285 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to contributions made during taxable 
years beginning after December 31, 2007. 
SEC. 322. TAX INCENTIVES FOR INVESTMENT IN THE DIS-
TRICT OF COLUMBIA. 
(a) DESIGNATION OF ZONE.— 
(1) IN GENERAL.—Subsection (f) of section 1400 
is amended by striking ‘‘2007’’ both places it appears 
and inserting ‘‘2009’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to periods beginning 
after December 31, 2007. 
(b) TAX-EXEMPT ECONOMIC DEVELOPMENT BONDS.— 
(1) IN
GENERAL.—Subsection (b) of section 
1400A is amended by striking ‘‘2007’’ and inserting 
‘‘2009’’. 
(2) EFFECTIVE DATE.—The amendment made by 
this subsection shall apply to bonds issued after De-
cember 31, 2007. 
(c) ZERO PERCENT CAPITAL GAINS RATE.— 
(1) IN
GENERAL.—Subsection (b) of section 
1400B is amended by striking ‘‘2008’’ each place it 
appears and inserting ‘‘2010’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 1400B(e)(2) is amended—
286 
(i) by striking ‘‘2012’’ and inserting 
‘‘2014’’, and 
(ii) by striking ‘‘2012’’ in the heading 
thereof and inserting ‘‘2014’’. 
(B) Section 1400B(g)(2) is amended by 
striking ‘‘2012’’ and inserting ‘‘2014’’. 
(C) Section 1400F(d) is amended by strik-
ing ‘‘2012’’ and inserting ‘‘2014’’. 
(3) EFFECTIVE DATES.— 
(A) EXTENSION.—The amendments made 
by paragraph (1) shall apply to acquisitions 
after December 31, 2007. 
(B) 
CONFORMING
AMENDMENTS.—The 
amendments made by paragraph (2) shall take 
effect on the date of the enactment of this Act. 
(d) FIRST-TIME HOMEBUYER CREDIT.— 
(1) IN
GENERAL.—Subsection (i) of section 
1400C is amended by striking ‘‘2008’’ and inserting 
‘‘2010’’. 
(2) EFFECTIVE DATE.—The amendment made by 
this subsection shall apply to property purchased 
after December 31, 2007. 
SEC. 323. ENHANCED CHARITABLE DEDUCTIONS FOR CON-
TRIBUTIONS OF FOOD INVENTORY. 
(a) INCREASED AMOUNT OF DEDUCTION.—
287 
(1) 
IN
GENERAL.—Clause 
(iv) 
of 
section 
170(e)(3)(C) (relating to termination) is amended by 
striking ‘‘December 31, 2007’’ and inserting ‘‘Decem-
ber 31, 2009’’. 
(2) EFFECTIVE DATE.—The amendment made by 
this subsection shall apply to contributions made 
after December 31, 2007. 
(b) TEMPORARY SUSPENSION
OF LIMITATIONS
ON 
CHARITABLE CONTRIBUTIONS.— 
(1) IN GENERAL.—Section 170(b) is amended by 
adding at the end the following new paragraph: 
‘‘(3) TEMPORARY SUSPENSION OF LIMITATIONS 
ON CHARITABLE CONTRIBUTIONS.—In the case of a 
qualified farmer or rancher (as defined in paragraph 
(1)(E)(v)), any charitable contribution of food— 
‘‘(A) to which subsection (e)(3)(C) applies 
(without regard to clause (ii) thereof), and 
‘‘(B) which is made during the period be-
ginning on the date of the enactment of this 
paragraph and before January 1, 2009, 
shall be treated for purposes of paragraph (1)(E) or 
(2)(B), whichever is applicable, as if it were a quali-
fied conservation contribution which is made by a 
qualified farmer or rancher and which otherwise 
meets the requirements of such paragraph.’’.
288 
(2) EFFECTIVE DATE.—The amendment made by 
this subsection shall apply to taxable years ending 
after the date of the enactment of this Act. 
SEC. 324. EXTENSION OF ENHANCED CHARITABLE DEDUC-
TION FOR CONTRIBUTIONS OF BOOK INVEN-
TORY. 
(a) EXTENSION.—Clause (iv) of section 170(e)(3)(D) 
(relating to termination) is amended by striking ‘‘December 
31, 2007’’ and inserting ‘‘December 31, 2009’’. 
(b) CLERICAL AMENDMENT.—Clause (iii) of section 
170(e)(3)(D) (relating to certification by donee) is amended 
by inserting ‘‘of books’’ after ‘‘to any contribution’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to contributions made after December 
31, 2007. 
SEC. 325. EXTENSION AND MODIFICATION OF DUTY SUS-
PENSION ON WOOL PRODUCTS; WOOL RE-
SEARCH FUND; WOOL DUTY REFUNDS. 
(a) EXTENSION OF TEMPORARY DUTY REDUCTIONS.— 
Each of the following headings of the Harmonized Tariff 
Schedule of the United States is amended by striking the 
date in the effective period column and inserting ‘‘12/31/ 
2014’’: 
(1) Heading 9902.51.11 (relating to fabrics of 
worsted wool).
289 
(2) Heading 9902.51.13 (relating to yarn of 
combed wool). 
(3) Heading 9902.51.14 (relating to wool fiber, 
waste, garnetted stock, combed wool, or wool top). 
(4) Heading 9902.51.15 (relating to fabrics of 
combed wool). 
(5) Heading 9902.51.16 (relating to fabrics of 
combed wool). 
(b) EXTENSION OF DUTY REFUNDS AND WOOL RE-
SEARCH TRUST FUND.— 
(1) IN GENERAL.—Section 4002(c) of the Wool 
Suit and Textile Trade Extension Act of 2004 (Public 
Law 108–429; 118 Stat. 2603) is amended— 
(A) in paragraph (3)(C), by striking 
‘‘2010’’ and inserting ‘‘2015’’; and 
(B) in paragraph (6)(A), by striking 
‘‘through 2009’’ and inserting ‘‘through 2014’’. 
(2) SUNSET.—Section 506(f) of the Trade and 
Development Act of 2000 (Public 106–200; 114 Stat. 
303 (7 U.S.C. 7101 note)) is amended by striking 
‘‘2010’’ and inserting ‘‘2015’’.
290 
TITLE IV—EXTENSION OF TAX 
ADMINISTRATION PROVISIONS 
SEC. 401. PERMANENT AUTHORITY FOR UNDERCOVER OP-
ERATIONS. 
(a) IN GENERAL.—Section 7608(c) (relating to rules 
relating to undercover operations) is amended by striking 
paragraph (6). 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to operations conducted after the date 
of the enactment of this Act. 
SEC. 402. PERMANENT AUTHORITY FOR DISCLOSURE OF IN-
FORMATION RELATING TO TERRORIST AC-
TIVITIES. 
