STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS; Congressional Record Vol. 151, No. 4
(Senate - January 24, 2005)

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[[Page S146]]
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GREGG (for himself, Mr. Frist, Mr. Sessions, Mr. DeWine, 
        Mr. Allen, Mr. Santorum, Mr. McConnell, and Mr. DeMint):
  S. 3. A bill to strengthen and protect America in the war on terror; 
to the Committee on Finance.
  Mr. ENZI. Mr. President, as reports continue to appear in the media, 
there can be little doubt that a critical area of homeland security, 
and one on which I will be focusing as Chairman of the Health, 
Education, Labor and Pensions Committee, is the issue of bioterrorism. 
It is clear that we cannot separate the need for a strong national 
biodefense from other aspects of emergency preparedness.
  Last summer, when President Bush signed the Project Bioshield Act 
into law, he called bioterrorism and efforts to use modern technologies 
against us the greatest danger of our time. The threat posed by 
bioterror has not gone unnoticed by terrorists and those who wish to do 
us harm. That is why we must continue to do everything we can to ensure 
our ability to respond to the use of biological weapons.
  In the months to come, my Committee will be working together to 
develop the strategy we will need to provide for a strong national 
biodefense. We will be exploring a number of options in that effort, 
like providing incentives to increase private sector participation in 
the development of bioterror countermeasures and biopreparedness tools. 
We will also be examining ways to strengthen our domestic vaccine 
industry and increase the overall readiness of our public health 
system.
  While I commend its intent, I declined to cosponsor S. 3, the 
Republican leadership bioterrorism bill introduced today. I look 
forward to developing bipartisan legislation to strengthen our national 
biodefense system in our Committee. Senator Burr, who will be heading 
the Subcommittee on Bioterrorism and Public Health Preparedness, will 
be an important part of that effort. I am also looking forward to the 
input of my fellow Committee members, including Senators Kennedy, Gregg 
and Hatch, as well as Senator Lieberman, who, while not a member of my 
Committee, has made this a priority of his work in the Congress and put 
a great deal of thought and effort into the area. In the coming weeks 
and months, I will also be convening a number of discussions with 
critical stakeholders and experts as we develop our legislation.
  Together, I am confident we can build on the work Congress and 
President Bush began with the Project Bioshield legislation and do what 
is necessary to ensure that we are as prepared as we possibly can be 
for the ever-present and constantly changing threat of bioterrorism.
                                 ______
                                 
      By Mr. ENZI (for himself, Mr. Frist, and Mr. McConnell):
  S. 9. A bill to improve American competitiveness in the global 
economy by improving and strengthening Federal education and training 
programs, and for other purposes; to the Committee on Finance.
  Mr. ENZI. Mr. President, last week we had an opportunity to be a part 
of a truly historic event. As we gathered together on the west front of 
the Capitol, a huge crowd joined us along the Mall and down 
Pennsylvania Avenue to witness the inauguration of President Bush. It 
was a great moment for America as the President took his oath of 
office. Later, in what was one of the best inaugural speeches I have 
ever heard, he outlined his vision for the future and the theme for his 
second term.
  It filled my heart with pride to hear him speak about freedom and the 
role America would continue to play in helping to bring its bright 
light to bear on the darkest regions of the world. As he spoke, I was 
pleased to hear him also renew, his commitment to our Nation's 
education system and to bringing the highest standards to our schools. 
The President made it clear that such an effort was an important part 
of making sure that every American has a stake in our future as a 
nation. Without it, the American dream we have shared for many years 
may be reduced to a nightmare for future generations.
  Clearly, we can't allow that to happen. That is why I am pleased to 
join, with the distinguished majority leader, Dr. Frist, and my friend 
and colleague, from Tennessee, Senator Alexander, in introducing 
legislation we have written to address that need and ensure a brighter 
future for our children. Among the goals our legislation seeks to 
address is the importance of strengthening our public education system, 
ensuring parents are involved in the process and, above all, giving our 
teachers the support they need to obtain the results we must have if 
our children are to have the best chance to succeed in life.
  The legislation I am introducing today continues the work we began 
with the passage of the No Child Left Behind Act. That bipartisan 
legislation made it clear that we had high expectations for all public 
school children. It made making sure those expectations were met the 
center of our Federal education policy. That policy has had good 
results. Children all over the country, including minority children, 
are improving their reading skills. Their math scores are getting 
better. In another 2 years, when science is included in the State 
assessments, I believe we will see that students are doing better in 
that subject, too. Thanks to the passage of the No Child Left Behind 
Act that we all had a hand in, we are continuing to see more and more 
positive results in our schools.
  Although our record of success is impressive, there is still room for 
more improvement. According to the most recent National Assessment of 
Education Progress, over 25 percent of twelfth grade students could not 
read at grade level. Only two-thirds of students entering the ninth 
grade are expected to complete high school within 4 years. That is a 
dire forecast for our future, but it need not be so if we stick to the 
goals we have set and work to achieve them.
  We want to make sure we continue to set high expectations of what all 
students can achieve, regardless of their background. This needs to be 
a common theme in all our Federal education programs. All students can 
learn and every child can be a star pupil. It is not just a slogan. It 
is a philosophy that our teachers need to put into practice every day 
in the classroom. It must then be echoed by every student's parents 
each evening at home at the dinner table.
  We need to make sure Federal programs emphasize accountability, but 
we also need to make sure we do it in a way that makes sense. Many 
Federal programs designed to serve the same population of students have 
different requirements. We can help our teachers serve their students 
better by reducing the amount of time they spend outside the classroom 
on activities that don't help our children learn. Federal program 
requirements should not work against the, goal we have set of improving 
student achievement.
  It is important to provide flexibility to the States so they can 
manage Federal program dollars and address their unique needs in the 
most effective manner possible. We need to let leaders at the State and 
local level make the important decisions about this country's 
education, because they are at the level closest to the people--and 
closest to the classroom where we must continue to get good results 
from our efforts.
  The needs of rural schools must also continue to be addressed. 
Schools in rural States like Wyoming have unique needs and serve 
smaller populations. They can't be administered like the large schools 
of the big cities in the East. One-size-fits-all policies that may work 
in large population centers are all too often doomed to fail in the 
smaller towns and cities of the West.
  Although funding will be a key in the effort to address these issues, 
the Federal Government provides only a fraction of education spending 
in this country. For K-12 education, the Federal investment is still 
around 8 percent. The rest of the money comes from States and local 
districts. We need to trust these educators and administrators to work 
on behalf of the children in their charge. We must ensure they have the 
tools they need to serve their students and help all children in their 
area succeed.
  We also want to support lifelong learning opportunities for students 
at every stage in their life. Education is

[[Page S147]]

changing; the way we approach learning has to change as well. Federal 
programs should reflect these changes and help our students adapt to 
them. Las year, more than 70 percent of college students were 
considered ``nontraditional.'' Our education system needs to address 
the needs of adult learners, as well as children who take the more 
``traditional'' track in education.
  We want to create a strong link between education and the workforce. 
Businesses are creating and filling good jobs with good candidates, and 
we want to make sure we are filling those jobs with American workers.
  In our technology-driven economy, school can never be out. It is 
estimated that 60 percent of tomorrow's jobs will require skills that 
only 20 percent of today's workers possess. It is also estimated that 
the average worker leaving college today will switch careers 14 times 
in their life, and 10 of those careers haven't been invented yet.
  To address those needs, we need a system in place that can support a 
lifetime of education, training, and retraining. As tomorrow's workers 
change careers, they will need to learn new skills, or to apply their 
current skills in new ways. Our postsecondary institutions will play a 
critical role in supporting these students, as they do now through a 
number of Federal education programs.
  High school dropouts are the most at-risk school population in the 
workforce. We must look at Federal efforts to reform high schools to 
make sure we are keeping students in school. We need to make sure that 
students are leaving high school with a diploma, a quality education, 
and the strong foundation of reading, writing, math and science skills 
that will help them succeed in the workforce. We must also reach out to 
those who do not have high school diplomas to give them an opportunity 
to increase the level of their skills so that they, too, have a chance 
to succeed in life. We can do that by increasing their awareness of and 
involvement in lifetime of learning programs.
  In this bill, we have also included language to reauthorize the 
Workforce Investment Act. That will help an estimated 900,000 
unemployed workers each year get back to work and provide American 
workers with the skills they will need to be competitive in the global 
marketplace. That will help them land the good jobs that will be 
created in the years to come. Our legislation will also support the 
needs of businesses including small businesses looking for skilled 
workers. In addition, the bill will strengthen the role of public 
education institutions in the Federal workforce preparation effort, 
including our community colleges.
  As we work on this and other education legislation, we must ensure we 
are focused on getting the results that will help our children succeed 
in life. We can do that by incorporating high expectations, 
accountability, flexibility for our States in administering Federal 
assistance, and a lifetime of learning opportunities, into our 
education policies. If we do that, every child's life will be a success 
story and everyone will have the freedom to live their own version of 
the American dream.
  As we continue to work on improving our Nation's education system, an 
educated citizenry will continue to be our goal. It will never be 
enough to provide our children with a diploma. We must provide them 
with the skills they will need to compete for and win the jobs of 
tomorrow and keep them.
                                 ______
                                 
      By Mr. LEVIN (for himself, Mr. Reid, Ms. Mikulski, Ms. Stabenow, 
        Mr. Inouye, Mr. Dorgan, Mr. Lautenberg, Mr. Leahy, Mr. Salazar, 
        Mr. Rockefeller, Mrs. Murray, Mr. Bingaman, Mrs. Feinstein, Mr. 
        Durbin, Mr. Kennedy, Mr. Corzine, Mr. Pryor, Mr. Nelson of 
        Nebraska, Mr. Reed, Mr. Schumer, and Mr. Dayton):
  S. 11. A bill to amend title 10, United States Code, to ensure that 
the strength of the Armed Forces and the protections and benefits for 
members of the Armed Forces and their families are adequate for keeping 
the commitment of the people of the United States to support their 
service members, and for other purposes; to the Committee on Finance.
  Mr. LEVIN. Mr. President, I am honored to introduce the Standing with 
Our Troops Act of 2005. This bill addresses the needs of the Soldiers, 
Sailors, Airmen, and Marines who have responded so bravely to the call 
of our Nation. We owe it to them and their families to ensure that they 
are properly trained and equipped for the hazardous duties they are 
performing, that they are fairly compensated for their service, and 
that they receive their pay in the correct amount, on time.
  We start with the recognition that we have cut our troop strength too 
far to sustain current military operations. This bill would authorize 
increases of up to 40,000 additional active duty Soldiers and Marines 
over the next two years. The bill authorizes an increase in the active 
duty Army end strength by up to 20,000 Soldiers in 2006 and an 
additional 10,000 in 2007, and it authorizes an increase in the Marine 
Corps' active duty end strength by up to 5,000 Marines in 2006 and an 
additional 5,000 Marines in 2007.
  The Department of Defense currently reports numbers of service 
members killed or seriously wounded in action in our ongoing combat 
operations in Iraq and Afghanistan. This bill would require a formal 
monthly report that includes the numbers of Soldiers, Sailors, Airmen 
and Marines who are killed in action; killed as a result of non-combat 
injuries incurred during combat operations; killed as a result of self-
inflicted wounds or suicide; wounded in action, when the injuries 
prevent the service member from returning to duty within 72 hours; 
wounded in action when the service member returns to duty within 72 
hours, insofar as this data is currently maintained; and the total 
number of service personnel evacuated from theater for medical reasons.
  To ensure that awards and decorations are expeditiously and fairly 
awarded to deserving military personnel, this bill would establish an 
Advisory Panel on Military Awards and Decorations to review the 
policies and practices of each of the Services for awarding medals and 
decorations and to report to Congress. This Panel would compare the 
different Service policies and practices for decorating its military 
personnel, and make a recommendation as to whether individual service 
practices should be continued or a single standard adopted that applies 
to all Services; recommend measures that can be taken to ensure that 
service members serving in combat are at least as likely to receive 
medals as those not exposed to combat, and enlisted personnel are just 
as likely as officers to be decorated for their service.
  This bill would create an Office of Mobilization Planning and 
Preparedness within the National Security Council to ensure that all of 
our national resources are assembled and organized to respond to a 
national security emergency. National resources include our military, 
labor, transportation, industry and financial resources.
  We know that current military operations are wearing out military 
equipment faster than we are replacing it. To address this, this bill 
would require the Secretary of Defense to report to Congress on the 
needs of our military forces for reconstituting stocks of equipment and 
material damaged, destroyed, and worn out in Operation Iraqi Freedom 
and Operation Enduring Freedom. The report will include the needs of 
each military service, including the reserve components, for repair and 
replacement of equipment; and authorize appropriation of $8.5 billion 
for the Army and $2.1 billion for the Marine Corps for repair, 
refurbishment, and replacement of equipment used in OIF and OEF.
  The Government Accountability Office (GAO) found, and I agree, that 
the Department of Defense's mobilization and deployment policies were 
implemented in a piecemeal fashion not linked to a strategic framework. 
We owe it to our service men and women to have clear policies regarding 
lengths of deployments. The Department of Defense must clearly 
communicate these policies and other deployment related information to 
service members and their families. This bill would require the 
Secretary of Defense to report to Congress on DoD policies on lengths 
of mobilization and deployment periods and on the use of stop-loss to 
keep military personnel in the service beyond their service 
commitments.

[[Page S148]]

  In two separate reports, the GAO has found that more than 90 percent 
mobilized reserve component personnel experienced pay problems. The GAO 
found that ``These pay problems often had a profound adverse impact on 
individual soldiers and their families.'' This bill would require the 
designation of a senior official to ensure implementation of GAO 
recommendations to correct these pay problems.
  Representation of our reserve component personnel at the highest 
levels in the Department of Defense has not kept pace with the 
increased role of our Guard and Reserve personnel. Accordingly, this 
bill creates a new position, a Deputy Under Secretary of Defense for 
Reserve Affairs, to speak for the Reserve Components.
  This bill would give tax relief to mobilized service members and 
employers who make up for pay lost to service members who are ordered 
to active duty. It would amend the Internal Revenue Code to authorize 
activated National Guard and Reserve personnel to make penalty free 
withdrawals from qualified retirement plans; allow employers a tax 
deduction for making up the difference between military pay and 
civilian income of mobilized reservists; and authorize a tax credit to 
small business employers who continue to compensate members of the 
Ready Reserve ordered to active duty and for costs of hiring a 
replacement employee.
  We know that the military pay of about a third of our mobilized 
National Guard and Reserve personnel is less than the pay they received 
from their civilian jobs. Many private employers already pay a wage 
differential to those who lose money, and we will encourage more to do 
so with the tax incentives I have just described. The biggest employer 
of our Guard and Reserve personnel is the Federal Government, and the 
Federal Government should do as much as the private employers do for 
those who lose money while serving our Nation. This bill would require 
Federal Agencies to make up the pay differences for Federal employees 
who are ordered to active duty.
  Studies have shown that 40 percent of our junior enlisted members in 
the reserve components have no health insurance except when they are on 
active duty. This bill would provide access to the military's TRICARE 
health care program for all members of the Selected Reserve and their 
families. They would pay a subsidized premium similar to the premium 
charged Federal Employees for health care. This will help to ensure 
that members of the National Guard and Reserves are medically ready 
when called to serve in the military.
  When a Soldier, Sailor, Airmen or Marine dies on active duty, his 
survivors currently receive a death gratuity of just over $12,000. This 
is simply not enough. This bill would raise the death gratuity to 
$100,000, and would allow survivors to receive Dependency and Indemnity 
Compensation from the VA as well as a Survivor Benefit Plan annuity 
from the Department of Defense.
  United States taxpayers have borne a disproportionate share of the 
cost for the reconstruction of Iraq. The support of the international 
community for this reconstruction is critical. This bill would require 
the President to report to Congress on U.S., Iraqi, and foreign 
contributions to Iraq's reconstruction before any new U.S. 
reconstruction funds are appropriated. The bill would also require any 
U.S. funds for reconstruction in Iraq be in the form of a 
collateralized loan which the U.S. would guarantee unless the President 
reports to Congress that it is in the U.S. national security interest 
to provide the funds other than in the form of a loan.
  I again want to compliment the service of the young men and women 
serving in our military forces for their magnificent and unselfish 
service to our Nation. I trust that the measures included in this bill 
will serve as a token of the Nation's sincere appreciation for their 
great sacrifices and service.

                                 S. 11

       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 ``Standing With Our Troops Act 
     of 2005''.

  DIVISION A--FULFILLMENT OF OBLIGATIONS TO THE MEMBERS OF THE ARMED 
                                 FORCES

     TITLE I--STRENGTHS OF THE ARMY AND MARINE CORPS ACTIVE FORCES

     SEC. 101. FINDINGS.

       Congress makes the following findings:
       (1) While the United States Armed Forces remain the premier 
     fighting force in the world, the Defense Science Board, in a 
     study carried out in the summer of 2004, found that ``When we 
     match the existing and projected force structure with the 
     current and projected need for stabilization forces we see an 
     enduring shortfall in both total numbers of people and their 
     ability to sustain the continuity of stabilization 
     efforts.''.
       (2) Between 1989 and 2004, the military personnel end 
     strength of the Army has been reduced by more than 34 
     percent, and the Department of the Army's civilian workforce 
     has been reduced by more than 45 percent, while the mission 
     rate of the Army has increased by 300 percent.
       (3) Because of the personnel reductions, the Army National 
     Guard and the Army Reserve are repeatedly being called to 
     active duty to meet Army mission requirements that the 
     active-duty force of the Army is no longer large enough to 
     meet alone. Army National Guard and Army Reserve units have 
     provided up to 40 percent of the military personnel engaged 
     in Operation Iraqi Freedom while they have also been 
     performing a dramatically increased role in homeland defense 
     and continuing to respond to natural disasters, other 
     domestic emergencies, and military contingencies. As a 
     result, the reserve components of the Army have been pushed 
     to the breaking point.

     SEC. 102. ARMY.

       (a) Strength for Fiscal Year 2006.--Effective on October 1, 
     2005, section 691(b)(1) of title 10, United States Code, is 
     amended by striking ``502,400'' and inserting ``522,400''.
       (b) Strength for Fiscal Years After Fiscal Year 2006.--
     Effective on October 1, 2006, section 691(b)(1) of such title 
     is amended by striking ``522,400'' and inserting ``532,400''.

     SEC. 103. MARINE CORPS.

       (a) Strength for Fiscal Year 2006.--Effective on October 1, 
     2005, section 691(b)(3) of title 10, United States Code, is 
     amended by striking ``178,000'' and inserting ``183,000''.
       (b) Strength for Fiscal Years After Fiscal Year 2006.--
     Effective on October 1, 2006, section 691(b)(3) of title 10, 
     United States Code, is amended by striking ``183,000'' and 
     inserting ``188,000''.

  TITLE II--FULL RECOGNITION OF SACRIFICE AND VALOR OF UNITED STATES 
                             SERVICEMEMBERS

                          Subtitle A--Findings

     SEC 201. FINDINGS.

       Congress makes the following findings:
       (1) On November 21, 2004, the Columbia Broadcasting System 
     television program 60 Minutes reported that the staff of that 
     program had received from the Department of Defense a letter 
     containing the assertion that ``[m]ore than 15,000 troops 
     with so-called `non-battle' injuries and diseases have been 
     evacuated from Iraq.''.
       (2) This report was a rare disclosure by the Department of 
     Defense, as it is the policy of the Department of Defense not 
     to disclose publicly the number of Armed Forces personnel 
     that sustain non-combat injuries.

 Subtitle B--Accounting for Casualties Incurred in the Prosecution of 
                      the Global War on Terrorism

     SEC. 211. MONTHLY ACCOUNTING.

       Not later than five days after the end of each month, the 
     Secretary of Defense shall publish, for such month for each 
     operation described in section 212, a full accounting of the 
     casualties among the members of the Armed Forces that were 
     incurred in such operation during that month.

