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(9) ‘‘Processing and treatment cost’’ means any
activity following mining including but not limited
to, crushing, milling, leaching, flotation, grinding,
solvent extraction, electrolytic deposition, roasting,
calcining thermal or electric smelting, refining, treat-
ment effecting a chemical change, or product fabrica-
tion. Direct and indirect cost such as maintenance,
depreciation, environmental, labor and consumable
cost associated with these activities shall be included
in this definition.
(10) ‘‘Secretary’’ means the Secretary of the In-
terior.
SEC. 5702. CLAIM MAINTENANCE REQUIREMENTS.
(a) MAINTENANCE FEE.—After the date of enactment
of this Subtitle, the owner of each unpatented mining claim
or site located pursuant to the general mining laws, whether
located before or after the enactment of this Subtitle, shall
pay in advance to the Secretary annually on or before Sep-
tember 1, and until a patent has been issued therefor, a
maintenance fee of $100 per mining claim or site. The
owner of each unpatented mining claim or site located after
the date of enactment of this Subtitle pursuant to the gen-
eral mining laws shall pay to the Secretary, at the time
the copy of the notice or certificate of location is filed with
the Bureau of Land Management pursuant to section 314(b)
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of the Federal Land Policy and Management Act of 1976
(43 U.S.C. 1744(b)), in addition to the location fee required
under subsection (c) of this section, an initial maintenance
fee of $100 per mining claim or site for the assessment year
which includes the date of location of such mining claim
or site. If a mining claim or site is located within 90 days
before September 1 and the copy of the notice or certificate
of location is timely filed with the Bureau of Land Manage-
ment under subsection 314(b) of the Federal Land Policy
and Management Act of 1976 after September 1, the annual
maintenance fee payable under the first sentence of this sub-
section shall be paid at the time such notice or certificate
of location is filed, in addition to the location fee and the
initial $100 maintenance fee. No maintenance fee shall be
required if the fee is waived or the owner of the mining
claim or site is exempt as provided in section 5703 of this
Subtitle.
(b) MAINTENANCE FEE STATEMENT.—Each payment
under subsection (a) of this section shall be accompanied
by a statement which reasonably identifies the mining
claim or site for which the maintenance fee is being paid.
Such statement may include the name of the mining claim
or site, the serial number assigned by the Secretary to such
mining claim or site, the description of the book and page
in which the notice or certificate of location for such mining
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claim or site is recorded under State law, any combination
of the foregoing, or any other information that reasonably
identifies the mining claim or site for which the mainte-
nance fee is being paid. The statement required under this
subsection shall be in lieu of any annual filing requirements
for mining claims or sites, under any other Federal law,
but shall not supersede any such filing requirement under
applicable State law.
(c) LOCATION FEE.—The owner of each unpatented
mining claim or site located on or after the date of enact-
ment of this Subtitle pursuant to the general mining laws
shall pay to the Secretary, at the time the notice or certifi-
cate of location is filed with the Bureau of Land Manage-
ment pursuant to subsection 314(b) of the Federal Land
Policy and Management Act of 1976 (43 U.S.C. 1744(b)),
a location fee of $25.00 per claim.
(d) CREDIT AGAINST ROYALTY.—The annual claim
maintenance fee paid for any unpatented mining claim or
site on or before September 1 of any year shall be credited
against the amount of royalty required to be paid under
Section 5705 for such mining claim or site during the fol-
lowing assessment year.
(e) FAILURE TO COMPLY.—The failure of the owner
of the mining claim or site to pay the claim maintenance
fee or location fee for a mining claim or site on or before
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the date such payment is due under subsection (a) or sub-
section (c) of this section shall constitute forfeiture of the
mining claim or site and such mining claim or site shall
be null and void, effective as of the day after the date such
payment is due: Provided, however, That, if such mainte-
nance fee or location fee is paid or tendered on or before
the 30th day after such payment was due under subsection
(a) or subsection (c) of this section, such mining claim or
site shall not be forfeited or null or void, and such mainte-
nance fee or location fee shall be deemed timely paid.
(f) REPEAL OF OMNIBUS BUDGET RECONCILIATION
ACT FEE REQUIREMENTS.—Sections 10101 through 10106
of the Omnibus Budget Reconciliation Act of 1993 (30
U.S.C. 28f through 28k) are hereby repealed.
(g) AMENDMENT
OF
FLPMA FILING
REQUIRE-
MENTS.—Section 314 (a) of the Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1744 (a)) is hereby
repealed.
SEC. 5703. WAIVER AND EXEMPTION.
(a) WAIVER OF FEE.—The maintenance fee provided
for in subsection 5702(a) shall be waived for the owner of
a mining claim or site who certifies in writing to the Sec-
retary, on or before the date the payment is due, that, as
of the date such payment is due, such owner and all related
persons own not more than twenty-five unpatented mining
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claims or sites. Any owner of a mining claim or site that
is not required to pay a maintenance fee under this sub-
section shall continue to be subject to the assessment work
requirements of the general mining laws or of any other
State or Federal law, subject to any suspension or deferment
of annual assessment work provided by law, for the assess-
ment year following the filing of the certification required
by this subsection.
(b) RELATED PERSONS.—As used in subsection (a),
the term ‘‘related persons’’ includes—
(1) the spouse and dependent children (as de-
fined in section 152 of the Internal Revenue Code of
1986), of the owner of the mining claim or site; and
(2) a person controlled by, controlling, or under
common control with the owner of the mining claim
or site.
(c) EXEMPTION.—The owner of any mining claim or
site who certifies in writing to the Secretary on or before
the first day of any assessment year that access to such min-
ing claim or site was denied or impeded during the prior
assessment year by the action or inaction of any local,
State, or Federal Governmental officer, agency, or court, or
by any Indian tribal authority, shall be exempt from the
maintenance fee requirement of subsection (a) of section
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5702 for the assessment year following the filing of the cer-
tification.
SEC. 5704. PATENTS.
(a) IN GENERAL.—Except as provided in subsection
(c), any patent issued by the United States under the gen-
eral mining laws after the date of enactment of this Subtitle
shall be issued only—
(1) upon payment by the owner of the claim of
the fair market value for the interest in the land
owned by the United States exclusive of and without
regard to the mineral deposits in the land or the use
of the land for mineral activities; and
(2) subject to reservation by the United States of
the royalty provided in section 5705.
(b) RIGHT OF REENTRY.—
(1) Except as provided in subsection 5704(c),
and notwithstanding any other provision of law, a
patent issued pursuant to this section shall be subject
to a right of reentry by the United States if the pat-
ented estate is used by the patentee for any purpose
other than for conducting mineral activities in good
faith and such unauthorized use is not discontinued
as provided in this subsection.
(2) If the surface of the patented estate is used
by the patentee, or any subsequent owners, for any
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purpose other than for conducting mineral activities
in good faith, the Secretary shall serve on all owners
of interests in such patented estate, in the manner
prescribed for service of a summons and complaint
under the Federal Rules of Civil Procedure, notice
specifying such unauthorized use and providing not
more than 90 days in which such unauthorized use
must be terminated. The giving of such notice shall
constitute final agency action appealable by any
owner of an interest in such patented estate. The Sec-
retary may exercise the right of reentry as provided
in paragraph (3) of this subsection if such unauthor-
ized use has not been terminated in the time provided
in this paragraph, and only after all appeal rights
have expired and any appeals of such notice have
been finally determined.
(3) The Secretary may exercise the right of the
United States to reenter such patented estate by filing
a declaration of reentry in the office of the Bureau of
Land Management designated by the Secretary and
recording such declaration where the notice or certifi-
cate of location for the patented claim or site is re-
corded under State law. Upon the filing and record-
ing of such declaration, all right, title and interest in
such patented estate shall revert to the United States.
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Lands and interests in lands for which the United
States exercises its right of reentry under this section
shall remain open to the location of mining claims
and mill sites, unless withdrawn under other applica-
ble law.
(c) PATENT TRANSITION.—Notwithstanding any other
provision of law, the requirements of this subtitle (except
the payment of maintenance and location fees in accordance
with sections 5702 and 5703) shall not apply to those pat-
ent applications pending at the Department of the Interior
as of September 30, 1995. Such patents shall be issued
under or subject to the general mining laws in effect prior
to the date of enactment of this subtitle.
SEC. 5705. ROYALTY.
(a) RESERVATION OF ROYALTY.—
(1) IN GENERAL.—Production of locatable min-
erals (including associated minerals) from any
unpatented mining claim (other than those from Fed-
eral lands to which subsection 5704(c) applies) or any
mining claim patented under subsection 5704(a), in-
cluding mineral concentrates and products derived
from locatable minerals, shall be subject to the pay-
ment of a royalty of 2.5 percent on the Net Smelter
Return of all ores, minerals, metals, and materials
mined and removed and sold.
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(2) WAIVER.—If the Secretary determines that
the Secretary’s cost of accounting for and collecting a
royalty for any mineral exceeds or is likely to exceed
the amount of royalty to be collected, the Secretary
shall waive such royalty. The obligation to pay royal-
ties hereunder shall accrue only upon the sale of
locatable minerals or mineral products produced from
a mining claim subject to such royalty, and not upon
the stockpiling of the same for future processing.
(3) EXEMPTION.—Any mine with an annual
Revenues Received of less than $500,000 shall be ex-
empt from the requirement to pay a royalty under
this section.
(4) DEFINITION.—
(A) ‘‘Net Smelter Return’’ means the ‘‘Reve-
nues Received’’ for such ores, minerals, metals or
materials, less the ‘‘Allowable Deductions’’ for
any calendar year.
(B) ‘‘Revenues Received’’ means the pro-
ceeds from the sale of ores mined from the claims
or patents before subtracting the ‘‘Allowable De-
ductions’’, or, in the case of sales of beneficiated
products from locatable minerals such as cath-
ode, anode or copper rod or wire, or other prod-
ucts fabricated from the locatable minerals, the
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gross income from mining derived from the first
commercially marketable product determined in
the same manner as under Section 613 of the In-
ternal Revenue Code, before subtracting the ‘‘Al-
lowable Deductions.’’ Sales or transfers of ores to
affiliates shall be valued at the fair market value
of the products sold or transferred. Without lim-
iting the foregoing, the profits or losses incurred
in connection with forward sales, futures or com-
modity options trading, metal loans, or any
other price hedging or speculative activity or ar-
rangement shall not be included in Revenues Re-
ceived.
(C) ‘‘Allowable Deductions’’ means the fol-
lowing costs and expenses actually incurred or
paid to third parties by the royalty payor: proc-
essing and treatment cost, costs for all transpor-
tation and insurance for ores or products pro-
duced from ores mined from the claim, group of
claims or patents comprising an operation, be-
tween the mine and processing facilities, from
one processing facility to another, and from
processing facilities to the point of delivery of
said ores or products; assaying charges, umpire
charges, independent representative charges; all
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charges by purchasers of said ores or products;
all taxes (except income taxes) measured by or
valued upon production.
(5) REVENUES
RECEIVED.—All Revenues Re-
ceived and Allowable Deductions shall be determined
in accordance with generally accepted accounting
principles and practices consistently applied. Reve-
nues Received and Allowable Deductions shall be de-
termined by the accrual method.
(6) ALLOWABLE DEDUCTIONS.—Where any Al-
lowable Deductions are incurred in conjunction with
like costs for mineral products from other properties
controlled by the payor such costs shall be fairly allo-
cated and apportioned in accordance with generally
accepted practices in the mining industry.
(7) COMMINGLING.—The payor shall have the
right to commingle ore and minerals from the claim,
group of claims, or patent comprising an operation,
with ore from other lands and properties: Provided,
however, That the payor shall calculate from rep-
resentative samples the average grade of the ore before
commingling. If concentrates are produced from the
commingled ores, the payor shall calculate from rep-
resentative samples calculating the average grade of
the ore, and calculating average recovery percentages
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the payor shall use procedures accepted in the mining
and metallurgical industry suitable for the type of
mining and processing activity being conducted.
(8) EFFECTIVE DATE.—
(A) IN
GENERAL.—The royalty required
under this section shall take effect with respect to
production on or after the first day of the first
month following the date of enactment of this
subtitle.
(B) PHASE-IN.—The royalty payments re-
quired under this section shall be reduced—
(i) by 66 2/3 percent for the first 12
months following the date of enactment of
this subtitle for which royalties are due on
production pursuant to this subtitle; and
(ii) by 33 1/3 percent for the second 12
months that royalties are due on production
pursuant to this subtitle.
(C) TIME FOR PAYMENT.—Any royalty pay-
ment attributable to production during the first
15 calendar months after the date of enactment
of this subtitle, after any reduction under para-
graph (B), shall be due on the date that is 12
months after the date of enactment of this sub-
title.
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(D) NO MARKETABLE QUANTITY PRIOR TO
DATE OF ENACTMENT.—For a claim, group of
claims, or patents comprising an operation that
has not produced a marketable quantity prior to
the date of enactment of this subtitle, the royalty
payments required pursuant to this section shall
be reduced—
(i) by 66 2/3 percent for the first 12
months following the date of enactment of
this subtitle for which royalties are due on
production pursuant to this subtitle; and
(ii) by 33 1/3 percent for the second 12
months that royalties are due on production
pursuant to this subtitle.
(9) ROYALTY REDUCTION FOR MARGINAL OPER-
ATIONS.—
(A) APPLICATION.—A person that is re-
quired to make a royalty payment under this
section may file for a reduction or waiver of the
royalty by demonstrating that payment of the
royalty would preclude recovery of costs of pro-
duction, including invested capital, for a claim,
group of claims or patents comprising an oper-
ation for the remaining reasonable life of the op-
eration: Provided, That the Secretary shall not
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(III) the projected cost of reduc-
tion, beneficiation, refining and sale of
the locatable mineral;
(IV) the projected cost of market-
ing and delivering the locatable min-
eral and the conversion of the locatable
mineral into money;
(V) the projected cost of mainte-
nance and repairs of all machinery,
equipment, apparatus, and facilities
used in the mine; all crushing, milling,
leaching, refining, smelting, and reduc-
tion works, plants, and facilities; and
all facilities and equipment for trans-
portation;
(VI) the projected cost for support
personnel and support services at the
mine site, including without limita-
tion, accounting, assaying, drafting,
and mapping, computer services, sur-
veying, housing, camp and office ex-
penses, safety and security;
(VII) the projected cost of engi-
neering, sampling, and assaying per-
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taining to development and produc-
tion;
(VIII) the projected cost of per-
mitting, reclamation, environmental
compliance and monitoring;
(IX) the projected cost of fire and
other insurance on the machinery,
equipment, apparatus, works, plants
and facilities mentioned in subclause
(B)(ii)(V);
(X) depreciation of the original
capitalized cost of the machinery,
equipment, apparatus, works, plants,
and 
facilities 
listed 
in 
subclause
(B)(ii)(V), considering the probable life
of the property in computing the an-
nual depreciation charge;
(XI) all money expended for pre-
miums for industrial insurance, and
the owner-paid cost of hospital and
medical attention and accident benefits
and group insurance for all employees
engaged in the production or process-
ing of locatable minerals;
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(XII) all money paid as contribu-
tions or payments under State unem-
ployment compensation law, all money
paid as contributions under the Fed-
eral Social Security Act, and all
money paid to State government in
real property taxes measured or levied
on production, or Federal excise tax
payments and payments as fees or
charges for use of the Federal lands
from which the locatable minerals are
produced; and
(XIII) the projected cost of devel-
opmental work in or about the mine or
upon a group of mines when operated
as a unit.