(a) DISCLOSURE OF RETURN INFORMATION TO AP-
PRISE APPROPRIATE OFFICIALS OF TERRORIST ACTIVI-
TIES.—Subparagraph (C) of section 6103(i)(3) is amended 
by striking clause (iv). 
(b) DISCLOSURE UPON REQUEST OF INFORMATION 
RELATING TO TERRORIST ACTIVITIES.—Paragraph (7) of 
section 6103(i) is amended by striking subparagraph (E). 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to disclosures after the date of the enact-
ment of this Act.
291 
TITLE V—ADDITIONAL TAX RE-
LIEF AND OTHER TAX PROVI-
SIONS 
Subtitle A—General Provisions 
SEC. 501. $8,500 INCOME THRESHOLD USED TO CALCULATE 
REFUNDABLE PORTION OF CHILD TAX CRED-
IT. 
(a) IN GENERAL.—Section 24(d) is amended by add-
ing at the end the following new paragraph: 
‘‘(4) SPECIAL RULE FOR 2008.—Notwithstanding 
paragraph (3), in the case of any taxable year begin-
ning in 2008, the dollar amount in effect for such 
taxable year under paragraph (1)(B)(i) shall be 
$8,500.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2007. 
SEC. 502. PROVISIONS RELATED TO FILM AND TELEVISION 
PRODUCTIONS. 
(a) EXTENSION OF EXPENSING RULES FOR QUALIFIED 
FILM AND TELEVISION PRODUCTIONS.—Section 181(f) (re-
lating to termination) is amended by striking ‘‘December 
31, 2008’’ and inserting ‘‘December 31, 2009’’.
292 
(b) MODIFICATION OF LIMITATION ON EXPENSING.— 
Subparagraph (A) of section 181(a)(2) is amended to read 
as follows: 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to so much of the aggregate cost of any 
qualified film or television production as exceeds 
$15,000,000.’’. 
(c) MODIFICATIONS TO DEDUCTION FOR DOMESTIC 
ACTIVITIES.— 
(1) DETERMINATION
OF
W–2
WAGES.—Para-
graph (2) of section 199(b) is amended by adding at 
the end the following new subparagraph: 
‘‘(D) 
SPECIAL
RULE
FOR
QUALIFIED 
FILM.—In the case of a qualified film, such term 
shall include compensation for services performed 
in the United States by actors, production per-
sonnel, directors, and producers.’’. 
(2) DEFINITION
OF
QUALIFIED
FILM.—Para-
graph (6) of section 199(c) is amended by adding at 
the end the following: ‘‘A qualified film shall include 
any copyrights, trademarks, or other intangibles with 
respect to such film. The methods and means of dis-
tributing a qualified film shall not affect the avail-
ability of the deduction under this section.’’.
293 
(3) PARTNERSHIPS.—Subparagraph (A) of sec-
tion 199(d)(1) is amended by striking ‘‘and’’ at the 
end of clause (ii), by striking the period at the end 
of clause (iii) and inserting ‘‘, and’’, and by adding 
at the end the following new clause: 
‘‘(iv) in the case of each partner of a 
partnership, or shareholder of an S corpora-
tion, who owns (directly or indirectly) at 
least 20 percent of the capital interests in 
such partnership or of the stock of such S 
corporation— 
‘‘(I) such partner or shareholder 
shall be treated as having engaged di-
rectly in any film produced by such 
partnership or S corporation, and 
‘‘(II) such partnership or S cor-
poration shall be treated as having en-
gaged directly in any film produced by 
such partner or shareholder.’’. 
(d) CONFORMING AMENDMENT.—Section 181(d)(3)(A) 
is amended by striking ‘‘actors’’ and all that follows and 
inserting ‘‘actors, production personnel, directors, and pro-
ducers.’’. 
(e) EFFECTIVE DATES.—
294 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion shall apply to qualified film and television pro-
ductions commencing after December 31, 2007. 
(2) DEDUCTION.—The amendments made by sub-
section (c) shall apply to taxable years beginning 
after December 31, 2007. 
SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN 
WOODEN ARROWS DESIGNED FOR USE BY 
CHILDREN. 
(a) IN GENERAL.—Paragraph (2) of section 4161(b) 
is amended by redesignating subparagraph (B) as subpara-
graph (C) and by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
‘‘(B) EXEMPTION
FOR
CERTAIN
WOODEN 
ARROW
SHAFTS.—Subparagraph (A) shall not 
apply to any shaft consisting of all natural wood 
with no laminations or artificial means of en-
hancing the spine of such shaft (whether sold sep-
arately or incorporated as part of a finished or 
unfinished product) of a type used in the manu-
facture of any arrow which after its assembly— 
‘‘(i) measures 5⁄16 of an inch or less in 
diameter, and
295 
‘‘(ii) is not suitable for use with a bow 
described in paragraph (1)(A).’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to shafts first sold after the date of enact-
ment of this Act. 
SEC. 504. INCOME AVERAGING FOR AMOUNTS RECEIVED IN 
CONNECTION WITH THE EXXON VALDEZ LITI-
GATION. 
(a) INCOME AVERAGING OF AMOUNTS RECEIVED FROM 
THE EXXON VALDEZ LITIGATION.—For purposes of section 
1301 of the Internal Revenue Code of 1986— 
(1) any qualified taxpayer who receives any 
qualified settlement income in any taxable year shall 
be treated as engaged in a fishing business (deter-
mined without regard to the commercial nature of the 
business), and 
(2) such qualified settlement income shall be 
treated as income attributable to such a fishing busi-
ness for such taxable year. 
(b) CONTRIBUTIONS OF AMOUNTS RECEIVED TO RE-
TIREMENT ACCOUNTS.— 
(1) IN GENERAL.—Any qualified taxpayer who 
receives qualified settlement income during the tax-
able year may, at any time before the end of the tax-
able year in which such income was received, make
296 
one or more contributions to an eligible retirement 
plan of which such qualified taxpayer is a beneficiary 
in an aggregate amount not to exceed the lesser of— 
(A) $100,000 (reduced by the amount of 
qualified settlement income contributed to an eli-
gible retirement plan in prior taxable years pur-
suant to this subsection), or 
(B) the amount of qualified settlement in-
come received by the individual during the tax-
able year. 
(2) 
TIME
WHEN
CONTRIBUTIONS
DEEMED 
MADE.—For purposes of paragraph (1), a qualified 
taxpayer shall be deemed to have made a contribution 
to an eligible retirement plan on the last day of the 
taxable year in which such income is received if the 
contribution is made on account of such taxable year 
and is made not later than the time prescribed by law 
for filing the return for such taxable year (not includ-
ing extensions thereof). 
