I
108TH CONGRESS
1ST SESSION
H. R. 2196
To improve the quality, availability, diversity, personal privacy, and innovation
of health care in the United States.
IN THE HOUSE OF REPRESENTATIVES
MAY 21, 2003
Mr. ROHRABACHER introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committees on
Government Reform, and Energy and Commerce, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of
such provisions as fall within the jurisdiction of the committee concerned
A BILL
To improve the quality, availability, diversity, personal
privacy, and innovation of health care in the United States.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Medical Independence, Privacy, and Innovation Act of
2003’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—TAX-RELATED PROVISIONS
Sec. 101. Findings.
Sec. 102. Deduction of medical expenses for individuals.
Sec. 103. Medical checking accounts.
Sec. 104. Decrease in minimum annual deductibles under a high deductible
health plan for purposes of Archer MSAs.
TITLE II—MEDICAL PRIVACY
Sec. 201. Findings.
Sec. 202. Modification of regulations on privacy of individually identifiable
health information.
Sec. 203. Restrictions on the use of the social security account number.
Sec. 204. Prohibition of governmentwide uniform identifying numbers.
Sec. 205. Prohibition of government-established identifiers.
TITLE III—MODIFICATIONS REGARDING REGULATION OF DRUGS
UNDER FEDERAL FOOD, DRUG, AND COSMETIC ACT
Sec. 301. Definition of drug.
Sec. 302. Striking of effectiveness requirement; modifications regarding patent
listings, patent certifications, and thirty-month rule.
Sec. 303. Importation of certain drugs.
TITLE I—TAX-RELATED
PROVISIONS
SEC. 101. FINDINGS.
The Congress finds the following:
(1) Current law confers tax benefits for health
insurance provided as an employee fringe benefit,
but no similar tax benefit for health insurance pur-
chased by individuals thus creating an unfair bias
toward employer provided medical insurance plans
and an unfair discrimination against individuals who
seek marketplace alternatives to health insurance.
(2) Current law confers a tax benefits for third
party payment of medical expenses but no similar
tax benefits for direct individual payment of medical
expenses. This has promoted employer-provided
third party payment systems and discouraged direct
doctor-patient relationships.
(3) The current tax treatment of medical ex-
penses has resulted in a greatly distorted market-
place in medical insurance where decreased opportu-
nities for private personal health insurance has re-
duced competition both for medical insurance and
health care services. This has resulted in an in-
creased cost of both health insurance and health
care services and fostered overuse of low high pre-
mium health insurance plans.
(4) The current tax treatment of medical ex-
penses has restricted the freedom of individuals to
exercise direct control over their health care dollars.
The exclusion from gross income for employer-pro-
vided health care with no corresponding tax benefit
for health insurance and health care costs borne by
individuals represents a strong incentive toward em-
ployers group plans.
(5) The tax codes preferment of employer-pro-
vided group plans has triggered a marketplace re-
sponse reflected in the significant increases in large
health care delivery, and the creation of a relative
few health care conglomerates in lieu of thousands
of competitive providers of medical insurance and
services. This has increasingly placed medical deci-
sions in the hands of health care bureaucracies and
has eroded doctor-patient relationships.
(6) The role of the marketplace in both medical
insurance and medical services should be strength-
ened. The discriminatory tax policies in the area of
health insurance and health care should be ended.
Private individuals should be able to contract for
their health insurance and health care delivery in an
atmosphere free of discriminatory tax pressures.
High deductible low premium as well as catastrophic
alternatives in health insurance should be viable op-
tions for all Americans.
(7) Consumers should have the freedom to pur-
chase the health insurance types of their own choice,
to choose their own doctors and to make their own
decisions about their health care. Elimination of the
discriminatory tax codes regarding health choices
will encourage greater choice and competition, there-
by reducing the cost of necessary insurance for all
Americans. This will enable millions more Americans
to obtain needed health coverage.
SEC. 102. DEDUCTION OF MEDICAL EXPENSES FOR INDI-
VIDUALS.
