Title I, Subtitle D
‘‘SEC. 3. AUTHORITY OF SECRETARY.
‘‘(a) EXTRACTION AND DISPOSAL OF HELIUM ON
FEDERAL LANDS.—(1) The Secretary may enter into
agreements with private parties for the recovery and dis-
posal of helium on Federal lands upon such terms and
conditions as he deems fair, reasonable and necessary. The
Secretary may grant leasehold rights to any such helium.
The Secretary may not enter into any agreement by which
the Secretary sells such helium other than to a private
party with whom the Secretary has an agreement for re-
covery and disposal of helium. Such agreements may be
subject to such rules and regulations as may be prescribed
by the Secretary.
‘‘(2) Any agreement under this subsection shall be
subject to the existing rights of any affected Federal oil
and gas lessee. Each such agreement (and any extension
or renewal thereof) shall contain such terms and condi-
tions as deemed appropriate by the Secretary.
‘‘(3) This subsection shall not in any manner affect
or diminish the rights and obligations of the Secretary and
private parties under agreements to dispose of helium pro-
duced from Federal lands in existence at the enactment
of the Helium Act of 1995 except to the extent that such
agreements are renewed or extended after such date.
Title I, Subtitle D
‘‘(b) STORAGE, TRANSPORTATION, AND SALE.—The
Secretary is authorized to store, transport, and sell helium
only in accordance with this Act.
‘‘(c) MONITORING AND REPORTING.—The Secretary
is authorized to monitor helium production and helium re-
serves in the United States and to periodically prepare re-
ports regarding the amounts of helium produced and the
quantity of crude helium in storage in the United States.
‘‘SEC. 4. STORAGE AND TRANSPORTATION OF CRUDE
HELIUM.
‘‘(a) STORAGE
AND TRANSPORTATION.—The Sec-
retary is authorized to store and transport crude helium
and to maintain and operate existing crude helium storage
at the Bureau of Mines Cliffside Field, together with relat-
ed helium transportation and withdrawal facilities.
‘‘(b) CESSATION OF PRODUCTION, REFINING, AND
MARKETING.—Effective one year after the date of enact-
ment of the Helium Act of 1995, the Secretary shall cease
producing, refining, and marketing refined helium and
shall cease carrying out all other activities relating to he-
lium which the Secretary was authorized to carry out
under this Act before the date of enactment of the Helium
Act of 1995, except those activities described in subsection
(a).
Title I, Subtitle D
‘‘(c) DISPOSAL OF FACILITIES.—(1) Within one year
after the date of enactment of the Helium Act of 1995,
the Secretary shall dispose of all facilities, equipment, and
other real and personal property, together with all inter-
ests therein, held by the United States for the purpose
of producing, refining, and marketing refined helium. The
disposal of such property shall be in accordance with the
provisions of law governing the disposal of excess or sur-
plus properties of the United States.
‘‘(2) All proceeds accruing to the United States by
reason of the sale or other disposal of such property shall
be treated as moneys received under this chapter for pur-
poses of section 6(f). All costs associated with such sale
and disposal (including costs associated with termination
of personnel) and with the cessation of activities under
subsection (b) shall be paid from amounts available in the
helium production fund established under section 6(f).
‘‘(3) Paragraph (1) shall not apply to any facilities,
equipment, or other real or personal property, or any in-
terest therein, necessary for the storage and transpor-
tation of crude helium.
‘‘(d) EXISTING CONTRACTS.—All contracts which
were entered into by any person with the Secretary for
the purchase by such person from the Secretary of refined
helium and which are in effect on the date of the enact-
Title I, Subtitle D
ment of the Helium Act of 1995 shall remain in force and
effect until the date on which the facilities referred to in
subsection (c) are disposed of. Any costs associated with
the termination of such contracts shall be paid from the
helium production fund established under section 6(f).
‘‘SEC. 5. FEES FOR STORAGE, TRANSPORTATION AND WITH-
DRAWAL.
‘‘Whenever the Secretary provides helium storage,
withdrawal, or transportation services to any person, the
Secretary is authorized and directed to impose fees on
such person to reimburse the Secretary for the full costs
of providing such storage, transportation, and withdrawal.
All such fees received by the Secretary shall be treated
as moneys received under this Act for purposes of section
6(f).’’.
(d) SALE OF CRUDE HELIUM.—Section 6 is amended
as follows:
(1) Subsection (a) is amended by striking out
‘‘from the Secretary’’ and inserting ‘‘from persons
who have entered into enforceable contracts to pur-
chase an equivalent amount of crude helium from
the Secretary’’.
(2) Subsection (b) is amended by inserting
‘‘crude’’ before ‘‘helium’’ and by adding the follow-
ing at the end thereof: ‘‘Except as may be required
Title I, Subtitle D
by reason of subsection (a), the Secretary shall not
make sales of crude helium under this section in
such amounts as will disrupt the market price of
crude helium.’’.
(3) Subsection (c) is amended by inserting
‘‘crude’’ before ‘‘helium’’ after the words ‘‘Sales of’’
and by striking ‘‘together with interest as provided
in this subsection’’ and all that follows down
through the period at the end of such subsection and
inserting the following: ‘‘all funds required to be re-
paid to the United States as of October 1, 1994
under this section (hereinafter referred to as ‘repay-
able amounts’). The price at which crude helium is
sold by the Secretary shall not be less than the
amount determined by the Secretary as follows:
‘‘(1) Divide the outstanding amount of such re-
payable amounts by the volume (in mcf) of crude he-
lium owned by the United States and stored in the
Bureau of Mines Cliffside Field at the time of the
sale concerned.
‘‘(2) Adjust the amount determined under para-
graph (1) by the Consumer Price Index for years be-
ginning after December 31, 1994.’’.
(4) Subsection (d) is amended to read as fol-
lows:
Title I, Subtitle D
‘‘(d) EXTRACTION OF HELIUM FROM DEPOSITS ON
FEDERAL LANDS.—All moneys received by the Secretary
from the sale or disposition of helium on Federal lands
shall be paid to the Treasury and credited against the
amounts required to be repaid to the Treasury under sub-
section (c) of this section.’’.
(5) Subsection (e) is repealed.
(6) Subsection (f) is amended by inserting
‘‘(1)’’ after ‘‘(f)’’ and by adding the following at the
end thereof:
‘‘(2) Within 7 days after the commencement of each
fiscal year after the disposal of the facilities referred to
in section 4(c), all amounts in such fund in excess of
$2,000,000 (or such lesser sum as the Secretary deems
necessary to carry out this Act during such fiscal year)
shall be paid to the Treasury and credited as provided in
paragraph (1). Upon repayment of all amounts referred
to in subsection (c), the fund established under this sec-
tion shall be terminated and all moneys received under this
Act shall be deposited in the Treasury as General Reve-
nues.’’.
(e) ELIMINATION
OF
STOCKPILE.—Section 8 is
amended to read as follows:
Title I, Subtitle D
‘‘SEC. 8. ELIMINATION OF STOCKPILE.
‘‘(a) REVIEW OF RESERVES.—Not later than Janu-
ary 1, 2014 the Secretary shall review the known helium
reserves in the United States and make a determination
as to the expected life of the domestic helium reserves
(other than federally owned helium stored at the Cliffside
Reservoir) at that time.
‘‘(b) RESERVES BELOW 1 BCF IN 2014.—Not later
than January 1, 2014, if the Secretary determines that
domestic helium reserves (other than federally owned he-
lium stored at the Cliffside Reservoir) are less than 1 bil-
lion cubic feet (bcf), the Secretary shall commence making
sales of crude helium from helium reserves owned by the
United States in such amounts as may be necessary to
dispose of all such helium reserves in excess of 600 million
cubic feet (mcf) by January 1, 2019. The sales shall be
at such times and in such lots as the Secretary determines,
in consultation with the helium industry, necessary to
carry out this subsection. The price for all such sales, as
determined by the Secretary in consultation with the he-
lium industry, shall be such as will ensure repayment of
the amounts required to be repaid to the Treasury under
section 6(c) by the year 2019 with minimum market dis-
ruption. The date specified in this subsection for comple-
tion of such sales and for repayment of debt may be ex-
tended by the Secretary for a period of not to exceed 5
Title I, Subtitle D
additional years if necessary in order to assure repayment
of such debt with minimum market disruption.
‘‘(c) RESERVES ABOVE 1 BCF IN 2014.—Not later
than January 1, 2014, if the Secretary determines that
domestic helium reserves (other than federally owned he-
lium stored at the Cliffside Reservoir) are more than 1
billion cubic feet (bcf), the Secretary shall commence mak-
ing sales of crude helium from helium reserves owned by
the United States in such amounts as may be necessary
to dispose of all such helium reserves in excess of 600 mil-
lion cubic feet (mcf) by January 1, 2024. The sales shall
be at such times and in such lots as the Secretary deter-
mines, in consultation with the helium industry, necessary
to carry out this subsection with minimum disruption of
the market for crude helium.
‘‘(d) DISCOVERY OF ADDITIONAL RESERVES.—The
discovery of additional helium reserves after the year 2014
shall not affect the duty of the Secretary to make sales
of helium as provided in subsection (b) or (c), as the case
may be.’’.
(f) REPEAL OF AUTHORITY TO BORROW.—Sections
12 and 15 are repealed.
Title I, Subtitle E
Subtitle E—Territories
SEC. 1151. TERMINATION OF ANNUAL DIRECT ASSISTANCE
TO NORTHERN MARIANA ISLANDS.
(a) IN GENERAL.—No annual payment may be made
under section 701, 702, or 704 of the Covenant to Estab-
lish a Commonwealth of the Northern Mariana Islands in
Political Union with the United States of America (48
U.S.C. 1681 note), for any fiscal year beginning after Sep-
tember 30, 1995.
(b) ELIMINATION OF 7-YEAR EXTENSIONS.—
(1) IN GENERAL.—The Act of March 24, 1976
(90 Stat. 263; 16 U.S.C. 1681 note), is amended by
striking sections 3 and 4.
(2) CONFORMING CHANGES.—(A) Section 5 of
the Act of March 24, 1976 (90 Stat. 263; 16 U.S.C.
1681 note) is redesignated as section 3.
(B) Section 3 of such Act, as redesignated by
subparagraph (A) of this paragraph, is amended—
(i) by striking ‘‘agreement identified in
section 3 of this Act’’ and inserting ‘‘Agreement
of the Special Representatives on Future
United States Financial Assistance for the Gov-
ernment of the Northern Mariana Islands, exe-
cuted June 10, 1985, between the special rep-
resentative of the President of the United
Title II, Subtitle A
States and the special representatives of the
Governor of the Northern Mariana Islands’’;
and
(ii) by striking ‘‘Interior and Insular Af-
fairs’’ and inserting ‘‘Resources’’.
TITLE II—AGRICULTURAL
PROGRAMS
SEC. 2001. SHORT TITLE.
This title may be cited as the ‘‘Agricultural Reconcili-
ation Act of 1995’’.
Subtitle A—Extension and Modi-
fication of Various Commodity
Programs
SEC. 2101. EXTENSION OF LOANS, PAYMENTS, AND ACRE-
AGE REDUCTION PROGRAMS FOR WHEAT
THROUGH 2002.
(a) AGRICULTURAL ACT OF 1949.—Section 107B of
the Agricultural Act of 1949 (7 U.S.C. 1445b–3a) is
amended—
(1) in the section heading by striking ‘‘1995’’
and inserting ‘‘2002’’;
(2) in subsections (a)(1), (a)(4)(C), (b)(1),
(c)(1)(A), 
(c)(1)(B)(iii), 
(e)(1)(G), 
(e)(3)(A),
(e)(3)(C)(iii), (f)(1), (q), by striking ‘‘1995’’ each
place it appears and inserting ‘‘2002’’;
Title II, Subtitle A
(3) in the heading of subsection (c)(1)(B)(ii),
by striking ‘‘AND
1995’’ and inserting ‘‘THROUGH
2002’’;
(4) in subsection (c)(1)(B)(ii), by striking ‘‘and
1995’’ and inserting ‘‘through 2002’’;
(5) in subsection (c)(1)(E)(vii), by striking
‘‘1997’’ and inserting ‘‘2002’’;
(6) in the heading of subsection (e)(1)(G), by
striking ‘‘1995’’ and inserting ‘‘2002’’; and
(7) in subsection (g)(1), by striking ‘‘and
1995’’ and inserting ‘‘through 2002’’.
(b) FOOD SECURITY WHEAT RESERVE.—Section
302(i) of the Food Security Wheat Reserve Act of 1980
(7 U.S.C. 1736f–1(i)) is amended by striking ‘‘1995’’ both
places it appears and inserting ‘‘2002’’.
(c) NONAPPLICABILITY OF CERTIFICATE REQUIRE-
MENTS.—Sections 379d through 379j of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1379d–1379j) shall not
be applicable to wheat processors or exporters during the
period June 1, 1996, through May 31, 2003.
(d) SUSPENSION OF LAND USE, WHEAT MARKETING
ALLOCATION, 
AND
PRODUCER
CERTIFICATE
PROVI-
SIONS.—Sections 331 through 339, 379b, and 379c of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1331
Title II, Subtitle A
through 1339, 1379b, and 1379c) shall not be applicable
to the 1996 through 2002 crops of wheat.
(e) SUSPENSION OF CERTAIN QUOTA PROVISIONS.—
The joint resolution entitled ‘‘A joint resolution relating
to corn and wheat marketing quotas under the Agricul-
tural Adjustment Act of 1938, as amended’’, approved
May 26, 1941 (7 U.S.C. 1330 and 1340), shall not be
applicable to the crops of wheat planted for harvest in the
calendar years 1996 through 2002.
(f) NONAPPLICABILITY OF SECTION 107 OF AGRICUL-
TURAL ACT OF 1949.—Section 107 of the Agricultural Act
of 1949 (7 U.S.C. 1445a) shall not be applicable to the
1996 through 2002 crops of wheat.
SEC. 2102. EXTENSION OF LOANS, PAYMENTS, AND ACRE-
AGE 
REDUCTION 
PROGRAMS 
FOR 
FEED
GRAINS THROUGH 2002.
(a) AGRICULTURAL ACT OF 1949.—Section 105B of
the Agricultural Act of 1949 (7 U.S.C. 1444f) is amend-
ed—
(1) in the section heading, by striking ‘‘1995’’
and inserting ‘‘2002’’;
(2) in subsections (a)(1), (a)(4)(C), (a)(6),
(b)(1), (c)(1)(A), (c)(1)(B)(iii), (e)(1)(G), (e)(1)(H),
(e)(2)(H), (e)(3)(A), (e)(3)(C)(iii), (f)(1), (p)(1),
Title II, Subtitle A
(q)(1), and (r), by striking ‘‘1995’’ each place it ap-
pears and inserting ‘‘2002’’;
(3) in the heading of subsection (c)(1)(B)(ii),
by striking ‘‘AND
1995’’ and inserting ‘‘THROUGH
2002’’;
(4) in subsection (c)(1)(B)(ii), by striking ‘‘and
1995’’ and inserting ‘‘through 2002’’;
(5) in subsection (c)(1)(E)(vii), by striking
‘‘1997’’ and inserting ‘‘2002’’;
(6) in the headings of subsections (e)(1)(G) and
(e)(1)(H), by striking ‘‘1995’’ both places it appears
and inserting ‘‘2002’’; and
(7) in subsection (g)(1), by striking ‘‘and
1995’’ and inserting ‘‘through 2002’’.
(b) RECOURSE LOAN PROGRAM FOR SILAGE.—Sec-
tion 403 of the Food Security Act of 1985 (7 U.S.C.
1444e–1) is amended by striking ‘‘1996’’ and inserting
‘‘2002’’.
(c) NONAPPLICABILITY OF SECTION 105 OF AGRICUL-
TURAL ACT OF 1949.—Section 105 of the Agricultural Act
of 1949 (7 U.S.C. 1444b) shall not be applicable to the
1996 through 2002 crops of feed grains.
Title II, Subtitle A
SEC. 2103. EXTENSION OF LOANS, PAYMENTS, AND ACRE-
AGE REDUCTION PROGRAMS FOR COTTON
THROUGH 2002.
(a) 
EXTRA
LONG
STAPLE
COTTON.—Section
103(h)(16) of the Agricultural Act of 1949 (7 U.S.C.
1444(h)(16)) is amended by striking ‘‘1996’’ and inserting
‘‘2003’’.
(b) UPLAND COTTON.—Section 103B of the Agricul-
tural Act of 1949 (7 U.S.C. 1444–2) is amended—
(1) in the section heading, by striking ‘‘1997’’
and inserting ‘‘2002’’;
(2) in subsections (a)(1), (b)(1), (c)(1)(A),
(c)(1)(B)(ii), (c)(1)(D)(v)(II), and (o), by striking
‘‘1997’’ each place it appears and inserting ‘‘2002’’;
(3) 
in 
the 
heading 
of 
subsection
(c)(1)(D)(v)(II), by striking ‘‘1997 CROPS’’ and in-
serting ‘‘2002 CROPS’’;
(4) in subsection (e)(1)(D), by striking ‘‘the
1997 crop’’ and inserting ‘‘each of the 1997 through
2002 crops’’;
(5) in subsections (e)(3)(A) and (f)(1), by strik-
ing ‘‘1995’’ each place it appears and inserting
‘‘2002’’; and
(6) in subparagraphs (B)(i), (D)(i), (E)(i), and
(F)(i) of subsection (a)(5), by striking ‘‘1998’’ each
place it appears and inserting ‘‘2003’’.
Title II, Subtitle A
(c) COTTONSEED AND COTTONSEED OIL.—Section
203(b) of the Agricultural Act of 1949 (7 U.S.C.
1446d(b)) is amended by striking ‘‘1995’’ and inserting
‘‘2002’’.
(d) AGRICULTURAL ADJUSTMENT ACT OF 1938.—
Section 374(a) of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1374(a)) is amended by striking ‘‘1995’’
each place it appears and inserting ‘‘2002’’.
(e) SUSPENSION OF BASE ACREAGE ALLOTMENTS,
MARKETING QUOTAS, AND RELATED PROVISIONS.—Sec-
tions 342, 343, 344, 345, 346, and 377 of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1342–1346 and 1377)
shall not be applicable to any of the 1996 through 2002
crops of upland cotton.
(f) SUSPENSION OF MISCELLANEOUS COTTON PROVI-
SIONS.—Section 103(a) of the Agricultural Act of 1949
(7 U.S.C. 1444(a)) shall not be applicable to the 1996
through 2002 crops.
(g) PRELIMINARY ALLOTMENTS FOR 2003 CROP OF
UPLAND COTTON.—Notwithstanding any other provision
of law, the permanent State, county, and farm base acre-
age allotments for the 1977 crop of upland cotton, ad-
justed for any underplantings in 1977 and reconstituted
as provided in section 379 of the Agricultural Adjustment
Title II, Subtitle A
Act of 1938 (7 U.S.C. 1379), shall be the preliminary al-
lotments for the 2003 crop.
(h) COTTON CLASSIFICATION SERVICES.—The first
sentence of section 3a of the Act of March 3, 1927 (com-
monly known as the ‘‘Cotton Statistics and Estimates
Act’’) (chapter 337; 7 U.S.C. 473a), is amended by strik-
ing ‘‘1996’’ and inserting ‘‘2002’’.
SEC. 2104. EXTENSION OF LOANS, PAYMENTS, AND ACRE-
AGE 
REDUCTION 
PROGRAMS 
FOR 
RICE
THROUGH 2002.
Section 101B of the Agricultural Act of 1949 (7
U.S.C. 1441–2) is amended—
(1) in the section heading, by striking ‘‘1995’’
and inserting ‘‘2002’’;
(2) in subsections (a)(1), (a)(3), (b)(1),
(c)(1)(A), (c)(1)(B)(iii), (e)(3)(A), (f)(1), and (n),
by striking ‘‘1995’’ each place it appears and insert-
ing ‘‘2002’’;
(3) in subsection (a)(5)(D)(i), by striking
‘‘1996’’ and inserting ‘‘2001’’;
(4) in the heading of subsection (c)(1)(B)(ii),
by striking ‘‘AND
1995’’ and inserting ‘‘THROUGH
2002’’;
(5) in subsection (c)(1)(B)(ii), by striking ‘‘and
1995’’ and inserting ‘‘through 2002’’;
Title II, Subtitle A
(6) in subsection (c)(1)(D)(v)(II), by striking
‘‘1997’’ and inserting ‘‘2002’’; and
(7) 
in 
the 
heading 
of 
subsection
(c)(1)(D)(v)(II), by striking ‘‘1997 CROPS’’ and in-
serting ‘‘2002 CROPS’’.
SEC. 2105. EXTENSION OF LOANS AND PAYMENTS FOR OIL-
SEEDS THROUGH 2002.
Section 205 of the Agricultural Act of 1949 (7 U.S.C.
1446f) is amended—
(1) in the section heading, by striking ‘‘1995’’
and inserting ‘‘2002’’;
(2) in subsections (b), (c), (e)(1), and (n), by
striking ‘‘1995’’ each place it appears and inserting
‘‘2002’’; and
(3) in subsections (c) and (h)(2), by striking
‘‘1997’’ each places it appears and inserting ‘‘2002’’.
SEC. 2106. INCREASE IN FLEX ACRES.
(a) WHEAT.—Subsection (c)(1)(C)(ii) of section
107B of the Agricultural Act of 1949 (7 U.S.C. 1445b–
3a) is amended by striking ‘‘85 percent’’ and inserting
‘‘85 percent (through the 1995 crop of wheat) and 77 per-
cent (for the 1996 through 2002 crops)’’.
(b) FEED GRAINS.—Subsection (c)(1)(C)(ii) of sec-
tion 105B of such Act (7 U.S.C. 1444f) is amended by
striking ‘‘85 percent’’ and inserting ‘‘85 percent (through
Title II, Subtitle A
the 1995 crop) and 77 percent (for the 1996 through 2002
crops)’’.
(c) UPLAND COTTON.—Subsection (c)(1)(C)(ii) of
section 103B of such Act (7 U.S.C. 1444–2) is amended
by striking ‘‘85 percent’’ and inserting ‘‘85 percent
(through the 1995 crop of upland cotton) and 77 percent
(for the 1996 through 2002 crops)’’.
(d) RICE.—Subsection (c)(1)(C)(ii) of section 101B
of such Act (7 U.S.C. 1441–2) is amended by striking ‘‘85
percent’’ and inserting ‘‘85 percent (through the 1995
crop of rice) and 77 percent (for the 1996 through 2002
crops)’’.
SEC. 2107. REDUCTION IN 50/85 AND 0/85 PROGRAMS.
(a) RICE.—Section 101B(c)(1)(D) of the Agricul-
tural Act of 1949 (7 U.S.C. 1441–2(c)(1)(D)) is amend-
ed—
(1) in the subparagraph heading, by striking
‘‘50/85 PROGRAM’’ and inserting ‘‘50/80 PROGRAM’’;
and
(2) in clause (i), by striking ‘‘8 percent for each
of the 1991 through 1993 crops, and 15 percent for
each of the 1994 through 1997 crops’’ both places
it appears and inserting ‘‘20 percent for each of the
1996 through 2002 crops’’.
Title II, Subtitle A
(b) COTTON.—Section 103B(c)(1)(D) of such Act (7
U.S.C. 1444–2(c)(1)(D)) is amended—
(1) in the subparagraph heading, by striking
‘‘50/85 PROGRAM’’ and inserting ‘‘50/80 PROGRAM’’;
and
(2) in clause (i), by striking ‘‘8 percent for each
of the 1991 through 1993 crops, and 15 percent for
each of the 1994 through 1997 crops’’ both places
it appears and inserting ‘‘20 percent for each of the
1996 through 2002 crops’’.
(c) FEED GRAINS.—Section 105B(c)(1)(E) of such
Act (7 U.S.C. 1444f(c)(1)(E)) is amended—
(1) in the subparagraph heading, by striking
‘‘0/85 PROGRAM’’ and inserting ‘‘0/80 PROGRAM’’;
and
(2) in clause (i), by striking ‘‘8 percent for each
of the 1991 through 1993 crops, and 15 percent for
each of the 1994 through 1997 crops’’ both places
it appears and inserting ‘‘20 percent for each of the
1996 through 2002 crops’’.
(d) WHEAT.—Section 107B(c)(1)(E) of such Act (7
U.S.C. 1445–3a(c)(1)(E)) is amended—
(1) in the subparagraph heading, by striking
‘‘0/85 PROGRAM’’ and inserting ‘‘0/80 PROGRAM’’;
and
Title II, Subtitle B
(2) in clause (i), by striking ‘‘8 percent for each
of the 1991 through 1993 crops, and 15 percent for
each of the 1994 through 1997 crops’’ both places
it appears and inserting ‘‘20 percent for each of the
1996 through 2002 crops’’.
