150 
1860D–2(e)(1) of the Social Security Act (42 U.S.C. 
1395w–102(e)(1)) is amended, in the matter following 
subparagraph (B), by inserting ‘‘(and, for vaccines admin-
istered on or after January 1, 2008, its administration)’’ 
after ‘‘Public Health Service Act’’. 
SEC. 203. OIG STUDY OF NEVER EVENTS. 
(a) STUDY.— 
(1) IN
GENERAL.—The Inspector General in 
the Department of Health and Human Services shall 
conduct a study on— 
(A) incidences of never events for Medicare 
beneficiaries, including types of such events and 
payments by any party for such events; 
(B) the extent to which the Medicare pro-
gram paid, denied payment, or recouped pay-
ment for services furnished in connection with 
such events and the extent to which bene-
ficiaries paid for such services; and 
(C) the administrative processes of the 
Centers for Medicare & Medicaid Services to de-
tect such events and to deny or recoup pay-
ments for services furnished in connection with 
such an event. 
(2) CONDUCT OF STUDY.—In conducting the 
study under paragraph (1), the Inspector General— 
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151 
(A) shall audit a representative sample of 
claims and medical records of Medicare bene-
ficiaries to identify never events and any pay-
ment (or recoupment) for services furnished in 
connection with such events; 
(B) may request access to such claims and 
records from any Medicare contractor; and 
(C) shall not release individually identifi-
able information or facility-specific information. 
(b) REPORT.—Not later than 2 years after the date 
of the enactment of this Act, the Inspector General shall 
submit a report to Congress on the study conducted under 
this section. Such report shall include recommendations 
for such legislation and administrative action, such as a 
noncoverage policy or denial of payments, as the Inspector 
General determines appropriate, including— 
(1) recommendations on processes to identify 
never events and to deny or recoup payments for 
services furnished in connection with such events; 
and 
(2) a recommendation on a potential process (or 
processes) for public disclosure of never events 
which— 
(A) will ensure protection of patient pri-
vacy; and 
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152 
(B) will permit the use of the disclosed in-
formation for a root cause analysis to inform 
the public and the medical community about 
safety issues involved. 
(c) FUNDING.—Out of any funds in the Treasury not 
otherwise appropriated, there are appropriated to the In-
spector General of the Department of Health and Human 
Services $3,000,000 to carry out this section, to be avail-
able until January 1, 2010. 
(d) NEVER EVENTS DEFINED.—For purposes of this 
section, the term ‘‘never event’’ means an event that is 
listed and endorsed as a serious reportable event by the 
National Quality Forum as of November 16, 2006. 
SEC. 204. MEDICARE MEDICAL HOME DEMONSTRATION 
PROJECT. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the ‘‘Sec-
retary’’) shall establish under title XVIII of the Social Se-
curity Act a medical home demonstration project (in this 
section referred to as the ‘‘project’’) to redesign the health 
care delivery system to provide targeted, accessible, con-
tinuous and coordinated, family-centered care to high-need 
populations and under which— 
(1) care management fees are paid to persons 
performing services as personal physicians; and 
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153 
(2) incentive payments are paid to physicians 
participating in practices that provide services as a 
medical home under subsection (d). 
For purposes of this subsection, the term ‘‘high-need pop-
ulation’’ means individuals with multiple chronic illnesses 
that require regular medical monitoring, advising, or 
treatment. 
(b) DETAILS.— 
(1) DURATION; SCOPE.—The project shall oper-
ate during a period of three years and shall include 
urban, rural, and underserved areas in a total of no 
more than 8 States. 
(2) ENCOURAGING
PARTICIPATION
OF
SMALL 
PHYSICIAN
PRACTICES.—The project shall be de-
signed to include the participation of physicians in 
practices with fewer than three full-time equivalent 
physicians, as well as physicians in larger practices 
particularly in rural and underserved areas. 
(c) PERSONAL PHYSICIAN DEFINED.— 
(1) IN GENERAL.—For purposes of this section, 
the term ‘‘personal physician’’ means a physician (as 
defined in section 1861(r)(1) of the Social Security 
Act (42 U.S.C. 1395x(r)(1)) who— 
(A) meets the requirements described in 
paragraph (2); and 
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154 
(B) performs the services described in 
paragraph (3). 
Nothing in this paragraph shall be construed as pre-
venting such a physician from being a specialist or 
subspecialist for an individual requiring ongoing care 
for a specific chronic condition or multiple chronic 
conditions (such as severe asthma, complex diabetes, 
cardiovascular disease, rheumatologic disorder) or 
for an individual with a prolonged illness. 
(2) REQUIREMENTS.—The requirements de-
scribed in this paragraph for a personal physician 
are as follows: 
(A) The physician is a board certified phy-
sician who provides first contact and continuous 
care for individuals under the physician’s care. 
(B) The physician has the staff and re-
sources to manage the comprehensive and co-
ordinated health care of each such individual. 
(3) SERVICES PERFORMED.—A personal physi-
cian shall perform or provide for the performance of 
at least the following services: 
(A) Advocates for and provides ongoing 
support, oversight, and guidance to implement 
a plan of care that provides an integrated, co-
herent, cross-discipline plan for ongoing medical 
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155 
care developed in partnership with patients and 
including all other physicians furnishing care to 
the patient involved and other appropriate med-
ical personnel or agencies (such as home health 
agencies). 
(B) Uses evidence-based medicine and clin-
ical decision support tools to guide decision- 
making at the point-of-care based on patient- 
specific factors. 
(C) Uses health information technology, 
that may include remote monitoring and patient 
registries, to monitor and track the health sta-
tus of patients and to provide patients with en-
hanced and convenient access to health care 
services. 
(D) Encourages patients to engage in the 
management of their own health through edu-
cation and support systems. 
(d) MEDICAL HOME DEFINED.—For purposes of this 
section, the term ‘‘medical home’’ means a physician prac-
tice that— 
(1) is in charge of targeting beneficiaries for 
participation in the project; and 
(2) is responsible for— 
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156 
(A) providing safe and secure technology 
to promote patient access to personal health in-
formation; 
(B) developing a health assessment tool for 
the individuals targeted; and 
(C) providing training programs for per-
sonnel involved in the coordination of care. 
(e) PAYMENT MECHANISMS.— 
(1) PERSONAL PHYSICIAN CARE MANAGEMENT 
FEE.—Under the project, the Secretary shall provide 
for payment under section 1848 of the Social Secu-
rity Act (42 U.S.C. 1395w–4) of a care management 
fee to personal physicians providing care manage-
ment under the project. Under such section and 
using the relative value scale update committee 
(RUC) process under such section, the Secretary 
shall develop a care management fee code for such 
payments and a value for such code. 
