Text: S.3209 — 101st Congress (1989-1990)All Information (Except Text)

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Calendar No. 992
101st CONGRESS
2d Session
S. 3209
A BILL
To provide for reconciliation pursuant to section 4 of the concurrent
resolution on the budget for the fiscal year 1991.
October 16 (legislative day, OCTOBER 2), 1990
Reported without recommendation; read twice and placed on the calendar
S 3209 PCS
Calendar No. 992
101st CONGRESS
2d Session
S. 3209
To provide for reconciliation pursuant to section 4 of the concurrent
resolution on the budget for the fiscal year 1991.
IN THE SENATE OF THE UNITED STATES
October 16 (legislative day, OCTOBER 2), 1990
Mr. SASSER, from the Committee on the Budget, reported without recommendation
the following original bill; which was read twice and placed on the calendar
A BILL
To provide for reconciliation pursuant to section 4 of the concurrent
resolution on the budget for the fiscal year 1991.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE.
  This Act may be cited as the `Omnibus Budget Reconciliation Act of 1990'.
SEC. 2. TABLE OF CONTENTS.
Title I--Committee on Agriculture, Nutrition, and Forestry.
Title II--Committee on Banking, Housing, and Urban Affairs.
Title III--Committee on Commerce, Science, and Transportation.
Title IV--Committee on Energy and Natural Resources.
Title V--Committee on Environment and Public Works.
Title VI--Committee on Finance--Spending Reductions.
Title VII--Committee on Finance--Revenues.
Title VIII--Committee on Governmental Affairs.
Title IX--Committee on the Judiciary.
Title X--Committee on Labor and Human Resources.
Title XI--Committee on Veterans' Affairs.
TITLE I--COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
SEC. 1001. SHORT TITLE; TABLE OF CONTENTS.
  (a) SHORT TITLE- This title may be cited as the `Agricultural Reconciliation
  Act of 1990'.
  (b) TABLE OF CONTENTS- The table of contents is as follows:
Sec. 1001. Short title; table of contents.
Subtitle A--Commodity Programs
Sec. 1101. Triple base for deficiency payments.
Sec. 1102. Calculation of deficiency payments.
Sec. 1103. Acreage reduction programs for 1991 through 1995 crops of wheat,
feed grains, upland cotton, and rice.
Sec. 1104. Oilseed price support.
Sec. 1105. Dairy assessments.
Sec. 1106. Loan origination fees and program service fees.
Sec. 1107. Producer reserve program for wheat and feed grains.
Sec. 1108. Payment of interest on certificates.
Subtitle B--Other Agricultural Programs
Sec. 1201. Authorization levels for REA loans.
Sec. 1202. Authorization levels for FmHA loans.
Sec. 1203. APHIS inspection user fee on international passengers.
Sec. 1204. International sanctions.
Subtitle A--Commodity Programs
SEC. 1101. TRIPLE BASE FOR DEFICIENCY PAYMENTS.
  (a) IN GENERAL- The Secretary of Agriculture (hereafter in this title
  referred to as the `Secretary', unless the context otherwise requires), in
  making available to producers deficiency payments otherwise authorized by
  law for each of the 1992 through 1995 crops of wheat, feed grains, upland
  cotton, and rice, shall compute the amount of such payments by multiplying--
  (1) the payment rate; by
  (2) the payment acres for the crop (as determined under subsection (b)); by
  (3) the farm program payment yield for the crop for the farm.
  (b) PAYMENT ACRES- For purposes of subsection (a)(2), payment acres for
  a crop shall be--
  (1) the number of acres planted to the crop for harvest within the number
  of acres obtained by multiplying--
  (A) the crop acreage base for the crop for the farm; by
  (B) one minus the base reduction percentage (as determined under subsection
  (c)); less
  (2) the quantity of reduced acreage (as determined under subsection (d)(1)).
  (c) BASE REDUCTION PERCENTAGE- For purposes of subsection (b)(1)(B), the base
  reduction percentage shall be 15 percent for each of the 1992 and 1995 crops.
  (d) REDUCED AND PERMITTED ACREAGE-
  (1) REDUCED ACREAGE- For purposes of subsection (b)(2), the quantity
  of reduced acreage for a crop shall be the number of acres devoted to
  conservation uses that is determined by multiplying--
  (A) the crop acreage base; by
  (B) the percentage reduction required by the Secretary under an acreage
  limitation program announced by the Secretary.
  (2) PERMITTED ACREAGE- The remaining acreage is hereafter in this section
  referred to as `permitted acreage'.
  (e) PLANTING COMMODITIES ON PERMITTED ACREAGE- The Secretary shall permit
  producers on a farm to plant on permitted acreage for which the producers
  do not receive deficiency payments--
  (1) program crops (wheat, feed grains, cotton, or rice);
  (2) oilseeds (soybeans, sunflower, canola, rapeseed, safflower, flaxseed,
  or any other oilseeds the Secretary may designate) or industrial or
  experimental crops; and
  (3) any other crop, except any fruit or vegetable crop (including potatoes
  and dry edible beans) not designated as an industrial or experimental crop
  by the Secretary.
  (f) LOAN ELIGIBILITY- Producers on a farm who devote permitted acreage (for
  which the producers do not receive deficiency payments) to program crops
  or oilseeds described in paragraphs (1) and (2) in subsection (e) shall
  be eligible for loans under the Agricultural Act of 1949 (7 U.S.C. 1421
  et seq.) with respect to the program crop produced on such acreage.
SEC. 1102. CALCULATION OF DEFICIENCY PAYMENTS.
  (a) 12-MONTH AVERAGE- For purposes of calculating deficiency payments
  for each of the 1991 through 1995 crops of wheat, feed grains, and rice,
  the payment rate for a crop shall be the amount by which the established
  price for the crop exceeds--
  (1) in the case of wheat and feed grains, the higher of--
  (A) the lesser of--
  (i) the national weighted average market price received by producers during
  the marketing year for the crop, as determined by the Secretary; or
  (ii) the national weighted average market price received by producers during
  the first 5 months of the marketing year for the crop, as determined by
  the Secretary, plus 10 cents per bushel for wheat and 7 cents per bushel
  for feed grains; or
  (B) the loan level determined for the crop; and
  (2) in the case of rice, the higher of--
  (A) the lesser of--
  (i) the national average market price received by producers during the
  marketing year for the crop, as determined by the Secretary; or
  (ii) the national average market price received by producers during the
  first 5 months of the marketing year for the crop, as determined by the
  Secretary, plus 27 cents per hundredweight; or
  (B) the loan level determined for the crop.
  (b) ADJUSTMENT FOR BARLEY- For the purposes of determining the payment
  rate for deficiency payments for each of the 1991 through 1995 crops of
  barley, the Secretary shall include feed barley prices and malting barley
  prices in the computation of the national weighted average market price
  for barley, except that the Secretary shall exclude the portion of average
  malting barley prices received by producers that exceeds prices received
  by producers for feed barley by more than $0.50 per bushel.
SEC. 1103. ACREAGE REDUCTION PROGRAMS FOR 1991 THROUGH 1995 CROPS OF WHEAT,
FEED GRAINS, UPLAND COTTON, AND RICE.
  (a) MINIMUM PERCENTAGE REDUCTIONS- Except as provided in subsection (b),
  the Secretary shall announce an acreage limitation program for--
  (1) each of the 1991 through 1995 crops of wheat under which the acreage
  planted to wheat for harvest on a farm would be limited to the wheat crop
  acreage base for the farm for the crop reduced by--
  (A) in the case of the 1991 crop of wheat, not less than 15 percent;
  (B) in the case of the 1992 crop of wheat, not less than 6 percent;
  (C) in the case of the 1993 crop of wheat, not less than 5 percent;
  (D) in the case of the 1994 crop of wheat, not less than 7 percent; and
  (E) in the case of the 1995 crop of wheat, not less than 5 percent;
  (2) each of the 1991 through 1995 crops of corn, grain sorghum, and barely
  under which the acreage planted to the respective feed grain for harvest
  on a farm would be limited to the respective feed grain crop acreage base
  for the farm for the crop reduced by not less than 7 1/2  percent;
  (3) each of the 1991 through 1995 crops of oats under which the acreage
  planted to oats for harvest on a farm would be limited to the oat crop
  acreage base for the farm for the crop, reduced by not less than 0 percent;
  (4) each of the 1992 through 1995 crops of upland cotton under which the
  acreage planted to upland cotton for harvest on a farm would be limited
  to the upland cotton crop acreage base for the farm for the crop reduced by--
  (A) in the case of the 1992 crop of upland cotton, not less than 15
  percent; and
  (B) in the case of each of the 1993, 1994, and 1995 crops of upland cotton,
  not less than 20 percent; and
  (5) each of the 1992 through 1995 crops of rice under which the acreage
  planted to rice for harvest on a farm would be limited to the rice crop
  acreage base for the farm for the crop reduced by--
  (A) in the case of the 1992 crop of rice, not less than 18 1/2  percent;
  (B) in the case of the 1993 crop of rice, not less than 15 percent;
  (C) in the case of the 1994 crop of rice, not less than 14 percent; and
  (D) in the case of the 1995 crop of rice, not less than 10 percent.
  (b) STOCKS-TO-USE RATIO- Notwithstanding any other provision of law,
  subsection (a) shall not apply to a crop if the Secretary estimates for
  such crop that the stocks-to-use ratio will be less than--
  (1) in the case of wheat, 34 percent;
  (2) in the case of corn, grain sorghum, and barley, 20 percent;
  (3) in the case of upland cotton, 30 percent; and
  (4) in the case of rice, 16 percent.
SEC. 1104. OILSEED PRICE SUPPORT.
  (a) IN GENERAL- Subject to subsection (b), in providing price support
  for oilseeds (soybeans, sunflower, canola, rapeseed, safflower, flaxseed,
  or any other oilseeds the Secretary may designate), the Secretary shall
  support the price of each of the 1991 through 1995 crops of--
  (1) oilseeds at a level of not less than $5.50 per bushel;
  (2) sunflower, canola, rapeseed, safflower, and flaxseed at a level of
  not less than $0.097 per pound; and
  (3) other oilseeds at such level as the Secretary determines will take into
  account the historical price relationship between each type of oilseeds
  and soybeans, the prevailing loan level for soybeans, and the historical
  meal oil content of each type of oilseeds and soybeans.
  (b) Adjustment-
  (1) SOYBEANS- Notwithstanding subsection (a), if the Secretary estimates,
  not later than September 30 of the year previous to the year in which the
  crop of soybeans is harvested that the stocks-to-use ratio for any of the
  1991 through 1995 crops of soybeans will be over 7.5 percent, the Secretary
  may establish the loan level for the crop at $5.00 per bushel.
  (2) OTHER OILSEEDS- If the Secretary adjusts the loan level for a crop of
  soybeans under paragraph (1), the Secretary shall make a corresponding
  adjustment in the loan level for sunflower seeds, canola, rapeseed,
  safflower, flaxseed, and any other oilseed designated by the Secretary
  under subsection (a).
SEC. 1105. DAIRY ASSESSMENTS.
  (a) IN GENERAL- The Secretary shall provide for a reduction in the price
  received by producers for all milk produced in the United States and
  marketed for commercial use.
  (b) AMOUNT- The amount of the reduction under subsection (a) in the price
  received by producers shall be 10 cents per hundredweight during the period
  beginning January 1, 1991, and ending August 31, 1995.
  (c) ADMINISTRATION- The funds represented by the reduction in price, required
  under this section to be applied to the marketings of milk by a producer,
  shall be collected and remitted to the Commodity Credit Corporation,
  at such time and in such manner as prescribed by the Secretary, by each
  person making payment to a producer for milk purchased from the producer,
  except that in the case of a producer who markets milk of the producer's
  own production directly to consumers, the funds shall be remitted directly
  to the Corporation by the producer.
SEC. 1106. LOAN ORIGINATION FEES AND PROGRAM SERVICE FEES.
  (a) SUGAR, HONEY, PEANUTS, AND TOBACCO- Effective for each of the 1991
  through 1995 crops of sugar beets, sugarcane, honey, peanuts, and tobacco,
  the Secretary shall charge the producer a loan origination fee for a price
  support loan for such crops equal to 3 percent of the amount of the loan.
  (b) WOOL- Effective for each of the 1991 through 1995 marketing years for
  wool and mohair, in connection with making price support available for
  such marketing years, the Secretary shall charge producers of wool and
  mohair a program service fee equal to not more 1 percent of the amount of
  the payment rate for wool and mohair for such marketing year as provided
  under the National Wool Act of 1954 (7 U.S.C. 1781 et seq.).
SEC. 1107. PRODUCER RESERVE PROGRAM FOR WHEAT AND FEED GRAINS.
  (a) IN GENERAL- In carrying out any producer reserve program for wheat and
  feed grains otherwise authorized by law, the Secretary shall formulate
  and administer such a producer storage program under which producers of
  wheat and feed grains will be able to store wheat and feed grains when the
  commodities are in abundant supply, extend the time period for the orderly
  marketing of the commodities, and provide for adequate carryover stocks
  to ensure a reliable supply of the commodities as provided in this section.
  (b) Terms of Program-
  (1) PRICE SUPPORT LOANS- In carrying out such a program, the Secretary shall
  provide original or extended price support loans for wheat and feed grains
  under terms and conditions designed to encourage producers to store wheat
  and feed grains for extended periods of time whenever the supply of wheat
  and feed grains are in abundant supply, as determined by the Secretary,
  or whenever the price of wheat or feed grains is less than 110 percent of
  the loan rate established under this title for wheat and feed grains.
  (2) LEVEL OF LOANS- Loans made under such a program shall not be less than
  the then current level of support under the wheat and feed grain programs
  established under this title.
  (3) OTHER TERMS AND CONDITIONS- Under such a program, the Secretary shall
  provide for--
  (A) loans with a maturity of not less than 3 years, with extensions as
  warranted by market conditions;
  (B) a rate of interest as provided under subsection (c); and
  (C) payments to producers for storage as provided in subsection (d).
  (4) REGIONAL DIFFERENCES- The Secretary shall ensure that producers are
  afforded a fair and equitable opportunity to participate in the program
  established under this section, taking into account regional differences
  in the time of harvest.
  (c) INTEREST CHARGES-
  (1) LEVYING OF INTEREST- The Secretary may charge interest on loans under
  such a program whenever the price of wheat or feed grains is equal to or
  exceeds the then current established price for the commodities.
  (2) 90-DAY PERIOD- If interest is levied on the loans under paragraph (1),
  the interest may be charged for a period of 90 days after the last day on
  which the price of wheat or feed grains was equal to or in excess of the
  then current established price for the commodities.
  (3) RATE OF INTEREST- The rate of interest charged participants in such
  a program shall not be less than the rate of interest charged by the
  Commodity Credit Corporation by the United States Treasury, except that
  the Secretary may waive or adjust the interest as the Secretary considers
  appropriate to effectuate the purposes of this section.
  (d) Storage Payments-
  (1) IN GENERAL- The Secretary shall provide storage payments to producers
  for storage of wheat or feed grains under such a program in such amounts and
  under such conditions as the Secretary determines appropriate to encourage
  producers to participate in such a program.
  (2) TIMING- The Secretary shall make storage payments available to
  participants in such a program at the end of each quarter.
  (3) DURATION- The Secretary may cease making storage payments whenever
  the price of wheat or feed grains is equal to or exceeds the then current
  established price for the commodities, and for any 90-day period immediately
  following the last day on which the price of wheat or feed grains was equal
  to or in excess of the then current established price for the commodities.
  (e) EMERGENCIES- Notwithstanding any other provision of law, the Secretary
  may require producers to repay loans under such a program, plus accrued
  interest and such other charges as may be required by regulation prior
  to the maturity date thereof, if the Secretary determines that emergency
  conditions exist that require that the commodity be made available in the
  market to meet urgent domestic or international needs and the Secretary
  reports the determination and the reasons for the determination to the
  President, the Committee on Agriculture of the House of Representatives,
  and the Committee on Agriculture, Nutrition, and Forestry of the Senate
  at least 14 days before taking the action.
  (f) QUANTITY OF COMMODITIES IN PROGRAM- The Secretary may establish maximum
  quantities of wheat and feed grains that may receive loans and storage
  payments under such a program as follows:
  (1) The maximum quantities may not be established at less than 300 million
  bushels of wheat and 600 million bushels of feed grains.
  (2) The maximum quantities may not be established at more than--
  (A) 30 percent of the estimated total domestic and export usage of wheat
  during the marketing year for the crop of wheat, as determined by the
  Secretary; and
  (B) 15 percent of the estimated total domestic and export usage of feed
  grains during the marketing year for the crop, as determined by the
  Secretary.
  (3) Notwithstanding paragraph (2), the Secretary may establish the upper
  limits at higher levels, not in excess of 110 percent of the levels
  established in paragraph (2), if the Secretary determines that the higher
  limits are necessary to achieve the purposes of such a program.
  (g) Announcement of Program-
  (1) TIME OF ANNOUNCEMENT- The Secretary shall announce the terms and
  conditions of such a producer storage program as far in advance of making
  loans as practicable.
  (2) CONTENT OF ANNOUNCEMENT- In the announcement, the Secretary shall
  specify the quantity of wheat or feed grains to be stored under such a
  program that the Secretary determines appropriate to promote the orderly
  marketing of the commodities.
  (h) RECONCENTRATION OF GRAIN- The Secretary may, with the concurrence of
  the owner of grain stored under such a program, reconcentrate all such grain
  stored in commercial warehouses at such points as the Secretary considers to
  be in the public interest, taking into account such factors as transportation
  and normal marketing patterns. The Secretary shall permit rotation of stocks
  and facilitate maintenance of quality under regulations that assure that
  the holding producer or warehouseman shall, at all times, have available
  for delivery at the designated place of storage both the quantity and
  quality of grain covered by the producer's or warehouseman's commitment.
  (i) MANAGEMENT OF GRAIN- Whenever grain is stored under such a program,
  the Secretary may buy and sell at an equivalent price, allowing for the
  customary location and grade differentials, substantially equivalent
  quantities of grain in different locations or warehouses to the extent
  needed to properly handle, rotate, distribute, and locate the commodities
  that the Commodity Credit Corporation owns or controls. The purchases to
  offset sales shall be made within 2 market days following the sales. The
  Secretary shall make a daily list available showing the price, location,
  and quantity of the transactions.
  (j) USE OF COMMODITY CERTIFICATES- Notwithstanding any other provision of
  law, if a producer has substituted purchased or other commodities for the
  commodities originally pledged as collateral for a loan made under such
  a program, the Secretary may allow a producer to repay the loan using a
  generic commodity certificate that may be exchanged for commodities owned
  by the Commodity Credit Corporation, if the substitute commodities have
  been pledged as loan collateral and redeemed only within the same county.
SEC. 1108. PAYMENT OF INTEREST ON CERTIFICATES.
  Section 107E of the Agricultural Act of 1949 (7 U.S.C. 1445b-4) is amended
  by adding at the end the following new subsection:
  `(c)(1) Except as provided in paragraph (2), the Secretary shall pay
  interest on the cash redemption of a commodity certificate issued by the
  Secretary to a producer who holds the certificate for at least 150 days.
  `(2) This subsection shall not apply to a commodity certificate issued
  under the export enhancement program or the marketing promotion program.'.
Subtitle B--Other Agricultural Programs
SEC. 1201. AUTHORIZATION LEVELS FOR REA LOANS.
  (a) IN GENERAL- Subject to the other provisions of this section and
  notwithstanding any other provision of law, for each of fiscal years
  1991 through 1995, loans may be insured in accordance with the Rural
  Electrification Act of 1936 (7 U.S.C. 901 et seq.) from the Rural
  Electrification and Telephone Revolving Fund established under section
  301 of such Act (7 U.S.C. 931) in amounts equal to the following levels:
  (1) For fiscal year 1991, $896,000,000.
  (2) For fiscal year 1992, $932,000,000.
  (3) For fiscal year 1993, $969,000,000.
  (4) For fiscal year 1994, $1,008,000,000.
  (5) For fiscal year 1995, $1,048,000,000.
  (b) REDUCTION- Notwithstanding any other provision of law, for each of fiscal
  years 1991 through 1995, the Administrator of the Rural Electrification
  Administration shall reduce the amounts otherwise made available for insured
  loans made from the Rural Electrification and Telephone Revolving Fund by--
  (1) $224,000,000 for fiscal year 1991;
  (2) $234,000,000 for fiscal year 1992;
  (3) $244,000,000 for fiscal year 1993;
  (4) $256,000,000 for fiscal year 1994; and
  (5) $267,000,000 for fiscal year 1995.
  (c) MANDATORY LEVELS- Notwithstanding any other provision of law, the
  Administrator shall insure loans at the levels authorized by this section
  for each of fiscal years 1991 through 1995.
  (d) GUARANTEED LOANS- Notwithstanding any other provision of law, in
  carrying out the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.),
  the Administrator shall increase the amounts otherwise made available
  to guarantee loans made by legally organized lending agencies. The loans
  shall be guaranteed at 99 percent of the principal amount of the loan.
SEC. 1202. AUTHORIZATION LEVELS FOR FmHA LOANS.
  (a) IN GENERAL- Subject to the other provisions of this section and
  notwithstanding any other provision of law, for each of fiscal years
  1991 through 1995, real estate and operating loans may be insured,
  made to be sold and insured, or guaranteed in accordance with subtitles
  A and B, respectively, of the Consolidated Farm and Rural Development
  Act (7 U.S.C. 1921 et seq.) from the Agricultural Credit Insurance Fund
  established under section 309 of such Act (7 U.S.C. 1929) in amounts equal
  to the following levels:
  (1) For fiscal year 1991, $4,175,000,000, of which not less than $827,000,000
  shall be for farm ownership loans under subtitle A of such Act.
  (2) For fiscal year 1992, $4,343,000,000, of which not less than $861,000,000
  shall be for farm ownership loans under subtitle A of such Act.
  (3) For fiscal year 1993, $4,516,000,000, of which not less than $895,000,000
  shall be for farm ownership loans under subtitle A of such Act.
  (4) For fiscal year 1994, $4,697,000,000, of which not less than $931,000,000
  shall be for farm ownership loans under subtitle A of such Act.
  (5) For fiscal year 1995, $4,885,000,000, of which not less than $968,000,000
  shall be for farm ownership loans under subtitle A of such Act.
  (b) APPORTIONMENT OF INSURED AND GUARANTEED LOANS- Subject to subsection
  (c), the amounts set forth in subsection (a) shall be apportioned as follows:
  (1) For fiscal year 1991--
  (A) $1,019,000,000 for insured loans, of which not less than $83,000,000
  shall be for farm ownership loans; and
  (B) $3,156,000,000 for guaranteed loans, of which not less than $744,000,000
  shall be for guarantees of farm ownership loans.
  (2) For fiscal year 1992--
  (A) $1,060,000,000 for insured loans, of which not less than $87,000,000
  shall be for farm ownership loans; and
  (B) $3,283,000,000 for guaranteed loans, of which not less than $774,000,000
  shall be for guarantees of farm ownership loans.
  (3) For fiscal year 1993--
  (A) $1,102,000,000 for insured loans, of which not less than $90,000,000
  shall be for farm ownership loans; and
  (B) $3,414,000,000 for guaranteed loans, of which not less than $805,000,000
  shall be for guarantees of farm ownership loans.
  (4) For fiscal year 1994--
  (A) $1,147,000,000 for insured loans, of which not less than $94,000,000
  shall be for farm ownership loans; and
  (B) $3,550,000,000 for guaranteed loans, of which not less than $837,000,000
  shall be for guarantees of farm ownership loans.
  (5) For fiscal year 1995--
  (A) $1,192,000,000 for insured loans, of which not less than $97,000,000
  shall be for farm ownership loans; and
  (B) $3,693,000,000 for guaranteed loans, of which not less than $871,000,000
  shall be for guarantees of farm ownership loans.
  (c) TRANSFER OF FUNDS FROM INSURED TO GUARANTEED LOANS- Notwithstanding
  any other provision of law, for each of fiscal years 1991 through 1995,
  the Secretary shall--
  (1) reduce the amounts otherwise made available for insured loans made
  from the Agricultural Credit Insurance Fund by--
  (A) $319,000,000 for fiscal year 1991;
  (B) $460,000,000 for fiscal year 1992;
  (C) $602,000,000 for fiscal year 1993;
  (D) $697,000,000 for fiscal year 1994; and
  (E) $792,000,000 for fiscal year 1995; and
  (2) use the funds made available from the reduction made in paragraph (1)
  in the available amount of insured loans in each of the fiscal years to
  guarantee loans made from the Fund.
  (c) MANDATORY LEVELS- Notwithstanding any other provision of law, the
  Secretary shall make or insure loans at the levels authorized by this
  section for each of fiscal years 1991 through 1995.
SEC. 1203. APHIS INSPECTION USER FEE ON INTERNATIONAL PASSENGERS.
  (a) IN GENERAL- The Secretary may prescribe and collect fees to cover
  the cost of providing agricultural quarantine and inspection services
  in connection with the arrival at a port in the customs territory of the
  United States, or the preclearance or preinspection at a site outside the
  customs territory of the United States, of an international passenger.
  (b) TREASURY- Any person who collects a fee under this section shall remit
  the fee to the Treasury of the United States prior to the date that is 31
  days after the close of the calendar quarter in which the fee is collected.
  (c) Agricultural Quarantine Inspection User Fee Account-
  (1) ESTABLISHMENT- There is established in the Treasury of the United States
  a no-year fund, to be known as the `Agricultural Quarantine Inspection User
  Fee Account' (hereafter in this section referred to as the `Account'),
  for the use of the Secretary of Agriculture for quarantine or inspection
  services under this section.
  (2) Amounts in account-
  (A) DEPOSITS- All fees collected under this subsection shall be deposited
  in the Account.
  (B) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated
  amounts in the Fund for use by the Secretary of Agriculture for quarantine
  or inspection services.
  (d) ADJUSTMENT IN FEE AMOUNTS- The Secretary shall adjust the amount of
  the fees to be assessed under this section to reflect the cost to the
  Secretary in--
  (1) administering this section;
  (2) carrying out the activities at ports in the customs territory of
  the United States and preclearance and preinspection sites outside the
  customs territory of the United States in connection with the provision
  of agricultural quarantine inspection services; and
  (3) maintaining a reasonable balance in the Account.
SEC. 1204. INTERNATIONAL SANCTIONS.
  Notwithstanding any other provision of law, title XXIII of S. 2830 (as
  passed by the Senate on July 27, 1990) shall have no force and effect.
TITLE II--COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
Subtitle A--Federal Deposit Insurance Premiums
Sec. 2001. Short title.
Sec. 2002. FDIC authorized to increase assessment rates as necessary to
protect insurance funds.
Sec. 2003. FDIC authorized to make mid-year adjustments in assessment rates.
Sec. 2004. FDIC authorized to set designated reserve ratio as necessary in
face of significant risk of substantial losses to insurance fund.
Sec. 2005. FDIC authorized to borrow from Federal Financing Bank.
Sec. 2006. Priority of certain claims.
Subtitle B--FHA Mortgage Insurance
Sec. 2101. FHA ceiling.
Sec. 2102. Reverse mortgage insurance.
Sec. 2103. Actuarial soundness for the mutual mortgage insurance fund.
Sec. 2104. Risk-based periodic mortgage insurance premium.
Sec. 2105. Mortgagor equity in the basic FHA home mortgage insurance program.
Sec. 2106. Mutual mortgage insurance fund distributions.
Subtitle C--Mortgage Assignments
Sec. 2201. Amendment to section 221(g)(4) of the National Housing Act.
Subtitle D--Crime and Flood Insurance Programs
Sec. 2301. Crime insurance program.
Sec. 2302. Flood insurance program.
TITLE II--COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
Subtitle A--Federal Deposit Insurance Premiums
SEC. 2001. SHORT TITLE.
  This Act may be cited as the `FDIC Premium Act of 1990'.
SEC. 2002. FDIC AUTHORIZED TO INCREASE ASSESSMENT RATES AS NECESSARY TO
PROTECT INSURANCE FUNDS.
  (a) BANK INSURANCE FUND- Section 7(b)(1)(C) of the Federal Deposit Insurance
  Act (12 U.S.C. 1817(b)(1)(C)) is amended to read as follows:
  `(C) ASSESSMENT RATE FOR BANK INSURANCE FUND MEMBERS-
  `(i) IN GENERAL- The assessment rate for Bank Insurance Fund members shall
  be the greater of 0.15 percent or such rate as the Board of Directors,
  in its sole discretion, determines to be appropriate--
  `(I) to maintain the reserve ratio at the designated reserve ratio; or
  `(II) if the reserve ratio is less than the designated reserve ratio,
  to increase the reserve ratio to the designated reserve ratio within a
  reasonable period of time.
  `(ii) FACTORS TO BE CONSIDERED- In making any determination under clause
  (i), the Board of Directors shall consider the Bank Insurance Fund's
  expected operating expenses, case resolution expenditures, and income,
  the effect of the assessment rate on members' earnings and capital and on
  the safety and soundness of the financial system, and such other factors
  as the Board of Directors may deem appropriate.
  `(iii) MINIMUM ASSESSMENT- Notwithstanding clause (i), the assessment
  shall not be less than $1,000 for each member in each year.'.
  (b) SAVINGS ASSOCIATION INSURANCE FUND- Section 7(b)(1)(D) of the Federal
  Deposit Insurance Act (12 U.S.C. 1817(b)(1)(D)) is amended to read as
  follows:
  `(D) ASSESSMENT RATE FOR SAVINGS ASSOCIATION INSURANCE FUND MEMBERS-
  `(i) IN GENERAL- The assessment rate for Savings Association Insurance Fund
  members shall be the greater of 0.15 percent or such rate as the Board of
  Directors, in its sole discretion, determines to be appropriate--
  `(I) to maintain the reserve ratio at the designated reserve ratio; or
  `(II) if the reserve ratio is less than the designated reserve ratio,
  to increase the reserve ratio to the designated reserve ratio within a
  reasonable period of time.
  `(ii) FACTORS TO BE CONSIDERED- In making any determination under clause
  (i), the Board of Directors shall consider the Savings Association Insurance
  Fund's expected operating expenses, case resolution expenditures, and income
  (not including anticipated Treasury payments), the effect of the assessment
  rate on members' earnings and capital and on the safety and soundness of
  the financial system, and such other factors as the Board of Directors
  may deem appropriate.
  `(iii) MINIMUM ASSESSMENT- Notwithstanding clause (i), the assessment
  shall not be less than $1,000 for each member in each year.
  `(iv) TRANSITION RULE- Until December 31, 1997, the assessment rate for
  Savings Association Insurance Fund members shall not be less than the
  following:
  `(I) From January 1, 1990, through December 31, 1990, 0.208 percent.
  `(II) From January 1, 1991, through December 31, 1993, 0.23 percent.
  `(III) From January 1, 1994, through December 31, 1997, 0.18 percent.'.
  (c) CLERICAL AMENDMENTS REFLECTING $1,000 MINIMUM ASSESSMENT PROVISIONS
  OF CURRENT LAW- Section 7(b)(2)(A) of the Federal Deposit Insurance Act
  (12 U.S.C. 1817(b)(2)(A)) is amended--
  (1) by inserting `or subparagraph (C)(iii) or (D)(iii) of subsection
  (b)(1)' after `subsection (c)(2)'; and
  (2) in clauses (i) and (ii), by inserting `the greater of $500 or an amount'
  before `equal to the product of'.
SEC. 2003. FDIC AUTHORIZED TO MAKE MID-YEAR ADJUSTMENTS IN ASSESSMENT RATES.
  (a) ASSESSMENT RATES- Section 7(b)(1)(A) of the Federal Deposit Insurance
  Act (12 U.S.C. 1817(b)(1)(A)) is amended to read as follows:
  `(A) ASSESSMENT RATES PRESCRIBED-
  `(i) AUTHORITY TO SET RATES- Subject to clause (iii), the Corporation shall
  set assessment rates for insured depository institutions at such times as
  the Corporation, in its sole discretion, determines to be appropriate.
  `(ii) RATE FOR EACH FUND TO BE SET INDEPENDENTLY- The Corporation shall
  fix the assessment rate of Bank Insurance Fund members independently from
  the assessment rate for Savings Association Insurance Fund members.
  `(iii) DEADLINE FOR ANNOUNCING RATE CHANGES- The Corporation shall announce
  any change in assessment rates-
  `(I) for the semiannual period beginning on January 1 and ending on June
  30, not later than the preceding November 1; and
  `(II) for the semiannual period beginning on July 1 and ending on December
  31, not later than the preceding May 1.'.
  (b) ASSESSMENT PROCEDURES- Section 7(b)(2)(A) of the Federal Deposit
  Insurance Act (12 U.S.C. 1817(b)(2)(A)), as amended by section 2(c) of
  this Act, is amended--
  (1) by striking `annual' each time it appears;
  (2) in clause (i)(I), by inserting `during that semiannual period' after
  `member'; and
  (3) in clause (ii)(I), by inserting `during that semiannual period' after
  `member'.
  (c) CONFORMING AMENDMENT ON TIMING OF ASSESSMENT CREDITS- Section 7(d)(1)(A)
  of the Federal Deposit Insurance Act (12 U.S.C. 1817(d)(1)(A)) is amended
  to read as follows:
  `(A) The Corporation shall prescribe and publish the aggregate amount to
  be credited to insured depository institutions--
  `(i) in the semiannual period beginning on January 1 and ending on June 30,
  not later than the preceding November 1; and
  `(ii) in the semiannual period beginning on July 1 and ending on December
  31, not later than the preceding May 1.'.
SEC. 2004. FDIC AUTHORIZED TO SET DESIGNATED RESERVE RATIO AS NECESSARY IN
FACE OF SIGNIFICANT RISK OF SUBSTANTIAL LOSSES TO INSURANCE FUND.
  Section 7(b)(1)(B) of the Federal Deposit Insurance Act (12
  U.S.C. 1817(b)(1)(B)) is amended--
  (1) by striking `, not exceeding 1.50 percent,' each time it appears;
  (2) in clause (iii)--
  (A) by inserting `and' at the end of subclause (I);
  (B) by striking subclauses (II) and (III); and
  (C) by redesignating subclause (IV) as subclause (II); and
  (3) in clause (iv)--
  (A) by inserting `and' at the end of subclause (I);
  (B) by striking subclauses (II) and (III); and
  (C) by redesignating subclause (IV) as subclause (II).
SEC. 2005. FDIC AUTHORIZED TO BORROW FROM FEDERAL FINANCING BANK.
  Section 14 of the Federal Deposit Insurance Act (12 U.S.C. 1824) is amended--
  (1) in the heading, by striking `SEC. 14.' and inserting:
`SEC. 14. BORROWING AUTHORITY.
  `(a) BORROWING FROM TREASURY- ';
  (2) in subsection (a), as designated by paragraph (1)--
  (A) by striking `this section' each time it appears and inserting `this
  subsection', and
  (B) by striking `The Corporation may employ such funds' and inserting
  `The Corporation may employ any funds obtained under this section only'; and
  (3) by adding after subsection (a), as amended by paragraph (2), the
  following new subsection:
  `(b) BORROWING FROM FEDERAL FINANCING BANK- The Corporation is authorized to
  issue and sell the Corporation's obligations to the Federal Financing Bank
  established by the Federal Financing Bank Act of 1973. The Federal Financing
  Bank is authorized to purchase and sell the Corporation's obligations on
  terms and conditions determined by the Federal Financing Bank.'.
SEC. 2006. PRIORITY OF CERTAIN CLAIMS.
  (a) IN GENERAL- Section 11 of the Federal Deposit Insurance Act (12
  U.S.C. 1821) is amended by adding at the end the following:
  `(p) PRIORITY OF CERTAIN CLAIMS- (1) Subject to paragraph (2), in any
  proceeding brought by the Corporation related to any claim acquired
  under this section or section 12 or 13 against an insured depository
  institution's director, officer, employee, agent, attorney, accountant,
  appraiser, or any other party employed by or providing services to an
  insured depository institution, any suit, claim, or cause of action
  brought by the Corporation shall have priority over any suit, claim, or
  cause of action asserted against that person by a depositor, creditor,
  or shareholder of the insured depository institution other than a suit,
  claim, or cause of action asserted by a Federal agency (other than the
  Corporation) or the United States.
  `(2)(A) If the Corporation is notified in writing of the commencement of
  a suit, claim, or cause of action asserted by a depositor, creditor, or
  shareholder of an insured depository institution in a proceeding described
  in paragraph (1), a suit, claim, or cause of action of the Corporation
  shall not have priority under paragraph (1) unless--
  `(i) not later than 180 days after the date on which the Corporation receives
  the notice, or if the Corporation acquires its claim after receipt of the
  notice, not later than 180 days after the date on which the Corporation
  acquires its claim, the Corporation files with the court a statement that
  the Corporation intends to pursue potential claims against the insured
  depository institution's director, officer, employee, agent, attorney,
  accountant, appraiser, or other person employed by or providing services to
  the insured depository institution and is diligently pursuing its claims; and
  `(ii) not later than 1 year after the date on which the Corporation receives
  the notice (or, if the Corporation acquires its claim after receipt of
  the notice, not later than 1 year after the date on which the Corporation
  acquires its claim), the Corporation files suit, unless the court enlarges
  the time for filing suit pursuant to subparagraph (B).
  `(B)(i) If the Corporation requests an enlargement of time to file a suit
  described in subparagraph (A)(ii), the court shall extend the period for
  the Corporation to commence its proceeding unless the court finds that the
  prejudice that would result to a person's ability to prove the person's
  claim that would result from a grant of the requested enlargement of time
  would outweigh the harm to the Government that would result from a denial
  of the requested enlargement of time.
  `(ii) In making a finding under clause (i), the court shall consider the
  diligence with which the Corporation is investigating its claim.
  `(3) The priority of the Corporation shall apply both to the prosecution of
  any suit, claim, or cause of action, and to the execution of any subsequent
  judgment resulting from such suit, claim, or cause of action.
  `(4) This subsection shall not be construed to afford the Corporation
  priority as to an asset that is adjudicated to be unavailable to satisfy
  any subsequent judgment obtained by the Corporation as a result of its suit,
  claim, or cause of action.'.
  (b) APPLICABILITY- The amendment made by subsection (a) shall not apply to
  suits, claims, or causes of action of depositors, creditors, or shareholders
  commenced before the date of enactment of this Act.
Subtitle B--FHA Mortgage Insurance
SEC. 2101. FHA CEILING.
  Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2))
  is amended by striking `150 percent (185 percent until October 31, 1990)
  of the dollar amount specified' and inserting the following: `185 percent
  of the dollar amount specified'.
SEC. 2102. REVERSE MORTGAGE INSURANCE.
  (a) LIMITATION ON INSURANCE AUTHORITY AND MAXIMUM AMOUNT INSURED- Section
  255(g) of the National Housing Act (12 U.S.C. 1715z-20(g)) is amended by
  striking `1991' and inserting `1993', and by striking the second sentence
  and inserting the following: `The total number of mortgages insured under
  this section may not exceed 25,000.'.
  (b) TYPES OF LOANS- Section 255(d) of the National Housing Act (12
  U.S.C. 1715z-20(d)) is amended--
  (1) in paragraph (7), by striking `and' at the end;
  (2) in paragraph (8), by striking the period at the end and inserting a
  semicolon; and
  (3) by adding at the end the following:
  `(9) provide for future payments to the mortgagor based on accumulated
  equity (minus any applicable fees and charges), according to the method
  that the mortgagor shall select from among the methods under this paragraph,
  by payment of the amount--
  `(A) based upon a line of credit;
  `(B) on a monthly basis over a term specified by the mortgagor;
  `(C) on a monthly basis over a term specified by the mortgagor and based
  on a line of credit;
  `(D) on a monthly basis over the tenure of the mortgagor;
  `(E) on a monthly basis over the tenure of the mortgagor and based upon
  a line of credit; or
  `(F) on any other basis that the Secretary considers appropriate; and
  `(10) provide that the mortgagor may convert the method of payment under
  paragraph (9) to any other method during the term of the mortgage, except
  that for fixed rate mortgages, the Secretary may prescribe regulations
  limiting convertability under this paragraph.'.
  (c) LIMITATION ON LIABILITY OF MORTGAGOR- Section 255(d)(7) of the National
  Housing Act (12 U.S.C. 1715z-20(d)(7)) is amended by striking subparagraph
  (A) and inserting the following new subparagraph:
  `(A) the net sales proceeds from the dwelling that are subject to the
  mortgage (based upon the amount of the accumulated equity selected by the
  mortgagor subject to the mortgage, as agreed upon by the mortgagor and
  mortgagee); or'.
SEC. 2103. ACTUARIAL SOUNDNESS FOR THE MUTUAL MORTGAGE INSURANCE FUND.
  Section 205 of the National Housing Act (12 U.S.C. 1711) is amended by
  adding the following new subsections at the end thereof:
  `(e)(1) The Secretary shall ensure that the Mutual Mortgage Insurance Fund
  attains a capital ratio of at least 1.25 percent within 18 months of the
  date of enactment of this subsection, and shall ensure that at least this
  ratio is maintained at all times thereafter. If the Secretary determines
  that the Fund does not have a capital ratio of at least 1.25 percent at any
  time from the date of enactment of this subsection, the Secretary shall,
  at least annually, report to the Congress on the financial status of the
  Fund, advise the Congress of any administrative measures being taken to
  attain and maintain a capital ratio of at least 1.25 percent, and make
  any legislative recommendations that the Secretary deems appropriate.
  `(2) The Secretary shall endeavor to ensure that the Mutual Mortgage
  Insurance Fund attains and maintains a capital ratio of at least 2
  percent. Beginning 3 years from the date of enactment of this subsection,
  the Secretary shall report annually to the Congress on the financial
  status of the Mutual Mortgage Insurance Fund and efforts to meet the
  capital ratio goal of at least 2 percent.
  `(3) For purposes of this subsection--
  `(A) the term `capital' means the economic net worth of the Mutual Mortgage
  Insurance Fund, as determined by the Secretary under the annual audit
  required by section 538 of this Act;
  `(B) the term `economic net worth' means the current cash available to the
  Fund, plus the net present value of all future cash inflows and outflows
  expected to result from the outstanding mortgages in the Fund;
  `(C) the term `capital ratio' means the ratio of capital to unamortized
  insurance-in-force; and
  `(D) the term `unamortized insurance-in-force' means the Secretary's
  estimate of the remaining obligation on outstanding mortgages which are
  obligations of the Mutual Mortgage Insurance Fund.
  `(f) The Secretary shall annually conduct an independent actuarial study
  of the Mutual Mortgage Insurance Fund.
  `(g) If the independent annual actuarial study of the Mutual Mortgage
  Insurance Fund required under subsection (f) shows that the Mutual Mortgage
  Insurance Fund is not meeting the following principles of operation:
  `(1) maintaining an adequate capital ratio as defined in subsections (e)(1)
  and (e)(2); and
  `(2) Meeting the needs of first-time homebuyers by providing access to
  mortgage credit; and
  `(3) Avoiding the problems of adverse selection by establishing premiums
  related to the probability of homeowner default; and
  `(4) Minimizing the risk to the Fund and to homeowners from homeowner
  default;
then the Secretary may propose through regulation and implement any adjustments
to the insurance premiums referred to in section 203(c), or any other program
requirements established by the Secretary, as is necessary to achieve these
principles. As soon as the Secretary determines that a premium or other change
is appropriate under the preceding sentence, the Secretary shall immediately
notify Congress of the proposed change and the reasons for it. Such premium
change shall take effect not earlier than 90 days following such notification,
unless Congress acts during such time to prevent it.'.
SEC. 2104. RISK-BASED PERIODIC MORTGAGE INSURANCE PREMIUM.
  Section 203(c) of the National Housing Act (12 U.S.C. 1709(c)) is amended
  by adding at the end thereof the following:
  `Notwithstanding any other provision of law, the Secretary may require
  payment on mortgages which are obligations of the Mutual Mortgage Insurance
  Fund of an additional premium charge on a periodic basis as determined by
  the Secretary to be consistent with sound actuarial practice and taking into
  account high loan-to-value ratios. Such determination shall be in accordance
  with the findings of the annual actuarial study of the Mutual Mortgage
  Insurance Fund required under section 205(e). The additional premium charge
  may not exceed an amount   equivalent to one-half of 1 percent per year
  of the amount  of the principal obligation of the mortgage outstanding at
  any time, without taking into account delinquent payments or prepayments,
  and may be required (A) for up to 15 years if the initial loan-to-value
  ratio of the mortgage is greater than 95 percent, (B) for up to 10 years
  if the initial loan-to-value ratio is equal to or less than 95 percent
  but equal to or greater than 93 percent, and (C) for up to 4 years if the
  initial loan-to-value ratio is less than 93 percent but greater than or
  equal to 90 percent. The Secretary may establish a periodic premium rate
  higher than that referred to in the preceding sentence if necessary to
  achieve actuarial soundness. The Secretary shall not require payment of
  an additional premium charge where the initial loan-to-value ratio of
  the mortgage is less than 90 percent. For purposes of this paragraph,
  the premium charges shall not be included in the determination of the
  initial loan-to-value ratio  of the mortgage.'.
SEC. 2105. MORTGAGOR EQUITY IN THE BASIC FHA HOME MORTGAGE INSURANCE PROGRAM.
  Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2))
  is amended by inserting at the end thereof the following new paragraph.
  `Notwithstanding any other provision of this paragraph, a mortgage may not
  have a principal obligation in excess of 98 percent of the appraised value of
  the property (97 percent, in the case of a mortgage with an appraised value
  in excess of $50,000), plus the amount of the mortgage insurance premium
  paid at the time the mortgage is insured. For purposes of the preceding
  sentence, `appraised value'  shall be the amount set forth in the written
  statement required by section 226, or a similar amount determined by the
  Secretary if section 226 does not apply.'.
SEC. 2106. MUTUAL MORTGAGE INSURANCE FUND DISTRIBUTIONS.
  Section 205 of the National Housing Act (12 U.S.C. 1711) is amended by
  adding at the end the following:
  `(h) In determining whether there is a surplus for distribution to mortgagors
  under this section, the Secretary shall take into account the actuarial
  status of the entire Fund.'.
Subtitle C--Mortgage Assignments
SEC. 2201. AMENDMENT TO SECTION 221(g)(4) OF THE NATIONAL HOUSING ACT.
  Section 221(g)(4) of the National Housing Act (12 U.S.C. 1715l) is amended
  by adding after subparagraph (B) the following:
  `(C)(i) In lieu of accepting assignment of the original credit instrument
  and the mortgage securing the same under subparagraph (A) in exchange
  for receipt of debentures, the Secretary shall arrange for the sale of
  the beneficial interests in the mortgage loan through an auction and sale
  of the (I) mortgage loans, or (II) participation certificates, or other
  mortgage-backed obligations in a form acceptable to the Secretary (herein
  referred to as `participating certificates', unless the mortgagee can
  demonstrate that the auction and sale is less economically advantageous
  to it than the receipt of debentures. The Secretary shall arrange the
  auction and sale at a price, to be paid to the mortgagee, of par plus
  accrued interest to the date of sale. The sale price would also include
  the right to a subsidy payment described in subsection (c).
  `(ii)(I) The Secretary shall conduct a public auction to determine the
  lowest interest rate necessary to accomplish a sale of the beneficial
  interests in the original credit instrument and mortgage securing such a
  credit instrument.
  `(II) A mortgagee who elects to assign his mortgage must provide
  the Secretary and persons bidding at the auction a description of the
  characteristics of the original credit instrument and mortgage securing
  the original credit instrument to include, but not be limited to: principal
  mortgage balance; original stated interest rate; service fees; real estate
  and tenant characteristics; the level and duration of applicable Federal
  subsidies; and any other information determined by the Secretary to be
  appropriate. The Secretary shall also provide the status of this property
  with respect to provisions in the Emergency Low Income Housing Preservation
  Act of 1987 or any subsequent Act with respect to eligibility to prepay
  mortgage, whether the owner has filed an Intent to Prepay or a Plan of
  Action under the Emergency Low Income Housing Preservation Act of 1987
  or under any subsequent Act; and the details with respect to incentives
  provided in the Emergency Low Income Housing Preservation Act of 1987 or
  under any subsequent Act in lieu of exercising prepayment rights.
  `(III) The Secretary shall, upon receipt of the information in subclause
  (II), promptly advertise for an auction and publish such mortgage
  descriptions in advance of the auction. For administrative simplicity,
  the Secretary may wait up to 6 months to conduct the auction, but under no
  circumstances may the Secretary conduct an auction before 2 months after
  receiving the mortgagee's written notice of intent to assign its mortgage
  to the Secretary.
  `(IV) The lowest interest rate bid for such purchase by a bidder determined
  by the Secretary to be acceptable shall be accepted by the Secretary and
  published in the Federal Register. Settlement for the sale of the credit
  instrument and the mortgage underlying the credit instrument shall occur
  within 30 business days of the date winning bidders are selected in the
  auction.
  `(V) If no bids are received or if the bids that are received are not
  acceptable to the Secretary, the mortgage shall retain all rights under
  this section to assign the mortgage loan to the Secretary.
  `(iii) As part of the auction process, the Secretary shall agree to provide
  a monthly interest subsidy payment from the General Insurance Fund to the
  holder of the original credit instrument and the mortgage securing such a
  credit instrument (and its assigns who are approved mortgagees). The subsidy
  payment shall be paid on the first day of each month in an amount equal to
  the difference between the stated interest due on the mortgage loan and the
  lowest interest rate necessary to accomplish a sale of the Participation
  Certificates for the then unpaid principal balance plus accrued interest
  on the mortgage loan. Each interest subsidy payment shall be treated by
  the holder of the mortgage as interest paid on the mortgage. Such interest
  subsidy payment shall be provided until the earlier of--
  `(I) the maturity date of the loan;
  `(II) prepayment of the mortgage loan in accordance with the Emergency
  Low Income Housing Preservation Act of 1987 or any subsequent Act, where
  applicable; or
  `(III) default and full payment of insurance benefits on the mortgage loan
  by the Federal Housing Administration.
  `(iv) The Secretary shall require that the loans presented for assignment
  be auctioned with servicing rights as whole loans and as participating
  certificates with servicing retained by the current servicer, except that
  the Secretary may determine if the inclusion of servicing rights in the sale
  will prove beneficial to the financial interests of the Federal Government.
  `(v) To the extent practicable, the Secretary shall encourage State Housing
  Finance Agencies, nonprofit organizations, and organizations representing
  the tenants of the property for which the mortgage is being sold, or some
  other qualified mortgagee participating in a Plan of Action described in
  the Emergency Low Income Housing Preservation Act of 1987 or subsequent
  Act to participate fully in the auction and subsidy mechanism, described
  in clauses (ii) and (iii).
  `(vi) The Secretary shall implement the requirements imposed by this
  subparagraph within 30 days from the date of enactment and not be subject to
  the requirement of prior issuance of regulations in the Federal Register. The
  Secretary shall issue regulations implementing this section within 6 months
  of enactment.
  `(vii) Nothing in this subparagraph shall diminish or impair the low income
  use restrictions applicable to the project under the original regulatory
  agreement or the revised agreement entered into pursuant to the Emergency
  Low Income Housing Preservation Act of 1987 or subsequent Act, if any,
  or other agreements for the provision of Federal assistance to the housing
  or its tenants.
  `(viii) The provisions of this subparagraph expire effective October 1,
  1995. Not later than January 31 of each year, the Secretary shall transmit
  to this Congress a report that includes: the number of mortgages auctioned
  and sold and their value, the amount of subsidies committed to this program,
  the number of mortgages transferred to preferred mortgagees, the ability of
  the Secretary to coordinate this program with the incentives provided under
  the Emergency Low Income Housing Preservation Act of 1987 or subsequent
  Act, and the costs and benefits derived from this program for the Federal
  Government.'.
Subtitle D--Crime and Flood Insurance Programs
SEC. 2301. CRIME INSURANCE PROGRAM.
  (a) EXTENSION OF GENERAL AUTHORITY- Section 1201(b) of the National Housing
  Act (12 U.S.C. 1749bbb(b)) is amended by striking `September 30, 1991'
  in the matter preceding paragraph (1) and inserting `September 30, 1995'.
  (b) CONTINUATION OF EXISTING CONTRACTS- Section 1201(b)(1) of the National
  Housing Act (12 U.S.C. 1749bbb(b)(1)) is amended by striking `September 30,
  1992' and inserting `September 30, 1996'.
  (c) EXTENSION OF LIMITATION ON PREMIUMS- Section 542(c) of the Housing and
  Community Development Act of 1987 (12 U.S.C. 1749bbb-10c note) is amended
  by striking `September 30, 1991' and inserting `September 30, 1995'.
SEC. 2302. FLOOD INSURANCE PROGRAM.
  (a) EXTENSION OF GENERAL AUTHORITY- Section 1319 of the National Flood
  Insurance Act of 1968 (42 U.S.C. 4026) is amended by striking `September
  30, 1991' and inserting `September 30, 1995'.
  (b) EXTENSION OF EMERGENCY PROGRAM- Section 1336(a) of the National Flood
  Insurance Act of 1968 (42 U.S.C. 4056(a)) is amended by striking `September
  30, 1991' and inserting `September 30, 1995'.
  (c) EXTENSION OF LIMITATION ON PREMIUMS- Section 541(d) of the Housing
  and Community Development Act of 1987 (42 U.S.C. 4015 note) is amended by
  striking `September 30, 1991' and inserting `September 30, 1995'.
  (d) EXTENSION OF EROSION PROVISIONS- Section 1306(c)(7) of the National
  Flood Insurance Act of 1968 (42 U.S.C. 4013(c)(7)) is amended by striking
  `September 30, 1991' and inserting `September 30, 1995'.
  (e) INCLUSION OF COSTS IN PREMIUMS-
  (1) ESTIMATES OF PREMIUM RATES- Section 1307(a) of the National Flood
  Insurance Act of 1968 (42 U.S.C. 4014(a)) is amended--
  (A) in paragraph (1)(B)(i), by striking `and' at the end;
  (B) in paragraph (1)(B)(ii), by inserting `and' after the comma at the end;
  (C) in paragraph (1)(B), by inserting at the end the following new clause:
  `(iii) any remaining administrative expenses incurred in carrying out the
  flood insurance and floodplain management programs (including the costs
  of mapping activities under section 1360) not included under clause (ii),
  which shall be recovered by a fee charged to policyholders and such fee
  shall not be subject to any agents' commission, company's expense allowances,
  or State or local premium taxes,'; and
  (D) in paragraph (2), by inserting after `title' the following: `, and
  which, together with a fee charged to policyholders that shall not be not
  subject to any agents' commission, company expenses allowances, or State
  or local premium taxes, shall include any administrative expenses incurred
  in carrying out the flood insurance and floodplain management programs
  (including the costs of mapping activities under section 1360)'.
  (2) ESTABLISHMENT OF CHARGEABLE PREMIUM RATES- Section 1308 of the National
  Flood Insurance Act of 1968 (42 U.S.C. 4015) is amended--
  (A) in subsection (b)--
  (i) by striking `and' at the end of paragraph (2);
  (ii) by redesignating paragraph (3) as paragraph (4); and
  (iii) by inserting after paragraph (2), the following new paragraph:
  `(3) adequate, together with the fee under paragraph (1)(B)(iii) or (2)
  of section 1307(a), to provide for any administrative expenses of the
  flood insurance and floodplain management programs (including the costs
  of mapping activities under section 1360), and'; and
  (B) by striking subsection (d) and inserting the following new subsection:
  `(d) With respect to any chargeable premium rate prescribed under
  this section, a sum equal to the portion of the rate that covers any
  administrative expenses of carrying out the flood insurance and floodplain
  management programs which have been estimated under paragraphs (1)(B)(ii) and
  (1)(B)(iii) of section 1307(a) or paragraph (2) of such section (including
  the fees under such paragraphs), shall be paid to the Director. The Director
  shall deposit the sum in the National Flood Insurance Fund established
  under section 1310.'.
  (3) NATIONAL FLOOD INSURANCE FUND- Section 1310(a)(4) of the National Flood
  Insurance Act of 1968 (42 U.S.C. 4017(a)(4)) is amended to read as follows:
  `(4) to the extent approved in appropriations Acts, to pay any administrative
  expenses of the flood insurance and floodplain management programs
  (including the costs of mapping activities under section 1360); and'.
  (4) ADMINISTRATIVE EXPENSES- Section 1375 of the National Flood Insurance
  Act of 1968 (42 U.S.C. 4126) is amended by striking `program' and all that
  follows and inserting the following: `and floodplain management programs
  authorized under this title may be paid with amounts from the National
  Flood Insurance Fund (as provided under section 1310(a)(4)), subject to
  approval in appropriations Acts.'.
  (5) EXCEPTION TO LIMITATION ON PREMIUM INCREASES- Notwithstanding section
  541(d) of the Housing and Community Development Act of 1987 (42 U.S.C. 4015
  note) (as amended by this section), the premium rates charged for flood
  insurance under any program established pursuant to the National Flood
  Insurance Act of 1968 may be increased by more than 10 percent during
  fiscal year 1991, except that any increase in such rates not resulting
  from the inclusion in chargeable premium rates of administrative expenses
  of the flood insurance and floodplain management programs (pursuant to
  the amendments made by this subsection) may not exceed 10 percent.
TITLE III--COMMERCE, SCIENCE, AND TRANSPORTATION
Subtitle A--User Fees
SEC. 3001. COAST GUARD USER FEES.
  (a) IN GENERAL- Notwithstanding the provisions of section 2110 of title
  46, United States Code, the Secretary of the department in which the
  Coast Guard is operating (hereinafter in this section referred to as the
  `Secretary') shall establish and implement a system for the collection,
  commencing October 1, 1990, of $200,000,000 for each of the fiscal years
  1991 through 1995, plus an amount sufficient to compensate for inflation
  for that period, in receipts from payments by users of direct or indirect
  services provided by the Coast Guard. Amounts received by the United States
  Government under this section shall be deposited into the general fund of
  the Treasury as offsetting receipts of the department in which the Coast
  Guard is operating and ascribed to Coast Guard activities.
  (b) APPLICATION- Any fees for indirect services established under this
  section shall apply only to vessels operating in navigable waters where
  the Coast Guard has an established presence.
SEC. 3002. RAILROAD SAFETY USER FEES.
  The Federal Railroad Safety Act of 1970 is amended by inserting immediately
  after section 215 (45 U.S.C. 445) the following new section:
`USER FEES
  `SEC. 216. (a)(1) The Secretary shall establish a schedule of fees to
  be assessed to railroads, in reasonable relationship to criteria such as
  revenue ton-miles, track miles, passenger miles, revenues, other relevant
  factors, or an appropriate combination thereof.
  `(2) The Secretary shall establish procedures for the collection of such
  fees. The Secretary may use the services of any Federal, State, or local
  agency or instrumentality to collect such fees, and may reimburse such
  agency or instrumentality a reasonable amount for such services.
  `(3) Fees established under his section shall be assessed to railroads
  subject to this title and shall approximate, as provided in subsection
  (d) of this section, the costs of administering this title and all other
  Federal laws relating to railroad safety and railroad noise control.
  `(b) The Secretary shall assess and collect fees described in subsection
  (a) of this section with respect to each fiscal year before the end of
  such fiscal year.
  `(c) All fees collected under this section shall be deposited in the
  general fund of the Treasury as offsetting receipts and ascribed to the
  railroad safety activities of the Secretary.
  `(d) Fees established by the Secretary under subsection (a) of this section
  shall be assessed after September 30, 1990. Fees assessed in the fiscal
  year beginning on October 1, 1990, shall total no more than $20,000,000;
  fees assessed in the fiscal year beginning on October 1, 1991, shall total
  no more than $37,000,000; fees assessed in the fiscal year beginning on
  October 1, 1992, shall total no more than $37,000,000; fees assessed in
  the fiscal year beginning on October 1, 1993, shall total no more than
  $38,000,000; and fees assessed in the fiscal year beginning on October 1,
  1994, shall total no more than $38,000,000. Beginning on October 1, 1992,
  the fees assessed shall at least equal the appropriations made for the
  activities described in subsection (a)(3) of this section, but at no time
  shall the aggregate of fees assessed for any fiscal year under this section
  exceed 105 percent of the aggregate of appropriations made for such fiscal
  year for activities to be funded by such fees.'.
SEC. 3003. UNITED STATES TRAVEL AND TOURISM FACILITATION FEE.
  The International Travel Act of 1961 (22 U.S.C. 2121 et seq.) is amended
  by adding at the end the following new section:
  `SEC. 306. (a) In addition to any other fees authorized by law, the
  Secretary, on a calendar quarterly basis beginning January 1, 1991, shall
  charge and collect from each commercial airline and passenger ship line
  transporting passengers to the United States, a United States Travel and
  Tourism Administration Faciliation Fee. The Secretary shall charge each
  commercial airline and passenger ship line an amount equal to one dollar
  multipled by the number of nonexcluded passenger arriving at ports of entry
  in the customs territory of the United States from foreign countries,
  possessions, or territories aboard commerical aircraft or commercial
  passenger ships of that airline or passenger ship line during that calendar
  quarter. For purposes of determining the fee amount, the Secretary shall
  exclude passengers--
  `(1) who are arriving only for immediate and continuous transit through
  the United States to a destination outside the customs territory of the
  United States;
  `(2) whose journey originated in Canada, Mexico, a territory or possession
  of the United States, Saint Pierre, Miquelon, Cuba, the Dominican Republic,
  Haiti, Bermuda, the Bahamas, Barbados, Jamaica, the Windward and Leeward
  Islands, Trinidad, Martinique, and other British, French, and Netherlands
  territories or possessions in or bordering on the Caribbean Sea; or
  `(3) whose journey originated in the United States and is limited to Canada,
  Mexico, a territory or possession of the United States, Saint Pierre,
  Miquelon, Cuba, the Dominican Republic, Haiti, Bermuda, the Bahamas,
  Barbados, Jamaica, the Windward and Leeward Islands, Trinidad, Martinique,
  and other British, French, and Netherlands territories or possessions in
  or bordering on the Caribbean Sea.
  `(b) Each commercial airline and passenger ship line shall remit the fee
  charged by the Secretary under subsection (a) of this section, in United
  States dollars, no later than 31 days after the close of the calendar
  quarter of the arrival of the passengers on which the fee is based.
  `(c) The Secretary shall deposit the fees received pursuant to subsection
  (b) of this section in the general fund of the Treasury as offsetting
  receipts and ascribed to the travel and tourism activities of the Secretary.
  `(d) Beginning on October 1, 1992, the aggregate amounts collected for the
  fee charged under this section shall at least equal the appropriations
  made for the travel and tourism activities of the Secretary under this
  Act, but at no time shall the aggregate of amounts collected for any
  fiscal year under this section exceed 105 percent of the aggregate of
  appropriations made for such fiscal year for activities to be funded by
  such fees. The formula for determining the fee amount under subsection (a)
  of this section may be modified by the Secretary as necessary to comply
  with the requirements of this section.
  `(e) Subsections (a) through (d) of this section shall become effective
  thirty days after the date of enactment of this section: Provided, That no
  fee shall be charged for any passenger transported pursuant to a document
  or ticket purchased prior to that date. Subsection (f) of this section
  shall be effective upon enactment.
  `(f) The Secretary may prescribe such rules and regulations as may be
  necessary to carry out the provisions of this section.'.
SEC. 3004. NOAA USER FEES.
  Section 409 of the Act of November 17, 1988 (15 U.S.C. 1534), is amended--
  (1) in subsection (a) by striking `archived' and all that follows and
  inserting in lieu thereof `and information and products derived therefrom
  collected and/or archieved by the National Oceanic and Atmospheric
  Administration.';
  (2) in subsection (b)(1)--
  (A) by inserting ', information, and products' immediately after `data'
  the first place it appears;
  (B) by striking `data is' and inserting in lieu thereof `data, information,
  and products are';
  (3) in subsection (b)(2)--
  (A) by inserting ', information, or products' immediately after `data'
  the first place it appears;
  (B) by striking `data exchange basis' and inserting in lieu thereof `basis
  of exchanging such data, information, and products';
  (4) by adding at the end of subsection (b) the following new paragraph:
  `(3) The Secretary shall waive the assessment of the fees authorized
  by subsection (a) as necessary to continue to provide weather warnings,
  watches, forecasts, and similar products and services essential to the
  mission of the National Oceanic and Atmospheric Administration.';
  (5) by amending paragraph (1) of subsection (d) to read as follows:
  `(1) The initial schedule of fees established by the National Environmental
  Satellite, Data, and Information Service shall remain in effect for the
  three-year period beginning on the date that the fees under that schedule
  take effect.';
  (6) in subsections (e) and (f)(1), by inserting `by the National
  Environmental Satellite, Data, and Information Service' immediately after
  `under this section' each place it appears; and
  (7) in subsection (g), by inserting immediately before the period at the
  end the following: '; including the authority of the Secretary pursuant
  to section 1307 of title 44, United States Code.'.
Subtitle B--Airport Capacity
PART 1--SHORT TITLE; FINDINGS
SEC. 3101. SHORT TITLE.
  This subtitle may be cited as the `Airport Capacity Act of 1990'.
SEC. 3102. FINDINGS.
  The Congress finds that--
  (1) aviation noise management is crucial to the continued increase in
  airport capacity;
  (2) community noise concerns have led to uncoordinated and inconsistent
  restrictions on aviation which have impeded its ability to meet
  transportation needs, and are imposing undue burdens on interstate and
  foreign commerce;
  (3) a noise policy must be implemented at the national level;
  (4) local interest in aviation noise management shall be considered in
  determining the national interest;
  (5) community concerns can be alleviated through the technology aircraft,
  combined with the use of revenues, including those available from passenger
  facility charges, for noise management;
  (6) federally controlled revenues can help resolve noise problems and
  carry with them a responsibility to the national airport system;
  (7) a precondition to the establishment or collection of a passenger facility
  charge shall be the establishment by the Secretary of Transportation of
  a national noise policy;
  (8) revenues derived from a passenger facility charge may be applied to
  noise management and increased airport capacity;
  (9) provisions of subpart S of part 93 of title 14, Code of Federal
  Regulations (known as the `buy-sell rule'), which allow a public right to be
  used as a private asset, not only restrict competition at the four airports
  whose use is controlled through slots but also can impede competition in
  air transportation throughout the northeastern and midwestern United States;
  (10) passengers pay higher fares at slot controlled airports than at
  other airports;
  (11) increasing the number of slots at high density traffic airports will
  make it easier for carriers not already engaged in regular operations at
  those airports to achieve regular operations; and
  (12) improvements in the air traffic control system since the initiation
  of slot controls, including new technology and new methods of regulating
  air traffic, necessitate a complete review of the practice of using slots
  to control access to high density traffic airports.
PART 2--AUTHORIZATION OF APPROPRIATIONS
SEC. 3103. FAA FACILITIES AND EQUIPMENT.
  That (a) section 506(a)(1) of the Airport and Airway Improvement Act of 1982
  (49 App. U.S.C. 2205(a)(1) is amended--
  (A) by  striking  `and'  immediately  after `October 1, 1989,'; and
  (B) by  inserting  immediately  before  the  period at the end of the
  first sentence the following: `$14,625,200,000 for fiscal years ending
  before October 1, 1991, and $17,625,200,000 for fiscal years ending before
  October 1, 1992'.
SEC. 3104. FAA RESEARCH, ENGINEERING AND DEVELOPMENT.
  (a) Section 506(b)(2) of the Airport and Airway Improvement Act of 1982
  (49 App. U.S.C. 2205(b)(2)) is amended--
  (1) in subparagraph (B)(vii), by striking `and';
  (2) in subparagraph (C), by striking the period at the end and inserting
  in lieu thereof `; and'; and
  (3) by adding at the end of the following new subparagraph:
  `(4) for fiscal year 1991, $260,000,000, and for fiscal year 1992,
  $260,000,000.'.
  (b) Section 506(b)(4) of the  Airport and Airway Improvement Act of 1982
  (49 App. U.S.C. 2205(b)(4)) is amended--
  (1) in subparagraph (A), by striking `and 1990' and inserting in lieu
  thereof `1990, 1991, and 1992'; and
  (2) in subparagraph (B), by striking `and 1990' and inserting in lieu
  thereof `1990, 1991, and 1992'.
  (c) Section 506(d) of the  Airport and Airway Improvement Act of 1982
  (49 App. U.S.C. 2205(d)) is amended by striking `and 1990' and inserting
  in lieu thereof `1990, 1991, and 1992'.
SEC. 3105. FAA OPERATIONS.
  For necessary expenses of the Administration for which there is no other
  specific authorization of appropriations, there is authorized to be
  appropriated $4,088,000,000 for fiscal year 1991 and $4,412,600,000 for
  fiscal year 1992.
PART 3--NATIONAL AVIATION NOISE POLICY
SEC. 3201. NATIONAL AVIATION NOISE POLICY DEVELOPMENT.
  (a) The Secretary of Transportation shall, by regulation, not later than
  January 1, 1992, develop and articulate a National Aviation Noise Policy
  which takes into account the findings and determinations and provisions
  of this section.
  (b) The National Aviation Noise Policy shall include the establishment of a
  date or dates for the phasing out of stage 2 technology aircraft as part of
  a comprehensive national noise management scheme. Such consideration must
  include a detailed economic analysis of the impact of any phaseout date
  on competition in the airline industry, including the carriers' ability
  to achieve capacity growth consistent with the projected rate of growth
  for the industry; the impact of constrained capacity and aircraft prices
  on airfares and competition within the airline and air cargo industries;
  the impact on non-hub and smaller community air service and the impact of
  such a phaseout on new entry into the airline industry. No phaseout date
  shall be approved if it would result in an unreasonably adverse impact on
  any of these considerations.
SEC. 3202. NOISE AND ACCESS RESTRICTION REVIEWS.
  (a) The National Aviation Noise Policy shall require the establishment
  of a program for the mandatory review and approval of all existing or
  proposed local airport noise or access restrictions by the Federal Aviation
  Administration, except for restrictions which have been approved by the
  Federal Aviation Administration by regulation prior to enactment of this Act.
  (b) No airport noise or access restriction could be submitted for approval
  or approved in accordance with the program if it contains any restriction
  on the operation of a stage 3, quiet technology aircraft, including but
  not limited to--
  (1) any restriction as to noise levels generated on either a single event
  or cumulative basis;
  (2) any limit, direct or indirect, on the total number of stage 3 aircraft
  operations;
  (3) any noise budget or noise allocation program which would include stage
  3 aircraft;
  (4) any restriction imposing limits on hours of operations;
  (5) any other limit on stage 3 aircraft.
  (c) No airport noise or access restriction could include a restriction on
  other than stage 3 aircraft, unless the airport operator submitting the
  existing or proposed noise or access regulation to the Administrator for
  review and approval in accordance with this Act has submitted concurrently--
  (1) a complete analysis of the anticipated or actual costs and benefits
  of the existing or proposed noise regulation;
  (2) a detailed description of alternative regulations;
  (3) a detailed description of the alternative measures considered not
  involving aircraft restrictions, and a comparison of the costs and benefits
  of such alternative measures to the costs and benefits of the proposed
  noise or access regulation. The analysis of anticipated costs and benefits
  shall include an estimate of the potential economic and operational impact
  of the noise or access regulation on the national air transportation system.
  (d) After review of the information described in subparagraph (c) and any
  other information the Administrator deems necessary, the Administrator
  shall approve or disapprove such proposed noise regulation subject to the
  provision of subsection (e).
  (e) The Administrator shall not approve a noise or access regulation
  unless the Administrator finds the following conditions to be supported
  by substantial evidence--
  (1) the regulation is reasonable, nonarbitrary and nondiscriminatory;
  (2) the regulation does not create an undue burden on interstate or
  foreign commerce;
  (3) the regulation is not inconsistent with maintaining the safe and
  efficient utilization of the navigable airspace;
  (4) the regulation does not conflict with any existing Federal statute
  or regulation;
  (5) the airport operator provided an adequate opportunity for public
  comment with respect to the regulation;
  (6) the airport operator's rejection of alternative means of minimizing
  or otherwise managing noise was reasonable; and
  (7) the benefits accruing from the regulation outweigh the associated costs,
  including all costs attributable to the impact or potential impact of the
  regulation on the national air transportation system.
  (f) Sponsors of facilities operating under noise or access restrictions
  at the time of passage of this Act, except as specified in subsection (a),
  shall not be eligible to impose a Passenger Facility Charge, and shall not
  be eligible for grants authorized by section 505 of the Airport and Airway
  Improvement Act of 1982 (49 U.S.C. App. 2204) 90 days after the date on
  which the Secretary promulgates the final rule called for under section
  3201 of this Act, unless the Administrator has approved the restriction
  under section (e),  or the restriction has been rescinded.
  (g) The Administrator shall reevaluate any previously approved noise
  regulation upon the request of any aircraft or airport operator able to
  demonstrate to the satisfaction of the Administrator that there has been a
  change in the noise environment of the affected airport and that a review
  and reevaluation of the benefits and costs of the previously approved
  noise regulation is therefore justified.
  (h) The Administrator shall establish by regulation procedures under
  which the evaluation provided in subsection (g) of this section shall be
  accomplished. Such evaluation shall not occur less than 2 years after a
  determination under subsection (g) of this section has been made.
SEC. 3203. FEDERAL LIABILITY FOR NOISE DAMAGES.
  In the event of a disapproval of a proposed noise or access restriction,
  the Federal Government shall assume liability for noise damages only
  to the extent that a taking has occurred as a direct result of such
  disapproval. Action for the resolution of such a case shall be brought
  solely in the United States Claims Court.
SEC. 3204. PRIVATE RIGHT OF ACTION.
  An aircraft operator may commence a civil action against an airport
  proprietor for the purpose of protecting its rights under this part, in
  any United States District Court without regard to citizenship or amount
  in controversy.
SEC. 3205. LIMITATION ON AIRPORT IMPROVEMENT PROGRAM REVENUE.
  Under no conditions shall any airport receive revenues under the provisions
  of the Airport and Airway Improvement Act of 1982, as amended, or impose
  or collect a passenger facility charge, unless the Administrator--
  (1) has approved any noise or access restriction in place at that airport;
  and
  (2) assures that the airport is not imposing any noise or access restriction
  not submitted and approved in compliance with this part.
SEC. 3206. NOISE COMPATIBILITY PROGRAM.
  No proposal for the imposition of a passenger facility charge shall be
  approved by the Secretary if the airport has not conducted an airport
  noise compatibility program pursuant to section 104(b) of the Aviation
  Safety and Noise Abatement Act of 1979.
PART 4--PASSENGER FACILITY CHARGES
SEC. 3301. DEFINITIONS.
  For purposes of this part the following definition applies: The term
  `eligible airport-related project' means--
  (1) a project for airport development under the Airport and Airway
  Improvement Act of 1982;
  (2) a project for airport planning under such Act;
  (3) a project for terminal development described in section 513(b) of
  such Act;
  (4) a project for airport noise capability planning under section 103(b)
  of the Aviation Safety and Noise Abatement Act of 1979;
  (5) a project to carry out noise compatibility measures which are eligible
  for assistance under section 104 of the Aviation Safety and Noise Abatement
  Act of 1979 without regard to whether or not a program has been approved
  for such measures under such section; and
  (6) a project for construction of gates and related areas at which passengers
  are enplaned or deplaned.
SEC. 3302. AUTHORIZATION FOR IMPOSITION.
  Section 1113 of the Federal Aviation Act of 1958 (49 U.S.C. App. 1513)
  is amended by the addition of a new subsection:
  `(e) EXCEPTION FOR IMPOSITION OF PASSENGER FACILITY CHARGES- (1)
  Notwithstanding the above limitations the Secretary of Transportation is
  hereby authorized to establish by regulation a program for the imposition
  of approved passenger facility charges by any airport proprietor to finance
  eligible projects.
  `(2) Passenger facility charges shall be imposed only as approved by the
  Secretary of Transportation and shall be approved only in full dollar
  amounts not to exceed three dollars per passenger. They shall remain in
  effect only during such periods as are necessary to pay for such specific
  projects as are identified to support their imposition.
  `(3) Passenger facility charges shall be collected only from revenue
  passengers originating or terminating their travel at the airport imposing
  such a charge.
  `(4) No proposal for the imposition of a passenger facility charge shall
  be approved by the Secretary of Transportation unless:
  `(A) The airport proprietor seeking to impose the passenger facility
  charge certifies, in writing, that airport users and the general public
  have been provided with: a minimum of seventy-five days advance notice of
  the proposal; a full and detailed description of the project intended to
  be financed; a detailed financial plan for full funding of the specific
  project; and an opportunity to meet with the airport proprietor to present
  their views. On the basis of such advance notification and information
  the airport proprietor shall solicit the approval or disapproval of the
  airport users and the general public and shall advise the Secretary of
  Transportation of any disagreements with the proposed imposition of a
  passenger facility charge and the reasons supporting such disagreement.
  `(B) In the event that no disagreement is registered, the Secretary shall
  approve the passenger facility charge.
  `(C) In the event that disagreement is registered with reference to
  a project otherwise eligible for funding under the provisions of the
  Airport and Airway Improvement Act of 1982, the Secretary shall approve
  such passenger facility charge unless the Secretary finds by substantial
  evidence that it would not significantly benefit airport security, safety,
  noise mitigation, or capacity.
  `(D) The Secretary shall establish, by appropriate rule, the procedures under
  which a disagreement is registered and an appeal heard under subsection (c).
  `(E) In the event that disagreement is registered with reference to
  a project to build airport gates, the Secretary shall not approve such
  passenger facility charge unless he finds by substantial evidence that the
  project is justified by the need to increase capacity at the facility or
  facilities affected. Under no circumstances shall any gates constructed,
  improved, or repaired with passenger facility charges under this paragraph be
  subject to long-term leases for periods exceeding 10 years, or to majority
  in interest clauses.
  `(F) No other projects other than those defined in this title may be
  financed by a passenger facility charge.
  `(5) Any proposal to amend a project supported by an approved passenger
  facility charge necessitating an upward adjustment of project financing
  costs shall be treated as a new proposal for the imposition of a passenger
  facility charge and submitted for approval.
  `(6) No passenger facility charge shall be approved for imposition prior to
  the adoption by regulation of a national aviation noise policy in accordance
  with the provisions of title III of this Act and, in no event, prior to
  such date at which the unobligated balance contained in the Airport and
  Airway Trust Fund is less than $4,000,000,000.
  `(7) Authority for the approval of any new passenger facility charge,
  or the modification of any existing charge, shall terminate in the event
  that appropriations fail to be made to fund at least ninety-five percent
  of each amount authorized for facilities and equipment, essential air
  service, the airport improvement program and the research engineering
  and development programs of the Federal Aviation Administration during
  any fiscal year. Further, all authority to approve any passenger facility
  charge shall terminate at any time funds are spent from this Act except
  as authorized by this Act.
  `(8)(A) Revenues derived from collection of a fee by an airport proprietor
  pursuant to this subsection shall not be treated as airport revenues
  for the purpose of establishing rates, fees and charges pursuant to any
  contract between such airport and an air carrier.
  `(B) Except as otherwise provided in subparagraph (C) hereof, such airport
  shall not include the portion of the capital costs of any project paid
  for from such passenger facility charge revenues in the rate base, by
  means of depreciation, amortization or otherwise, in establishing fees,
  rates and charges for air carriers.
  `(C) With respect to any project for terminal development, for gates and
  related areas, or for any facility which is occupied or utilized by one
  or more air carriers on an exclusive or preferential basis, the rates,
  fees and charges payable by air carriers which use such facilities shall
  be no less than the rates, fees and charges paid by carriers using similar
  facilities  at  the  airport  which  were  not  financed  with revenues
  derived from collection of a fee pursuant to this subsection.
  `(D) Except as provided in this subsection, nothing contained in this Act
  shall be construed as endorsing or authorizing the unilateral abrogation,
  abridgement or alteration of any existing contract or lease provision in
  place at any airport.
  `(9) Any passenger facility charge approved for imposition under
  this Act shall be collected by the air carrier or its agent selling
  such transportation and shall be paid to the airport imposing such a
  charge in accordance with regulations to be issued by the Secretary of
  Transportation. Such charge shall be separately identified on any ticket
  sold for such transportation as a local passenger facility charge. The
  Secretary of Transportation shall provide by regulation for the full
  and complete compensation of air carriers based upon a uniform fee which
  reflects their average cost for their collection and handling costs.
  `(10) The Secretary of Transportation shall require that any airport
  imposing a passenger facility charge maintain the funds derived as a result
  in a separate and identifiable account which, for the purpose of this Act,
  shall be subject to the same record, audit and examination requirements
  imposed upon airport improvement program revenues by section 518 of the
  Airport and Airway Improvement Act of 1982.
  `(11) No State (or political subdivision thereof, including the Commonwealth
  of Puerto Rico, the Virgin Islands, Guam, the District of Columbia, the
  territories or possessions of the United States or political agencies of
  two or more States) shall levy or collect any tax on or with respect to any
  commercial aircraft flight, or any activity or service on board such flight,
  if such flight neither takes off nor lands in such state or jurisdiction.'
SEC. 3303. SPONSOR ASSURANCES INCLUDING MINORITY AND SMALL BUSINESS
PARTICIPATION.
  Section 511(a) of the Airport and Airway Improvement Act of 1982 (49
  U.S.C. App. 2210) is amended by after the word title striking `, ' and
  inserting `or passenger facility charge project,'.
SEC. 3304. PREFORMANCE OF CONSTRUCTION WORK INCLUDING MINIMIUM RATES OF
WAGES AND VETERANS PREFERENCE.
  Section 515 of the Airport and Airway Improvement Act of 1982, (49
  U.S.C. App. 2214) is amended--
  (1) in subsection (a) by inserting `or passenger facility charge project'
  after `title';
  (2) in subsection (b) by inserting `or passenger facility charge project'
  after `title';
  (3) in subsection (c) by inserting `or passenger facility charge project'
  after `title';
PART 5--PURCHASE, SALE, LEASE, AND OTHER TRANSFER OF SLOTS DEFINITIONS
  SEC. 3351. As used in this part, the term--
  (1) `Administrator' means the Administrator of the Federal Aviation
  Administration.
  (2) `Air carrier' has the meaning given that term in section 101(3) of
  the Federal Aviation Act of 1958 (49 App. U.S.C. 1301(3)).
  (3) `High density traffic airport' means the Kennedy International Airport,
  New York, New York; LaGuardia National Airport, New York, New York; O'Hare
  International Airport, Chicago, Illinois; or Washington National Airport,
  Washington, District of Columbia.
  (4) `New entrant carrier' means an air carrier, including a commuter
  operator, that holds fewer than 12 slots at the relevant airport.
  (5) `Secretary' means the Secretary of Transportation.
  (6) `Slot' means the operational authority to conduct one landing or takeoff
  operation, under instrument flight rules, each day during a specific period
  at an airport.
  SEC. 3352. (a) Notwithstanding the provisions of subpart S of part 93
  of title 14, Code of Federal Regulations, no slot at any airport may be
  purchased, sold, leased, or otherwise transferred on or after July 12,
  1990, except that--
  (1) one slot may be exchanged for another slot if there is no other
  consideration associated with the exchange;
  (2) slots may be transferred on or after July 12, 1990, as a part of an
  overall transfer of ownership of an air carrier or substantially all of
  its assets, or of substantially all assets related to a discrete operation
  of an air carrier;
  (3) slots at a high density traffic airport may be transferred by an air
  carrier that prior to July 12, 1990, filed for, and as of the date of
  enactment of this Act is receiving, bankruptcy protection under title II
  of the United States Code, if such transfer is needed to effectuate the
  sale of assets of that air carrier;
  (4) slot leases entered into and approved by the Administrator prior to
  July 12, 1990, may continue or be extended until 18 months after the date
  of enactment of this Act; and
  (5) commuter slots purchased, sold, leased or otherwise transferred
  after July 12 but before date of enactment of this Act may continue or
  be extended until 18 months after the date of enactment of this Act if
  the Secretary of Transportation finds an undue financial hardship would
  result from their reversal or termination.
  (b) No rule, regulation, or order (other than an emergency order) may be
  issued by the Secretary or the Administrator relating to restrictions on
  aircraft operations at any high density traffic airport unless such rule,
  regulation, or order is consistent with the provisions of this part.
SLOT ALLOCATIONS FOR NEW ENTRANT CARRIERS
  SEC. 3353. (a)(1) Not later than 60 days after the date of enactment of
  this Act, the Administrator shall by rule establish a pool of air carrier
  slots for new entrant carriers at each high density traffic airport other
  than Washington National Airport.
  (2) The rule referred to in subsection (a) shall include, but not be
  limited to, provisions to accomplish the following:
  (A) The new entrant slots in the pool shall be in addition to slots at
  each applicable airport which are in existence on the date of enactment
  of this Act, and the number of such new entrant slots shall not increase
  the overall number of air carrier slots at such airport by more than 5
  percent in excess of the number of such existing slots.
  (B) New entrant slots shall be allocated in such a way that, to the maximum
  extent practicable, all new entrant carriers have an equal number of slots
  overall at such airport, including both new entrant slots and existing
  air carrier slots. No new entrant carrier shall receive a new entrant slot
  under this subsection which gives that carrier more than 12 slots overall
  at such airport.
  (C) If new entrant slots remain unused after new entrant carriers have
  had an opportunity to obtain such slots, the remaining new entrant slots
  may be made available for use by air carriers only for the purpose of
  providing air service to communities that lost access to a high density
  traffic airport as a result of changes to the essential air service program
  under the Act entitled `An Act making appropriations for the Department of
  Transportation and related agencies for the fiscal year ending September
  30, 1990, and for other purposes', approved November 21, 1989 (Public Law
  101-164; 103 Stat. 1069).
  (D) If new entrant slots remain unused after new entrant carriers have had
  an opportunity to obtain slots and air carriers have had an opportunity to
  obtain slots under subparagraph (C), the remaining new entrant slots shall be
  allocated as needed for international operations authorized after the date
  of enactment of this Act, except for any such operation authorized under
  section 401(h) of the Federal Aviation Act of 1958 (49 App. U.S.C. 1371(h)).
  (E) Each new entrant slot shall be public property and its use shall
  represent a nonpermanent operating privilege within the exclusive control
  and jurisdiction of the Secretary and the Administrator. Any such privilege
  may be withdrawn, recalled, or reallocated by the Secretary for reasons
  of aviation safety, airspace efficiency, the enhancement of competition
  in air transportation, or any other matter in the public interest and in
  accordance with the public convenience and necessity.
  (F) If the holder of a new entrant slot, including a slot made available
  under subparagraph (C), fails to initiate use of the slot within 60 days
  after receiving the slot or thereafter fails to use the slot in accordance
  with rules for use of existing air carrier slots, the new entrant slot shall
  be withdrawn and, if appropriate, be reallocated to another new entrant
  carrier. In addition to such grounds for withdrawal, a new entrant slot made
  available under subparagraph (C) shall also be withdrawn and reallocated,
  in accordance with this paragraph, if the holder fails to use the slot in
  providing air service as described in subparagraph (C).
  (b)(1) Not later than 60 days after the date of enactment of this Act,
  the Administrator shall by rule create, at Washington National Airport, a
  pool of 30 daily air carrier special authorizations which shall be spread
  evenly throughout the day from the hour 0700 to the hour 2200 and shall
  be available only to air carriers that--
  (A) will utilize such special authorizations to conduct operations with
  turbojet aircraft or any aircraft having a certificate maximum seating
  capacity of 75 or more; and
  (B) hold fewer than 12 existing slots at Washington National Airport.
  (2) Such special authorizations shall be created and allocated in such
  a manner that the actual number of daily operations does not exceed the
  total number of authorized daily operations at Washington National Airport
  as provided in subpart K of part 93 of title 14, Code of Federal Regulations.
  (3) Such special authorizations shall be allocated by lottery and in such
  a manner that, to the maximum extent practicable, all such air carriers
  have an equal number of slots and special authorizations overall at
  Washington National Airport. No such air carrier shall receive a special
  authorization under this subsection which gives that carrier more than 12
  slots and special authorizations overall at Washington National Airport.
  (4) If such special authorizations remain unused after such air carriers
  have had an opportunity to obtain them, the remaining authorizations may
  only be made available to air carriers that have fewer than 12 slots at
  Washington National Airport.
  (5) Each such special authorization shall be public property and its use
  shall represent a nonpermanent operating privilege within the exclusive
  control and jurisdiction of the Secretary and the Administrator. Any such
  privilege may be withdrawn, recalled, or reallocated by the Secretary
  for reasons of aviation safety, airspace efficiency, the enhancement
  of competition in air transportation, or any other matter in the public
  interest and in accordance with the public convenience and necessity.
  (5) If the holder of an air carrier special authorization fails to initiate
  use of the authorization within 60 days after receiving the authorization
  or thereafter fails to use the authorization in accordance with rules for
  use of existing air carrier slots, the authorization shall be withdrawn
  and, if appropriate, be reallocated to another air carrier as provided in
  this subsection.
HIGH DENSITY TRAFFIC AIRPORT RULES
  SEC. 3354. (a) Except as applicable to Washington National Airport, the
  provisions of subpart K of part 93 of title 14, Code of Federal Regulations,
  and of the rule referred to in section 3353(a) of this Act shall cease to
  have force and effect on and after the date that is 18 months following
  the date of enactment of this Act.
  (b) If after such provisions cease to be effective the Secretary or the
  Administrator decides to issue a new rule, regulation, or order providing
  for the allocation of slots at any airport, such rule, regulation, order, or
  other procedure shall not be issued until the Administrator certifies, after
  notice and opportunity for public comment, in a report to Congress that--
  (1) such a rule, regulation, order, or other procedure is required in the
  interest of aviation safety; and
  (2) there is no alternative means for achieving comparable safety which has
  a less adverse effect upon competition in air transportation at such airport.
  (c) Any such rule, regulation, order, or other procedure issued in accordance
  with subsection (b) shall be airport-specific unless the Administrator
  certifies that the aviation safety sought cannot be achieved without making
  the rule, regulation, order, or other procedure applicable to more than
  one airport.
  (d)(1) On January 1, 1994, the Administrator shall initiate a review of the
  existing method by which flight operations are controlled at Washington
  National Airport and its impact on aviation safety, airline competition,
  ground congestion, airport services capacity, and any other factor the
  Administrator determines appropriate.
  (2) Not later than January 1, 1995, the Administrator shall submit a
  report to the Committee on Commerce, Science, and Transportation of
  the Senate and the Committee on Public Works and Transportation of the
  House of Representatives regarding the findings of that review and any
  recommendations to be taken in light of those findings.
  (e) The Secretary is directed--
  (1) to study and determine the extent to which shuttle service presently
  provided by air carriers operating between LaGuardia National Airport and
  Boston, and between LaGuardia National Airport and Washington National
  Airport, is of significant public interest to the unique megalopolis of
  the northeastern United States; and
  (2) to report to Congress within 12 months after the date of enactment of
  this Act on the results of such study, along with such recommendations as
  the Secretary determines appropriate.
PART 6--UNIVERSITY AIR TRANSPORTATION CENTERS
  SEC. 3401. (a) UNIVERSITY AIR TRANSPORTATION CENTERS-
  (1) GRANTS FOR ESTABLISHMENT AND OPERATION- The Administrator of the Federal
  Aviation Administration (hereinafter referred to as the `Administrator')
  is authorized to make grants to one or more nonprofit institutions of higher
  learning to establish and operate one university air transportation center
  in each of the ten Federal regions which comprise the Standard Federal
  Regional Boundary System.
  (2) RESPONSIBILITIES- The responsibilities of each university air
  transportation center established under this subsection shall include,
  but not be limited to, the conduct of research concerning airspace and
  airport planning and design, airport capacity enhancement techniques,
  human performance in the air transportation environment, aviation safety
  and security, the supply of trained air transportation personnel including
  pilots and mechanics, and other aviation issues pertinent to developing
  and maintaining a safe and efficient air transportation system, and the
  interpretation, publication, and dissemination of the results of such
  research.
  (3) APPLICATION- Any nonprofit institution of higher learning interested in
  receiving a grant under this subsection shall submit to the Administrator an
  application in such form and containing such information as the Administrator
  may require by regulation.
  (4) SELECTION CRITERIA- The Administrator shall select recipients of grants
  under this subsection on the basis of the following criteria:
  (A) The extent of which the needs of the State in which the applicant is
  located are representative of the needs of the Federal region for improved
  air transportation services and facilities.
  (B) The demonstrated research and extension resources available to the
  applicant for carrying out this subsection.
  (C) The capability of the applicant to provide leadership in making national
  and regional contributions to the solution of both long-range and immediate
  air transportation problems.
  (D) The extent to which the applicant has an established air transportation
  program.
  (E) The demonstrated ability of the applicant to disseminate results of
  air transportation research and educational programs through a statewide
  or regionwide continuing education program.
  (G) The projects which the applicant proposes to carry out under the grant.
  (5) MAINTENANCE OF EFFORT- No grant may be made under this section in any
  fiscal year unless the recipient of such grant enters into such agreements
  with the Administrator as the Administrator may require to ensure that
  such recipient will maintain its aggregate expenditures from all other
  sources for establishing and operating a university air transportation
  center and related research activities at or above the average level of
  such expenditures in its 2 fiscal years preceding the date of enactment
  of this Act.
  (6) FEDERAL SHARE- The Federal share of a grant under this subsection shall
  be 50 percent of the costs of establishing and operating the university
  air transportation center and related research activities carried out by
  the grant recipient.
  (7) Research advisory committee-
  (A) Section 312(f)(2) of the Federal Aviation Act of 1958 (49
  App. U.S.C. 1353(f)(2) is amended by adding at the end of the following
  new sentence: `In addition, the committee shall coordinate the research
  and training to be carried out by the university air transportation centers
  established under the Airport Capacity Act of 1990, disseminate the results
  of such research, act as a clearinghouse between such centers and the air
  transportation industry, and review and evaluate programs carried out by
  such centers.'.
  (B) Section 312(f)(3) of the Federal Aviation Act of 1958 (49
  App. U.S.C. 1353(f)(3) is amended by striking `20' and inserting in lieu
  thereof `30'; and by striking the last sentence and inserting in lieu
  thereof the following: `The Administrator in appointing the members of
  the committee shall ensure that the university air transportation centers,
  universities, corporations, associations, consumers, and other government
  agencies are represented.'.