(e) EFFECT
OF AMENDMENTS
ON PRIOR CROP
YEARS.—Sections 
101B(c)(1)(D), 
103B(c)(1)(D),
105B(c)(1)(E), and 107B(c)(1)(E) of the Agricultural Act
of 1949, as in effect on the day before the date of the
enactment of this Act, shall continue to apply with respect
to the 1991 through 1995 crops covered by such sections.
Subtitle B—Sugar
SEC. 2201. EXTENSION AND MODIFICATION OF SUGAR PRO-
GRAM.
(a) ASSURANCE OF SUGAR SUPPLY.—Section 206 of
the Agricultural Act of 1949 (7 U.S.C. 1446g, et seq.)
is amended to read as follows:
‘‘SEC. 206. ASSURANCE OF SUGAR SUPPLY.
‘‘(a) IN GENERAL.—The price of each crop of sugar
beets and sugarcane, respectively, shall be supported in
accordance with this section.
‘‘(b) SUGARCANE.—Subject to subsection (d), the
Secretary shall support the price of domestically grown
sugarcane through loans at 18 cents per pound for raw
cane sugar.
Title II, Subtitle B
‘‘(c) SUGAR BEETS.—Subject to subsection (d), the
Secretary shall support the price of each crop of domesti-
cally grown sugar beets through loans at the level provided
for refined beet sugar produced from the 1995 crop of do-
mestically grown sugar beets.
‘‘(d) ADJUSTMENT IN SUPPORT LEVEL.—
‘‘(1) DOWNWARD
ADJUSTMENT
IN
SUPPORT
LEVEL.—
‘‘(A) IN
GENERAL.—The Secretary shall
decrease the support price of domestically
grown sugarcane and sugar beets from the
price determined for the preceding crop, as es-
tablished under this section, if negotiated re-
ductions in export subsidies and domestic sub-
sidies provided for sugar of the European
Union and other major sugar growing, produc-
ing, and exporting countries (‘major countries’)
in the aggregate exceed the commitments made
as part of the Uruguay Round Agreements.
‘‘(B) EXTENT OF REDUCTION.—The Sec-
retary shall not reduce the support price under
this section below a level that provides an equal
measure of support to that provided by any
other major country or customs union based on
an examination of both domestic and export
Title II, Subtitle B
subsidies subject to reduction in the Agreement
on 
Agriculture 
referenced 
in 
U.S.C.
3511(d)(2).
‘‘(C) MAJOR COUNTRIES.—For purposes of
this subsection, the term ‘major countries’ in-
cludes all countries allocated a share of the tar-
iff rate quota for imported sugars and syrups
by the United States Trade Representative pur-
suant to additional U.S. note 5 of chapter 17
of the Harmonized Tariff Schedule, all coun-
tries of the European Union, and the People’s
Republic of China.
‘‘(2) INCREASES IN SUPPORT LEVEL.—The Sec-
retary may increase the support level for each crop
of domestically grown sugarcane and sugar beets
from the level determined for the preceding crop
based on such factors as the Secretary determines
appropriate, including changes (during the 2 crop
years immediately preceding the crop year for which
the determination is made) in the cost of sugar
products, the cost of domestic sugar production, the
amount of any applicable assessments, and other
factors or circumstances that may adversely affect
domestic sugar production.
‘‘(e) LOAN TYPE; PROCESSOR ASSURANCES.—
Title II, Subtitle B
‘‘(1) IN GENERAL.—Subject to paragraph (2),
the Secretary shall carry out this section through
the use of recourse loans.
‘‘(2) MODIFICATION.—During any fiscal year in
which the tariff rate quota for imports of sugar into
the United States is set at, or is increased to, a level
that exceeds the minimum level for such imports
committed to by the United States under the Agree-
ment on Agriculture contained in the Uruguay
Round of Agreements of the General Agreement on
Tariffs and Trade, the Secretary shall carry out this
section by making available nonrecourse loans. Any
recourse loan previously made available by the Sec-
retary under this section during such fiscal year
shall 
be 
modified 
by 
the 
Secretary 
into 
a
nonrecourse loan.
‘‘(3) PROCESSOR ASSURANCES.—In order to ef-
fectively support the prices of sugar beets and sugar-
cane received by the producer, the Secretary shall
obtain from each processor that receives a loan
under this section such assurances as the Secretary
considers adequate that, if the Secretary is required
under paragraph (2) to make nonrecourse loans
available, or modify recourse loans into nonrecourse
loans, each producer served by the processor will re-
Title II, Subtitle B
ceive the appropriate minimum payment for sugar
beets and sugarcane delivered by the producer, as
determined by the Secretary.
‘‘(f) ANNOUNCEMENTS.—In order to ensure the effi-
cient administration of the program under this section and
the effective support of the price of sugar, the Secretary
shall announce the type of loans available and the loan
rates for beet sugar and cane sugar for any fiscal year
under this section as far in advance as is practicable.
‘‘(g) LOAN TERM.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2) and subsection (h), loans under this sec-
tion during any fiscal year shall be made available
not earlier than the beginning of the fiscal year and
shall mature at the end of 3 months.
‘‘(2) EXTENSION.—The maturity of a loan
under this section may be extended for up to 2 addi-
tional 3-month periods, at the option of the bor-
rower, upon written request to the Commodity Cred-
it Corporation. The maturity of a loan may not be
extended under this paragraph beyond the end of
the fiscal year.
‘‘(h) SUPPLEMENTARY
LOANS.—Subject to sub-
section (d), the Secretary shall make available to eligible
processors price support loans with respect to sugar proc-
Title II, Subtitle B
essed from sugar beets and sugarcane harvested in the last
3 months of a fiscal year. Such loans shall mature at the
end of the fiscal year. The processor may repledge the
sugar as collateral for a price support loan in the subse-
quent fiscal year, except that the second loan shall—
‘‘(1) be made at the loan rate in effect at the
time the second loan is made; and
‘‘(2) mature in not more than 9 months less the
quantity of time that the first loan was in effect.
‘‘(i) USE OF COMMODITY CREDIT CORPORATION.—
The Secretary shall use the funds, facilities, and authori-
ties of the Commodity Credit Corporation to carry out this
section.
‘‘(j) MARKETING ASSESSMENTS.—The following as-
sessments shall be collected with respect to all sugar mar-
keted within the United States during the 1996 through
2003 fiscal years:
‘‘(1) BEET
SUGAR.—The first seller of beet
sugar produced from sugar beets or sugar beet mo-
lasses, or refined sugar refined outside of the United
States, shall remit to the Commodity Credit Cor-
poration a nonrefundable marketing assessment in
an amount equal to 1.1794 percent of the loan level
established under subsection (b) per pound of sugar
marketed.
Title II, Subtitle B
‘‘(2) CANE SUGAR.—The first seller of raw cane
sugar produced from sugarcane or sugarcane molas-
ses, shall remit to the Commodity Credit Corpora-
tion a nonrefundable marketing assessment in an
amount equal to 1.1 percent of the loan level estab-
lished under subsection (b) per pound of sugar mar-
keted (including the transfer or delivery of the sugar
to a refinery for further processing or marketing).
‘‘(3) COLLECTION.—
‘‘(A) TIMING.—Marketing assessments re-
quired under this subsection shall be collected
and remitted to the Commodity Credit Corpora-
tion within 30 days of the date that the sugar
is marketed.
‘‘(B) MANNER.—Subject to subparagraph
(A), marketing assessments shall be collected
under this subsection in the manner prescribed
by the Secretary and shall be nonrefundable.
‘‘(4) PENALTIES.—If any person fails to remit
an assessment required by this subsection or fails to
comply with such requirements for recordkeeping or
otherwise as are required by the Secretary to carry
out this subsection, the person shall be liable to the
Secretary for a civil penalty up to an amount deter-
mined by multiplying—
Title II, Subtitle B
‘‘(A) the quantity of sugar involved in the
violation; by
‘‘(B) the loan level for the applicable crop
of sugarcane or sugar beets from which the
sugar is produced.
For the purposes of this paragraph, refined sugar
shall be treated as produced from sugar beets.
‘‘(5) ENFORCEMENT.—The Secretary may en-
force this subsection in the courts of the United
States.
‘‘(6) REGULATIONS.—The Secretary shall pro-
mulgate regulations to carry out this subsection.
‘‘(k) INFORMATION REPORTING.—
‘‘(1) DUTY OF PROCESSORS AND REFINERS TO
REPORT.—All sugarcane processors, cane sugar re-
finers, and sugar beet processors shall furnish the
Secretary, on a monthly basis, such information as
the Secretary may require to administer sugar pro-
grams, including the quantity of purchases of sugar-
cane, sugar beets, and sugar, and production, impor-
tation, distribution, and stock levels of sugar.
‘‘(2) DUTY
OF
PRODUCERS
TO
REPORT.—In
order to efficiently and effectively carry out the pro-
gram under this section, the Secretary may require
a producer of sugarcane or sugar beets to report, in
Title II, Subtitle B
the manner prescribed by the Secretary, the produc-
er’s sugarcane or sugar beet yields and acres planted
to sugarcane or sugar beets, respectively.
‘‘(3) PENALTY.—Any person willfully failing or
refusing to furnish the information, or furnishing
willfully any false information, shall be subject to a
civil penalty of not more than $10,000 for each such
violation.
‘‘(4) MONTHLY REPORTS.—Taking into consid-
eration the information received under paragraph
(1), the Secretary shall publish on a monthly basis
composite data on production, imports, distribution,
and stock levels of sugar.
‘‘(l) SUGAR ESTIMATES.—
‘‘(1) DOMESTIC REQUIREMENT.—Before the be-
ginning of each fiscal year, the Secretary shall esti-
mate the domestic sugar requirement of the United
States equal to Total Estimated Disappearance
minus the quantity of sugar that will be available
from carry-in stocks.
‘‘(2) TOTAL
DISAPPEARANCE.—For the pur-
poses of this subsection, the term ‘‘Total Estimated
Disappearance’’ means the quantity of sugar, as es-
timated by the Secretary, that will be consumed in
the United States during the fiscal year (other than
Title II, Subtitle B
sugar imported for the production of polyhydric alco-
hol or to be refined and reexported in refined form
or in sugar containing products) plus the quantity of
sugar that would provide for adequate carryover
stocks.
‘‘(3) QUARTERLY
REESTIMATES.—The Sec-
retary shall make quarterly reestimates of sugar
consumption, stocks, production, and imports for a
fiscal year no later than the beginning of each of the
second through fourth quarters of the fiscal year.
‘‘(m) DEFINITION
OF MARKET.—For purposes of
this section, the term ‘market’ means to sell or otherwise
dispose of in commerce in the United States (including,
with respect to any integrated processor and refiner, the
movement of raw cane sugar into the refining process) and
deliver to a buyer.
‘‘(n) CROPS.—This section shall be effective only for
the 1996 through 2002 crops of sugar beets and sugar-
cane.’’.
(b) CONFORMING AMENDMENT.—Part VII of subtitle
B of title III of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1359aa et seq.) is repealed.
Title II, Subtitle C
Subtitle C—Peanuts
SEC. 2301. EXTENSION OF PRICE SUPPORT PROGRAM FOR
PEANUTS AND RELATED PROGRAMS.
(a) AGRICULTURAL ACT OF 1949.—Section 108B of
the Agricultural Act of 1949 (7 U.S.C. 1445c–3) is
amended—
(1) in the section heading, by striking ‘‘1997’’
and inserting ‘‘2002’’;
(2) in subsection (a)(1), (a)(2), (b)(1), and (h),
by striking ‘‘1997’’ each place it appears and insert-
ing ‘‘2002’’; and
(3) in subsection (g)(1), by striking ‘‘1997
crops’’ the first place it appears and inserting ‘‘2002
crops’’.
(b) AGRICULTURAL ADJUSTMENT ACT OF 1938.—
Part VI of subtitle B of title III of the Agricultural Ad-
justment Act of 1938 is amended—
(1) in section 358–1 (7 U.S.C. 1358–1)—
(A) in the section heading, by striking
‘‘1997’’ and inserting ‘‘2002’’;
(B) in subsection (a)(3), by striking
‘‘1990’’ and inserting ‘‘1990, for the 1991
through 1995 marketing years, and 1995, for
the 1996 through 2002 marketing years’’;
(C) in subsection (b)(1)(A)—
Title II, Subtitle C
(i) by striking ‘‘1997’’ and inserting
‘‘2002’’; and
(ii) in clause (i), by inserting before
the semicolon the following: ‘‘, for the
1991 through 1995 marketing years, and
the 1995 marketing year, for the 1996
through 2002 marketing years’’; and
(D) in subsections (b)(1)(B), (b)(2)(A),
(b)(2)(C), (b)(3)(A), and (f), by striking
‘‘1997’’ each place it appears and inserting
‘‘2002’’;
(2) in section 358b (7 U.S.C. 1358b)—
(A) in the section heading, by striking
‘‘1995’’ and inserting ‘‘2002’’; and
(B) in subsection (c), by striking ‘‘1995’’
and inserting ‘‘2002’’;
(3) in section 358c(d) (7 U.S.C. 1358c(d)), by
striking ‘‘1995’’ and inserting ‘‘2002’’; and
(4) in section 358e (7 U.S.C. 1359a)—
(A) in the section heading, by striking
‘‘1997’’ and inserting ‘‘2002’’; and
(B) in subsection (i), by striking ‘‘1997’’
and inserting ‘‘2002’’.
(c) FOOD, AGRICULTURE, CONSERVATION, 
AND
TRADE ACT OF 1990.—Title VIII of the Food, Agri-
Title II, Subtitle C
culture, Conservation, and Trade Act of 1990 (Public Law
101–624; 104 Stat. 3459) is amended—
(1) in section 801 (104 Stat. 3459), by striking
‘‘1995’’ and inserting ‘‘2002’’;
(2) in section 807 (104 Stat. 3478), by striking
‘‘1995’’ and inserting ‘‘2002’’; and
(3) in section 808 (7 U.S.C. 1441 note), by
striking ‘‘1995’’ and inserting ‘‘2002’’.
SEC. 2302. NATIONAL POUNDAGE QUOTAS AND ACREAGE
ALLOTMENTS.
(a) ESTABLISHMENT.—Subsection (a)(1) of section
358–1 of the Agricultural Adjustment Act of 1938 (7
U.S.C. 1358–1) is amended to read as follows:
‘‘(1) ESTABLISHMENT.—The national poundage
quota for peanuts for each of the 1991 through
2002 marketing years shall be established by the
Secretary at a level that is equal to the quantity of
peanuts (in tons) that the Secretary estimates will
be devoted in each such marketing year to domestic
edible and related uses. Beginning with the 1996
marketing year, the Secretary shall exclude seed
uses from the estimate of domestic edible and relat-
ed uses, but shall include the estimated quantity of
peanuts and peanut products to be imported into the
Title II, Subtitle C
United States for the marketing year for which the
quota is being established.’’.
(b) EXCLUSIONS FROM FARM POUNDAGE QUOTA.—
Subsection (b) of such section is amended—
(1) in paragraph (1)(B), by striking clauses (i)
and (ii) and inserting the following new clauses:
‘‘(i) through the 1995 marketing year,
any increases for undermarketings from
previous years; or
‘‘(ii) through the 2002 marketing
year, any increases resulting from the allo-
cation of quotas voluntarily released for 1
year under paragraph (7).’’; and
(2) in paragraph (3)(B), by striking clauses (i)
and (ii) and inserting the following new clauses:
‘‘(i) through the 1995 marketing year,
any increases for undermarketings of
quota peanuts from previous years; or
‘‘(ii) through the 2002 marketing
year, any increase resulting from the allo-
cation of quotas voluntarily released for 1
year under paragraph (7).’’.
(c) TEMPORARY QUOTA ALLOCATION.—Subsection
(b)(2) of such section is amended—
Title II, Subtitle C
(1) in subparagraph (A), by striking ‘‘subpara-
graph (B) and subject to’’; and
(2) by striking subparagraph (B) and inserting
the following new subparagraph:
‘‘(B) TEMPORARY QUOTA ALLOCATION.—
‘‘(i) ALLOCATION RELATED TO SEED
PEANUTS.—Temporary allocation of quota
pounds for the marketing year only in
which the crop is planted shall be made to
producers for each of the 1996 through
2002 marketing years as provided in this
subparagraph. The temporary quota alloca-
tion shall be equal to the pounds of seed
peanuts planted on the farm, as may be
adjusted under regulations prescribed by
the Secretary. The temporary allocation of
quota pounds under this paragraph shall
be in addition to the farm poundage quota
otherwise established under this subsection
and shall be credited for the applicable
marketing year only, in total to the pro-
ducer of the peanuts on the farm in a
manner prescribed by the Secretary.
‘‘(ii) CONDITION
ON
ALLOCATION.—
The allocation of quota pounds to produc-
Title II, Subtitle C
ers under this subparagraph shall be per-
formed in such a manner so that such allo-
cation will not result in a net decrease in
the farm poundage quota for a farm in ex-
cess of 3 percent, after temporary seed
quota is added, from the basic farm quota
in 1996. Such decrease shall occur one
time only and shall be applicable to the
1996 marketing year only.
‘‘(iii) TERM OF PROVISION.—Applica-
tion of this subparagraph may continue so
long as doing so does not result in in-
creased cost to the Commodity Credit Cor-
poration by displacement of quota peanuts
by additional peanuts in the domestic mar-
ket, increased losses in the Association
loan pools, or other such increases in cost.
‘‘(iv) EFFECT
OF
OTHER
REQUIRE-
MENTS.—Nothing in this section shall alter
or change in any way the requirements re-
garding the use of quota and additional
peanuts established by section 359a(b) of
the Agricultural Act of 1949 (7 U.S.C.
1359a(b)), as added by section 804 of the
Title II, Subtitle C
is being made. The farm poundage quota leased
or released under this subparagraph shall be
considered produced for only 1 of the 3 market-
ing years immediately preceding the marketing
year for which the determination is being made.
The farm shall not receive considered produced
credit for more than 1 marketing year out of
the 3 immediately preceding marketing years
under the options in this subparagraph.’’.
(e) ALLOCATION
OF QUOTAS REDUCED
OR RE-
LEASED
TO
FARMS
WITHOUT
QUOTAS.—Subsection
(b)(6) of such section is amended to read as follows:
‘‘(6) ALLOCATION OF QUOTAS REDUCED OR RE-
LEASED.—
‘‘(A) IN GENERAL.—The total quantity of
the farm poundage quotas reduced or volun-
tarily released from farms in a State for any
marketing year under paragraphs 3 and (5)
shall be allocated under subparagraph (B), as
the Secretary may by regulation prescribe, to
other farms in the State on which peanuts were
produced in at least 2 of the 3 crop years im-
mediately preceding the year for which the allo-
cation is being made.
Title II, Subtitle C
‘‘(B) SET-ASIDE
FOR
FARMS
WITH
NO
QUOTA.—The total amount of farm poundage
quota to be allocated in the State under sub-
paragraph (A) shall be allocated to farms in the
State for which no farm poundage quota was
established for the immediately preceding year’s
crop. The allocation to any such farm shall not
exceed the average farm production of peanuts
for the 3 immediately preceding years during
which peanuts were produced on the farm. Any
farm quota pounds remaining after allocation to
farms under this subparagraph shall be allo-
cated to farms in the State on which poundage
quotas were established for the immediately
preceding crop year.’’.
(f) TRANSFER
OF ADDITIONAL PEANUTS.—Sub-
section (b) of such section is amended by striking para-
graphs (8) and (9) and inserting the following new para-
graph:
‘‘(8) TRANSFER
OF
ADDITIONAL
PEANUTS.—
Additional peanuts on a farm from which the quota
poundage was not harvested and marketed may be
transferred to the quota loan pool for pricing pur-
poses on such basis as the Secretary shall by regula-
tion provide, except that the poundage of such pea-
Title II, Subtitle C
nuts so transferred shall not exceed the difference in
the total peanuts meeting quality requirements for
domestic edible use as determined by the Secretary
marketed from the farm and the total farm pound-
age quota, excluding quota pounds transferred to the
farm in the fall. Peanuts transferred under this
paragraph shall be supported at a total of not less
than 70 percent of the quota support rate for the
marketing years in which such transfers occur and
such transfers for a farm shall not exceed 25 per-
cent of the total farm quota pounds, excluding
pounds transferred in the fall.’’.
SEC. 2303. SALE, LEASE, OR TRANSFER OF FARM POUND-
AGE QUOTA.
(a) TRANSFERS AUTHORIZED UNDER CERTAIN CIR-
CUMSTANCES.—Subsection (a) of section 358b of the Ag-
ricultural Adjustment Act of 1938 (7 U.S.C. 1358b) is
amended—
(1) in paragraph (1)—
(A) by striking ‘‘(including any applicable
under marketings)’’ both places it appears;
(B) in subparagraph (A), by striking
‘‘undermarketings and’’; and
(C) by adding at the end the following new
sentences: ‘‘In the case of a fall transfer only,
Title II, Subtitle C
poundage quota from a farm may be leased to
another owner or operator of a farm within the
same county or to another owner or operator of
a farm in any other county within the State.
Fall transfers of quota pounds shall not affect
the farm quota history for the transferring or
receiving farm and shall not result in reducing
the farm poundage quota on the transferring
farm.’’;
(2) by striking paragraph (2) and inserting the
following new paragraph:
‘‘(2) TRANSFERS
TO
OTHER
SELF-OWNED
FARMS.—The owner or operator of a farm may
transfer all or any part of the farm poundage quota
for the farm to any other farm owned or controlled
by the owner or operator that is in the same county
or any other county within the same State and that
had a farm poundage quota for the preceding crop
year, if both the transferring and the receiving
farms were under the control of the owner or opera-
tor for at least 3 crop years prior to the crop year
in which the farm poundage quota is transferred.
Any farm poundage quota transferred under this
paragraph shall not result in any reduction in the
farm poundage quota for the transferring farm if
Title II, Subtitle C
sufficient acreage is planted on the receiving farm to
produce the quota pounds transferred.’’;
(3) in paragraph (3), by striking ‘‘(including
any applicable undermarketings)’’; and
(4) by adding at the end the following new
paragraph:
‘‘(4) TRANSFERS BY SALE IN STATES HAVING
QUOTAS OF 10,000 TONS OR MORE.—Subject to such
terms and conditions as the Secretary may prescribe,
the owner, or operator with permission of the owner,
of any farm for which a farm quota has been estab-
lished and which is located in a State having a quota
of 10,000 tons or more may sell poundage quota to
any other eligible owner or operator of a farm within
the same State. The Secretary shall ensure that no
more than 15 percent of the total poundage quota
within a county as of January 1, 1996, is sold and
transferred in 1996 under this paragraph and that
no more than 5 percent of the quota pounds remain-
ing in a county as of January 1 in each of the next
4 years are sold and transferred in any such year.
Notwithstanding any other provision of this para-
graph, no more than 30 percent of the total pound-
age quota within a county may be sold and trans-
ferred. Quota pounds sold and transferred under
Title II, Subtitle C
this paragraph may not be leased or sold from the
farm to which transferred to another farm owner or
operator within the same State for a period of 5
years following the original transfer to the farm.’’.
(b) CONDITIONS.—Subsection (b) of such section is
amended—
(1) in paragraph (1), by inserting before the pe-
riod at the end the following: ‘‘, except that no such
agreement shall be necessary in the event of fall
lease, if the operator had the lienholder’s agreement
for a previous spring cash lease’’; and
(2) by striking paragraph (3) and inserting the
following new paragraph:
‘‘(3) RECORD.—No transfer of the farm pound-
age quota shall be effective until a record thereof is
filed with the county committees of the counties
from which transferred and to which transferred and
the committees determine that the transfer complies
with this section.’’.
SEC. 2304. PENALTY FOR REENTRY OF EXPORTED PEANUT
PRODUCTS.
Section 358e(d)(6)(A) of the Agricultural Adjust-
ment Act of 1938 (7 U.S.C. 1359a(d)(6)(A)) is amended
by inserting ‘‘or peanut products manufactured from addi-
tional peanuts’’ after ‘‘any additional peanuts’’.
Title II, Subtitle C
SEC. 2305. PRICE SUPPORT PROGRAM FOR PEANUTS.
(a) SUPPORT RATES.—Subsection (a)(2) Section
108B of the Agricultural Act of 1949 (7 U.S.C. 1445c–
3) is amended—
(1) by striking ‘‘any increase’’ and inserting
‘‘any increase or decrease’’; and
(2) by striking ‘‘, except that’’ and all that fol-
lows through ‘‘preceding crop’’ and inserting the fol-
lowing: ‘‘In no event shall the national average quota
support rate be increased by more than 5 percent of
the national average quota support rate for the pre-
ceding crop. In no event shall the national average
quota support rate be decreased by more than 5 per-
cent of the national average quota support rate for
the preceding crop.’’.
(b) SPECIAL
RULE
REGARDING
NEW
MEXICO
POOLS.—Subsection (c)(2)(A) of such section is amended
by inserting after the first sentence the following new sen-
tence: ‘‘Peanuts physically produced outside the State of
New Mexico shall not be eligible for entry into or partici-
pation in the New Mexico pools even though the farm on
which the peanuts are produced is considered to be a New
Mexican farm for administrative purposes.’’.