(2) MEDICAL HOME SHARING IN SAVINGS.—The 
Secretary shall provide for payment under the 
project of a medical home based on the payment 
methodology applied to physician group practices 
under section 1866A of the Social Security Act (42 
U.S.C. 1395cc–1). Under such methodology, 80 per-
cent of the reductions in expenditures under title 
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157 
XVIII of the Social Security Act resulting from par-
ticipation of individuals that are attributable to the 
medical home (as reduced by the total care manage-
ments fees paid to the medical home under the 
project) shall be paid to the medical home. The 
amount of such reductions in expenditures shall be 
determined by using assumptions with respect to re-
ductions in the occurrence of health complications, 
hospitalization rates, medical errors, and adverse 
drug reactions. 
(3) SOURCE.—Payments paid under the project 
shall be made from the Federal Supplementary Med-
ical Insurance Trust Fund under section 1841 of the 
Social Security Act (42 U.S.C. 1395t). 
(f) EVALUATIONS AND REPORTS.— 
(1) ANNUAL INTERIM EVALUATIONS AND RE-
PORTS.—For each year of the project, the Secretary 
shall provide for an evaluation of the project and 
shall submit to Congress, by a date specified by the 
Secretary, a report on the project and on the evalua-
tion of the project for each such year. 
(2) FINAL
EVALUATION
AND
REPORT.—The 
Secretary shall provide for an evaluation of the 
project and shall submit to Congress, not later than 
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158 
one year after completion of the project, a report on 
the project and on the evaluation of the project. 
SEC. 205. MEDICARE DRA TECHNICAL CORRECTIONS. 
(a) PACE CLARIFICATION.—Paragraph (7) of sec-
tion 5302(c) of the Deficit Reduction Act of 2005 (42 
U.S.C. 1395eee note) is amended to read as follows: 
‘‘(7) APPROPRIATION.— 
‘‘(A) IN GENERAL.—Out of funds in the 
Treasury not otherwise appropriated, there are 
appropriated to the Secretary $10,000,000 to 
carry out this subsection for the period of fiscal 
years 2006 through 2010. 
‘‘(B) AVAILABILITY.—Funds appropriated 
under subparagraph (A) shall remain available 
for obligation through fiscal year 2010.’’. 
(b) MISCELLANEOUS TECHNICAL CORRECTIONS.— 
(1) CORRECTION OF MARGIN (SECTION 5001).— 
Section 1886(b)(3)(B) of the Social Security Act (42 
U.S.C. 1395ww(b)(3)(B)), as amended by section 
5001(a) of the Deficit Reduction Act of 2005 (Pub-
lic Law 109–171), is amended by moving clause 
(viii) (including subclauses (I) through (VII) of such 
clause) 6 ems to the left. 
(2) REFERENCE CORRECTION (SECTION 5114).— 
Section 5114(a)(2) of the Deficit Reduction Act of 
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159 
2005 (Public Law 109–171), in the matter pre-
ceding subparagraph (A), is amended by striking 
‘‘1842(b)(6)(F) 
of 
such 
Act 
(42 
U.S.C. 
1395u(b)(6)(F))’’ and inserting ‘‘1842(b)(6) of such 
Act (42 U.S.C. 1395u(b)(6))’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in the enact-
ment of the Deficit Reduction Act of 2005 (Public Law 
109–171). 
TITLE III—MEDICARE PROGRAM 
INTEGRITY EFFORTS 
SEC. 301. OFFSETTING ADJUSTMENT IN MEDICARE ADVAN-
TAGE STABILIZATION FUND. 
Section 1858(e)(2)(A)(i) of the Social Security Act 
(42 U.S.C. 1395w-27a(e)(2)(A)(i)) is amended by striking 
‘‘2007,’’ and ‘‘$10,000,000,000’’ and inserting ‘‘2012,’’ 
and ‘‘$3,500,000,000’’, respectively. 
SEC. 302. EXTENSION AND EXPANSION OF RECOVERY 
AUDIT CONTRACTOR PROGRAM UNDER THE 
MEDICARE INTEGRITY PROGRAM. 
(a) IN GENERAL.—Section 1893 of the Social Secu-
rity Act (42 U.S.C. 1395ddd) is amended by adding at 
the end the following new subsection: 
‘‘(h) USE OF RECOVERY AUDIT CONTRACTORS.— 
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160 
‘‘(1) IN GENERAL.—Under the Program, the 
Secretary shall enter into contracts with recovery 
audit contractors in accordance with this subsection 
for the purpose of identifying underpayments and 
overpayments and recouping overpayments under 
this title with respect to all services for which pay-
ment is made under part A or B. Under the con-
tracts— 
‘‘(A) payment shall be made to such a con-
tractor only from amounts recovered; 
‘‘(B) from such amounts recovered, pay-
ment— 
‘‘(i) shall be made on a contingent 
basis for collecting overpayments; and 
‘‘(ii) may be made in such amounts as 
the Secretary may specify for identifying 
underpayments; and 
‘‘(C) the Secretary shall retain a portion of 
the amounts recovered which shall be available 
to the program management account of the 
Centers for Medicare & Medicaid Services for 
purposes of activities conducted under the re-
covery audit program under this subsection. 
‘‘(2) DISPOSITION
OF
REMAINING
RECOV-
ERIES.—The amounts recovered under such con-
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161 
tracts that are not paid to the contractor under 
paragraph (1) or retained by the Secretary under 
paragraph (1)(C) shall be applied to reduce expendi-
tures under parts A and B. 
‘‘(3) NATIONWIDE COVERAGE.—The Secretary 
shall enter into contracts under paragraph (1) in a 
manner so as to provide for activities in all States 
under such a contract by not later than January 1, 
2010. 
‘‘(4) AUDIT
AND
RECOVERY
PERIODS.—Each 
such contract shall provide that audit and recovery 
activities may be conducted during a fiscal year with 
respect to payments made under part A or B— 
‘‘(A) during such fiscal year; and 
‘‘(B) retrospectively (for a period of not 
more than 4 fiscal years prior to such fiscal 
year). 
‘‘(5) WAIVER.—The Secretary shall waive such 
provisions of this title as may be necessary to pro-
vide for payment of recovery audit contractors under 
this subsection in accordance with paragraph (1). 
