20 riod of the lease, and

21 ‘‘(vii) the compensation arrangement

22 meets such other requirements as the Sec23 retary may impose by regulation as needed

24 to protect against program or patient

25 abuse.
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1 ‘‘(B) EQUIPMENT.—Payments made by a

2 lessee of equipment to the lessor of the equip3 ment for the use of the equipment if—

4 ‘‘(i) the lease is set out in writing,

5 signed by the parties, and specifies the

6 equipment covered by the lease,

7 ‘‘(ii) the equipment rented or leased is

8 reasonable and necessary for the legitimate

9 business purposes of the lease or rental

10 and is used exclusively by the lessee when

11 being used by the lessee,

12 ‘‘(iii) the lease provides for a term of

13 rental or lease of at least one year,

14 ‘‘(iv) the rental charges over the term

15 of the lease are set in advance, are consist16 ent with fair market value, and are not de17 termined in a manner that takes into ac18 count the volume or value of any referrals

19 or other business generated between the

20 parties,

21 ‘‘(v) the lease would be commercially

22 reasonable even if no referrals were made

23 between the parties,
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1 ‘‘(vi) the lease covers all of the equip2 ment leased between the parties for the pe3 riod of the lease, and

4 ‘‘(vii) the compensation arrangement

5 meets such other requirements as the Sec6 retary may impose by regulation as needed

7 to protect against program or patient

8 abuse.’’.

9 (2) BONA FIDE EMPLOYMENT RELATION10 SHIPS.—Section 1877(e)(2) (42 U.S.C.

11 1395nn(e)(2)) is amended—

12 (A) by striking ‘‘AND SERVICE’’ and ‘‘WITH

13 HOSPITALS’’;

14 (B) by striking ‘‘An arrangement’’ and all

15 that follows through ‘‘if’’ and inserting ‘‘Any

16 amount paid by an employer to a physician (or

17 immediate family member) who has a bona fide

18 employment relationship with the employer for

19 the provision of services if’’;

20 (C) in subparagraphs (A), (B), and (D), by

21 striking ‘‘arrangement’’ and inserting ‘‘employ22 ment’’;

23 (D) in subparagraph (C), by striking ‘‘to

24 the hospital’’; and

25 (E) by adding at the end the following:
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1 ‘‘Subparagraph (B)(ii) shall not be construed as pro2 hibiting the payment of remuneration in the form of

3 shares of overall profits or in the form of a produc4 tivity bonus based on services performed personally

5 by the physician or member, if the amount of the re6 muneration is not determined in a manner that

7 takes into account directly the volume or value of

8 any referrals by the referring physician.’’.

9 (3) PERSONAL SERVICE ARRANGEMENTS.—Sec10 tion 1877(e) is further amended by adding at the

11 end the following new paragraph:

12 ‘‘(7) PERSONAL SERVICE ARRANGEMENTS.—Re13 muneration from an entity under an arrangement

14 if—

15 ‘‘(A) the arrangement is set out in writing,

16 signed by the parties, and specifies the services

17 covered by the arrangement,

18 ‘‘(B) the arrangement covers all of the

19 services to be provided,

20 ‘‘(C) the aggregate services contracted for

21 do not exceed those that are reasonable and

22 necessary for the legitimate business purposes

23 of the arrangement,

24 ‘‘(D) the term of the arrangement is for at

25 least one year,
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1 ‘‘(E) the compensation to be paid over the

2 term of the arrangement is set in advance, does

3 not exceed fair market value, and is not deter4 mined in a manner that takes into account the

5 volume or value of any referrals or other busi6 ness generated between the parties,

7 ‘‘(F) the services to be performed under

8 the arrangement do not involve the counseling

9 or promotion of a business arrangement of

10 other activity that violates any State or Federal

11 law, and

12 ‘‘(G) the arrangement meets such other re13 quirements as the Secretary may impose by reg14 ulation as needed to protect against program or

15 patient abuse.’’.

16 (4) ADDITIONAL EXCEPTIONS.—Section

17 1877(e) is further amended by adding at the end the

18 following new paragraphs:

19 ‘‘(8) PAYMENTS BY A PHYSICIAN FOR ITEMS

20 AND SERVICES.—Payments made by a physician—

21 ‘‘(A) to a laboratory in exchange for the

22 provision of clinical laboratory services, or

23 ‘‘(B) to an entity as compensation for

24 other items or services if the items or services
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1 are furnished at a price that is consistent with

2 fair market value.

3 ‘‘(9) PAYMENTS FOR PATHOLOGY SERVICES OF

4 A GROUP PRACTICE.—Payments made to a group

5 practice for pathology services under an agreement

6 if—

7 ‘‘(A) the agreement is set out in writing

8 and specifies the services to be provided by the

9 parties and the compensation for services pro10 vided under the agreement,

11 ‘‘(B) the compensation paid over the term

12 of the agreement is consistent with fair market

13 value and is not determined in a manner that

14 takes into account the volume or value of any

15 referrals or other business generated between

16 the parties,

17 ‘‘(C) the compensation is provided pursu18 ant to an agreement which would be commer19 cially reasonable even if no referrals were made

20 to the entity, and

21 ‘‘(D) the compensation arrangement be22 tween the parties meets such other require23 ments as the Secretary may impose by regula24 tion as needed to protect against program or

25 patient abuse.’’.
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1 (4) REFERRING PHYSICIANS.—Section

2 1877(h)(7)(C) (42 U.S.C. 1395nn(h)(7)(C)) is

3 amended—

4 (A) by inserting ‘‘a request by a radiologist

5 for diagnostic radiology services, and a request

6 by a radiation oncologist for radiation therapy,’’

7 after ‘‘examination services,’’, and

8 (B) by inserting ‘‘, radiologist, or radiation

9 oncologist’’ after ‘‘pathologist’’ the second place

10 it appears.

11 (d) TREATMENT OF GROUP PRACTICES.—

12 (1) USE OF BILLING NUMBERS, ETC.—Section

13 1877 is amended—

14 (A) in subsection (b)(2)(B), by inserting

15 ‘‘under a billing number assigned to the group

16 practice’’ after ‘‘member’’,

17 (B) in subsection (h)(4)(B), by inserting

18 ‘‘and under a billing number assigned to the

19 group’’ after ‘‘in the name of the group’’, and

20 (C) in subsection (h)(4)(C), by striking

21 ‘‘by members of the group’’.

22 (2) TREATMENT OF SERVICES UNDER AR23 RANGEMENTS BETWEEN HOSPITALS AND GROUP

24 PRACTICES.—
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1 (A) IN GENERAL.—Section 1877(h)(4) (42

2 U.S.C. 1395nn(h)(4)) is amended—

3 (i) in subparagraph (B) (as amended

4 by paragraph (1)(B)), by inserting ‘‘(or

5 are billed in the name of a hospital for

6 which the group provides designated health

7 services pursuant to an arrangement that

8 meets the requirements of subparagraph

9 (B))’’ after ‘‘assigned to the group’’;

10 (ii) by redesignating subparagraphs

11 (A) through (D) as clauses (i) through

12 (iv), respectively;

13 (iii) by inserting ‘‘(A)’’ after ‘‘.—’’;

14 and

15 (iv) by adding at the end the following

16 new subparagraph:

17 ‘‘(B) The requirements of this subparagraph,

18 with respect to an arrangement for designated

19 health services provided by the group and billed in

20 the name of a hospital, are that—

21 ‘‘(i) with respect to services provided to an

22 inpatient of the hospital, the arrangement is

23 pursuant to the provision of inpatient hospital

24 services under section 1861(b)(3);
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1 ‘‘(ii) the arrangement began before Decem2 ber 19, 1989, and has continued in effect with3 out interruption since such date;

4 ‘‘(iii) the group provides substantially all of

5 the designated health services to the hospital’s

6 patients;

7 ‘‘(iv) the arrangement is pursuant to an

8 agreement that is set out in writing and that

9 specifies the services to be provided by the par10 ties and the compensation for services provided

11 under the agreement;

12 ‘‘(v) the compensation paid over the term

13 of the agreement is consistent with fair market

14 value and the compensation per unit of services

15 is fixed in advance and is not determined in a

16 manner that takes into account the volume or

17 value of any referrals or other business gen18 erated between the parties;

19 ‘‘(vi) the compensation is provided pursu20 ant to an agreement which would be commer21 cially reasonable even if no referrals were made

22 to the entity; and

23 ‘‘(vii) the arrangement between the parties

24 meets such other requirements as the Secretary
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1 may impose by regulation as needed to protect

2 against program or patient abuse.’’.

3 (B) CONFORMING AMENDMENT.—Section

4 1877(b)(2)(B) (42 U.S.C. 1395nn(b)(2)(B)) is

5 amended by inserting ‘‘(or by a hospital for

6 which such a group practice provides designated

7 health services pursuant to an arrangement

8 that meets the requirements of subsection

9 (h)(4)(B))’’ before ‘‘, or by an entity’’.

10 (3) TREATMENT OF CERTAIN FACULTY PRAC11 TICE PLANS.—The last sentence of section

12 1877(h)(4)(A) (42 U.S.C. 1395nn(h)(4)(A)), as re13 designated by paragraph (2)(A), is amended by in14 serting ‘‘, institution of higher education, or medical

15 school’’ after ‘‘hospital’’.

16 (e) EXPANDING RURAL PROVIDER EXCEPTION TO

17 COVER COMPENSATION ARRANGEMENTS.—

18 (1) IN GENERAL.—Section 1877(b) (42 U.S.C.

19 1395nn(b)) is amended—

20 (A) by redesignating paragraph (5) as

21 paragraph (7), and

22 (B) by inserting after paragraph (4) the

23 following new paragraph:

24 ‘‘(5) RURAL PROVIDERS.—In the case of des25 ignated services if—
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1 ‘‘(A) the entity furnishing the services is in

2 a rural area (as defined in section

3 1886(d)(2)(D)), and

4 ‘‘(B) substantially all of the services fur5 nished by the entity to individuals entitled to

6 benefits under this title are furnished to such

7 individuals who reside in such a rural area.’’.

8 (2) CONFORMING AMENDMENTS.—Section

9 1877(d) (42 U.S.C. 1395nn(d)) is amended—

10 (A) by striking paragraph (2), and

11 (B) by redesignating paragraph (3) as

12 paragraph (2).

13 (f) EXCEPTION FOR SHARED FACILITY LABORATORY

14 SERVICES.—

15 (1) IN GENERAL.—Section 1877 is amended—

16 (A) in subsection (b), as amended by sub17 section (e)(1), by inserting after paragraph (5)

18 the following new paragraph:

19 ‘‘(6) SHARED FACILITY LABORATORY SERV20 ICES.—

21 ‘‘(A) IN GENERAL.—In the case of shared

22 facility laboratory services of a shared facility—

23 ‘‘(i) that are furnished—

24 ‘‘(I) personally by the referring

25 physician who is a shared facility phy-
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1 sician or personally by an individual

2 supervised by such a physician or by

3 another shared facility physician and

4 employed under the shared facility ar5 rangement,

6 ‘‘(II) by a shared facility in a

7 building in which the referring physi8 cian furnishes physician’s services un9 related to the furnishing of shared fa10 cility laboratory services, and

11 ‘‘(III) to a patient of a shared fa12 cility physician; and

13 ‘‘(ii) that are billed by the referring

14 physician or by an entity that is wholly

15 owned by such physician.

16 ‘‘(B) LIMITATION.—The exception under

17 this paragraph shall only apply to a shared fa18 cility only if the facility and the shared facility

19 arrangement were established as of June 26,

20 1992.’’; and

21 (B) in subsection (h), by adding at the end

22 the following new paragraph:

23 ‘‘(8) SHARED FACILITY RELATED DEFINI24 TIONS.—
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1 ‘‘(A) SHARED FACILITY LABORATORY

2 SERVICES.—The term ‘shared facility laboratory

3 services’ means, with respect to a shared facil4 ity, clinical laboratory services furnished by the

5 facility to patients of shared facility physicians.

6 ‘‘(B) SHARED FACILITY.—The term

7 ‘shared facility’ means an entity that furnishes

8 shared facility laboratory services under a

9 shared facility arrangement.

10 ‘‘(C) SHARED FACILITY PHYSICIAN.—The

11 term ‘shared facility physician’ means, with re12 spect to a shared facility, a physician who has

13 a financial relationship under a shared facility

14 arrangement with the facility.

15 ‘‘(D) SHARED FACILITY ARRANGEMENT.—

16 The term ‘shared facility arrangement’ means,

17 with respect to the provision of shared facility

18 laboratory services in a building, a financial

19 arrangement—

20 ‘‘(i) which is only between physicians

21 who are providing services (unrelated to

22 shared facility laboratory services) in the

23 same building,

24 ‘‘(ii) in which the overhead expenses

25 of the facility are shared, in accordance
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1 with methods previously determined by the

2 physicians in the arrangement, among the

3 physicians in the arrangement, and

4 ‘‘(iii) which, in the case of a corpora5 tion, is wholly owned and controlled by

6 shared facility physicians.’’.

7 (2) GAO STUDY OF SHARED FACILITY AR8 RANGEMENTS.—

9 (A) IN GENERAL.—The Comptroller Gen10 eral shall analyze the effect on the utilization of

11 health services of shared facility arrangements

12 for which an exception is provided under the

13 amendments made by paragraph (1). The anal14 ysis shall include a review of the effect of the

15 limitation, described in section 1877(b)(6)(B) of

16 the Social Security Act (as added by paragraph

17 (1)), with respect to such exception and on the

18 availability of services (including hematology

19 services).

20 (B) REPORT.—Not later than January 1,

21 1995, the Comptroller General shall submit a

22 report to Congress on the analysis conducted

23 under subparagraph (A). The report shall in24 clude recommendations with respect to chang25 ing the limitation.
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1 (g) EXEMPTION OF COMPENSATION ARRANGEMENTS

2 INVOLVING CERTAIN TYPES OF REMUNERATION.—Sec3 tion 1877(h)(1) (42 U.S.C. 1395nn(h)(1)) is amended—

4 (1) by striking subparagraph (B);

5 (2) in subparagraph (A), by inserting before the

6 period the following: ‘‘(other than an arrangement

7 involving only remuneration described in subpara8 graph (B))’’; and

9 (3) by adding at the end the following new sub10 paragraph:

11 ‘‘(B) Remuneration described in this subpara12 graph is any remuneration consisting of any of the

13 following:

14 ‘‘(i) The forgiveness of amounts owed for

15 inaccurate tests or procedures, mistakenly per16 formed tests or procedures, or the correction of

17 minor billing errors.

18 ‘‘(ii) The provision of items, devices, or

19 supplies that are used solely to—

20 ‘‘(I) collect, transport, process, or

21 store specimens for the entity providing

22 the item, device, or supply, or

23 ‘‘(II) communicate the results of tests

24 or procedures for such entity.’’.
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1 (h) EXCEPTION FOR PUBLICLY-TRADED SECURI2 TIES.—Section 1877(c)(2) (42 U.S.C. 1395nn(d)(2)) is

3 amended by striking ‘‘total assets exceeding

4 $100,000,000’’ and inserting ‘‘stockholder equity exceed5 ing $75,000,000’’.

6 (i) MISCELLANEOUS AND TECHNICAL CORREC7 TIONS.—Section 1877 (42 U.S.C. 1395nn) is amended—

8 (1) in subsection (b)(2)(A)(i), in subparagraph

9 (A)(i), by striking ‘‘who are employed by such physi10 cian or group practice and who are personally’’ and

11 inserting ‘‘who are directly’’;

12 (2) in the fourth sentence of subsection (f)—

13 (A) by striking ‘‘provided’’ and inserting

14 ‘‘furnished’’, and

15 (B) by striking ‘‘provides’’ and inserting

16 ‘‘furnish’’;

17 (3) in the fifth sentence of subsection (f)—

18 (A) by striking ‘‘providing’’ each place it

19 appears and inserting ‘‘furnishing’’,

20 (B) by striking ‘‘with respect to the provid21 ers’’ and inserting ‘‘with respect to the enti22 ties’’, and

23 (C) by striking ‘‘diagnostic imaging serv24 ices of any type’’ and inserting ‘‘magnetic reso-
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1 nance imaging, computerized axial tomography

2 scans, and ultrasound services’’; and

3 (4) in subsection (a)(2)(B), by striking ‘‘sub4 section (h)(1)(A)’’ and inserting ‘‘subsection (h)(1)’’.

5 (j) EFFECTIVE DATES.—

6 (1) The amendments made by subsection (a)

7 apply with respect to a referral by a physician for

8 designated health services (as described in section

9 1877(i) of the Social Security Act) made after De10 cember 31, 1994.

11 (2) The amendments made by this section

12 (other than subsection (a)) shall apply to referrals

13 made on or after January 1, 1992.

14 SEC. 5075. REDUCTION IN PAYMENT FOR ERYTHRO15 POIETIN.

16 (a) IN GENERAL.—Section 1881(b)(11)(B)(ii)(I) (42

17 U.S.C. 1395rr(b)(11)(B)(ii)(I)) is amended—

18 (1) by striking ‘‘1991’’ and inserting ‘‘1994’’,

19 and

20 (2) by striking ‘‘$11’’ and inserting ‘‘$10’’.

21 (b) EFFECTIVE DATE.—The amendments made by

22 subsection (a) apply to erythropoietin furnished after

23 1993.
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1 SEC. 5076. MEDICARE HOSPITAL AGREEMENTS WITH

2 ORGAN PROCUREMENT ORGANIZATIONS.

3 (a) IN GENERAL.—Section 1138(a)(1) (42 U.S.C.

4 1320b–8(a)(1)) is amended—

5 (1) by striking ‘‘and’’ at the end of subpara6 graph (A),

7 (2) by striking the period at the end of sub8 paragraph (B) and inserting ‘‘; and’’, and

9 (3) by adding at the end the following new sub10 paragraph:

11 ‘‘(C) in the case of a hospital or rural primary

12 care hospital that has in effect an agreement (de13 scribed in section 371(b)(3)(A) of the Public Health

14 Service Act) with an organ procurement organiza15 tion, the agreement is with such organization for the

16 service area in which the hospital is located (as es17 tablished under such section).’’.

18 (b) EFFECTIVE DATE.—The amendments made by

19 subsection (a) shall apply to hospitals participating in the

20 programs under titles XVIII and XIX of the Social Secu21 rity Act as of January 1, 1994.

22 SEC. 5077. EXTENSION OF WAIVER FOR WATTS HEALTH

23 FOUNDATION.

24 Section 9312(c)(3)(D) of OBRA–1986, as added by

25 section 4018(d) of OBRA–1987 and as amended by sec-
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1 tion 6212(a)(1) of OBRA–1989, is amended by striking

2 ‘‘1994’’ and inserting ‘‘1996’’.

3 SEC. 5078. IMPROVED OUTREACH FOR QUALIFIED MEDI4 CARE BENEFICIARIES.

5 The Secretary of Health and Human Services shall

6 establish and implement a method for obtaining informa7 tion from newly eligible medicare beneficiaries that may

8 be used to determine whether such beneficiaries may be

9 eligible for medical assistance for medicare cost-sharing

10 under State medicaid plans as qualified medicare bene11 ficiaries, and for transmitting such information to the

12 State in which such a beneficiary resides.

13 SEC. 5079. SOCIAL HEALTH MAINTENANCE ORGANIZA14 TIONS.

15 (a) EXTENSION OF CURRENT WAIVERS.—Section

16 4018(b) of OBRA–1987, as amended by section

17 4207(b)(4) of OBRA–1990, is amended—

18 (1) in paragraph (1) by striking ‘‘December 31,

19 1995’’ and inserting ‘‘December 31, 1997’’; and

20 (2) in paragraph (4) by striking ‘‘March 31,

21 1996’’ and inserting ‘‘March 31, 1998’’.

22 (b) EXPANSION OF DEMONSTRATIONS.—Section

23 2355 of the Deficit Reduction Act of 1984, as amended

24 by section 4207(b)(4)(B) of OBRA–1990, is amended—
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1 (1) in the last sentence of subsection (a) by

2 striking ‘‘12 months’’ and inserting ‘‘36 months’’;

3 and

4 (2) in subsection (b)(1)(B)—

5 (A) by striking ‘‘or’’ at the end of clause

6 (iii), and

7 (B) by redesignating clause (iv) as clause

8 (v) and inserting after clause (iii) the following

9 new clause:

10 ‘‘(iv) integrating acute and chronic

11 care management for patients with end12 stage renal disease through expanded com13 munity care case management services

14 (and for purposes of a demonstration

15 project conducted under this clause, any

16 requirement under a waiver granted under

17 this section that a project disenroll individ18 uals who develop end-stage renal disease

19 shall not apply); or’’.

20 (c) EXPANSION OF NUMBER OF MEMBERS PER

21 SITE.—The Secretary of Health and Human Services may

22 not impose a limit of less than 12,000 on the number of

23 individuals that may participate in a project conducted

24 under section 2355 of the Deficit Reduction Act of 1984.
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1 (d) MISCELLANEOUS AND TECHNICAL CORREC2 TIONS.—

3 (1) The section following section 4206 of

4 OBRA–1990 is amended by striking ‘‘SEC. 4027.’’

5 and inserting ‘‘SEC. 4207.’’, and in this subtitle is

6 referred to as section 4207 of OBRA–1990.

7 (2) Section 2355(b)(1)(B) of the Deficit Reduc8 tion Act of 1984, as amended by section

9 4207(b)(4)(B)(ii) of OBRA–1990, is amended—

10 (A) by striking ‘‘12907(c)(4)(A)’’ and in11 serting ‘‘4207(b)(4)(B)(i)’’, and

12 (B) by striking ‘‘feasibilitly’’ and inserting

13 ‘‘feasibility’’.

14 (3) Section 4207(b)(4)(B)(iii)(III) of OBRA–

15 1990 is amended by striking the period at the end

16 and inserting a semicolon.

17 (4) Subsections (c)(3) and (e) of section 2355

18 of the Deficit Reduction Act of 1984, as amended by

19 section 4207(b)(4)(B) of OBRA–1990, are each

20 amended by striking ‘‘12907(c)(4)(A)’’ each place it

21 appears and inserting ‘‘4207(b)(4)(B)’’.

22 (5) Section 4207(c)(2) of OBRA–1990 is

23 amended by striking ‘‘the Committee on Ways and

24 Means’’ each place it appears and inserting ‘‘the
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1 Committees on Ways and Means and Energy and

2 Commerce’’.

3 (6) Section 4207(d) of OBRA–1990 is amended

4 by redesignating the second paragraph (3) (relating

5 to effective date) as paragraph (4).

6 (7) Section 4207(i)(2) of OBRA–1990 is

7 amended—

8 (A) by striking the period at the end of

9 clause (iii) and inserting a semicolon, and

10 (B) in clause (v), by striking ‘‘residents’’

11 and inserting ‘‘patients’’.

12 (8) Section 4207(j) of OBRA–1990 is amended

13 by striking ‘‘title’’ each place it appears and insert14 ing ‘‘subtitle’’.

15 (e) EFFECTIVE DATE.—The amendments made by

16 this section shall take effect as if included in the enact17 ment of OBRA–1990.

18 SEC. 5080. PEER REVIEW ORGANIZATIONS.

19 (a) REPEAL OF PRO PRECERTIFICATION REQUIRE20 MENT FOR CERTAIN SURGICAL PROCEDURES.—

21 (1) IN GENERAL.—Section 1164 (42 U.S.C.

22 1320c–13) is repealed.

23 (2) CONFORMING AMENDMENTS.—

24 (A) Section 1154 (42 U.S.C. 1320c–3) is

25 amended—
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1 (i) in subsection (a), by striking para2 graph (12), and

3 (ii) in subsection (d), by striking

4 ‘‘(and except as provided in section

5 1164)’’.

6 (B) Section 1833 (42 U.S.C. 1395l) is

7 amended—

8 (i) in subsection (a)(1)(D)(i), by strik9 ing ‘‘, or for tests furnished in connection

10 with obtaining a second opinion required

11 under section 1164(c)(2) (or a third opin12 ion, if the second opinion was in disagree13 ment with the first opinion)’’;

14 (ii) in subsection (a)(1), by striking

15 clause (G);

16 (iii) in subsection (a)(2)(A), by strik17 ing ‘‘to items and services (other than clin18 ical diagnostic laboratory tests) furnished

19 in connection with obtaining a second opin20 ion required under section 1164(c)(2) (or a

21 third opinion, if the second opinion was in

22 disagreement with the first opinion),’’;

23 (iv) in subsection (a)(2)(D)(i)—

24 (I) by striking ‘‘related basis,’’

25 and inserting ‘‘related basis or’’, and
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1 (II) by striking ‘‘, or for tests

2 furnished in connection with obtaining

3 a second opinion required under sec4 tion 1164(c)(2) (or a third opinion, if

5 the second opinion was in disagree6 ment with the first opinion)’’;

7 (v) in subsection (a)(3), by striking

8 ‘‘and for items and services furnished in

9 connection with obtaining a second opinion

10 required under section 1164(c)(2), or a

11 third opinion, if the second opinion was in

12 disagreement with the first opinion)’’; and

13 (vi) in the first sentence of subsection

14 (b), by striking ‘‘(4)’’ and all that follows

15 through ‘‘and (5)’’ and inserting ‘‘and

16 (4)’’.

17 (C) Section 1834(g)(1)(B) (42 U.S.C.

18 1395m(g)(1)(B)) is amended by striking ‘‘and

19 for items and services furnished in connection

20 with obtaining a second opinion required under

21 section 1164(c)(2), or a third opinion, if the

22 second opinion was in disagreement with the

23 first opinion)’’.

24 (D) Section 1862(a) (42 U.S.C. 1395y(a))

25 is amended—
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1 (i) by adding ‘‘or’’ at the end of para2 graph (14),

3 (ii) by striking ‘‘; or’’ at the end of

4 paragraph (15) and inserting a period, and

5 (iii) by striking paragraph (16).

6 (E) The third sentence of section

7 1866(a)(2)(A) (42 U.S.C. 1395w(a)(2)(A)) is

8 amended by striking ‘‘, with respect to items

9 and services furnished in connection with ob10 taining a second opinion required under section

11 1164(c)(2) (or a third opinion, if the second

12 opinion was in disagreement with the first opin13 ion),’’.

14 (3) EFFECTIVE DATE.—The amendments made

15 by this subsection shall apply to services provided on

16 or after the date of the enactment of this Act.

17 (b) MISCELLANEOUS AND TECHNICAL CORREC18 TIONS.—(1) The third sentence of section 1156(b)(1) (42

19 U.S.C. 1320c–5(b)(1)) is amended by striking ‘‘whehter’’

20 and inserting ‘‘whether’’.

21 (2)(A) Subparagraph (B) of section 1154(a)(9) (42

22 U.S.C. 1320c–3(a)(9)) is amended to read as follows:

23 ‘‘(B) If the organization finds, after reasonable

24 notice and opportunity for discussion with the physi25 cian or practitioner concerned, that the physician or
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1 practitioner has furnished services in violation of

2 section 1156(a), the organization shall notify the

3 State board or boards responsible for the licensing

4 or disciplining of the physician or practitioner of its

5 finding and of any action taken as a result of the

6 finding.’’.

7 (B) Subparagraph (D) of section 1160(b)(1) (42

8 U.S.C. 1320c–9(b)(1)) is amended to read as follows:

9 ‘‘(D) to provide notice in accordance with

10 section 1154(a)(9)(B);’’.

11 (3) Section 4205(d)(2)(B) of OBRA–1990 is amend12 ed by striking ‘‘amendments’’ and inserting ‘‘amend13 ment’’.

14 (4) Section 1160(d) (42 U.S.C. 1320c–9(d)) is

15 amended by striking ‘‘subpena’’ and inserting ‘‘subpoena’’.

16 (5) Section 4205(e)(2) of OBRA–1990 is amended

17 by striking ‘‘amendments’’ and inserting ‘‘amendment’’

18 and by striking ‘‘all’’.

19 (6)(A) Except as provided in subparagraph (B), the

20 amendments made by this subsection shall take effect as

21 if included in the enactment of OBRA–1990.

22 (B) The amendments made by paragraph (2) (relat23 ing to the requirement on reporting of information to

24 State boards) shall take effect on the date of the enact25 ment of this Act.
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1 SEC. 5081. HOSPICE INFORMATION TO HOME HEALTH

2 BENEFICIARIES.

3 (a) IN GENERAL.—Section 1891(a)(1) (42 U.S.C.

4 1395bbb(a)(1)) is amended by adding at the end the fol5 lowing new subparagraph:

6 ‘‘(H) The right, in the case of a resident

7 who is entitled to benefits under this title, to be

8 fully informed orally and in writing (at the time

9 of coming under the care of the agency) of the

10 entitlement of individuals to hospice care under

11 section 1812(a)(4) (unless there is no hospice

12 program providing hospice care for which pay13 ment may be made under this title within the

14 geographic area of the facility and it is not the

15 common practice of the agency to refer patients

16 to hospice programs located outside such geo17 graphic area).’’.

18 (b) EFFECTIVE DATE.—The amendment made by

19 subsection (a) shall apply to services furnished on or after

20 the first day of the first month beginning more than one

21 year after the date of the enactment of this Act.

22 SEC. 5082. HEALTH MAINTENANCE ORGANIZATIONS.

23 (a) ADJUSTMENT IN MEDICARE CAPITATION PAY24 MENTS TO ACCOUNT FOR REGIONAL VARIATIONS IN AP25 PLICATION OF SECONDARY PAYER PROVISIONS.—
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1 (1) IN GENERAL.—Section 1876(a)(4) (42

2 U.S.C. 1395mm(a)(4)) is amended by adding at the

3 end the following new sentence: ‘‘In establishing the

4 adjusted average per capita cost for a geographic

5 area, the Secretary shall take into account the dif6 ferences between the proportion of individuals in the

7 area with respect to whom there is a group health

8 plan that is a primary plan (within the meaning of

9 section 1862(b)(2)(A)) compared to the proportion

10 of all such individuals with respect to whom there is

11 such a group health plan.’’.

12 (2) EFFECTIVE DATE.—The amendment made

13 by paragraph (1) shall apply to contracts entered

14 into for years beginning with 1994.

15 (b) REVISIONS IN THE PAYMENT METHODOLOGY

16 FOR RISK CONTRACTORS.—Section 4204(b) of OBRA–

17 1990 is amended to read as follows:

18 ‘‘(b) REVISIONS IN THE PAYMENT METHODOLOGY

19 FOR RISK CONTRACTORS.—(1)(A) Not later than January

20 1, 1995, the Secretary of Health and Human Services (in

21 this subsection referred to as the ‘‘Secretary’’) shall sub22 mit a proposal to the Congress that provides for revisions

23 to the payment method to be applied in years beginning

24 with 1996 for organizations with a risk-sharing contract

25 under section 1876(g) of the Social Security Act.
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1 ‘‘(B) In proposing the revisions required under sub2 paragraph (A) the Secretary shall consider—

3 ‘‘(i) the difference in costs associated with med4 icare beneficiaries with differing health status and

5 demographic characteristics; and

6 ‘‘(ii) the effects of using alternative geographic

7 classifications on the determinations of costs associ8 ated with beneficiaries residing in different areas.

9 ‘‘(2) Not later than 3 months after the date of sub10 mittal of the proposal made pursuant to paragraph (1),

11 the Comptroller General shall review the proposal and

12 shall report to Congress on the appropriateness of the pro13 posed modifications.’’.

14 (c) MISCELLANEOUS AND TECHNICAL CORREC15 TIONS.—(1) Section 1876(a)(3) (42 U.S.C.

16 1395mm(a)(3)) is amended by striking ‘‘subsection

17 (c)(7)’’ and inserting ‘‘subsections (c)(2)(B)(ii) and

18 (c)(7)’’.

19 (2) Section 4204(c)(3) of OBRA–1990 is amended

20 by striking ‘‘for 1991’’ and inserting ‘‘for years beginning

21 with 1991’’.

22 (3) Section 4204(d)(2) of OBRA–1990 is amended

23 by striking ‘‘amendment’’ and inserting ‘‘amendments’’.
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1 (4) Section 1876(a)(1)(E)(ii)(I) (42 U.S.C.

2 1395mm(a)(1)(E)(ii)(I)) is amended by striking the

3 comma after ‘‘contributed to’’.

4 (5) Section 4204(e)(2) of OBRA–1990 is amended

5 by striking ‘‘(which has a risk-sharing contract under sec6 tion 1876 of the Social Security Act)’’.

7 (6) Section 4204(f)(4) of OBRA–1990 is amended by

8 striking ‘‘final’’.

9 (7) Section 1862(b)(3)(C) (42 U.S.C.

10 1395y(b)(3)(C)) is amended—

11 (A) in the heading, by striking ‘‘PLAN’’ and in12 serting ‘‘PLAN OR A LARGE GROUP HEALTH PLAN’’;

13 (B) by striking ‘‘group health plan’’ and insert14 ing ‘‘group health plan or a large group health

15 plan’’;

16 (C) by striking ‘‘, unless such incentive is also

17 offered to all individuals who are eligible for cov18 erage under the plan’’; and

19 (D) by striking ‘‘the first sentence of subsection

20 (a) and other than subsection (b)’’ and inserting

21 ‘‘subsections (a) and (b)’’.

22 (8) The amendments made by this subsection shall

23 take effect as if included in the enactment of OBRA–1990.
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1 SEC. 5083. MISCELLANEOUS AND TECHNICAL CORREC2 TIONS.

3 (a) SURVEY AND CERTIFICATION REQUIREMENTS.—

4 (1) Section 1864 (42 U.S.C. 1395aa) is amended—

5 (A) in subsection (e), by striking ‘‘title’’ and in6 serting ‘‘title (other than any fee relating to section

7 353 of the Public Health Service Act)’’; and

8 (B) in the first sentence of subsection (a), by

9 striking ‘‘1861(s) or’’ and all that follows through

10 ‘‘Service Act,’’ and inserting ‘‘1861(s),’’.

11 (2) An agreement made by the Secretary of Health

12 and Human Services with a State under section 1864(a)

13 of the Social Security Act may include an agreement that

14 the services of the State health agency or other appro15 priate State agency (or the appropriate local agencies) will

16 be utilized by the Secretary for the purpose of determining

17 whether a laboratory meets the requirements of section

18 353 of the Public Health Service Act.

19 (b) OTHER MISCELLANEOUS AND TECHNICAL PRO20 VISIONS.—(1) Section 1833 (42 U.S.C. 1395l) is amended

21 by redesignating the subsection (r) added by section

22 4206(b)(2) of OBRA–1990 as subsection (s).

23 (2) Section 1866(f)(1) (42 U.S.C. 1395cc(f)(1)) is

24 amended by striking ‘‘1833(r)’’ and inserting ‘‘1833(s)’’.

25 (3) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is

26 amended by moving subparagraph (O), as redesignated by
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1 section 5070(f)(7)(B)(iii)(II) of this subtitle, two ems to

2 the left.

3 (4) Section 1881(b)(1)(C) (42 U.S.C.

4 1395rr(b)(1)(C)) is amended by striking ‘‘1861(s)(2)(Q)’’

5 and inserting ‘‘1861(s)(2)(P)’’.

6 (5) Section 4201(d)(2) of OBRA–1990 is amended

7 by striking ‘‘(B) by striking’’, ‘‘(C) by striking’’, and ‘‘(3)

8 by adding’’ and inserting ‘‘(i) by striking’’, ‘‘(ii) by strik9 ing’’, and ‘‘(B) by adding’’, respectively.

10 (6)(A) Section 4207(a)(1) of OBRA–1990 is amend11 ed by adding closing quotation marks and a period after

12 ‘‘such review.’’.

13 (B) Section 4207(a)(4) of OBRA–1990 is amended

14 by striking ‘‘this subsection’’ and inserting ‘‘paragraphs

15 (2) and (3)’’.

16 (C) Section 4207(b)(1) of OBRA–1990 is amended

17 by striking ‘‘section 3(7)’’ and inserting ‘‘section

18 601(a)(1)’’.

19 (7) Section 4202 of OBRA–1990 is amended—

20 (A) in subsection (b)(1)(A), by striking ‘‘home

21 hemodialysis staff assistant’’ and inserting ‘‘quali22 fied home hemodialysis staff assistant (as described

23 in subsection (d))’’;
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1 (B) in subsection (b)(2)(B)(ii)(I), by striking

2 ‘‘(as adjusted to reflect differences in area wage lev3 els)’’;

4 (C) in subsection (c)(1)(A), by striking

5 ‘‘skilled’’; and

6 (D) in subsection (c)(1)(E), by striking

7 ‘‘(b)(4)’’ and inserting ‘‘(b)(2)’’.

8 (c) EFFECTIVE DATE.—The amendments made by

9 this section shall take effect as if included in the enact10 ment of OBRA–1990.

11 CHAPTER 3—PROVISIONS RELATING TO

12 MEDICARE SUPPLEMENTAL INSUR13 ANCE POLICIES

14 SEC. 5091. STANDARDS FOR MEDICARE SUPPLEMENTAL IN15 SURANCE POLICIES.

16 (a) SIMPLIFICATION OF MEDICARE SUPPLEMENTAL

17 POLICIES.—

18 (1) Section 4351 of OBRA–1990 is amended by

19 striking ‘‘(a) IN GENERAL.—’’.

20 (2) Section 1882(p) (42 U.S.C. 1395ss(p)) is

21 amended—

22 (A) in paragraph (1)(A)—

23 (i) by striking ‘‘promulgates’’ and in24 serting ‘‘changes the revised NAIC Model
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1 Regulation (described in subsection (m)) to

2 incorporate’’,

3 (ii) by striking ‘‘(such limitations, lan4 guage, definitions, format, and standards

5 referred to collectively in this subsection as

6 ‘NAIC standards’),’’, and

7 (iii) by striking ‘‘included a reference

8 to the NAIC standards’’ and inserting

9 ‘‘were a reference to the revised NAIC

10 Model Regulation as changed under this

11 subparagraph (such changed regulation re12 ferred to in this section as the ‘1991 NAIC

13 Model Regulation’)’’;

14 (B) in paragraph (1)(B)—

15 (i) by striking ‘‘promulgate NAIC

16 standards’’ and inserting ‘‘make the

17 changes in the revised NAIC Model Regu18 lation’’,

19 (ii) by striking ‘‘limitations, language,

20 definitions, format, and standards de21 scribed in clauses (i) through (iv) of such

22 subparagraph (in this subsection referred

23 to collectively as ‘Federal standards’)’’ and

24 inserting ‘‘a regulation’’, and
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1 (iii) by striking ‘‘included a reference

2 to the Federal standards’’ and inserting

3 ‘‘were a reference to the revised NAIC

4 Model Regulation as changed by the Sec5 retary under this subparagraph (such

6 changed regulation referred to in this sec7 tion as the ‘1991 Federal Regulation’)’’;

8 (C) in paragraph (1)(C)(i), by striking

9 ‘‘NAIC standards or the Federal standards’’

10 and inserting ‘‘1991 NAIC Model Regulation or

11 1991 Federal Regulation’’;

12 (D) in paragraphs (1)(C)(ii)(I), (1)(E),

13 (2), and (9)(B), by striking ‘‘NAIC or Federal

14 standards’’ and inserting ‘‘1991 NAIC Model

15 Regulation or 1991 Federal Regulation’’;

16 (E) in paragraph (2)(C), by striking

17 ‘‘(5)(B)’’ and inserting ‘‘(4)(B)’’;

18 (F) in paragraph (4)(A)(i), by inserting

19 ‘‘or paragraph (6)’’ after ‘‘(B)’’;

20 (G) in paragraph (4), by striking ‘‘applica21 ble standards’’ each place it appears and insert22 ing ‘‘applicable 1991 NAIC Model Regulation

23 or 1991 Federal Regulation’’;

24 (H) in paragraph (6), by striking ‘‘in re25 gard to the limitation of benefits described in
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1 paragraph (4)’’ and inserting ‘‘described in

2 clauses (i) through (iii) of paragraph (1)(A)’’;

3 (I) in paragraph (7), by striking ‘‘policy4 holder’’ and inserting ‘‘policyholders’’;

5 (J) in paragraph (8), by striking ‘‘after the

6 effective date of the NAIC or Federal standards

7 with respect to the policy, in violation of the

8 previous requirements of this subsection’’ and

9 inserting ‘‘on and after the effective date speci10 fied in paragraph (1)(C) (but subject to para11 graph (10)), in violation of the applicable 1991

12 NAIC Model Regulation or 1991 Federal Regu13 lation insofar as such regulation relates to the

14 requirements of subsection (o) or (q) or clause

15 (i), (ii), or (iii) of paragraph (1)(A)’’;

16 (K) in paragraph (9), by adding at the end

17 the following new subparagraph:

18 ‘‘(D) Subject to paragraph (10), this paragraph shall

19 apply to sales of policies occurring on or after the effective

20 date specified in paragraph (1)(C).’’; and

21 (L) in paragraph (10), by striking ‘‘this

22 subsection’’ and inserting ‘‘paragraph

23 (1)(A)(i)’’.

24 (b) GUARANTEED RENEWABILITY.—Section 1882(q)

25 (42 U.S.C. 1395ss(q)) is amended—
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1 (1) in paragraph (2), by striking ‘‘paragraph

2 (2)’’ and inserting ‘‘paragraph (4)’’, and

3 (2) in paragraph (4), by striking ‘‘the succeed4 ing issuer’’ and inserting ‘‘issuer of the replacement

5 policy’’.

6 (c) ENFORCEMENT OF STANDARDS.—

7 (1) Section 1882(a)(2) (42 U.S.C.

8 1395ss(a)(2)) is amended—

9 (A) in subparagraph (A), by striking

10 ‘‘NAIC standards or the Federal standards’’

11 and inserting ‘‘1991 NAIC Model Regulation or

12 1991 Federal Regulation’’, and

13 (B) by striking ‘‘after the effective date of

14 the NAIC or Federal standards with respect to

15 the policy’’ and inserting ‘‘on and after the ef16 fective date specified in subsection (p)(1)(C)’’.

17 (2) The sentence in section 1882(b)(1) added

18 by section 4353(c)(5) of OBRA–1990 is amended—

19 (A) by striking ‘‘The report’’ and inserting

20 ‘‘Each report’’,

21 (B) by inserting ‘‘and requirements’’ after

22 ‘‘standards’’,

23 (C) by striking ‘‘and’’ after ‘‘compliance,’’,

24 and
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1 (D) by striking the comma after ‘‘Commis2 sioners’’.

3 (3) Section 1882(g)(2)(B) (42 U.S.C.

4 1395ss(g)(2)(B)) is amended by striking ‘‘Panel’’

5 and inserting ‘‘Secretary’’.

6 (4) Section 1882(b)(1) (42 U.S.C.

7 1395ss(b)(1)) is amended by striking ‘‘the the Sec8 retary’’ and inserting ‘‘the Secretary’’.

9 (d) PREVENTING DUPLICATION.—

10 (1) Section 1882(d)(3)(A) (42 U.S.C.

11 1395ss(d)(3)(A)) is amended—

12 (A) by amending the first sentence to read

13 as follows:

14 ‘‘(i) It is unlawful for a person to sell or issue to an

15 individual entitled to benefits under part A or enrolled

16 under part B of this title—

17 ‘‘(I) a health insurance policy with knowledge

18 that the policy duplicates health benefits to which

19 the individual is otherwise entitled under this title or

20 title XIX,

21 ‘‘(II) a medicare supplemental policy with

22 knowledge that the individual is entitled to benefits

23 under another medicare supplemental policy, or

24 ‘‘(III) a health insurance policy (other than a

25 medicare supplemental policy) with knowledge that
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1 the policy duplicates health benefits to which the in2 dividual is otherwise entitled, other than benefits to

3 which the individual is entitled under a requirement

4 of State or Federal law.’’;

5 (B) by designating the second sentence as

6 clause (ii) and, in such clause, by striking ‘‘the

7 previous sentence’’ and inserting ‘‘clause (i)’’;

8 (C) by designating the third sentence as

9 clause (iii) and, in such clause—

10 (i) by striking ‘‘the previous sentence’’

11 and inserting ‘‘clause (i) with respect to

12 the sale of a medicare supplemental pol13 icy’’, and

14 (ii) by striking ‘‘and the statement’’

15 and all that follows up to the period at the

16 end; and

17 (D) by striking the last sentence.

18 (2) Section 1882(d)(3)(B) (42 U.S.C.

19 1395ss(d)(3)(B)) is amended—

20 (A) in clause (ii)(II), by striking ‘‘65 years

21 of age or older’’,

22 (B) in clause (iii)(I), by striking ‘‘another

23 medicare’’ and inserting ‘‘a medicare’’,
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1 (C) in clause (iii)(I), by striking ‘‘such a

2 policy’’ and inserting ‘‘a medicare supplemental

3 policy’’,

4 (D) in clause (iii)(II), by striking ‘‘another

5 policy’’ and inserting ‘‘a medicare supplemental

6 policy’’, and

7 (E) by amending subclause (III) of clause

8 (iii) to read as follows:

9 ‘‘(III) If the statement required by clause (i) is ob10 tained and indicates that the individual is entitled to any

11 medical assistance under title XIX, the sale of the policy

12 is not in violation of clause (i) (insofar as such clause re13 lates to such medical assistance), if a State medicaid plan

14 under such title pays the premiums for the policy, or, in

15 the case of a qualified medicare beneficiary described in

16 section 1905(p)(1), if the State pays less than the full

17 amount of medicare cost-sharing as described in subpara18 graphs (B), (C), and (D) of section 1905(p)(3) for such

19 individual.’’.

20 (3)(A) Section 1882(d)(3)(C) (42 U.S.C.

21 1395ss(d)(3)(C)) is amended—

22 (i) by striking ‘‘the selling’’ and inserting

23 ‘‘(i) the sale or issuance’’, and

24 (ii) by inserting before the period at the

25 end the following: ‘‘, (ii) the sale or issuance of
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1 a policy or plan described in subparagraph

2 (A)(i)(I) (other than a medicare supplemental

3 policy to an individual entitled to any medical

4 assistance under title XIX) under which all the

5 benefits are fully payable directly to or on be6 half of the individual without regard to other

7 health benefit coverage of the individual but

8 only if (for policies sold or issued more than 60

9 days after the date the statements are pub10 lished or promulgated under subparagraph (D))

11 there is disclosed in a prominent manner as

12 part of (or together with) the application the

13 applicable statement (specified under subpara14 graph (D)) of the extent to which benefits pay15 able under the policy or plan duplicate benefits

16 under this title, or (iii) the sale or issuance of

17 a policy or plan described in subparagraph

18 (A)(i)(III) under which all the benefits are fully

19 payable directly to or on behalf of the individual

20 without regard to other health benefit coverage

21 of the individual’’.

22 (B) Section 1882(d)(3) (42 U.S.C.

23 1395ss(d)(3)) is amended by adding at the end the

24 following:

25 ‘‘(D)(i) If—
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1 ‘‘(I) within the 90-day period beginning on the

2 date of the enactment of this subparagraph, the Na3 tional Association of Insurance Commissioners devel4 ops (after consultation with consumer and insurance

5 industry representatives) and submits to the Sec6 retary a statement for each of the types of health in7 surance policies (other than medicare supplemental

8 policies and including, as separate types of policies,

9 policies paying directly to the beneficiary fixed, cash

10 benefits) which are sold to persons entitled to health

11 benefits under this title, of the extent to which bene12 fits payable under the policy or plan duplicate bene13 fits under this title, and

14 ‘‘(II) the Secretary approves all the statements

15 submitted as meeting the requirements of subclause

16 (I),

17 each such statement shall be (for purposes of subpara18 graph (C)) the statement specified under this subpara19 graph for the type of policy involved. The Secretary shall

20 review and approve (or disapprove) all the statements sub21 mitted under subclause (I) within 30 days after the date

22 of their submittal. Upon approval of such statements, the

23 Secretary shall publish such statements.

24 ‘‘(ii) If the Secretary does not approve the statements

25 under clause (i) or the statements are not submitted with-
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1 in the 90-day period specified in such clause, the Secretary

2 shall promulgate (after consultation with consumer and

3 insurance industry representatives and not later than 90

4 days after the date of disapproval or the end of such 90-

5 day period (as the case may be)) a statement for each

6 of the types of health insurance policies (other than medi7 care supplemental policies and including, as separate types

8 of policies, policies paying directly to the beneficiary fixed,

9 cash benefits) which are sold to persons entitled to health

10 benefits under this title, of the extent to which benefits

11 payable under the policy or plan duplicate benefits under

12 this title, and each such statement shall be (for purposes

13 of subparagraph (C)) the statement specified under this

14 subparagraph for the type of policy involved.’’.

15 (C) The requirement of a disclosure under sec16 tion 1882(d)(3)(C)(ii) of the Social Security Act

17 shall not apply to an application made for a policy

18 or plan before 60 days after the date of the Sec19 retary of Health and Human Services publishes or

20 promulgates all the statements under section

21 1882(d)(3)(D) of such Act.

22 (4) Subparagraphs (A) and (B) of section

23 1882(q)(5) (42 U.S.C. 1395ss(q)(5)(A)) are amend24 ed by striking ‘‘of the Social Security Act’’.

25 (e) LOSS RATIOS AND REFUNDS OF PREMIUMS.—
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1 (1) Section 1882(r) (42 U.S.C. 1395ss(r)) is

2 amended—

3 (A) in paragraph (1), by striking ‘‘or sold’’

4 and inserting ‘‘or renewed (or otherwise provide

5 coverage after the date described in subsection

6 (p)(1)(C))’’;

7 (B) in paragraph (1)(A), by inserting ‘‘for

8 periods after the effective date of these provi9 sions’’ after ‘‘the policy can be expected’’;

10 (C) in paragraph (1)(A), by striking

11 ‘‘Commissioners,’’ and inserting ‘‘Commis12 sioners)’’;

13 (D) in paragraph (1)(B), by inserting be14 fore the period at the end the following: ‘‘,

15 treating policies of the same type as a single

16 policy for each standard package’’;

17 (E) by adding at the end of paragraph (1)

18 the following: ‘‘For the purpose of calculating

19 the refund or credit required under paragraph

20 (1)(B) for a policy issued before the date speci21 fied in subsection (p)(1)(C), the refund or cred22 it calculation shall be based on the aggregate

23 benefits provided and premiums collected under

24 all such policies issued by an insurer in a State

25 (separated as to individual and group policies)
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1 and shall be based only on aggregate benefits

2 provided and premiums collected under such

3 policies after the date specified in section

4 5091(m)(4) of the Omnibus Budget Reconcili5 ation Act of 1993.’’;

6 (F) in the first sentence of paragraph

7 (2)(A), by striking ‘‘by policy number’’ and in8 serting ‘‘by standard package’’;

9 (G) by striking the second sentence of

10 paragraph (2)(A) and inserting the following:

11 ‘‘Paragraph (1)(B) shall not apply to a policy

12 until 12 months following issue.’’;

13 (H) in the last sentence of paragraph

14 (2)(A), by striking ‘‘in order’’ and all that fol15 lows through ‘‘are effective’’;

16 (I) by adding at the end of paragraph

17 (2)(A), the following new sentence: ‘‘In the case

18 of a policy issued before the date specified in

19 subsection (p)(1)(C), paragraph (1)(B) shall

20 not apply until 1 year after the date specified

21 in section 5091(m)(4) of the Omnibus Budget

22 Reconciliation Act of 1993.’’;

23 (J) in paragraph (2), by striking ‘‘policy

24 year’’ each place it appears and inserting ‘‘cal25 endar year’’;
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1 (K) in paragraph (4), by striking ‘‘Feb2 ruary’’, ‘‘disllowance’’, ‘‘loss-ratios’’ each place

3 it appears, and ‘‘loss-ratio’’ and inserting ‘‘Oc4 tober’’, ‘‘disallowance’’, ‘‘loss ratios’’, and ‘‘loss

5 ratio’’, respectively;

6 (L) in paragraph (6)(A), by striking ‘‘is7 sues a policy in violation of the loss ratio re8 quirements of this subsection’’ and ‘‘such viola9 tion’’ and inserting ‘‘fails to provide refunds or

10 credits as required in paragraph (1)(B)’’ and

11 ‘‘policy issued for which such failure occurred’’,

12 respectively; and

13 (M) in paragraph (6)(B), by striking ‘‘to

14 policyholders’’ and inserting ‘‘to the policy15 holder or, in the case of a group policy, to the

16 certificate holder’’.

17 (2) Section 1882(b)(1) (42 U.S.C.

18 1395ss(b)(1)) is amended, in the matter after sub19 paragraph (H), by striking ‘‘subsection (F)’’ and in20 serting ‘‘subparagraph (F)’’.

21 (3) Section 4355(d) of OBRA–1990 is amended

22 by striking ‘‘sold or issued’’ and all that follows and

23 inserting ‘‘issued or renewed (or otherwise providing

24 coverage after the date described in section

25 1882(p)(1)(C) of the Social Security Act) on or after
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1 the date specified in section 1882(p)(1)(C) of such

2 Act.’’.

3 (f) TREATMENT OF HMO’S.—

4 (1) Section 1882(g)(1) (42 U.S.C.

5 1395ss(g)(1)) is amended by striking ‘‘a health

6 maintenance organization or other direct service or7 ganization’’ and all that follows through ‘‘1833’’ and

8 inserting ‘‘an eligible organization (as defined in sec9 tion 1876(b)) if the policy or plan provides benefits

10 pursuant to a contract under section 1876 or an ap11 proved demonstration project described in section

12 603(c) of the Social Security Amendments of 1983,

13 section 2355 of the Deficit Reduction Act of 1984,

14 or section 9412(b) of the Omnibus Budget Reconcili15 ation Act of 1986 or, during the period beginning on

16 the date specified in subsection (p)(1)(C) and ending

17 on December 31, 1994, a policy or plan of an orga18 nization if the policy or plan provides benefits pursu19 ant to an agreement under section 1833(a)(1)(A)’’.

20 (2) Section 4356(b) of OBRA–1990 is amended

21 by striking ‘‘on the date of the enactment of this

22 Act’’ and inserting ‘‘on the date specified in section

23 1882(p)(1)(C) of the Social Security Act’’.

24 (g) PRE-EXISTING CONDITION LIMITATIONS.—Sec25 tion 1882(s) (42 U.S.C. 1395ss(s)) is amended—
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1 (1) in paragraph (2)(A), by striking ‘‘for which

2 an application is submitted’’ and inserting ‘‘in the

3 case of an individual for whom an application is sub4 mitted prior to or’’,

5 (2) in paragraph (2)(A), by striking ‘‘in which

6 the individual (who is 65 years of age or older) first

7 is enrolled for benefits under part B’’ and inserting

8 ‘‘as of the first day on which the individual is 65

9 years of age or older and is enrolled for benefits

10 under part B’’, and

11 (3) in paragraph (2)(B), by striking ‘‘before it’’

12 and inserting ‘‘before the policy’’.

13 (h) MEDICARE SELECT POLICIES.—

14 (1) Section 1882(t) (42 U.S.C. 1395ss(t)) is

15 amended—

16 (A) in paragraph (1), by inserting ‘‘medi17 care supplemental’’ after ‘‘If a’’,

18 (B) in paragraph (1), by striking ‘‘NAIC

19 Model Standards’’ and inserting ‘‘1991 NAIC

20 Model Regulation or 1991 Federal Regulation’’,

21 (C) in paragraph (1)(A), by inserting ‘‘or

22 agreements’’ after ‘‘contracts’’,

23 (D) in subparagraphs (E)(i) and (F) of

24 paragraph (1), by striking ‘‘NAIC standards’’

25 and inserting ‘‘standards in the 1991 NAIC
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1 Model Regulation or 1991 Federal Regulation’’,

2 and

3 (E) in paragraph (2), by inserting ‘‘the is4 suer’’ before ‘‘is subject to a civil money pen5 alty’’.

6 (2) Section 1154(a)(4)(B) (42 U.S.C. 1320c–

7 3(a)(4)(B)) is amended—

8 (A) by inserting ‘‘that is’’ after ‘‘(or’’, and

9 (B) by striking ‘‘1882(t)’’ and inserting

10 ‘‘1882(t)(3)’’.

11 (i) HEALTH INSURANCE COUNSELING.—Section

12 4360 of OBRA–1990 is amended—

13 (1) in subsection (b)(2)(A)(ii), by striking

14 ‘‘Act’’ and inserting ‘‘Act)’’;

15 (2) in subsection (b)(2)(D), by striking ‘‘serv16 ices’’ and inserting ‘‘counseling’’;

17 (3) in subsection (b)(2)(I), by striking ‘‘assist18 ance’’ and inserting ‘‘referrals’’;

19 (4) in subsection (c)(1), by striking ‘‘and that

20 such activities will continue to be maintained at such

21 level’’;

22 (5) in subsection (d)(3), by striking ‘‘to the

23 rural areas’’ and inserting ‘‘eligible individuals resid24 ing in rural areas’’;

25 (6) in subsection (e)—
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1 (A) by striking ‘‘subsection (c) or (d)’’ and

2 inserting ‘‘this section’’,

3 (B) by striking ‘‘and annually thereafter,

4 issue an annual report’’ and inserting ‘‘and an5 nually thereafter during the period of the grant,

6 issue a report’’, and

7 (C) in paragraph (1), by striking ‘‘State8 wide;’’,

9 (7) in subsection (f), by striking paragraph (2)

10 and by redesignating paragraphs (3) through (5) as

11 paragraphs (2) through (4), respectively; and

12 (8) by redesignating the second subsection (f)

13 (relating to authorization of appropriations for

14 grants) as subsection (g).

15 (j) TELEPHONE INFORMATION SYSTEM.—

16 (1) Section 1804 (42 U.S.C. 1395b–2) is

17 amended—

18 (A) by adding at the end of the heading

19 the following: ‘‘; MEDICARE AND MEDIGAP IN20 FORMATION’’,

21 (B) by inserting ‘‘(a)’’ after ‘‘1804.’’, and

22 (C) by adding at the end the following new

23 subsection:
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1 ‘‘(b) The Secretary shall provide information via a

2 toll-free telephone number on the programs under this

3 title.’’.

4 (2) Section 1882(f) (42 U.S.C. 1395ss(f)) is

5 amended by adding at the end the following new

6 paragraph:

7 ‘‘(3) The Secretary shall provide information via a

8 toll-free telephone number on medicare supplemental poli9 cies (including the relationship of State programs under

10 title XIX to such policies).’’.

11 (3) Section 1889 (42 U.S.C. 1395zz) is re12 pealed.

13 (k) MAILING OF POLICIES.—Section 1882(d)(4) (42

14 U.S.C. 1395ss(d)(4)) is amended—

15 (1) in subparagraph (D), by striking ‘‘, if such

16 policy’’ and all that follows up to the period at the

17 end, and

18 (2) by adding at the end the following new sub19 paragraph:

20 ‘‘(E) Subparagraph (A) shall not apply in the case

21 of an issuer who mails or causes to be mailed a policy,

22 certificate, or other matter solely to comply with the re23 quirements of subsection (q).’’.
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1 (l) EFFECTIVE DATE.—The amendments made by

2 this section shall be effective as if included in the enact3 ment of OBRA–1990; except that—

4 (1) the amendments made by subsection (d)(1)

5 shall take effect on the date of the enactment of this

6 Act, but no penalty shall be imposed under section

7 1882(d)(3)(A) of the Social Security Act (for an ac8 tion occurring after the effective date of the amend9 ments made by section 4354 of OBRA–1990 and be10 fore the date of the enactment of this Act) with re11 spect to the sale or issuance of a policy which is not

12 unlawful under section 1882(d)(3)(A)(i)(II) of the

13 Social Security Act (as amended by this section);

14 (2) the amendments made by subsection

15 (d)(2)(A) and by subparagraphs (A), (B), and (E)

16 of subsection (e)(1) shall be effective on the date

17 specified in subsection (m)(4); and

18 (3) the amendment made by subsection (g)(2)

19 shall take effect on January 1, 1994, and shall apply

20 to individuals who attain 65 years of age or older on

21 or after the effective date of section 1882(s)(2) of

22 the Social Security Act (and, in the case of individ23 uals who attained 65 years of age after such effec24 tive date and before January 1, 1994, and who were

25 not covered under such section before January 1,
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1 1994, the 6-month period specified in that section

2 shall begin January 1, 1994).

3 (m) TRANSITION PROVISIONS.—

4 (1) IN GENERAL.—If the Secretary of Health

5 and Human Services identifies a State as requiring

6 a change to its statutes or regulations to conform its

7 regulatory program to the changes made by this sec8 tion, the State regulatory program shall not be con9 sidered to be out of compliance with the require10 ments of section 1882 of the Social Security Act due

11 solely to failure to make such change until the date

12 specified in paragraph (4).

13 (2) NAIC STANDARDS.—If, within 6 months

14 after the date of the enactment of this Act, the Na15 tional Association of Insurance Commissioners (in

16 this subsection referred to as the ‘‘NAIC’’) modifies

17 its 1991 NAIC Model Regulation (adopted in July

18 1991) to conform to the amendments made by this

19 section and to delete from section 15C the exception

20 which begins with ‘‘unless’’, such modifications shall

21 be considered to be part of that Regulation for the

22 purposes of section 1882 of the Social Security Act.

23 (3) SECRETARY STANDARDS.—If the NAIC

24 does not make the modifications described in para25 graph (2) within the period specified in such para-
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1 graph, the Secretary of Health and Human Services

2 shall make the modifications described in such para3 graph and such modifications shall be considered to

4 be part of that Regulation for the purposes of sec5 tion 1882 of the Social Security Act.

6 (4) DATE SPECIFIED.—

7 (A) IN GENERAL.—Subject to subpara8 graph (B), the date specified in this paragraph

9 for a State is the earlier of—

10 (i) the date the State changes its stat11 utes or regulations to conform its regu12 latory program to the changes made by

13 this section, or

14 (ii) 1 year after the date the NAIC or

15 the Secretary first makes the modifications

16 under paragraph (2) or (3), respectively.

17 (B) ADDITIONAL LEGISLATIVE ACTION RE18 QUIRED.—In the case of a State which the Sec19 retary identifies as—

20 (i) requiring State legislation (other

21 than legislation appropriating funds) to

22 conform its regulatory program to the

23 changes made in this section, but

24 (ii) having a legislature which is not

25 scheduled to meet in 1994 in a legislative
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1 session in which such legislation may be

2 considered,

3 the date specified in this paragraph is the first

4 day of the first calendar quarter beginning after

5 the close of the first legislative session of the

6 State legislature that begins on or after Janu7 ary 1, 1994. For purposes of the previous sen8 tence, in the case of a State that has a 2-year

9 legislative session, each year of such session

10 shall be deemed to be a separate regular session

11 of the State legislature.

12 Subtitle B—Medicaid Program and

13 Other Health Care Provisions

14 SEC. 5100. REFERENCES IN SUBTITLE; TABLE OF CON15 TENTS OF SUBTITLE.

16 (a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex17 cept as otherwise specifically provided, whenever in this

18 subtitle an amendment is expressed in terms of an amend19 ment to or repeal of a section or other provision, the ref20 erence shall be considered to be made to that section or

21 other provision of the Social Security Act.

22 (b) REFERENCES TO OBRA.—In this subtitle, the

23 terms ‘‘OBRA–1986’’, ‘‘OBRA–1987’’, ‘‘OBRA–1989’’,

24 and ‘‘OBRA–1990’’ refer to the Omnibus Budget Rec25 onciliation Act of 1986 (Public Law 99–509), the Omni-
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1 bus Budget Reconciliation Act of 1987 (Public Law 100–

2 203), the Omnibus Budget Reconciliation Act of 1989

3 (Public Law 101–239), and the Omnibus Budget Rec4 onciliation Act of 1990 (Public Law 101–508), respec5 tively.

6 (c) TABLE OF CONTENTS OF SUBTITLE.—The table

7 of contents of this subtitle is as follows:

Subtitle B—Medicaid Program and Other Health Care Provisions

Sec. 5100. References in subtitle; table of contents of subtitle.

CHAPTER 1—MEDICAID PROGRAM

SUBCHAPTER A—PROGRAM SAVINGS PROVISIONS

PART I—REPEAL OF MANDATE

Sec. 5101. Personal care services furnished outside the home as optional benefit.

PART II—OUTPATIENT PRESCRIPTION DRUGS

Sec. 5106. Permitting prescription drug formularies under State plans.

Sec. 5107. Elimination of special exemption from prior authorization for new

drugs.

Sec. 5108. Technical corrections relating to section 4401 of OBRA–1990.

PART III—RESTRICTIONS ON DIVESTITURE OF ASSETS AND ESTATE

RECOVERY

Sec. 5111. Transfer of assets.

Sec. 5112. Medicaid estate recoveries.

Sec. 5113. Closing loophole permitting wealthy individuals to qualify for medicaid.

PART IV—IMPROVEMENT IN IDENTIFICATION AND COLLECTION OF THIRD

PARTY PAYMENTS

Sec. 5116. Liability of third parties to pay for care and services.

Sec. 5117. Health Coverage Clearinghouse.

‘‘TITLE XXI—HEALTH COVERAGE CLEARINGHOUSE

‘‘Sec. 2101. Establishment of clearinghouse.

‘‘Sec. 2102. Provision of information.

‘‘Sec. 2103. Requirement that employers furnish information.

‘‘Sec. 2104. Data bank.’’.

Sec. 5118. Medical child support.
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PART V—ASSURING PROPER PAYMENTS TO DISPROPORTIONATE SHARE

HOSPITALS

Sec. 5121. Assuring proper payments to disproportionate share hospitals.

SUBCHAPTER B—MISCELLANEOUS PROVISIONS

PART I—ANTI-FRAUD AND ABUSE PROVISIONS

Sec. 5131. Application of medicare rules limiting certain physician referrals.

Sec. 5132. Intermediate sanctions for kickback violations.

Sec. 5133. Requiring maintenance of effort for State medicaid fraud control

units.

PART II—MANAGED CARE PROVISIONS

Sec. 5135. Medicaid managed care anti-fraud provisions.

Sec. 5136. Clarification of treatment of HMO enrollees in computing the medicaid inpatient utilization rate in qualifying hospitals as disproportionate share hospitals.

Sec. 5137. Extension of period of applicability of enrollment mix requirement

to certain health maintenance organizations providing services

under Dayton Area Health Plan.

Sec. 5138. Extension of medicaid waiver for Tennessee Primary Care Network.

Sec. 5139. Waiver of application of medicaid enrollment mix requirement to

District of Columbia Chartered Health Plan, Inc.

Sec. 5140. Extension of Minnesota Prepaid Medicaid Demonstration Project.

PART III—EMERGENCY SERVICES TO UNDOCUMENTED ALIENS

Sec. 5141. Increase in Federal financial participation for emergency medical assistance to undocumented aliens.

Sec. 5142. Limiting Federal medicaid matching payment to bona fide emergency services for undocumented aliens.

PART IV—MISCELLANEOUS PROVISIONS

Sec. 5144. Increase in limit on Federal medicaid matching payments to Puerto

Rico and other territories.

Sec. 5145. Criteria for making determinations of denial of Federal medicaid

matching payments to States.

Sec. 5146. Renewal of unfunded demonstration project for low-income pregnant

women and children.

Sec. 5147. Optional medicaid coverage of TB-related services for certain

TB-infected individuals.

Sec. 5148. Application of mammography certification requirements under the

medicaid program.

Sec. 5149. Removal of sunset on extension of eligibility for working families.

Sec. 5150. Extension of moratorium on treatment of certain facilities as institutions for mental diseases.

Sec. 5150A. Treatment of certain clinics as federally-qualified health centers.

Sec. 5150B. Nursing home reform.

SUBCHAPTER C—MISCELLANEOUS AND TECHNICAL CORRECTIONS RELATING

TO OBRA–1990

Sec. 5151. Effective date.
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Sec. 5152. Corrections relating to section 4402 (enrollment under group health

plans).

Sec. 5153. Corrections relating to section 4501 (low-income medicare beneficiaries).

Sec. 5154. Corrections relating to section 4601 (child health).

Sec. 5155. Corrections relating to section 4602 (outreach locations).

Sec. 5156. Corrections relating to section 4604 (payment for hospital services

for children under 6 years of age).

Sec. 5157. Corrections relating to section 4703 (payment adjustments for disproportionate share hospitals).

Sec. 5158. Corrections relating to section 4704 (Federally-qualified health centers).

Sec. 5159. Corrections relating to section 4708 (substitute physicians).

Sec. 5160. Corrections relating to section 4711 (home and community care for

frail elderly).

Sec. 5161. Corrections relating to section 4712 (community supported living

arrangements services).

Sec. 5162. Correction relating to section 4713 (COBRA continuation coverage).

Sec. 5163. Correction relating to section 4716 (medicaid transition for family

assistance).

Sec. 5164. Corrections relating to section 4723 (medicaid spenddown option).

Sec. 5165. Corrections relating to section 4724 (optional State disability determinations).

Sec. 5166. Correction relating to section 4732 (special rules for health maintenance organizations).

Sec. 5167. Corrections relating to section 4741 (home and community-based

waivers).

Sec. 5168. Corrections relating to section 4744 (frail elderly waivers).

Sec. 5169. Corrections relating to section 4747 (coverage of HIV-positive individuals).

Sec. 5170. Correction relating to section 4751 (advance directives).

Sec. 5171. Corrections relating to section 4752 (physicians’ services).

Sec. 5172. Corrections relating to section 4801 (nursing home reform).

Sec. 5173. Other technical corrections.

Sec. 5174. Corrections to designations of new provisions.

CHAPTER 2—UNIVERSAL ACCESS TO CHILDHOOD IMMUNIZATIONS

Sec. 5181. Establishment of entitlement and monitoring programs with respect

to childhood immunizations.

‘‘Subtitle 3—Entitlement and Monitoring Programs With Respect to

Childhood Immunizations

‘‘PART A—ENTITLEMENT PROGRAM

‘‘Sec. 2151. Delivery to States of sufficient quantities of pediatric vaccines.

‘‘Sec. 2152. Entitlements.

‘‘Sec. 2153. Voluntary participation of health care providers.

‘‘Sec. 2154. Intrastate distribution of pediatric vaccines.

‘‘Sec. 2155. General provisions.

‘‘Sec. 2156. State option regarding immunization of additional categories

of children.

‘‘Sec. 2157. State application for vaccines.

‘‘Sec. 2158. Contracts with manufacturers of pediatric vaccines.

‘‘Sec. 2159. Certain administrative variations.
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‘‘Sec. 2160. List of pediatric vaccines; schedule for administration.

‘‘Sec. 2161. Childhood Immunization Trust Fund.

‘‘Sec. 2162. Definitions.

‘‘Sec. 2163. Termination of program.

‘‘PART B—NATIONAL SYSTEM FOR MONITORING IMMUNIZATION STATUS OF

CHILDREN

‘‘Sec. 2171. Formula grants for State registries with respect to monitoring.

‘‘Sec. 2172. Registry data.

‘‘Sec. 2173. General provisions.

‘‘Sec. 2174. Application for grant.

‘‘Sec. 2175. Determination of amount of allotment.

‘‘Sec. 2176. Definitions.

‘‘Sec. 2177. Authorization of appropriations.

‘‘PART C—FUNDING FOR OTHER PURPOSES REGARDING CHILDHOOD

IMMUNIZATIONS

‘‘Sec. 2181. Grants regarding Year 2000 health objectives.

Sec. 5182. National Vaccine Injury Compensation Program amendments.

Sec. 5183. Medicaid immunization provisions.

Sec. 5184. Availability of medicaid payments for childhood vaccine replacement

programs.

Sec. 5185. Healthy start for infants.

Sec. 5186. Increase in authorization of appropriations for the Maternal and

Child Health Services Block Grant Program.

Sec. 5187. Miscellaneous technical corrections to Public Health Service Act provisions.

1 CHAPTER 1—MEDICAID PROGRAM

2 Subchapter A—Program Savings Provisions

3 PART I—REPEAL OF MANDATE

4 SEC. 5101. PERSONAL CARE SERVICES FURNISHED OUT5 SIDE THE HOME AS OPTIONAL BENEFIT.

6 (a) IN GENERAL.—Section 1905(a) (42 U.S.C.

7 1396d(a)), as amended by section 5174(c)(1), is further

8 amended—

9 (1) in paragraph (7), by striking ‘‘including

10 personal care services’’ and all that follows through

11 ‘‘nursing facility’’;
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1 (2) in paragraph (23), by striking ‘‘and’’ at the

2 end;

3 (3) by redesignating paragraph (24) as para4 graph (25); and

5 (4) by inserting after paragraph (23) the fol6 lowing new paragraph:

7 ‘‘(24) personal care services furnished to an in8 dividual who is not an inpatient or resident of a

9 nursing facility that are (A) authorized by a physi10 cian for the individual in accordance with a plan of

11 treatment, (B) provided by an individual who is

12 qualified to provide such services and who is not a

13 member of the individual’s family, (C) supervised by

14 a registered nurse, and (D) furnished in a home or

15 other location; and’’.

16 (b) CONFORMING AMENDMENTS.—(1) Section

17 1902(a)(10)(C)(iv) (42 U.S.C. 1396a(a)(10)(C)(iv)), as

18 amended by section 5174(c)(2)(A), is amended by striking

19 ‘‘through (23)’’ and inserting ‘‘through (24)’’.

20 (2) Section 1902(j) (42 U.S.C. 1396a(j)), as amend21 ed by section 5174(c)(2)(B), is amended by striking

22 ‘‘through (24)’’ and inserting ‘‘through (25)’’.

23 (c) EFFECTIVE DATE.—The amendments made by

24 subsections (a) and (b) shall take effect as if included in

25 the enactment of section 4721(a) of OBRA–90.
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1 PART II—OUTPATIENT PRESCRIPTION DRUGS

2 SEC. 5106. PERMITTING PRESCRIPTION DRUG

3 FORMULARIES UNDER STATE PLANS.

4 (a) ELIMINATION OF PROHIBITION AGAINST USE OF

5 FORMULARIES.—Paragraph (54) of section 1902(a)(54)

6 (42 U.S.C. 1396a(a)(54)) is amended to read as follows:

7 ‘‘(54) in the case of a State plan that provides

8 medical assistance for covered outpatient drugs (as

9 defined in section 1927(k)), comply with the applica10 ble requirements of section 1927;’’.

11 (b) STANDARDS FOR FORMULARIES.—Section

12 1927(d) (42 U.S.C. 1396r–8(d)), as amended by sections

13 5107(a) and 5108(b)(4)(A)(iii), is amended—

14 (1) by adding at the end of paragraph (1) the

15 following new subparagraph:

16 ‘‘(C) In the case of a State that establishes a

17 formulary in accordance with paragraph (5), the

18 State may exclude coverage of a covered outpatient

19 drug that is not included in the formulary.’’; and

20 (2) by inserting after paragraph (4) the follow21 ing new paragraph:

22 ‘‘(5) REQUIREMENTS FOR FORMULARIES.—A

23 State may establish a formulary only if the following

24 requirements are met:

25 ‘‘(A) The formulary is established by a

26 committee consisting of physicians, phar-
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1 macists, and other appropriate individuals ap2 pointed by the Governor of the State (or, at the

3 option of the State, the State’s drug use review

4 board established under subsection (g)(3)).

5 ‘‘(B) Except as provided in subparagraph

6 (C), the formulary includes the covered out7 patient drugs of any manufacturer which has

8 entered into and complies with an agreement

9 under subsection (a).

10 ‘‘(C) The committee may exclude a covered

11 outpatient drug with respect to the treatment of

12 a specific disease or condition for an identified

13 population (if any) only if the committee finds,

14 based on the drug’s labeling (or, in the case of

15 a drug whose prescribed use is not approved

16 under the Federal Food, Drug, and Cosmetic

17 Act but is a medically accepted indication,

18 based on information from the appropriate com19 pendia described in subsection (k)(6)), that the

20 excluded drug does not have a significant, clini21 cally meaningful therapeutic advantage in terms

22 of safety, effectiveness, or clinical outcome of

23 such treatment for such population over other

24 drugs included in the formulary.
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1 ‘‘(D) With respect to a decision to exclude

2 a covered outpatient drug from the formulary

3 or a prescribed use of such a drug, the commit4 tee issues a written explanation of its decision

5 that is available to the public, unless the deci6 sion was made at a meeting of the committee

7 which was open to the public.

8 ‘‘(E) The manufacturer of the drug, and

9 any person affected by the decision, may obtain

10 a reversal of the committee’s decision to exclude

11 a covered outpatient drug from the formulary

12 under subparagraph (C) on the ground that the

13 decision was arbitrary and capricious, in ac14 cordance with an appeals process that is estab15 lished by the State and that provides an oppor16 tunity for judicial review of such decision.

17 ‘‘(F) The State plan permits coverage of a

18 drug excluded from the formulary pursuant to

19 a prior authorization program that is consistent

20 with paragraph (4).

21 ‘‘(G) The formulary meets such other re22 quirements as the Secretary may impose.’’.

23 (c) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to calendar quarters beginning on

25 or after October 1, 1993, without regard to whether or
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1 not regulations to carry out such amendments have been

2 promulgated by such date.

3 SEC. 5107. ELIMINATION OF SPECIAL EXEMPTION FROM

4 PRIOR AUTHORIZATION FOR NEW DRUGS.

5 (a) IN GENERAL.—Section 1927(d) (42 U.S.C.

6 1396r–8(d)), as amended by section 5108(b)(4)(A)(iii), is

7 amended by striking paragraph (5).

8 (b) CONFORMING AMENDMENT.—Section 1927(d)(3)

9 (42 U.S.C. 1396r–8(d)(3)) is amended by striking ‘‘(ex10 cept with respect’’ and all that follows through ‘‘of this

11 paragraph)’’.

12 (c) EFFECTIVE DATE.—The amendments made by

13 this section shall apply to calendar quarters beginning on

14 or after October 1, 1993, without regard to whether or

15 not regulations to carry out such amendments have been

16 promulgated by such date.

17 SEC. 5108. TECHNICAL CORRECTIONS RELATING TO SEC18 TION 4401 OF OBRA–1990.

19 (a) SECTION 1903, SSA.—Paragraph (10) of section

20 1903(i), as inserted by section 4401(a)(1)(B) of OBRA–

21 1990, is amended to read as follows:

22 ‘‘(10) with respect to covered outpatient drugs

23 unless there is a rebate agreement in effect under

24 section 1927 with respect to such drugs or unless

25 section 1927(a)(3) applies;’’.
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1 (b) SECTION 1927, SSA.—(1) Section 1927(a) (42

2 U.S.C. 1396r–8(a)) is amended—

3 (A) in paragraph (1)—

4 (i) by amending the second sentence to

5 read as follows: ‘‘Any such agreement entered

6 into prior to April 1, 1991, shall be deemed to

7 have been entered into on January 1, 1991, and

8 the amount of the rebate under such agreement

9 shall be calculated as if the agreement had been

10 entered into on January 1, 1991.’’, and

11 (ii) in the third sentence, by striking

12 ‘‘March’’ and inserting ‘‘April’’;

13 (B) in paragraph (2)—

14 (i) by striking ‘‘first’’, and

15 (ii) by striking the period at the end and

16 inserting the following: ‘‘, except that such

17 paragraph (and section 1903(i)(10)(A)) shall

18 not apply to the dispensing of such a drug be19 fore April 1, 1991, if the Secretary determines

20 that there were extenuating circumstances with

21 respect to the first calendar quarter of 1991.’’;

22 (C) in paragraph (3), by striking ‘‘single

23 source’’ and all that follows and inserting the follow24 ing: ‘‘covered outpatient drugs if—
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1 ‘‘(A) based on information provided by a

2 beneficiary’s physician, the State has made a

3 determination that the availability of the drug

4 is essential to the health of the beneficiary

5 under the State plan, and the Secretary has re6 viewed and approved such determination; and

7 ‘‘(B) the drug has been given a rating of

8 1–A by the Food and Drug Administration.’’;

9 (D) in paragraph (4)—

10 (i) by striking ‘‘in compliance with’’

11 and inserting ‘‘in effect under’’, and

12 (ii) by striking ‘‘coverage of the man13 ufacturer’s drugs’’ and inserting ‘‘ingredi14 ent costs of the manufacturer’s covered

15 outpatient drugs covered’’; and

16 (E) by adding at the end the following new

17 paragraph:

18 ‘‘(5) APPLICATION IN CERTAIN STATES AND

19 TERRITORIES.—

20 ‘‘(A) APPLICATION IN STATES OPERATING

21 UNDER DEMONSTRATION PROJECTS.—In the

22 case of any State which is providing medical as23 sistance to its residents under a waiver granted

24 under section 1115, the Secretary shall require

25 the State to meet the requirements of section
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1 1902(a)(54) and of this section in the same

2 manner as the State would be required to meet

3 such requirements if the State had in effect a

4 plan approved under this title.

5 ‘‘(B) NO APPLICATION IN COMMON6 WEALTHS AND TERRITORIES.—This section,

7 and sections 1902(a)(54) and 1903(i)(10), shall

8 only apply to a State that is one of the 50

9 States or the District of Columbia.’’.

10 (2) Section 1927(b) (42 U.S.C. 1396r–8(b)) is

11 amended—

12 (A) in paragraph (1)(A)—

13 (i) by striking ‘‘(or periodically in accord14 ance with a schedule specified by the Sec15 retary)’’ and inserting ‘‘(or other period speci16 fied by the Secretary)’’, and

17 (ii) by inserting ‘‘after December 31, 1990,

18 for which payment was made’’ after ‘‘dis19 pensed’’;

20 (B) in paragraph (2)(A)—

21 (i) by striking ‘‘calendar quarter’’ and ‘‘the

22 quarter’’ and inserting ‘‘rebate period’’ and

23 ‘‘the period’’, respectively,
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1 (ii) by striking ‘‘dosage units’’ and insert2 ing ‘‘units of each dosage form and strength’’,

3 and

4 (iii) by inserting ‘‘after December 31,

5 1990, for which payment was made’’ after

6 ‘‘dispensed’’;

7 (C) in paragraph (3)(A)—

8 (i) in clause (i), by striking ‘‘quarter’’ each

9 place it appears and inserting ‘‘calendar quarter

10 or other rebate period under the agreement’’,

11 (ii) in clause (i), by striking the open pa12 renthesis before ‘‘for’’ and the close parenthesis

13 after ‘‘drugs’’,

14 (iii) in clause (i), by striking ‘‘subsection

15 (c)(2)(B)) for covered outpatient drugs’’ and in16 serting ‘‘subsection (c)(1)(C) for each covered

17 outpatient drug’’, and

18 (iv) in clause (ii), by inserting a comma

19 after ‘‘this section’’ and after ‘‘1990’’;

20 (D) in paragraph (3)(B)—

21 (i) by striking ‘‘$100,000’’ and inserting

22 ‘‘$10,000’’,

23 (ii) by striking ‘‘if the wholesaler’’ and in24 serting ‘‘for each instance in which the whole25 saler’’,
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1 (iii) by inserting ‘‘in response to such a re2 quest’’ after ‘‘false information’’, and

3 (iv) by striking ‘‘(with respect to amounts

4 of penalties or additional assessments)’’;

5 (E) in paragraph (3)(C)—

6 (i) in clause (i), by striking ‘‘the penalty’’

7 and inserting ‘‘the rebate next required to be

8 paid’’,

9 (ii) in clause (i), by striking ‘‘and such

10 amount shall be paid to the Treasury, and, if’’

11 and inserting ‘‘. If’’,

12 (iii) in clause (ii), by inserting ‘‘under sub13 paragraph (A)’’ after ‘‘provides false informa14 tion’’, and

15 (iv) in clause (ii), by striking ‘‘Such civil

16 money penalties are’’ and inserting ‘‘Any such

17 civil money penalty shall be’’;

18 (F) in paragraph (3)(D), by striking ‘‘whole19 saler,’’ the first place it appears and inserting

20 ‘‘wholesaler or the’’; and

21 (G) in paragraph (4)(B)(iii), by adding at the

22 end the following: ‘‘In the case of such a termi23 nation, a State may terminate coverage of the drugs

24 affected by such termination as of the effective date
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1 of such termination without providing any advance

2 notice otherwise required by regulation.’’.

3 (3) Section 1927(c) (42 U.S.C. 1396r–8(c)) is

4 amended—

5 (A) in paragraph (1) in the matter preceding

6 subparagraph (A)—

7 (i) by striking the first sentence,

8 (ii) in the second sentence, by striking

9 ‘‘Except as otherwise provided’’ and all that fol10 lows through ‘‘the Secretary)’’ and inserting the

11 following: ‘‘For purposes of this section, the

12 amount of the rebate under this subsection for

13 a rebate period’’, and

14 (iii) by inserting ‘‘(except as provided in

15 subsection (b)(3)(C) and paragraph (2))’’ after

16 ‘‘drugs shall’’;

17 (B) in paragraph (1)(A), by striking ‘‘the quar18 ter (or other period)’’ and inserting ‘‘the rebate pe19 riod’’;

20 (C) in subparagraph (C)—

21 (i) by striking ‘‘For purposes of this para22 graph’’ and inserting ‘‘BEST PRICE DEFINED.—

23 For purposes of this section’’,

24 (ii) by inserting ‘‘provider,’’ after ‘‘re25 tailer,’’, and
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1 (iii) by striking the semicolon at the end

2 and inserting a period; and

3 (D) by striking subparagraph (D) and inserting

4 the following:

5 ‘‘(D) USE OF ESTIMATED BEST PRICES

6 DURING INITIAL YEAR OF AVAILABILITY OF

7 DRUG.—If the Secretary determines that a

8 manufacturer cannot determine the best price

9 for rebate periods during the first year in which

10 an agreement is in effect until after the end of

11 the year, as part of the agreement the Sec12 retary may require the manufacturer to esti13 mate the best price for rebate periods during

14 the year and provide an adjustment to the re15 bate paid to the State to take into account the

16 difference (if any) between the best price and

17 the estimated best price.’’.

18 (4)(A) Section 1927(d) (42 U.S.C. 1396r–8(d)) is

19 amended—

20 (i) in paragraph (2)—

21 (I) in subparagraph (A), by inserting ‘‘or

22 loss’’ after ‘‘gain’’,

23 (II) by striking subparagraph (I), and

24 (III) by redesignating subparagraphs (J)

25 and (K) as subparagraphs (I) and (J);
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1 (ii) in paragraph (3)—

2 (I) by striking ‘‘described in paragraph

3 (2)’’, and

4 (II) by inserting ‘‘described in paragraph

5 (2)’’ after ‘‘classes of drugs,’’;

6 (iii) by striking paragraph (4) and by redesig7 nating paragraphs (5) through (7) as paragraphs

8 (4) through (6);

9 (iv) in paragraph (6), as so redesignated, by

10 striking ‘‘provided’’ and inserting ‘‘if’’; and

11 (v) by striking the second sentence of para12 graph (6), as so redesignated, and paragraph (8)

13 and inserting the following:

14 ‘‘(7) CONSTRUCTION WITH RESPECT TO FRAUD

15 AND ABUSE.—Nothing in this section shall be con16 strued to restrict the authority of a State to apply

17 sanctions under this Act against any person for

18 fraud or abuse.’’.

19 (B) Section 1927(d)(4), as redesignated by subpara20 graph (A)(iii), shall first apply to drugs dispensed on or

21 after July 1, 1991.

22 (5)(A) Section 1927(f) (42 U.S.C. 1396r–8(f)) is

23 amended to read as follows:

24 ‘‘(f) NO REDUCTIONS IN PHARMACY REIMBURSE25 MENT LIMITS.—
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1 ‘‘(1) IN GENERAL.—During the period begin2 ning on November 5, 1990, and ending on December

3 31, 1994—

4 ‘‘(A) a State may not reduce the amount

5 paid by the State under this title with respect

6 to the ingredient cost of a covered outpatient

7 drug or the dispensing fee for such a drug

8 below the amount in effect as of November 5,

9 1990, and

10 ‘‘(B) the Secretary may not change the

11 regulations in effect on November 5, 1990, gov12 erning the amounts described in subparagraph

13 (A) which are eligible for Federal financial par14 ticipation, to reduce the reimbursement limits

15 described in such regulations.

16 ‘‘(2) CONSTRUCTION.—If the Secretary notified

17 a State before November 5, 1990, that its payment

18 amounts under this title with respect to the ingredi19 ent cost of a covered outpatient drug or the dispens20 ing fee for such a drug were in excess of those per21 mitted under regulations in effect on such date,

22 paragraph (1)(B) shall not be construed as prevent23 ing a State from reducing payment amounts or dis24 pensing fee in order to comply with such regula25 tions.’’.
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1 (B) Not later than April 1, 1994, the Secretary of

2 Health and Human Services shall establish an upper limit

3 on the amount of payment which is eligible for Federal

4 financial participation under title XIX of the Social Secu5 rity Act for each multiple source drug (as defined in sec6 tion 1927(k)(7)(A)(i) of such Act) for which the Food and

7 Drug Administration has rated at least 3 formulations of

8 such drug as therapeutically and pharmaceutically equiva9 lent, regardless of whether all the formulations of such

10 drug are rated as so equivalent. In establishing such a

11 limit for a drug, the Secretary shall take into account only

12 those formulations of the drug which the Food and Drug

13 Administration has rated as therapeutically and pharma14 ceutically equivalent.

15 (6) Section 1927(g) (42 U.S.C. 1396r–8(g)) is

16 amended—

17 (A) by amending paragraph (1) to read as fol18 lows:

19 ‘‘(1) REQUIREMENT FOR DRUG USE REVIEW

20 PROGRAM.—Each State shall provide, by not later

21 than January 1, 1993, for a drug use review pro22 gram for covered outpatient drugs (other than drugs

23 dispensed to residents of nursing facilities) that—

24 ‘‘(A) meets the requirements of paragraph

25 (2), and
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1 ‘‘(B) is intended to assure that prescrip2 tions for such drugs are appropriate, medically

3 necessary, and not likely to lead to adverse

4 medical results.’’;

5 (B) in paragraph (2)—

6 (i) by amending the matter before subpara7 graph (A) to read as follows:

8 ‘‘(2) REQUIREMENTS.—’’,

9 (ii) by amending subparagraph (A) to read

10 as follows:

11 ‘‘(A) PROSPECTIVE DRUG USE REVIEW.—

12 Each drug use review program shall provide for

13 a review of drug therapy before each prescrip14 tion is filled or delivered to an individual receiv15 ing benefits under this title (including counsel16 ing by pharmacists) consistent with standards

17 established by the Secretary. Nothing in this

18 paragraph shall be construed as requiring a

19 pharmacist to provide consultation when an in20 dividual receiving benefits under this title or

21 caregiver of such individual refuses such con22 sultation.’’,

23 (iii) in subparagraph (C)—
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1 (I) by striking ‘‘APPLICATION OF

2 STANDARDS.—’’ and inserting ‘‘STAND3 ARDS.—(i)’’,

4 (II) by striking ‘‘and literature re5 ferred to in subsection (1)(B)’’ and insert6 ing ‘‘described in clause (ii)’’,

7 (III) by striking ‘‘including but not

8 limited to’’ and inserting ‘‘. Such assess9 ment shall include’’,

10 (IV) by striking ‘‘abuse/misuse and,

11 as necessary, introduce remedial strate12 gies,’’ and inserting ‘‘abuse or misuse and

13 introduce remedial strategies’’, and

14 (V) by adding at the end the following

15 new clause:

16 ‘‘(ii) The compendia described in this

17 clause are the American Hospital Formulary

18 Service Drug Information, the United States

19 Pharmacopeia-Drug Information, and the

20 American Medical Association Drug Evalua21 tions.’’, and

22 (iv) by amending subparagraph (D) to

23 read as follows:

24 ‘‘(D) EDUCATIONAL PROGRAM.—The pro25 gram shall educate (directly or by contract)
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1 pharmacists, physicians, and other individuals

2 prescribing or dispensing covered outpatient

3 drugs under the State plan on common drug

4 therapy problems in order to improve prescrib5 ing or dispensing practices.’’;

6 (C) in paragraph (3)—

7 (i) in subparagraph (A), by striking

8 ‘‘(hereinafter’’ and all that follows and inserting

9 ‘‘(in this paragraph referred to as the ‘DUR

10 Board’).’’,

11 (ii) in subparagraph (B), by striking ‘‘51

12 percent’’ and all that follows and inserting ‘‘50

13 percent licensed and actively practicing physi14 cians and at least 1/3 but not more than 50

15 percent licensed and actively practicing phar16 macists.’’,

17 (iii) by amending subparagraph (C) to

18 read as follows:

19 ‘‘(C) RESPONSIBILITIES.—The responsibil20 ities of the DUR Board shall include the follow21 ing:

22 ‘‘(i) Carrying out retrospective drug

23 use review pursuant to paragraph (2)(B).
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1 ‘‘(ii) Establishing and applying stand2 ards for drug use review described in para3 graph (2)(C).

4 ‘‘(iii) Implementing educational pro5 grams described in paragraph (2)(D).

6 ‘‘(iv) Conducting ongoing evaluations

7 of the effectiveness of its programs and ac8 tivities in improving the quality and safety

9 of drug therapy for individuals receiving

10 benefits under the State plan.’’; and

11 (D) by amending subparagraph (D) to read as

12 follows:

13 ‘‘(4) ANNUAL REPORT.—Each State shall sub14 mit a report each year to the Secretary on the na15 ture and scope of the drug use review program

16 under this subsection. Such report shall include an

17 estimate of cost savings resulting from operation of

18 such program.’’.

19 (7) Section 1927(h) (42 U.S.C. 1396r–8(h)) is

20 amended to read as follows:

21 ‘‘(h) ENCOURAGING ELECTRONIC CLAIMS MANAGE22 MENT.—The Secretary shall encourage each single State

23 agency under this title to establish, as its principal means

24 of processing claims for covered outpatient drugs, a point25 of-sale electronic claims management system for the pur-
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1 pose of verifying eligibility, transmitting data on claims,

2 and assisting pharmacists and other authorized persons

3 in applying for and receiving payment under the State

4 plan.’’.

5 (8) Section 1927(i) (42 U.S.C. 1396r–8(i)) is amend6 ed to read as follows:

7 ‘‘(i) ANNUAL REPORT ON REBATE PROGRAM.—Not

8 later than May 1 of each year, the Secretary shall submit

9 to the Committee on Finance of the Senate, the Commit10 tee on Energy and Commerce of the House of Representa11 tives, and the Committee on Aging of the Senate a report

12 on the operation of the rebate agreements required for

13 covered outpatient drugs under this section in the preced14 ing fiscal year, and shall include in the report such infor15 mation in addition to the information required to be re16 ported under section 601(d) of the Veterans Health Care

17 Act of 1992 as the Secretary considers appropriate.’’.

18 (9) Section 1927(j) (42 U.S.C. 1396r–8(j)) is amend19 ed to read as follows:

20 ‘‘(j) EXEMPTION FROM CERTAIN REQUIREMENTS

21 FOR CERTAIN HEALTH MAINTENANCE ORGANIZATIONS

22 AND HOSPITALS.—

23 ‘‘(1) CERTAIN HEALTH MAINTENANCE ORGANI24 ZATIONS AND PHARMACIES.—The requirements of
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1 subsections (g) and (h) shall not apply with respect

2 to covered outpatient drugs dispensed by—

3 ‘‘(A) an entity which receives payment

4 under a prepaid capitation basis or under any

5 other risk basis in accordance with section

6 1903(m)(2)(A) for services provided under the

7 State plan; or

8 ‘‘(B) a pharmacy that is owned or operated

9 by a qualified health maintenance organization

10 (as defined in section 1310(d) of the Public

11 Health Service Act) that operates its own pro12 spective drug use review program.

13 ‘‘(2) HOSPITALS WITH INDEPENDENT FOR14 MULARY SYSTEMS.—

15 ‘‘(A) IN GENERAL.—The requirements of

16 subsections (g) and (h) shall not apply with re17 spect to covered outpatient drugs dispensed by

18 a hospital providing medical assistance under

19 the State plan that dispenses such drugs under

20 a drug formulary system.

21 ‘‘(B) APPLICATION OF STATE FOR22 MULARY.—Nothing in subparagraph (A) shall

23 be construed to permit payment to be made

24 under the State plan for a covered outpatient

25 drug that is included in a drug formulary but
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1 that is not included in the State formulary

2 under subsection (d)(5).

3 ‘‘(3) CONSTRUCTION IN DETERMINING BEST

4 PRICE.—Nothing in this subsection shall be con5 strued to exclude any covered outpatient drugs sub6 ject to the provisions of this subsection from the de7 termination of the best price (as defined in sub8 section (c)(1)(C)) for such drugs.’’.

9 (10) Section 1927(k) (42 U.S.C. 1396r–8(k)) is

10 amended—

11 (A) in paragraph (1), by striking ‘‘calendar

12 quarter’’ and inserting ‘‘rebate period’’;

13 (B) in paragraph (2)—

14 (i) in the matter before clause (i) of sub15 paragraph (A), by striking ‘‘paragraph (5)’’ and

16 inserting ‘‘subparagraph (D)’’,

17 (ii) by striking ‘‘, and’’ at the end of sub18 paragraph (A),

19 (iii) by striking the period at the end of

20 subparagraph (C) and inserting ‘‘; and’’, and

21 (iv) by adding at the end the following new

22 subparagraph:

23 ‘‘(D) a drug which may be sold without a

24 prescription (commonly referred to as an ‘over25 the-counter drug’), if the drug is prescribed by
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1 a physician (or other person authorized to pre2 scribe under State law).’’;

3 (C) in paragraph (3)—

4 (i) in subparagraph (E), by striking ‘‘****

5 emergency room visits’’,

6 (ii) in subparagraph (F), by striking

7 ‘‘sevices’’ and inserting ‘‘services’’, and

8 (iii) in subparagraph (H), by inserting

9 ‘‘services’’ after ‘‘dialysis’’;

10 (D) by striking paragraph (4);

11 (E) by amending paragraph (5) to read as fol12 lows:

13 ‘‘(5) MANUFACTURER.—The term ‘manufac14 turer’ means, with respect to a covered outpatient

15 drug,—

16 ‘‘(A) the entity (if any) that both manufac17 tures and distributes the drug, or

18 ‘‘(B) if no such entity exists, the entity

19 that distributes the drug.

20 Such term does not include a wholesale distributor

21 of the drug that does not hold a National Drug Code

22 number for the drug or a retail pharmacy licensed

23 under State law.’’;

24 (F) in paragraph (6), by striking ‘‘, which ap25 pears’’ and all that follows and inserting ‘‘which is
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1 accepted by any of the compendia described in sub2 section (g)(2)(C)(ii).’’;

3 (G) in paragraph (7)—

4 (i) in subparagraph (A)(i), by striking

5 ‘‘calendar quarter’’ and inserting ‘‘rebate pe6 riod’’,

7 (ii) in subparagraph (A)(i), by striking

8 ‘‘paragraph (5)’’ and inserting ‘‘paragraph

9 (2)(D)’’,

10 (iii) in subparagraph (A)(ii), by inserting

11 ‘‘or product licensing application’’ after ‘‘appli12 cation’’,

13 (iv) in subparagraph (C)(i), by striking

14 ‘‘pharmaceuutically’’ and inserting ‘‘pharma15 ceutically’’, and

16 (v) in subparagraph (C)(iii), by striking ‘‘,

17 provided that’’ and inserting ‘‘and’’; and

18 (H) by redesignating paragraph (8) as para19 graph (9) and by inserting after paragraph (7) the

20 following new paragraph:

21 ‘‘(8) REBATE PERIOD.—The term ‘rebate pe22 riod’ means, with respect to an agreement under

23 subsection (a), a calendar quarter or other period

24 specified with respect to the agreement under sub25 section (b)(1)(A) for the payment of rebates.’’.
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1 (d) FUNDING.—Section 4401(b)(2) of OBRA–1990

2 is amended by striking ‘‘75 percent,’’ and all that follows

3 and inserting ‘‘75 percent.’’.

4 (e) DEMONSTRATION PROJECTS.—Section

5 4401(c)(1) of OBRA–1990 is amended—

6 (A) in subparagraph (A), by striking ‘‘10’’ and

7 inserting ‘‘5’’; and

8 (B) in subparagraph (C), by striking ‘‘regi9 ment’’ and inserting ‘‘regimen’’.

10 (f) STUDIES.—Section 4401(d) of OBRA–1990 is

11 amended—

12 (1) in paragraph (1)(A), by striking ‘‘other in13 stitutional facilities, and managed care plans’’ and

14 inserting ‘‘nursing facilities, intermediate care facili15 ties for the mentally retarded, and health mainte16 nance organizations’’;

17 (2) in paragraph (1)(B), by striking ‘‘under

18 this subsection’’ and inserting ‘‘under this para19 graph’’;

20 (3) in paragraph (1)(B)(i), by striking ‘‘under

21 this section’’ and inserting ‘‘under section 1927 of

22 the Social Security Act’’;

23 (4) in paragraph (1)(B)(ii)—
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1 (A) by striking ‘‘drug use review’’ the sec2 ond place it appears and inserting ‘‘the type of

3 drug use review that is’’, and

4 (B) by striking ‘‘under this section’’ and

5 inserting ‘‘under such section’’;

6 (5) in paragraph (1)(B)(iii), by striking ‘‘under

7 this title’’ and inserting ‘‘under title XIX of the So8 cial Security Act’’;

9 (6) in paragraph (1)(C)—

10 (A) by striking ‘‘May 1, 1991’’ and insert11 ing ‘‘May 1, 1992’’, and

12 (B) by striking ‘‘hereafter’’;

13 (7) in paragraph (2), by striking ‘‘the Commit14 tees on Aging of the Senate and House of Rep15 resentatives an annual report’’ and inserting ‘‘the

16 Committee on Aging of the Senate a report’’;

17 (8) in paragraph (3)—

18 (A) in subparagraph (A), by striking ‘‘,

19 acting in consultation with the Comptroller

20 General,’’, and

21 (B) in subparagraph (B)—

22 (i) by striking ‘‘December 31, 1991,

23 the Secretary and the Comptroller Gen24 eral’’ and inserting ‘‘June 1, 1993, the

25 Secretary’’, and
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1 (ii) by striking ‘‘the Committees on

2 Aging of the Senate and the House of Rep3 resentatives’’ and inserting ‘‘the Commit4 tee on Aging of the Senate’’;

5 (9) in paragraph (4)(A), by striking ‘‘each’’ and

6 by striking the semicolon and inserting a comma;

7 and

8 (10) by striking paragraphs (5) and (6).

9 PART III—RESTRICTIONS ON DIVESTITURE OF

10 ASSETS AND ESTATE RECOVERY

11 SEC. 5111. TRANSFER OF ASSETS.

12 (a) PERIOD OF INELIGIBILITY.—

13 (1) EXTENDING LOOK-BACK PERIOD TO 36

14 MONTHS.—Section 1917(c)(1) (42 U.S.C.

15 1396p(c)(1)) is amended by striking ‘‘30-month pe16 riod’’ and inserting ‘‘36-month period’’.

17 (2) ELIMINATING 30-MONTH LIMIT ON PERIOD

18 OF INELIGIBILITY.—The second sentence of such

19 section is amended by striking ‘‘equal to’’ and all

20 that follows and inserting the following: ‘‘equal to—

21 ‘‘(A) the total uncompensated value of the re22 sources so transferred; divided by

23 ‘‘(B) the average monthly cost, to a private pa24 tient at the time of the application, of nursing facil25 ity services in the State or, at State option, in the
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1 community in which the individual is institutional2 ized.’’.

3 (3) CUMULATIVE PERIODS OF INELIGIBILITY IN

4 THE CASE OF MULTIPLE TRANSFERS.—Such sen5 tence is further amended by inserting ‘‘(or, in the

6 case of a transfer which occurs during a period of

7 ineligibility attributable to a previous transfer, the

8 first month after the end of all periods of ineligibil9 ity attributable to any previous transfer)’’ after

10 ‘‘shall begin with the month in which such resources

11 were transferred’’.

12 (b) CRITERIA FOR UNDUE HARDSHIP EXCEPTION.—

13 Section 1917(c)(2)(D) (42 U.S.C. 1396p(c)(2)(D)) is

14 amended to read as follows:

15 ‘‘(D) the State agency determines, under proce16 dures established by the State (in accordance with

17 standards specified by the Secretary) that the denial

18 of eligibility would work an undue hardship (in ac19 cordance with criteria established by the Sec20 retary).’’.

21 (c) TREATMENT OF JOINTLY HELD ASSETS.—Sec22 tion 1917(c) (42 U.S.C. 1936p(c)) is further amended by

23 adding at the end the following new paragraph:

24 ‘‘(6) For purposes of this subsection, in the case of

25 an asset held by an individual in common with another
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1 person or persons in a joint tenancy or a similar arrange2 ment, the asset (or the affected portion thereof) shall be

3 considered to be transferred by such individual when any

4 action is taken, either by such individual or by any other

5 person, that reduces or eliminates such individual’s owner6 ship or control of such asset.’’.

7 (d) MEDICAID QUALIFYING TRUSTS.—Section

8 1902(k) (42 U.S.C. 1396a(k)) is amended to read as fol9 lows:

10 ‘‘(k) TREATMENT OF TRUST AMOUNTS.—

11 ‘‘(1) IN GENERAL.—For purposes of determin12 ing an individual’s eligibility for or amount of bene13 fits under a State plan under this title, subject to

14 paragraph (4), the following rules shall apply to a

15 trust (which term includes, for purposes of this sub16 section, any similar legal instrument or device, such

17 as an annuity) established by such individual:

18 ‘‘(A) REVOCABLE TRUSTS.—In the case of

19 a revocable trust—

20 ‘‘(i) the corpus of the trust shall be

21 considered resources available to the indi22 vidual,

23 ‘‘(ii) payments from the trust to or

24 for the benefit of the individual shall be

25 considered income of the individual, and
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1 ‘‘(iii) any other payments from the

2 trust shall be considered a transfer of as3 sets by the individual subject to section

4 1917(c).

5 ‘‘(B) IRREVOCABLE TRUSTS WHICH MAY

6 BENEFIT GRANTOR.—In the case of an irrev7 ocable trust, if there are any circumstances

8 under which payment from the trust could be

9 made to or for the benefit of the individual—

10 ‘‘(i) the corpus of the trust (or that

11 portion of the corpus from which, or from

12 the increase whereof, payment to the indi13 vidual could be made) shall be considered

14 resources available to the individual, and

15 payments from that portion of the corpus

16 (or increase)—

17 ‘‘(I) to or for the benefit of the

18 individual, shall be considered income

19 of the individual, and

20 ‘‘(II) for any other purpose, shall

21 be considered a transfer of assets by

22 the individual subject to the provisions

23 of section 1917(c); and

24 ‘‘(ii) any portion of the trust from

25 which (or from the income whereof) no
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1 payment could under any circumstances be

2 made to the individual shall be considered,

3 as of the date of establishment of the trust

4 (or, if later, the date on which payment to

5 the individual was foreclosed), a transfer of

6 assets by the individual subject to section

7 1917(c), and payments from such portion

8 of the trust after such date shall be dis9 regarded.

10 ‘‘(C) IRREVOCABLE TRUSTS WHICH CAN11 NOT BENEFIT GRANTOR.—In the case of an ir12 revocable trust, if no payment may be made

13 from the trust under any circumstances to or

14 for the benefit of the individual—

15 ‘‘(i) the corpus of the trust shall be

16 considered, as of the date of establishment

17 of the trust (or, if later, the date on which

18 payment to the individual was foreclosed),

19 a transfer of assets subject to section

20 1917(c), and

21 ‘‘(ii) payments from the trust after

22 the date specified in clause (i) shall be dis23 regarded.

24 ‘‘(2) DETERMINATION OF GRANTOR.—
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1 ‘‘(A) TREATMENT OF ACTS BY INDIVIDUAL

2 AND OTHERS.—For purposes of this subsection,

3 an individual shall be considered to have estab4 lished a trust if—

5 ‘‘(i) the individual (or the individual’s

6 spouse), or a person (including a court or

7 administrative body) with legal authority

8 to act in place of or on behalf of such indi9 vidual (or spouse), or any person (includ10 ing any court or administrative body) act11 ing at the direction or upon the request of

12 such individual (or spouse), established

13 (other than by will) such a trust, and

14 ‘‘(ii) assets of the individual (as de15 fined in subparagraph (B)) were used to

16 form all or part of the corpus of such

17 trust.

18 ‘‘(B) ASSETS.—For purposes of this para19 graph, assets of an individual include all income

20 and resources of the individual and of the indi21 vidual’s spouse, including any income or re22 sources which the individual (or spouse) is enti23 tled to but does not receive because of action by

24 the individual (or spouse), by a person (includ25 ing a court or administrative body) with legal
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1 authority to act in place of or on behalf of such

2 individual (or spouse), or by any person (includ3 ing any court or administrative body) acting at

4 the direction or upon the request of such indi5 vidual (or spouse).

6 ‘‘(C) TRUSTS CONTAINING ASSETS OF

7 MORE THAN ONE INDIVIDUAL.—In the case of

8 a trust whose corpus includes assets of an indi9 vidual (as determined pursuant to subpara10 graph (A)) and assets of any other person or

11 persons, the provisions of this subsection shall

12 apply to the portion of the trust attributable to

13 the assets of the individual.

14 ‘‘(3) APPLICATION; RELATION TO OTHER PRO15 VISIONS.—Subject to paragraph (4), this subsection

16 shall apply without regard to—

17 ‘‘(A) the purposes for which the trust is es18 tablished,

19 ‘‘(B) whether the trustees have or exercise

20 any discretion under the trust,

21 ‘‘(C) any restrictions on when or whether

22 distributions may be made from the trust, or

23 ‘‘(D) any restrictions on the use of dis24 tributions from the trust.

25 ‘‘(4) EXCEPTIONS AND HARDSHIP WAIVER.—
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1 ‘‘(A) EXCEPTION FOR CERTAIN TRUSTS.—

2 This subsection shall not apply to any of the

3 following trusts:

4 ‘‘(i) A trust established for the benefit

5 of a disabled individual (as determined

6 under section 1614(a)(3)) by a parent,

7 grandparent, or other representative payee

8 of the individual.

9 ‘‘(ii) A trust established in a State for

10 the benefit of an individual if—

11 ‘‘(I) the trust is composed only of

12 pension, Social Security, and other in13 come to the individual (and accumu14 lated income in the trust),

15 ‘‘(II) the State will receive any

16 amounts remaining in the trust upon

17 the death of the individual, and

18 ‘‘(III) the State makes medical

19 assistance available to individuals de20 scribed in section

21 1902(a)(10)(A)(ii)(V), but does not

22 make such assistance available to any

23 group of individuals under section

24 1902(a)(10)(C).
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1 ‘‘(B) SPECIAL TREATMENT OF ANNU2 ITIES.—In this subsection, the term ‘trust’ in3 cludes an annuity only to such extent and in

4 such manner as the Secretary specifies.

5 ‘‘(C) HARDSHIP WAIVER.—The State

6 agency shall establish procedures (in accordance

7 with standards specified by the Secretary)

8 under which the agency waives the application

9 of this subsection with respect to an individual

10 if the individual establishes (under criteria es11 tablished by the Secretary) that such applica12 tion would work an undue hardship on the indi13 vidual.’’.

14 (e) EFFECTIVE DATE.—(1) The amendments made

15 by this section shall apply, except as provided in this sub16 section, to payments under title XIX of the Social Security

17 Act for calendar quarters beginning on or after October

18 1, 1993, without regard to whether or not final regulations

19 to carry out such amendments have been promulgated by

20 such date.

21 (2) The amendments made by this section shall not

22 apply—

23 (A) to medical assistance provided for services

24 furnished before October 1, 1993,
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1 (B) with respect to resources disposed of before

2 May 11, 1993,

3 (C) with respect to trusts established before

4 May 11, 1993, or

5 (D) with respect to inter-spousal transfers.

6 SEC. 5112. MEDICAID ESTATE RECOVERIES.

7 (a) REQUIRING ESTABLISHMENT OF ESTATE RECOV8 ERY PROGRAMS.—

9 (1) IN GENERAL.—Section 1902(a)(51) (42

10 U.S.C. 1396a(a)(51)) is amended by striking ‘‘and

11 (B)’’ and inserting ‘‘(B) provide for an estate recov12 ery program that meets the requirements of section

13 1917(b)(1), and (C)’’.

14 (2) REQUIREMENTS FOR ESTATE RECOVERY

15 PROGRAMS.—Section 1917(b) (42 U.S.C. 1396p(b))

16 is amended—

17 (A) in paragraph (1)—

18 (i) by striking ‘‘(b)(1)’’ and inserting

19 ‘‘(2)’’, and

20 (ii) by striking ‘‘(a)(1)(B)’’ and in21 serting ‘‘(a)(1)(B)(i)’’;

22 (B) in paragraph (2), by striking ‘‘(2) Any

23 adjustment or recovery under’’ and inserting

24 ‘‘(3) Any adjustment or recovery under an es25 tate recovery program under’’; and
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1 (C) by inserting before paragraph (2), as

2 designated by subparagraph (A), the following:

3 ‘‘(b)(1) For purposes of section 1902(a)(51)(B), the

4 requirements for an estate recovery program of a State

5 are as follows:

6 ‘‘(A) The program provides for identifying and

7 tracking (and, at the option of the State, preserving)

8 resources (whether excluded or not) of individuals

9 who are furnished any of the following long-term

10 care services for which medical assistance is pro11 vided under this title:

12 ‘‘(i) Nursing facility services.

13 ‘‘(ii) Home and community-based services

14 (as defined in section 1915(d)(5)(C)(i)).

15 ‘‘(iii) Services described in section

16 1905(a)(14) (relating to services in an institu17 tion for mental diseases).

18 ‘‘(iv) Home and community care provided

19 under section 1929.

20 ‘‘(v) Community supported living arrange21 ments services provided under section 1930.

22 ‘‘(B) The program provides for promptly

23 ascertaining—

24 ‘‘(i) when such an individual dies;
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1 ‘‘(ii) in the case of such an individual who

2 was married at the time of death, when the sur3 viving spouse dies; and

4 ‘‘(iii) at the option of the State, cases in

5 which adjustment or recovery may not be made

6 at the time of death because of the application

7 of paragraph (3)(A) or paragraph (3)(B).

8 ‘‘(C)(i) The program provides for the collection

9 consistent with paragraph (3) of an amount (not to

10 exceed the amount described in clause (ii)) from—

11 ‘‘(I) the estate of the individual;

12 ‘‘(II) in the case of an individual described

13 in subparagraph (B)(ii), from the estate of the

14 surviving spouse; or

15 ‘‘(III) at the option of the State, in a case

16 described in subparagraph (B)(iii), from the ap17 propriate person.

18 ‘‘(ii) The amount described in this clause is the

19 amount of medical assistance correctly paid under

20 this title for long-term care services described in

21 subparagraph (A) furnished on behalf of the individ22 ual.’’.

23 (b) HARDSHIP WAIVER.—Section 1917(b) (42 U.S.C.

24 1396p(b)) is further amended by adding at the end the

25 following new paragraph:
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1 ‘‘(4) The State agency shall establish procedures (in

2 accordance with standards specified by the Secretary)

3 under which the agency waives the application of this sub4 section if such application would work an undue hardship

5 (in accordance with criteria established by the Sec6 retary).’’.

7 (c) DEFINITION OF ESTATE.—Section 1917(b) (42

8 U.S.C. 1396(b)) is further amended by adding at the end

9 the following new paragraph:

10 ‘‘(5) For purposes of this section, the term ‘estate’,

11 with respect to a deceased individual, includes all real and

12 personal property and other assets in which the individual

13 had any legally cognizable title or interest at the time of

14 his death, including such assets conveyed to a survivor,

15 heir, or assign of the deceased individual through joint

16 tenancy, survivorship, life estate, living trust, or other ar17 rangement.’’.

18 (d) EFFECTIVE DATE.—

19 (1)(A) The amendments made by subsections

20 (a) and (b) apply (except as provided under subpara21 graph (B)) to payments under title XIX of the So22 cial Security Act for calendar quarters beginning on

23 or after October 1, 1993, without regard to whether

24 or not final regulations or standards to carry out
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1 such amendments have been promulgated by such

2 date.

3 (B) In the case of a State plan for medical as4 sistance under title XIX of the Social Security Act

5 which the Secretary of Health and Human Services

6 determines requires State legislation (other than leg7 islation appropriating funds) in order for the plan to

8 meet the additional requirements imposed by the

9 amendments made by subsections (a) and (b), the

10 State plan shall not be regarded as failing to comply

11 with the requirements of such title solely on the

12 basis of its failure to meet these additional require13 ments before the first day of the first calendar quar14 ter beginning after the close of the first regular ses15 sion of the State legislature that begins after the

16 date of the enactment of this Act. For purposes of

17 the previous sentence, in the case of a State that has

18 a 2-year legislative session, each year of such session

19 shall be deemed to be a separate regular session of

20 the State legislature.

21 (2) The amendments made by this section shall

22 not apply to individuals who died before October 1,

23 1993.
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1 SEC. 5113. CLOSING LOOPHOLE PERMITTING WEALTHY IN2 DIVIDUALS TO QUALIFY FOR MEDICAID.

3 (a) IN GENERAL.—Section 1902(r)(2) (42 U.S.C.

4 1396a(r)(2)) is amended by adding at the end the follow5 ing:

6 ‘‘(C)(i) Notwithstanding subparagraph (A), except as

7 provided in clause (ii), a State plan may not provide pur8 suant to this paragraph for disregarding any assets—

9 ‘‘(I) to the extent that payments are made

10 under a long-term care insurance policy; or

11 ‘‘(II) because an individual has received (or is

12 entitled to receive) benefits for a specified period of

13 time under a long-term care insurance policy.

14 ‘‘(ii) Clause (i) shall not apply to State plan provi15 sions that are approved as of May 14, 1993.’’.

16 (b) EFFECTIVE DATE.—The amendment made by

17 subsection (a) shall take effect on the date of the enact18 ment of this Act.

19 PART IV—IMPROVEMENT IN IDENTIFICATION

20 AND COLLECTION OF THIRD PARTY PAYMENTS

21 SEC. 5116. LIABILITY OF THIRD PARTIES TO PAY FOR CARE

22 AND SERVICES.

23 (a) LIABILITY OF ERISA PLANS.—(1) Section

24 1902(a)(25)(A) (42 U.S.C. 1396a(a)(25)(A)) is amended

25 by striking ‘‘insurers)’’ and inserting ‘‘insurers and group

26 health plans (as defined in section 607(1) of the Employee
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1 Retirement Income Security Act of 1974) and including

2 a service benefit plan and a health maintenance organiza3 tion)’’.

4 (2) Section 1903(o) of such Act (42 U.S.C. 1396b(o))

5 is amended by striking ‘‘regulation)’’ and inserting ‘‘regu6 lation and including a group health plan (as defined in

7 section 607(1) of the Employee Retirement Income Secu8 rity Act of 1974)), a service benefit plan, and a health

9 maintenance organization’’.

10 (b) REQUIRING STATE TO PROHIBIT INSURERS

11 FROM TAKING MEDICAID STATUS INTO ACCOUNT.—Sec12 tion 1902(a)(25) (42 U.S.C. 1396a(a)(25)) is amended—

13 (1) by striking ‘‘and’’ at the end of subpara14 graph (F);

15 (2) by adding ‘‘and’’ at the end of subpara16 graph (G); and

17 (3) by adding after subparagraph (G) the fol18 lowing new subparagraph:

19 ‘‘(H) that the State prohibits any health

20 insurer (including a group health plan, as de21 fined in section 607(1) of the Employee Retire22 ment Income Security Act of 1974, a service

23 benefit plan, and a health maintenance organi24 zation), in enrolling an individual or in making

25 any payments for benefits to the individual or
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1 on the individual’s behalf, from taking into ac2 count that the individual is eligible for or is

3 provided medical assistance under a State

4 plan;’’.

5 (c) STATE RIGHT TO SUBROGATION.—Section

6 1902(a)(25) (42 U.S.C. 1396a(a)(25)), as amended by

7 subsection (b), is further amended—

8 (1) by striking ‘‘and’’ at the end of subpara9 graph (G);

10 (2) by adding ‘‘and’’ at the end of subpara11 graph (H); and

12 (3) by adding after subparagraph (H) the fol13 lowing new subparagraph:

14 ‘‘(I) that to the extent that payment has

15 been made under the State plan for medical as16 sistance in any case where a third party has a

17 legal liability to make payment for such assist18 ance, the State is subrogated to the right of any

19 other party to payment for such assistance;’’.

20 (d) EFFECTIVE DATE.—(1) Except as provided in

21 paragraph (2), the amendments made by subsections

22 (a)(1), (b), and (c) shall apply to calendar quarters begin23 ning on or after October 1, 1993, without regard to wheth24 er or not final regulations to carry out such amendments

25 have been promulgated by such date.
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1 (2) In the case of a State plan for medical assistance

2 under title XIX of the Social Security Act which the Sec3 retary of Health and Human Services determines requires

4 State legislation (other than legislation appropriating

5 funds) in order for the plan to meet the additional require6 ments imposed by the amendments made by subsections

7 (a) and (b), the State plan shall not be regarded as failing

8 to comply with the requirements of such title solely on the

9 basis of its failure to meet these additional requirements

10 before the first day of the first calendar quarter beginning

11 after the close of the first regular session of the State leg12 islature that begins after the date of the enactment of this

13 Act. For purposes of the previous sentence, in the case

14 of a State that has a 2-year legislative session, each year

15 of such session shall be deemed to be a separate regular

16 session of the State legislature.

17 (3) The amendment made by subsection (a)(2) shall

18 apply to items and services furnished on or after October

19 1, 1993.

20 SEC. 5117. HEALTH COVERAGE CLEARINGHOUSE.

21 (a) IN GENERAL.—The Social Security Act is amend22 ed by adding at the end the following new title:
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1 ‘‘TITLE XXI—HEALTH COVERAGE

2 CLEARINGHOUSE

3 ‘‘ESTABLISHMENT OF CLEARINGHOUSE

4 ‘‘SEC. 2101. (a) IN GENERAL.—The Secretary shall

5 establish and operate a Health Coverage Clearinghouse (in

6 this title referred to as the ‘Clearinghouse’) for the pur7 pose of identifying, for beneficiaries of a covered health

8 program (as defined in subsection (c)), third parties

9 (which may include a covered health program) which may

10 be liable for payment for health care items and services

11 furnished to such beneficiaries under such program.

12 ‘‘(b) DIRECTOR.—The Clearinghouse shall be headed

13 by a Director (in this title referred to as the ‘Director’)

14 appointed by the Secretary.

15 ‘‘(c) COVERED HEALTH PROGRAM DEFINED.—In

16 this title, the term ‘covered health program’ means any

17 of the following under which payment is made for health

18 care items or services furnished to a beneficiary:

19 ‘‘(1) The medicare program under title XVIII.

20 ‘‘(2) A State plan for medical assistance under

21 title XIX (including a State plan operating under a

22 Statewide waiver under section 1115).

23 ‘‘(3) The Indian Health Service and any pro24 gram under the Indian Health Care Improvement

25 Act.
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1 ‘‘(4) A State program under title V that pro2 vides payment for items or services.

3 ‘‘(d) OTHER DEFINITIONS.—In this title:

4 ‘‘(1) The term ‘administrator’ means, with re5 spect to the covered health program described in—

6 ‘‘(A) subsection (c)(1), the Administrator

7 of the Health Care Financing Administration;

8 ‘‘(B) subsection (c)(2), the single State

9 agency referred to in section 1902(a)(5);

10 ‘‘(C) subsection (c)(3), the Director of the

11 Indian Health Service; and

12 ‘‘(D) subsection (c)(4), the State agency

13 receiving funds under title V.

14 ‘‘(2) The term ‘group health plan’ has the

15 meaning given such term in section

16 6103(l)(12)(E)(ii) of such Code.

17 ‘‘(3) The term ‘qualified employer’ has the

18 meaning given such term in section

19 6103(l)(12)(E)(iii) of the Internal Revenue Code of

20 1986.

21 ‘‘PROVISION OF INFORMATION

22 ‘‘SEC. 2102. (a) REQUEST FOR INFORMATION.—An

23 administrator of a covered health program may request

24 from the Director information concerning the employment

25 and group health coverage of a program beneficiary, the

26 beneficiary’s spouse, and (if the beneficiary is a dependent
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1 child) the beneficiary’s parents. The Director shall provide

2 such information if the request—

3 ‘‘(1) is in such form and manner and at such

4 a time as the Director may require, and

5 ‘‘(2) specifies the name and tax identification

6 number of the beneficiary.

7 ‘‘(b) DATA MATCHING PROGRAM.—

8 ‘‘(1) REQUEST BY DIRECTOR.—The Director

9 shall, at such intervals as the Director finds appro10 priate, transmit to the Secretary of the Treasury the

11 names and tax identification numbers of bene12 ficiaries with respect to whom a request has been

13 made pursuant to subsection (a), and request that

14 such Secretary disclose to the Commissioner of So15 cial Security the following information:

16 ‘‘(A) Whether the beneficiary is married

17 and, if so, the name of the spouse and such

18 spouse’s tax identification number.

19 ‘‘(B) If the beneficiary is a dependent

20 child, the name of and tax identification num21 bers of the beneficiary’s parents.

22 ‘‘(2) INFORMATION FROM COMMISSIONER OF

23 SOCIAL SECURITY.—The Secretary, acting through

24 the Commissioner of Social Security, shall, upon
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1 written request from the Director, disclose to the Di2 rector, the following information:

3 ‘‘(A) For each individual who is identified

4 as having received wages (as defined in section

5 3401(a) of the Internal Revenue Code of 1986)

6 from, and as having available coverage under a

7 group health plan of, an employer in a previous

8 year—

9 ‘‘(i) the name and taxpayer identifica10 tion number of the individual;

11 ‘‘(ii) the name, address, and taxpayer

12 identification number of the employer, and

13 whether such employer is a qualified em14 ployer; and

15 ‘‘(iii) whether the employer has made

16 available a group health plan to the em17 ployee and the plan coverage provided (if

18 any) with respect to the employee and fam19 ily members of the employee under the

20 group health plan.

21 ‘‘(B) For each individual who is identified

22 as married and whose spouse is identified as

23 having received wages (as defined in section

24 3401(a) of the Internal Revenue Code of 1986)

25 from, and as having available coverage under a
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1 group health plan of, an employer in a previous

2 year—

3 ‘‘(i) the name and taxpayer identifica4 tion number of the individual and of the

5 individual’s spouse;

6 ‘‘(ii) the name, address, and taxpayer

7 identification number of the spouse’s em8 ployer, and whether such employer is a

9 qualified employer; and

10 ‘‘(iii) whether the spouse’s employer

11 has made available a group health plan to

12 the spouse and the plan coverage provided

13 (if any) with respect to the spouse and

14 family members of the spouse under the

15 group health plan.

16 ‘‘(C) For each individual who is identified

17 as a dependent child and whose parent is iden18 tified as having received wages (as defined in

19 section 3401(a) of the Internal Revenue Code

20 of 1986) from, and as having available coverage

21 under a group health plan of, an employer in a

22 previous year—

23 ‘‘(i) the name and taxpayer identifica24 tion number of the individual and of the

25 individual’s parent;
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1 ‘‘(ii) the name, address, and taxpayer

2 identification number of the parent’s em3 ployer, and whether such employer is a

4 qualified employer; and

5 ‘‘(iii) whether the parent’s employer

6 has made available a group health plan to

7 the parent and the plan coverage provided

8 (if any) with respect to the parent and de9 pendent children of the parent under the

10 group health plan.

11 ‘‘(3) INFORMATION FROM EMPLOYERS.—The

12 Director shall—

13 ‘‘(A) request, from the employer of each

14 individual (including each spouse) with respect

15 to whom information was received from the

16 Commissioner of Social Security pursuant to

17 paragraph (2), specific information concerning

18 coverage of such individual (and of the individ19 ual’s spouse and dependent children) under the

20 employer’s group health plan (including the pe21 riod and nature of the coverage, and the name,

22 address, and identifying number of the plan),

23 and

24 ‘‘(B) furnish the information received in

25 response to such request with respect to an in-
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1 dividual (or such individual’s spouse or depend2 ent children) to the administrator requesting

3 such information pursuant to subsection (a).

4 ‘‘REQUIREMENT THAT EMPLOYERS FURNISH

5 INFORMATION

6 ‘‘SEC. 2103. (a) IN GENERAL.—An employer shall

7 furnish to the Director the information requested pursu8 ant to section 2102(b)(3) within 30 days after receipt of

9 such a request.

10 ‘‘(b) SUNSET ON REQUIREMENT.—Subsection (a)

11 shall not apply to inquiries made after September 30,

12 1998.

13 ‘‘(c) CIVIL MONEY PENALTY FOR FAILURE TO CO14 OPERATE.—

15 ‘‘(1) IN GENERAL.—An employer (other than a

16 Federal or other governmental entity) who willfully

17 or repeatedly fails to provide timely and accurate re18 sponse to a request for information pursuant to sec19 tion 2102(b)(3) shall be subject, in addition to any

20 other penalties that may be prescribed by law, to a

21 civil money penalty of not to exceed $1,000 for each

22 individual with respect to whom such a request is

23 made.

24 ‘‘(2) ENFORCEMENT AUTHORITY.—In cases of

25 failure to respond to the Director in accordance with

26 subsection (a) to inquiries relating to requests pur-
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1 suant to section 2102, the provisions of section

2 1128A (other than subsections (a) and (b)) shall

3 apply to civil money penalties under paragraph (1)

4 in the same manner as such provisions apply to pen5 alties or proceedings under section 1128A(a).

6 ‘‘DATA BANK

7 ‘‘SEC. 2104. (a) MAINTENANCE OF INFORMATION.—

8 The Clearinghouse shall maintain a data bank, containing

9 information on individuals obtained pursuant to this title.

10 Individual information in the data bank shall be retained

11 for not less than one year after the date the information

12 was obtained.

13 ‘‘(b) DISCLOSURE OF INFORMATION IN DATA

14 BANK.—

15 ‘‘(1) IN GENERAL.—The Director is authorized

16 (subject to paragraph (2)) to disclose any informa17 tion in the data bank established pursuant to sub18 section (a) with respect to an individual (or an indi19 vidual’s spouse or parent)—

20 ‘‘(A) to the Commissioner of Social Secu21 rity, the Secretary of the Treasury, administra22 tors, employers, and insurers, to the extent nec23 essary to assist such administrators;

24 ‘‘(B) to Federal and State law enforcement

25 officials responsible for enforcement of civil or

26 criminal laws, in connection with investigations
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1 or administrative or judicial law enforcement

2 proceedings relating to a covered health pro3 gram; and

4 ‘‘(C) for research or statistical purposes.

5 ‘‘(2) RESTRICTIONS ON DISCLOSURE.—Informa6 tion in the data bank may be disclosed under this

7 subsection only for purposes of, and to the extent

8 necessary in, determining the extent to which an in9 dividual is covered under any group health plan.

10 ‘‘(c) USE OF CONTRACTORS.—The responsibilities of

11 the Clearinghouse under this section may be carried out

12 by contract.

13 ‘‘(d) FEES.—The Clearinghouse shall—

14 ‘‘(1) establish fees for services under this sec15 tion designed to cover the full costs to the Clearing16 house of providing such services, and

17 ‘‘(2) require the payment of such fees to pro18 vide such services.’’.

19 (b) CONFORMING MEDICARE AMENDMENTS.—Sec20 tion 1862(b)(5) (42 U.S.C. 1395y(b)(5)) is amended—

21 (1) in subparagraph (A)(i)—

22 (A) by striking ‘‘Secretary of the Treas23 ury’’ and inserting ‘‘Director of the Health Cov24 erage Clearinghouse’’,
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1 (B) by striking ‘‘(as defined in section

2 6103(l)(12) of the Internal Revenue Code of

3 1986)’’ and inserting ‘‘(as defined in clause

4 (iii))’’, and

5 (C) by striking ‘‘and request’’ and all that

6 follows and inserting a period;

7 (2) in subparagraph (A)(ii)—

8 (A) by striking ‘‘the Commissioner of the

9 Social Security Administration’’ and all that

10 follows and inserting ‘‘the Director of the

11 Health Coverage Clearinghouse to obtain and

12 disclose to the Administrator, pursuant to sec13 tion 2102(b) and to subparagraph (C) of sec14 tion 6103(l)(12) of the Internal Revenue Code

15 of 1986, the information described in section

16 2102(b) and subparagraph (B) of such section

17 6103(l)(12).’’, and

18 (B) by inserting ‘‘, pursuant to section

19 1144(c),’’ after ‘‘disclose to the Administrator’’;

20 and

21 (3) by striking subparagraph (C).

22 (c) MEDICAID USE OF CLEARINGHOUSE.—Section

23 1902(a)(25)(A) (42 U.S.C. 1396a(a)(25)(A)) is amended

24 by inserting ‘‘(including making appropriate requests to
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1 the Director of the Health Coverage Clearinghouse under

2 section 2102)’’ after ‘‘all reasonable measures’’.

3 (d) COLLECTION OF THIRD PARTY PAYMENTS

4 UNDER MATERNAL AND CHILD HEALTH BLOCK GRANT

5 PROGRAM.—Section 505(a) (42 U.S.C. 705(a)) is

6 amended—

7 (1) by striking ‘‘and’’ at the end of paragraph

8 (4),

9 (2) by striking the period at the end of para10 graph (5) and inserting ‘‘; and’’, and

11 (3) by inserting after paragraph (5) the follow12 ing new paragraph:

13 ‘‘(6) provides for an entity providing health

14 services with assistance from the State under this

15 title taking all reasonable steps—

16 ‘‘(A) to ascertain the legal liability of third

17 parties to pay for such services, and

18 ‘‘(B) where such liability is found to exist,

19 to seek reimbursement for such services.’’.

20 (e) EFFECTIVE DATES.—

21 (1) The amendments made by subsections (a),

22 (b), and (d) shall take effect on April 1, 1995.

23 (2) The amendments made by subsection (c)

24 shall apply to allotments for years beginning with

25 fiscal year 1994.
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1 SEC. 5118. MEDICAL CHILD SUPPORT.

2 (a) STATE PLAN REQUIREMENT.—Section

3 1902(a)(45) (42 U.S.C. 1396a(a)(45)) is amended by

4 striking ‘‘owed to recipients’’ and inserting ‘‘and have in

5 effect laws relating to medical child support’’.

6 (b) MEDICAL CHILD SUPPORT LAWS.—Section 1912

7 of such Act (42 U.S.C. 1396k) is amended—

8 (1) by adding at the end of the heading the fol9 lowing: ‘‘; REQUIRED LAWS RELATING TO MEDICAL

10 CHILD SUPPORT’’; and

11 (2) by adding at the end the following new sub12 section:

13 ‘‘(c) The laws relating to medical child support, which

14 a State is required to have in effect under section

15 1902(a)(45), are as follows:

16 ‘‘(1) A law that prohibits an insurer from deny17 ing enrollment of a child under the health coverage

18 of the child’s parent on the ground that the child

19 was born out of wedlock, on the ground that the

20 child may not be claimed as a dependent on the par21 ent’s Federal income tax return, or on the ground

22 that the child does not reside with the parent or in

23 the insurer’s service area. In this subsection, the

24 term ‘insurer’ includes a group health plan, as de25 fined in section 607(1) of the Employee Retirement

26 Income Security Act of 1974, a health maintenance
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1 organization, and an entity offering a service benefit

2 plan.

3 ‘‘(2) A law that requires an insurer, in any case

4 in which a parent is required by court or administra5 tive order to provide health coverage for a child and

6 the parent is eligible for family health coverage

7 through the insurer—

8 ‘‘(A) to permit such parent, upon applica9 tion and without regard to any enrollment sea10 son restrictions, to enroll the parent and such

11 child under such family coverage;

12 ‘‘(B) if such a parent is enrolled but fails

13 to make application to obtain coverage of such

14 child, to enroll such child under such family

15 coverage upon application by the child’s other

16 parent or by the State agency administering the

17 program under this title or part D of title IV;

18 and

19 ‘‘(C) not to disenroll (or eliminate coverage

20 of) such a child unless the insurer is provided

21 satisfactory written evidence that—

22 ‘‘(i) such court or administrative

23 order is no longer in effect, or

24 ‘‘(ii) the child is or will be enrolled in

25 comparable health coverage through an-
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1 other insurer which will take effect not

2 later than the effective date of such

3 disenrollment.

4 ‘‘(3) A law that requires an employer doing

5 business in the State, in the case of health coverage

6 offered through employment with the employer and

7 providing coverage of a child of an employee pursu8 ant to a court or administrative order, to withhold

9 from such employee’s compensation the employee’s

10 share (if any) of premiums for health coverage (to

11 the maximum amount permitted under section

12 303(b) of the Consumer Credit Protection Act) and

13 to pay such share of premiums to the insurer.

14 ‘‘(4) A law that prohibits an insurer from im15 posing requirements upon a State agency, which is

16 acting as an agent or subrogee of an individual eligi17 ble for medical assistance under this title and cov18 ered for health benefits from the insurer, that are

19 different from requirements applicable to an agent

20 or subrogee of any other individual so covered.

21 ‘‘(5) A law that requires an insurer, in any case

22 in which a child has health coverage through the in23 surer of a noncustodial parent—
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1 ‘‘(A) to provide such information to the

2 custodial parent as may be necessary for the

3 child to obtain benefits through such coverage;

4 ‘‘(B) to permit the custodial parent (or

5 provider, with the custodial parent’s approval)

6 to submit claims for covered services without

7 the approval of the noncustodial parent; and

8 ‘‘(C) to make payment on claims submitted

9 in accordance with subparagraph (B) directly to

10 the custodial parent or the provider.

11 ‘‘(6) A law that requires the State agency under

12 this title to garnish the wages, salary, or other em13 ployment income of, and to withhold amounts from

14 State tax refunds to, any person who—

15 ‘‘(A) is required by court or administrative

16 order to provide coverage of the costs of health

17 services to a child who is eligible for medical as18 sistance under this title,

19 ‘‘(B) has received payment from a third

20 party for the costs of such services to such

21 child, but

22 ‘‘(C) has not used such payments to reim23 burse, as appropriate, either the other parent or

24 guardian of such child or the provider of such

25 services,
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1 to the extent necessary to reimburse the State agen2 cy for expenditures for such costs under its plan

3 under this title, but any claims for current or past4 due child support shall take priority over any such

5 claims for the costs of such services.’’.

6 (c) EFFECTIVE DATE.—(1) Except as provided in

7 paragraph (2), the amendments made by this section

8 apply to calendar quarters beginning on or after April 1,

9 1994, without regard to whether or not final regulations

10 to carry out such amendments have been promulgated by

11 such date.

12 (2) In the case of a State plan under title XIX of

13 the Social Security Act which the Secretary of Health and

14 Human Services determines requires State legislation in

15 order for the plan to meet the additional requirements im16 posed by the amendments made by this section, the State

17 plan shall not be regarded as failing to comply with the

18 requirements of such title solely on the basis of its failure

19 to meet these additional requirements before the first day

20 of the first calendar quarter beginning after the close of

21 the first regular session of the State legislature that be22 gins after the date of enactment of this Act. For purposes

23 of the previous sentence, in the case of a State that has

24 a 2-year legislative session, each year of such session shall
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1 be deemed to be a separate regular session of the State

2 legislature.

3 PART V—ASSURING PROPER PAYMENTS TO

4 DISPROPORTIONATE SHARE HOSPITALS

5 SEC. 5121. ASSURING PROPER PAYMENTS TO DISPROPOR6 TIONATE SHARE HOSPITALS.

7 (a) DISPROPORTIONATE SHARE HOSPITALS RE8 QUIRED TO PROVIDE MINIMUM LEVEL OF SERVICES TO

9 MEDICAID PATIENTS.—Section 1923 (42 U.S.C. 1396r–

10 4) is amended—

11 (1) in subsection (a)(1)(A), by striking ‘‘re12 quirement’’ and inserting ‘‘requirements’’;

13 (2) in subsection (b)(1), by striking ‘‘require14 ment’’ and inserting ‘‘requirements’’;

15 (3) in the heading to subsection (d), by striking

16 ‘‘REQUIREMENT’’ and inserting ‘‘REQUIREMENTS’’;

17 (4) by adding at the end of subsection (d) the

18 following new paragraph:

19 ‘‘(3) No hospital may be defined or deemed as

20 a disproportionate share hospital under a State plan

21 under this title or under subsection (b) or (e) of this

22 section unless the hospital has a medicaid inpatient

23 utilization rate (as defined in subsection (b)(2)) of

24 not less than 1 percent.’’;

25 (5) in subsection (e)(1)—
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1 (A) by striking ‘‘and’’ before ‘‘(B)’’, and

2 (B) by inserting before the period at the

3 end the following: ‘‘, and (C) the plan meets the

4 requirement of subsection (d)(3) and such pay5 ment adjustments are made consistent with the

6 fourth sentence of subsection (c)’’; and

7 (6) in subsection (e)(2)—

8 (A) in subparagraph (A), by inserting

9 ‘‘(other than the fourth sentence of subsection

10 (c))’’ after ‘‘(c)’’,

11 (B) by striking ‘‘and’’ at the end of sub12 paragraph (A),

13 (C) by striking the period at the end of

14 subparagraph (B) and inserting ‘‘, and’’, and

15 (D) by adding at the end the following new

16 subparagraph:

17 ‘‘(C) subsection (d)(3) shall apply.’’.

18 (b) LIMITING AMOUNT OF PAYMENT ADJUSTMENTS

19 FOR STATE OR COUNTY HOSPITALS TO UNCOVERED

20 COSTS.—Subsection (c) of such section is amended by

21 adding at the end the following: ‘‘A payment adjustment

22 during a year is not considered to be consistent with this

23 subsection with respect to a hospital owned or operated

24 by a State (or by an instrumentality of or a unit of govern25 ment within a State) if the payment adjustment exceeds
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1 the costs of furnishing hospital services (as determined by

2 the Secretary and net of payments under this title, other

3 than under this section, and by uninsured patients) by the

4 hospital to individuals who either are eligible for medical

5 assistance under the State plan or have no health insur6 ance (or other source of third party payment) for such

7 services during the year. For purposes of the preceding

8 sentence, payments made to a hospital for services pro9 vided to indigent patients made by a State or a unit of

10 local government within a State shall not be considered

11 to be a source of third party payment.’’.

12 (c) EFFECTIVE DATE.—The amendments made by

13 this section shall apply to payments to States under sec14 tion 1903(a) of the Social Security Act for payments to

15 hospitals made under State plans after—

16 (1) the end of the State fiscal year that ends

17 during 1994, or

18 (2) in the case of a State with a State legisla19 ture which is not scheduled to have a regular legisla20 tive session in 1994, the end of the State fiscal year

21 that ends during 1995;

22 without regard to whether or not final regulations to carry

23 out such amendments have been promulgated by either

24 such date.
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1 Subchapter B—Miscellaneous Provisions

2 PART I—ANTI-FRAUD AND ABUSE PROVISIONS

3 SEC. 5131. APPLICATION OF MEDICARE RULES LIMITING

4 CERTAIN PHYSICIAN REFERRALS.

5 (a) IN GENERAL.—Section 1903(i) (42 U.S.C.

6 1396b(i)), as amended by section 5174(b), is amended—

7 (A) in paragraph (12), by striking or at

8 the end,

9 (B) in paragraph (13), by striking the pe10 riod at the end and inserting ‘‘; or’’, and

11 (C) by inserting after paragraph (13) the

12 following new paragraph:

13 ‘‘(14) with respect to any amount expended for

14 an item or service for which payment would be de15 nied under section 1877(g)(1) if the item or service

16 were furnished to an individual entitled to benefits

17 under title XVIII.’’.

18 (b) EFFECTIVE DATE.—The amendment made by

19 subsection (a) shall apply to items and services furnished

20 on or after October 1, 1993.

21 SEC. 5132. INTERMEDIATE SANCTIONS FOR KICKBACK VIO22 LATIONS.

23 (a) PENALTY FOR KICKBACKS.—Section 1128A(a)

24 (42 U.S.C. 1320a–7a(a)) is amended—
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1 (1) by striking ‘‘or’’ at the end of paragraphs

2 (1) and (2);

3 (2) by adding ‘‘or’’ at the end of paragraph (3);

4 (3) by inserting after paragraph (3) the follow5 ing new paragraph:

6 ‘‘(4) carries out any activity in violation of

7 paragraph (1) or (2) of section 1128B(b);’’;

8 (4) by striking ‘‘given).’’ at the end of the first

9 sentence and inserting ‘‘given or, in cases under

10 paragraph (4), $50,000 for each such violation).’’;

11 (5) in the second sentence, by inserting ‘‘in

12 cases under paragraphs (1), (2), and (3),’’ after ‘‘In

13 addition,’’; and

14 (6) by inserting after the second sentence, the

15 following new sentence: ‘‘In cases under paragraph

16 (4), such a person shall be subject to an assessment

17 of not more than twice the total amount of the re18 muneration offered, paid, solicited, or received in

19 violation of section 1128B(b), determined without

20 regard to whether a portion of such remuneration

21 was offered, paid, solicited, or received for a lawful

22 purpose.’’.

23 (b) AUTHORIZATION TO ACT.—The first sentence of

24 section 1128A(c)(1) (42 U.S.C. 1320a–7a(c)(1)) is

25 amended by striking all that follows ‘‘(b)’’ and inserting
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1 the following: ‘‘unless, within one year after the date the

2 Secretary presents a case to the Attorney General for con3 sideration, the Attorney General brings an action in a dis4 trict court of the United States.’’.

5 (c) EFFECTIVE DATES.—

6 (1) The amendments made by subsection (a)

7 shall apply to remuneration offered, paid, solicited,

8 or received before, on, or after the date of the enact9 ment of this Act.

10 (2) The amendment made by subsection (b)

11 shall apply to cases presented by the Secretary of

12 Health and Human Services for consideration on or

13 after the date of the enactment of this Act.

14 SEC. 5133. REQUIRING MAINTENANCE OF EFFORT FOR

15 STATE MEDICAID FRAUD CONTROL UNITS.

16 (a) IN GENERAL.—Section 1902(a)(49) (42 U.S.C.

17 1396a(a)(49)) is amended—

18 (1) by inserting ‘‘(A)’’ after ‘‘(49)’’, and

19 (2) by adding at the end the following new sub20 paragraph:

21 ‘‘(B) provide that the State will expend for its

22 medicaid fraud and abuse control unit (as defined in

23 section 1903(q)), for each State fiscal year, an

24 amount that is not less than the amount expended

25 for such unit in the State fiscal year that ended in
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1 1992 adjusted to reflect the percentage increase in

2 total expenditures under the State plan between

3 such State fiscal year and the State fiscal year in4 volved;’’.

5 (b) EFFECTIVE DATE.—The amendments made by

6 subsection (a) shall apply to State fiscal years ending after

7 1993.

8 PART II—MANAGED CARE PROVISIONS

9 SEC. 5135. MEDICAID MANAGED CARE ANTI-FRAUD PROVI10 SIONS.

11 (a) PROHIBITING AFFILIATIONS WITH INDIVIDUALS

12 DEBARRED BY FEDERAL AGENCIES.—

13 (1) IN GENERAL.—Section 1903(m) (42 U.S.C.

14 1396b(m)) is amended—

15 (A) in paragraph (2)(A)—

16 (i) by striking ‘‘and’’ at the end of

17 clause (x),

18 (ii) by striking the period at the end

19 of clause (xi) and inserting ‘‘; and’’, and

20 (iii) by adding at the end the follow21 ing new clause:

22 ‘‘(xii) the entity complies with the requirements

23 of paragraph (3) (relating to certain protections

24 against fraud and abuse).’’;
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1 (B) in paragraph (2)(B), as amended by

2 section 5158(b), by striking ‘‘clause (ix)’’ and

3 inserting ‘‘clauses (ix) and (xii)’’; and

4 (C) by inserting after paragraph (2) the

5 following new paragraph:

6 ‘‘(3)(A)(i) A health maintenance organization may

7 not have a person described in clause (iv) as a director,

8 officer, partner, or person with beneficial ownership of

9 more than 5 percent of organization’s equity.

10 ‘‘(ii) A health maintenance organization may not have

11 an employment, consulting, or other agreement with a per12 son described in clause (iv) for the provision of goods and

13 services that are significant and material to the organiza14 tion’s obligations under its contract with the State de15 scribed in paragraph (2)(A)(iii).

16 ‘‘(iii) If a health maintenance organization is not in

17 compliance with clause (i) or clause (ii)—

18 ‘‘(I) a State may continue an existing agree19 ment with the organization unless the Secretary (in

20 consultation with the Inspector General of the De21 partment of Health and Human Services) directs

22 otherwise; and

23 ‘‘(II) a State may not renew or otherwise ex24 tend the duration of an existing agreement with the

25 organization unless the Secretary (in consultation
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1 with the Inspector General of the Department of

2 Health and Human Services) provides a written

3 statement describing compelling reasons that exist

4 for renewing or extending the agreement.

5 ‘‘(iv) A person described in this clause is a person

6 that—

7 ‘‘(I) is debarred or suspended by the Federal

8 Government, pursuant to the Federal acquisition

9 regulation, from Government contracting and sub10 contracting, or

11 ‘‘(II) is an affiliate (within the meaning of the

12 Federal acquisition regulation) of a person described

13 in subclause (I).’’.

14 (2) EFFECTIVE DATE.—The amendments made

15 by paragraph (1) shall apply to agreements between

16 a State and an entity under section 1903(m) of the

17 Social Security Act entered into or renewed on or

18 after October 1, 1993, without regard to whether

19 regulations to carry out such amendments are pro20 mulgated by such date.

21 (b) REQUIREMENT FOR STATE CONFLICT-OF-INTER22 EST SAFEGUARDS IN MEDICAID RISK CONTRACTING.—

23 (1) IN GENERAL.—Section 1903(m)(2)(A) (42

24 U.S.C. 1396b(m)(2)(A)), as amended by subsection

25 (a)(1)(C), is amended—
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1 (A) by striking ‘‘and’’ at the end of clause

2 (xi),

3 (B) by striking the period at the end of

4 clause (xii) and inserting ‘‘; and’’, and

5 (C) by adding at the end the following new

6 clause:

7 ‘‘(xiii) the State certifies to the Secretary that

8 it has in effect conflict-of-interest safeguards with

9 respect to officers and employees of the State with

10 responsibility with respect to contracts with organi11 zations under this subsection that are at least as ef12 fective as the Federal safeguards, provided under

13 section 27 of the Office of Federal Procurement Pol14 icy Act (41 U.S.C. 423), against conflicts of interest

15 that apply with respect to Federal procurement offi16 cials with comparable responsibilities with respect to

17 such contracts.’’.

18 (2) EFFECTIVE DATE.—The amendments made

19 by paragraph (1) shall apply as of July 1, 1994,

20 without regard to whether regulations to carry out

21 such amendments are promulgated by such date.

22 (c) REQUIRING DISCLOSURE OF FINANCIAL INFOR23 MATION.—
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1 (1) IN GENERAL.—Section 1903(m)(3), as in2 serted by subsection (a)(1)(C), is amended by add3 ing at the end the following new subparagraph:

4 ‘‘(B) The contract between the State and an entity

5 referred to in paragraph (2)(A)(iii) shall provide that—

6 ‘‘(i) the entity agrees to report to the State

7 such financial information as the Secretary or the

8 State may require to demonstrate that the entity has

9 a fiscally sound operation; and

10 ‘‘(ii) the entity agrees to make available to its

11 enrollees upon reasonable request—

12 ‘‘(I) the information reported under para13 graph (1),

14 ‘‘(II) the information required to be dis15 closed under sections 1124 and 1126, and

16 ‘‘(III) a description of each transaction,

17 described in subparagraphs (A) through (C) of

18 section 1318(a)(3) of the Public Health Service

19 Act, between the entity and a party in interest

20 (as defined in section 1318(b) of such Act).’’.

21 (2) EFFECTIVE DATE.—The amendment made

22 by paragraph (1) shall apply to contract years begin23 ning on or after October 1, 1993, without regard to

24 whether regulations to carry out such amendments

25 are promulgated by such date, with respect to infor-
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1 mation reported or required to be disclosed, or

2 transactions occurring, before, on, or after such

3 date.

4 (d) PROHIBITING MARKETING FRAUD.—

5 (1) IN GENERAL.—Section 1903(m)(3), as in6 serted by subsection (a)(1) and as amended by sub7 section (c)(1), is amended by adding at the end the

8 following new subparagraph:

9 ‘‘(C) The contract between the State and an entity

10 referred to in paragraph (2)(A)(iii) shall provide that the

11 entity agrees to comply with such procedures and condi12 tions as the Secretary prescribes in order to ensure that,

13 before an individual is enrolled with the entity, the individ14 ual is provided accurate and sufficient information to

15 make an informed decision whether or not to enroll.’’.

16 (2) EFFECTIVE DATE.—The amendment made

17 by paragraph (1) shall apply to contract years that

18 begin on or after October 1, 1993, without regard

19 to whether regulations to carry out such amendment

20 are promulgated by such date.

21 (e) REQUIRING ADEQUATE EQUITY FOR FOR-PROFIT

22 ENTITIES.—

23 (1) IN GENERAL.—Section 1903(m)(3), as pre24 viously amended by this section, is further amended
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1 by adding at the end the following new subpara2 graph:

3 ‘‘(D)(i) The contract between the State and an entity

4 referred to in paragraph (2)(A)(iii) shall require, in the

5 case of a for-profit entity, that the entity shall maintain

6 an average ratio of—

7 ‘‘(I) equity capital to

8 ‘‘(II) payments made by the State to the entity

9 under the contract on a capitation basis or any other

10 risk basis,

11 of not less than such minimum ratio as the Secretary shall

12 specify.

13 ‘‘(ii) The contract between the State and a non-profit

14 entity referred to in paragraph (2)(A)(iii) shall require

15 that no payment shall be made directly or indirectly under

16 an agreement between the non-profit entity and a related

17 for-profit entity (as defined by the Secretary) unless the

18 for-profit entity maintains an average ratio of equity cap19 ital to payments under such agreement of not less than

20 such ratio as the Secretary shall specify.’’.

21 (2) EFFECTIVE DATE.—The amendment made

22 by paragraph (1) shall apply to contract years begin23 ning on or after July 1, 1994, without regard to

24 whether regulations to carry out such amendment

25 are promulgated by such date.
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1 (f) REQUIRING ADEQUATE PROVISION AGAINST RISK

2 OF INSOLVENCY.—

3 (1) IN GENERAL.—Section 1903(m)(1)(A)(ii)

4 (42 U.S.C. 1396b(m)(1)(A)(ii)) is amended by in5 serting ‘‘, which meets such standards as the Sec6 retary shall prescribe’’ after ‘‘satisfactory to the

7 State’’.

8 (2) EFFECTIVE DATE AND TRANSITION.—(A)

9 The amendment made by paragraph (1) shall apply

10 to contract years beginning on or after July 1, 1994,

11 without regard to whether regulations to carry out

12 such amendments are promulgated by such date.

13 (B) If the Secretary of Health and Human

14 Services has not promulgated standards to carry out

15 the amendment made by paragraph (1) by July 1,

16 1994, until such standards have been promulgated a

17 provision of a health maintenance organization

18 against the risk of insolvency shall not be considered

19 to meet standards prescribed by the Secretary, for

20 purposes of section 1903(m)(1)(A)(ii) of the Social

21 Security Act, unless such provision has been found

22 satisfactory by the Secretary under section

23 1876(b)(2)(E) of such Act.

24 (g) REQUIRING REPORT ON NET EARNINGS AND AD25 DITIONAL BENEFITS.—
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1 (1) IN GENERAL.—Section 1903(m)(3), as pre2 viously amended by this section, is amended by add3 ing at the end the following new subparagraph:

4 ‘‘(E) The contract between the State and an entity

5 referred to in paragraph (2)(A)(iii) shall provide that the

6 entity shall submit a report to the State and the Secretary

7 not later than 12 months after the close of a contract year

8 containing—

9 ‘‘(i) a financial statement of the entity’s net

10 earnings under the contract during the contract

11 year, which statement has been audited using audit12 ing standards established by the Secretary in con13 sultation with the States; and

14 ‘‘(ii) a description of any benefits that are in

15 addition to the benefits required to be provided

16 under the contract that were provided during the

17 contract year to members enrolled with the entity

18 and entitled to medical assistance under the plan.’’.

19 (2) EFFECTIVE DATE.—The amendment made

20 by paragraph (1) shall apply to contract years begin21 ning on or after October 1, 1993, without regard to

22 whether regulations to carry out such amendments

23 are promulgated by such date.

24 (h) REPORT ON NET EARNINGS OF CONTRACTORS.—

25 Not later than 6 months after the date of the enactment
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1 of this Act, the Secretary of Health and Human Services

2 shall submit a report to Congress on the earnings of orga3 nizations with contracts to receive payment for providing

4 medical assistance under title XIX of the Social Security

5 Act on a prepaid capitation or any other risk basis. The

6 report shall include the Secretary’s recommendations on

7 options for requiring such organizations, as a condition

8 of participation under such title, to dedicate a portion of

9 such earnings to the provision of additional benefits to in10 dividuals enrolled with the organization.

11 SEC. 5136. CLARIFICATION OF TREATMENT OF HMO EN12 ROLLEES IN COMPUTING THE MEDICAID IN13 PATIENT UTILIZATION RATE IN QUALIFYING

14 HOSPITALS AS DISPROPORTIONATE SHARE

15 HOSPITALS.

16 (a) IN GENERAL.—Section 1923(b)(2) (42 U.S.C.

17 1396r–4(b)(2)) is amended by inserting before the period

18 at the end the following: ‘‘and whether or not the individ19 ual is enrolled with an entity contracting with the State

20 on a prepaid capitation basis or other risk basis under sec21 tion 1903(m)’’.

22 (b) EFFECTIVE DATE.—The amendment made by

23 subsection (a) shall apply to payments to States under sec24 tion 1903(a) of the Social Security Act for payments to

25 hospitals made under State plans on and after the first
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1 day of the first calendar quarter beginning after the date

2 of the enactment of this Act.

3 SEC. 5137. EXTENSION OF PERIOD OF APPLICABILITY OF

4 ENROLLMENT MIX REQUIREMENT TO CER5 TAIN HEALTH MAINTENANCE ORGANIZA6 TIONS PROVIDING SERVICES UNDER DAYTON

7 AREA HEALTH PLAN.

8 Section 2 of Public Law 102–276 is amended by

9 striking ‘‘January 31, 1994’’ and inserting ‘‘December 31,

10 1995’’.

11 SEC. 5138. EXTENSION OF MEDICAID WAIVER FOR TEN12 NESSEE PRIMARY CARE NETWORK.

13 Section 6411(f) of the Omnibus Budget Reconcili14 ation Act of 1989, as amended by section 1 of Public Law

15 102–317, is amended by striking ‘‘January 31, 1994’’ and

16 inserting ‘‘December 31, 1995’’.

17 SEC. 5139. WAIVER OF APPLICATION OF MEDICAID EN18 ROLLMENT MIX REQUIREMENT TO DISTRICT

19 OF COLUMBIA CHARTERED HEALTH PLAN,

20 INC.

21 (a) IN GENERAL.—The Secretary of Health and

22 Human Services shall waive the application of the require23 ment described in section 1903(m)(2)(A)(ii) of the Social

24 Security Act to the entity known as the District of Colum25 bia Chartered Health Plan, Inc., for the period described
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1 in subsection (b), if the Secretary determines that the en2 tity is making continuous efforts and progress toward

3 achieving compliance with such requirement.

4 (b) PERIOD OF APPLICABILITY.—The period referred

5 to in subsection (a) is the period that begins on October

6 1, 1992, and ends on December 31, 1995.

7 SEC. 5140. EXTENSION OF MINNESOTA PREPAID MEDICAID

8 DEMONSTRATION PROJECT.

9 (a) IN GENERAL.—Section 507 of the Family Sup10 port Act of 1988, as amended by section 6411(j) of

11 OBRA–1989 and by section 4733 of OBRA–1990, is

12 amended by striking ‘‘1996’’ and inserting ‘‘1998’’.

13 (b) AUTHORITY TO IMPOSE PREMIUM.—

14 (1) IN GENERAL.—Notwithstanding section

15 1916 of the Social Security Act and subject to para16 graph (2), the State of Minnesota may impose a pre17 mium on individuals receiving medical assistance

18 under the Minnesota Prepaid Demonstration Project

19 operated under a waiver granted by the Secretary of

20 Health and Human Services under section 1115(a)

21 of the Social Security Act and other individuals eligi22 ble under the State’s plan for medical assistance

23 under title XIX of such Act.

24 (2) LIMITATION ON AMOUNT OF PREMIUM.—In

25 no case may the amount of any premium imposed on
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1 an individual receiving medical assistance under the

2 State plan or under the Demonstration Project de3 scribed in paragraph (1) exceed 10 percent of the

4 amount by which the family income (less expenses

5 for the care of a dependent child) of the individual

6 exceeds 110 percent of the income official poverty

7 line (as defined by the Office of Management and

8 Budget), and revised annually in accordance with

9 section 673(2) of the Omnibus Budget Reconcili10 ation Act of 1981) applicable to a family of the size

11 involved.

12 PART III—EMERGENCY SERVICES TO

13 UNDOCUMENTED ALIENS

14 SEC. 5141. INCREASE IN FEDERAL FINANCIAL PARTICIPA15 TION FOR EMERGENCY MEDICAL ASSIST16 ANCE TO UNDOCUMENTED ALIENS.

17 (a) IN GENERAL.—Section 1905(b) (42 U.S.C.

18 1396d(b)) is amended by adding at the end the following:

19 ‘‘Notwithstanding the first sentence of this section, sub20 ject to 1903(v)(4), the Federal medical assistance percent21 age shall be 100 per centum with respect to amounts ex22 pended by an eligible State in a covered fiscal year (as

23 defined in section 1903(v)(4)(C)) as medical assistance for

24 care and services described in section 1903(v)(2) to aliens

25 described in section 1903(v)(1).’’.
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1 (b) LIMITATION.—Section 1903(v) (42 U.S.C.

2 1396b(v)) is amended by adding at the end the following

3 new paragraphs:

4 ‘‘(4)(A) With respect to any eligible State (as defined

5 in subparagraph (C)(i)), the amount of the increase in

6 payments to a State under subsection (a) in a covered fis7 cal year (as defined in subparagraph (C)(ii)), resulting

8 from the increase in the Federal medical assistance per9 centage under the fourth sentence of section 1905(b), shall

10 not exceed the State’s allotment determined under sub11 paragraph (B).

12 ‘‘(B)(i) The total of the allotments to all States for

13 a covered fiscal year under this paragraph shall be

14 $300,000,000.

15 ‘‘(ii) From the total allotment under clause (i) for

16 a covered fiscal year, the Secretary shall determine the

17 amount of the allotment for each eligible State. Subject

18 to clause (iii), the amount of such allotment for such a

19 fiscal year shall bear the same ratio to the total amount

20 specified in clause (i) for the fiscal year as the ratio of—

21 ‘‘(I) the allotment to the State for fiscal year

22 1993 under section 204 of the Immigration Reform

23 and Control Act of 1986, to

24 ‘‘(II) the total of such allotments for all such el25 igible States for fiscal year 1993.
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1 ‘‘(iii) In the case of an eligible State which notifies

2 the Secretary that an amount of its allotment will not be

3 used by the State under this paragraph, the State’s allot4 ment shall be reduced by such amount and such amount

5 shall be redistributed among the other eligible States in

6 proportion to the amount otherwise allotted to such State

7 under clause (ii).

8 ‘‘(C) For purposes of this paragraph and the fourth

9 sentence of section 1905(b):

10 ‘‘(i) The term ‘eligible State’ means a State—

11 ‘‘(I) with a plan approved under this title

12 (including a State which is providing medical

13 assistance to its residents under a statewide

14 waiver granted under section 1115), and

15 ‘‘(II) for which its allotment for fiscal year

16 1993 under section 204 of the Immigration Re17 form and Control Act of 1986 is at least 1 per18 cent of the total of such allotments for all the

19 States for fiscal year 1993.

20 ‘‘(ii) The term ‘covered fiscal year’ means only

21 fiscal year 1994.

22 ‘‘(D) Nothing in this paragraph or the fourth sen23 tence of section 1905(b) shall be construed as establishing

24 entitlement authority (within the meaning of section 3(9)
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1 of the Congressional Budget Act of 1974) for any fiscal

2 year other than a covered fiscal year.’’.

3 SEC. 5142. LIMITING FEDERAL MEDICAID MATCHING PAY4 MENT TO BONA FIDE EMERGENCY SERVICES

5 FOR UNDOCUMENTED ALIENS.

6 (a) IN GENERAL.—Section 1903(v)(2) (42 U.S.C.

7 1396b(v)(2)) is amended—

8 (1) by striking ‘‘and’’ at the end of subpara9 graph (A),

10 (2) by striking the period at the end of sub11 paragraph (B) and inserting ‘‘, and’’, and

12 (3) by adding at the end the following new sub13 paragraph:

14 ‘‘(C) such care and services are not related to

15 an organ transplant procedure.’’.

16 (b) EFFECTIVE DATE.—(1) Subject to paragraph

17 (2), the amendments made by subsection (a) shall apply

18 as if included in the enactment of OBRA–1986.

19 (2) The Secretary of Health and Human Services

20 shall not disallow expenditures made for the care and serv21 ices described in section 1903(v)(2)(C) of the Social Secu22 rity Act, as added by subsection (a), furnished before the

23 date of the enactment of this Act.
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1 PART IV—MISCELLANEOUS PROVISIONS

2 SEC. 5144. INCREASE IN LIMIT ON FEDERAL MEDICAID

3 MATCHING PAYMENTS TO PUERTO RICO AND

4 OTHER TERRITORIES.

5 (a) IN GENERAL.—Paragraphs (1) through (5) of

6 section 1108(c) (42 U.S.C. 1308(c)) are amended to read

7 as follows:

8 ‘‘(1) Puerto Rico shall not exceed (A)

9 $104,000,000 for fiscal year 1994 and (B) for each

10 succeeding fiscal year the amount provided in this

11 paragraph for the preceding fiscal year increased by

12 the percentage increase in the medical care compo13 nent of the consumer price index for all urban con14 sumers (as published by the Bureau of Labor Statis15 tics) for the twelve-month period ending in March

16 preceding the beginning of the fiscal year, rounded

17 to the nearest $100,000;

18 ‘‘(2) the Virgin Islands shall not exceed (A)

19 $3,425,000 for fiscal year 1994, and (B) for each

20 succeeding fiscal year the amount provided in this

21 paragraph for the preceding fiscal year increased by

22 the percentage increase referred to in paragraph

23 (1)(B), rounded to the nearest $10,000;

24 ‘‘(3) Guam shall not exceed (A) $3,290,000 for

25 fiscal year 1994, and (B) for each succeeding fiscal

26 year the amount provided in this paragraph for the
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1 preceding fiscal year increased by the percentage in2 crease referred to in paragraph (1)(B), rounded to

3 the nearest $10,000;

4 ‘‘(4) Northern Mariana Islands shall not exceed

5 (A) $990,000 for fiscal year 1994, and (B) for each

6 succeeding fiscal year the amount provided in this

7 paragraph for the preceding fiscal year increased by

8 the percentage increase referred to in paragraph

9 (1)(B), rounded to the nearest $10,000; and

10 ‘‘(5) American Samoa shall not exceed (A)

11 $1,910,000 for fiscal year 1994, and (B) for each

12 succeeding fiscal year the amount provided in this

13 paragraph for the preceding fiscal year increased by

14 the percentage increase referred to in paragraph

15 (1)(B), rounded to the nearest $10,000.’’.

16 (b) EFFECTIVE DATE.—The amendment made by

17 subsection (a) shall apply beginning with fiscal year 1994.

18 SEC. 5145. CRITERIA FOR MAKING DETERMINATIONS OF

19 DENIAL OF FEDERAL MEDICAID MATCHING

20 PAYMENTS TO STATES.

21 (a) IN GENERAL.—Section 1903 (42 U.S.C. 1396b)

22 is amended by adding at the end the following new sub23 section:

24 ‘‘(x)(1) In any case in which the Secretary proposes

25 to disallow under section 1116(d) a claim by a State under
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1 this section and the State exercises its right of reconsider2 ation under section 1116(d), the Departmental Appeals

3 Board established in the Department of Health and

4 Human Services shall, if such Board upholds the basis for

5 the disallowance, determine whether the amount of the

6 disallowance should be reduced. In making this determina7 tion, the Board shall take into account (to the extent the

8 State makes a showing) factors which shall include—

9 ‘‘(A) the nature of the basis for the disallow10 ance;

11 ‘‘(B) whether the amount of the disallowance is

12 proportionate to the error or deficiency on which the

13 disallowance is based;

14 ‘‘(C) whether the basis of the disallowance con15 stitutes noncompliance that prevented or materially

16 affected the provision of appropriate services to indi17 viduals eligible under this title; or

18 ‘‘(D) whether Federal guidance with respect to

19 the action that is the basis for the proposed dis20 allowance was insufficient and the State made good

21 faith efforts to conform its action to the intent of

22 the applicable Federal statute or regulation.

23 ‘‘(2) No disallowance shall be taken or upheld if the

24 action of the State on which the disallowance would be

25 based is consistent with its approved State plan.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to disallowances made after the

3 date of the enactment of this Act and shall take effect

4 without regard to the promulgation of implementing regu5 lations.

6 SEC. 5146. RENEWAL OF UNFUNDED DEMONSTRATION

7 PROJECT FOR LOW-INCOME PREGNANT

8 WOMEN AND CHILDREN.

9 (a) IN GENERAL.—Section 6407 of OBRA–89 is

10 amended—

11 (1) in subsection (d), by striking ‘‘3 years’’ and

12 inserting ‘‘5 years’’;

13 (2) in subsection (f), by striking ‘‘$10,000,000

14 in each of fiscal years 1990, 1991, and 1992’’ and

15 inserting ‘‘$30,000,000’’; and

16 (3) in subsection (g)(2), by striking ‘‘January

17 1, 1994’’ and inserting ‘‘one year after the termi18 nation of the demonstration projects’’.

19 (b) EFFECTIVE DATE.—The amendments made by

20 subsection (a) shall take effect as if included in the enact21 ment of OBRA–89.
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1 SEC. 5147. OPTIONAL MEDICAID COVERAGE OF TB-RELAT2 ED SERVICES FOR CERTAIN TB-INFECTED IN3 DIVIDUALS.

4 (a) COVERAGE AS OPTIONAL, CATEGORICALLY

5 NEEDY GROUP.—Section 1902(a)(10)(A)(ii) (42 U.S.C.

6 1396a(a)(10)(A)(ii)) is amended—

7 (1) by striking ‘‘or’’ at the end of subclause

8 (X),

9 (2) by adding ‘‘or’’ at the end of subclause

10 (XI), and

11 (3) by adding at the end the following new

12 subclause:

13 ‘‘(XII) who are described in sub14 section (z)(1) (relating to certain TB15 infected individuals);’’.

16 (b) GROUP AND BENEFIT DESCRIBED.—Section

17 1902 is amended by adding at the end the following new

18 subsection:

19 ‘‘(z)(1) Individuals described in this paragraph are

20 individuals not described in subsection (a)(10)(A)(i)—

21 ‘‘(A) who have tested positively to be infected

22 with tuberculosis;

23 ‘‘(B) whose income (as determined under the

24 State plan under this title with respect to disabled

25 individuals) does not exceed the maximum amount

26 of income a disabled individual described in sub-
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1 section (a)(10)(A)(i) may have and obtain medical

2 assistance under the plan; and

3 ‘‘(C) whose resources (as determined under the

4 State plan under this title with respect to disabled

5 individuals) do not exceed the maximum amount of

6 resources a disabled individual described in sub7 section (a)(10)(A)(i) may have and obtain medical

8 assistance under the plan.

9 ‘‘(2) For purposes of subsection (a)(10), the term

10 ‘TB-related services’ means each of the following services

11 relating to treatment of infection with tuberculosis:

12 ‘‘(A) Prescribed drugs.

13 ‘‘(B) Physicians’ services and services described

14 in section 1905(a)(2).

15 ‘‘(C) Laboratory and X-ray services.

16 ‘‘(D) Clinic services and Federally-qualified

17 health center services.

18 ‘‘(E) Case management services (as defined in

19 section 1915(g)(2)).

20 ‘‘(F) Services (other than room and board) de21 signed to encourage completion of regimens of pre22 scribed drugs by outpatients, including services to

23 observe directly the intake of prescribed drugs.’’.
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1 (c) LIMITATION ON BENEFITS.—Section

2 1902(a)(10), as amended by section 5162(a), is amended,

3 in the matter following subparagraph (F)—

4 (1) by striking ‘‘, and (XII)’’ and inserting ‘‘,

5 (XII)’’, and

6 (2) by inserting before the semicolon at the end

7 the following: ‘‘, and (XIII) the medical assistance

8 made available to an individual described in sub9 section (z)(1) who is eligible for medical assistance

10 only because of subparagraph (A)(ii)(XII) shall be

11 limited to medical assistance for TB-related services

12 (as defined in subsection (z)(2))’’.

13 (d) CONFORMING EXPANSION OF CASE MANAGE14 MENT SERVICES OPTION.—Section 1915(g)(1) (42 U.S.C.

15 1396n(g)(1)) is amended by inserting ‘‘or to individuals

16 described in section 1902(z)(1)(A),’’ after ‘‘or with ei17 ther,’’.

18 (e) CONFORMING AMENDMENT.—Section 1905(a)

19 (42 U.S.C. 1396d(a)) is amended—

20 (1) by striking ‘‘or’’ at the end of clause (ix),

21 (2) by adding ‘‘or’’ at the end of clause (x),

22 (3) by inserting after clause (x) the following

23 new clause:

24 ‘‘(xi) individuals described in section

25 1902(z)(1),’’, and
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1 (4) by amending paragraph (19) to read as fol2 lows:

3 ‘‘(19) case management services (as defined in

4 section 1915(g)(2)) and TB-related services de5 scribed in section 1902(z)(2)(F);’’.

6 (f) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to medical assistance furnished on

8 or after January 1, 1994, without regard to whether or

9 not final regulations to carry out such amendments have

10 been promulgated by such date.

11 SEC. 5148. APPLICATION OF MAMMOGRAPHY CERTIFI12 CATION REQUIREMENTS UNDER THE MEDIC13 AID PROGRAM.

14 (a) IN GENERAL.—Section 1902(a)(9) (42 U.S.C.

15 1396a(a)(9)) is amended—

16 (1) by striking ‘‘and’’ at the end of subpara17 graph (B),

18 (2) by striking the semicolon at the end of sub19 paragraph (C) and inserting ‘‘, and’’, and

20 (3) by adding at the end the following new sub21 paragraph:

22 ‘‘(D) that any mammography paid for

23 under such plan must be conducted by a facility

24 that has a certificate (or provisional certificate)
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1 issued under section 354 of the Public Health

2 Service Act;’’.

3 (b) EFFECTIVE DATE.—(1) Except as provided in

4 paragraph (2), the amendments made by subsection (a)

5 shall apply to mammography furnished by a facility during

6 calendar quarters beginning on or after the first date that

7 the certificate requirements of section 354(b) of the Public

8 Health Service Act apply to such mammography con9 ducted by such facility, without regard to whether or not

10 final regulations to carry out such amendments have been

11 promulgated by such date.

12 (2) In the case of a State plan for medical assistance

13 under title XIX of the Social Security Act which the Sec14 retary of Health and Human Services determines requires

15 State legislation (other than legislation appropriating

16 funds) in order for the plan to meet the additional require17 ment imposed by the amendment made by subsection

18 (a)(3), the State plan shall not be regarded as failing to

19 comply with the requirements of such title solely on the

20 basis of its failure to meet this additional requirement be21 fore the first day of the first calendar quarter beginning

22 after the close of the first regular session of the State leg23 islature that begins after the date of the enactment of this

24 Act. For purposes of the previous sentence, in the case

25 of a State that has a 2-year legislative session, each year
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1 of such session shall be deemed to be a separate regular

2 session of the State legislature.

3 SEC. 5149. REMOVAL OF SUNSET ON EXTENSION OF ELIGI4 BILITY FOR WORKING FAMILIES.

5 Subsection (f) of section 1925 (42 U.S.C. 1396r–6)

6 is repealed.

7 SEC. 5150. EXTENSION OF MORATORIUM ON TREATMENT

8 OF CERTAIN FACILITIES AS INSTITUTIONS

9 FOR MENTAL DISEASES.

10 Effective as if included in the enactment of OBRA–

11 1989, section 6408(a)(3) of such Act is amended by strik12 ing ‘‘180 days’’ and all that follows and inserting ‘‘Decem13 ber 31, 1995.’’.

14 SEC. 5150A. TREATMENT OF CERTAIN CLINICS AS FEDER15 ALLY-QUALIFIED HEALTH CENTERS.

16 (a) IN GENERAL.—Section 1905(l)(2)(B) (42 U.S.C.

17 1396d(l)(2)(B)), as amended by section 5158(c), is

18 amended—

19 (1) by striking ‘‘or’’ at the end of clause

20 (ii)(II),

21 (2) by adding ‘‘or’’ at the end of clause (iii),

22 and

23 (3) by inserting after clause (iii) the following

24 new clause:
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1 ‘‘(iv) was treated by the Secretary, for purposes

2 of part B of title XVIII, as a comprehensive Feder3 ally funded health center as of January 1, 1990;’’.

4 (b) EFFECTIVE DATE.—The amendments made by

5 subsection (a) shall apply to calendar quarters beginning

6 on or after July 1, 1993.

7 SEC. 5150B. NURSING HOME REFORM.

8 (a) SUSPENSION OF DECERTIFICATION OF NURSE

9 AIDE TRAINING AND COMPETENCY EVALUATION PRO10 GRAMS BASED ON EXTENDED SURVEYS.—

11 (1) IN GENERAL.—Section

12 1919(f)(2)(B)(iii)(I)(b) (42 U.S.C.

13 1396r(f)(2)(B)(iii)(I)(b)) is amended by striking the

14 semicolon and inserting the following: ‘‘, unless the

15 survey shows that the facility is in compliance with

16 the requirements of subsections (b), (c), and (d) of

17 this section;’’.

18 (2) EFFECTIVE DATE.—The amendment made

19 by paragraph (1) shall take effect as included in the

20 enactment of OBRA–1990.

21 (b) REQUIREMENTS FOR CONSULTANTS CONDUCT22 ING REVIEWS OF USE OF DRUGS.—

23 (1) IN GENERAL.—Section 1919(c)(1)(D) (42

24 U.S.C. 1396r(c)(1)(D)) is amended by adding at the

25 end the following sentence: ‘‘In determining whether
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1 such a consultant is qualified to conduct reviews

2 under the previous sentence, the Secretary shall take

3 into account the needs of nursing facilities under

4 this title to have access to the services of such a con5 sultant on a timely basis.’’.

6 (2) EFFECTIVE DATE.—The amendment made

7 by paragraph (1) shall take effect as included in the

8 enactment of OBRA–1987.

9 (c) INCREASE IN MINIMUM AMOUNT REQUIRED FOR

10 SEPARATE DEPOSIT OF PERSONAL FUNDS.—

11 (1) IN GENERAL.—Section 1919(c)(6)(B)(i) (42

12 U.S.C. 1396r(c)(6)(B)(i)) is amended by striking

13 ‘‘$50’’ and inserting ‘‘$100’’.

14 (2) EFFECTIVE DATE.—The amendment made

15 by paragraph (1) shall take effect October 1, 1993.

16 (d) DUE PROCESS PROTECTIONS FOR NURSE

17 AIDES.—

18 (1) PROHIBITING STATE FROM INCLUDING UN19 DOCUMENTED ALLEGATIONS IN NURSE AIDE REG20 ISTRY.—Section 1919(e)(2)(B) (42 U.S.C.

21 1396r(e)(2)(B)) is amended by striking the period at

22 the end of the first sentence and inserting the fol23 lowing: ‘‘, but shall not include any allegations of

24 resident abuse or neglect or misappropriation of
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1 resident property that are not specifically docu2 mented by the State under such subsection.’’.

3 (2) DUE PROCESS REQUIREMENTS FOR REBUT4 TING ALLEGATIONS.—Section 1919(g)(1)(C) (42

5 U.S.C. 1396r(g)(1)(C)) is amended by striking the

6 second sentence and inserting the following: ‘‘The

7 State shall, after providing the individual involved

8 with a written notice of the allegations (including a

9 statement of the availability of a hearing for the in10 dividual to rebut the allegations) and the oppor11 tunity for a hearing on the record, make a written

12 finding as to the accuracy of the allegations.’’.

13 (3) EFFECTIVE DATE.—The amendments made

14 by this subsection shall take effect October 1, 1993.

15 Subchapter C—Miscellaneous and Technical

16 Corrections Relating to OBRA–1990

17 SEC. 5151. EFFECTIVE DATE.

18 Except as otherwise provided, the amendments made

19 by this subchapter shall take effect as if included in the

20 enactment of OBRA–1990.

21 SEC. 5152. CORRECTIONS RELATING TO SECTION 4402 (EN22 ROLLMENT UNDER GROUP HEALTH PLANS).

23 Section 4402(b) of OBRA–1990 is amended by strik24 ing ‘‘1903(u)(1)(C)(iv) (42 U.S.C. 1396b(u)(1)(C)(iv))’’
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1 and inserting ‘‘1903(u)(1)(D)(iv) (42 U.S.C.

2 1396b(u)(1)(D)(iv))’’.

3 SEC. 5153. CORRECTIONS RELATING TO SECTION 4501

4 (LOW-INCOME MEDICARE BENEFICIARIES).

5 (a) Section 1902(a)(10)(E)(iii), as added by section

6 4501(b)(3) of OBRA–1990, is amended by striking ‘‘cost

7 sharing’’ and inserting ‘‘cost-sharing’’.

8 (b) Section 1905(p)(4)(B), as amended by section

9 4501(c)(1) of OBRA–1990, is amended by striking

10 ‘‘1902(a)(10)(E)(iii)’’ and inserting ‘‘section

11 1902(a)(10)(E)(iii)’’.

12 SEC. 5154. CORRECTIONS RELATING TO SECTION 4601

13 (CHILD HEALTH).

14 (a) Section 1902(a)(10)(A)(i)(VII), as added by sec15 tion 4601(a)(10)(A)(iii) of OBRA–1990, is amended by

16 striking ‘‘family;’’ and inserting ‘‘family; and’’.

17 (b) Section 1902(l), as amended by section

18 4601(a)(1)(C) of OBRA–1990, is amended—

19 (1) in paragraph (1)(C), by striking ‘‘children’’

20 after ‘‘(C)’’;

21 (2) in paragraph (3), by striking

22 ‘‘(a)(10)(A)(i)(VII),,’’ and inserting

23 ‘‘(a)(10)(A)(i)(VII),’’; and

24 (3) in paragraph (4)(B), by inserting a comma

25 before ‘‘(a)(10)(A)(i)(VI),’’.
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1 (c) Subsections (a)(3)(C) and (b)(3)(C)(i) of section

2 1925, as amended by section 4601(a) of OBRA–1990, are

3 each amended by striking ‘‘(i)(VI)’’ and inserting

4 ‘‘(i)(VI),’’.

5 SEC. 5155. CORRECTIONS RELATING TO SECTION 4602 (OUT6 REACH LOCATIONS).

7 (a) Section 1902(a)(55), as added by section

8 4602(a)(3) of OBRA–1990, is amended—

9 (1) in the matter preceding subparagraph (A)—

10 (A) by striking ‘‘subsection’’ and inserting

11 ‘‘paragraph’’, and

12 (B) by striking ‘‘(a)’’ each place it ap13 pears; and

14 (2) in subparagraph (A), by striking

15 ‘‘1905(1)(2)(B)’’ and inserting ‘‘1905(l)(2)(B)’’.

16 (b) Section 1902(l)(1) is amended by striking ‘‘who

17 are not described in any of subclauses (I) through (III)

18 of subsection (a)(10)(A)(i) and’’.

19 SEC. 5156. CORRECTIONS RELATING TO SECTION 4604 (PAY20 MENT FOR HOSPITAL SERVICES FOR CHIL21 DREN UNDER 6 YEARS OF AGE).

22 (a) Section 1902(a)(10) is amended in clause (X) in

23 the matter following subparagraph (F) by striking ‘‘under

24 one year of age’’ and inserting ‘‘under 6 years of age’’.
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1 (b) Section 1902(s), as added by section 4604(a) of

2 OBRA–1990, is amended to read as follows:

3 ‘‘(s) In order to meet the requirements of subsection

4 (a)(56), the State plan must provide that payments to hos5 pitals under the plan for inpatient services furnished to

6 infants who have not attained the age of 1 year (or, in

7 the case of such an individual who is an inpatient on his

8 first birthday, until such individual is discharged) shall—

9 ‘‘(1) if made on a prospective basis (whether

10 per diem, per case, or otherwise) provide for an

11 outlier adjustment in payment amounts for medi12 cally necessary inpatient hospital services involving

13 exceptionally high costs or exceptionally long lengths

14 of stay;

15 ‘‘(2) not be limited by the imposition of day

16 limits; and

17 ‘‘(3) not be limited by the imposition of dollar

18 limits (other than dollar limits resulting from pro19 spective payments as adjusted pursuant to para20 graph (1)).’’.

21 (c) Section 1923(a)(2)(C) is amended by striking

22 ‘‘provided on or after July 1, 1989,’’ and all that follows

23 and inserting the following: ‘‘involving exceptionally high

24 costs or exceptionally long lengths of stay—
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1 ‘‘(i) for individuals under 1 year of age, in the

2 case of services provided on or after July 1, 1989,

3 and on or before June 30, 1991; and

4 ‘‘(ii) for individuals under 6 years of age, in the

5 case of services provided on or after July 1, 1991.’’.

6 SEC. 5157. CORRECTIONS RELATING TO SECTION 4703 (PAY7 MENT ADJUSTMENTS FOR DISPROPORTION8 ATE SHARE HOSPITALS).

9 (a) Section 1923(c) is amended—

10 (1) in paragraph (2), by striking ‘‘paragraph

11 (b)(3)’’ and inserting ‘‘subsection (b)(3)’’;

12 (2) by striking the period at the end of para13 graph (3)(B) and inserting a comma; and

14 (3) in the third sentence, by striking ‘‘the pay15 ment adjustment described in paragraph (2)’’ and

16 inserting ‘‘a payment adjustment described in para17 graph (2) or (3)’’.

18 (b) Effective December 22, 1987, section

19 1923(d)(2)(A)(ii) is amended by striking ‘‘the date of the

20 enactment of this Act’’ and inserting ‘‘December 22,

21 1987’’.

22 (c) Section 4703(d) of OBRA–1990 is amended by

23 striking ‘‘412(a)(2)’’ and inserting ‘‘4112(a)(2)’’.
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1 SEC. 5158. CORRECTIONS RELATING TO SECTION 4704 (FED2 ERALLY-QUALIFIED HEALTH CENTERS).

3 (a) Clause (ix) of section 1903(m)(2)(A), as added

4 by section 4704(b)(1)(C) of OBRA–1990, is amended—

5 (1) by striking ‘‘of such center’’ the first place

6 it appears;

7 (2) by striking ‘‘federally qualified’’ and insert8 ing ‘‘Federally-qualified’’;

9 (3) by inserting ‘‘section’’ before

10 ‘‘1905(a)(2)(C)’’; and

11 (4) by moving such clause 2 ems to the left.

12 (b) Section 1903(m)(2)(B), as amended by section

13 4704(b)(2) of OBRA–1990, is amended by striking ‘‘ex14 cept with respect to clause (ix) of subparagraph (A),’’ and

15 inserting ‘‘(except with respect to clause (ix) of such sub16 paragraph)’’.

17 (c) Section 1905(l)(2), as amended by section

18 4704(c) of OBRA–1990, is amended—

19 (1) in subparagraph (A)—

20 (A) by striking ‘‘Federally-qualififed’’ and

21 inserting ‘‘Federally-qualified’’, and

22 (B) by striking ‘‘an patient’’ and inserting

23 ‘‘a patient’’; and

24 (2) in subparagraph (B)—

25 (A) in the matter preceding clause (i), by

26 striking ‘‘a entity’’ and inserting ‘‘an entity’’,
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1 (B) by striking ‘‘or’’ at the end of clause

2 (i),

3 (C) by striking the semicolon at the end of

4 clause (ii)(II) and inserting ‘‘, or’’,

5 (D) by moving clause (ii) 4 ems to the left,

6 and

7 (E) in the last sentence, by striking

8 ‘‘clause (ii)’’ and inserting ‘‘clause (iii)’’.

9 SEC. 5159. CORRECTIONS RELATING TO SECTION 4708 (SUB10 STITUTE PHYSICIANS).

11 Section 1902(a)(32)(C), as added by section

12 4708(a)(3) of OBRA–1990, is amended to read as follows:

13 ‘‘(C) payment may be made to a physician

14 for physicians’ services (and services furnished

15 incident to such services) furnished by a second

16 physician to patients of the first physician if (i)

17 the first physician is unavailable to provide the

18 services; (ii) the services are furnished pursuant

19 to an arrangement between the two physicians

20 that (I) is informal and reciprocal, or (II) in21 volves per diem or other fee-for-time compensa22 tion for such services; (iii) the services are not

23 provided by the second physician over a contin24 uous period of more than 60 days; and (iv) the

25 claim form submitted to the carrier for such
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1 services includes the second physician’s unique

2 identifier (provided under the system estab3 lished under subsection (x)) and indicates that

4 the claim meets the requirements of this clause

5 for payment to the first physician.’’.

6 SEC. 5160. CORRECTIONS RELATING TO SECTION 4711

7 (HOME AND COMMUNITY CARE FOR FRAIL

8 ELDERLY).

9 (a) Section 1929, as added by section 4711(b) of

10 OBRA–1990, is amended—

11 (1) in subsection (c)(2)(F), by moving the sec12 ond sentence 2 ems to the right;

13 (2) in subsection (d)(2)(F)(ii), by striking ‘‘they

14 manage’’ and inserting ‘‘it manages’’;

15 (3) in subsection (d)(2)(F)(iii), by inserting

16 ‘‘the agency or organization’’ after ‘‘(iii)’’;

17 (4) in subsection (e)(2)(B), by striking ‘‘fiscal

18 year 1989’’ and inserting ‘‘fiscal year 1990’’;

19 (5) in subsection (f)(1), by striking ‘‘Commu20 nity care’’ and inserting ‘‘community care’’;

21 (6) in subsection (g)(1)—

22 (A) by striking ‘‘SETTINGS’’ and inserting

23 ‘‘SETTING’’, and

24 (B) in subparagraph (B), by striking ‘‘set25 ting.’’ and inserting ‘‘setting in which home and
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1 community care under this section is pro2 vided.’’;

3 (7) in subsection (g)(2), by striking ‘‘commu4 nity care’’ the second, third, and fourth places it ap5 pears and inserting ‘‘home and community care’’;

6 (8) in subsection (h)(1)—

7 (A) by striking ‘‘more than 8’’ each place

8 it appears and inserting ‘‘8 or more’’, and

9 (B) in subparagraph (B), by inserting

10 ‘‘(other than merely board)’’ after ‘‘personal

11 services’’;

12 (9) in subsection (h)(2), by striking ‘‘commu13 nity care’’ the second and third places it appears

14 and inserting ‘‘home and community care’’;

15 (10) in subsection (j)(1)—

16 (A) in subparagraph (B)(ii), by striking

17 ‘‘1990’’ and inserting ‘‘1991’’, and

18 (B) by adding at the end the following new

19 subparagraph:

20 ‘‘(C) APPLICABILITY TO COMMUNITY CARE

21 SETTINGS.—Subparagraphs (A) and (B) shall

22 apply to community care settings in the same

23 manner as such subparagraphs apply to provid24 ers of home or community care.’’;
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1 (11) in subsection (j)(2), by adding at the end

2 the following new subparagraph:

3 ‘‘(D) APPLICABILITY TO COMMUNITY CARE

4 SETTINGS.—Subparagraphs (A), (B), and (C)

5 shall apply to community care settings in the

6 same manner as such subparagraphs apply to

7 providers of home or community care.’’;

8 (12) in subsection (k)(1)(A)(i)—

9 (A) by striking ‘‘(d)(2)(E)’’ and inserting

10 ‘‘(d)(2)’’, and

11 (B) by striking ‘‘settings,’’ and inserting

12 ‘‘settings),’’;

13 (13) in subsection (l), by striking ‘‘State wide14 ness’’ and inserting ‘‘Statewideness’’;

15 (14) in subsection (m)—

16 (A) in paragraph (2), by striking ‘‘Individ17 ual Community Care Plan’’ and inserting ‘‘indi18 vidual community care plan’’,

19 (B) in paragraph (3), by striking ‘‘and

20 need for services’’ and inserting ‘‘need for serv21 ices, and income’’,

22 (C) in the second sentence in paragraph

23 (4), by striking ‘‘elderly individuals’’ and all

24 that follows and inserting ‘‘individuals receiving

25 home and community care under this section
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1 who reside in such State in relation to the total

2 number of individuals receiving home and com3 munity care under this section.’’, and

4 (D) by adding at the end the following new

5 paragraph:

6 ‘‘(5) NOTICE TO STATES OF AMOUNTS AVAIL7 ABLE FOR ASSISTANCE.—

8 ‘‘(A) NOTICE TO SECRETARY.—In order to

9 receive Federal medical assistance for expendi10 tures for home and community care under this

11 section for a fiscal year (beginning with fiscal

12 year 1994), a State shall submit a notice to the

13 Secretary of its intention to provide such care

14 under this section not later than 3 months be15 fore the beginning of the fiscal year.