(c) LOSSES
IN AREA QUOTA POOLS.—Subsection
(d)(2) of such section is amended—
Title II, Subtitle C
(1) by redesignating subparagraph (B) as sub-
paragraph (D);
(2) by inserting after subparagraph (A) the fol-
lowing new paragraphs:
‘‘(B) REDUCTION
OF
GAINS
OF
OTHER
PRODUCERS IN SAME POOL.—If use of the au-
thority provided in subparagraph (A) is not suf-
ficient to cover losses in an area quota pool, the
additional losses shall be offset by reducing the
gain of any producer in such pool by the
amount of pool gains attributed to the same
producer from the sale of additional peanuts for
domestic and export edible use.
‘‘(C) USE OF MARKETING ASSESSMENTS.—
If use of the authority provided in subpara-
graphs (A) and (B) is not sufficient to cover
losses in area quota pools, the Secretary shall
use funds collected under subsection (g) to off-
set such losses. At the end of each year, the
Secretary shall deposit in the Treasury those
funds collected under subsection (g) that the
Secretary determines are not required to cover
losses in area quota pools for that year.’’; and
(3) in subparagraph (D), as redesignated by
paragraph (1), by adding at the end the following
Title II, Subtitle C
new sentence: ‘‘This subparagraph shall apply only
to the extent that use of the authority provided in
subparagraphs (A), (B), and (C) is not sufficient to
cover losses in an area quota pool.’’.
(d) COMPLIANCE WITH QUALITY STANDARDS.—Sub-
section (f)(2) of such section is amended to read as fol-
lows:
‘‘(2) EXPORTS
AND
OTHER
PEANUTS.—The
Secretary shall require that all peanuts in the do-
mestic market, including peanuts imported into the
United States, meet all United States quality stand-
ards under Marketing Agreement No. 146 and that
importers of such peanuts fully comply with inspec-
tion, handling, storage, and processing requirements
implemented under Marketing Agreement No. 146.
The Secretary shall ensure that peanuts produced
for the export market meet quality, inspection, han-
dling, storage, and processing requirements under
Marketing Agreement No. 146.’’.
(e) ASSESSMENT RATES.—Subsection (g) of such
section is amended—
(1) in paragraph (1), by striking ‘‘1.15 per-
cent’’ the first place it appears and all that follows
through the period at the end of such paragraph and
inserting ‘‘and 1.2 percent for the 1996 through
Title II, Subtitle C
2002 crops, of the applicable support rate under this
subsection.’’;
(2) in paragraph (2)(A)(i)—
(A) by inserting ‘‘and’’ at the end of
subclause (II); and
(B) by striking subclauses (III) and (IV)
and inserting the following new subclause:
‘‘(III) in the case of each of the
1996 through 2002 crops, .6 percent
of the applicable national average sup-
port rate;’’; and
(3) in paragraph (2)(A)(ii)—
(A) by striking ‘‘and’’ at the end of
subclause (I);
(B) in subclause (II), by striking ‘‘through
1997 crops’’ and inserting ‘‘and 1995 crops’’;
and
(C) by adding at the end the following new
subclause:
‘‘(III) in the case of each of the
1996 through 2002 crops, .6 percent
of the applicable national average sup-
port rate; and’’.
(f) ASSESSMENT ON IMPORTS.—Subsection (g) of
such section is further amended—
Title II, Subtitle C
(1) by redesignating paragraphs (3), (4), (5),
and (6) as paragraphs (4), (5), (6), and (7), respec-
tively; and
(2) by inserting after paragraph (2) the follow-
ing new paragraph:
‘‘(3) IMPORTS.—Each importer of peanuts pro-
duced outside of the United States and imported
into the United States after the date of the enact-
ment of this paragraph shall remit to the Commod-
ity Credit Corporation a nonrefundable marketing
assessment in an amount equal to the product ob-
tained by multiplying the number of pounds of pea-
nuts imported by the importer by 1.2 percent of the
national average support rate for additional pea-
nuts.’’.
SEC. 2306. REFERENDUM REGARDING POUNDAGE QUOTAS.
Section 358–1(d) of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 13581(d)) is amended by striking para-
graph (1) and inserting the following new paragraph:
‘‘(1) IN
GENERAL.—Each calendar year, the
Secretary shall conduct a referendum of producers
engaged in the production of quota peanuts in the
calendar year in which the referendum is held to de-
termine whether the producers are in favor of or op-
posed to poundage quotas with respect to the crops
Title II, Subtitle C
of peanuts produced in the seven calendar years im-
mediately following the year in which the referen-
dum is held, except that, if as many as two-thirds
of the producers voting in any referendum vote in
favor of poundage quotas, no referendum shall be
held with respect to quotas for the next six years of
the period. In the case of the referendum required
in 1995, the Secretary shall conduct the referendum
as soon as practicable after the date of the enact-
ment of the Agricultural Reconciliation Act of 1995.
In the case of any referendum required in calendar
years 1996 through 2002, the Secretary shall con-
duct the referendum not later than December 15 of
the calendar year in which the referendum is re-
quired.’’.
SEC. 2307. REGULATIONS.
The Secretary of Agriculture shall issue such regula-
tions as are necessary to carry out this title and the
amendments made by this title. In issuing the regulations,
the Secretary—
(1) is encouraged to comply with subchapter II
of chapter 5 of title 5, United States Code;
(2) shall provide public notice through the Fed-
eral Register of any such proposed regulations; and
Title II, Subtitle D
(3) shall allow adequate time for written public
comment prior to the formulation and issuance of
any final regulations.
Subtitle D—Tobacco
SEC. 2401. ELIMINATION OF FEDERAL BUDGETARY OUT-
LAYS FOR TOBACCO PROGRAMS.
Section 106(g)(1) of the Agricultural Act of 1949 (7
U.S.C. 1445(g)(1)) is amended—
(1) by striking ‘‘1998’’ and inserting ‘‘2002’’;
and
(2) by inserting after ‘‘equal to’’ the following:
‘‘a pro rata share of the total amount of the costs
of other Department of Agriculture programs related
to tobacco production or processing that are not re-
quired to be covered by user fees or by contributions
or 
assessments 
under 
section 
106A(d)(1) 
or
106B(d)(1), but in no event less than’’.
SEC. 2402. ESTABLISHMENT OF FARM YIELD FOR FLUE-
CURED TOBACCO BASED ON INDIVIDUAL
FARM PRODUCTION HISTORY.
(a) METHOD OF DETERMINING FARM ACREAGE AL-
LOTMENTS.—Subsection (a) of section 317 of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1314c) is amend-
ed by striking paragraphs (2) through (8) and inserting
the following new paragraphs:
Title II, Subtitle D
‘‘(2) FARM ACREAGE ALLOTMENTS.—The term
‘farm acreage allotment’ for a tobacco farm, other
than a new tobacco farm, means the acreage allot-
ment determined by dividing the farm marketing
quota by the farm yield.
‘‘(3) FARM
YIELD.—The term ‘farm yield’
means the yield per acre for a farm determined ac-
cording to regulations issued by the Secretary and
which would be expected to result in a quality of to-
bacco acceptable to the tobacco trade.
‘‘(4) FARM MARKETING QUOTA.—
‘‘(A) IN GENERAL.—The term ‘farm mar-
keting quota’ for a farm for a marketing year
means a number that is equal to the number of
pounds of tobacco determined by multiplying—
‘‘(i) the farm marketing quota for the
farm for the previous marketing year
(prior 
to 
any 
adjustment 
for
undermarketing or overmarketing); by
‘‘(ii) the national factor.
‘‘(B) ADJUSTMENT.—The farm marketing
quota determined under subparagraph (A) for a
marketing 
year 
shall 
be 
increased 
for
undermarketing or decreased for overmarketing
by the number of pounds by which marketings
Title II, Subtitle D
of tobacco from the farm during the immediate
preceding marketing year (if marketing quotas
were in effect for that year under the program
established by this section) is less than or ex-
ceeds the farm marketing quota for such year.
Notwithstanding the preceding sentence, the
farm marketing quota for a marketing year
shall not be increased under this subparagraph
for undermarketing by an amount in excess of
the farm marketing quota determined for the
farm for the immediately preceding year prior
to any increase for undermarketing or decrease
for overmarketing. If due to excess marketing
in the preceding marketing year, the farm mar-
keting quota for the marketing year is reduced
to zero pounds without reflecting the entire re-
duction required, the additional reduction shall
be made for the subsequent marketing year or
years.
‘‘(5) NATIONAL FACTOR.—The term ‘national
factor’ for a marketing year means a number ob-
tained by dividing—
‘‘(A) the national marketing quota (less
the reserve provided for under subsection (e));
by
Title II, Subtitle D
‘‘(B) the sum of the farm marketing
quotas 
(prior 
to 
any 
adjustments 
for
undermarketing or overmarketing) for the im-
mediate preceding marketing year for all farms
for which marketing quotas for the kind of to-
bacco involved will be determined for such suc-
ceeding marketing year.’’.
(b) CONFORMING AMENDMENTS.—Such section is
further amended—
(1) in the first sentence of subsection (b), by
striking ‘‘and the national acreage allotment and na-
tional average yield goal for the 1965 crop of Flue-
cured tobacco,’’;
(2) in the first sentence of subsection (c), by
striking ‘‘and at the same time announce the na-
tional acreage allotment and national average yield
goal’’;
(3) in subsection (d)—
(A) in the sixth sentence, by striking ‘‘, na-
tional acreage allotment, and national average
yield goal’’;
(B) in the eighth sentence, by striking ‘‘,
national acreage allotment and national average
yield goal’’; and
Title II, Subtitle D
(C) in the ninth sentence, by striking ‘‘,
national acreage allotment, and national aver-
age goal are’’ and inserting ‘‘is’’;
(4) in subsection (e)—
(A) in the first sentence, by striking ‘‘No
farm acreage allotment or farm yield shall be
established’’ and inserting ‘‘A farm marketing
quota and farm yield shall not be established’’;
(B) in the second sentence, by striking
‘‘acreage allotment’’ both places it appears and
inserting ‘‘marketing quota’’;
(C) in the second sentence, by striking
‘‘acreage allotments’’ both places it appears and
inserting ‘‘marketing quotas’’; and
(D) in the last sentence, by striking ‘‘acre-
age 
allotment’’ 
and 
inserting 
‘‘marketing
quota’’; and
(5) in subsection (g)—
(A) in paragraph (1), by striking ‘‘para-
graph 
(a)(8)’’ 
and 
inserting 
‘‘subsection
(a)(4)’’; and
(B) in paragraph (3), by striking ‘‘sub-
section 
(a)(8)’’ 
and 
inserting 
‘‘subsection
(a)(4)’’.
Title II, Subtitle D
(c) FARM MARKETING QUOTA REDUCTIONS.—Sub-
section (f) of such section is amended to read as follows:
‘‘(f) CAUSES FOR FARM MARKETING QUOTA REDUC-
TION.—(1) When an acreage-poundage program is in ef-
fect for any kind of tobacco under this section, the farm
marketing quota next established for a farm shall be re-
duced by the amount of such kind of tobacco produced
on the farm—
‘‘(A) which was marketed as having been pro-
duced on a different farm;
‘‘(B) for which proof of disposition is not fur-
nished as required by the Secretary;
‘‘(C) on acreage equal to the difference between
the acreage reported by the farm operator or a duly
authorized representative and the determined acre-
age for the farm; and
‘‘(D) as to which any producer on the farm
filed, or aids, or acquiesces, in the filing of any false
report with respect to the production or marketing
of tobacco.
‘‘(2) If the Secretary, through the local committee,
find that no person connected with a farm caused, aided,
or acquiesced in any irregularity described in paragraph
(1), the next established farm marketing quota shall not
be reduced under this subsection.
Title II, Subtitle D
‘‘(3) The reduction required under this subsection
shall be in addition to any other adjustments made pursu-
ant to this section.
‘‘(4) In establishing farm marketing quotas for other
farms owned by the owner displaced by acquisition of the
owner’s land by any agency, as provided in section 378
of this Act, increases or decreases in such farm marketing
quotas as provided in this section shall be made on ac-
count of marketings below or in excess of the farm mar-
keting quotas for the farm acquired by the agency.
‘‘(5) Acreage allotments and farm marketing quotas
determined under this section may (except in the case of
kinds of tobacco not subject to section 316) be leased and
sold under the terms and conditions in section 316 of this
Act, except that any credit for undermarketing or charge
for overmarketing shall be attributed to the farm to which
transferred.’’.
(d) EFFECT OF AMENDMENTS ON CURRENT TO-
BACCO CROP.—Section 317 of the Agricultural Adjust-
ment Act of 1938 (7 U.S.C. 1314c), as in effect on the
day before the date of the enactment of this Act, shall
continue to apply with respect to the 1995 crop of Flue-
cured tobacco.
Title II, Subtitle D
SEC. 2403. REMOVAL OF FARM RECONSTITUTION EXCEP-
TION FOR BURLEY TOBACCO.
Section 379(a)(6) of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1379(a)(6)) is amended by striking ‘‘,
but this clause (6) shall not be applicable in the case of
burley tobacco’’.
SEC. 2404. REDUCTION IN PERCENTAGE THRESHOLD FOR
TRANSFER OF FLUE-CURED TOBACCO QUOTA
IN CASES OF DISASTER.
The second subsection (h) in section 316 of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C. 1314b) is
amended by striking ‘‘90 percent’’ in paragraph (1)(A)
and inserting ‘‘80 percent’’.
SEC. 2405. EXPANSION OF TYPES OF TOBACCO SUBJECT TO
NO NET COST ASSESSMENT.
(a) NO
NET
COST
TOBACCO
FUND.—Section
106A(d)(1)(A) of the Agricultural Act of 1949 (7 U.S.C.
1445–1(d)(1)(A)) is amended—
(1) in clause (ii), by inserting after ‘‘Burley
quota tobacco’’ the following: ‘‘and cigar-type quota
tobacco’’; and
(2) in clause (iii)—
(A) in the matter preceding the subclauses,
by striking ‘‘Flue-cured or Burley tobacco’’ and
inserting ‘‘each kind of tobacco for which price
Title II, Subtitle D
support is made available under this Act, and
each kind of like tobacco,’’; and
(B) by striking subclause (II) and insert-
ing the following new subclause:
‘‘(II) the sum of the amount of the
per pound producer contribution and pur-
chaser assessment (if any) for such kind of
tobacco payable under clauses (i) and (ii);
and’’.
(b) NO NET COST TOBACCO ACCOUNT.—Section
106B(d)(1) of the Agricultural Act of 1949 (7 U.S.C.
1445–2(d)(1)) is amended—
(1) in subparagraph (B), by inserting after
‘‘Burley quota tobacco’’ the following: ‘‘and cigar-
type quota tobacco’’; and
(2) in subparagraph (C), by striking ‘‘Flue-
cured and Burley tobacco’’ and inserting ‘‘each kind
of tobacco for which price support is made available
under this Act, and each kind of like tobacco,’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect 60 days after the date of the
enactment of this Act.
Title II, Subtitle D
SEC. 2406. REPEAL OF REPORTING REQUIREMENTS RELAT-
ING TO EXPORT OF TOBACCO.
Section 214 of the Tobacco Adjustment Act of 1983
(7 U.S.C. 509) is repealed.
SEC. 2407. REPEAL OF LIMITATION ON REDUCING NA-
TIONAL 
MARKETING 
QUOTA 
FOR 
FLUE-
CURED AND BURLEY TOBACCO.
(a) FLUE-CURED TOBACCO.—Section 317(a)(1) of
the Agricultural Adjustment Act of 1938 (7 U.S.C.
1314c(a)(1)) is amended by striking subparagraph (C).
(b) BURLEY TOBACCO.—Section 319(c)(3) of the Ag-
ricultural Adjustment Act of 1938 (7 U.S.C. 1314e(c)(3))
is amended by striking subparagraph (C).
SEC. 2408. APPLICATION OF CIVIL PENALTIES UNDER TO-
BACCO INSPECTION ACT.
Section 12 of the Tobacco Inspection Act (7 U.S.C.
511k) is amended—
(1) by inserting ‘‘(a) FINE
FOR
VIOLA-
TIONS.—’’ after ‘‘That any person’’; and
(2) by adding at the end the following new sub-
sections:
‘‘(b) JURISDICTION.—The district courts of the
United States are vested with jurisdiction specifically to
enforce, and to prevent and restrain any person from vio-
lating, any rule or regulation issued under this Act.
100
Title II, Subtitle D
‘‘(c) REFERRAL TO ATTORNEY GENERAL.—A civil
action authorized to be commenced under this section shall
be referred to the Attorney General for appropriate action,
except that the Secretary shall not be required to refer
to the Attorney General a violation of this Act, if the Sec-
retary believes that the administration and enforcement
of this Act would be adequately served by providing a suit-
able written notice or warning to the person who commit-
ted such violation or administrative action.
‘‘(d) CIVIL PENALTIES AND ORDERS.—
‘‘(1) CIVIL PENALTIES.—Any person who will-
fully violates any provision of this Act or any of the
regulations issued by the Secretary under this Act
may be assessed a civil penalty by the Secretary of
not less than $500 or more than $5,000 for each
such violation. Each violation shall be a separate of-
fense.
‘‘(2) CEASE AND DESIST ORDERS.—In addition
to, or in lieu of, a civil penalty under paragraph (1),
the Secretary may issue an order requiring a person
to cease and desist from continuing any such viola-
tion.
‘‘(3) NOTICE AND HEARING.—No penalty shall
be assessed or cease-and-desist order issued by the
Secretary under this subsection unless the person
101
Title II, Subtitle D
against whom the penalty is assessed or the order is
issued is given notice and opportunity for a hearing
before the Secretary with respect to such violation.
‘‘(4) FINALITY.—The order of the Secretary as-
sessing a penalty or imposing a cease-and-desist
order under this subsection shall be final and conclu-
sive unless the affected person files an appeal of the
Secretary’s order with the appropriate district court
of the United States, in accordance with subsection
(e).
‘‘(e) REVIEW BY DISTRICT COURT.—
‘‘(1) COMMENCEMENT OF ACTION.—Any person
who has been determined to be in violation of this
Act, or against whom a civil penalty has been as-
sessed or a cease-and-desist order issued under sub-
section (d), may obtain review of the penalty or
order—
‘‘(A) by filing, within the 30-day period be-
ginning on the date the penalty is assessed or
order issued, a notice of appeal in—
‘‘(i) the district court of the United
States for the district in which the person
resides or conducts business; or
‘‘(ii) the United States District Court
for the District of Columbia; and
102
Title II, Subtitle D
‘‘(B) by sending, within the same period, a
copy of such notice by certified mail to the Sec-
retary.
‘‘(2) 
RECORD.—The 
Secretary 
shall 
file
promptly in the appropriate court referred to in
paragraph (1), a certified copy of the record on
which the Secretary has determined that the person
had committed a violation.
‘‘(3) STANDARD OF REVIEW.—A finding of the
Secretary under this section shall be set aside only
if such finding is found to be unsupported by sub-
stantial evidence.
‘‘(f) FAILURE TO OBEY ORDERS.—Any person who
fails to obey a cease-and-desist order under this section
after such order has become final and unappealable, or
after the appropriate United States district court has en-
tered a final judgment in favor of the Secretary, shall be
subject to a civil penalty assessed by the Secretary, after
opportunity for hearing and for a judicial review under
the procedures specified in subsection (e), of not more
than $500 for each offense. Each day during which such
failure continues shall be considered as a separate viola-
tion of such order.
‘‘(g) FAILURE TO PAY PENALTIES.—If any person
fails to pay an assessment of a civil penalty under this
103
Title II, Subtitle D
section after it has become a final and unappealable order,
or after the appropriate United States district court has
entered final judgment in favor of the Secretary, the Sec-
retary shall refer the matter to the Attorney General for
recovery of the amount assessed in the district court of
the United States for the district in which the person re-
sides or conducts business. In such action, the validity and
appropriateness of the final order imposing the civil pen-
alty shall not be subject to review.
‘‘(h) ADDITIONAL REMEDIES.—The remedies pro-
vided in this section shall be in addition to, and not exclu-
sive of, other remedies that may be available.’’.
SEC. 2409. TRANSFERS OF QUOTA OR ALLOTMENT ACROSS
COUNTY LINES IN A STATE.
(a) TRANSFERS ALLOWED BY REFERENDUM.—
(1) FLUE-CURED TOBACCO.—Section 316(g) of
the Agricultural Adjustment Act of 1938 (7 U.S.C.
1314b(g)) is amended by adding at the end the fol-
lowing:
‘‘(3) Notwithstanding paragraph (1), the Secretary
may permit the sale of a Flue-cured tobacco allotment or
quota from one farm in a State to any other farm in the
State if a majority of active Flue-cured tobacco producers
within the State approve of such sales by a state-wide ref-
erendum to be conducted by the Secretary.’’.
104
Title II, Subtitle D
(2) OTHER TOBACCO.—Section 318(b) of such
Act (7 U.S.C. 1314d(b)) is amended in the proviso
by inserting after ‘‘same State’’ the following: ‘‘and,
in the case of other kinds of tobacco, any such
transfer may be made to a farm in another county
in the same State if transfers of such type are ap-
proved by a majority of the active producers of that
kind of tobacco in the State who vote in a referen-
dum held on the subject’’.
(3) BURLEY TOBACCO.—Section 319(l) of such
Act (7 U.S.C. 1314e(l)) is amended by striking the
last sentence.
(b) SAME GROWER IN CONTIGUOUS COUNTIES.—
Section 379(b) of such Act (7 U.S.C. 1379(b)) is amended
by striking ‘‘Burley tobacco poundage quota’’ and insert-
ing ‘‘tobacco quota or allotment’’.
SEC. 
2410. 
CALCULATION 
OF 
NATIONAL 
MARKETING
QUOTA.
(a) 
FLUE-CURED
TOBACCO.—Section
317(a)(1)(B)(ii) of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1314c(a)(1)(B)(ii)) is amended by insert-
ing before the semicolon the following: ‘‘, but excluding
any exports of unmanufactured tobacco counted under
clause (i)’’.
105
Title II, Subtitle D
(b) BURLEY TOBACCO.—Section 319(c)(3)(A)(ii) of
such Act (7 U.S.C. 1314e(l)) is amended by inserting be-
fore the semicolon the following: ‘‘, but excluding any ex-
ports of unmanufactured tobacco counted under clause
(i)’’.
(c) APPLICATION OF AMENDMENTS.—The amend-
ments made by this section shall apply with respect to the
1996 and subsequent crops of Flue-cured and Burley to-
bacco.
SEC. 2411. CLARIFICATION OF AUTHORITY TO ACCESS
CIVIL MONEY PENALTIES.
Section 314 of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1314) is amended—
(1) by redesignating subsection (c) as sub-
section (d); and
(2) by inserting after subsection (b) the follow-
ing new subsection:
‘‘(c) The failure by a person to comply with regula-
tions issued by the Secretary governing the marketing,
disposition, or handling of tobacco under this part shall
subject the person to a penalty at the rate provided in
subsection (a).’’.
106
Title II, Subtitle D
SEC. 2412. LEASE AND TRANSFER OF FARM MARKETING
QUOTAS FOR BURLEY TOBACCO.
Section 319(g) of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1314e(g)) is amended—
(1) in paragraph (1), by striking ‘‘July 1’’ each
place it appears and inserting ‘‘September 1’’; and
(2) in paragraph (3)—
(A) by striking ‘‘within the three imme-
diately preceding crop years’’ in the first sen-
tence and inserting ‘‘during the current crop
year or either of the two immediately preceding
crop years’’; and
(B) by striking ‘‘July 1’’ in the second sen-
tence and inserting ‘‘September 1’’.
SEC. 2413. LIMITATION ON TRANSFER OF ACREAGE ALLOT-
MENTS OF OTHER TOBACCO.
Section 318(g) of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1314d(g)) is amended by striking ‘‘ten
acres’’ and inserting ‘‘20 acres’’.
SEC. 2414. GOOD FAITH RELIANCE ON ACTIONS OR ADVICE
OF DEPARTMENT REPRESENTATIVES.
The Agricultural Adjustment Act of 1938 is amended
by inserting after section 314A (7 U.S.C. 1314–1) the fol-
lowing new section:
107
Title II, Subtitle D
‘‘SEC. 315. GOOD FAITH RELIANCE ON ACTIONS OR ADVICE
OF DEPARTMENT REPRESENTATIVES.
‘‘Notwithstanding any other provision of law, the per-
formance rendered in good faith by a person in good faith
in reliance upon action or advice of an authorized rep-
resentative of the Secretary may be accepted as meeting
the requirements of this part.’’.
SEC. 2415. UNIFORM FORFEITURE DATES FOR FLUE-CURED
AND BURLEY TOBACCO.