(a) IN GENERAL.—Subsection (a) of section 213 of
the Internal Revenue Code of 1986 (relating to treatment
of medical, dental, etc., expenses) is amended to read as
follows:
‘‘(a) ALLOWANCE OF DEDUCTION.—There shall be
allowed as a deduction the expenses paid during the tax-
able year, not compensated for by insurance or otherwise,
for medical care of the taxpayer, his spouse, or a depend-
ent (as defined by section 152).’’.
(b) DEDUCTION
ALLOWED
IN
COMPUTING
AD-
JUSTED GROSS INCOME.—Subsection (a) of section 62 of
such Code is amended by inserting after paragraph (18)
the following new paragraph:
‘‘(19) MEDICAL CARE.—The deduction allowed
by section 213.’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 56(b)(1) of such Code is amended
by striking subparagraph (B).
(2) Section 67(b) is amended by striking para-
graph (5).
(3) Section 72(t)(B) of such Code is amended
by striking ‘‘to the extent such distributions do not
exceed the amount’’ and inserting ‘‘which are’’.
(4) Sections 104(a) and 105(b) of such Code
are both amended by striking ‘‘(and not in excess
of)’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2003.
SEC. 103. MEDICAL CHECKING ACCOUNTS.
(a) IN GENERAL.—Subchapter F of chapter 1 of the
Internal Revenue Code of 1986 (relating to exempt organi-
zations) is amended by adding at the end the following:
‘‘PART IX—MEDICAL CHECKING ACCOUNTS
‘‘Sec. 530A. Medical checking accounts.
‘‘SEC. 530A. MEDICAL CHECKING ACCOUNTS.
‘‘(a) GENERAL RULE.—A medical checking account
shall be exempt from taxation under this subtitle. Not-
withstanding the preceding sentence, any medical checking
account shall be subject to the taxes imposed by section
511 (relating to imposition of tax on unrelated business
income of charitable, etc., organizations). Rules similar to
the rules of paragraphs (2) and (4) of section 408(e) shall
apply to medical checking accounts, and any amount treat-
ed as distributed under such rules shall be treated as not
used to pay qualified medical expenses.
‘‘(b) DEDUCTION FOR CONTRIBUTIONS.—
‘‘(1) IN
GENERAL.—In the case of an indi-
vidual, there shall be allowed as a deduction an
amount equal to the aggregate amount paid in cash
during the taxable year to a medical checking ac-
count of the taxpayer.
‘‘(2) LIMITATIONS.—
‘‘(A) MAXIMUM ANNUAL CONTRIBUTION.—
The deduction under paragraph (1) for a tax-
able year shall not exceed $1,000 ($2,000 in
the case of a joint return).
‘‘(B) MAXIMUM
ALLOWABLE
DEDUCTION
BASED ON BALANCE IN ACCOUNT.—No deduc-
tion shall be allowed for a taxable year for any
amount contributed to a medical checking ac-
count if the sum of such amount plus the bal-
ance in the account determined as the end of
the taxable year would exceed $2,000 ($4,000
in the case of married individuals filing a joint
return, a surviving spouse, and a head of house-
hold).
‘‘(c) CREDIT FOR CONTRIBUTIONS.—
‘‘(1) IN
GENERAL.—In the case of an indi-
vidual, there shall be allowed as a credit against the
tax imposed by this chapter for the taxable year an
amount equal to the credit amount with respect to
contributions made during the taxable year to the
medical checking account of the taxpayer.
‘‘(2) CREDIT AMOUNT.—For purposes of para-
graph (1), the credit amount is the lesser of—
‘‘(A) the total amount of contributions to
the medical checking account for the taxable
year reduced by the amount of contributions al-
lowed as a deduction under subsection (b), and
‘‘(B) $1,000.
‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) MEDICAL CHECKING ACCOUNT.—The term
‘medical checking account’ means a trust created or
organized in the United States for the exclusive ben-
efit of a qualified individual or his beneficiaries, but
only if the written governing instrument creating the
trust meets the following requirements:
‘‘(A) Except in the case of a rollover con-
tribution described in paragraph (4)(C), no con-
tribution will be accepted unless it is in cash, or
it exceeds $1,000 ($2,000 in the case of mar-
ried individuals filing a joint return, a surviving
spouse, and a head of household).