16 ‘‘(B) NOTICE TO STATES.—Not later than

17 2 months before the beginning of each fiscal

18 year (beginning with fiscal year 1994), the Sec19 retary shall notify each State that has submit20 ted a notice to the Secretary under subpara21 graph (A) for the fiscal year of the amount of

22 Federal medical assistance that will be available

23 to the State for the fiscal year (as established

24 under paragraph (4)).’’; and
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1 (15) by adding at the end the following new

2 subsection:

3 ‘‘(n) COMMUNITY CARE SETTING DEFINED.—In this

4 section, the term ‘community care setting’ means a small

5 community care setting (as defined in subsection (g)(1))

6 or a large community care setting (as defined in sub7 section (h)(1)).’’.

8 (b) Section 1905(r)(5) is amended by striking

9 ‘‘1905(a)’’ and inserting ‘‘subsection (a) (other than serv10 ices described in paragraph (22) or (23) of such sub11 section)’’.

12 (c) Section 4711(f) of OBRA–1990 is amended by

13 striking ‘‘Act’’ each place it appears and inserting ‘‘sec14 tion’’.

15 SEC. 5161. CORRECTIONS RELATING TO SECTION 4712

16 (COMMUNITY SUPPORTED LIVING ARRANGE17 MENTS SERVICES).

18 (a) Section 1930, as added by section 4712(b)(2) of

19 OBRA–1990, is amended—

20 (1) in subsection (b)—

21 (A) by striking ‘‘title the term,’’ and in22 serting ‘‘title, the term’’,

23 (B) by striking ‘‘guardian’’ and inserting

24 ‘‘guardian or’’, and
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1 (C) by striking ‘‘3 other’’ and inserting

2 ‘‘3’’;

3 (2) in subsection (d)—

4 (A) in the matter preceding paragraph (1),

5 by striking ‘‘program,’’ and inserting ‘‘pro6 gram’’, and

7 (B) in the second sentence, by striking

8 ‘‘plan’’ each place it appears and inserting

9 ‘‘program’’; and

10 (3) in subsection (i), by striking ‘‘FUNDS’’ and

11 inserting ‘‘FUNDS’’.

12 (b) Section 4712(c) of OBRA–1990 is amended—

13 (1) in paragraph (1), by inserting ‘‘of section

14 1930 of the Social Security Act’’ after ‘‘subsection

15 (h)’’; and

16 (2) in paragraph (2), by striking ‘‘this section’’

17 and inserting ‘‘such section’’.

18 SEC. 5162. CORRECTION RELATING TO SECTION 4713

19 (COBRA CONTINUATION COVERAGE).

20 (a) Section 1902(a)(10) is amended in the matter fol21 lowing subparagraph (F)—

22 (1) by striking ‘‘; and (XI)’’ and inserting ‘‘,

23 (XI)’’;

24 (2) by striking ‘‘individuals, and (XI)’’ and in25 serting ‘‘individuals, and (XII)’’; and
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1 (3) by striking ‘‘COBRA continuation pre2 miums’’ and inserting ‘‘COBRA premiums’’.

3 (b) Section 1902(u)(3), as added by section

4 4713(a)(2) of OBRA–1990, is amended by striking ‘‘title

5 VI’’ and inserting ‘‘part 6 of subtitle B of title I’’.

6 SEC. 5163. CORRECTION RELATING TO SECTION 4716 (MED7 ICAID TRANSITION FOR FAMILY ASSIST8 ANCE).

9 Section 4716(a) of OBRA–1990 is amended by strik10 ing ‘‘AMENDMENTS.—Subsection (f) of section’’ and in11 serting ‘‘IN GENERAL.—Section’’.

12 SEC. 5164. CORRECTIONS RELATING TO SECTION 4723

13 (MEDICAID SPENDDOWN OPTION).

14 Section 1903(f)(2), as amended by section 4723(a)

15 of OBRA–1990, is amended—

16 (1) by striking ‘‘(A)’’ after ‘‘(2)’’;

17 (2) by striking ‘‘or, (B)’’ and inserting ‘‘. There

18 shall also be excluded,’’;

19 (3) by striking ‘‘to the State, provided that’’

20 and inserting ‘‘to the State if’’; and

21 (4) by striking ‘‘pursuant to this subpara22 graph.’’ and inserting ‘‘pursuant to the previous sen23 tence’’.
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1 SEC. 5165. CORRECTIONS RELATING TO SECTION 4724 (OP2 TIONAL STATE DISABILITY DETERMINA3 TIONS).

4 Section 1902(v), as added by section 4724 of OBRA–

5 1990, is amended—

6 (1) by striking ‘‘(v)(1)’’ and inserting ‘‘(v)’’;

7 and

8 (2) by striking ‘‘of the Social Security Act’’.

9 SEC. 5166. CORRECTION RELATING TO SECTION 4732 (SPE10 CIAL RULES FOR HEALTH MAINTENANCE OR11 GANIZATIONS).

12 Section 1903(m)(2)(F)(i), as amended by section

13 4732(b)(2)(B) of OBRA–1990, is amended by striking

14 ‘‘or’’ before ‘‘with an eligible organization’’.

15 SEC. 5167. CORRECTIONS RELATING TO SECTION 4741

16 (HOME AND COMMUNITY-BASED WAIVERS).

17 The first sentence of section 1915(d)(3) is amended

18 by striking the period at the end and inserting the follow19 ing: ‘‘, and a waiver of the requirements of section

20 1902(a)(23) (relating to choice of providers) insofar as

21 such requirements relate to the provision of case manage22 ment services and the State provides assurances satisfac23 tory to the Secretary that a waiver of such requirements

24 will not substantially limit access to such services).’’
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1 SEC. 5168. CORRECTIONS RELATING TO SECTION 4744

2 (FRAIL ELDERLY WAIVERS).

3 (a) Section 1924(a)(5), as added by section

4 4744(b)(1) of OBRA–1990, is amended by striking

5 ‘‘1986.’’ and inserting ‘‘1986 or a waiver under section

6 603(c) of the Social Security Amendments of 1983.’’.

7 (b) Section 603(c) of the Social Security Amend8 ments of 1983 is amended—

9 (1) by striking ‘‘(c)’’ and inserting ‘‘(c)(1)’’;

10 (2) by redesignating paragraphs (1) and (2) as

11 subparagraphs (A) and (B); and

12 (3) by adding at the end the following new

13 paragraph:

14 ‘‘(2) Section 1924 of the Social Security Act shall

15 apply to any individual receiving services from an organi16 zation receiving a waiver under this subsection.’’.

17 SEC. 5169. CORRECTIONS RELATING TO SECTION 4747 (COV18 ERAGE OF HIV-POSITIVE INDIVIDUALS).

19 Section 4747 of OBRA–1990 is amended—

20 (1) in subsection (a), by striking ‘‘subsection

21 (c)’’ and inserting ‘‘subsection (b)’’;

22 (2) in subsection (b)(2)—

23 (A) by striking ‘‘preventative’’ each place it

24 appears and inserting ‘‘preventive’’, and

25 (B) by adding a period at the end of sub26 paragraph (J);
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1 (3) in subsection (c)(1)—

2 (A) by striking ‘‘subsection (c)’’ and in3 serting ‘‘subsection (b)’’, and

4 (B) by striking ‘‘paragraphs (1) and (2)

5 of’’; and

6 (4) in subsection (d)—

7 (A) by striking ‘‘paragraph (3)’’ and in8 serting ‘‘subsection (b)’’, and

9 (B) by striking ‘‘paragraph (1)’’ and in10 serting ‘‘subsection (a)’’.

11 SEC. 5170. CORRECTION RELATING TO SECTION 4751 (AD12 VANCE DIRECTIVES).

13 Section 1903(m)(1)(A), as amended by section

14 4751(b)(1) of OBRA–1990, is amended—

15 (1) by striking ‘‘1902(w)’’ and inserting

16 ‘‘1902(w) and’’; and

17 (2) by striking ‘‘1902(a)’’ and inserting

18 ‘‘1902(w)’’.

19 SEC. 5171. CORRECTIONS RELATING TO SECTION 4752 (PHY20 SICIANS’ SERVICES).

21 (a) The paragraph (58) of section 1902(a) added by

22 section 4752(c)(1)(C) of OBRA–1990 is amended by

23 striking ‘‘subsection (v)’’ and inserting ‘‘subsection (x)’’.
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1 (b) Subparagraphs (A) and (B) of the paragraph (14)

2 of section 1903(i) added by section 4752(e)(2) of OBRA–

3 1990 are each amended—

4 (1) by striking ‘‘or’’ at the end of clause (v);

5 (2) by redesignating clause (vi) as clause (vii);

6 and

7 (3) by inserting after clause (v) the following

8 new clause:

9 ‘‘(vi) delivers such services in the

10 emergency department of a hospital par11 ticipating in the state plan approved under

12 this title, or’’.

13 SEC. 5172. CORRECTIONS RELATING TO SECTION 4801

14 (NURSING HOME REFORM).

15 (a) Section 1919(b)(3)(C)(i)(I), as amended by sec16 tion 4801(e)(3) of OBRA–1990, is amended by striking

17 ‘‘no later than’’ before ‘‘not to exceed 14 days’’.

18 (b) Section 1919(b)(5)(D), as amended by section

19 4801(a)(4) of OBRA–1990, is amended by striking the

20 comma before ‘‘or a new competency evaluation pro21 gram.’’.

22 (c) Section 1919(b)(5)(G) is amended by striking ‘‘or

23 licensed or certified social worker’’ and inserting ‘‘licensed

24 or certified social worker, registered respiratory therapist,

25 or certified respiratory therapy technician’’.
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1 (d) Section 1919(f)(2)(B)(i) is amended by striking

2 ‘‘facilities,’’ and inserting ‘‘facilities (subject to clause

3 (iii)),’’.

4 (e) Section 1919(f)(2)(B)(iii)(I)(c) is amended by

5 striking ‘‘clauses’’ each place it appears and inserting

6 ‘‘clause’’.

7 (f) Section 1919(g)(5)(B) is amended by striking

8 ‘‘paragraphs’’ and inserting ‘‘paragraph’’.

9 (g) Section 4801(a)(6)(B) of OBRA–1990 is

10 amended—

11 (1) by striking ‘‘The amendments’’ and insert12 ing ‘‘(i) The amendments’’;

13 (2) by redesignating clauses (i) through (v) as

14 subclauses (I) through (V); and

15 (3) by adding at the end the following new

16 clause:

17 ‘‘(ii) Notwithstanding clause (i) and sub18 ject to section 1919(f)(2)(B)(iii) of the Social

19 Security Act (as amended by subparagraph

20 (A)), a State may approve a training and com21 petency evaluation program or a competency

22 evaluation program offered by or in a nursing

23 facility described in clause (i) if, during the pre24 vious 2 years, none of the subclauses of clause

25 (i) applied to the facility.’’.
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1 SEC. 5173. OTHER TECHNICAL CORRECTIONS.

2 (a) Section 1905(o)(1)(A) is amended—

3 (1) in the first sentence, by striking ‘‘intermedi4 ate care facility services’’ and inserting ‘‘for nursing

5 facility services or intermediate care facility services

6 for the mentally retarded’’; and

7 (2) in the second sentence, by striking ‘‘or in8 termediate care facility’’ and inserting ‘‘(for pur9 poses of title XVIII), a nursing facility, or an inter10 mediate care facility for the mentally retarded’’.

11 (b) Section 1915(d) is amended—

12 (1) by striking ‘‘skilled nursing facility or inter13 mediate care facility’’ each place it appears in para14 graphs (1), (2)(B), and (2)(C) and inserting ‘‘nurs15 ing facility’’;

16 (2) in paragraph (2)(B)(i), by striking ‘‘skilled

17 nursing or intermediate care facility’’ and inserting

18 ‘‘nursing facility’’;

19 (3) in paragraph (5)(A), by striking ‘‘under’’

20 the second place it appears and inserting ‘‘(or, in the

21 case of waiver years beginning on or after October

22 1, 1990, with respect to nursing facility services and

23 home and community-based services) under’’; and

24 (4) in paragraph (5)(B)—

25 (A) in clause (i), by striking ‘‘furnished’’

26 and inserting ‘‘(or, with respect to waiver years
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1 beginning on or after October 1, 1990, for

2 nursing facility services) furnished’’; and

3 (B) in clause (iii)(I), by striking ‘‘(regard4 less’’ and inserting ‘‘(or, with respect to waiver

5 years beginning on or after October 1, 1990,

6 which comprise nursing facility services) (re7 gardless’’.

8 SEC. 5174. CORRECTIONS TO DESIGNATIONS OF NEW PRO9 VISIONS.

10 (a) PARAGRAPHS ADDED TO SECTION 1902(a).—

11 Section 1902(a) is amended—

12 (1) by striking ‘‘and’’ at the end of paragraph

13 (54);

14 (2) in the paragraph (55) inserted by section

15 4602(a)(3) of OBRA–1990, by striking the period at

16 the end and inserting a semicolon;

17 (3) by redesignating the paragraph (55) in18 serted by section 4604(b)(3) of OBRA–1990 as

19 paragraph (56), by transferring and inserting it

20 after the paragraph (55) inserted by section

21 4602(a)(3) of such Act, and by striking the period

22 at the end and inserting a semicolon;

23 (4) by placing paragraphs (57) and (58), in24 serted by section 4751(a)(1)(C) of OBRA–1990, im-
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1 mediately after paragraph (56), as redesignated by

2 paragraph (3);

3 (5) in the paragraph (58) inserted by section

4 4751(a)(1)(C) of OBRA–1990, by striking the pe5 riod at the end and inserting ‘‘; and’’; and

6 (6) by redesignating the paragraph (58) in7 serted by section 4752(c)(1)(C) of OBRA–1990 as

8 paragraph (59) and by transferring and inserting it

9 after the paragraph (58) inserted by section

10 4751(a)(1)(C) of such Act.

11 (b) PARAGRAPHS ADDED TO SECTION 1903(i).—Sec12 tion 1903(i), as amended by section 2(b)(2) of the Medic13 aid Voluntary Contribution and Provider-Specific Tax

14 Amendments of 1991, is amended—

15 (1) in the paragraph (10) inserted by section

16 4401(a)(1)(B) of OBRA–1990, by striking all that

17 follows ‘‘1927(g)’’ and inserting a semicolon;

18 (2) by redesignating the paragraph (12) in19 serted by section 4752(a)(2) of OBRA–1990 as

20 paragraph (11), by transferring and inserting it

21 after the paragraph (10) inserted by section

22 4401(a)(1)(B) of OBRA–1990, and by striking the

23 period at the end and inserting a semicolon;

24 (3) by redesignating the paragraph (14) in25 serted by section 4752(e) of OBRA–1990 as para-
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1 graph (12), by transferring and inserting it after

2 paragraph (11), as redesignated by paragraph (2),

3 and by striking the period at the end and inserting

4 ‘‘; or’’; and

5 (4) by redesignating the paragraph (11) in6 serted by section 4801(e)(16)(A) of OBRA–1990 as

7 paragraph (13) and by transferring and inserting it

8 after paragraph (12), as redesignated by paragraph

9 (3).

10 (c) PARAGRAPHS ADDED TO SECTION 1905(a).—

11 (1) IN GENERAL.—Section 1905(a) is

12 amended—

13 (A) by striking ‘‘and’’ at the end of para14 graph (21);

15 (B) in paragraph (24), by striking the pe16 riod at the end and inserting ‘‘; and’’; and

17 (C) by redesignating paragraphs (22),

18 (23), and (24) as paragraphs (24), (22), and

19 (23), respectively, and by transferring and in20 serting paragraph (24) after paragraph (23), as

21 so redesignated.

22 (2) CONFORMING AMENDMENTS.—(A) Effective

23 July 1, 1991, section 1902(a)(10)(C)(iv), as amend24 ed by section 4755(c)(1)(A) of OBRA–1990, is
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1 amended by striking ‘‘through (21)’’ and inserting

2 ‘‘through (23)’’.

3 (B) Effective July 1, 1991, section 1902(j), as

4 amended by section 4711(d)(1) of OBRA–1990, is

5 amended by striking ‘‘through (22)’’ and inserting

6 ‘‘through (24)’’.

7 (d) FINAL SECTIONS.—Section 1928, as redesignated

8 by section 4401(a)(3) of OBRA–1990, is amended—

9 (1) by transferring such section to the end of

10 title XIX of the Social Security Act; and

11 (2) by redesignating such section as section

12 1931.

13 CHAPTER 2—UNIVERSAL ACCESS TO

14 CHILDHOOD IMMUNIZATIONS

15 SEC. 5181. ESTABLISHMENT OF ENTITLEMENT AND MON16 ITORING PROGRAMS WITH RESPECT TO

17 CHILDHOOD IMMUNIZATIONS.

18 (a) IN GENERAL.—Title XXI of the Public Health

19 Service Act (42 U.S.C. 300aa–1 et seq.) is amended by

20 adding at the end the following subtitle:
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1 ‘‘Subtitle 3—Entitlement and Mon2 itoring Programs With Respect

3 to Childhood Immunizations

4 ‘‘PART A—ENTITLEMENT PROGRAM

5 ‘‘SEC. 2151. DELIVERY TO STATES OF SUFFICIENT QUAN6 TITIES OF PEDIATRIC VACCINES.

7 ‘‘(a) IN GENERAL.—In the case of any State that

8 submits to the Secretary an application in accordance with

9 section 2157, the Secretary, acting through the Director

10 of the Centers for Disease Control and Prevention, shall

11 provide for the purchase and delivery on behalf of the

12 State of such quantities of pediatric vaccines as may be

13 necessary for the immunization of each eligible child in

14 the State. The preceding sentence is subject to sections

15 2152(d) and 2159(a).

16 ‘‘(b) ELIGIBLE CHILDREN.—For purposes of this

17 part, the term ‘eligible child’ means an individual 18 years

18 of age or younger who—

19 ‘‘(1) with respect to the State involved, is enti20 tled to medical assistance under the plan approved

21 for the State under title XIX of the Social Security

22 Act (including a State operating under a statewide

23 waiver under section 1115 of such Act);

24 ‘‘(2)(A) is uninsured with respect to health in25 surance policies or plans (including group health
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1 plans or prepaid health plans and including em2 ployee welfare benefit plans under the Employee Re3 tirement Income Security Act of 1974); or

4 ‘‘(B) is covered under such a policy or plan, but

5 under the policy or plan benefits are not available

6 with respect to immunizations; or

7 ‘‘(3) is an Indian.

8 ‘‘SEC. 2152. ENTITLEMENTS.

9 ‘‘(a) ENTITLEMENT OF STATES.—Subject to sub10 section (d), in the case of any State that submits to the

11 Secretary an application in accordance with section 2157,

12 the State is entitled to have the Secretary provide for the

13 purchase and delivery on behalf of the State of pediatric

14 vaccines under section 2151. The preceding sentence con15 stitutes budget authority in advance of appropriations

16 Acts, and represents the obligation of the Federal Govern17 ment to provide for the purchase and delivery to the State

18 of the vaccines.

19 ‘‘(b) ENTITLEMENTS OF CHILDREN AND HEALTH

20 CARE PROVIDERS.—Subject to subsection (d), the Sec21 retary may provide for the purchase and delivery of pedi22 atric vaccines under section 2151 on behalf of a State only

23 if the State agrees as follows:

24 ‘‘(1) Each eligible child in the State, in receiv25 ing an immunization with a pediatric vaccine from
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1 a program-registered provider (as defined in section

2 2153(a)), is entitled to receive the immunization

3 without charge for the cost of such vaccine.

4 ‘‘(2) Each program-registered provider in the

5 State who administers a pediatric vaccine to an eligi6 ble child in the State is entitled to receive such vac7 cine from the State without charge.

8 ‘‘(3) The State will carry out a program to ad9 minister the entitlements established pursuant to

10 paragraphs (1) and (2).

11 ‘‘(c) ENFORCEMENT OF PROVIDER RIGHTS BY ELI12 GIBLE CHILDREN.—With respect to the obligation of a

13 State under the entitlement established in subsection

14 (b)(2), an eligible child (or representative of the child)

15 may enforce the rights of the provider under such para16 graph if—

17 ‘‘(1) the provider administered a pediatric vac18 cine to the child notwithstanding the failure of the

19 State to carry out such obligation with respect to the

20 vaccine; or

21 ‘‘(2) an immunization with the vaccine was

22 sought for the child by a parent of the child, but the

23 provider, on the basis of such failure of the State,

24 did not administer the vaccine to the child.

25 ‘‘(d) CERTAIN CONDITIONS.—
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1 ‘‘(1) IN GENERAL.—This part does not apply

2 with respect to any vaccine administered before Oc3 tober 1, 1994.

4 ‘‘(2) RELATIONSHIP TO PURCHASE CONTRACTS

5 WITH MANUFACTURERS.—With respect to a pedi6 atric vaccine, the obligation of the Federal Govern7 ment pursuant to subsection (a), and the obligations

8 of the State pursuant to subsection (b), are effective

9 only to the extent that there is in effect a contract

10 under section 2158 for the purchase and delivery of

11 the vaccine.

12 ‘‘(3) SUBMISSION OF APPLICATION.—

13 ‘‘(A) Subject to subparagraph (C), the en14 titlements established pursuant to subsections

15 (a) and (b) are established with respect to a

16 State upon the State submitting to the Sec17 retary an application in accordance with section

18 2157.

19 ‘‘(B) An application submitted to the Sec20 retary under section 2157 is deemed to have

21 been submitted in accordance with such section

22 unless the Secretary, not later than 30 days

23 after the date on which the application is sub24 mitted, notifies the State that the application is

25 not in accordance with such section.
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1 ‘‘(C) In the case of a State whose applica2 tion submitted under section 2157 is not sub3 mitted in accordance with such section, the Sec4 retary may, upon the submission by the State

5 of an application that is in accordance with

6 such section, provide that the entitlements es7 tablished pursuant to such submission are

8 deemed to have been established on the date on

9 which the State first submitted the application.

10 ‘‘SEC. 2153. VOLUNTARY PARTICIPATION OF HEALTH CARE

11 PROVIDERS.

12 ‘‘(a) IN GENERAL.—

13 ‘‘(1) REQUEST FOR PARTICIPATION; REQUIRED

14 APPROVAL.—The Secretary may provide for the pur15 chase and delivery of pediatric vaccines under sec16 tion 2151 on behalf of a State only if the State

17 agrees that federally-supplied pediatric vaccines will

18 not be distributed to a health care provider unless—

19 ‘‘(A) the provider submits to the State a

20 written request to participate in the program

21 established by the State pursuant to section

22 2152(b)(3);

23 ‘‘(B) the request is in such form and is

24 made in such manner as the Secretary may

25 require; and
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1 ‘‘(C) the provider makes the agreements

2 described in this section.

3 ‘‘(2) PROGRAM-REGISTERED PROVIDERS.—For

4 purposes of this part, the term ‘program-registered

5 provider’ means a health care provider that meets

6 the conditions specified in subparagraphs (A)

7 through (C) of paragraph (1).

8 ‘‘(b) ELIGIBILITY OF CHILDREN.—

9 ‘‘(1) IN GENERAL.—An agreement for a health

10 care provider under subsection (a) is that the

11 provider—

12 ‘‘(A) before administering a pediatric vac13 cine to a child, will ask a parent of the child

14 such questions as are necessary to determine

15 whether the child is an eligible child;

16 ‘‘(B) will, for a period of time specified by

17 the Secretary, maintain records of responses

18 made to the questions; and

19 ‘‘(C) will, upon request, make such records

20 available to the State involved and to the Sec21 retary, subject to paragraph (2).

22 ‘‘(2) RESTRICTION ON USE OF INFORMATION.—

23 Records provided to a State or to the Secretary

24 under paragraph (1)(C) may be used only for pur-
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1 poses of audit of the program carried out under sec2 tion 2152(b)(3) by the State.

3 ‘‘(c) CHARGES FOR VACCINES.—

4 ‘‘(1) VACCINES PER SE.—An agreement for a

5 health care provider under subsection (a) is that, in

6 administering a federally-supplied pediatric vaccine

7 to an eligible child, the provider will not impose a

8 charge for the cost of the vaccine.

9 ‘‘(2) ADMINISTRATION OF VACCINES.—With re10 spect to compliance with an agreement under para11 graph (1), a program-registered provider may im12 pose a charge for the administration of a federally13 supplied pediatric vaccine, subject to an agreement

14 by the provider that the provider will not impose

15 such charge with respect to a child if a parent of the

16 child certifies to the provider that the parent is un17 able to pay the charge.

18 ‘‘(d) RULES OF CONSTRUCTION.—

19 ‘‘(1) EXTENT OF PARTICIPATION.—This section

20 may not be construed as requiring that a program21 registered provider administer a federally-supplied

22 pediatric vaccine to each eligible child for whom an

23 immunization with the vaccine is sought from the

24 provider.
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1 ‘‘(2) VERIFICATION OF INFORMATION.—With

2 respect to compliance with agreements under sub3 sections (b) and (c), such agreements may not be

4 construed as requiring a program-registered provider

5 to verify independently the information provided to

6 the provider by a parent pursuant to such sub7 sections.

8 ‘‘SEC. 2154. INTRASTATE DISTRIBUTION OF PEDIATRIC VAC9 CINES.

10 ‘‘(a) IN GENERAL.—Not later than 180 days after

11 the date of the enactment of the Omnibus Budget Rec12 onciliation Act of 1993, the Secretary shall, through publi13 cation in the Federal Register, establish criteria for the

14 delivery on behalf of the States of federally-supplied pedi15 atric vaccines to program-registered providers in the

16 State.

17 ‘‘(b) INVOLVEMENT OF CERTAIN PROVIDERS.—

18 ‘‘(1) IN GENERAL.—In establishing criteria

19 under subsection (a), the Secretary shall establish

20 criteria with respect to encouraging the entities de21 scribed in paragraph (2) to become program-reg22 istered providers.

23 ‘‘(2) RELEVANT PROVIDERS.—The entities re24 ferred to in paragraph (1) are—

25 ‘‘(A) private health care providers; and
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1 ‘‘(B)(i) health care providers that receive

2 funds under title V of the Indian Health Care

3 Improvement Act;

4 ‘‘(ii) the Indian Health Service; and

5 ‘‘(iii) health programs or facilities operated

6 by Indian tribes or tribal organizations.

7 ‘‘(c) CULTURAL CONTEXT OF SERVICES.—In estab8 lishing criteria under subsection (a), the Secretary shall

9 require that, in providing a federally-supplied pediatric

10 vaccine to any population of eligible children a substantial

11 portion of whose parents have a limited ability to speak

12 the English language, a State have in effect a reasonable

13 plan to administer the vaccines through program-reg14 istered providers who are able to communicate with the

15 population involved in the language and cultural context

16 that is most appropriate.

17 ‘‘(d) COMPLIANCE BY STATES.—The Secretary may

18 provide for the purchase and delivery of pediatric vaccines

19 under section 2151 on behalf of a State only if the State

20 agrees to maintain compliance with the criteria established

21 under subsection (a).

22 ‘‘SEC. 2155. GENERAL PROVISIONS.

23 ‘‘(a) FEDERAL STANDARDS ON ACCOUNTABILITY.—

24 ‘‘(1) ESTABLISHMENT OF STANDARDS.—Not

25 later than 180 days after the date of the enactment
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1 of the Omnibus Budget Reconciliation Act of 1993,

2 the Secretary shall, through publication in the Fed3 eral Register, establish standards with respect to de4 termining the extent to which States and program5 registered providers are in compliance with the

6 agreements made under this part.

7 ‘‘(2) COMPLIANCE BY STATES.— The Secretary

8 may provide for the purchase and delivery of pedi9 atric vaccines under section 2151 on behalf of a

10 State only if the State agrees to maintain compli11 ance with the standards established under subsection

12 (a).

13 ‘‘(b) STATE MAINTENANCE OF IMMUNIZATION

14 LAWS.—The Secretary may provide for the purchase and

15 delivery of vaccines under section 2151 on behalf of a

16 State only if the State certifies to the Secretary that, if

17 it had in effect as of May 1, 1993, a law that requires

18 some or all health insurance policies or plans to provide

19 some coverage with respect to a pediatric vaccine, the

20 State has not modified or repealed such law in a manner

21 that reduces the amount of coverage so required.

22 ‘‘(c) PARTICIPATION IN NATIONAL MONITORING SYS23 TEM.—On and after January 1, 1998, the Secretary may

24 provide for the purchase and delivery of vaccines under

25 section 2151 on behalf of a State only if the State certifies
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1 to the Secretary that the State is operating a registry in

2 accordance with part B.

3 ‘‘SEC. 2156. STATE OPTION REGARDING IMMUNIZATION OF

4 ADDITIONAL CATEGORIES OF CHILDREN.

5 ‘‘(a) STATE PURCHASES.—Subject to subsections (b)

6 and (c), for the purpose of administering a pediatric vac7 cine to children in addition to eligible children, any partici8 pating State under section 2151 may, pursuant to section

9 2158(a)(2), purchase the vaccine from a manufacturer of

10 the vaccine at the price in effect under section 2158.

11 ‘‘(b) REQUIREMENTS.—A State may purchase pedi12 atric vaccines pursuant to subsection (a) only if the follow13 ing conditions are met:

14 ‘‘(1) The State agrees that the vaccines will be

15 used to provide immunizations for children who are

16 not eligible children.

17 ‘‘(2) The State designates the particular cat18 egories of children who are to receive the immuniza19 tions, and submits to the Secretary a description of

20 the categories so designated.

21 ‘‘(3) The State provides to the Secretary such

22 information as the Secretary determines to be nec23 essary to provide for quantities of pediatric vaccines

24 for the State to purchase pursuant to section

25 2158(a)(2).
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1 ‘‘(4) The State agrees, subject to subsection (c),

2 that the program established by the State pursuant

3 to section 2152(b)(3) applies to children designated

4 under paragraph (2) to the same extent and in the

5 same manner as the program applies to eligible chil6 dren (except for the State being the purchaser of the

7 pediatric vaccines involved).

8 ‘‘(c) CERTAIN LIMITATIONS.—A State may purchase

9 pediatric vaccines pursuant to subsection (a) only if the

10 State agrees as follows:

11 ‘‘(1) The authorization established in such sub12 section with respect to a pediatric vaccine is subject

13 to the quantity of the vaccine that, on behalf of the

14 State, the Secretary provides for under section

15 2158(a)(2).

16 ‘‘(2) In any case in which multiple contracts are

17 in effect under section 2158 with respect to such a

18 vaccine and the State elects to purchase the vaccine

19 pursuant to subsection (a), the Secretary will deter20 mine which of such contracts will be applicable to

21 the purchase.

22 ‘‘SEC. 2157. STATE APPLICATION FOR VACCINES.

23 ‘‘(a) IN GENERAL.—An application by a State for pe24 diatric vaccines under section 2151(a) is in accordance

25 with this section if the application—
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1 ‘‘(1) is submitted not later than the date speci2 fied by the Secretary;

3 ‘‘(2) contains each agreement required in this

4 part (including the agreements required in section

5 2156, if the State is electing to purchase pediatric

6 vaccines pursuant to such section);

7 ‘‘(3) contains any information required in this

8 part to be submitted to the Secretary (including the

9 information required in section 2156, if the State is

10 electing to purchase pediatric vaccines pursuant to

11 such section);

12 ‘‘(4) contains the certification required in sub13 section (b) of section 2155 and, as applicable, the

14 certification required in subsection (c) of such sec15 tion; and

16 ‘‘(5) is in such form, is made in such manner,

17 and contains such agreements, assurances, and in18 formation as the Secretary determines to be nec19 essary to carry out this part.

20 ‘‘(b) FAILURE TO APPLY.—

21 ‘‘(1) IN GENERAL.—If, as of January 1, 1998,

22 a State is not receiving pediatric vaccines under sec23 tion 2151 and carrying out a program pursuant to

24 section 2152(b)(3), the Secretary shall, subject to
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1 paragraph (2), terminate payments to the State

2 under part A of title XIX.

3 ‘‘(2) EXCEPTIONS.—Paragraph (1) does not

4 apply in the case of a State described in such para5 graph that—

6 ‘‘(A) is, through all willing health care pro7 viders, providing for the immunization of eligi8 ble children with pediatric vaccines, and is not

9 imposing a charge on such providers or children

10 for the costs of the vaccines; or

11 ‘‘(B) meets or exceeds the objectives estab12 lished by the Secretary for the year 2000 for

13 the immunization status of children in the

14 United States who are 2 years of age.

15 ‘‘SEC. 2158. CONTRACTS WITH MANUFACTURERS OF PEDI16 ATRIC VACCINES.

17 ‘‘(a) IN GENERAL.—Subject to the provisions of this

18 section, the Secretary shall periodically enter into negotia19 tions with manufacturers of pediatric vaccines for the pur20 pose of maintaining contracts under which—

21 ‘‘(1) the Secretary provides for the purchase of

22 quantities of pediatric vaccines necessary for carry23 ing out section 2151, and provides for the delivery

24 of the vaccines to participating States under such

25 section; and
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1 ‘‘(2) each participating State, at the option of

2 the State under section 2156, is permitted to obtain

3 additional quantities of pediatric vaccines (subject to

4 limits in such contracts regarding quantities)

5 through purchasing the vaccines from the manufac6 turers at the price negotiated by the Secretary for

7 the quantities specified in paragraph (1).

8 The Secretary shall enter into the initial negotiations

9 under the preceding sentence not later than 180 days after

10 the date of the enactment of the Omnibus Budget

11 Reconciliation Act of 1993.

12 ‘‘(b) NEGOTIATION OF PURCHASE PRICE.—

13 ‘‘(1) IN GENERAL.—In negotiating the prices at

14 which pediatric vaccines will be purchased from a

15 manufacturer under subsection (a), the Secretary

16 shall negotiate a price that provides a reasonable

17 profit for the manufacturer.

18 ‘‘(2) CERTAIN FACTORS.—

19 ‘‘(A) In determining a reasonable profit for

20 a manufacturer under paragraph (1), the Sec21 retary shall consider the following factors:

22 ‘‘(i) The costs of the manufacturer in

23 researching, developing, and producing the

24 pediatric vaccine involved.
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1 ‘‘(ii) The costs of the manufacturer in

2 researching and developing new or im3 proved vaccines (pediatric or otherwise).

4 ‘‘(iii) The costs of shipping and han5 dling pediatric vaccines in compliance with

6 the agreement under subsection (c).

7 ‘‘(iv) Such other factors as the Sec8 retary determines to be appropriate.

9 ‘‘(B) With respect to factors considered

10 under subparagraph (A), the Secretary may

11 enter into a contract under subsection (a) only

12 if the manufacturer involved provides to the

13 Secretary such information regarding the fac14 tors as the Secretary determines to be appro15 priate.

16 ‘‘(3) CONFIDENTIALITY.—With respect to infor17 mation provided to the Secretary by a manufacturer

18 under paragraph (2), the following applies:

19 ‘‘(A) The Secretary shall maintain the con20 fidentiality of the information, with provision

21 for reasonable disclosures.

22 ‘‘(B) For purposes of section 552(b)(4) of

23 title 5, United States Code, the information

24 shall be considered to be trade secrets and com-
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1 mercial or financial information obtained from

2 a person and privileged or confidential.

3 ‘‘(C) Section 1905 of title 18, United

4 States Code, applies to information maintained

5 confidentially under subparagraph (A).

6 ‘‘(c) CHARGES FOR SHIPPING AND HANDLING.—The

7 Secretary may enter into a contract under subsection (a)

8 only if the manufacturer involved agrees that the manu9 facturer will provide for delivering the vaccines on behalf

10 of the States in accordance with the programs established

11 by the States pursuant to section 2152(b)(3), and will not

12 impose any charges for the costs of such delivery (except

13 to the extent such costs are provided for in the price nego14 tiated under subsection (b)).

15 ‘‘(d) QUANTITY OF VACCINES.—For the purpose of

16 ensuring that the Federal Government has the ability to

17 carry out section 2151, the Secretary, in negotiations

18 under subsection (a), shall negotiate for maintaining a

19 supply of pediatric vaccines to meet unanticipated needs

20 for the vaccines. For purposes of the preceding sentence,

21 the Secretary shall negotiate for a 6-month supply of vac22 cines in addition to the quantity that the Secretary other23 wise would provide for in such negotiations. In carrying

24 out this paragraph, the Secretary shall consider the poten-
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1 tial for outbreaks of the diseases with respect to which

2 the vaccines have been developed.

3 ‘‘(e) NEGOTIATING AUTHORITY OF SECRETARY.—In

4 carrying out subsection (a), the Secretary, to the extent

5 determined by the Secretary to be appropriate, may enter

6 into contracts described in such subsection, may decline

7 to enter into such contracts, and with the consent of the

8 manufacturers involved, may modify such agreements and

9 may extend such agreements.

10 ‘‘(f) CERTAIN CONTRACT PROVISIONS.—

11 ‘‘(1) DURATION.—A contract entered into by

12 the Secretary under subsection (a) is effective for

13 such period as the Secretary and the manufacturer

14 involved may agree in the contract.

15 ‘‘(2) ADVANCE FUNDING.—The Secretary may,

16 pursuant to section 2152(a), enter into contracts

17 under subsection (a) under which the Federal Gov18 ernment is obligated to make outlays, the budget au19 thority for which is not provided for in advance in

20 appropriations Acts.

21 ‘‘(g) REPORTS TO SECRETARY.—The Secretary may

22 enter into a contract under subsection (a) only if the man23 ufacturer involved agrees to submit to the Secretary such

24 reports as the Secretary determines to be appropriate with

25 respect to compliance with the contract. For purposes of
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1 paragraph (3) of subsection (b), such reports shall be con2 sidered to be information provided by the manufacturer

3 to the Secretary under paragraph (2) of such subsection.

4 ‘‘(h) MULTIPLE SUPPLIERS.—

5 ‘‘(1) IN GENERAL.—In the case of the pediatric

6 vaccine involved, the Secretary shall, as appropriate,

7 enter into a contract under subsection (a) with each

8 manufacturer of the vaccine that meets the terms

9 and conditions of the Secretary for an award of such

10 a contract (including terms and conditions regarding

11 safety, quality, and price).

12 ‘‘(2) RULE OF CONSTRUCTION.—With respect

13 to multiple contracts entered into pursuant to para14 graph (1), such paragraph may not be construed as

15 prohibiting the Secretary from having in effect dif16 ferent prices under each of such contracts.

17 ‘‘SEC. 2159. CERTAIN ADMINISTRATIVE VARIATIONS.

18 ‘‘(a) TRIBES AND TRIBAL ORGANIZATIONS.—

19 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

20 the Secretary shall provide for the purchase and de21 livery on behalf of each Indian tribe and each tribal

22 organization of such quantities of pediatric vaccines

23 as may be necessary for the immunization of each

24 Indian child in the State in which the tribe or orga25 nization (as the case may be) is located.
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1 ‘‘(2) ENTITLEMENTS; ADMINISTERING PRO2 GRAM.—The Secretary may provide for the purchase

3 and delivery of pediatric vaccines under paragraph

4 (1) on behalf of an Indian tribe or tribal organiza5 tion only if the tribe or organization (as the case

6 may be) agrees that this part applies to the tribe or

7 organization (in relation to Indian children) to the

8 same extent and in the manner as such part applies

9 to States (in relation to eligible children).

10 ‘‘(b) STATE AS MANUFACTURER.—

11 ‘‘(1) PAYMENTS IN LIEU OF VACCINES.—In the

12 case of a participating State under section 2151 that

13 manufactures a pediatric vaccine and is not receiv14 ing the vaccine under such section, if the Secretary

15 determines that the program of the State under

16 2152(b)(3) is carried out with respect to the vaccine,

17 the Secretary shall provide to the State an amount

18 equal to the value of the quantity of such vaccine

19 that otherwise would have been delivered to the

20 State under section 2151, subject to the provisions

21 of this subsection.

22 ‘‘(2) DETERMINATION OF VALUE.—In deter23 mining the amount to pay a State under paragraph

24 (1) with respect to a pediatric vaccine, the value of

25 the quantity of vaccine shall be determined on the
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1 basis of the price in effect for the vaccine under con2 tracts under section 2158. If more than 1 such con3 tract is in effect, the Secretary shall determine such

4 value on the basis of the average of the prices under

5 the contracts, after weighting each such price in re6 lation to the quantity of vaccine under the contract

7 involved.

8 ‘‘(3) USE OF PAYMENTS.—A State may expend

9 payments received under paragraph (1) only for pur10 poses relating to pediatric vaccines.

11 ‘‘SEC. 2160. LIST OF PEDIATRIC VACCINES; SCHEDULE FOR

12 ADMINISTRATION.

13 ‘‘(a) RECOMMENDED PEDIATRIC VACCINES.—

14 ‘‘(1) IN GENERAL.—The Secretary shall estab15 lish a list of the vaccines that the Secretary rec16 ommends for administration to all children for the

17 purpose of immunizing the children, subject to such

18 contraindications for particular medical categories of

19 children as the Secretary may establish under sub20 section (b)(1)(D). The Secretary shall periodically

21 review the list, and shall revise the list as appro22 priate.

23 ‘‘(2) RULE OF CONSTRUCTION.—
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1 ‘‘(A) The list of vaccines specified in sub2 paragraph (B) is deemed to be the list of vac3 cines maintained under paragraph (1).

4 ‘‘(B) The list of vaccines specified in this

5 subparagraph is the list of vaccines that, for

6 purposes of paragraph (1), is established (and

7 periodically reviewed and as appropriate re8 vised) by the Advisory Committee on Immuni9 zation Practices, an advisory committee estab10 lished by the Secretary, acting through the Di11 rector of the Centers for Disease Control and

12 Prevention.

13 ‘‘(b) RECOMMENDED SCHEDULE FOR ADMINISTRA14 TION.—

15 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

16 in the case of a pediatric vaccine, the Secretary shall

17 establish (and periodically review and as appropriate

18 revise) a schedule of nonbinding recommendations

19 for the following:

20 ‘‘(A) The number of immunizations with

21 the vaccine that children should receive.

22 ‘‘(B) The ages at which children should re23 ceive the immunizations.

24 ‘‘(C) The dosage of vaccine that should be

25 administered in the immunizations.
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1 ‘‘(D) Any contraindications regarding ad2 ministration of the vaccine to particular medical

3 categories of children.

4 ‘‘(E) Such other guidelines as the Sec5 retary determines to be appropriate with re6 spect to administering the vaccine to children.

7 ‘‘(2) VARIATIONS IN MEDICAL PRACTICE.—In

8 establishing and revising a schedule under para9 graph (1), the Secretary shall ensure that, in the

10 case of the pediatric vaccine involved, the schedule

11 provides for the full range of variations in medical

12 judgment regarding the administration of the vac13 cine, subject to remaining within medical norms.

14 ‘‘(3) RULE OF CONSTRUCTION.—

15 ‘‘(A) The schedule specified in subpara16 graph (B) is deemed to be the schedule main17 tained under paragraph (1).

18 ‘‘(B) The schedule specified in this sub19 paragraph is the schedule that, for purposes of

20 paragraph (1), is established (and periodically

21 reviewed and as appropriate revised) by the ad22 visory committee specified in subsection

23 (a)(2)(B).

24 ‘‘(c) GENERALLY APPLICABLE RULES OF CONSTRUC25 TION.—
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1 ‘‘(1) IN GENERAL.—The list established under

2 subsection (a) and the schedules established under

3 subsection (b) do not constitute guidelines, stand4 ards, performance measures, or review criteria for

5 purposes of the program carried out by the Adminis6 trator for Health Care Policy and Research under

7 part B of title IX or under section 1142 of the

8 Social Security Act.

9 ‘‘(2) STATE LAWS.—This section does not su10 persede any State law on requirements with respect

11 to receiving immunizations (including any such law

12 relating to religious exemptions or medical exemp13 tions).

14 ‘‘(d) ISSUANCE OF LIST AND SCHEDULES.—Not later

15 than 180 days after the date of the enactment of the Om16 nibus Budget Reconciliation Act of 1993, the Secretary

17 shall establish the initial list required in subsection (a) and

18 the schedule required in subsection (b).

19 ‘‘SEC. 2161. CHILDHOOD IMMUNIZATION TRUST FUND.

20 ‘‘(a) ESTABLISHMENT OF FUND.—There is estab21 lished in the Treasury of the United States a fund to be

22 known as the National Childhood Immunization Trust

23 Fund (in this section referred to as the ‘Fund’). The Fund

24 shall consist of such amounts as may be appropriated to

25 the Fund in appropriations Acts, in the Internal Revenue
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1 Code of 1986, or in subsection (c)(3). Amounts appro2 priated to the Fund shall remain available until expended.

3 ‘‘(b) EXPENDITURES FROM FUND.—Amounts in the

4 Fund are available to the Secretary for the purpose of car5 rying out this part. Payments under the program under

6 this part, and the costs of carrying out such program,

7 shall be exempt from reduction under any order issued

8 under part C of the Balanced Budget and Emergency

9 Deficit Control Act of 1985.

10 ‘‘(c) INVESTMENT.—

11 ‘‘(1) IN GENERAL.—The Secretary of the

12 Treasury shall invest such amounts of the Fund as

13 such Secretary determines are not required to meet

14 current withdrawals from the Fund. Such invest15 ments may be made only in interest-bearing obliga16 tions of the United States. For such purpose, such

17 obligations may be acquired on original issue at the

18 issue price, or by purchase of outstanding obliga19 tions at the market price.

20 ‘‘(2) SALE OF OBLIGATIONS.—Any obligation

21 acquired by the Fund may be sold by the Secretary

22 of the Treasury at the market price.

23 ‘‘(3) AVAILABILITY OF INCOME.—Any interest

24 derived from obligations acquired by the Fund, and
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1 proceeds from any sale or redemption of such obliga2 tions, are hereby appropriated to the Fund.

3 ‘‘SEC. 2162. DEFINITIONS.

4 ‘‘For purposes of this subtitle:

5 ‘‘(1) The term ‘eligible child’ has the meaning

6 given such term in section 2151(b).

7 ‘‘(2) The term ‘federally-supplied’, with respect

8 to a pediatric vaccine, means that such vaccine is

9 purchased and delivered on behalf of a State under

10 section 2151(a).

11 ‘‘(3) The term ‘health care provider’, with re12 spect to the administration of vaccines to children,

13 means an entity that is licensed or otherwise author14 ized for such administration under the law of the

15 State in which the entity administers the vaccine,

16 subject to section 333(e).

17 ‘‘(4) The term ‘immunization’ means an immu18 nization against a vaccine-preventable disease.

19 ‘‘(5) Each of the terms ‘Indian’, ‘Indian tribe’,

20 and ‘tribal organization’ has the meaning given such

21 term in section 4 of the Indian Health Care

22 Improvement Act.

23 ‘‘(6) The term ‘Indian child’ means an Indian

24 who is 18 years of age or younger.
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1 ‘‘(7) The term ‘manufacturer’ means any cor2 poration, organization, or institution, whether public

3 or private (including Federal, State, and local de4 partments, agencies, and instrumentalities), which

5 manufactures, imports, processes, or distributes

6 under its label any pediatric vaccine. The term

7 ‘manufacture’ means to manufacture, import, proc8 ess, or distribute a vaccine.

9 ‘‘(8) The term ‘parent’, with respect to a child,

10 means a legal guardian of the child.

11 ‘‘(9) The term ‘participating State under sec12 tion 2151’ means a State that has submitted to the

13 Secretary an application in accordance with section

14 2157.

15 ‘‘(10) The term ‘pediatric vaccine’ means a vac16 cine included on the list established under section

17 2160(a).

18 ‘‘(11) The term ‘program-registered provider’

19 has the meaning given such term in 2153(a)(2).

20 ‘‘SEC. 2163. TERMINATION OF PROGRAM.

21 This part shall cease to be in effect beginning on such

22 date as may be prescribed in Federal law providing for

23 immunization services for all children as part of a broad24 based reform of the national health care system.
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1 ‘‘PART B—NATIONAL SYSTEM FOR MONITORING

2 IMMUNIZATION STATUS OF CHILDREN

3 ‘‘SEC. 2171. FORMULA GRANTS FOR STATE REGISTRIES

4 WITH RESPECT TO MONITORING.

5 ‘‘(a) IN GENERAL.—For the purpose described in

6 subsection (b), the Secretary, acting through the Director

7 of the Centers for Disease Control and Prevention, shall

8 make an allotment each fiscal year for each State in an

9 amount determined in accordance with section 2175. The

10 Secretary shall make a grant to the State of the allotment

11 made for the State for the fiscal year if the State submits

12 to the Secretary an application in accordance with section

13 2174.

14 ‘‘(b) AUTHORIZED ACTIVITIES.—The Secretary may

15 make a grant under subsection (a) only if the State agrees

16 to expend the grant for the purpose of—

17 ‘‘(1) collecting the data described in section

18 2172;

19 ‘‘(2) operating registries to maintain the data

20 (and establishing such registries, in the case of a

21 State that is not operating such a registry);

22 ‘‘(3) utilizing the data to monitor the extent to

23 which children have received immunizations in ac24 cordance with the schedule established under section

25 2160(b);
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1 ‘‘(4) notifying parents if children have not re2 ceived immunizations in accordance with such sched3 ule; and

4 ‘‘(5) such other activities as the Secretary may

5 authorize with respect to achieving the objectives es6 tablished by the Secretary for the year 2000 for the

7 immunization status of children in the United

8 States.

9 ‘‘(c) REQUIREMENT REGARDING STATE LAWS.—

10 ‘‘(1) IN GENERAL.—The Secretary may make a

11 grant under subsection (a) only if the State

12 involved—

13 ‘‘(A) provides assurances satisfactory to

14 the Secretary that, not later than October 1,

15 1996, the State will be operating a registry in

16 accordance with this part, including having in

17 effect such laws and regulations as may be nec18 essary to so operate such a registry; and

19 ‘‘(B) agrees that, prior to such date, the

20 State will make such efforts to operate a reg21 istry in accordance with this part as may be au22 thorized in the law and regulations of the State.

23 ‘‘(2) RULES OF CONSTRUCTION.—

24 ‘‘(A) With respect to the agreements made

25 by a State under this part, other than the
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1 agreement under paragraph (1)(B), the Sec2 retary may require compliance with the agree3 ments only to the extent consistent with such

4 paragraph.

5 ‘‘(B) This part does not authorize the Sec6 retary, as a condition of the receipt of a grant

7 under subsection (a) by a State, to prohibit the

8 State from providing any parent, upon the re9 quest of the parent, with an exemption from the

10 requirements established by the State pursuant

11 to this part for the collection of data regarding

12 any child of the parent.

13 ‘‘SEC. 2172. REGISTRY DATA.

14 ‘‘(a) IN GENERAL.—For purposes of section

15 2171(b)(1), the data described in this section are the data

16 described in subsection (b) and the data described in sub17 section (c). This section applies to data regarding a child

18 without regard to whether the child is an eligible child as

19 defined in section 2162.

20 ‘‘(b) DATA REGARDING BIRTH OF CHILD.—With re21 spect to the birth of a child, the data described in this

22 subsection is as follows:

23 ‘‘(1) The name of each child born in the State

24 involved on or after October 1, 1993.

25 ‘‘(2) Demographic data on the child.
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1 ‘‘(3) The name of one or both of the parents of

2 the child.

3 ‘‘(4) The address, as of the date of the birth of

4 the child, of each parent whose name is received in

5 the registry pursuant to paragraph (3).

6 ‘‘(c) DATA REGARDING INDIVIDUAL IMMUNIZA7 TIONS.—With respect to a child to whom a pediatric vac8 cine is administered in the State involved, the data de9 scribed in this subsection is as follows:

10 ‘‘(1) The name, age, and address of the child.

11 ‘‘(2) The date on which the vaccine was admin12 istered to the child.

13 ‘‘(3) The name and business address of the

14 health care provider that administered the vaccine.

15 ‘‘(4) The address of the facility at which the

16 vaccine was administered.

17 ‘‘(5) The name and address of one or both par18 ents of the child as of the date on which the vaccine

19 was administered, if such information is available to

20 the health care provider.

21 ‘‘(6) The type of vaccine.

22 ‘‘(7) The number or other information identify23 ing the particular manufacturing batch of the vac24 cine, if such information appears on the container or
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1 packaging for the vaccine or is otherwise readily ac2 cessible to the health care provider.

3 ‘‘(8) The dosage of vaccine that was adminis4 tered.

5 ‘‘(9) A description of any adverse medical reac6 tions that the child experienced in relation to the

7 vaccine and of which the health care provider is

8 aware.

9 ‘‘(10) Any other contraindications noted by the

10 health care provider with respect to administration

11 of the vaccine to the child.

12 ‘‘(11) Such other data regarding immunizations

13 for the child, including identifying data, as the Sec14 retary may require consistent with applicable law

15 (including social security account numbers furnished

16 pursuant to section 205(c)(2)(E) of the Social

17 Security Act).

18 ‘‘(d) DATE CERTAIN FOR SUBMISSION TO REG19 ISTRY.—The Secretary may make a grant under section

20 2171 only if the State involved agrees to ensure that, with

21 respect to a child—

22 ‘‘(1) the data described in subsection (b) are

23 submitted to the registry under such section not

24 later than 6 weeks after the date on which the child

25 is born; and
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1 ‘‘(2) the data described in subsection (c) with

2 respect to a vaccine are submitted to such registry

3 not later than 6 weeks after the date on which the

4 vaccine is administered to the child.

5 ‘‘SEC. 2173. GENERAL PROVISIONS.

6 ‘‘(a) FEDERAL STANDARDS ON CONFIDENTIALITY.—

7 The Secretary shall by regulation establish standards pro8 viding for maintaining the confidentiality of the identity

9 of individuals with respect to whom data are maintained

10 in registries under section 2171. Such standards shall,

11 with respect to a State, provide that the State is to have

12 in effect laws regarding such confidentiality, including ap13 propriate penalties for violation of the laws. The Secretary

14 may make a grant under such section only if the State

15 involved agrees to comply with the standards.

16 ‘‘(b) USE OF SOCIAL SECURITY ACCOUNT NUM17 BERS.—Any usage or disclosure of data in registries under

18 section 2171 that consists of social security account num19 bers and related information which is otherwise permitted

20 under this part may be exercised only to the extent per21 mitted under section 205(c)(2)(E) of the Social Security

22 Act. For purposes of the preceding sentence, the term ‘re23 lated information’ has the meaning given such term in

24 clause (iv)(II) of such section.
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1 ‘‘(c) UNIFORMITY IN METHODOLOGIES.—The Sec2 retary shall establish standards regarding the methodolo3 gies used in establishing and operating registries under

4 section 2171, and may make a grant under such section

5 only if the State agrees to comply with the standards. The

6 Secretary shall provide for a reasonable degree of uniform7 ity among the States in such methodologies for the pur8 pose of ensuring the utility, comparability, and exchange

9 of the data maintained in such registries.

10 ‘‘(d) COORDINATION AMONG STATES.—The Sec11 retary may make a grant under section 2171 to a State

12 only if, with respect to the operation of the registry of

13 the State under such section, the State agrees to cooperate

14 with the Secretary and with other States in carrying out

15 activities with respect to achieving the objectives estab16 lished by the Secretary for the year 2000 for the immuni17 zation status of children in the United States.

18 ‘‘(e) REPORTS TO SECRETARY.—The Secretary may

19 make a grant under section 2171 only if the State involved

20 agrees to submit to the Secretary such reports as the Sec21 retary determines to be appropriate with respect to the

22 activities of the State under this part.

23 ‘‘SEC. 2174. APPLICATION FOR GRANT.

24 ‘‘An application by a State for a grant under section

25 2171 is in accordance with this section if the application—
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1 ‘‘(1) is submitted not later than the date speci2 fied by the Secretary;

3 ‘‘(2) contains each agreement required in this

4 part;

5 ‘‘(3) contains any information required in this

6 part to be submitted to the Secretary; and

7 ‘‘(4) is in such form, is made in such manner,

8 and contains such agreements, assurances, and in9 formation as the Secretary determines to be nec10 essary to carry out this part.

11 ‘‘SEC. 2175. DETERMINATION OF AMOUNT OF ALLOTMENT.

12 ‘‘The Secretary shall determine the amount of the al13 lotments required in section 2171 for States for a fiscal

14 year in accordance with a formula established by the Sec15 retary that allots the amounts appropriated under section

16 2177 for the fiscal year on the basis of the costs of the

17 States in establishing and operating registries under sec18 tion 2171.

19 ‘‘SEC. 2176. DEFINITIONS.

20 ‘‘For purposes of this part, each of the terms ‘health

21 care provider, ‘pediatric vaccine’ and ‘parent’ has the

22 meaning given the term in section 2162.

23 ‘‘SEC. 2177. AUTHORIZATION OF APPROPRIATIONS.

24 ‘‘For the purpose of carrying out this part, there are

25 authorized to be appropriated $50,000,000, for fiscal year
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1 1994, $152,000,000 for fiscal year 1995, $125,000,000

2 for fiscal year 1996, and $35,000,000 for each of the fis3 cal years 1997 through 1999.

4 ‘‘PART C—FUNDING FOR OTHER PURPOSES REGARDING

5 CHILDHOOD IMMUNIZATIONS

6 ‘‘SEC. 2181. GRANTS REGARDING YEAR 2000 HEALTH OBJEC7 TIVES.

8 ‘‘(a) IN GENERAL.—The Secretary, acting through

9 the Director of the Centers for Disease Control and Pre10 vention, may make grants to States for the purpose of car11 rying out activities with respect to achieving the objectives

12 established by the Secretary for the year 2000 for the im13 munization status of children in the United States, other

14 than providing for the purchase and delivery on behalf of

15 the State of any pediatric vaccine (as defined in section

16 2162).

17 ‘‘(b) CERTAIN ACTIVITIES.—Subject to subsection

18 (a), the purposes for which a grant under such subsection

19 may be expended include the following:

20 ‘‘(1) Research into the prevention and control

21 of diseases that may be prevented through vaccina22 tion.

23 ‘‘(2) Demonstration projects for the prevention

24 and control of such diseases.
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1 ‘‘(3) Public information and education pro2 grams for the prevention and control of such dis3 eases.

4 ‘‘(4) Education, training, and clinical skills im5 provement activities in the prevention and control of

6 such diseases for health professionals (including al7 lied health personnel).

8 ‘‘(5) Such other activities as the Secretary de9 termines to be appropriate.

10 ‘‘(c) APPLICATION FOR GRANT.—The Secretary may

11 make a grant under subsection (a) only if an application

12 for the grant is submitted to the Secretary and the appli13 cation is in such form, is made in such manner, and con14 tains such agreements, assurances, and information as the

15 Secretary determines to be necessary to carry out this

16 section.

17 ‘‘(d) SUPPLIES AND SERVICES IN LIEU OF GRANT

18 FUNDS.— The Secretary, at the request of a recipient of

19 a grant under subsection (a), may reduce the amount of

20 such grant by—

21 ‘‘(1) the fair market value of any supplies or

22 equipment furnished the grant recipient, and

23 ‘‘(2) the amount of the pay, allowances, and

24 travel expenses of any officer or employee of the

25 Federal Government when detailed to the grant re-
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1 cipient and the amount of any other costs incurred

2 in connection with the detail of such officer or

3 employee.

4 When the furnishing of such supplies or equipment or the

5 detail of such an officer or employee is for the convenience

6 of and at the request of such grant recipient and for the

7 purpose of carrying out a program with respect to which

8 the grant under subsection (a) is made. The amount by

9 which any such grant is so reduced shall be available for

10 payment by the Secretary of the costs incurred in furnish11 ing the supplies or equipment, or in detailing the person12 nel, on which the reduction of such grant is based, and

13 such amount shall be deemed as part of the grant and

14 shall be deemed to have been paid to the grant recipient.

15 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—For the

16 purpose of carrying out this part, there are authorized to

17 be appropriated $580,000,000 for fiscal year 1993,

18 $680,000,000 for fiscal year 1994, and such sums as may

19 be necessary for each of the fiscal years 1995 through

20 1999.’’.

21 (b) AUTHORITY TO USE SOCIAL SECURITY ACCOUNT

22 NUMBERS.—Section 205(c)(2) of the Social Security Act

23 (42 U.S.C. 405(c)(2)) is amended—

24 (1) by redesignating subparagraphs (E) and

25 (F) as subparagraphs (F) and (G), respectively; and
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1 (2) by inserting after subparagraph (D) the fol2 lowing new subparagraph:

3 ‘‘(E)(i) The Secretary and each State receiving

4 grants under section 2171(a) of the Public Health Service

5 Act may utilize social security account numbers issued by

6 the Secretary under this subsection for purposes of—

7 ‘‘(I) operating registries under such section to

8 maintain information including such numbers (and

9 establishing such registries, in the case of a State

10 that is not operating such a registry),

11 ‘‘(II) utilizing such numbers to monitor the ex12 tent to which children have received immunizations

13 in accordance with the schedule established under

14 section 2160(b) of the Public Health Service Act,

15 and

16 ‘‘(III) notifying parents if children have not re17 ceived immunizations in accordance with such sched18 ule.

19 ‘‘(ii) Disclosure by individuals of social security ac20 count numbers may be required by a State for purposes

21 of identification of children in a registry operated pursu22 ant to a grant referred to in clause (i), except that such

23 disclosure may be required to be made only to persons spe24 cifically authorized in regulations of the Secretary pre25 scribed under part B of subtitle 3 of title XXI of the Pub-
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1 lic Health Service Act. The Secretary shall take such ac2 tions as are necessary to restrict access to information

3 consisting of such numbers and related information only

4 to such authorized persons whose duties or responsibilities

5 require access for the purposes described in clause (i). The

6 Secretary shall issue regulations governing the use, main7 tenance, and disclosure by any holder of such information,

8 including appropriate administrative, technical, and phys9 ical safeguards, to ensure that only such authorized per10 sons have access to such information. Any use or disclo11 sure of such information in violation of such regulations

12 shall be deemed a disclosure in violation of subparagraph

13 (C)(vii).

14 ‘‘(iii) The Secretary shall submit a report to the Com15 mittee on Ways and Means of the House of Representa16 tives and the Committee on Finance of the Senate not

17 later than January 1, 1996, and biennially thereafter, on

18 the operation of this subparagraph.

19 ‘‘(iv) For purposes of this subparagraph—

20 ‘‘(I) the term ‘State’ has the meaning provided

21 such term under section 2(f) of the Public Health

22 Service Act, and

23 ‘‘(II) the term ‘related information’ means any

24 record, list, or compilation which indicates, directly

25 or indirectly, the identity of any individual with re-
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1 spect to whom a social security account number is

2 maintained pursuant to this subparagraph and part

3 B of subtitle 3 of title XXI of the Public Health

4 Service Act.’’.

5 (c) RELATIONSHIP OF NEW PROGRAM OF IMMUNIZA6 TION GRANTS TO CURRENT PROGRAM.—

7 (1) STRIKING OF CURRENT PROGRAM.—Section

8 317 of the Public Health Service Act (42 U.S.C.

9 247b) is amended—

10 (A) in subsection (j)—

11 (i) by striking paragraph (1); and

12 (ii) by striking the remaining para13 graph designation; and

14 (B) in subsection (k)—

15 (i) by striking paragraph (1); and

16 (ii) by redesignating paragraphs (2)

17 through (5) as paragraphs (1) through (4),

18 respectively.

19 (2) TRANSITIONAL AUTHORITY UNDER NEW

20 PROGRAM.—With respect to activities that the Sec21 retary of Health and Human Services was author22 ized to carry out pursuant to section 317(j)(1) of

23 the Public Health Service Act (as in effect on the

24 day before the date of the enactment of this Act),

25 the Secretary may, for fiscal year 1994, carry out
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1 any such activity under section 2181 of the Public

2 Health Service Act (as added by subsection (a) of

3 this section), notwithstanding the provisions of such

4 section 2181. The authority established in the pre5 ceding sentence includes the authority to purchase

6 vaccines.

7 (d) CONTINUED COVERAGE OF COSTS OF A PEDI8 ATRIC VACCINE UNDER GROUP HEALTH PLANS.—

9 (1) REQUIREMENT.—The requirement of this

10 paragraph, with respect to a group health plan for

11 plan years beginning after the date of the enactment

12 of this Act, is that the group health plan not reduce

13 its coverage of the costs of pediatric vaccines (as de14 fined under section 2162 of the Public Health Serv15 ice Act) below the coverage it provided as of May 1,

16 1993.

17 (2) ENFORCEMENT.—

18 (A) For purposes of section 2207 of the

19 Public Health Service Act, the requirement of

20 paragraph (1) is deemed a requirement of title

21 XXII of such Act.

22 (B) For purposes of subsections (a)

23 through (e) of section 4980B of the Internal

24 Revenue Code of 1986, paragraph (1) is
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1 deemed a requirement of subsection (f) of such

2 section.

3 SEC. 5182. NATIONAL VACCINE INJURY COMPENSATION

4 PROGRAM AMENDMENTS.

5 (a) USE OF VACCINE INJURY COMPENSATION TRUST

6 FUND.—Section 6601(r) of the Omnibus Budget Rec7 onciliation Act of 1989 is amended by striking

8 ‘‘$2,500,000 for each of fiscal years 1991 and 1992’’ each

9 place it appears and inserting ‘‘$3,000,000 for fiscal year

10 1994 and each fiscal year thereafter’’ (in three places).

11 (b) AMENDMENT OF VACCINE INJURY TABLE.—Sec12 tion 2116(b) of the Public Health Service Act (42 U.S.C.

13 300aa–16(b)) is amended by striking ‘‘such person may

14 file’’ and inserting ‘‘or to significantly increase the likeli15 hood of obtaining compensation, such person may, not16 withstanding section 2111(b)(2), file’’.

17 (c) EXTENSION OF TIME FOR DECISION.—Section

18 2112(d)(3)(D) of such Act (42 U.S.C. 300aa–

19 12(d)(3)(D)) is amended by striking ‘‘540 days’’ and in20 serting ‘‘30 months (but for no more than 6 months at

21 a time)’’.

22 (d) SIMPLIFICATION OF VACCINE INFORMATION MA23 TERIALS.—

24 (1) Section 2126(b) of such Act (42 U.S.C.

25 300aa–26(b)) is amended—
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1 (A) by striking ‘‘by rule’’ in the matter

2 preceding paragraph (1);

3 (B) by striking, in paragraph (1), ‘‘, op4 portunity for a public hearing, and 90’’ and in5 serting ‘‘and 30’’; and

6 (C) by striking, in paragraph (2), ‘‘, appro7 priate health care providers and parent organi8 zations’’.

9 (2) Section 2126(c) of such Act (42 U.S.C.

10 300aa–26(c)) is amended—

11 (A) by inserting ‘‘shall be based on avail12 able data and information,’’ after ‘‘such mate13 rials’’ in the matter preceding paragraph (1),

14 and

15 (B) by striking paragraphs (1) through

16 (10) and inserting the following:

17 ‘‘(1) a concise description of the benefits of the

18 vaccine,

19 ‘‘(2) a concise description of the risks associ20 ated with the vaccine,

21 ‘‘(3) a statement of the availability of the Na22 tional Vaccine Injury Compensation Program, and

23 ‘‘(4) such other relevant information as may be

24 determined by the Secretary.’’.
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1 (3) Subsections (a) and (d) of section 2126 of

2 such Act (42 U.S.C. 300aa–26) are each amended

3 by inserting ‘‘or to any other individual’’ after ‘‘to

4 the legal representatives of any child’’.

5 (4) Subsection (d) of section 2126 of such Act

6 (42 U.S.C. 300aa–26) is amended—

7 (A) by striking all after ‘‘subsection (a),’’

8 the second place it appears in the first sentence

9 and inserting ‘‘supplemented with visual presen10 tations or oral explanations, in appropriate

11 cases.’’, and

12 (B) by striking ‘‘or other information’’ in

13 the last sentence.

14 SEC. 5183. MEDICAID IMMUNIZATION PROVISIONS.

15 (a) OUTREACH AND EDUCATION.—

16 (1) IMMUNIZATION OUTREACH THROUGH EPSDT

17 PROGRAM.—Section 1902(a)(43)(A) (42 U.S.C.

18 1396a(a)(43)(A)) is amended by inserting before the

19 comma at the end the following: ‘‘and the need for

20 age-appropriate immunizations against vaccine-pre21 ventable diseases’’.

22 (2) COORDINATION WITH MATERNAL AND

23 CHILD HEALTH BLOCK GRANT PROGRAMS AND WIC

24 PROGRAMS.—Section 1902(a)(11) (42 U.S.C.

25 1396a(a)(11)) is amended—
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1 (A) in clause (B)—

2 (i) by striking ‘‘effective July 1,

3 1969,’’,

4 (ii) by striking ‘‘and’’ before ‘‘(ii)’’,

5 and

6 (iii) by striking ‘‘to him under section

7 1903’’ and inserting ‘‘to the individual

8 under section 1903, and (iii) providing for

9 coordination of information and education

10 on childhood vaccinations and delivery of

11 immunization services’’; and

12 (B) in clause (C), by inserting ‘‘(including

13 the provision of information and education on

14 childhood vaccinations and the delivery of im15 munization services)’’ after ‘‘operations under

16 this title’’.

17 (3) COVERAGE OF PUBLIC HOUSING HEALTH

18 CENTERS AS FEDERALLY-QUALIFIED HEALTH CEN19 TERS.—Section 1905(l)(2)(B) (42 U.S.C.

20 1396d(l)(2)(B)) is amended by striking ‘‘or 340’’

21 each place it appears and inserting ‘‘340, or 340A’’.

22 (4) EFFECTIVE DATE.—(A) Except as provided

23 in subparagraph (B), the amendments made by this

24 subsection shall apply to calendar quarters beginning

25 on or after October 1, 1993, without regard to
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1 whether or not final regulations to carry out such

2 amendments have been promulgated by such date.

3 (B) In the case of a State plan for medical as4 sistance under title XIX of the Social Security Act

5 which the Secretary of Health and Human Services

6 determines requires State legislation (other than leg7 islation appropriating funds) in order for the plan to

8 meet the additional requirements imposed by the

9 amendments made by this subsection, the State plan

10 shall not be regarded as failing to comply with the

11 requirements of such title solely on the basis of its

12 failure to meet these additional requirements before

13 the first day of the first calendar quarter beginning

14 after the close of the first regular session of the

15 State legislature that begins after the date of the en16 actment of this Act. For purposes of the previous

17 sentence, in the case of a State that has a 2-year

18 legislative session, each year of such session shall be

19 deemed to be a separate regular session of the State

20 legislature.

21 (b) SCHEDULE OF IMMUNIZATIONS UNDER

22 EPSDT.—

23 (1) IN GENERAL.—Section 1905(r)(1) (42

24 U.S.C. 1396d(r)(1)) is amended—
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1 (A) in subparagraph (A)(i), by inserting

2 ‘‘and, with respect to immunizations under sub3 paragraph (B)(iii), in accordance with the

4 schedule recommended by the Secretary under

5 section 2160 of the Public Health Service Act’’

6 after ‘‘child health care’’; and

7 (B) in subparagraph (B)(iii), by inserting

8 ‘‘(according to the schedule recommended by

9 the Secretary under section 2160 of the Public

10 Health Service Act)’’ after ‘‘appropriate immu11 nizations’’.

12 (2) EFFECTIVE DATE.—The amendments made

13 by subparagraphs (A) and (B) of paragraph (1)

14 shall first apply 90 days after the date the Secretary

15 of Health and Human Services first issues the rec16 ommended schedule referred to in subparagraphs

17 (A)(i) and subparagraph (B)(iii) of section

18 1905(r)(1) of the Social Security Act (as amended

19 by such respective subparagraphs).

20 (c) ASSURING ADEQUATE PAYMENT RATES FOR AD21 MINISTRATION OF VACCINES TO CHILDREN.—

22 (1) PAYMENT RATES.—Section 1926(a)(4)(B)

23 (42 U.S.C. 1396r–7(a)(4)(B)) is amended by insert24 ing ‘‘(including the administration of vaccines)’’

25 after ‘‘means services’’.
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1 (2) EFFECTIVE DATE.—The amendment made

2 by paragraph (1) shall apply to the plan amendment

3 required to be submitted under section 1926(a)(2) of

4 the Social Security Act by not later than April 1,

5 1994.

6 (d) DENIAL OF FEDERAL FINANCIAL PARTICIPATION

7 FOR INAPPROPRIATE ADMINISTRATION OF SINGLE–ANTI8 GEN VACCINE.—

9 (1) IN GENERAL.—Section 1903(i) (42 U.S.C.

10 1396b(i)), as amended by sections 5174(b) and

11 5131(a), is amended—

12 (A) in paragraph (13), by striking ‘‘or’’ at

13 the end,

14 (B) in paragraph (14), by striking the pe15 riod at the end and inserting ‘‘; or’’, and

16 (C) by inserting after paragraph (14) the

17 following new paragraph:

18 ‘‘(15) with respect to any amount expended for

19 a single-antigen vaccine and its administration in

20 any case in which the administration of a combined21 antigen vaccine was medically appropriate (as deter22 mined by the Secretary).’’.

23 (2) EFFECTIVE DATE.—The amendments made

24 by paragraph (1) shall apply to amounts expended
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1 for vaccines administered on or after October 1,

2 1993.

3 (e) REQUIRING MEDICAID MANAGED CARE PLANS

4 TO COMPLY WITH IMMUNIZATION AND OTHER EPSDT

5 REQUIREMENTS.—

6 (1) IN GENERAL.—Section 1903(m) (42 U.S.C.

7 1396b(m)) is amended—

8 (A) in paragraph (2)(A), as amended by

9 subsections (a)(1) and (b)(1) of section 5135—

10 (i) by striking ‘‘and’’ at the end of

11 clause (xii),

12 (ii) by striking the period at the end

13 of clause (xiii) and inserting ‘‘; and’’, and

14 (iii) by adding at the end the follow15 ing new clause:

16 ‘‘(xiv) the entity complies with the requirements

17 of paragraph (7) (relating to EPSDT compliance).’’;

18 and

19 (B) by adding at the end the following new

20 paragraph:

21 ‘‘(7) The contract between the State and an entity

22 referred to in paragraph (2)(A)(iii) shall—

23 ‘‘(A) specify which early and periodic screening,

24 diagnostic, and treatment services are to be provided
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1 under the contract to individuals under age 21 en2 rolled with the entity;

3 ‘‘(B) in the case of such services which are not

4 to be so provided, specify the steps the entity will

5 take (through referrals or other arrangements) to

6 assure that such individuals will receive such serv7 ices; and

8 ‘‘(C) require the entity to submit such periodic

9 reports as may be necessary to enable the State to

10 prepare and submit timely reports under section

11 1902(a)(43)(D) and section 506(a)(2).’’.

12 (2) APPLICATION OF INTERMEDIATE SANC13 TIONS FOR FAILURE TO PROVIDE IMMUNIZA14 TIONS AND OTHER EPSDT SERVICES.—Section

15 1903(m)(5)(A) (42 U.S.C. 1396b(m)(5)(A)) is

16 amended—

17 (A) by striking ‘‘, or’’ at the end of clause

18 (iv) and inserting a semicolon,

19 (B) by striking the comma at the end of

20 clause (v) and inserting ‘‘; or’’, and

21 (C) by inserting after clause (v) the follow22 ing new clause:

23 ‘‘(vi) fails substantially to provide early and

24 periodic screening, diagnostic, and treatment serv-
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1 ices to the extent specified in the contract under

2 paragraph (7)(A);’’.

3 (3) EFFECTIVE DATE.—The amendments made

4 by this subsection shall apply to contract years be5 ginning on or after October 1, 1993, without regard

6 to whether or not final regulations to carry out such

7 amendments have been promulgated by such date.

8 (f) TRANSITION RULE.—

9 (1) MEDICAID USE OF CDC CONTRACT PRICE.—

10 The Secretary of Health and Human Services shall

11 not, on or after the date of the enactment of this

12 Act, enter into a contract for the purchase by the

13 Centers for Disease Control and Prevention of pedi14 atric vaccines for distribution (as provided for in

15 section 317 or section 2181 of the Public Health

16 Service Act) unless such contract provides that the

17 charge for such vaccines, for which medical assist18 ance is provided under a State plan under title XIX

19 of the Social Security Act, will not exceed the price

20 negotiated under the contract. The previous sentence

21 shall not apply, with respect to a vaccine for which

22 medical assistance is provided by a State, on and

23 after such date as the State becomes entitled to have

24 the Secretary provide for the purchase and delivery
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1 on behalf of the State of that vaccine under section

2 2151 of the Public Health Service Act.

3 (2) OPTIONAL USE BY STATES OF CDC CON4 TRACT PRICE.—Nothing in paragraph (1) shall be

5 construed as limiting the Federal financial participa6 tion available to States, under title XIX of the So7 cial Security Act, for the cost of a pediatric vaccine

8 to the contract price described in such paragraph for

9 the vaccine.

10 SEC. 5184. AVAILABILITY OF MEDICAID PAYMENTS FOR

11 CHILDHOOD VACCINE REPLACEMENT PRO12 GRAMS.

13 (a) IN GENERAL.—Section 1902(a)(32) (42 U.S.C.

14 1396a(a)(32)) is amended—

15 (1) by striking ‘‘and’’ at the end of subpara16 graph (B),

17 (2) by striking the period at the end of sub18 paragraph (C) and inserting ‘‘; and’’, and

19 (3) by adding at the end the following new sub20 paragraph:

21 ‘‘(D) in the case of payment for a child22 hood vaccine administered to individuals enti23 tled to medical assistance under the State plan,

24 the State plan may make payment directly to

25 the manufacturer of the vaccine under a vol-
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1 untary replacement program agreed to by the

2 State pursuant to which the manufacturer (i)

3 supplies doses of the vaccine to providers ad4 ministering the vaccine, (ii) periodically replaces

5 the supply of the vaccine, and (iii) charges the

6 State the manufacturer’s bid price to the Cen7 ters for Disease Control and Prevention for the

8 vaccine so administered plus a reasonable pre9 mium to cover shipping and the handling of re10 turns;’’.

11 (b) EFFECTIVE DATE.—The amendments made by

12 subsection (a) shall take effect on the date of the enact13 ment of this Act.

14 SEC. 5185. HEALTHY START FOR INFANTS.

15 (a) IN GENERAL.—Part D of title III of the Public

16 Health Service Act (42 U.S.C. 254b et seq.) is amended

17 by inserting after section 330 the following section:

18 ‘‘HEALTHY START FOR INFANTS

19 ‘‘SEC. 330A. (a) GRANTS FOR COMPREHENSIVE

20 SERVICES.—

21 ‘‘(1) IN GENERAL.—The Secretary may make

22 grants for the operation of not more than 21 dem23 onstration projects to provide the services described

24 in subsection (b) for the purpose of reducing, in the

25 geographic areas in which the projects are carried

26 out—
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1 ‘‘(A) the incidence of infant mortality and

2 morbidity;

3 ‘‘(B) the incidence of fetal deaths;

4 ‘‘(C) the incidence of maternal mortality;

5 ‘‘(D) the incidence of fetal alcohol syn6 drome; and

7 ‘‘(E) the incidence of low-birthweight

8 births.

9 ‘‘(2) ACHIEVEMENT OF YEAR 2000 HEALTH STA10 TUS OBJECTIVES.—With respect to the objectives es11 tablished by the Secretary for the health status of

12 the population of the United States for the year

13 2000, the Secretary shall, in providing for a dem14 onstration project under paragraph (1) in a geo15 graphic area, seek to meet the objectives that are

16 applicable to the purpose described in such para17 graph and the populations served by the project.

18 ‘‘(b) AUTHORIZED SERVICES.—

19 ‘‘(1) IN GENERAL.—Subject to subsection (h),

20 the services referred to in this subsection are com21 prehensive services (including preventive and pri22 mary health services for pregnant women and in23 fants and childhood immunizations in accordance

24 with the schedule recommended by the Secretary

25 under section 2160) for carrying out the purpose de-
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1 scribed in subsection (a), including services other

2 than health services.

3 ‘‘(2) CERTAIN PROVIDERS.—The Secretary may

4 make a grant under subsection (a) only if the appli5 cant involved agrees that, in making any arrange6 ments under which other entities provide authorized

7 services in the demonstration project involved, the

8 applicant will include among the entities with which

9 the arrangements are made grantees under any of

10 sections 329, 330, 340, and 340A, if such grantees

11 are providing services in the service area of such

12 project and the grantees are willing to make such

13 arrangements with the applicant.

14 ‘‘(c) ELIGIBLE GEOGRAPHIC AREAS.—The Secretary

15 may make a grant under subsection (a) only if—

16 ‘‘(1) the applicant for the grant specifies the

17 geographic area in which the demonstration project

18 under such subsection is to be carried out and

19 agrees that the project will not be carried out in

20 other areas; and

21 ‘‘(2) the rate of infant mortality in the geo22 graphic area equals or exceeds 150 percent of the

23 national average in the United States of such rates.

24 ‘‘(d) MINIMUM QUALIFICATIONS OF GRANTEES.—
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1 ‘‘(1) PUBLIC OR NONPROFIT PRIVATE ENTI2 TIES.—The Secretary may make a grant under sub3 section (a) only if the applicant for the grant is a

4 State or local department of health, or other public

5 or nonprofit private entity, or a consortium of public

6 or nonprofit private entities.

7 ‘‘(2) APPROVAL OF POLITICAL SUBDIVISIONS.—

8 With respect to a proposed demonstration project

9 under subsection (a), the Secretary may make a

10 grant under such subsection only if—

11 ‘‘(A) the chief executive officer of each po12 litical subdivision in the service area of such

13 project approves the applicant for the grant as

14 being qualified to carry out the project; and

15 ‘‘(B) the leadership of any Indian tribe or

16 tribal organization with jurisdiction over any

17 portion of such area so approves the applicant.

18 ‘‘(3) STATUS AS MEDICAID PROVIDER.—

19 ‘‘(A) In the case of any service described

20 in subsection (b) that is available pursuant to

21 the State plan approved under title XIX of the

22 Social Security Act for a State in which a dem23 onstration project under subsection (a) is car24 ried out, the Secretary may make a grant under
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1 such subsection for the project only if, subject

2 to subparagraph (B)—

3 ‘‘(i) the applicant for the grant will

4 provide the service directly, and the appli5 cant has entered into a participation agree6 ment under the State plan and is qualified

7 to receive payments under such plan; or

8 ‘‘(ii) the applicant will enter into an

9 agreement with a public or private entity

10 under which the entity will provide the

11 service, and the entity has entered into

12 such a participation agreement under the

13 State plan and is qualified to receive such

14 payments.

15 ‘‘(B)(i) In the case of an entity making an

16 agreement pursuant to subparagraph (A)(ii) re17 garding the provision of services, the require18 ment established in such subparagraph regard19 ing a participation agreement shall be waived

20 by the Secretary if the entity does not, in pro21 viding health care services, impose a charge or

22 accept reimbursement available from any third23 party payor, including reimbursement under

24 any insurance policy or under any Federal or

25 State health benefits plan.
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1 ‘‘(ii) A determination by the Secretary of

2 whether an entity referred to in clause (i) meets

3 the criteria for a waiver under such clause shall

4 be made without regard to whether the entity

5 accepts voluntary donations regarding the pro6 vision of services to the public.

7 ‘‘(e) STATE APPROVAL OF PROJECT.—With respect

8 to a proposed demonstration project under subsection (a),

9 the Secretary may make a grant under such subsection

10 to the applicant involved only if—

11 ‘‘(1) the chief executive officer of the State in

12 which the project is to be carried out approves the

13 proposal of the applicant for carrying out the

14 project; and

15 ‘‘(2) the leadership of any Indian tribe or tribal

16 organization with jurisdiction over any portion of the

17 service area of the project so approves the proposal.

18 ‘‘(f) ELIGIBILITY FOR SERVICES PROVIDED WITH

19 GRANT FUNDS.—

20 ‘‘(1) IN GENERAL.—With respect to any au21 thorized service under subsection (b), if the service

22 is a service that States are required or authorized to

23 provide under title XIX of the Social Security Act,

24 the Secretary may make a grant under subsection

25 (a) only if the applicant involved agrees that the
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1 grant will not be expended to provide the service to

2 any individual to whom States are required or au3 thorized under such title to provide the service. The

4 Secretary may not make a grant under subsection

5 (a) unless the State involved agrees that the grant

6 will not be expended to make payment for any item

7 or service to the extent that payment has been

8 made, or can reasonably be expected to be made,

9 with respect to such item or service—

10 ‘‘(A) under a health insurance policy or

11 plan (including a group health plan or a pre12 paid health plan),

13 ‘‘(B) under any Federal or State health

14 benefits program, including any program under

15 title V, XVIII, or XIX of the Social Security

16 Act, or

17 ‘‘(C) under subpart 2 of part B of title

18 XIX of this Act.

19 ‘‘(2) RULES OF CONSTRUCTION.—For purposes

20 of paragraph (1):

21 ‘‘(A) Individuals to whom States are au22 thorized to provide services under title XIX of

23 the Social Security Act include, pursuant to

24 section 1902(l) of such title, pregnant women,

25 infants, and children with an income level not
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1 less than 133 percent, and not more than 185

2 percent, of the official poverty line.

3 ‘‘(B) Authorized services under subsection

4 (b) that are authorized to be provided under

5 title XIX of such Act include, pursuant to sec6 tion 1920 of such title, ambulatory prenatal

7 services during a period of presumptive eligi8 bility.

9 ‘‘(C) Authorized services under subsection

10 (b) that are required to be provided under title

11 XIX of such Act include, pursuant to section

12 1905(a)(4)(B) of such title, early and periodic

13 screening, diagnostic, and treatment services for

14 children under the age of 21.

15 ‘‘(D) Authorized services under subsection

16 (b) that are authorized to be provided under

17 title XIX of such Act include, pursuant to sec18 tion 1905(a)(19) of such title, case-manage19 ment services.

20 ‘‘(g) MAINTENANCE OF EFFORT.—

21 ‘‘(1) GRANTEE.—With respect to authorized

22 services under subsection (b), the Secretary may

23 make a grant under subsection (a) only if the appli24 cant involved agrees to maintain expenditures of

25 non-Federal amounts for such services at a level
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1 that is not less than the level of such expenditures

2 maintained by the applicant for fiscal year 1991.

3 ‘‘(2) RELEVANT POLITICAL SUBDIVISIONS.—

4 With respect to authorized services under subsection

5 (b), the Secretary may make a grant under sub6 section (a) only if each political subdivision in the

7 service area of the demonstration project involved

8 agrees to maintain expenditures of non-Federal

9 amounts for such services at a level that is not less

10 than the level of such expenditures maintained by

11 the political subdivision for fiscal year 1991.

12 ‘‘(h) RESTRICTIONS ON EXPENDITURE OF GRANT.—

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graph (3), the Secretary may make a grant under

15 subsection (a) only if the applicant involved agrees

16 that the grant will not be expended—

17 ‘‘(A) to provide inpatient services, except

18 with respect to residential treatment for sub19 stance abuse provided in settings other than

20 hospitals;

21 ‘‘(B) to make cash payments to intended

22 recipients of health services or mental health

23 services; or

24 ‘‘(C) to purchase or improve real property

25 (other than minor remodeling of existing im-
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1 provements to real property) or to purchase

2 major medical equipment (other than mobile

3 medical units for providing ambulatory prenatal

4 services).

5 ‘‘(2) ADMINISTRATIVE EXPENSES; DATA COL6 LECTION.—The Secretary may make a grant under

7 subsection (a) only if the applicant involved agrees

8 that not more than an aggregate 10 percent of the

9 grant will be expended for administering the grant

10 and the collection and analysis of data.

11 ‘‘(3) WAIVER.—If the Secretary finds that the

12 purpose described in subsection (a) cannot otherwise

13 be carried out, the Secretary may, with respect to an

14 otherwise qualified applicant, waive the restriction

15 established in paragraph (1)(C).

16 ‘‘(i) DETERMINATION OF CAUSE OF INFANT

17 DEATHS.—The Secretary may make a grant under sub18 section (a) only if the applicant involved—

19 ‘‘(1) agrees to provide for a determination of

20 the cause of each infant death in the service area of

21 the demonstration project involved; and

22 ‘‘(2) the applicant has made such arrangements

23 with public entities as may be necessary to carry out

24 paragraph (1).
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1 ‘‘(j) ANNUAL REPORTS TO SECRETARY.—The Sec2 retary may make a grant under subsection (a) only if the

3 applicant involved agrees that, for each fiscal year for

4 which the applicant operates a demonstration project

5 under such subsection the applicant will, not later than

6 April 1 of the subsequent fiscal year, submit to the Sec7 retary a report providing the following information with

8 respect to the project:

9 ‘‘(1) The number of individuals that received

10 authorized services, and the demographic character11 istics of the population of such individuals.

12 ‘‘(2) The types of authorized services provided,

13 including the types of ambulatory prenatal services

14 provided and the trimester of the pregnancy in

15 which the services were provided.

16 ‘‘(3) The sources of payment for the authorized

17 services provided.

18 ‘‘(4) The extent to which children under age 2

19 receiving authorized services have received the ap20 propriate number and variety of immunizations

21 against vaccine-preventable diseases.

22 ‘‘(5) An analysis of the causes of death deter23 mined under subsection (i).
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1 ‘‘(6) The extent of progress being made toward

2 meeting the health status objectives specified in sub3 section (a)(2).

4 ‘‘(7) The extent to which, in the service area in5 volved, progress is being made toward meeting the

6 participation goals established for the State by the

7 Secretary under section 1905(r) of the Social Secu8 rity Act (relating to early periodic screening, diag9 nostic, and treatment services for children under the

10 age of 21).

11 ‘‘(k) COMMUNITY PARTICIPATION.—The Secretary

12 may make a grant under subsection (a) only if the appli13 cant involved agrees that, in preparing the proposal of the

14 applicant for the demonstration project involved, and in

15 the operation of the project, the applicant will consult with

16 the residents of the service area for the project and with

17 public and nonprofit private entities that provide author18 ized services to such residents.

19 ‘‘(l) APPLICATION FOR GRANT.—The Secretary may

20 make a grant under subsection (a) only if an application

21 for the grant is submitted to the Secretary and the appli22 cation is in such form, is made in such manner, and con23 tains such agreements, assurances, and information as the

24 Secretary determines to be necessary to carry out this sub25 section.
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1 ‘‘(m) REPORT TO CONGRESS.—Not later than Feb2 ruary 1, 1998, the Secretary shall submit to the Commit3 tee on Energy and Commerce of the House of Representa4 tives, and the Committee on Labor and Human Resources

5 of the Senate, a report—

6 ‘‘(1) summarizing the reports received by the

7 Secretary under subsection (j);

8 ‘‘(2) describing the extent to which demonstra9 tion projects under subsection (a) have been cost ef10 fective; and

11 ‘‘(3) describing the extent to which the Sec12 retary has, in the service areas of such projects,

13 been successful in meeting the health status objec14 tives specified in subsection (a)(2).

15 ‘‘(n) LIMITATION ON CERTAIN EXPENSES OF SEC16 RETARY.—Of the amounts appropriated under subsection

17 (o) for a fiscal year, the Secretary may not obligate more

18 than an aggregate 5 percent for the administrative costs

19 of the Secretary in carrying out this section, for the provi20 sion of technical assistance regarding demonstration

21 projects under subsection (a), and for evaluations of such

22 projects.

23 ‘‘(o) DEFINITIONS.—For purposes of this section:

24 ‘‘(1) The term ‘authorized services’ means the

25 services specified in subsection (b).
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1 ‘‘(2) The terms ‘Indian tribe’ and ‘tribal organi2 zation’ have the meaning given such terms in section

3 4(b) and section 4(c) of the Indian Self-Determina4 tion and Education Assistance Act.

5 ‘‘(3) The term ‘service area’, with respect to a

6 demonstration project under subsection (a), means

7 the geographic area specified in subsection (c).

8 ‘‘(p) AUTHORIZATION OF APPROPRIATIONS.—For the

9 purpose of carrying out this section, there are authorized

10 to be appropriated for each of the fiscal years 1994

11 through 1997 such sums as may be necessary.

12 ‘‘(q) SUNSET.—Effective October 1, 1997, this sec13 tion is repealed.’’.

14 (b) REPORT FOR FISCAL YEAR 1993.—With respect

15 to grants under section 330A of the Public Health Service

16 Act, as added by subsection (a) of this section, the Sec17 retary of Health and Human Services may make a grant

18 under such section for fiscal year 1994 only if the appli19 cant for the grant agrees to submit to the Secretary, not

20 later than April 1 of such year, a report on any federally21 supported project of the applicant that is substantially

22 similar to the demonstration projects authorized in such

23 section 330A, which report provides, to the extent prac24 ticable, the information described in subsection (j) of such

25 section.
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1 (c) SAVINGS PROVISION.—With respect to grants

2 under section 330A of the Public Health Service Act, as

3 added by subsection (a) of this section and in effect for

4 the fiscal years 1994 through 1997, such grants remain

5 available for obligation and expenditure in accordance with

6 the terms upon which the grants were made, notwith7 standing the repeal of such section 330A pursuant to sub8 section (q) of such section.

9 (d) USE OF GENERAL AUTHORITY UNDER PUBLIC

10 HEALTH SERVICE ACT.—With respect to the program es11 tablished in section 330A of the Public Health Service Act,

12 as added by subsection (a) of this section, section 301 of

13 the Public Health Service Act may not be construed as

14 providing to the Secretary of Health and Human Services

15 any authority to carry out, during any fiscal year in which

16 such program is in operation, any demonstration project

17 to provide any of the services specified in subsection (b)

18 of such section 330A.

19 SEC. 5186. INCREASE IN AUTHORIZATION OF APPROPRIA20 TIONS FOR THE MATERNAL AND CHILD

21 HEALTH SERVICES BLOCK GRANT PROGRAM.

22 Section 501(a) (42 U.S.C. 701(a)) is amended by

23 striking ‘‘$686,000,000 for fiscal year 1990’’ and insert24 ing ‘‘$705,000,000 for fiscal year 1994’’.
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1 SEC. 5187. MISCELLANEOUS TECHNICAL CORRECTIONS TO

2 PUBLIC HEALTH SERVICE ACT PROVISIONS.

3 (a) COMPENSATION FOR MEMBERS OF NATIONAL

4 ADVISORY COUNCIL ON NATIONAL HEALTH SERVICE

5 CORPS.—

6 (1) IN GENERAL.—Section 337(b)(2) of the Public

7 Health Service Act (42 U.S.C. 254j(b)(2)) is amended—

8 (A) by inserting after ‘‘so serving’’ the fol9 lowing: ‘‘compensation at a rate fixed by the

10 Secretary (but not to exceed’’, and

11 (B) by striking ‘‘Schedule;’’ and inserting

12 ‘‘Schedule);’’.

13 (2) EFFECTIVE DATE.—The amendments made

14 by paragraph (1) shall take effect on the date of the

15 enactment of this Act.

16 (b) LIABILITY PROTECTIONS FOR INDIVIDUALS PRO17 VIDING SERVICES AT CERTAIN CLINICS.—

18 (1) CLARIFICATION OF VOLUNTARY PARTICIPA19 TION BY CERTAIN ENTITIES.—(A) Section 224(g) of

20 the Public Health Service Act (42 U.S.C.

21 133(g)(1)), as added by section 2(a) of the Federally

22 Supported Health Centers Assistance Act of 1992, is

23 amended—

24 (i) in paragraph (4), by striking ‘‘An en25 tity’’ and inserting ‘‘Except as provided in

26 paragraph (6), an entity’’, and
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1 (ii) by adding at the end the following new

2 paragraph:

3 ‘‘(6) An entity may elect not to be treated as being

4 described in paragraph (4) if the entity establishes that

5 on a continuous basis since October 24, 1992, the entity

6 has been a participant in, and partial owner of, a nonprofit

7 risk retention group which offers malpractice and other

8 liability coverage to the entity.’’.

9 (B) Section 224(k)(2) of such Act (42 U.S.C.

10 233(k)(2)), as added by section 4 of the Federally

11 Supported Health Centers Assistance Act of 1992, is

12 amended by striking ‘‘entities receiving funds’’ and

13 all that follows through ‘‘subsection (g)’’ and insert14 ing the following: ‘‘entities described in subsection

15 (g)(4) and receiving funds under each of the grant

16 programs described in such subsection’’.

17 (2) CLARIFICATION OF COVERAGE OF OFFICERS

18 AND EMPLOYEES OF CLINICS.—The first sentence of

19 section 224(g)(1) of the Public Health Service Act

20 (42 U.S.C. 233(g)(1)) is amended by striking ‘‘offi21 cer, employee, or contractor’’ and inserting the fol22 lowing: ‘‘officer or employee of such an entity, and

23 any contractor’’.

24 (3) COVERAGE FOR SERVICES FURNISHED TO

25 INDIVIDUALS OTHER THAN PATIENTS OF CLINIC.—
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1 Section 224(g) of such Act (42 U.S.C. 233(g)(1)),

2 as amended by paragraph (1), is amended—

3 (A) in the first sentence of paragraph (1),

4 by inserting after ‘‘Service’’ the following: ‘‘with

5 respect to services provided to patients of the

6 entity and (subject to paragraph (7)) to certain

7 other individuals’’; and

8 (B) by adding at the end the following new

9 paragraph:

10 ‘‘(7) For purposes of paragraph (1), an officer, em11 ployee, or contractor described in such paragraph may be

12 deemed to be an employee of the Public Health Service

13 with respect to services provided to individuals who are

14 not patients of an entity described in paragraph (4) only

15 if the Secretary determines—

16 ‘‘(A) that the provision of the services to such

17 individuals is necessary to assure the treatment of

18 patients of such an entity; or

19 ‘‘(B) that such services are otherwise required

20 to be provided to such individuals under an employ21 ment contract (or other similar arrangement) be22 tween the individual and the entity.’’.

23 (4) DETERMINING COMPLIANCE OF ENTITY

24 WITH REQUIREMENTS FOR COVERAGE.—Section

25 224(h) of such Act (42 U.S.C. 233(h)), as added by
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1 section 2(b) of the Federally Supported Health Cen2 ters Assistance Act of 1992, is amended by striking

3 ‘‘the entity—’’ and inserting the following: ‘‘the Sec4 retary, after receiving such assurances and conduct5 ing such investigation as the Secretary considers

6 necessary, finds that the entity—’’.

7 (5) EFFECTIVE DATE.—The amendments made

8 by this subsection shall take effect as if included in

9 the enactment of the Federally Supported Health

10 Centers Assistance Act of 1992.

11 (c) ELIMINATION OF DUPLICATE WAIVER AUTHOR12 ITY FOR PARTICIPANTS IN NATIONAL HEALTH SERVICE

13 CORPS.—Section 338E(c) of the Public Health Service

14 Act (42 U.S.C. 254o(c)) is amended by striking paragraph

15 (3) and redesignating paragraph (4) as paragraph (3).

16 (d) CLARIFICATION OF PROHIBITION AGAINST RE17 SALE OF DRUGS UNDER DRUG REBATE AGREEMENTS.—

18 Section 340B(a)(5)(B) of the Public Health Service Act

19 (42 U.S.C. 256b(a)(5)(B)), as added by section 602(a) of

20 the Veterans Health Care of 1992, is amended by striking

21 ‘‘entity.’’ and inserting ‘‘covered entity.’’.

22 Subtitle C—Communications

23 Licensing Improvement

24 SEC. 5200. TABLE OF CONTENTS.

25 The table of contents is as follows:
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Subtitle C—Communications Licensing Improvement

Sec. 5200. Table of contents.

CHAPTER 1—COMPETITIVE BIDDING AUTHORITY

Sec. 5201. Short title.

Sec. 5202. Findings.

Sec. 5203. Authority to use competitive bidding.

Sec. 5204. Conforming amendments.

Sec. 5205. Regulatory parity.

Sec. 5206. Effective dates; deadlines for Commission action.

CHAPTER 2—EMERGING TELECOMMUNICATIONS TECHNOLOGIES

Sec. 5221. Short title.

Sec. 5222. Amendment to the National Telecommunications and Information

Administration Organization Act.

CHAPTER 3—COMMUNICATIONS TECHNICAL AMENDMENTS

Sec. 5241. Clerical corrections.

Sec. 5242. Transfer of provisions of law concerning public telecommunications

facilities, children’s educational television, and telecommunications demonstration program.

Sec. 5243. Elimination of expired and outdated provisions.

Sec. 5244. Stylistic consistency.

1 CHAPTER 1—COMPETITIVE BIDDING

2 AUTHORITY

3 SEC. 5201. SHORT TITLE.

4 This chapter may be cited as the ‘‘Licensing Improve5 ment Act of 1993’’.

6 SEC. 5202. FINDINGS.

7 The Congress finds that—

8 (1) current licensing procedures often delay de9 livery of services to the public and can result in the

10 unjust enrichment of applicants on the basis of the

11 value of the public airwaves;

12 (2) if licensees are engaged in reselling the use

13 of the public airwaves to subscribers for a fee, the
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1 licensee should pay reasonable compensation to the

2 public for those public resources;

3 (3) a carefully designed system to obtain com4 petitive bids from competing qualified applicants can

5 speed delivery of services, promote efficient and in6 tensive use of the electromagnetic spectrum, prevent

7 unjust enrichment, and produce revenues to com8 pensate the public for the use of the public airwaves;

9 and

10 (4) therefore, the Federal Communications

11 Commission should have the authority to differen12 tiate among multiple qualified applicants for a single

13 license using a system of competitive bids.

14 SEC. 5203. AUTHORITY TO USE COMPETITIVE BIDDING.

15 Section 309 of the Communications Act of 1934 (47

16 U.S.C. 309) is amended by adding at the end the following

17 new subsection:

18 ‘‘(j) USE OF COMPETITIVE BIDDING.—

19 ‘‘(1) GENERAL AUTHORITY.—If mutually exclu20 sive applications are filed for any initial license or

21 construction permit which will involve a use of the

22 electromagnetic spectrum described in paragraph

23 (2), then the Commission shall have the authority to

24 grant such license or permit to a qualified applicant
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1 through the use of a system of competitive bidding

2 that meets the requirements of this subsection.

3 ‘‘(2) USES TO WHICH BIDDING MAY APPLY.—A

4 use of the electromagnetic spectrum is described in

5 this paragraph if the Commission determines that—

6 ‘‘(A) the principal use of such spectrum

7 will involve, or is reasonably likely to involve,

8 the licensee receiving compensation from sub9 scribers in return—

10 ‘‘(i) for the licensee enabling those

11 subscribers to receive communications sig12 nals that are transmitted utilizing fre13 quencies on which the licensee is licensed

14 to operate; or

15 ‘‘(ii) for the licensee enabling those

16 subscribers to transmit directly commu17 nications signals utilizing frequencies on

18 which the licensee is licensed to operate;

19 and

20 ‘‘(B) a system of competitive bidding will

21 promote the objectives described in paragraph

22 (3).

23 ‘‘(3) DESIGN OF SYSTEMS OF COMPETITIVE

24 BIDDING.—For each license or permit, or class of

25 licenses or permits, that the Commission grants
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1 through the use of a competitive bidding system, the

2 Commission shall, by rule, establish a competitive

3 bidding methodology. The Commission shall seek to

4 design and test multiple alternative methodologies

5 under appropriate circumstances. In identifying li6 censes and permits to be issued by competitive bid7 ding, in specifying eligibility and other characteris8 tics of such licenses and permits, and in designing

9 the methodologies for use under this subsection, the

10 Commission shall seek to promote the purposes

11 specified in section 1 of this Act and the following

12 objectives:

13 ‘‘(A) the development and rapid deploy14 ment of new technologies, products, and serv15 ices for the benefit of the public, including

16 those residing in rural areas, without adminis17 trative or judicial delays;

18 ‘‘(B) promoting economic opportunity and

19 competition and ensuring that new and innova20 tive technologies are readily accessible to the

21 American people by avoiding excessive con22 centration of licenses and by disseminating li23 censes among a wide variety of applicants, in24 cluding small businesses and businesses owned

25 by members of minority groups and women;
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1 ‘‘(C) recovery for the public of a portion of

2 the value of the public spectrum resource made

3 available for commercial use and avoidance of

4 unjust enrichment through the methods em5 ployed to award uses of that resource; and

6 ‘‘(D) efficient and intensive use of the elec7 tromagnetic spectrum.

8 ‘‘(4) CONTENTS OF REGULATIONS.—In pre9 scribing rules pursuant to paragraph (3), the Com10 mission shall—

11 ‘‘(A) consider alternative payment sched12 ules and methods of calculation, including ini13 tial lump sums, installment or royalty pay14 ments, guaranteed annual minimum payments,

15 or other schedules or methods that promote the

16 objectives described in paragraph (3)(B), and

17 combinations of such schedules and methods;

18 ‘‘(B) include performance requirements,

19 such as appropriate deadlines and penalties for

20 performance failures, to ensure prompt delivery

21 of service to rural areas, to prevent stockpiling

22 or warehousing of spectrum by licensees or per23 mittees, and to promote investment in and

24 rapid deployment of new technologies and serv25 ices;
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1 ‘‘(C) consistent with the public interest,

2 convenience, and necessity, the purposes of this

3 Act, and the characteristics of the proposed

4 service, prescribe area designations and band5 width assignments that promote (i) an equitable

6 distribution of licenses and services among geo7 graphic areas, (ii) economic opportunity for a

8 wide variety of applicants, including small busi9 nesses and businesses owned by members of mi10 nority groups and women, and (iii) investment

11 in and rapid deployment of new technologies

12 and services; and

13 ‘‘(D) require such transfer disclosures and

14 antitrafficking restrictions and payment sched15 ules as may be necessary to prevent unjust en16 richment as a result of the methods employed

17 to issue licenses and permits.

18 ‘‘(5) BIDDER AND LICENSEE QUALIFICATION.—

19 No person shall be permitted to participate in a sys20 tem of competitive bidding pursuant to this sub21 section unless such bidder submits such information

22 and assurances as the Commission may require to

23 demonstrate that such bidder’s application is accept24 able for filing. No license shall be granted to an ap25 plicant selected pursuant to this subsection unless
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1 the Commission determines that the applicant is

2 qualified pursuant to subsection (a) and sections

3 308(b) and 310. Consistent with the objectives de4 scribed in paragraph (3), the Commission shall, by

5 rule, prescribe expedited procedures consistent with

6 the procedures authorized by subsection (i)(2) for

7 the resolution of any substantial and material issues

8 of fact concerning qualifications.

9 ‘‘(6) RULES OF CONSTRUCTION.—Nothing in

10 this subsection, or in the use of competitive bidding,

11 shall—

12 ‘‘(A) limit or otherwise affect the require13 ments of subsection (h) of this section, section

14 301, 304, 307, 310, or 706, or any other provi15 sion of this Act (other than subsections (d)(2)

16 and (e) of this section);

17 ‘‘(B) be construed to convey any rights, in18 cluding any expectation of renewal of a license,

19 that differ from the rights that apply to other

20 licenses within the same service that were not

21 issued pursuant to this subsection; or

22 ‘‘(C) be construed to prohibit the Commis23 sion from issuing nationwide licenses or per24 mits.
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1 ‘‘(7) LIMITATION OF EFFECT ON ALLOCATION

2 DECISIONS.—In making a decision pursuant to sec3 tion 303(c) to assign a band of frequencies to a use

4 for which licenses or permits will be issued pursuant

5 to this subsection, and in prescribing regulations

6 pursuant to paragraph (4)(A) and (4)(C) of this

7 subsection, the Commission may not base a finding

8 of public interest, convenience, and necessity solely

9 or predominantly on the expectation of Federal reve10 nues from the use of a system of competitive bidding

11 under this subsection.

12 ‘‘(8) TREATMENT OF REVENUES.—All proceeds

13 from the use of a competitive bidding system under

14 this subsection shall be deposited in the Treasury in

15 accordance with chapter 33 of title 31, United

16 States Code. A license or permit issued by the Com17 mission under this section shall not be treated as the

18 property of the licensee for tax purposes by any

19 State or local government entity.

20 ‘‘(9) TERMINATION; EVALUATION.—The author21 ity of the Commission to grant a license or permit

22 under this subsection shall expire September 30,

23 1998. Not later than September 30, 1997, the Com24 mission shall conduct a public inquiry and submit to

25 the Congress a report—
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1 ‘‘(A) describing the methodologies estab2 lished by the Commission pursuant to para3 graphs (3) and (4);

4 ‘‘(B) comparing the relative advantages

5 and disadvantages of such methodologies in

6 terms of attaining the objectives described in

7 such paragraphs;

8 ‘‘(C) evaluating the extent to which such

9 methodologies have secured prompt delivery of

10 service to rural areas; and

11 ‘‘(D) containing a statement of the reve12 nues obtained, and a projection of the future

13 revenues, from the use of competitive bidding

14 systems under this subsection.’’.

15 SEC. 5204. CONFORMING AMENDMENTS.

16 Section 309 of the Communications Act of 1934 is

17 further amended—

18 (1) by striking subsection (i)(1) and inserting

19 the following:

20 ‘‘(i) RANDOM SELECTION.—

21 ‘‘(1) GENERAL AUTHORITY.—If—

22 ‘‘(A) there is more than one application for

23 any initial license or construction permit which

24 will involve a use of the electromagnetic spec25 trum; and
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1 ‘‘(B) the Commission has determined that

2 the use is not described in subsection (j)(2)(A);

3 then the Commission shall have the authority to

4 grant such license or permit to a qualified applicant

5 through the use of a system of random selection.’’;

6 (2) in paragraph (2)—

7 (A) by indenting paragraph (2), including

8 subparagraphs (A) through (C), by an addi9 tional 2 em spaces; and

10 (B) by inserting ‘‘DETERMINATIONS OF

11 QUALIFICATIONS.—’’ after ‘‘(2)’’;

12 (3) in paragraph (3)—

13 (A) by indenting subparagraphs (A) and

14 (B), and so much of subparagraph (C) as pre15 cedes clause (i), by an additional 2 em spaces;

16 (B) by indenting clauses (i) and (ii) of sub17 paragraph (C) by an additional 4 em spaces;

18 and

19 (C) by inserting ‘‘PREFERENCES; DIVER20 SITY.—’’ after ‘‘(3)’’;

21 (4) in paragraph (4)—

22 (A) by indenting subparagraphs (A) and

23 (B) of such paragraph by an additional 2 em

24 spaces;
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1 (B) by inserting ‘‘RULEMAKING SCHEDULE

2 AND AUTHORITY.—’’ after ‘‘(4)’’; and

3 (C) by adding at the end the following new

4 subparagraph:

5 ‘‘(C) Not later than 180 days after the date of

6 enactment of this subparagraph, the Commission

7 shall prescribe such transfer disclosures and

8 antitrafficking restrictions and payment schedules as

9 are necessary to prevent the unjust enrichment of

10 recipients of licenses or permits as a result of the

11 methods employed to issue licenses under this sub12 section.’’.

13 SEC. 5205. REGULATORY PARITY.

14 (a) AMENDMENT.—Section 332 of the Communica15 tions Act of 1934 (47 U.S.C. 332) is amended—

16 (1) by striking ‘‘PRIVATE LAND’’ from the head17 ing of the section; and

18 (2) by amending striking subsection (c) and in19 serting the following:

20 ‘‘(c) REGULATORY TREATMENT OF MOBILE SERV21 ICES.—

22 ‘‘(1) COMMON CARRIER TREATMENT OF COM23 MERCIAL MOBILE SERVICES.—(A) A person engaged

24 in the provision of commercial mobile services shall,

25 insofar as such person is so engaged, be treated as
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1 a common carrier for purposes of this Act, except

2 for such provisions of title II as the Commission

3 may, consistent with the public interest, specify as

4 inapplicable by rule. In prescribing any such rule,

5 the Commission may not specify section 201, 202, or

6 208, or any other provision that the Commission de7 termines to be necessary in order to ensure that the

8 charges, practices, classifications, or regulations for

9 or in connection with commercial mobile services are

10 just and reasonable and are not unjustly or unrea11 sonably discriminatory or is otherwise in the public

12 interest.

13 ‘‘(B) Upon reasonable request of any person

14 providing commercial mobile service, the Commission

15 shall order a common carrier to establish physical

16 connections with such service pursuant to the provi17 sions of section 201 of this Act. Except to the extent

18 that the Commission is required to respond to such

19 a request, this subparagraph shall not be construed

20 as a limitation or expansion of the Commission’s au21 thority to order interconnection pursuant to this

22 Act.

23 ‘‘(2) NONCOMMON CARRIER TREATMENT OF

24 PRIVATE LAND MOBILE SERVICES.—A person en25 gaged in private land mobile service shall not, inso-
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1 far as such person is so engaged, be treated as a

2 common carrier for any purpose under this Act. A

3 common carrier (other than a person that was treat4 ed as provider of private land mobile services prior

5 to the enactment of the Licensing Improvement Act

6 of 1993) shall not provide any dispatch service on

7 any frequency allocated for common carrier service,

8 except to the extent such dispatch service is provided

9 on stations licensed in the domestic public land mo10 bile radio service before January 1, 1982. The Com11 mission may by regulation terminate, in whole or in

12 part, the prohibition contained in the preceding sen13 tence if the Commission determines that such termi14 nation will serve the public interest.

15 ‘‘(3) STATE AUTHORITY TO REGULATE.—(A)

16 Notwithstanding sections 2(b) and 221(b), no State

17 or local government shall have any authority to im18 pose any rate or entry regulation upon any commer19 cial mobile service or any private land mobile service,

20 except that this paragraph shall not prohibit a State

21 from regulating the other terms and conditions of

22 commercial mobile services.

23 ‘‘(B) Notwithstanding subparagraph (A), a

24 State may petition the Commission for authority to

25 regulate the rates for any commercial mobile service
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1 and the Commission shall grant such petition if such

2 State demonstrates that (i) such service is a sub3 stitute for land line telephone exchange service for a

4 substantial portion of the public within such State,

5 or (ii) market conditions with respect to such serv6 ices fail to protect subscribers adequately from un7 just and unreasonable rates or rates that are un8 justly or unreasonably discriminatory. The Commis9 sion shall provide reasonable opportunity for public

10 comment in response to such petition, and shall,

11 within 9 months after the date of its submission,

12 grant or deny such petition. If the Commission

13 grants such petition, the Commission shall authorize

14 the State to exercise under State law such authority

15 over rates, for such periods of time, as the Commis16 sion deems necessary to ensure that such rates are

17 just and reasonable and not unjustly or unreason18 ably discriminatory.

19 ‘‘(4) REGULATORY TREATMENT OF COMMU20 NICATIONS SATELLITE CORPORATION.—Nothing in

21 this subsection shall be construed to alter or affect

22 the regulatory treatment required by title IV of the

23 Communications Satellite of 1962 of the corporation

24 authorized by title III of such Act.

25 ‘‘(d) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) the term ‘commercial mobile service’

2 means all mobile services (as defined in section 3(n))

3 that—

4 ‘‘(A) are provided for profit (i) to the pub5 lic, (ii) on an indiscriminate basis, or (iii) to

6 such broad classes of eligible users as to be ef7 fectively available to a substantial portion of the

8 public; and

9 ‘‘(B) are interconnected (or have requested

10 interconnection pursuant to paragraph (1)(B))

11 with the public switched network (as such terms

12 are defined by regulation by the Commission);

13 and

14 ‘‘(2) the term ‘private mobile service’ means

15 any mobile service (as defined in section 3(n)) that

16 is not a commercial mobile service.’’.

17 (b) CONFORMING AMENDMENTS.—

18 (1) AMENDMENTS TO DEFINITIONS.—Section 3

19 of the Communications Act of 1934 (47 U.S.C. 153)

20 is amended—

21 (A) in subsection (n)—

22 (i) by inserting ‘‘(1)’’ after ‘‘and in23 cludes’’; and

24 (ii) by inserting before the period at

25 the end the following: ‘‘, (2) a mobile serv-
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1 ice which provides a regularly interacting

2 group of base, mobile, portable, and associ3 ated control and relay stations (whether li4 censed on an individual, cooperative, or

5 multiple basis) for private one-way or two6 way land mobile radio communications by

7 eligible users over designated areas of op8 eration, and (3) any service for which a li9 cense is required in a personal communica10 tions service established pursuant to the

11 proceeding entitled ‘Amendment of the

12 Commission’s Rules to Establish New Per13 sonal Communications Services’ (GEN

14 Docket No. 90–314; ET Docket No. 92–

15 100), or any successor proceeding’’; and

16 (B) by striking subsection (gg).

17 (2) CONFORMING AMENDMENTS TO SECTION

18 332.—Section 332 of such Act is further amended—

19 (A) in subsection (a), by inserting after

20 ‘‘(a)’’ the following: ‘‘MANAGEMENT OF PRI21 VATE LAND MOBILE FREQUENCIES.—’’;

22 (B) in subsection (b)—

23 (i) by indenting the margin of para24 graphs (2) through (4) by 2 em spaces;
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1 (ii) by striking ‘‘(b)(1)’’ and inserting

2 the following:

3 ‘‘(b) USE OF ADVISORY COMMITTEE.—

4 ‘‘(1) COORDINATION OF FREQUENCY ASSIGN5 MENT.—’’;

6 (iii) by inserting ‘‘EXEMPTION.—’’

7 after ‘‘(2)’’;

8 (iv) by inserting ‘‘NONEMPLOYEE

9 STATUS.—’’ after ‘‘(3)’’; and

10 (v) by inserting ‘‘APPLICATION OF

11 FEDERAL ADVISORY COMMITTEE ACT.—’’

12 after ‘‘(4).

13 SEC. 5206. EFFECTIVE DATES; DEADLINES FOR COMMIS14 SION ACTION.

15 (a) EFFECTIVE DATES.—

16 (1) IN GENERAL.—Except as provided in para17 graph (2), the amendments made by this chapter are

18 effective on the date of enactment of this Act.

19 (2) EFFECTIVE DATE OF MOBILE SERVICE

20 AMENDMENTS.—The amendments made by section

21 5205 shall be effective 1 year after such date of en22 actment, except that any person that provides pri23 vate land mobile services before such date of enact24 ment shall continue to be treated as a provider of
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1 private land mobile service until 3 years after such

2 date of enactment.

3 (b) DEADLINES FOR COMMISSION ACTION.—

4 (1) GENERAL RULEMAKING.—The Federal

5 Communications Commission shall prescribe rules to

6 implement section 309(j) of the Communications Act

7 of 1934 (as added by this chapter) within 210 days

8 after the date of enactment of this Act.

9 (2) PCS ORDERS AND LICENSING.—The Com10 mission shall—

11 (A) within 180 days after such date of en12 actment, issue a final report and order (i) in

13 the matter entitled ‘‘Redevelopment of Spec14 trum to Encourage Innovation in the Use of

15 New Telecommunications Technologies’’ (ET

16 Docket No. 92–9); and (ii) in the matter enti17 tled ‘‘Amendment of the Commission’s Rules to

18 Establish New Personal Communications Serv19 ices’’ (GEN Docket No. 90–314; ET Docket

20 No. 92–100); and

21 (B) within 270 days after such date of en22 actment, commence issuing licenses and permits

23 in the personal communications service.

24 (3) MOBILE SERVICE RULEMAKING RE25 QUIRED.—Within 1 year after the date of enactment
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1 of this Act, the Federal Communications Commis2 sion shall—

3 (A) issue such modifications or termi4 nations of its regulations concerning private

5 land mobile services as are necessary to imple6 ment the amendments made by section 5205;

7 (B) make such other modifications of such

8 regulations as may be necessary to equalize the

9 regulatory treatment of providers of all com10 mercial mobile services that offer services that

11 are substantially similar; and

12 (C) include in such modifications and ter13 minations such provisions as are necessary to

14 provide for an orderly transition to the regu15 latory treatment required by such amendments.

16 (c) SPECIAL RULE.—The Federal Communications

17 Commission shall not issue any license or permit pursuant

18 to section 309(i) of the Communications Act of 1934 after

19 the date of enactment of this Act unless the Commission

20 has made the determination required by paragraph (1)(B)

21 of such section (as added by this chapter).
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1 CHAPTER 2—EMERGING

2 TELECOMMUNICATIONS TECHNOLOGIES

3 SEC. 5221. SHORT TITLE.

4 This chapter may be cited as the ‘‘Emerging Tele5 communications Technologies Act of 1993’’.

6 SEC. 5222. AMENDMENT TO THE NATIONAL TELECOMMUNI7 CATIONS AND INFORMATION ADMINISTRA8 TION ORGANIZATION ACT.

9 The National Telecommunications and Information

10 Administration Organization Act is amended—

11 (1) by striking the heading of part B and in12 serting the following:

13 ‘‘PART D—SPECIAL AND TEMPORARY

14 PROVISIONS’’;

15 (2) by redesignating sections 131 through 135

16 as sections 151 through 155, respectively; and

17 (3) by inserting after part A the following new

18 part:

19 ‘‘PART B—EMERGING TELECOMMUNICATIONS

20 TECHNOLOGIES

21 ‘‘SEC. 111. FINDINGS.

22 ‘‘The Congress finds that—

23 ‘‘(1) the Federal Government currently reserves

24 for its own use, or has priority of access to, approxi25 mately 40 percent of the electromagnetic spectrum
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1 that is assigned for use pursuant to the Communica2 tions Act of 1934;

3 ‘‘(2) many of such frequencies are underutilized

4 by Federal Government licensees;

5 ‘‘(3) the public interest requires that many of

6 such frequencies be utilized more efficiently by Fed7 eral Government and non-Federal licensees;

8 ‘‘(4) additional frequencies are assigned for

9 services that could be obtained more efficiently from

10 commercial carriers or other vendors;

11 ‘‘(5) scarcity of assignable frequencies for li12 censing by the Commission can and will—

13 ‘‘(A) impede the development and commer14 cialization of new telecommunications products

15 and services;

16 ‘‘(B) limit the capacity and efficiency of

17 the United States telecommunications systems;

18 ‘‘(C) prevent some State and local police,

19 fire, and emergency services from obtaining

20 urgently needed radio channels; and

21 ‘‘(D) adversely affect the productive capac22 ity and international competitiveness of the

23 United States economy;

24 ‘‘(6) a reassignment of these frequencies can

25 produce significant economic returns; and
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1 ‘‘(7) the Secretary of Commerce, the President,

2 and the Federal Communications Commission should

3 be directed to take appropriate steps to correct these

4 deficiencies.

5 ‘‘SEC. 112. NATIONAL SPECTRUM PLANNING.

6 ‘‘(a) PLANNING ACTIVITIES.—The Assistant Sec7 retary and the Chairman of the Commission shall meet,

8 at least biannually, to conduct joint spectrum planning

9 with respect to the following issues—

10 ‘‘(1) the future spectrum requirements for pub11 lic and private uses, including State and local gov12 ernment public safety agencies;

13 ‘‘(2) the spectrum allocation actions necessary

14 to accommodate those uses; and

15 ‘‘(3) actions necessary to promote the efficient

16 use of the spectrum, including spectrum manage17 ment techniques to promote increased shared use of

18 the spectrum that does not cause harmful inter19 ference as a means of increasing commercial access.

20 ‘‘(b) REPORTS.—The Assistant Secretary and the

21 Chairman of the Commission shall submit a joint annual

22 report to the Committee on Energy and Commerce of the

23 House of Representatives, the Committee on Commerce,

24 Science, and Transportation of the Senate, the Secretary,

25 and the Commission on the joint spectrum planning activi-
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1 ties conducted under subsection (a) and recommendations

2 for action developed pursuant to such activities.

3 ‘‘(c) REPORTING REQUIREMENTS.—The first annual

4 report submitted after the date of the report by the advi5 sory committee under section 113(d)(4) shall—

6 ‘‘(1) include an analysis of and response to that

7 committee report; and

8 ‘‘(2) include an analysis of the effect on spec9 trum efficiency and the cost of equipment to Federal

10 spectrum users of maintaining separate allocations

11 for Federal Government and non-Federal Govern12 ment licensees for the same or similar services.

13 ‘‘SEC. 113. IDENTIFICATION OF REALLOCABLE FRE14 QUENCIES.

15 ‘‘(a) IDENTIFICATION REQUIRED.—The Secretary

16 shall, within 24 months after the date of the enactment

17 of this part, prepare and submit to the President and the

18 Congress a report identifying bands of frequencies that—

19 ‘‘(1) are allocated on a primary basis for Fed20 eral Government use and eligible for licensing pursu21 ant to section 305(a) of the Act (47 U.S.C. 305(a));

22 ‘‘(2) are not required for the present or identifi23 able future needs of the Federal Government;

24 ‘‘(3) can feasibly be made available, as of the

25 date of submission of the report or at any time dur-
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1 ing the next 15 years, for use under the Act (other

2 than for Federal Government stations under such

3 section 305);

4 ‘‘(4) will not result in costs to the Federal Gov5 ernment, or losses of services or benefits to the pub6 lic, that are excessive in relation to the benefits that

7 may be obtained by non-Federal licensees; and

8 ‘‘(5) are most likely to have the greatest poten9 tial for productive uses and public benefits under the

10 Act.

11 ‘‘(b) MINIMUM AMOUNT OF SPECTRUM REC12 OMMENDED.—

13 ‘‘(1) IN GENERAL.—Based on the report re14 quired by subsection (a), the Secretary shall rec15 ommend for reallocation, for use other than by Fed16 eral Government stations under section 305 of the

17 Act (47 U.S.C. 305), bands of frequencies that span

18 a total of not less than 200 megahertz, that are lo19 cated below 6 gigahertz, and that meet the criteria

20 specified in paragraphs (1) through (4) of subsection

21 (a). The Secretary may not include, in such 200

22 megahertz, bands of frequencies that span more

23 than 20 megahertz and that are located between 5

24 and 6 gigahertz. If the report identifies (as meeting

25 such criteria) bands of frequencies spanning more
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1 than 200 megahertz, the report shall identify and

2 recommend for reallocation those bands (spanning

3 not less than 200 megahertz) that meet the criteria

4 specified in paragraph (5) of such subsection.

5 ‘‘(2) MIXED USES PERMITTED TO BE COUNT6 ED.—Bands of frequencies which the Secretary’s re7 port recommends be partially retained for use by

8 Federal Government stations, but which are also

9 recommended to be reallocated to be made available

10 under the Act for use by non-Federal stations, may

11 be counted toward the minimum spectrum required

12 by paragraph (1) of this subsection, except that—

13 ‘‘(A) the bands of frequencies counted

14 under this paragraph may not count toward

15 more than one-half of the minimum required by

16 paragraph (1) of this subsection;

17 ‘‘(B) a band of frequencies may not be

18 counted under this paragraph unless the assign19 ments of the band to Federal Government sta20 tions under section 305 of the Act (47 U.S.C.

21 305) are limited by geographic area, by time, or

22 by other means so as to guarantee that the po23 tential use to be made by such Federal Govern24 ment stations is substantially less (as measured

25 by geographic area, time, or otherwise) than the
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1 potential use to be made by non-Federal

2 stations; and

3 ‘‘(C) the operational sharing permitted

4 under this paragraph shall be subject to coordi5 nation procedures which the Commission shall

6 establish and implement to ensure against

7 harmful interference.

8 ‘‘(c) CRITERIA FOR IDENTIFICATION.—

9 ‘‘(1) NEEDS OF THE FEDERAL GOVERNMENT.—

10 In determining whether a band of frequencies meets

11 the criteria specified in subsection (a)(2), the Sec12 retary shall—

13 ‘‘(A) consider whether the band of fre14 quencies is used to provide a communications

15 service that is or could be available from a com16 mercial carrier or other vendor;

17 ‘‘(B) seek to promote—

18 ‘‘(i) the maximum practicable reliance

19 on commercially available substitutes;

20 ‘‘(ii) the sharing of frequencies (as

21 permitted under subsection (b)(2));

22 ‘‘(iii) the development and use of new

23 communications technologies; and

24 ‘‘(iv) the use of nonradiating commu25 nications systems where practicable; and
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1 ‘‘(C) seek to avoid—

2 ‘‘(i) serious degradation of Federal

3 Government services and operations; and

4 ‘‘(ii) excessive costs to the Federal

5 Government and users of Federal Govern6 ment services.

7 ‘‘(2) FEASIBILITY OF USE.—In determining

8 whether a frequency band meets the criteria speci9 fied in subsection (a)(3), the Secretary shall—

10 ‘‘(A) assume such frequencies will be as11 signed by the Commission under section 303 of

12 the Act (47 U.S.C. 303) over the course of not

13 less than 15 years;

14 ‘‘(B) assume reasonable rates of scientific

15 progress and growth of demand for tele16 communications services;

17 ‘‘(C) determine the extent to which the

18 reallocation or reassignment will relieve actual

19 or potential scarcity of frequencies available for

20 licensing by the Commission for non-Federal

21 use;

22 ‘‘(D) seek to include frequencies which can

23 be used to stimulate the development of new

24 technologies; and
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1 ‘‘(E) consider the immediate and recurring

2 costs to reestablish services displaced by the

3 reallocation of spectrum.

4 ‘‘(3) ANALYSIS OF BENEFITS.—In determining

5 whether a band of frequencies meets the criteria

6 specified in subsection (a)(4), the Secretary shall

7 consider—

8 ‘‘(A) the extent to which equipment is or

9 will be available that is capable of utilizing the

10 band;

11 ‘‘(B) the proximity of frequencies that are

12 already assigned for commercial or other non13 Federal use; and

14 ‘‘(C) the activities of foreign governments

15 in making frequencies available for experimen16 tation or commercial assignments in order to

17 support their domestic manufacturers of equip18 ment.

19 ‘‘(4) POWER AGENCY FREQUENCIES.—

20 ‘‘(A) ELIGIBLE FOR MIXED USE ONLY.—

21 The frequencies assigned to any Federal power

22 agency may only be eligible for mixed use under

23 subsection (b)(2) in geographically separate

24 areas and shall not be recommended for the

25 purposes of withdrawing that assignment. In
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1 any case where a frequency is to be shared by

2 an affected Federal power agency and a non3 Federal user, such use by the non-Federal user

4 shall, consistent with the procedures established

5 under subsection (b)(2)(C), not cause harmful

6 interference to the affected Federal power agen7 cy or adversely affect the reliability of its power

8 system.

9 ‘‘(B) DEFINITION.—As used in this para10 graph, the term ‘Federal power agency’ means

11 the Tennessee Valley Authority, the Bonneville

12 Power Administration, the Western Area Power

13 Administration, or the Southwestern Power

14 Administration.

15 ‘‘(d) PROCEDURE FOR IDENTIFICATION OF

16 REALLOCABLE BANDS OF FREQUENCIES.—

17 ‘‘(1) SUBMISSION OF PRELIMINARY IDENTIFICA18 TION TO CONGRESS.—Within 12 months after the

19 date of the enactment of this part, the Secretary

20 shall prepare and submit to the Congress a report

21 which makes a preliminary identification of

22 reallocable bands of frequencies which meet the cri23 teria established by this section.

24 ‘‘(2) CONVENING OF ADVISORY COMMITTEE.—

25 Not later than the date the Secretary submits the
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1 report required by paragraph (1), the Secretary shall

2 convene an advisory committee to—

3 ‘‘(A) review the bands of frequencies iden4 tified in such report;

5 ‘‘(B) advise the Secretary with respect to

6 (i) the bands of frequencies which should be in7 cluded in the final report required by subsection

8 (a), and (ii) the effective dates which should be

9 established under subsection (e) with respect to

10 such frequencies;

11 ‘‘(C) receive public comment on the Sec12 retary’s report and on the final report; and

13 ‘‘(D) prepare and submit the report re14 quired by paragraph (4).

15 The advisory committee shall meet at least monthly

16 until each of the actions required by section 114(a)

17 have taken place.

18 ‘‘(3) COMPOSITION OF COMMITTEE; CHAIR19 MAN.—The advisory committee shall include—

20 ‘‘(A) the Chairman of the Commission and

21 the Assistant Secretary, and one other rep22 resentative of the Federal Government as des23 ignated by the Secretary; and

24 ‘‘(B) representatives of—
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1 ‘‘(i) United States manufacturers of

2 spectrum-dependent telecommunications

3 equipment;

4 ‘‘(ii) commercial carriers;

5 ‘‘(iii) other users of the electro6 magnetic spectrum, including radio and

7 television broadcast licensees, State and

8 local public safety agencies, and the avia9 tion industry; and

10 ‘‘(iv) other interested members of the

11 public who are knowledgeable about the

12 uses of the electromagnetic spectrum.

13 A majority of the members of the committee shall be

14 members described in subparagraph (B), and one of

15 such members shall be designated as chairman by

16 the Secretary.

17 ‘‘(4) RECOMMENDATIONS ON SPECTRUM ALLO18 CATION PROCEDURES.—The advisory committee

19 shall, not later than 36 months after the date of the

20 enactment of this part, submit to the Secretary, the

21 Commission, the Committee on Energy and Com22 merce of the House of Representatives, and the

23 Committee on Commerce, Science, and Transpor24 tation of the Senate, a report containing such rec25 ommendations as the advisory committee considers
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1 appropriate for the reform of the process of allocat2 ing the electromagnetic spectrum between Federal

3 and non-Federal use, and any dissenting views

4 thereon.

5 ‘‘(e) TIMETABLE FOR REALLOCATION AND LIMITA6 TION.—

7 ‘‘(1) TIMETABLE REQUIRED.—The Secretary

8 shall, as part of the report required by subsection

9 (a), include a timetable that recommends immediate

10 and delayed effective dates by which the President

11 shall withdraw or limit assignments on the fre12 quencies specified in the report.

13 ‘‘(2) EXPEDITED REALLOCATION OF INITIAL 30

14 MHZ PERMITTED.—The Secretary may prepare and

15 submit to the President a report which specifically

16 identifies an initial 30 megahertz of spectrum that

17 meets the criteria described in subsection (a) and

18 that can be made available for reallocation imme19 diately upon issuance of the report required by this

20 section.

21 ‘‘(3) DELAYED EFFECTIVE DATE.—The rec22 ommended delayed effective dates shall—

23 ‘‘(A) permit the earliest possible

24 reallocation of the frequency bands, taking into

25 account the requirements of section 115(1);
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1 ‘‘(B) be based on the useful remaining life

2 of equipment that has been purchased or con3 tracted for to operate on identified frequencies;

4 ‘‘(C) be based on the need to coordinate

5 frequency use with other nations; and

6 ‘‘(D) take into account the relationship be7 tween the costs to the Federal Government of

8 changing to different frequencies and the bene9 fits that may be obtained from commercial and

10 other non-Federal uses of the reassigned fre11 quencies.

12 ‘‘SEC. 114. WITHDRAWAL OF ASSIGNMENT TO FEDERAL

13 GOVERNMENT STATIONS.

14 ‘‘(a) IN GENERAL.—The President shall—

15 ‘‘(1) within 6 months after receipt of the Sec16 retary’s report under section 113(a), withdraw the

17 assignment to a Federal Government station of any

18 frequency which the report recommends for imme19 diate reallocation;

20 ‘‘(2) within such 6-month period, limit the as21 signment to a Federal Government station of any

22 frequency which the report recommends be made im23 mediately available for mixed use under section

24 113(b)(2);
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1 ‘‘(3) by the delayed effective date recommended

2 by the Secretary under section 113(e) (except as

3 provided in subsection (b)(4) of this section), with4 draw or limit the assignment to a Federal Govern5 ment station of any frequency which the report rec6 ommends be reallocated or made available for mixed

7 use on such delayed effective date;

8 ‘‘(4) assign or reassign other frequencies to

9 Federal Government stations as necessary to adjust

10 to such withdrawal or limitation of assignments; and

11 ‘‘(5) transmit a notice and description to the

12 Commission and each House of Congress of the

13 actions taken under this subsection.

14 ‘‘(b) EXCEPTIONS.—

15 ‘‘(1) AUTHORITY TO SUBSTITUTE.—If the

16 President determines that a circumstance described

17 in paragraph (2) exists, the President—

18 ‘‘(A) may substitute an alternative fre19 quency or band of frequencies for the frequency

20 or band that is subject to such determination

21 and withdraw (or limit) the assignment of that

22 alternative frequency or band in the manner re23 quired by subsection (a); and

24 ‘‘(B) shall submit a statement of the rea25 sons for taking the action described in subpara-
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1 graph (A) to the Committee on Energy and

2 Commerce of the House of Representatives and

3 the Committee on Commerce, Science, and

4 Transportation of the Senate.

5 ‘‘(2) GROUNDS FOR SUBSTITUTION.—For pur6 poses of paragraph (1), the following circumstances

7 are described in this paragraph:

8 ‘‘(A) the reassignment would seriously

9 jeopardize the national defense interests of the

10 United States;

11 ‘‘(B) the frequency proposed for reassign12 ment is uniquely suited to meeting important

13 governmental needs;

14 ‘‘(C) the reassignment would seriously

15 jeopardize public health or safety; or

16 ‘‘(D) the reassignment will result in costs

17 to the Federal Government that are excessive in

18 relation to the benefits that may be obtained

19 from commercial or other non-Federal uses of

20 the reassigned frequency.

21 ‘‘(3) CRITERIA FOR SUBSTITUTED FRE22 QUENCIES.—For purposes of paragraph (1), a fre23 quency may not be substituted for a frequency iden24 tified by the report of the Secretary under section
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1 113(a) unless the substituted frequency also meets

2 each of the criteria specified by section 113(a).

3 ‘‘(4) DELAYS IN IMPLEMENTATION.—If the

4 President determines that any action cannot be com5 pleted by the delayed effective date recommended by

6 the Secretary pursuant to section 113(e), or that

7 such an action by such date would result in a fre8 quency being unused as a consequence of the Com9 mission’s plan under section 115, the President

10 may—

11 ‘‘(A) withdraw or limit the assignment to

12 Federal Government stations on a later date

13 that is consistent with such plan, except that

14 the President shall notify each committee speci15 fied in paragraph (1)(B) and the Commission

16 of the reason that withdrawal or limitation at

17 a later date is required; or

18 ‘‘(B) substitute alternative frequencies pur19 suant to the provisions of this subsection.

20 ‘‘(c) LIMITATION ON DELEGATION.—Notwithstand21 ing any other provision of law, the authorities and duties

22 established by this section may not be delegated.
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1 ‘‘SEC. 115. DISTRIBUTION OF FREQUENCIES BY THE COM2 MISSION.

3 ‘‘Not later than 1 year after the President notifies

4 the Commission pursuant to section 114(a)(5), the Com5 mission shall prepare, in consultation with the Assistant

6 Secretary when necessary, and submit to the President

7 and the Congress, a plan for the distribution under the

8 Act of the frequency bands reallocated pursuant to the

9 requirements of this part. Such plan shall—

10 ‘‘(1) not propose the immediate distribution of

11 all such frequencies, but, taking into account the

12 timetable recommended by the Secretary pursuant to

13 section 113(e), shall propose—

14 ‘‘(A) gradually to distribute the frequencies

15 remaining, after making the reservation re16 quired by subparagraph (B), over the course of

17 a period of not less than 10 years beginning on

18 the date of submission of such plan; and

19 ‘‘(B) to reserve a significant portion of

20 such frequencies for distribution beginning after

21 the end of such 10-year period;

22 ‘‘(2) contain appropriate provisions to ensure—

23 ‘‘(A) the availability of frequencies for new

24 technologies and services in accordance with the

25 policies of section 7 of the Act (47 U.S.C. 157);

26 and
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1 ‘‘(B) the availability of frequencies to stim2 ulate the development of such technologies;

3 ‘‘(3) address (A) the feasibility of reallocating

4 spectrum from current commercial and other non5 Federal uses to provide for more efficient use of the

6 spectrum, and (B) innovation and marketplace de7 velopments that may affect the relative efficiencies

8 of different spectrum allocations; and

9 ‘‘(4) not prevent the Commission from allocat10 ing bands of frequencies for specific uses in future

11 rulemaking proceedings.

12 ‘‘SEC. 116. AUTHORITY TO RECOVER REASSIGNED FRE13 QUENCIES.

14 ‘‘(a) AUTHORITY OF PRESIDENT.—Subsequent to the

15 withdrawal of assignment to Federal Government stations

16 pursuant to section 114, the President may reclaim reas17 signed frequencies for reassignment to Federal Govern18 ment stations in accordance with this section.

19 ‘‘(b) PROCEDURE FOR RECLAIMING FRE20 QUENCIES.—

21 ‘‘(1) UNALLOCATED FREQUENCIES.—If the fre22 quencies to be reclaimed have not been allocated or

23 assigned by the Commission pursuant to the Act,

24 the President shall follow the procedures for substi-
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1 tution of frequencies established by section 114(b) of

2 this part.

3 ‘‘(2) ALLOCATED FREQUENCIES.—If the fre4 quencies to be reclaimed have been allocated or as5 signed by the Commission, the President shall follow

6 the procedures for substitution of frequencies estab7 lished by section 114(b) of this part, except that the

8 notification required by section 114(b)(1)(A) shall

9 include—

10 ‘‘(A) a timetable to accommodate an or11 derly transition for licensees to obtain new fre12 quencies and equipment necessary for its utili13 zation; and

14 ‘‘(B) an estimate of the cost of displacing

15 spectrum users licensed by the Commission.

16 ‘‘(c) COSTS OF RECLAIMING FREQUENCIES; APPRO17 PRIATIONS AUTHORIZED.—The Federal Government shall

18 bear all costs of reclaiming frequencies pursuant to this

19 section, including the cost of equipment which is rendered

20 unusable, the cost of relocating operations to a different

21 frequency band, and any other costs that are directly at22 tributable to the reclaiming of the frequency pursuant to

23 this section. There are authorized to be appropriated such

24 sums as may be necessary to carry out the purposes of

25 this section.
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1 ‘‘(d) EFFECTIVE DATE OF RECLAIMED FRE2 QUENCIES.—The Commission shall not withdraw licenses

3 for any reclaimed frequencies until the end of the fiscal

4 year following the fiscal year in which the President’s noti5 fication is received.

6 ‘‘(e) EFFECT ON OTHER LAW.—Nothing in this sec7 tion shall be construed to limit or otherwise affect the au8 thority of the President under sections 305 and 706 of

9 the Act (47 U.S.C. 305, 606).

10 ‘‘SEC. 117. DEFINITIONS.

11 ‘‘As used in this part:

12 ‘‘(1) The term ‘allocation’ means an entry in

13 the National Table of Frequency Allocations of a

14 given frequency band for the purpose of its use by

15 one or more radiocommunication services.

16 ‘‘(2) The term ‘assignment’ means an author17 ization given to a station licensee to use specific fre18 quencies or channels.

19 ‘‘(3) The term ‘commercial carrier’ means any

20 entity that uses a facility licensed by the Federal

21 Communications Commission pursuant to the Com22 munications Act of 1934 for hire or for its own use,

23 but does not include Federal Government stations

24 licensed pursuant to section 305 of the Act (47

25 U.S.C. 305).
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1 ‘‘(4) The term ‘the Act’ means the Communica2 tions Act of 1934 (47 U.S.C. 151 et seq.).’’.

3 CHAPTER 3—COMMUNICATIONS

4 TECHNICAL AMENDMENTS

5 SEC. 5241. CLERICAL CORRECTIONS.

6 (a) AMENDMENTS TO THE COMMUNICATIONS ACT OF

7 1934.—The Communications Act of 1934 is amended—

8 (1) in section 4(f)(3), by striking ‘‘overtime ex9 ceeds beyond’’ and inserting ‘‘overtime extends be10 yond’’;

11 (2) in section 5, by redesignating subsection (f)

12 as subsection (e);

13 (3) in section 220(b), by striking ‘‘clasess’’ and

14 inserting ‘‘classes’’;

15 (4) in section 223(b)(3), by striking ‘‘defendant

16 restrict access’’ and inserting ‘‘defendant restricted

17 access’’;

18 (5) in section 226(d), by striking paragraph (2)

19 and redesignating paragraphs (3) and (4) as para20 graphs (2) and (3), respectively;

21 (6) in section 227(e)(2), by striking ‘‘national

22 datebase’’ and inserting ‘‘national database’’;

23 (7) in section 228(c)(6)(D), by striking ‘‘con24 servation’’ and inserting ‘‘conversation’’;
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1 (8) in section 308(c), by striking ‘‘May 24,

2 1921’’ and inserting ‘‘May 27, 1921’’;

3 (9) in section 331, by amending the heading of

4 such section to read as follows:

5 ‘‘VERY HIGH FREQUENCY STATIONS AND AM RADIO

6 STATIONS’’;

7 (10) in section 358, by striking ‘‘(a)’’;

8 (11) in part III of title III—

9 (A) by inserting before section 381 the fol10 lowing heading:

11 ‘‘VESSELS TRANSPORTING MORE THAN SIX PASSENGERS

12 FOR HIRE REQUIRED TO BE EQUIPPED WITH RADIO

13 TELEPHONE’’;

14 (B) by inserting before section 382 the fol15 lowing heading:

16 ‘‘VESSELS EXCEPTED FROM RADIO TELEPHONE

17 REQUIREMENT’’;

18 (C) by inserting before section 383 the fol19 lowing heading:

20 ‘‘EXEMPTIONS BY COMMISSION’’;

21 (D) by inserting before section 384 the fol22 lowing heading:

23 ‘‘AUTHORITY OF COMMISSION; OPERATIONS,

24 INSTALLATIONS, AND ADDITIONAL EQUIPMENT’’;

25 (E) by inserting before section 385 the fol26 lowing heading:
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1 ‘‘INSPECTIONS’’; and

2 (F) by inserting before section 386 the fol3 lowing heading:

4 ‘‘FORFEITURES’’;

5 (12) in section 410(c), by striking ‘‘, as referred

6 to in sections 202(b) and 205(f) of the Interstate

7 Commerce Act,’’;

8 (13) in section 705(e)(3)(A), by striking ‘‘para9 graph (4) of subsection (d)’’ and inserting ‘‘para10 graph (4) of this subsection’’;

11 (14) in section 705, by redesignating sub12 sections (f) and (g) (as added by Public Law 100–

13 667) as subsections (g) and (h); and

14 (15) in section 705(h) (as so redesignated), by

15 striking ‘‘subsection (f)’’ and inserting ‘‘subsection

16 (g)’’.

17 (b) AMENDMENTS TO THE COMMUNICATIONS SAT18 ELLITE ACT OF 1962.—The Communications Satellite Act

19 of 1962 is amended—

20 (1) in section 303(a)—

21 (A) by striking ‘‘section 27(d)’’ and insert22 ing ‘‘section 327(d)’’;

23 (B) by striking ‘‘sec. 29–911(d)’’ and in24 serting ‘‘sec. 29–327(d)’’;

25 (C) by striking ‘‘section 36’’ and inserting

26 ‘‘section 336’’; and
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1 (D) by striking ‘‘sec. 29–916d’’ and insert2 ing ‘‘sec. 29–336(d)’’;

3 (2) in section 304(d), by striking ‘‘paragraphs

4 (1), (2), (3), (4), and (5) of section 310(a)’’ and in5 serting ‘‘subsection (a) and paragraphs (1) through

6 (4) of subsection (b) of section 310’’; and

7 (3) in section 304(e)—

8 (A) by striking ‘‘section 45(b)’’ and insert9 ing ‘‘section 345(b)’’; and

10 (B) by striking ‘‘sec. 29–920(b)’’ and in11 serting ‘‘sec. 29–345(b)’’; and

12 (4) in sections 502(b) and 503(a)(1), by strik13 ing ‘‘Communications Satellite Corporation’’ and in14 serting ‘‘communications satellite corporation estab15 lished pursuant to title III of this Act’’.

16 (c) CONFORMING AMENDMENT.—Section 1253 of the

17 Omnibus Budget Reconciliation Act of 1981 is repealed.

18 SEC. 5242. TRANSFER OF PROVISIONS OF LAW CONCERN19 ING PUBLIC TELECOMMUNICATIONS FACILI20 TIES, CHILDREN’S EDUCATIONAL TELE21 VISION, AND TELECOMMUNICATIONS DEM22 ONSTRATION PROGRAM.

23 (a) AMENDMENTS.—The Communications Act of

24 1934 (hereinafter in this section referred to as ‘‘the 1934

25 Act’’) and the National Telecommunications and Informa-
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1 tion Administration Organization Act (hereinafter in this

2 section referred to as ‘‘the NTIAO Act’’) are amended as

3 follows:

4 (1) The NTIAO Act is amended by inserting

5 after part B (as added by chapter 2 of this subtitle)

6 a new part C, the heading of which shall be as fol7 lows:

8 ‘‘PART C—ASSISTANCE FOR PUBLIC TELE9 COMMUNICATIONS FACILITIES; CHILDREN’S

10 EDUCATIONAL TELEVISION; TELECOMMUNI11 CATIONS DEMONSTRATIONS’’;

12 (2) Sections 390, 391, 392, 393, 393A, 394,

13 and 395 of the 1934 Act are transferred to such

14 new part C of the NTIAO Act and are redesignated

15 as sections 121, 122, 123, 124, 125, 131, and 135,

16 respectively, of the NTIAO Act.

17 (3) Such new part C of the NTIAO Act is

18 amended—

19 (A) by inserting before section 121 the fol20 lowing:

21 ‘‘Subpart 1—Assistance for Public

22 Telecommunications Facilities’’ and;

23 (B) by inserting before section 131 the fol24 lowing:
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1 ‘‘Subpart 2—National Endowment for Children’s

2 Television’’ and;

3 (C) by inserting before section 135 the fol4 lowing:

5 ‘‘Subpart 3—Telecommunications Demonstrations’’.

6 (4) Section 125 of the NTIAO Act (as added

7 by paragraph (2) of this subsection) is amended by

8 striking ‘‘section 390’’ and inserting ‘‘section 121’’.

9 (5) Each of such sections 121 through 135 is

10 amended so that the section designation and section

11 heading of each such shall be in the form and type12 face of the section designation and section heading

13 of this section.

14 (b) CONFORMING AMENDMENT TO COMMUNICATIONS

15 ACT OF 1934.—Part IV of title III of the 1934 Act is

16 amended by striking out subparts A, B, and C.

17 (c) REFERENCES IN OTHER LAWS AND DOCU18 MENTS.—Any reference to any section or other provision

19 of subpart A, B, or C of part IV of title III of the 1934

20 Act in any law, rule, regulation, certificate, directive, in21 struction, or other official paper in force on the date of

22 enactment of this section shall be deemed to refer to the

23 section or other provision of subpart 1, 2, or 3 of part

24 C of the NTIAO Act to which such section or other provi25 sion is transferred by this section.
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1 SEC. 5243. ELIMINATION OF EXPIRED AND OUTDATED PRO2 VISIONS.

3 (a) AMENDMENTS TO THE COMMUNICATIONS ACT OF

4 1934.—The Communications Act of 1934 is amended—

5 (1) in section 7(b), by striking ‘‘or twelve

6 months after the date of the enactment of this sec7 tion, if later’’ both places it appears;

8 (2) in section 212, by striking ‘‘After sixty days

9 from the enactment of this Act it shall’’ and insert10 ing ‘‘It shall’’;

11 (3) in section 213, by striking subsection (g)

12 and redesignating subsection (h) as subsection (g);

13 (4) in section 214(a), by striking ‘‘section 221

14 or 222’’ and inserting ‘‘section 221’’;

15 (5) in section 220(b), by striking ‘‘, as soon as

16 practicable,’’;

17 (6) in section 222—

18 (A) by striking paragraph (1) of subsection

19 (a);

20 (B) by redesignating paragraphs (2) and

21 (3) of such subsection as paragraphs (1) and

22 (2), respectively;

23 (C) by striking paragraph (2) of subsection

24 (b);

25 (D) by redesignating subsection (b)(1) as

26 subsection (b); and
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1 (E) by striking subsections (c), (d), and

2 (e);

3 (7) in section 224(b)(2), by striking ‘‘Within

4 180 days from the date of enactment of this section

5 the Commission’’ and inserting ‘‘The Commission’’;

6 (8) in 226(e)(1), by striking ‘‘, within 9 months

7 after the date of enactment of this section,’’;

8 (9) in section 309(i)(4)(A), by striking ‘‘The

9 commission, not later than 180 days after the date

10 of the enactment of the Communications Technical

11 Amendments Act of 1982, shall,’’ and inserting

12 ‘‘The Commission shall,’’;

13 (10) by striking section 328;

14 (11) in section 331(b), by striking the last sen15 tence;

16 (12) in section 413, by striking ‘‘, within sixty

17 days after the taking effect of this Act,’’;

18 (13) in section 624(d)(2)—

19 (A) by striking out ‘‘(A)’’;

20 (B) by inserting ‘‘of’’ after ‘‘restrict the

21 viewing’’; and

22 (C) by striking subparagraph (B);

23 (14) by striking sections 702 and 703;

24 (15) in section 704—
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1 (A) by striking subsections (b) and (d);

2 and

3 (B) by redesignating subsection (c) as sub4 section (b);

5 (16) in section 705(g) (as redesignated by sec6 tion 5211(15)), by striking ‘‘Within 6 months after

7 the date of enactment of the Satellite Home Viewer

8 Act of 1988, the Federal Communications Commis9 sion’’ and inserting ‘‘The Commission’’;

10 (16) in section 710(f)—

11 (A) by striking the first and second sen12 tences; and

13 (B) in the third sentence, by striking

14 ‘‘Thereafter, the Commission’’ and inserting

15 ‘‘The Commission’’;

16 (17) in section 712(a), by striking ‘‘, within

17 120 days after the effective date of the Satellite

18 Home Viewer Act of 1988,’’; and

19 (18) by striking section 713.

20 (b) AMENDMENTS TO THE COMMUNICATIONS SAT21 ELLITE ACT OF 1962.—The Communications Satellite Act

22 of 1962 is amended—

23 (1) in section 201(a)(1), by striking ‘‘as expedi24 tiously as possible,’’;
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1 (2) by striking sections 301 and 302 and insert2 ing the following:

3 ‘‘SEC. 301. CREATION OF CORPORATION.

4 ‘‘There is authorized to be created a communications

5 satellite corporation for profit which will not be an agency

6 or establishment of the United States Government.

7 ‘‘SEC. 302. APPLICABLE LAWS.

8 ‘‘The corporation shall be subject to the provisions

9 of this Act and, to the extent consistent with this Act,

10 to the District of Columbia Business Corporation Act. The

11 right to repeal, alter, or amend this Act at any time is

12 expressly reserved.’’;

13 (3) in section 304(a), by striking ‘‘at a price

14 not in excess of $100 for each share and’’;

15 (4) in section 404—

16 (A) by striking subsections (a) and (c);

17 and

18 (B) by striking ‘‘(b)’’ at the beginning of

19 subsection (b);

20 (5) in section 503—

21 (A) by striking paragraph (2) of subsection

22 (a); and

23 (B) by redesignating paragraph (3) of sub24 section (a) as paragraph (2) of such subsection;

25 (C) by striking subsection (b);
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1 (D) in subsection (g)—

2 (i) by striking ‘‘subsection (c)(3)’’ and

3 inserting ‘‘subsection (b)(3)’’; and

4 (ii) by striking the last sentence; and

5 (E) by redesignating subsections (c)

6 through (h) as subsections (b) through (g),

7 respectively;

8 (5) by striking sections 505, 506, and 507; and

9 (6) by redesignating section 508 as section 505.

10 SEC. 5244. STYLISTIC CONSISTENCY.

11 The Communications Act of 1934 and the Commu12 nications Satellite Act of 1962 are amended so that the

13 section designation and section heading of each section of

14 such Acts shall be in the form and typeface of the section

15 designation and heading of this section.

16 Subtitle D—Energy Programs

17 SEC. 5301. NUCLEAR REGULATORY COMMISSION ANNUAL

18 CHARGES.

19 Section 6101(a)(3) of the Omnibus Budget Reconcili20 ation Act of 1990 (42 U.S.C. 2214(a)(3)) is amended by

21 striking ‘‘September 30, 1995’’ and inserting ‘‘September

22 30, 1998’’.
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1 TITLE VI—COMMITTEE ON

2 FOREIGN AFFAIRS

3 In order to implement its reconciliation instructions,

4 the Committee on Foreign Affairs recommends changes

5 in law that are also recommended by the Committee on

6 Post Office and Civil Service. These changes in law, which

7 are contained in title X of this Act, would reduce direct

8 spending under the Foreign Service Retirement and Dis9 ability Fund and the Foreign Service Pension System by

10 requiring a 3-month delay in cost-of-living adjustments in

11 each of the fiscal years 1994, 1995, and 1996.

12 TITLE VII—COMMITTEE ON THE

13 JUDICIARY

14 SEC. 7001. PATENT AND TRADEMARK FEES.

15 Section 10101 of the Omnibus Budget Reconciliation

16 Act of 1990 (35 U.S.C. 41 note) is amended—

17 (1) in subsection (a) by striking ‘‘1995’’ and in18 serting ‘‘1998’’;

19 (2) in subsection (b)(2) by striking ‘‘1995’’ and

20 inserting ‘‘1998’’; and

21 (3) in subsection (c)—

22 (A) by striking ‘‘through 1995’’ and insert23 ing ‘‘through 1998’’; and

24 (B) by adding at the end the following:

25 ‘‘(6) $111,000,000 in fiscal year 1996.
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1 ‘‘(7) $115,000,000 in fiscal year 1997.

2 ‘‘(8) $119,000,000 in fiscal year 1998.’’.

3 TITLE VIII—COMMITTEE ON

4 MERCHANT MARINE AND

5 FISHERIES

6 SEC. 8001. EXTENSION OF VESSEL TONNAGE DUTIES.

7 (a) EXTENSION OF DUTIES.—Section 36 of the Act

8 of August 5, 1909 (36 Stat. 111; 46 App. U.S.C. 121),

9 is amended by—

10 (1) striking ‘‘and 1995,’’ each place it appears

11 and inserting ‘‘1995, 1996, 1997, 1998,’’;

12 (2) striking ‘‘place,’’ and inserting ‘‘place;’’;

13 and

14 (3) striking ‘‘port, not, however, to include ves15 sels in distress or not engaged in trade’’ and insert16 ing ‘‘port. However, neither duty shall be imposed

17 on vessels in distress or not engaged in trade’’.

18 (b) CONFORMING AMENDMENT.—The Act of March

19 8, 1910 (36 Stat. 234; 46 App. U.S.C. 132), is amended

20 by striking ‘‘and 1995,’’ and inserting ‘‘1995, 1996, 1997,

21 and 1998,’’.

22 (c) TECHNICAL CORRECTION.—

23 (1) CORRECTION.—Section 10402(a) of the

24 Omnibus Budget Reconciliation Act of 1990 (104
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1 Stat. 1388–398) is amended by striking ‘‘in the sec2 ond paragraph’’.

3 (2) EFFECTIVE DATE.—The amendment made

4 by paragraph (1) shall be effective on and after No5 vember 5, 1990.

6 SEC. 8002. SENSE OF THE CONGRESS ON THE INLAND WA7 TERWAYS FUEL TAX.

8 (a) FINDINGS.—The Congress finds the following:

9 (1) The Administration has proposed to in10 crease the tax on inland barge fuels from $0.19 to

11 $1.19 per gallon by 1997, which represents an in12 crease of 525 percent.

13 (2) The General Accounting Office has recently

14 identified 117 forms of Federal fees, taxes, and as15 sessments, not including customs duties, which raise

16 some $2,000,000,000 in Federal revenues each year.

17 (3) Barge transportation is one of the most

18 competitive, efficient, safe, and environmentally

19 friendly modes of transportation.

20 (4) Barges transport 15 percent of our Nation’s

21 commerce and provide jobs to some 180,000 Ameri22 cans.

23 (5) The Administration’s proposed increase

24 would add $420,000,000 in new taxes for operators
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1 on inland waterways, which is more than their

2 pretax profits.

3 (6) This increase would cause barge rates to

4 skyrocket, increasing costs to consumers and dev5 astating industries dependent upon the commercial

6 use of barges such as coal, agriculture, and petro7 chemicals, and would add to our unfavorable balance

8 of trade payments by hurting the competitiveness of

9 United States exports.

10 (7) Because the price of certain agricultural

11 commodities, such as grain, are set in the world

12 marketplace, increased inland barge fuel taxes could

13 not be passed on to consumers and would largely be

14 borne by our Nation’s farmers.

15 (8) The Senate on March 18, 1993, voted 88 to

16 12 to reject any further increase in inland barge fuel

17 taxes.

18 (9) This huge tax increase would cause many

19 barge companies to go out of business, would result

20 in thousands of lost American jobs, and would fur21 ther burden the already beleaguered United States

22 maritime industry.

23 (b) SENSE OF CONGRESS.—It is the sense of the

24 Congress that the inland waterways fuel tax should not
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1 be further increased beyond those increases already man2 dated by law.

3 TITLE IX—COMMITTEE ON

4 NATURAL RESOURCES

5 SEC. 9001. ANNUAL DIRECT GRANT ASSISTANCE.

6 (a) REPEAL.—Sections 3 and 4 of the Act of March

7 24, 1976 entitled ‘‘a Joint Resolution to approve the ‘Cov8 enant To Establish a Commonwealth of the Northern

9 Mariana Islands in Political Union with the United States

10 of America’, and for other purposes’’ (90 Stat. 263 and

11 following; 48 U.S.C. 1681 note) are repealed, effective on

12 October 1, 1993.

13 (b) DEFINITIONS.—As used in this section:

14 (1) COMMITTEES.—The term ‘‘committees’’

15 means the Committee on Natural Resources of the

16 House of Representatives and the Committee on

17 Energy and Natural Resources of the Senate.

18 (2) RECOMMENDATIONS.—The term ‘‘Rec19 ommendations’’ means the document executed De20 cember 17, 1992, between the special representative

21 of the President of the United States and the special

22 representatives of the Governor of the Common23 wealth of the Northern Mariana Islands relating to

24 future federal assistance for the Northern Mariana

25 Islands.
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1 (3) REPORTING DATE.—The term ‘‘reporting

2 date’’ means the date on which the budget of the

3 President for the fiscal year 1995 is required to be

4 submitted to the Congress under section 1105 of

5 title 31, United States Code.

6 (c) ASSISTANCE.—

7 (1) AMOUNTS.—Except as otherwise pro8 vided under this section, enactment of this sec9 tion shall constitute a commitment and pledge

10 of the full faith and credit of the United States

11 for the payment of the following amounts:

12 (A) In fulfillment of the United States

13 obligation under P.L. 94–241 and the au14 thorization in P.L. 95–348, $3,000,000 for

15 fiscal year 1994, which shall be available

16 only for the American Memorial Park, lo17 cated at Tanapag Harbor Reservation,

18 Saipan, to be expended in accordance with

19 section 5 of the Act entitled ‘‘An Act to

20 authorize appropriations for certain insular

21 areas of the United States, and for other

22 purposes’’, approved August 18, 1978 (92

23 Stat. 492), for the primary purpose of con24 structing an appropriate monument honor-
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1 ing the dead in the World War II Mariana

2 Islands campaign.

3 (B) $19,000,000 for fiscal year 1994,

4 to be held in trust in a special account by

5 the Secretary of the Interior for American

6 Samoa, the Commonwealth of the North7 ern Mariana Islands, Guam, the Trust

8 Territory of the Pacific Islands, and the

9 Virgin Islands, and to be disbursed by the

10 Secretary during fiscal year 1994 for es11 sential capital improvement projects. Such

12 disbursements shall be made by the Sec13 retary for projects described in plans sub14 mitted to the Secretary by the govern15 ments of American Samoa, the Common16 wealth of the Northern Mariana Islands,

17 Guam, the Trust Territory of the Pacific

18 Islands, and the Virgin Islands. No such

19 disbursements shall be made pursuant to

20 any such plan until after the expiration of

21 a period of 60 days after such plan has

22 been submitted to the committees. No such

23 disbursements shall be made to the Com24 monwealth of the Northern Mariana Is25 lands during fiscal year 1994 pursuant to
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1 any such plan until the committees have

2 received the reports required under sub3 section (d)(3) and a Joint Resolution has

4 been adopted expressing the sense of Con5 gress that disbursements are appropriate.

6 The Inspector General of the Department

7 of the Interior shall (i) monitor the ex8 penditure of such funds to determine

9 whether such funds are expended in ac10 cordance with applicable law, and (ii) sub11 mit a report of the findings to the commit12 tees not later than January 1, 1995.

13 (C) Subject to paragraphs (2), (3),

14 and (4) and subject to subsection (d), not

15 more than $98,000,000 for the 6-year pe16 riod beginning October 1, 1994, for the

17 government of the Commonwealth of the

18 Northern Mariana Islands, for capital im19 provement projects, at annual amounts

20 that shall not exceed those specified for the

21 Federal contribution within the general

22 funding schedule contained in the Rec23 ommendations.
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1 (2) MATCHING RATIO AND INTEREST

2 EARNINGS.—Nothing in this section shall be

3 construed to—

4 (A) modify the matching ratio re5 quirement specified in the funding schedule

6 contained in the Recommendations; or

7 (B) modify the terms of the Rec8 ommendations as to the availability of in9 terest earnings on funds contributed under

10 Public Law 99–396 upon meeting the

11 terms of the grant pledge agreements en12 tered into under Public Law 99–396.

13 (3) ROTA, TINIAN, AND SAIPAN.—No less

than 1 14 ⁄8 th share of the funds made available

15 under subsection (c)(1)(C) shall be expended in

16 the islands of Rota and Tinian and no less than

1 17 ⁄4 th share shall be expended in Saipan.

18 (4) APPLICABILITY OF GRANT REGULA19 TIONS.—The Federal assistance provided under

20 this section shall be subject to the applicable

21 Federal grant regulations set forth in the Com22 mon Rule (43 C.F.R. 12a, OMB Circular A–

23 102, and OMB Circular A–128).

24 (d) CONDITION ON MULTI-YEAR ASSISTANCE.—
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1 (1) JOINT RESOLUTION.—Amounts under sub2 section (c)(1)(C) for fiscal years 1995 through 2000

3 shall be as determined by the Congress by joint reso4 lution. It is the intent of the Congress that the com5 mittees report such a joint resolution after consider6 ing the plan referred to in paragraph (2) and re7 ports required by this subsection.

8 (2) CAPITAL IMPROVEMENT PROJECTS PLAN.—

9 The plan referred to in paragraph (1) is a plan de10 veloped and submitted by the Governor of the Com11 monwealth of the Northern Mariana Islands to the

12 Secretary of the Interior as approved by the legisla13 ture of the Commonwealth for new and recon14 structed capital infrastructure projects, indicating

15 the order of priority, together with cost estimates for

16 each project and identification of sources of financ17 ing for each project. The Secretary of the Interior

18 shall submit the plan, together with his rec19 ommendations, to the committees not later than the

20 reporting date.

21 (3) REPORTS.—Each of the following reports

22 shall be submitted to the committees not later than

23 the reporting date as follows:

24 (A) REVENUE BURDEN.—The Comptroller

25 General of the United States, after consultation
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1 with the government of the Northern Mariana

2 Islands, shall submit a report describing the ef3 fective revenue burden (including all taxes and

4 fees) imposed by the government of the Com5 monwealth of the Northern Mariana Islands.

6 The report shall—

7 (i) address whether revenues raised

8 are sufficient to meet the infrastructure

9 needs of the Commonwealth; and

10 (ii) compare the revenue burden of the

11 Commonwealth with that of Guam.

12 (B) COMPLIANCE WITH AUDIT REC13 OMMENDATIONS.—The Inspector General of the

14 Department of the Interior shall submit a re15 port on (i) compliance by the government of the

16 Commonwealth of the Northern Mariana Is17 lands with recommendations made by the In18 spector General pursuant to audits of the gov19 ernment of the Commonwealth, and (ii) on all

20 unfulfilled commitments made by the govern21 ment of the Commonwealth in response to those

22 recommendations.

23 (C) ASSESSMENT OF MINIMUM WAGE.—

24 The Secretary of Labor, after consultation with

25 the government of the Commonwealth of the
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1 Northern Mariana Islands, shall submit a re2 port which assesses whether—

3 (i) the minimum wage policies of the

4 Commonwealth are sufficient for the main5 tenance of the minimum standard of living

6 necessary for health, efficiency, and gen7 eral well-being of workers in the Common8 wealth;

9 (ii) the prevailing wages paid in the

10 Commonwealth are effectively reduced by

11 the immigration policy of the Common12 wealth; and

13 (iii) the wage rate in the Common14 wealth gives industries in the Common15 wealth a competitive advantage over indus16 tries in the United States outside of the

17 Commonwealth.

18 (D) IMMIGRATION POLICY AND BURDEN

19 ON INFRASTRUCTURE.—(i) The Attorney Gen20 eral of the United States, after consultation

21 with the government of the Commonwealth of

22 the Northern Mariana Islands, shall submit a

23 report which assesses—

24 (I) whether the immigration laws of

25 the Commonwealth are appropriate in light
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1 of the social and economic situation in the

2 Commonwealth;

3 (II) the extent to which the Common4 wealth is relying on temporary alien work5 ers to meet the Commonwealth’s perma6 nent labor needs;

7 (III) whether the Commonwealth has

8 taken steps to reduce its dependence on

9 temporary alien workers; and

10 (IV) the political and civil rights of

11 the alien population as compared to the

12 resident population.

13 (ii) The Comptroller General of the United

14 States shall submit a report to the Congress

15 which analyzes the socioeconomic impact of the

16 immigration policy of the Commonwealth of the

17 Northern Mariana Islands, including the finan18 cial burden imposed by the alien population on

19 the infrastructure.

20 (E) ENVIRONMENTAL LAWS.—The Sec21 retary of the Interior and the Administrator of

22 the Environmental Protection Agency shall each

23 submit a report to the Congress on the compli24 ance by the Commonwealth of the Northern

25 Mariana Islands with United States environ-
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1 mental laws, including (but not limited to) the

2 National Environmental Policy Act of 1969, the

3 Endangered Species Act of 1973, and the Fed4 eral Water Pollution Control Act.

5 SEC. 9002. NET RECEIPTS SHARING.

6 Section 35 of the Mineral Leasing Act is amended

7 as follows:

8 (1) Strike the last sentence.

9 (2) Insert ‘‘(a) IN GENERAL.—’’ after ‘‘SEC.

10 35.’’

11 (3) Insert ‘‘and, subject to subsection (b),’’ be12 tween ‘‘United States;’’ and ‘‘50 percentum’’.

13 (4) Add the following new subsection at the end

14 thereof:

15 ‘‘(b) ADMINISTRATIVE COSTS.—(1) In calculating the

16 amount to be paid to each State during any fiscal year

17 under this section and under other provisions of law re18 quiring payment to a State of any revenues derived from

19 the leasing of any other onshore lands or interest in land

20 owned by the United States for the production of the same

21 types of minerals as are leasable under this Act or for

22 the production of geothermal steam, prior to the division

23 and distribution of such leasing receipts between the

24 States and the United States, the Secretary shall deduct

25 50 percent of the portion of the enacted appropriations
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1 of the Department of the Interior and of other depart2 ments and agencies of the United States for the preceding

3 fiscal year allocable to the administration and enforcement

4 of this Act and such other provisions of law. Such deduc5 tion shall be in approximately equal amounts each month

6 (subject to paragraph (3)).

7 ‘‘(2) The proportion of the deduction required under

8 paragraph (1) which is allocable to each State shall be

9 a percentage of the total deduction allocable to all States.

10 The percentage shall be determined by dividing—

11 ‘‘(A) the monies disbursed to the State during

12 the preceding fiscal year under the provisions of this

13 section and the other provisions of law referred to in

14 paragraph (1), by

15 ‘‘(B) the total money disbursed to all States

16 during that fiscal year under such provisions.

17 ‘‘(3) If the amount otherwise deductible under this

18 subsection in any month from the portion of revenues to

19 be distributed to a State exceeds the amount payable to

20 the State during that month, any amount exceeding the

21 amount payable shall be carried forward and deducted

22 from amounts payable to the State in subsequent months.

23 ‘‘(4) All amounts deducted under this subsection

24 from monies otherwise payable to a State shall be credited

25 to miscellaneous receipts in the Treasury.’’.
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1 SEC. 9003. HARD ROCK MINING CLAIM MAINTENANCE AND

2 LOCATION FEES.

3 (a) CLAIM MAINTENANCE AND LOCATION FEES.—

4 (1) CLAIM MAINTENANCE FEES.—The holder

5 of each unpatented mining claim, mill or tunnel site

6 located pursuant to the Mining Laws of the United

7 States (whether located before or after enactment of

8 this Act) shall pay to the Secretary of the Interior

9 or his designee for each assessment year a flat claim

10 maintenance fee of not less than $100 per claim.

11 Such claim maintenance fee shall be in lieu of the

12 assessment work requirement contained in the Min13 ing Law of 1872 (30 U.S.C. 28–28e) and the related

14 filing requirements contained in section 314 (a) and

15 (c) of the Federal Land Policy and Management Act

16 of 1976 (43 U.S.C. 1744 (a) and (c)).

17 (2) LOCATION FEE.—For each mining claim,

18 mill or tunnel site located pursuant to the Mining

19 Laws of the United States after the date of enact20 ment of this Act, the claimant shall pay the Sec21 retary a location fee of $25.

22 (b) TIME OF PAYMENT.—The claim maintenance fee

23 payable under subsection (a)(1) for any assessment year

24 shall be paid before the commencement of the assessment

25 year, except that for the initial assessment year in which

26 the location is made, the locator shall pay the claim main-
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1 tenance fee at the time the location notice is recorded with

2 the Bureau of Land Management. The location fee im3 posed under subsection (a)(2) shall be payable not later

4 than 90 days after the date of location

5 (c) DEPOSIT IN TREASURY.—The Secretary shall de6 posit monies received under this Act as miscellaneous re7 ceipts in the Treasury.

8 (d) CO-OWNERSHIP.—The co-ownership provisions of

9 section 2324 of the Mining Law of 1872 (30 U.S.C. 28)

10 shall remain in effect with respect to mining claims subject

11 to such provisions except that the annual claim mainte12 nance fee, where applicable, shall be paid in lieu of appli13 cable assessment requirements and expenditures.

14 (e) FORFEITURE.—Failure to make the annual pay15 ment of any claim maintenance or location fee required

16 with respect to any unpatented mining claim, mill, or tun17 nel site required by subsection (a) shall conclusively con18 stitute a forfeiture by the holder of the unpatented mining

19 claim, mill or tunnel site, effective at noon on the date

20 the payment is due.

21 (f) FLPMA FILING REQUIREMENTS.—Nothing in

22 this Act shall change or modify the requirements of section

23 314(b) of the Federal Land Policy and Management Act

24 of 1976 (43 U.S.C. 1744(b)) or the requirements of sec25 tion 314(c) of the Federal Land Policy and Management
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1 Act of 1976 (43 U.S.C. 1744(c)) related to filings required

2 by such section 314(b). Such requirements shall remain

3 in effect with respect to claims, and mill or tunnel sites

4 for which fees are required to be paid under this section.

5 (g) RULES AND REGULATIONS.—The Secretary of

6 the Interior shall promulgate rules and regulations to

7 carry out the purposes of this section as soon as prac8 ticable after the date of enactment of this Act.

9 (h) PURCHASING POWER ADJUSTMENT.—Every 5

10 years following the date of enactment of this Act, or more

11 frequently if the Secretary determines a more frequent ad12 justment to be reasonable, the Secretary of the Interior

13 shall adjust the fees specified in subsection (a) to reflect

14 changes in the purchasing power of the dollar. The Sec15 retary shall use the Consumer Price Index for all urban

16 consumers published by the Department of Labor as the

17 basis for adjustment, rounding according to the adjust18 ment process of conditions of the Federal Civil Penalties

19 Inflation Adjustment Act of 1990 (104 Stat. 890). The

20 Secretary shall provide claimants notice of any adjustment

21 made under this subsection not later than July 1 of any

22 year in which the adjustment is made. A fee adjustment

23 under this paragraph shall begin to apply the first assess24 ment which begins after the adjustment is made.
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1 (i) OIL SHALE CLAIMS SUBJECT TO CLAIM MAINTE2 NANCE FEES UNDER ENERGY POLICY ACT OF 1992.—

3 This section shall not apply to any oil shale claims for

4 which a fee is required to be paid under section 2511(e)(2)

5 of the Energy Policy Act of 1992 (Public Law 102–486;

6 106 Stat. 3111; 30 U.S.C. 242).

7 (j) EXCEPTION FOR HOLDERS OF FEWER THAN 50

8 CLAIMS.—

9 (1) ELIGIBILITY.—In accordance with para10 graph (3), a claimant may be eligible for a waiver

11 or reduction of the claim maintenance fees imposed

12 under this section if the claimant certifies in writing

13 to the Secretary that on the date the payment was

14 due, the claimant and all related parties—

15 (A) held not more than 50 mining claims,

16 mill sites, or tunnel sites, or any combination

17 thereof, on public lands; and

18 (B) have performed assessment work suffi19 cient to maintain the mining claims held by the

20 claimant and such related parties for the as21 sessment year ending on noon of September 1

22 of the calendar year in which payment of the

23 claim maintenance fee was due; except that

24 such performance of assessment work shall not

25 be required by reason of section 5 of Public
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1 Law 94–429, commonly known as the Mining

2 in the Parks Act, or such other laws that before

3 the date of the enactment of this Act removed

4 the applicability of the assessment work re5 quirement of the general mining laws for any

6 claim subject to such laws.

7 (2) HOLDER.—For purposes of paragraph (1),

8 with respect to any claimant, the term ‘‘related par9 ties’’ means—

10 (A) the spouse and dependent children (as

11 defined in section 152 of the Internal Revenue

12 Code of 1986), of the claimant; and

13 (B) a person affiliated with the claimant,

14 including—

15 (i) a person controlled by, controlling,

16 or under common control with the claim17 ant; and

18 (ii) a subsidiary or parent company or

19 corporation of the claimant.

20 (3) WAIVED OR REDUCED MAINTENANCE

21 FEES.—

22 (A) 10 OR FEWER CLAIMS.—The Secretary

23 of the Interior may waive the claim mainte24 nance fee imposed under this section in its en-
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1 tirety for 10 or fewer claims held by a claimant

2 eligible under paragraph (1).

3 (B) 11 OR MORE CLAIMS.—

4 (i) IN GENERAL.—Subject to clause

5 (ii), for a claimant eligible under para6 graph (1), the Secretary may reduce the

7 claim maintenance fee imposed under this

8 section to $25 per claim for each claim in

9 excess of 10.

10 (ii) LIMITATION.—The reduction pro11 vided for in this subparagraph shall be

12 available for no more than 50 claims held

13 by a claimant who is eligible under para14 graph (1).

15 (4) PAYMENT IN LIEU OF ANNUAL LABOR RE16 QUIREMENTS.—The third sentence of section 2324

17 of the Revised Statutes (30 U.S.C. 28) is amended

18 by inserting after ‘‘On each claim located after the

19 tenth day of May, eighteen hundred and seventy20 two,’’ the following: ‘‘for which a waiver of the main21 tenance fee, or a reduced maintenance fee, under

22 section 9003 of the Omnibus Budget Reconciliation

23 Act of 1993 has been granted under subsection (j)

24 of that section,’’.
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1 (5) FILING REQUIREMENTS.—The holder of any

2 unpatented mining claim for which a waiver of the

3 maintenance fee, or a reduced maintenance fee, has

4 been granted pursuant to this subsection shall con5 tinue to be subject to the filing requirements con6 tained in sections 314(a) and (c) of the Federal

7 Land Policy Management Act of 1976 (43 U.S.C.

8 1744(a) and (c)).

9 (k) EFFECTIVE DATE.—This section shall take effect

10 with respect to assessment years beginning after August

11 31, 1994.

12 SEC. 9004. FEDERAL IRRIGATION WATER SURCHARGE.

13 (a) FINDINGS AND PURPOSES.—

14 (1) FINDINGS.—The Congress finds that—

15 (A) the construction and operation of Fed16 eral reclamation projects have contributed to

17 the depletion of streams, the alteration of ripar18 ian habitat, and the degradation of water qual19 ity;

20 (B) such impacts have had adverse impacts

21 on fish and wildlife resources; and

22 (C) the restoration of fish and wildlife and

23 related habitat affected by the construction or

24 operation of Federal reclamation projects is a
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1 continuing responsibility of the beneficiaries of

2 such projects.

3 (2) PURPOSES.—The purposes of this section

4 are to—

5 (A) incorporate the restoration of fish and

6 wildlife resources and related habitat affected

7 by the construction or operation of Federal rec8 lamation projects into the annual operation and

9 maintenance requirements of such projects;

10 (B) establish a fair and equitable mecha11 nism for securing timely payments from the

12 beneficiaries of such projects for the implemen13 tation, operation, and maintenance of fish and

14 wildlife restoration measures;

15 (C) accelerate the rate of restoration and

16 recovery of depleted populations of indigenous

17 fish and wildlife; and

18 (D) encourage more efficient use of water

19 resources by the beneficiaries of Federal rec20 lamation projects.

21 (b) OPERATIONAL CHARGES.—

22 (1) IN GENERAL.—Individuals or non-Federal

23 entities that receive delivery of water (including by

24 exchange) which is stored in or transported through

25 Federal reclamation projects or project facilities or
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1 projects or project facilities constructed by the Sec2 retary of the Army that meet the conditions speci3 fied in paragraph (1) or (2) of section 212(a) of the

4 Reclamation Reform Act of 1982 (Public Law 97–

5 293, 43 U.S.C. 390ll), except for facilities of the

6 Central Valley Project, California (as that project is

7 defined by title XXXIV of Public Law 102–575),

8 shall, pursuant to such terms, conditions, and proce9 dures as the Secretary of the Interior may prescribe,

10 pay to the United States an operation and mainte11 nance charge sufficient to yield at least $10,000,000

12 (January 1993 price levels) annually in the years

13 1994, 1995, and 1996 and at least $15,000,000

14 (January 1993 price levels) annually in 1997 and

15 each year thereafter.

16 (2) PAYMENTS.—Payments required by para17 graph (1) shall be made without reduction or defer18 ral by the Secretary under any provision of reclama19 tion law and without regard to whether an individual

20 or entity has discharged its repayment obligation

21 within the meaning of the first section of the Act of

22 July 2, 1956 (70 Stat. 483; 43 U.S.C. 485h–1), sec23 tion 213 of the Reclamation Reform Act of 1982

24 (Public Law 97–293, 43 U.S.C. 390mm), or any

25 other provision of Federal Reclamation law. The
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1 payments shall be in addition to any other repay2 ments owed or made to the United States and shall

3 not be applied or credited to an individual’s or enti4 ty’s repayment of project construction costs, pay5 ment of other annual project operation and mainte6 nance costs, payment of interest, or reduction of any

7 contractual obligation the individual or entity may

8 have with the United States.

9 (c) NATURAL RESOURCES RESTORATION FUND.—

10 There is hereby established in the Treasury of the United

11 States a fund to be known as the ‘‘Natural Resources Res12 toration Fund’’ (hereafter in this section referred to as

13 the ‘‘Fund’’). All payments of the operation and mainte14 nance charges authorized in subsection (b) shall be depos15 ited in the Fund, and shall be available in the fiscal year

16 following deposit and thereafter, to such extent or in such

17 amounts as are provided in advance in appropriation Acts,

18 for expenditures by the Secretary of the Interior for the

19 benefit of fish and wildlife resources, including habitat, af20 fected by construction or operation of the projects referred

21 to in this section.

22 (d) INDIAN LAND OWNERS.—For the purposes of

23 this section, Indian tribes or individual Indian beneficial

24 owners of land held in trust by the United States or sub-
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1 ject to a restriction against alienation by the United States

2 shall be considered to be Federal entities.

3 (e) FEDERAL RECLAMATION LAW.—This section

4 shall constitute an amendment of and a supplement to the

5 Federal Reclamation laws (the Reclamation Act of 1902,

6 32 Stat. 388, and Acts amendatory thereof and supple7 mentary thereto).

8 SEC. 9005. RECREATION USER FEES.

9 (a) LAND AND WATER CONSERVATION FUND ACT OF

10 1965.—

11 (1) IN GENERAL.—The first sentence of section

12 4(b) of the Land and Water Conservation Fund Act

13 of 1965 (relating to recreation use fees) is amended

14 by striking out ‘‘picnic tables, or boat ramps’’ and

15 all that follows down through the period at the end

16 thereof and inserting the following: ‘‘or picnic tables,

17 and in no event shall there be any charge for the use

18 of any campground not having a majority of the fol19 lowing: tent or trailer spaces, drinking water, access

20 road, refuse containers, toilet facilities, fee collection

21 by an employee or agent of the Federal agency oper22 ating the facility, reasonable visitor protection, and

23 simple devices for containing a campfire (where

24 campfires are permitted). For purposes of this sub25 section, the term ‘specialized outdoor recreation site’
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1 includes but shall not be limited to campgrounds,

2 swimming sites, boat launch facilities, and managed

3 parking lots.’’. The second sentence of such section

4 4(b) is hereby repealed.

5 (2) CONFORMING AMENDMENT.—Section 210

6 of Public Law 90–483 (82 Stat. 746; 16 U.S.C.

7 460d–3) is repealed.

8 (b) COSTS OF COLLECTION.—Section 4(i) of the

9 Land and Water Conservation Fund Act of 1965 (relating

10 to special accounts for fees collected) is amended by insert11 ing ‘‘(A)’’ after ‘‘(1)’’ and by adding the following at the

12 end of paragraph (1):

13 ‘‘(B) Notwithstanding subparagraph (A), in any fis14 cal year, the Secretary of Agriculture and the Secretary

15 of the Interior may withhold from the special account es16 tablished under subparagraph (A) such portion of all re17 ceipts the fees collected in that fiscal year under this sec18 tion as such Secretary determines to be equal to the addi19 tional fee collection costs for that fiscal year. The amounts

20 so withheld shall be retained by the Secretary of Agri21 culture or the Secretary of the Interior and shall be avail22 able, without further appropriation, for expenditure by the

23 Secretary concerned in the fiscal year in which collected

24 to cover such additional fee collection costs. The Secretary

25 concerned shall deposit in the special account established
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1 pursuant to subparagraph (A) any amounts so retained

2 which remain unexpended and unobligated at the end of

3 such fiscal year. For the purposes of this subparagraph,

4 for any fiscal year, the term ‘additional fee collection costs’

5 means those costs for personnel and infrastructure di6 rectly associated with the collection of fees imposed under

7 this section which exceed the costs for personnel and infra8 structure directly associated with the collection of such

9 fees during fiscal year 1993.’’.

10 (c) GOLDEN AGE PASSPORT.—The second sentence

11 of section 4(a)(4) of the Land and Water Conservation

12 Fund Act of 1965 (relating to Golden Age Passports) is

13 amended to read as follows: ‘‘Such permit shall be

14 nontransferable, shall be issued for a charge of $10, and

15 shall entitle the permittee and the permittee’s spouse ac16 companying the permittee to general admission into any

17 area designated pursuant to this section.’’.

18 (d) USER FEES FOR RIGHTS-OF-WAY.—In each fis19 cal year after the enactment of this Act, the Secretary of

20 the Interior shall impose and collect an annual fee for the

21 use and occupancy of any right-of-way through any na22 tional park system unit for which a permit has been issued

23 by the Secretary pursuant to any general or specific statu24 tory right-of-way authority (whether issued before or after

25 the enactment of this Act) or for any other right-of-way
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1 allowed as of the date of the enactment of this Act. The

2 amount of such annual fee shall be equal to the fair mar3 ket rental value, as determined by the Secretary, of such

4 use and occupancy for the fiscal year concerned. The fair

5 market value shall be reviewed (and revised if necessary)

6 not less frequently than every 3 years. The Secretary shall

7 deposit all fees collected under this subsection in the spe8 cial account established under section 4(i) of the Land and

9 Water Conservation Fund Act of 1965.

10 (e) COMMERCIAL TOUR USE FEES.—(1) In the case

11 of each unit of the National Park System for which an

12 admission fee is charged under section 4 of the Land and

13 Water Conservation Fund Act of 1965 (16 U.S.C. 460l–

14 4), the Secretary of the Interior shall establish, by October

15 1, 1993, a commercial tour use fee to be imposed on each

16 vehicle or aircraft entering the unit (or the airspace of

17 the unit) for the purpose of providing commercial tour

18 services within (or within the air space of) the unit. Fee

19 revenue derived from such commercial tour use fees shall

20 be deposited into the special account established under

21 section 4(i) of the Land and Water Conservation Fund

22 Act of 1965.

23 (2) The Secretary shall establish the amount of fee

24 to be imposed under this subsection per entry. The fee

25 shall not be less than—
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1 (A) $25 per vehicle or aircraft with a passenger

2 capacity of 25 persons or less,

3 (B) $50 per vehicle or aircraft with a passenger

4 capacity of 26 to 99 persons, and

5 (C) $100 per vehicle or aircraft with a pas6 senger capacity of 100 to 299 persons.

7 The Secretary may periodically increase the fee imposed

8 under this subsection as he deems necessary and justifi9 able.

10 (3) The commercial tour use fee imposed under this

11 subsection shall not apply to either of the following:

12 (A) Any vehicle or aircraft transporting orga13 nized school groups or outings conducted for edu14 cational purposes by schools or other bona fide edu15 cational institutions.

16 (B) Any vehicle or aircraft entering a park sys17 tem unit pursuant to a contract issued under the

18 Act of October 9, 1965 (16 U.S.C. 20–20g) entitled

19 ‘‘An Act relating to the establishment of concession

20 policies in the areas administered by the National

21 Park Service and for other purposes’’.

22 (f) FAIR MARKET VALUE FOR COMMUNICATION SITE

23 FEES.—No permit or other authorization for the use of

24 any area of the public lands of the United States for pur25 poses of commercial telephone transmission facilities shall
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1 remain in force and effect after January 1, 1994 unless,

2 before that date, and before January 1 of each year there3 after, the holder of such permit or other authorization

4 pays to Secretary of the Department having administra5 tive jurisdiction over such lands an amount equal to the

6 fair market value, as determined by such Secretary, of the

7 right to use and occupy such area for such purposes. For

8 purposes of this subsection, the term ‘‘public lands of the

9 United States’’ means lands owned by the United States

10 and administered by the Secretary of the Interior (other

11 than lands held for the benefit of Indians, Aleuts, and Es12 kimos) and lands within the National Forest System.

13 SEC. 9006. NUCLEAR REGULATORY COMMISSION ANNUAL

14 CHARGES.

15 Section 6101(a)(3) of the Omnibus Budget Reconcili16 ation Act of 1990 (42 U.S.C. 2214(a)(3)) is amended by

17 striking ‘‘September 30, 1995’’ and inserting ‘‘September

18 30, 1998’’.