(C) For purposes of the annual depreciation
charge under paragraph (B)(ii)X)—
(i) Any expenditure not otherwise de-
scribed in this clause which is not deduct-
ible in the year paid or incurred pursuant
to the Internal Revenue Code of 1986, and
which is:
(I) attributable to the direct ac-
quisition of mining claims purchased
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separately or as part of a group of as-
sets, or
(II) attributable to the indirect
acquisition of mining property or min-
ing claims by reason of being a portion
of the consideration for an interest in
a corporation, partnership or trust (in
connection with an ownership change
of such entity determined under the
principles of Section 382(g) of the In-
ternal Revenue Code of 1986) allocable
to such property or claims of such en-
tity, shall be allowable as a deprecia-
tion deduction to the purchaser in the
case of an expenditure described in (I)
or to the acquired corporation, part-
nership or trust in the case of an ex-
penditure described in (II), ratably
over a period based on the probable life
of the property, beginning with the
taxable year in which such expenditure
was made.
(ii) The deduction allowed for costs at-
tributable to mining property or claims is
available only at the election of the pur-
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chaser in the case of expenditures described
in (i)(I), or at the election of both the pur-
chaser and acquired corporation, partner-
ship or trust in the case of expenditures de-
scribed in (i)(II), and is in lieu of any
other deduction otherwise allowable under
this section with respect to such expendi-
ture.
(D) If the Costs of Production for the oper-
ation exceed the Projected Revenues, the Sec-
retary shall waive in full the royalty obligation.
If the Projected Revenues exceed the Costs of Pro-
duction by less than the full royalty obligation
under subsection (a), the Secretary shall reduce
the royalty rate to a level allowing the recovery
of the Costs of Production, including invested
capital, over the remaining reasonable life of the
operation.
(10) SPLIT ESTATES.—For circumstances where
a claim, group of claims or patent is subject to this
section but does not comprise the entirety of a mine,
the Annual Revenues and Costs of Production shall be
allocated for royalty purposes in proportion to the
value of production recovered from the claim, group
of claims or patent.
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(11) JUDICIAL REVIEW.—A determination by the
Secretary under paragraph (9) shall be judicially
reviewable under section 702 of title 5, United States
Code, only for actions filed within 180 days of the
Secretary’s determination.
(12) ANNUAL FILING OF DATA.—If a reduction
in royalty is provided under this paragraph, the roy-
alty payor shall file cost and revenue data with the
Secretary annually during the period of royalty
waiver or reduction.
(b) DUTIES OF CLAIM HOLDERS, OPERATORS AND
TRANSPORTERS.—A person that is required to make a roy-
alty payment under this section shall make quarterly esti-
mates of the royalty obligation and shall make the payment
to the United States annually in such manner as the Sec-
retary of the Interior may by rule prescribe. The owner or
co-owners of a mining claim shall be liable for royalty on
locatable minerals produced and sold during the period of
ownership to the extent of the interest in such claim owned.
As used in this subsection, ‘‘owner’’ or ‘‘co-owner’’ shall
mean the person or persons owning the right to mine
locatable minerals from such claim and receiving the reve-
nues of sale. Any person who makes any royalty payment
attributable to the interest of the owner or co-owners liable
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therefor shall not become liable to the United States for such
royalty as a result.
(c) MANNER OF PAYMENT.—
(1) Each royalty payment or adjustment shall be
accompanied by a statement containing:
(A) the name and Bureau of Land Manage-
ment serial number of the mining claim or
claims from which ores, concentrates, solutions
or beneficiated products of locatable minerals
subject to the royalty required in this section
were produced and sold for the period covered by
such payment or adjustment;
(B) the estimated (or actual, if determined)
quantity of such ore, concentrates, solutions or
beneficiated or fabricated products produced and
sold from such mining claim or claims for such
period;
(C) the estimated (or actual, if determined)
Gross Yield from the production and sale of such
ore, concentrates, solutions or beneficiated prod-
ucts for such period;
(D) the estimated (or actual, if determined)
Net Smelter Return from the production and sale
of 
such 
ores, 
concentrates, 
solutions 
or
beneficiated products for such period, including
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an itemization of the applicable deductions de-
scribed in paragraph 20(a)(4)(A); and
(E) the estimated (or actual, if determined)
royalty due to the United States, or adjustment
due to the United States or such owner or co-
owners, for such period.
(2) In lieu of receiving a refund under subsection
(e), the owner or co-owners may elect to apply any
adjustment due to such owner or co-owners as an off-
set against royalties due from such owner or co-own-
ers to the United States under this Subtitle, regardless
of whether such royalties are due for production and
sale from the same mining claim or claims.
(d) RECORDKEEPING
AND
REPORTING
REQUIRE-
MENTS.—
(1) An owner, operator, or other person directly
involved in the conduct of mineral activities, trans-
portation, purchase, or sale of locatable minerals, con-
centrates, or products derived therefrom, subject to the
royalty required in this section, through the point of
royalty computation, shall establish and maintain
any records, make any reports, and provide any in-
formation that the Secretary may reasonably require
for the purposes of implementing this section or deter-
mining compliance with regulations or orders under
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this section. Upon the request of the Secretary when
conducting an audit or investigation pursuant to sub-
section (f), the appropriate records, reports, or infor-
mation which may be required by this section shall
be made available for inspection and duplication by
the Secretary.
(2) Records required by the Secretary under this
section shall be maintained for three years after the
records are generated unless the Secretary notifies the
record holder that he or she has initiated an audit or
investigation specifically identifying and involving
such records and that such records must be main-
tained for a longer period. When an audit or inves-
tigation is under way, such records shall be main-
tained until the earlier of the date that the Secretary
releases the record holder of the obligation to main-
tain such records or the date that the limitations pe-
riod applicable to such audit or investigation under
subsection (f) expires.
(e) INTEREST ASSESSMENTS.—In any case in which
royalty payments are not received by the Secretary on the
date that such payments are due, or when such payments
are less than the amount due, the Secretary shall charge
interest on such late payments computed at the rate pub-
lished by the Department of the Treasury as the ‘‘Treasury
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Current Value of Funds Rate.’’ In the case of an
underpayment or partial payment, interest shall be com-
puted and charged only on the amount of the deficiency
and not on the total amount, and only for the number of
days such payment is late. No other late payment or
underpayment charge or penalty shall be charged. In any
case in which royalty payments are made in excess of the
amount due, or amounts are held by the Secretary pending
the outcome of any appeal in which the Secretary does not
prevail, the Secretary shall promptly refund such overpay-
ments or pay such amounts to the person or persons entitled
thereto, together with interest thereon for the number of days
such overpayment or amounts were held by the Secretary,
with the addition of interest charged against the United
States computed at the rate published by the Department
of the Treasury as the ‘‘Treasury Current Value of Funds
Rate’’.
(f) AUDITS, PAYMENT DEMANDS AND LIMITATIONS.—
(1) The Secretary may conduct, after notice, any
audit reasonably necessary and appropriate to verify
the payments required under this section.
(2) Any billing or demand letter for royalty due
on locatable minerals produced and sold from any
mining claim subject to royalty required by this sec-
tion must be sent or issued not later than three years
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after the date such royalty was due and must specifi-
cally identify the production involved, the royalty al-
legedly due and the basis for the claim. No action,
proceeding or claim for royalty due on locatable min-
erals produced and sold, or relating to such produc-
tion, may be brought by the United States, including
but not limited to any claim for additional royalties
or claim of the right to offset the amount of such ad-
ditional royalties against amounts owed to any per-
son by the United States, unless judicial suit or ad-
ministrative proceedings are commenced to recover
specific amounts claimed to be due prior to the expi-
ration of three years from the date such royalty is al-
leged to have been due.
(g) PENALTIES.—Any person who withholds payment
of royalties under this section after a final, nonappealable
determination of liability may be liable for civil penalties
of up to $5,000 per day that payment is withheld after be-
coming due.
(h) DISBURSEMENT OF REVENUES.—The receipts from
royalties collected under this section shall be disbursed as
follows:
(1) One-half of such receipts shall be paid into
the Treasury of the United States and deposited as
miscellaneous receipts; and
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(2) One-half of such receipts shall be paid into
a State Fund or the Federal Fund in accordance with
section 5706; until termination as provided in section
5710.
SEC. 5706. ABANDONED LOCATABLE MINERALS MINE REC-
LAMATION FUND.
(a) STATE FUND.—Any State within which royalties
are collected pursuant to section 5705 from a mining claim
and which wishes to become eligible to receive such proceeds
allocated by paragraph 5705(h)(2) shall establish and
maintain an interest-bearing abandoned locatable mineral
mine reclamation fund (hereinafter referred to in this sub-
title as ‘‘State Fund’’) to accomplish the purposes of this
subtitle.
(b) FEDERAL FUND.—There is established on the books
of the Treasury of the United States an interest-bearing
fund to be known as the Abandoned Locatable Minerals
Mine Reclamation Fund (hereinafter referred to in this sub-
title as ‘‘Federal Fund’’) which shall consist of royalty pro-
ceeds allocated by paragraph 5705(h)(2) from mining
claims in a State where a State Fund has not been estab-
lished or maintained under subsection (a).
SEC. 5707. ALLOCATION AND PAYMENTS.
(a) STATE FUND.—Royalties collected pursuant to sec-
tion 5705 and allocated by paragraph 5705(h)(2) shall be
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paid by the Secretary of the Treasury to the State Fund
established pursuant to subsection 5706(a) for the State
where the mining claim from which the production occurred
is located. Payments to States under this subsection with
respect to any royalties received by the United States, shall
be made not later than the last business day of the month
in which such royalties are warranted by the United States
Treasury to the Secretary of the Interior as having been
received, except for any portion of such royalties which is
under challenge, which shall be placed in a suspense account
pending resolution of such challenge. Such warrants shall
be issued by the United States Treasury not later than 10
days after receipt of such royalties by the Treasury. Royal-
ties placed in a suspense account which are determined to
be due the United States shall be payable to a State Fund
not later than fifteen days after such challenge is resolved.
Any such amount placed in a suspense account pending res-
olution shall bear interest until the challenge is resolved.
In determining the amount of payments to State Funds
under this section, the amount of such payments shall not
be reduced by any administrative or other costs incurred
by the United States.
(b) FEDERAL FUND.—Royalties collected pursuant to
section 5705, and allocated by paragraph 5705(h)(2), from
mining claims located in a State which has not established
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or maintained a State Fund, and such royalties from min-
ing claims located in a State for which the Secretary’s au-
thority has expired under subsection 5710(a), shall be cred-
ited to the Federal Fund and distributed in accordance with
subsection (c).
(c) TRANSITION.—Prior to the time a State establishes
a State Fund pursuant to subsection 5706(a), any royalties
collected from a mining claim within such State shall be
deposited into the Federal Fund and allocated to such State.
Once a State establishes a State Fund under subsection
5706(a), the State allocation in the Federal Fund with ac-
crued interest shall be paid by the Secretary of the Treasury
to the State Fund in accordance with subsection (a). Com-
mencing three years after the date of enactment of this sub-
title, the Secretary of the Treasury shall distribute royalty
proceeds then accrued or which are thereafter credited to
the Federal Fund equally among all States which maintain
a State Fund established under subsection 5706(a), and for
which the Secretary of the Treasury’s authority has not ex-
pired under subsection 5710(a).
SEC. 5708. ELIGIBLE AREA.
(a) IN GENERAL.—Subject to subsection (b), lands and
water eligible for reclamation under this subtitle shall be
Federal lands or private lands patented under the general
mining laws that—
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(1) have been adversely affected by past mineral
activities on lands abandoned and left inadequately
reclaimed prior to the date of enactment of this Sub-
title; and
(2) for which the State determines there is no
identifiable party with a continuing reclamation re-
sponsibility under State or Federal laws.
(b) SPECIFIC SITES AND AREAS NOT ELIGIBLE.—The
following areas shall not be eligible for expenditures from
a State Fund:
(1) Any area subject to a plan of operations sub-
mitted or approved prior to, on or after the date of
enactment of this subtitle which includes remining or
reclamation of the area adversely affected by past
locatable mineral activities.
(2) Any area affected by coal mining eligible for
reclamation expenditures pursuant to section 404 of
the Surface Mining Control and Reclamation Act (30
U.S.C. 1234).
(3) Any area designated for remedial action pur-
suant to the Uranium Mill Tailings Radiation Con-
trol Act of 1978 (42 U.S.C. 7912).
(4) Any area that was listed on the National
Priorities List pursuant to the Comprehensive Envi-
ronmental Response, Compensation and Liability Act
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of 1980 (42 U.S.C. 9605) prior to the date of enact-
ment of this subtitle, or where the Environmental
Protection Agency has initiated or caused to be initi-
ated a response action pursuant to that Act.
SEC. 5709. USES AND OBJECTIVES OF FUNDS.
(a) USE OF FUNDS.—Royalty proceeds in a State
Fund shall be used for the reclamation of eligible areas. For
purposes of this section, reclamation includes—
(1) backfilling, fencing, sealing, or otherwise con-
trolling abandoned underground mine entries to pro-
tect public health and safety;
(2) abatement, treatment or control of water pol-
lution;
(3) 
shaping, 
grading, 
contouring 
and
revegetation of land to prevent erosion and sedimenta-
tion, or to enhance fish and wildlife habitat;
(4) removal or control of toxic or hazardous ma-
terials; and
(5) control or reclamation of surface subsidence
due to abandoned underground mines.