‘‘(B) The trustee is a bank (as defined in
section 408(n)), an insurance company (as de-
fined in section 816), or another person who
demonstrates to the satisfaction of the Sec-
retary that the manner in which such person
will administer the trust will be consistent with
the requirements of this section.
‘‘(C) No part of the trust assets will be in-
vested in life insurance contracts.
‘‘(D) The assets of the trust will not be
commingled with other property except in a
common trust fund or common investment
fund.
‘‘(E) The interest of an individual in the
balance in his account is nonforfeitable.
‘‘(2) QUALIFIED
MEDICAL
EXPENSES.—The
term ‘qualified medical expenses’ means, with re-
spect to an account holder, amounts paid by such
holder for medical care (as defined in section
213(d)) for such individual, the spouse of such indi-
vidual, and any dependent (as defined in section
152) of such individual, but only to the extent such
amounts are not compensated for by insurance or
otherwise (including distributions from an Archer
MSA which are not includible in gross income by
reason of section 220(f)(1)).
‘‘(3) CHANGE IN FILING STATUS.—In the case
of a taxpayer whose filing status changes during the
taxable year, the limitation under subparagraph (B)
shall be apportioned among the filing statuses of the
taxpayer in accordance with regulations prescribed
by the Secretary.
‘‘(4) CERTAIN RULES TO APPLY.—Rules similar
to the following rules shall apply for purposes of this
section:
‘‘(A) Section 219(d)(2) (relating to no de-
duction for rollovers).
‘‘(B) Section 219(f)(3) (relating to time
when contributions deemed made).
‘‘(C) Section 219(f)(5) (relating to em-
ployer payments).
‘‘(D) Section 220(f)(5) (relating to rollover
contributions).
‘‘(E) Section 220(f)(7) (relating to trans-
fer of account incident to divorce).
‘‘(F) Section 220(f)(8) (relating to treat-
ment after death of account holder).
‘‘(G) Section 408(g) (relating to commu-
nity property laws).
‘‘(H) Section 408(h) (relating to custodial
accounts).
‘‘(e) TAX TREATMENT OF DISTRIBUTIONS.—
‘‘(1) AMOUNTS USED FOR QUALIFIED MEDICAL
EXPENSES.—Any amount paid or distributed out of
a medical checking account which is used exclusively
to pay qualified medical expenses of any account
holder shall not be includible in gross income.
‘‘(2) INCLUSION OF AMOUNTS NOT USED FOR
QUALIFIED MEDICAL EXPENSES.—Any amount paid
or distributed out of a medical checking account
which is not used exclusively to pay the qualified
medical expenses of the account holder shall be in-
cluded in the gross income of such holder.
‘‘(3) ADDITIONAL TAX ON DISTRIBUTIONS NOT
USED
FOR
QUALIFIED
MEDICAL
EXPENSES.—For
purposes of this section, rules similar to the rules of
section 220(f)(4) shall apply.
‘‘(4) COORDINATION WITH MEDICAL EXPENSE
DEDUCTION.—For purposes of determining the
amount of the deduction under section 213, any pay-
ment or distribution out of a medical checking ac-
count for qualified medical expenses shall not be
treated as an expense paid for medical care.
‘‘(f) REPORTS.—The Secretary may require the
trustee of a medical checking account to make such re-
ports regarding such account to the Secretary and to the
account holder with respect to contributions, distributions,
and such other matters as the Secretary determines appro-
priate. The reports required by this subsection shall be
filed at such time and in such manner and furnished to
such individuals at such time and in such manner as may
be required by the Secretary.’’.