19 SEC. 9007. RECOVERING THE COST FOR GOVERNMENT

20 SERVICES.

21 (a) REPORT.—Not later than January 1, 1994, the

22 Secretary of the Interior and the Secretary of Energy shall

23 each submit a report identifying fees, penalties, and other

24 charges to the Committee on Natural Resources of the
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1 House of Representatives and the Committee on Energy

2 and Natural Resources of the Senate. Each report shall—

3 (1) identify all fees, penalties, and other

4 charges imposed by the respective Secretary for the

5 provision of services;

6 (2) include the procedures for adjusting such

7 fees to recover the cost of providing those services;

8 and

9 (3) identify those services for which no fee is

10 currently charged and make recommendations for a

11 fee appropriate to cover the cost of providing each

12 service.

13 (b) ADJUSTMENT OF FEES.—Except as provided in

14 subsection (d), for fiscal year 1995 and each fiscal year

15 thereafter, the Secretary of the Interior and the Secretary

16 of Energy shall adjust each fee, penalty, and other charge

17 for the provision of services identified pursuant to sub18 section (a)(1). Each such fee, penalty, and charge shall

19 be adjusted in accordance with the procedures identified

20 pursuant to subsection (a)(2).

21 (c) IMPLEMENTATION OF FEES FOR SERVICES NOT

22 COVERED.—Beginning with fiscal year 1995, the Sec23 retary of the Interior and the Secretary of Energy shall

24 charge fees for each of the services identified pursuant to

25 subsection (a)(3) in an amount sufficient to recover the
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1 cost of providing the service. For each fiscal year there2 after, the fee shall be adjusted in the same manner as

3 adjustments are made pursuant to subsection (b), using

4 fiscal year 1995 as the base year.

5 (d) CERTAIN FEES, PENALTIES AND CHARGES NOT

6 COVERED.—Subsection (b) shall not apply to any fee, pen7 alty, or charge the amount of which is expressly specified

8 in any statute or contract.

9 SEC. 9008. UNFUNDED LIABILITIES OF THE FEDERAL GOV10 ERNMENT.

11 Section 1105 of title 31, United States Code, is

12 amended by adding the following subsection at the end

13 thereof:

14 ‘‘(g) The President shall transmit with materials re15 lated to each budget an estimate of unfunded future liabil16 ities of the Federal Government that are not accounted

17 for in the budget itself. Such estimate shall include (but

18 not be limited to) liabilities for future remediation of envi19 ronmental and natural resources damage, and cleaning up

20 waste sites, on Federal lands. Sources of liabilities shall

21 include (but not be limited to) active, inactive, or aban22 doned mines or oil or gas wells, irrigation waste water im23 pacts, decommissioning of nuclear power plants, and ura24 nium mining and processing activities (without regard to

25 the location of such mining or processing activities) affect-
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1 ing the health of Native Americans and carried out pursu2 ant to a program administered by the United States.’’.

3 TITLE X—COMMITTEE ON POST

4 OFFICE AND CIVIL SERVICE

5 Subtitle A—Civil Service

6 SEC. 10001. DELAY IN COST-OF-LIVING ADJUSTMENTS IN

7 FEDERAL EMPLOYEE RETIREMENT BENEFITS

8 DURING FISCAL YEARS 1994, 1995, AND 1996.

9 (a) APPLICABILITY.—This section shall apply with

10 respect to any cost-of-living increase scheduled to take

11 effect, during fiscal year 1994, 1995, or 1996, under—

12 (1) section 8340(b) or 8462(b) of title 5, Unit13 ed States Code;

14 (2) section 826 or 858 of the Foreign Service

15 Act of 1980; or

16 (3) section 291 of the Central Intelligence

17 Agency Retirement Act (50 U.S.C. 2131), as set

18 forth in section 802 of the CIARDS Technical Cor19 rections Act of 1992 (Public Law 102–496; 106

20 Stat. 3196).

21 (b) DELAY IN EFFECTIVE DATE OF ADJUST22 MENTS.—A cost-of-living increase described in subsection

23 (a) shall not take effect until the first day of the third

24 calendar month after the date such increase would other25 wise take effect.
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1 (c) RULE OF CONSTRUCTION.—Nothing in this sec2 tion shall be considered to affect any determination relat3 ing to eligibility for an annuity increase or the amount

4 of the first increase in an annuity under section 8340(b)

5 or (c) or section 8462(b) or (c) of title 5, United States

6 Code, or comparable provisions of law.

7 SEC. 10002. PERMANENT ELIMINATION OF THE ALTER8 NATIVE-FORM-OF-ANNUITY OPTION EXCEPT

9 FOR INDIVIDUALS WITH A CRITICAL MEDI10 CAL CONDITION.

11 (a) CIVIL SERVICE RETIREMENT SYSTEM; FEDERAL

12 EMPLOYEES’ RETIREMENT SYSTEM.—Sections 8343a and

13 8420a of title 5, United States Code, are each amended—

14 (1) in subsection (a) by striking ‘‘an employee

15 or Member may,’’ and inserting ‘‘any employee or

16 Member who has a life-threatening affliction or

17 other critical medical condition may,’’; and

18 (2) by striking subsection (f).

19 (b) FOREIGN SERVICE RETIREMENT AND DISABIL20 ITY SYSTEM.—Section 807(e)(1) of the Foreign Service

21 Act of 1980 (22 U.S.C. 4047(e)(1)) is amended by strik22 ing ‘‘a participant may,’’ and inserting ‘‘any participant

23 who has a life-threatening affliction or other critical medi24 cal condition may,’’.
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1 (c) CENTRAL INTELLIGENCE AGENCY RETIREMENT

2 AND DISABILITY SYSTEM.—Section 294(a) of the Central

3 Intelligence Agency Retirement Act (50 U.S.C. 2143(a)),

4 as set forth in section 802 of the CIARDS Technical Cor5 rections Act of 1992 (Public Law 102–496; 106 Stat.

6 3196), is amended by striking ‘‘a participant may,’’ and

7 inserting ‘‘any participant who has a life-threatening

8 affliction or other critical medical condition may,’’.

9 (d) EFFECTIVE DATE.—The amendments made by

10 this section shall become effective on January 1, 1994,

11 and shall apply with respect to any annuity commencing

12 on or after that date.

13 SEC. 10003. PAY LIMITATIONS.

14 (a) ELIMINATION OF THE 1994 ANNUAL PAY AD15 JUSTMENT.—

16 (1) STATUTORY PAY SYSTEMS.—Notwithstand17 ing section 633 of the Treasury, Postal Service

18 and General Government Appropriations Act,

19 1991 (5 U.S.C. 5303 note) or any other provision

20 of law, the adjustment in rates of basic pay that is

21 scheduled to take effect in 1994 under section 5303

22 of title 5, United States Code, shall not take effect.

23 (2) OTHER PAY SYSTEMS.—

24 (A) IN GENERAL.—Notwithstanding any

25 other provision of law, any general pay adjust-
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1 ment, similar to the adjustment referred to in

2 paragraph (1), which is scheduled to take effect

3 in 1994 with respect to any civilian officers or

4 employees in the executive branch (other than

5 those affected by paragraph (1)) shall not take

6 effect.

7 (B) EXCEPTIONS.—Subparagraph (A)

8 shall not apply with respect to—

9 (i) any pay adjustment required under

10 the terms of a contract, as in effect before

11 the date of the enactment of this Act; or

12 (ii) any alien or noncitizen of the

13 United States who occupies a position out14 side the United States.

15 (C) REGULATIONS.—The Office of Person16 nel Management may prescribe any regulations

17 it considers necessary for the administration of

18 this paragraph.

19 (b) MODIFICATION IN FORMULA FOR COMPUTING

20 ANNUAL PAY ADJUSTMENTS FOR 1995, 1996, AND

21 1997.—

22 (1) STATUTORY PAY SYSTEMS.—Section

23 5303(a) of title 5, United States Code, is

24 amended—
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1 (A) by striking ‘‘(a)’’ and inserting

2 ‘‘(a)(1)’’; and

3 (B) by adding at the end the following:

4 ‘‘(2) Notwithstanding section 633 of the Treasury,

5 Postal Service and General Government Appropriations

6 Act, 1991 or any other provision of law, for purposes of

7 any adjustment scheduled to take effect under this section

8 in 1995, 1996, or 1997, paragraph (1) shall be deemed

9 to be amended by striking ‘equal to’ through ‘less than’

10 and inserting ‘equal to one and one-half percentage points

11 less than’.’’.

12 (2) OTHER PAY SYSTEMS.—Section 704(a)(1)

13 of the Ethics Reform Act of 1989 (5 U.S.C. 5318

14 note) is amended by adding at the end the following:

15 ‘‘(C) SPECIAL RULE.—For purposes of any

16 pay adjustment scheduled to take effect in

17 1995, 1996, or 1997, subparagraph (B) shall

18 be deemed to be amended by striking ‘one-half

19 of 1 percent’ and inserting ‘one and one-half

20 percent’.’’.

21 SEC. 10004. PROVISIONS RELATING TO LOCALITY-BASED

22 COMPARABILITY PAYMENTS.

23 (a) LOCALITY-BASED COMPARABILITY PAYMENTS.—

24 (1) CHANGE IN EFFECTIVE DATE OF PAY25 MENTS.—Section 5304(d)(2) of title 5, United
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1 States Code, is amended by striking ‘‘January 1’’

2 and inserting ‘‘July 1’’.

3 (2) LIMITATION RELATING TO AGGREGATE

4 AMOUNT PAYABLE DURING CERTAIN PERIODS.—Sec5 tion 5304 of title 5, United States Code, is

6 amended—

7 (A) by redesignating subsection (i) as sub8 section (j); and

9 (B) by inserting after subsection (h) the

10 following:

11 ‘‘(i)(1) Notwithstanding any other provision of this

12 section, comparability payments may not be established or

13 adjusted under this section in a manner that would cause

14 the resulting estimated total amount payable under this

15 section during the period which—

16 ‘‘(A) begins on July 1, 1994, and ends on June

17 30, 1995, to exceed $1,800,000,000;

18 ‘‘(B) begins on July 1, 1995, and ends on June

19 30, 1996, to exceed $2,500,000,000;

20 ‘‘(C) begins on July 1, 1996, and ends on June

21 30, 1997, to exceed $3,300,000,000;

22 ‘‘(D) begins on July 1, 1997, and ends on June

23 30, 1998, to exceed $4,200,000,000; or

24 ‘‘(E) begins on July 1, 1998, and ends on Sep25 tember 30, 1998, to exceed $1,747,000,000.
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1 ‘‘(2) If necessary in order to achieve compliance with

2 any of the respective limitations under paragraph (1), the

3 President may, in carrying out subsection (d)(2), specify

4 levels of comparability payments less than the minimum

5 which would otherwise be required under subsection

6 (a)(3).

7 ‘‘(3) The pay agent shall develop and include in the

8 appropriate reports under subsection (d)(1) the methodol9 ogy for making any estimates under this subsection, and

10 any such estimate shall be made in accordance with the

11 methodology so included in the then most recent report.

12 ‘‘(4) Whenever any authority under this subsection

13 is exercised, the President shall so indicate in his next re14 port under subsection (d)(3), including specific informa15 tion as to how such authority was exercised and the rea16 sons why it was so exercised.’’.

17 (b) TEMPORARY CHANGE IN EFFECTIVE DATE OF

18 ANNUAL PAY ADJUSTMENTS UNDER SECTION 5303 OF

19 TITLE 5, UNITED STATES CODE.—Section 5303(a) of

20 title 5, United States Code (as amended by section

21 10003(b)(1)), is further amended by adding after para22 graph (2) of such section 5303(a) (as so amended) the

23 following:

24 ‘‘(3) Effective for the period beginning on January

25 1, 1995, and ending on December 31, 2003, paragraph
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1 (1) shall be deemed to be amended by striking ‘January

2 1’ and inserting ‘July 1’.’’.

3 (c) REPEAL OF THE PROVISION EXCLUDING SENIOR

4 EXECUTIVES FROM THE LIMITATION GENERALLY APPLI5 CABLE ON THE ACCUMULATION OF ANNUAL LEAVE.—

6 (1) IN GENERAL.—Section 6304(f) of title 5,

7 United States Code, is repealed, effective as of Jan8 uary 1, 1994.

9 (2) SAVINGS PROVISION.—

10 (A) APPLICABILITY.—This paragraph shall

11 apply with respect to an individual—

12 (i) who, as of December 31, 1993, has

13 more than 30 days of annual leave to such

14 individual’s credit (or more than 45 days,

15 if the individual would be subject to section

16 6304(b) of such title) which were accrued

17 in any position described in section 6304(f)

18 of title 5, United States Code (as in effect

19 on the date of the enactment of this Act);

20 and

21 (ii) only for so long as such individual

22 remains continuously employed in any such

23 position (disregarding any break in service

24 of 3 days or less).
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1 (B) STATEMENT OF THE RULE.—For pur2 poses of administering section 6304 of title 5,

3 United States Code, with respect to any individ4 ual to whom this paragraph applies—

5 (i) subsection (a) of such section shall

6 be deemed amended by striking ‘‘30’’ and

7 inserting the number corresponding to the

8 number of days determined for such indi9 vidual under subparagraph (A)(i); and

10 (ii) subsection (b) of such section shall

11 be deemed amended by striking ‘‘45’’ and

12 inserting the number corresponding to the

13 number of days determined for such indi14 vidual under subparagraph (A)(i).

15 (3) CONFORMING AMENDMENT.—Section

16 6304(a) of title 5, United States Code, is amended

17 by striking ‘‘(d), (e), (f), and (g)’’ and inserting ‘‘(d)

18 and (e)’’.

19 (d) NO CASH AWARDS BETWEEN FISCAL YEARS

20 1994 THROUGH 1998.—

21 (1) DEFINITION.—For the purpose of this sub22 section, the term ‘‘cash award’’ means any cash

23 award, performance award, rank, or other form of

24 recognition entitling the recipient to any monetary

25 payment under subchapter I of chapter 45 of title 5,
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1 United States Code, or section 5384, 5406, or 5407

2 of such title.

3 (2) RESTRICTION.—Notwithstanding any other

4 provision of law, no cash award may be awarded

5 during the period beginning on October 1, 1993, and

6 ending on September 30, 1998.

7 (e) REDUCTION OF FEDERAL WORKFORCE BY

8 150,000.—

9 (1) DEFINITION.—For the purpose of this sub10 section, the term ‘‘civilian employees in the executive

11 branch’’ means all civilian employees within the ex12 ecutive branch of the Government (other than in the

13 United States Postal Service or the Postal Rate

14 Commission).

15 (2) LIMITATIONS.—The average total number

16 of civilian employees in the executive branch may

17 not exceed—

18 (A) 2,095,200 in fiscal year 1994;

19 (B) 2,044,100 in fiscal year 1995;

20 (C) 2,010,100 in fiscal year 1996;

21 (D) 1,998,500 in fiscal year 1997; or

22 (E) 1,996,700 in fiscal year 1998.

23 (3) AVERAGING.—The average total number of

24 civilian employees in the executive branch in a fiscal

25 year shall, for purposes of this subsection, be the av-
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1 erage number in such fiscal year, as determined

2 under regulations prescribed under paragraph (5).

3 Any such average shall be determined on a ‘‘full4 time equivalent’’ basis.

5 (4) VOLUNTARY MEASURES.—To the extent

6 practicable, any reductions necessary to achieve com7 pliance with any limitation under paragraph (2)

8 shall be effected through attrition or other voluntary

9 measures.

10 (5) REGULATIONS.—The President shall pre11 scribe regulations to carry out this subsection.

12 (f) PAY-LIMITATION PROVISIONS MADE APPLICABLE

13 TO CERTAIN EMPLOYEES IN THE JUDICIAL BRANCH.—

14 The Director of the Administrative Office of the United

15 States Courts shall take such measures as may be nec16 essary to ensure that the purposes of subsections (a) and

17 (b) of section 10003 and subsections (a)(1) (if applicable)

18 and (b) of this section are carried out with respect to em19 ployees who are subject to the personnel management sys20 tem established by the Director under section 3 of Public

21 Law 101–474 (28 U.S.C. 602 note).
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1 SEC. 10005. APPLICATION OF MEDICARE PART B LIMITS TO

2 PHYSICIANS’ SERVICES FURNISHED TO FED3 ERAL EMPLOYEE HEALTH BENEFITS EN4 ROLLEES AGE 65 OR OLDER.

5 (a) IN GENERAL.—Section 8904(b) of title 5, United

6 States Code, is amended—

7 (1) in paragraph (1) by inserting ‘‘(A)’’ after

8 ‘‘(b)(1)’’ and by adding at the end the following:

9 ‘‘(B)(i) A plan, other than a prepayment plan de10 scribed in section 8903(4), may not provide benefits, in

11 the case of any retired enrolled individual who is age 65

12 or older and is not entitled to Medicare supplementary

13 medical insurance benefits under part B of title XVIII of

14 the Social Security Act (42 U.S.C. 1395j et seq.), to pay

15 a charge imposed for physicians’ services (as defined in

16 section 1848(j) of such Act, 42 U.S.C. 1395w–4(j)) which

17 are covered for purposes of benefit payments under this

18 chapter and under such part, to the extent that such

19 charge exceeds the fee schedule amount under section

20 1848(a) of such Act (42 U.S.C. 1395w–4(a)).

21 ‘‘(ii) Physicians and suppliers who have in force par22 ticipation agreements with the Secretary of Health and

23 Human Services consistent with section 1842(h)(1) of

24 such Act (42 U.S.C. 1395u(h)(1)), whereby the participat25 ing provider accepts Medicare benefits (including allowable

26 deductible and coinsurance amounts) as full payment for
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1 covered items and services shall accept equivalent benefit

2 and enrollee cost-sharing under this chapter as full pay3 ment for services described in clause (i). Physicians and

4 suppliers who are nonparticipating physicians and suppli5 ers for purposes of part B of title XVIII of such Act shall

6 not impose charges that exceed the limiting charge under

7 section 1848(g) of such Act (42 U.S.C. 1395w–4(g)) with

8 respect to services described in clause (i) provided to en9 rollees described in such clause. The Office of Personnel

10 Management shall notify a physician or supplier who is

11 found to have violated this clause and inform them of the

12 requirements of this clause and sanctions for such a viola13 tion. The Office of Personnel Management shall notify the

14 Secretary of Health and Human Services if a physician

15 or supplier is found to knowingly and willfully violate this

16 clause on a repeated basis and the Secretary of Health

17 and Human Services may invoke appropriate sanctions in

18 accordance with sections 1128A(a) and section 1848(g)(1)

19 of such Act (42 U.S.C. 1320a–7a(a), 1395w–4(g)(1)) and

20 applicable regulations.

21 ‘‘(C) If the Secretary of Health and Human Services

22 determines that a violation of this subsection warrants ex23 cluding a provider from participation for a specified period

24 under title XVIII of the Social Security Act, the Office
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1 shall enforce a corresponding exclusion of such provider

2 for purposes of this chapter.’’;

3 (2) in paragraph (3)(B)—

4 (A) by inserting ‘‘(i)’’ after ‘‘includes’’; and

5 (B) by inserting before the period at the

6 end the following: ‘‘, and (ii) the fee schedule

7 amounts and limiting charges for physicians’

8 services established under section 1848 of such

9 Act (42 U.S.C. 1395w–4) and the identity of

10 participating physicians and suppliers who have

11 in force agreements with such Secretary under

12 section 1842(h) of such Act (42 U.S.C.

13 1395u(h))’’; and

14 (3) by adding at the end the following:

15 ‘‘(4) The Director of the Office of Personnel Manage16 ment shall certify, before the first day of the fifth month

17 that begins before each contract year, that there is in ef18 fect an arrangement with the Secretary of Health and

19 Human Services under which, before the beginning of the

20 contract year—

21 ‘‘(A) physicians and suppliers (whether or not

22 participating) under the Medicare program will be

23 notified of the requirements of paragraph (1)(B);

24 ‘‘(B) enforcement procedures will be in place to

25 carry out such paragraph (including enforcement of
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1 protections against overcharging of beneficiaries);

2 and

3 ‘‘(C) Medicare program information described

4 in paragraph (3)(B)(ii) will be supplied to carriers

5 under paragraph (3)(A).’’.

6 (b) EFFECTIVE DATE.—The amendments made by

7 subsection (a) shall apply with respect to contract years

8 beginning on or after January 1, 1995.

9 SEC. 10006. TEMPORARY EXTENSION OF METHOD FOR DE10 TERMINING GOVERNMENT CONTRIBUTIONS

11 UNDER FEHBP IN THE ABSENCE OF A GOV12 ERNMENT-WIDE INDEMNITY BENEFIT PLAN.

13 (a) IN GENERAL.—Public Law 101–76 (5 U.S.C.

14 8906 note) is amended in subsection (a)(1) by striking

15 ‘‘1993’’ and inserting ‘‘1998’’.

16 (b) SENSE OF CONGRESS.—It is the sense of the

17 Congress that nothing in this section should be considered

18 to reflect any view on the appropriateness, merits, or tim19 ing, or any other aspect of any comprehensive health care

20 reform legislation.

21 Subtitle B—Postal Service

22 SEC. 10101. PAYMENTS TO BE MADE BY THE UNITED

23 STATES POSTAL SERVICE.

24 (a) RELATING TO CORRECTED CALCULATIONS FOR

25 PAST RETIREMENT COLAS.—In addition to any other
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1 payments required under section 8348(m) of title 5, Unit2 ed States Code, or any other provision of law, the United

3 States Postal Service shall pay into the Civil Service Re4 tirement and Disability Fund a total of $693,000,000, of

5 which—

6 (1) at least one-third shall be paid not later

7 than September 30, 1995;

8 (2) at least two-thirds shall be paid not later

9 than September 30, 1996; and

10 (3) any remaining balance shall be paid not

11 later than September 30, 1997.

12 (b) RELATING TO CORRECTED CALCULATIONS FOR

13 PAST HEALTH BENEFITS.—In addition to any other pay14 ments required under section 8906(g)(2) of title 5, United

15 States Code, or any other provision of law, the United

16 States Postal Service shall pay into the Employees Health

17 Benefits Fund a total of $348,000,000, of which—

18 (1) at least one-third shall be paid not later

19 than September 30, 1995;

20 (2) at least two-thirds shall be paid not later

21 than September 30, 1996; and

22 (3) any remaining balance shall be paid not

23 later than September 30, 1997.
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1 Subtitle C—Revenue Forgone

2 Reform

3 SEC. 10201. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This subtitle may be cited as the

5 ‘‘Revenue Forgone Reform Act’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this subtitle is as follows:

Sec. 10201. Short title; table of contents.

Sec. 10202. References.

Sec. 10203. Repeal of authorization of appropriations for mail sent at reduced

rates of postage.

Sec. 10204. Establishing reduced rates of postage.

Sec. 10205. Eligibility of certain mailings for reduced rates of postage.

Sec. 10206. Provisions relating to rates for books and certain other materials.

Sec. 10207. Sense of Congress.

Sec. 10208. Technical corrections.

8 SEC. 10202. REFERENCES.

9 Except as otherwise expressly provided, whenever in

10 this subtitle an amendment or repeal is expressed in terms

11 of an amendment to, or a repeal of, a section or other

12 provision, the reference shall be considered to be made to

13 a section or other provision of title 39, United States

14 Code.

15 SEC. 10203. REPEAL OF AUTHORIZATION OF APPROPRIA16 TIONS FOR MAIL SENT AT REDUCED RATES

17 OF POSTAGE.

18 (a) IN GENERAL.—Section 2401(c) is amended—

19 (1) in the first sentence—

20 (A) by striking ‘‘if sections’’ through ‘‘had

21 not been enacted’’ and inserting ‘‘if sections
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1 3217 and 3403–3406 had not been enacted’’;

2 and

3 (B) by striking ‘‘such sections and Acts.’’

4 and inserting ‘‘such sections.’’; and

5 (2) in the second sentence—

6 (A) by striking ‘‘(i)’’; and

7 (B) by striking ‘‘volume;’’ through ‘‘sched8 ules.’’ and inserting ‘‘volume.’’.

9 (b) APPLICABILITY.—The amendments made by sub10 section (a) shall apply with respect to appropriations for

11 fiscal years beginning after September 30, 1993.

12 SEC. 10204. ESTABLISHING REDUCED RATES OF POSTAGE.

13 (a) RATES.—

14 (1) IN GENERAL.—Section 3626(a) is amended

15 to read as follows:

16 ‘‘(a)(1) For the purpose of this subsection—

17 ‘‘(A) the term ‘costs attributable’, as used with

18 respect to a class of mail or kind of mailer, means

19 the direct and indirect postal costs attributable to

20 such class of mail or kind of mailer (excluding any

21 other costs of the Postal Service);

22 ‘‘(B) the term ‘regular-rate category’ means

23 any class of mail or kind of mailer, other than a

24 class or kind referred to in paragraph (2)(A) or sec25 tion 2401(c); and
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1 ‘‘(C) the term ‘institutional-costs contribution’,

2 as used with respect to a class of mail or kind of

3 mailer, means that portion of the estimated revenues

4 to the Postal Service from such class of mail or kind

5 of mailer which remains after subtracting an amount

6 equal to the estimated costs attributable to such

7 class of mail or kind of mailer.

8 ‘‘(2)(A) Except as provided in paragraph (3) or (4),

9 rates of postage for a class of mail or kind of mailer under

10 former section 4358, 4452(b), 4452(c), 4554(b), or

11 4554(c) of this title shall be established in a manner such

12 that the estimated revenues to be received by the Postal

13 Service from such class of mail or kind of mailer shall

14 be equal to the sum of—

15 ‘‘(i) the estimated costs attributable to such

16 class of mail or kind of mailer; and

17 ‘‘(ii) the product derived by multiplying the es18 timated costs referred to in clause (i) by the applica19 ble percentage under subparagraph (B).

20 ‘‘(B) The applicable percentage for any class of mail

21 or kind of mailer referred to in subparagraph (A) shall

22 be the product derived by multiplying—

23 ‘‘(i) the percentage which, for the most closely

24 corresponding regular-rate category, the institu25 tional-costs contribution for such category represents
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1 relative to the estimated costs attributable to such

2 category of mail, times

3 ‘‘(ii)(I) one-twelfth, for fiscal year 1994;

4 ‘‘(II) one-sixth, for fiscal year 1995;

5 ‘‘(III) one-fourth, for fiscal year 1996;

6 ‘‘(IV) one-third, for fiscal year 1997;

7 ‘‘(V) five-twelfths, for fiscal year 1998; and

8 ‘‘(VI) one-half, for any fiscal year after fiscal

9 year 1998.

10 ‘‘(C) For temporary special authority to permit the

11 timely implementation of the preceding provisions of this

12 paragraph, see section 3642.

13 ‘‘(D) For purposes of establishing rates of postage

14 under this subchapter for any of the classes of mail or

15 kinds of mailers referred to in subparagraph (A),

16 subclauses (I) through (V) of subparagraph (B)(ii) shall

17 be deemed amended by striking the fraction specified in

18 each such subclause and inserting ‘one-half’.

19 ‘‘(3) The rates for the advertising portion of any mail

20 matter under former section 4358(d) or 4358(e) of this

21 title shall be equal to the rates for the advertising portion

22 of the most closely corresponding regular-rate category of

23 mail, except that if the advertising portion does not exceed

24 10 percent of the issue of the publication involved, the ad-
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1 vertising portion shall be subject to the same rates as

2 apply to the nonadvertising portion.

3 ‘‘(4) The rates for any advertising under former sec4 tion 4358(f) of this title shall be equal to 75 percent of

5 the rates for advertising contained in the most closely cor6 responding regular-rate category of mail.’’.

7 (2) SPECIAL AUTHORITY.—Subchapter III of

8 chapter 36 is amended by adding at the end the fol9 lowing:

10 ‘‘§ 3642. Special authority relating to reduced-rate

11 categories of mail

12 ‘‘(a) In order to permit the timely implementation of

13 section 3626(a)(2), the Postal Service may establish tem14 porary rates of postage for any class of mail or kind of

15 mailer referred to in section 3626(a)(2)(A).

16 ‘‘(b) Any exercise of authority under this section shall

17 be in conformance with the requirements of section

18 3626(a), subject to the following:

19 ‘‘(1) All ‘attributable costs’ and ‘institutional20 costs contributions’ assumed shall be the same as

21 those which were assumed for purposes of the then

22 most recent proceedings under subchapter II pursu23 ant to which rates of postage for the class of mail

24 or kind of mailer involved were last adjusted.
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1 ‘‘(2) Any temporary rate established under this

2 section shall take effect upon such date as the

3 Postal Service may determine, except that—

4 ‘‘(A) such a rate may take effect only after

5 10 days’ notice in the Federal Register; and

6 ‘‘(B) no such rate may take effect after

7 September 30, 1998.

8 ‘‘(3) A temporary rate under this section may

9 remain in effect no longer than the last day of the

10 fiscal year in which it first takes effect.

11 ‘‘(4) Authority under this section may not be

12 exercised in a manner that would result in more

13 than 1 change taking effect under this section, dur14 ing the same fiscal year, in the rates of postage for

15 a particular class of mail or kind of mailer, except

16 as provided in paragraph (5).

17 ‘‘(5) Nothing in paragraph (4) shall prevent an

18 adjustment under this section in rates for a class of

19 mail or kind of mailer with respect to which any

20 rates took effect under this section earlier in the

21 same fiscal year if—

22 ‘‘(A) the rates established for such class of

23 mail or kind of mailer by the earlier adjustment

24 are superseded by new rates established under

25 subchapter II; and
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1 ‘‘(B) authority under this paragraph has

2 not previously been exercised with respect to

3 such class of mail or kind of mailer based on

4 the new rates referred to in subparagraph (A).

5 ‘‘(c) The Postal Service may prescribe any regula6 tions which may be necessary to carry out this section,

7 including provisions governing the coordination of adjust8 ments under this section with any other adjustments

9 under this title.’’.

10 (3) TECHNICAL AND CONFORMING AMEND11 MENTS.—

12 (A) SECTION 3626.—Section 3626(i) is re13 pealed.

14 (B) SECTION 3627.—

15 (i) IN GENERAL.—Section 3627 is

16 amended—

17 (I) by striking ‘‘sent at a free or

18 reduced rate under section 3217,

19 3403–3406, or 3626 of this title,’’

20 and inserting ‘‘sent free of postage

21 under section 3217 or 3403–3406’’;

22 and

23 (II) in the section heading by

24 striking ‘‘and reduced’’.
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1 (ii) TABLE OF CONTENTS.—The table

2 of contents for chapter 36 is amended—

3 (I) by striking the item relating

4 to section 3627 and inserting the

5 following:

‘‘3627. Adjusting free rates.’’;

6 and

7 (II) by inserting after the item

8 relating to section 3641 the following:

‘‘3642. Special authority relating to reduced-rate categories of mail.’’.

9 (b) AUTHORIZATION.—

10 (1) IN GENERAL.—Section 2401 is amended—

11 (A) by striking subsections (d) through (f);

12 (B) by redesignating subsections (g)

13 through (i) as subsections (e) through (g), re14 spectively;

15 (C) in subsection (f) (as so redesignated by

16 subparagraph (B)) by striking the second sen17 tence;

18 (D) in subsection (g) (as so redesignated

19 by subparagraph (B)) by striking ‘‘subsections

20 (b) and (d) of this section’’ and inserting ‘‘sub21 section (b)’’; and

22 (E) by inserting after subsection (c) the

23 following:
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1 ‘‘(d) As reimbursement to the Postal Service for

2 losses which it incurred as a result of insufficient amounts

3 appropriated under section 2401(c) for fiscal years 1991

4 through 1993, and to compensate for the additional reve5 nues it is estimated the Postal Service would have received

6 under the provisions of section 3626(a), for the period be7 ginning on October 1, 1993, and ending on September 30,

8 1998, if the fraction specified in subclause (VI) of section

9 3626(a)(2)(B)(ii) were applied with respect to such period

10 (instead of the respective fractions specified in subclauses

11 (I) through (V) thereof), there are authorized to be appro12 priated to the Postal Service $29,000,000 for each of

13 fiscal years 1994 through 2035.’’.

14 (2) RATEMAKING LIMITATIONS.—

15 (A) IN GENERAL.—Except as provided in

16 subparagraph (B), rates of postage may not be

17 established, under subchapter II of chapter 36

18 of title 39, United States Code, in a manner de19 signed to allow the United States Postal Service

20 to receive through revenues any portion of the

21 additional revenues (referred to in section

22 2401(d) of such title, as amended by paragraph

23 (1)(E)) for which amounts are authorized to be

24 appropriated under such section 2401(d).
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1 (B) EXCEPTION.—If Congress fails to ap2 propriate an amount authorized under section

3 2401(d) of title 39, United States Code (as

4 amended by paragraph (1)(E)), rates for the

5 various classes of mail may be adjusted in ac6 cordance with the provisions of subchapter II of

7 chapter 36 of such title (excluding section 3627

8 thereof) such that the resulting increase in rev9 enues will equal the amount that Congress so

10 failed to appropriate.

11 (c) APPLICABILITY.—

12 (1) RATES.—The amendments made by sub13 section (a) shall apply with respect to rates for mail

14 sent after September 30, 1993.

15 (2) AUTHORIZATION.—The amendments made

16 by subsection (b) shall apply with respect to appro17 priations for fiscal years beginning after September

18 30, 1993.

19 SEC. 10205. ELIGIBILITY OF CERTAIN MAILINGS FOR RE20 DUCED RATES OF POSTAGE.

21 (a) ADVERTISING.—Section 3626(j)(1) is amended—

22 (1) in subparagraph (B) by striking ‘‘or’’ after

23 the semicolon;

24 (2) in subparagraph (C) by striking the period

25 and inserting ‘‘; or’’; and
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1 (3) by adding at the end the following:

2 ‘‘(D) any product or service (other than any to

3 which subparagraph (A), (B), or (C) relates), if—

4 ‘‘(i) the sale of such product or the provid5 ing of such service is not substantially related

6 (aside from the need, on the part of the organi7 zation promoting such product or service, for

8 income or funds or the use it makes of the prof9 its derived) to the exercise or performance by

10 the organization of one or more of the purposes

11 constituting the basis for the organization’s au12 thorization to mail at such rates; or

13 ‘‘(ii) the mail matter involved is part of a

14 cooperative mailing (as defined under regula15 tions of the Postal Service) with any person or

16 organization not authorized to mail at the rates

17 for mail under former section 4452(b) or

18 4452(c) of this title;

19 except that—

20 ‘‘(I) any determination under clause (i)

21 that a product or service is not substantially re22 lated to a particular purpose shall be made

23 under regulations which shall be prescribed by

24 the Postal Service based on subsections (a) and
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1 (c) of section 513 of the Internal Revenue Code

2 of 1986; and

3 ‘‘(II) clause (i) shall not apply if the prod4 uct involved is a periodical publication described

5 in subsection (m)(2) (including a subscription

6 to receive any such publication).’’.

7 (b) PRODUCTS.—Section 3626 is amended by adding

8 at the end the following:

9 ‘‘(m)(1) In the administration of this section, the

10 rates for mail under former section 4452(b) or 4452(c)

11 of this title shall not apply to mail consisting of products,

12 unless such products—

13 ‘‘(A) were received by the organization as gifts

14 or contributions; or

15 ‘‘(B) are low cost articles (as defined by section

16 513(h)(2) of the Internal Revenue Code of 1986).

17 ‘‘(2) Paragraph (1) shall not apply with respect to

18 a periodical publication of a qualified nonprofit organiza19 tion.’’.

20 (c) CERTIFICATION; VERIFICATION.—Section

21 3626(j)(3) is amended—

22 (1) by striking ‘‘(3)’’ and inserting ‘‘(3)(A)’’;

23 and

24 (2) by adding at the end the following:
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1 ‘‘(B) The Postal Service shall establish procedures to

2 carry out this paragraph, including procedures for mailer

3 certification of compliance with the conditions specified in

4 paragraph (1)(D) or subsection (m), as applicable, and

5 verification of such compliance.’’.

6 (d) APPLICABILITY.—The amendments made by this

7 section shall apply with respect to mail sent, and the rates

8 for mail sent, after September 30, 1993.

9 SEC. 10206. PROVISIONS RELATING TO RATES FOR BOOKS

10 AND CERTAIN OTHER MATERIALS.

11 (a) IN GENERAL.—Section 3683(b) is amended to

12 read as follows:

13 ‘‘(b) The rates of postage under former section

14 4554(b)(1) of this title shall not be effective except with

15 respect to mailings which—

16 ‘‘(1) constitute materials specified in former

17 section 4554(b)(2) of this title; and

18 ‘‘(2) are sent between—

19 ‘‘(A) an institution, organization, or asso20 ciation listed in subparagraph (A) or (B) of

21 such former section 4554(b)(1) and any other

22 such institution, organization, or association;

23 ‘‘(B) an institution, organization, or asso24 ciation referred to in subparagraph (A) and any

25 individual (other than an individual having a fi-
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1 nancial interest in the sale, promotion, or dis2 tribution of the materials involved); or

3 ‘‘(C) an institution, organization, or asso4 ciation referred to in subparagraph (A) and a

5 qualified nonprofit organization (as defined in

6 former section 4452(d) of this title) that is not

7 such an institution, organization, or associa8 tion.’’.

9 (b) APPLICABILITY.—The amendment made by sub10 section (a) shall apply with respect to mail sent after Sep11 tember 30, 1993.

12 SEC. 10207. SENSE OF CONGRESS.

13 It is the sense of the Congress that any legislation,

14 enacted after September 30, 1994, which would have the

15 effect of expanding the classes of mail or kinds of mailers

16 eligible for reduced rates of postage should provide for suf17 ficient funding to ensure that neither any losses to the

18 United States Postal Service nor any increase in the rates

19 of postage for any of the other classes of mail or kinds

20 of mailers will result.

21 SEC. 10208. TECHNICAL CORRECTIONS.

22 (a) SECTION 410.—Section 410(b) is amended—

23 (1) in paragraph (8) by striking ‘‘and’’ after

24 the semicolon;
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1 (2) in the first paragraph (9) by striking

2 ‘‘Chapter’’ and inserting ‘‘chapter’’, and by striking

3 the period and inserting ‘‘; and’’; and

4 (3) by designating the second paragraph (9) as

5 paragraph (10).

6 (b) SECTION 3202.—Section 3202(a) is amended—

7 (1) in paragraph (3) by adding ‘‘and’’ after the

8 semicolon; and

9 (2) in paragraph (4) by striking ‘‘; and’’ and

10 inserting a period.

11 (c) SECTION 3210.—The provisions of section 318(3)

12 of Public Law 101–163 (103 Stat. 1068), which amended

13 section 3210 of title 39, United States Code, shall be

14 treated as if, as enacted, the reference in such provisions

15 to ‘‘subparagraph (c)’’ had instead read ‘‘subparagraph

16 (C)’’.

17 (d) SECTION 3601.—Section 3601(a) is amended by

18 striking ‘‘concent’’ and inserting ‘‘consent’’.

19 (e) SECTION 3625.—Section 3625(d) is amended by

20 striking ‘‘section 3268’’ and inserting ‘‘section 3628’’.

21 (f) SECTION 3626.—Section 3626 is amended by re22 designating the second subsection (k) as subsection (l).
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1 TITLE XI—COMMITTEE ON PUB2 LIC WORKS AND TRANSPOR3 TATION

4 SEC. 11001. AVIATION FEES FOR SERVICES.

5 (a) IN GENERAL.—Section 313(f) of the Federal

6 Aviation Act of 1958 (49 U.S.C. App. 1354(f)) is amended

7 to read as follows:

8 ‘‘(f) FEES FOR SERVICES.—

9 ‘‘(1) IMPOSITION AND COLLECTION.—The fol10 lowing fees are imposed and shall be collected for

11 services rendered:

12 ‘‘(A) AIRCRAFT REGISTRATION FEES.—

13 ‘‘(i) GENERAL RULE.—For registra14 tion of an aircraft, the fee to be collected

15 from the owner of the aircraft in each fis16 cal year beginning after September 30,

17 1993, shall be determined under the fol18 lowing table:

19

If the maximum certificated

gross weight of Amount of

the aircraft is: fee is:

Not over 3,500 pounds ............................................................ $40.00

Over 3,500 lbs. but not over 6,500 lbs. ................................... $175.00

Over 6,500 lbs. but not over 10,000 lbs. ................................. $500.00

Over 10,000 lbs. but not over 100,000 lbs. ............................. $1,000.00

Over 100,000 lbs. ..................................................................... $2,000.00.

20 If the ownership of the aircraft is also trans21 ferred in such fiscal year, the fee to be collected
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1 for registration of the aircraft in such fiscal

2 year under this subparagraph, as determined

3 from the table, shall be increased by such

4 amount as the Administrator shall determine so

5 that the average amount of the increase for all

6 aircraft collected under this sentence in such

7 fiscal year will be approximately $200.00.

8 ‘‘(ii) EXEMPTIONS.—No fee shall be col9 lected under this subparagraph for registration

10 of an aircraft in a fiscal year if the aircraft—

11 ‘‘(I) is owned or operated by an air

12 carrier exclusively to provide air transpor13 tation;

14 ‘‘(II) is owned by, or operated exclu15 sively by or for, the United States Govern16 ment;

17 ‘‘(III) is registered under a dealer’s

18 aircraft registration certificate issued

19 under section 505 of this Act;

20 ‘‘(IV) is not originally certificated

21 with an engine driven electrical system or

22 has not subsequently been certified by the

23 Administrator with such a system in24 stalled; or

25 ‘‘(V) is a balloon or glider.
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1 ‘‘(B) DESIGNATION AS AVIATION MEDICAL

2 EXAMINERS.—For designation of a person as

3 an aviation medical examiner, the fee to be col4 lected from such person in each fiscal year be5 ginning after September 30, 1993, shall be

6 $500.

7 ‘‘(C) ISSUANCE OF CERTIFICATES TO PI8 LOTS.—After September 30, 1993, the fee to be

9 collected for issuance or renewal of an airman’s

10 certificate to a pilot shall be $12. The fee shall

11 be collected from each pilot at least once every

12 3 fiscal years.

13 ‘‘(2) CONTINUATION OF FEE FOR PROCESSING

14 OF FORMS FOR MAJOR FUEL TANK ALTERATIONS.—

15 ‘‘(A) ESTABLISHMENT AND COLLEC16 TION.—The Administrator may establish such

17 fees as may be necessary to cover the costs as18 sociated with processing of forms for major re19 pairs and alterations of fuel tanks and fuel

20 systems of aircraft.

21 ‘‘(B) MAXIMUM AMOUNT.—The amount of

22 any fee under this subsection with respect to

23 processing of a form for a major repair or alter24 nation of a fuel tank or fuel system of an air25 craft may not exceed $7.50. Such maximum
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1 amount shall be adjusted annually by the Ad2 ministrator for changes in the Consumer Price

3 Index of All Urban Consumers published by the

4 Bureau of Labor Statistics of the Department

5 of Labor.

6 ‘‘(3) COLLECTION AND DEPOSIT IN TRUST

7 FUND.—The amounts of all fees established by or

8 under this subsection shall be collected by the Ad9 ministrator, or the Secretary of the Treasury for the

10 Administrator, and shall be deposited in the Airport

11 and Airway Trust Fund.’’.

12 (b) CONFORMING AMENDMENT.—The portion of the

13 table of contents contained in the first section of such Act

14 relating to section 313 is amended by striking

‘‘(f) Processing fees.’’.

15 and inserting

‘‘(f) Fees for services.’’.

16 SEC. 11002. RECREATIONAL USER FEES.

17 (a) IN GENERAL.—Section 210 of the Flood Control

18 Act of 1968 (16 U.S.C. 460d–3) is amended—

19 (1) by striking ‘‘SEC. 210. No entrance’’ and

20 inserting the following:

21 ‘‘SEC. 210. RECREATIONAL USER FEES.

22 ‘‘(a) PROHIBITION ON ADMISSIONS FEES.—No en23 trance’’;

24 (2) by striking the second sentence; and
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1 (3) by adding at the end the following new sub2 section:

3 ‘‘(b) FEES FOR USE OF DEVELOPED RECREATION

4 SITES AND FACILITIES.—

5 ‘‘(1) ESTABLISHMENT AND COLLECTION.—Not6 withstanding section 4(b) of the Land and Water

7 Conservation Fund Act of 1965 (16 U.S.C. 460l–

8 6a(b)), the Secretary of the Army is authorized, sub9 ject to paragraphs (2) and (3), to establish and col10 lect fees for the use of developed recreation sites and

11 facilities, including campsites, swimming beaches,

12 and boat launching ramps.

13 ‘‘(2) EXEMPTION OF CERTAIN FACILITIES.—

14 The Secretary shall not establish or collect fees

15 under this subsection for the use or provision of

16 drinking water, wayside exhibits, general purpose

17 roads, overlook sites, picnic tables, toilet facilities,

18 surface water areas, undeveloped or lightly developed

19 shoreland, or general visitor information.

20 ‘‘(3) PER VEHICLE LIMIT.—The fee under this

21 subsection for use of a site or facility (other than an

22 overnight camping site or facility or any other site

23 or facility at which a fee is charged for use of the

24 site or facility as of the date of the enactment of this

25 paragraph) for persons entering the site or facility
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1 by private, noncommercial vehicle shall not exceed

2 $3 per day per vehicle. Such maximum amount may

3 be adjusted annually by the Secretary for changes in

4 the Consumer Price Index of All Urban Consumers

5 published by the Bureau of Labor Statistics of the

6 Department of Labor.

7 ‘‘(4) DEPOSIT INTO TREASURY ACCOUNT.—All

8 fees collected under this subsection shall be depos9 ited into the Treasury account for the Corps of En10 gineers established by section 4(i) of the Land and

11 Water Conservation Fund Act of 1965 (16 U.S.C.

12 460l–6a(i)).’’.

13 (b) CONFORMING AMENDMENT FOR CAMPSITES.—

14 Section 4(b) of the Land and Water Conservation Fund

15 Act of 1965 (16 U.S.C. 460l–6a(b)) is amended by strik16 ing the next to the last sentence.

17 TITLE XII—COMMITTEE ON

18 VETERANS AFFAIRS

19 SEC. 12001. SHORT TITLE.

20 This title may be cited as the ‘‘Veterans Reconcili21 ation Act of 1993’’.
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1 SEC. 12002. EXTENSION OF AUTHORITY TO REQUIRE THAT

2 CERTAIN VETERANS AGREE TO MAKE

3 COPAYMENTS IN EXCHANGE FOR RECEIVING

4 HEALTH-CARE BENEFITS.

5 (a) HOSPITAL AND MEDICAL CARE.—Section

6 8013(e) of the Omnibus Budget Reconciliation Act of

7 1990 (Public Law 101–508; 38 U.S.C. 1710 note) is

8 amended—

9 (1) by striking out ‘‘September 30, 1992’’ in

10 the first sentence and inserting in lieu thereof ‘‘Sep11 tember 30, 1998’’; and

12 (2) by striking out the second sentence.

13 (b) OUTPATIENT MEDICATIONS.—Section 1722A(c)

14 of title 38, United States Code, is amended—

15 (1) by striking out ‘‘September 30, 1992’’ in

16 the first sentence and inserting in lieu thereof ‘‘Sep17 tember 30, 1998’’; and

18 (2) by striking out the second sentence.

19 SEC. 12003. EXTENSION OF AUTHORITY FOR MEDICAL CARE

20 COST RECOVERY.

21 (a) IN GENERAL.—Section 1729(a) of title 38, Unit22 ed States Code, is amended—

23 (1) in paragraph (1), by striking out ‘‘non24 service-connected’’; and

25 (2) in paragraph (2)—
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1 (A) by inserting ‘‘disability and, during the

2 period before October 1, 1998, to a service-con3 nected’’ after ‘‘non-service-connected’’ in the

4 matter preceding subparagraph (A); and

5 (B) by striking out ‘‘before August 1,

6 1994,’’ in subparagraph (E) and inserting in

7 lieu thereof ‘‘before October 1, 1998,’’.

8 (b) EFFECTIVE DATE.—The amendments made by

9 subsection (a) shall apply with respect to care and services

10 furnished under chapter 17 of title 38, United States

11 Code, after September 30, 1993.

12 SEC. 12004. EXTENSION OF AUTHORITY FOR CERTAIN IN13 COME VERIFICATION PROVISIONS UNDER

14 THE OMNIBUS BUDGET RECONCILIATION

15 ACT OF 1990.

16 (a) AUTHORITY FOR SECRETARY OF VETERANS AF17 FAIRS TO OBTAIN INFORMATION.—Section 5317(g) of

18 title 38, United States Code, is amended by striking out

19 ‘‘September 30, 1997’’ and inserting in lieu thereof ‘‘Sep20 tember 30, 1998’’.

21 (b) AUTHORITY FOR SECRETARY OF TREASURY TO

22 PROVIDE INFORMATION.—Subparagraph (D) of section

23 6103(l)(7) of the Internal Revenue Code of 1986 is

24 amended by striking out ‘‘September 30, 1997’’ in the last
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1 sentence and inserting in lieu thereof ‘‘September 30,

2 1998’’.

3 SEC. 12005. EXTENSION OF LIMITATION ON PENSION FOR

4 CERTAIN RECIPIENTS OF MEDICAID-COV5 ERED NURSING HOME CARE.

6 Section 5503(f)(7) of title 38, United States Code,

7 is amended by striking out ‘‘September 30, 1997’’ and in8 serting in lieu thereof ‘‘September 30, 1998’’.

9 SEC. 12006. DENIAL OF FISCAL YEAR 1994 COST-OF-LIVING

10 ADJUSTMENT FOR CERTAIN DIC RECIPIENTS.

11 During fiscal year 1994, no increase may be provided

12 in the rates of dependency and indemnity compensation

13 in effect under section 1311(a)(3) of title 38, United

14 States Code.

15 SEC. 12007. EXTENSION OF PROCEDURES APPLICABLE TO

16 LIQUIDATION SALES ON DEFAULTED HOME

17 LOANS GUARANTEED BY THE DEPARTMENT

18 OF VETERANS AFFAIRS.

19 (a) INCLUSION OF LOSSES.—Section 3732(c) of title

20 38, United States Code, is amended—

21 (1) in paragraph (1)(C), by striking out ‘‘re22 sale,’’ and inserting in lieu thereof ‘‘resale (including

23 losses sustained on the resale of the property),’’; and
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1 (2) in paragraph (11), by striking out ‘‘Decem2 ber 31, 1992’’ and inserting in lieu thereof ‘‘Septem3 ber 30, 1998’’.

4 (b) EFFECTIVE DATE.—The amendment made by

5 subsection (a)(1) shall apply to all liquidation sales occur6 ring on or after October 1, 1993.

7 SEC. 12008. INCREASE IN HOME LOAN FEES.

8 Paragraph (6) of section 3729(a) of title 38, United

9 States Code, is amended to read as follows:

10 ‘‘(6) With respect to a loan closed after September

11 30, 1993, and before October 1, 1998, for which a fee

12 is collected under paragraph (1), the amount of such fee,

13 as computed under paragraph (2), shall be increased by

14 0.75 percent of the total loan amount other than in the

15 case of a loan described in subparagraph (A), (D)(ii), or

16 (E) of paragraph (2).’’.

17 SEC. 12009. REDUCTION OF FISCAL YEAR 1994 COST-OF-LIV18 ING ADJUSTMENT FOR MONTGOMERY GI

19 BILL BENEFITS.

20 (a) BENEFITS PAYABLE UNDER CHAPTER 30.—Sec21 tion 3015(g)(1) of title 38, United States Code, is amend22 ed by inserting ‘‘less one percentage point’’ after ‘‘June

23 30, 1993,’’.

24 (b) BENEFITS PAYABLE UNDER SELECTED RE25 SERVE PROGRAM.—Section 2131(b)(2)(A) of title 10,
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1 United States Code, is amended by inserting ‘‘less one per2 centage point’’ after ‘‘June 30, 1993,’’.

3 (c) TECHNICAL AMENDMENTS.—(1) Section 301(c)

4 of Public Law 102–568 (106 Stat. 4326) is amended by

5 striking out ‘‘Section 3015(f)’’ and inserting in lieu there6 of ‘‘Section 3015(g) (as redesignated by section

7 307(a)(1))’’.

8 (2) Section 307(a) of such Public Law (106 Stat.

9 4328) is amended by striking out ‘‘(as amended by section

10 301)’’.

11 (3) The amendments made by paragraphs (1) and (2)

12 shall apply as if included in the enactment of Public Law

13 102–568.

14 SEC. 12010. LIMITATION ON CHILDREN ELIGIBLE FOR SUR15 VIVORS’ AND DEPENDENTS’ EDUCATIONAL

16 ASSISTANCE.

17 (a) REVISION IN DEFINITION OF CHILDREN ELIGI18 BLE.—Section 3501(a)(2) of title 38, United States Code,

19 is amended by inserting ‘‘, but does not include an individ20 ual who is not the natural or legally adopted child of the

21 parent from whom eligibility under this chapter is de22 rived’’ before the period at the end.

23 (b) EFFECTIVE DATE.—The amendment made by

24 subsection (a) does not apply with respect to any individ25 ual who, before October 1, 1993, files an original applica-
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1 tion for educational assistance under chapter 35 of title

2 38, United States Code.

3 TITLE XIII—COMMITTEE ON

4 WAYS AND MEANS—SAVINGS

5 Subtitle A—Old-Age, Survivors, and

6 Disability Insurance Program

TABLE OF CONTENTS OF SUBTITLE

Sec. 13001. Explicit requirements for maintenance of telephone access to local

offices of the Social Security Administration.

Sec. 13002. Expansion of State option to exclude service of election officials or

election workers from coverage.

Sec. 13003. Use of social security numbers by States and local governments

and Federal district courts for jury selection purposes.

Sec. 13004. Authorization for all States to extend coverage to State and local

policemen and firemen under existing coverage agreements.

Sec. 13005. Limited exemption for Canadian ministers from certain self-employment tax liability.

Sec. 13006. Exclusion of totalization benefits from the application of the windfall elimination provision.

Sec. 13007. Exclusion of military reservists from application of the government

pension offset and windfall elimination provisions.

Sec. 13008. Repeal of the facility-of-payment provision.

Sec. 13009. Maximum family benefits in guarantee cases.

Sec. 13010. Authorization for disclosure by the Secretary of Health and

Human Services of information for purposes of public or private epidemiological and similar research.

Sec. 13011. Improvement and clarification of provisions prohibiting misuse of

symbols, emblems, or names in reference to social security programs and agencies.

Sec. 13012. Increased penalties for unauthorized disclosure of social security

information.

Sec. 13013. Simplification of employment taxes on domestic services.

Sec. 13014. Increase in authorized period for extension of time to file annual

earnings report.

Sec. 13015. Allocations to Federal Disability Insurance Trust Fund.

Sec. 13016. Extension of disability insurance program demonstration project

authority.

Sec. 13017. Technical and clerical amendments.

Sec. 13018. Cross-matching of social security account number information and

employer identification number information maintained by the

Department of Agriculture.

Sec. 13019. Prohibition of misuse of Department of the Treasury names, symbols, etc.

Sec. 13020. Availability and use of death information under the old-age, survivors, and disability insurance program.
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1 SEC. 13001. EXPLICIT REQUIREMENTS FOR MAINTENANCE

2 OF TELEPHONE ACCESS TO LOCAL OFFICES

3 OF THE SOCIAL SECURITY ADMINISTRATION.

4 (a) MAINTENANCE OF SERVICE TO LOCAL OF5 FICES.—

6 (1) IN GENERAL.—Section 5110(a) of the Om7 nibus Budget Reconciliation Act of 1990 (104 Stat.

8 1388-272) is amended by adding at the end the fol9 lowing new sentence: ‘‘In carrying out the require10 ments of the preceding sentence, the Secretary shall

11 reestablish and maintain in service at least the same

12 number of telephone lines to each such local office

13 as was in place as of such date, including telephone

14 sets for connections to such lines.’’.

15 (2) EFFECTIVE DATE.—The Secretary of

16 Health and Human Services shall ensure that the

17 requirements of the amendment made by paragraph

18 (1) are carried out no later than 90 days after the

19 date of the enactment of this Act.

20 (3) GAO REPORT.—The Comptroller General of

21 the United States shall make an independent deter22 mination of the number of telephone lines to each

23 local office of the Social Security Administration

24 which are in place as of 90 days after the enactment

25 of this Act and shall report his findings to the Com26 mittee on Ways and Means of the House of Rep-
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1 resentatives and the Committee on Finance of the

2 Senate no later than 150 days after the date of the

3 enactment of this Act.

4 (b) MAINTENANCE OF TOLL-FREE TELEPHONE

5 NUMBER SERVICE.—The Secretary of Health and Human

6 Services shall ensure that toll-free telephone service pro7 vided by the Social Security Administration is maintained

8 at a level which is at least equal to that in effect on the

9 date of the enactment of this Act.

10 SEC. 13002. EXPANSION OF STATE OPTION TO EXCLUDE

11 SERVICE OF ELECTION OFFICIALS OR ELEC12 TION WORKERS FROM COVERAGE.

13 (a) LIMITATION ON MANDATORY COVERAGE OF

14 STATE ELECTION OFFICIALS AND ELECTION WORKERS

15 WITHOUT STATE RETIREMENT SYSTEM.—

16 (1) AMENDMENT TO SOCIAL SECURITY ACT.—

17 Section 210(a)(7)(F)(iv) of the Social Security Act

18 (42 U.S.C. 410(a)(7)(F)(iv)) (as amended by section

19 11332(a) of the Omnibus Budget Reconciliation Act

20 of 1990) is amended by striking ‘‘$100’’ and insert21 ing ‘‘$1,000 with respect to service performed dur22 ing 1994, and the adjusted amount determined

23 under section 218(c)(8)(B) for any subsequent year

24 with respect to service performed during such subse25 quent year’’.
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1 (2) AMENDMENT TO FICA.—Section

2 3121(b)(7)(F)(iv) of the Internal Revenue Code of

3 1986 (as amended by section 11332(b) of the Omni4 bus Budget Reconciliation Act of 1990) is amended

5 by striking ‘‘$100’’ and inserting ‘‘$1,000 with re6 spect to service performed during 1994, and the

7 adjusted amount determined under section

8 218(c)(8)(B) of the Social Security Act for any sub9 sequent year with respect to service performed dur10 ing such subsequent year’’.

11 (b) CONFORMING AMENDMENTS RELATING TO MED12 ICARE QUALIFIED GOVERNMENT EMPLOYMENT.—

13 (1) AMENDMENT TO SOCIAL SECURITY ACT.—

14 Section 210(p)(2)(E) of the Social Security Act (42

15 U.S.C. 410(p)(2)(E)) is amended by striking

16 ‘‘$100’’ and inserting ‘‘$1,000 with respect to serv17 ice performed during 1994, and the adjusted amount

18 determined under section 218(c)(8)(B) for any sub19 sequent year with respect to service performed dur20 ing such subsequent year’’.

21 (2) AMENDMENT TO FICA.—Section

22 3121(u)(2)(B)(ii)(V) of the Internal Revenue Code

23 of 1986 is amended by striking ‘‘$100’’ and insert24 ing ‘‘$1,000 with respect to service performed dur25 ing 1994, and the adjusted amount determined
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1 under section 218(c)(8)(B) of the Social Security

2 Act for any subsequent year with respect to service

3 performed during such subsequent year’’.

4 (c) AUTHORITY FOR STATES TO MODIFY COVERAGE

5 AGREEMENTS WITH RESPECT TO ELECTION OFFICIALS

6 AND ELECTION WORKERS.—Section 218(c)(8) of the So7 cial Security Act (42 U.S.C. 418(c)(8)) is amended—

8 (1) by striking ‘‘on or after January 1, 1968,’’

9 and inserting ‘‘at any time’’;

10 (2) by striking ‘‘$100’’ and inserting ‘‘$1,000

11 with respect to service performed during 1994, and

12 the adjusted amount determined under subpara13 graph (B) for any subsequent year with respect to

14 service performed during such subsequent year’’;

15 and

16 (3) by striking the last sentence and inserting

17 the following new sentence: ‘‘Any modification of an

18 agreement pursuant to this paragraph shall be effec19 tive with respect to services performed in and after

20 the calendar year in which the modification is mailed

21 or delivered by other means to the Secretary.’’.

22 (d) INDEXATION OF EXEMPT AMOUNT.—Section

23 218(c)(8) of such Act (as amended by subsection (c)) is

24 further amended—

25 (1) by inserting ‘‘(A)’’ after ‘‘(8)’’; and
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1 (2) by adding at the end the following new sub2 paragraph:

3 ‘‘(B) For each year after 1994, the Secretary shall

4 adjust the amount referred to in subparagraph (A) at the

5 same time and in the same manner as is provided under

6 section 215(a)(1)(B)(ii) with respect to the amounts re7 ferred to in section 215(a)(1)(B)(i), except that—

8 ‘‘(i) for purposes of this subparagraph, 1992

9 shall be substituted for the calendar year referred to

10 in section 215(a)(1)(B)(ii)(II), and

11 ‘‘(ii) such amount as so adjusted, if not a mul12 tiple of $100, shall be rounded to the next higher

13 multiple of $100 where such amount is a multiple of

14 $50 and to the nearest multiple of $100 in any other

15 case.

16 The Secretary shall determine and publish in the Federal

17 Register each adjusted amount determined under this sub18 paragraph not later than November 1 preceding the year

19 for which the adjustment is made.’’.

20 (e) EFFECTIVE DATE.—The amendments made by

21 subsections (a), (b), and (c) shall apply with respect to

22 service performed on or after January 1, 1994.
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1 SEC. 13003. USE OF SOCIAL SECURITY NUMBERS BY STATES

2 AND LOCAL GOVERNMENTS AND FEDERAL

3 DISTRICT COURTS FOR JURY SELECTION

4 PURPOSES.

5 (a) IN GENERAL.—Section 205(c)(2) of the Social

6 Security Act (42 U.S.C. 405(c)(2)) is amended—

7 (1) in subparagraph (B)(i), by striking ‘‘(E)’’ in

8 the matter preceding subclause (I) and inserting

9 ‘‘(F)’’;

10 (2) by redesignating subparagraphs (E) and

11 (F) as subparagraphs (F) and (G), respectively; and

12 (3) by inserting after subparagraph (D) the fol13 lowing:

14 ‘‘(E)(i) It is the policy of the United States that—

15 ‘‘(I) any State (or any political subdivision of a

16 State) may utilize the social security account num17 bers issued by the Secretary for the additional pur18 poses described in clause (ii) if such numbers have

19 been collected and are otherwise utilized by such

20 State (or political subdivision) in accordance with

21 applicable law, and

22 ‘‘(II) any district court of the United States

23 may use, for such additional purposes, any such so24 cial security account numbers which have been so

25 collected and are so utilized by any State.
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1 ‘‘(ii) The additional purposes described in this clause

2 are the following:

3 ‘‘(I) identifying duplicate names of individuals

4 on master lists used for jury selection purposes, and

5 ‘‘(II) identifying on such master lists those indi6 viduals who are ineligible to serve on a jury by rea7 son of their conviction of a felony.

8 ‘‘(iii) To the extent that any provision of Federal law

9 enacted before the date of the enactment of this subpara10 graph is inconsistent with the policy set forth in clause

11 (i), such provision shall, on and after that date, be null,

12 void, and of no effect.

13 ‘‘(iv) For purposes of this subparagraph, the term

14 ‘State’ has the meaning such term has in subparagraph

15 (D).’’.

16 (b) EFFECTIVE DATE.—The amendments made by

17 subsection (a) shall take effect on the date of the enact18 ment of this Act.

19 SEC. 13004. AUTHORIZATION FOR ALL STATES TO EXTEND

20 COVERAGE TO STATE AND LOCAL POLICE21 MEN AND FIREMEN UNDER EXISTING COV22 ERAGE AGREEMENTS.

23 (a) IN GENERAL.—Section 218(l) of the Social Secu24 rity Act (42 U.S.C. 418(l)) is amended—
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1 (1) in paragraph (1), by striking ‘‘(1)’’ after

2 ‘‘(l)’’, and by striking ‘‘the State of’’ and all that fol3 lows through ‘‘prior to the date of enactment of this

4 subsection’’ and inserting ‘‘a State entered into pur5 suant to this section’’; and

6 (2) by striking paragraph (2).

7 (b) CONFORMING AMENDMENT.—Section

8 218(d)(8)(D) of such Act (42 U.S.C. 418(d)(8)(D)) is

9 amended by striking ‘‘agreements with the States named

10 in’’ and inserting ‘‘State agreements modified as provided

11 in’’.

12 (c) EFFECTIVE DATE.—The amendments made by

13 this section shall apply with respect to modifications filed

14 by States after the date of the enactment of this Act.

15 SEC. 13005. LIMITED EXEMPTION FOR CANADIAN MIN16 ISTERS FROM CERTAIN SELF-EMPLOYMENT

17 TAX LIABILITY.

18 (a) IN GENERAL.—Notwithstanding any other provi19 sion of law, if—

20 (1) an individual performed services described

21 in section 1402(c)(4) of the Internal Revenue Code

22 of 1986 which are subject to tax under section 1401

23 of such Code,

24 (2) such services were performed in Canada at

25 a time when no agreement between the United
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1 States and Canada pursuant to section 233 of the

2 Social Security Act was in effect, and

3 (3) such individual was required to pay con4 tributions on the earnings from such services under

5 the social insurance system of Canada,

6 then such individual may file a certificate under this sec7 tion in such form and manner, and with such official, as

8 may be prescribed in regulations issued under chapter 2

9 of such Code. Upon the filing of such certificate, notwith10 standing any judgment which has been entered to the con11 trary, such individual shall be exempt from payment of

12 such tax with respect to services described in paragraphs

13 (1) and (2) and from any penalties or interest for failure

14 to pay such tax or to file a self-employment tax return

15 as required under section 6017 of such Code.

16 (b) PERIOD FOR FILING.—A certificate referred to

17 in subsection (a) may be filed only during the 180-day

18 period commencing with the date on which the regulations

19 referred to in subsection (a) are issued.

20 (c) TAXABLE YEARS AFFECTED BY CERTIFICATE.—

21 A certificate referred to in subsection (a) shall be effective

22 for taxable years ending after December 31, 1978, and

23 before January 1, 1985.

24 (d) RESTRICTION ON CREDITING OF EXEMPT SELF25 EMPLOYMENT INCOME.—In any case in which an individ-
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1 ual is exempt under this section from paying a tax im2 posed under section 1401 of the Internal Revenue Code

3 of 1986, any income on which such tax would have been

4 imposed but for such exemption shall not constitute self5 employment income under section 211(b) of the Social Se6 curity Act (42 U.S.C. 411(b)), and, if such individual’s

7 primary insurance amount has been determined under sec8 tion 215 of such Act (42 U.S.C. 415), notwithstanding

9 section 215(f)(1) of such Act, the Secretary of Health and

10 Human Services shall recompute such primary insurance

11 amount so as to take into account the provisions of this

12 subsection. The recomputation under this subsection shall

13 be effective with respect to benefits for months following

14 approval of the certificate of exemption.

15 SEC. 13006. EXCLUSION OF TOTALIZATION BENEFITS FROM

16 THE APPLICATION OF THE WINDFALL ELIMI17 NATION PROVISION.

18 (a) IN GENERAL.—Section 215(a)(7) of the Social

19 Security Act (42 U.S.C. 415(a)(7)) is amended—

20 (1) in subparagraph (A), by striking ‘‘but ex21 cluding’’ and all that follows through ‘‘1937’’ and

22 inserting ‘‘but excluding (I) a payment under the

23 Railroad Retirement Act of 1974 or 1937, and (II)

24 a payment by a social security system of a foreign

25 country based on an agreement concluded between
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1 the United States and such foreign country pursuant

2 to section 233’’; and

3 (2) in subparagraph (E), by inserting after ‘‘in

4 the case of an individual’’ the following: ‘‘whose eli5 gibility for old-age or disability insurance benefits is

6 based on an agreement concluded pursuant to sec7 tion 233 or an individual’’.

8 (b) CONFORMING AMENDMENT RELATING TO BENE9 FITS UNDER 1939 ACT.—Section 215(d)(3) of such Act

10 (42 U.S.C. 415(d)(3)) is amended by striking ‘‘but exclud11 ing’’ and all that follows through ‘‘1937’’ and inserting

12 ‘‘but excluding (I) a payment under the Railroad Retire13 ment Act of 1974 or 1937, and (II) a payment by a social

14 security system of a foreign country based on an agree15 ment concluded between the United States and such for16 eign country pursuant to section 233’’.

17 (c) EFFECTIVE DATE.—The amendments made by

18 this section shall apply (notwithstanding section 215(f)(1)

19 of the Social Security Act (42 U.S.C. 415(f)(1))) with re20 spect to benefits payable for months after October 1993.
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1 SEC. 13007. EXCLUSION OF MILITARY RESERVISTS FROM

2 APPLICATION OF THE GOVERNMENT PEN3 SION OFFSET AND WINDFALL ELIMINATION

4 PROVISIONS.

5 (a) EXCLUSION FROM GOVERNMENT PENSION OFF6 SET PROVISIONS.—Subsections (b)(4), (c)(2), (e)(7),

7 (f)(2), and (g)(4) of section 202 of the Social Security Act

8 (42 U.S.C. 402 (b)(4), (c)(2), (e)(7), (f)(2), and (g)(4))

9 are each amended—

10 (1) in subparagraph (A)(ii), by striking ‘‘unless

11 subparagraph (B) applies.’’;

12 (2) in subparagraph (A), by striking ‘‘The’’ in

13 the matter following clause (ii) and inserting ‘‘unless

14 subparagraph (B) applies. The’’; and

15 (3) in subparagraph (B), by redesignating the

16 existing matter as clause (ii), and by inserting before

17 such clause (ii) (as so redesignated) the following:

18 ‘‘(B)(i) Subparagraph (A)(i) shall not apply with re19 spect to monthly periodic benefits based wholly on service

20 as a member of a uniformed service (as defined in section

21 210(m)).’’.

22 (b) EXCLUSION FROM WINDFALL ELIMINATION

23 PROVISIONS.—Section 215(a)(7)(A) of such Act (as

24 amended by section 13006(a) of this Act) and section

25 215(d)(3) of such Act (as amended by section 13006(b)

26 of this Act) are each further amended—
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1 (1) by striking ‘‘and’’ before ‘‘(II)’’; and

2 (2) by striking ‘‘section 233’’ and inserting

3 ‘‘section 233, and (III) a payment based wholly on

4 service as a member of a uniformed service (as de5 fined in section 210(m))’’.

6 (c) EFFECTIVE DATE.—The amendments made by

7 this section shall apply (notwithstanding section 215(f) of

8 the Social Security Act) with respect to benefits payable

9 for months after October 1993.

10 SEC. 13008. REPEAL OF THE FACILITY-OF-PAYMENT PROVI11 SION.

12 (a) REPEAL OF RULE PRECLUDING REDISTRIBUTION

13 UNDER FAMILY MAXIMUM.—Section 203(i) of the Social

14 Security Act (42 U.S.C. 403(i)) is repealed.

15 (b) COORDINATION UNDER FAMILY MAXIMUM OF

16 REDUCTION IN BENEFICIARY’S AUXILIARY BENEFITS

17 WITH SUSPENSION OF AUXILIARY BENEFITS OF OTHER

18 BENEFICIARY UNDER EARNINGS TEST.—Section

19 203(a)(4) of such Act (42 U.S.C. 403(a)(4)) is amended

20 by striking ‘‘section 222(b). Whenever’’ and inserting the

21 following: ‘‘section 222(b). Notwithstanding the preceding

22 sentence, any reduction under this subsection in the case

23 of an individual who is entitled to a benefit under sub24 section (b), (c), (d), (e), (f), (g), or (h) of section 202 for
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1 any month on the basis of the same wages and self-em2 ployment income as another person—

3 ‘‘(A) who also is entitled to a benefit under sub4 section (b), (c), (d), (e), (f), (g), or (h) of section

5 202 for such month,

6 ‘‘(B) who does not live in the same household

7 as such individual, and

8 ‘‘(C) whose benefit for such month is suspended

9 (in whole or in part) pursuant to subsection (h)(3)

10 of this section,

11 shall be made before the suspension under subsection

12 (h)(3). Whenever’’.

13 (c) CONFORMING AMENDMENT APPLYING EARNINGS

14 REPORTING REQUIREMENT DESPITE SUSPENSION OF

15 BENEFITS.—The third sentence of section 203(h)(1)(A)

16 of such Act (42 U.S.C. 403(h)(1)(A)) is amended by strik17 ing ‘‘Such report need not be made’’ and all that follows

18 through ‘‘The Secretary may grant’’ and inserting the fol19 lowing: ‘‘Such report need not be made for any taxable

20 year—

21 ‘‘(i) beginning with or after the month in which

22 such individual attained age 70, or

23 ‘‘(ii) if benefit payments for all months (in such

24 taxable year) in which such individual is under age

25 70 have been suspended under the provisions of the
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1 first sentence of paragraph (3) of this subsection,

2 unless—

3 ‘‘(I) such individual is entitled to benefits

4 under subsection (b), (c), (d), (e), (f), (g), or

5 (h) of section 202,

6 ‘‘(II) such benefits are reduced under sub7 section (a) of this section for any month in such

8 taxable year, and

9 ‘‘(III) in any such month there is another

10 person who also is entitled to benefits under

11 subsection (b), (c), (d), (e), (f), (g), or (h) of

12 section 202 on the basis of the same wages and

13 self-employment income and who does not live

14 in the same household as such individual.

15 The Secretary may grant’’.

16 (d) CONFORMING AMENDMENT DELETING SPECIAL

17 INCOME TAX TREATMENT OF BENEFITS NO LONGER RE18 QUIRED BY REASON OF REPEAL.—Section 86(d)(1) of the

19 Internal Revenue Code of 1986 (relating to income tax

20 on social security benefits) is amended by striking the last

21 sentence.

22 (e) EFFECTIVE DATES.—

23 (1) The amendments made by subsections (a),

24 (b), and (c) shall apply with respect to benefits pay25 able for months after December 1994.
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1 (2) The amendment made by subsection (d)

2 shall apply with respect to benefits received after

3 December 31, 1994, in taxable years ending after

4 such date.

5 SEC. 13009. MAXIMUM FAMILY BENEFITS IN GUARANTEE

6 CASES.

7 (a) IN GENERAL.—Section 203(a) of the Social Secu8 rity Act (42 U.S.C. 403(a)) is amended by adding at the

9 end the following new paragraph:

10 ‘‘(10)(A) Subject to subparagraphs (B) and (C)—

11 ‘‘(i) the total monthly benefits to which bene12 ficiaries may be entitled under sections 202 and 223

13 for a month on the basis of the wages and self14 employment income of an individual whose primary

15 insurance amount is computed under section

16 215(a)(2)(B)(i) shall equal the total monthly bene17 fits which were authorized by this section with re18 spect to such individual’s primary insurance amount

19 for the last month of his prior entitlement to disabil20 ity insurance benefits, increased for this purpose by

21 the general benefit increases and other increases

22 under section 215(i) that would have applied to such

23 total monthly benefits had the individual remained

24 entitled to disability insurance benefits until the

25 month in which he became entitled to old-age insur-
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1 ance benefits or reentitled to disability insurance

2 benefits or died, and

3 ‘‘(ii) the total monthly benefits to which bene4 ficiaries may be entitled under sections 202 and 223

5 for a month on the basis of the wages and self6 employment income of an individual whose primary

7 insurance amount is computed under section

8 215(a)(2)(C) shall equal the total monthly benefits

9 which were authorized by this section with respect to

10 such individual’s primary insurance amount for the

11 last month of his prior entitlement to disability in12 surance benefits.

13 ‘‘(B) In any case in which—

14 ‘‘(i) the total monthly benefits with respect to

15 such individual’s primary insurance amount for the

16 last month of his prior entitlement to disability in17 surance benefits was computed under paragraph (6),

18 and

19 ‘‘(ii) the individual’s primary insurance amount

20 is computed under subparagraph (B)(i) or (C) of

21 section 215(a)(2) by reason of the individual’s enti22 tlement to old-age insurance benefits or death,

23 the total monthly benefits shall equal the total monthly

24 benefits that would have been authorized with respect to

25 the primary insurance amount for the last month of his
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1 prior entitlement to disability insurance benefits if such

2 total monthly benefits had been computed without regard

3 to paragraph (6).

4 ‘‘(C) This paragraph shall apply before the applica5 tion of paragraph (3)(A), and before the application of

6 section 203(a)(1) of this Act as in effect in December

7 1978.’’.

8 (b) CONFORMING AMENDMENT.—Section 203(a)(8)

9 of such Act (42 U.S.C. 403(a)(8)) is amended by striking

10 ‘‘Subject to paragraph (7),’’ and inserting ‘‘Subject to

11 paragraph (7) and except as otherwise provided in para12 graph (10)(C),’’.

13 (c) EFFECTIVE DATE.—The amendments made by

14 this section shall apply for the purpose of determining the

15 total monthly benefits to which beneficiaries may be enti16 tled under sections 202 and 223 of the Social Security

17 Act based on the wages and self-employment income of

18 an individual who—

19 (1) becomes entitled to an old-age insurance

20 benefit under section 202(a) of such Act,

21 (2) becomes reentitled to a disability insurance

22 benefit under section 223 of such Act, or

23 (3) dies,

24 after October 1993.
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1 SEC. 13010. AUTHORIZATION FOR DISCLOSURE BY THE SEC2 RETARY OF HEALTH AND HUMAN SERVICES

3 OF INFORMATION FOR PURPOSES OF PUBLIC

4 OR PRIVATE EPIDEMIOLOGICAL AND SIMI5 LAR RESEARCH.

6 (a) IN GENERAL.—Section 1106 of the Social Secu7 rity Act (42 U.S.C. 1306) is amended—

8 (1) by redesignating subsections (d) and (e) as

9 subsections (e) and (f), respectively;

10 (2) in subsection (f) (as so redesignated), by

11 striking ‘‘subsection (d)’’ and inserting ‘‘subsection

12 (e)’’; and

13 (3) by inserting after subsection (c) the follow14 ing new subsection:

15 ‘‘(d) Notwithstanding any other provision of this sec16 tion, in any case in which—

17 ‘‘(1) information regarding whether an individ18 ual is shown on the records of the Secretary as

19 being alive or deceased is requested from the Sec20 retary for purposes of epidemiological or similar re21 search which the Secretary finds may reasonably be

22 expected to contribute to a national health interest,

23 and

24 ‘‘(2) the requester agrees to reimburse the Sec25 retary for providing such information and to comply

26 with limitations on safeguarding and rerelease or
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1 redisclosure of such information as may be specified

2 by the Secretary,

3 the Secretary shall comply with such request, except to

4 the extent that compliance with such request would con5 stitute a violation of the terms of any contract entered

6 into under section 205(r).’’.

7 (b) AVAILABILITY OF INFORMATION RETURNS RE8 GARDING WAGES PAID EMPLOYEES.—Section 6103(l)(5)

9 of the Internal Revenue Code of 1986 (relating to disclo10 sure of returns and return information to the Department

11 of Health and Human Services for purposes other than

12 tax administration) is amended—

13 (1) by striking ‘‘for the purpose of’’ and insert14 ing ‘‘for the purpose of—’’;

15 (2) by striking ‘‘carrying out, in accordance

16 with an agreement’’ and inserting the following:

17 ‘‘(A) carrying out, in accordance with an

18 agreement’’;

19 (3) by striking ‘‘program.’’ and inserting ‘‘pro20 gram; or’’; and

21 (4) by adding at the end the following new sub22 paragraph:

23 ‘‘(B) providing information regarding the

24 mortality status of individuals for epidemiolog-
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1 ical and similar research in accordance with

2 section 1106(d) of the Social Security Act.’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall apply with respect to requests for infor5 mation made after the date of the enactment of this Act.

6 SEC. 13011. IMPROVEMENT AND CLARIFICATION OF PROVI7 SIONS PROHIBITING MISUSE OF SYMBOLS,

8 EMBLEMS, OR NAMES IN REFERENCE TO SO9 CIAL SECURITY PROGRAMS AND AGENCIES.

10 (a) PROHIBITION OF UNAUTHORIZED REPRODUC11 TION, REPRINTING, OR DISTRIBUTION FOR FEE OF CER12 TAIN OFFICIAL PUBLICATIONS.—Section 1140(a) of the

13 Social Security Act (42 U.S.C. 1320b–10(a)) is

14 amended—

15 (1) by redesignating paragraphs (1) and (2) as

16 subparagraphs (A) and (B), respectively;

17 (2) by inserting ‘‘(1)’’ after ‘‘(a)’’; and

18 (3) by adding at the end the following new

19 paragraph:

20 ‘‘(2) No person may, for a fee, reproduce, reprint,

21 or distribute any item consisting of a form, application,

22 or other publication of the Social Security Administration

23 unless such person has obtained specific, written author24 ization for such activity in accordance with regulations

25 which the Secretary shall prescribe.’’.
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1 (b) ADDITION TO PROHIBITED WORDS, LETTERS,

2 SYMBOLS, AND EMBLEMS.—Paragraph (1) of section

3 1140(a) of such Act (as redesignated by subsection (a))

4 is further amended—

5 (1) in subparagraph (A) (as redesignated), by

6 striking ‘‘Administration’, the letters ‘SSA’ or

7 ‘HCFA’,’’ and inserting ‘‘Administration’, ‘Depart8 ment of Health and Human Services’, ‘Health and

9 Human Services’, ‘Supplemental Security Income

10 Program’, or ‘Medicaid’, the letters ‘SSA’, ‘HCFA’,

11 ‘DHHS’, ‘HHS’, or ‘SSI’,’’; and

12 (2) in subparagraph (B) (as redesignated), by

13 striking ‘‘Social Security Administration’’ each place

14 it appears and inserting ‘‘Social Security Adminis15 tration, Health Care Financing Administration, or

16 Department of Health and Human Services’’, and

17 by striking ‘‘or of the Health Care Financing Ad18 ministration’’.

19 (c) EXEMPTION FOR USE OF WORDS, LETTERS,

20 SYMBOLS, AND EMBLEMS OF STATE AND LOCAL GOV21 ERNMENT AGENCIES BY SUCH AGENCIES.—Paragraph

22 (1) of section 1140(a) of such Act (as redesignated by sub23 section (a)) is further amended by adding at the end the

24 following new sentence: ‘‘The preceding provisions of this

25 subsection shall not apply with respect to the use by any
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1 agency or instrumentality of a State or political subdivi2 sion of a State of any words or letters which identify an

3 agency or instrumentality of such State or of a political

4 subdivision of such State or the use by any such agency

5 or instrumentality of any symbol or emblem of an agency

6 or instrumentality of such State or a political subdivision

7 of such State.’’.

8 (d) INCLUSION OF REASONABLENESS STANDARD.—

9 Section 1140(a)(1) of such Act (as amended by the pre10 ceding provisions of this section) is further amended, in

11 the matter following subparagraph (B) (as redesignated),

12 by striking ‘‘convey’’ and inserting ‘‘convey, or in a man13 ner which reasonably could be interpreted or construed as

14 conveying,’’.

15 (e) INEFFECTIVENESS OF DISCLAIMERS.—Sub16 section (a) of section 1140 of such Act (as amended by

17 the preceding provisions of this section) is further amend18 ed by adding at the end the following new paragraph:

19 ‘‘(3) Any determination of whether the use of one or

20 more words, letters, symbols, or emblems (or any combina21 tion or variation thereof) in connection with an item de22 scribed in paragraph (1) or the reproduction, reprinting,

23 or distribution of an item described in paragraph (2) is

24 a violation of this subsection shall be made without regard

25 to any inclusion in such item (or any so reproduced, re-
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1 printed, or distributed copy thereof) of a disclaimer of af2 filiation with the United States Government or any par3 ticular agency or instrumentality thereof.’’.

4 (f) VIOLATIONS WITH RESPECT TO INDIVIDUAL

5 ITEMS.—Section 1140(b)(1) of such Act (42 U.S.C.

6 1320b–10(b)(1)) is amended by adding at the end the fol7 lowing new sentence: ‘‘In the case of any items referred

8 to in subsection (a)(1) consisting of pieces of mail, each

9 such piece of mail which contains one or more words, let10 ters, symbols, or emblems in violation of subsection (a)

11 shall represent a separate violation. In the case of any

12 item referred to in subsection (a)(2), the reproduction, re13 printing, or distribution of such item shall be treated as

14 a separate violation with respect to each copy thereof so

15 reproduced, reprinted, or distributed.’’.

16 (g) ELIMINATION OF CAP ON AGGREGATE LIABILITY

17 AMOUNT.—

18 (1) REPEAL.—Paragraph (2) of section 1140(b)

19 of such Act (42 U.S.C. 1320b–10(b)(2)) is repealed.

20 (2) CONFORMING AMENDMENTS.—Section

21 1140(b) of such Act is further amended—

22 (A) by striking ‘‘(1) Subject to paragraph

23 (2), the’’ and inserting ‘‘The’’;
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1 (B) by redesignating subparagraphs (A)

2 and (B) as paragraphs (1) and (2), respectively;

3 and

4 (C) in paragraph (1) (as redesignated), by

5 striking ‘‘subparagraph (B)’’ and inserting

6 ‘‘paragraph (2)’’.

7 (h) REMOVAL OF FORMAL DECLINATION REQUIRE8 MENT.—Section 1140(c)(1) of such Act (42 U.S.C.

9 1320b–10(c)(1)) is amended by inserting ‘‘and the first

10 sentence of subsection (c)’’ after ‘‘and (i)’’.

11 (i) PENALTIES RELATING TO SOCIAL SECURITY AD12 MINISTRATION DEPOSITED IN OASI TRUST FUND.—Sec13 tion 1140(c)(2) of such Act (42 U.S.C. 1320b–10(c)(2))

14 is amended in the second sentence by striking ‘‘United

15 States.’’ and inserting ‘‘United States, except that, to the

16 extent that such amounts are recovered under this section

17 as penalties imposed for misuse of words, letters, symbols,

18 or emblems relating to the Social Security Administration,

19 such amounts shall be deposited into the Federal Old-Age

20 and Survivor’s Insurance Trust Fund.’’.

21 (j) ENFORCEMENT.—Section 1140 of such Act (42

22 U.S.C. 1320b–10) is amended by adding at the end the

23 following new subsection:
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1 ‘‘(d) The preceding provisions of this section shall be

2 enforced through the Office of Inspector General of the

3 Department of Health and Human Services.’’.

4 (k) ANNUAL REPORTS.—Section 1140 of such Act

5 (as amended by the preceding provisions of this section)

6 is further amended by adding at the end the following new

7 subsection:

8 ‘‘(e) The Secretary shall include in the annual report

9 submitted pursuant to section 704 a report on the oper10 ation of this section during the year covered by such an11 nual report. Such report shall specify—

12 ‘‘(1) the number of complaints of violations of

13 this section received by the Social Security Adminis14 tration during the year,

15 ‘‘(2) the number of cases in which a notice of

16 violation of this section was sent by the Social Secu17 rity Administration during the year requesting that

18 an individual cease activities in violation of this

19 section,

20 ‘‘(3) the number of complaints of violations of

21 this section referred by the Social Security Adminis22 tration to the Inspector General in the Department

23 of Health and Human Services during the year,
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1 ‘‘(4) the number of investigations of violations

2 of this section undertaken by the Inspector General

3 during the year,

4 ‘‘(5) the number of cases in which a demand

5 letter was sent during the year assessing a civil

6 money penalty under this section,

7 ‘‘(6) the total amount of civil money penalties

8 assessed under this section during the year,

9 ‘‘(7) the number of requests for hearings filed

10 during the year pursuant to subsection (c)(1) of this

11 section and section 1128A(c)(2),

12 ‘‘(8) the disposition during such year of hear13 ings filed pursuant to sections 1140(c)(1) and

14 1128A(c)(2), and

15 ‘‘(9) the total amount of civil money penalties

16 under this section deposited into the Federal Old17 Age and Survivors Insurance Trust Fund during the

18 year.’’.

19 (l) EFFECTIVE DATE.—The amendments made by

20 this section shall apply with respect to violations occurring

21 after the date of the enactment of this Act.
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1 SEC. 13012. INCREASED PENALTIES FOR UNAUTHORIZED

2 DISCLOSURE OF SOCIAL SECURITY INFORMA3 TION.

4 (a) UNAUTHORIZED DISCLOSURE.—Section 1106(a)

5 of the Social Security Act (42 U.S.C. 1306(a)) is

6 amended—

7 (1) by striking ‘‘misdemeanor’’ and inserting

8 ‘‘felony’’;

9 (2) by striking ‘‘$1,000’’ and inserting

10 ‘‘$10,000 for each occurrence of a violation’’; and

11 (3) by striking ‘‘one year’’ and inserting ‘‘5

12 years’’.

13 (b) UNAUTHORIZED DISCLOSURE BY FRAUD.—Sec14 tion 1107(b) of such Act (42 U.S.C. 1307(b)) is

15 amended—

16 (1) by inserting ‘‘social security account num17 ber,’’ after ‘‘information as to the’’;

18 (2) by striking ‘‘misdemeanor’’ and inserting

19 ‘‘felony’’;

20 (3) by striking ‘‘$1,000’’ and inserting

21 ‘‘$10,000 for each occurrence of a violation’’; and

22 (4) by striking ‘‘one year’’ and inserting ‘‘5

23 years’’.

24 (c) EFFECTIVE DATE.—The amendments made by

25 this section shall apply to violations occurring on or after

26 the date of the enactment of this Act.
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1 SEC. 13013. SIMPLIFICATION OF EMPLOYMENT TAXES ON

2 DOMESTIC SERVICES.

3 (a) COORDINATION OF COLLECTION OF DOMESTIC

4 SERVICE EMPLOYMENT WITH COLLECTION OF INCOME

5 TAXES.—

6 (1) IN GENERAL.—Chapter 25 of the Internal

7 Revenue Code of 1986 (relating to general provi8 sions relating to employment taxes) is amended by

9 adding at the end thereof the following new section:

10 ‘‘SEC. 3510. COORDINATION OF COLLECTION OF DOMESTIC

11 SERVICE EMPLOYMENT TAXES WITH COLLEC12 TION OF INCOME TAXES.

13 ‘‘(a) GENERAL RULE.—Except as otherwise provided

14 in this section—

15 ‘‘(1) returns with respect to domestic service

16 employment taxes shall be made on a calendar year

17 basis,

18 ‘‘(2) any such return for any calendar year

19 shall be filed on or before the 15th day of the fourth

20 month following the close of the employer’s taxable

21 year which begins in such calendar year, and

22 ‘‘(3) no requirement to make deposits (or to

23 pay installments under section 6157) shall apply

24 with respect to such taxes.

25 ‘‘(b) DOMESTIC SERVICE EMPLOYMENT TAXES SUB26 JECT TO ESTIMATED TAX PROVISIONS.—
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1 ‘‘(1) IN GENERAL.—Solely for purposes of sec2 tion 6654, domestic service employment taxes im3 posed with respect to any calendar year shall be

4 treated as a tax imposed by chapter 2 for the tax5 able year of the employer which begins in such cal6 endar year.

7 ‘‘(2) ANNUALIZATION.—Under regulations pre8 scribed by the Secretary, appropriate adjustments

9 shall be made in the application of section

10 6654(d)(2) in respect of the amount treated as tax

11 under paragraph (1).

12 ‘‘(3) TRANSITIONAL RULE.—For purposes of

13 applying section 6654 to a taxable year beginning in

14 1993, the amount referred to in clause (ii) of section

15 6654(d)(1)(B) shall be increased by 90 percent of

16 the amount treated as tax under paragraph (1) for

17 such taxable year.

18 ‘‘(c) DOMESTIC SERVICE EMPLOYMENT TAXES.—

19 For purposes of this section, the term ‘domestic service

20 employment taxes’ means—

21 ‘‘(1) any taxes imposed by chapter 21 or 23 on

22 remuneration paid for domestic service in a private

23 home of the employer, and
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1 ‘‘(2) any amount withheld from such remunera2 tion pursuant to an agreement under section

3 3402(p).

4 For purposes of this subsection, the term ‘domestic service

5 in a private home of the employer’ does not include service

6 described in section 3121(g)(5).

7 ‘‘(d) EXCEPTION WHERE EMPLOYER LIABLE FOR

8 OTHER EMPLOYMENT TAXES.—To the extent provided in

9 regulations prescribed by the Secretary, this section shall

10 not apply to any employer for any calendar year if such

11 employer is liable for any tax under this subtitle with re12 spect to remuneration for services other than domestic

13 service in a private home of the employer.

14 ‘‘(e) GENERAL REGULATORY AUTHORITY.—The Sec15 retary shall prescribe such regulations as may be nec16 essary or appropriate to carry out the purposes of this

17 section. Such regulations may treat domestic service em18 ployment taxes as taxes imposed by chapter 1 for purposes

19 of coordinating the assessment and collection of such em20 ployment taxes with the assessment and collection of do21 mestic employers’ income taxes.

22 ‘‘(f) AUTHORITY TO ENTER INTO AGREEMENTS TO

23 COLLECT STATE UNEMPLOYMENT TAXES.—

24 ‘‘(1) IN GENERAL.—The Secretary is hereby

25 authorized to enter into an agreement with any
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1 State to collect, as the agent of such State, such

2 State’s unemployment taxes imposed on remunera3 tion paid for domestic service in a private home of

4 the employer. Any taxes to be collected by the Sec5 retary pursuant to such an agreement shall be treat6 ed as domestic service employment taxes for pur7 poses of this section.

8 ‘‘(2) TRANSFERS TO STATE ACCOUNT.—Any

9 amount collected under an agreement referred to in

10 paragraph (1) shall be transferred by the Secretary

11 to the account of the State in the Unemployment

12 Trust Fund.

13 ‘‘(3) SUBTITLE F MADE APPLICABLE.—For

14 purposes of subtitle F, any amount required to be

15 collected under an agreement under paragraph (1)

16 shall be treated as a tax imposed by chapter 23.

17 ‘‘(4) STATE.—For purposes of this subsection,

18 the term ‘State’ has the meaning given such term by

19 section 3306(j)(1).’’

20 (2) CLERICAL AMENDMENT.—The table of sec21 tions for chapter 25 of such Code is amended by

22 adding at the end thereof the following:

‘‘Sec. 3510. Coordination of collection of domestic service employment taxes with collection of income taxes.’’

23 (3) EFFECTIVE DATE.—The amendments made

24 by this subsection shall apply to remuneration paid
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1 in calendar years beginning after December 31,

2 1993.

3 (4) EXPANDED INFORMATION TO EMPLOY4 ERS.—The Secretary of the Treasury or his delegate

5 shall prepare and make available information on the

6 Federal tax obligations of employers with respect to

7 employees performing domestic service in a private

8 home of the employer. Such information shall also

9 include a statement that such employers may have

10 obligations with respect to such employees under

11 State laws relating to unemployment insurance and

12 workers compensation.

13 (b) THRESHOLD REQUIREMENT FOR SOCIAL SECU14 RITY TAXES.—

15 (1) AMENDMENTS OF INTERNAL REVENUE

16 CODE.—

17 (A) Subparagraph (B) of section

18 3121(a)(7) of the Internal Revenue Code of

19 1986 (defining wages) is amended to read as

20 follows:

21 ‘‘(B) cash remuneration paid by an em22 ployer in any calendar year to an employee for

23 domestic service in a private home of the em24 ployer (within the meaning of subsection (y)), if

25 the cash remuneration paid in such year by the
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1 employer to the employee for such service is less

2 than the applicable dollar threshold (as defined

3 in subsection (y)) for such year;’’.

4 (B) Section 3121 of such Code is amended

5 by adding at the end thereof the following new

6 subsection:

7 ‘‘(y) DOMESTIC SERVICE IN A PRIVATE HOME.—For

8 purposes of subsection (a)(7)(B)—

9 ‘‘(1) EXCLUSION FOR CERTAIN FARM SERV10 ICE.—The term ‘domestic service in a private home

11 of the employer’ does not include service described

12 in subsection (g)(5).

13 ‘‘(2) APPLICABLE DOLLAR THRESHOLD.—The

14 term ‘applicable dollar threshold’ means $1,800. In

15 the case of calendar years after 1994, the Secretary

16 of Health and Human Services shall adjust such

17 $1,800 amount at the same time and in the same

18 manner as under section 215(a)(1)(B)(ii) of the So19 cial Security Act with respect to the amounts re20 ferred to in section 215(a)(1)(B)(i) of such Act, ex21 cept that, for purposes of this subparagraph, 1992

22 shall be substituted for the calendar year referred to

23 in section 215(a)(1)(B)(ii)(II) of such Act. If the

24 amount determined under the preceding sentence is
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1 not a multiple of $50, such amount shall be rounded

2 to the nearest multiple of $50.’’

3 (C) The second sentence of section 3102(a)

4 of such Code is amended—

5 (i) by striking ‘‘calendar quarter’’

6 each place it appears and inserting ‘‘cal7 endar year’’, and

8 (ii) by striking ‘‘$50’’ and inserting

9 ‘‘the applicable dollar threshold (as defined

10 in section 3121(y)(2)) for such year’’.

11 (2) AMENDMENT OF SOCIAL SECURITY ACT.—

12 Subparagraph (B) of section 209(a)(6) of the Social

13 Security Act (42 U.S.C. 409(a)(6)(B)) is amended

14 to read as follows:

15 ‘‘(B) Cash remuneration paid by an employer in

16 any calendar year to an employee for domestic serv17 ice in a private home of the employer, if the cash re18 muneration paid in such year by the employer to the

19 employee for such service is less than the applicable

20 dollar threshold (as defined in section 3121(y)(2) of

21 the Internal Revenue Code of 1986) for such year.

22 As used in this subparagraph, the term ‘domestic

23 service in a private home of the employer’ does not

24 include service described in section 210(f)(5).’’
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1 (3) EFFECTIVE DATE.—The amendments made

2 by this subsection shall apply to remuneration paid

3 in calendar years beginning after December 31,

4 1993.

5 (4) RELIEF FROM LIABILITY FOR CERTAIN

6 UNDERPAYMENT AMOUNTS.—

7 (A) IN GENERAL.—On and after the date

8 of the enactment of this Act, an underpayment

9 to which this paragraph applies (and any pen10 alty, addition to tax, and interest with respect

11 to such underpayment) shall not be assessed

12 (or, if assessed, shall not be collected).

13 (B) UNDERPAYMENTS TO WHICH PARA14 GRAPH APPLIES.—This paragraph shall apply

15 to an underpayment to the extent of the

16 amount thereof which would not be an

17 underpayment if—

18 (i) the amendments made by para19 graph (1) had applied to all calendar years

20 after 1950 and before 1994, and

21 (ii) the applicable dollar threshold for

22 any such calendar year were the amount

23 determined under the following table:

In the case of The applicable

calendar year: dollar threshold is:

1951, 1952, or 1953 ..................................................... $ 200

1954, 1955, 1956, or 1957 ........................................... 250

1958, 1959, 1960, 1961, or 1962 ................................. 300
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1963, 1964, 1965, or 1966 ........................................... 350

1967, 1968, 1969 .......................................................... 400

1970 .............................................................................. 450

1971, 1972, or 1973 ..................................................... 500

1974 or 1975 ................................................................ 600

1976 .............................................................................. 650

1977 .............................................................................. 700

1978 .............................................................................. 750

1979 .............................................................................. 800

1980 .............................................................................. 850

1981 .............................................................................. 900

1982 .............................................................................. 1,000

1983 .............................................................................. 1,100

1984 .............................................................................. 1,200

1985 .............................................................................. 1,250

1986 .............................................................................. 1,300

1987 .............................................................................. 1,350

1988 .............................................................................. 1,400

1989 .............................................................................. 1,500

1990 .............................................................................. 1,550

1991 .............................................................................. 1,600

1992 .............................................................................. 1,700

1993 .............................................................................. 1,750

1 SEC. 13014. INCREASE IN AUTHORIZED PERIOD FOR EXTEN2 SION OF TIME TO FILE ANNUAL EARNINGS

3 REPORT.

4 (a) IN GENERAL.—Section 203(h)(1)(A) of the Social

5 Security Act (42 U.S.C. 403(h)(1)(A)) is amended in the

6 last sentence by striking ‘‘three months’’ and inserting

7 ‘‘four months’’.

8 (b) EFFECTIVE DATE.—The amendment made by

9 subsection (a) shall apply with respect to reports of earn10 ings for taxable years ending on or after December 31,

11 1993.
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1 SEC. 13015. ALLOCATIONS TO FEDERAL DISABILITY INSUR2 ANCE TRUST FUND.

3 (a) ALLOCATION WITH RESPECT TO WAGES.—Sec4 tion 201(b)(1) of the Social Security Act (42 U.S.C.

5 401(b)(1)) is amended to read as follows:

6 ‘‘(1) 1.75 percent of the wages (as defined in

7 section 3121 of the Internal Revenue Code of 1986)

8 paid after December 31, 1992, and reported to the

9 Secretary of the Treasury or his delegate pursuant

10 to subtitle F of the Internal Revenue Code of 1986,

11 which wages shall be certified by the Secretary of

12 Health and Human Services on the basis of the

13 records of wages established and maintained by such

14 Secretary in accordance with such reports; and’’.

15 (b) ALLOCATION WITH RESPECT TO SELF-EMPLOY16 MENT INCOME.—Section 201(b)(2) of such Act (42 U.S.C.

17 401(b)(2)) is amended to read as follows:

18 ‘‘(2) 1.75 percent of the self-employment in19 come (as defined in section 1402 of the Internal

20 Revenue Code of 1986) reported to the Secretary of

21 the Treasury or his delegate on tax returns under

22 subtitle F of the Internal Revenue Code of 1986 for

23 any taxable year beginning after December 31,

24 1992, which self-employment income shall be cer25 tified by the Secretary of Health and Human Serv26 ices on the basis of the records of self-employment
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1 income established and maintained by the Secretary

2 of Health and Human Services in accordance with

3 such returns.’’.

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall apply with respect to wages paid after

6 December 31, 1992, and self-employment income for tax7 able years beginning after such date.

8 (d) STUDY ON RISING COSTS OF DISABILITY BENE9 FITS.—

10 (1) IN GENERAL.—As soon as practicable after

11 the date of the enactment of this Act, the Secretary

12 of Health and Human Services shall conduct a com13 prehensive study of the reasons for rising costs pay14 able from the Federal Disability Insurance Trust

15 Fund.

16 (2) MATTERS TO BE INCLUDED IN STUDY.—In

17 conducting the study under this subsection, the Sec18 retary shall—

19 (A) determine the relative importance of

20 the following factors in increasing the costs

21 payable from the Trust Fund:

22 (i) increased numbers of applications

23 for benefits;

24 (ii) higher rates of benefit allowances;

25 and
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1 (iii) decreased rates of benefit termi2 nations; and

3 (B) identify, to the extent possible, under4 lying social, economic, demographic, pro5 grammatic, and other trends responsible for

6 changes in disability benefit applications, allow7 ances, and terminations.

8 (3) REPORT.—Not later than December 31,

9 1995, the Secretary shall transmit a report to the

10 Committee on Ways and Means of the House of

11 Representatives and the Committee on Finance of

12 the Senate setting forth the results of the study con13 ducted under this subsection, together with any rec14 ommendations for legislative changes which the

15 Secretary determines appropriate.

16 SEC. 13016. EXTENSION OF DISABILITY INSURANCE PRO17 GRAM DEMONSTRATION PROJECT AUTHOR18 ITY.

19 (a) IN GENERAL.—Section 505 of the Social Security

20 Disability Amendments of 1980 (Public Law 96–265), as

21 amended by section 12101 of the Consolidated Omnibus

22 Budget Reconciliation Act of 1985 (Public Law 99–272),

23 section 10103 of the Omnibus Budget Reconciliation Act

24 of 1989 (Public Law 101–239), and section 5120 of the
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1 Omnibus Budget Reconciliation Act of 1990 (Public Law

2 101–508) is further amended—

3 (1) in paragraph (3) of subsection (a), by strik4 ing ‘‘June 10, 1993’’ and inserting ‘‘June 10,

5 1996’’;

6 (2) in paragraph (4) of subsection (a), by strik7 ing ‘‘1992’’ and inserting ‘‘1995’’; and

8 (3) in subsection (c), by striking ‘‘October 1,

9 1993’’ and inserting ‘‘June 9, 1996’’.

10 (b) EFFECTIVE DATE.—The amendments made by

11 this section shall take effect on the date of the enactment

12 of this Act.

13 SEC. 13017. TECHNICAL AND CLERICAL AMENDMENTS.

14 (a) AMENDMENTS TO TITLE II OF THE SOCIAL SE15 CURITY ACT.—

16 (1) Section 201(a) of the Social Security Act

17 (42 U.S.C. 401(a)) is amended, in the matter follow18 ing clause (4), by striking ‘‘and and’’ and inserting

19 ‘‘and’’.

20 (2) Section 202(d)(8)(D)(ii) of such Act (42

21 U.S.C. 402(d)(8)(D)(ii)) is amended by adding a pe22 riod at the end and by adjusting the left hand

23 margination thereof so as to align with section

24 202(d)(8)(D)(i) of such Act.
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1 (3) Section 202(q)(1)(A) of such Act (42

2 U.S.C. 402(q)(1)(A)) is amended by striking the

3 dash at the end.

4 (4) Section 202(q)(9) of such Act (42 U.S.C.

5 402(q)(9)) is amended, in the matter preceding sub6 paragraph (A), by striking ‘‘parargaph’’ and insert7 ing ‘‘paragraph’’.

8 (5) Section 202(t)(4)(D) of such Act (42

9 U.S.C. 402(t)(4)(D)) is amended by inserting ‘‘if

10 the’’ before ‘‘Secretary’’ the second and third places

11 it appears.

12 (6) Clauses (i) and (ii) of section 203(f)(5)(C)

13 of such Act (42 U.S.C. 403(f)(5)(C)) are amended

14 by adjusting the left-hand margination thereof so as

15 to align with clauses (i) and (ii) of section

16 203(f)(5)(B) of such Act.

17 (7) Paragraph (3)(A) and paragraph (3)(B) of

18 section 205(b) of such Act (42 U.S.C. 405(b)) are

19 amended by adjusting the left-hand margination

20 thereof so as to align with the matter following

21 section 205(b)(2)(C) of such Act.

22 (8) Section 205(c)(2)(B)(iii) of such Act (42

23 U.S.C. 405(c)(2)(B)(iii)) is amended by striking

24 ‘‘non-public’’ and inserting ‘‘nonpublic’’.
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1 (9) Section 205(c)(2)(C) of such Act (42 U.S.C.

2 405(c)(2)(C)) is amended—

3 (A) by striking the clause (vii) added by

4 section 2201(c) of Public Law 101–624; and

5 (B) by redesignating the clause (iii) added

6 by section 2201(b)(3) of Public Law 101–624,

7 clause (iv), clause (v), clause (vi), and the

8 clause (vii) added by section 1735(b) of Public

9 Law 101–624 as clause (iv), clause (v), clause

10 (vi), clause (vii), and clause (viii), respectively;

11 (C) in clause (v) (as redesignated), by

12 striking ‘‘subclause (I) of’’, and by striking

13 ‘‘subclause (II) of clause (i)’’ and inserting

14 ‘‘clause (ii)’’; and

15 (D) in clause (viii)(IV) (as redesignated),

16 by inserting ‘‘a social security account number

17 or’’ before ‘‘a request for’’.

18 (10) The heading for section 205(j) of such Act

19 (42 U.S.C. 405(j)) is amended to read as follows:

20 ‘‘Representative Payees’’.

21 (11) The heading for section 205(s) of such Act

22 (42 U.S.C. 405(s)) is amended to read as follows:
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1 ‘‘Notice Requirements’’.

2 (12) Section 208(c) of such Act (42 U.S.C.

3 408(c)) is amended by striking ‘‘subsection (g)’’ and

4 inserting ‘‘subsection (a)(7)’’.

5 (13) Section 210(a)(5)(B)(i)(V) of such Act (42

6 U.S.C. 410(a)(5)(B)(i)(V)) is amended by striking

7 ‘‘section 105(e)(2)’’ and inserting ‘‘section

8 104(e)(2)’’.

9 (14) Section 211(a) of such Act (42 U.S.C.

10 411(a)) is amended—

11 (A) in paragraph (13), by striking ‘‘and’’

12 at the end; and

13 (B) in paragraph (14), by striking the pe14 riod and inserting ‘‘; and’’.

15 (15) Section 213(c) of such Act (42 U.S.C.

16 413(c)) is amended by striking ‘‘section’’ the first

17 place it appears and inserting ‘‘sections’’.

18 (16) Section 215(a)(5)(B)(i) of such Act (42

19 U.S.C. 415(a)(5)(B)(i)) is amended by striking

20 ‘‘subsection’’ the second place it appears and insert21 ing ‘‘subsections’’.

22 (17) Section 215(f)(7) of such Act (42 U.S.C.

23 415(f)(7)) is amended by inserting a period after

24 ‘‘1990’’.
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1 (18) Subparagraph (F) of section 218(c)(6) of

2 such Act (42 U.S.C. 418(c)(6)) is amended by ad3 justing the left-hand margination thereof so as to

4 align with section 218(c)(6)(E) of such Act.

5 (19) Section 223(i) of such Act (42 U.S.C.

6 423(i)) is amended by adding at the beginning the

7 following heading:

8 ‘‘Limitation on Payments to Prisoners’’.

9 (b) RELATED AMENDMENTS.—

10 (1) Section 603(b)(5)(A) of Public Law 101–

11 649 (amending section 202(n)(1) of the Social Secu12 rity Act) (104 Stat. 5085) is amended by inserting

13 ‘‘under’’ before ‘‘paragraph (1),’’ and by striking

14 ‘‘(17), or (18)’’ and inserting ‘‘(17), (18), or (19)’’,

15 effective as if this paragraph were included in such

16 section 603(b)(5)(A).

17 (2) Section 10208(b)(1) of Public Law 101–

18 239 (amending section 230(b)(2)(A) of the Social

19 Security Act) (103 Stat. 2477) is amended by strik20 ing ‘‘230(b)(2)(A)’’ and ‘‘430(b)(2)(A)’’ and insert21 ing ‘‘230(b)(2)’’ and ‘‘430(b)(2)’’, respectively, effec22 tive as if this paragraph were included in such sec23 tion 10208(b)(1).

24 (c) CONFORMING, CLERICAL AMENDMENTS UPDAT25 ING, WITHOUT SUBSTANTIVE CHANGE, REFERENCES IN
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1 TITLE II OF THE SOCIAL SECURITY ACT TO THE INTER2 NAL REVENUE CODE.—

3 (1)(A) Section 201(a) of such Act (42 U.S.C.

4 401(a)) is amended—

5 (i) by striking clauses (1) and (2);

6 (ii) in clause (3), by striking ‘‘(3) the taxes

7 imposed’’ and all that follows through ‘‘Decem8 ber 31, 1954,’’ and inserting ‘‘(1) the taxes im9 posed by chapter 21 (other than sections

10 3101(b) and 3111(b)) of the Internal Revenue

11 Code of 1986 with respect to wages (as defined

12 in section 3121 of such Code) reported to the

13 Secretary of the Treasury or his delegate pur14 suant to subtitle F of such Code,’’, and by

15 striking ‘‘subchapter or’’;

16 (iii) in clause (4), by striking ‘‘(4) the

17 taxes imposed’’ and all that follows through

18 ‘‘such Code,’’ and inserting ‘‘(2) the taxes im19 posed by chapter 2 (other than section 1401(b))

20 of the Internal Revenue Code of 1986 with re21 spect to self-employment income (as defined in

22 section 1402 of such Code) reported to the Sec23 retary of the Treasury or his delegate on tax re24 turns under subtitle F of such Code,’’, and by
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1 striking ‘‘subchapter or chapter’’ and inserting

2 ‘‘chapter’’; and

3 (iv) in the matter following the clauses

4 amended by this subparagraph, by striking

5 ‘‘clauses (3) and (4)’’ each place it appears and

6 inserting ‘‘clauses (1) and (2)’’.

7 (B) The amendments made by subparagraph

8 (A) shall apply only with respect to taxes imposed

9 with respect to wages paid on or after January 1,

10 1993, or with respect to self-employment income for

11 taxable years beginning on or after such date.

12 (2)(A)(i) Section 201(g)(1) of such Act (42

13 U.S.C. 401(g)(1)) is amended—

14 (I) in subparagraph (A)(i), by striking

15 ‘‘and subchapter E’’ and all that follows

16 through ‘‘1954’’ and inserting ‘‘and chapters 2

17 and 21 of the Internal Revenue Code of 1986’’;

18 (II) in subparagraph (A)(ii), by striking

19 ‘‘1954’’ and inserting ‘‘1986’’;

20 (III) in the matter in subparagraph (A)

21 following clause (ii), by striking ‘‘subchapter E’’

22 and all that follows through ‘‘1954.’’ and in23 serting ‘‘chapters 2 and 21 of the Internal Rev24 enue Code of 1986.’’, and by striking ‘‘1954

25 other’’ and inserting ‘‘1986 other’’; and
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1 (IV) in subparagraph (B), by striking

2 ‘‘1954’’ each place it appears and inserting

3 ‘‘1986’’.

4 (ii) The amendments made by clause (i) shall

5 apply only with respect to periods beginning on or

6 after the date of the enactment of this Act.

7 (B)(i) Section 201(g)(2) of such Act (42 U.S.C.

8 401(g)(2)) is amended by striking ‘‘section 3101(a)’’

9 and all that follows through ‘‘1950.’’ and inserting

10 ‘‘section 3101(a) of the Internal Revenue Code of

11 1986 which are subject to refund under section

12 6413(c) of such Code with respect to wages (as de13 fined in section 3121 of such Code).’’, and by strik14 ing ‘‘wages reported’’ and all that follows through

15 ‘‘1954,’’ and inserting ‘‘wages reported to the Sec16 retary of the Treasury or his delegate pursuant to

17 subtitle F of such Code,’’.

18 (ii) The amendments made by clause (i) shall

19 apply only with respect to wages paid on or after

20 January 1, 1993.

21 (C) Section 201(g)(4) of such Act (42 U.S.C.

22 401(g)(4)) is amended—

23 (i) by striking ‘‘The Board of Trustees

24 shall prescribe before January 1, 1981, the

25 method’’ and inserting ‘‘If at any time or times
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1 the Boards of Trustees of such Trust Funds

2 deem such action advisable, they may modify

3 the method prescribed by such Boards’’;

4 (ii) by striking ‘‘1954’’ and inserting

5 ‘‘1986’’; and

6 (iii) by striking the last sentence.

7 (3) Section 202(v) of such Act (42 U.S.C.

8 402(v)) is amended—

9 (A) in paragraph (1), by striking ‘‘1954’’

10 and inserting ‘‘1986’’; and

11 (B) in paragraph (3)(A), by inserting ‘‘of

12 the Internal Revenue Code of 1986’’ after

13 ‘‘3127’’.

14 (4) Section 205(c)(5)(F)(i) of such Act (42

15 U.S.C. 405(c)(5)(F)(i)) is amended by inserting ‘‘or

16 the Internal Revenue Code of 1986’’ after ‘‘1954’’.

17 (5)(A) Section 208(a)(1) of such Act (42

18 U.S.C. 408(a)(1)) is amended—

19 (i) in the matter preceding subparagraph

20 (A), by striking ‘‘subchapter E’’ and all that

21 follows through ‘‘1954’’ and inserting ‘‘chapter

22 2 or 21 or subtitle F of the Internal Revenue

23 Code of 1986’’;

24 (ii) in subparagraph (A), by inserting ‘‘of

25 1986’’ after ‘‘Internal Revenue Code’’; and
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1 (iii) in subparagraph (B), by inserting ‘‘of

2 1986’’ after ‘‘Internal Revenue Code’’.

3 (B) The amendments made by subparagraph

4 (A) shall apply only with respect to violations occur5 ring on or after the date of the enactment of this

6 Act.

7 (6)(A) Section 209(a)(4)(A) of such Act (42

8 U.S.C. 409(a)(4)(A)) is amended by inserting ‘‘or

9 the Internal Revenue Code of 1986’’ after ‘‘Internal

10 Revenue Code of 1954’’.

11 (B) Section 209(a) of such Act (42 U.S.C.

12 409(a)) is amended—

13 (i) in subparagraphs (C) and (E) of para14 graph (4),

15 (ii) in paragraph (5)(A),

16 (iii) in subparagraphs (A) and (B) of para17 graph (14),

18 (iv) in paragraph (15),

19 (v) in paragraph (16), and

20 (vi) in paragraph (17),

21 by striking ‘‘1954’’ each place it appears and insert22 ing ‘‘1986’’.

23 (C) Subsections (b), (f), (g), (i)(1), and (j) of

24 section 209 of such Act (42 U.S.C. 409) are amend-
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1 ed by striking ‘‘1954’’ each place it appears and

2 inserting ‘‘1986’’.

3 (7) Section 211(a)(15) of such Act (42 U.S.C.

4 411(a)(15)) is amended by inserting ‘‘of the Internal

5 Revenue Code of 1986’’ after ‘‘section 162(m)’’.

6 (8) Title II of such Act is further amended—

7 (A) in subsections (f)(5)(B)(ii) and (k) of

8 section 203 (42 U.S.C. 403),

9 (B) in section 205(c)(1)(D)(i) (42 U.S.C.

10 405(c)(1)(D)(i)),

11 (C) in the matter in section 210(a) (42

12 U.S.C. 410(a)) preceding paragraph (1) and in

13 paragraphs (8), (9), and (10) of section 210(a),

14 (D) in subsections (p)(4) and (q) of section

15 210 (42 U.S.C. 410),

16 (E) in the matter in section 211(a) (42

17 U.S.C. 411(a)) preceding paragraph (1) and in

18 paragraphs (3), (4), (6), (10), (11), and (12)

19 and clauses (iii) and (iv) of section 211(a),

20 (F) in the matter in section 211(c) (42

21 U.S.C. 411(c)) preceding paragraph (1), in

22 paragraphs (3) and (6) of section 211(c), and

23 in the matter following paragraph (6) of section

24 211(c),
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1 (G) in subsections (d), (e), and (h)(1)(B)

2 of section 211 (42 U.S.C. 411),

3 (H) in section 216(j) (42 U.S.C. 416(j)),

4 (I) in section 218(e)(3) (42 U.S.C.

5 418(e)(3)),

6 (J) in section 229(b) (42 U.S.C. 429(b)),

7 (K) in section 230(c) (42 U.S.C. 430(c)),

8 and

9 (L) in section 232 (42 U.S.C. 432),

10 by striking ‘‘1954’’ each place it appears and insert11 ing ‘‘1986’’.

12 (d) RULES OF CONSTRUCTION.—

13 (1) The preceding provisions of this section

14 shall be construed only as technical and clerical cor15 rections and as reflecting the original intent of the

16 provisions amended thereby.

17 (2) Any reference in title II of the Social Secu18 rity Act to the Internal Revenue Code of 1986 shall

19 be construed to include a reference to the Internal

20 Revenue Code of 1954 to the extent necessary to

21 carry out the provisions of paragraph (1).

22 (e) UTILIZATION OF NATIONAL AVERAGE WAGE

23 INDEX FOR WAGE-BASED ADJUSTMENTS.—
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1 (1) DEFINITION OF NATIONAL AVERAGE WAGE

2 INDEX.—Section 209(k) of the Social Security Act

3 (42 U.S.C. 409(k)) is amended—

4 (A) by redesignating paragraph (2) as

5 paragraph (3);

6 (B) in paragraph (3) (as redesignated), by

7 striking ‘‘paragraph (1)’’ and inserting ‘‘this

8 subsection’’; and

9 (C) by striking paragraph (1) and insert10 ing the following new paragraphs:

11 ‘‘(k)(1) For purposes of sections 203(f)(8)(B)(ii),

12 213(d)(2)(B), 215(a)(1)(B)(ii), 215(a)(1)(C)(ii),

13 215(a)(1)(D), 215(b)(3)(A)(ii), 215(i)(1)(E),

14 215(i)(2)(C)(ii), 224(f)(2)(B), and 230(b)(2) (and

15 230(b)(2) as in effect immediately prior to the enactment

16 of the Social Security Amendments of 1977), the term ‘na17 tional average wage index’ for any particular calendar year

18 means, subject to regulations of the Secretary under para19 graph (2), the average of the total wages for such particu20 lar calendar year.

21 ‘‘(2) The Secretary shall prescribe regulations under

22 which the national average wage index for any calendar

23 year shall be computed—
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1 ‘‘(A) on the basis of amounts reported to the

2 Secretary of the Treasury or his delegate for such

3 year,

4 ‘‘(B) by disregarding the limitation on wages

5 specified in subsection (a)(1),

6 ‘‘(C) with respect to calendar years after 1990,

7 by incorporating deferred compensation amounts

8 and factoring in for such years the rate of change

9 from year to year in such amounts, in a manner

10 consistent with the requirements of section 10208 of

11 the Omnibus Budget Reconciliation Act of 1989,

12 and

13 ‘‘(D) with respect to calendar years before

14 1978, in a manner consistent with the manner in

15 which the average of the total wages for each of

16 such calendar years was determined as provided by

17 applicable law as in effect for such years.’’.

18 (2) CONFORMING AMENDMENTS.—

19 (A) Section 203(f)(8)(B)(ii) of such Act

20 (42 U.S.C. 403(f)(8)(B)(ii)) is amended by

21 striking ‘‘deemed average total wages’’ each

22 place it appears and inserting ‘‘national average

23 wage index’’.

24 (B) Section 213(d)(2)(B) of such Act (42

25 U.S.C. 413(d)(2)(B)) is amended by striking
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1 ‘‘deemed average total wages’’ and inserting

2 ‘‘national average wage index’’, and by striking

3 ‘‘the average of the total wages’’ and all that

4 follows and inserting ‘‘the national average

5 wage index (as so defined) for 1976,’’.

6 (C) Section 215(a)(1)(B)(ii) of such Act

7 (42 U.S.C. 415(a)(1)(B)(ii)) is amended—

8 (i) in subclause (I), by striking

9 ‘‘deemed average total wages’’ and insert10 ing ‘‘national average wage index’’; and

11 (ii) in subclause (II), by striking ‘‘the

12 average of the total wages’’ and all that

13 follows and inserting ‘‘the national average

14 wage index (as so defined) for 1977.’’.

15 (D) Section 215(a)(1)(C)(ii) of such Act

16 (42 U.S.C. 415(a)(1)(C)(ii)) is amended by

17 striking ‘‘deemed average total wages’’ and

18 inserting ‘‘national average wage index’’.

19 (E) Section 215(a)(1)(D) of such Act (42

20 U.S.C. 415(a)(1)(D)) is amended—

21 (i) by striking ‘‘after 1978’’;

22 (ii) by striking ‘‘and the average of

23 the total wages (as described in subpara24 graph (B)(ii)(I))’’ and inserting ‘‘and the
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1 national average wage index (as defined in

2 section 209(k)(1))’’; and

3 (iii) by striking the last sentence.

4 (F) Section 215(b)(3)(A)(ii) of such Act

5 (42 U.S.C. 415(b)(3)(A)(ii)) is amended by

6 striking ‘‘deemed average total wages’’ each

7 place it appears and inserting ‘‘national average

8 wage index’’.

9 (G) Section 215(i)(1) of such Act (42

10 U.S.C. 415(i)(1)) is amended—

11 (i) in subparagraph (E), by striking

12 ‘‘SSA average wage index’’ and inserting

13 ‘‘national average wage index (as defined

14 in section 209(k)(1))’’; and

15 (ii) by striking subparagraph (G) and

16 redesignating subparagraph (H) as sub17 paragraph (G).

18 (H) Section 215(i)(2)(C)(ii) of such Act

19 (42 U.S.C. 415(i)(1)(C)(ii)) is amended to read

20 as follows:

21 ‘‘(ii) The Secretary shall determine and promulgate

22 the OASDI fund ratio for the current calendar year on

23 or before November 1 of the current calendar year, based

24 upon the most recent data then available. The Secretary

25 shall include a statement of the fund ratio and the na-
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1 tional average wage index (as defined in section 209(k)(1))

2 and a statement of the effect such ratio and the level of

3 such index may have upon benefit increases under this

4 subsection in any notification made under clause (i) and

5 any determination published under subparagraph (D).’’.

6 (I) Section 224(f)(2) of such Act (42

7 U.S.C. 424a(f)(2)) is amended—

8 (i) in subparagraph (A), by adding

9 ‘‘and’’ at the end;

10 (ii) by striking subparagraph (C); and

11 (iii) by striking subparagraph (B) and

12 inserting the following:

13 ‘‘(B) the ratio of (i) the national average wage

14 index (as defined in section 209(k)(1)) for the cal15 endar year before the year in which such redeter16 mination is made to (ii) the national average wage

17 index (as so defined) for the calendar year before

18 the year in which the reduction was first computed

19 (but not counting any reduction made in benefits for

20 a previous period of disability).’’.

21 (J) Section 230(b)(2) of such Act (42

22 U.S.C. 430(b)(2)) is amended by striking

23 ‘‘deemed average total wages’’ each place it ap24 pears and inserting ‘‘national average wage

25 index’’.
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1 (K) Section 230(d) of such Act (42 U.S.C.

2 430(d)) is amended by striking ‘‘deemed aver3 age total wage’’ and inserting ‘‘national average

4 wage index’’.

5 SEC. 13018. CROSS-MATCHING OF SOCIAL SECURITY AC6 COUNT NUMBER INFORMATION AND EM7 PLOYER IDENTIFICATION NUMBER INFORMA8 TION MAINTAINED BY THE DEPARTMENT OF

9 AGRICULTURE.

10 (a) SOCIAL SECURITY ACCOUNT NUMBER INFORMA11 TION.—Clause (iii) of section 205(c)(2)(C) of the Social

12 Security Act (42 U.S.C. 405(c)(2)(C)) (as added by sec13 tion 1735(a)(3) of the Food, Agriculture, Conservation,

14 and Trade Act of 1990 (Public Law 101–624; 104 Stat.

15 3791)) is amended—

16 (1) by inserting ‘‘(I)’’ after ‘‘(iii)’’; and

17 (2) by striking ‘‘The Secretary of Agriculture

18 shall restrict’’ and all that follows and inserting the

19 following:

20 ‘‘(II) The Secretary of Agriculture may share any in21 formation contained in any list referred to in subclause

22 (I) with any other agency or instrumentality of the United

23 States which otherwise has access to social security ac24 count numbers in accordance with this subsection or other

25 applicable Federal law, except that the Secretary of Agri-
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1 culture may share such information only to the extent that

2 such Secretary determines such sharing would assist in

3 verifying and matching such information against informa4 tion maintained by such other agency or instrumentality.

5 Any such information shared pursuant to this subclause

6 may be used by such other agency or instrumentality only

7 for the purpose of effective administration and enforce8 ment of the Food Stamp Act of 1977 or for the purpose

9 of investigation of violations of other Federal laws or en10 forcement of such laws.

11 ‘‘(III) The Secretary of Agriculture, and the head of

12 any other agency or instrumentality referred to in this

13 subclause, shall restrict, to the satisfaction of the Sec14 retary of Health and Human Services, access to social se15 curity account numbers obtained pursuant to this clause

16 only to officers and employees of the United States whose

17 duties or responsibilities require access for the purposes

18 described in subclause (II).

19 ‘‘(IV) The Secretary of Agriculture, and the head of

20 any agency or instrumentality with which information is

21 shared pursuant to clause (II), shall provide such other

22 safeguards as the Secretary of Health and Human Serv23 ices determines to be necessary or appropriate to protect

24 the confidentiality of the social security account num25 bers.’’.
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1 (b) EMPLOYER IDENTIFICATION NUMBER INFORMA2 TION.—Subsection (f) of section 6109 of the Internal Rev3 enue Code of 1986 (as added by section 1735(c) of the

4 Food, Agriculture, Conservation, and Trade Act of 1990

5 (Public Law 101–624; 104 Stat. 3792)) (relating to access

6 to employer identification numbers by Secretary of Agri7 culture for purposes of Food Stamp Act of 1977) is

8 amended—

9 (1) by striking paragraph (2) and inserting the

10 following:

11 ‘‘(2) SHARING OF INFORMATION AND SAFE12 GUARDS.—

13 ‘‘(A) SHARING OF INFORMATION.—The

14 Secretary of Agriculture may share any infor15 mation contained in any list referred to in para16 graph (1) with any other agency or instrumen17 tality of the United States which otherwise has

18 access to employer identification numbers in ac19 cordance with this section or other applicable

20 Federal law, except that the Secretary of Agri21 culture may share such information only to the

22 extent that such Secretary determines such

23 sharing would assist in verifying and matching

24 such information against information main25 tained by such other agency or instrumentality.
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1 Any such information shared pursuant to this

2 subparagraph may be used by such other agen3 cy or instrumentality only for the purpose of ef4 fective administration and enforcement of the

5 Food Stamp Act of 1977 or for the purpose of

6 investigation of violations of other Federal laws

7 or enforcement of such laws.

8 ‘‘(B) SAFEGUARDS.—The Secretary of Ag9 riculture, and the head of any other agency or

10 instrumentality referred to in subparagraph

11 (A), shall restrict, to the satisfaction of the Sec12 retary of the Treasury, access to employer iden13 tification numbers obtained pursuant to this

14 subsection only to officers and employees of the

15 United States whose duties or responsibilities

16 require access for the purposes described in

17 subparagraph (A). The Secretary of Agri18 culture, and the head of any agency or instru19 mentality with which information is shared pur20 suant to subparagraph (A), shall provide such

21 other safeguards as the Secretary of the Treas22 ury determines to be necessary or appropriate

23 to protect the confidentiality of the employer

24 identification numbers.’’;
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1 (2) in paragraph (3), by striking ‘‘by the Sec2 retary of Agriculture pursuant to this subsection’’

3 and inserting ‘‘pursuant to this subsection by the

4 Secretary of Agriculture or the head of any agency

5 or instrumentality with which information is shared

6 pursuant to paragraph (2)’’, and by striking ‘‘social

7 security account numbers’’ and inserting ‘‘employer

8 identification numbers’’; and

9 (3) in paragraph (4), by striking ‘‘by the Sec10 retary of Agriculture pursuant to this subsection’’

11 and inserting ‘‘pursuant to this subsection by the

12 Secretary of Agriculture or any agency or instru13 mentality with which information is shared pursuant

14 to paragraph (2)’’.

15 SEC. 13019. PROHIBITION OF MISUSE OF DEPARTMENT OF

16 THE TREASURY NAMES, SYMBOLS, ETC.

17 (a) GENERAL RULE.—Subchapter II of chapter 3 of

18 title 31, United States Code, is amended by adding at the

19 end thereof the following new section:

20 ‘‘§ 333. Prohibition of misuse of Department of the

21 Treasury names, symbols, etc.

22 ‘‘(a) GENERAL RULE.—No person may use, in con23 nection with, or as a part of, any advertisement, solicita24 tion, business activity, or product, whether alone or with

25 other words, letters, symbols, or emblems—
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1 ‘‘(1) the words ‘Department of the Treasury’,

2 or the name of any service, bureau, office, or other

3 subdivision of the Department of the Treasury,

4 ‘‘(2) the titles ‘Secretary of the Treasury’ or

5 ‘Treasurer of the United States’ or the title of any

6 other officer or employee of the Department of the

7 Treasury,

8 ‘‘(3) the abbreviations or initials of any entity

9 referred to in paragraph (1),

10 ‘‘(4) the words ‘United States Savings Bond’ or

11 the name of any other obligation issued by the De12 partment of the Treasury,

13 ‘‘(5) any symbol or emblem of an entity re14 ferred to in paragraph (1) (including the design of

15 any envelope or stationary used by such an entity),

16 and

17 ‘‘(6) any colorable imitation of any such words,

18 titles, abbreviations, initials, symbols, or emblems,

19 in a manner which could reasonably be interpreted or con20 strued as conveying the false impression that such adver21 tisement, solicitation, business activity, or product is in

22 any manner approved, endorsed, sponsored, or authorized

23 by, or associated with, the Department of the Treasury

24 or any entity referred to in paragraph (1) or any officer

25 or employee thereof.
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1 ‘‘(b) TREATMENT OF DISCLAIMERS.—Any deter2 mination of whether a person has violated the provisions

3 of subsection (a) shall be made without regard to any use

4 of a disclaimer of affiliation with the United States Gov5 ernment or any particular agency or instrumentality there6 of.

7 ‘‘(c) CIVIL PENALTY.—

8 ‘‘(1) IN GENERAL.—The Secretary of the

9 Treasury may impose a civil penalty on any person

10 who violates the provisions of subsection (a).

11 ‘‘(2) AMOUNT OF PENALTY.—The amount of

12 the civil penalty imposed by paragraph (1) shall not

13 exceed $5,000 for each use of any material in viola14 tion of subsection (a). If such use is in a broadcast

15 or telecast, the preceding sentence shall be applied

16 by substituting ‘$25,000’ for ‘$5,000’.

17 ‘‘(3) TIME LIMITATIONS.—

18 ‘‘(A) ASSESSMENTS.—The Secretary of the

19 Treasury may assess any civil penalty under

20 paragraph (1) at any time before the end of the

21 3-year period beginning on the date of the vio22 lation with respect to which such penalty is im23 posed.

24 ‘‘(B) CIVIL ACTION.—The Secretary of the

25 Treasury may commence a civil action to re-
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1 cover any penalty imposed under this subsection

2 at any time before the end of the 2-year period

3 beginning on the date on which such penalty

4 was assessed.

5 ‘‘(4) COORDINATION WITH SUBSECTION (d).—

6 No penalty may be assessed under this subsection

7 with respect to any violation after a criminal pro8 ceeding with respect to such violation has been com9 menced under subsection (d).

10 ‘‘(d) CRIMINAL PENALTY.—

11 ‘‘(1) IN GENERAL.—If any person knowingly

12 violates subsection (a), such person shall, upon con13 viction thereof, be fined not more than $10,000 for

14 each such use or imprisoned not more than 1 year,

15 or both. If such use is in a broadcast or telecast, the

16 preceding sentence shall be applied by substituting

17 ‘$50,000’ for ‘$10,000’.

18 ‘‘(2) TIME LIMITATIONS.—No person may be

19 prosecuted, tried, or punished under paragraph (1)

20 for any violation of subsection (a) unless the indict21 ment is found or the information instituted during

22 the 3-year period beginning on the date of the viola23 tion.

24 ‘‘(3) COORDINATION WITH SUBSECTION (c).—

25 No criminal proceeding may be commenced under
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1 this subsection with respect to any violation if a civil

2 penalty has previously been assessed under sub3 section (c) with respect to such violation.’’

4 (b) CLERICAL AMENDMENT.—The analysis for chap5 ter 3 of title 31, United States Code, is amended by add6 ing after the item relating to section 332 the following

7 new item:

‘‘333. Prohibition of misuse of Department of the Treasury names, symbols,

etc.’’.

8 (c) EFFECTIVE DATE.—The amendments made by

9 this section shall take effect on the date of the enactment

10 of this Act.

11 (d) REPORT.—Not later than May 1, 1995, the Sec12 retary of the Treasury shall submit a report to the Com13 mittee on Ways and Means of the House of Representa14 tives and the Committee on Finance of the Senate on the

15 implementation of the amendments made by this section.

16 Such report shall include the number of cases in which

17 the Secretary has notified persons of violations of section

18 333 of title 31, United States Code (as added by sub19 section (a)), the number of prosecutions commenced under

20 such section, and the total amount of the penalties col21 lected in such prosecutions.
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1 SEC. 13020. AVAILABILITY AND USE OF DEATH INFORMA2 TION UNDER THE OLD-AGE, SURVIVORS, AND

3 DISABILITY INSURANCE PROGRAM.

4 (a) IMPROVEMENTS IN PROGRAM FOR USE OF

5 DEATH CERTIFICATES TO CORRECT PROGRAM INFORMA6 TION.—

7 (1) ELIMINATION OF STATE RESTRICTIONS ON

8 USE OF INFORMATION.—Section 205(r)(1) of the So9 cial Security Act (42 U.S.C. 405(r)(1)) is amended

10 by adding at the end, after and below subparagraph

11 (B), the following new sentence:

12 ‘‘Any contract entered into pursuant to subparagraph (A)

13 shall not include any restriction on the use of information

14 obtained by the Secretary pursuant to such contract, ex15 cept to the extent that such use may be restricted under

16 paragraph (6).’’.

17 (2) INFORMATION PROVIDED TO STATE AGEN18 CIES FREE OF CHARGE.—

19 (A) IN GENERAL.—Section 205(r)(4) of

20 such Act (42 U.S.C. 405(r)(4)) is amended to

21 read as follows:

22 ‘‘(4)(A) In the case of individuals with respect to

23 whom federally funded benefits are provided by (or

24 through) a State agency other than under this Act, the

25 Secretary shall to the extent feasible provide such informa26 tion free of charge through a cooperative arrangement
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1 with such agency, for ensuring proper payment of those

2 benefits with respect to such individuals, if such arrange3 ment does not conflict with the duties of the Secretary

4 under paragraph (1).

5 ‘‘(B) The Secretary may enter into similar agree6 ments with States to provide information free of charge

7 for their use in programs wholly funded by the States if

8 such arrangement does not conflict with the duties of the

9 Secretary under paragraph (1).’’.

10 (B) CONFORMING AMENDMENT.—Section

11 205(r)(3) of such Act (42 U.S.C. 405(r)(3)) is

12 amended by striking ‘‘or State’’.

13 (3) USE BY STATES OF SOCIAL SECURITY AC14 COUNT NUMBERS CONTINGENT UPON PARTICIPATION

15 IN PROGRAM.—Section 205(r)(2) of such Act (42

16 U.S.C. 405(r)(2)) is amended—

17 (A) by inserting ‘‘(A)’’ after ‘‘(2)’’; and

18 (B) by adding at the end the following new

19 subparagraph:

20 ‘‘(B) Notwithstanding section 7(a)(2)(B) of the Pri21 vacy Act of 1974 and clauses (i) and (v) of subsection

22 (c)(2)(C) of this section, any State which is not a party

23 to a contract with the Secretary meeting the requirements

24 of paragraph (1) (and any political subdivision thereof)

25 may not utilize an individual’s social security account
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1 number in the administration of any driver’s license or

2 motor vehicle registration law.’’.

3 (b) STUDY REGARDING IMPROVEMENTS IN GATHER4 ING AND REPORTING OF DEATH INFORMATION.

5 (1) IN GENERAL.—As soon as practicable after

6 the date of the enactment of this Act, the Secretary

7 of Health and Human Services shall conduct a study

8 of possible improvements in the current methods of

9 gathering and reporting death information by the

10 Federal, State, and local governments which would

11 result in more efficient and expeditious handling of

12 such information.

13 (2) SPECIFIC MATTERS TO BE STUDIED.—In

14 carrying out the study required under this sub15 section, the Secretary shall—

16 (A) ascertain the delays in the receipt of

17 death information which are currently encoun18 tered by the Social Security Administration and

19 other agencies in need of such information on

20 a regular basis,

21 (B) analyze the causes of such delays,

22 (C) develop alternative options for improv23 ing Federal, State, and local agency cooperation

24 in reducing such delays, and
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1 (D) evaluate the costs and benefits associ2 ated with the options referred to in subpara3 graph (C).

4 (3) REPORT.—Not later than June 1, 1994, the

5 Secretary shall submit a written report to the Com6 mittee on Ways and Means of the House of Rep7 resentatives and the Committee on Finance of the

8 Senate setting forth the results of the study con9 ducted pursuant to this subsection, together with

10 such administrative and legislative recommendations

11 as the Secretary may consider appropriate.

12 (c) EFFECTIVE DATE.—

13 (1) IN GENERAL.—The amendments made by

14 subsection (a) shall take effect 1 year after the date

15 of the enactment of this Act.

16 (2) PROMOTION OF ENTRY INTO NEW CON17 TRACTS.—As soon as practicable after the date of

18 the enactment of this Act, the Secretary of Health

19 and Human Services shall take such actions as are

20 necessary and appropriate to promote entry into

21 contracts under section 205(r) of the Social Security

22 Act which are in compliance with the requirements

23 of the amendments made by subsection (a).
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1 Subtitle B—Human Resources

2 Amendments

3 SEC. 13201. TABLE OF CONTENTS.

4 The table of contents of this subtitle is as follows:

Subtitle B—Human Resources Amendments

Sec. 13201. Table of contents.

Sec. 13202. References.

CHAPTER 1—CHILD WELFARE SERVICES, FOSTER CARE, AND ADOPTION

ASSISTANCE

Sec. 13211. Entitlement funding for services designed to strengthen and preserve families.

Sec. 13212. Grants for State courts to assess and improve handling of proceedings relating to foster care and adoption.

Sec. 13213. Required protections for foster children.

Sec. 13214. States required to report on measures taken to comply with the Indian Child Welfare Act.

Sec. 13215. Child welfare traineeships.

Sec. 13216. Dissolved adoptions.

Sec. 13217. Time frame for judicial determinations on voluntary placements.

Sec. 13218. Study of reasonable efforts.

Sec. 13219. Enhanced match for automated data systems.

Sec. 13220. Periodic reevaluation of foster care maintenance payments.

Sec. 13221. Dispositional hearing.

Sec. 13222. Health care plans for foster children.

Sec. 13223. Independent living.

Sec. 13224. Elimination of foster care ceilings and of authority to transfer unused foster care funds to child welfare services programs.

Sec. 13225. Training of agency staff and foster and adoptive parents.

Sec. 13226. On-site reviews and audits of State claims for foster care and

adoption assistance.

Sec. 13227. Conformity reviews.

Sec. 13228. Repeal of annual report on voluntary placement.

Sec. 13229. Demonstration projects.

Sec. 13230. Placement accountability.

Sec. 13231. Payments of State claims for foster care and adoption assistance.

Sec. 13232. Moratorium on collection of disallowances.

Sec. 13233. Border region child welfare worker training demonstration.

Sec. 13234. Effect of failure to carry out State plan.

CHAPTER 2—CHILD SUPPORT ENFORCEMENT

Sec. 13241. State paternity establishment programs.

Sec. 13242. Enforcement of health insurance support.

Sec. 13243. Reports to credit bureaus on persons delinquent in child support

payments.

CHAPTER 3—SUPPLEMENTAL SECURITY INCOME

Sec. 13251. Fees for Federal administration of State supplementary payments.
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Sec. 13252. Exclusion from income of State relocation assistance.

Sec. 13253. Prevention of adverse effects on eligibility for, and amount of, benefits when spouse or parent of beneficiary is absent from the

household due to active military service.

Sec. 13254. Eligibility for children of Armed Forces personnel residing outside

the United States other than in foreign countries.

Sec. 13255. Definition of disability for children under age 18 applied to all individuals under age 18.

Sec. 13256. Valuation of certain in-kind support and maintenance when there

is a cost of living adjustment in benefits.

Sec. 13257. Exclusion from income of certain amounts received by Indians

from interests held in trust.

CHAPTER 4—AID TO FAMILIES WITH DEPENDENT CHILDREN

Sec. 13261. 50 percent Federal match of State administrative costs.

Sec. 13262. Delay in effective date of penalty for failure to meet required participation rate for unemployed parents in the JOBS program.

Sec. 13263. Report to the Congress with respect to performance standards in

the JOBS program.

Sec. 13264. Measurement and reporting of welfare participation.

Sec. 13265. New Hope demonstration project.

Sec. 13266. Delay in requirement that outlying areas operate an AFDC-UP

program.

Sec. 13267. Adult in family or household allowed to attest to citizenship status

of family or household members.

Sec. 13268. Increase in stepparent income disregard.

Sec. 13269. Extension of New York State child support demonstration program.

Sec. 13270. Early childhood development projects.

CHAPTER 5—UNEMPLOYMENT INSURANCE

Sec. 13271. Treatment of short-time compensation programs.

Sec. 13272. Technical amendment to Unemployment Trust Fund.

Sec. 13273. Extension of reporting date for advisory council.

Sec. 13274. Clarification of emergency unemployment benefits provisions.

Sec. 13275. Modifications to extended unemployment program.

Sec. 13276. Extension of current Federal unemployment rate.

Sec. 13277. Disclosure of information to Railroad Retirement Board.

CHAPTER 6—TECHNICAL PROVISIONS

Sec. 13281. Corrections related to the income security and human resources

provisions of the Omnibus Budget Reconciliation Act of 1990.

Sec. 13282. Technical corrections related to the human resource and income security provisions of the Omnibus Budget Reconciliation Act of

1989.

Sec. 13283. Elimination of obsolete provisions relating to treatment of the

earned income tax credit.

Sec. 13284. Redesignation of certain provisions.
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1 SEC. 13202. REFERENCES.

2 Except as otherwise expressly provided, wherever in

3 this subtitle an amendment or repeal is expressed in terms

4 of an amendment to, or repeal of, a section or other provi5 sion, the reference shall be considered to be made to a

6 section or other provision of the Social Security Act.

7 CHAPTER 1—CHILD WELFARE SERVICES,

8 FOSTER CARE, AND ADOPTION ASSIST9 ANCE

10 SEC. 13211. ENTITLEMENT FUNDING FOR SERVICES DE11 SIGNED TO STRENGTHEN AND PRESERVE

12 FAMILIES.

13 (a) IN GENERAL.—Part B of title IV (42 U.S.C.

14 620–628) is amended—

15 (1) by striking the heading and inserting the

16 following:

17 ‘‘PART B—CHILD AND FAMILY SERVICES

18 ‘‘Subpart 1—Child Welfare Services’’; and

19 (2) by adding at the end the following:

20 ‘‘Subpart 2—Family Preservation and Support

21 Services

22 ‘‘SEC. 430. PURPOSES; LIMITATIONS ON AUTHORIZATIONS

23 OF APPROPRIATIONS; RESERVATION OF CER24 TAIN AMOUNTS.

25 ‘‘(a) PURPOSES; LIMITATIONS ON AUTHORIZATION

26 OF APPROPRIATIONS.—For the purpose of encouraging
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1 and enabling each State to develop and establish, or ex2 pand, and to operate a program of family preservation

3 services and community-based family support services,

4 there are authorized to be appropriated to the Secretary—

5 ‘‘(1) $60,000,000 for fiscal year 1994;

6 ‘‘(2) $135,000,000 for fiscal year 1995;

7 ‘‘(3) $240,000,000 for fiscal year 1996;

8 ‘‘(4) $360,000,000 for fiscal year 1997; and

9 ‘‘(5) $600,000,000 for fiscal year 1998.

10 ‘‘(b) RESERVATION OF CERTAIN AMOUNTS.—

11 ‘‘(1) EVALUATION, RESEARCH, TRAINING, AND

12 TECHNICAL ASSISTANCE.—The Secretary shall re13 serve 1 percent of the amount appropriated pursu14 ant to subsection (a) for each fiscal year, for expend15 iture by the Secretary for evaluation, research, train16 ing, and technical assistance related to the program

17 under this subpart.

18 ‘‘(2) STATE COURT ASSESSMENTS.—The Sec19 retary shall reserve $5,000,000 of the amount ap20 propriated pursuant to subsection (a) for fiscal year

21 1995, and $10,000,000 of the amount so appro22 priated for each of fiscal years 1996, 1997, and

23 1998, for grants under section 13212 of the Omni24 bus Budget Reconciliation Act of 1993.
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1 ‘‘(3) INDIAN TRIBES.—The Secretary shall re2 serve 1 percent of the amount appropriated pursu3 ant to subsection (a) for each fiscal year, for allot4 ment to Indian tribes in accordance with section

5 433(a).

6 ‘‘SEC. 431. DEFINITIONS.

7 ‘‘(a) IN GENERAL.—As used in this subpart:

8 ‘‘(1) FAMILY PRESERVATION SERVICES.—The

9 term ‘family preservation services’ means services

10 for children and families designed to help families

11 (including adoptive and extended families) at risk or

12 in crisis, including—

13 ‘‘(A) service programs designed to help

14 children—

15 ‘‘(i) where appropriate, return to fam16 ilies from which they have been removed;

17 or

18 ‘‘(ii) be placed for adoption, with a

19 legal guardian, or, if adoption or legal

20 guardianship is determined not to be ap21 propriate for a child, in some other

22 planned, permanent living arrangement;

23 ‘‘(B) preplacement preventive services pro24 grams, such as intensive family preservation

25 programs, designed to help children at risk of
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1 foster care placement remain with their fami2 lies;

3 ‘‘(C) service programs designed to provide

4 followup care to families to whom a child has

5 been returned after a foster care placement;

6 ‘‘(D) respite care of children to provide

7 temporary relief for parents and other

8 caregivers (including foster parents); and

9 ‘‘(E) services designed to improve

10 parenting skills (by reinforcing parents’ con11 fidence in their strengths, and helping them to

12 identify where improvement is needed and to

13 obtain assistance in improving those skills) with

14 respect to matters such as child development,

15 family budgeting, coping with stress, health,

16 and nutrition.

17 ‘‘(2) FAMILY SUPPORT SERVICES.—The term

18 ‘family support services’ means community-based

19 services to promote the well-being of children and

20 families designed to increase the strength and stabil21 ity of families (including adoptive, foster, and ex22 tended families), to increase parents’ confidence and

23 competence in their parenting abilities, to afford

24 children a stable and supportive family environment,
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1 and otherwise to enhance child development,

2 including—

3 ‘‘(A) services described in paragraph

4 (1)(E);

5 ‘‘(B) respite care of children to provide

6 temporary relief for parents and other

7 caregivers;

8 ‘‘(C) structured activities involving parents

9 and children to strengthen the parent-child re10 lationship;

11 ‘‘(D) drop-in centers to afford families op12 portunities for informal interaction with other

13 families and with program staff;

14 ‘‘(E) information and referral services to

15 afford families access to other community serv16 ices, including child care, health care, nutrition

17 programs, adult education and literacy pro18 grams, and counseling and mentoring services;

19 and

20 ‘‘(F) early developmental screening of chil21 dren to assess the needs of such children, and

22 assistance to families in securing specific serv23 ices to meet these needs.
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1 ‘‘(3) STATE AGENCY.—The term ‘State agency’

2 means the State agency responsible for administer3 ing the program under subpart 1.

4 ‘‘(4) STATE.—The term ‘State’ includes an In5 dian tribe or tribal organization, in addition to the

6 meaning given such term for purposes of subpart 1.

7 ‘‘(5) TRIBAL ORGANIZATION.—The term ‘tribal

8 organization’ means the recognized governing body

9 of any Indian tribe.

10 ‘‘(6) INDIAN TRIBE.—The term ‘Indian tribe’

11 means any Indian tribe (as defined in section

12 482(i)(5)) and any Alaska Native organization (as

13 defined in section 482(i)(7)(A)).

14 ‘‘(b) OTHER TERMS.—For other definitions of other

15 terms used in this subpart, see section 475.

16 ‘‘SEC. 432. STATE PLANS.

17 ‘‘(a) PLAN REQUIREMENTS.—A State plan meets the

18 requirements of this subsection if the plan—

19 ‘‘(1) provides that the State agency shall ad20 minister, or supervise the administration of, the

21 State program under this subpart;

22 ‘‘(2)(A)(i) sets forth the goals intended to be

23 accomplished under the plan by the end of the 5th

24 fiscal year in which the plan is in operation in the

25 State, and (ii) is updated periodically to set forth
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1 the goals intended to be accomplished under the

2 plan by the end of each 5th fiscal year thereafter;

3 ‘‘(B) describes the methods to be used in meas4 uring progress toward accomplishment of the goals;

5 ‘‘(C) contains a commitment that the State—

6 ‘‘(i) after the end of each of the 1st 4 fis7 cal years covered by a set of goals, will perform

8 an interim review of progress toward accom9 plishment of the goals, and on the basis of the

10 interim review will revise the statement of goals

11 in the plan, if necessary, to reflect changed cir12 cumstances; and

13 ‘‘(ii) after the end of the last fiscal year

14 covered by a set of goals, will perform a final

15 review of progress toward accomplishment of

16 the goals, and on the basis of the final review

17 (I) will prepare, transmit to the Secretary, and

18 make available to the public a final report on

19 progress toward accomplishment of the goals,

20 and (II) will develop (in consultation with the

21 entities required to be consulted pursuant to

22 subsection (b)) and add to the plan a statement

23 of the goals intended to be accomplished by the

24 end of the 5th succeeding fiscal year;
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1 ‘‘(3) provides for coordination, to the extent

2 feasible and appropriate, of the provision of services

3 under the plan and the provision of services or bene4 fits under other Federal or federally assisted pro5 grams serving the same populations;

6 ‘‘(4) contains assurances that not less than 90

7 percent of expenditures under the plan for any fiscal

8 year with respect to which the State is eligible for

9 payment under section 433 for the fiscal year shall

10 be for services for children and families, and that

11 significant portions of such 90 percent shall be

12 expended—

13 ‘‘(A) for family preservation services; and

14 ‘‘(B) for community-based family support

15 services;

16 ‘‘(5) provides that, by the beginning of the 6th

17 fiscal year during which the plan is in effect, pro18 grams under the plan shall be available on a state19 wide basis, to the extent feasible and appropriate;

20 ‘‘(6) contains assurances that the State will—

21 ‘‘(A) annually prepare, furnish to the Sec22 retary, and make available to the public a de23 scription (including separate descriptions with

24 respect to family preservation services and com25 munity-based family support services) of—
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1 ‘‘(i) the service programs to be made

2 available under the plan in the immediately

3 succeeding fiscal year;

4 ‘‘(ii) the populations which the pro5 grams will serve; and

6 ‘‘(iii) the geographic areas in the

7 State in which the services will be avail8 able; and

9 ‘‘(B) perform the activities described in

10 subparagraph (A)—

11 ‘‘(i) in the case of the 1st fiscal year

12 under the plan, at the time the State sub13 mits its initial plan; and

14 ‘‘(ii) in the case of each succeeding

15 fiscal year, by the end of the 3rd quarter

16 of the immediately preceding fiscal year;

17 ‘‘(7) provides for such methods of administra18 tion as the Secretary finds to be necessary for the

19 proper and efficient operation of the plan;

20 ‘‘(8)(A) contains assurances that Federal funds

21 provided to the State under this subpart will not be

22 used to supplant Federal or non-Federal funds for

23 existing services and activities which promote the

24 purposes of this subpart; and
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1 ‘‘(B) provides that the State will furnish re2 ports to the Secretary, at such times, in such for3 mat, and containing such information as the Sec4 retary may require, that demonstrate the State’s

5 compliance with the prohibition contained in sub6 paragraph (A); and

7 ‘‘(9) provides that the State agency will furnish

8 such reports, containing such information, and par9 ticipate in such evaluations, as the Secretary may

10 require.

11 ‘‘(b) APPROVAL OF PLANS.—

12 ‘‘(1) IN GENERAL.—The Secretary shall ap13 prove a plan that meets the requirements of sub14 section (a) only if the plan was developed jointly by

15 the Secretary and the State, after consultation by

16 the State agency with appropriate public and non17 profit private agencies and community-based organi18 zations with experience in administering programs of

19 services for children and families (including family

20 preservation and family support services).

21 ‘‘(2) PLANS OF INDIAN TRIBES EXEMPTED

22 FROM INAPPROPRIATE REQUIREMENTS.—The Sec23 retary may exempt a plan submitted by an Indian

24 tribe from any requirement of this section that the

25 Secretary determines would be inappropriate to
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1 apply to the Indian tribe, taking into account the re2 sources, needs, and other circumstances of the

3 Indian tribe.

4 ‘‘SEC. 433. ALLOTMENTS TO STATES.

5 ‘‘(a) INDIAN TRIBES.—

6 ‘‘(1) IN GENERAL.—From the amount reserved

7 pursuant to section 430(b)(3), the Secretary shall

8 allot to each Indian tribe with a plan approved

9 under this subpart (except as provided in paragraph

10 (2) of this subsection) an amount that bears the

11 same ratio to such reserved amount as the number

12 of children in the Indian tribe bears to the total

13 number of children in all Indian tribes with State

14 plans so approved, as determined by the Secretary

15 on the basis of the most current and reliable infor16 mation available to the Secretary.

17 ‘‘(2) SPECIAL RULE.—The Secretary may not

18 allot funds to an Indian tribe with a plan approved

19 under this subpart whose allotment (but for this

20 paragraph) would be less than $10,000 if allotments

21 were made under paragraph (1) to all Indian tribes

22 with plans approved under this subpart with the

23 same or larger numbers of children.

24 ‘‘(b) TERRITORIES.—From the amount appropriated

25 pursuant to section 430 that remains after applying sec-
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1 tion 430(b) for each fiscal year, the Secretary shall allot

2 to each of the jurisdictions of Puerto Rico, Guam, the Vir3 gin Islands, the Northern Mariana Islands, and American

4 Samoa an amount determined in the same manner as the

5 allotment to each of such jurisdictions is determined under

6 section 421.

7 ‘‘(c) OTHER STATES.—

8 ‘‘(1) IN GENERAL.—From the amount appro9 priated pursuant to section 430 that remains after

10 applying section 430(b) and subsection (b) of this

11 section for each fiscal year, the Secretary shall allot

12 to each State (other than an Indian tribe) which is

13 not specified in subsection (b) of this section an

14 amount equal to such remaining amount multiplied

15 by the food stamp percentage of the State for the

16 fiscal year.

17 ‘‘(2) FOOD STAMP PERCENTAGE DEFINED.—

18 ‘‘(A) IN GENERAL.—As used in paragraph

19 (1) of this subsection, the term ‘food stamp

20 percentage’ means, with respect to a State and

21 a fiscal year, the average monthly number of

22 children receiving food stamp benefits in the

23 State for months in the 3 fiscal years referred

24 to in subparagraph (B) of this paragraph, as

25 determined from sample surveys made under
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1 section 16(c) of the Food Stamp Act of 1977,

2 expressed as a percentage of the average

3 monthly number of children receiving food

4 stamp benefits in the States described in such

5 paragraph (1) for months in such 3 fiscal years,

6 as so determined.

7 ‘‘(B) FISCAL YEARS USED IN CALCULA8 TION.—For purposes of the calculation pursu9 ant to subparagraph (A), the Secretary shall

10 use data for the 3 most recent fiscal years, pre11 ceding the fiscal year for which the State’s al12 lotment is calculated under this subsection, for

13 which such data are available to the Secretary.

14 ‘‘SEC. 434. PAYMENTS TO STATES.

15 ‘‘(a) ENTITLEMENT.—

16 ‘‘(1) GENERAL RULE.—Except as provided in

17 paragraph (2) of this subsection, each State which

18 has a plan approved under this subpart shall be enti19 tled to payment of the lesser of—

20 ‘‘(A) 75 percent of the total cost of activi21 ties under the plan during the fiscal year or the

22 immediately succeeding fiscal year; or

23 ‘‘(B) the allotment of the State under sec24 tion 433 for the fiscal year.
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1 ‘‘(2) SPECIAL RULE.—Upon submission by a

2 State to the Secretary during fiscal year 1994 of an

3 application in such form and containing such infor4 mation as the Secretary may require (including, if

5 the State is seeking payment of an amount pursuant

6 to subparagraph (B) of this paragraph, a description

7 of the services to be provided with the amount), the

8 State shall be entitled to payment of an amount

9 equal to the sum of—

10 ‘‘(A) such amount not exceeding

11 $1,000,000 as the State may require to develop

12 and submit a plan for approval under section

13 432; and

14 ‘‘(B) an amount equal to the lesser of—

15 ‘‘(i) 75 percent of the cost of State

16 services to children and families provided

17 in accordance with section 432(a)(4); or

18 ‘‘(ii) the allotment of the State under

19 section 433 for fiscal year 1994, reduced

20 by any amount paid to the State pursuant

21 to subparagraph (A) of this paragraph.

22 ‘‘(b) PROHIBITIONS.—

23 ‘‘(1) NO USE OF OTHER FEDERAL FUNDS FOR

24 STATE MATCH.—Each State receiving an amount

25 paid under paragraph (1) or (2)(B) of subsection (a)
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1 may not expend any Federal funds to meet the costs

2 of services described in this subpart not covered by

3 the amount so paid.

4 ‘‘(2) AVAILABILITY OF FUNDS.—

5 ‘‘(A) IN GENERAL.—A State may not ex6 pend any amount paid under subsection (a)(1)

7 for any fiscal year after the end of the imme8 diately succeeding fiscal year.

9 ‘‘(B) PLAN DEVELOPMENT.—A State may

10 not expend any amount paid under subsection

11 (a)(2) after the end of fiscal year 1994.

12 ‘‘(c) DIRECT PAYMENTS TO TRIBAL ORGANIZATIONS

13 OF INDIAN TRIBES.—The Secretary shall pay any amount

14 to which an Indian tribe is entitled under this section di15 rectly to the tribal organization of the Indian tribe.

16 ‘‘SEC. 435. EVALUATIONS; REPORT.

17 ‘‘(a) EVALUATIONS.—

18 ‘‘(1) IN GENERAL.—The Secretary shall evalu19 ate the effectiveness of the programs carried out

20 pursuant to this subpart in accomplishing the pur21 poses of this subpart, in accordance with criteria es22 tablished in accordance with paragraph (2).

23 ‘‘(2) CRITERIA TO BE USED.—In developing the

24 criteria to be used in evaluations under paragraph
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1 (1), the Secretary shall consult with appropriate par2 ties, such as—

3 ‘‘(A) State agencies administering pro4 grams under this part and part E;

5 ‘‘(B) persons administering child and fam6 ily services programs (including family preser7 vation and family support programs) for pri8 vate, nonprofit organizations with an interest in

9 child welfare; and

10 ‘‘(C) other persons with recognized exper11 tise in the evaluation of child and family serv12 ices programs (including family preservation

13 and family support programs) or other related

14 programs.

15 ‘‘(b) REPORT TO THE CONGRESS.—Not later than

16 December 31, 1997, the Secretary shall submit to the

17 Congress a report containing findings with respect to the

18 evaluations required by subsection (a).

19 ‘‘(c) COORDINATION OF EVALUATIONS.—The Sec20 retary shall develop procedures to coordinate evaluations

21 under this section, to the extent feasible, with evaluations

22 by the States of the effectiveness of programs under this

23 subpart.’’.

24 (b) CONFORMING AMENDMENTS.—

25 (1) Section 422 (42 U.S.C. 622) is amended—
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1 (A) in subsection (a), by striking ‘‘this

2 part’’ and inserting ‘‘this subpart’’;

3 (B) in subsection (b), by striking ‘‘this

4 part’’ each place such term appears and insert5 ing ‘‘this subpart’’; and

6 (C) in subsection (b)(2), by inserting

7 ‘‘under the State plan approved under subpart

8 2 of this part,’’ after ‘‘part A of this title,’’.

9 (2) Section 423(a) (42 U.S.C. 623(a)) is

10 amended by striking ‘‘this part’’ and inserting ‘‘this

11 subpart’’.

12 (3) Section 428(a) (42 U.S.C. 628(a)) is

13 amended by striking ‘‘this part’’ each place such

14 term appears and inserting ‘‘this subpart’’.

15 (4) Section 471(a)(2) (42 U.S.C. 671(a)(2)) is

16 amended by inserting ‘‘subpart 1 of’’ before ‘‘part

17 B’’.

18 (c) EFFECTIVE DATE.—The amendments made by

19 this section shall be effective with respect to calendar

20 quarters beginning on or after October 1, 1993.

21 SEC. 13212. GRANTS FOR STATE COURTS TO ASSESS AND

22 IMPROVE HANDLING OF PROCEEDINGS RE23 LATING TO FOSTER CARE AND ADOPTION.

24 (a) IN GENERAL.—The Secretary shall make grants,

25 in accordance with this section, to the highest State courts
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1 in States participating in the program under part E of

2 title IV of the Social Security Act, for the purpose of ena3 bling such courts—

4 (1) to conduct assessments, in accordance with

5 subsection (b), of the role, responsibilities, and effec6 tiveness of State courts in carrying out State laws

7 requiring proceedings (conducted by or under the su8 pervision of the courts)—

9 (A) to determine the advisability or appro10 priateness of foster care placement;

11 (B) to determine whether to terminate pa12 rental rights; and

13 (C) to legally recognize the adoption of a

14 child; and

15 (2) to implement changes deemed necessary as

16 a result of the assessments.

17 (b) ASSESSMENTS.—Each assessment conducted with

18 funds provided under this section shall—

19 (1) identify the requirements imposed on State

20 courts with respect to proceedings described in sub21 section (a), addressing separately—

22 (A) rules, standards, and criteria imposed

23 pursuant to State laws (including laws imple24 menting parts B and E of title IV of the Social

25 Security Act, laws relating to child abuse and
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1 neglect, or any other laws on related matters)

2 to be applied in determinations with respect to

3 placement of a child, or with respect to related

4 matters concerning the parent-child relationship

5 and the welfare of the child, including

6 determinations—

7 (i) whether to remove a child from or

8 return a child to the home of the child;

9 (ii) whether to place a child in foster

10 care or to continue a foster care place11 ment;

12 (iii) whether to terminate parental

13 rights;

14 (iv) whether to place a child for adop15 tion or in another permanent arrangement;

16 and

17 (v) whether to set aside or to finalize

18 an adoption; and

19 (B) rules and procedures, established by or

20 under State law or adopted by the State court

21 system on its own initiative, with respect to the

22 conduct of such proceedings, that address mat23 ters such as—

24 (i) whether a proceeding should be ju25 dicial or administrative;
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1 (ii) timetables for such proceedings,

2 and determinations of the priority of such

3 proceedings relative to other matters under

4 the jurisdiction of the State courts;

5 (iii) procedural safeguards of the

6 rights of parents (including foster and

7 adoptive parents), guardians, and children,

8 such as provisions for legal representation

9 and for guardians ad litem; and

10 (iv) rules for conduct of the proceed11 ing with respect to matters such as admis12 sible evidence, opportunity to present wit13 nesses, and time limits on the presentation

14 of evidence and the making of arguments;

15 (2) evaluate the performance of the State

16 courts in implementing the requirements identified

17 under paragraph (1), by assessing—

18 (A) the extent to which particular practices

19 or procedures have been successful in facilitat20 ing compliance with such requirements;

21 (B) the frequency of failures to comply

22 with any such requirements, and patterns with

23 respect to the circumstances of and factors con24 tributing to the failures; and
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1 (C) the extent to which caseload size and

2 resource limitations contribute to the failures

3 identified pursuant to subparagraph (B);

4 (3) determine the extent to which the rules and

5 practices identified under paragraph (1) or (2) are

6 in accord with recommended standards of national

7 organizations concerned with permanent placement

8 for foster children;

9 (4) determine, from the standpoint of the State

10 courts, the extent to which particular requirements

11 under paragraph (1)—

12 (A) are facilitating or impeding achieve13 ment of the purposes of such parts B and E,

14 including the goal of appropriate permanent

15 placement for each child; and

16 (B) are imposing significant administrative

17 burdens on the State court system; and

18 (5) make specific recommendations for improve19 ment, based on the conclusions reached as a result

20 of activities described in paragraphs (1) through (4),

21 including recommendations for—

22 (A) changes in Federal or State laws, reg23 ulations, or policies;

24 (B) changes in procedures and practices of

25 the State courts and of the State agencies ad-
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1 ministering foster care, adoption, child welfare,

2 and child protective services programs;

3 (C) additional education or training of

4 State court judges, or of personnel of the judi5 cial system or of the State agencies described in

6 subparagraph (B);

7 (D) collection or dissemination of addi8 tional data or information for purposes of in9 creasing the understanding of personnel of

10 State courts and State agencies of matters re11 lating to case review proceedings in general, or

12 to specific case review proceedings; and

13 (E) increases in manpower, reductions in

14 the number of case reviews, or other changes

15 needed to enable the State courts to better

16 manage their caseloads with respect to such

17 proceedings.

18 (c) APPLICATIONS.—In order to be eligible for a

19 grant under this section, a highest State court shall sub20 mit to the Secretary, at such time and in such form as

21 the Secretary may require, an application containing—

22 (1) a timetable for conducting and completing

23 the assessment;

24 (2) a budget for the assessment;
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1 (3) a description of the methods to be used to

2 select State courts for inclusion in, and to conduct,

3 the assessment;

4 (4) certifications by the head of the State agen5 cy administering the State program under such part

6 E, and by the State foster care citizen review board

7 or State organization of such review boards (if any),

8 that such entities have had an opportunity to review

9 and comment on a draft of the application before its

10 submission, and a copy of such comments;

11 (5) a description of the process to be used by

12 the court to consult with the entities referred to in

13 paragraph (4) of this subsection in conducting the

14 assessment under subsection (b);

15 (6) an assurance that, to the extent funds pro16 vided under this section are not necessary to com17 plete the assessment under subsection (b), the court

18 will use such funds to implement, to the extent fea19 sible, recommendations made pursuant to subsection

20 (b)(5);

21 (7) an assurance that funds provided under this

22 section will not be used to supplant State or local

23 funds which would otherwise be used for similar

24 purposes;

25 (8) a commitment to furnish to the Secretary—
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1 (A) an interim report following the end of

2 the 2nd year of assessment activities under this

3 section; and

4 (B) a final report following the completion

5 of the assessment; and

6 (9) any other information the Secretary may

7 require.

8 (d) ALLOTMENTS.—

9 (1) IN GENERAL.—Each highest State court

10 which has an application approved under subsection

11 (c), and is conducting assessment activities in ac12 cordance with this section, shall be entitled to pay13 ment, for each of fiscal years 1995 through 1998,

14 from amounts reserved pursuant to section

15 430(b)(2) of the Social Security Act, of an amount

16 equal to the sum of—

17 (A) for fiscal year 1995, $75,000 plus the

18 amount described in paragraph (2) for fiscal

19 year 1995; and

20 (B) for each of fiscal years 1996 through

21 1998, $85,000 plus the amount described in

22 paragraph (2) for each of such fiscal years.

23 (2) FORMULA.—The amount described in this

24 paragraph for any fiscal year is the amount that

25 bears the same ratio to the amount reserved pursu-
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1 ant to section 430(b)(2) of the Social Security Act

2 for the fiscal year (reduced by the dollar amount

3 specified in paragraph (1) of this subsection for the

4 fiscal year) as the number of individuals in the State

5 who have not attained 21 years of age bears to the

6 total number of such individuals in all States the

7 highest State courts of which have approved applica8 tions under subsection (c).

9 (e) USE OF GRANT FUNDS.—Each highest State

10 court which receives funds paid under this section may

11 use such funds to pay—

12 (1) any or all costs of activities under this sec13 tion in fiscal year 1995; and

14 (2) not more than 75 percent of the cost of ac15 tivities under this section in each of fiscal years

16 1996, 1997, and 1998.

17 SEC. 13213. REQUIRED PROTECTIONS FOR FOSTER CHIL18 DREN.

19 (a) IN GENERAL.—Section 422(b) (42 U.S.C.

20 622(b)) is amended—

21 (1) by striking ‘‘and’’ at the end of paragraph

22 (7);

23 (2) by striking the period at the end of para24 graph (8) and inserting ‘‘; and’’; and

25 (3) by adding at the end the following:
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1 ‘‘(9) provide assurances that the State—

2 ‘‘(A) since June 17, 1980, has completed

3 an inventory of all children who, before the in4 ventory, had been in foster care under the re5 sponsibility of the State for 6 months or more,

6 which determined—

7 ‘‘(i) the appropriateness of, and neces8 sity for, the foster care placement;

9 ‘‘(ii) whether the child could or should

10 be returned to the parents of the child or

11 should be freed for adoption or other per12 manent placement; and

13 ‘‘(iii) the services necessary to facili14 tate the return of the child or the place15 ment of the child for adoption or legal

16 guardianship;

17 ‘‘(B) is operating, to the satisfaction of the

18 Secretary—

19 ‘‘(i) a statewide information system

20 from which can be readily determined the

21 status, demographic characteristics, loca22 tion, and goals for the placement of every

23 child who is (or, within the immediately

24 preceding 12 months, has been) in foster

25 care;
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1 ‘‘(ii) a case review system (as defined

2 in section 475(5)) for each child receiving

3 foster care under the supervision of the

4 State;

5 ‘‘(iii) a service program designed to

6 help children—

7 ‘‘(I) where appropriate, return to

8 families from which they have been

9 removed; or

10 ‘‘(II) be placed for adoption, with

11 a legal guardian, or, if adoption or

12 legal guardianship is determined not

13 to be appropriate for a child, in some

14 other planned, permanent living ar15 rangement; and

16 ‘‘(iv) a preplacement preventive serv17 ices program designed to help children at

18 risk of foster care placement remain with

19 their families; and

20 ‘‘(C)(i) has reviewed (or within 12 months

21 after the date of the enactment of this para22 graph will review) State laws and administra23 tive and judicial procedures in effect for chil24 dren abandoned at or shortly after birth (in-
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1 cluding laws and procedures providing for legal

2 representation of such children); and

3 ‘‘(ii) has enacted and is implementing (or

4 within 24 months after the date of the enact5 ment of this paragraph will enact and imple6 ment) such laws and procedures as the State

7 determines, on the basis of the review described

8 in clause (i), to be necessary to enable perma9 nent decisions to be made expeditiously with re10 spect to the placement of such children.’’.

11 (b) RESTRICTION ON REALLOTMENT.—Section 424

12 (42 U.S.C. 624) is amended—

13 (1) in the 1st sentence, by striking ‘‘The

14 amount’’ and inserting the following:

15 ‘‘(a) IN GENERAL.—Subject to subsection (b), the

16 amount’’; and

17 (2) by adding at the end the following:

18 ‘‘(b) EXCEPTION RELATING TO FOSTER CHILD PRO19 TECTIONS.—The Secretary shall not reallot under sub20 section (a) of this section any amount that is withheld or

21 recovered from a State due to the failure of the State to

22 comply with section 422(b)(9).’’.

23 (c) REPEAL.—Section 427 (42 U.S.C. 627) is hereby

24 repealed.

25 (d) CONFORMING AMENDMENTS.—
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1 (1) Section 423(a) (42 U.S.C. 623(a)) is

2 amended by striking ‘‘and in section 427’’.

3 (2) Section 425(a)(2) (42 U.S.C. 625(a)(2)) is

4 amended by striking ‘‘the statistical report required

5 by section’’ and inserting ‘‘with section 422(b)(9)

6 or’’.

7 (3) Section 472(d) (42 U.S.C. 672(d)) is

8 amended by striking ‘‘427(b)’’ and inserting

9 ‘‘422(b)(9)’’.

10 (e) EFFECTIVE DATE.—The amendments and repeal

11 made by this section shall be effective for fiscal years be12 ginning on or after October 1, 1994.

13 (f) CONSTRUCTION OF SECTION.—This section and

14 the amendments and repeal made by this section shall not

15 be construed to permit any State to interrupt the provision

16 of the foster care protections described in section 427 of

17 the Social Security Act, as in effect on the effective date

18 of such amendments and repeal.

19 SEC. 13214. STATES REQUIRED TO REPORT ON MEASURES

20 TAKEN TO COMPLY WITH THE INDIAN CHILD

21 WELFARE ACT.

22 (a) STATE PLAN REQUIREMENT.—Section 422(b)

23 (42 U.S.C. 622(b)), as amended by section 13213(a) of

24 this Act, is amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (8);

3 (2) by striking the period at the end of para4 graph (9) and inserting ‘‘; and’’; and

5 (3) by adding at the end the following:

6 ‘‘(10) contain a description, developed after

7 consultation with tribal organizations (as defined in

8 section 4 of the Indian Self-Determination and Edu9 cation Assistance Act) in the State, of the specific

10 measures taken by the State to comply with the In11 dian Child Welfare Act.’’.

12 (b) EFFECTIVE DATE.—The amendments made by

13 subsection (a) shall be effective with respect to calendar

14 quarters beginning on or after October 1, 1994.

15 SEC. 13215. CHILD WELFARE TRAINEESHIPS.

16 (a) IN GENERAL.—Part B of title IV (42 U.S.C.

17 620–628) is amended by inserting after section 428 the

18 following:

19 ‘‘SEC. 429. CHILD WELFARE TRAINEESHIPS.

20 ‘‘The Secretary may approve an application for a

21 grant to a public or nonprofit institution for higher learn22 ing to provide traineeships with stipends under section

23 426(a)(1)(C) only if the application—

24 ‘‘(1) provides assurances that each individual

25 who receives a stipend with such traineeship (in this
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1 section referred to as a ‘recipient’) will enter into an

2 agreement with the institution under which the

3 recipient agrees—

4 ‘‘(A) to participate in training at a public

5 or private nonprofit child welfare agency on a

6 regular basis (as determined by the Secretary)

7 for the period of the traineeship;

8 ‘‘(B) to be employed for a period of years

9 equivalent to the period of the traineeship, in a

10 public or private nonprofit child welfare agency

11 in any State, within a period of time (deter12 mined by the Secretary in accordance with

13 regulations) after completing the postsecondary

14 education for which the traineeship was

15 awarded;

16 ‘‘(C) to furnish to the institution and the

17 Secretary evidence of compliance with subpara18 graphs (A) and (B); and

19 ‘‘(D) if the recipient fails to comply with

20 subparagraph (A) or (B) and does not qualify

21 for any exception to this subparagraph which

22 the Secretary may prescribe in regulations, to

23 repay to the Secretary all (or an appropriately

24 prorated part) of the amount of the stipend,

25 plus interest, and, if applicable, reasonable col-
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1 lection fees (in accordance with regulations pro2 mulgated by the Secretary);

3 ‘‘(2) provides assurances that the institution

4 will—

5 ‘‘(A) enter into agreements with child wel6 fare agencies for onsite training of recipients;

7 ‘‘(B) permit an individual who is employed

8 in the field of child welfare services to apply for

9 a traineeship with a stipend if the traineeship

10 furthers the progress of the individual toward

11 the completion of degree requirements; and

12 ‘‘(C) develop and implement a system that,

13 for the 3-year period that begins on the date

14 any student completes a child welfare services

15 program of study, tracks the employment

16 record of the student, for the purpose of deter17 mining the percentage of students who secure

18 employment in the field of child welfare services

19 and remain employed in the field.’’.

20 (b) CONFORMING AMENDMENT.—Section

21 426(a)(1)(C) (42 U.S.C. 626(a)(1)(C)) is amended by in22 serting ‘‘described in section 429’’ after ‘‘including

23 traineeships’’.
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1 (c) APPLICABILITY.—The amendments made by this

2 section shall apply to grants awarded on or after April

3 1, 1994.

4 SEC. 13216. DISSOLVED ADOPTIONS.

5 (a) ELIGIBILITY FOR FOSTER CARE MAINTENANCE

6 PAYMENTS.—Section 472 (42 U.S.C. 672) is amended—

7 (1) in subsection (b), by inserting ‘‘or (i)’’ after

8 ‘‘subsection (a)’’; and

9 (2) by adding at the end the following:

10 ‘‘(i) Any State with a plan approved under this part

11 may make foster care maintenance payments under this

12 part on behalf of a child—

13 ‘‘(1) with respect to whom such payments were

14 previously made;

15 ‘‘(2) whose adoption has been set aside by a

16 court;

17 ‘‘(3) who meets the requirements of paragraphs

18 (1), (2), and (3) of subsection (a); and

19 ‘‘(4) who fails to meet the requirements of sub20 section (a)(4) but would meet such requirements

21 if—

22 ‘‘(A) the child were treated as if the child

23 were in the same financial and other cir24 cumstances the child was in the last time the
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1 child was determined eligible for such pay2 ments; and

3 ‘‘(B) the adoption were treated as having

4 never occurred.’’.

5 (b) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to payments under part E of title

7 IV of the Social Security Act in fiscal years beginning on

8 or after October 1, 1995.

9 SEC. 13217. TIME FRAME FOR JUDICIAL DETERMINATIONS

10 ON VOLUNTARY PLACEMENTS.

11 (a) IN GENERAL.—Section 472(e) (42 U.S.C. 672(e))

12 is amended—

13 (1) by striking ‘‘No’’ and inserting ‘‘(1) Except

14 as provided in paragraph (2), no’’; and

15 (2) by adding at the end the following:

16 ‘‘(2) If the judicial determination referred to in

17 paragraph (1) is made after the 180-day period de18 scribed therein, the payments referred to therein

19 may not be made for the period that begins at the

20 end of the 180-day period and ends 180 days after

21 the date of the judicial determination, but shall (un22 less otherwise prohibited) be made for periods there23 after.’’.

24 (b) EFFECTIVE DATE.—The amendments made by

25 subsection (a) shall be effective with respect to foster care
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1 maintenance payments made, under State plans in fiscal

2 year 1996 and succeeding fiscal years, on behalf of chil3 dren placed in foster care on or after October 1, 1995.

4 SEC. 13218. STUDY OF REASONABLE EFFORTS.

5 (a) IN GENERAL.—The Secretary of Health and

6 Human Services shall conduct a study of the implementa7 tion by the States of section 471(a)(15) of the Social Secu8 rity Act, giving particular attention to—

9 (1) standards used by States in determining

10 what action to take, and whether and for how long

11 to continue efforts—

12 (A) before the placement of a child in fos13 ter care, to prevent or eliminate the need for re14 moval of the child from the home of the child;

15 and

16 (B) to return a child home rather than to

17 seek some other planned, permanent placement;

18 and

19 (2) the responses of the courts to the State ac20 tions described in paragraph (1) of this subsection,

21 including whether such responses facilitate or im22 pede the achievement by State agencies of the objec23 tives of such section 471(a)(15).

24 (b) REPORT AND RECOMMENDATIONS.—Within 18

25 months after the date of the enactment of this Act, the
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1 Secretary of Health and Human Services shall submit to

2 the Congress a report, with such recommendations as the

3 Secretary finds appropriate, based on the results of the

4 study required by subsection (a) of this section, which de5 scribes State practices that the Secretary has found effec6 tive in achieving the objectives of section 471(a)(15) of

7 the Social Security Act, and, if appropriate, shall set forth

8 model practices for consideration by the States.

9 SEC. 13219. ENHANCED MATCH FOR AUTOMATED DATA

10 SYSTEMS.

11 (a) PAYMENTS TO STATES.—

12 (1) IN GENERAL.—Section 474(a)(3) (42

13 U.S.C. 674(a)(3)) is amended—

14 (A) by striking ‘‘and’’ at the end of sub15 paragraph (B);

16 (B) by redesignating subparagraph (C) as

17 subparagraph (E); and

18 (C) by inserting after subparagraph (B)

19 the following:

20 ‘‘(C) 90 percent of so much of such ex21 penditures as are for the planning, design, de22 velopment, or installation of statewide mecha23 nized data collection and information retrieval

24 systems (including 90 percent of the full

25 amount of expenditures for hardware compo-
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1 nents for such systems) but only to the extent

2 that such systems—

3 ‘‘(i) meet the requirements imposed

4 by regulations promulgated pursuant to

5 section 479(b)(2);

6 ‘‘(ii) to the extent practicable, are ca7 pable of interfacing with the State data

8 collection system that collects information

9 relating to child abuse and neglect;

10 ‘‘(iii) to the extent practicable, have

11 the capability of interfacing with, and re12 trieving information from, the State data

13 collection system that collects information

14 relating to the eligibility of individuals

15 under part A (for the purposes of facilitat16 ing verification of eligibility of foster chil17 dren); and

18 ‘‘(iv) are determined by the Secretary

19 to be likely to provide more efficient, eco20 nomical, and effective administration of

21 the programs carried out under a State

22 plan approved under part B or this part;

23 and

24 ‘‘(D) 50 percent of so much of such ex25 penditures as are for the operation of the state-
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1 wide mechanized data collection and informa2 tion retrieval systems referred to in subpara3 graph (C); and’’.

4 (2) TREATMENT OF STATE EXPENDITURES FOR

5 DATA COLLECTION AND INFORMATION RETRIEVAL

6 SYSTEMS.—Section 474 (42 U.S.C. 674), as amend7 ed by section 13224 of this Act, is amended by add8 ing at the end the following:

9 ‘‘(c) AUTOMATED DATA COLLECTION EXPENDI10 TURES.—The Secretary shall treat as necessary for the

11 proper and efficient administration of the State plan all

12 expenditures of a State necessary in order for the State

13 to plan, design, develop, install, and operate data collec14 tion and information retrieval systems described in sub15 section (a)(3)(C), without regard to whether the systems

16 may be used with respect to foster or adoptive children

17 other than those on behalf of whom foster care mainte18 nance payments or adoption assistance payments may be

19 made under this part.’’.

20 (3) EFFECTIVE DATE.—The amendments made

21 by this subsection shall apply to expenditures during

22 fiscal years 1994, 1995, and 1996.

23 (b) TERMINATION OF ENHANCED MATCH.—

24 (1) IN GENERAL.—Section 474(a)(3)(C) (42

25 U.S.C. 674(a)(3)(C)), as amended by subsection (a)
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1 of this section, is amended by striking ‘‘90 percent’’

2 each place such term appears and inserting ‘‘50 per3 cent’’.

4 (2) EFFECTIVE DATE.—The amendment made

5 by paragraph (1) shall apply to expenditures during

6 fiscal years beginning on or after October 1, 1996.

7 SEC. 13220. PERIODIC REEVALUATION OF FOSTER CARE

8 MAINTENANCE PAYMENTS.

9 (a) IN GENERAL.—Section 471(a)(11) (42 U.S.C.

10 671(a)(11)) is amended—

11 (1) by inserting ‘‘(A)’’ after ‘‘(11)’’;

12 (2) by striking ‘‘and amounts paid as foster

13 care maintenance payments and adoption assist14 ance’’; and

15 (3) by adding at the end the following:

16 ‘‘(B) provides that, at least once every 3 years,

17 the State agency will review the amount paid as fos18 ter care maintenance payments and adoption assist19 ance payments to ensure their continuing appro20 priateness, and will submit to the Secretary (and

21 make available to the public) a report on the results

22 of the review, in such form and manner as the Sec23 retary may by regulation require, which contains, at

24 a minimum—
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1 ‘‘(i) a statement of the manner in which

2 the foster care maintenance payment level is de3 termined, including information on the cost of

4 foster care with respect to which such payments

5 are made;

6 ‘‘(ii) information on the amount of the

7 basic foster care maintenance payment level,

8 and as to whether such payment level includes

9 an amount to cover the cost of clothing, and

10 whether such payment level varies by the type

11 of care or the special needs or age of the child,

12 and, if so, the payment levels for each special

13 needs, care, or age category;

14 ‘‘(iii) if such payments are not made at a

15 different rate for children who test positive for

16 human immunodeficiency virus, have acquired

17 immune deficiency syndrome, are addicted to

18 drugs, suffer from complications due to expo19 sure to drugs or alcohol, or have other severe

20 special needs, the reasons therefor; and

21 ‘‘(iv) information on any limitations im22 posed by the State on adoption assistance pay23 ment levels;’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 this section shall be effective with respect to calendar

3 quarters beginning on or after October 1, 1994.

4 SEC. 13221. DISPOSITIONAL HEARING.

5 Section 475(5)(C) (42 U.S.C. 675(5)(C)) is amended

6 by striking ‘‘periodically’’ and inserting ‘‘not less fre7 quently than every 12 months’’.

8 SEC. 13222. HEALTH CARE PLANS FOR FOSTER CHILDREN.

9 (a) IN GENERAL.—Section 475(1)(C) (42 U.S.C.

10 675(1)(C)) is amended—

11 (1) in clause (vii), by striking ‘‘and’’; and

12 (2) by redesignating clause (viii) as clause (ix)

13 and inserting after clause (vii) the following:

14 ‘‘(viii) a record indicating that the child’s

15 foster care provider was advised (where appro16 priate) of the child’s eligibility for early and

17 periodic screening, diagnostic, and treatment

18 services under title XIX; and’’.

19 (b) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to case plans established or re21 viewed on or after January 1, 1994.

22 SEC. 13223. INDEPENDENT LIVING.

23 (a) TREATMENT OF ASSETS OF PARTICIPATING

24 YOUTHS.—Section 477 (42 U.S.C. 677) is amended—
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1 (1) by redesignating subsection (i) as subsection

2 (j); and

3 (2) by inserting after subsection (h) the follow4 ing:

5 ‘‘(i) Notwithstanding any other provision of this title,

6 with respect to a child who is included in a program estab7 lished by a State agency under subsection (a), an amount

8 of the assets of the child which would otherwise be re9 garded as resources for purposes of determining eligibility

10 for benefits under this title may be disregarded for the

11 purpose of allowing the child to establish a household, pur12 sue education, or otherwise complete the transition to

13 independent living. The amount disregarded may not ex14 ceed an amount determined by the State agency to be rea15 sonable for such purposes.’’.

16 (b) PERMANENT EXTENSION OF PROGRAM.—Section

17 477 (42 U.S.C. 677) is amended—

18 (1) in subsection (a)(1), by striking the 3rd

19 sentence;

20 (2) in subsection (c), by striking ‘‘of the fiscal

21 years 1988 through 1992’’ and inserting ‘‘succeed22 ing fiscal year’’;

23 (3) in subsection (e)(1)(A), by striking ‘‘each of

24 the fiscal years 1987 through 1992’’ and inserting

25 ‘‘fiscal year 1987 and any succeeding fiscal year’’;
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1 (4) in subsection (e)(1)(B), by striking ‘‘fiscal

2 years 1991 and 1992’’ and inserting ‘‘fiscal year

3 1991 and any succeeding fiscal year’’; and

4 (5) in subsection (e)(1)(C)(ii), by striking ‘‘fis5 cal year 1992’’ and inserting ‘‘any succeeding fiscal

6 year’’.

7 (c) EFFECTIVE DATES.—

8 (1) TREATMENT OF ASSETS OF PARTICIPATING

9 YOUTHS.—The amendments made by subsection (a)

10 shall apply to activities in fiscal years beginning on

11 or after October 1, 1995.

12 (2) PERMANENT EXTENSION OF PROGRAM.—

13 The amendments made by subsection (b) shall apply

14 to activities engaged in on or after October 1, 1992.

15 SEC. 13224. ELIMINATION OF FOSTER CARE CEILINGS AND

16 OF AUTHORITY TO TRANSFER UNUSED FOS17 TER CARE FUNDS TO CHILD WELFARE SERV18 ICES PROGRAMS.

19 (a) REPEAL.—Subsections (b) and (c) of section 474

20 (42 U.S.C. 674(b) and (c)) are hereby repealed.

21 (b) CONFORMING AMENDMENTS.—Section 474 (42

22 U.S.C. 674) is amended—

23 (1) in subsection (d)(1)—

24 (A) by striking ‘‘subsections (a), (b), and

25 (c)’’ and inserting ‘‘subsection (a)’’; and
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1 (B) by striking ‘‘the provisions of such

2 subsections’’ and inserting ‘‘subsection (a)’’;

3 and

4 (2) by redesignating subsection (d) as sub5 section (b).

6 (c) EFFECTIVE DATE.—The amendments and repeal

7 made by this section shall apply to payments for calendar

8 quarters beginning on or after October 1, 1993.

9 SEC. 13225. TRAINING OF AGENCY STAFF AND FOSTER

10 AND ADOPTIVE PARENTS.

11 (a) IN GENERAL.—Section 8006(b) of the Omnibus

12 Budget Reconciliation Act of 1989 (42 U.S.C. 674 note)

13 is amended by striking ‘‘, and before October 1, 1992’’.

14 (b) RETROACTIVE APPLICABILITY.—The Social Secu15 rity Act shall be applied and administered as if the amend16 ment made by subsection (a) had been made on October

17 1, 1992.