  (b) AUTHORITY- Section 312(c) of the Federal Aviation Act of 1958 (49
  App. U.S.C. 1353(c)) is amended by inserting immediately after the third
  sentence the following: `The Administrator shall undertake or supervise
  research programs concerning airspace and airport planning and design,
  airport capacity enhancement techniques, human performance in the air
  transportation environment, aviation safety and security, the supply of
  trained air transportation personnel including pilots and mechanics, and
  other aviation issues pertinent to developing and maintaining a safe and
  efficient air transportation system.'.
PART 7--MISCELLANEOUS
SEC. 3451. SEVERABILITY.
  If any provision of this Act (including an amendment made by this Act),
  or the application thereof to any person or circumstance, is held invalid,
  the remainder of this Act and the application of such provision to other
  persons or circumstances shall not be affected thereby.
SEC. 3452. AUXILIARY FLIGHT SERVICE STATION PROGRAM.
  (a) GENERAL RULE- The Secretary of Transportation shall develop and implement
  a system of manned auxiliary flight service stations. The auxiliary flight
  service stations shall supplement the services of the planned consolidation
  to 61 automated flight service stations under the flight service station
  modernization program. Auxiliary flight service stations shall be located
  in areas of unique weather or operational conditions which are critical
  to the safety of flight.
  (b) REPORT TO CONGRESS- Not later than 180 days after the date of the
  enactment of this Act, the Secretary of Transportation shall report to
  Congress with the plan and schedule for implementation of this section.
SEC. 3453. MILITARY AIRPORT PROGRAM.
  (a) DECLARATION OF POLICY- Section 502(a) of the Airport and Airway
  Improvement Act of 1982 (49 U.S.C. App. 2201(a) is further amended--
  (1) by striking `and' at the end of paragraph (12);
  (2) by striking the period at the end of paragraph (13) and inserting `;
  and'; and
  (3) by adding at the end the following:
  `(14) special emphasis should be placed on the conversion of appropriate
  former military air bases to civil use and on the identification and
  improvement of additional joint-use facilities.'.
  (b) SET-ASIDE--Section 508(d) of such Act (49 U.S.C. App. 2204(d) is
  amended by striking paragraph (5) and inserting the following:
  `(5) MILITARY AIRPORT SET-ASIDE--Not less than one-half of one percent of
  the funds made available under section 505 in each of fiscal years 1991 and
  1992 shall be distributed during such fiscal year to sponsors of current or
  former military airports designated by the Secretary under subsection (f)
  of this section for the purpose of developing current and former military
  airports to improve the capacity of the national air transportation system.
  `(6) REALLOCATION- If the Secretary determines that he will not be able to
  distribute the amount of funds required to be distributed under paragraph
  (1), (2), (3), (4), or (5) of this subsection for any fiscal year because
  the number of qualified applications submitted in compliance with this
  title is insufficient to meet such amount, the portion of such amount
  the Secretary determines will not be distributed shall be available for
  obligation during such fiscal year for other airports and for other purposes
  authorized by section 505 of this title.'.
  (c) DESIGNATION OF FORMER MILITARY AIRPORTS- Section 508 of such Act is
  further amended by adding at the end the following new subsection:
  `(f) Designation of Current or Former Military Airports-
  `(1) DESIGNATION- The Secretary shall designate not more than 5 current or
  former military airports for participation in the grant program established
  under subsection (d)(5) and this subsection. At least 2 such airports
  shall be designated within 6 months after the date of the enactment of this
  subsection and the remaining airports shall be designated for participation
  no later than September 30, 1992.
  `(2) SURVEY- The Secretary shall conduct a survey of current and former
  military airports to identify which ones have the greatest potential
  to improve the capacity of the national air transportation system. The
  survey shall also identify the capital development needs of such airports
  in order to make them part of the national air transportation system and
  shall identify which capital development needs are eligible for grants
  under section 505. The survey shall be completed by September 30, 1991.
  `(3) LIMITATION- In selecting airports for participation in the program
  established under subsection (d)(5) and this subsection and in conducting the
  survey under paragraph (2), the Secretary shall consider only those current
  or former military airports whose conversion in whole or in part to civilian
  commercial or reliever airport as part of the national air transportation
  system would enhance airport and air traffic control system capacity in
  major metropolitan areas and reduce current and projected flight delays.
  `(4) PERIOD OF ELIGIBILITY- An airport designated by the Secretary under
  this subsection shall remain eligible to participate in the program under
  subsection (d)(5) and this subsection for the 5 fiscal years following
  such designation. An airport that does not attain a level of enplaned
  passengers during such 5 fiscal year period which qualifies it as a small
  hub airport as defined as of January 1, 1990, or reliever airport may be
  redesignated by the Secretary for participation in the program for such
  additional fiscal years as may be determined by the Secretary.
  `(5) ADDITIONAL FUNDING- Notwithstanding the provisions of section 513(b),
  not to exceed $3,000,000 per airport of the sums to be distributed at the
  discretion of the Secretary under section 507(c) for any fiscal year may
  be used by the sponsor of a current or former military airport designated
  by the Secretary under this subsection for construction, improvement,
  or repair of terminal building facilities, including terminal gates used
  by aircraft for enplaning and deplaning revenue passengers. Under no
  circumstances shall any gates constructed, improved, or repaired with
  Federal funding under this paragraph be subject to long-term leases for
  periods exceeding 10 years or majority in interest clauses.'.
SEC. 3454. EXPANDED EAST COAST PLAN.
  (a) ENVIRONMENTAL IMPACT STATEMENT- Not later than 180 days after the date
  of the enactment of this Act, the Administrator of the Federal Aviation
  Administration shall issue an environmental impact statement pursuant to
  the National Environmental Policy Act of 1969 on the effects of changes
  in aircraft patterns over the State of New Jersey caused by implementation
  of the Expanded East Coast Plan.
  (b) AIR SAFETY INVESTIGATION- Not later than 180 days after the date of
  enactment of this Act, the Administrator shall conduct an investigation to
  determine the effects on air safety of changes in aircraft flight patterns
  over the State of New Jersey caused by implementation of the Expanded East
  Coast Plan.
  (c) REPORT TO CONGRESS- Not later than 180 days after the date of
  enactment of this Act, the Administrator shall submit to Congress a
  report containing the results of the environmental impact statement and
  investigation conducted pursuant to this section. Such report shall also
  contain such recommendations for modification of the Expanded East Coast
  Plan  as  the Administrator  considers  appropriate  or an explanation of
  why modification of such plan is not appropriate.
  (d) IMPLEMENTATION OF MODIFICATIONS- Not later than 1 year after the date of
  the enactment of this Act, the Administrator shall implement modifications
  to the Expanded East Coast Plan recommended under subsection (c).
SEC. 3455. DECLARATION OF POLICY.
  Section 502(a) of the Airport and Airway Improvement Act of 1982 (49
  U.S.C. App. 2201) is amended--
  (1) in paragraph (5) by inserting `, including as they may be applied
  between category and class of aircraft' after `discriminatory practices'; and
  (2) in paragraph (13) by inserting `and should not unjustly discriminate
  between categories and classes of aircraft' after `attempted'.
SEC. 3456. AIRLINE MERGER.
  (a) IN GENERAL- Title IV of the Federal Aviation Act of 1958 is amended
  by adding at the end thereof the following new section:
  `SEC. 420. (a) In the event that the purchase, or acquisition of control in
  any manner of an air carrier by an air carrier or any person controlling
  an air carrier affects the seniority rights of the carriers' flight deck
  crew-members, the affected employees, notwithstanding any other provision
  of law, shall be afforded the protections and procedures provided by the
  Civil Aeronautics Board in the Tiger International--Seaboard Acquisition
  Case, CAB Docket 33712, to ensure that seniority lists are integrated in
  a fair and equitable manner.
  `(b) On complaint by any flight deck employee or by the representative of any
  group of the flight deck employees affected by the transaction, the United
  States District Court for the district in which the complainant resides or
  has its principal place of business or for the District of Columbia, shall
  have jurisdiction to enforce the labor protective provisions specified
  in subsection (a). The fact that there may be pending a representation
  dispute before the National Mediation Board shall not deprive the court
  of jurisdiction.
SEC. 3457. TRANSFER OF AVIATION SAFETY FUNCTIONS BACK TO FEDERAL AVIATION
ADMINISTRATION.
  (a) There are hereby transferred to and vested exclusively in the
  Administrator of the Federal Aviation Administration the following functions,
  powers, and duties of the Secretary of Transportation:
  (1) Those specified in section 106(g) of title 49 of the United States
  Code; and
  (2) Sections 315, 316, and 317 of the Federal Aviation Act of 1958 (49
  U.S.C. App. 1356, 1357, and 1358).
  (b) The Administrator shall not submit decisions rendered under the
  authority of the provisions cited in subsection (a) for the approval of,
  nor be bound by the decisions or recommendations of, the Secretary or any
  committee, board, or other organization created by Executive Order.
  (c) In exercising the functions, powers and duties enumerated in subsection
  (a), the Administrator shall be guided by the declaration of policy in
  section 103 of the Federal Aviation Act of 1958 (49 U.S.C. App. 1303).
SEC. 3458. CERTIFICATE TRANSFERS.
  Section 401(h) of the Federal Aviation Act of 1958 (49 App. U.S.C. 1371(h))
  is amended--
  (1) by redesignating the existing text as paragraph (1); and
  (2) by adding at the end of the following new paragraph:
  `(2) The Secretary of Transportation shall, upon any such transfer,
  certify to the Committee on Commerce, Science, and Transportation of the
  Senate and the Committee on Public Works and Transportation of the House
  of Representatives that the transfer is consistent with the public interest.
  `(3) For purposes of this subsection, a transfer of a certificate is
  consistent with the public interest if that transfer does not adversely
  affect:
  `(A) the viability of each of the carriers involved in the transfer;
  `(B) competition in the domestic airline industry, and
  `(C) the trade position of the United States in the international air
  transportation market.'.
SEC. 3459. SENSITIVE SECURITY INFORMATION.
  Section 316(d)(2) of the Federal Aviation Act of 1958 (49 App. 1357(d)(2))
  is amended--
  (1) by inserting `security or' immediately before `research and development
  activities'; and
  (2) by striking `subsection' and inserting in lieu thereof `title'.
SEC. 3460. REPORTS.
  Section 107 (b) and (c) of the Federal Aviation Act of 1958 (49 App. 1307
  (b) and (c)) is amended by striking `each April 1 thereafter' each place
  it appears and inserting in lieu thereof `through April 1, 1990'.
SEC. 3461. ATLANTIC CITY AIRPORT.
  Section 312 of the Airport and Airway Safety and Capacity Expansion Act
  of 1987 (101 Stat. 1528) is repealed.
SEC. 3462. NATURAL DISASTER REGULATION.
  The Federal Aviation Act of 1958 is amended by adding immediately after
  section 612 the following:
`SAFETY REGULATION
  `SEC. 613. (a) NATIONAL DISASTER AREAS- Prior to the expiration of the
  180-day period following the date of the enactment of this section,
  the Administrator of the Federal Aviation Administration, for safety and
  humanitarian reasons, shall issue such regulations as may be necessary to
  prohibit or otherwise restrict aircraft overflights of any inhabited area
  which has been declared a national disaster area in the State of Hawaii.
  `(b) EXCEPTIONS- Regulations issued pursuant to subsection (a) shall not
  be applicable in the case of aircraft overflights involving an emergency
  or a ligitimate scientific purpose.
  `(c) STATUS OF STUDIES- On or before the expiration of the 90-day period
  following the date of the enactment of this section, the Administrator
  of the Federal Aviation Administration shall report to the Congress on
  the status of the studies and reports required by Public Law 100-91 (101
  Stat. 674 et seq.).'.
TITLE IV--COMMITTEE ON ENERGY AND NATURAL RESOURCES
Subtitle A--Tongass Timber Reform
SEC. 4001. SHORT TITLE AND DEFINITION.
  This subtitle may be cited as the `Tongass Timber Reform Act'.
SEC. 4002. TO REQUIRE ANNUAL APPROPRIATIONS FOR TIMBER MANAGEMENT ON THE
TONGASS NATIONAL FOREST.
  The Alaska National Interest Lands Conservation Act (Public Law 96-487,
  hereinafter in this subtitle referred to as `ANILCA') is hereby amended by
  deleting section 705(a) (16 U.S.C. 539d(a)) in its entirety and inserting
  in lieu thereof the following:
  `SEC. 705. (a) Subject to appropriations, other applicable law, and the
  requirements of the National Forest Management Act of 1976 (Public Law
  94-588), except as provided in subsection (d) of this section, the Secretary
  shall seek to provide a supply of timber from the Tongass National Forest
  which (1) meets the annual market demand for timber from such forest and
  (2) meets the market demand from such forest for each planning cycle.'.
SEC. 4003. IDENTIFICATION OF LANDS UNSUITABLE FOR TIMBER PRODUCTION.
  ANILCA is further amended by deleting section 705(d) (16 U.S.C. 539d(d))
  in its entirety and inserting in lieu thereof:
  `(d) All provisions of section 6(k) of the National Forest Management Act of
  1976 (16 U.S.C. 1604(k)) shall apply to the Tongass National Forest except
  that the Secretary need not consider economic factors in the identification
  of lands not suited for timber production.'.
SEC. 4004. FISHERIES PROTECTION.
  Section 705 (16 U.S.C. 539d) of ANILCA is amended by adding at the end
  thereof the following new subsection:
  `(e) In order to assure protection of riparian habitat, the Secretary shall
  maintain a buffer zone of no less than one hundred feet in width on each side
  of all Class I streams in the Tongass National Forest, and on those Class II
  streams which flow directly into a Class I stream, within which commercial
  timber harvesting shall be prohibited, except where independent national
  forest timber sales have already been sold prior to March 1, 1990, or where
  volume has been released prior to March 1, 1990, to either the Alaska Pulp
  Corporation or the Ketchikan Pulp Company pursuant to the long-term timber
  sale contracts numbered 12-11-010-1545 and A10fs-1042 respectively. If such
  an independent timber sale or released volume is within the buffer zone,
  the Secretary shall make every effort to relocate such independent sale
  or released volume to an area outside of the buffer zone. The Secretary
  shall use best management practices, as defined in the Region 10 Soil
  and Water Conservation Handbook (FSH 2509.22), January 1990, to assure
  the protection of riparian habitat on streams or portions of streams not
  protected by such buffer zones. For the purposes of this subsection, the
  terms `Class I streams' and `Class II streams' mean the same as they do in
  the Region 10 Aquatic Habitat Management Handbook (FSH 2609.24), June 1986.'.
SEC. 4005. FUTURE REPORTS ON THE TONGASS NATIONAL FOREST.
  Section 706(a) of ANILCA (16 U.S.C. 539e(a)) is amended by striking the
  second sentence.
SEC. 4006. SMALL BUSINESS SET-ASIDE PROGRAMS.
  (a) Section 14(i)(1) of the National Forest Management Act of 1976 (16
  U.S.C. 472a(i)(1)), is amended by striking the following: `road: Provided,
  That the provisions of this subsection shall not apply to sales of timber
  on National Forest System lands in the State of Alaska.' and inserting in
  lieu thereof `road.'.
  (b) Section 705 (16 U.S.C. 539d) of ANILCA is amended by adding at the
  end thereof the following new subsection:
  `(f) Subject to appropriations, the provisions of this Act and other
  applicable law (including but not limited to the requirements of the National
  Forest Management Act of 1976 (Public Law 94-588)) and in order to assure
  the continuation of the Small Business Administration timber sale program,
  the Secretary shall seek to provide a supply of timber from the Tongass
  National Forest which meets the demand of those purchasers qualifying as
  `small business concerns' under the Small Business Act as amended (15
  U.S.C. 631 et seq.).'.
SEC. 4007. TONGASS NATIONAL FOREST LANDS PROTECTION.
  Title V of ANILCA is amended by adding at the end thereof the following
  new section:
  `SEC. 508. LUD II Management Areas-
  `The following lands are hereby allocated to Land Use Designation II (LUD II)
  as described in the Tongass National Forest Land Management Plan, completed
  March 1979, and amended Winter 1985-1986, and shall be managed by the
  Secretary of Agriculture in perpetuity in accordance with such designation:
  `(1) YAKUTAT FORELANDS- Certain lands which comprise approximately 137,947
  acres, as generally depicted on a map entitled `Yakutat Forelands LUD II
  Management Area--Proposed' and dated May 1989.
  `(2) BERNERS BAY- Certain lands which comprise approximately 46,000 acres,
  as generally depicted on a map entitled `Berners Bay LUD II Management
  Area--Proposed' and dated May 1989.
  `(3) CHUCK RIVER- Certain lands which comprise approximately 72,503 acres,
  as generally depicted on a map entitled `Chuck River LUD II Management
  Area--Proposed' and dated May, 1989.
  `(4) GOOSE FLATS- Certain lands which comprise approximately 23,798 acres,
  as generally depicted on a map entitled `Goose Flats LUD II Management
  Area--Proposed' and dated May, 1989.
  `(5) KADASHAN- Certain lands which comprise approximately 33,641 acres,
  as generally depicted on a map entitled `Kadashan LUD II Management
  Area--Proposed' and dated May, 1989.
  `(6) KARTA- Certain lands which comprise approximately 38,046 acres, as
  generally depicted on a map entitled `Karta LUD II Management Area--Proposed'
  and dated May, 1989.
  `(7) LISIANSKI RIVER/UPPER HOONAH SOUND- Certain lands which comprise
  approximately 135,426 acres as generally depicted on a map entitled
  `Lisianski River/Upper Hoonah Sound LUD II Management Area--Proposed'
  and dated May, 1989.
  `(8) MT. CALDER/MT. HOLBROOK- Certain lands which comprise approximately
  56,540 acres as generally depicted on a map entitled `Mt. Calder/Mr. Holbrook
  LUD II Management Area--Proposed' and dated May, 1989.
  `(9) NUTKWA- Certain lands which comprise approximately 28,118 acres
  as generally depicted on a map entitled `Nutkwa LUD II Management
  Area--Proposed' and dated May, 1989.
  `(10) OUTSIDE ISLANDS- Certain lands which comprise approximately 75,017
  acres as generally depicted on a map entitle `Outside Islands LUD II
  Management Area--Proposed' and dated May, 1989.
  `(11) TRAP BAY- Certain lands which comprise approximately 6,646 acres
  as generally depicted on a map entitled `Trap Bay LUD II Management
  Area--Proposed' and dated May, 1989.
  `(12) YOUNG LAKE- Certain lands which comprise approximately 18,173 acres
  as generally depicted on a map entitled `Young Lake LUD II Management
  Area--Proposed' and dated May, 1989.'
SEC. 4008. CONTRACT MODIFICATIONS.
  (a) DEFINITIONS- As used in this section, the term `Secretary' means
  the Secretary of Agriculture. The term `ILMP' means the Tongass National
  Forest Land Management Plan, completed March, 1979, and amended Winter
  1985-1986. The term `contracts' means the long-term timber sale contracts
  numbered 12-11-010-1545 and A10fs-1042 between the United States and the
  Alaska Pulp Corporation, and between the United States and the Ketchikan
  Pulp Company, respectively.
  (b) FINDING- The Congress hereby finds and declares that it is in the
  national interest to modify the contracts in order to assure that valuable
  public resources in the Tongass National Forest are protected and wisely
  managed. Modification of the long-term timber sale contracts will enhance
  the balanced use of resources on the forest and promote fair competition
  within the southeast Alaska timber industry.
  (c) UNILATERAL CHANGES- The contracts are hereby modified to:
  (1) assure that all timber sale planning and environmental assessment
  procedures regarding the contracts are consistent with procedures for
  independent national forest timber sales, pursuant to National Forest
  Management Act of 1976 (Public Law 94-588), the National Environmental
  Policy Act of 1969 (42 U.S.C. 4321 et seq.) and other applicable laws;
  (2) eliminate the practice of harvesting a disproportionate amount of
  old-growth timber by limiting the volume scheduled for harvest over the
  rotation in volume classes 6 and 7, as defined in TLMP and supporting
  documents, so that the proportion of volume scheduled in these classes
  within a contiguous management areas does not exceed the proportion of
  volume currently represented by these classes within the mangement area;
  (3) assure that all timber offered under the contracts shall be substantially
  harvested within three years of the Secretary shall withhold further
  offerings, unless harvesting has been delayed by third-party litigation;
  (4) assure that the Secretary determines the location and size of sale
  units and the timing of timber harvests;
  (5) allow rejection of timber offered under the contracts. Upon rejection
  of any timber offered, the Secretary may re-offer such timber to any
  qualified bidder under independent national forest timber sales. If the
  rejected timber is subsequently sold within 12 months and harvested within
  the independent contract period, that amount of timber shall be subtracted
  from the volume remaining under the appropriate contract;
  (6) assure that utility logs offered under the contracts shall be counted
  against contract volume requirements;
  (7) assure that purchaser road credits are provided under the contracts
  in a manner consistent with independent national forest timber sale
  procedures; and
  (8) assure that timber offered under the contracts shall be priced according
  to independent national forest timber sale procedures with stumpage rates
  and profitability criteria consistent with those of independent purchasers
  incompetitive sales.
  (d) CERTIFICATION TO CONGRESS- Notwithstanding any other provision of law,
  the Secretary is directed to make the necessary revisions to the text of the
  contracts to reflect the modifications to such contracts made by subsection
  (c) of this section. the Secretary shall promptly, and in no event later
  than 90 days after the date of enactment of this Act, transmit the text of
  the modified contracts to the Congress together with his certification that
  these revisions are in compliance with the modifications made by subsection
  (c). Until such time as the Secretary transmits the text of the modified
  contracts to the Congress, but no later than 90 days after the date of
  enactment of this Act, the Secretary is authorized to conduct timber
  sale operations on the Tongrass National Forest in accordance with the
  provisions of the contracts as they existed on the day before the date of
  enactment of this Act. At such time as the Secretary transmits the modified
  contracts to Congress, or 90 days after the date of enactment of this Act,
  whichever is sooner, the Secretary shall conduct timber sales operations
  on the Tongass National Forest only in accordance with the provisions of
  the modified contracts.
  (e) The Secretary shall take such other actions in management of the Tongass
  National Forest as may be necessary to meet the provisions of subsection (c).
  (f) GAO AUDIT- The Comptroller General of the United States shall, on a
  continuing basis, audit the actions taken by the Secretary to revise the text
  of the contracts pursuant to the modifications made pursuant to subsection
  (c). Within 30 days after the Secretary's transmittal of the contracts
  and certification to Congress, and in no event later than 120 days after
  the date of enactment of this Act, the Comptroller General shall submit
  a report to Congress describing the revisions made by the Secretary to the
  contracts and stating whether, in the opinion of the Comptroller General, the
  revised contracts are in compliance with the requirements of this section.
SEC. 4009. HAIDA LAND EXCHANGE ACT AMENDMENT.
  The Haida Land Exchange Act of 1986 (Public Law 99-664) is hereby amended
  by adding the following new section at the end thereof:
`SEC. 12. SULZER PORTAGE LANDS SELECTION.
  `(a) WITHDRAWAL- The following lands are withdrawn, subject to valid
  existing rights, from all forms of appropriation under the public land
  laws, including the mining and mineral leasing laws, and from selection
  under the Alaska Statehood Act (Public Law 85-508) is amended:
`COPPER RIVER MERIDIAN
`Township 76 South, Range 85 East
  `Section 16: South half south half, northwest quarter southwest quarter.
  `Section 17: West half, southeast quarter, south half northeast quarter.
  `Section 18: All, fractional.
  `Section 19: North half northeast quarter, southeast quarter northeast
  quarter, northeast quarter northwest quarter.
  `Section 20: North half, north half southeast quarter, southeast quarter
  southeast quarter.
  `Section 21: All.
  `Section 22: South half, south half north half, fractional.
  `Section 23: South half, fractional.
  `Section 24: South half, fractional.
  `Section 25: All, excluding islets.
  `Section 26: North half, north half southeast quarter, fractional.
  `Section 27: East half, east half west half, northwest quarter northwest
  quarter, southwest quarter southwest quarter.
  `Section 28: Northeast quarter northeast quarter, southeast quarter
  southeast quarter.
  `Section 31: Southwest quarter, west half southeast quarter.
`Township 76 South, Range 86 East
  `Section 30: Southwest quarter, including all fractional lands on west
  shore of Big Creek Bay.
`Township 76 South, Range 86 East
  `Section 31: East half west half, southwest quarter southeast quarter,
  northwest quarter southeast quarter.
`Township 77 South, Range 86 East
  `Section 2: North half, southeast quarter, north half southwest quarter.
  `(b) SELECTION- (1) For a period of one year after the date of enactment
  of this section, Haida Corporation shall be entitled to select lands from
  among those lands withdrawn pursuant to subsection (a). Haida Corporation
  shall notify the Secretary of the Interior which lands so withdrawn Haida
  Corporation wishes to select and shall designate which Haida Exchange
  Lands and/or outstanding selection rights under section 16 of the Alaska
  Native Claims Settlement Act (43 U.S.C. 1615) Haida Corporation intends
  to exchange or relinquish in return for its selections hereunder.
  `(2) The exchange of lands selected by Haida Corporation pursuant to this
  subsection for Haida Exchange Lands or selection rights under section 16
  of the Alaska Native Claims Settlement Act shall be on an acre-for-acre
  basis. The conveyance of lands to Haida Corporation and Sealaska pursuant
  to this subsection shall be deemed a conveyance of lands pursuant to the
  Alaska Native Claims Settlement Act.
  `(3) After their selection, the surface estate in lands selected by
  Haida Corporation pursuant to this subsection shall be conveyed to Haida
  Corporation and the subsurface estate in such lands shall be conveyed
  to Sealaska Corporation in partial fulfillment of such corporations'
  entitlement under the Alaska Native Claims Settlement Act and pursuant to
  the provisions of that Act: Provided, That the United States reserve an
  easement one hundred feet in total width for the use of the State of Alaska
  for a transportation corridor on the Sulzer Portage trail between Cholmondly
  Sound and Hetta Inlet: Provided however, That timber occurring within the
  easement boundaries shall remain the property of Haida Corporation.
  `(c) DURATION- The withdrawal made pursuant to subsection (a) shall terminate
  ninety days after the United States has conveyed the surface and subsurface
  estates of all lands selected by Haida Corporation pursuant to subsection
  (b) to Haida Corporation and Sealaska Corporation respectively, or one
  year after the date of enactment or this section, whichever is later.'.
SEC. 4010. STANDARDIZE RIPARIAN MANAGEMENT PRACTICES.
  No later than one year after the date of enactment of this Act, the
  Secretary of Agriculture, in consultation with the State of Alaska and
  affected private land owners, shall prepare and transmit to the Congress
  a study containing recommendations on the need, if any, to standardize
  riparian management practices for Federal, State, and private lands within
  the Tongass National Forest.
SEC. 4011. DEFINITIONS.
  (a) DEFINITIONS- As used in sections 4012, 4013, 4014 and 4015--
  (1) the term `the Settlement Act' means the Alaska Native Claims Settlement
  Act (Public Law 92-203), as amended;
  (2) the term `Secretary' means the Secretary of Agriculture;
  (3) the term `lands' has the same meaning as specified in Section 102
  of ANILCA;
  (4) the term `Goldbelt' means Goldbelt, Incorporated, an Alaska Native
  Corporation (as such term is defined in sections 102(6) and (9) of
  ANILCA); and
  (5) the term `Echo Cove lands' means the lands owned by Goldbelt generally
  depicted on a map entitled `Echo Cove Lands' and dated April, 1990,
  aggregating approximately 1,151 acres; the term `Hobart Bay lands' means
  the lands generally depicted on a map entitled `Hobart Bay Lands' and dated
  April, 1990, aggregating approximately 2,600 acres. Such maps will be kept
  on file in the offices of the Secretary of Agriculture in Washington, D.C.,
  and in the Alaska Region office of the Forest Service in Juneau, Alaska.
SEC. 4012. EXCHANGE TERMS.
  (a) If, within ninety days after enactment of this Act, Goldbelt conveys
  to the United States the Echo Cove lands, then, effective on the date of
  such conveyance, there is hereby granted to Goldbelt, subject to valid
  existing rights, the Hobert Bay lands. Upon conveyance of the Hobart Bay
  lands to Goldbelt, Goldbelt will be afforded all rights and privileges of
  ownership of such lands.
  (b) Effective on the date of enactment of this Act, the Hobart Bay
  lands are withdrawn from all forms of entry, location and appropriation
  under the public lands laws, including mining and mineral leasing laws,
  and from selection under the Alaska Statehood Act until conveyance to
  Goldbelt. Such lands shall remain withdrawn until conveyed pursuant to
  subsection (a). During the withdrawal period, the Secretary shall manage
  the Hobart Bay lands so that no new rights shall be created.
  (c) Any lands acquired by the United States pursuant to this section shall
  become part of the Tongass National Forest and the Secretary shall modify
  the boundaries of the Tongass National Forest accordingly.
SEC. 4013. SETTLEMENT ACT LANDS AND CONVEYANCES
  Any lands or interests therein conveyed to Goldbelt pursuant to section
  4012 shall be deemed lands and interests conveyed pursuant to the Settlement
  Act and any conveyances effected by this title shall be deemed conveyances
  to Native Corporations pursuant to the Settlement Act.
SEC. 4014. ACCESS.
  Goldbelt shall have such rights of access to the Hobart Bay lands as are
  set forth in section 1110(b) of ANILCA, in addition to such rights of
  access as may exist under other laws and regulations.
SEC. 4015. SURVEYS.
  The Secretary shall complete the survey of the Hobart Bay lands in
  conjunction with the conveyance made pursuant to section 4012 within one
  year from the date of enactment of this subtitle. Goldbelt shall complete
  any surveys as may be necessary with regard to the Echo Cove lands in
  conjunction with the conveyance made pursuant to section 4012 within
  one year from the date of enactment of this subtitle: Provided, however,
  That Goldbelt shall not be required to survey or resurvey any boundaries
  used in any interm conveyance or patent conveying Echo Cove lands to
  Goldbelt. As soon as practicable after the completion of the surveys,
  the Secretary shall publish legal descriptions of those lands conveyed
  pursuant to this subtitle in the Federal Register. After the surveys are
  completed, the Secretary shall deliver to Goldbelt a patent confirming the
  legislative exchange of the Hobart Bay lands made pursuant to section 4012
  and Goldbelt shall deliver to the Secretary a quitclaim deed confirming
  its conveyance of the Echo Cove lands referred to in section 4012.
SEC. 4016. SEALASKA CORPORATION.
  (a) The Secretary is directed to continue to engage in expedited negotiations
  with Sealaska Corporation for a voluntary exchange agreement through
  which the United States would acquire surface and subsurface estates held
  by Sealaska in the Tongass National Forest, in exchange for subsurface
  estate in the Greens Creek area of Admiralty Island. Within sixty days of
  enactment the Secretary shall submit his recommendation as to whether or not
  an exchange should be made, and, if so its appropriate terms to Congress,
  or shall report to Congress as to why no such recommendation has been made.
  (b) The Secretary is directed to engage during the sixty-day period in
  expedited negotiations with Shee Atika, Inc., Atikon, Inc., and Sealaska
  for independent voluntary exchange agreements through which the United
  States would acquire all of the surface estate or all of the surface and
  subsurface estates held by these private parties in the Lake Florence, Lake
  Kathleen, and Wards Creek drainages of Admiralty Island. The first priority
  of such negotiations shall be acquisition of the Lake Florence drainage.
Subtitle B
  SEC. 4110. SHORT TITLE- This subtitle may be cited as the `Uranium Enrichment
  Act of 1990'.
  SEC. 4111. DELETION OF SECTION 161 v- Subsection 161 v. of the Atomic
  Energy Act of 1954, as amended, is deleted and the remaining subsections
  are relettered accordingly.
  SEC. 4112. REDIRECTION OF THE URANIUM ENRICHMENT ENTERPRISE OF THE UNITED
  STATES- The Atomic Energy Act of 1954, as amended (42 U.S.C. 2011-2296)
  is further amended by--
  a. inserting at the commencement thereof after the words `ATOMIC ENERGY
  ACT OF 1954':
`TITLE I--ATOMIC ENERGY';
and
  b. adding at the end thereof the following:
`TITLE II--UNITED STATES ENRICHMENT CORPORATION
`CHAPTER 21. FINDINGS
  `SEC. 1101. FINDINGS- The Congress of the United States finds that:
  `a. The enrichment of uranium is essential to the national security and
  energy security of the United States.
  `b. A competitive, well-managed and efficient enrichment enterprise
  provides important economic benefits to the United States and contributes
  to a highly favorable foreign trade balance.
  `c. A strong United States enrichment enterprise promotes United States
  nonproliferation policies by requiring accountability for United States
  enriched uranium.
  `d. The operation of uranium enrichment facilities must meet high standards
  for environmental health and safety.
  `e. The operation and management of a uranium enrichment enterprise
  requires a commercial business orientation in order to engender customer
  support and confidence, and customers, rather than the taxpayers at large,
  should bear the costs of commercial uranium enrichment services.
  `f. The optimal level of expenditures for the uranium enrichment enterprise
  fluctuates and cannot be accurately predicted or efficiently financed if
  subject to annual authorization and appropriation.
  `g. Flexibility is essential to adapt business operations to a competitive
  marketplace.
  `h. The events of the recent past, including the emergence of foreign
  competition, have brought new and unforeseen forces to bear upon the
  management and operation of the Government's uranium enrichment enterprise.
  `i. The present operation of the uranium enrichment enterprise must be
  changed so as to further the national interest in the enterprise and
  respond to the competitive demand placed upon it by market forces, while
  continuing to meet the paramount objective of ensuring the Nation's common
  defense and security.
`CHAPTER 22. DEFINITIONS, ESTABLISHMENT OF CORPORATION AND PURPOSES
  `SEC. 1201. DEFINITIONS- For the purpose of this title:
  `a. The term `Secretary' means the Secretary of Energy.
  `b. The term `Department' means the Department of Energy of the United
  States.
  `c. The term `Administrator' means the chief executive officer of the
  United States Enrichment Corporation.
  `d. The term `Corporation' means the United States Enrichment Corporation.
  `e. The term `Corporate Board' means the appointed members of the official
  advisory panel appointed by the President pursuant to section 1503 of
  this title.
  `f. The term `uranium enrichment' means the separation of uranium of a
  given isotopic content into two components, one having a higher percentage
  of a fissile isotope and one having a lower percentage.
  `g. The term `remedial action' has the same meaning as defined in section
  120(24) of the Comprehensive Environmental Response, Compensation and
  Liability Act.
  `h. The term `decontamination and decommissioning' means those activities
  undertaken to decontaminate and decommission inactive facilities that
  have residual radioactive or mixed radioactive and hazardous chemical
  contamination.
  `SEC. 1202. Establishment of the Corporation:
  `a. There is hereby created a body corporate to be known as the `United
  States Enrichment Corporation'.
  `b. The Corporation shall--
  `(1) be established as a wholly owned Government corporation subject to
  the Government Corporation Control Act, as amended (31 U.S.C. 9101-9109),
  except as otherwise provided herein; and
  `(2) be an agency and instrumentality of the United States.
  `SEC. 1203. PURPOSES- The Corporation is created for the following purposes--
  `(1) to acquire feed material for uranium enrichment, enriched uranium,
  the Department's uranium previously set aside for commercial purposes,
  and the Department's uranium enrichment and related facilities;
  `(2) to operate, and as required by business conditions, to expand or
  construct facilities for uranium enrichment or both;
  `(3) to market and sell enriched uranium and uranium enrichment and related
  services to--
  `(A) the Department for governmental purposes; and
  `(B) qualified domestic and foreign persons;
  `(4) to conduct research and development as required to meet corporate
  objectives for the purpose of identifying, evaluating, improving and
  testing processes for uranium enrichment;
  `(5) to operate, as a commercial enterprise, on a profitable and efficient
  basis; in order to maximize the long term economic value of the Corporation
  to the United States Government including the payment of dividends to the
  Treasury as a return on the United States Government investment;
  `(6) to conduct the business as a self-financing corporation and eliminate
  the need for appropriations or other sources of Government financing after
  enactment of this title;
  `(7) to maintain a reliable and economical domestic source of enrichment
  services;
  `(8) to conduct its activities in a manner consistent with the health and
  safety of the public;
  `(9) to continue to meet the paramount objectives of ensuring the Nation's
  common defense and security (including consideration of United States
  policies concerning nonproliferation of atomic weapons and other nonpeaceful
  uses of atomic energy); and
  `(10) to take all other lawful action in furtherance of the foregoing
  purposes.
`CHAPTER 23. CORPORATE OFFICES
  `SEC. 1301. CORPORATE OFFICES- The Corporation shall maintain an office
  for the service of process and papers in the District of Columbia, and
  shall be deemed, for purposes of venue in civil actions, to be a resident
  thereof. The Corporation may establish offices in such other place or places
  as it may deem necessary or appropriate in the conduct of its business.
`CHAPTER 24. POWER AND DUTIES OF THE CORPORATION
  `SEC. 1401. SPECIFIC CORPORATE POWERS AND DUTIES- The Corporation--
  `a. shall perform uranium enrichment or provide for uranium to be enriched
  by others at facilities of the Corporation; contracts in existence as of the
  date of enactment of this title between the Department and persons under
  contract to perform uranium enrichment and related services at facilities
  of the Department shall continue in effect as if the Corporation, rather
  than the Department, had executed these contracts;
  `b. shall conduct, or provide for the conduct of, research and development
  activities related to the isotopic separation of uranium as the Corporation
  deems necessary or advisable for purposes of maintaining the Corporation
  as a continuing, commercial enterprise operating on a profitable and
  efficient basis;
  `c. may acquire or distribute enriched uranium, feed material for uranium
  enrichment or depleted uranium in transactions with--
  `(1) persons licensed under sections 53, 63, 103, or 104 of title I in
  accordance with the licenses held by such persons;
  `(2) persons in accordance with, and within the period of, an agreement
  for cooperation arranged pursuant to section 123 of title I; or
  `(3) as otherwise authorized by law;
  `d. may--
  `(1) enter into contracts with persons licensed under section 53, 63,
  103, or 104 of title I for such periods of time as the Corporation may
  deem necessary or desirable, to provide uranium or uranium enrichment and
  related services; and
  `(2) enter into contracts to provide uranium or uranium enrichment and
  related services in accordance with, and within the period of, an agreement
  for cooperation arranged pursuant to section 123 of title I or as otherwise
  authorized by law;
  `e. shall sell to the Department as provided in this title, and without
  regard to section 57 e. of title I or the provisions of section 1535 of
  title 31, United States Code, such amounts of uranium or uranium enrichment
  and related services as the Department may determine from time to time are
  required: (1) for the Department to carry out Presidential direction and
  authorizations pursuant to section 91 of title I; and (2) for the conduct
  of other Department programs;
  `f. may grant licenses, both exclusive and nonexclusive, for the use of
  patent and patent applications owned by the Corporation, and establish and
  collect charges, in the form of royalties or otherwise, for utilization of
  Corporation-owned facilities, equipment, patents, and technical information
  of a proprietary nature pertaining to the Corporation's activities.
  `SEC. 1402. GENERAL POWERS OF THE CORPORATION- In order to accomplish the
  purposes of this title, the Corporation--
  `a. shall have perpetual succession unless dissolved by Act of Congress;
  `b. may adopt, alter, and use a corporate seal, which shall be judicially
  noticed;
  `c. may sue and be sued in its corporate name and be represented by its
  own attorneys in all judicial and administrative proceedings;
  `d. may indemnify the Administrator, officers, attorneys, agents and
  employees of the Corporation for liabilities and expenses incurred in
  connection with their corporate activities;
  `e. may adopt, amend, and repeal bylaws, rules, and regulations governing
  the manner in which its business may be conducted and the power granted
  to it by law may be exercised and enjoyed;
  `f. (1) may acquire, purchase, lease, and hold real and personal property
  including patents and proprietary data, as it deems necessary in the
  transaction of its business, and sell, lease, grant, and dispose of
  such real and personal property, as it deems necessary to effectuate the
  purposes of this title and without regard to the Federal Property and the
  Administrative Services Act of 1949, as amended;
  `(2) Purchases, contracts for the construction, maintenance, or management
  and operation of facilities and contracts for supplies or services, except
  personal services, made by the Corporation shall be made after advertising,
  in such manner and at such times sufficiently in advance of opening bids,
  as the Corporation shall determine to be adequate to insure notice and an
  opportunity for competition: Provided, That advertising shall not be required
  when the Corporation determines that the making of any such purchase or
  contract without advertising is necessary in the interest of furthering the
  purposes of this title, or that advertising is not reasonably practicable;
  `g. with the consent of the agency or government concerned, may utilize
  or employ the services or personnel of any Federal Government agency, or
  any State or local government, or voluntary or uncompensated personnel to
  perform such functions on its behalf as may appear desirable;
  `h. may enter into and perform such contracts, leases, cooperative
  agreements, or other transactions as may be necessary in the conduct of
  its business and on such terms as it may deem appropriate, with any agency
  or instrumentality of the United States, or with any State, territory or
  possession, or with any political subdivision thereof, or with any person,
  firm, association, or corporation;
  `i. may determine the character of and the necessity for its obligations
  and expenditures and the manner in which they shall be incurred, allowed,
  and paid, subject to the provisions of this title and other provisions of
  law specifically applicable to wholly owned Government corporations;
  `j. notwithstanding any other provision of law, and without need for
  further appropriation, may use monies, unexpended appropriations, revenues
  and receipts from operations, amounts received from obligations issued and
  other assets of the Corporation in accordance with section 1505, without
  fiscal year limitation, for the payment of expenses and other obligations
  incurred by the Corporation in carrying out its functions under, and within
  the requirements of, this title; and shall not be subject to apportionment
  under the provisions of subchapter II of chapter 15 of title 31, United
  States Code;
  `k. may settle and adjust claims held by the Corporation against other
  persons or parties and claims by other persons or parties against the
  Corporation;
  `l. may exercise, in the name of the United States, the power of eminent
  domain for the furtherance of the official purposes of the Corporation;
  `m. shall have the priority of the United States with respect to the
  payment of debts out of bankrupt, insolvent, and decedents' estates;
  `n. may define appropriate information as `Government Commercial Information'
  and exempt such information from mandatory release pursuant to section
  552(b)(3) of title 5, United States Code, when it is determined by the
  Administrator that such information if publicly released would harm the
  Corporation's legitimate commercial interests or those of a third party;
  `o. may request, and the Administrator of General Services, when requested,
  shall furnish the Corporation such services as he is authorized to provide
  agencies of the United States;
  `p. may accept gifts or donations of services, or of property, real,
  personal, mixed, tangible or intangible, in aid of any purposes herein
  authorized; and
  `q. may execute, in accordance with its bylaws, rules and regulations, all
  instruments necessary and appropriate in the exercise of any of its powers.
  `r. shall pay any settlement or judgment entered against it from the
  Corporation's own funds and not from the judgment fund (31 U.S.C. 1304). The
  provisions of the Federal Tort Claims Act (28 U.S.C. 1346(b) and 2671 et
  seq.) shall not apply to any claims arising from the activities of the
  Corporation after the effective date of this title: Provided, That this
  subsection shall not apply to liability or claims arising from a nuclear
  incident, if such incident occurs prior to the licensing of the Corporation's
  existing Gaseous Diffusion Facilities under section 1601 of this title.
  `SEC. 1403. Continuation of Contracts, Orders, Proceedings, and Regulations:
  `a. Except as provided elsewhere in this title, all contracts, agreements,
  and leases with the Department, and licenses, and privileges that have
  been afforded to the Department prior to the date of the enactment of
  this title and that relate to uranium enrichment, including all enrichment
  services contracts, power purchase contracts, and the December 18, 1987,
  settlement agreement with the Tennessee Valley Authority regarding payment
  of capacity charges under the Department's two power contracts with the
  Tennessee Valley Authority, shall continue in effect as if the Corporation
  had executed such contracts, agreements, or leases or had been afforded
  such licenses and privileges.
  `b. As related to the functions vested in the Corporation by this title, all
  orders, determinations, rules, regulations and privileges of the Department
  shall continue in effect and remain applicable to the Corporation until
  modified, terminated, superseded, set aside or revoked by the Corporation,
  by any court of competent jurisdiction, or by operation of law unless
  otherwise specifically provided in this title.
  `c. Except as provided elsewhere in this title, the transfer of functions
  related to and vested in the Corporation by this title shall not affect
  proceedings judicial or otherwise, relating to such functions which are
  pending at the time this title takes effect, and such proceedings shall
  be continued with the Corporation, as appropriate.
  `SEC. 1404. LIABILITIES- Except as provided elsewhere in this title, all
  liabilities attributable to operation of the uranium enrichment enterprise
  prior to the date of the enactment of this title shall remain direct
  liabilities of the Government of the United States; with regard to any
  claim seeking to impose such liability, section 1403 shall not be applicable
  and the United States shall be represented by the Department of Justice.
`CHAPTER 25. ORGANIZATION, FINANCE AND MANAGEMENT
  `SEC. 1501. Administrator:
  `a. The management of the Corporation shall be vested in an Administrator
  who shall be appointed by the President, by and with the advice and consent
  of the Senate, without regard to political affiliation. The Administrator
  shall be a person who, by reason of professional background and experience
  is specially qualified to manage the Corporation: Provided, however, That
  upon enactment of this title, the President shall appoint in existing
  officer or employee of the United States to act as Administrator until
  the office is filled.
  `b. The Administrator--
  `(1) shall be the chief executive officer of the Corporation and shall
  be responsible for the management and direction of the Corporation. The
  Administrator shall establish the offices, appoint the officers and employees
  of the Corporation (including attorneys), and define their responsibilities
  and duties. The Administrator shall appoint other officers and employees
  as may be required to conduct the Corporation's business;
  `(2) shall serve a term of six years but may be reappointed;
  `(3) shall, before taking office, take an oath to faithfully discharge
  the duties thereof;
  `(4) shall have compensation determined by the President based upon the
  recommendation of the Secretary and the Corporate Board as provided
  in section 1503(c), except that in the absence of such determination
  compensation shall be set at Executive Level I, as prescribed in section
  5312 of title 5, United States Code;
  `(5) shall be a citizen of the United States;
  `(6) shall designate an officer of the Corporation who shall be vested with
  the authority to act in the capacity of the Administrator in the event of
  absence or incapacity; and
  `(7) may be removed from office only by the President and only for neglect
  of duty or malfeasance in office. The President shall communicate the
  reasons for any such removal to both Houses of Congress at least thirty
  days prior to the effective date of such removal.
  `c. (1) The Secretary shall exercise general supervision over the
  Administrator only with respect to the activities of the Corporation
  involving--
  `(A) the Nation's common defense and security; and
  `(B) health, safety and the environment.
  `(2) The Administrator shall be solely responsible for the exercise of all
  powers and responsibilities that are committed to the Administrator under
  this title and that are not reserved to the Secretary under paragraph (1),
  and, notwithstanding the provisions of section 9104(a)(4) of title 31,
  United States Code, including the setting of the appropriate amount of,
  and paying, any dividend under section 1506(c) and all other fiscal matters.
  `SEC. 1502. DELEGATION- The Administrator may delegate to other officers
  or employees powers and duties assigned to the Corporation in order to
  achieve the purposes of this title.
  `SEC. 1503. CORPORATE BOARD- There is hereby established a Corporate Board
  appointed by the President which shall consist of five members, one of
  whom shall be designated as chairman. Members of the Corporate Board shall
  be individuals possessing high integrity, demonstrated accomplishment and
  broad experience in management and shall have strong backgrounds in science,
  engineering, business or finance. At least one member of the Corporate
  Board shall be, or previously have been, employed on a full-time basis in
  managing an electric utility:
  `a. (1) The specific responsibilities of the Corporate Board shall be to--
  `(A) review the Corporation's policies and performance and advise the
  Administrator and the Secretary on these matters; and
  `(B) advise the Administrator and the Secretary on any other such matters
  concerning the Corporation as may be referred to the Corporate Board.
  `(2) The Board shall have the right to recommend removal of the
  Administrator. In the event such recommendation is made, it shall be
  transmitted to the President by the Secretary, together with the Secretary's
  own recommendation on removal of the Administrator.
  `b. Members of the Board shall be provided access to all significant
  reports, memoranda, or other written communications generated or received
  by the Corporation. At the request of the Board, the Corporation shall
  make available to the Board all financial records, reports, files, papers,
  and memoranda of, or in use by, the Corporation.
  `c. When appropriate, the Corporate Board may make recommendations to the
  Secretary concerning the compensation to be received by the Administrator
  and up to ten officers of the Corporation who may receive compensation in
  excess of Executive Level II as provided in section 1504(a). The Secretary
  shall transmit such recommendations to the President together with the
  Secretary's own recommendations concerning compensation. In the event that
  less than three members of the Corporate Board are in office, recommendations
  concerning compensation may be made by the Secretary alone. The President
  shall have the power to enter into binding agreements concerning compensation
  to be received by the Administrator during his term of office and by the
  ten officers described in section 1504(a) during their term of employment,
  regardless of any recommendations received or not received under this title.
  `d. Except for initial appointments, members of the Corporate Board shall
  serve five-year terms. Each member of the Corporate Board shall be a citizen
  of the United States. No more than three members of the Board shall be
  members of any one political party. Of those first appointed, the chairman
  shall serve for the full five-year term; one member shall serve for a term
  of four years; one shall serve for a term of three years; one shall serve
  for a term of two years; and one shall serve for a term of one year.
  `e. Upon expiration of the initial term, each Corporate Board member
  appointed thereafter shall serve a term of five years. Upon the occurrence
  of a vacancy on the Board, the President shall appoint an individual to
  fill such vacancy for the remainder of the applicable term. Upon expiration
  of a term, a Board member may continue to serve up to a maximum of one
  year or until a successor shall have been appointed and assumed office,
  whichever occurs first.
  `f. The members of the Corporate Board in executing their duties shall
  be governed by the laws and regulations regarding conflicts of interest,
  but exempted from other provisions and authority prescribed by the Federal
  Advisory Committee Act, as amended (5 U.S.C. Appendix 2).
  `g. The Corporate Board shall meet at any time pursuant to the call of the
  Chairman and as provided by the bylaws of the Corporation, but not less
  than quarterly. The Administrator or his representative shall attend all
  meetings of the Corporate Board.
  `h. The Corporation shall compensate members of the Corporate Board at a
  per diem rate equivalent to Executive Level III, as defined in section 5314
  of title 5, United States Code, in addition to reimbursement of reasonable
  expenses incurred when engaged in the performance of duties vested in the
  Corporate Board. Any Corporate Board member who is otherwise a Federal
  employee shall not be eligible for compensation above reimbursement for
  reasonable expenses incurred while attending official meetings of the
  Corporation.
  `i. (1) The Corporate Board shall report at least annually to the
  Administrator on the performance of the Corporation and the issues that, in
  the opinion of the Board, require the attention of the Administrator. Any
  such report shall include such recommendations as the Board finds
  appropriate. A copy of any report under this subsection shall be transmitted
  promptly to the President, the Secretary, the Committee on Energy and Natural
  Resources of the Senate and to the Speaker of the House of Representatives.
  `(2) Within ninety days after the receipt of any report under this subsection
  the Administrator shall respond in writing to such report and provide an
  analysis of such recommendations of the Board contained in the report. Such
  response shall include plans for implementation of each recommendation
  or a justification for not implementing such recommendation. A copy of
  any response under this subsection shall be transmitted promptly to the
  President, the Secretary, the Committee on Energy and Natural Resources
  and to the Speaker of the House of Representatives.
  `SEC. 1504. EMPLOYEES OF THE CORPORATION- Officers and employees of the
  Corporation shall be officers and employees of the United States:
  `a. The Administrator shall appoint all officers, employees and agents of the
  Corporation as are deemed necessary to effect the provisions of this title
  without regard to any administratively imposed limits on personnel, and any
  such officer, employee or agent shall only be subject to the supervision
  of the Administrator. The Administrator shall fix all compensation in
  accordance with the comparable pay provisions of section 5301 of title 5,
  United States Code, with compensation levels not to exceed Executive Level
  II, as defined in section 5313 of title 5, United States Code: Provided, That
  the Administrator may, upon recommendation by the Secretary and the Corporate
  Board as provided in section 1503(c) and approval by the President, appoint
  up to ten officers whose compensation shall not exceed an amount which is
  20 per centum less than the compensation received by the Administrator,
  but not less than Executive Level II. The Administrator shall define the
  duties of all officers and employees and provide a system of organization
  inclusive of a personnel management system to fix responsibilities and
  promote efficiency. The Corporation shall assure that the personnel function
  and organization is consistent with the principles of section 2301(b) of
  title 5, United States Code, relating to merit system principles. Officers
  and employees of the Corporation shall be appointed, promoted and assigned
  on the basis of merit and fitness, and other personnel actions shall be
  consistent with the principles of fairness and due process but without
  regard to those provisions of title 5 of the United States Code governing
  appointments and other personnel actions in the competitive service.
  `b. Any Federal employee hired before January 1, 1984, who transfers to
  the Corporation and who on the day before the date of transfer is subject
  to the Federal Civil Service Retirement System (subchapter III of chapter
  83 of title 5, United States Code) shall remain within the coverage of
  such system unless he or she elects to be subject to the Federal Employees'
  Retirement System. For those employees remaining in the Federal Civil Service
  Retirement System, the Corporation shall withhold pay and shall pay into
  the Civil Service Retirement and Disability Fund the amounts specified in
  chapter 83 of title 5, United States Code. Employment by the Corporation
  without a break in continuity of service shall be considered to be employment
  by the United States Government for purposes of subchapter III of chapter
  83 of title 5, United States Code. Any employee of the Corporation who
  is not within the coverage of the Federal Civil Service Retirement System
  shall be subject to the Federal Employees' Retirement System (chapter 84
  of title 5, United States Code). The Corporation shall withhold pay and
  make such payments as are required under that retirement system. Further:
  `(1) Any employee who transfers to the Corporation under this section shall
  not be entitled to lump sum payments for unused annual leave under section
  5551 title 5, United States Code, but shall be credited by the Corporation
  with the unused annual leave at the time of transfer.
  `(2) An employee who does not transfer to the Corporation and who does not
  otherwise remain a Federal employee shall be entitled to all the rights
  and benefits available under Federal law for separated employees, except
  that severance pay shall not be payable to an employee who does not accept
  an offer of employment from the Corporation of work substantially similar
  to that performed by the employee for the Department.
  `c. This section does not affect a right or remedy of an officer, employee,
  or applicant for employment under a law prohibiting discrimination in
  employment in the Government on the basis of race, color, religion, age,
  sex, national origin, political affiliation, marital status, or handicap
  conditions.
  `d. Officers and employees of the Corporation shall be covered by chapter
  73 of title 5, United States Code, relating to suitability, security
  and conduct.
  `e. Compensation, benefits, and other terms and conditions of employment
  in effect immediately prior to the effective date of this section, whether
  provided by statute or by rules and regulations of the Department or the
  executive branch of the Government of the United States shall continue
  to apply to officers and employees who transfer to the Corporation from
  other Federal employment until changed by the Corporation in accordance
  with the provisions of this title.
  `f. The provisions of sections 3323(a) and 8344 of title 5, United States
  Code, or any other law prohibiting or limiting the reemployment of retired
  officers or employees or the simultaneous receipt of compensation and
  retired pay or annuities, shall not apply to officers and employees of the
  Corporation who have retired from or ceased previous government service
  prior to April 28, 1987.
  `SEC. 1505. TRANSFER OF PROPERTY TO THE CORPORATION- In order to enable
  the Corporation to exercise the powers and duties vested in it by this title:
  `a. The Secretary, as requested by the Administrator, is authorized
  and directed to transfer without charge to the Corporation all of the
  Department's right, title, or interest in and to, real or personal
  properties owned by the Department, or by the United States but under
  control or custody of the Department, which are related to and materially
  useful in the performance of the functions transferred by this title,
  including but not limited to the following--
  `(1) production facilities for uranium enrichment inclusive of real estate,
  buildings and other improvements at production sites and their related and
  supporting equipment: Provided, That facilities, real estate, improvements
  and equipment related to the Oak Ridge Gaseous Diffusion Plant in Oak Ridge,
  Tennessee, and to the gas centrifuge enrichment program shall not transfer
  under this paragraph except for diffusion cascades and related equipment
  needed by the Corporation for replacement parts: Provided further, That
  any enrichment facilities retained by the Department shall not be used to
  enrich uranium in competition with the Corporation. This paragraph shall
  not prejudice consideration of any site as a candidate site for future
  expansion or replacement of uranium enrichment capacity;
  `(2) at such time subsequent to the year 2000 as the Secretary determines
  that the Oak Ridge Gaseous Diffusion Plant should be decommissioned
  or decontaminated, or both, the Secretary shall convey without charge
  equipment and facilities relating to the Oak Ridge Gaseous Diffusion Plant
  not transferred in paragraph (1) to the Corporation;
  `(3) facilities, equipment, and materials for research and development
  activities related to the isotopic separation of uranium by the gaseous
  diffusion technology;
  `(4) the Department's stocks of preproduced enriched uranium, but excluding
  stocks of highly enriched uranium: Provided, That approximately two metric
  tons of the Department's highly enriched uranium shall be loaned to the
  Corporation as required for working inventory;
  `(5) the Department's stocks of feed materials for uranium enrichment
  except for the quantities allocated to the national defense activities of
  the Department as of the date of enactment;
  `(A) the Department's stockpile of enrichment tails existing as of the
  date of enactment, shall remain with the Department; and
  `(B) stocks of feed materials which remain the property of the Department
  under paragraph (5) shall remain in place at the enrichment plant sites. The
  Corporation shall have access to and use of these feed materials provided
  such quantities as are used are replaced, or credit given, if use by the
  Department is subsequently needed.
  `(6) all other facilities, equipment, materials, processes, patents,
  technical information of any kind, contracts, agreements, and leases to
  the extent these items concern the Corporation's functions and activities,
  except those items required for programs and activities of the Department
  and those items specifically excluded by this subsection.
The transfer authorized by this section is not subject to the requirements
of section 120(h) of the Comprehensive Environmental Response, Compensation
and Liability Act.
  `b. The Secretary is authorized and directed to grant to the Corporation
  without charge the Department's rights and access to the Atomic Vapor Laser
  Isotope Separation, hereinafter referred to as `AVLIS', technology and to
  provide on a reimbursable basis and at the request of the Corporation,
  the necessary cooperation and support of the Department to assure the
  commercial development and deployment of AVLIS or other technologies in
  a manner consistent with the intent of this title.
  `c. The Secretary is authorized and directed to grant the Corporation
  without charge, to the extent necessary or appropriate for the conduct
  of the Corporation's activities, licenses to practice or have practiced
  any inventions or discoveries (whether patented or unpatented) together
  with the right to use or have used any processes and technical information
  owned or controlled by the Department.
  `d. The Secretary is directed, without need of further appropriation, to
  transfer to the Corporation the unexpended balance of appropriations and
  other monies available to the Department (inclusive of funds set aside for
  accounts payable), and accounts receivable which are related to functions
  and activities acquired by the Corporation from the Department pursuant
  to this title, including all advance payments.
  `e. The President is authorized to provide for the transfer to the
  Corporation of the use, possession, and control of such other real and
  personal property of the United States which is reasonably related to the
  functions performed by the Corporation. Such transfers may be made by the
  President without charge as he may from time to time deem necessary and
  proper for achieving the purposes of this title.
  `f. Title to depleted uranium resulting from the enrichment services provided
  to the Department by the Corporation shall remain with the Department.
  `SEC. 1506. Capital Structure of the Corporation:
  `a. Upon commencement of operations of the Corporation, all liabilities
  then chargeable to unexpended balances of appropriations transferred under
  section 1505 shall become liabilities of the Corporation.
  `b. (1) The Corporation shall issue capital stock representing an equity
  investment equal to the book value of assets transferred to the Corporation,
  as reported in the Uranium Enrichment Annual Report for fiscal year 1987,
  modified to reflect continued depreciation and other usual changes that
  occur up to date of transfer. The Secretary of the Treasury shall hold
  such stock for the United States: Provided, That all rights and duties
  pertaining to management of the Corporation shall remain vested in the
  Administrator as specified in section 1501.
  `(2) The capital stock of the Corporation shall not be sold, transferred,
  or conveyed by the United States unless such disposition is specifically
  authorized by Federal law enacted after enactment of this title.
  `c. The Corporation shall pay into miscellaneous receipts of the Treasury
  of the United States or such other fund as provided by law, dividends
  on the capital stock, out of earnings of the Corporation, as a return on
  the investment represented by such stock. The Corporation shall pay such
  dividends out of earnings, unless there is an overriding need to retain
  these funds in furtherance of other corporate functions including but not
  limited to research and development, capital investments and establishment
  of cash reserves.
  `d. The Corporation shall repay within a twenty-year period the amount
  of $364,000,000 into miscellaneous receipts of the Treasury of the United
  States, or such other fund as provided by law with interest on the unpaid
  balance from the date of enactment of this title at a rate equal to the
  average yield on twenty-year Government obligations as determined by the
  Secretary of the Treasury on the date of enactment of this title. The money
  required to be repaid under this subsection is hereinafter referred to as
  the `Initial Debt'.
  `e. Receipt by the United States of the stock issued by the Corporation
  (including all rights appurtenant thereto) together with repayment of the
  Initial Debt and the fees established under section 1701.c shall constitute
  the sole recovery by the United States of previously unrecovered costs that
  have been incurred by the United States of uranium enrichment activities
  prior to enactment of this title.
  `SEC. 1507. Borrowing:
  `a. (1) The Corporation is authorized to issue and sell bonds, notes, and
  other evidences of indebtedness (hereinafter collectively referred to as
  `bonds') in an amount not exceeding $2,500,000,000 outstanding at any one
  time to assist in financing its activities and to refund such bonds. The
  principal of and interest on said bonds shall be payable from revenues of
  the Corporation.
  `(2) Notwithstanding any other provision of law, the Corporation may
  pledge and use its revenues for payment of the principal of and interest
  on said bonds, for purchase or redemption thereof, and for other purposes
  incidental thereto, including creation of reserve funds and other funds
  which may be similarly pledged and used, to such extent and in such manner
  as it may deem necessary or desirable.
  `(3) Notwithstanding any other provision of law, the Corporation is
  authorized to enter into binding convenants with the holders of said
  bonds--and with the trustee, if any--under any indenture, resolution,
  or other agreement entered into in connection with the issuance thereof
  with respect to the establishment of reserve funds and other funds,
  stipulations concerning the subsequent issuance of bonds, and such other
  matters, not inconsistent with this title, as the Corporation may deem
  necessary or desirable to enhance the marketability of said bonds.
  `(4) Bonds issued by the Corporation hereunder shall not be obligations
  of, nor shall payments of the principal thereof or interest thereon be
  guaranteed by, the United States.
  `b. Bonds issued by the Corporation under this section shall be negotiable
  instruments unless otherwise specified therein, shall be in such forms and
  denominations, shall be sold at such times and in such amounts, shall mature
  at such time or times not more than thirty years from their respective
  dates, shall be sold at such prices, shall bear such rates of interest,
  may be redeemable before maturity at the option of the Corporation in
  such manner and at such times and redemption premiums, may be entitled
  to such priorities of claim on the Corporation's revenues with respect
  to principal and interest payments, and shall be subject to such other
  terms and conditions, as the Corporation may determine: Provided, That at
  least fifteen days before selling each issue of bonds hereunder (exclusive
  of any commitment shorter than one year) the Corporation shall advise
  the Secretary of the Treasury as to the amount, proposed date of sale,
  maturities, terms and conditions and expected rates of interest of the
  proposed issue in the fullest detail possible. The Corporation shall not
  be subject to the provisions of section 9108 of title 31, United States
  Code. The Corporation shall be deemed part of an executive department
  or an independent establishment of the United States for purposes of the
  provisions of section 78c(c) of title 15, United States Code.
  `c. Bonds issued by the Corporation hereunder shall be lawful investments
  and may be accepted as security for all fiduciary, trust, and public funds,
  the investment or deposit of which shall be under the authority or control
  of any officer or agency of the United States. The Secretary of the Treasury
  or any other officer or agency having authority over or control of any such
  fiduciary, trust, or public funds, may at any time sell any of the bonds
  of the Corporation acquired by them under this section: Provided, That the
  Corporation shall not issue or sell any bonds to the Federal Financing Bank.
  `SEC. 1508. PRICING:
  `a. For purposes of maximizing the long-term economic value of the
  Corporation to the United States Government, the Corporation shall establish
  prices for its products, materials and services provided to customers other
  than the Department on a basis that will, over the long term, allow it
  to recover its costs for providing the products, materials and services;
  repay the Initial Debt; recover costs of decontamination, decommissioning
  and remedial action; and attain the normal business objectives of a
  profitmaking Corporation.
  `b. The Corporation shall establish prices for low assay enrichment services
  and other products, materials, and services provided the Department
  on a basis that will allow it to recover its costs on a yearly basis
  for providing such low assay enrichment services, products, materials,
  and services, including depreciation and the cost of decontamination,
  decommissioning and remedial action, but excluding repayment of the
  Initial Debt and profit. In establishing such prices, the base charge paid
  by the Department in any given year shall not exceed the average base
  charge paid by customers other than the Department: Provided, however,
  That if the imposition of such average base charges as a limitation on
  the base charge paid by the Department in a given year does not permit
  the Corporation to fully recover its costs for providing such products,
  materials and services to the Department then, in subsequent years, the
  Corporation shall include such unrecovered costs in its prices charged
  the Department. Base charge shall mean the amount paid by a customer per
  separative work unit for low assay enrichment services during a given year
  (exclusive of any credits received under a voluntary overfeeding program),
  less the portion of such amount which represents the cost of decontamination
  and decommissioning and remedial action. The average base charge paid by
  customers other than the Department shall be determined by dividing the
  estimated total dollar amount of low assay enrichment services sales to
  customers other than the Department during a given year by the estimated
  amount of separative work units sold to customers other than the Department
  during that year. Adjustments between estimated and actual amounts shall
  be made upon receipt of actual sales data.
  `c. The Corporation shall establish prices to the Department for high assay
  enrichment services on a basis that will allow it to recover its costs,
  on a yearly basis, for providing the products, materials or services,
  including depreciation and the costs of decontamination, decommissioning,
  and remedial action concerning enrichment property, but excluding repayment
  of the Initial Debt and profit. If the Department does not request any
  enrichment services in a given year, the Department shall reimburse the
  Corporation for costs required to maintain the minimum level of operation
  of the high assay production facility.
  `d. (1) In accordance with the cost responsibilities defined in paragraphs
  (3) and (4), the Corporation beginning in fiscal year 1996 shall recover
  from its customers other than the Department in the prices and charges
  established in accordance with subsection (a), amounts that will be
  sufficient to pay for the costs of decommissioning, decontamination and
  remedial action for the various property of the Corporation, including
  property transferred under section 1505(a) at any time. The Corporation
  shall begin recovering such costs in prices and charges to the Department
  at such time as this title takes effect. Such costs shall be based on
  the point in time that such decommissioning, decontamination and remedial
  action are to be undertaken and accomplished: Provided, That by the year
  2000 the Corporation shall have recovered and deposited in the Uranium
  Enrichment Decontamination and Decommissioning Corporate Fund and the
  Uranium Enrichment Decontamination and Decommissioning Base Fund 50 per
  centum of the estimated total costs of decontamination and decommissioning
  of all property transferred or to be transferred to the Corporation under
  section 1505, including the Oak Ridge Gaseous Diffusion Plant.
  `(2) In order to meet the objective defined in paragraph (1), the
  Corporation shall periodically estimate the anticipated or actual costs
  of decommissioning and decontamination. Such estimates shall reflect any
  changes in assumptions or expectations relevant to meeting such objective,
  including, but not limited to, any changes in applicable environmental
  requirements. Such estimates shall be reviewed at least every two years.
  `(3) For purposes of enabling the Corporation to meet the objective
  defined in paragraph (1) with respect to the Oak Ridge Gaseous Diffusion
  Plant, the Secretary shall periodically estimate the anticipated
  costs of decontamination and decommissioning and the time at which such
  decontamination and decommissioning is to be accomplished. Such estimates
  shall reflect any changes in assumptions or expectations relevant to
  meeting such objective, including but not limited to, any changes in
  applicable environmental requirements. The Secretary shall review such
  estimates every two years and convey this information to the Corporation.
  `(4) With respect to property that has been used in the production of
  low-assay separative work,
  `(A) The costs of decommissioning, decontamination and remedial action that
  shall be recoverable from customers or persons other than the Department
  in prices, charges and fees shall be in the same ratio to the total costs
  of decommissioning, decontamination and remedial action for the property in
  question as the production of separative work over the life of such property
  for commercial customers bears to the total production of separative work
  over the life of such property.
  `(B) All other costs of decommissioning, decontamination and remedial action
  for such property shall be recovered in prices and charges to the Department.
  `(5) With respect to property that has been used solely in the production of
  high-assay separative work, all costs of decommissioning, decontamination and
  remedial action shall be recovered in prices and charges to the Department.
  `SEC. 1509. AUDITS- In fiscal years during which an audit is not performed
  by the Comptroller General in accordance with the provisions of section
  9105 of title 31, United States Code, the financial transactions of the
  Corporation shall be audited by an independent firm or firms of nationally
  recognized certified public accountants who shall prepare such audits using
  standards appropriate for commercial corporate transactions. The fiscal
  year of the Corporation shall conform to the fiscal year of the United
  States. The General Accounting Office shall review such audits annually,
  and to the extent necessary, cause there to be a further examination of
  the Corporation using standards for commercial corporate transactions. Such
  audits shall be conducted at the place or places where the accounts of the
  Corporation are established and maintained. All books, financial records,
  reports, files, papers, memoranda, and other property of, or in use by,
  the Corporation shall be made available to the person or persons authorized
  to conduct audits in accordance with the provisions of this section.
  `SEC. 1510. Reports:
  `a. The Corporation shall prepare an annual report of its activities. This
  report shall contain--
  `(1) a general description of the Corporation's operations;
  `(2) a summary of the Corporation's operating and financial performance,
  including an explanation of the decision to pay or not pay dividends; and
  `(3) copies of audit reports prepared in conformance with section 1509 of
  this title and the provisions of the Government Corporation Control Act,
  as amended.
  `b. A copy of the annual report shall be provided to the President, the
  Secretary, the Committee on Energy and Natural Resources of the Senate, and
  the appropriate committees of the House of Representatives. Such reports
  shall be completed not later than ninety days following the close of each
  fiscal year and shall accurately reflect the financial position of the
  Corporation at fiscal year end, inclusive of any impairment of capital or
  ability of the Corporation to comply with the provisions of this title.
  `SEC. 1511. CONTROL OF INFORMATION:
  `a. The term `Commission' shall be deemed to include the Corporation
  wherever such term appears in section 141 and subsections a. and b. of
  section 142 of title I.
  `b. No contracts or arrangements shall be made, nor any contract continued
  in effect, under section 1401, 1402, 1403, or 1404, unless the person with
  whom such contract or arrangement is made, or the contractor or prospective
  contractor, agrees in writing not to permit any individual to have access to
  Restricted Data, as defined in section 11 y. of title I, until the Office
  of Personnel Management shall have made an investigation and report to the
  Corporation on the character, associations, and loyalty of such individual,
  and the Corporation shall have determined that permitting such person to have
  access to restricted data will not endanger the common defense and security.
  `c. The restrictions detailed in subsections b., c., d., e., f., g., and
  h., of section 145 of title I shall be deemed to apply to the Corporation
  where they refer to the Commission or a majority of the members of the
  Commission, and to the Administrator where they refer to the General Manager.
  `d. The Administrator shall keep the appropriate congressional committees
  fully and currently informed with respect to all of the Corporation's
  activities. To the extent consistent with the other provisions of this
  section, the Corporation shall make available to any of such committees
  all books, financial records, reports, files, papers, memoranda, or other
  information possessed by the Corporation upon receiving a request for such
  information from the chairman of such committee.
  `e. Whenever the Corporation submits to the President, or the Office of
  Management and Budget, any budget, legislative recommendation, testimony,
  or comments on legislation, prepared for submission to the Congress, the
  Corporation shall concurrently transmit a copy thereof to the appropriate
  committees of Congress.
  `f. The Corporation shall have no power to control or restrict the
  dissemination of information other than as granted by this or any other law.
  `SEC. 1512. PATENTS AND INVENTIONS:
  `a. The term `Commission' shall be deemed to include the Corporation
  wherever such term appears in section 152, 153b. (1), and 158 of title
  I. The Corporation shall pay such royalty fees for patents licensed to
  it under section 153 b. (1) of title I as are paid by the Department
  under that provision. Nothing in title I or this title shall affect the
  right of the Corporation to require that patents granted on inventions,
  that have been conceived or first reduced to practice during the course
  of research or operations of, or financed by the Corporation, be assigned
  to the Corporation.
  `b. The Department shall notify the Corporation of all reports heretofore
  or hereafter filed with it under subsection 151 c. of title I and all
  applications for patents heretofore or hereafter filed with the Commissioner
  of Patents of which the Department has notice under subsection 151 d. of
  title I or otherwise, whenever such reports or applications involve matters
  pertaining to the functions or responsibilities of the Corporation in
  accordance with this title. The Department shall make all such reports
  available to the Corporation, and the Commissioner of Patents shall
  provide the Corporation access to all such applications. All reports and
  applications to which access is so provided shall be kept in confidence
  by the Corporation, and no information concerning the same given without
  authority of the inventor or owner unless necessary to carry out the
  provisions of any Act of Congress.
  `c. The Corporation, without regard for any of the conditions specified
  in paragraph 153 c. (1), (2), (3), or (4) of title I, may at any time
  make application to the Department for a patent license for the use of
  an invention or discovery useful in the production or utilization of
  special nuclear material or atomic energy covered by a patent when such
  patent has not been declared to be affected with the public interest under
  subsection 153 b. (1) of title I and when use of such patent is within the
  Corporation's authority. Any such application shall constitute an application
  under subsection 153 c. of title I subject, except as specified above, to
  all the provisions of subsections 153 c., d., e., f., g., and h., of title I.
  `d. With respect to the Corporation's functions under this title, section
  158 of title I shall be deemed to include the Corporation within the phrase,
  `any other licensee' in the first sentence thereof and within the phrase
  `such licensee' in the second sentence thereof.
  `e. The Corporation shall not be liable directly or indirectly for any
  damages or financial responsibility with respect to secrecy orders imposed
  under section 181 of title 35, United States Code, through 187.
  `f. The Corporation shall not be liable or responsible for any payments
  made or awards under subsection 157 b.(3) of title I, or any settlements
  or judgments involving claims for alleged patent infringement except to
  the extent that any such awards, settlements or judgments are attributable
  to activities of the Corporation after the effective date of this title.
  `g. The Corporation shall keep currently informed as to matters affecting
  its rights and responsibilities under chapter 13 of title I as modified by
  this section and shall take all appropriate action to avail itself of such
  rights and satisfy such responsibilities. The Department in discharging
  its responsibilities under chapter 13 of title I shall exercise diligence
  in informing the Corporation of matters affecting the responsibilities and
  jurisdiction of the Corporation and seeking and following as appropriate
  the advice and recommendation of the Corporation in such matters.
`CHAPTER 26. LICENSING, TAXATION, AND MISCELLANEOUS PROVISIONS
  `SEC. 1601. Licensing:
  `a. Notwithstanding any other provision of law, with respect solely to
  facilities, equipment and materials for activities related to the isotopic
  separation of uranium by the gaseous diffusion technology at facilities
  in existence as of the date of enactment of this title, the Corporation
  and its contractors are hereby exempted from the licensing requirements
  and prohibitions of sections 57, 62, 81 and other provisions of title I,
  to the same extent as the Department and its contractors are exempt in
  regard to the Department's own functions and activities. Such exemption
  shall remain in effect unless and until the Corporation and its contractors
  receive all necessary licenses for such facilities, equipment and materials
  as are required under title I.
  `b. Within two years of the enactment of this title, the Commission shall
  promulgate regulations or issue other regulatory guidance under title I
  for the licensing of facilities described in subsection (a) that employ
  the gaseous diffusion technology.
  `c. Within one year after the promulgation of regulations or the issuance
  of other regulatory guidance under subsection (b), the Corporation and
  its contractors shall make necessary applications for and otherwise
  seek to obtain such licenses as will remove the exemption provided under
  subsection (a). As part of its application, the Corporation shall submit
  an Environmental Impact Statement in accordance with the requirements of
  the National Environmental Policy Act. The Commission shall adopt this
  statement to the extent practicable under the National Environmental
  Policy Act. In preparing such statement, the Corporation, and in making
  any licensing decision, the Commission, shall not consider the need for
  such facilities, alternatives to such facilities, or the costs compared
  to the benefits of such facilities. The Commission shall act on licensing
  requests by the Corporation in a timely manner.
  `d. The Corporation shall not transfer or deliver any source, special
  nuclear or byproduct materials or production or utilization facilities,
  as defined in title I, to any person who is not properly qualified or
  licensed under the provisions of title I.
  `e. The Corporation shall be subject to the regulatory jurisdiction of the
  Commission and the Department of Transportation with respect to the packaging
  and transportation of source, special nuclear and byproduct materials.
  `SEC. 1602. Exemption From Taxation and Payments in Lieu of Taxes:
  `a. In order to render financial assistance to those States and localities
  in which the facilities of the Corporation are located, beginning in fiscal
  year 1996, the Corporation is authorized and directed to make payments to
  State and local governments as provided in this section. Such payments shall
  be in lieu of any and all State and local taxes on the real and personal
  property, activities, and income of the Corporation. All property of the
  Corporation its activities and income are expressly exempted from taxation
  in any manner or form by any State, county, or other local government
  entity. The activities of the Corporation for this purpose shall include
  the activities of organizations pursuant to cost-type contracts with the
  Corporation to manage, operate, and maintain its facilities. The income
  of the Corporation shall include income received by such organizations
  for the account of the Corporation. The income of the Corporation shall
  not include income received by such organizations for their own accounts
  and such income shall not be exempt from taxation.
  `b. Beginning in fiscal year 1996, the Corporation shall make annual
  payments, in amounts determined by the Corporation to be fair and reasonable,
  to the State and local governmental agencies having tax jurisdiction in
  any area where facilities of the Corporation are located. In making such
  determinations, the Corporation shall be guided by the following criteria:
  `(1) Amounts paid shall not exceed the tax payments that would be made
  by a private industrial corporation owning similar facilities and engaged
  in similar activities at the same location: Provided, however, That there
  shall be excluded any amount that would be payable as a tax on net income.
  `(2) The Corporation shall take into account the customs and practices
  prevailing in the area with respect to appraisal, assessment, and
  classification of industrial property and any special considerations
  extended to large-scale industrial operations.
  `(3) No amount shall be included to the extent that any tax unfairly
  discriminates against the class of taxpayers of which the Corporation
  would be a member if it were a private industrial corporation, compared
  with other taxpayers or classes of taxpayers.
  `(4) Following the commencement of payments in fiscal year 1996, no
  payment made to any taxing authority for any period shall be less than
  the payments which would have been made to such taxing authority for the
  same period by the Department and its cost-type contractors on behalf of
  the Department with respect to property that has been transferred to the
  Corporation under section 1505 and which would have been attributable to
  the ownership, management operation, and maintenance of the Department's
  uranium enrichment facilities, applying the laws and policies prevailing
  immediately to the enactment of this title.
  `c. Payments shall be made by the Corporation at the time when payments of
  taxes by taxpayers to each taxing authority are due and payable: Provided,
  That no payment shall be made to the extent that the tax would apply to
  a period prior to fiscal year 1996.
  `d. The determination by the Corporation of the amounts due hereunder
  shall be final and conclusive.
  `SEC. 1603. Miscellaneous Applicability of Title I:
  `a. Any references to the term `Commission' or to the Department in sections
  105 b., 110 a., 161 c., 161 k., 161 q., 165 a., 221 a., 229, 230, and 232
  of title I shall be deemed to include the Corporation.
  `b. Section 188 of title I shall apply to licensed facilities of the
  Corporation. For purposes of applying such section to facilities of the
  Corporation:
  `(1) The term `Commission' shall be deemed to refer to the Secretary;
  `(2) There shall be no requirement for payment of just compensation to
  the Corporation, and receipts from operation of the facility in question
  shall continue to accrue to the benefit of the Corporation; and
  `(3) The Secretary shall have the discretion to determine how and by whom
  the facility in question will be operated.
  `SEC. 1604. COOPERATION WITH OTHER AGENCIES- The Corporation is empowered
  to use with their consent the available services, equipment, personnel, and
  facilities of other civilian or military agencies and instrumentalities
  of the Federal Government, on a reimbursable basis and on a similar
  basis to cooperate with such other agencies and instrumentalities in
  the establishment and use of services, equipment, and facilities of the
  Corporation. Further, the Corporation may confer with and avail itself of
  the cooperation, services, records, and facilities of State, territorial,
  municipal or other local agencies.
  `SEC. 1605. Applicability of Antitrust Laws:
  `a. The Corporation shall conduct its activities in a manner consistent
  with the policies expressed in the antitrust laws, except as required by
  the public interest.
  `b. As used in this subsection, the term `antitrust laws' means:
  `(1) The Act entitled: `An Act to protect trade and commerce against
  unlawful restraints and monopolies,' approved July 2, 1890 (15 U.S.C. 1-7),
  as amended;
  `(2) The Act entitled, `An Act to supplement existing laws against unlawful
  restraints and monopolies, and for other purposes,' approved October 15,
  1914 (15 U.S.C. 12-27), as amended;
  `(3) Sections 73 and 74 of the Act entitled, `An Act to reduce taxation,
  to provide revenue for the Government, and for other purposes,' approved
  August 27, 1894 (15 U.S.C. 8 and 9), as amended; and
  `(4) The Act of June 19, 1936, chapter 592 (15 U.S.C. 13, 13a, 13b, and 21a).
  `SEC. 1606. NUCLEAR HAZARD INDEMNIFICATION- The Administrator shall have
  the same authority to indemnify the contractors of the Corporation as
  the Secretary has to indemnify contractors under section 170 d. of title
  I. Except that with respect to any licenses issued to the Corporation
  by the Commission, the Commission shall treat the Corporation and its
  contractors as its licensees for the purposes of section 170 of this Act.
  `SEC. 1607. INTENT- It is hereby declared to be the intent of this title to
  aid the Corporation in discharging its responsibilities under this title
  by providing it with adequate authority and administrative flexibility
  to obtain necessary funds with which to assure the maximum achievement of
  the purposes hereof as provided herein, and this title shall be construed
  liberally to effectuate such intent.
  `SEC. 1608. Report:
  `a. Three years after enactment of this title or January, 1993, whichever
  is later, the Administrator shall submit to the President and to Congress
  an interim report setting forth the views and recommendations of the
  Administrator regarding transfer of the functions, powers, duties, and
  assets of the Corporation to private ownership. Five years after enactment
  of this title, the Administrator shall submit to the President and the
  Congress a final report setting forth the views and recommendations of
  the Administrator regarding transfer of the functions, powers, duties,
  and assets of the Corporation to private ownership. If the Administrator,
  in the final report, recommends such transfers, the report shall include
  a plan for implementation of the transfers.
  `b. Within one hundred and eighty days after receipt of the final report
  under subsection (a), the President shall transmit to Congress his
  recommendations regarding the report, including a plan for implementation
  of any transfers recommended by the President and any recommendations for
  legislation necessary to effectuate such transfers.
`CHAPTER 27. DECONTAMINATION AND DECOMMISSIONING
  `SEC. 1701. Establishment:
  `a. ESTABLISHMENT OF CORPORATE FUND- (1) There is hereby established
  in the Treasury of the United States an account of the Corporation to
  be known as the Uranium Enrichment Decontamination and Decommissioning
  Corporate Fund (hereinafter referred to in this chapter as the Corporate
  `Fund'). In accordance with section 1402(j), such account and any funds
  deposited therein, shall be available to the Corporation for the exclusive
  purpose of carrying out the purposes of this chapter.
  `(2) The Corporate Fund shall consist of:
  `(A) Amounts paid into it by the Corporation in accordance with section
  1702. a.; and
  `(B) Any interest earned under subsection (b)(2).
  `b. ADMINISTRATION OF CORPORATE FUND- (1) The Secretary of the Treasury
  shall hold the Corporate Fund and, after consultation with the Corporation,
  annually report to the Congress on the financial condition and operations
  of the Corporate Fund during the preceding fiscal year.
  `(2) At the direction of the Corporation, the Secretary of the Treasury
  shall invest amounts contained within such Fund in obligations of the
  United States:
  `(A) Having maturities determined by the Secretary of the Treasury to be
  appropriate to the needs of the Fund, as determined by the Corporation; and
  `(B) Bearing interest at rates determined to be appropriate by the Secretary
  of the Treasury, taking into consideration the current average market yield
  on outstanding marketable obligations of the United States with remaining
  periods to maturity comparable to such obligations.
  `(3) At the request of the Corporation, the Secretary of the Treasury
  shall sell such obligations and credit the proceeds to the Corporate Fund.
  `c. ESTABLISHMENT OF FEE AND BASE FUND- (1) Beginning in fiscal year
  1991 and lasting through fiscal year 1995, each licensee of a civilian
  nuclear power reactor shall pay a fee of .20 mills per kilowatt hour of
  net electricity generated by such reactor. Such fee shall be collected
  by the Corporation and is established for purposes of reimbursing the
  Corporation for the costs of decontaminating and decommissioning uranium
  enrichment facilities of the Corporation which costs are attributable to
  the provision of separative work and other enrichment products, materials
  and services to commercial customers prior to the enactment of this title.
  `(2) There is hereby established in the Treasury of the United States
  an account of the Corporation to be known as the Uranium Enrichment
  Decontamination and Decommissioning Base Fund (hereinafter referred to in
  this chapter as the `Base Fund'). Notwithstanding any other provision of
  law, the Base Fund and all monies deposited therein shall be subject to
  appropriation and shall be made available exclusively to the Corporation
  for purposes of carrying out the purposes of this chapter.
  `(3) The Base Fund shall consist of:
  `(A) Amounts paid into it by the Corporation in accordance with section
  1702.b.; and
  `(B) Any interest earned under subsection d.(2).
  `d. ADMINISTRATION OF BASE FUND- (1) The Secretary of the Treasury shall
  hold the Base Fund and annually report to the Congress on the financial
  condition and operations of the Base Fund during the preceding fiscal year.
  `(2) The Secretary of the Treasury shall invest amounts contained within
  such Base Fund in obligations of the United States:
  `(A) Having maturities determined by the Secretary of the Treasury, in
  consultation with the Corporation to be appropriate to the needs of the
  Base Fund; and
  `(B) Bearing interest at rates determined to be appropriate by the Secretary
  of the Treasury, taking into consideration the current average market yield
  on outstanding marketable obligations of the United States with remaining
  periods to maturity comparable to such obligations.
  `(3) The Secretary of the Treasury shall sell such obligations and credit
  the proceeds to the Base Fund as made necessary by appropriations out of
  the Base Fund to the Corporation.
  `SEC. 1702. DEPOSITS- a. Within sixty days of the end of each fiscal year,
  the Corporation shall make a payment into the Corporate Fund in an amount
  equal to the costs of decontamination and decommissioning that have been
  recovered during such fiscal year by the Corporation in its prices and
  charges established in accordance with section 1508 for products, materials,
  and services.
  `b. As soon as practicable following enactment of this title, the Corporation
  shall establish procedures for the collection and payment of fees established
  under section 1701.c. Such fees shall be paid by licensees on a quarterly
  basis during each fiscal year and upon receipt by the Corporation shall
  be deposited in the Base Fund.
  `SEC. 1703. Performance and Disbursements:
  `a. When the Corporation determines that particular property should be
  decommissioned or decontaminated, or both, or with respect to the Oak
  Ridge Gaseous Diffusion Plant at such time as the plant is conveyed to
  the Corporation, the Corporation shall enter into a contract for the
  performance of such decommissioning and decontamination.
  `b. The Corporation shall pay for the costs of such decommissioning and
  decontamination out of amounts contained within the Corporate Fund and
  such amounts as are appropriated to it out of the Base Fund.
  SEC. 4113. TREATMENT OF THE CORPORATION AS BEING PRIVATELY-OWNED FOR PURPOSES
  OF THE APPLICABILITY OF ENVIRONMENTAL AND OCCUPATIONAL SAFETY LAWS- The
  United States Enrichment Corporation shall be subject to Federal, State
  and local environmental laws and the Occupational Safety and Health Act
  (29 U.S.C. 651-678) to the same extent as is the Department of Energy as
  of the date of enactment. After four years from the date of enactment of
  this title, the United States Enrichment Corporation shall become subject
  to such laws to the same extent as a privately-owned corporation, unless
  the President determines that additional time is necessary to achieve the
  purposes of title II of the Atomic Energy Act of 1954, as amended.
  SEC. 4114. MISCELLANEOUS PROVISIONS- (a) Section 9101(3) of title 31,
  United States Code (relating to the definition of `wholly-owned Government
  corporation') is amended by adding at the end of the following: `(N)
  United States Enrichment Corporation.'.
  (b) In subsection 41 a. of the Atomic Energy Act of 1954, as amended,
  the word `or' appearing before the numeral `(2)' is deleted, a semicolon
  is substituted for a period at the end of the subsection and the following
  new paragraph is added: `or (3) are owned by the United States Enrichment
  Corporation.'.
  (c) In subsection 53 c. (1) of the Atomic Energy Act of 1954, as amended,
  the word `or' is inserted before the word `grant' and the phrase `or
  through the provision of production or enrichment services' is deleted in
  both places where it appears in such subsection.
  (d) The Atomic Energy Act of 1954, as amended, is further amended:
  (1) By adding before the period at the end of the definition of the term
  `production facility' in section 11 v. a colon and the following: `Provided,
  however, That as the term is used in chapters 10 and 16 of this Act, other
  than with respect to export of a uranium enrichment production facility,
  it shall not include any equipment or device, or important component part
  especially designed therefor, capable of separating the isotopes of uranium
  or enriching uranium in the isotope 235';
  (2) By striking the period at the end of section 161 b. and adding the
  following: `; in addition, the Commission shall prescribe such regulations
  or orders as may be necessary or desirable to promote the Nation's common
  defense and security with regard to control, ownership or possession of
  any equipment or device, or important component part especially designed
  therefor, capable of separating the isotopes of uranium or enriching
  uranium in the isotope 235;';
  (3) By striking the phrase `section 103 or 104' in section 41 a. (2)
  and inserting in lieu thereof `this title'; and
  (4) In section 236 by striking the word `or' following paragraph (2)
  and adding after paragraph (3) `or (4) any uranium enrichment facility
  licensed by the Commission;'.
  (5) In section 318(1) by striking the period after `activities' and by
  adding the following:
  `(D) any facility owned by the United States Enrichment Corporation.'.
  (e) Subsection 905(g)(1) of title II, United States Code, is amended to
  include `United States Enrichment Corporation' at the end thereof.
  (f) Section 306 of title III of the Energy and Water Development
  Appropriations Act, 1988, Public Law 100-202, is repealed.
  SEC. 4115. LIMITATION ON EXPENDITURES- (a) Notwithstanding any other
  provision of law, for fiscal year 1991 total expenditures of the United
  States Enrichment Corporation other than payments in lieu of taxes and
  intragovernmental transfers shall not exceed $1,289,000,000 and the
  Corporation shall pay into miscellaneous receipts of the Treasury of the
  United States dividends in the amount of at least $21,000,000.
  (b) Notwithstanding any other provision of law, during fiscal years
  1992 through 1995 total expenditures of the United States Enrichment
  Corporation other than payments in lieu of taxes and intragovernmental
  transfers shall not exceed an amount which is $323,000,000 less than total
  receipts from commercial customers during such years, and during such years
  the Corporation shall pay into miscellaneous receipts of the Treasury of
  the United States dividends in the amount of at least  $323,000,000.
  SEC. 4116. SEVERABILITY- In any provision of this subtitle, or the
  application of any provisions to any entity, person or circumstance,
  shall for any reason be adjudged by a court of competent jurisdiction to
  be invalid, the remainder of this subtitle, or the application of the same
  shall not be thereby affected.
  SEC. 4117. EFFECTIVE DATE- Except as otherwise provided, all provisions of
  this subtitle shall take effect on the day following the end of the first
  full fiscal year quarter following the enactment of this act; Provided,
  however, That the Administrator or Acting Administrator of the United
  States Enrichment Corporation may immediately exercise the management
  responsibilities and powers of subsection 1501 (a) of the Atomic Energy
  Act of 1954, as amended by this Act and previous Acts.
Subtitle C
CHAPTER 1--SHORT TITLE, FINDINGS AND PURPOSE, DEFINITIONS
SEC. 4201. TITLE.
  This subtitle may be cited as the `Uranium Security and Tailings Reclamation
  Act of 1989'.
SEC. 4202. FINDINGS AND PURPOSE.
  (a) FINDINGS- The Congress finds for purposes of this subtitle that--
  (1) the United States uranium industry has long been recognized as vital
  to United States energy independence and as essential to United States
  national security, but has suffered a drastic economic setback, including
  a 90 per centum reduction in employment, closure of almost all mines and
  mills, more than a 75 percent drop in production, and a permanent loss of
  uranium reserves;
  (2) during the remainder of this century approximately 20 per centum of
  United States electricity is expected to be produced from uranium fueled
  powerplants owned by domestic electric utilities;
  (3) the United States has been the leading uranium producing nation and
  holds extensive proven reserves of natural uranium that offer the potential
  for secure sources of future supply;
  (4) a variety of economic factors, policies of foreign governments,
  foreign export practices, the discovery and development of low cost
  foreign reserves, new Federal regulatory requirements, and cancellation
  of nuclear powerplants have caused most United States producers to close
  or suspend operations over the past six years and have resulted in the
  domestic uranium industry being found `not viable' by the Secretary under
  provisions of the Atomic Energy Act of 1954, as amended;
  (5) providing assistance to the domestic uranium industry is essential to--
  (A) preclude an undue threat from foreign supply disruptions that could
  hinder the Nation's common defense and security,
  (B) assure an adequate long-term supply of domestic uranium for the
  Nation's nuclear power program to preclude an undue threat from foreign
  supply disruptions or price controls, and
  (C) aid in the Nation's balance-of-trade payments through foreign sales;
  (6) the Uranium Mill Tailings Radiation Control Act of 1978 (42
  U.S.C. 7901-7942);
  (A) was enacted to provide for the reclamation and regulation of uranium
  and thorium mill tailings; and
  (B) did not provide for a Federal contribution for the reclamation of
  tailings at uranium and thorium processing sites which were generated
  pursuant to Federal defense contracts;
  (7) the owners of licensees of active uranium and thorium sites and the
  Federal Government have each benefited from uranium and thorium produced
  at the active sites, and it is equitable that they share in the costs of
  reclamation, decommissioning and other remedial actions at the commingled
  sites; and
  (B) the creation of an assured system of financing will greatly facilitate
  and expedite reclamation and remedial actions at active uranium and thorium
  processing sites.