(b) PRIORITIES.—Expenditures of royalty proceeds
from a State Fund shall reflect the following priorities in
the order stated, but shall not preclude, where feasible and
appropriate, a combination of these priorities for cost-effec-
tive reclamation:
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(1) The protection of public health, safety, gen-
eral welfare and property from extreme danger from
the adverse effects of past mineral activities.
(2) The protection of public health, safety, and
general welfare from the adverse effects of past min-
eral activities.
SEC. 5710. SUNSET PROVISIONS.
(a) TERMINATION OF AUTHORITY.—The Secretary of
the Treasury’s authority to allocate funds to a State Fund
under section 5707 shall expire on the date that the State
submits a report to the Congress which states that there are
no areas in the State which remain to be reclaimed.
(b) TERMINATION OF FUND.—Upon the termination of
authority as provided in subsection (a) with respect to all
State Funds, the Federal Fund shall also be terminated,
and all royalty proceeds thereafter remaining in the Federal
Fund shall be paid into the Treasury of the United States
and deposited as miscellaneous receipts.
SEC. 5711. EFFECT ON THE GENERAL MINING LAWS.
The provisions of this Subtitle shall supersede the gen-
eral mining laws only to the extent such laws conflict with
the requirements of this Subtitle. Where no such conflict ex-
ists, the general mining laws, including all judicial and
administrative decisions interpreting them, shall remain in
full force and effect.
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SEC. 5712. SEVERABILITY.
If any provision of this subtitle or the applicability
thereof to any person or circumstances is held invalid, the
remainder of this Subtitle and the application of such pro-
vision to other persons or circumstances shall not be affected
thereby.
Subtitle I—Department of the
Interior
SEC. 5800. AIRCRAFT SERVICES.
(a) USE OF PRIVATE CONTRACTORS.—By not later
than October 1, 1996, the Secretary of the Interior shall
contract with private entities for the provision of all air-
craft services required by the Department of the Interior,
other than those available from existing DOI aircraft whose
primary purpose is fire suppression.
(b) SALE OF FEDERAL AIRCRAFT.—By September 30,
1998, the Secretary of the Interior is authorized and di-
rected to sell all aircraft owned by the Department of the
Interior, and all associated equipment and facilities, other
than those whose primary purpose is fire suppression.
(c) EXEMPTIONS.—The disposition of assets under this
section is not subject to section 202 and 203 of the Federal
Property and Administrative Services Act of 1949 (40
U.S.C. 483 and 484) or section 13 of the Surplus Property
Act of 1944 (50 U.S.C. App. 1622).
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(d) DISPOSITION OF PROCEEDS.—The proceeds from
dispositions under this section shall be returned to the
Treasury as miscellaneous receipts and all savings from re-
duced overhead and other costs related to the management
of the assets sold shall be returned to the Treasury.
Subtitle J—Power Marketing
Administrations
PART I—BONNEVILLE POWER ADMINISTRATION
REFINANCING
SEC. 5900. DEFINITIONS.
For the purposes of this subtitle—
(1) ‘‘Administrator’’ means the Administrator of
the Bonneville Power Administration;
(2) ‘‘capital investment’’ means a capitalized
cost funded by Federal appropriations that—
(A) is for a project, facility, or separable
unit or feature of a project or facility;
(B) is a cost for which the Administrator is
required by law to establish rates to repay to the
United States Treasury through the sale of elec-
tric power, transmission, or other services;
(C) excludes a Federal irrigation invest-
ment; and
(D) excludes an investment financed by the
current revenues of the Administrator or by
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bonds issued and sold, or authorized to be issued
and sold, by the Administrator under section 13
of the Federal Columbia River Transmission
System Act (16 U.S.C.838(k));
(3) ‘‘new capital investment’’ means a capital
investment for a project, facility, or separable unit or
feature of a project, facility, or separable unit or fea-
ture of a project or facility, placed in service after
September 30, 1995;
(4) ‘‘old capital investment’’ means a capital in-
vestment whose capitalized cost—
(A) was incurred, but not repaid, before Oc-
tober 1, 1995, and
(B) was for a project, facility, or separable
unit or feature of a project or facility, placed in
service before October 1, 1995;
(5) ‘‘repayment date’’ means the end of the pe-
riod within which the Administrator’s rates are to as-
sure the repayment of the principal amount of a cap-
ital investment; and
(6) ‘‘Treasury rate’’ means—
(A) for an old capital investment, a rate de-
termined by the Secretary of the Treasury, tak-
ing into consideration prevailing market yields,
during the month preceding October 1, 1995, on
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sign to the old capital investment in accordance
with paragraph 10(d)(1) of the version of De-
partment of Energy Order RA 6120.2 in effect
on October 1, 1993; and
(2) interest were paid—
(A) at the interest rate the Administrator
assigned before October 1, 1993, to the old cap-
ital investment, or
(B) with respect to an old capital invest-
ment for which the Administrator has not as-
signed an interest rate before October 1, 1993, at
a rate determined by the Secretary of the Treas-
ury, taking into consideration prevailing market
yields, during the month preceding the beginning
of the fiscal year in which the related project, fa-
cility, or separable unit or feature is placed in
service, on outstanding interest-bearing obliga-
tions of the United States with periods to matu-
rity comparable to the period between the begin-
ning of the fiscal year and the repayment date
for the old capital investment.
SEC. 5902. INTEREST RATE FOR NEW PRINCIPAL AMOUNTS.
As of October 1, 1995, the unpaid balance on the new
principal amount established for an old capital investment
under section 5901 bears interest annually at the Treasury
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rate for the old capital investment until the earlier of the
date that the new principal amount is repaid or the repay-
ment date for the new principal amount.
SEC. 5903. REPAYMENT DATES.
As of October 1, 1995, the repayment date for the new
principal amount established for an old capital investment
under section 5901 is no earlier than the repayment date
for the old capital investment assumed in section
5901(c)(1).
SEC. 5904. PREPAYMENT LIMITATIONS.
During the period October 1, 1995, through September
30, 2000, the total new principal amounts of old capital
investments, as established under section 5901, that the Ad-
ministrator may pay before their respective repayment
dates shall not exceed $100,000,000.
SEC. 5905. INTEREST RATES FOR NEW CAPITAL INVEST-
MENTS DURING CONSTRUCTION.
(a) NEW
CAPITAL
INVESTMENT.—The principal
amount of a new capital investment includes interest in
each fiscal year of construction of the related project, facil-
ity, or separable unit or feature at a rate equal to the one-
year rate for the fiscal year on the sum of—
(1) construction expenditures that were made
from the date construction commenced through the
end of the fiscal year, and
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(2) accrued interest during construction.
(b) PAYMENT.—The Administrator is not required to
pay, during construction of the project, facility, or sepa-
rable unit or feature, the interest calculated, accrued, and
capitalized under subsection (a).
(c) ONE-YEAR RATE.—For the purposes of this section,
‘‘one-year rate’’ for a fiscal year means a rate determined
by the Secretary of the Treasury, taking into consideration
prevailing market yields, during the month preceding the
beginning of the fiscal year, on outstanding interest-bearing
obligations of the United States with periods to maturity
of approximately one year.
SEC. 5906. INTEREST RATES FOR NEW CAPITAL INVEST-
MENTS.
The unpaid balance on the principal amount of a new
capital investment bears interest at the Treasury rate for
the new capital investment from the date the related project,
facility, or separable unit or feature is placed in service
until the earlier of the date the new capital investment is
repaid or the repayment date for the new capital invest-
ment.
SEC. 5907. APPROPRIATED AMOUNTS.
The Confederated Tribe of the Colville Reservation
Grand Coulee Dam Settlement Act (Public Law No. 103–
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436) is amended by striking section 6 and its catchline and
inserting the following:
‘‘SEC. 6. APPROPRIATED AMOUNTS.
‘‘(a) APPROPRIATED AMOUNTS.—Without fiscal year
limitation, there are appropriated to the Administrator
$15.25 million in fiscal year 1996, $15.86 million in fiscal
year 1997, $16.49 million in fiscal year 1998, $17.15 mil-
lion in fiscal year 1999, $17.84 million in fiscal year 2000,
and $4.10 million in each succeeding fiscal year so long
as the Administrator makes annual payments to the Tribes
under the settlement agreement.
‘‘(b) DEFINITIONS.—For the purposes of this section—
‘‘(1) ‘settlement agreement’ means that settlement
agreement between the United States of America and
the Confederated Tribes of the Colville Reservation
signed by the Tribes on April 16, 1994, and by the
United States of America on April 21, 1994, which
settlement agreement resolves claims of the Tribes in
Docket 181–D of the Indian Claims Commission,
which docket has been transferred to the United States
Court of Federal Claims; and
‘‘(2) ‘Tribes’ means the Confederated Tribes of
the Colville Reservation, a federally recognized Indian
Tribe.’’.
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SEC. 5908. CONTRACT PROVISIONS.
In each contract of the Administrator that provides for
the Administrator to sell electric power, transmission, or
related services, and that is in effect after September 30,
1995, the Administrator shall offer to include, or as the case
may be, shall offer to amend to include, provisions specify-
ing that after September 30, 1995—
(1) the Administrator shall establish rates and
charges on the basis that—
(A) the principal amount of an old capital
investment shall be no greater than the new
principal amount established under section 5901
of this part;
(B) the interest rate applicable to the un-
paid balance of the new principal amount of an
old capital investment shall be no greater than
the interest rate established under section 5902 of
this part;
(C) any payment of principal of an old
capital investment shall reduce the outstanding
principal balance of the old capital investment
in the amount of the payment at the time the
payment is tendered; and
(D) any payment of interest on the unpaid
balance of the new principal amount of an old
capital investment shall be a credit against the
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appropriate interest account in the amount of
the payment at the time the payment is ten-
dered;
(2) apart from charges necessary to repay the
new principal amount of an old capital investment as
established under section 5901 of this part and to pay
the interest on the principal amount under section
5902 of this part, no amount may be charged for re-
turn to the United States Treasury as repayment for
or return on an old capital investment, whether by
way of rate, rent, lease payment, assessment, user
charge, or any other fee;
(3) amounts provided under section 1304 of title
31, United States Code, shall be available to pay, and
shall be the sole source for payment of, a judgment
against or settlement by the Administrator or the
United States on a claim for a breach of the contract
provisions required by this part; and
(4) the contract provisions specified in this part
do not—
(A) preclude the Administrator from recov-
ering, through rates or other means, any tax that
is generally imposed on electric utilities in the
United States, or
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(B) affect the Administrator’s authority
under applicable law, including section 7(g) of
the Pacific Northwest Electric Power Planning
and Conservation Act (16 U.S.C. 839e(g)), to—
(i) allocate costs and benefits, includ-
ing but not limited to fish and wildlife
costs, to rates or resources, or
(ii) design rates.
SEC. 5909. SAVINGS PROVISIONS.
(a) REPAYMENT.—This part does not affect the obliga-
tion of the Administrator to repay the principal associated
with each capital investment, and to pay interest on the
principal, only from the ‘‘Administrator’s net proceeds,’’ as
defined in section 13 of the Federal Columbia River Trans-
mission System Act (16 U.S.C. 838k(b)).
(b) PAYMENT OF CAPITAL INVESTMENT.—Except as
provided in section 5904 of this part, this part does not
affect the authority of the Administrator to pay all or a
portion of the principal amount associated with a capital
investment before the repayment date for the principal
amount.
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PART II—ALASKA POWER MARKETING
ADMINISTRATION SALE
SEC. 5910. SALE OF SNETTISHAM AND EKLUTNA HYDRO-
ELECTRIC PROJECTS.
(a) SALE OF SNETTISHAM.—The Secretary of Energy
is authorized and directed to sell the Snettisham Hydro-
electric Project (referred to in this part as ‘‘Snettisham’’)
to the State of Alaska in accordance with the terms of this
part and the February 10, 1989, Snettisham Purchase
Agreement, as amended, between the Alaska Power Admin-
istration of the United States Department of Energy and
the Alaska Power Authority and the Authority’s successors.
(b) SALE OF EKLUTNA.—The Secretary of Energy is
authorized and directed to sell the Eklutna Hydroelectric
Project (referred to in this part as ‘‘Eklutna’’) to the Mu-
nicipality of Anchorage doing business as Municipal Light
and Power, the Chugach Electric Association, Inc., and the
Matanuska Electric Association, Inc. (referred to in this
part as ‘‘Eklutna Purchasers’’), in accordance with the
terms of this part and the August 2, 1989, Eklutna Pur-
chase Agreement, as amended, between the Alaska Power
Administration of the United States Department of Energy
and the Eklutna Purchasers.
(c) FEDERAL SALE ASSISTANCE.—The heads of other
Federal departments and agencies, including the Secretary
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of the Interior, shall assist the Secretary of Energy in im-
plementing the sales authorized and directed by this part.
(d) DISPOSITION OF PROCEEDS.—Proceeds from the
sales required by this part shall be deposited in the Treas-
ury of the United States to the credit of miscellaneous re-
ceipts.
(e) PREPARATION OF EKLUTNA AND SNETTISHAM FOR
SALE.—The Secretary of Energy is authorized and directed
to use such funds from the sale of electric power by the Alas-
ka Power Administration as may be necessary to prepare,
survey and acquire Eklutna and Snettisham assets for sale
and conveyance. Such preparations and acquisitions shall
provide sufficient title to ensure the beneficial use, enjoy-
ment, and occupancy by the purchaser.
SEC. 5911. EXEMPTION AND OTHER PROVISIONS.
(a) FEDERAL POWER ACT EXEMPTION.—
(1) After the sales authorized by this part occur,
Eklutna and Snettisham, including future modifica-
tions, shall continue to be exempt from the require-
ments of the Federal Power Act (16 U.S.C. 791a et
seq.) as amended.
(2) The exemption provided by paragraph (1)
does not affect the Memorandum of Agreement entered
into among the State of Alaska, the Eklutna Pur-
chasers, the Alaska Energy Authority, and Federal
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fish and wildlife agencies regarding the protection,
mitigation of, damages to, and enhancement of fish
and wildlife, dated August 7, 1991, which remains in
full force and effect.
(3) Nothing in this part or the Federal Power
Act preempts the State of Alaska from carrying out
the responsibilities and authorities of the Memoran-
dum of Agreement.
(b) JUDICIAL REVIEW.—
(1) The United States District Court for the Dis-
trict of Alaska shall have jurisdiction to review deci-
sions made under the Memorandum of Agreement and
to enforce the provisions of the Memorandum of
Agreement, including the remedy of specific perform-
ance.