18 SEC. 13226. ON-SITE REVIEWS AND AUDITS OF STATE

19 CLAIMS FOR FOSTER CARE AND ADOPTION

20 ASSISTANCE.

21 (a) ON-SITE REVIEWS AND AUDITS OF STATE

22 CLAIMS.—Section 474 (42 U.S.C. 674), as amended by

23 sections 13224 and 13219(a)(2) of this Act, is amended—

24 (1) by redesignating subsection (c) as sub25 section (d); and
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1 (2) by inserting after subsection (b) the follow2 ing:

3 ‘‘(c) ON-SITE REVIEWS AND AUDITS OF STATE

4 CLAIMS FOR PAYMENT.—

5 ‘‘(1) REGULATIONS SPECIFYING REVIEW

6 STANDARDS.—The Secretary shall promulgate regu7 lations applicable to on-site reviews and audits of

8 State expenditures for foster care maintenance pay9 ments and adoption assistance payments under this

10 part, which specify—

11 ‘‘(A) the criteria to be used to determine

12 the appropriateness of expenditures identified in

13 sampled case files;

14 ‘‘(B) the criteria to be used to determine

15 the appropriateness of expenditures for child

16 placement services and plan administration; and

17 ‘‘(C) the types of erroneous expenditures

18 which will be disregarded for purposes of deter19 mining the appropriateness of payments under

20 this part (including erroneous payments result21 ing from the State’s reliance upon and correct

22 use of formal written statements of Federal law

23 or policy provided to the State by the Sec24 retary).
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1 ‘‘(2) DEVELOPMENT AND PUBLICATION OF

2 WRITTEN STANDARDS AND PROCEDURES.—The Sec3 retary, after consultation with organizations rep4 resenting State and local governmental agencies with

5 responsibility for foster care and adoption services

6 and other relevant agencies and organizations, shall

7 develop and furnish to State agencies a written de8 scription of the methods and procedures to be used

9 in the on-site audits and reviews referred to in para10 graph (1), which specify—

11 ‘‘(A) the methods and procedures to be

12 used to select a sample of case files for review

13 or audit;

14 ‘‘(B) the procedures to be used in review15 ing or auditing sampled case files to determine

16 erroneous expenditures;

17 ‘‘(C) the procedures to be used to review or

18 audit State expenditures for child placement

19 services and plan administration; and

20 ‘‘(D) the methodology to be used to ex21 trapolate from review or audit findings to all

22 expenditures under the State plan.

23 ‘‘(3) ADVANCE NOTICE TO STATES.—The Sec24 retary shall not, in a review or audit of State ex25 penditures during a fiscal year, use any criterion
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1 specified pursuant to paragraph (1), or any proce2 dure or methodology specified pursuant to para3 graph (2), which was not published in final regula4 tions or furnished in writing to the State (as appli5 cable) at least 3 months before the beginning of the

6 fiscal year.’’.

7 (b) EFFECTIVE DATE.—The amendment made by

8 subsection (a) shall apply to expenditures in fiscal years

9 beginning on or after October 1, 1994.

10 SEC. 13227. CONFORMITY REVIEWS.

11 (a) IN GENERAL.—Part A of title XI (42 U.S.C.

12 1301–1320b–13) is amended by inserting after section

13 1122 the following:

14 ‘‘SEC. 1123. REVIEWS OF CHILD AND FAMILY SERVICES

15 PROGRAMS, AND OF FOSTER CARE AND

16 ADOPTION ASSISTANCE PROGRAMS, FOR

17 COMPLIANCE WITH STATE PLAN REQUIRE18 MENTS.

19 ‘‘(a) IN GENERAL.—The Secretary shall not impose

20 a financial penalty on any State for any failure of the

21 State programs under parts B and E of title IV to comply

22 with any requirement of any State plan approved under

23 such part B or E, except pursuant to final regulations,

24 developed after consultation with State agencies admin-
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1 istering such programs, which meet the requirements of

2 this section.

3 ‘‘(b) ELEMENTS OF REVIEW SYSTEM.—The regula4 tions referred to in subsection (a) shall—

5 ‘‘(1) specify the timetable for compliance re6 views of State programs, which—

7 ‘‘(A) shall provide for annual reviews of

8 each State program during the 1st 2 years of

9 operation;

10 ‘‘(B) shall provide for review of a State

11 program not later than 1 year following a re12 view in which the State program was found not

13 to be in substantial compliance with plan re14 quirements; and

15 ‘‘(C) may provide for less frequent reviews

16 of State programs which have been found to be

17 in substantial compliance with plan require18 ments, but shall permit the Secretary to rein19 state more frequent reviews based on informa20 tion which indicates that the State program

21 may not be in compliance with plan require22 ments;

23 ‘‘(2) specify the plan requirements subject to

24 review, and the criteria to be used to measure com25 pliance with such requirements and to determine
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1 whether there is a substantial failure to comply with

2 a plan requirement;

3 ‘‘(3) specify the method to be used to determine

4 the financial penalty to be imposed (subject to para5 graph (4)) for a failure to comply with plan require6 ments, which ensures that—

7 ‘‘(A) a financial penalty will not be im8 posed with respect to a program, unless it is de9 termined that the program fails substantially to

10 so comply;

11 ‘‘(B) a financial penalty will not be im12 posed for a failure to so comply resulting from

13 the State’s reliance upon and correct use of for14 mal written statements of Federal law or policy

15 provided to the State by the Secretary; and

16 ‘‘(C) the amount of financial penalty is re17 lated to the extent of the noncompliance; and

18 ‘‘(4) require the Secretary, with respect to any

19 State found to have failed substantially to comply

20 with plan requirements—

21 ‘‘(A) to afford the State an opportunity to

22 adopt and implement a corrective action plan,

23 approved by the Secretary, designed to end the

24 noncompliance;
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1 ‘‘(B) to make technical assistance available

2 to the State to the extent necessary to enable

3 the State to develop and implement such a cor4 rective action plan;

5 ‘‘(C) to suspend the imposition of any pen6 alty under this section while such a corrective

7 action plan is in effect; and

8 ‘‘(D) to rescind any such penalty if the

9 noncompliance is ended by successful comple10 tion of such a corrective action plan.

11 ‘‘(c) PROVISIONS FOR ADMINISTRATIVE AND JUDI12 CIAL REVIEW.—The regulations referred to in subsection

13 (a) shall—

14 ‘‘(1) require the Secretary, not later than 10

15 days after a determination that a program of the

16 State is not in compliance with applicable plan

17 requirements, to notify the State of—

18 ‘‘(A) the basis for the determination; and

19 ‘‘(B) the amount of the financial penalty

20 (if any) imposed on the State;

21 ‘‘(2) afford the State an opportunity to appeal

22 the determination to the Departmental Appeals

23 Board within 60 days after receipt of the notice de24 scribed in paragraph (1) (or, if later, after failure to
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1 continue or to complete a corrective action plan);

2 and

3 ‘‘(3) afford the State an opportunity to obtain

4 judicial review of an adverse decision of the Board,

5 within 60 days after the State receives notice of the

6 decision of the Board, by appeal to the district court

7 of the United States for the judicial district in which

8 the principal or headquarters office of the agency re9 sponsible for administering the program is located.’’.

10 (b) CONFORMING AMENDMENT.—Section 471(b) (42

11 U.S.C. 671(b)) is amended by striking all that follows the

12 1st sentence.

13 (c) EFFECTIVE DATE.—The amendments made by

14 subsections (a) and (b) shall take effect on the date of

15 the enactment of this Act.

16 (d) CONSTRUCTION.—This section shall not be con17 strued to prevent the Secretary, before the effective date

18 of final regulations meeting the requirements of section

19 1123 of the Social Security Act, from conducting compli20 ance reviews of State programs under parts B and E of

21 such Act for the purpose of providing information and

22 technical assistance to States concerning corrective actions

23 needed in order to comply with plan requirements applica24 ble to such programs.
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1 SEC. 13228. REPEAL OF ANNUAL REPORT ON VOLUNTARY

2 PLACEMENT.

3 Section 102(e) of the Adoption Assistance and Child

4 Welfare Act of 1980 (42 U.S.C. 672 note) is hereby

5 repealed.

6 SEC. 13229. DEMONSTRATION PROJECTS.

7 Part A of title XI (42 U.S.C. 1301–1320b–13) is

8 amended by inserting after section 1128B the following:

9 ‘‘SEC. 1129. DEMONSTRATION PROJECTS.

10 ‘‘(a) IN GENERAL.—The Secretary may authorize not

11 more than 10 States to conduct demonstration projects

12 pursuant to this section which the Secretary finds are like13 ly to promote the objectives of part B or E of title IV.

14 ‘‘(b) WAIVER AUTHORITY.—The Secretary may

15 waive compliance with any requirement of part B or E

16 of title IV which (if applied) would prevent a State from

17 carrying out a demonstration project under this section

18 or prevent the State from effectively achieving the purpose

19 of such a project, except that the Secretary may not

20 waive—

21 ‘‘(1) any provision of section 427 (as in effect

22 before October 1, 1994), section 422(b)(9) (as in ef23 fect after such date), or section 479; or

24 ‘‘(2) any provision of such part E, to the extent

25 that the waiver would impair the entitlement of any
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1 qualified child or family to benefits under a State

2 plan approved under such part E.

3 ‘‘(c) TREATMENT AS PROGRAM EXPENDITURES.—

4 For purposes of parts B and E of title IV, the Secretary

5 shall consider the expenditures of any State to conduct

6 a demonstration project under this section to be expendi7 tures under subpart 1 or 2 of such part B, or under such

8 part E, as the State may elect.

9 ‘‘(d) DURATION OF DEMONSTRATION.—A dem10 onstration project under this section may be conducted for

11 not more than 5 years.

12 ‘‘(e) APPLICATION.—Any State seeking to conduct a

13 demonstration project under this section shall submit to

14 the Secretary an application, in such form as the Sec15 retary may require, which includes—

16 ‘‘(1) a description of the proposed project, the

17 geographic area in which the proposed project would

18 be conducted, the children or families who would be

19 served by the proposed project, and the services

20 which would be provided by the proposed project

21 (which shall provide, where appropriate, for random

22 assignment of children and families to groups served

23 under the project and to control groups);

24 ‘‘(2) a statement of the period during which the

25 proposed project would be conducted;
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1 ‘‘(3) a discussion of the benefits that are ex2 pected from the proposed project (compared to a

3 continuation of activities under the approved plan or

4 plans of the State);

5 ‘‘(4) an estimate of the costs or savings of the

6 proposed project;

7 ‘‘(5) a statement of program requirements for

8 which waivers would be needed to permit the pro9 posed project to be conducted;

10 ‘‘(6) a description of the proposed evaluation

11 design; and

12 ‘‘(7) such additional information as the Sec13 retary may require.

14 ‘‘(f) EVALUATIONS; REPORT.—Each State authorized

15 to conduct a demonstration project under this section

16 shall—

17 ‘‘(1) obtain an evaluation by an independent

18 contractor of the effectiveness of the project, using

19 an evaluation design approved by the Secretary

20 which provides for—

21 ‘‘(A) comparison of methods of service de22 livery under the project, and such methods

23 under a State plan or plans, with respect to ef24 ficiency, economy, and any other appropriate

25 measures of program management;
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1 ‘‘(B) comparison of outcomes for children

2 and families (and groups of children and fami3 lies) under the project, and such outcomes

4 under a State plan or plans, for purposes of as5 sessing the effectiveness of the project in

6 achieving program goals; and

7 ‘‘(C) any other information that the Sec8 retary may require; and

9 ‘‘(2) provide interim and final evaluation re10 ports to the Secretary, at such times and in such

11 manner as the Secretary may require.

12 ‘‘(g) COST NEUTRALITY.—The Secretary may not

13 authorize a State to conduct a demonstration project

14 under this section unless the Secretary determines that

15 the total amount of Federal funds that will be expended

16 under (or by reason of) the project over its approved term

17 (or such portion thereof or other period as the Secretary

18 may find appropriate) will not exceed the amount of such

19 funds that would be expended by the State under the State

20 plans approved under parts B and E of title IV if the

21 project were not conducted.’’.

22 SEC. 13230. PLACEMENT ACCOUNTABILITY.

23 (a) CASE PLAN REQUIREMENTS.—Section 475(5)(A)

24 (42 U.S.C. 675(5)(A)) is amended by adding at the end

25 the following: ‘‘which—
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1 ‘‘(i) if the child has been placed in a

2 foster family home or child-care institution

3 a substantial distance from the home of

4 the parents of the child, or in a State dif5 ferent from the State in which the home is

6 located, sets forth the reasons why such

7 placement is in the best interests of the

8 child, and

9 ‘‘(ii) if the child has been placed in

10 foster care outside the State, requires that,

11 at least every 6 months, a caseworker on

12 the staff of the State agency of the State

13 in which the home of the parents of the

14 child is located, or of the State in which

15 the child has been placed, visit such child

16 in such home or institution and submit a

17 report on such visit to the State agency of

18 the State in which the home of the parents

19 of the child is located,’’.

20 (b) DISPOSITIONAL HEARING.—Section 475(5)(C)

21 (42 U.S.C. 675(5)(C)) is amended by inserting ‘‘and, in

22 the case of a child described in subparagraph (A)(ii),

23 whether the out-of-State placement continues to be appro24 priate and in the best interests of the child,’’ after ‘‘long25 term basis)’’.
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1 (c) DATA COLLECTION.—Section 479(c)(3)(C) (42

2 U.S.C. 679(c)(3)(C)) is amended—

3 (1) by striking ‘‘and’’ at the end of clause (i);

4 and

5 (2) by adding at the end the following:

6 ‘‘(iii) children placed in foster care

7 outside the State, and’’.

8 (d) EFFECTIVE DATES.—The amendments made by

9 subsections (a), (b), and (c) shall be effective with respect

10 to fiscal years beginning on and after October 1, 1994.

11 SEC. 13231. PAYMENTS OF STATE CLAIMS FOR FOSTER

12 CARE AND ADOPTION ASSISTANCE.

13 Section 474(b) (42 U.S.C. 674(b)), as so redesig14 nated by section 13239(b)(2) of this Act, is amended by

15 adding at the end the following:

16 ‘‘(4)(A) Within 60 days after receipt of a State claim

17 for expenditures pursuant to subsection (a), the Secretary

18 shall allow, disallow, or defer such claim.

19 ‘‘(B) Within 15 days after a decision to defer such

20 a State claim, the Secretary shall notify the State of the

21 reasons for the deferral and of the additional information

22 necessary to determine the allowability of the claim.

23 ‘‘(C) Within 90 days after receiving such necessary

24 information (in readily reviewable form), the Secretary

25 shall—
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1 ‘‘(i) disallow the claim, if able to complete the

2 review and determine that the claim is not allowable,

3 or

4 ‘‘(ii) in any other case, allow the claim, subject

5 to disallowance (as necessary)—

6 ‘‘(I) upon completion of the review, if it is

7 determined that the claim is not allowable; or

8 ‘‘(II) on the basis of findings of an audit

9 or financial management review.’’.

10 SEC. 13232. MORATORIUM ON COLLECTION OF DISALLOW11 ANCES.

12 The Secretary of Health and Human Services shall

13 not—

14 (1) before October 1, 1994, reduce any pay15 ment to, withhold any payment from, or seek any re16 payment from any State under part B or E of title

17 IV of the Social Security Act by reason of a deter18 mination made in connection with a review of State

19 compliance with section 427 of such Act for any

20 Federal fiscal year before fiscal year 1995; or

21 (2) reduce any payment to, withhold any pay22 ment from, or seek any repayment from any State

23 under such part E by reason of a determination

24 made in connection with any on-site Federal finan-
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1 cial review, or any audit conducted by the Inspector

2 General using similar methodologies.

3 SEC. 13233. BORDER REGION CHILD WELFARE WORKER

4 TRAINING DEMONSTRATION.

5 (a) IN GENERAL.—The Secretary shall make grants

6 to not more than 5 eligible institutions to train individuals

7 to deliver culturally sensitive and bilingual child welfare

8 services in areas of the United States that border on Mex9 ico, 1 of which grants shall be for training to deliver child

10 welfare services to historically unserved or underserved

11 populations in an urban center with a high concentration

12 of such populations.

13 (b) APPLICATIONS.—The Secretary shall approve an

14 application of an institution for a grant under this section

15 only if the application—

16 (1) demonstrates to the satisfaction of the Sec17 retary that the institution has a history of, or a plan

18 for, training students to deliver culturally sensitive

19 and bilingual child welfare services in a border

20 county;

21 (2) provides assurances that the institution will

22 develop and implement, in consultation with the

23 child welfare agency of the State in which the insti24 tution is located, a curriculum in the field of child

25 welfare services which—
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1 (A) is sensitive to the culture of—

2 (i) the areas of the United States that

3 border on Mexico; or

4 (ii) in the case of the institution which

5 receives the urban center grant described

6 in subsection (a), the historically unserved

7 or underserved populations in the urban

8 center; and

9 (B) includes training for identification of

10 health problems of children and their families

11 and of child abuse and neglect;

12 (3) provides assurances that each individual

13 who receives a stipend with such training will enter

14 into an agreement with the institution under which

15 the individual agrees—

16 (A) to be employed for a period of years

17 equivalent to the period of such training, in a

18 public or private nonprofit family assistance

19 agency that provides services directly to resi20 dents of—

21 (i) the border county in which the

22 agency is located; or

23 (ii) in the case of the institution which

24 receives the urban center grant described
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1 in subsection (a), the urban center in

2 which the agency is located; and

3 (B) if the individual fails to be so em4 ployed for such period, to repay to the Sec5 retary, in accordance with such conditions as

6 the Secretary may prescribe, all or part of the

7 amount of the stipend, plus interest, and, if ap8 plicable, reasonable collection fees; and

9 (4) provides that each agreement entered into

10 with an individual pursuant to paragraph (3) will

11 fully disclose the terms and conditions under which

12 the stipend is to be provided.

13 (c) EVALUATIONS.—Each institution that receives a

14 grant under this section shall develop and carry out a plan

15 for evaluating the effects of the training provided under

16 the grant, and shall submit to the Secretary a report on

17 the evaluation.

18 (d) DEFINITIONS.—As used in this section:

19 (1) FAMILY ASSISTANCE AGENCY.—The term

20 ‘‘family assistance agency’’ means a child welfare

21 agency, family planning agency, hospital, clinic, com22 munity mental health facility, or drug and alcohol

23 treatment program.

24 (2) ELIGIBLE INSTITUTION.—The term ‘‘eligi25 ble institution’’ means a public or private nonprofit
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1 institution of higher learning that is located in a

2 State that contains a border county.

3 (3) BORDER COUNTY.—The term ‘‘border coun4 ty’’ means—

5 (A) a United States county that borders on

6 Mexico; and

7 (B) a United States county that borders

8 on a county described in subparagraph (A).

9 (4) URBAN CENTER.—The term ‘‘urban center’’

10 means an area in a metropolitan statistical area, as

11 designated by the Office of Management and Budg12 et, which has a high incidence of individuals in his13 torically unserved or underserved populations who

14 are in need of social services, as determined by the

15 Secretary using the most recent and best available

16 information.

17 (5) HISTORICALLY UNSERVED OR UNDER18 SERVED POPULATIONS.—The term ‘‘historically

19 unserved or underserved populations’’ includes—

20 (A) socially and economically disadvan21 taged populations;

22 (B) persons with limited English pro23 ficiency;

24 (C) populations residing in urban areas

25 and exhibiting a high incidence of child abuse,
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1 neglect, or abandonment, as determined by the

2 Secretary;

3 (D) homeless persons (within the meaning

4 of section 103 of the Stewart B. McKinney

5 Homeless Assistance Act);

6 (E) persons who are, or are in danger of

7 becoming, infected with the human

8 immunodeficiency virus; and

9 (F) persons who abuse alcohol or drugs.

10 (6) SECRETARY.—The term ‘‘Secretary’’ means

11 the Secretary of Health and Human Services.

12 (e) AUTHORIZATION OF APPROPRIATIONS.—There

13 are authorized to be appropriated such sums as may be

14 necessary to carry out this section.

15 SEC. 13234. EFFECT OF FAILURE TO CARRY OUT STATE

16 PLAN.

17 (a) IN GENERAL.—Part A of title XI (42 U.S.C.

18 1301–1320b–13), as amended by section 13229 of this

19 Act, is amended by inserting after section 1129 the follow20 ing:

21 ‘‘SEC. 1130. EFFECT OF FAILURE TO CARRY OUT STATE

22 PLAN.

23 ‘‘In an action brought to enforce a provision of the

24 Social Security Act, such provision is not to be deemed

25 unenforceable because of its inclusion in a section of the
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1 Act requiring a State plan or specifying the required con2 tents of a State plan. This section is not intended to limit

3 or expand the grounds for determining the availability of

4 private actions to enforce State plan requirements other

5 than by overturning any such grounds applied in Suter

6 v. Artist M., 112 S. Ct. 1360 (1992), but not applied in

7 prior Supreme Court decisions respecting such enforce8 ability: Provided, however, That this section is not in9 tended to alter the holding in Suter v. Artist M. that sec10 tion 471(a)(15) of the Act is not enforceable in a private

11 right of action.’’.

12 (b) APPLICABILITY.—The amendment made by sub13 section (a) shall apply to actions pending on the date of

14 the enactment of this Act and to actions brought on or

15 after such date of enactment.

16 CHAPTER 2—CHILD SUPPORT

17 ENFORCEMENT

18 SEC. 13241. STATE PATERNITY ESTABLISHMENT PRO19 GRAMS.

20 (a) PERFORMANCE STANDARDS.—Section 452(g) (42

21 U.S.C. 652(g)) is amended—

22 (1) in paragraph (1)—

23 (A) by striking ‘‘1991’’ and inserting

24 ‘‘1994’’;
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1 (B) by inserting ‘‘is based on reliable data

2 and’’ before ‘‘equals or exceeds’’; and

3 (C) by striking subparagraphs (A), (B),

4 and (C) and inserting the following:

5 ‘‘(A) 75 percent;

6 ‘‘(B) for a State with a paternity establishment

7 percentage of not less than 50 percent but less than

8 75 percent for the fiscal year, the paternity estab9 lishment percentage of the State for the immediately

10 preceding year plus 3 percentage points; or

11 ‘‘(C) for a State with a paternity establishment

12 percentage of less than 50 percent for such fiscal

13 year, the paternity establishment percentage of the

14 State for the immediately preceding year plus 6 per15 centage points.’’; and

16 (2) in paragraph (2)—

17 (A) by striking ‘‘(or under all such plans)’’

18 each place such term appears;

19 (B) by inserting ‘‘or part E’’ after ‘‘under

20 part A’’ each place such term appears;

21 (C) by amending subparagraph (B) to read

22 as follows:

23 ‘‘(B) the term ‘reliable data’ means the

24 most recent data available which are found by
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1 the Secretary to be reliable for purposes of this

2 section.’’;

3 (D) by inserting ‘‘unless paternity is estab4 lished for such child’’ after ‘‘the death of a par5 ent’’;

6 (E) by striking ‘‘parent or’’ and inserting

7 ‘‘parent,’’; and

8 (F) by inserting ‘‘, or any child with re9 spect to whom the State agency administering

10 the plan under part E determines (as provided

11 in section 454(4)(B)) that it is against the best

12 interest of such child to do so’’ after ‘‘cooperate

13 under section 402(a)(26)’’.

14 (b) STATE PLAN REQUIREMENTS.—

15 (1) REQUIRED PROCEDURES.—Section 466(a)

16 (42 U.S.C. 666(a)) is amended—

17 (A) in paragraph (2)—

18 (i) by striking ‘‘at the option of the

19 State,’’; and

20 (ii) by inserting ‘‘and paternity estab21 lishment’’ after ‘‘support order issuance

22 and enforcement’’;

23 (B) in paragraph (5), by adding at the end

24 the following:
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1 ‘‘(C) Procedures for a simple civil process

2 for voluntarily acknowledging paternity under

3 which the State must explain the rights and re4 sponsibilities of acknowledging paternity, and

5 afford due process safeguards. Such procedures

6 must include (i) a hospital-based program for

7 the voluntary acknowledgment of paternity dur8 ing the period immediately before or after the

9 birth of a child, and (ii) the inclusion of signa10 ture lines on applications for official birth cer11 tificates which, once signed by the father and

12 the mother, are considered a voluntary acknowl13 edgment of paternity.

14 ‘‘(D) Procedures under which the vol15 untary acknowledgment of paternity of a child

16 by an individual in the manner described in

17 subparagraph (C)(ii) creates a rebuttable or, at

18 the option of the State, conclusive presumption

19 that the individual is the father of the child,

20 and under which such a voluntary acknowledg21 ment is admissible as evidence of paternity.

22 ‘‘(E) Procedures under which a voluntary

23 acknowledgment of paternity in the manner de24 scribed in subparagraph (C)(ii) must be recog25 nized as a basis for seeking a support order
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1 without first requiring any further proceedings

2 to establish paternity.

3 ‘‘(F) Procedures requiring that (i) any ob4 jection to genetic testing results be made in

5 writing within a specified number of days be6 fore any hearing at which such results may be

7 introduced into evidence, and (ii) if no objection

8 is made, the test results be admissible as evi9 dence of paternity without the need for founda10 tion testimony or other proof of authenticity or

11 accuracy.

12 ‘‘(G) Procedures which create a rebuttable

13 or, at the option of the State, conclusive pre14 sumption of paternity of a child, upon genetic

15 testing results indicating a threshold probability

16 of the alleged father being the father of the

17 child.

18 ‘‘(H) Procedures requiring a default order

19 to be entered in a paternity case upon a show20 ing that process has been served on the defend21 ant and any additional showing required by

22 State law.’’; and

23 (C) by inserting after paragraph (10) the

24 following:
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1 ‘‘(11) Procedures under which a State must

2 give full faith and credit to a determination of pater3 nity made by any other State, whether established

4 through voluntary acknowledgment or through ad5 ministrative or judicial processes.’’.

6 (2) FURNISHING OF SOCIAL SECURITY NUM7 BERS.—

8 (A) IN GENERAL.—Section 466(a) (42

9 U.S.C. 666(a)), as amended by paragraph

10 (1)(C) of this subsection, is amended by insert11 ing after paragraph (11) the following:

12 ‘‘(12)(A) Procedures under which, in the ad13 ministration of any law involving the issuance,

14 reissuance, or amendment of a birth certificate, the

15 State shall require each parent to furnish to the

16 State, or any agency or political subdivision thereof

17 having administrative responsibility for the law in18 volved, the social security account number (or num19 bers, if the parent has more than 1 such number)

20 issued to the parent, unless the State (in accordance

21 with regulations prescribed by the Secretary) finds

22 good cause for not requiring the furnishing of the

23 number.

24 ‘‘(B) Procedures under which any number fur25 nished under subparagraph (A) shall be made avail-
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1 able to the agency administering the State plan

2 under this part, in accordance with Federal or State

3 law or regulation.

4 ‘‘(C) Procedures under which—

5 ‘‘(i) any number furnished under subpara6 graph (A) shall not be recorded on the birth

7 certificate; and

8 ‘‘(ii) any social security account number,

9 obtained with respect to the issuance by the

10 State of any birth certificate, shall not be used

11 for other than child support purposes, unless

12 section 7(a) of the Privacy Act of 1974 does

13 not prohibit the State from requiring the disclo14 sure of the number, by reason of the State hav15 ing adopted, before January 1, 1975, a statute

16 or regulation requiring such disclosure.’’.

17 (B) CONFORMING AMENDMENTS.—Section

18 205(c)(2)(C)(ii) (42 U.S.C. 405(c)(2)(C)(ii)) is

19 amended—

20 (i) by striking ‘‘(ii) In the administra21 tion of any law involving the issuance’’ and

22 inserting ‘‘(ii) In the administration of any

23 law involving the issuance, reissuance, or

24 amendment’’; and
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1 (ii) by striking ‘‘any purpose other

2 than for the enforcement of child support

3 orders in effect in the State’’ and inserting

4 ‘‘other than child support purposes’’.

5 (c) CONFORMING REPEAL.—Section 468 (42 U.S.C.

6 668) is hereby repealed.

7 (d) EFFECTIVE DATE.—The amendments and repeal

8 made by this section shall become effective with respect

9 to a State—

10 (1) on October 1, 1993, or, if later

11 (2) upon enactment by the legislature of the

12 State of all laws required by such amendments,

13 but in no event later than the 1st day of the 1st calendar

14 quarter beginning after the close of the 1st regular session

15 of the State legislature that begins after the date of the

16 enactment of this Act. For purposes of the preceding sen17 tence, in the case of a State that has a 2-year legislative

18 session, each year of such session shall be deemed to be

19 a separate regular session of the State legislature.

20 SEC. 13242. ENFORCEMENT OF HEALTH INSURANCE SUP21 PORT.

22 (a) STATE PLAN REQUIREMENTS.—Section 454(a)

23 (42 U.S.C. 654(a)) is amended—

24 (1) by striking ‘‘and’’ at the end of paragraph

25 (23);
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1 (2) by striking the period at the end of para2 graph (24) and inserting ‘‘; and’’; and

3 (3) by inserting after paragraph (24) the fol4 lowing:

5 ‘‘(25) provide assurances satisfactory to the

6 Secretary that the State has in effect laws applicable

7 to health insurers and insurance policies or pro8 grams subject to the laws of the State that—

9 ‘‘(A) prohibit insurers’ consideration, in

10 determining an individual’s eligibility for or cov11 erage under any such policy or program, of

12 such individual’s eligibility for or coverage

13 under the plan of any State under title XIX;

14 ‘‘(B) provide that, where an individual as15 signs rights to any State in accordance with

16 section 1912, that State is subrogated, to the

17 extent of medical assistance furnished, to the

18 individual’s rights under any health insurance

19 policy or program;

20 ‘‘(C) prohibit insurers from applying, to

21 State agencies administering programs under

22 title XIX and acting as agents or subrogees (for

23 purposes of insurance policies or programs of

24 such insurers) of individuals receiving medical

25 assistance under such State programs, require-
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1 ments (with respect to deadlines for filing

2 claims or any other matters) different from re3 quirements applicable to any other applicant,

4 beneficiary, agent, or subrogee;

5 ‘‘(D) prohibit insurers from denying enroll6 ment of a child under the health insurance cov7 erage of the child’s parent on grounds that—

8 ‘‘(i) the child does not reside with the

9 parent, or

10 ‘‘(ii) the child was born out of wed11 lock;

12 ‘‘(E) in any case where a parent is re13 quired by court or administrative order to pro14 vide health insurance coverage for a child, re15 quire insurers, without regard to otherwise ap16 plicable enrollment season restrictions—

17 ‘‘(i) to permit such parent, upon ap18 plication, to enroll in family coverage (if

19 otherwise eligible and not already so en20 rolled), and to enroll such child under such

21 family coverage, and

22 ‘‘(ii) where such a parent who is en23 rolled in family coverage fails to make ap24 plication, to enroll such child under such

25 family coverage upon application by the
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1 child’s other parent or by the State agency

2 administering the program under this part

3 or title XIX; and

4 ‘‘(F) in any case where a child is covered

5 under the health insurance of a noncustodial

6 parent, require insurers—

7 ‘‘(i) to permit the custodial parent (or

8 service provider, with the custodial par9 ent’s approval), or any State agency ad10 ministering a program under title XIX, to

11 submit claims for covered services without

12 the approval of the noncustodial parent,

13 and

14 ‘‘(ii) to make payment on claims sub15 mitted in accordance with clause (i) di16 rectly to the custodial parent, service pro17 vider, or State agency submitting such

18 claim;

19 ‘‘(26) provide assurances satisfactory to the

20 Secretary that the State has in effect laws requiring

21 employers doing business in the State—

22 ‘‘(A) upon notice of a court or administra23 tive order requiring an employee to provide

24 health insurance coverage for the employee’s

25 child, and upon application by such employee
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1 (or, where such employee fails to make applica2 tion, by the child’s other parent or the State

3 agency administering the program under this

4 part or title XIX), to permit enrollment of such

5 child at any time as a dependent of the em6 ployee under the employer’s group health insur7 ance;

8 ‘‘(B) to permit disenrollment from such

9 group health insurance by such employee, or

10 elimination of coverage of such child, only upon

11 receipt of satisfactory evidence, in writing,

12 that—

13 ‘‘(i) such court or administrative

14 order is no longer in effect, or

15 ‘‘(ii) the employee has enrolled or will

16 enroll in alternative health insurance cover17 ing such child which will take effect imme18 diately upon the effective date of such

19 disenrollment; and

20 ‘‘(C) to withhold from such employee’s

21 compensation the employee’s share (if any) of

22 premiums for such health insurance, and to pay

23 such share of premiums to the insurer;

24 ‘‘(27) provide assurances satisfactory to the

25 Secretary that the State has in effect laws requiring
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1 the State agency to garnish the wages, salary, or

2 other employment income of, and to withhold

3 amounts from State tax refunds to, any person

4 who—

5 ‘‘(A) is required by court or administrative

6 order to provide coverage of the costs of medi7 cal services to an individual eligible for medical

8 assistance under title XIX,

9 ‘‘(B) has received payment from a third

10 party for the costs of medical services to such

11 individual, and

12 ‘‘(C) has not used such payments to reim13 burse, as appropriate, either such individual or

14 the provider of such services,

15 to the extent necessary to reimburse the State agen16 cy for expenditures for such costs under its plan

17 under title XIX, but any claims for current or past18 due child support shall take priority over any such

19 claims for the costs of medical services.’’.

20 (b) EFFECTIVE DATE.—

21 (1) IN GENERAL.—The amendments made by

22 subsection (a) apply to calendar quarters beginning

23 on or after April 1, 1994, except as provided in

24 paragraph (2).
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1 (2) EXTENSION FOR STATE LAW AMEND2 MENT.—In the case of a State plan under part D of

3 title IV of the Social Security Act which the Sec4 retary of Health and Human Services determines re5 quires State legislation in order for the plan to meet

6 the additional requirements imposed by the amend7 ments made by subsection (a), the State plan shall

8 not be regarded as failing to comply with the re9 quirements of such title solely on the basis of its

10 failure to meet these additional requirements before

11 the 1st day of the 1st calendar quarter beginning

12 after the close of the 1st regular session of the State

13 legislature that begins after the date of enactment of

14 this Act. For purposes of the preceding sentence, in

15 the case of a State that has a 2-year legislative ses16 sion, each year of such session shall be deemed to

17 be a separate regular session of the State legislature.

18 SEC. 13243. REPORTS TO CREDIT BUREAUS ON PERSONS

19 DELINQUENT IN CHILD SUPPORT PAYMENTS.

20 (a) IN GENERAL.—Section 466(a)(7) (42 U.S.C.

21 666(a)(7)) is amended—

22 (1) by striking ‘‘upon the request of such agen23 cy’’ and inserting ‘‘, and procedures which require

24 the State to periodically report to any such agency

25 the name of any parent who owes overdue support
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1 and is at least 2 months delinquent in the payment

2 of such support and the amount of such delinquency

3 unless the agency requests not to receive such infor4 mation’’; and

5 (2) by striking ‘‘(C) a fee’’ and all that follows

6 through ‘‘by the State’’ and inserting ‘‘, and (C)

7 such information shall not be made available to (i)

8 a consumer reporting agency which the State deter9 mines does not have sufficient capability to system10 atically and timely make accurate use of such infor11 mation, or (ii) an entity which has not furnished evi12 dence satisfactory to the State that the entity is a

13 consumer reporting agency’’.

14 (b) EFFECTIVE DATE.—

15 (1) IN GENERAL.—Except as provided in para16 graph (2), the amendments made by subsection (a)

17 shall take effect on October 1, 1994.

18 (2) EXCEPTION.—If the Secretary of Health

19 and Human Services determines that a State is un20 able to comply with the amendments made by sub21 section (a), such State shall be exempt from compli22 ance with such amendments until the State estab23 lishes an automated data processing and information

24 retrieval system under section 454(24) of the Social
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1 Security Act, or October 1, 1995, whichever occurs

2 earlier.

3 CHAPTER 3—SUPPLEMENTAL SECURITY

4 INCOME

5 SEC. 13251. FEES FOR FEDERAL ADMINISTRATION OF

6 STATE SUPPLEMENTARY PAYMENTS.

7 (a) IN GENERAL.—

8 (1) OPTIONAL STATE SUPPLEMENTARY PAY9 MENTS.—Section 1616(d) (42 U.S.C. 1382e(d)) is

10 amended—

11 (A) by inserting ‘‘(1)’’ after ‘‘(d)’’;

12 (B) by inserting ‘‘, plus an administration

13 fee assessed in accordance with paragraph (2)

14 and any additional services fee charged in ac15 cordance with paragraph (3)’’ before the period;

16 and

17 (C) by adding after and below the end the

18 following:

19 ‘‘(2)(A) The Secretary shall assess each State an ad20 ministration fee in an amount equal to—

21 ‘‘(i) the number of supplementary payments

22 made by the Secretary on behalf of the State under

23 this section for any month in a fiscal year; multi24 plied by

25 ‘‘(ii) the applicable rate for the fiscal year.
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1 ‘‘(B) As used in subparagraph (A), the term ‘applica2 ble rate’ means—

3 ‘‘(i) for fiscal year 1994, $1.67;

4 ‘‘(ii) for fiscal year 1995, $3.33;

5 ‘‘(iii) for fiscal year 1996, $5.00; and

6 ‘‘(iv) for fiscal year 1997 and each succeeding

7 fiscal year, $5.00, or such different rate as the Sec8 retary determines pursuant to criteria established in

9 regulations is appropriate for the State, taking into

10 account the complexity of the State’s supplementary

11 payment program.

12 ‘‘(C) All fees collected pursuant to this paragraph

13 shall be transferred to the United States at the same time

14 that amounts for such supplementary payments are re15 quired to be so transferred.

16 ‘‘(3)(A) The Secretary shall charge a State an addi17 tional services fee if, at the request of the State, the Sec18 retary provides additional services beyond the level cus19 tomarily provided, in the administration of State supple20 mentary payments pursuant to this section.

21 ‘‘(B) The additional services fee shall be in an

22 amount that the Secretary determines is necessary to

23 cover all costs (including indirect costs) incurred by the

24 Federal Government in furnishing the additional services

25 referred to in subparagraph (A).
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1 ‘‘(C) The additional services fee shall be payable in

2 advance or by way of reimbursement.

3 ‘‘(4) All administration fees and additional services

4 fees collected pursuant to this subsection shall be depos5 ited in the general fund of the Treasury of the United

6 States as miscellaneous receipts.’’.

7 (2) MANDATORY STATE SUPPLEMENTARY PAY8 MENTS.—Section 212(b)(3) of Public Law 93–66

9 (42 U.S.C. 1382 note) is amended—

10 (A) by inserting ‘‘(A)’’ after ‘‘(3)’’;

11 (B) by inserting ‘‘, plus an administration

12 fee assessed in accordance with subparagraph

13 (B) and any additional services fee charged in

14 accordance with subparagraph (C)’’ before the

15 period; and

16 (C) by adding after and below the end the

17 following:

18 ‘‘(B)(i) The Secretary shall assess each State an ad19 ministration fee in an amount equal to—

20 ‘‘(I) the number of supplementary payments

21 made by the Secretary on behalf of the State under

22 this subsection for any month in a fiscal year; multi23 plied by

24 ‘‘(II) the applicable rate for the fiscal year.
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1 ‘‘(ii) As used in clause (i), the term ‘applicable rate’

2 means—

3 ‘‘(I) for fiscal year 1994, $1.67;

4 ‘‘(II) for fiscal year 1995, $3.33;

5 ‘‘(III) for fiscal year 1996, $5.00; and

6 ‘‘(IV) for fiscal year 1997 and each succeeding

7 fiscal year, $5.00, or such different rate as the Sec8 retary determines pursuant to regulations estab9 lished in regulations is appropriate for the State,

10 taking into account the complexity of the State’s

11 supplementary payment program.

12 ‘‘(iii) All fees collected pursuant to this subparagraph

13 shall be transferred to the United States at the same time

14 that amounts for such supplementary payments are re15 quired to be so transferred.

16 ‘‘(C)(i) The Secretary shall charge a State an addi17 tional services fee if, at the request of the State, the Sec18 retary provides additional services beyond the level cus19 tomarily provided, in the administration of State supple20 mentary payments pursuant to this subsection.

21 ‘‘(ii) The additional services fee shall be in an amount

22 that the Secretary determines is necessary to cover all

23 costs (including indirect costs) incurred by the Federal

24 Government in furnishing the additional services referred

25 to in clause (i).
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1 ‘‘(iii) The additional services fee shall be payable in

2 advance or by way of reimbursement.

3 ‘‘(D) All administration fees and additional services

4 fees collected pursuant to this paragraph shall be depos5 ited in the general fund of the Treasury of the United

6 States as miscellaneous receipts.’’.

7 (b) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to supplementary payments made

9 pursuant to section 1616(a) of the Social Security Act or

10 section 212(a) of Public Law 93–66 for any calendar

11 month beginning after September 30, 1993, and to serv12 ices furnished after such date, regardless of whether regu13 lations to implement such amendments have been promul14 gated by such date, or whether any agreement entered into

15 under such section 1616(a) or such section 212(a) has

16 been modified.

17 SEC. 13252. EXCLUSION FROM INCOME OF STATE RELOCA18 TION ASSISTANCE.

19 Section 5035(c) of the Omnibus Budget Reconcili20 ation Act of 1990 (42 U.S.C. 1382a note; 104 Stat. 1388–

21 225) is amended—

22 (1) by striking ‘‘The amendments made by this

23 section’’ and inserting ‘‘(1) The amendments made

24 by subsection (b)’’; and

25 (2) by adding at the end the following:
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1 ‘‘(2) The amendments made by subsection (a) shall

2 apply with respect to benefits for calendar months begin3 ning on or after May 1, 1991.’’.

4 SEC. 13253. PREVENTION OF ADVERSE EFFECTS ON ELIGI5 BILITY FOR, AND AMOUNT OF, BENEFITS

6 WHEN SPOUSE OR PARENT OF BENEFICIARY

7 IS ABSENT FROM THE HOUSEHOLD DUE TO

8 ACTIVE MILITARY SERVICE.

9 (a) ABSENT PERSON GENERALLY DEEMED TO BE

10 LIVING IN THE HOUSEHOLD.—Section 1614(f) (42

11 U.S.C. 1382c(f)) is amended by adding at the end the

12 following:

13 ‘‘(4) For purposes of paragraphs (1) and (2), a

14 spouse or parent (or spouse of such a parent) who is ab15 sent from the household in which the individual lives due

16 solely to a duty assignment as a member of the Armed

17 Forces on active duty shall, in the absence of evidence to

18 the contrary, be deemed to be living in the same household

19 as the individual.’’.

20 (b) EXCLUSION FROM INCOME OF HAZARDOUS DUTY

21 PAY RECEIVED WHILE IN ACTIVE MILITARY SERVICE.—

22 Section 1612(b) (42 U.S.C. 1382a(b)) is amended—

23 (1) in paragraph (18), by striking ‘‘and’’ the

24 2nd place such term appears;
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1 (2) in paragraph (19), by striking the period

2 and inserting ‘‘; and’’; and

3 (3) by adding at the end the following:

4 ‘‘(20) special pay received pursuant to section

5 310 of title 37, United States Code.’’.

6 (c) EFFECTIVE DATE.—The amendments made by

7 this section shall take effect on the 1st day of the 2nd

8 month that begins after the date of the enactment of this

9 Act.

10 SEC. 13254. ELIGIBILITY FOR CHILDREN OF ARMED

11 FORCES PERSONNEL RESIDING OUTSIDE THE

12 UNITED STATES OTHER THAN IN FOREIGN

13 COUNTRIES.

14 (a) IN GENERAL.—Section 1614(a)(1)(B)(ii) (42

15 U.S.C. 1382c(a)(1)(B)(ii)) is amended by striking ‘‘the

16 District of Columbia’’ and all that follows to the period

17 and inserting ‘‘and who, for the month before the parent

18 reported for such assignment, received a benefit under this

19 title’’.

20 (b) EFFECTIVE DATE.—The amendment made by

21 subsection (a) shall take effect on October 1, 1993.
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1 SEC. 13255. DEFINITION OF DISABILITY FOR CHILDREN

2 UNDER AGE 18 APPLIED TO ALL INDIVIDUALS

3 UNDER AGE 18.

4 (a) IN GENERAL.—Section 1614(a)(3)(A) (42 U.S.C.

5 1382c(a)(3)(A)) is amended by striking ‘‘a child’’ and in6 serting ‘‘an individual’’.

7 (b) EFFECTIVE DATE.—The amendment made by

8 subsection (a) shall apply to determinations made on or

9 after the date of the enactment of this Act.

10 SEC. 13256. VALUATION OF CERTAIN IN-KIND SUPPORT

11 AND MAINTENANCE WHEN THERE IS A COST

12 OF LIVING ADJUSTMENT IN BENEFITS.

13 (a) IN GENERAL.—Section 1611(c) (42 U.S.C.

14 1382(c)) is amended—

15 (1) in paragraph (1), by striking ‘‘and (5)’’ and

16 inserting ‘‘(5), and (6)’’; and

17 (2) by redesignating paragraphs (6) and (7) as

18 paragraphs (7) and (8), respectively; and

19 (3) by inserting after paragraph (5) the follow20 ing:

21 ‘‘(6) The dollar amount in effect under subsection (b)

22 as a result of any increase in benefits under this title by

23 reason of section 1617 shall be used to determine the value

24 of any in-kind support and maintenance required to be

25 taken into account in determining the benefit payable

26 under this title to an individual (and the eligible spouse,
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1 if any, of the individual) for the 1st 2 months for which

2 the increase in benefits applies.’’.

3 (b) EFFECTIVE DATE.—The amendments made by

4 subsection (a) shall apply to benefits paid for months after

5 the calendar year 1993.

6 SEC. 13257. EXCLUSION FROM INCOME OF CERTAIN

7 AMOUNTS RECEIVED BY INDIANS FROM IN8 TERESTS HELD IN TRUST.

9 (a) IN GENERAL.—Section 8 of the Act of October

10 19, 1973, (25 U.S.C. 1408) is amended by inserting ‘‘,

11 and the first $2,000 per year of income received by indi12 vidual Indians that is derived from such interests shall not

13 be considered income,’’ after ‘‘resource’’.

14 (b) EFFECTIVE DATE.—The amendment made by

15 this section shall take effect on January 1, 1993.

16 CHAPTER 4—AID TO FAMILIES WITH

17 DEPENDENT CHILDREN

18 SEC. 13261. 50 PERCENT FEDERAL MATCH OF STATE AD19 MINISTRATIVE COSTS.

20 (a) IN GENERAL.—Section 403(a)(3) (42 U.S.C.

21 603(a)(3)) is amended by striking ‘‘the sum of’’ and all

22 that follows through the end of subparagraph (D) and in23 serting ‘‘50 percent of the total amounts expended during

24 such quarter as the Secretary has found necessary for the

25 proper and efficient administration of the State plan (in-
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1 cluding any amounts expended by the State to carry out

2 initial evaluations under section 486(a)),’’.

3 (b) OPTIONAL USE OF CERTAIN PROCEDURES TO

4 VERIFY IMMIGRATION STATUS OF AFDC APPLICANTS.—

5 Section 1137(d) (42 U.S.C. 1320b–7(d)) is amended—

6 (1) in each of paragraphs (3) and (4)(B)(i), by

7 inserting ‘‘(or, in the case of the program specified

8 in subsection (b)(1), may)’’ after ‘‘shall’’; and

9 (2) in paragraph (4), by inserting ‘‘(if re10 quired)’’ after ‘‘verified’’.

11 (c) EFFECTIVE DATE.—

12 (1) IN GENERAL.—Except as provided in para13 graph (2), the amendments made by this section

14 shall apply to payments made for calendar quarters

15 beginning on or after April 1, 1994.

16 (2) DELAYED APPLICABILITY TO CERTAIN

17 STATES.—

18 (A) IN GENERAL.—The Secretary of

19 Health and Human Services may delay the ap20 plicability to a qualified State of the amend21 ments made by subsection (a) until the 1st cal22 endar quarter that begins after the close of the

23 1st regular session of the State legislature that

24 begins after the date of the enactment of this

25 section.
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1 (B) QUALIFIED STATE DEFINED.—As used

2 in subparagraph (A), the term ‘‘qualified State’’

3 means a State that meets such criteria as the

4 Secretary shall establish and apply uniformly,

5 including whether the State legislature meets

6 biennially and does not have a regular session

7 scheduled in calendar year 1994.

8 SEC. 13262. DELAY IN EFFECTIVE DATE OF PENALTY FOR

9 FAILURE TO MEET REQUIRED PARTICIPA10 TION RATE FOR UNEMPLOYED PARENTS IN

11 THE JOBS PROGRAM.

12 Section 403(l)(4)(B) (42 U.S.C. 603(l)(4)(B)) is

13 amended—

14 (1) in clause (i), by striking ‘‘1994’’ and insert15 ing ‘‘1995’’;

16 (2) in clause (ii), by striking ‘‘1995’’ and in17 serting ‘‘1996’’;

18 (3) in clause (iii), by striking ‘‘1996’’ and in19 serting ‘‘1997’’; and

20 (4) in clause (iv), by striking ‘‘1997 and 1998’’

21 and inserting ‘‘1998 and 1999’’.

22 SEC. 13263. REPORT TO THE CONGRESS WITH RESPECT TO

23 PERFORMANCE STANDARDS IN THE JOBS

24 PROGRAM.

25 Section 487(a) (42 U.S.C. 687(a)) is amended—
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1 (1) by striking ‘‘3’’ and inserting ‘‘4’’;

2 (2) in paragraph (1), by inserting ‘‘criteria for’’

3 after ‘‘develop’’;

4 (3) in paragraph (2), by striking ‘‘for’’ and in5 serting ‘‘with respect to’’; and

6 (4) in the 2nd sentence, by striking ‘‘under this

7 subsection’’ and inserting ‘‘with respect to the pro8 gram under this part’’.

9 SEC. 13264. MEASUREMENT AND REPORTING OF WELFARE

10 PARTICIPATION.

11 (a) CONGRESSIONAL POLICY.—The Congress hereby

12 declares that—

13 (1) it is the policy and responsibility of the

14 Federal Government to reduce the rate at which,

15 and the degree to which, families depend on income

16 from welfare programs, and the duration of welfare

17 participation, to assist families toward self-suffi18 ciency, and to increase the living standards of low19 income families, consistent with other essential na20 tional goals;

21 (2) it is the policy of the United States to

22 strengthen families and improve the life prospects of

23 their children, to ensure that children grow up in

24 families that are economically self-sufficient, and to
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1 underscore the responsibility of parents to support

2 their children;

3 (3) the Federal Government should help welfare

4 recipients as well as individuals at risk of welfare

5 participation to improve their education and job

6 skills, to obtain access to high quality child care and

7 other necessary support services, and to take such

8 other steps as may assist them to meet their respon9 sibilities to become financially independent; and

10 (4) it is the purpose of this section to provide

11 the public with generally accepted measures of wel12 fare participation so that the public can track such

13 participation over time and determine whether

14 progress is being made in reducing the rate at

15 which, and the degree to which, families depend on

16 income from welfare programs, and the duration of

17 welfare participation.

18 (b) DEVELOPMENT OF WELFARE PARTICIPATION

19 MEASURES AND PREDICTORS.—

20 (1) IN GENERAL.—The Secretary of Health and

21 Human Services (in this section referred to as the

22 ‘‘Secretary’’) in consultation with the Secretary of

23 Agriculture shall develop—

24 (A) measures of—
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1 (i) the rate at which, and the degree

2 to which, families depend on income from

3 welfare programs; and

4 (ii) the duration of welfare participa5 tion; and

6 (B) predictors of welfare participation.

7 (2) INTERIM REPORT.—Not later than 2 years

8 after the date of the enactment of this section, the

9 Secretary shall provide an interim report containing

10 conclusions resulting from such development, to—

11 (A) the Committee on Ways and Means of

12 the House of Representatives;

13 (B) the Committee on Education and

14 Labor of the House of Representatives;

15 (C) the Committee on Agriculture of the

16 House of Representatives;

17 (D) the Committee on Energy and Com18 merce of the House of Representatives;

19 (E) the Committee on Finance of the

20 Senate;

21 (F) the Committee on Labor and Human

22 Resources of the Senate; and

23 (G) the Committee on Agriculture, Nutri24 tion, and Forestry of the Senate.
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1 (c) ADVISORY BOARD ON WELFARE PARTICIPA2 TION.—

3 (1) ESTABLISHMENT.—There is established an

4 Advisory Board on Welfare Participation (in this

5 section referred to as the ‘‘Board’’).

6 (2) COMPOSITION.—The Board shall be com7 posed of 12 members with equal numbers to be ap8 pointed by the House of Representatives, the Senate,

9 and the President. The Board shall be composed of

10 experts in the fields of welfare research and statis11 tical methodology, representatives of State and local

12 welfare agencies, and organizations concerned with

13 welfare issues.

14 (3) VACANCIES.—Any vacancy occurring in the

15 membership of the Board shall be filled in the same

16 manner as the original appointment for the position

17 being vacated. The vacancy shall not affect the

18 power of the remaining members to execute the

19 duties of the Board.

20 (4) DUTIES.—Duties of the Board shall

21 include—

22 (A) providing advice and recommendations

23 to the Secretary on the development of meas24 ures of the rate at which, and the degree to

25 which, families depend on income from welfare
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1 programs, and the duration of welfare partici2 pation; and

3 (B) providing advice on the development

4 and presentation of the report required by sub5 section (d).

6 (5) TRAVEL EXPENSES.—Members of the

7 Board shall not be compensated, but shall receive

8 travel expenses, including per diem in lieu of subsist9 ence, at rates authorized for employees of agencies

10 under subchapter I of chapter 57 of title 5, United

11 States Code, for each day the member is engaged in

12 the performance of duties away from the home or

13 regular place of business of the member.

14 (6) DETAIL OF FEDERAL EMPLOYEES.—The

15 Secretary shall detail, without reimbursement, any

16 of the personnel of the Department of Health and

17 Human Services to the Board to assist the Board in

18 carrying out its duties. Any detail shall not interrupt

19 or otherwise affect the civil service status or privi20 leges of the Federal employee.

21 (7) VOLUNTARY SERVICE.—Notwithstanding

22 section 1342 of title 31, United States Code, the

23 Board may accept the voluntary services provided by

24 a member of the Board.
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1 (8) TERMINATION OF BOARD.—The Board shall

2 be terminated at such time as the Secretary deter3 mines the duties described in subsection (c)(4) have

4 been completed, but in any case prior to the submis5 sion of the 1st report required by subsection (d).

6 (d) ANNUAL WELFARE PARTICIPATION REPORTS.—

7 (1) PREPARATION.—The Secretary shall pre8 pare annual reports on welfare participation in the

9 United States.

10 (2) COVERAGE.—The report shall include anal11 ysis of families and individuals receiving assistance

12 under means-tested benefit programs, including the

13 program of aid to families with dependent children

14 under part A of title IV of the Social Security Act

15 (42 U.S.C. 601 et seq.), the food stamp program

16 under the Food Stamp Act of 1977 (7 U.S.C. 2011

17 et seq.), and the supplemental security income pro18 gram under title XVI of the Social Security Act (42

19 U.S.C. 1381 et seq.), or as general assistance under

20 programs administered by State and local govern21 ments.

22 (3) CONTENTS.—Each such report shall set

23 forth, for each means-tested benefit program de24 scribed in paragraph (2)—

25 (A) measures of—
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1 (i) the rate at which, and the degree

2 to which, families depend on income from

3 welfare programs; and

4 (ii) the duration of welfare participa5 tion;

6 (B) trends in the measures;

7 (C) predictors of welfare participation;

8 (D) the causes of welfare participation;

9 (E) patterns of multiple program partici10 pation;

11 (F) such other information as the Sec12 retary deems relevant; and

13 (G) such recommendations for legislation,

14 which shall not include proposals to reduce eli15 gibility levels or impose barriers to program ac16 cess, as the Secretary may determine to be nec17 essary or desirable to reduce—

18 (i) the rate at which, and the degree

19 to which, families depend on income from

20 welfare programs; and

21 (ii) the duration of welfare participa22 tion.

23 (4) SUBMISSION.—The Secretary shall submit

24 such reports not later than 3 years after the date of

25 the enactment of this section, and annually there-
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1 after, to the committees specified in subsection

2 (b)(2). Each such report shall be transmitted during

3 the 1st 60 days of each regular session of the

4 Congress.

5 SEC. 13265. NEW HOPE DEMONSTRATION PROJECT.

6 (a) IN GENERAL.—The Secretary of Health and

7 Human Services (in this section referred to as the ‘‘Sec8 retary’’) shall provide for a demonstration project for a

9 qualified program to be conducted in Milwaukee, Wiscon10 sin, in accordance with this section.

11 (b) PAYMENTS.—For each calendar quarter in which

12 there is a qualified program approved under this sub13 section, the Secretary shall pay to the operator of the

14 qualified program, for no more than 20 calendar quarters,

15 an amount equal to the aggregate amount that would oth16 erwise have been payable to the State with respect to par17 ticipants in the program for such calendar quarter, in the

18 absence of the program, for cash assistance and child care

19 under part A of title IV of the Social Security Act and

20 for administrative expenses related to such assistance. In

21 calculating the amount of such payment, the expenses of

22 the program incurred in evaluating the effects of the pro23 gram may be treated as amounts necessary for the proper

24 and efficient administration of the program, for purposes

25 of part A of title IV of such Act.
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1 (c) DEMONSTRATION PROJECT DESCRIBED.—For

2 purposes of this section, the term ‘‘qualified program’’

3 means a program operated—

4 (1) by The New Hope Project, Inc., a private,

5 not-for-profit corporation incorporated under the

6 laws of the State of Wisconsin (in this section re7 ferred to as the ‘‘operator’’), which offers low-income

8 residents of Milwaukee, Wisconsin, employment,

9 wage supplements, child care, health care, and coun10 seling and training for job retention or advancement;

11 and

12 (2) in accordance with an application submitted

13 by the operator of the program and approved by the

14 Secretary based on the Secretary’s determination

15 that the application satisfies the requirements of

16 subsection (d).

17 (d) CONTENTS OF APPLICATION.—The operator of

18 the qualified program shall provide, in its application to

19 conduct a demonstration project for the program, that the

20 following terms and conditions will be met:

21 (1) The operator will develop and implement an

22 evaluation plan designed to provide reliable informa23 tion on the impact and implementation of the pro24 gram. The evaluation plan will include adequately
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1 sized groups of project participants and control

2 groups assigned at random.

3 (2) The operator will develop and implement a

4 plan addressing the services and assistance to be

5 provided by the program, the timing and determina6 tion of payments from the Secretary to the operator

7 of the program, and the roles and responsibilities of

8 the Secretary and the operator with respect to meet9 ing the requirements of this paragraph.

10 (3) The operator will specify a methodology for

11 determining expenditures to be paid to the operator

12 by the Secretary, with assistance from the Secretary

13 in calculating the amount that would otherwise have

14 been payable to the State in the absence of the pro15 gram, pursuant to subsection (b).

16 (4) The operator will issue an interim and final

17 report on the results of the evaluation described in

18 paragraph (1) to the Secretary at such times as

19 required by the Secretary.

20 (e) EFFECTIVE DATE.—This section shall take effect

21 on the 1st day of the 1st calendar quarter that begins

22 after the date of enactment of this Act.
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1 SEC. 13266. DELAY IN REQUIREMENT THAT OUTLYING

2 AREAS OPERATE AN AFDC–UP PROGRAM.

3 Section 401(g)(2) of the Family Support Act of 1988

4 (42 U.S.C. 602 note; 102 Stat. 2396) is amended by strik5 ing ‘‘October 1, 1992’’ and inserting ‘‘the date of the re6 peal of the limitations contained in section 1108(a) of the

7 Social Security Act on payments to such jurisdictions for

8 purposes of making maintenance payments under parts A

9 and E of title IV of such Act’’.

10 SEC. 13267. ADULT IN FAMILY OR HOUSEHOLD ALLOWED

11 TO ATTEST TO CITIZENSHIP STATUS OF FAM12 ILY OR HOUSEHOLD MEMBERS.

13 (a) IN GENERAL.—Section 1137(d)(1)(A) (42 U.S.C.

14 1320b–7(d)(1)(A)) is amended—

15 (1) by inserting ‘‘(i)’’ after ‘‘(1)(A)’’;

16 (2) by inserting ‘‘(other than the aid to families

17 with dependent children program under part A of

18 title IV of this Act)’’ after ‘‘any program listed in

19 subsection (b)’’; and

20 (3) by adding at the end the following:

21 ‘‘(ii) The State shall require, as a condition of

22 an individual’s eligibility for benefits under the aid

23 to families with dependent children program under

24 part A of title IV of this Act, a declaration in writ25 ing, under penalty of perjury—
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1 ‘‘(I) in the case of an individual who is an

2 adult member of a family or household applying

3 for or receiving such benefits, by such individ4 ual or another adult member of such family or

5 household on such individual’s behalf;

6 ‘‘(II) in the case of an individual who is a

7 child, by an adult on the individual’s behalf; or

8 ‘‘(III) in the case of an individual born

9 into a family or household receiving such bene10 fits, by an adult member of such individual’s

11 family or household on the individual’s behalf

12 no later than the next redetermination of eligi13 bility of such family or household following the

14 birth of such individual,

15 stating whether the individual is a citizen or national

16 of the United States, and, if that individual is not

17 a citizen or national of the United States, that the

18 individual is in a satisfactory immigration status.’’.

19 (b) EFFECTIVE DATE.—The amendments made by

20 subsection (a) shall become effective with respect to bene21 fits provided on or after October 1, 1993.
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1 SEC. 13268. INCREASE IN STEPPARENT INCOME DIS2 REGARD.

3 (a) IN GENERAL.—Section 402(a)(31) (42 U.S.C.

4 602(a)(31)) is amended by striking ‘‘$75’’ and inserting

5 ‘‘$90’’.

6 (b) EFFECTIVE DATE.—The amendment made by

7 subsection (a) shall take effect on October 1, 1993, and

8 shall apply to payments under part A of title IV of the

9 Social Security Act for fiscal year 1994 and such pay10 ments for succeeding fiscal years.

11 SEC. 13269. EXTENSION OF NEW YORK STATE CHILD SUP12 PORT DEMONSTRATION PROGRAM.

13 Section 9122(g)(1) of the Omnibus Budget Reconcili14 ation Act of 1987 (42 U.S.C. 602 note; 101 Stat. 1330–

15 312) is amended by striking ‘‘five’’ and inserting ‘‘10’’.

16 SEC. 13270. EARLY CHILDHOOD DEVELOPMENT PROJECTS.

17 Section 501(a) of the Family Support Act of 1988

18 (42 U.S.C. 1315 note; 102 Stat. 2400) is amended by add19 ing at the end the following:

20 ‘‘(4) For grants to States to conduct demonstration

21 projects under this subsection, there are authorized to be

22 appropriated not to exceed $3,000,000 for each of the

23 fiscal years 1994 through 1998.’’.
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1 CHAPTER 5—UNEMPLOYMENT

2 INSURANCE

3 SEC. 13271. TREATMENT OF SHORT-TIME COMPENSATION

4 PROGRAMS.

5 (a) GENERAL RULE.—Section 3306 of the Internal

6 Revenue Code of 1986 is amended by adding at the end

7 thereof the following new subsection:

8 ‘‘(t) SHORT-TIME COMPENSATION PROGRAM.—For

9 purposes of this chapter, the term ‘short-time compensa10 tion program’ means a program under which—

11 ‘‘(1) individuals whose workweeks have been re12 duced by at least 10 percent are eligible for unem13 ployment compensation;

14 ‘‘(2) the amount of unemployment compensa15 tion payable to any such individual is a pro rata por16 tion of the unemployment compensation which would

17 be payable to the individual if the individual were

18 totally unemployed;

19 ‘‘(3) eligible employees are not required to meet

20 the availability for work or work search test require21 ments while collecting short-time compensation bene22 fits, but are required to be available for their normal

23 workweek;

24 ‘‘(4) eligible employees may participate in an

25 employer-sponsored training program to enhance
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1 jobs skills if such program has been approved by the

2 State agency;

3 ‘‘(5) there is a reduction in the number of

4 hours worked by employees in lieu of temporary

5 layoffs;

6 ‘‘(6) there is a plan of an employer (or an em7 ployers association which is party to a collective bar8 gaining agreement) approved by the State agency

9 consisting of factors in this subsection or other fac10 tors as the Secretary of Labor may find relevant;

11 and

12 ‘‘(7) the employer continues to provide health

13 benefits and pension benefits under a pension plan

14 (as defined in section 3(35) of the Employee Retire15 ment Income Security Act of 1974) to any employee

16 whose workweek is reduced under such plan.

17 A short-time compensation program may also contain such

18 other factors as the Secretary of Labor finds relevant.’’.

19 (b) CONFORMING AMENDMENTS.—

20 (1) Subparagraph (E) of section 3304(a)(4) of

21 such Code is amended to read as follows:

22 ‘‘(E) amounts may be withdrawn for the

23 payment of short-time compensation under a

24 short-time compensation program approved by

25 the Secretary of Labor:’’.
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1 (2) Paragraph (4) of section 3306(f) of such

2 Code is amended to read as follows:

3 ‘‘(4) amounts may be withdrawn for the pay4 ment of short-time compensation under a short-time

5 compensation program approved by the Secretary of

6 Labor.’’.

7 (3) Section 303(a)(5) of the Social Security Act

8 is amended by striking ‘‘the payment of short-time

9 compensation under a plan approved by the Sec10 retary of Labor’’ and inserting ‘‘the payment of

11 short-time compensation under a short-time com12 pensation program (as defined in section 3306(t) of

13 the Internal Revenue Code of 1986) approved by the

14 Secretary of Labor’’.

15 SEC. 13272. TECHNICAL AMENDMENT TO UNEMPLOYMENT

16 TRUST FUND.

17 Paragraph (1) of section 905(b) of the Social Secu18 rity Act is amended to read as follows:

19 ‘‘(b)(1) Except as provided in paragraph (3), the Sec20 retary of the Treasury shall transfer (as of the close of

21 each month), from the employment security administra22 tion account to the extended unemployment compensation

23 account established by subsection (a), an amount equal to

24 20 percent of the amount by which—
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1 ‘‘(A) the transfers to such account pursuant to

2 section 901(b)(2) during such month, exceed

3 ‘‘(B) the payments during such month from the

4 employment security administration account pursu5 ant to section 901(b)(3) and (d).

6 If for any month the payments referred to in subpara7 graph (B) exceed the transfers referred to in subpara8 graph (A), proper adjustments shall be made in the

9 amounts subsequently transferred.’’.

10 SEC. 13273. EXTENSION OF REPORTING DATE FOR ADVI11 SORY COUNCIL.

12 In the case of the first Advisory Council on Unem13 ployment Compensation established under section 908 of

14 the Social Security Act, subsection (f) of such section 908

15 shall be applied—

16 (1) by substituting ‘‘3rd year’’ for ‘‘2d year’’ in

17 paragraph (1), and

18 (2) by substituting ‘‘February 1, 1995’’ for

19 ‘‘February 1, 1994’’ in paragraph (2).

20 SEC. 13274. CLARIFICATION OF EMERGENCY UNEMPLOY21 MENT BENEFITS PROVISIONS.

22 (a) IN GENERAL.—Subclauses (II) and (III) of sec23 tion 102(b)(2)(A)(v) of the Emergency Unemployment

24 Compensation Act of 1991 are amended to read as follows:
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1 ‘‘(II) The requirements of this

2 subclause are met for any week if the

3 national rate of total unemployment

4 (seasonally adjusted) for each of the 2

5 most recent calendar months (not

6 averaged) for which data are pub7 lished before the close of such week is

8 less than 7 percent, and if the re9 quirements of subclause (III) are not

10 met for such week.

11 ‘‘(III) The requirements of this

12 subclause are met for any week if the

13 national rate of total unemployment

14 (seasonally adjusted) for each of the 2

15 most recent calendar months (not

16 averaged) for which data are pub17 lished before the close of such week is

18 less than 6.8 percent.’’.

19 (b) EFFECTIVE DATE.—The amendment made by

20 subsection (a) shall apply as if included in the amend21 ments made by section 101(b) of the Unemployment Com22 pensation Amendments of 1992.
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1 SEC. 13275. MODIFICATIONS TO EXTENDED UNEMPLOY2 MENT PROGRAM.

3 (a) INCREASE IN REIMBURSEMENT RATE.—Sub4 section (a) of section 204 of the Federal-State Extended

5 Unemployment Compensation Act of 1970 is amended by

6 striking ‘‘one-half’’ and inserting ‘‘75 percent’’.

7 (b) REPEAL OF SPECIAL ELIGIBILITY REQUIRE8 MENTS.—Subsection (a) of section 202 of such Act is

9 amended—

10 (1) by striking paragraphs (3), (4), and (7),

11 (2) by redesignating paragraphs (5) and (6) as

12 paragraphs (3) and (4), respectively, and

13 (3) by striking ‘‘paragraphs (3), (4), and (5)’’

14 in paragraph (4) (as redesignated by paragraph (1)

15 of this subsection) and inserting ‘‘paragraph (3)’’.

16 (c) EFFECTIVE DATE.—

17 (1) IN GENERAL.—The amendments made by

18 this section shall apply to weeks beginning after Oc19 tober 2, 1993.

20 (2) SPECIAL RULE.—In the case of any State

21 the legislature of which has not been in session for

22 at least 30 calendar days (whether or not successive)

23 between the date of the enactment of this Act and

24 October 1, 1993, the amendment made by sub25 section (b) shall not be a requirement of the State

26 law of such State before the date 30 calendar days
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1 after the 1st day on which such legislature is in ses2 sion on or after October 1, 1993.

3 SEC. 13276. EXTENSION OF CURRENT FEDERAL UNEM4 PLOYMENT RATE.

5 Section 3301 of the Internal Revenue Code of 1986

6 is amended—

7 (1) by striking ‘‘1996’’ in paragraph (1) and in8 serting ‘‘1998’’, and

9 (2) by striking ‘‘1997’’ in paragraph (2) and in10 serting ‘‘1999’’.

11 SEC. 13277. DISCLOSURE OF INFORMATION TO RAILROAD

12 RETIREMENT BOARD.

13 Section 6103(l)(1)(C) of the Internal Revenue Code

14 of 1986 is amended to read as follows:

15 ‘‘(C) taxes imposed by chapters 22 and

16 23A, to the Railroad Retirement Board for pur17 poses of its administration of the Railroad Re18 tirement and Railroad Unemployment Insur19 ance Acts.’’.
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1 CHAPTER 6—TECHNICAL PROVISIONS

2 SEC. 13281. CORRECTIONS RELATED TO THE INCOME SE3 CURITY AND HUMAN RESOURCES PROVI4 SIONS OF THE OMNIBUS BUDGET RECONCILI5 ATION ACT OF 1990.

6 (a) AMENDMENT RELATED TO SECTION

7 5035(a)(2).—Section 5035(a)(2) of the Omnibus Budget

8 Reconciliation Act of 1990 (Public Law 101–508) is

9 amended by striking ‘‘a semicolon’’ and inserting

10 ‘‘ ‘; and’ ’’.

11 (b) REPEAL OF PROVISION INADVERTENTLY IN12 CLUDED.—Section 5057 of the Omnibus Budget Rec13 onciliation Act of 1990 (Public Law 101–508), and the

14 amendment made by such section, are hereby repealed,

15 and section 1139(d) of the Social Security Act shall be

16 applied and administered as if such section 5057 had

17 never been enacted.

18 (c) AMENDMENT RELATED TO SECTION

19 5105(d)(1)(B).—Section 5105(d)(1)(B) of the Omnibus

20 Budget Reconciliation Act of 1990 (Public Law 101–508;

21 104 Stat. 1388–266) is amended to read as follows:

22 ‘‘(B) TITLE XVI.—Section 1631(a)(2)(F)

23 (42 U.S.C. 1383(a)(2)(F)), as so redesignated

24 by subsection (c)(2) of this section, is amended

25 to read as follows:
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1 ‘‘ ‘(F) The Secretary shall include as a part of the

2 annual report required under section 704 information with

3 respect to the implementation of the preceding provisions

4 of this paragraph, including—

5 ‘‘ ‘(i) the number of cases in which the rep6 resentative payee was changed;

7 ‘‘ ‘(ii) the number of cases discovered where

8 there has been a misuse of funds;

9 ‘‘ ‘(iii) how any such cases were dealt with by

10 the Secretary;

11 ‘‘ ‘(iv) the final disposition of such cases (in12 cluding any criminal penalties imposed); and

13 ‘‘ ‘(v) such other information as the Secretary

14 determines to be appropriate.’.’’.

15 (d) AMENDMENT RELATED TO SECTION

16 5105(a)(1)(B).—The 2nd paragraph of section 1631(a)

17 (42 U.S.C. 1383(a)) is amended by striking ‘‘(A)(i) Pay18 ments’’ and inserting ‘‘(2)(A)(i) Payments’’.

19 (e) AMENDMENTS RELATED TO SECTION 5105(b).—

20 Section 1631(a)(2)(C) (42 U.S.C. 1383(a)(2)(C)) is

21 amended—

22 (1) by striking clause (ii);

23 (2) by redesignating clauses (iii), (iv), and (v)

24 as clauses (ii), (iii), and (iv), respectively; and
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1 (3) in clause (iv) (as so redesignated), by strik2 ing ‘‘(iii), and (iv)’’ and inserting ‘‘and (iii)’’.

3 (f) AMENDMENTS RELATED TO SECTION

4 5107(a)(2)(B).—Section 1631(c)(1)(B) (42 U.S.C.

5 1383(c)(1)(B)) is amended by striking ‘‘paragraph (1)’’

6 each place such term appears and inserting ‘‘subpara7 graph (A)’’.

8 (g) AMENDMENT RELATED TO SECTION

9 5109(a)(2).—Section 1631 (42 U.S.C. 1383) is amended

10 by redesignating the subsection (n) added by section

11 5109(a)(2) of the Omnibus Budget Reconciliation Act of

12 1990, as subsection (o).

13 (h) AMENDMENTS RELATED TO SECTION

14 11115(b)(2).—Section 11115(b)(2) of the Omnibus Budg15 et Reconciliation Act of 1990 (Public Law 101–508) is

16 amended—

17 (1) in subparagraph (A), by striking ‘‘para18 graph (8)’’ and inserting ‘‘paragraph (9)’’;

19 (2) in subparagraph (B), by striking ‘‘para20 graph (9)’’ and inserting ‘‘paragraph (10)’’; and

21 (3) in subparagraph (C), by redesignating the

22 new paragraph added thereby as paragraph (11).

23 (i) AMENDMENT RELATED TO SECTION

24 13101(d)(2).—Section 256(k)(2)(A) of the Balanced
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1 Budget and Emergency Deficit Control Act of 1985 is

2 amended—

3 (1) by striking ‘‘—’’ the 2nd place it appears

4 and all that follows through ‘‘(I)’’; and

5 (2) by striking ‘‘; or’’ and all that follows

6 through ‘‘(II)’’ and inserting ‘‘, except that a State

7 may not be allotted an amount under this subpara8 graph that exceeds’’.

9 (j) EFFECTIVE DATE.—Each amendment made by

10 this section shall take effect as if included in the provision

11 of the Omnibus Budget Reconciliation Act of 1990 to

12 which the amendment relates at the time such provision

13 became law.

14 SEC. 13282. TECHNICAL CORRECTIONS RELATED TO THE

15 HUMAN RESOURCE AND INCOME SECURITY

16 PROVISIONS OF THE OMNIBUS BUDGET REC17 ONCILIATION ACT OF 1989.

18 (a) AMENDMENT RELATING TO SECTION 8004(a).—

19 Section 408(m)(2)(A) (42 U.S.C. 608(m)(2)(A)) is

20 amended by striking ‘‘a fiscal’’ and inserting ‘‘the fiscal’’.

21 (b) AMENDMENT RELATING TO SECTION 8006(a).—

22 Section 473(a)(6)(B) (42 U.S.C. 673(a)(6)(B)) is amend23 ed by striking ‘‘474(a)(3)(B)’’ and inserting

24 ‘‘474(a)(3)(C)’’.
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1 (c) AMENDMENT RELATING TO SECTION

2 8007(b)(3).—Subparagraph (D) of section 475(5) (42

3 U.S.C. 675(5)(D)) is amended by moving such subpara4 graph 2 ems to the right so that the left margin of such

5 subparagraph is aligned with the left margin of subpara6 graph (C) of such section.

7 (d) EFFECTIVE DATE.—Each amendment made by

8 this section shall take effect as if the amendment had been

9 included in the provision of the Omnibus Budget Rec10 onciliation Act of 1989 to which the amendment relates,

11 at the time the provision became law.

12 SEC. 13283. ELIMINATION OF OBSOLETE PROVISIONS RE13 LATING TO TREATMENT OF THE EARNED IN14 COME TAX CREDIT.

15 (a) TREATMENT OF EITC AS EARNED INCOME.—

16 Section 1612(a)(1) (42 U.S.C. 1382a(a)(1)) is amended

17 by striking subparagraph (C) and by redesignating sub18 paragraphs (D) and (E) as subparagraphs (C) and (D),

19 respectively.

20 (b) ADJUSTMENT OF BENEFITS DUE TO TREAT21 MENT OF EITC AS EARNED INCOME.—Section 1631(b)

22 (42 U.S.C. 1383(b)) is amended by striking paragraph (3)

23 and by redesignating paragraphs (4) and (5) as para24 graphs (3) and (4), respectively.
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1 SEC. 13284. REDESIGNATION OF CERTAIN PROVISIONS.

2 Section 1631(e)(6) (42 U.S.C. 1383(e)(6)) is amend3 ed by redesignating subparagraphs (1) and (2) as sub4 paragraphs (A) and (B), respectively.

5 Subtitle C—Medicare Program

6 SEC. 13400. REFERENCES IN SUBTITLE; TABLE OF CON7 TENTS OF SUBTITLE.

8 (a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex9 cept as otherwise specifically provided, whenever in this

10 subtitle an amendment is expressed in terms of an amend11 ment to or repeal of a section or other provision, the ref12 erence shall be considered to be made to that section or

13 other provision of the Social Security Act.

14 (b) REFERENCES TO OBRA.—In this subtitle, the

15 terms ‘‘OBRA–1986’’, ‘‘OBRA–1987’’, ‘‘OBRA–1989’’,

16 and ‘‘OBRA–1990’’ refer to the Omnibus Budget Rec17 onciliation Act of 1986 (Public Law 99–509), the Omni18 bus Budget Reconciliation Act of 1987 (Public Law 100–

19 203), the Omnibus Budget Reconciliation Act of 1989

20 (Public Law 101–239), and the Omnibus Budget Rec21 onciliation Act of 1990 (Public Law 101–508), respec22 tively.

23 (c) TABLE OF CONTENTS OF SUBTITLE.—The table

24 of contents of this subtitle is as follows:

Sec. 13400. References in subtitle; table of contents of subtitle.

CHAPTER 1—PROVISIONS RELATING TO PART A
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SUBCHAPTER A—ELIMINATION OF INFLATION UPDATE FOR SERVICES

PROVIDED UNDER PART A

Sec. 13401. Inpatient hospital services and hospice care.

Sec. 13402. Limits on per diem routine service costs for extended care services.

SUBCHAPTER B—OTHER PROVISIONS RELATING TO PART A

Sec. 13411. Wage index provisions.

Sec. 13412. Transition for hospital outlier thresholds.

Sec. 13413. Essential access community hospital (EACH) amendments.

Sec. 13414. Rural health transition grant program extension.

Sec. 13415. Regional referral center extension.

Sec. 13416. Medicare-dependent, small rural hospital payment extension.

Sec. 13417. Extension of regional floor.

Sec. 13418. Extension of rural hospital demonstration.

Sec. 13419. Hemophilia pass-through extension.

Sec. 13420. State hospital payment programs.

Sec. 13421. Psychology services in hospitals.

Sec. 13422. Graduate medical education payments in hospital-owned community health centers.

Sec. 13423. Treatment of certain military facilities.

Sec. 13424. Epilepsy DRG.

Sec. 13425. Skilled nursing facility wage index.

Sec. 13426. Hospice notification to beneficiaries.

Sec. 13427. Reduction in part A premium for certain individuals with 30 or

more quarters of Social Security coverage.

Sec. 13428. Periodic updates to salary equivalency guidelines for physical therapy and respiratory therapy services.

Sec. 13429. Extension of deadline for application for geographic classification

for certain reclassified hospitals.

Sec. 13430. Clarification of DRG payment window expansion; miscellaneous

and technical corrections.

CHAPTER 2—PROVISIONS RELATING TO PART B

SUBCHAPTER A—ELIMINATION OF INFLATION UPDATE

Sec. 13431. Elimination of inflation update for physician and related professional services.

Sec. 13432. Elimination of cost-of-living adjustments for certain items and

services.

Sec. 13433. Ambulatory surgical center services.

Sec. 13434. Other items and services under part B.

SUBCHAPTER B—PHYSICIANS’ SERVICES

Sec. 13441. Reinstating separate payment for the interpretation of electrocardiograms (EKGs).

Sec. 13442. Payments for new physicians and practitioners.

Sec. 13443. Retaining payment for actual anesthesia time.

Sec. 13444. Geographic cost of practice index refinements.

Sec. 13445. Extra-billing.

Sec. 13446. Relative values for pediatric services.

Sec. 13447. Antigens under physician fee schedule.

Sec. 13448. Administration of claims relating to physicians’ services.

Sec. 13449. Miscellaneous and technical corrections.
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SUBCHAPTER C—AMBULATORY SURGICAL CENTER SERVICES

Sec. 13451. Designation of certain hospitals as eye or eye and ear hospitals.

Sec. 13452. Treatment of intraocular lenses.

Sec. 13453. Technical amendments.

SUBCHAPTER D—DURABLE MEDICAL EQUIPMENT

Sec. 13461. Certification of suppliers.

Sec. 13462. Prohibition against carrier forum shopping.

Sec. 13463. Restrictions on certain marketing and sales activities.

Sec. 13464. Anti-kickback clarification.

Sec. 13465. Limitations on beneficiary liability for noncovered services.

Sec. 13466. Adjustments for inherent reasonableness.

Sec. 13467. Treatment of nebulizers and aspirators.

Sec. 13468. Payment for ostomy supplies and other supplies.

Sec. 13469. Miscellaneous and technical corrections.

SUBCHAPTER E—OTHER PROVISIONS

Sec. 13471. Clarifying payments for medically directed certified registered

nurse anesthetist services.

Sec. 13472. Extension of Alzheimer’s disease demonstration projects.

Sec. 13473. Oral cancer drugs.

Sec. 13474. Part B premium for late enrollment.

Sec. 13475. Coverage of services of speech-language pathologists and

audiologists.

Sec. 13476. Extension of municipal health service demonstration projects.

Sec. 13477. Treatment of certain Indian health programs and facilities as Federally-qualified health centers.

Sec. 13478. Miscellaneous and technical corrections.

SUBCHAPTER F—PART B PREMIUM

Sec. 13481. Part B premium.

CHAPTER 3—PROVISIONS RELATING TO PARTS A AND B

SUBCHAPTER A—ELIMINATION OF UPDATES

Sec. 13501. Elimination of cost-of-living update in per resident amounts for direct medical education.

Sec. 13502. Elimination of inflation update in cost limits for home health services.

SUBCHAPTER B—MEDICARE SECONDARY PAYER PROVISIONS

Sec. 13511. Extension of transfer of data.

Sec. 13512. 3-year extension of medicare secondary payer to disabled beneficiaries.

Sec. 13513. 3-year extension of 18-month rule for ESRD beneficiaries.

Sec. 13514. Medicare secondary payer reforms.

SUBCHAPTER C—PHYSICIAN OWNERSHIP AND REFERRAL

Sec. 13521. Application of medicare ban on self-referrals to all payers.

Sec. 13522. Extension of self-referral ban to additional specified services.

Sec. 13523. Exceptions for both ownership and compensation arrangements.

Sec. 13524. Exceptions related only to ownership or investment.
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Sec. 13525. Exceptions related only to compensation arrangements.

Sec. 13526. Clarification concerning civil money penalty sanctions.

Sec. 13527. Requirements for group practice.

Sec. 13538. No Federal preemption of more restrictive State laws.

Sec. 13529. Miscellaneous provisions.

Sec. 13530. Effective dates.

SUBCHAPTER D—OTHER PROVISIONS

Sec. 13551. Direct graduate medical education.

Sec. 13552. Immunosuppressive drug therapy.

Sec. 13553. Reduction in payments for erythropoientin.

Sec. 13554. Qualified medicare beneficiary outreach.

Sec. 13555. Extension of social health maintenance organization demonstrations.

Sec. 13556. Hospice notification to home health beneficiaries.

Sec. 13557. Interest payments.

Sec. 13558. Peer review organizations.

Sec. 13559. Health maintenance organizations.

Sec. 13560. Medicare administration budget process.

Sec. 13561. Other provisions.

CHAPTER 4—MEDICARE SUPPLEMENTAL INSURANCE POLICIES

Sec. 13571. Standards for medicare supplemental insurance policies.

1 CHAPTER 1—PROVISIONS RELATING TO

2 PART A

3 Subchapter A—Elimination of Inflation

4 Update for Services Provided Under Part A

5 SEC. 13401. INPATIENT HOSPITAL SERVICES AND HOSPICE

6 CARE.

7 Section 1886(b)(3)(B)(iii) (42 U.S.C.

8 1395ww(b)(3)(B)(iii)) is amended—

9 (1) by striking ‘‘(iii) For purposes of this sub10 paragraph’’ and inserting ‘‘(iii)(I) Except as pro11 vided in subclause (II), for purposes of this subpara12 graph’’, and

13 (2) by adding at the end the following new

14 subclause:
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1 ‘‘(II) For purposes of this subparagraph and section

2 1814(i)(1)(C)(ii), the ‘market basket percentage increase’,

3 with respect to cost reporting periods and discharges oc4 curring in fiscal year 1994 or 1995, is 0 percent.’’.

5 SEC. 13402. LIMITS ON PER DIEM ROUTINE SERVICE COSTS

6 FOR EXTENDED CARE SERVICES.

7 The Secretary of Health and Human Services shall

8 not provide for any increase, on the basis of inflation or

9 changes in the cost of goods and services, in the limits

10 on per diem routine service costs for extended care services

11 under section 1888 of the Social Security Act for cost re12 porting periods beginning during fiscal year 1994 or fiscal

13 year 1995.

14 Subchapter B—Other Provisions Relating to

15 Part A

16 SEC. 13411. WAGE INDEX PROVISIONS.

17 (a) WAGE INDEX HOLD HARMLESS PROTECTION.—

18 (1) IN GENERAL.—Section 1886(d)(8)(C) (42

19 U.S.C. 1395ww(d)(8)(C)) is amended by adding at

20 the end the following new clause:

21 ‘‘(iv) The application of subparagraph (B) or a deci22 sion of the Medicare Geographic Classification Review

23 Board or the Secretary under paragraph (1) may not re24 sult in a reduction in an urban area’s wage index if—
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1 ‘‘(I) the urban area has a wage index below the

2 wage index for rural areas in the State in which it

3 is located; or

4 ‘‘(II) the urban area is located in a State that

5 is composed of a single urban area.’’.

6 (2) NO STANDARDIZED AMOUNT ADJUST7 MENT.—The Secretary of Health and Human Serv8 ices shall not revise the fiscal year 1992 or fiscal

9 year 1993 standardized amounts pursuant to sub10 sections (d)(3)(B) and (d)(8)(D) of section 1886 of

11 the Social Security Act to account for the amend12 ment made by paragraph (1).

13 (3) EFFECTIVE DATE.—The amendment made

14 by paragraph (1) shall apply to discharges

15 occurring—

16 (A) on or after October 1, 1991, in the

17 case of hospitals located in an urban area de18 scribed in section 1886(d)(8)(C)(iv)(I) of the

19 Social Security Act (as added by paragraph

20 (1)); and

21 (B) on or after the date of the enactment

22 of this Act, in the case of hospitals located in

23 an urban area described in section

24 1886(d)(8)(C)(iv)(II) of the Social Security Act

25 (as added by paragraph (1)).
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1 (b) UPDATING STANDARDS FOR TREATING RURAL

2 COUNTIES AS URBAN COUNTIES BASED ON RATES OF

3 COMMUTATION.—

4 (1) IN GENERAL.—Section 1886(d)(8)(B) (42

5 U.S.C. 1395ww(d)(8)(B)) is amended—

6 (A) by striking ‘‘standards’’ each place it

7 appears and inserting ‘‘standards most recently

8 used’’, and

9 (B) by striking ‘‘published in the Federal

10 Register on January 3, 1980’’.

11 (2) HOLD HARMLESS FOR COUNTIES CUR12 RENTLY TREATED AS URBAN.—Any hospital that is

13 treated as being located in an urban metropolitan

14 statistical area pursuant to section 1886(d)(8)(B) of

15 the Social Security Act as of September 30, 1992,

16 shall continue to be so treated notwithstanding the

17 amendments made by paragraph (1).

18 (3) EFFECTIVE DATE.—The amendments made

19 by paragraph (1) shall be effective on October 1,

20 1993.

21 (c) USE OF OCCUPATIONAL MIX IN GUIDELINES.—

22 (1) IN GENERAL.—Section 1886(d)(10)(D)(i)(I)

23 (42 U.S.C. 1395ww(d)(10)(D)(i)(I)) is amended by

24 inserting ‘‘(to the extent the Secretary determines

25 appropriate)’’ after ‘‘taking into account’’.
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1 (2) EFFECTIVE DATE.—The amendment made

2 by paragraph (1) shall take effect as if included in

3 the enactment of OBRA–1989.

4 SEC. 13412. TRANSITION FOR HOSPITAL OUTLIER THRESH5 OLDS.

6 Section 1886(d)(5)(A) (42 U.S.C. 1395ww(d)(5)(A))

7 is amended—

8 (1) in clause (i), by striking ‘‘The Secretary’’

9 and inserting ‘‘For discharges occurring during fis10 cal years ending on or before September 30, 1997,

11 the Secretary’’; and

12 (2) by adding at the end the following new

13 clauses:

14 ‘‘(v) The Secretary shall provide that—

15 ‘‘(I) the day outlier percentage for fiscal year

16 1995 shall be 75 percent of the day outlier percent17 age for fiscal year 1994;

18 ‘‘(II) the day outlier percentage for fiscal year

19 1996 shall be 50 percent of the day outlier percent20 age for fiscal year 1994; and

21 ‘‘(III) the day outlier percentage for fiscal year

22 1997 shall be 25 percent of the day outlier percent23 age for fiscal year 1994.

24 ‘‘(vi) For purposes of this subparagraph, the term

25 ‘day outlier percentage’ means, for a fiscal year, the per-
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1 centage of the total additional payments made by the Sec2 retary under this subparagraph for discharges in that fis3 cal year which are additional payments under clause (i).’’.

4 SEC. 13413. ESSENTIAL ACCESS COMMUNITY HOSPITAL

5 (EACH) AMENDMENTS.

6 (a) INCREASING NUMBER OF PARTICIPATING

7 STATES.—Section 1820(a)(1) (42 U.S.C. 1395i–4(a)(1))

8 is amended by striking ‘‘7’’ and inserting ‘‘9’’.

9 (b) TREATMENT OF INPATIENT HOSPITAL SERVICES

10 PROVIDED IN RURAL PRIMARY CARE HOSPITALS.—

11 (1) IN GENERAL.—Section 1820(f)(1)(F) (42

12 U.S.C. 1395i–4(f)(1)(F)) is amended to read as

13 follows:

14 ‘‘(F) subject to paragraph (4), provides not

15 more than 6 inpatient beds (meeting such con16 ditions as the Secretary may establish) for pro17 viding inpatient care to patients requiring sta18 bilization before discharge or transfer to a hos19 pital, except that the facility may not provide

20 any inpatient hospital services—

21 ‘‘(i) to any patient whose attending

22 physician does not certify that the patient

23 may reasonably be expected to be dis24 charged or transferred to a hospital within

25 72 hours of admission to the facility; or
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1 ‘‘(ii) consisting of surgery or any

2 other service requiring the use of general

3 anesthesia (other than surgical procedures

4 specified by the Secretary under section

5 1833(i)(1)(A)), unless the attending physi6 cian certifies that the risk associated with

7 transferring the patient to a hospital for

8 such services outweighs the benefits of

9 transferring the patient to a hospital for

10 such services.’’.

11 (2) LIMITATION ON AVERAGE LENGTH OF

12 STAY.—Section 1820(f) (42 U.S.C. 1395i–4(f)) is

13 amended by adding at the end the following new

14 paragraph:

15 ‘‘(4) LIMITATION ON AVERAGE LENGTH OF IN16 PATIENT STAYS.—The Secretary may terminate a

17 designation of a rural primary care hospital under

18 paragraph (1) if the Secretary finds that the average

19 length of stay for inpatients at the facility during

20 the previous year in which the designation was in ef21 fect exceeded 72 hours. In determining the compli22 ance of a facility with the requirement of the pre23 vious sentence, there shall not be taken into account

24 periods of stay of inpatients in excess of 72 hours

25 to the extent such periods exceed 72 hours because
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1 transfer to a hospital is precluded because of inclem2 ent weather or other emergency conditions.’’.

3 (3) CONFORMING AMENDMENT.—Section

4 1814(a)(8) (42 U.S.C. 1395f(a)(8)) is amended by

5 striking ‘‘such services’’ and all that follows and in6 serting ‘‘the individual may reasonably be expected

7 to be discharged or transferred to a hospital within

8 72 hours after admission to the rural primary care

9 hospital.’’.

10 (4) GAO REPORTS.—Not later than 2 years

11 after the date of the enactment of this Act, the

12 Comptroller General shall submit reports to Con13 gress on—

14 (A) the application of the requirements

15 under section 1820(f) of the Social Security Act

16 (as amended by this subsection) that rural pri17 mary care hospitals provide inpatient care only

18 to those individuals whose attending physicians

19 certify may reasonably be expected to be dis20 charged within 72 hours after admission and

21 maintain an average length of inpatient stay

22 during a year that does not exceed 72 hours;

23 and

24 (B) the extent to which such requirements

25 have resulted in such hospitals providing inpa-
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1 tient care beyond their capabilities or have lim2 ited the ability of such hospitals to provide

3 needed services.

4 (c) DESIGNATION OF HOSPITALS.—

5 (1) PERMITTING DESIGNATION OF HOSPITALS

6 LOCATED IN URBAN AREAS.—

7 (A) IN GENERAL.—Section 1820 (42

8 U.S.C. 1395i–4) is amended—

9 (i) by striking paragraph (1) of sub10 section (e) and redesignating paragraphs

11 (2) through (6) as paragraphs (1) through

12 (5); and

13 (ii) in subsection (e)(1)(A) (as redes14 ignated by subparagraph (A))—

15 (I) by striking ‘‘is located’’ and

16 inserting ‘‘except in the case of a hos17 pital located in an urban area, is lo18 cated’’,

19 (II) by striking ‘‘, (ii)’’ and in20 serting ‘‘or (ii)’’,

21 (III) by striking ‘‘or (iii)’’ and all

22 that follows through ‘‘section,’’, and

23 (IV) in subsection (i)(1)(B), by

24 striking ‘‘paragraph (3)’’ and insert25 ing ‘‘paragraph (2)’’.
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1 (B) NO CHANGE IN MEDICARE PROSPEC2 TIVE PAYMENT.—Section 1886(d)(5)(D) (42

3 U.S.C. 1395ww(d)(5)(D)) is amended—

4 (i) in clause (iii)(III), by inserting ‘‘lo5 cated in a rural area and’’ after ‘‘that is’’,

6 and

7 (ii) in clause (v), by inserting ‘‘located

8 in a rural area and’’ after ‘‘in the case of

9 a hospital’’.

10 (2) PERMITTING HOSPITALS LOCATED IN AD11 JOINING STATES TO PARTICIPATE IN STATE PRO12 GRAM.—

13 (A) IN GENERAL.—Section 1820 (42

14 U.S.C. 1395i–4) is amended—

15 (i) by redesignating subsection (k) as

16 subsection (l); and

17 (ii) by inserting after subsection (j)

18 the following new subsection:

19 ‘‘(k) ELIGIBILITY OF HOSPITALS NOT LOCATED IN

20 PARTICIPATING STATES.—Notwithstanding any other

21 provision of this section—

22 ‘‘(1) for purposes of including a hospital or fa23 cility as a member institution of a rural health net24 work, a State may designate a hospital or facility

25 that is not located in the State as an essential access
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1 community hospital or a rural primary care hospital

2 if the hospital or facility is located in an adjoining

3 State and is otherwise eligible for designation as

4 such a hospital;

5 ‘‘(2) the Secretary may designate a hospital or

6 facility that is not located in a State receiving a

7 grant under subsection (a)(1) as an essential access

8 community hospital or a rural primary care hospital

9 if the hospital or facility is a member institution of

10 a rural health network of a State receiving a grant

11 under such subsection; and

12 ‘‘(3) a hospital or facility designated pursuant

13 to this subsection shall be eligible to receive a grant

14 under subsection (a)(2).’’.

15 (B) CONFORMING AMENDMENTS.—(i) Sec16 tion 1820(c)(1) (42 U.S.C. 1395i–4(c)(1)) is

17 amended by striking ‘‘paragraph (3)’’ and in18 serting ‘‘paragraph (3) or subsection (k)’’.

19 (ii) Paragraphs (1)(A) and (2)(A) of sec20 tion 1820(i) (42 U.S.C. 1395i–4(i)) are each

21 amended—

22 (I) in clause (i), by striking ‘‘(a)(1)’’

23 and inserting ‘‘(a)(1) (except as provided

24 in subsection (k))’’, and
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1 (II) in clause (ii), by striking ‘‘sub2 paragraph (B)’’ and inserting ‘‘subpara3 graph (B) or subsection (k)’’.

4 (d) SKILLED NURSING SERVICES IN RURAL PRIMARY

5 CARE HOSPITALS.—Section 1820(f)(3) (42 U.S.C. 1395i–

6 4(f)(3)) is amended by striking ‘‘because the facility’’ and

7 all that follows and inserting the following: ‘‘because, at

8 the time the facility applies to the State for designation

9 as a rural primary care hospital, there is in effect an

10 agreement between the facility and the Secretary under

11 section 1883 under which the facility’s inpatient hospital

12 facilities are used for the furnishing of extended care serv13 ices, except that the number of beds used for the furnish14 ing of such services may not exceed the total number of

15 licensed inpatient beds at the time the facility applies to

16 the State for such designation (minus the number of inpa17 tient beds used for providing inpatient care pursuant to

18 paragraph (1)(F)). For purposes of the previous sentence,

19 the number of beds of the facility used for the furnishing

20 of extended care services shall not include any beds of a

21 unit of the facility that is licensed as a distinct-part skilled

22 nursing facility at the time the facility applies to the State

23 for designation as a rural primary care hospital.’’.

24 (e) PAYMENT FOR OUTPATIENT RURAL PRIMARY

25 CARE HOSPITAL SERVICES.—
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1 (1) IMPLEMENTATION OF PROSPECTIVE PAY2 MENT SYSTEM.—Section 1834(g) (42 U.S.C.

3 1395m(g)) is amended—

4 (A) in paragraph (1), by striking ‘‘during

5 a year before 1993’’ and inserting ‘‘during a

6 year before the prospective payment system de7 scribed in paragraph (2) is in effect’’; and

8 (B) in paragraph (2), by striking ‘‘January

9 1, 1993,’’ and inserting ‘‘January 1, 1996,’’.

10 (2) NO USE OF CUSTOMARY CHARGE IN DETER11 MINING PAYMENT.—Section 1834(g)(1) (42 U.S.C.

12 1395m(g)(1)) is amended by adding at the end the

13 following:

14 ‘‘The amount of payment shall be determined under

15 either method without regard to the amount of the

16 customary or other charge.’’.

17 (f) CLARIFICATION OF PHYSICIAN STAFFING RE18 QUIREMENT FOR RURAL PRIMARY CARE HOSPITALS.—

19 Section 1820(f)(1)(H) (42 U.S.C. 1395i–4(f)(1)(H)) is

20 amended by striking the period and inserting the follow21 ing: ‘‘, except that in determining whether a facility meets

22 the requirements of this subparagraph, subparagraphs (E)

23 and (F) of that paragraph shall be applied as if any ref24 erence to a ‘physician’ is a reference to a physician as de25 fined in section 1861(r)(1).’’.
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1 (g) TECHNICAL AMENDMENTS RELATING TO PART

2 A DEDUCTIBLE, COINSURANCE, AND SPELL OF ILL3 NESS.—(1) Section 1812(a)(1) (42 U.S.C. 1395d(a)(1))

4 is amended—

5 (A) by striking ‘‘inpatient hospital services’’ the

6 first place it appears and inserting ‘‘inpatient hos7 pital services or inpatient rural primary care hos8 pital services’’;

9 (B) by striking ‘‘inpatient hospital services’’ the

10 second place it appears and inserting ‘‘such serv11 ices’’; and

12 (C) by striking ‘‘and inpatient rural primary

13 care hospital services’’.

14 (2) Sections 1813(a) and 1813(b)(3)(A) (42 U.S.C.

15 1395e(a), 1395e(b)(3)(A)) are each amended by striking

16 ‘‘inpatient hospital services’’ each place it appears and in17 serting ‘‘inpatient hospital services or inpatient rural pri18 mary care hospital services’’.

19 (3) Section 1813(b)(3)(B) (42 U.S.C.

20 1395e(b)(3)(B)) is amended by striking ‘‘inpatient hos21 pital services’’ and inserting ‘‘inpatient hospital services,

22 inpatient rural primary care hospital services’’.

23 (4) Section 1861(a) (42 U.S.C. 1395x(a)) is

24 amended—
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1 (A) in paragraphs (1), by striking ‘‘inpatient

2 hospital services’’ and inserting ‘‘inpatient hospital

3 services, inpatient rural primary care hospital serv4 ices’’; and

5 (B) in paragraph (2), by striking ‘‘hospital’’

6 and inserting ‘‘hospital or rural primary care hos7 pital’’.

8 (h) AUTHORIZATION OF APPROPRIATIONS.—Section

9 1820(k) (42 U.S.C. 1395i–4(k)) is amended by striking

10 ‘‘1990, 1991, and 1992’’ and inserting ‘‘1990 through

11 1995’’.

12 (i) EFFECTIVE DATE.—The amendments made by

13 this section shall take effect on the date of the enactment

14 of this Act.

15 SEC. 13414. RURAL HEALTH TRANSITION GRANT PROGRAM

16 EXTENSION.

17 Section 4005(e)(9) of OBRA–1987 is amended—

18 (1) by striking ‘‘1989 and’’ and inserting

19 ‘‘1989,’’; and

20 (2) by striking ‘‘1992’’ and inserting ‘‘1992

21 and $30,000,000 for each of fiscal years 1993

22 through 1997’’.

23 SEC. 13415. REGIONAL REFERRAL CENTER EXTENSION.

24 (a) EXTENSION OF CLASSIFICATION THROUGH FIS25 CAL YEAR 1994.—Effective on the date of the enactment
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1 of this Act, section 6003(d) of such Act (42 U.S.C.

2 1395ww note) is amended by striking ‘‘October 1, 1992’’

3 and inserting ‘‘October 1, 1994’’.

4 (b) PERMITTING HOSPITALS TO DECLINE RECLASSI5 FICATION.—If any hospital fails to qualify as a rural refer6 ral center under section 1886(d)(5)(C) of the Social Secu7 rity Act as a result of a decision by the Medicare Geo8 graphic Classification Review Board under section

9 1886(d)(10) of such Act to reclassify the hospital as being

10 located in an urban area for fiscal year 1993 or fiscal year

11 1994, the Secretary of Health and Human Services

12 shall—

13 (1) notify such hospital of such failure to

14 qualify,

15 (2) provide an opportunity for such hospital to

16 decline such reclassification, and

17 (3) if the hospital declines such reclassification,

18 administer the Social Security Act (other than sec19 tion 1886(d)(8)(D)) for such fiscal year as if the de20 cision by the Review Board had not occurred.

21 (c) REQUIRING LUMP-SUM RETROACTIVE PAYMENT

22 FOR HOSPITALS LOSING CLASSIFICATION.—

23 (1) IN GENERAL.—In the case of an affected

24 regional referral center (as described in paragraph

25 (2)), the Secretary of Health and Human Services
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1 shall make a lump sum payment to the center equal

2 to the difference between the aggregate payment

3 made to the center under section 1886 of such Act

4 (excluding outlier payments under subsection

5 (d)(5)(A) of such section) during the period of appli6 cability described in paragraph (3) and the aggre7 gate payment that would have been made to the cen8 ter under such section if, during the period of appli9 cability, the center was classified a regional referral

10 center under section 1886(d)(5)(C) of such Act.

11 (2) AFFECTED CENTERS DESCRIBED.—In para12 graph (1), an ‘‘affected regional referral center’’ is

13 a hospital classified as regional referral center under

14 section 1886(d)(5)(C) of the Social Security Act as

15 of September 30, 1992, that was not classified as

16 such a center after such date but would have been

17 so classified if the reference in section 6003(d) of

18 OBRA–1989 to ‘‘October 1, 1992,’’ had been

19 deemed a reference to ‘‘October 1, 1994,’’.

20 (3) PERIOD OF APPLICABILITY.—In paragraph

21 (1), the ‘‘period of applicability’’ is the period that

22 begins on October 1, 1992, and ends on the date of

23 the enactment of this Act.
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1 SEC. 13416. MEDICARE-DEPENDENT, SMALL RURAL HOS2 PITAL PAYMENT EXTENSION.

3 (a) EXTENSION OF ADDITIONAL PAYMENTS.—Effec4 tive on the date of the enactment of this Act, section

5 1886(d)(5)(G) (42 U.S.C. 1395ww(d)(5)(G)) is

6 amended—

7 (1) in clause (i) in the matter preceding

8 subclause (I)—

9 (A) by inserting ‘‘(or portion thereof)’’

10 after ‘‘cost reporting period’’, and

11 (B) by striking ‘‘March 31, 1993,’’ and all

12 that follows and inserting the following: ‘‘Sep13 tember 30, 1994, in the case of a subsection (d)

14 hospital which is a medicare-dependent, small

15 rural hospital, payment under paragraph (1)(A)

16 shall be equal to the sum of the amount deter17 mined under clause (ii) and the amount deter18 mined under paragraph (1)(A)(iii).’’;

19 (2) by redesignating clauses (ii) and (iii) as

20 clauses (iii) and (iv); and

21 (3) by inserting after clause (i) the following

22 new clause:

23 ‘‘(ii) The amount determined under this clause is—

24 ‘‘(I) for discharges occurring during the first 3

25 12-month cost reporting periods that begin on or

26 after April 1, 1990, the amount by which the hos-
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1 pital’s target amount for the cost reporting period

2 (as defined in subsection (b)(3)(D)) exceeds the

3 amount determined under paragraph (1)(A)(iii); and

4 ‘‘(II) for discharges occurring during any subse5 quent cost reporting period (or portion thereof), 50

6 percent of the amount by which the hospital’s target

7 amount for the cost reporting period (as defined in

8 subsection (b)(3)(D)) exceeds the amount deter9 mined under paragraph (1)(A)(iii).’’.

10 (b) PERMITTING HOSPITALS TO DECLINE RECLASSI11 FICATION.—If any hospital fails to qualify as a medicare12 dependent, small rural hospital under section

13 1886(d)(5)(G)(i) of the Social Security Act as a result of

14 a decision by the Medicare Geographic Classification Re15 view Board under section 1886(d)(10) of such Act to re16 classify the hospital as being located in an urban area for

17 fiscal year 1993 or fiscal year 1994, the Secretary of

18 Health and Human Services shall—

19 (1) notify such hospital of such failure to

20 qualify,

21 (2) provide an opportunity for such hospital to

22 decline such reclassification, and

23 (3) if the hospital declines such reclassification,

24 administer the Social Security Act (other than sec-
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1 tion 1886(d)(8)(D)) for such fiscal year as if the de2 cision by the Review Board had not occurred.

3 (c) REQUIRING LUMP-SUM RETROACTIVE PAY4 MENT.—

5 (1) IN GENERAL.—In the case of a hospital

6 treated as a medicare dependent, small rural hos7 pital under section 1886(d)(5)(G) of the Social Se8 curity Act, the Secretary of Health and Human

9 Services shall make a lump sum payment to the hos10 pital equal to the difference between the aggregate

11 payment made to the hospital under section 1886 of

12 such Act (excluding outlier payments under sub13 section (d)(5)(A) of such section) during the period

14 of applicability described in paragraph (2) and the

15 aggregate payment that would have been made to

16 the hospital under such section if, during the period

17 of applicability, section 1886(d)(5)(G) of such Act

18 had been applied as if—

19 (A) the reference in clause (i) to ‘‘March

20 31, 1993,’’ had been deemed a reference to

21 ‘‘September 30, 1994,’’; and

22 (B) the amendments made by subsection

23 (a) had been in effect.

24 (2) PERIOD OF APPLICABILITY.—In paragraph

25 (1), the ‘‘period of applicability’’ is, with respect to
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1 a hospital, the period that begins on the first day of

2 the hospital’s first 12-month cost reporting period

3 that begins after April 1, 1992, and ends on the

4 date of the enactment of this Act.

5 SEC. 13417. EXTENSION OF REGIONAL FLOOR.

6 Section 1886(d)(1)(A)(iii) (42 U.S.C.

7 1395ww(d)(1)(A)(iii)) is amended by striking ‘‘September

8 30, 1993’’ and inserting ‘‘September 30, 1996’’.

9 SEC. 13418. EXTENSION OF RURAL HOSPITAL DEMONSTRA10 TION.

11 Section 4008(i)(1) of OBRA–1990 is amended by

12 adding at the end the following new sentence: ‘‘The Sec13 retary shall continue any such demonstration project until

14 at least December 31, 1995.’’.

15 SEC. 13419. HEMOPHILIA PASS-THROUGH EXTENSION.

16 Effective as if included in the enactment of OBRA–

17 1989, section 6011(d) of such Act is amended by striking

18 ‘‘2 years after the date of enactment of this Act’’ and

19 inserting ‘‘September 30, 1994’’.

20 SEC. 13420. STATE HOSPITAL PAYMENT PROGRAMS.

21 In the case of a State hospital reimbursement system

22 that meets the requirements of section 1814(b)(3) of the

23 Social Security Act, no other provision of law shall be con24 strued as preventing the system from providing that pay-
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1 ment for services covered under the system be made on

2 the basis of rates provided for under the system.

3 SEC. 13421. PSYCHOLOGY SERVICES IN HOSPITALS.

4 Section 1861(e)(4) (42 U.S.C. 1395x(e)(4)) is

5 amended by striking ‘‘physician;’’ and inserting ‘‘physi6 cian, except that a patient receiving qualified psychologist

7 services (as defined in subsection (ii)) may be under the

8 care of a clinical psychologist with respect to such services

9 to the extent permitted under State law;’’.

10 SEC. 13422. GRADUATE MEDICAL EDUCATION PAYMENTS IN

11 HOSPITAL-OWNED COMMUNITY HEALTH CEN12 TERS.

13 Section 1886(d)(5)(B)(iv) (42 U.S.C.

14 1395ww(d)(5)(B)(iv)) is amended by inserting after ‘‘the

15 hospital’’ the following: ‘‘or providing services at any en16 tity receiving a grant under section 330 of the Public

17 Health Service Act that is under the ownership or control

18 of the hospital (if the hospital incurs all, or substantially

19 all, of the costs of the services furnished to the hospital

20 by such interns and residents)’’.

21 SEC. 13423. TREATMENT OF CERTAIN MILITARY FACILI22 TIES.

23 (a) COVERAGE OF SERVICES PROVIDED IN CERTAIN

24 UNIFORMED SERVICES TREATMENT FACILITIES.—
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1 (1) IN GENERAL.—The Secretary of Health and

2 Human Services may not take any recoupment ac3 tion to recover amounts that were paid by the Unit4 ed States under title XVIII of the Social Security

5 Act to the facilities described in paragraph (2) (or

6 to other individuals or entities with whom such fa7 cilities had entered into agreements to provide serv8 ices under such title) for services provided during

9 the period beginning October 1, 1986, and ending

10 December 31, 1989, except to the extent that funds

11 were obligated to the Uniformed Services Treatment

12 Facilities program to fulfill such an action pursuant

13 to title VI of the Department of Defense Appropria14 tions Act, 1993.

15 (2) FACILITIES DESCRIBED.—The facilities re16 ferred to in paragraph (1) are the hospitals de17 scribed in section 248c of title 42, United States

18 Code, that are located in Boston, Massachusetts;

19 Baltimore, Maryland; and Seattle, Washington.

20 (b) STUDY OF JOINT MEDICAL FACILITIES.—

21 (1) STUDY.—The Secretary of Health and

22 Human Services, in consultation with the Secretary

23 of Defense and the Secretary of Veterans Affairs,

24 shall conduct a study of the feasibility and desirabil25 ity of establishing joint medical facilities among the
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1 Department of Defense, the Department of Veter2 ans’ Affairs, and other public and private entities,

3 and shall include in such study an analysis of the

4 need to make changes in the medicare and medicaid

5 programs (including facility certification standards

6 under such programs) in order to facilitate the es7 tablishment of such joint medical facilities.

8 (2) REPORT.—Not later than October 1, 1993,

9 the Secretary of Health and Human Services shall

10 submit a report to Congress on the study conducted

11 under paragraph (1).

12 SEC. 13424. EPILEPSY DRG.

13 (a) IN GENERAL.—The Secretary of Health and

14 Human Services shall review the diagnosis-related groups

15 established pursuant to section 1886(d)(4) of the Social

16 Security Act that are assigned to discharges of patients

17 with intractable epilepsy, including patients whose admis18 sions involve intensive neurodiagnostic monitoring, and

19 shall revise, for discharges occurring on or after October

20 1, 1994, the assignment of discharges to such groups as

21 the Secretary considers appropriate to account for the re22 source requirements of such patients.

23 (b) CONSULTATION REQUIREMENTS.—In carrying

24 out subsection (a), the Secretary shall consult with the

25 Prospective Payment Assessment Commission and na-
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1 tional organizations representing individuals with epilepsy

2 or individuals and entities providing specialized medical

3 services to such individuals related to the treatment of

4 epilepsy.

5 SEC. 13425. SKILLED NURSING FACILITY WAGE INDEX.

6 (a) IN GENERAL.—Not later than 1 year after the

7 date of the enactment of this Act, the Secretary of Health

8 and Human Services shall begin to collect data on em9 ployee compensation and paid hours of employment in

10 skilled nursing facilities for the purpose of constructing

11 a skilled nursing facility wage index adjustment to the

12 routine service cost limits required under section

13 1888(a)(4) of the Social Security Act.

14 (b) PROPAC REPORT.—The Prospective Payment

15 Assessment Commission shall, by March 1, 1994, study

16 and report to the Congress on the impact of applying rou17 tine per diem cost limits for skilled nursing facilities on

18 a regional basis.

19 SEC. 13426. HOSPICE NOTIFICATION TO BENEFICIARIES.

20 (a) HOSPITALS.—Section 1861(ee)(2)(D) (42 U.S.C.

21 1395x(ee)(2)(D)) is amended by inserting ‘‘, including

22 hospice services,’’ after ‘‘post-hospital services’’.

23 (b) NURSING FACILITIES.—Section 1819(c)(1)(B)

24 (42 U.S.C. 1395i–3(c)(1)(B)) is amended—

25 (1) by striking ‘‘and’’ at the end of clause (ii);
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1 (2) by striking the period at the end of clause

2 (iii) and inserting ‘‘; and’’; and

3 (3) by inserting after clause (iii) the following

4 new clause:

5 ‘‘(iv) inform each resident who is enti6 tled to benefits under this title, orally and

7 in writing at the time of admission to the

8 facility, of the entitlement of individuals to

9 hospice care under section 1812(a)(4) (un10 less there is no hospice program providing

11 hospice care for which payment may be

12 made under this title within the geographic

13 area of the facility and it is not the com14 mon practice of the facility to refer pa15 tients to hospice programs located outside

16 such geographic area).’’.

17 (c) EFFECTIVE DATE.—The amendments made by

18 this section shall apply to services furnished on or after

19 the first day of the first month beginning more than one

20 year after the date of the enactment of this Act.

21 SEC. 13427. REDUCTION IN PART A PREMIUM FOR CERTAIN

22 INDIVIDUALS WITH 30 OR MORE QUARTERS

23 OF SOCIAL SECURITY COVERAGE.

24 (a) IN GENERAL.—Section 1818(d) (42 U.S.C.

25 1395i–2(d)) is amended—
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1 (1) in the second sentence of paragraph (2), by

2 striking ‘‘Such amount’’ and inserting ‘‘Subject to

3 paragraph (4), the amount of an individual’s month4 ly premium under this section’’; and

5 (2) by adding at the end the following new

6 paragraph:

7 ‘‘(4)(A) In the case of an individual described in sub8 paragraph (B), the monthly premium for a month shall

9 be reduced by the applicable reduction percent specified

10 in the following table:

The applicable reduction

‘‘For a month in: percent is:

1994 ......................................................................................... 25 percent

1995 ......................................................................................... 30 percent

1996 ......................................................................................... 35 percent

1997 ......................................................................................... 40 percent

1998 or subsequent year .......................................................... 45 percent.

11 ‘‘(B) An individual described in this subparagraph

12 with respect to a month is an individual who establishes

13 to the satisfaction of the Secretary that, as of the last

14 day of the previous month, the individual—

15 ‘‘(i) had at least 30 quarters of coverage under

16 title II;

17 ‘‘(ii) was married (and had been married for

18 the previous 1 year period) to an individual who had

19 at least 30 quarters of coverage under such title;

20 ‘‘(iii) had been married to an individual for a

21 period of at least 1 year (at the time of the individ-
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1 ual’s death) if at such time the individual had at

2 least 30 quarters of coverage under such title; and

3 ‘‘(iv) is divorced from an individual and had

4 been married to the individual for a period of at

5 least 10 years (at the time of the divorce) if at such

6 time the individual had at least 30 quarters of cov7 erage under such title.’’.

8 (b) EFFECTIVE DATE.—The amendments made by

9 this section shall apply to monthly premiums under section

10 1818 of the Social Security Act for months beginning with

11 January 1, 1994.

12 SEC. 13428. PERIODIC UPDATES TO SALARY EQUIVALENCY

13 GUIDELINES FOR PHYSICAL THERAPY AND

14 RESPIRATORY THERAPY SERVICES.

15 (a) IN GENERAL.—Section 1861(v)(5) (42 U.S.C.

16 1395x(v)(5)) is amended by adding at the end the follow17 ing new subparagraph:

18 ‘‘(C) Using the most recent available data, the Sec19 retary shall update, not less often than every 3 years, the

20 salary equivalency guidelines used under subparagraph

21 (A) with respect to physical therapy and respiratory

22 therapy services.’’.

23 (b) EFFECTIVE DATE.—The Secretary of Health and

24 Human Services shall first update the salary equivalency

25 guidelines, under the amendment made by subsection (a),
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1 by not later than December 31, 1993. Such updated

2 guidelines shall apply to cost reporting periods beginning

3 on or after July 1, 1993.

4 SEC. 13429. EXTENSION OF DEADLINE FOR APPLICATION

5 FOR GEOGRAPHIC CLASSIFICATION FOR CER6 TAIN RECLASSIFIED HOSPITALS.

7 Notwithstanding section 1886(d)(10)(C)(ii) of the

8 Social Security Act, a hospital may submit an application

9 to the Medicare Geographic Classification Review Board

10 requesting a change in geographic classification for fiscal

11 year 1994 after the first day of fiscal year 1993 if—

12 (1) the hospital’s geographic classification for

13 fiscal year 1994 was changed from urban to rural as

14 a result of the issuance of the Revised Statistical

15 Definitions for Metropolitan Areas established by

16 the Office of Management and Budget on December

17 28, 1992 (pursuant to OMB Bulletin No. 93-05);

18 and

19 (2) the hospital submits the application not

20 later than 60 days after the date of the enactment

21 of this Act.
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1 SEC. 13430. CLARIFICATION OF DRG PAYMENT WINDOW EX2 PANSION; MISCELLANEOUS AND TECHNICAL

3 CORRECTIONS.

4 (a) CLARIFICATION OF DRG PAYMENT WINDOW EX5 PANSION.—The first sentence of section 1886(a)(4) (42

6 U.S.C. 1395ww(a)(4)) is further amended by striking

7 ‘‘and includes’’ and inserting ‘‘and (in the case of a sub8 section (d) hospital) includes’’.

9 (b) TECHNICAL CORRECTION RELATING TO RESI10 DENT ASSESSMENT IN NURSING HOMES.—Section

11 1819(b)(3)(C)(i)(I) (42 U.S.C. 1395i–3(b)(3)(C)(i)(I)) is

12 amended by striking ‘‘not later than’’ before ‘‘14 days’’.

13 (c) CLERICAL CORRECTIONS.—(1) Section

14 1814(i)(1)(C)(i) (42 U.S.C. 1395f(i)(1)(C)(i)) is amended

15 by striking ‘‘1990,,’’ and inserting ‘‘1990,’’.

16 (2) Section 1816(f)(2)(A)(ii) (42 U.S.C.

17 1396h(f)(2)(A)(ii)) is amended by striking ‘‘such agency’’

18 and inserting ‘‘such agency’s’’.

19 (3) Section 1886(d)(1)(A)(iii) (42 U.S.C.

20 1395ww(d)(1)(A)(iii)) is amended by striking ‘‘, the sum

21 of’’ and inserting ‘‘is equal to the sum of’’.
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1 CHAPTER 2—PROVISIONS RELATING TO

2 PART B

3 Subchapter A—Elimination of Inflation

4 Update

5 SEC. 13431. ELIMINATION OF INFLATION UPDATE FOR PHY6 SICIAN AND RELATED PROFESSIONAL SERV7 ICES.

8 (a) NO INCREASE IN INDEX.—Section 1848(d)(3)(A)

9 (42 U.S.C. 1395w–4(d)(3)(A)) is amended—

10 (1) in clause (i), by striking ‘‘clause (iii)’’ and

11 inserting ‘‘clauses (iii) and (iv)’’, and

12 (2) by adding at the end the following new

13 clause:

14 ‘‘(iv) NO INCREASE IN INDEX FOR

15 1994 OR 1995.—In applying clause (i) for

16 services furnished on or after January 1,

17 1994, the percentage increase in the ap18 propriate update index for each of 1994

19 and 1995 shall be 0 percent.’’.

20 (b) NO INCREASE IN MEI FOR 1994 AND 1995.—Sec21 tion 1842(b)(4)(E) (42 U.S.C. 1395u(b)(4)(E)) is amend22 ed by adding at the end the following new clause:

23 ‘‘(vi) For purposes of this part for items and services

24 furnished in 1994 or 1995, the percentage increase in the

25 MEI is 0 percent.’’.
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1 SEC. 13432. ELIMINATION OF COST-OF-LIVING ADJUST2 MENTS FOR CERTAIN ITEMS AND SERVICES.

3 (a) CLINICAL LABORATORY SERVICES.—Section

4 1833(h)(2)(A)(ii) (42 U.S.C. 1395l(h)(2)(A)(ii)) is

5 amended—

6 (1) by striking ‘‘and’’ at the end of subclause

7 (II),

8 (2) by striking the period at the end of

9 subclause (III) and inserting ‘‘, and’’, and

10 (3) by adding at the end the following new

11 subclause:

12 ‘‘(IV) the annual adjustment in the fee sched13 ules determined under clause (i) for each of the

14 years 1994 and 1995 shall be 0 percent.’’.

15 (b) DURABLE MEDICAL EQUIPMENT.—Section

16 1834(a)(14) (42 U.S.C. 1395m(a)(14)) is amended—

17 (1) in subparagraph (A), as amended by

18 13469(a), by striking ‘‘and’’ at the end;

19 (2) in subparagraph (B)—

20 (A) by striking ‘‘a subsequent year’’ and

21 inserting ‘‘1993’’, and

22 (B) by striking ‘‘June of the previous

23 year.’’ and inserting ‘‘June 1992,’’; and

24 (3) by adding at the end the following new sub25 paragraphs:
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1 ‘‘(C) for 1994 and 1995, no percentage

2 change, and

3 ‘‘(D) for a subsequent year, the percentage

4 increase in the consumer price index for all

5 urban consumers (U.S. city average) for the 12-

6 month period ending with June of the previous

7 year.’’.

8 (c) ORTHOTICS AND PROSTHETICS.—Section

9 1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A)) is amended—

10 (1) in clause (i), by striking ‘‘and’’;

11 (2) in clause (ii), by striking ‘‘a subsequent

12 year’’ and inserting ‘‘1992 and 1993’’; and

13 (3) by adding at the end the following new

14 clauses:

15 ‘‘(iii) for 1994 and 1995, 0 percent,

16 and

17 ‘‘(iv) for a subsequent year, the per18 centage increase in the consumer price

19 index for all urban consumers (United

20 States city average) for the 12-month pe21 riod ending with June of the previous

22 year;’’.

23 (d) REASONABLE CHARGE LIMITS FOR ENTERAL

24 AND PARENTERAL NUTRIENTS, SUPPLIES AND EQUIP25 MENT.—In determining the amount of payment under
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1 part B of title XVIII of the Social Security Act during

2 1994 and 1995, the charges determined to be reasonable

3 with respect to parenteral and enteral nutrients, supplies,

4 and equipment may not exceed the charges determined to

5 be reasonable with respect to such nutrients, supplies, and

6 equipment during 1993.

7 SEC. 13433. AMBULATORY SURGICAL CENTER SERVICES.

8 (a) ELIMINATION OF INFLATION UPDATE.—The Sec9 retary of Health and Human Services shall not provide

10 for any inflation update in the payment amounts under

11 subparagraphs (A) and (B) of section 1833(i)(2) of the

12 Social Security Act for fiscal year 1994 or for fiscal year

13 1995.

14 (b) CONFORMING AMENDMENT.—Section

15 1833(i)(2)(C) (42 U.S.C. 1395l(i)(2)(C)), as added by

16 section 13453(a)(2)(B), is amended by striking ‘‘fiscal

17 year 1995’’ and inserting ‘‘fiscal year 1996’’.

18 SEC. 13434. OTHER ITEMS AND SERVICES UNDER PART B.

19 (a) RURAL HEALTH CLINIC SERVICES; FEDERALLY20 QUALIFIED HEALTH CENTER SERVICES; COMPREHEN21 SIVE OUTPATIENT REHABILITATION FACILITY SERV22 ICES.—In determining the amount of payment made for

23 rural health clinic services, Federally qualified health cen24 ter services, or comprehensive outpatient rehabilitation fa25 cility services furnished under part B of title XVIII of the
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1 Social Security Act for services furnished on or after Jan2 uary 1, 1994, the Secretary of Health and Human Serv3 ices shall provide that any inflation update, in the applica4 ble limits used to determine the costs which are reasonable

5 and related to the cost of furnishing such services under

6 section 1833(a)(3) of such Act, that would otherwise have

7 applied for 1994 or for 1995 shall be deemed to be 0

8 percent.

9 (b) DIALYSIS SERVICES.—In determining the amount

10 of payment made for dialysis services furnished under part

11 B of title XVIII of the Social Security Act on or after

12 January 1, 1994, the Secretary of Health and Human

13 Services shall provide that any inflation update, in the

14 payment amounts determined under section

15 1881(b)(2)(B) of such Act or the rates determined under

16 section 1881(b)(7) of such Act, that would otherwise have

17 applied for 1994 or for 1995 shall be deemed to be 0

18 percent.

19 (c) OTHER PART B ITEMS AND SERVICES.—In deter20 mining the amount of payment made for an item or service

21 furnished under part B of title XVIII of the Social Secu22 rity Act on or after January 1, 1994, other than an item

23 or service to which a preceding provision of (or amend24 ment made by) this subchapter applies, the Secretary of

25 Health and Human Services shall provide that any infla-
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1 tion update in the fee schedule amount for the item or

2 service established under such part B of such title, or (if

3 applicable) any applicable limit used to determine the ac4 tual charge, reasonable charge, or reasonable cost for the

5 item or service under such part, that would otherwise have

6 applied for 1994 or for 1995 shall be deemed to be 0

7 percent.

8 Subchapter B—Physicians’ Services

9 SEC. 13441. REINSTATING SEPARATE PAYMENT FOR THE

10 INTERPRETATION OF ELECTROCARDIO11 GRAMS (EKGS).

12 (a) IN GENERAL.—Paragraph (3) of section 1848(b)

13 (42 U.S.C. 1395w–4(b)) is amended to read as follows:

14 ‘‘(3) TREATMENT OF INTERPRETATION OF

15 ELECTROCARDIOGRAMS.—The Secretary—

16 ‘‘(A) shall make separate payment under

17 this section for the interpretation of electro18 cardiograms performed or ordered to be per19 formed as part of or in conjunction with a visit

20 to or a consultation with a physician, and

21 ‘‘(B) shall adjust the relative values estab22 lished for visits and consultations under sub23 section (c) so as not to include relative value

24 units for interpretations of electrocardiograms
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1 in the relative value for visits and consulta2 tions.’’.

3 (b) ASSURING BUDGET NEUTRALITY.—Section

4 1848(c)(2) (42 U.S.C. 1395w–4(c)(2)) is amended by add5 ing at the end the following new subparagraph:

6 ‘‘(E) BUDGET NEUTRALITY ADJUST7 MENTS.—The Secretary—

8 ‘‘(i) shall reduce the relative values

9 for all services (other than anesthesia serv10 ices) established under this paragraph

11 (and, in the case of anesthesia services, the

12 conversion factor established by the Sec13 retary for such services) by such percent14 age as the Secretary determines to be nec15 essary so that, beginning in 1996, the

16 amendment made by section 13441(a) of

17 the Omnibus Budget Reconciliation Act of

18 1993 would not result in expenditures

19 under this section that exceed the amount

20 of such expenditures that would have been

21 made if such amendment had not been

22 made, and

23 ‘‘(ii) shall reduce the amounts deter24 mined under subsection (a)(2)(B)(i)(I) by

25 such percentage as the Secretary deter-
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1 mines to be required to assure that, taking

2 into account the reductions made under

3 clause (i), the amendment made by section

4 13441(a) of the Omnibus Budget Rec5 onciliation Act of 1993 would not result in

6 expenditures under this section in 1993

7 that exceed the amount of such expendi8 tures that would have been made if such

9 amendment had not been made.’’.

10 (c) CONFORMING AMENDMENTS.—Section 1848 (42

11 U.S.C. 1395w–4) is amended—

12 (1) in subsection (a)(2)(B)(i)(I), by inserting

13 ‘‘and as adjusted under subsection (c)(2)(E)(ii)’’

14 after ‘‘for 1993’’;

15 (2) in subsection (c)(2)(A)(i), by adding at the

16 end the following: ‘‘Such relative values are subject

17 to adjustment under subparagraph (E)(i).’’; and

18 (3) in subsection (i)(1)(B), by adding at the

19 end ‘‘including adjustments under subsection

20 (c)(2)(E),’’.

21 (d) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to services furnished on or after

23 January 1, 1994.
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1 SEC. 13442. PAYMENTS FOR NEW PHYSICIANS AND PRACTI2 TIONERS.

3 (a) EQUAL TREATMENT OF NEW PHYSICIANS AND

4 PRACTITIONERS.—(1) Section 1848(a) (42 U.S.C.

5 1395w–4(a)) is amended by striking paragraph (4).

6 (2) Section 1842(b)(4) (42 U.S.C. 1395u(b)(4)) is

7 amended by striking subparagraph (F).

8 (b) BUDGET NEUTRALITY ADJUSTMENT.—Notwith9 standing any other provision of law, the Secretary of

10 Health and Human Services shall reduce the following val11 ues and amounts for 1993 (to be applied for that year

12 and subsequent years) by such uniform percentage as the

13 Secretary determines to be required to assure that the

14 amendments made by subsection (a) will not result in ex15 penditures under part B of title XVIII of the Social Secu16 rity Act in 1993 that exceed the amount of such expendi17 tures that would have been made if such amendments had

18 not been made:

19 (1) The relative values established under section

20 1848(c) of such Act for services (other than anesthe21 sia services) and, in the case of anesthesia services,

22 the conversion factor established under section 1848

23 of such Act for such services.

24 (2) The amounts determined under section

25 1848(a)(2)(B)(i)(I) of such Act.
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1 (3) The prevailing charges or fee schedule

2 amounts to be applied under such part for services

3 of a health care practitioner (as defined in section

4 1842(b)(4)(F)(ii)(I) of such Act, as in effect before

5 the date of the enactment of this Act).

6 (c) CONFORMING AMENDMENTS.—Section 1848 (42

7 U.S.C. 1395w–4), as amended by section 13441(c), is

8 amended—

9 (1) in subsection (a)(2)(B)(i)(I), by inserting

10 ‘‘and section 13442(b) of the Omnibus Budget Rec11 onciliation Act of 1993’’ after ‘‘(c)(2)(E)(ii)’’ after

12 ‘‘for 1993’’;

13 (2) in subsection (c)(2)(A)(i), by inserting ‘‘and

14 section 13442(b) of the Omnibus Budget Reconcili15 ation Act of 1993’’ after ‘‘under subparagraph

16 (E)(i)’’; and

17 (3) in subsection (i)(1)(B), by inserting ‘‘and

18 section 13442(b) of the Omnibus Budget Reconcili19 ation Act of 1993’’ after ‘‘under subsection

20 (c)(2)(E)’’.

21 (d) EFFECTIVE DATE.—The amendments made by

22 subsection (a) shall apply to services furnished on or after

23 January 1, 1994.
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1 SEC. 13443. RETAINING PAYMENT FOR ACTUAL ANESTHE2 SIA TIME.

3 (a) PHYSICIANS’ SERVICES.—Section 1848(b)(2)(B)

4 (42 U.S.C. 1395w–4(b)(2)(B)) is amended by adding at

5 the end the following: ‘‘The Secretary may not modify the

6 methodology in effect as of January 1, 1992, for determin7 ing the amount of time that may be billed for such services

8 under this section.’’.

9 (b) SERVICES OF CERTIFIED REGISTERED NURSE

10 ANESTHETISTS.—Section 1833(l)(1)(B) (42 U.S.C.

11 1395l(l)(1)(B)) is amended by adding at the end the fol12 lowing: ‘‘The Secretary may not modify the methodology

13 in effect as of January 1, 1992, for determining the

14 amount of time that may be billed for such services under

15 this section.’’.

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall take apply to services furnished on or

18 after the date of the enactment of this Act.

19 SEC. 13444. GEOGRAPHIC COST OF PRACTICE INDEX RE20 FINEMENTS.

21 (a) REQUIRING CONSULTATION WITH REPRESENTA22 TIVES OF PHYSICIANS IN REVIEWING GEOGRAPHIC AD23 JUSTMENT FACTORS.—Section 1848(e)(1)(C) (42 U.S.C.

24 1395w–4(e)(1)(C)) is amended by striking ‘‘shall review’’

25 and inserting ‘‘shall, in consultation with appropriate rep26 resentatives of physicians, review’’.
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1 (b) USE OF MOST RECENT DATA IN GEOGRAPHIC

2 ADJUSTMENT.—Section 1848(e)(1) (42 U.S.C. 1395w–

3 4(e)(1)) is amended by adding at the end the following

4 new subparagraph:

5 ‘‘(D) USE OF RECENT DATA.—In estab6 lishing indices and index values under this

7 paragraph, the Secretary shall use the most re8 cent data available relating to practice ex9 penses, malpractice expenses, and physician

10 work effort in different fee schedule areas.’’.

11 (c) DEADLINE FOR INITIAL REVIEW AND REVI12 SION.—The Secretary of Health and Human Services

13 shall first review and revise geographic adjustment factors

14 under section 1848(e)(1)(C) of the Social Security Act by

15 not later than January 1, 1995. Not later than April 1,

16 1994, the Secretary shall study and report to report to

17 the Committee on Finance of the Senate and the Commit18 tee on Ways and Means and the Committee on Energy

19 and Commerce of the House of Representatives on the

20 construction of the geographic cost of practice index under

21 section 1848(e)(1)(A)(i) of such Act.

22 (d) REPORT ON REVIEW PROCESS.—Not later than

23 1 year after the date of the enactment of this Act, the

24 Secretary of Health and Human Services shall study and

25 report to the Committee on Finance of the Senate and
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1 the Committee on Ways and Means and the Committee

2 on Energy and Commerce of the House of Representatives

3 on—

4 (1) the data necessary to review and revise the

5 indices established under section 1848(e)(1)(A) of

6 the Social Security Act, including—

7 (A) the shares allocated to physicians’

8 work effort, practice expenses (other than mal9 practice expenses), and malpractice expenses;

10 (B) the weights assigned to the input com11 ponents of such shares; and

12 (C) the index values assigned to such com13 ponents;

14 (2) any limitations on the availability of data

15 necessary to review and revise such indices at least

16 every three years;

17 (3) ways of addressing such limitations, with

18 particular attention to the development of alternative

19 data sources for input components for which current

20 index values are based on data collected less fre21 quently than every three years; and

22 (4) the costs of developing more accurate and

23 timely data.

24 (e) DEVELOPMENT OF CRITERIA FOR USE IN DE25 TERMINING PAYMENT LOCALITIES.—The Physician Pay-
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1 ment Review Commission shall conduct a study to develop

2 criteria that would be used to refine the fee schedule areas

3 that are used within States, in applying geographic adjust4 ment factors for computing payment amounts, under sec5 tion 1848 of the Social Security Act. The Commission

6 shall include a report on such study in its recommenda7 tions submitted to the Congress under section 1845(b) of

8 such Act in 1994.

9 SEC. 13445. EXTRA-BILLING.

10 (a) ENFORCEMENT AND UNIFORM APPLICATION.—

11 (1) ENFORCEMENT.—Paragraph (1) of section

12 1848(g) (42 U.S.C. 1395w–4(g)) is amended to read

13 as follows:

14 ‘‘(1) LIMITATION ON ACTUAL CHARGES.—

15 ‘‘(A) IN GENERAL.—In the case of a

16 nonparticipating physician or nonparticipating

17 supplier or other person (as defined in section

18 1842(i)(2)) who does not accept payment on an

19 assignment-related basis for a physician’s serv20 ice furnished with respect to an individual en21 rolled under this part, the following rules apply:

22 ‘‘(i) APPLICATION OF LIMITING

23 CHARGE.—No person may bill or collect an

24 actual charge for the service in excess of
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1 the limiting charge described in paragraph

2 (2) for such service.

3 ‘‘(ii) NO LIABILITY FOR EXCESS

4 CHARGES.—No person is liable for pay5 ment of any amounts billed for the service

6 in excess of such limiting charge.

7 ‘‘(iii) CORRECTION OF EXCESS

8 CHARGES.—If such a physician, supplier,

9 or other person bills, but does not collect,

10 an actual charge for a service in violation

11 of clause (i), the physician, supplier, or

12 other person shall reduce on a timely basis

13 the actual charge billed for the service to

14 an amount not to exceed the limiting

15 charge for the service.

16 ‘‘(iv) REFUND OF EXCESS COLLEC17 TIONS.—If such a physician, supplier, or

18 other person collects an actual charge for

19 a service in violation of clause (i), the phy20 sician, supplier, or other person shall pro21 vide on a timely basis a refund to the indi22 vidual charged in the amount by which the

23 amount collected exceeded the limiting

24 charge for the service. The amount of such

25 a refund shall be reduced to the extent the
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1 individual has an outstanding balance owed

2 by the individual to the physician.

3 ‘‘(B) SANCTIONS.—If a physician, supplier,

4 or other person—

5 ‘‘(i) knowingly and willfully bills or

6 collects for services in violation of subpara7 graph (A)(i) on a repeated basis, or

8 ‘‘(ii) fails to comply with clause (iii)

9 or (iv) of subparagraph (A) on a timely

10 basis,

11 the Secretary may apply sanctions against the

12 physician, supplier, or other person in accord13 ance with paragraph (2) of section 1842(j). In

14 applying this subparagraph, paragraph (4) of

15 such section applies in the same manner as

16 such paragraph applies to such section and any

17 reference in such section to a physician is

18 deemed also to include a reference to a supplier

19 or other person under this subparagraph.

20 ‘‘(C) TIMELY BASIS.—For purposes of this

21 paragraph, a correction of a bill for an excess

22 charge or refund of an amount with respect to

23 a violation of subparagraph (A)(i) in the case of

24 a service is considered to be provided ‘on a

25 timely basis’, if the reduction or refund is made
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1 not later than 30 days after the date the physi2 cian, supplier, or other person is notified by the

3 carrier under this part of such violation and of

4 the requirements of subparagraph (A).’’.

5 (2) UNIFORM APPLICATION OF EXTRA-BILLING

6 LIMITS TO PHYSICIANS’ SERVICES.—

7 (A) IN GENERAL.—Section 1848(g)(2)(C)

8 (42 U.S.C. 1395w–4(g)(2)(C)) is amended by

9 inserting ‘‘or for nonparticipating suppliers or

10 other persons’’ after ‘‘nonparticipating physi11 cians’’.

12 (B) CONFORMING DEFINITION.—Section

13 1842(i)(2) (42 U.S.C. 1395u(i)(2)) is

14 amended—

15 (i) by striking ‘‘, and the term’’ and

16 inserting ‘‘; the term’’, and

17 (ii) by inserting before the period at

18 the end the following: ‘‘; and the term

19 ‘nonparticipating supplier or other person’

20 means a supplier or other person (exclud21 ing a provider of services) that is not a

22 participating physician or supplier (as de23 fined in subsection (h)(1))’’.
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1 (b) PRE-PAYMENT SCREENING OF CLAIMS.—Sub2 paragraph (G) of section 1842(b)(3) (42 U.S.C.

3 1395u(b)(3)) is amended to read as follows:

4 ‘‘(G) will, for a service that is furnished with

5 respect to an individual enrolled under this part,

6 that is not paid on an assignment-related basis, and

7 that is subject to a limiting charge under section

8 1848(g)—

9 ‘‘(i) determine, prior to making payment,

10 whether the amount billed for such service ex11 ceeds the limiting charge applicable under sec12 tion 1848(g)(2);

13 ‘‘(ii) notify the physician, supplier, or other

14 person periodically (but not less often than once

15 every 30 days) of determinations that amounts

16 billed exceeded such applicable limiting charges;

17 and

18 ‘‘(iii) provide for prompt response to in19 quiries of physicians, suppliers, and other per20 sons concerning the accuracy of such limiting

21 charges for their services;’’.

22 (c) INFORMATION ON EXTRA-BILLING LIMITS.—

23 (1) PART OF EXPLANATION OF MEDICARE BEN24 EFITS.—Section 1842(h)(7) (42 U.S.C.

25 1395u(h)(7)) is amended—
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1 (A) by striking ‘‘and’’ at the end of sub2 paragraph (B),

3 (B) in subparagraph (C), by striking ‘‘shall

4 include’’ and by striking the period at the end

5 and inserting ‘‘, and’’, and

6 (C) by adding at the end the following new

7 subparagraph:

8 ‘‘(D) in the case of services for which the billed

9 amount exceeds the limiting charge imposed under

10 section 1848(g), information regarding such applica11 ble limiting charge (including information concern12 ing the right to a refund under section

13 1848(g)(1)(A)(iv)).’’.

14 (2) REPORT ON CHARGES IN EXCESS OF LIMIT15 ING CHARGE.—Section 1848(g)(6)(B) (42 U.S.C.

16 1395w–4(g)(6)(B)) is amended by inserting ‘‘the ex17 tent to which actual charges exceed limiting charges,

18 the number and types of services involved, and the

19 average amount of excess charges and’’ after ‘‘report

20 to the Congress’’.

21 (d) APPLYING THE LIMITING CHARGE TO

22 NONPHYSICIAN SERVICES PROVIDED UNDER THE PHYSI23 CIAN FEE SCHEDULE.—Section 1848 (42 U.S.C. 1395w–

24 4) is amended—
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1 (1) in subsection (a)(3), by inserting ‘‘AND SUP2 PLIERS’’ after ‘‘PHYSICIANS’’, and by inserting ‘‘or a

3 nonparticipating supplier or other person’’ after

4 ‘‘nonparticipating physician’’ and by adding at the

5 end the following: ‘‘In the case of physicians’ serv6 ices (including services which the Secretary excludes

7 pursuant to subsection (j)(3)) of a nonparticipating

8 physician, supplier, or other person for which pay9 ment is made under this part on a basis other than

10 the fee schedule amount, the payment shall be based

11 on 95 percent of the payment basis for such services

12 furnished by a participating physician, supplier, or

13 other person.’’;

14 (2) in subsection (g)(1)(A), as amended by sub15 section (a), in the matter before clause (i), by insert16 ing ‘‘(including services which the Secretary excludes

17 pursuant to subsection (j)(3))’’ after ‘‘a physician’s

18 service’’;

19 (3) in subsection (g)(2)(D), by inserting ‘‘(or, if

20 payment under this part is made on a basis other

21 than the fee schedule under this section, 95 percent

22 of the other payment basis)’’ after ‘‘subsection (a)’’;

23 (4) in subsection (g)(3)(B)—

24 (A) by inserting after the first sentence the

25 following: ‘‘ No person is liable for payment of
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1 any amounts billed for such a service in viola2 tion of the previous sentence.’’, and

3 (B) in the last sentence, by striking ‘‘pre4 vious sentence’’ and inserting ‘‘first sentence’’;

5 (5) in subsection (h)—

6 (A) by inserting ‘‘or nonparticipating sup7 plier or other person furnishing physicians’

8 services (as defined in section 1848(j)(3))’’

9 after ‘‘physician’’ the first place it appears,

10 (B) by inserting ‘‘, supplier, or other per11 son’’ after ‘‘physician’’ the second place it ap12 pears, and

13 (C) by inserting ‘‘, suppliers, and other

14 persons’’ after ‘‘physicians’’ the second place it

15 appears; and

16 (6) in subsection (j)(3), by inserting ‘‘, except

17 for purposes of subsections (a)(3), (g), and (h)’’

18 after ‘‘tests and’’.

19 (e) CLARIFICATION OF MANDATORY ASSIGNMENT

20 RULES FOR CERTAIN PRACTITIONERS.—

21 (1) IN GENERAL.—Section 1842(b) (42 U.S.C.

22 1395u(b)), as amended by section 13449(e), is

23 amended by adding at the end the following new

24 paragraph:
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1 ‘‘(18)(A) Payment for any service furnished by a

2 practitioner described in subparagraph (C) and for which

3 payment may be made under this part on a reasonable

4 charge or fee schedule basis may only be made under this

5 part on an assignment-related basis.

6 ‘‘(B) A practitioner described in subparagraph (C) or

7 other person may not bill (or collect any amount from)

8 the individual or another person for any service described

9 in subparagraph (A), except for deductible and coinsur10 ance amounts applicable under this part. No person is lia11 ble for payment of any amounts billed for such a service

12 in violation of the previous sentence. If a practitioner or

13 other person knowingly and willfully bills (or collects an

14 amount) for such a service in violation of such sentence,

15 the Secretary may apply sanctions against the practitioner

16 or other person in the same manner as the Secretary may

17 apply sanctions against a physician in accordance with

18 section 1842(j)(2) in the same manner as such section ap19 plies with respect to a physician. Paragraph (4) of section

20 1842(j) shall apply in this subparagraph in the same man21 ner as such paragraph applies to such section.

22 ‘‘(C) A practitioner described in this subparagraph

23 is any of the following:
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1 ‘‘(i) A physician assistant, nurse practitioner, or

2 clinical nurse specialist (as defined in section

3 1861(aa)(5)).

4 ‘‘(ii) A certified registered nurse anesthetist (as

5 defined in section 1861(bb)(2)).

6 ‘‘(iii) A certified nurse-midwife (as defined in

7 section 1861(gg)(2)).

8 ‘‘(iv) A clinical social worker (as defined in sec9 tion 1861(hh)(1)).

10 ‘‘(v) A clinical psychologist (as defined by the

11 Secretary for purposes of section 1861(ii)).

12 ‘‘(D) For purposes of this paragraph, a service fur13 nished by a practitioner described in subparagraph (C) in14 cludes any services and supplies furnished as incident to

15 the service as would otherwise be covered under this part

16 if furnished by a physician or as incident to a physician’s

17 service.’’.

18 (2) CONFORMING AMENDMENTS.—

19 (A) Section 1833 (42 U.S.C. 1395l) is

20 amended—

21 (i) in subsection (l)(5), by striking

22 subparagraph (B) and redesignating sub23 paragraph (C) as subparagraph (B);

24 (ii) by striking subsection (p); and
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1 (iii) in subsection (r), by striking

2 paragraph (3) and redesignating para3 graph (4) as paragraph (3).

4 (B) Section 1842(b)(12) (42 U.S.C.

5 1395u(b)(12)) is amended by striking subpara6 graph (C).

7 (f) MISCELLANEOUS AND TECHNICAL AMEND8 MENTS.—Section 1833 (42 U.S.C. 1395l) is amended—

9 (1) in subsection (a)(1), as amended by section

10 13479(e)(2)—

11 (A) by striking ‘‘and’’ before ‘‘(O)’’, and

12 (B) by inserting before the semicolon at

13 the end the following: ‘‘, and (P) with respect

14 to services described in clauses (i), (ii) and (iv)

15 of section 1861(s)(2)(K), the amounts paid are

16 subject to the provisions of section

17 1842(b)(12)’’; and

18 (2) in subsection (h)(5)(D)—

19 (A) by striking ‘‘paragraphs (2) and (3)’’

20 and by inserting ‘‘paragraph (2)’’, and

21 (B) by adding at the end the following:

22 ‘‘Paragraph (4) of such section shall apply in

23 this subparagraph in the same manner as such

24 paragraph applies to such section.’’.

25 (g) EFFECTIVE DATES.—
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1 (1) ENFORCEMENT AND UNIFORM APPLICA2 TION; MISCELLANEOUS AND TECHNICAL AMEND3 MENTS.—The amendments made by subsections (a),

4 (d), and (f) shall apply to services furnished on or

5 after the date of the enactment of this Act; except

6 that such amendments made by subsections (a) and

7 (d) shall not apply to services of a nonparticipating

8 supplier or other person furnished before January 1,

9 1994.

10 (2) CARRIER DETERMINATIONS.—The amend11 ments made by subsection (b) shall apply to con12 tracts as of January 1, 1994.

13 (3) EOMBS.—The amendments made by sub14 section (c)(1) shall apply to explanations of benefits

15 provided on or after January 1, 1994.

16 (4) REPORT.—The amendment made by sub17 section (c)(2) shall apply to reports for years begin18 ning with 1994.

19 (5) PRACTITIONERS.—The amendments made

20 by subsection (e) shall apply to services furnished on

21 or after January 1, 1994.

22 SEC. 13446. RELATIVE VALUES FOR PEDIATRIC SERVICES.

23 (a) IN GENERAL.—The Secretary of Health and

24 Human Services shall fully develop, by not later than July

25 1, 1994, relative values for the full range of pediatric phy-
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1 sicians’ services which are consistent with the relative val2 ues developed for other physicians’ services under section

3 1848(c) of the Social Security Act. In developing such val4 ues, the Secretary shall conduct such refinements as may

5 be necessary to produce appropriate estimates for such rel6 ative values.

7 (b) STUDY.—

8 (1) IN GENERAL.—The Secretary shall conduct

9 a study of the relative values for pediatric and other

10 services to determine whether there are significant

11 variations in the resources used in providing similar

12 services to different populations. In conducting such

13 study, the Secretary shall consult with appropriate

14 organizations representing pediatricians and other

15 physicians.

16 (2) REPORT.—Not later than July 1, 1994, the

17 Secretary shall submit to Congress a report on the

18 study conducted under paragraph (1). Such report

19 shall include any appropriate recommendations re20 garding needed changes in coding or other payment

21 policies to ensure that payments for pediatric serv22 ices appropriately reflect the resources required to

23 provide these services.
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1 SEC. 13447. ANTIGENS UNDER PHYSICIAN FEE SCHEDULE.

2 (a) IN GENERAL.—Section 1848(j)(3) (42 U.S.C.

3 1395w–4(j)(3)) is amended by inserting ‘‘(2)(G),’’ after

4 ‘‘(2)(D),’’.

5 (b) EFFECTIVE DATE.—The amendment made by

6 subsection (a) shall apply to services furnished on or after

7 January 1, 1995.

8 SEC. 13448. ADMINISTRATION OF CLAIMS RELATING TO

9 PHYSICIANS’ SERVICES.

10 (a) LIMITATION ON CARRIER USER FEES.—Section

11 1842(c) (42 U.S.C. 1395u(c)) is amended by adding at

12 the end the following new paragraph:

13 ‘‘(4) Neither a carrier nor the Secretary may impose

14 a fee under this title—

15 ‘‘(A) for the filing of claims related to physi16 cians’ services,

17 ‘‘(B) for an error in filing a claim relating to

18 physicians’ services or for such a claim which is

19 denied,

20 ‘‘(C) for any appeal under this title with respect

21 to physicians’ services,

22 ‘‘(D) for applying for (or obtaining) a unique

23 identifier under subsection (r), or

24 ‘‘(E) for responding to inquiries respecting phy25 sicians’ services or for providing information with re26 spect to medical review of such services.’’.
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1 (b) CLARIFICATION OF PERMISSIBLE SUBSTITUTE

2 BILLING ARRANGEMENTS.—

3 (1) IN GENERAL.—Clause (D) of section

4 1842(b)(6) (42 U.S.C. 1395u(b)(6)), as amended by

5 section 13449(f), is amended to read as follows:

6 ‘‘(D) payment may be made to a physician for physi7 cians’ services (and services furnished incident to

8 such services) furnished by a second physician to pa9 tients of the first physician if (i) the first physician

10 is unavailable to provide the services; (ii) the services

11 are furnished pursuant to an arrangement between

12 the two physicians that (I) is informal and recip13 rocal, or (II) involves per diem or other fee-for-time

14 compensation for such services; (iii) the services are

15 not provided by the second physician over a continu16 ous period of more than 60 days; and (iv) the claim

17 form submitted to the carrier for such services in18 cludes the second physician’s unique identifier (pro19 vided under the system established under subsection

20 (r)) and indicates that the claim meets the require21 ments of this clause for payment to the first physi22 cian’’.

23 (2) EFFECTIVE DATE.—The amendment made

24 by paragraph (1) shall apply to services furnished on

25 or after the first day of the first month beginning
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1 more than 60 days after the date of the enactment

2 of this Act.

3 SEC. 13449. MISCELLANEOUS AND TECHNICAL CORREC4 TIONS.

5 (a) OVERVALUED PROCEDURES (SECTION 4101 OF

6 OBRA–1990).—(1) Section 1842(b)(16)(B)(iii) (42

7 U.S.C. 1395u(b)(16)(B)(iii)) is amended—

8 (A) by striking ‘‘, simple and subcutaneous’’,

9 (B) by striking ‘‘; small’’ and inserting ‘‘and

10 small’’,

11 (C) by striking ‘‘treatments;’’ the first place it

12 appears and inserting ‘‘and’’,

13 (D) by striking ‘‘lobectomy;’’,

14 (E) by striking ‘‘enterectomy; colectomy; chole15 cystectomy;’’,

16 (F) by striking ‘‘; transurerethral resection’’

17 and inserting ‘‘and resection’’, and

18 (G) by striking ‘‘sacral laminectomy;’’.

19 (2) Section 4101(b)(2) of OBRA–1990 is amended—

20 (A) in the matter before subparagraph (A), by

21 striking ‘‘1842(b)(16)’’ and inserting

22 ‘‘1842(b)(16)(B)’’, and

23 (B) in subparagraph (B)—

24 (i) by striking ‘‘, simple and subcutane25 ous’’,
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1 (ii) by striking ‘‘(HCPCS codes 19160 and

2 19162)’’ and inserting ‘‘(HCPCS code 19160)’’,

3 and

4 (iii) by striking all that follows ‘‘(HCPCS

5 codes 92250’’ and inserting ‘‘and 92260).’’.

6 (b) RADIOLOGY SERVICES (SECTION 4102 OF

7 OBRA–1990).—(1) Section 1834(b)(4) (42 U.S.C.

8 1395m(b)(4)) is amended by redesignating subparagraphs

9 (E) and (F) as subparagraphs (F) and (G), respectively.

10 (2) Section 1834(b)(4)(D) (42 U.S.C.

11 1395m(b)(4)(D)) is amended—

12 (A) in the matter before clause (i), by striking

13 ‘‘shall be determined as follows:’’ and inserting

14 ‘‘shall, subject to clause (vii), be reduced to the ad15 justed conversion factor for the locality determined

16 as follows:’’,

17 (B) in clause (iv), by striking ‘‘LOCAL ADJUST18 MENT.—Subject to clause (vii), the conversion factor

19 to be applied to’’ and inserting ‘‘ADJUSTED CONVER20 SION FACTOR.—The adjusted conversion factor for’’,

21 (C) in clause (vii), by striking ‘‘under this sub22 paragraph’’, and

23 (D) in clause (vii), by inserting ‘‘reduced under

24 this subparagraph by’’ after ‘‘shall not be’’.
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1 (3) Section 4102(c)(2) of OBRA–1990 is amended

2 by striking ‘‘radiology services’’ and all that follows and

3 inserting ‘‘nuclear medicine services.’’.

4 (4) Section 4102(d) of OBRA–1990 is amended by

5 striking ‘‘new paragraph’’ and inserting ‘‘new subpara6 graph’’.

7 (5) Section 1834(b)(4)(E) (42 U.S.C.

8 1395m(b)(4)(E)) is amended by inserting ‘‘RULE FOR

9 CERTAIN SCANNING SERVICES.—’’ after ‘‘(E)’’.

10 (6) Section 1848(a)(2)(D)(iii) (42 U.S.C. 1395w–

11 4(a)(2)(D)(iii)) is amended by striking ‘‘that are subject

12 to section 6105(b) of the Omnibus Budget Reconciliation

13 Act of 1989’’ and by striking ‘‘provided under such sec14 tion’’ and inserting ‘‘provided under section 6105(b) of the

15 Omnibus Budget Reconciliation Act of 1989’’.

16 (c) ANESTHESIA SERVICES (SECTION 4103 OF

17 OBRA–1990).—(1) Section 4103(a) of OBRA–1990 is

18 amended by striking ‘‘REDUCTION IN FEE SCHEDULE’’

19 and inserting ‘‘REDUCTION IN PREVAILING CHARGES’’.

20 (2) Section 1842(q)(1)(B) (42 U.S.C.

21 1395u(q)(1)(B)) is amended—

22 (A) in the matter before clause (i), by striking

23 ‘‘shall be determined as follows:’’ and inserting

24 ‘‘shall, subject to clause (iv), be reduced to the ad-
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1 justed prevailing charge conversion factor for the lo2 cality determined as follows:’’, and

3 (B) in clause (iii), by striking ‘‘Subject to

4 clause (iv), the prevailing charge conversion factor to

5 be applied in’’ and inserting ‘‘The adjusted prevail6 ing charge conversion factor for’’.

7 (d) ASSISTANTS AT SURGERY (SECTION 4107 OF

8 OBRA–1990).—(1) Section 4107(c) of OBRA–1990 is

9 amended by inserting ‘‘(a)(1)’’ after ‘‘subsection’’.

10 (2) Section 4107(a)(2) of OBRA–1990 is amended

11 by adding at the end the following: ‘‘In applying section

12 1848(g)(2)(D) of the Social Security Act for services of

13 an assistant-at-surgery furnished during 1991, the recog14 nized payment amount shall not exceed the maximum

15 amount specified under section 1848(i)(2)(A) of such Act

16 (as applied under this paragraph in such year).’’.

17 (e) TECHNICAL COMPONENTS OF DIAGNOSTIC SERV18 ICES (SECTION 4108 OF OBRA–1990).—Section 1842(b)

19 (42 U.S.C. 1395u(b)) is amended by redesignating para20 graph (18), as added by section 4108(a) of OBRA–1990,

21 as paragraph (17) and, in such paragraph, by inserting

22 ‘‘, tests specified in paragraph (14)(C)(i),’’ after ‘‘diag23 nostic laboratory tests’’.
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1 (f) RECIPROCAL BILLING ARRANGEMENTS (SECTION

2 4110 OF OBRA–1990).—Section 1842(b)(6)(D) (42

3 U.S.C. 1395u(b)(6)(D)) is amended—

4 (1) by striking ‘‘visit services (including emer5 gency visits and related services)’’ and inserting

6 ‘‘physicians’ services (and services furnished incident

7 to such services)’’;

8 (2) by striking ‘‘on an occasional, reciprocal

9 basis’’ and inserting ‘‘under an arrangement that is

10 informal and reciprocal or involves per diem or other

11 fee-for-time compensation for services’’;

12 (3) by striking ‘‘visit’’ in subclauses (i), (ii),

13 and (iv); and

14 (4) in subclause (iii), by striking ‘‘the claim’’

15 and all that follows through the comma at the end

16 and inserting ‘‘the claim meets the requirements of

17 this clause for payment to the first physician’’.

18 (g) STUDY OF AGGREGATION RULE FOR CLAIMS OF

19 SIMILAR PHYSICIAN SERVICES (SECTION 4113 OF

20 OBRA–1990).—Section 4113 of OBRA–1990 is

21 amended—

22 (1) by inserting ‘‘of the Social Security Act’’

23 after ‘‘1869(b)(2)’’; and

24 (2) by striking ‘‘December 31, 1992’’ and in25 serting ‘‘December 31, 1993’’.
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1 (h) STATEWIDE FEE SCHEDULES (SECTION 4117 OF

2 OBRA–1990).—Section 4117 of OBRA–1990 is

3 amended—

4 (1) in subsection (a)—

5 (A) by striking ‘‘IN GENERAL.—’’, and

6 (B) by striking ‘‘, if the’’ and all that fol7 lows through ‘‘1991, ’’; and

8 (2) by striking subsections (b), (c), and (d).

9 (i) OTHER MISCELLANEOUS AND TECHNICAL

10 AMENDMENTS.—(1) The heading of section 1834(f) (42

11 U.S.C. 1395m(f)) is amended by striking ‘‘FISCAL YEAR’’.

12 (2)(A) Section 4105(b) of OBRA–1990 is amended—

13 (i) in paragraph (2), by striking ‘‘amendments’’

14 and inserting ‘‘amendment’’, and

15 (ii) in paragraph (3), by striking ‘‘amendments

16 made by paragraphs (1) and (2)’’ and inserting

17 ‘‘amendment made by paragraph (1)’’.

18 (B) Section 1848(f)(2)(C) (42 U.S.C. 1395w–

19 4(f)(2)(C)) is amended by inserting ‘‘PERFORMANCE

20 STANDARD RATES OF INCREASE FOR FISCAL YEAR

21 1991.—’’ after ‘‘(C)’’.

22 (C) Section 4105(d) of OBRA–1990 is amended by

23 inserting ‘‘PUBLICATION OF PERFORMANCE STANDARD

24 RATES.—’’ after ‘‘(d)’’.
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1 (3) Section 1842(b)(4)(F) (42 U.S.C.

2 1395u(b)(4)(F)) is amended—

3 (A) in clause (i), by striking ‘‘prevailing

4 charge’’ the first place it appears and inserting

5 ‘‘customary charge’’; and

6 (B) in clause (ii)(III), by striking ‘‘second,

7 third, and fourth’’ and inserting ‘‘first, second, and

8 third’’.

9 (4) Section 1842(b)(4)(F)(ii)(I) (42 U.S.C.

10 1395u(b)(4)(F)(ii)(I)) is amended by striking ‘‘respiratory

11 therapist,’’.

12 (5) Section 4106(c) of OBRA–1990 is amended by

13 inserting ‘‘of the Social Security Act’’ after

14 ‘‘1848(d)(1)(B)’’.

15 (6) Section 4114 of OBRA–1990 is amended by

16 striking ‘‘patients’’ the second place it appears.

17 (7) Section 1848(e)(1)(C) (42 U.S.C. 1395w–

18 4(e)(1)(C)) is amended by inserting ‘‘date of the’’ after

19 ‘‘since the’’.

20 (8) Section 4118(f)(1)(D) of OBRA–1990 is amend21 ed by striking ‘‘is amended’’.

22 (9) Section 4118(f)(1)(N)(ii) of OBRA–1990 is

23 amended by striking ‘‘subsection (f)(5)(A)’’ and inserting

24 ‘‘subsection (f)(5)(A))’’.
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1 (10) Section 1845(e) (42 U.S.C. 1395w–1(e)) is

2 amended—

3 (A) by striking paragraph (2); and

4 (B) by redesignating paragraphs (3), (4), and

5 (5) as paragraphs (2), (3), and (4).

6 (11) Section 4118(j)(2) of OBRA–1990 is amended

7 by striking ‘‘In section’’ and inserting ‘‘Section’’.

8 (12)(A) Section 1848(i)(3) (42 U.S.C. 1395w–

9 4(i)(3)) is amended by striking the space before the period

10 at the end.

11 (B) Section 1834(a)(10)(B) (42 U.S.C.

12 1395m(a)(10)(B)) is amended—

13 (i) by striking ‘‘apply to’’ and inserting ‘‘would

14 otherwise apply to’’, and

15 (ii) by inserting before the period at the end

16 ‘‘but for the application of section 1848(i)(3)’’.

17 (j) EFFECTIVE DATE.—The amendments made by

18 this section and the provisions of this section shall take

19 effect as if included in the enactment of OBRA–1990.

20 Subchapter C—Ambulatory Surgical Center

21 Services

22 SEC. 13451. DESIGNATION OF CERTAIN HOSPITALS AS EYE

23 OR EYE AND EAR HOSPITALS.

24 (a) IN GENERAL.—Section 1833(i) (42 U.S.C.

25 1395l(i)) is amended—
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1 (1) in subparagraph (B)(ii)—

2 (A) by striking ‘‘the last sentence of this

3 clause’’ and inserting ‘‘paragraph (4)’’, and

4 (B) by striking the last sentence; and

5 (2) by inserting after paragraph (3) the follow6 ing new paragraph:

7 ‘‘(4)(A) In the case of a hospital that—

8 ‘‘(i) makes application to the Secretary and

9 demonstrates that it specializes in eye services or eye

10 and ear services (as determined by the Secretary),

11 ‘‘(ii) receives more than 30 percent of its total

12 revenues from outpatient services, and

13 ‘‘(iii) on October 1, 1987—

14 ‘‘(I) was an eye specialty hospital or an eye

15 and ear specialty hospital, or

16 ‘‘(II) was operated as an eye or eye and

17 ear unit (as defined in subparagraph (B)) of a

18 general acute care hospital which, on the date

19 of the application described in clause (i), oper20 ates less than 20 percent of the beds that the

21 hospital operated on October 1, 1987, and has

22 sold or otherwise disposed of a substantial por23 tion of the hospital’s other acute care oper24 ations,
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1 the cost proportion and ASC proportion in effect under

2 subclauses (I) and (II) of paragraph (2)(B)(ii) for cost

3 reporting periods beginning in fiscal year 1988 shall re4 main in effect for cost reporting periods beginning on or

5 after October 1, 1988, and before January 1, 1995.

6 ‘‘(B) For purposes of this subparagraph (A)(iii)(II),

7 the term ‘eye or eye and ear unit’ means a physically sepa8 rate or distinct unit containing separate surgical suites de9 voted solely to eye or eye and ear services.’’.

10 (b) EFFECTIVE DATE.—The amendments made by

11 subsection (a) shall apply to portions of cost reporting

12 periods beginning on or after January 1, 1994.

13 SEC. 13452. TREATMENT OF INTRAOCULAR LENSES.

14 (a) EXTENSION OF CAP ON PAYMENTS THROUGH

15 1994.—

16 (1) IN GENERAL.—Section 4151(c)(3) of

17 OBRA–1990 is amended by striking ‘‘December 31,

18 1992’’ and inserting ‘‘December 31, 1994’’.

19 (2) EFFECTIVE DATE.—The amendment made

20 by paragraph (1) this subsection shall be effective as

21 if included in the enactment of OBRA–1990.

22 (b) STUDY OF COSTS OF INTRAOCULAR LENSES.—

23 (1) STUDY.—The Secretary of Health and

24 Human Services shall conduct a study, based on re25 cent data, of the acquisition costs to providers of
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1 intraocular lenses provided to individuals enrolled

2 under part B of the medicare program and shall in3 clude in the study an analysis of the impact of the

4 availability of new technology lenses on such costs.

5 (2) REPORT.—Not later than 1 year after the

6 date of the enactment of this Act, the Secretary

7 shall submit a report on the study conducted under

8 paragraph (1) to the Committee on Finance of the

9 Senate and the Committees on Ways and Means and

10 Energy and Commerce of the House of Representa11 tives, and shall include in the report any rec12 ommendations the Secretary considers appropriate

13 regarding the determination of payment amounts for

14 intraocular lenses under part B of the medicare

15 program.

16 SEC. 13453. TECHNICAL AMENDMENTS.

17 (a) PAYMENT AMOUNTS FOR SERVICES FURNISHED

18 IN AMBULATORY SURGICAL CENTERS.—

19 (1) USE OF SURVEY TO DETERMINE INCURRED

20 COSTS.—Section 1833(i)(2)(A)(i) (42 U.S.C.

21 1395l(i)(2)(A)(i)) is amended by striking the comma

22 at the end and inserting the following: ‘‘, as deter23 mined in accordance with a survey (based upon a

24 representative sample of procedures and facilities)

25 taken not later than January 1, 1994, and every 5
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1 years thereafter, of the actual audited costs incurred

2 by such centers in providing such services,’’.

3 (2) AUTOMATIC APPLICATION OF INFLATION

4 ADJUSTMENT.—Section 1833(i)(2) (42 U.S.C.

5 1395l(i)(2)) is amended—

6 (A) in the second sentence of subpara7 graph (A) and the second sentence of subpara8 graph (B), by striking ‘‘and may be adjusted by

9 the Secretary, when appropriate,’’; and

10 (B) by adding at the end the following new

11 subparagraph:

12 ‘‘(C) Notwithstanding the second sentence of sub13 paragraph (A) or the second sentence of subparagraph

14 (B), if the Secretary has not updated amounts established

15 under such subparagraphs with respect to facility services

16 furnished during a fiscal year (beginning with fiscal year

17 1995), such amounts shall be increased by the percentage

18 increase in the consumer price index for all urban consum19 ers (U.S. city average) for the 12-month period ending

20 with March of the preceding fiscal year.’’.

21 (3) CONSULTATION REQUIREMENT.—The sec22 ond sentence of section 1833(i)(1) (42 U.S.C.

23 1395l(i)(1)) is amended by striking the period and

24 inserting the following: ‘‘, in consultation with ap25 propriate trade and professional organizations.’’.
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1 (b) ADJUSTMENTS TO PAYMENT AMOUNTS FOR NEW

2 TECHNOLOGY INTRAOCULAR LENSES.—

3 (1) ESTABLISHMENT OF PROCESS FOR REVIEW

4 OF AMOUNTS.—Not later than 1 year after the date

5 of the enactment of this Act, the Secretary of

6 Health and Human Services (in this subsection re7 ferred to as the ‘‘Secretary’’) shall develop and im8 plement a process under which interested parties

9 may request review by the Secretary of the appro10 priateness of the reimbursement amount provided

11 under section 1833(i)(2)(A)(iii) of the Social Secu12 rity Act with respect to a class of new technology

13 intraocular lenses. For purposes of the preceding

14 sentence, an intraocular lens may not be treated as

15 a new technology lens unless it has been approved

16 by the Food and Drug Administration.

17 (2) FACTORS CONSIDERED.—In determining

18 whether to provide an adjustment of payment with

19 respect to a particular lens under paragraph (1), the

20 Secretary shall take into account whether use of the

21 lens is likely to result in reduced risk of

22 intraoperative or postoperative complication or trau23 ma, accelerated postoperative recovery, reduced in24 duced astigmatism, improved postoperative visual
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1 acuity, more stable postoperative vision, or other

2 comparable clinical advantages.

3 (3) NOTICE AND COMMENT.—The Secretary

4 shall publish notice in the Federal Register from

5 time to time (but no less often than once each year)

6 of a list of the requests that the Secretary has re7 ceived for review under this subsection, and shall

8 provide for a 30-day comment period on the lenses

9 that are the subjects of the requests contained in

10 such notice. The Secretary shall publish a notice of

11 his determinations with respect to intraocular lenses

12 listed in the notice within 90 days after the close of

13 the comment period.

14 (4) EFFECTIVE DATE OF ADJUSTMENT.—Any

15 adjustment of a payment amount (or payment limit)

16 made under this subsection shall become effective

17 not later than 30 days after the date on which the

18 notice with respect to the adjustment is published

19 under paragraph (3).

20 (c) TECHNICAL CORRECTION RELATING TO BLEND

21 AMOUNTS FOR AMBULATORY SURGICAL CENTER PAY22 MENTS.—

23 (1) IN GENERAL.—Subclauses (I) and (II) of

24 section 1833(i)(3)(B)(ii) (42 U.S.C.

25 1395l(i)(3)(B)(ii)) are each amended—
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1 (A) by striking ‘‘for reporting’’ and insert2 ing ‘‘for portions of cost reporting’’; and

3 (B) by striking ‘‘and on or before’’ and in4 serting ‘‘and ending on or before’’.

5 (2) EFFECTIVE DATE.—The amendments made

6 by paragraph (1) shall take effect as if included in

7 the enactment of OBRA–1990.

8 (d) TECHNICAL CORRECTION RELATED TO CATA9 RACT SURGERY.—Effective as if included in the enact10 ment of OBRA–1990, section 4151(c)(3) of such Act is

11 amended by striking ‘‘for the insertion of an intraocular

12 lens’’ and inserting ‘‘for an intraocular lens inserted’’.

13 Subchapter D—Durable Medical Equipment

14 SEC. 13461. CERTIFICATION OF SUPPLIERS.

15 (a) REQUIREMENTS.—

16 (1) IN GENERAL.—Section 1834 (42 U.S.C.

17 1395m) is amended by adding at the end the follow18 ing new subsection:

19 ‘‘(i) REQUIREMENTS FOR SUPPLIERS OF MEDICAL

20 EQUIPMENT AND SUPPLIES.—

21 ‘‘(1) ISSUANCE AND RENEWAL OF SUPPLIER

22 NUMBER.—

23 ‘‘(A) PAYMENT.—Except as provided in

24 subparagraph (C), no payment may be made

25 under this part after October 1, 1993, for items
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1 furnished by a supplier of medical equipment

2 and supplies unless such supplier obtains (and

3 renews at such intervals as the Secretary may

4 require) a supplier number.

5 ‘‘(B) STANDARDS FOR POSSESSING A SUP6 PLIER NUMBER.—A supplier may not obtain a

7 supplier number unless—

8 ‘‘(i) for medical equipment and sup9 plies furnished on or after October 1,

10 1993, and on or before December 31,

11 1994, the supplier meets standards pre12 scribed by the Secretary; and

13 ‘‘(ii) for medical equipment and sup14 plies furnished on or after January 1,

15 1995, the supplier meets revised standards

16 prescribed by the Secretary (in consulta17 tion with representatives of suppliers of

18 medical equipment and supplies, carriers,

19 and consumers) that shall include require20 ments that the supplier—

21 ‘‘(I) comply with all applicable

22 State and Federal licensure and regu23 latory requirements;

24 ‘‘(II) maintain a physical facility

25 on an appropriate site;
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1 ‘‘(III) have proof of appropriate

2 liability insurance; and

3 ‘‘(IV) meet such other require4 ments as the Secretary may specify.

5 ‘‘(C) EXCEPTION FOR ITEMS FURNISHED

6 AS INCIDENT TO A PHYSICIAN’S SERVICE.—

7 Subparagraph (A) shall not apply with respect

8 to medical equipment and supplies furnished as

9 an incident to a physician’s service.

10 ‘‘(D) PROHIBITION AGAINST MULTIPLE

11 SUPPLIER NUMBERS.—The Secretary may not

12 issue more than one supplier number to any

13 supplier of medical equipment and supplies un14 less the issuance of more than one number is

15 appropriate to identify subsidiary or regional

16 entities under the supplier’s ownership or con17 trol.

18 ‘‘(E) PROHIBITION AGAINST DELEGATION

19 OF SUPPLIER DETERMINATIONS.—The Sec20 retary may not delegate (other than by contract

21 under section 1842) the responsibility to deter22 mine whether suppliers meet the standards nec23 essary to obtain a supplier number.

24 ‘‘(2) CERTIFICATES OF MEDICAL NECESSITY.—
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1 ‘‘(A) STANDARDIZED CERTIFICATES.—Not

2 later than October 1, 1993, the Secretary shall,

3 in consultation with carriers under this part,

4 develop one or more standardized certificates of

5 medical necessity (as defined in subparagraph

6 (C)) for medical equipment and supplies for

7 which the Secretary determines that such a cer8 tificate is necessary.

9 ‘‘(B) PROHIBITION AGAINST DISTRIBUTION

10 BY SUPPLIERS OF CERTIFICATES OF MEDICAL

11 NECESSITY.—

12 ‘‘(i) IN GENERAL.—Except as pro13 vided in clause (ii), a supplier of medical

14 equipment and supplies may not distribute

15 to physicians or to individuals entitled to

16 benefits under this part for commercial

17 purposes any completed or partially com18 pleted certificates of medical necessity on

19 or after October 1, 1993.

20 ‘‘(ii) EXCEPTION FOR CERTAIN BILL21 ING INFORMATION.—Clause (i) shall not

22 apply with respect to a certificate of medi23 cal necessity for any item that is not con24 tained on the list of potentially overused

25 items developed by the Secretary under
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1 subsection (a)(15)(A) to the extent that

2 such certificate contains only information

3 completed by the supplier of medical equip4 ment and supplies identifying such supplier

5 and the beneficiary to whom such medical

6 equipment and supplies are furnished, a

7 description of such medical equipment and

8 supplies, any product code identifying such

9 medical equipment and supplies, and any

10 other administrative information (other

11 than information relating to the bene12 ficiary’s medical condition) identified by

13 the Secretary. In the event a supplier pro14 vides a certificate of medical necessity con15 taining information permitted under this

16 clause, such certificate shall also contain

17 the fee schedule amount and the supplier’s

18 charge for the medical equipment or sup19 plies being furnished prior to distribution

20 of such certificate to the physician.

21 ‘‘(iii) PENALTY.—Any supplier of

22 medical equipment and supplies who know23 ingly and willfully distributes a certificate

24 of medical necessity in violation of clause

25 (i) is subject to a civil money penalty in an
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1 amount not to exceed $1,000 for each such

2 certificate of medical necessity so distrib3 uted. The provisions of section 1128A

4 (other than subsections (a) and (b)) shall

5 apply to civil money penalties under this

6 subparagraph in the same manner as they

7 apply to a penalty or proceeding under sec8 tion 1128A(a).

9 ‘‘(C) DEFINITION.—For purposes of this

10 paragraph, the term ‘certificate of medical ne11 cessity’ means a form or other document con12 taining information required by the Secretary to

13 be submitted to show that a covered item is

14 reasonable and necessary for the diagnosis or

15 treatment of illness or injury or to improve the

16 functioning of a malformed body member.

17 ‘‘(3) COVERAGE AND REVIEW CRITERIA.—

18 ‘‘(A) DEVELOPMENT AND ESTABLISH19 MENT.—Not later than January 1, 1995, the

20 Secretary, in consultation with representatives

21 of suppliers of medical equipment and supplies,

22 individuals enrolled under this part, and appro23 priate medical specialty societies, shall develop

24 and establish uniform national coverage and

25 utilization review criteria for 200 items of medi-
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1 cal equipment and supplies selected in accord2 ance with the standards described in subpara3 graph (B). The Secretary shall publish the cri4 teria as part of the instructions provided to fis5 cal intermediaries and carriers under this part

6 and no further publication, including publica7 tion in the Federal Register, shall be required.

8 ‘‘(B) STANDARDS FOR SELECTING ITEMS

9 SUBJECT TO CRITERIA.—The Secretary may se10 lect an item for coverage under the criteria de11 veloped and established under subparagraph

12 (A) if the Secretary finds that—

13 ‘‘(i) the item is frequently purchased

14 or rented by beneficiaries;

15 ‘‘(ii) the item is frequently subject to

16 a determination that such item is not

17 medically necessary; or

18 ‘‘(iii) the coverage or utilization cri19 teria applied to the item (as of the date of

20 the enactment of this subsection) is not

21 consistent among carriers.

22 ‘‘(C) ANNUAL REVIEW AND EXPANSION OF

23 ITEMS SUBJECT TO CRITERIA.—The Secretary

24 shall annually review the coverage and utiliza25 tion of items of medical equipment and supplies
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1 to determine whether items not included among

2 the items selected under subparagraph (A)

3 should be made subject to uniform national cov4 erage and utilization review criteria, and, if ap5 propriate, shall develop and apply such criteria

6 to such additional items.

7 ‘‘(4) DEFINITION.—The term ‘medical equip8 ment and supplies’’ means—

9 ‘‘(A) durable medical equipment (as de10 fined in section 1861(n));

11 ‘‘(B) prosthetic devices (as described in

12 section 1861(s)(8));

13 ‘‘(C) orthotics and prosthetics (as de14 scribed in section 1861(s)(9));

15 ‘‘(D) surgical dressings (as described in

16 section 1861(s)(5));

17 ‘‘(E) such other items as the Secretary

18 may determine; and

19 ‘‘(F) for purposes of paragraphs (1) and

20 (3)—

21 ‘‘(i) home dialysis supplies and equip22 ment (as described in section

23 1861(s)(2)(F)), and

24 ‘‘(ii) immunosuppressive drugs (as de25 scribed in section 1861(s)(2)(J)).’’.
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1 (2) CONFORMING AMENDMENT.—Effective October

2 1, 1993, paragraph (16) of section 1834(a) (42 U.S.C.

3 1395m(a)) is repealed.

4 (b) REPORT ON EFFECT OF UNIFORM CRITERIA ON

5 UTILIZATION OF ITEMS.—Not later than July 1, 1995,

6 the Secretary shall submit a report to the Committee on

7 Ways and Means and the Committee on Energy and Com8 merce of the House of Representatives and the Committee

9 on Finance of the Senate analyzing the impact of the uni10 form criteria established under section 1834(i)(3)(A) of

11 the Social Security Act (as added by subsection (a)) on

12 the utilization of items of medical equipment and supplies

13 by individuals enrolled under part B of the medicare pro14 gram.

15 (c) USE OF COVERED ITEMS BY DISABLED BENE16 FICIARIES.—

17 (1) IN GENERAL.—The Secretary of Health and

18 Human Services in consultation with representatives

19 of suppliers of durable medical equipment under

20 part B of the medicare program and individuals en21 titled to benefits under such program on the basis

22 of disability, shall conduct a study of the effects of

23 the methodology for determining payments for items

24 of such equipment under such part on the ability of
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1 such individuals to obtain items of such equipment,

2 including customized items.

3 (2) REPORT.—Not later than May 1, 1994, the

4 Secretary shall submit a report to Congress on the

5 study conducted under paragraph (1), and shall in6 clude in the report such recommendations as the

7 Secretary considers appropriate to assure that dis8 abled medicare beneficiaries have access to items of

9 durable medical equipment.

10 (d) CRITERIA FOR TREATMENT OF ITEMS AS PROS11 THETICS DEVICES OR ORTHOTICS AND PROSTHETICS.—

12 Not later than July 1, 1994, the Secretary of Health and

13 Human Services shall submit a report to the Committees

14 on Ways and Means and Energy and Commerce of the

15 House of Representatives and the Committee on Finance

16 of the Senate describing prosthetic devices or orthotics

17 and prosthetics covered under part B of the medicare pro18 gram that do not require individualized or custom fitting

19 and adjustment to be used by a patient. Such report shall

20 include recommendations for an appropriate methodology

21 for determining the amount of payment for such items

22 under such program.
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1 SEC. 13462. PROHIBITION AGAINST CARRIER FORUM SHOP2 PING.

3 (a) IN GENERAL.—Section 1834(a)(12) (42 U.S.C.

4 1395m(a)(12)) is amended to read as follows:

5 ‘‘(12) USE OF CARRIERS TO PROCESS

6 CLAIMS.—

7 ‘‘(A) DESIGNATION OF REGIONAL CAR8 RIERS.—The Secretary may designate, by regu9 lation under section 1842, one carrier for one

10 or more entire regions to process all claims

11 within the region for covered items under this

12 section.

13 ‘‘(B) PROHIBITION AGAINST CARRIER

14 SHOPPING.—(i) No supplier of a covered item

15 may present or cause to be presented a claim

16 for payment under this part unless such claim

17 is presented to the appropriate regional carrier

18 (as designated by the Secretary).

19 ‘‘(ii) For purposes of clause (i), the term

20 ‘appropriate regional carrier’ means the carrier

21 having jurisdiction over the geographic area

22 that includes the permanent residence of the

23 patient to whom the item is furnished.’’.

24 (b) EFFECTIVE DATE.—The amendment made by

25 subsection (a) shall apply to items furnished on or after

26 October 1, 1993.
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1 (c) CLARIFICATION OF AUTHORITY TO DESIGNATE

2 CARRIERS FOR OTHER ITEMS AND SERVICES.—Nothing

3 in this subsection or the amendment made by this sub4 section may be construed to restrict the authority of the

5 Secretary of Health and Human Services to designate re6 gional carriers or modify claims jurisdiction rules with re7 spect to items or services under part B of the medicare

8 program that are not covered items under section 1834(a)

9 of the Social Security Act or prosthetic devices or orthotics

10 and prosthetics under section 1834(h) of such Act.

11 SEC. 13463. RESTRICTIONS ON CERTAIN MARKETING AND

12 SALES ACTIVITIES.

13 (a) PROHIBITING UNSOLICITED TELEPHONE CON14 TACTS FROM SUPPLIERS OF DURABLE MEDICAL EQUIP15 MENT TO MEDICARE BENEFICIARIES.—

16 (1) IN GENERAL.—Section 1834(a) (42 U.S.C.

17 1395m(a)) is amended by adding at the end the fol18 lowing new paragraph:

19 ‘‘(17) PROHIBITION AGAINST UNSOLICITED

20 TELEPHONE CONTACTS BY SUPPLIERS.—

21 ‘‘(A) IN GENERAL.—A supplier of a cov22 ered item under this subsection may not contact

23 an individual enrolled under this part by tele24 phone regarding the furnishing of a covered

25 item to the individual (other than a covered
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1 item the supplier has already furnished to the

2 individual) unless—

3 ‘‘(i) the individual gives permission to

4 the supplier to make contact by telephone

5 for such purpose; or

6 ‘‘(ii) the supplier has furnished a cov7 ered item under this subsection to the indi8 vidual during the 15-month period preced9 ing the date on which the supplier contacts

10 the individual for such purpose.

11 ‘‘(B) PROHIBITING PAYMENT FOR ITEMS

12 FURNISHED SUBSEQUENT TO UNSOLICITED

13 CONTACTS.—If a supplier knowingly contacts

14 an individual in violation of subparagraph (A),

15 no payment may be made under this part for

16 any item subsequently furnished to the individ17 ual by the supplier.

18 ‘‘(C) EXCLUSION FROM PROGRAM FOR

19 SUPPLIERS ENGAGING IN PATTERN OF UNSO20 LICITED CONTACTS.—If a supplier knowingly

21 contacts individuals in violation of subpara22 graph (A) to such an extent that the supplier’s

23 conduct establishes a pattern of contacts in vio24 lation of such subparagraph, the Secretary shall

25 exclude the supplier from participation in the
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1 programs under this Act, in accordance with

2 the procedures set forth in subsections (c), (f),

3 and (g) of section 1128.’’.

4 (2) REQUIRING REFUND OF AMOUNTS COL5 LECTED FOR DISALLOWED ITEMS.—Section 1834(a)

6 (42 U.S.C. 1395m(a)), as amended by paragraph

7 (1), is amended by adding at the end the following

8 new paragraph:

9 ‘‘(18) REFUND OF AMOUNTS COLLECTED FOR

10 CERTAIN DISALLOWED ITEMS.—

11 ‘‘(A) IN GENERAL.—If a nonparticipating

12 supplier furnishes to an individual enrolled

13 under this part a covered item for which no

14 payment may be made under this part by rea15 son of paragraph (17)(B), the supplier shall re16 fund on a timely basis to the patient (and shall

17 be liable to the patient for) any amounts col18 lected from the patient for the item, unless—

19 ‘‘(i) the supplier establishes that the

20 supplier did not know and could not rea21 sonably have been expected to know that

22 payment may not be made for the item by

23 reason of paragraph (17)(B), or

24 ‘‘(ii) before the item was furnished,

25 the patient was informed that payment
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1 under this part may not be made for that

2 item and the patient has agreed to pay for

3 that item.

4 ‘‘(B) SANCTIONS.—If a supplier knowingly

5 and willfully fails to make refunds in violation

6 of subparagraph (A), the Secretary may apply

7 sanctions against the supplier in accordance

8 with section 1842(j)(2).

9 ‘‘(C) NOTICE.—Each carrier with a con10 tract in effect under this part with respect to

11 suppliers of covered items shall send any notice

12 of denial of payment for covered items by rea13 son of paragraph (17)(B) and for which pay14 ment is not requested on an assignment-related

15 basis to the supplier and the patient involved.

16 ‘‘(D) TIMELY BASIS DEFINED.—A refund

17 under subparagraph (A) is considered to be on

18 a timely basis only if—

19 ‘‘(i) in the case of a supplier who does

20 not request reconsideration or seek appeal

21 on a timely basis, the refund is made with22 in 30 days after the date the supplier re23 ceives a denial notice under subparagraph

24 (C), or
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1 ‘‘(ii) in the case in which such a re2 consideration or appeal is taken, the re3 fund is made within 15 days after the date

4 the supplier receives notice of an adverse

5 determination on reconsideration or ap6 peal.’’.

7 (b) CONFORMING AMENDMENT.—Section 1834(h)(3)

8 (42 U.S.C. 1395m(h)(3)) is amended by striking ‘‘Para9 graph (12)’’ and inserting ‘‘Paragraphs (12) and (17)’’.

10 (c) EFFECTIVE DATE.—The amendments made by

11 subsections (a) and (b) shall apply to items furnished after

12 the expiration of the 60-day period that begins on the date

13 of the enactment of this Act.

14 SEC. 13464. ANTI-KICKBACK CLARIFICATION.

15 (a) IN GENERAL.—Section 1128B(b)(3)(B) (42

16 U.S.C. 1320a–7b(b)(3)(B)) is amended by inserting be17 fore the semicolon ‘‘(except that in the case of a contract

18 supply arrangement between any entity and a supplier of

19 medical supplies and equipment (as defined in section

20 1834(i)(4), but not including items described in subpara21 graph (F) of such section), such employment shall not be

22 considered bona fide to the extent that it includes tasks

23 of a clerical and cataloging nature in transmitting to sup24 pliers assignment rights of individuals eligible for benefits
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1 under part B of title XVIII, or performance of

2 warehousing or stock inventory functions)’’.

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall apply with respect to services fur5 nished on or after the first day of the first month that

6 begins after the expiration of the 60-day period beginning

7 on the date of the enactment of this Act.

8 SEC. 13465. LIMITATIONS ON BENEFICIARY LIABILITY FOR

9 NONCOVERED SERVICES.

10 (a) IN GENERAL.—Section 1834(i) (42 U.S.C.

11 1395m(i)), as added by section 13461(a)(1), is amended—

12 (1) by redesignating paragraph (4) as para13 graph (5), and

14 (2) by inserting after paragraph (3) the follow15 ing new paragraph:

16 ‘‘(4) LIMITATION ON PATIENT LIABILITY.—If a

17 supplier of medical equipment and supplies (as de18 fined in paragraph (5))—

19 ‘‘(A) furnishes an item or service to a ben20 eficiary for which no payment may be made by

21 reason of paragraph (1);

22 ‘‘(B) furnishes an item or service to a ben23 eficiary for which payment is denied in advance

24 under subsection (a)(15); or
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1 ‘‘(C) furnishes an item or service to a ben2 eficiary for which payment is denied under sec3 tion 1862(a)(1);

4 any expenses incurred for items and services fur5 nished to an individual by such a supplier not on an

6 assigned basis shall be the responsibility of such

7 supplier. The individual shall have no financial re8 sponsibility for such expenses and the supplier shall

9 refund on a timely basis to the individual (and shall

10 be liable to the individual for) any amounts collected

11 from the individual for such items or services. The

12 provisions of subsection (a)(18) shall apply to re13 funds required under the previous sentence in the

14 same manner as such provisions apply to refunds

15 under such subsection.’’.

16 (2) CONFORMING AMENDMENT.—Section

17 1128B(b)(3)(B) (42 U.S.C. 1320a–7b(b)(3)(B)), as

18 amended by section 13464(a), is amended by strik19 ing ‘‘1834(i)(4)’’ and inserting ‘‘1834(i)(5)’’.