‘‘(6) QUALIFICATIONS OF CONTRACTORS.— 
‘‘(A) IN
GENERAL.—The Secretary may 
not enter into a contract under paragraph (1) 
with a recovery audit contractor unless the con-
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162 
tractor has staff that has the appropriate clin-
ical knowledge of, and experience with, the pay-
ment rules and regulations under this title or 
the contractor has, or will contract with, an-
other entity that has such knowledgeable and 
experienced staff. 
‘‘(B) INELIGIBILITY
OF
CERTAIN
CON-
TRACTORS.—The Secretary may not enter into 
a contract under paragraph (1) with a recovery 
audit contractor to the extent the contractor is 
a fiscal intermediary under section 1816, a car-
rier under section 1842, or a medicare adminis-
trative contractor under section 1874A. 
‘‘(C) PREFERENCE
FOR
ENTITIES
WITH 
DEMONSTRATED
PROFICIENCY.—In awarding 
contracts to recovery audit contractors under 
paragraph (1), the Secretary shall give pref-
erence to those risk entities that the Secretary 
determines have demonstrated more than 3 
years direct management experience and a pro-
ficiency for cost control or recovery audits with 
private insurers, health care providers, health 
plans, under the Medicaid program under title 
XIX, or under this title. 
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163 
‘‘(7) CONSTRUCTION
RELATING
TO
CONDUCT 
OF INVESTIGATION OF FRAUD.—A recovery of an 
overpayment to a individual or entity by a recovery 
audit contractor under this subsection shall not be 
construed to prohibit the Secretary or the Attorney 
General from investigating and prosecuting, if ap-
propriate, allegations of fraud or abuse arising from 
such overpayment. 
‘‘(8) ANNUAL
REPORT.—The Secretary shall 
annually submit to Congress a report on the use of 
recovery audit contractors under this subsection. 
Each such report shall include information on the 
performance of such contractors in identifying un-
derpayments and overpayments and recouping over-
payments, including an evaluation of the compara-
tive performance of such contractors and savings to 
the program under this title.’’. 
(b) ACCESS TO COORDINATION OF BENEFITS CON-
TRACTOR DATABASE.—The Secretary of Health and 
Human Services shall provide for access by recovery audit 
contractors conducting audit and recovery activities under 
section 1893(h) of the Social Security Act, as added by 
subsection (a), to the database of the Coordination of Ben-
efits Contractor of the Centers for Medicare & Medicaid 
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164 
Services with respect to the audit and recovery periods de-
scribed in paragraph (4) of such section 1893(h). 
(c) CONFORMING AMENDMENTS TO CURRENT DEM-
ONSTRATION PROJECT.—Section 306 of the Medicare 
Prescription Drug, Improvement, and Modernization Act 
of 2003 (Public Law 108–173; 117 Stat. 2256) is amend-
ed— 
(1) in subsection (b)(2), by striking ‘‘last for 
not longer than 3 years’’ and inserting ‘‘continue 
until contracts are entered into under section 
1893(h) of the Social Security Act’’; and 
(2) by striking subsection (f). 
SEC. 303. FUNDING FOR THE HEALTH CARE FRAUD AND 
ABUSE CONTROL ACCOUNT. 
(a) DEPARTMENTS OF HEALTH AND HUMAN SERV-
ICES AND JUSTICE.— 
(1) IN GENERAL.—Section 1817(k)(3)(A)(i) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395i(k)(3)(A)(i)) is amended— 
(A) in the matter preceding subclause (I), 
by inserting ‘‘until expended’’ after ‘‘without 
further appropriation’’; 
(B) in subclause (II), by striking ‘‘and’’ at 
the end; 
(C) in subclause (III)— 
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165 
(i) by striking ‘‘for each fiscal year 
after fiscal year 2003’’ and inserting ‘‘for 
each of fiscal years 2004, 2005, and 
2006’’; and 
(ii) by striking the period at the end 
and inserting a semicolon; and 
(D) by adding at the end the following new 
subclauses: 
‘‘(IV) for each of fiscal years 
2007, 2008, 2009, and 2010, the limit 
under this clause for the preceding 
fiscal year, increased by the percent-
age increase in the consumer price 
index for all urban consumers (all 
items; United States city average) 
over the previous year; and 
‘‘(V) for each fiscal year after fis-
cal year 2010, the limit under this 
clause for fiscal year 2010.’’. 
(2) OFFICE OF THE INSPECTOR GENERAL OF 
THE DEPARTMENT OF HEALTH AND HUMAN SERV-
ICES.—Section 1817(k)(3)(A)(ii) of such Act (42 
U.S.C. 1395i(k)(3)(A)(ii)) is amended— 
(A) in subclause (VI), by striking ‘‘and’’ at 
the end; 
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166 
(B) in subclause (VII)— 
(i) by striking ‘‘for each fiscal year 
after fiscal year 2002’’ and inserting ‘‘for 
each of fiscal years 2003, 2004, 2005, and 
2006’’; and 
(ii) by striking the period at the end 
and inserting a semicolon; and 
(C) by adding at the end the following new 
subclauses: 
‘‘(VIII) for fiscal year 2007, not 
less than $160,000,000, increased by 
the percentage increase in the con-
sumer price index for all urban con-
sumers (all items; United States city 
average) over the previous year; 
‘‘(IX) for each of fiscal years 
2008, 2009, and 2010, not less than 
the amount required under this clause 
for the preceding fiscal year, increased 
by the percentage increase in the con-
sumer price index for all urban con-
sumers (all items; United States city 
average) over the previous year; and 
‘‘(X) for each fiscal year after 
fiscal year 2010, not less than the 
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167 
amount required under this clause for 
fiscal year 2010.’’. 
(b) FEDERAL BUREAU OF INVESTIGATION.—Section 
1817(k)(3)(B) of the Social Security Act (42 U.S.C. 
1395i(k)(3)(B)) is amended— 
(1) in the matter preceding clause (i), by insert-
ing ‘‘until expended’’ after ‘‘without further appro-
priation’’; 
(2) in clause (vi), by striking ‘‘and’’ at the end; 
(3) in clause (vii)— 
(A) by striking ‘‘for each fiscal year after 
fiscal year 2002’’ and inserting ‘‘for each of fis-
cal years 2003, 2004, 2005, and 2006’’; and 
(B) by striking the period at the end and 
inserting a semicolon; and 
(4) by adding at the end the following new 
clauses: 
‘‘(viii) for each of fiscal years 2007, 
2008, 2009, and 2010, the amount to be 
appropriated under this subparagraph for 
the preceding fiscal year, increased by the 
percentage increase in the consumer price 
index for all urban consumers (all items; 
United States city average) over the pre-
vious year; and 
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168 
‘‘(ix) for each fiscal year after fiscal 
year 2010, the amount to be appropriated 
under this subparagraph for fiscal year 
2010.’’. 