(2) An action seeking review of a Fish and Wild-
life Program (‘‘Program’’) of the Governor of Alaska
under the Memorandum of Agreement or challenging
actions of any of the parties to the Memorandum of
Agreement prior to the adoption of the Program shall
be brought not later than ninety days after the date
on which the Program is adopted by the Governor of
Alaska, or be barred.
(3) An action seeking review of implementation
of the Program shall be brought not later than ninety
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days after the challenged act implementing the Pro-
gram, or be barred.
(c) TRANSFER OF EKLUTNA.—With respect to Eklutna
lands described in Exhibit A of the Eklutna Purchase
Agreement:
(1) The Secretary of the Interior shall issue
rights-of-way to the Alaska Power Administration for
subsequent reassignment to the Eklutna Purchasers—
(A) at no cost to the Eklutna Purchasers;
(B) to remain effective for a period equal to
the life of Eklutna as extended by improvements,
repairs, renewals, or replacements; and
(C) sufficient for the operation of, mainte-
nance of, repair to, and replacement of, and ac-
cess to, Eklutna facilities located on military
lands and lands managed by the Bureau of Land
Management, including lands selected by the
State of Alaska.
(2) If the Eklutna Purchasers subsequently sell
or transfer Eklutna to private ownership, the Bureau
of Land Management may assess reasonable and cus-
tomary fees for continued use of the rights-of-way on
lands managed by the Bureau of Land Management
and military lands in accordance with existing law.
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(3) Fee title to lands at Anchorage Substation
shall be transferred to Eklutna Purchasers at no addi-
tional cost if the Secretary of the Interior determines
that pending claims to, and selections of, those lands
are invalid or relinquished.
(4) With respect to the Eklutna lands identified
in paragraph 1 of Exhibit A of the Eklutna Purchase
Agreement, the State of Alaska may select, and the
Secretary of the Interior shall convey to the State, im-
proved lands under the selection entitlements in sec-
tion 6 of the Act of July 7, 1958 (commonly referred
to as the Alaska Statehood Act, Public Law 85–508,
72 Stat. 339, as amended), and the North Anchorage
Land Agreement dated January 31, 1983. This con-
veyance shall be subject to the rights-of-way provided
to the Eklutna Purchasers under paragraph (1).
(d) TRANSFER OF SNETTISHAM.—With respect to the
Snettisham lands identified in paragraph 1 of Exhibit A
of the Snettisham Purchase Agreement and Public Land
Order No. 5108, the State of Alaska may select, and the
Secretary of the Interior shall convey to the State of Alaska,
improved lands under the selection entitlements in section
6 of the Act of July 7, 1958 (commonly referred to as the
Alaska Statehood Act, Public Law 85–508, 72 Stat. 339,
as amended).
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(e) APA TERMINATION.—Not later than one year after
both of the sales authorized in section 102 have occurred,
as measured by the Transaction Dates stipulated in the
Purchase Agreements, the Secretary of Energy shall—
(1) complete the business of, and close out, the
Alaska Power Administration;
(2) submit to Congress a report documenting the
sales; and
(3) return unobligated balances of funds appro-
priated for the Alaska Power Administration to the
Treasury of the United States.
(f) REPEAL.—The Act of July 31, 1950 (64 Stat. 382)
is repealed effective on the date, as determined by the Sec-
retary of Energy, that all Eklutna assets have been conveyed
to the Eklutna Purchasers.
(g) REPEAL.—Section 204 of the Flood Control Act of
1962 (76 Stat. 1193) is repealed effective on the date, as
determined by the Secretary of Energy, that all Snettisham
assets have been conveyed to the State of Alaska.
(h) CONFORMITY CHANGES TO THE DEPARTMENT OF
ENERGY ORGANIZATION ACT.—As of the later of the two
dates determined in subsections (f) and(g), section 302(a)
of the Department of Energy Organization Act (42 U.S.C.
7152(a)) is amended—
(1) in paragraph (1)—
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(A) by striking subparagraph (C); and
(B) by redesignating subparagraphs (D),
(E), and (F) as subparagraphs (C), (D), and (E)
respectively; and
(2) in paragraph (2) by striking out ‘‘and the
Alaska Power Administration’’ and by inserting
‘‘and’’ after ‘‘Southwestern Power Administration,’’.
(i) REPEAL.—The Act of August 9, 1955, concerning
water resources investigation in Alaska (69 Stat. 618), is
repealed.
(j) ASSET DISPOSAL.—The sales of Eklutna and
Snettisham under this part are not considered disposal of
Federal surplus property under the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 484) or the
Act of October 3, 1944, popularly referred to as the ‘‘Sur-
plus Property Act of 1944’’ (50 U.S.C. App. 1622).
(k) For purposes of section 147(d) of the Internal Reve-
nue Code, ‘‘1st use’’ of Snettisham shall be considered to
occur upon acquisition of the property by or on behalf of
the State of Alaska.
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Subtitle K—Radio and Television
Communication Site Fees
SEC. 5920. RADIO AND TELEVISION COMMUNICATION SITE
FEES.
(a) ADDITIONAL USERS OF COMMUNICATION SITES.—
(1) If the radio or television communications site user is
permitted under the terms of its site use authorization from
the Bureau of Land Management or the Forest Service to
grant access to the site to additional users, then the radio
or television communications site user shall pay annually
to the Bureau of Land Management or the Forest Service
an amount equal to 25 percent of the gross income it re-
ceives from each such additional user during that year.
(2) Authorizations to radio and television communica-
tions site users shall require such site users to provide the
Bureau of Land Management or the Forest Service with
a certified list which identifies all additional users of such
sites and all gross revenues received from such additional
users. The Bureau of Land Management and the Forest
Service shall not require any additional user of a radio or
television communications site to obtain a separate author-
ization to use such a site.
(b) REGULATIONS.—(1) The Secretaries shall prescribe
appropriate rules and regulations to carry out the provi-
sions of this section.
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(2) Ten years after the date of enactment of this sec-
tion, the Secretaries shall establish a broad-based advisory
group, including representatives from the radio and tele-
vision broadcast industry, to review the schedule of charges
and other acceptable criteria for determining fair market
value for radio and television communications site users.
The advisory group shall report its findings to the Congress
no later than 1 year after it is established.
(c) INITIAL SCHEDULE
OF CHARGES.—(1) Until
modified pursuant to subsection (b) of this section, the
schedule of charges for television communications site users
which the Secretaries shall prescribe pursuant to subsection
(a) of this section shall be as listed in exhibit 3, (television
rental fee schedule) in the report of the radio and television
broadcast use fee advisory committee dated December 1992.
(2) Until modified pursuant to subsection (b) of this
section, the schedule of charges for radio communications
site users which the Secretaries shall prescribe pursuant to
subsection (a) of this section shall be as listed in exhibit
4, (radio rental fee schedule) in the report of the radio and
television broadcast use fee advisory committee dated De-
cember 1992.
(d) ADVISORY GROUP.—(1) The Secretaries are di-
rected to jointly establish a broad-based advisory group
comprised of representatives from the non-broadcast com-
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munications industry (users of both private and public
communication sites) and the two agencies to review rec-
ommendations on acceptable criteria for determining fair
market values and next best alternative use.
(2) The advisory group shall review the methodology
used in any previous studies and reach concurrence on such
methodology.
(3) The advisory group shall also assess the validity
of the results of such studies, taking into account all reason-
able options for the establishment of fair market values and
next best alternative use.
(4) The advisory group shall report its findings to the
Committee on Energy and Natural Resources of the United
States Senate and the Committee on Natural Resources of
the United States House of Representatives within one year
after the enactment of this Act.
Subtitle L—Amendments to Outer
Continental Shelf Lands Act
SEC. 5930. AMENDMENTS TO THE OUTER CONTINENTAL
SHELF LANDS ACT.
Section 8(a) of the Outer Continental Shelf Lands Act,
(43 U.S.C. 1337(a)(3)), is amended by striking paragraph
(3) in its entirety and inserting the following:
‘‘(3)(A) The Secretary may through primary,
secondary, or tertiary recovery means, reduce or
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eliminate any royalty or net profit share set forth in
the lease(s). With the lessee’s consent, the Secretary
may make other modifications to the royalty or net
profit share terms of the lease in order to—
‘‘(i) promote development or increased pro-
duction on producing or non-producing leases; or
‘‘(ii) encourage production of marginal re-
sources on producing or non-producing leases;
‘‘(B)(i) Notwithstanding any other provision of
this Act, with respect to any lease or unit in existence
on the date of enactment of the Outer Continental
Shelf Deep Water Royalty Relief Act meeting the re-
quirements of this subparagraph, no royalty pay-
ments shall be due on new production, as defined in
clause (iv) of this subparagraph, from any lease or
unit located in water depths of 200 meters or greater
in the Western and Central Planning Areas of the
Gulf of Mexico, including that portion of the Eastern
Planning Area of the Gulf of Mexico encompassing
whole lease blocks lying west of 87 degrees, 30 minutes
West longitude, until such volume of production as
determined pursuant to clause (ii) has been produced
by the lessee.
‘‘(ii) Upon submission of a complete application
by the lessee, the Secretary shall determine within 180
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days of such application whether new production
from such lease or unit would be economic in the ab-
sence of the relief from the requirement to pay royal-
ties provided for by clause (i) of this subparagraph.
In making such determination, the Secretary shall
consider the increased technological and financial risk
of deep water development and all costs associated
with exploring, developing, and producing from the
lease. The lessee shall provide information required
for a complete application to the Secretary prior to
such determination. The Secretary shall clearly define
the information required for a complete application
under this section. Such application may be made on
the basis of an individual lease or unit. If the Sec-
retary determines that such new production would be
economic in the absence of the relief from the require-
ment to pay royalties provided for by clause (i) of
this subparagraph, the provisions of clause (i) shall
not apply to such production. If the Secretary deter-
mines that such new production would not be eco-
nomic in the absence of the relief from the require-
ment to pay royalties provided for by clause (i), the
Secretary must determine the volume of production
from the lease or unit on which no royalties would be
due in order to make such new production economi-
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cally viable; except that for new production as defined
in clause (iv)(aa), in no case will that volume be less
than 17.5 million barrels of oil equivalent in water
depths of 200 to 400 meters, 52.5 million barrels of
oil equivalent in 400–800 meters of water, and 87.5
million barrels of oil equivalent in water depths
greater than 800 meters. Redetermination of the ap-
plicability of clause (i) shall be undertaken by the
Secretary when requested by the lessee prior to the
commencement of the new production and upon sig-
nificant change in the factors upon which the original
determination was made. The Secretary shall make
such redetermination within 120 days of submission
of a complete application. The Secretary may extend
the time period for making any determination or re-
determination under this clause for 30 days, or longer
if agreed to by the applicant, if circumstances so war-
rant. The lessee shall be notified in writing of any de-
termination or redetermination and the reasons for
and assumptions used for such determination. Any
determination or redetermination under this clause
shall be a final agency action. The Secretary’s deter-
mination or redetermination shall be judicially
reviewable under section 10 (a) of the Administrative
Procedures Act, 5 U.S.C. Sec. 702, only for actions
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filed within 30 days of the Secretary’s determination
or redetermination.
‘‘(iii) In the event that the Secretary fails to
make the determination or redetermination called for
in clause (ii) upon application by the lessee within
the time period, together with any extension thereof,
provided for by clause (ii), no royalty payments shall
be due on new production as follows:
‘‘(I) For new production, as defined in
clause (iv)(aa) of this subparagraph, no royalty
shall be due on such production according to the
schedule of minimum volumes specified in clause
(ii) of this subparagraph.
‘‘(II) For new production, as defined in
clause (iv)(bb) of this subparagraph, no royalty
shall be due on such production for one year fol-
lowing the start of such production.
‘‘(iv) For purposes of this subparagraph, the
term ‘new production’ is—
‘‘(I) any production from a lease from
which no royalties are due on production, other
than test production, prior to the date of enact-
ment of the Outer Continental Shelf Deep Water
Royalty Relief Act; or
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‘‘(II) any production resulting from lease
development activities pursuant to a Develop-
ment Operations Coordination Document, or
supplement thereto that would expand produc-
tion significantly beyond the level anticipated in
the Development Operations Coordination Docu-
ment, approved by the Secretary after the date of
enactment of the Outer Continental Shelf Deep
Water Royalty Relief Act.
‘‘(v) During the production of volumes deter-
mined pursuant to clause (ii) or (iii) of this subpara-
graph, in any year during which the arithmetic aver-
age of the closing prices on the New York Mercantile
Exchange for Light Sweet crude oil exceeds $28.00 per
barrel, any production of oil will be subject to royal-
ties at the lease stipulated royalty rate. Any produc-
tion subject to this clause shall be counted toward the
production volume determined pursuant to clause (ii)
or (iii). Estimated royalty payments will be made if
such average of the closing prices for the previous
year exceeds $28.00. After the end of the calendar
year, when the new average price can be calculated,
lessees will pay any royalties due, with interest but
without penalty, or can apply for a refund, with in-
terest, of any overpayment.
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‘‘(vi) During the production of volumes deter-
mined pursuant to clause (ii) or (iii) of this subpara-
graph, in any year during which the arithmetic aver-
age of the closing prices on the New York Mercantile
Exchange for natural gas exceeds $3.50 per million
British thermal units, any production of natural gas
will be subject to royalties at the lease stipulated roy-
alty rate. Any production subject to this clause shall
be counted toward the production volume determined
pursuant to clauses (ii) or (iii). Estimated royalty
payments will be made if such average of the closing
prices for the previous year exceeds $3.50. After the
end of the calendar year, when the new average price
can be calculated, lessees will pay any royalties due,
with interest but without penalty, or can apply for a
refund, with interest, of any overpayment.
‘‘(vii) The prices referred to in clauses (v) and
(vi) of this subparagraph shall be changed during any
calendar year after 1994 by the percentage, if any, by
which the implicit price deflator for the gross domes-
tic product changed during the preceding calendar
year.’’.
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SEC. 5931. NEW LEASES.
(a) AMENDMENTS.—Section 8(a)(1) of the Outer Con-
tinental Shelf Lands Act (43 U.S.C. 1337(a)(1)) is amended
as follows:
(1) Redesignate section 8(a)(1)(H) as section
8(a)(1)(I);
(2) Add a new section 8(a)(1)(H) as follows:
‘‘(H) cash bonus bid with royalty at no less
than 12 and 1/2 per centum fixed by the Sec-
retary in amount or value of production saved,
removed, or sold, and with suspension of royal-
ties for a period, volume, or value of production
determined by the Secretary. Such suspensions
may vary based on the price of production from
the lease.’’.