     SEC. 212. OPERATIONS COVERED.

       The operations referred to in section 211 are as follows:
       (1) Operation Iraqi Freedom.
       (2) Operation Enduring Freedom.
       (3) Each other operation undertaken by the Armed Forces in 
     the prosecution of the Global War on Terrorism.

     SEC. 213. COMPREHENSIVE CONTENT OF ACCOUNTING.

       For the purpose of providing a full and complete accounting 
     of casualties covered by a report under section 211, the 
     Secretary of Defense shall include in the report the number 
     of casualties in each casualty status in accordance with 
     section 214.

     SEC. 214. CASUALTY STATUS.

       (a) Status Types.--In a report under this title, each 
     casualty among members of the Armed Forces shall be 
     characterized by the most specific casualty status applicable 
     to the member as follows:
       (1) Killed in action.
       (2) Killed in non-hostile duty.
       (3) Killed, self-inflicted.
       (4) Wounded in action, not returned to duty.
       (5) Wounded in action, returned to duty (to the extent that 
     data is available to support this characterization of 
     casualty status).
       (6) Evacuated for medical reasons.
       (b) Definitions.--In this section:
       (1) Killed in action.--The term ``killed in action'', with 
     respect to a member of the Armed Forces, means that the 
     member incurred one or more mortal wounds while involved in 
     an action against a hostile force, whether or not the wounds 
     are inflicted by the hostile force.

[[Page S149]]

       (2) Killed in non-hostile duty.--The term ``killed in non-
     hostile duty'', with respect to a member of the Armed Forces, 
     means that the member incurred one or more mortal wounds that 
     were not self-inflicted and not inflicted during an action 
     against a hostile force.
       (3) Killed, self-inflicted.--The term ``killed, self-
     inflicted'', with respect to a member of the Armed Forces, 
     means a suicide of the member or the death of the member as a 
     result of one or more self-inflicted injuries.
       (4) Wounded in action, not returned to duty.--The term 
     ``wounded in action, not returned to duty'', with respect to 
     a member of the Armed Forces, means that the member, while 
     involved in an action against a hostile force, incurred one 
     or more non-mortal injuries that required medical attention 
     and that prevented the member from returning to duty within 
     72 hours after incurring the injury or injuries.
       (5) Wounded in action, returned to duty.--The term 
     ``wounded in action, returned to duty'', with respect to a 
     member of the Armed Forces, means that the member, while 
     involved in an action against a hostile force, incurred one 
     or more non-mortal injuries that required medical attention 
     but did not prevent the member from returning to duty within 
     72 hours after incurring the injury or injuries.
       (6) Evacuated for medical reasons.--The term ``evacuated 
     for medical reasons'', with respect to a member of the Armed 
     Forces, means that the member was evacuated from a theater of 
     operations for medical reasons.

     SEC. 215. PUBLICATION AND RELEASE OF REPORT.

       The Secretary of Defense shall--
       (1) post the report under this title on the official 
     website of the Department of Defense; and
       (2) transmit a copy of the report to the chairmen and 
     ranking members of the Committees on Armed Services of the 
     Senate and the House of Representatives.

     SEC. 216. SENSE OF CONGRESS.

       It is the sense of Congress that the Secretary of Defense 
     has an obligation to ensure full and accurate reporting of 
     casualties among the members of the Armed Forces to Congress 
     and the people of the United States.

     Subtitle C--Advisory Panel on Military Awards and Decorations

     SEC. 221. ESTABLISHMENT.

       The Secretary of Defense shall establish within the 
     Department of Defense an Advisory Panel on Military Awards 
     and Decorations.

     SEC. 222. DUTIES.

       (a) Comprehensive Review of Military Decorations System.--
     The Advisory Panel shall conduct a comprehensive review of 
     the standards and processes used in the Armed Forces to award 
     medals and decorations to members of the Armed Forces. The 
     review shall include the following matters:
       (1) An examination and evaluation of the standards of each 
     of the Armed Forces for awarding each medal and decoration.
       (2) A comparison of the standards of each of the Armed 
     Forces with the standards of each of the other Armed Forces 
     for awarding comparable medals and decorations.
       (3) An examination and evaluation of the speed with which--
       (A) each of the Armed Forces identifies and considers 
     members for the awarding of medals and decorations; and
       (B) the medals and decorations are ultimately awarded.
       (4) A review of the medals and decorations awarded by the 
     Armed Forces during 2002, 2003, and 2004, together with a 
     review of the ranks of the recipients and the mission-related 
     and other circumstances that are associated with the awarding 
     of the medals and decorations to those recipients.
       (b) Report.--
       (1) Requirement for report.--Not later than 18 months after 
     the date of the enactment of this Act, the Advisory Panel 
     shall submit a report on the results of the review under this 
     section to the Secretary of Defense and to Congress.
       (2) Content.--The report under this subsection shall 
     contain the findings and conclusions of the Advisory Panel 
     together with any recommendations for action that the panel 
     considers appropriate, and shall include the following 
     matters:
       (A) A discussion of the merits of maintaining for each of 
     the Armed Forces separate policies for the awarding of 
     comparable medals and decorations of the Armed Forces, 
     together with a discussion of the merits of adopting uniform 
     standards for awarding such medals and decorations.
       (B) Measures that can be taken by each of the Armed Forces 
     to expedite the process for timely identifying a member who 
     deserves a medal of decoration, determining the 
     appropriateness of awarding the medal or decoration to the 
     member, and, in each appropriate case, awarding the medal or 
     decoration to the member.
       (C) Measures that can be taken to ensure that--
       (i) members serving in combat are at least equally as 
     likely to be considered for the awarding of medals and 
     decorations as are personnel not exposed to combat; and
       (ii) enlisted personnel are at least as likely to be 
     considered for the awarding of medals and decorations as are 
     officers.
       (D) A recommendation regarding whether the Valor device 
     awarded by each of the Armed Forces should be replaced by a 
     separate class of medals honoring special bravery in combat.
       (E) A determination of the desirability of adding a new 
     class of medals, similar to the Purple Heart, to be awarded 
     to military personnel who incur non-combat injuries in 
     connection with performance of an official mission or duty 
     during a combat operation in order to honor their sacrifice 
     in service to the people of the United States.
       (c) Scope Limited to Department of Defense.--The scope of 
     the review and report under this section does not include the 
     Coast Guard.

     SEC. 223. COMPOSITION AND ADMINISTRATION.

       (a) Composition.--
       (1) Number; appointment.--The Advisory Panel shall be 
     composed of not more than seven members appointed by the 
     Secretary of Defense.
       (2) General and flag officers.--The Secretary shall ensure 
     that the membership of the task force includes a retired 
     general or flag officer from each of the Army, Navy, Air 
     Force, and Marine Corps who is familiar with the policies of 
     the Armed Forces regarding military awards and decorations.
       (3) Veterans.--The Secretary shall appoint at least one 
     representative of a leading veterans' advocacy organization 
     as a member of the Advisory Panel.
       (b) Time for Appointment.--All members of the Advisory 
     Panel shall be appointed within 60 days after the date of the 
     enactment of this Act.
       (c) Chairperson.--The chairperson of the Advisory Panel 
     shall be selected from among the members of the Advisory 
     Panel by a majority vote of the members.
       (d) Compensation and Expenses of Members.--Each member of 
     the Advisory Panel shall serve without compensation, but 
     shall be allowed travel expenses, including per diem in lieu 
     of subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from the member's home or regular places of 
     business in the performance of services for the Advisory 
     Panel.
       (e) Federal Advisory Committee Act.--The Federal Advisory 
     Committee Act (5 U.S.C. App) shall not apply to the Advisory 
     Panel.

     SEC. 224. COOPERATION OF FEDERAL AGENCIES.

       (a) Information.--The Advisory Panel may obtain directly 
     from the Department of Defense, the Department of Veterans 
     Affairs, or any other department or agency of the United 
     States any information of such department or agency that the 
     panel considers necessary for the panel to carry out its 
     duties.
       (b) Other Cooperation.--The Secretary of Defense, the 
     Secretary of Veterans Affairs, and any other official of the 
     United States shall provide the Advisory Panel with full and 
     timely cooperation requested by the panel in carrying out its 
     duties under this section.

     SEC. 225. TERMINATION.

       The Advisory Panel on Military Awards and Decorations shall 
     terminate 30 days after the submission of the report to 
     Congress under section 222(b).

               TITLE III--MILITARY EQUIPMENT AND MATERIEL

     SEC. 301. FINDINGS.

       Congress makes the following findings:
       (1) United States military personnel serving in Operations 
     Iraqi Freedom have experienced significant shortages of 
     critical equipment, such as body armor, aircraft 
     survivability equipment, and armored trucks, including up-
     armored High Mobility Multipurpose Wheeled Vehicles. In many 
     cases the shortages have lasted several months. For example, 
     the individual body armor needed for protecting every member 
     of the Armed Forces and Department of Defense civilians in 
     Iraq was not produced and fielded until February 2004, 11 
     months after Operation Iraqi Freedom was launched. Shortages 
     of armor for Army trucks still existed as of the beginning of 
     2005.
       (2) Operation Iraqi Freedom and Operation Enduring Freedom 
     have taken a substantial toll on military equipment of the 
     Armed Forces. The commanding general of the Army Material 
     Command estimated in 2004 that the Army is wearing out its 
     equipment in Iraq and Afghanistan at a rate that could be up 
     to 10 times faster than the rate at which it wears out its 
     equipment elsewhere during peacetime, and there are no 
     significant reserve stocks of that equipment remaining.
       (3) It is a solemn obligation of the United States 
     Government to ensure that, whenever the Armed Forces are 
     called into battle, the military personnel fighting or 
     supporting the battle are provided with the safest, most 
     effective technology and equipment.

     SEC. 302. MOBILIZATION PLANNING AND PREPAREDNESS.

       (a) Director of Mobilization Planning and Preparedness.--
     Title I of the National Security Act of 1947 (50 U.S.C. 402 
     et seq.) is amended by striking section 107 and inserting the 
     following new sections:


          ``director of mobilization planning and preparedness

       ``Sec. 107. Definitions.--In this section:
       ``(1) The term `Director' means the Director of 
     Mobilization Planning and Preparedness referred to in 
     subsection (b)(1), except where the context clearly indicates 
     otherwise.
       ``(2) The term `national security emergency' means any 
     occurrence, including a

[[Page S150]]

     natural disaster, a military or terrorist attack against the 
     territory of the United States, a military operation carried 
     out by the Armed Forces abroad, a technological emergency, or 
     any other emergency, that either seriously degrades or 
     threatens the security of the United States or the Armed 
     Forces.
       ``(3) The term `mobilization' means the act of assembling 
     and organizing national resources, including military 
     personnel and equipment, labor, transportation systems, 
     industry, and financial resources, to support national 
     objectives of the United States in time of a national 
     security emergency.
       ``(4) The term `mobilization planning and preparedness' 
     means all aspects of planning and preparing for a 
     mobilization for a national security emergency, including the 
     identification of functions that would have to be performed 
     during a national security emergency, development of plans 
     for performing such functions, development of the capability 
     to execute such plans, and development of policies that 
     maximize the speed and efficiency with which such plans can 
     be executed during a national security emergency.
       ``(b) Position of Director.--
       ``(1) Establishment.--There is a Director of Mobilization 
     Planning and Preparedness on the staff of the National 
     Security Council.
       ``(2) Appointment.--The Director is appointed by the 
     Assistant to the President for National Security Affairs.
       ``(3) Relationship to national security advisor.--The 
     Director reports directly to the Assistant to the President 
     for National Security Affairs.
       ``(c) Duties.--
       ``(1) Principal duty.--The Director is the principal 
     adviser to the Assistant to the President for National 
     Security Affairs on matters of mobilization planning and 
     preparedness.
       ``(2) Specific duties.--The duties of the Director include 
     the following:
       ``(A) Identify which governmental and private sector 
     functions must be performed on a sustained basis during a 
     national security emergency.
       ``(B) Develop plans for the sustained performance of the 
     identified functions.
       ``(C) Provide guidance on the development of the capability 
     to execute the plans.
       ``(D) Recommend policies for the maximization of the speed 
     and efficiency with which the plans can be executed during a 
     national security emergency.
       ``(E) Recommend planning and policy guidance regarding 
     involvement of the National Guard in 2 or more national 
     security emergency operations concurrently.
       ``(F) Administer quarterly exercises simulating 
     mobilization for various types of national security 
     emergencies, including the following:
       ``(i) A major military operation carried out in and around 
     1 or more foreign countries.
       ``(ii) An occupation and reconstruction mission.
       ``(iii) A terrorist attack within the United States.
       ``(iv) A natural disaster within the United States.
       ``(v) A major humanitarian crisis in 1 or more foreign 
     countries.
       ``(vi) A minor military intervention in a foreign country.
       ``(3) Related duties.--
       ``(A) Mobilization planning and preparedness policy 
     coordinating committee.--The Director serves on the 
     Mobilization Planning and Preparedness Policy Coordinating 
     Committee as provided in section 107A.
       ``(B) Department of defense primary allocation of 
     industrial resources task force.--The Director serves as a 
     member of the Primary Allocation of Industrial Resources Task 
     Force of the Department of Defense.
       ``(d) Office of Mobilization Planning and Preparedness.--
       ``(1) Establishment.--There is an Office of Mobilization 
     Planning and Preparedness within the National Security 
     Council. The Director is the head of the office.
       ``(2) Composition.--The Office of Mobilization Planning and 
     Preparedness is composed of the following personnel:
       ``(A) Thirty employees appointed by the Assistant to the 
     President for National Security Affairs.
       ``(B) An employee of the Department of Defense, who shall 
     be detailed to the Office by the Under Secretary of Defense 
     for Acquisition, Technology, and Logistics to serve as 
     liaison between the Department of Defense and the Director to 
     ensure that comprehensive and accurate information on the 
     needs of the Armed Forces for equipment and materiel in a 
     national security emergency are timely communicated to the 
     Director.
       ``(e) Coordination With National Counterterrorism Center.--
       ``(1) Liaison officer.--The Director shall detail an 
     employee of the Office to the National Counterterrorism 
     Center to serve as a liaison officer between the Director of 
     Mobilization Planning and Preparedness and the Director of 
     the National Counterterrorism Center for collaboration on 
     counterterrorism-related information and issues necessary for 
     effective mobilization planning and preparedness.
       ``(2) Responsibility of director of national 
     counterterrorism center.--The Director of the National 
     Counterterrorism Center shall ensure that the liaison officer 
     is accorded such privileges at the Center as are necessary to 
     ensure that the collaboration between the Director of the 
     National Counterterrorism Center and the Director of 
     Mobilization Planning and Preparedness on counterterrorism-
     related information and issues is effective.
       ``(f) Annual Report.--
       ``(1) Requirement for report.--The President, acting 
     through the Director, shall submit to Congress each year a 
     report on mobilization planning and preparedness.
       ``(2) Content.--The annual report under this subsection 
     shall include the following information:
       ``(A) Funding needs for mobilization planning and 
     preparedness.
       ``(B) An assessment of the state of mobilization planning 
     and preparedness in the United States.
       ``(C) Any recommended policies on mobilization planning and 
     preparedness that the President, in consultation with the 
     Assistant to the President for National Security Affairs and 
     the Director, considers appropriate.


 ``mobilization planning and preparedness policy coordinating committee

       ``Sec. 107A. (a) Mobilization Planning and Preparedness 
     Defined.--In this section, the term `mobilization planning 
     and preparedness' has the meaning given that term in section 
     107(a).
       ``(b) Establishment.--There is in the executive branch an 
     interagency committee known as the `Mobilization Planning and 
     Preparedness Policy Coordinating Committee'.
       ``(c) Composition.--The Committee shall be composed of the 
     following members:
       ``(1) The Director of Mobilization Planning and 
     Preparedness of the National Security Council, who shall 
     chair the committee.
       ``(2) The Under Secretary for Emergency Preparedness and 
     Response of the Department of Homeland Security.
       ``(3) The Under Secretary of State for Economic, Business, 
     and Agricultural Affairs.
       ``(4) The Under Secretary of Defense for Acquisition, 
     Technology, and Logistics.
       ``(5) The Associate Attorney General.
       ``(6) The Assistant Secretary of the Interior for Land and 
     Minerals Management.
       ``(7) The Under Secretary of Commerce for Industry and 
     Security.
       ``(8) The Deputy Secretary of Labor.
       ``(9) The Assistant Secretary of Health and Human Services 
     for Public Health Emergency Preparedness.
       ``(10) The Under Secretary of Transportation for Policy.
       ``(11) The Under Secretary of Energy for Energy, Science, 
     and Environment.
       ``(12) One member designated by the Assistant to the 
     President for National Security Affairs.
       ``(13) One member designated by the Director of National 
     Intelligence.
       ``(d) Duties.--The Committee has the following duties:
       ``(1) To review, at least once each year, the mobilization 
     planning and preparedness policies of the United States.
       ``(2) To make any recommendations for action to improve 
     mobilization planning and preparedness that the Committee 
     determines appropriate.
       ``(3) To participate in the exercises conducted by the 
     Director of Mobilization Planning and Preparedness of the 
     Department under section 510(b)(2)(F).''.
       (b) Clerical Amendment.--The table of contents in the first 
     section of the National Security Act of 1947 is amended by 
     striking the item relating to section 107 and inserting the 
     following new items:

``Sec. 107. Director of Mobilization Planning and Preparedness.
``Sec. 107A. Mobilization Planning and Preparedness Policy Coordinating 
              Committee.''.

     SEC. 303. REPORT ON RECONSTITUTION NEEDS OF THE ARMED FORCES.

       (a) Report Required.--
       (1) Requirement for report.--Not later than March 1, 2005, 
     the Secretary of Defense shall submit to the congressional 
     defense committees a report on the needs of the Armed Forces 
     for reconstituting its stocks of military equipment and other 
     materiel in view of the attrition of military equipment and 
     other materiel experienced by the Armed Forces in Operation 
     Iraqi Freedom and Operation Enduring Freedom.
       (2) Consultation.--The Secretary shall consult with the 
     Chief of Staff of the Army, the Chief of Staff of the Air 
     Force, the Chief of Naval Operations, the Commandant of the 
     Marine Corps, and the Inspector General of each of the Armed 
     Forces in preparing the report under this section.
       (b) Content.--The report shall include an assessment of 
     each of the following matters:
       (1) The extent of the damage and destruction of military 
     equipment and other military materiel in Operation Iraqi 
     Freedom and Operation Enduring Freedom.
       (2) The amount of such equipment, if any, that has become 
     ineffective or obsolete by age or other causes.
       (3) The needs of each of the Armed Forces, including the 
     reserve components as well as the regular components, for 
     repair and replacement of equipment.
       (4) The total cost of reconstituting the stocks of military 
     equipment and other materiel of the Armed Forces to meet the 
     needs of the Armed Forces.
       (5) The time needed to reconstitute such stocks to meet 
     those needs.

[[Page S151]]

       (c) Form of Report.--The report shall be submitted in 
     unclassified form, but may include a classified annex.

     SEC. 304. AUTHORIZATIONS OF APPROPRIATIONS.