20 (b) EFFECTIVE DATE.—The amendments made by

21 subsection (a) shall apply to items or services furnished

22 on or after October 1, 1993.
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1 SEC. 13466. ADJUSTMENTS FOR INHERENT REASONABLE2 NESS.

3 (a) ADJUSTMENTS MADE TO FINAL PAYMENT

4 AMOUNTS.—

5 (1) IN GENERAL.—Section 1834(a)(10)(B) (42

6 U.S.C. 1395m(a)(10)(B)) is amended by adding at

7 the end the following: ‘‘In applying such provisions

8 to payments for an item under this subsection, the

9 Secretary shall make adjustments to the payment

10 basis for the item described in paragraph (1)(B) if

11 the Secretary determines (in accordance with such

12 provisions and on the basis of prices and costs appli13 cable at the time the item is furnished) that such

14 payment basis is not inherently reasonable.’’.

15 (2) EFFECTIVE DATE.—The amendment made

16 by paragraph (1) shall take effect on the date of the

17 enactment of this Act.

18 (b) ADJUSTMENT REQUIRED FOR CERTAIN ITEMS.—

19 (1) IN GENERAL.—In accordance with section

20 1834(a)(10)(B) of the Social Security Act (as

21 amended by subsection (a)), the Secretary of Health

22 and Human Services shall determine whether the

23 payment amounts for the items described in para24 graph (2) are not inherently reasonable, and shall

25 adjust such amounts in accordance with such section

26 if the amounts are not inherently reasonable.
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1 (2) ITEMS DESCRIBED.—The items referred to

2 in paragraph (1) are decubitus care equipment,

3 transcutaneous electrical nerve stimulators, and any

4 other items considered appropriate by the Secretary.

5 SEC. 13467. TREATMENT OF NEBULIZERS AND ASPIRATORS.

6 (a) IN GENERAL.—Section 1834(a)(3)(A) (42 U.S.C.

7 1395m(a)(3)(A)) is amended by striking ‘‘ventilators, as8 pirators, IPPB machines, and nebulizers’’ and inserting

9 ‘‘ventilators and IPPB machines’’.

10 (b) PAYMENT FOR ACCESSORIES RELATING TO

11 NEBULIZERS AND ASPIRATORS.—Section 1834(a)(2)(A)

12 (42 U.S.C. 1395m(a)) is amended—

13 (1) by striking ‘‘or’’ at the end of clause (i),

14 (2) by adding ‘‘or’’ at the end of clause (ii), and

15 (3) by inserting after clause (ii) the following

16 new clause:

17 ‘‘(iii) which is an accessory used in

18 conjunction with a nebulizer or aspirator,’’.

19 (c) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to items furnished on or after Jan21 uary 1, 1994.

22 SEC. 13468. PAYMENT FOR OSTOMY SUPPLIES AND OTHER

23 SUPPLIES.

24 (a) OSTOMY SUPPLIES, TRACHEOSTOMY SUPPLIES,

25 AND UROLOGICALS.—
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1 (1) IN GENERAL.—Section 1834(h)(1) (42

2 U.S.C. 1395m(h)(1)) is amended by adding at the

3 end the following new subparagraph:

4 ‘‘(E) EXCEPTION FOR CERTAIN ITEMS.—

5 Payment for ostomy supplies, tracheostomy

6 supplies, and urologicals shall be made in ac7 cordance with subparagraphs (B) and (C) of

8 section 1834(a)(2).’’.

9 (2) CONFORMING AMENDMENT.—Section

10 1834(h)(1)(B) (42 U.S.C. 1395m(h)(1)(B)) is

11 amended by striking ‘‘subparagraph (C),’’ and in12 serting ‘‘subparagraphs (C) and (E),’’.

13 (3) EFFECTIVE DATE.—The amendments made

14 by this subsection shall apply to items furnished on

15 or after January 1, 1994.

16 (b) SURGICAL DRESSINGS.—

17 (1) IN GENERAL.—Section 1834 (42 U.S.C.

18 1395m), as amended by section 13461(a), is amend19 ed by adding at the end the following new sub20 section:

21 ‘‘(j) PAYMENT FOR SURGICAL DRESSINGS.—

22 ‘‘(1) IN GENERAL.—Payment under this sub23 section for surgical dressings (described in section

24 1861(s)(5)) shall be made in a lump sum amount
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1 for the purchase of the item in an amount equal to

2 80 percent of the lesser of—

3 ‘‘(A) the actual charge for the item; or

4 ‘‘(B) a payment amount determined in ac5 cordance with the methodology described in

6 subparagraphs (B) and (C) of subsection (a)(2)

7 (except that in applying such methodology, the

8 national limited payment amount referred to in

9 such subparagraphs shall be initially computed

10 based on local payment amounts using average

11 reasonable charges for the 12-month period

12 ending December 31, 1992, increased by the

13 covered item updates described in such sub14 section for 1993 and 1994).

15 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

16 apply to surgical dressings that are—

17 ‘‘(A) furnished as an incident to a physi18 cian’s professional service; or

19 ‘‘(B) furnished by a home health agency.’’.

20 (2) CONFORMING AMENDMENT.—Section

21 1833(a)(1) (42 U.S.C. 1395l(a)(1)), as amended by

22 sections 13478(e)(2) and 13445(e)(1), is amended—

23 (A) by striking ‘‘and’’ before ‘‘(P)’’, and

24 (B) by inserting before the semicolon at

25 the end the following: ‘‘, and (Q) with respect
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1 to surgical dressings, the amounts paid shall be

2 the amounts determined under section

3 1834(j);’’.

4 (3) EFFECTIVE DATE.—The amendments made

5 by this subsection shall apply to items furnished on

6 or after January 1, 1994.

7 (c) REDUCTION IN PAYMENTS FOR TENS DE8 VICES.—

9 (1) IN GENERAL.—Section 1834(a)(1)(D) (42

10 U.S.C. 1395m(a)(1)(D)) is amended by striking ‘‘15

11 percent’’ the second place it appears and inserting

12 ‘‘45 percent’’.

13 (2) EFFECTIVE DATE.—The amendment made

14 by paragraph (1) shall apply to items furnished on

15 or after January 1, 1994.

16 SEC. 13469. MISCELLANEOUS AND TECHNICAL CORREC17 TIONS.

18 (a) UPDATES TO PAYMENT AMOUNTS.—Subpara19 graph (A) of section 1834(a)(14) (42 U.S.C.

20 1395m(a)(14)) is amended to read as follows:

21 ‘‘(A) for 1991 and 1992, the percentage

22 increase in the consumer price index for all

23 urban consumers (U.S. city average) for the 12-

24 month period ending with June of the previous

25 year reduced by 1 percentage point; and’’.
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1 (b) TREATMENT OF POTENTIALLY OVERUSED ITEMS

2 AND ADVANCED DETERMINATIONS OF COVERAGE.—

3 (1) IN GENERAL.—Effective on the date of the

4 enactment of this Act, section 1834(a)(15) (42

5 U.S.C. 1395m(a)(15)) is amended to read as

6 follows:

7 ‘‘(15) SPECIAL TREATMENT FOR POTENTIALLY

8 OVERUSED ITEMS.—

9 ‘‘(A) DEVELOPMENT OF LIST OF ITEMS BY

10 SECRETARY.—The Secretary shall develop and

11 periodically update a list of items for which

12 payment may be made under this subsection

13 that are potentially overused, and shall include

14 in such list seat-lift mechanisms, transcutane15 ous electrical nerve stimulators, motorized

16 scooters, decubitus care mattresses, and any

17 such other item determined by the Secretary to

18 be potentially overused on the basis of any of

19 the following criteria—

20 ‘‘(i) the item is marketed directly to

21 potential patients;

22 ‘‘(ii) the item is marketed with an

23 offer to potential patients to waive the

24 costs of coinsurance associated with the

25 item or is marketed as being available at
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1 no cost to policyholders of a medicare sup2 plemental policy (as defined in section

3 1882(g)(1));

4 ‘‘(iii) the item has been subject to a

5 consistent pattern of overutilization; or

6 ‘‘(iv) a high proportion of claims for

7 payment for such item under this part may

8 not be made because of the application of

9 section 1862(a)(1).

10 ‘‘(B) ITEMS SUBJECT TO SPECIAL CARRIER

11 SCRUTINY.—Payment may not be made under

12 this part for any item contained in the list de13 veloped by the Secretary under subparagraph

14 (A) unless the carrier has subjected the claim

15 for payment for the item to special scrutiny or

16 has followed the procedures described in para17 graph (11)(C) with respect to the item.’’.

18 (2) ADVANCE DETERMINATION BY CARRIERS.—

19 Effective January 1, 1994, section 1834(a)(11) (42

20 U.S.C. 1395m(a)) is amended by adding at the end

21 the following new subparagraph:

22 ‘‘(C) CARRIER DETERMINATIONS FOR CER23 TAIN ITEMS IN ADVANCE.—A carrier shall de24 termine in advance whether payment for an

25 item may not be made under this subsection be-
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1 cause of the application of section 1862(a)(1)

2 if—

3 ‘‘(i) the item is a customized item

4 (other than inexpensive items specified by

5 the Secretary); or

6 ‘‘(ii) the item is a specified covered

7 item under subparagraph (B).’’.

8 (3) INCLUSION IN CARRIER PERFORMANCE

9 EVALUATIONS.—Effective for standards applied for

10 contract years beginning after the date of the enact11 ment of this Act, section 1842(c) (42 U.S.C.

12 1395u(c)), as amended by section 13448(a), is

13 amended by adding at the end the following new

14 paragraph:

15 ‘‘(5) Each contract under this section which provides

16 for the disbursement of funds, as described in subsection

17 (a)(1)(B), shall require the carrier to meet criteria devel18 oped by the Secretary to measure the timeliness of carrier

19 responses to requests for payment of items described in

20 section 1834(a)(11)(C).’’.

21 (4) APPLICATION TO PROSTHETIC DEVICES AND

22 ORTHOTICS AND PROSTHETICS.—Section 1834(h)(3)

23 (42 U.S.C. 1395m(h)(3)) is amended by striking

24 ‘‘paragraph (10) and paragraph (11)’’ and inserting

25 ‘‘paragraphs (10) and (11)’’.
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1 (c) STUDY OF VARIATIONS IN DURABLE MEDICAL

2 EQUIPMENT SUPPLIER COSTS.—

3 (1) COLLECTION AND ANALYSIS OF SUPPLIER

4 COST DATA.—The Administration of the Health

5 Care Financing Administration shall, in consultation

6 with appropriate organizations, collect data on sup7 plier costs of durable medical equipment for which

8 payment may be made under part B of the medicare

9 program, and shall analyze such data to determine

10 the proportions of such costs attributable to the

11 service and product components of furnishing such

12 equipment and the extent to which such proportions

13 vary by type of equipment and by the geographic

14 region in which the supplier is located.

15 (2) DEVELOPMENT OF GEOGRAPHIC ADJUST16 MENT INDEX; REPORTS.—Not later than January 1,

17 1995—

18 (A) the Administrator shall submit a re19 port to the Committees on Energy and Com20 merce and Ways and Means of the House of

21 Representatives and the Committee on Finance

22 of the Senate on the data collected and the

23 analysis conducted under paragraph (1), and

24 shall include in such report the Administrator’s

25 recommendations for a geographic cost adjust-
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1 ment index for suppliers of durable medical

2 equipment under the medicare program and an

3 analysis of the impact of such proposed index

4 on payments under the medicare program; and

5 (B) the Comptroller General shall submit a

6 report to the Committees on Energy and Com7 merce and Ways and Means of the House of

8 Representatives and the Committee on Finance

9 of the Senate analyzing on a geographic basis

10 the supplier costs of durable medical equipment

11 under the medicare program.

12 (d) OXYGEN RETESTING.—Section 1834(a)(5)(E)

13 (42 U.S.C. 1395m(a)(5)(E)) is amended by striking ‘‘55’’

14 and inserting ‘‘56’’.

15 (e) OTHER MISCELLANEOUS AND TECHNICAL

16 AMENDMENTS.—(1) Section 4152(a)(3) of OBRA–1990

17 is amended by striking ‘‘amendment made by subsection

18 (a)’’ and inserting ‘‘amendments made by this sub19 section’’.

20 (2) Section 4152(c)(2) of OBRA–1990 is amended

21 by striking ‘‘1395m(a)(7)(A)’’ and inserting

22 ‘‘1395m(a)(7)’’.

23 (3) Section 1834(a)(7)(A)(iii)(II) (42 U.S.C.

24 1395m(a)(7)(A)(iii)(II)) is amended by striking ‘‘clause

25 (v)’’ and inserting ‘‘clause (vi)’’.
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1 (4) Section 1834(a)(7)(C)(i) (42 U.S.C.

2 1395m(a)(7)(C)(i)) is amended by striking ‘‘or paragraph

3 (3)’’.

4 (5) Section 1834(a)(3) (42 U.S.C. 1395m(a)(3)) is

5 amended by striking subparagraph (D).

6 (6) Section 4153(c)(1) of OBRA–1990 is amended

7 by striking ‘‘1834(a)’’ and inserting ‘‘1834(h)’’.

8 (7) Section 4153(d)(2) of OBRA–1990 is amended

9 by striking ‘‘Reconiliation’’ and inserting ‘‘Reconcili10 ation’’.

11 (8)(A) Section 1834(a) (42 U.S.C. 1395m(a)) is

12 amended by striking paragraph (6).

13 (B) Section 1834(a) (42 U.S.C. 1395m(a)) is

14 amended—

15 (i) in subparagraphs (A) and (B) of paragraph

16 (1), by striking ‘‘(2) through (7)’’ each place it

17 appears and inserting ‘‘(2) through (5) and (7)’’;

18 (ii) in paragraph (7), by striking ‘‘(2) through

19 (6)’’ and inserting ‘‘(2) through (5)’’;

20 (iii) in paragraph (8), by striking ‘‘paragraphs

21 (6) and (7)’’ each place it appears in the matter pre22 ceding subparagraph (A) and in subparagraph (C)

23 and inserting ‘‘paragraph (7)’’; and

24 (iv) in paragraph (8)(A)(i), by striking ‘‘de25 scribed—’’ and all that follows and inserting ‘‘de-
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1 scribed in paragraph (7) equal to the average of the

2 purchase prices on the claims submitted on an as3 signment-related basis for the unused item supplied

4 during the 6-month period ending with December

5 1986.’’.

6 (9) The amendments made by this subsection shall

7 take effect as if included in the enactment of OBRA–1990.

8 Subchapter E—Other Provisions

9 SEC. 13471. CLARIFYING PAYMENTS FOR MEDICALLY DI10 RECTED CERTIFIED REGISTERED NURSE AN11 ESTHETIST SERVICES.

12 (a) IN GENERAL.—Section 1833(l)(4)(B) (42 U.S.C.

13 1395l(l)(4)(B)) is amended to read as follows:

14 ‘‘(B) Except as provided in subparagraph (D), the

15 conversion factor used to determine the amount paid

16 under the fee schedule under this subsection for services

17 furnished by a certified registered nurse anesthetist who

18 is medically directed—

19 ‘‘(i) in a year after 1993 and before 1997, shall

20 be $10.75, or

21 ‘‘(ii) in a subsequent calendar year, shall be the

22 previous year’s conversion factor increased by the

23 update determined under section 1848(d)(3) for

24 physician anesthesia services for that year.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to services furnished on or after

3 January 1, 1994.

4 SEC. 13472. EXTENSION OF ALZHEIMER’S DISEASE DEM5 ONSTRATION PROJECTS.

6 Section 9342 of OBRA–1986, as amended by section

7 4164(a)(2) of OBRA–1990, is amended—

8 (1) in subsection (c)(1), by striking ‘‘4 years’’

9 and inserting ‘‘5 years’’; and

10 (2) in subsection (f), —

11 (A) by striking ‘‘$55,000,000’’ and insert12 ing ‘‘$58,000,000’’, and

13 (B) by striking ‘‘$3,000,000’’ and insert14 ing ‘‘$5,000,000’’.

15 SEC. 13473. ORAL CANCER DRUGS.

16 (a) NEW COVERAGE OF CERTAIN SELF-ADMINIS17 TERED ANTICANCER DRUGS.—Section 1861(s)(2) (42

18 U.S.C. 1395(s)(2)), as amended by section

19 13478(f)(8)(B), is amended—

20 (1) by striking ‘‘and’’ at the end of subpara21 graph (N);

22 (2) by adding ‘‘and’’ at the end of subpara23 graph (O); and

24 (3) by adding at the end the following new sub25 paragraph:
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1 ‘‘(P) an oral drug (which is approved by the

2 Federal Food and Drug Administration) prescribed

3 for use as an anticancer chemotherapeutic agent for

4 a given indication, and containing an active ingredi5 ent (or ingredients), which is the same indication

6 and active ingredient (or ingredients) as a drug

7 which the carrier determines would be covered pur8 suant to subparagraph (A) or (B) if the drug could

9 not be self-administered;’’.

10 (b) UNIFORM COVERAGE OF ‘‘OFF-LABEL’’

11 ANTICANCER DRUGS.—Section 1861(t) (42 U.S.C.

12 1395x(t)) is amended—

13 (1) by inserting ‘‘(1)’’ after ‘‘(t)’’;

14 (2) by striking ‘‘(m)(5) of this section’’ and in15 serting ‘‘(m)(5) and paragraph (2)’’; and

16 (3) by adding at the end the following new

17 paragraph:

18 ‘‘(2)(A) For purposes of paragraph (1), the term

19 ‘drugs’ also includes any drugs or biologicals used in an

20 anticancer chemotherapeutic regimen for a medically ac21 cepted indication (as described in subparagraph (B)).

22 ‘‘(B) In subparagraph (A), the term ‘medically ac23 cepted indication’, with respect to the use of a drug, in24 cludes any use which has been approved by the Food and
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1 Drug Administration for the drug, and includes another

2 use of the drug if—

3 ‘‘(i) the drug has been approved by the Food

4 and Drug Administration, and

5 ‘‘(ii) the carrier involved determines, based

6 upon guidance provided by the Secretary to carriers

7 for determining medically accepted uses of drugs,

8 that the use is medically accepted taking into ac9 count the uses of such drug which are—

10 ‘‘(I) included (or approved for inclusion) in

11 one or more of the following compendia: the

12 American Hospital Formulary Service-Drug In13 formation, the American Medical Association

14 Drug Evaluations, and the United States Phar15 macopoeia-Drug Information; or

16 ‘‘(II) supported by clinical evidence in peer

17 reviewed medical literature appearing in publi18 cations which have been specifically approved

19 for purposes of this paragraph by the Sec20 retary.’’.

21 (c) STUDY OF MEDICARE COVERAGE OF PATIENT

22 CARE COSTS ASSOCIATED WITH CLINICAL TRIALS OF

23 NEW CANCER THERAPIES.—

24 (1) STUDY.—The Secretary of Health and

25 Human Services shall conduct a study of the effects
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1 of expressly covering under the medicare program

2 the patient care costs for beneficiaries enrolled in

3 clinical trials of new cancer therapies, where the pro4 tocol for the trial has been approved by the National

5 Cancer Institute or meets similar scientific and ethi6 cal standards, including approval by an institutional

7 review board. The study shall include—

8 (A) an estimate of the cost of such cov9 erage, taking into account the extent to which

10 medicare currently pays for such patient care

11 costs in practice;

12 (B) an assessment of the extent to which

13 such clinical trials represent the best available

14 treatment for the patients involved and of the

15 effects of participation in the trials on the

16 health of such patients;

17 (C) an assessment of whether progress in

18 developing new anticancer therapies would be

19 assisted by medicare coverage of such patient

20 care costs; and

21 (D) an evaluation of whether there should

22 be special criteria for the admission of medicare

23 beneficiaries (on account of their age or phys24 ical condition) to clinical trials for which medi25 care would pay the patient care costs.
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1 (2) REPORT.—Not later than 2 years after the

2 date of the enactment of this Act, the Secretary of

3 Health and Human Services shall submit a report

4 on the study conducted under paragraph (1) to the

5 Committee on Ways and Means and the Committee

6 on Energy and Commerce of the House of Rep7 resentatives and the Committee on Finance of the

8 Senate. Such report shall include recommendations

9 as to the coverage under the medicare program of

10 patient care costs of beneficiaries enrolled in clinical

11 trials of new cancer therapies.

12 (d) EFFECTIVE DATE.—The amendments made by

13 subsections (a) and (b) shall apply to items furnished on

14 or after January 1, 1994.

15 SEC. 13474. PART B PREMIUM PAYMENTS FOR LATE EN16 ROLLMENT.

17 (a) LIMITATION ON MEDICARE PART B LATE EN18 ROLLMENT PENALTY.—

19 (1) IN GENERAL.—Section 1839 (42 U.S.C.

20 1395r) is amended by adding at the end the follow21 ing new subsection:

22 ‘‘(g) The percent increase in premiums under sub23 section (b) due to late enrollment under this part shall

24 not exceed 25 percent in the case of an individual who

25 is an annuitant described in subparagraph (A) or (B) of
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1 section 8901(3) of title 5, United States Code (including

2 an individual or survivor described in section

3 8906(g)(2)(A) of such title) for a month if—

4 ‘‘(1) during the individual’s initial enrollment

5 period under section 1837(d)—

6 ‘‘(A) the individual was enrolled in a group

7 health plan (as defined in section

8 1862(b)(1)(A)(v)) that provided coverage of

9 items and services for which payment may be

10 made under this part, and

11 ‘‘(B) the individual elected not to enroll (or

12 to be deemed enrolled) under this section; and

13 ‘‘(2) due to a change of coverage under such

14 plan, there is no coverage during the month under

15 such plan with respect to items and services for

16 which payment may be made under this part unless

17 the individual is enrolled under this part.’’.

18 (2) EFFECTIVE DATE.—The amendment made

19 by paragraph (1) shall apply to premiums for

20 months beginning with January 1992.

21 (b) PAYMENT OF PART B PREMIUM LATE ENROLL22 MENT PENALTIES BY STATES.—Section 1839 (42 U.S.C.

23 1395r), as amended by subsection (a), is further amended

24 by adding at the end the following new subsection:
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1 ‘‘(h)(1) Upon the request of a State, the Secretary

2 may enter into an agreement with the State under which

3 the State agrees to pay on a quarterly or other periodic

4 basis to the Secretary (to be deposited in the Treasury

5 to the credit of the Federal Supplementary Medical Insur6 ance Trust Fund) an amount equal to the amount of the

7 part B late enrollment premium increases with respect to

8 the premiums for eligible individuals (as defined in para9 graph (3)(A)).

10 ‘‘(2) No part B late enrollment premium increase

11 shall apply to an eligible individual for premiums for

12 months for which the amount of such an increase is pay13 able under an agreement under paragraph (1).

14 ‘‘(3) In this subsection:

15 ‘‘(A) The term ‘eligible individual’ means an in16 dividual who is enrolled under this part B and who

17 is within a class of individuals specified in the agree18 ment under paragraph (1).

19 ‘‘(B) The term ‘part B late enrollment premium

20 increase’ means any increase in a premium as a re21 sult of the application of subsection (b).’’.

22 SEC. 13475. COVERAGE OF SERVICES OF SPEECH-LAN23 GUAGE PATHOLOGISTS AND AUDIOLOGISTS.

24 (a) SERVICES DEFINED.—Section 1861 (42 U.S.C.

25 1395x), as amended by section 13478(f)(8)(E), is amend-
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1 ed by inserting after subsection (kk) the following new

2 subsection:

3 ‘‘Speech-Language Pathology Services; Audiology

4 Services

5 ‘‘(ll)(1) The term ‘speech-language pathology serv6 ices’ means such speech, language, and related function

7 assessment and rehabilitation services furnished by a

8 qualified speech-language pathologist as the speech-lan9 guage pathologist is legally authorized to perform under

10 State law (or the State regulatory mechanism provided by

11 State law) as would otherwise be covered if furnished by

12 a physician.

13 ‘‘(2) The term ‘audiology services’ means such hear14 ing and balance assessment services furnished by a quali15 fied audiologist as the audiologist is legally authorized to

16 perform under State law (or the State regulatory mecha17 nism provided by State law).

18 ‘‘(3) In this subsection:

19 ‘‘(A) The term ‘qualified speech-language pa20 thologist’ means an individual with a master’s or

21 doctoral degree in speech-language pathology who

22 has performed not less than 9 months of supervised

23 full-time speech-language pathology services after

24 obtaining such degree and who—
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1 ‘‘(i) is licensed (or is otherwise certified) as

2 a speech-language pathologist by the State in

3 which the individual furnishes such services, or

4 ‘‘(ii) in the case of an individual who fur5 nishes services in a State which does not pro6 vide for the licensing (or other form of certifi7 cation) of speech-language pathologists, has

8 successfully completed a national clinical com9 petency examination in speech-language pathol10 ogy approved by the Secretary.

11 ‘‘(B) The term ‘qualified audiologist’ means an

12 individual with a master’s or doctoral degree in

13 audiology who has performed not less than 9 months

14 of supervised full-time audiology services after ob15 taining such degree and who—

16 ‘‘(i) is licensed (or is otherwise certified) as

17 an audiologist by the State in which the individ18 ual furnishes such services, or

19 ‘‘(ii) in the case of an individual who fur20 nishes services in a State which does not pro21 vide for the licensing (or other form of certifi22 cation) of audiologists, has successfully com23 pleted a national clinical competency examina24 tion in audiology approved by the Secretary.’’.
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1 (b) CONFORMING AMENDMENTS RELATING TO MED2 ICARE TREATMENT OF SPEECH AND LANGUAGE SERV3 ICES.—

4 (1) EXTENDED CARE SERVICES.—Section

5 1861(h)(3) (42 U.S.C. 1395x(h)(3)) is amended by

6 striking ‘‘, occupational, or speech therapy’’ and in7 serting ‘‘or occupational therapy or speech-language

8 pathology services’’.

9 (2) HOME HEALTH SERVICES.—Section

10 1861(m)(2) (42 U.S.C. 1395x(m)(2)) is amended by

11 striking ‘‘, occupational, or speech therapy’’ and in12 serting ‘‘or occupational therapy or speech-language

13 pathology services’’.

14 (3) OUTPATIENT PHYSICAL THERAPY SERV15 ICES.—The fourth sentence of section 1861(p) (42

16 U.S.C. 1395x(p)) is amended by striking ‘‘speech

17 pathology services’’ and inserting ‘‘speech-language

18 pathology services’’.

19 (4) COMPREHENSIVE OUTPATIENT REHABILITA20 TION FACILITY SERVICES.—Section 1861(cc)(1)(B)

21 (42 U.S.C. 1395x(cc)(1)(B)) is amended by striking

22 ‘‘speech pathology services’’ and inserting ‘‘speech23 language pathology services’’.

24 (5) HOSPICE CARE.—Section 1861(dd)(1)(B)

25 (42 U.S.C. 1395x(dd)(1)(B)) is amended by striking
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1 ‘‘therapy or speech-language pathology’’ and insert2 ing ‘‘therapy, or speech-language pathology serv3 ices’’.

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall take effect on January 1, 1994.

6 SEC. 13476. EXTENSION OF MUNICIPAL HEALTH SERVICE

7 DEMONSTRATION PROJECTS.

8 Section 9215 of the Consolidated Omnibus Budget

9 Reconciliation Act of 1985, as amended by section 6135

10 of OBRA–1989, is amended—

11 (1) by striking ‘‘December 31, 1993’’ and in12 serting ‘‘December 31, 1997’’, and

13 (2) in the second sentence, by inserting after

14 ‘‘beneficiary costs,’’ the following: ‘‘costs to the med15 icaid program and other payers, access to care, out16 comes, beneficiary satisfaction, utilization differences

17 among the different populations served by the

18 projects,’’.

19 SEC. 13477. TREATMENT OF CERTAIN INDIAN HEALTH PRO20 GRAMS AND FACILITIES AS FEDERALLY21 QUALIFIED HEALTH CENTERS.

22 (a) IN GENERAL.—Section 1861(aa)(4) (42 U.S.C.

23 1395x(aa)(4)) is amended—

24 (1) by striking ‘‘or’’ at the end of subparagraph

25 (B);
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1 (2) by striking the period at the end of sub2 paragraph (C) and inserting ‘‘; or’’; and

3 (3) by adding at the end the following new sub4 paragraph:

5 ‘‘(D) is an outpatient health program or facility

6 operated by a tribe or tribal organization under the

7 Indian Self-Determination Act or by an urban In8 dian organization receiving funds under title V of

9 the Indian Health Care Improvement Act.’’.

10 (b) EFFECTIVE DATE.—The amendment made by

11 subsection (a) shall apply to services furnished on or after

12 January 1, 1994.

13 SEC. 13478. MISCELLANEOUS AND TECHNICAL CORREC14 TIONS.

15 (a) REVISION OF INFORMATION ON PART B CLAIMS

16 FORMS.—Section 1833(q)(1) (42 U.S.C. 1395l(q)(1)) is

17 amended—

18 (1) by striking ‘‘provider number’’ and inserting

19 ‘‘unique physician identification number’’; and

20 (2) by striking ‘‘and indicate whether or not the

21 referring physician is an interested investor (within

22 the meaning of section 1877(h)(5))’’.

23 (b) CONSULTATION FOR SOCIAL WORKERS.—Effec24 tive with respect to services furnished on or after January

25 1, 1991, section 6113(c) of OBRA–1989 is amended—
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1 (1) by inserting ‘‘and clinical social worker

2 services’’ after ‘‘psychologist services’’; and

3 (2) by striking ‘‘psychologist’’ the second and

4 third place it appears and inserting ‘‘psychologist or

5 clinical social worker’’.

6 (c) REPORTS ON HOSPITAL OUTPATIENT PAY7 MENT.—(1) OBRA–1989 is amended by striking section

8 6137.

9 (2) Section 1135(d) (42 U.S.C. 1320b–5(d)) is

10 amended—

11 (A) by striking paragraph (6); and

12 (B) in paragraph (7)—

13 (i) by striking ‘‘systems’’ each place it ap14 pears and inserting ‘‘system’’; and

15 (ii) by striking ‘‘paragraphs (1) and (6)’’

16 and inserting ‘‘paragraph (1)’’.

17 (d) RADIOLOGY AND DIAGNOSTIC SERVICES PRO18 VIDED IN HOSPITAL OUTPATIENT DEPARTMENTS.—(1)

19 Effective as if included in the enactment of OBRA–1989,

20 section 1833(n)(1)(B)(i)(II) (42 U.S.C.

21 1395l(n)(1)(B)(i)(II)) is amended—

22 (A) by inserting ‘‘and for services described in

23 subsection (a)(2)(E)(ii) furnished on or after Janu24 ary 1, 1992’’ after ‘‘1989’’; and
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1 (B) by striking ‘‘1842(b)’’ and inserting

2 ‘‘1842(b) (or, in the case of services furnished on or

3 after January 1, 1992, under section 1848)’’.

4 (2) Effective as if included in the enactment of

5 OBRA–1989, section 1833(n)(1)(B)(i)(II) (42 U.S.C.

6 1395l(n)(1)(B)(i)(II)) is amended by striking ‘‘January 1,

7 1989’’ and inserting ‘‘April 1, 1989’’.

8 (e) PAYMENTS TO NURSE PRACTITIONERS IN RURAL

9 AREAS (SECTION 4155 OF OBRA–1990).—(1) Section

10 1861(s)(2)(K)(iii) (42 U.S.C. 1395x(s)(2)(K)(iii)) is

11 amended—

12 (A) by striking ‘‘subsection (aa)(3)’’ and insert13 ing ‘‘subsection (aa)(5)’’; and

14 (B) by striking ‘‘subsection (aa)(4)’’ and insert15 ing ‘‘subsection (aa)(6)’’.

16 (2) Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)) is

17 amended—

18 (A) by striking ‘‘and’’ before ‘‘(N)’’; and

19 (B) with respect to the matter inserted by sec20 tion 4155(b)(2)(B) of OBRA–1990—

21 (i) by striking ‘‘(M)’’ and inserting ‘‘, and

22 (O)’’, and

23 (ii) by transferring and inserting it (as

24 amended) immediately before the semicolon at

25 the end.
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1 (3) Section 1833(r)(1) (42 U.S.C. 1395l(r)(1)) is

2 amended—

3 (A) by striking ‘‘ambulatory’’ each place it ap4 pears and inserting ‘‘or ambulatory’’; and

5 (B) by striking ‘‘center,’’ and inserting ‘‘cen6 ter’’.

7 (4) Section 1833(r)(2)(A) (42 U.S.C. 1395l(r)(2)(A))

8 is amended by striking ‘‘subsection (a)(1)(M)’’ and insert9 ing ‘‘subsection (a)(1)(O)’’.

10 (5) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is

11 amended by striking ‘‘subsection (s)(2)(K)(i)’’ and insert12 ing ‘‘clauses (i) or (iii) of subsection (s)(2)(K)’’.

13 (6) Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is

14 amended by striking ‘‘this Act’’ and inserting ‘‘this title’’.

15 (7) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is

16 amended by striking ‘‘1861(s)(2)(K)(i)’’ and inserting

17 ‘‘1861(s)(2)(K)(i) or 1861(s)(2)(K)(iii)’’.

18 (8) Section 1866(a)(1)(H) (42 U.S.C.

19 1395cc(a)(1)(H)) is amended by striking

20 ‘‘1861(s)(2)(K)(i)’’ and inserting ‘‘1861(s)(2)(K)(i) or

21 1861(s)(2)(K)(iii)’’.

22 (f) OTHER MISCELLANEOUS AND TECHNICAL

23 AMENDMENTS.—

24 (1) IMMEDIATE ENROLLMENT IN PART B BY IN25 DIVIDUALS COVERED BY AN EMPLOYMENT-BASED
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1 PLAN.—(A) Subparagraphs (A) and (B) of section

2 1837(i)(3) (42 U.S.C. 1395p(i)(3)) are each

3 amended—

4 (i) by striking ‘‘beginning with the first

5 day of the first month in which the individual

6 is no longer enrolled’’ and inserting ‘‘including

7 each month during any part of which the indi8 vidual is enrolled’’; and

9 (ii) by striking ‘‘and ending seven months

10 later’’ and inserting ‘‘ending with the last day

11 of the eighth consecutive month in which the in12 dividual is at no time so enrolled’’.

13 (B) Paragraphs (1) and (2) of section 1838(e)

14 (42 U.S.C. 1395q(e)) are amended to read as fol15 lows:

16 ‘‘(1) in any month of the special enrollment pe17 riod in which the individual is at any time enrolled

18 in a plan (specified in subparagraph (A) or (B), as

19 applicable, of section 1837(i)(3)) or in the first

20 month following such a month, the coverage period

21 shall begin on the first day of the month in which

22 the individual so enrolls (or, at the option of the in23 dividual, on the first day of any of the following

24 three months), or
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1 ‘‘(2) in any other month of the special enroll2 ment period, the coverage period shall begin on the

3 first day of the month following the month in which

4 the individual so enrolls.’’.

5 (C) The amendments made by subparagraphs

6 (A) and (B) shall take effect on the first day of the

7 first month that begins after the expiration of the

8 120-day period that begins on the date of the enact9 ment of this Act.

10 (2) BLEND AMOUNTS FOR AMBULATORY SUR11 GICAL CENTER PAYMENTS.—Subclauses (I) and (II)

12 of section 1833(i)(3)(B)(ii) (42 U.S.C.

13 1395l(i)(3)(B)(ii)) are each amended—

14 (A) by striking ‘‘for reporting’’ and insert15 ing ‘‘for portions of cost reporting’’; and

16 (B) by striking ‘‘and on or before’’ and in17 serting ‘‘and ending on or before’’.

18 (3) CLINICAL DIAGNOSTIC LABORATORY TESTS

19 (SECTION 4154 OF OBRA–1990).—Section 4154(e)(5)

20 of OBRA–1990 is amended by striking ‘‘(1)(A)’’ and

21 inserting ‘‘(1)(A),’’.

22 (4) SEPARATE PAYMENT UNDER PART B FOR

23 CERTAIN SERVICES (SECTION 4157 OF OBRA–1990).—

24 Section 4157(a) of OBRA–1990 is amended by

25 striking ‘‘(a) SERVICES OF’’ and all that follows
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1 through ‘‘Section’’ and inserting ‘‘(a) TREATMENT

2 OF SERVICES OF CERTAIN HEALTH PRACTITION3 ERS.—Section’’.

4 (5) CERTIFIED REGISTERED NURSE ANES5 THETISTS (SECTION 4160 OF OBRA–1990).—Section

6 1833(l)(4)(B)(ii)(VII) (42 U.S.C.

7 1395l(l)(4)(B)(ii)(VII)) is amended by striking

8 ‘‘1997’’ and inserting ‘‘1996’’.

9 (6) COMMUNITY HEALTH CENTERS AND RURAL

10 HEALTH CLINICS (SECTION 4161 OF OBRA–1990).—

11 (A) The fourth sentence of section 1861(aa)(2) (42

12 U.S.C. 1395x(aa)(2)) is amended—

13 (i) by striking ‘‘certification’’ the first

14 place it appears and inserting ‘‘approval’’; and

15 (ii) by striking ‘‘the Secretary’s approval

16 or disapproval of the certification’’ and insert17 ing ‘‘Secretary’s approval or disapproval’’.

18 (B) Section 4161(a)(7)(B) of OBRA–1990 is

19 amended by inserting ‘‘and to the Committee on Fi20 nance of the Senate’’ after ‘‘Representatives’’.

21 (7) SCREENING MAMMOGRAPHY (SECTION 4163

22 OF OBRA–1990).—Section 4163 of OBRA–1990 is

23 amended—

24 (A) by adding at the end of subsection (d)

25 the following new paragraph:
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1 ‘‘(3) The amendment made by paragraph

2 (2)(A)(iv) shall apply to screening pap smears per3 formed on or after July 1, 1990.’’; and

4 (B) in subsection (e), by striking ‘‘The

5 amendments’’ and inserting ‘‘Except as pro6 vided in subsection (d)(3), the amendments’’.

7 (8) INJECTABLE DRUGS FOR TREATMENT OF

8 OSTEOPOROSIS.—

9 (A) CLARIFICATION OF DRUGS COV10 ERED.—The section 1861(jj) (42 U.S.C.

11 1395x(jj)) inserted by section 4156(a)(2) of

12 OBRA–1990 is amended—

13 (i) in the matter preceding paragraph

14 (1), by striking ‘‘a bone fracture related

15 to’’; and

16 (ii) in paragraph (1), by striking ‘‘pa17 tient’’ and inserting ‘‘individual has suf18 fered a bone fracture related to post-meno19 pausal osteoporosis and that the individ20 ual’’.

21 (B) LIMITING COVERAGE TO DRUGS PRO22 VIDED BY HOME HEALTH AGENCIES.—(i) The

23 section 1861(jj) (42 U.S.C. 1395x(jj)) inserted

24 by section 4156(a)(2) of OBRA–1990 is
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1 amended by striking ‘‘if’’ and inserting ‘‘by a

2 home health agency if’’.

3 (ii) Section 1861(m)(5) (42 U.S.C.

4 1395x(m)(5)) is amended by striking ‘‘but ex5 cluding’’ and inserting ‘‘and a covered

6 osteoporosis drug (as defined in subsection

7 (kk), but excluding other’’.

8 (iii) Section 1861(s)(2) (42 U.S.C.

9 1395x(s)(2)) is amended—

10 (I) by adding ‘‘and’’ at the end of

11 subparagraph (N), and

12 (II) by striking subparagraph (O) and

13 redesignating subparagraph (P) as sub14 paragraph (O).

15 (C) PAYMENT BASED ON REASONABLE

16 COST.—Section 1833(a)(2) (42 U.S.C.

17 1395l(a)(2)) is amended—

18 (i) in subparagraph (A), by striking

19 ‘‘health services’’ and inserting ‘‘health

20 services (other than covered osteoporosis

21 drug (as defined in section 1861(kk)))’’;

22 (ii) by striking ‘‘and’’ at the end of

23 subparagraph (D);

24 (iii) by striking the semicolon at the

25 end and inserting ‘‘; and’’; and
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1 (iv) by adding at the end the following

2 new subparagraph:

3 ‘‘(F) with respect to covered osteoporosis

4 drug (as defined in section 1861(kk)) furnished

5 by a home health agency, 80 percent of the rea6 sonable cost of such service, as determined

7 under section 1861(v);’’.

8 (D) APPLICATION OF PART B DEDUCT9 IBLE.—Section 1833(b)(2) (42 U.S.C.

10 1395l(b)(2)) is amended by striking ‘‘services’’

11 and inserting ‘‘services (other than covered

12 osteoporosis drug (as defined in section

13 1861(kk)))’’.

14 (E) COVERED OSTEOPOROSIS DRUG (SEC15 TION 4156 OF OBRA–1990).—Section 1861 (42

16 U.S.C. 1395x) is amended, in the subsection

17 (jj) inserted by section 4156(a)(2) of OBRA–

18 1990, by striking ‘‘(jj) The term’’ and inserting

19 ‘‘(kk) The term’’.

20 (9) OTHER MISCELLANEOUS AND TECHNICAL

21 CORRECTIONS (SECTION 4164 OF OBRA–1990).—

22 (A) OWNERSHIP DISCLOSURE REQUIRE23 MENTS.—(i) Section 1124A(a)(2)(A) (42

24 U.S.C. 1320a–3a(a)(2)(A)) is amended by

25 striking ‘‘of the Social Security Act’’.
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1 (ii) Section 4164(b)(4) of OBRA–1990 is

2 amended by striking ‘‘paragraph’’ and inserting

3 ‘‘paragraphs’’.

4 (B) DIRECTORY OF UNIQUE PHYSICIAN

5 IDENTIFIER NUMBERS.—Section 4164(c) of

6 OBRA–1990 is amended by striking ‘‘publish’’

7 and inserting ‘‘publish, and shall periodically

8 update,’’.

9 (g) EFFECTIVE DATE.—Except as otherwise provided

10 in this section, the amendments made by this section shall

11 take effect as if included in the enactment of OBRA–1990.

12 Subchapter F—Part B Premium

13 SEC. 13481. PART B PREMIUM.

14 Section 1839(e) (42 U.S.C. 1395r(e)) is amended—

15 (1) in paragraph (1)(A), by inserting ‘‘and for

16 each month in 1996 and 1997’’ after ‘‘January

17 1991’’, and

18 (2) in paragraph (2), by striking ‘‘1991’’ and

19 inserting ‘‘1998’’.
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1 CHAPTER 3—PROVISIONS RELATING TO

2 PARTS A AND B

3 Subchapter A—Elimination of Updates

4 SEC. 13501. ELIMINATION OF COST-OF-LIVING UPDATE IN

5 PER RESIDENT AMOUNTS FOR DIRECT MEDI6 CAL EDUCATION.

7 Section 1886(h)(2)(D) (42 U.S.C. 1395ww(h)(2)(D))

8 is amended by inserting ‘‘(other than in the case of cost

9 reporting periods beginning during fiscal year 1994 or fis10 cal year 1995)’’ after ‘‘updated’’.

11 SEC. 13502. ELIMINATION OF INFLATION UPDATE IN COST

12 LIMITS FOR HOME HEALTH SERVICES.

13 The Secretary of Health and Human Services shall

14 not provide for any increase, on the basis of inflation or

15 changes in the cost of goods and services, in the per visit

16 cost limits for home health services under section

17 1861(v)(1)(L) of the Social Security Act for cost reporting

18 periods beginning during fiscal year 1994 or fiscal year

19 1995.

20 Subchapter B—Medicare Secondary Payer

21 Provisions

22 SEC. 13511. EXTENSION OF TRANSFER OF DATA.

23 (a) EXTENSION OF DATA MATCH PROGRAM.—
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1 (1) Section 1862(b)(5)(C)(iii) of the Social Se2 curity Act (42 U.S.C. 1395y(b)(5)(C)(iii)) is amend3 ed by striking ‘‘1995’’ and inserting ‘‘1998’’.

4 (2) Section 6103(l)(12)(F) of the Internal Rev5 enue Code of 1986 is amended—

6 (A) in clause (i), by striking ‘‘1995’’ and

7 inserting ‘‘1998’’,

8 (B) in clause (ii)(I), by striking ‘‘1994’’

9 and inserting ‘‘1997’’, and

10 (C) in clause (ii)(II), by striking ‘‘1995’’

11 and inserting ‘‘1998’’.

12 (b) SECONDARY PAYER EXEMPTION FOR MEMBERS

13 OF RELIGIOUS ORDERS.—Effective as if included in the

14 enactment of OBRA–1989, section 6202(e)(2) of such Act

15 is amended by adding at the end the following: ‘‘Such

16 amendment also shall apply to items and services fur17 nished before such date with respect to secondary payer

18 cases which the Secretary of Health and Human Services

19 had not identified as of such date.’’.

20 (c) PERMITTING THE USE OF MINIMUM INCOME

21 THRESHOLDS.—

22 (1) Section 6103(l)(12)(B)(i) of the Internal

23 Revenue Code of 1986 is amended by inserting ‘‘,

24 above an amount (if any) specified by the Secretary
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1 of Health and Human Services,’’ after ‘‘section

2 3401(a))’’.

3 (2) The matter in section 6103(l)(12)(B)(ii) of

4 such Code preceding subclause (I) is amended by in5 serting ‘‘, above an amount (if any) specified by the

6 Secretary of Health and Human Services,’’ after

7 ‘‘wages’’.

8 (3) The heading to section 6103(l)(12) of such

9 Code is amended by striking ‘‘TAXPAYER IDENTITY’’

10 and inserting ‘‘RETURN’’.

11 SEC. 13512. 3-YEAR EXTENSION OF MEDICARE SECONDARY

12 PAYER TO DISABLED BENEFICIARIES.

13 Section 1862(b)(1)(B)(iii) (42 U.S.C.

14 1395y(b)(1)(B)(iii)) is amended by striking ‘‘1995’’ and

15 inserting ‘‘1998’’.

16 SEC. 13513. 3-YEAR EXTENSION OF 18-MONTH RULE FOR

17 ESRD BENEFICIARIES.

18 Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is

19 amended by striking ‘‘1996’’ and inserting ‘‘1999’’.

20 SEC. 13514. MEDICARE SECONDARY PAYER REFORMS.

21 (a) IMPROVING IDENTIFICATION OF MEDICARE SEC22 ONDARY PAYER SITUATIONS.—

23 (1) SURVEY OF BENEFICIARIES.—
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1 (A) IN GENERAL.—Section 1862(b)(5) (42

2 U.S.C. 1395y(b)(5)) is amended by adding at

3 the end the following new subparagraph:

4 ‘‘(D) OBTAINING INFORMATION FROM

5 BENEFICIARIES.—Before an individual applies

6 for benefits under part A or enrolls under part

7 B, the Administrator shall mail the individual a

8 questionnaire to obtain information on whether

9 the individual is covered under a primary plan

10 and the nature of the coverage provided under

11 the plan, including the name, address, and iden12 tifying number of the plan.’’.

13 (B) DISTRIBUTION OF QUESTIONNAIRE BY

14 CONTRACTOR.—The Secretary of Health and

15 Human Services shall enter into an agreement

16 with an entity not later than November 1,

17 1993, to distribute the questionnaire described

18 in section 1862(b)(5)(D) of the Social Security

19 Act (as added by subparagraph (A)).

20 (C) NO MEDICARE SECONDARY PAYER DE21 NIAL BASED ON FAILURE TO COMPLETE QUES22 TIONNAIRE.—Section 1862(b)(2) (42 U.S.C.

23 1395y(b)(2)) is amended by adding at the end

24 the following new subparagraph:
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1 ‘‘(C) TREATMENT OF QUESTIONNAIRES.—

2 The Secretary may not fail to make payment

3 under subparagraph (A) solely on the ground

4 that an individual failed to complete a question5 naire concerning the existence of a primary

6 plan.’’.

7 (2) MANDATORY SCREENING BY PROVIDERS

8 AND SUPPLIERS UNDER PART B.—

9 (A) IN GENERAL.—Section 1862(b) (42

10 U.S.C. 1395y(b)) is amended by adding at the

11 end the following new paragraph:

12 ‘‘(6) SCREENING REQUIREMENTS FOR PROVID13 ERS AND SUPPLIERS.—

14 ‘‘(A) IN GENERAL.—Notwithstanding any

15 other provision of this title, no payment may be

16 made for any item or service furnished under

17 part B unless the entity furnishing such item or

18 service completes (to the best of its knowledge

19 and on the basis of information obtained from

20 the individual to whom the item or service is

21 furnished) the portion of the claim form relat22 ing to the availability of other health benefit

23 plans.

24 ‘‘(B) PENALTIES.—An entity that know25 ingly, willfully, and repeatedly fails to complete
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1 a claim form in accordance with subparagraph

2 (A) or provides inaccurate information relating

3 to the availability of other health benefit plans

4 on a claim form under such subparagraph shall

5 be subject to a civil money penalty of not to ex6 ceed $2,000 for each such incident. The provi7 sions of section 1128A (other than subsections

8 (a) and (b)) shall apply to a civil money penalty

9 under the previous sentence in the same man10 ner as such provisions apply to a penalty or

11 proceeding under section 1128A(a).’’.

12 (B) EFFECTIVE DATE.—The amendment

13 made by subparagraph (A) shall apply with re14 spect to items and services furnished on or

15 after January 1, 1994.

16 (b) IMPROVEMENTS IN RECOVERY OF PAYMENTS

17 FROM PRIMARY PAYERS.—

18 (1) SUBMISSION OF REPORTS ON EFFORTS TO

19 RECOVER ERRONEOUS PAYMENTS.—

20 (A) FISCAL INTERMEDIARIES UNDER PART

21 A.—Section 1816 (42 U.S.C. 1396h) is amend22 ed by adding at the end the following new sub23 section:

24 ‘‘(k) An agreement with an agency or organization

25 under this section shall require that such agency or orga-
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1 nization submit an annual report to the Secretary describ2 ing the steps taken to recover payments made for items

3 or services for which payment has been or could be made

4 under a primary plan (as defined in section

5 1862(b)(2)(A)).’’.

6 (B) CARRIERS UNDER PART B.—Section

7 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is

8 amended—

9 (i) by striking ‘‘and’’ at the end of

10 subparagraph (H); and

11 (ii) by inserting after subparagraph

12 (H) the following new subparagraph:

13 ‘‘(I) will submit annual reports to the Secretary

14 describing the steps taken to recover payments made

15 under this part for items or services for which pay16 ment has been or could be made under a primary

17 plan (as defined in section 1862(b)(2)(A)).’’.

18 (2) REQUIREMENTS UNDER CARRIER PERFORM19 ANCE EVALUATION PROGRAM.—

20 (A) FISCAL INTERMEDIARIES UNDER PART

21 A.—Section 1816(f)(1)(A) (42 U.S.C.

22 1396h(f)(1)(A)) is amended by striking ‘‘proc23 essing’’ and inserting ‘‘processing (including the

24 agency’s or organization’s success in recovering

25 payments made under this title for services for
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1 which payment has been or could be made

2 under a primary plan (as defined in section

3 1862(b)(2)(A)))’’.

4 (B) CARRIERS UNDER PART B.—Section

5 1842(b)(2) (42 U.S.C. 1395u(b)(2)) is amended

6 by adding at the end the following new sub7 paragraph:

8 ‘‘(D) In addition to any other standards and criteria

9 established by the Secretary for evaluating carrier per10 formance under this paragraph relating to avoiding erro11 neous payments, the Secretary shall establish standards

12 and criteria relating to the carrier’s success in recovering

13 payments made under this part for items or services for

14 which payment has been or could be made under a pri15 mary plan (as defined in section 1862(b)(2)(A)).’’.

16 (3) DEADLINE FOR REIMBURSEMENT BY PRI17 MARY PLANS.—

18 (A) IN GENERAL.—Section

19 1862(b)(2)(B)(i) (42 U.S.C. 1395y(b)(2)(B)(i))

20 is amended by adding at the end the following

21 sentence: ‘‘If reimbursement is not made to the

22 appropriate Trust Fund before the expiration of

23 the 60-day period that begins on the date such

24 notice or other information is received, the Sec25 retary may charge interest (beginning with the
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1 date on which the notice or other information

2 is received) on the amount of the reimburse3 ment until reimbursement is made (at a rate

4 determined by the Secretary in accordance with

5 regulations of the Secretary of the Treasury

6 applicable to charges for late payments).’’.

7 (B) CONFORMING AMENDMENT.—The

8 heading of clause (i) of section 1862(b)(2)(B) is

9 amended to read as follows: ‘‘REPAYMENT RE10 QUIRED.—’’.

11 (C) EFFECTIVE DATE.—The amendments

12 made by this paragraph shall apply to payments

13 for items and services furnished on or after the

14 date of the enactment of this Act.

15 (4) EFFECTIVE DATE.—The amendments made

16 by paragraphs (1) and (2) shall apply to contracts

17 with fiscal intermediaries and carriers under title

18 XVIII of the Social Security Act for years beginning

19 with 1994.

20 (c) APPLICATION OF AGGREGATION RULES.—

21 (1) WORKING AGED.—Section 1862(b)(1)(A)

22 (42 U.S.C. 1395y(b)(1)(A)) is amended by adding at

23 the end the following new clause:

24 ‘‘(vi) APPLICATION OF AGGREGATION

25 RULES.—All employers treated as a single
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1 employer under subsection (a) or (b) of

2 section 52 of the Internal Revenue Code of

3 1986 shall be treated as a single employer

4 for purposes of this subparagraph.’’.

5 (2) DISABLED INDIVIDUALS.—Section

6 5000(b)(2) of the Internal Revenue Code of 1986

7 (relating to large group health plans) is amended by

8 adding at the end the following: ‘‘All employers

9 treated as a single employer under subsection (a) or

10 (b) of section 52 shall be treated as a single em11 ployer for purposes of this paragraph.’’.

12 (3) EFFECTIVE DATE.—The amendments made

13 by this subsection shall take effect 90 days after the

14 date of the enactment of this Act.

15 (d) APPLICATION OF EXCISE TAX TO FAILURE TO

16 REIMBURSE FEDERAL GOVERNMENT.—

17 (1) IN GENERAL.—Section 5000(c) of the Inter18 nal Revenue Code of 1986 (relating to nonconform19 ing group health plans) is amended by striking ‘‘of

20 section 1862(b)(1)’’ and inserting ‘‘of paragraph (1),

21 or with the requirements of paragraph (2), of section

22 1862(b)’’.

23 (2) EFFECTIVE DATE.—The amendment made

24 by paragraph (1) shall apply to demands for repay-
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1 ment issued after the date of the enactment of this

2 Act.

3 (e) MISCELLANEOUS AND TECHNICAL CORREC4 TIONS.—

5 (1) The sentence in section 1862(b)(1)(C)

6 added by section 4203(c)(1)(B) of OBRA–1990 is

7 amended—

8 (A) by striking ‘‘on or before’’ and insert9 ing ‘‘before’’, and

10 (B) by striking ‘‘clauses (i) and (ii)’’ and

11 inserting ‘‘this subparagraph’’.

12 (2) Effective as if included in the enactment of

13 OBRA–1989, section 1862(b)(1) is amended—

14 (A) in subparagraphs (A)(v) and

15 (B)(iv)(II), by inserting ‘‘, without regard to

16 section 5000(d) of such Code’’ before the period

17 at the end of each subparagraph;

18 (B) in subparagraph (A)(iii), by striking

19 ‘‘current calendar year or the preceding cal20 endar year’’ and inserting ‘‘current calendar

21 year and the preceding calendar year’’; and

22 (C) in the matter in subparagraph (C)

23 after clause (ii), by striking ‘‘taking into ac24 count that’’ and inserting ‘‘paying benefits sec25 ondary to this title when’’.
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1 (3) Effective as if included in the enactment of

2 OBRA–1989, section 1862(b)(5)(C)(i) (42 U.S.C.

3 1395y(b)(5)(C)(i)) is amended by striking

4 ‘‘6103(l)(12)(D)(iii)’’ and inserting

5 ‘‘6103(l)(12)(E)(iii)’’.

6 (4) Section 4203(c)(2) of OBRA–1990 is

7 amended—

8 (A) by striking ‘‘the application of clause

9 (iii)’’ and inserting ‘‘the second sentence’’;

10 (B) by striking ‘‘on individuals’’ and all

11 that follows through ‘‘section 226A of such

12 Act’’;

13 (C) in clause (ii), by striking ‘‘clause’’ and

14 inserting ‘‘sentence’’;

15 (D) in clause (v), by adding ‘‘and’’ at the

16 end; and

17 (E) in clause (vi)—

18 (i) by inserting ‘‘of such Act’’ after

19 ‘‘1862(b)(1)(C)’’, and

20 (ii) by striking the period at the end

21 and inserting the following: ‘‘, without re22 gard to the number of employees covered

23 by such plans.’’.
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1 (5) Section 4203(d) of OBRA–1990 is amended

2 by striking ‘‘this subsection’’ and inserting ‘‘this

3 section’’.

4 (6) Except as provided in paragraphs (2) and

5 (3), the amendments made by this subsection shall

6 be effective as if included in the enactment of

7 OBRA–1990.

8 Subchapter C—Physician Ownership and

9 Referral

10 SEC. 13521. APPLICATION OF MEDICARE BAN ON SELF-RE11 FERRALS TO ALL PAYERS.

12 (a) IN GENERAL.—Section 1877 (42 U.S.C. 1395nn)

13 is amended—

14 (1) in subsection (a)—

15 (A) in paragraph (1)(A), by striking ‘‘for

16 which payment otherwise may be made under

17 this title’’ and inserting ‘‘for which a charge is

18 imposed’’, and

19 (B) in paragraph (1)(B), by striking

20 ‘‘under this title’’;

21 (2) by amending paragraph (1) of subsection

22 (g) to read as follows:

23 ‘‘(1) DENIAL OF PAYMENT.—No payment may

24 be made under this title, under another Federal

25 health care program, or under a State health care
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1 program (as defined in section 1128(h)) for a des2 ignated health service for which a claim is presented

3 in violation of subsection (a)(1)(B). No individual,

4 third party payer, or other entity is liable for pay5 ment for designated health services for which a

6 claim is presented in violation of such subsection.’’;

7 and

8 (3) in subsection (g)(3), by striking ‘‘for which

9 payment may not be made under paragraph (1)’’

10 and inserting ‘‘for which such a claim may not be

11 presented under subsection (a)(1)’’.

12 (b) CONFORMING AMENDMENT TO REPORTING RE13 QUIREMENT.—Section 1877(f) (42 U.S.C. 1395nn(f)) is

14 amended—

15 (1) by striking ‘‘for which payment may be

16 made under this title’’ each place it appears and in17 serting ‘‘for which a charge is imposed’’, and

18 (2) by striking the third sentence.

19 SEC. 13522. EXTENSION OF SELF-REFERRAL BAN TO ADDI20 TIONAL SPECIFIED SERVICES.

21 Section 1877 (42 U.S.C. 1395nn) is amended—

22 (1) by striking ‘‘clinical laboratory service’’,

23 ‘‘clinical laboratory services’’, and ‘‘CLINICAL LAB24 ORATORY SERVICES’’ and inserting ‘‘designated

25 health service’’, ‘‘designated health services’’, and
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1 ‘‘DESIGNATED HEALTH SERVICES’’, respectively,

2 each place each appears in subsections (a)(1),

3 (b)(2)(A)(ii), (b)(4), (d)(1), (d)(2), (d)(3), (f),

4 (g)(1), and (h)(7)(B); and

5 (2) by adding at the end the following new sub6 section:

7 ‘‘(i) DESIGNATED HEALTH SERVICES DEFINED.—In

8 this section, the term ‘designated health services’ means

9 any of the following items or services:

10 ‘‘(1) clinical laboratory services;

11 ‘‘(2) physical and occupational therapy services;

12 ‘‘(3) radiology services, including magnetic reso13 nance imaging, computerized axial tomography

14 scans, and ultrasound services;

15 ‘‘(4) radiation therapy services;

16 ‘‘(5) durable medical equipment;

17 ‘‘(6) parenteral and enteral nutrition equipment

18 and supplies;

19 ‘‘(7) prosthetic devices and orthotics and pros20 thetics;

21 ‘‘(8) outpatient prescription drugs;

22 ‘‘(9) home infusion therapy services, home dial23 ysis, and home health services;

24 ‘‘(10) ambulance services;

25 ‘‘(11) inpatient and outpatient hospital services;
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1 ‘‘(12) comprehensive outpatient rehabilitation

2 facility services;

3 ‘‘(13) contact lenses and eyeglasses; and

4 ‘‘(14) hearing aids.’’.

5 SEC. 13523. EXCEPTIONS FOR BOTH OWNERSHIP AND COM6 PENSATION ARRANGEMENTS.

7 (a) MODIFICATION TO EXCEPTION FOR IN-OFFICE

8 ANCILLARY SERVICES.—Section 1877(b)(2) (42 U.S.C.

9 1395nn(b)(2)) is amended—

10 (1) by inserting ‘‘(other than durable medical

11 equipment, parenteral and enteral nutrition equip12 ment and supplies, and ambulance services)’’ after

13 ‘‘services’’ the first place it appears, and

14 (2) in subparagraph (A)(ii)(II), by striking

15 ‘‘centralized provision’’ and inserting ‘‘provision of

16 some or all’’.

17 (b) MODIFICATION OF RURAL PROVIDER EXCEP18 TION.—

19 (1) IN GENERAL.—Section 1877(b) (42 U.S.C.

20 1395nn(b)) is amended—

21 (A) by redesignating paragraph (5) as

22 paragraph (6), and

23 (B) by inserting after paragraph (4) the

24 following new paragraph:
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1 ‘‘(5) RURAL PROVIDERS.—In the case of des2 ignated health services if—

3 ‘‘(A) the entity furnishing the services is in

4 a rural area (as defined in section

5 1886(d)(2)(D)), and

6 ‘‘(B) substantially all of the services (as

7 defined by the Secretary) furnished by the en8 tity are furnished to individuals who reside in

9 such a rural area.’’.

10 (2) CONFORMING AMENDMENTS.—Section

11 1877(d) (42 U.S.C. 1395nn(d)) is amended—

12 (A) by striking paragraph (2), and

13 (B) by redesignating paragraph (3) as

14 paragraph (2).

15 SEC. 13524. EXCEPTIONS RELATED ONLY TO OWNERSHIP

16 OR INVESTMENT.

17 (a) PUBLICLY-TRADED SECURITIES.—Section

18 1877(c)(2) (42 U.S.C. 1395nn(c)(2)) is amended by strik19 ing ‘‘total assets’’ and inserting ‘‘stockholder equity’’.

20 (b) RURAL PROVIDERS.—For amendment to excep21 tion relation to rural providers, see section 13523(b).

22 SEC. 13525. EXCEPTIONS RELATED ONLY TO COMPENSA23 TION ARRANGEMENTS.

24 (a) RENTAL OF OFFICE SPACE AND EQUIPMENT.—
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1 (1) IN GENERAL.—Paragraph (1) of section

2 1877(e) (42 U.S.C. 1395nn(e)) is amended to read

3 as follows:

4 ‘‘(1) RENTAL OF OFFICE SPACE; RENTAL OF

5 EQUIPMENT.—

6 ‘‘(A) OFFICE SPACE.—Payments made by

7 a lessee to a lessor for the use of premises if—

8 ‘‘(i) the lease is set out in writing,

9 signed by the parties, and specifies the

10 premises covered by the lease,

11 ‘‘(ii) the aggregate space rented or

12 leased does not exceed that which is rea13 sonable and necessary for the legitimate

14 business purposes of the lease or rental

15 and is used exclusively by the lessee when

16 being used by the lessee,

17 ‘‘(iii) the lease provides for a term of

18 rental or lease for at least one year,

19 ‘‘(iv) the aggregate rental charges

20 over the term of the lease are set in ad21 vance, are consistent with fair market

22 value, and are not determined in a manner

23 that takes into account the volume or value

24 of any referrals or other business gen25 erated between the parties,
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1 ‘‘(v) the lease would be commercially

2 reasonable even if no referrals were made

3 between the parties,

4 ‘‘(vi) the lease covers all of the prem5 ises leased between the parties for the

6 period of the lease, and

7 ‘‘(vii) the compensation arrangement

8 meets such other requirements as the Sec9 retary may impose by regulation as needed

10 to protect against program or patient

11 abuse.

12 ‘‘(B) EQUIPMENT.—Payments made by a

13 lessee of equipment to the lessor of the equip14 ment for the use of the equipment if—

15 ‘‘(i) the lease is set out in writing,

16 signed by the parties, and specifies the

17 equipment covered by the lease,

18 ‘‘(ii) the equipment rented or leased

19 does not exceed that which is reasonable

20 and necessary for the legitimate business

21 purposes of the lease or rental and is used

22 exclusively by the lessee when being used

23 by the lessee,

24 ‘‘(iii) the lease provides for a term of

25 rental or lease of at least one year,
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1 ‘‘(iv) the aggregate rental charges

2 over the term of the lease are set in ad3 vance, are consistent with fair market

4 value, and are not determined in a manner

5 that takes into account the volume or value

6 of any referrals or other business gen7 erated between the parties,

8 ‘‘(v) the lease would be commercially

9 reasonable even if no referrals were made

10 between the parties,

11 ‘‘(vi) the lease covers all of the equip12 ment leased between the parties for the

13 period of the lease, and

14 ‘‘(vii) the compensation arrangement

15 meets such other requirements as the Sec16 retary may impose by regulation as needed

17 to protect against program or patient

18 abuse.’’.

19 (2) CONFORMING AMENDMENT.—Section

20 1877(h) (42 U.S.C. 1395nn(h)) is amended by strik21 ing paragraphs (5) and (6).

22 (b) BONA FIDE EMPLOYMENT RELATIONSHIPS.—

23 Section 1877(e) (42 U.S.C. 1395nn(e)) is amended—

24 (1) in paragraph (2)—
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1 (A) by striking ‘‘EMPLOYMENT’’ and all

2 that follows through ‘‘if’’ and inserting ‘‘BONA

3 FIDE EMPLOYMENT RELATIONSHIPS.—Any

4 amount paid by an employer to a physician (or

5 immediate family member) who has a bona fide

6 employment relationship with the employer for

7 the provision of services if ’’;

8 (B) in subparagraphs (A), (B), and (D),

9 by striking ‘‘arrangement’’ and inserting ‘‘em10 ployment’’;

11 (C) in subparagraph (C), by striking ‘‘to

12 the hospital’’; and

13 (D) by adding at the end the following:

14 ‘‘Subparagraph (B)(ii) shall not be construed as pro15 hibiting the payment of remuneration in the form of

16 shares of overall profits or in the form of a produc17 tivity bonus based on services performed personally

18 by the physician or family member, if the amount of

19 the remuneration is not determined in a manner

20 that takes into account directly the volume or value

21 of any referrals by the referring physician.’’; and

22 (2) in paragraph (5)(A), by striking ‘‘in the

23 same manner as they apply to a hospital’’.

24 (c) PERSONAL SERVICE ARRANGEMENTS.—
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1 (1) IN GENERAL.—Paragraph (3) of section

2 1877(e) (42 U.S.C. 1395nn(e)) is amended to read

3 as follows:

4 ‘‘(3) PERSONAL SERVICE ARRANGEMENTS.—Re5 muneration from an entity under an arrangement

6 if—

7 ‘‘(A) the arrangement is set out in writing,

8 signed by the parties, and specifies the services

9 covered by the arrangement,

10 ‘‘(B) the arrangement covers all of the

11 services to be provided by the physician (or

12 family member) to the entity,

13 ‘‘(C) the aggregate services contracted for

14 do not exceed those that are reasonable and

15 necessary for the legitimate business purposes

16 of the arrangement,

17 ‘‘(D) the term of the arrangement is for at

18 least one year,

19 ‘‘(E) the compensation to be paid over the

20 term of the arrangement is set in advance, does

21 not exceed fair market value, and is not deter22 mined in a manner that takes into account di23 rectly or indirectly the volume or value of any

24 referrals or other business generated between

25 the parties,
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1 ‘‘(F) the services to be performed under

2 the arrangement do not involve the counseling

3 or promotion of a business arrangement or

4 other activity that violates any State or Federal

5 law, and

6 ‘‘(G) the arrangement meets such other re7 quirements as the Secretary may impose by reg8 ulation as needed to protect against program or

9 patient abuse.’’.

10 (2) HEALTH SERVICES FURNISHED UNDER

11 CERTAIN HOSPITAL ARRANGEMENTS.—Section

12 1877(e) (42 U.S.C. 1395nn(e)) is amended by add13 ing at the end the following new paragraph:

14 ‘‘(7) CERTAIN GROUP PRACTICE ARRANGE15 MENTS WITH A HOSPITAL.—

16 ‘‘(A) IN GENERAL.—An arrangement be17 tween a hospital and a group for the provision

18 of designated health services by the group but

19 billed in the name of the hospital if—

20 ‘‘(i) the group would be a group prac21 tice, but for the fact that it bills for such

22 services in the name of the hospital;

23 ‘‘(ii) with respect to services provided to an

24 inpatient of the hospital, the arrangement is
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1 pursuant to the provision of inpatient hospital

2 services under section 1861(b)(3);

3 ‘‘(iii) the arrangement began before De4 cember 19, 1989, and has continued in effect

5 without interruption since such date;

6 ‘‘(iv) the group provides substantially all of

7 the designated health services furnished under

8 the arrangement to the hospital’s patients;

9 ‘‘(v) the arrangement is pursuant to an

10 agreement that is set out in writing and that

11 specifies the services to be provided by the par12 ties and the compensation for services provided

13 under the agreement;

14 ‘‘(vi) the compensation paid over the term

15 of the agreement is consistent with fair market

16 value and the compensation per unit of services

17 is fixed in advance and is not determined in a

18 manner that takes into account the volume or

19 value of any referrals or other business gen20 erated between the parties;

21 ‘‘(vii) the compensation is provided pursu22 ant to an agreement which would be commer23 cially reasonable even if no referrals were made

24 to the entity; and
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1 ‘‘(viii) the arrangement between the parties

2 meets such other requirements as the Secretary

3 may impose by regulation as needed to protect

4 against program or patient abuse.’’.

5 (d) PHYSICIAN RECRUITMENT.—Section 1877(e)(4)

6 (42 U.S.C. 1395nn(e)(4)) is amended—

7 (1) by redesignating subparagraphs (A) through

8 (C) as subparagraph (B) through (D), and

9 (2) by inserting before subparagraph (B), as so

10 redesignated, the following new subparagraph:

11 ‘‘(A) the remuneration arrangement is set

12 out in writing, signed by the parties, and speci13 fies the benefits provided by the hospital, the

14 terms under which the benefits are to be pro15 vided, and the obligations of the parties,’’.

16 (e) ISOLATED TRANSACTIONS.—Section 1877(e)(5)

17 (42 U.S.C. 1395nn(e)(5)) is amended—

18 (1) by striking ‘‘ISOLATED’’ and inserting

19 ‘‘ONE-TIME’’,

20 (2) by striking ‘‘isolated’’ and inserting ‘‘one21 time’’, and

22 (3) by inserting ‘‘or practice’’ after ‘‘one-time

23 sale of property’’.

24 (f) NEW EXCEPTION FOR PAYMENTS BY PHYSI25 CIAN.—Section 1877(e) (42 U.S.C. 1395nn(e)), as amend-
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1 ed by subsection (c)(2), is further amended by adding at

2 the end the following new paragraph:

3 ‘‘(8) PAYMENTS BY A PHYSICIAN FOR ITEMS

4 AND SERVICES.—Payments made by a physician—

5 ‘‘(A) to a laboratory in exchange for the

6 provision of clinical laboratory services, or

7 ‘‘(B) to an entity as compensation for

8 other items or services if the items or services

9 are furnished at a price that is consistent with

10 fair market value.’’.

11 SEC. 13526. CLARIFICATION CONCERNING CIVIL MONEY

12 PENALTY SANCTIONS.

13 Section 1877(g)(3) (42 U.S.C. 1395nn(g)(3)) is

14 amended by inserting ‘‘(including a referring physician)’’

15 after ‘‘Any person’’.

16 SEC. 13527. REQUIREMENTS FOR GROUP PRACTICE.

17 (a) ADDITIONAL REQUIREMENTS.—Section

18 1877(h)(4) (42 U.S.C. 1395nn(h)(4)) is amended—

19 (1) by striking ‘‘and’’ at the end of subpara20 graph (C);

21 (2) by redesignating subparagraphs (A), (B),

22 (C), and (D) as clauses (i), (ii), (iii), and (vii),

23 respectively;

24 (3) by inserting ‘‘(A)’’ after ‘‘.—’’;
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1 (4) by inserting after clause (iii), as so redesig2 nated, the following:

3 ‘‘(iv) subject to subparagraph (B), no phy4 sician who is a member of the group receives

5 compensation based on the volume or value of

6 referrals by the physician;

7 ‘‘(v) there are no less than, on average, 5

8 physicians for each office location (as defined in

9 subparagraph (C)), except where there is only a

10 single office location for the entire group prac11 tice;

12 ‘‘(vi) members of the group personally con13 duct no less than 75 percent of the physician14 patient encounters of the group practice; and’’;

15 and

16 (5) by adding at the end the following new sub17 paragraphs:

18 ‘‘(B) A physician in a group practice may be

19 paid a share of overall profits of the group or a pro20 ductivity bonus (based on services personally per21 formed or personally supervised by the physician or

22 by another physician in the group) so long as the

23 share or bonus is not determined in any manner

24 which is directly related to the volume or value of

25 referrals by that physician.
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1 ‘‘(C)(i) Except as provided in clauses (ii)

2 through (iv), the term ‘office location’ means an of3 fice where physician services are offered to patients.

4 ‘‘(ii) Such term does not include a location con5 sisting solely of a diagnostic facility, nursing facility,

6 or treatment facility (such as a physical or occupa7 tional therapy center), or administrative services af8 filiated with the group practice.

9 ‘‘(iii) Any office location which is located imme10 diately adjacent to another office location shall be

11 treated as the same office location.

12 ‘‘(iv) The term ‘office location’ does not include

13 an office located in a rural area (as defined in sec14 tion 1886(d)(2)(D)) if at least 85 percent of the

15 physician services at the location are provided to in16 dividuals who reside in such a rural area.’’.

17 (b) USE OF BILLING NUMBERS, ETC.—Section 1877

18 (42 U.S.C. 1395nn) is amended—

19 (1) in subsection (b)(2)(B), by inserting ‘‘under

20 a billing number assigned to the group practice’’

21 after ‘‘member’’,

22 (2) in subsection (h)(4)(A)(ii), as redesignated

23 by subsection (a)(2), by inserting ‘‘and under a bill24 ing number assigned to the group’’ after ‘‘in the

25 name of the group’’, and
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1 (3) in subsection (h)(4)(A)(iii), as redesignated

2 by subsection (a)(2), by striking ‘‘by members of the

3 group’’.

4 (c) TREATMENT OF CERTAIN FACULTY PRACTICE

5 PLANS.—The last sentence of section 1877(h)(4)(A) (42

6 U.S.C. 1395nn(h)(4)(A)), as redesignated by subsection

7 (a)(2), is amended by inserting ‘‘, institution of higher

8 education, or medical school’’ after ‘‘hospital’’.

9 SEC. 13538. NO FEDERAL PREEMPTION OF MORE RESTRIC10 TIVE STATE LAWS.

11 Section 1877 (42 U.S.C. 1395nn), as amended by

12 section 13522(2), is amended by adding at the end the

13 following new subsection:

14 ‘‘(j) NO FEDERAL PREEMPTION OF MORE RESTRIC15 TIVE STATE LAWS.—Nothing in this section shall preempt

16 provisions of State law—

17 ‘‘(1) that relate to referrals not covered by this

18 section, or

19 ‘‘(2) that relate to referrals covered by this sec20 tion and are more restrictive with respect to such re21 ferrals than the provisions of this section.’’.

22 SEC. 13529. MISCELLANEOUS PROVISIONS.

23 (a) INDIRECT FINANCIAL RELATIONSHIPS.—The last

24 sentence of section 1877(a)(2) (42 U.S.C. 1395nn(a)(2))

25 is amended by inserting before the period the following:
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1 ‘‘and includes an interest in an entity that holds an owner2 ship or investment in another entity’’.

3 (b) MINOR REMUNERATION.—Section 1877(h)(1)

4 (42 U.S.C. 1395nn(h)(1)) is amended—

5 (1) in subparagraph (A), by inserting before the

6 period at the end the following: ‘‘(other than an ar7 rangement involving only remuneration described in

8 subparagraph (C))’’, and

9 (2) by adding at the end the following new sub10 paragraph:

11 ‘‘(C) Remuneration described in this subpara12 graph is any remuneration consisting of any of the

13 following:

14 ‘‘(i) The forgiveness of amounts owed for

15 inaccurate tests or procedures, mistakenly per16 formed tests or procedures, or the correction of

17 minor billing errors.

18 ‘‘(ii) The provision of items, devices, or

19 supplies that are used solely to—

20 ‘‘(I) collect, transport, process, or

21 store specimens for the entity providing

22 the item, device, or supply, or

23 ‘‘(II) communicate the results of tests

24 or procedures for such entity.’’.
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1 (c) REFERRING PHYSICIAN.—Section 1877(h)(7)(C)

2 (42 U.S.C. 1395nn(h)(7)(C)) is amended—

3 (1) by inserting ‘‘a request by a radiologist for

4 diagnostic radiology services, and a request by a ra5 diation oncologist for radiation therapy,’’ after ‘‘ex6 amination services,’’, and

7 (2) by inserting ‘‘, radiologist, or radiation

8 oncologist’’ after ‘‘pathologist’’ the second place it

9 appears.

10 (d) MISCELLANEOUS AND TECHNICAL CORREC11 TIONS.—Section 1877 (42 U.S.C. 1395nn) is further

12 amended—

13 (1) in the next to last sentence of subsection

14 (f)—

15 (A) by striking ‘‘provided’’ and inserting

16 ‘‘furnished’’, and

17 (B) by striking ‘‘provides’’ and inserting

18 ‘‘furnish’’;

19 (2) in the last sentence of subsection (f)—

20 (A) by striking ‘‘providing’’ each place it

21 appears and inserting ‘‘furnishing’’,

22 (B) by striking ‘‘with respect to the provid23 ers’’ and inserting ‘‘with respect to the enti24 ties’’, and
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1 (C) by striking ‘‘diagnostic imaging serv2 ices of any type’’ and inserting ‘‘magnetic reso3 nance imaging, computerized axial tomography

4 scans, and ultrasound services’’; and

5 (3) in subsection (a)(2)(B), by striking ‘‘sub6 section (h)(1)(A)’’ and inserting ‘‘subsection (h)(1)’’.

7 SEC. 13530. EFFECTIVE DATES.

8 (a) EXPANSION OF PAYERS AND SERVICES.—The

9 amendments made by sections 13521 and 13522 shall

10 apply with respect to a referral by a physician made on

11 or after December 31, 1994.

12 (b) OTHER PROVISIONS.—

13 (1) IN GENERAL.—Except as provided in this

14 subsection, the amendments made by sections 13523

15 through 13529 shall apply to referrals made on or

16 after January 1, 1992.

17 (2) DELAY IN EFFECTIVENESS FOR MORE RE18 STRICTIVE PROVISIONS.—The amendments made by

19 the following sections shall apply with respect to a

20 referral by a physician made on or after December

21 31, 1994:

22 (A) Section 13523(b) (relating to the rural

23 provider exception).

24 (B) Section 13524(a) (relating to publicly25 traded securities).
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1 (C)(i) Section 13525(a) (relating to an ex2 ception for office rental and equipment), other

3 than the exception relating to equipment.

4 (ii) Section 13525(c)(1) (relating to excep5 tion for personal services arrangements).

6 (iii) Section 13525(d) (relating to physi7 cian recruitment).

8 (D) Section 13526 (relating to civil money

9 penalty).

10 (E) Section 13527 (relating to require11 ments for group practices), other than sub12 section (c) (relating to faculty plans).

13 (F) Section 13528 (relating to non-pre14 emption).

15 (G) Section 13529(a) (relating to indirect

16 financial relationships).

17 Subchapter D—Other Provisions

18 SEC. 13551. DIRECT GRADUATE MEDICAL EDUCATION.

19 (a) ADJUSTMENT IN GME BASE-YEAR COSTS OF

20 FEDERAL INSURANCE CONTRIBUTIONS ACT.—

21 (1) IN GENERAL.—In determining the amount

22 of payment to be made under section 1886(h) of the

23 Social Security Act in the case of a hospital de24 scribed in paragraph (2) for cost reporting periods

25 beginning on or after October 1, 1992, the Secretary
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1 of Health and Human Services shall redetermine the

2 approved FTE resident amount to reflect the

3 amount that would have been paid the hospital if,

4 during the hospital’s base cost reporting period, the

5 hospital had been liable for FICA taxes or for con6 tributions to the retirement system of a State, a po7 litical subdivision of a State, or an instrumentality

8 of such a State or political subdivision with respect

9 to interns and residents in its medical residency

10 training program.

11 (2) HOSPITALS AFFECTED.—A hospital de12 scribed in this paragraph is a hospital that did not

13 pay FICA taxes with respect to interns and resi14 dents in its medical residency training program dur15 ing the hospital’s base cost reporting period, but is

16 required to pay FICA taxes or make contributions to

17 a retirement system described in paragraph (1) with

18 respect to such interns and residents because of the

19 amendments made by section 11332(b) of OBRA–

20 1990.

21 (3) DEFINITIONS.—In this subsection:

22 (A) The ‘‘base cost reporting period’’ for a

23 hospital is the hospital’s cost reporting period

24 that began during fiscal year 1984.
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1 (B) The term ‘‘FICA taxes’’ means, with

2 respect to a hospital, the taxes under section

3 3111 of the Internal Revenue Code of 1986.

4 (b) PUBLICLY-FUNDED FAMILY PRACTICE RESI5 DENCY PROGRAMS.—

6 (1) IN GENERAL.—Section 1886(h)(5) (42

7 U.S.C. 1395ww(h)(5)) is amended by adding at the

8 end the following new subparagraph:

9 ‘‘(I) ADJUSTMENTS FOR CERTAIN FAMILY

10 PRACTICE RESIDENCY PROGRAMS.—

11 ‘‘(i) IN GENERAL.—In the case of an

12 approved medical residency training pro13 gram (meeting the requirements of clause

14 (ii)) of a hospital which received payments

15 from the United States, a State, or a polit16 ical subdivision of a State or an instrumen17 tality of such a State or political subdivi18 sion (other than payments under this title

19 or a State plan under title XIX) for the

20 program during the cost reporting period

21 that began during fiscal year 1984, the

22 Secretary shall—

23 ‘‘(I) provide for an average

24 amount under paragraph (2)(A) that

25 takes into account the Secretary’s es-
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1 timate of the amount that would have

2 been recognized as reasonable under

3 this title if the hospital had not re4 ceived such payments, and

5 ‘‘(II) reduce the payment amount

6 otherwise provided under this sub7 section in an amount equal to the pro8 portion of such program payments

9 during the cost reporting period in10 volved that is allocable to this title.

11 ‘‘(ii) ADDITIONAL REQUIREMENTS.—

12 A hospital’s approved medical residency

13 program meets the requirements of this

14 clause if—

15 ‘‘(I) the program is limited to

16 training for family and community

17 medicine;

18 ‘‘(II) the program is the only ap19 proved medical residency program of

20 the hospital; and

21 ‘‘(III) the average amount deter22 mined under paragraph (2)(A) for the

23 hospital (as determined without re24 gard to the increase in such amount
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1 described in clause (i)(I)) does not ex2 ceed $10,000.’’.

3 (2) EFFECTIVE DATE.—The amendment made

4 by paragraph (1) shall apply to payments under sec5 tion 1886(h) of the Social Security Act for cost re6 porting periods beginning on or after October 1,

7 1990.

8 (c) PREVENTIVE CARE RESIDENCIES.—

9 (1) ELIGIBILITY OF PREVENTIVE CARE RESI10 DENCY PROGRAMS FOR EXPANDED INITIAL RESI11 DENCY PERIODS.—Section 1886(h)(5)(F)(ii) (42

12 U.S.C. 1395ww(h)(5)(F)(ii)) is amended by insert13 ing after ‘‘fellowship program’’ the following: ‘‘or a

14 preventive care residency or fellowship program’’.

15 (2) EFFECTIVE DATE.—The amendment made

16 by paragraph (1) shall apply to cost reporting

17 periods beginning on or after October 1, 1993.

18 SEC. 13552. IMMUNOSUPPRESSIVE DRUG THERAPY.

19 Section 1861(s)(2)(J) (42 U.S.C. 1395x(s)(2)(J)) is

20 amended by striking ‘‘title, within’’ and all that follows

21 and inserting the following: ‘‘title, but only in the case of

22 drugs furnished—

23 ‘‘(i) before 1994, within 12 months after

24 the date of the transplant procedure,
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1 ‘‘(ii) during 1994, within 18 months after

2 the date of the transplant procedure,

3 ‘‘(iii) during 1995, within 24 months after

4 the date of the transplant procedure,

5 ‘‘(iv) during 1996, within 30 months after

6 the date of the transplant procedure, and

7 ‘‘(v) during any year after 1997, within 36

8 months after the date of the transplant proce9 dure;’’.

10 SEC. 13553. REDUCTION IN PAYMENTS FOR

11 ERYTHROPOIENTIN.

12 (a) IN GENERAL.—Section 1881(b)(11)(B)(ii)(I) (42

13 U.S.C. 1395rr(b)(11)(B)(ii)(I)) is amended—

14 (1) by striking ‘‘1991’’ and inserting ‘‘1994’’;

15 and

16 (2) by striking ‘‘$11’’ and inserting ‘‘$10’’.

17 (b) EFFECTIVE DATE.—The amendments made by

18 subsection (a) shall apply to erythropoietin furnished on

19 or after January 1, 1994.

20 SEC. 13554. QUALIFIED MEDICARE BENEFICIARY OUT21 REACH.

22 The Secretary of Health and Human Services shall

23 establish and implement a method for obtaining informa24 tion from newly eligible medicare beneficiaries that may

25 be used to determine whether such beneficiaries may be
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1 eligible for medical assistance for medicare cost-sharing

2 under State medicaid plans as qualified medicare bene3 ficiaries, and for transmitting such information to the

4 State in which such a beneficiary resides.

5 SEC. 13555. EXTENSION OF SOCIAL HEALTH MAINTENANCE

6 ORGANIZATION DEMONSTRATIONS.

7 (a) EXTENSION OF CURRENT WAIVERS.—Section

8 4018(b) of OBRA–1987, as amended by section

9 4207(b)(4)(B) of OBRA–1990, is amended—

10 (1) in paragraph (1) by striking ‘‘December 31,

11 1995’’ and inserting ‘‘December 31, 1997’’; and

12 (2) in paragraph (4) by striking ‘‘March 31,

13 1996’’ and inserting ‘‘March 31, 1998’’.

14 (b) EXPANSION OF DEMONSTRATIONS.—Section

15 2355 of the Deficit Reduction Act of 1984 is amended—

16 (1) in the last sentence of subsection (a) by

17 striking ‘‘12 months’’ and inserting ‘‘36 months’’;

18 and

19 (2) in subsection (b)(1)(B)—

20 (A) by striking ‘‘or’’ at the end of clause

21 (iii); and

22 (B) by redesignating clause (iv) as clause

23 (v) and inserting after clause (iii) the following

24 new clause:
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1 ‘‘(iv) integrating acute and chronic

2 care management for patients with end3 stage renal disease through expanded com4 munity care case management services

5 (and for purposes of a demonstration

6 project conducted under this clause, any

7 requirement under a waiver granted under

8 this section that a project disenroll individ9 uals who develop end-stage renal disease

10 shall not apply); or’’.

11 (c) EXPANSION OF NUMBER OF MEMBERS PER

12 SITE.—The Secretary of Health and Human Services may

13 not impose a limit of less than 12,000 on the number of

14 individuals that may participate in a project conducted

15 under section 2355 of the Deficit Reduction Act of 1984.

16 (d) MISCELLANEOUS AND TECHNICAL CORREC17 TIONS.—

18 (1) The section following section 4206 of

19 OBRA–1990 is amended by striking ‘‘SEC. 4027.’’

20 and inserting ‘‘SEC. 4207.’’, and in this subtitle is

21 referred to as section 4207 of OBRA–1990.

22 (2) Section 2355(b)(1)(B) of the Deficit Reduc23 tion Act of 1984, as amended by section

24 4207(b)(4)(B)(ii) of OBRA–1990, is amended—
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1 (A) by striking ‘‘12907(c)(4)(A)’’ and in2 serting ‘‘4207(b)(4)(B)(i)’’, and

3 (B) by striking ‘‘feasibilitly’’ and inserting

4 ‘‘feasibility’’.

5 (3) Section 4207(b)(4)(B)(iii)(III) of OBRA–

6 1990 is amended by striking the period at the end

7 and inserting a semicolon.

8 (4) Subsections (c)(3) and (e) of section 2355

9 of the Deficit Reduction Act of 1984, as amended by

10 section 4207(b)(4)(B) of OBRA–1990, are each

11 amended by striking ‘‘12907(c)(4)(A)’’ each place it

12 appears and inserting ‘‘4207(b)(4)(B)’’.

13 (5) Section 4207(c)(2) of OBRA–1990 is

14 amended by striking ‘‘the Committee on Ways and

15 Means’’ each place it appears and inserting ‘‘the

16 Committees on Ways and Means and Energy and

17 Commerce’’.

18 (6) Section 4207(d) of OBRA–1990 is amended

19 by redesignating the second paragraph (3) (relating

20 to effective date) as paragraph (4).

21 (7) Section 4207(i)(2) of OBRA–1990 is

22 amended—

23 (A) by striking the period at the end of

24 clause (iii) and inserting a semicolon, and
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1 (B) in clause (v), by striking ‘‘residents’’

2 and inserting ‘‘patients’’.

3 (8) Section 4207(j) of OBRA–1990 is amended

4 by striking ‘‘title’’ each place it appears and insert5 ing ‘‘subtitle’’.

6 (e) EFFECTIVE DATE.—The amendments made by

7 this section shall take effect as if included in the enact8 ment of OBRA–90.

9 SEC. 13556. HOSPICE NOTIFICATION TO HOME HEALTH

10 BENEFICIARIES.

11 (a) IN GENERAL.—Section 1891(a)(1) (42 U.S.C.

12 1395bbb(a)(1)) is amended by adding at the end the fol13 lowing new subparagraph:

14 ‘‘(H) The right, in the case of a resident

15 who is entitled to benefits under this title, to be

16 fully informed orally and in writing (at the time

17 of coming under the care of the agency) of the

18 entitlement of individuals to hospice care under

19 section 1812(a)(4) (unless there is no hospice

20 program providing hospice care for which pay21 ment may be made under this title within the

22 geographic area of the facility and it is not the

23 common practice of the agency to refer patients

24 to hospice programs located outside such geo25 graphic area).’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to services furnished on or after

3 the first day of the first month beginning more than one

4 year after the date of the enactment of this Act.

5 SEC. 13557. INTEREST PAYMENTS.

6 (a) IN GENERAL.—Sections 1816(c)(2)(B)(ii)(IV)

7 and 1842(c)(2)(B)(ii)(IV) of the Social Security Act shall

8 be applied with respect to claims received in the 12-month

9 period beginning October 1, 1992, by substituting ‘‘30 cal10 endar days’’ for ‘‘24 calendar days’’ and ‘‘17 calendar

11 days’’.

12 (b) EFFECTIVE DATE.—Subsection (a) shall be in ef13 fect during the period that begins on the date of the enact14 ment of this Act and ends on September 30, 1993.

15 SEC. 13558. PEER REVIEW ORGANIZATIONS.

16 (a) REPEAL OF PRO PRECERTIFICATION REQUIRE17 MENT FOR CERTAIN SURGICAL PROCEDURES.—

18 (1) IN GENERAL.—Section 1164 (42 U.S.C.

19 1320c–13) is repealed.

20 (2) CONFORMING AMENDMENTS.—

21 (A) Section 1154 (42 U.S.C. 1320c–3) is

22 amended—

23 (i) in subsection (a), by striking para24 graph (12), and
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1 (ii) in subsection (d), by striking

2 ‘‘(and except as provided in section

3 1164)’’.

4 (B) Section 1833 (42 U.S.C. 1395l) is

5 amended—

6 (i) in subsection (a)(1)(D)(i), by strik7 ing ‘‘, or for tests furnished in connection

8 with obtaining a second opinion required

9 under section 1164(c)(2) (or a third opin10 ion, if the second opinion was in disagree11 ment with the first opinion)’’;

12 (ii) in subsection (a)(1), by striking

13 clause (G);

14 (iii) in subsection (a)(2)(A), by strik15 ing ‘‘, to items and services (other than

16 clinical diagnostic laboratory tests) fur17 nished in connection with obtaining a sec18 ond opinion required under section

19 1164(c)(2) (or a third opinion, if the sec20 ond opinion was in disagreement with the

21 first opinion),’’;

22 (iv) in subsection (a)(2)(D)(i)—

23 (I) by striking ‘‘basis,’’ and in24 serting ‘‘basis or’’, and
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1 (II) by striking ‘‘, or for tests

2 furnished in connection with obtaining

3 a second opinion required under sec4 tion 1164(c)(2) (or a third opinion, if

5 the second opinion was in disagree6 ment with the first opinion)’’;

7 (v) in subsection (a)(3), by striking

8 ‘‘and for items and services furnished in

9 connection with obtaining a second opinion

10 required under section 1164(c)(2), or a

11 third opinion, if the second opinion was in

12 disagreement with the first opinion)’’; and

13 (vi) in the first sentence of subsection

14 (b), by striking ‘‘(4)’’ and all that follows

15 through ‘‘and (5)’’ and inserting and (4)’’.

16 (C) Section 1834(g)(1)(B) (42 U.S.C.

17 1395m(g)(1)(B)) is amended by striking ‘‘and

18 for items and services furnished in connection

19 with obtaining a second opinion required under

20 section 1164(c)(2), or a third opinion, if the

21 second opinion was in disagreement with the

22 first opinion)’’.

23 (D) Section 1862(a) (42 U.S.C. 1395y(a))

24 is amended—
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1 (i) by adding ‘‘or’’ at the end of para2 graph (14),

3 (ii) by striking ‘‘; or’’ at the end of

4 paragraph (15) and inserting a period, and

5 (iii) by striking paragraph (16).

6 (E) The third sentence of section

7 1866(a)(2)(A) (42 U.S.C. 1395w(a)(2)(A)) is

8 amended by striking ‘‘, with respect to items

9 and services furnished in connection with ob10 taining a second opinion required under section

11 1164(c)(2) (or a third opinion, if the second

12 opinion was in disagreement with the first opin13 ion),’’.

14 (3) EFFECTIVE DATE.—The amendments made

15 by this subsection shall apply to services provided on

16 or after the date of the enactment of this Act.

17 (b) MISCELLANEOUS AND TECHNICAL CORREC18 TIONS.—(1) The third sentence of section 1156(b)(1) (42

19 U.S.C. 1320c–5(b)(1)) is amended by striking ‘‘whehter’’

20 and inserting ‘‘whether’’.

21 (2) Section 1154(a)(9)(B) (42 U.S.C. 1320c–

22 3(a)(9)(B)) is amended by striking ‘‘this subsection’’ and

23 inserting ‘‘section 1156(a)’’.
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1 (3) Section 4205(d)(2)(B) of OBRA–1990 is amend2 ed by striking ‘‘amendments’’ and inserting ‘‘amend3 ment’’.

4 (4) Section 1160(d) (42 U.S.C. 1320c–9(d)) is

5 amended by striking ‘‘subpena’’ and inserting ‘‘subpoena’’.

6 (5) Section 4205(e)(2) of OBRA–1990 is amended

7 by striking ‘‘amendments’’ and inserting ‘‘amendment’’

8 and by striking ‘‘all’’.

9 (6)(A) Except as provided in subparagraph (B), the

10 amendments made by this subsection shall take effect as

11 if included in the enactment of OBRA–1990.

12 (B) The amendment made by paragraph (2) (relating

13 to the requirement on reporting of information to State

14 licensing boards) shall take effect on the date of the enact15 ment of this Act.

16 SEC. 13559. HEALTH MAINTENANCE ORGANIZATIONS.

17 (a) ADJUSTMENT IN MEDICARE CAPITATION PAY18 MENTS TO ACCOUNT FOR REGIONAL VARIATIONS IN AP19 PLICATION OF SECONDARY PAYER PROVISIONS.—

20 (1) IN GENERAL.—Section 1876(a)(4) (42

21 U.S.C. 1395mm(a)(4)) is amended by adding at the

22 end the following new sentence: ‘‘In establishing the

23 adjusted average per capita cost for a geographic

24 area, the Secretary shall take into account the dif25 ferences between the proportion of individuals in the
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1 area with respect to whom there is a group health

2 plan that is a primary plan (within the meaning of

3 section 1862(b)(2)(A)) compared to the proportion

4 of all such individuals with respect to whom there is

5 such a group health plan.’’.

6 (2) EFFECTIVE DATE.—The amendment made

7 by paragraph (1) shall apply to contracts entered

8 into for years beginning with 1994.

9 (b) REVISIONS IN THE PAYMENT METHODOLOGY

10 FOR RISK CONTRACTORS.—Section 4204(b) of OBRA–

11 1990 is amended to read as follows:

12 ‘‘(b) REVISIONS IN THE PAYMENT METHODOLOGY

13 FOR RISK CONTRACTORS.—(1)(A) Not later than October

14 1, 1993, the Secretary of Health and Human Services (in

15 this subsection referred to as the ‘Secretary’) shall submit

16 a proposal to the Congress that provides for revisions to

17 the payment method to be applied in years beginning with

18 1995 for organizations with a risk-sharing contract under

19 section 1876(g) of the Social Security Act.

20 ‘‘(B) In proposing the revisions required under sub21 paragraph (A) the Secretary shall consider—

22 ‘‘(i) the difference in costs associated with med23 icare beneficiaries with differing health status and

24 demographic characteristics; and
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1 ‘‘(ii) the effects of using alternative geographic

2 classifications on the determinations of costs associ3 ated with beneficiaries residing in different areas.

4 ‘‘(2) Not later than 3 months after the date of sub5 mittal of the proposal under paragraph (1), the Comptrol6 ler General shall review the proposal and shall report to

7 Congress on the appropriateness of the proposed modifica8 tions.’’.

9 (c) MISCELLANEOUS AND TECHNICAL CORREC10 TIONS.—(1) Section 1876(a)(3) (42 U.S.C.

11 1395mm(a)(3)) is amended by striking ‘‘subsection

12 (c)(7)’’ and inserting ‘‘subsections (c)(2)(B)(ii) and

13 (c)(7)’’.

14 (2) Section 4204(c)(3) of OBRA–1990 is amended

15 by striking ‘‘for 1991’’ and inserting ‘‘for years beginning

16 with 1991’’.

17 (3) Section 4204(d)(2) of OBRA–1990 is amended

18 by striking ‘‘amendment’’ and inserting ‘‘amendments’’.

19 (4) Section 1876(a)(1)(E)(ii)(I) (42 U.S.C.

20 1395mm(a)(1)(E)(ii)(I)) is amended by striking the

21 comma after ‘‘contributed to’’.

22 (5) Section 4204(e)(2) of OBRA–1990 is amended

23 by striking ‘‘(which has a risk-sharing contract under sec24 tion 1876 of the Social Security Act)’’.
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1 (6) Section 4204(f)(4) of OBRA–1990 is amended by

2 striking ‘‘final’’.

3 (7) Section 1862(b)(3)(C) (42 U.S.C.

4 1395y(b)(3)(C)) is amended—

5 (A) in the heading, by striking ‘‘PLAN’’ and in6 serting ‘‘PLAN OR A LARGE GROUP HEALTH PLAN’’;

7 (B) by striking ‘‘group health plan’’ and insert8 ing ‘‘group health plan or a large group health

9 plan’’;

10 (C) by striking ‘‘, unless such incentive is also

11 offered to all individuals who are eligible for cov12 erage under the plan’’; and

13 (D) by striking ‘‘the first sentence of subsection

14 (a) and other than subsection (b)’’ and inserting

15 ‘‘subsections (a) and (b)’’.

16 (8) The amendments made by this subsection shall

17 take effect as if included in the enactment of OBRA–1990.

18 SEC. 13560. MEDICARE ADMINISTRATION BUDGET PROC19 ESS.

20 (a) ADJUSTMENTS.—Section 251(b)(2) of the Bal21 anced Budget and Emergency Deficit Control Act of 1985

22 is amended by redesignating subparagraphs (E) and (F)

23 as subparagraphs (F) and (G), respectively, and by insert24 ing after subparagraph (D) the following new subpara25 graph:
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1 ‘‘(E) MEDICARE ADMINISTRATIVE

2 COSTS.—To the extent that appropriations are

3 enacted that provide additional new budget au4 thority (as compared with a base level of

5 $1,526,000,000 for new budget authority) for

6 the administration of the Medicare program by

7 fiscal intermediaries and carriers pursuant to

8 sections 1816 and 1842(a) of title XVIII of the

9 Social Security Act, the adjustment for that

10 year shall be that amount, but shall not

11 exceed—

12 ‘‘(i) for fiscal year 1994,

13 $198,000,000 in new budget authority and

14 $198,000,000 in outlays; and

15 ‘‘(ii) for fiscal year 1995,

16 $220,000,000 in new budget authority and

17 $220,000,000 in outlays; and

18 the prior-year outlays resulting from these appro19 priations of budget authority and additional adjust20 ments equal to the sum of the maximum adjust21 ments that could have been made in preceding fiscal

22 years under this subparagraph.’’.

23 (b) CONFORMING AMENDMENTS.—

24 (1) Section 603(a) of the Congressional Budget

25 Act of 1974 is amended by striking ‘‘section
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1 251(b)(2)(E)(i)’’ and inserting ‘‘section

2 251(b)(2)(F)(i)’’.

3 (2) Section 606(d) of the Congressional Budget

4 Act of 1974 is amended—

5 (A) in paragraph (1)(A) by striking ‘‘sec6 tion 251(b)(2)(E)(i)’’ and inserting ‘‘section

7 251(b)(2)(F)(i)’’; and

8 (B) in paragraph (2), by inserting

9 ‘‘251(b)(2)(E),’’ after ‘‘251(b)(2)(D),’’.

10 SEC. 13561. OTHER PROVISIONS.

11 (a) SURVEY AND CERTIFICATION REQUIREMENTS.—

12 (1) Section 1864 (42 U.S.C. 1395aa) is amended—

13 (A) in subsection (e), by striking ‘‘title’’ and in14 serting ‘‘title (other than any fee relating to section

15 353 of the Public Health Service Act)’’; and

16 (B) in the first sentence of subsection (a), by

17 striking ‘‘1861(s) or’’ and all that follows through

18 ‘‘Service Act,’’ and inserting ‘‘1861(s),’’.

19 (2) An agreement made by the Secretary of Health

20 and Human Services with a State under section 1864(a)

21 of the Social Security Act may include an agreement that

22 the services of the State health agency or other appro23 priate State agency (or the appropriate local agencies) will

24 be utilized by the Secretary for the purpose of determining
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1 whether a laboratory meets the requirements of section

2 353 of the Public Health Service Act.

3 (b) HOME DIALYSIS DEMONSTRATION TECHNICAL

4 CORRECTION.—Section 4202 of OBRA–1990 is

5 amended—

6 (1) in subsection (b)(1)(A), by striking ‘‘home

7 hemodialysis staff assistant’’ and inserting ‘‘quali8 fied home hemodialysis staff assistant (as described

9 in subsection (d))’’;

10 (2) in subsection (b)(2)(B)(ii)(I), by striking

11 ‘‘(as adjusted to reflect differences in area wage

12 levels);

13 (3) in subsection (c)(1)(A), by striking

14 ‘‘skilled’’; and

15 (4) in subsection (c)(1)(E), by striking ‘‘(b)(4)’’

16 and inserting ‘‘(b)(2)’’.

17 (c) OTHER TECHNICAL AMENDMENTS.—(1) Section

18 1833 (42 U.S.C. 1395l) is amended by redesignating the

19 subsection (r) added by section 4206(b)(2) of OBRA–

20 1990 as subsection (s).

21 (2) Section 1866(f)(1) (42 U.S.C. 1395cc(f)(1)) is

22 amended by striking ‘‘1833(r)’’ and inserting ‘‘1833(s)’’.

23 (3) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is

24 amended by moving subparagraph (O), as redesignated by
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1 section 13478(f)(8)(B)(iii)(II) of this title, two ems to the

2 left.

3 (4) Section 1881(b)(1)(C) (42 U.S.C.

4 1395rr(b)(1)(C)) is amended by striking ‘‘1861(s)(2)(Q)’’

5 and inserting ‘‘1861(s)(2)(P)’’.

6 (5) Section 4201(d)(2) of OBRA–1990 is amended

7 by striking ‘‘(B) by striking’’, ‘‘(C) by striking’’, and ‘‘(3)

8 by adding’’ and inserting ‘‘(i) by striking’’, ‘‘(ii) by strik9 ing’’, and ‘‘(B) by adding’’, respectively.

10 (6)(A) Section 4207(a)(1) of OBRA–1990 is amend11 ed by adding closing quotation marks and a period after

12 ‘‘such review.’’.

13 (B) Section 4207(a)(4) of OBRA–1990 is amended

14 by striking ‘‘this subsection’’ and inserting ‘‘paragraphs

15 (2) and (3)’’.

16 (C) Section 4207(b)(1) of OBRA–1990 is amended

17 by striking ‘‘section 3(7)’’ and inserting ‘‘section

18 601(a)(1)’’.

19 (d) EFFECTIVE DATE.—The amendments made by

20 this section shall take effect as if included in the enact21 ment of OBRA–1990.
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1 CHAPTER 4—MEDICARE SUPPLEMENTAL

2 INSURANCE POLICIES

3 SEC. 13571. STANDARDS FOR MEDICARE SUPPLEMENTAL

4 INSURANCE POLICIES.

5 (a) SIMPLIFICATION OF MEDICARE SUPPLEMENTAL

6 POLICIES.—

7 (1) Section 4351 of OBRA–1990 is amended by

8 striking ‘‘(a) IN GENERAL.—’’.

9 (2) Section 1882(p) (42 U.S.C. 1395ss(p)) is

10 amended—

11 (A) in paragraph (1)(A)—

12 (i) by striking ‘‘promulgates’’ and in13 serting ‘‘changes the revised NAIC Model

14 Regulation (described in subsection (m)) to

15 incorporate’’,

16 (ii) by striking ‘‘(such limitations, lan17 guage, definitions, format, and standards

18 referred to collectively in this subsection as

19 ‘NAIC standards’),’, and

20 (iii) by striking ‘‘included a reference

21 to the NAIC standards’’ and inserting

22 ‘‘were a reference to the revised NAIC

23 Model Regulation as changed under this

24 subparagraph (such changed regulation re-
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1 ferred to in this section as the ‘1991 NAIC

2 Model Regulation’)’’;

3 (B) in paragraph (1)(B)—

4 (i) by striking ‘‘promulgate NAIC

5 standards’’ and inserting ‘‘make the

6 changes in the revised NAIC Model Regu7 lation’’,

8 (ii) by striking ‘‘limitations, language,

9 definitions, format, and standards de10 scribed in clauses (i) through (iv) of such

11 subparagraph (in this subsection referred

12 to collectively as ‘Federal standards’)’’ and

13 inserting ‘‘a regulation’’, and

14 (iii) by striking ‘‘included a reference

15 to the Federal standards’’ and inserting

16 ‘‘were a reference to the revised NAIC

17 Model Regulation as changed by the Sec18 retary under this subparagraph (such

19 changed regulation referred to in this sec20 tion as the ‘1991 Federal Regulation’)’’;

21 (C) in paragraph (1)(C)(i), by striking

22 ‘‘NAIC standards or the Federal standards’’

23 and inserting ‘‘1991 NAIC Model Regulation or

24 1991 Federal Regulation’’;
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1 (D) in paragraphs (1)(C)(ii)(I), (1)(E),

2 (2), and (9)(B), by striking ‘‘NAIC or Federal

3 standards’’ and inserting ‘‘1991 NAIC Model

4 Regulation or 1991 Federal Regulation’’;

5 (E) in paragraph (2)(C), by striking

6 ‘‘(5)(B)’’ and inserting ‘‘(4)(B)’’;

7 (F) in paragraph (4)(A)(i), by inserting

8 ‘‘or paragraph (6)’’ after ‘‘(B)’’;

9 (G) in paragraph (4), by striking ‘‘applica10 ble standards’’ each place it appears and insert11 ing ‘‘applicable 1991 NAIC Model Regulation

12 or 1991 Federal Regulation’’;

13 (H) in paragraph (6), by striking ‘‘in re14 gard to the limitation of benefits described in

15 paragraph (4)’’ and inserting ‘‘described in

16 clauses (i) through (iii) of paragraph (1)(A)’’;

17 (I) in paragraph (7), by striking ‘‘policy18 holder’’ and inserting ‘‘policyholders’’;

19 (J) in paragraph (8), by striking ‘‘after the

20 effective date of the NAIC or Federal standards

21 with respect to the policy, in violation of the

22 previous requirements of this subsection’’ and

23 inserting ‘‘on and after the effective date speci24 fied in paragraph (1)(C) (but subject to para25 graph (10)), in violation of the applicable 1991
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1 NAIC Model Regulation or 1991 Federal Regu2 lation insofar as such regulation relates to the

3 requirements of subsection (o) or (q) or clause

4 (i), (ii), or (iii) of paragraph (1)(A)’’;

5 (K) in paragraph (9), by adding at the end

6 the following new subparagraph:

7 ‘‘(D) Subject to paragraph (10), this paragraph shall

8 apply to sales of policies occurring on or after the effective

9 date specified in paragraph (1)(C).’’; and

10 (L) in paragraph (10), by striking ‘‘this

11 subsection’’ and inserting ‘‘paragraph

12 (1)(A)(i)’’.

13 (b) GUARANTEED RENEWABILITY.—Section 1882(q)

14 (42 U.S.C. 1395ss(q)) is amended—

15 (1) in paragraph (2), by striking ‘‘paragraph

16 (2)’’ and inserting ‘‘paragraph (4)’’, and

17 (2) in paragraph (4), by striking ‘‘the succeed18 ing issuer’’ and inserting ‘‘issuer of the replacement

19 policy’’.

20 (c) ENFORCEMENT OF STANDARDS.—

21 (1) Section 1882(a)(2) (42 U.S.C.

22 1395ss(a)(2)) is amended—

23 (A) in subparagraph (A), by striking

24 ‘‘NAIC standards or the Federal standards’’
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1 and inserting ‘‘1991 NAIC Model Regulation or

2 1991 Federal Regulation’’, and

3 (B) by striking ‘‘after the effective date of

4 the NAIC or Federal standards with respect to

5 the policy’’ and inserting ‘‘on and after the ef6 fective date specified in subsection (p)(1)(C)’’.

7 (2) The sentence in section 1882(b)(1) added

8 by section 4353(c)(5) of OBRA–1990 is amended—

9 (A) by striking ‘‘The report’’ and inserting

10 ‘‘Each report’’,

11 (B) by inserting ‘‘and requirements’’ after

12 ‘‘standards’’,

13 (C) by striking ‘‘and’’ after ‘‘compliance,’’,

14 and

15 (D) by striking the comma after ‘‘Commis16 sioners’’.

17 (3) Section 1882(g)(2)(B) (42 U.S.C.

18 1395ss(g)(2)(B)) is amended by striking ‘‘Panel’’

19 and inserting ‘‘Secretary’’.

20 (4) Section 1882(b)(1) (42 U.S.C.

21 1395ss(b)(1)) is amended by striking ‘‘the the Sec22 retary’’ and inserting ‘‘the Secretary’’.

23 (d) PREVENTING DUPLICATION.—

24 (1) Section 1882(d)(3)(A) (42 U.S.C.

25 1395ss(d)(3)(A)) is amended—
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1 (A) by amending the first sentence to read

2 as follows:

3 ‘‘(i) It is unlawful for a person to sell or issue to an

4 individual entitled to benefits under part A or enrolled

5 under part B of this title—

6 ‘‘(I) a health insurance policy with knowledge

7 that the policy duplicates health benefits to which

8 the individual is otherwise entitled under this title or

9 title XIX,

10 ‘‘(II) a medicare supplemental policy with

11 knowledge that the individual is entitled to benefits

12 under another medicare supplemental policy, or

13 ‘‘(III) a health insurance policy (other than a

14 medicare supplemental policy) with knowledge that

15 the policy duplicates health benefits to which the in16 dividual is otherwise entitled, other than benefits to

17 which the individual is entitled under a requirement

18 of State or Federal law.’’;

19 (B) by designating the second sentence as

20 clause (ii) and, in such clause, by striking ‘‘the

21 previous sentence’’ and inserting ‘‘clause (i)’’;

22 (C) by designating the third sentence as

23 clause (iii) and, in such clause—

24 (i) by striking ‘‘the previous sentence’’

25 and inserting ‘‘clause (i) with respect to
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1 the sale of a medicare supplemental pol2 icy’’, and

3 (ii) by striking ‘‘and the statement’’

4 and all that follows up to the period at the

5 end; and

6 (D) by striking the last sentence.

7 (2) Section 1882(d)(3)(B) (42 U.S.C.

8 1395ss(d)(3)(B)) is amended—

9 (A) in clause (ii)(II), by striking ‘‘65 years

10 of age or older’’,

11 (B) in clause (iii)(I), by striking ‘‘another

12 medicare’’ and inserting ‘‘a medicare’’,

13 (C) in clause (iii)(I), by striking ‘‘such a

14 policy’’ and inserting ‘‘a medicare supplemental

15 policy’’,

16 (D) in clause (iii)(II), by striking ‘‘another

17 policy’’ and inserting ‘‘a medicare supplemental

18 policy’’, and

19 (E) by amending subclause (III) of clause

20 (iii) to read as follows:

21 ‘‘(III) If the statement required by clause (i) is ob22 tained and indicates that the individual is entitled to any

23 medical assistance under title XIX, the sale of the policy

24 is not in violation of clause (i) (insofar as such clause re25 lates to such medical assistance), if a State medicaid plan
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1 under such title pays the premiums for the policy, or, in

2 the case of a qualified medicare beneficiary described in

3 section 1905(p)(1), if the State pays less than the full

4 amount of medicare cost-sharing as described in subpara5 graphs (B), (C), and (D) of section 1905(p)(3) for such

6 individual.’’.

7 (3)(A) Section 1882(d)(3)(C) (42 U.S.C.

8 1395ss(d)(3)(C)) is amended—

9 (i) by striking ‘‘the selling’’ and inserting

10 ‘‘(i) the sale or issuance’’, and

11 (ii) by inserting before the period at the

12 end the following: ‘‘, (ii) the sale or issuance of

13 a policy or plan described in subparagraph

14 (A)(i)(I) (other than a medicare supplemental

15 policy to an individual entitled to any medical

16 assistance under title XIX) under which all the

17 benefits are fully payable directly to or on be18 half of the individual without regard to other

19 health benefit coverage of the individual but

20 only if (for policies sold or issued more than 60

21 days after the date the statements are pub22 lished or promulgated under subparagraph (D))

23 there is disclosed in a prominent manner as

24 part of (or together with) the application the

25 applicable statement (specified under subpara-
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1 graph (D)) of the extent to which benefits pay2 able under the policy or plan duplicate benefits

3 under this title, or (iii) the sale or issuance of

4 a policy or plan described in subparagraph

5 (A)(i)(III) under which all the benefits are fully

6 payable directly to or on behalf of the individual

7 without regard to other health benefit coverage

8 of the individual’’.

9 (B) Section 1882(d)(3) (42 U.S.C.

10 1395ss(d)(3)) is amended by adding at the end the

11 following:

12 ‘‘(D)(i) If—

13 ‘‘(I) within the 90-day period beginning on the

14 date of the enactment of this subparagraph, the Na15 tional Association of Insurance Commissioners devel16 ops (after consultation with consumer and insurance

17 industry representatives) and submits to the Sec18 retary a statement for each of the types of health in19 surance policies (other than medicare supplemental

20 policies and including, as separate types of policies,

21 policies paying directly to the beneficiary fixed, cash

22 benefits) which are sold to persons entitled to health

23 benefits under this title, of the extent to which bene24 fits payable under the policy or plan duplicate bene25 fits under this title, and
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1 ‘‘(II) the Secretary approves all the statements

2 submitted as meeting the requirements of subclause

3 (I),

4 each such statement shall be (for purposes of subpara5 graph (C)) the statement specified under this subpara6 graph for the type of policy involved. The Secretary shall

7 review and approve (or disapprove) all the statements sub8 mitted under subclause (I) within 30 days after the date

9 of their submittal. Upon approval of such statements, the

10 Secretary shall publish such statements.

11 ‘‘(ii) If the Secretary does not approve the statements

12 under clause (i) or the statements are not submitted with13 in the 90-day period specified in such clause, the Secretary

14 shall promulgate (after consultation with consumer and

15 insurance industry representatives and not later than 90

16 days after the date of disapproval or the end of such 90-

17 day period (as the case may be)) a statement for each

18 of the types of health insurance policies (other than medi19 care supplemental policies and including, as separate types

20 of policies, policies paying directly to the beneficiary fixed,

21 cash benefits) which are sold to persons entitled to health

22 benefits under this title, of the extent to which benefits

23 payable under the policy or plan duplicate benefits under

24 this title, and each such statement shall be (for purposes
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1 of subparagraph (C)) the statement specified under this

2 subparagraph for the type of policy involved.’’.

3 (C) The requirement of a disclosure under sec4 tion 1882(d)(3)(C)(ii) of the Social Security Act

5 shall not apply to an application made for a policy

6 or plan before 60 days after the date of the Sec7 retary of Health and Human Services publishes or

8 promulgates all the statements under section

9 1882(d)(3)(D) of such Act.

10 (4) Subparagraphs (A) and (B) of section

11 1882(q)(5) are amended by striking ‘‘of the Social

12 Security Act’’.

13 (e) LOSS RATIOS AND REFUNDS OF PREMIUMS.—

14 (1) Section 1882(r) (42 U.S.C. 1395ss(r)) is

15 amended—

16 (A) in paragraph (1), by striking ‘‘or sold’’

17 and inserting ‘‘or renewed (or otherwise provide

18 coverage after the date described in subsection

19 (p)(1)(C))’’;

20 (B) in paragraph (1)(A), by inserting ‘‘for

21 periods after the effective date of these provi22 sions’’ after ‘‘the policy can be expected’’;

23 (C) in paragraph (1)(A), by striking

24 ‘‘Commissioners,’’ and inserting ‘‘Commis25 sioners)’’;
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1 (D) in paragraph (1)(B), by inserting be2 fore the period at the end the following: ‘‘,

3 treating policies of the same type as a single

4 policy for each standard package’’;

5 (E) by adding at the end of paragraph (1)

6 the following: ‘‘For the purpose of calculating

7 the refund or credit required under paragraph

8 (1)(B) for a policy issued before the date speci9 fied in subsection (p)(1)(C), the refund or cred10 it calculation shall be based on the aggregate

11 benefits provided and premiums collected under

12 all such policies issued by an insurer in a State

13 (separated as to individual and group policies)

14 and shall be based only on aggregate benefits

15 provided and premiums collected under such

16 policies after the date specified in section

17 13571(m)(4) of the Omnibus Budget Reconcili18 ation Act of 1993.’’;

19 (F) in the first sentence of paragraph

20 (2)(A), by striking ‘‘by policy number’’ and in21 serting ‘‘by standard package’’;

22 (G) by striking the second sentence of

23 paragraph (2)(A) and inserting the following:

24 ‘‘Paragraph (1)(B) shall not apply to a policy

25 until 12 months following issue.’’;
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1 (H) in the last sentence of paragraph

2 (2)(A), by striking ‘‘in order’’ and all that fol3 lows through ‘‘are effective’’;

4 (I) by adding at the end of paragraph

5 (2)(A), the following new sentence: ‘‘In the case

6 of a policy issued before the date specified in

7 subsection (p)(1)(C), paragraph (1)(B) shall

8 not apply until 1 year after the date specified

9 in section 13571(m)(4) of the Omnibus Budget

10 Reconciliation Act of 1993.’’;

11 (J) in paragraph (2), by striking ‘‘policy

12 year’’ each place it appears and inserting ‘‘cal13 endar year’’;

14 (K) in paragraph (4), by striking ‘‘Feb15 ruary’’, ‘‘disllowance’’, ‘‘loss-ratios’’ each place

16 it appears, and ‘‘loss-ratio’’ and inserting ‘‘Oc17 tober’’, ‘‘disallowance’’, ‘‘loss ratios’’, and ‘‘loss

18 ratio’’, respectively;

19 (L) in paragraph (6)(A), by striking ‘‘is20 sues a policy in violation of the loss ratio re21 quirements of this subsection’’ and ‘‘such viola22 tion’’ and inserting ‘‘fails to provide refunds or

23 credits as required in paragraph (1)(B)’’ and

24 ‘‘policy issued for which such failure occurred’’,

25 respectively; and
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1 (M) in paragraph (6)(B), by striking ‘‘to

2 policyholders’’ and inserting ‘‘to the policy3 holder or, in the case of a group policy, to the

4 certificate holder’’.

5 (2) Section 1882(b)(1) (42 U.S.C.

6 1395ss(b)(1)) is amended, in the matter after sub7 paragraph (H), by striking ‘‘subsection (F)’’ and in8 serting ‘‘subparagraph (F)’’.

9 (3) Section 4355(d) of OBRA–1990 is amended

10 by striking ‘‘sold or issued’’ and all that follows and

11 inserting ‘‘issued or renewed (or otherwise providing

12 coverage after the date described in section

13 1882(p)(1)(C) of the Social Security Act) on or after

14 the date specified in section 1882(p)(1)(C) of such

15 Act.’’.

16 (f) TREATMENT OF HMO’S.—

17 (1) Section 1882(g)(1) (42 U.S.C.

18 1395ss(g)(1)) is amended by striking ‘‘a health

19 maintenance organization or other direct service or20 ganization’’ and all that follows through ‘‘1833’’ and

21 inserting ‘‘an eligible organization (as defined in sec22 tion 1876(b)) if the policy or plan provides benefits

23 pursuant to a contract under section 1876 or an ap24 proved demonstration project described in section

25 603(c) of the Social Security Amendments of 1983,
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1 section 2355 of the Deficit Reduction Act of 1984,

2 or section 9412(b) of the Omnibus Budget Reconcili3 ation Act of 1986 or, during the period beginning on

4 the date specified in subsection (p)(1)(C) and ending

5 on December 31, 1994, a policy or plan of an orga6 nization if the policy or plan provides benefits pursu7 ant to an agreement under section 1833(a)(1)(A)’’.

8 (2) Section 4356(b) of OBRA–1990 is amended

9 by striking ‘‘on the date of the enactment of this

10 Act’’ and inserting ‘‘on the date specified in section

11 1882(p)(1)(C) of the Social Security Act’’.

12 (g) PRE-EXISTING CONDITION LIMITATIONS.—Sec13 tion 1882(s) (42 U.S.C. 1395ss(s)) is amended—

14 (1) in paragraph (2)(A), by striking ‘‘for which

15 an application is submitted’’ and inserting ‘‘in the

16 case of an individual for whom an application is sub17 mitted prior to or’’,

18 (2) in paragraph (2)(A), by striking ‘‘in which

19 the individual (who is 65 years of age or older) first

20 is enrolled for benefits under part B’’ and inserting

21 ‘‘as of the first day on which the individual is 65

22 years of age or older and is enrolled for benefits

23 under part B’’, and

24 (3) in paragraph (2)(B), by striking ‘‘before it’’

25 and inserting ‘‘before the policy’’.
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1 (h) MEDICARE SELECT POLICIES.—

2 (1) Section 1882(t) (42 U.S.C. 1395ss(t)) is

3 amended—

4 (A) in paragraph (1), by inserting ‘‘medi5 care supplemental’’ after ‘‘If a’’,

6 (B) in paragraph (1), by striking ‘‘NAIC

7 Model Standards’’ and inserting ‘‘1991 NAIC

8 Model Regulation or 1991 Federal Regulation’’,

9 (C) in paragraph (1)(A), by inserting ‘‘or

10 agreements’’ after ‘‘contracts’’,

11 (D) in subparagraphs (E)(i) and (F) of

12 paragraph (1), by striking ‘‘NAIC standards’’

13 and inserting ‘‘standards in the 1991 NAIC

14 Model Regulation or 1991 Federal Regulation’’,

15 and

16 (E) in paragraph (2), by inserting ‘‘the is17 suer’’ before ‘‘is subject to a civil money pen18 alty’’.

19 (2) Section 1154(a)(4)(B) (42 U.S.C. 1320c–

20 3(a)(4)(B)) is amended—

21 (A) by inserting ‘‘that is’’ after ‘‘(or’’, and

22 (B) by striking ‘‘1882(t)’’ and inserting

23 ‘‘1882(t)(3)’’.

24 (i) HEALTH INSURANCE COUNSELING.—Section

25 4360 of OBRA–1990 is amended—
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1 (1) in subsection (b)(2)(A)(ii), by striking

2 ‘‘Act’’ and inserting ‘‘Act)’’;

3 (2) in subsection (b)(2)(D), by striking ‘‘serv4 ices’’ and inserting ‘‘counseling’’;

5 (3) in subsection (b)(2)(I), by striking ‘‘assist6 ance’’ and inserting ‘‘referrals’’;

7 (4) in subsection (c)(1), by striking ‘‘and that

8 such activities will continue to be maintained at such

9 level’’;

10 (5) in subsection (d)(3), by striking ‘‘to the

11 rural areas’’ and inserting ‘‘eligible individuals resid12 ing in rural areas’’;

13 (6) in subsection (e)—

14 (A) by striking ‘‘subsection (c) or (d)’’ and

15 inserting ‘‘this section’’,

16 (B) by striking ‘‘and annually thereafter,

17 issue an annual report’’ and inserting ‘‘and an18 nually thereafter during the period of the grant,

19 issue a report’’, and

20 (C) in paragraph (1), by striking ‘‘State21 wide’’;

22 (7) in subsection (f), by striking paragraph (2)

23 and by redesignating paragraphs (3) through (5) as

24 paragraphs (2) through (4), respectively; and
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1 (8) by redesignating the second subsection (f)

2 (relating to authorization of appropriations for

3 grants) as subsection (g).

4 (j) TELEPHONE INFORMATION SYSTEM.—

5 (1) Section 1804 (42 U.S.C. 1395b–2) is

6 amended—

7 (A) by adding at the end of the heading

8 the following: ‘‘; MEDICARE AND MEDIGAP IN9 FORMATION’’,

10 (B) by inserting ‘‘(a)’’ after ‘‘1804.’’, and

11 (C) by adding at the end the following new

12 subsection:

13 ‘‘(b) The Secretary shall provide information via a

14 toll-free telephone number on the programs under this

15 title.’’.

16 (2) Section 1882(f) (42 U.S.C. 1395ss(f)) is

17 amended by adding at the end the following new

18 paragraph:

19 ‘‘(3) The Secretary shall provide information via a

20 toll-free telephone number on medicare supplemental poli21 cies (including the relationship of State programs under

22 title XIX to such policies).’’.

23 (3) Section 1889 is repealed.

24 (k) MAILING OF POLICIES.—Section 1882(d)(4) (42

25 U.S.C. 1395ss(d)(4)) is amended—
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1 (1) in subparagraph (D), by striking ‘‘, if such

2 policy’’ and all that follows up to the period at the

3 end, and

4 (2) by adding at the end the following new sub5 paragraph:

6 ‘‘(E) Subparagraph (A) shall not apply in the case

7 of an issuer who mails or causes to be mailed a policy,

8 certificate, or other matter solely to comply with the re9 quirements of subsection (q).’’.

10 (l) EFFECTIVE DATE.—The amendments made by

11 this section shall be effective as if included in the enact12 ment of OBRA–1990; except that—

13 (1) the amendments made by subsection (d)(1)

14 shall take effect on the date of the enactment of this

15 Act, but no penalty shall be imposed under section

16 1882(d)(3)(A) of the Social Security Act (for an ac17 tion occurring after the effective date of the amend18 ments made by section 4354 of OBRA–1990 and be19 fore the date of the enactment of this Act) with re20 spect to the sale or issuance of a policy which is not

21 unlawful under section 1882(d)(3)(A)(i)(II) of the

22 Social Security Act (as amended by this section);

23 (2) the amendments made by subsection

24 (d)(2)(A) and by subparagraphs (A), (B), and (E)
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1 of subsection (e)(1) shall be effective on the date

2 specified in subsection (m)(4); and

3 (3) the amendment made by subsection (g)(2)

4 shall take effect on January 1, 1994, and shall apply

5 to individuals who attain 65 years of age or older on

6 or after the effective date of section 1882(s)(2) of

7 the Social Security Act (and, in the case of individ8 uals who attained 65 years of age after such effec9 tive date and before January 1, 1994, and who were

10 not covered under such section before January 1,

11 1994, the 6-month period specified in that section

12 shall begin January 1, 1994).

13 (m) TRANSITION PROVISIONS.—

14 (1) IN GENERAL.—If the Secretary of Health

15 and Human Services identifies a State as requiring

16 a change to its statutes or regulations to conform its

17 regulatory program to the changes made by this sec18 tion, the State regulatory program shall not be con19 sidered to be out of compliance with the require20 ments of section 1882 of the Social Security Act due

21 solely to failure to make such change until the date

22 specified in paragraph (4).

23 (2) NAIC STANDARDS.—If, within 6 months

24 after the date of the enactment of this Act, the Na25 tional Association of Insurance Commissioners (in
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1 this subsection referred to as the ‘‘NAIC’’) modifies

2 its 1991 NAIC Model Regulation (adopted in July

3 1991) to conform to the amendments made by this

4 section and to delete from section 15C the exception

5 which begins with ‘‘unless’’, such modifications shall

6 be considered to be part of that Regulation for the

7 purposes of section 1882 of the Social Security Act.

8 (3) SECRETARY STANDARDS.—If the NAIC

9 does not make the modifications described in para10 graph (2) within the period specified in such para11 graph, the Secretary of Health and Human Services

12 shall make the modifications described in such para13 graph and such modifications shall be considered to

14 be part of that Regulation for the purposes of sec15 tion 1882 of the Social Security Act.

16 (4) DATE SPECIFIED.—

17 (A) IN GENERAL.—Subject to subpara18 graph (B), the date specified in this paragraph

19 for a State is the earlier of—

20 (i) the date the State changes its stat21 utes or regulations to conform its regu22 latory program to the changes made by

23 this section, or
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1 (ii) 1 year after the date the NAIC or

2 the Secretary first makes the modifications

3 under paragraph (2) or (3), respectively.

4 (B) ADDITIONAL LEGISLATIVE ACTION RE5 QUIRED.—In the case of a State which the Sec6 retary identifies as—

7 (i) requiring State legislation (other

8 than legislation appropriating funds) to

9 conform its regulatory program to the

10 changes made in this section, but

11 (ii) having a legislature which is not

12 scheduled to meet in 1994 in a legislative

13 session in which such legislation may be

14 considered,

15 the date specified in this paragraph is the first

16 day of the first calendar quarter beginning after

17 the close of the first legislative session of the

18 State legislature that begins on or after Janu19 ary 1, 1994. For purposes of the previous sen20 tence, in the case of a State that has a 2-year

21 legislative session, each year of such session

22 shall be deemed to be a separate regular session

23 of the State legislature.
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1 Subtitle D—Customs and Trade

2 Provisions

3 SEC. 13601. CUSTOMS AND TRADE AGENCY AUTHORIZA4 TIONS FOR FISCAL YEARS 1994 AND 1995.

5 (a) UNITED STATES INTERNATIONAL TRADE COM6 MISSION.—Section 330(e)(2) of the Tariff Act of 1930 (19

7 U.S.C. 1330(e)(2)) is amended to read as follows:

8 ‘‘(2)(A) There are authorized to be appropriated to

9 the Commission for necessary expenses (including the

10 rental of conference rooms in the District of Columbia and

11 elsewhere) not to exceed the following:

12 ‘‘(i) $45,416,000 for fiscal year 1994.

13 ‘‘(ii) $45,974,000 for fiscal year 1995.

14 ‘‘(B) Not to exceed $2,500 of the amount authorized

15 to be appropriated for any fiscal year under subparagraph

16 (A) may be used, subject to the approval of the

17 Chairman of the Commission, for reception and entertain18 ment expenses.

19 ‘‘(C) No part of any sum that is appropriated under

20 the authority of subparagraph (A) may be used by the

21 Commission in the making of any special study, investiga22 tion, or report that is requested by any agency of the exec23 utive branch unless that agency reimburses the Commis24 sion for the cost thereof.’’.
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1 (b) UNITED STATES CUSTOMS SERVICE.—Section

2 301(b) of the Customs Procedural Reform and Simplifica3 tion Act of 1978 (19 U.S.C. 2075(b)) is amended to read

4 as follows:

5 ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—

6 ‘‘(1) FOR NONCOMMERCIAL OPERATIONS.—

7 There are authorized to be appropriated for the sala8 ries and expenses of the Customs Service that are

9 incurred in noncommercial operations not to exceed

10 the following:

11 ‘‘(A) $540,783,000 for fiscal year 1994.

12 ‘‘(B) $527,000,000 for fiscal year 1995.

13 ‘‘(2) FOR COMMERCIAL OPERATIONS.—(A)

14 There are authorized to be appropriated for the sala15 ries and expenses of the Customs Service that are

16 incurred in commercial operations not less than the

17 following:

18 ‘‘(i) $771,036,000 for fiscal year 1994.

19 ‘‘(ii) $748,000,000 for fiscal year 1995.

20 ‘‘(B) The monies authorized to be appropriated

21 under subparagraph (A) for any fiscal year, except

22 for such sums as may be necessary for the salaries

23 and expenses of the Customs Service that are in24 curred in connection with the processing of merchan25 dise that is exempt from the fees imposed under sec-
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1 tion 13031(a) (9) and (10) of the Consolidated Om2 nibus Budget Reconciliation Act of 1985, shall be

3 appropriated from the Customs User Fee Account.

4 ‘‘(3) FOR AIR AND MARINE INTERDICTION.—

5 There are authorized to be appropriated for the op6 eration (including salaries and expenses) and main7 tenance of the air and marine interdiction programs

8 of the Customs Service not to exceed the following:

9 ‘‘(A) $95,156,000 for fiscal year 1994.

10 ‘‘(B) $128,000,000 for fiscal year 1995.’’.

11 (c) OFFICE OF THE UNITED STATES TRADE REP12 RESENTATIVE.—Section 141(g)(1) of the Trade Act of

13 1974 (19 U.S.C. 2171(g)(1)) is amended to read as

14 follows:

15 ‘‘(g)(1)(A) There are authorized to be appropriated

16 to the Office for the purposes of carrying out its functions

17 not to exceed the following:

18 ‘‘(i) $20,143,000 for fiscal year 1994.

19 ‘‘(ii) $20,419,000 for fiscal year 1995.

20 ‘‘(B) Of the amounts authorized to be appropriated

21 under subparagraph (A) for any fiscal year—

22 ‘‘(i) not to exceed $98,000 may be used for en23 tertainment and representation expenses of the Of24 fice; and
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1 ‘‘(ii) not to exceed $2,500,000 shall remain

2 available until expended.’’.

3 SEC. 13602. EXTENSION OF AUTHORITY TO LEVY CUSTOMS

4 USER FEES.

5 Section 13031(j)(3) of the Consolidated Omnibus

6 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3))

7 is amended by striking out ‘‘1995’’ and inserting ‘‘1998’’.

8 SEC. 13603. GENERALIZED SYSTEM OF PREFERENCES.

9 (a) TREATMENT OF COUNTRIES FORMERLY WITHIN

10 THE UNION OF SOVIET SOCIALIST REPUBLICS.—The

11 table in section 502(b) of the Trade Act of 1974 (19

12 U.S.C. 2462(b)) is amended by striking out ‘‘Union of So13 viet Socialist Republics’’.

14 (b) EXTENSION OF DUTY-FREE TREATMENT UNDER

15 SYSTEM.—

16 (1) IN GENERAL.—Section 505(a) of the Trade

17 Act of 1974 (19 U.S.C. 2465(a)) is amended by

18 striking out ‘‘July 4, 1993’’ and inserting ‘‘Septem19 ber 30, 1994’’.

20 (2) RETROACTIVE APPLICATION FOR CERTAIN

21 LIQUIDATIONS AND RELIQUIDATIONS.—Notwith22 standing section 514 of the Tariff Act of 1930 or

23 any other provision of law, upon proper request filed

24 with the appropriate customs officer within 180 days
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1 after the date of the enactment of this Act, the

2 entry—

3 (A) of any article to which duty-free treat4 ment under title V of the Trade Act of 1974

5 would have applied if the entry had been made

6 on July 4, 1993, and

7 (B) that was made after July 4, 1993, and

8 before such date of enactment,

9 shall be liquidated or reliquidated as free of duty,

10 and the Secretary of the Treasury shall refund any

11 duty paid with respect to such entry. As used in this

12 paragraph, the term ‘‘entry’’ includes a withdrawal

13 from warehouse for consumption.

14 SEC. 13604. EXTENSION OF, AND AUTHORIZATION OF AP15 PROPRIATIONS FOR, THE WORKER TRADE

16 ADJUSTMENT ASSISTANCE PROGRAM.

17 (a) EXTENSION.—Section 285 of the Trade Act of

18 1974 (19 U.S.C. note preceding 2271) is amended—

19 (1) by striking out ‘‘No’’ and all that follows

20 thereafter down through ‘‘chapter 2, no’’ in sub21 section (b) and inserting ‘‘No’’; and

22 (2) by adding at the end the following new sub23 section:
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1 ‘‘(c) No assistance, vouchers, allowances, or other

2 payments may be provided under chapter 2 after Septem3 ber 30, 1996.’’.

4 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

5 245 of the Trade Act of 1974 (19 U.S.C. 2317) is amend6 ed by striking out ‘‘and 1993,’’ and inserting ‘‘1993,

7 1994, 1995, and 1996,’’.

8 SEC. 13605. EXTENSION OF URUGUAY ROUND TRADE

9 AGREEMENT NEGOTIATING AND PROCLAMA10 TION AUTHORITY AND OF ‘‘FAST TRACK’’ PRO11 CEDURES TO IMPLEMENTING LEGISLATION.

12 Section 1102 of the Omnibus Trade and Competitive13 ness Act of 1988 (19 U.S.C. 2902) is amended by insert14 ing at the end the following new subsection:

15 ‘‘(e) SPECIAL PROVISIONS REGARDING URUGUAY

16 ROUND TRADE NEGOTIATIONS.—

17 ‘‘(1) IN GENERAL.—Notwithstanding the time

18 limitations in subsections (a) and (b), if the Uru19 guay Round of multilateral trade negotiations under

20 the auspices of the General Agreement on Tariffs

21 and Trade has not resulted in trade agreements by

22 May 31, 1993, the President may, during the period

23 after May 31, 1993, and before April 16, 1994,

24 enter into, under subsections (a) and (b), trade

25 agreements resulting from such negotiations.
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1 ‘‘(2) APPLICATION OF TARIFF PROCLAMATION

2 AUTHORITY.—No proclamation under subsection (a)

3 to carry out the provisions regarding tariff barriers

4 of a trade agreement that is entered into pursuant

5 to paragraph (1) may take effect before the effective

6 date of a bill that implements the provisions regard7 ing nontariff barriers of a trade agreement that is

8 entered into under such paragraph.

9 ‘‘(3) APPLICATION OF IMPLEMENTING AND

10 ‘FAST TRACK’ PROCEDURES.—Section 1103 applies

11 to any trade agreement negotiated under subsection

12 (b) pursuant to paragraph (1), except that—

13 ‘‘(A) in applying subsection (a)(1)(A) of

14 section 1103 to any such agreement, the phrase

15 ‘at least 120 calendar days before the day on

16 which he enters into the trade agreement (but

17 not later than December 15, 1993),’ shall be

18 substituted for the phrase ‘at least 90 calendar

19 days before the day on which he enters into the

20 trade agreement; and

21 ‘‘(B) no provision of subsection (b) of sec22 tion 1103 other than paragraph (1)(A) applies

23 to any such agreement and in applying such

24 paragraph, ‘April 16, 1994;’ shall be sub25 stituted for ‘June 1, 1991;’.
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1 ‘‘(4) ADVISORY COMMITTEE REPORTS.—The re2 port required under section 135(e)(1) of the Trade

3 Act of 1974 regarding any trade agreement provided

4 for under paragraph (1) shall be provided to the

5 President, the Congress, and the United States

6 Trade Representative not later than 30 days after

7 the date on which the President notifies the Con8 gress under section 1103(a)(1)(A) of his intention to

9 enter into the agreement (but before January 15,

10 1994).’’.

11 SEC. 13606. REPEAL OF EAST-WEST TRADE STATISTICS

12 MONITORING SYSTEM.

13 (a) REPEAL.—Section 410 of the Trade Act of 1974

14 (19 U.S.C. 2440) is repealed.

15 (b) CONFORMING AMENDMENT.—The table of con16 tents for such Act of 1974 is amended by striking out the

17 following:

‘‘Sec. 410. East-West Trade Statistics Monitoring System.’’.

18 Subtitle E—Customs Officer Pay

19 Reform

20 SEC. 13701. OVERTIME AND PREMIUM PAY FOR CUSTOMS

21 OFFICERS.

22 (a) IN GENERAL.—Section 5 of the Act of February

23 13, 1911 (19 U.S.C. 261 and 267) is amended to read

24 as follows:
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1 ‘‘SEC. 5. OVERTIME AND PREMIUM PAY FOR CUSTOMS OF2 FICERS.

3 ‘‘(a) OVERTIME PAY.—

4 ‘‘(1) IN GENERAL.—Subject to paragraph (2)

5 and subsection (c), a customs officer who is officially

6 assigned to perform work in excess of 40 hours in

7 the administrative workweek of the officer or in ex8 cess of 8 hours in a day shall be compensated for

9 that work at an hourly rate of pay that is equal to

10 2 times the hourly rate of the basic pay of the offi11 cer. For purposes of this paragraph, the hourly rate

12 of basic pay for a customs officer does not include

13 any premium pay provided for under subsection (b).

14 ‘‘(2) SPECIAL PROVISIONS RELATING TO OVER15 TIME WORK ON CALLBACK BASIS.—

16 ‘‘(A) MINIMUM DURATION.—Any work for

17 which compensation is authorized under para18 graph (1) and for which the customs officer is

19 required to return to the officer’s place of work

20 shall be treated as being not less than 2 hours

21 in duration; but only if such work begins at

22 least 1 hour after the end of any previous regu23 larly scheduled work assignment and ends at

24 least 1 hour before the beginning of the follow25 ing regularly scheduled work assignment.
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1 ‘‘(B) COMPENSATION FOR COMMUTING

2 TIME.—

3 ‘‘(i) IN GENERAL.—Except as pro4 vided in clause (ii), in addition to the com5 pensation authorized under paragraph (1)

6 for work to which subparagraph (A) ap7 plies, the customs officer is entitled to be

8 paid, as compensation for commuting time,

9 an amount equal to 3 times the hourly rate

10 of basic pay of the officer.

11 ‘‘(ii) EXCEPTION.—Compensation for

12 commuting time is not payable under

13 clause (i) if the work for which compensa14 tion is authorized under paragraph (1)—

15 ‘‘(I) does not commence within

16 16 hours of the customs officer’s last

17 regularly scheduled work assignment,

18 or

19 ‘‘(II) commences within 2 hours

20 of the next regularly scheduled work

21 assignment of the customs officer.

22 ‘‘(b) PREMIUM PAY FOR CUSTOMS OFFICERS.—

23 ‘‘(1) NIGHT WORK DIFFERENTIAL.—

24 ‘‘(A) 3 P.M. TO MIDNIGHT SHIFTWORK.—If

25 the majority of the hours of regularly scheduled
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1 work of a customs officer occur during the pe2 riod beginning at 3 p.m. and ending at 12 a.m.,

3 the officer is entitled to pay for work during

4 such period (except for work to which para5 graph (2) or (3) applies) at the officer’s hourly

6 rate of basic pay plus premium pay amounting

7 to 15 percent of that basic rate.

8 ‘‘(B) 11 P.M. TO 8 A.M. SHIFTWORK.—If

9 the majority of the hours of regularly scheduled

10 work of a customs officer occur during the pe11 riod beginning at 11 p.m. and ending at 8 a.m.,

12 the officer is entitled to pay for work during

13 such period (except for work to which para14 graph (2) or (3) applies) at the officer’s hourly

15 rate of basic pay plus premium pay amounting

16 to 20 percent of that basic rate.

17 ‘‘(C) 7:30 P.M. TO 3:30 A.M. SHIFTWORK.—

18 If the regularly scheduled work assignment of a

19 customs officer is 7:30 p.m. to 3:30 a.m., the

20 officer is entitled to pay for work during such

21 period (except for work to which paragraph (2)

22 or (3) applies) at the officer’s hourly rate of

23 basic pay plus premium pay amounting to 15

24 percent of that basic rate for the period from

25 7:30 p.m. to 11:30 p.m. and at the officer’s
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1 hourly rate of basic pay plus premium pay

2 amounting to 20 percent of that basic rate for

3 the period from 11:30 p.m. to 3:30 a.m.

4 ‘‘(2) SUNDAY DIFFERENTIAL.—A customs offi5 cer who performs any regularly scheduled work on a

6 Sunday that is not a holiday is entitled to pay for

7 that work at the officer’s hourly rate of basic pay

8 plus premium pay amounting to 50 percent of that

9 basic rate.

10 ‘‘(3) HOLIDAY DIFFERENTIAL.—A customs offi11 cer who performs any regularly scheduled work on a

12 holiday is entitled to pay for that work at the offi13 cer’s hourly rate of basic pay plus premium pay

14 amounting to 100 percent of that basic rate.

15 ‘‘(4) TREATMENT OF PREMIUM PAY.—Premium

16 pay provided for under this subsection may not be

17 treated as being overtime pay or compensation for

18 any purpose.

19 ‘‘(c) LIMITATIONS.—

20 ‘‘(1) FISCAL YEAR CAP.—The aggregate of

21 overtime pay under subsection (a) (including com22 muting compensation under subsection (a)(2)(B))

23 and premium pay under subsection (b) that a cus24 toms officer may be paid in any fiscal year may not

25 exceed $25,000; except that the Commissioner of
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1 Customs or his designee may waive this limitation in

2 individual cases in order to prevent excessive costs

3 or to meet emergency requirements of the Customs

4 Service.

5 ‘‘(2) EXCLUSIVITY OF PAY UNDER THIS SEC6 TION.—A customs officer who receives overtime pay

7 under subsection (a) or premium pay under sub8 section (b) for time worked may not receive pay or

9 other compensation for that work under any other

10 provision of law.

11 ‘‘(d) REGULATIONS.—The Secretary of the Treasury

12 shall prescribe such regulations as are necessary or appro13 priate to carry out this section, including regulations—

14 ‘‘(1) to ensure that callback work assignments

15 are commensurate with the overtime pay authorized

16 for such work; and

17 ‘‘(2) to prevent the disproportionate assignment

18 of overtime work to customs officers who are near

19 to retirement.

20 ‘‘(e) DEFINITIONS.—As used in this section:

21 ‘‘(1) The term ‘customs officer’ means an indi22 vidual performing those functions specified by regu23 lation by the Secretary of the Treasury for a cus24 toms inspector or canine enforcement officer. Such

25 functions shall be consistent with such applicable
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1 standards as may be promulgated by the Office of

2 Personnel Management.

3 ‘‘(2) The term ‘holiday’ means any day des4 ignated as a holiday under a Federal statute or Ex5 ecutive order.’’.

6 (b) CONFORMING AMENDMENTS.—

7 (1) Section 2 of the Act of June 3, 1944 (19

8 U.S.C. 1451a), is repealed.

9 (2) Section 450 of the Tariff Act of 1930 (19

10 U.S.C. 1450) is amended—

11 (A) by striking out ‘‘at night’’ in the sec12 tion heading and inserting ‘‘during overtime

13 hours’’;

14 (B) by striking out ‘‘at night’’ and insert15 ing ‘‘during overtime hours’’; and

16 (C) by inserting ‘‘aircraft,’’ immediately

17 before ‘‘vessel’’.

18 (c) EFFECTIVE DATE.—The amendments made by

19 subsections (a) and (b) apply to customs inspectional serv20 ices provided on or after October 1, 1993.

21 SEC. 13702. FOREIGN LANGUAGE PROFICIENCY AWARDS

22 FOR CUSTOMS OFFICERS.

23 Cash awards for foreign language proficiency may,

24 under regulations prescribed by the Secretary of the

25 Treasury, be paid to customs officers (as referred to in
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1 section 5(e)(1) of the Act of February 13, 1911) to the

2 same extent and in the same manner as would be allowable

3 under subchapter III of chapter 45 of title 5, United

4 States Code, with respect to law enforcement officers (as

5 defined by section 4521 of such title).

6 SEC. 13703. APPROPRIATIONS REIMBURSEMENTS FROM

7 THE CUSTOMS USER FEE ACCOUNT.

8 Section 13031(f)(3) of the Consolidated Omnibus

9 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(f)(3))

10 is amended—

11 (1) by amending clause (i) of subparagraph (A)

12 to read as follows: ‘‘(i) in—

13 ‘‘(I) paying overtime compensation under

14 section 5(a) of the Act of February 13, 1911,

15 ‘‘(II) paying premium pay under section

16 5(b) of the Act of February 13, 1911, but the

17 amount for which reimbursement may be made

18 under this subclause may not, for any fiscal

19 year, exceed the difference between the cost of

20 the premium pay for that year calculated under

21 such section 5(b) as amended by section 13701

22 of the Omnibus Budget Reconciliation Act of

23 1993 and the cost of such pay calculated under

24 subchapter V of chapter 55 of title 5, United

25 States Code,
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1 ‘‘(III) paying agency contributions to the

2 Civil Service Retirement and Disability Fund to

3 match deductions from the overtime compensa4 tion paid under subclause (I), and

5 ‘‘(IV) providing all preclearance services

6 for which the recipients of such services are not

7 required to reimburse the Secretary of the

8 Treasury, and’’;

9 (2) by inserting before the flush sentence ap10 pearing after clause (ii) of subparagraph (A) the fol11 lowing sentence: ‘‘The transfer of funds required

12 under subparagraph (C)(iii) has priority over reim13 bursements under this subparagraph to carry out

14 subclauses (II), (III), and (IV) of clause (i).’’;

15 (3) by striking out ‘‘except for costs described

16 in subparagraph (A)(i) (I) and (II),’’ in subpara17 graph (B)(i); and

18 (4) by amending subparagraph (C)—

19 (A) by striking out ‘‘to fully reimburse

20 inspectional overtime and preclearance costs’’ in

21 clause (i) and inserting ‘‘to reimburse costs de22 scribed in subparagraph (A)(i)’’; and

23 (B) by inserting after clause (ii) of sub24 paragraph (C) the following:
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1 ‘‘(iii) For each fiscal year, the Secretary of the

2 Treasury shall calculate the difference between—

3 ‘‘(I) the estimated cost for overtime com4 pensation that would have been incurred during

5 that fiscal year for inspectional services if sec6 tion 5 of the Act of February 13, 1911 (19

7 U.S.C. 261 and 267), as in effect before the en8 actment of section 13701 of the Omnibus

9 Budget Reconciliation Act of 1993, had gov10 erned such costs, and

11 ‘‘(II) the actual cost for overtime com12 pensation, premium pay, and agency retirement

13 contributions that is incurred during that fiscal

14 year in regard to such services under section 5

15 of the Act of February 13, 1991, as amended

16 by section 13701 of the Omnibus Budget Rec17 onciliation Act of 1993, and under section

18 8331(3) of title 5, United States Code, as

19 amended by section 13704 of such Act of 1993,

20 and shall transfer from the Customs User Fee Ac21 count to the General Fund of the Treasury an

22 amount equal to the difference calculated under this

23 clause, or $18,000,000, whichever amount is less.

24 Transfers shall be made under this clause at least

25 quarterly and on the basis of estimates to the same
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1 extent as are reimbursements under subparagraph

2 (B)(iii).’’.

3 SEC. 13704. TREATMENT OF CERTAIN PAY OF CUSTOMS OF4 FICERS FOR RETIREMENT PURPOSES.

5 (a) IN GENERAL.—Section 8331(3) of title 5, United

6 States Code, is amended—

7 (1) by striking out ‘‘and’’ at the end of sub8 paragraph (C);

9 (2) by striking out the semicolon at the end of

10 subparagraph (D) and inserting ‘‘; and’’;

11 (3) by adding after subparagraph (D) the fol12 lowing:

13 ‘‘(E) with respect to a customs officer (re14 ferred to in subsection (e)(1) of section 5 of the

15 Act of February 13, 1911), compensation for

16 overtime inspectional services provided for

17 under subsection (a) of such section 5, but not

18 to exceed 50 percent of any statutory maximum

19 in overtime pay for customs officers which is in

20 effect for the year involved;’’; and

21 (4) by striking out ‘‘subparagraphs (B), (C),

22 and (D) of this paragraph,’’ and inserting ‘‘subpara23 graphs (B), (C), (D), and (E) of this paragraph’’.

24 (b) EFFECTIVE DATE.—The amendments made by

25 subsection (a) take effect on the date of the enactment
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1 of this Act and apply only with respect to service per2 formed on or after such date.

3 SEC. 13705. REPORTS.

4 (a) CUSTOMS USER FEE ACCOUNT REPORTS.—Sub5 paragraph (D) of section 13031(f)(3) of the Consolidated

6 Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.

7 58c(f)(3)(D)) is amended to read as follows:

8 ‘‘(D) At the close of each fiscal year, the

9 Secretary of the Treasury shall submit a report

10 to the Committee on Finance of the Senate and

11 the Committee on Ways and Means of the

12 House of Representatives—

13 ‘‘(i) containing a detailed accounting

14 of all expenditures from the Customs User

15 Fee Account during such year, including a

16 summary of the expenditures, on a port-by17 port basis, for which reimbursement has

18 been provided under subparagraph (A)(ii);

19 ‘‘(ii) containing a listing of all call20 back assignments of customs officers for

21 which overtime compensation was paid

22 under section 5(a) of the Act of February

23 13, 1911, and that were less than 1 hour

24 in duration; and
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1 ‘‘(iii) containing a listing of all cus2 toms officers who were paid $25,000 or

3 more under subsections 5(a) and 5(b) of

4 the Act of February 13, 1911, including a

5 listing of the total compensation paid to

6 each of those customs officers under all

7 other statutory authority.’’.

8 (b) OTHER REPORTS.—

9 (1) GAO REPORT.—The Comptroller General of

10 the United States shall undertake—

11 (A) an evaluation of the appropriateness

12 and efficiency of the customs user fee laws for

13 financing the provision of customs inspectional

14 services; and

15 (B) a study to determine whether cost sav16 ings in the provision of overtime inspectional

17 services could be realized by the United States

18 Customs Service through the use of additional

19 inspectors as opposed to continuing the current

20 practice of relying on overtime pay.

21 The Comptroller General shall submit a report on

22 the evaluation and study required under this sub23 section to the Committees by no later than the 1st

24 anniversary of the date of the enactment of this Act.
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1 (2) TREASURY RECOMMENDATION.—On the day

2 that the President submits the budget for the Unit3 ed States Government for fiscal year 1995 to the

4 Congress under section 1105(a) of title 31, United

5 States Code, the Secretary of the Treasury shall

6 submit to the Committees recommended legislative

7 proposals for improving the operation of customs

8 user fee laws in financing the provision of customs

9 inspectional services.

10 (3) DEFINITION OF COMMITTEES.—For pur11 poses of this subsection, the term ‘‘Committees’’

12 means the Committee on Ways and Means of the

13 House of Representatives and the Committee on Fi14 nance of the Senate.

15 TITLE XIV—REVENUE

16 PROVISIONS

17 SEC. 14001. SHORT TITLE; ETC.

18 (a) SHORT TITLE.—This title may be cited as the

19 ‘‘Revenue Reconciliation Act of 1993’’.

20 (b) AMENDMENT TO 1986 CODE.—Except as other21 wise expressly provided, whenever in this title an amend22 ment or repeal is expressed in terms of an amendment

23 to, or repeal of, a section or other provision, the reference

24 shall be considered to be made to a section or other provi25 sion of the Internal Revenue Code of 1986.
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1 (c) SECTION 15 NOT TO APPLY.—Except in the case

2 of the amendments made by section 14221 (relating to

3 corporate rate increase), no amendment made by this title

4 shall be treated as a change in a rate of tax for purposes

5 of section 15 of the Internal Revenue Code of 1986.

6 (d) WAIVER OF ESTIMATED TAX PENALTIES.—No

7 addition to tax shall be made under section 6654 or 6655

8 of the Internal Revenue Code of 1986 for any period be9 fore April 16, 1994 (March 16, 1994, in the case of a

10 corporation), with respect to any underpayment to the ex11 tent such underpayment was created or increased by any

12 provision of this title.

13 (e) TABLE OF CONTENTS.—

TITLE XIV—REVENUE PROVISIONS

Sec. 14001. Short title; etc.

Subtitle A—Training and Investment Incentives

PART I—PROVISIONS RELATING TO EDUCATION AND TRAINING

Sec. 14101. Employer-provided educational assistance.

Sec. 14102. Targeted jobs credit.

PART II—INVESTMENT INCENTIVES

SUBPART A—RESEARCH CREDIT

Sec. 14111. Permanent extension of research credit.

Sec. 14112. Modification of fixed base percentage for startup companies.

SUBPART B—CAPITAL GAIN PROVISIONS

Sec. 14113. 50-percent exclusion for gain from certain small business stock.

Sec. 14114. Rollover of gain from sale of publicly traded securities into specialized small business investment companies.

SUBPART C—MODIFICATIONS TO MINIMUM TAX DEPRECIATION RULES

Sec. 14115. Modification to minimum tax depreciation rules.

SUBPART D—INCREASE IN EXPENSE TREATMENT FOR SMALL BUSINESSES

Sec. 14116. Increase in expense treatment for small businesses.
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PART III—TAX-EXEMPT BOND PROVISIONS

Sec. 14121. High-speed intercity rail facility bonds exempt from State volume

cap.

Sec. 14122. Permanent extension of qualified small issue bonds.

PART IV—EXPANSION AND SIMPLIFICATION OF EARNED INCOME TAX

CREDIT

Sec. 14131. Expansion and simplification of earned income tax credit.

PART V—INCENTIVES FOR INVESTMENT IN REAL ESTATE

SUBPART A—EXTENSION OF QUALIFIED MORTGAGE BONDS AND LOW-INCOME

HOUSING CREDIT

Sec. 14141. Permanent extension of qualified mortgage bonds.

Sec. 14142. Permanent extension of low-income housing credit.

SUBPART B—MODIFICATION OF PASSIVE LOSS RULES

Sec. 14143. Application of passive loss rules to rental real estate activities.

SUBPART C—PROVISIONS RELATING TO REAL ESTATE INVESTMENTS BY

PENSION FUNDS

Sec. 14144. Real estate property acquired by a qualified organization.

Sec. 14145. Repeal of special treatment of publicly traded partnerships.

Sec. 14146. Title-holding companies permitted to receive small amounts of unrelated business taxable income.

Sec. 14147. Exclusion from unrelated business tax of gains from certain property.

Sec. 14148. Exclusion from unrelated business tax of certain fees and option

premiums.

Sec. 14149. Treatment of pension fund investments in real estate investment

trusts.

SUBPART D—DISCHARGE OF INDEBTEDNESS

Sec. 14150. Exclusion from gross income for income from discharge of qualified

real property business indebtedness.

SUBPART E—INCREASE IN RECOVERY PERIOD FOR NONRESIDENTIAL REAL

PROPERTY

Sec. 14151. Increase in recovery period for nonresidential real property.

PART VI—LUXURY TAX

Sec. 14161. Repeal of luxury excise taxes other than on passenger vehicles.

Sec. 14162. Exemption from luxury excise tax for certain equipment installed

on passenger vehicles for use by disabled individuals.

Sec. 14163. Tax on diesel fuel used in noncommercial boats.

PART VII—OTHER CHANGES

Sec. 14171. Alternative minimum tax treatment of contributions of appreciated

property.

Sec. 14172. Certain transfers to railroad retirement account made permanent.
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Sec. 14173. Temporary extension of deduction for health insurance costs of

self-employed individuals.

Subtitle B—Revenue Increases

PART I—PROVISIONS AFFECTING INDIVIDUALS

SUBPART A—RATE INCREASES

Sec. 14201. Increase in top marginal rate under section 1.

Sec. 14202. Surtax on high-income taxpayers.

Sec. 14203. Modifications to alternative minimum tax rates and exemption

amounts.

Sec. 14204. Overall limitation on itemized deductions for high-income taxpayers

made permanent.

Sec. 14205. Phaseout of personal exemption of high-income taxpayers made

permanent.

Sec. 14206. Provisions to prevent conversion of ordinary income to capital gain.

SUBPART B—OTHER PROVISIONS

Sec. 14207. Repeal of limitation on amount of wages subject to health insurance employment tax.

Sec. 14208. Top estate and gift tax rates made permanent.

Sec. 14209. Reduction in deductible portion of business meals and entertainment.

Sec. 14210. Elimination of deduction for club membership fees.

Sec. 14211. Disallowance of deduction for certain employee remuneration in excess of $1,000,000.

Sec. 14212. Reduction in compensation taken into account in determining contributions and benefits under qualified retirement plans.

Sec. 14213. Modification to deduction for certain moving expenses.

Sec. 14214. Simplification of individual estimated tax safe harbor based on last

year’s tax.

Sec. 14215. Social security and tier 1 railroad retirement benefits.

PART II—PROVISIONS AFFECTING BUSINESSES

Sec. 14221. Increase in top marginal rate under section 11.

Sec. 14222. Denial of deduction for lobbying expenses.

Sec. 14223. Mark to market accounting method for securities dealers.

Sec. 14224. Clarification of treatment of certain FSLIC financial assistance.

Sec. 14225. Modification of corporate estimated tax rules.

Sec. 14226. Limitation on section 936 credit.

Sec. 14227. Modification to limitation on deduction for certain interest.

PART III—FOREIGN TAX PROVISIONS

SUBPART A—CURRENT TAXATION OF CERTAIN EARNINGS OF CONTROLLED

FOREIGN CORPORATIONS

Sec. 14231. Earnings invested in excess passive assets.

Sec. 14232. Modification to taxation of investment in United States property.

Sec. 14233. Other modifications to subpart F.

SUBPART B—ALLOCATION OF RESEARCH AND EXPERIMENTAL EXPENDITURES

Sec. 14234. Allocation of research and experimental expenditures.
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SUBPART C—OTHER PROVISIONS

Sec. 14235. Repeal of certain exceptions for working capital.

Sec. 14236. Modifications of accuracy-related penalty.

Sec. 14237. Denial of portfolio interest exemption for contingent interest.

Sec. 14238. Regulations dealing with conduit arrangements.

PART IV—ENERGY TAX PROVISIONS

SUBPART A—ENERGY TAX BASED ON BTU CONTENT

Sec. 14241. Imposition of energy tax based on Btu content.

SUBPART B—MODIFICATIONS TO TAX ON DIESEL FUEL

Sec. 14242. Modifications to tax on diesel fuel.

Sec. 14243. Floor stocks tax.

SUBPART C—EXTENSION OF MOTOR FUEL TAX RATES; INCREASED DEPOSITS

INTO HIGHWAY TRUST FUND

Sec. 14244. Extension of motor fuel tax rates; increased deposits into highway

trust fund.

PART V—COMPLIANCE PROVISIONS

Sec. 14251. Reporting required for certain payments to corporations.

Sec. 14252. Modifications to substantial understatement and return-preparer

penalties.

Sec. 14253. Returns relating to the cancellation of indebtedness by certain financial entities.

PART VI—TREATMENT OF INTANGIBLES

Sec. 14261. Amortization of goodwill and certain other intangibles.

Sec. 14262. Treatment of certain payments to retired or deceased partner.

PART VII—MISCELLANEOUS PROVISIONS

Sec. 14271. Substantiation requirement for deduction of certain charitable contributions.

Sec. 14272. Disclosure related to quid pro quo contributions.

Sec. 14273. Disallowance of interest on certain overpayments of tax.

Sec. 14274. Denial of deduction relating to travel expenses.

Sec. 14275. Increase in withholding from supplemental wage payments.

Subtitle C—Empowerment Zones and Enterprise Communities, Etc.

PART I—EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES

Sec. 14301. Designation and treatment of empowerment zones and enterprise

communities.

Sec. 14302. Expansion of targeted jobs credit.

Sec. 14303. Technical and conforming amendments.

Sec. 14304. Effective date.

PART II—CREDIT FOR CONTRIBUTIONS TO CERTAIN COMMUNITY

DEVELOPMENT CORPORATIONS
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Sec. 14311. Credit for contributions to certain community development corporations.

Subtitle D—Other Provisions

PART I—DISCLOSURE PROVISIONS

Sec. 14401. Disclosure of return information for administration of certain veterans programs.

Sec. 14402. Disclosure of return information to carry out income contingent repayment of student loans.

Sec. 14403. Use of return information for income verification under certain

housing assistance programs.

PART II—USER FEE PROVISIONS

Sec. 14411. Fees for applications for alcohol labeling and formula reviews.

Sec. 14412. Use of Harbor Maintenance Trust Fund amounts for administrative expenses.

Sec. 14413. Increase in tax on fuel used in commercial transportation on inland

waterways.

PART III—PUBLIC DEBT LIMIT

Sec. 14421. Increase in public debt limit.

PART IV—VACCINE PROVISIONS

Sec. 14431. Excise tax on certain vaccines made permanent.

Sec. 14432. Continuation coverage under group health plans of costs of pediatric vaccines.

Sec. 14433. Childhood Immunization Trust Fund.

1 Subtitle A—Training and

2 Investment Incentives

3 PART I—PROVISIONS RELATING TO EDUCATION

4 AND TRAINING

5 SEC. 14101. EMPLOYER-PROVIDED EDUCATIONAL ASSIST6 ANCE.

7 (a) PERMANENT EXTENSION OF EXCLUSION.—

8 (1) IN GENERAL.—Section 127 (relating to edu9 cational assistance programs) is amended by striking

10 subsection (d) and by redesignating subsection (e) as

11 subsection (d).
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1 (2) CONFORMING AMENDMENT.—Paragraph (2)

2 of section 103(a) of the Tax Extension Act of 1991

3 is hereby repealed.

4 (b) COORDINATION WITH SECTION 132.—Paragraph

5 (8) of section 132(i) is amended to read as follows:

6 ‘‘(8) APPLICATION OF SECTION TO OTHERWISE

7 TAXABLE EDUCATIONAL OR TRAINING BENEFITS.—

8 Amounts paid or expenses incurred by the employer

9 for education or training provided to the employee

10 which are not excludable from gross income under

11 section 127 shall be excluded from gross income

12 under this section if (and only if) such amounts or

13 expenses are a working condition fringe.’’

14 (c) EFFECTIVE DATES.—

15 (1) SUBSECTION (a).—The amendments made

16 by subsection (a) shall apply to taxable years ending

17 after June 30, 1992.

18 (2) SUBSECTION (b).—The amendment made

19 by subsection (b) shall apply to taxable years begin20 ning after December 31, 1988.

21 (d) TRANSITION RULES.—

22 (1) WAIVER OF INTEREST AND PENALTIES.—

23 No interest, penalty, or addition to tax shall be im24 posed or required to be paid solely by reason of a

25 failure, before the date of the enactment of this Act,
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1 to treat educational assistance in a manner consist2 ent with the provisions of section 103(a) of the Tax

3 Extension Act of 1991 (as in effect before the

4 amendments made by subsection (a)).

5 (2) SPECIAL RULES FOR 1992.—

6 (A) EMPLOYMENT TAXES.—If—

7 (i) an employer provided an employee

8 with educational assistance during the pe9 riod beginning on July 1, 1992, and end10 ing on December 31, 1992,

11 (ii) consistent with the provisions of

12 section 103(a) of the Tax Extension Act of

13 1991 (as so in effect), such employer treat14 ed such assistance as taxable for purposes

15 of any employment tax and as a result of

16 such treatment there was an increase in

17 taxable wages for purposes of such tax,

18 (iii) on or after the date of the enact19 ment of this Act and before January 1,

20 1994, such employer pays such employee

21 amounts which are taxable wages for pur22 poses of such tax and which equal or ex23 ceed the increase referred to in clause (ii),

24 and
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1 (iv) such employee did not treat such

2 assistance for purposes of such employ3 ment tax (or for purposes of chapter 1 of

4 the Internal Revenue Code of 1986 in the

5 case of employment tax imposed by chap6 ter 24 of such Code) in a manner incon7 sistent with the employer’s treatment of

8 such assistance,

9 the amendments made by subsection (a) shall

10 not apply to such educational assistance for

11 purposes of such employment tax, but, for pur12 poses of applying such employment tax (and for

13 purposes of the reporting requirements imposed

14 by chapter 61 of such Code), the taxable wages

15 of the employee referred to in clause (iii) shall

16 be reduced by the amount of the increase re17 ferred to in clause (ii). For purposes of clause

18 (iv), an employer may assume that the em19 ployee treated the assistance in a manner con20 sistent with the employer’s treatment unless

21 such employer has actual knowledge to the con22 trary.

23 (B) REPORTING REQUIREMENT.—An em24 ployer shall separately report the amounts of

25 any reduction under subparagraph (A) as non-
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1 taxable income on any returns or receipts re2 quired under chapter 61 of such Code for cal3 endar year 1993.

4 (C) DEFINITIONS.—For purposes of this

5 paragraph—

6 (i) EMPLOYMENT TAX.—The term

7 ‘‘employment tax’’ means any tax imposed

8 by subtitle C of such Code.

9 (ii) TAXABLE WAGES.—The term

10 ‘‘taxable wages’’means—

11 (I) wages (as defined in section

12 3121(a) of such Code) in the case of

13 the taxes imposed by chapter 21 of

14 such Code,

15 (II) compensation (as defined in

16 section 3231(e) of such Code) in the

17 case of the taxes imposed by chapter

18 22 of such Code,

19 (III) wages (as defined in section

20 3306(b) of such Code) in the case of

21 the taxes imposed by chapter 23 of

22 such Code, and

23 (IV) wages (as defined in section

24 3401(a) of such Code) in the case of
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1 the taxes imposed by chapter 24 of

2 such Code.

3 (3) INCOME TAX TREATMENT.—If—

4 (A) subparagraph (A) of paragraph (2) ap5 plies to any educational assistance referred to

6 in such paragraph provided to any employee,

7 and

8 (B) such employee included such assistance

9 in his taxable income for purposes of the tax

10 imposed by chapter 1 of such Code,

11 the amendments made by subsection (a) shall not

12 apply to such assistance for purposes of such chap13 ter 1, but the amount included in the gross income

14 of such employee by reason of wages received from

15 the employer referred to in subparagraph (A) of

16 paragraph (2) during 1993 shall be reduced in the

17 manner provided in such subparagraph (A).

18 SEC. 14102. TARGETED JOBS CREDIT.

19 (a) PERMANENT EXTENSION OF CREDIT.—

20 (1) IN GENERAL.—Subsection (c) of section 51

21 (relating to amount of targeted jobs credit) is

22 amended by striking paragraph (4).

23 (2) EFFECTIVE DATE.—The amendment made

24 by paragraph (1) shall apply to individuals who

25 begin work for the employer after June 30, 1992.
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1 (b) CREDIT FOR PARTICIPANTS IN APPROVED

2 SCHOOL-TO-WORK PROGRAMS.—

3 (1) IN GENERAL.—Subparagraph (I) of section

4 51(d)(1) (defining members of targeted group) is

5 amended to read as follows:

6 ‘‘(I) a qualified participant in an

7 approved school-to-work program, or’’.

8 (2) QUALIFIED PARTICIPANT IN AN APPROVED

9 SCHOOL-TO-WORK PROGRAM.—Paragraph (10) of

10 section 51(d) is amended to read as follows:

11 ‘‘(10) QUALIFIED PARTICIPANT IN AN AP12 PROVED SCHOOL-TO-WORK PROGRAM DEFINED.—

13 ‘‘(A) IN GENERAL.—Except as otherwise

14 provided in this paragraph, the term ‘qualified

15 participant in an approved school-to-work pro16 gram’ means any individual who is certified

17 under an approved school-to-work program as—

18 ‘‘(i) having attained age 16 but not

19 having attained age 21, and

20 ‘‘(ii) being enrolled in and making

21 satisfactory progress in completing such

22 approved school-to-work program.

23 ‘‘(B) LIMITATION ON NUMBER OF PARTICI24 PANTS.—
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1 ‘‘(i) IN GENERAL.—Any individual

2 who begins work for the employer during

3 any calendar year shall not be treated as

4 a qualified participant in an approved

5 school-to-work program unless the individ6 ual is certified under such program as an

7 eligible participant with respect to such

8 calendar year.

9 ‘‘(ii) LIMITATION ON CERTIFI10 CATIONS.—The aggregate number of indi11 viduals certified under an approved school12 to-work program as eligible participants

13 with respect to any calendar year shall not

14 exceed the portion of the national school15 to-work program limitation for such cal16 endar year allocated under subsection (l)

17 to such program.

18 ‘‘(C) APPROVED SCHOOL-TO-WORK PRO19 GRAM.—The term ‘approved school-to-work pro20 gram’ means any program which—

21 ‘‘(i) is a planned program of struc22 tured job training designed to integrate

23 academic instruction provided by an edu24 cational institution and work-based learn25 ing provided by an employer, and
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1 ‘‘(ii) is approved by the Secretaries of

2 Labor and Education.

3 ‘‘(D) LIMITATION ON AMOUNT OF WAGES

4 TAKEN INTO ACCOUNT.—For purposes of apply5 ing this subpart to wages paid or incurred to

6 any qualified participant in an approved school7 to-work program, subsection (b)(3) shall be ap8 plied by substituting ‘$3,000’ for ‘$6,000’.

9 ‘‘(E) WAGES.—In the case of remunera10 tion attributable to services performed while the

11 individual meets the requirements of subpara12 graph (A), wages, and unemployment insurance

13 wages, shall be determined without regard to

14 section 3306(c)(10)(C).’’

15 (3) OVERALL LIMITATIONS.—Section 51 is

16 amended by adding at the end thereof the following

17 new subsection:

18 ‘‘(l) OVERALL LIMITATION ON APPROVED SCHOOL19 TO-WORK PROGRAM PARTICIPANTS.—

20 ‘‘(1) IN GENERAL.—For purposes of subsection

21 (d)(10), the national school-to-work program

22 limitation—

23 ‘‘(A) for calendar year 1994 is 125,000,

24 ‘‘(B) for calendar year 1995 is 140,000,

25 ‘‘(C) for calendar year 1996 is 160,000,
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1 ‘‘(D) for calendar year 1997 is 180,000,

2 and

3 ‘‘(E) for calendar year 1998 and any sub4 sequent calendar year is 200,000.

5 ‘‘(2) ALLOCATION TO STATES.—The national

6 school-to-work program limitation for any calendar

7 year shall be allocated among the States in propor8 tion to the number of their eligible participants that

9 are estimated to be served in approved school-to10 work programs for that year. Such estimates shall

11 be published by the Secretaries of Labor and Edu12 cation before the beginning of the calendar year to

13 which the allocation applies.

14 ‘‘(3) ALLOCATION TO APPROVED SCHOOL-TO15 WORK PROGRAMS.—The portion of the national

16 school-to-work program limitation for any calendar

17 year which is allocated to any State shall be allo18 cated among the approved school-to-work programs

19 in such State in such manner as the Secretaries of

20 Labor and Education shall prescribe.’’

21 (4) EFFECTIVE DATE.—The amendments made

22 by this subsection shall apply in the case of individ23 uals who begin work for the employer after Decem24 ber 31, 1993.
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1 PART II—INVESTMENT INCENTIVES

2 Subpart A—Research Credit

3 SEC. 14111. PERMANENT EXTENSION OF RESEARCH CRED4 IT.

5 (a) IN GENERAL.—Section 41 (relating to credit for

6 increasing research activities) is amended by striking sub7 section (h).

8 (b) CONFORMING AMENDMENT.—Paragraph (1) of

9 section 28(b) is amended by striking subparagraph (D).

10 (c) EFFECTIVE DATE.—The amendments made by

11 this section shall apply to taxable years ending after June

12 30, 1992.

13 SEC. 14112. MODIFICATION OF FIXED BASE PERCENTAGE

14 FOR STARTUP COMPANIES.

15 (a) GENERAL RULE.—Clause (ii) of section

16 41(c)(3)(B) is amended to read as follows:

17 ‘‘(ii) FIXED-BASE PERCENTAGE.—In a

18 case to which this subparagraph applies,

19 the fixed-base percentage is—

20 ‘‘(I) 3 percent for each of the

21 taxpayer’s 1st 5 taxable years begin22 ning after December 31, 1993, for

23 which the taxpayer has qualified re24 search expenses,

25 ‘‘(II) in the case of the tax26 payer’s 6th such taxable year, 1/6 of
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1 the percentage which the aggregate

2 qualified research expenses of the tax3 payer for the 4th and 5th such tax4 able years is of the aggregate gross

5 receipts of the taxpayer for such

6 years,

7 ‘‘(III) in the case of the tax8 payer’s 7th such taxable year, 1/3 of

9 the percentage which the aggregate

10 qualified research expenses of the tax11 payer for the 5th and 6th such tax12 able years is of the aggregate gross

13 receipts of the taxpayer for such

14 years,

15 ‘‘(IV) in the case of the tax16 payer’s 8th such taxable year, 1/2 of

17 the percentage which the aggregate

18 qualified research expenses of the tax19 payer for the 5th, 6th, and 7th such

20 taxable years is of the aggregate gross

21 receipts of the taxpayer for such

22 years,

23 ‘‘(V) in the case of the taxpayer’s

24 9th such taxable year, 2/3 of the per25 centage which the aggregate qualified
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1 research expenses of the taxpayer for

2 the 5th, 6th, 7th, and 8th such tax3 able years is of the aggregate gross

4 receipts of the taxpayer for such

5 years,

6 ‘‘(VI) in the case of the tax7 payer’s 10th such taxable year, 5/6 of

8 the percentage which the aggregate

9 qualified research expenses of the tax10 payer for the 5th, 6th, 7th, 8th, and

11 9th such taxable years is of the aggre12 gate gross receipts of the taxpayer for

13 such years, and

14 ‘‘(VII) for taxable years there15 after, the percentage which the aggre16 gate qualified research expenses for

17 any 5 taxable years selected by the

18 taxpayer from among the 5th through

19 the 10th such taxable years is of the

20 aggregate gross receipts of the tax21 payer for such selected years.’’.

22 (b) CONFORMING AMENDMENTS.—

23 (1) Clause (iii) of section 41(c)(3)(B) is amend24 ed by striking ‘‘clause (i)’’ and inserting ‘‘clauses (i)

25 and (ii)’’.
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1 (2) Subparagraph (D) of section 41(c)(3) is

2 amended by striking ‘‘subparagraph (A)’’ and insert3 ing ‘‘subparagraphs (A) and (B)(ii)’’.

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to taxable years beginning after

6 December 31, 1993.

7 Subpart B—Capital Gain Provisions

8 SEC. 14113. 50-PERCENT EXCLUSION FOR GAIN FROM CER9 TAIN SMALL BUSINESS STOCK.

10 (a) GENERAL RULE.—Part I of subchapter P of

11 chapter 1 (relating to capital gains and losses) is amended

12 by adding at the end thereof the following new section:

13 ‘‘SEC. 1202. 50-PERCENT EXCLUSION FOR GAIN FROM CER14 TAIN SMALL BUSINESS STOCK.

15 ‘‘(a) 50-PERCENT EXCLUSION.—In the case of a tax16 payer other than a corporation, gross income shall not in17 clude 50 percent of any gain from the sale or exchange

18 of qualified small business stock held for more than 5

19 years.

20 ‘‘(b) PER-ISSUER LIMITATION ON TAXPAYER’S ELI21 GIBLE GAIN.—

22 ‘‘(1) IN GENERAL.—If the taxpayer has eligible

23 gain for the taxable year from 1 or more dispositions

24 of stock issued by any corporation, the aggregate

25 amount of such gain from dispositions of stock is-
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1 sued by such corporation which may be taken into

2 account under subsection (a) for the taxable year

3 shall not exceed the greater of—

4 ‘‘(A) $10,000,000 reduced by the aggre5 gate amount of eligible gain taken into account

6 under subsection (a) for prior taxable years and

7 attributable to dispositions of stock issued by

8 such corporation, or

9 ‘‘(B) 10 times the aggregate adjusted

10 bases of qualified small business stock issued by

11 such corporation and disposed of by the tax12 payer during the taxable year.

13 For purposes of subparagraph (B), the adjusted

14 basis of any stock shall be determined without re15 gard to any addition to basis after the date on which

16 such stock was originally issued.

17 ‘‘(2) ELIGIBLE GAIN.—For purposes of this

18 subsection, the term ‘eligible gain’ means any gain

19 from the sale or exchange of qualified small business

20 stock held for more than 5 years.

21 ‘‘(3) TREATMENT OF MARRIED INDIVIDUALS.—

22 ‘‘(A) SEPARATE RETURNS.—In the case of

23 a separate return by a married individual, para24 graph (1)(A) shall be applied by substituting

25 ‘$5,000,000’ for ‘$10,000,000’.
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1 ‘‘(B) ALLOCATION OF EXCLUSION.—In the

2 case of any joint return, the amount of gain

3 taken into account under subsection (a) shall be

4 allocated equally between the spouses for pur5 poses of applying this subsection to subsequent

6 taxable years.

7 ‘‘(C) MARITAL STATUS.—For purposes of

8 this subsection, marital status shall be deter9 mined under section 7703.

10 ‘‘(c) QUALIFIED SMALL BUSINESS STOCK.—For pur11 poses of this section—

12 ‘‘(1) IN GENERAL.—Except as otherwise pro13 vided in this section, the term ‘qualified small busi14 ness stock’ means any stock in a C corporation

15 which is originally issued after December 31, 1992,

16 if—

17 ‘‘(A) as of the date of issuance, such cor18 poration is a qualified small business, and

19 ‘‘(B) except as provided in subsections (f)

20 and (h), such stock is acquired by the taxpayer

21 at its original issue (directly or through an un22 derwriter)—

23 ‘‘(i) in exchange for money or other

24 property (not including stock), or
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1 ‘‘(ii) as compensation for services pro2 vided to such corporation (other than serv3 ices performed as an underwriter of such

4 stock).

5 ‘‘(2) ACTIVE BUSINESS REQUIREMENT; ETC.—

6 ‘‘(A) IN GENERAL.—Stock in a corporation

7 shall not be treated as qualified small business

8 stock unless, during substantially all of the tax9 payer’s holding period for such stock, such cor10 poration meets the active business requirements

11 of subsection (e) and such corporation is a C

12 corporation.

13 ‘‘(B) SPECIAL RULE FOR CERTAIN SMALL

14 BUSINESS INVESTMENT COMPANIES.—

15 ‘‘(i) WAIVER OF ACTIVE BUSINESS RE16 QUIREMENT.—Notwithstanding any provi17 sion of subsection (e), a corporation shall

18 be treated as meeting the active business

19 requirements of such subsection for any

20 period during which such corporation

21 qualifies as a specialized small business in22 vestment company.

23 ‘‘(ii) SPECIALIZED SMALL BUSINESS

24 INVESTMENT COMPANY.—For purposes of

25 clause (i), the term ‘specialized small busi-
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1 ness investment company’ means any eligi2 ble corporation (as defined in subsection

3 (e)(4)) which is licensed to operate under

4 section 301(d) of the Small Business In5 vestment Act of 1958 (as in effect on May

6 13, 1993).

7 ‘‘(3) CERTAIN PURCHASES BY CORPORATION OF

8 ITS OWN STOCK.—

9 ‘‘(A) REDEMPTIONS FROM TAXPAYER OR

10 RELATED PERSON.—Stock acquired by the tax11 payer shall not be treated as qualified small

12 business stock if, at any time during the 4–year

13 period beginning on the date 2 years before the

14 issuance of such stock, the corporation issuing

15 such stock purchased (directly or indirectly) any

16 of its stock from the taxpayer or from a person

17 related (within the meaning of section 267(b) or

18 707(b)) to the taxpayer.

19 ‘‘(B) SIGNIFICANT REDEMPTIONS.—Stock

20 issued by a corporation shall not be treated as

21 qualified business stock if, during the 2–year

22 period beginning on the date 1 year before the

23 issuance of such stock, such corporation made

24 1 or more purchases of its stock with an aggre25 gate value (as of the time of the respective pur-
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1 chases) exceeding 5 percent of the aggregate

2 value of all of its stock as of the beginning of

3 such 2–year period.

4 ‘‘(C) ACQUISITIONS BY RELATED PER5 SONS.—For purposes of this paragraph, the

6 purchase by any person related (within the

7 meaning of section 267(b) or 707(b)) to the is8 suing corporation of any stock in the issuing

9 corporation shall be treated as a purchase by

10 the issuing corporation.

11 ‘‘(d) QUALIFIED SMALL BUSINESS.—For purposes of

12 this section—

13 ‘‘(1) IN GENERAL.—The term ‘qualified small

14 business’ means any domestic corporation which is a

15 C corporation if—

16 ‘‘(A) the aggregate capitalization of such

17 corporation (or any predecessor thereof) at all

18 times on or after January 1, 1993, and before

19 the issuance did not exceed $50,000,000,

20 ‘‘(B) the aggregate capitalization of such

21 corporation immediately after the issuance (de22 termined by taking into account amounts re23 ceived in the issuance) does not exceed

24 $50,000,000, and
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1 ‘‘(C) such corporation agrees to submit

2 such reports to the Secretary and to sharehold3 ers as the Secretary may require to carry out

4 the purposes of this section.

5 ‘‘(2) AGGREGATE CAPITALIZATION.—For pur6 poses of paragraph (1), the term ‘aggregate capital7 ization’ means the excess of—

8 ‘‘(A) the amount of cash and the aggregate

9 adjusted bases of other property held by the

10 corporation, over

11 ‘‘(B) the aggregate amount of the short12 term indebtedness of the corporation.

13 For purposes of the preceding sentence, the term

14 ‘short-term indebtedness’ means any indebtedness

15 which, when incurred, did not have a term in excess

16 of 1 year.

17 ‘‘(3) LOOK-THRU IN CASE OF SUBSIDIARIES.—

18 In determining whether a corporation meets the re19 quirements of this subsection—

20 ‘‘(A) stock and debt of any subsidiary (as

21 defined in subsection (e)(5)(C)) held by such

22 corporation shall be disregarded, and

23 ‘‘(B) such corporation shall be treated as

24 holding its ratable share of the assets of such
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1 subsidiary and as being liable for its ratable

2 share of the indebtedness of such subsidiary.

3 ‘‘(e) ACTIVE BUSINESS REQUIREMENT.—

4 ‘‘(1) IN GENERAL.—For purposes of subsection

5 (c)(2), the requirements of this subsection are met

6 by a corporation for any period if during such

7 period—

8 ‘‘(A) at least 80 percent (by value) of the

9 assets of such corporation are used by such cor10 poration in the active conduct of a qualified

11 trade or business, and

12 ‘‘(B) such corporation is an eligible cor13 poration.

14 ‘‘(2) SPECIAL RULE FOR CERTAIN ACTIVI15 TIES.—For purposes of paragraph (1), if, in connec16 tion with any future qualified trade or business, a

17 corporation is engaged in—

18 ‘‘(A) start-up activities described in section

19 195(c)(1)(A),

20 ‘‘(B) activities resulting in the payment or

21 incurring of expenditures which may be treated

22 as research and experimental expenditures

23 under section 174, or

24 ‘‘(C) activities with respect to in-house re25 search expenses described in section 41(b)(4),
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1 assets used in such activities shall be treated as used

2 in the active conduct of a qualified trade or busi3 ness. Any determination under this paragraph shall

4 be made without regard to whether a corporation

5 has any gross income from such activities at the

6 time of the determination.

7 ‘‘(3) QUALIFIED TRADE OR BUSINESS.—For

8 purposes of this subsection, the term ‘qualified trade

9 or business’ means any trade or business other

10 than—

11 ‘‘(A) any trade or business involving the

12 performance of services in the fields of health,

13 law, engineering, architecture, accounting, actu14 arial science, performing arts, consulting, ath15 letics, financial services, brokerage services, or

16 any other trade or business where the principal

17 asset of such trade or business is the reputation

18 or skill of 1 or more of its employees,

19 ‘‘(B) any banking, insurance, financing,

20 leasing, investing, or similar business,

21 ‘‘(C) any farming business (including the

22 business of raising or harvesting trees),

23 ‘‘(D) any business involving the production

24 or extraction of products of a character with re-
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1 spect to which a deduction is allowable under

2 section 613 or 613A, and

3 ‘‘(E) any business of operating a hotel,

4 motel, restaurant, or similar business.

5 ‘‘(4) ELIGIBLE CORPORATION.—For purposes

6 of this subsection, the term ‘eligible corporation’

7 means any domestic corporation; except that such

8 term shall not include—

9 ‘‘(A) a DISC or former DISC,

10 ‘‘(B) a corporation with respect to which

11 an election under section 936 is in effect,

12 ‘‘(C) a regulated investment company, real

13 estate investment trust, or REMIC, and

14 ‘‘(D) a cooperative.

15 ‘‘(5) STOCK IN OTHER CORPORATIONS.—

16 ‘‘(A) LOOK-THRU IN CASE OF SUBSIDI17 ARIES.—For purposes of this subsection, stock

18 and debt in any subsidiary corporation shall be

19 disregarded and the parent corporation shall be

20 deemed to own its ratable share of the subsidi21 ary’s assets, and to conduct its ratable share of

22 the subsidiary’s activities.

23 ‘‘(B) PORTFOLIO STOCK OR SECURITIES.—

24 A corporation shall be treated as failing to meet

25 the requirements of paragraph (1) for any pe-
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1 riod during which more than 10 percent of the

2 value of its assets (in excess of liabilities) con3 sists of stock or securities in other corporations

4 which are not subsidiaries of such corporation

5 (other than assets described in paragraph (6)).

6 ‘‘(C) SUBSIDIARY.—For purposes of this

7 paragraph, a corporation shall be considered a

8 subsidiary if the parent owns more than 50 per9 cent of the combined voting power of all classes

10 of stock entitled to vote, or more than 50 per11 cent in value of all outstanding stock, of such

12 corporation.

13 ‘‘(6) WORKING CAPITAL.—For purposes of

14 paragraph (1)(A), any assets which—

15 ‘‘(A) are held as a part of the reasonably

16 required working capital needs of a qualified

17 trade or business of the corporation, or

18 ‘‘(B) are held for investment and are rea19 sonably expected to be used within 2 years to

20 finance future research and experimentation in

21 a qualified trade or business or increases in

22 working capital needs of a qualified trade or

23 business,

24 shall be treated as used in the active conduct of a

25 qualified trade or business. For periods after the
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1 corporation has been in existence for at least 2

2 years, in no event may more than 50 percent of the

3 assets of the corporation qualify as used in the ac4 tive conduct of a qualified trade or business by rea5 son of this paragraph.

6 ‘‘(7) MAXIMUM REAL ESTATE HOLDINGS.—A

7 corporation shall not be treated as meeting the re8 quirements of paragraph (1) for any period during

9 which more than 10 percent of the total value of its

10 assets consists of real property which is not used in

11 the active conduct of a qualified trade or business.

12 For purposes of the preceding sentence, the owner13 ship of, dealing in, or renting of real property shall

14 not be treated as the active conduct of a qualified

15 trade or business.

16 ‘‘(8) COMPUTER SOFTWARE ROYALTIES.—For

17 purposes of paragraph (1), rights to computer soft18 ware which produces active business computer soft19 ware royalties (within the meaning of section

20 543(d)(1)) shall be treated as an asset used in the

21 active conduct of a trade or business.