SEC. 304. IMPLEMENTATION FUNDING. 
For purposes of implementing the provisions of, and 
amendments made by, this title and titles I and II of this 
division, other than section 203, the Secretary of Health 
and Human Services shall provide for the transfer, in ap-
propriate part from the Federal Hospital Insurance Trust 
Fund established under section 1817 of the Social Secu-
rity Act (42 U.S.C. 1395i) and the Federal Supple-
mentary Medical Insurance Trust Fund established under 
section 1841 of such Act (42 U.S.C. 1395t), of 
$45,000,000 to the Centers for Medicare & Medicaid Serv-
ices Program Management Account for the period of fiscal 
years 2007 and 2008. 
TITLE IV—MEDICAID AND 
OTHER HEALTH PROVISIONS 
SEC. 401. EXTENSION OF TRANSITIONAL MEDICAL ASSIST-
ANCE (TMA) AND ABSTINENCE EDUCATION 
PROGRAM. 
Activities authorized by sections 510 and 1925 of the 
Social Security Act shall continue through June 30, 2007, 
in the manner authorized for fiscal year 2006, notwith-
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169 
standing section 1902(e)(1)(A) of such Act, and out of 
any money in the Treasury of the United States not other-
wise appropriated, there are hereby appropriated such 
sums as may be necessary for such purpose. Grants and 
payments may be made pursuant to this authority through 
the third quarter of fiscal year 2007 at the level provided 
for such activities through the third quarter of fiscal year 
2006. 
SEC. 402. GRANTS FOR RESEARCH ON VACCINE AGAINST 
VALLEY FEVER. 
(a) IN GENERAL.—In supporting research on the de-
velopment of vaccines against human diseases, the Sec-
retary of Health and Human Services shall make grants 
for the purpose of conducting research toward the develop-
ment of a vaccine against coccidioidomycosis (commonly 
known as Valley Fever). 
(b) SUNSET.—No grant may be made under sub-
section (a) on or after October 1, 2012. The preceding 
sentence does not have any legal effect on payments under 
grants for which amounts appropriated under subsection 
(c) were obligated prior to such date. 
(c) AUTHORIZATION OF APPROPRIATIONS.—For the 
purpose of making grants under subsection (a), there are 
authorized to be appropriated $40,000,000 for the period 
of fiscal years 2007 through 2012. 
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170 
SEC. 403. CHANGE IN THRESHOLD FOR MEDICAID INDI-
RECT 
HOLD 
HARMLESS 
PROVISION 
OF 
BROAD-BASED HEALTH CARE TAXES. 
Section 1903(w)(4)(C) of the Social Security Act (42 
U.S.C. 1396b(w)(4)(C)) is amended— 
(1) by inserting ‘‘(i)’’ after ‘‘(C)’’; and 
(2) by adding at the end the following: 
‘‘(ii) For purposes of clause (i), a determination 
of the existence of an indirect guarantee shall be 
made under paragraph (3)(i) of section 433.68(f) of 
title 42, Code of Federal Regulations, as in effect on 
November 1, 2006, except that for portions of fiscal 
years beginning on or after January 1, 2008, and 
before October 1, 2011, ‘5.5 percent’ shall be sub-
stituted for ‘6 percent’ each place it appears.’’. 
SEC. 404. DSH ALLOTMENTS FOR FISCAL YEAR 2007 FOR 
TENNESSEE AND HAWAII. 
Section 1923(f)(6) of the Social Security Act (42 
U.S.C. 1396r–4(f)(6)) is amended to read as follows: 
‘‘(6) ALLOTMENT
ADJUSTMENTS
FOR
FISCAL 
YEAR 2007.— 
‘‘(A) TENNESSEE.— 
‘‘(i) IN GENERAL.—Only with respect 
to fiscal year 2007, the DSH allotment for 
Tennessee for such fiscal year, notwith-
standing the table set forth in paragraph 
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171 
(2) or the terms of the TennCare Dem-
onstration Project in effect for the State, 
shall be the greater of— 
‘‘(I) the amount that the Sec-
retary determines is equal to the Fed-
eral medical assistance percentage 
component attributable to dispropor-
tionate share hospital payment adjust-
ments for the demonstration year end-
ing in 2006 that is reflected in the 
budget neutrality provision of the 
TennCare Demonstration Project; and 
‘‘(II) $280,000,000. 
‘‘(ii) LIMITATION ON AMOUNT OF PAY-
MENT ADJUSTMENTS ELIGIBLE FOR FED-
ERAL
FINANCIAL
PARTICIPATION.—Pay-
ment under section 1903(a) shall not be 
made to Tennessee with respect to the ag-
gregate amount of any payment adjust-
ments made under this section for hos-
pitals in the State for fiscal year 2007 that 
is in excess of 30 percent of the DSH al-
lotment for the State for such fiscal year 
determined pursuant to clause (i). 
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172 
‘‘(iii) STATE
PLAN
AMENDMENT.— 
The Secretary shall permit Tennessee to 
submit an amendment to its State plan 
under this title that describes the method-
ology to be used by the State to identify 
and make payments to disproportionate 
share hospitals, including children’s hos-
pitals and institutions for mental diseases 
or other mental health facilities. The Sec-
retary may not approve such plan amend-
ment unless the methodology described in 
the amendment is consistent with the re-
quirements under this section for making 
payment adjustments to disproportionate 
share hospitals. For purposes of dem-
onstrating budget neutrality under the 
TennCare Demonstration Project, payment 
adjustments made pursuant to a State 
plan amendment approved in accordance 
with this subparagraph shall be considered 
expenditures under such project. 
‘‘(iv) OFFSET OF FEDERAL SHARE OF 
PAYMENT ADJUSTMENTS FOR FISCAL YEAR 
2007
AGAINST
ESSENTIAL
ACCESS
HOS-
PITAL
SUPPLEMENTAL
POOL
PAYMENTS 
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173 
UNDER
THE
TENNCARE
DEMONSTRATION 
PROJECT.— 
‘‘(I) The total amount of Essen-
tial Access Hospital supplemental pool 
payments that may be made under 
the TennCare Demonstration Project 
for fiscal year 2007 shall be reduced 
on a dollar for dollar basis by the 
amount of any payments made under 
section 1903(a) to Tennessee with re-
spect to payment adjustments made 
under this section for hospitals in the 
State for such fiscal year. 