(b) TAX ON EXCESS CONTRIBUTIONS.—Section 4973
of such Code (relating to tax on excess contributions to
individual retirement accounts, certain section 403(b) con-
tracts, and certain individual retirement annuities) is
amended—
(1) in subsection (a) by striking ‘‘or’’ at the end
of paragraph (3), by inserting ‘‘or’’ at the end of
paragraph (4), and by inserting after paragraph (4)
the following:
‘‘(5) a medical checking account (within the
meaning of section 530A(d)),’’, and
(2) by adding at the end the following new sub-
section:
‘‘(g) EXCESS CONTRIBUTIONS TO MEDICAL CHECK-
ING ACCOUNTS.—For purposes of this section, in the case
of medical checking accounts (within the meaning of sec-
tion 530A(d)), the term ‘excess contributions’ means the
sum of—
‘‘(1) the aggregate amount contributed for the
taxable year to the accounts (other than rollover
contributions referred to in section 530A(d)(4)(C))
which is neither excludable from gross income under
section 106(b) nor allowable as a deduction or credit
under section 530A for such year, and
‘‘(2) the amount determined under this sub-
section for the preceding taxable year, reduced by
the sum of—
‘‘(A) the distributions out of the accounts
which were included in gross income under sec-
tion 530A(e)(2), and
‘‘(B) the excess (if any) of—
‘‘(i) the sum of the maximum amount
allowable as a deduction or credit under
section 530A (determined without regard
to section 106(b)) for the taxable year,
over
‘‘(ii) the amount contributed to the
accounts for the taxable year.
For purposes of this subsection, any contribution which
is distributed out of the medical savings account in a dis-
tribution to which section 530A(d)(4)(B) applies shall be
treated as an amount not contributed.’’.
(c) TAX ON PROHIBITED TRANSACTIONS.—
(1) Section 4975 of such Code (relating to tax
on prohibited transactions) is amended by adding at
the end of subsection (c) the following new para-
graph:
‘‘(6) SPECIAL RULE FOR MEDICAL CHECKING
ACCOUNTS.—An individual for whose benefit a med-
ical checking account (within the meaning of section
530A(d)) is established shall be exempt from the tax
imposed by this section with respect to any trans-
action concerning such account (which would other-
wise be taxable under this section) if, with respect
to such transaction, the account ceases to be a med-
ical checking account by reason of the application of
section 530A(e)(2) to such account.’’.
(2) Paragraph (1) of section 4975(e) of such
Code is amended by striking ‘‘or’’ at the end of sub-
paragraph (E), by redesignating subparagraph (F)
as subparagraph (G), and by inserting after sub-
paragraph (E) the following new subparagraph:
‘‘(F) a medical checking account described
in section 530A(d), or’’.
(d) FAILURE TO PROVIDE REPORTS ON MEDICAL
CHECKING ACCOUNTS.—Paragraph (2) of section 6693(a)
(relating to general rule on reports) is amended by strik-
ing ‘‘and’’ at the end of subparagraph (C), by striking the
period at the end of subparagraph (D) and inserting
‘‘, and’’, and by inserting after subparagraph (D) the fol-
lowing new subparagraph:
‘‘(E) section 530A(g) (relating to medical
savings accounts).’’.
(e) CLERICAL AMENDMENT.—The table of parts for
subchapter F of chapter 1 of such Code is amended by
adding at the end the following new item:
‘‘PART IX. MEDICAL CHECKING ACCOUNTS.’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2003.
SEC. 104. DECREASE IN MINIMUM ANNUAL DEDUCTIBLES
UNDER A HIGH DEDUCTIBLE HEALTH PLAN
FOR PURPOSES OF ARCHER MSAS.
(a) IN GENERAL.—Subparagraph (A) of section
220(c)(2) of the Internal Revenue Code of 1986 (defining
high deductible health plan) is amended—
(1) in clause (i) by striking ‘‘$1,500’’ and in-
serting ‘‘$1,000’’, and
(2) in clause (ii) by striking ‘‘$3,000’’ and in-
serting ‘‘$2,000’’.
(b) MINIMUM NOT INCREASED BY INFLATION.—Sec-
tion 220(g) of such Code is amended by inserting ‘‘(other
than the $1,000 amount in subparagraph (A)(i) and the
$2,000 amount in subparagraph (A)(ii) thereof)’’ after
‘‘subsection (c)(2)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2003.
TITLE II—MEDICAL PRIVACY
SEC. 201. FINDINGS.
The Congress finds the following:
(1) Medical privacy is an issue that concerns a
growing number of people in the United States. The
culture of the United States has always strongly fa-
vored a close physician-patient relationship. One of
the key elements of this relationship is the trust that
a patient has that their personal information will be
treated as confidential by medical personnel and will
not be made public or accessible to other persons
without their permission.