22 ‘‘(f) STOCK ACQUIRED ON CONVERSION OF PRE23 FERRED STOCK.—If any stock in a corporation is acquired

24 solely through the conversion of other stock in such cor-
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1 poration which is qualified small business stock in the

2 hands of the taxpayer—

3 ‘‘(1) the stock so acquired shall be treated as

4 qualified small business stock in the hands of the

5 taxpayer, and

6 ‘‘(2) the stock so acquired shall be treated as

7 having been held during the period during which the

8 converted stock was held.

9 ‘‘(g) TREATMENT OF PASS-THRU ENTITIES.—

10 ‘‘(1) IN GENERAL.—If any amount included in

11 gross income by reason of holding an interest in a

12 pass-thru entity meets the requirements of para13 graph (2)—

14 ‘‘(A) such amount shall be treated as gain

15 described in subsection (a), and

16 ‘‘(B) for purposes of applying subsection

17 (b), such amount shall be treated as gain from

18 a disposition of stock in the corporation issuing

19 the stock disposed of by the pass-thru entity

20 and the taxpayer’s proportionate share of the

21 adjusted basis of the pass-thru entity in such

22 stock shall be taken into account.

23 ‘‘(2) REQUIREMENTS.—An amount meets the

24 requirements of this paragraph if—
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1 ‘‘(A) such amount is attributable to gain

2 on the sale or exchange by the pass-thru entity

3 of stock which is qualified small business stock

4 in the hands of such entity (determined by

5 treating such entity as an individual) and which

6 was held by such entity for more than 5 years,

7 and

8 ‘‘(B) such amount is includible in the gross

9 income of the taxpayer by reason of the holding

10 of an interest in such entity which was held by

11 the taxpayer on the date on which such pass12 thru entity acquired such stock and at all times

13 thereafter before the disposition of such stock

14 by such pass-thru entity.

15 ‘‘(3) LIMITATION BASED ON INTEREST ORIGI16 NALLY HELD BY TAXPAYER.—Paragraph (1) shall

17 not apply to any amount to the extent such amount

18 exceeds the amount to which paragraph (1) would

19 have applied if such amount were determined by ref20 erence to the interest the taxpayer held in the pass21 thru entity on the date the qualified small business

22 stock was acquired.

23 ‘‘(4) PASS-THRU ENTITY.—For purposes of this

24 subsection, the term ‘pass-thru entity’ means—

25 ‘‘(A) any partnership,
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1 ‘‘(B) any S corporation,

2 ‘‘(C) any regulated investment company,

3 and

4 ‘‘(D) any common trust fund.

5 ‘‘(h) CERTAIN TAX-FREE AND OTHER TRANS6 FERS.—For purposes of this section—

7 ‘‘(1) IN GENERAL.—In the case of a transfer

8 described in paragraph (2), the transferee shall be

9 treated as—

10 ‘‘(A) having acquired such stock in the

11 same manner as the transferor, and

12 ‘‘(B) having held such stock during any

13 continuous period immediately preceding the

14 transfer during which it was held (or treated as

15 held under this subsection) by the transferor.

16 ‘‘(2) DESCRIPTION OF TRANSFERS.—A transfer

17 is described in this subsection if such transfer is—

18 ‘‘(A) by gift,

19 ‘‘(B) at death, or

20 ‘‘(C) from a partnership to a partner of

21 stock with respect to which requirements simi22 lar to the requirements of subsection (g) are

23 met at the time of the transfer (without regard

24 to the 5-year holding period requirement).
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1 ‘‘(3) CERTAIN RULES MADE APPLICABLE.—

2 Rules similar to the rules of section 1244(d)(2) shall

3 apply for purposes of this section.

4 ‘‘(4) INCORPORATIONS AND REORGANIZATIONS

5 INVOLVING NONQUALIFIED STOCK.—

6 ‘‘(A) IN GENERAL.—In the case of a trans7 action described in section 351 or a reorganiza8 tion described in section 368, if qualified small

9 business stock is exchanged for other stock

10 which would not qualify as qualified small busi11 ness stock but for this subparagraph, such

12 other stock shall be treated as qualified small

13 business stock acquired on the date on which

14 the exchanged stock was acquired.

15 ‘‘(B) LIMITATION.—This section shall

16 apply to gain from the sale or exchange of stock

17 treated as qualified small business stock by rea18 son of subparagraph (A) only to the extent of

19 the gain which would have been recognized at

20 the time of the transfer described in subpara21 graph (A) if section 351 or 368 had not applied

22 at such time.

23 ‘‘(C) SUCCESSIVE APPLICATION.—For pur24 poses of this paragraph, stock treated as quali25 fied small business stock under subparagraph
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1 (A) shall be so treated for subsequent trans2 actions or reorganizations, except that the limi3 tation of subparagraph (B) shall be applied as

4 of the time of the first transfer to which sub5 paragraph (A) applied.

6 ‘‘(D) CONTROL TEST.—Except in the case

7 of a transaction described in section 368, this

8 paragraph shall apply only if, immediately after

9 the transaction, the corporation issuing the

10 stock owns directly or indirectly stock rep11 resenting control (within the meaning of section

12 368(c)) of the corporation whose stock was ex13 changed.

14 ‘‘(i) BASIS RULES.—For purposes of this section—

15 ‘‘(1) STOCK EXCHANGED FOR PROPERTY.—In

16 the case where the taxpayer transfers property

17 (other than money or stock) to a corporation in ex18 change for stock in such corporation—

19 ‘‘(A) such stock shall be treated as having

20 been acquired by the taxpayer on the date of

21 such exchange, and

22 ‘‘(B) the basis of such stock in the hands

23 of the taxpayer shall in no event be less than

24 the fair market value of the property ex25 changed.
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1 ‘‘(2) TREATMENT OF CONTRIBUTIONS TO CAP2 ITAL.—If the adjusted basis of any qualified small

3 business stock is adjusted by reason of any contribu4 tion to capital after the date on which such stock

5 was originally issued, in determining the amount of

6 the adjustment by reason of such contribution, the

7 basis of the contributed property shall in no event be

8 treated as less than its fair market value on the date

9 of the contribution.

10 ‘‘(j) TREATMENT OF CERTAIN SHORT POSITIONS.—

11 ‘‘(1) IN GENERAL.—If the taxpayer has an off12 setting short position with respect to any qualified

13 small business stock, subsection (a) shall not apply

14 to any gain from the sale or exchange of such stock

15 unless—

16 ‘‘(A) such stock was held by the taxpayer

17 for more than 5 years as of the first day on

18 which there was such a short position, and

19 ‘‘(B) the taxpayer elects to recognize gain

20 as if such stock were sold on such first day for

21 its fair market value.

22 ‘‘(2) OFFSETTING SHORT POSITION.—For pur23 poses of paragraph (1), the taxpayer shall be treated

24 as having an offsetting short position with respect to

25 any qualified small business stock if—
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1 ‘‘(A) the taxpayer has made a short sale of

2 substantially identical property,

3 ‘‘(B) the taxpayer has acquired an option

4 to sell substantially identical property at a fixed

5 price, or

6 ‘‘(C) to the extent provided in regulations,

7 the taxpayer has entered into any other trans8 action which substantially reduces the risk of

9 loss from holding such qualified small business

10 stock.

11 For purposes of the preceding sentence, any ref12 erence to the taxpayer shall be treated as including

13 a reference to any person who is related (within the

14 meaning of section 267(b) or 707(b)) to the tax15 payer.

16 ‘‘(k) REGULATIONS.—The Secretary shall prescribe

17 such regulations as may be appropriate to carry out the

18 purposes of this section, including regulations to prevent

19 the avoidance of the purposes of this section through split20 ups, shell corporations, partnerships, or otherwise.’’

21 (b) ONE-HALF OF EXCLUSION TREATED AS PREF22 ERENCE FOR MINIMUM TAX.—

23 (1) IN GENERAL.—Subsection (a) of section 57

24 (relating to items of tax preference) is amended by
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1 adding at the end thereof the following new para2 graph:

3 ‘‘(8) EXCLUSION FOR GAINS ON SALE OF CER4 TAIN SMALL BUSINESS STOCK.—An amount equal to

5 one-half of the amount excluded from gross income

6 for the taxable year under section 1202.’’

7 (2) CONFORMING AMENDMENT.—Subclause (II)

8 of section 53(d)(1)(B)(ii) is amended by striking

9 ‘‘and (6)’’ and inserting ‘‘(6), and (8)’’.

10 (c) PENALTY FOR FAILURE TO COMPLY WITH RE11 PORTING REQUIREMENTS.—Section 6652 is amended by

12 inserting before the last subsection thereof the following

13 new subsection:

14 ‘‘(k) FAILURE TO MAKE REPORTS REQUIRED

15 UNDER SECTION 1202.—In the case of a failure to make

16 a report required under section 1202(d)(1)(C) which con17 tains the information required by such section on the date

18 prescribed therefor (determined with regard to any exten19 sion of time for filing), there shall be paid (on notice and

20 demand by the Secretary and in the same manner as tax)

21 by the person failing to make such report, an amount

22 equal to $50 for each report with respect to which there

23 was such a failure. In the case of any failure due to neg24 ligence or intentional disregard, the preceding sentence

25 shall be applied by substituting ‘$100’ for ‘$50’. In the
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1 case of a report covering periods in 2 or more years, the

2 penalty determined under preceding provisions of this sub3 section shall be multiplied by the number of such years.’’

4 (d) CONFORMING AMENDMENTS.—

5 (1)(A) Section 172(d)(2) (relating to modifica6 tions with respect to net operating loss deduction) is

7 amended to read as follows:

8 ‘‘(2) CAPITAL GAINS AND LOSSES OF TAX9 PAYERS OTHER THAN CORPORATIONS.—In the case

10 of a taxpayer other than a corporation—

11 ‘‘(A) the amount deductible on account of

12 losses from sales or exchanges of capital assets

13 shall not exceed the amount includable on ac14 count of gains from sales or exchanges of cap15 ital assets; and

16 ‘‘(B) the exclusion provided by section

17 1202 shall not be allowed.’’

18 (B) Subparagraph (B) of section 172(d)(4) is

19 amended by inserting ‘‘, (2)(B),’’ after ‘‘paragraph

20 (1)’’.

21 (2) Paragraph (4) of section 642(c) is amended

22 to read as follows:

23 ‘‘(4) ADJUSTMENTS.—To the extent that the

24 amount otherwise allowable as a deduction under

25 this subsection consists of gain described in section
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1 1202(a), proper adjustment shall be made for any

2 exclusion allowable to the estate or trust under sec3 tion 1202. In the case of a trust, the deduction al4 lowed by this subsection shall be subject to section

5 681 (relating to unrelated business income).’’

6 (3) Paragraph (3) of section 643(a) is amended

7 by adding at the end thereof the following new sen8 tence: ‘‘The exclusion under section 1202 shall not

9 be taken into account.’’.

10 (4) Paragraph (4) of section 691(c) is amended

11 by striking ‘‘1201, and 1211’’ and inserting ‘‘1201,

12 1202, and 1211’’.

13 (5) The second sentence of paragraph (2) of

14 section 871(a) is amended by inserting ‘‘such gains

15 and losses shall be determined without regard to sec16 tion 1202 and’’ after ‘‘except that’’.

17 (6) The table of sections for part I of sub18 chapter P of chapter 1 is amended by adding after

19 the item relating to section 1201 the following new

20 item:

‘‘Sec. 1202. 50-percent exclusion for gain from certain small business stock.’’

21 (e) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to stock issued after December 31,

23 1992.
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1 SEC. 14114. ROLLOVER OF GAIN FROM SALE OF PUBLICLY

2 TRADED SECURITIES INTO SPECIALIZED

3 SMALL BUSINESS INVESTMENT COMPANIES.

4 (a) IN GENERAL.—Part III of subchapter O of chap5 ter 1 (relating to common nontaxable exchanges) is

6 amended by adding at the end the following new section:

7 ‘‘SEC. 1044. ROLLOVER OF PUBLICLY TRADED SECURITIES

8 GAIN INTO SPECIALIZED SMALL BUSINESS

9 INVESTMENT COMPANIES.

10 ‘‘(a) NONRECOGNITION OF GAIN.—In the case of the

11 sale of any publicly traded securities with respect to which

12 the taxpayer elects the application of this section, gain

13 from such sale shall be recognized only to the extent that

14 the amount realized on such sale exceeds—

15 ‘‘(1) the cost of any common stock or partner16 ship interest in a specialized small business invest17 ment company purchased by the taxpayer during the

18 60-day period beginning on the date of such sale,

19 reduced by

20 ‘‘(2) any portion of such cost previously taken

21 into account under this section.

22 This section shall not apply to any gain which is treated

23 as ordinary income for purposes of this subtitle.

24 ‘‘(b) LIMITATIONS.—

25 ‘‘(1) LIMITATION ON INDIVIDUALS.—In the

26 case of an individual, the amount of gain which may
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1 be excluded under subsection (a) for any taxable

2 year shall not exceed the lesser of—

3 ‘‘(A) $50,000, or

4 ‘‘(B) $500,000, reduced by the amount of

5 gain excluded under subsection (a) for all pre6 ceding taxable years.

7 ‘‘(2) LIMITATION ON C CORPORATIONS.—In the

8 case of a C corporation, the amount of gain which

9 may be excluded under subsection (a) for any tax10 able year shall not exceed the lesser of—

11 ‘‘(A) $250,000, or

12 ‘‘(B) $1,000,000, reduced by the amount

13 of gain excluded under subsection (a) for all

14 preceding taxable years.

15 ‘‘(3) SPECIAL RULES FOR MARRIED INDIVID16 UALS.—For purposes of this subsection—

17 ‘‘(A) SEPARATE RETURNS.—In the case of

18 a separate return by a married individual, para19 graph (1) shall be applied by substituting

20 ‘$25,000’ for ‘$50,000’ and ‘$250,000’ for

21 ‘$500,000’.

22 ‘‘(B) ALLOCATION OF GAIN.—In the case

23 of any joint return, the amount of gain ex24 cluded under subsection (a) for any taxable

25 year shall be allocated equally between the
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1 spouses for purposes of applying this subsection

2 to subsequent taxable years.

3 ‘‘(C) MARITAL STATUS.—For purposes of

4 this subsection, marital status shall be deter5 mined under section 7703.

6 ‘‘(4) SPECIAL RULES FOR C CORPORATION.—

7 For purposes of this subsection—

8 ‘‘(A) all corporations which are members

9 of the same controlled group of corporations

10 (within the meaning of section 52(a)) shall be

11 treated as 1 taxpayer, and

12 ‘‘(B) any gain excluded under subsection

13 (a) by a predecessor of any C corporation shall

14 be treated as having been excluded by such C

15 corporation.

16 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur17 poses of this section—

18 ‘‘(1) PUBLICLY TRADED SECURITIES.—The

19 term ‘publicly traded securities’ means securities

20 which are traded on an established securities

21 market.

22 ‘‘(2) PURCHASE.—The term ‘purchase’ has the

23 meaning given such term by section 1043(b)(4).

24 ‘‘(3) SPECIALIZED SMALL BUSINESS INVEST25 MENT COMPANY.—The term ‘specialized small busi-
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1 ness investment company’ means any partnership or

2 corporation which is licensed by the Small Business

3 Administration under section 301(d) of the Small

4 Business Investment Act of 1958 (as in effect on

5 May 13, 1993).

6 ‘‘(4) CERTAIN ENTITIES NOT ELIGIBLE.—This

7 section shall not apply to any estate, trust, partner8 ship, or S corporation.

9 ‘‘(d) BASIS ADJUSTMENTS.—If gain from any sale is

10 not recognized by reason of subsection (a), such gain shall

11 be applied to reduce (in the order acquired) the basis for

12 determining gain or loss of any common stock or partner13 ship interest in any specialized small business investment

14 company which is purchased by the taxpayer during the

15 60-day period described in subsection (a). This subsection

16 shall not apply for purposes of section 1202.’’

17 (b) CONFORMING AMENDMENT.—Paragraph (24) of

18 section 1016(a) is amended—

19 (1) by striking ‘‘section 1043’’ and inserting

20 ‘‘section 1043 or 1044’’, and

21 (2) by striking ‘‘section 1043(c)’’ and inserting

22 ‘‘section 1043(c) or 1044(d), as the case may be’’.

23 (c) CLERICAL AMENDMENT.—The table of sections

24 for part III of subchapter O of chapter 1 is amended by

25 adding at the end the following new item:
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‘‘Sec. 1044. Rollover of publicly traded securities gain into specialized small business investment companies.’’

1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to sales on and after the date of

3 the enactment of this Act, in taxable years ending on and

4 after such date.

5 Subpart C—Modifications To Minimum Tax

6 Depreciation Rules

7 SEC. 14115. MODIFICATION TO MINIMUM TAX DEPRECIA8 TION RULES.

9 (a) GENERAL RULE.—Paragraph (1) of section 56(a)

10 (relating to depreciation) is amended by redesignating

11 subparagraphs (B), (C), and (D) as subparagraphs (C),

12 (D), and (E), respectively, and by inserting after subpara13 graph (A) the following new subparagraph:

14 ‘‘(B) TREATMENT OF CERTAIN PERSONAL

15 PROPERTY PLACED IN SERVICE AFTER 1993.—

16 ‘‘(i) IN GENERAL.—In the case of any

17 property to which this subparagraph ap18 plies, the depreciation deduction allowable

19 under section 167 shall be determined as

20 provided in section 168(a), except that the

21 method of depreciation used shall be—

22 ‘‘(I) the 120 percent declining

23 balance method switching to the

24 straight line method for the 1st tax-
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1 able year for which using the straight

2 line method with respect to the ad3 justed basis as of the beginning of the

4 year will yield a higher allowance, or

5 ‘‘(II) the straight line method in

6 the case of property for which the ap7 plicable depreciation method under

8 section 168(a) is the straight line

9 method.

10 ‘‘(ii) PROPERTY TO WHICH SUBPARA11 GRAPH APPLIES.—This subparagraph shall

12 apply to any tangible property placed in

13 service after December 31, 1993, except

14 that this subparagraph shall not apply

15 to—

16 ‘‘(I) any residential rental prop17 erty or nonresidential real property

18 (within the meaning of section

19 168(e)), and

20 ‘‘(II) any other property for

21 which the depreciation deduction pro22 vided by section 167(a) for purposes

23 of the regular tax is computed under

24 the alternative depreciation system of

25 section 168(g).
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1 ‘‘(iii) COORDINATION WITH SUBPARA2 GRAPH (A).—Subparagraph (A) shall not

3 apply to any property to which this sub4 paragraph applies.’’

5 (b) ELIMINATION OF ACE DEPRECIATION ADJUST6 MENT.—Clause (i) of section 56(g)(4)(A) (relating to de7 preciation adjustments for computing adjusted current

8 earnings) is amended by adding at the end thereof the

9 following new sentence: ‘‘The preceding sentence shall not

10 apply to any property to which subsection (a)(1)(B) ap11 plies, and the depreciation deduction with respect to such

12 property shall be determined under the rules of subsection

13 (a)(1)(B).’’.

14 (c) CONFORMING AMENDMENTS.—

15 (1) Paragraph (2) of section 168(b) is amended

16 to read as follows:

17 ‘‘(2) SPECIAL RULE FOR DECLINING BALANCE

18 METHOD IN CERTAIN CASES.—

19 ‘‘(A) 150 PERCENT METHOD FOR CERTAIN

20 PROPERTY.—Paragraph (1) shall be applied by

21 substituting ‘150 percent’ for ‘200 percent’ in

22 the case of—

23 ‘‘(i) any 15-year or 20-year property,

24 or
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1 ‘‘(ii) any property used in a farming

2 business (within the meaning of section

3 263A(e)(4)).

4 ‘‘(B) ELECTION TO USE MINIMUM TAX

5 METHOD.—In the case of any property (other

6 than property described in paragraph (3)) with

7 respect to which the taxpayer elects under para8 graph (5) to have the provisions of this sub9 paragraph apply, paragraph (1) shall be applied

10 by substituting ‘120 percent’ for ‘200 percent’

11 (and subparagraph (A) of this paragraph shall

12 not apply).’’

13 (2) Paragraph (5) of section 168(b) is amended

14 by striking ‘‘paragraph (2)(C)’’ and inserting ‘‘para15 graph (2)(B)’’.

16 (3) Subsection (c) of section 168 is amended—

17 (A) by striking paragraph (2), and

18 (B) by striking so much of such subsection

19 as precedes the table contained in paragraph

20 (1) and inserting the following:

21 ‘‘(c) APPLICABLE RECOVERY PERIOD.—For purposes

22 of this section, the applicable recovery period shall be de23 termined in accordance with the following table:’’.

24 (d) EFFECTIVE DATES.—
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1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendments made by this section

3 shall apply to property placed in service after

4 December 31, 1993.

5 (2) COORDINATION WITH TRANSITIONAL

6 RULES.—The amendments made by this section

7 shall not apply to any property to which paragraph

8 (1) of section 56(a) of the Internal Revenue Code of

9 1986 does not apply by reason of subparagraph

10 (D)(i) thereof (as redesignated by subsection (a) of

11 this section).

12 Subpart D—Increase in Expense Treatment for Small

13 Businesses

14 SEC. 14116. INCREASE IN EXPENSE TREATMENT FOR SMALL

15 BUSINESSES.

16 (a) GENERAL RULE.—Paragraph (1) of section

17 179(b) (relating to dollar limitation) is amended by strik18 ing ‘‘$10,000’’ and inserting ‘‘$25,000’’.

19 (b) EFFECTIVE DATE.—The amendment made by

20 subsection (a) shall apply to taxable years beginning after

21 December 31, 1992.
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1 PART III—TAX-EXEMPT BOND PROVISIONS

2 SEC. 14121. HIGH-SPEED INTERCITY RAIL FACILITY BONDS

3 EXEMPT FROM STATE VOLUME CAP.

4 (a) IN GENERAL.—Paragraph (4) of section 146(g)

5 (relating to exemption for certain bonds) is amended by

6 striking ‘‘75 percent of’’.

7 (b) EFFECTIVE DATE.—The amendment made by

8 subsection (a) shall apply to bonds issued after December

9 31, 1993.

10 SEC. 14122. PERMANENT EXTENSION OF QUALIFIED SMALL

11 ISSUE BONDS.

12 (a) IN GENERAL.—Subparagraph (B) of section

13 144(a)(12) is amended to read as follows:

14 ‘‘(B) BONDS ISSUED TO FINANCE

15 MANUFACTURING FACILITIES AND FARM

16 PROPERTY.—Subparagraph (A) shall not

17 apply to any bond issued as part of an

18 issue 95 percent or more of the net pro19 ceeds of which are to be used to provide—

20 ‘‘(i) any manufacturing facility, or

21 ‘‘(ii) any land or property in accord22 ance with section 147(c)(2).’’.

23 (b) EFFECTIVE DATE.—The amendment made by

24 subsection (a) shall apply to bonds issued after June 30,

25 1992.
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1 PART IV—EXPANSION AND SIMPLIFICATION OF

2 EARNED INCOME TAX CREDIT

3 SEC. 14131. EXPANSION AND SIMPLIFICATION OF EARNED

4 INCOME TAX CREDIT.

5 (a) GENERAL RULE.—Section 32 (relating to earned

6 income credit) is amended by striking subsections (a) and

7 (b) and inserting the following:

8 ‘‘(a) ALLOWANCE OF CREDIT.—

9 ‘‘(1) IN GENERAL.—In the case of an eligible

10 individual, there shall be allowed as a credit against

11 the tax imposed by this subtitle for the taxable year

12 an amount equal to the credit percentage of so much

13 of the taxpayer’s earned income for the taxable year

14 as does not exceed the earned income amount.

15 ‘‘(2) LIMITATION.—The amount of the credit

16 allowable to a taxpayer under paragraph (1) for any

17 taxable year shall not exceed the excess (if any) of—

18 ‘‘(A) the credit percentage of the earned

19 income amount, over

20 ‘‘(B) the phaseout percentage of so much

21 of the adjusted gross income (or, if greater, the

22 earned income) of the taxpayer for the taxable

23 year as exceeds the phaseout amount.

24 ‘‘(b) PERCENTAGES AND AMOUNTS.—For purposes

25 of subsection (a)—
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1 ‘‘(1) PERCENTAGES.—The credit percentage

2 and the phaseout percentage shall be determined as

3 follows:

4 ‘‘(A) IN GENERAL.—In the case of taxable

5 years beginning after 1994:

In the case of an eligible individual with:The credit percentage

is:

The phaseout percentage is:

1 qualifying child ..... 34.37 ........................... 16.16

2 or more qualifying

children ................

39.66 ........................... 19.83

No qualifying children ......................

7.65 ........................... 7.65

6 ‘‘(B) TRANSITIONAL PERCENTAGES.—In

7 the case of a taxable year beginning in 1994:

In the case of an

eligible individual

with:

The credit percentage

is:

The phaseout percentage is:

1 qualifying child 26.60 ........................... 16.16

2 or more qualifying children .....31.59 ........................... 15.79

No qualifying children .................7.65 ........................... 7.65

8 ‘‘(2) AMOUNTS.—The earned income amount

9 and the phaseout amount shall be determined as fol10 lows:

11 ‘‘(A) IN GENERAL.—In the case of taxable

12 years beginning after 1994:

In the case of an eligible individual with:The earned income

amount is:

The phaseout amount

is:

1 qualifying child ..... $6,000 ......................... $11,000

2 or more qualifying

children ................

$8,500 ......................... $11,000

No qualifying children ......................

$4,000 ......................... $5,000
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1 ‘‘(B) TRANSITIONAL AMOUNTS.—In the

2 case of a taxable year beginning in 1994:

In the case of an

eligible individual

with:

The earned income

amount is:

The phaseout amount

is:

1 qualifying child $7,750 ......................... $11,000

2 or more qualifying children .....$8,500 ......................... $11,000

No qualifying children .................$4,000 ......................... $5,000’’.

3 (b) ELIGIBLE INDIVIDUAL.—Subparagraph (A) of

4 section 32(c)(1) (defining eligible individual) is amended

5 to read as follows:

6 ‘‘(A) IN GENERAL.—The term ‘eligible in7 dividual’ means—

8 ‘‘(i) any individual who has a qualify9 ing child for the taxable year, or

10 ‘‘(ii) any other individual who does

11 not have a qualifying child for the taxable

12 year, if—

13 ‘‘(I) such individual’s principal

14 place of abode is in the United States

15 for more than one-half of such taxable

16 year,

17 ‘‘(II) such individual (or, if the

18 individual is married, the individual’s

19 spouse) has attained age 22 before

20 the close of the taxable year, and
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1 ‘‘(III) such individual (or, if the

2 individual is married, the individual’s

3 spouse) is not a dependent for whom

4 a deduction is allowable under section

5 151 to another taxpayer for any tax6 able year beginning in the same cal7 endar year as such taxable year.’’

8 (c) INFLATION ADJUSTMENTS.—Section 32(i) (relat9 ing to inflation adjustments) is amended—

10 (1) by striking paragraphs (1) and (2) and in11 serting the following new paragraph:

12 ‘‘(1) IN GENERAL.—In the case of any taxable

13 year beginning after 1994, each dollar amount con14 tained in subsection (b)(2)(A) shall be increased by

15 an amount equal to—

16 ‘‘(A) such dollar amount, multiplied by

17 ‘‘(B) the cost-of-living adjustment deter18 mined under section 1(f)(3), for the calendar

19 year in which the taxable year begins, by sub20 stituting ‘calendar year 1993’ for ‘calendar year

21 1992’.’’, and

22 (2) by redesignating paragraph (3) as para23 graph (2).

24 (d) CONFORMING AMENDMENTS.—
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1 (1) Subparagraph (D) of section 32(c)(3) is

2 amended—

3 (A) by striking ‘‘clause (i) or (ii)’’ in clause

4 (iii) and inserting ‘‘clause (i)’’,

5 (B) by striking clause (ii), and

6 (C) by redesignating clause (iii) as clause

7 (ii).

8 (2) Paragraph (3) of section 162(l) is amended

9 to read as follows:

10 ‘‘(3) COORDINATION WITH MEDICAL DEDUC11 TION.—Any amount paid by a taxpayer for insur12 ance to which paragraph (1) applies shall not be

13 taken into account in computing the amount allow14 able to the taxpayer as a deduction under section

15 213(a).’’

16 (3) Section 213 is amended by striking sub17 section (f).

18 (4) Subsection (b) of section 3507 is amended

19 by redesignating paragraphs (2) and (3) as para20 graphs (3) and (4), respectively, and by inserting

21 after paragraph (1) the following new paragraph:

22 ‘‘(2) certifies that the employee has 1 or more

23 qualifying children (within the meaning of section

24 32(c)(3)) for such taxable year,’’.
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1 (5) Subparagraph (B) of section 3507(c)(2) is

2 amended by striking clauses (i) and (ii) and insert3 ing the following:

4 ‘‘(i) of not more than the credit per5 centage in effect under section 32(b)(1) for

6 an eligible individual with 1 qualifying

7 child and with earned income not in excess

8 of the earned income amount in effect

9 under section 32(b)(2) for such an eligible

10 individual, which

11 ‘‘(ii) phases out at the phaseout per12 centage in effect under section 32(b)(1) for

13 such an eligible individual between the

14 phaseout amount in effect under section

15 32(b)(2) for such an eligible individual and

16 the amount of earned income at which the

17 credit under section 32(a) phases out for

18 such an eligible individual, or’’.

19 (e) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to taxable years beginning after

21 December 31, 1993.
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1 PART V—INCENTIVES FOR INVESTMENT IN REAL

2 ESTATE

3 Subpart A—Extension of Qualified Mortgage Bonds

4 and Low-Income Housing Credit

5 SEC. 14141. PERMANENT EXTENSION OF QUALIFIED MORT6 GAGE BONDS.

7 (a) IN GENERAL.—Paragraph (1) of section 143(a)

8 (defining qualified mortgage bond) is amended to read as

9 follows:

10 ‘‘(1) QUALIFIED MORTGAGE BOND DEFINED.—

11 For purposes of this title, the term ‘qualified mort12 gage bond’ means a bond which is issued as part of

13 a qualified mortgage issue.’’

14 (b) MORTGAGE CREDIT CERTIFICATES.—Section 25

15 is amended by striking subsection (h) and by redesignat16 ing subsections (i) and (j) as subsections (h) and (i), re17 spectively.

18 (c) EFFECTIVE DATES.—

19 (1) BONDS.—The amendment made by sub20 section (a) shall apply to bonds issued after June

21 30, 1992.

22 (2) CERTIFICATES.—The amendment made by

23 subsection (b) shall apply to elections for periods

24 after June 30, 1992.
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1 SEC. 14142. PERMANENT EXTENSION OF LOW-INCOME

2 HOUSING CREDIT.

3 (a) IN GENERAL.—Section 42 (relating to low-income

4 housing credit) is amended by striking subsection (o).

5 (b) HOME ASSISTANCE NOT TO RESULT IN CER6 TAIN BUILDINGS BEING FEDERALLY SUBSIDIZED.—

7 Paragraph (2) of section 42(i) (relating to determination

8 of whether building is federally subsidized) is amended by

9 adding at the end thereof the following new subparagraph:

10 ‘‘(E) BUILDINGS RECEIVING HOME ASSIST11 ANCE.—Assistance provided under the HOME

12 Investment Partnerships Act (as in effect on

13 the date of the enactment of this subparagraph)

14 with respect to any building shall not be taken

15 under subparagraph (D) if 40 percent or more

16 of the residential units in the building are occu17 pied by individuals whose income is 50 percent

18 or less of area median gross income. Subsection

19 (d)(5)(C) shall not apply to any building to

20 which the preceding sentence applies.’’.

21 (c) EFFECTIVE DATES.—

22 (1) The amendment made by subsection (a)

23 shall apply to periods after June 30, 1992.

24 (2) The amendment made by subsection (b)

25 shall apply to periods after the date of the enact26 ment of this Act.
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1 Subpart B—Modification of Passive Loss Rules

2 SEC. 14143. APPLICATION OF PASSIVE LOSS RULES TO

3 RENTAL REAL ESTATE ACTIVITIES.

4 (a) RENTAL REAL ESTATE ACTIVITIES OF PERSONS

5 IN REAL PROPERTY BUSINESS NOT AUTOMATICALLY

6 TREATED AS PASSIVE ACTIVITIES.—Subsection (c) of sec7 tion 469 (defining passive activity) is amended by adding

8 at the end thereof the following new paragraph:

9 ‘‘(7) SPECIAL RULES FOR TAXPAYERS IN REAL

10 PROPERTY BUSINESS—

11 ‘‘(A) IN GENERAL.—If this paragraph ap12 plies to any taxpayer for a taxable year—

13 ‘‘(i) paragraph (2) shall not apply to

14 any rental real estate activity of such tax15 payer for such taxable year, and

16 ‘‘(ii) this section shall be applied as if

17 each interest of the taxpayer in rental real

18 estate were a separate activity.

19 Notwithstanding clause (ii), a taxpayer may

20 elect to treat all interests in rental real estate

21 as one activity. Nothing in the preceding provi22 sions of this subparagraph shall be construed as

23 affecting the determination of whether the tax24 payer materially participates with respect to

25 any interest in a limited partnership as a lim26 ited partner.
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1 ‘‘(B) TAXPAYERS TO WHOM PARAGRAPH

2 APPLIES.—This paragraph shall apply to a tax3 payer for a taxable year if more than one-half

4 of the personal services performed in trades or

5 businesses by the taxpayer during such taxable

6 year are performed in real property trades or

7 businesses in which the taxpayer materially par8 ticipates.

9 ‘‘(C) REAL PROPERTY TRADE OR BUSI10 NESS.—For purposes of this paragraph, the

11 term ‘real property trade or business’ means

12 any real property development, redevelopment,

13 construction, reconstruction, acquisition, con14 version, rental, operation, management, leasing,

15 or brokerage trade or business.

16 ‘‘(D) SPECIAL RULES FOR SUBPARAGRAPH

17 (B).—

18 ‘‘(i) CLOSELY HELD C CORPORA19 TIONS.—In the case of a closely held C

20 corporation, the requirements of subpara21 graph (B) shall be treated as met for any

22 taxable year if more than 50 percent of the

23 gross receipts of such corporation for such

24 taxable year are derived from real property
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1 trades or businesses in which the corpora2 tion materially participates.

3 ‘‘(ii) PERSONAL SERVICES AS AN EM4 PLOYEE.—For purposes of subparagraph

5 (B), personal services performed as an em6 ployee shall not be treated as performed in

7 real property trades or businesses. The

8 preceding sentence shall not apply if such

9 employee is a 5-percent owner (as defined

10 in section 416(i)(1)(B)) in the employer.’’

11 (b) CONFORMING AMENDMENTS.—

12 (1) Paragraph (2) of section 469(c) is amended

13 by striking ‘‘The’’ and inserting ‘‘Except as provided

14 in paragraph (7), the’’.

15 (2) Clause (iv) of section 469(i)(3)(E) is

16 amended by inserting ‘‘or any loss allowable by rea17 son of subsection (c)(7)’’ after ‘‘loss’’.

18 (c) EFFECTIVE DATE.—The amendments made by

19 this section shall apply to taxable years beginning after

20 December 31, 1993.
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1 Subpart C—Provisions Relating to Real Estate

2 Investments by Pension Funds

3 SEC. 14144. REAL ESTATE PROPERTY ACQUIRED BY A

4 QUALIFIED ORGANIZATION.

5 (a) MODIFICATIONS OF EXCEPTIONS.—Paragraph

6 (9) of section 514(c) (relating to real property acquired

7 by a qualified organization) is amended by adding at the

8 end thereof the following new subparagraphs:

9 ‘‘(G) SPECIAL RULES FOR PURPOSES OF

10 THE EXCEPTIONS.—Except as otherwise pro11 vided by regulations—

12 ‘‘(i) SMALL LEASES DISREGARDED.—

13 For purposes of clauses (iii) and (iv) of

14 subparagraph (B), a lease to a person de15 scribed in such clause (iii) or (iv) shall be

16 disregarded if no more than 25 percent of

17 the leasable floor space in a building (or

18 complex of buildings) is covered by the

19 lease and if the lease is on commercially

20 reasonable terms.

21 ‘‘(ii) COMMERCIALLY REASONABLE FI22 NANCING.—Clause (v) of subparagraph (B)

23 shall not apply if the financing is on com24 mercially reasonable terms.

25 ‘‘(H) QUALIFYING SALES BY FINANCIAL

26 INSTITUTIONS.—
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1 ‘‘(i) IN GENERAL.—In the case of a

2 qualifying sale by a financial institution,

3 except as provided in regulations, clauses

4 (i) and (ii) of subparagraph (B) shall not

5 apply with respect to financing provided by

6 such institution for such sale.

7 ‘‘(ii) QUALIFYING SALE.—For pur8 poses of this clause, there is a qualifying

9 sale by a financial institution if—

10 ‘‘(I) a qualified organization ac11 quires property described in clause

12 (iii) from a financial institution and

13 any gain recognized by the financial

14 institution with respect to the prop15 erty is ordinary income,

16 ‘‘(II) the stated principal amount

17 of the financing provided by the finan18 cial institution does not exceed the

19 amount of the outstanding indebted20 ness (including accrued but unpaid in21 terest) of the financial institution with

22 respect to the property described in

23 clause (iii) immediately before the ac24 quisition referred to in clause (iii) or

25 (v), whichever is applicable, and
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1 ‘‘(III) the present value (deter2 mined as of the time of the sale and

3 by using the applicable Federal rate

4 determined under section 1274(d)) of

5 the maximum amount payable pursu6 ant to the financing that is deter7 mined by reference to the revenue, in8 come, or profits derived from the

9 property cannot exceed 30 percent of

10 the total purchase price of the prop11 erty (including the contingent pay12 ments).

13 ‘‘(iii) PROPERTY TO WHICH SUBPARA14 GRAPH APPLIES.—Property is described in

15 this clause if such property is foreclosure

16 property, or is real property which—

17 ‘‘(I) was acquired by the quali18 fied organization from a financial in19 stitution which is in conservatorship

20 or receivership, or from the conserva21 tor or receiver of such an institution,

22 and

23 ‘‘(II) was held by the financial

24 institution at the time it entered into

25 conservatorship or receivership.
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1 ‘‘(iv) FINANCIAL INSTITUTION.—For

2 purposes of this subparagraph, the term

3 ‘financial institution’ means—

4 ‘‘(I) any financial institution de5 scribed in section 581 or 591(a),

6 ‘‘(II) any other corporation which

7 is a direct or indirect subsidiary of an

8 institution referred to in subclause (I)

9 but only if, by virtue of being affili10 ated with such institution, such other

11 corporation is subject to supervision

12 and examination by a Federal or

13 State agency which regulates institu14 tions referred to in subclause (I), and

15 ‘‘(III) any person acting as a

16 conservator or receiver of an entity re17 ferred to in subclause (I) or (II) (or

18 any government agency or corporation

19 succeeding to the rights or interest of

20 such person).

21 ‘‘(v) FORECLOSURE PROPERTY.—For

22 purposes of this subparagraph, the term

23 ‘foreclosure property’ means any real prop24 erty acquired by the financial institution as

25 the result of having bid on such property
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1 at foreclosure, or by operation of an agree2 ment or process of law, after there was a

3 default (or a default was imminent) on in4 debtedness which such property secured.’’.

5 (b) CONFORMING AMENDMENT.—Paragraph (9) of

6 section 514(c) is amended—

7 (1) by adding the following new sentence at the

8 end of subparagraph (A): ‘‘For purposes of this

9 paragraph, an interest in a mortgage shall in no

10 event be treated as real property.’’, and

11 (2) by striking the last sentence of subpara12 graph (B).

13 (c) EFFECTIVE DATES.—

14 (1) IN GENERAL.—The amendments made by

15 this section shall apply to acquisitions on or after

16 January 1, 1994.

17 (2) SMALL LEASES.—The provisions of section

18 514(c)(9)(G)(i) of the Internal Revenue Code of

19 1986 shall, in addition to any leases to which the

20 provisions apply by reason of paragraph (1), apply

21 to leases entered into on or after January 1, 1994.

22 SEC. 14145. REPEAL OF SPECIAL TREATMENT OF PUBLICLY

23 TREATED PARTNERSHIPS.

24 (a) GENERAL RULE.—Subsection (c) of section 512

25 is amended—
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1 (1) by striking paragraph (2),

2 (2) by redesignating paragraph (3) as para3 graph (2), and

4 (3) by striking ‘‘paragraph (1) or (2)’’ in para5 graph (2) (as so redesignated) and inserting ‘‘para6 graph (1)’’.

7 (b) EFFECTIVE DATE.—The amendments made by

8 subsection (a) shall apply to partnership years beginning

9 on or after January 1, 1994.

10 SEC. 14146. TITLE-HOLDING COMPANIES PERMITTED TO

11 RECEIVE SMALL AMOUNTS OF UNRELATED

12 BUSINESS TAXABLE INCOME.

13 (a) GENERAL RULE.—Paragraph (25) of section

14 501(c) is amended by adding at the end thereof the follow15 ing new subparagraph:

16 ‘‘(G)(i) An organization shall not be treat17 ed as failing to be described in this paragraph

18 merely by reason of the receipt of any otherwise

19 disqualifying income which is incidentally de20 rived from the holding of real property.

21 ‘‘(ii) Clause (i) shall not apply if the

22 amount of gross income described in such

23 clause exceeds 10 percent of the organization’s

24 gross income for the taxable year unless the or25 ganization establishes to the satisfaction of the
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1 Secretary that the receipt of gross income de2 scribed in clause (i) in excess of such limitation

3 was inadvertent and reasonable steps are being

4 taken to correct the circumstances giving rise to

5 such income.’’

6 (b) CONFORMING AMENDMENT.—Paragraph (2) of

7 section 501(c) is amended by adding at the end thereof

8 the following new sentence: ‘‘Rules similar to the rules of

9 subparagraph (G) of paragraph (25) shall apply for pur10 poses of this paragraph.’’

11 (c) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to taxable years beginning on or

13 after January 1, 1994.

14 SEC. 14147. EXCLUSION FROM UNRELATED BUSINESS TAX

15 OF GAINS FROM CERTAIN PROPERTY.

16 (a) GENERAL RULE.—Subsection (b) of section 512

17 (relating to modifications) is amended by adding at the

18 end thereof the following new paragraph:

19 ‘‘(16)(A) Notwithstanding paragraph (5)(B),

20 there shall be excluded all gains or losses from the

21 sale, exchange, or other disposition of any real prop22 erty described in subparagraph (B) if—

23 ‘‘(i) such property was acquired by the or24 ganization from—
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1 ‘‘(I) a financial institution described

2 in section 581 or 591(a) which is in

3 conservatorship or receivership, or

4 ‘‘(II) the conservator or receiver of

5 such an institution (or any government

6 agency or corporation succeeding to the

7 rights or interests of the conservator or re8 ceiver),

9 ‘‘(ii) such property is designated by the or10 ganization within the 9-month period beginning

11 on the date of its acquisition as property held

12 for sale, except that not more than one-half (by

13 value determined as of such date) of property

14 acquired in a single transaction may be so

15 designated,

16 ‘‘(iii) such sale, exchange, or disposition

17 occurs before the later of—

18 ‘‘(I) the date which is 30 months after

19 the date of the acquisition of such prop20 erty, or

21 ‘‘(II) the date specified by the Sec22 retary in order to assure an orderly dis23 position of property held by persons de24 scribed in subparagraph (A), and
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1 ‘‘(iv) while such property was held by the

2 organization, the aggregate expenditures on im3 provements and development activities included

4 in the basis of the property are (or were) not

5 in excess of 20 percent of the net selling price

6 of such property.

7 ‘‘(B) Property is described in this subparagraph

8 if it is real property which—

9 ‘‘(i) was held by the financial institution at

10 the time it entered into conservatorship or re11 ceivership, or

12 ‘‘(ii) was foreclosure property (as defined

13 in section 514(c)(9)(H)(v)) which secured in14 debtedness held by the financial institution at

15 such time.

16 For purposes of this subparagraph, real property in17 cludes an interest in a mortgage.’’

18 (b) EFFECTIVE DATE.—The amendment made by

19 subsection (a) shall apply to property acquired on or after

20 January 1, 1994.

21 SEC. 14148. EXCLUSION FROM UNRELATED BUSINESS TAX

22 OF CERTAIN FEES AND OPTION PREMIUMS.

23 (a) LOAN COMMITMENT FEES.—Paragraph (1) of

24 section 512(b) (relating to modifications) is amended by

25 inserting ‘‘amounts received or accrued as consideration
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1 for entering into agreements to make loans,’’ before ‘‘and

2 annuities’’.

3 (b) OPTION PREMIUMS.—The second sentence of sec4 tion 512(b)(5) is amended—

5 (1) by striking ‘‘all gains on’’ and inserting ‘‘all

6 gains or losses recognized, in connection with the or7 ganization’s investment activities, from’’,

8 (2) by striking ‘‘, written by the organization in

9 connection with its investment activities,’’ and

10 (3) by inserting ‘‘or real property and all gains

11 or losses from the forfeiture of good-faith deposits

12 (that are consistent with established business prac13 tice) for the purchase, sale, or lease of real property

14 in connection with the organization’s investment ac15 tivities’’ before the period.

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to amounts received on or after

18 January 1, 1994.

19 SEC. 14149. TREATMENT OF PENSION FUND INVESTMENTS

20 IN REAL ESTATE INVESTMENT TRUSTS.

21 (a) GENERAL RULE.—Subsection (h) of section 856

22 (relating to closely held determinations) is amended by

23 adding at the end thereof the following new paragraph:

24 ‘‘(3) TREATMENT OF TRUSTS DESCRIBED IN

25 SECTION 401(a).—
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1 ‘‘(A) LOOK-THRU TREATMENT.—

2 ‘‘(i) IN GENERAL.—Except as pro3 vided in clause (ii), in determining whether

4 the stock ownership requirement of section

5 542(a)(2) is met for purposes of paragraph

6 (1)(A), any stock held by a qualified trust

7 shall be treated as held directly by its

8 beneficiaries in proportion to their actuar9 ial interests in such trust and shall not be

10 treated as held by such trust.

11 ‘‘(ii) CERTAIN RELATED TRUSTS NOT

12 ELIGIBLE.—Clause (i) shall not apply to

13 any qualified trust if one or more disquali14 fied persons (as defined in section

15 4975(e)(2), without regard to subpara16 graphs (B) and (I) thereof) with respect to

17 such qualified trust hold in the aggregate

18 5 percent or more in value of the interests

19 in the real estate investment trust and

20 such real estate investment trust has accu21 mulated earnings and profits attributable

22 to any period for which it did not qualify

23 as a real estate investment trust.

24 ‘‘(B) COORDINATION WITH PERSONAL

25 HOLDING COMPANY RULES.—If any entity
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1 qualifies as a real estate investment trust for

2 any taxable year by reason of subparagraph

3 (A), such entity shall not be treated as a per4 sonal holding company for such taxable year for

5 purposes of part II of subchapter G of this

6 chapter.

7 ‘‘(C) TREATMENT FOR PURPOSES OF UN8 RELATED BUSINESS TAX.—If any qualified

9 trust holds more than 10 percent (by value) of

10 the interests in any pension-held REIT at any

11 time during a taxable year, the trust shall be

12 treated as having for such taxable year gross

13 income from an unrelated trade or business in

14 an amount which bears the same ratio to the

15 aggregate dividends paid (or treated as paid) by

16 the REIT to the trust for the taxable year of

17 the REIT with or within which the taxable year

18 of the trust ends (the ‘REIT year’) as—

19 ‘‘(i) the gross income (less direct ex20 penses related thereto) of the REIT for the

21 REIT year from unrelated trades or busi22 nesses (determined as if the REIT were a

23 qualified trust), bears to
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1 ‘‘(ii) the gross income (less direct ex2 penses related thereto) of the REIT for the

3 REIT year.

4 This subparagraph shall apply only if the ratio

5 determined under the preceding sentence is at

6 least 5 percent.

7 ‘‘(D) PENSION-HELD REIT.—The purposes

8 of subparagraph (C)—

9 ‘‘(i) IN GENERAL.—A real estate in10 vestment trust is a pension-held REIT if

11 such trust would not have qualified as a

12 real estate investment trust but for the

13 provisions of this paragraph and if such

14 trust is predominantly held by qualified

15 trusts.

16 ‘‘(ii) PREDOMINANTLY HELD.—For

17 purposes of clause (i), a real estate invest18 ment trust is predominantly held by quali19 fied trusts if—

20 ‘‘(I) at least 1 qualified trust

21 holds more than 25 percent (by value)

22 of the interests in such real estate in23 vestment trust, or

24 ‘‘(II) 1 or more qualified trusts

25 (each of whom own more than 10 per-
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1 cent by value of the interests in such

2 real estate investment trust) hold in

3 the aggregate more than 50 percent

4 (by value) of the interests in such real

5 estate investment trust.

6 ‘‘(E) QUALIFIED TRUST.—For purposes of

7 this paragraph, the term ‘qualified trust’ means

8 any trust described in section 401(a) and ex9 empt from tax under section 501(a).’’

10 (b) EFFECTIVE DATE.—The amendment made by

11 this section shall apply to taxable years beginning after

12 December 31, 1993.

13 Subpart D—Discharge of Indebtedness

14 SEC. 14150. EXCLUSION FROM GROSS INCOME FOR IN15 COME FROM DISCHARGE OF QUALIFIED

16 REAL PROPERTY BUSINESS INDEBTEDNESS.

17 (a) IN GENERAL.—Paragraph (1) of section 108(a)

18 (relating to income from discharge of indebtedness) is

19 amended by striking ‘‘or’’ at the end of subparagraph (B),

20 by striking the period at the end of subparagraph (C) and

21 inserting ‘‘, or’’, and by adding at the end the following

22 new subparagraph:

23 ‘‘(D) in the case of a taxpayer other than a C

24 corporation, the indebtedness discharged is qualified

25 real property business indebtedness.’’
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1 (b) QUALIFIED REAL PROPERTY BUSINESS INDEBT2 EDNESS.—Section 108 is amended by inserting after sub3 section (b) the following new subsection:

4 ‘‘(c) TREATMENT OF DISCHARGE OF QUALIFIED

5 REAL PROPERTY BUSINESS INDEBTEDNESS.—

6 ‘‘(1) BASIS REDUCTION.—

7 ‘‘(A) IN GENERAL.—The amount excluded

8 from gross income under subparagraph (D) of

9 subsection (a)(1) shall be applied to reduce the

10 basis of the depreciable real property of the tax11 payer.

12 ‘‘(B) CROSS REFERENCE.—For provisions

13 making the reduction described in subpara14 graph (A), see section 1017.

15 ‘‘(2) LIMITATIONS.—

16 ‘‘(A) INDEBTEDNESS IN EXCESS OF

17 VALUE.—The amount excluded under subpara18 graph (D) of subsection (a)(1) with respect to

19 any qualified real property business indebted20 ness shall not exceed the excess (if any) of—

21 ‘‘(i) the outstanding principal amount

22 of such indebtedness (immediately before

23 the discharge), over

24 ‘‘(ii) the fair market value of the real

25 property described in paragraph (3)(A) (as
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1 of such time), reduced by the outstanding

2 principal amount of any other qualified

3 real property business indebtedness se4 cured by such property (as of such time).

5 ‘‘(B) OVERALL LIMITATION.—The amount

6 excluded under subparagraph (D) of subsection

7 (a)(1) shall not exceed the aggregate adjusted

8 bases of depreciable real property (determined

9 after any reductions under subsections (b) and

10 (g)) held by the taxpayer immediately before

11 the discharge (other than depreciable real prop12 erty acquired in contemplation of such dis13 charge).

14 ‘‘(3) QUALIFIED REAL PROPERTY BUSINESS IN15 DEBTEDNESS.—The term ‘qualified real property

16 business indebtedness’ means indebtedness which—

17 ‘‘(A) was incurred or assumed by the tax18 payer in connection with real property used in

19 a trade or business and is secured by such real

20 property,

21 ‘‘(B) was incurred or assumed before Jan22 uary 1, 1993, or if incurred or assumed on or

23 after such date, is qualified acquisition indebt24 edness, and
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1 ‘‘(C) with respect to which such taxpayer

2 makes an election to have this paragraph apply.

3 Such term shall not include qualified farm indebted4 ness. Indebtedness under subparagraph (B) shall in5 clude indebtedness resulting from the refinancing of

6 indebtedness under subparagraph (B) (or this sen7 tence), but only to the extent it does not exceed the

8 amount of the indebtedness being refinanced.

9 ‘‘(4) QUALIFIED ACQUISITION INDEBTED10 NESS.—For purposes of paragraph (3)(B), the term

11 ‘qualified acquisition indebtedness’ means, with re12 spect to any real property described in paragraph

13 (3)(A), indebtedness incurred or assumed to acquire,

14 construct, reconstruct, or substantially improve such

15 property.

16 ‘‘(5) REGULATIONS.—The Secretary shall issue

17 such regulations as are necessary to carry out this

18 subsection, including regulations preventing the

19 abuse of this subsection through cross20 collateralization or other means.’’

21 (c) TECHNICAL AMENDMENTS.—

22 (1) Subparagraph (A) of section 108(a)(2) is

23 amended by striking ‘‘and (C)’’ and inserting ‘‘, (C),

24 and (D)’’.
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1 (2) Subparagraph (B) of section 108(a)(2) is

2 amended to read as follows:

3 ‘‘(B) INSOLVENCY EXCLUSION TAKES

4 PRECEDENCE OVER QUALIFIED FARM EXCLU5 SION AND QUALIFIED REAL PROPERTY BUSI6 NESS EXCLUSION.—Subparagraphs (C) and (D)

7 of paragraph (1) shall not apply to a discharge

8 to the extent the taxpayer is insolvent.’’

9 (3) Subsection (d) of section 108 is amended—

10 (A) by striking ‘‘subsections (a), (b), and

11 (g)’’ in paragraphs (6) and (7)(A) and inserting

12 ‘‘subsections (a), (b), (c), and (g)’’,

13 (B) by striking ‘‘SUBSECTIONS (a), (b),

14 AND (g)’’ in the subsection heading and insert15 ing ‘‘CERTAIN PROVISIONS’’, and

16 (C) by striking ‘‘SUBSECTIONS (a), (b),

17 AND (g)’’ in the headings of paragraphs (6) and

18 (7)(A) and inserting ‘‘CERTAIN PROVISIONS’’.

19 (4) Subparagraph (B) of section 108(d)(7) is

20 amended by adding at the end thereof the following

21 new sentence: ‘‘The preceding sentence shall not

22 apply to any discharge to the extent that subsection

23 (a)(1)(D) applies to such discharge.’’
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1 (5) Subparagraph (A) of section 108(d)(9) is

2 amended by inserting ‘‘or under paragraph (3)(B) of

3 subsection (c)’’ after ‘‘subsection (b)’’.

4 (6) Paragraph (2) of section 1017(a) is amend5 ed by striking ‘‘or (b)(5)’’ and inserting ‘‘, (b)(5), or

6 (c)(1)’’.

7 (7) Subparagraph (A) of section 1017(b)(3) is

8 amended by inserting ‘‘or (c)(1)’’ after ‘‘subsection

9 (b)(5)’’.

10 (8) Section 1017(b)(3) is amended by adding at

11 the end the following new subparagraph:

12 ‘‘(F) SPECIAL RULES FOR QUALIFIED

13 REAL PROPERTY BUSINESS INDEBTEDNESS.—

14 In the case of any amount which under section

15 108(c)(1) is to be applied to reduce basis—

16 ‘‘(i) depreciable property shall only in17 clude depreciable real property for pur18 poses of subparagraphs (A) and (C),

19 ‘‘(ii) subparagraph (E) shall not

20 apply, and

21 ‘‘(iii) in the case of property taken

22 into account under section 108(c)(2)(B),

23 the reduction with respect to such property

24 shall be made as of the time immediately
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1 before disposition if earlier than the time

2 under subsection (a).’’

3 (9) Paragraph (1) of section 703(b) is amended

4 by striking ‘‘subsection (b)(5)’’ and inserting ‘‘sub5 section (b)(5) or (c)(3)’’.

6 (d) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to discharges after December 31,

8 1992, in taxable years ending after such date.

9 Subpart E—Increase in Recovery Period for

10 Nonresidential Real Property

11 SEC. 14151. INCREASE IN RECOVERY PERIOD FOR

12 NONRESIDENTIAL REAL PROPERTY.

13 (a) GENERAL RULE.—Paragraph (1) of section

14 168(c) (relating to applicable recovery period) is amended

15 by striking the item relating to nonresidential real prop16 erty and inserting the following:

‘‘Nonresidential real property .................................................. 39 years.’’.

17 (b) EFFECTIVE DATE.—

18 (1) IN GENERAL.—Except as provided in para19 graph (2), the amendment made by subsection (a)

20 shall apply to property placed in service by the tax21 payer on or after February 25, 1993.

22 (2) EXCEPTION.—The amendments made by

23 this section shall not apply to property placed in

24 service by the taxpayer before January 1, 1994, if—
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1 (A) the taxpayer or a qualified person en2 tered into a binding written contract to pur3 chase or construct such property before Feb4 ruary 25, 1993, or

5 (B) the construction of such property was

6 commenced by or for the taxpayer or a quali7 fied person before February 25, 1993.

8 For purposes of this paragraph, the term ‘‘qualified

9 person’’ means any person who transfers his rights

10 in such a contract or such property to the taxpayer

11 but only if the property is not placed in service by

12 such person before such rights are transferred to the

13 taxpayer.

14 PART VI—LUXURY TAX

15 SEC. 14161. REPEAL OF LUXURY EXCISE TAXES OTHER

16 THAN ON PASSENGER VEHICLES.

17 (a) IN GENERAL.—Subchapter A of chapter 31 (re18 lating to retail excise taxes) is amended to read as follows:

19 ‘‘Subchapter A—Luxury Passenger Automobiles

‘‘Sec. 4001. Imposition of tax.

‘‘Sec. 4002. 1st retail sale; uses, etc. treated as sales; determination of price.

‘‘Sec. 4003. Special rules.

20 ‘‘SEC. 4001. IMPOSITION OF TAX.

21 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed

22 on the 1st retail sale of any passenger vehicle a tax equal
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1 to 10 percent of the price for which so sold to the extent

2 such price exceeds $30,000.

3 ‘‘(b) PASSENGER VEHICLE.—

4 ‘‘(1) IN GENERAL.—For purposes of this sub5 chapter, the term ‘passenger vehicle’ means any 4-

6 wheeled vehicle—

7 ‘‘(A) which is manufactured primarily for

8 use on public streets, roads, and highways, and

9 ‘‘(B) which is rated at 6,000 pounds un10 loaded gross vehicle weight or less.

11 ‘‘(2) SPECIAL RULES.—

12 ‘‘(A) TRUCKS AND VANS.—In the case of a

13 truck or van, paragraph (1)(B) shall be applied

14 by substituting ‘gross vehicle weight’ for ‘un15 loaded gross vehicle weight’.

16 ‘‘(B) LIMOUSINES.—In the case of a lim17 ousine, paragraph (1) shall be applied without

18 regard to subparagraph (B) thereof.

19 ‘‘(c) EXCEPTIONS FOR TAXICABS, ETC.—The tax im20 posed by this section shall not apply to the sale of any

21 passenger vehicle for use by the purchaser exclusively in

22 the active conduct of a trade or business of transporting

23 persons or property for compensation or hire.
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1 ‘‘(d) EXEMPTION FOR LAW ENFORCEMENT USES,

2 ETC.—No tax shall be imposed by this section on the sale

3 of any passenger vehicle—

4 ‘‘(1) to the Federal Government, or a State or

5 local government, for use exclusively in police, fire6 fighting, search and rescue, or other law enforce7 ment or public safety activities, or in public works

8 activities, or

9 ‘‘(2) to any person for use exclusively in provid10 ing emergency medical services.

11 ‘‘(e) INFLATION ADJUSTMENT.—

12 ‘‘(1) IN GENERAL.—In the case of any calendar

13 year after 1992, the $30,000 amount in subsection

14 (a) and section 4003(a) shall be increased by an

15 amount equal to—

16 ‘‘(A) $30,000, multiplied by

17 ‘‘(B) the cost-of-living adjustment under

18 section 1(f)(3) for such calendar year, deter19 mined by substituting ‘calendar year 1990’ for

20 ‘calendar year 1992’ in subparagraph (B)

21 thereof.

22 ‘‘(2) ROUNDING.—If any amount as adjusted

23 under paragraph (1) is not a multiple of $100, such

24 amount shall be rounded to the nearest multiple of

25 $100 (or, if such amount is a multiple of $50 and
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1 not of $100, such amount shall be rounded to the

2 next highest multiple of $100).

3 ‘‘(f) TERMINATION.—The tax imposed by this section

4 shall not apply to any sale or use after December 31,

5 1999.

6 ‘‘SEC. 4002. 1ST RETAIL SALE; USES, ETC. TREATED AS

7 SALES; DETERMINATION OF PRICE.

8 ‘‘(a) 1ST RETAIL SALE.—For purposes of this sub9 chapter, the term ‘1st retail sale’ means the 1st sale, for

10 a purpose other than resale, after manufacture, produc11 tion, or importation.

12 ‘‘(b) USE TREATED AS SALE.—

13 ‘‘(1) IN GENERAL.—If any person uses a pas14 senger vehicle (including any use after importation)

15 before the 1st retail sale of such vehicle, then such

16 person shall be liable for tax under this subchapter

17 in the same manner as if such vehicle were sold at

18 retail by him.

19 ‘‘(2) EXEMPTION FOR FURTHER MANUFAC20 TURE.—Paragraph (1) shall not apply to use of a

21 vehicle as material in the manufacture or production

22 of, or as a component part of, another vehicle tax23 able under this subchapter to be manufactured or

24 produced by him.
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1 ‘‘(3) EXEMPTION FOR DEMONSTRATION USE.—

2 Paragraph (1) shall not apply to any use of a pas3 senger vehicle as a demonstrator.

4 ‘‘(4) EXCEPTION FOR USE AFTER IMPORTATION

5 OF CERTAIN VEHICLES.—Paragraph (1) shall not

6 apply to the use of a vehicle after importation if the

7 user or importer establishes to the satisfaction of the

8 Secretary that the 1st use of the vehicle occurred be9 fore January 1, 1991, outside the United States.

10 ‘‘(5) COMPUTATION OF TAX.—In the case of

11 any person made liable for tax by paragraph (1), the

12 tax shall be computed on the price at which similar

13 vehicles are sold at retail in the ordinary course of

14 trade, as determined by the Secretary.

15 ‘‘(c) LEASES CONSIDERED AS SALES.—For purposes

16 of this subchapter—

17 ‘‘(1) IN GENERAL.—Except as otherwise pro18 vided in this subsection, the lease of a vehicle (in19 cluding any renewal or any extension of a lease or

20 any subsequent lease of such vehicle) by any person

21 shall be considered a sale of such vehicle at retail.

22 ‘‘(2) SPECIAL RULES FOR LONG-TERM

23 LEASES.—

24 ‘‘(A) TAX NOT IMPOSED ON SALE FOR

25 LEASING IN A QUALIFIED LEASE.—The sale of
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1 a passenger vehicle to a person engaged in a

2 passenger vehicle leasing or rental trade or

3 business for leasing by such person in a long4 term lease shall not be treated as the 1st retail

5 sale of such vehicle.

6 ‘‘(B) LONG-TERM LEASE.—For purposes

7 of subparagraph (A), the term ‘long-term lease’

8 means any long-term lease (as defined in sec9 tion 4052).

10 ‘‘(C) SPECIAL RULES.—In the case of a

11 long-term lease of a vehicle which is treated as

12 the 1st retail sale of such vehicle—

13 ‘‘(i) DETERMINATION OF PRICE.—The

14 tax under this subchapter shall be com15 puted on the lowest price for which the ve16 hicle is sold by retailers in the ordinary

17 course of trade.

18 ‘‘(ii) PAYMENT OF TAX.—Rules simi19 lar to the rules of section 4217(e)(2) shall

20 apply.

21 ‘‘(iii) NO TAX WHERE EXEMPT USE

22 BY LESSEE.—No tax shall be imposed on

23 any lease payment under a long-term lease

24 if the lessee’s use of the vehicle under such
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1 lease is an exempt use (as defined in sec2 tion 4003(b)) of such vehicle.

3 ‘‘(d) DETERMINATION OF PRICE.—

4 ‘‘(1) IN GENERAL.—In determining price for

5 purposes of this subchapter—

6 ‘‘(A) there shall be included any charge in7 cident to placing the article in condition ready

8 for use,

9 ‘‘(B) there shall be excluded—

10 ‘‘(i) the amount of the tax imposed by

11 this subchapter,

12 ‘‘(ii) if stated as a separate charge,

13 the amount of any retail sales tax imposed

14 by any State or political subdivision there15 of or the District of Columbia, whether the

16 liability for such tax is imposed on the ven17 dor or vendee, and

18 ‘‘(iii) the value of any component of

19 such article if—

20 ‘‘(I) such component is furnished

21 by the 1st user of such article, and

22 ‘‘(II) such component has been

23 used before such furnishing, and

24 ‘‘(C) the price shall be determined without

25 regard to any trade-in.
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1 ‘‘(2) OTHER RULES.—Rules similar to the rules

2 of paragraphs (2) and (4) of section 4052(b) shall

3 apply for purposes of this subchapter.

4 ‘‘SEC. 4003. SPECIAL RULES.

5 ‘‘(a) SEPARATE PURCHASE OF VEHICLE AND PARTS

6 AND ACCESSORIES THEREFOR.—Under regulations pre7 scribed by the Secretary—

8 ‘‘(1) IN GENERAL.—Except as provided in para9 graph (2), if—

10 ‘‘(A) the owner, lessee, or operator of any

11 passenger vehicle installs (or causes to be in12 stalled) any part or accessory on such vehicle,

13 and

14 ‘‘(B) such installation is not later than the

15 date 6 months after the date the vehicle was

16 1st placed in service,

17 then there is hereby imposed on such installation a

18 tax equal to 10 percent of the price of such part or

19 accessory and its installation.

20 ‘‘(2) LIMITATION.—The tax imposed by para21 graph (1) on the installation of any part or acces22 sory shall not exceed 10 percent of the excess (if

23 any) of—

24 ‘‘(A) the sum of—
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1 ‘‘(i) the price of such part or acces2 sory and its installation,

3 ‘‘(ii) the aggregate price of the parts

4 and accessories (and their installation) in5 stalled before such part or accessory, plus

6 ‘‘(iii) the price for which the pas7 senger vehicle was sold, over

8 ‘‘(B) $30,000.

9 ‘‘(3) EXCEPTIONS.—Paragraph (1) shall not

10 apply if—

11 ‘‘(A) the part or accessory installed is a re12 placement part or accessory,

13 ‘‘(B) the part or accessory is installed to

14 enable or assist an individual with a disability

15 to operate the vehicle, or to enter or exit the ve16 hicle, by compensating for the effect of such

17 disability, or

18 ‘‘(C) the aggregate price of the parts and

19 accessories (and their installation) described in

20 paragraph (1) with respect to the vehicle does

21 not exceed $200 (or such other amount or

22 amounts as the Secretary may by regulation

23 prescribe).

24 The price of any part or accessory (and its installa25 tion) to which paragraph (1) does not apply by rea-
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1 son of this paragraph shall not be taken into ac2 count under paragraph (2)(A).

3 ‘‘(4) INSTALLERS SECONDARILY LIABLE FOR

4 TAX.—The owners of the trade or business installing

5 the parts or accessories shall be secondarily liable

6 for the tax imposed by this subsection.

7 ‘‘(b) IMPOSITION OF TAX ON SALES, ETC., WITHIN

8 2 YEARS OF VEHICLES PURCHASED TAX-FREE.—

9 ‘‘(1) IN GENERAL.—If—

10 ‘‘(A) no tax was imposed under this sub11 chapter on the 1st retail sale of any passenger

12 vehicle by reason of its exempt use, and

13 ‘‘(B) within 2 years after the date of such

14 1st retail sale, such vehicle is resold by the pur15 chaser or such purchaser makes a substantial

16 nonexempt use of such vehicle,

17 then such sale or use of such vehicle by such pur18 chaser shall be treated as the 1st retail sale of such

19 vehicle for a price equal to its fair market value at

20 the time of such sale or use.

21 ‘‘(2) EXEMPT USE.—For purposes of this sub22 section, the term ‘exempt use’ means any use of a

23 vehicle if the 1st retail sale of such vehicle is not

24 taxable under this subchapter by reason of such use.
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1 ‘‘(c) PARTS AND ACCESSORIES SOLD WITH TAXABLE

2 ARTICLE.—Parts and accessories sold on, in connection

3 with, or with the sale of any passenger vehicle shall be

4 treated as part of the vehicle.

5 ‘‘(d) PARTIAL PAYMENTS, ETC.—In the case of a

6 contract, sale, or arrangement described in paragraph (2),

7 (3), or (4) of section 4216(c), rules similar to the rules

8 of section 4217(e)(2) shall apply for purposes of this sub9 chapter.’’

10 (b) TECHNICAL AMENDMENTS.—

11 (1) Subsection (c) of section 4221 is amended

12 by striking ‘‘4002(b), 4003(c), 4004(a)’’ and insert13 ing ‘‘4001(d)’’.

14 (2) Subsection (d) of section 4222 is amended

15 by striking ‘‘4002(b), 4003(c), 4004(a)’’ and insert16 ing ‘‘4001(d)’’.

17 (3) The table of subchapters for chapter 31 is

18 amended by striking the item relating to subchapter

19 A and inserting the following:

‘‘Subchapter A. Luxury passenger vehicles.’’

20 (c) EFFECTIVE DATE.—The amendments made by

21 this section shall take effect on January 1, 1993.
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1 SEC. 14162. EXEMPTION FROM LUXURY EXCISE TAX FOR

2 CERTAIN EQUIPMENT INSTALLED ON PAS3 SENGER VEHICLES FOR USE BY DISABLED IN4 DIVIDUALS.

5 (a) IN GENERAL.—Paragraph (3) of section 4004(b)

6 (relating to separate purchase of article and parts and ac7 cessories therefor), as in effect on the day before the date

8 of the enactment of this Act, is amended—

9 (1) by striking ‘‘or’’ at the end of subparagraph

10 (A),

11 (2) by redesignating subparagraph (B) as sub12 paragraph (C),

13 (3) by inserting after subparagraph (A) the fol14 lowing new subparagraph:

15 ‘‘(B) the part or accessory is installed on

16 a passenger vehicle to enable or assist an indi17 vidual with a disability to operate the vehicle, or

18 to enter or exit the vehicle, by compensating for

19 the effect of such disability, or’’, and

20 (4) by inserting after subparagraph (C) the fol21 lowing flush sentence:

22 ‘‘The price of any part or accessory (and its installa23 tion) to which paragraph (1) does not apply by rea24 son of this paragraph shall not be taken into ac25 count under paragraph (2)(A).’’
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1 (b) EFFECTIVE DATE.—The amendments made by

2 this section shall take effect as if included in the amend3 ments made by section 11221(a) of the Omnibus Budget

4 Reconciliation Act of 1990.

5 (c) PERIOD FOR FILING CLAIMS.—If refund or credit

6 of any overpayment of tax resulting from the application

7 of the amendments made by this section is prevented at

8 any time before the close of the 1-year period beginning

9 on the date of the enactment of this Act by the operation

10 of any law or rule of law (including res judicata), refund

11 or credit of such overpayment (to the extent attributable

12 to such amendments) may, nevertheless, be made or al13 lowed if claim therefor is filed before the close of such

14 1-year period.

15 SEC. 14163. TAX ON DIESEL FUEL USED IN NONCOMMER16 CIAL BOATS.

17 (a) GENERAL RULE.—

18 (1) Paragraph (2) of section 4092(a) (defining

19 diesel fuel) is amended by striking ‘‘or a diesel-pow20 ered train’’ and inserting ‘‘, a diesel-powered train,

21 or a diesel-powered boat’’.

22 (2) Paragraph (1) of section 4041(a) is

23 amended—

24 (A) by striking ‘‘diesel-powered highway

25 vehicle’’ each place it appears and inserting
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1 ‘‘diesel-powered highway vehicle or diesel-pow2 ered boat’’, and

3 (B) by striking ‘‘such vehicle’’ and insert4 ing ‘‘such vehicle or boat’’.

5 (3) Subparagraph (B) of section 4092(b)(1) is

6 amended by striking ‘‘commercial and noncommer7 cial vessels’’ each place it appears and inserting

8 ‘‘vessels for use in an off-highway business use (as

9 defined in section 6421(e)(2)(B))’’.

10 (b) EXEMPTION FOR USE IN FISHERIES OR COM11 MERCIAL NAVIGATION.—Subparagraph (B) of section

12 6421(e)(2) is amended to read as follows:

13 ‘‘(B) USES IN BOATS.—The term ‘off-high14 way business use’ does not include any use in

15 a motorboat; except that such term shall in16 clude any use in—

17 ‘‘(i) a vessel employed in the fisheries

18 or in the whaling business, and

19 ‘‘(ii) in the case of diesel fuel, a boat

20 in the active conduct of—

21 ‘‘(I) a trade or business of com22 mercial fishing or transporting per23 sons or property for compensation or

24 hire, or
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1 ‘‘(II) any other trade or business

2 unless the boat is used predominantly

3 in any activity which is of a type gen4 erally considered to constitute enter5 tainment, amusement or recreation.’’

6 (c) RETENTION OF TAXES IN GENERAL FUND.—

7 (1) TAXES IMPOSED AT HIGHWAY TRUST FUND

8 FINANCING RATE.—Paragraph (4) of section

9 9503(b) (relating to transfers to Highway Trust

10 Fund) is amended—

11 (A) by striking ‘‘and’’ at the end of sub12 paragraph (A),

13 (B) by striking the period at the end of

14 subparagraph (B) and inserting ‘‘, and’’, and

15 (C) by adding at the end thereof the fol16 lowing new subparagraph:

17 ‘‘(C) there shall not be taken into account

18 the taxes imposed by sections 4041 and 4091

19 on diesel fuel sold for use or used as fuel in a

20 diesel-powered boat.’’

21 (2) TAXES IMPOSED AT LEAKING UNDER22 GROUND STORAGE TANK TRUST FUND FINANCING

23 RATE.—Subsection (b) of section 9508 (relating to

24 transfers to Leaking Underground Storage Tank

25 Trust Fund) is amended by adding at the end there-
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1 of the following new sentence: ‘‘For purposes of this

2 subsection, there shall not be taken into account the

3 taxes imposed by sections 4041 and 4091 on diesel

4 fuel sold for use or used as fuel in a diesel-powered

5 boat.’’

6 (d) EFFECTIVE DATE.—The amendments made by

7 this section shall take effect on January 1, 1994.

8 PART VII—OTHER CHANGES

9 SEC. 14171. ALTERNATIVE MINIMUM TAX TREATMENT OF

10 CONTRIBUTIONS OF APPRECIATED PROP11 ERTY.

12 (a) REPEAL OF TAX PREFERENCE.—Subsection (a)

13 of section 57 (as amended by section 14113) is amended

14 by striking paragraph (6) (relating to appreciated prop15 erty charitable deduction) and by redesignating para16 graphs (7) and (8) as paragraphs (6) and (7), respectively.

17 (b) EFFECT ON ADJUSTED CURRENT EARNINGS.—

18 Paragraph (4) of section 56(g) is amended by adding at

19 the end thereof the following new subparagraph:

20 ‘‘(J) TREATMENT OF CHARITABLE CON21 TRIBUTIONS.—Notwithstanding subparagraphs

22 (B) and (C), no adjustment related to the earn23 ings and profits effects of any charitable con24 tribution shall be made in computing adjusted

25 current earnings.’’
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1 (c) CONFORMING AMENDMENT.—Subclause (II) of

2 section 53(d)(1)(B)(ii) (as amended by section 14113) is

3 amended by striking ‘‘(5), (6), and (8)’’ and inserting

4 ‘‘(5), and (7)’’.

5 (d) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to contributions made after June

7 30, 1992, except that in the case of any contribution of

8 capital gain property which is not tangible personal prop9 erty, such amendments shall apply only if the contribution

10 is made after December 31, 1992.

11 (e) REPORT ON ADVANCE DETERMINATION OF

12 VALUE OF CHARITABLE GIFTS.—Not later than 1 year

13 after the date of the enactment of this Act, the Secretary

14 of the Treasury shall report to the Committee on Finance

15 of the Senate and the Committee on Ways and Means of

16 the House of Representatives on the development of a pro17 cedure under which taxpayers may elect to seek an agree18 ment with the Secretary as to the value of tangible per19 sonal property prior to the donation of such property to

20 a qualifying charitable organization if the time limits for

21 the donation and other conditions contained in the agree22 ment are satisfied. Such report shall address the setting

23 of possible threshold amounts for claimed value (and the

24 payment of fees) by a taxpayer in order to seek agreement

25 under the procedure, possible limitations on applying the
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1 procedure only to items with significant artistic or cultural

2 value, and recommendations for legislative action needed

3 to implement the proposed procedure.

4 SEC. 14172. CERTAIN TRANSFERS TO RAILROAD RETIRE5 MENT ACCOUNT MADE PERMANENT.

6 Subsection (c)(1)(A) of section 224 of the Railroad

7 Retirement Solvency Act of 1983 (relating to section 72(r)

8 revenue increase transferred to certain railroad accounts)

9 is amended by striking ‘‘with respect to benefits received

10 before October 1, 1992’’.

11 SEC. 14173. TEMPORARY EXTENSION OF DEDUCTION FOR

12 HEALTH INSURANCE COSTS OF SELF–EM13 PLOYED INDIVIDUALS.

14 (a) IN GENERAL.—

15 (1) EXTENSION.—Paragraph (6) of section

16 162(l) (relating to special rules for health insurance

17 costs of self-employed individuals) is amended by

18 striking ‘‘June 30, 1992’’ and inserting ‘‘December

19 31, 1993’’.

20 (2) CONFORMING AMENDMENT.—Paragraph (2)

21 of section 110(a) of the Tax Extension Act of 1991

22 is hereby repealed.

23 (3) EFFECTIVE DATE.—The amendments made

24 by this subsection shall apply to taxable years end25 ing after June 30, 1992.
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1 (b) DETERMINATION OF ELIGIBILITY FOR EM2 PLOYER-SPONSORED HEALTH PLAN.—

3 (1) IN GENERAL.—Paragraph (2)(B) of section

4 162(l) is amended to read as follows:

5 ‘‘(B) OTHER COVERAGE.—Paragraph (1)

6 shall not apply to any taxpayer for any calendar

7 month for which the taxpayer is eligible to par8 ticipate in any subsidized health plan main9 tained by any employer of the taxpayer or of

10 the spouse of the taxpayer.’’

11 (2) EFFECTIVE DATE.—The amendment made

12 by paragraph (1) shall apply to taxable years begin13 ning after December 31, 1992.

14 Subtitle B—Revenue Increases

15 PART I—PROVISIONS AFFECTING INDIVIDUALS

16 Subpart A—Rate Increases

17 SEC. 14201. INCREASE IN TOP MARGINAL RATE UNDER SEC18 TION 1.

19 (a) GENERAL RULE.—Section 1 (relating to tax im20 posed) is amended by striking subsections (a) through (e)

21 and inserting the following:

22 ‘‘(a) MARRIED INDIVIDUALS FILING JOINT RETURNS

23 AND SURVIVING SPOUSES.—There is hereby imposed on

24 the taxable income of—
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1 ‘‘(1) every married individual (as defined in sec2 tion 7703) who makes a single return jointly with

3 his spouse under section 6013, and

4 ‘‘(2) every surviving spouse (as defined in sec5 tion 2(a)),

6 a tax determined in accordance with the following table:

‘‘If taxable income is: The tax is:

Not over $36,900 .......................... 15% of taxable income.

Over $36,900 but not over

$89,150.

$5,535, plus 28% of the excess over

$36,900.

Over $89,150 but not over

$140,000.

$20,165, plus 31% of the excess over

$89,150.

Over $140,000 ............................... $35,928.50, plus 36% of the excess

over $140,000.

7 ‘‘(b) HEADS OF HOUSEHOLDS.—There is hereby im8 posed on the taxable income of every head of a household

9 (as defined in section 2(b)) a tax determined in accordance

10 with the following table:

‘‘If taxable income is: The tax is:

Not over $29,600 .......................... 15% of taxable income.

Over $29,600 but not over

$76,400.

$4,440, plus 28% of the excess over

$29,600.

Over $76,400 but not over

$127,500.

$17,544, plus 31% of the excess over

$76,400.

Over $127,500 ............................... $33,385, plus 36% of the excess over

$127,500.

11 ‘‘(c) UNMARRIED INDIVIDUALS (OTHER THAN SUR12 VIVING SPOUSES AND HEADS OF HOUSEHOLDS).—There

13 is hereby imposed on the taxable income of every individ14 ual (other than a surviving spouse as defined in section

15 2(a) or the head of a household as defined in section 2(b))

16 who is not a married individual (as defined in section
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1 7703) a tax determined in accordance with the following

2 table:

‘‘If taxable income is: The tax is:

Not over $22,100 .......................... 15% of taxable income.

Over $22,100 but not over

$53,500.

$3,315, plus 28% of the excess over

$22,100.

Over $53,500 but not over

$115,000.

$12,107, plus 31% of the excess over

$53,500.

Over $115,000 ............................... $31,172, plus 36% of the excess over

$115,000.

3 ‘‘(d) MARRIED INDIVIDUALS FILING SEPARATE RE4 TURNS.—There is hereby imposed on the taxable income

5 of every married individual (as defined in section 7703)

6 who does not make a single return jointly with his spouse

7 under section 6013, a tax determined in accordance with

8 the following table:

‘‘If taxable income is: The tax is:

Not over $18,450 .......................... 15% of taxable income.

Over $18,450 but not over

$44,575.

$2,767.50, plus 28% of the excess

over $18,450.

Over $44,575 but not over

$70,000.

$10,082.50, plus 31% of the excess

over $44,575.

Over $70,000 ................................. $17,964.25, plus 36% of the excess

over $70,000.

9 ‘‘(e) ESTATES AND TRUSTS.—There is hereby im10 posed on the taxable income of—

11 ‘‘(1) every estate, and

12 ‘‘(2) every trust,

13 taxable under this subsection a tax determined in accord14 ance with the following table:

‘‘If taxable income is: The tax is:

Not over $1,500 ............................ 15% of taxable income.

Over $1,500 but not over $3,500 .. $225, plus 28% of the excess over

$1,500.
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‘‘If taxable income is: The tax is:

Over $3,500 but not over $5,500 .. $785, plus 31% of the excess over

$3,500.

Over $5,500 ................................... $1,405, plus 36% of the excess over

$5,500.’’

1 (b) CONFORMING AMENDMENTS.—

2 (1) Section 531 is amended by striking ‘‘28

3 percent’’ and inserting ‘‘36 percent’’.

4 (2) Section 541 is amended by striking ‘‘28

5 percent’’ and inserting ‘‘36 percent’’.

6 (3)(A) Subsection (f) of section 1 is amended—

7 (i) by striking ‘‘1990’’ in paragraph (1)

8 and inserting‘‘1993’’, and

9 (ii) by striking ‘‘1989’’ in paragraph

10 (3)(B) and inserting ‘‘1992’’.

11 (B) Subsection (f) of section 1 is amended by

12 adding at the end thereof the following new para13 graph:

14 ‘‘(7) SPECIAL RULE FOR CERTAIN BRACKETS.—

15 ‘‘(A) CALENDAR YEAR 1994.—In prescrib16 ing the tables under paragraph (1) which apply

17 with respect to taxable years beginning in cal18 endar year 1994, the Secretary shall make no

19 adjustment to the dollar amounts at which the

20 36 percent rate bracket begins or at which the

21 39.6 percent rate begins under any table con22 tained in subsection (a), (b), (c), (d), or (e).
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1 ‘‘(B) LATER CALENDAR YEARS.—In pre2 scribing tables under paragraph (1) which apply

3 with respect to taxable years beginning in a cal4 endar year after 1994, the cost-of-living adjust5 ment used in making adjustments to the dollar

6 amounts referred to in subparagraph (A) shall

7 be determined under paragraph (3) by sub8 stituting ‘1993’ for ‘1992’.’’

9 (C) Subparagraph (C) of section 41(e)(5) is

10 amended by striking ‘‘1989’’ each place it appears

11 and inserting ‘‘1992’’.

12 (D) Subparagraph (B) of section 63(c)(4) is

13 amended by striking ‘‘1989’’ and inserting ‘‘1992’’.

14 (E) Subparagraph (B) of section 68(b)(2) is

15 amended by striking ‘‘1989’’ and inserting ‘‘1992’’.

16 (F) Subparagraph (B) of section 132(f)(6) is

17 amended by striking ‘‘, determined by substituting’’

18 and all that follows down through the period at the

19 end thereof and inserting a period.

20 (G) Subparagraphs (A)(ii) and (B)(ii) of sec21 tion 151(d)(4) are each amended by striking ‘‘1989’’

22 and inserting ‘‘1992’’.

23 (H) Clause (ii) of section 513(h)(2)(C) is

24 amended by striking ‘‘1989’’ and inserting ‘‘1992’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 1992.

4 SEC. 14202. SURTAX ON HIGH-INCOME TAXPAYERS.

5 (a) GENERAL RULE.—

6 (1) Subsection (a) of section 1 (as amended by

7 section 14201) is amended by striking the last item

8 in the table contained therein and inserting the fol9 lowing:

Over $140,000 but not over

$250,000.

$35,928.50, plus 36% of the excess

over $140,000.

Over $250,000 ............................... $75,528.50, plus 39.6% of the excess

over $250,000.’’

10 (2) Subsection (b) of section 1 (as so amended)

11 is amended by striking the last item in the table

12 contained therein and inserting the following:

Over $127,500 but not over

$250,000.

$33,385, plus 36% of the excess over

$127,500.

Over $250,000 ............................... $77,485, plus 39.6% of the excess

over $250,000.’’

13 (3) Subsection (c) of section 1 (as so amended)

14 is amended by striking the last item in the table

15 contained therein and inserting the following:

Over $115,000 but not over

$250,000.

$31,172, plus 36% of the excess over

$115,000.

Over $250,000 ............................... $79,772, plus 39.6% of the excess

over $250,000.’’

16 (4) Subsection (d) of section 1 (as so amended)

17 is amended by striking the last item in the table

18 contained therein and inserting the following:
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Over $70,000 but not over

$125,000.

$17,964.25, plus 36% of the excess

over $70,000.

Over $125,000 ............................... $37,764.25, plus 39.6% of the excess

over $125,000.’’

1 (5) Subsection (e) of section 1 (as so amended)

2 is amended by striking the last item in the table

3 contained therein and inserting the following:

Over $5,500 but not over $7,500 .. $1,405, plus 36% of the excess over

$5,500.

Over $7,500 ................................... $2,125, plus 39.6% of the excess over

$7,500.’’

4 (b) TECHNICAL AMENDMENT.—Sections 531 and

5 541 (as amended by section 1420) are each amended by

6 striking ‘‘36 percent’’ and inserting ‘‘39.6 percent’’.

7 (c) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to taxable years beginning after

9 December 31, 1992.

10 SEC. 14203. MODIFICATIONS TO ALTERNATIVE MINIMUM

11 TAX RATES AND EXEMPTION AMOUNTS.

12 (a) INCREASE IN RATE.—Paragraph (1) of section

13 55(b) (defining tentative minimum tax) is amended to

14 read as follows:

15 ‘‘(1) AMOUNT OF TENTATIVE TAX.—

16 ‘‘(A) NONCORPORATE TAXPAYERS.—

17 ‘‘(i) IN GENERAL.—In the case of a

18 taxpayer other than a corporation, the ten19 tative minimum tax for the taxable year is

20 the sum of—
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1 ‘‘(I) 26 percent of so much of the

2 taxable excess as does not exceed

3 $175,000, plus

4 ‘‘(II) 28 percent of so much of

5 the taxable excess as exceeds

6 $175,000.

7 The amount determined under the preced8 ing sentence shall be reduced by the alter9 native minimum tax foreign tax credit for

10 the taxable year.

11 ‘‘(ii) TAXABLE EXCESS.—For pur12 poses of clause (i), the term ‘taxable ex13 cess’ means so much of the alternative

14 minimum taxable income for the taxable

15 year as exceeds the exemption amount.

16 ‘‘(iii) MARRIED INDIVIDUAL FILING

17 SEPARATE RETURN.—In the case of a mar18 ried individual filing a separate return,

19 clause (i) shall be applied by substituting

20 ‘$87,500’ for ‘$175,000’ each place it ap21 pears. For purposes of the preceding sen22 tence, marital status shall be determined

23 under section 7703.
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1 ‘‘(B) CORPORATIONS.—In the case of a

2 corporation, the tentative minimum tax for the

3 taxable year is—

4 ‘‘(i) 20 percent of so much of the al5 ternative minimum taxable income for the

6 taxable year as exceeds the exemption

7 amount, reduced by

8 ‘‘(ii) the alternative minimum tax for9 eign tax credit for the taxable year.’’

10 (b) INCREASE IN EXEMPTION AMOUNTS.—Para11 graph (1) of section 55(d) (defining exemption amount)

12 is amended—

13 (1) by striking ‘‘$40,000’’ in subparagraph (A)

14 and inserting ‘‘$45,000’’,

15 (2) by striking ‘‘$30,000’’ in subparagraph (B)

16 and inserting ‘‘$33,750’’, and

17 (3) by striking ‘‘$20,000’’ in subparagraph (C)

18 and inserting ‘‘$22,500’’.

19 (c) CONFORMING AMENDMENTS.—

20 (1) The last sentence of section 55(d)(3) is

21 amended by striking ‘‘$155,000 or (ii) $20,000’’ and

22 inserting ‘‘$165,000 or (ii) $22,500’’.

23 (2)(A) Subparagraph (A) of section 897(a)(2)

24 is amended by striking ‘‘the amount determined

25 under section 55(b)(1)(A) shall not be less than 21
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1 percent of’’ and inserting ‘‘the taxable excess for

2 purposes of section 55(b)(1)(A) shall not be less

3 than’’.

4 (B) The heading for paragraph (2) of section

5 897(a) is amended by striking ‘‘21-PERCENT’’.

6 (d) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to taxable years beginning after

8 December 31, 1992.

9 SEC. 14204. OVERALL LIMITATION ON ITEMIZED DEDUC10 TIONS FOR HIGH-INCOME TAXPAYERS MADE

11 PERMANENT.

12 Subsection (f) of section 68 (relating to overall limita13 tion on itemized deductions) is hereby repealed.

14 SEC. 14205. PHASEOUT OF PERSONAL EXEMPTION OF HIGH15 INCOME TAXPAYERS MADE PERMANENT.

16 Section 151(d)(3) (relating to phaseout of personal

17 exemption) is amended by striking subparagraph (E).

18 SEC. 14206. PROVISIONS TO PREVENT CONVERSION OF OR19 DINARY INCOME TO CAPITAL GAIN.

20 (a) INTEREST EMBEDDED IN FINANCIAL TRANS21 ACTIONS.—

22 (1) IN GENERAL.—Part IV of subchapter P of

23 chapter 1 (relating to special rules for determining

24 capital gains and losses) is amended by adding at

25 the end thereof the following new section:
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1 ‘‘SEC. 1258. RECHARACTERIZATION OF GAIN FROM CER2 TAIN FINANCIAL TRANSACTIONS.

3 ‘‘(a) GENERAL RULE.—In the case of any gain—

4 ‘‘(1) which (but for this section) would be treat5 ed as gain from the sale or exchange of a capital

6 asset, and

7 ‘‘(2) which is recognized on the disposition of

8 any property which was held as part of a conversion

9 transaction,

10 such gain (to the extent such gain does not exceed the

11 applicable imputed income amount) shall be treated as

12 ordinary income.

13 ‘‘(b) APPLICABLE IMPUTED INCOME AMOUNT.—For

14 purposes of subsection (a), the term ‘applicable imputed

15 income amount’ means, with respect to any disposition re16 ferred to in subsection (a), an amount equal to—

17 ‘‘(1) the amount of interest which would have

18 accrued on the taxpayer’s net investment in the con19 version transaction for the period ending on the date

20 of such disposition (or, if earlier, the date on which

21 the requirements of subsection (c) ceased to be satis22 fied) at a rate equal to 120 percent of the applicable

23 rate, reduced by

24 ‘‘(2) the amount treated as ordinary income

25 under subsection (a) with respect to any prior dis-
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1 position of property which was held as a part of

2 such transaction.

3 The Secretary shall by regulations provide for such reduc4 tions in the applicable imputed income amount as may be

5 appropriate by reason of amounts capitalized under sec6 tion 263(g), ordinary income received, or otherwise.

7 ‘‘(c) CONVERSION TRANSACTION.—For purposes of

8 this section, the term ‘conversion transaction’ means any

9 of the following where substantially all of the taxpayer’s

10 expected return from the transaction is attributable to the

11 time value of the taxpayer’s net investment in such trans12 action:

13 ‘‘(1) The holding of any property (whether or

14 not actively traded), and the entering into a contract

15 to sell such property (or substantially identical prop16 erty) at a price determined in accordance with such

17 contract, but only if such property was acquired and

18 such contract was entered into on a substantially

19 contemporaneous basis.

20 ‘‘(2) Any applicable straddle.

21 ‘‘(3) Any other transaction which is marketed

22 or sold as producing capital gains.

23 ‘‘(4) Any other transaction specified in regula24 tions prescribed by the Secretary.
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1 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur2 poses of this section—

3 ‘‘(1) APPLICABLE STRADDLE.—The term ‘appli4 cable straddle’ means any straddle (within the mean5 ing of section 1092(c)); except that the term ‘per6 sonal property’ shall include stock.

7 ‘‘(2) APPLICABLE RATE.—The term ‘applicable

8 rate’ means—

9 ‘‘(A) the applicable Federal rate deter10 mined under section 1274(d) (compounded

11 semiannually) as if the conversion transaction

12 were a debt instrument, or

13 ‘‘(B) if the term of the conversion trans14 action is indefinite, the Federal short-term

15 rates in effect under section 6621(b) during the

16 period of the conversion transaction

17 (compounded daily).

18 ‘‘(3) TREATMENT OF PROPERTY WITH BUILT-IN

19 LOSS.—

20 ‘‘(A) IN GENERAL.—If any property with a

21 built-in loss becomes part of a conversion

22 transaction—

23 ‘‘(i) for purposes of applying this sub24 title to such property for periods after such

25 property becomes part of such transaction,
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1 the adjusted basis of such property shall be

2 its fair market value as of the time it be3 came part of such transaction, except that

4 ‘‘(ii) upon the disposition of such

5 property in a transaction in which gain or

6 loss is recognized, such built-in loss shall

7 be recognized and shall have a character

8 determined without regard to this section.

9 ‘‘(B) BUILT-IN LOSS.—For purposes of

10 subparagraph (A), the term ‘built-in loss’

11 means the excess (if any) of the adjusted basis

12 of any property over its fair market value (de13 termined as of the date on which such property

14 became part of such transaction).

15 ‘‘(4) PROPERTY TAKEN INTO ACCOUNT AT FAIR

16 MARKET VALUE.—In determining the taxpayer’s net

17 investment in any conversion transaction, there shall

18 be included the fair market value of any property

19 which becomes part of such transaction (determined

20 as of the date on which such property became part

21 of such transaction).’’

22 (2) CLERICAL AMENDMENT.—The table of sec23 tions for part IV of subchapter P of chapter 1 is
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1 amended by adding at the end thereof the following

2 new item:

‘‘Sec. 1258. Recharacterization of gain from certain financial

transactions.’’

3 (3) EFFECTIVE DATE.—The amendments made

4 by this section shall apply to conversion transactions

5 entered into after April 30, 1993.

6 (b) REPEAL OF CERTAIN EXCEPTIONS TO MARKET

7 DISCOUNT RULES.—

8 (1) MARKET DISCOUNT BONDS ISSUED ON OR

9 BEFORE JULY 18, 1984.—The following provisions

10 are hereby repealed:

11 (A) Section 1276(e).

12 (B) Section 1277(d).

13 (2) TAX-EXEMPT OBLIGATIONS.—

14 (A) IN GENERAL.—Paragraph (1) of sec15 tion 1278(a) (defining market discount bond) is

16 amended—

17 (i) by striking clause (ii) of subpara18 graph (B) and redesignating subclauses

19 (iii) and (iv) of such subparagraph as

20 clauses (ii) and (iii), respectively,

21 (ii) by redesignating subparagraph

22 (C) as subparagraph (D), and

23 (iii) by inserting after subparagraph

24 (B) the following new subparagraph:
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1 ‘‘(C) SECTION 1277 NOT APPLICABLE TO

2 TAX-EXEMPT OBLIGATIONS.—For purposes of

3 section 1277, the term ‘market discount bond’

4 shall not include any tax-exempt obligation (as

5 defined in section 1275(a)(3)).’’

6 (B) CONFORMING AMENDMENT.—Sections

7 1276(a)(4) and 1278(b)(1) are each amended

8 by striking ‘‘sections 871(a)’’ and inserting

9 ‘‘sections 103, 871(a),’’.

10 (3) EFFECTIVE DATE.—The amendments made

11 by this section shall apply to obligations purchased

12 (within the meaning of section 1272(d)(1) of the In13 ternal Revenue Code of 1986) after April 30, 1993.

14 (c) TREATMENT OF STRIPPED PREFERRED

15 STOCK.—

16 (1) IN GENERAL.—Section 305 is amended by

17 redesignating subsection (e) as subsection (f) and by

18 inserting after subsection (d) the following new sub19 section:

20 ‘‘(e) TREATMENT OF PURCHASER OF STRIPPED PRE21 FERRED STOCK.—

22 ‘‘(1) IN GENERAL.—If any person purchases

23 after April 30, 1993 any stripped preferred stock,

24 then such person, while holding such stock, shall in25 clude in gross income amounts equal to the amounts
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1 which would have been so includible if such stripped

2 preferred stock were a bond issued on the purchase

3 date and having original issue discount equal to the

4 excess, if any, of—

5 ‘‘(A) the redemption price for such stock,

6 over

7 ‘‘(B) the price at which such person pur8 chased such stock.

9 The preceding sentence shall also apply in the case

10 of any person whose basis in such stock is deter11 mined by reference to the basis in the hands of such

12 purchaser.

13 ‘‘(2) BASIS ADJUSTMENTS.—Appropriate ad14 justments to basis shall be made for amounts includ15 ible in gross income under paragraph (1).

16 ‘‘(3) TAX TREATMENT OF PERSON STRIPPING

17 STOCK.—If any person strips the rights to 1 or more

18 dividends from any stock described in paragraph

19 (5)(B) and after April 30, 1993 disposes of such

20 dividend rights, for purposes of paragraph (1), such

21 person shall be treated as having purchased the

22 stripped preferred stock on the date of such disposi23 tion for a purchase price equal to such person’s

24 adjusted basis in such stripped preferred stock.
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1 ‘‘(4) AMOUNTS TREATED AS ORDINARY IN2 COME.—Any amount included in gross income under

3 paragraph (1) shall be treated as ordinary income.

4 ‘‘(5) STRIPPED PREFERRED STOCK.—For pur5 poses of this subsection—

6 ‘‘(A) IN GENERAL.—The term ‘stripped

7 preferred stock’ means any stock described in

8 subparagraph (B) if there has been a separa9 tion in ownership between such stock and any

10 dividend on such stock which has not become

11 payable.

12 ‘‘(B) DESCRIPTION OF STOCK.—Stock is

13 described in this subsection if such stock—

14 ‘‘(i) is limited and preferred as to

15 dividends and does not participate in cor16 porate growth to any significant extent,

17 and

18 ‘‘(ii) has a fixed redemption price.

19 ‘‘(6) PURCHASE.—For purposes of this sub20 section, the term ‘purchase’ means—

21 ‘‘(A) any acquisition of stock, where

22 ‘‘(B) the basis of such stock is not deter23 mined in whole or in part by the reference to

24 the adjusted basis of such stock in the hands of

25 the person from whom acquired.’’
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1 (2) COORDINATION WITH SECTION 167(e).—

2 Paragraph (2) of section 167(e) is amended to read

3 as follows:

4 ‘‘(2) COORDINATION WITH OTHER PROVI5 SIONS.—

6 ‘‘(A) SECTION 273.—This subsection shall

7 not apply to any term interest to which section

8 273 applies.

9 ‘‘(B) SECTION 305(e).—This subsection

10 shall not apply to the holder of the dividend

11 rights which were separated from any stripped

12 preferred stock to which section 305(e)(1) ap13 plies.’’

14 (3) EFFECTIVE DATE.—The amendments made

15 by this subsection shall take effect on April 30,

16 1993.

17 (d) TREATMENT OF CAPITAL GAIN UNDER LIMITA18 TION ON INVESTMENT INTEREST.—

19 (1) IN GENERAL.—Subparagraph (B) of section

20 163(d)(4) (defining investment income) is amended

21 to read as follows:

22 ‘‘(B) INVESTMENT INCOME.—The term

23 ‘investment income’ means the sum of—
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1 ‘‘(i) gross income from property held

2 for investment (other than any gain taken

3 into account under clause (ii)(I)),

4 ‘‘(ii) the excess (if any) of—

5 ‘‘(I) the net gain attributable to

6 the disposition of property held for in7 vestment, over

8 ‘‘(II) the net capital gain deter9 mined by only taking into account

10 gains and losses from dispositions of

11 property held for investment, plus

12 ‘‘(iii) so much of the net capital gain

13 referred to in clause (ii)(II) (or, if lesser,

14 the net gain referred to in clause (ii)(I)) as

15 the taxpayer elects to take into account

16 under this clause.’’

17 (2) COORDINATION WITH SPECIAL CAPITAL

18 GAINS RATE.—Subsection (h) of section 1 is amend19 ed by adding at the end thereof the following new

20 sentence:

21 ‘‘For purposes of the preceding sentence, the net capital

22 gain for any taxable year shall be reduced (but not below

23 zero) by the amount which the taxpayer elects to take into

24 account as investment income for the taxable year under

25 section 163(d)(4)(B)(iii).’’
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1 (3) EFFECTIVE DATE.—The amendments made

2 by this subsection shall apply to taxable years begin3 ning after December 31, 1992.

4 (e) TREATMENT OF CERTAIN APPRECIATED INVEN5 TORY.—

6 (1) Paragraph (1) of section 751(d) is amended

7 to read as follows:

8 ‘‘(1) SUBSTANTIAL APPRECIATION.—

9 ‘‘(A) IN GENERAL.—Inventory items of the

10 partnership shall be considered to have appre11 ciated substantially in value if their fair market

12 value exceeds 120 percent of the adjusted basis

13 to the partnership of such property.

14 ‘‘(B) CERTAIN PROPERTY EXCLUDED.—

15 For purposes of subparagraph (A), there shall

16 be excluded any inventory property if a prin17 cipal purpose for acquiring such property was

18 to avoid the provisions of this section relating

19 to inventory items.’’

20 (2) EFFECTIVE DATE.—The amendment made

21 by paragraph (1) shall apply to sales, exchanges,

22 and distributions after April 30, 1993.
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1 Subpart B—Other Provisions

2 SEC. 14207. REPEAL OF LIMITATION ON AMOUNT OF WAGES

3 SUBJECT TO HEALTH INSURANCE EMPLOY4 MENT TAX.

5 (a) HOSPITAL INSURANCE TAX.—

6 (1) Paragraph (1) of section 3121(a) (defining

7 wages) is amended—

8 (A) by inserting ‘‘in the case of the taxes

9 imposed by sections 3101(a) and 3111(a)’’ after

10 ‘‘(1)’’,

11 (B) by striking ‘‘applicable contribution

12 base (as determined under subsection (x))’’

13 each place it appears and inserting ‘‘contribu14 tion and benefit base (as determined under sec15 tion 230 of the Social Security Act)’’, and

16 (C) by striking ‘‘such applicable contribu17 tion base’’ and inserting ‘‘such contribution and

18 benefit base’’.

19 (2) Section 3121 is amended by striking sub20 section (x).

21 (b) SELF-EMPLOYMENT TAX.—

22 (1) Subsection (b) of section 1402 is

23 amended—

24 (A) by striking ‘‘that part of the net’’ in

25 paragraph (1) and inserting ‘‘in the case of the
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1 tax imposed by section 1401(a), that part of

2 the net’’,

3 (B) by striking ‘‘applicable contribution

4 base (as determined under subsection (k))’’ in

5 paragraph (1) and inserting ‘‘contribution and

6 benefit base (as determined under section 230

7 of the Social Security Act)’’,

8 (C) by inserting ‘‘and’’ after ‘‘section

9 3121(b),’’, and

10 (D) by striking ‘‘and (C) includes’’ and all

11 that follows through ‘‘3111(b)’’.

12 (2) Section 1402 is amended by striking sub13 section (k).

14 (c) RAILROAD RETIREMENT TAX.—

15 (1) Subparagraph (A) of section 3231(e)(2) is

16 amended by adding at the end thereof the following

17 new clause:

18 ‘‘(iii) HOSPITAL INSURANCE TAXES.—

19 Clause (i) shall not apply to—

20 ‘‘(I) so much of the rate applica21 ble under section 3201(a) or 3221(a)

22 as does not exceed the rate of tax in

23 effect under section 3101(b), and

24 ‘‘(II) so much of the rate applica25 ble under section 3211(a)(1) as does
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1 not exceed the rate of tax in effect

2 under section 1402(b).’’

3 (2) Clause (i) of section 3231(e)(2)(B) is

4 amended to read as follows:

5 ‘‘(i) TIER 1 TAXES.—Except as pro6 vided in clause (ii), the term ‘applicable

7 base’ means for any calendar year the con8 tribution and benefit base determined

9 under section 230 of the Social Security

10 Act for such calendar year.’’

11 (d) TECHNICAL AMENDMENTS.—

12 (1) Paragraph (1) of section 6413(c) is amend13 ed by striking ‘‘section 3101 or section 3201’’ and

14 inserting ‘‘section 3101(a) or section 3201(a) (to the

15 extent the rate applicable under section 3201(a) as

16 does not exceed the rate of tax in effect under sec17 tion 3101(a))’’.

18 (2) Subparagraphs (B) and (C) of section

19 6413(c)(2) are each amended by striking ‘‘section

20 3101’’ each place it appears and inserting ‘‘section

21 3101(a)’’.

22 (3) Subsection (c) of section 6413 is amended

23 by striking paragraph (3).

24 (4) Sections 3122 and 3125 of such Code are

25 each amended by striking ‘‘applicable contribution
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1 base limitation’’ and inserting ‘‘contribution and

2 benefit base limitation’’.

3 (e) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to 1994 and later calendar years.

5 SEC. 14208. TOP ESTATE AND GIFT TAX RATES MADE PER6 MANENT.

7 (a) GENERAL RULE.—The table contained in para8 graph (1) of section 2001(c) is amended by striking the

9 last item and inserting the following new items:

‘‘Over $2,500,000 but not over

$3,000,000.

$1,025,800, plus 53% of the excess

over $2,500,000.

Over $3,000,000 ............................ $1,290,800, plus 55% of the excess

over $3,000,000.’’

10 (b) CONFORMING AMENDMENTS.—

11 (1) Subsection (c) of section 2001 is amended

12 by striking paragraph (2) and by redesignating

13 paragraph (3) as paragraph (2).

14 (2) Paragraph (2) of section 2001(c), as redes15 ignated by paragraph (1), is amended by striking

16 ‘‘($18,340,000 in the case of decedents dying, and

17 gifts made, after 1992)’’.

18 (3) The last sentence of section 2101(b) is

19 amended by striking ‘‘section 2001(c)(3)’’ and in20 serting ‘‘section 2001(c)(2)’’.

21 (c) EFFECTIVE DATE.—The amendments made by

22 this section shall apply in the case of decedents dying, and

23 gifts made, after December 31, 1992.
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1 SEC. 14209. REDUCTION IN DEDUCTIBLE PORTION OF BUSI2 NESS MEALS AND ENTERTAINMENT.

3 (a) GENERAL RULE.—Paragraph (1) of section

4 274(n) (relating to only 80 percent of meal and entertain5 ment expenses allowed as deduction) is amended by strik6 ing ‘‘80 percent’’ and inserting ‘‘50 percent’’.

7 (b) CONFORMING AMENDMENT.—The subsection

8 heading for section 274(n) is amended by striking ‘‘80’’

9 and inserting ‘‘50’’.

10 (c) EFFECTIVE DATE.—The amendments made by

11 this section shall apply to taxable years beginning after

12 December 31, 1993.

13 SEC. 14210. ELIMINATION OF DEDUCTION FOR CLUB MEM14 BERSHIP FEES.

15 (a) IN GENERAL.—Subsection (a) of section 274 (re16 lating to disallowance of certain entertainment, etc., ex17 penses) is amended by adding at the end thereof the fol18 lowing new paragraph:

19 ‘‘(3) DENIAL OF DEDUCTION FOR CLUB

20 DUES.—Notwithstanding the preceding provisions of

21 this subsection, no deduction shall be allowed under

22 this chapter for amounts paid or incurred for mem23 bership in any club organized for business, pleasure,

24 recreation, or other social purpose. The preceding

25 sentence shall not apply in the case of an airline or

26 hotel club.’’
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1 (b) EXCEPTION FOR EMPLOYEE RECREATIONAL EX2 PENSES NOT TO APPLY.—Paragraph (4) of section

3 274(e) is amended by adding at the end thereof the follow4 ing: ‘‘This paragraph shall not apply for purposes of sub5 section (a)(3).’’

6 (c) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to amounts paid or incurred after

8 December 31, 1993.

9 SEC. 14211. DISALLOWANCE OF DEDUCTION FOR CERTAIN

10 EMPLOYEE REMUNERATION IN EXCESS OF

11 $1,000,000.

12 (a) GENERAL RULE.—Section 162 (relating to trade

13 or business expenses) is amended by redesignating sub14 section (m) as subsection (n) and by inserting after sub15 section (l) the following new subsection:

16 ‘‘(m) CERTAIN EXCESSIVE EMPLOYEE REMUNERA17 TION.—

18 ‘‘(1) IN GENERAL.—In the case of any publicly

19 held corporation, no deduction shall be allowed

20 under this chapter for applicable employee remu21 neration with respect to any covered employee to the

22 extent that the amount of such remuneration for the

23 taxable year with respect to such employee exceeds

24 $1,000,000.
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1 ‘‘(2) PUBLICLY HELD CORPORATION.—For pur2 poses of this subsection, the term ‘publicly held cor3 poration’ means any corporation issuing any class of

4 common equity securities required to be registered

5 under section 12 of the Securities Exchange Act of

6 1934.

7 ‘‘(3) COVERED EMPLOYEE.—For purposes of

8 this subsection, the term ‘covered employee’ means

9 any employee of the taxpayer if—

10 ‘‘(A) as of the close of the taxable year,

11 such employee is the chief executive officer of

12 the taxpayer or an individual acting in such a

13 capacity, or

14 ‘‘(B) the total compensation for the tax15 able year of such employee is required to be re16 ported to shareholders under the Securities Ex17 change Act of 1934 by reason of such employee

18 being among the 4 highest compensated officers

19 for the taxable year (other than the chief execu20 tive officer).

21 ‘‘(4) APPLICABLE EMPLOYEE REMUNERA22 TION.—For purposes of this subsection—

23 ‘‘(A) IN GENERAL.—Except as otherwise

24 provided in this paragraph, the term ‘applicable

25 employee remuneration’ means, with respect to
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1 any covered employee for any taxable year, the

2 aggregate amount allowable as a deduction

3 under this chapter for such taxable year (deter4 mined without regard to this subsection) for re5 muneration for services performed by such em6 ployee (whether or not during the taxable year).

7 ‘‘(B) EXCEPTION FOR REMUNERATION

8 PAYABLE ON COMMISSION BASIS.—The term

9 ‘applicable employee remuneration’ shall not in10 clude any remuneration payable on a commis11 sion basis solely on account of income generated

12 directly by the individual performance of the in13 dividual to whom such remuneration is payable.

14 ‘‘(C) OTHER PERFORMANCE-BASED COM15 PENSATION.—The term ‘applicable employee re16 muneration’ shall not include any remuneration

17 payable solely on account of the attainment of

18 one or more performance goals but only if—

19 ‘‘(i) the performance goals are deter20 mined by a compensation committee of the

21 board of directors of the taxpayer which is

22 comprised solely of 2 or more independent

23 directors,

24 ‘‘(ii) the material terms under which

25 the remuneration is to be paid, including
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1 the performance goals, are disclosed to

2 shareholders and approved by a majority of

3 the vote in a separate shareholder vote be4 fore the payment of such remuneration,

5 and

6 ‘‘(iii) before any payment of such re7 muneration, the compensation committee

8 referred to in clause (i) certifies that the

9 performance goals and any other material

10 terms were in fact satisfied.

11 ‘‘(D) EXCEPTION FOR EXISTING BINDING

12 CONTRACTS.—The term ‘applicable employee

13 remuneration’ shall not include any remunera14 tion payable under a written binding contract

15 which was in effect on February 17, 1993, and

16 which was not modified thereafter in any mate17 rial respect before such remuneration is paid.

18 ‘‘(E) REMUNERATION.—For purposes of

19 this paragraph, the term ‘remuneration’ in20 cludes any remuneration (including benefits) in

21 any medium other than cash, but shall not

22 include—

23 ‘‘(i) any payment referred to in so

24 much of section 3121(a)(5) as precedes

25 subparagraph (E) thereof, and
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1 ‘‘(ii) any benefit provided to or on be2 half of an employee if at the time such

3 benefit is provided it is reasonable to be4 lieve that the employee will be able to ex5 clude such benefit from gross income

6 under this chapter.

7 For purposes of clause (i), section 3121(a)(5)

8 shall be applied without regard to section

9 3121(v)(1).

10 ‘‘(F) COORDINATION WITH DISALLOWED

11 GOLDEN PARACHUTE PAYMENTS.—The dollar

12 limitation contained in paragraph (1) shall be

13 reduced (but not below zero) by the amount (if

14 any) which would have been included in the ap15 plicable employee remuneration of the covered

16 employee for the taxable year but for being dis17 allowed under section 280G.’’

18 (b) EFFECTIVE DATE.—The amendment made by

19 subsection (a) shall apply to amounts which would other20 wise be deductible for taxable years beginning on or after

21 January 1, 1994.
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1 SEC. 14212. REDUCTION IN COMPENSATION TAKEN INTO

2 ACCOUNT IN DETERMINING CONTRIBUTIONS

3 AND BENEFITS UNDER QUALIFIED RETIRE4 MENT PLANS.

5 (a) IN GENERAL.—Sections 401(a)(17), 404(l), and

6 505(b)(7) are each amended—

7 (1) by striking ‘‘$200,000’’ in the first sentence

8 and inserting ‘‘$150,000’’, and

9 (2) by striking the second sentence and insert10 ing ‘‘In the case of years beginning after 1994, the

11 Secretary shall adjust the $150,000 amount at the

12 same time and in the same manner as under section

13 415(d), except that the base period for purposes of

14 section 415(d)(1)(A) shall be the calendar quarter

15 beginning October 1, 1994.’’

16 (b) SIMPLIFIED EMPLOYEE PENSIONS.—

17 (1) IN GENERAL.—Paragraphs (3)(C) and

18 (6)(D)(ii) of section 408(k) are each amended by

19 striking ‘‘$200,000’’ and inserting ‘‘$150,000’’.

20 (2) COST-OF-LIVING.—Paragraph (8) of section

21 408(k) is amended to read as follows:

22 ‘‘(8) COST-OF-LIVING ADJUSTMENT.—The Sec23 retary shall adjust the $300 amount in paragraph

24 (2)(C) at the same time and in the same manner as

25 under section 415(d) and shall adjust the $150,000

26 amount in paragraphs (3)(C) and (6)(D)(ii) at the
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1 same time and by the same amount as the adjust2 ment to the $150,000 amount in section

3 401(a)(17).’’

4 (c) CONFORMING AMENDMENT.—The heading for

5 section 505(b)(7) is amended by striking ‘‘$200,000’’.

6 (d) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to benefits accruing in plan years

8 beginning after December 31, 1993.

9 SEC. 14213. MODIFICATION TO DEDUCTION FOR CERTAIN

10 MOVING EXPENSES.

11 (a) REPEAL OF DEDUCTION FOR QUALIFIED RESI12 DENCE SALE, ETC., EXPENSES.—

13 (1) IN GENERAL.—Paragraph (1) of section

14 217(b) (defining moving expenses) is amended by in15 serting ‘‘or’’ at the end of subparagraph (C), by

16 striking ‘‘, or’’ at the end of subparagraph (D) and

17 inserting a period, and by striking

18 subparagraph (E).

19 (2) CONFORMING AMENDMENTS.—

20 (A) Subsection (b) of section 217 is

21 amended by striking paragraph (2) and redesig22 nating paragraph (3) as paragraph (2).

23 (B) Paragraph (2) of section 217(b) (as

24 redesignated by subparagraph (A)) is

25 amended—
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1 (i) by striking the last sentence of

2 subparagraph (A), and

3 (ii) by striking ‘‘, and by’’ in subpara4 graph (B) and all that follows down

5 through the period at the end of subpara6 graph (B) and inserting a period.

7 (C) Paragraph (1) of section 217(h) is

8 amended by striking subparagraphs (B) and

9 (C) and inserting the following:

10 ‘‘(B) subsection (b)(2)(A) shall be applied

11 by substituting ‘$4,500’ for ‘$1,500’, and

12 ‘‘(C) subsection (b)(2)(B) shall be applied

13 as if the last sentence of such subsection read

14 as follows: ‘In the case of a husband and wife

15 filing separate returns, subparagraph (A) shall

16 be applied by substituting ‘‘$2,250’’ for

17 ‘‘$4,500’’.’ ’’

18 (D) Section 217 is amended by striking

19 subsection (e).

20 (b) DEDUCTION DISALLOWED FOR MEAL EX21 PENSES.—Paragraph (1) of section 217(b) is amended—

22 (1) by striking ‘‘meals and lodging’’ in subpara23 graphs (B), (C) and (D) and inserting ‘‘lodging’’,

24 and
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1 (2) by adding at the end thereof the following

2 new sentence:

3 ‘‘Such term shall not include any expenses for

4 meals.’’.

5 (c) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to expenses incurred after Decem7 ber 31, 1993.

8 SEC. 14214. SIMPLIFICATION OF INDIVIDUAL ESTIMATED

9 TAX SAFE HARBOR BASED ON LAST YEAR’S

10 TAX.

11 (a) IN GENERAL.—Paragraph (1) of section 6654(d)

12 (relating to amount of required estimated tax install13 ments) is amended by striking subparagraphs (C), (D),

14 (E), and (F) and by inserting the following new subpara15 graph:

16 ‘‘(C) LIMITATION ON USE OF PRECEDING

17 YEAR’S TAX.—

18 ‘‘(i) IN GENERAL.—If the adjusted

19 gross income shown on the return of the

20 individual for the preceding taxable year

21 exceeds $150,000, clause (ii) of subpara22 graph (B) shall be applied by substituting

23 ‘110 percent’ for ‘100 percent’.

24 ‘‘(ii) SEPARATE RETURNS.—In the

25 case of a married individual (within the
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1 meaning of section 7703) who files a sepa2 rate return for the taxable year for which

3 the amount of the installment is being de4 termined, clause (i) shall be applied by

5 substituting ‘$75,000’ for ‘$150,000’.

6 ‘‘(iii) SPECIAL RULE.—In the case of

7 an estate or trust, adjusted gross income

8 shall be determined as provided in section

9 67(e).’’

10 (b) CONFORMING AMENDMENTS.—

11 (1) Subparagraph (A) of section 6654(j)(3) is

12 amended by striking ‘‘and subsection (d)(1)(C)(iii)

13 shall not apply’’,

14 (2) Paragraph (4) of section 6654(l) is amend15 ed by striking ‘‘paragraphs (1)(C)(iv) and (2)(B)(i)

16 of subsection (d)’’ and inserting ‘‘subsection

17 (d)(2)(B)(i)’’.

18 (c) EFFECTIVE DATE.—The amendments made by

19 this section shall apply to taxable years beginning after

20 December 31, 1993.

21 SEC. 14215. SOCIAL SECURITY AND TIER 1 RAILROAD RE22 TIREMENT BENEFITS.

23 (a) IN GENERAL.—Subsections (a) (1) and (2) of sec24 tion 86 (relating to social security and tier 1 railroad re-
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1 tirement benefits) are each amended by striking ‘‘one2 half’’ and inserting ‘‘85 percent’’.

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall apply to taxable years beginning after

5 December 31, 1993.

6 (c) ADDITIONAL RECEIPTS RETAINED IN GENERAL

7 FUND.—

8 (1) Subsection (e) of section 121 of the Social

9 Security Amendments of 1983 is amended by adding

10 at the end the following new paragraph:

11 ‘‘(5) CERTAIN INCREASED RECEIPTS RETAINED

12 IN GENERAL FUND.—In determining the amount ap13 propriated to any payor fund under paragraph (1),

14 there shall be excluded any increase in tax liability

15 to the extent such increase is attributable to the

16 amendments made to section 86 of the Internal Rev17 enue Code of 1986 by the Revenue Reconciliation

18 Act of 1993.’’.

19 (2) Paragraph (4) of subsection (e) of such sec20 tion 121 is amended by redesignating subparagraphs

21 (A) and (B) as subparagraphs (B) and (C) and by

22 inserting before subparagraph (B) (as so redesig23 nated) the following new subparagraph:

24 ‘‘(A) the total aggregate increase in tax li25 ability under chapter 1 of the Internal Revenue
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1 Code of 1986 which is attributable to the appli2 cation of sections 86 and 871(a)(3) of such

3 Code,’’.

4 PART II—PROVISIONS AFFECTING BUSINESSES

5 SEC. 14221. INCREASE IN TOP MARGINAL RATE UNDER SEC6 TION 11.

7 (a) GENERAL RULE.—Paragraph (1) of section 11(b)

8 (relating to amount of tax) is amended—

9 (1) by striking ‘‘and’’ at the end of subpara10 graph (B),

11 (2) by striking subparagraph (C) and inserting

12 the following:

13 ‘‘(C) 34 percent of so much of the taxable

14 income as exceeds $75,000 but does not exceed

15 $10,000,000, and

16 ‘‘(D) 35 percent of so much of the taxable

17 income as exceeds $10,000,000.’’, and

18 (3) by adding at the end thereof the following

19 new sentence: ‘‘In the case of a corporation which

20 has taxable income in excess of $15,000,000, the

21 amount of the tax determined under the foregoing

22 provisions of this paragraph shall be increased by an

23 additional amount equal to the lesser of (i) 3 percent

24 of such excess, or (ii) $100,000.’’.
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1 (b) CERTAIN PERSONAL SERVICE CORPORATIONS.—

2 Paragraph (2) of section 11(b) is amended by striking ‘‘34

3 percent’’ and inserting ‘‘35 percent’’.

4 (c) CONFORMING AMENDMENTS.—

5 (1) Clause (iii) of section 852(b)(3)(D) is

6 amended by striking ‘‘66 percent’’ and inserting ‘‘65

7 percent’’.

8 (2) Subsection (a) of section 1201 is amended

9 by striking ‘‘34 percent’’ each place it appears and

10 inserting ‘‘35 percent’’.

11 (3) Paragraphs (1) and (2) of section 1445(e)

12 are each amended by striking ‘‘34 percent’’ and in13 serting ‘‘35 percent’’.

14 (d) EFFECTIVE DATE.—The amendments made by

15 this section shall apply to taxable years beginning on or

16 after January 1, 1993; except that the amendment made

17 by subsection (c)(3) shall take effect on the date of the

18 enactment of this Act.

19 SEC. 14222. DENIAL OF DEDUCTION FOR LOBBYING EX20 PENSES.

21 (a) DISALLOWANCE OF DEDUCTION.—Section 162(e)

22 (relating to appearances, etc., with respect to legislation)

23 is amended to read as follows:

24 ‘‘(e) DENIAL OF DEDUCTION FOR CERTAIN LOBBY25 ING AND POLITICAL EXPENDITURES.—
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1 ‘‘(1) IN GENERAL.—No deduction shall be al2 lowed under subsection (a) for any amount paid or

3 incurred—

4 ‘‘(A) in connection with influencing legisla5 tion,

6 ‘‘(B) for participation in, or intervention

7 in, any political campaign on behalf of (or in

8 opposition to) any candidate for public office, or

9 ‘‘(C) in connection with any attempt to in10 fluence the general public, or segments thereof,

11 with respect to elections.

12 ‘‘(2) APPLICATION TO DUES.—

13 ‘‘(A) IN GENERAL.—No deduction shall be

14 allowed under subsection (a) for the portion of

15 dues or other similar amounts (paid by the tax16 payer with respect to an organization) which is

17 allocable to the expenditures described in para18 graph (1).

19 ‘‘(B) ALLOCATION.—

20 ‘‘(i) IN GENERAL.—For purposes of

21 subparagraph (A), expenditures described

22 in paragraph (1) shall be treated as paid

23 out of dues or other similar amounts.

24 ‘‘(ii) CARRYOVER OF LOBBYING EX25 PENDITURES IN EXCESS OF DUES.—For
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1 purposes of this paragraph, if expenditures

2 described in paragraph (1) exceed the dues

3 or other similar amounts for any calendar

4 year, such excess shall be treated as ex5 penditures described in paragraph (1)

6 which are paid or incurred by the organi7 zation during the following calendar year.

8 ‘‘(3) INFLUENCING LEGISLATION.—For pur9 poses of this subsection—

10 ‘‘(A) IN GENERAL.—The term ‘influencing

11 legislation’ means—

12 ‘‘(i) any attempt to influence the gen13 eral public, or segments thereof, with re14 spect to legislation, and

15 ‘‘(ii) any attempt to influence any leg16 islation through communication with any

17 member or employee of the legislative

18 body, or with any government official or

19 employee who may participate in the for20 mulation of the legislation.

21 ‘‘(B) EXCEPTION FOR CERTAIN TECH22 NICAL ADVICE.—The term ‘influencing legisla23 tion’ shall not include the providing of technical

24 advice or assistance to a governmental body or

25 to a committee or other subdivision thereof in
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1 response to a specific written request by such

2 governmental entity to the taxpayer which

3 specifies the nature of the advice or assistance

4 requested.

5 ‘‘(C) LEGISLATION.—The term ‘legislation’

6 has the meaning given such term by section

7 4911(e)(2).

8 ‘‘(4) EXCEPTION FOR CERTAIN TAXPAYERS.—

9 In the case of any taxpayer engaged in the trade or

10 business of conducting activities described in para11 graph (1), paragraph (1) shall not apply to expendi12 tures of the taxpayer in conducting such activities on

13 behalf of another person (but shall apply to pay14 ments by such other person to the taxpayer for con15 ducting such activities).

16 ‘‘(5) CROSS REFERENCE.—

‘‘For reporting requirements related to this subsection, see section 6050O.’’

17 (b) REPORTING REQUIREMENTS.—

18 (1) IN GENERAL.—Subpart B of part III of

19 subchapter A of chapter 61 (relating to information

20 concerning transactions with other persons) is

21 amended by adding at the end the following new

22 section:
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1 ‘‘SEC. 6050O. RETURNS RELATING TO LOBBYING EXPENDI2 TURES OF CERTAIN ORGANIZATIONS.

3 ‘‘(a) REQUIREMENT OF REPORTING.—Each organi4 zation referred to in section 162(e)(2) shall make a return,

5 according to the forms or regulations prescribed by the

6 Secretary, setting forth the names and addresses of per7 sons paying dues to the organization, the amount of the

8 dues paid by such person, and the portion of such dues

9 which is nondeductible under section 162(e)(2).

10 ‘‘(b) STATEMENTS TO BE FURNISHED TO PERSONS

11 WITH RESPECT TO WHOM INFORMATION IS FUR12 NISHED.—Any organization required to make a return

13 under subsection (a) shall furnish to each person whose

14 name is required to be set forth in such return a written

15 statement showing—

16 ‘‘(1) the name and address of the organization,

17 and

18 ‘‘(2) the dues paid by the person during the cal19 endar year and the portion of such dues which is

20 nondeductible under section 162(e)(2).

21 The written statement required under the preceding sen22 tence shall be furnished (either in person or in a statement

23 mailing by first-class mail which includes adequate notice

24 that the statement is enclosed) to the persons on or before

25 January 31 of the year following the calendar year for

26 which the return under subsection (a) was made and shall
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1 be in such form as the Secretary may prescribe by regula2 tions.

3 ‘‘(c) WAIVER.—The Secretary may waive the report4 ing requirements of this section with respect to any orga5 nization or class of organizations if the Secretary deter6 mines that such reporting is not necessary to carry out

7 the purposes of section 162(e).

8 ‘‘(d) DUES.—For purposes of this section, the term

9 ‘dues’ includes other similar amounts.’’

10 (2) PENALTIES.—

11 (A) RETURNS.—Subparagraph (A) of sec12 tion 6724(d)(1) (defining information return) is

13 amended by striking ‘‘or’’ at the end of clause

14 (xi), by striking the period at the end of the

15 clause (xii) relating to section 4101(d) and in16 serting a comma, by redesignating the clause

17 (xii) relating to section 338(h)(10) as clause

18 (xiii), by striking the period at the end of clause

19 (xiii) (as so redesignated) and inserting ‘‘, or’’,

20 and by adding at the end the following new

21 clause:

22 ‘‘(xiv) section 6050O(a) (relating to

23 information on nondeductible lobbying ex24 penditures).’’
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1 (B) PAYEE STATEMENTS.—Paragraph (2)

2 of section 6724(d) (defining payee statement) is

3 amended by striking ‘‘or’’ at the end of sub4 paragraph (R), by striking the period at the

5 end of subparagraph (S) and inserting ‘‘, or’’,

6 and by adding at the end the following new sub7 paragraph:

8 ‘‘(T) section 6050O(b) (relating to returns

9 on nondeductible lobbying expenditures).’’

10 (C) EXCESSIVE UNDERREPORTING.—Sec11 tion 6721 (relating to failure to file correct in12 formation returns) is amended by adding at the

13 end the following new subsection:

14 ‘‘(f) PENALTY IN CASE OF EXCESSIVE

15 UNDERREPORTING ON NONDEDUCTIBLE DUES.—If the

16 aggregate amount of nondeductible dues which is reported

17 on the return required to be filed under section 6050O(a)

18 for any calendar year is less than 75 percent of the aggre19 gate amount required to be so reported—

20 ‘‘(1) subsections (b), (c), and (d) shall not

21 apply, and

22 ‘‘(2) the penalty imposed under subsection (a)

23 shall be equal to the product of—

24 ‘‘(A) the amount required to be reported

25 which was not so reported, and
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1 ‘‘(B) the highest rate of tax imposed by

2 section 11 for taxable years beginning in such

3 calendar year.’’

4 (3) CONFORMING AMENDMENT.—The table of

5 sections for subpart B of part III of subchapter A

6 of chapter 61 is amended by adding at the end the

7 following new item:

‘‘Sec. 6050O. Returns relating to lobbying expenditures of certain

organizations.’’

8 (c) EFFECTIVE DATE.—The amendments made by

9 this section shall apply to amounts paid or incurred after

10 December 31, 1993.

11 SEC. 14223. MARK TO MARKET ACCOUNTING METHOD FOR

12 SECURITIES DEALERS.

13 (a) GENERAL RULE.—Subpart D of part II of sub14 chapter E of chapter 1 (relating to inventories) is amend15 ed by adding at the end thereof the following new section:

16 ‘‘SEC. 475. MARK TO MARKET ACCOUNTING METHOD FOR

17 DEALERS IN SECURITIES.

18 ‘‘(a) GENERAL RULE.—Notwithstanding any other

19 provision of this subpart, the following rules shall apply

20 to securities held by a dealer in securities:

21 ‘‘(1) Any security which is inventory in the

22 hands of the dealer shall be included in inventory at

23 its fair market value.
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1 ‘‘(2) In the case of any security which is not in2 ventory in the hands of the dealer and which is held

3 at the close of any taxable year—

4 ‘‘(A) the dealer shall recognize gain or loss

5 as if such security were sold for its fair market

6 value on the last business day of such taxable

7 year, and

8 ‘‘(B) any gain or loss shall be taken into

9 account for such taxable year.

10 Proper adjustment shall be made in the amount of

11 any gain or loss subsequently realized for gain or

12 loss taken into account under the preceding sen13 tence. The Secretary may provide by regulations for

14 the application of this paragraph at times other than

15 the times provided in this paragraph.

16 ‘‘(b) EXCEPTIONS.—

17 ‘‘(1) IN GENERAL.—Subsection (a) shall not

18 apply to—

19 ‘‘(A) any security held for investment,

20 ‘‘(B)(i) any security described in sub21 section (c)(2)(C) which is acquired (including

22 originated) by the taxpayer in the ordinary

23 course of a trade or business of the taxpayer

24 and which is not held for sale, and (ii) any obli25 gation to acquire a security described in clause
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1 (i) if such obligation is entered into in the ordi2 nary course of such trade or business and is not

3 held for sale, and

4 ‘‘(C) any security which is a hedge with re5 spect to—

6 ‘‘(i) a security to which subsection (a)

7 does not apply, or

8 ‘‘(ii) a position, right to income, or a

9 liability which is not a security in the

10 hands of the taxpayer.

11 To the extent provided in regulations, subparagraph

12 (C) shall not apply to any security held by a person

13 in its capacity as a dealer in securities.

14 ‘‘(2) IDENTIFICATION REQUIRED.—A security

15 shall not be treated as described in subparagraph

16 (A), (B), or (C) of paragraph (1), as the case may

17 be, unless such security is clearly identified in the

18 dealer’s records as being described in such subpara19 graph before the close of the day on which it was ac20 quired, originated, or entered into (or such other

21 time as the Secretary may by regulations prescribe).

22 ‘‘(3) SECURITIES SUBSEQUENTLY NOT EX23 EMPT.—If a security ceases to be described in para24 graph (1) at any time after it was identified as such

25 under paragraph (2), subsection (a) shall apply to
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1 any changes in value of the security occurring after

2 the cessation.

3 ‘‘(4) SPECIAL RULE FOR PROPERTY HELD FOR

4 INVESTMENT.—To the extent provided in regula5 tions, subparagraph (A) of paragraph (1) shall not

6 apply to any security described in subparagraph (D)

7 or (E) of subsection (c)(2) which is held by a dealer

8 in such securities.

9 ‘‘(c) DEFINITIONS.—For purposes of this section—

10 ‘‘(1) DEALER IN SECURITIES DEFINED.—The

11 term ‘dealer in securities’ means a taxpayer who—

12 ‘‘(A) regularly purchases securities from or

13 sells securities to customers in the ordinary

14 course of a trade or business; or

15 ‘‘(B) regularly offers to enter into, assume,

16 offset, assign or otherwise terminate positions

17 in securities with customers in the ordinary

18 course of a trade or business.

19 ‘‘(2) SECURITY DEFINED.—The term ‘security’

20 means any—

21 ‘‘(A) share of stock in a corporation;

22 ‘‘(B) partnership or beneficial ownership

23 interest in a widely held or publicly traded part24 nership or trust;
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1 ‘‘(C) note, bond, debenture, or other evi2 dence of indebtedness;

3 ‘‘(D) interest rate, currency, or equity no4 tional principal contract;

5 ‘‘(E) evidence of an interest in, or a deriv6 ative financial instrument in, any security de7 scribed in subparagraph (A), (B), (C), or (D),

8 or any currency, including any option, forward

9 contract, short position, and any similar finan10 cial instrument in such a security or currency;

11 and

12 ‘‘(F) position which—

13 ‘‘(i) is not a security described in sub14 paragraph (A), (B), (C), (D), or (E),

15 ‘‘(ii) is a hedge with respect to such

16 a security, and

17 ‘‘(iii) is clearly identified in the deal18 er’s records as being described in this sub19 paragraph before the close of the day on

20 which it was acquired or entered into (or

21 such other time as the Secretary may by

22 regulations prescribe).

23 Subparagraph (E) shall not include any contract to

24 which section 1256(a) applies.
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1 ‘‘(3) HEDGE.—The term ‘hedge’ means any po2 sition which reduces the dealer’s risk of interest rate

3 or price changes or currency fluctuations, including

4 any position which is reasonably expected to become

5 a hedge within 60 days after the acquisition of the

6 position.

7 ‘‘(d) SPECIAL RULES.—For purposes of this

8 section—

9 ‘‘(1) COORDINATION WITH CERTAIN RULES.—

10 The rules of sections 263(g), 263A, and 1256(a)

11 shall not apply to securities to which subsection (a)

12 applies, and section 1091 shall not apply (and sec13 tion 1092 shall apply) to any loss recognized under

14 subsection (a).

15 ‘‘(2) IMPROPER IDENTIFICATION.—If a

16 taxpayer—

17 ‘‘(A) identifies any security under sub18 section (b)(2) as being described in subsection

19 (b)(1) and such security is not so described, or

20 ‘‘(B) fails under subsection (c)(2)(F)(iii) to

21 identify any position which is described in sub22 section (c)(2)(F) (without regard to clause (iii)

23 thereof) at the time such identification is re24 quired,
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1 the provisions of subsection (a) shall apply to such

2 security or position, except that any loss under this

3 section prior to the disposition of the security or po4 sition shall be recognized only to the extent of gain

5 previously recognized under this section (and not

6 previously taken into account under this paragraph)

7 with respect to such security or position.

8 ‘‘(3) CHARACTER OF GAIN OR LOSS.—

9 ‘‘(A) IN GENERAL.—Except as provided in

10 subparagraph (B) or section 1236(b)—

11 ‘‘(i) IN GENERAL.—Any gain or loss

12 with respect to a security under subsection

13 (a)(2) shall be treated as ordinary income

14 or loss.

15 ‘‘(ii) SPECIAL RULE FOR DISPOSI16 TIONS.—If—

17 ‘‘(I) gain or loss is recognized

18 with respect to a security before the

19 close of the taxable year, and

20 ‘‘(II) subsection (a)(2) would

21 have applied if the security were held

22 as of the close of the taxable year,

23 such gain or loss shall be treated as ordi24 nary income or loss.
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1 ‘‘(B) EXCEPTION.—Subparagraph (A)

2 shall not apply to any gain or loss which is allo3 cable to a period during which—

4 ‘‘(i) the security is described in sub5 section (b)(1)(C) (without regard to sub6 section (b)(2)),

7 ‘‘(ii) the security is held by a person

8 other than in connection with its activities

9 as a dealer in securities, or

10 ‘‘(iii) the security is improperly identi11 fied (within the meaning of subparagraph

12 (A) or (B) of paragraph (2)).

13 ‘‘(e) REGULATORY AUTHORITY.—The Secretary shall

14 prescribe such regulations as may be necessary or appro15 priate to carry out the purposes of this section, including

16 rules—

17 ‘‘(1) to prevent the use of year-end transfers,

18 related parties, or other arrangements to avoid the

19 provisions of this section, and

20 ‘‘(2) to provide for the application of this sec21 tion to any security which is a hedge which cannot

22 be identified with a specific security, position, right

23 to income, or liability.’’

24 (b) CONFORMING AMENDMENTS.—
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1 (1) Paragraph (1) of section 988(d) is

2 amended—

3 (A) by striking ‘‘section 1256’’ and insert4 ing ‘‘section 475 or 1256’’, and

5 (B) by striking ‘‘1092 and 1256’’ and in6 serting ‘‘475, 1092, and 1256’’.

7 (2) The table of sections for subpart D of part

8 II of subchapter E of chapter 1 is amended by add9 ing at the end thereof the following new item:

‘‘Sec. 475. Mark to market accounting method for dealers in securities.’’

10 (c) EFFECTIVE DATE.—

11 (1) IN GENERAL.—The amendments made by

12 this section shall apply to all taxable years ending on

13 or after December 31, 1993.

14 (2) CHANGE IN METHOD OF ACCOUNTING.—In

15 the case of any taxpayer required by this section to

16 change its method of accounting for any taxable

17 year—

18 (A) such change shall be treated as initi19 ated by the taxpayer,

20 (B) such change shall be treated as made

21 with the consent of the Secretary, and

22 (C) except as provided in paragraph (3),

23 the net amount of the adjustments required to

24 be taken into account by the taxpayer under
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1 section 481 of the Internal Revenue Code of

2 1986 shall be taken into account ratably over

3 the 5-taxable year period beginning with the

4 first taxable year ending on or after December

5 31, 1993.

6 (3) SPECIAL RULE FOR FLOOR SPECIALISTS

7 AND MARKET MAKERS.—

8 (A) IN GENERAL.—If—

9 (i) a taxpayer used the last-in first10 out (LIFO) method of accounting with re11 spect to any qualified securities for its last

12 taxable year ending before December 31,

13 1993, and

14 (ii) any portion of the net amount de15 scribed in paragraph (2)(C) is attributable

16 to the use of such method of accounting,

17 then paragraph (2)(C) shall be applied by tak18 ing such portion into account ratably over the

19 20-taxable year period beginning with the first

20 taxable year ending on or after December 31,

21 1993 (or, if shorter, the period of taxable years

22 equal to the greater of 5 years or the number

23 of taxable years before such first taxable year

24 for which the taxpayer (or any predecessor)

25 used such method of accounting).
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1 (B) QUALIFIED SECURITY.—For purposes

2 of this paragraph, the term ‘‘qualified security’’

3 means any security acquired—

4 (i) by a floor specialist (as defined in

5 section 1236(d)(2) of the Internal Revenue

6 Code of 1986) in connection with the spe7 cialist’s duties as a specialist on an ex8 change, but only if the security is one in

9 which the specialist is registered with the

10 exchange, or

11 (ii) by a taxpayer who is a market

12 maker in connection with the taxpayer’s

13 duties as a market maker, but only if—

14 (I) the security is included on the

15 National Association of Security Deal16 ers Automated Quotation System,

17 (II) the taxpayer is registered as

18 a market maker in such security with

19 the National Association of Security

20 Dealers, and

21 (III) as of the last day of the

22 taxable year preceding the taxpayer’s

23 first taxable year ending on or after

24 December 31, 1993, the taxpayer (or

25 any predecessor) has been actively
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1 and regularly engaged as a market

2 maker in such security for the 2-year

3 period ending on such date (or, if

4 shorter, the period beginning 61 days

5 after the security was listed in such

6 quotation system and ending on such

7 date).

8 SEC. 14224. CLARIFICATION OF TREATMENT OF CERTAIN

9 FSLIC FINANCIAL ASSISTANCE.

10 (a) GENERAL RULE.—For purposes of chapter 1 of

11 the Internal Revenue Code of 1986—

12 (1) any FSLIC assistance with respect to any

13 loss of principal, capital, or similar amount upon the

14 disposition of any asset shall be taken into account

15 as compensation for such loss for purposes of section

16 165 of such Code, and

17 (2) any FSLIC assistance with respect to any

18 debt shall be taken into account for purposes of sec19 tion 166, 585, or 593 of such Code in determining

20 whether such debt is worthless (or the extent to

21 which such debt is worthless) and in determining the

22 amount of any addition to a reserve for bad debts

23 arising from the worthlessness or partial worthless24 ness of such debts.
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1 (b) FSLIC ASSISTANCE.—For purposes of this sec2 tion, the term ‘‘FSLIC assistance’’ means any assistance

3 (or right to assistance) with respect to a domestic building

4 and loan association (as defined in section 7701(a)(19) of

5 such Code without regard to subparagraph (C) thereof)

6 under section 406(f) of the National Housing Act or sec7 tion 21A of the Federal Home Loan Bank Act (or under

8 any similar provision of law).

9 (c) EFFECTIVE DATE.—

10 (1) IN GENERAL.—Except as otherwise pro11 vided in this subsection—

12 (A) The provisions of this section shall

13 apply to taxable years ending on or after March

14 4, 1991, but only with respect to FSLIC assist15 ance not credited before March 4, 1991.

16 (B) If any FSLIC assistance not credited

17 before March 4, 1991, is with respect to a loss

18 sustained or charge-off in a taxable year ending

19 before March 4, 1991, for purposes of deter20 mining the amount of any net operating loss

21 carryover to a taxable year ending on or after

22 March 4, 1991, the provisions of this section

23 shall apply to such assistance for purposes of

24 determining the amount of the net operating

25 loss for the taxable year in which such loss was
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1 sustained or debt written off. Except as pro2 vided in the preceding sentence, this section

3 shall not apply to any FSLIC assistance with

4 respect to a loss sustained or charge-off in a

5 taxable year ending before March 4, 1991.

6 (2) EXCEPTIONS.—The provisions of this sec7 tion shall not apply to any assistance to which the

8 amendments made by section 1401(a)(3) of the Fi9 nancial Institutions Reform, Recovery, and Enforce10 ment Act of 1989 apply.

11 SEC. 14225. MODIFICATION OF CORPORATE ESTIMATED

12 TAX RULES.

13 (a) INCREASE IN REQUIRED INSTALLMENT BASED

14 ON CURRENT YEAR TAX.—

15 (1) IN GENERAL.—Clause (i) of section

16 6655(d)(1)(B) (relating to amount of required in17 stallment) is amended by striking ‘‘91 percent’’ each

18 place it appears and inserting ‘‘100 percent’’.

19 (2) CONFORMING AMENDMENTS.—

20 (A) Subsection (d) of section 6655 is

21 amended—

22 (i) by striking paragraph (3), and

23 (ii) by striking ‘‘91 PERCENT’’ in the

24 paragraph heading of paragraph (2) and

25 inserting ‘‘100 PERCENT’’.
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1 (B) Clause (ii) of section 6655(e)(2)(B) is

2 amended by striking the table contained therein

3 and inserting the following:

‘‘In the case of the following re- The applicable

quired installments: percentage is:

1st ............................................................................................ 25

2nd ........................................................................................... 50

3rd ............................................................................................ 75

4th ............................................................................................ 100.’’

4 (C) Clause (i) of section 6655(e)(3)(A) is

5 amended by striking ‘‘91 percent’’ and inserting

6 ‘‘100 percent’’.

7 (b) MODIFICATION OF PERIODS FOR APPLYING

8 ANNUALIZATION.—

9 (1) Clause (i) of section 6655(e)(2)(A) is

10 amended—

11 (A) by striking ‘‘or for the first 5 months’’

12 in subclause (II),

13 (B) by striking ‘‘or for the first 8 months’’

14 in subclause (III), and

15 (C) by striking ‘‘or for the first 11

16 months’’ in subclause (IV).

17 (2) Paragraph (2) of section 6655(e) is amend18 ed by adding at the end thereof the following new

19 subparagraph:

20 ‘‘(C) ELECTION FOR DIFFERENT

21 ANNUALIZATION PERIODS.—
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1 ‘‘(i) If the taxpayer makes an election

2 under this clause—

3 ‘‘(I) subclause (I) of subpara4 graph (A)(i) shall be applied by sub5 stituting ‘2 months’ for ‘3 months’,

6 ‘‘(II) subclause (II) of subpara7 graph (A)(i) shall be applied by sub8 stituting ‘4 months’ for ‘3 months’,

9 ‘‘(III) subclause (III) of subpara10 graph (A)(i) shall be applied by sub11 stituting ‘7 months’ for ‘6 months’,

12 and

13 ‘‘(IV) subclause (IV) of subpara14 graph (A)(i) shall be applied by sub15 stituting ‘10 months’ for ‘9 months’.

16 ‘‘(ii) If the taxpayer makes an election

17 under this clause—

18 ‘‘(I) subclause (II) of subpara19 graph (A)(i) shall be applied by sub20 stituting ‘5 months’ for ‘3 months’,

21 ‘‘(II) subclause (III) of subpara22 graph (A)(i) shall be applied by sub23 stituting ‘8 months’ for ‘6 months’,

24 and
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1 ‘‘(III) subclause (IV) of subpara2 graph (A)(i) shall be applied by sub3 stituting ‘11 months’ for ‘9 months’.

4 ‘‘(iii) An election under clause (i) or

5 (ii) shall apply to the taxable year for

6 which made and such an election shall be

7 effective only if made on or before the date

8 required for the payment of the first re9 quired installment for such taxable year.’’

10 (3) The last sentence of section 6655(f)(3)(A)

11 is amended by striking ‘‘and subsection (e)(2)(A)’’

12 and inserting ‘‘and, except in the case of an election

13 under subsection (e)(2)(C), subsection (e)(2)(A)’’.

14 (c) EFFECTIVE DATE.—The amendments made by

15 this section shall apply to taxable years beginning after

16 December 31, 1993.

17 SEC. 14226. LIMITATION ON SECTION 936 CREDIT.

18 (a) GENERAL RULE.—Subsection (a) of section 936

19 (relating to Puerto Rico and possession tax credit) is

20 amended—

21 (1) by striking ‘‘as provided in paragraph (3)’’

22 in paragraph (1) and inserting ‘‘as otherwise pro23 vided in this section’’;

24 (2) by adding at the end thereof the following

25 new paragraph:
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1 ‘‘(4) LIMITATIONS ON CREDIT.—

2 ‘‘(A) CREDIT FOR ACTIVE BUSINESS IN3 COME.—The amount of the credit determined

4 under paragraph (1)(A) for any taxable year

5 shall not exceed 60 percent of the aggregate

6 amount of the possession corporation’s qualified

7 possession wages for such taxable year.

8 ‘‘(B) CREDIT FOR INVESTMENT INCOME.—

9 ‘‘(i) IN GENERAL.—If—

10 ‘‘(I) the QPSII assets of the pos11 session corporation for any taxable

12 year, exceed

13 ‘‘(II) 80 percent of such posses14 sion corporation’s qualified tangible

15 business investment for such taxable

16 year,

17 the credit determined under paragraph

18 (1)(B) for such taxable year shall be re19 duced by the amount determined under

20 clause (ii).

21 ‘‘(ii) AMOUNT OF REDUCTION.—The

22 reduction determined under this clause for

23 any taxable year is an amount which bears

24 the same ratio to the credit determined

25 under paragraph (1)(B) for such taxable
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1 year (determined without regard to this

2 subparagraph) as—

3 ‘‘(I) the excess determined under

4 clause (i), bears to

5 ‘‘(II) the QPSII assets of the

6 possession corporation for such tax7 able year.

8 ‘‘(C) CROSS REFERENCE.—

‘‘For definitions and special rules applicable to

this paragraph, see subsection (i).’’

9 (b) DEFINITIONS AND SPECIAL RULES.—Section 936

10 is amended by adding at the end thereof the following new

11 subsection:

12 ‘‘(i) DEFINITIONS AND SPECIAL RULES RELATING

13 TO LIMITATIONS OF SUBSECTION (a)(4).—

14 ‘‘(1) QUALIFIED POSSESSION WAGES.—For

15 purposes of this section—

16 ‘‘(A) IN GENERAL.—The term ‘qualified

17 possession wages’ means wages paid or incurred

18 by the possession corporation during the tax19 able year to any employee for services per20 formed in a possession of the United States,

21 but only if such services are performed while

22 the principal place of employment of such em23 ployee is within such possession.
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1 ‘‘(B) LIMITATION ON AMOUNT OF WAGES

2 TAKEN INTO ACCOUNT.—

3 ‘‘(i) IN GENERAL.—The amount of

4 wages which may be taken into account

5 under subparagraph (A) with respect to

6 any employee for any taxable year shall

7 not exceed the contribution and benefit

8 base determined under section 230 of the

9 Social Security Act for the calendar year

10 in which such taxable year begins.

11 ‘‘(ii) TREATMENT OF PART-TIME EM12 PLOYEES, ETC.—If—

13 ‘‘(I) any employee is not em14 ployed by the possession corporation

15 on a substantially full-time basis at all

16 times during the taxable year, or

17 ‘‘(II) the principal place of em18 ployment of any employee with the

19 possession corporation is not within a

20 possession at all times during the tax21 able year,

22 the limitation applicable under clause (i)

23 with respect to such employee shall be the

24 appropriate portion (as determined by the
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1 Secretary) of the limitation which would

2 otherwise be in effect under clause (i).

3 ‘‘(C) TREATMENT OF CERTAIN EMPLOY4 EES.—The term ‘qualified possession wages’

5 shall not include any wages paid to employees

6 who are assigned by the employer to perform

7 services for another person, unless the principal

8 trade or business of the employer is to make

9 employees available for temporary periods to

10 other persons in return for compensation. All

11 possession corporations treated as 1 corporation

12 under paragraph (4) shall be treated as 1 em13 ployer for purposes of the preceding sentence.

14 ‘‘(D) WAGES.—

15 ‘‘(i) IN GENERAL.—Except as pro16 vided in clause (ii), the term ‘wages’ has

17 the meaning given to such term by sub18 section (b) of section 3306 (determined

19 without regard to any dollar limitation

20 contained in such section). For purposes of

21 the preceding sentence, such subsection (b)

22 shall be applied as if the term ‘United

23 States’ included all possessions of the

24 United States.
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1 ‘‘(ii) SPECIAL RULE FOR AGRICUL2 TURAL LABOR AND RAILWAY LABOR.—In

3 any case to which subparagraph (A) or (B)

4 of paragraph (1) of section 51(h) applies,

5 the term ‘wages’ has the meaning given to

6 such term by section 51(h)(2).

7 ‘‘(2) QPSII ASSETS.—For purposes of this

8 section—

9 ‘‘(A) IN GENERAL.—The QPSII assets of a

10 possession corporation for any taxable year is

11 the average of the amounts of the possession

12 corporation’s qualified investment assets as of

13 the close of each quarter of such taxable year.

14 ‘‘(B) QUALIFIED INVESTMENT ASSETS.—

15 The term ‘qualified investment assets’ means

16 the aggregate adjusted bases of the assets

17 which are held by the possession corporation

18 and the income from which qualifies as quali19 fied possession source investment income. For

20 purposes of the preceding sentence, the ad21 justed basis of any asset shall be its adjusted

22 basis as determined for purposes of computing

23 earnings and profits.

24 ‘‘(3) QUALIFIED TANGIBLE BUSINESS INVEST25 MENT.—For purposes of this section—
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1 ‘‘(A) IN GENERAL.—The qualified tangible

2 business investment of any possession corpora3 tion for any taxable year is the average of the

4 amounts of the possession corporation’s quali5 fied possession investments as of the close of

6 each quarter of such taxable year.

7 ‘‘(B) QUALIFIED POSSESSION INVEST8 MENTS.—The term ‘qualified possession invest9 ments’ means the aggregate adjusted bases of

10 tangible property used by the possession cor11 poration in a possession of the United States in

12 the active conduct of a trade or business within

13 such possession. For purposes of the preceding

14 sentence, the adjusted basis of any property

15 shall be its adjusted basis as determined for

16 purposes of computing earnings and profits.

17 ‘‘(4) RELOCATED BUSINESSES.—

18 ‘‘(A) IN GENERAL.—In determining—

19 ‘‘(i) the possession corporation’s quali20 fied possession wages for any taxable year,

21 and

22 ‘‘(ii) the possession corporation’s

23 qualified tangible business investment for

24 such taxable year,
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1 there shall be excluded all wages and all quali2 fied possession investments which are allocable

3 to a disqualified relocated business.

4 ‘‘(B) DISQUALIFIED RELOCATED BUSI5 NESS.—For purposes of subparagraph (A), the

6 term ‘disqualified relocated business’ means any

7 trade or business commenced by the possession

8 corporation after May 13, 1993, or any addition

9 after such date to an existing trade or business

10 of such possession corporation unless—

11 ‘‘(i) the possession corporation cer12 tifies that the commencement of such trade

13 or business or such addition will not result

14 in a decrease in employment at an existing

15 business operation located in the United

16 States, and

17 ‘‘(ii) there is no reason to believe that

18 such commencement or addition was done

19 with the intention of closing down oper20 ations of an existing business located in

21 the United States.

22 ‘‘(5) ELECTION TO COMPUTE CREDIT ON CON23 SOLIDATED BASIS.—

24 ‘‘(A) IN GENERAL.—Any affiliated group

25 may elect to treat all possession corporations
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1 which would be members of such group but for

2 section 1504(b)(4) as 1 corporation for pur3 poses of this section. The credit determined

4 under this section with respect to such 1 cor5 poration shall be allocated among such posses6 sion corporations in such manner as the Sec7 retary may prescribe.

8 ‘‘(B) ELECTION.—An election under sub9 paragraph (A) shall apply to the taxable year

10 for which made and all succeeding taxable years

11 unless revoked with the consent of the Sec12 retary.

13 ‘‘(6) TREATMENT OF CERTAIN TAXES.—Not14 withstanding subsection (c), if—

15 ‘‘(A) the credit determined under sub16 section (a)(1) for any taxable year is limited

17 under subsection (a)(4), and

18 ‘‘(B) the possession corporation has paid

19 or accrued any taxes of a possession of the

20 United States for such taxable year which are

21 treated as not being income, war profits, or ex22 cess profits taxes paid or accrued to a posses23 sion of the United States by reason of sub24 section (c),
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1 such possession corporation shall be allowed a de2 duction for such taxable year equal to the portion of

3 such taxes which are allocable (on a pro rata basis)

4 to taxable income of the possession corporation the

5 tax on which is not offset by reason of the limita6 tions of subsection (a)(4). In determining the credit

7 under subsection (a) and in applying the preceding

8 sentence, taxable income shall be determined without

9 regard to the preceding sentence.

10 ‘‘(7) POSSESSION CORPORATION.—The term

11 ‘possession corporation’ means a domestic corpora12 tion for which the election provided in subsection (a)

13 is in effect.

14 ‘‘(8) TRANSITIONAL RULE.—If any possession

15 corporation elects the benefits of this paragraph for

16 any taxable year beginning in 1994 or 1995—

17 ‘‘(A) subsection (a)(4) shall not apply to

18 such taxable year, and

19 ‘‘(B) the credit determined under sub20 section (a)(1) for such taxable year shall be the

21 following percentage of the credit which would

22 otherwise have been determined under such

23 subsection:

24 ‘‘(i) 80 percent in the case of a tax25 able year beginning in 1994.
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1 ‘‘(ii) 60 percent in the case of a tax2 able year beginning in 1995.

3 A possession corporation which elects the bene4 fits of this paragraph shall be entitled to the

5 benefits of paragraph (6) for taxes allocable to

6 taxable income the tax on which is not offset by

7 reason of this paragraph.’’

8 (c) MINIMUM TAX TREATMENT.—

9 (1) IN GENERAL.—Clause (ii) of section

10 56(g)(4)(C) (relating to treatment of special rule for

11 certain dividends) is amended by striking ‘‘sections

12 936 and 921’’ and inserting ‘‘sections 936 (including

13 subsection (a)(4) thereof) and 921’’.

14 (2) TREATMENT OF FOREIGN TAXES.—Clause

15 (iii) of section 56(g)(4)(C) is amended by adding at

16 the end thereof the following subclauses:

17 ‘‘(IV) SEPARATE APPLICATION

18 OF FOREIGN TAX CREDIT LIMITA19 TIONS.—In determining the alter20 native minimum foreign tax credit,

21 section 904(d) shall be applied as if

22 dividends from a corporation eligible

23 for the credit provided by section 936

24 were a separate category of income re-
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1 ferred to in a subparagraph of section

2 904(d)(1).

3 ‘‘(V) COORDINATION WITH LIMI4 TATION ON 936 CREDIT.—Any ref5 erence in this clause to a dividend re6 ceived from a corporation eligible for

7 the credit provided by section 936

8 shall be treated as a reference to the

9 portion of any such dividend for which

10 the dividends received deduction is

11 disallowed under clause (i) after the

12 application of clause (ii)(I).’’

13 (d) CONFORMING AMENDMENT.—Paragraph (4) of

14 section 904(b) is amended by inserting before the period

15 at the end thereof the following: ‘‘(without regard to sub16 section (a)(4) thereof)’’.

17 (e) EFFECTIVE DATE.—The amendments made by

18 this section shall apply to taxable years beginning after

19 December 31, 1993.

20 SEC. 14227. MODIFICATION TO LIMITATION ON DEDUCTION

21 FOR CERTAIN INTEREST.

22 (a) GENERAL RULE.—Paragraph (3) of section

23 163(j) (defining disqualified interest) is amended to read

24 as follows:
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1 ‘‘(3) DISQUALIFIED INTEREST.—For purposes

2 of this subsection, the term ‘disqualified interest’

3 means—

4 ‘‘(A) any interest paid or accrued by the

5 taxpayer (directly or indirectly) to a related

6 person if no tax is imposed by this subtitle with

7 respect to such interest, and

8 ‘‘(B) any interest paid or accrued by the

9 taxpayer with respect to any indebtedness to a

10 person who is not a related person if—

11 ‘‘(i) there is a disqualified guarantee

12 of such indebtedness, and

13 ‘‘(ii) no gross basis tax is imposed by

14 this subtitle with respect to such interest.’’

15 (b) DEFINITIONS.—Paragraph (6) of section 163(j)

16 is amended by adding at the end thereof the following new

17 subparagraphs:

18 ‘‘(D) DISQUALIFIED GUARANTEE.—

19 ‘‘(i) IN GENERAL.—Except as pro20 vided in clause (ii), the term ‘disqualified

21 guarantee’ means any guarantee by a re22 lated person which is—

23 ‘‘(I) an organization exempt from

24 taxation under this subtitle, or

25 ‘‘(II) a foreign person.
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1 ‘‘(ii) EXCEPTIONS.—The term ‘dis2 qualified guarantee’ shall not include a

3 guarantee—

4 ‘‘(I) in any circumstances identi5 fied by the Secretary by regulation,

6 where the interest on the indebtedness

7 would have been subject to a net basis

8 tax if the interest had been paid to

9 the guarantor, or

10 ‘‘(II) if the taxpayer owns a con11 trolling interest in the guarantor.

12 For purposes of subclause (II), except as

13 provided in regulations, the term ‘a con14 trolling interest’ means direct or indirect

15 ownership of at least 80 percent of the

16 total voting power and value of all classes

17 of stock of a corporation, or 80 percent of

18 the profit and capital interests in any other

19 entity. For purposes of the preceding sen20 tence, the rules of paragraphs (1) and (5)

21 of section 267(c) shall apply; except that

22 such rules shall also apply to interest in

23 entities other than corporations.

24 ‘‘(iii) GUARANTEE.—Except as pro25 vided in regulations, the term ‘guarantee’
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1 includes any arrangement under which a

2 person (directly or indirectly through an

3 entity or otherwise) assures, on a condi4 tional or unconditional basis, the payment

5 of another person’s obligation under any

6 indebtedness.

7 ‘‘(E) GROSS BASIS AND NET BASIS

8 TAXATION.—

9 ‘‘(i) GROSS BASIS TAX.—The term

10 ‘gross basis tax’ means any tax imposed by

11 this subtitle which is determined by ref12 erence to the gross amount of any item of

13 income without any reduction for any de14 duction allowed by this subtitle.

15 ‘‘(ii) NET BASIS TAX.—The term ‘net

16 basis tax’ means any tax imposed by this

17 subtitle which is a not a gross basis tax.’’

18 (c) CONFORMING AMENDMENT.—Subparagraph (B)

19 of section 163(j)(5) is amended by striking ‘‘to a related

20 person’’.

21 (d) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to interest paid or accrued in tax23 able years beginning after December 31, 1993.
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1 PART III—FOREIGN TAX PROVISIONS

2 Subpart A—Current Taxation of Certain Earnings of

3 Controlled Foreign Corporations

4 SEC. 14231. EARNINGS INVESTED IN EXCESS PASSIVE AS5 SETS.

6 (a) GENERAL RULE.—Paragraph (1) of section

7 951(a) (relating to amounts included in gross income of

8 United States shareholders) is amended by striking ‘‘and’’

9 at the end of subparagraph (A), by striking the period

10 at the end of subparagraph (B) and inserting ‘‘; and’’,

11 and by adding at the end thereof the following new sub12 paragraph:

13 ‘‘(C) the amount determined under section

14 956A with respect to such shareholder for such

15 year (but only to the extent not excluded from

16 gross income under section 959(a)(3)).’’

17 (b) AMOUNT OF INCLUSION.—Subpart F of part III

18 of subchapter N of chapter 1 is amended by inserting after

19 section 956 the following new section:

20 ‘‘SEC. 956A. EARNINGS INVESTED IN EXCESS PASSIVE AS21 SETS.

22 ‘‘(a) GENERAL RULE.—In the case of any controlled

23 foreign corporation, the amount determined under this

24 section with respect to any United States shareholder for

25 any taxable year is the lesser of—

26 ‘‘(1) the excess (if any) of—
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1 ‘‘(A) such shareholder’s pro rata share of

2 the amount of the controlled foreign corpora3 tion’s excess passive assets for such taxable

4 year, over

5 ‘‘(B) the amount of earnings and profits

6 described in section 959(c)(1)(B) with respect

7 to such shareholder, or

8 ‘‘(2) such shareholder’s pro rata share of the

9 applicable earnings of such controlled foreign cor10 poration determined after the application of section

11 951(a)(1)(B).

12 ‘‘(b) APPLICABLE EARNINGS.—For purposes of this

13 section, the term ‘applicable earnings’ means, with respect

14 to any controlled foreign corporation, the amounts re15 ferred to in sections 316(a)(1) and 316(a)(2) (but reduced

16 by distributions made during the taxable year), reduced

17 by the earnings and profits described in section 959(c)(1).

18 ‘‘(c) EXCESS PASSIVE ASSETS.—For purposes of this

19 section—

20 ‘‘(1) IN GENERAL.—The excess passive assets

21 of any controlled foreign corporation for any taxable

22 year is the excess (if any) of—

23 ‘‘(A) the average of the amounts of passive

24 assets held by such corporation as of the close

25 of each quarter of such taxable year, over
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1 ‘‘(B) 25 percent of the average of the

2 amounts of total assets held by such corpora3 tion as of the close of each quarter of such tax4 able year.

5 For purposes of the preceding sentence, the amount

6 taken into account with respect to any asset shall be

7 its adjusted basis as determined for purposes of

8 computing earnings and profits.

9 ‘‘(2) PASSIVE ASSET.—

10 ‘‘(A) IN GENERAL.—Except as otherwise

11 provided in this section, the term ‘passive asset’

12 means any asset held by the controlled foreign

13 corporation which produces passive income (as

14 defined in section 1296(b)) or is held for the

15 production of such income.

16 ‘‘(B) COORDINATION WITH SECTION 956.—

17 The term ‘passive asset’ shall not include any

18 United States property (as defined in section

19 956).

20 ‘‘(3) LOOK-THRU RULES MADE APPLICABLE.—

21 For purposes of this subsection, the rules of section

22 1296(c) shall apply.

23 ‘‘(4) LEASING RULES MADE APPLICABLE.—For

24 purposes of this subsection, the rules of section

25 1297(d) shall apply.
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1 ‘‘(d) SPECIAL RULE WHERE CORPORATION CEASES

2 TO BE CONTROLLED FOREIGN CORPORATION DURING

3 TAXABLE YEAR.—If any foreign corporation ceases to be

4 a controlled foreign corporation during any taxable year—

5 ‘‘(1) the determination of any United States

6 shareholder’s pro rata share shall be made on the

7 basis of stock owned (within the meaning of section

8 958(a)) by such shareholder on the last day during

9 the taxable year on which the foreign corporation is

10 a controlled foreign corporation, and

11 ‘‘(2) the amount of such corporation’s excess

12 passive assets for such taxable year shall be deter13 mined by only taking into account quarters ending

14 on or before such last day, and

15 ‘‘(3) in determining applicable earnings, the

16 amount taken into account by reason of being de17 scribed in paragraph (2) of section 316(a) shall be

18 the portion of the amount so described which is allo19 cable (on a pro rata basis) to the part of such year

20 during which the corporation is a controlled foreign

21 corporation.

22 ‘‘(e) TRANSITION RULE.—In the case of any taxable

23 year of a controlled foreign corporation beginning after

24 September 30, 1993, and before October 1, 1997, the

25 amount determined under subsection (a) shall be the ap-
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1 plicable percentage (determined under the following table)

2 of the amount which would otherwise be determined under

3 such subsection:

‘‘In the case of a taxable year

beginning during the 1-year period The applicable

beginning on: percentage is:

October 1, 1993 ....................................................................... 20

October 1, 1994 ....................................................................... 25

October 1, 1995 ....................................................................... 35

October 1, 1996 ....................................................................... 50.

4 ‘‘(f) REGULATIONS.—The Secretary shall prescribe

5 such regulations as may be necessary to carry out the pur6 poses of this section, including regulations to prevent the

7 avoidance of the provisions of this section through reorga8 nizations or otherwise.’’

9 (c) PREVIOUSLY TAXED INCOME RULES.—

10 (1) IN GENERAL.—Subsection (a) of section

11 959 (relating to exclusion from gross income of pre12 viously taxed earnings and profits) is amended by

13 striking ‘‘or’’ at the end of paragraph (1), by adding

14 ‘‘or’’ at the end of paragraph (2), and by inserting

15 after paragraph (2) the following new paragraph:

16 ‘‘(3) such amounts would, but for this sub17 section, be included under section 951(a)(1)(C) in

18 the gross income of,’’.

19 (2) ALLOCATION RULES.—

20 (A) Subsection (a) of section 959 is

21 amended by adding at the end thereof the fol22 lowing new sentence: ‘‘The rules of subsection
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1 (c) shall apply for purposes of paragraph (1) of

2 this subsection and the rules of subsection (f)

3 shall apply for purposes of paragraphs (2) and

4 (3) of this subsection.’’.

5 (B) Section 959 is amended by adding at

6 the end thereof the following new subsection:

7 ‘‘(f) ALLOCATION RULES FOR CERTAIN INCLU8 SIONS.—

9 ‘‘(1) IN GENERAL.—For purposes of this sec10 tion, amounts that would be included under subpara11 graph (B) or (C) of section 951(a)(1) (determined

12 without regard to this section) shall be treated as at13 tributable first to earnings described in subsection

14 (c)(2), and then to earnings described in subsection

15 (c)(3).

16 ‘‘(2) TREATMENT OF DISTRIBUTIONS.—In ap17 plying this section, actual distributions shall be

18 taken into account before amounts that would be in19 cluded under subparagraphs (B) and (C) of section

20 951(a)(1) (determined without regard to this

21 section).’’

22 (C) Paragraph (1) of section 959(c) is

23 amended to read as follows:

24 ‘‘(1) first to the aggregate of—
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1 ‘‘(A) earnings and profits attributable to

2 amounts included in gross income under section

3 951(a)(1)(B) (or which would have been in4 cluded except for subsection (a)(2) of this sec5 tion), and

6 ‘‘(B) earnings and profits attributable to

7 amounts included in gross income under section

8 951(a)(1)(C) (or which would have been in9 cluded except for subsection (a)(3) of this

10 section),

11 with any distribution being allocated between earn12 ings and profits described in subparagraph (A) and

13 earnings and profits described in subparagraph (B)

14 proportionately on the basis of the respective

15 amounts of such earnings and profits,’’.

16 (3) CONFORMING AMENDMENTS.—

17 (A) Subsections (a) and (b) of section 959

18 are each amended by striking ‘‘earnings and

19 profits for a taxable year’’ and inserting ‘‘earn20 ings and profits’’.

21 (B) Paragraph (2) of section 959(c) is

22 amended to read as follows:

23 ‘‘(2) then to earnings and profits attributable to

24 amounts included in gross income under section

25 951(a)(1)(A) (but reduced by amounts not included
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1 under subparagraph (B) or (C) of section 951(a)(1)

2 because of the exclusions in paragraphs (2) and (3)

3 of subsection (a) of this section), and’’

4 (C) Subsection (b) of section 989 is

5 amended by striking ‘‘section 951(a)(1)(B)’’

6 and inserting ‘‘subparagraph (B) or (C) of sec7 tion 951(a)(1)’’.

8 (d) MODIFICATIONS TO PASSIVE FOREIGN INVEST9 MENT COMPANY RULES.—

10 (1) ADJUSTED BASIS USED IN CERTAIN DETER11 MINATIONS.—Subsection (a) of section 1296 is

12 amended by striking the material following para13 graph (2) and inserting the following:

14 ‘‘In the case of a controlled foreign corporation (or any

15 other foreign corporation if such corporation so elects), the

16 determination under paragraph (2) shall be based on the

17 adjusted bases (as determined for purposes of computing

18 earnings and profits) of its assets in lieu of their value.

19 Such an election, once made, may be revoked only with

20 the consent of the Secretary.’’

21 (2) TREATMENT OF CERTAIN SUBPART F IN22 CLUSIONS.—Subsection (b) of section 1297 is

23 amended by adding at the end thereof the following

24 new paragraph:
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1 ‘‘(9) TREATMENT OF CERTAIN SUBPART F IN2 CLUSIONS.—Any amount included in gross income

3 under subparagraph (B) or (C) of section 951(a)(1)

4 shall be treated as a distribution received with re5 spect to the stock.’’

6 (3) TREATMENT OF CERTAIN DEALERS IN SE7 CURITIES.—Subsection (b) of section 1296 is

8 amended by adding at the end thereof the following

9 new paragraph:

10 ‘‘(3) TREATMENT OF CERTAIN DEALERS IN SE11 CURITIES.—

12 ‘‘(A) IN GENERAL.—In the case of any for13 eign corporation which is a controlled foreign

14 corporation (as defined in section 957(a)), the

15 term ‘passive income’ does not include any in16 come derived in the active conduct of a securi17 ties business by such corporation if such cor18 poration is registered as a securities broker or

19 dealer under section 15(a) of the Securities Ex20 change Act of 1934 or is registered as a Gov21 ernment securities broker or dealer under sec22 tion 15C(a) of such Act. To the extent provided

23 in regulations, such term shall not include any

24 income derived in the active conduct of a securi-
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1 ties business by a controlled foreign corporation

2 which is not so registered.

3 ‘‘(B) APPLICATION OF LOOK-THRU

4 RULES.—For purposes of paragraph (2)(C),

5 rules similar to the rules of subparagraph (A)

6 shall apply in determining whether any income

7 of a related person (whether or not a corpora8 tion) is passive income.

9 ‘‘(C) LIMITATION.—The preceding provi10 sions of this paragraph shall only apply in the

11 case of persons who are United States share12 holders (as defined in section 951(b)) in the

13 controlled foreign corporation.’’

14 (4) LEASING RULES.—Section 1297 is amended

15 by redesignating subsection (d) as subsection (e) and

16 by inserting after subsection (c) the following new

17 subsection:

18 ‘‘(d) TREATMENT OF CERTAIN LEASED PROP19 ERTY.—For purposes of this part:

20 ‘‘(1) IN GENERAL.—Any tangible personal

21 property with respect to which a foreign corporation

22 is the lessee under a lease with a term of at least

23 12 months shall be treated as an asset actually held

24 by such corporation.

25 ‘‘(2) DETERMINATION OF ADJUSTED BASIS.—
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1 ‘‘(A) IN GENERAL.—The adjusted basis of

2 any asset to which paragraph (1) applies shall

3 be the unamortized portion (as determined

4 under regulations prescribed by the Secretary)

5 of the present value of the payments under the

6 lease for the use of such property.

7 ‘‘(B) PRESENT VALUE.—For purposes of

8 subparagraph (A), the present value of pay9 ments described in subparagraph (A) shall be

10 determined in the manner provided in regula11 tions prescribed by the Secretary—

12 ‘‘(i) as of the beginning of the lease

13 term, and

14 ‘‘(ii) except as provided in such regu15 lations, by using a discount rate equal to

16 the applicable Federal rate determined

17 under section 1274(d)—

18 ‘‘(I) by substituting the lease

19 term for the term of the debt instru20 ment, and

21 ‘‘(II) without regard to para22 graph (2) or (3) thereof.

23 ‘‘(3) EXCEPTIONS.—This subsection shall not

24 apply in any case where—
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1 ‘‘(A) the lessor is a related person (as de2 fined in section 954(d)(3)) with respect to the

3 foreign corporation, or

4 ‘‘(B) a principal purpose of leasing the

5 property was to avoid the provisions of this

6 section.’’

7 (e) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to taxable years of foreign corpora9 tions beginning after September 30, 1993, and to taxable

10 years of United States shareholders in which or with which

11 such taxable years of foreign corporations end.

12 SEC. 14232. MODIFICATION TO TAXATION OF INVESTMENT

13 IN UNITED STATES PROPERTY.

14 (a) GENERAL RULE.—Section 956 (relating to in15 vestment of earnings in United States property) is

16 amended—

17 (1) by redesignating subsections (b) and (c) as

18 subsections (c) and (d), respectively, and

19 (2) by striking subsection (a) and inserting the

20 following:

21 ‘‘(a) GENERAL RULE.—In the case of any controlled

22 foreign corporation, the amount determined under this

23 section with respect to any United States shareholder for

24 any taxable year is the lesser of—

25 ‘‘(1) the excess (if any) of—
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1 ‘‘(A) such shareholder’s pro rata share of

2 the average of the amounts of United States

3 property held (directly or indirectly) by the con4 trolled foreign corporation as of the close of

5 each quarter of such taxable year, over

6 ‘‘(B) the amount of earnings and profits

7 described in section 959(c)(1)(A) with respect

8 to such shareholder, or

9 ‘‘(2) such shareholder’s pro rata share of the

10 applicable earnings of such controlled foreign cor11 poration.

12 The amount taken into account under paragraph (1) with

13 respect to any property shall be its adjusted basis as deter14 mined for purposes of computing earnings and profits, re15 duced by any liability to which the property is subject.

16 ‘‘(b) ADJUSTMENTS FOR CERTAIN DISTRIBUTIONS;

17 OTHER SPECIAL RULES.—

18 ‘‘(1) APPLICABLE EARNINGS.—For purposes of

19 this section, the term ‘applicable earnings’ has the

20 meaning given to such term by section 956A(b).

21 ‘‘(2) SPECIAL RULE WHERE CORPORATION

22 CEASES TO BE CONTROLLED FOREIGN CORPORA23 TION.—Rules similar to the rules of section 956A(d)

24 shall apply for purposes of this section.’’

25 (b) CONFORMING AMENDMENTS.—
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1 (1) Subparagraph (B) of section 951(a)(1) is

2 amended to read as follows:

3 ‘‘(B) the amount determined under section

4 956 with respect to such shareholder for such

5 year (but only to the extent not excluded from

6 gross income under section 959(a)(2)); and’’

7 (2) Subsection (a) of section 951 is amended by

8 striking paragraph (4).

9 (c) EFFECTIVE DATE.—The amendments made by

10 this section shall apply to taxable years of controlled for11 eign corporations beginning after September 30, 1993,

12 and to taxable years of United States shareholders in

13 which or with which such taxable years of controlled for14 eign corporations end.

15 (d) STUDY OF INVESTMENTS BY CONTROLLED FOR16 EIGN CORPORATIONS IN UNITED STATES PROPERTY.—

17 (1) IN GENERAL.—The Secretary of the Treas18 ury shall conduct a study of the tax treatment of in19 vestments by controlled foreign corporations in obli20 gations of United States persons other than corpora21 tions. Such study shall include the Secretary’s views

22 as to whether the treatment of such investments

23 should be changed, along with a discussion of the

24 merits and consequences of any such change.
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1 (2) REPORT.—Not later than December 31,

2 1993, the Secretary of the Treasury shall submit to

3 the Committee on Ways and Means of the House of

4 Representatives and the Committee on Finance of

5 the Senate a report on the study conducted under

6 this subsection, together with such recommendations

7 as he may deem advisable.

8 SEC. 14233. OTHER MODIFICATIONS TO SUBPART F.

9 (a) SAME COUNTRY EXCEPTION NOT TO APPLY TO

10 CERTAIN DIVIDENDS.—

11 (1) IN GENERAL.—Paragraph (3) of section

12 954(c) (relating to certain income received from re13 lated persons) is amended by adding at the end

14 thereof the following new subparagraph:

15 ‘‘(C) EXCEPTION FOR CERTAIN DIVI16 DENDS.—Subparagraph (A)(i) shall not apply

17 to any dividend with respect to any stock which

18 is attributable to earnings and profits of the

19 distributing corporation accumulated during

20 any period during which the person receiving

21 such dividend did not hold such stock.’’

22 (2) EFFECTIVE DATE.—The amendment made

23 by paragraph (1) shall apply to taxable years of con24 trolled foreign corporations beginning after Septem25 ber 30, 1993, and to taxable years of United States
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1 shareholders in which or with which such taxable

2 years of controlled foreign corporations end.

3 (b) SIMPLIFICATION OF SECTION 960(b).—

4 (1) IN GENERAL.—Subsection (b) of section

5 960 is amended—

6 (A) by redesignating paragraphs (3) and

7 (4) as paragraphs (4) and (5), respectively, and

8 (B) by striking paragraphs (1) and (2) and

9 inserting the following new paragraphs:

10 ‘‘(1) INCREASE IN SECTION 904 LIMITATION.—

11 In the case of any taxpayer who—

12 ‘‘(A) either (i) chose to have the benefits

13 of subpart A of this part for a taxable year be14 ginning after September 30, 1993, in which he

15 was required under section 951(a) to include

16 any amount in his gross income, or (ii) did not

17 pay or accrue for such taxable year any income,

18 war profits, or excess profits taxes to any for19 eign country or to any possession of the United

20 States,

21 ‘‘(B) chooses to have the benefits of sub22 part A of this part for any taxable year in

23 which he receives 1 or more distributions or

24 amounts which are excludable from gross in25 come under section 959(a) and which are at-
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1 tributable to amounts included in his gross in2 come for taxable years referred to in subpara3 graph (A), and

4 ‘‘(C) for the taxable year in which such

5 distributions or amounts are received, pays, or

6 is deemed to have paid, or accrues income, war

7 profits, or excess profits taxes to a foreign

8 country or to any possession of the United

9 States with respect to such distributions or

10 amounts,

11 the limitation under section 904 for the taxable year

12 in which such distributions or amounts are received

13 shall be increased by the lesser of the amount of

14 such taxes paid, or deemed paid, or accrued with re15 spect to such distributions or amounts or the

16 amount in the excess limitation account as of the be17 ginning of such taxable year.

18 ‘‘(2) EXCESS LIMITATION ACCOUNT.—

19 ‘‘(A) ESTABLISHMENT OF ACCOUNT.—

20 Each taxpayer meeting the requirements of

21 paragraph (1)(A) shall establish an excess limi22 tation account. The opening balance of such ac23 count shall be zero.

24 ‘‘(B) INCREASES IN ACCOUNT.—For each

25 taxable year beginning after September 30,
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1 1993, the taxpayer shall increase the amount in

2 the excess limitation account by the excess (if

3 any) of—

4 ‘‘(i) the amount by which the limita5 tion under section 904(a) for such taxable

6 year was increased by reason of the total

7 amount of the inclusions in gross income

8 under section 951(a) for such taxable year,

9 over

10 ‘‘(ii) the amount of any income, war

11 profits, and excess profits taxes paid, or

12 deemed paid, or accrued to any foreign

13 country or possession of the United States

14 which were allowable as a credit under sec15 tion 901 for such taxable year and which

16 would not have been allowable but for the

17 inclusions in gross income described in

18 clause (i).

19 Proper reductions in the amount added to the

20 account under the preceding sentence for any

21 taxable year shall be made for any increase in

22 the credit allowable under section 901 for such

23 taxable year by reason of a carryback if such

24 increase would not have been allowable but for
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1 the inclusions in gross income described in

2 clause (i).

3 ‘‘(C) DECREASES IN ACCOUNT.—For each

4 taxable year beginning after September 30,

5 1993, for which the limitation under section

6 904 was increased under paragraph (1), the

7 taxpayer shall reduce the amount in the excess

8 limitation account by the amount of such in9 crease.

10 ‘‘(3) DISTRIBUTIONS OF INCOME PREVIOUSLY

11 TAXED IN YEARS BEGINNING BEFORE OCTOBER 1,

12 1993.—If the taxpayer receives a distribution or

13 amount in a taxable year beginning after September

14 30, 1993, which is excluded from gross income

15 under section 959(a) and is attributable to any

16 amount included in gross income under section

17 951(a) for a taxable year beginning before October

18 1, 1993, the limitation under section 904 for the

19 taxable year in which such amount or distribution is

20 received shall be increased by the amount deter21 mined under this subsection as in effect on the day

22 before the date of the enactment of the Revenue

23 Reconcilation Act of 1993.’’
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1 (2) EFFECTIVE DATE.—The amendment made

2 by paragraph (1) shall apply to taxable years begin3 ning after September 30, 1993.

4 Subpart B—Allocation of Research and Experimental

5 Expenditures

6 SEC. 14234. ALLOCATION OF RESEARCH AND EXPERI7 MENTAL EXPENDITURES.

8 (a) GENERAL RULE.—Subparagraph (B) of section

9 864(f)(1) (relating to allocation of research and experi10 mental expenditures) is amended by striking ‘‘64 percent’’

11 each place it appears and inserting ‘‘50 percent’’.

12 (b) CONFORMING AMENDMENTS.—

13 (1) Subsection (f) of section 864 is amended by

14 striking paragraph (5) and inserting the following:

15 ‘‘(5) REGULATIONS.—The Secretary shall pre16 scribe such regulations as may be appropriate to

17 carry out the purposes of this subsection, including

18 regulations relating to the determination of whether

19 any expenses are attributable to activities conducted

20 in the United States or outside the United States

21 and regulations providing such adjustments to the

22 provisions of this subsection as may be appropriate

23 in the case of cost-sharing arrangements and con24 tract research.’’
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1 (2) Subparagraph (D) of section 864(f)(4) is

2 amended by striking ‘‘subparagraph (C)’’ and insert3 ing ‘‘subparagraph (B) or (C)’’.

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to taxable years ending after the

6 date of the enactment of this Act; except that such amend7 ments shall not apply in the case of any taxable year to

8 which Revenue Procedure 92–56 applies or would apply

9 if the taxpayer elected the benefits of such Revenue Proce10 dure.

11 Subpart C—Other Provisions

12 SEC. 14235. REPEAL OF CERTAIN EXCEPTIONS FOR WORK13 ING CAPITAL.

14 (a) PROVISIONS RELATING TO OIL AND GAS IN15 COME.—

16 (1) AMENDMENTS TO SECTION 907.—

17 (A) Paragraph (1) of section 907(c) is

18 amended by adding at the end thereof the fol19 lowing new flush sentence:

20 ‘‘Such term does not include any dividend or interest in21 come which is passive income (as defined in section

22 904(d)(2)(A)).’’.

23 (B) Paragraph (2) of section 907(c) is

24 amended by adding at the end thereof the fol25 lowing new flush sentence:
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1 ‘‘Such term does not include any dividend or interest in2 come which is passive income (as defined in section

3 904(d)(2)(A)).’’.

4 (2) SEPARATE APPLICATION OF FOREIGN TAX

5 CREDIT.—Clause (iii) of section 904(d)(2)(A) is

6 amended by inserting ‘‘and’’ at the end of subclause

7 (II), by striking ‘‘, and’’ at the end of subclause

8 (III) and inserting a period, and by striking

9 subclause (IV).

10 (3) TREATMENT UNDER SUBPART F.—

11 (A) Paragraph (1) of section 954(g) is

12 amended by adding at the end thereof the fol13 lowing new flush sentence:

14 Such term shall not include any foreign personal holding

15 company income (as defined in subsection (c)).’’.

16 (B) Paragraph (8) of section 954(b) is

17 amended by striking ‘‘(1),’’.

18 (b) TREATMENT OF SHIPPING INCOME.—Subsection

19 (f) of section 954 is amended by adding at the end thereof

20 the following new sentence: ‘‘Such term shall not include

21 any dividend or interest income which is foreign personal

22 holding company income (as defined in subsection (c)).’’.

23 (c) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to taxable years beginning after

25 December 31, 1992.
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1 SEC. 14236. MODIFICATIONS OF ACCURACY-RELATED PEN2 ALTY.

3 (a) THRESHOLD REQUIREMENT.—Clause (ii) of sec4 tion 6662(e)(1)(B) (relating to substantial valuation

5 misstatement under chapter 1) is amended to read as

6 follows:

7 ‘‘(ii) the net section 482 transfer price

8 adjustment for the taxable year exceeds

9 the lesser of $5,000,000 or 10 percent of

10 the taxpayer’s gross receipts.’’

11 (b) CERTAIN ADJUSTMENTS EXCLUDED IN DETER12 MINING THRESHOLD.—Subparagraph (B) of section

13 6662(e)(3) is amended to read as follows:

14 ‘‘(B) CERTAIN ADJUSTMENTS EXCLUDED

15 IN DETERMINING THRESHOLD.—For purposes

16 of determining whether the threshold require17 ments of paragraph (1)(B)(ii) are met, the fol18 lowing shall be excluded:

19 ‘‘(i) Any portion of the net increase in

20 taxable income referred to in subparagraph

21 (A) which is attributable to any redeter22 mination of a price if—

23 ‘‘(I) it is established that the tax24 payer determined such price in ac25 cordance with a specific pricing meth26 od set forth in the regulations pre-
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1 scribed under section 482 and that

2 the taxpayer’s use of such method was

3 reasonable,

4 ‘‘(II) the taxpayer has docu5 mentation (which was in existence as

6 of the time of filing the return) which

7 sets forth the determination of such

8 price in accordance with such a meth9 od and which establishes that the use

10 of such method was reasonable, and

11 ‘‘(III) the taxpayer provides such

12 documentation to the Secretary within

13 30 days of a request for such docu14 mentation.

15 ‘‘(ii) Any portion of the net increase

16 in taxable income referred to in subpara17 graph (A) which is attributable to a rede18 termination of price where such price was

19 not determined in accordance with such a

20 specific pricing method if—

21 ‘‘(I) the taxpayer establishes that

22 none of such pricing methods was

23 likely to result in a price that would

24 clearly reflect income, the taxpayer

25 used another pricing method to deter-
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1 mine such price, and such other pric2 ing method was likely to result in a

3 price that would clearly reflect in4 come,

5 ‘‘(II) the taxpayer has docu6 mentation (which was in existence as

7 of the time of filing the return) which

8 sets forth the determination of such

9 price in accordance with such other

10 method and which establishes that the

11 requirements of subclause (I) were

12 satisfied, and

13 ‘‘(III) the taxpayer provides such

14 documentation to the Secretary within

15 30 days of request for such docu16 mentation.

17 ‘‘(iii) Any portion of such net increase

18 which is attributable to any transaction

19 solely between foreign corporations unless,

20 in the case of any such corporations, the

21 treatment of such transaction affects the

22 determination of income from sources with23 in the United States or taxable income ef24 fectively connected with the conduct of a
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1 trade or business within the United

2 States.’’

3 (b) COORDINATION WITH REASONABLE CAUSE EX4 CEPTION.—Paragraph (3) of section 6662(e) is amended

5 by adding at the end thereof the following new sub6 paragraph:

7 ‘‘(D) COORDINATION WITH REASONABLE

8 CAUSE EXCEPTION.—For purposes of section

9 6664(c) the taxpayer shall not be treated as

10 having reasonable cause for any portion of an

11 underpayment attributable to a net section 482

12 transfer price adjustment unless such taxpayer

13 meets the requirements of clause (i), (ii), or (iii)

14 of subparagraph (B) with respect to such por15 tion.’’

16 (c) CONFORMING AMENDMENT.—Clause (iii) of sec17 tion 6662(h)(2)(A) is amended to read as follows:

18 ‘‘(iii) in paragraph (1)(B)(ii)—

19 ‘‘(I) ‘$20,000,000’ for

20 ‘$5,000,000’, and

21 ‘‘(II) ‘20 percent’ for ‘10 per22 cent’.’’