(a) SALE
OR FORFEITURE
OF FLUE-CURED TO-
BACCO ALLOTMENT OR QUOTA.—The first subsection (h)
of section 316 of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1314b) is amended—
(1) in paragraph (1), by striking ‘‘before the
expiration of the eighteen month period beginning on
July 1 of the year in which such crop is planted’’
and inserting ‘‘before February 15 of the year after
the end of the marketing year for the planted crop’’;
and
(2) in paragraph (2), by striking ‘‘July 1’’ and
inserting ‘‘February 15’’.
(b) MANDATORY SALE OF FLUE-CURED TOBACCO
ALLOTMENT OR QUOTA.—Section 316A of such Act (7
U.S.C. 1314b–1) is amended—
108
Title II, Subtitle D
(1) in subsection (a), by striking ‘‘December 1
of the year’’ and inserting ‘‘February 15 of the
year’’; and
(2) in subsection (b), by striking ‘‘July 1’’ and
inserting ‘‘February 15’’.
(c) MANDATORY SALE OF BURLEY TOBACCO ALLOT-
MENT OR QUOTA.—Section 316B of such Act (7 U.S.C.
1314b–2) is amended—
(1) in subsection (a), by striking ‘‘December 1
of the year’’ and inserting ‘‘February 15 of the
year’’; and
(2) in subsection (c)(1), by striking ‘‘before the
expiration of the eighteen month period beginning on
July 1 of the year in which such crop is planted’’
and inserting ‘‘before February 15 of the year after
the end of the marketing year for the planted crop’’.
SEC. 2416. SALE OF BURLEY AND FLUE-CURED TOBACCO
MARKETING QUOTAS FOR A FARM BY RE-
CENT PURCHASERS.
The Agricultural Adjustment Act of 1938 is amended
by inserting after section 316B (7 U.S.C. 1314b–2) the
following new section:
109
Title II, Subtitle E
‘‘SEC. 316C. AUTHORITY FOR RECENT PURCHASER OF A
FARM TO SELL BURLEY TOBACCO OR FLUE-
CURED TOBACCO MARKETING QUOTAS FOR
THE FARM.
‘‘A new owner of a farm that has purchase history
of Burley tobacco or Flue-cured tobacco may sell the pur-
chased tobacco quota notwithstanding any limitations on
such a sale contained in this part if the sale is completed
not later than one year after the purchase date of the
farm.’’.
Subtitle E—Planting Flexibility
SEC. 2501. DEFINITIONS.
Section 502 of the Agricultural Act of 1949 (7 U.S.C.
1462) is amended by adding at the end the following:
‘‘(4) ACREAGE
CONSERVATION
RESERVE, RE-
DUCED ACREAGE.—The terms ‘acreage conservation
reserve’ and ‘reduced acreage’ mean the number of
acres on a farm to be devoted to conservation uses
on the farm, which must be protected from weeds
and erosion. Such number shall be determined by
multiplying the specific crop acreage base for a crop
on the farm by the percentage acreage reduction re-
quired by the Secretary.
‘‘(5) PERMITTED
ACREAGE.—The term ‘per-
mitted acreage’ means the crop acreage base for a
program crop for the farm less the acreage conserva-
110
Title II, Subtitle E
tion reserve. If an acreage reduction program is not
in effect for a program crop, for purposes of admin-
istering this title, the permitted acreage of such a
crop on a farm shall be equal to the crop acreage
base for the crop for the farm.
‘‘(6) PAYMENT ACREAGE.—The term ‘payment
acreage’ means the lesser of—
‘‘(A) the number of acres planted and con-
sidered planted to an eligible crop, as deter-
mined in sections 503(c) and 504(b)(1), for
harvest within the permitted acreage; or
‘‘(B) 77 percent of the crop acreage base
for the crop for the farm less the acreage con-
servation reserve.
‘‘(7) RESOURCE-CONSERVING CROP.—The term
‘resource-conserving crop’ means legumes, legume-
grass mixtures, legume-small grain mixtures, leg-
ume-grass-small grain mixtures, and experimental
and industrial crops, crops planted for special con-
servation practices, biomass production, intensive ro-
tational grazing, and non-legume crops, as deter-
mined by the Secretary, to satisfy program objec-
tives.
‘‘(8) 
RESOURCE-CONSERVING
CROP
ROTA-
TION.—The term ‘resource-conserving crop rotation’
111
Title II, Subtitle E
means a crop rotation that includes at least one re-
source-conserving crop and that reduces erosion,
maintains or improves soil fertility and tilth, inter-
rupts pest cycles, or conserves water.
‘‘(9) FARMING OPERATIONS AND PRACTICES.—
The term ‘farming operations and practices’ means
practices which include the integration of crops and
crop-plant variety selection, rotation practices, till-
age systems, soil conserving and soil building prac-
tices, nutrient management strategies, biological
control and integrated pest management strategies,
livestock production and management systems, ani-
mal waste management systems, water and energy
conservation measures, and health and safety consid-
erations.
‘‘(10) 
INTEGRATED
FARM
MANAGEMENT
PLAN.—The term ‘integrated farm management
plan’ means a comprehensive, multiyear, site-specific
plan that meets the requirements of section 1451 of
the Food, Agriculture, Conservation, and Trade Act
of 1990 (7 U.S.C. 5822).
‘‘(11) GRASS.—The term ‘grass’ means any pe-
rennial grasses commonly used for haying or graz-
ing.
112
Title II, Subtitle E
‘‘(12) LEGUME.—The term ‘legume’ means any
forage legumes (such as alfalfa or clover) or any leg-
ume grown for use as a forage or green manure, but
not including any bean crop from which the seeds
are harvested.
‘‘(13) SMALL GRAIN.—The term ‘small grain’
does not include malting barley or wheat, except for
wheat interplanted with other small grain crops for
nonhuman consumption.’’.
SEC. 2502. CROP AND TOTAL ACREAGE BASES.
Section 503 of the Agricultural Act of 1949 (7 U.S.C.
1463) is amended—
(1) in the section heading, by inserting ‘‘AND
TOTAL’’ after ‘‘CROP’’;
(2) at the end of subsection (a), by adding the
following new paragraph:
‘‘(4) TOTAL ACREAGE BASE.—The total acreage
base for a farm shall equal the sum of the crop acre-
age bases established for program crops on the farm
that are enrolled in the acreage reduction programs
established by the Secretary.’’;
(3) in the heading for subsection (b) by adding
‘‘OF CROP ACREAGE BASES’’ after ‘‘CALCULATION’’;
(4) in subsection (b)(2)—
(A) by striking ‘‘(A) IN GENERAL’’;
113
Title II, Subtitle E
(B) by striking ‘‘except as provided in sub-
paragraph (B),’’; and
(C) by striking subparagraph (B); and
(5) in subsection (c)(1), by striking ‘‘reduced
acreage’’ and inserting ‘‘acreage conservation re-
serve’’.
SEC. 2503. PLANTING FLEXIBILITY.
(a) SPECIFIED COMMODITIES.—Subsection (b) of
section 504 of the Agricultural Act of 1949 (7 U.S.C.
1464) is amended—
(1) in paragraph (1)—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (D);
(B) by redesignating subparagraph (E) as
subparagraph (F); and
(C) by inserting the following new subpara-
graph after subparagraph (D):
‘‘(E) any cover crop (including mainte-
nance of native cover) and summer fallow
which, as determined by the Secretary, will pro-
tect the land from weeds and erosion; and’’;
(2) by striking paragraph (2) and inserting the
following new paragraph:
‘‘(2) LIMITATIONS ON CROPS.—
114
Title II, Subtitle E
‘‘(A) IN GENERAL.—For purposes of this
section, the Secretary may restrict the planting
on a crop acreage base of any crop specified in
paragraph (1).
‘‘(B) EFFECT
OF
ACREAGE
REDUCTION
PROGRAM.—If an acreage reduction program is
in effect for any specific program crop, the Sec-
retary may limit the plantings of the specific
program crop for which there is an acreage re-
duction program in effect to no more than the
sum of—
‘‘(i) the permitted acreage for the spe-
cific program crop for which there is an
acreage reduction program in effect; plus
‘‘(ii) 23 percent of other crop acreage
bases which are included in the total acre-
age base for a farm.
‘‘(C) MINIMUM PLANTING.—The Secretary
may require that, as a condition for eligibility
for loans, deficiency payments and any other
program benefits authorized by this Act, a min-
imum percentage not to exceed 50 percent of a
specific permitted acreage, be planted to the
specific program crop.’’; and
115
Title II, Subtitle E
(3) in paragraph (3) by striking ‘‘make a deter-
mination in each crop year of’’ and inserting ‘‘deter-
mine’’.
(b) LIMITATION ON PLANTINGS.—Subsection (c) of
such section is amended by striking paragraphs (1) and
(2) and inserting the following:
‘‘The quantity of the total acreage base that may be
planted to program crops enrolled in an acreage reduction
program shall not exceed 100 percent of the total acreage
base, less the acreage conservation reserve for the farm.’’.
(c) PLANTINGS IN EXCESS OF PERMITTED ACRE-
AGE.—Subsection (d) of such section is amended to read
as follows:
‘‘(d) PLANTINGS IN EXCESS OF PERMITTED ACRE-
AGE.—Notwithstanding any other provision of this Act,
except as provided in section 504(b)(2)(B), producers of
a program crop who are participating in the acreage re-
duction program for that crop shall be allowed to plant
that program crop in a quantity that exceeds the per-
mitted acreage for that crop without losing their eligibility
for loans or payments with respect to that crop if—
‘‘(1) the acreage planted to that program crop
on the farm in excess of the permitted acreage for
that crop does not exceed the permitted acreage of
other program crops on the farm; and
116
Title II, Subtitle E
‘‘(2) the producer agrees to a reduction in per-
mitted acreage for the other program crops produced
on 
the 
farm 
by 
a 
quantity 
equal 
to 
the
overplanting.’’.
(d) LOAN ELIGIBILITY.—Subsection (e) of such sec-
tion is amended to read as follows:
‘‘(e) LOAN ELIGIBILITY.—Producers of a specific
program crop (referred to in this subsection as the ‘origi-
nal program crop’) who plant for harvest on the crop acre-
age base established for such original program crop an-
other program crop in accordance with this section and
who are participants in the program established for such
other program crop shall be eligible to receive loans or loan
deficiency payments for such other program crop on the
same terms and conditions as are provided to participants
in a acreage reduction program established for such other
program crop if the producers—
‘‘(1) plant such other program crop in an
amount that does not exceed 100 percent of the per-
mitted acreage established for the original program
crop; and
‘‘(2) agree to a reduction in the permitted acre-
age for the original program crop for the particular
crop year.’’.
117
Title II, Subtitle E
SEC. 2504. FARM PROGRAM PAYMENT YIELDS.
Section 505 of the Agricultural Act of 1949 (7 U.S.C.
1465) is amended to read as follows:
‘‘SEC. 505. FARM PROGRAM PAYMENT YIELDS.
‘‘(a) ESTABLISHMENT.—The Secretary shall provide
for the establishment of a farm program payment yield
for each farm for each program crop for each crop year
in accordance with subsection (b) or (c).
‘‘(b) FARM PROGRAM PAYMENT YIELDS BASED ON
1995 CROP YEAR.—
‘‘(1) IN GENERAL.—If the Secretary determines
that farm program payment yields shall be estab-
lished in accordance with this subsection, except as
provided in paragraph (2), the farm program pay-
ment yield for each of the 1996 through 2002 crop
years shall be the farm program payment yield for
the 1995 crop year for the farm.
‘‘(2) ADDITIONAL
YIELD
PAYMENTS.—In the
case of each of the 1991 through 2002 crop years
for a commodity, if the farm program payment yield
for a farm is reduced more than 10 percent below
the farm program payment yield for the 1985 crop
year, the Secretary shall make available to producers
established price payments for the commodity in
such amount as the Secretary determines is nec-
essary to provide the same total return to producers
118
Title II, Subtitle E
as if the farm program payment yield had not been
reduced more than 10 percent below the farm pro-
gram payment yield for the 1985 crop year. The
payments shall be made available not later than the
time final deficiency payments are made.
‘‘(3) NO YIELD AVAILABLE.—If no farm pro-
gram payment yield was established for the farm for
1995 crop, the farm program payment yield shall be
established on the basis of the average farm pro-
gram payment yield for the crop years for similar
farms in the area.
‘‘(4) NATIONAL, STATE, OR COUNTY YIELDS.—
If the Secretary determines the action is necessary,
the Secretary may establish national, State, or coun-
ty program payment yields on the basis of—
‘‘(A) historical yields, as adjusted by the
Secretary to correct for abnormal factors affect-
ing the yields in the historical period; or
‘‘(B) the Secretary’s estimate of actual
yields for the crop year involved if historical
yield data is not available.
‘‘(5) BALANCING YIELDS.—If national, State,
or county program payment yields are established,
the farm program payment yields shall balance to
119
Title II, Subtitle E
the national, State, or county program payment
yields.
‘‘(c) DETERMINATION OF YIELDS.—
‘‘(1) ACTUAL
YIELDS.—With respect to the
1996 and subsequent crop years, the Secretary
may—
‘‘(A) establish the farm program payment
yield as provided in subsection (a); or
‘‘(B) establish a farm program payment
yield for any program crop for any farm on the
basis of the average of the yield per harvested
acre for the crop for the farm for each of the
5 crop years immediately preceding the crop
year, excluding the crop year with the highest
yield per harvested acre, the crop year with the
lowest yield per harvested acre, and any crop
year in which such crop was not planted on the
farm.
‘‘(2) PRIOR YIELDS.—For purposes of the pre-
ceding sentence, the farm program payment yield for
the 1996 crop year and the actual yield per har-
vested acre with respect to the 1997 and subsequent
crop years shall be used in determining farm pro-
gram payment yields.
120
Title II, Subtitle E
‘‘(3) REDUCTION
LIMITATION.—Notwithstand-
ing any other provision of this subsection, for pur-
poses of establishing a farm program payment yield
for any program crop for any farm for the 1991 and
subsequent crop years, the farm program payment
yield for the 1986 crop year may not be reduced
more than 10 percent below the farm program pay-
ment yield for the farm for the 1985 crop year.
‘‘(4) ADJUSTMENT
OF
YIELDS.—The county
committee, in accordance with regulations prescribed
by the Secretary, may adjust any farm program pay-
ment yield for any program crop for any farm if the
farm program payment yield for the crop on the
farm does not accurately reflect the productive po-
tential of the farm.
‘‘(d) ASSIGNMENT OF YIELDS.—In the case of any
farm for which the actual yield per harvested acre for any
program crop referred to in subsection (c) for any crop
year is not available, the county committee may assign the
farm a yield for the crop for the crop year on the basis
of actual yields for the crop for the crop year on similar
farms in the area.
‘‘(e) ACTUAL YIELD DATA.—
‘‘(1) PROVISION.—The Secretary shall, under
such terms and conditions as the Secretary may pre-
121
Title II, Subtitle F
scribe, allow producers to provide to county commit-
tees data with respect to the actual yield for each
farm for each program crop.
‘‘(2) 
MAINTENANCE.—The 
Secretary 
shall
maintain the data for at least 5 crop years after re-
ceipt in a manner that will permit the data to be
used, if necessary, in the administration of the com-
modity programs.’’.
SEC. 2505. APPLICATION OF PROVISIONS.
Section 509 of the Agricultural Act of 1949 (7 U.S.C.
1469) is amended to read as follows:
‘‘SEC. 509. APPLICATION OF TITLE.
‘‘Except as provided in section 406, this title shall
apply only with respect to the 1996 through 2002 crops.’’.
Subtitle F—Miscellaneous
Provisions
SEC. 2601. LIMITATIONS ON AMOUNT OF DEFICIENCY PAY-
MENTS AND LAND DIVERSION PAYMENTS.
Section 1001(1)(A) of the Food Security Act of 1985
(7 U.S.C. 1308(1)(A)) is amended by striking ‘‘$50,000’’
and inserting ‘‘$47,000’’.
SEC. 2602. SENSE OF CONGRESS REGARDING CERTAIN CA-
NADIAN TRADE PRACTICES.
(a) FINDINGS.—The Congress finds the following:
122
Title III
(1) On October 15, 1993, in response to a re-
quest from the National Potato Council, the Foreign
Agricultural Service of the Department of Agri-
culture listed several Canadian nontariff barriers
that violate the national treatment principle of the
General Agreement on Tariffs and Trade, including
the prohibition on bulk shipments, container size
limitations on processed products, and prohibitions
on consignment sales.
(2) Current Government-to-Government and di-
rect grower-to-grower discussions with Canada have
failed to result in changes in Canadian trade prac-
tices.
(b) SENSE OF CONGRESS.—It is the sense of the
Congress that the Secretary of Agriculture and the United
States Trade Representative should intensify efforts to re-
solve the Canadian potato trade concerns and begin to
consider formal action under the dispute resolution proce-
dures of the North American Free Trade Agreement or
the General Agreement on Tariffs and Trade.
TITLE III—COMMERCE
SEC. 3101. SPECTRUM AUCTIONS.
(a) EXTENSION AND EXPANSION OF AUCTION AU-
THORITY.—
123
Title III
(1) AMENDMENTS.—Section 309(j) of the Com-
munications Act of 1934 (47 U.S.C. 309(j)) is
amended—
(A) by striking paragraphs (1) and (2) and
inserting in lieu thereof the following:
‘‘(1) GENERAL AUTHORITY.—If, consistent with
the obligations described in paragraph (6)(E), mutu-
ally exclusive applications are accepted for any ini-
tial license or construction permit which will involve
an exclusive use of the electromagnetic spectrum,
then the Commission shall grant such license or per-
mit to a qualified applicant through a system of
competitive bidding that meets the requirements of
this subsection.
‘‘(2) EXEMPTIONS.—The competitive bidding
authority granted by this subsection shall not apply
to licenses or construction permits issued by the
Commission—
‘‘(A) that, as the result of the Commission
carrying out the obligations described in para-
graph (6)(E), are not mutually exclusive;
‘‘(B) for public safety radio services, in-
cluding non-Government uses that protect the
safety of life, health, and property and that are
124
Title III
not made commercially available to the public;
or
‘‘(C) for initial licenses or construction
permits for new terrestrial digital television
services assigned by the Commission to existing
terrestrial broadcast licensees to replace their
current television licenses.’’; and
(B) by striking ‘‘1998’’ in paragraph (11)
and inserting ‘‘2002’’.
(2) CONFORMING AMENDMENT.—Subsection (i)
of section 309 of such Act is repealed.
(3) EFFECTIVE DATE.—The amendment made
by paragraph (1)(A) shall not apply with respect to
any license or permit for which the Federal Commu-
nications Commission has accepted mutually exclu-
sive applications on or before the date of enactment
of this Act.
(b) COMMISSION OBLIGATION TO MAKE ADDITIONAL
SPECTRUM AVAILABLE BY AUCTION.—
(1) IN
GENERAL.—The Federal Communica-
tions Commission shall complete all actions nec-
essary to permit the assignment, by September 30,
2002, by competitive bidding pursuant to section
309(j) of the Communications Act of 1934 (47
125
Title III
U.S.C. 309(j)) of licenses for the use of bands of
frequencies that—
(A) individually span not less than 25
megahertz, unless a combination of smaller
bands can, notwithstanding the provisions of
paragraph (7) of such section, reasonably be ex-
pected to produce greater receipts;
(B) in the aggregate span not less than
100 megahertz;
(C) are located below 3 gigahertz; and
(D) have not, as of the date of enactment
of this Act—
(i) been designated by Commission
regulation for assignment pursuant to such
section; or
(ii) been identified by the Secretary of
Commerce pursuant to section 113 of the
National Telecommunications and Infor-
mation Administration Organization Act.
The Commission shall conduct the competitive
bidding for not less than one-half of such aggre-
gate spectrum by September 30, 2001.
(2) CRITERIA FOR REASSIGNMENT.—In making
available bands of frequencies for competitive bid-
126
Title III
ding pursuant to paragraph (1), the Commission
shall—
(A) seek to promote the most efficient use
of the spectrum;
(B) take into account the cost to incum-
bent licensees of relocating existing uses to
other bands of frequencies or other means of
communication;
(C) take into account the needs of public
safety radio services; and
(D) comply with the requirements of inter-
national agreements concerning spectrum allo-
cations.
(3) NOTIFICATION TO NTIA.—The Commission
shall notify the Secretary of Commerce if—
(A) the Commission is not able to provide
for the effective relocation of incumbent licens-
ees to bands of frequencies that are available to
the Commission for assignment; and
(B) the Commission has identified bands
of frequencies that are—
(i) suitable for the relocation of such
licensees; and
(ii) allocated for Federal Government
use, but that could be reallocated pursuant
127
Title III
to part B of the National Telecommuni-
cations and Information Administration
Organization Act (as amended by this
Act).
(c) IDENTIFICATION AND REALLOCATION OF FRE-
QUENCIES.—The National Telecommunications and Infor-
mation Administration Organization Act (47 U.S.C. 901
et seq.) is amended—
(1) in section 113, by adding at the end the fol-
lowing new subsection:
‘‘(f) ADDITIONAL REALLOCATION REPORT.—If the
Secretary receives a notice from the Commission pursuant
to section 3001(b)(3) of the Seven-Year Balanced Budget
Reconciliation Act of 1995, the Secretary shall prepare
and submit to the President and the Congress a report
recommending for reallocation for use other than by Fed-
eral Government stations under section 305 of the 1934
Act (47 U.S.C. 305), bands of frequencies that are suit-
able for the uses identified in the Commission’s notice.’’;
(2) in section 114(a)(1), by striking ‘‘(a) or
(d)(1)’’ and inserting ‘‘(a), (d)(1), or (f)’’.
(d) COMPLETION OF C-BLOCK PCS AUCTION.—The
Federal Communications Commission shall commence the
Broadband Personal Communications Services C-Block
auction described in the Commission’s Sixth Report and
128
Title III
Order in DP Docket 93–253 (FCC 93–510, released July
18, 1995) not later than December 4, 1995. The Commis-
sion’s competitive bidding rules governing such auction,
as set forth in such Sixth Report and Order, are hereby
ratified and adopted as a matter of Federal law.
(e) MODIFICATION OF AUCTION POLICY TO PRE-
SERVE AUCTION VALUE OF SPECTRUM.—The voluntary
negotiation period for relocating fixed microwave licensees
to frequency bands other than those allocated for licensed
emerging technology services (including licensed personal
communications services), established by the Commis-
sion’s Third Report and Order in ET Docket No. 92–9,
shall expire one year after the date of acceptance by the
Commission of applications for such licensed emerging
technology services. The mandatory negotiation period for
relocating fixed microwave licensees to frequency bands
other than those allocated for licensed emerging tech-
nology services (including licensed personal communica-
tions services), established in such Third Report and
Order, shall expire two years after the date of acceptance
by the Commission of applications for such licensed
emerging technology services.
(f) 
IDENTIFICATION
AND
REALLOCATION
OF
AUCTIONABLE
FREQUENCIES.—The 
National 
Tele-
129
Title III
communications and Information Administration Organi-
zation Act (47 U.S.C. 901 et seq.) is amended—
(1) in section 113(b)—
(A) by striking the heading of paragraph
(1) and inserting ‘‘INITIAL REALLOCATION RE-
PORT’’;
(B) by inserting ‘‘in the first report re-
quired by subsection (a)’’ after ‘‘recommend for
reallocation’’ in paragraph (1);
(C) by inserting ‘‘or (3)’’ after ‘‘paragraph
(1)’’ each place it appears in paragraph (2);
and
(D) by inserting after paragraph (2) the
following new paragraph:
‘‘(3) SECOND REALLOCATION REPORT.—In ac-
cordance with the provisions of this section, the Sec-
retary shall recommend for reallocation in the sec-
ond report required by subsection (a), for use other
than by Federal Government stations under section
305 of the 1934 Act (47 U.S.C. 305), a single fre-
quency band that spans not less than an additional
20 megahertz, that is located below 3 gigahertz, and
that meets the criteria specified in paragraphs (1)
through (5) of subsection (a).’’; and
(2) in section 115—
130
Title III
(A) in subsection (b), by striking ‘‘the re-
port required by section 113(a)’’ and inserting
‘‘the initial reallocation report required by sec-
tion 113(a)’’; and
(B) by adding at the end the following new
subsection:
‘‘(c) ALLOCATION
AND
ASSIGNMENT
OF
FRE-
QUENCIES IDENTIFIED IN THE SECOND REALLOCATION
REPORT.—With respect to the frequencies made available
for reallocation pursuant to section 113(b)(3), the Com-
mission shall, not later than 1 year after receipt of the
second reallocation report required by such section, pre-
pare, submit to the President and the Congress, and im-
plement, a plan for the allocation and assignment under
the 1934 Act of such frequencies. Such plan shall propose
the immediate allocation and assignment of all such fre-
quencies in accordance with section 309(j).’’.