‘‘(II) The sum of the total 
amount of payments made under sec-
tion 1903(a) to Tennessee with re-
spect to payment adjustments made 
under this section for hospitals in the 
State for fiscal year 2007 and the 
total amount of Essential Access Hos-
pital 
supplemental 
pool 
payments 
made under the TennCare Dem-
onstration Project for such fiscal year 
shall not exceed the State’s DSH al-
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174 
lotment for such fiscal year estab-
lished under clause (i). 
‘‘(B) HAWAII.— 
‘‘(i) IN GENERAL.—Only with respect 
to fiscal year 2007, the DSH allotment for 
Hawaii for such fiscal year, notwith-
standing the table set forth in paragraph 
(2), shall be $10,000,000. 
‘‘(ii) STATE PLAN AMENDMENT.—The 
Secretary shall permit Hawaii to submit an 
amendment to its State plan under this 
title that describes the methodology to be 
used by the State to identify and make 
payments to disproportionate share hos-
pitals, including children’s hospitals and 
institutions for mental diseases or other 
mental health facilities. The Secretary may 
not approve such plan amendment unless 
the methodology described in the amend-
ment is consistent with the requirements 
under this section for making payment ad-
justments to disproportionate share hos-
pitals.’’. 
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175 
SEC. 405. CERTAIN MEDICAID DRA TECHNICAL CORREC-
TIONS. 
(a) TECHNICAL CORRECTIONS RELATING TO STATE 
OPTION FOR ALTERNATIVE PREMIUMS AND COST SHAR-
ING (SECTIONS 6041 THROUGH 6043).— 
(1) CLARIFICATION
OF
CONTINUED
APPLICA-
TION OF REGULAR COST SHARING RULES FOR INDI-
VIDUALS WITH FAMILY INCOME NOT EXCEEDING 100 
PERCENT OF THE POVERTY LINE.—Section 1916A 
of the Social Security Act, as inserted by section 
6041(a) of the Deficit Reduction Act of 2005 and 
amended by sections 6042 and 6043 of such Act, is 
amended— 
(A) in subsection (a)(1)— 
(i) by inserting ‘‘but subject to para-
graph (2),’’ after ‘‘1902(a)(10)(B),’’; and 
(ii) by inserting ‘‘and non-emergency 
services furnished in a hospital emergency 
department for which cost sharing may be 
imposed under subsection (e)’’ after ‘‘(c)’’; 
(B) by redesignating paragraph (2) of sub-
section (a) as paragraph (3); 
(C) in subsection (a), by inserting after 
paragraph (1) the following: 
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176 
‘‘(2) EXEMPTION FOR INDIVIDUALS WITH FAM-
ILY INCOME NOT EXCEEDING 100 PERCENT OF THE 
POVERTY LINE.— 
‘‘(A) IN
GENERAL.—Paragraph (1) and 
subsection (d) shall not apply, and sections 
1916 and 1902(a)(10)(B) shall continue to 
apply, in the case of an individual whose family 
income does not exceed 100 percent of the pov-
erty line applicable to a family of the size in-
volved. 
‘‘(B) LIMIT ON AGGREGATE COST SHAR-
ING.—To the extent cost sharing under sub-
section (c) and (e) or under section 1916 is im-
posed against individuals described in subpara-
graph (A), the limitation under subsection 
(b)(1)(B)(ii) on the total aggregate amount of 
cost sharing shall apply to such cost sharing for 
all individuals in a family described in subpara-
graph (A) in the same manner as such limita-
tions apply to cost sharing and families de-
scribed in subsection (b)(1)(B)(ii).’’; 
(D) in subsections (c)(2)(C) and (e)(2)(C), 
by inserting ‘‘under subsection (a)(2)(B) or’’ 
after ‘‘cap on cost sharing applied’’; and 
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177 
(E) in subsection (e)(2)(A), by inserting 
‘‘who is not described in subparagraph (B)’’ 
after ‘‘subsection (b)(1)’’. 
(2) CLARIFICATION OF TREATMENT OF NON- 
PREFERRED
DRUG
AND
NON-EMERGENCY
COST- 
SHARING.—Such section is further amended— 
(A) in subsections (b)(1) and (b)(2), by 
striking ‘‘, subject to subsections (c)(2) and 
(e)(2)(A)’’; 
(B) in subsection (c)(1), in the matter pre-
ceding subparagraph (A), by striking ‘‘least (or 
less) costly effective’’ and inserting ‘‘most (or 
more) cost effective’’; 
(C) in subsection (c)(1)(B), by striking 
‘‘otherwise be imposed under’’ and inserting 
‘‘be imposed under subsection (a) due to the 
application of’’; 
(D) in subsection (c)(2)(B), by striking 
‘‘otherwise not subject to cost sharing due to 
the application of subsection (b)(3)(B)’’ and in-
serting ‘‘not subject to cost sharing under sub-
section (a) due to the application of paragraph 
(1)(B)’’; 
(E) in subsection (e)(2)(A)— 
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178 
(i) by amending the heading to read 
as follows: ‘‘INDIVIDUALS WITH FAMILY IN-
COME BETWEEN 100 AND 150 PERCENT OF 
THE POVERTY LINE.—’’; and 
(ii) by striking ‘‘under subsection 
(b)(1)’’ and inserting ‘‘under subsection 
(b)(1)(B)(ii)’’; 
(F) in subsection (e)(2)(B), by striking 
‘‘who is otherwise not subject to cost sharing 
under subsection (b)(3)’’ and inserting ‘‘de-
scribed in subsection (a)(2)(A) or who is not 
subject to cost sharing under subsection 
(b)(3)(B) with respect to non-emergency serv-
ices described in paragraph (1)’’ and 
(G) in subsection (e)(2)(C), by inserting 
‘‘or section 1916’’ after ‘‘subsection (a)’’. 