(3) TREATMENT OF CONTRIBUTIONS TO ELIGIBLE 
RETIREMENT PLANS.—For purposes of the Internal 
Revenue Code of 1986, if a contribution is made pur-
suant to paragraph (1) with respect to qualified set-
tlement income, then— 
(A) except as provided in paragraph (4)—
297 
(i) to the extent of such contribution, 
the qualified settlement income shall not be 
included in taxable income, and 
(ii) for purposes of section 72 of such 
Code, such contribution shall not be consid-
ered to be investment in the contract, 
(B) the qualified taxpayer shall, to the ex-
tent of the amount of the contribution, be treat-
ed— 
(i) as having received the qualified set-
tlement income— 
(I) in the case of a contribution to 
an individual retirement plan (as de-
fined under section 7701(a)(37) of such 
Code), in a distribution described in 
section 408(d)(3) of such Code, and 
(II) in the case of any other eligi-
ble retirement plan, in an eligible roll-
over distribution (as defined under sec-
tion 402(f)(2) of such Code), and 
(ii) as having transferred the amount 
to the eligible retirement plan in a direct 
trustee to trustee transfer within 60 days of 
the distribution,
298 
(C) section 408(d)(3)(B) of the Internal 
Revenue Code of 1986 shall not apply with re-
spect to amounts treated as a rollover under this 
paragraph, and 
(D) section 408A(c)(3)(B) of the Internal 
Revenue Code of 1986 shall not apply with re-
spect to amounts contributed to a Roth IRA (as 
defined under section 408A(b) of such Code) or 
a designated Roth contribution to an applicable 
retirement plan (within the meaning of section 
402A of such Code) under this paragraph. 
(4) SPECIAL RULE FOR ROTH IRAS AND ROTH 
401(k)S.—For purposes of the Internal Revenue Code 
of 1986, if a contribution is made pursuant to para-
graph (1) with respect to qualified settlement income 
to a Roth IRA (as defined under section 408A(b) of 
such Code) or as a designated Roth contribution to an 
applicable retirement plan (within the meaning of 
section 402A of such Code), then— 
(A) the qualified settlement income shall be 
includible in taxable income, and 
(B) for purposes of section 72 of such Code, 
such contribution shall be considered to be in-
vestment in the contract.
299 
(5) ELIGIBLE RETIREMENT PLAN.—For purpose 
of this subsection, the term ‘‘eligible retirement plan’’ 
has the meaning given such term under section 
402(c)(8)(B) of the Internal Revenue Code of 1986. 
(c) TREATMENT OF QUALIFIED SETTLEMENT INCOME 
UNDER EMPLOYMENT TAXES.— 
(1) SECA.—For purposes of chapter 2 of the In-
ternal Revenue Code of 1986 and section 211 of the 
Social Security Act, no portion of qualified settlement 
income received by a qualified taxpayer shall be treat-
ed as self-employment income. 
(2) FICA.—For purposes of chapter 21 of the In-
ternal Revenue Code of 1986 and section 209 of the 
Social Security Act, no portion of qualified settlement 
income received by a qualified taxpayer shall be treat-
ed as wages. 
(d) QUALIFIED TAXPAYER.—For purposes of this sec-
tion, the term ‘‘qualified taxpayer’’ means— 
(1) any individual who is a plaintiff in the civil 
action In re Exxon Valdez, No. 89–095–CV (HRH) 
(Consolidated) (D. Alaska); or 
(2) any individual who is a beneficiary of the es-
tate of such a plaintiff who— 
(A) acquired the right to receive qualified 
settlement income from that plaintiff; and
300 
(B) was the spouse or an immediate relative 
of that plaintiff. 
(e) QUALIFIED SETTLEMENT INCOME.—For purposes 
of this section, the term ‘‘qualified settlement income’’ 
means any interest and punitive damage awards which 
are— 
(1) otherwise includible in taxable income, and 
(2) received (whether as lump sums or periodic 
payments) in connection with the civil action In re 
Exxon Valdez, No. 89–095–CV (HRH) (Consolidated) 
(D. Alaska) (whether pre- or post-judgment and 
whether related to a settlement or judgment). 
SEC. 505. CERTAIN FARMING BUSINESS MACHINERY AND 
EQUIPMENT TREATED AS 5-YEAR PROPERTY. 
(a) IN GENERAL.—Section 168(e)(3)(B) (defining 5- 
year property) is amended by striking ‘‘and’’ at the end 
of clause (v), by striking the period at the end of clause 
(vi)(III) and inserting ‘‘, and’’, and by inserting after 
clause (vi) the following new clause: 
‘‘(vii) any machinery or equipment 
(other than any grain bin, cotton ginning 
asset, fence, or other land improvement) 
which is used in a farming business (as de-
fined in section 263A(e)(4)), the original 
use of which commences with the taxpayer
301 
after December 31, 2008, and which is 
placed in service before January 1, 2010.’’. 
(b) ALTERNATIVE SYSTEM.—The table contained in 
section 168(g)(3)(B) (relating to special rule for certain 
property assigned to classes) is amended by inserting after 
the item relating to subparagraph (B)(iii) the following: 
(B)(vii) .........................................................................................
10’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to property placed in service after De-
cember 31, 2008. 
SEC. 506. MODIFICATION OF PENALTY ON UNDERSTATE-
MENT OF TAXPAYER’S LIABILITY BY TAX RE-
TURN PREPARER. 
(a) IN GENERAL.—Subsection (a) of section 6694 is 
amended to read as follows: 
‘‘(a) UNDERSTATEMENT DUE TO UNREASONABLE PO-
SITIONS.— 
‘‘(1) IN GENERAL.—If a tax return preparer— 
‘‘(A) prepares any return or claim of refund 
with respect to which any part of an understate-
ment of liability is due to a position described 
in paragraph (2), and 
‘‘(B) knew (or reasonably should have 
known) of the position,
302 
such tax return preparer shall pay a penalty with re-
spect to each such return or claim in an amount 
equal to the greater of $1,000 or 50 percent of the in-
come derived (or to be derived) by the tax return pre-
parer with respect to the return or claim. 
‘‘(2) UNREASONABLE POSITION.— 
‘‘(A) IN
GENERAL.—Except as otherwise 
provided in this paragraph, a position is de-
scribed in this paragraph unless there is or was 
substantial authority for the position. 
‘‘(B) DISCLOSED POSITIONS.—If the posi-
tion was disclosed as provided in section 
6662(d)(2)(B)(ii)(I) and is not a position to 
which subparagraph (C) applies, the position is 
described in this paragraph unless there is a rea-
sonable basis for the position. 
‘‘(C) TAX
SHELTERS
AND
REPORTABLE 
TRANSACTIONS.—If the position is with respect 
to 
a 
tax 
shelter 
(as 
defined 
in 
section 
6662(d)(2)(C)(ii)) or a reportable transaction to 
which section 6662A applies, the position is de-
scribed in this paragraph unless it is reasonable 
to believe that the position would more likely 
than not be sustained on its merits.