SEC. 3102. FEDERAL COMMUNICATIONS COMMISSION FEE
COLLECTIONS
(a) APPLICATION FEES.—
(1) ADJUSTMENT OF APPLICATION FEE SCHED-
ULE.—Section 8(b) of the Communications Act of
1934 (47 U.S.C. 158(b)) is amended to read as fol-
lows:
131
Title III
‘‘(b)(1) For fiscal year 1996 and each fiscal year
thereafter, the Commission shall, by regulation, modify
the application fees by proportionate increases or de-
creases so as to result in estimated total collections for
the fiscal year equal to—
‘‘(A) $40,000,000; plus
‘‘(B) an additional amount, specified in an ap-
propriation Act for the Commission for that fiscal
year to be collected and credited to such appropria-
tion, not to exceed the amount by which the nec-
essary expenses for the costs described in paragraph
(5) exceeds $40,000,000.
‘‘(2) In making adjustments pursuant to this para-
graph the Commission may round such fees to the nearest
$5.00 in the case of fees under $100, or to the nearest
$20 in the case of fees of $100 or more. The Commission
shall transmit to the Congress notification of any adjust-
ment made pursuant to this paragraph immediately upon
the adoption of such adjustment.
‘‘(3) The Commission is authorized to continue to col-
lect fees at the prior year’s rate until the effective date
of fee adjustments or amendments made pursuant to para-
graphs (1) and (4).
‘‘(4) The Commission shall, by regulation, add, de-
lete, or reclassify services, categories, applications, or
132
Title III
other filings subject to application fees to reflect additions,
deletions, or changes in the nature of its services or au-
thorization of service processes as a consequence of Com-
mission rulemaking proceedings or changes in law.
‘‘(5) Any modified fees established under paragraph
(4) shall be derived by determining the full-time equivalent
number of employees performing application activities, ad-
justed to take into account other expenses that are reason-
ably related to the cost of processing the application or
filing, including all executive and legal costs incurred by
the Commission in the discharge of these functions, and
other factors that the Commission determines are nec-
essary in the public interest. The Commission shall—
‘‘(A) transmit to the Congress notification of
any proposed modification made pursuant to this
paragraph immediately upon adoption of such pro-
posal; and
‘‘(B) transmit to the Congress notification of
any modification made pursuant to this paragraph
immediately upon adoption of such modification.
‘‘(6) Increases or decreases in application fees made
pursuant to this subsection shall not be subject to judicial
review.’’.
133
Title III
(2) TREATMENT
OF
ADDITIONAL
COLLEC-
TIONS.—Section 8(e) of such Act is amended to read
as follows:
‘‘(e) Of the moneys received from fees authorized
under this section—
‘‘(1) $40,000,000 shall be deposited in the gen-
eral fund of the Treasury to reimburse the United
States for amounts appropriated for use by the
Commission in carrying out its functions under this
Act; and
‘‘(2) the remainder shall be deposited as an off-
setting collection in, and credited to, the account
providing appropriations to carry out the functions
of the Commission.’’.
(3) SCHEDULE
OF
APPLICATION
FEES
FOR
PCS.—The schedule of application fees in section
8(g) of such Act is amended by adding, at the end
of the portion under the heading ‘‘COMMON CARRIER
SERVICES’’, the following new item:
‘‘23.
Personal communications services
‘‘a. Initial or new application .....................................................
230
‘‘b. Amendment to pending application .....................................
‘‘c. Application for assignment or transfer of control ................
230
‘‘d. Application for renewal of license ........................................
‘‘e. Request for special temporary authority ..............................
200
‘‘f. Notification of completion of construction ...........................
‘‘g. Request to combine service areas .........................................
50’’.
(4) VANITY CALL SIGNS.—
(A) LIFETIME LICENSE FEES.—
134
Title III
(i) AMENDMENT.—The schedule of
application fees in section 8(g) of such Act
is further amended by adding, at the end
of the portion under the heading ‘‘PRIVATE
RADIO SERVICES’’, the following new item:
‘‘11.
Amateur vanity call signs ..................................................... 150.00’’.
(ii) TREATMENT OF RECEIPTS.—Mon-
eys received from fees established under
the amendment made by this subsection
shall be deposited as an offsetting collec-
tion in, and credited to, the account pro-
viding appropriations to carry out the
functions of the Commission.
(B) TERMINATION
OF
ANNUAL
REGU-
LATORY FEES.—The schedule of regulatory fees
in section 9(g) of such Act (47 U.S.C. 159(g))
is amended by striking the following item from
the fees applicable to the Private Radio Bureau:
‘‘Amateur vanity call-signs ........................................................................
7’’.
(b) REGULATORY FEES.—
(1) EXECUTIVE
AND
LEGAL
COSTS.—Section
9(a)(1) of the Communications Act of 1934 (47
U.S.C. 159(a)(1)) is amended by inserting before
the period at the end the following: ‘‘, and all execu-
tive and legal costs incurred by the Commission in
the discharge of these functions’’.
135
Title III
(2) ESTABLISHMENT AND ADJUSTMENT.—Sec-
tion 9(b) of such Act is amended—
(A) in paragraph (4)(B), by striking ‘‘90
days’’ and inserting ‘‘45 days’’; and
(B) by adding at the end the following new
paragraph:
‘‘(5) EFFECTIVE DATE OF ADJUSTMENTS.—The
Commission is authorized to continue to collect fees
at the prior year’s rate until the effective date of fee
adjustments or amendments made pursuant to para-
graph (2) or (3).’’.
(3) REGULATORY FEES FOR SATELLITE TV OP-
ERATIONS.—The schedule of regulatory fees in sec-
tion 9(g) of such Act is amended, in the fees appli-
cable to the Mass Media Bureau, by inserting after
each of the items pertaining to construction permits
in the fees applicable to VHF commercial and UHF
commercial TV the following new item:
‘‘Terrestrial television satellite operations .................................................
500’’.
(4) GOVERNMENTAL ENTITIES USE FOR COM-
MON CARRIER PURPOSES.—Section 9(h) of such Act
is amended by adding at the end the following new
sentence: ‘‘The exceptions provided by this sub-
section for governmental entities shall not be appli-
cable to any services that are provided on a commer-
cial basis in competition with another carrier.’’.
136
Title III
(5) INFORMATION REQUIRED IN CONNECTION
WITH ADJUSTMENT OF REGULATORY FEES.—Title I
of such Act is amended—
(A) in section 9, by striking subsection (i);
and
(B) by inserting after section 9 the follow-
ing new section:
‘‘SEC. 10. ACCOUNTING SYSTEM AND ADJUSTMENT INFOR-
MATION.
‘‘(a) ACCOUNTING SYSTEM REQUIRED.—The Com-
mission shall develop accounting systems for the purposes
of making the adjustments authorized by sections 8 and
9. The Commission shall annually prepare and submit to
the Congress an analysis of such systems and shall annu-
ally afford interested persons the opportunity to submit
comments concerning the allocation of the costs of per-
forming the functions described in section 8(a)(5) and
9(a)(1) in making such adjustments in the schedules re-
quired by sections 8 and 9.
‘‘(b) INFORMATION
REQUIRED
IN
CONNECTION
WITH ADJUSTMENT OF APPLICATION AND REGULATORY
FEES.—
‘‘(1) SCHEDULE OF REQUESTED AMOUNTS.—
No later than May 1 of each calendar year, the
Commission shall prepare and transmit to the Com-
137
Title III
mittees of Congress responsible for the Commis-
sion’s authorization and appropriations a detailed
schedule of the amounts requested by the Presi-
dent’s budget to be appropriated for the ensuing fis-
cal year for the activities described in sections
8(a)(5) and 9(a)(1), allocated by bureaus, divisions,
and offices of the Commission.
‘‘(2) EXPLANATORY STATEMENT.—If the Com-
mission anticipates increases in the application fees
or regulatory fees applicable to any applicant, li-
censee, or unit subject to payment of fees, the Com-
mission shall submit to the Congress by May 1 of
such calendar year a statement explaining the rela-
tionship between any such increases and either (A)
increases in the amounts requested to be appro-
priated for Commission activities in connection with
such applicants, licensees, or units subject to pay-
ment of fees, or (B) additional activities to be per-
formed with respect to such applicants, licensees, or
units.
‘‘(3) DEFINITION.—For purposes of this sub-
section, the term ‘amount requested by the Presi-
dent’s budget’ shall include any adjustments to such
requests that are made by May 1 of such calendar
year. If any such adjustment is made after May 1,
138
Title III
the Commission shall provide such Committees with
updated schedules and statements containing the in-
formation required by this subsection within 10 days
after the date of any such adjustment.’’.
SEC. 3103. AUCTION OF RECAPTURED ANALOG LICENSES.
(a) LIMITATIONS ON TERMS OF ANALOG TELEVISION
LICENSES (‘‘REVERSION DATE’’).—The Commission shall
not renew any analog television license for a period that
extends beyond the earlier of December 31, 2005, or one
year after the date the Commission finds, based on annual
surveys conducted pursuant to subsection (b), that at least
95 percent of households in the United States have the
capability to receive and display video signals, other than
video signals transmitted pursuant to an analog television
license. After such date, the Commission shall not issue
any television licenses other than advanced television li-
censes.
(b) ANNUAL SURVEY.—The Secretary of Commerce
shall, each calendar year from 1998 to 2005, conduct a
survey to estimate the percentage of households in the
United States that have the capability to receive and dis-
play video signals other than signals transmitted pursuant
to an analog television license.
(c) SPECTRUM REVERSION.—The Commission shall
ensure that, as analog television licenses expire pursuant
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Title III
to subsection (a), spectrum previously used for the broad-
cast of analog television signals is reclaimed and reallo-
cated in such manner as to maximize the deployment of
new services. Licensees for new services shall be selected
by competitive bidding. The Commission shall complete
the competitive bidding procedure by May 1, 2002.
(d) MINIMUM SERVICE OBLIGATION.—
(1) PROVISION OF CAPABILITY TO RECEIVE AD-
VANCED SERVICES.—The Commission shall, by regu-
lation, establish procedures to ensure that, within
the year prior to the reversion date defined in sub-
section (a), the advanced television licensees shall
provide each household with the capability to receive
and display video signals for advanced television
services if such household requests such capability.
(2) PROVISION
OF
NONSUBSCRIPTION
SERV-
ICES.—Each advanced television service licensee
shall provide, for at least a minimum of 5 years
from the date identified in subsection (a), at least
one nonsubscription video service that meets or ex-
ceeds minimum technical standards established by
the Commission. In setting such minimum technical
standards, the Commission shall, to the extent tech-
nically feasible, ensure that picture and audio qual-
ity are at least as good as that provided to recipients
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Title III
within the Grade B contour of an analog television
license. The Commission shall revoke the license of
any advanced television licensee who fails to meet
this condition of the license.
(e) DEFINITIONS.—As used in this section:
(1) The term ‘‘Commission’’ means the Federal
Communications Commission.
(2) The term ‘‘advanced television services’’
means television services provided using digital or
other advanced technology to enhance audio quality
and video resolution, as further defined in the Opin-
ion, Report, and Order of the Commission entitled
‘‘Advanced Television Systems and Their Impact
Upon the Existing Television Service,’’ MM Docket
No. 87–268.
(3) The term ‘‘analog television licenses’’ means
licenses issued pursuant to 47 C.F.R. 73.682 et seq.
SEC. 3104. PATENT AND TRADEMARK FEES.
Section 10101 of the Omnibus Budget Reconciliation
Act of 1990 (35 U.S.C. 41 note) is amended—
(1) in subsection (a) by striking ‘‘1998’’ and in-
serting ‘‘2002’’;
(2) in subsection (b)(2) by striking ‘‘1998’’ and
inserting ‘‘2002’’; and
(3) in subsection (c)—
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Title III
(A) by striking ‘‘through 1998’’ and insert-
ing ‘‘through 2002’’; and
(B) by adding at the end the following:
‘‘(9) $119,000,000 in fiscal year 1999.
‘‘(10) $119,000,000 in fiscal year 2000.
‘‘(11) $119,000,000 in fiscal year 2001.
‘‘(12) $119,000,000 in fiscal year 2002.’’.
SEC. 3105. REPEAL OF AUTHORIZATION OF TRANSITIONAL
APPROPRIATIONS FOR THE UNITED STATES
POSTAL SERVICE.
(a) IN GENERAL.—(1) Section 2004 of title 39,
United States Code, is repealed.
(2)(A) The table of sections for chapter 20 of such
title is amended by repealing the item relating to section
2004.
(B) Section 2003(e)(2) of such title is amended by
striking ‘‘sections 2401 and 2004’’ each place it appears
and inserting ‘‘section 2401’’.
(b) CLARIFICATION THAT LIABILITIES FORMERLY
PAID PURSUANT TO SECTION 2004 REMAIN LIABILITIES
PAYABLE BY THE POSTAL SERVICE.—Section 2003 of
title 39, United States Code, is amended by adding at the
end the following:
‘‘(h) Liabilities of the former Post Office Department
to the Employees’ Compensation Fund (appropriations for
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Title IV
which were authorized by former section 2004, as in effect
before the effective date of this subsection) shall be liabil-
ities of the Postal Service payable out of the Fund.’’.
TITLE IV—TRANSPORTATION
SEC. 4101. EXTENSION OF RAILROAD SAFETY FEES.
Subsection (e) of section 20115 of title 49, United
States Code, is repealed.
SEC. 4102. PERMANENT EXTENSION OF VESSEL TONNAGE
DUTIES.
(a) EXTENSION OF DUTIES.—Section 36 of the Act
of August 5, 1909 (36 Stat. 111; 46 App. U.S.C. 121),
is amended—
(1) by striking ‘‘for fiscal years 1991, 1992,
1993, 1994, 1995, 1996, 1997, 1998, and 2 cents
per ton not to exceed in the aggregate 10 cents per
tone in any one year, for each fiscal year there-
after’’; and
(2) by striking ‘‘for fiscal years 1991, 1992,
1993, 1994, 1995, 1996, 1997, 1998, and 6 cents
per ton, not to exceed 30 cents per ton for each fis-
cal year thereafter’’.
(b) CONFORMING AMENDMENT.—The Act entitled
‘‘An Act concerning tonnage duties on vessels entering
otherwise than by sea’’, approved March 8, 1910 (36 Stat.
234; 46 App. U.S.C. 132), is amended by striking ‘‘for
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Title IV
fiscal years 1991, 1992, 1993, 1994, 1995, 1996, 1997,
and 1998, and 2 cents per ton, not to exceed in the aggre-
gate 10 cents per ton in any 1 year, for each fiscal year
thereafter,’’.
SEC. 4103. SALE OF GOVERNORS ISLAND, NEW YORK.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, the Administrator of General Services shall
dispose of by sale at fair market value all rights, title, and
interests of the United States in and to the land of, and
improvements to, Governors Island, New York.
(b) RIGHT OF FIRST REFUSAL.—Before a sale is
made under subsection (a) to any other parties, the State
of New York and the city of New York shall be given the
right of first refusal to purchase all or part of Governors
Island. Such right may be exercised by either the State
of New York or the city of New York or by both parties
acting jointly.
(c) PROCEEDS.—Proceeds from the disposal of Gov-
ernors Island under subsection (a) shall be deposited in
the general fund of the Treasury and credited as mis-
cellaneous receipts.
SEC. 4104. SALE OF AIR RIGHTS.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, the Administrator of General Services shall
sell, at fair market value and in a manner to be deter-
144
Title IV
mined by the Administrator, the air rights adjacent to
Washington Union Station described in subsection (b), in-
cluding air rights conveyed to the Administrator under
subsection (d). The Administrator shall complete the sale
by such date as is necessary to ensure that the proceeds
from the sale will be deposited in accordance with sub-
section (c).
(b) DESCRIPTION.—The air rights referred to in sub-
section (a) total approximately 16.5 acres and are depicted
on the plat map of the District of Columbia as follows:
(1) Part of lot 172, square 720.
(2) Part of lots 172 and 823, square 720.
(3) Part of lot 811, square 717.
(c) PROCEEDS.—Before September 30, 1996, pro-
ceeds from the sale of air rights under subsection (a) shall
be deposited in the general fund of the Treasury and cred-
ited as miscellaneous receipts.
(d) CONVEYANCE OF AMTRAK AIR RIGHTS.—
(1) GENERAL RULE.—As a condition of future
Federal financial assistance, Amtrak shall convey to
the Administrator of General Services on or before
December 31, 1995, at no charge, all of the air
rights of Amtrak described in subsection (b).
(2) FAILURE TO COMPLY.—If Amtrak does not
meet the condition established by paragraph (1),
145
Title V
Amtrak shall be prohibited from obligating Federal
funds after March 1, 1996.
TITLE V—HOUSING PROVISIONS
SEC. 5101. REDUCTION OF SECTION 8 ANNUAL ADJUST-
MENT FACTORS FOR UNITS WITHOUT TEN-
ANT TURNOVER.
Paragraph (2)(A) of section 8(c) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(A)) is
amended by striking the last sentence.
SEC. 5102. MAXIMUM MORTGAGE AMOUNT FLOOR FOR SIN-
GLE FAMILY MORTGAGE INSURANCE.
Subparagraph (A) of the first sentence of section
203(b)(2) of the National Housing Act (12 U.S.C.
1709(b)(2)(A)) is amended by striking ‘‘the greater of’’
and all that follows through ‘‘applicable size’’ and insert-
ing the following: ‘‘50 percent of the dollar amount limita-
tion determined under section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act (as adjusted annu-
ally under such section) for a residence of the applicable
size’’.
SEC. 5103. FORECLOSURE AVOIDANCE AND BORROWER AS-
SISTANCE.
(a) FORECLOSURE AVOIDANCE.—The last sentence
of section 204(a) of the National Housing Act (12 U.S.C.
1710(a)) is amended by inserting before the period the
146
Title V
following: ‘‘: And provided further, That the Secretary may
pay insurance benefits to the mortgagee to recompense the
mortgagee for its actions to provide an alternative to fore-
closure of a mortgage that is in default, which actions may
include such actions as special forbearance, loan modifica-
tion, and deeds in lieu of foreclosure, all upon such terms
and conditions as the mortgagee shall determine in the
mortgagee’s sole discretion within guidelines provided by
the Secretary, but which may not include assignment of
a mortgage to the Secretary: And provided further, That
for purposes of the preceding proviso, no action authorized
by the Secretary and no action taken, nor any failure to
act, by the Secretary or the mortgagee shall be subject
to judicial review’’.
(b) AUTHORITY
TO ASSIST MORTGAGORS
IN DE-
FAULT.—Section 230 of the National Housing Act (12
U.S.C. 1715u) is amended to read as follows:
‘‘AUTHORITY TO ASSIST MORTGAGORS IN DEFAULT
‘‘SEC. 230. (a) PAYMENT OF PARTIAL CLAIM.—The
Secretary may establish a program for payment of a par-
tial insurance claim to a mortgagee that agrees to apply
the claim amount to payment of a mortgage on a 1- to
4-family residence that is in default. Any such payment
under such program to the mortgagee shall be made in
the Secretary’s sole discretion and on terms and conditions
acceptable to the Secretary, except that—
147
Title V
‘‘(1) the amount of the payment shall be in an
amount determined by the Secretary, which shall not
exceed an amount equivalent to 12 monthly mort-
gage payments and any costs related to the default
that are approved by the Secretary; and
‘‘(2) the mortgagor shall agree to repay the
amount of the insurance claim to the Secretary upon
terms and conditions acceptable to the Secretary.
The Secretary may pay the mortgagee, from the appro-
priate insurance fund, in connection with any activities
that the mortgagee is required to undertake concerning
repayment by the mortgagor of the amount owed to the
Secretary.
‘‘(b) ASSIGNMENT.—
‘‘(1) PROGRAM
AUTHORITY.—The Secretary
may establish a program for assignment to the Sec-
retary, upon request of the mortgagee, of a mort-
gage on a 1- to 4-family residence insured under this
Act.
‘‘(2) PROGRAM
REQUIREMENTS.—The Sec-
retary may accept assignment of a mortgage under
a program under this subsection only if—
‘‘(A) the mortgage was in default;
‘‘(B) the mortgagee has modified the mort-
gage to cure the default and provide for mort-
148
Title V
gage payments within the reasonable ability of
the mortgagor to pay at interest rates not ex-
ceeding current market interest rates; and
‘‘(C) the Secretary arranges for servicing
of the assigned mortgage by a mortgagee
(which may include the assigning mortgagee)
through procedures that the Secretary has de-
termined to be in the best interests of the ap-
propriate insurance fund.
‘‘(3) PAYMENT
OF
INSURANCE
BENEFITS.—
Upon accepting assignment of a mortgage under the
program under this subsection, the Secretary may
pay insurance benefits to the mortgagee from the
appropriate insurance fund in an amount that the
Secretary determines to be appropriate, but which
may not exceed the amount necessary to compensate
the mortgagee for the assignment and any losses re-
sulting from the mortgage modification.
‘‘(c) PROHIBITION OF JUDICIAL REVIEW.—No deci-
sion by the Secretary to exercise or forego exercising any
authority under this section shall be subject to judicial re-
view.’’.
(c) SAVINGS PROVISION.—Any mortgage for which
the mortgagor has applied to the Secretary of Housing
and Urban Development, before the date of the enactment
149
Title VI
of this Act, for assignment pursuant to section 230(b) of
the National Housing Act shall continue to be governed
by the provisions of such section, as in effect immediately
before such date of enactment.
(d) APPLICABILITY OF OTHER LAWS.—No provision
of the National Housing Act or any other law shall be
construed to require the Secretary of Housing and Urban
Development to provide an alternative to foreclosure for
mortgagees with mortgages on 1- to 4-family residences
insured by the Secretary under the National Housing Act,
or to accept assignments of such mortgages.
TITLE VI—INDEXATION AND MIS-
CELLANEOUS ENTITLEMENT-
RELATED PROVISIONS
SEC. 6101. CONSUMER PRICE INDEX.
(a) ADJUSTMENTS APPLICABLE TO INTERNAL REVE-
NUE CODE PROVISIONS.—
(1) IN
GENERAL.—Paragraph (3) of section
1(f) of the Internal Revenue Code of 1986 (defining
cost-of-living adjustment) is amended by striking the
period at the end and inserting a comma and by in-
serting at the end the following flush material:
‘‘reduced by the number of percentage points
determined under paragraph (8) for the cal-
150
Title VI
endar year for which such adjustment is being
determined.’’
(2) LIMITATION ON INCREASES.—Subsection (f)
of section 1 of such Code is amended by adding at
the end the following new paragraph:
‘‘(8) LIMITATION ON INCREASES IN CPI.—
‘‘(A) IN GENERAL.—The number of per-
centage points determined under this paragraph
for any calendar year is—
‘‘(i) in the case of calendar years
1996, 1997, and 1998, 0.5 percentage
point, and
‘‘(ii) in the case of calendar years
1999, 2000, 2001, and 2002, 0.3 percent-
age point.
‘‘(B) COMPUTATION OF BASE TO REFLECT
LIMITATION.—The Secretary shall adjust the
number taken into account under paragraph
(3)(B) so that any increase which is not taken
into account by reason of subparagraph (A)
shall not be taken into account at any time so
as to allow such increase for any period.’’
(b) ADJUSTMENTS APPLICABLE TO CERTAIN ENTI-
TLEMENT PROGRAMS.—
151
Title VI
(1) IN GENERAL.—For purposes of determining
the amount of any cost-of-living adjustment which
takes effect for benefits payable after December 31,
1995, with respect to any benefit described in para-
graph (5)—
(A) any increase in the relevant index (de-
termined without regard to this subsection)
shall be reduced by the number of percentage
points determined under paragraph (2), and
(B) the amount of the increase in such
benefit shall be equal to the product of—
(i) the increase in the relevant index
(as reduced under subparagraph (A)), and
(ii) the average such benefit for the
preceding calendar year under the program
described in paragraph (5) which provides
such benefit.
(2) LIMITATION ON INCREASES.—
(A) IN GENERAL.—The number of percent-
age points determined under this paragraph for
any calendar year is—
(i) in the case of calendar years 1996,
1997, and 1998, 0.5 percentage point, and
152
Title VI
(ii) in the case of calendar years
1999, 2000, 2001, and 2002, 0.3 percent-
age point.
(B) COMPUTATION OF BASE TO REFLECT
LIMITATION.—Any increase which is not taken
into account by reason of subparagraph (A)
shall not be taken into account at any time so
as to allow such increase for any period.
(3) PARAGRAPH (1) TO APPLY ONLY TO COM-
PUTATION OF BENEFIT AMOUNTS.—Paragraph (1)
shall apply only for purposes of determining the
amount of benefits and not for purposes of deter-
mining—
(A) whether a threshold increase in the rel-
evant index has been met, or
(B) increases in amounts under other pro-
visions of law not described in paragraph (5)
which operate by reference to increases in such
benefits.
(4) DEFINITIONS.—For purposes of this sub-
section—
(A) COST-OF-LIVING
ADJUSTMENT.—The
term ‘‘cost-of-living adjustment’’ means any ad-
justment in the amount of benefits described in
153
Title VI
paragraph (5) which is determined by reference
to changes in an index.
(B) INDEX.—
(i) INDEX.—The term ‘‘index’’ means
the Consumer Price Index and any other
index of price or wages.