  (b) PURPOSE- It is the purpose of Chapters 2 and 3 of this subtitle to--
  (1) ensure an adequate long-term supply of domestic uranium for the Nation's
  common defense and security and for the Nation's nuclear power program;
  (2) provide assistance to the domestic uranium industry; and
  (3) establish, facilitate, and expedite a comprehensive system for
  financing reclamation and other remedial action at active uranium and
  thorium processing sites.
SEC. 4203. DEFINITIONS.
  For purposes of this subtitle--
  (1) the term `active site' means--
  (A) any uranium or thorium processing site, including the mill, containing
  by-product material for which a license (issued by the Nuclear Regulatory
  Commission or its predecessor agency under the Atomic Energy Act of 1954,
  as amended, or by a State as permitted under section 274 of such Act (42
  U.S.C. 2021)) for the production at such site of any uranium or thorium
  derived from ore--
  (i) was in effect on January 1, 1978;
  (ii) was issued or renewed after January 1, 1978; or
  (iii) for which an application for renewal or issuance was pending on,
  or after January 1, 1978; and
  (B) any other real property or improvement on such real property that is
  determined by the Commission to be--
  (i) in the vicinity of such site; and
  (ii) contaminated with residual by-product material;
  (2) the term `byproduct material' has the meaning given such term in
  section 11 e. (2) of the Atomic Energy Act of 1954, as amended (42
  U.S.C. 2014(e)(2));
  (3) the term `civilian nuclear power reactor' means any civilian nuclear
  powerplant required to be licensed under section 103 or section 104 of
  the Atomic Energy Act of 1954, as amended (42 U.S.C. 2133);
  (4) the term `Corporation' means the United States Enrichment Corporation
  established under section 1202 of title II of the Atomic Energy Act of 1954,
  as amended;
  (5) the term `Department' means the Department of Energy;
  (6) the term `domestic uranium' means any uranium that has been mined in
  the United States including uranium recovered from uranium deposits in
  the United States by underground mining, open-pit mining, strip mining,
  in situ recovery, leaching, and ion recovery, or recovered from phosphoric
  acid manufactured in the United States;
  (7) the term `domestic uranium producer' means a person or entity who
  produces domestic uranium and who has, to the extent required by State
  and Federal agencies having jurisdiction, licenses and permits for the
  operation, decontamination, decommissioning, and reclamation of sites,
  structures and equipment;
  (8) the term `enrichment tails' means uranium in which the quantity of
  the U-235 isotope has been depleted in the enrichment process;
  (9) the term `reclamation, decommissioning, and other remedial action'
  includes work, including but not limited to disposal work, accomplished in
  order to comply with all applicable requirements, including but not limited
  to those established pursuant to the Uranium Mill Tailings Radiation Control
  Act of 1978, as amended, or where appropriate, with requirements established
  by a State that is a party to a discontinuance agreement under section 274
  of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2021). The term
  shall also include work at an active site prior to the date of enactment
  of this act accomplished in order to comply with the foregoing requirements;
  (10) the term `Secretary' means the Secretary of Energy;
  (11) the terms `source material' and `special nuclear material' have the
  meaning given such terms in section 11 of the Atomic Energy Act of 1954,
  as amended (42 U.S.C. 2014); and
  (12) the term `tailings' means the wastes produced by the extraction or
  concentration of uranium or thorium from any ore processed primarily for
  its source material content.
CHAPTER 2--URANIUM REVITALIZATION
SEC. 4210. VOLUNTARY OVERFEED PROGRAM.
  (a) The Corporation shall establish, for a period of not less than
  five years commencing at the beginning of fiscal year 1992, a voluntary
  overfeeding program which shall be made available to the Corporation's
  enrichment services customers. The term `overfeeding' means the use of
  uranium in the enrichment process in excess of the amount required at the
  transactional tails assay.
  (b) The Corporation shall encourage its enrichment services customers
  to participate in the voluntary overfeeding program as provided in this
  section. Uranium supplied by the enrichment customer shall be used by the
  Corporation for voluntary overfeeding in the enrichment process to reduce
  the amount of power required to produce the enriched uranium ordered by the
  enrichment services customer. The dollar savings resulting from the reduced
  power requirements shall be credited to the enrichment services customer.
  (c) In the event an enrichment services customer does not elect to provide
  uranium for voluntary overfeeding to be used to process its enrichment
  order, the Corporation shall establish a method for such uranium to be
  voluntarily supplied by other enrichment services customer(s) which have
  expressed to the Corporation an interest in participating in such a program
  and the Corporation shall credit the resulting dollar savings realized
  from the reduced power requirements to the enrichment services customer(s)
  providing the uranium.
  (d) An enrichment services customer providing uranium for voluntary
  overfeeding shall certify to the Corporation that such uranium is domestic
  uranium which has been actually produced by a domestic uranium producer
  after the enactment of this Act or domestic uranium actually produced by
  a domestic uranium producer before the enactment of this Act and held by
  it without sale, transfer or redesignation of the origin of such uranium
  on a DOE/NRC form 741.
  (e) Within ninety days of the date of enactment of this Act, the Corporation
  shall establish procedures to implement this program. Such procedures
  shall include, but not be limited to, delivery reporting and certification
  requirements, and provisions for failure to comply with the requirements
  of the voluntary overfeeding program. The determination of the voluntary
  overfeeding credit and sufficient data to support such determination shall
  be available to the Corporation's enrichment services customers and to
  qualified domestic producers.
SEC. 4211. NATIONAL STRATEGIC URANIUM RESERVE.
  There is hereby established the National Strategic Uranium Reserve under
  the direction and control of the Secretary. The Reserve shall consist of
  50,000,000 pounds of natural uranium contained in stockpiles or inventories
  currently held by the United States for defense purposes. Effective on
  the date of enactment of this Act, use of the Reserve shall be retricted
  to military purposes and Government research. Use of the Department's
  stockpile of enrichment tails existing on the date of enactment of this
  Act shall be restricted to military purposes.
SEC. 4212. RESPONSIBILITY FOR THE INDUSTRY.
  (a) The Secretary shall have a continuing responsibility for the domestic
  uranium industry, and shall take any action, which he determines to be
  appropriate under existing law, to encourage the use of domestic uranium;
  Provided, however, That the Secretary, in fulfilling this responsibility,
  shall not use any supervisory authority over the Corporation. The Secretary
  shall report annually to the appropriate committees of Congress on action
  taken with respect to the domestic uranium industry, including action
  to promote the export of domestic uranium pursuant to paragraph (b) of
  this section.
  (b) ENCOURAGE EXPORT- The Department, with the cooperation of the Department
  of Commerce, the United States Trade Representative and other governmental
  organizations, shall encourage the export of domestic uranium. Within one
  hundred and eighty days of the date of enactment of this Act the Secretary
  shall develop recommendations and implement government programs to promote
  the export of domestic uranium.
SEC. 4213. GOVERNMENT URANIUM PURCHASES.
  (a) After the date of enactment of this Act, the United States of America,
  its agencies and instrumentalities, shall only have the authority to
  enter into contracts or orders for the purchase of uranium which is (1)
  of domestic origin and (2) is purchased from domestic uranium producers:
  Provided, That this section shall not affect purchases under a contract
  for delivery of a fixed amount of uranium entered into before the date of
  enactment of this Act.
  (b) Subsection (a) shall not apply to the Tennessee Valley Authority.
SEC. 4214. SECRETARY'S AUTHORITY TO MAKE REGULATIONS.
  The Secretary shall issue appropriate regulations to implement the purposes
  of this subtitle.
CHAPTER 3--REMEDIAL ACTION FOR ACTIVE PROCESSING SITES
SEC. 4220. REMEDIAL ACTION PROGRAM.
  (a) IN GENERAL- Except as provided in subsection (b), the costs of
  decontamination, decommissioning, reclamation, and other remedial action
  at an active uranium or thorium processing site shall be borne by persons
  licensed under section 62 or 81 of the Atomic Energy Act of 1954 (42
  U.S.C. 2091, 2111) for any activity at such site which results or has
  resulted in the production of byproduct material.
  (b) REIMBURSEMENT-
  (1) IN GENERAL- The Secretary shall, subject to paragraph (2), reimburse at
  least annually a licensee described in subsection (a) for such portion of
  the reclamation, decommissioning and other remedial action costs described
  in such subsection as are--
  (A) determined by the Secretary to be attributable to tailings generated
  as an incident of sales to the United States; and
  (B) incurred by such licensee not later than December 31, 2002.
  (2) AMOUNT-
  (A) TO INDIVIDUAL ACTIVE SITE URANIUM LICENSEES- The amount of reimbursement
  paid to any licensee under paragraph (1) shall be determined by the Secretary
  in accordance with regulations issued pursuant to section 221 and shall
  not exceed an amount equal to $4.50 multiplied by the dry short tons of
  tailings located at the site as of the effective date of this subtitle
  and generated as an incident of sales to the United States.
  (B) TO ALL ACTIVE SITE URANIUM LICENSEES- Payments made under paragraph
  (1) to active site uranium licensees shall not in the aggregate exceed
  $270,000,000.
  (C) TO THORIUM LICENSEES- Payments made under paragraph (1) to the licensee
  of the active thorium site shall not exceed $30,000,000.
  (D) INFLATION ESCALATION INDEX- The amounts in subsections (A), (B), and
  (C) of this section shall be increased annually based upon an inflation
  index. The Secretary shall determine the appropriate index to apply.
  (E) ADDITIONAL REIMBURSEMENT- Provided however, (i) the Secretary
  shall determine as of July 31, 2005, whether the amount authorized to
  be appropriated in section 4222, when considered with the $4.50 per dry
  short ton limit on reimbursement, exceeds the total cost reimbursable to
  the licensees of active sites for reclamation, decommissioning and other
  remedial action; and (ii) if the Secretary determines there is an excess,
  the Secretary may allow reimbursement in excess of $4.50 per dry short
  ton on a prorated basis at such sites that reclamation, decommissioning
  and other remedial action costs for tailings generated as an incident of
  sales to the United States exceed the $4.50 per dry short ton limitation.
SEC. 4221. REGULATIONS.
  The Secretary shall issue regulations governing reimbursement under
  section 4220. An active uranium or thorium processing site owner shall
  apply for reimbursement hereunder by submitting a statement for the
  amount of reimbursement, together with reasonable documentation in
  support thereof, to the Secretary. Any such statement for reimbursement,
  supported by reasonable documentation, shall be approved by the Secretary
  and reimbursement therefor shall be made in a timely manner subject only
  to the limitations of section 4220.
SEC. 4222. AUTHORIZATION.
  There is authorized to be appropriated for purposes of this chapter not
  more than $300,000,000 increased annually as provided in section 4220
  based upon an inflation index as determined by the Secretary.
TITLE V--COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
  SEC. 5001. FEES OF THE ENVIRONMENTAL PROTECTION AGENCY- (a) The Administrator
  of the Environmental Protection Agency shall assess and collect fees and
  charges for services and activities carried out pursuant to the statutes
  which are administered by the Agency in the amount of $22,000,000 for the
  fiscal year 1991, and $33,000,000 in each of the fiscal years 1992, 1993,
  1994, and 1995. Such sums shall be in addition to the sums the Agency is
  collecting for services or activities upon the date of enactment of this
  Act. The amount of any fee or charge assessed pursuant to this section
  shall be established by rule after notice and opportunity for public
  comment. Publicly owned wastewater treatment works shall not be required
  to pay a fee associated with discharge permits required pursuant to section
  402 of the Federal Water Pollution Control Act.
  (b) Except as may otherwise be specifically provided by law with regard
  to fees and charges, and their deposit and retention, any fees and charges
  established and collected by the Administrator of Environmental Protection
  Agency pursuant to this section or other statutes administered by the
  Agency shall be deposited in a special fund in the United States Treasury
  which thereafter shall be available for appropriation, to remain available
  until expended, to carry out the Agency's activities for which the fee or
  charge is made.
NUCLEAR REGULATORY COMMISSION USER FEES AND ANNUAL CHARGES
  SEC. 5002. (a) AMENDMENT TO ATOMIC ENERGY ACT- Chapter 19 of the Atomic
  Energy Act of 1954 (42 U.S.C. 2015 et seq.) is amended by adding at the
  end the following new section:
SEC. 292. USER FEES AND ANNUAL CHARGES.
  `(a) ANNUAL ASSESSMENT-
  `(1) AMOUNT- Except as provided in subparagraph (3), the Nuclear Regulatory
  Commission (hereinafter in this section referred to as the Commission)
  shall annually assess and collect such fees and charges as are described
  in subsections (b) and (c) in an amount that approximates 100 percent of
  the budget authority for the Commission's Salaries and Expenses in the
  fiscal year in which such assessment is made, less any amount appropriated
  to the Commission from the Nuclear Waste Fund in such fiscal year.
  `(2) FIRST ASSESSMENT- The first assessment shall be made not later than
  September 30, 1991, and shall be based on the Commission's Salaries and
  Expenses budget authority for fiscal year 1991.
  `(3) LAST ASSESSMENT- The last assessment of annual charges as described
  in subsection (c) shall be made not later than September 30, 1995, and
  shall be based on the Commission's Salaries and Expenses budget authority
  for fiscal year 1995.
  `(b) FEES FOR SERVICE OR THING OF VALUE- Pursuant to section 9701 of title
  31, United States Code, any person who receives a service or thing of
  value from the Commission shall pay fees to cover the Commission's costs
  in providing any such service or thing of value.
  `(c) Annual Charges-
  `(1) PERSONS SUBJECT TO CHARGE- Any person who holds a license from the
  Commission may be required to pay, in addition to the fees set forth in
  subsection (b), an annual charge.
  `(2) AGGREGATE AMOUNT OF CHARGES- The aggregate amount of the annual charge
  collected from all persons described in paragraph (1) shall equal an amount
  that approximates 100 percent of the budget authority for the Commission's
  Salaries and Expenses in the fiscal year in which such charge is collected,
  less any amount appropriated to the Commission from the Nuclear Waste Fund
  and the amount of fees collected under subsection (b) in such fiscal year.
  `(3) AMOUNT PER LICENSEE- The Commission shall establish, by rule, a
  schedule of charges fairly and equitably allocating the aggregate amount
  of charges described in paragraph (2) among the licensees described in
  paragraph (1). To the maximum extent practicable, the charges shall have
  a reasonable relationship to the cost of providing regulatory services
  and may be based on the allocation of the Commission's resources among
  licensees or classes of licensees described in paragraph (1).
  `(d) DEFINITION- As used in this section, `Nuclear Waste Fund' means the
  fund established pursuant to section 302(c) of the Nuclear Waste Policy
  Act of 1982 (42 U.S.C. 10222(c)).'.
  (b) REPEAL- Title VII of the Consolidated Omnibus Budget Reconciliation Act
  of 1985 (Public Law 99-272), as amended, is amended by striking subtitle
  G. This repeal shall become effective upon promulgation of the Nuclear
  Regulatory Commission's final rule implementing section 292 of the Atomic
  Energy Act of 1954.
  (c) TABLE OF CONTENTS- The table of contents of the Atomic Energy Act
  of 1954 is amended by adding after the term relating to section 291 the
  following new item:
`Sec. 292. User fees and annual charges.'.
SEC. 5003. RECREATION USER FEES AT WATER RESOURCES DEVELOPMENT AREAS
ADMINISTERED BY THE DEPARTMENT OF THE ARMY.
  (a) The second sentence of section 210 of the Flood Control Act of 1968
  (82 Stat. 746; 16 U.S.C. 4604-3) is amended to read:
  `Notwithstanding section 460 of the Land and Water Conservation Fund Act
  of 1965, as amended (78 Stat. 897; 16 U.S.C. 4604-6a(b)), the Secretary of
  the Army is authorized to charge fees for the use of specialized recreation
  sites and facilities, including, but not limited to, improved campsites,
  swimming beaches, and boat launching ramps; however, the Secretary shall not
  charge fees for the use or provision of drinking water, wayside exhibits,
  general purpose roads, overlook sites, toilet facilities, or general visitor
  information. The fees shall be deposited into the special Treasury account
  for the Corps of Engineers that was established by section 460 of the Land
  and Water Conservation Fund Act of 1965, as amended (16 U.S.C. 4604-6a(b)).
  (b) Section 4 of the Land and Water Conservation Fund Act of 1965, as amended
  (78 Stat. 897; 16 U.S.C. 4604-4(a)), as further amended by deleting the
  next to the last sentence of subsection (b).
TITLE VI--NON-REVENUE PROVISIONS OF THE COMMITTEE ON FINANCE
SEC. 6000. AMENDMENT OF THE SOCIAL SECURITY ACT, TABLE OF CONTENTS.
  (a) AMENDMENT OF THE SOCIAL SECURITY ACT- Except as otherwise expressly
  provided, whenever in this title an amendment or repeal is expressed in
  terms of an amendment to, or repeal of, a section or other provision, the
  reference shall be considered to be made to a section or other provision
  of the Social Security Act.
  (b) Table of Contents-
TITLE VI--NON-REVENUE PROVISIONS OF THE COMMITTEE ON FINANCE
Sec. 6000. Amendment of the Social Security Act; table of contents.
Subtitle A--Income Security
Part I--Child Support Enforcement
Sec. 6001. IRS intercept for non-AFDC families.
Sec. 6002. Commission on interstate child support.
Part II--Supplemental Security Income
Sec. 6010. Continuation of medicaid eligibility under section 1619(b) past
age 65.
Sec. 6011. Exclusion from income of impairment-related work expenses.
Sec. 6012. Treatment of royalties and honoraria as earned income.
Sec. 6013. Evaluation by pediatrician in child disability determinations.
Sec. 6014. Concurrent SSI and food stamp applications by institutionalized
individuals.
Sec. 6015. Reimbursement for vocational rehabilitation services furnished
during certain months of nonpayment of supplemental security income benefits.
Sec. 6016. Certain non-cash contributions received by recipients of SSI
benefits excluded from income.
Sec. 6017. Certain trusts not to be counted as a resource available to the
recipient; trust not income in month in which it is established.
Sec. 6018. Notification of certain individuals eligible to receive retroactive
benefits.
Part III--Aid to Families With Dependent Children
Sec. 6020. Optional monthly reporting and retrospective budgeting.
Sec. 6021. Children receiving foster care maintenance or adoption assistance
payments not treated as member of family unit for purposes of determining
eligibility for, or amount of, AFDC benefit.
Sec. 6022. Elimination of term legal guardian.
Sec. 6023. Reporting of child abuse and neglect.
Sec. 6024. Disclosure of information about AFDC applicants and recipients
authorized for purposes directly connected to State foster care and adoption
assistance programs.
Sec. 6025. Repatriation.
Sec. 6026. Good cause exception to required cooperation for transitional
child care benefits.
Sec. 6027. Technical correction regarding penalty for failure to participate
in JOBS program.
Sec. 6028. Technical correction regarding AFDC-UP eligibility requirements.
Sec. 6029. Technical amendments to national commission on children.
Sec. 6030. Family support act demonstration projects.
Sec. 6031.  Study of JOBS programs operated by Indian tribes and Alaska
Native organizations.
Sec. 6032. Proposed emergency assistance and AFDC special needs regulations.
Part IV--Child Welfare and Foster Care; Child Care
Sec. 6040. Clarification of terminology relating to administrative costs.
Sec. 6041. Section 427 triennial reviews.
Sec. 6042. Independent living initiatives.
Sec. 6043. Grants to States for child care.
Part V--Old-Age, Survivors, and Disability Insurance
Sec. 6050. Continuation of disability benefits during appeal.
Sec. 6051. Repeal of special disability standard for widows and widowers.
Sec. 6052. Dependency requirements applicable to a child adopted by a
surviving spouse.
Sec. 6053. Representative payee reforms.
Sec. 6054. Fees for representation of claimants in administrative proceedings.
Sec. 6055. Applicability of administrative res judicata; related notice
requirements.
Sec. 6056. Demonstration projects relating to accountability for telephone
service center communications.
Sec. 6057. Telephone access to the Social Security Administration.
Sec. 6058. Amendments relating to social security account statements.
Sec. 6059. Trial work period during rolling five-year period for all disabled
beneficiaries.
Sec. 6060. Continuation of benefits on account of participation in a non-State
vocational rehabilitation program.
Sec. 6061. Limitation on new entitlement to special age-72 payments.
Sec. 6062. Elimination of advanced crediting to the trust funds of Social
Security payroll taxes and revenues from taxation of Social Security benefits.
Sec. 6063. Elimination of eligibility for retroactive benefits for certain
individuals eligible for reduced benefits.
Sec. 6064. Consolidation of old methods of computing primary insurance amounts.
Sec. 6065. Suspension of dependent's benefits when the worker is in an
extended period of eligibility.
Subtitle B--Medicare
Part 1--Provisions Relating Only to Part A
Sec. 6101. Reductions in payments for capital-related costs of inpatient
hospital services.
Sec. 6102. Prospective payment hospitals.
Sec. 6103. Reduction in indirect medical education payments.
Sec. 6104. PPS exempt hospitals.
Sec. 6105. Expansion of hospice benefit.
Sec. 6106. Miscellaneous and technical amendments relating to part A.
Part 2--Provisions Relating Only to Part B
SUBPART A--PAYMENT FOR PHYSICIANS' SERVICES
Sec. 6111. Reductions in payments for overvalued procedures.
Sec. 6112. Radiology services.
Sec. 6113. Anesthesia services.
Sec. 6114. Pathology services.
Sec. 6115. Update for physicians' services.
Sec. 6116. New physicians.
Sec. 6117. Assistants at surgery.
Sec. 6118. Advance determinations by carriers.
Sec. 6119. Limitation on beneficiary liability.
Sec. 6120. Statewide fee schedule areas for physicians' services.
Sec. 6121. Technical corrections relating to physician payment.
Sec. 6122. Billing for services of substitute physician.
Sec. 6123. Study of prepayment medical review screens.
Sec. 6124. Utilization screens for physician visits in rehabilitation
hospitals.
Sec. 6125. Study of high volume payment adjustment.
SUBPART B--PAYMENTS FOR OTHER ITEMS AND SERVICES
Sec. 6130. Hospital outpatient services.
Sec. 6131. Clinical diagnostic laboratory services.
Sec. 6132. Durable medical equipment.
Sec. 6133. Orthotics and prosthetics.
SUBPART C--MISCELLANEOUS PROVISIONS
Sec. 6140. Community mental health centers.
Sec. 6141. Extension of Alzheimer's disease demonstration projects.
Sec. 6142. Certified registered nurse anesthetists.
Sec. 6143. Federally qualified health centers and rural health clinics.
Sec. 6144. Separate payment under part B for services of certain health
professionals.
Sec. 6145. New technology IOL's.
Sec. 6146. Rural nursing incentives.
Part 3--Provisions Relating to Parts A and B
Sec. 6150. End-stage renal disease services.
Sec. 6151. Staff-assisted home dialysis.
Sec. 6152. Medicare as secondary payer.
Sec. 6153. Health maintenance organizations.
Sec. 6154. Peer review organizations.
Sec. 6155. Improvements in and simplification of medigap policies.
Sec. 6156. Technical and miscellaneous provisions relating to parts A and B.
Sec. 6157. Living wills and other advance directives.
Part 4--Provisions Relating to Premiums, Deductibles, and Coinsurance
Sec. 6161. Part B premium.
Sec. 6162. Change in Part B deductible.
Sec. 6163. 20 Percent coinsurance for clinical diagnostic laboratory tests.
Subtitle C--Medicaid
Part I--Prescription Drug Discounts
Sec. 6201. Reimbursement for prescribed drugs under medicaid.
Part II--Purchase of Private Insurance
Sec. 6211. States required to pay premiums, deductibles, and coinsurance
for private health insurance coverage for medicaid beneficiaries where
cost effective.
Part III--Low Income Elderly
Sec. 6221. 1-year acceleration of and increase in option amount for buy-in
of premiums and cost sharing for indigent medicare beneficiaries.
Sec. 6222. Delay in counting Social Security COLA increases until new poverty
guidelines implemented.
Part IV--Child Health
Sec. 6231. Medicaid child health provisions.
Part V--Home and Community-Based Services
Sec. 6241. Home and community-based care as optional service.
Sec. 6242. Community supported living arrangements services.
Sec. 6243. Medicaid coverage of personal care services outside the home.
Part VI--Nursing Home Reform
Sec. 6251. Medicaid nursing home reform provisions.
Part VII--Miscellaneous and Technical Provisions
Sec. 6261. Demonstration projects to study the effect of allowing States
to extend medicaid coverage to certain low-income families not otherwise
qualified to receive medicaid benefits.
Sec. 6262. Medicaid respite demonstration project extended.
Sec. 6263. Demonstration project to provide medicaid coverage for HIV-positive
individuals, and certain pregnant women determined to be at risk of contracting
the HIV virus.
Sec. 6264. Mental health facility certification demonstration project.
Sec. 6265. Optional State medicaid disability determinations independent of
the Social Security Administration.
Sec. 6266. Medically needy income levels for certain member families.
Sec. 6267. Medicaid spenddown option.
Sec. 6268. Limitation on disallowances or deferral of Federal financial
participation for certain inpatient psychiatric hospital services for
individuals under age 21.
Sec. 6269. 5-year extension of certain waiver.
Sec. 6270. Medicaid long-term care insurance demonstration project.
Sec. 6271. Medicaid coverage of alcoholism and drug dependency treatment
services.
Sec. 6272. Home and community-based waivers.
Sec. 6273. Medicaid provisions relating to health maintenance organizations.
Sec. 6274. State flexibility in identifying and paying disproportionate
share hospitals.
Sec. 6275. Extension of provision on voluntary contributions and
provider-specific taxes.
Sec. 6276. Prohibition on waiving reasonable and adequate payment rates.
Subtitle D--Trade Provisions
Part I--Customs User Fees
Sec. 6301. Customs user fees.
Part II--Technical Corrections
Sec. 6311. Technical amendments to the Harmonized Tariff Schedule.
Sec. 6312. Technical amendments to certain customs laws.
Subtitle E--Pension Benefit Guarantee Corporation Premiums
Sec. 6401. Increase in premium rates.
Subtitle F--Child Care and Development Block Grant
Sec. 6501. Child Care and Development Block Grant.
Subtitle A--Income Security
 PART I--CHILD SUPPORT ENFORCEMENT
SEC. 6001. IRS INTERCEPT FOR NON-AFDC FAMILIES.
  (a) AUTHORITY OF STATES TO REQUEST WITHHOLDING OF FEDERAL TAX REFUNDS
  FROM PERSONS OWING PAST DUE CHILD SUPPORT- Section 464(a)(2)(B) (42
  U.S.C. 664(a)(2)(B)) is amended by striking `, and before January 1, 1991'
  before the period.
  (b) WITHHOLDING OF FEDERAL TAX REFUNDS AND COLLECTION OF PAST DUE CHILD
  SUPPORT ON BEHALF OF DISABLED CHILD OF ANY AGE, AND OF SPOUSAL SUPPORT
  INCLUDED IN ANY CHILD SUPPORT ORDER- Section 464(c) (42 U.S.C. 664(c))
  is amended--
  (1) in paragraph (2), by striking `minor child.' and inserting `qualified
  child (or a qualified child and the parent with whom the child is living if
  the same support order includes support for the child and the parent).'; and
  (2) by adding at the end the following:
  `(3) For purposes of paragraph (2), the term `qualified child' means
  a child--
  `(A) who is a minor; or
  `(B)(i) who, while a minor, was determined to be disabled under title II
  or XVI; and
  `(ii) for whom an order of support is in force.'.
  (c) EFFECTIVE DATE- The amendments made by subsection (b) shall take effect
  on January 1, 1991.
SEC. 6002.  COMMISSION ON INTERSTATE CHILD SUPPORT.
  Section 126 of the Family Support Act of 1988 (Public Law 100-485)
  is amended--
  (1) in subsection (d)--
  (A) by striking `1990' in paragraph (1) and inserting `1991'; and
  (B) by striking `May 1, 1991' in paragraph (2) and inserting `May 1, 1992';
  (2) in subsection (e), by adding at the end thereof the following new
  paragraph:
  `(5)(A) Individuals may be appointed to serve the Commission without regard
  to the provisions of title 5 that govern appointments in the Competitive
  Service, without regard to the Competitive Service, and without regard to
  the Classification System in chapter 53 of title 5, United States Code. The
  Chairman of the Commission may fix the compensation of the Executive
  Director at a rate that shall not exceed the maximum rate of the basic
  pay payable under GS-18 of the General Schedule as contained in title 5,
  United States Code.
  `(B) The Executive Director may appoint and fix the compensation of such
  additional personnel as the Executive Director considers necessary to
  carry out the duties of the Commission. Such personnel may be appointed
  without regard to the provisions of title 5, United States Code, governing
  appointments in the Competitive Service, and may be paid without regard
  to the provisions of chapter 51 and subchapter III of chapter 53 of such
  title relating to classification and General Schedule pay rates.
  `(C) On the request of the Chairperson of the Commission, the head of any
  Federal department or agency may detail, on a reimbursable basis, any of
  the personnel of such agency to the Commission to assist the Commission
  in carrying out its duties under this section without regard to section
  3341 of title 5, United States Code.'; and
  (3) in subsection (f)(1), by striking `July 1, 1991' and inserting `July
  1, 1992'.
 PART II--SUPPLEMENTAL SECURITY INCOME
SEC. 6010. CONTINUATION OF MEDICAID ELIGIBILITY UNDER SECTION 1619(b) PAST
AGE 65.
  (a) IN GENERAL- Paragraph (1) of section 1619(b) (42 U.S.C. 1382h(b)) is
  amended in the matter preceding subparagraph (A) by striking `under age 65'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply with
  respect to benefits payable for months beginning after the date of the
  enactment of this Act.
SEC. 6011. EXCLUSION FROM INCOME OF IMPAIRMENT-RELATED WORK EXPENSES.
  (a) IN GENERAL- Section 1612(b)(4)(B)(ii) (42 U.S.C. 1382a(b)(4)(B)(ii))
  is amended by striking `(for purposes of determining the amount of his or
  her benefits under this title and of determining his or her eligibility
  for such benefits for consecutive months of eligibility after the initial
  month of such eligibility)'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply
  to benefits payable for calendar months beginning after the date of the
  enactment of this Act.
SEC. 6012. TREATMENT OF ROYALTIES AND HONORARIA AS EARNED INCOME.
  (a) IN GENERAL- Section 1612(a) (42 U.S.C. 1382a(a)) is amended--
  (1) in paragraph (1)--
  (A) in subparagraph (C), by striking `; and' at the end of the subparagraph
  and inserting a semicolon; and
  (B) by inserting after subparagraph (D) the following new subparagraph:
  `(E) any royalty which is earned in connection with any publication of the
  work of an individual or any portion of any honorarium which is received
  for services rendered; and'; and
  (2) in subparagraph (F) of paragraph (2), by inserting before the period
  `, other than royalties described in paragraph (1)(E) of this subsection'.
  (b) EFFECTIVE DATE- The amendments made by this section shall apply with
  respect to benefits for months beginning on or after the first day of the
  18th calendar month following the month in which this Act is enacted.
SEC. 6013. EVALUATION BY PEDIATRICIAN IN CHILD DISABILITY DETERMINATIONS.
  Section 1614(a)(3) (42 U.S.C. 1382c(a)(3)) is amended by adding at the
  end the following new subparagraph:
  `(H) In making determinations with respect to disability of a child under the
  age of 18 under this title, the Secretary shall make reasonable efforts to
  ensure that a qualified pediatrician or other individual who specializes
  in a field of medicine appropriate to the disability of such child (as
  determined by the Secretary) evaluates the case of such child.'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
  determinations made in or after the sixth month beginning after the date
  of the enactment of this Act.
SEC. 6014. CONCURRENT SSI AND FOOD STAMP APPLICATIONS BY INSTITUTIONALIZED
INDIVIDUALS.
  Section 1631(m) (42 U.S.C. 1383(m)) is amended by striking the second
  sentence and inserting the following new sentence: `The Secretary and
  the Secretary of Agriculture shall develop a procedure under which an
  individual who applies for supplemental security income benefits under
  this subsection shall also be permitted to apply at the same time for
  participation in the food stamp program authorized under the Food Stamp
  Act of 1977 (7 U.S.C. 2011 et seq.).'.
SEC. 6015. REIMBURSEMENT FOR VOCATIONAL REHABILITATION SERVICES FURNISHED
DURING CERTAIN MONTHS OF NONPAYMENT OF SUPPLEMENTAL SECURITY INCOME BENEFITS.
  (a) IN GENERAL- (1) Section 1615(d) (42 U.S.C. 1382d(d)) is amended by
  inserting immediately after the first sentence the following: `In such
  cases the reimbursement may include costs incurred for any month for which
  the individual received a benefit under this title (including assistance
  pursuant to section 1619(b)), received a federally administered State
  supplementary payment, or was ineligible (for a reason other than cessation
  of disability or blindness) to receive a benefit pursuant to section 1611,
  an agreement under section 1616(a), section 1619, and an agreement under
  section 212(b) of Public Law 93-66, but only for months prior to the
  thirteenth consecutive month of ineligibility.'.
  (b) EFFECTIVE DATE- The amendment made by this section shall be effective
  on the date of the enactment of this Act and shall apply to claims for
  reimbursement pending on or after such date.
SEC. 6016. CERTAIN NON-CASH CONTRIBUTIONS RECEIVED BY RECIPIENTS OF SSI
BENEFITS EXCLUDED FROM INCOME.
  (a) CONTRIBUTIONS (OTHER THAN CASH PAID DIRECTLY TO THE RECIPIENT) MADE
  TO OBTAIN SOCIAL SERVICES OR FOR MAINTENANCE OF HOME- (1) Section 1612(b)
  (42 U.S.C. 1382a(b)) is amended--
  (A) by striking `and' at the end of paragraph (15);
  (B) by striking the period at the end of paragraph (16) and inserting a
  semicolon; and
  (C) by inserting after paragraph (16) the following;
  `(17) contributions other than cash paid directly to the recipient which
  are not in the form of food, clothing, or shelter, or may not be used to
  obtain food, clothing, or shelter and are for the purchase of--
  `(A) any service, including those which are--
  `(i) designed to assist an eligible individual who has any physical or
  mental impairment to function in society on a level comparable to that of
  an individual who is not so impaired; and
  `(ii) provided by a recognized social services or educational agency, whether
  governmental or private, and whether nonprofit or operated for profit;
  `(B) vocational rehabilitation services;
  `(C) private medical insurance coverage where the private insurer is to
  be the first payor;
  `(D) medical care;
  `(E) transportation;
  `(F) educational services (including continuing adult education,
  postsecondary education, and vocational education), including books,
  tuition, laboratory fees, and any other costs related to education except
  those for room and board;
  `(G) personal assistance or attendant care services; or
  `(H) services or equipment related to the quality and liveability of the
  individual's shelter and which are not for the purposes of rent, mortgage,
  real property taxes, garbage collection and sewerage services, water,
  heating fuel, electricity, or gas; but permissible contributions include--
  `(i) payment for telephone services;
  `(ii) payment for repairs to shelter;
  `(iii) payment for repairs or replacement of heating source in shelter; and
  `(iv) purchase of any appliance, if such purchase will not result in the
  individual's household goods exceeding the amount which has been determined
  by the Secretary to be reasonable under section 1613(a)(2)(A).'.
  (2) The amendments made by paragraph (1) shall apply to determinations of
  income made in months following the date of the enactment of this Act.
  (b)(1) RULES GOVERNING CIRCUMSTANCES UNDER WHICH CONTRIBUTION OF A SHELTER
  IS TO BE COUNTED AS INCOME- Section 1612(a)(2) (42 U.S.C. 1382a(a)(2))
  is amended--
  (A) in subparagraph (E), by striking `; and' and inserting `, except
  that receipt of any sum or property as a result of inheritance, gift, or
  support shall be treated as income only in the month in which the individual
  legally has access to the funds to use for the individual's own benefit;';
  (B) in subparagraph (F), by striking the period and inserting `; and'; and
  (C) by inserting at the end the following:
  `(G) the value of an ownership interest in a shelter received, but the
  value of such interest shall be included in income only in the month of
  receipt and pursuant to the following rules:
  `(i) If the individual resides in the shelter at the time of the conveyance,
  the limitations established by the Secretary for presuming a maximum value
  for in-kind support shall apply.
  `(ii) If the individual does not reside in the shelter at the time of the
  conveyance, the full value of the interest shall be income in the month
  of receipt.'.
  (2) The amendments made by paragraph (1) shall apply to determinations of
  income made in or after the sixth month beginning after the date of the
  enactment of this Act.
SEC. 6017. CERTAIN TRUSTS NOT TO BE COUNTED AS A RESOURCE AVAILABLE TO THE
RECIPIENT; TRUST NOT INCOME IN MONTH IN WHICH IT IS ESTABLISHED.
  (a) CIRCUMSTANCES UNDER WHICH TRUST CREATED FOR BENEFIT OF RECIPIENT
  SHALL NOT BE COUNTED AS A RESOURCE- Section 1613(a) (42 U.S.C. 1382b(a))
  is amended--
  (1) by striking `and' at the end of paragraph (7);
  (2) by striking the period at the end of paragraph (8) and inserting `,
  and'; and
  (3) by inserting after paragraph (8) the following:
  `(9) any amount set aside in a trust or similar legal device, either by the
  individual or on behalf of the individual, for the purpose of providing
  assistance to the individual, so long as the individual does not have
  access to the assets of the trust. An individual does not have access to
  assets held in a trust if the trustee, and not the individual, has the
  discretion to determine when such assets ought to be distributed to or for
  such individual and the amount of any such distribution. The authority for
  discretion by the trustee to use the assets of the trust for the support and
  maintenance of the individual, or to supplement any benefits available to
  the individual under title XVI or other public benefits, shall not mean that
  the individual has access to these assets. The fact that the trustee is also
  the representative payee for the individual or relative of the individual
  shall not be construed as causing trust assets to be accessible to the
  individual if all the other requirements of this subsection are satisfied.'.
  (b) CREATION OF TRUST NOT TO BE COUNTED AS INCOME IN MONTH OF CREATION;
  LATER PLACEMENT OF FUNDS OR PROPERTY IN THE TRUST ALSO NOT COUNTED AS INCOME-
  (1) Section 1612(b) (42 U.S.C. 1382a(b)) is amended--
  (A) by striking `and' at the end of the paragraph (16),
  (B) by striking the period at the end of the paragraph (17) added by
  section 6016(a)(1)(C) of this Act and inserting `; and'; and
  (C) by inserting after the paragraph (17) added by section  6016(a)(1)(C)
  of this Act the following:
  `(18) any funds or other property placed in a trust for the benefit of the
  individual over which the individual has no discretion as to use shall
  not be treated as income either at the time of creation of the trust or
  if placed in the trust after its creation.'.
  (2) The amendments made by paragraph (1) shall apply to determinations of
  income made in or after the sixth month beginning after the date of the
  enactment of this Act.
SEC. 6018. NOTIFICATION OF CERTAIN INDIVIDUALS ELIGIBLE TO RECEIVE RETROACTIVE
BENEFITS.
  In notifying individuals of their eligibility to receive retroactive benefits
  under Sullivan v. Zebley, 110 S. Ct. 2658 (1990), the Secretary shall include
  written notice, in language that is easily understandable, explaining--
  (1) the 6-month limitation on the exclusion from resources under section
  1613(a)(7) of the Social Security Act (42 U.S.C. 1382b(a)(7));
  (2) the potential effects under title XVI of the Social Security Act,
  attributable to the receipt of such payment, including--
  (A) potential discontinuation of eligibility; and
  (B) potential reductions in the amount of benefits;
  (3) the possibility of establishing a supplemental security income (SSI)
  special needs trust account that--
  (A) designates the individual for whom such payment is made as the
  beneficiary; and
  (B) may not be considered as income or resources for the purposes of this
  title; and
  (4) that legal assistance in establishing such a trust may be available
  through legal referral services offered by a State or local bar association,
  or through the Legal Services Corporation.
 PART III--AID TO FAMILIES WITH DEPENDENT CHILDREN
SEC. 6020. OPTIONAL MONTHLY REPORTING AND RETROSPECTIVE BUDGETING.
  (a) OPTIONAL MONTHLY REPORTING- Section 402(a)(14) (42 U.S.C. 602(a)(14))
  is amended--
  (1) by striking `with respect to' and all that follows through `(A) provide'
  and insert `provide, at the option of the State and with respect to such
  category or categories as the State may select and identify in its State
  plan (A)';
  (2) by striking `(with the prior approval of the Secretary in recent work
  history and earned income cases)'; and
  (3) by striking `upon a determination' and all that follows through
  `paragraph'.
  (b) OPTIONAL RETROSPECTIVE BUDGETING- Section 402(a)(13) (42
  U.S.C. 602(a)(13)) is amended by striking all that precedes subparagraph
  (A) and inserting the following:
  `(13) at the option of the State, provide that--'.
  (c) EFFECTIVE DATE- The amendments made by this section shall take effect
  with respect to reports pertaining to, or aid payable for, months beginning
  in or after October 1990.
SEC. 6021. CHILDREN RECEIVING FOSTER CARE MAINTENANCE OR ADOPTION ASSISTANCE
PAYMENTS NOT TREATED AS MEMBER OF FAMILY UNIT FOR PURPOSES OF DETERMINING
ELIGIBILITY FOR, OR AMOUNT OF, AFDC BENEFIT.
  (a) IN GENERAL- Part A of title IV (42 U.S.C. 601 et seq.) is amended by
  inserting after section 408 the following new section:
`EXCLUSION FROM AFDC UNIT OF CHILD FOR WHOM FEDERAL, STATE, OR LOCAL FOSTER
CARE MAINTENANCE OR ADOPTION ASSISTANCE PAYMENTS ARE MADE.
  `SEC. 409. Notwithstanding any other provision of this title, a child with
  respect to whom foster care maintenance payments or adoption assistance
  payments are made under part E or under State or local law shall not, for
  the period for which such payments are made, be regarded as a member of a
  family for purposes of determining the amount of benefits of the family under
  this part, and the income and resources of such child shall be excluded from
  the income and resources of a family under this part unless, in the case
  of a child with respect to whom adoption assistance payments are so made,
  such exclusion would reduce the benefits of the family under this part.'.
  (b) CONFORMING REPEAL- Section 478 (42 U.S.C. 678) is hereby repealed.
  (c) EFFECTIVE DATE- The amendment made by subsection (a) and the repeal
  made by subsection (b) shall take effect on the first day of the first
  month beginning after the date that is 6 months after the date of the
  enactment of this Act.
SEC. 6022. ELIMINATION OF TERM LEGAL GUARDIAN.
  (a) IN GENERAL- Section 402(a)(39) (42 U.S.C. 602(a)(39)) is amended--
  (1) by striking `or legal guardian'; and
  (2) by striking `or legal guardians'.
  (b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect
  on the date of the enactment of this Act.
SEC. 6023. REPORTING OF CHILD ABUSE AND NEGLECT.
  (a) CONCERNING AFDC APPLICANTS AND RECIPIENTS-
  (1) IN GENERAL- Section 402(a)(16) (42 U.S.C. 602(a)(16)) is amended to
  read as follows:
  `(16) provide that the State agency will--
  `(A) report to an appropriate agency or official, known or suspected
  instances of physical or mental injury, sexual abuse or exploitation, or
  negligent treatment or maltreatment of a child receiving aid under part
  B or this part under circumstances which indicate that the child's health
  or welfare is threatened thereby; and
  `(B) provide such information with respect to a situation described in
  subparagraph (A) as the State agency may have;'.
  (2) CONFORMING AMENDMENTS- Section 402(a)(9) (42 U.S.C. 602(a)(9))
  is amended--
  (A) in subparagraph (C), by striking `and'; and
  (B) by inserting `, and (E) reporting and providing information pursuant
  to paragraph (16) to appropriate authorities with respect to known or
  suspected child abuse or neglect' before the 1st semicolon.
  (b) CONCERNING RECIPIENTS OF FOSTER CARE OR ADOPTION ASSISTANCE-
  (1) IN GENERAL- Section 471(a)(9) (42 U.S.C. 671(a)(9)) is amended to read
  as follows:
  `(9) provide that the State agency will--
  `(A) report to an appropriate agency or official, known or suspected
  instances of physical or mental injury, sexual abuse or exploitation, or
  negligent treatment or maltreatment of a child receiving aid under part
  B or this part under circumstances which indicate that the child's health
  or welfare is threatened thereby; and
  `(B) provide such information with respect to a situation described in
  subparagraph (A) as the State agency may have;'.
  (2) CONFORMING AMENDMENTS- Section 471(a)(8) (42 U.S.C. 671(a)(8))
  is amended--
  (A) in subparagraph (C), by striking `and'; and
  (B) by inserting `, and (E) reporting and providing information pursuant to
  paragraph (9) to appropriate authorities with respect to known or suspected
  child abuse or neglect' before the 1st semicolon.
  (c) EFFECTIVE DATE- The amendments made by this section shall take effect
  on the date of the enactment of this Act.
SEC. 6024. DISCLOSURE OF INFORMATION ABOUT AFDC APPLICANTS AND RECIPIENTS
AUTHORIZED FOR PURPOSES DIRECTLY CONNECTED TO STATE FOSTER CARE AND ADOPTION
ASSISTANCE PROGRAMS.
  (a) IN GENERAL- Section 402(a)(9)(A) (42 U.S.C. 602(a)(9)(A)) is amended
  by striking `or D' and inserting `, D, or E'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date of the enactment of this Act.
SEC. 6025. REPATRIATION.
  (a) IN GENERAL- Section 1113 of the Social Security Act (42 U.S.C. 1313),
  as amended by section 140 of the Customs and Trade Act of 1990 (Public
  Law 101-382) is amended--
  (1) in subsection (d), by striking `on or after October 1, 1989' and
  inserting `after September 30, 1991'; and
  (2) by adding at the end thereof the following new subsection:
  `(e)(1) The Secretary may accept on behalf of the United States gifts,
  in cash or in kind, for use in carrying out the program established
  under this section.  Gifts in the form of cash shall be credited to the
  appropriation account from which this program is funded, in addition to
  amounts otherwise appropriated, and shall remain available until expended.
  `(2) Gifts accepted under paragraph (1) shall be available for obligation
  or other use by the United States only to the extent and in the amounts
  provided in appropriation Acts.'.
  (b) EFFECTIVE DATE- The amendments made by subsection (a) shall be effective
  for fiscal years beginning after September 30, 1989.
SEC. 6026. GOOD CAUSE EXCEPTION TO REQUIRED COOPERATION FOR TRANSITIONAL
CHILD CARE BENEFITS.
  (a) IN GENERAL- Section 402(g)(1)(A)(vi)(II) (42 U.S.C. 602(g)(1)(A)(vi)(II))
  is amended by inserting `, without good cause for refusing to cooperate as
  determined by the State agency in accordance with standards prescribed by the
  Secretary, which standards shall take into consideration the best interests
  of the child for whom child care is to be provided' before the period.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date of the enactment of this Act.
SEC. 6027. TECHNICAL CORRECTION REGARDING PENALTY FOR FAILURE TO PARTICIPATE
IN JOBS PROGRAM.
  (a) IN GENERAL- Section 407(b)(1)(B)(iii) (42 U.S.C. 607(b)(1)(B)(iii))
  is amended--
  (1) before the dash, in the matter preceding subclause (I), by striking
  `child or relative specified in subsection (a)' and inserting `parent
  described in subparagraph (A)(i) and to any spouse of such parent (unless
  such spouse is participating in a program under part F)'; and
  (2) in subclause (I), by striking `if and for so long as such child's
  parent described in subparagraph (A)(i)' and inserting `if and for so long
  as such parent'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date of the enactment of this Act.
SEC. 6028. TECHNICAL CORRECTION REGARDING AFDC-UP ELIGIBILITY REQUIREMENTS.
  (a) IN GENERAL- Section 407(d)(1) (42 U.S.C. 607(d)(1)) is amended--
  (1) by striking `a calendar quarter (A)' and inserting `(A) a calendar
  quarter';
  (2) by striking `or' at the end of subparagraph (A); and
  (3) by inserting `, and (C) a calendar quarter ending before October 1990 in
  which such individual participated in a community work experience program
  under section 409 (as in effect immediately before October 1, 1990) or the
  work incentive program established under part C (as in effect immediately
  before such date)' before the semicolon.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date of the enactment of this Act.
SEC. 6029. TECHNICAL AMENDMENTS TO NATIONAL COMMISSION ON CHILDREN.
  Section 1139(d) (42 U.S.C. 1320b-9(d)) is amended in the matter preceding
  paragraph (1), by striking `an interim report no later than March 31,
  1991, and a final report no later than September 30, 1990' and inserting
  `an interim report no later than September 30, 1990, and a final report
  no later than March 31, 1991'.
SEC. 6030. FAMILY SUPPORT ACT DEMONSTRATION PROJECTS.
  Section 505 of the Family Support Act of 1988 is amended--
  (1) in subsection (a), by inserting `in each of the fiscal years 1990,
  1991, and 1992,' before `shall'; and
  (2) in subsection (e), by striking `September 30, 1989' and inserting
  `September 30 of the fiscal year specified in the agreement described in
  subsection (a)'.
SEC. 6031. STUDY OF JOBS PROGRAMS OPERATED BY INDIAN TRIBES AND ALASKA
NATIVE ORGANIZATIONS.
  (a) IN GENERAL- Not later than 180 days after the date of the enactment
  of this Act, the Comptroller General of the United States (hereafter
  in this section referred to as the `Comptroller') shall conduct a study
  of the implementation of section 482(i) of the Social Security Act (42
  U.S.C. 682(i)) relating to job opportunities and basic skills training
  programs (hereafter in this section referred to as `JOBS programs') operated
  by Indian tribes and Alaskan Native organizations (as defined in paragraph
  (5) of such section 482(i)).
  (b) REQUIREMENTS FOR STUDY- In conducting the study described in subsection
  (a) the Comptroller shall--
  (A) identify any problems associated with the implementation of section
  482(i) of the Social Security Act; and
  (B) assess (to the extent practicable) the effectiveness of the JOBS
  programs operated by Indian tribes and Alaskan Native organizations.
  (c) REPORT- Upon completion of the study described in subsection (a),
  the Comptroller shall submit a report to the appropriate committees of
  the Congress that includes--
  (A) a summary of the findings of the study; and
  (B) recommendations with respect to proposed legislation or changes
  in administrative policy to improve the effectiveness of JOBS programs
  conducted pursuant to section 482(i) of the Social Security Act.
SEC. 6032. PROPOSED EMERGENCY ASSISTANCE AND AFDC SPECIAL NEEDS REGULATIONS.
  Subsection (c) of section 8005 of the Omnibus Budget Reconciliation Act
  of 1989 is amended by striking `1990' and inserting `1991'.
 PART IV--CHILD WELFARE AND FOSTER CARE
SEC. 6040. CLARIFICATION OF TERMINOLOGY RELATING TO ADMINISTRATIVE COSTS.
  (a) IN GENERAL- Paragraph (3) of section 474(a) (42 U.S.C. 674(a)(3)) is
  amended by inserting `provision of child placement services and for the'
  before `proper and efficient'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date of the enactment of this Act.
SEC. 6041. SECTION 427 TRIENNIAL REVIEWS.
  (a) AMENDMENTS TO SECTION 10406 OF OBRA 1989- Section 10406 of the Omnibus
  Budget Reconciliation Act of 1989 (42 U.S.C. 627 note) is amended--
  (1) by striking `1991' and inserting `1992';
  (2) by striking `1990' and inserting `1991'; and
  (3) in the section heading, by striking `1990' and inserting `1991'.
  (b) CONFORMING AMENDMENT- The item relating to section 10406 in the table of
  contents appearing immediately after section 10000 of such Act is amended
  by striking `1990' and inserting `1991'.
SEC. 6042. INDEPENDENT LIVING INITIATIVES.
  (a) IN GENERAL- Subparagraph (C) of section 477(a)(2) (42 U.S.C. 677(a)(2))
  is amended--
  (1) by inserting `who has not attained age 21' after `may at the option
  of the State also include any child'; and
  (2) by striking `, but such child' and all that follows through `care'.
  (b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply
  to payments made under part E of title IV of the Social Security Act for
  fiscal years beginning with fiscal year 1991.
SEC. 6043. GRANTS TO STATES FOR CHILD CARE.
  (a) RULES GOVERNING PROVISION OF CHILD CARE TO ELIGIBLE FAMILIES- Section
  402 (42 U.S.C. 602) is amended by adding at the end the following:
  `(i)(1) Each State agency may, to the extent that it determines that
  resources are available, provide child care in accordance with paragraph
  (2) to any low income family that the State determines is not eligible
  for aid under the State plan approved under this part, needs such care
  in order to work, and would be at risk of becoming eligible for aid under
  the State plan approved under this part if such care were not provided.
  `(2) The State agency may provide child care pursuant to paragraph (1) by--
  `(A) providing such care directly;
  `(B) arranging such care through providers by use of purchase of service
  contracts or vouchers;
  `(C) providing cash or vouchers in advance to the caretaker relative in
  the family;
  `(D) reimbursing the caretaker relative in the family; or
  `(E) adopting such other arrangements as the agency deems appropriate.
  `(3)(A) A family provided with child care under paragraph (1) shall
  contribute to such care in accordance with a sliding scale formula
  established by the State agency based on the family's ability to pay.
  `(B) The State agency shall make payment for the cost of child care
  provided under paragraph (1) with respect to a family in an amount that
  is the lesser of--
  `(i) the actual cost of such care; and
  `(ii) the applicable local market rate (as determined by the State in
  accordance with regulations issued by the Secretary).
  `(4) The value of any child care provided or arranged (or any amount received
  as payment for such care or reimbursement for costs incurred for the care)
  under this subsection--
  `(A) shall not be treated as income or as a deductible expense for purposes
  of any other Federal or federally assisted program that bases eligibility
  for or amount of benefits upon need; and
  `(B) may not be claimed as an employment-related expense for purposes of
  the credit under section 21 of the Internal Revenue Code of 1986.
  `(5) Amounts expended by the State agency for child care under paragraph
  (1) shall be treated as amounts for which payment may be made to a State
  under section 403(n) only to the extent that--
  `(A) such amounts are, subject to paragraph (3)(B), within such limits as
  the State may prescribe;
  `(B) the care involved meets applicable standards of State and local law; and
  `(C) the entity providing the care allows parental access.
  `(6)(i) Each State shall prepare reports annually, beginning with fiscal
  year 1993, on the activities of the State carried out with funds made
  available under section 403(n).
  `(ii) The State shall make copies of each report required by this paragraph
  available for public inspection within the State, shall transmit a copy
  of each such report to the Secretary, and shall provide a copy of each
  such report, on request, to any interested public agency.
  `(iii) The Secretary shall annually compile the State reports transmitted
  to the Secretary pursuant to clause (ii), and submit such annual compilation
  to the Congress.
  `(B) Each report prepared and transmitted by a State under subparagraph
  (A) shall set forth with respect to child care services funded under
  section 403(n)--
  `(i) showing separately for center-based child care services, group home
  child care services, family child care services, and relative care services
  the number of children who received such services, and the average cost
  of such services;
  `(ii) the criteria applied in determining eligibility or priority for
  receiving services, and sliding fee schedules;
  `(iii) the child care licensing and regulatory (including registration)
  requirements in effect in the State with respect to each type of service
  specified in clause (i); and
  `(iv) the enforcement policies and practices in effect in the State which
  apply to licensed and regulated child care providers (including providers
  required to register).
  `(C) Within 12 months after the date of the enactment of this subsection,
  the Secretary shall establish uniform reporting requirements for use by
  the States in preparing the information required by this paragraph, and
  make such other provision as may be necessary or appropriate to ensure that
  compliance with this subsection will not be unduly burdensome on the States.
  `(D) The Secretary shall issue an interim report on the matters described
  in subparagraphs (A) and (B) with respect to fiscal year 1992, based on
  information made available by the States.
  (b) PAYMENTS TO STATES- Section 403 (42 U.S.C. 603) is amended by adding
  at the end the following:
  `(n)(1) In addition to any payment under subsection (a) or (l), each State
  shall be entitled to payment from the Secretary of an amount equal to the
  lesser of--
  `(A) the Federal medical assistance percentage (as defined in section
  1905(b)) of the expenditures by the State in providing child care pursuant
  to section 402(i) for any fiscal year; and
  `(B) the amount determined under paragraph (2) with respect to the State
  for the fiscal year.
  `(2)(A) The limitation determined under this paragraph with respect to a
  State for any fiscal year is the amount that bears the same ratio to the
  amount specified in subparagraph (B) for such fiscal year as the number of
  children residing in the State in the second preceding fiscal year bears
  to the number of children residing in the United States in the second
  preceding fiscal year.
  `(B) The amount specified in this subparagraph is--
  `(i) $65,000,000 for fiscal year 1991;
  `(ii) $65,000,000 for fiscal year 1992;
  `(iii) $65,000,000 for fiscal year 1993;
  `(iv) $65,000,000 for fiscal year 1994; and
  `(v) $65,000,000 for fiscal year 1995, and for each fiscal year thereafter.'.
  (c) INCREASE AND EXTENSION OF GRANTS TO STATES TO IMPROVE CHILD CARE
  LICENSING AND REGISTRATION REQUIREMENTS, AND TO MONITOR CHILD CARE PROVIDED
  TO CHILDREN RECEIVING AFDC- Section 402(g)(6)(D) (42 U.S.C. 602(g)(6)(D))
  is amended by inserting `, and $35,000,000 for each of fiscal years 1992,
  1993, and 1994' before the period.
  (e) COORDINATION WITH OTHER PROGRAMS FOR CHILDREN- Section 402(g)(7)
  (42 U.S.C. 602(g)(7)) is amended by inserting `and subsection (i)' after
  `this subsection'.
  (f) EFFECTIVE DATE- Except as otherwise expressly provided, the amendments
  made by this section shall take effect on October 1, 1990.
PART V--OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE
SEC. 6050. CONTINUATION OF DISABILITY BENEFITS DURING APPEAL.
  Subsection (g) of section 223 (42 U.S.C. 423(g)) is amended--
  (1) in paragraph (1)(i), in the matter following subparagraph (C), by
  inserting `or' after `hearing,', and by striking `pending, or (iii) June
  1991.' and inserting `pending.'; and
  (2) by striking paragraph (3).
SEC. 6051. REPEAL OF SPECIAL DISABILITY STANDARD FOR WIDOWS AND WIDOWERS.
  (a) IN GENERAL- Section 223(d)(2) (42 U.S.C. 423(d)(2)) is amended--
  (1) in subparagraph (A), by striking `(except a widow, surviving divorced
  wife, widower, or surviving divorced husband for purposes of section 202(e)
  or (f))';
  (2) by striking subparagraph (B); and
  (3) by redesignating subparagraph (C) as subparagraph (B).
  (b) CONFORMING AMENDMENTS-
  (1) The third sentence of section 216(i)(1) (42 U.S.C. 416(i)(1)) is
  amended by striking `(2)(C)' and inserting `(2)(B)'.
  (2) Section 223(f)(1)(B) (42 U.S.C. 423(f)(1)(B)) is amended to read
  as follows:
  `(B) the individual is now able to engage in substantial gainful activity;
  or'.
  (3) Section 223(f)(2)(A)(ii) of such Act (42 U.S.C. 423(f)(2)(A)(ii))
  is amended to read as follows:
  `(ii) the individual is now able to engage in substantial gainful activity,
  or'.
  (4) Section 223(f)(3) of such Act (42 U.S.C. 423(f)(3)) is amended by
  striking `therefore--' and all that follows and inserting `therefore the
  individual is able to engage in substantial gainful activity; or'.
  (5) Section 223(f) of such Act is further amended, in the matter following
  paragraph (4), by striking `(or gainful activity in the case of a widow,
  surviving divorced wife, widower, or surviving divorced husband)' each
  place it appears.
  (c) TRANSITIONAL RULES RELATING TO MEDICAID AND MEDICARE ELIGIBILITY-
  (1) DETERMINATION OF MEDICAID ELIGIBILITY- Section 1634(d) (42
  U.S.C. 1383c(d)) is amended--
  (A) by redesignating paragraphs (1) and (2) as subparagraphs (A) and
  (B), respectively;
  (B) by striking `(d) If any person--' and inserting `(d)(1) This subsection
  applies with respect to any person who--';
  (C) in subparagraph (A) (as redesignated), by striking `as required'
  and all that follows through `but not entitled' and inserting `being then
  not entitled';
  (D) in subparagraph (B) (as redesignated), by striking the comma at the
  end and inserting a period; and
  (E) by striking `such person shall' and all that follows and inserting
  the following new paragraph:
  `(2) For purposes of title XIX, each person with respect to whom this
  subsection applies--
  `(A) shall be deemed to be a recipient of supplemental security income
  benefits under this title if such person received such a benefit for the
  month before the month in which such person began to receive a benefit
  described in paragraph (1)(A), and
  `(B) shall be deemed to be a recipient of State supplementary payments
  of the type referred to in section 1616(a) of this Act (or payments of
  the type described in section 212(a) of Public Law 93-66) which are paid
  by the Secretary under an agreement referred to in such section 1616(a)
  (or in section 212(b) of Public Law 93-66) if such person received such
  a payment for the month before the month in which such person began to
  receive a benefit described in paragraph (1)(A),
for so long as such person (i) would be eligible for such supplemental
security income benefits, or such State supplementary payments, in the
absence of benefits described in paragraph (1)(A), and (ii) is not entitled
to hospital insurance benefits under part A of title XVIII.'.
  (2) INCLUSION OF MONTHS OF SSI ELIGIBILITY WITHIN 5-MONTH DISABILITY
  WAITING PERIOD AND 24-MONTH MEDICARE WAITING PERIOD-
  (A) WIDOW'S BENEFITS BASED ON DISABILITY- Section 202(e)(5) (42
  U.S.C. 402(e)(5)) is amended--
  (i) in subparagraph (B), by striking `(i)' and `(ii)' and inserting `(I)'
  and `(II)', respectively;
  (ii) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii),
  respectively;
  (iii) by inserting `(A)' after `(5)'; and
  (iv) by adding at the end the following new subparagraph:
  `(B) For purposes of paragraph (1)(F)(i), each month in the period commencing
  with the first month for which such widow or surviving divorced wife is
  first eligible for supplemental security income benefits under title XVI,
  or State supplementary payments of the type referred to in section 1616(a)
  (or payments of the type described in section 212(a) of Public Law 93-66)
  which are paid by the Secretary under an agreement referred to in section
  1616(a) (or in section 212(b) of Public Law 93-66), shall be included as
  one of the months of such waiting period for which the requirements of
  subparagraph (A) have been met.'.
  (B) WIDOWER'S BENEFITS BASED ON DISABILITY- Section 202(f)(6) (42
  U.S.C. 402(f)(6)) is amended--
  (i) in subparagraph (B), by striking `(i)' and `(ii)' and inserting `(I)'
  and `(II)', respectively;
  (ii) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii),
  respectively;
  (iii) by inserting `(A)' after `(6)'; and
  (iv) by adding at the end the following new subparagraph:
  `(B) For purposes of paragraph (1)(F)(i), each month in the period commencing
  with the first month for which such widower or surviving divorced husband is
  first eligible for supplemental security income benefits under title XVI,
  or State supplementary payments of the type referred to in section 1616(a)
  (or payments of the type described in section 212(a) of Public Law 93-66)
  which are paid by the Secretary under an agreement referred to in section
  1616(a) (or in section 212(b) of Public Law 93-66), shall be included as
  one of the months of such waiting period for which the requirements of
  subparagraph (A) have been met.'.
  (C) MEDICARE BENEFITS- Section 226(e)(1) (42 U.S.C. 426(e)(1)) is amended--
  (i) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii),
  respectively;
  (ii) by inserting `(A)' after `(e)(1)'; and
  (iii) by adding at the end the following new subparagraph:
  `(B) For purposes of subsection (b)(2)(A)(iii), each month in the period
  commencing with the first month for which an individual is first eligible for
  supplemental security income benefits under title XVI, or State supplementary
  payments of the type referred to in section 1616(a) of this Act (or payments
  of the type described in section 212(a) of Public Law 93-66) which are
  paid by the Secretary under an agreement referred to in section 1616(a)
  (or in section 212(b) of Public Law 93-66), shall be included as one of the
  24 months for which such individual must have been entitled to widow's or
  widower's insurance benefits on the basis of disability in order to become
  entitled to hospital insurance benefits on that basis.'.
  (d) DEEMED DISABILITY FOR PURPOSES OF ENTITLEMENT TO WIDOW'S AND WIDOWER'S
  INSURANCE BENEFITS FOR WIDOWS AND WIDOWERS ON SSI ROLLS-
  (1) WIDOW'S INSURANCE BENEFITS- Section 202(e) (42 U.S.C. 402(e)) is
  amended by adding at the end the following new paragraph:
  `(9) An individual shall be deemed to be under a disability for purposes
  of paragraph (1)(B)(ii) if such individual is eligible for supplemental
  security income benefits under title XVI, or State supplementary payments of
  the type referred to in section 1616(a) (or payments of the type described
  in section 212(a) of Public Law 93-66) which are paid by the Secretary
  under an agreement referred to in section 1616(a) (or in section 212(b) of
  Public Law 93-66), for the month for which all requirements of paragraph
  (1) for entitlement to benefits under this subsection (other than being
  under a disability) are met.'.
  (2) WIDOWER'S INSURANCE BENEFITS- Section 202(f) (42 U.S.C. 402(f)) is
  amended by adding at the end the following new paragraph:
  `(9) An individual shall be deemed to be under a disability for purposes
  of paragraph (1)(B)(ii) if such individual is eligible for supplemental
  security income benefits under title XVI, or State supplementary payments of
  the type referred to in section 1616(a) (or payments of the type described
  in section 212(a) of Public Law 93-66) which are paid by the Secretary under
  an agreement referred to in such section 1616(a) (or in section 212(b) of
  Public Law 93-66), for the month for which all requirements of paragraph
  (1) for entitlement to benefits under this subsection (other than being
  under a disability) are met.'.
  (e) EFFECTIVE DATE-
  (1) IN GENERAL- The amendments made by this section (other than paragraphs
  (1) and (2)(C) of subsection (c)) shall apply with respect to monthly
  insurance benefits for months after December 1990 for which applications
  are filed on or after January 1, 1991, or are pending on such date. The
  amendments made by subsection (c)(1) shall apply with respect to medical
  assistance provided after December 1990. The amendments made by subsection
  (c)(2)(C) shall apply with respect to items and services furnished after
  December 1990.
  (2) APPLICATION REQUIREMENTS FOR CERTAIN INDIVIDUALS ON BENEFIT ROLLS-
  In the case of any individual who--
  (A) is entitled to disability insurance benefits under section 223 of
  the Social Security Act for December 1990 or is eligible for supplemental
  security income benefits under title XVI of such Act, or State supplementary
  payments of the type referred to in section 1616(a) of such Act (or payments
  of the type described in section 212(a) of Public Law 93-66) which are paid
  by the Secretary under an agreement referred to in such section 1616(a)
  (or in section 212(b) of Public Law 93-66), for January 1991,
  (B) applied for widow's or widower's insurance benefits under subsection
  (e) or (f) of section 202 of the Social Security Act during 1990, and
  (C) is not entitled to such benefits under such subsection (e) or (f) for
  any month on the basis of such application by reason of the definition
  of disability under section 223(d)(2)(B) of the Social Security Act (as
  in effect immediately before the date of the enactment of this Act), and
  would have been so entitled for such month on the basis of such application
  if the amendments made by this section had been applied with respect to
  such application,
for purposes of determining such individual's entitlement to such benefits
under subsection (e) or (f) of section 202 of the Social Security Act for
months after December 1990, the requirement of paragraph (1)(C)(i) of such
subsection shall be deemed to have been met.
SEC. 6052. DEPENDENCY REQUIREMENTS APPLICABLE TO A CHILD ADOPTED BY A
SURVIVING SPOUSE.
  (a) IN GENERAL- Section 216(e) (42 U.S.C. 416(e)) is amended in the second
  sentence--
  (1) by striking `at the time of such individual's death living in such
  individual's household' and inserting `either living with or receiving
  at least one-half of his support from such individual at the time of such
  individual's death'; and
  (2) by striking `; except' and all that follows and inserting a period.
  (b) EFFECTIVE DATE- The amendments made by this section shall apply with
  respect to benefits payable for months after December 1990, but only on
  the basis of applications filed after December 31, 1990.
SEC. 6053. REPRESENTATIVE PAYEE REFORMS.
  (a) IMPROVEMENTS IN THE REPRESENTATIVE PAYEE SELECTION AND RECRUITMENT
  PROCESS-
  (1) AUTHORITY FOR CERTIFICATION OF PAYMENTS TO REPRESENTATIVE PAYEES-
  (A) TITLE II- Section 205(j)(1) (42 U.S.C. 405(j)) is amended to read
  as follows:
`Representative Payees
  `(j)(1) If the Secretary determines that the interest of any individual
  under this title would be served thereby, certification of payment
  of such individual's benefit under this title may be made, regardless
  of the legal competency or incompetency of the individual, either for
  direct payment to the individual, or for his or her use and benefit, to
  another individual or organization with respect to whom the requirements of
  paragraph (2) have been met (hereinafter in this subsection referred to as
  the individual's `representative payee'). If the Secretary or a court of
  competent jurisdiction determines that a representative payee has misused
  any individual's benefit paid to such representative payee pursuant to
  this subsection or section 1631(a)(2), the Secretary shall promptly revoke
  certification for payment of benefits to such representative payee pursuant
  to this subsection and certify payment to an alternate representative
  payee or to the individual.'.
  (B) TITLE XVI-
  (i) IN GENERAL- Section 1631(a)(2)(A) (42 U.S.C. 1383(a)(2)(A)) is amended
  to read as follows:
  `(A)(i) Payments of the benefit of any individual may be made to any such
  individual or to the eligible spouse (if any) of such individual or partly
  to each.
  `(ii) Upon a determination by the Secretary that the interest of such
  individual would be served thereby, or in the case of any individual
  or eligible spouse referred to in section 1611(e)(3)(A), such payments
  shall be made, regardless of the legal competency or incompetency of
  the individual or eligible spouse, to another individual who, or to a
  qualified organization (as defined in subparagraph (D)(ii)) which, is
  interested in or concerned with the welfare of such individual and with
  respect to whom the requirements of subparagraph (B) have been met (in
  this paragraph referred to as such individual's `representative payee')
  for the use and benefit of the individual or eligible spouse.
  `(iii) If the Secretary or a court of competent jurisdiction determines that
  the representative payee of an individual or eligible spouse has misused any
  benefits which have been paid to the representative payee pursuant to clause
  (ii) or section 205(j)(1), the Secretary shall promptly terminate payment
  of benefits to the representative payee pursuant to this subparagraph, and
  provide for payment of benefits to the individual or eligible spouse or to
  an alternative representative payee of the individual or eligible spouse.'.
  (ii) CONFORMING AMENDMENTS- Section 1631(a)(2)(C) (42 U.S.C. 1383(a)(2)(C))
  is amended--
  (I) in clause (i), by striking `a person other than the individual or
  spouse entitled to such payment' and inserting `representative payee of
  an individual or spouse';
  (II) in clauses (ii), (iii), and (iv), by striking `other person to whom
  such payment is made' each place it appears and inserting `representative
  payee'; and
  (III) in clause (v)--
  (aa) by striking `person receiving payments on behalf of another' and
  inserting `representative payee'; and
  (bb) by striking `person receiving such payments' and inserting
  `representative payee'.
  (2) PROCEDURE FOR SELECTING REPRESENTATIVE PAYEES-
  (A) IN GENERAL-
  (i) TITLE II- Section 205(j)(2) (42 U.S.C. 405(j)(2)) is amended to read
  as follows:
  `(2)(A) Any certification made under paragraph (1) for payment of benefits
  to an individual's representative payee shall be made on the basis of--
  `(i) an investigation by the Secretary of the person to serve as
  representative payee, which shall be conducted in advance of such
  certification and shall, to the extent practicable, include a face-to-face
  interview with the person to serve as representative payee, and
  `(ii) adequate evidence that such certification is in the interest of such
  individual (as determined by the Secretary in regulations).
  `(B)(i) As part of the investigation referred to in subparagraph (A)(i),
  the Secretary shall--
  `(I) require the person being investigated to submit documented proof of
  the identity of such person, unless information establishing such identity
  has been submitted with an application for benefits under this title or
  title XVI,
  `(II) verify such person's social security account number (or employer
  identification number),
  `(III) determine whether such person has been convicted of a violation of
  section 208 or 1632, and
  `(IV) determine whether certification of payment of benefits to such person
  has been revoked pursuant to this subsection or payment of benefits to
  such person has been terminated pursuant to section 1631(a)(2)(A)(iii)
  by reason of misuse of funds paid as benefits under this title or title XVI.
  `(ii) The Secretary shall establish and maintain 2 centralized files,
  which shall be updated periodically and which shall be in a form which
  renders them readily retrievable by each servicing office of the Social
  Security Administration. Such files shall consist of--
  `(I) a list of the names and social security account numbers (or employer
  identification numbers) of all persons with respect to whom certification of
  payment of benefits has been revoked on or after January 1, 1991, pursuant
  to this subsection, or with respect to whom payment of benefits has been
  terminated on or after such date pursuant to section 1631(a)(2), by reason
  of misuse of funds paid as benefits under this title or title XVI, and
  `(II) a list of the names and social security account numbers (or employer
  identification numbers) of all persons who have been convicted of a
  violation of section 208, 1107(a), 1128B, or 1632.
  `(C)(i) Benefits of an individual may not be certified for payment to any
  other person pursuant to this subsection if--
  `(I) such person has previously been convicted as described in subparagraph
  (B)(i)(III),
  `(II) except as provided in clause (ii), certification of payment of
  benefits to such person under this subsection has previously been revoked
  as described in subparagraph (B)(i)(IV), or payment of benefits to such
  person pursuant to section 1631(a)(2)(A)(ii) has previously been terminated
  as described in section 1631(a)(2)(B)(ii)(IV), or
  `(III) except as provided in clause (iii), such person is a creditor of
  such individual who provides such individual with goods or services for
  consideration.
  `(ii) The Secretary shall prescribe regulations under which the Secretary
  may grant exemptions to any person from the provisions of clause (i)(II)
  on a case-by-case basis if such exemption is in the best interest of the
  individual whose benefits would be paid to such person pursuant to this
  subsection.
  `(iii) Clause (i)(III) shall not apply with respect to any person who is
  a creditor referred to therein if such creditor is--
  `(I) a relative of such individual if such relative resides in the same
  household as such individual,
  `(II) a legal guardian or legal representative of such individual,
  `(III) a facility that is licensed or certified as a care facility under
  the law of a State or a political subdivision of a State,
  `(IV) a person who is an administrator, owner, or employee of a facility
  referred to in subclause (III) if such individual resides in such facility,
  and the certification of payment to such facility or such person is made only
  after good faith efforts have been made by the local servicing office of
  the Social Security Administration to locate an alternative representative
  payee to whom such certification of payment would serve the best interests
  of such individual, or
  `(V) an individual who is determined by the Secretary, on the basis of
  written findings and under procedures which the Secretary shall prescribe
  by regulation, to be acceptable to serve as a representative payee.
  `(iv) The procedures referred to in clause (iii)(V) shall require the
  individual who will serve as representative payee to establish, to the
  satisfaction of the Secretary, that--
  `(I) such individual poses no risk to the beneficiary,
  `(II) the financial relationship of such individual to the beneficiary
  poses no substantial conflict of interest, and
  `(III) no other more suitable representative payee can be found.
  `(D)(i) Subject to clause (ii), if the Secretary makes a determination
  described in the first sentence of paragraph (1) with respect to any
  individual's benefit and determines that direct payment of the benefit
  to the individual would cause substantial harm to the individual, the
  Secretary may defer (in the case of initial entitlement) or suspend (in
  the case of existing entitlement) direct payment of such benefit to the
  individual, until such time as the selection of a representative payee is
  made pursuant to this subsection.
  `(ii)(I) Except as provided in subclause (II), any deferral or suspension
  of direct payment of a benefit pursuant to clause (i) shall be for a period
  of not more than 1 month.
  `(II) Subclause (I) shall not apply in any case in which the individual
  is, as of the date of the Secretary's determination, legally incompetent
  or under the age of 15.
  `(iii) Payment pursuant to this subsection of any benefits which are
  deferred or suspended pending the selection of a representative payee
  shall be made to the individual or the representative payee as a single
  sum or over such period of time as the Secretary determines is in the best
  interest of the individual entitled to such benefits.
  `(E)(i) Any individual who is dissatisfied with a determination by the
  Secretary to certify payment of such individual's benefit to a representative
  payee under paragraph (1) or with the designation of a particular person to
  serve as representative payee shall be entitled to a hearing by the Secretary
  to the same extent as is provided in subsection (b), and to judicial review
  of the Secretary's final decision as is provided in subsection (g).
  `(ii) In advance of the certification of payment of an individual's benefit
  to a representative payee under paragraph (1), the Secretary shall provide
  written notice of the Secretary's initial determination to certify such
  payment. Such notice shall be provided to such individual, except that,
  if such individual--
  `(I) is under the age of 15,
  `(II) is an unemancipated minor under the age of 18, or
  `(III) is legally incompetent,
then such notice shall be provided solely to the legal guardian or legal
representative of such individual.
  `(iii) Any such notice shall be clearly written in language that is easily
  understandable to the reader, shall identify the person to be designated
  as such individual's representative payee, and shall explain to the reader
  the right under clause (i) of such individual or such individual's legal
  guardian or legal representative--
  `(I) to appeal a determination that a representative payee is necessary
  for such individual,
  `(II) to appeal the designation of a particular person to serve as the
  representative payee of such individual, and
  `(III) to review the evidence upon which such designation is based and
  submit additional evidence.'.
  (ii) TITLE XVI- Section 1631(a)(2)(B) (42 U.S.C. 1383(a)(2)(B)) is amended
  to read as follows:
  `(B)(i) Any provision made under subparagraph (A) for payment of benefits
  to the representative payee of an individual or eligible spouse shall be
  made on the basis of--
  `(I) an investigation by the Secretary of the person to serve as
  representative payee, which shall be conducted before such payment, and
  shall, to the extent practicable, include a face-to-face interview with
  the person; and
  `(II) adequate evidence that such payment is in the interest of the
  individual or eligible spouse (as determined by the Secretary in
  regulations).
  `(ii) As part of the investigation referred to in clause (i)(I), the
  Secretary shall--
  `(I) require the person being investigated to submit documented proof of
  the identity of such person, unless information establishing such identity
  was submitted with an application for benefits under title II or this title;
  `(II) verify the social security account number (or employer identification
  number) of such person;
  `(III) determine whether such person has been convicted of a violation of
  section 208 or 1632; and
  `(IV) determine whether payment of benefits to such person has been
  terminated pursuant to subparagraph (A)(ii)(II), and whether certification
  of payment of benefits to such person has been revoked pursuant to section
  205(j), by reason of misuse of funds paid as benefits under title II or
  this title.
  `(iii) Benefits of an individual may not be paid to any other person
  pursuant to subparagraph (A)(ii) if--
  `(I) such person has previously been convicted as described in clause
  (ii)(III);
  `(II) except as provided in clause (iv), payment of benefits to such
  person pursuant to subparagraph (A)(ii) has previously been terminated as
  described in clause (ii)(IV), or certification of payment of benefits to
  such person under section 215(j) has previously been revoked as described
  in section 215(j)(2)(B)(i)(IV); or
  `(III) except as provided in clause (v), such person is a creditor of
  the individual who provides the individual with goods or services for
  consideration.
  `(iv) The Secretary shall prescribe regulations under which the Secretary
  may grant an exemption from clause (iii)(II) to any person on a case-by-case
  basis if such exemption would be in the best interest of the individual
  or eligible spouse whose benefits under this title would be paid to such
  person pursuant to subparagraph (A)(ii).
  `(v) Clause (iii)(III) shall not apply to any person who is a creditor of
  the individual if the creditor is--
  `(I) a relative of the individual if such relative resides in the same
  household as such individual;
  `(II) a legal guardian or legal representative of the individual;
  `(III) a facility that is licensed or certified as a care facility under
  the law of a State or a political subdivision of a State;
  `(IV) a person who is an administrator, owner, or employee of a facility
  referred to in subclause (III) if the individual resides in the facility,
  and the payment of benefits under this title to the facility or the person
  is made only after good faith efforts have been made by the local servicing
  office of the Social Security Administration to locate an alternative
  representative payee to whom the payment of such benefits would serve the
  best interests of the individual; or
  `(V) an individual who is determined by the Secretary, on the basis of
  written findings and under procedures which the Secretary shall prescribe
  by regulation, to be acceptable to serve as a representative payee.
  `(vi) The procedures referred to in clause (v)(V) shall require the
  individual who will serve as representative payee to establish, to the
  satisfaction of the Secretary, that--
  `(I) such individual poses no risk to the beneficiary;
  `(II) the financial relationship of such individual to the beneficiary
  poses no substantial conflict of interest; and
  `(III) no other more suitable representative payee can be found.
  `(vii) Subject to clause (viii), if the Secretary makes a determination
  described in subparagraph (A)(ii) with respect to any individual's benefit
  and determines that direct payment of the benefit to the individual would
  cause substantial harm to the individual, the Secretary may defer (in the
  case of initial entitlement) or suspend (in the case of existing entitlement)
  direct payment of such benefit to the individual, until such time as the
  selection of a representative payee is made pursuant to this subparagraph.
  `(viii)(I) Except as provided in subclause (I), any deferral or suspension
  of direct payment of a benefit pursuant to clause (vii) shall be for a
  period of not more than 1 month.
  `(II) Clause (I) shall not apply in any case in which the individual
  or eligible spouse is, as of the date of the Secretary's determination,
  legally incompetent or under the age 15 years.
  `(ix) Payment pursuant to this subparagraph of any benefits which are
  deferred or suspended pending the selection of a representative payee
  shall be made--
  `(I) to the representative payee upon such selection; and
  `(II) as a single payment, or over such period as the Secretary determines
  is in the best interests of the individual entitled to such benefits.
  `(x) Any individual who is dissatisfied with a determination by the Secretary
  under subparagraph (A)(ii) to pay such individual's benefits under this
  title to a representative payee, or with the selection of a particular
  person to be the representative payee of the individual, shall be entitled
  to a hearing by the Secretary, and to judicial review of the Secretary's
  final decision, to the same extent as is provided in subsection (c).
  `(xi) Before the first payment of an individual's benefit to a representative
  payee under subparagraph (A)(ii), the Secretary shall provide written
  notice of the Secretary's initial determination to so make the payment. Such
  notice shall be provided to--
  `(I) the legal guardian or legal representative of the individual, if the
  individual has not attained the age of 15 years, is an unemancipated minor
  who has not attained the age of 18 years, or is legally incompetent; or
  `(II) the individual, in any other case.
  `(xii) Any notice referred to in clause (xi) shall be clearly written in
  language that is easily understandable to the reader, identify the person
  selected to be the representative payee of the individual, and explain
  to the reader the right under clause (x) of the individual or the legal
  guardian or legal representative of the individual--
  `(I) to appeal a determination that a representative payee is necessary
  for the individual;
  `(II) to appeal the selection of a particular person to be the representative
  payee of the individual; and
  `(III) to review the evidence upon which the selection is based and submit
  additional evidence.'.
  (B) REPORT ON FEASIBILITY OF OBTAINING READY ACCESS TO CERTAIN CRIMINAL
  FRAUD RECORDS- As soon as practicable after the date of the enactment of
  this Act, the Secretary of Health and Human Services, in consultation with
  the Attorney General of the United States and the Secretary of the Treasury,
  shall study the feasibility of establishing and maintaining a current list,
  which would be readily available to local offices of the Social Security
  Administration for use in investigations undertaken pursuant to section
  205(j)(2) or 1631(a)(2)(B) of the Social Security Act, of the names and
  social security account numbers of individuals who have been convicted of
  a violation of section 495 of title 18, United States Code. The Secretary
  of Health and Human Services shall, not later than July 1, 1992, submit the
  results of such study, together with any recommendations, to the Committee
  on Ways and Means of the House of Representatives and the Committee on
  Finance of the Senate.
  (3) PROVISION FOR COMPENSATION OF QUALIFIED ORGANIZATIONS SERVING AS
  REPRESENTATIVE PAYEES-
  (A) IN GENERAL-
  (i) TITLE II- Section 205(j) (42 U.S.C. 405(j)) is amended by redesignating
  paragraph (4) as paragraph (5), and by inserting after paragraph (3)
  the following new paragraph:
  `(4)(A) A qualified organization may collect from an individual a monthly
  fee for expenses (including overhead) incurred by such organization in
  providing services performed as such individual's representative payee
  pursuant to this subsection if such fee does not exceed the lesser of--
  `(i) 10 percent of the monthly benefit involved, or
  `(ii) $25.00 per month.
Any agreement providing for a fee in excess of the amount permitted under
this subparagraph shall be void and shall be treated as misuse by such
organization of such individual's benefits.
  `(B) For purposes of this paragraph, the term `qualified organization'
  means any community-based nonprofit social service agency which is bonded
  or licensed in each State in which it serves as a representative payee
  and which, in accordance with any applicable regulations of the Secretary--
  `(i) regularly provides services as the representative payee, pursuant to
  this subsection or section 1631(a)(2), concurrently to 5 or more individuals,
  `(ii) demonstrates to the satisfaction of the Secretary that such agency
  is not otherwise a creditor of any such individual, and
  `(iii) was in existence on October 1, 1988.
  `(C) Any qualified organization which knowingly charges or collects,
  directly or indirectly, any fee in excess of the maximum fee prescribed
  under subparagraph (A) or makes any agreement, directly or indirectly,
  to charge or collect any fee in excess of such maximum fee, shall be fined
  in accordance with title 18, United States Code.
  `(D) This paragraph shall cease to be effective on January 1, 1994.'.
  (ii) TITLE XVI- Section 1631(a)(2) (42 U.S.C. 1383(a)(2)) is amended--
  (I) by redesignating subparagraph (D) as subparagraph (E);
  (III) by inserting after subparagraph (C) the following:
  `(D)(i) A qualified organization may collect from an individual a monthly
  fee for expenses (including overhead) incurred by such organization in
  providing services performed as such individual's representative payee
  pursuant to subparagraph (A)(ii) if the fee does not exceed the lesser of--
  `(I) 10 percent of the monthly benefit involved, or
  `(II) $25.00 per month.
Any agreement providing for a fee in excess of the amount permitted under
this clause shall be void and shall be treated as misuse by the organization
of the individual's benefits under this title.
  `(ii) For purposes of this subparagraph, the term `qualified organization'
  means any community-based nonprofit social service agency which--
  `(I) is bonded or licensed in each State in which the agency serves as a
  representative payee;
  `(II) in accordance with any applicable regulations of the Secretary--
  `(aa) regularly provides services as a representative payee pursuant
  to subparagraph (A)(ii) or section 205(j)(4) concurrently to 5 or more
  individuals;
  `(bb) demonstrates to the satisfaction of the Secretary that such person
  is not otherwise a creditor of any such individual; and
  `(cc) was in existence on October 1, 1988.
  `(iii) Any qualified organization which knowingly charges or collects,
  directly or indirectly, any fee in excess of the maximum fee prescribed
  under clause (i) or makes any agreement, directly or indirectly, to
  charge or collect any fee in excess of such maximum fee, shall be fined
  in accordance with title 18, United States Code.
  `(iv) This subparagraph shall cease to be effective on January 1, 1994.'.
  (B) STUDIES AND REPORTS-
  (i) REPORT BY SECRETARY OF HEALTH AND HUMAN SERVICES- Not later than January
  1, 1993, the Secretary of Health and Human Services shall transmit a report
  to the Committee on Ways and Means of the House of Representatives and the
  Committee on Finance of the Senate setting forth the number and types of
  qualified organizations which have served as representative payees and
  have collected fees for such service pursuant to any amendment made by
  subparagraph (A), and
  (ii) REPORT BY COMPTROLLER GENERAL- Not later than July 1, 1992, the
  Comptroller General of the United States shall conduct a study of the
  advantages and disadvantages of allowing qualified organizations serving
  as representative payees to charge fees pursuant to the amendments made
  by subparagraph (A) and shall transmit a report to the Committee on Ways
  and Means of the House of Representatives and the Committee on Finance of
  the Senate setting forth the results of such study.
  (4) STUDY RELATING TO FEASIBILITY OF SCREENING OF INDIVIDUALS WITH CRIMINAL
  RECORDS- As soon as practicable after the date of the enactment of this
  Act, the Secretary of Health and Human Services shall conduct a study of
  the feasibility of determining the type of representative payee applicant
  most likely to have a felony or misdemeanor conviction, the suitability
  of individuals with prior convictions to serve as representative payees,
  and the circumstances under which such applicants could be allowed to serve
  as representative payees. The Secretary shall transmit the results of such
  study to the Committee on Ways and Means of the House of Representatives
  and the Committee on Finance of the Senate not later than July 1, 1992.
  (5) EFFECTIVE DATES-
  (A) USE AND SELECTION OF REPRESENTATIVE PAYEES- The amendments made by
  paragraphs (1) and (2) shall take effect July 1, 1991, and shall apply
  only with respect to--
  (i) certifications of payment of benefits under title II of the Social
  Security Act to representative payees made on or after such date; and
  (ii) provisions for payment of benefits under title XVI of such Act to
  representative payees made on or after such date.
  (B) COMPENSATION OF REPRESENTATIVE PAYEES- The amendments made by paragraph
  (3) shall take effect January 1, 1992, and the Secretary of Health and
  Human Services shall prescribe initial regulations necessary to carry out
  such amendments not later than such date.
  (b) IMPROVEMENTS IN RECORDKEEPING AND AUDITING REQUIREMENTS-
  (1) IMPROVED ACCESS TO CERTAIN INFORMATION-
  (A) IN GENERAL- Section 205(j)(3) (42 U.S.C. 605(j)(3)) is amended--
  (i) by striking subparagraph (B);
  (ii) by redesignating subparagraphs (C), (D), and (E) as subparagraphs (B),
  (C), and (D), respectively;
  (iii) in subparagraph (D) (as so redesignated), by striking `(A), (B),
  (C), and (D)' and inserting `(A), (B), and (C)'; and
  (iv) by adding at the end the following new subparagraphs:
  `(E) The Secretary shall maintain a centralized file, which shall be updated
  periodically and which shall be in a form which will be readily retrievable
  by each servicing office of the Social Security Administration, of--
  `(i) the address and the social security account number (or employer
  identification number) of each representative payee who is receiving
  benefit payments pursuant to this subsection or section 1631(a)(2), and
  `(ii) the address and social security account number of each individual
  for whom each representative payee is reported to be providing services
  as representative payee pursuant to this subsection or section 1631(a)(2).
  `(F) Each servicing office of the Administration shall maintain a list,
  which shall be updated periodically, of public agencies and community-based
  nonprofit social service agencies which are qualified to serve as
  representative payees pursuant to this subsection or section 1631(a)(2)
  and which are located in the area served by such servicing office.'.
  (B) EFFECTIVE DATE- The amendments made by subparagraph (A) shall take effect
  October 1, 1992, and the Secretary of Health and Human Services shall take
  such actions as are necessary to ensure that the requirements of section
  205(j)(3)(E) of the Social Security Act (as amended by subparagraph (A)
  of this paragraph) are satisfied as of such date.
  (2) STUDY RELATING TO MORE STRINGENT OVERSIGHT OF HIGH-RISK REPRESENTATIVE
  PAYEES-
  (A) IN GENERAL- As soon as practicable after the date of the enactment
  of this Act, the Secretary of Health and Human Services shall conduct a
  study of the need for a more stringent accounting system for high-risk
  representative payees than is otherwise generally provided under section
  205(j)(3) or 1631(a)(2)(C) of the Social Security Act, which would include
  such additional reporting requirements, record maintenance requirements,
  and other measures as the Secretary considers necessary to determine whether
  services are being appropriately provided by such payees in accordance
  with such sections 205(j) and 1631(a)(2).
  (B) SPECIAL PROCEDURES- In such study, the Secretary shall determine the
  appropriate means of implementing more stringent, statistically valid
  procedures for--
  (i) reviewing reports which would be submitted to the Secretary under any
  system described in subparagraph (A), and
  (ii) periodic, random audits of records which would be kept under such
  a system,
in order to identify any instances in which high-risk representative payees
are misusing payments made pursuant to section 205(j) or 1631(a)(2) of the
Social Security Act.
  (C) HIGH-RISK REPRESENTATIVE PAYEE- For purposes of this paragraph, the term
  `high-risk representative payee' means a representative payee under section
  205(j) or 1631(a)(2) of the Social Security Act (42 U.S.C. 405(j) and
  1383(a)(2), respectively) (other than a Federal or State institution) who--
  (i) regularly provides concurrent services as a representative payee
  under such section 205(j), such section 1631(a)(2), or both such sections,
  for 5 or more individuals who are unrelated to such representative payee,
  (ii) is neither related to an individual on whose behalf the payee is
  being paid benefits nor living in the same household with such individual,
  (iii) is a creditor of such individual, or
  (iv) is in such other category of payees as the Secretary may determine
  appropriate.