       (a) Army.--Funds are hereby authorized to be appropriated 
     for fiscal year 2005 for the use of the Army for the repair, 
     refurbishment, and replacement of equipment used by the Army 
     in Operation Iraqi Freedom or Operation Enduring Freedom, as 
     follows:
       (1) Operation and maintenance.--For expenses, not otherwise 
     provided for, for operation and maintenance, $6,000,000,000.
       (2) Procurement.--For procurement, $2,500,000,000.
       (b) Marine Corps.--Fund are hereby authorized to be 
     appropriated for fiscal year 2005 for the use of the Marine 
     Corps for the repair, refurbishment, and replacement of 
     equipment used by the Marine Corps in Operation Iraqi Freedom 
     or Operation Enduring Freedom, as follows:
       (1) Operation and maintenance.--For expenses, not otherwise 
     provided for, for operation and maintenance, $640,000,000.
       (2) Procurement.--For procurement, $1,500,000,000.
       (c) Availability Through Fiscal Year 2006.--Amounts 
     authorized to be appropriated under this section shall remain 
     available until September 30, 2006.
       (d) Limitation.--None of the funds appropriated pursuant to 
     an authorization of appropriations in this section may be 
     obligated or expended until the date that is 15 days after 
     the date on which the Secretary of Defense transmits to the 
     congressional defense committees a report on the specific use 
     for which the funds are to be obligated or expended, 
     respectively.

     SEC. 305. CONGRESSIONAL DEFENSE COMMITTEES DEFINED.

       In this title, the term ``congressional defense 
     committees'' has the meaning given such term in section 
     101(a)(16) of title 10, United States Code.

         TITLE IV--PERIODS OF OVERSEAS DEPLOYMENTS OF RESERVES

     SEC. 401. FINDINGS.

       Congress makes the following findings:
       (1) The Department of Defense failed to establish an 
     adequate troop deployment and rotation policy for Operation 
     Iraqi Freedom until several months after the operation had 
     begun. For several reserve component units involved in that 
     operation before 2005, the demobilization date was 
     rescheduled three or more times before the unit members were 
     finally allowed to return home.
       (2) Without an adequate deployment and rotation plan, the 
     Department of Defense has relied on a series of stop-gap 
     measures to retain a sufficient number of troops to carry out 
     the United States missions in Operation Iraqi Freedom and 
     Operation Enduring Freedom, including--
       (A) institution of a so-called ``stop-loss'' policy that 
     prevents personnel from leaving their units during 
     deployment;
       (B) extensions of deployments beyond scheduled 
     demobilization dates; and
       (C) activation of members of the Individual Ready Reserve.
       (3) In September 2004, the Government Accountability Office 
     reported that ``Many of DOD's policies that affect mobilized 
     reserve component personnel were implemented in a piecemeal 
     manner and were not linked within the context of a strategic 
     framework to meet the organizational goals. . . . Without a 
     strategic framework, OSD and the services made several 
     changes to their personnel policies to increase the 
     availability of the reserve components for the longer-term 
     requirements of the Global War on Terrorism, and 
     predictability declined for reserve component members.''.
       (4) Fairness to the men and women of the Armed Forces 
     deployed overseas requires that the Department of Defense--
       (A) have clear policies regarding lengths of deployment 
     periods; and
       (B) communicate these policies and other deployment-related 
     information to them and their families.

     SEC. 402. SENSE OF CONGRESS ON TWO-YEAR LIMIT ON 
                   MOBILIZATION.

       It is the sense of Congress that the Secretary of Defense 
     should continue the existing Department of Defense policy of 
     limiting to a total of 24 months the period for which members 
     of the reserve components serve on active duty to which 
     called or ordered in support of a contingency operation.

     SEC. 403. COMMUNICATION OF LENGTHS OF DEPLOYMENT PERIODS TO 
                   RESERVES IN OPERATION IRAQI FREEDOM.

       (a) Report of Department of Defense Policies.--
       (1) Requirement for report.--Not later than March 1, 2005, 
     the Secretary of Defense shall submit to the Committees on 
     Armed Services of the Senate and the House of Representatives 
     a report on--
       (A) Department of Defense policies governing the length of 
     mobilization and deployment periods applicable to members of 
     reserve components of the Armed Forces in connection with 
     Operation Iraqi Freedom, and on the communication between the 
     Department of Defense and reserve component personnel and 
     their families regarding the lengths of the mobilization 
     deployment periods; and
       (B) Department of Defense stop-loss policies.
       (2) Consultation requirement.--In preparing the report, the 
     Secretary shall consult with the Chairman and other members 
     of the Joint Chiefs of Staff and with such other officials as 
     the Secretary considers appropriate.
       (b) Content of Report.--The report under this section shall 
     contain a discussion of the matters described in subsection 
     (a)(1), including a discussion of the following matters:
       (1) The process by which the Department of Defense 
     determined its policy regarding the lengths of mobilization 
     deployment periods.
       (2) The reason that an adequate troop deployment policy was 
     not in place before Operation Iraqi Freedom began.
       (3) A comparison of the policies during Operation Iraqi 
     Freedom with Department of Defense policies that applied to 
     previous contingency operations.
       (4) The timeliness of the process for notifying reserve 
     component units for activation.
       (5) The process for communicating with activated reserve 
     component members and their families about demobilization 
     schedules.
       (6) The justification for delaying demobilization after 
     members and their families have been notified of the 
     anticipated demobilization schedule.
       (7) The justification for current stop-loss policies, 
     together with a statement of the period for which those 
     policies are to remain in effect and the conditions under 
     which management of personnel under those policies would 
     terminate.
       (8) The family support programs provided by the National 
     Guard and other reserve components for families of activated 
     Reserves.
       (9) An assessment of lessons learned about how the 
     increased operation tempos of the National Guard and other 
     reserve components can be expected to affect readiness, 
     recruitment and retention, civilian employers of Reserves, 
     and equipment and supply resources of the National Guard and 
     the other reserve components.
       (c) Matters for Particular Emphasis.--In the discussion of 
     the matters included in the report under this section, the 
     Secretary of Defense shall place particular emphasis on--
       (1) lessons learned, including deficiencies identified; and
       (2) near-term and long-term corrective actions to address 
     the identified deficiencies.
       (d) Form of Report.--The report under this section shall be 
     submitted in unclassified form, but may include a classified 
     annex.

                     TITLE V----TIMELY COMPENSATION

     SEC. 501. FINDINGS.

       Congress makes the following findings:
       (1) In November 2003, the General Accounting Office 
     reported, in connection with a study conducted by that 
     office, that among Army National Guard soldiers ``450 of the 
     481 soldiers from our 6 case study units had at least 1 pay 
     problem associated with their mobilization. These pay 
     problems severely constrain the Army's and the Department of 
     Defense's (DOD) ability to provide a most basic service to 
     these personnel, many of whom were risking their lives in 
     combat.''.
       (2) In August 2004, a second study by that office (by then 
     renamed the Government Accountability Office) found that 
     among Army Reserve soldiers ``332 of 348 soldiers (95 
     percent) we audited at 8 case study units that were 
     mobilized, deployed, and demobilized at some time during the 
     18-month period from August 2002 through January 2004 had at 
     least 1 pay problem.''.
       (3) The August 2004 report concluded that ``These pay 
     problems often had a profound adverse impact on individual 
     soldiers and their families. For example, soldiers were 
     required to spend considerable time, sometimes while deployed 
     in remote, hostile environments overseas, seeking help on pay 
     inquiries or in correcting errors in their active duty pays, 
     allowances, and related tax benefits.''.

     SEC. 502. CORRECTION OF MILITARY PAY PROBLEMS FOR ACTIVATED 
                   RESERVE COMPONENT PERSONNEL.

       The Secretary of the Army shall designate a senior level 
     official of the Department of the Army to implement--
       (1) the recommendations for executive action that are set 
     forth in the report of the Comptroller General of the United 
     States entitled ``Military Pay, Army National Guard Personnel 
     Mobilized to Active Duty Experienced Significant Pay 
     Problems'', dated November 2003; and
       (2) the recommendations for executive action that are set 
     forth in the report of the Comptroller General of the United 
     States entitled ``Military Pay, Army Reserve Soldiers 
     Mobilized to Active Duty Experienced Significant Pay 
     Problems'', dated August 2004.

     SEC. 503. SUPERVISION BY COMPTROLLER OF DEPARTMENT OF 
                   DEFENSE.

       The official designated under section 502 shall report 
     directly to, and be subject to the direction of, the Under 
     Secretary of Defense (Comptroller) regarding performance of 
     the duties that the official is designated to carry out under 
     such section.

     SEC. 504. TERMINATION OF REQUIREMENT.

       The designation under section 502 shall terminate upon the 
     submission of a certification of the Under Secretary of 
     Defense (Comptroller) to Congress that all recommendations 
     referred to in such section have been implemented.

  TITLE VI--IMPROVED REPRESENTATION OF RESERVE PERSONNEL INTERESTS IN 
                   DEPARTMENT OF DEFENSE SECRETARIAT

     SEC. 601. FINDINGS.

       Congress makes the following findings:

[[Page S152]]

       (1) Since September 11, 2001, the National Guard and the 
     other reserve components of the Armed Forces have experienced 
     an expansion of their role in the total force structure of 
     the Armed Forces to an unprecedented level. In 2004, the 
     reserve components comprised 40 percent of the total force of 
     the Armed Forces. Reservists are experiencing a dramatic 
     increase in operation tempo and average length of deployment.
       (2) While the extent of the role of the reserve component 
     has changed so dramatically, the Department of Defense 
     approach to management of the reserve components has remained 
     much the same. No new senior leadership positions have been 
     established to manage the reserve components more effectively 
     in the expanded role.

     SEC. 602. DEPUTY UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND 
                   READINESS (RESERVE AFFAIRS).

       (a) Establishment of Position.--
       (1) Position and duties.--Chapter 4 of title 10, United 
     States Code, is amended by inserting after section 136a the 
     following new section:

     ``Sec. 136b. Deputy Under Secretary of Defense for Personnel 
       and Readiness (Reserve Affairs)

       ``(a) There is a Deputy Under Secretary of Defense for 
     Personnel and Readiness (Reserve Affairs), appointed from 
     civilian life by the President, by and with the advice and 
     consent of the Senate.
       ``(b) The Deputy Under Secretary of Defense for Personnel 
     and Readiness (Reserve Affairs) shall have as his principal 
     duty the overall supervision of reserve component affairs of 
     the Department of Defense.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 136a the following new item:

``136b. Deputy Under Secretary of Defense for Personnel and Readiness 
              (Reserve Affairs).''.

       (b) Executive Level IV.--Section 5315 of title 5, United 
     States Code, is amended by inserting after ``Deputy Under 
     Secretary of Defense for Personnel and Readiness.'' the 
     following:
       ``Deputy Under Secretary of Defense for Personnel and 
     Readiness (Reserve Affairs).''.

     SEC. 603. ELIMINATION OF POSITION OF ASSISTANT SECRETARY OF 
                   DEFENSE FOR RESERVE AFFAIRS.

       (a) Repeal of Requirement for Position.--Subsection (b) of 
     section 138 of title 10, United States Code, is amended--
       (1) by striking paragraph (2); and
       (2) by redesignating paragraphs (3), (4), and (5), as 
     paragraphs (2), (3), and (4), respectively.
       (b) Reduction in Total Number of Assistant Secretaries of 
     Defense.--
       (1) Authorized number.--Subsection (a) of such section is 
     amended by striking ``nine'' and inserting ``eight''.
       (2) Conforming amendment.--Section 5315 of title 5, United 
     States Code, is amended by striking ``(9)'' after ``Assistant 
     Secretaries of Defense'' and inserting ``(8)''.
       (c) Effective Date.--The amendments made by subsections (a) 
     and (b) shall take effect on the date on which a person is 
     first appointed as Deputy Under Secretary of Defense for 
     Personnel and Readiness (Reserve Affairs).

                DIVISION B--MILITARY FAMILY PROTECTIONS

          TITLE XXI--GUARDSMEN AND RESERVISTS FINANCIAL RELIEF

     SEC. 2101. FINDINGS.

       Congress makes the following findings:
       (1) According to a Government Accountability Office report 
     in November 2004, ``The September 11, 2001, terrorist attacks 
     and the global war on terrorism have triggered the largest 
     activation of National Guard forces since World War II. As of 
     June 2004, over one-half of the National Guard's 457,000 
     personnel had been activated for overseas warfighting or 
     domestic homeland security missions in Federal and State 
     active duty roles.''. In all, over 400,000 reservists have 
     been mobilized between September 11, 2001, and the beginning 
     of 2005.
       (2) In March 2003, the General Accounting Office reported 
     that among members of the National Guard and other reserve 
     components of the Armed Forces ``. . . data for past military 
     operations show that 41 percent of drilling unit members 
     reported income loss . . .''. The report further noted that 
     senior officers in the reserve component reported average 
     losses of $5,000 in income upon activation.
       (3) Not only has operation tempo drastically increased for 
     members of the reserve components, meaning that reservists 
     are being called away from their civilian jobs more often, 
     but also the durations of deployments have increased 
     dramatically as well, meaning that reservists are being 
     called away from their civilian jobs for longer periods. The 
     Government Accountability Office reported in September 2004 
     that the average annual days of duty performed by members of 
     the reserve components has risen from approximately 40 days 
     in 1989 to approximately 120 days in 2003. A consequence of 
     both increased operations tempo and increased duration of 
     deployment has been a far greater loss of income for 
     reservists answering their country's call to duty.

     SEC. 2102. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR 
                   INDIVIDUALS CALLED TO ACTIVE DUTY FOR AT LEAST 
                   179 DAYS.

       (a) In General.--Paragraph (2) of section 72(t) of the 
     Internal Revenue Code of 1986 (relating to 10-percent 
     additional tax on early distributions from qualified 
     retirement plans) is amended by adding at the end the 
     following new subparagraph:
       ``(G) Distributions from retirement plans to individuals 
     called to active duty.--
       ``(i) In general.--Any qualified reservist distribution.
       ``(ii) Qualified reservist distribution.--For purposes of 
     this subparagraph, the term `qualified reservist 
     distribution' means any distribution to an individual if--

       ``(I) such distribution is from any qualified retirement 
     plan (as defined in section 4974(c)),
       ``(II) such individual was (by reason of being a member of 
     a reserve component (as defined in section 101 of title 37, 
     United States Code)), ordered or called to active duty for a 
     period in excess of 179 days or for an indefinite period, and
       ``(III) such distribution is made during the period 
     beginning on the date of such order or call and ending at the 
     close of the active duty period.

       ``(iii) Application of subparagraph.--This subparagraph 
     applies to individuals ordered or called to active duty after 
     September 11, 2001, and before September 12, 2005.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to distributions after September 11, 2001.

     SEC. 2103. INCOME TAX WITHHOLDING ON DIFFERENTIAL WAGE 
                   PAYMENTS.

       (a) In General.--Section 3401 of the Internal Revenue Code 
     of 1986 (relating to definitions) is amended by adding at the 
     end the following new subsection:
       ``(i) Differential Wage Payments to Active Duty Members of 
     the Uniformed Services.--
       ``(1) In general.--For purposes of subsection (a), any 
     differential wage payment shall be treated as a payment of 
     wages by the employer to the employee.
       ``(2) Differential wage payment.--For purposes of paragraph 
     (1), the term `differential wage payment' means any payment 
     which--
       ``(A) is made by an employer to an individual with respect 
     to any period during which the individual is performing 
     service in the uniformed services while on active duty for a 
     period of more than 30 days, and
       ``(B) represents all or a portion of the wages the 
     individual would have received from the employer if the 
     individual were performing service for the employer.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to remuneration paid after December 31, 2004.

     SEC. 2104. TREATMENT OF DIFFERENTIAL WAGE PAYMENTS FOR 
                   RETIREMENT PLAN PURPOSES.

       (a) Pension Plans.--
       (1) In general.--Section 414(u) of the Internal Revenue 
     Code of 1986 (relating to special rules relating to veterans' 
     reemployment rights under USERRA) is amended by adding at the 
     end the following new paragraph:
       ``(11) Treatment of differential wage payments.--
       ``(A) In general.--Except as provided in this paragraph, 
     for purposes of applying this title to a retirement plan to 
     which this subsection applies--
       ``(i) an individual receiving a differential wage payment 
     shall be treated as an employee of the employer making the 
     payment,
       ``(ii) the differential wage payment shall be treated as 
     compensation, and
       ``(iii) the plan shall not be treated as failing to meet 
     the requirements of any provision described in paragraph 
     (1)(C) by reason of any contribution which is based on the 
     differential wage payment.
       ``(B) Special rule for distributions.--
       ``(i) In general.--Notwithstanding subparagraph (A)(i), for 
     purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 
     403(b)(11)(A), or 457(d)(1)(A)(ii), an individual shall be 
     treated as having been severed from employment during any 
     period the individual is performing service in the uniformed 
     services described in section 3401(i)(2)(A).
       ``(ii) Limitation.--If an individual elects to receive a 
     distribution by reason of clause (i), the plan shall provide 
     that the individual may not make an elective deferral or 
     employee contribution during the 6-month period beginning on 
     the date of the distribution.
       ``(C) Nondiscrimination requirement.--Subparagraph (A)(iii) 
     shall apply only if all employees of an employer performing 
     service in the uniformed services described in section 
     3401(i)(2)(A) are entitled to receive differential wage 
     payments on reasonably equivalent terms and, if eligible to 
     participate in a retirement plan maintained by the employer, 
     to make contributions based on the payments. For purposes of 
     applying this subparagraph, the provisions of paragraphs (3), 
     (4), and (5), of section 410(b) shall apply.
       ``(D) Differential wage payment.--For purposes of this 
     paragraph, the term `differential wage payment' has the 
     meaning given such term by section 3401(i)(2).''.
       (2) Conforming amendment.--The heading for section 414(u) 
     of such Code is amended by inserting ``and to Differential 
     Wage Payments to Members on Active Duty'' after ``USERRA''.
       (b) Differential Wage Payments Treated as Compensation for 
     Individual Retirement Plans.--Section 219(f)(1) of the 
     Internal Revenue Code of 1986 (defining compensation) is 
     amended by adding at the end the

[[Page S153]]

     following new sentence: ``The term `compensation' includes 
     any differential wage payment (as defined in section 
     3401(i)(2)).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2004.
       (d) Provisions Relating to Plan Amendments.--
       (1) In general.--If this subsection applies to any plan or 
     annuity contract amendment--
       (A) such plan or contract shall be treated as being 
     operated in accordance with the terms of the plan or contract 
     during the period described in paragraph (2)(B)(i), and
       (B) except as provided by the Secretary of the Treasury, 
     such plan shall not fail to meet the requirements of the 
     Internal Revenue Code of 1986 or the Employee Retirement 
     Income Security Act of 1974 by reason of such amendment.
       (2) Amendments to which section applies.--
       (A) In general.--This subsection shall apply to any 
     amendment to any plan or annuity contract which is made--
       (i) pursuant to any amendment made by this section, and
       (ii) on or before the last day of the first plan year 
     beginning on or after January 1, 2007.
       (B) Conditions.--This subsection shall not apply to any 
     plan or annuity contract amendment unless--
       (i) during the period beginning on the date the amendment 
     described in subparagraph (A)(i) takes effect and ending on 
     the date described in subparagraph (A)(ii) (or, if earlier, 
     the date the plan or contract amendment is adopted), the plan 
     or contract is operated as if such plan or contract amendment 
     were in effect; and
       (ii) such plan or contract amendment applies retroactively 
     for such period.

     SEC. 2105. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT AND 
                   READY RESERVE-NATIONAL GUARD REPLACEMENT 
                   EMPLOYEE CREDIT.