303 
‘‘(3) REASONABLE CAUSE EXCEPTION.—No pen-
alty shall be imposed under this subsection if it is 
shown that there is reasonable cause for the under-
statement and the tax return preparer acted in good 
faith.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply— 
(1) in the case of a position other than a posi-
tion described in subparagraph (C) of section 
6694(a)(2) of the Internal Revenue Code of 1986 (as 
amended by this section), to returns prepared after 
May 25, 2007, and 
(2) in the case of a position described in such 
subparagraph (C), to returns prepared for taxable 
years ending after the date of the enactment of this 
Act. 
Subtitle 
B—Paul 
Wellstone 
and 
Pete Domenici Mental Health 
Parity and Addiction Equity Act 
of 2008 
SEC. 511. SHORT TITLE. 
This subtitle may be cited as the ‘‘Paul Wellstone and 
Pete Domenici Mental Health Parity and Addiction Equity 
Act of 2008’’.
304 
SEC. 512. MENTAL HEALTH PARITY. 
(a) AMENDMENTS TO ERISA.—Section 712 of the Em-
ployee Retirement Income Security Act of 1974 (29 U.S.C. 
1185a) is amended— 
(1) in subsection (a), by adding at the end the 
following: 
‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT 
LIMITATIONS.— 
‘‘(A) IN GENERAL.—In the case of a group 
health plan (or health insurance coverage offered 
in connection with such a plan) that provides 
both medical and surgical benefits and mental 
health or substance use disorder benefits, such 
plan or coverage shall ensure that— 
‘‘(i) the financial requirements appli-
cable to such mental health or substance use 
disorder benefits are no more restrictive 
than the predominant financial require-
ments applied to substantially all medical 
and surgical benefits covered by the plan (or 
coverage), and there are no separate cost 
sharing requirements that are applicable 
only with respect to mental health or sub-
stance use disorder benefits; and 
‘‘(ii) the treatment limitations applica-
ble to such mental health or substance use
305 
disorder benefits are no more restrictive 
than the predominant treatment limitations 
applied to substantially all medical and 
surgical benefits covered by the plan (or 
coverage) and there are no separate treat-
ment limitations that are applicable only 
with respect to mental health or substance 
use disorder benefits. 
‘‘(B) DEFINITIONS.—In this paragraph: 
‘‘(i) FINANCIAL
REQUIREMENT.—The 
term 
‘financial 
requirement’ 
includes 
deductibles, copayments, coinsurance, and 
out-of-pocket expenses, but excludes an ag-
gregate lifetime limit and an annual limit 
subject to paragraphs (1) and (2), 
‘‘(ii) PREDOMINANT.—A financial re-
quirement or treatment limit is considered 
to be predominant if it is the most common 
or frequent of such type of limit or require-
ment. 
‘‘(iii) TREATMENT
LIMITATION.—The 
term ‘treatment limitation’ includes limits 
on the frequency of treatment, number of 
visits, days of coverage, or other similar
306 
limits on the scope or duration of treat-
ment. 
‘‘(4) AVAILABILITY OF PLAN INFORMATION.—The 
criteria for medical necessity determinations made 
under the plan with respect to mental health or sub-
stance use disorder benefits (or the health insurance 
coverage offered in connection with the plan with re-
spect to such benefits) shall be made available by the 
plan administrator (or the health insurance issuer of-
fering such coverage) in accordance with regulations 
to any current or potential participant, beneficiary, 
or contracting provider upon request. The reason for 
any denial under the plan (or coverage) of reimburse-
ment or payment for services with respect to mental 
health or substance use disorder benefits in the case 
of any participant or beneficiary shall, on request or 
as otherwise required, be made available by the plan 
administrator (or the health insurance issuer offering 
such coverage) to the participant or beneficiary in ac-
cordance with regulations. 
‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the case 
of a plan or coverage that provides both medical and 
surgical benefits and mental health or substance use 
disorder benefits, if the plan or coverage provides cov-
erage for medical or surgical benefits provided by out-
307 
of-network providers, the plan or coverage shall pro-
vide coverage for mental health or substance use dis-
order benefits provided by out-of-network providers in 
a manner that is consistent with the requirements of 
this section.’’; 
(2) in subsection (b), by amending paragraph 
(2) to read as follows: 
‘‘(2) in the case of a group health plan (or health 
insurance coverage offered in connection with such a 
plan) that provides mental health or substance use 
disorder benefits, as affecting the terms and condi-
tions of the plan or coverage relating to such benefits 
under the plan or coverage, except as provided in sub-
section (a).’’; 
(3) in subsection (c)— 
(A) in paragraph (1)(B)— 
(i) by inserting ‘‘(or 1 in the case of 
an employer residing in a State that per-
mits small groups to include a single indi-
vidual)’’ after ‘‘at least 2’’ the first place 
that such appears; and 
(ii) by striking ‘‘and who employs at 
least 2 employees on the first day of the 
plan year’’; and
308 
(B) by striking paragraph (2) and inserting 
the following: 
‘‘(2) COST EXEMPTION.— 
‘‘(A) IN GENERAL.—With respect to a group 
health plan (or health insurance coverage offered 
in connection with such a plan), if the applica-
tion of this section to such plan (or coverage) re-
sults in an increase for the plan year involved 
of the actual total costs of coverage with respect 
to medical and surgical benefits and mental 
health and substance use disorder benefits under 
the plan (as determined and certified under sub-
paragraph (C)) by an amount that exceeds the 
applicable percentage described in subparagraph 
(B) of the actual total plan costs, the provisions 
of this section shall not apply to such plan (or 
coverage) during the following plan year, and 
such exemption shall apply to the plan (or cov-
erage) for 1 plan year. An employer may elect 
to continue to apply mental health and substance 
use disorder parity pursuant to this section with 
respect to the group health plan (or coverage) in-
volved regardless of any increase in total costs. 
‘‘(B) APPLICABLE PERCENTAGE.—With re-
spect to a plan (or coverage), the applicable per-
309 
centage described in this subparagraph shall 
be— 
‘‘(i) 2 percent in the case of the first 
plan year in which this section is applied; 
and 
‘‘(ii) 1 percent in the case of each sub-
sequent plan year. 
‘‘(C) DETERMINATIONS
BY
ACTUARIES.— 
Determinations as to increases in actual costs 
under a plan (or coverage) for purposes of this 
section shall be made and certified by a qualified 
and licensed actuary who is a member in good 
standing of the American Academy of Actuaries. 
All such determinations shall be in a written re-
port prepared by the actuary. The report, and 
all underlying documentation relied upon by the 
actuary, shall be maintained by the group health 
plan or health insurance issuer for a period of 
6 years following the notification made under 
subparagraph (E). 
‘‘(D) 6-MONTH
DETERMINATIONS.—If a 
group health plan (or a health insurance issuer 
offering coverage in connection with a group 
health plan) seeks an exemption under this para-
graph, determinations under subparagraph (A)
310 
shall be made after such plan (or coverage) has 
complied with this section for the first 6 months 
of the plan year involved. 