  (D) REPORT- The Secretary shall report to the Committee on Ways and
  Means of the House of Representatives and the Committee on Finance of
  the Senate the results of the study, together with any recommendations,
  not later than July 1, 1992. Such report shall include an evaluation of
  the feasibility and desirability of legislation implementing stricter
  accounting and review procedures for high-risk representative payees in
  all servicing offices of the Social Security Administration (together with
  proposed legislative language).
  (3) DEMONSTRATION PROJECTS RELATING TO PROVISION OF INFORMATION TO LOCAL
  AGENCIES PROVIDING CHILD AND ADULT PROTECTIVE SERVICES-
  (A) IN GENERAL- As soon as practicable after the date of the enactment
  of this Act, the Secretary of Health and Human Services shall implement
  a demonstration project under this paragraph in all or part of not fewer
  than 2 States. Under each such project, the Secretary shall enter into an
  agreement with the State in which the project is located to make readily
  available, for the duration of the project, to the appropriate State agency,
  a listing of addresses of multiple benefit recipients.
  (B) LISTING OF ADDRESSES OF MULTIPLE BENEFIT RECIPIENTS- The list referred
  to in subparagraph (A) shall consist of a current list setting forth each
  address within the State at which benefits under title II, benefits under
  title XVI, or any combination of such benefits are being received by 5
  or more individuals. For purposes of this subparagraph, in the case of
  benefits under title II, all individuals receiving benefits on the basis
  of the wages and self-employment income of the same individual shall be
  counted as 1 individual.
  (C) APPROPRIATE STATE AGENCY- The appropriate State agency referred to in
  subparagraph (A) is the agency of the State which the Secretary determines
  is primarily responsible for regulating care facilities operated in such
  State or providing for child and adult protective services in such State.
  (D) REPORT- The Secretary shall report to the Committee on Ways and Means
  of the House of Representatives and the Committee on Finance of the Senate
  concerning such demonstration projects, together with any recommendations,
  not later than July 1, 1992. Such report shall include an evaluation of
  the feasibility and desirability of legislation implementing the programs
  established pursuant to this paragraph on a permanent basis.
  (E) STATE- For purposes of this paragraph, the term `State' means a State,
  including the entities included in such term by section 210(h) of the
  Social Security Act (42 U.S.C. 410(h)).
  (c) REPORTS TO THE CONGRESS-
  (1) IN GENERAL-
  (A) TITLE II- Section 205(j)(5) (as so redesignated by subsection
  (a)(3)(A)(i) of this section) is amended to read as follows:
  `(5) The Secretary shall include as a part of the annual report required
  under section 704 information with respect to the implementation of the
  preceding provisions of this subsection, including the number of cases in
  which the representative payee was changed, the number of cases discovered
  where there has been a misuse of funds, how any such cases were dealt
  with by the Secretary, the final disposition of such cases, including any
  criminal penalties imposed, and such other information as the Secretary
  determines to be appropriate.'.
  (B) TITLE XVI- Section 1631(a)(2)(E) (42 U.S.C. 1383(a)(2)(E)), as so
  redesignated by subsection (a)(3)(A)(ii)(I) of this section, is amended
  to read as follows:
  `(E) The Secretary shall include as a part of the annual report required
  under section 704 information with respect to the implementation of the
  preceding provisions of this paragraph, including--
  `(i) the number of cases in which the representative payee was changed;
  `(ii) the number of cases discovered where there has been a misuse of funds;
  `(iii) how any such cases were dealt with by the Secretary;
  `(iv) the final disposition of such cases (including any criminal penalties
  imposed); and
  `(v) such other information as the Secretary determines to be appropriate.'.
  (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply with
  respect to annual reports issued for years after 1991.
  (3) FEASIBILITY STUDY REGARDING INVOLVEMENT OF DEPARTMENT OF VETERANS
  AFFAIRS- As soon as practicable after the date of the enactment of this
  Act, the Secretary of Health and Human Services, in cooperation with the
  Secretary of Veterans Affairs, shall conduct a study of the feasibility
  of designating the Department of Veterans Affairs as the lead agency for
  purposes of selecting, appointing, and monitoring representative payees
  for those individuals who receive benefits paid under title II or XVI of
  the Social Security Act and benefits paid by the Department of Veterans
  Affairs. Not later than 180 days after the date of the enactment of this Act,
  the Secretary of Health and Human Services shall transmit to the Committee
  on Ways and Means of the House of Representatives and the Committee on
  Finance of the Senate a report setting forth the results of such study,
  together with any recommendations.
SEC. 6054. FEES FOR REPRESENTATION OF CLAIMANTS IN ADMINISTRATIVE PROCEEDINGS.
  (a) IN GENERAL-
  (1) TITLE II- Subsection (a) of section 206 (42 U.S.C. 406(a)) is amended--
  (A) by inserting `(1)' after `(a)';
  (B) in the fifth sentence, by striking `Whenever' and inserting `Except
  as provided in paragraph (2)(A), whenever'; and
  (C) by striking the sixth sentence and all that follows through `Any person
  who' in the seventh sentence and inserting the following:
  `(2)(A) In the case of a claim of entitlement to past-due benefits under
  this title, if--
  `(i) an agreement between the claimant and another person regarding any
  fee to be recovered by such person to compensate such person for services
  with respect to the claim is presented in writing to the Secretary prior
  to the time of the Secretary's determination regarding the claim,
  `(ii) the fee specified in the agreement does not exceed the lesser of--
  `(I) 25 percent of the total amount of such past-due benefits (as determined
  before any applicable reduction under section 1127(a)), or
  `(II) $4,000, and
  `(iii) the determination is favorable to the claimant,
then the Secretary shall approve that agreement at the time of the favorable
determination, and (subject to paragraph (3)) the fee specified in the
agreement shall be the maximum fee. The Secretary may from time to time
increase the dollar amount under clause (ii)(II) to the extent that the rate
of increase in such amount, as determined over the period since January 1,
1991, does not at any time exceed the rate of increase in primary insurance
amounts under section 215(i) since such date. The Secretary shall publish
any such increased amount in the Federal Register.
  `(B) For purposes of this subsection, the term `past-due benefits' excludes
  any benefits with respect to which payment has been continued pursuant to
  section 223(g).
  `(C) In the case of a claim with respect to which the Secretary has approved
  an agreement pursuant to subparagraph (A), the Secretary shall provide
  the claimant and the person representing the claimant a written notice of--
  `(i) the dollar amount of the past-due benefits (as determined before any
  applicable reduction under section 1127(a)) and the dollar amount of the
  past-due benefits payable to the claimant,
  `(ii) the dollar amount of the maximum fee which may be charged or recovered
  as determined under this paragraph, and
  `(iii) a description of the procedures for review under paragraph (3).
  `(3)(A) The Secretary shall provide by regulation for review of the amount
  which would otherwise be the maximum fee as determined under paragraph
  (2) if, within 15 days after receipt of the notice provided pursuant to
  paragraph (2)(C)--
  `(i) the claimant, or the administrative law judge or other adjudicator
  who made the favorable determination, submits a written request to the
  Secretary to reduce the maximum fee, or
  `(ii) the person representing the claimant submits a written request to
  the Secretary to increase the maximum fee.
Any such review shall be conducted after providing the claimant, the person
representing the claimant, and the adjudicator with reasonable notice of
such request and an opportunity to submit written information in favor of
or in opposition to such request. The adjudicator may request the Secretary
to reduce the maximum fee only on the basis of evidence of the failure of
the person representing the claimant to represent adequately the claimant's
interest or on the basis of evidence that the fee is clearly excessive for
services rendered.
  `(B)(i) In the case of a request for review under subparagraph (A)
  by the claimant or by the person representing the claimant, such review
  shall be conducted by the administrative law judge who made the favorable
  determination or, if the Secretary determines that such administrative
  law judge is unavailable or if the determination was not made by an
  administrative law judge, such review shall be conducted by another person
  designated by the Secretary for such purpose.
  `(ii) In the case of a request by the adjudicator for review under
  subparagraph (A), the review shall be conducted by the Secretary or by
  an administrative law judge or other person (other than such adjudicator)
  who is designated by the Secretary.
  `(C) Upon completion of the review, the administrative law judge or other
  person conducting the review shall affirm or modify the amount which would
  otherwise be the maximum fee. Any such amount so affirmed or modified
  shall be considered the amount of the maximum fee which may be recovered
  under paragraph (2). The decision of the administrative law judge or other
  person conducting the review shall not be subject to further review.
  `(4)(A) Subject to subparagraph (B), if the claimant is determined to be
  entitled to past-due benefits under this title and the person representing
  the claimant is an attorney, the Secretary shall, notwithstanding section
  205(i), certify for payment out of such past-due benefits (as determined
  before any applicable reduction under section 1127(a)) to such attorney an
  amount equal to the maximum fee, but not in excess of 25 percent of such
  past-due benefits (as determined before any applicable reduction under
  section 1127(a)).
  `(B) The Secretary shall not in any case certify any amount for payment
  to the attorney pursuant to this paragraph before the expiration of the
  15-day period referred to in paragraph (3)(A) or, in the case of any review
  conducted under paragraph (3), before the completion of such review.
  `(5) Any person who'.
  (2) TITLE XVI- Paragraph (2)(A) of section 1631 (d) (42 U.S.C. 1383(d)(2)(A))
  is amended to read as follows:
  `(2)(A) The provisions of section 206(a) (other than paragraphs (2)(B) and
  (4) thereof) shall apply to this part to the same extent as they apply in
  the case of title II, and in so applying such provisions `section 1631(g)'
  shall be substituted for `section 1127(a)'.'.
  (b) PROTECTION OF ATTORNEY'S FEES FROM OFFSETTING SSI BENEFITS- Subsection
  (a) of section 1127 (42 U.S.C. 1320a-6(a)) is amended by adding at the
  end the following new sentence: `A benefit under title II shall not be
  reduced pursuant to the preceding sentence to the extent that any amount
  of such benefit would not otherwise be available for payment in full of
  the maximum fee which may be recov- ered from such benefit by an attorney
  pursuant to section 206(a)(4).'.
  (c) LIMITATION OF TRAVEL EXPENSES FOR REP- RESENTATION OF CLAIMANTS AT
  ADMINISTRATIVE PROCEEDINGS- Section 201(j) (42 U.S.C. 401(j)), section
  1631(h) (42 U.S.C. 1383(h)), and section 1817(i) (42 U.S.C. 1395i(i)) are
  each amended by adding at the end the following new sentence: `The amount
  available for payment under this subsection for travel by a representative
  to attend an administrative proceeding before an administrative law judge
  or other adjudicator shall not exceed the maximum amount allowable under
  this subsection for such travel originating within the geographic area of
  the office having jurisdiction over such proceeding.'.
  (d) EFFECTIVE DATE- The amendments made by this section shall apply
  with respect to determinations made on or after January 1, 1991, and to
  reimbursement for travel expenses incurred on or after January 1, 1991.
SEC. 6055. APPLICABILITY OF ADMINISTRATIVE RES JUDICATA; RELATED NOTICE
REQUIREMENTS.
  (a) IN GENERAL-
  (1) TITLE II- Section 205(b) of the Social Security Act (42 U.S.C 405(b))
  is amended by adding at the end the following new paragraph:
  `(3)(A) A failure to timely request review of an initial adverse
  determination with respect to an application for any benefit under this
  title or an adverse determination on reconsideration of such an initial
  determination shall not serve as a basis for denial of a subsequent
  application for any benefit under this title if the applicant demonstrates
  that the applicant, or any other individual referred to in paragraph
  (1), failed to so request such a review acting in good faith reliance
  upon incorrect, incomplete, or misleading information, relating to the
  consequences of reapplying for benefits in lieu of seeking review of an
  adverse determination, provided by any officer or employee of the Social
  Security Administration or any State agency acting under section 221.
  `(B) In any notice of an adverse determination with respect to which a
  review may be requested under paragraph (1), the Secretary shall describe in
  clear and specific language the effect on possible entitlement to benefits
  under this title of choosing to reapply in lieu of requesting review of
  the determination.'.
  (2) TITLE XVI- Section 1631(c)(1) (42 U.S.C 1383(c)(1)) is amended--
  (A) by inserting `(A)' after `(c)(1)'; and
  (B) by adding at the end the following:
  `(B)(A) A failure to timely request review of an initial adverse
  determination with respect to an application for any payment under this
  title or an adverse determination on reconsideration of such an initial
  determination shall not serve as a basis for denial of a subsequent
  application for any payment under this title if the applicant demonstrates
  that the applicant, or any other individual referred to in paragraph
  (1), failed to so request such a review acting in good faith reliance
  upon incorrect, incomplete, or misleading information, relating to the
  consequences of reapplying for payments in lieu of seeking review of an
  adverse determination, provided by any officer or employee of the Social
  Security Administration.
  `(B) In any notice of an adverse determination with respect to which a
  review may be requested under paragraph (1), the Secretary shall describe in
  clear and specific language the effect on possible entitlement to payments
  under this title of choosing to reapply in lieu of requesting review of
  the determination.'.
  (b) EFFECTIVE DATE- The amendments made by this section shall apply with
  respect to adverse determinations made on or after January 1, 1991.
SEC. 6056. DEMONSTRATION PROJECTS RELATING TO ACCOUNTABILITY FOR TELEPHONE
SERVICE CENTER COMMUNICATIONS.
  (a) IN GENERAL- The Secretary of Health and Human Services shall develop and
  carry out demonstration projects designed to implement the accountability
  procedures described in subsection (b) in each of not fewer than 3 telephone
  service centers operated by the Social Security Administration. Telephone
  service centers shall be selected for implementation of the accountability
  procedures as they would operate in conjunction with the service technology
  most recently employed by the Social Security Administration. Each such
  demonstration project shall commence not later than 180 days after the
  date of the enactment of this Act and shall remain in operation for not
  less than 1 year and not more than 3 years.
  (b) ACCOUNTABILITY PROCEDURES-
  (1) IN GENERAL- During the period of each demonstration project developed
  and carried out by the Secretary of Health and Human Services with respect
  to a telephone service center pursuant to subsection (a), the Secretary
  shall provide for the application at such telephone service center of
  accountability procedures consisting of the following:
  (A) In any case in which a person communicates with the Social Security
  Administration by telephone at such telephone service center and provides
  in such communication his or her name, address, and such other identifying
  information as the Secretary determines necessary and appropriate for
  purposes of this subparagraph, the Secretary must thereafter promptly
  provide such person a written receipt which sets forth--
  (i) the name of any individual representing the Social Security
  Administration with whom such person has spoken in such communication,
  (ii) the date of the communication;
  (iii) a description of the nature of the communication,
  (iv) any action that an individual representing the Social Security
  Administration has indicated in the communication will be taken in response
  to the communication, and
  (v) a description of the information or advice offered in the communication
  by an individual representing the Social Security Administration.
  (B) Such person must be notified during the communication by an individual
  representing the Social Security Administration that, if adequate identifying
  information is provided to the Administration, a receipt described in
  subparagraph (A) will be provided to such person.
  (C) A copy of any receipt required to be provided to any person under
  subparagraph (A) must be--
  (i) included in the file maintained by the Social Security Administration
  relating to such person, or
  (ii) if there is no such file, otherwise retained by the Social Security
  Administration in retrievable form until the end of the 5-year period
  following the termination of the project.
   (2) EXCLUSION OF CERTAIN ROUTINE TELEPHONE COMMUNICATIONS- The Secretary
   may exclude from demonstration projects carried out pursuant to this
   section routine telephone communications which do not relate to potential
   or current eligibility or entitlement to benefits.
  (c) REPORT-
  (1) IN GENERAL--The Secretary of Health and Human Services shall submit to
  the Committee on Ways and Means of the House of Representatives and the
  Committee on Finance of the Senate a written report on the progress of
  the demonstration projects conducted pursuant to this section, together
  with any related data and materials which the Secretary may consider
  appropriate. The report shall be submitted not later than 90 days after
  the termination of the project.
  (2) SPECIFIC MATTERS TO BE INCLUDED- The report required under paragraph
  (1) shall--
  (A) assess the costs and benefits of the accountability procedures,
  (B) identify any major difficulties encountered in implementing the
  demonstration project, and
   (C) assess the feasibility of implementing the accountability procedures
   on a national basis.
SEC. 6057. TELEPHONE ACCESS TO THE SOCIAL SECURITY ADMINISTRATION.
  (a) REQUIRED MINIMUM LEVEL OF ACCESS TO LOCAL OFFICES- In addition to such
  other access by telephone to offices of the Social Security Administration
  as the Secretary of Health and Human Services may consider appropriate,
  the Secretary shall maintain access by telephone to local offices of the
  Social Security Administration at the level of access generally available
  as of September 30, 1989.
  (b) TELEPHONE LISTINGS- The Secretary shall make such requests of local
  telephone utilities in the United States as are necessary to ensure that
  the listings subsequently maintained and published by such utilities for
  each locality include the address and telephone number for each local
  office of the Social Security Administration to which direct telephone
  access is maintained under subsection (a) in such locality. Such listing
  may also include information concerning the availability of a toll-free
  number which may be called for general information.
  (c) REPORT BY SECRETARY- Not later than January 1, 1993, the Secretary shall
  submit to the Committee on Ways and Means of the House of Representatives
  and the Committee on Finance of the Senate a report which--
  (1) assesses the impact of the requirements established by this section
  on the Social Security Administration's allocation of resources, workload
  levels, and service to the public, and
  (2) presents a plan for using new, innovative technologies to enhance access
  to the Social Security Administration, including access to local offices.
  (d) GAO REPORT- Not later than 90 days after the date of the enactment of
  this Act, the Comptroller General of the United States shall submit a report
  to the Committee on Ways and Means of the House of Representatives and the
  Committee on Finance of the Senate describing the level of telephone access
  by the public to the local offices of the Social Security Administration.
  (e) EFFECTIVE DATE- Subsections (a) and (b) shall take effect on April
  1, 1991.
SEC. 6058. AMENDMENTS RELATING TO SOCIAL SECURITY ACCOUNT STATEMENTS.
  (a) IN GENERAL- Section 1142 of the Social Security Act (42 U.S.C. 1320b-13),
  as added by section 10308 of the Omnibus Budget Reconciliation Act of 1989
  (103 Stat. 2485), is amended--
  (1) by striking `sec. 1142.' and inserting `sec. 1143.'; and
  (2) in subsection (c)(2), by striking ` a biennial' and inserting `an
  annual'.
  (b) DISCLOSURE OF ADDRESS INFORMATION BY INTERNAL REVENUE SERVICE TO SOCIAL
  SECURITY ADMINISTRATION-
  (1) IN GENERAL- Section 6103(m) of the Internal Revenue Code of 1986
  (relating to disclosure of taxpayer identity information) is amended by
  adding at the end the following new paragraph:
  `(7) SOCIAL SECURITY ACCOUNT STATEMENT FURNISHED BY SOCIAL SECURITY
  ADMINISTRATION- Upon written request by the Commissioner of Social
  Security, the Secretary may disclose the mailing address of any taxpayer
  who is entitled to receive a social security account statement pursuant
  to section 1143(c) of the Social Security Act, for use only by officers,
  employees or agents of the Social Security Administration for purposes of
  mailing such statement to such taxpayer.'.
  (2) SAFEGUARDS- Section 6103(p)(4) of such Code (relating to safeguards)
  is amended, in the matter following subparagraph (f)(iii), by striking
  `subsection (m)(2), (4), or (6)' and inserting `paragraph (2), (4), (6),
  or (7) of subsection (m)'.
  (3) UNAUTHORIZED DISCLOSURE PENALTIES- Paragraph (2) of section 7213(a)
  of such Code (relating to unauthorized disclosure of returns and return
  information) is amended by striking `(m)(2), (4), or (6)' and inserting
  `(m)(2), (4), (6), or (7)'.
SEC. 6059. TRIAL WORK PERIOD DURING ROLLING FIVE-YEAR PERIOD FOR ALL DISABLED
BENEFICIARIES.
  (a) IN GENERAL- Section 222(c)(42 U.S.C. 422(c)) is amended--
  (1) in paragraph (4)(A), by striking `, beginning on or after the first day
  of such period,' and inserting `in any period of 60 consecutive months,'; and
  (2) by striking paragraph (5).
  (b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect
  on January 1, 1992.
SEC. 6060. CONTINUATION OF BENEFITS ON ACCOUNT OF PARTICIPATION IN A NON-STATE
VOCATIONAL REHABILITATION PROGRAM.
  (a) IN GENERAL- Section 225(b) (42 U.S.C. 425(b)) is amended--
  (1) by striking paragraph (1) and inserting the following new paragraph:
  `(1) such individual is participating in an approved program of vocational
  rehabilitation services, and'; and
  (2) in paragraph (2), by striking `Commissioner of Social Security' and
  inserting `Secretary'.
  (b) PAYMENTS AND PROCEDURES- Section 1631(a)(6) (42 U.S.C. 1383(a)(6))
  is amended--
  (1) by striking subparagraph (A) and inserting the following new
  subparagraph:
  `(A) such individual is participating in an approved program of vocational
  rehabilitation services, and'; and
  (2) in subparagraph (B), by striking `Commissioner of Social Security'
  and inserting `Secretary'.
  (c) EFFECTIVE DATE- The amendments made by this section shall be effective
  with respect to benefits payable for months after the eleventh month
  following the month in which this Act is enacted and shall apply only
  with respect to individuals whose blindness or disability has or may have
  ceased after such eleventh month, as determined by the Secretary of Health
  and Human Services.
SEC. 6061. LIMITATION ON NEW ENTITLEMENT TO SPECIAL AGE-72 PAYMENTS.
  (a) IN GENERAL- Section 228(a)(2) (42 U.S.C. 428(a)(2)) is amended by
  striking `(B)' and inserting `(B)(i) attained such age after 1967 and
  before 1972, and (ii)'.
  (b) EFFECTIVE DATE-- The amendment made by subsection (a) shall apply with
  respect benefits payable on the basis of applications filed after the date
  of the enactment of this Act.
SEC. 6062. ELIMINATION OF ADVANCED CREDITING TO THE TRUST FUNDS OF SOCIAL
SECURITY PAYROLL TAXES AND REVENUES FROM TAXATION OF SOCIAL SECURITY BENEFITS.
  (a) IN GENERAL- Section 201(a)(42 U.S.C. 401(a)) is amended--
  (1) in the first sentence following clause (4)--
  (A) by striking `monthly on the first day of each calendar month' both
  places it appears and inserting `from time to time';
  (B) by striking `to be paid to or deposited into the Treasury during such
  month' and inserting `paid to or deposited into the Treasury'; and
  (2) in the last sentence, by striking `Fund;' and inserting
  `Fund. Notwithstanding the preceding sentence, in any month for which
  the Secretary of the Treasury determines that the assets of either such
  Trust Fund would otherwise be inadequate to meet such Fund's obligations,
  the Secretary of the Treasury shall transfer to such Trust Fund on the
  first day of such month the amount which would have been transferred to
  such Fund under this section as in effect on October 1, 1990; and'.
  (c) EFFECTIVE DATE- The amendments made by this section shall become
  effective on the first day of the month following the month in which this
  Act is enacted.
SEC. 6063. ELIMINATION OF ELIGIBILITY FOR RETROACTIVE BENEFITS FOR CERTAIN
INDIVIDUALS ELIGIBLE FOR REDUCED BENEFITS.
  (a) IN GENERAL- Section 202(j)(4) (42 U.S.C. 402(j)(4)) is amended--
  (1) in subparagraph (A), by striking `if the effect' and all that follows
  and inserting `if the amount of the monthly benefit to which such individual
  would otherwise be entitled for any such month would be subject to reduction
  pursuant to subsection (q).'; and
  (2) in subparagraph (B), by striking clauses (i) and (iv) and by
  redesignating clauses (ii), (iii), and (v) as clauses (i), (ii), and
  (iii), respectively.
  (b) EFFECTIVE DATE- The amendments made by this section shall apply with
  respect to applications for benefits filed on or after January 1, 1991.
SEC. 6064. CONSOLIDATION OF OLD METHODS OF COMPUTING PRIMARY INSURANCE AMOUNTS.
  (a) CONSOLIDATION OF COMPUTATION METHODS-
  (1) IN GENERAL- Section 215(a)(5) (42 U.S.C. 415(a)(5)) is amended--
  (A) by striking `For purposes of' and inserting `(A) Subject to subparagraphs
  (B), (C), (D) and (E), for purposes of';
  (B) by striking the last sentence; and
  (C) by adding at the end the following new subparagraphs:
  `(B)(i) Subject to clauses (ii), (iii), and (iv), and notwithstanding any
  other provision of law, the primary insurance amount of any individual
  described in subparagraph (C) shall be, in lieu of the primary insurance
  amount as computed pursuant to any of the provisions referred to in
  subparagraph (D), the primary insurance amount computed under subsection (a)
  of section 215 as in effect in December 1978, without regard to subsection
  (b)(4) and (c) of such section as so in effect.
  `(ii) The computation of a primary insurance amount under this subparagraph
  shall be subject to section 104(j)(2) of the Social Security Amendments
  of 1972 (relating to the number of elapsed years under section 215(b)).
  `(iii) In computing a primary insurance amount under this subparagraph,
  the dollar amount specified in paragraph (3) of section 215(a) (as in
  effect in December 1978) shall be increased to $11.50.
  `(iv) In the case of an individual to whom section 215(d) applies, the
  primary insurance amount of such individual shall be the greater of--
  `(I) the primary insurance amount computed under the preceding clauses of
  this subparagraph, or  `(II) the primary insurance amount computed under
  section 215(d).
  `(C) An individual is described in this subparagraph if--
  `(i) paragraph (1) does not apply to such individual by reason of such
  individual's eligibility for an old-age or disability insurance benefit,
  or the individual's death, prior to 1979, and
  `(ii) such individual's primary insurance amount computed under this
  section as in effect immediately before the date of the enactment of the
  Omnibus Budget Reconciliation Act of 1990 would have been computed under
  the provisions described in subparagraph (D).
  `(D) The provisions described in this subparagraph are--
  `(i) the provisions of this subsection as in effect prior to the enactment of
  the Social Security Amendments of 1965, if such provisions would preclude
  the use of wages prior to 1951 in the computation of the primary insurance
  amount,
  `(ii) the provisions of section 209 as in effect prior to the enactment
  of the Social Security Act Amendments of 1950, and
  `(iii) the provisions of section 215(d) as in effect prior to the enactment
  of the Social Security Amendments of 1977.
  `(E) For purposes of this paragraph, the table for determining primary
  insurance amounts and maximum family benefits contained in this section
  in December 1978 shall be revised as provided by subsection (i) for each
  year after 1978.'.
  (2) COMPUTATION OF PRIMARY INSURANCE BENEFIT UNDER 1939 ACT-
  (A) DIVISION OF WAGES BY ELAPSED YEARS- Section 215(d)(1) (42
  U.S.C. 415(d)(1)) is amended--
  (i) in subparagraph (A), by inserting `and subject to section 104(j)(2)
  of the Social Security Amendments of 1972' after `there- of'; and
  (ii) by striking `(B) For purposes' in subparagraph (B) and all that
  follows through clause (ii) of such subparagraph and inserting the following:
  `(B) For purposes of subparagraphs (B) and (C) of subsection (b)(2)
  (as so in effect)--
  `(i) the total wages prior to 1951 (as defined in subparagraph (C) of this
  paragraph) of an individual--
  `(I) shall, in the case of an individual who attained age 21 prior to 1950,
  be divided by the number of years (hereinafter in this subparagraph referred
  to as the `divisor') elapsing after the year in which the individual
  attained age 20, or 1936 if later, and prior to the earlier of the year
  of death or 1951, except that such divisor shall not include any calendar
  year entirely included in a period of disability, and in no case shall
  the divisor be less than one, and
  `(II) shall, in the case of an individual who died before 1950 and before
  attaining age 21, be divided by the number of years (hereinafter in this
  subparagraph referred to as the `divisor') elapsing after the second year
  prior to the year of death, or 1936 if later, and prior to the year of
  death, and in no case shall the divisor be less than one; and
  `(ii) the total wages prior to 1951 (as defined in subparagraph (C) of
  this paragraph) of an individual who either attained age 21 after 1949 or
  died after 1949 before attaining age 21, shall be divided by the number
  of years (hereinafter in this subparagraph referred to as the `divisor')
  elapsing after 1949 and prior to 1951.'.
  (B) CREDITING OF WAGES TO YEARS- Clause (iii) of section 215(d)(1)(B)
  (42 U.S.C. 415(d)(1)(B)(iii)) is amended to read as follows:
  `(iii) if the quotient exceeds $3,000, only $3,000 shall be deemed to be
  the individual's wages for each of the years which were used in computing
  the amount of the divisor, and the remainder of the individual's total
  wages prior to 1951 (I) if less than $3,000, shall be deemed credited
  to the computation base year (as defined in subsection (b)(2) as in
  effect in December 1977) immediately preceding the earliest year used in
  computing the amount of the divisor, or (II) if $3,000 or more, shall
  be deemed credited, in $3,000 increments, to the computation base year
  (as so defined) immediately preceding the earliest year used in computing
  the amount of the divisor and to each of the computation base years (as
  so defined) consecutively preceding that year, with any remainder less
  than $3,000 being credited to the computation base year (as so defined)
  immediately preceding the earliest year to which a full $3,000 increment
  was credited; and'.
  (C) APPLICABILITY- Section 215(d) is further amended--
  (i) in paragraph (2)(B), by striking `except as provided in paragraph (3),';
  (ii) by striking paragraph (2)(C) and inserting the following:
  `(C)(i) who becomes entitled to benefits under section 202(a) or 223 or
  who dies, or
  `(ii) whose primary insurance amount is required to be recomputed under
  paragraph (2), (6), or (7) of subsection (f) or under section 231.'; and
  (iii) by striking paragraphs (3) and (4).
  (3) CONFORMING AMENDMENTS-
  (A) Section 215(i)(4) (42 U.S.C. 415(i)(4)) is amended in the first
  sentence by inserting `and as amended by section 6064 of the Omnibus Budget
  Reconciliation Act of 1990' after `as then in effect'.
  (B) Section 203(a)(8) (42 U.S.C. 403(a)(8)) is amended in the first
  sentence by inserting `and as amended by section 6064 of the Omnibus
  Budget Reconciliation Act of 1990,' after `December 1978' the second place
  it appears.
  (C) Section 215(c) (42 U.S.C. 415(c)) is amended by striking `This' and
  inserting `Subject to the amendments made by section 6064 of the Omnibus
  Budget Reconciliation Act of 1990, this'.
  (D) Section 215(f)(7) (42 U.S.C. 415(f)(7)) is amended by striking the
  period at the end of the first sentence and inserting `, including a primary
  insurance amount computed under any such subsection whose operation is
  modified as a result of the amendments made by section 6064 of the Omnibus
  Budget Reconciliation Act of 1990'.
  (E)(i) Section 215(d) (42 U.S.C. 415(d)) is further amended by redesignating
  paragraph (5) as paragraph (3).
  (ii) Subsections (a)(7)(A), (a)(7)(C)(ii), and (f)(9)(A) of section 215 of
  such Act (42 U.S.C. 415) are each amended by striking `subsection (d)(5)'
  each place it appears and inserting `subsection (d)(3)'.
  `(iii) Section 215(f)(9)(B) (42 U.S.C. 415(f)(9)(B)) is amended by striking
  `subsection (a)(7) or (d)(5)' each place it appears and inserting `subsection
  (a)(7) or (d)(3)'.
  (4) EFFECTIVE DATE-
  (A) IN GENERAL- Except as provided in subparagraph (B), the amendments
  made by this subsection shall apply with respect to the computation of the
  primary insurance amount of any insured individual in any case in which a
  person becomes entitled to benefits under section 202 or 223 on the basis
  of such insured individual's wages and self-employment income for months
  after the 18-month period following the month in which this Act is enacted,
  except that such amendments shall not apply if any person is entitled to
  benefits based on the wages and self-employment income of such insured
  individual for the month preceding the initial month of such person's
  entitlement to such benefits under section 202 or 223.
  (B) RECOMPUTATIONS- The amendments made by this subsection shall apply
  with respect to any primary insurance amount upon the recomputation of
  such primary insurance amount if such recomputation is first effective
  for monthly benefits for months after the 18-month period following the
  month in which this Act is enacted.
  (b) BENEFITS IN CASE OF VETERANS- Section 217(b) (42 U.S.C. 417(b))
  is amended--
  (1) in the first sentence of paragraph (1), by striking `Any' and inserting
  `Subject to paragraph (3), any'; and
  (2) by adding at the end the following new paragraph:
  `(3)(A) The preceding provisions of this subsection shall apply for purposes
  of determining the entitlement to benefits under section 202, based on
  the primary insurance amount of the deceased World War II veteran, of any
  surviving individual only if such surviving individual makes application
  for such benefits before the end of the 18-month period after the month
  in which the Omnibus Budget Reconciliation Act of 1990 was enacted.
  `(B) Subparagraph (A) shall not apply if any person is entitled to benefits
  under section 202 based on the primary insurance amount of such veteran
  for the month preceding the month in which such application is made.'.
  (c) APPLICABILITY OF ALTERNATIVE METHOD FOR DETERMINING QUARTERS OF COVERAGE
  WITH RESPECT TO WAGES IN THE PERIOD FROM 1937 TO 1950-
  (1) APPLICABILITY WITHOUT REGARD TO NUMBER OF ELAPSED YEARS- Section 213(c)
  (42 U.S.C. 413(c)) is amended--
  (A) by inserting `and 215(d)' after `214(a)'; and
  (B) by striking `except where--' and all that follows and inserting the
  following: `except where such individual is not a fully insured individual
  on the basis of the number of quarters of coverage so derived plus the
  number of quarters of coverage derived from the wages and self-employment
  income credited to such individual for periods after 1950.'.
  (2) APPLICABILITY WITHOUT REGARD TO DATE OF DEATH- Section 155(b)(2) of the
  Social Security Amendments of 1967 is amended by striking `after such date'.
  (3) EFFECTIVE DATE- The amendments made by this subsection shall apply
  only with respect to individuals who--
  (A) make application for benefits under section 202 of the Social Security
  Act after the 18-month period following the month in which this Act is
  enacted, and
  (B) are not entitled to benefits under section 227 or 228 of such Act for
  the month in which such application is made.
SEC. 6065. SUSPENSION OF DEPENDENT'S BENEFITS WHEN THE WORKER IS IN AN
EXTENDED PERIOD OF ELIGIBILITY.
  (a) IN GENERAL- Section 223(e) (42 U.S.C. 623(e)) is amended by--
  (1) by inserting `(1)' after `(e)'; and
  (2) by adding at the end the following new paragraph:
  `(2) No benefit shall be payable under section 202 on the basis of the wages
  and self-employment income of an individual entitled to a benefit under
  subsection (a)(1) of this section for any month for which the benefit of
  such individual under subsection (a)(1) is not payable under paragraph (1).'.
  (b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply with
  respect to benefits for months after the date of the enactment of this Act.
Subtitle B--Medicare
PART 1--PROVISIONS RELATING ONLY TO PART A
SEC. 6101. REDUCTIONS IN PAYMENTS FOR CAPITAL-RELATED COSTS OF INPATIENT
HOSPITAL SERVICES.
  (a) IN GENERAL- Section 1886(g)(3)(A)(v) (42 U.S.C. 1395ww(g)(3)(A)(v))
  is amended by striking `September 30, 1990' and inserting `September 30,
  1991, and by 10 percent for payments attributable to portions of cost
  reporting periods or discharges (as the case may be) occurring during the
  period beginning October 1, 1991 and ending September 30, 1995.'
  (b) EXEMPTION FOR RURAL PRIMARY CARE HOSPITALS- Section 1886(g)(3)(B) (42
  U.S.C. 1395ww(g)(3)(B)) is amended by striking `1886(d)(5)(D)(iii)).' and
  inserting `1886(d)(5)(D)(iii) or a rural primary care hospital (as defined
  in subsection (mm)(1)).'
  (c) PROSPECTIVE PAYMENT FOR CAPITAL- Section 1886(g)(1) (42
  U.S.C. 1395ww(g)(1)) is amended--
  (1) by inserting at the end of subparagraph (A) the following: `Payment
  under such system shall be determined in a manner that assures that the
  expected aggregate payments for such capital-related costs for discharges
  occurring during fiscal year 1992 are not greater or less than those that
  would have been made for portions of cost reporting periods occurring during
  fiscal year 1992, taking into account the reductions specified in paragraph
  (3)(A)(v).'; and
  (2) by inserting after subparagraph (B)(iv) the following sentence:
  `Notwithstanding clause (i), such system may provide for continuation of
  payment for fixed capital on a reasonable cost basis, subject to reductions
  in paragraph (3)(A)(v).'.
SEC. 6102. PROSPECTIVE PAYMENT HOSPITALS.
  (a) CHANGES IN HOSPITAL UPDATE FACTORS-
  (1) IN GENERAL- Section 1886(b)(3)(B)(i) (42 U.S.C. 1395ww(b)(3)(B)(i))
  is amended--
  (A) by striking `and' at the end of subclause (V);
  (B) in subclause (VI)--
  (i) by striking `1991' and inserting `1994', and
  (ii) by redesignating such subclause as subclause (IX); and
  (C) by inserting after subclause (V) the following new subclauses:
  `(VI) for fiscal year 1991, the market basket percentage increase minus
  2.0 percentage points for hospitals in all areas,
  `(VII) for fiscal year 1992, the market basket percentage increase minus
  1.5 percentage points for hospitals in all areas,
  `(VIII) for fiscal year 1993, the market basket percentage increase minus
  1.4 percentage points for hospitals in all areas, and'.
  (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply to
  payments for discharges occurring on or after January 1, 1991.
  (b) PHASE-OUT OF SEPARATE AVERAGE STANDARDIZED AMOUNTS-
  (1) IN GENERAL- Section 1886(b)(3)(B)(i) (42 U.S.C. 1395ww(b)(3)(B)(i)),
  as amended by subsection (a)(1), is further amended--
  (A) in subclause (VI), by striking `in all areas,' and inserting `in a
  large urban or other urban area, and the market basket percentage increase
  for hospitals located in a rural area,';
  (B) in subclause (VII), by striking `in all areas,' and inserting `in a
  large urban or other urban area, and the market basket percentage increase
  for hospitals located in a rural area,';
  (C) in subclause (VIII), by striking `in all areas, and' and inserting
  `in a large urban or other urban area, and the market basket percentage
  increase for hospitals located in a rural area,';
  (D) in subclause (IX)--
  (i) by striking `1994' and inserting `1995', and
  (ii) by redesignating such subclause as subclause (X); and
  (E) by inserting after subclause (VIII) the following new subclause:
  `(IX) for fiscal year 1994, the market basket percentage increase
  for hospitals located in a large urban or other urban area, and such
  percentage increase for hospitals located in a rural area as will provide
  for a reduction of  1/2  (compared to fiscal year 1993) in the percentage
  difference between the average standardized amount determined under
  subsection (d)(3)(A) for hospitals located in an urban area (other than
  a large urban area) and such average standardized amount for hospitals
  located in a rural area,'.
  (2) CONFORMING AMENDMENTS- Section 1886(d) (42 U.S.C. 1395ww(d)) is amended
  in paragraph (3)(A)--
  (A) in clause (ii), by striking `the Secretary' and inserting `and ending
  on or before September 30, 1994, the Secretary',
  (B) by redesignating clause (iii) as clause (iv), and
  (C) by inserting after clause (ii) the following new clause:
  `(iii)(I) For discharges occurring in the fiscal year beginning on October
  1, 1994, the average standardized amount for hospitals located in a rural
  area shall equal the average standardized amount for hospitals located in
  an other urban area.
  `(II) For discharges occurring in a fiscal year beginning on or after
  October 1, 1995, the Secretary shall compute an average standardized amount
  for hospitals located in a large urban area and for hospitals located
  in other areas within the United States and within each region equal
  to the respective average standardized amount computed for the previous
  fiscal year under this subparagraph increased by the applicable percentage
  increase under subsection (b)(3)(B)(i) with respect to hospitals located
  in the respective areas for the fiscal year involved.';
  (D) in paragraph (3)(B), by striking `for hospitals located in an urban
  area and for hospitals located in a rural area' and by striking `for
  hospitals located in such respective area';
  (E) in paragraph (3)(D)(i)--
  (i) in the matter preceding subclause (I), by striking `an urban area (or,'
  and all that follows through `area),' and inserting `a large urban area, and
  (ii) in subclause (I), by striking `an urban area' and inserting `a large
  urban area'; and
  (F) in paragraph (3)(D)(ii), by striking `a rural area' each place it
  appears and inserting `other areas'.
  (3) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply to
  payments for discharges occurring on or after January 1, 1991, and the
  amendments made by paragraph (2) shall apply to payments for discharges
  occurring on or after October 1, 1994.
  (c) PHASE-IN OF AREA WAGE INDEX UPDATE FOR FISCAL YEAR 1991-
  (1) AREA WAGE INDEX- Subject to the last sentence of section 1886(d)(3)(E)
  of the Social Security Act, for purposes of determining the amount of payment
  made to a hospital under part A of title XVIII of the Social Security Act
  for the operating costs of inpatient hospital services, the Secretary of
  Health and Human Services, in adjusting such amount under such section
  to reflect the relative hospital wage level in the geographic area of the
  hospital compared to the national average hospital wage index, shall--
  (A) for discharges occurring during fiscal year 1991, apply a combined
  area wage index consisting of--
  (i) 75 percent of the area wage index determined using the survey of
  the 1988 wages and wage-related costs of hospitals in the United States
  conducted under such section, and
  (ii) 25 percent of the area wage index applicable to the hospital for
  discharges occurring during fiscal year 1990, as determined using the survey
  of the 1984 wages and wage-related costs of hospitals in the United States
  conducted under such section; and
  (B) for discharges occurring during fiscal year 1992 and fiscal year 1993,
  apply the area wage index otherwise applicable to the hospital under such
  section for discharges occurring during such fiscal year.
  (2) STUDY OF HOSPITAL OCCUPATIONAL MIX AND WAGE INDEX COMPUTATION- The
  Prospective Payment Assessment Commission (hereinafter referred to as the
  `Commission') shall examine State level and other available data measuring
  earnings and paid hours of employment by occupational category of workers
  employed by hospitals. The examination shall include analysis of the impact
  of variation in occupational mix on the computation of the area wage index
  (as computed under section 1886 (d)) of the Social Security Act. Based on
  the findings of this analysis, the Commission shall include in its March
  1991 report recommendations regarding the feasibility and desirability of
  modifying the wage index computation to take into account occupational
  mix. In considering alternative computations or adjustments to the wage
  index, the Commission shall examine and take into account variation in
  occupational mix resulting from differences in State codes and requirements.
SEC. 6103. REDUCTION IN INDIRECT MEDICAL EDUCATION PAYMENTS.
  (a) INDIRECT MEDICAL EDUCATION PAYMENTS REDUCED-
  (1) Section 1886(d)(5)(B)(ii) (42 U.S.C. 1395ww(d)(5)(B)(ii)) is amended--
  (A) in subclause (I), by striking `1.89' and inserting in lieu thereof
  `1.68'; and
  (B) in subclause (II), by striking `1.43' and inserting in lieu thereof
  `1.28'.
  (2) Section 1886(d)(3)(C)(ii) (42 U.S.C. 1395ww(d)(3)(C)(ii)) is amended--
  (A) in subclause (I)--
  (i) by striking `1985 and' and inserting in lieu thereof `1985,', and
  (ii) by inserting `and by section 6103 of the Omnibus Budget Reconciliation
  Act of 1990' after `1987'; and
  (B) in subclause (II)--
  (i) by striking `1985 and' and inserting in lieu thereof `1985,', and
  (ii) by inserting `and by section 6103 of the Omnibus Budget Reconciliation
  Act of 1990' after `1987'.
  (b) EFFECTIVE DATE- The amendments made by this section shall apply to
  payments for discharges occurring on or after January 1, 1991.
SEC. 6104. PPS EXEMPT HOSPITALS.
  (a) DEADLINES FOR REVIEW AND DECISION- (1) Section 1816(f) (42
  U.S.C. 1395h(f)) is amended--
  (A) by striking `(1)' and `(2)' and inserting `(A)' and `(B)';
  (B) by striking `(f)' and inserting `(f)(1)'; and
  (C) by striking `Such standards and criteria' and all that follows and
  inserting the following:
  `(2) The standards and criteria established under paragraph (1) shall
  include--
  `(A) with respect to claims for services furnished under this part by any
  provider of services other than a hospital--
  `(i) whether such agency or organization is able to process 75 percent of
  reconsiderations within 60 days (except in the case of fiscal year 1989,
  66 percent of reconsiderations) and 90 percent of reconsiderations within
  90 days, and
  `(ii) the extent to which such agency or organization's determinations
  are reversed on appeal; and
  `(B) with respect to applications for a reconsideration of the target amount
  applicable under section 1886(b) to a hospital that is not a subsection
  (d) hospital (as defined in section 1886(d)(1)(B))--
  `(i) if such agency or organization receives a completed application,
  whether such agency or organization is able to process such application
  not later than 60 days after the application is filed, and
  `(ii) if such agency or organization receives an incomplete application,
  whether such agency or organization is able to return the application
  with instructions on how to complete the application not later than 60
  days after the application is filed.'.
  (2) Section 1886(b)(4)(A) (42 U.S.C. 1395ww(b)(4)(A)) is amended by adding
  at the end the following new sentence: `The Secretary shall announce a
  decision on any request for an exemption, exception, or adjustment under this
  paragraph not later than 180 days after receiving a completed application
  for such exemption, exception, or adjustment, and shall include in such
  decision a detailed explanation of the grounds on which such request was
  approved or denied.'.
  (b) STANDARDS FOR ASSIGNMENT OF NEW BASE PERIOD- Section 1886(b)(4)
  (42 U.S.C. 1395ww(b)(4)) is amended--
  (1) by redesignating subparagraph (B) as subparagraph (C); and
  (2) by inserting after subparagraph (A) the following new subparagraph:
  `(B) In determining under subparagraph (A) whether to assign a new base
  period which is more representative of the reasonable and necessary cost
  to a hospital of providing inpatient services, the Secretary shall take
  into consideration--
  `(i) changes in applicable technologies, medical practices, or case mix
  severity that increase the hospital's costs;
  `(ii) whether increases in wages and wage-related costs in the geographic
  area in which the hospital is located substantially exceed the average of
  the increases in such costs paid by hospitals in the United States; and
  `(iii) such other factors as the Secretary considers appropriate in
  determining increases in the hospital's costs of providing inpatient
  services.'.
  (c) GUIDANCE TO INTERMEDIARIES AND HOSPITALS- The Administrator of the
  Health Care Financing Administration shall provide guidance to agencies
  and organizations performing functions pursuant to section 1816 of the
  Social Security Act and to hospitals that are not subsection (d) hospitals
  (as defined in section 1886(d)(1)(B) of such Act) to assist such agencies,
  organizations, and hospitals in filing complete applications with the
  Administrator for exemptions, exceptions, and adjustments under section
  1886(b)(4)(A) of such Act.
  (d) EFFECTIVE DATES- The amendments made by subsection (a) shall take effect
  on the effective date of the next regular publication of such standards,
  and the amendments made by subsections (b) and (c) shall take effect upon
  enactment of this Act.
SEC. 6105. EXPANSION OF HOSPICE BENEFIT.
  (a) IN GENERAL- Section 1812 (42 U.S.C. 1395d) is amended--
  (1) in subsection (a)(4), by striking `90 days each' and all that follows
  through `with respect to' and inserting the following: `90 days each,
  a subsequent period of 30 days, and a subsequent extension period with
  respect to'; and
  (2) in subsection (d)--
  (A) in paragraph (1), by striking `90 days each' and all that follows through
  `lifetime' and inserting the following: `90 days each, a subsequent period
  of 30 days, and a subsequent extension period during the individual's
  lifetime', and
  (B) in paragraph (2)(B), by striking `a 90- or 30-day period,' and inserting
  `a 90- or 30-day period or a subsequent extension period,'.
  (b) CONFORMING AMENDMENT- Section 1814(a)(7)(A) (42 U.S.C. 1395f(a)(7)(A))
  is amended--
  (1) in clause (i), by striking `and' at the end;
  (2) in clause (ii), by striking the semicolon at the end and inserting `,
  and'; and
  (3) by adding at the end the following new clause:
  `(iii) in a subsequent extension period, the medical director or physician
  described in clause (i)(II) recertifies at the beginning of the period
  that the individual is terminally ill;'.
  (c) EFFECTIVE DATE- The amendments made by this section shall apply with
  respect to care and services furnished on or after January 1, 1990.
SEC. 6106. MISCELLANEOUS AND TECHNICAL AMENDMENTS RELATING TO PART A.
  (a) EXTENSIONS OF WAIVERS OF LIABILITY FOR SKILLED NURSING FACILITIES
  AND HOSPICES-
  (1) SKILLED NURSING FACILITIES- The second sentence of section 9126(c)
  of the Consolidated Omnibus Budget Reconciliation Act of 1985 is amended
  by striking `October 31, 1990' and inserting `December 31, 1995'.
  (2) HOSPICES- Section 9305(f)(2) of the Omnibus Budget Reconciliation Act
  of 1986 is amended by striking `November 1, 1990' and inserting `December
  31, 1995'.
  (3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) shall
  take effect on the date of the enactment of this Act.
  (b) DESIGNATIONS OF CERTAIN HOSPITALS AS RURAL PRIMARY CARE HOSPITALS-
  (1) PRIORITY IN DISCRETIONARY DESIGNATIONS GIVEN TO HOSPITALS AFFILIATED
  WITH A RURAL HEALTH NETWORK IN A PARTICIPATING STATE- Section 1820(i)(2)(C)
  (42 U.S.C. 1395i-4(i)(2)(C)) is amended by adding at the end the following
  new sentence: `In designating facilities as rural primary care hospitals
  under this subparagraph, the Secretary shall give preference to facilities
  that have entered into an agreement described in subsection (g)(2) with a
  rural health network located in a State receiving a grant under subsection
  (a)(1).'.
  (2) ELIGIBILITY OF CERTAIN CLOSED HOSPITALS- Section 1820(f)(1)(B) (42
  U.S.C. 1395i-4(f)(1)(B)) is amended by striking `hospital,' and inserting
  the following: `hospital (or, in the case of a facility that closed during
  the 12-month period that ends on the date the facility applies for such
  designation, at the time the facility closed),'.
  (3) ELIGIBILITY OF OTHER FACILITIES AS RURAL PRIMARY CARE HOSPITALS-
  Section 1820(f)(1)(F) (42 U.S.C. 1395i-4(f)(1)(F)) is amended by inserting
  before the period at the end `, or meets such substitute criteria limiting
  the number of inpatient beds and the hours of inpatient care as the State
  may impose with the approval of the Secretary'.
  (4) EFFECTIVE DATE- The amendments made by paragraphs (1), (2), and (3)
  shall take effect on the date of the enactment of this Act.
  (c) RESPONSIBILITIES AND REPORTING REQUIREMENTS OF PROSPECTIVE PAYMENT
  ASSESSMENT COMMISSION- Section 1886 (42 U.S.C. 1395ww) is amended--
  (1) in subsection (d)(4)(D), by striking the last sentence;
  (2) in subsection (e)(2)--
  (A) by striking `recommendations to the Secretary' and inserting
  `recommendations to the Secretary and Congress';
  (B) by inserting `(A)' after `(2)' and by adding at the end the following
  new subparagraphs:
  `(B) In order to promote the efficient and effective delivery of high-quality
  health care services, the Commission shall, in addition to carrying out
  its functions under subsection (d)(4)(D) and subparagraph (A), study
  and make recommendations for each fiscal year to the Secretary and the
  Congress regarding changes in each existing reimbursement policy under this
  title under which payments to an institution are based upon prospectively
  determined rates and the development of new institutional reimbursement
  policies under this title, including recommendations relating to--
  `(i) payments during such fiscal year under the prospective payment system
  established under this section for determining payments for the operating
  costs of inpatient hospital services, including changes in the number of
  diagnosis-related groups used to classify inpatient hospital discharges
  under subsection (d), adjustments to such groups to reflect severity of
  illness, and changes in the methods by which hospitals are reimbursed for
  capital-related costs; and
  `(ii) additional payments made to hospitals under subsection (d), including
  payments made--
  `(I) to hospitals located in large urban areas;
  `(II) to hospitals located in rural areas, including regional referral
  centers and sole community hospitals;
  `(III) for the indirect costs of medical education;
  `(IV) for hospitals serving a disproportionate share of low-income
  patients; and
  `(V) for discharges described in subsection (d)(5)(A).
  `(C) The Commission, by not later than June 1 of each year (beginning with
  calendar year 1991), shall submit a report to the Congress examining the
  American health care system including issues related to--
  `(i) trends in health care costs;
  `(ii) the financial condition of hospitals including the level of payments
  made to hospitals under this title;
  `(iii) trends in utilization of health care services; and
  `(iv) new and innovative methods utilized by private employers and insurers
  to constrain growth in health care related costs.
  `(D) The Commission shall include in its annual recommendations under
  subparagraph (B) recommendations on major revisions to the hospital payment
  system including revisions of the prospective payment system or other
  modifications to payment methods under this title for hospital outpatient
  services, and recommendations with regard to payments to hospitals exempt
  from the prospective payment system, to skilled nursing facilities, and
  for home health services.';
  (3) in subsection (e)(3)(A) by striking the period at the end and inserting
  the following: `, together with any other recommendations under paragraph
  (2)(B) that are applicable to institutional reimbursements under this
  title in that fiscal year.';
  (4) in subsection (e)(4)--
  (A) by striking `(4)' and inserting `(4)(A)', and
  (B) by adding at the end the following new subparagraph:
  `(B) In addition to the recommendation made under subparagraph (A),
  the Secretary shall, taking into consideration the recommendations of
  the Commission under paragraph (2)(B), recommend for each fiscal year
  (beginning with fiscal year 1992) other appropriate changes in each existing
  reimbursement policy under this title under which payments to an institution
  are based upon prospectively determined rates.';
  (5) in subsection (e)(5)--
  (A) by striking `recommendation' each place it appears and inserting
  `recommendations', and
  (B) by adding at the end the following new sentence: `To the extent that the
  Secretary's recommendations under paragraph (4) differ from the Commission's
  recommendations for that fiscal year, the Secretary shall include in
  the publication referred to in subparagraph (A) an explanation of the
  Secretary's grounds for not following the Commission's recommendations.'; and
  (6) in subsection (e)(6)(G) by striking clause (i) and by redesignating
  clauses (ii) and (iii) as clauses (i) and (ii), respectively.
  (d) PROPAC STUDY OF MEDICAID PAYMENTS TO HOSPITALS- The Prospective
  Payment Assessment Commission (hereafter in this subsection referred to
  as the `Commission') shall conduct a study of hospital payment rates under
  State medicaid programs established under title XIX of the Social Security
  Act. The Commission shall specifically examine in such study the level of
  hospital reimbursement under title XIX programs, the relationship between
  these payments and payments made to hospitals under title XVIII of the
  Social Security Act, and the financial condition of affected hospitals,
  with particular attention to hospitals in urban areas which treat large
  numbers of title XIX recipients and other low-income individuals. By
  no later than October 1, 1991, the Commission shall submit a report to
  Congress on such study and shall include such recommendations as the
  Commission deems appropriate.
  (e) UPDATE OF ROUTINE SERVICE COSTS OF SKILLED NURSING FACILITIES-
  (1) IN GENERAL- Section 6024 of the Omnibus Budget Reconciliation Act
  of 1989 is amended by adding at the end the following new sentence: `The
  Secretary shall update such costs under such section for cost reporting
  periods beginning on or after October 1, 1989, by using cost reports
  submitted by skilled nursing facilities for cost reporting periods ending
  not earlier than January 31, 1988, and not later than December 31, 1988.'.
  (2) 2-YEAR UPDATES REQUIRED- Section 1888(a) (42 U.S.C. 1395yy(a)) is
  amended by inserting before the period at the end of the matter following
  such subsection the following: `, and shall, for cost reporting periods
  beginning on or after October 1, 1992 and every 2 years thereafter, provide
  for an update to the per diem cost limits described in this subsection'.
  (3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) shall take
  effect as if included in the enactment of the Omnibus Budget Reconciliation
  Act of 1989.
  (f) CLARIFICATION OF SECRETARIAL WAIVER AUTHORITY-
  (1) IN GENERAL- Section 6003 of the Omnibus Budget Reconciliation Act of
  1989 is amended by adding at the end the following:
  `(k) CLARIFICATION OF WAIVER AUTHORITY- The Secretary of Health and Human
  Services (in this subsection referred to as the `Secretary') is authorized
  to waive such provisions of title XVIII of the Social Security Act as
  are necessary to conduct any demonstration project for limited-service
  rural hospitals with respect to which the Secretary has entered into an
  agreement before the date of the enactment of this Act.'.
  (2) NURSING HOME DEMONSTRATIONS- Section 6901(d)(3)(B) of the Omnibus
  Budget Reconciliation Act of 1989 is amended to read as follows:
  `(B) The Secretary may also waive the survey and certification requirements
  described in subparagraph (A) to the extent the Secretary determines is
  necessary to carry out a pilot demonstration project in Wisconsin and
  demonstration projects in other States (relating to testing an approved
  alternative survey and certification process) as part of a nursing home
  prospective case-mix payment demonstration project.'.
  (3) EFFECTIVE DATE- The amendment made by paragraphs (1) and (2) shall
  be effective as if included in the enactment of the Omnibus Budget
  Reconciliation Act of 1989.
  (g) GEOGRAPHIC CLASSIFICATION REVIEW BOARD- (1) For purposes of section
  1886(d)(10)(C)(ii) (42 U.S.C. 1395ww(d)(10)(C)(ii)), an application of a
  subsection (d) hospital submitted to the Secretary under such clause shall
  be considered  to have been submitted by the first day of the preceding
  fiscal year under such clause if it is submitted within 60 days of the
  date of publication of the guidelines described in subparagraph (D)(i)
  of such section.
  (2) Section 1886(d)(10) is amended--
  (A) in subparagraph (B)(i) by striking `representatives' and inserting
  `representative';
  (B) in subparagraph (B)(i) by striking `1 member shall be a member of the
  Prospective Payment Assessment Commission, and at least'; and
  (C) in subparagraph (C)(iii)(II) by striking the first two sentences and
  inserting in lieu thereof the following: `Appeal of decisions of the Board
  shall be subject to the provisions of 5 U.S.C. section 557b'.
  (h) REVIEW OF HOSPITAL REGULATIONS WITH RESPECT TO RURAL HOSPITALS-
  (1) IN GENERAL- Not later than 12 months after the date of enactment
  of this Act, the Secretary of Health and Human Services shall review
  the requirements in regulations developed pursuant to section 1861(e)
  of the Social Security Act to determine which requirements could be made
  less administratively and economically burdensome for hospitals defined
  in section 1886(d)(1)(B) of the Social Security Act that are located in
  a rural area as defined in section 1886(d)(2)(D) of the Social Security
  Act without diminishing the quality of care provided by such hospitals to
  individuals entitled to receive benefits under part A of title XVIII of
  the Social Security Act. Such review shall specifically include standards
  related to staffing requirements.
  (2) REPORT- The Secretary of Health and Human Services shall report to
  Congress by April 1, 1992, on the results of the review conducted under
  subsection (a), and include conclusions on which regulations, if any,
  should be modified with respect to hospitals located outside a metropolitan
  statistical area as described in subsection (a).
  (i) MEDICARE NURSING HOME REFORM PROVISIONS-
  (1) NURSE AIDE TRAINING AMENDMENTS-
  (A) NO COMPLIANCE ACTIONS BEFORE EFFECTIVE DATE OF FINAL REGULATIONS--The
  Secretary of Health and Human Services (hereafter in this section referred
  to as the `Secretary') shall not take (and shall not continue) any action
  against a State under section 1864 of the Social Security Act on the basis of
  the State's failure to meet the requirement of section 1819(e)(1)(A) of such
  Act before the effective date of final regulations, issued by the Secretary,
  establishing requirements under section 1819(f)(2)(A)(iv)(I) of such Act,
  if the State demonstrates to the satisfaction of the Secretary that it has
  made a good faith effort to meet such requirement before such effective date.
  (B) PART TIME NURSE AIDES NOT ALLOWED DELAY IN TRAINING- Section
  1819(b)(5)(A) (42 U.S.C. 1395i-3(b)(5)(A)) is amended--
  (i) by striking `, temporary, per diem, or other';
  (ii) by inserting `(i)' after `(A)';
  (iii) by redesignating clauses `(i)' and `(ii)' as subclauses `(I)' and
  `(II)' respectively; and
  (iv) by adding at the end the following:
  `(ii) EXCEPTION- A skilled nursing facility must not use on a temporary,
  per diem, or on any other than a full-time basis any individual as a nurse
  aide in the facility on or after October 1, 1990, unless the individual
  meets the requirements described in subclauses (I) and (II) of clause (i).'.
  (B) CLARIFICATION OF PERMISSIBLE CHARGES FOR TRAINING OF AIDES
  NOT YET EMPLOYED BY A FACILITY- Section 1819(f)(2)(A)(iv)(II) (42
  U.S.C. 1395i-3(f)(2)(A)(iv)(II)) is amended by striking `such program'
  and inserting `such program, except, that on accredited nonfacility based
  program may impose such charges on individuals who are not presently
  employed by a nursing facility or who have not yet had an offer for future
  employment at such a facility'.
  (C) NURSE AIDE REGISTRY-
  (i) IN GENERAL- Section 1819(b)(5)(C) (42 U.S.C. 1395i-3(b)(5)(C)) is
  amended by adding at the end thereof the following new sentence: `In the
  case of an individual who a nursing facility is considering employing as
  a nurse aide and who the facility has reason to believe is from a State
  other than the State in which the facility is located, such a facility
  shall not use such an individual as a nurse aide unless the facility has
  inquired concerning such individual of the State registry established under
  subsection (e)(2)(A) of the State from which such facility has reason to
  believe such individual resided'.
  (ii) DEEMED AIDES TO BE INCLUDED ON REGISTRY- Section 1819(e)(2)(A) (42
  U.S.C. 1395i-3(e)(2)(A)) is amended by striking `individuals' and inserting
  `individuals (including those individuals deemed under section 6901 (b)(4)
  (B), (C), and (D) of the Omnibus Budget Reconciliation Act of 1989 to
  have satisfied the training and competency evaluation program requirements
  under this section)'.
  (2) MISCELLANEOUS AND TECHNICAL AMENDMENTS-
  (A) RESIDENT ACCESS TO CLINICAL RECORDS- Section 1819(c)(1)(A)(iv) (42
  U.S.C. 1395i-3(c)(1)(A)(iv)) is amended by inserting before the period
  at the end the following: `and access to current clinical records of the
  resident promptly upon reasonable request  (as defined by the Secretary)
  by the resident or resident's legal representative'.
  (B) MAINTAINING REGULATORY STANDARDS FOR CERTAIN NURSING AND RELATED
  SERVICES- The Secretary shall provide that any regulations promulgated by the
  Secretary with respect to nursing and related services described in clauses
  (ii), (iv), and (v) of section 1819(b)(4)(A) of the Social Security Act,
  are comparable or more strict in terms of requirements for such services
  that such regulations for such services were prior to the enactment of
  the Omnibus Budget Reconciliation Act of 1987.
  (C) STUDY- The Secretary shall conduct a study on the hiring and dismissal
  practices of nursing facilities with respect to social workers, dieticians,
  activities professionals, and medical records practitioners, and report
  to Congress by January 1, 1993, on whether facilities have on their
  staffs, persons with significantly different credentials as a result of
  new regulations that became effective October 1, 1990, and the impact of
  staff composition on quality of care.
  (D) CLARIFICATION OF STATE RESPONSIBILITY TO DETERMINE COMPETENCY-
  Section 1819(f)(2)(B) (42 U.S.C. 1395i-3(f)(2)(B)) is amended, in the
  second sentence, by inserting `(through subcontract or otherwise)' after
  `may not delegate'.
  (E) OMBUDSMAN PROGRAM COORDINATION WITH STATE MEDICAID AND SURVEY AND
  CERTIFICATION AGENCIES- Section 1819(g)(5)(B) (42 U.S.C. 1395i-3(g)(5)(B))
  is amended to read as follows:
  `(B) NOTICE TO OMBUDSMAN- Each State agency with an agreement with
  the Secretary under this section shall enter into a written agreement
  with the Office of the State Long-Term Care Ombudsman (as defined by the
  Older Americans Act), to provide for information exchange, case referral,
  and prompt notification of the office of any adverse action to be taken
  against a nursing facility.'.
  (F) ADDITIONAL REQUIREMENTS WITH RESPECT TO MEDICARE NURSE STAFFING WAIVERS-
  Section 1819(b)(4)(C)(ii) (42 U.S.C. 1395i-3(b)(4)(C)(ii)) is amended
  by adding at the end thereof the following: `The Secretary shall provide
  notice of the waiver to the appropriate State and substate long-term care
  ombudsman, to the protection and advocacy system and other appropriate
  State and private agencies, and shall ensure that a nursing facility that
  is granted such a waiver is required to make reasonable efforts to notify
  present and prospective residents of the facility (or a guardian or legal
  representative of such residents) of the waiver.'.
  (G) STUDY ON STAFFING REQUIREMENTS IN SKILLED NURSING FACILITIES- The
  Secretary shall conduct a study and report to Congress no later than
  January 1, 1992, on the appropriateness of establishing minimum caregiver
  to resident ratios and minimum supervisor to caregiver ratios for skilled
  nursing facilities receiving payments under title XVIII of the Social
  Security Act. If the Secretary determines that the establishment of such
  minimum ratios is advisable, the Secretary shall specify in the report
  provided for in this subsection appropriate ratios or standards.
  (H) PERIOD FOR RESIDENT ASSESSMENT- Section 1819(b)(3)(C)(i)(I) (42
  U.S.C. 1395i-3(b)(3)(C)(i)(I)) is amended by striking `4 days' and inserting
  `14 days'.
  (I) QUALIFICATION OF MEDICARE FACILITIES TO PROVIDE NURSE AIDE TRAINING
  AND COMPETENCY EVALUATION- Section 1819(f)(2) (42 U.S.C. 1395i-3(f)(2))
  is amended--
  (i) in subparagraph (B)(iii), by amending subclause (I) to read as follows:
  `(I) offered by or in a skilled nursing facility described in subparagraph
  (C), or'; and
  (ii) by adding after subparagraph (B) the following new subparagraph:
  `(C) SKILLED NURSING FACILITIES INELIGIBLE TO OFFER PROGRAMS- A skilled
  nursing facility shall be ineligible to offer a program under this
  paragraph--
  `(i) if at any time on or after October 1, 1988, the Secretary or a State
  agency administering a program under title XIX terminated or terminates
  the facility's provider agreement under this title or title XIX, until
  after the end of a period of at least two years following reinstatement,
  during which period--
  `(I) no survey or investigation finds any deficiencies warranting
  termination, and
  `(II) at least one standard survey is conducted pursuant to subsection
  (g); or
  `(ii) if the facility--
  `(I) received a notice of termination of its provider agreement under this
  title or title XIX from the Secretary or a State agency at any time during
  the one-year period ending September 30, 1990; or
  `(II) is found, pursuant to a standard survey or investigation under
  subsection (g) or section 1919(g), to have deficiencies resulting in
  a civil monetary penalty in excess of $5,000 denial of payment, or
  appointment of temporary management pursuant to subsection (h)(2)(B)
  or to section 1919(h)(2)(A),
until after the completion of a subsequent standard survey under subsection
(g) which finds no such deficiencies.'.
  (J) RETRAINING REQUIRED- Section 1819(b)(5)(D) (42 U.S.C. 1395i-3(b)(5)(D))
  is amended by inserting before the period the following: `, or a new
  competency evaluation program'.
  (K) CHARGES FOR NURSE AID TRAINING- Section 1819(f)(2)(A)(iv) (42
  U.S.C. 1395i-3(f)(2)(A)(iv)) is amended by adding the following at the end:
  `(III) For individuals employed or under contract for employment as a nurse
  aide within 12 months after successful completion of a nonfacility-based,
  State-approved nurse aide training and competency evaluation program,
  the State must ensure that the costs incurred by such individuals for such
  programs are reimbursed to such individuals.'.
  (3) EFFECTIVE DATES- The amendments made by this section shall take
  effect as if they were included in the enactment of the Omnibus Budget
  Reconciliation Act of 1987.
  (j) NO RESTANDARDIZING FOR RECENT ADJUSTMENTS-
  (1) ADJUSTMENTS UNDER OBRA 1989- Section 1886(d)(2)(C)(iv) (42
  U.S.C. 1395ww(d)(2)(C)(iv)) is amended by striking the period at the end
  and inserting the following: `, except that the Secretary shall not exclude
  additional payments under such paragraph made as a result of the enactment
  of section 6003(c) of the Omnibus Budget Reconciliation Act of 1989.'.
  (2) EFFECTIVE DATE- The amendment made by subparagraph (D)(i) shall take
  effect as if included in the enactment of the Omnibus Budget Reconciliation
  Act of 1989.
PART 2--PROVISIONS RELATING ONLY TO PART B
Subpart A--Payment for Physicians' Services
SEC. 6111. REDUCTION IN PAYMENTS FOR OVERVALUED PROCEDURES.
  (a) PREVIOUSLY IDENTIFIED PROCEDURES- Section 1842(b) (42 U.S.C. 1395u(b))
  is amended by adding at the end the following:
  `(16)(A) In determining the reasonable charge for a physicians' service
  specified in paragraph (14)(C)(i) and furnished during 1991, the prevailing
  charge for such service shall not exceed the prevailing charge otherwise
  recognized for such service for the period during 1990 beginning on April
  1, reduced by 15 percent or, if less, one-third of the percent (if any)
  by which such prevailing charge exceeds the locally-adjusted reduced
  prevailing amount (as determined under subparagraph (B)(i)) for the service.
  `(B) For purposes of this paragraph:
  `(i) The `locally-adjusted reduced prevailing amount' for a locality for
  a physicians' service is equal to the product of--
  `(I) the reduced national weighted average prevailing charge for the service
  (specified in clause (ii)), and
  `(II) the adjustment factor (specified in clause (iii)) for the locality
  for the service.
  `(ii) The `reduced national weighted average prevailing charge' for a
  physicians' service is equal to the national weighted average prevailing
  charge for the service (specified in subparagraph (C)(i)) reduced by the
  percentage change (specified in subparagraph (C)(ii)) for the service.
  `(iii) The `adjustment factor' for a locality for a physicians' service
  is the sum of--
  `(I) the practice expense component percent (divided by 100) for the service
  specified in paragraph (14)(B)(iii)(I), multiplied by the geographic practice
  cost index value specified for the locality in paragraph (14)(C)(iv), and
  `(II) 1 minus the practice expense component percent (divided by 100)  for
  the service, multiplied by the geographic work index value specified for
  the locality in Addendum C to the Model Fee Schedule for Physician Services
  (published on September 4, 1990, 55 Federal Register pp. 36238-36243).
  `(C) For purposes of this paragraph:
  `(i)(I) The `national weighted average prevailing charge' specified in
  this clause, for a physicians' service specified in paragraph (14)(C)(i),
  is the national weighted average prevailing charge for the service in 1989
  as determined by the Secretary using the best data available.
  `(II) For purposes of determining the national weighted average prevailing
  charge for a service under subclause (I), the Secretary shall adjust the
  prevailing charge for the service for each locality by the adjustment factor
  (specified in subparagraph (B)(iii)) for that locality.
  `(ii) The `percent change' specified in this clause, for a physicians'
  service specified in clause (i), is the percent change specified in paragraph
  (14)(C)(iii).'.
  (b) UNSURVEYED SURGICAL AND TECHNICAL PROCEDURES- Section 1842(b), as
  amended by subsection (a) (42 U.S.C. 1395u(b)), is further amended by
  adding at the end the following new paragraph:
  `(17)(A) In determining the reasonable charge for all physicians' services
  other than physicians' services specified in subparagraph (B) furnished
  during 1991, the prevailing charge otherwise recognized for a locality
  shall be reduced by 4 percent.
  `(B) For purposes of subparagraph (A), the physicians' services specified
  in this subparagraph are as follows:
  `(i) Radiology, anesthesia and physician pathology services, and physicians'
  services specified in paragraph (14)(C)(i).
  `(ii) Primary care services specified in subsection (i)(4), hospital
  inpatient medical services (HCPCS codes 90200 through 90292), consultations
  (HCPCS codes 90600 through 90654), preventive medicine visits (HCPCS codes
  90750 through 90754), emergency care facility services (HCPCS codes 99062
  through 99065), and critical care services (HCPCS codes 99160 through 99174).
  `(iii) Partial, simple and subcutaneous mastectomy (HCPCS codes 19160 through
  19180); tendon sheath injections and small joint arthrocentesis (HCPCS
  codes 20550 through 20610); femoral fracture and trochanteric fracture
  treatments (HCPCS codes 27230 through 27248); endotracheal intubation
  (HCPCS code 31500); thoracentesis (HCPCS code 32000); thoracostomy (HCPCS
  codes 32020 through 32036); lobectomy (HCPCS codes 32485 through 32490);
  aneurysm repair (HCPCS codes 35022 through 35111); enterectomy (HCPCS code
  44115); colectomy (HCPCS code 44151); cholecystectomy (HCPCS code 47612);
  cystourethroscopy (HCPCS code 52340); transurethral fulguration and
  resection (HCPCS codes 52606 and 52620); sacral laminectomy (HCPCS code
  63011); tympanoplasty with mastoidectomy (HCPCS codes 69643 and 69645);
  and ophthalmoscopy (HCPCS codes 92225, 92250, and 92260).'.
SEC. 6112. RADIOLOGY SERVICES.
  (a) REDUCTION IN FEE SCHEDULE- Section 1834(b)(4) (42 U.S.C. 1395m(b)(4))
  is amended--
  (1) by redesignating subparagraphs (D) and (E) as subparagraphs (E) and
  (F), respectively, and
  (2) by inserting after subparagraph (C) the following new subparagraph:
  `(D) 1991 FEE SCHEDULES- For radiologist services (other than portable X-ray
  services) furnished under this part during 1991, the conversion factors
  used in a locality under this subsection shall be determined as follows:
  `(i) NATIONAL WEIGHTED AVERAGE CONVERSION FACTOR-
  `(I) The Secretary shall estimate the national weighted average of the
  conversion factors used under this subsection for services furnished for
  the period during 1990 beginning April 1 using the best available data.
  `(II) For purposes of determining the national average conversion factor
  under subclause (I), the Secretary shall adjust the conversion factor
  for each locality by the adjustment factor (specified in clause (iii))
  for that locality.
  `(ii) REDUCED NATIONAL WEIGHTED AVERAGE- The national weighted average
  estimated under clause (i) shall be reduced by 12 percent.
  `(iii) LOCAL ADJUSTMENT- Subject to clause (iv), the conversion factor to
  be applied to the professional or technical component of a service in a
  locality is the sum of--
  `(I) the product of (aa) the portion of the reduced national weighted
  average conversion factor computed under clause (ii) which is attributable
  to physician work, and (bb) the geographic work index value for the locality
  (specified in Addendum C to the Model Fee Schedule for Physician Services
  (published on September 4, 1990, 55 Federal Register pp. 36238-36243)); and
  `(II) the product of (aa) the remaining portion of the reduced national
  weighted average conversion factor computed under clause (ii), and (bb) the
  geographic practice cost index value specified in section 1842(b)(14)(C)(iv)
  for the locality.
In applying this clause with respect to the professional component of
a service, 80 percent of the conversion factor shall be considered to be
attributable to physician work, and with respect to the technical component of
the service, 35 percent shall be considered to be attributable to physician
work.
  `(iv) MAXIMUM REDUCTION- The conversion factor to be applied to a locality
  under this subparagraph to the professional or technical component of a
  service shall not be reduced by more than 8 percent below the conversion
  factor applied in the locality under subparagraph (C) to such component.
  `(v) TREATMENT OF GLOBAL FEES- In applying this subparagraph in the
  case of a global fee for a service that includes a professional and a
  technical component, the conversion factor to be applied is the sum of
  the conversion factors for the professional and technical components of
  the service computed separately.'.
  (b) REDUCTION IN PREVAILING CHARGE LEVEL FOR OTHER RADIOLOGY SERVICES-
  (1) IN GENERAL- In applying part B of title XVIII of the Social Security
  Act, the prevailing charge for physicians' services, furnished during
  1991, which are radiology services  may not exceed the fee schedule amount
  established under section 1834(b) of such Act with respect to such services.
  (2) EXCEPTION- Paragraph (1) shall not apply to radiology services which are
  subject to section 6105(b) or 6108(b) of the Omnibus budget Reconciliation
  Act of 1989.
  (c) SPECIAL RULE FOR NUCLEAR MEDICINE SERVICES-
  (1) PAYMENT FOR SERVICES FURNISHED IN 1990 AND 1991- Section 6105(b)
  of the Omnibus Budget Reconciliation Act of 1989 is amended--
  (A) by inserting `after March 31, 1990, and before January 1, 1992' after
  `furnished', and
  (B) by striking all after `Act' the second place it appears and inserting
  `, there shall be substituted for the fee schedule otherwise applicable a
  fee schedule based on  1/3  on the fee schedule computed under such section
  (without regard to this subsection) and  2/3  on 101 percent of the 1988
  prevailing charge for such services.'.
  (2) ADJUSTED HISTORICAL PAYMENT BASIS- Section 1848(a)(2)(D) (42
  U.S.C. 1395w-4(a)(2)(D)) is amended--
  (A) in clause (ii) by inserting `, but excluding nuclear medicine services
  that are subject to section 6105(b) of the Omnibus Budget Reconciliation
  Act of 1989' after `section 1834(b)(6))', and
  (B) by adding at the end the following:
  `(iii) NUCLEAR MEDICINE SERVICES- In applying clause (i) in the case of
  physicians' services which are nuclear medicine services that are subject
  to section 6105(b) of the Omnibus Budget Reconciliation Act of 1989, there
  shall be substituted for the weighted average prevailing charge the amount
  provided under such section.'.
  (3) Section 1848(b)(2)(A) is amended by striking `section 1834(b)(6)'
  and inserting `section 1834(b)(6), but excluding nuclear medicine services'.
  (4) For purposes of determining the `fee schedule amount' under section
  1848(a) of the Social Security Act (42 U.S.C. 1395w-4(a)) for nuclear
  medicine services furnished on or after January 1, 1992, the Secretary
  of Health and Human Services shall apply relative values determined in
  accordance with the methodology utilized for other physicians' services
  and may not apply the relative values developed for such services under
  the fee schedule established under section 1834(b) of such Act.
  (d) EXTENSION OF SPLIT BILLING RULE FOR INTERVENTIONAL RADIOLOGISTS-
  Section 6105(c) of the Omnibus Budget Reconciliation Act of 1989 is amended
  by inserting `or 1991' after `1990' each place it appears.
  (e) LIMITATION ON ADJUSTMENTS- For radiologist services furnished during 1991
  for which payment is made under section 1834(b) of the Social Security Act--
  (1) a carrier may not make any adjustment, under section 1842(b)(3)(B)
  of such Act, in the payment amount for the service under section 1834(b)
  on the basis that the payment amount is higher than the charge applicable,
  for a comparable service and under comparable circumstances, to the
  policyholders and subscribers of the carrier,
  (2) no payment adjustment may be made under section 1842(b)(8) of such
  Act, and
  (3) section 1842(b)(9) of such Act shall not apply.
  (f) ESTABLISHMENT OF FLOOR- Section 1834(b)(4), as amended by subsection
  (a), is further amended by redesignating subparagraphs (E) and (F) as
  subparagraphs (F) and (G) and inserting after subparagraph (D) the following:
  `(E)(i) For purposes of determining payments for radiologist services
  furnished under this part during 1991 (and the adjusted historical payment
  basis (as defined in section 1848(a)(2)(D)) for such services, the Secretary
  shall establish a locality-specific conversion factor floor that is equal
  to 80 percent of the national weighted average of the conversion factors
  used under this subsection for radiologist services furnished during the
  9-month period beginning April 1, 1990 (as determined by the Secretary using
  the best data available), adjusted in the manner described in subparagraph
  (D)(iii) for the locality.
  `(ii) The conversion factor used under this subsection for services furnished
  in a locality during 1991 (and the adjusted historical payment basis used
  under section 1848) may not be less than the floor established under clause
  (i) for the locality.'.
SEC. 6113. ANESTHESIA SERVICES.
  (a) REDUCTION IN FEE SCHEDULE- Section 1842(q)(1) (42 U.S.C. 1395u(q)(1))
  is amended--
  (1) by inserting `(A)' after `(q)(1)', and
  (2) by adding at the end the following new subparagraph:
  `(B) For physician anesthesia services furnished under this part during
  1991, the conversion factor used in a locality under this subsection shall
  be determined as follows:
  `(i)(I) The Secretary shall estimate the national weighted average of the
  conversion factors used under this subsection for physician anesthesia
  services furnished during 1990 after March 31 using the best available data.
  `(II) For purposes of determining the national average conversion factor
  under subclause (I), the Secretary shall adjust the conversion factor
  for each locality by the adjustment factor (specified in clause (iii))
  for that locality.
  `(ii) The national weighted average estimated under clause (i) shall be
  reduced by 4 percent.
  `(iii) Subject to clause (iv), the conversion factor to be applied in a
  locality is the sum of--
  `(I) the product of (aa) the portion of the reduced national weighted
  average conversion factor computed under clause (ii) which is attributable
  to physician work and (bb) the geographic work index value for the locality
  (specified in Addendum C to the Model Fee Schedule for Physician Services
  (published on September 4, 1990, 55 Federal Register pp. 36238-36243)); and
  `(II) the product of (aa) the remaining portion of the reduced national
  weighted average conversion factor computed under clause (ii) and (bb) the
  geographic practice cost index value specified in section 1842(b)(14)(C)(iv)
  for the locality.
In applying this clause, 70 percent of the conversion factor shall be
considered to be attributable to physician work.
  `(iv) The conversion factor to be applied to a locality under this
  subparagraph shall not be reduced by more than 15 percent below the
  conversion factor applied in the locality for the period during 1990
  beginning April 1.'.
  (b) EXTENSION OF REDUCTION FOR SUPERVISION OF CONCURRENT SERVICES-
  Subparagraphs (A) and (B) of section 1842(b)(13) (42 U.S.C. 1395u(b)(13))
  are each amended by striking `1991' and inserting `1996'.
  (c) ESTABLISHMENT OF FLOOR- Section 1842(q)(1), as amended by subsection
  (a), is further amended by adding at the end the following:
  `(C)(i) For purposes of determining payments for physician anesthesia
  services furnished under this part during 1991 (and the adjusted historical
  payment basis (as defined in section 1848(a)(2)(D)) for such services,
  the Secretary shall establish a locality-specific conversion factor
  floor that is equal to 75 percent of the national weighted average of the
  conversion factors used under this subsection for physician anesthesia
  services furnished during the 9-month period beginning April 1, 1990 (as
  determined by the Secretary using the best data available), adjusted in
  the manner described in subparagraph (B)(iii) for the locality.
  `(ii) The conversion factor used under this subsection for services furnished
  in a locality during 1991 (and the adjusted historical payment basis used
  under section 1848) may not be less than the floor established under clause
  (i) for the locality.'.
SEC. 6114. PATHOLOGY SERVICES.
  (a) REDUCTION IN PAYMENTS FOR PHYSICIAN PATHOLOGY SERVICES-
  (1) IN GENERAL- Subject to paragraph (2), in determining the reasonable
  charge under part B of title XVIII of the Social Security Act for physician
  pathology services furnished on or after January 1, 1991, the prevailing
  charge for such service shall be 96 percent of the prevailing charge
  otherwise used under such part for services furnished during 1990 after
  March 31 (taking into account the amendments made by this Act).
  (2) LIMITATION- The prevailing charge for the technical and professional
  components of a physician pathology service furnished by a physician through
  an independent laboratory shall not be reduced pursuant to paragraph (1)
  to the extent that such reduction would reduce such prevailing charge
  below 115 percent of the prevailing charge for the professional component
  of such service when furnished by a hospital-based physician in the same
  locality. For purposes of the preceding sentence, an independent laboratory
  is a laboratory that is independent of a hospital and separate from the
  attending or consulting physicians' office.
  (b) REPEAL OF PATHOLOGY FEE SCHEDULE-
  (1) Subsection (f) of section 1834 (42 U.S.C. 1395m) is repealed.
  (2) Section 1833(a)(1)(J) (42 U.S.C. 1395l(a)(1)) is amended by striking
  `or physician pathology services' and by striking `or section 1834(f),
  respectively'.
  (3) Section 4050 of the Omnibus Budget Reconciliation Act of 1987 is
  repealed.
  (c) ADJUSTMENT- (1) The Secretary of Health and Human Services shall
  provide for an appropriate adjustment to payments under section 1848(a)
  of the Social Security Act (42 U.S.C. 1395w-4(a)) to reflect the technical
  component of furnishing physician pathology services through an independent
  laboratory. The adjustment shall apply to services furnished on or after
  January 1, 1992.
  (2) For purposes of paragraph (1), the term `independent laboratory'
  means a laboratory that is independent of a hospital and separate from
  the attending or consulting physician's office.
SEC. 6115. UPDATE FOR PHYSICIANS' SERVICES.
  (a) PERCENTAGE INCREASE IN MEI FOR 1991 AND CUSTOMARY AND PREVAILING
  CHARGES DURING 1991-
  (1) IN GENERAL- Section 1842(b)(4)(E) (42 U.S.C. 1395u(b)(4)(E)) is amended
  by adding at the end the following new clause:
  `(v) For purposes of this part for items and services furnished in 1991,
  the percentage increase in the MEI is--
  `(I) 0 percent for services (other than primary care services), and
  `(II) 2.0 percent for primary care services (as defined in subsection
  (i)(4)).'.
  (2) LIMITING UPDATE IN CUSTOMARY CHARGES- Section 1842(b)(4)(B) (42
  U.S.C. 1395u(b)(4)(B)) is amended by adding at the end the following
  new clause:
  `(iv) In determining the reasonable charge under paragraph (3) for
  physicians' services (other than primary care services, as defined in
  subsection (i)(4)) furnished during 1991, the customary charges shall be
  the same customary charges as were recognized under this section for the
  9-month period beginning April 1, 1990. In a case in which subparagraph
  (F) applies (relating to new physicians) so as to limit the customary
  charges of a physician during 1990 to a percent of prevailing charges,
  the previous sentence shall not prevent such limit on customary charges
  under such subparagraph from increasing in 1991 to a higher percent of
  such prevailing charges.'.
  (c) VOLUME PERFORMANCE STANDARDS- Section 1848(f)(2) (42
  U.S.C. 1395w-4(f)(2)) is amended--
  (1) in subparagraph (A) by striking `the performance standard factor
  (specified in subparagraph (B))' and inserting `1 percentage point for
  fiscal year 1991, 1 1/2  percentage points for fiscal year 1992, and 2
  percentage points for each succeeding fiscal year', and
  (2) by striking subparagraph (B) and inserting the following:
  `(B) Notwithstanding subparagraph (A), the performance standard rate of
  increase for a category of physicians' services (as defined in paragraph
  (5)) for fiscal year 1991 shall be the sum of--
  `(i) the Secretary's estimate of the rate of increase in expenditures
  for all physicians' services for portions of calendar years occurring in
  such fiscal year (determined without regard to the amendments made by the
  Omnibus Budget Reconciliation Act of 1990), and
  (ii) the Secretary's estimate of the percentage increase or decrease in
  expenditures for the category of services involved that will result from
  changes in law and regulations,
reduced by 2.0 percentage points.'.
SEC. 6116. NEW PHYSICIANS.
  (a) EXTENSION OF CUSTOMARY CHARGE LIMIT FOR 1991- Section 1842(b)(4)(F)
  (42 U.S.C. 1395u(b)(4)(F)) is amended by adding at the end the following:
  `For the second and third calendar years during which the first sentence of
  this subparagraph no longer applies, the Secretary shall set the customary
  charge at a level no higher than 90 and 95 percent, respectively, of the
  prevailing charge for the service.'.
  (b) APPLICATION UNDER FEE SCHEDULE- Section 1848(a) (42 U.S.C. 1395w-4(a))
  is amended by adding at the end the following new paragraph:
  `(4) TREATMENT OF NEW PHYSICIANS- In the case of physicians' services
  furnished by a physician before the end of the physician's first full
  calendar year of furnishing services for which payment may be made under this
  part, and during each of the 3 succeeding years, the fee schedule amount
  to be applied shall be 80 percent, 85 percent, 90 percent, and 95 percent,
  respectively, of the fee schedule amount applicable to physicians who are
  not subject to this paragraph. The preceding sentence shall not apply to
  primary care services or services furnished in a rural area (as defined
  in section 1886(d)(2)) that is designated under section 322(a)(1)(A)
  of the Public Health Service Act as a health manpower shortage area.'.
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  services furnished on or after January 1, 1991.
SEC. 6117. ASSISTANTS AT SURGERY.
  (a) PHYSICIANS AS ASSISTANTS-AT-SURGERY- Section 1848(i) (42
  U.S.C. 1395w-4(i)) is amended by adding at the end the following:
  `(2) ASSISTANTS-AT-SURGERY- In the case of a surgical service furnished by a
  physician, if payment is made separately under this part for the services of
  a physician serving as an assistant-at-surgery, such payment shall not exceed
  16 percent of the amount otherwise determined under this section (or for
  1991 under section 1842(b)(3)) for the global surgical service involved.'.
  (b) EFFECTIVE DATE- The amendments made by subsections (a) and (b) shall
  apply with respect to services furnished on or after January 1, 1991.
SEC. 6118. ADVANCE DETERMINATIONS BY CARRIERS.
  (a) IN GENERAL- Section 1842 (42 U.S.C. 1395u) is amended by inserting
  after subsection (n) the following:
  `(o)(1)(A) A carrier shall determine in advance whether an item or service
  is not allowable under section 1862(a)(1) if the item or service has been
  listed by the Secretary under paragraph (2).
  `(B)(i) A carrier may in accordance with procedures established by the
  Secretary, determine in advance whether an item or service is not allowable
  under section 1862(a)(1) if--
  `(I) the item or service is furnished or ordered by a physician described
  under paragraph (3),
  `(II) the carrier notifies the physician as to the kinds of items or
  services that will be subject to advance determination, and
  `(III) the carrier provides a general notice for entities likely to furnish
  the kinds of items or services described in the notification under subclause
  (II) that are ordered by the physician.
  `(ii) A carrier may determine in advance whether an item is not allowable
  under section 1862(a)(1) if--
  `(I) the item is furnished by an entity described under paragraph (4), and
  `(II) the carrier notifies the entity as to the kinds of items that will
  be subject to advance determination.
  `(C) The preceding subparagraphs do not apply--
  `(i) to the kinds of items and services in an area that are under review
  by a utilization and quality control peer review organization, or
  `(ii) in cases of a medical emergency or under such other circumstances
  as the Secretary may specify.
  `(2) The Secretary may list specific expensive items or services that the
  Secretary finds should be subject to advance determination.
  `(3) Items and services furnished or ordered by a particular physician
  are subject to paragraph (1)(B)(i) if--
  `(A) a substantial number of items or services furnished or ordered by the
  physician have been found not to be allowable under section 1862(a)(1), or
  `(B) a carrier has identified a pattern of overutilization resulting from
  the performance or ordering practices of the physician, has so informed
  the physician, and has afforded the physician an opportunity to respond.
  `(4) Items furnished by a particular entity are subject to paragraph
  (1)(B)(ii) if--
  `(A) a substantial number of items furnished by the entity have been found
  not to be allowable under section 1862(a)(1), or
  `(B) a carrier has identified a pattern of overutilization resulting from
  the business practices of the entity, has so informed the entity, and has
  afforded the entity an opportunity to respond.'.
  (b) EFFECTIVE DATE- The amendments made by subsection (a) shall become
  effective with respect to items and services furnished on or after January
  1, 1991.
SEC. 6119. LIMITATION ON BENEFICIARY LIABILITY.
  Section 1848(g)(2)(A) (42 U.S.C. 1395w-4(g)(2)(A)) is amended by adding
  at the end thereof the following:
`In the case of evaluation and management services (as specified in section
1842(b)(17)(B)(ii)), the preceding sentence shall be applied by substituting
`50 percent' for `25 percent'.'.
SEC. 6120. STATEWIDE FEE SCHEDULE AREAS FOR PHYSICIANS' SERVICES.
  (a) IN GENERAL- Notwithstanding section 1848(j)(2) of the Social Security
  Act (42 U.S.C. 1395w-4(j)(2)), in the case of a State that meets the
  requirements specified in subsection (b) on or before April 1, 1991, the
  Secretary of Health and Human Services (Secretary) shall treat the State
  as a single fee schedule area for purposes of determining--
  (1) the adjusted historical payment basis (as defined in section
  1848(a)(2)(D) of such Act (42 U.S.C. 1395w-4(a)(2)(D))), and
  (2) the fee schedule amount (as referred to in section 1848(a) (42
  U.S.C. 1395w-4(a)) of such Act),
for physicians' services (as defined in section 1848(j)(3) of such Act
(42 U.S.C. 1395w-4(j)(3))) furnished on or after January 1, 1992.
  (b) REQUIREMENTS- The requirements specified in this subsection are that
  (on or before April 1, 1991) there are written expressions of support for
  treatment of the State as a single fee schedule area (on a budget-neutral
  basis) from--
  (1) each member of the congressional delegation from the State, and
  (2) organizations representing urban and rural physicians in the State.
  (c) BUDGET NEUTRALITY- Notwithstanding section 1842(b)(3) of such Act (42
  U.S.C. 1395u(b)(3)), the Secretary shall provide for treatment of a State
  as a single fee schedule area (as described in subsection (a)) in a manner
  that ensures that total payments for physicians' services (as so defined)
  furnished by physicians in the State during 1992 are not greater or less
  than total payments for such services would have been but for such treatment.