       (a) Ready Reserve-National Guard Credit.--
       (1) In general.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business-related credits) is amended by inserting after 
     section 45I the following new section:

     ``SEC. 45J. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of an eligible taxpayer, the Ready Reserve-National 
     Guard employee credit determined under this section for any 
     taxable year with respect to each Ready Reserve-National 
     Guard employee of such taxpayer is an amount equal to 50 
     percent of the lesser of--
       ``(1) the actual compensation amount with respect to such 
     employee for such taxable year, or
       ``(2) $30,000.
       ``(b) Definition of Actual Compensation Amount.--For 
     purposes of this section, the term `actual compensation 
     amount' means the amount of compensation paid or incurred by 
     an eligible taxpayer with respect to a Ready Reserve-National 
     Guard employee on any day when the employee was absent from 
     employment for the purpose of performing qualified active 
     duty.
       ``(c) Limitations.--No credit shall be allowed with respect 
     to any day that a Ready Reserve-National Guard employee who 
     performs qualified active duty was not scheduled to work (for 
     reason other than to participate in qualified active duty).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Eligible taxpayer.--
       ``(A) In general.--The term `eligible taxpayer' means a 
     small business employer.
       ``(B) Small business employer.--
       ``(i) In general.--The term `small business employer' 
     means, with respect to any taxable year, any employer who 
     employed an average of 50 or fewer employees on business days 
     during such taxable year.
       ``(ii) Controlled groups.--For purposes of clause (i), all 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 shall be treated as a single 
     employer.
       ``(2) Qualified active duty.--The term `qualified active 
     duty' means--
       ``(A) active duty under an order or call for a period in 
     excess of 179 days or for an indefinite period, other than 
     the training duty specified in section 10147 of title 10, 
     United States Code (relating to training requirements for the 
     Ready Reserve), or section 502(a) of title 32, United States 
     Code (relating to required drills and field exercises for the 
     National Guard), in connection with which an employee is 
     entitled to reemployment rights and other benefits or to a 
     leave of absence from employment under chapter 43 of title 
     38, United States Code, and
       ``(B) hospitalization incident to such duty.
       ``(3) Compensation.--The term `compensation' means any 
     remuneration for employment, whether in cash or in kind, 
     which is paid or incurred by a taxpayer and which is 
     deductible from the taxpayer's gross income under section 
     162(a)(1).
       ``(4) Ready reserve-national guard employee.--The term 
     `Ready Reserve-National Guard employee' means an employee who 
     is a member of the Ready Reserve of a reserve component of an 
     Armed Force of the United States as described in sections 
     10142 and 10101 of title 10, United States Code.
       ``(5) Certain rules to apply.--Rules similar to the rules 
     of section 52 shall apply.
       ``(e) Termination.--This section shall not apply to any 
     amount paid or incurred after December 31, 2005.''.
       (2) Credit to be part of general business credit.--
     Subsection (b) of section 38 of the Internal Revenue Code of 
     1986 (relating to general business credit) is amended by 
     striking ``plus'' at the end of paragraph (18), by striking 
     the period at the end of paragraph (19) and inserting ``, 
     plus'', and by adding at the end the following:
       ``(20) the Ready Reserve-National Guard employee credit 
     determined under section 45J(a).''.
       (3) Denial of double benefit.--Section 280C(a) of the 
     Internal Revenue Code of 1986 (relating to rule for 
     employment credits) is amended by inserting ``45J(a),'' after 
     ``45A(a),''.
       (4) Conforming amendment.--The table of sections for 
     subpart D of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     the item relating to section 45I the following:

``Sec. 45J. Ready Reserve-National Guard employee credit.''.

       (5) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred after September 30, 
     2004, in taxable years ending after such date.
       (b) Ready Reserve-National Guard Replacement Employee 
     Credit.--
       (1) In general.--Paragraph (1) of section 51(d) of the 
     Internal Revenue Code of 1986 (relating to members of 
     targeted groups) is amended by striking ``or'' at the end of 
     subparagraph (G), by striking the period at the end of 
     subparagraph (H) and inserting ``, or'' and by adding at the 
     end the following new subparagraph:
       ``(I) a qualified replacement employee.''.
       (2) Qualified replacement employee.--Section 51(d) of the 
     Internal Revenue Code of 1986 is amended by redesignating 
     paragraphs (10), (11), and (12) as paragraphs (11), (12), and 
     (13), respectively, and by inserting after paragraph (9) the 
     following new paragraph:
       ``(10) Qualified replacement employee.--
       ``(A) In general.--The term `qualified replacement 
     employee' means an individual who is certified by the 
     designated local agency as being hired by an eligible 
     taxpayer to replace a Ready Reserve-National Guard employee 
     of such taxpayer, but only with respect to the period during 
     which such Ready Reserve-National Guard employee participates 
     in qualified active duty, including time spent in travel 
     status.
       ``(B) General definitions and special rules.--For purposes 
     of this paragraph--
       ``(i) Eligible taxpayer.--The term `eligible taxpayer' 
     means a small business employer.
       ``(ii) Small business employer.--

       ``(I) In general.--The term `small business employer' 
     means, with respect to any taxable year, any employer who 
     employed an average of 50 or fewer employees on business days 
     during such taxable year.
       ``(II) Controlled groups.--For purposes of subclause (I), 
     all persons treated as a single employer under subsection 
     (b), (c), (m), or (o) of section 414 shall be treated as a 
     single employer.

       ``(iii) Ready reserve-national guard employee.--The term 
     `Ready Reserve-National Guard employee' has the meaning given 
     such term by section 45J(d)(3).
       ``(iv) Qualified active duty.--The term `qualified active 
     duty' has the meaning given such term by section 45J(d)(1).
       ``(C) Disallowance for failure to comply with employment or 
     reemployment rights of members of the reserve components of 
     the armed forces of the united states.--No credit shall be 
     allowed under subsection (a) by reason of paragraph (1)(I) to 
     a taxpayer for--
       ``(i) any taxable year, beginning after the date of the 
     enactment of this section, in which the taxpayer is under a 
     final order, judgment, or other process issued or required by 
     a district court of the United States under section 4323 of 
     title 38 of the United States Code with respect to a 
     violation of chapter 43 of such title, and
       ``(ii) the 2 succeeding taxable years.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred to an individual who 
     begins work for the employer after September 30, 2004.
       (c) Study by GAO.--
       (1) In general.--The Comptroller General of the United 
     States shall study the following:
       (A) What, if any, problems exist in recruiting individuals 
     for a reserve component of an Armed Force of the United 
     States.
       (B) What, if any, problems exist as the result of providing 
     differential wage payments (as defined in section 3401(i)(2) 
     of the Internal Revenue Code of 1986 (as added by this Act)) 
     to individuals described in subparagraph (A) in the 
     recruitment and retention of individuals as regular members 
     of the Armed Forces of the United States.
       (C) Whether the credit allowed under section 45J of the 
     Internal Revenue Code of 1986 (as added by this section) is 
     an effective incentive for the hiring and retention of 
     employees who are individuals described in subparagraph (A) 
     and whether there exists any compliance problems in the 
     administration of such credit.
       (2) Report.--The Comptroller General of the United States 
     shall report on the results of the study required under 
     paragraph (1) to the Committee of Finance of the Senate and 
     the Committee on Ways and Means of the House of 
     Representatives before July 1, 2005.

[[Page S154]]

     SEC. 2106. NONREDUCTION IN PAY WHILE FEDERAL EMPLOYEE IS 
                   PERFORMING ACTIVE SERVICE IN THE UNIFORMED 
                   SERVICES OR NATIONAL GUARD.

       (a) Preservation of Pay Level.--
       (1) Requirements.--Subchapter IV of chapter 55 of title 5, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 5538. Nonreduction in pay while serving in the 
       uniformed services or National Guard

       ``(a) An employee who is absent from a position of 
     employment with the Federal Government in order to perform 
     active duty in the uniformed services pursuant to a call or 
     order to active duty under a provision of law referred to in 
     section 101(a)(13)(B) of title 10 shall be entitled, while 
     serving on active duty, to receive, for each pay period 
     described in subsection (b), an amount equal to the amount by 
     which--
       ``(1) the amount of basic pay which would otherwise have 
     been payable to such employee for such pay period if such 
     employee's civilian employment with the Government had not 
     been interrupted by that service, exceeds (if at all)
       ``(2) the amount of pay and allowances which (as determined 
     under subsection (d))--
       ``(A) is payable to such employee for that service; and
       ``(B) is allocable to such pay period.
       ``(b)(1) Amounts under this section shall be payable with 
     respect to each pay period (which would otherwise apply if 
     the employee's civilian employment had not been 
     interrupted)--
       ``(A) during which such employee is entitled to 
     reemployment rights under chapter 43 of title 38 with respect 
     to the position from which such employee is absent (as 
     referred to in subsection (a)); and
       ``(B) for which such employee does not otherwise receive 
     basic pay (including by taking any annual, military, or other 
     paid leave) to which such employee is entitled by virtue of 
     such employee's civilian employment with the Government.
       ``(2) For purposes of this section, the period during which 
     an employee is entitled to reemployment rights under chapter 
     43 of title 38--
       ``(A) shall be determined disregarding the provisions of 
     section 4312(d) of title 38; and
       ``(B) shall include any period of time specified in section 
     4312(e) of title 38 within which an employee may report or 
     apply for employment or reemployment following completion of 
     service on active duty to which called or ordered as 
     described in subsection (a).
       ``(c) Any amount payable under this section to an employee 
     shall be paid--
       ``(1) by such employee's employing agency;
       ``(2) from the appropriation or fund which would be used to 
     pay the employee if such employee were in a pay status; and
       ``(3) to the extent practicable, at the same time and in 
     the same manner as would basic pay if such employee's 
     civilian employment had not been interrupted.
       ``(d) The Office of Personnel Management shall, in 
     consultation with Secretary of Defense, prescribe any 
     regulations necessary to carry out the preceding provisions 
     of this section.
       ``(e)(1) The head of each agency referred to in section 
     2302(a)(2)(C)(ii) shall, in consultation with the Office, 
     prescribe procedures to ensure that the rights under this 
     section apply to the employees of such agency.
       ``(2) The Administrator of the Federal Aviation 
     Administration shall, in consultation with the Office, 
     prescribe procedures to ensure that the rights under this 
     section apply to the employees of that agency.
       ``(f) For purposes of this section--
       ``(1) the terms `employee', `Federal Government', and 
     `uniformed services' have the same respective meanings as 
     given them in section 4303 of title 38;
       ``(2) the term `employing agency', as used with respect to 
     an employee entitled to any payments under this section, 
     means the agency or other entity of the Government (including 
     an agency referred to in section 2302(a)(2)(C)(ii)) with 
     respect to which such employee has reemployment rights under 
     chapter 43 of title 38; and
       ``(3) the term `basic pay' includes any amount payable 
     under section 5304.''.
       (2) Clerical amendment.--The table of sections for chapter 
     55 of title 5, United States Code, is amended by inserting 
     after the item relating to section 5537 the following:

``5538. Nonreduction in pay while serving in the uniformed services or 
              National Guard.''.

       (b) Effective Date.--
       (1) In general.--Section 5538 of title 5, United States 
     Code (as added by subsection (a)), shall apply with respect 
     to pay periods (as described in subsection (b) of such 
     section) beginning on or after the date of the enactment of 
     this Act.
       (2) Conditional retroactive application.--
       (A) Section 5538 of title 5, United States Code (as added 
     by subsection (a)), shall apply with respect to pay periods 
     (as described in subsection (b) of such section) beginning on 
     or after October 11, 2002 through the date of the enactment 
     of this Act, subject to the availability of appropriations.
       (B) There are authorized to be appropriated $100,000,000 
     for purposes of subparagraph (A).

  TITLE XXII--NATIONAL GUARD AND RESERVE COMPREHENSIVE HEALTH BENEFITS

     SEC. 2201. SHORT TITLE.

       This title may be cited as the ``National Guard and Reserve 
     Comprehensive Health Benefits Act of 2005''.

     SEC. 2202. FINDINGS.

       Congress makes the following findings:
       (1) According to the results of a Department of Defense 
     survey conducted in 2000, 20 percent of members of the 
     reserve components of the Armed Forces, including 40 percent 
     of junior enlisted personnel, had no health care coverage 
     while not on active duty.
       (2) In 2004, Congress passed legislation authorizing 
     reservists to obtain access to the military TRICARE health 
     care program for one year for each 90-day period of active 
     duty service. While the enactment of this law was an 
     important step forward, the law only provides eligibility for 
     health care after active duty has been completed and fails to 
     provide the complete health care coverage necessary to ensure 
     that reservists are medically ready to answer a future call 
     to active duty.
       (3) In September 2004, the Government Accountability 
     Office, after reviewing pre-deployment health screenings of 
     over 240,000 reservists, reported finding that nearly 7 
     percent of activated reservists were categorized as 
     nondeployable for health reasons, including nearly 10 percent 
     of the Army Reserve.

     SEC. 2203. TRICARE COVERAGE FOR MEMBERS OF THE READY RESERVE.

       (a) Eligibility.--Section 1076b of title 10, United States 
     Code, is amended to read as follows:

     ``Sec. 1076b. TRICARE program: coverage for members of the 
       Ready Reserve

       ``(a) Eligibility.--Members of the Selected Reserve of the 
     Ready Reserve of a reserve component of the armed forces and 
     members of the Individual Ready Reserve described in 
     subsection 10144(b) of this title are eligible, subject to 
     subsection (h)(1), to enroll in the following TRICARE program 
     options:
       ``(1) TRICARE Prime.
       ``(2) TRICARE Standard.
       ``(b) Types of Coverage.--(1) A member eligible under 
     subsection (a) may enroll for either of the following types 
     of coverage:
       ``(A) Self alone coverage.
       ``(B) Self and family coverage.
       ``(2) An enrollment by a member for self and family covers 
     the member and the dependents of the member who are described 
     in subparagraph (A), (D), or (I) of section 1072(2) of this 
     title.
       ``(c) Open Enrollment Periods.--The Secretary of Defense 
     shall provide for at least one open enrollment period each 
     year. During an open enrollment period, a member eligible 
     under subsection (a) may enroll in the TRICARE program or 
     change or terminate an enrollment in the TRICARE program.
       ``(d) Scope of Care.--(1) A member and the dependents of a 
     member enrolled in the TRICARE program under this section 
     shall be entitled to the same benefits under this chapter as 
     a member of the uniformed services on active duty or a 
     dependent of such a member, respectively.
       ``(2) Section 1074(c) of this title shall apply with 
     respect to a member enrolled in the TRICARE program under 
     this section.
       ``(e) Premiums.--(1) The Secretary of Defense shall charge 
     premiums for coverage pursuant to enrollments under this 
     section. The Secretary shall prescribe for each of the 
     TRICARE program options referred to in subsection (a) a 
     premium for self alone coverage and a premium for self and 
     family coverage.
       ``(2) The monthly amount of the premium in effect for a 
     month for a type of coverage under this section shall be the 
     amount equal to 28 percent of the total amount determined by 
     the Secretary on an appropriate actuarial basis as being 
     reasonable for the coverage.
       ``(3) The premiums payable by a member under this 
     subsection may be deducted and withheld from basic pay 
     payable to the member under section 204 of title 37 or from 
     compensation payable to the member under section 206 of such 
     title. The Secretary shall prescribe the requirements and 
     procedures applicable to the payment of premiums by members 
     not entitled to such basic pay or compensation.
       ``(4) Amounts collected as premiums under this subsection 
     shall be credited to the appropriation available for the 
     Defense Health Program Account under section 1100 of this 
     title, shall be merged with sums in such Account that are 
     available for the fiscal year in which collected, and shall 
     be available under subsection (b) of such section for such 
     fiscal year.
       ``(f) Other Charges.--A person who receives health care 
     pursuant to an enrollment in a TRICARE program option under 
     this section, including a member who receives such health 
     care, shall be subject to the same deductibles, copayments, 
     and other nonpremium charges for health care as apply under 
     this chapter for health care provided under the same TRICARE 
     program option to dependents described in subparagraph (A), 
     (D), or (I) of section 1072(2) of this title.
       ``(g) Termination of Enrollment.--(1) A member enrolled in 
     the TRICARE program under this section may terminate the 
     enrollment only during an open enrollment period provided 
     under subsection (c), except as provided in subsection 
     (h)(2).
       ``(2) An enrollment of a member for self alone or for self 
     and family under this section shall terminate on the first 
     day of the first month beginning after the date on which the 
     member ceases to be eligible under subsection (a).
       ``(3) The enrollment of a member under this section may be 
     terminated on the basis of failure to pay the premium charged 
     the member under this section.

[[Page S155]]

       ``(h) Relationship to Transition TRICARE Coverage Upon 
     Separation From Active Duty.--(1) A member may not enroll in 
     the TRICARE program under this section while entitled to 
     transitional health care under subsection (a) of section 1145 
     of this title or while authorized to receive health care 
     under subsection (c) of such section.
       ``(2) A member who enrolls in the TRICARE program under 
     this section within 90 days after the date of the termination 
     of the member's entitlement or eligibility to receive health 
     care under subsection (a) or (c) of section 1145 of this 
     title may terminate the enrollment at any time within one 
     year after the date of the enrollment.
       ``(i) Regulations.--The Secretary of Defense, in 
     consultation with the other administering Secretaries, shall 
     prescribe regulations for the administration of this 
     section.''.
       (b) Definitions.--
       (1) Tricare options.--Section 1072 of title 10, United 
     States Code, is amended by adding at the end the following 
     new paragraphs:
       ``(10) The term `TRICARE Prime' means the managed care 
     option of the TRICARE program.
       ``(11) The term `TRICARE Standard' means the Civilian 
     Health and Medical Program of the Uniformed Services option 
     under the TRICARE program.''.
       (2) Conforming amendments.--
       (A) Section 1076d(f) of such title is amended--
       (i) by striking ``(f) Definitions.--'' and all that follows 
     through ``(1) The'' and inserting ``(f) Immediate Family 
     Defined.--In this section, the''; and
       (ii) by striking paragraph (2).
       (B) Section 1097a(f) of such title is amended by striking 
     ``Definitions.--In this section:'' and all that follows 
     through ``(2) The term'' and inserting ``Catchment Area 
     Defined.--In this section, the term''.
       (c) Period for Implementation.--Section 1076b of title 10, 
     United States Code (as added by subsection (a)), shall apply 
     with respect to months that begin on or after the date that 
     is 180 days after the date of the enactment of this Act.
       (d) Coordination With Overlapping Authority.--
       (1) Repeal.--Effective one year after the date of the 
     enactment of this Act--
       (A) section 1076d of title 10, United States Code, is 
     repealed; and
       (B) the table of sections at the beginning of chapter 55 of 
     such title is amended by striking the item relating to 
     section 1076d.
       (2) Transition coverage.--The Secretary of Defense shall 
     provide for an orderly transition to TRICARE coverage under 
     section 1076b of title 10, United States Code (as amended by 
     subsection (a)), for persons enrolled for TRICARE coverage 
     under section 1076d of such title before the repeal of such 
     section takes effect under paragraph (1)(A).

     SEC. 2204. ALLOWANCE FOR CONTINUATION OF NON-TRICARE HEALTH 
                   BENEFITS COVERAGE FOR CERTAIN MOBILIZED 
                   RESERVES.