(ii) RELEVANT
INDEX.—The term
‘‘relevant index’’ means the index on the
basis of which the amount of the cost-of-
living adjustment is determined.
(5) BENEFITS
TO
WHICH
SUBSECTION
AP-
PLIES.—For purposes of this subsection, the benefits
described in this paragraph are—
(A) old age, survivors, and disability insur-
ance benefits subject to adjustment under sec-
tion 215(i) of the Social Security Act (but the
limitation under paragraph (1) shall not apply
to supplemental security income benefits under
title XVI of such Act);
(B) retired and retainer pay subject to ad-
justment under section 1401a of title 10, Unit-
ed States Code;
(C) civil service retirement benefits under
section 8340 of title 5, United States Code, for-
eign service retirement benefits under section
154
Title VI
826 of the Foreign Service Act of 1980, Central
Intelligence Agency retirement benefits under
part J of the Central Intelligence Agency Re-
tirement Act of 1964 for certain employees, and
any other benefits under any similar provision
under any retirement system for employees of
the government of the United States;
(D) Federal workers’ compensation under
section 8146a of title 5, United States Code;
(E) benefits under section 3(a), 4(a), or
4(f) of the Railroad Retirement Act of 1974;
and
(F) benefits and expenditure limits under
title XVIII or XIX of the Social Security Act.
(6) BENEFIT.—For purposes of this section,
the term ‘‘benefit’’ includes a payment.
SEC. 6102. REDUCTION IN TITLE XX BLOCK GRANTS TO
STATES FOR SOCIAL SERVICES.
Section 2003(c) of the Social Security Act (42 U.S.C.
1397b(c)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(4);
(2) in paragraph (5), by striking ‘‘fiscal year
after fiscal year 1989.’’ and inserting ‘‘of fiscal
years 1990 through 1995; and’’; and
155
Title VI
(3) by adding at the end the following:
‘‘(6) $2,520,000,000 for fiscal year 1996 and
each succeeding fiscal year.’’.
SEC. 6103. MATCHING RATE REQUIREMENT FOR TITLE XX
BLOCK GRANTS TO STATES FOR SOCIAL
SERVICES.
Section 2002(a)(1) of the Social Security Act (42
U.S.C. 1397a(a)(1)) is amended by striking ‘‘Each State’’
and all that follows through the period and inserting the
following: ‘‘(A) Each State shall be entitled to payment
under this title for each fiscal year in an amount equal
to the lesser of—
‘‘(i) 80 percent of the total amount expended by
the State during the fiscal year for services referred
to in subparagraph (B); or
‘‘(ii) the allotment of the State for the fiscal
year.
‘‘(B) A State to which a payment is made under this
title shall use the payment for services directed at the
goals set forth in section 2001, subject to the requirements
of this title.’’.
SEC. 6104. DENIAL OF UNEMPLOYMENT INSURANCE TO
CERTAIN HIGH-INCOME INDIVIDUALS.
(a) GENERAL RULE.—Subsection (a) of section 3304
of the Internal Revenue Code of 1986, as amended by sec-
156
Title VI
tion 10101, is further amended by striking ‘‘and’’ at the
end of paragraph (18), by redesignating paragraph (19)
as paragraph (20), and by inserting after paragraph (18)
the following new paragraph:
‘‘(19) compensation shall not be payable to any
individual for any benefit year if the taxable income
of such individual for such individual’s most recent
taxable year ending before the beginning of such
benefit year exceeded $120,000; and’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendment made by this section shall
apply to benefit years beginning after December 31,
1995.
(2) SPECIAL RULE.—In the case of any State
the legislature of which has not been in session for
at least 30 calendar days (whether or not successive)
between the date of the enactment of this Act and
December 31, 1995, the amendments made by this
section shall apply to benefit years beginning after
the day 30 calendar days after the first day on
which such legislature is in session on or after De-
cember 31, 1995.
157
Title VI
SEC. 6105. DENIAL OF UNEMPLOYMENT INSURANCE TO IN-
DIVIDUALS WHO VOLUNTARILY LEAVE MILI-
TARY SERVICE.
(a) GENERAL RULE.—Paragraph (1) of section
8521(a) of title 5, United States Code, is amended to read
as follows:
‘‘(1) ‘Federal service’ means active service (not
including active duty in a reserve status unless for
a continuous period of 45 days or more) in the
armed forces or the commissioned corps of the Na-
tional Oceanic and Atmospheric Administration if
with respect to that service the individual—
‘‘(A) was discharged or released under
honorable conditions,
‘‘(B) did not resign or voluntarily leave the
service, and
‘‘(C) was not discharged or released for
cause as defined by the Secretary of Defense;’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply in the case of a discharge or
release after the date of the enactment of this Act.
158
Title VII, Subtitle A
TITLE VII—MEDICAID REFORM
Subtitle A—Per Capita Spending
Limit
SEC. 7001. LIMITATION ON EXPENDITURES RECOGNIZED
FOR PURPOSES OF FEDERAL FINANCIAL PAR-
TICIPATION.
(a) IN GENERAL.—Title XIX of the Social Security
Act is amended—
(1) in section 1903(a), by striking ‘‘From’’ and
inserting ‘‘Subject to section 1931, from’’;
(2) by redesignating section 1931 as section
1932; and
(3) by inserting after section 1930 the following
new section:
‘‘LIMITATION ON FEDERAL FINANCIAL PARTICIPATION
BASED ON PER BENEFICIARY SPENDING
‘‘SEC. 1931. (a) IN GENERAL.—Subject to subsection
(e), the total amount of State expenditures for medical
assistance for which Federal financial participation may
be made under section 1903(a) for quarters in a fiscal
year (beginning with fiscal year 1997) may not exceed the
sum of the following:
‘‘(1) NONDISABLED
MEDICAID
CHILDREN.—
The product of—
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Title VII, Subtitle A
‘‘(A) the number of full-year equivalent
nondisabled medicaid children (described in
subsection (b)(1)) in the State in the fiscal
year, and
‘‘(B) the per capita medical assistance
limit established under subsection (c)(1) for
such category of individuals for the fiscal year.
‘‘(2) NONDISABLED
MEDICAID
ADULTS.—The
product of—
‘‘(A) the number of full-year equivalent
nondisabled medicaid adults (described in sub-
section (b)(2)) in the State in the fiscal year,
and
‘‘(B) the per capita medical assistance
limit established under subsection (c)(1) for
such category individuals for the fiscal year.
‘‘(3) NONDISABLED ELDERLY MEDICAID BENE-
FICIARIES.—The product of—
‘‘(A) the number of full-year equivalent
nondisabled elderly medicaid beneficiaries (de-
scribed in subsection (b)(3)) in the State in the
fiscal year, and
‘‘(B) the per capita medical assistance
limit established under subsection (c)(1) for
such category of individuals for the fiscal year.
160
Title VII, Subtitle A
‘‘(4) DISABLED
MEDICAID
BENEFICIARIES.—
The product of—
‘‘(A) the number of full-year equivalent
disabled medicaid beneficiaries (described in
subsection (b)(4)) in the State in the fiscal
year, and
‘‘(B) the per capita medical assistance
limit established under subsection (c)(1) for
such category individuals for the fiscal year.
‘‘(5) ADMINISTRATIVE
EXPENDITURES.—The
product of—
‘‘(A) the number of full-year equivalent
medicaid beneficiaries who are in any category
of beneficiaries in the State in the fiscal year,
and
‘‘(B) the per capita limit established under
subsection (c)(1) for administrative expendi-
tures for the fiscal year.
This section shall not apply to expenditures for which no
Federal financial participation is available under this title.
‘‘(b) DEFINITIONS RELATING TO CATEGORIES OF IN-
DIVIDUALS.—In this section:
‘‘(1) NONDISABLED
MEDICAID
CHILDREN.—
The term ‘nondisabled medicaid child’ means an in-
dividual entitled to medical assistance under the
161
Title VII, Subtitle A
State plan under this title who is not disabled (as
such term is used under paragraph (4)) and is under
21 years of age.
‘‘(2) NONDISABLED
MEDICAID
ADULTS.—The
term ‘nondisabled medicaid adult’ means an individ-
ual entitled to medical assistance under the State
plan under this title who is not disabled (as such
term is used under paragraph (4)) and is at least 21
years of age but under 65 years of age.
‘‘(3) NONDISABLED ELDERLY MEDICAID BENE-
FICIARY.—The term ‘nondisabled medicaid adult’
means an individual entitled to medical assistance
under the State plan under this title who is not dis-
abled (as such term is used under paragraph (4))
and is at least 65 years of age.
‘‘(4) DISABLED
MEDICAID
BENEFICIARIES.—
The term ‘disabled medicaid beneficiary’ means an
individual entitled to medical assistance under the
State plan under this title who is entitled to such as-
sistance solely on the basis of blindness or disability.
For purposes of this section, nondisabled medicaid chil-
dren, nondisabled medicaid adults, nondisabled elderly
medicaid beneficiaries, and disabled medicaid beneficiaries
each constitutes a separate category of medicaid bene-
ficiaries.
162
Title VII, Subtitle A
‘‘(c) ESTABLISHMENT OF PER CAPITA LIMITS.—
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish for each State a per capita medical assistance
limit for each category of medicaid beneficiaries de-
scribed in subsection (b) and for administrative ex-
penditures for a fiscal year equal to the product of
the following:
‘‘(A) PREVIOUS EXPENDITURES.—The av-
erage of the amount of the per capita match-
able medical assistance expenditures (deter-
mined under paragraph (2)(A)) for such cat-
egory 
(or 
the 
per 
capita 
matchable
adminstrative expenditures determined under
paragraph (2)(B)) for such State for each of
the 3 previous fiscal years.
‘‘(B) INFLATION FACTOR.—The rolling 2-
year CPI increase factor (determined under
paragraph (3)(A)) for the fiscal year involved.
‘‘(C) TRANSITIONAL
ALLOWANCE.—The
transitional allowance factor (if any) applicable
under paragraph (3)(B) to such limit for the
previous fiscal year and for the fiscal year in-
volved.
163
Title VII, Subtitle A
‘‘(2) PER CAPITA MATCHABLE MEDICAL ASSIST-
ANCE
EXPENDITURES.—For purposes of this sec-
tion—
‘‘(A) 
MEDICAL
ASSISTANCE
EXPENDI-
TURES.—The ‘per capita matchable medical as-
sistance expenditures’, for a category of medic-
aid beneficiaries for a State for a fiscal year, is
equal to—
‘‘(i) the amount of expenditures for
which Federal financial participation is (or
may be) provided (consistent with this sec-
tion) to the State under paragraphs (1)
and (5) of section 1903(a) (other than ex-
penditures excluded under subsection (e))
with respect to medical assistance fur-
nished with respect to individuals in such
category during the fiscal year, divided by
‘‘(ii) the number of full-year equiva-
lent individuals in such category in the
State in such fiscal year.
‘‘(B) PER
CAPITA
MATCHABLE
ADMINIS-
TRATIVE
EXPENDITURES.—The ‘per capita
matchable administrative expenditures’, for a
State for a fiscal year, is equal to—
164
Title VII, Subtitle A
‘‘(i) the amount of expenditures for
which Federal financial participation is (or
may be) provided (consistent with this sec-
tion) to the State under section 1903(a)
(under paragraphs (1) and (5) of such sec-
tion) during the fiscal year, divided by
‘‘(ii) the number of full-year equiva-
lent individuals in any category of medic-
aid beneficiary in the State in such fiscal
year.
‘‘(3) INCREASE FACTORS.—In this subsection—
‘‘(A) ROLLING 2-YEAR CPI INCREASE FAC-
TOR.—The ‘rolling 2-year CPI increase factor’
for a fiscal year is 1 plus the percentage by
which—
‘‘(i) the Secretary’s estimate of the
average value of the consumer price index
for all urban consumers (all items, U.S.
city average) for months in the particular
fiscal year, exceeds
‘‘(ii) the average value of such index
for months in the 3 previous fiscal years.
‘‘(B) TRANSITIONAL
ALLOWANCE
FAC-
TORS.—
165
Title VII, Subtitle A
‘‘(i) FISCAL YEAR 1996.—The ‘transi-
tional allowance factor’ for fiscal year
1996—
‘‘(I) for the category of non-
disabled medicaid children, is 1.051;
‘‘(II) for the category of non-
disabled medicaid adults, is 1.067;
‘‘(III) for the category of non-
disabled elderly medicaid beneficiaries
is 1.031;
‘‘(IV) for the category of disabled
medicaid beneficiaries is 1.015; and
‘‘(V) for administrative expendi-
tures is 1.046.
‘‘(ii) SUBSEQUENT FISCAL YEARS FOR
NONDISABLED
CHILDREN
AND
ADULTS
AND
FOR
DISABLED
CATEGORIES.—The
‘transitional allowance factor’ for the cat-
egories of nondisabled medicaid children,
nondisabled medicaid adults, and disabled
medicaid beneficiaries—
‘‘(I) for fiscal year 1997 is 1.01,
and
‘‘(II) for each subsequent fiscal
year is 1.0.
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Title VII, Subtitle A
‘‘(iii) SUBSEQUENT
FISCAL
YEARS
FOR THE ELDERLY AND ADMINISTRATIVE
EXPENDITURES.—The ‘transitional allow-
ance factor’ for the category of nondisabled
elderly medicaid beneficiaries and for ad-
ministrative expenditures for fiscal years
after fiscal year 1996 is 1.0.
‘‘(4) NOTICE.—The Secretary shall notify each
State before the beginning of each fiscal year of the
per capita limits established under this subsection
for the State for the fiscal year.
‘‘(d) SPECIAL RULES AND EXCEPTIONS.—For pur-
poses of this section, expenditures attributable to any of
the following shall not be subject to the limits established
under this section and shall not be taken into account in
establishing per capita medical assistance limits under
subsection (c)(1):
‘‘(1) DSH.—Payment adjustments under sec-
tion 1923.
‘‘(2) MEDICARE COST-SHARING.—Payments for
medical assistance for medicare cost-sharing (as de-
fined in section 1905(p)(3)).
‘‘(3) SERVICES THROUGH IHS AND TRIBAL PRO-
VIDERS.—Payments for medical assistance for serv-
167
Title VII, Subtitle A
ices described in the last sentence of section
1905(b).
Nothing in this section shall be construed as applying any
limitation to expenditures for the purchase and delivery
of qualified pediatric vaccines under section 1928.
‘‘(e) DEFINITIONS.—In this section, the term ‘medic-
aid beneficiary’ means an individual entitled to medical as-
sistance under the State plan under this title.
‘‘(f) ESTIMATIONS AND NOTICE.—
‘‘(1) IN GENERAL.—The Secretary shall—
‘‘(A) establish a process for estimating the
limits established under subsection (a) for each
State at the beginning of each fiscal year and
adjusting such estimate during such year; and
‘‘(B) notifying each State of the esti-
mations and adjustments referred to in sub-
paragraph (A).
‘‘(2) DETERMINATION OF NUMBER OF FULL-
YEAR EQUIVALENT INDIVIDUALS.—For purposes of
this section, the number of full-year equivalent indi-
viduals in each category described in subsection (b)
for a State for a year shall be determined based on
actual reports submitted by the State to the Sec-
retary. In the case of individuals who were not enti-
tled to benefits under a State plan for the entire fis-
168
Title VII, Subtitle A
cal year (or are within a group of individuals for
only part of a fiscal year), the number shall take
into account only the portion of the year in which
they were so entitled or within such group. The Sec-
retary may audit such reports.
‘‘(g) ANTI-GAMING
ADJUSTMENT
TO
REFLECT
CHANGES IN ELIGIBILITY.—
‘‘(1) REPORT
ON
PER
CAPITA
EXPENDI-
TURES.—If a State makes a change (on or after Oc-
tober 15, 1995) relating to eligibility for medical as-
sistance in its State plan that results in the addition
or deletion of individuals eligible for such assistance,
the State shall submit to the Secretary with such
change such information as the Secretary may re-
quire in order to carry out paragraph (2).
‘‘(2) ADJUSTMENT FOR CERTAIN ADDITIONS.—
If a State makes a change described in paragraph
(1) that the Secretary believes will result in making
medical assistance available for additional individ-
uals (within a category described in subsection (b))
with respect to whom the Secretary estimates the
per capita average medical assistance expenditures
will be less the applicable per capita limit established
under subsection (c)(1) for such category, the Sec-
retary shall apply the per capita limits under such
169
Title VII, Subtitle A
subsection separately with respect to individuals who
are eligible for medical assistance without regard to
such addition and with respect to the individuals so
added.
‘‘(3) ADJUSTMENT FOR CERTAIN DELETIONS.—
If a State makes a change described in paragraph
(1) that the Secretary believes will result in denial
of medical assistance for individuals (within a cat-
egory described in subsection (b)) with respect to
whom the Secretary estimates the per capita average
medical assistance expenditures is greater than the
applicable per capita limit established under sub-
section (c)(1) for such catetory, the Secretary shall
adjust the payment limits under subsection (a) to re-
flect any decrease in average per beneficiary expend-
itures that would result from such change.
‘‘(h) TREATMENT OF STATES OPERATING UNDER
WAIVERS.—The Secretary shall provide for such adjust-
ments to the per capita limits under subsection (c) for a
fiscal year as may be appropriate to take into account the
case of States which either—
‘‘(1) during any of the 3 previous fiscal years
was providing medical assistance to its residents
under a waiver granted under section 1115, section
1915, or other provision of law, and, in the fiscal
170
Title VII, Subtitle A
year involved is no longer providing such medical as-
sistance under such waiver; or
‘‘(2) during any of the 3 previous fiscal years
was not providing medical assistance to its residents
under a waiver granted under section 1115, section
1915, or other provision of law, and, in the fiscal
year involved is providing such medical assistance
under such a waiver.’’.
(b) ENFORCEMENT-RELATED PROVISIONS.—
(1) ASSURING ACTUAL PAYMENTS TO STATES
CONSISTENT WITH LIMITATION.—Section 1903(d) of
such Act (42 U.S.C. 1396b(d)) is amended—
(A) in paragraph (2)(A), by striking ‘‘The
Secretary’’ and inserting ‘‘Subject to paragraph
(7), the Secretary’’, and
(B) by adding at the end the following new
paragraph:
‘‘(7)(A) The Secretary shall take such steps as are
necessary to assure that payments under this subsection
for quarters in a fiscal year are consistent with the pay-
ment limits established under section 1931 for the fiscal
year. Such steps may include limiting such payments for
one or more quarters in a fiscal year based on—
‘‘(i) an appropriate proportion of the payment
limits for the fiscal year involved, and
171
Title VII, Subtitle A
‘‘(ii) numbers of individuals within each cat-
egory, as reported under subparagraph (B) for a re-
cent previous quarter.
‘‘(B) Each State shall include, in its report filed
under paragraph (1)(A) for a calendar quarter—
‘‘(i) the actual number of individuals within
each category described in section 1931(b) for the
second previous calendar quarter and (based on the
data available) for the previous calendar quarter,
and
‘‘(ii) an estimate of such numbers for the cal-
endar quarter involved.’’.
(2) RESTRICTION ON AUTHORITY OF STATES TO
APPLY LESS RESTRICTIVE INCOME AND RESOURCE
METHODOLOGIES.—Section 1902(r)(2) of such Act
(42 U.S.C. 1396a(r)(2)) is amended by adding at
the end the following new subparagraph:
‘‘(C) Subparagraph (A) shall not apply to plan
amendments made on or after October 15, 1995.’’.
(c) CONFORMING AMENDMENT.—Section 1903(i) of
such Act (42 U.S.C. 1396b(i)) is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(14),
(2) by striking the period at the end of para-
graph (15) and inserting ‘‘; or’’, and
172
Title VII, Subtitle B
(3) by inserting after paragraph (15) the fol-
lowing:
‘‘(16) in accordance with section 1931, with re-
spect to amounts expended to the extent they exceed
applicable limits established under section 1931(a).’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to payments for calendar quarters
beginning on or after October 1, 1996.
Subtitle B—Medicaid Managed
Care
SEC. 
7101. 
PERMITTING 
GREATER 
FLEXIBILITY 
FOR
STATES TO ENROLL BENEFICIARIES IN MAN-
AGED CARE ARRANGEMENTS.
(a) IN GENERAL.—Title XIX of the Social Security
Act (42 U.S.C. 1396 et seq.), as amended by section
7001(a), is amended—
(1) by redesignating section 1932 as section
1933; and
(2) by inserting after section 1931 the following
new section:
‘‘STATE OPTIONS FOR ENROLLMENT OF BENEFICIARIES
IN MANAGED CARE ARRANGEMENTS
‘‘SEC. 1932. (a) MANDATORY ENROLLMENT.—
‘‘(1) IN GENERAL.—Subject to the succeeding
provisions of this section and notwithstanding para-
graphs (1), (10)(B), and (23) of section 1902(a), a
173
Title VII, Subtitle B
State may require an individual eligible for medical
assistance under the State plan under this title to
enroll with an eligible managed care provider as a
condition of receiving such assistance and, with re-
spect to assistance furnished by or under arrange-
ments with such provider, to receive such assistance
through the provider, if the following provisions are
met:
‘‘(A) The provider meets the requirements
of section 1933.
‘‘(B) The provider enters into a contract
with the State to provide services for the bene-
fit of individuals eligible for benefits under this
title under which prepaid payments to such pro-
vider are made on an actuarially sound basis.
‘‘(C) There is sufficient capacity among all
providers meeting such requirements to enroll
and serve the individuals required to enroll with
such providers.
‘‘(D) The individual is not a special needs
individual (as defined in subsection (c)).
‘‘(E) The State—
‘‘(i) permits an individual to choose
an eligible managed care provider—
174
Title VII, Subtitle B
‘‘(I) from among not less than 2
medicaid managed care plans; or
‘‘(II) between a medicaid man-
aged care plan and a primary care
case management provider;
‘‘(ii) provides the individual with the
opportunity to change enrollment among
eligible managed care providers not less
than once annually and notifies the indi-
vidual of such opportunity not later than
60 days prior to the first date on which
the individual may change enrollment;
‘‘(iii) establishes a method for estab-
lishing enrollment priorities in the case of
an eligible managed care provider that
does not have sufficient capacity to enroll
all such individuals seeking enrollment
under which individuals already enrolled
with the provider are given priority in con-
tinuing enrollment with the provider;
‘‘(iv) establishes a default enrollment
process which meets the requirements de-
scribed in paragraph (2) and under which
any such individual who does not enroll
with an eligible managed care provider
175
Title VII, Subtitle B
during the enrollment period specified by
the State shall be enrolled by the State
with such a provider in accordance with
such process; and
‘‘(v) establishes the sanctions provided
for in section 1934.
‘‘(2) DEFAULT
ENROLLMENT
PROCESS
RE-
QUIREMENTS.—The default enrollment process es-
tablished by a State under paragraph (1)(E)(iv)
shall—
‘‘(A) provide that the State may not enroll
individuals with an eligible managed care pro-
vider which is not in compliance with the re-
quirements of section 1933; and
‘‘(B) provide for an equitable distribution
of individuals among all eligible managed care
providers available to enroll individuals through
such default enrollment process, consistent with
the enrollment capacities of such providers.
‘‘(b) REENROLLMENT OF INDIVIDUALS WHO REGAIN
ELIGIBILITY.—
‘‘(1) IN GENERAL.—If an individual eligible for
medical assistance under a State plan under this
title and enrolled with an eligible managed care pro-
vider with a contract under subsection (a)(1)(B)
176
Title VII, Subtitle B
ceases to be eligible for such assistance for a period
of not greater than 2 months, the State may provide
for the automatic reenrollment of the individual with
the provider as of the first day of the month in
which the individual is again eligible for such assist-
ance.
‘‘(2) CONDITIONS.—Paragraph (1) shall only
apply if—
‘‘(A) the month for which the individual is
to be reenrolled occurs during the enrollment
period covered by the individual’s original en-
rollment with the eligible managed care pro-
vider;
‘‘(B) the eligible managed care provider
continues to have a contract with the State
agency under subsection (a)(1)(B) as of the
first day of such month; and
‘‘(C) the eligible managed care provider
complies with the requirements of section 1933.
‘‘(3) NOTICE OF REENROLLMENT.—The State
shall provide timely notice to an eligible managed
care provider of any reenrollment of an individual
under this subsection.
177
Title VII, Subtitle B
‘‘(c) SPECIAL NEEDS INDIVIDUALS DESCRIBED.—In
this section, a ‘special needs individual’ means any of the
following:
‘‘(1) SPECIAL
NEEDS
CHILD.—An individual
who is under 19 years of age who —
‘‘(A) is eligible for supplemental security
income under title XVI;
‘‘(B) 
is 
described 
under 
section
501(a)(1)(D);
‘‘(C) is a child described in section
1902(e)(3); or
‘‘(D) is in foster care or is otherwise in an
out-of-home placement.