  (d) CONSTRUCTION- Nothing in this section shall be construed as limiting
  the availability (to the Secretary, the appropriate agency or organization
  with a contract under section 1842, or physicians in a State) of otherwise
  applicable administrative procedures for modifying the fee schedule area
  or areas in the State after implementation of subsection (a) with respect
  to the State.
SEC. 6121. TECHNICAL CORRECTIONS RELATING TO PHYSICIAN PAYMENT.
  (a) COMPARABILITY AND INHERENT REASONABLENESS ADJUSTMENTS-
  (1) Section 1842(b)(3)(B) (42 U.S.C. 1395u(b)(3)(B)) is amended by inserting
  `, subject to section 1848(i)(2),' after `such charge will be reasonable
  and'.
  (2) Section 1848(i) is amended by adding at the end the following new
  paragraph:
  `(3) NO COMPARABILITY ADJUSTMENT- For physicians' services (including
  radiology and anesthesia services) for which payment under this part is
  determined under this section--
  `(A) a carrier may not make any adjustment in the payment amount under
  section 1842(b)(3)(B) on the basis that the payment amount is higher
  than the charge applicable, for a comparable service and under comparable
  circumstances, to the policyholders and subscribers of the carrier,
  `(B) no payment adjustment may be made under section 1842(b)(8), and
  `(C) section 1842(b)(9) shall not apply.'.
  (b) ALLOWING PERIODIC RECOMPUTATION OF GPCI- Section 1848(e)(1) (42
  U.S.C. 1395w-4(e)(1)) is amended by adding at the end the following new
  subparagraph:
  `(C) PERIODIC RECOMPUTATION OF INDICES- The Secretary shall, from time
  to time, recompute the indices established under this paragraph based
  on the formula described in subparagraph (A) to reflect the most recent
  data available.'.
  (c) OVERVALUED PROCEDURES-
  (1) Section 1842(b)(14) of the Social Security Act (42 U.S.C. 1395u(b)(14))
  is amended--
  (A) in subparagraph (B)(iii)(I), by striking `practice expense ratio for the
  service (specified in table #1 in the Joint Explanatory Statement referred to
  in subparagraph (C)(i))' and inserting `practice expense component (percent),
  divided by 100, specified in Appendix A (pages 187 through 194) of the
  Report of the Medicare and Medicaid Health Budget Reconciliation Amendments
  of 1989, prepared by the Subcommittee on Health and the Environment of the
  Committee on Energy and Commerce, House of Representatives (Committee Print
  101-M, 101st Congress, 1st Session) for the service';  (B) in subparagraph
  (B)(iii)(II), by striking `practice expense ratio' and inserting `practice
  expense component (percent), divided by 100';
  (C) in subparagraph (C)(i), by striking `physicians' services specified in
  table #2 in the Joint Explanatory Statement of the Committee of Conference
  submitted with the Conference Report to accompany H.R. 3299 (the `Omnibus
  Budget Reconciliation Act of 1989'), 101st Congress,' and inserting
  `procedures listed (by code and description) in the Overvalued Procedures
  List for Finance Committee, Revised September 20, 1989, prepared by the
  Physician Payment Review Commission';
  (D) in subparagraph (C)(iii), by striking `The `percent change' specified
  in this clause, for a physicians' service specified in clause (i), is
  the percent change specified for the service in table #2 in the Joint
  Explanatory Statement' and inserting `The `percentage change' specified
  in this clause, for a physicians' service specified in clause (i), is the
  percent difference (but expressed as a positive number) specified for the
  service in the list'; and
  (E) in subparagraph (C)(iv), by striking `such value specified for the
  locality in table #3 in the Joint Explanatory Statement referred to in clause
  (i)' and inserting `the Geographic Overhead Costs Index specified for the
  locality in table 1 of the September 1989 Supplement to the Geographic
  Medicare Economic Index: Alternative Approaches (prepared by the Urban
  Institute and the Center for Health Economics Research)'.
  (2) Section 1842(b)(4)(E)(iv)(I) of such Act (42
  U.S.C. 1395u(b)(4)(E)(iv)(I)) is amended by striking `Table #2' and all
  that follows through `101st Congress' and inserting `the list referred to
  in paragraph (14)(C)(i)'.
  (3) The amendments made by paragraphs (1) and (2) apply to services
  furnished after March 1990.
  (d) MVPS AS MULTIPLICATIVE, NOT ADDITIVE- Section 1848(f)(2)(A) (42
  U.S.C. 1395w-4(f)(2)(A)) is amended--
  (1) in the matter preceding clause (i) by striking `sum' and inserting
  `product';
  (2) in clauses (i) through (iv)--
  (A) by inserting `1.00 plus (' before `the Secretary's' each place it
  appears, and
  (B) by inserting `) divided by 100' before the comma at the end of each
  clause; and
  (3) in the matter following clause (iv), by striking `reduced' and inserting
  `minus 1.0 percentage point, multiplied by 100, and reduced'.
  (e) ELIMINATION OF RESTRICTION ON INCORPORATION OF TIME IN VISIT CODES-
  Section 1848(c)(4) (42 U.S.C. 1395w-4(c)(4)) is amended by striking `only
  for services furnished on or after January 1, 1993'.
  (f) TREATMENT OF PRICE INCREASE IN DETERMINING PERFORMANCE STANDARD RATES
  OF INCREASE- Section 1848(f)(2)(A)(iv) (42 U.S.C. 1395w-4(f)(2)(A)(iv))
  is amended by inserting `including changes in law and regulations affecting
  the percentage increase described in clause (i)' after `law or regulations'.
  (g) MISCELLANEOUS FEE SCHEDULE CORRECTIONS-
  (1) CHANGES IN SECTION 1848- Section 1848 (42 U.S.C. 1395w-4) is amended--
  (A) in subsection (c), by redesignating the second paragraph (3), and
  paragraphs (4) and (5), as paragraphs (4) through (6), respectively;
  (B) in subsection (c)(4), as redesignated by subparagraph (C), is amended
  by striking `subsection' and inserting `section';
  (C) in subsection (d)(1)--
  (i) in subparagraph (A)--
  (I) by inserting `(or factors)' after `conversion factor' each place it
  appears in the subparagraph, and
  (II) by striking `subparagraph (C)' and inserting `paragraph (3)'; and
  (ii) in subparagraph (C)--
  (I) in clause (i), by striking `(or factors)'; and
  (II) in clause (ii), by inserting `the conversion factor (or factors) which
  will apply to physicians' services for the following year and' before `the
  update (or updates)', and by striking `the following' and inserting `such';
  (D) in subsection (d)(2)(A)--
  (i) in the matter preceding clause (i) by striking `services' the first place
  it appears and inserting `services (as defined in subsection (f)(5)(A))';
  (ii) in clause (i) by inserting `for the services involved' after `section
  1842(b)(3)'; and
  (iii) in clause (ii)--
  (I) by striking `all physicians' services (as defined in subsection
  (f)(5)(A))' and inserting `the services involved'; and
  (II) by striking `all such physicians' and inserting `such'; and
  (iv) in the last sentence by striking `proportion of HMO enrollees' and
  inserting `proportion of individuals who are enrolled under this part who
  are HMO enrollees';
  (E) in subsection (d)(2)(E)(ii)(I), by inserting `payments for' after
  `under this part for';
  (F) in subsection (d)(3)(B)--
  (i) in clause (i)--
  (I) by striking `update for' and inserting `update for a category of
  physicians' services for'; and
  (II) by striking `physicians' services (as defined in subsection (f)(5)(A))'
  and inserting `services in such category';
  (ii) in clause (ii)--
  (I) by inserting `more than' after `decrease of'; and
  (II) in subclause (I), by striking `more than';
  (G) in subsection (f)(1)--
  (i) in subparagraph (A), by striking `each category' and inserting `each
  category and group';
  (ii) in subparagraph (C) by striking `all physicians' services and for'; and
  (iii) in subparagraph (D)(i) by striking `calendar years' and inserting
  `portions of calendar years';
  (H) in subsection (f)(2)(A)--
  (i) in the matter preceding clause (i)--
  (I) by striking `each' and inserting `the'; and
  (II) by striking `increase' and inserting `increase for a category of
  physicians' services';
  (ii) in subsection (f)(2)(A)(i), by striking `physicians' services (as
  defined in subsection (f)(5)(A))' and inserting `services in such category';
  (iii) in subsection (f)(2)(A) (iii) by striking `physicians' services'
  and inserting `services in such category'; and
  (iv) in subsection (f)(2)(A)(iv) by striking `physicians' services (as
  defined in subsection (f)(5)(A)' and inserting `services in such category';
  (I) in subsection (f)(4)--
  (i) in subparagraph (A)--
  (I) by striking `paragraph (B)' and inserting `subparagraph (B)'; and
  (II) by striking `after' and all that follows through `1991'; and
  (ii) in subparagraph (B) by striking `congress specifically approves the
  plan' and inserting `specifically approved by law'.
  (J) in subparagraphs (A) and (B) of subsection (g)(2), by inserting `other
  than radiologist services subject to section 1834(b),' after `during 1991,'
  and after `during 1992,', respectively;
  (K) in subsection (i)(1)(A) by striking `historical payment basis (as
  defined in subsection (a)(2)(C)(i))' and inserting `adjusted historical
  payment basis (as defined in subsection (a)(2)(D)(i))'; and
  (L) in subsection (j)(1), by striking `, and such other' and all that
  follows through the period and inserting `(as defined by the Secretary)
  and all other physicians' services.'.
  (2) MISCELLANEOUS-
  (A) Effective as if included in the Omnibus Budget Reconciliation Act of
  1989, section 6102(e)(4) of such Act is amended by striking `rate determined'
  after `prevailing charge'.
  (B) Effective January 1, 1991, section 1842(b)(3)(G) is amended by striking
  `subsection (j)(1)(C)' and inserting `section 1848(g)(2)'.
  (C) Section 1842(b)(12)(A)(ii)(II) is amended by striking `, as the case
  may be'.
  (D) Section 1833(a)(1)(H) is amended by striking `, as the case may be'.
  (E) Section 6102(e)(11) of the Omnibus Budget Reconciliation Act of 1989
  is amended by inserting `of Health and Human Services' after `Secretary'.
  (h) REPEAL OF REPORTS NO LONGER REQUIRED-
  (1) Subsection (b) of section 4043 of the Omnibus Budget Reconciliation
  Act of 1987 is repealed.
  (2) Subsection (c) of section 4048 of such Act is repealed.
  (3) Section 4049(b)(1) of such Act is amended by striking `, and shall
  report' and all that follows up to the period at the end.
  (4) Section 4056(a)(1) of such Act, as redesignated by section 411(f)(14)
  of the Medicare Catastrophic Coverage Act of 1988, is amended by striking
  the last sentence.
  (5) Section 4056(b)(2) of such Act is amended by striking the second
  sentence.
  (i) ADJUSTMENT OF EFFECTIVE DATES- Effective as if included in the enactment
  of the Omnibus Budget Reconciliation Act of 1987--
  (1) section 4048(b) of such Act is amended by striking `January 1, 1989'
  and inserting `March 1, 1989', and
  (2) section 4049(b)(2) of such Act is amended by striking `January 1,
  1989' and inserting `April 1, 1989'.
SEC. 6122. BILLING FOR SERVICES OF SUBSTITUTE PHYSICIAN.
  (a) UNDER MEDICARE- Section 1842(b)(6) (42. U.S.C. 1395u(b)(6)) is amended--
  (1) by striking `and' before `(C)', and
  (2) by striking `involved.' and inserting `involved, and (D) in the case
  of services furnished (during a period that does not exceed 14 continuous
  days in the case of an informal reciprocal arrangement or 90 continuous
  days (or such longer period as the Secretary may provide) in the case of
  an arrangement involving per diem or other fee-for-time compensation) by,
  or incident to the services of, one physician to the patients of another
  physician who submits the claim for such services, payment shall be made to
  the physician submitting the claim (as if the services were furnished by,
  or incident to, the physician's services), but only if the claim identifies
  (in a manner specified by the Secretary) the physician who furnished
  the services.'.
  (b) UNDER MEDICAID- Section 1902(a)(32) (42 U.S.C. 1396a(a)(32))--
  (1) by striking `and' before `(B)',
  (2) by inserting `and' at the end of subparagraph (B), and
  (3) by adding at the end the following:
  `(C) in the case of services furnished (during a period that does not exceed
  14 continuous days in the case of an informal reciprocal arrangement or
  90 continuous days (or such longer period as the Secretary may provide)
  in the case of an arrangement involving per diem or other fee-for-time
  compensation) by, or incident to the services of, one physician to the
  patients of another physician who submits the claim for such services,
  payment shall be made to the physician submitting the claim (as if the
  services were furnished by, or incident to, the physician's services),
  but only if the claim identifies (in a manner specified by the Secretary)
  the physician who furnished the services.'.
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  services furnished on or after the date of the enactment of this Act.
SEC. 6123. STUDY OF PREPAYMENT MEDICAL REVIEW SCREENS.
  (a) IN GENERAL- The Secretary of Health and Human Services (in this section
  referred to as the `Secretary') shall conduct a study of the effect of
  the release of prepayment medical review screen parameters on physician
  billings for the services to which the parameters apply.
  (b) LIMITATIONS- The study shall be based upon the release of the screen
  parameters at a minimum of six carrier sites.
  (c) REPORT- The Secretary shall report the results of the study to the
  Committees on Ways and Means and Energy and Commerce of the House of
  Representatives and the Committee on Finance of the Senate not later than
  October 1, 1992.
SEC. 6124. UTILIZATION SCREENS FOR PHYSICIAN VISITS IN REHABILITATION
HOSPITALS.
  Not later than 180 days after the date of the enactment of this Act, the
  Secretary of Health and Human Services (hereafter in this section referred to
  as the `Secretary') shall revise the utilization screen established pursuant
  to section 4085(h) of the Omnibus Budget Reconciliation Act of 1987 to
  apply to all physician visits to an inpatient of a rehabilitation hospital
  or unit.  Such screen shall reflect a standard of physician care that is
  comparable to the standard of physician care recognized for inpatients of
  acute care hospitals and units, particularly with respect to the frequency
  of visits by an attending physician. The Secretary shall provide that the
  provisions of this section shall be implemented in a manner that provides
  that expenditures are not greater or lesser than they would have been but
  for the enactment of the provisions of this section.
SEC. 6125. STUDY OF HIGH VOLUME PAYMENT ADJUSTMENT.
  (a) IN GENERAL- (1) The Secretary of Health and Human Services (in this
  section referred to as the `Secretary') shall conduct a study of the
  feasibility and desirability of adjusting payments to individual physicians
  performing a high volume of a particular procedure in order to reflect
  the economies of scale afforded by volume.
  (2) Taking into account the potential impact of such an adjustment on
  the medicare program costs and patient access to necessary services, the
  Commission shall report to the Committees on Ways and Means and Energy and
  Commerce of the House of Representatives and the Committee on Finance of
  the Senate on--
  (A) the types of services or procedures for which such an adjustment would
  be appropriate,
  (B) options for implementing such an adjustment,
  (C) appropriate exceptions to such an adjustment, and
  (D) appropriate safeguards to ensure access by medicare beneficiaries to
  necessary services.
  (b) DEADLINES FOR REPORT- The Secretary shall submit the report required
  by subsection (a) on or before July 1, 1992.
Subpart B--Payments for Other Items and Services
SEC. 6130. HOSPITAL OUTPATIENT SERVICES.
  (a) REDUCTION IN PAYMENTS FOR CAPITAL-RELATED COSTS-
  Section 1861(v)(1)(S)(ii)(I) of the Social Security Act (42
  U.S.C. 1395x(v)(1)(S)(ii)(I)) is amended by striking `fiscal year
  1990' and inserting `during the period beginning on October 1, 1989,
  and ending September 30, 1991 and by 10 percent for portions of cost
  reporting periods occurring during the period beginning on October 1,
  1991 and ending September 30, 1995'.
  (b) REDUCTION IN REASONABLE COSTS OF HOSPITAL OUTPATIENT SERVICES- Section
  1861(v)(1)(S)(ii) of such Act (42 U.S.C. 1395x(v)(1)(S)(ii)) is amended--
  (1) in subclause (II), by striking `1886(d)(5)(D)(iii)).' and inserting
  `1886(d)(5)(D)(iii)), a rural primary care hospital (as defined in subsection
  (mm)(1)), or a hospital designated under section 1820(e) as an essential
  access community hospital.';
  (2) in subclause (III)--
  (A) by striking `subclause (I)' and inserting `subclauses (I) and (II)', and
  (B) by striking `capital-related' and inserting `the';
  (3) by redesignating subclauses (II) and (III) as subclauses (III) and
  (IV); and
  (4) by inserting after subclause (I) the following new subclause:
  `(II) The Secretary shall reduce the reasonable cost of outpatient
  hospital services (other than the capital-related costs of such services)
  otherwise determined pursuant to section 1833(a)(2)(B)(i)(I) by 5 percent
  for payments attributable to portions of cost reporting periods during
  the period beginning on October 1, 1990, and ending December 31, 1995.'.
  (c) EXTENSION OF ASC BLEND AMOUNTS FOR EYE AND EYE AND EAR
  SPECIALTY HOSPITALS- The last sentence of section 1833(i)(3)(B)(ii)
  (42 U.S.C. 1395l(i)(3)(B)(ii)) is amended by striking `in fiscal year
  1989 or fiscal year 1990' and inserting `on or after October 1, 1988,
  and before September 30, 1993'.
SEC. 6131. CLINICAL DIAGNOSTIC LABORATORY SERVICES.
  (a) CAP ON ANNUAL FEE SCHEDULE INCREASES- Section 1833(h)(2)(A)(ii)
  (42 U.S.C. 1395l(h)(2)(A)(ii)) is amended--
  (1) by striking `any other provision of this subsection' and inserting
  `clause (i)';
  (2) by striking `and' at the end of subclause (I);
  (3) by striking the period at the end of subclause (II) and inserting `,
  and'; and
  (4) by adding at the end the following new subclause:
  `(III) the annual adjustment in the fee schedules under clause (i) for
  1991 shall be a 2 percent increase.'.
  (b) REDUCTION IN NATIONAL CAP- Section 1833(h)(4)(B) (42
  U.S.C. 1395l(h)(4)(B)) is amended--
  (1) by striking `and' at the end of clause (ii);
  (2) in clause (iii), by inserting `and before January 1, 1991,' after
  `1989,';
  (3) by striking the period at the end of clause (iii) and inserting `,
  and'; and
  (4) by adding at the end the following new clause:
  `(iv) after December 31, 1990, is equal to 90 percent of the median of all
  the fee schedules established for that test for that laboratory setting
  under paragraph (1).'.
SEC. 6132. DURABLE MEDICAL EQUIPMENT.
  (a) DEVELOPMENT AND APPLICATION OF NATIONAL LIMITS ON FEES-
  (1) INEXPENSIVE AND ROUTINELY PURCHASED DURABLE MEDICAL EQUIPMENT AND
  ITEMS REQUIRING FREQUENT AND SUBSTANTIAL SERVICING- Paragraphs (2) and
  (3) of section 1834(a) (42 U.S.C. 1395m(a)) are each amended--
  (A) in subparagraph (B)(i), by striking `or' at the end;
  (B) by striking clause (ii) of subparagraph (B) and inserting the following:
  `(ii) in 1991 is the sum of (I) 67 percent of the local payment amount
  for the item or device computed under subparagraph (C)(i)(I) for 1991,
  and (II) 33 percent of the national limited payment amount for the item
  or device computed under subparagraph (C)(ii) for 1991;
  `(iii) in 1992 is the sum of (I) 33 percent of the local payment amount
  for the item or device computed under subparagraph (C)(i)(II) for 1992,
  and (II) 67 percent of the national limited payment amount for the item
  or device computed under subparagraph (C)(ii) for 1992; and
  `(iv) in 1993 and each subsequent year is the national limited payment
  amount for the item or device computed under subparagraph (C)(ii) for that
  year.'; and
  (C) by adding at the end the following new subparagraph:
  `(C) COMPUTATION OF LOCAL PAYMENT AMOUNT AND NATIONAL LIMITED PAYMENT
  AMOUNT- For purposes of subparagraph (B)--
  `(i) the local payment amount for an item or device for a year is equal to--
  `(I) for 1991, the amount specified in subparagraph (B)(i) for 1990
  increased by the covered item increase for 1991, and
  `(II) for 1992, the amount determined under this clause for the preceding
  year increased by the covered item increase for 1992; and
  `(ii) the national limited payment amount for an item or device for a year
  is equal to--
  `(I) for 1991, the local payment amount determined under clause (i)
  for such item or device for that year, except that the national limited
  payment amount may not exceed 100 percent of the weighted average of all
  local payment amounts determined under such clause for such item for that
  year and may not be less than 85 percent of the weighted average of all
  local payment amounts determined under such clause for such item, and
  `(II) for each subsequent year, the amount determined under this clause
  for the preceding year increased by the covered item increase for such
  subsequent year.'.
  (2) MISCELLANEOUS ITEMS AND OTHER COVERED ITEMS- Section 1834(a)(8)
  (42 U.S.C. 1395m(a)(8)) is amended--
  (A) in subparagraph (A)(ii)--
  (i) by striking `or' at the end of subclause (I);
  (ii) in subclause (II)--
  (I) by striking `1991 or', and
  (II) by striking `the percentage increase' and all that follows through
  the period and inserting `the covered item increase for the year.';
  (iii) by redesignating subclause (II) as subclause (III); and
  (iv) by inserting after subclause (I) the following new subclause:
  `(II) in 1991, equal to the local purchase price computed under this clause
  for the previous year, increased by the covered item increase for 1991,
  and decreased by the percentage by which the average of the purchase prices
  on claims submitted for all items described in paragraph (7) exceeds 110
  percent of the average of the reasonable charges on claims paid for the
  items during the 6-month period ending with December 1986; or';
  (B) by amending subparagraph (B) to read as follows:
  `(B) COMPUTATION OF NATIONAL LIMITED PURCHASE PRICE- With respect to the
  furnishing of a particular item in a year, the Secretary shall compute a
  national limited purchase price--
  `(i) for 1991, equal to the local purchase price computed under subparagraph
  (A)(ii) for the item for the year, except that such national limited
  purchase price may not exceed 100 percent of the weighted average of all
  local purchase prices for the item computed under such subparagraph for
  the year, and may not be less than 85 percent of the weighted average of
  all local purchase prices for the item computed under such subparagraph
  for the year; and
  `(ii) for each subsequent year, equal to the amount determined under this
  clause for the preceding year increased by the covered item increase for
  such subsequent year.';
  (C) in subparagraph (C)--
  (i) by striking `regional purchase price' each place it appears and inserting
  `national limited purchase price',
  (ii) by striking `and subject to subparagraph (D)',
  (iii) in clause (ii)--
  (I) by striking `75' and inserting `67'; and
  (II) by striking `25' and inserting `33', and
  (iv) in clause (iii)--
  (I) in subclause (I), by striking `50' and inserting `33' and striking
  `subparagraph (A)(ii)(II)' and inserting `subparagraph (A)(ii)(III)'; and
  (II) in subclause (II), by striking `50' and inserting `67'; and
  (D) by striking subparagraph (D).
  (3) OXYGEN AND OXYGEN EQUIPMENT- Section 1834(a)(9) (42 U.S.C. 1395m(a)(9))
  is amended--
  (A) in subparagraph (A)(ii)(II), by striking `the percentage increase'
  and all that follows through the period and inserting `the covered item
  increase for the year.';
  (B) by amending subparagraph (B) to read as follows:
  `(B) COMPUTATION OF NATIONAL LIMITED MONTHLY PAYMENT RATE- With respect
  to the furnishing of an item in a year, the Secretary shall compute a
  national limited monthly payment rate equal to--
  `(i) for 1991, the local monthly payment rate computed under subparagraph
  (A)(ii)(II) for the item for the year, except that such national limited
  monthly payment rate may not exceed 100 percent of the weighted average
  of all local monthly payment rates computed for the item under such
  subparagraph for the year, and may not be less than 85 percent of the
  weighted average of all local monthly payment rates computed for the item
  under such subparagraph for the year; and
  `(ii) for each subsequent year, equal to the amount determined under this
  clause for the preceding year increased by the covered item increase for
  such subsequent year.';
  (C) in subparagraph (C)--
  (i) by striking `regional monthly payment rate' each place it appears and
  inserting `national limited monthly payment rate',
  (ii) in clause (ii)--
  (I) by striking `75' and inserting `67'; and
  (II) by striking `25' and inserting `33', and
  (iii) in clause (iii)--
  (I) in subclause (I), by striking `50' and inserting `33'; and
  (II) in subclause (II), by striking `50' and inserting `67' and striking
  `subparagraph (B)(i)' and inserting `subparagraph (B)(ii)'; and
  (D) by striking subparagraph (D).
  (4) DEFINITION- Section 1834(a) (42 U.S.C. 1395m(a)) is amended by adding
  at the end the following new paragraph:
  `(14) COVERED ITEM INCREASE- In this subsection, the term `covered item
  increase' means, for 1991 and each subsequent year, the percentage increase
  in the consumer price index for all urban consumers (United States city
  average) for the 12-month period ending with June of the previous year.'.
  (5) CONFORMING AMENDMENT- Section 1834(a)(12) (42 U.S.C. 1395m(a)(12)) is
  amended by striking `defined for purposes of paragraphs (8)(B) and (9)(B)'.
  (b) LIMITATION ON MONTHLY RECOGNIZED RENTAL AMOUNTS FOR MISCELLANEOUS ITEMS-
  Section 1834(a)(7)(A)(i) (42 U.S.C. 1395m(a)(7)(A)(i)) is amended--
  (1) by striking `for each such month' and inserting `for each of the first
  3 months of such period'; and
  (2) by striking the semicolon at the end and inserting the following:
  `, and for each of the remaining months of such period is 7.5 percent of
  such purchase price;'.
  (c) FREEZE IN REASONABLE CHARGES FOR ENTERAL AND PARENTERAL NUTRIENTS,
  SUPPLIES, AND EQUIPMENT DURING 1991- In determining the amount of payment
  under part B of title XVIII of the Social Security Act for enteral and
  parenteral nutrients, supplies, and equipment furnished during 1991,
  the charges determined to be reasonable with respect to such nutrients,
  supplies, and equipment may not exceed the charges determined to be
  reasonable with respect to such items for 1990.
  (d)  OXYGEN RETESTING- Section 1834(a)(5) (42 U.S.C. 1395m(a)(5))
  is amended--
  (1) in subparagraph (A), by striking `(B) and (C)' and inserting `(B),
  (C), and (E)'; and
  (2) by adding at the end the following new subparagraph:
  `(E) RECERTIFICATION FOR PATIENTS RECEIVING HOME OXYGEN THERAPY- In the
  case of a patient receiving home oxygen therapy services who, at the time
  such services are initiated, has an initial arterial blood gas value at
  or above a partial pressure of 55 or an arterial oxygen saturation at or
  above 89 percent (or such other values or saturations as the Secretary may
  specify), no payment may be made under this part for such services after
  the expiration of the 60-day period that begins on the date the patient
  first received such services unless the patient's attending physician
  certifies that, on the basis of a followup test of a patient's arterial
  blood gas value or arterial oxygen saturation conducted during the final
  15 days of such 60-day period, there is a medical need for the patient to
  continue to receive such services.'.
  (e) EFFECTIVE DATE- (1) Except as provided in paragraph (2), the amendments
  made by this section shall apply to items furnished on or after January
  1, 1991.
  (2) The amendments made by subsection (d) shall apply to patients who
  first receive home oxygen therapy services on or after January 1, 1991.
SEC. 6133. ORTHOTICS AND PROSTHETICS.
  (a) MAINTAINING CURRENT PAYMENT METHODOLOGY- Section 1834 (42 U.S.C. 1395m)
  is amended by adding at the end the following new subsection:
  `(h) PAYMENT FOR PROSTHETIC DEVICES AND ORTHOTICS AND PROSTHETICS-
  `(1) GENERAL RULE FOR PAYMENT-
  `(A) IN GENERAL- Payment under this subsection for prosthetic devices
  and orthotics and prosthetics shall be made in a lump-sum amount for the
  purchase of the item in an amount equal to 80 percent of the payment basis
  described in subparagraph (B).
  `(B) PAYMENT BASIS- Except as provided in subparagraph (C), the payment
  basis described in this subparagraph is the lesser of--
  `(i) the actual charge for the item; or
  `(ii) the amount recognized under paragraph (2) as the purchase price for
  the item.
  `(C) EXCEPTION FOR CERTAIN PUBLIC HOME HEALTH AGENCIES- Subparagraph (B)(i)
  shall not apply to an item furnished by a public home health agency (or
  by another home health agency which demonstrates to the satisfaction of
  the Secretary that a significant portion of its patients are low income)
  free of charge or at nominal charges to the public.
  `(D) EXCLUSIVE PAYMENT RULE- This subsection shall constitute the exclusive
  provision of this title for payment for prosthetic devices, orthotics,
  and prosthetics under this part or under part A to a home health agency.
  `(2) PURCHASE PRICE RECOGNIZED- For purposes of paragraph (1), the amount
  that is recognized under this paragraph as the purchase price for prosthetic
  devices, orthotics, and prosthetics is the amount described in subparagraph
  (C) of this paragraph, determined as follows:
  `(A) COMPUTATION OF LOCAL PURCHASE PRICE- Each carrier under section 1842
  shall compute a base local purchase price for the item as follows:
  `(i) The carrier shall compute a base local purchase price for each item
  equal to the average reasonable charge in the locality for the purchase
  of the item for the 12-month period ending with June 1987.
  `(ii) The carrier shall compute a local purchase price, with respect to
  the furnishing of each particular item--
  `(I) in 1989 and 1990, equal to the base local purchase price computed
  under clause (i) increased by the percentage increase in the consumer
  price index for all urban consumers (United States city average) for the
  6-month period ending with December 1987, or
  `(II) in 1991, 1992 or 1993, equal to the local purchase price computed
  under this clause for the previous year increased by the applicable
  percentage increase for the year.
  `(B) COMPUTATION OF REGIONAL PURCHASE PRICE- With respect to the furnishing
  of a particular item in each region (as defined by the Secretary), the
  Secretary shall compute a regional purchase price--
  `(i) for 1992 and for 1993, equal to the average (weighted by relative volume
  of all claims among carriers) of the local purchase prices for the carriers
  in the region computed under subparagraph (A)(ii)(II) for the year, and
  `(ii) for each subsequent year, equal to the regional purchase price
  computed under this subparagraph for the previous year increased by the
  applicable percentage increase for the year.
  `(C) PURCHASE PRICE RECOGNIZED- For purposes of paragraph (1) and subject
  to subparagraph (D), the amount that is recognized under this paragraph
  as the purchase price for each item furnished--
  `(i) in 1989, 1990, or 1991, is 100 percent of the local purchase price
  computed under subparagraph (A)(ii);
  `(ii) in 1992, is the sum of (I) 75 percent of the local purchase price
  computed under subparagraph (A)(ii)(II) for 1991, and (II) 25 percent of
  the regional purchase price computed under subparagraph (B) for 1991;
  `(iii) in 1993, is the sum of (I) 50 percent of the local purchase price
  computed under subparagraph (A)(ii)(II) for 1992, and (II) 50 percent of
  the regional purchase price computed under subparagraph (B) for 1992; and
  `(iv) in 1994 or a subsequent year, is the regional purchase price computed
  under subparagraph (B) for that year.
  `(D) RANGE ON AMOUNT RECOGNIZED- The amount that is recognized under
  subparagraph (C) as the purchase price for an item furnished--
  `(i) in 1991, may not exceed 125 percent, and may not be lower than 85
  percent, of the average of the purchase prices recognized under such
  subparagraph for all the carrier service areas in the United States in
  that year; and
  `(ii) in a subsequent year, may not exceed 120 percent, and may not be
  lower than 90 percent, of the average of the purchase prices recognized
  under such subparagraph for all the carrier service areas in the United
  States in that year.
  `(3) APPLICABILITY OF CERTAIN PROVISIONS RELATING TO DURABLE MEDICAL
  EQUIPMENT- Subparagraphs (A) and (B) of paragraph (10), paragraph (11),
  and paragraph (12) of subsection (a) shall apply to prosthetic devices,
  orthotics, and prosthetics in the same manner as such provisions apply to
  covered items under such subsection.
  `(4) DEFINITIONS- In this subsection--
  `(A) the term `applicable percentage increase' means--
  `(i) for 1991, 0 percent, and
  `(ii) for a subsequent year, the percentage increase in the consumer price
  index for all urban consumers (United States city average) for the 12-month
  period ending with June of the previous year;
  `(B) the term `prosthetic devices' has the meaning given such term in
  section 1861(s)(8), except that such term does not include parenteral and
  enteral nutrition nutrients, supplies, and equipment; and
  `(C) the term `orthotics and prosthetics' has the meaning given such term
  in section 1861(s)(9).'.
  (b) CONFORMING AMENDMENTS- (1) Section 1832(a)(2) (42 U.S.C. 1395k(a)(2))
  is amended--
  (A) in subparagraphs (A) and (B), by striking `subparagraph (G)' each
  place it appears and inserting `subparagraph (G) or subparagraph (I)';
  (B) by striking `and' at the end of subparagraph (G);
  (C) by striking the period at the end of subparagraph (H) and inserting
  `; and'; and
  (D) by adding at the end the following new subparagraph:
  `(I) prosthetic devices and orthotics and prosthetics (described in
  section 1834(h)(4)) furnished by a provider of services or by others under
  arrangements with them made by a provider of services.'.
  (2) Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)) is amended--
  (A) by striking `, and (L)' and inserting `, (L)'; and
  (B) by striking `subparagraph and (N)' and inserting the following:
  `subparagraph, (M) with respect to prosthetic devices and orthotics and
  prosthetics (as defined in section 1834(h)(4)), the amounts paid shall be
  the amounts described in section 1834(h)(1), and (N)'.
  (3) Section 1833(a) (42 U.S.C. 1395l(a)) is amended--
  (A) in paragraph (2), in the matter before subparagraph (A), by striking
  `and (H)' and inserting `(H), and (I)';
  (B) by striking `and' at the end of paragraph (5);
  (C) by striking the period at the end of paragraph (6) and inserting `;
  and'; and
  (D) by adding at the end the following new paragraph:
  `(7) in the case of prosthetic devices and orthotics and prosthetics (as
  described in section 1834(h)(4)), the amounts described in section 1834(h).'.
  (4) Section 1834(a) (42 U.S.C. 1395m(a)), is amended--
  (A) in the heading, by striking `, Prosthetic Devices, Orthotics, and
  Prosthetics';
  (B) in paragraph (2)(A), by striking `(13)(A)' and inserting `(13)';
  (C) in paragraph (6) by inserting `or prosthetic devices, and orthotics
  and prosthetics described in subsection (h)' after `or (5)'; and
  (D) in paragraph (13), by striking `means--' and all that follows and
  inserting the following: `means durable medical equipment (as defined in
  section 1861(n)), including such equipment described in section 1861(m)(5)),
  but does not include intraocular lenses or medical supplies (including
  catheters, catheter supplies, ostomy bags, and supplies related to ostomy
  care) furnished by a home health agency under section 1861(m)(5).'.
  (c)(1) PROHIBITION ON REGULATIONS- Notwithstanding any other provision of
  law, except as provided in paragraph (2), the Secretary of Health and Human
  Services (referred to in this subsection as the `Secretary') may not issue
  any regulation that changes the coverage of conventional eye wear furnished
  to individuals (enrolled under part B of title XVIII of the Social Security
  Act) following cataract surgery with an intraocular lens (IOL) implant.
  (2) EXCEPTION- Paragraph (1) does not apply to any regulation issued
  for the sole purpose of implementing sections 1861(s)(8) and 1862(a)(7)
  of the Social Security Act (as amended by paragraph (3)).
  (3) CLARIFYING COVERAGE OF POST-CATARACT EYEGLASSES-
  (A) Section 1861(s)(8) (42 U.S.C. 1395x(s)(8)) is amended by inserting after
  `devices' the following `, and including one pair of corrective eyeglasses
  provided with intraocular lenses following cataract surgery'.
  (B) Section 1862(a)(7) (42 U.S.C. 1395y(a)(7)) is amended by inserting
  after `eyeglasses' the first place it appears the following: `(other than
  eyeglasses described in section 1861(s)(8))'.
  (d) EFFECTIVE DATE- The amendments made by this section shall apply to
  prosthetic devices, orthotics, and prosthetics furnished on or after
  January 1, 1991.
Subpart C--Miscellaneous Provisions
SEC. 6140. COMMUNITY MENTAL HEALTH CENTERS.
  (a) PARTIAL HOSPITALIZATION SERVICES- (1) Section 1861(ff)(3) (42
  U.S.C. 1395x(ff)(3)) is amended--
  (A) by striking `(3)' and inserting `(3)(A)';
  (B) by striking `outpatients' and inserting `outpatients or by a community
  mental health center (as defined in subparagraph (B)),'; and
  (C) by adding at the end the following new subparagraph:
  `(B) For purposes of subparagraph (A), the term `community mental health
  center' means an entity--
  `(i) providing the services described in section 1916(c)(4) of the Public
  Health Service Act; and
  `(ii) meeting applicable licensing or certification requirements for
  community mental health centers in the State in which it is located.'.
  (2)(A) Section 1832(a)(2) (42 U.S.C. 1395k(a)(2)), as amended by section
  X124(b)(1), is amended--
  (i) by striking `and' at the end of subparagraph (G);
  (ii) by striking the period at the end of subparagraph (H) and inserting
  `; and'; and
  (iii) by adding at the end the following new subparagraph:
  `(I) partial hospitalization services provided by a community mental health
  center (as described in section 1861(ff)(2)(B)).'.
  (B) Section 1866(e) (42 U.S.C. 1395cc(e)) is amended by striking `include a
  clinic' and all that follows through the period and inserting the following:
  `include--
  `(1) a clinic, rehabilitation agency, or public health agency if, in the
  case of a clinic or rehabilitation agency, such clinic or agency meets the
  requirements of section 1861(p)(4)(A) (or meets the requirements of such
  section through the operation of section 1861(g)), or if, in the case of
  a public health agency, such agency meets the requirements of section
  1861(p)(4)(B) (or meets the requirements of such section through the
  operation of section 1861(g)), but only with respect to the furnishing of
  outpatient physical therapy services (as therein defined) or (through the
  operation of section 1861(g)) with respect to the furnishing of outpatient
  occupational therapy services; and
  `(2) a community mental health center (as defined in section 1861(ff)(3)(B)),
  but only with respect to the furnishing of partial hospitalization services
  (as described in section 1861(ff)(1)).'.
  (3) EFFECTIVE DATE- The amendments made by this subsection shall apply
  with respect to partial hospitalization services provided on or after
  April 1, 1991.
  (b) COVERAGE OF MENTAL HEALTH PROFESSIONAL SERVICES- (1) Section 1861(s)(2)
  (42 U.S.C. 1395x(s)(2)), as amended by the Omnibus Budget Reconciliation
  Act 1989, is amended--
  (A) by striking `and' at the end of subparagraph (M);
  (B) by adding `and' at the end of subparagraph (N); and
  (C) by adding at the end of the paragraph the following new subparagraph:
  `(O) qualified mental health professional services;'.
  (2) Section 1833 (42 U.S.C. 1395l) is amended--
  (A) in subsection (a)(1) by inserting after subparagraph (L) the
  following new subparagraph: `, (M) with respect to qualified mental health
  professionals under section 1861(s)(2)(O), the amounts paid shall be 80
  percent of the lesser of the actual charge for the services or the amount
  determined by a fee schedule established by the Secretary for the purposes
  of this subparagraph.'.
  (B) in subsection (p), by amending the first sentence to read as follows:
  `(p) In case of--
  `(1) certified nurse-midwife services;
  `(2) qualified psychologists services;
  `(3) clinical social worker services; and
  `(4) qualified mental health professionals services,
for which payment may be made under this part only pursuant to subparagraphs
(L), (M), (N), and (O) of section 1861(s)(2), respectively, payment may only
be made under this part for such services on an assignment-related basis.'.
  (3) Section 1861 (42 U.S.C. 1395x), as amended by subsection (a), is
  amended by inserting after subsection (ii) the following new subsection:
  `(jj)(1) The term `qualified mental health professionals services' means
  such services and such services and supplies furnished as an incident
  to services furnished by a marriage and family therapist (as defined
  in paragraph (2)), or a psychiatric nurse (as defined in paragraph (3))
  on-site at a community mental health center (as defined in subsection (ff)),
  and such services that are necessarily furnished off-site (other than at
  an off-site office of such therapist, nurse, or counselor) as part of a
  treatment plan because of the inability of the individual furnished such
  services to travel to the center by reason of physical or mental impairment,
  because of institutionalization, or because of similar circumstances of
  the individual, which the marriage and family therapist, psychiatric nurse,
  or clinical mental health counselor is legally authorized to perform under
  State law (or the regulatory mechanism provided by State law) as would
  otherwise be covered if furnished by a physician or as an incident to a
  physician's services.
  `(2) The term `marriage and family therapist' means an individual who--
  `(A) possesses a minimum of a masters degree in a field related to marriage
  and family therapy.
  `(B) after obtaining such degree has performed at least 2 years of supervised
  clinical experience in the field of marriage and family therapy; and
  `(C)(i) is licensed or certified by the State in which such services are
  performed as a marriage and family therapist, married, family and child
  counselor, or is licensed under a similar professional title; or
  `(ii) in the case of an individual in a State which does not provide for
  licensing or certification, is eligible for clinical membership in a national
  professional association that recognized credentials for clinical membership
  for marriage and family therapists (as determined by the Secretary).
  `(3) The term `psychiatric nurse' means an individual who--
  `(A) is licensed to practice professional nursing by the State in which
  such individual practices nursing;
  `(B) performs such psychiatric nursing services as are authorized under the
  law of the State in which such individual practices psychiatric nursing; and
  `(C)(i) possesses a minimum of a masters degree in nursing with a
  specialization in psychiatric and mental health nursing or a related
  field; or
  `(ii) possesses a minimum of a masters degree in a related field from
  an accredited educational institution and is certified as a psychiatric
  nurse by a duly recognized national professional nurse organization, as
  determined by the Secretary, or is eligible to receive such certification.'.
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  services performed on or after January 1, 1991.
SEC. 6141. EXTENSION OF ALZHEIMER'S DISEASE DEMONSTRATION PROJECTS.
  Section 9342 of the Omnibus Budget Reconciliation Act of 1986 is amended--
  (1) in subsection (c)(1), by striking `3 years' and inserting `5 years', and
  (2) in subsection (d)(1), by striking `third year' and inserting `fourth
  year'.
SEC. 6142. CERTIFIED REGISTERED NURSE ANESTHETISTS.
  Section 1833(l) (42 U.S.C. 1395l) is amended--
  (1) in paragraph (1)--
  (A) by inserting `(A)' after `(1)'; and
  (B) by adding at the end the following:
  `(B) In establishing the fee schedule under this paragraph the Secretary
  may utilize a system of time units, a system of base and time units,
  or any appropriate methodology.
  `(C) The provisions of this subsection shall not apply to certain services
  furnished in certain hospitals in rural areas under the provisions of
  section 9320(k) of the Omnibus Budget Reconciliation Act of 1986, as
  amended by section 6132 of the Omnibus Budget Reconciliation Act of 1989.';
  (2) by striking the second sentence of paragraph (2); and
  (3) by striking paragraph (4) and inserting the following:
  `(4)(A) Except as provided in subparagraphs (C) and (D), in determining
  the amount paid under the fee schedule under this subsection for services
  furnished on or after January 1, 1991, by a certified registered nurse
  anesthetist who is not medically directed--
  `(i) the conversion factor shall be--
  `(I) for services furnished in 1991, $15.50,
  `(II) for services furnished in 1992, $15.75,
  `(III) for services furnished in 1993, $16.00,
  `(IV) for services furnished in 1994, $16.25,
  `(V) for services furnished in 1995, $16.50,
  `(VI) for services furnished in 1996, $16.75, and
  `(VII) for services furnished in calendar years after 1995, the previous
  year's conversion factor increased by the update determined under section
  1848(d)(3) for physician anesthesia services for that year;
  `(ii) the payment areas to be used shall be the fee schedule areas used
  under section 1848 (or, in the case of services furnished during 1991, the
  localities used under section 1842(b)) for purposes of computing payments
  for physicians' services that are anesthesia services;
  `(iii) the geographic adjustment factors to be applied to the conversion
  factor under clause (i) for services in a fee schedule area or locality is--
  `(I) in the case of services furnished in 1991, the geographic work index
  value and the geographic practice cost index value specified in section
  1842(q)(1)(B) for physicians' services that are anesthesia services
  furnished in the area or locality, and
  `(II) in the case of services furnished after 1991, the geographic work
  index value, the geographic practice cost index value, and the geographic
  malpractice index value used for determining payments for physicians'
  services that are anesthesia services under section 1848,
with 70 percent of the conversion factor treated as attributable to work and
30 percent as attributable to overhead for services furnished in 1991 (and
the portions attributable to work, practice expenses, and malpractice expenses
in 1992 and thereafter being the same as is applied under section 1848).
  `(B)(i) Except as provided in clause (ii) and subparagraph (D), in
  determining the amount paid under the fee schedule under this subsection for
  services furnished on or after January 1, 1991, by a certified registered
  nurse anesthetist who is medically directed, the Secretary shall apply
  the same methodology specified in subparagraph (A).
  `(ii) The conversion factor used under clause (i) shall be--
  `(I) for services furnished in 1991, $10.50,
  `(II) for services furnished in 1992, $10.75,
  `(III) for services furnished in 1993, $11.00,
  `(IV) for services furnished in 1994, $11.25,
  `(V) for services furnished in 1995, $11.50,
  `(VI) for services furnished in 1996, $11.70, and
  `(VII) for services furnished in calendar years after 1996, the previous
  year's conversion factor increased by the update determined under section
  1848(d)(3) for physician anesthesia services for that year.
  `(C) Notwithstanding subclauses (I) through (V) of subparagraph (A)(i)--
  `(i) in the case of a 1990 conversion factor that is greater than $16.50,
  the conversion factor for a calendar year after 1990 and before 1996 shall
  be the 1990 conversion factor reduced by the product of the last digit of
  the calendar year and one-fifth of the amount by which the 1990 conversion
  factor exceeds $16.50; and
  `(ii) in the case of a 1990 conversion factor that is greater than $15.49
  but less than $16.51, the conversion factor for a calendar year after 1990
  and before 1996 shall be the greater of--
  `(I) the 1990 conversion factor, or
  `(II) the conversion factor specified in subparagraph (A)(i) for the
  year involved.
  `(D) In no case may the conversion factor used to determine payment for
  services in a fee schedule area or locality under this subsection, as
  adjusted by the adjustment factors specified in subparagraphs (A)(iii),
  exceed the conversion factor used to determine the amount paid for
  physicians' services that are anesthesia services in the area or locality.'.
SEC. 6143. FEDERALLY QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS.
  (a) COVERAGE- Section 1861(s)(2)(E) (42 U.S.C. 1395x(s)(2)(E)) is amended
  by inserting `and Federally qualified health center services' after `rural
  health clinic services'.
  (b) SERVICES DEFINED- Section 1861(aa) (42 U.S.C. 1395x(aa)) is amended--
  (1) in the heading, by adding at the end the following: `and Federally
  Qualified Health Center Services',
  (2) in paragraph (3), by striking `paragraphs (1) and (2)' and inserting
  `the previous provisions of this subsection' and by redesignating such
  paragraph and paragraph (4) as paragraph (5) and (6), respectively, and
  (3) by inserting after paragraph (2) the following new paragraphs:
  `(3) The term `Federally qualified health center services' means services
  of the type described in subparagraphs (A) through (C) of paragraph (1)
  when furnished to an individual (who is not an inpatient) and, for this
  purpose, any reference to a rural health clinic or a physician described
  in paragraph (2)(B) is deemed a reference to a Federally qualified health
  center or a physician at the center, respectively.
  `(4) The term `Federally qualified health center' means an entity which--
  `(A)(i) is receiving a grant under section 329, 330, or 340 of the Public
  Health Service Act and which requests the Secretary to reimburse it as a
  Federally qualified health center, or
  `(ii)(I) is receiving funding from such a grant under a contract with the
  recipient of such a grant, and (II) meets the requirements to receive a
  grant under section 329, 330, or 340 of such Act;
  `(B) based on the recommendation of the Health Resources and Services
  Administration within the Public Health Service, is determined by the
  Secretary to meet the requirements for receiving such a grant; or
  `(C) was treated by the Secretary, for purposes of part B, as a comprehensive
  Federally funded health center as of January 1, 1990.'.
  (c) PAYMENTS-
  (1) IN GENERAL- Section 1832(a)(2)(D) (42 U.S.C. 1395k(a)(2)(D)) is
  amended by inserting `(i)' after `(D)' and by inserting `and (ii) Federally
  qualified health center services' after `rural health clinic services'.
  (2) EXCLUSION FROM PAYMENT REMOVED- Section 1862(a) (42 U.S.C. 1395y(a))
  is amended--
  (A) in paragraph (2), by inserting `, except in the case of Federally
  qualified health center services' before the semicolon at the end, and
  (B) in paragraph (3), by inserting `, in the case of Federally qualified
  health center services, as defined in section 1861(aa)(3),' after
  `1861(aa)(1),'.
  (3) PRRB REVIEW- Section 1878 (42 U.S.C. 1395oo) is amended by adding at
  the end the following new subsection:
  `(j) In this section, the term `provider of services' includes a rural
  health clinic and a Federally qualified health center.'.
  (d) CONFORMING AMENDMENTS- Section 1861 (42 U.S.C. 1395x) is further
  amended--
  (1) in subsection (s)(2)(H)(i) and (s)(2)(K), by striking `subsection
  (aa)(3)' and `subsection (aa)(4)' each place either appears inserting
  `subsection (aa)(5)' and `subsection (aa)(6)', respectively, and
  (2) in subsection (aa)(1)(B), by striking `paragraph (3)' and inserting
  `paragraph (5)'.
  (e) TEMPORARY WAIVER OF RHC STAFFING REQUIREMENTS- Section 1861(aa) (42
  U.S.C. 1395x(aa)) is further amended by adding at the end the following
  new paragraph:
  `(7)(A) The Secretary shall waive for a 1-year period the requirements
  of paragraph (2) that a rural health clinic employ a physician assistant,
  nurse practitioner or certified nurse midwife or that such clinic require
  such providers to furnish services at least 50 percent of the time that the
  clinic operates for any facility that requests such waiver if the facility
  demonstrates that the facility has been unable, despite reasonable efforts,
  to hire a physician assistant, nurse practitioner, or certified nurse-midwife
  in the previous 90-day period.
  `(B) The Secretary may not grant such a waiver under subparagraph (A) to
  a facility if the request for the waiver is made less than 6 months after
  the date of the expiration of any previous such waiver for the facility.
  `(C) A waiver which is requested under this paragraph shall be deemed
  granted unless such request is denied by the Secretary within 60 days
  after the date such request is received.'.
  (f) EFFECTIVE DATE- (1) Subject to paragraph (2), the amendments made by
  this section shall apply to services furnished on or after January 1, 1991.
  (2) In the case of a Federally qualified health center that has elected,
  as of January 1, 1990, under part B of title XVIII of the Social Security
  Act, to have the amount of payments for services under such part determined
  on a reasonable-charge basis, the amendment made by subsection (c)(1)
  shall only apply on and after such date (not earlier than January 1, 1991)
  as the center may elect.
SEC. 6144. SEPARATE PAYMENT UNDER PART B FOR SERVICES OF CERTAIN HEALTH
PROFESSIONALS.
  (a) SERVICES OF CERTAIN HEALTH PROFESSIONALS NOT TO BE INCLUDED IN INPATIENT
  HOSPITAL SERVICES- Section 1861(b) (42 U.S.C. 1395x(b)) is amended--
  (1) in paragraph (3), by striking `(including clinical psychologist (as
  defined by the Secretary))', and
  (2) in paragraph (4), by striking everything after `intern' and inserting
  `, services described by subsection (s)(2)(K)(i), certified nurse-midwife
  services, qualified psychologist services, and services of a certified
  registered nurse anesthetist; and'.
  (b) SERVICES OF CERTAIN HEALTH PROFESSIONALS NOT TO BE BILLED
  THROUGH PROVIDERS OF SERVICES- Section 1832(a)(2)(B)(iii) (42
  U.S.C. 1395k(a)(2)(B)(iii)) is amended to read as follows:
  `(iii) services described by section 1861(s)(2)(K)(i), certified
  nurse-midwife services, qualified psychologist services, and services of
  a certified registered nurse anesthetist;'.
  (c) CONFORMING AMENDMENTS-
  (1) Section 1862(a)(14) (42 U.S.C. 1395y) is amended--
  (A) by striking `or are services of a certified registered nurse
  anesthetist', and
  (B) by inserting after `this paragraph)' a comma and the following:
  `services described by section 1861(s)(2)(K)(i), certified nurse-midwife
  services, qualified psychologist services, and services of a certified
  registered nurse anesthetist,'.
  (2) The matter in section 1866(a)(1)(H) (42 U.S.C. 1395x(a)(1)(H)) preceding
  clause (i) is amended by inserting after `and other than' the following:
  `services described by section 1861(s)(2)(K)(i), certified nurse-midwife
  services, qualified psychologist services, and'.
  (d) EFFECTIVE DATE- The amendments made by the preceding subsections apply
  to services furnished on or after January 1, 1991.
SEC. 6145. NEW TECHNOLOGY IOL'S.
  (a) IN GENERAL- The Secretary of Health and Human Services (hereafter in
  this section referred to as the `Secretary') shall develop and implement a
  process under which interested parties may request review by the Secretary
  of the appropriate reimbursement under section 1833(i)(2)(A)(iii) of the
  Social Security Act with respect to a class of new technology intraocular
  lenses. For purposes of the preceding sentence, an intraocular lens may
  not be treated as a new technology lens unless it has been approved by
  the Food and Drug Administration.
  (b) EVALUATION BASED UPON MEDICAL BENEFITS- In determining whether to provide
  an adjustment of payment with respect to a particular lens under subsection
  (a), the Secretary shall take into account whether use of the lens is likely
  to result in reduced risk of intraoperative or postoperative complication
  or trauma, accelerated postoperative recovery, reduced induced astigmatism,
  improved postoperative visual acuity, more stable postoperative vision,
  or other comparable clinical advantages.
  (c) NOTICE AND COMMENTS-
  (1) NOTICE- The Secretary shall publish notice in the Federal Register
  from time to time (but no less often than once each year) a list of the
  requests that the Secretary has received for review under this section.
  (2) COMMENT- The Secretary shall provide for a 60-day comment period on
  the notice under paragraph (1). The Secretary shall publish a notice of
  his determination with respect to intraocular lenses listed in the notice
  within 120 days after the close of the comment period.
SEC. 6146. RURAL NURSING INCENTIVES.
  (a) COVERAGE OF SERVICES- Section 1861(s)(2) (42 U.S.C. 1395x(s)(2))
  is amended--
  (1) by striking `and' at the end of subparagraph (L);
  (2) by adding `and' at the end of subparagraph (M); and
  (3) by adding at the end thereof the following new subparagraph:
  `(P) nurse practitioner or clinical nurse specialist services;'.
  (b) SERVICES DEFINED- Section 1861 (42 U.S.C. 1395x) is amended by inserting
  after subsection (jj) the following new subsection:
`NURSE PRACTITIONER OR CLINICAL NURSE SPECIALIST SERVICES
  `(kk)(1) The term `nurse practitioner or clinical nurse specialist services'
  means services provided by a nurse practitioner or clinical nurse specialist
  (as defined in paragraph (2)) in a rural area (as defined in paragraph
  (3)) which the nurse practitioner or clinical nurse specialist is legally
  authorized to perform under State law (or the State regulatory mechanism
  provided by State law) of the State in which such services are performed.
  `(2) The term `nurse practitioner or clinical nurse specialist' means an
  individual who--
  `(A) is a registered nurse and is licensed to practice nursing in the State
  in which the nurse practitioner or clinical nurse specialist services are
  performed; and
  `(B)(i) holds a master's degree in nursing or a related field from an
  accredited educational institution, or
  `(ii) is certified as a nurse practitioner or clinical nurse specialist
  by a duly recognized professional nurses association.
  `(3) The term `rural area' means any area outside a metropolitan statistical
  area (as defined by the Office of Management and Budget).'.
  (c) DIRECT PAYMENT FOR SERVICES- Section 1832(a)(2)(B) (42
  U.S.C. 1395k(a)(2)(B)) is amended--
  (1) by striking `and' at the end of clause (ii); and
  (2) by adding at the end of clause (iii) the following new clause:
  `(iv) nurse practitioner or clinical nurse specialist services;'.
  (d) AMOUNT OF PAYMENT FOR SERVICES- Section 1833(a)(1) (42
  U.S.C. 1395l(a)(1)) is amended--
  (1) by striking `and' at the end of subparagraph (M);
  (2) by adding `and' at the end of subparagraph (N); and
  (3) by adding at the end thereof the following new subparagraph: `(O) in
  the case of nurse practitioner or clinical specialist services under section
  1861(s)(2)(P), the amounts paid shall be an amount equal to 100 percent of
  75 percent of the prevailing charge (or, in the case of services furnished
  after 1991, the amount determined under section 1848(a)) in area for the
  service for participating physicians and such payment shall be made only
  on an assignment-related basis;'.
  (e) EFFECTIVE DATE- The amendments made by this section shall apply with
  respect to services furnished on or after January 1, 1991.
PART 3--PROVISIONS RELATING TO PARTS A AND B
SEC. 6150. END STAGE RENAL DISEASE SERVICES.
  (a) MAINTENANCE OF CURRENT RATES THROUGH 1992- Section 9335(a)(1) of
  the Omnibus Budget Reconciliation Act of 1986, as amended by section
  6203(a)(1)(A) of the Omnibus Budget Reconciliation Act of 1989, is amended--
  (1) by striking `and before October 1, 1990' and inserting `and before
  October 1, 1993'; and
  (2) by striking `equal to' and inserting `not less than'.
  (b) PROPAC STUDY ON ESRD COMPOSITE RATES-
  (1) IN GENERAL-
  (A) STUDY- The Prospective Payment Assessment Commission (in this subsection
  referred to as the `Commission') shall conduct a study to determine the
  costs and services and profits associated with various modalities of
  dialysis treatments provided to end stage renal disease patients provided
  under title XVIII of the Social Security Act.
  (B) RECOMMENDATIONS- Based on information collected for the study described
  in subparagraph (A), the Commission shall make recommendations to Congress
  regarding the method or methods and the levels at which the payments made
  for the facility component of dialysis services by providers of service and
  renal dialysis facilities under title XVIII of the Social Security Act should
  be established for dialysis services furnished during fiscal year 1993 and
  the methodology to be used to update such payments for subsequent fiscal
  years. In making recommendations concerning the appropriate  methodology
  the Commission shall consider--
  (i) hemodialysis and other modalities of treatment,
  (ii) the appropriate services to be included in such payments,
  (iii) the adjustment factors to be incorporated including facility
  characteristics, such as hospital versus free-standing facilities, urban
  versus rural, size and mix of services,
  (iv) adjustments for labor and nonlabor costs,
  (v) comparative profit margins for all types of renal dialysis providers
  of service and renal dialysis facilities,
  (vi) adjustments for patient complexity, such as age, diagnosis, case mix,
  and pediatric services, and
  (vii) efficient costs related to high quality of care and positive outcomes
  for all treatment modalities.
  (2) REPORT- Not later than June 1, 1992, the Commission shall submit a
  report to the Committee on Finance of the Senate, and the Committees on
  Ways and Means and Energy and Commerce of the House of Representatives
  on the study conducted under paragraph (1)(A) and shall include in the
  report the recommendations described in paragraph (1)(B), taking into
  account the factors described in paragraph (1)(B).
  (3) ANNUAL REPORT- The Commission, not later than March 1 before the
  beginning of each fiscal year (beginning with fiscal year 1993) shall
  report its recommendations to the Committee on Finance of the Senate and
  the Committees on Ways and Means and Energy and Commerce of the House
  of Representatives on an appropriate change factor which should be used
  for updating payments for services rendered in that fiscal year. The
  Commission in making such report to Congress shall consider conclusions
  and recommendations available from the Institute of Medicine.
  (c) SELF-ADMINISTERED ERYTHROPOIETIN- (1) Section 1861(s)(2) (42
  U.S.C. 1395x(s)(2)) is amended--
  (A) by striking `and' at the end of subparagraph (O);
  (B) by adding `and' at the end of subparagraph (P); and
  (C) by adding at the end the following new subparagraph:
  `(Q) erythropoietin for home dialysis patients competent to use such drug
  without medical or other supervision with respect to the administration of
  such drug, subject to methods and standards established by the Secretary by
  regulation for the safe and effective use of such drug, and items related
  to the administration of such drug;'.
  (2)(A) Section 1881(b)(11) (42 U.S.C. 1395rr(b)) is amended--
  (i) by striking `(11)' and inserting `(11)(A)', and
  (ii) by adding at the end the following new subparagraph:
  `(B) Erythropoietin (including self-administered erythropoietin (as described
  in section 1861(s)(2)(Q))), when provided to a patient determined to have
  end stage renal disease, shall not be included as a dialysis service for
  purposes of payment under any prospective payment amount or comprehensive
  fee established under this section, and payment for such item shall be
  made separately--
  `(i) in the case of erythropoietin provided by a physician, in accordance
  with section 1833; and
  `(ii) in the case of erythropoietin provided by a provider of services or
  a renal dialysis facility, in an amount specified by the Secretary.'.
  (B) Section 1881(b) (42 U.S.C. 1395rr(b)) is further amended--
  (i) in paragraph (1)--
  (I) by striking `and (B)' and inserting `(B), and
  (II) by striking `equipment.' and inserting `equipment, and (C) payments to
  a supplier of home dialysis supplies and equipment that is not a provider
  of services, a renal dialysis facility, or a physician for self-administered
  erythropoietin as described in section 1861(s)(2)(Q) if the Secretary finds
  that the patient receiving such drug from such a supplier can safely and
  effectively administer the drug (in accordance with the applicable methods
  and standards established by the Secretary pursuant to such section).'; and
  (ii) in paragraph (2)(A), by striking `(2)(A)' and inserting `(2)(A)(i)'; and
  (iii) in paragraph (11)(B), as added by subparagraph (A)--
  (I) by striking `(B)' and inserting `(B)(i)',
  (II) by redesignating clauses (i) and (ii) as subclauses (I) and (II), and
  (III) by adding at the end the following new clause:
  `(ii) Notwithstanding clause (i), the amount payable to a supplier of
  home dialysis supplies and equipment that is not a provider of services,
  a renal dialysis facility, or a physician for erythropoietin shall be
  determined in the same manner as the amount payable to a renal dialysis
  facility for such item.'.
  (d) EFFECTIVE DATE- The amendments made by subsection (c) shall apply to
  items and services furnished on or after January 1, 1991.
SEC. 6151. STAFF-ASSISTED HOME DIALYSIS.
  (a) IN GENERAL- Section 1861(s)(2)(F) (42 U.S.C. 1395x(s)(2)(F)) is amended
  by striking `self-care' and all that follows through `and institutional'
  and inserting `home dialysis support services, home hemodialysis staff
  assistance, and institutional'.
  (b) PAYMENT FOR COSTS OF ASSISTANT SERVICES-
  (1) IN GENERAL- Section 1881(b) of such Act (42 U.S.C. 1395rr(b)(1))
  is amended--
  (A) in paragraph (1)--
  (i) by striking `self-care home dialysis support services' and inserting
  `home dialysis support services'; and
  (ii) by striking `and routine' and inserting `services of a staff assistant
  provided to an individual described in subsection (h)(3) which are furnished
  by a provider of services or facility, and routine';
  (B) in paragraph (4), by amending subparagraph (A) to read as follows:
  `Pursuant to agreements with approved providers of services and renal
  dialysis facilities, the Secretary may make payments to such providers and
  facilities for the cost of home dialysis supplies and equipment and home
  dialysis support services furnished to patients whose home dialysis is under
  the direct supervision of such provider or facility, and home hemodialysis
  staff assistance furnished to patients described in subsection (h)(3) whose
  home hemodialysis is under the direct supervision of a provider of services
  or a renal dialysis facility on the basis of the method established under
  paragraph (7).'; and
  (C) in paragraph (5)--
  (i) by inserting `(A)' after `paragraph (4)'; and
  (ii) by amending clause (iv) to read as follows:
  `(iv) the services of a trained home hemodialysis staff assistant (as
  described in subsection (h)(2)) to individuals described in subsection
  (h)(3);'.
  (2) ESTABLISHING PAYMENT RATE- Section 1881(b)(7) of such Act (42
  U.S.C. 1395rr(b)(7)) is amended--
  (A) by redesignating subparagraphs (A), (B), (C), and (D) as clauses (i),
  (ii), (iii), and (iv), respectively;
  (B) by inserting `(A)' after the paragraph designation; and
  (C) by adding at the end the following new subparagraph:
  `(B)(i) The Secretary shall provide by regulation for a method of determining
  prospectively the amount of payment to be made for home hemodialysis staff
  assistance furnished by a provider of services or a renal dialysis facility
  with respect to a maintenance dialysis episode.
  `(ii) The amount of payment determined under clause (i) shall be in
  addition to the amount determined under subparagraph (A) on the basis of
  a rate based on a single composite weighted formula (in this subparagraph
  referred to as the `composite rate').
  `(iii) The amount of payment determined under clause (i) shall be the
  product of the rate determined under clause (iv) with respect to a provider
  of services or a renal dialysis facility and the factor by which the labor
  portion of the rate determined under subparagraph (A) is adjusted for area
  differences in wage levels.
  `(iv) The rate determined under this clause, with respect to a provider
  of services or renal dialysis facility, shall equal the amount obtained
  by subtracting--
  `(I) 2/2 of the labor portion of the composite rate applicable to the
  provider or facility (as adjusted to reflect area differences in wage
  levels), from
  `(II) the product of the national median hourly wage for a home hemodialysis
  staff assistant and the national median time expended in the provision
  of home hemodialysis staff assistant services (taking into account time
  expended in travel and predialysis patient care).
  `(v) For purposes of clause (iv)(II)--
  `(I) the national median hourly wage for a home hemodialysis staff assistant
  and the national median average time expended for home hemodialysis staff
  assistant services shall be determined annually on the basis of the most
  recent data available, and
  `(II) the national median hourly wage for a home hemodialysis staff
  assistant shall be the sum of 65 percent of the national median hourly
  wage for a licensed practical nurse and 35 percent of the national median
  hourly wage for a registered nurse.'.
  (c) DEFINITION AND CRITERIA RELATED TO STAFF ASSISTED HOME HEMODIALYSIS
  SERVICES- Section 1881 of such Act (42 U.S.C. 1395rr) is further amended
  by adding at the end the following new subsection:
  `(h)(1) For purposes of this title, the term `home hemodialysis staff
  assistance' means the following services provided by a home hemodialysis
  staff assistant (as described in paragraph (2)) through a provider of
  services or a renal dialysis facility to an eligible patient (as described
  in paragraph (3)):
  `(A) Technical assistance with the operation of a hemodialysis machine in
  the patient's home and with such patient's care during in-home hemodialysis.
  `(B) Administration of medications within the patient's home to maintain
  the patency of the extra corporeal circuit.
  `(2) For purposes of this title, the term `home hemodialysis staff assistant'
  means those individuals who--
  `(A) have met minimum qualifications as specified by the Secretary; and
  `(B) meet the minimum qualifications as specified under the law of the
  State in which the home hemodialysis staff assistant is providing services.
  `(3) For purposes of this title, an `eligible patient' means those
  individuals who--
  `(A)(i) a physician certifies as being confined to a bed or wheelchair
  and who cannot transfer themselves from a bed to a chair, or
  `(ii) have serious medical conditions (as specified by the Secretary)
  which would be exacerbated by traveling to and from a dialysis facility; and
  `(B) are eligible for ambulance transportation to receive routine maintenance
  dialysis treatments, and, based on the medical condition of the patient,
  there is reasonable expectation that such transportation will be used by
  the patient for a period of at least 6 consecutive months, such that the
  cost of ambulance transportation can reasonably be expected to meet or
  exceed the cost of home hemodialysis staff assistance as provided under
  subsection (b)(4); and
  `(C) have no spouse, relative, or other caregiver who either lives with
  the individual or comes to such individual's home periodically and who is
  willing and able to assist the individual with home hemodialysis; and
  `(D) the Secretary certifies annually as meeting the requirements of
  this paragraph.
  `(4) A resident of a skilled nursing facility, under this title, shall
  not for purposes of this subsection be considered an `eligible patient'
  as defined in paragraph (3).'.
  (d) CONFORMING AMENDMENT- Section 1881(b)(9) of such Act (42
  U.S.C. 1395rr(b)(9)) is amended by striking `self-care'.
  (e) EFFECTIVE DATE-
  (1) The amendments made by this section shall become effective (if at all)
  in accordance with the provisions of paragraph (2).
  (2)(A)(i) The Secretary of Health and Human Services (in this section
  referred to as the `Secretary') shall establish a demonstration project to
  begin January 1, 1991, to test the cost-effectiveness of furnishing home
  hemodialysis staff assistance (as defined in section 1881(h)(1) of the
  Social Security Act) to eligible patients (as defined in section 1881(h)(3)
  of such Act) in accordance with the amendments made by this section.
  (ii) Any individual who, on the date of the enactment of this Act,
  is receiving staff assistance under the experimental authority provided
  under section 1881(f)(2) of the Social Security Act shall be deemed to be
  an eligible patient for purposes of clause (i).
  (B) The number of eligible patients participating in the demonstration
  project established under subparagraph (A) may not exceed 550 during any
  month, except that one eligible patient may be admitted to the demonstration
  for each individual ceasing to participate in the project in any month.
  (C) The Secretary may implement the demonstration project established
  under subparagraph (A) on a nationwide basis or at specific sites.
  (D) The demonstration project established under subparagraph (A) shall
  continue through December 31, 1993 (or the date that occurs the same number
  of days after such date as elapsed between January 1, 1991 and the first
  day on which services were furnished under the project).
  (E)(i) The Secretary shall transmit a report of preliminary findings under
  the demonstration project to the Committees on Ways and Means and Energy
  and Commerce of the House of Representatives and the Committee on Finance
  of the Senate not later than January 15, 1993.
  (ii) The Secretary shall transmit a final report of findings under the
  demonstration project to the Committees on Ways and Means and Energy and
  Commerce of the House of Representatives and the Committee on Finance of
  the Senate not later than December 31, 1993.
  (iii) If the Secretary determines that it is not cost-effective to furnish
  home dialysis staff assistance, the demonstration project under this
  subsection shall terminate as of December 31, 1993.
  (F) Any individual participating in the demonstration project established
  under subparagraph (A) as of December 31, 1993 (or the later date described
  in subparagraph (D)) shall continue to be eligible for home hemodialysis
  staff assistance after such date on the same terms and conditions as
  applied under the demonstration project.
SEC. 6152. MEDICARE AS SECONDARY PAYER.
  (a) EXTENSION OF TRANSFER OF DATA-
  (1) Section 1862(b)(5)(C)(iii) (42 U.S.C. 1395y(b)(5)(C)(iii)) is amended
  by striking `September 30, 1991' and inserting `September 30, 1995'.
  (2) Section 6103(l)(12)(F) of the Internal Revenue Code of 1986 is amended--
  (A) in clause (i), by striking `September 30, 1991' and inserting `September
  30, 1995';
  (B) in clause (ii)(I), by striking `1990' and inserting `1994'; and
  (C) in clause (ii)(II), by striking `1991' and inserting `1995'.
  (b) EXTENSION OF APPLICATION TO DISABLED BENEFICIARIES- Section
  1862(b)(1)(B)(iii) (42 U.S.C. 1395y(b)(1)(B)(iii)) is amended by striking
  `January 1, 1992' and inserting `October 1, 1995'.
  (c) TEMPORARY EXTENSION OF ESRD PERIOD-
  (1) IN GENERAL- Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended
  to read as follows:
  `(C) INDIVIDUALS WITH END-STAGE RENAL DISEASE-
  `(i) A group health plan (as defined in subparagraph (A)(v)) may not take
  into account that an individual is entitled to benefits under this title
  solely by reason of section 226A during the 12-month period that begins
  with the earlier of--
  `(I) the first month in which the individual becomes entitled to benefits
  under part A under the provisions of section 226A, or
  `(II) in the case of an individual who receives a kidney transplant, the
  first month in which the individual would be eligible for benefits under
  part A (if the individual had filed an application for such benefits)
  under the provisions of section 226A(b)(1)(B).
  `(ii) A group health plan (as so defined) may not differentiate in the
  benefits it provides between individuals having end-stage renal disease
  and other individuals covered by such plan on the basis of the existence
  of end-stage renal disease, the need for renal dialysis, or in any other
  manner. The preceding sentence shall not prohibit a plan from taking into
  account that an individual is entitled to benefits under this title solely
  by reason of section 226A during a period occurring before or after the
  12-month period described in clause (i).
  `(iii) Effective for items and services furnished on or after February
  1, 1991, and before January 1, 1996 (with respect to periods beginning
  on or after February 1, 1990), clauses (i) and (ii) shall be applied by
  substituting `24-month' for `12-month' each place it appears.'.
  (2) STUDY- (A) The Comptroller General shall study and report to the
  Committees on Ways and Means and Energy and Commerce of the House of
  Representatives and the Committee on Finance of the Senate on the impact
  of the application of clause (iii) of section 1862(b)(1)(C) of the Social
  Security Act (42 U.S.C. 1395y(b)(1)(C)) on individuals entitled to benefits
  under title XVIII of such Act by reason of section 226A of such Act. The
  report shall include information relating to--
  (i) the number (and geographic distribution) of such individuals for whom
  medicare is secondary,
  (ii) the amount of savings to the medicare program achieved annually by
  reason of the application of such clause,
  (iii) the effect on access to employment, and employment-based health
  insurance, for such individuals and their family members (including coverage
  by employment-based health insurance of cost-sharing requirements under
  medicare after such employment-based insurance becomes secondary),
  (iv) the effect on the amount paid for each dialysis treatment under
  employment-based health insurance, and
  (v) the effect on cost-sharing requirements under employment-based health
  insurance (and on out-of-pocket expenses of such individuals) during the
  period for which medicare is secondary.
  (B) The Comptroller General shall submit a preliminary report under this
  subsection not later than January 1, 1993, and a final report not later
  than January 1, 1995.
  (d) EFFECTIVE DATES-
  (1) Except as provided in paragraph (2), the amendments made by this
  section shall become effective on the date of the enactment of this Act.
  (2)(A) The amendment made by subsection (a)(2)(B) shall apply to requests
  made on or after the date of the enactment of this Act.
  (B) Section 1862(b)(1)(C)(i)(I) of the Social Security Act, as amended by
  subsection (c), and section 1862(b)(1)(C)(iii) of such Act, as added by such
  subsection, shall apply to periods beginning on or after February 1, 1990.
  (C) The amendments made by subsection (d) shall be effective--
  (i) on January 1, 1992, with respect to individuals described in clause
  (ii) of subparagraph (A) of the paragraph added by paragraph (d)(1) who
  are covered by group health plans contributed to or sponsored by employers
  with 1,000 or more employees and with respect to all individuals described
  in clause (ii) of subparagraph (A) of such paragraph;
  (ii) on January 1, 1993, with respect to individuals covered by group
  health plans contributed to or sponsored by employers with 100 or more
  employees; and
  (iii) on January 1, 1994, with respect to all other individuals.
SEC. 6153. HEALTH MAINTENANCE ORGANIZATIONS.
  (a) REQUIREMENTS WITH RESPECT TO ACTUARIAL EQUIVALENCE OF AAPCC- (1) Not
  later than January 1, 1992, the Secretary of Health and Human Services
  (in this section referred to as the `Secretary') shall submit a proposal
  to Congress that provides for a modified payment method for organizations
  with a risk contract under section 1876(g) of the Social Security Act
  that is more accurate than the current payment methodology in predicting
  the actual service utilization and annual medical expenditures of the
  beneficiary population enrolled in a specific organization.
  (2) The proposal shall include--
  (A)(i) recommendations on modifying the current adjusted average per capita
  cost formula, by adding predictors of medical utilization such as health
  status adjustors or prior utilization measures; or
  (ii) recommendations for a new payment methodology as an alternative to
  the adjusted average per capita cost;
  (B) data to support any recommended changes in payment methodology for
  organizations with risk contracts under section 1876(g) of the Social
  Security Act; and
  (C) data demonstrating that any proposed or revised payment methodology
  under this section is effective in explaining at least 15 percent of the
  variation in health care utilization and costs (as certified by the American
  Academy of Actuaries) among individuals enrolled in such organizations.
  (3) Not later than March 1, 1992, the Secretary shall cause to have published
  in the Federal Register a proposed rule providing for the implementation
  of the payment methodology specified in the proposal submitted pursuant
  to paragraph (1).
  (4) Not later than May 1, 1992, the Comptroller General shall review the
  proposal and recommendations made pursuant to paragraphs (1) and (2),
  and shall report to Congress on appropriate modifications in such payment
  methodology.
  (5) Taking into account the recommendations made pursuant to paragraph
  (2), on or after August 1, 1992, the Secretary shall issue a final rule
  implementing a payment methodology that meets the requirements of paragraph
  (1), effective for contract years beginning on or after January 1, 1993.
  (b) WAIVER OF 50-50 REQUIREMENT WITH RESPECT TO CERTAIN ORGANIZATIONS-
  (1) IN GENERAL- The Secretary may waive the requirements of section 1876(f)
  of the Social Security Act with respect to an organization with a risk
  contract (as described in section 1876(g) of such Act) that--
  (A)(i) has demonstrated profitability for the 3 most recent consecutive
  contract years; or
  (ii) if such organization is a new organization the parent company of such
  organization demonstrates to the satisfaction of the Secretary that the
  solvency of such new organization is assured;
  (B)(i) has had a risk contract in effect under section 1876(g) of the
  Social Security Act for at least 3 years; or
  (ii) if such organization is a new organization, the parent company
  of such organization has at least 5 years of experience in operating a
  health maintenance organization and two years experience in operating
  an organization with a risk contract under section 1876(g) of the Social
  Security Act in two or more States;
  (C)(i) has a total enrollment of at least 100,000 enrollees (including
  but not limited to individuals enrolled under title XVIII of such Act); or
  (ii) in the case of a new organization, the organization and any affiliated
  organizations have at least 100,000 of such enrollees;
  (D)(i) has no significant quality problems (as determined by the Secretary)
  identified by internal or external quality review; and
  (ii) the organization agrees to an annual quality review conducted by
  the Secretary;
  (E) has agreed to fund an annual membership satisfaction survey to be
  conducted by an independent survey firm that--
  (i) measures satisfaction of enrollees of such organization drawn from 3
  population groups including--
  (I) the enrolled medicare membership;
  (II) medicare members who have been discharged from a hospital within a
  previous 30-day period; and
  (III) former medicare members; and
  (ii) reports such surveys to the Secretary; and
  (F) has agreed to, within the amount charged the beneficiary under section
  1876(e), provide special services that are uniquely targeted towards
  elderly individuals receiving benefits under title XVIII of such Act and
  which are not routinely provided to such individuals and which include--
  (i) a multi-disciplinary geriatric assessment (performed by a social worker,
  physician and a nurse, each who have either a specialty in geriatrics or
  have completed a geriatric training program) that provides for each new
  beneficiary enrolled after the date the waiver is approved--
  (I) a plan to manage specific medical conditions;
  (II) objective criteria that measure--
  (aa) impairment of activities of daily living (including toileting, eating,
  mobility, bathing, continence, and dressing); and
  (bb) cognitive impairment; and
  (ii) with respect to individuals who are determined to be dependent in 3
  or more areas related to activities of daily living for at least 3 months
  (as described in clause (i)(II)) home and community based long-term care
  services (nonmedical services provided to prevent or delay an individual
  entitled to benefits under title XVIII of the Social Security Act from
  entering a nursing facility) that provide at least one of the following:
  (I) Homemaker or chore services.
  (II) Personal care services.
  (III) Adult day health care.
  (IV) Meals on wheels.
  (V) Respite care.
  (VI) Lifeline telephone assistance.
  (VII) Transportation.
  (VIII) Geriatric case management.
  (IX) Rehabilitation and home adaptation.
  (X) Special health education programs targeted to the elderly.
  (XI) Geriatric mental health services.
  (2) DURATION OF WAIVER- A waiver under this subsection shall be approved
  for a 3-year period. The additional benefits (described in paragraph
  (1)) shall be made available to eligible enrollees of an organization
  (described in paragraph (1)) for a period of at least 3 years.
  (3) REVIEW AND WITHDRAWAL BY THE SECRETARY- The Secretary shall review an
  organization's compliance with the terms of the waiver described in this
  subsection on an annual basis. The Secretary may withdraw any waiver for an
  organization which the Secretary finds fails to comply with the provisions
  of this subsection.
  (4) EVALUATION AND REPORT- The Secretary shall evaluate the cost and impact
  of any waiver granted under this subsection, including any impact on the
  financial viability of an organization granted such a waiver, and shall
  report to Congress, no later than 2 years after the date of enactment
  of this section on whether any changes should be made to the enrollment
  requirement described in section 1876(f) of the Social Security Act.
  (c) TEMPORARY WAIVER FOR RELATED ENTITIES-
  (1) For purposes of section 1876(f), the Secretary may combine the enrolled
  membership of an organization that meets the requirements described in
  paragraph (2) with the enrollment of an HMO or CMP that has a contract
  under section 1876 of the Social Security Act for 2 years.
  (2) An organization described in this paragraph must--
  (A) be related to the organization contracting under this section through
  common ownership and control;
  (B) provide services in the same geographic area through essentially the
  same physicians and providers as the contracting organization;
  (C) utilize a functionally integrated quality assurance program; and
  (D) use common grievance procedures, claims, processing systems, common
  management, and administrative services.
  (d) PHYSICIAN INCENTIVE PAYMENTS-
  (1) IN GENERAL- Section 1876(i) (42 U.S.C. 1395mm(i)) is amended by adding
  at the end the following new paragraph:
  `(8)(A) Each contract with an eligible organization under this section shall
  provide that the organization may not operate any physician incentive plan
  (as defined in subparagraph (B) unless the following requirements are met:
  `(i) No specific payment is knowingly made under the plan directly to
  a physician or physician group as an inducement to withhold or limit
  medically necessary services provided with respect to an identifiable
  individual enrolled with the organization.
  `(ii) If the plan places a physician or physician group at substantial
  financial risk (as determined by the Secretary) for services not provided
  by the physician or physician group, the organization--
  `(I) provides stop-loss protection (or a risk corridor) for the physician
  or group that is adequate and appropriate, based on standards developed
  by the Secretary that take into account the number of physicians in the
  group or under the plan that share the risk and the number of individuals
  enrolled with the organization who receive services from the physician or
  the physician group,
  `(II) conducts periodic surveys of individuals enrolled or previously
  enrolled with the organization to determine the degree to which such
  individuals have access to services provided by the organization and are
  satisfied with the quality of such services, and
  `(III) has an internal quality assurance program that addresses issues of
  under utilization.
  `(iii) The organization provides the Secretary with descriptive information
  regarding the plan, sufficient to permit the Secretary to determine whether
  the plan is in compliance with the requirements of this subparagraph.
  `(B) In this paragraph, the term `physician incentive plan' means any
  contractual compensation arrangement between an eligible organization
  and a physician or physician group that may directly or indirectly have
  the effect of reducing or limiting services provided with respect to
  individuals enrolled with the organization.'.
  (2) PENALTIES- Section 1876(i)(6)(A)(vi) (42 U.S.C. 1395mm(i)(6)(A)(vi)) is
  amended by striking `(g)(6)(A);' and inserting `(g)(6)(A) or paragraph (8);'.
  (3) REPEAL OF PROHIBITION- Section 1128A(b)(1) (42 U.S.C. 1320a-7a(b)(1))
  is amended--
  (A) by striking `, an eligible organization' and all that follows through
  `1903(m)',
  (B) by adding `and' at the end of subparagraph (A),
  (C) by striking subparagraph (B),
  (D) by redesignating subparagraph (C) as subparagraph (B), and
  (E) by striking `or organization'.
  (4) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) shall
  apply with respect to contract years beginning on or after January 1,
  1992, and the amendments made by paragraph (3) shall take effect on the
  date of the enactment of this Act.
  (e) WAIVER OF CERTAIN HMO REQUIREMENTS-
  (1) IN GENERAL- With respect to Managed Care, Inc., an affiliate of CHP,
  the medical group affiliated with Long Island Jewish Medical Center, such
  group may include the enrollees of a State licensed health maintenance
  organization for whom CHP has agreed to assume full financial risk for
  provision of hospital and physician services for purposes of meeting
  the risk contracting requirements that at least one-half of the enrolled
  membership of an eligible organization consists of individuals who are not
  entitled to benefits under titles XVIII or XIX of the Social Security Act
  (as described in section 1876(f)(1) of the Social Security Act) and the
  requirement that such organizations have an enrollment of at least 5,000
  members (as described in section 1876(g)(1) of such Act). The members
  of the health maintenance organization with whom Managed Care, Inc.,
  has an agreement may not be considered for purposes of meeting any such
  requirements with respect to any other risk contract described in section
  1876 of the Social Security Act.
  (2) DURATION- The waiver granted under this subsection shall expire 2
  years after the date of enactment of this Act.
  (f) APPLICATION OF NATIONAL COVERAGE DECISIONS ON RISK CONTRACTS-
  (1) IN GENERAL- Section 1876(c)(2) (42 U.S.C. 1395mm(c)(2)) is amended--
  (A) by redesignating clauses (i) and (ii) and subparagraphs (A) and (B)
  as subclauses (I) and (II) and clauses (i) and (ii), respectively;
  (B) by inserting `(A)' after `(2)'; and
  (C) by adding at the end the following new subparagraph:
  `(B) If there is a national coverage determination made in the period
  beginning on the date of an announcement under subsection (a)(1)(A) and
  ending on the date of the next announcement under such subsection that is
  projected to result in a significant change in the costs to the organization
  or providing the benefits that are the subject of such national coverage
  determination (and that has not been taken into account in determining
  the per capita rate of payment specified in the announcement)--
  `(i) such determination shall not apply to risk contracts under this section
  until the first contract year that begins after the end of such period; and
  `(ii) if such coverage determination provides for coverage of additional
  benefits or under additional circumstances, subsection (a)(6) shall not
  apply to payment for such additional benefits or benefits provided under
  such additional circumstances during the period specified in clause (i),
unless otherwise required by law.'.
  (2) CONFORMING AMENDMENT- Section 1876(a)(6) of such Act is amended by
  striking `subsection (c)(7)' and inserting `subsections (c)(2)(B)(ii) and
  (c)(7)'.
  (3) EFFECTIVE DATE- The amendments made by this subsection shall apply
  with respect to national coverage determinations made on or after September
  7, 1990.
  (g) PERMITTING CONTINUOUS ENROLLMENT OF CERTAIN INDIVIDUALS-
  (1) IN GENERAL- Section 1876(a)(1)(E) (42 U.S.C. 1395mm(a)(1)(E))
  is amended--
  (A) by striking `(E)' and inserting `(E)(i)': and
  (B) by adding at the end the following new clause:
  `(ii) The Secretary may make retroactive adjustments under clause (i) to take
  into account individuals enrolled during the period beginning on the date on
  which the individual enrolls (and signs a written statement of enrollees'
  rights provided under subsection (c)(3)(E)) with an eligible organization
  (which has a risk contract under this section) under a health benefit plan
  operated, sponsored, or contributed to, by the individual's employer or
  former employer (or the employer or former employer of the individual's
  spouse) and ending on the date on which the individual is enrolled in the
  plan under this section, except that for purposes of making such retroactive
  adjustments under this clause, such period may not exceed 90 days.'.
  (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply with
  respect to individuals enrolling with an eligible organization (which has a
  risk contract under section 1876 of the Social Security Act) under a health
  benefit plan operated, sponsored, or contributed to, by the individual's
  employer or former employer (or the employer or former employer of the
  individual's spouse) on or after January 1, 1991.
  (h) EXTENSION OF WAIVERS FOR SOCIAL HEALTH MAINTENANCE ORGANIZATIONS-
  Section 4018(b)(1) of the Omnibus Budget Reconciliation Act of 1987 is
  amended by striking `September 30, 1992' and inserting `December 31, 1995'.
  (i) STUDY OF CHIROPRACTIC SERVICES-
  (1) The Secretary shall conduct a study of the extent to which health
  maintenance organizations with contracts under section 1876 of the Social
  Security Act (42 U.S.C. 1395mm) make available to enrollees entitled to
  benefits under title XVIII of such Act chiropractic services that are
  covered under such title.
  (2) The study shall examine the arrangements under which such services are
  made available and the types of practitioners furnishing such services to
  such enrollees.
  (3) The study shall be based on contracts entered into or renewed on or
  after January 1, 1991, and before January 1, 1993.
  (4) The Secretary shall issue a final report to the Committees on Ways
  and Means and Energy and Commerce of the House of Representatives and the
  Committee on Finance of the Senate on the results of the study not later
  than January 1, 1993. The report shall include recommendations with respect
  to any legislative and regulatory changes that the Secretary determines
  are necessary to ensure access to such services.
SEC. 6154. PEER REVIEW ORGANIZATIONS.
  (a) STANDARDS FOR IMPOSING SANCTIONS- Section 1156(b)(1) (42
  U.S.C. 1320c-5(b)(1)) is amended--
  (1) by inserting `and, if appropriate, after the practitioner or person
  has been given a reasonable opportunity to enter into and complete a
  corrective action plan (which may include remedial education) agreed to
  by the organization, and has failed successfully to complete such plan,'
  after `concerned,', and
  (2) by inserting after the second sentence the following: `In determining
  whether a practitioner or person has demonstrated an unwillingness or lack
  of ability substantially to comply with such obligations, the Secretary
  shall consider the practitioner's or person's unwillingness or lack of
  ability, during the period before the organization submits its report
  and recommendations, to enter into and successfully complete a corrective
  action plan.'.
  (b) CLARIFICATION OF LIMITATION ON LIABILITY- Section 1157(b) (42
  U.S.C. 1320c-6(b)) is amended--
  (1) by inserting `organization having a contract with the Secretary under
  this part and no' after `No',
  (2) by striking `by him', and
  (3) by striking `he has exercised due care' and inserting `due care was
  exercised in the performance of such duty, function, or activity'.
  (c) INVOLVEMENT OF OPTOMETRISTS AND PODIATRISTS- Section 1154 (42
  U.S.C. 1320c-3) is amended--
  (1) in subsection (a)(7)(A)(i) by inserting `, optometry, and podiatric
  medicine' after `dentistry', and
  (2) in subsection (c) by striking `or dentistry' each place it appears
  and inserting `, dentistry, optometry, or podiatric medicine'.
  (d) EFFECTIVE DATES-
  (1) The amendments made by subsection (a) shall apply to initial
  determinations made under section 1156(b)(1) of the Social Security Act
  (42 U.S.C. 1320c-5(b)(1)) on or after January 1, 1991.
  (2) The amendments made by subsection (b) shall become effective on the
  date of the enactment of this Act.
  (3) The amendments made by subsection (c) shall apply to contracts entered
  into on or after the date of the enactment of this Act.
SEC. 6155. IMPROVEMENTS IN AND SIMPLIFICATION OF MEDIGAP POLICIES.
  (a) SIMPLIFICATION OF MEDIGAP POLICIES- Section 1882 (42 U.S.C. 1395ss)
  is amended--
  (1) in subsection (b)(1)(B), by striking `through (4)' and inserting
  `through (5)';
  (2) in subsection (c)--
  (A) by striking `and' at the end of paragraph (3),
  (B) by striking the period at the end of paragraph (4) and inserting `;
  and', and
  (C) by inserting after paragraph (4) the following new paragraph:
  `(5) meets the requirements of subsection (o).'; and
  (3) by adding at the end the following new subsections:
  `(o) The requirements of this subsection are as follows:
  `(1) Each medicare supplemental policy shall provide for coverage of a group
  of benefits consistent with standards established pursuant to subsection
  (p)(2).
  `(2) If the medicare supplemental policy provides for coverage of a group
  of benefits other than the core group of basic benefits identified pursuant
  to subsection (p)(2)(B), the issuer of the policy must make available to
  the individual a medicare supplemental policy with only such core group
  of basic benefits.
  `(3) The issuer of the policy has provided, before the sale of the policy,
  a summary information sheet which describes the benefits (including
  any optional benefits) under the policy, the average ratio of benefits
  provided to premiums collected for the most recent 3-year period in which
  the policy is in effect (or, for a policy that has not been in effect for
  3 years, the average ratio of benefits provided to premiums collected that
  is expected during the 3rd year of the policy) and which allows a direct
  comparison of benefits and prices among policies.
  `(4) In the case of a benefit for which the premium attributable to that
  benefit is at least 75 percent of the nominal value or maximum payout
  of such benefit, the insurer shall disclose to any potential buyer the
  premium and the maximum payout of the benefit.
  `(5)(A) Each medicare supplemental policy shall be guaranteed renewable.
  `(B) If the medicare supplemental policy is terminated by the group
  policyholder and is not replaced as provided under subparagraph (D), the
  issuer shall offer certificateholders an individual medicare supplemental
  policy which (at the option of the certificateholder)--
  `(i) provides for continuation of the benefits contained in the group
  policy, or
  `(ii) provides for such benefits as otherwise meets the requirements of
  this section.
  `(C) If an individual is a certificateholder in a group medicare supplemental
  policy and the individual terminates membership in the group, the issuer
  shall--
  `(i) offer the certificateholder the conversion opportunity described in
  subparagraph (B), or
  `(ii) at the option of the group policyholder, offer the certificateholder
  continuation of coverage under the group policy.
  `(D) If a group medicare supplemental policy is replaced by another
  group medicare supplemental policy purchased by the same policyholder,
  the succeeding issuer shall offer coverage to all persons covered under
  the old group policy on its date of termination. Coverage under the new
  group policy shall not result in any exclusion for preexisting conditions
  that would have been covered under the group policy being replaced.