(3) CLARIFICATION OF COST SHARING RULES 
APPLICABLE
TO
DISABLED
CHILDREN
PROVIDED 
MEDICAL ASSISTANCE UNDER THE ELIGIBILITY CAT-
EGORY
ADDED
BY
THE
FAMILY
OPPORTUNITY 
ACT.—Such section is further amended— 
(A) in subsection (a)(1), in the second sen-
tence, by striking ‘‘section 1916(g)’’ and insert-
ing ‘‘subsection (g) or (i) of section 1916’’; and 
(B) in subsection (b)(3)— 
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179 
(i) in subparagraph (A), by adding at 
the end the following: 
‘‘(vi) Disabled children who are receiv-
ing medical assistance by virtue of the ap-
plication 
of 
sections 
1902(a)(10)(A)(ii)(XIX) and 1902(cc).’’; 
and 
(ii) in subparagraph (B), by adding at 
the end the following: 
‘‘(ix) Services furnished to disabled 
children who are receiving medical assist-
ance by virtue of the application of sec-
tions 
1902(a)(10)(A)(ii)(XIX) 
and 
1902(cc).’’. 
(4) CORRECTION OF IV–B REFERENCES.—Such 
section is further amended in subsection (b)(3)— 
(A) in subparagraph (A)(i), by striking 
‘‘aid or assistance is made available under part 
B of title IV to children in foster care’’ and in-
serting ‘‘child welfare services are made avail-
able under part B of title IV on the basis of 
being a child in foster care’’; and 
(B) in subparagraph (B)(i), by striking 
‘‘aid or assistance is made available under part 
B of title IV to children in foster care’’ and in-
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180 
serting ‘‘child welfare services are made avail-
able under part B of title IV on the basis of 
being a child in foster care or’’. 
(5) 
NON-EMERGENCY
SERVICES.—Section 
1916A(e)(4)(A) of the Social Security Act, as added 
by section 6043(a) of the Deficit Reduction Act of 
2005, is amended by striking ‘‘the physician deter-
mines’’. 
(6) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect as if included in 
the amendments made by sections 6041(a) of the 
Deficit Reduction Act of 2005, except that insofar 
as such amendments are to, or relate to, subsection 
(c) or (e) of section 1916A of the Social Security 
Act, such amendments shall take effect as if in-
cluded in the amendments made by section 6042 or 
6043, respectively, of the Deficit Reduction Act of 
2005. 
(b) CLARIFYING TREATMENT OF CERTAIN ANNU-
ITIES (SECTION 6012).— 
(1) IN GENERAL.—Section 1917(c)(1)(F)(i) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396p(c)(1)(F)(i)), as added by section 6012(b) of 
the Deficit Reduction Act of 2005, is amended by 
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181 
striking ‘‘annuitant’’ and inserting ‘‘institutionalized 
individual’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall be effective as if included in 
the enactment of section 6012 of the Deficit Reduc-
tion Act of 2005. 
(c) ADDITIONAL MISCELLANEOUS TECHNICAL COR-
RECTIONS.— 
(1) DOCUMENTATION (SECTION 6036).— 
(A) IN GENERAL.—Effective as if included 
in the amendment made by section 6036(a)(2) 
of the Deficit Reduction Act of 2005, section 
1903(x) of the Social Security Act (42 U.S.C. 
1396b(x)), 
as 
inserted 
by 
such 
section 
6036(a)(2), is amended— 
(i) in paragraph (1), by striking 
‘‘(i)(23)’’ and inserting ‘‘(i)(22)’’; 
(ii) in paragraph (2)— 
(I) in the matter preceding sub-
paragraph (A), by striking ‘‘alien’’ 
and inserting ‘‘individual declaring to 
be a citizen or national of the United 
States’’; 
(II) by striking subparagraph (B) 
and inserting the following: 
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182 
‘‘(B) and is receiving— 
‘‘(i) 
disability 
insurance 
benefits 
under section 223 or monthly insurance 
benefits under section 202 based on such 
individual’s disability (as defined in section 
223(d)); or 
‘‘(ii) supplemental security income 
benefits under title XVI;’’; 
(III) in subparagraph (C)— 
(aa) by striking ‘‘other’’; 
and 
(bb) by striking ‘‘had’’ and 
inserting ‘‘has’’; 
(IV) by redesignating subpara-
graph (C) as subparagraph (D); and 
(V) by inserting after subpara-
graph (B) the following new subpara-
graph: 
‘‘(C) and with respect to whom— 
‘‘(i) child welfare services are made 
available under part B of title IV on the 
basis of being a child in foster care; or 
‘‘(ii) adoption or foster care assistance 
is made available under part E of title IV; 
or’’; and 
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183 
(iii) in paragraph (3)(C)(iii), by strik-
ing ‘‘I–97’’ and inserting ‘‘I–197’’. 
(B) ASSURANCE OF STATE FOSTER CARE 
AGENCY
VERIFICATION
OF
CITIZENSHIP
OR 
LEGAL STATUS.— 
(i) STATE PLAN AMENDMENT.—Sec-
tion 471(a) of the Social Security Act (42 
U.S.C. 671(a)) is amended— 
(I) in paragraph (25), by striking 
‘‘and’’ at the end; 
(II) in paragraph (26)(C), by 
striking the period at the end and in-
serting ‘‘; and’’; and 
(III) by adding at the end the 
following: 
‘‘(27) provides that, with respect to any child in 
foster care under the responsibility of the State 
under this part or part B and without regard to 
whether foster care maintenance payments are made 
under section 472 on behalf of the child, the State 
has in effect procedures for verifying the citizenship 
or immigration status of the child.’’. 
(ii) INCLUSION IN REVIEWS OF CHILD 
AND
FAMILY
SERVICES
PROGRAMS.—Sec-
tion 1123A(b)(2) of the Social Security 
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184 
Act (42 U.S.C. 1320a–2a(b)(2)) is amend-
ed by inserting ‘‘(which shall include deter-
mining whether the State program is in 
conformity with the requirement of section 
471(a)(27))’’ after ‘‘review’’. 
(iii) EFFECTIVE DATE.—The amend-
ments made by this subparagraph shall 
take effect on the date that is 6 months 
after the date of the enactment of this Act. 
(2) 
MISCELLANEOUS
TECHNICAL
CORREC-
TIONS.— 
(A) Effective as if included in the enact-
ment of the Deficit Reduction Act of 2005 
(Public Law 109–171), the following sections of 
such Act are amended as follows: 
(i) Section 5114(a)(2) is amended by 
striking ‘‘section 1842(b)(6)(F) of such 
Act (42 U.S.C. 1395u(b)(6)(F))’’ and in-
serting ‘‘section 1842(b)(6) of such Act 
(42 U.S.C. 1395u(b)(6))’’. 
(ii) Section 6003(b)(2) is amended, by 
striking ‘‘subsection (k)’’ and inserting 
‘‘subsection (k)(1)’’. 