       (a) Payment of Premiums.--
       (1) Requirement to pay premiums.--Chapter 55 of title 10, 
     United States Code, is amended by inserting after section 
     1078a the following new section:

     ``Sec. 1078b. Continuation of non-TRICARE health benefits 
       plan coverage for certain Reserves called or ordered to 
       active duty and their dependents

       ``(a) Payment of Premiums.--The Secretary concerned shall 
     pay the applicable premium to continue in force any qualified 
     health benefits plan coverage for an eligible reserve 
     component member for the benefits coverage continuation 
     period if timely elected by the member in accordance with 
     regulations prescribed under subsection (j).
       ``(b) Eligible Member.--A member of a reserve component is 
     eligible for payment of the applicable premium for 
     continuation of qualified health benefits plan coverage under 
     subsection (a) while serving on active duty pursuant to a 
     call or order issued under a provision of law referred to in 
     section 101(a)(13)(B) of this title during a war or national 
     emergency declared by the President or Congress.
       ``(c) Qualified Health Benefits Plan Coverage.--For the 
     purposes of this section, health benefits plan coverage for a 
     member called or ordered to active duty is qualified health 
     benefits plan coverage if--
       ``(1) the coverage was in force on the date on which the 
     Secretary notified the member that issuance of the call or 
     order was pending or, if no such notification was provided, 
     the date of the call or order;
       ``(2) on such date, the coverage applied to the member and 
     dependents of the member described in subparagraph (A), (D), 
     or (I) of section 1072(2) of this title; and
       ``(3) the coverage has not lapsed.
       ``(d) Applicable Premium.--The applicable premium payable 
     under this section for continuation of health benefits plan 
     coverage in the case of a member is the amount of the premium 
     payable by the member for the coverage of the member and 
     dependents.
       ``(e) Maximum Amount.--The total amount that may be paid 
     for the applicable premium of a health benefits plan for a 
     member under this section in a fiscal year may not exceed the 
     amount determined by multiplying--
       ``(1) the sum of one plus the number of the member's 
     dependents covered by the health benefits plan, by
       ``(2) the per capita cost of providing TRICARE coverage and 
     benefits for dependents under this chapter for such fiscal 
     year, as determined by the Secretary of Defense.
       ``(f) Benefits Coverage Continuation Period.--The benefits 
     coverage continuation period under this section for qualified 
     health benefits plan coverage in the case of a member called 
     or ordered to active duty is the period that--
       ``(1) begins on the date of the call or order; and
       ``(2) ends on the earlier of the date on which--
       ``(A) the member's eligibility for transitional health care 
     under section 1145(a) of this title terminates under 
     paragraph (3) of such section; or
       ``(B) the member elects to terminate the continued 
     qualified health benefits plan coverage of the dependents of 
     the member.
       ``(g) Extension of Period of COBRA Coverage.--
     Notwithstanding any other provision of law--
       ``(1) any period of coverage under a COBRA continuation 
     provision (as defined in section 9832(d)(1) of the Internal 
     Revenue Code of 1986) for a member under this section shall 
     be deemed to be equal to the benefits coverage continuation 
     period for such member under this section; and
       ``(2) with respect to the election of any period of 
     coverage under a COBRA continuation provision (as so 
     defined), rules similar to the rules under section 
     4980B(f)(5)(C) of such Code shall apply.
       ``(h) Nonduplication of Benefits.--A dependent of a member 
     who is eligible for benefits under qualified health benefits 
     plan coverage paid on behalf of a member by the Secretary 
     concerned under this section is not eligible for benefits 
     under the TRICARE program during a period of the coverage for 
     which so paid.
       ``(i) Revocability of Election.--A member who makes an 
     election under subsection (a) may revoke the election. Upon 
     such a revocation, the member's dependents shall become 
     eligible for benefits under the TRICARE program as provided 
     for under this chapter.
       ``(j) Regulations.--The Secretary of Defense shall 
     prescribe regulations for carrying out this section. The 
     regulations shall include such requirements for making an 
     election of payment of applicable premiums as the Secretary 
     considers appropriate.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 1078a the following new item:

``1078b. Continuation of non-TRICARE health benefits plan coverage for 
              certain Reserves called or ordered to active duty and 
              their dependents.''.

       (b) Applicability.--Section 1078b of title 10, United 
     States Code (as added by subsection (a)), shall apply with 
     respect to calls or orders of members of reserve components 
     of the Armed Forces to active duty as described in subsection 
     (b) of such section, that are issued by the Secretary of a 
     military department on or after the date of the enactment of 
     this Act.

    TITLE XXIII--IMPROVED DEATH GRATUITY AND OTHER SURVIVOR BENEFITS

     SEC. 2301. FINDINGS.

       Congress makes the following findings:
       (1) No amount of money can make up for the loss of a loved 
     one. But the United States can, and is obliged to, honor the 
     service of lost servicemembers by ensuring that their 
     families are financially supported at the time of great need 
     occasioned by those losses.
       (2) The Federal Government owes families of servicemembers 
     dying on duty a death gratuity that is sufficient to help 
     each family pay for costs associated with the death of the 
     servicemember and to help the members of the family adjust to 
     the financial instability that results from termination of 
     the servicemember's income.
       (3) Survivors of fallen military personnel who are eligible 
     for both a Survivor Benefit Plan annuity and Dependency and 
     Indemnity Compensation suffer a loss of income as a result of 
     the law that requires a reduction in the Survivor Benefit 
     Plan annuity by the amount of the Dependency and Indemnity 
     Compensation. This unjust prohibition against concurrent 
     receipt of two independent benefits prevents the United 
     States from fulfilling its obligation to the survivors during 
     the time of financial need that is occasioned by the deaths 
     of the fallen servicemembers.

     SEC. 2302. INCREASED AMOUNT OF DEATH GRATUITY.

       (a) Amount of Death Gratuity.--Section 1478(a) of title 10, 
     United States Code, is amended by striking ``$12,000'' in the 
     first sentence and inserting ``$100,000''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as of September 11, 2001, and shall apply 
     with respect to deaths occurring on or after that date.

     SEC. 2303. DEATH GRATUITY EXCLUDABLE FROM FEDERAL INCOME 
                   TAXATION.

       (a) In General.--Paragraph (1) of section 134(b) of the 
     Internal Revenue Code of 1986 (relating to certain military 
     benefits) is amended by adding at the end the following new 
     flush sentence:
     ``Such term shall include any death gratuity to which the 
     limitation in section 1478(a) of title 10, United States 
     Code, applies.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to amounts paid with respect to deaths occurring 
     on or after September 11, 2001.

[[Page S156]]

     SEC. 2304. REPEAL OF REQUIREMENT OF REDUCTION OF SBP SURVIVOR 
                   ANNUITIES BY DEPENDENCY AND INDEMNITY 
                   COMPENSATION.

       (a) Repeal.--Subchapter II of chapter 73 of title 10, 
     United States Code is amended--
       (1) in section 1450(c)(1), by inserting after ``to whom 
     section 1448 of this title applies'' the following: ``(except 
     in the case of a death as described in subsection (d) or (f) 
     of such section)''; and
       (2) in section 1451(c)--
       (A) by striking paragraph (2); and
       (B) by redesignating paragraphs (3) and (4) as paragraphs 
     (2) and (3), respectively.
       (b) Prohibition on Retroactive Benefits.--No benefits may 
     be paid to any person for any period before the effective 
     date provided under subsection (e) by reason of the 
     amendments made by subsection (a).
       (c) Prohibition on Recoupment of Certain Amounts Previously 
     Refunded to SBP Recipients.--A surviving spouse who is or has 
     been in receipt of an annuity under the Survivor Benefit Plan 
     under subchapter II of chapter 73 of title 10, United States 
     Code, that is in effect before the effective date provided 
     under subsection (e) and that is adjusted by reason of the 
     amendments made by subsection (a) and who has received a 
     refund of retired pay under section 1450(e) of title 10, 
     United States Code, shall not be required to repay such 
     refund to the United States.
       (d) Reconsideration of Optional Annuity.--Section 
     1448(d)(2) of title 10, United States Code, is amended by 
     adding at the end the following new sentences: ``The 
     surviving spouse, however, may elect to terminate an annuity 
     under this subparagraph in accordance with regulations 
     prescribed by the Secretary concerned. Upon such an election, 
     payment of an annuity to dependent children under this 
     subparagraph shall terminate effective on the first day of 
     the first month that begins after the date on which the 
     Secretary concerned receives notice of the election, and, 
     beginning on that day, an annuity shall be paid to the 
     surviving spouse under paragraph (1) instead.''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on the later of--
       (1) the first day of the first month that begins after the 
     date of the enactment of this Act; or
       (2) the first day of the fiscal year that begins in the 
     calendar year in which this Act is enacted.

     SEC. 2305. EFFECTIVE DATE FOR PAID-UP COVERAGE UNDER SURVIVOR 
                   BENEFIT PLAN.

       Section 1452(j) of title 10, United States Code, is amended 
     by striking ``October 1, 2008'' and inserting ``October 1, 
     2005''.

                    DIVISION C--TAXPAYER PROTECTION

             TITLE XXXI--FUNDING OF RECONSTRUCTION IN IRAQ

     SEC. 3101. FINDINGS.

       Congress makes the following findings:
       (1) The international community's support for Iraq's 
     efforts to reconstruct the infrastructure of Iraq following 
     the overthrow of Saddam Hussein's regime is critical to the 
     achievement of regional and international stability and to 
     the protection of national security interests of the United 
     States.
       (2) United States taxpayers have borne a disproportionate 
     burden in supporting the reconstruction of Iraq. The United 
     States Government has committed to providing Iraq with grants 
     of financial assistance worth more than 500 percent more than 
     the grant assistance that has been committed by the 
     governments of all of the rest of the countries of the world 
     combined.
       (3) The disproportionate contribution of the United States 
     to the reconstruction of Iraq has resulted in a commitment of 
     United States resources to reconstruction that otherwise 
     would be available for supporting the efforts of United 
     States military personnel to rid Iraq and Afghanistan of 
     hostile insurgents.
       (4) Iraq possesses the world's second largest reserve of 
     crude oil, with 112,000,000,000 barrels, and administration 
     officials have stated on several occasions that revenue from 
     Iraq's oil industry could fund a significant portion of the 
     costs of the reconstruction of Iraq.

     SEC. 3102. REPORT ON ADDITIONAL NEEDS FOR FUNDING MILITARY 
                   AND RECONSTRUCTION EFFORTS.

       (a) Requirement for Report.--Whenever the President submits 
     to Congress a request for a supplemental appropriation of 
     funds for use in connection with United States military or 
     reconstruction efforts in Iraq, the President shall submit to 
     the chairmen and ranking members of the appropriate 
     committees of Congress in accordance with this section a 
     report on the status of United States financial commitments 
     to the reconstruction of Iraq.
       (b) Content.--The report under subsection (a) shall include 
     the following information:
       (1) An estimate of the amount of the United States 
     Government funds spent for the reconstruction of Iraq between 
     March 19, 2003, and the date of the report that is 
     attributable to tax revenue collected from United States 
     taxpayers.
       (2) An assessment of the activities funded by that amount, 
     together with a discussion of the results that such 
     activities have achieved.
       (3) An estimate of the amount of the funds that have been 
     contributed by all other foreign governments for the 
     reconstruction of Iraq and in relief of Iraq's national debt.
       (4) The amount of the crude oil that has been extracted by 
     Iraq since March 19, 2003, and the total value of that oil in 
     United States dollars.
       (c) Time for Report.--The President shall submit the report 
     under this section not later than 24 hours after any proposed 
     legislation to provide a supplemental appropriation of funds 
     requested by the President for use in connection with United 
     States military or reconstruction activities in Iraq is 
     introduced in either the Senate or the House of 
     Representatives.
       (d) Form.--The report under this section shall be submitted 
     in unclassified form.

     SEC. 3103. LIMITATION ON USE OF FUNDS.

       (a) Limitation.--Funds appropriated or otherwise available 
     for providing financial assistance for reconstruction 
     activities in Iraq may not be obligated or expended for 
     providing financial assistance for such activities other than 
     in the form of a collateralized loan until the President 
     submits to the chairmen and ranking members of the 
     appropriate committees of Congress a report that contains the 
     following matters:
       (1) The President's plan for seeking increased financial 
     support for reconstruction activities in Iraq from the 
     international community.
       (2) The President's statement that he has determined that--
       (A) Iraq is incapable of producing sufficient revenues from 
     its oil industry to pay for future reconstruction activities; 
     and
       (B) it is not in the national security interests of the 
     United States for the United States to provide financial 
     assistance for reconstruction activities in Iraq solely in 
     the form of loans.
       (b) Waiver Authority.--The President may waive the 
     applicability of the limitation in subsection (a) to an 
     obligation or expenditure of funds if the President 
     determines that the applicability of the limitation to such 
     obligation or expenditure would adversely affect the physical 
     safety of United States Armed Forces personnel operating in 
     Iraq, except that any such waiver shall not take effect 
     before the President submits a written notification of the 
     waiver and determination to the chairmen and ranking members 
     of the appropriate committees of Congress.

     SEC. 3104. APPROPRIATE COMMITTEES OF CONGRESS DEFINED.

       In this title, the term ``appropriate committees of 
     Congress'' mean the following committees:
       (1) The Committee on Foreign Relations Committee, the 
     Committee on Armed Services, and the Committee on 
     Appropriations of the Senate.
       (2) The Committee on International Relations, the Committee 
     on Armed Services, and the Committee on Appropriations of the 
     House of Representatives.
                                 ______
                                 
      By Mr. BIDEN (for himself, Mr. Reid, Mr. Bingaman, Ms. Mikulski, 
        Mr. Durbin, Ms. Stabenow, Mr. Rockefeller, Mr. Lautenberg, and 
        Mr. Schumer):
  S. 12. A bill to combat international terrorism, and for other 
purposes; to the Committee on Foreign Relations.
  Mr. BIDEN. Mr. President, I am pleased to join the Democratic Leader 
in introducing S. 12, a bill to combat international terrorism.
  We all know that the primary security threat facing America is from 
terrorists motivated by a radical Islamic fundamentalism. Since the 9/
11 attacks, we have done much to confront this threat, but we must do 
much more. As the 9/11 Commission reported, we are safer, but we are 
not yet safe. I know that all Senators are committed to the objective 
of making our country safer.
  We must understand that those who would spread radical Islamic 
fundamentalism and weapons of mass destruction are beyond the reach of 
reason. We must--and we will--defeat them. But hundreds of millions of 
hearts and minds around the world are open to American ideas and 
ideals. We must reach them.
  This bill contains a range of proposals that are designed to 
strengthen our anti-terrorism efforts in a broad range of areas. It 
will strengthen our military by expanding our special forces. It will 
strengthen our intelligence operations by increasing the cadre of the 
trained linguists in the government. It will strengthen our public 
diplomacy by increasing funds for State Department programs, 
international exchanges, and international broadcasting. It will 
strengthen our effort to expand basic educational opportunities in the 
Muslim world and combat radical madrassas. It will strengthen our 
assistance to non-governmental organizations working to build 
democratic institutions. It will strengthen our programs to help Russia 
account for, secure and destroy dangerous nuclear materials. And it 
will strengthen our law enforcement by increasing support for cops on 
the beat--the people

[[Page S157]]

who labor on the front lines of homeland security.
  I cannot take credit for every proposal in this bill. Many of them 
are ideas contributed by my Democratic colleagues. The Democratic 
Leader has graciously allowed me to be the lead sponsor of the bill, 
for which I am grateful. I look forward to working with all my 
colleagues to strengthen America's defenses against the threat of 
terrorism--through this and other legislation--in the coming Congress.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 12

       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 ``Targeting Terrorists More 
     Effectively Act of 2005''.
               TITLE I--EFFECTIVELY TARGETING TERRORISTS

     SEC. 101. INCREASED STRENGTH OF ARMY SPECIAL OPERATIONS 
                   FORCES.

       (a) Sense of Congress.--It is the sense of Congress that 
     the number of the active-duty Army personnel comprising the 
     Army Special Forces Command as of the last day of a fiscal 
     year should be increased as follows:
       (1) To 4,644, as of September 30, 2006.
       (2) To 5,144, as of September 30, 2007.
       (3) To 5,644, as of September 30, 2008.
       (4) To 6,144, as of September 30, 2009.
       (b) Increased Active Forces End Strengths To Effectuate 
     Policy on Increase in Strength of Army Special Forces.--
       (1) Fiscal year 2006.--Effective on October 1, 2005, 
     section 691(b)(1) of title 10, United States Code, is amended 
     by striking ``502,400'' and inserting ``502,900''.
       (2) Fiscal year 2007.--Effective on October 1, 2006, 
     section 691(b)(1) of such title is amended by striking 
     ``502,900'' and inserting ``503,400''.
       (3) Fiscal year 2008.--Effective on October 1, 2007, 
     section 691(b)(1) of such title is amended by striking 
     ``503,400'' and inserting ``503,900''.
       (4) Fiscal year 2009.--Effective on October 1, 2008, 
     section 691(b)(1) of such title is amended by striking 
     ``503,900'' and inserting ``504,400''.

     SEC. 102. FOREIGN LANGUAGE EXPERTISE.

       (a) Findings.--Congress makes the following findings:
       (1) Success in the global war on terrorism will require a 
     dramatic increase in institutional and personal expertise in 
     the languages and cultures of the societies where terrorism 
     has taken root, including a substantial increase in the 
     number of national security personnel who obtain expert 
     lingual training.
       (2) The National Commission on Terrorist Attacks Upon the 
     United States identified the countries in the Middle East, 
     South Asia, Southeast Asia, and West Africa as countries that 
     serve or could serve as terrorist havens.
       (3) Although 22 countries have Arabic as their official 
     language, the National Commission on Terrorist Attacks Upon 
     the United States found that a total of only 6 undergraduate 
     degrees for the study of Arabic were granted by United States 
     colleges and universities in 2002.
       (4) The report of the National Commission on Terrorist 
     Attacks Upon the United States contained several criticisms 
     of the lack of linguistic expertise in the Central 
     Intelligence Agency and the Federal Bureau of Investigation 
     prior to the September 11, 2001 terrorist attacks, and called 
     for the Central Intelligence Agency to ``develop a stronger 
     language program, with high standards and sufficient 
     financial incentives''.
       (5) An audit conducted by the Department of Justice in July 
     2004, revealed that the Federal Bureau of Investigation has a 
     backlog of hundreds of thousands of untranslated audio 
     recordings from terror and espionage investigations.
       (6) The National Security Education Program Trust Fund, 
     which funds critical grant and scholarship programs for 
     linguistic training in regions critical to national security, 
     will have exhausted all its funding by fiscal year 2006, 
     unless additional appropriations are made to the Trust Fund.
       (b) Sense of Congress.--It is the sense of Congress that--
       (1) the overwhelming majority of Muslims reject terrorism 
     and a small, radical minority has grossly distorted the 
     teachings of one of the world's great faiths to seek 
     justification for acts of terrorism, such radical Islamic 
     fundamentalism constitutes a primary threat to the national 
     security interests of the United States, and an effective 
     strategy for combating terrorism should include increasing 
     the number of personnel throughout the Federal Government 
     with expertise in languages spoken in predominately Muslim 
     countries and in the culture of such countries;
       (2) Muslim-Americans constitute an integral and cherished 
     part of the fabric of American society and possess many 
     talents, including linguistic, historic, and cultural 
     expertise that should be harnessed in the war against 
     radical, fundamentalist terror; and
       (3) amounts appropriated for the National Flagship Language 
     Initiative pursuant to the amendments made by subsection 
     (e)(2) should be used to support the establishment, 
     operation, and improvement of programs for the study of 
     Arabic, Persian, and other Middle Eastern, South Asian, 
     Southeast Asian, and West African languages in institutes of 
     higher education in the United States.
       (c) Authorization of Appropriations.--
       (1) National security education trust fund.--Section 810 of 
     the David L. Boren National Security Education Act of 1991 
     (50 U.S.C. 1910) is amended by adding at the end the 
     following:
       ``(d) Authorization of Appropriations for the Fund for 
     Fiscal Year 2006.--
       ``(1) In general.--There are authorized to be appropriated 
     to the Fund $150,000,000 for fiscal year 2006.
       ``(2) Availability of funds.--Amounts appropriated pursuant 
     to the authorization of appropriations in paragraph (1) shall 
     remain available until expended and not more than $15,000,000 
     of such amounts may be obligated and expended during any 
     fiscal year.''.
       (2) National flagship language initiative.--
       (A) In general.--Section 811(a) of the David L. Boren 
     National Security Education Act of 1991 (50 U.S.C. 1911(a)) 
     is amended by striking ``there is authorized to be 
     appropriated to the Secretary for each fiscal year, beginning 
     with fiscal year 2003, $10,000,000'' and inserting ``there is 
     authorized to be appropriated to the Secretary for each 
     fiscal year 2003 through 2005, $10,000,000, and for each 
     fiscal year after 2005, $20,000,000,''.
       (B) Availability of funds.--Section 811(b) of such Act (50 
     U.S.C. 1911(b)) is amended by inserting ``for fiscal years 
     2003 through 2005'' after ``this section''.
       (3) Demonstration program.--There are authorized to be 
     appropriated to the Director of National Intelligence such 
     sums as may be necessary for each of fiscal years 2006, 2007, 
     and 2008 in order to carry out the demonstration program 
     established under subsection (c).