  `(6)(A) A medicare supplemental policy may not deny a claim for losses
  incurred for a preexisting condition more than 6 months after the effective
  date of coverage and may not define a preexisting condition as a condition
  for which medical advice was given or treatment was recommended by or
  received from a physician more than 6 months before the effective date
  of coverage.
  `(B) If a medicare supplemental policy or certificate replaces another
  such policy or certificate, any period under the policy or certificate
  being replaced during which claims were denied by reason of a preexisting
  condition, exclusion period, rating period, elimination period, or
  probationary period shall be credited toward any such period under the
  new policy or certificate.
  `(p)(1) The standards established pursuant to this subsection (in this
  subsection and subsection (t) referred to as `medicare supplemental insurance
  simplification standards' or `simplification standards') shall include--
  `(A) limitations on the benefits that may be offered under a medicare
  supplemental policy consistent with paragraphs (2) and (3) of this
  subsection,
  `(B) uniform language and format to be used with respect to such benefits
  for the purposes described in subsection (o)(3), and
  `(C) transitional requirements consistent with paragraph (4).
  `(2) The simplification standards established pursuant to this subsection
  shall provide--
  `(A) for such groups of basic benefits, or additional, optional benefits,
  as may be appropriate taking into account the considerations specified in
  paragraph (3) and the requirements of the succeeding subparagraphs;
  `(B) for identification of a core group of basic benefits which includes
  only the minimum benefits required of a medicare supplemental policy (as
  of the date of the enactment of this subsection and not including payment
  of any deductibles); and
  `(C) that, subject to paragraph (5)--
  `(i) if the simplification standards provide for medicare supplemental
  insurance benefits to be offered as a core group of basic benefits plus
  a defined list of optional additional benefits to be offered to consumers
  on an optional basis, then the total number of defined optional additional
  benefits offered shall not exceed 10;
  `(ii) if the simplification standards provide for medicare supplemental
  insurance benefits to be offered through defined benefit packages or
  policies, then the total number of different benefit packages (counting
  the core group of basic benefits and counting each combination of benefits
  that may be offered as a separate benefit package) that may be established
  shall not exceed 10; and
  `(iii) if the simplification standards provide for medicare supplemental
  insurance benefits to be offered through defined benefits that the insurer
  packages as it deems appropriate, the total number of packages offered by
  an insurer cannot exceed 4, and the total number of benefits to be packaged
  may not exceed 10.
  `(3) The limitations on benefits under paragraph (2) shall, to the extent
  possible--
  `(A) provide for benefits that offer consumers the ability to purchase the
  benefits that are available in the market as of the date of the enactment
  of this subsection; and
  `(B) balance the objectives of (i) simplifying the market to facilitate
  direct comparison of prices and benefits among policies, (ii) avoiding
  adverse selection, (iii) providing consumer choice, and (iv) promoting
  market stability.
  `(4) The transitional requirements of this paragraph are that the
  simplification standards shall not apply in the case of a medicare
  supplemental policy which was issued to a policyholder before the effective
  date of such standards.
  `(5)(A) Except as provided in subparagraph (B), no State with a regulatory
  program approved under subsection (b)(1) may provide for or permit the
  grouping of benefits (or language or format with respect to such benefits)
  under a medicare supplemental policy unless such grouping meets the
  applicable simplification standards.
  `(B)(i) The State may, upon application by an insurer, waive the requirements
  of this subsection to permit the issuance and sale of a medicare supplemental
  policy which does not comply with the applicable simplification standards
  in order to offer new or innovative benefits as part of the policy. Any
  such new or innovative benefits shall be offered in a manner as approved
  by the State, which is consistent and practically achievable under the
  simplification standards. Such new or innovative benefits may include
  benefits that are not otherwise available and are cost-effective.
  `(6)(A) Except as provided in subparagraph (B), this subsection shall not
  be construed as preventing a State from restricting the groups of benefits
  that may be offered in medicare supplemental policies in the State.
  `(B) A State with a regulatory program approved under subsection (b)(1) may
  not restrict under subparagraph (A) the offering of a medicare supplemental
  policy consisting only of the core group of benefits described in paragraph
  (2)(B).
  `(7) The Secretary may waive the application of simplification standards
  in regard to the limitation of benefits described in paragraph (1)(A)
  in those States that on the date of enactment of this subsection had in
  place an alternative simplification program.
  `(8) By not later than 4 years after the date of enactment of this
  subsection, the Comptroller General shall submit to Congress a report
  describing the impact of the program on consumer protection, health
  benefit innovation and value of innovative benefits, consumer choice,
  and health care costs and shall include in the report such recommendations
  on the appropriate roles of the Association, States, and the Secretary in
  carrying out such a program as he deems appropriate.'.
  (b) REQUIRING APPROVAL OF STATE FOR SALE IN THE STATE-
  (1) IN GENERAL- Section 1882(d)(4)(B) (42 U.S.C. 1395ss(d)(4)(B)) is
  amended by striking the second sentence.
  (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply to
  policies mailed, or caused to be mailed, on and after July 1, 1991.
  (c) PREVENTING DUPLICATION-
  (1) IN GENERAL- Subsection (d)(3) of section 1882 (42 U.S.C. 1395ss)
  is amended--
  (A) in subparagraph (A)--
  (i) by striking `Whoever knowingly sells' and inserting `It is unlawful
  for a person to sell or issue',
  (ii) by striking `substantially',
  (iii) by inserting `or title XIX' after `other than this title',
  (iv) by striking `, shall be fined' and inserting `. Whoever violates the
  previous sentence shall be fined', and
  (v) by striking `$5,000' and inserting `$25,000'; and
  (B) by amending subparagraph (B) to read as follows:
  `(B)(i) It is unlawful for a person to issue or sell a medicare supplemental
  policy to an individual entitled to benefits under part A or enrolled
  under part B, whether directly, through the mail, or otherwise, unless--
  `(I) the person obtains from the individual, as part of the application
  for the issuance or purchase and on a form described in subclause (II),
  a written statement signed by the individual stating, to the best of the
  individual's knowledge, what medicare supplemental policies the individual
  has, from what source, and whether the individual has applied for and been
  determined to be entitled to any medical assistance under title XIX, whether
  as a qualified medicare beneficiary (as described in section 1905(p)(1))
  or otherwise, and
  `(II) the written statement is accompanied by a written acknowledgment,
  signed by the seller of the policy, of the request for and receipt of
  such statement.
The written acknowledgment under subclause (II) does not constitute
verification or affirmation by (or on behalf of) the seller or issuer of the
truth of any information supplied by an individual in the written statement
described in subclause (I).
  `(ii) The statement required by clause (i) shall be made on a form that--
  `(I) states that a medicare-eligible individual does not need more than
  one medicare supplemental policy,
  `(II) states that individuals 65 years of age or older may be eligible
  for benefits under the State medicaid program under title XIX and that
  such individuals who are entitled to benefits under that program usually
  do not need a medicare supplemental policy and that benefits and premiums
  under any such policy shall be suspended upon request of the policyholder
  during the period of entitlement to benefits under such title, and
  `(III) includes any telephone number established under section 1889, as
  well as the address and local telephone number of any counseling program
  offered by (or with the assistance of) the State, under its State insurance
  department, or under a State agency on aging for individuals considering
  purchase of a medicare supplemental policy and the address and local
  telephone number of the State medicaid office.
  `(iii)(I) Except as provided in subclauses (II) and (III), if the statement
  required by clause (i) is not obtained or indicates that the individual
  has another medicare supplemental policy or indicates that the individual
  is entitled to any medical assistance under title XIX, the sale of such
  a policy shall be considered to be a violation of subparagraph (A).
  `(II) Subclause (I) shall not apply in the case of an individual who has
  another policy, if the individual indicates in writing, as part of the
  application for purchase, that the policy being purchased replaces such
  other policy and indicates an intent to terminate the policy being replaced
  when the new policy becomes effective and the issuer or seller certifies
  in writing that such policy will not, to the best of the issuer or seller's
  knowledge, duplicate coverage (taking into account any such replacement).
  `(III) Subclause (I) also shall not apply if a State medicaid plan under
  title XIX pays the premiums for the policy, or pays less than an individual's
  (who is described in section 1905(p)(1)) full liability for medicare cost
  sharing as defined in section 1905(p)(3)(A).
  `(iv) Whoever issues or sells a medicare supplemental policy in violation
  of this subparagraph shall be fined under title 18, United States Code,
  or imprisoned not more than 5 years, or both, and, in addition to or in
  lieu of such a criminal penalty, is subject to a civil money penalty of
  not to exceed $25,000 for each such failure.'.
  (2) SUSPENSION OF POLICIES DURING RECEIPT OF MEDICAID BENEFITS- Section
  1882(o) (42 U.S.C. 1395ss(o)), as added by subsection (a), is amended by
  adding at the end the following new paragraph:
  `(7) Each medicare supplemental policy shall provide that benefits
  and premiums under the policy shall be suspended at the request of the
  policyholder for the period in which the policy or certificate holder
  indicates that the policy or certificate holder has applied for and been
  determined to be entitled to medical assistance under title XIX. If
  such suspension occurs and if the policy or certificate holder loses
  entitlement to such medical assistance, coverage under such policy shall be
  automatically reinstituted (effective as of the date of termination of such
  entitlement) under terms described in subsection (n)(6)(A)(ii) if the policy
  or certificate holder receives notice of loss of such entitlement from the
  policy or certificate holder within 90 days after the date of such loss.'.
  (3) CONFORMING AMENDMENT- Section 1882(d)(5) is amended by inserting
  `(3)(B),' after `(3)(A),'.
  (4) INCREASE IN OTHER CIVIL MONEY PENALTIES- Paragraphs (1) and (4)(A) of
  section 1882(d) of such Act are amended by striking `$5,000' and inserting
  `$25,000'.
  (d) LOSS RATIOS AND REFUND OF PREMIUMS-
  (1) IN GENERAL- Section 1882 (42 U.S.C. 1395ss) as amended by subsection
  (a), is further amended--
  (A) in subsection (c), by amending paragraph (2) to read as follows:
  `(2) meets the requirements of subsection (q);';
  (B) by striking the sentence following subsection (c)(4); and
  (C) by adding at the end the following new subsection:
  `(q)(1) A medicare supplemental policy or health insurance policy may not
  be issued or sold in any State unless--
  `(A) the policy can be expected (as estimated for the entire period for which
  rates are computed to provide coverage, on the basis of incurred claims
  experience and earned premiums for such periods and in accordance with
  accepted actuarial principles and practices and standards developed by the
  National Association of Insurance Commissioners) to return to policyholders
  in the form of aggregate benefits provided under the policy, at least 75
  percent of the aggregate amount of premiums collected in the case of group
  policies and at least 65 percent in the case of individual policies; and
  `(B) the issuer of the policy provides for the issuance of a proportional
  refund, or a credit against future premiums of a proportional amount,
  based on the premium paid and in accordance with paragraph (3), of the
  amount of premiums received necessary to assure that the ratio of aggregate
  benefits provided to the aggregate premiums collected (net of such refunds
  or credits) complies with the expectation required under subparagraph (A).
For purposes of applying subparagraph (A) only, policies issued as a result of
solicitations of individuals through the mails or by mass media advertising
(including both print and broadcast advertising) shall be deemed to be
individual policies.
  `(2)(A) Paragraph (1)(B) shall be applied with respect to each type of policy
  by policy number. Paragraph (1)(B) shall not apply to a policy with respect
  to the first 2 years in which it is in effect. The Comptroller General,
  in consultation with the National Association of Insurance Commissioners,
  shall submit to Congress a report containing recommendations on adjustments
  in the percentages under paragraph (1)(A) that may be appropriate in order to
  apply paragraph (1)(B) to the first 2 years in which policies are effective.
  `(B) A refund or credit required under paragraph (1)(B) shall be made to
  each policyholder insured under the applicable policy as of the last day
  of the year involved.
  `(C) Such a refund or credit shall include interest from the end of the
  policy year involved until the date of the refund at a rate as specified
  by the Secretary for this purpose from time to time which is not less than
  the average rate of interest for 13-week Treasury notes.
  `(D) For purposes of this paragraph and paragraph (1)(B), refunds or
  credits against premiums due shall be made, with respect to a policy year,
  not later than the third quarter of the succeeding policy year.
  `(3) The provisions of this subsection do not preempt a State from requiring
  a higher percentage than that specified in paragraph (1)(A).
  `(4) The Comptroller General shall periodically, not less often than once
  every 3 years, perform audits with respect to the compliance of medicare
  supplemental policies with the requirements of paragraph (1) and shall report
  the results of such audits to the State involved and to the Secretary.'.
  (2) ASSURING ACCESS TO LOSS RATIO INFORMATION- Section 1882(b)(1)(C)
  (42 U.S.C. 1395ss(b)(1)(C)) is amended by striking the semicolon at the
  end and inserting a comma and the following:
`and that a copy of each such policy, the most recent premium for each
such policy, and a listing of the ratio of benefits provided to premiums
collected for the most recent 3-year period for each such policy issued or
sold in the State is maintained and made available to interested persons;'.
  (3) EFFECTIVE DATE- The amendments made by this subsection shall apply to
  policies sold or issued more than 1 year after the date of the enactment
  of this Act.
  (e) IMPLEMENTATION OF PROCESS TO APPROVE PREMIUM INCREASES- Section
  1882(b)(1) (42 U.S.C. 1395ss(b)(1)) is amended--
  (1) by striking `and' at the end of subparagraph (D);
  (2) by adding `and' at the end of subparagraph (E);
  (3) by adding at the end thereof the following new subparagraph:
  `(F) provides for a process for approving or disapproving proposed premium
  increases with respect to such policies, and establishes a policy for the
  holding of public hearings prior to approval of a premium increase,'.
  (f) MEDICARE SELECT POLICIES-
  (1) Section 1882 (42 U.S.C. 1395ss) as amended by subsection (d), is
  further amended by adding at the end the following:
  `(r) If a policy meets the NAIC Model Standards except that benefits under
  the policy are restricted to items and services furnished by certain
  entities (or reduced benefits are provided when items or services are
  furnished by other entities), the policy shall nevertheless be treated as
  meeting those standards if--
  `(1) full benefits are provided for items and services furnished through
  a network of entities which have entered into contracts with the issuer
  of the policy;
  `(2) full benefits are provided for items and services furnished by
  other entities if the services are medically necessary and immediately
  required because of an unforeseen illness, injury, or condition and it
  is not reasonable given the circumstances to obtain the services through
  the network;
  `(3) the network offers sufficient access; and
  `(4) the issuer of the policy has arrangements for an ongoing quality
  assurance program for items and services furnished through the network.'.
  (2) Section 1882(c)(1) (42 U.S.C. 1395ss(c)(1)) is amended by inserting
  `(except as otherwise provided by subsection (r))' before the semicolon.
  (3) Section 1882(b)(1) (42 U.S.C. 1395ss(b)(1)) (as amended by subsection
  (e) of this Act) is further amended--
  (A) in subparagraph (A), by inserting `, except as otherwise provided by
  subparagraph (G)' before the semicolon;
  (B) by striking `and' at the end of subparagraph (E);
  (C) by inserting `and' at the end of subparagraph (F); and
  (D) by adding after subparagraph (F) the following:
  `(G) in the case of a policy that meets the standards under subparagraph
  (A) except that benefits under the policy are limited to items and services
  furnished by certain entities (or reduced benefits are provided when items
  or services are furnished by other entities), provides for the application
  of requirements equal to or more stringent than the requirements under
  subsection (r),'.
  (4)(A) Section 1882 (42 U.S.C. 1395ss) as amended by paragraph (1), is
  further amended by adding at the end the following:
  `(s) The Secretary may enter into a contract with an entity whose policy has
  been certified under subsection (r) or has been approved by a State under
  subsection (b)(1)(G) to determine whether items and services (furnished to
  individuals entitled to benefits under this title and under that policy) are
  not allowable under section 1862(a)(1). Payments to the entity shall be in
  such amounts as the Secretary may determine, taking into account estimated
  savings under contracts with carriers and fiscal intermediaries and other
  factors that the Secretary finds appropriate. Paragraph (1), the first
  sentence of paragraph (2)(A), paragraph (2)(B), paragraph (3)(C), paragraph
  (3)(D), and paragraph (3)(E) of section 1842(b) shall apply to the entity.'.
  (B) The first sentence of section 1154(a)(4)(B) (42 U.S.C. 1320c-3(a)(4)(B))
  is amended by inserting `(or subject to review under section 1882(s))'
  after `section 1876'.
  (g) CLARIFICATION CONCERNING MEDICARE HEALTH MAINTENANCE ORGANIZATIONS
  AND COMPETITIVE MEDICAL PLANS- The first sentence of section 1882(g)(1) (42
  U.S.C. 1395ss(g)(1)) is amended by inserting before the period the following:
  `, nor any such policy or plan under a contract under section 1876'.
  (h) MONITORING OF STATE MEDIGAP PROGRAMS-
  (1) REVIEW BY SECRETARY- Section 1882 (42 U.S.C. 1395ss) as amended by
  subsection (f), is further amended--
  (A) in subsection (b)(1), in the matter following subparagraph (G), by
  striking `Panel' and inserting `Secretary';
  (B) in subsection (b)(1), by adding at the end the following: `If the
  Secretary finds that a State regulatory program no longer meets the standards
  and requirements of this paragraph, before making a final determination,
  the Secretary shall provide the State an opportunity to adopt such a plan
  of correction as would permit the State to continue to meet such standards
  and requirements.'; and
  (C) in subsection (g)(2)(B), by inserting `and whose regulatory program
  the Secretary finds continues to meet the standards and requirements of
  subsection (b)(1)' before the period.
  (2) REPORTING BY STATES- Section 1882(b)(1) (42 U.S.C. 1395ss(b)(1)),
  as amended by subsection (f), is further amended--
  (A) by striking `and' at the end of subparagraph (F);
  (B) by inserting `and' at the end of subparagraph (G);
  (C) by inserting after subparagraph (G) the following:
  `(H) reports to the Secretary on the implementation and enforcement of
  standards and requirements of this paragraph at intervals established by
  the Secretary,'; and
  (D) by adding at the end the following new sentence: `The report required
  under subsection (H) shall include information on loss ratios of policies
  sold in the State, frequency and types of instances in which policies
  approved by the State fail to meet the standards of this paragraph, actions
  taken by the State to bring such policies into compliance, and information
  regarding State programs implementing consumer protection provisions,
  and such further information as the Secretary in consultation with the
  National Association of Insurance Commissioners, may specify.'.
  (i) DISCLAIMER FOR UNAPPROVED POLICIES- Section 1882(d) (42 U.S.C. 1395ss(d))
  is amended--
  (1) in paragraph (5), by striking `and (4)(A)' and inserting `(4)(A),
  (4)(B), and (5)',
  (2) by redesignating paragraph (5) as paragraph (6); and
  (3) by inserting after paragraph (4) the following:
  `(5)(A) If an insurer issues a medicare supplemental policy in a State
  without an approved regulatory program, and for which the Secretary has
  determined that the State does not provide consumer protection as great
  as would be offered under an approved program, and if that policy does
  not have a certification in effect under subsection (a), the insurer shall--
  `(i) cause to be prominently displayed in at least 12 point type on any
  advertisement for that policy on each page of the outline of coverage for
  the policy described in section 1882(o)(3), and on the first page of the
  policy, the following statement: `This policy has not been certified by
  the Secretary of the United States Department of Health and Human Services
  as meeting Federal requirements for Medicare supplemental policies.'; and
  `(ii) require the purchaser to sign the following statement: `I understand
  that this policy has not been certified by the Secretary of the United States
  Department of Health and Human Services as meeting Federal requirements
  for Medicare supplemental policies.'.
  `(B) An insurer shall be subject to a civil monetary penalty not to exceed
  $25,000 for each violation of any requirement of subparagraph (A).'.
  (j) ADOPTION OF NEW STANDARDS- Section 1882 (42 U.S.C. 1395ss), as amended
  by subsection (f), is further amended by adding at the end the following:
  `(t)(1)(A) If within 9 months after the date of enactment of this subsection,
  the National Association of Insurance Commissioners revises the NAIC Model
  Regulation previously promulgated for purposes of this section to incorporate
  all the requirements and standards of subsections (o), (p), (q), and (r),
  and other changes in law made by the Omnibus Budget Reconciliation Act of
  1990, then subsection (g)(2)(A) shall be applied in each State, effective
  for policies issued to policyholders on and after the date specified in
  paragraph (3), as if the reference to the Model Regulation adopted on June
  6, 1979, included a reference to the NAIC simplification standards.
  `(B) If the Association does not promulgate NAIC simplification standards
  within the 9-month period specified in paragraph (1), the Secretary shall
  promulgate, not later than 9 months after the end of such period, revised
  Federal model standards to incorporate all the requirements and standards
  of subsections (o), (p), (q), and (r), and other changes in law made by the
  Omnibus Budget Reconciliation Act of 1990, and subsection (g)(2)(A) shall
  be applied in each State, effective for policies issued to policyholders
  on and after the date specified in subparagraph (C), as if the reference
  to the Model Regulation adopted on June 6, 1979, included a reference to
  the revised Federal model standards.
  `(C)(i) Subject to clause (ii), the date specified in this paragraph for a
  State is the date the State adopts the NAIC simplification standards or the
  Federal simplification standards or 1 year after the date the Association
  or the Secretary first adopts such standards, whichever is earlier.
  `(ii) In the case of a State which the Secretary identifies, in consultation
  with the Association, as--
  `(I) requiring State legislation (other than legislation appropriating
  funds) in order for medicare supplemental policies to meet the NAIC or
  Federal simplification standards, but
  `(II) having a legislature which is not scheduled to meet in 1991 in a
  legislative session in which such legislation may be considered,
the date specified in this subparagraph is the first day of the first calendar
quarter beginning after the close of the first legislative session of the
State legislature that begins on or after January 1, 1991. For purposes of
the previous sentence, in the case of a State that has a 2-year legislative
session, each year of such session shall be deemed to be a separate regular
session of the State legislature.
  `(2) By not later than 2 years after the date of enactment of this
  subsection, the Secretary shall report to the Congress on the adoption of
  the standards and requirements of this section, including the identification
  of those States which do and do not have regulatory programs that meet the
  requirements of this section, and the reasons for the failure of any States
  to adopt some or all of the standards and requirements of this section.
  `(3) In promulgating simplification standards under subsection (p)(1),
  the Association or Secretary shall consult with a working group composed
  of representatives of issuers of medicare supplemental policies, consumer
  groups, medicare beneficiaries, and other qualified individuals. Such
  representatives shall be selected in a manner so as to assure balanced
  representation among the interested groups.
  `(4)(A) Every 3 years the Secretary shall, in consultation with the NAIC,
  evaluate the appropriateness of new or innovative benefits offered pursuant
  to subsection (p)(5)(B), and determine whether the incorporation of such
  new or innovative benefits into the simplification standards would further
  the purposes of such standards. If within 90 days after a request from
  the Secretary, the Association--
  `(i) makes a determination that modification of the NAIC or Federal
  simplification standards is appropriate; and
  `(ii) modifies the NAIC or Federal simplification standards to include
  such additional group of benefits (including accompanying language and
  format with respect to such benefits),
subsection (g)(2)(A) shall be applied in each State, effective for policies
issued to policyholders on or after the date specified in subparagraph
(B), as if the reference to the Model Regulation adopted on June 6, 1979
included a reference to the NAIC or Federal simplification standards as
modified. If the Association fails to make a determination with respect to
appropriateness of modifying the NAIC or Federal simplification standards,
then the Secretary may make such determination and may modify the NAIC
or Federal simplification standards to include such additional benefits
(including accompanying language and format with respect to such benefits)
as may be appropriate. In such a case, subsection (g)(2)(A) shall be applied
in each State, effective for policies issued to policyholders on or after
the date specified in subparagraph (B), as if the reference to the Model
Regulation adopted on June 6, 1979 included a reference to the NAIC or
Federal simplification standards as modified.
  `(B) The date specified in this subparagraph for a State is the earlier
  of the date the State adopts the modifications to the NAIC or Federal
  simplification standards or 1 year after the date the Association or the
  Secretary first adopts the modifications to such standards, except that,
  in the case of a State that the Secretary identifies, in consultation with
  the Association, as--
  `(i) requiring State legislation (other than appropriating funds) in order
  for medicare supplemental policies to meet the modified NAIC or Federal
  simplification standards, but
  `(ii) having a legislature which is not scheduled to meet within the
  1-year period after the date the Association or Secretary first adopts
  the modifications to such standards,
the date specified in this subparagraph is the first day of the first
calendar year after the close of the first legislative session of the State
legislature that begins after the date the Association or the Secretary
first adopts such modifications. For the purposes of the previous sentence,
in the case of a State that has a 2-year legislative session, each year of
the legislative session shall be deemed to be a separate regular session of
the State legislature.
  `(5) If benefits under this title are changed and the Secretary determines,
  in consultation with the Association, that changes in the simplification
  standards are needed to reflect such changes in benefits, the provisions
  for the modification of simplification standards outlined in paragraph
  (4)(A) will be applied.'.
  (k) HEALTH INSURANCE INFORMATION, COUNSELING, AND ASSISTANCE GRANTS-
  (1) GRANTS- The Secretary of Health and Human Services (hereafter in
  this section referred to as the `Secretary') shall make grants to States
  that submit applications to the Secretary that meet the requirements of
  this subsection for the purpose of providing information, counseling, and
  assistance relating to the procurement of adequate and appropriate health
  insurance coverage to individuals who are eligible to receive benefits under
  title XVIII of the Social Security Act (hereafter in this section referred
  to as `eligible individuals'). The Secretary shall prescribe regulations to
  establish a minimum level of funding for a grant issued under this section.
  (2) GRANT APPLICATIONS- (A) In submitting an application under this
  subsection, a State may consolidate and coordinate an application that
  consists of parts prepared by more than one agency or department of
  such State.
  (B) As part of an application for a grant under this section, a State shall
  submit a plan for a State-wide health insurance information, counseling,
  and assistance program. Such program shall--
  (i) establish or improve upon a health insurance information, counseling, and
  assistance program that provides counseling (including direct counseling) and
  assistance to eligible individuals in need of health insurance information,
  including--
  (I) information that may assist individuals in obtaining benefits and
  filing claims under titles XVIII and XIX of the Social Security Act;
  (II) policy comparison information for medicare supplemental policies
  (as described in section 1882(g)(1) of the Social Security Act (42
  U.S.C. 1395ss(g)(1)) and information that may assist individuals in filing
  claims under such medicare supplemental policies;
  (III) information regarding long-term care insurance; and
  (IV) information regarding other types of health insurance benefits that
  the Secretary determines to be appropriate;
  (ii) in conjunction with the health insurance information, counseling, and
  assistance program described in clause (i), establish a system of referral
  to appropriate Federal or State departments or agencies for assistance with
  problems related to health insurance coverage (including legal problems),
  as determined by the Secretary;
  (iii) provide for a sufficient number of staff positions (including
  volunteer positions) necessary to provide the services of the health
  insurance information, counseling, and assistance program;
  (iv) provide assurances that staff members (including volunteer staff
  members) of the health insurance information, counseling, and assistance
  program have no conflict of interest in providing the services described
  in clause (i);
  (v) provide for the collection and dissemination of timely and accurate
  health care information to staff members (including volunteer staff members)
  of the health insurance information, counseling, and assistance program and
  regular staff meetings and continuing education programs for the purpose
  of informing the staff of current developments in legal and economic issues
  relating to the provision of health insurance;
  (vi) provide for training programs for staff members (including volunteer
  staff members);
  (vii) provide for the coordination of the exchange of health insurance
  information between the staff of departments and agencies of the State
  government and the staff of the health insurance information, counseling,
  and assistance program;
  (viii) make recommendations concerning consumer issues and complaints
  related to the provision of health care to agencies and departments of the
  State government and the Federal Government responsible for providing or
  regulating health insurance;
  (ix) establish an outreach program to provide the health insurance
  information and counseling described in clause (i) and the assistance
  described in clause (ii) to eligible individuals; and
  (x) demonstrate, to the satisfaction of the Secretary, an ability to
  provide the counseling and assistance required under this subsection.
  (3) SPECIAL GRANTS- (A) A State that is conducting a health insurance
  information, counseling, and assistance program that is substantially
  similar to a program described in paragraph (2)(B), shall, as a
  requirement for eligibility for a grant under this section, demonstrate,
  to the satisfaction of the Secretary, that such State shall maintain the
  activities of such program at least at the level that such activities were
  conducted immediately preceding the date of the issuance of any grant
  during the period of time covered by such grant under this section and
  that such activities will continue to be maintained at such level.
  (B) If the Secretary determines that the existing health insurance
  information, counseling, and assistance program is substantially similar to
  a program described in paragraph (2)(B), the Secretary may waive some or
  all of the requirements described in paragraph (2)(B), and issue a grant
  to the State for the purpose of increasing the number of services offered
  by the health insurance information, counseling, and assistance program,
  experimenting with new methods of outreach in conducting such program,
  or expanding such program to geographic areas of the State not previously
  served by the program.
  (4) CRITERIA FOR ISSUING GRANTS- In issuing a grant under this section,
  the Secretary shall consider--
  (A) the commitment of the State to carrying out the health insurance
  information, counseling, and assistance program described in paragraph
  (2)(B), including the level of cooperation demonstrated--
  (i) by the office of the chief insurance regulator of the State, or the
  equivalent State entity;
  (ii) other officials of the State responsible for overseeing insurance
  plans issued by nonprofit hospital and medical service associations; and
  (iii) departments and agencies of such State responsible for--
  (I) administering funds under title XIX of the Social Security Act, and
  (II) administering funds appropriated under the Older Americans Act;
  (B) the population of eligible individuals in such State as a percentage
  of the population of such State; and
  (C) in order to ensure the needs of rural areas in such State, the relative
  costs and special problems associated with addressing the special problems
  of providing health care information, counseling, and assistance to the
  rural areas of such State.
  (5) ANNUAL STATE REPORT- A State that receives a grant under paragraph
  (3) or (4) shall, not later than 180 days after receiving such grant,
  and annually thereafter, issue an annual report to the Secretary that
  includes information concerning--
  (A) the number of individuals served by the State-wide health insurance
  information, counseling and assistance program of such State;
  (B) an estimate of the amount of funds saved by the State, and by eligible
  individuals in the State, in the implementation of such program; and
  (C) the problems that eligible individuals in such State encounter in
  procuring adequate and appropriate health care coverage.
  (6) REPORT TO CONGRESS- Not later than 180 days after the date of the
  enactment of this section, and annually thereafter, the Secretary shall
  issue a report to the Committee on Finance of the Senate, the Special
  Committee on Aging of the Senate, the Committee on Ways and Means of the
  House of Representatives, the Committee on Energy and Commerce of the
  House of Representatives, and the Select Committee on Aging of the House
  of Representatives that--
  (A) summarizes the allocation of funds authorized for grants under this
  section and the expenditure of such funds;
  (B) summarizes the scope and content of training conferences convened
  under subsection (f);
  (C) outlines the problems that eligible individuals encounter in procuring
  adequate and appropriate health care coverage;
  (D) makes recommendations that the Secretary determines to be appropriate
  to address the problems described in subparagraph (C); and
  (E) in the case of the report issued 2 years after the date of enactment
  of this section, evaluates the effectiveness of counseling programs
  established under this program, and makes recommendations regarding
  continued authorization of funds for these purposes.
  (7) AUTHORIZATION OF APPROPRIATIONS FOR GRANTS- There are authorized to
  be appropriated, in equal parts from the Federal Hospital Insurance Trust
  Fund and from the Federal Supplementary Medical Insurance Trust Fund,
  $10,000,000 for each of fiscal years 1991, 1992, and 1993, to fund the
  grant programs described in this subsection.
  (l) MEDICARE AND MEDIGAP INFORMATION BY TELEPHONE- (1) Title XVIII
  (42 U.S.C. 1395 et seq.) is amended by inserting after section 1888 the
  following:
`MEDICARE AND MEDIGAP INFORMATION BY TELEPHONE
  `SEC. 1889. The Secretary shall provide information via a toll-free telephone
  number on the programs under this title and on medicare supplemental
  policies as defined in section 1882(g)(1) (including the relationship of
  State programs under title XIX to such policies).'.
  (2) The Secretary is authorized to conduct demonstration projects
  in up to 5 States for the purpose of establishing statewide toll-free
  telephone numbers for providing information on medicare benefits, medicare
  supplemental policies available in the State, and benefits under the State
  medicaid program.
SEC. 6156. TECHNICAL AND MISCELLANEOUS PROVISIONS RELATING TO PARTS A AND B.
  (a) EXTENSIONS OF EXPIRING AUTHORITIES-
  (1) PROHIBITION OF PAYMENT CYCLE CHANGES- Notwithstanding any other provision
  of law, the Secretary of Health and Human Services is not authorized to
  issue, after the date of the enactment of this Act, any final regulation,
  instruction, or other policy change which is primarily intended to have
  the effect of slowing down or speeding up claims processing, or delaying
  payment of claims, under title XVIII of the Social Security Act.
  (2) WAIVER OF LIABILITY FOR HOME HEALTH AGENCIES- Section 9305(g)(3)
  of the Omnibus Budget Reconciliation Act of 1986 is amended by striking
  `November 1, 1990' and inserting `December 31, 1995'.
  (b) APPLICATION OF HOSPITAL WAGE INDEX TO HOME HEALTH AGENCIES-
  (1) IN GENERAL- Section 1861(v)(1)(L)(iii) (42 U.S.C. 1395x(v)(1)(L)(iii))
  is amended to read as follows:
  `(iii) In establishing limits under this subparagraph for portions of
  a cost reporting period occurring during a fiscal year, the Secretary
  shall utilize a wage index equal to the area wage index applicable under
  section 1886(d)(3)(E) during the fiscal year to hospitals located in the
  geographic area in which the home health agency is located, in updating the
  wage index for establishing such limits the Secretary shall provide that
  payments to home health agencies will be no greater or lesser than such
  payments would have been without regard to the update of such wage index.'.
  (2) TRANSITION PROVISION- Notwithstanding section 1861(v)(1)(L)(iii)
  of the Social Security Act, the Secretary of Health and Human Services
  shall, in determining the limits of reasonable costs under title XVIII
  of such Act with respect to services furnished by a home health agency
  for portions of a cost reporting period occurring during a fiscal year,
  utilize a wage index equal to--
  (A) for portions of cost reporting periods beginning on or after July 1,
  1991, and on or before June 30, 1992, a combined area wage index consisting
  of--
  (i) 67 percent of the area wage index applicable under section
  1861(v)(1)(L)(iii) of such Act to such home health agency, determined
  using the survey of the 1982 wages and wage-related costs of hospitals in
  the United States conducted under such section, and
  (ii) 33 percent of the area wage index applicable under section 1886(d)(3)(E)
  of such Act to hospitals located in the geographic area in which the home
  health agency is located for discharges occurring during the fiscal year,
  determined using the survey of the 1988 wages and wage-related costs of
  hospitals in the United States conducted under such section; and
  (B) for portions of cost reporting periods beginning on or after July 1,
  1992, and on or before June 30, 1993, a combined area wage index consisting
  of--
  (i) 33 percent of the area wage index applicable under section
  1861(v)(1)(L)(iii) of such Act to such home health agency, determined
  using the survey of the 1982 wages and wage-related costs of hospitals in
  the United States conducted under such section, and
  (ii) 67 percent of the area wage index applicable under section 1886(d)(3)(E)
  of such Act to hospitals located in the geographic area in which the home
  health agency is located for discharges occurring during the fiscal year,
  determined using the survey of the 1988 wages and wage-related costs of
  hospitals in the United States conducted under such section; and
  (3) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply with
  respect to home health agency cost reporting periods beginning on or after
  July 1, 1993.
  (c) RECOGNITION OF COSTS OF HOSPITAL SUPPORTED NURSING AND ALLIED HEALTH
  EDUCATIONAL PROGRAMS AS ALLOWABLE REASONABLE COSTS-
  (1) IN GENERAL- (A) Beginning on or after October 1, 1990, all costs
  related to clinical training, as defined by the Secretary, on a hospital's
  premises for a hospital supported education program and which are incurred
  by a hospital or by an educational institution related to the hospital
  by common ownership or common control, shall be considered costs incurred
  for approved educational activities for purposes of section 1886(a)(4) of
  the Social Security Act (42 U.S.C. 1395ww(a)(4)). Subject to subparagraph
  (B), such costs shall be allowable to a hospital on a reasonable cost basis
  and shall be considered to be pass-through costs under title XVIII of such
  Act. An education program shall be deemed to be hospital supported if the
  program is--
  (i) an approved nursing or allied health education program;
  (ii) is not a hospital operated program; and
  (iii) the hospital participates in the program in conjunction with an
  educational institution.
  (B) For purposes of subparagraph (A), section 1886(a)(4) of the Social
  Security Act, and section 1861(v) of such Act, costs relating to a hospital
  supported education program shall be deemed to be reimbursable--
  (i) only to the extent that the proportion of costs claimed by a hospital for
  a hospital supported education program (which proportion shall be expressed
  as a ratio, the numerator of which is the dollar amount of support given by
  the hospital to the school in the specific 12-month period covered by the
  hospital's cost report and the denominator of which is the total allowable
  costs for inpatients hospital services irrespective of how such costs
  are paid under this title) are not greater than such proportion of costs
  claimed by such hospital (subject to the review described in paragraph
  (2)), in the cost reporting period prior to the cost reporting period
  beginning on or after October 1, 1990;
  (ii) only if the hospital is receiving a benefit for the support it
  furnishes to such program through the provision of clinical services by
  nursing or allied health students incidental to their training, or the
  hospital hires graduates from the hospital supported education program; and
  (iii) only to the extent that the cost is less than the cost the hospital
  would be expected to incur were such a hospital to operate its own similar
  program.
  (2) SPECIAL AUDIT RULE- For purposes of paragraph (1)(B)(i), the Secretary's
  determination of the initial proportion of costs (that is, those costs
  claimed in the cost reporting period prior to the cost reporting period
  beginning on or after October 1, 1990) shall be accomplished by a special
  audit (or other appropriate mechanism), which audit (or mechanism) shall
  ensure that each hospital has appropriately reported its level of support
  during such period.
  (3) PROHIBITION ON RECOUPMENT OF CERTAIN NURSING AND ALLIED EDUCATIONAL
  COSTS- (A) The Secretary of Health and Human Services (hereinafter referred
  to as the `Secretary') shall not disallow, recoup from, or otherwise
  reduce or adjust payments under title XVIII of the Social Security Act
  to hospitals with respect to claims by a hospital on its medicare costs
  reports for cost reporting periods beginning on or after October 1, 1983,
  and before October 1, 1990, relating to hospital supported education programs
  on the grounds that the costs of such programs were not allowable costs or
  were included in the definition of `operating costs of inpatient services'
  pursuant to section 1886(a)(4) of such Act, so that no pass-through of
  such costs was permitted under that section.
  (B) The Secretary shall provide that if any disallowance, recoupment,
  adjustment, or reduction in payments described in subparagraph (A) has
  occurred prior to the date of enactment of this Act, such actions shall
  be reversed and any necessary refunds or administrative adjustments shall
  be promptly made.
  (3) CONFORMING AMENDMENT- (A) Section 6205(a) of the Omnibus Budget
  Reconciliation Act of 1989 is amended by striking `(a)' and the subsection
  heading.
  (B) Section 6205(b) of such Act is hereby repealed.
  (4) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed
  as requiring the Secretary of Health and Human Services to modify those
  existing regulations or instructions which pertain to the determination
  of reasonable costs for a hospital-operated education program.
  (d) CASE MANAGEMENT DEMONSTRATION PROJECTS RESUMED-
  (1) IN GENERAL- Notwithstanding any other provision of law, the Secretary of
  Health and Human Services (in this section referred to as the `Secretary')
  shall resume the 3 case management demonstration projects described in
  paragraph (2) and approved under section 425 of the Medicare Catastrophic
  Coverage Act of 1988 (in this subsection referred to as `MCCA').
  (2) PROJECT DESCRIPTIONS- The demonstration projects referred to in paragraph
  (1) are--
  (A) the project proposed to be conducted by Providence Hospital for case
  management of the elderly at risk for acute hospitalization as described
  in Project No. 18-P-99379/5-01;
  (B) the project proposed to be conducted by the Iowa Foundation for
  Medical Care to study patients with chronic congestive conditions to
  reduce repeated hospitalizations of such patients as described in Project
  No. P-99399/4-01; and
  (C) the project proposed to be conducted by Key Care Health Resources,
  Inc., to examine the effects of case management on 2,500 high cost medicare
  beneficiaries as described in Project No. 18-P-99396/5.
  (3) TERMS AND CONDITIONS- The demonstration projects resumed pursuant to
  paragraph (1) shall be subject to the same terms and conditions established
  under section 425 of MCCA. In determining the 2-year duration period of
  a project resumed pursuant to paragraph (1), the Secretary may not take
  into account any period of time for which the project was in effect under
  section 425 of MCCA.
  (e) TREATMENT OF CERTAIN HOSPITALS WITH RESPECT TO PAYMENTS FOR GRADUATE
  MEDICAL EDUCATION COSTS- Section 1886(h)(2) (42 U.S.C. 1395ww(h)(2))
  is amended--
  (1) by inserting `(i)' after `(E)'; and
  (2) by adding at the end of subparagraph (E) the following new clause:
  `(ii) In the case of a hospital which did have an approved medical residency
  training program for a cost reporting period beginning during fiscal year
  1984, but which made a commitment to substantially expand its program
  that was not fully reflected in costs incurred during cost reporting
  periods beginning in such fiscal year, such hospital may request the use
  of an alternative cost reporting period other than that which began during
  fiscal year 1984 for purposes of determining the average amount recognized
  as reasonable medical education costs of the hospital for each full-time
  equivalent resident. The Secretary shall review each such request and
  determine whether it would be appropriate to provide for an FTE resident
  amount based on an alternative cost reporting period, based on approved
  FTE resident amounts for comparable programs. If the Secretary approves a
  request under this clause, payments based on alternative cost reporting
  periods for a hospital described under this clause, shall begin for the
  first cost reporting period for which the Secretary determines the hospital
  has substantially implemented its program expansion.'.
  (f) HCFA SERVICE FELLOWS PROGRAM-
  (1) IN GENERAL- Section 1117 (42 U.S.C. 1317) is amended--
  (A) by inserting `; HCFA SERVICE FELLOWS PROGRAM' at the end of the heading,
  (B) by inserting `(a)' after `SEC. 1117.', and
  (C) by adding at the end the following new subsection:
  `(b)(1) The Administrator may establish an HCFA Service Fellows Program
  under which up to 10 individuals from the private sector or academia who
  have demonstrated exceptional competence or highly specialized skills
  or knowledge may conduct health-care related research, studies, and
  investigations within the Health Care Financing Administration.
  `(2) Qualified individuals may be appointed by the Administrator (without
  regard to rules respecting appointments, classification, and pay rates in
  the competitive service) to serve as HCFA Service Fellows for a period of
  not to exceed 2 years (which may, in individual cases under exceptional
  circumstances, be extended for up to 2 additional years).
  `(3) Individuals appointed as HCFA Service Fellows shall not be included
  in any determination of the number of full-time equivalent employees of
  the Department for the purpose of any limitation on the number of such
  employees established by any law.
  `(4) The Administrator is not authorized to expend more than $750,000
  annually on the costs of the HCFA Service Fellows Program (including the
  costs of salaries under the program)'.
  (g) SELF-REFERRAL TECHNICAL- (1) Section 1877(b) (42 U.S.C. 1395nn(b))
  is amended by redesignating paragraph (4) as paragraph (5) and inserting
  after paragraph (3) the following:
  `(4) SERVICES UNRELATED TO INVESTMENT INTEREST OR COMPENSATION ARRANGEMENT-
  In the case of clinical laboratory services furnished by a hospital
  pursuant to a referral by a physician who has a financial relationship
  with the hospital that does not involve the provision of such services.'.
  (2) The amendment made by paragraph (1) shall be effective as if included
  in the enactment of the Omnibus Budget Reconciliation Act of 1989.
SEC. 6157. LIVING WILLS AND OTHER ADVANCE DIRECTIVES.
  (a) MEDICARE PROVIDER AGREEMENTS-
  (1) IN GENERAL- Section 1866 (42 U.S.C. 1395cc(a)(1)) is amended--
  (A) in subsection (a)(1)--
  (i) by striking `and' at the end of subparagraph (O),
  (ii) by striking the period at the end of subparagraph (P) and inserting
  `, and', and
  (iii) by inserting after subparagraph (P) the following new subparagraph:
  `(Q) in the case of hospitals, skilled nursing facilities, home health
  agencies, and hospice programs, to comply with the requirement of subsection
  (f) (relating to maintaining written policies and procedures respecting
  advance directives).'; and
  (B) by inserting after subsection (e) the following new subsection:
  `(f)(1) For purposes of subsection (a)(1)(Q) and sections 1819(c)(1)(E),
  1833(r), 1876(c)(8), and 1891(a)(6), the requirement of this subsection
  is that a provider of services or prepaid or eligible organization (as
  the case may be) maintain written policies and procedures with respect to
  all adult individuals receiving medical care by or through the provider
  or organization--
  `(A) to provide written information to each such individual concerning--
  `(i) an individual's rights under State law (whether statutory or as
  recognized by the courts of the State) to make decisions concerning such
  medical care, including the right to accept or refuse medical or surgical
  treatment and the right to formulate advance directives (as defined in
  paragraph (3)), and
  `(ii) the policies of the provider or organization respecting the
  implementation of such rights;
  `(B) to inquire of an individual (or a family member) whether the individual
  has executed an advance directive and document in the individual's medical
  record the response to the inquiry;
  `(C) not to condition the provision of care or otherwise discriminate
  against an individual based on whether or not the individual has executed
  an advance directive;
  `(D) to ensure compliance with requirements of State law respecting advance
  directives at facilities of the provider or organization; and
  `(E) to provide (individually or with others) for education for staff on
  issues concerning advance directives.
Subparagraph (C) shall not be construed as requiring the provision of care
which conflicts with an advance directive.
  `(2) In this subsection, the term `advance directive' means a written
  instruction, such as a living will or durable power of attorney for health
  care, recognized under State law and relating to the provision of such
  care when the individual is incapacitated.'.
  (2) APPLICATION TO PREPAID ORGANIZATIONS-
  (A) ELIGIBLE ORGANIZATIONS- Section 1876(c) (42 U.S.C. 1395mm(c)) is
  amended by adding at the end the following new paragraph:
  `(8) A contract under this section shall provide that the eligible
  organization shall meet the requirement of section 1866(f) (relating to
  maintaining written policies and procedures respecting advance directives).'.
  (B) OTHER PREPAID ORGANIZATIONS- Section 1833 (42 U.S.C. 1395l) is amended
  by adding at the end the following new subsection:
  `(r) The Secretary may not provide for payment under subsection (a)(1)(A)
  with respect to an organization unless the organization provides assurances
  satisfactory to the Secretary that the organization meets the requirement
  of section 1866(f) (relating to maintaining written policies and procedures
  respecting advance directives).'.
  (3) CONFORMING AMENDMENTS-
  (A) Section 1819(c)(1) (42 U.S.C. 1395i-3(c)(1)) is amended by adding at
  the end the following new subparagraph:
  `(E) INFORMATION RESPECTING ADVANCE DIRECTIVES- A skilled nursing facility
  must comply with the requirement of section 1866(f) (relating to maintaining
  written policies and procedures respecting advance directives).'.
  (B) Section 1891(a) (42 U.S.C. 1395bbb(a)) is amended by adding at the
  end the following:
  `(6) The agency complies with the requirement of section 1866(f) (relating to
  maintaining written policies and procedures respecting advance directives).'.
  (4) EFFECTIVE DATES-
  (A) The amendments made by paragraphs (1) and (3) shall apply with respect
  to services furnished on or after the first day of the first month beginning
  more than 1 year after the date of the enactment of this Act.
  (B) The amendments made by paragraph (2) shall apply to contracts
  under section 1876 of the Social Security Act and payments under section
  1833(a)(1)(A) of such Act as of the first day of the first month beginning
  more than 1 year after the date of the enactment of this Act.
  (b) MEDICAID STATE PLAN REQUIREMENTS-
  (1) IN GENERAL- Section 1902 (42 U.S.C. 1396a(a)) is amended--
  (A) in subsection (a)--
  (i) by striking `and' at the end of paragraph (52),
  (ii) by striking the period at the end of paragraph (53), and
  (iii) by inserting after paragraph (53) the following new paragraphs:
  `(54) provide that each hospital, nursing facility, provider of home health
  care or personal care services, hospice program, or health maintenance
  organization (as defined in section 1903(m)(1)(A)) receiving funds under
  the plan shall comply with the requirement of subsection (s); and
  `(55) provide that the State, acting through a State agency, association, or
  other private entity, develop a written description of the law of the State
  (whether statutory or common law) concerning advance directives that would
  be distributed by providers under the requirements of subsections.'; and
  (B) by adding at the end the following new subsection:
  `(s)(1) For purposes of subsection (a)(54) and sections 1903(m)(1)(A) and
  1919(c)(2)(E), the requirement of this subsection is that a provider or
  organization (as the case may be) maintain written policies and procedures
  with respect to all adult individuals receiving medical care by or through
  the provider or organization--
  `(A) to provide information to each such individual concerning--
  `(i) an individual's rights under State law (whether statutory or as
  recognized by the courts of the State) to make decisions concerning such
  medical care, including the right to accept or refuse medical or surgical
  treatment and the right to formulate advance directives (as defined in
  paragraph (3)), and
  `(ii) the hospital's written policies respecting the implementation of
  such rights;
  `(B) to document in the individual's medical record whether or not the
  individual has executed an advance directive;
  `(C) not to condition the provision of care or otherwise discriminate
  against an individual based on whether or not the individual has executed
  an advance directive;
  `(D) to ensure compliance with requirements of State law respecting advance
  directives; and
  `(E) to provide (individually or with others) for education for staff and
  the community on issues concerning advance directives.
Subparagraph (C) shall not be construed as requiring the provision of care
which conflicts with an advance directive.
  `(2) In this subsection, the term `advance directive' means a written
  instruction, such as a living will or durable power of attorney for health
  care, recognized under State law and relating to the provision of such
  care when the individual is incapacitated.'.
  (2) CONFORMING AMENDMENTS-
  (A) Section 1903(m)(1)(A) (42 U.S.C. 1396b(m)(1)(A)) is amended--
  (i) by inserting `meets the requirement of section 1902(s)' after `which'
  the first place it appears, and
  (ii) by inserting `meets the requirement of section 1902(a) and' after
  `which' the second place it appears.
  (B) Section 1919(c)(2) of such Act (42 U.S.C. 1396r(c)(2)) is amended by
  adding at the end the following new subparagraph:
  `(E) INFORMATION RESPECTING ADVANCE DIRECTIVES- A nursing facility must
  comply with the requirement of section 1902(s) (relating to maintaining
  written policies and procedures respecting advance directives).'.
  (3) EFFECTIVE DATE- The amendments made by this subsection shall apply
  with respect to services furnished on or after the first day of the first
  month beginning more than 1 year after the date of the enactment of this Act.
  (c) STUDY-
  (1) IN GENERAL- The Secretary of Health and Human Services (hereafter in
  this section referred to as the `Secretary') shall conduct a study or enter
  into an agreement with a private entity to conduct a study and submit a
  report to Congress with respect to the implementation of directed health
  care decisions. Such study shall--
  (A) evaluate the experience of practitioners, providers, and government
  regulators in complying with the provisions of this section;
  (B) assess the awareness and utilization of advance directives as a result
  of this section;
  (C) investigate methods of encouraging reciprocity among States in the
  enforcement of advance directives;
  (D) report on the manner in which treatment decisions are made in the
  absence of an advance directive; and
  (E) make such recommendations for legislation as may be appropriate to
  carry out the purposes of this Act.
  (2) EFFECTIVE DATE- The study and report provided for in this subsection
  shall be submitted to Congress no later than the date which is 4 years
  after the date of enactment of this section.
  (d) PUBLIC EDUCATION CAMPAIGN-
  (1) IN GENERAL- The Secretary, no later than 6 months after the date of
  enactment of this section, shall develop and implement a national campaign
  to inform the public of the option to execute advance directives and of
  a patient's right to participate and direct health care decisions.
  (2) DEVELOPMENT AND DISTRIBUTION OF INFORMATION- The Secretary shall develop
  or approve nationwide informational materials that would be distributed by
  providers under the requirements of this section, to inform the public and
  the medical and legal profession of each person's right to make decisions
  concerning medical care, including the right to accept or refuse medical
  or surgical treatment, and the existence of advance directives.
  (3) PROVIDING ASSISTANCE TO STATES- The Secretary shall assist appropriate
  State agencies, associations, or other private entities in developing the
  State-specific documents that would be distributed by providers under the
  requirements of this section. The Secretary shall further assist appropriate
  State agencies, associations, or other private entities in ensuring that
  providers are provided a copy of the documents that are to be distributed
  under the requirements of the section.
  (4) DUTIES OF SECRETARY- The Secretary shall mail information to Social
  Security recipients, add a page to the medicare handbook with respect to
  the provisions of this section, and provide for and install a nationwide,
  toll-free informational number to provide State agencies, private entities,
  and medicare and medicaid eligible individuals with information regarding
  the option to execute advance directives and the rights of individuals
  under the provisions of this section.
PART 4--PROVISIONS RELATING TO PREMIUMS, DEDUCTIBLES, AND COINSURANCE
SEC. 6161. PART B PREMIUM.
  Section 1839(e) is amended by inserting `and for each month after December
  1992 and before January 1996' after `January 1991' each time it appears.
SEC. 6162. CHANGE IN PART B DEDUCTIBLE.
  Section 1833(b) (42 U.S.C. 1395l) is amended by inserting after `$75'
  the following: `for calendar years before 1991 and after 1995, and $150
  for years after 1990 and before 1996'.
SEC. 6163. 20 PERCENT COINSURANCE FOR CLINICAL DIAGNOSTIC LABORATORY TESTS.
  (a) IN GENERAL- Section 1833 of the Social Security Act (42 U.S.C. 1395l)
  is amended--
  (1) in subsection (a)(1)(D)(i)), by striking `in the case of' and all that
  follows through `basis, or',
  (2) in subsection (a)(2)(D)(i), by striking `in the case of' and all that
  follows through `1866, or', and
  (3) in subsection (b)(3), by striking `(A) under subsection (a)(1)(D)'
  and all that follows through `(B)'.
  (b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to
  clinical diagnostic laboratory tests performed on or after January 1, 1991.
Subtitle C--Medicaid
PART I--PRESCRIPTION DRUG DISCOUNTS
SEC. 6201. REIMBURSEMENT FOR PRESCRIBED DRUGS UNDER MEDICAID.
  (a) IN GENERAL-
  (1) DENIAL OF FEDERAL FINANCIAL PARTICIPATION UNLESS REBATE AGREEMENTS AND
  DRUG USE REVIEW IN EFFECT- Section 1903(i) (42 U.S.C. 1396b(i)) is amended--
  (A) by striking the period at the end of paragraph (9) and inserting `;
  or', and
  (B) by inserting after paragraph (9) the following new paragraph:
  `(10) with respect to covered outpatient drugs of a manufacturer dispensed
  in any State unless, (A) except as provided in section 1927(a)(3), the
  manufacturer complies with the rebate requirements of section 1927(a)
  with respect to the drugs so dispensed in all States, and (B) effective
  January 1, 1993, the State provides for drug use review in accordance with
  section 1927(g).'.
  (2) PROHIBITING STATE PLAN DRUG ACCESS LIMITATIONS FOR DRUGS COVERED
  UNDER A REBATE AGREEMENT- Section 1902(a) of such Act (42 U.S.C. 1396a(a))
  is amended--
  (A) by striking `and' at the end of paragraph (52),
  (B) by striking the period at the end of paragraph (53) and inserting `;
  and', and
  (C) by inserting after paragraph (53) the following new paragraph:
  `(54)(A) provide that, any formulary or similar restriction (except as
  provided in section 1927(d)) on the coverage of covered outpatient drugs
  under the plan  shall permit the coverage of covered outpatient drugs of any
  manufacturer which has entered into and complies with an agreement under
  section 1927(a), which are prescribed for a medically accepted indication
  (as defined in subsection 1927(k)(6)), and
  `(B) comply with the reporting requirements of section 1927(b)(2)(A)
  and the requirements of subsections (d) and (g) of section 1927.'.
  (3) REBATE AGREEMENTS FOR COVERED OUTPATIENT DRUGS, DRUG USE REVIEW, AND
  RELATED PROVISIONS- Title XIX of the Social Security Act is amended by
  redesignating section 1927 as section 1928 and by inserting after section
  1926 the following new section:
`PAYMENT FOR PRESCRIBED DRUGS
  `SEC. 1927. (a) REQUIREMENT FOR REBATE AGREEMENT-
  `(1) IN GENERAL- In order for payment to be available under section 1903(a)
  for covered outpatient drugs of a manufacturer, the manufacturer must have
  entered into and have in effect a rebate agreement described in subsection
  (b) with the Secretary, on behalf of States (except that, the Secretary may
  authorize a State to enter directly into agreements with manufacturer). If
  a manufacturer has not entered into such an agreement before January 1,
  1991, such an agreement, subsequently entered into, shall not be effective
  until the first day of the calendar quarter that begins more than 60 days
  after the date the agreement is entered into.
  `(2) EFFECTIVE DATE- Paragraph (1) shall first apply to drugs dispensed
  under this title on or after January 1, 1991.
  `(3) AUTHORIZING PAYMENT FOR DRUGS NOT COVERED UNDER REBATE AGREEMENTS-
  Paragraph (1), and section 1903(i)(10)(A), shall not apply to the dispensing
  of a single source drug or innovator multiple source drug if (A) the State
  has made a determination that the availability of the drug is essential to
  the health of beneficiaries under the State plan for medical assistance; and
  (B)(i) the physician has obtained approval for use of the drug in advance of
  its dispensing in accordance with a prior authorization program described
  in subsection (d), or (ii) the Secretary has reviewed and approved the
  State's determination under subparagraph (A).
  `(4) EFFECT ON EXISTING AGREEMENTS- In the case of a rebate agreement in
  effect between a State and a manufacturer on the date of the enactment of
  this section, such agreement, for the initial agreement period specified
  therein, shall be considered to be a rebate agreement in compliance with
  this section with respect to that State, if the State agrees to report
  to the Secretary any rebates paid pursuant to the agreement. If the State
  establishes to the satisfaction of the Secretary that the agreement provides
  for rebates that are at least as large as the rebates otherwise required
  under this section, and the State agrees to report any rebates under the
  agreement to the Secretary, the agreement shall be considered to be a
  rebate agreement in compliance with the section for the renewal periods
  of such agreement.
  `(b) TERMS OF REBATE AGREEMENT-
  `(1) PERIODIC REBATES-
  `(A) IN GENERAL- A rebate agreement under this subsection shall require
  the manufacturer to provide, to each State plan approved under this title,
  a rebate each calendar quarter (or periodically in accordance with a
  schedule specified by the Secretary) in an amount specified in subsection
  (c) for covered outpatient drugs of the manufacturer dispensed under
  the plan during the quarter (or such other period as the Secretary may
  specify). Such rebate shall be paid by the manufacturer not later than 30
  days after the date of receipt of the information described in paragraph
  (2) for the period involved.
  `(B) OFFSET AGAINST MEDICAL ASSISTANCE- Amounts received by a State under
  this section (or under an agreement authorized by the Secretary under
  subsection (a)(1) or an agreement described in subsection (a)(4)) in
  any quarter shall be considered to be a reduction in the amount expended
  under the State plan in the quarter for medical assistance for purposes
  of section 1903(a)(1).
  `(2) STATE PROVISION OF INFORMATION-
  `(A) STATE RESPONSIBILITY- Each State agency under this title shall
  report to each manufacturer not later than 60 days after the end of each
  calendar quarter and in a form consistent with a standard reporting format
  established by the Secretary, information on the total number of dosage
  units of each covered outpatient drug dispensed under the plan during the
  quarter, and shall promptly transmit a copy of such report to the Secretary.
  `(B) AUDITS- A manufacturer may audit the information provided (or required
  to be provided) under subparagraph (A). Adjustments to rebates shall be
  made to the extent that information indicates that utilization was greater
  or less than the amount previously specified.
  `(C) NOTICE TO SECRETARY- Each State agency shall notify the Secretary
  within 30 days after the date each rebate is received under this section.
  `(3) MANUFACTURER PROVISION OF PRICE INFORMATION-
  `(A) IN GENERAL- Each manufacturer with an agreement in effect under this
  section shall report to the Secretary--
  `(i) not later than 30 days after the last day of each quarter (beginning
  on or after January 1, 1991), on the average manufacturer price (as defined
  in subsection (k)(1)) and, effective for quarters beginning on or after
  January 1, 1994 (for single source drugs and innovator multiple source
  drugs), the manufacturer's best price (as defined in subsection (c)(2)(B))
  for covered outpatient drugs for the quarter, and
  `(ii) not later than 30 days after the date of entering into an agreement
  under this section on the average manufacturer price (as defined in
  subsection (k)(1)) as of October 1, 1990 for each of the manufacturer's
  covered outpatient drugs.
  `(B) VERIFICATION SURVEYS OF AVERAGE MANUFACTURER PRICE- The Secretary may
  survey wholesalers and manufacturers that directly distribute their covered
  outpatient drugs, when necessary, to verify average manufacturer prices
  reported under subparagraph (A). The Secretary may impose a civil monetary
  penalty in an amount not to exceed $10,000 on a wholesaler, manufacturer,
  or direct seller, if the wholesaler, manufacturer, or direct seller of a
  covered outpatient drug refuses a request for information about charges or
  prices by the Secretary in connection with a survey under this subparagraph
  or knowingly provides false information. The provisions of section 1128A
  (other than subsections (a) and (b)) shall apply to a civil money penalty
  under this subparagraph in the same manner as such provisions apply to a
  penalty or proceeding under section 1128A(a).
  `(C) PENALTIES-
  `(i) FAILURE TO PROVIDE TIMELY INFORMATION- In the case of a manufacturer
  with an agreement under this section that fails to provide information
  required under subparagraph (A) on a timely basis, the amount of the rebate
  required under the agreement shall be increased by $10,000 for each day in
  which such information has not been provided, and, if such information is
  not reported within 90 days of the deadline imposed, the agreement shall
  be suspended for services furnished after the end of such 90-day period
  and until the date such information is reported (but in no case shall such
  suspension be for a period of less than 30 days).
  `(ii) FALSE INFORMATION- Any manufacturer with an agreement under this
  section that knowingly provides false information is subject to a civil
  money penalty in an amount not to exceed $100,000 for each item of false
  information. Such civil money penalties are in addition to other penalties
  as may be prescribed by law. The provisions of section 1128A (other than
  subsections (a) and (b)) shall apply to a civil money penalty under this
  subparagraph in the same manner as such provisions apply to a penalty or
  proceeding under section 1128A(a).
  `(D) CONFIDENTIALITY OF INFORMATION- Notwithstanding any other provision
  of law, information disclosed by manufacturers or wholesalers under this
  paragraph is confidential and shall not be disclosed by the Secretary or
  a State agency (or contractor therewith) in a form which discloses the
  identity of a specific manufacturer or wholesaler, except as the Secretary
  determines to be necessary to carry out this section and to permit the
  Comptroller General to review the information provided.
  `(4) LENGTH OF AGREEMENT-
  `(A) IN GENERAL- A rebate agreement shall be effective for an initial
  period of no less than 1 year and shall be automatically renewed for a
  period of no less than one year unless terminated under subparagraph (B).
  `(B) TERMINATION-
  `(i) BY THE SECRETARY- The Secretary may provide for termination of a rebate
  agreement for violation of the requirements of the agreement or other good
  cause shown. Such termination shall not be effective earlier than 60 days
  after the date of notice of such termination. The Secretary shall provide,
  upon request, a manufacturer with a hearing concerning such a termination,
  but such hearing shall not delay the effective date of the termination.
  `(ii) BY A MANUFACTURER- A manufacturer may terminate a rebate agreement
  under this section for any reason. Any such termination shall not be
  effective until such period after the date of the notice as the Secretary
  may provide (but not beyond the term of the agreement).
  `(iii) EFFECTIVENESS OF TERMINATION- Any termination under this subparagraph
  shall not affect rebates due under the agreement before the effective date
  of its termination.
  `(C) DELAY BEFORE REENTRY- In the case of any rebate agreement with a
  manufacturer under this section which is terminated, another such agreement
  with the manufacturer (or a successor manufacturer) may not be entered
  into until a period of 1 calendar quarter has elapsed since the date of
  the termination, unless the Secretary finds good cause for an earlier
  reinstatement of such an agreement.
  `(c) Amount of Rebate-
  `(1) BASIC REBATE FOR SINGLE SOURCE DRUGS AND INNOVATOR MULTIPLE SOURCE
  DRUGS- Except as otherwise provided in this subsection, the amount of the
  rebate to a State for a calendar quarter (or other period specified by
  the Secretary) with respect to single source drugs and innovator multiple
  source drugs shall be equal to the product of--
  `(A)(i) for quarters (or periods) beginning after December 31, 1990, and
  before January 1, 1994, 15 percent of the average manufacturer price for
  each dosage form and strength of such drugs (after deducting customary
  prompt payment discounts) for the quarter (or other period), and
  `(ii) for quarters (or other periods) beginning after December 31, 1993,
  the greater of--
  `(I) the difference between the average manufacturer price for a drug and
  85 percent of such price, or
  `(II) the difference between the average manufacturer price for a drug
  and the best price (as defined in paragraph (2)(B)) for such quarter
  (or period) for such drug, and
  `(B) the number of units of such form and dosage dispensed under the plan
  under this title in the quarter (or other period) reported by the State
  under subsection (b)(2).
  `(2) ADDITIONAL REBATE FOR SINGLE SOURCE AND INNOVATOR MULTIPLE SOURCE DRUGS-
  (A) The Secretary shall establish a method of adjusting the basic rebate
  specified under paragraph (1) for single source and innovator multiple
  source drugs of a manufacturer to ensure that a manufacturer's prices for
  such drugs to a State plan approved under this title, determined on an
  aggregate weighted average basis, using the average manufacturer price for
  each such drug, do not increase by a percentage that is greater than the
  increase in the Consumer Price Index for all urban consumers (U.S. average)
  from October 1, 1990 to the month before the beginning of the calendar
  quarter (or other period) involved.
  `(B) In this subsection, the term `best price' means, with respect to a
  single source drug or innovator multiple source drug of a manufacturer, the
  lowest price available from the manufacturer to any wholesaler, retailer,
  nonprofit entity, or governmental entity within the United States (excluding
  depot prices of any agency of the Federal Government). The best price shall
  be inclusive of cash discounts, free goods, volume discounts, and rebates
  (other than rebates under this section) and shall be determined without
  regard to special packaging, labeling, or identifiers on the dosage form
  or product or package, and shall not take into account prices that are
  merely nominal in amount.
  `(3) REBATE FOR OTHER DRUGS- The amount of the rebate to a State for a
  calendar quarter (or other period specified by the Secretary) with respect
  to covered outpatient drugs (other than single source drugs and innovator
  multiple source drugs) shall be equal to the product of--
  `(A) 12 percent of the average manufacturer price for each dosage form and
  strength of such drugs (after deducting customary prompt payment discounts)
  for the quarter (or other period), and
  `(B) the number of units of such form and dosage dispensed under the plan
  under this title in the quarter (or other period) reported by the State
  under subsection (b)(2).
  `(d) LIMITATIONS ON COVERAGE OF DRUGS-
  `(1) PERMISSIBLE RESTRICTIONS- (A) Except as provided in paragraph (6),
  but subject to paragraph (5), a State may subject to prior authorization
  any covered outpatient drug.
  `(B) A State may exclude or otherwise restrict coverage of a covered
  patient drug if--
  `(i) the prescribed use is not for a medically accepted indication (as
  defined in (k)(6));
  `(ii) the drug is contained in the list referred to in paragraph (2); or
  `(iii) the drug is subject to such restrictions pursuant to an agreement
  between a manufacturer and a State authorized by the Secretary under
  subsection (a)(1) or in effect pursuant to subsection (a)(4).
  `(2) LIST OF DRUGS SUBJECT TO RESTRICTION- The following drugs or classes
  of drugs, or their medical uses, may be excluded from coverage or otherwise
  restricted:
  `(A) Agents when used for anorexia or weight gain that are not approved
  for such use by the FDA.
  `(B) Agents when used to promote fertility.
  `(C) Agents when used for cosmetic purposes or hair growth.
  `(D) Agents when used for the symptomatic relief of cough and colds.
  `(E) Agents when used to promote smoking cessation.
  `(F) Prescription vitamins and mineral products, except prenatal vitamins
  and fluoride preparations.
  `(G) Nonprescription drugs.
  `(H) Covered outpatient drugs which the manufacturer seeks to require
  as a condition of sale that associated tests or monitoring services be
  purchased exclusively from the manufacturer or its designee.
  `(I) Drugs described in section 107(c)(3) of the Drug Amendments of 1962
  and identical, similar, or related drugs (within the meaning of section
  310.6(b)(1) of title 21 of the Code of Federal Regulations (`DESI' drugs)).
  `(J) Barbiturates.
  `(3) UPDATE OF DRUG LISTINGS- The Secretary shall (except with respect to
  new drugs approved by the FDA for the first 12 months following the date of
  approval of such drugs shall not be subject to being listed in paragraph
  (2) under the provisions of this paragraph), by regulation, periodically
  update the list of drugs described in paragraph (2) or classes of drugs,
  or their medical uses, which the Secretary, in consultation with the
  Commissioner of the Food and Drug Administration, has determined to be of
  marginal clinical value to beneficiaries, or, based on data collected by
  a State's medical assistance program's surveillance and utilization review
  program, to be subject to clinical abuse or inappropriate use.
  `(4) INNOVATOR MULTIPLE-SOURCE DRUGS- Innovator multiple-source drugs
  shall be treated as under otherwise applicable law and regulation.
  `(5) PRIOR AUTHORIZATION PROGRAMS- A State plan under this title may not
  require, as a condition of coverage or payment for a covered outpatient
  drug for which Federal financial participation is available in accordance
  with this section, the approval of the drug before its dispensing for any
  medically accepted indication (as defined in subsection (k)(6)) unless
  the system providing for such approval--
  `(A) is available to physicians at least 10 hours each weekday, and provides
  for appropriate accommodations for obtaining prior authorization during
  other times;
  `(B) provides response by telephone or other telecommunication device
  within 24 hours of a request for prior authorization; and
  `(C) except with respect to the drugs on the list referred to in paragraph
  (2), provides for the dispensing of at least a 72-hour supply of a covered
  outpatient prescription drug in an emergency situation (as defined by
  the Secretary).
  `(6) TREATMENT OF NEW DRUGS- A State may not exclude for coverage, subject
  to prior authorization, or otherwise restrict any new biological or drug
  approved by the Food and Drug Administration after the date of enactment
  of this section, for a period of 1 year after such approval.
  `(7) OTHER PERMISSIBLE RESTRICTIONS- A State may impose limitations,
  with respect to all such drugs in a therapeutic class, on the minimum or
  maximum quantities per prescription or on the number of refills, provided
  such limitations are necessary to discourage waste.
Nothing in this section shall restrict the ability of a State to address
individual instances of fraud or abuse in any manner authorized under the
Social Security Act.
  `(8) DELAYED EFFECTIVE DATE- The provisions of paragraph (5) shall become
  effective with respect to drugs dispensed under this title on or after
  July 1, 1991.
  `(e) DENIAL OF FEDERAL FINANCIAL PARTICIPATION IN CERTAIN CASES- The
  Secretary shall provide that no payment shall be made to a State under
  section 1903(a) for an innovator multiple-source drug dispensed on or after
  July 1, 1991, if, under applicable State law, a less expensive noninnovator
  multiple source drug (other than the innovator multiple-source drug)
  could have been dispensed consistent with such law.
  `(f) PHARMACY REIMBURSEMENT-
  `(1) PAYMENT TO PHARMACISTS-
  `(A) IN GENERAL- Beginning fiscal year 1991 and ending September 30, 1993,
  each State plan under this title shall provide, after the end of each
  fiscal year and a lump-sum payment, for a payment to pharmacies dispensing
  covered outpatient drugs under this title during the fiscal year.
  `(B) AMOUNT OF PAYMENT- The amount of the payment under this subsection
  for any fiscal year to a pharmacist shall bear the same ratio to 5 percent
  of the total amount of rebates received under this section by the State
  in the fiscal year involved, as the ratio of the number prescriptions
  filled by the pharmacy under this title in the fiscal year bears to the
  total of such number for all pharmacies in the State in the fiscal year,
  and will be made within 60 days after the end of each fiscal year.
  `(2) NO REDUCTIONS IN REIMBURSEMENT LIMITS- Prior to April 1, 1993, no
  changes may be made by the Secretary or a State to the formula used to
  determine the reimbursement limits in effect under this title as of August
  1, 1990, which would result in a reduction in the limit relative to either
  the ingredient cost portion or the dispensing fee portion of the formula,
  for covered outpatient drugs.
  `(3) ESTABLISHMENT OF UPPER PAYMENT LIMITS- HCFA shall establish Federal
  upper limits for all multiple source drugs for which the FDA has rated
  three or more therapeutically and pharmaceutically equivalent, regardless
  of whether all such additional formulations are rated as such.
  `(g) DRUG USE REVIEW-
  `(1) IN GENERAL-
  `(A) In order to meet the requirement of section 1903(i)(10)(B), a State
  shall provide, by not later than January 1, 1993, for a drug use review
  program described in paragraph (2) for covered outpatient drugs in order to
  assure that prescriptions (i) are appropriate, (ii) are medically necessary,
  and (iii) are not likely to result in adverse medical results. The program
  shall be designed to educate physicians and pharmacists to identify
  and reduce the frequency of patterns of fraud, abuse, gross overuse, or
  inappropriate or medically unnecessary care, among physicians, pharmacists,
  and patients, or associated with specific drugs or groups of drugs, as well
  as potential and actual severe adverse reactions to drugs including education
  on therapeutic appropriateness, overutilization and underutilization,
  appropriate use of generic products, therapeutic duplication, drug-disease
  contraindications, drug-drug interactions, incorrect drug dosage or duration
  of drug treatment, drug-allergy interactions, and clinical abuse/misuse.
  `(B) The program shall assess data on drug use against predetermined
  standards, consistent with the following:
  `(i) compendia which shall consist of the following:
  `(I) American Hospital Formulary Service Drug Information;
  `(II) United States Pharmacopeia-Drug Information; and
  `(III) American Medical Association Drug Evaluations; and
  `(ii) the peer-reviewed medical literature.
  `(C) The Secretary, under the procedures established in section 1903, shall
  pay to each State an amount equal to 75 per centum of so much of the sums
  expended by the State plan during calendar years 1991 through 1993 as the
  Secretary determines is attributable to the statewide adoption of a drug
  use review program which conforms to the requirements of this subsection.
  `(D) States shall not be required to perform additional drug use reviews
  with respect to drugs dispensed to residents of nursing facilities which
  are in compliance with the drug regimen review procedures prescribed by
  the Secretary for such facilities in regulations implementing section 1919,
  currently at section 483.60 of title 42, Code of Federal Regulations.
  `(2) DESCRIPTION OF PROGRAM- Each drug use review program shall meet the
  following requirements for covered outpatient drugs:
  `(A) PROSPECTIVE DRUG REVIEW- (i) The State plan shall provide for a
  review of drug therapy before each prescription is filled or delivered
  to an individual receiving benefits under this title, typically at the
  point-of-sale or point of distribution. The review shall include screening
  for potential drug therapy problems due to therapeutic duplication,
  drug-disease contraindications, drug-drug interactions (including
  interactions with nonprescription or over-the-counter drugs), incorrect
  drug dosage or duration of drug treatment, drug-allergy interactions, and
  clinical abuse/misuse. Each State shall use the compendia and literature
  referred to in paragraph (1)(B) as its source of standards for such review.
  `(ii) As part of the State's prospective drug use review program under this
  subparagraph applicable State law shall establish standards for counseling
  of individuals receiving benefits under this title by pharmacists which
  includes at least the following:
  `(I) A reasonable effort must be made by the pharmacist to counsel such
  individual or caregiver of such individual face-to-face whenever possible,
  and otherwise to do so by telephone.
  `(II) The pharmacist must offer to discuss with each individual receiving
  benefits under this title or caregiver of such individual (in person,
  whenever practicable, or through access to a telephone service which
  is toll-free for long-distance calls) who presents a prescription,
  matters which in the exercise of the pharmacist's professional judgment
  (consistent with State law respecting the provision of such information),
  the pharmacist deems significant including the following:
  `(aa) The name and description of the medication.
  `(bb) The route, dosage form, dosage, route of administration, and duration
  of drug therapy.
  `(cc) Special directions and precautions for preparation, administration
  and use by the patient.
  `(dd) Common severe side or adverse effects or interactions and therapeutic
  contraindications that may be encountered, including their avoidance,
  and the action required if they occur.
  `(ee) Techniques for self-monitoring drug therapy.
  `(ff) Proper storage.
  `(gg) Prescription refill information.
  `(hh) Action to be taken in the event of a missed dose.
  `(III) A reasonable effort must be made by the pharmacist to obtain, record,
  and maintain at least the following information regarding individuals
  receiving benefits under this title:
  `(aa) Name, address, telephone number, date of birth (or age) and gender.
  `(bb) Individual history where significant, including disease state or
  states, known allergies and drug reactions, and a comprehensive list of
  medications and relevant devices.
  `(cc) Pharmacist comments relevant to the individuals drug therapy.
Nothing in this clause shall be construed as requiring a pharmacist to
provide consultation when an individual receiving benefits under this title
or caregiver of such individual refuses such consultation.
  `(B) RETROSPECTIVE DRUG USE REVIEW- The program shall provide, through
  its mechanized drug claims processing and information retrieval systems
  (approved by the Secretary under section 1903(r)) or otherwise, for the
  ongoing periodic examination of claims data and other records in order
  to identify patterns of fraud, abuse, gross overuse, or inappropriate or
  medically unnecessary care, among physicians, pharmacists and individuals
  receiving benefits under this title, or associated with specific drugs or
  groups of drugs.
  `(C) APPLICATION OF STANDARDS- The program shall, on an ongoing basis,
  assess data on drug use against explicit predetermined standards (using
  the compendia and literature referred to in subsection (1)(B) as the source
  of standards for such assessment) including but not limited to monitoring
  for therapeutic appropriateness, overutilization and underutilization,
  appropriate use of generic products, therapeutic duplication, drug-disease
  contraindications, drug-drug interactions, incorrect drug dosage or
  duration of drug treatment, and clinical abuse/misuse and, as necessary,
  introduce remedial strategies, in order to improve the quality of care
  and to conserve program funds or personal expenditures.
  `(D) EDUCATIONAL PROGRAM- The program shall, through its State drug
  use review board established under paragraph (3), either directly or
  through contracts with accredited health care educational institutions,
  State medical societies or State pharmacists associations/societies or
  other organizations as specified by the State, and using data provided
  by the State drug use review board on common drug therapy problems,
  provide for active and ongoing educational outreach programs (including
  the activities described in paragraph (3)(C)(iii) of this subsection)
  to educate practitioners on common drug therapy problems with the aim of
  improving prescribing or dispensing practices.
  `(3) STATE DRUG USE REVIEW BOARD-
  `(A) ESTABLISHMENT- Each State shall provide for the establishment of a
  drug use review board (hereinafter referred to as the `DUR Board') either
  directly or through a contract with a private organization.
  `(B) MEMBERSHIP- The membership of the DUR Board shall include health care
  professionals who have recognized knowledge and expertise in one or more
  of the following:
  `(i) The clinically appropriate prescribing of covered outpatient drugs.
  `(ii) The clinically appropriate dispensing and monitoring of covered
  outpatient drugs.
  `(iii) Drug use review, evaluation, and intervention.
  `(iv) Medical quality assurance.
The membership of the DUR Board shall be made up at least  1/3  but no
more than 51 percent practicing physicians and at least  1/3  practicing
pharmacists.
  `(C) ACTIVITIES- The activities of the DUR Board shall include but not be
  limited to the following:
  `(i) Retrospective DUR as defined in section (2)(B).
  `(ii) Application of standards as defined in section (2)(C).
  `(iii) Ongoing interventions for physicians and pharmacists, targeted toward
  therapy problems or individuals identified in the course of retrospective
  drug use reviews performed under this subsection. Intervention programs
  shall include, in appropriate instances, at least:
  `(I) information dissemination sufficient to ensure the ready availability
  to physicians and pharmacists in the State of information concerning its
  duties, powers, and basis for its standards;
  `(II) written, oral, or electronic reminders containing patient-specific or
  drug-specific (or both) information and suggested changes in prescribing
  or dispensing practices, communicated in a manner designed to ensure the
  privacy of patient-related information;
  `(III) use of face-to-face discussions between health care professionals
  who are experts in rational drug therapy and selected prescribers and
  pharmacists who have been targeted for educational intervention, including
  discussion of optimal prescribing, dispensing, or pharmacy care practices,
  and follow-up face-to-face discussions; and
  `(IV) intensified review or monitoring of selected prescribers or dispensers.
The Board shall re-evaluate interventions after an appropriate period of time
to determine if the intervention improved the quality of drug therapy, to
evaluate the success of the interventions and make modifications as necessary.
  `(D) ANNUAL REPORT- Each State shall require the DUR Board to prepare
  a report on an annual basis. The State shall submit a report on an
  annual basis to the Secretary which shall include a description of the
  activities of the Board, including the nature and scope of the prospective
  and retrospective drug use review programs, a summary of the interventions
  used, an assessment of the impact of these educational interventions on
  quality of care, and an estimate of the cost savings generated as a result
  of such program. The Secretary shall utilize such report in evaluating
  the effectiveness of each State's drug use review program.
  `(h) ELECTRONIC CLAIMS MANAGEMENT-
  `(1) IN GENERAL- In accordance with chapter 35 of title 44, United
  States Code (relating to coordination of Federal information policy),
  the Secretary shall encourage each State agency to establish, as its
  principal means of processing claims for covered outpatient drugs under
  this title, a point-of-sale electronic claims management system, for
  the purpose of performing on-line, real time eligibility verifications,
  claims data capture, adjudication of claims, and assisting pharmacists
  (and other authorized persons) in applying for and receiving payment.
  `(2) ENCOURAGEMENT- In order to carry out paragraph (1)--
  `(A) for calendar quarters during fiscal years 1991 and 1992, expenditures
  under the State plan attributable to development of a system described in
  paragraph (1) shall receive Federal financial participation under section
  1903(a)(3)(A)(i) (at a matching rate of 90 percent) if the State acquires,
  through applicable competitive procurement process in the State, the most
  cost-effective telecommunications network and automatic data processing
  services and equipment; and
  `(B) the Secretary may permit, in the procurement described in subparagraph
  (A) in the application of part 433 of title 42, Code of Federal Regulations,
  and parts 95, 205, and 307 of title 45, Code of Federal Regulations, the
  substitution of the State's request for proposal in competitive procurement
  for advance planning and implementation documents otherwise required.
  `(i) ANNUAL REPORT-
  `(1) IN GENERAL- Not later than May 1 of each year the Secretary shall
  transmit to the Committee on Finance of the Senate, the Committee on Energy
  and Commerce of the House of Representatives, and the Committees on Aging
  of the Senate and the House of Representatives a report on the operation
  of this section in the preceding fiscal year.
  `(2) DETAILS- Each report shall include information on--
  `(A) ingredient costs paid under this title for single source drugs,
  multiple source drugs, and nonprescription covered outpatient drugs;
  `(B) the total value of rebates received and number of manufacturers
  providing such rebates;
  `(C) how the size of such rebates compare with the size of rebates offered
  to other purchasers of covered outpatient drugs;
  `(D) the effect of inflation on the value of rebates required under this
  section; and
  `(E) trends in prices paid under this title for covered outpatient drugs.
  `(j) EXEMPTION OF ORGANIZED HEALTH CARE SETTINGS- (1) Health Maintenance
  Organizations that operate drug formularies or drug formulary systems
  specifically designed to provide outpatient prescription drug benefits,
  including those organizations that contract under section 1903(m), are
  not subject to the requirements of this section.
  `(2) The State plan shall provide that hospitals providing medical assistance
  under such plan that such hospitals which bill the plan no more than the
  hospital's acquisition costs for covered outpatient drugs are not subject
  to the requirements of this section.
  `(3) Nothing in this subsection shall be construed as providing that amounts
  for covered outpatient drugs paid by the institutions described in this
  subsection should not be taken into account for purposes of determining
  the best price as described in subsection (c).
  `(k) DEFINITIONS- In this section--
  `(1) AVERAGE MANUFACTURER PRICE- The term `average manufacturer price'
  means, with respect to a covered outpatient drug of a manufacturer for a
  calendar quarter, the average price paid to the manufacturer for the drug
  in the United States by wholesalers for drugs distributed to the retail
  pharmacy class of trade.
  `(2) COVERED OUTPATIENT DRUG- Subject to the exceptions in paragraph (3),
  the term `covered outpatient drug' means--
  `(A) of those drugs which are treated as prescribed drugs for purposes of
  section 1905(a)(12), a drug which may be dispensed only upon prescription
  (except as provided in paragraph (5)), and--
  `(i) which is approved for safety and effectiveness as a prescription drug
  under section 505 or 507 of the Federal Food, Drug, and Cosmetic Act or
  which is approved under section 505(j) of such Act;
  `(ii)(I) which was commercially used or sold in the United States before the
  date of the enactment of the Drug Amendments of 1962 or which is identical,
  similar, or related (within the meaning of section 310.6(b)(1) of title
  21 of the Code of Federal Regulations) to such a drug, and (II) which has
  not been the subject of a final determination by the Secretary that it is a
  `new drug' (within the meaning of section 201(p) of the Federal Food, Drug,
  and Cosmetic Act) or an action brought by the Secretary under section 301,
  302(a), or 304(a) of such Act to enforce section 502(f) or 505(a) of such
  Act; or
  `(iii)(I) which is described in section 107(c)(3) of the Drug Amendments
  of 1962 and for which the Secretary has determined there is a compelling
  justification for its medical need, or is identical, similar, or related
  (within the meaning of section 310.6(b)(1) of title 21 of the Code of
  Federal Regulations) to such a drug, and (II) for which the Secretary has
  not issued a notice of an opportunity for a hearing under section 505(e)
  of the Federal Food, Drug, and Cosmetic Act on a proposed order of the
  Secretary to withdraw approval of an application for such drug under such
  section because the Secretary has determined that the drug is less than
  effective for all conditions of use prescribed, recommended, or suggested
  in its labeling; and
  `(B) a biological product, other than a vaccine which--
  `(i) may only be dispensed upon prescription,
  `(ii) is licensed under section 351 of the Public Health Service Act, and
  `(iii) is produced at an establishment licensed under such section to
  produce such product; and
  `(C) insulin certified under section 506 of the Federal Food, Drug, and
  Cosmetic Act.
  `(3) LIMITING DEFINITION- The term `covered outpatient drug' does not
  include any drug, biological product, or insulin provided as part of,
  or as incident to, and in the same setting as, any of the following (and
  for which payment may be made under this title as part of payment for the
  following and not as direct reimbursement for the drug):
  `(A) Inpatient hospital services.
  `(B) Hospice services.
  `(C) Dental services, except that drugs for which the State plan authorizes
  direct reimbursement to the dispensing dentist are covered outpatient drugs.
  `(D) Physician office visits.
  `(E) Outpatient hospital emergency room visits.
  `(F) Outpatient surgical procedures.
Such term also does not include any such drug or product which is used for
a medical indication which is not a medically accepted indication.
  `(4) NONPRESCRIPTION DRUGS- If a State plan for medical assistance under
  this title includes coverage of prescribed drugs as described in section
  1905(a)(12) and permits coverage of drugs which may be sold without a
  prescription (commonly referred to as `over-the-counter' drugs), if they
  are prescribed by a physician (or other person authorized to prescribe
  under State law), such a drug shall be regarded as a covered outpatient drug.
  `(5) MANUFACTURER- The term `manufacturer' means any entity which is
  engaged in--
  `(A) the production, preparation, propagation, compounding, conversion,
  or processing of prescription drug products, either directly or indirectly
  by extraction from substances of natural origin, or independently by means
  of chemical synthesis, or by a combination of extraction and chemical
  synthesis, or
  `(B) in the packaging, repackaging, labeling, relabeling, or distribution
  of prescription drug products.
Such term does not include a wholesale distributor of drugs or a retail
pharmacy licensed under State law.
  `(6) MEDICALLY ACCEPTED INDICATION- The term `medically accepted indication'
  means any use for a covered outpatient drug which is approved under the
  Federal Food, Drug, and Cosmetic Act, which appears in peer-reviewed
  medical literature or which is accepted by one or more of the following
  compendia: the American Hospital Formulary Service-Drug Information,
  the American Medical Association Drug Evaluations, and the United States
  Pharmacopeia-Drug Information.
  `(7) MULTIPLE SOURCE DRUG; INNOVATOR MULTIPLE SOURCE DRUG; NONINNOVATOR
  MULTIPLE SOURCE DRUG; SINGLE SOURCE DRUG-
  `(A) DEFINED-
  `(i) MULTIPLE SOURCE DRUG- The term `multiple source drug' means, with
  respect to a calendar quarter, a covered outpatient drug (not including
  any drug described in paragraph (5)) for which there are 2 or more drug
  products which--
  `(I) are rated as therapeutically equivalent (under the Food and Drug
  Administration's most recent publication of `Approved Drug Products with
  Therapeutic Equivalence Evaluations'),
  `(II) except as provided in subparagraph (B), are pharmaceutically equivalent
  and bioequivalent, as defined in subparagraph (C) and as determined by
  the Food and Drug Administration, and
  `(III) are sold or marketed in the State during the period.
  `(ii) INNOVATOR MULTIPLE SOURCE DRUG- The term `innovator multiple source
  drug' means a multiple source drug that was originally marketed under an
  original new drug application approved by the Food and Drug Administration.
  `(iii) NONINNOVATOR MULTIPLE SOURCE DRUG- The term `noninnovator multiple
  source drug' means a multiple source drug that is not an innovator multiple
  source drug.
  `(iv) SINGLE SOURCE DRUG- The term `single source drug' means a covered
  outpatient drug which is produced or distributed under an original new
  drug application approved by the Food and Drug Administration, including
  a drug product marketed by any cross-licensed producers or distributers
  operating under the new drug application.
  `(B) EXCEPTION- Subparagraph (A)(i)(II) shall not apply if the Food
  and Drug Administration changes by regulation the requirement that, for
  purposes of the publication described in subparagraph (A)(i)(I), in order
  for drug products to be rated as therapeutically equivalent, they must be
  pharmaceutically equivalent and bioequivalent, as defined in subparagraph
  (C).
  `(C) DEFINITIONS- For purposes of this paragraph--
  `(i) drug products are pharmaceutically equivalent if the products contain
  identical amounts of the same active drug ingredient in the same dosage
  form and meet compendial or other applicable standards of strength, quality,
  purity, and identity;
  `(ii) drugs are bioequivalent if they do not present a known or potential
  bioequivalence problem, or, if they do present such a problem, they are
  shown to meet an appropriate standard of bioequivalence; and
  `(iii) a drug product is considered to be sold or marketed in a State if
  it appears in a published national listing of average wholesale prices
  selected by the Secretary, provided that the listed product is generally
  available to the public through retail pharmacies in that State.
  `(8) STATE AGENCY- The term `State agency' means the agency designated
  under section 1902(a)(5) to administer or supervise the administration of
  the State plan for medical assistance.'.
  (b) FUNDING-
  (1) DRUG USE REVIEW PROGRAMS- Section 1903(a)(3) (42 U.S.C. 1936b(a)(3))
  is amended--
  (A) by striking `plus' at the end of subparagraph (C) and inserting
  `and', and
  (B) by adding at the end the following new subparagraph:
  `(D) 75 percent of so much of the sums expended by the State plan during a
  quarter in 1991, 1992, or 1993, as the Secretary determines is attributable
  to the statewide adoption of a drug use review program which conforms to
  the requirements of section 1927(g); plus'.
  (2) TEMPORARY INCREASE IN FEDERAL MATCH FOR ADMINISTRATIVE COSTS- The per
  centum to be applied under section 1903(a)(7) of the Social Security Act
  for amounts expended during calendar quarters in fiscal year 1991 which are
  attributable to administrative activities necessary to carry out section 1927
  (other than subsection (g)) of such Act shall be 75 percent, rather than 50
  percent; after fiscal year 1991, the match shall revert back to 50 percent.
  (c) DEMONSTRATION PROJECTS-
  (1) PROSPECTIVE DRUG UTILIZATION REVIEW-
  (A) The Secretary of Health and Human Services shall provide, through
  competitive procurement by not later than January 1, 1992, for the
  establishment of at least 10 statewide demonstration projects to evaluate
  the efficiency and cost-effectiveness of prospective drug utilization
  review (as a component of on-line, real-time electronic point-of-sales
  claims management) in fulfilling patient counseling and in reducing costs
  for prescription drugs.
  (B) Each of such projects shall establish a central electronic repository
  for capturing, storing, and updating prospective drug utilization review
  data and for providing access to such data by participating pharmacists
  (and other authorized participants).
  (C) Under each project, the pharmacist or other authorized participant
  shall assess the active drug regimens of recipients in terms of duplicate
  drug therapy, therapeutic overlap, allergy and cross-sensitivity reactions,
  drug interactions, age precautions, drug regimen compliance, prescribing
  limits, and other appropriate elements.
  (D) Not later than January 1, 1994, the Secretary shall submit to Congress
  a report on the demonstration projects conducted under this paragraph.
  (2) DEMONSTRATION PROJECT ON COST-EFFECTIVENESS OF REIMBURSEMENT FOR
  PHARMACISTS' COGNITIVE SERVICES-
  (A) The Secretary of Health and Human Services shall conduct a demonstration
  project to evaluate the impact on quality of care and cost-effectiveness of
  paying pharmacists under title XIX of the Social Security Act, whether or
  not a drug is dispensed, for drug use review services. For this purpose, the
  Secretary shall provide for no fewer than 5 demonstration sites in different
  States and the participation of a significant number of pharmacists.