(2) In our increasingly complex times, two
trends are combining to exert pressure on maintain-
ing the confidentiality of health care information.
First, public policy favors an increased ability to
provide protection against harmful prescription
interactions and for the reporting of medications’ se-
rious side effects. Second, health care insurers desire
to take advantage of economies of scale in control-
ling health care costs. These trends have greatly re-
duced expectations for the privacy of health care in-
formation.
(3) For the first time in our Nation’s history,
serious loopholes have been written into privacy pro-
tections that were created to protect the right of in-
dividuals. Positive changes in privacy law have been
made in recent years to guarantee that patients are
notified regarding the use of their health informa-
tion, have access to their own medical records, and
are able to request corrections of such records.
These protections must be maintained and strength-
ened.
(4) One of the greatest needs in the area of
health privacy is to protect individuals against the
use of their confidential health information for prof-
it-generating consumer marketing. Patients justifi-
ably have objections to this use of their information
without their consent.
(5) There recently have been implemented a se-
ries of alarming modifications to the standards pre-
viously finalized to protect the privacy of individually
identifiable 
health 
information. 
These 
include
changes in important definitions, additions to the
category of health care operations for which patient
consent for the use of their information is not re-
quired, and changes in permitted use of patient in-
formation without consent for public health pur-
poses.
(6) Recent rollbacks in health privacy need to
be reversed, and the individuals’ confidence that
their private conversations with medical personnel
will remain private needs to be strengthened.
(7) There is also a need to protect the integrity
and confidentiality of social security account num-
bers and to prohibit Federal agencies from imposing
national standards for identification of individuals.
SEC. 202. MODIFICATION OF REGULATIONS ON PRIVACY OF
INDIVIDUALLY IDENTIFIABLE HEALTH IN-
FORMATION.
(a) MARKETING.—
(1) IN GENERAL.—The modifications made by
the August 2002 medical privacy rule to the defini-
tion of the term ‘‘marketing’’ in section 164.501 of
title 45, Code of Federal Regulations, shall have no
force or effect.
(2) AUTHORIZATIONS
FOR
MARKETING.—Sec-
tion 164.508 of title 45, Code of Federal Regula-
tions, shall be construed and applied so as to require
that, if an authorization is required for a use or dis-
closure of protected health information for mar-
keting, the authorization shall be considered invalid
unless it—
(A) uses the term ‘‘marketing’’;
(B) states that the purpose of the use or
disclosure involved is marketing; and
(C) describes the specific marketing uses
and disclosures authorized.
(b) CONSENT FOR USES OR DISCLOSURES TO CARRY
OUT TREATMENT, PAYMENT, OR HEALTH CARE OPER-
ATIONS.—
(1) IN GENERAL.—The modifications made to
section 164.506 of title 45, Code of Federal Regula-
tions, by the August 2002 medical privacy rule shall
have no force or effect.
(2) USE OR DISCLOSURE WITHOUT CONSENT.—
(A) IN GENERAL.—Section 164.506 of title
45, Code of Federal Regulations, insofar as it
permits any use or disclosure of protected
health information without consent, shall have
no force or effect.
(B) CIRCUMSTANCES
WHERE
CONSENT
NOT REQUIRED.—A health care provider may
use or disclose an individual’s protected health
information without obtaining the prior consent
of the individual only in the following cir-
cumstances:
(i) To fill or dispense a prescription,
and to search for drug interactions related
to that prescription, if the health care pro-
vider obtains written consent from the in-
dividual as soon as practicable.
(ii) To carry out treatment of that in-
dividual if—
(I) the individual has not exe-
cuted a Universal Health Privacy
Declaration promulgated under sub-
paragraph (C);
(II) the individual and the health
care provider have not had in-person
communication regarding such treat-
ment; and
(III) obtaining consent would be
impracticable.
(C) UNIVERSAL
HEALTH
PRIVACY
DEC-
LARATION.—
(i) IN
GENERAL.—The Secretary of
Health and Human Services shall promul-
gate a document which shall be known as
the ‘‘Universal Health Privacy Declara-
tion’’.
(ii) 
ELIGIBILITY.—A 
Universal
Health Privacy Declaration may be exe-
cuted by any individual who is a citizen of
the United States or an alien lawfully ad-
mitted to the United States for permanent
residence.