     SEC. 103. CURTAILING TERRORIST FINANCING.

       (a) Findings.--Congress makes the following findings:
       (1) The report of the National Commission on Terrorist 
     Attacks Upon the United States stated that ``[v]igorous 
     efforts to track terrorist financing must remain front and 
     center in United States counterterrorism efforts''.
       (2) The report of the Independent Task Force sponsored by 
     the Council on Foreign Relations stated that ``currently 
     existing U. S. and international policies, programs, 
     structures, and organizations will be inadequate to assure 
     sustained results commensurate with the ongoing threat posed 
     to the national security of the United States''.
       (3) The report of the Independent Task Force contained the 
     conclusion that ``[l]ong-term success will depend critically 
     upon the structure, integration, and focus of the U. S. 
     Government--and any intergovernmental efforts undertaken to 
     address this problem''.
       (b) Policy.--It is the policy of the United States--
       (1) to work with the Government of Saudi Arabia to curtail 
     terrorist financing originating from that country using a 
     range of methods, including diplomacy, intelligence, and law 
     enforcement;
       (2) to ensure effective coordination and sufficient 
     resources for efforts of the agencies and departments of the 
     United States to disrupt terrorist financing by carrying out, 
     through the Office of Terrorism and Financial Intelligence in 
     the Department of the Treasury, a comprehensive analysis of 
     the budgets and activities of all such agencies and 
     departments that are related to disrupting the financing of 
     terrorist organizations;
       (3) to provide each agency or department of the United 
     States with the appropriate number of personnel to carry out 
     the activities of such agency or department related to 
     disrupting the financing of terrorist organizations;
       (4) to centralize the coordination of the efforts of the 
     United States to combat terrorist financing and utilize 
     existing authorities to identify foreign jurisdictions and 
     foreign financial institutions suspected of abetting 
     terrorist financing and take actions to prevent the provision 
     of assistance to terrorists; and
       (5) to work with other countries to develop and enforce 
     strong domestic terrorist financing laws, and increase 
     funding for bilateral and multilateral programs to enhance 
     training and capacity-building in countries who request 
     assistance.
       (c) Authorization of Appropriations To Provide Technical 
     Assistance To Prevent Financing of Terrorists.--
       (1) In general.--There are authorized to be appropriated to 
     the President for the ``Economic Support Fund'' to provide 
     technical assistance under the provisions of chapter 4 of 
     part II of the Foreign Assistance Act of 1961 (22 U.S.C. 2346 
     et seq.) to foreign countries to assist such countries in 
     preventing the financing of terrorist activities--
       (A) for fiscal year 2006, $300,000,000; and
       (B) for fiscal years 2007 and 2008, such sums as may be 
     necessary.
       (2) Availability of funds.--Amounts appropriated pursuant 
     to the authorization of appropriations in this subsection are 
     authorized to remain available until expended.
       (3) Additional funds.--Amounts authorized to be 
     appropriated under this subsection are in addition to amounts 
     otherwise available for such purposes.

[[Page S158]]

     SEC. 104. PROHIBITION ON TRANSACTIONS WITH COUNTRIES THAT 
                   SUPPORT TERRORISM.

       (a) Clarification of Certain Actions Under IEEPA.--In any 
     case in which the President takes action under the 
     International Emergency Economic Powers Act (50 U.S.C. 1701 
     et seq.) with respect to a foreign country, or persons 
     dealing with or associated with the government of that 
     foreign country, as a result of a determination by the 
     Secretary of State that the government of that foreign 
     country has repeatedly provided support for acts of 
     international terrorism, such action shall apply to a United 
     States person or other person.
       (b) Definitions.--In this section:
       (1) Controlled in fact.--The term ``is controlled in fact'' 
     includes--
       (A) in the case of a corporation, holds at least 50 percent 
     (by vote or value) of the capital structure of the 
     corporation; and
       (B) in the case of any other kind of legal entity, holds 
     interests representing at least 50 percent of the capital 
     structure of the entity.
       (2) State.--The term ``State'' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, Guam, the Virgin Islands, and 
     other territories or possessions of the United States.
       (3) United states person.--The term ``United States 
     person'' includes any United States citizen, permanent 
     resident alien, entity organized under the law of the United 
     States or of any State (including foreign branches), wherever 
     located, or any other person in the United States.
       (c) Applicability.--
       (1) In general.--In any case in which the President has 
     taken action under the International Emergency Economic 
     Powers Act and such action is in effect on the date of 
     enactment of this Act, the provisions of subsection (a) shall 
     not apply to a United States person (or other person) if such 
     person divests or terminates its business with the government 
     or person identified by such action within 90 days after the 
     date of enactment of this Act.
       (2) Actions after date of enactment.--In any case in which 
     the President takes action under the International Emergency 
     Economic Powers Act on or after the date of enactment of this 
     Act, the provisions of subsection (a) shall not apply to a 
     United States person (or other person) if such person divests 
     or terminates its business with the government or person 
     identified by such action within 90 days after the date of 
     such action.
       (d) Notification of Congress of Termination of 
     Investigation by Office of Foreign Assets Control.--The 
     Office of Federal Procurement Policy Act (41 U.S.C. 403 et 
     seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 42. NOTIFICATION OF CONGRESS OF TERMINATION OF 
                   INVESTIGATION BY OFFICE OF FOREIGN ASSETS 
                   CONTROL.

       ``The Director of the Office of Foreign Assets Control 
     shall notify Congress upon the termination of any 
     investigation by the Office of Foreign Assets Control of the 
     Department of the Treasury if any sanction is imposed by the 
     Director of such office as a result of the investigation.''.
   TITLE II--PREVENTING THE GROWTH OF RADICAL ISLAMIC FUNDAMENTALISM
             Subtitle A--Quality Educational Opportunities

     SEC. 201. FINDINGS, POLICY, AND DEFINITION.

       (a) Findings.--Congress makes the following findings:
       (1) The report of the National Commission on Terrorist 
     Attacks Upon the United States stated that ``[e]ducation that 
     teaches tolerance, the dignity and value of each individual, 
     and respect for different beliefs is a key element in any 
     global strategy to eliminate Islamic terrorism''.
       (2) According to the United Nations Development Program 
     Arab Human Development Report for 2002, 10,000,000 children 
     between the ages of 6 through 15 in the Arab world do not 
     attend school, and \2/3\ of the 65,000,000 illiterate adults 
     in the Arab world are women.
       (3) The report of the National Commission on Terrorist 
     Attacks Upon the United States concluded that ensuring 
     educational opportunity is essential to the efforts of the 
     United States to defeat global terrorism and recommended that 
     the United States Government ``should offer to join with 
     other nations in generously supporting [spending funds] . . . 
     directly on building and operating primary and secondary 
     schools in those Muslim states that commit to sensibly 
     investing financial resources in public education''.
       (b) Policy.--It is the policy of the United States--
       (1) to work toward the goal of dramatically increasing the 
     availability of basic education in the developing world, 
     which will reduce the influence of radical madrassas and 
     other institutions that promote religious extremism;
       (2) to join with other countries in generously supporting 
     the International Youth Opportunity Fund authorized under 
     section 7114 of the 9/11 Commission Implementation Act of 
     2004 (Public Law 108-458), with the goal of building and 
     operating primary and secondary schools in Muslim countries 
     that commit to sensibly investing the resources of such 
     countries in public education;
       (3) to work with the international community, including 
     foreign countries and international organizations to raise 
     $7,000,000,000 to $10,000,000,000 each year to fund education 
     programs in Muslim countries;
       (4) to offer additional incentives to countries to increase 
     the availability of basic education; and
       (5) to work to prevent financing of educational 
     institutions that support radical Islamic fundamentalism.
       (c) Appropriate Congressional Committees Defined.--In this 
     subtitle, the term ``appropriate congressional committees'' 
     means the Committee on Foreign Relations and the Committee on 
     Appropriations of the Senate and the Committee on 
     International Relations and the Committee on Appropriations 
     of the House of Representatives.

     SEC. 202. ANNUAL REPORT TO CONGRESS.

       Not later than June 1 of each year, the Secretary of State 
     shall submit to the appropriate congressional committees a 
     report on the efforts of countries in the developing world to 
     increase the availability of basic education and to close 
     educational institutions that promote religious extremism and 
     terrorism. Each report shall include--
       (1) a list of countries that are making serious and 
     sustained efforts to increase the availability of basic 
     education and to close educational institutions that promote 
     religious extremism and terrorism;
       (2) a list of countries that are making efforts to increase 
     the availability of basic education and to close educational 
     institutions that promote religious extremism and terrorism, 
     but such efforts are not serious and sustained; and
       (3) a list of countries that are not making efforts to 
     increase the availability of basic education and to close 
     educational institutions that promote religious extremism and 
     terrorism.

     SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

       (a) International Education Programs.--There are authorized 
     to be appropriated to the President for ``Development 
     Assistance'' for international education programs carried out 
     under sections 105 and 496 of the Foreign Assistance Act of 
     1961 (22 U.S.C. 2151c and 2293)--
       (1) for fiscal year 2006, $1,000,000,000; and
       (2) for fiscal years 2007 and 2008, such sums as may be 
     necessary.
       (b) International Youth Opportunity Fund.--There are 
     authorized to be appropriated to the President for fiscal 
     years 2006, 2007, and 2008 such sums as may be necessary for 
     the United States contribution to the International Youth 
     Opportunity Fund authorized under section 7114 of the 9/11 
     Commission Implementation Act of 2004 (Public Law 108-458) 
     for international education programs.
       (c) Additional Funds.--Amounts authorized to be 
     appropriated in this section are in addition to amounts 
     otherwise available for such purposes.
       Subtitle B--Democracy and Development in the Muslim World

     SEC. 211. PROMOTING DEMOCRACY AND DEVELOPMENT IN THE MIDDLE 
                   EAST, CENTRAL ASIA, SOUTH ASIA, AND SOUTHEAST 
                   ASIA.

       (a) Findings.--Congress makes the following findings:
       (1) Al-Qaeda and affiliated groups have established a 
     terrorist network with linkages throughout the Middle East, 
     Central Asia, South Asia, and Southeast Asia.
       (2) While political repression and lack of economic 
     development do not justify terrorism, increased political 
     freedoms and economic growth can contribute to an environment 
     that undercuts tendencies and conditions that facilitate the 
     rise of terrorist organizations.
       (3) It is in the national security interests of the United 
     States to promote democracy, good governance, political 
     freedom, independent media, women's rights, private sector 
     development, and open economic systems in the countries of 
     the Middle East, Central Asia, South Asia, and Southeast 
     Asia.
       (b) Policy.--It is the policy of the United States--
       (1) to promote the objectives described in subsection 
     (a)(3) in the countries of the Middle East, Central Asia, 
     South Asia, and Southeast Asia;
       (2) to provide assistance and resources to organizations 
     that are committed to promoting such objectives; and
       (3) to work with other countries and international 
     organizations to increase the resources devoted to promoting 
     such objectives.
       (c) Strategy.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of State shall submit to 
     Congress a strategy to promote the policy of the United 
     States set out in subsection (b). Such strategy shall 
     describe how funds appropriated pursuant to the authorization 
     of appropriations in subsection (d) will be used.
       (d) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     the President for the ``Economic Support Fund'' for 
     activities carried out under chapter 4 of part II of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2346 et seq.) to 
     promote the policy of the United States set out in subsection 
     (b)--
       (A) for fiscal year 2006, $500,000,000; and
       (B) for fiscal years 2007 and 2008, such sums as may be 
     necessary.
       (2) Sense of congress on use of funds.--It is the sense of 
     Congress that a substantial portion of the funds appropriated 
     pursuant to the authorization of appropriations in paragraph 
     (1) should be made available to non-governmental 
     organizations that have a record of success working in the 
     countries of

[[Page S159]]

     the Middle East, Central Asia, South Asia, and Southeast Asia 
     to support democratic parties, human rights organizations, 
     independent media, and the efforts to promote the rights of 
     women.
       (3) Additional funds.--Amounts authorized to be 
     appropriated in paragraph (1) are in addition to amounts 
     otherwise available for such purposes.

     SEC. 212. MIDDLE EAST FOUNDATION.

       (a) Purposes.--The purposes of this section are to support, 
     through the provision of grants, technical assistance, 
     training, and other programs, in the countries of the Middle 
     East, the expansion of--
       (1) civil society;
       (2) opportunities for political participation for all 
     citizens;
       (3) protections for internationally recognized human 
     rights, including the rights of women;
       (4) educational system reforms;
       (5) independent media;
       (6) policies that promote economic opportunities for 
     citizens;
       (7) the rule of law; and
       (8) democratic processes of government.
       (b) Middle East Foundation.--
       (1) Designation.--The Secretary of State is authorized to 
     designate an appropriate private, nonprofit organization that 
     is organized or incorporated under the laws of the United 
     States or of a State as the Middle East Foundation (referred 
     to in this section as the ``Foundation'').
       (2) Funding.--The Secretary of State is authorized to 
     provide funding to the Foundation through the Middle East 
     Partnership Initiative of the Department of State. The 
     Foundation shall use amounts provided under this paragraph to 
     carry out the purposes of this section, including through 
     making grants and providing other assistance to entities to 
     carry out programs for such purposes.
       (3) Notification to congressional committees.--The 
     Secretary of State shall notify the Committee on Foreign 
     Relations of the Senate and the Committee on International 
     Relations of the House of Representatives prior to 
     designating an appropriate organization as the Foundation.
       (c) Grants for Projects.--
       (1) Foundation to make grants.--The Secretary of State 
     shall enter into an agreement with the Foundation that 
     requires the Foundation to use the funds provided under 
     subsection (b)(2) to make grants to persons (other than 
     governments or government entities) located in the Middle 
     East or working with local partners based in the Middle East 
     to carry out projects that support the purposes specified in 
     subsection (a).
       (2) Center for public policy.--Under the agreement 
     described in paragraph (1), the Foundation may make a grant 
     to an institution of higher education located in the Middle 
     East to create a center for public policy for the purpose of 
     permitting scholars and professionals from the countries of 
     the Middle East and from other countries, including the 
     United States, to carry out research, training programs, and 
     other activities to inform public policymaking in the Middle 
     East and to promote broad economic, social, and political 
     reform for the people of the Middle East.
       (3) Applications for grants.--An entity seeking a grant 
     from the Foundation under this section shall submit an 
     application to the head of the Foundation at such time, in 
     such manner, and including such information as the head of 
     the Foundation may reasonably require.
       (d) Private Character of the Foundation.--Nothing in this 
     section shall be construed to--
       (1) make the Foundation an agency or establishment of the 
     United States Government, or to make the officers or 
     employees of the Foundation officers or employees of the 
     United States for purposes of title 5, United States Code; or
       (2) to impose any restriction on the Foundation's 
     acceptance of funds from private and public sources in 
     support of its activities consistent with the purposes of 
     this section.
       (e) Limitation on Payments to Foundation Personnel.--No 
     part of the funds provided to the Foundation under this 
     section shall inure to the benefit of any officer or employee 
     of the Foundation, except as salary or reasonable 
     compensation for services.
       (f) Retention of Interest.--The Foundation may hold funds 
     provided under this section in interest-bearing accounts 
     prior to the disbursement of such funds to carry out the 
     purposes of this section, and may retain for use for such 
     purposes any interest earned without returning such interest 
     to the Treasury of the United States and without further 
     appropriation by Congress.
       (g) Financial Accountability.--
       (1) Independent private audits of the foundation.--The 
     accounts of the Foundation shall be audited annually in 
     accordance with generally accepted auditing standards by 
     independent certified public accountants or independent 
     licensed public accountants certified or licensed by a 
     regulatory authority of a State or other political 
     subdivision of the United States. The report of the 
     independent audit shall be included in the annual report 
     required by subsection (h).
       (2) GAO audits.--The financial transactions undertaken 
     pursuant to this section by the Foundation may be audited by 
     the General Accounting Office in accordance with such 
     principles and procedures and under such rules and 
     regulations as may be prescribed by the Comptroller General 
     of the United States.
       (3) Audits of grant recipients.--
       (A) In general.--A recipient of a grant from the Foundation 
     shall agree to permit an audit of the books and records of 
     such recipient related to the use of the grant funds.
       (B) Recordkeeping.--Such recipient shall maintain 
     appropriate books and records to facilitate an audit referred 
     to subparagraph (A), including--
       (i) separate accounts with respect to the grant funds;
       (ii) records that fully disclose the use of the grant 
     funds;
       (iii) records describing the total cost of any project 
     carried out using grant funds; and
       (iv) the amount and nature of any funds received from other 
     sources that were combined with the grant funds to carry out 
     a project.
       (h) Annual Reports.--Not later than January 31, 2006, and 
     annually thereafter, the Foundation shall submit to Congress 
     and make available to the public an annual report that 
     includes, for the fiscal year prior to the fiscal year in 
     which the report is submitted, a comprehensive and detailed 
     description of--
       (1) the operations and activities of the Foundation that 
     were carried out using funds provided under this section;
       (2) grants made by the Foundation to other entities with 
     funds provided under this section;
       (3) other activities of the Foundation to further the 
     purposes of this section; and
       (4) the financial condition of the Foundation.
            Subtitle C--Restoring American Moral Leadership

     SEC. 221. ADVANCING UNITED STATES INTERESTS THROUGH PUBLIC 
                   DIPLOMACY.

       (a) Findings.--Congress makes the following findings:
       (1) The United States needs to improve its communication of 
     information and ideas to people in foreign countries, 
     particularly in countries with significant Muslim 
     populations.
       (2) Public diplomacy should reaffirm the paramount 
     commitment of the United States to democratic principles, 
     including preserving the civil liberties of all the people of 
     the United States, including Muslim-Americans.
       (3) The report of the National Commission on Terrorist 
     Attacks Upon the United States stated that, ``Recognizing 
     that Arab and Muslim audiences rely on satellite television 
     and radio, the government has begun some promising 
     initiatives in television and radio broadcasting to the Arab 
     world, Iran, and Afghanistan. These efforts are beginning to 
     reach large audiences. The Broadcasting Board of Governors 
     has asked for much larger resources. It should get them.''.
       (4) A significant expansion of United States international 
     broadcasting would provide a cost-effective means of 
     improving communication with countries with significant 
     Muslim populations by providing news, information, and 
     analysis, as well as cultural programming, through both radio 
     and television broadcasts.
       (b) Special Authority for Surge Capacity.--The United 
     States International Broadcasting Act of 1994 (22 U.S.C. 6201 
     et seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 316. SPECIAL AUTHORITY FOR SURGE CAPACITY.