  (B) Not later than January 1, 1995, the Secretary shall submit a report to
  the Congress on the results of the demonstration project conducted under
  subparagraph (A).
  (d) STUDIES-
  (1) STUDY OF DRUG PURCHASING AND BILLING ACTIVITIES OF VARIOUS HEALTH
  CARE SYSTEMS-
  (A) The Comptroller General shall conduct a study of the drug purchasing
  and billing practices of hospitals, other institutional facilities, and
  managed care plans which provide covered outpatient drugs in the medicaid
  program. The study shall compare the ingredient costs of drugs for medicaid
  prescriptions to these facilities and plans and the charges billed to
  medical assistance programs by these facilities and plans compared to
  retail pharmacies.
  (B) The study conducted under this subsection shall include an assessment
  of--
  (i) the prices paid by these institutions for covered outpatient drugs
  compared to prices that would be paid under this section,
  (ii) the quality of outpatient drug use review provided by these institutions
  as compared to drug use review required under this section, and
  (iii) the efficiency of mechanisms used by these institutions for billing and
  receiving payment for covered outpatient drugs dispensed under this title.
  (C) By not later than May 1, 1991, the Comptroller General shall report
  to the Secretary of Health and Human Services (hereafter in this section
  referred to as the `Secretary'), the Committee on Finance of the Senate,
  the Committee on Energy and Commerce of the House of Representatives, and
  the Committees on Aging of the Senate and the House of Representatives on
  the study conducted under subparagraph (A).
  (2) REPORT ON DRUG PRICING- By not later than May 1 of each year,
  the Comptroller General shall submit to the Secretary, the Committee
  on Finance of the Senate, the Committee on Energy and Commerce of the
  House of Representatives, and the Committees on Aging of the Senate and
  House of Representatives an annual report on changes in prices charged by
  manufacturers for prescription drugs to the Department of Veterans Affairs,
  other Federal programs, retail and hospital pharmacies, and other purchasing
  groups and managed care plans.
  (3) STUDY ON PRIOR APPROVAL PROCEDURES-
  (A) The Secretary, acting in consultation with the Comptroller General,
  shall study prior approval procedures utilized by State medical assistance
  programs conducted under title XIX of the Social Security Act, including--
  (i) the appeals provisions under such programs; and
  (ii) the effects of such procedures on beneficiary and provider access to
  medications covered under such programs.
  (B) By not later than December 31, 1991, the Secretary and the Comptroller
  General shall report to the Committee on Finance of the Senate, the Committee
  on Energy and Commerce of the House of Representatives, and the Committees
  on Aging of the Senate and the House of Representatives on the results of
  the study conducted under subparagraph (A) and shall make recommendations
  with respect to which procedures are appropriate or inappropriate to be
  utilized by State plans for medical assistance.
  (4) STUDY ON REIMBURSEMENT RATES TO PHARMACISTS-
  (A) The Secretary shall conduct a study on (i) the adequacy of current
  reimbursement rates to pharmacists under each State medical assistance
  programs conducted under title XIX of the Social Security Act;  and (ii)
  the extent to which reimbursement rates under such programs have an effect
  on beneficiary access to medications covered and pharmacy services under
  such programs.
  (B) By not later than December 31, 1991, the Secretary shall report to the
  Committee on Finance of the Senate, the Committee on Energy and Commerce
  of the House of Representatives, and the Committees on Aging of the Senate
  and the House of Representatives on the results of the study conducted
  under subparagraph (A).
  (5) STUDY OF PAYMENTS FOR VACCINES- The Secretary of Health and Human
  Services shall undertake a study of the relationship between State medical
  assistance plans and Federal and State acquisition and reimbursement policies
  for vaccines and the accessibility of vaccinations and immunization to
  children provided under this title. The Secretary shall report to the
  Congress on the Study not later than one year after the date of the
  enactment of this Act.
  (6) STUDY ON APPLICATION OF DISCOUNTING  OF DRUGS UNDER MEDICARE- The
  Comptroller General shall conduct a study examining methods to encourage
  providers of items and services under title XVIII of the Social Security
  Act to negotiate discounts with suppliers of prescription drugs to such
  providers. The Comptroller General shall submit to Congress a report on such
  study no later than 1 year after the date of enactment of this subsection.
PART II--PURCHASE OF PRIVATE INSURANCE
SEC. 6211. STATES REQUIRED TO PAY PREMIUMS, DEDUCTIBLES, AND COINSURANCE
FOR PRIVATE HEALTH INSURANCE COVERAGE FOR MEDICAID BENEFICIARIES WHERE
COST EFFECTIVE.
  (a) STATE PLAN REQUIREMENT- Section 1902(a) (42 U.S.C. 1396a(a)), as
  amended by section 6201, is further amended--
  (1) by striking `and' at the end of paragraph (53);
  (2) by striking the period at the end of paragraph (54) and inserting `;
  and'; and
  (3) by adding at the end the following new paragraph:
  `(55) meet the requirements of section 1928 (relating to payment of premiums,
  deductibles, and coinsurance for private health insurance).'.
  (b) DESCRIPTION OF REQUIREMENT- Title XIX (42 U.S.C. 1396 et seq.), as
  amended by section 6201, is further amended--
  (1) by redesignating section 1928 as section 1929; and
  (2) by inserting after section 1927 the following new section:
`PAYMENT OF PREMIUMS FOR PRIVATE HEALTH INSURANCE
  `SEC. 1928. (a) REQUIREMENT- Notwithstanding any other provision of
  this title, each State plan approved under this title shall provide that
  with respect to individuals eligible for medical assistance under this
  title that the State shall pay premiums, deductibles, and coinsurance
  for private health insurance policies (as defined in subsection (d))
  on behalf of such individuals and, where appropriate, the individuals'
  family members, when it is cost effective to do so.
  `(b) DETERMINATION OF COST EFFECTIVENESS- The Secretary shall promulgate
  regulations providing criteria for determining cost effectiveness for
  purposes of this section. In promulgating regulations under this subsection
  the Secretary shall consider:
  (1) the duration of the time period to be considered by States in determining
  cost effectiveness;
  (2) whether States in determining cost effectiveness, may base such
  determination on individual circumstances or actuarial categories, and,
  if based on actuarial categories whether States should be permitted to
  categorize actuarial groups on the basis of diagnosis; and
  (3) the circumstances under which States should pay premiums, deductibles,
  and coinsurance for non-medicaid eligible family members of individuals
  eligible for medical assistance under this title.
  `(c) SCOPE OF COVERAGE- Each State shall ensure that as part of its State
  plan approved under this title that where the State makes payments for
  premiums, deductibles, or coinsurance for private health insurance coverage
  on behalf of an individual who is eligible for medical assistance under
  this section, that if such private health coverage does not cover an item
  or service or does not cover an item or service to the same extent as such
  item or service is covered under the State plan approved under this title
  that the State shall provide under such State plan any additional benefits
  necessary to provide such individual with coverage as comprehensive in
  amount, duration, and scope as medical assistance provided under the State
  plan approved under this title.
  `(d) PRIVATE HEALTH INSURANCE DEFINED- For purposes of this section,
  the term `private health insurance policy' includes employment-related
  health insurance, group health insurance, membership in private health
  maintenance organizations, or such other private health insurance as the
  Secretary may specify.'.
  (c) CONFORMING AMENDMENTS-
  (1) LIMITATION ON AMOUNT, DURATION, AND SCOPE OF BENEFITS MODIFIED- Section
  1902(a)(10) (42 U.S.C. 1396a(a)(10)) is amended in the matter following
  subparagraph (E)--
  (A) by striking `and' at the end of subdivision (IX);
  (B) by inserting `and' at the end of subdivision (X); and
  (C) by adding at the end the following new subdivision:
  `(XI) the making available of medical assistance to cover the costs
  of premiums, deductibles, and coinsurance for certain individuals for
  private health coverage as described in section 1928 shall not, by reason
  of paragraph (10), require the making available of any such benefits or
  the making available of services of the same amount, duration, and scope
  of such private coverage to any other individuals;'.
  (2) PREMIUMS INCLUDED AS MEDICAL ASSISTANCE- Section 1905(a) (42
  U.S.C. 1396d(a)) is amended--
  (A) by striking `and' at the end of paragraph (21);
  (B) by redesignating paragraph (22) as paragraph (23); and
  (C) by inserting after paragraph (21) the following new paragraph:
  `(22) premiums, deductibles, and coinsurance for private health insurance
  coverage where cost effective (as provided in section 1928); and'.
  (d) EFFECTIVE DATE- (1) The amendments made by this section  shall become
  effective with respect to payments for calendar quarters beginning on or
  after January 1, 1991.
  (2) In the case of a State plan for medical assistance under title XIX of
  the Social Security Act which the Secretary of Health and Human Services
  determines requires State legislation (other than legislation authorizing
  or appropriating funds) in order for the plan to meet the additional
  requirements imposed by the amendments made by subsection (a), the State
  plan shall not be regarded as failing to comply with the requirements
  of such title solely on the basis of its failure to meet this additional
  requirement before the first day of the first calendar quarter beginning
  after the close of the first regular session of the State legislature that
  begins after the date of the enactment of this Act. For purposes of the
  previous sentence, in the case of a State that has a 2-year legislative
  session, each year of such session shall be deemed to be a separate regular
  session of the State legislature.
PART III--LOW-INCOME ELDERLY
SEC. 6221. 1-YEAR ACCELERATION OF AND INCREASE IN OPTION AMOUNT FOR BUY-IN
OF PREMIUMS AND COST SHARING FOR INDIGENT MEDICARE BENEFICIARIES.
  (a) OPTION UP TO 133 PERCENT OF POVERTY LINE- Section 1905(p)(2)(A)
  (42 U.S.C. 1396d(p)(2)(A)) is amended by striking `100' and inserting `133'.
  (b) REQUIRED 1-YEAR ACCELERATION TO 100 PERCENT OF POVERTY LINE- Section
  1905(p)(2) (42 U.S.C. 1396d(p)(2)) is further amended--
  (1) in subparagraph (B)--
  (A) by adding `and' at the end of clause (ii);
  (B) in clause (iii), by striking `95 percent, and' and inserting `100
  percent.'; and
  (C) by striking clause (iv); and
  (2) in subparagraph (C)--
  (A) in clause (iii), by striking `90' and inserting `95';
  (B) by adding `and' at the end of clause (iii);
  (C) in clause (iv), by striking `95 percent, and' and inserting `100
  percent.'; and
  (D) by striking clause (v).
  (c) EFFECTIVE DATE- (1) The amendment made by subsection (a) and, except
  as provided in paragraph (2), the amendments made by subsection (b) shall
  become effective with respect to payments for calendar quarters beginning
  on or after January 1, 1991.
  (2) In the case of a State plan for medical assistance under title XIX of
  the Social Security Act which the Secretary of Health and Human Services
  determines requires State legislation (other than legislation authorizing
  or appropriating funds) in order for the plan to meet the additional
  requirements imposed by the amendments made by this section, the State
  plan shall not be regarded as failing to comply with the requirements
  of such title solely on the basis of its failure to meet this additional
  requirement before the first day of the first calendar quarter beginning
  after the close of the first regular session of the State legislature that
  begins after the date of the enactment of this Act. For purposes of the
  previous sentence, in the case of a State that has a 2-year legislative
  session, each year of such session shall be deemed to be a separate regular
  session of the State legislature.
SEC. 6222. DELAY IN COUNTING SOCIAL SECURITY COLA INCREASES UNTIL NEW POVERTY
GUIDELINES IMPLEMENTED.
  (a) IN GENERAL- Section 1905(p) of the Social Security Act (42
  U.S.C. 1396d(p)) is amended--
  (1) in subparagraph (B) of paragraph (1), by inserting `, except as
  provided in paragraph (2)(D) of this subsection,' after `supplementary
  security income program'; and
  (2) by adding at the end of paragraph (2) the following new subparagraph:
  `(D)(i) In making a determination or redetermination of income under
  this subsection for a transition month (as defined in clause (ii) of this
  subparagraph) for an individual who is eligible to receive insurance benefits
  under title II of this Act, such determination or redetermination shall
  exclude any amount of income attributable to a cost-of-living increase in
  the level of monthly insurance benefits under title II (as described in
  section 215(i)) received or anticipated to be received for that calendar
  year for which the determination or redetermination is made.
  `(ii) For purposes of this subparagraph, the term `transition month' means
  each month in a calendar year during a period beginning January 1 and ending
  the last day of the month in which the State agency implements the annual
  revision of the official poverty line (as described in subparagraph (A))
  published during that calendar year.
  (b) EFFECTIVE DATE- The amendments made by this section shall apply to
  determinations or redeterminations of income for months beginning on or
  after January 1, 1991.
PART IV--CHILD HEALTH
SEC. 6231. MEDICAID CHILD HEALTH PROVISIONS.
  (a) PHASED-IN MANDATORY COVERAGE OF CHILDREN UP TO 100 Percent of Poverty
  Level-
  (1) IN GENERAL- Section 1902 (42 U.S.C. 1396a) is amended--
  (A) in subsection (a)(10)(A)(i)--
  (i) by striking `or' at the end of subclause (V),
  (ii) by striking the semicolon at the end of subclause (VI) and inserting
  `, or', and
  (iii) by adding at the end the following new subclause:
  `(VII) who are described in subparagraph (D) of subsection (l)(1) and whose
  family income does not exceed the income level the State is required to
  establish under subsection (l)(2)(C) for such a family;';
  (B) in subsection (a)(10)(A)(ii)(IX), by striking `or clause (i)(VI)'
  and inserting `, clause (i)(VI), or clause (i)(VII)';
  (C) in subsection (l)--
  (i) in subparagraph (C) of paragraph (1) by inserting `children' after `(C)';
  (ii) by striking subparagraph (D) of paragraph (1) and inserting the
  following:
  `(D) children born after September 30, 1983, who have attained 6 years of
  age but have not attained 19 years of age,';
  (iii) by striking subparagraph (C) of paragraph (2) and inserting the
  following:
  `(C) For purposes of paragraph (1) with respect to individuals described
  in subparagraph (D) of that paragraph, the State shall establish an income
  level which is equal to 100 percent of the income official poverty line
  described in subparagraph (A) applicable to a family of the size involved.';
  (iv) in paragraph (3) by inserting `, (a)(10)(A)(i)(VII),' after
  `(a)(10)(A)(i)(VI)';
  (v) in paragraph (4)(A), by inserting `or subsection (a)(10)(A)(i)(VII)'
  after `(a)(10)(A)(i)(VI)'; and
  (vi) in paragraph (4)(B), by striking `or (a)(10)(A)(i)(VI)' `, and inserting
  `(a)(10)(A)(i)(VI), or (a)(10)(A)(i)(VII)'; and
  (D) in subsection (r)(2)(A), by inserting `(a)(10)(A)(i)(VII),' after
  `(a)(10)(A)(i)(VI),'.
  (2) CONFORMING AMENDMENT TO QUALIFIED CHILDREN- Section 1905(n)(2) (42
  U.S.C. 1396d(n)(2)) is amended by striking `age of 7 (or any age designated
  by the State that exceeds 7 but does not exceed 8)' and inserting `age
  of 19'.
  (3) ADDITIONAL CONFORMING AMENDMENTS-
  (A) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) is amended--
  (i) by striking `1902(a)(10)(A)(i)(IV),' and inserting
  `1902(a)(10)(A)(i)(III), 1902(a)(10)(A)(i)(IV), 1902(a)(10)(A)(i)(V),', and
  (ii) by inserting `1902(a)(10)(A)(i)(VII),' after `1902(a)(10)(A)(i)(VI),'.
  (B) Subsections (a)(3)(C) and (b)(3)(C)(i) of section 1925 of such Act (42
  U.S.C. 1396r-6), as amended by section 6411(i)(3) of the Omnibus Budget
  Reconciliation Act of 1989, are each amended by inserting `(i)(VII),'
  after `(i)(VI)'.
  (4) EFFECTIVE DATE- (A) The amendments made by this subsection apply (except
  as otherwise provided in this subsection) to payments under title XIX of the
  Social Security Act for calendar quarters beginning on or after July 1, 1991.
  (B) In the case of a State plan for medical assistance under title XIX of
  the Social Security Act which the Secretary of Health and Human Services
  determines requires State legislation (other than legislation authorizing
  or appropriating funds) in order for the plan to meet the additional
  requirements imposed by the amendments made by this subsection, the State
  plan shall not be regarded as failing to comply with the requirements of
  such title solely on the basis of its failure to meet these additional
  requirements before the first day of the first calendar quarter beginning
  after the close of the first regular session of the State legislature that
  begins after the date of the enactment of this Act. For purposes of the
  previous sentence, in the case of a State that has a 2-year legislative
  session, each year of such session shall be deemed to be a separate regular
  session of the State legislature.
  (b) OPTIONAL COVERAGE OF CHILDREN WITH INCOME BELOW 185 Percent of the
  Poverty Level-
  (1) FLEXIBILITY ON INCOME LIMIT- Section 1902, as amended by subsection
  (a) of this section, is amended--
  (A) in subclauses (VI) and (VII) of subsection (a)(10)(A)(i), by inserting
  `minimum' before `income level',
  (B) in subsection (l)(2)(B), by striking `133 percent' and inserting `a
  percentage (established by the State, which is not less than 133 percent
  and not more than 185 percent)'; and
  (C) in subsection (l)(2)(C), by striking `100 percent' and inserting `a
  percentage (established by the State, which is not less than 100 percent
  and not more than 185 percent)'.
  (2) FLEXIBILITY ON AGE- Section 1902(l)(1) of such Act is amended--
  (A) by striking `and' at the end of subparagraph (C),
  (B) by inserting `and' at the end of subparagraph (D), and
  (C) by adding at the end thereof the following:
  `(E) at the option of the State, children born after October 1, 1983,
  who have attained 6 years of age but have not attained 19 years of age or
  a lesser age as selected by the State,'.
  (3) EFFECTIVE DATE- (A) The amendments made by this subsection shall apply
  to payments under title XIX of the Social Security Act for calendar quarters
  beginning on or after July 1, 1991.
  (B) In the case of a State plan for medical assistance under title XIX of
  the Social Security Act which the Secretary of Health and Human Services
  determines requires State legislation (other than legislation authorizing
  or appropriating funds) in order for the plan to meet the additional
  requirements imposed by the amendments made by this subsection, the State
  plan shall not be regarded as failing to comply with the requirements of
  such title solely on the basis of its failure to meet these additional
  requirements before the first day of the first calendar quarter beginning
  after the close of the first regular session of the State legislature that
  begins after the date of the enactment of this Act. For purposes of the
  previous sentence, in the case of a State that has a 2-year legislative
  session, each year of such session shall be deemed to be a separate regular
  session of the State legislature.
  (c)(1) CONTINUOUS ELIGIBILITY FOR MEDICAID BENEFITS FOR A PERIOD OF 1 YEAR
  PROVIDED FOR INFANTS BORN TO MEDICAID ELIGIBLE WOMEN- Section 1902(e)(4)
  (42 U.S.C. 1396a(e)(4)) is amended--
  (A) in the first sentence, by striking `and the woman remains eligible for
  such assistance' and inserting `if the woman would have remained eligible
  for such assistance were it not for the termination of her pregnancy or
  post-partum period'; and
  (B) in the second sentence--
  (i) by striking `unless' and inserting `if'; and
  (ii) by striking `expires' and inserting `expires no new application for
  such child shall be required'.
  (2) EFFECTIVE DATE- (A) The amendment made by paragraph (1), shall become
  effective with respect to eligibility determinations for medical assistance
  under title XIX of the Social Security Act on or after July 1, 1991.
  (B) In the case of a State plan for medical assistance under title XIX of
  the Social Security Act which the Secretary of Health and Human Services
  determines requires State legislation (other than legislation authorizing
  or appropriating funds) in order for the plan to meet the additional
  requirements imposed by the amendments made by this subsection, the State
  plan shall not be regarded as failing to comply with the requirements of
  such title solely on the basis of its failure to meet these additional
  requirements before the first day of the first calendar quarter beginning
  after the close of the first regular session of the State legislature that
  begins after the date of the enactment of this Act. For purposes of the
  previous sentence, in the case of a State that has a 2-year legislative
  session, each year of such session shall be deemed to be a separate regular
  session of the State legislature.
  (d) Adjustment in Payment for Hospital Services Furnished to Low-Income
  Children-
  (1) IN GENERAL- Section 1902 (42 U.S.C. 1396a) is amended by adding at
  the end the following new subsection:
  `(s) In order to meet the requirements of subsection (a)(54), the State
  plan must provide that payments to hospitals under the plan for inpatient
  hospital services furnished to infants who have not attained the age of 1
  year, and to children who have not attained the age of 19 years and who
  receive such services in a disproportionate share hospital described in
  section 1923(b)(1), shall--
  `(1) if made on a prospective basis (whether per diem, per case, or
  otherwise) provide for an outlier adjustment in payment amounts for
  medically necessary inpatient hospital services involving exceptionally
  high costs or exceptionally long lengths of stay,
  `(2) not be limited by the imposition of day limits with respect to the
  delivery of such services to such individuals, and
  `(3) not be limited by the imposition of dollar limits (other than
  such limits resulting from prospective payments as adjusted pursuant to
  paragraph (1)) with respect to the delivery of such services to any such
  individual who has not attained their first birthday (or in the case of
  such an individual who is an inpatient on his first birthday until such
  individual is discharged).'.
  (2) CONFORMING AMENDMENT- Section 1902(a) (42 U.S.C. 1396a(a)), as amended
  by section 6211(a), is further amended--
  (A) by striking `and' at the end of paragraph (54);
  (B) by striking the period at the end of paragraph (55) and by inserting
  `; and'; and
  (C) by inserting after paragraph (56) and before the end matter the
  following new paragraph:
  `(56) provide, in accordance with subsection (s), for adjusted payments
  for certain inpatient hospital services.'.
  (3) PROHIBITION ON WAIVER- Section 1915(b) (42 U.S.C. 1396n(b)) is amended
  in the matter preceding paragraph (1) by inserting `(other than subsection
  (s))' after `Section 1902'.
  (4) EFFECTIVE DATE- (A) The amendments made by this subsection shall become
  effective with respect to payments under title XIX of the Social Security
  Act for calendar quarters beginning on or after July 1, 1991.
  (B) In the case of a State plan for medical assistance under title XIX of
  the Social Security Act which the Secretary of Health and Human Services
  determines requires State legislation (other than legislation authorizing
  or appropriating funds) in order for the plan to meet the additional
  requirements imposed by the amendments made by this subsection, the State
  plan shall not be regarded as failing to comply with the requirements of
  such title solely on the basis of its failure to meet these additional
  requirements before the first day of the first calendar quarter beginning
  after the close of the first regular session of the State legislature that
  begins after the date of the enactment of this Act. For purposes of the
  previous sentence, in the case of a State that has a 2-year legislative
  session, each year of such session shall be deemed to be a separate regular
  session of the State legislature.
PART V--HOME AND COMMUNITY-BASED SERVICES
SEC. 6241. HOME AND COMMUNITY-BASED CARE AS OPTIONAL SERVICE.
  (a) PROVISION AS OPTIONAL SERVICE- Section 1905(a) (42 U.S.C. 1396d(a)),
  as amended by section 6201, is further amended--
  (1) by striking `and' at the end of paragraph (22);
  (2) by redesignating paragraph (23) as paragraph (24); and
  (3) by inserting after paragraph (22) the following new paragraph:
  `(23) home community care (to the extent allowed and as defined in section
  1929) for functionally disabled elderly individuals; and'.
  (b) HOME AND COMMUNITY CARE FOR FUNCTIONALLY DISABLED ELDERLY INDIVIDUALS-
  Title XIX (42 U.S.C. 1396 et seq.) as amended by section 6211 is further
  amended--
  (1) by redesignating section 1929 as section 1930; and
  (2) by inserting after section 1928 the following new section:
`HOME AND COMMUNITY CARE FOR FUNCTIONALLY DISABLED ELDERLY INDIVIDUALS
  `SEC. 1929. (a) HOME AND COMMUNITY CARE DEFINED- In this title, the term
  `home and community care' means one or more of the following services
  furnished to an individual who has been determined, after an assessment
  under subsection (c), to be a functionally disabled elderly individual,
  furnished in accordance with an individual community care plan (established
  and periodically reviewed and revised by a qualified community care case
  manager under subsection (d)):
  `(1) Homemaker/home health aide services.
  `(2) Chore services.
  `(3) Personal care services.
  `(4) Nursing care services provided by, or under the supervision of,
  a registered nurse.
  `(5) Respite care.
  `(6) Training for family members in managing the individual.
  `(7) Adult day health services.
  `(8) In the case of an individual with chronic mental illness, day treatment
  or other partial hospitalization, psychosocial rehabilitation services,
  and clinic services (whether or not furnished in a facility).
  `(9) Such other home and community-based services (other than room and
  board) as the Secretary may approve.
  `(b) FUNCTIONALLY DISABLED ELDERLY INDIVIDUAL DEFINED-
  `(1) IN GENERAL- In this title, the term `functionally disabled elderly
  individual' means an individual who--
  `(A) is 65 years of age or older,
  `(B) is determined to be a functionally disabled individual under subsection
  (c), and
  `(C) subject to section 1902(f) (as applied consistent with section
  1902(r)(2)), is receiving supplemental security income benefits under title
  XVI (or under a State plan approved under title XVI) or, at the option of
  the State, is described in section 1902(a)(10)(C).
  `(2) TREATMENT OF CERTAIN INDIVIDUALS PREVIOUSLY COVERED UNDER A WAIVER-
  (A) In the case of a State which--
  `(i) at the time of its election to provide coverage for home and community
  care under this section has a waiver approved under section 1915(c) or
  1915(d) with respect to individuals 65 years of age or older, and
  `(ii) subsequently discontinues such waiver,
individuals who were eligible for benefits under the waiver as of the date of
its discontinuance and who would, but for income or resources, be eligible
for medical assistance for home and community care under the plan shall,
notwithstanding any other provision of this title, be deemed a functionally
disabled elderly individual for so long as the individual would have remained
eligible for medical assistance under such waiver.
  `(B) In the case of a State which, as of December 31, 1990, had in effect
  a waiver under section 1115 that provides under the State plan under this
  title for personal care services for functionally disabled individuals,
  the term `functionally disabled elderly individual' may include, at the
  option of the State, an individual who--
  `(i) is 65 years of age or older or is disabled (as determined under the
  supplemental security income program under title XVI);
  `(ii) is determined to meet the test of functional disability applied
  under the waiver as of such date; and
  `(iii) meets the resource requirement and income standard that apply in
  the State to individuals described in section 1902(a)(10)(A)(ii)(V).
  `(3) USE OF PROJECTED INCOME- In applying section 1903(f)(1) in determining
  the eligibility of an individual (described in section 1902(a)(10)(C)) for
  medical assistance for home and community care, a State may, at its option,
  provide for the determination of the individual's anticipated medical
  expenses (to be deducted from income) over a period of up to 6 months.
  `(c) DETERMINATIONS OF FUNCTIONAL DISABILITY-
  `(1) IN GENERAL- In this section, an individual is `functionally disabled'
  if the individual--
  `(A) is unable to perform without substantial assistance from another
  individual at least 2 of the following 3 activities of daily living:
  toileting, transferring, and eating; or
  `(B) has a primary or secondary diagnosis of Alzheimer's disease and is
  (i) unable to perform without substantial human assistance (including
  verbal reminding or physical cueing) or supervision at least 2 of the
  following 5 activities of daily living: bathing, dressing, toileting,
  transferring, and eating; or (ii) cognitively impaired so as to require
  substantial supervision from another individual because he or she engages
  in inappropriate behaviors that pose serious health or safety hazards to
  himself or herself or others.
  `(2) ASSESSMENTS OF FUNCTIONAL DISABILITY-
  `(A) REQUESTS FOR ASSESSMENTS- If a State has elected to provide home and
  community care under this section, upon the request of an individual who
  is 65 years of age or older and who meets the requirements of subsection
  (b)(1)(C) (or another person on such individual's behalf), the State shall
  provide for a comprehensive functional assessment under this subparagraph
  which--
  `(i) is used to determine whether or not the individual is functionally
  disabled,
  `(ii) is based on a uniform minimum data set specified by the Secretary
  under subparagraph (C)(i), and
  `(iii) uses an instrument which has been specified by the State under
  subparagraph (B).
No fee may be charged for such an assessment.
  `(B) SPECIFICATION OF ASSESSMENT INSTRUMENT- The State shall specify the
  instrument to be used in the State in complying with the requirement of
  subparagraph (A)(iii) which instrument shall be--
  `(i) one of the instruments designated under subparagraph (C)(ii); or
  `(ii) an instrument which the Secretary has approved as being consistent with
  the minimum data set of core elements, common definitions, and utilization
  guidelines specified by the Secretary in subparagraph (C)(i).
  `(C) SPECIFICATION OF ASSESSMENT DATA SET AND INSTRUMENTS- The Secretary
  shall--
  `(i) not later than July 1, 1991--
  `(I) specify a minimum data set of core elements and common definitions
  for use in conducting the assessments required under subparagraph (A); and
  `(II) establish guidelines for use of the data set; and
  `(ii) by not later than July 1, 1991, designate one or more instruments
  which are consistent with the specification made under subparagraph (A)
  and which a State may specify under subparagraph (B) for use in complying
  with the requirements of subparagraph (A).
  `(D) PERIODIC REVIEW- Each individual who qualifies as a functionally
  disabled elderly individual shall have the individual's assessment
  periodically reviewed and revised not less often than once every 12 months.
  `(E) CONDUCT OF ASSESSMENT BY INTERDISCIPLINARY TEAMS- An assessment under
  subparagraph (A) and a review under subparagraph (D) must be conducted by an
  interdisciplinary team designated by the State. The Secretary shall permit a
  State to provide for assessments and reviews through teams under contracts--
  `(i) with public organizations; or
  `(ii) with nonpublic organizations which do not provide home and community
  care or nursing facility services and do not have a direct or indirect
  ownership or control interest in, or direct or indirect affiliation or
  relationship with, an entity that provides, community care or nursing
  facility services.
  `(F) CONTENTS OF ASSESSMENT- The interdisciplinary team must--
  `(i) identify in each such assessment or review each individual's functional
  disabilities and need for home and community care, including information
  about the individual's health status, home and community environment,
  and informal support system; and
  `(ii) based on such assessment or review, determine whether the individual
  is (or continues to be) functionally disabled.
The results of such an assessment or review shall be used in establishing,
reviewing, and revising the individual's ICCP under subsection (d)(1).
  `(G) APPEAL PROCEDURES- Each State which elects to provide home and
  community care under this section must have in effect an appeals process
  for individuals adversely affected by determinations under subparagraph (F).
  `(d) INDIVIDUAL COMMUNITY CARE PLAN (ICCP)-
  `(1) INDIVIDUAL COMMUNITY CARE PLAN DEFINED- In this section, the terms
  `individual community care plan' and `ICCP' mean, with respect to a
  functionally disabled elderly individual, a written plan which--
  `(A) is established, and is periodically reviewed and revised, by a qualified
  case manager after a face-to-face interview with the individual or primary
  caregiver and based upon the most recent comprehensive functional assessment
  of such individual conducted under subsection (c)(2);
  `(B) specifies, within any amount, duration, and scope limitations imposed on
  home and community care provided under the State plan, the home and community
  care to be provided to such individual under the plan, and indicates the
  individual's preferences for the types and providers of services; and
  `(C) may specify other services required by such individual.
An ICCP may also designate the specific providers (qualified to provide
home and community care under the State plan) which will provide the home
and community care described in subparagraph (B).
  `(2) QUALIFIED CASE MANAGEMENT ENTITY DEFINED- In this section, the term
  `qualified case management entity' means a nonprofit or public agency or
  organization which--
  `(A) has experience or has been trained in establishing, and in periodically
  reviewing and revising, individual community care plans and in the provision
  of case management services to the elderly;
  `(B) is responsible for (i) assuring that home and community care covered
  under the State plan and specified in the ICCP is being provided, (ii)
  visiting each individual's home or community setting where care is being
  provided not less often than once every 90 days, and (iii) informing the
  elderly individual or primary caregiver on how to contact the case manager
  if service providers fail to properly provide services or other similar
  problems occur;
  `(C) in the case of a nonpublic agency, does not provide home and community
  care or nursing facility services and does not have a direct or indirect
  ownership or control interest in, or direct or indirect affiliation or
  relationship with, an entity that provides, home and community care or
  nursing facility services;
  `(D) has procedures for assuring the quality of case management services
  that includes a peer review process;
  `(E) completes the ICCP in a timely manner and reviews and discusses new
  and revised ICCPs with elderly individuals or primary caregivers; and
  `(F) meets such other standards, established by the Secretary, as to
  assure that--
  `(i) such a manager is competent to perform case management functions;
  `(ii) individuals whose home and community care they manage are not at
  risk of financial exploitation due to such a manager; and
  `(iii) meets such other standards as the State may establish.
  `(3) APPEALS PROCESS- Each State which elects to provide home and
  community care under this section must have in effect an appeals process
  for individuals who disagree with the ICCP established.
  `(e) CEILING ON PAYMENT AMOUNTS AND MAINTENANCE OF EFFORT-
  `(1) CEILING ON PAYMENT AMOUNTS- Payments may not be made under section
  1903(a) to a State for home and community care provided under this section
  in a quarter to the extent that the medical assistance for such care in
  the quarter exceeds 50 percent of the product of--
  `(A) the average number of individuals in the quarter receiving such care
  under this section;
  `(B) the average per diem rate of payment which the Secretary has determined
  (before the beginning of the quarter) will be payable under title XVIII
  (without regard to coinsurance) for extended care services to be provided
  in the State during such quarter; and
  `(C) the number of days in such quarter.
  `(2) MAINTENANCE OF EFFORT-
  `(A) ANNUAL REPORTS- As a condition for the receipt of payment under section
  1903(a) with respect to medical assistance provided by a State for home and
  community care, the State shall report to the Secretary, with respect to
  each Federal fiscal year (beginning with fiscal year 1990) and in a format
  developed or approved by the Secretary, the amount of funds obligated by the
  State (including funds obligated by localities in the State) with respect to
  the provision of home and community care to the elderly in that fiscal year.
  `(B) REDUCTION IN PAYMENT IF FAILURE TO MAINTAIN EFFORT- If the amount
  reported under subparagraph (A) by a State with respect to a fiscal year
  is less than the amount reported under subparagraph (A) with respect to
  fiscal year 1989, the Secretary shall provide for a reduction in payments
  to the State under section 1903(a) in an amount equal to the difference
  between the amounts so reported.
  `(f) MINIMUM REQUIREMENTS FOR HOME AND COMMUNITY CARE-
  `(1) REQUIREMENTS- Home and Community care provided under this section must
  meet such requirements for individuals' rights and quality as are published
  or developed by the Secretary under subsection (k). Such requirements
  shall include--
  `(A) the requirement that individuals providing care are competent to
  provide such care; and
  `(B) the rights specified in paragraph (2).
  `(2) SPECIFIED RIGHTS- The rights specified in this paragraph are as follows:
  `(A) The right to be fully informed in advance, orally and in writing, of
  the care to be provided, to be fully informed in advance of any changes in
  care to be provided, and (except with respect to an individual determined
  incompetent) to participate in planning care or changes in care. In cases
  of incompetence, these same rights shall apply to the primary caregiver
  or family member.
  `(B) The right to voice grievances with respect to services that are
  (or fail to be) furnished without discrimination or reprisal for voicing
  grievances, and to be told how to complain to State and local authorities.
  `(C) The right to confidentiality of personal and clinical records.
  `(D) The right to privacy and to have one's property treated with respect.
  `(E) The right to refuse all or part of any care and to be informed of
  the likely consequences of such refusal.
  `(F) The right to education or training for oneself and for members of
  one's family or household on the management of care.
  `(G) The right to be free from physical or mental abuse, corporal punishment,
  and any physical or chemical restraints imposed for purposes of discipline
  or convenience and not included in an individual's ICCP.
  `(H) The right to be fully informed orally and in writing of the individual's
  rights.
  `(I) Any other rights established by the Secretary.
  `(g) MINIMUM REQUIREMENTS FOR SMALL COMMUNITY CARE SETTINGS-
  `(1) SMALL COMMUNITY CARE SETTINGS DEFINED- In this section, the term
  `small community care setting' means--
  `(A) a nonresidential setting that serves more than 2 and less than 8
  individuals; or
  `(B) a residential setting in which more than 2 and less than 8 unrelated
  adults reside and in which personal services (other than merely board)
  are provided in conjunction with residing in the setting.
  `(2) MINIMUM REQUIREMENTS- A small community care setting in which community
  care is provided under this section must--
  `(A) meet such requirements as are published or developed by the Secretary
  under subsection (k);
  `(B) meet the requirements of paragraphs (1)(A), (1)(C), (1)(D), (3), and
  (6) of section 1919(c), to the extent applicable to such a setting;
  `(C) inform each individual receiving community care under this section
  in the setting, orally and in writing at the time the individual first
  receives community care in the setting, of the individual's legal rights
  with respect to such a setting and the care provided in the setting;
  `(D) meet any applicable State or local requirements regarding certification
  or licensure;
  `(E) meet any applicable State and local zoning, building, and housing
  codes, and State and local fire and safety regulations; and
  `(F) be designed, constructed, equipped, and maintained in a manner to
  protect the health and safety of residents.
  `(h) MINIMUM REQUIREMENTS FOR LARGE COMMUNITY CARE SETTINGS-
  `(1) LARGE COMMUNITY CARE SETTING DEFINED- In this section, the term
  `large community care setting' means--
  `(A) a nonresidential setting in which more than 8 individuals are served; or
  `(B) a residential setting in which more than 8 unrelated adults reside
  and in which personal services are provided in conjunction with residing in
  the setting in which home and community care under this section is provided.
  `(2) MINIMUM REQUIREMENTS- A large community care setting in which community
  care is provided under this section must--
  `(A) meet such requirements as are published or developed by the Secretary
  under subsection (k);
  `(B) meet the requirements of paragraphs (1)(A), (1)(C), (1)(D), (3), and
  (6) of section 1919(c), to the extent applicable to such a setting;
  `(C) inform each individual receiving community care under this section in
  the setting, orally and in writing at the time the individual first receives
  home and community care in the setting, of the individual's legal rights
  with respect to such a setting and the care provided in the setting; and
  `(D) meet the requirements of paragraphs (2) and (3) of section 1919(d)
  (relating to administration and other matters) in the same manner as such
  requirements apply to nursing facilities under such section; except that,
  in applying the requirement of section 1919(d)(2) (relating to life safety
  code), the Secretary shall provide for the application of such life safety
  requirements (if any) that are appropriate to the setting.
  `(3) DISCLOSURE OF OWNERSHIP AND CONTROL INTERESTS AND EXCLUSION OF REPEATED
  VIOLATORS- A community care setting--
  `(A) must disclose persons with an ownership or control interest (including
  such persons as defined in section 1124(a)(3)) in the setting; and
  `(B) may not have, as a person with an ownership or control interest in the
  setting, any individual or person who has been excluded from participation
  in the program under this title or who has had such an ownership or control
  interest in one or more community care settings which have been found
  repeatedly to be substandard or to have failed to meet the requirements
  of paragraph (2).
  `(i) SURVEY AND CERTIFICATION PROCESS-
  `(1) CERTIFICATIONS-
  `(A) RESPONSIBILITIES OF THE STATE- Under each State plan under this title,
  the State shall be responsible for certifying the compliance of providers
  of home and community care and community care settings with the applicable
  requirements of subsections (f), (g) and (h). The failure of the Secretary
  to issue regulations to carry out this subsection shall not relieve a
  State of its responsibility under this subsection.
  `(B) RESPONSIBILITIES OF THE SECRETARY- The Secretary shall be responsible
  for certifying the compliance of State providers of home and community
  care, and of State community care settings in which such care is provided,
  with the requirements of subsections (f), (g) and (h).
  `(C) FREQUENCY OF CERTIFICATIONS- Certification of providers and settings
  under this subsection shall occur no less frequently than once every
  12 months.
  `(2) REVIEWS OF PROVIDERS-
  `(A) IN GENERAL- The certification under this subsection with respect to
  a provider of home or community care must be based on a periodic review
  of the provider's performance in providing the care required under ICCP's
  in accordance with the requirements of subsection (f).
  `(B) SPECIAL REVIEWS OF COMPLIANCE- Where the Secretary has reason to
  question the compliance of a provider of home or community care with any
  of the requirements of subsection (f), the Secretary may conduct a review
  of the provider and, on the basis of that review, make independent and
  binding determinations concerning the extent to which the provider meets
  such requirements.
  `(3) Surveys of community care settings-
  `(A) IN GENERAL- The certification under this subsection with respect to
  community care settings must be based on a survey. Such survey for such a
  setting must be conducted without prior notice to the setting. Any individual
  who notifies (or causes to be notified) a community care setting of the time
  or date on which such a survey is scheduled to be conducted is subject to
  a civil money penalty of not to exceed $2,000. The provisions of section
  1128A (other than subsections (a) and (b)) shall apply to a civil money
  penalty under the previous sentence in the same manner as such provisions
  apply to a penalty or proceeding under section 1128A(a). The Secretary
  shall review each State's procedures for scheduling and conducting such
  surveys to assure that the State has taken all reasonable steps to avoid
  giving notice of such a survey through the scheduling procedures and the
  conduct of the surveys themselves.
  `(B) SURVEY PROTOCOL- Surveys under this paragraph shall be conducted based
  upon a protocol which the Secretary has provided for under subsection (k).
  `(C) PROHIBITION OF CONFLICT OF INTEREST IN SURVEY TEAM MEMBERSHIP- A
  State and the Secretary may not use as a member of a survey team under this
  paragraph an individual who is serving (or has served within the previous
  2 years) as a member of the staff of, or as a consultant to, the community
  care setting being surveyed (or the person responsible for such setting)
  respecting compliance with the requirements of subsection (g) or (h) or who
  has a personal or familial financial interest in the setting being surveyed.
  `(D) SPECIAL SURVEYS OF COMPLIANCE- Where the Secretary has reason
  to question the compliance of a community care setting with any of the
  requirements of subsection (g) or (h), the Secretary may conduct a survey
  of the setting and, on the basis of that survey, make independent and
  binding determinations concerning the extent to which the setting meets
  such requirements.
  `(4) INVESTIGATION OF COMPLAINTS AND MONITORING OF PROVIDERS AND SETTINGS-
  Each State and the Secretary shall maintain procedures and adequate staff to
  investigate complaints of violations of applicable requirements imposed on
  providers of community care or on community care settings under subsections
  (f), (g) and (h).
  `(5) INVESTIGATION OF ALLEGATIONS OF INDIVIDUAL NEGLECT AND ABUSE AND
  MISAPPROPRIATION OF INDIVIDUAL PROPERTY- The State shall provide, through
  the agency responsible for surveys and certification of providers of
  home or community care and community care settings under this subsection,
  for a process for the receipt, review, and investigation of allegations
  of individual neglect and abuse (including injuries of unknown source) by
  personnel providing such care or in such setting and of misappropriation
  of individual property by such personnel. Such process shall provide for
  documentation of findings relating to such allegations with respect to an
  individual, for inclusion of any brief statement of the individual disputing
  such findings, and for inclusion, in any disclosure of such findings,
  of such brief statement (or of a clear and accurate summary thereof).
  `(6) DISCLOSURE OF RESULTS OF INSPECTIONS AND ACTIVITIES-
  `(A) PUBLIC INFORMATION- Each State, and the Secretary, shall make available
  to the public--
  `(i) information respecting all surveys, reviews, and certifications made
  under this subsection respecting providers of home or community care and
  community care settings, including statements of deficiencies,
  `(ii) copies of cost reports (if any) of such providers and settings filed
  under this title,
  `(iii) copies of statements of ownership under section 1124, and
  `(iv) information disclosed under section 1126.
  `(B) NOTICES OF SUBSTANDARD CARE- If a State finds that--
  `(i) a provider of home or community care has provided care of substandard
  quality with respect to an individual, the State shall make a reasonable
  effort to notify promptly (I) an immediate family member of each such
  individual and (II) individuals receiving home or community care from that
  provider under this title, or
  `(ii) a community care setting is substandard, the State shall make a
  reasonable effort to notify promptly (I) individuals receiving community
  care in that setting, and (II) immediate family members of such individuals.
  `(C) ACCESS TO FRAUD CONTROL UNITS- Each State shall provide its State
  medicaid fraud and abuse control unit (established under section 1903(q))
  with access to all information of the State agency responsible for surveys,
  reviews, and certifications under this subsection.
  `(j) ENFORCEMENT PROCESS FOR PROVIDERS OF COMMUNITY CARE-
  `(1) STATE AUTHORITY-
  `(A) IN GENERAL- If a State finds, on the basis of a review under
  subsection (i)(2) or otherwise, that a provider of home or community care
  no longer meets the requirements of this section, the State may terminate
  the provider's participation under the State plan and may provide in
  addition for a civil money penalty. Nothing in this subparagraph shall
  be construed as restricting the remedies available to a State to remedy
  a provider's deficiencies. If the State finds that a provider meets such
  requirements but, as of a previous period, did not meet such requirements,
  the State may provide for a civil money penalty under paragraph (2)(A) for
  the period during which it finds that the provider was not in compliance
  with such requirements.
  `(B) CIVIL MONEY PENALTY-
  `(i) IN GENERAL- Each State shall establish by law (whether statute or
  regulation) at least the following remedy: A civil money penalty assessed
  and collected, with interest, for each day in which the provider is or
  was out of compliance with a requirement of this section. Funds collected
  by a State as a result of imposition of such a penalty (or as a result
  of the imposition by the State of a civil money penalty under subsection
  (i)(3)(A)) may be applied to reimbursement of individuals for personal
  funds lost due to a failure of home or community care providers to meet
  the requirements of this section. The State also shall specify criteria,
  as to when and how this remedy is to be applied and the amounts of any
  penalties. Such criteria shall be designed so as to minimize the time between
  the identification of violations and final imposition of the penalties and
  shall provide for the imposition of incrementally more severe penalties
  for repeated or uncorrected deficiencies.
  `(ii) DEADLINE AND GUIDANCE- Each State which elects to provide home
  and community care under this section must establish the civil money
  penalty remedy described in clause (i) applicable to all providers of
  community care covered under this section. The Secretary shall provide,
  through regulations or otherwise by not later than July 1, 1990, guidance
  to States in establishing such remedy; but the failure of the Secretary
  to provide such guidance shall not relieve a State of the responsibility
  for establishing such remedy.
  `(2) SECRETARIAL AUTHORITY-
  `(A) FOR STATE PROVIDERS- With respect to a State provider of home or
  community care, the Secretary shall have the authority and duties of a
  State under this subsection, except that the civil money penalty remedy
  described in subparagraph (C) shall be substituted for the civil money
  remedy described in paragraph (1)(B)(i).
  `(B) OTHER PROVIDERS- With respect to any other provider of home or community
  care in a State, if the Secretary finds that a provider no longer meets a
  requirement of this section, the Secretary may terminate the provider's
  participation under the State plan and may provide, in addition, for a
  civil money penalty under subparagraph (C). If the Secretary finds that
  a provider meets such requirements but, as of a previous period, did
  not meet such requirements, the Secretary may provide for a civil money
  penalty under subparagraph (C) for the period during which the Secretary
  finds that the provider was not in compliance with such requirements.
  `(C) CIVIL MONEY PENALTY- If the Secretary finds on the basis of a review
  under subsection (i)(2) or otherwise that a home or community care provider
  no longer meets the requirements of this section, the Secretary shall impose
  a civil money penalty in an amount not to exceed $10,000 for each day of
  noncompliance. The provisions of section 1128A (other than subsections (a)
  and (b)) shall apply to a civil money penalty under the previous sentence in
  the same manner as such provisions apply to a penalty or proceeding under
  section 1128A(a). The Secretary shall specify criteria, as to when and how
  this remedy is to be applied and the amounts of any penalties. Such criteria
  shall be designed so as to minimize the time between the identification
  of violations and final imposition of the penalties and shall provide
  for the imposition of incrementally more severe penalties for repeated or
  uncorrected deficiencies.
  `(k) SECRETARIAL RESPONSIBILITIES-
  `(1) PUBLICATION OF INTERIM REQUIREMENTS-
  `(A) IN GENERAL- The Secretary shall publish, by December 1, 1991,
  a proposed regulation that sets forth interim requirements, consistent
  with subparagraph (B), for the provision of home and community care and
  for community care settings, including--
  `(i) the requirements of subsection (c)(2) (relating to comprehensive
  functional assessments, including the use of assessment instruments),
  of subsection (d)(2)(E) (relating to qualifications for qualified case
  managers), of subsection (f) (relating to minimum requirements for home
  and community care), of subsection (g) (relating to minimum requirements
  for small community care settings), and of subsection (h) (relating to
  minimum requirements for large community care settings, and
  `(ii) survey protocols (for use under subsection (i)(3)(A)) which relate
  to such requirements.
  `(B) MINIMUM PROTECTIONS- Interim requirements under subparagraph (A) and
  final requirements under paragraph (2) shall assure, through methods other
  than reliance on State licensure processes, that individuals receiving
  home and community care are protected from neglect, physical and sexual
  abuse, financial exploitation, inappropriate involuntary restraint, and
  the provision of health care services by unqualified personnel in community
  care settings.
  `(2) DEVELOPMENT OF FINAL REQUIREMENTS- The Secretary shall develop,
  by not later than October 1, 1992--
  `(A) final requirements, consistent with paragraph (1)(B), respecting the
  provision of appropriate, quality home and community care and respecting
  community care settings under this section, and including at least the
  requirements referred to in paragraph (1)(A)(i), and
  `(B) survey protocols and methods for evaluating and assuring the quality
  of community care settings.
The Secretary may, from time to time, revise such requirements, protocols,
and methods.
  `(3) NO DELEGATION TO STATES- The Secretary's authority under this subsection
  shall not be delegated to States.
  `(4) NO PREVENTION OF MORE STRINGENT REQUIREMENTS BY STATES- Nothing in this
  section shall be construed as preventing States from imposing requirements
  that are more stringent than the requirements published or developed by
  the Secretary under this subsection.
  `(l) DEEMING AND WAIVER-
  `(1) DEEMING- Area agencies on aging as defined in the Older Americans
  Act (Public Law 100-175) are considered public agencies for purposes of
  this section.
  `(2) WAIVER-
  `(A) States may waive the requirement that a nonpublic agency not provide
  home and community care or nursing facility services and do not have a
  direct or indirect ownership or control interest in, or direct or indirect
  affiliation or relationship with, an entity that provides, community care
  or nursing facilities for nonprofit agencies located in an area that is
  not an urbanized area (as defined by the Bureau of the Census).
  `(B) States may waive the requirement of section 1902(a)(1) (related to
  State wideness) for a program of home and community care under this section.
  `(m) LIMITATION ON AMOUNT OF EXPENDITURES AS MEDICAL ASSISTANCE-
  `(1) AUTHORIZATION- The amount of funds that may be expended as medical
  assistance to carry out the purposes of this section shall be for fiscal
  year 1991, $10,000,000, for fiscal year 1992, $20,000,000, for fiscal year
  1993, $40,000,000, for fiscal year 1994, $70,000,000, and for fiscal years
  thereafter such sums as provided by Congress.
  `(2) ALLOCATION OF FUNDS- The funds identified for each fiscal year
  (1991, 1992, 1993, 1994, and 1995) will be allocated to each State in the
  proportion of the amount of Federal expenditures made available to the
  State for fiscal year 1989 (as reported on line 6 of the four quarterly
  form HCFA-64 expenditure reports) to the sum of Federal expenditures for
  all States, excluding the territories.'.
  (c) PAYMENT FOR HOME AND COMMUNITY CARE-
  (1) REASONABLE AND ADEQUATE PAYMENT RATES- Section 1902 (42 U.S.C. 1396a)
  is amended--
  (A) in subsection (a)(13)--
  (i) by striking `and' at the end of subparagraph (D),
  (ii) by inserting `and' at the end of subparagraph (E), and
  (iii) by adding at the end the following new subparagraph:
  `(F) for payment for home and community care (as defined in section 1929(a)
  and provided under such section) through rates which are reasonable and
  adequate to meet the costs of providing care, efficiently and economically,
  in conformity with applicable State and Federal laws, regulations, and
  quality and safety standards;'; and
  (B) in subsection (h), by adding before the period at the end the following:
  `or to limit the amount of payment that may be made under a plan under
  this title for home and community care'.
  (2) DENIAL OF PAYMENT FOR CIVIL MONEY PENALTIES, ETC- Section 1903(i)(8)
  of such Act (42 U.S.C. 1396b(i)(8)) is amended by inserting `(A)' after
  `medical assistance' and by inserting before the semicolon at the end the
  following: `or (B) for home and community care to reimburse (or otherwise
  compensate) a provider of such care for payment of a civil money penalty
  imposed under this title or title XI or for legal expenses in defense of
  an exclusion or civil money penalty under this title or title XI if there
  is no reasonable legal ground for the provider's case'.
  (d) CONFORMING AMENDMENTS-
  (1) Section 1902(j) (42 U.S.C. 1396a(j)) is amended by striking `(21)'
  and inserting `(22)'.
  (2) Section 1902(a)(10)(C)(iv) (42 U.S.C. 1396a(a)(10)(C)(iv)) is amended
  by striking `through (20)' and inserting `through (21)'.
  (e) EFFECTIVE DATES-
  (1) Except as provided in this subsection, the amendments made by this
  section shall apply to home and community care furnished on or after July
  1, 1991, without regard to whether or not final regulations to carry out
  such amendments have been promulgated by such date.
  (2)(A) The amendments made by subsection (c)(1) shall apply to home
  and community care furnished on or after July 1, 1991, or, if later, 30
  days after the date of publication of interim regulations under section
  1929(k)(1).
  (B) The amendment made by subsection (c)(2) shall apply to civil money
  penalties imposed after the date of the enactment of this Act.
  (f) WAIVER OF PAPERWORK REDUCTION, ETC- Chapter 35 of title 44, United
  States Code, and Executive Order 12291 shall not apply to information and
  regulations required for purposes of carrying out this Act and implementing
  the amendments made by this Act.
SEC. 6242. COMMUNITY SUPPORTED LIVING ARRANGEMENTS SERVICES.
  (a) PROVISION AS OPTIONAL SERVICE- Section 1905(a) (42 U.S.C. 1396d(a))
  as amended by section 6211 (Home and Community Care) is further amended--
  (1) by striking `and' at the end of paragraph (23);
  (2) by redesignating paragraph (24) as paragraph (25); and
  (3) by inserting after paragraph (23) the following new paragraph:
  `(24) community supported living arrangements services (to the extent
  allowed and as defined in section 1930).'.
  (b) COMMUNITY SUPPORTED LIVING ARRANGEMENTS- Title XIX (42 U.S.C. 1396
  et seq.) as amended by section XXX (Home and Community Care) is further
  amended--
  (1) by redesignating section 1930 as section 1931; and
  (2) by inserting after section 1929 the following new section:
`COMMUNITY SUPPORTED LIVING ARRANGEMENTS SERVICES
  `SEC. 1930. (a) COMMUNITY SUPPORTED LIVING ARRANGEMENTS SERVICES- In
  this title, the term `community supported living arrangements services'
  means one or more of the following services provided in a State eligible
  to provide services under this section (as defined in subsection (d))
  to assist a developmentally disabled individual (as defined in subsection
  (b)) in activities of daily living necessary to permit such individual to
  live in an integrated living environment (as defined in subsection (c))
  furnished in a community supported living arrangement setting:
  `(1) Personal assistance.
  `(2) Training and habilitation services (necessary to assist the individual
  in achieving increased integration, independence and productivity).
  `(3) 24-hour emergency assistance (as defined by the Secretary).
  `(4) Assistive technology.
  `(5) Adaptive equipment.
  `(6) Other services (as approved by the Secretary, except those services
  described in subsection (g)).
  `(b) DEVELOPMENTALLY DISABLED INDIVIDUAL DEFINED- In this title the term,
  `developmentally disabled individual' means an individual who as defined
  by the Secretary is described within the term `mental retardation and
  related conditions' as defined in regulations as in effect on July 1,
  1990, and who is residing with the individual's family or legal guardian
  or in an integrated living environment (as defined in subsection (c))
  in which no more than 3 other recipients of services under this section
  are residing and without regard to whether or not such individual is at
  risk of institutionalization (as defined by the Secretary).
  `(c) INTEGRATED LIVING ENVIRONMENT DEFINED- In this title the term
  `integrated living environment' means an environment located in a
  neighborhood which--
  `(1) is representative of residential neighborhoods in the community; and
  `(2) is populated primarily by individuals other than a developmentally
  disabled individual (as defined in this section).
  `(d) CRITERIA FOR SELECTION OF PARTICIPATING STATES- The Secretary shall
  develop criteria to review the applications of States submitted under this
  section to provide community supported living arrangement services. The
  Secretary shall provide in such criteria that during the first 5 years of
  the provision of services under this section that no less than 4 and no more
  than 8 States shall be allowed to receive Federal financial participation
  for providing the services described in this section.
  `(e) QUALITY ASSURANCE- A State selected by the Secretary to provide services
  under this section shall in order to continue to receive Federal financial
  participation for providing services under this section be required to
  establish and maintain a quality assurance program, that provides that--
  `(1) the State will certify and survey providers of services under this
  section (such surveys to be unannounced and average at least 1 a year);
  `(2) the State will adopt standards for survey and certification that
  include--
  `(A) minimum qualifications and training requirements for provider staff;
  `(B) financial operating standards; and
  `(C) a consumer grievance process;
  `(3) the State will provide a system that allows for monitoring boards
  consisting of providers, family members, consumers, and neighbors; and
  `(4) the State will establish reporting procedures to make available
  information to the public.
The Secretary shall not approve a quality assurance plan under this subsection
and allow a State to continue to receive Federal financial participation
under this section unless the State provides for public hearings  on the
plan prior to adoption and implementation of its plan under this subsection.
  `(f) MAINTENANCE OF EFFORT- States selected by the Secretary to receive
  Federal financial participation to provide services under this section
  shall maintain current levels of spending for such services in order to
  be eligible to continue to receive Federal financial participation for
  the provision of such services under this section.
  `(g) EXCLUDED SERVICES- No Federal financial participation shall be allowed
  for the provision of the following services under this section:
  `(1) Room and board.
  `(2) Cost of prevocational, vocational and supported employment.
  `(h) WAIVER OF REQUIREMENTS- The Secretary may waive such provisions
  of this title as necessary to carry out the provisions of this section
  including  the following requirements of this title--
  `(1) comparability of amount, duration, and scope of services;
  `(2) statewideness; and
  `(3) freedom of choice of providers.
  `(i) TREATMENT OF FUNDS- Any funds expended under this section for medical
  assistance shall be in addition to funds expended for any existing services
  covered under the State plan, including any waiver services for which an
  individual receiving services under this program is already eligible.
  `(j) LIMITATION ON AMOUNTS OF EXPENDITURES AS MEDICAL ASSISTANCE- The
  amount of funds that may be expended as medical assistance to carry out
  the purposes of this section shall be for fiscal year 1991, $5,000,000,
  for fiscal year 1992, $10,000,000, for fiscal year 1993, $20,000,000,
  for fiscal year 1994, $35,000,000, and for fiscal years thereafter such
  sums as provided by Congress.'.
  (c) EFFECTIVE DATE-
  (1) IN GENERAL- The amendments made by this section shall apply to
  community supported living arrangements services furnished on or after
  July 1, 1991, without regard to whether or not final regulations to carry
  out such amendments have been promulgated by such date.
  (2) APPLICATION PROCESS- The Secretary of Health and Human Services shall
  provide that the applications required to be submitted by States under
  this section shall be received and approved prior to the effective date
  specified in paragraph (1).
SEC. 6243. MEDICAID COVERAGE OF PERSONAL CARE SERVICES OUTSIDE THE HOME.
  (a) IN GENERAL- Section 1905(a)(7) (42 U.S.C. 1396d(a)(7)) is amended by
  striking `services' and inserting `services including personal care services
  (A) prescribed by a physician for an individual in accordance with a plan
  of treatment, (B) provided by an individual who is qualified to provide such
  services and who is not a member of the individual's family, (C) supervised
  by a registered nurse, and (D) furnished in a home or other location; but not
  including such services furnished to an inpatient or resident of a nursing
  facility, such as adult day care settings or congregate living arrangements'.
  (b) EFFECTIVE DATE- The amendment made by this section shall become
  effective with respect to home health care services provided on or after
  January 1, 1991 and shall expire with respect and services provided on or
  after December 31, 1993.
PART VI--NURSING HOME REFORM
SEC. 6251. MEDICAID NURSING HOME REFORM PROVISIONS.
  (a) NURSE AIDE TRAINING AMENDMENTS-
  (1) NO COMPLIANCE ACTIONS BEFORE EFFECTIVE DATE OF FINAL REGULATIONS- The
  Secretary of Health and Human Services (hereafter in this section referred
  to as the `Secretary') shall not take (and shall not continue) any action
  against a State under section 1904 of the Social Security Act on the basis of
  the State's failure to meet the requirement of section 1919(e)(1)(A) of such
  Act before the effective date of final regulations, issued by the Secretary,
  establishing requirements under section 1919(f)(2)(A)(ii)(I) of such Act,
  if the State demonstrates to the satisfaction of the Secretary that it has
  made a good faith effort to meet such requirement before such effective date.
  (2) PART-TIME NURSE AIDES NOT ALLOWED DELAY IN TRAINING- Section
  1919(b)(5)(A) (42 U.S.C. 1396r(b)(5)(A)) is amended--
  (A) by striking `, temporary, per diem, or other';
  (B) by inserting `(i)' after `(A)';
  (C) by redesignating clauses `(i)' and `(ii)' as subclauses `(I)' and
  `(II)' respectively; and
  (D) by adding at the end the following:
  `(ii) EXCEPTION- A nursing facility must not use on a temporary, per diem,
  or on any other than a full-time basis any individual as a nurse aide in
  the facility on or after January 1, 1991, unless the individual meets the
  requirements described in clause (i) (I) and (II).'.
  (3) EXTENSION OF ENHANCED MATCH RATE UNTIL OCTOBER 1, 1990- Section
  1903(a)(2)(B) (42 U.S.C. 1396b(a)(2)(B)) is amended by striking `July 1,
  1990' and inserting `October 1, 1990'.
  (4) CLARIFICATION OF PERMISSIBLE CHARGES FOR TRAINING OF AIDES
  NOT YET EMPLOYED BY A FACILITY- Section 1919(f)(2)(A)(iv)(II) (42
  U.S.C. 1396r(f)(2)(A)(iv)(II)) is amended by striking `such program' and
  inserting `such program, except that an accredited, nonfacility based program
  may impose such charges on individuals who are not presently employed by
  a nursing facility or who have not yet had an offer for future employment
  at such a facility'.
  (5) REIMBURSEMENT TO CERTAIN INDIVIDUALS TRAINED PRIOR TO EMPLOYMENT-
  Add to section 1919(f)(2)(A)(iv) a new subclause (III) as follows:
  `(III) For individuals employed or under contract for employment as a nurse
  aide within 12 months after successful completion of a nonfacility-based,
  State-approved nurse aide training and competency evaluation program,
  the State must ensure that the costs incurred by such individuals for such
  programs are reimbursed to such individuals.
  (6) CLARIFICATION OF STATE RESPONSIBILITY TO DETERMINE COMPETENCY- Section
  1919(f)(2)(B) (42 U.S.C. 1396r(f)(2)(B)) is amended, in the second sentence,
  by inserting `(through subcontract or otherwise)' after `may not delegate'.
  (7) NURSE AIDE REGISTRY-
  (A) IN GENERAL- Section 1919(b)(5)(C) (42 U.S.C. 1396r(b)(5)(C)) is
  amended by adding at the end the following new sentence: `In the case
  of an individual who a nursing facility is considering employing as a
  nurse aide and who the facility has reason to believe is from a State
  other than the State in which the facility is located, such a facility
  shall not use such an individual as a nurse aide unless the facility has
  inquired concerning such individual of the State registry established under
  subsection (e)(2)(A) of the State from which such facility has reason to
  believe such individual resided'.
  (B) DEEMED AIDES TO BE INCLUDED ON REGISTRY- Section 1919(e)(2)(A) (42
  U.S.C. 1396r(e)(2)(A)) is amended by striking `individuals' and inserting
  `individuals (including those individuals deemed under section 6901(b)(4)
  (B), (C), and (D) of the Omnibus Budget Reconciliation Act of 1989 to
  have satisfied the training and competency evaluation program requirements
  under this section)'.
  (8) RETRAINING OF NURSE AIDES NOT EMPLOYED- Section 1919(b)(5)(D) (42
  U.S.C. 1396r(b)(5)(D)) is amended by striking the period and inserting
  the following `, or a new competency evaluation program.'.
  (9) FACILITIES INELIGIBLE TO OFFER TRAINING PROGRAMS- Section 1919(f)(2)
  (42 U.S.C. 1396(f)(2)) is amended--
  (A) in subparagraph (B)(iii), by amending subclause (I) to read as follows:
  `(I) offered by or in a nursing facility described in subparagraph (C),
  or'; and
  (B) by adding after subparagraph (B) the following new subparagraph:
  `(C) NURSING FACILITIES INELIGIBLE TO OFFER PROGRAMS- A nursing facility
  shall be ineligible to offer a program under this paragraph--
  `(i) if at any time on or after October 1, 1988, the State agency or the
  Secretary terminated or terminates the facility's provider agreement under
  this title or title XVIII, until after the end of a period of at least
  two years following reinstatement, during which period--
  `(I) no survey or investigation finds any deficiencies warranting
  termination, and
  `(II) at least one standard survey is conducted pursuant to subsection
  (g); or
  `(ii) if the facility--
  `(I) received a notice of termination of its provider agreement under this
  title or title XVIII from the State agency or the Secretary at any time
  during the one-year period ending September 30, 1990, or
  `(II) is found, pursuant to a standard survey or investigation under
  subsection (g) or section 1819(g), to have deficiencies resulting in a
  civil money penalty in excess of $5,000, denial of payment, or appointment
  of temporary management pursuant to subsection (h)(2)(A) or to section
  1819(h)(2)(B),
until after the completion of a subsequent standard survey under subsection
(g) which finds no such deficiencies.'.
  (b) PREADMISSION SCREENING AND RESIDENT REVIEW-
  (1) NO DELEGATION OF AUTHORITY TO CONDUCT SCREENING AND REVIEWS- Section
  1919 (42 U.S.C. 1396r) is amended--
  (A) in subsection (b)(3)(f), by adding at the end the following:
`A State mental health authority and a State mental retardation or
developmental disability authority may not delegate (by subcontract or
otherwise) their responsibilities under this subparagraph to a nursing facility
(or to an entity that has a direct or indirect affiliation or relationship
with such a facility).'; and
  (B) in subsection (e)(7)(B), by adding at the end the following new clause:
  `(iv) PROHIBITION OF DELEGATION- A State mental health authority, a State
  mental retardation or developmental disability authority, and a State may
  not delegate (by subcontract or otherwise) their responsibilities under
  this subparagraph to a nursing facility (or to an entity that has a direct
  or indirect affiliation or relationship with such a facility).'.
  (2) NO COMPLIANCE ACTIONS BEFORE EFFECTIVE DATE OF FINAL REGULATIONS-
  The Secretary shall not take (and shall not continue) any action against
  a State under section 1904 or section 1919(e)(7)(D) of the Social Security
  act on the basis of the State's failure to meet the requirement of section
  1919(e)(7)(A) of such Act before the effective date of final regulations,
  issued by the Secretary, establishing minimum criteria under section
  1919(f)(8)(A) of such Act, if the State demonstrates to the satisfaction of
  the Secretary that it has made a good faith effort to meet such requirement
  before such effective date.
  (3) REVISION OF ALTERNATIVE DISPOSITION PLANS- Section 1919(e)(7)(E)
  (42 U.S.C. 1396r(e)(7)(E)) is amended by adding at the end the following:
  `The State may revise such an agreement, subject to the approval of the
  Secretary, before April 1, 1991, but only if, under the revised agreement,
  all residents subject to the agreement who do not require the level of
  services of such a facility are discharged from the facility by not later
  than April 1, 1994'.
  (4)(A) STATE REPORTS REQUIRED- Section 1919(e)(7)(C) (42
  U.S.C. 1396r(e)(7)(C)) is amended by adding at the end the following
  new clause:
  `(iv) ANNUAL REPORT- Each State shall report to the Secretary annually
  concerning the number and disposition of residents described in each of
  clauses (ii) and (iii).'.
  (B) SUMMARY OF REPORTS- Section 4215 of the Omnibus Budget Reconciliation
  Act of 1987 is amended by adding at the end the following new sentence:
  `Each such report shall also include a summary of the information reported
  by States under section 1919(e)(7)(C)(iv) of such Act'.
  (5) DEFINITION OF MENTALLY ILL- Section 1919(e)(7)(G)(i) (42
  U.S.C. 1396r(e)(7)(G)(i)) is amended--
  (A) by striking `primary or secondary' and all that follows through
  `3rd edition)' and inserting `serious mental illness (as defined by the
  Secretary in consultation with the National Institute of Mental Health)',
  (B) by inserting before the period `or a diagnosis (other than a primary
  diagnosis) of dementia and a primary diagnosis that is not a serious
  mental illness'.
  (6) SUBSTITUTION OF `SPECIALIZED SERVICES' FOR `ACTIVE TREATMENT'- Sections
  1919(b)(3)(F) and 1919(e)(7) (42 U.S.C. 1396r(b)(3)(F), 1396r(e)(7)) are
  each amended by striking `active treatment' and `ACTIVE TREATMENT' each
  place either appears and inserting `specialized services' and `SPECIALIZED
  SERVICES', respectively.
  (7) CLARIFICATION WITH RESPECT TO ADMISSIONS AND READMISSION FROM A HOSPITAL-
  Section 1919 (42 U.S.C. 1396r) is amended--
  (A) in subsection (b)(3)(F), by striking `A nursing facility' and by
  inserting `Except as provided in clauses (ii) and (iii) of subsection
  (e)(7)(A), a nursing facility'; and
  (B) in subsection (e)(7)(A)--
  (i) by redesignating the first 2 sentences as clause (i) with the following
  heading (and appropriate indentation):
  `(i) IN GENERAL- ', and
  (ii) by adding at the end the following:
  `(ii) CLARIFICATION WITH RESPECT TO CERTAIN READMISSIONS- The preadmission
  screening program under clause (i) need not provide for determinations in
  the case of the readmission to a nursing facility of an individual who,
  after being admitted to the nursing facility, was transferred for care in
  a hospital.
  `(iii) EXCEPTION FOR CERTAIN HOSPITAL DISCHARGES- The preadmission screening
  program under clause (i) shall not apply to the admission to a nursing
  facility of an individual--
  `(I) who is admitted to the facility directly from a hospital after
  receiving acute inpatient care at the hospital,
  `(II) who requires nursing facility services for the condition for which
  the individual received care in the hospital, and
  `(III) whose attending physician has certified, before admission to the
  facility, that the individual is likely to require less than 30 days of
  nursing facility services.'.
  (c) FACILITY STAFFING-
  (1) STANDARDS FOR CERTAIN PROFESSIONAL SERVICES- The Secretary shall
  conduct a study on the hiring and dismissal practices if nursing facilities
  with respect to social workers, dieticians, activities professionals, and
  medical records practitioners, and report to Congress by January 1, 1993,
  on whether facilities have on their staffs, persons with significantly
  different credentials as a result of new regulations that became effective
  October 1, 1990, and the impact of staff composition on quality of care.
  (2) ADDITIONAL REQUIREMENTS WITH RESPECT TO MEDICAID NURSE STAFFING WAIVERS-
  Section 1919(b)(4)(C)(ii) (42 U.S.C. 1369r(b)(4)(C)(ii)) is amended--
  (A) by striking `and' at the end of subclause (II);
  (B) by striking the period at the end of subclause (III) and by inserting
  in lieu thereof a comma; and
  (C) by adding at the end thereof the following new subclauses:
  `(IV) the State agency granting a waiver of such requirement provide
  notice of the waiver to the appropriate State and substate long-term care
  ombudsman, to the protection and advocacy system and other appropriate
  State and private agencies; and
  `(V) a nursing facility that is granted such a waiver by a State is required
  to make reasonable efforts to notify present and prospective residents
  of the facility (or a guardian or legal representative of such residents)
  of the waiver.'.
  (3) STUDY ON STAFFING REQUIREMENTS IN NURSING FACILITIES- The Secretary
  shall conduct a study and report to Congress no later than January 1, 1992,
  on the appropriateness of establishing minimum caregiver to resident ratios
  and minimum supervisor to caregiver ratios for nursing facilities receiving
  payments under a State plan under title XIX of the Social Security Act. If
  the Secretary determines that the establishment of such minimum ratios is
  advisable, the Secretary shall specify in the report provided for in this
  subsection appropriate ratios or standards.
  (d) MISCELLANEOUS-
  (1) DELAY IN REQUIREMENT FOR REMEDIES- Section 1919(h)(2)(B)(i) (42
  U.S.C. 1396r(h)(2)(B)(i) is amended by striking `October 1, 1989' and
  inserting `April 1, 1991'.
  (2) RESIDENT ACCESS TO CLINICAL RECORDS- Section 1919(c)(1)(A)(iv) (42
  U.S.C. 1396r(c)(1)(A)(iv)) is amended by inserting before the period at
  the end the following: `and access to current clinical records of the
  resident promptly upon reasonable request (as defined by the Secretary)
  by the resident or resident's legal representative'.
  (3) OMBUDSMAN PROGRAM COORDINATION WITH STATE MEDICAID AND SURVEY AND
  CERTIFICATION AGENCIES- Section 1919(g)(5)(B) (42 U.S.C. 1396r(g)(5)(B))
  deleted and replaced with:
  `(B) NOTICE TO OMBUDSMAN- Each State agency with an agreement with
  the Secretary under this section shall enter into a written agreement
  with the Office of the State Long-Term Care Ombudsman (as defined by the
  Older Americans Act), to provide for information exchange, case referral,
  and prompt notification of the office of any adverse action to be taken
  against a nursing facility.'.
  (4) PERIOD FOR RESIDENT ASSESSMENT- Section 1919(b)(3)(C)(i)(I) (42
  U.S.C. 1396r(b)(3)(C)(i)(I) is amended by striking `4 days' and inserting
  `14 days'.
  (e) EFFECTIVE DATES- (1) Except as provided in paragraphs (2) and (3),
  the amendments made by this section are effective on April 1, 1991.
  (2) Paragraphs (1), (3), and (9) of subsection (a); paragraphs (2), (3),
  and (7) of subsection (b); paragraph (2) of subsection (c); and paragraphs
  (1) and (4) of subsection (d) are effective as if included in the Omnibus
  Budget Reconciliation Act of 1987.
  (3) Subsections (b)(4), (c)(1), and (c)(3) are effective upon enactment.
PART VII--MISCELLANEOUS AND TECHNICAL PROVISIONS
SEC. 6261. DEMONSTRATION PROJECTS TO STUDY THE EFFECT OF ALLOWING STATES
TO EXTEND MEDICAID COVERAGE TO CERTAIN LOW-INCOME FAMILIES NOT OTHERWISE
QUALIFIED TO RECEIVE MEDICAID BENEFITS.
  (a) DEMONSTRATION PROJECTS-
  (1) IN GENERAL- (A) The Secretary of Health and Human Services (hereafter
  in this section referred to as the `Secretary') shall enter into agreements
  with at least 3 and no more than 4 States for the purpose of conducting
  demonstration projects to study the effect on access to, and costs of,
  health care of eliminating the categorical eligibility requirement for
  medicaid benefits for certain low-income individuals.
  (B) In entering into agreements with States under this section the Secretary
  shall provide that at least 1 and no more than 2 of the projects are
  conducted on a substate basis, and that such projects target areas which
  contain a high percentage of racial or ethnic minorities.
  (2) REQUIREMENTS- (A) The Secretary may not enter into an agreement with
  a State to conduct a project unless the Secretary determines that--
  (i) the project can reasonably be expected to improve access to health
  insurance coverage for the uninsured;
  (ii) with respect to projects for which the statewideness requirement
  has not been waived, the State provides, under its plan under title
  XIX of the Social Security Act, for eligibility for medical assistance
  for all individuals described in subparagraphs (A), (B), (C), and (D)
  of paragraph (1) of section 1902(l) of such Act (based on the State's
  election of certain eligibility options the highest income standards and,
  based on the State's waiver of the application of any resource standard);
  (iii) eligibility for benefits under the project is limited to individuals in
  families with income below 150 percent of the income official poverty line;
  (iv) if the Secretary determines that it is cost-effective for the project
  to utilize employer coverage (as described in section 1925(b)(4)(D) of the
  Social Security Act), the project must require an employer contribution and
  benefits under the State plan under title XIX of such Act will continue to
  be made available to the extent they are not available under the employer
  coverage;
  (v) the project provides for coverage of benefits consistent with subsection
  (b); and
  (vi) the project only imposes premiums, coinsurance, and other cost-sharing
  consistent with subsection (c).
  (B) The Secretary may waive the requirements of clause (ii) of this
  paragraph with respect to those projects described in subparagraph (B)
  of paragraph (1).
  (3) PERMISSIBLE RESTRICTIONS- A project may limit eligibility to individuals
  whose assets are valued below a level specified by the State. For this
  purpose, any evaluation of such assets shall be made in a manner consistent
  with the standards for valuation of assets under the State plan under title
  XIX of the Social Security Act for individuals entitled to assistance under
  part A of title IV of such Act. Nothing in this section shall be construed
  as requiring a State to provide for eligibility for individuals for months
  before the month in which such eligibility is first established.
  (4) EXTENSION OF ELIGIBILITY- A project may provide for extension of
  eligibility for medical assistance for individuals covered under the
  project in a manner similar to that provided under section 1925 of the
  Social Security Act to certain families receiving aid pursuant to a plan
  of the State approved under part A of title IV of such Act.
  (5) WAIVER OF REQUIREMENTS-
  (A) IN GENERAL- Subject to subparagraph (B), the Secretary may waive such
  requirements of title XIX of the Social Security Act as may be required
  to provide for additional coverage of individuals under projects under
  this section.
  (B) NONWAIVABLE PROVISIONS- Except with respect to those projects described
  in subparagraph (B) of paragraph (1), the Secretary may not waive, under
  subparagraph (A), the statewideness requirement of section 1902(a)(1)
  of the Social Security Act or the Federal medical assistance percentage
  specified in section 1905(b) of such Act.
  (b) BENEFITS-
  (1) IN GENERAL- Except as provided in this subsection, the amount, duration,
  and scope of medical assistance made available under a project shall be the
  same as the amount, duration, and scope of such assistance made available
  to individuals entitled to medical assistance under the State plan under
  section 1902(a)(10)(A)(i) of the Social Security Act.
  (2) LIMITS ON BENEFITS-
  (A) REQUIRED- Except with respect to those projects described in subparagraph
  (B) of paragraph (1), no medical assistance shall be made available under
  a project for nursing facility services or community-based long-term
  care services (as defined by the Secretary) or for pregnancy-related
  services. No medical assistance shall be made available under a project
  to individuals confined to a State correctional facility, county jail,
  local or county detention center, or other State institution.
  (B) PERMISSIBLE- A State, with the approval of the Secretary, may limit or
  otherwise deny eligibility for medical assistance under the project and may
  limit coverage of items and services under the project, other than early
  and periodic screening, diagnostic, and treatment services for children
  under 18 years of age.
  (3) USE OF UTILIZATION CONTROLS- Nothing in this subsection shall
  be construed as limiting a State's authority to impose controls over
  utilization of services, including preadmission requirements, managed care
  provisions, use of preferred providers, and use of second opinions before
  surgical procedures.
  (c) PREMIUMS AND COST-SHARING-
  (1) NONE FOR THOSE WITH INCOME BELOW THE POVERTY LINE- Under a project,
  there shall be no premiums, coinsurance, or other cost-sharing for
  individuals whose family income level does not exceed 100 percent of the
  income official poverty line (as defined in subsection (g)(1)) applicable
  to a family of the size involved.
  (2) LIMIT FOR THOSE WITH INCOME ABOVE THE POVERTY LINE- Under a project,
  for individuals whose family income level exceeds 100 percent, but is
  less than 150 percent, of the income official poverty line applicable to
  a family of the size involved, the monthly average amount of premiums,
  coinsurance, and other cost-sharing for covered items and services shall
  not exceed 3 percent of the family's average gross monthly earnings.
  (3) INCOME DETERMINATION- Each project shall provide for determinations of
  income in a manner consistent with the methodology used for determinations of
  income under title XIX of the Social Security Act for individuals entitled
  to benefits under part A of title IV of such Act.
  (d) DURATION- Each project under this section shall commence not later
  than July 1, 1991 and shall be conducted for a 3-year period; except that
  the Secretary may terminate such a project if the Secretary determines
  that the project is not in substantial compliance with the requirements
  of this section.
  (e) LIMITS ON EXPENDITURES AND FUNDING-
  (1) IN GENERAL- (A) The Secretary in conducting projects shall limit the
  total amount of the Federal share of benefits paid and expenses incurred
  under title XIX of the Social Security Act to no more than $12,000,000 in
  each of fiscal years 1991, 1992, and 1993, and to no more than $4,000,000
  in fiscal year 1994.
  (B) Of the amounts appropriated under subparagraph (A), the Secretary
  shall provide that no more than one-third of such amounts shall be used
  to carry out the projects described in paragraph (1)(B) of subsection (a)
  (for which the statewideness requirement has been waived).
  (2) NO FUNDING OF CURRENT BENEFICIARIES- No funding shall be available
  under a project with respect to medical assistance provided to individuals
  who are otherwise eligible for medical assistance under the plan without
  regard to the project.
  (3) NO INCREASE IN FEDERAL MEDICAL ASSISTANCE PERCENTAGE- Payments to
  a State under a project with respect to expenditures made for medical
  assistance made available under the project may not exceed the Federal
  medical assistance percentage (as defined in section 1905(b) of the Social
  Security Act) of such expenditures.
  (f) EVALUATION AND REPORT-
  (1) EVALUATIONS- For each project the Secretary shall provide for an
  evaluation to determine the effect of the project with respect to--
  (A) access to, and costs of, health care,
  (B) private health care insurance coverage, and
  (C) premiums and cost-sharing.
  (2) REPORTS- The Secretary shall prepare and submit to Congress an interim
  report on the status of the projects not later than January 1, 1993,
  and a final report containing such summary together with such further
  recommendations as the Secretary may determine appropriate not later than
  January 1, 1995.
  (g) DEFINITIONS- In this section:
  (1) The term `income official poverty line' means such line as defined
  by the Office of Management and Budget and revised annually in accordance
  with section 673(2) of the Omnibus Budget Reconciliation Act of 1981.
  (2) The term `project' refers to a demonstration project under subsection
  (a).
SEC. 6262. MEDICAID RESPITE DEMONSTRATION PROJECT EXTENDED.
  Section 9414 of the Omnibus Budget Reconciliation Act of 1986 is amended--
  (1) by amending subsection (e) to read as follows:
  `(e) DURATION- The project under this section may continue until September
  30, 1992.'; and
  (2) in subsection (d), by striking the last sentence and inserting in lieu
  thereof the following new sentence: `For the period beginning October 1,
  1990, and ending September 30, 1992, Federal payments for the project shall
  not exceed amounts expended under the project in the preceding fiscal year.'.
SEC. 6263. DEMONSTRATION PROJECT TO PROVIDE MEDICAID COVERAGE FOR HIV-POSITIVE
INDIVIDUALS, AND CERTAIN PREGNANT WOMEN DETERMINED TO BE AT RISK OF CONTRACTING
THE HIV VIRUS.
  (a) IN GENERAL- Not later than 3 months after the date of the enactment
  of this Act, the Secretary of Health and Human Services (hereafter in this
  section referred to as the `Secretary') shall provide for  2 demonstration
  projects to be administered by States that submit an application under
  this section, through programs administered by the States under title
  XIX of the Social Security Act. Such demonstration projects shall provide
  coverage for the services described in subsection (c) to individuals--
  (1) whose income and resources do not exceed the maximum allowable amount
  for eligibility for any individual in any category of disability under the
  State plan under section 1902 of the Social Security Act, and who have tested
  positive for the presence of HIV virus (without regard to the presence of
  any symptoms of AIDS or opportunistic diseases related to AIDS); or
  (2) who are pregnant women with multiple medical and psychosocial needs
  who have not attained the age of 19, and are determined to be at risk of
  HIV infection because of substance abuse.
  (b) SERVICES AVAILABLE UNDER A DEMONSTRATION PROJECT- (1) The medical
  assistance made available to individuals described in section 1902(a)(10)(A)
  of the Social Security Act shall be made available to individuals described
  in subsection (a) who receive services under a demonstration project under
  such paragraph.
  (2) A demonstration project under subsection (a) shall provide services
  in addition to the services described in paragraph (1) which shall be
  limited only on the basis of medical necessity or the appropriateness of
  such services. To the extent not provided as described in paragraph (1),
  such additional services shall include--
  (A) general and preventative medical care services (including inpatient,
  outpatient, residential and hospice care);
  (B) prescription drugs, including drugs for the purposes of preventative
  health care services;
  (C) counseling and social services;
  (D) substance abuse treatment services (including services for multiple
  substances abusers);
  (E) home care services (including assistance in carrying out activities
  of daily living);
  (F) case management;
  (G) health education services;
  (H) respite care for caregivers; and
  (I) dental services.
  (c) AGREEMENTS WITH STATES- (1) Each State conducting a demonstration
  project under subsection (a) shall enter into an agreement with hospitals
  submitting applications to the State, whereby the State shall agree to pay
  each such hospital for the services provided under subsection (b) and not
  later than 12 months after the commencement of a demonstration project,
  institute a system of monthly payment to each such hospital based on the
  average per capita cost of the services described in subsection (c) provided
  to individuals described in paragraphs (1) and (2) of subsection (a).
  (2) A demonstration project described in subsection (a) shall be limited
  to an enrollment of not more than 200 individuals.
  (3) A demonstration project conducted under subsection (a) shall commence
  not later than 9 months after the date of the enactment of this Act and
  shall terminate on the date that is 3 years after the date of commencement.
  (d) FEDERAL SHARE OF COSTS- The Federal share of the cost of services
  described in paragraph (3) furnished under a demonstration project conducted
  under paragraph (1) shall be determined by the otherwise applicable Federal
  matching assistance percentage pursuant to section 1905(b) of the Social
  Security Act.
  (e) WAIVER OF REQUIREMENTS OF THE SOCIAL SECURITY ACT- The Secretary
  may waive such requirements of the Social Security Act as the Secretary
  determines to be necessary to carry out the purposes of this section.
SEC. 6264. MENTAL HEALTH FACILITY CERTIFICATION DEMONSTRATION PROJECT.
  (a) The Secretary of Health and Human Services (hereafter in this section
  referred to as the `Secretary') shall establish, in consultation with the
  Council on Accreditation of Services for Families and Children, the Joint
  Commission on Accreditation of Healthcare Organizations, the Commission
  on Accreditation of Rehabilitation Facilities, the Association of Health
  Facilities Licensure and Certification Directors, the National Governors
  Association, the National Association of State Mental Health Program
  Directors, Protection and Advocacy Systems, organizations representing
  consumers and recipients of services under title XIX of the Social Security
  Act, and other interested parties, criteria for authorizing accrediting
  bodies to determine facility compliance with standards established or
  authorized under this title and conduct a 5-State, 3-year demonstration
  program in which certification to participate in the program may be granted
  to mental health facilities, as defined in subsection (e), based upon a
  finding by such accrediting bodies that a mental health facility is in
  compliance with standards established or authorized under title XIX of
  the Social Security Act.
  (b)(1) Prior to initiating such demonstration program, the Secretary shall
  establish such criteria that ensure, at a minimum, that--
  (A) in addition to routine accreditation reviews, there are annual
  unannounced visits to evaluate continued compliance with accreditation
  standards, and such accrediting body shall submit its report to appropriate
  Government agencies;
  (B) the public and State licensure and certification officials have
  prompt access to all documents describing the findings of inspection by
  accreditation teams and confidential information pertaining to client or
  patient names has been deleted prior to release of these documents;
  (C) health and safety deficiencies shall be fully documented and reported
  to State licensure and certification authorities immediately upon being
  discovered;
  (D) complaints filed by recipients of covered services, their advocates, or
  the general public that may affect continued compliance with accreditation
  standards shall be investigated promptly by the accrediting body;
  (E) complaints not related to accreditation standards and all complaints
  related to health and safety shall be reported to the appropriate State
  and local authorities in a timely manner;
  (F) any changes in a facility's accreditation status shall be reported to
  State licensure and certification officials; and
  (G) periodic unannounced inspections by State licensing and certification
  officials take place to evaluate compliance with conditions of participation
  in this title.
  (2) The Secretary shall, in developing criteria, also address types of
  standards, reporting requirements, duration of accreditation, and other
  considerations.
  (c) The Secretary shall publish proposed criteria developed pursuant to
  subsection (b) in the Federal Register not later than 9 months from the
  date of enactment of this section, and shall provide not more than 90 days
  for public comment on the proposed criteria.
  (d) Not later than 180 days prior to termination of the demonstration program
  established in subsection (a), the Secretary shall submit a report to the
  Committee on Finance of the Senate evaluating the accreditation process,
  including--
  (1) the extent to which--
  (A) accrediting bodies and facilities have participated in the program;
  (B) facilities have complied with standards;
  (C) there has been an impact on care and access to services; and
  (D) problems with, and prospects for, collaboration between accreditation
  bodies and State survey and certification officials where quality problems
  have been documented, and with respect to facilities where complaints have
  been filed by consumers or their advocates; and
  (2) such recommendations as the Secretary deems appropriate.
  (e) The term `mental health facilities', or `facility' shall mean for
  purposes of this demonstrative project only, a facility or part of a facility
  which provides, in an organized setting, outpatient mental health services,
  outpatient substance abuse and alcoholism services, residential treatment
  services for children, or day treatment services for children.
SEC. 6265. OPTIONAL STATE MEDICAID DISABILITY DETERMINATIONS INDEPENDENT OF
THE SOCIAL SECURITY ADMINISTRATION.
  (a) IN GENERAL- Section 1902 (42 U.S.C. 1396a) as amended by section 6201
  is further amended by adding at the end the following new subsection:
  `(t)(1) A State plan may provide for the making of determinations of
  disability or blindness for the purpose of determining eligibility for
  medical assistance under the State plan by the single State agency or its
  designee, and make medical assistance available to individuals whom it finds
  to be blind or disabled and who are determined otherwise eligible for such
  assistance during the period of time prior to which a final determination
  of disability or blindness is made by the Social Security Administration
  with respect to such an individual. In making such determinations, the
  State must apply the definitions of disability and blindness found in
  section 1614(a) of the Social Security Act.'.
  (b) STUDY OF MEDICAID DISABILITY DEFINITION- (1) The General Accounting
  Office shall conduct a study of the appropriateness of the use of
  the definition of disability and blindness (including the durational
  requirement) found in section 1614(a) of the Social Security Act for
  purposes of eligibility for medical assistance under title XIX of the
  Social Security Act.
  (2) By no later than January 1, 1992, the GAO shall submit a report to
  Congress and to the Secretary of Health and Human Services on its study
  and shall include its recommendations, if any.
SEC. 6266. MEDICALLY NEEDY INCOME LEVELS FOR CERTAIN  MEMBER FAMILIES.
  (a) IN GENERAL- For purposes of section 1903(f)(1)(B) of the Social Security
  Act, for payments made before, on, or after the date of the enactment of
  this Act, a State described in subparagraph (B) may use, in determining the
  `highest amount which would ordinarily be paid to a family of the same size'
  (under the State's plan approved under part A of title IV of such Act)
  in the case of a family consisting only of one individual and without
  regard to whether or not such plan provides for aid to families consisting
  only of one individual, an amount reasonably related to the highest money
  payment which would ordinarily be made under such a plan to a family of
  two without income or resources.
  (b) STATES COVERED- Subparagraph (A) shall only apply to a State the State
  plan of which (under title XIX of the Social Security Act) as of June 1,
  1989, provided for the policy described in such subparagraph. For purposes
  of the previous sentence, a State plan includes all the matter included in
  a State plan under section 2373(c)(5) of the Deficit Reduction Act of 1984
  (as amended by section 9 of the Medicare and Medicaid Patient and Program
  Protection Act of 1987).
SEC. 6267. MEDICAID SPENDDOWN OPTION.
  Section 1903(f)(2) (42 U.S.C. 1396b(f)(2)) is amended by--
  (1) inserting `(A)' after `(2)'; and
  (2) by adding before the period at the end the following: `or, (B) at
  State option, an amount paid by such family, at the family's option,
  to the State, provided that the amount, when combined with prior months'
  incurred bills, is sufficient to meet the applicable income limitation
  described in paragraph (1). The amount of State expenditures for which
  Federal medical assistance payments is available under subsection (a)(1)
  will be reduced by amounts collected pursuant to this subparagraph.'
SEC. 6268. LIMITATION ON DISALLOWANCES OR DEFERRAL OF FEDERAL FINANCIAL
PARTICIPATION FOR CERTAIN INPATIENT PSYCHIATRIC HOSPITAL SERVICES FOR
INDIVIDUALS UNDER AGE 21.
  (a) IN GENERAL- (1) If the Secretary of Health and Human Services makes
  a determination that a psychiatric facility has failed to comply with
  certification of need requirements for inpatient psychiatric hospital
  services for individuals under age 21 pursuant to section 1905(h) of the
  Social Security Act, and such determination has not been subject to a
  final judicial decision, any disallowance or deferral of Federal financial
  participation under such Act based on such determination shall only apply to
  the period of time beginning with the first day of noncompliance and ending
  with the date by which the psychiatric facility develops documentation
  (using plan of care or utilization review procedures) of the need for
  inpatient care with respect to such individuals.