(b) PRODUCTION.—For all tracts located in water
depths of 200 meters or greater in the Western and Central
Planning Ares of the Gulf of Mexico, including that portion
of the Eastern Planning Area of the Gulf of Mexico encom-
passing whole lease blocks lying west of 87 degrees, 30 min-
utes West longitude, any lease sale within seven years of
the date of enactment of this Act, shall use the bidding sys-
tem authorized in section 8(a)(1)(H) of the Outer Continen-
tal Shelf Lands Act, as amended by this Act, except that
the suspension of royalties shall be set at a volume of not
less than the following:
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(1) 17.5 million barrels of oil equivalent for
leases in water depths of 200 to 400 meters;
(2) 52.5 million barrels of oil equivalent for
leases in 400 to 800 meters of water; and
(3) 87.5 million barrels of oil equivalent for
leases in water depths greater than 800 meters.
SEC. 5932. REGULATIONS.
The Secretary shall promulgate such rules and regula-
tions as are necessary to implement the provisions of this
Act within 180 days after the enactment of this Act.
TITLE VI—COMMITTEE ON ENVI-
RONMENT 
AND 
PUBLIC
WORKS
SEC. 6001. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This title may be cited as the
‘‘Public Works Reconciliation Act of 1995’’.
(b) TABLE OF CONTENTS.—The table of contents of this
title is as follows:
Sec. 6001. Short title; table of contents.
Sec. 6002. Highway demonstration projects.
Sec. 6003. Technical correction concerning minimum allocation.
Sec. 6004. Nuclear Regulatory Commission annual charges.
Sec. 6005. Radiological emergency preparedness fees.
SEC. 6002. HIGHWAY DEMONSTRATION PROJECTS.
(a) PROJECTS AUTHORIZED FOR FISCAL YEARS 1996
AND 1997.—
(1) REDUCTIONS.—Subject to paragraph (2),
notwithstanding any other law, for each of fiscal
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years 1996 and 1997 and with respect to each State,
the total of the amounts authorized, allocated, or
unallocated to the State for highway demonstration
projects under sections 1103 through 1108 of the
Intermodal Surface Transportation Efficiency Act of
1991 (Public Law 102–240; 105 Stat. 2027) shall be
reduced by 15 percent.
(2) ORDER
OF
REDUCTIONS.—For fiscal year
1996, the reductions required by paragraph (1) shall
be made after any reduction required for the fiscal
year under section 1003(c) of the Act (Public Law
102–240; 105 Stat. 1921).
(b) PROJECTS PREVIOUSLY AUTHORIZED UNDER CER-
TAIN TRANSPORTATION LAWS.—
(1) REDUCTIONS.—Subject to paragraph (2),
notwithstanding any other law, with respect to each
State, the total unobligated balance as of September
30, 1995, of the amounts authorized, allocated,
unallocated, or otherwise provided to the State for
highway demonstration projects under all of the fol-
lowing laws shall be reduced by 15 percent:
(A) For each of fiscal years 1992 through
1995, sections 1103 through 1108 of the Inter-
modal Surface Transportation Efficiency Act of
1991 (Public Law 102–240; 105 Stat. 2027).
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(B) Section 149 of the Surface Transpor-
tation and Uniform Relocation Assistance Act of
1987 (Public Law 100–17; 101 Stat. 181).
(C) Section 131 of the Surface Transpor-
tation Assistance Act of 1982 (Public Law 97–
424; 96 Stat. 2119).
(2) EFFECT ON OTHER REDUCTIONS.—A reduc-
tion under paragraph (1) made with respect to a law
described in paragraph (1)(A) shall not affect any re-
duction required for a fiscal year under section
1003(c) of the Intermodal Surface Transportation Ef-
ficiency Act of 1991 (Public Law 102–240; 105 Stat.
1921).
SEC. 6003. TECHNICAL CORRECTION CONCERNING MINI-
MUM ALLOCATION.
(a) FINDINGS.—Congress finds that—
(1) under the amendments made by section
1013(a) of the Intermodal Surface Transportation Ef-
ficiency Act of 1991 (Public Law 102–240; 105 Stat.
1940), each State receives back from the Federal-aid
highway program not less than 90 percent of the
State’s percentage of all contributions to the Highway
Account of the Highway Trust Fund established by
section 9503 of the Internal Revenue Code of 1986;
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(2) for fiscal year 1995, the amount apportioned
under section 157(a)(4) of title 23, United States
Code, was $1,427,000,000;
(3) in fiscal year 1996, the Interstate construc-
tion program under the title will be terminated and
replaced with a new reimbursement program; and
(4) as a result of the termination of the Inter-
state construction program, the number of States re-
ceiving funds under section 157(a)(4) of the title for
fiscal year 1996 may decrease and the amount of
funds some States will require will decrease, and,
therefore, the amount of funds necessary to ensure
that each State receives not less than 90 percent will
be reduced from $1,427,000,000 to an estimated
$565,000,000.
(b) CORRECTION.—
(1) IN GENERAL.—With respect to the first fiscal
year beginning after September 30, 1995—
(A) the Secretary of Transportation shall
determine, in accordance with the policies estab-
lished by the Intermodal Surface Transportation
Efficiency Act of 1991 (Public Law 102–240;
105 Stat. 1914)—
(i) which of the States will no longer
require an apportionment under section
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157(a)(4) of title 23, United States Code;
and
(ii) which of the States will require de-
creased funding under section 157(a)(4) of
the title;
as a result of the termination of the Interstate
construction program; and
(B) as a result of the reduced number of
States that may require an apportionment under
section 157(a)(4) of the title, and the decrease in
the amount of funds some States will require
under section 157(a)(4) of the title, the amount
apportioned under section 157(a)(4) of the title
shall be reduced from the amount apportioned
for fiscal year 1995 by 60.4 percent.
(2) EFFECT
ON
CERTAIN
CALCULATIONS.—The
correction made by paragraph (1) shall not be taken
into account in making the calculations required
under sections 1003(c), 1013(c), and 1015 of the
Intermodal Surface Transportation Efficiency Act of
1991 (Public Law 102–240; 105 Stat. 1921, 1940,
and 1943).
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SEC. 6004. NUCLEAR REGULATORY COMMISSION ANNUAL
CHARGES.
Section 6101(a)(3) of the Omnibus Budget Reconcili-
ation Act of 1990 (42 U.S.C. 2214(a)(3)) is amended by
striking ‘‘September 30, 1998’’ and inserting ‘‘September
30, 2005’’.
SEC. 6005. RADIOLOGICAL EMERGENCY PREPAREDNESS
FEES.
The first paragraph of the matter under the heading
‘‘ADMINISTRATIVE PROVISIONS’’ under the heading ‘‘FED-
ERAL EMERGENCY MANAGEMENT AGENCY’’ in title III of
the Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropria-
tions Act, 1995 (Public Law 103–327; 108 Stat. 2325), is
amended—
(1) in the first and second sentences, by striking
‘‘fiscal year 1995’’ each place it appears and insert-
ing ‘‘each of fiscal years 1995 through 2005’’; and
(2) in the last sentence, by striking ‘‘only author-
ized during fiscal year 1995’’ and inserting ‘‘author-
ized only during fiscal years 1995 through 2005’’.
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TITLE VII—COMMITTEE ON FI-
NANCE—SPENDING CONTROL
PROVISIONS
SEC. 7000. REFERENCES; TABLE OF CONTENTS.
(a) AMENDMENTS TO SOCIAL SECURITY ACT.—Except
as otherwise specifically provided, whenever in subtitles A
through G of this title an amendment is expressed in terms
of an amendment to or repeal of a section or other provi-
sion, the reference shall be considered to be made to that
section or other provision of the Social Security Act.
(b) REFERENCES TO OBRA.—In this title, the terms
‘‘OBRA–1986’’, 
‘‘OBRA–1987’’, 
‘‘OBRA–1990’’, 
and
‘‘OBRA–1993’’ refer to the Omnibus Budget Reconciliation
Act of 1986 (Public Law 99–509), the Omnibus Budget Rec-
onciliation Act of 1987 (Public Law 100–203), the Omnibus
Budget Reconciliation Act of 1989 (Public Law 101–239),
the Omnibus Budget Reconciliation Act of 1990 (Public
Law 101–508), and the Omnibus Budget Reconciliation Act
of 1993 (Public Law 103–66), respectively.
(c) TABLE OF CONTENTS OF SUBTITLES A THROUGH
J.—The table of contents of subtitles A through J of this
title is as follows:
TITLE VII—COMMITTEE ON FINANCE—SPENDING CONTROL
PROVISIONS
Sec. 7000. References; table of contents.
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Subtitle A—Medicare
CHAPTER 1—MEDICARE CHOICE PLANS
SUBCHAPTER A—ESTABLISHMENT OF MEDICARE CHOICE PLANS
Sec. 7001. Medicare choice plans.
Sec. 7002. Treatment of 1876 organizations.
Sec. 7003. Special rule for calculation of payment rates for 1996.
SUBCHAPTER B—TAX PROVISIONS RELATING TO MEDICARE CHOICE PLANS
Sec. 7006. Medicare Choice Accounts.
Sec. 7007. Certain rebates included in gross income.
CHAPTER 2—PROVISIONS RELATING TO PART A
SUBCHAPTER A—GENERAL PROVISIONS RELATING TO PART A
Sec. 7011. PPS hospital payment update.
Sec. 7012. PPS-exempt hospital payments.
Sec. 7013. Capital payments for PPS hospitals.
Sec. 7014. Disproportionate share hospital payments.
Sec. 7015. Indirect medical education payments.
Sec. 7016. Graduate medical education and disproportionate share payment ad-
justments for medicare choice.
Sec. 7017. Payments for hospice services.
Sec. 7018. Extending medicare coverage of, and application of hospital insurance
tax to, all State and local government employees.
Sec. 7019. Nurse aide training in skilled nursing facilities subject to extended
survey and certain other conditions.
SUBCHAPTER B—PAYMENTS TO SKILLED NURSING FACILITIES
PART I—PROSPECTIVE PAYMENT SYSTEM
Sec. 7025. Prospective payment system for skilled nursing facilities.
PART II—INTERIM PAYMENT SYSTEM
Sec. 7031. Payments for routine service costs.
Sec. 7032. Cost-effective management of covered non-routine services.
Sec. 7033. Payments for routine service costs.
Sec. 7034. Reductions in payment for capital-related costs.
Sec. 7035. Treatment of items and services paid for under part B.
Sec. 7036. Medical review process.
Sec. 7037. Revised salary equivalence limits.
Sec. 7038. Report by Prospective Payment Assessment Commission.
Sec. 7039. Effective date.
CHAPTER 3—PROVISIONS RELATING TO PART B
Sec. 7041. Payments for physicians’ services.
Sec. 7042. Elimination of formula-driven overpayments for certain outpatient
hospital services.
Sec. 7043. Payment for clinical laboratory diagnostic services.
Sec. 7044. Durable medical equipment.
Sec. 7045. Updates for orthotics and prosthetics.
Sec. 7046. Payments for capital-related costs of outpatient hospital services.
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Sec. 7047. Payments for non-capital costs of outpatient hospital services.
Sec. 7048. Updates for ambulatory surgical services.
Sec. 7049. Payment for ambulance services.
Sec. 7050. Physician supervision of nurse anesthetists.
Sec. 7051. Part B deductible.
Sec. 7052. Part B premium.
Sec. 7053. Increase in medicare part B premium for high income individuals.
CHAPTER 4—PROVISIONS RELATING TO PARTS A AND B
SUBCHAPTER A—GENERAL PROVISIONS RELATING TO PARTS A AND B
Sec. 7055. Secondary payor provisions.
Sec. 7056. Treatment of assisted suicide.
Sec. 7057. Administrative provisions.
Sec. 7058. Sense of Senate regarding coverage for treatment of breast and prostate
cancer under medicare.
SUBCHAPTER B—PAYMENTS FOR HOME HEALTH SERVICES
Sec. 7061. Payment for home health services.
Sec. 7062. Maintaining savings resulting from temporary freeze on payment in-
creases for home health services.
Sec. 7063. Extension of waiver of presumption of lack of knowledge of exclusion
from coverage for home health agencies.
CHAPTER 5—RURAL AREAS
Sec. 7071. Medicare-dependent, small, rural hospital payment extension.
Sec. 7072. Medicare rural hospital flexibility program.
Sec. 7073. Establishment of rural emergency access care hospitals.
Sec. 7074. Additional payments for physicians’ services furnished in shortage
areas.
Sec. 7075. Payments to physician assistants and nurse practitioners for services
furnished in outpatient or home settings.
Sec. 7076. Demonstration projects to promote telemedicine.
Sec. 7077. PROPAC recommendations on urban medicare dependent hospitals.
CHAPTER 6—HEALTH CARE FRAUD AND ABUSE PREVENTION
Sec. 7100. Short title.
SUBCHAPTER A—FRAUD AND ABUSE CONTROL PROGRAM
Sec. 7101. Fraud and abuse control program.
Sec. 7102. Application of certain health anti-fraud and abuse sanctions to fraud
and abuse against Federal health programs.
Sec. 7103. Health care fraud and abuse guidance.
SUBCHAPTER B—REVISIONS TO CURRENT SANCTIONS FOR FRAUD AND ABUSE
Sec. 7111. Mandatory exclusion from participation in medicare and State health
care programs.
Sec. 7112. Establishment of minimum period of exclusion for certain individuals
and entities subject to permissive exclusion from medicare and
State health care programs.
Sec. 7113. Permissive exclusion of individuals with ownership or control interest
in sanctioned entities.
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Sec. 7114. Sanctions against practitioners and persons for failure to comply with
statutory obligations.
Sec. 7115. Intermediate sanctions for medicare health maintenance organizations.
Sec. 7116. Clarification of and additions to exceptions to anti-kickback penalties.
Sec. 7117. Effective date.
SUBCHAPTER C—ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS
Sec. 7121. Establishment of the health care fraud and abuse data collection pro-
gram.
Sec. 7122. Elimination of reasonable cost reimbursement for certain legal fees.
SUBCHAPTER D—CIVIL MONETARY PENALTIES
Sec. 7131. Social Security Act civil monetary penalties.