(iii) Sections 6031(b), 6032(b), and 
6035(c) are each amended by striking 
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185 
‘‘section 6035(e)’’ and inserting ‘‘section 
6034(e)’’. 
(iv) Section 6034(b) is amended by 
striking ‘‘section 6033(a)’’ and inserting 
‘‘section 6032(a)’’. 
(v) Section 6036 is amended— 
(I) in subsection (b), by striking 
‘‘section 1903(z)’’ and inserting ‘‘sec-
tion 1903(x)’’; and 
(II) in subsection (c), by striking 
‘‘(i)(23)’’ and inserting ‘‘(i)(22)’’. 
(B) Effective as if included in the amend-
ment made by section 6015(a)(1) of the Deficit 
Reduction 
Act 
of 
2005, 
section 
1919(c)(5)(A)(i)(II) of the Social Security Act 
(42 U.S.C. 1396r(c)(5)(A)(i)(II)) is amended 
by striking ‘‘clause (v)’’ and inserting ‘‘subpara-
graph (B)(v)’’. 
DIVISION C—OTHER 
PROVISIONS 
TITLE I—GULF OF MEXICO 
ENERGY SECURITY 
SEC. 101. SHORT TITLE. 
This title may be cited as the ‘‘Gulf of Mexico Energy 
Security Act of 2006’’. 
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186 
SEC. 102. DEFINITIONS. 
In this title: 
(1) 181 AREA.—The term ‘‘181 Area’’ means 
the area identified in map 15, page 58, of the Pro-
posed Final Outer Continental Shelf Oil and Gas 
Leasing Program for 1997–2002, dated August 
1996, of the Minerals Management Service, available 
in the Office of the Director of the Minerals Man-
agement Service, excluding the area offered in OCS 
Lease Sale 181, held on December 5, 2001. 
(2) 181 SOUTH AREA.—The term ‘‘181 South 
Area’’ means any area— 
(A) located— 
(i) south of the 181 Area; 
(ii) west of the Military Mission Line; 
and 
(iii) in the Central Planning Area; 
(B) excluded from the Proposed Final 
Outer Continental Shelf Oil and Gas Leasing 
Program for 1997–2002, dated August 1996, of 
the Minerals Management Service; and 
(C) included in the areas considered for oil 
and gas leasing, as identified in map 8, page 37 
of the document entitled ‘‘Draft Proposed Pro-
gram Outer Continental Shelf Oil and Gas 
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187 
Leasing Program 2007–2012’’, dated February 
2006. 
(3) BONUS
OR
ROYALTY
CREDIT.—The term 
‘‘bonus or royalty credit’’ means a legal instrument 
or other written documentation, or an entry in an 
account managed by the Secretary, that may be used 
in lieu of any other monetary payment for— 
(A) a bonus bid for a lease on the outer 
Continental Shelf; or 
(B) a royalty due on oil or gas production 
from any lease located on the outer Continental 
Shelf. 
(4) CENTRAL
PLANNING
AREA.—The term 
‘‘Central Planning Area’’ means the Central Gulf of 
Mexico Planning Area of the outer Continental 
Shelf, as designated in the document entitled ‘‘Draft 
Proposed Program Outer Continental Shelf Oil and 
Gas Leasing Program 2007–2012’’, dated February 
2006. 
(5) EASTERN
PLANNING
AREA.—The term 
‘‘Eastern Planning Area’’ means the Eastern Gulf of 
Mexico Planning Area of the outer Continental 
Shelf, as designated in the document entitled ‘‘Draft 
Proposed Program Outer Continental Shelf Oil and 
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188 
Gas Leasing Program 2007–2012’’, dated February 
2006. 
(6) 2002–2007 PLANNING
AREA.—The term 
‘‘2002–2007 planning area’’ means any area— 
(A) located in— 
(i) the Eastern Planning Area, as des-
ignated in the Proposed Final Outer Conti-
nental Shelf Oil and Gas Leasing Program 
2002–2007, dated April 2002, of the Min-
erals Management Service; 
(ii) the Central Planning Area, as des-
ignated in the Proposed Final Outer Conti-
nental Shelf Oil and Gas Leasing Program 
2002–2007, dated April 2002, of the Min-
erals Management Service; or 
(iii) the Western Planning Area, as 
designated in the Proposed Final Outer 
Continental Shelf Oil and Gas Leasing 
Program 2002–2007, dated April 2002, of 
the Minerals Management Service; and 
(B) not located in— 
(i) an area in which no funds may be 
expended to conduct offshore preleasing, 
leasing, and related activities under sec-
tions 104 through 106 of the Department 
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189 
of the Interior, Environment, and Related 
Agencies Appropriations Act, 2006 (Public 
Law 109–54; 119 Stat. 521) (as in effect 
on August 2, 2005); 
(ii) an area withdrawn from leasing 
under the ‘‘Memorandum on Withdrawal 
of Certain Areas of the United States 
Outer Continental Shelf from Leasing Dis-
position’’, from 34 Weekly Comp. Pres. 
Doc. 1111, dated June 12, 1998; or 
(iii) the 181 Area or 181 South Area. 
(7) GULF PRODUCING STATE.—The term ‘‘Gulf 
producing State’’ means each of the States of Ala-
bama, Louisiana, Mississippi, and Texas. 
(8) MILITARY MISSION LINE.—The term ‘‘Mili-
tary Mission Line’’ means the north-south line at 
86°41′ W. longitude. 
(9) QUALIFIED
OUTER
CONTINENTAL
SHELF 
REVENUES.— 
(A) IN
GENERAL.—The term ‘‘qualified 
outer Continental Shelf revenues’’ means— 
(i) in the case of each of fiscal years 
2007 through 2016, all rentals, royalties, 
bonus bids, and other sums due and pay-
able to the United States from leases en-
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190 
tered into on or after the date of enact-
ment of this Act for— 
(I) areas in the 181 Area located 
in the Eastern Planning Area; and 
(II) the 181 South Area; and 
(ii) in the case of fiscal year 2017 and 
each fiscal year thereafter, all rentals, roy-
alties, bonus bids, and other sums due and 
payable to the United States received on or 
after October 1, 2016, from leases entered 
into on or after the date of enactment of 
this Act for— 
(I) the 181 Area; 
(II) the 181 South Area; and 
(III) the 2002–2007 planning 
area. 
(B) EXCLUSIONS.—The term ‘‘qualified 
outer Continental Shelf revenues’’ does not in-
clude— 
(i) revenues from the forfeiture of a 
bond or other surety securing obligations 
other than royalties, civil penalties, or roy-
alties taken by the Secretary in-kind and 
not sold; or 
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191 
(ii) revenues generated from leases 
subject to section 8(g) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 
1337(g)). 