‘‘(2) HOMELESS
INDIVIDUALS.—An individual
who is homeless (without regard to whether the indi-
vidual is a member of a family), including—
‘‘(A) an individual whose primary residence
during the night is a supervised public or pri-
vate facility that provides temporary living ac-
commodations; or
‘‘(B) an individual who is a resident in
transitional housing.
‘‘(3) MIGRANT
AGRICULTURAL
WORKERS.—A
migratory agricultural worker or a seasonal agricul-
tural worker (as such terms are defined in section
178
Title VII, Subtitle B
329 of the Public Health Service Act), or the spouse
or dependent of such a worker.
‘‘(4) INDIANS.—An Indian (as defined in sec-
tion 4(c) of the Indian Health Care Improvement
Act (25 U.S.C. 1603(c))).’’.
(b) 
CONFORMING
AMENDMENT.—Section
1902(a)(23) of such Act (42 U.S.C. 1396a(a)(23)) is
amended—
(1) in the matter preceding subparagraph (A),
by striking ‘‘subsection (g) and in section 1915’’ and
inserting ‘‘subsection (g), section 1915, and section
1931,’’; and
(2) in subparagraph (B)—
(A) by striking ‘‘a health maintenance or-
ganization, or a’’ and inserting ‘‘or with an eli-
gible managed care provider, as defined in sec-
tion 1933(g)(1), or’’.
SEC. 7102. REMOVAL OF BARRIERS TO PROVISION OF MED-
ICAID SERVICES THROUGH MANAGED CARE.
(a) REPEAL
OF CURRENT BARRIERS.—Except as
provided in subsection (b), section 1903(m) of the Social
Security Act (42 U.S.C. 1396b(m)) is repealed on the date
of the enactment of this Act.
(b) EXISTING CONTRACTS.—In the case of any con-
tract under section 1903(m) of such Act which is in effect
179
Title VII, Subtitle B
on the day before the date of the enactment of this Act,
the provisions of such section shall apply to such contract
until the earlier of—
(1) the day after the date of the expiration of
the contract; or
(2) the date which is 1 year after the date of
the enactment of this Act.
(c) ELIGIBLE
MANAGED
CARE
PROVIDERS
DE-
SCRIBED.—Title XIX of such Act (42 U.S.C. 1396 et
seq.), as amended by sections 7001(a) and 7101(a), is
amended—
(1) by redesignating section 1933 as section
1934; and
(2) by inserting after section 1932 the following
new section:
‘‘ELIGIBLE MANAGED CARE PROVIDERS
‘‘SEC. 1933. (a) DEFINITIONS.—In this section, the
following definitions shall apply:
‘‘(1) ELIGIBLE
MANAGED
CARE
PROVIDER.—
The term ‘eligible managed care provider’ means—
‘‘(A) a medicaid managed care plan; or
‘‘(B) a primary care case management pro-
vider.
‘‘(2) MEDICAID
MANAGED
CARE
PLAN.—The
term ‘medicaid managed care plan’ means a health
maintenance organization, an eligible organization
180
Title VII, Subtitle B
with a contract under Section 1876, a provider spon-
sored network or any other plan which provides or
arranges for the provision of one or more items and
services to individuals eligible for medical assistance
under the State plan under this title in accordance
with a contract with the State under section
1932(a)(1)(B).
‘‘(3) PRIMARY CARE CASE MANAGEMENT PRO-
VIDER.—
‘‘(A) IN
GENERAL.—The term ‘primary
care case management provider’ means a health
care provider that—
‘‘(i) is a physician, group of physi-
cians, a Federally-qualified health center, a
rural health clinic, or an entity employing
or having other arrangements with physi-
cians that provides or arranges for the pro-
vision of one or more items and services to
individuals eligible for medical assistance
under the State plan under this title in ac-
cordance with a contract with the State
under section 1932(a)(1)(B);
‘‘(ii) receives payment on a fee-for-
service basis (or, in the case of a Feder-
ally-qualified health center or a rural
181
Title VII, Subtitle B
health clinic, on a reasonable cost per en-
counter basis) for the provision of health
care items and services specified in such
contract to enrolled individuals;
‘‘(iii) receives an additional fixed fee
per enrollee for a period specified in such
contract for providing case management
services (including approving and arrang-
ing for the provision of health care items
and services specified in such contract on
a referral basis) to enrolled individuals;
and
‘‘(iv) is not an entity that is at risk.
‘‘(B) AT RISK.—In subparagraph (A)(iv),
the term ‘at risk’ means an entity that—
‘‘(i) has a contract with the State
under which such entity is paid a fixed
amount for providing or arranging for the
provision of health care items or services
specified in such contract to an individual
eligible for medical assistance under the
State plan and enrolled with such entity,
regardless of whether such items or serv-
ices are furnished to such individual; and
182
Title VII, Subtitle B
‘‘(ii) is liable for all or part of the cost
of furnishing such items or services, re-
gardless of whether such cost exceeds such
fixed payment.
‘‘(b) ENROLLMENT.—
‘‘(1) NONDISCRIMINATION.—An eligible man-
aged care provider may not discriminate on the basis
of health status or anticipated need for services in
the enrollment, reenrollment, or disenrollment of in-
dividuals eligible to receive medical assistance under
a State plan under this title or by discouraging en-
rollment (except as permitted by this section) by eli-
gible individuals.
‘‘(2) TERMINATION OF ENROLLMENT.—
‘‘(A) IN GENERAL.—An eligible managed
care provider shall permit an individual eligible
for medical assistance under the State plan
under this title who is enrolled with the pro-
vider to terminate such enrollment for cause at
any time, and without cause during the 60-day
period beginning on the date the individual re-
ceives notice of enrollment, and shall notify
each such individual of the opportunity to ter-
minate enrollment under these conditions.
183
Title VII, Subtitle B
‘‘(B) FRAUDULENT INDUCEMENT OR CO-
ERCION
AS
GROUNDS
FOR
CAUSE.—For pur-
poses of subparagraph (A), an individual termi-
nating enrollment with an eligible managed care
provider on the grounds that the enrollment
was based on fraudulent inducement or was ob-
tained through coercion shall be considered to
terminate such enrollment for cause.
‘‘(C) NOTICE OF TERMINATION.—
‘‘(i) NOTICE TO STATE.—
‘‘(I) BY INDIVIDUALS.—Each in-
dividual terminating enrollment with
an eligible managed care provider
under subparagraph (A) shall do so
by providing notice of the termination
to an office of the State agency ad-
ministering the State plan under this
title, the State or local welfare agency,
or an office of an eligible managed
care provider.
‘‘(II) BY
PLANS.—Any eligible
managed care provider which receives
notice of an individual’s termination
of enrollment with such provider
through receipt of such notice at an
184
Title VII, Subtitle B
office of an eligible managed care pro-
vider shall provide timely notice of the
termination to the State agency ad-
ministering the State plan under this
title.
‘‘(ii) NOTICE
TO
PLAN.—The State
agency administering the State plan under
this title or the State or local welfare agen-
cy which receives notice of an individual’s
termination of enrollment with an eligible
managed care provider under clause (i)
shall provide timely notice of the termi-
nation to such provider.
‘‘(D) REENROLLMENT.—Each State shall
establish a process under which an individual
terminating enrollment under this paragraph
shall be promptly enrolled with another eligible
managed care provider and notified of such en-
rollment.
‘‘(3) PROVISION OF ENROLLMENT MATERIALS
IN
UNDERSTANDABLE
FORM.—Each eligible man-
aged care provider shall provide all enrollment mate-
rials in a manner and form which may be easily un-
derstood by a typical adult enrollee of the provider
185
Title VII, Subtitle B
who is eligible for medical assistance under the State
plan under this title.
‘‘(c) QUALITY ASSURANCE.—
‘‘(1) ACCESS TO SERVICES.—Each eligible man-
aged care provider shall provide or arrange for the
provision of all medically necessary medical assist-
ance under this title which is specified in the con-
tract entered into between such provider and the
State under section 1932(a)(1)(B) for enrollees who
are eligible for medical assistance under the State
plan under this title.
‘‘(2) TIMELY
DELIVERY
OF
SERVICES.—Each
eligible managed care provider shall respond to re-
quests from enrollees for the delivery of medical as-
sistance in a manner which —
‘‘(A) makes such assistance —
‘‘(i) available and accessible to each
such individual, within the area served by
the provider, with reasonable promptness
and in a manner which assures continuity;
and
‘‘(ii) when medically necessary, avail-
able and accessible 24 hours a day and 7
days a week; and
186
Title VII, Subtitle B
‘‘(B) with respect to assistance provided to
such an individual other than through the pro-
vider, or without prior authorization, in the
case of a primary care case management pro-
vider, provides for reimbursement to the indi-
vidual (if applicable under the contract between
the State and the provider) if —
‘‘(i) the services were medically nec-
essary and immediately required because of
an unforeseen illness, injury, or condition;
and
‘‘(ii) it was not reasonable given the
circumstances 
to 
obtain 
the 
services
through the provider, or, in the case of a
primary care case management provider,
with prior authorization.
‘‘(3) EXTERNAL INDEPENDENT REVIEW OF ELI-
GIBLE MANAGED CARE PROVIDER ACTIVITIES.—
‘‘(A) REVIEW
OF
MEDICAID
MANAGED
CARE PLAN CONTRACT.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in subparagraph (B), each medicaid
managed care plan shall be subject to an
annual external independent review of the
quality and timeliness of, and access to,
187
Title VII, Subtitle B
the items and services specified in such
plan’s contract with the State under sec-
tion 1932(a)(1)(B). Such review shall spe-
cifically evaluate the extent to which the
medicaid managed care plan provides such
services in a timely manner.
‘‘(ii) CONTENTS OF REVIEW.—An ex-
ternal independent review conducted under
this paragraph shall include the following:
‘‘(I) a review of the entity’s medi-
cal care, through sampling of medical
records or other appropriate methods,
for indications of quality of care and
inappropriate 
utilization 
(including
overutilization) and treatment,
‘‘(II) a review of enrollee inpa-
tient and ambulatory data, through
sampling of medical records or other
appropriate methods, to determine
trends in quality and appropriateness
of care,
‘‘(III) notification of the entity
and the State when the review under
this paragraph indicates inappropriate
188
Title VII, Subtitle B
care, treatment, or utilization of serv-
ices (including overutilization), and
‘‘(IV) other activities as pre-
scribed by the Secretary or the State.
‘‘(iii) AVAILABILITY
OF
RESULTS.—
The results of each external independent
review conducted under this subparagraph
shall be available to participating health
care providers, enrollees, and potential en-
rollees of the medicaid managed care plan,
except that the results may not be made
available in a manner that discloses the
identity of any individual patient.
‘‘(B) DEEMED COMPLIANCE.—
‘‘(i) MEDICARE PLANS.—The require-
ments of subparagraph (A) shall not apply
with respect to a medicaid managed care
plan if the plan is an eligible organization
with a contract in effect under section
1876.
‘‘(ii) PRIVATE ACCREDITATION.—
‘‘(I) IN GENERAL.—The require-
ments of subparagraph (A) shall not
apply with respect to a medicaid man-
aged care plan if —
189
Title VII, Subtitle B
‘‘(aa) the plan is accredited
by an organization meeting the
requirements described in clause
(iii); and
‘‘(bb) the standards and
process under which the plan is
accredited meet such require-
ments as are established under
subclause (II), without regard to
whether or not the time require-
ment of such subclause is satis-
fied.
‘‘(II) STANDARDS
AND
PROC-
ESS.—Not later than 180 days after
the date of the enactment of this Act,
the Secretary shall specify require-
ments for the standards and process
under which a medicaid managed care
plan is accredited by an organization
meeting the requirements of clause
(iii).
‘‘(iii) ACCREDITING ORGANIZATION.—
An accrediting organization meets the re-
quirements of this clause if the organiza-
tion —
190
Title VII, Subtitle B
‘‘(I) is a private, nonprofit orga-
nization;
‘‘(II) exists for the primary pur-
pose of accrediting managed care
plans or health care providers; and
‘‘(III) is independent of health
care providers or associations of
health care providers.
‘‘(C) REVIEW
OF
PRIMARY
CARE
CASE
MANAGEMENT
PROVIDER
CONTRACT.—Each
primary care case management provider shall
be subject to an annual external independent
review of the quality and timeliness of, and ac-
cess to, the items and services specified in the
contract entered into between the State and the
primary care case management provider under
section 1932(a)(1)(B).
‘‘(4) 
FEDERAL
MONITORING
RESPONSIBIL-
ITIES.—The Secretary shall review the external inde-
pendent reviews conducted pursuant to paragraph
(3) and shall monitor the effectiveness of the State’s
monitoring and followup activities required under
subparagraph (A) of paragraph (2). If the Secretary
determines that a State’s monitoring and followup
activities are not adequate to ensure that the re-
191
Title VII, Subtitle B
quirements of paragraph (2) are met, the Secretary
shall undertake appropriate followup activities to en-
sure that the State improves its monitoring and fol-
lowup activities.
‘‘(5) PROVIDING INFORMATION ON SERVICES.—
‘‘(A) REQUIREMENTS FOR MEDICAID MAN-
AGED CARE PLANS.—
‘‘(i) INFORMATION TO THE STATE.—
Each medicaid managed care plan shall
provide to the State (at such frequency as
the Secretary may require), complete and
timely information concerning the follow-
ing:
‘‘(I) The services that the plan
provides to (or arranges to be pro-
vided to) individuals eligible for medi-
cal assistance under the State plan
under this title.
‘‘(II) The identity, locations,
qualifications, and availability of par-
ticipating health care providers.
‘‘(III) The rights and responsibil-
ities of enrollees.
‘‘(IV) The services provided by
the plan which are subject to prior au-
192
Title VII, Subtitle B
thorization by the plan as a condition
of coverage (in accordance with para-
graph (6)(A)).
‘‘(V) The procedures available to
an enrollee and a health care provider
to appeal the failure of the plan to
cover a service.
‘‘(VI) The performance of the
plan in serving individuals eligible for
medical assistance under the State
plan under this title.
‘‘(ii) INFORMATION TO HEALTH CARE
PROVIDERS, ENROLLEES, AND POTENTIAL
ENROLLEES.—Each 
medicaid 
managed
care plan shall—
‘‘(I) upon request, make the in-
formation described in clause (i) avail-
able to participating health care pro-
viders, enrollees, and potential enroll-
ees in the plan’s service area; and
‘‘(II) provide to enrollees and po-
tential enrollees information regarding
all items and services that are avail-
able to enrollees under the contract
between the State and the plan that
193
Title VII, Subtitle B
are covered either directly or through
a method of referral and prior author-
ization.
‘‘(B) REQUIREMENTS FOR PRIMARY CARE
CASE
MANAGEMENT
PROVIDERS.—Each pri-
mary care case management provider shall—
‘‘(i) provide to the State (at such fre-
quency as the Secretary may require),
complete and timely information concern-
ing the services that the primary care case
management provider provides to (or ar-
ranges to be provided to) individuals eligi-
ble for medical assistance under the State
plan under this title;
‘‘(ii) make available to enrollees and
potential enrollees information concerning
services available to the enrollee for which
prior authorization by the primary care
case management provider is required; and
‘‘(iii) provide enrollees and potential
enrollees information regarding all items
and services that are available to enrollees
under the contract between the State and
the primary care case management pro-
vider that are covered either directly or
194
Title VII, Subtitle B
through a method of referral and prior au-
thorization.
‘‘(iv) provide assurances that such en-
tities and their professional personnel are
licensed as required by State law and
qualified to provide case management serv-
ices, through methods such as ongoing
monitoring of compliance with applicable
requirements and providing information
and technical assistance.
‘‘(C) REQUIREMENTS FOR BOTH MEDICAID
MANAGED
CARE
PLANS
AND
PRIMARY
CARE
CASE MANAGEMENT PROVIDERS.—Each eligible
managed care provider shall provide the State
with aggregate encounter data for early and
periodic screening, diagnostic, and treatment
services under section 1905(r) furnished to in-
dividuals under 21 years of age. Any such data
provided may be audited by the State and the
Secretary.
‘‘(6) TIMELINESS
OF
PAYMENT.—An eligible
managed care provider shall make payment to health
care providers for items and services which are sub-
ject to the contract under section 1931(a)(1)(B) and
which are furnished to individuals eligible for medi-
195
Title VII, Subtitle B
cal assistance under the State plan under this title
who are enrolled with the provider on a timely basis
and under the claims payment procedures described
in section 1902(a)(37)(A), unless the health care
provider and the eligible managed care provider
agree to an alternate payment schedule.
‘‘(7) ADDITIONAL
QUALITY
ASSURANCE
RE-
QUIREMENTS
FOR
MEDICAID
MANAGED
CARE
PLANS.—
‘‘(A) CONDITIONS FOR PRIOR AUTHORIZA-
TION.—A medicaid managed care plan may re-
quire the approval of medical assistance for
nonemergency services before the assistance is
furnished to an enrollee only if the system pro-
viding for such approval—
‘‘(i) provides that such decisions are
made in a timely manner, depending upon
the urgency of the situation; and
‘‘(ii) permits coverage of medically
necessary medical assistance provided to
an enrollee without prior authorization in
the event of an emergency.
‘‘(B) 
INTERNAL
GRIEVANCE
PROCE-
DURE.—Each medicaid managed care plan shall
establish an internal grievance procedure under
196
Title VII, Subtitle B
which a plan enrollee or a provider on behalf of
such an enrollee who is eligible for medical as-
sistance under the State plan under this title
may challenge the denial of coverage of or pay-
ment for such assistance.
‘‘(C) USE OF UNIQUE PHYSICIAN IDENTI-
FIER
FOR
PARTICIPATING
PHYSICIANS.—Each
medicaid managed care plan shall require each
physician providing services to enrollees eligible
for medical assistance under the State plan
under this title to have a unique identifier in
accordance with the system established under
section 1902(x).
‘‘(D) PATIENT ENCOUNTER DATA.—
‘‘(i) IN
GENERAL.—Each medicaid
managed care plan shall maintain suffi-
cient patient encounter data to identify the
health care provider who delivers services
to patients and to otherwise enable the
State plan to meet the requirements of sec-
tion 1902(a)(27). The plan shall incor-
porate such information in the mainte-
nance of patient encounter data with re-
spect to such health care provider.
197
Title VII, Subtitle B
‘‘(ii) COMPLIANCE.—A medicaid man-
aged care plan shall—
‘‘(I) submit the data maintained
under clause (i) to the State; or
‘‘(II) demonstrate to the State
that the data complies with managed
care quality assurance guidelines es-
tablished by the Secretary in accord-
ance with clause (iii).
‘‘(iii) STANDARDS.—In establishing
managed care quality assurance guidelines
under clause (ii)(II), the Secretary shall
consider—
‘‘(I) 
managed 
care 
industry
standards for—
‘‘(aa) internal quality assur-
ance; and
‘‘(bb) 
performance 
meas-
ures; and
‘‘(II) any managed care quality
standards established by the National
Association of Insurance Commis-
sioners.
(E) PAYMENTS TO HOSPITALS.—A medic-
aid managed care plan shall—
198
Title VII, Subtitle B
‘‘(i) provide the State with assurances
that payments for hospital services are rea-
sonable and adequate to meet the costs
which must be incurred by efficiently and
economically operated facilities in order to
provide such services to individuals en-
rolled with the plan under this title in con-
formity with applicable State and Federal
laws, regulations, and quality and safety
standards;
‘‘(ii) report to the State at least annu-
ally—
‘‘(I) the rates paid to hospitals
by the plan for items and services fur-
nished to such individuals,
‘‘(II) an explanation of the meth-
odology used to compute such rates,
and
‘‘(III) a comparison of such rates
with the rates used by the State to
pay for hospital services furnished to
individuals who are eligible for bene-
fits under the program established by
the State under this title but are not
199
Title VII, Subtitle B
enrolled in a medicaid managed care
plan; and
‘‘(iii) if the rates paid by the plan are
lower than the rates paid by the State (as
described in clause (ii)(III)), an expla-
nation of why the rates paid by the plan
nonetheless meet the standard described in
clause (i).
‘‘(d) DUE PROCESS REQUIREMENTS FOR ELIGIBLE
MANAGED CARE PROVIDERS.—
‘‘(1) DENIAL OF OR UNREASONABLE DELAY IN
DETERMINING COVERAGE AS GROUNDS FOR HEAR-
ING.—If an eligible managed care provider—
‘‘(A) denies coverage of or payment for
medical assistance with respect to an enrollee
who is eligible for such assistance under the
State plan under this title; or
‘‘(B) fails to make any eligibility or cov-
erage determination sought by an enrollee or, in
the case of a medicaid managed care plan, by
a participating health care provider or enrollee,
in a timely manner, depending upon the ur-
gency of the situation, the enrollee or the health
care provider furnishing such assistance to the
enrollee (as applicable) may obtain a hearing
200
Title VII, Subtitle B
before the State agency administering the State
plan under this title in accordance with section
1902(a)(3), but only, with respect to a medicaid
managed care plan, after completion of the in-
ternal grievance procedure established by the
plan under subsection (c)(6)(B).
‘‘(2) COMPLETION
OF
INTERNAL
GRIEVANCE
PROCEDURE.—Nothing in this subsection shall re-
quire completion of an internal grievance procedure
if such procedure does not exist or if the procedure
does not provide for timely review of health needs
considered by the enrollee’s health care provider to
be of an urgent nature.
‘‘(e) MISCELLANEOUS.—
‘‘(1) PROTECTING
ENROLLEES
AGAINST
THE
INSOLVENCY OF ELIGIBLE MANAGED CARE PROVID-
ERS AND AGAINST THE FAILURE OF THE STATE TO
PAY SUCH PROVIDERS.—Each eligible managed care
provider shall provide that an individual eligible for
medical assistance under the State plan under this
title who is enrolled with the provider may not be
held liable—
‘‘(A) for the debts of the eligible managed
care provider, in the event of the provider’s in-
solvency;
201
Title VII, Subtitle B
‘‘(B) for services provided to the individ-
ual—
‘‘(i) in the event of the provider fail-
ing to receive payment from the State for
such services; or
‘‘(ii) in the event of a health care pro-
vider with a contractual or other arrange-
ment with the eligible managed care pro-
vider failing to receive payment from the
State or the eligible managed care provider
for such services; or
‘‘(C) for the debts of any health care pro-
vider with a contractual or other arrangement
with the provider to provide services to the indi-
vidual, in the event of the insolvency of the
health care provider.
‘‘(2) TREATMENT OF CHILDREN WITH SPECIAL
HEALTH CARE NEEDS.—
‘‘(A) IN GENERAL.—In the case of an en-
rollee of an eligible managed care provider who
is a child with special health care needs—
‘‘(i) if any medical assistance specified
in the contract with the State is identified
in a treatment plan prepared for the en-
rollee by a program described in subpara-
202
Title VII, Subtitle B
graph (C), the eligible managed care pro-
vider shall provide (or arrange to be pro-
vided) such assistance in accordance with
the treatment plan either—
‘‘(I) by referring the enrollee to a
pediatric health care provider who is
trained and experienced in the provi-
sion of such assistance and who has a
contract with the eligible managed
care provider to provide such assist-
ance; or
‘‘(II) if appropriate services are
not available through the eligible man-
aged care provider, permitting such
enrollee to seek appropriate specialty
services from pediatric health care
providers outside of or apart from the
eligible managed care provider; and
‘‘(ii) the eligible managed care pro-
vider shall require each health care pro-
vider with whom the eligible managed care
provider has entered into an agreement to
provide medical assistance to enrollees to
furnish the medical assistance specified in
such enrollee’s treatment plan to the ex-
203
Title VII, Subtitle B
tent the health care provider is able to
carry out such treatment plan.
‘‘(B) PRIOR AUTHORIZATION.—An enrollee
referred for treatment under subparagraph
(A)(i)(I), or permitted to seek treatment out-
side of or apart from the eligible managed care
provider under subparagraph (A)(i)(II) shall be
deemed to have obtained any prior authoriza-
tion required by the provider.
‘‘(C) CHILD WITH SPECIAL HEALTH CARE
NEEDS.—For purposes of subparagraph (A), a
child with special health care needs is a child
who is receiving services under—
‘‘(i) a program administered under
part B or part H of the Individuals with
Disabilities Education Act;
‘‘(ii) a program for children with spe-
cial health care needs under title V;
‘‘(iii) a program under part B or part
D of title IV; or
‘‘(iv) any other program for children
with special health care needs identified by
the Secretary.
‘‘(3) 
PHYSICIAN
INCENTIVE
PLANS.—Each
medicaid managed care plan shall require that any
204
Title VII, Subtitle B
physician incentive plan covering physicians who are
participating in the medicaid managed care plan
shall meet the requirements of section 1876(i)(8).
‘‘(4) INCENTIVES FOR HIGH QUALITY ELIGIBLE
MANAGED CARE PROVIDERS.—The Secretary and the
State may establish a program to reward, through
public recognition, incentive payments, or enrollment
of additional individuals (or combinations of such re-
wards), eligible managed care providers that provide
the highest quality care to individuals eligible for
medical assistance under the State plan under this
title who are enrolled with such providers. For pur-
poses of section 1903(a)(7), proper expenses in-
curred by a State in carrying out such a program
shall be considered to be expenses necessary for the
proper and efficient administration of the State plan
under this title.’’.