SUBCHAPTER E—AMENDMENTS TO CRIMINAL LAW
Sec. 7141. Health care fraud.
Sec. 7142. Forfeitures for Federal health care offenses.
Sec. 7143. Injunctive relief relating to Federal health care offenses.
Sec. 7144. Grand jury disclosure.
Sec. 7145. False statements.
Sec. 7146. Obstruction of criminal investigations of Federal health care offenses.
Sec. 7147. Theft or embezzlement.
Sec. 7148. Laundering of monetary instruments.
Sec. 7149. Authorized investigative demand procedures.
SUBCHAPTER F—STATE HEALTH CARE FRAUD CONTROL UNITS
Sec. 7151. State health care fraud control units.
Sec. 7152. Beneficiary incentive programs.
CHAPTER 7—OTHER PROVISIONS FOR TRUST FUND SOLVENCY
Sec. 7171. Nondischargeability of certain medicare debts.
Sec. 7172. Transfers of certain part B savings to hospital insurance trust fund.
Subtitle B—Transformation of the Medicaid Program
Sec. 7190. Short title.
Sec. 7191. Transformation of medicaid program.
Sec. 7192. Medicaid drug rebate program.
Sec. 7193. Waivers.
Sec. 7194. Children with special health care needs.
Sec. 7195. CBO reports.
Sec. 7196. Adjustments of pool amounts.
Sec. 7197. State review of mentally ill or retarded nursing facility residents upon
change in physical or mental condition.
Sec. 7198. Nurse aide training in nursing facilities subject to extended survey
and under certain other conditions.
Sec. 7199. Nurse aide training in nursing facilities subject to extended survey
and under certain other conditions.
Subtitle C—Block Grants for Temporary Assistance for Needy Families
Sec. 7200. Short title.
Sec. 7201. Block grants to States.
Sec. 7202. Limitations on use of funds for certain purposes.
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Sec. 7203. Census data on grandparents as primary caregivers for their grand-
children.
Sec. 7204. Study of effect of welfare reform on grandparents as primary
caregivers.
Sec. 7205. Development of prototype of counterfeit-resistant social security card
required.
Sec. 7206. Modifications to the job opportunities for certain low-income individ-
uals program.
Sec. 7207. Demonstration projects for school utilization.
Sec. 7208. Corrective compliance plan.
Sec. 7209. Parental responsibility contracts.
Sec. 7210. Expenditure of Federal funds in accordance with laws and procedures
applicable to expenditure of State funds.
Sec. 7211. Conforming amendments to the Social Security Act.
Sec. 7212. Conforming amendments to the Food Stamp Act of 1977 and related
provisions.
Sec. 7213. Conforming amendments to other laws.
Sec. 7214. Secretarial submission of legislative proposal for technical and con-
forming amendments.
Sec. 7215. Effective date; transition rule.
Subtitle D—Supplemental Security Income
CHAPTER 1—ELIGIBILITY RESTRICTIONS
Sec. 7251. Denial of supplemental security income benefits by reason of disability
to drug addicts and alcoholics.
Sec. 7252. Denial of SSI benefits for 10 years to individuals found to have fraud-
ulently misrepresented residence in order to obtain benefits si-
multaneously in 2 or more States.
Sec. 7253. Denial of SSI benefits for fugitive felons and probation and parole vio-
lators.
Sec. 7254. Effective dates; application to current recipients.
CHAPTER 2—BENEFITS FOR DISABLED CHILDREN
Sec. 7261. Definition and eligibility rules.
Sec. 7262. Eligibility redeterminations and continuing disability reviews.
Sec. 7263. Additional accountability requirements.
CHAPTER 3—STUDIES REGARDING SUPPLEMENTAL SECURITY INCOME
PROGRAM
Sec. 7271. Annual report on the supplemental security income program.
Sec. 7272. Improvements to disability evaluation.
Sec. 7273. Study of disability determination process.
Sec. 7274. Study by General Accounting Office.
CHAPTER 4—NATIONAL COMMISSION ON THE FUTURE OF DISABILITY
Sec. 7281. Establishment.
Sec. 7282. Duties of the Commission.
Sec. 7283. Membership.
Sec. 7284. Staff and support services.
Sec. 7285. Powers of Commission.
Sec. 7286. Reports.
Sec. 7287. Termination.
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Subtitle E—Child Support
CHAPTER 1—ELIGIBILITY FOR SERVICES; DISTRIBUTION OF PAYMENTS
Sec. 7301. State obligation to provide child support enforcement services.
Sec. 7302. Distribution of child support collections.
Sec. 7303. Rights to notification and hearings.
Sec. 7304. Privacy safeguards.
CHAPTER 2—LOCATE AND CASE TRACKING
Sec. 7311. State case registry.
Sec. 7312. Collection and disbursement of support payments.
Sec. 7313. State directory of new hires.
Sec. 7314. Amendments concerning income withholding.
Sec. 7315. Locator information from interstate networks.
Sec. 7316. Expansion of the Federal parent locator service.
Sec. 7317. Collection and use of social security numbers for use in child support
enforcement.
CHAPTER 3—STREAMLINING AND UNIFORMITY OF PROCEDURES
Sec. 7321. Adoption of uniform State laws.
Sec. 7322. Improvements to full faith and credit for child support orders.
Sec. 7323. Administrative enforcement in interstate cases.
Sec. 7324. Use of forms in interstate enforcement.
Sec. 7325. State laws providing expedited procedures.
CHAPTER 4—PATERNITY ESTABLISHMENT
Sec. 7331. State laws concerning paternity establishment.
Sec. 7332. Outreach for voluntary paternity establishment.
Sec. 7333. Cooperation by applicants for and recipients of temporary family as-
sistance.
CHAPTER 5—PROGRAM ADMINISTRATION AND FUNDING
Sec. 7341. Performance-based incentives and penalties.
Sec. 7342. Federal and State reviews and audits.
Sec. 7343. Required reporting procedures.
Sec. 7344. Automated data processing requirements.
Sec. 7345. Technical assistance.
Sec. 7346. Reports and data collection by the Secretary.
CHAPTER 6—ESTABLISHMENT AND MODIFICATION OF SUPPORT ORDERS
Sec. 7351. National Child Support Guidelines Commission.
Sec. 7352. Simplified process for review and adjustment of child support orders.
Sec. 7353. Furnishing consumer reports for certain purposes relating to child
support.
Sec. 7354. Nonliability for depository institutions providing financial records to
State child support enforcement agencies in child support cases.
CHAPTER 7—ENFORCEMENT OF SUPPORT ORDERS
Sec. 7361. Internal Revenue Service collection of arrearages.
Sec. 7362. Authority to collect support from Federal employees.
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Sec. 7363. Enforcement of child support obligations of members of the armed
forces.
Sec. 7364. Voiding of fraudulent transfers.
Sec. 7365. Work requirement for persons owing child support.
Sec. 7366. Definition of support order.
Sec. 7367. Reporting arrearages to credit bureaus.
Sec. 7368. Liens.
Sec. 7369. State law authorizing suspension of licenses.
Sec. 7370. Denial of passports for nonpayment of child support.
Sec. 7371. International child support enforcement.
Sec. 7372. Denial of means-tested Federal benefits to noncustodial parents who
are delinquent in paying child support.
Sec. 7373. Child support enforcement for Indian tribes.
Sec. 7374. Financial institution data matches.
Sec. 7375. Enforcement of orders against paternal grandparents in cases of minor
parents.
Sec. 7376. Sense of the Senate regarding the inability of the non-custodial parent
to pay child support.
CHAPTER 8—MEDICAL SUPPORT
Sec. 7378. Technical correction to ERISA definition of medical child support
order.
Sec. 7379. Enforcement of orders for health care coverage.
CHAPTER 9—ENHANCING RESPONSIBILITY AND OPPORTUNITY FOR
NONRESIDENTIAL PARENTS
Sec. 7381. Grants to States for access and visitation programs.
CHAPTER 10—EFFECT OF ENACTMENT
Sec. 7391. Effective dates.
Subtitle F—Noncitizens
Sec. 7401. State option to prohibit assistance for certain aliens.
Sec. 7402. Deemed income requirement for Federal and federally funded pro-
grams.
Sec. 7403. Requirements for sponsor’s affidavit of support.
Sec. 7404. Limited eligibility of noncitizens for SSI benefits.
Sec. 7405. Treatment of noncitizens.
Sec. 7406. Information reporting.
Sec. 7407. Prohibition on payment of Federal benefits to certain persons.
Subtitle G—Additional Provisions Relating To Welfare Reform
CHAPTER 1—REDUCTIONS IN FEDERAL GOVERNMENT POSITIONS
Sec. 7411. Reductions.
Sec. 7412. Reducing personnel in Washington, D.C. area.
CHAPTER 2—BLOCK GRANT FOR SOCIAL SERVICES.
Sec. 7421. Reduction in block grant for social services.
Sec. 7422. Establishing national goals to prevent teenage pregnancies.
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CHAPTER 3—FOSTER CARE MAINTENANCE PAYMENTS PROGRAM
Sec. 7431. Limitation on growth of administrative expenses for foster care main-
tenance payments program.
CHAPTER 4—MISCELLANEOUS PROVISIONS
Sec. 7441. Exemption of battered individuals from certain requirements.
Sec. 7442. Sense of the Senate on legislative accountability for unfunded man-
dates in welfare reform legislation.
Sec. 7443. Sense of the Senate regarding enforcement of statutory rape laws.
Sec. 7444. Sanctioning for testing positive for controlled substances.
Sec. 7445. Fraud under means-tested welfare and public assistance programs.
Subtitle H—Reform of the Earned Income Tax Credit
Sec. 7460. Amendment of 1986 code.
Sec. 7461. Earned income credit denied to individuals not authorized to be em-
ployed in the United States.
Sec. 7462. Repeal of earned income credit for individuals without children.
Sec. 7463. Modification of earned income credit amount and phaseout.
Sec. 7464. Rules relating to denial of earned income credit on basis of disquali-
fied income.
Sec. 7465. Modification of adjusted gross income definition for earned income
credit.
Sec. 7466. Provisions to improve tax compliance.
Subtitle I—Increase in Public Debt Limit
Sec. 7471. Increase in public debt limit.
Subtitle A—Medicare
CHAPTER 1—MEDICARE CHOICE PLANS
Subchapter A—Establishment of Medicare
Choice Plans
SEC. 7001. MEDICARE CHOICE PLANS.
(a) Title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.) is amended by adding at the end the following
new part:
‘‘PART D—MEDICARE CHOICE PLANS
‘‘SUBPART 1—DEFINITIONS
‘‘Sec. 1895A. Definitions.
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‘‘SUBPART 2—ENTITLEMENT OF MEDICARE CHOICE ELIGIBLE INDIVIDUALS TO
HEALTH CARE CHOICES
‘‘Sec. 1895B. Entitlement to medicare choices.
‘‘Sec. 1895C. Enrollment procedures.
‘‘Sec. 1895D. Effect of enrollment.
‘‘SUBPART 3—MEDICARE CHOICE PLAN REQUIREMENTS
‘‘Sec. 1895G. Availability and enrollment.
‘‘Sec. 1895H. Benefits provided to individuals.
‘‘Sec. 1895I. Licensing and financial requirements.
‘‘Sec. 1895J. Health plan standards.
‘‘SUBPART 4—DETERMINATION OF MEDICARE PAYMENT AMOUNTS AND REBATES
‘‘Sec. 1895M. Medicare payment amounts.
‘‘Sec. 1895N. Premiums and rebates.
‘‘Sec. 1895O. Payments to plan sponsors.
‘‘SUBPART 5—CONTRACTUAL AUTHORITY; TEMPORARY CERTIFICATION;
REGULATIONS
‘‘Sec. 1895P. General permission to contract.
‘‘Sec. 1895Q. Renewal and termination of contract.
‘‘Sec. 1895R. Temporary certification process for coordinated care plans.
‘‘Sec. 1895S. Regulations.
‘‘Subpart 1—Definitions
‘‘SEC. 1895A. DEFINITIONS.
‘‘(a) MEDICARE CHOICE PLAN.—In this part—
‘‘(1) IN GENERAL.—The term ‘medicare choice
plan’ means an eligible health plan with respect to
which there is a contract in effect under this part to
provide health benefits coverage to medicare choice eli-
gible individuals.
‘‘(2) MEDICARE
CHOICE
PLAN
SPONSOR.—The
terms ‘medicare choice plan sponsor’ and ‘plan spon-
sor’ mean a public or private entity which establishes
or maintains a medicare choice plan.
‘‘(b) TERMS RELATING TO HEALTH PLANS.—In this
part:
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‘‘(1) ELIGIBLE HEALTH PLAN.—
‘‘(A) IN
GENERAL.—The term ‘eligible
health plan’ means a policy, contract, or plan
which is capable of providing health benefits cov-
erage of items and services provided under the
traditional medicare program to medicare choice
eligible individuals.
‘‘(B) TYPES OF INSURANCE.—The term ‘eli-
gible health plan’ shall include any of the follow-
ing types of plans of health insurance:
‘‘(i) INDEMNITY OR FEE-FOR-SERVICE
PLANS.—Private indemnity plans that re-
imburse hospitals, physicians, and other
providers on the basis of a privately deter-
mined fee schedule.
‘‘(ii) COORDINATED
CARE
PLANS.—
Private managed or coordinated care plans
which provide health care services through
an integrated network of providers, includ-
ing—
‘‘(I) qualified health maintenance
organizations as defined in section
1310(d) of the Public Health Service
Act; and
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‘‘(II) preferred provider organiza-
tion plans, point of service plans, pro-
vider-sponsored network plans, or other
coordinated care plans.
‘‘(iii) OTHER HEALTH CARE PLANS.—
Any other private plan for the delivery of
health care items and services that is not
described in clause (i), or (ii).
‘‘(2) UNION OR ASSOCIATION PLAN.—
‘‘(A) IN GENERAL.—The term ‘union or as-
sociation plan’ means an eligible health plan
with a union sponsor, a Taft-Hartley sponsor, or
a qualified association sponsor that—
‘‘(i) is organized for purposes other
than to market a health plan;
‘‘(ii) may not condition its member-
ship on health status, health claims experi-
ence, receipt of health care, medical history,
or lack of evidence of insurability of a po-
tential member;
‘‘(iii) may not exclude a member or
spouse of a member from health plan cov-
erage based on factors described in clause
(ii);
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‘‘(iv) is a permanent entity which re-
ceives a substantial majority of its financial
support from active members; and
‘‘(v) may not be owned or controlled by
an insurance company.