(10) COASTAL
POLITICAL
SUBDIVISION.—The 
term ‘‘coastal political subdivision’’ means a political 
subdivision of a Gulf producing State any part of 
which political subdivision is— 
(A) within the coastal zone (as defined in 
section 304 of the Coastal Zone Management 
Act of 1972 (16 U.S.C. 1453)) of the Gulf pro-
ducing State as of the date of enactment of this 
Act; and 
(B) not more than 200 nautical miles from 
the geographic center of any leased tract. 
(11) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of the Interior. 
SEC. 103. OFFSHORE OIL AND GAS LEASING IN 181 AREA 
AND 181 SOUTH AREA OF GULF OF MEXICO. 
(a) 181 AREA LEASE SALE.—Except as provided in 
section 104, the Secretary shall offer the 181 Area for 
oil and gas leasing pursuant to the Outer Continental 
Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon as prac-
ticable, but not later than 1 year, after the date of enact-
ment of this Act. 
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192 
(b) 181 SOUTH AREA LEASE SALE.—The Secretary 
shall offer the 181 South Area for oil and gas leasing pur-
suant to the Outer Continental Shelf Lands Act (43 
U.S.C. 1331 et seq.) as soon as practicable after the date 
of enactment of this Act. 
(c) LEASING PROGRAM.—The 181 Area and 181 
South Area shall be offered for lease under this section 
notwithstanding the omission of the 181 Area or the 181 
South Area from any outer Continental Shelf leasing pro-
gram under section 18 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1344). 
(d) CONFORMING AMENDMENT.—Section 105 of the 
Department of the Interior, Environment, and Related 
Agencies Appropriations Act, 2006 (Public Law 109–54; 
119 Stat. 522) is amended by inserting ‘‘(other than the 
181 South Area (as defined in section 102 of the Gulf 
of Mexico Energy Security Act of 2006))’’ after ‘‘lands 
located outside Sale 181’’. 
SEC. 104. MORATORIUM ON OIL AND GAS LEASING IN CER-
TAIN AREAS OF GULF OF MEXICO. 
(a) IN GENERAL.—Effective during the period begin-
ning on the date of enactment of this Act and ending on 
June 30, 2022, the Secretary shall not offer for leasing, 
preleasing, or any related activity— 
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(1) any area east of the Military Mission Line 
in the Gulf of Mexico; 
(2) any area in the Eastern Planning Area that 
is within 125 miles of the coastline of the State of 
Florida; or 
(3) any area in the Central Planning Area that 
is— 
(A) within— 
(i) the 181 Area; and 
(ii) 100 miles of the coastline of the 
State of Florida; or 
(B)(i) outside the 181 Area; 
(ii) east of the western edge of the Pensa-
cola Official Protraction Diagram (UTM X co-
ordinate 1,393,920 (NAD 27 feet)); and 
(iii) within 100 miles of the coastline of 
the State of Florida. 
(b) MILITARY MISSION LINE.—Notwithstanding sub-
section (a), the United States reserves the right to des-
ignate by and through the Secretary of Defense, with the 
approval of the President, national defense areas on the 
outer Continental Shelf pursuant to section 12(d) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1341(d)). 
(c) EXCHANGE OF CERTAIN LEASES.— 
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(1) IN GENERAL.—The Secretary shall permit 
any person that, as of the date of enactment of this 
Act, has entered into an oil or gas lease with the 
Secretary in any area described in paragraph (2) or 
(3) of subsection (a) to exchange the lease for a 
bonus or royalty credit that may only be used in the 
Gulf of Mexico. 
(2) VALUATION
OF
EXISTING
LEASE.—The 
amount of the bonus or royalty credit for a lease to 
be exchanged shall be equal to— 
(A) the amount of the bonus bid; and 
(B) any rental paid for the lease as of the 
date the lessee notifies the Secretary of the de-
cision to exchange the lease. 
(3) REVENUE
DISTRIBUTION.—No bonus or 
royalty credit may be used under this subsection in 
lieu of any payment due under, or to acquire any in-
terest in, a lease subject to the revenue distribution 
provisions of section 8(g) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(g)). 
(4) REGULATIONS.—Not later than 1 year after 
the date of enactment of this Act, the Secretary 
shall promulgate regulations that shall provide a 
process for— 
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(A) notification to the Secretary of a deci-
sion to exchange an eligible lease; 
(B) issuance of bonus or royalty credits in 
exchange for relinquishment of the existing 
lease; 
(C) transfer of the bonus or royalty credit 
to any other person; and 
(D) determining the proper allocation of 
bonus or royalty credits to each lease interest 
owner. 
SEC. 105. DISPOSITION OF QUALIFIED OUTER CONTI-
NENTAL SHELF REVENUES FROM 181 AREA, 
181 SOUTH AREA, AND 2002–2007 PLANNING 
AREAS OF GULF OF MEXICO. 
(a) IN GENERAL.—Notwithstanding section 9 of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1338) and 
subject to the other provisions of this section, for each ap-
plicable fiscal year, the Secretary of the Treasury shall 
deposit— 
(1) 50 percent of qualified outer Continental 
Shelf revenues in the general fund of the Treasury; 
and 
(2) 50 percent of qualified outer Continental 
Shelf revenues in a special account in the Treasury 
from which the Secretary shall disburse— 
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196 
(A) 75 percent to Gulf producing States in 
accordance with subsection (b); and 
(B) 25 percent to provide financial assist-
ance to States in accordance with section 6 of 
the Land and Water Conservation Fund Act of 
1965 (16 U.S.C. 460l–8), which shall be consid-
ered income to the Land and Water Conserva-
tion Fund for purposes of section 2 of that Act 
(16 U.S.C. 460l–5). 
(b) ALLOCATION AMONG GULF PRODUCING STATES 
AND COASTAL POLITICAL SUBDIVISIONS.— 
(1) ALLOCATION
AMONG
GULF
PRODUCING 
STATES FOR FISCAL YEARS 2007 THROUGH 2016.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), effective for each of fiscal years 
2007 through 2016, the amount made available 
under subsection (a)(2)(A) shall be allocated to 
each Gulf producing State in amounts (based 
on a formula established by the Secretary by 
regulation) that are inversely proportional to 
the respective distances between the point on 
the coastline of each Gulf producing State that 
is closest to the geographic center of the appli-
cable leased tract and the geographic center of 
the leased tract. 
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