23 (d) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to taxable years beginning after

25 December 31, 1993.
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1 SEC. 14237. DENIAL OF PORTFOLIO INTEREST EXEMPTION

2 FOR CONTINGENT INTEREST.

3 (a) GENERAL RULE.—

4 (1) Subsection (h) of section 871 (relating to

5 repeal of tax on interest of nonresident alien individ6 uals received from certain portfolio debt invest7 ments) is amended by redesignating paragraphs (4),

8 (5), and (6) as paragraphs (5), (6), and (7), respec9 tively, and by inserting after paragraph (3) the fol10 lowing new paragraph:

11 ‘‘(4) PORTFOLIO INTEREST NOT TO INCLUDE

12 CERTAIN CONTINGENT INTEREST.—For purposes of

13 this subsection—

14 ‘‘(A) IN GENERAL.—Except as otherwise

15 provided in this paragraph, the term ‘portfolio

16 interest’ shall not include—

17 ‘‘(i) any interest if the amount of such

18 interest is determined by reference to—

19 ‘‘(I) any receipts, sales or other

20 cash flow of the debtor or a related

21 person,

22 ‘‘(II) any income or profits of the

23 debtor or a related person,

24 ‘‘(III) any change in value of any

25 property of the debtor or a related

26 person, or
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1 ‘‘(IV) any dividend, partnership

2 distributions, or similar payments

3 made by the debtor or a related per4 son, or

5 ‘‘(ii) any other type of contingent in6 terest that is identified by the Secretary by

7 regulation, where a denial of the portfolio

8 interest exemption is necessary or appro9 priate to prevent avoidance of Federal in10 come tax.

11 ‘‘(B) RELATED PERSON.—The term ‘relat12 ed person’ means any person who is related to

13 the debtor within the meaning of section 267(b)

14 or 707(b)(1), or who is a party to any arrange15 ment undertaken for a purpose of avoiding the

16 application of this paragraph.

17 ‘‘(C) EXCEPTIONS.—Subparagraph (A)(i)

18 shall not apply to—

19 ‘‘(i) any amount of interest solely by

20 reason of the fact that the timing of any

21 interest or principal payment is subject to

22 a contingency,

23 ‘‘(ii) any amount of interest solely by

24 reason of the fact that the interest is paid
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1 with respect to nonrecourse or limited re2 course indebtedness,

3 ‘‘(iii) any amount of interest all or

4 substantially all of which is determined by

5 reference to any other amount of interest

6 not described in subparagraph (A) (or by

7 reference to the principal amount of in8 debtedness on which such other interest is

9 paid),

10 ‘‘(iv) any amount of interest solely by

11 reason of the fact that the debtor or a re12 lated person enters into a hedging trans13 action to reduce the risk of interest rate or

14 currency fluctuations with respect to such

15 interest,

16 ‘‘(v) any amount of interest deter17 mined by reference to—

18 ‘‘(I) changes in the value of prop19 erty (including stock) that is actively

20 traded (within the meaning of section

21 1092(d)) other than property de22 scribed in section 897(c)(1) or (g),

23 ‘‘(II) the yield on property de24 scribed in subclause (I), other than a

25 debt instrument that pays interest de-
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1 scribed in subparagraph (A), or stock

2 or other property that represents a

3 beneficial interest in the debtor or a

4 related person, or

5 ‘‘(III) changes in any index of

6 the value of property described in

7 subclause (I) or of the yield on prop8 erty described in subclause (II), and

9 ‘‘(vi) any other type of interest identi10 fied by the Secretary by regulation.

11 ‘‘(D) EXCEPTION FOR CERTAIN EXISTING

12 INDEBTEDNESS.—Subparagraph (A) shall not

13 apply to any interest paid or accrued with re14 spect to any indebtedness with a fixed term—

15 ‘‘(i) which was issued on or before

16 April 7, 1993, or

17 ‘‘(ii) which was issued after such date

18 pursuant to a written binding contract in

19 effect on such date and at all times there20 after before such indebtedness was issued.’’

21 (2) Subsection (c) of section 881 is amended by

22 redesignating paragraphs (4), (5), and (6) as para23 graphs (5), (6), and (7), respectively, and by insert24 ing after paragraph (3) the following new para25 graph:
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1 ‘‘(4) PORTFOLIO INTEREST NOT TO INCLUDE

2 CERTAIN CONTINGENT INTEREST.—For purposes of

3 this subsection, the term ‘portfolio interest’ shall not

4 include any interest which is treated as not being

5 portfolio interest under the rules of section

6 871(h)(4).’’

7 (b) CONFORMING AMENDMENTS.—

8 (1) Clause (ii) of section 871(h)(2)(B) is

9 amended by striking ‘‘paragraph (4)’’ and inserting

10 ‘‘paragraph (5)’’.

11 (2) Clause (ii) of section 881(c)(2)(B) is

12 amended by striking ‘‘section 871(h)(4)’’ and insert13 ing ‘‘section 871(h)(5)’’.

14 (3) Paragraph (6) of section 881(c) (as redesig15 nated by subsection (a)) is amended by striking

16 ‘‘section 871(h)(5)’’ each place it appears and in17 serting ‘‘section 871(h)(6)’’.

18 (4) Paragraph (9) of section 1441(c) is amend19 ed by striking ‘‘section 871(h)(3)’’ and inserting

20 ‘‘section 871(h)(3) or (4)’’.

21 (5) Subsection (a) of section 1442 is

22 amended—

23 (A) by striking ‘‘871(h)(3)’’ and inserting

24 ‘‘871(h)(3) or (4)’’, and
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1 (B) by striking ‘‘881(c)(3)’’ and inserting

2 ‘‘881(c)(3) or (4)’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to interest received after December

5 31, 1993.

6 SEC. 14238. REGULATIONS DEALING WITH CONDUIT AR7 RANGEMENTS.

8 Section 7701 is amended by redesignating subsection

9 (l) as subsection (m) and by inserting after subsection (k)

10 the following new subsection:

11 ‘‘(l) REGULATIONS RELATING TO CONDUIT AR12 RANGEMENTS.—The Secretary may prescribe regulations

13 recharacterizing any multiple-party financing transaction

14 as a transaction directly among any 2 or more of such

15 parties where the Secretary determines that such

16 recharacterization is appropriate to prevent avoidance of

17 any tax imposed by this title.’’

18 PART IV—ENERGY TAX PROVISIONS

19 Subpart A—Energy Tax Based on Btu Content

20 SEC. 14241. IMPOSITION OF ENERGY TAX BASED ON BTU

21 CONTENT.

22 (a) IN GENERAL.—Chapter 36 (relating to other ex23 cise taxes) is amended by redesignating subchapters A and

24 B as subchapters B and C, respectively, and by inserting
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1 before subchapter B (as so redesignated) the following

2 new subchapter:

3 ‘‘SUBCHAPTER A—ENERGY TAXES

‘‘Part I. Imposition of tax on refined petroleum products.

‘‘Part II. Imposition of taxes on natural gas, coal, and electricity.

‘‘Part III. Tax rates.

‘‘Part IV. Use taxes; floor stocks taxes; administrative provisions;

definitions and special rules.

‘‘Part V. Tax on imported products with high embedded energy

costs.

4 ‘‘PART I—IMPOSITION OF TAX ON REFINED

5 PETROLEUM PRODUCTS

‘‘Sec. 4441. Taxable refined petroleum products.

‘‘Sec. 4442. Tax-free transfers and uses; refunds for certain sales

and uses.

6 ‘‘SEC. 4441. TAXABLE REFINED PETROLEUM PRODUCTS.

7 ‘‘(a) IMPOSITION OF TAX.—

8 ‘‘(1) IN GENERAL.—There is hereby imposed a

9 tax on any taxable refined petroleum product—

10 ‘‘(A) removed from any refinery in the

11 United States,

12 ‘‘(B) removed from any terminal in the

13 United States,

14 ‘‘(C) entered into the United States for

15 consumption, use, or warehousing, and

16 ‘‘(D) sold to any person who is not reg17 istered under section 4453(d).

18 No tax shall be imposed by subparagraph (D) if

19 there was a prior taxable removal or entry under

20 subparagraph (A), (B), or (C).
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1 ‘‘(2) EXCEPTION FOR BULK TRANSFERS TO

2 REGISTERED REFINERIES OR TERMINALS.—The tax

3 imposed by paragraph (1) shall not apply to any re4 moval or entry of any taxable refined petroleum

5 product transferred in bulk to a refinery or terminal

6 if the person removing or entering such product and

7 the operator of such refinery or terminal are reg8 istered under section 4453(d).

9 ‘‘(b) RATE OF TAX.—

10 ‘‘(1) IN GENERAL.—The amount of the tax im11 posed by subsection (a) on each barrel of any tax12 able refined petroleum product shall be the sum of—

13 ‘‘(A) the base rate, and

14 ‘‘(B) the supplemental rate,

15 multiplied by the applicable per unit Btu factor for

16 such product.

17 ‘‘(2) ONLY BASE RATE APPLIES TO QUALIFIED

18 HEATING OIL, DIESEL FUEL USED ON FARMS, AND

19 LIQUEFIED PETROLEUM GASES.—

20 ‘‘(A) IN GENERAL.—Subparagraph (B) of

21 paragraph (1) shall not apply to—

22 ‘‘(i) qualified heating oil,

23 ‘‘(ii) qualified farm diesel fuel, and

24 ‘‘(iii) any liquefied petroleum gas.
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1 ‘‘(B) QUALIFIED HEATING OIL.—For pur2 poses of subparagraph (A), the term ‘qualified

3 heating oil’ means No. 2 distillate fuel oil (in4 cluding any kerosene in a mixture with such oil)

5 which—

6 ‘‘(i) is indelibly dyed (or dyed and

7 marked) in accordance with regulations

8 that the Secretary shall prescribe, and

9 ‘‘(ii) is delivered (or is to be delivered)

10 to any building to heat the building.

11 ‘‘(C) QUALIFIED FARM DIESEL FUEL.—

12 For purposes of subparagraph (A), the term

13 ‘qualified farm diesel fuel’ means any diesel fuel

14 which—

15 ‘‘(i) is indelibly dyed (or dyed and

16 marked) in accordance with regulations

17 that the Secretary shall prescribe, and

18 ‘‘(ii) is used (or to be used) on a farm

19 for farming purposes (determined under

20 section 6420(c)).

21 ‘‘(c) LIABILITY FOR TAX.—The determination of who

22 is liable for the tax imposed by subsection (a) shall be

23 made under the rules applicable in determining liability

24 for the tax imposed by section 4081. Section 4103 shall
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1 apply to the tax imposed by subsection (a) in the same

2 manner as it applies to the tax imposed by section 4081.

3 ‘‘(d) TAXABLE REFINED PETROLEUM PRODUCT.—

4 For purposes of this subchapter, the term ‘taxable refined

5 petroleum product’ means—

6 ‘‘(1) aviation gasoline,

7 ‘‘(2) motor gasoline (including blending compo8 nents of gasoline),

9 ‘‘(3) kerosene-type jet fuel,

10 ‘‘(4) naphtha-type jet fuel,

11 ‘‘(5) distillate fuel oil,

12 ‘‘(6) kerosene,

13 ‘‘(7) residual fuel oil,

14 ‘‘(8) petroleum coke,

15 ‘‘(9) butane,

16 ‘‘(10) propane,

17 ‘‘(11) ethanol,

18 ‘‘(12) methanol, and

19 ‘‘(13) to the extent provided in regulations pre20 scribed by the Secretary, any other refined petro21 leum product.

22 ‘‘(e) APPLICABLE PER UNIT BTU FACTOR.—For

23 purposes of this subchapter—

24 ‘‘(1) IN GENERAL.—
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The applicable per unit

Btu factor is the follow-

‘‘In the case of: ing amount per barrel:

Aviation gasoline ............................................ 5.048

Motor gasoline (including blending components of gasoline) ........................................... 5.267

Kerosene-type jet fuel .................................... 5.670

Naphtha-type jet fuel ..................................... 5.355

Distillate fuel oil ............................................ 5.852

Kerosene ........................................................ 5.670

Residual fuel oil ............................................. 6.486

Petroleum coke .............................................. 6.024

Ethanol .......................................................... 3.500

Methanol ........................................................ 3.500

Butane ........................................................... 4.326

Propane .......................................................... 3.836

1 ‘‘(2) MIXTURES.—Any mixture which includes a

2 taxable refined petroleum product shall be treated as

3 specified in paragraph (1) and—

4 ‘‘(A) if more than 1 such product is in5 cluded in such mixture, the applicable per unit

6 Btu factor shall be the weighted average of the

7 applicable per unit Btu factors for the taxable

8 refined petroleum products included in the mix9 ture, and

10 ‘‘(B) if any substance is included in the

11 mixture which is not a taxable refined petro12 leum product, the applicable per unit Btu factor

13 for the portion of such mixture’s volume which

14 is attributable to such substance shall be zero.

15 ‘‘(3) CROSS REFERENCE.—

‘‘For authority to adjust per unit Btu amounts, see

section 4453(e).
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1 ‘‘(f) OTHER DEFINITIONS.—For purposes of this

2 subchapter—

3 ‘‘(1) REFINERY.—The term ‘refinery’ means

4 any facility—

5 ‘‘(A) at which crude oil or any petroleum

6 product is refined,

7 ‘‘(B) which is a natural gas processing or

8 fractionation plant, or

9 ‘‘(C) at which ethanol or methanol is pro10 duced for use as a fuel.

11 ‘‘(2) BLENDING COMPONENTS.—The term

12 ‘blending components’ does not include ethanol or

13 methanol.

14 ‘‘(3) ETHANOL AND METHANOL.—The terms

15 ‘ethanol’ and ‘methanol’ include ether derivatives of

16 ethanol and methanol, respectively.

17 ‘‘(4) BARREL.—The term ‘barrel’ means 42

18 United States gallons determined with such tem19 perature adjustments as the Secretary may pre20 scribe. In the case of a taxable refined petroleum

21 product which is not a liquid, the term ‘barrel’

22 means a volume determined under regulations pre23 scribed by the Secretary on the basis of an equiva24 lence to a barrel of oil.
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1 ‘‘(g) REFUNDS IN CERTAIN CASES.—Under regula2 tions prescribed by the Secretary, if any person who paid

3 the tax imposed by this section with respect to any taxable

4 refined petroleum product establishes to the satisfaction

5 of the Secretary that a prior tax was paid (and not cred6 ited or refunded) with respect to such product, then an

7 amount equal to the tax paid by such person shall be al8 lowed as a refund (without interest) to such person in the

9 same manner as if it were an overpayment of tax imposed

10 by this section.

11 ‘‘SEC. 4442. TAX-FREE TRANSFERS AND USES; REFUNDS

12 FOR CERTAIN SALES AND USES.

13 ‘‘(a) TAX-FREE SALES, ETC.—

14 ‘‘(1) IN GENERAL.—No tax shall be imposed by

15 section 4441—

16 ‘‘(A) on any taxable refined petroleum

17 product which is used in an exempt use by the

18 person otherwise liable for such tax, or

19 ‘‘(B) by reason of a removal, entry, or sale

20 of such product for an exempt use by the per21 son receiving the product.

22 ‘‘(2) EXEMPT USE.—For purposes of this sub23 section, the term ‘exempt use’ means—

24 ‘‘(A) export,
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1 ‘‘(B) any use in the generation of elec2 tricity,

3 ‘‘(C) any qualified feedstock use, and

4 ‘‘(D) any use in the manufacture or pro5 duction of synthetic natural gas or any other

6 synthetic fuel specified in regulations prescribed

7 by the Secretary.

8 ‘‘(3) QUALIFIED FEEDSTOCK USE.—For pur9 poses of this subsection—

10 ‘‘(A) IN GENERAL.—In the case of any

11 qualified feedstock use, only the exempt per12 centage of any taxable refined petroleum prod13 uct shall be exempt from tax under paragraph

14 (1).

15 ‘‘(B) QUALIFIED FEEDSTOCK USE.—The

16 term ‘qualified feedstock use’ means use of any

17 taxable refined petroleum product in the manu18 facture or production of any substance.

19 ‘‘(C) EXEMPT PERCENTAGE.—For pur20 poses of subparagraph (A), the term ‘exempt

21 percentage’ means the percentage (determined

22 on the basis of chemical structure) of the tax23 able refined petroleum product which is incor24 porated into the substance manufactured or

25 produced.
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1 ‘‘(4) REGISTRATION REQUIREMENTS.—To the

2 extent provided by the Secretary, paragraph (1)

3 shall not apply to any taxable event unless—

4 ‘‘(A) such persons with respect to such

5 event as the Secretary may specify are reg6 istered under section 4453(d), and

7 ‘‘(B) in the case of a sale, the purchaser’s

8 name and address, and the purchaser’s reg9 istration number for purposes of this sub10 chapter, are provided to the seller.

11 ‘‘(5) REFUNDS OF PRODUCTS PURCHASED TAX12 PAID.—If tax was imposed under section 4441 with

13 respect to any taxable refined petroleum product and

14 such product is used by any person in an exempt

15 use, the Secretary shall pay to such person an

16 amount equal to the tax so imposed (or, in the case

17 of a qualified feedstock use, the exempt percentage

18 of the tax so imposed).

19 ‘‘(6) CROSS REFERENCE.—

‘‘For tax on fuel used to produce steam at facility

which also generates electricity, see section 4451(e).

20 ‘‘(b) REFUNDS TO ULTIMATE VENDORS IN CERTAIN

21 CASES.—Under regulations prescribed by the Secretary—

22 ‘‘(1) HEATING OIL.—If the supplemental rate

23 of tax was imposed under section 4441 with respect

24 to any No. 2 distillate fuel oil (including any ker-
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1 osene in a mixture with such oil) and such fuel oil

2 is delivered to any building to heat the building, the

3 Secretary shall pay to the ultimate vendor of such

4 fuel oil an amount equal to the product of the sup5 plemental rate and the applicable per unit Btu fac6 tor per barrel of the fuel oil (and kerosene) so deliv7 ered.

8 ‘‘(2) INTERNATIONAL COMMERCIAL TRANSPOR9 TATION.—

10 ‘‘(A) IN GENERAL.—If tax was imposed

11 under section 4441 with respect to any taxable

12 refined petroleum product and such product is

13 sold for use or used by the purchaser for inter14 national commercial transportation, the Sec15 retary shall pay to the ultimate vendor of such

16 product an amount equal to the tax so imposed.

17 ‘‘(B) INTERNATIONAL COMMERCIAL

18 TRANSPORTATION.—For purposes of subpara19 graph (A), the term ‘international commercial

20 transportation’ means transportation in the

21 trade or business of transporting persons or

22 property for hire—

23 ‘‘(i) by any vessel actually engaged in

24 foreign trade or trade between the United

25 States and any of its possessions, or
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1 ‘‘(ii) by aircraft from a point within

2 the United States to a point outside the

3 United States and outside the 225-mile

4 zone (as defined in section 4262(c)(2)).

5 ‘‘(3) VENDOR REQUIREMENTS.—A payment

6 may be made under this subsection to a vendor only

7 if the vendor establishes that such vendor—

8 ‘‘(A)(i) has not included the tax in the

9 price of the product, and

10 ‘‘(ii) has not collected the tax from the

11 purchaser of such product, or

12 ‘‘(B) has agreed to repay the tax to the

13 purchaser.

14 ‘‘(c) PRODUCTION OF CALCINED COKE.—If tax was

15 imposed under section 4441 with respect to any petroleum

16 product and such product is used by any person to

17 produce calcined coke, the Secretary shall pay to such per18 son an amount equal to the sum of the base rate and the

19 supplemental rate for each million Btu’s of the actual Btu

20 content of the coke produced.

21 ‘‘(d) CROSS REFERENCE.—

‘‘For refunds of gasoline and diesel fuel used on

farms, see sections 6420(a) and 6427(m).

22 ‘‘PART II—IMPOSITION OF TAXES ON NATURAL

23 GAS, COAL, AND ELECTRICITY

‘‘Sec. 4444. Natural gas.
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‘‘Sec. 4445. Coal.

‘‘Sec. 4446. Electricity.

1 ‘‘SEC. 4444. NATURAL GAS.

2 ‘‘(a) IMPOSITION OF TAX.—

3 ‘‘(1) IN GENERAL.—There is hereby imposed a

4 tax on natural gas—

5 ‘‘(A) removed from any pipeline in the

6 United States,

7 ‘‘(B) entered into the United States for

8 consumption, use, or warehousing, and

9 ‘‘(C) entered into any pipeline the operator

10 of which is not registered under section

11 4453(d).

12 ‘‘(2) EXCEPTION FOR TRANSFERS TO REG13 ISTERED PIPELINES.—

14 ‘‘(A) PIPELINE TO PIPELINE TRANS15 FERS.—The tax imposed by paragraph (1) shall

16 not apply to any removal from a pipeline to an17 other pipeline if the operators of both pipelines

18 are registered under section 4453(d).

19 ‘‘(B) ENTRY INTO UNITED STATES TO

20 PIPELINE TRANSFERS.—The tax imposed by

21 paragraph (1) shall not apply to any entry into

22 the United States if—

23 ‘‘(i) pursuant to such entry the natu24 ral gas is entered into any pipeline, and
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1 ‘‘(ii) the operator of such pipeline is

2 registered under section 4453(d).

3 ‘‘(b) RATE OF TAX.—

4 ‘‘(1) IN GENERAL.—The amount of the tax im5 posed by subsection (a) on each MCF of natural gas

6 shall be the base rate multiplied by the applicable

7 per unit Btu factor.

8 ‘‘(2) AUTHORITY TO USE ACTUAL BTU CON9 TENT.—To the extent provided in regulations pre10 scribed by the Secretary, the amount of the tax im11 posed by subsection (a) shall be the base rate for

12 each million Btu’s of the actual Btu content of the

13 natural gas.

14 ‘‘(c) LIABILITY FOR, AND COLLECTION OF, TAX.—

15 ‘‘(1) IN GENERAL.—The tax imposed by sub16 section (a)(1)(A)—

17 ‘‘(A) shall be paid by the person receiving

18 the natural gas, and

19 ‘‘(B) shall be collected by the operator of

20 the pipeline.

21 ‘‘(2) IMPORTATION.—The tax imposed by sub22 section (a)(1)(B) shall be paid by the person enter23 ing the natural gas into the United States for con24 sumption, use, or warehousing.
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1 ‘‘(3) ENTRY INTO UNREGISTERED PIPELINES.—

2 The tax imposed by subsection (a)(1)(C) shall be

3 paid by the person entering the natural gas.

4 ‘‘(4) COLLECTION OF TAX.—

5 ‘‘(A) IN GENERAL.—In the case of natural

6 gas removed from a local distribution system,

7 the operator shall also be liable for any tax im8 posed by subsection (a) which is not collected

9 from the person receiving the natural gas.

10 ‘‘(B) EXCEPTION FOR LARGE USERS FROM

11 LOCAL DISTRIBUTION SYSTEMS.—Subparagraph

12 (A) shall not apply to natural gas received by

13 any person during any month from a local dis14 tribution system if the value (exclusive of taxes)

15 of the natural gas received by such person from

16 such system during the 12-month period ending

17 before such month exceeded $3,500,000.

18 ‘‘(d) DEFINITIONS.—For purposes of this

19 subchapter—

20 ‘‘(1) APPLICABLE PER UNIT BTU FACTOR.—

21 ‘‘(A) IN GENERAL.—The applicable per

22 unit Btu factor with respect to natural gas is

23 1.031 per MCF.

24 ‘‘(B) CROSS REFERENCE.—

‘‘For authority to adjust per unit Btu amounts, see

section 4453(e).
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1 ‘‘(2) PIPELINE.—The term ‘pipeline’ includes a

2 local distribution system. To the extent provided in

3 regulations prescribed by the Secretary, such term

4 includes a gathering system.

5 ‘‘(3) NATURAL GAS.—The term ‘natural gas’

6 includes synthetic natural gas produced from coal or

7 from any petroleum product.

8 ‘‘(4) MCF.—The term ‘MCF’ means 1,000

9 cubic feet of natural gas measured at a pressure of

10 14.73 pounds per square inch (absolute) and a tem11 perature of 60 degrees Fahrenheit.

12 ‘‘(e) EXEMPTION FROM TAX FOR CERTAIN USES.—

13 ‘‘(1) IN GENERAL.—No tax shall be imposed by

14 subparagraph (A) or (B) of subsection (a)(1)—

15 ‘‘(A) on any natural gas which is used in

16 an exempt natural gas use by the person other17 wise liable for such tax, or

18 ‘‘(B) by reason of a removal or entry of

19 natural gas for an exempt natural gas use by

20 the person receiving the natural gas.

21 ‘‘(2) EXEMPT NATURAL GAS USE.—For pur22 poses of this subsection, the term ‘exempt natural

23 gas use’ means—

24 ‘‘(A) use in the generation of electricity,

25 ‘‘(B) any qualified feedstock use, or
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1 ‘‘(C) use in enhanced heavy oil recovery.

2 ‘‘(3) QUALIFIED FEEDSTOCK USE.—For pur3 poses of this subsection—

4 ‘‘(A) IN GENERAL.—In the case of any

5 qualified feedstock use, only the exempt per6 centage of the natural gas shall be exempt from

7 tax under paragraph (1).

8 ‘‘(B) QUALIFIED FEEDSTOCK USE; EX9 EMPT PERCENTAGE.—The terms ‘qualified feed10 stock use’ and ‘exempt percentage’ have the re11 spective meanings given such terms by section

12 4442(a)(3) determined by substituting ‘natural

13 gas’ for ‘taxable refined petroleum product’

14 each place it appears.

15 ‘‘(4) ENHANCED HEAVY OIL RECOVERY.—For

16 purposes of this subsection—

17 ‘‘(A) IN GENERAL.—Natural gas shall be

18 treated as used in enhanced heavy oil recovery

19 if such gas is used in an enhanced oil recovery

20 project in the United States for the recovery of

21 oil having a weighted average gravity of 20 de22 grees API or less (corrected to 60 degrees

23 Fahrenheit).

24 ‘‘(B) ENHANCED OIL RECOVERY

25 PROJECT.—For purposes of subparagraph (A),
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1 the term ‘enhanced oil recovery project’ means

2 any project which involves the application (in

3 accordance with sound engineering principles)

4 of 1 or more tertiary recovery methods (as de5 fined in section 193(b)(3)) which can reason6 ably be expected to result in more than an in7 significant increase in the amount of crude oil

8 which will ultimately be recovered.

9 ‘‘(5) REGISTRATION REQUIREMENTS.—To the

10 extent provided by the Secretary, paragraph (1)

11 shall not apply to any taxable event unless the re12 quirements of section 4442(a)(4) are met with re13 spect to such event.

14 ‘‘(6) REFUNDS OF NATURAL GAS PURCHASED

15 TAX-PAID.—If tax was imposed by this section with

16 respect to any natural gas and such gas is used by

17 any person in an exempt natural gas use, the Sec18 retary shall pay to such person an amount equal to

19 the tax so imposed (or, in the case of a qualified

20 feedstock use, the exempt percentage of the tax so

21 imposed).

22 ‘‘(7) CROSS REFERENCE.—

‘‘For tax on fuel used to produce steam at facility

which also generates electricity, see section 4451(e).

23 ‘‘(f) METHANE RECOVERED FROM BIOMASS OR

24 COAL MINING.—
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1 ‘‘(1) IN GENERAL.—If—

2 ‘‘(A) methane is recovered from biomass or

3 in conjunction with room and pillar or long wall

4 coal mining operations, and

5 ‘‘(B) such methane is entered into any nat6 ural gas pipeline,

7 the Secretary shall pay to the person so entering

8 such methane an amount equal to the amount of tax

9 which would be imposed under this section on such

10 methane if such entry were a taxable event under

11 such section.

12 ‘‘(2) RECAPTURE OF CREDIT FOR METHANE

13 RECOVERED FROM COAL MINING IN CERTAIN

14 CASES.—

15 ‘‘(A) IN GENERAL.—If—

16 ‘‘(i) the Secretary has made a pay17 ment under paragraph (1) to any person

18 with respect to methane recovered from

19 coal mining operations before the date the

20 actual mining commences, and

21 ‘‘(ii)(I) such person disposes of his in22 terest in such coal mining operations, or

23 ‘‘(II) the actual mining commences

24 more than 10 years after the date such

25 methane was first recovered,
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1 then the tax under chapter 1 of such person for

2 the taxable year in which such disposition oc3 curs (or, in a case to which clause (ii)(II) ap4 plies, such 10th year ends) shall be increased

5 by the aggregate of such payments to such per6 son plus interest at the underpayment rate

7 under section 6621 for the periods beginning on

8 the dates such payments were made.

9 ‘‘(B) NO FURTHER PAYMENTS UNTIL MIN10 ING COMMENCES.—If there is an increase in tax

11 under subparagraph (A) with respect to any

12 payments for methane recovered from any site,

13 no further payments shall be made under this

14 subsection with respect to methane recovered

15 from such site until actual mining commences

16 at such site.

17 ‘‘(C) NO CREDITS AGAINST TAX, ETC.—

18 Any increase in tax under this paragraph shall

19 not be taken into account in determining the

20 amount of any credit allowable under part IV of

21 subchapter A of chapter 1 or in determining the

22 amount of the tax imposed by section 55.

23 ‘‘(D) CHANGES IN FORM OF BUSINESS DIS24 REGARDED.—A person shall not be treated as

25 disposing of an interest in coal mining oper-
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1 ations by reason of a mere change in the form

2 of conducting the trade or business so long as

3 the coal mining operations are retained in such

4 trade or business and the taxpayer retains a

5 substantial interest in such trade or business.

6 ‘‘(g) REFUNDS IN CERTAIN CASES.—A rule similar

7 to the rule of section 4441(g) shall apply to the tax im8 posed by this section.

9 ‘‘SEC. 4445. COAL.

10 ‘‘(a) GENERAL RULE.—There is hereby imposed a

11 tax on coal received at any facility in the United States

12 for use as a fuel at such facility.

13 ‘‘(b) RATE OF TAX.—The amount of the tax imposed

14 by subsection (a) shall be the base rate for each million

15 Btu’s of the actual Btu content of the coal. For purposes

16 of the preceding sentence, the actual Btu content of any

17 coal shall be determined under procedures prescribed by

18 the Secretary.

19 ‘‘(c) LIABILITY FOR TAX.—

20 ‘‘(1) IN GENERAL.—Except as otherwise pro21 vided in this subsection, the tax imposed by sub22 section (a) shall be paid by the operator of the facil23 ity.

24 ‘‘(2) COAL RECEIVED AT SMALL FACILITIES.—

25 If the ultimate vendor of coal received at a facility
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1 receives a certificate from the operator of such facil2 ity (or otherwise determines) that such facility re3 ceived less than 1,000 tons of coal during the pre4 ceding calendar year, the tax imposed by subsection

5 (a) shall be paid by the ultimate vendor.

6 ‘‘(3) RESIDENTIAL PROPERTY.—

7 ‘‘(A) IN GENERAL.—In the case of coal re8 ceived at a residential property, the tax imposed

9 by subsection (a) shall be paid by the ultimate

10 vendor.

11 ‘‘(B) RESIDENTIAL PROPERTY.—For pur12 poses of this paragraph, the term ‘residential

13 property’ means any building which contains 1

14 or more dwelling units used for residential pur15 poses other than on a transient basis.

16 ‘‘(d) EXEMPTION FROM TAX FOR CERTAIN USES.—

17 ‘‘(1) IN GENERAL.—No tax shall be imposed by

18 subsection (a) on coal received for—

19 ‘‘(A) use in the generation of electricity,

20 ‘‘(B) any qualified feedstock use,

21 ‘‘(C) use in enhanced heavy oil recovery

22 (as determined under section 4444(e)(4) by

23 substituting ‘coal’ for ‘natural gas’),

24 ‘‘(D) use in the manufacture or production

25 of synthetic natural gas or any other synthetic
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1 fuel specified in regulations prescribed by the

2 Secretary, or

3 ‘‘(E) any use in a vessel used in inter4 national commercial transportation (as defined

5 in section 4442(b)(2)(B)(i)).

6 ‘‘(2) QUALIFIED FEEDSTOCK USE.—For pur7 poses of this subsection—

8 ‘‘(A) IN GENERAL.—In the case of any

9 qualified feedstock use, only the exempt per10 centage of the coal shall be exempt from tax

11 under paragraph (1).

12 ‘‘(B) QUALIFIED FEEDSTOCK USE; EX13 EMPT PERCENTAGE.—The terms ‘qualified feed14 stock use’ and ‘exempt percentage’ have the re15 spective meanings given such terms by section

16 4442(a)(3) determined by substituting ‘coal’ for

17 ‘taxable refined petroleum product’ each place it

18 appears.

19 ‘‘(3) CROSS REFERENCE.—

‘‘For tax on fuel used to produce steam at facility

which also generates electricity, see section 4451(e).

20 ‘‘(e) PRODUCTION OF COKE FOR STEEL.—If tax was

21 imposed under this subchapter with respect to any coal

22 and such coal is used by any person to produce coke for

23 use in the reduction of iron-bearing ores in the iron and

24 steel process, the Secretary shall pay to such person an
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1 amount equal to the base rate for each million Btu’s of

2 the actual Btu content of the coke produced.

3 ‘‘SEC. 4446. ELECTRICITY.

4 ‘‘(a) GENERAL RULE.—There is hereby imposed a

5 tax on—

6 ‘‘(1) the sale of electricity to ultimate users in

7 the United States, and

8 ‘‘(2) the use of electricity in the United States

9 which was not subject to tax under paragraph (1).

10 ‘‘(b) RATE OF TAX.—The amount of the tax imposed

11 by subsection (a) on each kilowatt hour of electricity sold

12 or used during any month shall be the deemed Btu tax

13 per kilowatt hour applicable for such month—

14 ‘‘(1) to the seller in the case of the tax imposed

15 by subsection (a)(1), and

16 ‘‘(2) to the user in the case of the tax imposed

17 by subsection (a)(2).

18 ‘‘(c) LIABILITY FOR, AND COLLECTION OF, TAX.—

19 ‘‘(1) SALES.—The tax imposed by subsection

20 (a)(1)—

21 ‘‘(A) shall be paid by the person to whom

22 the electricity is sold, and

23 ‘‘(B) shall be collected by the seller.
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1 ‘‘(2) USES.—The tax imposed by subsection

2 (a)(2) shall be paid by the person using the elec3 tricity.

4 ‘‘(3) COLLECTION OF TAX.—

5 ‘‘(A) IN GENERAL.—The seller shall also

6 be liable for the tax imposed by subsection

7 (a)(1) which is not collected from the person to

8 whom the electricity is sold.

9 ‘‘(B) EXCEPTION FOR LARGE USERS.—

10 Subparagraph (A) shall not apply to electricity

11 sold to any person during any month by the

12 seller if the amount paid by such person for

13 electricity (exclusive of taxes) sold by such sell14 er during the 12-month period ending before

15 such month exceeded $3,500,000.

16 ‘‘(d) DEEMED BTU TAXES.—For purposes of this

17 section—

18 ‘‘(1) IN GENERAL.—The deemed Btu taxes per

19 kilowatt hour of electricity applicable to any person

20 for any month shall be the weighted average of—

21 ‘‘(A) the deemed Btu taxes per kilowatt

22 hour of electricity generated at each facility of

23 the person during the base period, and
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1 ‘‘(B) the deemed Btu taxes per kilowatt

2 hour of electricity purchased by such person

3 during the base period.

4 For purposes of this paragraph, the term ‘base pe5 riod’ means, with respect to any month, the 2d

6 month preceding such month.

7 ‘‘(2) DEEMED BTU TAXES PER FACILITY.—The

8 deemed Btu taxes per kilowatt hour of electricity

9 generated at any facility during any month shall be

10 determined by dividing—

11 ‘‘(A) the deemed Btu taxes on fuels used

12 at such facility to generate electricity during

13 such month by

14 ‘‘(B) the aggregate kilowatt hours of elec15 tricity generated at such facility during such

16 month.

17 ‘‘(3) DEEMED BTU TAXES.—

18 ‘‘(A) IN GENERAL.—Except as otherwise

19 provided in this paragraph, the term ‘deemed

20 Btu taxes’ means, with respect to electricity,

21 the aggregate taxes which would have been im22 posed by this subchapter on the fuels used to

23 generate such electricity—

24 ‘‘(i) but for the exemption of such

25 fuels from such taxes, and
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1 ‘‘(ii) determined as of the month for

2 which the rate of the tax imposed by sub3 section (a) is being determined.

4 ‘‘(B) ELECTRICITY GENERATED BY HY5 DROPOWER OR NUCLEAR POWER.—The deemed

6 Btu taxes per kilowatt hour of electricity gen7 erated by hydropower or nuclear power shall be

8 equal to the base rate multiplied by a fraction

9 the numerator of which is 10,335 and the de10 nominator of which is 1,000,000.

11 ‘‘(C) IMPORTED ELECTRICITY.—

12 ‘‘(i) IN GENERAL.—Except as pro13 vided in clause (ii), the deemed Btu taxes

14 per kilowatt hour of electricity transmitted

15 into the United States shall be determined

16 as if such electricity were generated by hy17 dropower.

18 ‘‘(ii) LOWER DEEMED BTU TAX MAY

19 BE ESTABLISHED.—If the importer estab20 lishes to the satisfaction of the Secretary

21 the amount which would be the deemed

22 Btu taxes per kilowatt hour of the elec23 tricity if the electricity were generated in

24 the United States, such amount shall be

25 used in lieu of the amount under clause (i).
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1 ‘‘(D) ELECTRICITY GENERATED BY RE2 NEWABLE SOURCES.—The deemed Btu taxes

3 per kilowatt hour of electricity generated from

4 any renewable source shall be zero. For pur5 poses of the preceding sentence, the term ‘re6 newable source’ means solar energy, wind en7 ergy, any geothermal deposit, biomass, munici8 pal solid waste, and tires.

9 ‘‘(4) SELLERS TO SPECIFY DEEMED BTU

10 TAXES.—

11 ‘‘(A) IN GENERAL.—In the case of elec12 tricity which is sold other than to the ultimate

13 user, the seller shall certify to the purchaser the

14 deemed Btu taxes per kilowatt hour of the elec15 tricity sold.

16 ‘‘(B) FAILURE TO CERTIFY.—If the seller

17 fails to so certify—

18 ‘‘(i) the tax imposed by subsection (a)

19 shall apply to such sale at the rate speci20 fied in subparagraph (C),

21 ‘‘(ii) the tax imposed by subsection (a)

22 shall apply to any subsequent sale or use

23 without regard to clause (i), and

24 ‘‘(iii) the rate specified in subpara25 graph (C) shall be the deemed Btu taxes
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1 per kilowatt hour of such electricity for

2 purposes of determining the tax imposed

3 by subsection (a) on any subsequent sale

4 or use of such electricity.

5 ‘‘(C) RATE.—The rate specified in this

6 subparagraph is, for each kilowatt hour, the

7 product of—

8 ‘‘(i) the sum of the base rate and the

9 supplemental rate, multiplied by

10 ‘‘(ii) a fraction the numerator of

11 which is 10,335 and the denominator of

12 which is 1,000,000.

13 ‘‘(5) REGULATIONS.—The Secretary shall pre14 scribe such regulations as may be necessary or ap15 propriate to carry out this subsection, including

16 regulations—

17 ‘‘(A) prescribing a base period to be used

18 by any person not in existence during the base

19 period, and

20 ‘‘(B) prescribing such other modifications

21 to the application of this subsection as are nec22 essary to carry out the purposes of this sub23 section.

24 ‘‘(e) EXCEPTIONS.—
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1 ‘‘(1) ELECTRICITY USED IN CERTAIN ELECTRO2 LYTIC PROCESSES.—

3 ‘‘(A) IN GENERAL.—In the case of elec4 tricity used in any electrolytic process, the tax

5 imposed by this section shall not apply to the

6 feedstock portion of such electricity.

7 ‘‘(B) FEEDSTOCK PORTION.—For purposes

8 of subparagraph (A), the feedstock portion of

9 electricity is the portion of the electrical energy

10 which is incorporated into the manufactured

11 product.

12 ‘‘(2) ELECTRICITY USED TO GENERATE

13 PUMPED STORAGE, ETC.—The tax imposed by this

14 section shall not apply to electricity used in the

15 United States to create any hydropower source to

16 generate electricity. The electricity generated by

17 such hydropower source shall be disregarded in de18 termining the deemed Btu taxes of the electricity.

19 ‘‘(3) USE TAX EXCEPTION.—The Secretary may

20 provide by regulations that the tax imposed by sub21 section (a)(2) shall not apply in cases where the Sec22 retary determines that such an exception is war23 ranted, after taking into account the protection of

24 revenues to the United States from this subchapter
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1 and the ease of administration for both taxpayers

2 and the Secretary.

3 ‘‘PART III—TAX RATES

‘‘Sec. 4448. Tax rates.

4 ‘‘SEC. 4448. TAX RATES.

5 ‘‘(a) BASE RATE.—For purposes of this

6 subchapter—

7 ‘‘(1) PHASE-IN RATES.—Effective during—

8 ‘‘(A) the 1-year period beginning on July

9 1, 1994, the base rate is 8.9 cents, and

10 ‘‘(B) the 1-year period beginning on July

11 1, 1995, the base rate is 17.9 cents.

12 ‘‘(2) PERMANENT UNINDEXED RATE.—Effec13 tive on and after July 1, 1996, the base rate is 26.8

14 cents.

15 ‘‘(3) INDEXED RATES.—

16 ‘‘(A) IN GENERAL.—Effective during any

17 calendar year after 1997, the base rate under

18 paragraph (2) shall be increased by an amount

19 equal to—

20 ‘‘(i) 26.8 cents, multiplied by

21 ‘‘(ii) the inflation adjustment for such

22 calendar year.

23 ‘‘(B) INFLATION ADJUSTMENT.—For pur24 poses of subparagraph (A), the inflation adjust-
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1 ment for any calendar year is the percentage (if

2 any) by which—

3 ‘‘(i) the GDP deflator for the preced4 ing calendar year, exceeds

5 ‘‘(ii) the GDP deflator for 1996.

6 ‘‘(C) GDP DEFLATOR FOR CALENDAR

7 YEAR.—For purposes of subparagraph (B), the

8 GDP deflator for any calendar year is the GDP

9 deflator for the second calendar quarter of such

10 year.

11 ‘‘(D) GDP DEFLATOR.—For purposes of

12 subparagraph (C), the term ‘GDP deflator’

13 means the most recent revision of the implicit

14 price deflator for the gross domestic product as

15 computed and published by the Department of

16 Commerce before November 15 of the calendar

17 year referred to in subparagraph (B)(i).

18 ‘‘(b) SUPPLEMENTAL RATE.—For purposes of this

19 subchapter—

20 ‘‘(1) PHASE-IN RATES.—Effective during—

21 ‘‘(A) the 1-year period beginning on July

22 1, 1994, the supplemental rate is 11.4 cents,

23 and

24 ‘‘(B) the 1-year period beginning on July

25 1, 1995, the supplemental rate is 22.8 cents.
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1 ‘‘(2) PERMANENT UNINDEXED RATE.—Effec2 tive on and after July 1, 1996, the supplemental

3 rate is 34.2 cents.

4 ‘‘(3) INDEXED RATES.—Effective during any

5 calendar year after 1997, the supplemental rate

6 under paragraph (2) shall be increased by an

7 amount equal to—

8 ‘‘(A) 34.2 cents, multiplied by

9 ‘‘(B) the inflation adjustment for such cal10 endar year determined under subsection

11 (a)(3)(B).

12 ‘‘(c) ROUNDING.—If any increase determined under

13 subsection (a)(3) or (b)(3) is not a multiple of 0.1 cent,

14 such increase shall be rounded to the nearest multiple of

15 0.1 cent.

16 ‘‘PART IV—USE TAXES; FLOOR STOCKS TAXES;

17 ADMINISTRATIVE PROVISIONS; DEFINITIONS

18 AND SPECIAL RULES

‘‘Sec. 4451. Tax on certain uses.

‘‘Sec. 4452. Floor stocks taxes.

‘‘Sec. 4453. Administrative provisions.

‘‘Sec. 4454. Definitions and special rules.

19 ‘‘SEC. 4451. TAX ON CERTAIN USES.

20 ‘‘(a) GENERAL RULE.—There is hereby imposed a

21 tax on the use of any fossil fuel—

22 ‘‘(1) in the manufacture or production in the

23 United States of a fuel other than at a refinery, or
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1 ‘‘(2) as a fuel.

2 The preceding sentence shall not apply if tax was imposed

3 under this subchapter before such use and such tax is not

4 credited or refunded.

5 ‘‘(b) RATE OF TAX.—

6 ‘‘(1) IN GENERAL.—Except as otherwise pro7 vided in this subsection, the amount of tax imposed

8 by subsection (a) shall be the amount which would

9 be imposed under the appropriate section of part I

10 or II if such use were a taxable event under such

11 section.

12 ‘‘(2) CRUDE OIL AND OTHER PRODUCTS NOT

13 TAXED ON REMOVAL OR IMPORTATION.—The

14 amount of the tax imposed by subsection (a) on

15 crude oil or other product not subject to tax under

16 part I or II shall be the base rate (increased by the

17 supplemental rate in the case of crude oil or any pe18 troleum product other than any liquefied petroleum

19 gas, isopentane, and natural gasoline) for each mil20 lion Btu’s of the Btu content of such oil or product.

21 ‘‘(3) AUTHORITY TO PRESCRIBE APPLICABLE

22 PER UNIT BTU FACTORS.—In the case of crude oil

23 or any other product for which an applicable per

24 unit Btu factor is not prescribed for purposes of

25 part I or II, the Secretary may prescribe such a fac-
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1 tor, and, if so prescribed, such factor shall apply for

2 purposes of paragraph (2).

3 ‘‘(c) LIABILITY FOR TAX.—The taxes imposed by

4 subsection (a) shall be paid by the person using the fuel.

5 ‘‘(d) EXCEPTIONS.—

6 ‘‘(1) IN GENERAL.—Except as provided in sub7 section (e), the tax imposed by this section shall not

8 apply to—

9 ‘‘(A) any use to which section 4442, sec10 tion 4444(e), or subsection (d) or (e) of section

11 4445 applies, or

12 ‘‘(B) any use of methane described in sec13 tion 4444(f)(1)(A).

14 ‘‘(2) USE ON PRODUCTION PREMISES.—The tax

15 imposed by this section shall not apply to any use

16 of crude oil or natural gas for producing crude oil

17 or natural gas if—

18 ‘‘(A) in the case of crude oil, it is used be19 fore entry at the lease automatic custody trans20 fer point (or its manual equivalent), and

21 ‘‘(B) in the case of natural gas, it is used

22 before entry into an interstate or intrastate

23 transmission pipeline.

24 ‘‘(3) CRUDE OIL USED AT REFINERY, ETC.—

25 The tax imposed by this section shall not apply to—
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1 ‘‘(A) any use of crude oil at a facility at

2 which crude oil is refined or any use at such fa3 cility of any product produced at such facility,

4 ‘‘(B) any use of natural gas at a natural

5 gas processing or fractionation plant or any use

6 at such plant of any product produced at such

7 plant, or

8 ‘‘(C) any use of ethanol at a facility at

9 which ethanol is produced for use as a fuel.

10 ‘‘(4) OTHERWISE TAXABLE EVENT OCCURRING

11 BEFORE EFFECTIVE DATE.—The tax imposed by

12 this section shall not apply to any use if no tax

13 would be imposed by this section on such use were

14 this subchapter in effect for all periods before July

15 1, 1994.

16 ‘‘(e) GENERATION OF STEAM AND ELECTRICITY.—

17 ‘‘(1) IN GENERAL.—In the case of a facility

18 which uses any taxable refined petroleum product,

19 natural gas, or coal—

20 ‘‘(A) to generate electricity, and

21 ‘‘(B) to produce steam which is used or

22 which is furnished or sold in the trade or busi23 ness of the furnishing or sale of steam,

24 the tax imposed by subsection (a) shall apply to the

25 use of such product, gas, or coal at such facility to
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1 the extent such use is attributable (determined on

2 the basis of the proportionate Btu content of the

3 electricity and the steam) to the production of steam

4 which is so used, furnished, or sold.

5 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

6 apply to steam used for any purpose if tax would not

7 be imposed under this subchapter on the fuel used

8 to produce the steam had such fuel been used di9 rectly for such purpose.

10 ‘‘(f) TREATMENT OF NATURAL GAS LOST IN TRANS11 MISSION.—For purposes of this section, natural gas lost

12 in transmission by a pipeline shall be treated as used as

13 a fuel for such pipeline.

14 ‘‘SEC. 4452. FLOOR STOCKS TAXES.

15 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed

16 a tax on any taxable fuel which on any tax-increase date

17 is held in the United States by any person.

18 ‘‘(b) AMOUNT OF TAX.—The amount of the tax im19 posed by subsection (a) on any taxable fuel with respect

20 to any tax-increase date shall be equal to the excess (if

21 any) of—

22 ‘‘(1) the amount of tax which would be imposed

23 under part I or II if a taxable event with respect to

24 such fuel had occurred on such date, over
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1 ‘‘(2) the prior tax (if any) imposed by this sub2 chapter on such fuel.

3 ‘‘(c) LIABILITY FOR TAX.—The person holding the

4 taxable fuel on any tax-increase date shall pay the tax im5 posed by subsection (a).

6 ‘‘(d) EXCEPTIONS.—The tax imposed by subsection

7 (a) shall not apply to—

8 ‘‘(1) any taxable fuel held before the point

9 where it would otherwise be subject to tax under

10 part I or II, or

11 ‘‘(2) any taxable fuel held by any person exclu12 sively for any use by such person to the extent a

13 credit or refund (or other payment) of the tax im14 posed by this section would be allowable or payable

15 if such tax were imposed by part I or II.

16 ‘‘(e) CREDIT AGAINST TAX.—

17 ‘‘(1) IN GENERAL.—Each person shall be al18 lowed $200 as a credit against the taxes imposed by

19 subsection (a) with respect to each tax-increase date.

20 Such credit shall not exceed the amount of taxes im21 posed by subsection (a) for which such person is lia22 ble with respect to such date.

23 ‘‘(2) CONTROLLED GROUPS.—For purposes of

24 paragraph (1)—
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1 ‘‘(A) all persons who are treated as a sin2 gle employer under subsection (a) or (b) of sec3 tion 52 shall be treated as 1 taxpayer, and

4 ‘‘(B) the $200 amount specified in para5 graph (1) shall be apportioned among such per6 sons under regulations prescribed by the Sec7 retary.

8 ‘‘(f) DEFINITIONS.—For purposes of this section—

9 ‘‘(1) TAXABLE FUEL.—The term ‘taxable fuel’

10 means any taxable refined petroleum product, natu11 ral gas, or coal.

12 ‘‘(2) TAX-INCREASE DATE.—The term ‘tax-in13 crease date’ means—

14 ‘‘(A) July 1, 1994,

15 ‘‘(B) July 1, 1995,

16 ‘‘(C) July 1, 1996, and

17 ‘‘(D) January 1 of each calendar year for

18 which there is an increase in a rate of tax by

19 reason of subsection (a)(3) or (b)(3) of section

20 4448 (relating to inflation adjustment).

21 ‘‘(g) DUE DATE.—The tax imposed by subsection (a)

22 shall be paid on or before the close of the 7-month period

23 beginning on the tax-increase date.
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1 ‘‘SEC. 4453. ADMINISTRATIVE PROVISIONS.

2 ‘‘(a) RULES RELATING TO REFUNDS FOR EXEMPT

3 AND OTHER USES.—

4 ‘‘(1) PERIOD FOR FILING CLAIMS.—No pay5 ment shall be made under section 4442, 4444(f), or

6 4445(e) unless, within 2 years after the date that

7 the event occurs giving rise to a right to such pay8 ment, a claim therefor is filed by the person entitled

9 to such payment.

10 ‘‘(2) DENIAL OF INTEREST.—Except as pro11 vided in paragraph (3), no interest shall be paid on

12 claims for payments under section 4442, 4444(f), or

13 4445(e).

14 ‘‘(3) MINIMUM AMOUNTS AND PERIODS.—In

15 the case of persons who meet such requirements as

16 the Secretary may prescribe, if—

17 ‘‘(A) a claim for payment is filed under

18 section 4442, 4444(f), or 4445(e) for any pe19 riod for which more than $1,000 is payable and

20 which is not less than 1 week, and

21 ‘‘(B) the Secretary has not paid such claim

22 within 20 days after the date the claim was

23 filed,

24 such claim shall be paid with interest from such date

25 using the overpayment rate and method under sec26 tion 6621. The preceding sentence shall not apply to
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1 a claim filed under section 4442(b)(1). Nothing in

2 section 6611(e) shall bar interest payable under this

3 paragraph.

4 ‘‘(4) HEATING OIL.—

5 ‘‘(A) IN GENERAL.—Except as provided in

6 subparagraph (B), not more than 1 claim may

7 be filed under section 4442(b)(1) by any person

8 with respect to fuel oil sold by such person dur9 ing any calendar year.

10 ‘‘(B) EXCEPTION.—If $1,000 or more is

11 payable under section 4442(b)(1) to any person

12 with respect to fuel oil sold during any of the

13 1st 3 quarters of the calendar year, a claim

14 may be filed under section 4442(b)(1) with re15 spect to fuel oil sold during such quarter. No

16 claim filed under this subparagraph shall be al17 lowed unless filed on or before the last day of

18 the 1st quarter following the quarter for which

19 the claim is filed.

20 ‘‘(5) APPLICABLE LAWS.—

21 ‘‘(A) IN GENERAL.—All provisions of law,

22 including penalties, applicable in respect of the

23 tax imposed by this subchapter shall, insofar as

24 applicable and not inconsistent with this sub25 section and section 4442, 4444(f), or 4445(e),
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1 apply in respect of payments provided for in

2 such section to the same extent as if such pay3 ments constituted refunds of overpayments of

4 the tax so imposed.

5 ‘‘(B) EXAMINATION OF BOOKS AND WIT6 NESSES.—For the purpose of ascertaining the

7 correctness of any claim made under section

8 4442, 4444(f), or 4445(e), or the correctness of

9 any payment made in respect of such claim, the

10 Secretary shall have the authority granted by

11 paragraphs (1), (2), and (3) of section 7602(a)

12 (relating to examination of books and wit13 nesses) as if the claimant were the person liable

14 for tax.

15 ‘‘(b) PAYMENT OF TAX TO PERSONS REQUIRED TO

16 COLLECT TAX.—

17 ‘‘(1) PAYMENT WITHIN 30 DAYS.—In the case

18 of the taxes imposed by sections 4444 and 4446

19 which are required to be collected by another person,

20 the person liable for such tax shall remit the tax to

21 such other person within 30 days after the date of

22 the taxable event.

23 ‘‘(2) RELIEF FROM PENALTY FOR CERTAIN

24 FAILURES TO COLLECT TAX.—No penalty shall be
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1 imposed under this title on the failure of any person

2 to collect the taxes referred to in paragraph (1) if—

3 ‘‘(A) during the 30-day period referred to

4 in paragraph (1), such person exercises due dili5 gence in attempting to collect such tax, and

6 ‘‘(B) such person notifies the Secretary,

7 within 15 days after the close of the month in

8 which such 30-day period ends, of the failure to

9 collect such tax and provides such other infor10 mation as the Secretary may require.

11 ‘‘(3) EXCEPTION FOR PERSONS WITH SECOND12 ARY LIABILITY.—Paragraphs (1) and (2) shall not

13 apply if the person required to collect the tax is re14 quired to pay any portion of such tax which is not

15 paid by the person primarily liable for such tax.

16 ‘‘(c) INFORMATION REPORTING.—The Secretary may

17 require—

18 ‘‘(1) information reporting by each remitter of

19 tax imposed by this subchapter, and

20 ‘‘(2) information reporting by, and registration

21 of, such other persons as the Secretary deems nec22 essary to carry out this subchapter.

23 ‘‘(d) REGISTRATION.—

24 ‘‘(1) IN GENERAL.—Every person required by

25 the Secretary to register under this subsection with
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1 respect to any tax imposed by this subchapter shall

2 register with the Secretary at such time, in such

3 form and manner, and subject to such terms and

4 conditions, as the Secretary may by regulations pre5 scribe. A registration under this subsection may be

6 used only in accordance with regulations prescribed

7 under this section.

8 ‘‘(2) OTHER RULES.—Rules similar to the rules

9 of section 4101(b) and 4222(c) shall apply for pur10 poses of this subsection.

11 ‘‘(e) ADJUSTMENTS TO PER UNIT BTU FACTORS.—

12 ‘‘(1) IN GENERAL.—If the Secretary determines

13 that the applicable per unit Btu factor then in effect

14 for any taxable refined petroleum product or natural

15 gas does not, when multiplied by 1,000,000, properly

16 reflect the Btu content per unit for such substance

17 (in the circumstances where taxable events under

18 this subchapter occur with respect to such sub19 stance), the Secretary may modify the applicable per

20 unit Btu factor for such substance. Any such modi21 fication shall be effective as of the date prescribed

22 by the Secretary.

23 ‘‘(2) MODIFICATION OF LIST OF REFINED PE24 TROLEUM PRODUCTS.—The Secretary may modify,

25 as appropriate, the list of refined petroleum products
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1 in section 4441 for which applicable per unit Btu

2 factors are separately determined.

3 ‘‘SEC. 4454. DEFINITIONS AND SPECIAL RULES.

4 ‘‘(a) DEFINITIONS.—For purposes of this

5 subchapter—

6 ‘‘(1) FOSSIL FUEL.—The term ‘fossil fuel’

7 means crude oil, any petroleum product, natural gas,

8 any natural gas product, and coal.

9 ‘‘(2) CRUDE OIL.—The term ‘crude oil’ includes

10 condensates from crude oil.

11 ‘‘(3) COAL.—The term ‘coal’ includes lignite.

12 ‘‘(4) UNITED STATES.—The term ‘United

13 States’ means the 50 States, the District of Colum14 bia, and the foreign trade zones of the United

15 States.

16 ‘‘(5) PERSON.—The term ‘person’ includes the

17 United States, any State or political subdivision

18 thereof, the District of Columbia, and any agency or

19 instrumentality of any of the foregoing.

20 ‘‘(c) FRACTIONAL PART OF UNIT.—In the case of a

21 fraction of a unit, the tax imposed by this subchapter shall

22 be the same fraction of the amount of such tax imposed

23 on a whole unit.

24 ‘‘(d) SPECIAL RULES RELATING TO PUERTO RICO

25 AND THE VIRGIN ISLANDS.—
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1 ‘‘(1) LIKE TAX ON ARTICLES BROUGHT INTO

2 THE UNITED STATES FROM PUERTO RICO OR THE

3 VIRGIN ISLANDS.—For purposes of this subchapter,

4 articles brought into the United States from the

5 Commonwealth of Puerto Rico or the Virgin Islands

6 shall be treated as entered into the United States at

7 the time brought into the United States.

8 ‘‘(2) DISPOSITION OF REVENUES.—The provi9 sions of subsections (a)(3) and (b)(3) of section

10 7652 shall not apply to any tax imposed by this sub11 chapter.

12 ‘‘(e) NO EXEMPTION FROM TAX.—No person shall

13 be exempt from any tax imposed by this subchapter except

14 to the extent provided in this subchapter or in any provi15 sion of law enacted after the date of the enactment of this

16 subchapter which grants a specific exemption, by reference

17 to this subchapter, from a tax imposed by this subchapter.

18 ‘‘PART V—TAX ON IMPORTED HIGH-ENERGY

19 PRODUCTS

‘‘Sec. 4456. Imposition of tax.

‘‘Sec. 4457. Definitions and special rules.

20 ‘‘SEC. 4456. IMPOSITION OF TAX.

21 ‘‘(a) GENERAL RULE.—There is hereby imposed a

22 tax on any taxable high-energy product entered into the

23 United States for consumption, use, or warehousing.
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1 ‘‘(b) AMOUNT OF TAX.—The amount of the tax im2 posed by subsection (a) on any taxable high-energy prod3 uct shall be the imputed Btu tax with respect to such

4 product.

5 ‘‘(c) LIABILITY FOR TAX.—The tax imposed by sub6 section (a) shall be paid by the person entering the prod7 uct for consumption, use, or warehousing.

8 ‘‘SEC. 4457. DEFINITIONS AND SPECIAL RULES.

9 ‘‘(a) TAXABLE HIGH-ENERGY PRODUCT.—For pur10 poses of this part—

11 ‘‘(1) IN GENERAL.—The term ‘taxable high-en12 ergy product’ means any product which, at the time

13 entered into the United States for consumption, use,

14 or warehousing, is listed as a taxable high-energy

15 product by the Secretary.

16 ‘‘(2) DETERMINATION OF PRODUCTS ON

17 LIST.—A product shall be listed under paragraph

18 (1) if the product is produced in an industry identi19 fied (using 4-digit SIC codes) in the most recent

20 census of manufacturing as producing products

21 which on average have more than 2 percent of their

22 value attributable to direct energy inputs (exclusive

23 of the tax imposed by parts I and II) of taxable en24 ergy sources.
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1 ‘‘(3) TAXABLE ENERGY SOURCE.—The term

2 ‘taxable energy source’ means any taxable refined

3 petroleum product, natural gas, coal, and electricity.

4 ‘‘(b) IMPUTED BTU TAX.—For purposes of this

5 part—

6 ‘‘(1) IN GENERAL.—Except as otherwise pro7 vided in this subsection, the term ‘imputed Btu tax’

8 means, with respect to any taxable high-energy prod9 uct, the amount of tax which would have been im10 posed by parts I and II on taxable energy sources

11 directly used in the manufacture or production of

12 the product if—

13 ‘‘(A) such product were manufactured or

14 produced using the predominant method of

15 manufacture or production of such product in

16 the United States, and

17 ‘‘(B) such taxable energy sources had been

18 subject to tax under such parts on the date of

19 the entry of the product into the United States

20 for consumption, use, or warehousing.

21 ‘‘(2) TAX WHERE INFORMATION FURNISHED.—

22 If the person liable for the tax imposed by section

23 4456 with respect to any product furnishes to the

24 Secretary (at such time and in such manner as the

25 Secretary shall prescribe) sufficient information to
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1 determine the imputed Btu tax with respect to such

2 product, the imputed Btu tax determined using such

3 information shall apply in lieu of the amount deter4 mined under paragraph (1).

5 ‘‘(c) REQUESTS TO CHANGE LIST.—If any importer

6 or producer of any product requests that the Secretary

7 determine whether—

8 ‘‘(1) such product should be listed as a taxable

9 high-energy product under subsection (a)(1) or be

10 removed from such listing, or

11 ‘‘(2) the imputed Btu tax for such product

12 under subsection (b)(1),

13 the Secretary shall make such determination within 180

14 days after the date the request was filed.’’

15 (b) REFUNDS FOR FARM USE OF GASOLINE AND

16 DIESEL FUEL.—

17 (1) GASOLINE.—

18 (A) Subsection (a) of section 6420 is

19 amended by adding at the end thereof the fol20 lowing new flush sentence:

21 ‘‘If the supplemental rate of the tax imposed by section

22 4441 was imposed on such gasoline, the Secretary shall

23 also pay (without interest) to such ultimate purchaser an

24 amount equal to the product of such supplemental rate
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1 and the applicable per unit Btu factor per barrel (deter2 mined under section 4441) of the gasoline so used.’’

3 (B) Subsection (h) of section 6420 is

4 amended by inserting ‘‘and taxes imposed by

5 section 4441’’ after ‘‘financing rate’’.

6 (2) DIESEL FUEL.—

7 (A) Section 6427 is amended by redesig8 nating subsections (m) through (r) as sub9 sections (n) through (s), respectively, and by in10 serting after subsection (l) the following new

11 subsection:

12 ‘‘(m) REFUNDS OF SUPPLEMENTAL RATE OF BTU

13 TAX ON FARM USE OF DIESEL FUEL.—Except as pro14 vided in subsection (k), if the supplemental rate of the

15 tax imposed by section 4441 was imposed on diesel fuel

16 used on a farm for farming purposes (within the meaning

17 of section 6420(c)), the Secretary shall pay (without inter18 est) to the ultimate purchaser of such fuel an amount

19 equal to the product of such supplemental rate and the

20 applicable per unit Btu factor per barrel (determined

21 under section 4441) of the diesel fuel so used.’’

22 (B) Paragraph (1) of section 6427(i) is

23 amended by inserting ‘‘(m),’’ after ‘‘(l),’’.

24 (C) Paragraph (4) of section 6427(i), as

25 amended by subpart B, is amended—
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1 (i) by striking ‘‘OR 4091’’ in the para2 graph heading and inserting ‘‘, 4091, OR

3 4441’’, and

4 (ii) by striking ‘‘subsection (l)’’ each

5 place it appears and inserting ‘‘subsections

6 (l) and (m)’’.

7 (c) CIVIL PENALTY FOR USING REDUCED-RATE

8 FUEL FOR TAXABLE USE.—

9 (1) IN GENERAL.—Part I of subchapter B of

10 chapter 68 (relating to assessable penalties) is

11 amended by adding at the end thereof the following

12 new section:

13 ‘‘SEC. 6714. DYED FUEL SOLD FOR USE OR USED IN TAX14 ABLE USE.

15 ‘‘(a) IMPOSITION OF PENALTY.—If any dyed fuel—

16 ‘‘(1) is sold by any person for any use which

17 such person knows or has reason to know is not a

18 reduced-tax use of such fuel, or

19 ‘‘(2) is used by any person for a use other than

20 a reduced-tax use and such person knew, or had rea21 son to know, that such fuel was so dyed,

22 then, in addition to the tax, such person shall pay a pen23 alty on such sale or use.
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1 ‘‘(b) AMOUNT OF PENALTY.—The amount of the

2 penalty under subsection (a) on any sale or use shall be

3 the greater of—

4 ‘‘(1) $1,000, or

5 ‘‘(2) an amount equal to twice the excess of the

6 aggregate taxes which should have been imposed

7 under section 4441 on the fuel so sold or used over

8 the prior taxes (if any) imposed on such fuel under

9 such section which have not been credited or re10 funded.

11 ‘‘(c) DEFINITIONS.—For purposes of this section—

12 ‘‘(1) DYED FUEL.—The term ‘dyed fuel’

13 means—

14 ‘‘(A) qualified heating oil (as defined in

15 section 4441(b)(2)(B)), and

16 ‘‘(B) diesel fuel dyed in accordance with

17 section 4441(b)(2)(C).

18 ‘‘(2) REDUCED-TAX USE.—The term ‘reduced19 tax use’ means, with respect to any fuel, the use for

20 which such fuel was dyed.’’

21 (2) CLERICAL AMENDMENT.—The table of sec22 tions for such part I is amended by adding at the

23 end thereof the following new item:

‘‘Sec. 6714. Dyed fuel sold for use or used in taxable use.’’

24 (d) TECHNICAL AMENDMENTS.—
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1 (1)(A) Subsection (a) of section 6675 is amend2 ed by inserting ‘‘section 4442 (relating to refunds of

3 petroleum tax for certain sales and uses), section

4 4444(f) (relating to methane recovered from biomass

5 or coal mining), section 4445(e) (relating to coal

6 used in production of coke for steel),’’ before ‘‘sec7 tion 6420’’.

8 (B) Subsection (b) of section 6675 is amended

9 by inserting ‘‘4442, 4444(f), 4445(e),’’ before

10 ‘‘6420’’.

11 (2) Section 6206 is amended—

12 (A) by inserting ‘‘(a) FUEL TAXES.—’’ be13 fore ‘‘Any portion of’’, and

14 (B) by adding at the end thereof the fol15 lowing new subsection:

16 ‘‘(b) BTU TAXES.—Any portion of a payment made

17 under section 4442, 4444(f), or 4445(e) which constitutes

18 an excessive amount (as defined in section 6675(b)), and

19 any civil penalty provided by section 6675, may be as20 sessed and collected as if it were a tax imposed by sub21 chapter A of chapter 36 and as if the person who made

22 the claim were liable for such tax. The period for assessing

23 any such portion, and for assessing any such penalty, shall

24 be 3 years from the last day prescribed for filing a claim

25 under section 4442, 4444(f), or 4445(e).’’
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1 (3)(A) The section heading for section 6206 is

2 amended by striking ‘‘UNDER SECTIONS 6420, 6421,

3 and 6427’’ and inserting ‘‘FOR CERTAIN FUELS TAX

4 REFUNDS AND ENERGY TAX REFUNDS’’.

5 (B) The item relating to section 6206 in the

6 table of sections for subchapter A of chapter 63 is

7 amended by striking ‘‘under sections 6420, 6421,

8 and 6427’’ and inserting ‘‘for certain fuels tax re9 funds and energy tax refunds’’.

10 (4) Subparagraph (B) of section 6724(d)(1) is

11 amended—

12 (A) by striking ‘‘or’’ at the end of clause

13 (xi),

14 (B) by striking the period at the end of the

15 clause (xii) relating to section 4101(d) and in16 serting a comma,

17 (C) by redesignating the clause (xii) relat18 ing to section 338(h)(10)(C) as clause (xiii) and

19 by striking the period at the end thereof and in20 serting ‘‘, or’’, and

21 (D) by inserting after clause (xiii), as so

22 redesignated, the following new clause:

23 ‘‘(xiv) section 4453(c) (relating to in24 formation reporting with respect to energy

25 taxes).’’
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1 (5) Sections 7210, section 7603, subsections (b)

2 and (c)(2) of section 7604, section 7605, and

3 7610(c) are each amended by inserting

4 ‘‘4453(a)(5)(B),’’ before ‘‘6420(e)(2)’’ each place it

5 appears.

6 (6) Subparagraph (A) of section 9505(c)(3) is

7 amended by striking ‘‘subchapter A’’ and inserting

8 ‘‘subchapter B’’.

9 (7) The table of subchapters for chapter 36 is

10 amended by striking the items relating to sub11 chapters A and B and inserting the following:

‘‘Subchapter A. Energy taxes.

‘‘Subchapter B. Harbor maintenance tax.

‘‘Subchapter C. Transportation by water.’’

12 (e) EFFECTIVE DATE.—The amendments made by

13 this section shall take effect on July 1, 1994.

14 Subpart B—Modifications to Tax on Diesel Fuel

15 SEC. 14242. MODIFICATIONS TO TAX ON DIESEL FUEL.

16 (a) IN GENERAL.—Subparts A and B of part III of

17 subchapter A of chapter 32 (relating to manufacturers ex18 cise taxes) are amended to read as follows:

19 ‘‘Subpart A—Gasoline and Diesel Fuel

‘‘Sec. 4081. Imposition of tax.

‘‘Sec. 4082. Exemptions for diesel fuel.

‘‘Sec. 4083. Definitions and special rule.

‘‘Sec. 4084. Cross references.

20 ‘‘SEC. 4081. IMPOSITION OF TAX.

21 ‘‘(a) TAX IMPOSED.—
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1 ‘‘(1) TAX ON REMOVAL, ENTRY, OR SALE.—

2 ‘‘(A) IN GENERAL.—There is hereby im3 posed a tax at the rate specified in paragraph

4 (2) on—

5 ‘‘(i) the removal of a taxable fuel from

6 any refinery,

7 ‘‘(ii) the removal of a taxable fuel

8 from any terminal,

9 ‘‘(iii) the entry into the United States

10 of any taxable fuel for consumption, use,

11 or warehousing, and

12 ‘‘(iv) the sale of a taxable fuel to any

13 person who is not registered under section

14 4101 unless there was a prior taxable re15 moval or entry of such fuel under clause

16 (i), (ii), or (iii).

17 ‘‘(B) EXEMPTION FOR BULK TRANSFERS

18 TO REGISTERED TERMINALS.—The tax imposed

19 by this paragraph shall not apply to any re20 moval or entry of a taxable fuel transferred in

21 bulk to a terminal if the person removing or en22 tering the taxable fuel and the operator of such

23 terminal are registered under section 4101.

24 ‘‘(2) RATES OF TAX.—
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1 ‘‘(A) IN GENERAL.—The rate of the tax

2 imposed by this section is the sum of—

3 ‘‘(i) the Highway Trust Fund financ4 ing rate,

5 ‘‘(ii) the Leaking Underground Stor6 age Tank Trust Fund financing rate, and

7 ‘‘(iii) the deficit reduction rate.

8 ‘‘(B) RATES.—For purposes of subpara9 graph (A)—

10 ‘‘(i) the Highway Trust Fund financ11 ing rate is—

12 ‘‘(I) 11.5 cents per gallon in the

13 case of gasoline, and

14 ‘‘(II) 17.5 cents per gallon in the

15 case of diesel fuel,

16 ‘‘(ii) the Leaking Underground Stor17 age Tank Trust Fund financing rate is 0.1

18 cent per gallon, and

19 ‘‘(iii) the deficit reduction rate is 2.5

20 cents per gallon.

21 ‘‘(b) TREATMENT OF REMOVAL OR SUBSEQUENT

22 SALE BY BLENDER.—

23 ‘‘(1) IN GENERAL.—There is hereby imposed a

24 tax at the rate specified in subsection (a) on taxable

25 fuel removed or sold by the blender thereof.
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1 ‘‘(2) CREDIT FOR TAX PREVIOUSLY PAID.—If—

2 ‘‘(A) tax is imposed on the removal or sale

3 of a taxable fuel by reason of paragraph (1),

4 and

5 ‘‘(B) the blender establishes the amount of

6 the tax paid with respect to such fuel by reason

7 of subsection (a),

8 the amount of the tax so paid shall be allowed as a

9 credit against the tax imposed by reason of para10 graph (1).

11 ‘‘(c) TAXABLE FUELS MIXED WITH ALCOHOL AT

12 REFINERY, ETC.—

13 ‘‘(1) REDUCED RATES.—

14 ‘‘(A) IN GENERAL.—Under regulations

15 prescribed by the Secretary, subsection (a) shall

16 be applied by substituting rates which are the

17 applicable fraction of the otherwise applicable

18 rates in the case of the removal or entry of any

19 taxable fuel for use in producing at the time of

20 such removal or entry a qualified alcohol mix21 ture. Subject to such terms and conditions as

22 the Secretary may prescribe (including the ap23 plication of section 4101), the treatment under

24 the preceding sentence also shall apply to use in
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1 producing such a mixture after the time of such

2 removal or entry.

3 ‘‘(B) APPLICABLE FRACTION.—For pur4 poses of subparagraph (A), the applicable frac5 tion is—

6 ‘‘(i) in the case of a qualified alcohol

7 mixture which contains gasoline, the frac8 tion the numerator of which is 10 and the

9 denominator of which is—

10 ‘‘(I) 9 in the case of 10 percent

11 gasohol,

12 ‘‘(II) 9.23 in the case of 7.7 per13 cent gasohol, and

14 ‘‘(III) 9.43 in the case of 5.7 per15 cent gasohol, and

16 ‘‘(ii) in the case of a qualified alcohol

17 mixture which does not contain gasoline,

10 18 ⁄9.

19 ‘‘(2) LATER SEPARATION OF FUEL FROM

20 QUALIFIED ALCOHOL MIXTURE.—If any person sep21 arates the taxable fuel from a qualified alcohol mix22 ture on which tax was imposed under subsection (a)

23 at the otherwise applicable Highway Trust Fund fi24 nancing rate (or its equivalent) by reason of this

25 subsection (or with respect to which a credit or pay-
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1 ment was allowed or made by reason of section

2 6427(f)(1)), such person shall be treated as the re3 finer of such taxable fuel. The amount of tax im4 posed on any removal of such fuel by such person

5 shall be reduced by the amount of tax imposed (and

6 not credited or refunded) on any prior removal or

7 entry of such fuel.

8 ‘‘(3) ALCOHOL; QUALIFIED ALCOHOL MIX9 TURE.—For purposes of this subsection—

10 ‘‘(A) ALCOHOL.—The term ‘alcohol’ in11 cludes methanol and ethanol but does not in12 clude alcohol produced from petroleum, natural

13 gas, or coal (including peat). Such term does

14 not include alcohol with a proof of less than

15 190 (determined without regard to any added

16 denaturants).

17 ‘‘(B) QUALIFIED ALCOHOL MIXTURE.—

18 The term ‘qualified alcohol mixture’ means—

19 ‘‘(i) any mixture of gasoline with alco20 hol if at least 5.7 percent of such mixture

21 is alcohol, and

22 ‘‘(ii) any mixture of diesel fuel with

23 alcohol if at least 10 percent of such mix24 ture is alcohol.
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1 ‘‘(4) OTHERWISE APPLICABLE RATES FOR GAS2 OLINE MIXTURES.—For purposes of this

3 subsection—

4 ‘‘(A) IN GENERAL.—In the case of the

5 Highway Trust Fund financing rate, the other6 wise applicable rate for gasoline in a qualified

7 alcohol mixture is—

8 ‘‘(i) 6.1 cents a gallon for 10 percent

9 gasohol,

10 ‘‘(ii) 7.342 cents a gallon for 7.7 per11 cent gasohol, and

12 ‘‘(iii) 8.422 cents a gallon for 5.7 per13 cent gasohol.

14 In the case of a mixture none of the alcohol in

15 which consists of ethanol, clauses (i), (ii), and

16 (iii) shall be applied by substituting ‘5.5 cents’

17 for ‘6.1 cents’, ‘6.88 cents’ for ‘7.342 cents’,

18 and ‘8.08 cents’ for ‘8.422 cents’.

19 ‘‘(B) 10 PERCENT GASOHOL.—The term

20 ‘10 percent gasohol’ means any mixture of gas21 oline with alcohol if at least 10 percent of such

22 mixture is alcohol.

23 ‘‘(C) 7.7 PERCENT GASOHOL.—The term

24 ‘7.7 percent gasohol’ means any mixture of gas25 oline with alcohol if at least 7.7 percent, but
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1 not 10 percent or more, of such mixture is alco2 hol.

3 ‘‘(D) 5.7 PERCENT GASOHOL.—The term

4 ‘5.7 percent gasohol’ means any mixture of gas5 oline with alcohol if at least 5.7 percent, but

6 not 7.7 percent or more, of such mixture is al7 cohol.

8 ‘‘(5) OTHERWISE APPLICABLE RATES FOR DIE9 SEL FUEL MIXTURES.—For purposes of this sub10 section, in the case of the Highway Trust Fund fi11 nancing rate, the otherwise applicable rate for diesel

12 fuel in a qualified alcohol mixture is 12.1 cents per

13 gallon (11.5 cents per gallon in the case of a quali14 fied alcohol mixture none of the alcohol in which

15 consists of ethanol).

16 ‘‘(6) TERMINATION.—Paragraph (1) shall not

17 apply to any removal or sale after September 30,

18 2000.

19 ‘‘(d) TERMINATION.—

20 ‘‘(1) HIGHWAY TRUST FUND FINANCING

21 RATE.—On and after October 1, 1999, the Highway

22 Trust Fund financing rate under subsection (a)(2)

23 shall not apply.

24 ‘‘(2) LEAKING UNDERGROUND STORAGE TANK

25 TRUST FUND FINANCING RATE.—The Leaking Un-
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1 derground Storage Tank Trust Fund financing rate

2 under subsection (a)(2) shall not apply after Decem3 ber 31, 1995.

4 ‘‘(3) DEFICIT REDUCTION RATE.—On and after

5 October 1, 1995, the deficit reduction rate under

6 subsection (a)(2) shall not apply.

7 ‘‘(e) REFUNDS IN CERTAIN CASES.—Under regula8 tions prescribed by the Secretary, if any person who paid

9 the tax imposed by this section with respect to any taxable

10 fuel establishes to the satisfaction of the Secretary that

11 a prior tax was paid (and not credited or refunded) with

12 respect to such taxable fuel, then an amount equal to the

13 tax paid by such person shall be allowed as a refund (with14 out interest) to such person in the same manner as if it

15 were an overpayment of tax imposed by this section.

16 ‘‘SEC. 4082. EXEMPTIONS FOR DIESEL FUEL.

17 ‘‘(a) IN GENERAL.—The tax imposed by section 4081

18 shall not apply to diesel fuel—

19 ‘‘(1) which the Secretary determines is destined

20 for a nontaxable use,

21 ‘‘(2) which is indelibly dyed in accordance with

22 regulations which the Secretary shall prescribe, and

23 ‘‘(3) which meets such marking requirements

24 (if any) as may be prescribed by the Secretary in

25 regulations.
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1 ‘‘(b) NONTAXABLE USE.—For purposes of this sec2 tion, the term ‘nontaxable use’ means—

3 ‘‘(1) any use which is exempt from the tax im4 posed by section 4041(a)(1) other than by reason of

5 the imposition of tax on any sale thereof,

6 ‘‘(2) any use in a train, and

7 ‘‘(3) any use described in section 6427(b)(1).

8 ‘‘(c) REGULATIONS.—The Secretary shall prescribe

9 such regulations as may be necessary to carry out this

10 section, including regulations requiring the conspicuous la11 beling of retail diesel fuel pumps and other delivery facili12 ties to assure that persons are aware of which fuel is avail13 able only for nontaxable uses.

14 ‘‘(d) CROSS REFERENCE.—

‘‘For tax on train, motorboat, and certain bus uses

of fuel purchased tax-free, see section 4041(a)(1).

15 ‘‘SEC. 4083. DEFINITIONS AND SPECIAL RULE.

16 ‘‘(a) TAXABLE FUEL.—For purposes of this

17 subpart—

18 ‘‘(1) IN GENERAL.—The term ‘taxable fuel’

19 means—

20 ‘‘(A) gasoline, and

21 ‘‘(B) diesel fuel.

22 ‘‘(2) GASOLINE.—The term ‘gasoline’ includes,

23 to the extent prescribed in regulations—

24 ‘‘(A) gasoline blend stocks, and
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1 ‘‘(B) products commonly used as additives

2 in gasoline.

3 For purposes of subparagraph (A), the term ‘gaso4 line blend stock’ means any petroleum product com5 ponent of gasoline.

6 ‘‘(3) DIESEL FUEL.—The term ‘diesel fuel’

7 means any liquid (other than gasoline) which is suit8 able for use as a fuel in a diesel-powered highway

9 vehicle, a diesel-powered train, or a diesel-powered

10 boat.

11 ‘‘(b) CERTAIN USES DEFINED AS REMOVAL.—If any

12 person uses taxable fuel (other than in the production of

13 gasoline, diesel fuel, or special fuels referred to in section

14 4041), such use shall for the purposes of this chapter be

15 considered a removal.

16 ‘‘SEC. 4084. CROSS REFERENCES.

‘‘(1) For provisions to relieve farmers from excise

tax in the case of gasoline used on the farm for

farming purposes, see section 6420.

‘‘(2) For provisions to relieve purchasers of gasoline from excise tax in the case of gasoline used for

certain nonhighway purposes, used by local transit

systems, or sold for certain exempt purposes, see

section 6421.

‘‘(3) For provisions to relieve purchasers from excise tax in the case of taxable fuel not used for taxable purposes, see section 6427.

17 ‘‘Subpart B—Aviation Fuel

‘‘Sec. 4091. Imposition of tax.

‘‘Sec. 4092. Exemptions.

‘‘Sec. 4093. Definitions.
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1 ‘‘SEC. 4091. IMPOSITION OF TAX.

2 ‘‘(a) IN GENERAL.—There is hereby imposed a tax

3 on the sale of aviation fuel by the producer or the importer

4 thereof or by any producer of aviation fuel.

5 ‘‘(b) RATE OF TAX.—

6 ‘‘(1) IN GENERAL.—The rate of the tax im7 posed by subsection (a) shall be the sum of—

8 ‘‘(A) the Airport and Airway Trust Fund

9 financing rate, and

10 ‘‘(B) the Leaking Underground Storage

11 Tank Trust Fund financing rate.

12 ‘‘(2) AIRPORT AND AIRWAY TRUST FUND FI13 NANCING RATE.—For purposes of paragraph (1),

14 the Airport and Airway Trust Fund financing rate

15 is 17.5 cents per gallon.

16 ‘‘(3) LEAKING UNDERGROUND STORAGE TANK

17 TRUST FUND FINANCING RATE.—For purposes of

18 paragraph (1), the Leaking Underground Storage

19 Tank Trust Fund financing rate is 0.1 cent per gal20 lon.

21 ‘‘(4) TERMINATION OF RATES.—

22 ‘‘(A) The Airport and Airway Trust Fund

23 financing rate shall not apply on and after Jan24 uary 1, 1996.

25 ‘‘(B) The Leaking Underground Storage

26 Tank Fund financing rate shall not apply dur-
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1 ing any period during which the Leaking Un2 derground Storage Tank Trust Fund financing

3 rate under section 4081 does not apply.

4 ‘‘(c) REDUCED RATE OF TAX FOR AVIATION FUEL

5 IN ALCOHOL MIXTURE, ETC.—

6 ‘‘(1) IN GENERAL.—The Airport and Airway

7 Trust Fund financing rate shall be—

8 ‘‘(A) 4.1 cents per gallon in the case of the

9 sale of any mixture of aviation fuel if—

10 ‘‘(i) at least 10 percent of such mix11 ture consists of alcohol (as defined in sec12 tion 4081(c)(3)), and

13 ‘‘(ii) the aviation fuel in such mixture

14 was not taxed under subparagraph (B),

15 and

16 ‘‘(B) 4.56 cents per gallon in the case of

17 the sale of aviation fuel for use (at the time of

18 such sale) in producing a mixture described in

19 subparagraph (A).

20 In the case of a sale described in subparagraph (B),

21 the Leaking Underground Storage Tank Trust Fund

financing rate shall be 1 22 ⁄9 cent per gallon.

23 ‘‘(2) LATER SEPARATION.—If any person sepa24 rates the aviation fuel from a mixture of the aviation

25 fuel and alcohol on which tax was imposed under
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1 subsection (a) at the Airport and Airway Trust

2 Fund financing rate equivalent to 4.1 cents per gal3 lon by reason of this subsection (or with respect to

4 which a credit or payment was allowed or made by

5 reason of section 6427(f)(1)), such person shall be

6 treated as the producer of such aviation fuel. The

7 amount of tax imposed on any sale of such aviation

8 fuel by such person shall be reduced by the amount

9 of tax imposed (and not credited or refunded) on

10 any prior sale of such fuel.

11 ‘‘(3) TERMINATION.—Paragraph (1) shall not

12 apply to any sale after September 30, 2000.

13 ‘‘(d) LOWER RATES OF TAX ON ALCOHOL MIXTURES

14 NOT MADE FROM ETHANOL.—In the case of a mixture

15 described in subsection (c)(1)(A)(i) none of the alcohol in

16 which is ethanol—

17 ‘‘(1) subsections (c)(1)(A) and (c)(2) shall each

18 be applied by substituting rates which are 0.6 cents

19 less than the rates contained therein, and

20 ‘‘(2) subsection (c)(1)(B) shall be applied by

substituting rates which are 10 21 ⁄9 of the rates deter22 mined under paragraph (1).

23 ‘‘SEC. 4092. EXEMPTIONS.

24 ‘‘(a) NONTAXABLE USES.—The Airport and Airway

25 Trust Fund financing rate under section 4091 shall not
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1 apply to aviation fuel sold by a producer or importer for

2 use by the purchaser in a nontaxable use (as defined in

3 section 6427(l)(2)(B)).

4 ‘‘(b) SALES TO PRODUCER.—Under regulations pre5 scribed by the Secretary, the tax imposed by section 4091

6 shall not apply to aviation fuel sold to a producer of such

7 fuel.

8 ‘‘(c) SUPPLIES FOR VESSELS AND AIRCRAFT.—

9 Under regulations prescribed by the Secretary, the Leak10 ing Underground Storage Tank Trust Fund financing rate

11 under section 4091 shall not apply to aviation fuel sold

12 for use or used as supplies for vessels or aircraft (within

13 the meaning of section 4221(d)(3)).

14 ‘‘SEC. 4093. DEFINITIONS.

15 ‘‘(a) AVIATION FUEL.—For purposes of this subpart,

16 the term ‘aviation fuel’ means any liquid (other than any

17 product taxable under section 4081) which is suitable for

18 use as a fuel in an aircraft.

19 ‘‘(b) PRODUCER.—For purposes of this subpart—

20 ‘‘(1) CERTAIN PERSONS TREATED AS PRODUC21 ERS.—

22 ‘‘(A) IN GENERAL.—The term ‘producer’

23 includes any person described in subparagraph

24 (B) and registered under section 4101 with re25 spect to the tax imposed by section 4091.
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1 ‘‘(B) PERSONS DESCRIBED.—A person is

2 described in this subparagraph if such person

3 is—

4 ‘‘(i) a refiner, blender, or wholesale

5 distributor of aviation fuel, or

6 ‘‘(ii) a dealer selling aviation fuel ex7 clusively to producers of aviation fuel.

8 ‘‘(C) REDUCED RATE PURCHASERS TREAT9 ED AS PRODUCERS.—Any person to whom avia10 tion fuel is sold at a reduced rate under this

11 subpart shall be treated as the producer of such

12 fuel.

13 ‘‘(2) WHOLESALE DISTRIBUTOR.—For purposes

14 of paragraph (1), the term ‘wholesale distributor’ in15 cludes any person who sells aviation fuel to produc16 ers, retailers, or to users who purchase in bulk quan17 tities and deliver into bulk storage tanks. Such term

18 does not include any person who (excluding the term

19 ‘wholesale distributor’ from paragraph (1)) is a pro20 ducer or importer.’’

21 (b) CIVIL PENALTY FOR USING REDUCED-RATE

22 FUEL FOR TAXABLE USE.—

23 (1) Paragraph (1) of section 6714(c), as added

24 by subpart A, is amended by striking ‘‘and’’ at the

25 end of subparagraph (A), by striking the period at
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1 the end of subparagraph (B) and inserting ‘‘, and’’,

2 and by adding at the end thereof the following new

3 subparagraph:

4 ‘‘(C) diesel fuel dyed in accordance with

5 section 4082.’’

6 (2) Paragraph (2) of section 6714(b), as added

7 by subpart A, is amended by striking ‘‘section 4441’’

8 and inserting ‘‘sections 4081 and 4441’’ and by

9 striking ‘‘such section’’ and inserting ‘‘such sec10 tions’’.

11 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

12 (1) Subsection (c) of section 40 is amended by

13 striking ‘‘, section 4081(c), or section 4091(c)’’ and

14 inserting ‘‘or section 4081(c)’’.

15 (2) Subsection (a) of section 4101 is amended

16 by striking ‘‘4081’’ and inserting ‘‘4041(a)(1),

17 4081,’’.

18 (3) Section 4102 is amended by striking ‘‘gaso19 line’’ and inserting ‘‘any taxable fuel (as defined in

20 section 4083)’’.

21 (4) Paragraph (1) of section 4041(a) is amend22 ed to read as follows:

23 ‘‘(1) TAX ON DIESEL FUEL IN CERTAIN

24 CASES.—
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1 ‘‘(A) IN GENERAL.—There is hereby im2 posed a tax on any liquid other than gasoline

3 (as defined in section 4083)—

4 ‘‘(i) sold by any person to an owner,

5 lessee, or other operator of a diesel-pow6 ered highway vehicle, a diesel-powered

7 train, or a diesel-powered boat for use as

8 a fuel in such vehicle, train, or boat, or

9 ‘‘(ii) used by any person as a fuel in

10 a diesel-powered highway vehicle, a diesel11 powered train, or a diesel-powered boat un12 less there was a taxable sale of such fuel

13 under clause (i).

14 ‘‘(B) EXEMPTION FOR PREVIOUSLY TAXED

15 FUEL.—No tax shall be imposed by this para16 graph on the sale or use of diesel fuel if there

17 was a taxable sale of such fuel under section

18 4081 and the tax thereon was not credited or

19 refunded.

20 ‘‘(C) RATE OF TAX.—

21 ‘‘(i) IN GENERAL.—Except as other22 wise provided in this subparagraph, the

23 rate of the tax imposed by this paragraph

24 shall be the sum of the Highway Trust

25 Fund financing rate on diesel fuel and the
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1 deficit reduction rate in effect under sec2 tion 4081 at the time of such sale or use.

3 ‘‘(ii) HIGHWAY RATE NOT TO APPLY

4 TO TRAINS.—The Highway Trust Fund fi5 nancing rate shall not apply to any sale for

6 use, or use, of fuel in a train.

7 ‘‘(iii) CERTAIN BUS USES.—If the lim8 itation in section 6427(b)(2)(A) applies to

9 fuel sold for use or used in an automobile

10 bus, the Highway Trust Fund financing

11 rate shall be 3 cents per gallon and the

12 deficit reduction rate shall not apply.’’

13 (5) Paragraph (2) of section 4041(a) is amend14 ed by striking ‘‘or paragraph (1) of this subsection’’

15 and by inserting ‘‘on gasoline’’ after ‘‘Highway

16 Trust Fund financing rate’’.

17 (6) Paragraph (2) of section 4041(c) is amend18 ed by striking ‘‘any product taxable under section

19 4081’’ and inserting ‘‘gasoline (as defined in section

20 4083)’’.

21 (7) Paragraph (2) of section 4041(d) is

22 amended—

23 (A) by striking ‘‘(other than a product tax24 able under section 4081)’’ and inserting ‘‘(other
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1 than gasoline (as defined in section 4083))’’,

2 and

3 (B) by striking ‘‘section 4091’’ and insert4 ing ‘‘section 4081’’.

5 (8) Paragraph (3) of section 4041(d) is amend6 ed by striking ‘‘(other than any product taxable

7 under section 4081)’’ and inserting ‘‘(other than

8 gasoline (as defined in section 4083))’’.

9 (9) Subparagraph (A) of section 4041(k)(1) is

10 amended by striking ‘‘sections 4081(c) and 4091(c),

11 as the case may be’’ and inserting ‘‘section

12 4081(c)’’.

13 (10) Subparagraph (B) of section 4041(m)(1)

14 is amended by striking ‘‘section 4091(d)(1)’’ and in15 serting ‘‘section 4091(c)(1)’’.

16 (11) Section 6206 is amended by striking

17 ‘‘4041 or 4091’’ and inserting ‘‘4041, 4081, or

18 4091’’.

19 (12) Paragraph (1) of section 6302(f) is

20 amended by inserting ‘‘on gasoline’’ after ‘‘section

21 4081’’ and after ‘‘such tax’’.

22 (13) Paragraph (1) of section 6412(a) is

23 amended by striking ‘‘gasoline’’ each place it ap24 pears (including the heading) and inserting ‘‘taxable

25 fuel’’.
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1 (14)(A) Subparagraph (A) of section

2 6416(a)(4) is amended by striking ‘‘product’’ each

3 place it appears and inserting ‘‘gasoline’’.

4 (B) Subparagraph (B) of section 6416(a)(4) is

5 amended by striking all that follows ‘‘substituting’’

6 and inserting ‘‘ ‘any gasoline taxable under section

7 4081’ for ‘aviation fuel’ therein).’’

8 (15) Sections 6420(c)(5) and 6421(e)(1) are

9 each amended by striking ‘‘section 4082(b)’’ and in10 serting ‘‘section 4083(a)’’.

11 (16) Subsection (b) of section 6427 is

12 amended—

13 (A) by striking ‘‘if any fuel’’ in paragraph

14 (1) and inserting ‘‘if any diesel fuel (as defined

15 in section 4083(a))’’, and

16 (B) by striking ‘‘4091’’ each place it ap17 pears and inserting ‘‘4081’’.

18 (17)(A) Paragraph (1) of section 6427(f) is

19 amended by striking ‘‘4091(c)(1)(A), or

20 4091(d)(1)(A)’’ and inserting ‘‘or 4091(c)(1)(A)’’.

21 (B) Paragraph (2) of section 6427(f) is amend22 ed to read as follows:

23 ‘‘(2) DEFINITIONS.—For purposes of paragraph

24 (1)—
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1 ‘‘(A) REGULAR TAX RATE.—The term ‘reg2 ular tax rate’ means—

3 ‘‘(i) in the case of gasoline or diesel

4 fuel, the aggregate rate of tax imposed by

5 section 4081 determined without regard to

6 subsection (c) thereof, and

7 ‘‘(ii) in the case of aviation fuel, the

8 aggregate rate of tax imposed by section

9 4091 determined without regard to sub10 section (c) thereof.

11 ‘‘(B) INCENTIVE TAX RATE.—The term

12 ‘incentive tax rate’ means—

13 ‘‘(i) in the case of gasoline or diesel

14 fuel, the aggregate rate of tax imposed by

15 section 4081 with respect to fuel described

16 in subsection (c)(1) thereof, and

17 ‘‘(ii) in the case of aviation fuel, the

18 aggregate rate of tax imposed by section

19 4091 with respect to fuel described in sub20 section (c)(1)(B) thereof.’’

21 (18) Subsection (h) of section 6427 is amended

22 by striking ‘‘section 4082(b)’’ and inserting ‘‘section

23 4083(a)(2)’’.

24 (19) Paragraph (3) of section 6427(i) is

25 amended—
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1 (A) by striking ‘‘GASOHOL’’ in the heading

2 and inserting ‘‘ALCOHOL MIXTURE’’, and

3 (B) by striking ‘‘gasoline used to produce

4 gasohol (as defined in section 4081(c)(1))’’ in

5 subparagraph (A) and inserting ‘‘gasoline or

6 diesel fuel used to produce a qualified alcohol

7 mixture (as defined in section 4081(c)(3))’’.

8 (20) The heading of paragraph (4) of section

9 6427(i) is amended by inserting ‘‘4081 OR’’ before

10 ‘‘4091’’.

11 (21) Subsection (l) of section 6427 is amended

12 to read as follows:

13 ‘‘(l) NONTAXABLE USES OF DIESEL FUEL AND AVIA14 TION FUEL.—

15 ‘‘(1) IN GENERAL.—Except as provided in sub16 section (k) and in paragraphs (3) and (4) of this

17 subsection, if—

18 ‘‘(A) any diesel fuel on which tax has been

19 imposed by section 4081, or

20 ‘‘(B) any aviation fuel on which tax has

21 been imposed by section 4091,

22 is used by any person in a nontaxable use, the Sec23 retary shall pay (without interest) to the ultimate

24 purchaser of such fuel an amount equal to the ag-
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1 gregate amount of tax imposed on such fuel under

2 section 4081 or 4091, as the case may be.

3 ‘‘(2) NONTAXABLE USE.—For purposes of this

4 subsection, the term ‘nontaxable use’ means—

5 ‘‘(A) in the case of diesel fuel, any use

6 which is exempt from the tax imposed by sec7 tion 4041(a)(1) other than by reason of the im8 position of tax on any sale thereof, and

9 ‘‘(B) in the case of aviation fuel, any use

10 which is exempt from the tax imposed by sec11 tion 4041(c)(1) other than by reason of the im12 position of tax on any sale thereof.

13 ‘‘(3) LIMIT ON REFUND OF LEAKING UNDER14 GROUND STORAGE TANK TRUST FUND FINANCING

15 RATE.—Paragraph (1) shall not apply to so much of

16 the tax imposed by section 4081 or 4091 as is at17 tributable to the Leaking Underground Storage

18 Tank Trust Fund financing rate imposed by such

19 section in the case of—

20 ‘‘(A) fuel used in a diesel-powered train,

21 and

22 ‘‘(B) fuel used in any aircraft (other than

23 as supplies for vessels or aircraft, within the

24 meaning of section 4221(d)(3)).
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1 ‘‘(4) NO REFUND OF DEFICIT REDUCTION TAX

2 ON FUEL USED IN TRAINS.—Fuel used in a diesel3 powered train shall be treated as a nontaxable use

4 for purposes of this section, except that paragraph

5 (1) shall not apply to so much of the tax imposed

6 by section 4081 as is attributable to the deficit re7 duction rate imposed by such section unless such

8 fuel was used by a State or any political subdivision

9 thereof.’’

10 (22) Paragraph (1) of section 9503(b) is

11 amended—

12 (A) by striking ‘‘gasoline),’’ in subpara13 graph (E) and inserting ‘‘gasoline and diesel

14 fuel), and’’,

15 (B) by striking subparagraph (F), and

16 (C) by redesignating subparagraph (G) as

17 subparagraph (F).

18 (23)(A) Subparagraph (B) of section

19 9503(b)(4) is amended by striking ‘‘, 4081, and

20 4091’’ and inserting ‘‘and 4081’’.

21 (B) Subparagraph (C) of section 9503(b)(4), as

22 amended by subtitle A, is amended by striking

23 ‘‘4091’’ and inserting ‘‘4081’’.
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1 (24) Subparagraph (D) of section 9503(c)(6) is

2 amended by striking ‘‘, 4081, and 4091’’ and insert3 ing ‘‘and 4081’’.

4 (25) Paragraph (2) of section 9503(e) is

5 amended—

6 (A) by striking ‘‘, 4081, and 4091’’ and in7 serting ‘‘and 4081’’, and

8 (B) by striking ‘‘, 4081, or 4091’’ and in9 serting ‘‘or 4081’’.

10 (26) Subsection (b) of section 9508 is

11 amended—

12 (A) by inserting ‘‘and diesel fuel’’ after

13 ‘‘gasoline’’ in paragraph (2),

14 (B) by striking ‘‘diesel fuel and’’ in para15 graph (3), and

16 (C) by striking ‘‘4091’’ in the last sen17 tence, as added by subtitle A, and inserting

18 ‘‘4081’’.

19 (27) The table of subparts for part III of sub20 chapter A of chapter 32 is amended by striking the

21 items relating to subparts A and B and inserting the

22 following new items:

‘‘Subpart A. Gasoline and diesel fuel.

‘‘Subpart B. Aviation fuel.’’

23 (d) EFFECTIVE DATE.—The amendments made by

24 this section shall take effect on April 1, 1994.
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1 SEC. 14243. FLOOR STOCKS TAX.

2 (a) IN GENERAL.—There is hereby imposed a floor

3 stocks tax on diesel fuel held by any person on April 1,

4 1994, if—

5 (1) no tax was imposed on such fuel under sec6 tion 4041(a) or 4091 of the Internal Revenue Code

7 of 1986 as in effect on the day before the date of

8 the enactment of this Act, and

9 (2) tax would have been imposed by section

10 4081 of such Code, as amended by this Act, on any

11 prior removal, entry, or sale of such fuel had such

12 section 4081 applied to all prior removals, entries,

13 and sales of such fuel.

14 (b) RATE OF TAX.—The rate of the tax imposed by

15 subsection (a) shall be the amount of tax which would be

16 imposed under section 4081 of the Internal Revenue Code

17 of 1986 if there were a taxable sale of such fuel on such

18 date.

19 (c) LIABILITY AND PAYMENT OF TAX.—

20 (1) LIABILITY FOR TAX.—A person holding the

21 diesel fuel on April 1, 1994, to which the tax im22 posed by this section applies shall be liable for such

23 tax.

24 (2) METHOD OF PAYMENT.—The tax imposed

25 by this section shall be paid in such manner as the

26 Secretary shall prescribe.
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1 (3) TIME FOR PAYMENT.—The tax imposed by

2 this section shall be paid on or before January 31,

3 1995.

4 (d) DEFINITIONS.—For purposes of this section—

5 (1) DIESEL FUEL.—The term ‘‘diesel fuel’’ has

6 the meaning given such term by section 4083(a) of

7 such Code.

8 (2) SECRETARY.—The term ‘‘Secretary’’ means

9 the Secretary of the Treasury or his delegate.

10 (e) EXCEPTIONS.—

11 (1) PERSONS ENTITLED TO CREDIT OR RE12 FUND.—The tax imposed by this section shall not

13 apply to fuel held by any person exclusively for any

14 use to the extent a credit or refund of the tax im15 posed by section 4081 is allowable for such use.

16 (2) COMPLIANCE WITH DYEING REQUIRED.—

17 Paragraph (1) shall not apply to the holder of any

18 fuel if the holder of such fuel fails to comply with

19 any requirement imposed by the Secretary with re20 spect to dyeing and marking such fuel.

21 (f) OTHER LAWS APPLICABLE.—All provisions of

22 law, including penalties, applicable with respect to the

23 taxes imposed by section 4081 of such Code shall, insofar

24 as applicable and not inconsistent with the provisions of

25 this section, apply with respect to the floor stock taxes
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1 imposed by this section to the same extent as if such taxes

2 were imposed by such section 4081.

3 Subpart C—Extension of Motor Fuel Tax Rates;

4 Increased Deposits Into Highway Trust Fund

5 SEC. 14244. EXTENSION OF MOTOR FUEL TAX RATES; IN6 CREASED DEPOSITS INTO HIGHWAY TRUST

7 FUND.

8 (a) IN GENERAL.—Clause (i) of section

9 4081(a)(2)(B), as amended by subpart B, is amended—

10 (1) by striking ‘‘11.5 cents’’ and inserting ‘‘14

11 cents’’, and

12 (2) by striking ‘‘17.5 cents’’ and inserting ‘‘20

13 cents’’.

14 (b) CONFORMING AMENDMENTS.—

15 (1) Subparagraph (A) of section 4081(c)(4), as

16 so amended, is amended to read as follows:

17 ‘‘(A) IN GENERAL.—In the case of the

18 Highway Trust Fund financing rate, the other19 wise applicable rate for gasoline in a qualified

20 alcohol mixture is—

21 ‘‘(i) 8.6 cents a gallon for 10 percent

22 gasohol,

23 ‘‘(ii) 9.842 cents a gallon for 7.7 per24 cent gasohol, and
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1 ‘‘(iii) 10.922 cents a gallon for 5.7

2 percent gasohol.

3 In the case of a mixture none of the alcohol in which

4 consists of ethanol, clauses (i), (ii), and (iii) shall be

5 applied by substituting ‘8.0 cents’ for ‘8.6 cents’,

6 ‘9.38 cents’ for ‘9.842 cents’, and ‘10.58 cents’ for

7 ‘10.922’.’’

8 (2) Paragraph (5) of section 4081(c), as so

9 amended, is amended—

10 (A) by striking ‘‘12.1 cents’’ and inserting

11 ‘‘14.6 cents’’, and

12 (B) by striking ‘‘11.5 cents’’ and inserting

13 ‘‘14.0’’.

14 (3) Subparagraph (A) of section 4041(m)(1) is

15 amended to read as follows:

16 ‘‘(A) under subsection (a)(2) the Highway

17 Trust Fund financing shall be 7 cents per gal18 lon, and’’.

19 (4) Paragraph (4) of section 6427(l), as amend20 ed by subpart B, is amended—

21 (A) by striking ‘‘the deficit reduction rate’’

22 and inserting ‘‘2.5 cents per gallon of the High23 way Trust Fund financing rate’’, and
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1 (B) by striking ‘‘DEFICIT REDUCTION

2 TAX’’ in the heading and inserting ‘‘PORTION

3 OF TAX’’.

4 (5) Subsection (b) of section 9503 is amended

5 by adding at the end thereof the following new para6 graph:

7 ‘‘(6) RETENTION OF CERTAIN TAXES IN GEN8 ERAL FUND.—

9 ‘‘(A) IN GENERAL.—There shall not be

10 taken into account under paragraphs (1) and

11 (2)—

12 ‘‘(i) the tax imposed by section 4081

13 on diesel fuel used in any train, and

14 ‘‘(ii) so much of the following taxes as

15 are attributable to 2.5 cents of the High16 way Trust Fund financing rate:

17 ‘‘(I) Motorboat fuel taxes (as de18 fined in subsection (c)(4)(D)).

19 ‘‘(II) Small-engine fuel taxes (as

20 defined in subsection (c)(5)(B)).

21 ‘‘(III) Nonhighway recreational

22 fuel taxes (as defined in subsection

23 (c)(6)(D)).

24 ‘‘(B) TRANSFERS FROM HIGHWAY TRUST

25 FUND.—For purposes of determining the
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1 amount paid from the Highway Trust Fund

2 under paragraphs (4), (5), and (6) of sub3 section (c), the Highway Trust Fund financing

4 rates shall be treated as being 2.5 cents less

5 than the otherwise applicable rates.’’

6 (c) INCREASE IN DEPOSITS IN MASS TRANSIT AC7 COUNT.—Paragraph (2) of section 9503(e) is amended by

8 striking ‘‘1.5 cents’’ and inserting ‘‘2 cents’’.

9 (d) REPEAL OF EXPIRED PROVISIONS.—

10 (1) Subparagraph (A) of section 4081(a)(2)

11 (relating to rate of tax), as amended by subpart B,

12 is amended—

13 (A) by adding ‘‘and’’ at the end of clause

14 (i),

15 (B) by striking ‘‘, and’’ at the end of

16 clause (ii) and inserting a period, and

17 (C) by striking clause (iii).

18 (2) Subparagraph (B) of section 4081(a)(2), as

19 so amended, is amended—

20 (A) by adding ‘‘and’’ at the end of clause

21 (i),

22 (B) by striking ‘‘, and’’ at the end of

23 clause (ii) and inserting a period, and

24 (C) by striking clause (iii).
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1 (3) Subsection (d) of section 4081, as so

2 amended, is amended by striking paragraph (3).

3 (4) Paragraphs (1) and (2) of section 4041(a)

4 (as so amended), and paragraph (3) of section

5 4041(c), are each amended by striking ‘‘the sum of

6 the Highway Trust Fund financing rate and the die7 sel fuel deficit reduction rate’’ and by inserting ‘‘the

8 Highway Trust Fund financing rate’’.

9 (5) Clause (ii) of section 4041(a)(1)(C), as so

10 amended, is amended—

11 (A) by striking ‘‘The Highway Trust Fund

12 financing rate’’ and inserting ‘‘So much of the

13 Highway Trust Fund financing rate as exceeds

14 2.5 cents per gallon’’, and

15 (B) by striking ‘‘HIGHWAY RATE’’ in the

16 heading and inserting ‘‘PORTION OF HIGHWAY

17 RATE’’.

18 (6) Clause (iii) of section 4041(a)(1)(C), as so

19 amended, is amended by striking ‘‘and the deficit re20 duction rate shall not apply’’.

21 (e) EFFECTIVE DATE.—The amendments made by

22 this section shall take effect October 1, 1995, but the

23 amendment made by subsection (c) shall apply only to

24 amounts attributable to taxes imposed on or after such

25 date.
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1 PART V—COMPLIANCE PROVISIONS

2 SEC. 14251. REPORTING REQUIRED FOR CERTAIN PAY3 MENTS TO CORPORATIONS.

4 (a) SECTION 6041.—Section 6041 (relating to infor5 mation at source) is amended by adding at the end thereof

6 the following new subsection:

7 ‘‘(f) SPECIAL RULES FOR PAYMENTS FOR SERV8 ICES.—No payment for the performance of services shall

9 be exempt from the requirements of this section merely

10 because it is a payment to a corporation.’’

11 (b) SECTION 6041A(a).—Subsection (a) of section

12 6041A is amended by adding at the end thereof the follow13 ing new sentence: ‘‘A payment shall not be exempt from

14 the requirements of this subsection merely because it is

15 a payment to a corporation.’’.

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to payments made after December

18 31, 1993.

19 SEC. 14252. MODIFICATIONS TO SUBSTANTIAL UNDER20 STATEMENT AND RETURN-PREPARER PEN21 ALTIES.

22 (a) REASONABLE BASIS REQUIRED.—

23 (1) SUBSTANTIAL UNDERSTATEMENT PEN24 ALTY.—Clause (ii) of section 6662(d)(2)(B) (relat25 ing to reduction for understatement due to position
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1 of taxpayer or disclosed item) is amended to read as

2 follows:

3 ‘‘(ii) any item if—

4 ‘‘(I) the relevant facts affecting

5 the item’s tax treatment are ade6 quately disclosed in the return or in a

7 statement attached to the return, and

8 ‘‘(II) there is a reasonable basis

9 for the tax treatment of such item by

10 the taxpayer.’’

11 (2) RETURN PREPARER PENALTY.—Paragraph

12 (3) of section 6694(a) (relating to understatement of

13 taxpayer’s liability by income tax return preparer) is

14 amended to read as follows:

15 ‘‘(3) the requirements of subclauses (I) and (II)

16 of section 6662(d)(2)(B)(ii) are not satisfied with

17 respect to such position,’’.

18 (b) SPECIAL TAX SHELTER RULE.—Subclause (II)

19 of section 6662(d)(2)(C)(i) (relating to special rules for

20 tax shelters) is amended by inserting before the period at

21 the end thereof the following: ‘‘and the reasonably antici22 pated after-tax benefits from the taxpayer’s investment in

23 such shelter do not significantly exceed the reasonably an24 ticipated pre-tax economic profit or loss from such invest25 ment’’.
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1 (c) REASONABLE CAUSE EXCEPTION.—Paragraph

2 (1) of section 6664(c) is revised by striking ‘‘this part’’

3 and inserting ‘‘section 6662’’.

4 (d) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to returns the due dates for which

6 (determined without regard to extensions) are after De7 cember 31, 1993.

8 SEC. 14253. RETURNS RELATING TO THE CANCELLATION

9 OF INDEBTEDNESS BY CERTAIN FINANCIAL

10 ENTITIES.

11 (a) IN GENERAL.—Subpart B of part III of sub12 chapter A of chapter 61 (relating to information concern13 ing transactions with other persons) is amended by adding

14 at the end thereof the following new section:

15 ‘‘SEC. 6050P. RETURNS RELATING TO THE CANCELLATION

16 OF INDEBTEDNESS BY CERTAIN FINANCIAL

17 ENTITIES.

18 ‘‘(a) IN GENERAL.—Any applicable financial entity

19 which discharges (in whole or in part) the indebtedness

20 of any person during any calendar year shall make a re21 turn (at such time and in such form as the Secretary may

22 by regulations prescribe) setting forth—

23 ‘‘(1) the name, address, and TIN of each per24 son whose indebtedness was discharged during such

25 calendar year,
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1 ‘‘(2) the date of the discharge and the amount

2 of the indebtedness discharged, and

3 ‘‘(3) such other information as the Secretary

4 may prescribe.

5 ‘‘(b) EXCEPTION.—Subsection (a) shall not apply to

6 any discharge of less than $600.

7 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur8 poses of this section—

9 ‘‘(1) APPLICABLE FINANCIAL ENTITY.—The

10 term ‘applicable financial entity’ means—

11 ‘‘(A) any financial institution described in

12 section 581 or 591(a) and any credit union,

13 ‘‘(B) the Federal Deposit Insurance Cor14 poration, the Resolution Trust Corporation, and

15 the National Credit Union Administration, and

16 any successor or subunit of any of the fore17 going, and

18 ‘‘(C) any other corporation which is a di19 rect or indirect subsidiary of an entity referred

20 to in subparagraph (A) but only if, by virtue of

21 being affiliated with such entity, such other cor22 poration is subject to supervision and examina23 tion by a Federal or State agency which regu24 lates entities referred to in subparagraph (A).
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1 ‘‘(2) GOVERNMENTAL UNITS.—In the case of

2 an entity described in paragraph (1)(B), any return

3 under this section shall be made by the officer or

4 employee appropriately designated for the purpose of

5 making such return.

6 ‘‘(d) STATEMENTS TO BE FURNISHED TO PERSONS

7 WITH RESPECT TO WHOM INFORMATION IS REQUIRED

8 TO BE FURNISHED.—Every applicable financial entity re9 quired to make a return under subsection (a) shall furnish

10 to each person whose name is required to be set forth in

11 such return a written statement showing—

12 ‘‘(1) the name and address of the entity re13 quired to make such return, and

14 ‘‘(2) the information required to be shown on

15 the return with respect to such person.

16 The written statement required under the preceding sen17 tence shall be furnished to the person on or before Janu18 ary 31 of the year following the calendar year for which

19 the return under subsection (a) was made.’’

20 (b) PENALTIES.—

21 (1) RETURNS.—Subparagraph (B) of section

22 6724(d)(1) is amended by redesignating clauses

23 (viii) through (xv) as clauses (ix) through (xvi), re24 spectively, and by inserting after clause (vii) the fol25 lowing new clause:
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1 ‘‘(viii) section 6050P (relating to re2 turns relating to the cancellation of indebt3 edness by certain financial entities),’’.

4 (2) STATEMENTS.—Paragraph (2) of section

5 6724(d) is amended by redesignating subparagraphs

6 (P) through (S) as subparagraphs (Q) through (T),

7 respectively, and by inserting after subparagraph

8 (O) the following new subparagraph:

9 ‘‘(P) section 6050P(d) (relating to returns

10 relating to the cancellation of indebtedness by

11 certain financial entities),’’.

12 (c) CLERICAL AMENDMENT.—The table of sections

13 for subpart B of part III of subchapter A of chapter 61

14 is amended by adding at the end thereof the following new

15 item:

‘‘Sec. 6050P. Returns relating to the cancellation of indebtedness

by certain financial entities.’’

16 (d) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to discharges of indebtedness after

18 the date of the enactment of this Act.

19 PART VI—TREATMENT OF INTANGIBLES

20 SEC. 14261. AMORTIZATION OF GOODWILL AND CERTAIN

21 OTHER INTANGIBLES.

22 (a) GENERAL RULE.—Part VI of subchapter B of

23 chapter 1 (relating to itemized deductions for individuals
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1 and corporations) is amended by adding at the end thereof

2 the following new section:

3 ‘‘SEC. 197. AMORTIZATION OF GOODWILL AND CERTAIN

4 OTHER INTANGIBLES.

5 ‘‘(a) GENERAL RULE.—A taxpayer shall be entitled

6 to an amortization deduction with respect to any amortiz7 able section 197 intangible. The amount of such deduction

8 shall be determined by amortizing the adjusted basis (for

9 purposes of determining gain) of such intangible ratably

10 over the 14-year period beginning with the month in which

11 such intangible was acquired.

12 ‘‘(b) NO OTHER DEPRECIATION OR AMORTIZATION

13 DEDUCTION ALLOWABLE.—Except as provided in sub14 section (a), no depreciation or amortization deduction

15 shall be allowable with respect to any amortizable section

16 197 intangible.

17 ‘‘(c) AMORTIZABLE SECTION 197 INTANGIBLE.—For

18 purposes of this section—

19 ‘‘(1) IN GENERAL.—Except as otherwise pro20 vided in this section, the term ‘amortizable section

21 197 intangible’ means any section 197 intangible—

22 ‘‘(A) which is acquired by the taxpayer

23 after the date of the enactment of this section,

24 and
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1 ‘‘(B) which is held in connection with the

2 conduct of a trade or business or an activity de3 scribed in section 212.

4 ‘‘(2) EXCLUSION OF SELF-CREATED INTANGI5 BLES, ETC.—The term ‘amortizable section 197 in6 tangible’ shall not include any section 197

7 intangible—

8 ‘‘(A) which is not described in subpara9 graph (D), (E), or (F) of subsection (d)(1), and

10 ‘‘(B) which is created by the taxpayer.

11 This paragraph shall not apply if the intangible is

12 created in connection with a transaction (or series of

13 related transactions) involving the acquisition of as14 sets constituting a trade or business or substantial

15 portion thereof.

16 ‘‘(3) ANTI-CHURNING RULES.—

‘‘For exclusion of intangibles acquired in certain

transactions, see subsection (f)(9).

17 ‘‘(d) SECTION 197 INTANGIBLE.—For purposes of

18 this section—

19 ‘‘(1) IN GENERAL.—Except as otherwise pro20 vided in this section, the term ‘section 197 intangi21 ble’ means—

22 ‘‘(A) goodwill,

23 ‘‘(B) going concern value,

24 ‘‘(C) any of the following intangible items:
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1 ‘‘(i) workforce in place including its

2 composition and terms and conditions

3 (contractual or otherwise) of its employ4 ment,

5 ‘‘(ii) business books and records, oper6 ating systems, or any other information

7 base (including lists or other information

8 with respect to current or prospective cus9 tomers),

10 ‘‘(iii) any patent, copyright, formula,

11 process, design, pattern, knowhow, format,

12 or other similar item,

13 ‘‘(iv) any customer-based intangible,

14 ‘‘(v) any supplier-based intangible,

15 and

16 ‘‘(vi) any other similar item,

17 ‘‘(D) any license, permit, or other right

18 granted by a governmental unit or an agency or

19 instrumentality thereof,

20 ‘‘(E) any covenant not to compete (or

21 other arrangement to the extent such arrange22 ment has substantially the same effect as a cov23 enant not to compete) entered into in connec24 tion with an acquisition (directly or indirectly)
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1 of an interest in a trade or business or substan2 tial portion thereof, and

3 ‘‘(F) any franchise, trademark, or trade

4 name.

5 ‘‘(2) CUSTOMER-BASED INTANGIBLE.—

6 ‘‘(A) IN GENERAL.—The term ‘customer7 based intangible’ means—

8 ‘‘(i) composition of market,

9 ‘‘(ii) market share, and

10 ‘‘(iii) any other value resulting from

11 future provision of goods or services pursu12 ant to relationships (contractual or other13 wise) in the ordinary course of business

14 with customers.

15 ‘‘(B) SPECIAL RULE FOR FINANCIAL INSTI16 TUTIONS.—In the case of a financial institu17 tion, the term ‘customer-based intangible’ in18 cludes deposit base and similar items.

19 ‘‘(3) SUPPLIER-BASED INTANGIBLE.—The term

20 ‘supplier-based intangible’ means any value resulting

21 from future acquisitions of goods or services pursu22 ant to relationships (contractual or otherwise) in the

23 ordinary course of business with suppliers of goods

24 or services to be used or sold by the taxpayer.
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1 ‘‘(e) EXCEPTIONS.—For purposes of this section, the

2 term ‘section 197 intangible’ shall not include any of the

3 following:

4 ‘‘(1) FINANCIAL INTERESTS.—Any interest—

5 ‘‘(A) in a corporation, partnership, trust,

6 or estate, or

7 ‘‘(B) under an existing futures contract,

8 foreign currency contract, notional principal

9 contract, or other similar financial contract.

10 ‘‘(2) LAND.—Any interest in land.

11 ‘‘(3) COMPUTER SOFTWARE.—

12 ‘‘(A) IN GENERAL.—Any—

13 ‘‘(i) computer software which is read14 ily available for purchase by the general

15 public, is subject to a nonexclusive license,

16 and has not been substantially modified,

17 and

18 ‘‘(ii) other computer software which is

19 not acquired in a transaction (or series of

20 related transactions) involving the acquisi21 tion of assets constituting a trade or busi22 ness or substantial portion thereof.

23 ‘‘(B) COMPUTER SOFTWARE DEFINED.—

24 For purposes of subparagraph (A), the term

25 ‘computer software’ means any program de-
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1 signed to cause a computer to perform a de2 sired function. Such term shall not include any

3 data base or similar item unless the data base

4 or item is in the public domain and is incidental

5 to the operation of otherwise qualifying com6 puter software.

7 ‘‘(4) CERTAIN INTERESTS OR RIGHTS AC8 QUIRED SEPARATELY.—Any of the following not ac9 quired in a transaction (or series of related trans10 actions) involving the acquisition of assets constitut11 ing a trade business or substantial portion thereof:

12 ‘‘(A) Any interest in a film, sound record13 ing, video tape, book, or similar property.

14 ‘‘(B) Any right to receive tangible property

15 or services under a contract or granted by a

16 governmental unit or agency or instrumentality

17 thereof.

18 ‘‘(C) Any interest in a patent or copyright.

19 ‘‘(D) To the extent provided in regulations,

20 any right under a contract (or granted by a

21 governmental unit or an agency or instrumen22 tality thereof) if such right—

23 ‘‘(i) has a fixed duration of less than

24 14 years, or
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1 ‘‘(ii) is fixed as to amount and, with2 out regard to this section, would be recov3 erable under a method similar to the unit4 of-production method.

5 ‘‘(5) INTERESTS UNDER LEASES AND DEBT IN6 STRUMENTS.—Any interest under—

7 ‘‘(A) an existing lease of tangible property,

8 or

9 ‘‘(B) except as provided in subsection

10 (d)(2)(B), any existing indebtedness.

11 ‘‘(6) TREATMENT OF SPORTS FRANCHISES.—A

12 franchise to engage in professional football, basket13 ball, baseball, or other professional sport, and any

14 item acquired in connection with such a franchise.

15 ‘‘(7) CERTAIN TRANSACTION COSTS.—Any fees

16 for professional services, and any transaction costs,

17 incurred by parties to a transaction with respect to

18 which any portion of the gain or loss is not recog19 nized under part III of subchapter C.

20 ‘‘(f) SPECIAL RULES.—

21 ‘‘(1) TREATMENT OF CERTAIN DISPOSITIONS,

22 ETC.—If there is a disposition of any amortizable

23 section 197 intangible acquired in a transaction or

24 series of related transactions (or any such intangible

25 becomes worthless) and one or more other amortiz-
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1 able section 197 intangibles acquired in such trans2 action or series of related transactions are

3 retained—

4 ‘‘(A) no loss shall be recognized by reason

5 of such disposition (or such worthlessness), and

6 ‘‘(B) appropriate adjustments to the ad7 justed bases of such retained intangibles shall

8 be made for any loss not recognized under sub9 paragraph (A).

10 All persons treated as a single taxpayer under sec11 tion 41(f)(1) shall be so treated for purposes of the

12 preceding sentence.

13 ‘‘(2) TREATMENT OF CERTAIN TRANSFERS.—

14 ‘‘(A) IN GENERAL.—In the case of any sec15 tion 197 intangible transferred in a transaction

16 described in subparagraph (B), the transferee

17 shall be treated as the transferor for purposes

18 of applying this section with respect to so much

19 of the adjusted basis in the hands of the trans20 feree as does not exceed the adjusted basis in

21 the hands of the transferor.

22 ‘‘(B) TRANSACTIONS COVERED.—The

23 transactions described in this subparagraph

24 are—
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1 ‘‘(i) any transaction described in sec2 tion 332, 351, 361, 721, 731, 1031, or

3 1033, and

4 ‘‘(ii) any transaction between mem5 bers of the same affiliated group during

6 any taxable year for which a consolidated

7 return is made by such group.

8 ‘‘(3) TREATMENT OF AMOUNTS PAID PURSUANT

9 TO COVENANTS NOT TO COMPETE, ETC.—Any

10 amount paid or incurred pursuant to a covenant or

11 arrangement referred to in subsection (d)(1)(E)

12 shall be treated as an amount chargeable to capital

13 account.

14 ‘‘(4) TREATMENT OF FRANCHISES, ETC.—

15 ‘‘(A) FRANCHISE.—The term ‘franchise’

16 has the meaning given to such term by section

17 1253(b)(1).

18 ‘‘(B) TREATMENT OF RENEWALS.—Any

19 renewal of a franchise, trademark, or trade

20 name (or of a license, a permit, or other right

21 referred to in subsection (d)(1)(D)) shall be

22 treated as an acquisition. The preceding sen23 tence shall only apply with respect to costs in24 curred in connection with such renewal.
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1 ‘‘(C) CERTAIN AMOUNTS NOT TAKEN INTO

2 ACCOUNT.—Any amount to which section

3 1253(d)(1) applies shall not be taken into ac4 count under this section.

5 ‘‘(5) TREATMENT OF CERTAIN REINSURANCE

6 TRANSACTIONS.—In the case of any amortizable sec7 tion 197 intangible resulting from an assumption re8 insurance transaction, the amount taken into ac9 count as the adjusted basis of such intangible under

10 this section shall be the excess of—

11 ‘‘(A) the amount paid or incurred by the

12 acquirer under the assumption reinsurance

13 transaction, over

14 ‘‘(B) the amount required to be capitalized

15 under section 848 in connection with such

16 transaction.

17 Subsection (b) shall not apply to any amount re18 quired to be capitalized under section 848.

19 ‘‘(6) TREATMENT OF CERTAIN SUBLEASES.—

20 For purposes of this section, a sublease shall be

21 treated in the same manner as a lease of the under22 lying property involved.

23 ‘‘(7) TREATMENT AS DEPRECIABLE.—For pur24 poses of this chapter, any amortizable section 197

25 intangible shall be treated as property which is of a
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1 character subject to the allowance for depreciation

2 provided in section 167.

3 ‘‘(8) TREATMENT OF CERTAIN INCREMENTS IN

4 VALUE.—This section shall not apply to any incre5 ment in value if, without regard to this section, such

6 increment is properly taken into account in deter7 mining the cost of property which is not a section

8 197 intangible.

9 ‘‘(9) ANTI-CHURNING RULES.—For purposes of

10 this section—

11 ‘‘(A) IN GENERAL.—The term ‘amortizable

12 section 197 intangible’ shall not include any

13 section 197 intangible which is described in

14 subparagraph (A) or (B) of subsection (d)(1)

15 (or for which depreciation or amortization

16 would not have been allowable but for this sec17 tion) and which is acquired by the taxpayer

18 after the date of the enactment of this section,

19 if—

20 ‘‘(i) the intangible was held or used at

21 any time on or after July 25, 1991, and on

22 or before such date of enactment by the

23 taxpayer or a related person,

24 ‘‘(ii) the intangible was acquired from

25 a person who held such intangible at any
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1 time on or after July 25, 1991, and on or

2 before such date of enactment, and, as

3 part of the transaction, the user of such

4 intangible does not change, or

5 ‘‘(iii) the taxpayer grants the right to

6 use such intangible to a person (or a per7 son related to such person) who held or

8 used such intangible at any time on or

9 after July 25, 1991, and on or before such

10 date of enactment.

11 For purposes of this subparagraph, the deter12 mination of whether the user of property

13 changes as part of a transaction shall be deter14 mined in accordance with regulations prescribed

15 by the Secretary. For purposes of this subpara16 graph, deductions allowable under section

17 1253(d) shall be treated as deductions allowable

18 for amortization.

19 ‘‘(B) EXCEPTION WHERE GAIN RECOG20 NIZED.—If—

21 ‘‘(i) subparagraph (A) would not

22 apply to an intangible acquired by the tax23 payer but for the last sentence of subpara24 graph (C)(i), and
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1 ‘‘(ii) the person from whom the tax2 payer acquired the intangible elects, not3 withstanding any other provision of this

4 title—

5 ‘‘(I) to recognize gain on the dis6 position of the intangible, and

7 ‘‘(II) to pay a tax on such gain

8 which, when added to any other in9 come tax on such gain under this title,

10 equals such gain multiplied by the

11 highest rate of income tax applicable

12 to such person under this title,

13 then subparagraph (A) shall apply to the

14 intangible only to the extent that the tax15 payer’s adjusted basis in the intangible ex16 ceeds the gain recognized under clause

17 (ii)(I).

18 ‘‘(C) RELATED PERSON DEFINED.—For

19 purposes of this paragraph—

20 ‘‘(i) RELATED PERSON.—A person

21 (hereinafter in this paragraph referred to

22 as the ‘related person’) is related to any

23 person if—

24 ‘‘(I) the related person bears a

25 relationship to such person specified
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1 in section 267(b) or section 707(b)(1),

2 or

3 ‘‘(II) the related person and such

4 person are engaged in trades or busi5 nesses under common control (within

6 the meaning of subparagraphs (A)

7 and (B) of section 41(f)(1)).

8 For purposes of subclause (I), in applying

9 section 267(b) or 707(b)(1), ‘20 percent’

10 shall be substituted for ‘50 percent’.

11 ‘‘(ii) TIME FOR MAKING DETERMINA12 TION.—A person shall be treated as related

13 to another person if such relationship ex14 ists immediately before or immediately

15 after the acquisition of the intangible in16 volved.

17 ‘‘(D) ACQUISITIONS BY REASON OF

18 DEATH.—Subparagraph (A) shall not apply to

19 the acquisition of any property by the taxpayer

20 if the basis of the property in the hands of the

21 taxpayer is determined under section 1014(a).

22 ‘‘(E) SPECIAL RULE FOR PARTNER23 SHIPS.—With respect to any increase in the

24 basis of partnership property under section 732,

25 734, or 743, determinations under this para-
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1 graph shall be made at the partner level and

2 each partner shall be treated as having owned

3 and used such partner’s proportionate share of

4 the partnership assets.

5 ‘‘(F) ANTI-ABUSE RULES.—The term ‘am6 ortizable section 197 intangible’ does not in7 clude any section 197 intangible acquired in a

8 transaction, one of the principal purposes of

9 which is to avoid the requirement of subsection

10 (c)(1) that the intangible be acquired after the

11 date of the enactment of this section or to avoid

12 the provisions of subparagraph (A).

13 ‘‘(g) REGULATIONS.—The Secretary shall prescribe

14 such regulations as may be appropriate to carry out the

15 purposes of this section, including such regulations as may

16 be appropriate to prevent avoidance of the purposes of this

17 section through related persons or otherwise.’’

18 (b) MODIFICATIONS TO DEPRECIATION RULES.—

19 (1) TREATMENT OF CERTAIN PROPERTY EX20 CLUDED FROM SECTION 197.—Section 167 (relating

21 to depreciation deduction) is amended by redesignat22 ing subsection (f) as subsection (g) and by inserting

23 after subsection (e) the following new subsection:

24 ‘‘(f) TREATMENT OF CERTAIN PROPERTY EXCLUDED

25 FROM SECTION 197.—
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1 ‘‘(1) COMPUTER SOFTWARE.—

2 ‘‘(A) IN GENERAL.—If a depreciation de3 duction is allowable under subsection (a) with

4 respect to any computer software, such deduc5 tion shall be computed by using the straight

6 line method and a useful life of 36 months.

7 ‘‘(B) COMPUTER SOFTWARE.—For pur8 poses of this section, the term ‘computer soft9 ware’ has the meaning given to such term by

10 section 197(e)(3)(B); except that such term

11 shall not include any such software which is an

12 amortizable section 197 intangible.

13 ‘‘(2) CERTAIN INTERESTS OR RIGHTS AC14 QUIRED SEPARATELY.—If a depreciation deduction

15 is allowable under subsection (a) with respect to any

16 property described in subparagraph (B), (C), or (D)

17 of section 197(e)(4), such deduction shall be com18 puted in accordance with regulations prescribed by

19 the Secretary.’’

20 (2) ALLOCATION OF BASIS IN CASE OF LEASED

21 PROPERTY.—Subsection (c) of section 167 is amend22 ed to read as follows:

23 ‘‘(c) BASIS FOR DEPRECIATION.—

24 ‘‘(1) IN GENERAL.—The basis on which exhaus25 tion, wear and tear, and obsolescence are to be al-
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1 lowed in respect of any property shall be the ad2 justed basis provided in section 1011, for the pur3 pose of determining the gain on the sale or other

4 disposition of such property.

5 ‘‘(2) SPECIAL RULE FOR PROPERTY SUBJECT

6 TO LEASE.—If any property is acquired subject to a

7 lease—

8 ‘‘(A) no portion of the adjusted basis shall

9 be allocated to the leasehold interest, and

10 ‘‘(B) the entire adjusted basis shall be

11 taken into account in determining the deprecia12 tion deduction (if any) with respect to the prop13 erty subject to the lease.’’

14 (c) AMENDMENTS TO SECTION 1253.—Subsection

15 (d) of section 1253 is amended by striking paragraphs (2),

16 (3), (4), and (5) and inserting the following:

17 ‘‘(2) OTHER PAYMENTS.—Any amount paid or

18 incurred on account of a transfer, sale, or other dis19 position of a franchise, trademark, or trade name to

20 which paragraph (1) does not apply shall be treated

21 as an amount chargeable to capital account.

22 ‘‘(3) RENEWALS, ETC.—For purposes of deter23 mining the term of a transfer agreement under this

24 section, there shall be taken into account all renewal
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1 options (and any other period for which the parties

2 reasonably expect the agreement to be renewed).’’

3 (d) AMENDMENT TO SECTION 848.—Subsection (g)

4 of section 848 is amended by striking ‘‘this section’’ and

5 inserting ‘‘this section or section 197’’.

6 (e) AMENDMENTS TO SECTION 1060.—

7 (1) Paragraph (1) of section 1060(b) is amend8 ed by striking ‘‘goodwill or going concern value’’ and

9 inserting ‘‘section 197 intangibles’’.

10 (2) Paragraph (1) of section 1060(d) is amend11 ed by striking ‘‘goodwill or going concern value (or

12 similar items)’’ and inserting ‘‘section 197 intangi13 bles’’.

14 (f) TECHNICAL AND CONFORMING AMENDMENTS.—

15 (1) Subsection (g) of section 167 (as redesig16 nated by subsection (b)) is amended to read as fol17 lows:

18 ‘‘(g) CROSS REFERENCES.—

‘‘(1) For additional rule applicable to depreciation

of improvements in the case of mines, oil and gas

wells, other natural deposits, and timber, see section 611.

‘‘(2) For amortization of goodwill and certain

other intangibles, see section 197.’’

19 (2) Subsection (f) of section 642 is amended by

20 striking ‘‘section 169’’ and inserting ‘‘sections 169

21 and 197’’.
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1 (3) Subsection (a) of section 1016 is amended

2 by striking paragraph (19) and by redesignating the

3 following paragraphs accordingly.

4 (4) Subparagraph (C) of section 1245(a)(2) is

5 amended by striking ‘‘193, or 1253(d) (2) or (3)’’

6 and inserting ‘‘or 193’’.

7 (5) Paragraph (3) of section 1245(a) is amend8 ed by striking ‘‘section 185 or 1253(d) (2) or (3)’’.

9 (6) The table of sections for part VI of sub10 chapter B of chapter 1 is amended by adding at the

11 end thereof the following new item:

‘‘Sec. 197. Amortization of goodwill and certain other intangibles.’’.

12 (g) EFFECTIVE DATE.—

13 (1) IN GENERAL.—Except as otherwise pro14 vided in this subsection, the amendments made by

15 this section shall apply with respect to property ac16 quired after the date of the enactment of this Act.

17 (2) ELECTION TO HAVE AMENDMENTS APPLY

18 TO PROPERTY ACQUIRED AFTER JULY 25, 1991.—

19 (A) IN GENERAL.—If an election under

20 this paragraph applies to the taxpayer—

21 (i) the amendments made by this sec22 tion shall apply to property acquired by the

23 taxpayer after July 25, 1991,
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1 (ii) subsection (c)(1)(A) of section

2 197 of the Internal Revenue Code of 1986

3 (as added by this section) (and so much of

4 subsection (f)(9)(A) of such section 197 as

5 precedes clause (i) thereof) shall be applied

6 with respect to the taxpayer by treating

7 July 25, 1991, as the date of the enact8 ment of such section, and

9 (iii) in applying subsection (f)(9) of

10 such section, with respect to any property

11 acquired by the taxpayer on or before the

12 date of the enactment of this Act, only

13 holding or use on July 25, 1991, shall be

14 taken into account.

15 (B) ELECTION.—An election under this

16 paragraph shall be made at such time and in

17 such manner as the Secretary of the Treasury

18 or his delegate may prescribe. Such an election

19 by any taxpayer, once made—

20 (i) may be revoked only with the con21 sent of the Secretary, and

22 (ii) shall apply to the taxpayer making

23 such election and any other taxpayer under

24 common control with the taxpayer (within

25 the meaning of subparagraphs (A) and (B)
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1 of section 41(f)(1) of such Code) at any

2 time after November 22, 1991, and on or

3 before the date on which such election is

4 made.

5 (3) ELECTIVE BINDING CONTRACT EXCEP6 TION.—

7 (A) IN GENERAL.—The amendments made

8 by this section shall not apply to any acquisi9 tion of property by the taxpayer if—

10 (i) such acquisition is pursuant to a

11 written binding contract in effect on the

12 date of the enactment of this Act and at

13 all times thereafter before such acquisition,

14 (ii) an election under paragraph (2)

15 does not apply to the taxpayer, and

16 (iii) the taxpayer makes an election

17 under this paragraph with respect to such

18 contract.

19 (B) ELECTION.—An election under this

20 paragraph shall be made at such time and in

21 such manner as the Secretary of the Treasury

22 or his delegate shall prescribe. Such an election,

23 once made—

24 (i) may be revoked only with the con25 sent of the Secretary, and
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1 (ii) shall apply to all property ac2 quired pursuant to the contract with re3 spect to which such election was made.

4 (h) ANNUAL REPORTS.—The Secretary of the Treas5 ury shall submit annual reports to the Committee on Ways

6 and Means of the House of Representatives and the Com7 mittee on Finance of the Senate on the implementation

8 and effects of the amendments made by this section, in9 cluding the effects of such amendments on merger and

10 acquisition activities. The first such annual report shall

11 be submitted on or before December 31, 1994.

12 (i) ANNUAL REPORTS ON OUTSTANDING CASES.—

13 The Secretary of the Treasury shall submit annual reports

14 to the Committee on Ways and Means of the House of

15 Representatives and the Committee on Finance of the

16 Senate regarding the volume of cases still outstanding that

17 involve disputes regarding the amortization of intangibles,

18 progress made in resolving such cases, efforts made to co19 ordinate settlement proceedings, and factors inhibiting the

20 resolution of such cases. The report shall also address the

21 impact of the amendments made by this section on the

22 volume of disputes regarding the amortization of intangi23 bles. The first such annual report shall be submitted on

24 or before December 31, 1994.
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1 SEC. 14262. TREATMENT OF CERTAIN PAYMENTS TO RE2 TIRED OR DECEASED PARTNER.

3 (a) SECTION 736(b) NOT TO APPLY IN CERTAIN

4 CASES.—Subsection (b) of section 736 (relating to pay5 ments for interest in partnership) is amended by adding

6 at the end thereof the following new paragraph:

7 ‘‘(3) LIMITATION ON APPLICATION OF PARA8 GRAPH (2).—Paragraph (2) shall apply only if—

9 ‘‘(A) capital is not a material income-pro10 ducing factor for the partnership, and

11 ‘‘(B) the retiring or deceased partner was

12 a general partner in the partnership.’’

13 (b) LIMITATION ON DEFINITION OF UNREALIZED

14 RECEIVABLES.—

15 (1) IN GENERAL.—Subsection (c) of section

16 751 (defining unrealized receivables) is amended—

17 (A) by striking ‘‘sections 731, 736, and

18 741’’ each place they appear and inserting ‘‘,

19 sections 731 and 741 (but not for purposes of

20 section 736)’’, and

21 (B) by striking ‘‘section 731, 736, or 741’’

22 each place it appears and inserting ‘‘section

23 731 or 741’’.

24 (2) TECHNICAL AMENDMENTS.—
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1 (A) Subsection (e) of section 751 is

2 amended by striking ‘‘sections 731, 736, and

3 741’’ and inserting ‘‘sections 731 and 741’’.

4 (B) Section 736 is amended by striking

5 subsection (c).

6 (c) EFFECTIVE DATE.—

7 (1) IN GENERAL.—The amendments made by

8 this section shall apply in the case of partners retir9 ing or dying on or after January 5, 1993.

10 (2) BINDING CONTRACT EXCEPTION.—The

11 amendments made by this section shall not apply to

12 any partner retiring on or after January 5, 1993, if

13 a written contract to purchase such partner’s inter14 est in the partnership was binding on January 4,

15 1993, and at all times thereafter before such pur16 chase.

17 PART VII—MISCELLANEOUS PROVISIONS

18 SEC. 14271. SUBSTANTIATION REQUIREMENT FOR DEDUC19 TION OF CERTAIN CHARITABLE CONTRIBU20 TIONS.

21 (a) SUBSTANTIATION REQUIREMENT.—Section

22 170(f) (providing special rules relating to the deduction

23 of charitable contributions and gifts) is amended by add24 ing at the end the following new paragraph:
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1 ‘‘(8) SUBSTANTIATION REQUIREMENT FOR CER2 TAIN CONTRIBUTIONS.—

3 ‘‘(A) GENERAL RULE.—No deduction shall

4 be allowed under subsection (a) for any con5 tribution of $750 or more unless the taxpayer

6 substantiates the contribution by a contempora7 neous written acknowledgment of the contribu8 tion by the donee organization that meets the

9 requirements of subparagraph (B).

10 ‘‘(B) CONTENT OF ACKNOWLEDGMENT.—

11 An acknowledgment meets the requirements of

12 this subparagraph if it provides information

13 sufficient to substantiate the amount of the de14 ductible contribution. If the contribution was

15 made by means of a payment part of which con16 stituted consideration for goods or services pro17 vided by the donee organization, the acknowl18 edgment must provide a good faith estimate of

19 the value of such goods or services.

20 ‘‘(C) CONTEMPORANEOUS.—For purposes

21 of subparagraph (A), an acknowledgment shall

22 be considered to be contemporaneous if the tax23 payer obtains the acknowledgment on or before

24 the earlier of—
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1 ‘‘(i) the date on which the taxpayer

2 files a return for the taxable year in which

3 the contribution was made, or

4 ‘‘(ii) the due date (including exten5 sions) for filing such return.

6 ‘‘(D) SUBSTANTIATION NOT REQUIRED

7 FOR CONTRIBUTIONS REPORTED BY THE

8 DONEE ORGANIZATION.—Subparagraph (A)

9 shall not apply to a contribution if the donee

10 organization files a return, on such form and in

11 accordance with such regulations as the Sec12 retary may prescribe, which includes the infor13 mation described in subparagraph (B) with re14 spect to the contribution.

15 ‘‘(E) REGULATIONS.—The Secretary shall

16 prescribe such regulations as may be necessary

17 or appropriate to carry out the purposes of this

18 paragraph, including regulations that may pro19 vide that some or all of the requirements of this

20 paragraph do not apply in appropriate cases.’’

21 (b) EFFECTIVE DATE.—The provisions of this sec22 tion shall apply to contributions made on or after January

23 1, 1994.
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1 SEC. 14272. DISCLOSURE RELATED TO QUID PRO QUO

2 CONTRIBUTIONS.

3 (a) DISCLOSURE REQUIREMENT.—Subchapter B of

4 chapter 61 (relating to information and returns) is amend5 ed by redesignating section 6115 as section 6116 and by

6 inserting after section 6114 the following new section:

7 ‘‘SEC. 6115. DISCLOSURE RELATED TO QUID PRO QUO CON8 TRIBUTIONS.

9 ‘‘(a) DISCLOSURE REQUIREMENT.—If an organiza10 tion described in section 170(c) (other than paragraph (1)

11 thereof) receives a quid pro quo contribution, the organi12 zation shall, in connection with the solicitation or receipt

13 of the contribution—

14 ‘‘(1) inform the donor that the amount of the

15 contribution that is deductible for Federal income

16 tax purposes is limited to the excess of the amount

17 of any money and the value of any property other

18 than money contributed by the donor over the value

19 of the goods or services provided by the organiza20 tion, and

21 ‘‘(2) provide the donor with a good faith esti22 mate of the value of such goods or services.

23 ‘‘(b) QUID PRO QUO CONTRIBUTION.—For purposes

24 of this section, the term ‘quid pro quo contribution’ means

25 a payment made partly as a contribution and partly in
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1 consideration for goods or services provided to the payor

2 by the donee organization.’’

3 (b) PENALTY FOR FAILURE TO DISCLOSE.—Part I

4 of subchapter B of chapter 68 (relating to assessable pen5 alties) is amended by inserting after section 6713 the fol6 lowing new section:

7 ‘‘SEC. 6714. FAILURE TO MEET DISCLOSURE REQUIRE8 MENTS APPLICABLE TO QUID PRO QUO CON9 TRIBUTIONS.

10 ‘‘(a) IMPOSITION OF PENALTY.—If an organization

11 fails to meet the disclosure requirement of section 6115

12 with respect to a quid pro quo contribution, such organiza13 tion shall pay a penalty of $10 for each contribution in

14 respect of which the organization fails to make the re15 quired disclosure, except that the total penalty imposed

16 by this subsection with respect to a particular fundraising

17 event or mailing shall not exceed $5,000.

18 ‘‘(b) REASONABLE CAUSE EXCEPTION.—No penalty

19 shall be imposed under this section with respect to any

20 failure if it is shown that such failure is due to reasonable

21 cause.’’

22 (c) CLERICAL AMENDMENTS.—

23 (1) The table for subchapter B of chapter 61

24 is amended by striking the item relating to section

25 6115 and inserting the following new item:
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‘‘Sec. 6115. Disclosure related to quid pro quo contributions.

‘‘Sec. 6116. Cross reference.’’

1 (2) The table for part I of subchapter B of

2 chapter 68 is amended by inserting after the item

3 for section 6713 the following new item:

‘‘Sec. 6714. Failure to meet disclosure requirements applicable to

quid pro quo contributions.’’

4 (d) EFFECTIVE DATE.—The provisions of this sec5 tion shall apply to quid pro quo contributions made on

6 or after January 1, 1994.

7 SEC. 14273. DISALLOWANCE OF INTEREST ON CERTAIN

8 OVERPAYMENTS OF TAX.

9 (a) GENERAL RULE.—Subsection (e) of section 6611

10 is amended to read as follows:

11 ‘‘(e) DISALLOWANCE OF INTEREST ON CERTAIN

12 OVERPAYMENTS.—

13 ‘‘(1) REFUNDS WITHIN 45 DAYS AFTER RETURN

14 IS FILED.—If any overpayment of tax imposed by

15 this title is refunded within 45 days after the last

16 day prescribed for filing the return of such tax (de17 termined without regard to any extension of time for

18 filing the return) or, in the case of a return filed

19 after such last date, is refunded within 45 days after

20 the date the return is filed, no interest shall be al21 lowed under subsection (a) on such overpayment.

22 ‘‘(2) REFUNDS AFTER CLAIM FOR CREDIT OR

23 REFUND.—If—
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1 ‘‘(A) the taxpayer files a claim for a credit

2 or refund for any overpayment of tax imposed

3 by this title, and

4 ‘‘(B) such overpayment is refunded within

5 45 days after such claim is filed,

6 no interest shall be allowed on such overpayment

7 from the date the claim is filed until the day the re8 fund is made.

9 ‘‘(3) IRS INITIATED ADJUSTMENTS.—If an ad10 justment initiated by the Secretary, results in a re11 fund or credit of an overpayment, interest on such

12 overpayment shall be computed by subtracting 45

13 days from the number of days interest would other14 wise be allowed with respect to such overpayment.’’

15 (b) EFFECTIVE DATES.—

16 (1) Paragraph (1) of section 6611(e) of the In17 ternal Revenue Code of 1986 (as amended by sub18 section (a)) shall apply in the case of returns the

19 due date for which (determined without regard to

20 extensions) is on or after January 1, 1994.

21 (2) Paragraph (2) of section 6611(e) of such

22 Code (as so amended) shall apply in the case of

23 claims for credit or refund of any overpayment filed

24 on or after January 1, 1995, regardless of the tax25 able period to which such refund relates.
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1 (3) Paragraph (3) of section 6611(e) of such

2 Code (as so amended) shall apply in the case of any

3 refund paid on or after January 1, 1995, regardless

4 of the taxable period to which such refund relates.

5 SEC. 14274. DENIAL OF DEDUCTION RELATING TO TRAVEL

6 EXPENSES.

7 (a) IN GENERAL.—Section 274(m) (relating to addi8 tional limitations on travel expenses) is amended by add9 ing at the end thereof the following new paragraph:

10 ‘‘(3) TRAVEL EXPENSES OF SPOUSE, DEPEND11 ENT, OR OTHERS.—No deduction shall be allowed

12 under this chapter (other than section 217) for trav13 el expenses paid or incurred with respect to a

14 spouse, dependent, or other individual accompanying

15 the taxpayer (or an officer or employee of the tax16 payer) on business travel, unless—

17 ‘‘(A) the spouse, dependent, or other indi18 vidual is an employee of the taxpayer,

19 ‘‘(B) the travel of the spouse, dependent,

20 or other individual is for a bona fide business

21 purpose, and

22 ‘‘(C) such expenses would otherwise be de23 ductible by the spouse, dependent, or other indi24 vidual.’’
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1 (b) EFFECTIVE DATE.—The amendment made by

2 this section shall apply to amounts paid or incurred after

3 December 31, 1993.

4 SEC. 14275. INCREASE IN WITHHOLDING FROM SUPPLE5 MENTAL WAGE PAYMENTS.

6 If an employer elects under Treasury Regulation

7 31.3402 (g)–1 to determine the amount to be deducted

8 and withheld from any supplemental wage payment by

9 using a flat percentage rate, the rate to be used in deter10 mining the amount to be so deducted and withheld shall

11 not be less than 28 percent. The preceding sentence shall

12 apply to payments made after December 31, 1993.

13 Subtitle C—Empowerment Zones

14 and Enterprise Communities, Etc.

15 PART I—EMPOWERMENT ZONES AND

16 ENTERPRISE COMMUNITIES

17 SEC. 14301. DESIGNATION AND TREATMENT OF

18 EMPOWERMENT ZONES AND ENTERPRISE

19 COMMUNITIES.

20 (a) IN GENERAL.—Chapter 1 (relating to normal

21 taxes and surtaxes) is amended by inserting after sub22 chapter T the following new subchapter:
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1 ‘‘Subchapter U—Designation and Treatment

2 of Empowerment Zones and Enterprise

3 Communities

‘‘Part I. Designation.

‘‘Part II. Incentives for empowerment zones and enterprise communities.

‘‘Part III. Additional incentives for empowerment zones.

‘‘Part IV. Regulations.

4 ‘‘PART I—DESIGNATION

‘‘Sec. 1391. Designation procedure.

‘‘Sec. 1392. Eligibility criteria.

‘‘Sec. 1393. Definitions and special rules.

5 ‘‘SEC. 1391. DESIGNATION PROCEDURE.

6 ‘‘(a) IN GENERAL.—From among the areas nomi7 nated for designation under this section, the appropriate

8 Secretaries may, in consultation with the Enterprise

9 Board, designate empowerment zones and enterprise

10 communities.

11 ‘‘(b) NUMBER OF DESIGNATIONS.—

12 ‘‘(1) ENTERPRISE COMMUNITIES.—The appro13 priate Secretaries may designate in the aggregate

14 100 nominated areas as enterprise communities

15 under this section, subject to the availability of eligi16 ble nominated areas. Of that number, not more than

17 65 may be designated in urban areas, not more than

18 30 may be designated in rural areas, and not more

19 than 5 may be designated by the Secretary of the

20 Interior in Indian reservations.
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1 ‘‘(2) EMPOWERMENT ZONES.—The appropriate

2 Secretaries may designate in the aggregate 10 nomi3 nated areas as empowerment zones under this sec4 tion, subject to the availability of eligible nominated

5 areas. Of that number, not more than 6 may be des6 ignated in urban areas, not more than 3 may be des7 ignated in rural areas, and not more than 1 may be

8 designated by the Secretary of the Interior in an In9 dian reservation. If 6 empowerment zones are des10 ignated in urban areas, no less than 1 shall be des11 ignated in an urban area the most populous city of

12 which has a population of 500,000 or less. The Sec13 retary of Housing and Urban Development shall des14 ignate empowerment zones located in urban areas in

15 such a manner that the aggregate population of all

16 such zones does not exceed 750,000.

17 ‘‘(c) PERIOD DESIGNATIONS MAY BE MADE.—A des18 ignation may be made under this section only after 1993

19 and before 1996.

20 ‘‘(d) PERIOD FOR WHICH DESIGNATION IS IN EF21 FECT.—

22 ‘‘(1) IN GENERAL.—Any designation under this

23 section shall remain in effect during the period be24 ginning on the date of the designation and ending

25 on the earliest of—
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1 ‘‘(A) the close of the 10th calendar year

2 beginning on or after such date of designation,

3 ‘‘(B) the termination date designated by

4 the State and local governments as provided for

5 in their nomination, or

6 ‘‘(C) the date the appropriate Secretary re7 vokes the designation.

8 ‘‘(2) REVOCATION OF DESIGNATION.—

9 ‘‘(A) IN GENERAL.—The appropriate Sec10 retary, in consultation with the Enterprise

11 Board, may revoke the designation under this

12 section of an area if such Secretary determines

13 that the local government or the State in which

14 it is located—

15 ‘‘(i) has modified the boundaries of

16 the area, or

17 ‘‘(ii) is not complying substantially

18 with, or fails to make progress in achieving

19 the benchmarks set forth in, the strategic

20 plan under subsection (f)(2).

21 ‘‘(B) APPLICABLE PROCEDURES.—A des22 ignation may be revoked by the appropriate

23 Secretary under subparagraph (A) only after a

24 hearing on the record involving officials of the

25 State or local government involved.
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1 ‘‘(e) LIMITATIONS ON DESIGNATIONS.—An area may

2 be designated under subsection (a) only if—

3 ‘‘(1) the area is nominated by 1 or more local

4 governments and the State or States in which it is

5 located for designation under this section,

6 ‘‘(2) such State or States and the local govern7 ments have the authority—

8 ‘‘(A) to nominate the area for designation

9 under this section, and

10 ‘‘(B) to provide the assurances described in

11 paragraph (3),

12 ‘‘(3) such State or States and the local govern13 ments provide written assurances satisfactory to the

14 appropriate Secretary that the strategic plan de15 scribed in the application under subsection (f)(2) for

16 such area will be implemented,

17 ‘‘(4) the appropriate Secretary determines that

18 any information furnished is reasonably accurate,

19 and

20 ‘‘(5) such State or States and local govern21 ments certify that no portion of the area nominated

22 is already included in an empowerment zone or in an

23 enterprise community or in an area otherwise nomi24 nated to be designated under this section.
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1 ‘‘(f) APPLICATION.—An application for designation

2 as an empowerment zone or as an enterprise community

3 shall—

4 ‘‘(1) demonstrate that the nominated area sat5 isfies the eligibility criteria described in section

6 1392,

7 ‘‘(2) include a strategic plan for accomplishing

8 the purposes of this subchapter that—

9 ‘‘(A) describes the coordinated economic,

10 human, community, and physical development

11 plan and related activities proposed for the

12 nominated area,

13 ‘‘(B) describes the process by which the af14 fected community is a full partner in the proc15 ess of developing and implementing the plan

16 and the extent to which local institutions and

17 organizations have contributed to the planning

18 process,

19 ‘‘(C) identifies the amount of State, local,

20 and private resources that will be available in

21 the nominated area and the private/public part22 nerships to be used, which may include partici23 pation by, and cooperation with, universities,

24 medical centers, and other private and public

25 entities,
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1 ‘‘(D) identifies the funding requested

2 under any Federal program in support of the

3 proposed economic, human, community, and

4 physical development and related activities,

5 ‘‘(E) identifies baselines, methods, and

6 benchmarks for measuring the success of carry7 ing out the strategic plan, including the extent

8 to which poor persons and families will be em9 powered to become economically self-sufficient,

10 and

11 ‘‘(F) does not include any action to assist

12 any establishment in relocating from one area

13 outside the nominated area to the nominated

14 area, except that assistance for the expansion of

15 an existing business entity through the estab16 lishment of a new branch, affiliate, or subsidi17 ary is permitted if—

18 ‘‘(i) the establishment of the new

19 branch, affiliate, or subsidiary will not re20 sult in a decrease in employment in the

21 area of original location or in any other

22 area where the existing business entity

23 conducts business operations, and

24 ‘‘(ii) there is no reason to believe that

25 the new branch, affiliate, or subsidiary is
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1 being established with the intention of clos2 ing down the operations of the existing

3 business entity in the area of its original

4 location or in any other area where the ex5 isting business entity conducts business op6 eration, and

7 ‘‘(3) include such other information as may be

8 required by the appropriate Secretary or the Enter9 prise Board.

10 ‘‘SEC. 1392. ELIGIBILITY CRITERIA.

11 ‘‘(a) IN GENERAL.—A nominated area shall be eligi12 ble for designation under section 1391 only if it meets the

13 following criteria:

14 ‘‘(1) POPULATION.—The nominated area has a

15 maximum population of—

16 ‘‘(A) in the case of an urban area, the

17 lesser of—

18 ‘‘(i) 200,000, or

19 ‘‘(ii) the greater of 50,000 or 10 per20 cent of the population of the most popu21 lous city located within the nominated

22 area, and

23 ‘‘(B) in the case of a rural area, 30,000.
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1 ‘‘(2) DISTRESS.—The nominated area is one of

2 pervasive poverty, unemployment, and general dis3 tress.

4 ‘‘(3) SIZE.—The nominated area—

5 ‘‘(A) does not exceed 20 square miles if an

6 urban area or 1,000 square miles if a rural

7 area or an Indian reservation,

8 ‘‘(B) has a boundary which is continuous,

9 or, except in the case of a rural area located in

10 more than 1 State, consists of not more than

11 3 noncontiguous parcels,

12 ‘‘(C)(i) in the case of an urban area, is lo13 cated entirely within no more than 2 contiguous

14 States, and

15 ‘‘(ii) in the case of a rural area, is located

16 entirely within no more than 3 contiguous

17 States, and

18 ‘‘(D) does not include any portion of a

19 central business district (as such term is used

20 for purposes of the most recent Census of Re21 tail Trade) unless the poverty rate for each

22 population census tract in such district is not

23 less than 35 percent (30 percent in the case of

24 an enterprise community).

25 ‘‘(4) POVERTY RATE.—The poverty rate—
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1 ‘‘(A) for each population census tract with2 in the nominated area is not less than 20 per3 cent,

4 ‘‘(B) for at least 90 percent of the popu5 lation census tracts within the nominated area

6 is not less than 25 percent, and

7 ‘‘(C) for at least 50 percent of the popu8 lation census tracts within the nominated area

9 is not less than 35 percent.

10 ‘‘(b) SPECIAL RULES RELATING TO DETERMINATION

11 OF POVERTY RATE.—For purposes of subsection (a)(4)—

12 ‘‘(1) TREATMENT OF CENSUS TRACTS WITH

13 SMALL POPULATIONS.—

14 ‘‘(A) TRACTS WITH NO POPULATION.—In

15 the case of a population census tract with no

16 population—

17 ‘‘(i) such tract shall be treated as hav18 ing a poverty rate which meets the require19 ments of subparagraphs (A) and (B) of

20 subsection (a)(4), but

21 ‘‘(ii) such tract shall be treated as

22 having a zero poverty rate for purposes of

23 applying subparagraph (C) thereof.

24 ‘‘(B) TRACTS WITH POPULATIONS OF LESS

25 THAN 2,000.—A population census tract with a
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1 population of less than 2,000 shall be treated as

2 having a poverty rate which meets the require3 ments of subparagraphs (A) and (B) of sub4 section (a)(4) if more than 75 percent of such

5 tract is zoned for commercial or industrial use.

6 ‘‘(2) DISCRETION TO ADJUST REQUIRE7 MENTS.—Where necessary to carry out the purposes

8 of this subchapter, the appropriate Secretary may

9 reduce by 5 percentage points one of the following

10 thresholds for not more than 10 percent of the popu11 lation census tracts (or, if fewer, 5 population cen12 sus tracts) in the nominated area:

13 ‘‘(A) The 20 percent threshold in sub14 section (a)(4)(A).

15 ‘‘(B) The 25 percent threshold in sub16 section (a)(4)(B).

17 ‘‘(C) The 35 percent threshold in sub18 section (a)(4)(C).

19 If the appropriate Secretary elects to reduce the

20 threshold under subparagraph (C) for an enterprise

21 community, such Secretary may (in lieu of applying

22 the preceding sentence) reduce by 10 percentage

23 points the threshold under subparagraph (C) for 3

24 population census tracts.
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1 ‘‘(3) EACH NONCONTIGUOUS AREA MUST SAT2 ISFY POVERTY RATE RULE.—A nominated area may

3 not include a noncontiguous parcel unless such par4 cel separately meets (subject to paragraphs (1) and

5 (2)) the criteria set forth in subsection (a)(4).

6 ‘‘(4) AREAS NOT WITHIN CENSUS TRACTS.—In

7 the case of an area which is not tracted for popu8 lation census tracts, the equivalent county divisions

9 (as defined by the Bureau of the Census for pur10 poses of defining poverty areas) shall be used for

11 purposes of determining poverty rates.

12 ‘‘(c) FACTORS TO CONSIDER.—From among the

13 nominated areas eligible for designation under section

14 1391 by the appropriate Secretary, such appropriate Sec15 retary shall make designations of empowerment zones and

16 enterprise communities on the basis of—

17 ‘‘(1) the effectiveness of the strategic plan sub18 mitted pursuant to section 1391(f)(2) and the assur19 ances made pursuant to section 1391(e)(3), and

20 ‘‘(2) criteria specified by the Enterprise Board.

21 ‘‘SEC. 1393. DEFINITIONS AND SPECIAL RULES.

22 ‘‘(a) IN GENERAL.—For purposes of this

23 subchapter—

24 ‘‘(1) APPROPRIATE SECRETARY.—The term ‘ap25 propriate Secretary’ means—
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1 ‘‘(A) the Secretary of Housing and Urban

2 Development in the case of any nominated area

3 which is located in an urban area,

4 ‘‘(B) the Secretary of Agriculture in the

5 case of any nominated area which is located in

6 a rural area, and

7 ‘‘(C) the Secretary of the Interior in the

8 case of any nominated area which is located in

9 an Indian reservation.

10 ‘‘(2) ENTERPRISE BOARD.—The term ‘Enter11 prise Board’ means any board hereafter established

12 and designated for purposes of this subchapter as

13 the ‘Enterprise Board’.

14 ‘‘(3) RURAL AREA.—The term ‘rural area’

15 means any area which is—

16 ‘‘(A) outside of a metropolitan statistical

17 area (within the meaning of section

18 143(k)(2)(B)), or

19 ‘‘(B) determined by the Secretary of Agri20 culture, after consultation with the Secretary of

21 Commerce, to be a rural area.

22 ‘‘(4) URBAN AREA.—The term ‘urban area’

23 means an area which is not a rural area.

24 ‘‘(5) INDIAN RESERVATION.—
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1 ‘‘(A) IN GENERAL.—The term ‘Indian res2 ervation’ means a reservation as defined in—

3 ‘‘(i) section 3(d) of the Indian Financ4 ing Act of 1974 (25 U.S.C. 1452(d)), or

5 ‘‘(ii) section 4(10) of the Indian Child

6 Welfare Act of 1978 (25 U.S.C.

7 1903(10)).

8 ‘‘(B) GOVERNMENTS.—In the case of an

9 area in an Indian reservation, the reservation

10 governing body (as determined by the Secretary

11 of the Interior) shall be deemed to be both the

12 State and local governments with respect to

13 such area.

14 ‘‘(6) LOCAL GOVERNMENT.—The term ‘local

15 government’ means—

16 ‘‘(A) any county, city, town, township, par17 ish, village, or other general purpose political

18 subdivision of a State, and

19 ‘‘(B) any combination of political subdivi20 sions described in subparagraph (A) recognized

21 by the appropriate Secretary.

22 ‘‘(7) NOMINATED AREA.—The term ‘nominated

23 area’ means an area which is nominated by 1 or

24 more local governments and the State or States in
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1 which it is located for designation under section

2 1391.

3 ‘‘(8) GOVERNMENTS.—If more than 1 State or

4 local government seeks to nominate an area as a tax

5 enterprise zone, any reference to, or requirement of,

6 this subchapter shall apply to all such governments.

7 ‘‘(9) SPECIAL RULE.—An area shall be treated

8 as nominated by a State and a local government if

9 it is nominated by such other entity as may be speci10 fied by the Enterprise Board.

11 ‘‘(10) USE OF CENSUS DATA.—Population and

12 poverty rate shall be determined by the most recent

13 decennial census data available.

14 ‘‘(b) EMPOWERMENT ZONE; ENTERPRISE COMMU15 NITY.—For purposes of this title, the terms ‘empowerment

16 zone’ and ‘enterprise community’ mean areas designated

17 as such under section 1391.

18 ‘‘PART II—INCENTIVES FOR EMPOWERMENT

19 ZONES AND ENTERPRISE COMMUNITIES

‘‘Sec. 1394. Incentives.

20 ‘‘SEC. 1394. INCENTIVES.

21 ‘‘(a) INCREASE IN LOW INCOME HOUSING CREDIT.—

22 For purposes of section 42(d)(5)(C), a building shall be

23 treated as located in a qualified census tract if—
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1 ‘‘(1) such building is located in a census tract

2 having a poverty rate of at least 30 percent (deter3 mined in accordance with section 1393(a)(10)), and

4 ‘‘(2) such building is located in an

5 empowerment zone or an enterprise community.

6 ‘‘(b) TAX EXEMPT ENTERPRISE ZONE FACILITY

7 BONDS.—

8 ‘‘(1) IN GENERAL.—For purposes of part IV of

9 subchapter B of chapter 1 (relating to tax exemption

10 requirements for State and local bonds), the term

11 ‘exempt facility bond’ includes any bond issued as

12 part of an issue 95 percent or more of the net pro13 ceeds (as defined in section 150(a)(3)) of which are

14 to be used to provide any enterprise zone facility.

15 ‘‘(2) ENTERPRISE ZONE FACILITY.—For pur16 poses of this subsection—

17 ‘‘(A) IN GENERAL.—The term ‘enterprise

18 zone facility’ means any qualified zone property

19 the principal user of which is an enterprise zone

20 business (as defined in section 1397D), and any

21 land which is functionally related and subordi22 nate to such property.

23 ‘‘(B) QUALIFIED ZONE PROPERTY.—The

24 term ‘qualified zone property’ has the meaning
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1 given such term by section 1397B(c); except

2 that—

3 ‘‘(i) section 1397B(c)(3) shall not

4 apply, and

5 ‘‘(ii) the references to empowerment

6 zones shall be treated as including ref7 erences to enterprise communities.

8 ‘‘(3) LIMITATION ON AMOUNT OF BONDS.—

9 ‘‘(A) IN GENERAL.—Paragraph (1) shall

10 not apply to any issue if the aggregate amount

11 of outstanding enterprise zone facility bonds al12 locable to any enterprise zone business (taking

13 into account such issue) exceeds—

14 ‘‘(i) $3,000,000 with respect to any 1

15 empowerment zone or enterprise commu16 nity, or

17 ‘‘(ii) $20,000,000 with respect to all

18 empowerment zones and enterprise com19 munities.

20 ‘‘(B) AGGREGATE ENTERPRISE ZONE FA21 CILITY BOND BENEFIT.—For purposes of sub22 paragraph (A), the aggregate amount of out23 standing enterprise zone facility bonds allocable

24 to any business shall be determined under rules

25 similar to the rules of section 144(a)(10), tak-
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1 ing into account only bonds to which paragraph

2 (1) applies.

3 ‘‘(4) ACQUISITION OF LAND AND EXISTING

4 PROPERTY PERMITTED.—The requirements of sec5 tions 147(c)(1)(A) and 147(d) shall not apply to any

6 bond described in paragraph (1).

7 ‘‘(5) PARTIAL EXEMPTION FROM VOLUME

8 CAP.—Only for purposes of section 146, the term

9 ‘private activity bond’ shall not include 50 percent of

10 any bond issued as part of an issue described in

11 paragraph (1).

12 ‘‘(6) PENALTY FOR CEASING TO MEET RE13 QUIREMENTS.—

14 ‘‘(A) FAILURES CORRECTED.—An issue

15 which fails to meet 1 or more of the require16 ments of paragraphs (1) and (2) shall be

17 treated as meeting such requirements if—

18 ‘‘(i) the issuer and any principal user

19 in good faith attempted to meet such re20 quirements, and

21 ‘‘(ii) any failure to meet such require22 ments is corrected within a reasonable pe23 riod after such failure is first discovered.

24 ‘‘(B) LOSS OF DEDUCTIONS WHERE FACIL25 ITY CEASES TO BE QUALIFIED.—No deduction
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1 shall be allowed under this chapter for interest

2 on any financing provided from any bond to

3 which paragraph (1) applies with respect to any

4 facility to the extent such interest accrues dur5 ing the period beginning on the first day of the

6 calendar year which includes the date on

7 which—

8 ‘‘(i) substantially all of the facility

9 with respect to which the financing was

10 provided ceases to be used in an

11 empowerment zone or enterprise commu12 nity, or

13 ‘‘(ii) the principal user of such facility

14 ceases to be an enterprise zone business

15 (as defined in section 1397D, but treating

16 references to empowerment zones as in17 cluding references to enterprise commu18 nities).

19 ‘‘(C) EXCEPTION IF ZONE CEASES.—Sub20 paragraphs (A) and (B) shall not apply solely

21 by reason of the termination or revocation of a

22 designation as an empowerment zone or an en23 terprise community.
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1 ‘‘(D) EXCEPTION FOR BANKRUPTCY.—

2 Subparagraphs (A) and (B) shall not apply to

3 any cessation resulting from bankruptcy.

4 ‘‘(c) ENTERPRISE ZONE FACILITY BONDS NOT SUB5 JECT TO INTEREST DEDUCTION LIMITATIONS ON FINAN6 CIAL INSTITUTIONS.—Any tax-exempt bond described in

7 subsection (b)(1)—

8 ‘‘(1) shall be treated as acquired before August

9 8, 1986, for purposes of sections 265(b) and

10 291(e)(1)(B), and

11 ‘‘(2) shall not be taken into account in deter12 mining whether any issuer is a qualified small issuer

13 for purposes of section 265(b).

14 ‘‘(d) ADDITIONAL LOW-INCOME HOUSING CREDIT

15 AMOUNT.—

16 ‘‘(1) IN GENERAL.—Each State which includes

17 any empowerment zone or enterprise community

18 shall receive an additional State housing credit ceil19 ing amount for purposes of section 42 of $818,000

20 for each such zone or community.

21 ‘‘(2) ADDITIONAL AMOUNT MUST BE ALLO22 CATED TO BUILDINGS IN DESIGNATED AREAS.—

23 ‘‘(A) IN GENERAL.—The portion of the ad24 ditional amount received under paragraph (1)

25 by reason of any empowerment zone or enter-
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1 prise community which may be applied to in2 crease the State housing credit ceiling for any

3 calendar year shall not exceed the lesser of—

4 ‘‘(i) the unused portion of such addi5 tional amount with respect to such zone or

6 community, or

7 ‘‘(ii) the aggregate housing credit dol8 lar amount allocated from such ceiling for

9 such year to buildings located in such zone

10 or community.

11 ‘‘(B) UNUSED PORTION.—For purposes of

12 subparagraph (A), the unused portion for any

13 calendar year of the additional amount received

14 under paragraph (1) is the amount equal to the

15 excess of—

16 ‘‘(i) the additional amount received

17 under paragraph (1) by the State by rea18 son of the zone or community, over

19 ‘‘(ii) the aggregate of the increases in

20 the State housing credit ceiling by reason

21 of such amount for all prior calendar

22 years.

23 ‘‘(3) AVAILABILITY OF ADDITIONAL AMOUNT.—

24 None of the additional amount received under para25 graph (1) may be applied after 1996.
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1 ‘‘(4) AREAS LOCATED IN MORE THAN 1

2 STATE.—In the case of an empowerment zone or en3 terprise community which is located in more than 1

4 State, the $818,000 amount shall be allocated

5 among such States in proportion to the population

6 of such zone or community which is within each

7 such State.

8 ‘‘(5) ZONES LOCATED IN CONSTITUTIONAL

9 HOME RULE CITIES.—If any empowerment zone or

10 enterprise community is located in a constitutional

11 home rule city (as defined in section 42(h)(4)(E)),

12 the additional amount received under paragraph (1)

13 shall be allocated to such city and shall not be taken

14 into account in determining such city’s share of the

15 State housing credit ceiling under section

16 42(h)(4)(E).

17 ‘‘PART III—ADDITIONAL INCENTIVES FOR

18 EMPOWERMENT ZONES

‘‘SUBPART A. Empowerment zone employment credit.

‘‘SUBPART B. Zone resident empowerment savings credit.

‘‘SUBPART C. Depreciation and other incentives.

19 ‘‘Subpart A—Empowerment Zone Employment Credit

‘‘Sec. 1396. Empowerment zone employment credit.

‘‘Sec. 1397. Other definitions and special rules.

20 ‘‘SEC. 1396. EMPOWERMENT ZONE EMPLOYMENT CREDIT.

21 ‘‘(a) AMOUNT OF CREDIT.—For purposes of section

22 38, the amount of the empowerment zone employment
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1 credit determined under this section with respect to any

2 employer for any taxable year is the applicable percentage

3 of the qualified zone wages paid or incurred during the

4 calendar year which ends with or within such taxable year.

5 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of

6 this section, the term ‘applicable percentage’ means the

7 percentage determined in accordance with the following

8 table:

‘‘In the case of wages paid or The applicable

incurred during calendar year: percentage is:

1994 through 2000 ........................................ 25

2001 ............................................................... 20

2002 ............................................................... 15

2003 ............................................................... 10

2004 ............................................................... 5

9 ‘‘(c) QUALIFIED ZONE WAGES.—

10 ‘‘(1) IN GENERAL.—For purposes of this sec11 tion, the term ‘qualified zone wages’ means any

12 wages paid or incurred by an employer for services

13 performed by an employee while such employee is a

14 qualified zone employee.

15 ‘‘(2) ONLY FIRST $20,000 OF WAGES PER YEAR

16 TAKEN INTO ACCOUNT.—With respect to each quali17 fied zone employee, the amount of qualified zone

18 wages which may be taken into account for a cal19 endar year shall not exceed $20,000.

20 ‘‘(3) COORDINATION WITH TARGETED JOBS

21 CREDIT.—
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1 ‘‘(A) IN GENERAL.—The term ‘qualified

2 zone wages’ shall not include wages taken into

3 account in determining the credit under section

4 51.

5 ‘‘(B) COORDINATION WITH PARAGRAPH

6 (2).—The $20,000 amount in paragraph (2)

7 shall be reduced for any calendar year by the

8 amount of wages paid or incurred during such

9 year which are taken into account in determin10 ing the credit under section 51.

11 ‘‘(d) QUALIFIED ZONE EMPLOYEE.—For purposes of

12 this section—

13 ‘‘(1) IN GENERAL.—Except as otherwise pro14 vided in this subsection, the term ‘qualified zone em15 ployee’ means, with respect to any period, any em16 ployee of an employer if—

17 ‘‘(A) substantially all of the services per18 formed during such period by such employee for

19 such employer are performed within an

20 empowerment zone in a trade or business of the

21 employer, and

22 ‘‘(B) the principal place of abode of such

23 employee while performing such services is

24 within such empowerment zone.
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1 ‘‘(2) CERTAIN INDIVIDUALS NOT ELIGIBLE.—

2 The term ‘qualified zone employee’ shall not

3 include—

4 ‘‘(A) any individual described in subpara5 graph (A), (B), or (C) of section 51(i)(1),

6 ‘‘(B) any 5-percent owner (as defined in

7 section 416(i)(1)(B)),

8 ‘‘(C) any individual employed by the em9 ployer for less than 90 days,

10 ‘‘(D) any individual employed by the em11 ployer at any facility described in section

12 144(c)(6)(B), and

13 ‘‘(E) any individual employed by the em14 ployer in a trade or business the principal activ15 ity of which is farming (within the meaning of

16 subparagraphs (A) or (B) of section

17 2032A(e)(5)), but only if, as of the close of the

18 taxable year, the sum of—

19 ‘‘(i) the aggregate unadjusted bases

20 (or, if greater, the fair market value) of

21 the assets owned by the employer which

22 are used in such a trade or business, and

23 ‘‘(ii) the aggregate value of assets

24 leased by the employer which are used in

25 such a trade or business (as determined
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1 under regulations prescribed by the Sec2 retary),

3 exceeds $500,000.

4 ‘‘(3) SPECIAL RULES RELATED TO TERMI5 NATION OF EMPLOYMENT.—

6 ‘‘(A) IN GENERAL.—Paragraph (2)(C)

7 shall not apply to—

8 ‘‘(i) a termination of employment of

9 an individual who before the close of the

10 period referred to in paragraph (2)(C) be11 comes disabled to perform the services of

12 such employment unless such disability is

13 removed before the close of such period

14 and the taxpayer fails to offer reemploy15 ment to such individual, or

16 ‘‘(ii) a termination of employment of

17 an individual if it is determined under the

18 applicable State unemployment compensa19 tion law that the termination was due to

20 the misconduct of such individual.

21 ‘‘(B) CHANGES IN FORM OF BUSINESS.—

22 For purposes of paragraph (2)(C), the employ23 ment relationship between the taxpayer and an

24 employee shall not be treated as terminated—
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1 ‘‘(i) by a transaction to which section

2 381(a) applies if the employee continues to

3 be employed by the acquiring corporation,

4 or

5 ‘‘(ii) by reason of a mere change in

6 the form of conducting the trade or busi7 ness of the taxpayer if the employee con8 tinues to be employed in such trade or

9 business and the taxpayer retains a sub10 stantial interest in such trade or business.

11 ‘‘SEC. 1397. OTHER DEFINITIONS AND SPECIAL RULES.

12 ‘‘(a) WAGES.—For purposes of this subpart—

13 ‘‘(1) IN GENERAL.—The term ‘wages’ has the

14 same meaning as when used in section 51.

15 ‘‘(2) CERTAIN TRAINING AND EDUCATIONAL

16 BENEFITS.—

17 ‘‘(A) IN GENERAL.—The following

18 amounts shall be treated as wages paid to an

19 employee:

20 ‘‘(i) Any amount paid or incurred by

21 an employer which is excludable from the

22 gross income of an employee under section

23 127, but only to the extent paid or in24 curred to a person not related to the

25 employer.
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1 ‘‘(ii) In the case of an employee who

2 has not attained the age of 19, any

3 amount paid or incurred by an employer

4 for any youth training program operated

5 by such employer in conjunction with local

6 education officials.

7 ‘‘(B) RELATED PERSON.—A person is re8 lated to any other person if the person bears a

9 relationship to such other person specified in

10 section 267(b) or 707(b)(1), or such person and

11 such other person are engaged in trades or

12 businesses under common control (within the

13 meaning of subsections (a) and (b) of section

14 52). For purposes of the preceding sentence, in

15 applying section 267(b) or 707(b)(1), ‘10 per16 cent’ shall be substituted for ‘50 percent’.

17 ‘‘(b) CONTROLLED GROUPS.—For purposes of this

18 subpart—

19 ‘‘(1) all employers treated as a single employer

20 under subsection (a) or (b) of section 52 shall be

21 treated as a single employer for purposes of this

22 subpart, and

23 ‘‘(2) the credit (if any) determined under sec24 tion 1396 with respect to each such employer shall
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1 be its proportionate share of the wages giving rise

2 to such credit.

3 ‘‘(c) CERTAIN OTHER RULES MADE APPLICABLE.—

4 For purposes of this subpart, rules similar to the rules

5 of section 51(k) and subsections (c), (d), and (e) of section

6 52 shall apply.

7 ‘‘(d) NOTICE OF AVAILABILITY OF ADVANCE PAY8 MENT OF EARNED INCOME CREDIT.—Each employer

9 shall take reasonable steps to notify all qualified zone em10 ployees of the availability to eligible individuals of receiv11 ing advanced payments of the credit under section 32 (re12 lating to the earned income credit).

13 ‘‘Subpart B—Zone Resident Empowerment Savings

14 Credit

‘‘Sec. 1397A. Zone resident empowerment savings credit.

15 ‘‘SEC. 1397A. ZONE RESIDENT EMPOWERMENT SAVINGS

16 CREDIT.

17 ‘‘(a) GENERAL RULE.—For purposes of section 38,

18 the amount of the zone resident empowerment savings

19 credit determined under this section with respect to any

20 employer for any taxable year is 50 percent of the quali21 fied savings contributions for the taxable year.

22 ‘‘(b) QUALIFIED SAVINGS CONTRIBUTIONS.—For

23 purposes of this section—
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1 ‘‘(1) IN GENERAL.—The term ‘qualified savings

2 contribution’ means any contribution by an employer

3 to a defined contribution plan—

4 ‘‘(A) which is made on behalf of an em5 ployee in connection with services performed by

6 such employee while such employee is a quali7 fied zone employee, and

8 ‘‘(B) with respect to which the employee

9 has a nonforfeitable right.

10 ‘‘(2) LIMITATION BASED ON COMPENSATION.—

11 ‘‘(A) IN GENERAL.—The qualified savings

12 contributions taken into account with respect to

13 any qualified zone employee for any taxable

14 year shall not exceed an amount equal to 2 per15 cent of so much of the employee’s compensation

16 (as defined in section 414(s)) as does not

17 exceed $35,000.

18 ‘‘(B) ZONE DESIGNATION IN EFFECT FOR

19 PARTIAL YEAR.—If a designation of an area as

20 an empowerment zone is in effect for less than

21 the entire taxable year, the $35,000 amount

22 under subparagraph (A) shall be ratably re23 duced to reflect the portion of the year such

24 designation is not in effect.
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1 ‘‘(3) CERTAIN CONTRIBUTIONS EXCLUDED.—

2 The term ‘qualified savings contribution’ shall not

3 include any contribution—

4 ‘‘(A) to a plan subject to the funding re5 quirements of section 412,

6 ‘‘(B) to a tax credit employee stock owner7 ship plan (as defined in section 409(a)) or to an

8 employee stock ownership plan (as defined in

9 section 4975(e)(7)),

10 ‘‘(C) to a stock bonus plan, or

11 ‘‘(D) which is an elective deferral (within

12 the meaning of section 402(g)(3)).

13 ‘‘(4) SIMPLIFIED EMPLOYEE PENSION.—A con14 tribution to an individual savings plan pursuant to

15 a simplified employee pension (as defined in section

16 408(k)) shall be treated as a contribution to a de17 fined contribution plan.

18 ‘‘(c) EMPLOYER REQUIREMENTS.—This section shall

19 apply to an employer for any taxable year only if—

20 ‘‘(1) the employer elects the application of this

21 section, and

22 ‘‘(2) the plan pursuant to which any qualified

23 savings contribution is made provides that any con24 tribution to such plan (whether or not a qualified

25 savings contribution) may be withdrawn by a quali-
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1 fied zone employee as described in section 72(t)(2)

2 (B) or (D).

3 ‘‘(d) DEFINITIONS.—For purposes of this section—

4 ‘‘(1) QUALIFIED ZONE EMPLOYEE.—The term

5 ‘qualified zone employee’ has the meaning given such

6 term by section 1396(d).

7 ‘‘(2) DEFINED CONTRIBUTION PLAN.—The

8 term ‘defined contribution plan’ means a defined

9 contribution plan (as defined in section 414(i))

10 which is described in section 401(a) and includes a

11 trust exempt from tax under section 501(a).

12 ‘‘(e) TREATMENT OF PLANS.—A plan shall not be

13 treated as failing to meet any requirement of part I of

14 subchapter D of chapter 1 by reason of permitting with15 drawals required to be permitted under subsection (c)(2).

16 ‘‘Subpart C—Depreciation and Other Incentives

‘‘Sec. 1397B. Depreciation benefits.

‘‘Sec. 1397C. Additional exclusion from volume cap for certain enterprise zone facility bonds.

‘‘Sec. 1397D. Enterprise zone business.

17 ‘‘SEC. 1397B. DEPRECIATION BENEFITS.

18 ‘‘(a) INCREASE IN EXPENSING UNDER SECTION

19 179.—

20 ‘‘(1) IN GENERAL.—In the case of an enterprise

21 zone business, for purposes of section 179—

22 ‘‘(A) qualified zone property shall be treat23 ed as section 179 property,
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1 ‘‘(B) the limitation under section

2 179(b)(1) shall be increased by the lesser of—

3 ‘‘(i) $50,000, or

4 ‘‘(ii) the cost of qualified zone prop5 erty placed in service during the taxable

6 year, and

7 ‘‘(C) section 179(b)(2) shall be applied by

8 substituting ‘by one-half of the amount by

9 which the cost of qualified zone property (other

10 than real property) and other section 179 prop11 erty’ for ‘by the amount by which the cost of

12 section 179 property’.

13 ‘‘(b) ACCELERATED DEPRECIATION.—

14 ‘‘(1) IN GENERAL.—For purposes of section

15 168(a), with respect to qualified zone property of an

16 enterprise zone business, the applicable recovery pe17 riod shall be determined in accordance with the table

18 contained in paragraph (2) in lieu of the table con19 tained in section 168(c).

20 ‘‘(2) APPLICABLE RECOVERY PERIOD FOR

21 QUALIFIED ZONE PROPERTY.—For purposes of para22 graph (1)—

The applicable

‘‘In the case of: recovery period is:

3-year property ........................................................................ 2 years

5-year property ........................................................................ 3 years

7-year property ........................................................................ 4 years

10-year property ...................................................................... 6 years

15-year property ...................................................................... 9 years
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The applicable

‘‘In the case of: recovery period is:

20-year property ...................................................................... 12 years

Nonresidential real property .................................................... 22 years.

1 ‘‘(3) DEDUCTION ALLOWED IN COMPUTING

2 MINIMUM TAX.—Paragraph (1) shall apply for pur3 poses of determining alternative minimum taxable

4 income under section 55.

5 ‘‘(c) QUALIFIED ZONE PROPERTY.—For purposes of

6 this section—

7 ‘‘(1) IN GENERAL.—The term ‘qualified zone

8 property’ means any property to which section 168

9 applies (or would apply but for section 179) if—

10 ‘‘(A) such property was acquired by the

11 taxpayer by purchase (as defined in section

12 179(d)(2)) after the date on which the designa13 tion of the empowerment zone took effect,

14 ‘‘(B) the original use of which in an

15 empowerment zone commences with the tax16 payer, and

17 ‘‘(C) substantially all of the use of which

18 is in an empowerment zone and is in the active

19 conduct of a trade or business by the taxpayer

20 in such zone.

21 ‘‘(2) SPECIAL RULE FOR SUBSTANTIAL REN22 OVATIONS.—In the case of any property which is

23 substantially renovated by the taxpayer, the require-
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1 ments of subparagraphs (A) and (B) of paragraph

2 (1) shall be treated as satisfied. For purposes of the

3 preceding sentence, property shall be treated as sub4 stantially renovated by the taxpayer if, during any

5 24-month period beginning after the date on which

6 the designation of the empowerment zone took ef7 fect, additions to basis with respect to such property

8 in the hands of the taxpayer exceed the greater of

9 (i) an amount equal to the adjusted basis at the be10 ginning of such 24-month period in the hands of the

11 taxpayer, or (ii) $5,000.

12 ‘‘(3) EXCEPTION FOR ALTERNATIVE DEPRECIA13 TION PROPERTY.—The term ‘qualified zone prop14 erty’ does not include any property to which the al15 ternative depreciation system under section 168(g)

16 applies, determined—

17 ‘‘(A) without regard to section 168(g)(7)

18 (relating to election to use alternative deprecia19 tion system), and

20 ‘‘(B) after the application of section

21 280F(b) (relating to listed property with limited

22 business use).

23 ‘‘(d) SPECIAL RULES FOR SALE-LEASEBACKS.—For

24 purposes of subsection (c)(1)(B), if property is sold and

25 leased back by the taxpayer within 3 months after the date
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1 such property was originally placed in service, such prop2 erty shall be treated as originally placed in service not ear3 lier than the date on which such property is used under

4 the leaseback.

5 ‘‘(e) RECAPTURE.—Rules similar to the rules under

6 section 179(d)(10) shall apply with respect to any quali7 fied zone property of any business which ceases to be an

8 enterprise zone business.

9 ‘‘SEC. 1397C. ADDITIONAL EXCLUSION FROM VOLUME CAP

10 FOR CERTAIN ENTERPRISE ZONE FACILITY

11 BONDS.

12 ‘‘(a) IN GENERAL.—Section 1394(b)(5) shall be ap13 plied by substituting ‘75 percent’ for ‘50 percent’ in the

14 case of any bond described in section 1394(b)(1) issued

15 as part of an issue 95 percent or more of the net proceeds

16 (as defined in section 150(a)(3)) of which are used to pro17 vide qualified zone property the principal user of which

18 is any enterprise zone business if the ownership require19 ments of subsection (b) are met with respect to such

20 business.

21 ‘‘(b) OWNERSHIP REQUIREMENTS.—The ownership

22 requirements of this subsection are met with respect to

23 an enterprise zone business if—
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1 ‘‘(1) in the case of a sole proprietorship, the

2 principal place of abode of the proprietor is in an

3 empowerment zone,

4 ‘‘(2) in the case of a corporation, more than 50

5 percent of the stock (by vote and value) in the cor6 poration is owned (directly or indirectly) by individ7 uals whose principal place of abode is in an

8 empowerment zone, and

9 ‘‘(3) in the case of a partnership, more than 50

10 percent of the capital and profits interests in the

11 partnership is owned (directly or indirectly) by indi12 viduals whose principal place of abode is in an

13 empowerment zone.

14 ‘‘SEC. 1397D. ENTERPRISE ZONE BUSINESS DEFINED.

15 ‘‘(a) IN GENERAL.—For purposes of this subpart, the

16 term ‘enterprise zone business’ means—

17 ‘‘(1) any qualified business entity, and

18 ‘‘(2) any qualified proprietorship.