‘‘(E) NOTIFICATION.— 
‘‘(i) IN
GENERAL.—A group health 
plan (or a health insurance issuer offering 
coverage in connection with a group health 
plan) that, based upon a certification de-
scribed under subparagraph (C), qualifies 
for an exemption under this paragraph, 
and elects to implement the exemption, shall 
promptly notify the Secretary, the appro-
priate State agencies, and participants and 
beneficiaries in the plan of such election. 
‘‘(ii) REQUIREMENT.—A notification 
to the Secretary under clause (i) shall in-
clude— 
‘‘(I) a description of the number 
of covered lives under the plan (or cov-
erage) involved at the time of the noti-
fication, and as applicable, at the time 
of any prior election of the cost-exemp-
tion under this paragraph by such 
plan (or coverage);
311 
‘‘(II) for both the plan year upon 
which a cost exemption is sought and 
the year prior, a description of the ac-
tual total costs of coverage with respect 
to medical and surgical benefits and 
mental health and substance use dis-
order benefits under the plan; and 
‘‘(III) for both the plan year upon 
which a cost exemption is sought and 
the year prior, the actual total costs of 
coverage with respect to mental health 
and substance use disorder benefits 
under the plan. 
‘‘(iii) CONFIDENTIALITY.—A notifica-
tion to the Secretary under clause (i) shall 
be confidential. The Secretary shall make 
available, upon request and on not more 
than an annual basis, an anonymous 
itemization of such notifications, that in-
cludes— 
‘‘(I) a breakdown of States by the 
size and type of employers submitting 
such notification; and 
‘‘(II) a summary of the data re-
ceived under clause (ii).
312 
‘‘(F) AUDITS BY APPROPRIATE AGENCIES.— 
To determine compliance with this paragraph, 
the Secretary may audit the books and records of 
a group health plan or health insurance issuer 
relating to an exemption, including any actu-
arial reports prepared pursuant to subparagraph 
(C), during the 6 year period following the noti-
fication of such exemption under subparagraph 
(E). A State agency receiving a notification 
under subparagraph (E) may also conduct such 
an audit with respect to an exemption covered 
by such notification.’’; 
(4) in subsection (e), by striking paragraph (4) 
and inserting the following: 
‘‘(4) MENTAL
HEALTH
BENEFITS.—The term 
‘mental health benefits’ means benefits with respect to 
services for mental health conditions, as defined under 
the terms of the plan and in accordance with applica-
ble Federal and State law. 
‘‘(5) SUBSTANCE
USE
DISORDER
BENEFITS.— 
The term ‘substance use disorder benefits’ means bene-
fits with respect to services for substance use dis-
orders, as defined under the terms of the plan and in 
accordance with applicable Federal and State law.’’; 
(5) by striking subsection (f);
313 
(6) by inserting after subsection (e) the following: 
‘‘(f) SECRETARY REPORT.—The Secretary shall, by 
January 1, 2012, and every two years thereafter, submit 
to the appropriate committees of Congress a report on com-
pliance of group health plans (and health insurance cov-
erage offered in connection with such plans) with the re-
quirements of this section. Such report shall include the re-
sults of any surveys or audits on compliance of group health 
plans (and health insurance coverage offered in connection 
with such plans) with such requirements and an analysis 
of the reasons for any failures to comply. 
‘‘(g) NOTICE AND ASSISTANCE.—The Secretary, in co-
operation with the Secretaries of Health and Human Serv-
ices and Treasury, as appropriate, shall publish and widely 
disseminate guidance and information for group health 
plans, participants and beneficiaries, applicable State and 
local regulatory bodies, and the National Association of In-
surance Commissioners concerning the requirements of this 
section and shall provide assistance concerning such re-
quirements and the continued operation of applicable State 
law. Such guidance and information shall inform partici-
pants and beneficiaries of how they may obtain assistance 
under this section, including, where appropriate, assistance 
from State consumer and insurance agencies.’’;
314 
(7) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health and substance use disorder 
benefits’’ each place it appears in subsections 
(a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); 
and 
(8) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health or substance use disorder bene-
fits’’ each place it appears (other than in any provi-
sion amended by the previous paragraph). 
(b) AMENDMENTS
TO
PUBLIC
HEALTH
SERVICE 
ACT.—Section 2705 of the Public Health Service Act (42 
U.S.C. 300gg–5) is amended— 
(1) in subsection (a), by adding at the end the 
following: 
‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT 
LIMITATIONS.— 
‘‘(A) IN GENERAL.—In the case of a group 
health plan (or health insurance coverage offered 
in connection with such a plan) that provides 
both medical and surgical benefits and mental 
health or substance use disorder benefits, such 
plan or coverage shall ensure that— 
‘‘(i) the financial requirements appli-
cable to such mental health or substance use 
disorder benefits are no more restrictive
315 
than the predominant financial require-
ments applied to substantially all medical 
and surgical benefits covered by the plan (or 
coverage), and there are no separate cost 
sharing requirements that are applicable 
only with respect to mental health or sub-
stance use disorder benefits; and 
‘‘(ii) the treatment limitations applica-
ble to such mental health or substance use 
disorder benefits are no more restrictive 
than the predominant treatment limitations 
applied to substantially all medical and 
surgical benefits covered by the plan (or 
coverage) and there are no separate treat-
ment limitations that are applicable only 
with respect to mental health or substance 
use disorder benefits. 
‘‘(B) DEFINITIONS.—In this paragraph: 
‘‘(i) FINANCIAL
REQUIREMENT.—The 
term 
‘financial 
requirement’ 
includes 
deductibles, copayments, coinsurance, and 
out-of-pocket expenses, but excludes an ag-
gregate lifetime limit and an annual limit 
subject to paragraphs (1) and (2).
316 
‘‘(ii) PREDOMINANT.—A financial re-
quirement or treatment limit is considered 
to be predominant if it is the most common 
or frequent of such type of limit or require-
ment. 
‘‘(iii) TREATMENT
LIMITATION.—The 
term ‘treatment limitation’ includes limits 
on the frequency of treatment, number of 
visits, days of coverage, or other similar 
limits on the scope or duration of treat-
ment. 
‘‘(4) AVAILABILITY OF PLAN INFORMATION.—The 
criteria for medical necessity determinations made 
under the plan with respect to mental health or sub-
stance use disorder benefits (or the health insurance 
coverage offered in connection with the plan with re-
spect to such benefits) shall be made available by the 
plan administrator (or the health insurance issuer of-
fering such coverage) in accordance with regulations 
to any current or potential participant, beneficiary, 
or contracting provider upon request. The reason for 
any denial under the plan (or coverage) of reimburse-
ment or payment for services with respect to mental 
health or substance use disorder benefits in the case 
of any participant or beneficiary shall, on request or
317 
as otherwise required, be made available by the plan 
administrator (or the health insurance issuer offering 
such coverage) to the participant or beneficiary in ac-
cordance with regulations. 
‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the case 
of a plan or coverage that provides both medical and 
surgical benefits and mental health or substance use 
disorder benefits, if the plan or coverage provides cov-
erage for medical or surgical benefits provided by out- 
of-network providers, the plan or coverage shall pro-
vide coverage for mental health or substance use dis-
order benefits provided by out-of-network providers in 
a manner that is consistent with the requirements of 
this section.’’; 
(2) in subsection (b), by amending paragraph 
(2) to read as follows: 
‘‘(2) in the case of a group health plan (or health 
insurance coverage offered in connection with such a 
plan) that provides mental health or substance use 
disorder benefits, as affecting the terms and condi-
tions of the plan or coverage relating to such benefits 
under the plan or coverage, except as provided in sub-
section (a).’’; 
(3) in subsection (c)—
318 
(A) in paragraph (1), by inserting before 
the period the following: ‘‘(as defined in section 
2791(e)(4), except that for purposes of this para-
graph such term shall include employers with 1 
employee in the case of an employer residing in 
a State that permits small groups to include a 
single individual)’’; and 
(B) by striking paragraph (2) and inserting 
the following: 
‘‘(2) COST EXEMPTION.— 
‘‘(A) IN GENERAL.—With respect to a group 
health plan (or health insurance coverage offered 
in connection with such a plan), if the applica-
tion of this section to such plan (or coverage) re-
sults in an increase for the plan year involved 
of the actual total costs of coverage with respect 
to medical and surgical benefits and mental 
health and substance use disorder benefits under 
the plan (as determined and certified under sub-
paragraph (C)) by an amount that exceeds the 
applicable percentage described in subparagraph 
(B) of the actual total plan costs, the provisions 
of this section shall not apply to such plan (or 
coverage) during the following plan year, and 
such exemption shall apply to the plan (or cov-
319 
erage) for 1 plan year. An employer may elect 
to continue to apply mental health and substance 
use disorder parity pursuant to this section with 
respect to the group health plan (or coverage) in-
volved regardless of any increase in total costs. 
‘‘(B) APPLICABLE PERCENTAGE.—With re-
spect to a plan (or coverage), the applicable per-
centage described in this subparagraph shall 
be— 
‘‘(i) 2 percent in the case of the first 
plan year in which this section is applied; 
and 
‘‘(ii) 1 percent in the case of each sub-
sequent plan year. 
‘‘(C) DETERMINATIONS
BY
ACTUARIES.— 
Determinations as to increases in actual costs 
under a plan (or coverage) for purposes of this 
section shall be made and certified by a qualified 
and licensed actuary who is a member in good 
standing of the American Academy of Actuaries. 
All such determinations shall be in a written re-
port prepared by the actuary. The report, and 
all underlying documentation relied upon by the 
actuary, shall be maintained by the group health 
plan or health insurance issuer for a period of
320 
6 years following the notification made under 
subparagraph (E). 
‘‘(D) 6-MONTH
DETERMINATIONS.—If a 
group health plan (or a health insurance issuer 
offering coverage in connection with a group 
health plan) seeks an exemption under this para-
graph, determinations under subparagraph (A) 
shall be made after such plan (or coverage) has 
complied with this section for the first 6 months 
of the plan year involved. 
‘‘(E) NOTIFICATION.— 
‘‘(i) IN
GENERAL.—A group health 
plan (or a health insurance issuer offering 
coverage in connection with a group health 
plan) that, based upon a certification de-
scribed under subparagraph (C), qualifies 
for an exemption under this paragraph, 
and elects to implement the exemption, shall 
promptly notify the Secretary, the appro-
priate State agencies, and participants and 
beneficiaries in the plan of such election. 
‘‘(ii) REQUIREMENT.—A notification 
to the Secretary under clause (i) shall in-
clude—
321 
‘‘(I) a description of the number 
of covered lives under the plan (or cov-
erage) involved at the time of the noti-
fication, and as applicable, at the time 
of any prior election of the cost-exemp-
tion under this paragraph by such 
plan (or coverage); 
‘‘(II) for both the plan year upon 
which a cost exemption is sought and 
the year prior, a description of the ac-
tual total costs of coverage with respect 
to medical and surgical benefits and 
mental health and substance use dis-
order benefits under the plan; and 
‘‘(III) for both the plan year upon 
which a cost exemption is sought and 
the year prior, the actual total costs of 
coverage with respect to mental health 
and substance use disorder benefits 
under the plan. 
‘‘(iii) CONFIDENTIALITY.—A notifica-
tion to the Secretary under clause (i) shall 
be confidential. The Secretary shall make 
available, upon request and on not more 
than an annual basis, an anonymous
322 
itemization of such notifications, that in-
cludes— 
‘‘(I) a breakdown of States by the 
size and type of employers submitting 
such notification; and 
‘‘(II) a summary of the data re-
ceived under clause (ii). 
‘‘(F) AUDITS BY APPROPRIATE AGENCIES.— 
To determine compliance with this paragraph, 
the Secretary may audit the books and records of 
a group health plan or health insurance issuer 
relating to an exemption, including any actu-
arial reports prepared pursuant to subparagraph 
(C), during the 6 year period following the noti-
fication of such exemption under subparagraph 
(E). A State agency receiving a notification 
under subparagraph (E) may also conduct such 
an audit with respect to an exemption covered 
by such notification.’’; 
(4) in subsection (e), by striking paragraph (4) 
and inserting the following: 
‘‘(4) MENTAL
HEALTH
BENEFITS.—The term 
‘mental health benefits’ means benefits with respect to 
services for mental health conditions, as defined under
323 
the terms of the plan and in accordance with applica-
ble Federal and State law. 
‘‘(5) SUBSTANCE
USE
DISORDER
BENEFITS.— 
The term ‘substance use disorder benefits’ means bene-
fits with respect to services for substance use dis-
orders, as defined under the terms of the plan and in 
accordance with applicable Federal and State law.’’; 
(5) by striking subsection (f); 
(6) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health and substance use disorder 
benefits’’ each place it appears in subsections 
(a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); 
and 
(7) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health or substance use disorder bene-
fits’’ each place it appears (other than in any provi-
sion amended by the previous paragraph). 
(c) AMENDMENTS TO INTERNAL REVENUE CODE.— 
Section 9812 of the Internal Revenue Code of 1986 is 
amended— 
(1) in subsection (a), by adding at the end the 
following: 
‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT 
LIMITATIONS.—
324 
‘‘(A) IN GENERAL.—In the case of a group 
health plan that provides both medical and sur-
gical benefits and mental health or substance use 
disorder benefits, such plan shall ensure that— 
‘‘(i) the financial requirements appli-
cable to such mental health or substance use 
disorder benefits are no more restrictive 
than the predominant financial require-
ments applied to substantially all medical 
and surgical benefits covered by the plan, 
and there are no separate cost sharing re-
quirements that are applicable only with re-
spect to mental health or substance use dis-
order benefits; and 
‘‘(ii) the treatment limitations applica-
ble to such mental health or substance use 
disorder benefits are no more restrictive 
than the predominant treatment limitations 
applied to substantially all medical and 
surgical benefits covered by the plan and 
there are no separate treatment limitations 
that are applicable only with respect to 
mental health or substance use disorder ben-
efits. 