‘‘(B) UNION
SPONSOR.—The term ‘union
sponsor’ means an employee organization that
establishes or maintains an eligible health plan
other than pursuant to a collective bargaining
agreement.
‘‘(C) TAFT-HARTLEY
SPONSOR.—The term
‘Taft-Hartley sponsor’ means, with respect to a
group health plan established or maintained by
2 or more employees or jointly by 1 or more em-
ployees and 1 or more employee organizations,
the association, committee, joint board of trust-
ees, or other similar group of representatives of
parties who establish or maintain the plan.
‘‘(D) QUALIFIED ASSOCIATION SPONSOR.—
The term ‘qualified association sponsor’ means
an association, religious fraternal organization,
or other organization (which may be a trade, in-
dustry, or professional association, a chamber of
commerce, or a public entity association) which
establishes or maintains an eligible health plan.
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‘‘(E) TERMS.—In this paragraph, the terms
‘employee’, ‘employee organization’, and ‘group
health plan’ have the meanings given such terms
for purposes of part 6 of subtitle B of title I of
the Employee Retirement Income Security Act of
1974.
‘‘(c) OTHER DEFINITIONS.—In this part:
‘‘(1) AREAS.—
‘‘(A) MEDICARE PAYMENT AREA.—
‘‘(i) IN GENERAL.—Except as provided
in clause (ii), the term ‘medicare payment
area’ means—
‘‘(I) a metropolitan statistical
area (whether or not such area is in a
single State) or in the case of a con-
solidated metropolitan statistical area,
each primary metropolitan statistical
area within the consolidated area; or
‘‘(II) one area within each State
composed of all areas that do not fall
within a metropolitan statistical area.
‘‘(ii) 
GEOGRAPHIC
ADJUSTMENT.—
Upon request of a State, the Secretary may
make a geographic adjustment to a medi-
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care payment area otherwise determined
under clause (i).
‘‘(iii) AREAS.—In this subparagraph,
the terms ‘metropolitan statistical area’,
‘consolidated metropolitan statistical area’,
and ‘primary metropolitan statistical area’
mean any area designated as such by the
Secretary of Commerce.
‘‘(B) MEDICARE SERVICE AREA.—
‘‘(i) IN GENERAL.—Except as provided
in clause (ii), the term ‘medicare service
area’ means a medicare payment area.
‘‘(ii) GEOGRAPHIC ADJUSTMENT.—The
Secretary may designate a medicare service
area other than a medicare payment area
for a medicare choice plan if the Secretary
determines that such designation would not
result in the enrollment of enrollees in the
plan in such area which are substantially
nonrepresentative, as determined in accord-
ance with regulations of the Secretary, of
the population in the medicare payment
area.
‘‘(2) MEDICARE CHOICE ELIGIBLE INDIVIDUAL.—
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‘‘(A) IN
GENERAL.—The term ‘medicare
choice eligible individual’ means an individual
who is entitled to benefits under part A and en-
rolled under part B.
‘‘(B) SPECIAL RULE FOR END-STAGE RENAL
DISEASE.—Such term shall not include an indi-
vidual medically determined to have end-stage
renal disease, except that an individual who de-
velops end-stage renal disease while enrolled in a
medicare choice plan may continue to be enrolled
in that plan. Not later than December 31, 1999,
the Secretary shall submit to the Congress rec-
ommendations on expanding the definition of
‘medicare choice eligible individual’ to include
individuals with end-stage renal disease and the
enrollment of such individuals in medicare
choice plans.
‘‘(3) TRADITIONAL
MEDICARE
PROGRAM.—The
term ‘traditional medicare program’ means the pro-
gram of benefits available to individuals entitled to
benefits under part A and enrolled under part B of
this title, other than enrollment in a medicare choice
plan under this part.
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‘‘Subpart 2—Entitlement of Medicare Choice Eligible
Individuals to Health Care Choices
‘‘SEC. 1895B. ENTITLEMENT TO MEDICARE CHOICES.
‘‘Each medicare choice eligible individual is entitled
to choose to receive health care items and services covered
under parts A and B—
‘‘(1) through the traditional medicare program;
or
‘‘(2) by receiving payments toward the individ-
ual’s enrollment in a medicare choice plan under this
part.
‘‘SEC. 1895C. ENROLLMENT PROCEDURES.
‘‘(a) IN GENERAL.—Except as provided in section
1895G(a)(2), each medicare choice eligible individual shall
be entitled to enroll in any medicare choice plan with a
medicare service area including the geographic area in
which the individual resides during—
‘‘(1) the annual open enrollment period described
in section 1895G(b)(1); or
‘‘(2) any other enrollment period described in
section 1895G(b)(2) applicable to the individual.
‘‘(b) 
METHOD
OF
ENROLLMENT
AND
DISENROLLMENT.—
‘‘(1) NOTICE PROVIDED TO THE SECRETARY.—
Each medicare choice eligible individual desiring to
enroll or terminate enrollment in a medicare choice
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plan shall provide the Secretary with notice of such
enrollment or disenrollment during any enrollment
period applicable to the individual. The Secretary
shall, to the extent feasible, provide for the receipt of
such notice by telephone, through the mail, and in
person at local social security offices.
‘‘(2) INFORMATION FORWARDED TO THE PLAN.—
The Secretary shall promptly provide each medicare
choice plan with notice of an individual’s enrollment
or disenrollment with the plan.
‘‘(c) NOTICES TO INDIVIDUALS TO ASSIST IN ENROLL-
MENT.—
‘‘(1) OPEN SEASON NOTIFICATION.—
‘‘(A) MAILING OF NOTICE.—By September
30 of each year beginning after 1995, the Sec-
retary shall mail a notice of eligibility to each
medicare choice eligible individual and each in-
dividual entitled to benefits under part A prior
to the end of the annual open enrollment period
described in section 1895G(b)(1).
‘‘(B) NOTICE DESCRIBED.—The notice de-
scribed in subparagraph (A) shall include an in-
formational brochure that includes the informa-
tion described in this section, and any other in-
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formation that the Secretary determines will as-
sist the individual’s enrollment decision.
‘‘(2) NOTIFICATION TO NEWLY MEDICARE CHOICE
ELIGIBLE INDIVIDUALS.—With respect to an individ-
ual who becomes eligible to enroll in a medicare
choice plan during the period described in section
1895G(b)(2)(A) and to whom paragraph (1) does not
apply, the Secretary shall, not later than 2 months
before the date on which the individual becomes eligi-
ble, mail to the individual the notice of eligibility de-
scribed in paragraph (1).
‘‘(d) SECRETARY’S MATERIALS; CONTENTS.—The no-
tice and informational materials mailed by the Secretary
under subsection (c) shall be written and formatted in the
most easily understandable manner possible, and shall in-
clude, at a minimum, the following:
‘‘(1) GENERAL INFORMATION.—General informa-
tion with respect to coverage under this part during
the next calendar year, including—
‘‘(A) the part B premium rates that will be
charged for part B coverage,
‘‘(B) the deductible, copayment, and coin-
surance amounts for coverage under the tradi-
tional medicare program,
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‘‘(C) a description of the coverage under the
traditional medicare program and any changes
in coverage under the program from the prior
year,
‘‘(D) a description of the individual’s medi-
care payment area, and the standardized medi-
care payment amount available with respect to
such individual,
‘‘(E) information and instructions on how
to enroll in a medicare choice plan,
‘‘(F) the right of each medicare choice plan
sponsor by law to terminate or refuse to renew
its contract and the effect the termination or
nonrenewal of its contract may have on individ-
uals enrolled with the medicare choice plan
under this part, and
‘‘(G) to the extent available, quality indica-
tors for the traditional medicare program and
each medicare choice plan, including—
‘‘(i) disenrollment rates for medicare
enrollees for the previous 2 years (excluding
disenrollment due to death or moving out-
side the plan’s medicare service area), and
‘‘(ii) information on medicare enrollee
satisfaction and health outcomes.
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‘‘(2) PLAN-SPECIFIC INFORMATION.—Information
for the next calendar year for each medicare choice
plan in the individual’s medicare payment area, in-
cluding—
‘‘(A) the plan’s medicare service area,
‘‘(B) the enrollee’s rights to benefits under
the plan, including—
‘‘(i) covered items and services,
‘‘(ii) 
deductible, 
coinsurance, 
and
copayment amounts, and
‘‘(iii) the enrollee’s liability for pay-
ment amounts billed in excess of the plan’s
fee schedule,
‘‘(C) the extent to which enrollees may select
the providers of their choice (from within or out-
side the plan’s network of providers if applica-
ble) and the restrictions (if any) on the plan’s
payment for services furnished to the enrollees by
other than the plan’s participating providers,
‘‘(D) out-of-area coverage provided by the
plan,
‘‘(E) coverage of emergency services and ur-
gently needed care,
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‘‘(F) appeal rights of enrollees, including
the right to address grievances to the Secretary
or the applicable external review entity,
‘‘(G) whether the plan is out-of-compliance
with any requirements of this part (as deter-
mined by the Secretary),
‘‘(H) the plan’s premium price submitted
under section 1895N(a)(1) and an indication of
the difference between such premium price and
the standardized medicare payment amount, and
‘‘(I) optional supplemental coverage avail-
able from the plan, including—
‘‘(i) the supplemental items and serv-
ices covered, and
‘‘(ii) the premium price for the op-
tional supplemental benefits.
‘‘(e) ASSISTANCE.—
‘‘(1) AGREEMENTS WITH COMMISSIONER OF SO-
CIAL SECURITY.—In order to promote the efficient ad-
ministration of this section and this part, the Sec-
retary may enter into an agreement with the Com-
missioner of Social Security under which the Com-
missioner performs administrative responsibilities re-
lating to enrollment and disenrollment under this sec-
tion.
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‘‘(2) USE OF NON-FEDERAL ENTITIES.—The Sec-
retary shall, to the maximum extent feasible, enter
into contracts with appropriate non-Federal entities
to carry out activities under subsection (d).
‘‘(3) PLANS.—Each medicare choice plan spon-
sor shall provide such information as the Secretary
requests with respect to a medicare choice plan in
order to carry out activities under subsection (d).
‘‘SEC. 1895D. EFFECT OF ENROLLMENT.
‘‘(a) PREMIUM DIFFERENTIALS.—If a medicare choice
eligible individual enrolls in a medicare choice plan, the
individual—
‘‘(1) shall receive a rebate in the amount deter-
mined under section 1895N(b) if the plan’s premium
is less than the standardized medicare payment
amount; and
‘‘(2) shall be required to pay the plan’s premium
in excess of the standardized medicare payment
amount.
‘‘(b) PERIOD OF ENROLLMENT.—
‘‘(1) ANNUAL ENROLLMENT PERIOD.—An indi-
vidual enrolling in a medicare choice plan during the
annual 
open 
enrollment 
period 
under 
section
1895G(b)(1) shall be enrolled in the plan for the cal-
endar year following the open enrollment period.
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‘‘(2) SPECIAL ENROLLMENT PERIODS.—An indi-
vidual enrolling in a plan under section 1895G(b)(2)
shall be enrolled in the plan for the portion of the cal-
ender year on and after the date on which the enroll-
ment becomes effective (as specified by the Secretary).
‘‘(3) TERMINATIONS.—
‘‘(A) IN
GENERAL.—Except as otherwise
provided in this subsection, an individual may
not terminate enrollment in a medicare choice
plan before the next annual open enrollment pe-
riod applicable to the individual.
‘‘(B) QUALIFYING EVENTS.—Notwithstand-
ing subparagraph (A), an individual may termi-
nate enrollment in a medicare choice plan if—
‘‘(i) the individual moves to a new
medicare service area, or
‘‘(ii) the individual has experienced a
qualifying event (as determined by the Sec-
retary).
‘‘(C) FOR
CAUSE.—Notwithstanding sub-
paragraph (A), an individual may terminate en-
rollment in a medicare choice plan if the plan
fails to meet quality or capacity standards or for
other cause as determined by the Secretary.
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‘‘(D) TERMINATION AFTER INITIAL ENROLL-
MENT.—An individual may terminate enroll-
ment in a medicare choice plan within 90 days
of the individual’s initial enrollment in such
medicare choice plan and enroll in another med-
icare choice plan or the traditional medicare
program.
‘‘(4) SEAMLESS
ENROLLMENT.—If a medicare
choice eligible individual is enrolled in a medicare
choice plan under this part and such individual fails
to provide the Secretary with notice of the individ-
ual’s enrollment or disenrollment under section
1895C(b)(1) during any open enrollment period ap-
plicable to the individual, the individual shall be
deemed to have reenrolled in the plan.
‘‘(5) SPECIAL
RULES
FOR
HIGH
DEDUCTIBLE
PLANS.—In the case of a high deductible plan de-
scribed in section 1895A(b)(1)(B)(iii) operated in
connection with a medicare choice account, an indi-
vidual may not terminate enrollment in the plan
(other than under paragraph (3) (B), (C), or (D))
without at least 12 months notice given during the
annual 
open 
enrollment 
period 
under 
section
1895G(b)(1).
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‘‘(6) SPECIAL RULES FOR UNION, TAFT-HART-
LEY, OR ASSOCIATION PLANS.—The Secretary shall es-
tablish special enrollment rules for the enrollment of
individuals in medicare choice plans that are union
or association-sponsored health plans described in sec-
tion 1895A(b)(2).
‘‘(c) SOLE PAYMENTS.—Subject to subsections (d)(2)
and (e) of section 1895H, payments under a contract to
a medicare choice plan under section 1895O and for rebates
under section 1895N(b) shall be instead of the amounts
which (in the absence of the contract) would be otherwise
payable under the traditional medicare program for items
or services furnished to individuals enrolled with the plan
under this section.
‘‘Subpart 3—Medicare Choice Plan Requirements
‘‘SEC. 1895G. AVAILABILITY AND ENROLLMENT.
‘‘(a) GENERAL AVAILABILITY.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), each medicare choice plan sponsor shall
provide that each medicare choice eligible individual
shall be eligible to enroll under this part in a medi-
care choice plan of the sponsor during an enrollment
period applicable to such individual if the plan’s
medicare service area includes the geographic area in
which the individual resides.