       ``(a) Emergency Authority.--
       ``(1) In general.--Whenever the President determines it to 
     be important to the national interests of the United States 
     and so certifies to the appropriate congressional committees, 
     the President, on such terms and conditions as the President 
     may determine, is authorized to direct any department, 
     agency, or other entity of the United States to furnish the 
     Broadcasting Board of Governors with such assistance as may 
     be necessary to provide international broadcasting activities 
     of the United States with a surge capacity to support United 
     States foreign policy objectives during a crisis abroad.
       ``(2) Supersedes existing law.--The authority of paragraph 
     (1) supersedes any other provision of law.
       ``(3) Surge capacity defined.--In this subsection, the term 
     `surge capacity' means the financial and technical resources 
     necessary to carry out broadcasting activities in a 
     geographical area during a crisis.
       ``(b) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to the President such sums as may be necessary for the 
     President to carry out this section, except that no such 
     amount may be appropriated which, when added to amounts 
     previously appropriated for such purpose but not yet 
     obligated, would cause such amounts to exceed $25,000,000.
       ``(2) Availability of funds.--Amounts appropriated pursuant 
     to the authorization of appropriations in this subsection are 
     authorized to remain available until expended.
       ``(3) Designation of appropriations.--Amounts appropriated 
     pursuant to the authorization of appropriations in this 
     subsection may be referred to as the `United States 
     International Broadcasting Surge Capacity Fund'.''.
       (c) Report.--An annual report submitted to the President 
     and Congress by the Broadcasting Board of Governors under 
     section 305(a)(9) of the United States International 
     Broadcasting Act of 1994 (22 U.S.C. 6204(a)(9)) shall provide 
     a detailed description of any activities carried out under 
     section 316 of such Act, as added by subsection (b).
       (d) Authorization of Appropriations for United States 
     International Broadcasting Activities.--

[[Page S160]]

       (1) In general.--In addition to amounts otherwise available 
     for such purposes, the following amounts are authorized to be 
     appropriated to carry out United States Government 
     broadcasting activities under the United States Information 
     and Educational Exchange Act of 1948 (22 U.S.C. 1431 et 
     seq.), the United States International Broadcasting Act of 
     1994 (22 U.S.C. 6201 et seq.), the Foreign Affairs Reform and 
     Restructuring Act of 1998 (as enacted in division G of the 
     Omnibus Consolidated and Emergency Supplemental 
     Appropriations Act, 1999; Public Law 105-277), and this Act, 
     and to carry out other authorities in law consistent with 
     such purposes:
       (A) International broadcasting operations.--For 
     ``International Broadcasting Operations'', $497,000,000 for 
     the fiscal year 2006.
       (B) Broadcasting capital improvements.--For ``Broadcasting 
     Capital Improvements'', $70,000,000 for the fiscal year 2006.
       (2) Availability of funds.--Amounts appropriated pursuant 
     to the authorization of appropriations in this section are 
     authorized to remain available until expended.

     SEC. 222. DEPARTMENT OF STATE PUBLIC DIPLOMACY PROGRAMS.

       (a) United States Educational, Cultural, and Public 
     Diplomacy Programs.--There is authorized to be appropriated 
     for the Department of State to carry out public diplomacy 
     programs of the Department under the United States 
     Information and Educational Exchange Act of 1948, the Mutual 
     Educational and Cultural Exchange Act of 1961, Reorganization 
     Plan Number 2 of 1977, the Foreign Affairs Reform and 
     Restructuring Act of 1998, the Center for Cultural and 
     Technical Interchange Between East and West Act of 1960, the 
     Dante B. Fascell North-South Center Act of 1991, and the 
     National Endowment for Democracy Act, and to carry out other 
     authorities in law consistent with the purposes of such Acts 
     for ``Educational and Cultural Exchange Programs'', 
     $500,000,000 for the fiscal year 2006.
       (b) Administration of Foreign Affairs.--
       The is authorized to be appropriated for the Department of 
     State under ``Administration of Foreign Affairs'' to carry 
     out the authorities, functions, duties, and responsibilities 
     in the conduct of foreign affairs of the United States, and 
     for other purposes authorized by law for ``Diplomatic and 
     Consular Programs'', $500,000,000 for the fiscal year 2006, 
     which shall only be available for public diplomacy 
     international information programs.

     SEC. 223. TREATMENT OF DETAINEES.

       (a) Findings.--Consistent with the report of the National 
     Commission on Terrorist Attacks Upon the United States, 
     Congress makes the following findings:
       (1) Carrying out the global war on terrorism requires the 
     development of policies with respect to the detention and 
     treatment of captured international terrorists that are 
     adhered to by all coalition forces.
       (2) Article 3 of the Convention Relative to the Treatment 
     of Prisoners of War, done at Geneva August 12, 1949 (6 UST 
     3316), was specifically designed for cases in which the usual 
     rules of war do not apply, and the minimum standards of 
     treatment pursuant to such Article are generally accepted 
     throughout the world as customary international law.
       (b) Policy.--The policy of the United States is as follows:
       (1) It is the policy of the United States to treat all 
     foreign persons captured, detained, interned, or otherwise 
     held in the custody of the United States (hereinafter 
     ``detainees'') humanely and in accordance with the legal 
     obligations under United States law and international law, 
     including the obligations in the Convention Against Torture 
     and in the minimum standards set forth in the Geneva 
     Conventions.
       (2) It is the policy of the United States that all 
     officials of the United States are bound both in wartime and 
     in peacetime by the legal prohibitions against torture, 
     cruel, inhumane, or degrading treatment set out in the 
     Constitution, laws, and treaties of the United States.
       (3) If there is any doubt as to whether a detainee is 
     entitled to the protections afforded by the Geneva 
     Conventions, it is the policy of the United States that such 
     detainee shall enjoy the protections of the Convention 
     Relative to the Treatment of Prisoners of War, done at Geneva 
     August 12, 1949 (6 UST 3316) until such time as the 
     detainee's status can be determined pursuant to the 
     procedures authorized by Army Regulation 190-8, Section 1-6.
       (4) It is the policy of the United States to provide 
     individualized hearings for all detainees for the purpose of 
     expeditiously holding detainees accountable for violations of 
     the law of war, other relevant international prohibitions, or 
     criminal laws alleged to have been committed by such 
     detainees or to expeditiously conduct intelligence 
     debriefings of such detainees.
       (5) It is the policy of the United States to avoid the 
     indefinite detention of any individual in a manner which is 
     contrary to the legal principles and security interests of 
     the United States.
       (c) Reporting.--The Secretary shall submit to the 
     appropriate congressional committees:
       (1) A quarterly report providing the number of detainees 
     who were denied prisoner of war status under the Geneva 
     Conventions and the basis for denying such status to each 
     such detainee.
       (2) Not later than 180 days after the date of the enactment 
     of this Act, a report setting forth--
       (A) the proposed schedule for military commissions to be 
     held at Guantanamo Bay, Cuba; and
       (B) the number of individuals currently held at Guantanamo 
     Bay, Cuba, the number of such individuals who are unlikely to 
     face a military commission in the next six months, and each 
     reason for not bringing such individuals before a military 
     commission.
       (3) Not later than 15 days after the date of the enactment 
     of this Act, all International Committee of the Red Cross 
     reports, completed prior to the enactment of this Act, 
     concerning the treatment of detainees in United States 
     custody at Guantanamo Bay, Cuba, Iraq, and Afghanistan. Such 
     reports should be provided, in classified form.
       (4) Not later than 90 days after the date of the enactment 
     of this Act, a report setting forth all interrogation 
     techniques approved, as of the date of the enactment of this 
     Act, by officials of the United States for use with 
     detainees.
       (d) Annual Training Requirement.--The Secretary of Defense 
     shall certify to the appropriate congressional committees, no 
     later than June 1 of each year, that all Federal employees 
     and civilian contractors engaged in the handling or 
     interrogating of detainees have fulfilled an annual training 
     requirement on the laws of war, the Geneva Conventions, the 
     Convention Against Torture, and the obligations of the United 
     States under international humanitarian law.
       (e) Prohibition on Torture or Cruel, Inhumane, or Degrading 
     Treatment or Punishment.--
       (1) In general.--No detainee shall be subject to torture or 
     cruel, inhumane, or degrading treatment or punishment that is 
     prohibited by the Constitution, laws, or treaties of the 
     United States.
       (2) Relationship to geneva conventions.--Nothing in this 
     section shall affect the status of any person under the 
     Geneva Conventions or whether any person is entitled to the 
     protections of the Geneva Conventions.
       (f) Rules, Regulations, and Guidelines.--
       (1) Requirement.--Not later than 180 days after the date of 
     the enactment of this Act, the Secretary and the Director 
     shall prescribe the rules, regulations, or guidelines 
     necessary to ensure compliance with the prohibition in 
     subsection (e)(1) by all personnel of the United States 
     Government and by any person providing services to the United 
     States Government on a contract basis.
       (2) Report to congress.--The Secretary and the Director 
     shall submit to Congress the rules, regulations, or 
     guidelines prescribed under paragraph (1), and any 
     modifications to such rules, regulations, or guidelines--
       (A) not later than 30 days after the effective date of such 
     rules, regulations, guidelines, or modifications; and
       (B) in a manner and form that will protect the national 
     security interests of the United States.
       (g) Reports on Possible Violations.--
       (1) Requirement.--The Secretary and the Director shall each 
     submit, on a timely basis and not less than twice each year, 
     a report to Congress on the circumstances surrounding, and a 
     status report on, any investigation of a possible violation 
     of the prohibition in subsection (e)(1) by United States 
     Government personnel or by a person providing services to the 
     United States Government on a contract basis.
       (2) Form of report.--A report required under paragraph (1) 
     shall be submitted in a manner and form that--
       (A) will protect the national security interests of the 
     United States; and
       (B) will not prejudice any prosecution of an individual 
     alleged to have violated the prohibition in subsection 
     (e)(1).
       (h) Definitions.--In this section:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means the Committee 
     on Armed Services, the Committee on the Judiciary, and the 
     Committee on Foreign Relations of the Senate and the 
     Committee on Armed Services, the Committee on the Judiciary, 
     and the Committee on International Relations of the House of 
     Representatives.
       (2) Convention Against Torture.--The term ``Convention 
     Against Torture'' means the Convention Against Torture and 
     Other Cruel, Inhuman or Degrading Treatment or Punishment, 
     done at New York December 10, 1984.
       (3) Director.--The term ``Director'' means the Director of 
     National Intelligence.
       (4) Geneva conventions.--The term ``Geneva Conventions'' 
     means--
       (A) the Convention for the Amelioration of the Condition of 
     the Wounded and Sick in Armed Forces in the Field, done at 
     Geneva August 12, 1949 (6 UST 3114);
       (B) the Convention for the Amelioration of the Condition of 
     the Wounded, Sick, and Shipwrecked Members of Armed Forces at 
     Sea, done at Geneva August 12, 1949 (6 UST 3217);
       (C) the Convention Relative to the Treatment of Prisoners 
     of War, done at Geneva August 12, 1949 (6 UST 3316); and
       (D) the Convention Relative to the Protection of Civilian 
     Persons in Time of War, done at Geneva August 12, 1949 (6 UST 
     3516).
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Defense.
       (6) Torture.--The term ``torture'' has the meaning given 
     that term in section 2340 of title 18, United States Code.

[[Page S161]]

     SEC. 224. NATIONAL COMMISSION TO REVIEW POLICY REGARDING THE 
                   TREATMENT OF DETAINEES.

       (a) Establishment of Commission.--There is established the 
     National Commission To Review Policy Regarding the Treatment 
     of Detainees.
       (b) Purposes.--The purposes of the Commission are as 
     follows:
       (1) To examine and report upon the role of policymakers in 
     the development of intelligence related to the treatment of 
     individuals detained during Operation Iraqi Freedom or 
     Operation Enduring Freedom.
       (2) To examine and report on the impact of the abuse of 
     prisoners by the United States personnel on the security of 
     the Armed Forces of the United States.
       (3) To build upon the reviews of the policies of the United 
     States related to the treatment of individuals detained by 
     the United States, including such reviews conducted by the 
     executive branch, Congress, or other entities.
       (c) Composition of the Commission.--
       (1) Members.--The Commission shall be composed of 15 
     members, of whom--
       (A) 3 members shall be appointed by the majority leader of 
     the Senate;
       (B) 3 members shall be appointed by the Speaker of the 
     House of Representatives;
       (C) 3 members shall be appointed by the minority leader of 
     the Senate;
       (D) 3 members shall be appointed by the minority leader of 
     the House of Representatives;
       (E) 1 member shall be appointed by the Judge Advocate 
     General of the Army;
       (F) 1 member shall be appointed by the Judge Advocate 
     General of the Navy; and
       (G) 1 member shall be appointed by the Judge Advocate 
     General of the Air Force.
       (2) Chairperson; vice chairperson.--
       (A) In general.--Subject to subparagraph (B), the 
     Chairperson and Vice Chairperson of the Commission shall be 
     elected by the members.
       (B) Political party affiliation.--The Chairperson and Vice 
     Chairperson may not be from the same political party.
       (3) Initial meeting.--Once 9 or more members of the 
     Commission have been appointed, those members who have been 
     appointed may meet and, if necessary, select a temporary 
     chairperson, who may begin the operations of the Commission, 
     including the hiring of staff.
       (4) Quorum; vacancies.--After its initial meeting, the 
     Commission shall meet upon the call of the Chairperson or a 
     majority of its members. Eight members of the Commission 
     shall constitute a quorum. Any vacancy in the Commission 
     shall not affect its powers, but shall be filled in the same 
     manner in which the original appointment was made.
       (5) Sense of congress on qualifications of commission 
     members.--It is the sense of Congress that individuals 
     appointed to the Commission should be prominent United States 
     citizens, with national recognition and significant depth of 
     experience in the fields of intelligence, law enforcement, or 
     foreign affairs, or experience serving the United States 
     Government, including service in the Armed Forces.
       (d) Functions of the Commission.--The functions of the 
     Commission are--
       (1) to conduct an investigation that--
       (A) investigates the development of policy relating to 
     individuals detained during Operation Iraqi Freedom or 
     Operation Enduring Freedom;
       (B) determines whether the United States policy related to 
     the treatment of detained individuals has adversely affected 
     the security of the members of the Armed Forces of the United 
     States;
       (C) determines whether and to what extent the incidences of 
     abuse of detained individuals has affected the standing of 
     the United States in the world;
       (D) determines whether and to what extent leaders of the 
     United States Armed Forces were given the opportunity to 
     comment on and influence policy relating to treatment of 
     detained individuals; and
       (E) determines whether and to what extent policy relating 
     to the treatment of individuals detained during Operation 
     Iraqi Freedom or Operation Enduring Freedom differed from the 
     policies and practices regarding detainees established by the 
     Armed Forces prior to such operations; and
       (2) to submit to the President and Congress such report as 
     is required by this section containing such findings, 
     conclusions, and recommendations as the Commission shall 
     determine, including proposing organization, coordination, 
     planning, management arrangements, procedures, rules, and 
     regulations.
       (e) Powers of the Commission.--
       (1) In general.--
       (A) Hearings and evidence.--The Commission or, on the 
     authority of the Commission, any subcommittee or member 
     thereof, may, for the purpose of carrying out this section--
       (i) hold such hearings and sit and act at such times and 
     places, take such testimony, receive such evidence, 
     administer such oaths; and
       (ii) require, by subpoena or otherwise, the attendance and 
     testimony of such witnesses and the production of such books, 
     records, correspondence, memoranda, cables, electronic 
     messages, papers, and documents, as the Commission or such 
     designated subcommittee or designated member may determine 
     advisable.
       (B) Subpoenas.--
       (i) Issuance.--Subpoenas issued under subparagraph (A)(ii) 
     may be issued under the signature of the Chairperson of the 
     Commission, the Vice Chairperson of the Commission, the 
     chairperson of any subcommittee created by a majority of the 
     Commission, or any member designated by a majority of the 
     Commission, and may be served by any person designated by the 
     Chairperson, subcommittee chairperson, or member.
       (ii) Enforcement.--
       (I) In general.--In the case of contumacy or failure to 
     obey a subpoena issued under subparagraph (A)(ii), the United 
     States district court for the judicial district in which the 
     subpoenaed person resides, is served, or may be found, or 
     where the subpoena is returnable, may issue an order 
     requiring such person to appear at any designated place to 
     testify or to produce documentary or other evidence. Any 
     failure to obey the order of the court may be punished by the 
     court as a contempt of that court.
       (II) Additional enforcement.--In the case of any failure of 
     any witness to comply with any subpoena or to testify when 
     summoned under authority of this section, the Commission may, 
     by majority vote, certify a statement of fact constituting 
     such failure to the appropriate United States attorney, who 
     may bring the matter before the grand jury for its action, 
     under the same statutory authority and procedures as if the 
     United States attorney had received a certification under 
     sections 102 through 104 of the Revised Statutes of the 
     United States (2 U.S.C. 192 through 194).
       (2) Closed meetings.--
       (A) In general.--Meetings of the Commission may be closed 
     to the public under section 10(d) of the Federal Advisory 
     Committee Act (5 U.S.C. App.) or other applicable law.
       (B) Additional authority.--In addition to the authority 
     under subparagraph (A), section 10(a)(1) and (3) of the 
     Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to any portion of a Commission meeting if the President 
     determines that such portion or portions of that meeting is 
     likely to disclose matters that could endanger national 
     security. If the President makes such determination, the 
     requirements relating to a determination under section 10(d) 
     of that Act shall apply.
       (3) Contracting.--The Commission may, to such extent and in 
     such amounts as are provided in appropriation Acts, enter 
     into contracts to enable the Commission to discharge its 
     duties under this section.
       (4) Information from federal agencies.--The Commission is 
     authorized to secure directly from any executive department, 
     bureau, agency, board, commission, office, independent 
     establishment, or instrumentality of the Government 
     information, suggestions, estimates, and statistics for the 
     purposes of this section. Each department, bureau, agency, 
     board, commission, office, independent establishment, or 
     instrumentality shall, to the extent authorized by law, 
     furnish such information, suggestions, estimates, and 
     statistics directly to the Commission, upon request made by 
     the Chairperson, the chairperson of any subcommittee created 
     by a majority of the Commission, or any member designated by 
     a majority of the Commission.
       (5) Assistance from federal agencies.--
       (A) General services administration.--The Administrator of 
     General Services shall provide to the Commission on a 
     reimbursable basis administrative support and other services 
     for the performance of the Commission's functions.
       (B) Other departments and agencies.--In addition to the 
     assistance prescribed in subparagraph (A), departments and 
     agencies of the United States are authorized to provide to 
     the Commission such services, funds, facilities, staff, and 
     other support services as they may determine advisable and as 
     may be authorized by law.
       (6) Gifts.--The Commission may accept, use, and dispose of 
     gifts or donations of services or property.
       (7) Postal services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as departments and agencies of the United States.
       (f) Staff of the Commission.--
       (1) Appointment and compensation.--The Chairperson and Vice 
     Chairperson, in accordance with rules agreed upon by the 
     Commission, may appoint and fix the compensation of a staff 
     director and such other personnel as may be necessary to 
     enable the Commission to carry out its functions, without 
     regard to the provisions of title 5, United States Code, 
     governing appointments in the competitive service, and 
     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, except that no rate of pay 
     fixed under this subsection may exceed the equivalent of that 
     payable for a position at level V of the Executive Schedule 
     under section 5316 of title 5, United States Code.
       (2) Personnel as federal employees.--
       (A) In general.--The executive director and any personnel 
     of the Commission who are employees shall be employees under 
     section 2105 of title 5, United States Code, for purposes of 
     chapters 63, 81, 83, 84, 85, 87, 89, and 90 of that title.
       (B) Members of commission.--Subparagraph (A) shall not be 
     construed to apply to a member of the Commission.
       (3) Detailees.--Any Federal Government employee may be 
     detailed to the Commission without reimbursement from the 
     Commission, and such detailee shall retain the rights, 
     status, and privileges of his or her regular employment 
     without interruption.
       (4) Consultant services.--The Commission is authorized to 
     procure the services of

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     experts and consultants in accordance with section 3109 of 
     title 5, United States Code, but at rates not to exceed the 
     daily rate paid a person occupying a position at level IV of 
     the Executive Schedule under section 5315 of title 5, United 
     States Code.
       (g) Compensation and Travel Expenses.--
       (1) Compensation.--Each member of the Commission may be 
     compensated at not to exceed the daily equivalent of the 
     annual rate of basic pay in effect for a position at level IV 
     of the Executive Schedule under section 5315 of title 5, 
     United States Code, for each day during which that member is 
     engaged in the actual performance of the duties of the 
     Commission.
       (2) Travel expenses.--While away from their homes or 
     regular places of business in the performance of services for 
     the Commission, members of the Commission shall be allowed 
     travel expenses, including per diem in lieu of subsistence, 
     in the same manner as persons employed intermittently in the 
     Government service are allowed expenses under section 5703(b) 
     of title 5, United States Code.
       (h) Security Clearances for Commission Members and Staff.--
     The appropriate departments and agencies of the Government 
     shall cooperate with the Commission in expeditiously 
     providing to the Commission members and staff appropriate 
     security clearances in a manner consistent with existing 
     procedures and requirements, except that no person shall be 
     provided with access to classified information under this 
     section who would not otherwise qualify for such security 
     clearance.
       (i) Report of the Commission.--Not later than 9 months 
     after the date of the first meeting of the Commission, the 
     Commission shall submit to the President and Congress a 
     report containing such findings, conclusions, and 
     recommendations as have been agreed to by a majority of 
     Commission members.
       (j) Termination.--
       (1) Termination.--The Commission, and all the authorities 
     of this section, shall terminate 60 days after the date on 
     which the report is submitted under subsection (i).
       (2) Administrative activities before termination.--The 
     Commission may use the 60-day period referred to in paragraph 
     (1) for the purpose of concluding its activities, including 
     providing testimony to committees of Congress concerning its 
     reports and disseminating the second report.
       (k) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Commission to carry out this 
     section $5,000,000, to remain available until expended.
     Subtitle D--Strategy for the United States Relationship With 
                Afghanistan, Pakistan, and Saudi Arabia

     SEC. 231. AFGHANISTAN.