(iii) PURPOSE.—A Universal Health
Privacy Declaration, once executed by an
individual described in clause (ii) and not
revoked, shall be considered to prohibit, as
provided under subparagraph (B), a health
care provider from using or disclosing the
individual’s protected health information
for treatment without obtaining the prior
consent of the individual.
(iv) ENFORCEMENT.—There is estab-
lished in the Department of Health and
Human Services an Office of the Health
Privacy Ombudsman, which shall be head-
ed by an individual known as the ‘‘Health
Privacy Ombudsman’’. The Health Privacy
Ombudsman shall be charged with inves-
tigating complaints submitted by individ-
uals described in clause (ii) regarding a
use or disclosure of protected health infor-
mation in violation of their Universal
Health Privacy Declaration.
(c) DISCLOSURES
FOR LAW ENFORCEMENT PUR-
POSES.—Subparagraph (C) of section 164.506(f)(1)(ii) of
title 45, Code of Federal Regulations shall have no force
or effect.
(d) DEFINITIONS.—
(1) IN GENERAL.—For purposes of this section:
(A) DECEMBER
2000
MEDICAL
PRIVACY
RULE.—The term ‘‘December 2000 medical pri-
vacy rule’’ means the final rule on standards
for privacy of individually identifiable health in-
formation published on December 28, 2000, in
the Federal Register (65 Fed. Reg. 82462), in-
cluding the provisions of title 45, Code of Fed-
eral Regulations, revised or added by such rule.
(B) 
AUGUST
2002
MEDICAL
PRIVACY
RULE.—The term ‘‘August 2002 medical pri-
vacy rule’’ means the final rule, published on
August 14, 2002, in the Federal Register (67
Fed. Reg. 53182), that modified the December
2000 medical privacy rule.
(2) OTHER TERMS DEFINED.—For purposes of
this section:
(A) HEALTH CARE PROVIDER.—The term
‘‘health care provider’’ shall have the meaning
given such term in section 160.103 of title 45,
Code of Federal Regulations, as contained in
the December 2000 medical privacy rule.
(B) DISCLOSURE; INDIVIDUAL; PROTECTED
HEALTH
INFORMATION; TREATMENT; USE.—
The terms ‘‘disclosure’’, ‘‘individual’’, ‘‘pro-
tected health information’’, ‘‘treatment’’, and
‘‘use’’ shall have the meaning given such terms
in section 164.501 of title 45, Code of Federal
Regulations, as contained in the December
2000 medical privacy rule.
SEC. 203. RESTRICTIONS ON THE USE OF THE SOCIAL SE-
CURITY ACCOUNT NUMBER.
(a) REPEAL OF PROVISIONS AUTHORIZING CERTAIN
USAGES OF THE SOCIAL SECURITY ACCOUNT NUMBER.—
Section 205(c)(2) of the Social Security Act (42 U.S.C.
405(c)(2)) is amended—
(1) in subparagraph (C), by striking ‘‘(C)(i) It
is the policy’’ and all that follows through clause
(vi);
(2) by striking clause (ix) of subparagraph (C)
and redesignating clauses (vii) and (viii) of subpara-
graph (C) as clauses (iv) and (v), respectively;
(3) by striking subparagraphs (E) and (H);
(4) by redesignating subparagraphs (F) and
(G) as subparagraphs (E) and (F), respectively; and
(5) in subparagraph (E) (as redesignated by
paragraph (4)), by inserting ‘‘(i)’’ after ‘‘(E)’’, and
by adding at the end the following new clause:
‘‘(ii) No individual shall be treated under any provi-
sion of law, rule, or regulation as required for any purpose
to apply for assignment of a social security account num-
ber for himself or herself or on behalf of any other indi-
vidual, except as a condition for receipt of benefits under
this title as provided in clause (i).’’.
(b) NEW RULES APPLICABLE TO SOCIAL SECURITY
ACCOUNT NUMBERS.—Section 205(c)(2) of such Act is
amended further—
(1) by inserting after subparagraph (B) the fol-
lowing:
‘‘(C)(i) All social security account numbers
issued under this subsection shall be randomly
generated.