‘‘(B) DEFINITIONS.—In this paragraph:
325 
‘‘(i) FINANCIAL
REQUIREMENT.—The 
term 
‘financial 
requirement’ 
includes 
deductibles, copayments, coinsurance, and 
out-of-pocket expenses, but excludes an ag-
gregate lifetime limit and an annual limit 
subject to paragraphs (1) and (2), 
‘‘(ii) PREDOMINANT.—A financial re-
quirement or treatment limit is considered 
to be predominant if it is the most common 
or frequent of such type of limit or require-
ment. 
‘‘(iii) TREATMENT
LIMITATION.—The 
term ‘treatment limitation’ includes limits 
on the frequency of treatment, number of 
visits, days of coverage, or other similar 
limits on the scope or duration of treat-
ment. 
‘‘(4) AVAILABILITY OF PLAN INFORMATION.—The 
criteria for medical necessity determinations made 
under the plan with respect to mental health or sub-
stance use disorder benefits shall be made available by 
the plan administrator in accordance with regula-
tions to any current or potential participant, bene-
ficiary, or contracting provider upon request. The 
reason for any denial under the plan of reimburse-
326 
ment or payment for services with respect to mental 
health or substance use disorder benefits in the case 
of any participant or beneficiary shall, on request or 
as otherwise required, be made available by the plan 
administrator to the participant or beneficiary in ac-
cordance with regulations. 
‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the case 
of a plan that provides both medical and surgical 
benefits and mental health or substance use disorder 
benefits, if the plan provides coverage for medical or 
surgical benefits provided by out-of-network providers, 
the plan shall provide coverage for mental health or 
substance use disorder benefits provided by out-of-net-
work providers in a manner that is consistent with 
the requirements of this section.’’; 
(2) in subsection (b), by amending paragraph 
(2) to read as follows: 
‘‘(2) in the case of a group health plan that pro-
vides mental health or substance use disorder benefits, 
as affecting the terms and conditions of the plan re-
lating to such benefits under the plan, except as pro-
vided in subsection (a).’’; 
(3) in subsection (c)— 
(A) by amending paragraph (1) to read as 
follows:
327 
‘‘(1) SMALL EMPLOYER EXEMPTION.— 
‘‘(A) IN GENERAL.—This section shall not 
apply to any group health plan for any plan 
year of a small employer. 
‘‘(B) SMALL EMPLOYER.—For purposes of 
subparagraph (A), the term ‘small employer’ 
means, with respect to a calendar year and a 
plan year, an employer who employed an aver-
age of at least 2 (or 1 in the case of an employer 
residing in a State that permits small groups to 
include a single individual) but not more than 
50 employees on business days during the pre-
ceding calendar year. For purposes of the pre-
ceding sentence, all persons treated as a single 
employer under subsection (b), (c), (m), or (o) of 
section 414 shall be treated as 1 employer and 
rules similar to rules of subparagraphs (B) and 
(C) of section 4980D(d)(2) shall apply.’’; and 
(B) by striking paragraph (2) and inserting 
the following: 
‘‘(2) COST EXEMPTION.— 
‘‘(A) IN GENERAL.—With respect to a group 
health plan, if the application of this section to 
such plan results in an increase for the plan 
year involved of the actual total costs of coverage
328 
with respect to medical and surgical benefits and 
mental health and substance use disorder benefits 
under the plan (as determined and certified 
under subparagraph (C)) by an amount that ex-
ceeds the applicable percentage described in sub-
paragraph (B) of the actual total plan costs, the 
provisions of this section shall not apply to such 
plan during the following plan year, and such 
exemption shall apply to the plan for 1 plan 
year. An employer may elect to continue to 
apply mental health and substance use disorder 
parity pursuant to this section with respect to 
the group health plan involved regardless of any 
increase in total costs. 
‘‘(B) APPLICABLE PERCENTAGE.—With re-
spect to a plan, the applicable percentage de-
scribed in this subparagraph shall be— 
‘‘(i) 2 percent in the case of the first 
plan year in which this section is applied; 
and 
‘‘(ii) 1 percent in the case of each sub-
sequent plan year. 
‘‘(C) DETERMINATIONS
BY
ACTUARIES.— 
Determinations as to increases in actual costs 
under a plan for purposes of this section shall be
329 
made and certified by a qualified and licensed 
actuary who is a member in good standing of the 
American Academy of Actuaries. All such deter-
minations shall be in a written report prepared 
by the actuary. The report, and all underlying 
documentation relied upon by the actuary, shall 
be maintained by the group health plan for a pe-
riod of 6 years following the notification made 
under subparagraph (E). 
‘‘(D) 6-MONTH
DETERMINATIONS.—If a 
group health plan seeks an exemption under this 
paragraph, determinations under subparagraph 
(A) shall be made after such plan has complied 
with this section for the first 6 months of the 
plan year involved. 
‘‘(E) NOTIFICATION.— 
‘‘(i) IN
GENERAL.—A group health 
plan that, based upon a certification de-
scribed under subparagraph (C), qualifies 
for an exemption under this paragraph, 
and elects to implement the exemption, shall 
promptly notify the Secretary, the appro-
priate State agencies, and participants and 
beneficiaries in the plan of such election.
330 
‘‘(ii) REQUIREMENT.—A notification 
to the Secretary under clause (i) shall in-
clude— 
‘‘(I) a description of the number 
of covered lives under the plan involved 
at the time of the notification, and as 
applicable, at the time of any prior 
election of the cost-exemption under 
this paragraph by such plan; 
‘‘(II) for both the plan year upon 
which a cost exemption is sought and 
the year prior, a description of the ac-
tual total costs of coverage with respect 
to medical and surgical benefits and 
mental health and substance use dis-
order benefits under the plan; and 
‘‘(III) for both the plan year upon 
which a cost exemption is sought and 
the year prior, the actual total costs of 
coverage with respect to mental health 
and substance use disorder benefits 
under the plan. 
‘‘(iii) CONFIDENTIALITY.—A notifica-
tion to the Secretary under clause (i) shall 
be confidential. The Secretary shall make
331 
available, upon request and on not more 
than an annual basis, an anonymous 
itemization of such notifications, that in-
cludes— 
‘‘(I) a breakdown of States by the 
size and type of employers submitting 
such notification; and 
‘‘(II) a summary of the data re-
ceived under clause (ii). 