19 ‘‘(b) QUALIFIED BUSINESS ENTITY.—For purposes

20 of this section, the term ‘qualified business entity’ means,

21 with respect to any taxable year, any corporation or part22 nership if for such year—

23 ‘‘(1) every trade or business of such entity is

24 the active conduct of a qualified business within an

25 empowerment zone,
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1 ‘‘(2) at least 80 percent of the total gross in2 come of such entity is derived from the active con3 duct of such business,

4 ‘‘(3) substantially all of the use of the tangible

5 property of such entity (whether owned or leased) is

6 within an empowerment zone,

7 ‘‘(4) substantially all of the intangible property

8 of such entity is used in, and exclusively related to,

9 the active conduct of any such business,

10 ‘‘(5) substantially all of the services performed

11 for such entity by its employees are performed in an

12 empowerment zone,

13 ‘‘(6) at least 35 percent of its employees are

14 residents of an empowerment zone,

15 ‘‘(7) less than 5 percent of the average of the

16 aggregate unadjusted bases of the property of such

17 entity is attributable to collectibles (as defined in

18 section 408(m)(2)) other than collectibles that are

19 held primarily for sale to customers in the ordinary

20 course of such business, and

21 ‘‘(8) less than 5 percent of the average of the

22 aggregate unadjusted bases of the property of such

23 entity is attributable to nonqualified financial prop24 erty.
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1 ‘‘(c) QUALIFIED PROPRIETORSHIP.—For purposes of

2 this section, the term ‘qualified proprietorship’ means,

3 with respect to any taxable year, any qualified business

4 carried on by an individual as a proprietorship if for such

5 year—

6 ‘‘(1) at least 80 percent of the total gross in7 come of such individual from such business is de8 rived from the active conduct of such business in an

9 empowerment zone,

10 ‘‘(2) substantially all of the use of the tangible

11 property of such individual in such business (wheth12 er owned or leased) is within an empowerment zone,

13 ‘‘(3) substantially all of the intangible property

14 of such business is used in, and exclusively related

15 to, the active conduct of such business,

16 ‘‘(4) substantially all of the services performed

17 for such individual in such business by employees of

18 such business are performed in an empowerment

19 zone,

20 ‘‘(5) at least 35 percent of such employees are

21 residents of an empowerment zone,

22 ‘‘(6) less than 5 percent of the average of the

23 aggregate unadjusted bases of the property of such

24 individual which is used in such business is attrib25 utable to collectibles (as defined in section
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1 408(m)(2)) other than collectibles that are held pri2 marily for sale to customers in the ordinary course

3 of such business, and

4 ‘‘(7) less than 5 percent of the average of the

5 aggregate unadjusted bases of the property of such

6 individual which is used in such business is attrib7 utable to nonqualified financial property.

8 For purposes of this subsection, the term ‘employee’ in9 cludes the proprietor.

10 ‘‘(d) QUALIFIED BUSINESS.—For purposes of this

11 section—

12 ‘‘(1) IN GENERAL.—Except as otherwise pro13 vided in this subsection, the term ‘qualified business’

14 means any trade or business.

15 ‘‘(2) RENTAL OF REAL PROPERTY.—The rental

16 to others of real property located in an

17 empowerment zone shall be treated as a qualified

18 business if and only if—

19 ‘‘(A) the property is not residential rental

20 property (as defined in section 168(e)(2)), and

21 ‘‘(B) at least 50 percent of the gross rental

22 income from the real property is from enter23 prise zone businesses.

24 ‘‘(3) RENTAL OF TANGIBLE PERSONAL PROP25 ERTY.—The rental to others of tangible personal
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1 property shall be treated as a qualified business if

2 and only if substantially all of the rental of such

3 property is by enterprise zone businesses or by resi4 dents of an empowerment zone.

5 ‘‘(4) TREATMENT OF BUSINESS HOLDING IN6 TANGIBLES.—The term ‘qualified business’ shall not

7 include any trade or business consisting predomi8 nantly of the development or holding of intangibles

9 for sale or license.

10 ‘‘(5) CERTAIN BUSINESSES EXCLUDED.—The

11 term ‘qualified business’ shall not include—

12 ‘‘(A) any trade or business consisting of

13 the operation of any facility described in section

14 144(c)(6)(B), and

15 ‘‘(B) any trade or business the principal

16 activity of which is farming (within the meaning

17 of subparagraphs (A) or (B) of section

18 2032A(e)(5)), but only if, as of the close of the

19 preceding taxable year, the sum of—

20 ‘‘(i) the aggregate unadjusted bases

21 (or, if greater, the fair market value) of

22 the assets owned by the taxpayer which are

23 used in such a trade or business, and
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1 ‘‘(ii) the aggregate value of assets

2 leased by the taxpayer which are used in

3 such a trade or business,

4 exceeds $500,000.

5 For purposes of subparagraph (B), rules similar to

6 the rules of section 1397(b) shall apply.

7 ‘‘(e) NONQUALIFIED FINANCIAL PROPERTY.—For

8 purposes of this section, the term ‘nonqualified financial

9 property’ means debt, stock, partnership interests, op10 tions, futures contracts, forward contracts, warrants, no11 tional principal contracts, annuities, and other similar

12 property specified in regulations; except that such term

13 shall not include—

14 ‘‘(1) reasonable amounts of working capital

15 held in cash, cash equivalents, or debt instruments

16 with a term of 18 months or less, or

17 ‘‘(2) debt instruments described in section

18 1221(4).

19 ‘‘PART IV—REGULATIONS

‘‘Sec. 1397E. Regulations.

20 ‘‘SEC. 1397E. REGULATIONS.

21 ‘‘The Secretary shall prescribe such regulations as

22 may be necessary or appropriate to carry out the purposes

23 of parts II and III, including—
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1 ‘‘(1) regulations limiting the benefit of parts II

2 and III in circumstances where such benefits, in

3 combination with benefits provided under other Fed4 eral programs, would result in an activity being 100

5 percent or more subsidized by the Federal Govern6 ment,

7 ‘‘(2) regulations preventing abuse of the provi8 sions of parts II and III, and

9 ‘‘(3) regulations dealing with inadvertent fail10 ures of entities to be enterprise zone businesses.’’

11 (b) CLERICAL AMENDMENT.—The table of sub12 chapters for chapter 1 is amended by inserting after the

13 item relating to subchapter T the following new item:

‘‘Subchapter U. Designation and treatment of empowerment

zones and enterprise communities.’’

14 SEC. 14302. EXPANSION OF TARGETED JOBS CREDIT.

15 (a) ALLOWANCE OF CREDIT FOR HIRING

16 EMPOWERMENT ZONE RESIDENT.—Paragraph (1) of sec17 tion 51(d) (defining members of targeted groups) is

18 amended by striking ‘‘or’’ at the end of subparagraph (I),

19 by striking the period at the end of subparagraph (J) and

20 inserting ‘‘, or’’, and by adding at the end the following

21 new subparagraph:

22 ‘‘(K) an economically disadvantaged

23 empowerment zone resident.’’
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1 (b) ECONOMICALLY DISADVANTAGED EMPOWER2 MENT ZONE RESIDENT.—Section 51(d) is amended by re3 designating paragraphs (13) through (16) as paragraphs

4 (14) through (17), respectively, and by inserting after

5 paragraph (12) the following new paragraph:

6 ‘‘(13) ECONOMICALLY DISADVANTAGED

7 EMPOWERMENT ZONE RESIDENT.—The term ‘eco8 nomically disadvantaged empowerment zone resi9 dent’ means an individual—

10 ‘‘(A) whose principal place of abode while

11 performing services for the employer is within

12 an empowerment zone, and

13 ‘‘(B) who is certified by the designated

14 local agency as being a member of an economi15 cally disadvantaged family (as determined

16 under paragraph (11)).

17 Such term shall not include a qualified zone em18 ployee (as defined in section 1396(d) without regard

19 to paragraph (2) thereof).’’

20 (c) CONFORMING AMENDMENT.—Subparagraph (C)

21 of section 51(d)(12) is amended by striking ‘‘paragraph

22 (14)’’ and inserting ‘‘paragraph (15)’’.

23 SEC. 14303. TECHNICAL AND CONFORMING AMENDMENTS.

24 (a) CERTAIN CREDITS PART OF GENERAL BUSINESS

25 CREDIT.—
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1 (1) Subsection (b) of section 38 (relating to

2 current year business credit) is amended by striking

3 ‘‘plus’’ at the end of paragraph (7), by striking the

4 period at the end of paragraph (8) and inserting a

5 comma, and by adding at the end the following new

6 paragraphs:

7 ‘‘(9) the empowerment zone employment credit

8 determined under section 1396(a), plus

9 ‘‘(10) the zone resident empowerment savings

10 credit determined under section 1397A.’’

11 (2) Subsection (d) of section 39 is amended by

12 adding at the end the following new paragraph:

13 ‘‘(4) ENTERPRISE ZONE CREDITS.—No portion

14 of the unused business credit which is attributable to

15 the credit determined under section 1396 (relating

16 to empowerment zone employment credit) or section

17 1397A (relating to zone resident empowerment sav18 ings credit) may be carried to any taxable year end19 ing before January 1, 1994.’’

20 (b) DENIAL OF DEDUCTION FOR PORTION OF WAGES

21 EQUAL TO EMPOWERMENT ZONE EMPLOYMENT

22 CREDIT.—

23 (1) Subsection (a) of section 280C (relating to

24 rule for targeted jobs credit) is amended—
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1 (A) by striking ‘‘the amount of the credit

2 determined for the taxable year under section

3 51(a)’’ and inserting ‘‘the sum of the credits

4 determined for the taxable year under sections

5 51(a) and 1396(a)’’, and

6 (B) by striking ‘‘TARGETED JOBS

7 CREDIT’’ in the subsection heading and insert8 ing ‘‘EMPLOYMENT CREDITS’’.

9 (2) Subsection (c) of section 196 (relating to

10 deduction for certain unused business credits) is

11 amended by striking ‘‘and’’ at the end of paragraph

12 (4), by striking the period at the end of paragraph

13 (5) and inserting ‘‘, and’’, and by adding at the end

14 the following new paragraph:

15 ‘‘(6) the empowerment zone employment credit

16 determined under section 1396(a).’’

17 (c) EMPLOYMENT AND SAVINGS CREDITS MAY OFF18 SET 25 PERCENT OF MINIMUM TAX.—

19 (1) IN GENERAL.—Section 38(c) (relating to

20 limitation based on amount of tax) is amended by

21 redesignating paragraph (2) as paragraph (3) and

22 by inserting after paragraph (1) the following new

23 paragraph:

24 ‘‘(2) EMPOWERMENT ZONE CREDITS MAY OFF25 SET 25 PERCENT OF MINIMUM TAX.—
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1 ‘‘(A) IN GENERAL.—In the case of the

2 empowerment zone credits—

3 ‘‘(i) this section and section 39 shall

4 be applied separately with respect to such

5 credits, and

6 ‘‘(ii) for purposes of applying para7 graph (1) to such credits—

8 ‘‘(I) 75 percent of the tentative

9 minimum tax shall be substituted for

10 the tentative minimum tax under sub11 paragraph (A) thereof, and

12 ‘‘(II) the limitation under para13 graph (1) (as modified by subclause

14 (I)) shall be reduced by the credit al15 lowed under subsection (a) for the

16 taxable year (other than the

17 empowerment zone credits).

18 ‘‘(B) EMPOWERMENT ZONE CREDITS.—

19 For purposes of this paragraph, the term

20 ‘empowerment zone credits’ means the portion

21 of the credit under subsection (a) which is at22 tributable to the credits determined under sec23 tion 1396 (relating to empowerment zone em24 ployment credit) and section 1397A (relating to

25 zone resident empowerment savings credit).’’
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1 (d) CHANGES RELATING TO EMPOWERMENT ZONE

2 RESIDENT EMPOWERMENT SAVINGS CREDIT.—

3 (1) DISALLOWANCE OF DEDUCTION.—Section

4 404 (relating to deduction for certain employer con5 tributions) is amended by adding at the end the fol6 lowing new subsection:

7 ‘‘(m) COORDINATION WITH EMPOWERMENT ZONE

8 CREDIT.—No deduction shall be allowed under this sec9 tion for any qualified employer contribution taken into ac10 count in computing the credit determined under section

11 1397A.’’

12 (2) PENALTY-FREE DISTRIBUTIONS.—

13 (A) IN GENERAL.—Paragraph (2) of sec14 tion 72(t) (relating to exceptions to 10-percent

15 additional tax on early distributions from quali16 fied retirement plans) is amended by adding at

17 the end thereof the following new subpara18 graph:

19 ‘‘(D) DISTRIBUTIONS FROM CERTAIN

20 PLANS FOR FIRST HOME PURCHASES OR EDU21 CATIONAL EXPENSES.—

22 ‘‘(i) IN GENERAL.—Distributions to

23 an individual from a qualified retirement

24 plan—
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1 ‘‘(I) which are qualified first-time

2 homebuyer distributions (as defined in

3 paragraph (6)),

4 ‘‘(II) to the extent such distribu5 tions do not exceed the qualified high6 er education expenses (as defined in

7 paragraph (7)) of the taxpayer for the

8 taxable year, or

9 ‘‘(III) to the extent such distribu10 tions do not exceed an amount equal

11 to the aggregate investment made by

12 the taxpayer during the taxable year

13 in any enterprise zone business (as

14 defined in section 1397D) that meets

15 the ownership requirements of section

16 1397C(b).

17 ‘‘(ii) LIMITATION.—Clause (i) shall

18 not apply to the extent that the aggregate

19 amount of the distributions described in

20 clause (i) is greater than the excess of—

21 ‘‘(I) the qualified savings con22 tributions (as defined in section

23 1397A(b)) of the taxpayer, and any

24 earnings thereon, over
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1 ‘‘(II) the aggregate amounts to

2 which clause (i) and the last sentence

3 of paragraph (3)(A) applied for pre4 ceding taxable years.’’

5 (B) DEFINITIONS.—Section 72(t) is

6 amended by adding at the end thereof the fol7 lowing new paragraphs:

8 ‘‘(6) QUALIFIED FIRST-TIME HOMEBUYER DIS9 TRIBUTIONS.—For purposes of paragraph

10 (2)(D)(i)(I)—

11 ‘‘(A) IN GENERAL.—The term ‘qualified

12 first-time homebuyer distribution’ means any

13 payment or distribution received by an individ14 ual to the extent such payment or distribution

15 is used by the individual before the close of the

16 60th day after the day on which such payment

17 or distribution is received to pay qualified ac18 quisition costs with respect to a principal resi19 dence of a first-time homebuyer who is such in20 dividual or the spouse of such individual.

21 ‘‘(B) QUALIFIED ACQUISITION COSTS.—

22 For purposes of this paragraph, the term

23 ‘qualified acquisition costs’ means the costs of

24 acquiring, constructing, or reconstructing a res25 idence. Such term includes any usual or reason-
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1 able settlement, financing, or other closing

2 costs.

3 ‘‘(C) FIRST-TIME HOMEBUYER; OTHER

4 DEFINITIONS.—For purposes of this

5 paragraph—

6 ‘‘(i) FIRST-TIME HOMEBUYER.—The

7 term ‘first-time homebuyer’ means any in8 dividual if—

9 ‘‘(I) such individual (and if mar10 ried, such individual’s spouse) had no

11 present ownership interest in a prin12 cipal residence during the 3-year pe13 riod ending on the date of acquisition

14 of the principal residence to which

15 this paragraph applies, and

16 ‘‘(II) subsection (a)(6), (h), or

17 (k) of section 1034 did not suspend

18 the running of any period of time

19 specified in section 1034 with respect

20 to such individual on the day before

21 the date the distribution is applied

22 pursuant to subparagraph (A)(ii).

23 ‘‘(ii) PRINCIPAL RESIDENCE.—The

24 term ‘principal residence’ has the same

25 meaning as when used in section 1034.
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1 ‘‘(iii) DATE OF ACQUISITION.—The

2 term ‘date of acquisition’ means the date—

3 ‘‘(I) on which a binding contract

4 to acquire the principal residence to

5 which subparagraph (A) applies is en6 tered into, or

7 ‘‘(II) on which construction or re8 construction of such a principal resi9 dence is commenced.

10 ‘‘(D) SPECIAL RULE WHERE DELAY IN AC11 QUISITION.—If any distribution from any quali12 fied retirement plan fails to meet the require13 ments of subparagraph (A) solely by reason of

14 a delay or cancellation of the purchase or con15 struction of the residence, the amount of the

16 distribution may be recontributed to the plan

17 from which it was distributed within 120 days

18 after the date of such distribution.

19 ‘‘(7) QUALIFIED HIGHER EDUCATION EX20 PENSES.—For purposes of paragraph

21 (2)(D)(ii)(II)—

22 ‘‘(A) IN GENERAL.—The term ‘qualified

23 higher education expenses’ means tuition, fees,

24 books, supplies, and equipment required for the

25 enrollment or attendance of—
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1 ‘‘(i) the taxpayer,

2 ‘‘(ii) the taxpayer’s spouse, or

3 ‘‘(iii) the taxpayer’s child (as defined

4 in section 151(c)(3)) or grandchild,

5 at an eligible educational institution (as defined

6 in section 135(c)(3)).

7 ‘‘(B) COORDINATION WITH SAVINGS BOND

8 PROVISIONS.—The amount of qualified higher

9 education expenses for any taxable year shall be

10 reduced by any amount excludable from gross

11 income under section 135.’’

12 (C) CONFORMING AMENDMENTS.—

13 (i) Subparagraph (B) of section

14 72(t)(2) is amended by striking ‘‘or (C)’’

15 and inserting ‘‘, (C), or (D)’’.

16 (ii) Section 401(k)(2)(B)(i) is amend17 ed by striking ‘‘or’’ at the end of subclause

18 (III), by striking ‘‘and’’ at the end of

19 subclause (IV) and inserting ‘‘or’’, and by

20 inserting after subclause (IV) the following

21 new subclause:

22 ‘‘(V) subject to the limitation of

23 section 72(t)(2)(D)(ii), the date on

24 which qualified first-time homebuyer

25 distributions (as defined in section
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1 72(t)(6)), distributions for qualified

2 higher education expenses (as defined

3 in section 72(t)(7)), or distributions

4 for investments described in section

5 72(t)(2)(D)(i)(III) are made, and’’.

6 (e) AMENDMENT OF TARGETED JOBS CREDIT.—

7 Subparagraph (A) of section 51(i)(1) is amended by in8 serting ‘‘, or, if the taxpayer is an entity other than a

9 corporation, to any individual who owns, directly or indi10 rectly, more than 50 percent of the capital and profits in11 terests in the entity,’’ after ‘‘of the corporation’’.

12 (f) CARRYOVERS.—Subsection (c) of section 381 (re13 lating to carryovers in certain corporate acquisitions) is

14 amended by adding at the end the following new para15 graph:

16 ‘‘(26) ENTERPRISE ZONE PROVISIONS.—The

17 acquiring corporation shall take into account (to the

18 extent proper to carry out the purposes of this sec19 tion and subchapter U, and under such regulations

20 as may be prescribed by the Secretary) the items re21 quired to be taken into account for purposes of sub22 chapter U in respect of the distributor or transferor

23 corporation.’’
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1 SEC. 14304. EFFECTIVE DATE.

2 The amendments made by this part shall take effect

3 on the date of the enactment of this Act.

4 PART II—CREDIT FOR CONTRIBUTIONS TO CER5 TAIN COMMUNITY DEVELOPMENT CORPORA6 TIONS

7 SEC. 14311. CREDIT FOR CONTRIBUTIONS TO CERTAIN

8 COMMUNITY DEVELOPMENT CORPORATIONS.

9 (a) IN GENERAL.—For purposes of section 38 of the

10 Internal Revenue Code of 1986, the current year business

11 credit shall include the credit determined under this sec12 tion.

13 (b) DETERMINATION OF CREDIT.—The credit deter14 mined under this section for each taxable year in the credit

15 period with respect to any qualified CDC contribution

16 made by the taxpayer is an amount equal to 5 percent

17 of such contribution.

18 (c) CREDIT PERIOD.—For purposes of this section,

19 the credit period with respect to any qualified CDC con20 tribution is the period of 10 taxable years beginning with

21 the taxable year during which such contribution was made.

22 (d) QUALIFIED CDC CONTRIBUTION.—For purposes

23 of this section—

24 (1) IN GENERAL.—The term ‘‘qualified CDC

25 contribution’’ means any transfer of cash—
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1 (A) which is made to a selected community

2 development corporation during the 5-year pe3 riod beginning on the date such corporation was

4 selected for purposes of this section,

5 (B) the amount of which is available for

6 use by such corporation for at least 10 years,

7 (C) which is to be used by such corpora8 tion for qualified low-income assistance within

9 its operational area, and

10 (D) which is designated by such corpora11 tion for purposes of this section.

12 (2) LIMITATIONS ON AMOUNT DESIGNATED.—

13 The aggregate amount of contributions to a selected

14 community development corporation which may be

15 designated by such corporation shall not exceed

16 $4,000,000.

17 (e) SELECTED COMMUNITY DEVELOPMENT COR18 PORATIONS.—

19 (1) IN GENERAL.—For purposes of this section,

20 the term ‘‘selected community development corpora21 tion’’ means any corporation—

22 (A) which is described in section 501(c)(3)

23 of such Code and exempt from tax under sec24 tion 501(a) of such Code,
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1 (B) the principal purposes of which include

2 promoting employment of, and business oppor3 tunities for, low-income individuals who are

4 residents of the operational area, and

5 (C) which is selected by the Secretary of

6 Housing and Urban Development for purposes

7 of this section.

8 (2) ONLY 10 CORPORATIONS MAY BE SE9 LECTED.—

10 (A) IN GENERAL.—The Secretary of Hous11 ing and Urban Development may select 10 cor12 porations for purposes of this section, subject to

13 the availability of eligible corporations. Such se14 lections may be made only before July 1, 1994.

15 At least 4 of the operational areas of the cor16 porations selected must be rural areas (as de17 fined by section 1393(a)(3) of such Code).

18 (B) PRIORITY OF DESIGNATIONS.—In se19 lecting corporations for purposes of this section,

20 such Secretary shall give priority to corpora21 tions with a demonstrated record of perform22 ance in administering community development

23 programs which target at least 75 percent of

24 the jobs emanating from their investment funds

25 to low income or unemployed individuals.
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1 (3) OPERATIONAL AREAS MUST HAVE CERTAIN

2 CHARACTERISTICS.—A corporation may be selected

3 for purposes of this section only if its operational

4 area meets the following criteria:

5 (A) The area meets the size requirements

6 under section 1392(a)(3).

7 (B) The unemployment rate (as deter8 mined by the appropriate available data) is not

9 less than the national unemployment rate.

10 (C) The median family income of residents

11 of such area does not exceed 80 percent of the

12 median gross income of residents of the juris13 diction of the local government which includes

14 such area.

15 (f) QUALIFIED LOW-INCOME ASSISTANCE.—For pur16 poses of this section, the term ‘‘qualified low-income as17 sistance’’ means assistance—

18 (1) which is designed to provide employment of,

19 and business opportunities for, low-income individ20 uals who are residents of the operational area of the

21 community development corporation, and

22 (2) which is approved by the Secretary of Hous23 ing and Urban Development.
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1 Subtitle D—Other Provisions

2 PART I—DISCLOSURE PROVISIONS

3 SEC. 14401. DISCLOSURE OF RETURN INFORMATION FOR

4 ADMINISTRATION OF CERTAIN VETERANS

5 PROGRAMS.

6 (a) GENERAL RULE.—Subparagraph (D) of section

7 6103(l)(7) (relating to disclosure of return information to

8 Federal, State, and local agencies administering certain

9 programs) is amended by striking ‘‘September 30, 1997’’

10 in the second sentence following clause (viii) and inserting

11 ‘‘September 30, 1998’’.

12 (b) EFFECTIVE DATE.—The amendment made by

13 subsection (a) shall take effect on the date of the enact14 ment of this Act.

15 SEC. 14402. DISCLOSURE OF RETURN INFORMATION TO

16 CARRY OUT INCOME CONTINGENT REPAY17 MENT OF STUDENT LOANS.

18 (a) GENERAL RULE.—Subsection (l) of section 6103

19 (relating to confidentiality and disclosure of returns and

20 return information) is amended by adding at the end

21 thereof the following new paragraph:

22 ‘‘(13) DISCLOSURE OF RETURN INFORMATION

23 TO CARRY OUT INCOME CONTINGENT REPAYMENT

24 OF STUDENT LOANS.—
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1 ‘‘(A) IN GENERAL.—The Secretary may,

2 upon written request from the Secretary of

3 Education, disclose to officers and employees of

4 the Department of Education return informa5 tion with respect to a taxpayer who has received

6 an applicable student loan and whose loan re7 payment amounts are based in whole or in part

8 on the taxpayer’s income. Such return informa9 tion shall be limited to—

10 ‘‘(i) taxpayer identity information

11 with respect to such taxpayer,

12 ‘‘(ii) the filing status of such tax13 payer, and

14 ‘‘(iii) the adjusted gross income of

15 such taxpayer.

16 ‘‘(B) RESTRICTION ON USE OF DISCLOSED

17 INFORMATION.—Return information disclosed

18 under subparagraph (A) may be used by offi19 cers and employees of the Department of Edu20 cation only for the purposes of, and to the ex21 tent necessary in, establishing the appropriate

22 income contingent repayment amount for an

23 applicable student loan.
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1 ‘‘(C) APPLICABLE STUDENT LOAN.—For

2 purposes of this paragraph, the term ‘applicable

3 student loan’ means—

4 ‘‘(i) any loan made under the program

5 authorized under part D of title IV of the

6 Higher Education Act of 1965, and

7 ‘‘(ii) any loan made under part B or

8 E of title IV of the Higher Education Act

9 of 1965 which is in default and has been

10 assigned to the Department of Education.

11 ‘‘(D) TERMINATION.—This paragraph

12 shall not apply to any request made after Sep13 tember 30, 1998.’’

14 (b) CONFORMING AMENDMENTS.—

15 (1) So much of paragraph (4) of section

16 6103(m) as precedes subparagraph (B) thereof is

17 amended to read as follows:

18 ‘‘(4) INDIVIDUALS WHO OWE AN OVERPAYMENT

19 OF FEDERAL PELL GRANTS OR WHO HAVE DE20 FAULTED ON STUDENT LOANS ADMINISTERED BY

21 THE DEPARTMENT OF EDUCATION.—

22 ‘‘(A) IN GENERAL.—Upon written request

23 by the Secretary of Education, the Secretary

24 may disclose the mailing address of any

25 taxpayer—
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1 ‘‘(i) who owes an overpayment of a

2 grant awarded to such taxpayer under sub3 part 1 of part A of title IV of the Higher

4 Education Act of 1965, or

5 ‘‘(ii) who has defaulted on a loan—

6 ‘‘(I) made under part B, D, or E

7 of title IV of the Higher Education

8 Act of 1965, or

9 ‘‘(II) made pursuant to section

10 3(a)(1) of the Migration and Refugee

11 Assistance Act of 1962 to a student

12 at an institution of higher education,

13 for use only by officers, employees, or agents of

14 the Department of Education for purposes of

15 locating such taxpayer for purposes of collecting

16 such overpayment or loan .’’

17 (2) Subparagraph (B) of section 6103(m)(4) is

18 amended—

19 (A) in clause (i), by striking ‘‘under part

20 B’’ and inserting ‘‘under part B or D’’; and

21 (B) in clause (ii), by striking ‘‘under part

22 E’’ and inserting ‘‘under subpart 1 of part A,

23 or part D or E,’’;

24 (3) Section 6103(p) is amended—
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1 (A) in paragraph (3)(A), by striking ‘‘(11),

2 or (12), (m)’’ and inserting ‘‘(11), (12), or

3 (13), (m)’’;

4 (B) in paragraph (4)—

5 (i) in the matter preceding subpara6 graph (A), by striking out ‘‘(10), or (11),’’

7 and inserting ‘‘(10), (11), or (13),’’, and

8 (ii) in subparagraph (F)(ii), by strik9 ing ‘‘(11), or (12),’’ and inserting ‘‘(11),

10 (12), or (13),’’.

11 (c) EFFECTIVE DATE.—The amendments made by

12 this section shall take effect on the date of the enactment

13 of this Act.

14 (d) STUDY OF INTERNAL REVENUE SERVICE COL15 LECTION OF STUDENT LOANS.—

16 (1) GENERAL RULE.—The Secretary of the

17 Treasury, in consultation with the Secretary of Edu18 cation, shall conduct a study of the feasibility of im19 plementing a system for the repayment of Federal

20 student loans through wage withholding or other

21 means involving the Internal Revenue Service. Such

22 study shall include an examination of—

23 (A) whether the Internal Revenue Service

24 could implement such a system within its cur25 rent resources and without adversely affecting
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1 the ability of the Internal Revenue Service to

2 collect tax revenues,

3 (B) the cumulative impact on voluntary

4 compliance with the tax system of increased dis5 closure of tax return information and increased

6 Internal Revenue Service involvement in nontax

7 collection activities,

8 (C) the anticipated effect on the manage9 ment of Federal student loan collections and on

10 borrower repayment of such loans, and

11 (D) the ability of the Internal Revenue

12 Service to effectively service student loans.

13 (2) RECOMMENDATIONS.—Not later than the

14 date 6 months after the date of the enactment of

15 this Act, the Secretary of the Treasury shall submit

16 to the Congress a report on the study conducted

17 under paragraph (1) (together with such legislative

18 recommendations as such Secretary may deem advis19 able).

20 SEC. 14403. USE OF RETURN INFORMATION FOR INCOME

21 VERIFICATION UNDER CERTAIN HOUSING AS22 SISTANCE PROGRAMS.

23 (a) IN GENERAL.—Subparagraph (D) of section

24 6103(l)(7) (relating to the disclosure of return information
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1 to Federal, State, and local agencies administering certain

2 programs) is amended—

3 (1) in clause (vii), by striking ‘‘and’’ at the end;

4 (2) in clause (viii), by striking the period at the

5 end and inserting ‘‘; and’’;

6 (3) by inserting after clause (viii) the following

7 new clause:

8 ‘‘(ix) any housing assistance program adminis9 tered by the Department of Housing and Urban De10 velopment that involves initial and periodic review of

11 an applicant’s or participant’s income, except that

12 return information may be disclosed under this

13 clause only on written request by the Secretary of

14 Housing and Urban Development and only for use

15 by officers and employees of the Department of

16 Housing and Urban Development with respect to ap17 plicants for and participants in such programs.’’;

18 and

19 (4) by adding at the end thereof the following:

20 ‘‘Clause (ix) shall not apply after September 30,

21 1998.’’

22 (b) CONFORMING AMENDMENT.—The heading of

23 paragraph (7) of section 6103(l) is amended by inserting

24 after ‘‘CODE’’ the following: ‘‘, OR CERTAIN HOUSING AS25 SISTANCE PROGRAMS’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall take effect on the date of the enactment

3 of this Act.

4 (d) STUDY.—The Secretary of the Treasury or his

5 delegate, in consultation with the Secretary of Housing

6 and Urban Development, shall conduct a study on—

7 (1) whether the information provided under sec8 tion 6103(l)(7)(D)(ix) of the Internal Revenue Code

9 of 1986 is being used effectively by the Department

10 of Housing and Urban Development,

11 (2) such Department’s compliance with the re12 quirements of section 6103(p) of such Code, and

13 (3) the impact on the privacy rights of appli14 cants for and participants in housing assistance pro15 grams administered by the Department of Housing

16 and Urban Development.

17 The report of such study shall be submitted before Janu18 ary 1, 1998, to the Congress.

19 PART II—USER FEE PROVISIONS

20 SEC. 14411. FEES FOR APPLICATIONS FOR ALCOHOL LA21 BELING AND FORMULA REVIEWS.

22 (a) IN GENERAL.—The Secretary of the Treasury or

23 his delegate (hereinafter in this section referred to as the

24 ‘Secretary’) shall establish a program requiring the pay25 ment of user fees for—
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1 (1) requests for each certificate of alcohol label

2 approval required under the Federal Alcohol Admin3 istration Act (27 U.S.C. 201 et seq.) and for each

4 request for exemption from such requirement, and

5 (2) requests for each formula review, and re6 quests for each statement of process (including lab7 oratory tests and analyses), under such Act or under

8 chapter 51 of the Internal Revenue Code of 1986.

9 (b) PROGRAM CRITERIA.—

10 (1) IN GENERAL.—The fees charged under the

11 program required by subsection (a) shall be deter12 mined such that the Secretary estimates that the ag13 gregate of such fees received during any fiscal year

14 will be $5,000,000.

15 (2) MINIMUM FEES.—The fee charged under

16 the program required by subsection (a) shall not be

17 less than—

18 (A) $50 for each request referred to in

19 subsection (a)(1), and

20 (B) $250 for each request referred to in

21 subsection (a)(2).

22 (c) APPLICATION OF SECTION.—Subsection (a) shall

23 apply to requests made on or after the 90th day after the

24 date of the enactment of this Act.
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1 (d) DEPOSIT AND CREDIT AS OFFSETTING RE2 CEIPTS.—The amounts collected by the Secretary under

3 the program required by subsection (a) (to the extent such

4 amounts do not exceed $5,000,000) shall be deposited into

5 the Treasury as offsetting receipts and ascribed to the al6 cohol compliance program of the Bureau of Alcohol, To7 bacco, and Firearms.

8 SEC. 14412. USE OF HARBOR MAINTENANCE TRUST FUND

9 AMOUNTS FOR ADMINISTRATIVE EXPENSES.

10 (a) IN GENERAL.—Paragraph (3) of section 9505(c)

11 (relating to expenditures from Harbor Maintenance Trust

12 Fund) is amended to read as follows:

13 ‘‘(3) for the payment of all expenses of adminis14 tration incurred by the Department of the Treasury

15 in administering subchapter A of chapter 36 (relat16 ing to harbor maintenance tax), but not in excess of

17 $5,000,000 for any fiscal year.’’

18 (b) EFFECTIVE DATE.—The amendment made by

19 subsection (a) shall apply to fiscal years beginning after

20 the date of the enactment of this Act.

21 SEC. 14413. INCREASE IN TAX ON FUEL USED IN COMMER22 CIAL TRANSPORTATION ON INLAND WATER23 WAYS.

24 (a) IN GENERAL.—The table contained in section

25 4042(a)(2)(A) is amended to read as follows:
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‘‘If the use occurs during: The tax per gallon is:

1994 ............................................................... 24 cents

1995 ............................................................... 40 cents

1996 ............................................................... 55 cents

1997 or thereafter ......................................... 70 cents.’’

1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall take effect on January 1, 1994.

3 PART III—PUBLIC DEBT LIMIT

4 SEC. 14421. INCREASE IN PUBLIC DEBT LIMIT.

5 (a) GENERAL RULE.—Subsection (b) of section 3101

6 of title 31, United States Code, is amended by striking

7 out the dollar limitation contained in such subsection and

8 inserting in lieu thereof ‘‘$4,900,000,000,000’’.

9 (b) REPEAL OF TEMPORARY INCREASE.—Effective

10 on and after the date of the enactment of this Act, section

11 1 of Public Law 103–12 is hereby repealed.

12 PART IV—VACCINE PROVISIONS

13 SEC. 14431. EXCISE TAX ON CERTAIN VACCINES MADE PER14 MANENT.

15 (a) TAX.—Subsection (c) of section 4131 (relating to

16 tax on certain vaccines) is amended to read as follows:

17 ‘‘(c) APPLICATION OF SECTION.—The tax imposed by

18 this section shall apply—

19 ‘‘(1) after December 31, 1987, and before Jan20 uary 1, 1993, and

21 ‘‘(2) during periods after the date of the enact22 ment of this subsection.’’
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1 (b) TRUST FUND.—Paragraph (1) of section 9510(c)

2 (relating to expenditures from Vaccine Injury Compensa3 tion Trust Fund) is amended by striking ‘‘and before Oc4 tober 1, 1992,’’.

5 (c) STUDY.—The Secretary of the Treasury, in con6 sultation with the Secretary of Health and Human Serv7 ices, shall conduct a study of—

8 (1) the estimated amount that will be paid from

9 the Vaccine Injury Compensation Trust Fund with

10 respect to vaccines administered after September 30,

11 1988,

12 (2) the rates of vaccine-related injury or death

13 with respect to the various types of such vaccines,

14 (3) new vaccines and immunization practices

15 being developed or used for which amounts may be

16 paid from such Trust Fund,

17 (4) whether additional vaccines should be in18 cluded in the vaccine injury compensation program,

19 and

20 (5) the appropriate treatment of vaccines pro21 duced by State governmental entities.

22 The report of such study shall be submitted not later than

23 1 year after the date of the enactment of this Act, to the

24 Committee on Ways and Means of the House of Rep25 resentatives and the Committee on Finance of the Senate.
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1 (d) FLOOR STOCKS TAX.—

2 (1) IMPOSITION OF TAX.—On any taxable

3 vaccine—

4 (A) which was sold by the manufacturer,

5 producer, or importer before the date of the en6 actment of this Act,

7 (B) on which no tax was imposed by sec8 tion 4131 of the Internal Revenue Code of 1986

9 (or, if such tax was imposed, was credited or re10 funded), and

11 (C) which is held on such date by any per12 son for sale or use,

13 there is hereby imposed a tax in the amount deter14 mined under section 4131(b) of such Code.

15 (2) LIABILITY FOR TAX AND METHOD OF PAY16 MENT.—

17 (A) LIABILITY FOR TAX.—The person

18 holding any taxable vaccine to which the tax

19 imposed by paragraph (1) applies shall be liable

20 for such tax.

21 (B) METHOD OF PAYMENT.—The tax im22 posed by paragraph (1) shall be paid in such

23 manner as the Secretary shall prescribe by reg24 ulations.
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1 (C) TIME FOR PAYMENT.—The tax im2 posed by paragraph (1) shall be paid on or be3 fore the last day of the 6th month beginning

4 after the date of the enactment of this Act.

5 (3) DEFINITIONS.—For purposes of this sub6 section, terms used in this subsection which are also

7 used in section 4131 of such Code shall have the re8 spective meanings such terms have in such section.

9 (4) OTHER LAWS APPLICABLE.—All provisions

10 of law, including penalties, applicable with respect to

11 the taxes imposed by section 4131 of such Code

12 shall, insofar as applicable and not inconsistent with

13 the provisions of this subsection, apply to the floor

14 stocks taxes imposed by paragraph (1), to the same

15 extent as if such taxes were imposed by such section

16 4131.

17 SEC. 14432. CONTINUATION COVERAGE UNDER GROUP

18 HEALTH PLANS OF COSTS OF PEDIATRIC

19 VACCINES.

20 (a) IN GENERAL.—Paragraph (1) of section

21 4980B(f) is amended by inserting ‘‘the coverage of the

22 costs of pediatric vaccines (as defined under section 2162

23 of the Public Health Service Act) is not reduced below

24 the coverage provided by the plan as of May 1, 1993, and

25 only if’’ after ‘‘only if’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply with respect to plan years begin3 ning after the date of the enactment of this Act.

4 SEC. 14433. CHILDHOOD IMMUNIZATION TRUST FUND.

5 (a) IN GENERAL.—Subchapter A of chapter 98 (re6 lating to trust fund code) is amended by adding at the

7 end thereof the following new section:

8 ‘‘SEC. 9512. CHILDHOOD IMMUNIZATION TRUST FUND.

9 ‘‘(a) CREATION OF TRUST FUND.—There is estab10 lished in the Treasury of the United States a trust fund

11 to be known as the ‘Childhood Immunization Trust Fund’,

12 consisting of such amounts as may be appropriated or

13 credited to such Trust Fund as provided in this section

14 or section 9602(b).

15 ‘‘(b) TRANSFERS TO TRUST FUND.—There are here16 by appropriated to the Childhood Immunization Trust

17 Fund amounts equivalent to the taxes received in the

18 Treasury under any tax hereafter specified by law for pur19 poses of this subsection.

20 ‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts

21 in the Childhood Immunization Trust Fund shall be avail22 able, as provided in appropriation Acts, only for purposes

23 of making expenditures to carry out part A of subtitle 3

24 of title XXI of the Public Health Service Act.’’
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1 (b) CLERICAL AMENDMENT.—The table of sections

2 for such subchapter A is amended by adding at the end

3 thereof the following new item:

‘‘Sec. 9512. Childhood Immunization Trust Fund.’’

4 TITLE XV—BUDGET PROCESS

5 SEC. 15001. PURPOSE.

6 The purposes of this title are to extend through fiscal

7 year 1998 the enforcement of budget legislation by discre8 tionary caps and the pay-as-you-go requirement; to make

9 simplifications and technical corrections to those methods

10 of budget enforcement; to conform congressional budget

11 enforcement to those methods of budget enforcement to

12 the extent possible; and to make permanent the require13 ment for 5-year, enforceable budget resolutions.

14 Subtitle A—Budget Enforcement

15 Act of 1993

16 SEC. 15100. SHORT TITLE; REFERENCES.

17 (a) SHORT TITLE.—This subtitle may be cited as the

18 ‘‘Budget Enforcement Act of 1993’’.

19 (b) REFERENCES.—Except as otherwise expressly

20 provided, whenever in this subtitle an amendment or re21 peal is expressed in terms of an amendment to, or repeal

22 of, a section or other provision, the reference shall be con23 sidered to be made to a section or other provision of the

24 Balanced Budget and Emergency Deficit Control Act of

25 1985.
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1 SEC. 15101. DEFINITIONS.

2 Section 250 is amended as follows:

3 (1) Strike ‘‘; STATEMENT OF BUDGET EN4 FORCEMENT THROUGH SEQUESTRATION;’’ in

5 the section heading and insert ‘‘AND’’.

6 (2) Strike subsection (a) and insert the follow7 ing new subsection:

8 ‘‘(a) TABLE OF CONTENTS.—

‘‘Sec. 250. Table of contents and definitions.

‘‘Sec. 251. Discretionary limits.

‘‘Sec. 252. Pay-as-you-go.

‘‘Sec. 253. Enforcing deficit targets.

‘‘Sec. 254. Reports and orders.

‘‘Sec. 255. Exempt programs and activities.

‘‘Sec. 256. General and special sequestration rules.

‘‘Sec. 257. The baseline.

‘‘Sec. 258. Suspension in the event of war or low growth.

‘‘Sec. 258A. Modification of Presidential order.

‘‘Sec. 258B. Alternative defense sequestration.

‘‘Sec. 258C. Special reconciliation process.’’.

9 (3) Strike subsections (b) and (c) and insert

10 after subsection (a) the following new subsection:

11 ‘‘(b) DEFINITIONS AND TREATMENTS.—As used in

12 this Act:

13 ‘‘(1) The terms ‘budget authority’, ‘new budget

14 authority’, ‘outlays’, and ‘deficit’ have the meanings

15 given to such terms in section 3 of the Congressional

16 Budget and Impoundment Control Act of 1974 and

17 the term ‘receipts’ shall be treated as a synonym for

18 the term ‘revenues’ as it is used in that Act.

19 ‘‘(2) The terms ‘sequester’ and ‘sequestration’

20 refer to or mean the cancellation of budget authority
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1 provided by discretionary appropriations or direct

2 spending law.

3 ‘‘(3) The term ‘breach’ means, for any fiscal

4 year, the amount (if any) by which the baseline level

5 of discretionary new budget authority or outlays for

6 that year exceeds the discretionary limit on new

7 budget authority or outlays for that year.

8 ‘‘(4) The term ‘baseline’ or ‘current policy base9 line’ means the projection (described in section 257)

10 of current-year levels of new budget authority, out11 lays, receipts, and the surplus or deficit into the

12 budget year and the outyears.

13 ‘‘(5) The term ‘discretionary limits’ refers to

14 the limits on discretionary new budget authority and

15 outlays set forth in section 601 of the Congressional

16 Budget Act of 1974, as adjusted under section

17 251(b).

18 ‘‘(6) The term ‘discretionary’ refers to pro19 grams (except direct-spending programs) for which

20 new budget authority is provided in appropriation

21 Acts. If an appropriation Act alters the level of di22 rect spending, that effect shall be treated as a dis23 cretionary appropriation.

24 ‘‘(7) The term ‘direct spending’ means budget

25 authority provided by a law other than an appropria-
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1 tion Act or by a law that determines amounts need2 ed to fund mandatory appropriations (including the

3 food stamp program). If a law other than an appro4 priation Act alters the level of discretionary appro5 priations, that effect shall be treated as direct

6 spending.

7 ‘‘(8) As used in this Act, all references to man8 datory appropriations shall include the list of man9 datory appropriations included in the joint explana10 tory statement of managers accompanying the con11 ference report on the Omnibus Budget Reconcili12 ation Act of 1993.

13 ‘‘(9) The term ‘current’ means, with respect to

14 OMB estimates included with a budget submission

15 under section 1105(a) of title 31, United States

16 Code, the estimates consistent with the economic

17 and technical assumptions underlying that budget

18 and with respect to estimates that are not included

19 with a budget submission, estimates consistent with

20 the economic and technical assumptions underlying

21 the most recently submitted President’s budget, ex22 cept to the extent that clerical errors are corrected

23 in the midsession review as required by section 1106

24 of title 31, United States Code.
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1 ‘‘(10) The term ‘real economic growth’, with re2 spect to any fiscal year, means the growth in the

3 gross domestic product during such fiscal year, ad4 justed for inflation, consistent with Department of

5 Commerce definitions.

6 ‘‘(11) The term ‘account’ means an item for

7 which appropriations are made in any appropriation

8 Act and, for items not provided for in appropriation

9 Acts, an item for which there is a designated budget

10 account identification code number in the Presi11 dent’s budget.

12 ‘‘(12) The term ‘budget year’ means, with re13 spect to a session of Congress, the fiscal year of the

14 Government that starts on October 1 of the calendar

15 year in which that session begins.

16 ‘‘(13) The term ‘current year’ means, with re17 spect to a budget year, the fiscal year that imme18 diately precedes that budget year.

19 ‘‘(14) The term ‘outyear’ means, with respect

20 to a budget year, any of the fiscal years that follow

21 the budget year, through fiscal year 1998 in the case

22 of discretionary programs and through 2002 in the

23 case of direct spending and receipts.

24 ‘‘(15) The term ‘OMB’ means the Director of

25 the Office of Management and Budget.
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1 ‘‘(16) The term ‘CBO’ means the Director of

2 the Congressional Budget Office.

3 ‘‘(17) The term ‘deposit insurance’ refers to the

4 expenses of the Federal Deposit Insurance Corpora5 tion and the funds it incorporates, the Resolution

6 Trust Corporation, the National Credit Union Ad7 ministration and the funds it incorporates, the Of8 fice of Thrift Supervision, the Comptroller of the

9 Currency Assessment Fund, and the RTC Office of

10 Inspector General.

11 ‘‘(18) The term ‘composite discretionary outlay

12 rate’ means the percent of new budget authority

13 that is converted to outlays in the fiscal year for

14 which the budget authority is provided and subse15 quent fiscal years, as follows: 60 percent for the first

16 year, 25 percent for the second year, 7 percent for

17 the third year, and 3 percent for the fourth year.

18 ‘‘(19) The term ‘asset sale’ means the sale by

19 the Government to the public of a nonloan asset.

20 ‘‘(20) Notwithstanding any other provision of

21 law, the receipts and disbursements of the Hospital

22 Insurance Trust Fund shall be included in all cal23 culations required by this Act.’’.

24 SEC. 15102. DISCRETIONARY LIMITS.

25 Section 251 is amended to read as follows:
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1 ‘‘SEC. 251. DISCRETIONARY LIMITS.

2 ‘‘(a) INITIAL AMOUNTS.—Subject to adjustments

3 under subsection (b), the discretionary limits are as set

4 forth in section 601 of the Congressional Budget Act of

5 1974.

6 ‘‘(b) ADJUSTMENTS TO LIMITS.—Whenever appro7 priate, adjustments to the discretionary limits (as they

8 exist at the time of the adjustment) for one or more fiscal

9 years shall be made as follows:

10 ‘‘(1) CHANGES IN ACCOUNTING CONCEPTS.—

11 For any fiscal year, the discretionary limits shall be

12 adjusted to reflect any change in budget accounting

13 concepts (including scorekeeping conventions, budget

14 classifications, and definitions), which change shall

15 equal the baseline levels of new budget authority and

16 outlays using up-to-date concepts minus those levels

17 using the concepts in effect before the change.

18 ‘‘(2) CHANGES IN INFLATION.—(A) For the

19 budget year and each outyear, the discretionary limit

20 on new budget authority for each such year shall be

21 multiplied by the inflation adjustment factor (for the

22 fiscal year immediately preceding the current year)

23 calculated under subparagraph (B). The discre24 tionary limit on outlays for each such year shall be

25 adjusted by applying the composite discretionary
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1 outlay rate to the change in the limits on new budg2 et authority under the preceding sentence.

3 ‘‘(B) The inflation adjustment factor shall be

4 the ratio of (i) the level of year-over-year inflation

5 measured for the fiscal year immediately preceding

6 the current year, and (ii) the applicable estimated

7 level for that year set forth below:

8 ‘‘For 1993, 1.030.

9 ‘‘For 1994, 1.027.

10 ‘‘For 1995, 1.026.

11 ‘‘For 1996, 1.025.

12 Inflation shall be measured by the average of the es13 timated fixed-weight gross domestic product price

14 index for a fiscal year divided by the average index

15 for the prior fiscal year.

16 ‘‘(3) IMF FUNDING.—If for any fiscal year an

17 appropriation is enacted to provide to the Inter18 national Monetary Fund the dollar equivalent, in

19 terms of Special Drawing Rights, of the increase in

20 the United States quota, the limit on discretionary

21 new budget authority shall be increased by the

22 amount of that appropriation.

23 ‘‘(4) IRS FUNDING.—To the extent discre24 tionary appropriations are enacted for fiscal year

25 1994 or 1995 that provide new budget authority or
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1 result in outlays greater than the amount in the

2 CBO baseline of June 1990 for the IRS compliance

3 initiative, the discretionary limits shall be adjusted

4 upward by those amounts, but not to exceed

5 $187,000,000 in new budget authority and

6 $183,000,000 in outlays for fiscal year 1994 and

7 $188,000,000 in new budget authority and outlays

8 for fiscal year 1995.

9 ‘‘(5) NET GUARANTEE COSTS.—The discre10 tionary limits for each fiscal year shall be adjusted

11 by the net costs for that year of the appropriation

12 made under section 601 of Public Law 102–391.

13 ‘‘(6) EXPIRING HOUSING CONTRACTS.—For any

14 fiscal year, the adjustment shall be the amounts by

15 which the costs of renewing expiring multiyear sub16 sidized housing contracts or providing contracts to

17 replace units lost due to prepayments differ from the

18 amounts in OMB’s baseline of February 1993.

19 ‘‘(7) EMERGENCIES.—If for any fiscal year dis20 cretionary appropriations are enacted that are des21 ignated as emergency requirements by statute, the

22 adjustment shall be the amount of those appropria23 tions that the President also designates in writing as

24 emergency requirements and the outlays estimated

25 to flow therefrom in each fiscal year. If any amount
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1 previously designated as an emergency requirement

2 is rescinded, the adjustment shall be the amount of

3 that rescission and the outlays estimated to be saved

4 thereby in each fiscal year.

5 ‘‘(8) TECHNICAL ESTIMATING DIFFERENCES.—

6 ‘‘(A) If for any fiscal year the amount of

7 discretionary new budget authority provided in

8 appropriation Acts exceeds the discretionary

9 limit on new budget authority due to technical

10 estimates made by OMB, the adjustment is the

amount of the excess, but not to exceed 1 11 ⁄10 of

12 1 percent of that limit.

13 ‘‘(B) If for any fiscal year discretionary

14 outlays exceed the discretionary limit on outlays

15 but discretionary new budget authority does not

16 exceed its limit (after application of a seques17 tration under subsection (d)(1)(A), if nec18 essary), the adjustment in outlays is the

19 amount of that excess; but the adjustment in

20 any fiscal year shall not exceed the lesser of (i)

21 $6,500,000,000 less the outlay adjustments

22 made under section 251(b)(2)(E) of the Bal23 anced Budget and Emergency Deficit Control

24 Act of 1985 as in effect immediately before the

25 enactment of this Act (or that would have been
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1 made under that subparagraph if that Act had

2 applied through fiscal year 1998, with adjust3 ments in new budget authority occurring

4 through fiscal year 1995 and in outlays through

5 fiscal year 1998), or (ii) 1 percent of the discre6 tionary limit on outlays for that year.

7 ‘‘(c) DISCRETIONARY SCORECARD: 1994–1998.—

8 ‘‘(1) ESTABLISHMENT OF SCORECARD.—Start9 ing for budget year 1994 and ending for fiscal year

10 1998, there shall be a scorecard upon which shall be

11 entered the amount of discretionary new budget au12 thority and outlays enacted into law for the budget

13 year and the current year (except current year

14 1993). Entries shall be made separately for each fis15 cal year. Discretionary new budget authority and

16 outlays for the budget year resulting from the enact17 ment of a law in a previous session shall be attrib18 uted to the corresponding law enacted in the current

19 session. Reductions in new budget authority and

20 outlays through the imposition of a sequestration

21 under this section shall also be entered upon the

22 scorecard. Amounts shall be entered on the score23 card within 5 days after the enactment of each such

24 law or the imposition of any sequestration, shall

25 equal the amounts contained in the bill cost reports
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1 under section 254(e), and may not thereafter be al2 tered except to correct clerical errors or errors in the

3 application of this Act. The entry for each such law

4 or sequestration shall be displayed separately.

5 ‘‘(2) LOOKBACK.—(A) If after June 30 any dis6 cretionary appropriation is enacted that would

7 breach the discretionary limit on new budget author8 ity or outlays for the current year, then that breach

9 shall be entered on the scorecard as a cost under the

10 column for the budget year.

11 ‘‘(B) If any discretionary appropriation is en12 acted after June 30, 1993, that would have breached

13 a discretionary spending limit for fiscal year 1993

14 (under this Act and title VI of the Congressional

15 Budget Act of 1974 as in effect immediately before

16 the date of enactment of the Budget Enforcement

17 Act of 1993), then that breach shall be entered on

18 the scorecard as a cost under the column for the

19 budget year.

20 ‘‘(d) ENFORCING DISCRETIONARY LIMITS.—

21 ‘‘(1) SEQUESTRATION.—Within 15 days after

22 Congress adjourns to end a session there shall be a

23 sequestration to reduce the amount of nonexempt

24 discretionary budget authority in the current policy

25 baseline for the budget year of that session by—
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1 ‘‘(A) the amount needed to eliminate a

2 breach of the discretionary limit on new budget

3 authority for that year, and

4 ‘‘(B) if any breach of the discretionary

5 limit on outlays remains, the amount needed to

6 eliminate that breach for that year,

7 as measured under subsection (c), unless the total

8 amount under subparagraphs (A) and (B) is less

9 than $50,000,000.

10 ‘‘(2) UNIFORM REDUCTION.—Each nonexempt

11 account (or activity within an account) shall be re12 duced by a dollar amount calculated by multiplying

13 the baseline level of nonexempt gross discretionary

14 budget authority for that account or activity by the

15 uniform percent necessary to reduce net new budget

16 authority by the amount in paragraph (1), except

17 that the health programs set forth in section 256(e)

18 shall not be reduced more than 2 percent and the

19 uniform percent applicable to all other programs

20 shall be increased (if necessary) to a level sufficient

21 to achieve the amount in paragraph (1).

22 ‘‘(3) MILITARY PERSONNEL.—If the President

23 uses the authority under section 255(f) to exempt

24 any amounts appropriated for military personnel

25 from sequestration, all remaining nonexempt discre-
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1 tionary budget authority within subfunction 051

2 shall be further reduced by the uniform percent

3 needed to fully offset the reduction in the amount

4 sequestered resulting from that exemption.

5 ‘‘(4) PART-YEAR APPROPRIATIONS.—If, on the

6 date of a sequestration under paragraph (1), there

7 is in effect an Act making or continuing appropria8 tions for part of a fiscal year for any budget ac9 count, then the dollar reduction calculated for that

10 account under paragraphs (2) and (3) shall be ap11 plied to—

12 ‘‘(A) the annualized amount otherwise

13 available by law in that account under that or

14 a subsequent part-year appropriation; and

15 ‘‘(B) when a full-year appropriation for

16 that account is enacted, from the amount other17 wise provided by that appropriation.

18 ‘‘(e) WITHIN-SESSION ENFORCEMENT.—If, after

19 Congress adjourns to end the session for a budget year

20 but before July 1 of that fiscal year, an appropriation for

21 that fiscal year is enacted that causes a discretionary limit

22 to be breached, within 15 days after there shall be a se23 questration to eliminate that breach, following the rules

24 and procedures set forth in subsection (d).’’.
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1 SEC. 15103. PAY-AS-YOU-GO.

2 Section 252 is amended to read as follows:

3 ‘‘SEC. 252. PAY-AS-YOU-GO.

4 ‘‘(a) PAY-AS-YOU-GO SCORECARD.—

5 ‘‘(1) ESTABLISHMENT OF SCORECARD: 1994–

6 2002.—There shall be a scorecard for each fiscal year

7 through 2002 upon which shall be entered the 5-

8 year estimated increase or decrease in the deficit

9 (relative to the current policy baseline described in

10 section 257) for the budget year and each outyear,

11 as calculated under this subsection, resulting from—

12 ‘‘(A) the enactment, after the date of en13 actment of this Act and before October 1, 1998,

14 of any direct spending or receipts law, or

15 ‘‘(B) the change in the baseline from the

16 application of section 257(b)(3), which relates

17 to certain expiring provisions of law and to vet18 erans’ compensation.

19 Entries under the preceding sentence shall exclude

20 resulting debt service changes and any incidental

21 changes in intragovernmental receipts of Federal re22 tirement trust funds. Amounts shall be entered on

23 the scorecard within 5 days after the enactment of

24 each such law and may not thereafter be altered ex25 cept to correct clerical errors or errors in the appli-
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1 cation of this Act. Each entry shall be displayed sep2 arately.

3 ‘‘(2) ROLLING 5-YEAR SCOREKEEPING.—

4 Amounts entered on the scorecard established by

5 paragraph (1) shall equal the amounts contained in

6 the bill cost reports under section 254(e) for the

7 budget year and the 4 subsequent fiscal years (ex8 cept for budget years after 1998), plus any amount

9 required by the lookback provision of paragraph (3).

10 ‘‘(3) LOOKBACK.—If in any session a law is en11 acted affecting the current-year level of direct spend12 ing or receipts, the amount of that current-year ef13 fect shall be entered on the scorecard under the col14 umn for the budget year (except for budget years

15 after 1998).

16 ‘‘(4) EMERGENCIES.—If after the enactment of

17 this Act a provision of direct spending or receipts

18 legislation is enacted that is designated as an emer19 gency requirement by statute and that the President

20 also designates, in writing, as an emergency require21 ment, then no entries related to that provision shall

22 be made on the scorecard.

23 ‘‘(5) DEPOSIT INSURANCE.—Provisions of law

24 that provide full funding of, and continuation of, the

25 deposit insurance commitment in effect on Septem-
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1 ber 30, 1993, shall not have their estimated effects

2 entered on the scorecard.

3 ‘‘(b) ENFORCING PAY-AS-YOU-GO.—

4 ‘‘(1) SEQUESTRATION.—Within 15 calendar

5 days after Congress adjourns to end a session, there

6 shall be a sequestration to offset the amount of any

7 net deficit increase recorded on the pay-as-you-go

8 scorecard under subsection (a) for the budget year,

9 unless that amount is less than $50,000,000.

10 ‘‘(2) ELIMINATING A DEFICIT INCREASE.—The

11 amount required to be sequestered in a fiscal year

12 under paragraph (1) shall be obtained from

13 nonexempt direct spending accounts (which are as14 sumed to be at the level in the baseline) by seques15 tration actions taken in the following order:

16 ‘‘(A) The maximum reductions in auto17 matic spending increases permissible under sec18 tion 256(b) shall be made.

19 ‘‘(B) If additional reductions in direct

20 spending accounts are required to be made, the

21 maximum reductions permissible under section

22 256(c) (foster care and adoption assistance)

23 shall be made.

24 ‘‘(C) If additional reductions in direct

25 spending accounts are required to be made,
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1 each remaining nonexempt direct spending ac2 count shall be reduced by the uniform percent

3 necessary to make the reductions in direct

4 spending required by paragraph (1); except that

5 the medicare programs specified in section

6 256(d) shall not be reduced by more than 4

7 percent and the uniform percent applicable to

8 all other direct spending programs under this

9 subparagraph shall be increased (if necessary)

10 to a level sufficient to achieve the required re11 duction in direct spending.

12 ‘‘(3) UNIFORM PERCENT.—The uniform percent

13 under paragraph (2) shall be calculated so that the

14 total amount estimated to be saved in all fiscal years

15 by the budget-year or other sequestrations under

16 section 256 shall equal the amount required to be

17 saved under paragraph (1). The total amount esti18 mated to be saved shall exclude resulting debt serv19 ice changes and any incidental changes in

20 intragovernmental receipts of Federal retirement

21 trust funds.’’.

22 SEC. 15104. CONFORMING AMENDMENTS TO SECTION 253.

23 Section 253 is amended as follows:

24 (1) In subsection (a), strike ‘‘(other’’ and all

25 that follows through ‘‘252,’’.
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1 (2) In subsection (b)(2), strike ‘‘252(e)’’ and

2 insert ‘‘252(a)(4)’’.

3 (3) In subsection (d), strike ‘‘251(a)(3)’’ and

4 insert ‘‘251(d)(3)’’.

5 (4) In subsection (e)(1), strike ‘‘256(a)’’ and

6 insert ‘‘256(b)’’.

7 (5) In subsection (e)(2), strike ‘‘sections 256(b)

8 (guaranteed student loans) and’’ and insert ‘‘sec9 tion’’.

10 (6) In subsection (e)(3), strike ‘‘(A)’’, strike

11 subparagraph (B), and redesignate clauses (i) and

12 (ii) as subparagraphs (A) and (B).

13 (7) In subsection (g)(1)(B), strike the last sen14 tence.

15 (8) In subsection (g)(2)(B)(i), strike ‘‘252(b)’’

16 and insert ‘‘254(e)’’.

17 SEC. 15105. REPORTS AND ORDERS.

18 Section 254 is amended to read as follows:

19 ‘‘SEC. 254. REPORTS AND ORDERS.

20 ‘‘(a) TIMETABLE.—The timetable with respect to this

21 part for any budget year is as follows:

‘‘Date: Action to be completed:

5 days before the President’s

budget submission.

CBO sequestration preview report.

The President’s budget submission OMB sequestration preview report.

August 10 ...................................... Notification regarding military personnel.

Weekly, starting the 2d Wednesday in September.Scorecard reports.

10 days after end of session .......... CBO final sequestration report.
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‘‘Date: Action to be completed:

15 days after end of session .......... OMB final sequestration report; Presidential order.

30 days later .................................. GAO compliance report.

1 ‘‘(b) SUBMISSION AND AVAILABILITY OF REPORTS

2 AND ORDERS.—Each report or order required by this sec3 tion (except bill cost reports under subsection (e) and

4 scorecard reports under subsection (f)) shall be submitted,

5 in the case of CBO, to the House of Representatives, the

6 Senate and OMB and, in the case of OMB, to the House

7 of Representatives, the Senate, and the President on the

8 day it is issued. On the following day a notice of the report

9 shall be printed in the Federal Register.

10 ‘‘(c) SEQUESTRATION PREVIEW REPORTS.—

11 ‘‘(1) REPORTING REQUIREMENT.—On the dates

12 specified in subsection (a), OMB and CBO shall

13 issue a preview report regarding discretionary, pay14 as-you-go, and deficit sequestration based on laws

15 enacted through those dates.

16 ‘‘(2) DISCRETIONARY SEQUESTRATION RE17 PORT.—The preview reports shall set forth estimates

18 for the current year and each subsequent year

19 through 1998 of the applicable discretionary limits

20 and an explanation of any adjustments in such lim21 its under section 251. It shall also set forth for the

22 current year and the budget year the estimated dis23 cretionary new budget authority and outlays and the
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1 amounts remaining under the applicable discre2 tionary limits.

3 ‘‘(3) PAY-AS-YOU-GO SEQUESTRATION RE4 PORTS.—The preview reports shall set forth for the

5 budget year and each outyear estimates for each of

6 the following:

7 ‘‘(A) The amount of net deficit increase or

8 decrease, if any, calculated under subsection

9 252.

10 ‘‘(B) The pay-as-you-go scorecard as of

11 that date, itemizing the entries that add to the

12 net deficit increase or decrease shown under

13 subparagraph (A).

14 ‘‘(C) The sequestration percentage or (if

15 the required sequestration percentage is greater

16 than the maximum allowable percentage for

17 medicare) percentages necessary to eliminate a

18 deficit increase under section 252 at the end of

19 the budget-year session.

20 ‘‘(4) DEFICIT SEQUESTRATION REPORTS.—The

21 preview reports shall set forth for the budget year

22 estimates for each of the following:

23 ‘‘(A) The maximum deficit amount, the es24 timated deficit calculated under section 253(b),

25 the excess deficit, and the margin.
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1 ‘‘(B) The amount of reductions required

2 under section 252, the excess deficit remaining

3 after those reductions have been made, and the

4 amount of reductions required under section

5 253 from defense accounts and from

6 nondefense accounts.

7 ‘‘(C) The sequestration percentage nec8 essary to achieve the required reduction in de9 fense accounts under section 253(d).

10 ‘‘(D) The reductions required under sec11 tions 253(e)(1) and 253(e)(2).

12 ‘‘(E) The sequestration percentage nec13 essary to achieve the required reduction in

14 nondefense accounts under section 253(e)(3).

15 The CBO report need not set forth the items other

16 than the maximum deficit amount for fiscal year

17 1992, 1993, or any fiscal year for which the Presi18 dent notifies the House of Representatives and the

19 Senate that he will adjust the maximum deficit

20 amount under the option under section

21 253(g)(1)(B).

22 ‘‘(5) EXPLANATION OF DIFFERENCES.—The

23 OMB reports shall thoroughly explain the dif24 ferences between OMB and CBO estimates for each

25 item set forth in this subsection.
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1 ‘‘(d) NOTIFICATION REGARDING MILITARY PERSON2 NEL.—On or before the date specified in subsection (a),

3 the President shall notify the Congress of the manner in

4 which he intends to exercise flexibility with respect to mili5 tary personnel accounts under section 255(f).

6 ‘‘(e) BILL COST REPORTS.—As soon as practicable

7 after Congress completes action on any discretionary ap8 propriation or legislation affecting direct spending or re9 ceipts, and after consultation with the committees on the

10 Budget of the House and Senate, CBO shall provide OMB

11 with an estimate of the entry or entries to be made on

12 the appropriate scorecard as a result of that legislation.

13 Within 5 calendar days after the enactment of any such

14 legislation (enacted after the date of enactment of this

15 Act) OMB shall transmit a report to the House of Rep16 resentatives and the Senate containing the CBO estimate

17 of the scorecard entry or entries for that legislation,

18 OMB’s estimate for the same legislation, and a thorough

19 explanation of any difference between the 2 estimates.

20 CBO and OMB shall prepare estimates under this sub21 section in conformance with the baseline rules under sub22 section 257, the scorecard rules under section 251 or 252

23 as applicable, and scorekeeping guidelines determined

24 after consultation among the House and Senate Commit25 tees on the Budget, CBO, and OMB.
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•HR 2264 EH

1 ‘‘(f) SCORECARD REPORTS.—On or before the date

2 specified in subsection (a) and weekly thereafter through

3 the adjournment of Congress, OMB shall transmit a re4 port to the House of Representatives and the Senate con5 taining the discretionary and the pay-as-you-go scorecards

6 prepared by CBO and OMB, each updated to reflect all

7 bill cost reports issued under subsection (e).

8 ‘‘(g) FINAL SEQUESTRATION REPORTS.—

9 ‘‘(1) REPORTING REQUIREMENT.—On or before

10 the dates specified in subsection (a), OMB and CBO

11 shall issue a final sequestration report, updated to

12 reflect laws enacted through those dates.

13 ‘‘(2) DISCRETIONARY SEQUESTRATION RE14 PORTS.—The final reports shall set forth estimates

15 for each of the following:

16 ‘‘(A) For the current fiscal year and each

17 subsequent year through 1998 the applicable

18 discretionary limits and an explanation of any

19 adjustments in such limits under section

20 251(b).

21 ‘‘(B) For the current year and the budget

22 year the estimated discretionary new budget au23 thority and outlays and the budget-year breach,

24 if any.
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•HR 2264 EH

1 ‘‘(C) The sequestration percentages nec2 essary to achieve the required reduction.

3 ‘‘(D) For the budget year, for each ac4 count to be sequestered, estimates of the base5 line level of nonexempt budget authority and re6 sulting outlays and the amount of nonexempt

7 budget authority to be sequestered and result8 ing outlay reductions.

9 ‘‘(3) PAY-AS-YOU-GO AND DEFICIT SEQUESTRA10 TION REPORTS.—The final reports shall contain all

11 the information required in the pay-as-you-go and

12 deficit sequestration preview reports. In addition,

13 these reports shall contain, for the budget year, for

14 each account to be sequestered, estimates of the

15 baseline level of outlays for nonexempt direct spend16 ing programs and the amount to be sequestered. The

17 reports shall also contain estimates of the outlay

18 effects in each outyear resulting from the sequestra19 tion.

20 ‘‘(4) EXPLANATION OF DIFFERENCES.—The

21 OMB report shall explain any differences between

22 OMB and CBO estimates of the amount of any net

23 deficit change calculated under section 252(a), any

24 excess deficit, any breach, and any required seques25 tration percentage. The OMB report shall also ex-
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•HR 2264 EH

1 plain differences in the amount of sequestrable re2 sources for any budget account to be reduced if that

3 difference is greater than $5,000,000.

4 ‘‘(h) WITHIN-SESSION SEQUESTRATION REPORTS.—

5 If a within-session sequestration is required under section

6 251(e), 10 days later CBO shall issue a report containing

7 the information required in subsection (g)(2). Fifteen days

8 after enactment, OMB shall issue a report containing the

9 information required in subsections (g) (2) and (4).

10 ‘‘(i) PRESIDENTIAL ORDER.—On the day OMB is11 sues a report under subsection (g) or (h), if in that report

12 OMB estimates that any sequestration is required, the

13 President shall issue an order fully implementing without

14 change all sequestrations required by the OMB calcula15 tions set forth in that report. The order shall be effective

16 on issuance.

17 ‘‘(j) GAO COMPLIANCE REPORT.—On the date speci18 fied in subsection (a), the Comptroller General shall sub19 mit to the Congress and the President a report on—

20 ‘‘(1) the extent to which each order issued by

21 the President under this section complies with all of

22 the requirements contained in this Act, either cer23 tifying that the order fully and accurately complies

24 with such requirements or indicating the respects in

25 which it does not; and
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•HR 2264 EH

1 ‘‘(2) the extent to which each report issued by

2 OMB or CBO under this section complies with all of

3 the requirements contained in this Act, either cer4 tifying that the report fully and accurately complies

5 with such requirements or indicating the respects in

6 which it does not.

7 ‘‘(k) LOW-GROWTH REPORT.—At any time, CBO

8 shall notify the Congress if—

9 ‘‘(1) during the period consisting of the quarter

10 during which such notification is given, the quarter

11 preceding such notification, and the 4 quarters fol12 lowing such notification, CBO or OMB has deter13 mined that real economic growth is projected or esti14 mated to be less than zero with respect to each of

15 any 2 consecutive quarters within such period; or

16 ‘‘(2) the most recent of the Department of

17 Commerce’s advance preliminary or final reports of

18 actual real economic growth indicate that the rate of

19 real economic growth for each of the most recently

20 reported quarter and the immediately preceding

21 quarter is less than one percent.

22 ‘‘(l) OMB’S ESTIMATING ASSUMPTIONS.—In all re23 ports required by this section, OMB shall use current eco24 nomic and technical assumptions.’’.
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1 SEC. 15106. EXEMPT PROGRAMS AND ACTIVITIES.

2 Section 255 is amended to read as follows:

3 ‘‘SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.

4 ‘‘(a) SOCIAL SECURITY BENEFITS AND TIER I RAIL5 ROAD RETIREMENT BENEFITS.—Benefits payable under

6 the old-age, survivors, and disability insurance program

7 established under title II of the Social Security Act, and

8 benefits payable under section 3(a), 3(f)(3), 4(a), or 4(f)

9 of the Railroad Retirement Act of 1974, shall be exempt

10 from reduction under any order issued under this Act.

11 ‘‘(b) VETERANS PROGRAMS.—The following pro12 grams shall be exempt from reduction under any order is13 sued under this Act:

14 ‘‘National Service Life Insurance Fund (36–

15 8132–0–7–701);

16 ‘‘Service-Disabled Veterans Insurance Fund

17 (36–4012–0–3–701);

18 ‘‘Veterans Special Life Insurance Fund (36–

19 8455–0–8–701);

20 ‘‘Veterans Reopened Insurance Fund (36–

21 4010–0–3–701);

22 ‘‘United States Government Life Insurance

23 Fund (36–8150–0–7–701);

24 ‘‘Veterans Insurance and Indemnities (36–

25 0120–0–1–701);
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1 ‘‘Special Therapeutic and Rehabilitation Activi2 ties Fund (36–4048–0–3–703);

3 ‘‘Canteen Service Revolving Fund (36–4014–0–

4 3–705);

5 ‘‘Benefits under chapter 21 of title 38, United

6 States Code, relating to specially adapted housing

7 and mortgage-protection life insurance for certain

8 veterans with service-connected disabilities (36–

9 0120–0–1–701);

10 ‘‘Benefits under section 907 of title 38, United

11 States Code, relating to burial benefits for veterans

12 who die as a result of service-connected disability

13 (36–0155–0–1–701);

14 ‘‘Benefits under chapter 39 of title 38, United

15 States Code, relating to automobiles and adaptive

16 equipment for certain disabled veterans and mem17 bers of the Armed Forces (36–0137–0–1–702);

18 ‘‘Compensation (36–0153–0–1–701); and

19 ‘‘Pensions (36–0154–0–1–701).

20 ‘‘(c) NET INTEREST.—No reduction of payments for

21 net interest (all of major functional category 900) shall

22 be made under any order issued under this Act.

23 ‘‘(d) EARNED INCOME TAX CREDIT.—Payments to

24 individuals made pursuant to section 32 of the Internal
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•HR 2264 EH

1 Revenue Code of 1954 shall be exempt from reduction

2 under any order issued under this Act.

3 ‘‘(e) NON-DEFENSE UNOBLIGATED BALANCES.—Un4 obligated balances of budget authority carried over from

5 prior fiscal years, except balances in the defense function,

6 shall be exempt from reduction under any order issued

7 under this Act.

8 ‘‘(f) OPTIONAL EXEMPTION OF MILITARY PERSON9 NEL.—

10 ‘‘(1) The President may, with respect to any

11 military personnel account, exempt that account

12 from sequestration or provide for a lower uniform

13 percentage reduction than would otherwise apply.

14 ‘‘(2) The President may not use the authority

15 provided by paragraph (1) unless he notifies the

16 Congress of the manner in which such authority will

17 be exercised on or before the date specified in sec18 tion 254(d) for the budget year.

19 ‘‘(g) OTHER PROGRAMS AND ACTIVITIES.—

20 ‘‘(1)(A) The following budget accounts and ac21 tivities shall be exempt from reduction under any

22 order issued under this Act:

23 ‘‘Activities resulting from private dona24 tions, bequests, or voluntary contributions to

25 the Government;
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•HR 2264 EH

1 ‘‘Administration of Territories, Northern

2 Mariana Islands Covenant grants (14–0412–0–

3 1–808);

4 ‘‘Alaska Power Administration, Operation

5 and maintenance (89–0304–0–1–271);

6 ‘‘Appropriations for the District of Colum7 bia (to the extent they are appropriations of lo8 cally raised funds);

9 ‘‘Bonneville Power Administration fund

10 and borrowing authority established pursuant

11 to section 13 of Public Law 93–454 (1974), as

12 amended (89–4045–0–3–271);

13 ‘‘Bureau of Indian Affairs, Indian land

14 and water claim settlements and miscellaneous

15 payments to Indians (14–2303–0–1–452);

16 ‘‘Bureau of Indian Affairs, Miscellaneous

17 trust funds (14–9973–0–7–999);

18 ‘‘Claims, defense (97–0102–0–1–051);

19 ‘‘Claims, judgments, and relief acts (20–

20 1895–0–1–808);

21 ‘‘Coinage profit fund (20–5811–0–2–803);

22 ‘‘Compact of Free Association, (14–0415–

23 0–1–808);

24 ‘‘Compensation of the President (11–

25 0001–0–1–802);
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•HR 2264 EH

1 ‘‘Conservation Reserve Program (12-3319-

2 0-1-302);

3 ‘‘Credit liquidating and financing accounts;

4 ‘‘Customs Service, miscellaneous perma5 nent appropriations (20–9922–0–2–806);

6 ‘‘Comptroller of the Currency, Assessment

7 funds (20–8413–0–8–373);

8 ‘‘Dual benefits payments account (60–

9 0111–0–1–601);

10 ‘‘Exchange stabilization fund (20–4444–0–

11 3–155);

12 ‘‘Federal Deposit Insurance Corporation,

13 Bank Insurance Fund (51–4064–0–3–373);

14 ‘‘Federal Deposit Insurance Corporation,

15 FSLIC Resolution Fund (51–4065–0–3–373);

16 ‘‘Federal Deposit Insurance Corporation,

17 Savings Association Insurance Fund (51–4066–

18 0–3–373);

19 ‘‘Federal Housing Finance Board (95–

20 4039–0–3–371);

21 ‘‘Federal payment to the railroad retire22 ment accounts (60–0113–0–1–601);

23 ‘‘Foreign military sales trust fund (11–

24 8242–0–7–155);
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•HR 2264 EH

1 ‘‘Health professions graduate student loan

2 insurance program account (Health Education

3 Assistance Loan Program) (75–0340–0–1–

4 552);

5 ‘‘Higher education facilities loans (91–

6 0240–01–502);

7 ‘‘Internal Revenue collections for Puerto

8 Rico (20–5737–0–2–806);

9 ‘‘Intragovernmental funds, including those

10 from which the outlays are derived primarily

11 from resources paid in from other government

12 accounts, except to the extent such funds are

13 augmented by direct appropriations for the fis14 cal year during which an order is in effect;

15 ‘‘Panama Canal Commission, Panama

16 Canal Revolving Fund (95–4061–0–3–403);

17 ‘‘Medical facilities guarantee and loan

18 fund, Federal interest subsidies for medical fa19 cilities (75–9931–0–3–550);

20 ‘‘National Credit Union Administration op21 erating fund (25–4056–0–3–373);

22 ‘‘National Credit Union Administration,

23 Central liquidity facility (25–4470–0–3–373);
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•HR 2264 EH

1 ‘‘National Credit Union Administration,

2 Credit union share insurance fund (25–4468–

3 0–3–373);

4 ‘‘Office of Thrift Supervision (20–4108–0–

5 3–373);

6 ‘‘Payment of Vietnam and USS ‘Pueblo’

7 prisoner-of-war claims (15–0104–0–1–153);

8 ‘‘Payment to civil service retirement and

9 disability fund (24–0200–0–1–805);

10 ‘‘Payment to Judiciary Trust Funds (10–

11 0941–0–1–752);

12 ‘‘Payments to copyright owners (03–5175–

13 0–2–376);

14 ‘‘Payments to health care trust funds (75–

15 0580–0–1–571);

16 ‘‘Payment to military retirement fund (97–

17 0040–0–1–054);

18 ‘‘Payments to social security trust funds

19 (75–0404–0–1–651);

20 ‘‘Payments to the foreign service retire21 ment and disability fund (11–1036–0–1–153

22 and 19–0540–0–1–153);

23 ‘‘Payments to trust funds from excise

24 taxes or other receipts properly creditable to

25 such trust funds;
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1 ‘‘Payments to the United States terri2 tories, fiscal assistance (14–0418–0–1–806);

3 ‘‘Payments to widows and heirs of de4 ceased Members of Congress (00–0215–0–1–

5 801);

6 ‘‘Postal service fund (18–4020–0–3–372);

7 ‘‘Resolution Trust Corporation Revolving

8 Fund (22–4055–0–3–373);

9 ‘‘Salaries of Article III judges;

10 ‘‘Soldiers’ and Airmen’s Home, payments

11 of claims (84–8930–0–7–705);

12 ‘‘Southeastern Power Administration, Op13 eration and maintenance (89–0302–0–1–271);

14 ‘‘Southwestern Power Administration, Op15 eration and maintenance (89–0303–0–1–271);

16 ‘‘Tennessee Valley Authority fund, except

17 non-power programs and activities (64–4110–

18 0–3–999);

19 ‘‘Thrift Savings Fund;

20 ‘‘United States Enrichment Corporation

21 Fund (95–4054–0–3–271);

22 ‘‘Vaccine Injury Compensation (75–0320–

23 0–1–551);

24 ‘‘Vaccine Injury Compensation Program

25 Trust Fund (20–8175–0–7–551);
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1 ‘‘Washington Metropolitan Area Transit

2 Authority, interest payments (46–0300–0–1–

3 401);

4 ‘‘Western Area Power Administration,

5 Construction, rehabilitation, operation, and

6 maintenance (89–5068–0–2–271); and

7 ‘‘Western Area Power Administration, Col8 orado River basins power marketing fund (89–

9 4452–0–3–271).

10 ‘‘(B) The following Federal retirement and dis11 ability accounts and activities shall be exempt from

12 reduction under any order issued under this Act:

13 ‘‘Black Lung Disability Trust Fund (20–

14 8144–0–7–601);

15 ‘‘Central Intelligence Agency retirement

16 and disability system fund (56–3400–0–1–054);

17 ‘‘Civil service retirement and disability

18 fund (24–8135–0–7–602);

19 ‘‘Comptrollers general retirement system

20 (05–0107–0–1–801);

21 ‘‘Foreign service retirement and disability

22 fund (19–8186–0–7–602);

23 ‘‘Judicial survivors’ annuities fund (10–

24 8110–0–7–602);
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1 ‘‘Judicial Officers’ Retirement Fund (10–

2 8122–0–7–602);

3 ‘‘Claims Court Judges’ Retirement Fund

4 (10–8124–0–7–602);

5 ‘‘Special workers compensation expenses

6 (Longshoremen’s and harborworkers’ com7 pensation benefits) (16–9971–0–7–601);

8 ‘‘Military retirement fund (97–8097–0–7–

9 602);

10 ‘‘National Oceanic and Atmospheric Ad11 ministration retirement (13–1450–0–1–306);

12 ‘‘Pensions for former Presidents (47–

13 0105–0–1–802);

14 ‘‘Rail Industry Pension Fund (60–8011–

15 0–7–601);

16 ‘‘Railroad supplemental annuity pension

17 fund (60–8012–0–7–602);

18 ‘‘Retired pay, Coast Guard (69–0241–0–1–

19 403);

20 ‘‘Retirement pay and medical benefits for

21 commissioned officers, Public Health Service

22 (75–0379–0–1–551);

23 ‘‘Special benefits (Federal Employees’

24 Compensation Act) (16–1521–0–1–600);
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1 ‘‘Special benefits for disabled coal miners

2 (75–0409–0–1–601); and

3 ‘‘Tax Court judges survivors annuity fund

4 (23–8115–0–7–602).

5 ‘‘(2) Prior legal obligations of the Government

6 in the following budget accounts and activities shall

7 be exempt from any order issued under this Act:

8 ‘‘Biomass energy development (20–0114–

9 0–1–271);

10 ‘‘United States Treasury check forgery in11 surance fund (20–4109–0–3–803);

12 ‘‘Employees life insurance fund (24–8424–

13 0–8–602);

14 ‘‘Energy security reserve (Synthetic Fuels

15 Corporation) (20–0112–0–1–271);

16 ‘‘Federal Aviation Administration, Aviation

17 insurance revolving fund (69–4120–0–3–402);

18 ‘‘Federal Crop Insurance Corporation fund

19 (12–4085–0–3–351);

20 ‘‘Federal Emergency Management Agency,

21 National flood insurance fund (58–4236–0–3–

22 453);

23 ‘‘Federal Emergency Management Agency,

24 National insurance development fund (58–

25 4235–0–3–451);
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1 ‘‘Geothermal resources development fund

2 (89–0206–0–1–271);

3 ‘‘Homeowners assistance fund, Defense

4 (97–4090–0–3–051);

5 ‘‘International Trade Administration, Op6 erations and administration (13–1250–0–1–

7 376);

8 ‘‘Low-rent public housing, Loans and other

9 expenses (86–4098–0–3–604);

10 ‘‘Maritime Administration, War-risk insur11 ance revolving fund (69–4302–0–3–403);

12 ‘‘Overseas Private Investment Corporation

13 (71–4030–0–3–151);

14 ‘‘Pension Benefit Guaranty Corporation

15 fund (16–4204–0–3–601);

16 ‘‘Rail service assistance (69–0122–0–1–

17 401);

18 ‘‘Department of Veterans Affairs, Service19 men’s group life insurance fund (36–4009–0–3–

20 701).

21 ‘‘(h) LOW-INCOME PROGRAMS.—The following pro22 grams shall be exempt from reduction under any order is23 sued under this Act:

24 ‘‘Aid to families with dependent children (75–

25 1501–0–1–609);
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•HR 2264 EH

1 ‘‘Child nutrition (12–3539–0–1–605);

2 ‘‘Commodity supplemental food program (12–

3 3512–0–1–605);

4 ‘‘Food stamp programs (12–3505–0–1–605 and

5 12–3550–0–1–605);

6 ‘‘Grants to States for Medicaid (75–0512–0–1–

7 551);

8 ‘‘Supplemental Security Income Program (75–

9 0406–0–1–609); and

10 ‘‘Women, infants, and children program (12–

11 3510–0–1–605).

12 ‘‘(i) IDENTIFICATION OF PROGRAMS.—For purposes

13 of subsections (b), (g), and (h), each account is identified

14 by the designated budget account identification code num15 ber set forth in the Budget of the United States Govern16 ment, 1994—Appendix, and an activity within an account

17 is designated by the name of the activity and the identi18 fication code number of the account.’’.

19 SEC. 15107. GENERAL AND SPECIAL SEQUESTRATION

20 RULES.

21 Section 256 is amended as follows:

22 (1) Strike the section heading and insert the

23 following new section heading:
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1 ‘‘SEC. 256. GENERAL AND SPECIAL SEQUESTRATION

2 RULES.’’.

3 (2) Subsection (a) is amended by striking

4 ‘‘part’’ and inserting ‘‘Act’’.

5 (3) Subsection (b) is repealed and subsection

6 (a) is redesignated as subsection (b).

7 (4) A new subsection (a) is inserted, as follows:

8 ‘‘(a) BUDGET-YEAR SEQUESTRATION.—For each di9 rect spending program subject to sequestration under this

10 Act, a sequestration shall apply for the period starting on

11 the date the sequestration order under section 254 is is12 sued and ending on the last day of the budget year, unless

13 a different period is specified in this section. For purposes

14 of section 253, the amount estimated to be saved in all

15 fiscal years by a budget-year sequestration under section

16 252 or 253 shall be considered to have been saved in the

17 budget year.’’.

18 (5) Subsection (e)(1) is amended by striking

19 ‘‘be—’’ and all that follows through ‘‘subsequent fis20 cal year’’ and inserting ‘‘be 2 percent’’.

21 (6) Subsection (h)(4) is amended by striking

22 ‘‘(D) Office of Thrift Supervision.’’ and ‘‘(H) Reso23 lution Funding Corporation.’’ and redesignating the

24 remaining subparagraphs accordingly.

25 (7) Subsection (j) is amended by striking ‘‘joint

26 resolution’’ and inserting ‘‘Act’’ each place it ap-
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•HR 2264 EH

1 pears and by amending paragraph (5) to read as

2 follows:

3 ‘‘(5) DAIRY PROGRAM.—Notwithstanding other

4 provisions of this subsection, as the sole means of

5 achieving any reduction in outlays under the milk

6 price support program, the Secretary of Agriculture

7 shall provide for a reduction to be made in the price

8 received by producers for all milk produced in the

9 United States and marketed by producers for com10 mercial use. That price reduction (measured in cents

11 per hundredweight of milk marketed) shall occur

12 under subparagraph (A) of section 201(d)(2) of the

13 Agricultural Act of 1949 (7 U.S.C. 1446(d)(2)(A)),

14 shall begin on the day any sequestration order is is15 sued under section 254, and shall not exceed the ag16 gregate amount of the reduction in outlays under

17 the milk price support program that otherwise would

18 have been achieved by reducing payments for the

19 purchase of milk or the products of milk under this

20 subsection during the applicable fiscal year.’’.

21 (8) Subsection (k)(2) is amended by striking

22 the dash the second place it appears and all that fol23 lows through ‘‘(I)’’; and by striking ‘‘; or’’ and all

24 that follows through ‘‘(II)’’ and inserting ‘‘, except
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•HR 2264 EH

1 that a State may not be allotted an amount under

2 this subparagraph that exceeds’’.

3 (9) Subsection (l) is redesignated as subsection

4 (m) and is amended by striking paragraph (4) and

5 by redesignating paragraphs (5) and (6) as para6 graphs (4) and (5), respectively’’.

7 (10) After subsection (k) add the following new

8 subsection:

9 ‘‘(l) STUDENT LOANS.—For all student loans under

10 part B or D of title IV of the Higher Education Act of

11 1965 made during the period when a sequestration order

12 under section 254 is in effect, origination fees under sec13 tions 438(c)(2) and 456(c) of that Act shall be increased

14 by a uniform percentage sufficient to produce the dollar

15 savings in student loan programs (as a result of that

16 sequestration order) required by section 252 or 253, as

17 applicable.’’.

18 SEC. 15108. THE BASELINE.

19 Section 257 is amended as follows:

20 (1) In subsection (a), insert ‘‘, and discre21 tionary regulations promulgated as final by,’’ after

22 ‘‘through’’.

23 (2) In subsection (b), strike ‘‘budget year’’ and

24 insert ‘‘current year, the budget year,’’.

25 (3) Amend subsection (b)(1) to read as follows:
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•HR 2264 EH

1 ‘‘(1) IN GENERAL.—Laws providing or creating

2 direct spending and receipts are assumed to operate

3 in the manner specified in those laws for each such

4 year, funding for mandatory appropriations is as5 sumed to be adequate to make all payments required

6 by those mandates, and regulations over which the

7 President has discretion are assumed to remain in

8 effect as they were at the time the baseline for the

9 budget year was first completed.’’.

10 (4) Amend subsection (b)(2)(A) to read as fol11 lows:

12 ‘‘(A) No program with estimated current13 year gross new budget authority greater than

14 $50,000,000 is assumed to expire in the budget

15 year or outyears. In carrying out the preceding

16 sentence, expiring programs funded by manda17 tory appropriations or by indefinite budget au18 thority are assumed to continue under the di19 rect spending law in effect just prior to their

20 expiration, and other expiring programs are as21 sumed to continue with new budget authority

22 projected as under subsection (c)(4).’’.

23 (5) In subsection (b)(2)(B), insert ‘‘percentage’’

24 before ‘‘increase’’.

25 (6) Amend subsection (b)(3) to read as follows:
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•HR 2264 EH

1 ‘‘(3) CUTOFF DATE.—Programs or taxes that

2 expire on or before December 31 and that have not

3 been reauthorized by the date of the final sequestra4 tion report are assumed to expire. If an increase in

5 veterans compensation for the budget year has not

6 been enacted by the date of the final sequestration

7 report, it is not assumed.’’.

8 (7) In subsection (c), strike ‘‘budget year’’ and

9 insert ‘‘current year, the budget year,’’ and strike

10 ‘‘all amounts other than those covered by subsection

11 (b)’’ and insert ‘‘discretionary programs’’.

12 (8) Paragraphs (1) and (2) of subsection (c)

13 are amended to read as follows:

14 ‘‘(1) INFLATION OF CURRENT-YEAR APPROPRIA15 TIONS.—

16 ‘‘(A) Gross new budget authority shall be

17 at the level provided for that fiscal year in ap18 propriation Acts and discretionary offsetting

19 collections shall be at the estimated level re20 quired by existing law (assuming the baseline

21 level of gross new budget authority).

22 ‘‘(B) If for any account an appropriation

23 has not yet been enacted, gross new budget au24 thority is assumed to be at the level available

25 in the current year, adjusted for expiring hous-
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•HR 2264 EH

1 ing contracts as specified in paragraph (2), for

2 social insurance administrative expenses as

3 specified in paragraph (3), for inflation as spec4 ified in paragraph (4), and to account for

5 changes required by law in the level of agency

6 payments for personnel benefits other than pay.

7 ‘‘(2) EXPIRING HOUSING CONTRACTS.—New

8 budget authority to renew expiring multiyear sub9 sidized housing contracts or provide contracts to re10 place units lost due to prepayments shall be adjusted

11 to reflect the difference in the number of such con12 tracts that are estimated to expire or be prepaid in

13 that fiscal year and the number expiring or being

14 prepaid in the current year.’’.

15 (9) In subsection (c)(3), strike ‘‘Budgetary’’

16 and insert ‘‘New budgetary’’, insert ‘‘or number of

17 claims, as applicable,’’ after ‘‘population’’, and insert

18 ‘‘the Federal Old-Age and Survivors Insurance

19 Trust Fund, the Federal Disability Insurance Trust

20 Fund,’’ after the colon.

21 (10) In subsection (c), strike paragraph (4) and

22 redesignate paragraphs (5) and (6) as (4) and (5),

23 respectively.

24 (11) Amend the first sentence of subsection

25 (c)(4) to read as follows: ‘‘The inflator to adjust new
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1 budget authority relating to civilian personnel is the

2 percent by which the average rate of basic pay for

3 the general schedule pay system, calculated as speci4 fied in sections 5303(a) and 5304 of title 5, United

5 States Code, for that fiscal year exceeds the average

6 rate of basic pay for the current year. The inflator

7 for military personnel is the percent by which the

8 average rate of basic pay, as specified in section

9 1009 of title 37, United States Code, for that fiscal

10 year exceeds the average rate of basic pay for the

11 current year.’’.

12 (12) In the second sentence of subsection

13 (c)(4), strike ‘‘used in paragraph (1)’’ and strike

14 ‘‘national’’ and insert ‘‘domestic’’.

15 (13) Amend the side heading and first sentence

16 of subsection (c)(5) to read as follows: ‘‘PART-YEAR

17 APPROPRIATIONS; PERMISSIVE TRANSFERS.—If, for

18 any account, a continuing appropriation is in effect

19 for less than an entire fiscal year, then the amount

20 available for that fiscal year is assumed to equal the

21 amount that would be available if that continuing

22 appropriation covered the entire fiscal year.’’.

23 (14) In the second sentence of subsection

24 (c)(5), insert ‘‘or midsession review’’ after ‘‘original

25 budget’’.
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1 (15) Amend subsection (e) to read as follows:

2 ‘‘(e) ASSET SALES.—Amounts realized from new

3 asset sales shall not be counted for purposes of this sec4 tion. Asset sales shall not be considered new if the author5 ity to make those sales was enacted in a prior session of

6 Congress or is a reauthorization of routine, ongoing asset

7 sales at levels consistent with agency operations in fiscal

8 year 1993.’’.

9 SEC. 15109. FAST-TRACK PROCEDURES.

10 (a) REPEALER.—The first section 258 (relating to

11 modification of Presidential orders) is repealed.

12 (b) CONFORMING AMENDMENT.—In the second sec13 tion 258, strike ‘‘254(j)’’ each time it appears and insert

14 ‘‘254(k)’’; strike ‘‘310(d)’’ and insert ‘‘310(c)’’; and in

15 subsection (a)(4)(A) strike ‘‘discharged pursuant’’ and in16 sert ‘‘discharged in the Senate pursuant’’.

17 (c) CONFORMING AMENDMENT.—In section

18 258A(b)(6), strike ‘‘, IV, and VI’’ and insert ‘‘and IV’’.

19 (d) CONFORMING AMENDMENT.—In section

20 258B(k), strike ‘‘306, and 401(b)(1)’’ and insert ‘‘and

21 306’’.

22 (e) CONFORMING AMENDMENT.—In section

23 258C(a)(1), strike ‘‘sequestration update’’ and insert

24 ‘‘scorecard’’ and strike ‘‘or 253’’.
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1 SEC. 15110. JUDICIAL REVIEW.

2 Section 274 is amended as follows:

3 (1) Strike ‘‘252’’ or ‘‘252(b)’’ each place it oc4 curs and insert ‘‘254’’.

5 (2) In subsection (d)(1)(A), strike ‘‘257(l) to

6 the extent that’’ and insert ‘‘256(b) if’’, strike the

7 parenthetical phrase, and at the end insert ‘‘or’’.

8 (3) In subsection (d)(1)(B), strike ‘‘new budg9 et’’ and all that follows through ‘‘spending author10 ity’’ and insert ‘‘budgetary resources’’ and strike

11 ‘‘or’’ after the comma.

12 (4) Strike subsection (d)(1)(C).

13 (5) Strike subsection (f) and redesignate sub14 sections (g) and (h) as subsections (f) and (g), re15 spectively.

16 (6) Amend subsection (g) to read as follows:

17 ‘‘(g) ECONOMIC DATA, ASSUMPTIONS, AND METH18 ODOLOGIES.—The economic data and economic assump19 tions used by the Director of OMB in preparing the budg20 et of the United States Government, or in making calcula21 tions under this Act, shall not be subject to review in any

22 judicial or administrative proceeding.’’.

23 SEC. 15111. EFFECTIVE DATE.

24 (a) EXPIRATION.—Section 275(b) is amended to read

25 as follows:
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1 ‘‘(b) EXPIRATION.—(1) Except as provided by para2 graph (2), part C of this Act shall expire on September

3 30, 2002.

4 ‘‘(2) Sections 251, 257, and 258B of this Act and

5 sections 1105(f) and 1106(c) of title 31, United States

6 Code, shall expire on September 30, 1998, and section 253

7 of this Act shall expire on September 30, 1995.’’.

8 (b) EFFECTIVE DATES.—

9 (1) IN GENERAL.—The amendments made by

10 this subtitle shall be effective upon enactment for

11 fiscal year 1994 and subsequent fiscal years.

12 (2) SPECIAL RULE FOR FISCAL YEAR 1993.—

13 For fiscal year 1993, the Balanced Budget and

14 Emergency Deficit Control Act of 1985 and title VI

15 of the Congressional Budget Act of 1974 shall be

16 applied and administered as if this title had not been

17 enacted.

18 Subtitle B—Amendments to the

19 Congressional Budget and Im20 poundment Control Act of 1974;

21 Conforming Amendments

22 SEC. 15201. DEFINITIONS.

23 Section 3 of the Congressional Budget and Impound24 ment Control Act of 1974 is amended as follows:

25 (1) Repeal the first paragraph (2).
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1 (2) Amend the second paragraph (2) to read as

2 follows:

3 ‘‘(2) BUDGET AUTHORITY AND NEW BUDGET

4 AUTHORITY.—

5 ‘‘(A) IN GENERAL.—The term ‘budget au6 thority’ means the authority provided by

7 Federal law to incur financial obligations, as

8 follows:

9 ‘‘(i) provisions of law that make funds

10 available for obligation and expenditure

11 (other than borrowing authority), including

12 the authority to obligate and expend the

13 proceeds of offsetting receipts and collec14 tions;

15 ‘‘(ii) borrowing authority, which

16 means authority granted to a Federal en17 tity to borrow, obligate, and expend the

18 borrowed funds, including through the is19 suance of promissory notes or other mone20 tary credits;

21 ‘‘(iii) contract authority, which means

22 the making of funds available for obliga23 tion but not for expenditure; or

24 ‘‘(iv) offsetting receipts and collections

25 as negative budget authority, and the
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1 reduction thereof as positive budget

2 authority.

3 ‘‘(B) LIMITATIONS ON BUDGET AUTHOR4 ITY.—Any amount that is precluded from obli5 gation in a fiscal year by a provision of law

6 (such as a limitation or a benefit formula) shall

7 not be budget authority in that year.

8 ‘‘(C) LOAN COSTS.—The term ‘budget au9 thority’ includes the cost for direct loan and

10 loan guarantee programs, as those terms are

11 defined by title V.

12 ‘‘(D) DIRECT SPENDING.—The term ‘di13 rect spending’ means budget authority provided

14 by law other than an appropriation Act or by

15 a law that determines amounts needed to fund

16 mandatory appropriations (including the food

17 stamp program), but such term does not in18 clude salary or basic pay funded through an ap19 propriation Act.

20 ‘‘(E) NEW BUDGET AUTHORITY.—The

21 term ‘new budget authority’ means, with re22 spect to a fiscal year—

23 ‘‘(i) budget authority that first be24 comes available for obligation in that year,

25 including budget authority that becomes
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1 available in that year as a result of a reap2 propriation; or

3 ‘‘(ii) a change in any account in the

4 availability of unobligated balances of

5 budget authority carried over from a prior

6 year, resulting from a provision of law first

7 effective in that year.

8 New budget authority, with respect to a fiscal

9 year, includes a change in the estimated level of

10 the authority to incur obligations in an account

11 that, under existing law, has authority to obli12 gate indefinite amounts, if the change results

13 from a change in law.’’.

14 (3) Repeal paragraph (9), redesignate para15 graphs (3) through (8) as paragraphs (4) through

16 (9), and insert after paragraph (2) the following new

17 paragraph:

18 ‘‘(3) DEFICIT IMPACT NUMBER (OR SURPLUS

19 IMPACT NUMBER).—The term ‘deficit impact num20 ber’ (or ‘surplus impact number’) means, with re21 spect to a fiscal year, the change in the deficit (or

22 surplus) that may be caused by any combination of

23 increases or decreases in direct spending and reve24 nue assumed by the most recently agreed to concur25 rent resolution to be enacted in the current session
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1 of Congress and allocated to a committee. An impact

2 number greater than zero increases the deficit (or

3 decreases the surplus) and an impact number less

4 than zero decreases the deficit (or increases the

5 surplus).’’.

6 (4) Amend paragraph (6) (as redesignated) by

7 inserting before the period the following: ‘‘, and the

8 term ‘appropriation measure’ means a general or

9 supplemental appropriation bill or a joint resolution

10 making continuing appropriations, but not yet en11 acted into law’’.

12 (5) At the end, add the following new para13 graph:

14 ‘‘(11) The term ‘new credit authority’ means

15 credit authority not provided by law as of February

16 1, 1986, including any increase in or addition to

17 credit authority provided by law on such date.’’.

18 SEC. 15202. CONGRESSIONAL BUDGET OFFICE.

19 Title II of the Congressional Budget Act of 1974 is

20 amended as follows:

21 (1) The first section 201(g) is amended by

22 striking ‘‘(g)’’ and inserting ‘‘(f)’’.

23 (2) The side heading of section 202(f) is

24 amended by striking ‘‘TO BUDGET COMMITTEES’’.
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1 (3) Section 202(f)(1) is amended by striking

2 ‘‘On or before February 15 of each year’’ and insert3 ing ‘‘Within 20 days after the President’s budget

4 submission’’.

5 (4) Section 202(f) is amended by adding at the

6 end the following new paragraphs:

7 ‘‘(4) As soon as practicable after the beginning

8 of each fiscal year, the Director shall issue a report

9 projecting for the period of 5 fiscal years beginning

10 with such fiscal year—

11 ‘‘(A) total new budget authority and total

12 budget outlays for each fiscal year in such

13 period;

14 ‘‘(B) revenues to be received and the major

15 sources thereof, and the surplus or deficit, if

16 any, for each fiscal year in such period; and

17 ‘‘(C) tax expenditures for each fiscal year

18 in such period.

19 ‘‘(5)(A) The Director shall, to the extent prac20 ticable, prepare for each bill or joint resolution re21 ported by any committee of the House of Represent22 atives or the Senate (except the Committee on Ap23 propriations of each House), and submit to such

24 committee—
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1 ‘‘(i) an estimate of the costs which would

2 be incurred in carrying out such bill or joint

3 resolution in the fiscal year in which it is to be4 come effective and in each of the 4 fiscal years

5 following such fiscal year, together with the

6 basis for each such estimate;

7 ‘‘(ii) an estimate of the cost which would

8 be incurred by State and local governments in

9 carrying out or complying with any significant

10 bill or joint resolution in the fiscal year in

11 which it is to become effective and in each of

12 the four fiscal years following such fiscal year,

13 together with the basis for each such estimate;

14 and

15 ‘‘(iii) a comparison of the estimates of

16 costs described in clauses (i) and (ii), with any

17 available estimates of costs made by such com18 mittee or by any Federal agency.

19 The estimates, comparison, and description so sub20 mitted shall be included in the report accompanying

21 such bill or joint resolution if timely submitted to

22 such committee before such report is filed.

23 ‘‘(B) For purposes of subparagraph (A)(ii), the

24 term ‘local government’ has the same meaning as in
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1 section 103 of the Intergovernmental Cooperation

2 Act of 1968.

3 ‘‘(C) For purposes of subparagraph (A)(ii), the

4 term ‘significant bill or joint resolution’ is defined as

5 any bill or joint resolution which in the judgment of

6 the Director of the Congressional Budget Office is

7 likely to result in an annual cost to State and local

8 governments of $200,000,000 or more, or is likely to

9 have exceptional fiscal consequences for a geographic

10 region or a particular level of government.’’.

11 (5) Section 202(h) is amended by striking

12 ‘‘budget outlays, credit authority,’’ and insert ‘‘var13 ious forms of spending programs, including grants

14 and loans,’’.

15 SEC. 15203. CONGRESSIONAL BUDGET PROCESS.

16 Title III of the Congressional Budget Act of 1974

17 is amended to read as follows:

18 ‘‘TITLE III—CONGRESSIONAL

19 BUDGET PROCESS

20 ‘‘SEC. 300. TIMETABLE.

21 ‘‘The timetable with respect to the congressional

22 budget process for any fiscal year is as follows:

‘‘On or before: Action to be completed:

First Monday in February ............ President submits the budget.

Six weeks after President’s budget

submission.

Committees submit views and estimates to Budget Committees.

April 1 ........................................... Senate Budget Committee reports

concurrent resolution on the budget.
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‘‘On or before: Action to be completed:

April 15 ......................................... Congress completes action on concurrent resolution on the budget.

May 15 .......................................... House committees report bills authorizing new budget authority.

June 10 ......................................... House Appropriations Committee reports last annual appropriation bill.

June 30 ......................................... House completes action on annual appropriation bills and (if required) a

reconciliation bill.

October 1 ....................................... Fiscal year begins.

1 ‘‘SEC. 301. ANNUAL ADOPTION OF CONCURRENT RESOLU2 TION ON THE BUDGET.

3 ‘‘(a) CONTENT OF CONCURRENT RESOLUTION ON

4 THE BUDGET.—On or before April 15 of each year, the

5 Congress shall complete action on a concurrent resolution

6 on the budget. The concurrent resolution shall set forth

7 appropriate levels for the fiscal year beginning on October

8 1 of such year and for each of the 4 ensuing fiscal years,

9 for the following—

10 ‘‘(1) totals of new budget authority and budget

11 outlays;

12 ‘‘(2) total Federal revenues and the amount, if

13 any, by which the aggregate level of Federal reve14 nues should be increased or decreased by bills and

15 resolutions to be reported by the appropriate com16 mittees;

17 ‘‘(3) the surplus or deficit in the budget;

18 ‘‘(4) new budget authority and budget outlays

19 for each major functional category, based on alloca-
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1 tions of the total levels set forth pursuant to para2 graph (1);

3 ‘‘(5) the public debt;

4 ‘‘(6) for purposes of Senate enforcement under

5 this title, outlays of the old-age, survivors, and dis6 ability insurance program established under title II

7 of the Social Security Act for the fiscal year of the

8 resolution and for each of the 4 succeeding fiscal

9 years; and

10 ‘‘(7) for purposes of Senate enforcement under

11 this title, revenues of the old-age, survivors, and dis12 ability insurance program established under title II

13 of the Social Security Act (and the related provisions

14 of the Internal Revenue Code of 1986) for the fiscal

15 year of the resolution and for each of the 4 succeed16 ing fiscal years.

17 Except to the extent required by paragraphs (6) and (7),

18 the concurrent resolution shall not include the outlays and

19 revenue totals of the old age, survivors, and disability in20 surance program established under title II of the Social

21 Security Act or the related provisions of the Internal Reve22 nue Code of 1986 in the surplus or deficit totals required

23 by this subsection or in any other surplus or deficit totals

24 required by this title. Notwithstanding any other provision

25 of law, the receipts and disbursements of the Hospital In-
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1 surance Trust Fund shall be included in the computations

2 required by paragraphs (1) through (5), and no separate

3 display of Hospital Insurance Trust Fund receipts or al4 ternative displays of budget totals excluding Hospital in5 surance receipts and disbursements are required to be in6 cluded in any concurrent resolution on the budget.

7 ‘‘(b) ADDITIONAL MATTERS IN CONCURRENT RESO8 LUTION.—The concurrent resolution on the budget may—

9 ‘‘(1) set forth, if required by subsection (f), the

10 calendar year in which, in the opinion of the Con11 gress, the goals for reducing unemployment set forth

12 in section 4(b) of the Employment Act of 1946

13 should be achieved;

14 ‘‘(2) include reconciliation directives described

15 in section 310;

16 ‘‘(3) set forth the appropriate level of the public

17 debt for purposes of rule XLIX of the Rules of the

18 House of Representatives; and

19 ‘‘(4) set forth such other matters, and require

20 such other procedures, relating to the budget, as

21 may be appropriate to carry out the purposes of this

22 Act.

23 ‘‘(c) CONSIDERATION OF PROCEDURES OR MATTERS

24 WHICH HAVE THE EFFECT OF CHANGING ANY RULE OF

25 THE HOUSE OF REPRESENTATIVES.—If the Committee
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1 on the Budget of the House of Representatives reports

2 any concurrent resolution on the budget which includes

3 any procedure or matter which has the effect of changing

4 any rule of the House of Representatives, such concurrent

5 resolution shall then be referred to the Committee on

6 Rules with instructions to report it within five calendar

7 days (not counting any day on which the House is not

8 in session). The Committee on Rules shall have jurisdic9 tion to report any concurrent resolution referred to it

10 under this paragraph with an amendment or amendments

11 changing or striking out any such procedure or matter.

12 ‘‘(d) VIEWS AND ESTIMATES OF OTHER COMMIT13 TEES.—Within 6 weeks after the President submits a

14 budget under section 1105(a) of title 31, United States

15 Code, each committee of the House of Representatives

16 having legislative jurisdiction may submit to the Commit17 tee on the Budget of the House and each committee of

18 the Senate having legislative jurisdiction may submit to

19 the Committee on the Budget of the Senate its views and

20 estimates (as determined by the committee making such

21 submission) with respect to all matters set forth in sub22 sections (a) and (b) which relate to matters within the

23 jurisdiction or functions of such committee. The Joint

24 Economic Committee shall submit to the Committees on

25 the Budget of both Houses its recommendations as to the
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1 fiscal policy appropriate to the goals of the Employment

2 Act of 1946. Any other committee of the House of Rep3 resentatives or the Senate may submit to the Committee

4 on the Budget of its House, and any joint committee of

5 the Congress may submit to the Committees on the Budg6 et of both Houses, its views and estimates with respect

7 to all matters set forth in subsections (a) and (b) which

8 relate to matters within its jurisdiction or functions.

9 ‘‘(e) HEARINGS AND REPORT.—In developing the

10 concurrent resolution on the budget referred to in sub11 section (a) for each fiscal year, the Committee on the

12 Budget of each House shall hold hearings and shall receive

13 testimony from Members of Congress and such appro14 priate representatives of Federal departments and agen15 cies, the general public, and national organizations as the

16 committee deems desirable. Each of the recommendations

17 as to short-term and medium-term goals set forth in the

18 report submitted by the members of the Joint Economic

19 Committee under subsection (d) may be considered by the

20 Committee on the Budget of each House as part of its

21 consideration of such concurrent resolution, and its report

22 may reflect its views thereon, including its views on how

23 the estimates of revenues and total levels of new budget

24 authority and outlays set forth in such concurrent resolu25 tion are designed to achieve any economic goals it is rec-
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1 ommending. The report accompanying such concurrent

2 resolution shall include, but not be limited to—

3 ‘‘(1) a comparison of revenues estimated by the

4 committee with those estimated in the budget sub5 mitted by the President;

6 ‘‘(2) a comparison of the appropriate levels of

7 total budget outlays and total new budget authority

8 as set forth in such concurrent resolution with those

9 estimated or requested in the budget submitted by

10 the President;

11 ‘‘(3) with respect to each major functional cat12 egory, an estimate of budget outlays and an appro13 priate level of new budget authority for all proposed

14 programs and for all existing programs (including

15 renewals thereof), with the estimate and level for ex16 isting programs being divided between permanent

17 authority and funds provided in appropriation Acts,

18 and with each such division being subdivided be19 tween controllable amounts and all other amounts;

20 ‘‘(4) an allocation of the level of Federal reve21 nues recommended in the concurrent resolution

22 among the major sources of such revenues;

23 ‘‘(5) the economic assumptions and objectives

24 which underlie each of the matters set forth in such

25 concurrent resolution and any alternative economic
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1 assumptions and objectives which the committee

2 considered;

3 ‘‘(6) the estimated levels of tax expenditures

4 (the tax expenditures budget) by major functional

5 categories;

6 ‘‘(7) a statement of any significant changes in

7 the proposed levels of Federal assistance to State

8 and local governments;

9 ‘‘(8) information, data, and comparisons indi10 cating the manner in which, and the basis on which,

11 the committee determined each of the matters set

12 forth in the concurrent resolution; and

13 ‘‘(9) allocations described in sections 302(a)

14 and 311(a).

15 ‘‘(f) ACHIEVEMENT OF GOALS FOR REDUCING UN16 EMPLOYMENT.—

17 ‘‘(1) If, pursuant to section 4(c) of the Employ18 ment Act of 1946, the President recommends in the

19 Economic Report that the goals for reducing unem20 ployment set forth in section 4(b) of such Act be

21 achieved in a year after the close of the five-year pe22 riod prescribed by such subsection, the concurrent

23 resolution on the budget for the fiscal year begin24 ning after the date on which such Economic Report

25 is received by the Congress may set forth the year
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1 in which, in the opinion of the Congress, such goals

2 can be achieved.

3 ‘‘(2) After the Congress has expressed its opin4 ion pursuant to paragraph (1) as to the year in

5 which the goals for reducing unemployment set forth

6 in section 4(b) of the Employment Act of 1946 can

7 be achieved, if, pursuant to section 4(e) of such Act,

8 the President recommends in the Economic Report

9 that such goals be achieved in a year which is dif10 ferent from the year in which the Congress has ex11 pressed its opinion that such goals should be

12 achieved, either in its action pursuant to paragraph

13 (1) or in its most recent action pursuant to this

14 paragraph, the concurrent resolution on the budget

15 for the fiscal year beginning after the date on which

16 such Economic Report is received by the Congress

17 may set forth the year in which, in the opinion of

18 the Congress, such goals can be achieved.

19 ‘‘(g) ECONOMIC ASSUMPTIONS.—

20 ‘‘(1) It shall not be in order in the Senate to

21 consider any concurrent resolution on the budget for

22 a fiscal year, or any amendment thereto, or any con23 ference report thereon, that sets forth amounts and

24 levels that are determined on the basis of more than

25 one set of economic and technical assumptions.
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1 ‘‘(2) The joint explanatory statement accom2 panying a conference report on a concurrent resolu3 tion on the budget shall set forth the common eco4 nomic assumptions upon which such joint statement

5 and conference report are based, or upon which any

6 amendment contained in the joint explanatory state7 ment to be proposed by the conferees in the case of

8 technical disagreement, is based.

9 ‘‘(3) Determinations by the Committee on the

10 Budget of the House of Representatives or the Sen11 ate, as the case may be, under titles III and IV of

12 the Congressional Budget Act of 1974 shall be based

13 upon such common economic and technical

14 assumptions.

15 ‘‘(h) BUDGET COMMITTEES CONSULTATION WITH

16 COMMITTEES.—The Committee on the Budget of the

17 House of Representatives shall consult with the commit18 tees of its House having legislative jurisdiction during the

19 preparation, consideration, and enforcement of the concur20 rent resolution on the budget with respect to all matters

21 which relate to the jurisdiction or functions of such com22 mittees. The Committee on the Budget of the House of

23 Representatives may not report a concurrent resolution on

24 the budget containing the matter referred to in subsection
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1 (b)(3) except after consultation with the Committee on

2 Ways and Means about that matter.

3 ‘‘(i) SOCIAL SECURITY POINT OF ORDER IN THE

4 SENATE.—It shall not be in order in the Senate to con5 sider any concurrent resolution on the budget as reported

6 to the Senate or any amendment thereto that would de7 crease the excess of social security revenues over social se8 curity outlays in any of the fiscal years covered by the

9 concurrent resolution. No change in chapter 1 of the In10 ternal Revenue Code of 1986 shall be treated as affecting

11 the amount of social security revenues unless such provi12 sion changes the income tax treatment of social security

13 benefits.

14 ‘‘SEC. 302. APPROPRIATION COMMITTEE ALLOCATIONS

15 AND ENFORCEMENT.

16 ‘‘(a) COMMITTEE SPENDING ALLOCATIONS.—The

17 joint explanatory statement accompanying a conference

18 report on a budget resolution shall include an allocation,

19 consistent with the resolution recommended in the con20 ference report, of the appropriate levels (for the budget

21 year covered by that resolution) of total new budget au22 thority and total outlays for the Committee on Appropria23 tions of each House. The amounts so allocated shall be

24 further divided between discretionary and mandatory

25 amounts, as appropriate.
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1 ‘‘(b) SUBDIVISIONS BY APPROPRIATIONS COMMIT2 TEES.—As soon as practicable after a budget resolution

3 is agreed to, the Committee on Appropriations of each

4 House shall subdivide each amount allocated to it for the

5 budget year under subsection (a) among its subcommit6 tees. Each Committee on Appropriations shall promptly

7 report to its House subdivisions made or revised under

8 this subsection.

9 ‘‘(c) POINT OF ORDER.—It shall not be in order in

10 the House of Representatives or the Senate to consider

11 any appropriation measure, or amendment thereto, or mo12 tion or conference report thereon, unless and until the

13 Committee on Appropriations of that House reports sub14 divisions required by subsection (b) consistent with the

15 most recently agreed to concurrent resolution on the

16 budget.

17 ‘‘(d) SUBSEQUENT CONCURRENT RESOLUTIONS.—In

18 the case of a concurrent resolution on the budget referred

19 to in section 304, the allocations under subsection (a) and

20 the subdivisions under subsection (b) shall be required

21 only to the extent necessary to take into account revisions

22 made in the most recently agreed to concurrent resolution

23 on the budget.

24 ‘‘(e) ALTERATION OF SUBDIVISIONS.—At any time

25 after the Committee on Appropriations of either House re-
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1 ports the subdivisions required to be made under sub2 section (b), that committee may report to its House an

3 alteration of such subdivisions. Any alteration of such sub4 divisions must be consistent with any actions already

5 taken by its House on measures within that committee’s

6 jurisdiction.

7 ‘‘(f) LEGISLATION SUBJECT TO POINT OF

8 ORDER.—

9 (1) It shall not be in order in the House of

10 Representatives or the Senate to consider any appro11 priation measure or amendment thereto or motion or

12 conference report thereon, if the new budget author13 ity provided in that measure when added to already

14 enacted levels of new budget authority would

15 cause—

16 ‘‘(A) any allocation of new budget author17 ity made pursuant to subsection (a) under the

18 most recently agreed to concurrent resolution

19 on the budget to be exceeded; or

20 ‘‘(B) any subdivision of new budget au21 thority made pursuant to subsection (b) under

22 the most recently agreed to concurrent resolu23 tion on the budget to be exceeded except for a

24 supplemental appropriation for the current fis25 cal year.
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1 ‘‘(2) An appropriation measure, amendment, or

2 conference report shall be considered to violate para3 graph (1) only if—

4 ‘‘(A) the enactment of such appropriation

5 measure in the form it will be considered as

6 original text for purposes of amendment;

7 ‘‘(B) the amendment is not an amendment

8 considered as original text for purposes of

9 amendment and the adoption of such amend10 ment and enactment of that measure as so

11 amended; or

12 ‘‘(C) the enactment of such measure in the

13 form recommended in such conference report,

14 would cause such a violation.

15 ‘‘(g) DETERMINATIONS BY BUDGET COMMITTEES.—

16 For purposes of this section, the levels of new budget au17 thority shall be determined on the basis of estimates made

18 by the Committee on the Budget of the House of Rep19 resentatives or the Senate, as the case may be.

20 ‘‘(h) ADJUSTMENTS OF ALLOCATIONS OF DISCRE21 TIONARY SPENDING.—

22 ‘‘(1) If a concurrent resolution on the budget is

23 not adopted by April 30, the chairman of the Com24 mittee on the Budget of the House of Representa25 tives shall submit to the House, on the first legisla-
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1 tive day following April 30, an allocation under sub2 section (a) to the Committee on Appropriations con3 sistent with the discretionary spending limits con4 tained in the most recent budget submitted by the

5 President under section 1105(a) of title 31, United

6 States Code.

7 ‘‘(2) As soon as practicable after an allocation

8 under paragraph (1) is submitted to the House, the

9 Committee on Appropriations shall make subdivi10 sions and promptly report those subdivisions to the

11 House of Representatives.

12 ‘‘(3) Allocations and subdivisions made under

13 this subsection shall, for all purposes of this title, be

14 deemed to be allocations and subdivisions made

15 under subsections (a) and (b), until superseded by

16 allocations and subdivisions made under those sec17 tions for the same fiscal year.

18 ‘‘SEC. 303. LEGISLATION PROVIDING NEW BUDGET AU19 THORITY OR CHANGES IN REVENUES OR THE

20 PUBLIC DEBT LIMIT MAY ONLY DO SO FOR

21 YEARS COVERED BY MOST RECENT BUDGET

22 RESOLUTION.

23 ‘‘(a) IN GENERAL.—

24 ‘‘(1) It shall not be in order in the House of

25 Representatives or the Senate to consider any bill,
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1 joint resolution, amendment, motion, or conference

2 report which contains a provision that—

3 ‘‘(A) increases new budget authority;

4 ‘‘(B) decreases revenues; or

5 ‘‘(C) increases or decreases the public debt

6 limit,

7 first effective in the last fiscal year covered by the

8 most recently agreed to concurrent resolution on the

9 budget or any subsequent fiscal year.

10 ‘‘(2) A bill, joint resolution, amendment, or con11 ference report shall be considered to violate para12 graph (1) only if—

13 ‘‘(A) the enactment of such bill or resolu14 tion in the form it will be considered as original

15 text for purposes of amendment;

16 ‘‘(B) the amendment is not an amendment

17 considered as original text for purposes of

18 amendment and the adoption of such amend19 ment and enactment of the bill or joint resolu20 tion as so amended; or

21 ‘‘(C) the enactment of such bill or resolu22 tion in the form recommended in such con23 ference report,

24 would cause such a violation.

25 ‘‘(b) WAIVER IN THE SENATE.—
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1 ‘‘(1) The committee of the Senate which reports

2 any bill or resolution (or amendment thereto) to

3 which subsection (a) applies may at or after the time

4 it reports such bill or resolution (or amendment), re5 port a resolution to the Senate (A) providing for the

6 waiver of subsection (a) with respect to such bill or

7 resolution (or amendment), and (B) stating the rea8 sons why the waiver is necessary. The resolution

9 shall then be referred to the Committee on the

10 Budget of the Senate. That committee shall report

11 the resolution to the Senate within 10 days after the

12 resolution is referred to it (not counting any day on

13 which the Senate is not in session) beginning with

14 the day following the day on which it is so referred,

15 accompanied by that committee’s recommendations

16 and reasons for such recommendations with respect

17 to the resolution. If the committee does not report

18 the resolution within such 10-day period, it shall

19 automatically be discharged from further consider20 ation of the resolution and the resolution shall be

21 placed on the calendar.

22 ‘‘(2) During the consideration of any such reso23 lution, debate shall be limited to one hour, to be

24 equally divided between, and controlled by, the ma25 jority leader and minority leader or their designees,
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1 and the time on any debatable motion or appeal

2 shall be limited to twenty minutes, to be equally di3 vided between, and controlled by, the mover and the

4 manager of the resolution. In the event the manager

5 of the resolution is in favor of any such motion or

6 appeal, the time in opposition thereto shall be con7 trolled by the minority leader or his designee. Such

8 leaders, or either of them, may, from the time under

9 their control on the passage of such resolution, allot

10 additional time to any Senator during the consider11 ation of any debatable motion or appeal. No amend12 ment to the resolution is in order.

13 ‘‘(3) If, after the Committee on the Budget has

14 reported (or been discharged from further consider15 ation of) the resolution, the Senate agrees to the

16 resolution, then subsection (a) shall not apply with

17 respect to the bill or resolution (or amendment

18 thereto) to which the resolution so agreed to applies.

19 ‘‘SEC. 304. PERMISSIBLE REVISIONS OF CONCURRENT RES20 OLUTIONS ON THE BUDGET.

21 ‘‘The two Houses may adopt a concurrent resolution

22 on the budget which revises or reaffirms the concurrent

23 resolution on the budget most recently agreed to and

24 which satisfies the requirements of section 301.
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1 ‘‘SEC. 305. PROVISIONS RELATING TO THE CONSIDERATION

2 OF CONCURRENT RESOLUTIONS ON THE

3 BUDGET.

4 ‘‘(a) PROCEDURE IN HOUSE OF REPRESENTATIVES

5 AFTER REPORT OF COMMITTEE; DEBATE.—

6 ‘‘(1) When the Committee on the Budget of the

7 House of Representatives has reported any concur8 rent resolution on the budget, it is in order subject

9 to clause (2)(l)(6) of rule XI of the Rules of the

10 House of Representatives to move that the House

11 resolve itself into the Committee of the Whole House

12 on the State of the Union for the consideration of

13 the concurrent resolution. The motion is highly priv14 ileged and is not debatable. An amendment to the

15 motion is not in order, and it is not in order to move

16 to reconsider the vote by which the motion is agreed

17 to or disagreed to. A motion to resolve into the Com18 mittee of the Whole may be made even though a

19 previous motion has been disagreed to.

20 ‘‘(2) General debate on any concurrent resolu21 tion on the budget in the House of Representatives

22 shall be limited to not more than 10 hours, which

23 shall be divided equally between the majority and

24 minority parties, and such additional hours of debate

25 as are consumed pursuant to paragraph (3). A mo26 tion further to limit debate is not debatable.
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1 ‘‘(3) Following the presentation of opening

2 statements on the concurrent resolution on the

3 budget for a fiscal year by the chairman and rank4 ing minority member of the Committee on the Budg5 et of the House, there shall be a period of up to four

6 hours for debate on economic goals and policies.

7 ‘‘(4) Only if a concurrent resolution on the

8 budget reported by the Committee on the Budget of

9 the House sets forth the economic goals (as de10 scribed in sections 3(a)(2) and (4)(b) of the Full

11 Employment Act of 1946) which the estimates,

12 amounts, and levels (as described in section 301(a))

13 set forth in such resolution are designed to achieve,

14 shall it be in order to offer to such resolution an

15 amendment relating to such goals, and such amend16 ment shall be in order only if it also proposes to

17 alter such estimates, amounts, and levels in germane

18 fashion in order to be consistent with the goals pro19 posed in such amendment.

20 ‘‘(5) Consideration of any concurrent resolution

21 on the budget by the House of Representatives shall

22 be in the Committee of the Whole, and the resolu23 tion shall be considered for amendment under the

24 five-minute rule in accordance with the applicable

25 provisions of rule XXIII of the Rules of the House
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1 of Representatives. After the Committee rises and fi2 nally reports the resolution back to the House, the

3 previous question shall be considered as ordered on

4 the resolution and any amendments thereto to final

5 passage without intervening motion; except that it

6 shall be in order at any time prior to final passage

7 (notwithstanding any other rule or provision of law)

8 to consider an amendment (or a series of amend9 ments) changing any figure or figures in the resolu10 tion as so reported to the extent necessary solely to

11 achieve mathematical consistency. The concurrent

12 resolution is not divisible in the House or in the

13 Committee of the Whole. A motion to recommit the

14 concurrent resolution is not in order, and it is not

15 in order to move to reconsider the vote by which the

16 concurrent resolution is agreed to or disagreed to.

17 ‘‘(6) Debate in the House of Representatives on

18 a conference report on a concurrent resolution on

19 the budget shall be limited to not more than 5

20 hours, which shall be divided equally between the

21 majority and minority parties. A motion further to

22 limit debate is not debatable. A motion to recommit

23 the conference report is not in order, and it is not

24 in order to move to reconsider the vote by which the

25 conference report is agreed to or disagreed to.
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1 ‘‘(7) Appeals from decisions of the Chair relat2 ing to the application of the Rules of the House of

3 Representatives to the procedure relating to any con4 current resolution on the budget shall be decided

5 without debate.

6 ‘‘(b) PROCEDURE IN SENATE AFTER REPORT OF

7 COMMITTEE; DEBATE; AMENDMENTS.—

8 ‘‘(1) Debate in the Senate on any concurrent

9 resolution on the budget, and all amendments there10 to and debatable motions and appeals in connection

11 therewith, shall be limited to not more than 50

12 hours, except that with respect to any concurrent

13 resolution referred to in section 304(a) all such de14 bate shall be limited to not more than 15 hours. The

15 time shall be equally divided between, and controlled

16 by, the majority leader and the minority leader or

17 their designees.

18 ‘‘(2) Debate in the Senate on any amendment

19 to a concurrent resolution on the budget shall be

20 limited to 2 hours, to be equally divided between,

21 and controlled by, the mover and the manager of the

22 concurrent resolution, and debate on any amend23 ment to an amendment, debatable motion, or appeal

24 shall be limited to 1 hour, to be equally divided be25 tween, and controlled by, the mover and the man-
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1 ager of the concurrent resolution, except that in the

2 event the manager of the concurrent resolution is in

3 favor of any such amendment, motion, or appeal, the

4 time in opposition thereto shall be controlled by the

5 minority leader or his designee. No amendment that

6 is not germane to the provisions of such concurrent

7 resolution shall be received. Such leaders, or either

8 of them, may, from the time under their control on

9 the passage of the concurrent resolution, allot addi10 tional time to any Senator during the consideration

11 of any amendment, debatable motion, or appeal.

12 ‘‘(3) Following the presentation of opening

13 statements on the concurrent resolution on the

14 budget for a fiscal year by the chairman and rank15 ing minority member of the Committee on the Budg16 et of the Senate, there shall be a period of up to

17 four hours for debate on economic goals and policies.

18 ‘‘(4) Subject to the other limitations of this Act,

19 only if a concurrent resolution on the budget re20 ported by the Committee on the Budget of the Sen21 ate sets forth the economic goals (as described in

22 sections 3(a)(2) and 4(b) of the Employment Act of

23 1946) which the estimates, amounts, and levels (as

24 described in section 301(a)) set forth in such resolu25 tion are designed to achieve, shall it be in order to
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1 offer to such resolution an amendment relating to

2 such goals, and such amendment shall be in order

3 only if it also proposes to alter such estimates,

4 amounts, and levels in germane fashion in order to

5 be consistent with the goals proposed in such

6 amendment.

7 ‘‘(5) A motion to further limit debate is not de8 batable. A motion to recommit (except a motion to

9 recommit with instructions to report back within a

10 specified number of days, not to exceed 3, not count11 ing any day on which the Senate is not in session)

12 is not in order. Debate on any such motion to re13 commit shall be limited to 1 hour, to be equally di14 vided between, and controlled by, the mover and the

15 manager of the concurrent resolution.

16 ‘‘(6) Notwithstanding any other rule, an

17 amendment or series of amendments to a concurrent

18 resolution on the budget proposed in the Senate

19 shall always be in order if such amendment or series

20 of amendments proposes to change any figure or fig21 ures then contained in such concurrent resolution so

22 as to make such concurrent resolution mathemati23 cally consistent or so as to maintain such

24 consistency.
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1 ‘‘(c) ACTION ON CONFERENCE REPORTS IN THE

2 SENATE.—

3 ‘‘(1) A motion to proceed to the consideration

4 of the conference report on any concurrent resolu5 tion on the budget (or a reconciliation bill or resolu6 tion) may be made even though a previous motion

7 to the same effect has been disagreed to.

8 ‘‘(2) During the consideration in the Senate of

9 the conference report (or a message between

10 Houses) on any concurrent resolution on the budget,

11 and all amendments in disagreement, and all amend12 ments thereto, and debatable motions and appeals in

13 connection therewith, debate shall be limited to 10

14 hours, to be equally divided between, and controlled

15 by, the majority leader and minority leader or their

16 designees. Debate on any debatable motion or appeal

17 related to the conference report (or a message be18 tween Houses) shall be limited to 1 hour, to be

19 equally divided between, and controlled by, the

20 mover and the manager of the conference report (or

21 a message between Houses).

22 ‘‘(3) Should the conference report be defeated,

23 debate on any request for a new conference and the

24 appointment of conferees shall be limited to 1 hour,

25 to be equally divided between, and controlled by, the
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•HR 2264 EH

1 manager of the conference report and the minority

2 leader or his designee, and should any motion be

3 made to instruct the conferees before the conferees

4 are named, debate on such motion shall be limited

5 to one-half hour, to be equally divided between, and

6 controlled by, the mover and the manager of the

7 conference report. Debate on any amendment to any

8 such instructions shall be limited to 20 minutes, to

9 be equally divided between and controlled by the

10 mover and the manager of the conference report. In

11 all cases when the manager of the conference report

12 is in favor of any motion, appeal, or amendment, the

13 time in opposition shall be under the control of the

14 minority leader or his designee.

15 ‘‘(4) In any case in which there are amend16 ments in disagreement, time on each amendment

17 shall be limited to 30 minutes, to be equally divided

18 between, and controlled by, the manager of the con19 ference report and the minority leader or his des20 ignee. No amendment that is not germane to the

21 provisions of such amendments shall be received.

22 ‘‘(d) CONCURRENT RESOLUTION MUST BE CONSIST23 ENT IN THE SENATE.—It shall not be in order in the Sen24 ate to vote on the question of agreeing to—
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1 ‘‘(1) a concurrent resolution on the budget un2 less the figures then contained in such resolution are

3 mathematically consistent; or

4 ‘‘(2) a conference report on a concurrent resolu5 tion on the budget unless the figures contained in

6 such resolution, as recommended in such conference

7 report, are mathematically consistent.

8 ‘‘SEC. 306. LEGISLATION DEALING WITH CONGRESSIONAL

9 BUDGET MUST BE HANDLED BY BUDGET

10 COMMITTEES.

11 ‘‘No bill, resolution, amendment, motion, or con12 ference report dealing with any matter which is within the

13 jurisdiction of the Committee on the Budget of either

14 House shall be considered in that House unless it is a bill

15 or resolution which has been reported by the Committee

16 on the Budget of that House (or from the consideration

17 of which such committee has been discharged) or unless

18 it is an amendment to such a bill or resolution.

19 ‘‘SEC. 307. HOUSE COMMITTEE ACTION ON ALL APPROPRIA20 TION BILLS TO BE COMPLETED BY JUNE 10.

21 ‘‘On or before June 10 of each year, the Committee

22 on Appropriations of the House of Representatives shall

23 report annual appropriation bills providing new budget au24 thority under the jurisdiction of all of its subcommittees

25 for the fiscal year which begins on October 1 of that year.
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1 ‘‘SEC. 308. REPORTS, SUMMARIES, AND PROJECTIONS OF

2 CONGRESSIONAL BUDGET ACTIONS.

3 ‘‘(a) REPORTS ON LEGISLATION PROVIDING NEW

4 BUDGET AUTHORITY OR PROVIDING AN INCREASE OR

5 DECREASE IN REVENUES OR TAX EXPENDITURES.—

6 ‘‘(1) Whenever a committee of either House re7 ports to its House a bill or joint resolution providing

8 new budget authority (other than continuing appro9 priations) or providing an increase or decrease in

10 revenues or tax expenditures for a fiscal year (or fis11 cal years), the report accompanying that bill or joint

12 resolution shall contain—

13 ‘‘(A) a cost statement comparing the levels

14 in such measure as recommended by that com15 mittee to the appropriate allocations and sub16 divisions submitted under subsections (a) and

17 (b) of section 302 or the appropriate allocation

18 pursuant to section 311(a) for the most re19 cently agreed to concurrent resolution on the

20 budget; or

21 ‘‘(B) the Congressional Budget Office cost

22 estimate required in section 202(f)(5), if timely

23 submitted before such report is filed.

24 ‘‘(2) Whenever a conference report is filed in ei25 ther House and such conference report or any

26 amendment reported in disagreement or any motion
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•HR 2264 EH

1 printed in the joint statement of managers to dis2 pose of such amendment on such bill or resolution

3 provides new budget authority (other than continu4 ing appropriations) or provides an increase or de5 crease in revenues for a fiscal year (or fiscal years),

6 the statement of managers accompanying such con7 ference report shall contain the information required

8 by paragraph (1), if available on a timely basis. If

9 such information is not available when the con10 ference report is filed, the committee shall make

11 such information available to Members as soon as

12 practicable.

13 ‘‘(b) UP-TO-DATE TABULATIONS OF CONGRES14 SIONAL BUDGET ACTION.—

15 ‘‘(1) The Director of the Congressional Budget

16 Office shall issue to the committees of the House of

17 Representatives and the Senate reports on at least

18 a monthly basis detailing and tabulating the

19 progress of congressional action on bills and resolu20 tions providing new budget authority or providing an

21 increase or decrease in revenues or tax expenditures

22 for each fiscal year covered by a concurrent resolu23 tion on the budget. Such reports shall include but

24 are not limited to an up-to-date tabulation compar25 ing the appropriate aggregate and functional levels
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1 (including outlays) included in the most recently

2 adopted concurrent resolution on the budget with

3 the levels provided in bills and resolutions reported

4 by committees or adopted by either House or by the

5 Congress, and with the levels provided by law for the

6 fiscal year preceding the first fiscal year covered by

7 the appropriate concurrent resolution.

8 ‘‘(2) The Committee on the Budget of each

9 House shall make available to Members of its House

10 summary budget scorekeeping reports. Such

11 reports—

12 ‘‘(A) shall be made available on at least a

13 monthly basis, but in any case frequently

14 enough to provide Members of each House an

15 accurate representation of the current status of

16 congressional consideration of revenue and

17 spending measures;

18 ‘‘(B) shall include, but are not limited to

19 summaries of tabulations provided under sub20 section (b)(1); and

21 ‘‘(C) shall be based on information pro22 vided under subsection (b)(1) without sub23 stantive revision.

24 The chairman of the Committee on the Budget of

25 the House of Representatives shall submit such re-
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•HR 2264 EH

1 ports to the Speaker and such reports shall be print2 ed in the Congressional Record.

3 ‘‘SEC. 309. HOUSE APPROVAL OF REGULAR APPROPRIA4 TION BILLS.

5 ‘‘In order that all annual appropriation bills may be

6 considered and approved by the House of Representatives

7 by June 30, bills authorizing budget authority contained

8 in those appropriation bills should be reported to the

9 House of Representatives by May 15.

10 ‘‘SEC. 310. RECONCILIATION.

11 ‘‘(a) INCLUSION OF RECONCILIATION DIRECTIVES IN

12 CONCURRENT RESOLUTIONS ON THE BUDGET.—A con13 current resolution on the budget for any fiscal year, to

14 the extent necessary to effectuate the provisions and re15 quirements of such resolution, shall—

16 ‘‘(1) specify the total amount by which direct

17 spending contained in laws within the jurisdiction of

18 a committee is to be increased or decreased and di19 rect that committee to determine and recommend

20 changes to accomplish a change of such total

21 amount;

22 ‘‘(2) specify the total amount by which revenues

23 are to be increased or decreased and direct that the

24 committees having jurisdiction to determine and rec-
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•HR 2264 EH

1 ommend changes in the revenue laws to accomplish

2 a change of such total amount;

3 ‘‘(3) specify the amounts by which the statutory

4 limit on the public debt is to be increased or de5 creased and direct the committee having jurisdiction

6 to recommend such change; or

7 ‘‘(4) specify and direct any combination of the

8 matters described in paragraphs (1), (2), and (3)

9 (including a direction to achieve deficit reduction).

10 ‘‘(b) LEGISLATIVE PROCEDURE.—If a concurrent

11 resolution containing directives to one or more committees

12 to determine and recommend changes in laws is agreed

13 to in accordance with subsection (a) and—

14 ‘‘(1) only one committee of the House or the

15 Senate is directed to determine and recommend

16 changes, that committee shall promptly make such

17 determination and recommendations and report to

18 its House reconciliation measure containing such

19 recommendations; or

20 ‘‘(2) more than one committee of the House or

21 the Senate is directed to determine and recommend

22 changes, each such committee so directed shall

23 promptly make such determination and rec24 ommendations and submit such recommendations to

25 the Committee on the Budget of its House, which
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•HR 2264 EH

1 upon receiving all such recommendations, shall re2 port to its House a reconciliation measure carrying

3 out all such recommendations without any sub4 stantive revision.

5 ‘‘(c) AMENDMENTS TO RECONCILIATION BILLS.—

6 ‘‘(1) It shall not be in order in the House of

7 Representatives to consider any amendment to a rec8 onciliation bill if such amendment would have the ef9 fect of increasing direct spending above the level of

10 such direct spending provided in the bill (for the fis11 cal years covered by the reconciliation instructions

12 set forth in the most recently agreed to concurrent

13 resolution on the budget), or would have the effect

14 of reducing any specific Federal revenues below the

15 level of such revenues provided in the bill (for such

16 fiscal years), unless such amendment makes at least

17 an equivalent reduction in other direct spending, an

18 equivalent increase in other specific Federal reve19 nues, or an equivalent combination thereof (for such

20 fiscal years). A motion to strike a provision provid21 ing new budget authority may be in order.

22 ‘‘(2) It shall not be in order in the Senate to

23 consider any amendment to a reconciliation bill if

24 such amendment would have the effect of decreasing

25 any direct spending reductions below the level of
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•HR 2264 EH

1 such direct spending reductions provided (for the fis2 cal years covered) in the reconciliation instructions

3 which relate to such bill set forth in a resolution

4 providing for reconciliation, or would have the effect

5 of reducing Federal revenue increases below the level

6 of such revenue increases provided (for such fiscal

7 years) in such instructions relating to such bill, un8 less such amendment makes a reduction in other di9 rect spending, an increase in other specific Federal

10 revenues, or a combination thereof (for such fiscal

11 years) at least equivalent to any increase in direct

12 spending or decrease in revenues provided by such

13 amendment, except that a motion to strike a provi14 sion shall always be in order.

15 ‘‘(3) Paragraphs (1) and (2) shall not apply if

16 a declaration of war by the Congress is in effect.

17 ‘‘(4) For purposes of this section, the levels of

18 direct spending and Federal revenues for a fiscal

19 year shall be determined on the basis of estimates

20 made by the Committee on the Budget of either

21 House, as the case may be.

22 ‘‘(5) If a committee or committees of the House

23 fail to meet its directive in recommended changes it

24 has submitted to its Committee on the Budget pur25 suant to its instruction, the Committee on Rules of
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1 the House of Representatives may recommend that

2 the House make in order amendments to achieve

3 changes specified by reconciliation directives con4 tained in a concurrent resolution on the budget.

5 ‘‘(d) PROCEDURE IN THE SENATE.—

6 ‘‘(1) Except as provided in paragraph (2), the

7 provisions of section 305 for the consideration in the

8 Senate of concurrent resolutions on the budget and

9 conference reports thereon shall also apply to the

10 consideration in the Senate of reconciliation bills re11 ported under subsection (b) and conference reports

12 thereon.

13 ‘‘(2) Debate in the Senate on any reconciliation

14 bill reported under subsection (b), and all amend15 ments thereto and debatable motions and appeals in

16 connection therewith, shall be limited to not more

17 than 20 hours.

18 ‘‘(e) LIMITATION ON CHANGES TO THE SOCIAL SE19 CURITY ACT.—Notwithstanding any other provision of

20 law, it shall not be in order in the Senate or the House

21 of Representatives to consider any reconciliation bill re22 ported pursuant to a concurrent resolution on the budget

23 agreed to under section 301 or 304, or any amendment

24 thereto or conference report thereon, that contains rec25 ommendations to reduce benefits under the old-age, survi-
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•HR 2264 EH

1 vors, and disability insurance program established under

2 title II of the Social Security Act.

3 ‘‘SEC. 311. DIRECT SPENDING AND REVENUE LEGISLATION

4 MUST BE WITHIN APPROPRIATE LEVELS.

5 ‘‘(a) COMMITTEE ALLOCATIONS.—The joint explana6 tory statement accompanying a conference report on a

7 budget resolution shall include an allocation, consistent

8 with the resolution recommended in the conference report,

9 of the appropriate deficit impact number (or surplus im10 pact number) for the budget year and a total for all fiscal

11 years covered by that resolution for each committee of

12 each House of Congress, except for the Committees on Ap13 propriations. Any item assumed in an allocation to one

14 committee may not be assumed in an allocation to another

15 committee of the same House.

16 ‘‘(b) DISPLAY ALLOCATIONS.—The joint explanatory

17 statement accompanying a conference report on a budget

18 resolution may include an allocation for display purposes

19 only, consistent with the resolution recommended in the

20 conference report, of the total amount of direct spending

21 and revenue under existing law within the jurisdiction of

22 each committee.

23 ‘‘(c) LEGISLATION SUBJECT TO POINT OF ORDER.—

24 ‘‘(1) It shall not be in order in the House of

25 Representatives or the Senate to consider any bill or
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1 joint resolution or amendment increasing the deficit

2 (or lowering the surplus) in any fiscal year covered

3 by the most recently agreed to concurrent resolution

4 on the budget, or any motion or conference report

5 on any such bill or joint resolution, if it would

6 produce a higher deficit (or lower surplus) than an

7 appropriate impact number allocated pursuant to

8 subsection (a).

9 ‘‘(2) A bill, joint resolution, amendment, or con10 ference report shall be considered to exceed an ap11 propriate impact number only if—

12 ‘‘(A) the enactment of such bill or resolu13 tion in the form it will be considered as original

14 text for purposes of amendment;

15 ‘‘(B) the amendment is not an amendment

16 considered as original text for purposes of

17 amendment and the adoption of such amend18 ment and enactment of the bill or joint resolu19 tion as so amended; or

20 ‘‘(C) the enactment of such bill or resolu21 tion in the form recommended in such con22 ference report,

23 would cause an appropriate impact number allocated pur24 suant to subsection (a) to be exceeded.
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1 ‘‘(d) DETERMINATIONS BY BUDGET COMMITTEES.—

2 For purposes of this section, impact numbers shall be de3 termined on the basis of estimates made by the Committee

4 on the Budget of either House, as the case may be.

5 ‘‘SEC. 312. EFFECTS OF POINTS OF ORDER.

6 ‘‘(a) POINTS OF ORDER IN THE SENATE AGAINST

7 AMENDMENTS BETWEEN THE HOUSES.—Each provision

8 of this Act that establishes a point of order against an

9 amendment also establishes a point of order in the Senate

10 against an amendment between the Houses. If a point of

11 order under this Act is raised in the Senate against an

12 amendment between the Houses, and the Presiding Officer

13 sustains the point of order, the effect shall be the same

14 as if the Senate had disagreed to the amendment.

15 ‘‘(b) EFFECT OF A POINT OF ORDER ON A BILL IN

16 THE SENATE.—In the Senate, if the Chair sustains a

17 point of order under this Act against a bill, the Chair shall

18 then send the bill to the committee of appropriate jurisdic19 tion for further consideration.

20 ‘‘SEC. 313. EXTRANEOUS MATTER IN RECONCILIATION LEG21 ISLATION.

22 ‘‘(a) IN GENERAL.—When the Senate is considering

23 a reconciliation bill or a reconciliation resolution pursuant

24 to section 310 (whether that bill or resolution originated

25 in the Senate or the House) or section 258C of the Bal-
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1 anced Budget and Emergency Deficit Control Act of 1985,

2 upon a point of order being made by any Senator against

3 material extraneous to the instructions to a committee

4 which is contained in any title or provision of the bill or

5 resolution or offered as an amendment to the bill or reso6 lution, and the point of order is sustained by the Chair,

7 any part of said title or provision that contains material

8 extraneous to the instructions to said Committee as de9 fined in subsection (b) shall be deemed stricken from the

10 bill and may not be offered as an amendment from the

11 floor.

12 ‘‘(b) EXTRANEOUS PROVISIONS.—

13 ‘‘(1)(A) Except as provided in paragraph (2), a

14 provision of a reconciliation bill or reconciliation res15 olution considered pursuant to section 310 shall be

16 considered extraneous if such provision does not

17 produce a change in outlays or revenue, including

18 changes in outlays and revenues brought about by

19 changes in the terms and conditions under which

20 outlays are made or revenues are required to be col21 lected (but a provision in which outlay decreases or

22 revenue increases exactly offset outlay increases or

23 revenue decreases shall not be considered extraneous

24 by virtue of this subparagraph); (B) any provision

25 producing an increase in outlays or decrease in reve-
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1 nues shall be considered extraneous if the net effect

2 of provisions reported by the Committee reporting

3 the title containing the provision is that the Commit4 tee fails to achieve its reconciliation instructions; (C)

5 a provision that is not in the jurisdiction of the

6 Committee with jurisdiction over said title or provi7 sion shall be considered extraneous; (D) a provision

8 shall be considered extraneous if it produces changes

9 in outlays or revenues which are merely incidental to

10 the non-budgetary components of the provision; (E)

11 a provision shall be considered to be extraneous if it

12 increases, or would increase, net outlays, or if it de13 creases, or would decrease, revenues during a fiscal

14 year after the fiscal years covered by such reconcili15 ation bill or reconciliation resolution, and such in16 creases or decreases are greater than outlay reduc17 tions or revenue increases resulting from other pro18 visions in such title in such year; and (F) a provi19 sion shall be considered extraneous if it violates sec20 tion 310(e).

21 ‘‘(2) A Senate-originated provision shall not be

22 considered extraneous under paragraph (1)(A) if the

23 Chairman and Ranking Minority Member of the

24 Committee on the Budget and the Chairman and

25 Ranking Minority Member of the Committee which
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1 reported the provision certify that: (A) the provision

2 mitigates direct effects clearly attributable to a pro3 vision changing outlays or revenue and both provi4 sions together produce a net reduction in the deficit;

5 (B) the provision will result in a substantial reduc6 tion in outlays or a substantial increase in revenues

7 during fiscal years after the fiscal years covered by

8 the reconciliation bill or reconciliation resolution; (C)

9 a reduction of outlays or an increase in revenues is

10 likely to occur as a result of the provision, in the

11 event of new regulations authorized by the provision

12 or likely to be proposed, court rulings on pending

13 litigation, or relationships between economic indices

14 and stipulated statutory triggers pertaining to the

15 provision, other than the regulations, court rulings

16 or relationships currently projected by the Congres17 sional Budget Office for scorekeeping purposes; or

18 (D) such provision will be likely to produce a signifi19 cant reduction in outlays or increase in revenues

20 but, due to insufficient data, such reduction or in21 crease cannot be reliably estimated.

22 ‘‘(3) A provision reported by a committee shall

23 not be considered extraneous under paragraph

24 (1)(C) if (A) the provision is an integral part of a

25 provision or title, which if introduced as a bill or res-
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1 olution would be referred to such committee, and the

2 provision sets forth the procedure to carry out or

3 implement the substantive provisions that were re4 ported and which fall within the jurisdiction of such

5 committee; or (B) the provision states an exception

6 to, or a special application of, the general provision

7 or title of which it is a part and such general provi8 sion or title if introduced as a bill or resolution

9 would be referred to such committee.

10 ‘‘(c) EXTRANEOUS MATERIALS.—Upon the reporting

11 or discharge of a reconciliation bill or resolution pursuant

12 to section 310 in the Senate, and again upon the submis13 sion of a conference report on such a reconciliation bill

14 or resolution, the Committee on the Budget of the Senate

15 shall submit for the record a list of material considered

16 to be extraneous under subsections (b)(1)(A), (b)(1)(B),

17 and (b)(1)(E) of this section to the instructions of a com18 mittee as provided in this section. The inclusion or exclu19 sion of a provision shall not constitute a determination of

20 extraneousness by the Presiding Officer of the Senate.

21 ‘‘(d) CONSIDERATION OF CONFERENCE REPORTS.—

22 When the Senate is considering a conference report on,

23 or an amendment between the Houses in relation to, a

24 reconciliation bill or reconciliation resolution pursuant to

25 section 310, upon—
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1 ‘‘(1) a point of order being made by any Sen2 ator against extraneous material meeting the defini3 tion of subsections (b)(1)(A), (b)(1)(B), (b)(1)(D),

4 (b)(1)(E), or (b)(1)(F), and

5 ‘‘(2) such point of order being sustained,

6 such material contained in such conference report or

7 amendment shall be deemed stricken, and the Senate shall

8 proceed, without intervening action or motion, to consider

9 the question of whether the Senate shall recede from its

10 amendment and concur with a further amendment, or con11 cur in the House amendment with a further amendment,

12 as the case may be, which further amendment shall consist

13 of only that portion of the conference report or House

14 amendment, as the case may be, not so stricken. Any such

15 motion in the Senate shall be debatable for two hours. In

16 any case in which such point of order is sustained against

17 a conference report (or Senate amendment derived from

18 such conference report by operation of this subsection),

19 no further amendment shall be in order.

20 ‘‘(e) GENERAL POINT OF ORDER.—Notwithstanding

21 any other law or rule of the Senate, it shall be in order

22 for a Senator to raise a single point of order that several

23 provisions of a bill, resolution, amendment, motion, or con24 ference report violate this section. The Presiding Officer

25 may sustain the point of order as to some or all of the
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1 provisions against which the Senator raised the point of

2 order. If the Presiding Officer so sustains the point of

3 order as to some of the provisions (including provisions

4 of an amendment, motion, or conference report) against

5 which the Senator raised the point of order, then only

6 those provisions (including provisions of an amendment,

7 motion, or conference report) against which the Presiding

8 Officer sustains the point of order shall be deemed strick9 en pursuant to this section. Before the Presiding Officer

10 rules on such a point of order, any Senator may move to

11 waive such a point of order as it applies to some or all

12 of the provisions against which the point of order was

13 raised. Such a motion to waive is amendable in accordance

14 with the rules and precedents of the Senate. After the Pre15 siding Officer rules on such a point of order, any Senator

16 may appeal the ruling of the Presiding Officer on such

17 a point of order as it applies to some or all of the provi18 sions on which the Presiding Officer ruled.

19 ‘‘(f) DETERMINATION OF LEVELS.—For purposes of

20 this section, the levels of new budget authority, budget

21 outlays, new entitlement authority, and revenues for a fis22 cal year shall be determined on the basis of estimates

23 made by the Committee on the Budget of the Senate.’’.
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1 SEC. 15204. CONTROL OF BACKDOOR SPENDING.

2 Title IV of the Congressional Budget Act of 1974 is

3 amended to read as follows:

4 ‘‘TITLE IV—CONTROL OF

5 BACKDOOR SPENDING

6 ‘‘SEC. 401. BILLS PROVIDING NEW SPENDING AUTHORITY.

7 ‘‘(a) CONTROLS ON LEGISLATION PROVIDING

8 SPENDING AUTHORITY.—

9 ‘‘(1) It shall not be in order in the House of

10 Representatives or the Senate to consider any bill,

11 joint resolution, amendment, motion, or conference

12 report which provides contract or borrowing author13 ity, unless that bill, resolution, conference report, or

14 amendment also provides that such contract or bor15 rowing authority is to be effective for any fiscal year

16 only to such extent or in such amounts as are pro17 vided in advance in appropriation Acts.

18 ‘‘(2) A bill, joint resolution, amendment, or con19 ference report shall be considered to violate para20 graph (1) only if—

21 ‘‘(A) the enactment of such bill or resolu22 tion in the form it will be considered as original

23 text for purposes of amendment;

24 ‘‘(B) the amendment is not an amendment

25 considered as original text for purposes of

26 amendment and the adoption of such amend-
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1 ment and enactment of the bill or joint resolu2 tion as so amended; or

3 ‘‘(C) the enactment of such bill or resolu4 tion in the form recommended in such con5 ference report;

6 would cause such a violation.

7 ‘‘(b) EXCEPTIONS.—

8 ‘‘(1) Subsection (a) shall not apply to contract

9 or borrowing authority if that authority is derived—

10 ‘‘(A) from a trust fund established by the

11 Social Security Act (as in effect on the date of

12 the enactment of this Act); or

13 ‘‘(B) from any other trust fund, 90 percent

14 or more of the noninterest receipts of which

15 consist or will consist of amounts (transferred

16 from the general fund of the Treasury) equiva17 lent to amounts of taxes (related to the pur18 poses for which such outlays are or will be

19 made) received in the Treasury under specified

20 provisions of the Internal Revenue Code of

21 1954.

22 ‘‘(2) Subsection (a) shall not apply to contract

23 or borrowing authority to the extent that—

24 ‘‘(A) the outlays resulting therefrom are

25 made by an organization which is (i) a mixed-
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1 ownership Government corporation (as defined

2 in section 201 of the Government Corporation

3 Control Act), or (ii) a wholly owned Govern4 ment corporation (as defined in section 101 of

5 such Act) which is specifically exempted by law

6 from compliance with any or all of the provi7 sions of that Act, as of the date of enactment

8 of the Budget Enforcement Act of 1993; or

9 ‘‘(B) the outlays resulting therefrom con10 sist exclusively of the proceeds of gifts or be11 quests made to the United States for a specific

12 purpose.

13 ‘‘SEC. 402. LEGISLATION PROVIDING NEW CREDIT AUTHOR14 ITY.

15 ‘‘(a) POINT OF ORDER.—It shall not be in order in

16 the House of Representatives or the Senate to consider

17 any bill, joint resolution, amendment, motion, or con18 ference report which provides new credit authority, unless

19 that bill, resolution, conference report, or amendment also

20 provides that such new credit authority is to be effective

21 for any fiscal year only to such extent or in such amounts

22 as are provided in appropriation Acts in accordance with

23 section 504.
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1 ‘‘(b) APPLICABILITY.—A bill, joint resolution,

2 amendment, or conference report shall be considered to

3 violate subsection (a) only if—

4 ‘‘(1) the enactment of such bill or resolution in

5 the form it will be considered as original text for

6 purposes of amendment;

7 ‘‘(2) the amendment is not an amendment con8 sidered as original text for purposes of amendment

9 and the adoption of such amendment and enactment

10 of the bill or joint resolution as so amended; or

11 ‘‘(3) the enactment of such bill or resolution in

12 the form recommended in such conference report;

13 would cause such a violation.

14 ‘‘SEC. 403. OFF-BUDGET AGENCIES, PROGRAMS, AND AC15 TIVITIES.

16 ‘‘(a) Notwithstanding any other provision of law,

17 budget authority, credit authority, and estimates of out18 lays and receipts for activities of the Federal budget which

19 are off-budget immediately prior to the date of enactment

20 of the Balanced Budget and Emergency Deficit Control

21 Act of 1985, not including activities of the Federal Old22 Age and Survivors Insurance and Federal Disability In23 surance Trust Funds and the United States Postal Serv24 ice, shall be included in a budget submitted pursuant to

25 section 1105 of title 31, United States Code, and in a con-
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1 current resolution on the budget reported pursuant to sec2 tion 301 or section 304 of this Act and shall be considered,

3 for purposes of this Act, budget authority, outlays, and

4 spending authority in accordance with definitions set forth

5 in this Act.

6 ‘‘(b) All receipts and disbursements of the Federal

7 Financing Bank with respect to any obligations which are

8 issued, sold, or guaranteed by a Federal agency shall be

9 treated as a means of financing such agency for purposes

10 of section 1105 of title 31, United States Code, and for

11 purposes of this Act.

12 ‘‘(c) Notwithstanding any other provision of law, re13 ceipts and disbursements of the Hospital Insurance Trust

14 Fund shall be included in all calculations required by this

15 Act.’’.

16 SEC. 15205. TITLE V OF THE CONGRESSIONAL BUDGET ACT

17 OF 1974.

18 (a) SECTION 502.—Section 502 of the Congressional

19 Budget Act of 1974 is amended—

20 (1) in paragraph (5)(A), by inserting ‘‘or a

21 modification thereof’’ after ‘‘loan guarantee’’;

22 (2) in paragraph (5)(B), by striking ‘‘recover23 ies.’’ and inserting the following: ‘‘recoveries, and

24 routine work-outs of troubled loans or loans in immi25 nent danger of default when those work-outs are to
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1 maximize repayments to the Government; and shall

2 include anticipated changes in loan terms resulting

3 from the exercise by the borrower of an option in4 cluded in the loan contract.’’;

5 (3) in paragraph (5)(C), by striking ‘‘, and ’’ at

6 the end of clause (i), by striking the period at the

7 end of clause (ii) and inserting ‘‘; and’’ and by in8 serting at the end the following:

9 ‘‘(iii) routine work-outs of troubled loans

10 or loans in imminent danger of default when

11 those work-outs are to minimize claims against

12 the Government; and shall include anticipated

13 changes in loan terms resulting from the exer14 cise by the borrower of an option included in

15 the loan contract.’’;

16 (4) by striking subparagraph (D) and inserting

17 the following new subparagraph:

18 ‘‘(D) The cost of modification of a direct loan,

19 a direct loan obligation, a loan guarantee, or a loan

20 guarantee commitment shall be the net present

21 value, at the time of the modification, of the change

22 in cash flows estimated to occur as a result of that

23 modification.’’;

24 (5) in paragraph (8), is amended by inserting

25 at the end the following new sentence: ‘‘Transactions
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1 between any financing account and any liquidating

2 account shall be considered non-budgetary.’’; and

3 (6) by redesignating paragraph (9) as para4 graph (10) and by inserting after paragraph (8) the

5 following:

6 ‘‘(9) The term ‘modification’ means any Gov7 ernment action resulting from new legislation or

8 from the exercise of administrative options under ex9 isting law that directly or indirectly alters the ex10 pected cash flows associated with an outstanding di11 rect loan, direct loan obligation, loan guarantee, or

12 loan guarantee commitment. Modifications include

13 the sale (with or without recourse) of loan assets

14 held by the Government and the purchase by the

15 Government of guaranteed loans. Modifications do

16 not include amounts for routine work-outs of trou17 bled loans or loans in imminent danger of default,

18 or changes in loan terms from the exercise by the

19 borrower of an option included in the loan contract.’’

20 (b) SECTION 504.—Section 504 of the Congressional

21 Budget Act of 1974 is amended—

22 (1) in subsection (b)(1), by striking ‘‘appropria23 tions of’’ and inserting ‘‘new’’, by striking ‘‘are

24 made’’ and inserting ‘‘is provided’’, and by inserting

25 ‘‘in appropriation Acts’’ before the semicolon;
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1 (2) in subsection (b)(2), by striking ‘‘enacted’’

2 and inserting ‘‘provided in an appropriation Act’’;

3 (3) in subsection (d)(1), by striking ‘‘costs of

4 outstanding direct loans and loan guarantees’’ and

5 inserting ‘‘costs of outstanding direct loans (or di6 rect loan obligations) or loan guarantees (or loan

7 guarantee commitments)’’; and

8 (4) in subsection (e), by striking ‘‘A direct loan

9 obligation or loan guarantee commitment’’ and in10 serting ‘‘An outstanding direct loan (or direct loan

11 obligation) or loan guarantee (or loan guarantee

12 commitment)’’, by inserting ‘‘new’’ before ‘‘budget

13 authority’’, by striking the comma after ‘‘appro14 priated’’, and by striking ‘‘or from other budgetary

15 resources’’.

16 (c) SECTION 505.—Section 505 of the Congressional

17 Budget Act of 1974 is amended—

18 (1) in the side heading of subsection (b), by in19 serting ‘‘AND LIQUIDATING’’ before ‘‘ACCOUNTS’’;

20 (2) in subsection (c), by inserting at the end of

21 the second sentence, before the period, the following:

22 ‘‘, except that the rate of interest charged by the

23 secretary on lending to financing accounts (including

24 amounts treated as lending to financing accounts by

25 the Federal Financing Bank (the Bank) pursuant to
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1 section 403(b) of the Congressional Budget Act of

2 1974) and the rate of interest paid to financing ac3 counts on uninvested balances in financing accounts

4 shall be the same as the rate determined pursuant

5 to section 502(5)(E). For guaranteed loans financed

6 by the Bank and treated as direct loans by a Fed7 eral agency pursuant to section 403(b) of the Con8 gressional Budget Act of 1974, any fee or interest

9 surcharge (the amount by which the interest rate

10 charged exceeds the rate determined pursuant to

11 section 502(5)(E)) that the Bank charges to a pri12 vate borrower pursuant to section 6(c) of the Fed13 eral Financing Bank Act of 1973 shall be considered

14 a cash flow to the Government for the purposes of

15 determining the cost of the direct loan pursuant to

16 section 502(5) of this Act. All such amounts shall be

17 credited to the appropriate financing account. The

18 Bank is authorized to require reimbursement from a

19 Federal agency to cover the administrative expenses

20 of the Bank that are attributable to the direct loans

21 financed for that agency. All such payments by an

22 agency shall be considered administrative expenses

23 subject to section 504(g).’’;

24 (3) at the end of subsection (c), by inserting

25 the following: ‘‘This subsection shall apply to trans-
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1 actions related to direct loan obligations or loan

2 guarantee commitments made on or after October 1,

3 1991.’’; and

4 (4) in subsection (d), by striking ‘‘If funds in

5 liquidating accounts are insufficient to satisfy the

6 obligations and commitments of said accounts,

7 there’’ and inserting ‘‘There’’ and by striking ‘‘such

8 obligations and commitments’’ and inserting ‘‘the

9 obligations and commitments of liquidating ac10 counts’’.

11 (d) SECTION 506.—Section 506 of the Congressional

12 Budget Act of 1974 is repealed.

13 (e) SECTION 507.—Section 507 of the Congressional

14 Budget Act of 1974 is redesignated as section 506 and

15 is amended to read as follows:

16 ‘‘SEC. 506. EFFECT ON OTHER LAWS.

17 ‘‘(a) EFFECT ON OTHER LAWS.—This title shall su18 persede, modify, or repeal any provision of law enacted

19 prior to the date of enactment of this title to the extent

20 such provision is inconsistent with this title, except that

21 nothing in this title shall be construed (1) to alter the

22 terms or conditions authorized to be included in loan or

23 guarantee contracts or the rights and responsibilities of

24 the Government and the recipients of loans or guarantees

25 under those contracts or the laws that authorize them, or
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1 (2) to establish a credit limitation on any Federal loan

2 or loan guarantee program.

3 ‘‘(b) CREDITING OF COLLECTIONS.—Collections re4 sulting from direct loans obligated or loan guarantees

5 committed prior to October 1, 1991, shall be credited to

6 the liquidating accounts of Federal agencies. Periodically

7 and as appropriate, amounts so credited shall be trans8 ferred to the Federal Financing Bank to repay those debt

9 obligations held by the Bank that were created to finance

10 the loan being repaid, and all amounts not transferred to

11 the Bank shall be transferred to the general fund of the

12 Treasury. All intragovernmental debt owed to the Treas13 ury by Federal agencies (but not by the public) as a result

14 of loans or guarantees made before October 1, 1991, is

15 hereby canceled and all prepayment penalties are waived.

16 The provisions of this subsection shall not diminish any

17 rights or responsibilities guaranteed by subsection (a).’’.

18 SEC. 15206. DISCRETIONARY SPENDING LIMITS.

19 Title VI of the Congressional Budget Act of 1974 is

20 amended to read as follows:

21 ‘‘TITLE VI—DISCRETIONARY

22 SPENDING LIMITS

23 ‘‘SEC. 601. DISCRETIONARY SPENDING LIMITS.

24 ‘‘As used in this title and for purposes of the Budget

25 Enforcement Act of 1993, discretionary spending limits,
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1 measured in terms of new budget authority and outlays,

2 are as follows:

Fiscal Year

Limits (in millions of dollars)

New budget

authority Outlays

1994 ............................................................... 500,964 538,688

1995 ............................................................... 506,287 541,137

1996 ............................................................... 519,142 547,263

1997 ............................................................... 528,079 547,346

1998 ............................................................... 530,639 547,870

3 ‘‘SEC. 602. EFFECT OF ADJUSTMENTS ON CONSIDERATION

4 OF CERTAIN LEGISLATION IN EITHER HOUSE

5 OF CONGRESS.

6 ‘‘For purposes of congressional consideration of legis7 lation containing any provision subject to any of para8 graphs (3) through (7) of section 251(b) or to section

9 252(a)(4) of the Balanced Budget and Emergency Deficit

10 Control Act of 1985, determinations under titles III and

11 IV shall not take into account any new budget authority,

12 outlays, receipts, or deficit effects in any fiscal year of that

13 provision.’’.

14 SEC. 15207. CONTINUING STUDY OF BUDGET REFORM PRO15 POSALS.

16 Title VII of the Congressional Budget Act of 1974

17 is amended by repealing sections 701 and 702 and by re18 designating section 703 as section 701.
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1 SEC. 15208. SOCIAL SECURITY PROTECTION.

2 (a) REDESIGNATIONS.—Sections 13301(a) and

3 13302 of the Budget Enforcement Act of 1990 are redes4 ignated as sections 801 and 802 of the Congressional

5 Budget Act of 1974.

6 (b) CHANGE OF TITLE VIII’S HEADING.—The head7 ing of title VIII of the Congressional Budget Act of 1974

8 is amended to read as follows:

9 ‘‘TITLE VIII—SOCIAL SECURITY

10 PROTECTION’’.

11 SEC. 15209. RULEMAKING POWER.

12 (a) SECTION 904.—Section 904(a) of the Congres13 sional Budget Act of 1974 is amended by striking ‘‘V, and

14 VI (except section 601(a))’’ and inserting ‘‘V, and VIII’’

15 and by striking ‘‘701, 703,’’ and inserting ‘‘602, 703,’’.

16 SEC. 15210. CONFORMING AMENDMENTS TO THE CONGRES17 SIONAL BUDGET AND IMPOUNDMENT CON18 TROL ACT OF 1974.

19 (a) TITLE III.—Section 1(b) of the Congressional

20 Budget and Impoundment Control Act of 1974 is amend21 ed by striking the items relating to title III and inserting

22 the following new items:

‘‘TITLE III—CONGRESSIONAL BUDGET PROCESS

‘‘Sec. 300. Timetable.

‘‘Sec. 301. Annual adoption of concurrent resolution on the budget.

‘‘Sec. 302. Appropriation committee allocations and enforcement.

‘‘Sec. 303. Legislation providing new budget authority or changes in revenues

or the public debt limit may only do so for years covered by

most recent budget resolution.
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‘‘Sec. 304. Permissible revisions of concurrent resolutions on the budget.

‘‘Sec. 305. Provisions relating to the consideration of concurrent resolutions on

the budget.

‘‘Sec. 306. Legislation dealing with congressional budget must be handled by

budget committees.

‘‘Sec. 307. House committee action on all appropriation bills to be completed

by June 10.

‘‘Sec. 308. Reports, summaries, and projections of congressional budget actions.

‘‘Sec. 309. House approval of regular appropriation bills.

‘‘Sec. 310. Reconciliation.

‘‘Sec. 311. Direct spending and revenue legislation must be within appropriate

levels.

‘‘Sec. 312. Effects of points of order.

‘‘Sec. 313. Extraneous matter in reconciliation legislation.

1 (b) TITLE IV.—Section 1(b) of the Congressional

2 Budget and Impoundment Control Act of 1974 is amend3 ed by striking the items relating to title IV and inserting

4 the following new items:

‘‘TITLE IV—CONTROL OF BACKDOOR SPENDING

‘‘Sec. 401. Bills providing new spending authority.

‘‘Sec. 402. Legislation providing new credit authority.

‘‘Sec. 403. Off-budget agencies, programs, and activities.

5 (c) TITLE VI.—Section 1(b) of the Congressional

6 Budget and Impoundment Control Act of 1974 is amend7 ed by striking the items relating to title VI and inserting

8 the following new items:

‘‘TITLE VI—DISCRETIONARY SPENDING LIMITS

‘‘Sec. 601. Discretionary spending limits.

‘‘Sec. 602. Effect of adjustments on consideration of certain legislation in either

House of Congress.

9 (d) TITLE VIII.—Section 1(b) of the Congressional

10 Budget and Impoundment Control Act of 1974 is amend11 ed by striking the items relating to title VIII and inserting

12 the following new items:

‘‘TITLE VIII—SOCIAL SECURITY PROTECTION
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‘‘Sec. 801. Off-budget status of OASDI trust funds.

‘‘Sec. 802. Protection of OASDI trust funds in the House of Representatives.

1 SEC. 15211. CONFORMING AMENDMENTS TO THE RULES OF

2 THE HOUSE OF REPRESENTATIVES.

3 The Rules of the House of Representatives are

4 amended as follows:

5 (1) The first sentence of clause 4(g) of rule X

6 is amended by striking ‘‘February 25 of each year’’

7 and inserting ‘‘six weeks after the President’s budg8 et submission’’.

9 (2) Clause 2(l)(3)(B) of rule XI is amended by

10 striking ‘‘section 308(a)(1)’’ and inserting ‘‘section

11 308(a)(1)(A)’’.

12 (3) The first sentence of clause 2(l)(6) of rule

13 XI is amended by striking ‘‘, or as provided by sec14 tion 305(a)(1) of the Congressional Budget Act of

15 1974 in the case of a concurrent resolution on the

16 budget’’.

17 (4) Rule XI is amended by adding at the end

18 the following new clause:

19 ‘‘Amendments may not increase deficit

20 ‘‘7. Before any amendments are offered to a measure

21 under consideration by a standing committee or when a

22 standing committee is adopting written rules governing its

23 procedures, the chairman may entertain a motion requir24 ing that any amendment to a measure or matter before
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1 the committee not have the effect of increasing any direct

2 spending above the level of such direct spending provided

3 in such measure or matter or have the effect of reducing

4 any revenues below the level of such revenues provided in

5 the measure or matter, unless such amendment makes at

6 least an equivalent reduction in other direct spending, an

7 equivalent increase in other revenues, or an equivalent

8 combination thereof. A majority of the members of the

9 committee shall be present to adopt such a motion.’’.

10 (5) Clause 8 of rule XXIII is amended to read

11 as follows:

12 ‘‘8. At the conclusion of general debate in a Commit13 tee of the Whole on a concurrent resolution on the budget

14 within the meaning of the Congressional Budget Act of

15 1974, the concurrent resolution shall be considered as

16 read for amendment. It shall not be in order in the House

17 or in a Committee of the Whole to consider an amendment

18 to a concurrent resolution on the budget, or an amend19 ment to an amendment, unless the concurrent resolution

20 as amended by such amendment or amendments (1) would

21 be mathematically consistent (subject to the third sentence

22 of this clause); and (2) would contain all the matter set

23 forth in paragraphs (1) through (5) of section 301(a) of

24 the Congressional Budget Act of 1974. It shall not be in

25 order in the House or in a Committee of the Whole to
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1 consider an amendment to such a concurrent resolution

2 on the budget, or an amendment to an amendment, that

3 would change the amount set forth as the appropriate level

4 of the public debt, except that an amendment to achieve

5 mathematical consistency as permitted under section

6 305(a)(5) of the Congressional Budget Act of 1974, if of7 fered at the direction of the Committee on the Budget,

8 may include an appropriate adjustment of that amount to

9 reflect any changes made in other amounts in the

10 resolution.’’.

11 (6) Rule XLIX is amended—

12 (A) in clause 2, by striking ‘‘a limitation’’

13 and inserting ‘‘an amount’’; by striking

14 ‘‘301(a)(5)’’ and inserting ‘‘301(b)(3)’’; and by

15 striking ‘‘; and, if’’ and all that follows through

16 the period and inserting a period;

17 (B) in clause 3, by striking ‘‘clause 1’’ and

18 inserting ‘‘clause 1)’’; and

19 (C) in clause 4, by striking ‘‘clause 1’’ and

20 inserting ‘‘clause 1)’’.

21 SEC. 15212. EFFECTIVE DATE.

22 The amendments made by this subtitle shall be effec23 tive upon enactment for fiscal year 1994 and subsequent

24 fiscal years.
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1 Subtitle C—Deficit Reduction

2 Trust Fund

3 SEC. 15301. DEFICIT REDUCTION TRUST FUND.

4 (a) A trust fund known as the ‘‘Deficit Reduction

5 Trust Fund’’ (the ‘‘Fund’’) shall be established for the

6 purposes of guaranteeing that the net deficit reduction re7 quired by the Omnibus Budget Reconciliation Act of 1993

8 is fully achieved.

9 (b) The Fund shall consist only of amounts equal to

10 the net deficit reduction, calculated pursuant to the proce11 dures set forth in subsection (c), that is estimated to re12 sult from the Omnibus Budget Reconciliation Act of 1993.

13 Such amounts shall be transferred to the Fund as speci14 fied in subsection (c).

15 (c) Within 10 days of enactment of the Omnibus

16 Budget Reconciliation Act of 1993—

17 (1) the Director of the Office of Management

18 and Budget shall determine the sum of the net defi19 cit reduction that results from the enactment of the

20 Omnibus Budget Deficit Reduction Act of 1993; and

21 (2) there shall be transferred from the general

22 fund to the Fund an amount equal to the sum deter23 mined in paragraph (1).

24 (d) Notwithstanding any other provision of law, the

25 amounts in the Fund shall not be available, in any fiscal
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1 year, for appropriation, obligation, expenditure, or trans2 fer, but may be used exclusively to redeem securities pre3 viously issued by the Treasury of the United States when

4 they mature.

5 (e) Amounts in the Fund, as determined by the Di6 rector of the Office of Management and Budget, that re7 sult from the net total of direct spending and receipts pro8 visions calculated according to the provisions of section

9 252 of the Balanced Budget and Emergency Deficit Con10 trol Act of 1985, as amended (the ‘‘Act’’), shall be ex11 cluded from, and shall not be counted for purposes of, the

12 totals under section 252 and sections 254(d)(3) and

13 254(g)(3) of the Act.

14 (f) Establishment of and transfers to the Fund as

15 authorized by this section shall not affect trust fund trans16 fers that may be authorized or required by provisions of

17 the Omnibus Reconciliation Act of 1993 other than this

18 section.

19 (g) Section 1105(a) of title 31, United States Code,

20 is amended by adding at the end thereof:

21 ‘‘(27) information about, and a separate state22 ment of amounts in, and Federal debt redeemed by,

23 the Deficit Reduction Trust Fund.’’.
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1 TITLE XVI—BUDGET CONTROL

2 SEC. 16001. SHORT TITLE; PURPOSE.

3 (a) SHORT TITLE.—This title may be cited as the

4 ‘‘Budget Control Act of 1993’’.

5 (b) PURPOSE.—The purpose of this title is to create

6 a mechanism to monitor total costs of direct spending pro7 grams, and, in the event that actual or projected costs ex8 ceed targeted levels, to require the President and Congress

9 to address adjustments in direct spending.

10 SEC. 16002. ESTABLISHMENT OF DIRECT SPENDING TAR11 GETS.

12 (a) IN GENERAL.—The initial direct spending targets

13 for each of fiscal years 1994 through 1997 shall equal

14 total outlays for all direct spending except net interest and

15 deposit insurance as determined by the Director of the Of16 fice of Management and Budget (hereinafter referred to

17 in this title as the ‘‘Director‘‘) under subsection (b).

18 (b) INITIAL REPORT BY DIRECTOR.—

19 (1) Not later than 30 days after the date of en20 actment of this Act, the Director shall submit a re21 port to Congress setting forth projected direct

22 spending targets for each of fiscal years 1994

23 through 1997.

24 (2) The Director’s projections shall be based on

25 legislation enacted as of 5 days before the report is
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1 submitted under paragraph (1). To the extent fea2 sible, the Director shall use the same economic and

3 technical assumptions used in preparing the concur4 rent resolution on the budget for fiscal year 1994

5 (H.Con.Res. 64).

6 (c) ADJUSTMENTS.—Direct spending targets shall be

7 subsequently adjusted by the Director under section

8 16006.

9 SEC. 16003. ANNUAL REVIEW OF DIRECT SPENDING AND

10 RECEIPTS BY PRESIDENT.

11 As part of each budget submitted under section

12 1105(a) of title 31, United States Code, the President

13 shall provide an annual review of direct spending and re14 ceipts, which shall include (1) information supporting the

15 adjustment of direct spending targets pursuant to section

16 16006, (2) information on total outlays for programs cov17 ered by the direct spending targets, including actual out18 lays for the prior fiscal year and projected outlays for the

19 current fiscal year and the 5 succeeding fiscal years, and

20 (3) information on the major categories of Federal re21 ceipts, including a comparison between the levels of those

22 receipts and the levels projected as of the date of enact23 ment of this Act.
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1 SEC. 16004. SPECIAL DIRECT SPENDING MESSAGE BY

2 PRESIDENT.

3 (a) TRIGGER.—In the event that the information sub4 mitted by the President under section 16003 indicates—

5 (1) that actual outlays for direct spending in

6 the prior fiscal year exceeded the applicable direct

7 spending target, or

8 (2) that outlays for direct spending for the cur9 rent or budget year are projected to exceed the ap10 plicable direct spending targets,

11 the President shall include in his budget a special direct

12 spending message meeting the requirements of subsection

13 (b).

14 (b) CONTENTS.—

15 (1) The special direct spending message shall

16 include:

17 (A) An explanation of any adjustments to

18 the direct spending targets pursuant to section

19 16006.

20 (B) An analysis of the variance in direct

21 spending over the adjusted direct spending tar22 gets.

23 (C) The President’s recommendations for

24 addressing the direct spending overages, if any,

25 in the prior, current, or budget year.
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1 (2) The President’s recommendations may con2 sist of any of the following:

3 (A) Proposed legislative changes to reduce

4 outlays, increase revenues, or both, in order to

5 recoup or eliminate the overage for the prior,

6 current, and budget years in the current year,

7 the budget year, and the 4 outyears.

8 (B) Proposed legislative changes to reduce

9 outlays, increase revenues, or both, in order to

10 recoup or eliminate part of the overage for the

11 prior, current, and budget year in the current

12 year, the budget year, and the 4 outyears, ac13 companied by a finding by the President that,

14 because of economic conditions or for other

15 specified reasons, only some of the overage

16 should be recouped or eliminated by outlay re17 ductions or revenue increases, or both.

18 (C) A proposal to make no legislative

19 changes to recoup or eliminate any overage, ac20 companied by a finding by the President that,

21 because of economic conditions or for other

22 specified reasons, no legislative changes are

23 warranted.

24 (3) Any proposed legislative change under para25 graph (2) to reduce outlays may include reductions
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1 in direct spending or in the discretionary spending

2 limits under section 601 of the Congressional Budg3 et Act of 1974.

4 (c) PROPOSED SPECIAL DIRECT SPENDING RESOLU5 TION.—

6 (1) PRESIDENT’S RECOMMENDATIONS TO BE

7 SUBMITTED AS DRAFT RESOLUTION.—If the Presi8 dent recommends reductions consistent with sub9 section (b)(2)(A) or (B), the special direct spending

10 message shall include the text of a special direct

11 spending resolution implementing the President’s

12 recommendations through reconciliation directives

13 instructing the appropriate committees of the House

14 of Representatives and Senate to determine and rec15 ommend changes in laws within their jurisdictions to

16 reduce outlays or increase revenues by specified

17 amounts. If the President recommends no reductions

18 pursuant to (b)(2)(C), the special direct spending

19 message shall include the text of a special resolution

20 concurring in the President’s recommendation of no

21 legislative action.

22 (2) RESOLUTION TO BE INTRODUCED IN

23 HOUSE.—Within 10 days after the President’s spe24 cial direct spending message is submitted, the text

25 required by paragraph (1) shall be introduced as a
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1 concurrent resolution in the House of Representa2 tives by the chairman of the Committee on the

3 Budget of the House of Representatives without sub4 stantive revision. If the chairman fails to do so, after

5 the tenth day the resolution may be introduced by

6 any Member of the House of Representatives. A con7 current resolution introduced under this paragraph

8 shall be referred to the Committee on the Budget.

9 SEC. 16005. REQUIRED RESPONSE BY CONGRESS.

10 (a) REQUIREMENT FOR SPECIAL DIRECT SPENDING

11 RESOLUTION.—Whenever the President submits a special

12 direct spending message under section 16004, the Com13 mittee on the Budget of the House of Representatives

14 shall report, not later than April 15, the concurrent reso15 lution on the budget and include in it a separate title that

16 meets the requirements of subsections (b) and (c).

17 (b) CONTENTS OF SEPARATE TITLE.—The separate

18 title of the concurrent resolution on the budget shall con19 tain reconciliation directives to the appropriate committees

20 of the House of Representatives and Senate to determine

21 and recommend changes in laws within their jurisdictions

22 to reduce outlays or increase revenues by specified

23 amounts (which in total equal or exceed the reductions

24 recommended by the President, up to the amount of the

25 overage). If this separate title recommends that no legisla-
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1 tive changes be made to recoup or eliminate an overage,

2 then a statement to that effect shall be set forth in that

3 title.

4 (c) REQUIREMENT FOR SEPARATE VOTE TO IN5 CREASE TARGETS.—If the separate title of a concurrent

6 resolution on the budget proposes to recoup or eliminate

7 less than the entire overage for the prior, current, and

8 budget years, then the Committee on the Budget of the

9 House of Representatives shall report a resolution direct10 ing the Committee on Government Operations to report

11 legislation increasing the direct spending targets for each

12 applicable year by the full amount of the overage not re13 couped or eliminated. It shall not be in order in the House

14 of Representatives to consider that concurrent resolution

15 on the budget until the House of Representatives has

16 agreed to the resolution directing the increase in direct

17 spending targets.

18 (d) CONFERENCE REPORTS MUST FULLY ADDRESS

19 OVERAGE.—It shall not be in order in the House of Rep20 resentatives to consider a conference report on a concur21 rent resolution on the budget unless that conference report

22 fully addresses the entirety of any overage contained in

23 the applicable report of the President under section 16004

24 through reconciliation directives requiring spending reduc-
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1 tions, revenue increases, or changes in the direct spending

2 targets.

3 (e) PROCEDURE IF HOUSE BUDGET COMMITTEE

4 FAILS TO REPORT REQUIRED RESOLUTION.—

5 (1) AUTOMATIC DISCHARGE OF HOUSE BUDGET

6 COMMITTEE.—If a special direct spending resolution

7 is required and the Committee on the Budget of the

8 House of Representatives fails to report a resolution

9 meeting the requirements of subsections (b) and (c)

10 by April 15, then the committee shall be automati11 cally discharged from further consideration of the

12 concurrent resolution reflecting the President’s rec13 ommendations introduced pursuant to section

14 16004(c)(2) and the concurrent resolution shall be

15 placed on the appropriate calendar.

16 (2) CONSIDERATION BY HOUSE.—Ten days

17 after the Committee on the Budget of the House of

18 Representatives has been discharged under para19 graph (1), any Member may move that the House

20 proceed to consider the resolution. Such motion shall

21 be highly privileged and not debatable.

22 (f) APPLICATION OF CONGRESSIONAL BUDGET

23 ACT.—To the extent that they are relevant and not incon24 sistent with this title, the provisions of title III of the Con25 gressional Budget Act of 1974 shall apply in the House
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1 of Representatives and the Senate to special direct spend2 ing resolutions, resolutions increasing targets under sub3 section (c), and reconciliation legislation reported pursu4 ant to directives contained in those resolutions.

5 SEC. 16006. ADJUSTMENTS TO DIRECT SPENDING TARGETS.

6 (a) REQUIRED ANNUAL ADJUSTMENTS.—Prior to

7 the submission of the President’s budget for each of fiscal

8 years 1995 through 1997, the Director shall adjust the

9 direct spending targets in accordance with this section.

10 Any such adjustments shall be reflected in the targets

11 used in the President’s report under section 16003 and

12 message (if any) under section 16004.

13 (b) ADJUSTMENT FOR INCREASES IN BENE14 FICIARIES.—

15 (1) The Director shall adjust the direct spend16 ing targets for increases (if any) in actual or pro17 jected numbers of beneficiaries under direct spend18 ing programs for which the number of beneficiaries

19 is a variable in determining costs.

20 (2) The adjustment shall be made by —

21 (A) computing, for each program under

22 paragraph (1), the percentage change between

23 (i) the annual average number of beneficiaries

24 under that program (including actual numbers

25 of beneficiaries for the prior fiscal year and pro-
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1 jections for the budget and subsequent fiscal

2 years) to be used in the President’s budget with

3 which the adjustments will be submitted, and

4 (ii) the annual average number of beneficiaries

5 used in the adjustments made by the Director

6 in the previous year (or, in the case of adjust7 ments made in 1994, the annual average num8 ber of beneficiaries used in the Director’s initial

9 report under section 16002(b));

10 (B) applying the percentages computed

11 under subparagraph (A) to the projected levels

12 of outlays for each program consistent with the

13 direct spending targets in effect immediately

14 prior to the adjustment; and

15 (C) adding the results of the calculations

16 required by subparagraph (B) to the direct

17 spending targets in effect immediately prior to

18 the adjustment.

19 (3) No adjustment shall be made for any pro20 gram for a fiscal year in which the percentage in21 crease computed under paragraph (2)(A) is less than

22 or equal to zero.

23 (c) ADJUSTMENTS FOR REVENUE LEGISLATION.—

24 (1) The Director shall adjust the targets as

25 follows—
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1 (A) they shall be increased by the amount

2 of any increase in receipts; or

3 (B) they shall be decreased by the amount

4 of any decrease in receipts,

5 resulting from receipts legislation enacted after the date

6 of enactment of this title, except legislation enacted under

7 section 16005.

8 (d) ADJUSTMENTS TO REFLECT CONGRESSIONAL

9 DECISIONS.—Upon enactment of a reconciliation bill pur10 suant to instructions under section 16005, the Director

11 shall adjust direct spending targets for the current year,

12 the budget year, and each outyear through 1997 by—

13 (1) increasing the target for the current year

14 and the budget year by the amount stated for that

15 year in that reconciliation bill (but if a separate vote

16 was required by section 16005(c), only if that vote

17 has occurred); and

18 (2) decreasing the target for the current, budg19 et, and outyears through 1997 by the amount of re20 ductions in direct spending enacted in that reconcili21 ation bill.

22 (e) DESIGNATED EMERGENCIES.—The Director shall

23 adjust the targets to reflect the costs of legislation that

24 is designated as an emergency by Congress and the Presi-
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1 dent under section 252(b) of the Balanced Budget and

2 Emergency Deficit Control Act of 1985.

3 SEC. 16007. RELATIONSHIP TO BALANCED BUDGET AND

4 EMERGENCY DEFICIT CONTROL ACT.

5 Reductions in outlays or increases in receipts result6 ing from legislation reported pursuant to section 16005

7 shall not be taken into account for purposes of any budget

8 enforcement procedures under the Balanced Budget and

9 Emergency Deficit Control Act of 1985.

10 SEC. 16008. ESTIMATING MARGIN.

11 For any fiscal year for which the overage is less than

12 one-half of 1 percent of the direct spending target for that

13 year, the procedures set forth in sections 16004 and

14 16005 shall not apply.

15 SEC. 16009. CONSIDERATION OF APPROPRIATION BILLS.

16 (a) POINT OF ORDER.—It shall not be in order in

17 the House of Representatives to consider any general ap18 propriation bill if the President has submitted a direct

19 spending message under section 16004 until Congress has

20 adopted a concurrent resolution on the budget for the

21 budget year that meets the requirements of section 16005.

22 (b) WAIVER.—The point of order established by sub23 section (a) may only be waived for all general appropria24 tion bills for that budget year through the adoption of one

25 resolution waiving that point of order.
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1 SEC. 16010. MEANS-TESTED PROGRAMS.

2 In making recommendations under sections 16004

3 and 16005, the President and the Congress should seri4 ously consider all other alternatives before proposing re5 ductions in means-tested programs.

6 SEC. 16011. EFFECTIVE DATE.

7 This title shall apply to direct spending targets for

8 fiscal years 1994 through 1997 and shall expire at the

9 end of fiscal year 1997.

Passed the House of Representatives May 27, 1993.

Attest

Clerk.

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