‘‘(ii) Except as otherwise provided in this
paragraph—
‘‘(I) the social security account num-
ber issued under this subsection to any in-
dividual shall be the exclusive property of
such individual, and
‘‘(II) the Social Security Administra-
tion shall not divulge the social security ac-
count number issued to any individual
under this subsection to any agency or in-
strumentality of the Federal Government,
to any State, political subdivision of a
State, or agency or instrumentality of a
State or political subdivision thereof, or to
any other individual.
‘‘(iii) Clause (ii) shall not apply with re-
spect to the use of the social security account
number as an identifying number to the extent
provided in section 6109(d) of the Internal Rev-
enue Code of 1986 (relating to use of the social
security account number for social security and
related purposes).’’.
(c) EFFECTIVE DATES AND RELATED RULES.—
(1) EFFECTIVE
DATES.—Not later than 60
days after the date of the enactment of this Act, the
Commissioner of Social Security shall publish in the
Federal Register the date determined by the Com-
missioner, in consultation with the Secretary of the
Treasury, to be the earliest date thereafter by which
implementation of the amendments made by this
section is practicable. The amendments made by
subsection (a) shall take effect on the earlier of such
date or the date which occurs 5 years after the date
of the enactment of this Act. The amendments made
by subsection (b) shall apply with respect to social
security account numbers issued on or after such
earlier date. The amendments made by subsection
(c) shall apply with respect to calendar quarters and
taxable years beginning on or after such earlier date.
(2) REISSUANCE OF NUMBERS.—The Commis-
sioner of Social Security shall ensure that, not later
than 5 years after the date of the enactment of this
Act, all individuals who have been issued social secu-
rity account numbers under section 205(c) of the
Social Security Act as of the date prior to the earlier
date specified in paragraph (1) can request new so-
cial security account numbers in accordance with
such section as amended by this section. Upon
issuance of such new social security account num-
bers, any social security account numbers issued to
such individuals prior to such earlier date specified
in paragraph (1) shall be null and void and subject
to the requirements of section 205(c)(2)(C)(ii)(II) of
such Act, as amended by this section. Any individual
to whom, or on behalf of whom, such a new social
security account number has been issued pursuant
to a request made under this paragraph shall be ex-
empt from any requirement under the laws of the
United States or of any State or political subdivision
thereof, or under the rules and regulations of any
agency or instrumentality of the United States or
any State or political subdivision thereof, to divulge,
use, or acknowledge any social security account
number previously issued to such individual. All per-
sons who obtain new social security account numbers
under this Act are granted lawful immunity from
any Federal, State, or local government agency re-
quirement to divulge, use, or acknowledge previously
issued social security account numbers. Nothing in
this section or the amendments made thereby shall
be construed to preclude the Social Security Admin-
istration and the Secretary of the Treasury from
cross-referencing such social security account num-
bers newly issued to individuals pursuant to this
paragraph to the former social security account
numbers of such individuals for purposes of admin-
istering title II or title XVI of such Act or admin-
istering the Internal Revenue Code of 1986 in con-
nection with section 86, chapter 2, and subtitle C
thereof.
SEC. 204. PROHIBITION OF GOVERNMENTWIDE UNIFORM
IDENTIFYING NUMBERS.
(a) IN GENERAL.—Except as authorized under sec-
tion 205(c)(2) of the Social Security Act, any two agencies
or instrumentalities of the Federal Government may not
implement the same identifying number with respect to
any individual.
(b) IDENTIFYING NUMBERS.—For purposes of this
section—
(1) the term ‘‘identifying number’’, with respect
to an individual means any combination of alpha-nu-
meric symbols which serves to identify such indi-
vidual; and
(2) any identifying number and any one or
more derivatives of such number shall be treated as
the same identifying number.
(c) EFFECTIVE DATE.—The provisions of this section
shall take effect January 1, 2005.
SEC. 205. PROHIBITION OF GOVERNMENT-ESTABLISHED
IDENTIFIERS.