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‘‘(2) EXCEPTIONS.—
‘‘(A) ACCEPTANCE
TO
LIMITS
OF
CAPAC-
ITY.—Each medicare choice plan sponsor shall
provide that, at any time during which enroll-
ments are accepted, the plan sponsor will accept
medicare choice eligible individuals in the order
in which they apply for enrollment up to the
limits of the medicare choice plan’s capacity (as
determined by the Secretary) and without re-
strictions, except as may be authorized in regula-
tions. The preceding sentence shall not apply if
it would result in the enrollment of enrollees sub-
stantially nonrepresentative, as determined in
accordance with regulations of the Secretary, of
the medicare population in the medicare service
area of the plan.
‘‘(B) UNION, TAFT-HARTLEY, OR ASSOCIA-
TION HEALTH PLAN.—A medicare choice plan
sponsor of a union or association plan described
in section 1895A(b)(2) shall limit its enrollment
to members of the sponsoring group who are en-
titled to all rights and privileges of any other
members of the group and spouses of such mem-
bers. An association plan which is sponsored by
a religious fraternal benefit society may limit
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membership to individuals who share the same
religious convictions as the society.
‘‘(3) POINT-OF-SERVICE COVERAGE.—If a Medi-
care Choice sponsor offers a Medicare Choice plan
that limits benefits to items and services furnished
only by providers in a network of providers which
have entered into a contract with the sponsor, the
sponsor must also offer at the time of enrollment, a
Medicare Choice plan that permits payment to be
made under the plan for covered items and services
when obtained out-of-network by the individual.
‘‘(b) ENROLLMENT PERIODS.—
‘‘(1) ANNUAL
OPEN
ENROLLMENT
PERIOD.—
Each medicare choice plan sponsor shall offer an an-
nual open enrollment period in November of each
year for the enrollment and termination of enrollment
of medicare choice eligible individuals for the next
year.
‘‘(2) ADDITIONAL
PERIODS.—Each medicare
choice plan sponsor shall accept the enrollment of an
individual in the medicare choice plan—
‘‘(A) during the initial medicare enrollment
period specified by section 1837 that applies to
the individual (effective as specified by section
1838), and
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‘‘(B) during the period specified by the Sec-
retary following any termination of the enroll-
ment of the individual in a medicare choice plan
under subparagraph (B), (C), or (D) of section
1895D(b)(3).
‘‘(c) PLAN PARTICIPATION
IN ENROLLMENT PROC-
ESS.—
‘‘(1) IN GENERAL.—In addition to any informa-
tional materials distributed by the Secretary under
section 1895C(c), a medicare choice plan sponsor may
develop and distribute marketing materials and en-
gage in marketing strategies in accordance with this
subsection.
‘‘(2) PLAN MARKETING AND ADVERTISING STAND-
ARDS.—Any marketing material developed or distrib-
uted by a medicare choice plan sponsor and any mar-
keting strategy developed by such plan sponsor—
‘‘(A) shall accurately describe differences be-
tween health care coverage available under the
plan and the health care coverage available
under the traditional medicare program,
‘‘(B) shall be pursued in a manner not in-
tended to violate the nondiscrimination require-
ment of section 1895J(e)(1), and
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‘‘(C) shall not contain false or materially
misleading information, and shall conform to
any other fair marketing and advertising stand-
ards and requirements applicable to such plans
under law.
‘‘(3) PRIOR APPROVAL BY SECRETARY.—
‘‘(A) IN GENERAL.—No marketing materials
may be distributed by a medicare choice plan
sponsor to (or for the use of) individuals eligible
to enroll with the plan under this part unless—
‘‘(i) at least 45 days before its distribu-
tion, the plan has submitted the material to
the Secretary for review, and
‘‘(ii) the Secretary has not disapproved
the distribution of the material.
‘‘(B) REVIEW.—The Secretary shall review
all marketing materials submitted under guide-
lines established by the Secretary and shall dis-
approve such material if the Secretary deter-
mines, in the Secretary’s discretion, that the ma-
terial is materially inaccurate or misleading or
otherwise makes a material misrepresentation.
‘‘(C) DEEMED
APPROVAL.—If marketing
material has been submitted under subparagraph
(A) to the Secretary or a regional office of the
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Department of Health and Human Services and
the Secretary or the office has not disapproved
the distribution of the materials under subpara-
graph (B) with respect to an area, the Secretary
is deemed not to have disapproved such distribu-
tion in all areas covered by the plan.
‘‘SEC. 1895H. BENEFITS PROVIDED TO INDIVIDUALS.
‘‘(a) BASIC BENEFITS.—Each medicare choice plan
shall provide to members enrolled under this part, through
providers and other persons that meet the applicable re-
quirements of this title and part A of title XI—
‘‘(1) those items and services covered under parts
A and B of this title which are available to individ-
uals residing in the medicare service area of the plan,
and
‘‘(2) additional health services as the Secretary
may approve.
The Secretary shall approve any such additional health
care services which the plan proposes to offer to such mem-
bers, unless the Secretary determines that including such
additional services will substantially discourage enrollment
by medicare choice eligible individuals with the plan.
‘‘(b) SUPPLEMENTAL
BENEFITS.—Each medicare
choice plan may offer optional supplemental benefits to each
individual enrolled in the plan under this part for an addi-
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tional premium amount. If the supplemental benefits are
offered only to individuals enrolled in the sponsor’s plan
under this part, the additional premium amount shall be
the same for all enrolled individuals in the medicare pay-
ment area. Such benefits may be marketed and sold by the
medicare choice plan sponsor outside of the enrollment proc-
ess described in section 1895D(b).
‘‘(c) COST-SHARING.—
‘‘(1) ENROLLEE COST-SHARING UNDER CHOICE
PLAN
MAY
NOT
EXCEED
MEDICARE
ENROLLEE
COST.—Except as provided in paragraph (2), in no
event may the average total amount of deductibles, co-
insurance, and copayments charged an individual
under a medicare choice plan with respect to basic
benefits described in subsection (a)(1) for a year ex-
ceed the average total amount of deductibles, coinsur-
ance, and copayments charged an individual under
the traditional medicare program for a year.
‘‘(2) HIGH DEDUCTIBLE PLANS.—Subparagraph
(A) shall not apply to a high deductible plan de-
scribed in section 1895A(b)(1)(B)(iii).
‘‘(3) DETERMINATION ON OTHER BASIS.—If the
Secretary determines that adequate data are not
available to determine the average amount under
paragraph (1), the Secretary may determine such
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amount with respect to all individuals in the medi-
care payment area, the State, or in the United States,
eligible to enroll in such plan under this part or on
the basis of other appropriate data.
‘‘(d) NATIONAL COVERAGE DETERMINATION.—If there
is a national coverage determination made in the period
beginning on the date of an announcement under section
1895M(a) and ending on the date of the next announcement
under such section and the Secretary projects that the deter-
mination will result in a significant change in the costs
to the medicare choice plan of providing the benefits that
are the subject of such national coverage determination and
that such change in costs was not incorporated in the deter-
mination of the medicare payment amount included in the
announcement made at the beginning of such period—
‘‘(1) such determination shall not apply to con-
tracts under this part until the first contract year
that begins after the end of such period, and
‘‘(2) if such coverage determination provides for
coverage of additional benefits or coverage under ad-
ditional circumstances, section 1895I(b)(2) shall not
apply to payment for such additional benefits or ben-
efits provided under such additional circumstances
until the first contract year that begins after the end
of such period,
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unless otherwise required by law.
‘‘(e) OVERLAPPING PERIODS OF COVERAGE.—A con-
tract under this part shall provide that in the case of an
individual who is receiving inpatient hospital services from
a 
subsection 
(d) 
hospital 
(as 
defined 
in 
section
1886(d)(1)(B)) as of the effective date of the individual’s—
‘‘(1) enrollment with a medicare choice plan
under this part—
‘‘(A) payment for such services until the
date of the individual’s discharge shall be made
under this title as if the individual were not en-
rolled with the plan,
‘‘(B) the plan sponsor shall not be finan-
cially responsible for payment for such services
until the date after the date of the individual’s
discharge, and
‘‘(C) the plan sponsor shall nonetheless be
paid the full amount otherwise payable to the
plan under this part, or
‘‘(2) termination of enrollment with a medicare
choice plan under this part—
‘‘(A) the plan sponsor shall be financially
responsible for payment for such services after
such date and until the date of the individual’s
discharge,
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‘‘(B) payment for such services during the
stay shall not be made under section 1886(d),
and
‘‘(C) the plan sponsor shall not receive any
payment with respect to the individual under
this part during the period the individual is not
enrolled.
‘‘(f) ORGANIZATION AS SECONDARY PAYER.—Notwith-
standing any other provision of law, a medicare choice plan
sponsor may (in the case of the provision of services to an
individual under this part under circumstances in which
payment is made secondary pursuant to section 1862(b)(2))
charge or authorize the provider of such services to charge,
in accordance with the charges allowed under the law, plan,
or policy which is the primary payer under such cir-
cumstances—
‘‘(1) the insurance carrier, employer, or other en-
tity which under such law, plan, or policy is to pay
for the provision of such services, or
‘‘(2) such individual to the extent that the indi-
vidual has been paid under such law, plan, or policy
for such services.
‘‘SEC. 1895I. LICENSING AND FINANCIAL REQUIREMENTS.
‘‘(a) LICENSING REQUIREMENT.—
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‘‘(1) IN
GENERAL.—A medicare choice plan
sponsor shall be organized and licensed under appli-
cable State law as a risk-bearing entity eligible to
offer health insurance or health benefits coverage in
each State in which the medicare choice plan enrolls
individuals under this part.
‘‘(2) EXCEPTION FOR UNION, TAFT-HARTLEY, OR
ASSOCIATION PLANS.—Paragraph (1) shall not apply
to a union or association plan described in section
1895A(b)(2) if such plan is exempt from such require-
ments under the Employee Retirement Income Secu-
rity Act of 1974.
‘‘(3) COORDINATED
CARE
PLANS.—Paragraph
(1) shall apply to a coordinated care plan except to
the extent provided in section 1895R.
‘‘(b) ASSUMPTION OF FULL FINANCIAL RISK.—A med-
icare choice plan sponsor shall assume full financial risk
on a prospective basis for the provision of health care serv-
ices for which benefits are required to be provided under
section 1895H(a)(1), except that such plan sponsor may—
‘‘(1) obtain insurance or make other arrange-
ments for the cost of such health care services the ag-
gregate value of which exceeds $5,000 in any year,
‘‘(2) obtain insurance or make other arrange-
ments for the cost of such health care services provided
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to its enrolled members other than through the plan
sponsor because medical necessity required their pro-
vision before they could be secured through the plan
sponsor,
‘‘(3) obtain insurance or make other arrange-
ments for not more than 90 percent of the amount by
which its costs for any of its fiscal years exceed 115
percent of its income for such fiscal year, and
‘‘(4) make arrangements with physicians or
other health professionals, health care institutions, or
any combination of such individuals or institutions
to assume all or part of the financial risk on a pro-
spective basis for the provision of basic health services
by the physicians or other health professionals or
through the institutions.
‘‘(c) PROTECTION AGAINST RISK OF INSOLVENCY.—
‘‘(1) IN
GENERAL.—A medicare choice plan
sponsor shall make adequate provision against the
risk of insolvency (including provision to prevent en-
rollees from being held liable to any person or entity
for the plan sponsor’s debts in the event of the plan
sponsor’s insolvency)—
‘‘(A) as determined by the Secretary, or
‘‘(B) as determined by a State which the
Secretary determines requires solvency standards
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at least as stringent as the standards under sub-
paragraph (A).
‘‘(2) FACTORS
TO
CONSIDER.—In establishing
standards under paragraph (1) for coordinated care
plans described in section 1895A(b)(1)(B)(ii), the Sec-
retary shall consult with interested parties and shall
take into account—
‘‘(A) a coordinated care plan sponsor’s de-
livery system assets and its ability to provide
services directly to enrollees through affiliated
providers, and
‘‘(B) 
alternative 
means 
of 
protecting
against insolvency, including reinsurance, unre-
stricted surplus, letters of credit, guarantees, or-
ganizational insurance coverage, and partner-
ships with other licensed entities.
The Secretary is not required to include alternative
means described in subparagraph (B) in the stand-
ards but may consider such alternatives where con-
sistent with the standards.
‘‘(d) PAYMENTS TO THE PLAN.—
‘‘(1) PREPAID
PAYMENT.—A medicare choice
plan sponsor shall be compensated (except for
deductibles, coinsurance, and copayments) for the pro-
vision of health care services to individuals enrolled
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under this part by a payment by the Secretary (and
if applicable, the individual) which is paid on a peri-
odic basis without regard to the date the health care
services are provided and which is fixed without re-
gard to the frequency, extent, or kind of health care
service actually provided to a member.
‘‘(2) SOLE
PAYMENTS.—Subject to subsections
(d)(2) and (e) of section 1895H, if an individual is
enrolled under this part with a medicare choice plan,
only the plan sponsor shall be entitled to receive pay-
ments from the Secretary under this title for services
furnished to the individual.
‘‘SEC. 1895J. HEALTH PLAN STANDARDS.
‘‘(a) IN GENERAL.—Each medicare choice plan spon-
sor shall meet the requirements of this section.
‘‘(b) QUALITY ASSURANCE AND ACCREDITATION.—
‘‘(1) INTERNAL REVIEW.—
‘‘(A) IN GENERAL.—Each medicare choice
plan sponsor must establish an ongoing quality
assurance program (in accordance with regula-
tions established by the Secretary) for health care
services it provides to such individuals.
‘‘(B) ELEMENTS OF PROGRAM.—The quality
assurance program established under subpara-
graph (A) shall—
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rates determined under subparagraph (B)
for all medicare payment areas for 1996.
‘‘(2) SUCCEEDING YEARS.—
‘‘(A) IN GENERAL.—The standardized medi-
care payment amount for any calendar year
after 1997 in a medicare payment area shall be
an amount equal to the standardized medicare
payment amount determined for such area for
the preceding year, increased by the percentage
increase in the gross domestic product per capita
for the 12-month period ending on June 30 of
the preceding calendar year.
‘‘(B) SPECIAL RULE FOR 1998.—In applying
subparagraph (A) for 1998, the standardized
medicare payment amount for the preceding cal-
endar year shall be the amount which would
have been determined if clause (ii) of paragraph
(1)(B) had been applied by substituting ‘100
percent’ for ‘50 percent’.
‘‘(3) SPECIAL
RULE
FOR
INDIVIDUALS
WITH
END-STAGE
RENAL
DISEASE.—In computing the
standardized medicare payment amount for any med-
icare payment area, there shall not be taken into ac-
count any individuals with end-stage renal disease or
any medicare expenditures for such individuals.