‘‘(F) AUDITS BY APPROPRIATE AGENCIES.— 
To determine compliance with this paragraph, 
the Secretary may audit the books and records of 
a group health plan relating to an exemption, 
including any actuarial reports prepared pursu-
ant to subparagraph (C), during the 6 year pe-
riod following the notification of such exemption 
under subparagraph (E). A State agency receiv-
ing a notification under subparagraph (E) may 
also conduct such an audit with respect to an ex-
emption covered by such notification.’’; 
(4) in subsection (e), by striking paragraph (4) 
and inserting the following: 
‘‘(4) MENTAL
HEALTH
BENEFITS.—The term 
‘mental health benefits’ means benefits with respect to 
services for mental health conditions, as defined under
332 
the terms of the plan and in accordance with applica-
ble Federal and State law. 
‘‘(5) SUBSTANCE
USE
DISORDER
BENEFITS.— 
The term ‘substance use disorder benefits’ means bene-
fits with respect to services for substance use dis-
orders, as defined under the terms of the plan and in 
accordance with applicable Federal and State law.’’; 
(5) by striking subsection (f); 
(6) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health and substance use disorder 
benefits’’ each place it appears in subsections 
(a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); 
and 
(7) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health or substance use disorder bene-
fits’’ each place it appears (other than in any provi-
sion amended by the previous paragraph). 
(d) REGULATIONS.—Not later than 1 year after the 
date of enactment of this Act, the Secretaries of Labor, 
Health and Human Services, and the Treasury shall issue 
regulations to carry out the amendments made by sub-
sections (a), (b), and (c), respectively. 
(e) EFFECTIVE DATE.— 
(1) IN
GENERAL.—The amendments made by 
this section shall apply with respect to group health
333 
plans for plan years beginning after the date that is 
1 year after the date of enactment of this Act, regard-
less of whether regulations have been issued to carry 
out such amendments by such effective date, except 
that the amendments made by subsections (a)(5), 
(b)(5), and (c)(5), relating to striking of certain sun-
set provisions, shall take effect on January 1, 2009. 
(2) SPECIAL RULE FOR COLLECTIVE BARGAINING 
AGREEMENTS.—In the case of a group health plan 
maintained pursuant to one or more collective bar-
gaining agreements between employee representatives 
and one or more employers ratified before the date of 
the enactment of this Act, the amendments made by 
this section shall not apply to plan years beginning 
before the later of— 
(A) the date on which the last of the collec-
tive bargaining agreements relating to the plan 
terminates (determined without regard to any 
extension thereof agreed to after the date of the 
enactment of this Act), or 
(B) January 1, 2009. 
For purposes of subparagraph (A), any plan amend-
ment made pursuant to a collective bargaining agree-
ment relating to the plan which amends the plan sole-
ly to conform to any requirement added by this sec-
334 
tion shall not be treated as a termination of such col-
lective bargaining agreement. 
(f) ASSURING
COORDINATION.—The Secretary of 
Health and Human Services, the Secretary of Labor, and 
the Secretary of the Treasury may ensure, through the exe-
cution or revision of an interagency memorandum of under-
standing among such Secretaries, that— 
(1) regulations, rulings, and interpretations 
issued by such Secretaries relating to the same matter 
over which two or more such Secretaries have respon-
sibility under this section (and the amendments made 
by this section) are administered so as to have the 
same effect at all times; and 
(2) coordination of policies relating to enforcing 
the same requirements through such Secretaries in 
order to have a coordinated enforcement strategy that 
avoids duplication of enforcement efforts and assigns 
priorities in enforcement. 
(g) CONFORMING CLERICAL AMENDMENTS.— 
(1) ERISA HEADING.— 
(A) IN GENERAL.—The heading of section 
712 of the Employee Retirement Income Security 
Act of 1974 is amended to read as follows:
335 
‘‘SEC. 712. PARITY IN MENTAL HEALTH AND SUBSTANCE 
USE DISORDER BENEFITS.’’. 
(B) CLERICAL AMENDMENT.—The table of 
contents in section 1 of such Act is amended by 
striking the item relating to section 712 and in-
serting the following new item: 
‘‘Sec. 712. Parity in mental health and substance use disorder benefits.’’. 
(2) PHSA HEADING.—The heading of section 
2705 of the Public Health Service Act is amended to 
read as follows: 
‘‘SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE 
USE DISORDER BENEFITS.’’. 
(3) IRC HEADING.— 
(A) IN GENERAL.—The heading of section 
9812 of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘SEC. 9812. PARITY IN MENTAL HEALTH AND SUBSTANCE 
USE DISORDER BENEFITS.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections for subchapter B of chapter 100 of such 
Code is amended by striking the item relating to 
section 9812 and inserting the following new 
item: 
‘‘Sec. 9812. Parity in mental health and substance use disorder benefits.’’.
336 
(h) GAO STUDY ON COVERAGE AND EXCLUSION OF 
MENTAL HEALTH AND SUBSTANCE USE DISORDER DIAG-
NOSES.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study that analyzes 
the specific rates, patterns, and trends in coverage 
and exclusion of specific mental health and substance 
use disorder diagnoses by health plans and health in-
surance. The study shall include an analysis of— 
(A) specific coverage rates for all mental 
health conditions and substance use disorders; 
(B) which diagnoses are most commonly 
covered or excluded; 
(C) whether implementation of this Act has 
affected trends in coverage or exclusion of such 
diagnoses; and 
(D) the impact of covering or excluding spe-
cific diagnoses on participants’ and enrollees’ 
health, their health care coverage, and the costs 
of delivering health care. 
(2) REPORTS.—Not later than 3 years after the 
date of the enactment of this Act, and 2 years after 
the date of submission the first report under this 
paragraph, the Comptroller General shall submit to
337 
Congress a report on the results of the study con-
ducted under paragraph (1). 
TITLE VI—OTHER PROVISIONS 
SEC. 601. SECURE RURAL SCHOOLS AND COMMUNITY SELF- 
DETERMINATION PROGRAM. 
(a) REAUTHORIZATION
OF
THE
SECURE
RURAL 
SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT OF 
2000.—The Secure Rural Schools and Community Self-De-
termination Act of 2000 (16 U.S.C. 500 note; Public Law 
106–393) is amended by striking sections 1 through 403 
and inserting the following: 
‘‘SECTION 1. SHORT TITLE. 
‘‘This Act may be cited as the ‘Secure Rural Schools 
and Community Self-Determination Act of 2000’. 
‘‘SEC. 2. PURPOSES. 
‘‘The purposes of this Act are— 
‘‘(1) to stabilize and transition payments to 
counties to provide funding for schools and roads that 
supplements other available funds; 
‘‘(2) to make additional investments in, and cre-
ate additional employment opportunities through, 
projects that— 
‘‘(A)(i) improve the maintenance of existing 
infrastructure;