(a) IN GENERAL.—Subject to subsection (b), a Fed-
eral agency may not—
(1) establish or mandate a uniform standard
for identification of an individual that is required to
be used by any other Federal agency, a State agen-
cy, or a private person for any purpose other than
the purpose of conducting the authorized activities
of the Federal agency establishing or mandating the
standard; or
(2) condition receipt of any Federal grant or
contract or other Federal funding on the adoption,
by a State, a State agency, or a political subdivision
of a State, of a uniform standard for identification
of an individual.
(b) TRANSACTIONS BETWEEN PRIVATE PERSONS.—
Notwithstanding subsection (a), a Federal agency may not
establish, mandate, or encourage the use of a uniform
standard for identification of an individual that is required
to be used within the agency, or by any other Federal
agency, a State agency, or a private person, for the pur-
pose of—
(1) investigating, monitoring, overseeing, or
otherwise regulating a transaction to which the Fed-
eral Government is not a party; or
(2) administrative simplification.
(c) AMENDMENT OF PRIVACY ACT OF 1974.—(1)
Section 7 of the Privacy Act of 1974 (5 U.S.C. 552a note)
is amended—
(A) in subsection (a)(2), by striking ‘‘respect
to—’’ and all that follows through the end of sub-
paragraph (B) and inserting ‘‘respect to any disclo-
sure which is required by Federal statute.’’; and
(B) in subsection (b), by inserting ‘‘Federal’’
before ‘‘statutory’’.
(2) Section 205(c)(2)(C)(ii) of the Social Security Act
(42 U.S.C. 405(c)(2)(C)(ii)) is amended by striking ‘‘, un-
less section 7(a)’’ and all that follows through the end of
the section and inserting a period.
(d) ENFORCEMENT.—
(1) AMENDMENTS RELATING TO PRIVACY ACT
OF 1974.—Subsection (g) of section 552a of title 5,
United States Code, is amended—
(A) in subparagraph (D), by inserting
after ‘‘this section,’’ the following: ‘‘subsection
(a) or (b) of section 207 of the Medical Inde-
pendence, Privacy, and Innovation Act of 2003,
or section 7 of the Privacy Act of 1974,’’; and
(B) by adding at the end the following new
paragraph:
‘‘(6) For purposes of any suit brought under the pro-
visions of subsection (g)(1)(D) for failure to comply with
any provision of section 7 of the Privacy Act of 1974, the
term ‘agency’ shall include an agency of a State or local
government.’’.
(2) CRIMINAL PENALTIES FOR MISUSE OF SO-
CIAL
SECURITY
ACCOUNT
NUMBERS.—Section
208(a) of the Social Security Act (42 U.S.C. 408(a))
is amended—
(A) by adding ‘‘or’’ at the end of para-
graph (8); and
(B) by inserting after paragraph (8) the
following new paragraph:
‘‘(9) is a medical service provider or health in-
surance issuer and—
‘‘(A) uses a social security account number
as a medical patient tracking number, patient
record number, or prescription tracking num-
ber; or
‘‘(B) denies any person medical care or
health insurance coverage based upon such per-
son’s refusal to disclose his or her social secu-
rity account number;’’.
TITLE III—MODIFICATIONS RE-
GARDING 
REGULATION 
OF
DRUGS 
UNDER 
FEDERAL
FOOD, DRUG, AND COSMETIC
ACT
SEC. 301. DEFINITION OF DRUG.
Section 201(g)(1) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321(g)(1)) is amended in the
first sentence by striking ‘‘and (B) articles intended’’ and
all that follows and inserting the following: ‘‘and (B) arti-
cles intended for use in the diagnosis, cure, or treatment
(but not mitigation or prevention) of disease in man or
other animals.’’.
SEC. 302. STRIKING OF EFFECTIVENESS REQUIREMENT;
MODIFICATIONS REGARDING PATENT LIST-
INGS, PATENT CERTIFICATIONS, AND THIRTY-
MONTH RULE.
(a) STRIKING OF EFFECTIVENESS REQUIREMENT;
PROHIBITION AGAINST LISTING OF CERTAIN PATENTS.—
(1) IN GENERAL.—Section 505(b) of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C.
355(b)) is amended by striking ‘‘(b)(1)’’ and all that
follows through ‘‘clinical trials required by clause
(A).’’ and inserting the following:
‘‘(b) APPLICATION.—