(d) CLARIFICATION OF APPLICATION OF FFP DE-
NIAL RULES TO PAYMENTS MADE PURSUANT TO MEDIC-
AID MANAGED CARE PLANS.—Section 1903(i) of such Act
(42 U.S.C. 1396b(i)) is amended by adding at the end
the following sentence: ‘‘Paragraphs (1)(A), (1)(B), (2),
(5), and (12) shall apply with respect to items or services
furnished and amounts expended by or through an eligible
managed care provider (as defined in section 1933(a)(1))
205
Title VII, Subtitle B
in the same manner as such paragraphs apply to items
or services furnished and amounts expended directly by
the State.’’.
(e) CLARIFICATION
OF CERTIFICATION REQUIRE-
MENTS FOR PHYSICIANS PROVIDING SERVICES TO CHIL-
DREN AND PREGNANT WOMEN.—Section 1903(i)(12) of
such Act (42 U.S.C. 1396b(i)(12)) is amended —
(1) in subparagraph (A)(i), to read as follows:
‘‘(i) is certified in family practice or
pediatrics by the medical specialty board
recognized by the American Board of Med-
ical Specialties for family practice or pedi-
atrics or is certified in general practice or
pediatrics by the medical specialty board
recognized by the American Osteopathic
Association,’’;
(2) in subparagraph (B)(i), to read as follows:
‘‘(i) is certified in family practice or
obstetrics by the medical specialty board
recognized by the American Board of Med-
ical Specialties for family practice or ob-
stetrics or is certified in family practice or
obstetrics by the medical specialty board
recognized by the American Osteopathic
Association,’’; and
206
Title VII, Subtitle B
(3) in both subparagraphs (A) and (B) —
(A) by striking ‘‘or’’ at the end of clause
(v);
(B) by redesignating clause (vi) as clause
(vii); and
(C) by inserting after clause (v) the follow-
ing new clause:
‘‘(vi) delivers such services in the
emergency department of a hospital par-
ticipating in the State plan approved under
this title, or’’.
SEC. 7103. ADDITIONAL REQUIREMENTS FOR MEDICAID
MANAGED CARE PLANS.
Section 1933 of the Social Security Act, as added by
section 7102(c)(2), is amended —
(1) by redesignating subsections (d) and (e) as
subsections (e) and (f), respectively; and
(2) by inserting after subsection (c) the follow-
ing new subsection:
‘‘(d) ADDITIONAL REQUIREMENTS
FOR MEDICAID
MANAGED CARE PLANS.—
‘‘(1) DEMONSTRATION OF ADEQUATE CAPACITY
AND SERVICES.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (C), each medicaid managed care plan
207
Title VII, Subtitle B
shall provide the State and the Secretary with
adequate assurances (as determined by the Sec-
retary) that the plan, with respect to a service
area —
‘‘(i) has the capacity to serve the ex-
pected enrollment in such service area;
‘‘(ii) offers an appropriate range of
services for the population expected to be
enrolled in such service area, including
transportation services and translation
services consisting of the principal lan-
guages spoken in the service area;
‘‘(iii) maintains sufficient numbers of
providers of services included in the con-
tract with the State to ensure that services
are available to individuals receiving medi-
cal assistance and enrolled in the plan to
the same extent that such services are
available to individuals enrolled in the plan
who are not recipients of medical assist-
ance under the State plan under this title;
‘‘(iv) maintains extended hours of op-
eration with respect to primary care serv-
ices that are beyond those maintained dur-
ing a normal business day;
208
Title VII, Subtitle B
‘‘(v) provides preventive and primary
care services in locations that are readily
accessible to members of the community;
and
‘‘(vi) provides information concerning
educational, social, health, and nutritional
services offered by other programs for
which enrollees may be eligible.
‘‘(vii) complies with such other re-
quirements relating to access to care as the
Secretary or the State may impose.
‘‘(B) PROOF OF ADEQUATE PRIMARY CARE
CAPACITY AND SERVICES.—Subject to subpara-
graph (C), a medicaid managed care plan that
contracts with a reasonable number of primary
care providers (as determined by the Secretary)
and whose primary care membership includes a
reasonable number (as so determined) of the
following providers will be deemed to have satis-
fied the requirements of subparagraph (A):
‘‘(i) Rural health clinics, as defined in
section 1905(l)(1).
‘‘(ii) Federally-qualified health cen-
ters, as defined in section 1905(l)(2)(B).
209
Title VII, Subtitle B
‘‘(iii) Clinics which are eligible to re-
ceive payment for services provided under
title X of the Public Health Service Act.
‘‘(C) SUFFICIENT PROVIDERS OF SPECIAL-
IZED
SERVICES.—Notwithstanding 
subpara-
graphs (A) and (B), a medicaid managed care
plan may not be considered to have satisfied the
requirements of subparagraph (A) if the plan
does not have a sufficient number (as deter-
mined by the Secretary) of providers of special-
ized services, including perinatal and pediatric
specialty care, to ensure that such services are
available and accessible.
‘‘(2) 
WRITTEN
PROVIDER
PARTICIPATION
AGREEMENTS
FOR
CERTAIN
PROVIDERS.—Each
medicaid managed care plan that enters into a writ-
ten provider participation agreement with a provider
described in paragraph (1)(B) shall —
‘‘(A) include terms and conditions that are
no more restrictive than the terms and condi-
tions that the medicaid managed care plan in-
cludes in its agreements with other participat-
ing providers with respect to —
‘‘(i) the scope of covered services for
which payment is made to the provider;
210
Title VII, Subtitle B
‘‘(ii) the assignment of enrollees by
the plan to the provider;
‘‘(iii) the limitation on financial risk
or availability of financial incentives to the
provider;
‘‘(iv) accessibility of care;
‘‘(v) professional credentialing and
recredentialing;
‘‘(vi) licensure;
‘‘(vii) quality and utilization manage-
ment;
‘‘(viii) 
confidentiality 
of 
patient
records;
‘‘(ix) grievance procedures; and
‘‘(x) indemnification arrangements be-
tween the plans and providers; and
‘‘(B) provide for payment to the provider
on a basis that is comparable to the basis on
which other providers are paid.’’.
SEC. 7104. PREVENTING FRAUD IN MEDICAID MANAGED
CARE.
(a) IN GENERAL.—Section 1933 of the Social Secu-
rity Act, as added by section 7102(c)(2) and amended by
section 7103, is amended—
211
Title VII, Subtitle B
(1) by redesignating subsection (f) as sub-
section (g); and
(2) by inserting after subsection (e) the follow-
ing new subsection:
‘‘(f) ANTI-FRAUD PROVISIONS.—
‘‘(1) PROVISIONS
APPLICABLE
TO
ELIGIBLE
MANAGED CARE PROVIDERS.—
‘‘(A) PROHIBITING AFFILIATIONS WITH IN-
DIVIDUALS
DEBARRED
BY
FEDERAL
AGEN-
CIES.—
‘‘(i) IN GENERAL.—An eligible man-
aged care provider may not knowingly—
‘‘(I) have a person described in
clause (iii) as a director, officer, part-
ner, or person with beneficial owner-
ship of more than 5 percent of the
plan’s equity; or
‘‘(II) have an employment, con-
sulting, or other agreement with a
person described in clause (iii) for the
provision of items and services that
are significant and material to the or-
ganization’s obligations under its con-
tract with the State.
212
Title VII, Subtitle B
‘‘(ii) EFFECT OF NONCOMPLIANCE.—
If a State finds that an eligible managed
care provider is not in compliance with
subclause (I) or (II) of clause (i), the
State—
‘‘(I) shall notify the Secretary of
such noncompliance;
‘‘(II) may continue an existing
agreement with the provider unless
the Secretary (in consultation with the
Inspector General of the Department
of Health and Human Services) di-
rects otherwise; and
‘‘(III) may not renew or other-
wise extend the duration of an exist-
ing agreement with the provider un-
less the Secretary (in consultation
with the Inspector General of the De-
partment of Health and Human Serv-
ices) provides to the State and to the
Congress a written statement describ-
ing compelling reasons that exist for
renewing or extending the agreement.
213
Title VII, Subtitle B
‘‘(iii) PERSONS
DESCRIBED.—A per-
son is described in this clause if such per-
son—
‘‘(I) is debarred or suspended by
the Federal Government, pursuant to
the Federal acquisition regulation,
from Government contracting and
subcontracting;
‘‘(II) is an affiliate (within the
meaning of the Federal acquisition
regulation) of a person described in
clause (i); or
‘‘(III) is excluded from participa-
tion in any program under title XVIII
or any State health care program, as
defined in section 1128(h).
‘‘(B) RESTRICTIONS ON MARKETING.—
‘‘(i) DISTRIBUTION OF MATERIALS.—
‘‘(I) IN
GENERAL.—An eligible
managed care provider may not dis-
tribute marketing materials within
any State—
‘‘(aa) without the prior ap-
proval of the State; and
214
Title VII, Subtitle B
‘‘(bb) that contain false or
materially misleading informa-
tion.
‘‘(II) PROHIBITION.—The State
may not enter into or renew a con-
tract with an eligible managed care
provider for the provision of services
to individuals enrolled under the State
plan under this title if the State de-
termines that the provider inten-
tionally distributed false or materially
misleading information in violation of
subclause (I)(bb).
‘‘(ii) SERVICE
MARKET.—An eligible
managed care provider shall distribute
marketing materials to the entire service
area of such provider.
‘‘(iii) PROHIBITION OF TIE-INS.—An
eligible managed care provider, or any
agency of such provider, may not seek to
influence an individual’s enrollment with
the provider in conjunction with the sale of
any other insurance.
‘‘(iv) 
PROHIBITING
MARKETING
FRAUD.—Each eligible managed care pro-
215
Title VII, Subtitle B
vider shall comply with such procedures
and conditions as the Secretary prescribes
in order to ensure that, before an individ-
ual is enrolled with the provider, the indi-
vidual is provided accurate and sufficient
information to make an informed decision
whether or not to enroll.
‘‘(2) PROVISIONS APPLICABLE ONLY TO MEDIC-
AID MANAGED CARE PLANS.—
‘‘(A) STATE CONFLICT-OF-INTEREST SAFE-
GUARDS IN MEDICAID RISK CONTRACTING.—A
medicaid managed care plan may not enter into
a contract with any State under section
1932(a)(1)(B) unless the State has in effect
conflict-of-interest safeguards with respect to
officers and employees of the State with respon-
sibilities relating to contracts with such plans or
to the default enrollment process described in
section 1932(a)(1)(D)(iv) that are at least as
effective as the Federal safeguards provided
under section 27 of the Office of Federal Pro-
curement Policy Act (41 U.S.C. 423), against
conflicts of interest that apply with respect to
Federal procurement officials with comparable
responsibilities with respect to such contracts.
216
Title VII, Subtitle B
‘‘(B) REQUIRING DISCLOSURE OF FINAN-
CIAL
INFORMATION.—In addition to any re-
quirements 
applicable 
under 
section
1902(a)(27) or 1902(a)(35), a medicaid man-
aged care plan shall—
‘‘(i) report to the State (and to the
Secretary upon the Secretary’s request)
such financial information as the State or
the Secretary may require to demonstrate
that—
‘‘(I) the plan has the ability to
bear the risk of potential financial
losses and otherwise has a fiscally
sound operation;
‘‘(II) the plan uses the funds
paid to it by the State and the Sec-
retary for activities consistent with
the requirements of this title and the
contract between the State and plan;
and
‘‘(III) the plan does not place an
individual physician, physician group,
or other health care provider at sub-
stantial risk (as determined by the
Secretary) for services not provided by
217
Title VII, Subtitle B
such physician, group, or health care
provider, by providing adequate pro-
tection (as determined by the Sec-
retary) to limit the liability of such
physician, group, or health care pro-
vider, through measures such as stop
loss insurance or appropriate risk cor-
ridors;
‘‘(ii) agree that the Secretary and the
State (or any person or organization des-
ignated by either) shall have the right to
audit and inspect any books and records of
the plan (and of any subcontractor) relat-
ing to the information reported pursuant
to clause (i) and any information required
to be furnished under section paragraphs
(27) or (35) of section 1902(a);
‘‘(iii) make available to the Secretary
and the State a description of each trans-
action described in subparagraphs (A)
through (C) of section 1318(a)(3) of the
Public Health Service Act between the
plan and a party in interest (as defined in
section 1318(b) of such Act); and
218
Title VII, Subtitle B
‘‘(iv) agree to make available to its
enrollees upon reasonable request —
‘‘(I) the information reported
pursuant to clause (i); and
‘‘(II) the information required to
be disclosed under sections 1124 and
1126.
‘‘(C) ADEQUATE PROVISION AGAINST RISK
OF INSOLVENCY.—
‘‘(i) 
ESTABLISHMENT
OF
STAND-
ARDS.—The 
Secretary 
shall 
establish
standards, including appropriate equity
standards, under which each medicaid
managed care plan shall make adequate
provision against the risk of insolvency.
‘‘(ii) 
CONSIDERATION
OF
OTHER
STANDARDS.—In establishing the stand-
ards described in clause (i), the Secretary
shall consider solvency standards applica-
ble to eligible organizations with a risk-
sharing contract under section 1876.
(iii) MODEL
CONTRACT
ON
SOL-
VENCY.—At the earliest practicable time
after the date of enactment of this section,
the Secretary shall issue guidelines and
219
Title VII, Subtitle B
regulations concerning solvency standards
for risk contracting entities and sub-
contractors of such risk contracting enti-
ties. Such guidelines and regulations shall
take into account characteristics that may
differ among risk contracting entities in-
cluding whether such an entity is at risk
for inpatient hospital services.
‘‘(D) REQUIRING REPORT ON NET EARN-
INGS AND ADDITIONAL BENEFITS.—Each med-
icaid managed care plan shall submit a report
to the State and the Secretary not later than
12 months after the close of a contract year
containing —
‘‘(i) the most recent audited financial
statement of the plan’s net earnings, in ac-
cordance with guidelines established by the
Secretary in consultation with the States,
and consistent with generally accepted ac-
counting principles; and
‘‘(ii) a description of any benefits that
are in addition to the benefits required to
be provided under the contract that were
provided during the contract year to mem-
bers enrolled with the plan and entitled to
220
Title VII, Subtitle B
medical assistance under the State plan
under this title.’’.
SEC. 7105. ASSURING ADEQUACY OF PAYMENTS TO MEDIC-
AID MANAGED CARE PLANS AND PROVIDERS.
Title XIX of the Social Security Act, as amended by
sections 7001, 7101(a), and 7102(c), is further amend-
ed—
(1) by redesignating section 1934 as section
1935; and
(2) by inserting after section 1933 the following
new section:
‘‘ASSURING ADEQUACY OF PAYMENTS TO MEDICAID
MANAGED CARE PLANS AND PROVIDERS
‘‘SEC. 1934. As a condition of approval of a State
plan under this title, a State shall—
‘‘(1) find, determine, and make assurances sat-
isfactory to the Secretary that—
‘‘(A) the rates it pays medicaid managed
care plans for individuals eligible under the
State plan are reasonable and adequate to as-
sure access to services meeting professionally
recognized quality standards, taking into ac-
count—
‘‘(i) the items and services to which
the rate applies,
‘‘(ii) the eligible population, and
221
Title VII, Subtitle B
‘‘(iii) the rate the State pays providers
for such items and services; and
‘‘(B) the methodology used to adjust the
rate adequately reflects the varying risks associ-
ated with individuals actually enrolling in each
medicaid managed care plan; and
‘‘(2) report to the Secretary, at least annually,
on—
‘‘(A) the rates the States pays to medicaid
managed care plans, and
‘‘(B) the rates medicaid managed care
plans pay for hospital services (and such other
information as medicaid managed care plans
are required to submit to the State pursuant to
section 1933(c)(5)(E).’’.
SEC. 7106. SANCTIONS FOR NONCOMPLIANCE BY ELIGIBLE
MANAGED CARE PROVIDERS.
(a) SANCTIONS DESCRIBED.—Title XIX of such Act
(42 U.S.C. 1396 et seq.), as previously amended, is fur-
ther amended —
(1) by redesignating section 1934 as section
1935; and
(2) by inserting after section 1934 the following
new section:
222
Title VII, Subtitle B
‘‘SANCTIONS FOR NONCOMPLIANCE BY ELIGIBLE
MANAGED CARE PROVIDERS
‘‘SEC. 1935. (a) USE OF INTERMEDIATE SANCTIONS
BY
THE STATE TO ENFORCE REQUIREMENTS.—Each
State shall establish intermediate sanctions, which may in-
clude any of the types described in subsection (b) other
than the termination of a contract with an eligible man-
aged care provider, which the State may impose against
an eligible managed care provider with a contract under
section 1932(a)(1)(B) if the provider —
‘‘(1) fails substantially to provide medically nec-
essary items and services that are required (under
law or under such provider’s contract with the
State) to be provided to an enrollee covered under
the contract, if the failure has adversely affected (or
has a substantial likelihood of adversely affecting)
the enrollee;
‘‘(2) imposes premiums on enrollees in excess of
the premiums permitted under this title;
‘‘(3) acts to discriminate among enrollees on
the basis of their health status or requirements for
health care services, including expulsion or refusal to
reenroll an individual, except as permitted by sec-
tions 1932 and 1933, or engaging in any practice
that would reasonably be expected to have the effect
223
Title VII, Subtitle B
of denying or discouraging enrollment with the pro-
vider by eligible individuals whose medical condition
or history indicates a need for substantial future
medical services;
‘‘(4) misrepresents or falsifies information that
is furnished
‘‘(A) to the Secretary or the State under
section 1932 or 1933; or
‘‘(B) to an enrollee, potential enrollee, or a
health care provider under such sections; or
‘‘(5) fails to comply with the requirements of
section 1876(i)(8).
‘‘(b) INTERMEDIATE SANCTIONS.—The sanctions de-
scribed in this subsection are as follows:
‘‘(1) Civil money penalties as follows:
‘‘(A) Except as provided in subparagraph
(B), (C), or (D), not more than $25,000 for
each determination under subsection (a).
‘‘(B) With respect to a determination
under paragraph (3) or (4)(A) of subsection
(a), not more than $100,000 for each such de-
termination.
‘‘(C) With respect to a determination
under subsection (a)(2), double the excess
amount charged in violation of such subsection
224
Title VII, Subtitle B
(and the excess amount charged shall be de-
ducted from the penalty and returned to the in-
dividual concerned).
‘‘(D) Subject to subparagraph (B), with
respect to a determination under subsection
(a)(3), $15,000 for each individual not enrolled
as a result of a practice described in such sub-
section.
‘‘(2) The appointment of temporary manage-
ment to oversee the operation of the eligible man-
aged care provider and to assure the health of the
provider’s enrollees, if there is a need for temporary
management while—
‘‘(A) there is an orderly termination or re-
organization of the eligible managed care pro-
vider; or
‘‘(B) improvements are made to remedy
the violations found under subsection (a), ex-
cept that temporary management under this
paragraph may not be terminated until the
State has determined that the eligible managed
care provider has the capability to ensure that
the violations shall not recur.
‘‘(3) Permitting individuals enrolled with the el-
igible managed care provider to terminate enroll-
225
Title VII, Subtitle B
ment without cause, and notifying such individuals
of such right to terminate enrollment.
‘‘(c) TREATMENT OF CHRONIC SUBSTANDARD PRO-
VIDERS.—In the case of an eligible managed care provider
which has repeatedly failed to meet the requirements of
section 1932 or 1933, the State shall (regardless of what
other sanctions are provided) impose the sanctions de-
scribed in paragraphs (2) and (3) of subsection (b).
‘‘(d) AUTHORITY TO TERMINATE CONTRACT.—In
the case of an eligible managed care provider which has
failed to meet the requirements of section 1932 or 1933,
the State shall have the authority to terminate its contract
with such provider under section 1932(a)(1)(B) and to en-
roll such provider’s enrollees with other eligible managed
care providers (or to permit such enrollees to receive medi-
cal assistance under the State plan under this title other
than through an eligible managed care provider).
‘‘(e) AVAILABILITY
OF SANCTIONS
TO
THE SEC-
RETARY.—
‘‘(1) INTERMEDIATE SANCTIONS.—In addition
to the sanctions described in paragraph (2) and any
other sanctions available under law, the Secretary
may provide for any of the sanctions described in
subsection (b) if the Secretary determines that—
227
Title VII, Subtitle B
rolled with an eligible managed care provider which
is the subject of a hearing to terminate the provid-
er’s contract with the State of the hearing and that
the enrollees may immediately disenroll with the pro-
vider for cause.
‘‘(3) OTHER PROTECTIONS FOR ELIGIBLE MAN-
AGED
CARE
PROVIDERS
AGAINST
SANCTIONS
IM-
POSED
BY
STATE.—Before imposing any sanction
against an eligible managed care provider other than
termination of the provider’s contract, the State
shall provide the provider with notice and such other
due process protections as the State may provide,
except that a State may not provide an eligible man-
aged care provider with a pretermination hearing be-
fore imposing the sanction described in subsection
(b)(2).
‘‘(4) IMPOSITION
OF
CIVIL
MONETARY
PEN-
ALTIES BY SECRETARY.—The provisions of section
1128A (other than subsections (a) and (b)) shall
apply with respect to a civil money penalty imposed
by the Secretary under subsection (b)(1) in the same
manner as such provisions apply to a penalty or pro-
ceeding under section 1128A.’’.
(b) CONFORMING AMENDMENT RELATING TO TERMI-
NATION
OF
ENROLLMENT
FOR
CAUSE.—Section
228
Title VII, Subtitle B
1933(b)(2)(B) of the Social Security Act, as added by this
part, is amended by inserting after ‘‘coercion’’ the follow-
ing: ‘‘, or pursuant to the imposition against the eligible
managed care provider of the sanction described in section
1935(b)(3),’’.
SEC. 7107. REPORT ON PUBLIC HEALTH SERVICES.
(a) IN GENERAL.—Not later than January 1, 1994,
the Secretary of Health and Human Services (in this sub-
title referred to as the ‘‘Secretary’’) shall report to the
Committee on Finance of the Senate and the Committee
on Commerce of the House of Representatives on the ef-
fect of risk contracting entities (as defined in section
1932(a)(3) of the Social Security Act) and primary care
case management entities (as defined in section
1932(a)(1) of such Act) on the delivery of and payment
for the services listed in subsection (f)(2)(C)(ii) of section
1932 of such Act.
(b) CONTENTS OF REPORT.—The report referred to
in subsection (a) shall include—
(1) information on the extent to which enrollees
with risk contracting entities and primary care case
management programs seek services at local health
departments, public hospitals, and other facilities
that provide care without regard to a patient’s abil-
ity to pay;
229
Title VII, Subtitle B
(2) information on the extent to which the fa-
cilities described in paragraph (1) provide services to
enrollees with risk contracting entities and primary
care case management programs without receiving
payment;
(3) information on the effectiveness of systems
implemented by facilities described in paragraph (1)
for educating such enrollees on services that are
available through the risk contracting entities or pri-
mary care case management programs with which
such enrollees are enrolled;
(4) to the extent possible, identification of the
types of services most frequently sought by such en-
rollees at such facilities; and
(5) recommendations about how to ensure the
timely delivery of the services listed in subsection
(f)(2)(C)(ii) of section 1931 of the Social Security
Act to enrollees of risk contracting entities and pri-
mary care case management entities and how to en-
sure that local health departments, public hospitals,
and other facilities are adequately compensated for
the provision of such services to such enrollees.
SEC. 7108. REPORT ON PAYMENTS TO HOSPITALS.
(a) IN GENERAL.—Not later than October 1 of each
year, beginning with October 1, 1996, the Secretary and
230
Title VII, Subtitle B
the Comptroller General shall analyze and submit a report
to the Committee on Finance of the Senate and the Com-
mittee on Commerce of the House of Representatives on
rates paid for hospital services under coordinated care pro-
grams described in section 1932 of the Social Security
Act.
(b) CONTENTS OF REPORT.—The information in the
report described in subsection (a) shall—
(1) be organized by State, type of hospital, type
of service, and
(2) include a comparison of rates paid for hos-
pital services under coordinated care programs with
rates paid for hospital services furnished to individ-
uals who are entitled to benefits under a State plan
under title XIX of the Social Security Act and are
not enrolled in such coordinated care programs.
(c) REPORTS BY STATES.—Each State shall transmit
to the Secretary, at such time and in such manner as the
Secretary determines appropriate, the information on hos-
pital rates submitted to such State under section
1932(b)(3)(P) of such Act.
SEC. 7109. CONFORMING AMENDMENTS.
(a) EXCLUSION OF CERTAIN INDIVIDUALS AND EN-
TITIES
FROM
PARTICIPATION
IN
PROGRAM.—Section