  (2) Any disallowance of Federal financial participation under title XIX of
  the Social Security Act relating to the failure of a psychiatric facility
  to comply with certification of need requirements--
  (A) shall not exceed 25 percent of the amount of Federal financial
  participation for the period described in paragraph (1); and
  (B) shall not apply to any fiscal year before the fiscal year that is 3
  years before the fiscal year in which the determination of noncompliance
  described in paragraph (1) is made.
  (b) EFFECTIVE DATE- Subsection (a) shall apply to disallowance actions that
  are pending or for which there has not been a final judicial decision as
  of the date of the enactment of this Act.
SEC. 6269. 5-YEAR EXTENSION OF CERTAIN WAIVER.
  (a) IN GENERAL- Section 507 of the Family Support Act of 1988 is amended
  by striking `1991' and inserting `1996'.
  (b) CONFORMING AMENDMENT- Section 1903(m)(6)(A) (42 U.S.C. 1396b(m)(6)(A))
  is amended by striking `State of New Jersey' and inserting `States of New
  Jersey and Minnesota'.
SEC. 6270. MEDICAID LONG-TERM CARE INSURANCE DEMONSTRATION PROJECT.
  (a) IN GENERAL- The Secretary of Health and Human Services (hereafter in this
  section referred to as the `Secretary') shall provide for a demonstration
  project in the States of Indiana, Illinois, Wisconsin, Oregon, California,
  Connecticut, Massachusetts, Missouri, New York, and New Jersey. Such project
  shall allow  individuals with income and resources above eligibility
  levels for receipt of medical assistance under title XIX of the Social
  Security Act to receive long-term care benefits under the State plan for
  medical assistance under such Act if such an individual purchases a State
  approved long-term care insurance policy covering long-term care for a
  period preceding such an individual's eligibility for medical assistance
  under title XIX of the Social Security Act.
  (b) WAIVER OF CERTAIN REQUIREMENTS- The Secretary in providing for the
  demonstration project described in subsection (a), may waive the following
  requirements in title XIX of the Social Security Act with respect to
  such projects.
  (1) Sections 1901, 1902(a)(10) (A) and (C), 1903(a)(1), and 1903(f),
  relating to categorical and income eligibility limits.
  (2) Sections 1902(a)(10) (A) and (D), relating to amount, duration, and
  scope of services; and to diagnosis, type of illness, or condition.
  (3) Section 1902(a)(10)(E), relating to qualified medicaid beneficiaries.
  (4) Section 1902(a)(23), relating to freedom of choice.
  (5) Section 1902(a)(1), relating to statewideness.
  (6) Sections 1902(a)(10), matter following (E) and 1902(a)(17), relating
  to comparability.
  (7) Section 1902(a)(14), relating to premiums.
  (8) Section 1902(a)(18), relating to liens and recovery of assets.
  (9) Sections 1902(50) and (51), relating to personal needs allowance,
  protection community spouse, and transfer of assets.
  (c) STATE ASSURANCES- The States conducting demonstration projects under
  this section shall provide asssurances to the Secretary that--
  (1) the estimated average per capita and aggregate expenditures for long-term
  care services for individuals under the waiver will not exceed estimated
  average per capita and aggregate expenditures for such services for such
  individuals under the State plan in the absence of the waiver;
  (2) it will continue to make long-term care services available under the
  plan to any individual who would be entitled to long-term care services
  under the plan as in effect before the waiver (except to the extent that
  subsequent Federal legislation specifically requires changes in eligibility
  for such services under the plan);
  (3) it will not approve a long-term care insurance policy unless it
  meets standards at least as stringent as those set forth in the National
  Association of Insurance Commissioners (NAIC) Long-Term Care Insurance
  Model Act as of June 1989; and
  (4) expenditures for long-term care services provided to individuals
  participating in the projects after the expiration of the projects shall
  be shared by the State and Federal governments in accordance with title
  XIX formulae in force at the time.
  (d) APPLICATION, DURATION, AND ELIGIBILITY-
  (1) The Secretary shall enter into an agreement with the States described
  in subsection (a) for the purpose of conducting demonstration projects as
  described in this section. The Secretary shall award such demonstrations
  in a budget neutral manner.
  (2) The Secretary shall either approve or disapprove the application of
  the State to participate in a demonstration project described in this
  section within 90 days of receipt of such application. If the Secretary
  disapproves an application of a State described in subsection (a) to
  conduct a demonstration project under this section, the Secretary shall
  within 30 days of such disapproval notify the State of the reasons for
  such disapproval and allow the State to correct any deficiencies and allow
  the State to resubmit a corrected application which the Secretary shall
  approve if it meets the requirements of this section.
  (3) The demonstration project under this section shall be for an initial
  period of 5 years. The Secretary shall provide for renewal of those
  demonstration projects for an additional 5 years which the Secretary
  determines have met the requirements of this section.
  (4) An individual who participates in a demonstration project under this
  section shall remain eligible for long-term care services under the State
  plan after the expiration of such project.
  (e) ANNUAL STATE REPORTS- The States shall annually (during the duration
  of such projects) report to the Secretary on--
  (1) the number of individuals enrolled in the demonstration projects in
  such States;
  (2) the number of enrollees actually receiving long-term care services under
  such demonstration projects (whether through long-term care insurance or
  medical assistance under title XIX of the Social Security Act);
  (3) the number of enrollees actually receiving long-term care in the form
  of medical assistance; and
  (4) the number and type (commercial, not for profit and HMO) characteristics
  of private insurers with policies approved by the States under the
  demonstration projects.
  (f) SECRETARY'S REPORT- The Secretary shall report to Congress on the
  demonstration project established under this section not later than 4 years
  after the date of enactment of this section. Such report shall summarize
  and analyze information reported by the State under subsection (e), and
  shall evaluate the cost effectiveness of the demonstration project and
  make recommendations with respect to the desirability and appropriateness
  of authorizing any State to make long-term care services available on a
  similar basis.
SEC. 6271. MEDICAID COVERAGE OF ALCOHOLISM AND DRUG DEPENDENCY TREATMENT
SERVICES.
  Section 1905(a) of the Social Security Act is amended by adding at the
  end the following new sentence: `No service (including counseling) shall
  be excluded from the definition of `medical assistance' solely because it
  is provided as a treatment service for alcoholism or drug dependency.'.
SEC. 6272. HOME AND COMMUNITY-BASED WAIVERS.
  (a) TREATMENT OF ROOM AND BOARD- Subsections (c)(1) and (d)(1) of section
  1915 of the Social Security Act (42 U.S.C. 1396n) are each amended by
  adding at the end the following: `For purposes of this subsection, the
  term `room and board' shall not include an amount established under a
  method determined by the State to reflect the portion of costs of rent
  and food attributable to an unrelated personal caregiver who is residing
  in the same household with an individual who, but for the assistance of
  such caregiver, would require admission to a hospital, nursing facility,
  or intermediate care facility for the mentally retarded.'.
  (b) TREATMENT OF DECERTIFIED FACILITIES- Notwithstanding any other provision
  of law, an intermediate care facility for the mentally retarded that has
  been decertified or excluded from participation in the medical assistance
  program established under title XIX of the Social Security Act shall be
  treated as a facility providing care `the cost of which could be reimbursed'
  under a State plan for purposes of determining whether to approve a waiver
  under section 1915(c)(1) of such Act and whether an individual is eligible
  for care under such a waiver.
  (c) ADJUSTMENT TO 1915(d) CEILING TO TAKE INTO ACCOUNT THE ADDED COSTS
  OF OBRA 87- Section 1915(d)(5)(B)(iv) (42 U.S.C. 1396n(d)(5)(B)(iv)) is
  amended by striking `this title' the first place it appears and inserting
  `this title whose provisions become effective on or after such date'.
  (d) CHANGES TO FREEDOM OF CHOICE WAIVERS- Section 1915(c)(3) and (d)(3)
  (42 U.S.C. 1396n(c)(3) and (d)(3)) are each amended--
  (1) by striking `and section' and inserting `section'; and
  (2) by inserting after `community)', `and the requirements of section
  1902(a)(23) (relating to restricting the recipient's choice of providers),
  insofar as such requirements relate to the provision of case management
  services, where the State provides assurances satisfactory to the Secretary
  that such a restriction will not substantially limit the recipient's access
  to such services'.
SEC. 6273. MEDICAID PROVISIONS RELATING TO HEALTH MAINTENANCE ORGANIZATIONS.
  (a) PHYSICIAN INCENTIVE PAYMENTS- Section 1903(m)(5) is amended by adding
  at the end of subparagraph (B) the following new subparagraph:
  `(C)(i) If an organization with a contract under section 1903(m) knowingly
  makes a direct and specific individual payment to a physician as an
  inducement to withhold or limit a specific medically necessary service to
  an identifiable patient, the organization shall be subject, in addition
  to any other penalties that may be prescribed by law, to a civil money
  penalty of not more than $25,000 for each determination.
  `(ii) The provisions of section 1876(i)(8) shall apply to health maintenance
  organizations with a contract under this subsection in the same manner and
  to the same extent as to health maintenance organizations with a contract
  under section 1876.'.
  (b) MEDICAID ENROLLMENT WAIVER-
  (1) GENERAL WAIVER AUTHORITY- The Secretary shall approve waivers of the
  75 percent enrollment requirement (described in section 1903(m)(2)(A)(i)
  of the Social Security Act) after the Secretary provides for--
  (A) a study of situations where the 75-25 percent enrollment requirement
  (described in section 1903(m)(2)(A)(i) of the Social Security Act) is
  not practical or where alternative safeguards or procedures to private
  enrollment and oversight could be used to assure that prepaid health care
  organizations provide quality care and are fiscally sound;
  (B) publication in the Federal Register by April 1, 1991, for review and
  comment a set of minimum standards that prepaid organizations must meet
  to be considered eligible for the waiver described in this paragraph and
  the terms under which such waivers will be approved; and
  (C) publication of revised standards and terms as a final notice.
  (2) TERM OF AND RENEWAL OF WAIVERS- A waiver under this section shall
  initially be approved for three years; the Secretary shall provide terms
  for the renewal of such waivers.
SEC. 6274. STATE FLEXIBILITY IN IDENTIFYING AND PAYING DISPROPORTIONATE
SHARE HOSPITALS.
  (a) IN GENERAL- Section 1923(b)(1) (42 U.S.C. 1396r-4(b)(1)) is amended by--
  (1) striking the period at the end of subparagraph (B) and inserting
  `or instead of (A) or (B)'; and
  (2) adding after subparagraph (B) the following new subparagraph:
  `(C) the hospital meets other criteria specified by the State which identify
  hospitals serving a disproportionate number of low income patients with
  special needs, so long as all hospitals determined to be disproportionate
  share hospitals include, at the State's option, hospitals which meet one
  of the following--
  `(i) the conditions specified in subparagraph (A) or (B); or
  `(ii) any criteria specified in an amendment to the State plan which was
  submitted to and approved by the Secretary prior to May 1, 1989.'.
  (b) DIFFERENT PAYMENT LEVELS- Section 1923 (42 U.S.C. 1396r-4) is amended
  in the matter following subsection (c) by adding after the last sentence the
  following: `Nothing in this section shall prohibit a State from establishing
  different payment adjustments for different types of hospitals that are
  defined or deemed to be disproportionate share hospitals provided that
  the amount of each payment adjustment is reasonably related to the costs
  or proportion of services provided to medicaid or low-income patients,
  and that either--
  `(A) the amount of each payment adjusted is equal to or greater than the
  minimum adjustment amount as specified in subsection (c); or
  `(B) the aggregate amount of payment adjustments under the plan for
  disproportionate share hospitals (as defined under a State plan approved by
  the Secretary prior to December 22, 1987) is not less than the aggregate
  amount of payment adjustments otherwise required to be made if paragraph
  (1) or (2) of subsection (c) applied.'.
  (c) CONFORMING AMENDMENT- Section 1923(c)(2) (42 U.S.C. 1396r-4(c)(2))
  is amended by inserting after `State' `or the hospital's low-income
  utilization rate (as defined in paragraph (b)(3))'.
SEC. 6275. EXTENSION OF PROVISION ON VOLUNTARY CONTRIBUTIONS AND
PROVIDER-SPECIFIC TAXES.
  Section 8431 of the Technical and Miscellaneous Revenue Act of 1988 is
  amended by striking `December 31, 1990' and inserting `September 30, 1991'.
SEC. 6276. PROHIBITION ON WAIVING REASONABLE AND ADEQUATE PAYMENT RATES.
  (a) IN GENERAL- Section 1915(b) (42 U.S.C. 1396n(b)) is amended in the
  matter preceding paragraph (1) by inserting `(other than subsection
  (a)(13)(A))' after `section 1902'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall be effective
  with respect to calendar quarters beginning on or after January 1, 1991.
Subtitle D--Trade Provisions
PART I--CUSTOMS USER FEES
SEC. 6301. CUSTOMS USER FEES.
  (a) EXTENSION OF EFFECTIVE PERIOD FOR FEES- Paragraph (3) of section
  13031(j) of the Consolidated Omnibus Budget Reconciliation Act of 1985
  (19 U.S.C. 58c(j)(3)) is amended by striking out `1991' and inserting `1995'.
  (b) ADJUSTMENT OF FEES- Paragraph (9) of section 13031(a) of the Consolidated
  Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)(9)) is amended
  to read as follows:
  `(9)(A) For the processing of merchandise that is formally entered or
  released during any fiscal year, a fee in an amount equal to 0.17 percent
  ad valorem, unless adjusted under subparagraph (B).
  `(B)(i) The Secretary of the Treasury may adjust the ad valorem rate
  specified in subparagraph (A) for merchandise that is formally entered or
  released during any fiscal year beginning after September 30, 1991, to an
  ad valorem rate (but not to a rate of more than 0.19 percent nor less than
  0.15 percent) that would, if charged, offset the salaries and expenses
  that will likely be incurred by the Customs Service in the processing of
  such entries and releases during that fiscal year.
  `(ii) In determining the amount of any adjustment under clause (i),
  the Secretary of the Treasury shall take into account whether there is
  a surplus or deficit in the fund established under section 613A of the
  Tariff Act of 1930 with respect to the provision of customs services for
  the processing of formal entries and releases of merchandise.
  `(iii) An adjustment may not be made under clause (i) with respect to the
  fee charged during any fiscal year unless the Secretary of the Treasury--
  `(I) not later than 30 days after the date of the enactment of the Act
  providing regular appropriations for the Customs Service for that fiscal
  year, publishes a notice of intent to adjust the fees under this paragraph
  and the amount of such adjustment;
  `(II) provides a period of not less than 30 days for public comment
  following publication of the notice described in subclause (I);
  `(III) during the 30-day period beginning after the date of the publication
  of the notice described in subclause (I), consults with the Committee on
  Finance of the Senate and the Committee on Ways and Means of the House of
  Representatives regarding the proposed adjustment; and
  `(IV) no earlier than the expiration of the 30-day public comment period
  and the 30-day consultation period, publishes in the Federal Register
  notice of the final determination regarding the adjustment of fees.
  `(iv) The 30 days referred to in clause (iii)(III) shall be computed
  by excluding--
  `(I) the days on which either House is not in session because of an
  adjournment of more than 3 days to a day certain or an adjournment of the
  Congress sine die; and
  `(II) any Saturday and Sunday, not excluded under subclause (I), when
  either House is not in session.
  `(v) An adjustment made under this subparagraph is effective with respect to
  formal entries and releases made on or after the 15th calendar day after
  the date of publication of the notice required under clause (iii)(IV)
  and before the first day of the next fiscal year.
  `(vi) Any fee charged under this paragraph, whether or not adjusted under
  this subparagraph, is subject to the limitations in subsection (b)(8)(A).'.
  (c) AGGREGATION OF MERCHANDISE PROCESSING FEES- Section 111(f)(1)(B)
  of the Customs and Trade Act of 1990 (Public Law 101-382) is amended by
  striking out `determined in' and inserting `currently in effect under'.
  (d) CUSTOMS SERVICE ADMINISTRATION- Section 113 of the Customs and Trade
  Act of 1990 is amended--
  (1) by inserting `and' after the semicolon at the end of subsection (a)(1);
  (2) by striking out the semicolon at the end of subsection (a)(2) and
  inserting a period;
  (3) by striking out paragraphs (3), (4), and (5) of subsection (a); and
  (4) by striking out `Committees referred to in subsection (a)(5)' in
  subsection (b) and inserting `the Committee on Ways and Means of the House
  of Representatives and the Committee on Finance of the Senate'.
  (e) MERCHANDISE PROCESSING FEES FOR CERTAIN SMALL AIRPORTS-
  (1) IN GENERAL- Section 13031(b)(9) of the Consolidated Omnibus Budget
  Reconciliation Act of 1985 (19 U.S.C. 58c(b)(9)) is amended--
  (A) by inserting `and subsection (a)' in subparagraph (B) before the
  colon; and
  (B) by inserting `other than an airport through which less than 25,000
  informal entries are cleared annually' in subparagraph (B)(ii) before the
  end period.
  (2) EFFECTIVE DATE- The amendments made by this subsection shall take
  effect as if included in section 111 of the Customs and Trade Act of 1990.
PART II--TECHNICAL CORRECTIONS
SEC. 6311. TECHNICAL AMENDMENTS TO THE HARMONIZED TARIFF SCHEDULE.
  (a) REDESIGNATIONS- Each subheading of the Harmonized Tariff Schedule
  of the United States that is listed in column A is redesignated as the
  subheading listed in column B opposite such column A subheading:
Column A
Column B
5111.20.60
5111.20.90
5111.30.60
5111.30.90
5111.90.70
5111.90.90
5112.19.10
5112.19.20
5112.19.60
5112.19.90
5112.90.60
5112.90.90
6116.10.50
6116.10.40
6116.93.20
6116.93.30
6116.99.60
6116.99.90
6216.00.23
6216.00.25
6216.00.29
6216.00.30
6216.00.47
6216.00.45
6702.90.40
6702.90.35
6702.90.60
6702.90.65
8712.00.10
8712.00.15
8712.00.20
8712.00.25
8712.00.30
8712.00.35
8714.94.20
8714.94.15
8714.94.50
8714.94.60
9022.90.80
9022.90.90
9603.10.20
9603.10.25
9603.10.70
9603.10.90
  (b) MISCELLANEOUS AMENDMENTS- The Harmonized Tariff Schedule of the United
  States is further amended as follows:
  (1) The article descriptions for subheadings 6116.10.10, 6116.92.10,
  6116.93.10, 6116.99.30, 6216.00.10, 6216.00.34, and 6216.00.44 are each
  amended to read as follows: `Other gloves, mittens, and mitts, principally
  designed for sports use, including ski and snowmobile gloves, mittens,
  and mitts'.
  (2) The superior heading to subheadings 8712.00.25 and 8712.00.35 (as
  redesignated by subsection (a)) is amended by striking out `65' and inserting
  `63.5'.
  (3) Heading 9902.30.07 is amended by striking out `2929.90.10' and inserting
  `2929.10.40'.
  (4) Heading 9902.30.08 is amended by striking out `2907.29.30' and inserting
  `2907.19.50'.
  (5) Heading 9902.30.42 is amended by striking out `19532-03-07' and inserting
  `19532-03-7'.
  (6) The article description for heading 9902.30.56 is amended by striking
  out `hydroxethyl' and inserting `hydroxyethyl'.
  (7) Heading 9902.30.83 (as enacted by section 388 of the Customs and Trade
  Act of 1990) is redesignated as heading 9902.31.11 and, as so redesignated,
  is amended by striking out `piperadinyl' and inserting `piperidinyl'.
  (8) Subchapter II of chapter 99 is amended by inserting in numerical
  sequence the following new heading:
  (9) Heading 9902.84.83 is amended by striking out `(A,C,E,IL)' and inserting
  `(A,C,CA,E,IL)'.
  (10) Heading 9902.87.14 is amended by striking out `brakes,' the first
  place it appears.
  (c) Effective Date-
  (1) Subject to paragraphs (2) and (3), the amendments made by subsections
  (a) and (b) apply with respect to articles entered, or withdrawn from
  warehouse for consumption, on or after October 1, 1990.
  (2) Any amendment made by subsection (a) or (b) to a provision of the
  Harmonized Tariff Schedule of the United States that was the subject of
  an amendment made by title III of the Customs and Trade Act of 1990 shall--
  (A) be treated as applying to that provision as established or amended by
  such title III; and
  (B) if the amendment made by such title III has retroactive application
  under section 485(b) of such Act, be treated as applying with respect to
  entries made after the relevant applicable date (as defined in paragraph
  (2)(A) of such section 485(b)).
  (3) Notwithstanding section 514 of the Tariff Act of 1930 or any other
  provision of law, upon proper request filed with the appropriate customs
  officer before April 1, 1991, any entry--
  (A) which was made after December 31, 1988, and before October 1, 1990; and
  (B) with respect to which there would have been a lesser duty if any
  amendment made by subsection (b)(1) applied to such entry;
shall be liquidated or reliquidated as though such amendment applied to
such entry.
SEC. 6312. TECHNICAL AMENDMENTS TO CERTAIN CUSTOMS LAWS.
  (a) CUSTOMS FORFEITURE FUND-
  (1) Paragraph (5) of section 121 of the Customs and Trade Act of 1990
  is repealed and subsection (f) of section 613A of the Tariff Act of 1930
  shall be applied as if the amendment made by such paragraph (5) had not
  been enacted.
  (2) Paragraph (2) of such section 613A(f) (as in effect after the application
  of paragraph (1)) is amended to read as follows:
  `(2)(A) Subject to subparagraph (B), there are authorized to be appropriated
  from the Fund not to exceed $20,000,000 for each fiscal year to carry out
  the purposes set forth in subsections (a)(3) and (b) for such fiscal year.
  `(B) Of the amount authorized to be appropriated under subparagraph (A),
  not to exceed the following shall be available to carry out the purposes
  set forth in subsection (a)(3):
  `(i) $14,855,000 for fiscal year 1991.
  `(ii) $15,598,000 for fiscal year 1992.'.
  (b) CERTAIN ENTRIES- Section 484 of the Customs and Trade Act of 1990
  (Public Law 101-382) is amended by striking out `1801-000027' and inserting
  `1801-7-000027'.
  (c) EFFECTIVE DATE- The provisions of this section take effect August
  21, 1990.
Subtitle E--Pension Benefit Guarantee Corporation Premiums
SEC. 6401. INCREASE IN PREMIUM RATES.
  (a) INCREASE IN BASIC PREMIUM-
  (1) IN GENERAL- Clause (i) of section 4006(a)(3)(A) of the Employee
  Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)(3)(A)) is amended
  by striking `for plan years beginning after December 31, 1987, an amount
  equal to the sum of $16' and inserting `for plan years beginning after
  December 31, 1990, an amount equal to the sum of $19'.
  (2) CONFORMING AMENDMENT- Section 4006(c)(1)(A) of such Act (29
  U.S.C. 1306(c)(1)(A)) is amended by adding at the end thereof the following
  new clause:
  `(iv) with respect to each plan year beginning after December 31, 1987,
  and before January 1, 1991, an amount equal to $16 for each individual
  who was a participant in such plan during the plan year, and'.
  (b) INCREASE IN ADDITIONAL PREMIUM- Section 4006(a)(3)(E) of such Act
  (29 U.S.C. 1306(a)(3)(E)) is amended--
  (1) by striking `$6.00' in clause (ii) and inserting `$9.00', and
  (2) by striking `$34' in clause (iv)(I) and inserting `$53'.
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  plan years beginning after December 31, 1990.
Subtitle F--Child Care and Development Block Grant
SEC. 6501. CHILD CARE AND DEVELOPMENT BLOCK GRANT.
  Chapter 8 of subtitle A of title IV of the Omnibus Budget Reconciliation
  Act of 1981 (Public Law 97-35) is amended--
  (1) by redesignating subchapters C, D, and E, as subchapters D, E, and F,
  respectively; and
  (2) by inserting after subchapter B the following new subchapter:
`Subchapter C--Child Care and Development Block Grant
`SEC. 658A. SHORT TITLE.
  `This subchapter may be cited as the `Child Care and Development Block
  Grant Act of 1990'.
`SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.
  `There are authorized to be appropriated to carry out this subchapter,
  $750,000,000 for fiscal year 1991, $825,000,000 for fiscal year 1992,
  $925,000,000 for fiscal year 1993, and such sums as may be necessary for
  each of the fiscal years 1994 and 1995.
`SEC. 658C. ESTABLISHMENT OF BLOCK GRANT PROGRAM.
  `The Secretary is authorized to make grants to States in accordance with
  the provisions of this subchapter.
`SEC. 658D. LEAD AGENCY.
  `(a) DESIGNATION- The chief executive officer of a State desiring to receive
  a grant under this subchapter shall designate, in an application submitted
  to the Secretary under section 658E, an appropriate State agency that
  complies with the requirements of subsection (b) to act as the lead agency.
  `(b) DUTIES-
  `(1) IN GENERAL- The lead agency shall--
  `(A) administer, directly or through other State agencies, the financial
  assistance received under this subchapter by the State;
  `(B) develop the State plan to be submitted to the Secretary under section
  658E(a);
  `(C) in conjunction with the development of the State plan as required
  under subparagraph (B), hold at least one hearing in the State to provide
  to the public an opportunity to comment on the provision of child care
  services under the State plan; and
  `(D) coordinate the provision of services under this subchapter with other
  Federal, State and local child care and early childhood development programs.
  `(2) DEVELOPMENT OF PLAN- In the development of the State plan described
  in paragraph (1)(B), the lead agency shall consult with appropriate
  representatives of units of general purpose local government. Such
  consultations may include consideration of local child care needs and
  resources, the effectiveness of existing child care and early childhood
  development services, and the methods by which funds made available under
  this subchapter can be used to effectively address local shortages.
`SEC. 658E. APPLICATION AND PLAN.
  `(a) APPLICATION- To be eligible to receive assistance under this subchapter,
  a State shall prepare and submit to the Secretary an application at such
  time, in such manner, and containing such information as the Secretary
  shall by rule require, including--
  `(1) an assurance that the State will comply with the requirements of this
  subchapter; and
  `(2) a State plan that meets the requirements of subsection (c).
  `(b) PERIOD COVERED BY PLAN- The State plan contained in the application
  under subsection (a) shall be designed to be implemented--
  `(1) during a 3-year period for the initial State plan; and
  `(2) during a 2-year period for subsequent State plans.
  `(c) Requirements of a Plan-
  `(1) LEAD AGENCY- The State plan shall identify the lead agency designated
  under section 658D.
  `(2) POLICIES AND PROCEDURES- The State plan shall:
  `(A) PARENTAL CHOICE OF PROVIDERS- Provide assurances that--
  `(i) the parent or parents of each eligible child within the State who
  receives or is offered child care services for which financial assistance
  is provided under this subchapter, other than through assistance provided
  under paragraph (3)(C), are given the option either--
  `(I) to enroll such child with a child care provider that has a grant or
  contract for the provision of such services; or
  `(II) to receive a child care certificate as defined in section 658P(2);
  `(ii) in cases in which the parent selects the option described in clause
  (i)(I), the child will be enrolled with the eligible provider selected by
  the parent to the maximum extent practicable; and
  `(iii) child care certificates offered to parents selecting the option
  described in clause (i)(II) shall be of a value commensurate with the
  subsidy value of child care services provided under the option described
  in clause (i)(I);
except that nothing in this subparagraph shall require a State to have a
child care certificate program in operation prior to October 1, 1991.
  `(B) UNLIMITED PARENTAL ACCESS- Provide assurances that procedures are in
  effect within the State to ensure that child care providers who provide
  services for which assistance is made available under this subchapter
  afford parents unlimited access to their children and to the providers
  caring for their children, during the normal hours of operation of such
  providers and whenever such children are in the care of such providers.
  `(C) PARENTAL COMPLAINTS- Provide assurances that the State maintains a
  record of substantiated parental complaints and makes information regarding
  such parental complaints available to the public on request.
  `(D) CONSUMER EDUCATION- Provide assurances that consumer education
  information will be made available to parents and the general public within
  the State concerning licensing and regulatory requirements, complaint
  procedures, and policies and practices relative to child care services
  within the State.
  `(E) COMPLIANCE WITH STATE AND LOCAL REGULATORY REQUIREMENTS- Provide
  assurances that--
  `(i) all providers of child care services within the State for which
  assistance is provided under this subchapter comply with all licensing or
  regulatory requirements (including registration requirements) applicable
  under State and local law; and
  `(ii) providers within the State that are not required to be licensed
  or regulated under State or local law are required to be registered
  with the State prior to payment being made under this subchapter, in
  accordance with procedures designed to facilitate appropriate payment to
  such providers, and to permit the State to furnish information to such
  providers, including information on the availability of health and safety
  training, technical assistance, and any relevant information pertaining
  to regulatory requirements in the State, and that such providers shall
  be permitted to register with the State after selection by the parents of
  eligible children and before such payment is made.
This subparagraph shall not be construed to prohibit a State from imposing
more stringent standards and licensing or regulatory requirements on child
care providers within the State that provide services for which assistance
is provided under this subchapter than the standards or requirements imposed
on other child care providers in the State.
  `(F) ESTABLISHMENT OF HEALTH AND SAFETY REQUIREMENTS- Provide assurances that
  there are in effect within the State, under State or local law, requirements
  designed to protect the health and safety of children that are applicable
  to child care providers that provide services for which assistance is made
  available under this subchapter. Such requirements shall include--
  `(i) the prevention and control of infectious diseases (including
  immunization);
  `(ii) building and physical premises safety; and
  `(iii) minimum health and safety training appropriate to the provider
  setting.
Nothing in this subparagraph shall be construed to require the establishment
of additional health and safety requirements for child care providers that
are subject to health and safety requirements in the categories described
in this subparagraph on the date of enactment of this subchapter under State
or local law.
  `(G) COMPLIANCE WITH STATE AND LOCAL HEALTH AND SAFETY REQUIREMENTS-
  Provide assurances that procedures are in effect to ensure that child care
  providers within the State that provide services for which assistance is
  provided under this subchapter comply with all applicable State or local
  health and safety requirements as described in subparagraph (F).
  `(H) REDUCTION IN STANDARDS- Provide assurances that if the State reduces
  the level of standards applicable to child care services provided in the
  State on the date of enactment of this subchapter, the State shall inform
  the Secretary of the rationale for such reduction in the annual report of
  the State described in section 658K.
  `(I) REVIEW OF STATE LICENSING AND REGULATORY REQUIREMENTS- Provide
  assurances that not later than 18 months after the date of the submission
  of the application under section 658E, the State will complete a full review
  of the law applicable to, and the licensing and regulatory requirements and
  policies of, each licensing agency that regulates child care services and
  programs in the State unless the State has reviewed such law, requirements,
  and policies in the 3-year period ending on the date of the enactment of
  this subchapter.
  `(J) SUPPLEMENTATION- Provide assurances that funds received under this
  subchapter by the State will be used only to supplement, not to supplant,
  the amount of Federal, State, and local funds otherwise expended for the
  support of child care services and related programs in the State.
  `(3) USE OF BLOCK GRANT FUNDS-
  `(A) GENERAL REQUIREMENT- The State plan shall provide that the State
  will use the amounts provided to the State for each fiscal year under this
  subchapter as required under subparagraphs (B) and (C).
  `(B) CHILD CARE SERVICES- Subject to the reservation contained in
  subparagraph (C), the State shall use amounts provided to the State for
  each fiscal year under this subchapter for--
  `(i) child care services, that meet the requirements of this subchapter,
  that are provided to eligible children in the State on a sliding fee
  scale basis using funding methods provided for in section 658E(c)(2)(A),
  with priority being given for services provided to children of families
  with very low family incomes (taking into consideration family size)
  and to children with special needs; and
  `(ii) activities designed to improve the affordability, availability and
  quality of child care, and to expand the range of choices of child care
  services available to parents.
  `(C) ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE AND TO INCREASE THE
  AVAILABILITY OF EARLY CHILDHOOD DEVELOPMENT AND BEFORE- AND AFTER-SCHOOL
  CARE SERVICES- The State shall reserve 25 percent of the amounts provided
  to the State for each fiscal year under this subchapter to carry out
  activities designed to improve the quality of child care (as described in
  section 658G) and to provide before- and after-school and early childhood
  development services (as described in section 658H).
  `(4) PAYMENT RATES-
  `(A) IN GENERAL- The State plan shall provide assurances that payment rates
  for the provision of child care services for which assistance is provided
  under this subchapter are sufficient to ensure equal access for eligible
  children to comparable child care services in the State or substate area
  that are provided to children whose parents are not eligible to receive
  assistance under this subchapter or for child care assistance under any other
  Federal or State programs. Such payment rates shall take into account the
  variations in the costs of providing child care in different settings and
  to children of different age groups, and the additional costs of providing
  child care for children with special needs.
  `(B) CONSTRUCTION- Nothing in this paragraph shall be construed to create
  a private right of action.
  `(5) SLIDING FEE SCALE- The State plan shall provide that the State will
  establish and periodically revise, by rule, a sliding fee scale that
  provides for cost sharing by the families that receive child care services
  for which assistance is provided under this subchapter.
  `(d) APPROVAL OF APPLICATION- The Secretary shall approve an application
  that satisfies the requirements of this section.
`SEC. 658F. LIMITATIONS ON STATE ALLOTMENTS.
  `(a) NO ENTITLEMENT TO CONTRACT OR GRANT- Nothing in this subchapter shall
  be construed--
  `(1) to entitle any child care provider or recipient of a child care
  certificate to any contract, grant or benefit; or
  `(2) to limit the right of any State to impose additional limitations or
  conditions on contracts or grants funded under this subchapter.
  `(b) CONSTRUCTION OF FACILITIES-
  `(1) IN GENERAL- No funds made available under this subchapter shall be
  expended for the purchase or improvement of land, or for the purchase,
  construction, or permanent improvement (other than minor remodeling)
  of any building or facility.
  `(2) SECTARIAN AGENCY OR ORGANIZATION- In the case of a sectarian agency
  or organization, no funds made available under this subchapter may be
  used for the purposes described in paragraph (1) except to the extent that
  renovation or repair is necessary to bring the facility of such agency or
  organization into compliance with health and safety requirements referred
  to in section 658E(c)(2)(F).
`SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.
  `A State that receives financial assistance under this subchapter shall
  use not less than 40 percent of the amounts reserved by such State under
  section 658E(c)(3)(C) for each fiscal year for one or more of the following:
  `(1) RESOURCE AND REFERRAL PROGRAMS- Operating directly or providing
  financial assistance to private nonprofit organizations or public
  organizations (including units of general purpose local government) for
  the development, establishment, expansion, operation, and coordination of
  resource and referral programs specifically related to child care.
  `(2) GRANTS OR LOANS TO ASSIST IN MEETING STATE AND LOCAL STANDARDS-
  Making grants or providing loans to child care providers to assist such
  providers in meeting applicable State and local child care standards.
  `(3) ESTABLISHMENT AND IMPROVEMENT OF STANDARDS- Establishing and improving
  State and local child care standards and requirements.
  `(4) MONITORING OF COMPLIANCE WITH LICENSING AND REGULATORY REQUIREMENTS-
  Improving the monitoring of compliance with, and enforcement of, State
  and local licensing and regulatory requirements (including registration
  requirements).
  `(5) TRAINING- Providing training and technical assistance in areas
  appropriate to the provision of child care services, such as training in
  health and safety, nutrition, first aid, the recognition of communicable
  diseases, child abuse detection and prevention, and the care of children
  with special needs.
  `(6) COMPENSATION- Improving salaries and other compensation paid to full-
  and part-time staff who provide child care services for which assistance
  is provided under this subchapter.
`SEC. 658H. EARLY CHILDHOOD DEVELOPMENT AND BEFORE- AND AFTER-SCHOOL SERVICES.
  `(a) IN GENERAL- A State that receives financial assistance under this
  subchapter shall use not less than 40 percent of the amounts reserved by
  such State under section 658E(c)(3)(C) for each fiscal year to establish
  or expand and conduct, through the provision of grants or contracts,
  early childhood development and before- and after-school child care programs.
  `(b) PROGRAM DESCRIPTION- Programs that receive assistance under this
  section shall--
  `(1) in the case of early childhood development programs, consist of
  services that are not intended to serve as a substitute for a compulsory
  academic programs but that are intended to provide an environment that
  enhances the educational, social, cultural, emotional, and recreational
  development of children; and
  `(2) in the case of before- and after-school child care programs--
  `(A) be provided Monday through Friday, including school holidays and
  vacation periods other than legal public holidays, to children attending
  early childhood development programs, kindergarten, or elementary or
  secondary school classes during such times of the day and on such days
  that regular instructional services are not in session; and
  `(B) not be intended to extend or replace the regular academic program.
  `(c) PRIORITY FOR ASSISTANCE- In awarding grants and contracts under this
  section, the State shall give the highest priority to geographic areas
  within the State that are eligible to receive grants under section 1006
  of the Elementary and Secondary Education Act of 1965, and shall then give
  priority to--
  `(1) any other areas with concentrations of poverty; and
  `(2) any areas with very high or very low population densities.
`SEC. 658I. ADMINISTRATION AND ENFORCEMENT.
  `(a) ADMINISTRATION- The Secretary shall--
  `(1) coordinate all activities of the Department of Health and Human
  Services relating to child care, and, to the maximum extent practicable,
  coordinate such activities with similar activities of other Federal entities;
  `(2) collect, publish and make available to the public a listing of State
  child care standards at least once every 3 years; and
  `(3) provide technical assistance to assist States to carry out this
  subchapter, including assistance on a reimbursable basis.
  `(b) Enforcement-
  `(1) REVIEW OF COMPLIANCE WITH STATE PLAN- The Secretary shall review
  and monitor State compliance with this subchapter and the plan approved
  under section 658E(c) for the State, and shall have the power to terminate
  payments to the State in accordance with paragraph (2).
  `(2) Noncompliance-
  `(A) IN GENERAL- If the Secretary, after reasonable notice to a State and
  opportunity for a hearing, finds that--
  `(i) there has been a failure by the State to comply substantially with
  any provision or requirement set forth in the plan approved under section
  658E(c) for the State; or
  `(ii) in the operation of any program for which assistance is provided under
  this subchapter there is a failure by the State to comply substantially
  with any provision of this subchapter;
the Secretary shall notify the State of the finding and that no further
payments may be made to such State under this subchapter (or, in the case
of noncompliance in the operation of a program or activity, that no further
payments to the State will be made with respect to such program or activity)
until the Secretary is satisfied that there is no longer any such failure
to comply or that the noncompliance will be promptly corrected.
  `(B) ADDITIONAL SANCTIONS- In the case of a finding of noncompliance made
  pursuant to subparagraph (A), the Secretary may, in addition to imposing
  the sanctions described in such subparagraph, impose other appropriate
  sanctions, including recoupment of money improperly expended for purposes
  prohibited or not authorized by this subchapter, and disqualification from
  the receipt of financial assistance under this subchapter.
  `(C) NOTICE- The notice required under subparagraph (A) shall include a
  specific identification of any additional sanction being imposed under
  subparagraph (B).
  `(3) ISSUANCE OF RULES- The Secretary shall establish by rule procedures
  for--
  `(A) receiving, processing, and determining the validity of complaints
  concerning any failure of a State to comply with the State plan or any
  requirement of this subchapter; and
  `(B) imposing sanctions under this section.
`SEC. 658J. PAYMENTS.
  `(a) IN GENERAL- Subject to the availability of appropriations, a State
  that has an application approved by the Secretary under section 658E(d)
  shall be entitled to a payment under this section for each fiscal year in
  an amount equal to its allotment under section 658O for such fiscal year.
  `(b) METHOD OF PAYMENT-
  `(1) IN GENERAL- Subject to paragraph (2), the Secretary may make payments
  to a State in installments, and in advance or by way of reimbursement,
  with necessary adjustments on account of overpayments or underpayments,
  as the Secretary may determine.
  `(2) LIMITATION- The Secretary may not make such payments in a manner
  that prevents the State from complying with the requirement specified in
  section 658E(c)(3).
  `(c) SPENDING OF FUNDS BY STATE- Payments to a State from the allotment
  under section 658O for any fiscal year may be expended by the State in
  that fiscal year or in the succeeding fiscal year.
`SEC. 658K. ANNUAL REPORT AND AUDITS.
  `(a) ANNUAL REPORT- Not later than December 31, 1992, and annually
  thereafter, a State that receives assistance under this subchapter shall
  prepare and submit to the Secretary a report--
  `(1) specifying the uses for which the State expended funds specified
  under paragraph (3) of section 658E(c) and the amount of funds expended
  for such uses;
  `(2) containing available data on the manner in which the child care needs of
  families in the State are being fulfilled, including information concerning--
  `(A) the number of children being assisted with funds provided under this
  subchapter, and under other Federal child care and pre-school programs;
  `(B) the type and number of child care programs, child care providers,
  caregivers, and support personnel located in the State; and
  `(C) salaries and other compensation paid to full- and part-time staff
  who provide child care services;
  `(3) describing the extent to which the affordability and availability of
  child care services has increased;
  `(4) if applicable, describing, in either the first or second such report,
  the findings of the review of State licensing and regulatory requirements
  and policies described in section 658E(c), including a description of
  actions taken by the State in response to such reviews;
  `(5) containing an explanation of any State action, in accordance with
  section 658E, to reduce the level of child care standards in the State,
  if applicable; and
  `(6) describing the standards and health and safety requirements applicable
  to child care providers in the State, including a description of State
  efforts to improve the quality of child care;
during the period for which such report is required to be submitted.
  `(b) AUDITS-
  `(1) REQUIREMENT- A State shall, after the close of each program period
  covered by a application approved under section 658E(d) audit its
  expenditures during such program period from amounts received under this
  subchapter.
  `(2) INDEPENDENT AUDITOR- Audits under this subsection shall be conducted
  by an entity that is independent of any agency administering activities
  that receive assistance under this subchapter and be in accordance with
  generally accepted auditing principles.
  `(3) SUBMISSION- Not later than 30 days after the completion of an audit
  under this subsection, the State shall submit a copy of the audit to the
  legislature of the State and to the Secretary.
  `(4) REPAYMENT OF AMOUNTS- Each State shall repay to the United States
  any amounts determined through an audit under this subsection not to have
  been expended in accordance with this subchapter, or the Secretary may
  offset such amounts against any other amount to which the State is or may
  be entitles under this subchapter.
`SEC. 658L. REPORT BY SECRETARY.
  `Not later than July 31, 1993, and annually thereafter, the Secretary
  shall prepare and submit to the Committee on Education and Labor of the
  House of Representatives and the Committee on Labor and Human Resources
  of the Senate a report that contains a summary and analysis of the data
  and information provided to the Secretary in the State reports submitted
  under section 658K. Such report shall include an assessment, and where
  appropriate, recommendations for the Congress concerning efforts that
  should be undertaken to improve the access of the public to quality and
  affordable child care in the United States.
`SEC. 658M. LIMITATIONS ON USE OF FINANCIAL ASSISTANCE FOR CERTAIN PURPOSES.
  `(a) SECTARIAN PURPOSES AND ACTIVITIES- No financial assistance provided
  under this subchapter, pursuant to the choice of a parent under section
  658E(c)(2)(A)(i)(I) or through any other grant or contract under the State
  plan, shall be expended for any sectarian purpose or activity, including
  sectarian worship or instruction.
  `(b) TUITION- With regard to services provided to students enrolled in
  grades 1 through 12, no financial assistance provided under this subchapter
  shall be expended for--
  `(1) any services provided to such students during the regular school day;
  `(2) any services for which such students receive academic credit toward
  graduation; or
  `(3) any instructional services which supplant or duplicate the academic
  program of any public or private school.
`SEC. 658N. NONDISCRIMINATION.
  `(a) RELIGIOUS NONDISCRIMINATION-
  `(1) CONSTRUCTION-
  `(A) IN GENERAL- Except as provided in subparagraph (B), nothing in this
  section shall be construed to modify or affect the provisions of any other
  Federal law or regulation that relates to discrimination in employment on
  the basis of religion.
  `(B) EXCEPTION- A sectarian organization may require that employees
  adhere to the religious tenets and teachings of such organization, and
  such organization may require that employees adhere to rules forbidding
  the use of drugs or alcohol.
  `(2) DISCRIMINATION AGAINST CHILD-
  `(A) IN GENERAL- A child care provider (other than a family child
  care provider) that receives assistance under this subchapter shall not
  discriminate against any child on the basis of religion in providing child
  care services.
  `(B) NON-FUNDED CHILD CARE SLOTS- Nothing in this section shall prohibit a
  child care provider from selecting children for child care slots that are
  not funded directly with assistance provided under this subchapter because
  such children or their family members participate on a regular basis in
  other activities of the organization that owns or operates such provider.
  `(3) EMPLOYMENT IN GENERAL-
  `(A) PROHIBITION- A child care provider that receives assistance under this
  subchapter shall not discriminate in employment on the basis of the religion
  of the prospective employee if such employee's primary responsibility
  is or will be working directly with children in the provision of child
  care services.
  `(B) QUALIFIED APPLICANTS- If two or more prospective employees are qualified
  for any position with a child care provider receiving assistance under
  this subchapter, nothing in this section shall prohibit such child care
  provider from employing a prospective employee who is already participating
  on a regular basis in other activities of the organization that owns or
  operates such provider.
  `(C) PRESENT EMPLOYEES- This paragraph shall not apply to employees of child
  care providers receiving assistance under this subchapter if such employees
  are employed with the provider on the date of enactment of this subchapter.
  `(4) EMPLOYMENT AND ADMISSION PRACTICES- Notwithstanding paragraphs (1)(B),
  (2), and (3), if assistance provided under this subchapter, and any other
  Federal or State program, amounts to 80 percent or more of the operating
  budget of a child care provider that receives such assistance, the Secretary
  shall not permit such provider to receive any further assistance under this
  subchapter unless the grant or contract relating to the financial assistance,
  or the employment and admissions policies of the provider, specifically
  provides that no person with responsibilities in the operation of the child
  care program, project, or activity of the provider will discriminate against
  any individual in employment, if such employee's primary responsibility is
  or will be working directly with children in the provision of child care,
  or admissions because of the religion of such individual.
  `(b) EFFECT ON STATE LAW- Nothing in this subchapter shall be construed to
  supersede or modify any provision of a State constitution or State law that
  prohibits the expenditure of public funds in or by sectarian institutions,
  except that no provision of a State constitution or State law shall be
  construed to prohibit the expenditure in or by sectarian institutions of
  any Federal funds provided under this subchapter.
`SEC. 658O. AMOUNTS RESERVED; ALLOTMENTS.
  `(a) AMOUNTS RESERVED-
  `(1) TERRITORIES AND POSSESSIONS- The Secretary shall reserve not to exceed
  one half of 1 percent of the amount appropriated under this subchapter in
  each fiscal year for payments to Guam, American Samoa, the Virgin Islands
  of the United States, the Commonwealth of the Northern Mariana Islands,
  and the Trust Territory of the Pacific Islands to be allotted in accordance
  with their respective needs.
  `(2) INDIANS TRIBES- The Secretary shall reserve not more than 3 percent of
  the amount appropriated under section 658B in each fiscal year for payments
  to Indian tribes and tribal organizations with applications approved under
  subsection (c).
  `(b) State Allotment-
  `(1) GENERAL RULE- From the amounts appropriated under section 658B for
  each fiscal year remaining after reservations under subsection (a), the
  Secretary shall allot to each State an amount equal to the sum of--
  `(A) an amount that bears the same ratio to 50 percent of such remainder
  as the product of the young child factor of the State and the allotment
  percentage of the State bears to the sum of the corresponding products
  for all States; and
  `(B) an amount that bears the same ratio to 50 percent of such remainder
  as the product of the school lunch factor of the State and the allotment
  percentage of the State bears to the sum of the corresponding products
  for all States.
  `(2) YOUNG CHILD FACTOR- The term `young child factor' means the ratio of the
  number of children in the State under 5 years of age to the number of such
  children in all States as provided by the most recent annual estimates of
  population in the States by the Census Bureau of the Department of Commerce.
  `(3) SCHOOL LUNCH FACTOR- The term `school lunch factor' means the ratio
  of the number of children in the State who are receiving free or reduced
  price lunches under the school lunch program established under the National
  School Lunch Act (42 U.S.C. 1751 et seq.) to the number of such children
  in all the States as determined annually by the Department of Agriculture.
  `(4) Allotment percentage-
  `(A) IN GENERAL- The allotment percentage for a State is determined by
  dividing the per capita income of all individuals in the United States,
  by the per capita income of all individuals in the State.
  `(B) LIMITATIONS- If an allotment percentage determined under subparagraph
  (A)--
  `(i) exceeds 1.2 percent, then the allotment percentage of that State
  shall be considered to be 1.2 percent; and
  `(ii) is less than 0.8 percent, then the allotment percentage of the State
  shall be considered to be 0.8 percent.
  `(C) PER CAPITA INCOME- For purposes of subparagraph (A), per capita income
  shall be--
  `(i) determined at 2-year intervals;
  `(ii) applied for the 2-year period beginning on October 1 of the first
  fiscal year beginning on the date such determination is made; and
  `(iii) equal to the average of the annual per capita incomes for the
  most recent period of 3 consecutive years for which satisfactory data are
  available from the Department of Commerce at the time such determination
  is made.
  `(c) PAYMENTS FOR THE BENEFIT OF INDIAN CHILDREN-
  `(1) GENERAL AUTHORITY- From amounts reserved under subsection (a)(2), the
  Secretary may make grants to or enter into contracts with Indian tribes
  or tribal organizations that submit applications under this section, for
  the planning and carrying out of programs or activities consistent with
  the purposes of this subchapter.
  `(2) APPLICATIONS AND REQUIREMENTS- An application for a grant or contract
  under this section shall provide that:
  `(A) COORDINATION- The applicant will coordinate, to the maximum extent
  feasible, with the lead agency in the State or States in which the applicant
  will carry out programs or activities under this section.
  `(B) SERVICES ON RESERVATIONS- In the case of an applicant located in a
  State other than Alaska, California, or Oklahoma, programs and activities
  under this section will be carried out on the Indian reservation for the
  benefit of Indian children.
  `(C) REPORTS AND AUDITS- The applicant will make such reports on, and
  conduct such audits of, programs and activities under a grant or contract
  under this section as the Secretary may require.
  `(3) CONSIDERATION OF SECRETARIAL APPROVAL- In determining whether to
  approve an application for a grant or contract under this section, the
  Secretary shall take into consideration--
  `(A) the availability of child care services provided in accordance with
  this subchapter by the State or States in which the applicant proposes to
  carry out a program to provide child care services; and
  `(B) whether the applicant has the ability (including skills, personnel,
  resources, community support, and other necessary components) to
  satisfactorily carry out the proposed program or activity.
  `(4) THREE-YEAR LIMIT- Grants or contracts under this section shall be
  for periods not to exceed 3 years.
  `(5) DUAL ELIGIBILITY OF INDIAN CHILDREN- The awarding of a grant or
  contract under this section for programs or activities to be conducted
  in a State or States shall not affect the eligibility of any Indian child
  to receive services provided or to participate in programs and activities
  carried out under a grant to the State or States under this subchapter.
  `(d) DATA AND INFORMATION- The Secretary shall obtain from each appropriate
  Federal agency, the most recent data and information necessary to determine
  the allotments provided for in subsection (b).
  `(e) Reallotments-
  `(1) IN GENERAL- Any portion of the allotment under subsection (b) to a
  State that the Secretary determines is not required to carry out a State
  plan approved under section 658E(d), in the period for which the allotment
  is made available, shall be reallotted by the Secretary to other States
  in proportion to the original allotments to the other States.
  `(2) LIMITATIONS-
  `(A) REDUCTION- The amount of any reallotment to which a State is entitled
  to under paragraph (1) shall be reduced to the extent that it exceeds the
  amount that the Secretary estimates will be used in the State to carry
  out a State plan approved under section 658E(d).
  `(B) REALLOTMENTS- The amount of such reduction shall be similarly reallotted
  among States for which no reduction in an allotment or reallotment is
  required by this subsection.
  `(3) AMOUNTS REALLOTTED- For purposes of any other section of this
  subchapter, any amount reallotted to a State under this subsection shall
  be considered to be part of the allotment made under subsection (b) to
  the State.
  `(f) DEFINITION- For the purposes of this section, the term `State' includes
  only the 50 States, the District of Columbia, and the Commonwealth of
  Puerto Rico.
`SEC. 658P. DEFINITIONS.
  `As used in this subchapter:
  `(1) CAREGIVER- The term `caregiver' means an individual who provides a
  service directly to an eligible child on a person-to-person basis.
  `(2) CHILD CARE CERTIFICATE- The term `child care certificate' means a
  certificate (that may be a check or other disbursement) that is issued by
  a State or local government under this subchapter directly to a parent who
  may use such certificate only as payment for child care services. Nothing in
  this subchapter shall preclude the use of such certificates for sectarian
  child care services if freely chosen by the parent. For purposes of this
  subchapter, child care certificates shall not be considered to be grants
  or contracts.
  `(3) ELEMENTARY SCHOOL- The term `elementary school' means a day or
  residential school that provides elementary education, as determined under
  State law.
  `(4) ELIGIBLE CHILD- The term `eligible child' means an individual--
  `(A) who is less than 13 years of age;
  `(B) whose family income does not exceed 75 percent of the State median
  income for a family of the same size; and
  `(C) who--
  `(i) resides with a parent or parents who are working or attending a job
  training or educational program; or
  `(ii) is receiving, or needs to receive, protective services and resides
  with a parent or parents not described in clause (i).
  `(5) ELIGIBLE CHILD CARE PROVIDER- The term `eligible child care provider'
  means--
  `(A) a center-based child care provider, a group home child care provider,
  a family child care provider, or other provider of child care services
  for compensation that--
  `(i) is licensed, regulated, or registered under State law as described
  in section 658E(c)(2)(E); and
  `(ii) satisfies the State and local requirements, including those referred
  to in section 658E(c)(2)(F);
applicable to the child care services it provides; or
  `(B) a child care provider that is 18 years of age or older who provides
  child care services only to eligible children who are, by affinity or
  consanguinity, or by court decree, the grandchild, niece, or nephew of
  such provider, if such provider is registered and complies with any State
  requirements that govern child care provided by the relative involved.
  `(6) FAMILY CHILD CARE PROVIDER- The term `family child care provider'
  means one individual who provides child care services for fewer than 24
  hours per day, as the sole caregiver, and in a private residence.
  `(7) INDIAN TRIBE- The term `Indian tribe' has the meaning given it in
  section 4(b) of the Indian Self-Determination and Education Assistance Act
  (25 U.S.C. 450b(b)).
  `(8) LEAD AGENCY- The term `lead agency' means the agency designated under
  section 658B(a).
  `(9) PARENT- The term `parent' includes a legal guardian or other person
  standing in loco parentis.
  `(10) SECONDARY SCHOOL- The term `secondary school' means a day or
  residential school which provides secondary education, as determined under
  State law.
  `(11) SECRETARY- The term `Secretary' means the Secretary of Health and
  Human Services unless the context specifies otherwise.
  `(12) SLIDING FEE SCALE- The term `sliding fee scale' means a system of
  cost sharing by a family based on income and size of the family.
  `(13) STATE- The term `State' means any of the several States, the District
  of Columbia, the Virgin Islands of the United States, the Commonwealth
  of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern
  Mariana Islands, and the Trust Territory of the Pacific Islands.
  `(14) TRIBAL ORGANIZATION- The term `tribal organization' has the meaning
  given it in section 4(c) of the Indian Self-Determination and Education
  Assistance Act (25 U.S.C. 450b(c)).
`SEC. 658Q. PARENTAL RIGHTS AND RESPONSIBILITIES.
  `Nothing in this subchapter shall be construed or applied in any manner
  to infringe on or usurp the moral and legal rights and responsibilities
  of parents or legal guardians.
`SEC. 658R. SEVERABILITY.
  `If any provision of this subchapter or the application thereof to any
  person or circumstance is held invalid, the invalidity shall not affect
  other provisions of applications of this subchapter which can be given
  effect without regard to the invalid provision or application, and to this
  end the provisions of this subchapter shall be severable.'.
TITLE VII--COMMITTEE ON FINANCE REVENUE PROVISIONS
SEC. 7100. SHORT TITLE; ETC.
  (a) SHORT TITLE- This title may be cited as the `Revenue Reconciliation
  Act of 1990'.
  (b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided,
  whenever in this title an amendment or repeal is expressed in terms of an
  amendment to, or repeal of, a section or other provision, the reference
  shall be considered to be made to a section or other provision of the
  Internal Revenue Code of 1986.
  (c) TABLE OF CONTENTS-
Subtitle A--1-Year Extension of Certain Expiring Tax Provisions
Sec. 7101. Allocation of research and experimental expenditures.
Sec. 7102. Research credit.
Sec. 7103. Employer-provided educational assistance.
Sec. 7104. Group legal services plans.
Sec. 7105. Targeted jobs credit.
Sec. 7106. Energy investment credit for solar, geothermal, and ocean thermal
property.
Sec. 7107. Low-income housing credit.
Sec. 7108. Qualified mortgage bonds.
Sec. 7109. Qualified small issue bonds.
Sec. 7110. Health insurance costs of self-employed individuals.
Sec. 7111. Expenses for drugs for rare conditions.
Subtitle B--Tax Incentives
Part I--Energy Incentives
Sec. 7201. Extension and modification of credit for producing fuel from
nonconventional source.
Sec. 7202. Credit for small producers of ethanol; modification of alcohol
fuels credit.
Sec. 7203. Tax credit to increase domestic energy exploration and production.
Sec. 7204. Percentage depletion permitted after transfer of proven property.
Sec. 7205. Net income limitation on percentage depletion increased from 50
percent to 100 percent of property net income for oil and natural gas wells.
Sec. 7206. Increase in percentage depletion allowance for marginal production.
Sec. 7207. Special energy deduction for minimum tax.
Part II--Small Business Incentives
SUBPART A--TREATMENT OF ESTATE TAX FREEZES
Sec. 7209. Repeal of section 2036(c).
Sec. 7210. Special valuation rules.
SUBPART B--ADDITIONAL INCENTIVES
Sec. 7211. Increase in limitation on expensing under section 179.
Sec. 7212. Credit for cost of providing nondiscriminatory public accommodations
for disabled individuals.
Subtitle C--Modifications of Earned Income Tax Credit
Sec. 7301. Modifications of earned income tax credit.
Sec. 7302. Dependent care credit made refundable.
Sec. 7303. Study of advance payments.
Sec. 7304. Program to increase public awareness.
Sec. 7305. Exclusion from income and resources of earned income tax credit
under titles IV, XVI, and XIX of the Social Security Act.
Sec. 7306. Coordination with refund provision.
Subtitle D--Revenue-Raising Provisions
Part I--Excise Taxes
SUBPART A--TAXES RELATED TO HEALTH AND THE ENVIRONMENT
Sec. 7401. Increase in excise taxes on distilled spirits, wine, and beer.
Sec. 7402. Increase in excise taxes on tobacco products.
Sec. 7403. Additional chemicals subject to tax on ozone-depleting chemicals.
SUBPART B--USER-RELATED TAXES
Sec. 7404. Increase and extension of highway-related taxes and trust fund.
Sec. 7405. Increase and extension of aviation-related taxes and trust fund;
repeal of reduction in rates.
Sec. 7406. Increase in harbor maintenance tax.
Sec. 7407. Extension of Leaking Underground Storage Tank Trust Fund taxes.
Sec. 7408. Floor stocks tax treatment of articles in foreign trade zones.
SUBPART C--TAXES ON LUXURY ITEMS
Sec. 7409. Taxes on luxury items.
SUBPART D--TELEPHONE TAX
Sec. 7410. Permanent extension of telephone excise tax.
Part II--Insurance Provisions
SUBPART A--PROVISIONS RELATED TO POLICY ACQUISITION COSTS
Sec. 7411. Capitalization of policy acquisition expenses.
Sec. 7412. Treatment of certain nonlife reserves of life insurance companies.
Sec. 7413. Treatment of life insurance reserves of insurance companies which
are not life insurance companies.
SUBPART B--TREATMENT OF SALVAGE RECOVERABLE
Sec. 7414. Treatment of salvage recoverable.
SUBPART C-WAIVER OF ESTIMATED TAX PENALTIES
Sec. 7415. Waiver of estimated tax penalties.
Part III--Compliance Provisions
Sec. 7421. Suspension of statute of limitations during proceedings to enforce
certain summonses.
Sec. 7422. Accuracy-related penalty to apply to section 482 adjustments.
Sec. 7423. Treatment of persons providing services.
Sec. 7424. Application of amendments made by section 7403 of Revenue
Reconciliation Act of 1989 to taxable years beginning on or before July
10, 1989.
Sec. 7425. Other reporting requirements.
Sec. 7426. Study of section 482.
Part IV--Employer Reversions
SUBPART A--TREATMENT OF REVERSIONS OF QUALIFIED PLAN ASSETS TO EMPLOYERS
Sec. 7431. Increase in reversion tax.
Sec. 7432. Additional tax if no replacement plan.
Sec. 7433. Effective date.
SUBPART B--TRANSFERS TO RETIREE HEALTH ACCOUNTS
Sec. 7434. Transfer of excess pension assets to retiree health accounts.
Sec. 7435. Application of ERISA to transfers of excess pension assets to
retiree health accounts.
Part V--Corporate Provisions
Sec. 7441. Recognition of gain by distributing corporation in certain section
355 transactions.
Sec. 7442. Modifications to regulations issued under section 305(c).
Sec. 7443. Modifications to section 1060.
Sec. 7444. Modification to corporation equity reduction limitations on net
operating loss carrybacks.
Sec. 7445. Issuance of debt or stock in satisfaction of indebtedness.
Part VI--Employment Tax Provisions
Sec. 7451. Increase in dollar limitation on amount of wages subject to
hospital insurance tax.
Sec. 7452. Extending Medicare coverage of, and application of hospital
insurance tax to, all State and local government employees.
Sec. 7453. Coverage of certain state and local employees under social security.
Sec. 7454. Extension of FUTA surtax.
Sec. 7455. Increase in tier 2 railroad retirement taxes.
Sec. 7456. Transfer to railroad retirement account.
Sec. 7457. Tier 1 railroad retirement tax rates explicitly determined by
reference to social security taxes.
Sec. 7458. Deposits of payroll taxes.
Part VII--Miscellaneous Provisions
Sec. 7461. Overall limitation on itemized deductions.
Sec. 7462. Disallowance of deduction for interest on unpaid corporate taxes.
Sec. 7463. Denial of deduction for unnecessary cosmetic surgery.
Subtitle E--Other Provisions
Sec. 7471. Tax-related user fees made permanent.
Sec. 7472. Public debt limit extension.
Sec. 7473. Reports of refunds and credits.
Subtitle A--1-Year Extension of Certain Expiring Tax Provisions
SEC. 7101. ALLOCATION OF RESEARCH AND EXPERIMENTAL EXPENDITURES.
  (a) EXTENSION- Paragraph (5) of section 864(f) (relating to allocation of
  research and experimental expenditures) is amended to read as follows:
  `(5) YEARS TO WHICH RULE APPLIES- This subsection shall apply to the
  taxpayer's first two taxable years beginning after August 1, 1989, and on
  or before August 1, 1991.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
  taxable years beginning after August 1, 1989.
SEC. 7102. RESEARCH CREDIT.
  (a) EXTENSION- Subsection (h) of section 41 (relating to credit for
  increasing research activities) is amended--
  (1) by striking `December 31, 1990' each place it appears and inserting
  `December 31, 1991', and
  (2) by striking `January 1, 1991' each place it appears and inserting
  `January 1, 1992'.
  (b) CONFORMING AMENDMENTS-
  (1) Subsection (a) of section 7110 of the Revenue Reconciliation Act of
  1989 is amended by striking paragraph (2).
  (2) Subparagraph (D) of section 28(b)(1) is amended by striking `December
  31, 1990' and inserting `December 31, 1991'.
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  taxable years beginning after December 31, 1989.
SEC. 7103. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE.
  (a) IN GENERAL- Subsection (d) of section 127 (relating to educational
  assistance programs) is amended by striking `September 30, 1990' and
  inserting `December 31, 1991'.
  (b) REPEAL OF LIMITATION ON GRADUATE LEVEL ASSISTANCE- Section 127(c)(1)
  is amended by striking the last sentence.
  (c) CONFORMING AMENDMENT- Subsection (a) of section 7101 of the Revenue
  Reconciliation Act of 1989 is amended by striking paragraph (2).
  (d) EFFECTIVE DATES-
  (1) IN GENERAL- Except as provided in paragraph (2), the amendments made by
  this section shall apply to taxable years beginning after December 31, 1989.
  (2) SUBSECTION (b)- The amendment made by subsection (b) shall apply to
  taxable years beginning after December 31, 1990.
SEC. 7104. GROUP LEGAL SERVICES PLANS.
  (a) IN GENERAL- Subsection (e) of section 120 (relating to amounts
  received under qualified group legal services plans) is amended by striking
  `September 30, 1990' and inserting `December 31, 1991'.
  (b) CONFORMING AMENDMENT- Subsection (a) of section 7102 of the Revenue
  Reconciliation Act of 1989 is amended by striking paragraph (2).
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  taxable years beginning after December 31, 1989.
SEC. 7105. TARGETED JOBS CREDIT.
  (a) IN GENERAL- Paragraph (4) of section 51(c) is amended by striking
  `September 30, 1990' and inserting `December 31, 1991'.
  (b) AUTHORIZATION- Paragraph (2) of section 261(f) of the Economic Recovery
  Act of 1981 is amended by striking `fiscal year 1982' and all that follows
  through `necessary' and inserting `each fiscal year such sums as may
  be necessary'.
  (c) EFFECTIVE DATES-
  (1) CREDIT- The amendment made by subsection (a) shall apply to individuals
  who begin work for the employer after September 30, 1990.
  (2) AUTHORIZATION- The amendment made by subsection (b) shall apply to
  fiscal years beginning after 1990.
SEC. 7106. ENERGY INVESTMENT CREDIT FOR SOLAR, GEOTHERMAL, AND OCEAN THERMAL
PROPERTY.
  The table contained in section 46(b)(2)(A) (relating to energy percentage)
  is amended by striking `Sept. 30, 1990' in clauses (viii), (ix), and (x)
  and inserting `Dec. 31, 1991'.
SEC. 7107. LOW-INCOME HOUSING CREDIT.
  (a) EXTENSION-
  (1) IN GENERAL- Subsection (o) of section 42 (relating to low-income
  housing credit) is amended--
  (A) by striking `1990' each place it appears in paragraph (1) and inserting
  `1991', and
  (B) by striking paragraph (2) and inserting the following new paragraph:
  `(2) EXCEPTION FOR BOND-FINANCED BUILDINGS IN PROGRESS- For purposes of
  paragraph (1)(B), a building shall be treated as placed in service before
  1992 if--
  `(A) the bonds with respect to such building are issued before 1992,
  `(B) the taxpayer's basis in the project (of which the building is a part)
  as of December 31, 1991, is more than 10 percent of the taxpayer's reasonably
  expected basis in such project as of December 31, 1993, and
  `(C) such building is placed in service before January 1, 1994.'
  (2) CONFORMING AMENDMENT- Subsection (a) of section 7108 of the Revenue
  Reconciliation Act of 1989 is amended by striking paragraph (2).
  (3) EFFECTIVE DATE- The amendments made by this subsection shall apply to
  calendar years after 1989.
  (b) ADDITIONAL AMENDMENTS-
  (1) CLARIFICATION OF TENANT RIGHTS OF 1ST REFUSAL- Section 42(i) is amended--
  (A) by redesignating paragraph (8) as paragraph (7), and
  (B) by striking `the tenants of such building' in such paragraph and
  inserting `the tenants (in cooperative form or otherwise) or resident
  management corporation of such building or by a qualified nonprofit
  organization (as defined in subsection (h)(5)(C)) or government agency'.
  (2) MONITORING NONCOMPLIANCE- Clause (iv) of section 42(m)(1)(B) is amended
  to read as follows:
  `(iv) which provides a procedure that the agency (or an agent or
  other private contractor of such agency) will follow in monitoring for
  noncompliance with the provisions of this section and in notifying the
  Internal Revenue Service of such noncompliance which such agency becomes
  aware of.'
  (3) TREATMENT OF SECTION 515 RENTS- Subparagraph (B) of section 42(g)(2)
  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 inserting
  after clause (iii) the following new clause:
  `(iv) does not include any rental payment to the owner of the unit to
  the extent such owner pays an equivalent amount to the Farmers' Home
  Administration under section 515 of the Housing Act of 1949.'
  (4) QUALIFIED CENSUS TRACT DETERMINATIONS WHERE DATA NOT AVAILABLE- Subclause
  (I) of section 42(d)(5)(C)(ii) is amended by adding at the end thereof the
  following new sentence: `If the Secretary of Housing and Urban Development
  determines that sufficient data for any period are not available to apply
  this clause on the basis of census tracts, such Secretary shall apply this
  clause for such period on the basis of enumeration districts.'
  (5) EXCEPTION TO CREDIT DENIAL FOR MODERATE REHABILITATION ASSISTANCE-
  (A) IN GENERAL- Paragraph (2) of section 42(c) is amended by adding at
  the end thereof the following new sentence: `Such term does not include
  any building with respect to which moderate rehabilitation assistance is
  provided, at any time during the compliance period, under section 8(e)(2)
  of the United States Housing Act of 1937 (other than assistance under the
  Stewart B. McKinney Homeless Assistance Act of 1988 (as in effect on the
  date of the enactment of this sentence)).'
  (B) CONFORMING AMENDMENT- Paragraph (1) of section 42(b) is amended by
  striking the last sentence.
  (6) AFDC RECIPIENT STUDENTS NOT TO DISQUALIFY UNIT- Subparagraph (D)
  of section 42(i)(3) is amended to read as follows:
  `(D) CERTAIN STUDENTS NOT TO DISQUALIFY UNIT- A unit shall not fail to be
  treated as a low-income unit merely because it is occupied by an individual
  who is--
  `(i) a student and receiving assistance under title IV of the Social
  Security Act, or
  `(ii) enrolled in a job training program receiving assistance under the
  Job Training Partnership Act or under other similar Federal, State, or
  local laws.'
  (7) PASSIVE LOSS RULES NOT TO APPLY TO REHABILITATION CREDIT WITH RESPECT
  TO LOW-INCOME CREDIT BUILDING-
  (A) Subparagraph (C) of section 469(i)(3) is amended--
  (i) by inserting before the period `or which is attributable to the
  rehabilitation investment credit (within the meaning of section 48(o))
  with respect to a building for which a credit is determined under section
  42 for such year', and
  (ii) by striking `CREDIT' in the heading and inserting `CREDIT AND FOR
  REHABILITATION CREDIT ON LOW-INCOME CREDIT BUILDING'.
  (B) Subparagraph (B) of section 469(i)(3) is amended by striking `In the
  case' and inserting `Except as provided in subparagraph (C), in the case'.
  (8) INTERMEDIARY COSTS CONSIDERED AT EVALUATION STAGE-
  (A) IN GENERAL- Subparagraph (B) of section 42(m)(2) is amended by striking
  `and' at the end of clause (i), by striking the period at the end of clause
  (ii) and inserting `, and', and by adding at the end thereof the following:
  `(iii) the percentage of the housing credit dollar amount used for project
  costs other than the cost of intermediaries.
Clause (iii) shall not be applied so as to impede the development of projects
in hard-to-develop areas.'
  (B) CONFORMING AMENDMENT- Subparagraph (B) of section 42(m)(1) is amended
  by striking clause (ii) and by redesignating clauses (iii) and (iv) as
  clauses (ii) and (iii), respectively.
  (9) 10-YEAR RULE NOT TO APPLY TO ACQUISITION OF CERTAIN SINGLE-FAMILY
  RESIDENCES- Clause (ii) of section 42(d)(2)(D) is amended by striking
  `or' at the end of subclause (III), by striking the period at the end of
  subclause (IV) and inserting `, or', and by adding at the end thereof the
  following new subclause:
  `(V) of a single-family residence by any individual who owned and used
  such residence for no other purpose than as his principal residence.'
  (10) APPLICATION OF NONPROFIT SET-ASIDE- Section 42(h)(5) is amended--
  (A) by inserting `own an interest in the project (directly or through a
  partnership) and' after `nonprofit organization is to' in subparagraph (B),
  (B) by striking `and' at the end of clause (i) of subparagraph (C), by
  redesignating clause (ii) of such subparagraph as clause (iii), and by
  inserting after clause (i) of such subparagraph the following new clause:
  `(ii) such organization is determined by the State housing credit agency not
  to be affiliated with or controlled by a for-profit organization; and', and
  (C) by inserting `ownership and' before `material participation' in
  subparagraph (D).
  (11) EFFECTIVE DATES-
  (A) IN GENERAL- Except as otherwise provided in this paragraph, the
  amendments made by this subsection shall apply to--
  (i) determinations under section 42 of the Internal Revenue Code of 1986
  with respect to housing credit dollar amounts allocated from State housing
  credit ceilings for calendar years after 1990, or
  (ii) buildings placed in service after December 31, 1990, to the extent
  paragraph (1) of section 42(h) of such Code does not apply to any building
  by reason of paragraph (4) thereof.
  (B) TENANT RIGHTS, ETC- The amendments made by paragraphs (1), (6), and
  (9) shall take effect on the date of the enactment of this Act.
  (C) MONITORING- With respect to the amendment made by paragraph (2),
  subparagraph (A) of this paragraph shall apply by substituting `1991' for
  `1990' each place it appears.
  (D) PASSIVE LOSS-
  (i) Except as provided in clause (ii), the amendments made by paragraph
  (7) shall apply to property placed in service after December 31, 1990,
  in taxable years ending after such date.
  (ii) In the case of a taxpayer who holds an indirect interest in property
  described in clause (i), the amendments made by paragraph (7) shall apply
  only if such interest is acquired after December 31, 1990.
SEC. 7108. QUALIFIED MORTGAGE BONDS.
  (a) IN GENERAL- Subparagraph (B) of section 143(a)(1) (defining qualified
  mortgage bond) is amended by striking `September 30, 1990' each place it
  appears and inserting `December 31, 1991'.
  (b) MORTGAGE CREDIT CERTIFICATES- Subsection (h) of section 25 (relating to
  interest on certain home mortgages) is amended by striking `September 30,
  1990' and inserting `December 31, 1991'.
  (c) RECAPTURE PROVISION- Paragraph (3)(A) of section 4005(h) of the
  Technical and Miscellaneous Revenue Act of 1988 (relating to effective
  dates) is amended by striking `1990' and inserting `1991'.
  (d) EFFECTIVE DATES-
  (1) BONDS- The amendment made by subsection (a) shall apply to bonds issued
  after September 30, 1990.
  (2) CERTIFICATES- The amendment made by subsection (b) shall apply to
  elections for periods after September 30, 1990.
SEC. 7109. QUALIFIED SMALL ISSUE BONDS.
  (a) IN GENERAL- Subparagraph (B) of section 144(a)(12) (relating to
  termination dates) is amended by striking `September 30, 1990' and inserting
  `December 31, 1991'.
  (b) EFFECTIVE DATE- The amendment made by this section shall apply to
  bonds issued after September 30, 1990.
SEC. 7110. HEALTH INSURANCE COSTS OF SELF-EMPLOYED INDIVIDUALS.
  (a) IN GENERAL- Paragraph (6) of section 162(l) (relating to special rules
  for health insurance costs of self-employed individuals) is amended by
  striking `September 30, 1990' and inserting `December 31, 1991'.
  (b) CONFORMING AMENDMENT- Subsection (a) of section 7107 of the Revenue
  Reconciliation Act of 1989 is amended by striking paragraph (2).
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  taxable years beginning after December 31, 1989.
SEC. 7111. EXPENSES FOR DRUGS FOR RARE CONDITIONS.
  (a) IN GENERAL- Subsection (e) of section 28 (relating to clinical testing
  expenses for certain drugs for rare diseases or conditions) is amended by
  striking `December 31, 1990' and inserting `December 31, 1991'.
  (b) CONFORMING AMENDMENT- Section 28(b)(1) is amended by striking
  subparagraph (D).
Subtitle B--Tax Incentives
PART I--ENERGY INCENTIVES
SEC. 7201. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING FUEL FROM
NONCONVENTIONAL SOURCE.
  (a) CREDIT MADE PERMANENT- Section 29(f)(1) of the Internal Revenue Code
  of 1986 (relating to application of section) is amended--
  (1) by striking `and before January 1, 1991,' in clauses (i) and (ii)
  of subparagraph (A), and
  (2) by striking `, and before January 1, 2001' in subparagraph (B).
  (b) Modification With Respect to Gas From Tight Formations-
  (1) IN GENERAL- Subparagraph (B) of section 29(c)(2) of such Code is
  amended to read as follows:
  `(B) SPECIAL RULES FOR GAS FROM TIGHT FORMATIONS- The term `gas produced
  from a tight formation' shall only include gas from a tight formation--
  `(i) which, as of April 20, 1977, was committed or dedicated to interstate
  commerce (as defined in section 2(18) of the Natural Gas Policy Act of 1978,
  as in effect on the date of the enactment of this clause), or
  `(ii) which is produced from a well drilled after such date of enactment.'
  (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply to
  gas produced after December 31, 1990.
SEC. 7202. CREDIT FOR SMALL PRODUCERS OF ETHANOL; MODIFICATION OF ALCOHOL
FUELS CREDIT.
  (a) ALLOWANCE OF CREDIT- Section 40(a) (relating to alcohol used as fuel)
  is amended--
  (1) by striking the end period in paragraph (2) and inserting `, plus', and
  (2) by adding at the end thereof the following new paragraph:
  `(3) in the case of an eligible small ethanol producer, the small ethanol
  producer credit.'
  (b) SMALL ETHANOL PRODUCER CREDIT- Subsection (b) of section 40 is amended--
  (1) by redesignating paragraph (4) as paragraph (5),
  (2) by inserting after paragraph (3) the following new paragraph:
  `(4) SMALL ETHANOL PRODUCER CREDIT-
  `(A) IN GENERAL- The small ethanol producer credit of any eligible small
  ethanol producer for any taxable year is 10 cents for each gallon of
  qualified ethanol fuel production of such producer.
  `(B) QUALIFIED ETHANOL FUEL PRODUCTION- For purposes of this paragraph,
  the term `qualified ethanol fuel production' means any alcohol which is
  ethanol which is produced by an eligible small ethanol producer, and which
  during the taxable year--
  `(i) is sold by such producer to another person--
  `(I) for use by such other person in the production of a qualified mixture
  in such other person's trade or business (other than casual off-farm
  production),
  `(II) for use by such other person as a fuel in a trade or business, or
  `(III) who sells such ethanol at retail to another person and places such
  ethanol in the fuel tank of such other person, or
  `(ii) is used or sold by such producer for any purpose described in clause
  (i).
  `(C) LIMITATION- The qualified ethanol fuel production of any producer
  for any taxable year shall not exceed 15,000,000 gallons.
  `(D) ADDITIONAL DISTILLATION EXCLUDED- The qualified ethanol fuel production
  of any producer for any taxable year shall not include any alcohol which is
  purchased by the producer and with respect to which such person increases
  the proof of the alcohol by additional distillation.'; and
  (3) by striking `AND ALCOHOL CREDIT' in the heading for such subsection
  and inserting `, ALCOHOL CREDIT, AND SMALL ETHANOL PRODUCER CREDIT'.
  (c) DEFINITIONS AND SPECIAL RULES FOR ELIGIBLE SMALL ETHANOL PRODUCER
  CREDIT- Section 40 is amended by adding at the end thereof the following
  new subsection:
  `(g) DEFINITIONS AND SPECIAL RULES FOR ELIGIBLE SMALL ETHANOL PRODUCER
  CREDIT- For purposes of this section--
  `(1) ELIGIBLE SMALL ETHANOL PRODUCER- The term `eligible small ethanol
  producer' means a person who, at all times during the taxable year, has
  a productive capacity for alcohol (as defined in subsection (d)(1)(A)
  without regard to clauses (i) and (ii)) not in excess of 20,000,000 gallons.
  `(2) AGGREGRATION RULE- For purposes of the 15,000,000 gallon limitation
  under subsection (b)(4)(C) and the 20,000,000 gallon limitation under
  paragraph (1), all members of the same controlled group of corporations
  (within the meaning of section 267(f)) and all persons under common control
  (within the meaning of section 52(b) but determined by treating a 50 percent
  or greater interest as a controlling interest) shall be treated as 1 person.
  `(3) PARTNERSHIP, S CORPORATIONS, AND OTHER PASS-THRU ENTITIES- In the
  case of a partnership, trust, S corporation, or other pass-thru entity,
  the limitations contained in subsection (b)(4)(C) shall be applied at the
  entity level and at the partner or similar level.
  `(4) ALLOCATION- For purposes of this subsection, in the case of a facility
  in which more than 1 person has an interest, productive capacity shall be
  allocated among such persons in the same manner as production is allocated.
  `(5) REGULATIONS- The Secretary may prescribe such regulations as may
  be necessary--
  `(A) to prevent the credit provided for in subsection (a)(3) from directly
  or indirectly benefiting any person with a direct or indirect productive
  capacity of more than 20,000,000 gallons of alcohol during the taxable
  year, or
  `(B) to prevent any person from directly or indirectly benefiting with
  respect to more than 15,000,000 gallons during the taxable year.'
  (d) ALCOHOL NOT USED AS FUEL-
  (1) IN GENERAL- Section 40(d)(3) is amended by redesignating subparagraph (C)
  as subparagraph (D) and by inserting after subparagraph (B) the following
  new subparagraph:
  `(C) PRODUCER CREDIT- If--
  `(i) any credit was determined under this section, and
  `(ii) any person does not use such fuel for a purpose described in subsection
  (b)(4)(B),
then there is hereby imposed on such person a tax equal to 10 cents a gallon
for each gallon of such alcohol.'
  (2) CONFORMING AMENDMENT- Section 40(d)(3)(D), as redesignated by paragraph
  (1), is amended by striking `subparagraph (A) or (B)' and inserting
  `subparagraph (A), (B), or (C)'.
  (e) REDUCED CREDIT FOR ETHANOL BLENDERS-
  (1) IN GENERAL- Section 40, as amended by subsection (c), is amended by
  adding at the end thereof the following new subsection:
  `(h) REDUCED CREDIT FOR ETHANOL BLENDERS- In the case of any alcohol mixture
  credit or alcohol credit with respect to any alcohol which is ethanol--
  `(1) subsections (b)(1)(A) and (b)(2)(A) shall be applied by substituting
  `55 cents' for `60 cents';
  `(2) subsection (b)(3) shall be applied by substituting `40 cents' for
  `45 cents' and `55 cents' for `60 cents'; and
  `(3) subparagraphs (A) and (B) of subsection (d)(3) shall be applied by
  substituting `55 cents' for `60 cents' and `40 cents' for `45 cents'.'
  (2) CONFORMING AMENDMENT- Section 40(b) is amended by inserting `, and except
  as provided in subsection (h)' in the matter preceding paragraph (1) thereof.
  (f) TERMINATION- Subsection (e) of section 40 is amended to read as follows:
  `(e) TERMINATION-
  `(1) IN GENERAL- This section shall not apply to any sale or use--
  `(A) for any period after December 31, 2000, or
  `(B) for any period before January 1, 2001, during which the Highway Trust
  Fund financing rate under section 4081(a)(2) is not in effect.
  `(2) NO CARRYOVERS TO CERTAIN YEARS AFTER EXPIRATION- If this section ceases
  to apply for any period by reason of paragraph (1), no amount attributable
  to any sales or uses before the first day of such period may be carried
  under section 39 by reason of this section (treating the amount allowed
  by reason of this section as the first amount allowed by this subpart)
  to any taxable year beginning after the second taxable year beginning
  after the taxable year in which such first day occurs.'
  (g) CONFORMING AMENDMENTS TO TARIFF SCHEDULE-
  (1) Heading 9901.00.50 of the Harmonized Tariff Schedule of the United
  States (19 U.S.C. 3007) is amended--
  (A) by striking `15.85›' each place it appears and inserting `14.53›', and
  (B) by striking out the date in the effective period column and inserting
  `Before 10/1/2000, except that the rate for articles described in this
  heading shall not apply during any period before 10/1/2000 during which
  the Highway Trust Fund financing rate under section 4081(a)(2) of the
  Internal Revenue Code of 1986 is not in effect.'
  (2) Heading 9901.00.52 of the Harmonized Tariff Schedule of the United
  States is amended by striking out `The earlier of 12/31/92, or the date on
  which Treasury regulation  1.40-1 is withdrawn or declared invalid.' in the
  effective period column and inserting: `Before the earlier of 10/1/2000,
  or the date on which Treas. Reg.  1.40-1 is withdrawn or declared invalid,
  except that the rate for articles described in this heading shall not
  apply during any period before 10/1/2000 during which the Highway Trust
  Fund financing rate under section 4081(a)(2) of the Internal Revenue Code
  of 1986 is not in effect.'
  (h) EFFECTIVE DATES-
  (1) Except as provided in paragraph (2), the amendments made by this
  section shall apply to alcohol produced, and sold and used, in taxable
  years beginning after December 31, 1990.
  (2) The amendments made by subsection (g) shall apply to articles entered
  or withdrawn from warehouse on or after January 1, 1991.
SEC. 7203. TAX CREDIT TO INCREASE DOMESTIC ENERGY EXPLORATION AND PRODUCTION.
  (a) IN GENERAL- Subpart D of part IV of subchapter A of chapter 1 (relating
  to general business credits) is amended by adding at the end thereof the
  following new section:
`SEC. 43. DOMESTIC ENERGY EXPLORATION AND PRODUCTION CREDIT.
  `(a) GENERAL RULE- There shall be allowed as a credit against the tax
  imposed by this chapter for any taxable year an amount equal to 15 percent
  of the sum of--
  `(1) the qualified enhanced oil recovery costs, plus
  `(2) the qualified exploratory costs,
of the taxpayer for such taxable year.
  `(b) PHASE-OUT OF CREDIT AS CRUDE OIL PRICES INCREASE-
  `(1) IN GENERAL- The amount of the credit allowable under subsection (a)
  shall be reduced by an amount which bears the same ratio to the amount of
  such credit (determined without regard to this paragraph) as--
  `(A) the amount by which the reference price for the calendar year preceding
  the calendar year in which the taxable year begins exceeds $28, bears to
  `(B) $6.
  `(2) REFERENCE PRICE- For purposes of this subsection, the term `reference
  price' means, with respect to any calendar year, the reference price
  determined for such calendar year under section 29(d)(2)(C).
  `(3) INFLATION ADJUSTMENT-
  `(A) IN GENERAL- The $28 amount under paragraph (1)(A) for any taxable year
  beginning in a calendar year after 1991 shall be equal to the product of--
  `(i) $28, multiplied by
  `(ii) the inflation adjustment factor for such calendar year.
  `(B) INFLATION ADJUSTMENT FACTOR- The term `inflation adjustment factor'
  means, with respect to any calendar year, a fraction the numerator of
  which is the GNP implicit price deflator for the preceding calendar
  year and the denominator of which is the GNP implicit price deflator for
  1990. For purposes of the preceding sentence, the term `GNP implicit price
  deflator' means the first revision of the implicit price deflator for
  the gross national product as computed and published by the Secretary of
  Commerce. Not later than April 1 of any calendar year, the Secretary shall
  publish the inflation adjustment factor for the preceding calendar year.
  `(4) CARRYBACKS AND CARRYFORWARDS- This subsection shall not apply to any
  carryback or carryforward to the taxable year under section 39.
  `(c) QUALIFIED COSTS- For purposes of this section--
  `(1) QUALIFIED ENHANCED OIL RECOVERY COSTS-
  `(A) IN GENERAL- The term `qualified enhanced oil recovery costs' means
  any of the following:
  `(i) Any amount paid or incurred during the taxable year for tangible
  property--
  `(I) which is an integral part of a qualified enhanced oil recovery
  project, and
  `(II) with respect to which depreciation (or amortization in lieu of
  depreciation) is allowable under this chapter.
  `(ii) Any intangible drilling and development costs--
  `(I) which are paid or incurred in connection with a qualified enhanced
  oil recovery project, and
  `(II) with respect to which the taxpayer may make an election under section
  263(c) for the taxable year.
  `(iii) Any qualified tertiary injectant expenses which are paid or incurred
  in connection with a qualified enhanced oil recovery project and for which
  a deduction is allowable under section 193 for the taxable year.
  `(B) QUALIFIED ENHANCED OIL RECOVERY PROJECT- For purposes of this
  paragraph--
  `(i) IN GENERAL- The term `qualified enhanced oil recovery project' means
  any project--
  `(I) which involves the application (in accordance with sound engineering
  principles) of 1 or more tertiary recovery methods (as defined in section
  193(b)(3)) which can reasonably be expected to result in more than an
  insignificant increase in the amount of crude oil which will ultimately
  be recovered,
  `(II) which is located within the United States (within the meaning of
  section 638(1)), and
  `(III) with respect to which the date on which the injection of liquids,
  gases, or other matter first begins is after December 31, 1990.
  `(ii) CERTIFICATION- A project shall not be treated as a qualified enhanced
  oil recovery project unless the operator submits to the Secretary (at
  such times and in such manner as the Secretary provides) a certification
  from a petroleum engineer that the project meets (and continues to meet)
  the requirements of clause (i).
  `(C) AT-RISK LIMITATION- For purposes of determining qualified enhanced
  oil recovery costs, rules similar to the rules of section 46(c)(8),
  section 46(c)(9), and section 47(d)(1) shall apply.
  `(2) QUALIFIED EXPLORATORY COSTS-
  `(A) IN GENERAL- The term `qualified exploratory costs' means intangible
  drilling and development costs of a taxpayer other than an integrated oil
  company which--
  `(i) the taxpayer may elect to deduct as expenses under section 263(c), and
  `(ii) are paid or incurred in connection with the drilling of an exploratory
  well located in the United States (within the meaning of section 638(1)).
  `(B) EXPLORATORY WELL- The term `exploratory well' means any of the
  following oil or gas wells:
  `(i) An oil or gas well which is completed (or if not completed, with
  respect to which drilling operations cease) before the completion of any
  other well which--
  `(I) is located within 1.25 miles from the well, and
  `(II) is capable of production in commercial quantities,
  `(ii) An oil or gas well which is not described in clause (i) but which has
  a completion depth which is at least 800 feet below the deepest completion
  depth of any well within 1.25 miles which is capable of production in
  commercial quantities.
  `(iii) An oil or gas well which is not described in clause (i) or (ii)
  but which is completed into a new reservoir.
A well shall not be treated as an exploratory well unless the operator submits
to the Secretary (at such time and in such manner as the Secretary may provide)
a certification from a petroleum engineer that the well is described in one
of the preceding clauses.
  `(C) CERTAIN COSTS NOT INCLUDED- The term `qualified exploratory costs'
  shall not include any cost paid or incurred--
  `(i) in constructing, acquiring, transporting, erecting, or installing
  an offshore platform, or
  `(ii) after the installation of the production string of casing begins.
  `(D) INTEGRATED OIL COMPANY- For purposes of this paragraph, the term
  `integrated oil company' means, with respect to any taxable year, any
  producer of crude oil to whom subsection (c) of section 613A does not
  apply by reason of paragraph (2) or (4) of section 613A(d).
  `(e) OTHER RULES-
  `(1) DISALLOWANCE OF DEDUCTION- Any deduction allowable under this chapter
  for any costs taken into account in computing the amount of the credit
  allowed under subsection (a) shall be reduced by the amount of such credit
  attributable to such costs.
  `(2) BASIS ADJUSTMENTS- For purposes of this subtitle, if a credit is allowed
  under this section for any expenditure with respect to any property, the
  increase in the basis of such property which would (but for this subsection)
  result from such expenditure shall be reduced by the amount of the credit
  so allowed.'
  (b) ADDITION TO GENERAL BUSINESS CREDIT-
  (1) IN GENERAL- Section 38(b) (defining current year business credit) is
  amended by striking `plus' at the end of paragraph (4), by striking the
  period at the end of paragraph (5) and inserting `, plus', and by adding
  at the end thereof the following new paragraph:
  `(6) the domestic energy exploration and production credit under section
  43(a).'
  (2) CARRYBACKS- Section 39(d) is amended by adding at the end thereof the
  following new paragraph:
  `(5) NO CARRYBACK OF ENERGY EXPLORATION AND PRODUCTION CREDIT BEFORE
  1991- No portion of the unused business credit for any taxable year which
  is attributable to the credit determined under section 43 (relating to
  domestic energy exploration and production credit) may be carried to a
  taxable year beginning before January 1, 1991.'
  (c) CONFORMING AMENDMENT- The table of sections for subpart D of part IV
  of subchapter A of chapter 1 is amended by adding at the end thereof the
  following new item:
`Sec. 43. Domestic energy exploration and production credit.'
  (d) EFFECTIVE DATES-
  (1) IN GENERAL- The amendments made by this section shall apply to costs
  paid or incurred in taxable years beginning after December 31, 1990.
  (2) SPECIAL RULE FOR SIGNIFICANT EXPANSION OF PROJECTS- For purposes of
  section 43(c)(1)(B)(i)(III) of the Internal Revenue Code of 1986 (as added
  by subsection (a)), any significant expansion after December 31, 1990, of
  a project begun before January 1, 1991, shall be treated as a new project
  begun after December 31, 1990.
SEC. 7204. PERCENTAGE DEPLETION PERMITTED AFTER TRANSFER OF PROVEN PROPERTY.
  (a) IN GENERAL- Subsection (c) of section 613A (relating to limitations
  on percentage depletion in the case of oil and gas wells) is amended by
  striking paragraphs (9) and (10) and by redesignating paragraphs (11),
  (12), and (13) as paragraphs (9), (10), and (11), respectively.
  (b) TECHNICAL AMENDMENT- Paragraph (11) of section 613A(c), as redesignated
  by subsection (a), is amended by striking subparagraphs (C) and (D).
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  transfers after October 11, 1990.
SEC. 7205. NET INCOME LIMITATION ON PERCENTAGE DEPLETION INCREASED FROM 50
PERCENT TO 100 PERCENT OF PROPERTY NET INCOME FOR OIL AND NATURAL GAS WELLS.
  (a) IN GENERAL- The second sentence of subsection (a)