       (a) Afghanistan Freedom Support Act of 2002.--Section 
     108(a) the Afghanistan Freedom Support Act of 2002 (22 U.S.C. 
     7518(a)) is amended by striking ``such sums as may be 
     necessary for each of the fiscal years 2005 and 2006'' and 
     inserting ``$2,400,000,000 for fiscal year 2006 and such sums 
     as may be necessary for each of the fiscal years 2007 and 
     2008''.
       (b) Other Authorizations of Appropriations.--
       (1) Fiscal year 2006.--There are authorized to be 
     appropriated to the President for providing assistance for 
     Afghanistan in a manner consistent with the provisions of the 
     Afghanistan Freedom Support Act of 2002 (22 U.S.C. 7501 et 
     seq.) for fiscal year 2006--
       (A) for ``International Military Education and Training'', 
     $1,000,000 to carry out the provisions of section 541 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2347);
       (B) for ``Foreign Military Financing Program'' grants, 
     $444,000,000 to carry out the provisions of section 23 of the 
     Arms Export Control Act (22 U.S.C. 2763); and
       (C) for ``Peacekeeping Operations'', $30,000,000 to carry 
     out the provisions of section 551 of the Foreign Assistance 
     Act of 1961 (22 U.S.C. 2348).
       (2) Fiscal years 2007 and 2008.--
       (A) Authorization of appropriation.--There are authorized 
     to be appropriated for each of the purposes described in 
     subparagraphs (A) through (C) of paragraph (1) such sums as 
     may be necessary for each of the fiscal years 2007 and 2008.
       (B) Sense of congress.--It is the sense of Congress that 
     the amount appropriated for each purpose described in 
     subparagraphs (A) through (C) of paragraph (1) for each of 
     the fiscal years 2007 and 2008 should be an amount that is 
     equal to 125 percent of the amount appropriated for such 
     purpose during the preceding fiscal year.
       (3) Other funds.--Amounts authorized to be appropriated 
     under this section are in addition to amounts otherwise 
     available for such purposes.

     SEC. 232. PAKISTAN.

       (a) Findings.--Congress makes the following findings:
       (1) Since September 11, 2001, the Government of Pakistan 
     has been an important partner in helping the United States 
     remove the Taliban regime in Afghanistan and combating 
     international terrorism in the frontier provinces of 
     Pakistan.
       (2) There remain a number of critical issues that threaten 
     to disrupt the relationship between the United States and 
     Pakistan, undermine international security, and destabilize 
     Pakistan, including--
       (A) curbing the proliferation of nuclear weapons 
     technology;
       (B) combating poverty and corruption;
       (C) building effective government institutions, especially 
     secular public schools;
       (D) promoting democracy and rule of law, particularly at 
     the national level; and
       (E) effectively dealing with Islamic extremism.
       (b) Policy.--It is the policy of the United States--
       (1) to work with the Government of Pakistan to combat 
     international terrorism, especially in the frontier provinces 
     of Pakistan;
       (2) to establish a long-term strategic partnership with the 
     Government of Pakistan to address the issues described in 
     subparagraphs (A) through (E) of subsection (a)(2);
       (3) to dramatically increase funding for United States 
     Agency for International Development and Department of State 
     programs that assist Pakistan in addressing such issues, if 
     the Government of Pakistan demonstrates a commitment to 
     building a moderate, democratic state; and
       (4) to work with the international community to secure 
     additional financial and political support to effectively 
     implement the policies set forth in this subsection and help 
     to resolve the dispute between the Government of Pakistan and 
     the Government of India over the disputed territory of 
     Kashmir.
       (c) Strategy on Pakistan.--
       (1) Requirement for report on strategy.--Not later than 90 
     days after the date of enactment of this Act, the President 
     shall submit to the appropriate congressional committees a 
     report, in classified form if necessary, that describes the 
     long-term strategy of the United States to engage with the 
     Government of Pakistan to address the issues described in 
     subparagraphs (A) through (E) of subsection (a)(2) in order 
     accomplish the goal of building a moderate, democratic 
     Pakistan.
       (2) Appropriate congressional committees defined.--In this 
     subsection the term ``appropriate congressional committees'' 
     means the Committee on Appropriations and the Committee on 
     Foreign Relations in the Senate, and the Committee on 
     Appropriations and the Committee on International Relations 
     of the House of Representatives.
       (d) Nuclear Proliferation.--
       (1) Finding.--Congress finds that Pakistan's maintenance of 
     a global missile and nuclear proliferation network would be 
     inconsistent with Pakistan being considered an ally of the 
     United States.
       (2) Sense of congress.--It is the sense of Congress that 
     the national security interest of the United States will best 
     be served if the United States develops and implements a 
     long-term strategy to improve the United States relationship 
     with Pakistan and works with the Government of Pakistan to 
     stop nuclear proliferation.
       (3) Limitation on assistance to pakistan.--None of the 
     funds appropriated for a fiscal year to provide military or 
     economic assistance to the Government of Pakistan may be made 
     available for such purpose unless the President submits to 
     Congress for such fiscal year a certification that no 
     military or economic assistance provided by the United States 
     to the Government of Pakistan will be provided, either 
     directly or indirectly, to a person that is opposing or 
     undermining the efforts of the United States Government to 
     halt the proliferation of nuclear weapons.
       (e) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     the President for providing assistance for Pakistan for 
     fiscal year 2006--
       (A) for ``Development Assistance'', $50,000,000 to carry 
     out the provisions of section 103, 105, and 106 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2151a, 2151c, and 
     2151d,);
       (B) for the ``Child Survival and Health Programs Fund'', 
     $35,000,000 to carry out the provisions of sections 104 of 
     the Foreign Assistance Act of 1961 (22 U.S.C. 2151b);
       (C) for the ``Economic Support Fund'', $350,000,000 to 
     carry out the provisions of chapter 4 of part II of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2346 et seq.);
       (D) for ``International Narcotics and Law Enforcement'', 
     $50,000,000 to carry out the provisions of section 481 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2291);
       (E) for ``Nonproliferation, Anti-Terrorism, Demining, and 
     Related Programs'', $10,000,000;
       (F) for ``International Military Education and Training'', 
     $2,000,000 to carry out the provisions of section 541 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2347); and
       (G) for ``Foreign Military Financing Program'', 
     $300,000,000 grants to carry of the provision of section 23 
     of the Arms Export Control Act (22 U.S.C. 2763).
       (2) Other funds.--Amounts authorized to be appropriated 
     under this section are in addition to amounts otherwise 
     available for such purposes.

     SEC. 233. SAUDI ARABIA.

       (a) Findings.--Congress makes the following findings:
       (1) The Kingdom of Saudi Arabia has an uneven record in the 
     fight against terrorism, especially with respect to terrorist 
     financing, support for radical madrassas, and a lack of 
     political outlets for its citizens, that poses a threat to 
     the security of the United States, the international 
     community, and the Kingdom of Saudi Arabia itself.
       (2) The United States has a national security interest in 
     working with the Government of Saudi Arabia to combat 
     international terrorists that operate within that nation or 
     that operate outside Saudi Arabia with the support of 
     citizens of Saudi Arabia.

[[Page S163]]

       (3) In order to more effectively combat terrorism, the 
     Government of Saudi Arabia must undertake a number of 
     political and economic reforms, including increasing anti-
     terrorism operations conducted by law enforcement agencies, 
     providing more political rights to its citizens, increasing 
     the rights of women, engaging in comprehensive educational 
     reform, enhancing monitoring of charitable organizations, 
     promulgating and enforcing domestic laws and regulation on 
     terrorist financing.
       (b) Policy.--It is the policy of the United States--
       (1) to engage with the Government of Saudi Arabia to openly 
     confront the issue of terrorism, as well as other problematic 
     issues such as the lack of political freedoms, with the goal 
     of restructuring the relationship on terms that leaders of 
     both nations can publicly support;
       (2) to enhance counterterrorism cooperation with the 
     Government of Saudi Arabia, if the political leaders of such 
     Government are committed to making a serious, sustained 
     effort to combat terrorism; and
       (3) to support the efforts of the Government of Saudi 
     Arabia to make political, economic, and social reforms 
     throughout the country.
       (c) Strategy on Saudi Arabia.--
       (1) Requirement for report on strategy.--Not later than 90 
     days after the date of enactment of this Act, the President 
     shall submit to the appropriate congressional committees a 
     report, in classified form if necessary, that describes the 
     long-term strategy of the United States--
       (A) to engage with the Government of Saudi Arabia to 
     facilitate political, economic, and social reforms that will 
     enhance the ability of the Government of Saudi Arabia to 
     combat international terrorism; and
       (B) to effectively prevent the financing of terrorists in 
     Saudi Arabia.
       (2) Appropriate congressional committees defined.--In this 
     subsection the term ``appropriate congressional committees'' 
     means the Committee on Appropriations and the Committee on 
     Foreign Relations in the Senate, and the Committee on 
     Appropriations and the Committee on International Relations 
     of the House of Representatives.
  TITLE III--PROTECTION FROM TERRORIST ATTACKS THAT UTILIZE NUCLEAR, 
             CHEMICAL, BIOLOGICAL, AND RADIOLOGICAL WEAPONS
                 Subtitle A--Non-Proliferation Programs

     SEC. 301. REPEAL OF LIMITATIONS TO THREAT REDUCTION 
                   ASSISTANCE.

       Section 5 of S. 2980 of the 108th Congress (the ``Nunn-
     Lugar Cooperative Threat Reduction Act of 2004''), as 
     introduced on November 16, 2004, is hereby enacted into law.

     SEC. 302. REUSE OF RUSSIAN NUCLEAR FACILITIES.

       (a) In General.--The Secretary of Energy shall work with 
     the Minister of Atomic Energy of Russia to carry out a 
     program to close or convert to non-defense work one or more 
     nuclear weapons assembly and disassembly facilities in 
     Russia.
       (b) Designation of Facilities.--The Secretary of Energy and 
     Minister of Atomic Energy of Russia shall jointly designate 
     each facility to be covered by the program under subsection 
     (a).
       (c) Commissions To Provide Advice and Recommendations.--
       (1) In general.--Not later than two months after the 
     designation of a facility under subsection (b), the Secretary 
     of Energy shall establish a commission to provide advice and 
     recommendations on the closure or conversion of the facility 
     to non-defense work.
       (2) Commission membership.--Each commission established 
     under paragraph (1) shall consist of such personnel, 
     including Russian nationals, as the Secretary considers 
     appropriate for its work. The names of each member of each 
     commission shall be made public upon designation under this 
     paragraph.
       (3) Personnel matters.--
       (A) Compensation.--Each member of a commission established 
     under paragraph (1) who is not an officer or employee of the 
     Federal Government shall be compensated at a rate equal to 
     the daily equivalent of the annual rate of basic pay 
     prescribed for level IV of the Executive Schedule under 
     section 5315 of title 5, United States Code, for each day 
     (including travel time) during which such member is engaged 
     in the performance of the duties of such commission. All 
     members of a commission who are officers or employees of the 
     United States shall serve without compensation in addition to 
     that received for their services as officers or employees of 
     the United States.
       (B) Travel expenses.--The members of a commission 
     established under paragraph (1) shall be allowed travel 
     expenses, including per diem in lieu of subsistence, at rates 
     authorized for employees of agencies under subchapter I of 
     chapter 57 of title 5, United States Code, while away from 
     their homes or regular places of business in the performance 
     of services for such commission.
       (4) FACA.--The Federal Advisory Committee Act (5 U.S.C. 
     App.) shall not apply to any activities of a commission 
     established under paragraph (1).
       (5) Open meetings.--The meetings of any commission under 
     paragraph (1) shall, to the maximum extent practicable, be 
     open to the public.
       (d) Proposed Facility Reuse Plan.--
       (1) Requirement for proposed plan.--Not later than six 
     months after the designation of a facility under subsection 
     (b), the commission for the facility under subsection (c) 
     shall submit to the Secretary of Energy and the Minister of 
     Atomic Energy of Russia a proposed plan on the closure or 
     conversion of the facility to non-defense work.
       (2) Elements of proposed plan.--A proposed plan under 
     paragraph (1) may include one or more of the elements 
     specified in subsection (f).
       (3) Availability of proposed plan.--Any proposed plan 
     submitted under paragraph (1) shall be made public upon its 
     submittal.
       (e) Final Facility Reuse Plan.--
       (1) Requirement for final plan.--Not later than nine months 
     after receiving a proposed plan for a facility under 
     subsection (d), the Secretary of Energy and the Minister of 
     Atomic Energy of Russia shall jointly develop a final plan on 
     the closure or conversion of the facility to non-defense 
     work.
       (2) Elements of final plan.--A final plan for a facility 
     under paragraph (1) shall include the following:
       (A) Any of the elements specified in subsection (f).
       (B) Assurances of access to the facility necessary to carry 
     out the final plan.
       (C) Resolution of any matters relating to liability and 
     taxation.
       (D) An estimate of the costs of the United States, and of 
     Russia, under the final plan.
       (E) The commitment of Russia to pay at least 15 percent of 
     the costs of the final plan.
       (F) Milestones for the final plan, including a deadline for 
     the closure or conversion of the facility to non-defense 
     work.
       (G) Appropriate auditing and accounting mechanisms.
       (f) Plan Elements.--The plan for a facility under 
     subsection (d) or (e) may include one or more of the 
     following elements:
       (1) A retraining program for facility employees.
       (2) Economic incentives to attract and facilitate 
     commercial ventures in connection with the facility.
       (3) A site preparation plan.
       (4) Technical exchange and training programs.
       (5) The participation of a redevelopment manager and of 
     business, legal, financial, or other appropriate experts.
       (6) Promotional or marketing plans.
       (7) Provision for startup funds, loans, or grants, or other 
     venture capital or financing.
       (g) Limitation on Availability of Funds.--No amount 
     authorized to be appropriated by subsection (h) may be 
     available for a facility under the program established under 
     subsection (a) unless the deadlines for the preparation of 
     the proposed facility reuse plan for the facility under 
     subsection (d) and for the preparation of the final facility 
     reuse plan for the facility under subsection (e) are both 
     met.
       (h) Authorization of Appropriations.--
       (1) In general.--There is authorized to be appropriated to 
     the Department of Energy, $60,000,000 to carry out this 
     section, of which not more than $4,000,000 may be available 
     to each commission established under subsection (c).
       (2) Availability of funds.--The amount authorized to be 
     appropriated by paragraph (1) shall remain available until 
     expended.

     SEC. 303. RUSSIAN TACTICAL NUCLEAR WEAPONS.

       (a) Report Required.--Not later than six months after the 
     date of the enactment of this Act, the President shall submit 
     to Congress a report setting forth the following:
       (1) An assessment of the number, location, condition, and 
     security of Russian tactical nuclear weapons.
       (2) An assessment of the threat that would be posed by the 
     theft of Russian tactical nuclear weapons.
       (3) A plan for developing with Russia a cooperative program 
     to secure, consolidate, and, as appropriate, dismantle 
     Russian tactical nuclear weapons.
       (b) Program.--The Secretary of Defense and the Secretary of 
     Energy shall jointly work with Russia to establish a 
     cooperative program, based on the report under subsection 
     (a), to secure, consolidate, and, as appropriate, dismantle 
     Russian tactical nuclear weapons in order to achieve 
     reductions in the total number of Russian tactical nuclear 
     weapons.
       (c) Authorization of Appropriations.--
       (1) Department of defense.--There is authorized to be 
     appropriated for the Department of Defense, $25,000,000 to 
     carry out this section.
       (2) Department of energy.--There is authorized to be 
     appropriated for the Department of Energy, $25,000,000 to 
     carry out this section.

     SEC. 304. ADDITIONAL ASSISTANCE TO ACCELERATE NON-
                   PROLIFERATION PROGRAMS.

       (a) Authorization of Appropriations for the Department of 
     Defense.--There is authorized to be appropriated to the 
     Department of Defense $40,000,000 for fiscal year 2006 for 
     Cooperative Threat Reduction Activities as follows:
       (1) To accelerate security upgrades at warhead storage 
     sites located in Russia or another country of the former 
     Soviet Union, $15,000,000.
       (2) To accelerate security upgrades at warhead storage 
     sites located in countries other than the countries of the 
     former Soviet Union, $10,000,000.
       (3) To accelerate biological weapons proliferation 
     prevention programs in Kazakhstan, Georgia, and Uzbekiztan, 
     $15,000,000.
       (b) Authorization of Appropriations for the Department of 
     Energy.--There is

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     authorized to be appropriated to the Department of Energy 
     $95,000,000 for fiscal year 2006 for nonproliferation 
     activities of the National Nuclear Security Administration as 
     follows:
       (1) To accelerate the Global Threat Reduction Initiative, 
     $20,000,000.
       (2) To accelerate security upgrades at warhead storage 
     sites located in Russia or another country of the former 
     Soviet Union, $15,000,000.
       (3) To accelerate the closure of the plutonium producing 
     reactor at Zheleznogorsk, Russia as part of the program to 
     eliminate weapons grade plutonium production, $25,000,000.
       (4) To accelerate completion of comprehensive security 
     upgrades at Russian storage sites for weapons-usable nuclear 
     materials, $15,000,000.
       (c) Authorization of Appropriations for the Department of 
     State.--
       (1) In general.--There is authorized to be appropriated to 
     the Department of State $25,000,000 for fiscal year 2006 for 
     nonproliferation activities as follows:
       (A) To accelerate engagement of former chemical an 
     biological weapons scientists in Russia and the countries of 
     the former Soviet Union through the Bio-Chem Redirect 
     Program, $15,000,000.
       (B) To enhance efforts to combat bioterrorism by 
     transforming the for Soviet biological weapons research and 
     production facilities to commercial enterprises through the 
     BioIndustry Initiative, $10,000,000.
       (2) Availability of funds.--The amount authorized to be 
     appropriated by paragraph (1) shall remain available until 
     expended.

     SEC. 305. ADDITIONAL ASSISTANCE TO THE INTERNATIONAL ATOMIC 
                   ENERGY AGENCY.

       There is authorized to be appropriated to the Department of 
     Energy $20,000,000 to be used to provide technical and other 
     assistance to the International Atomic Energy Agency to 
     support nonproliferation programs. Such amount is in addition 
     to amounts otherwise available for such purpose.
                     Subtitle B--Border Protection

     SEC. 311. FINDINGS.

       Congress makes the following findings:
       (1) More than 500,000,000 people cross the borders of the 
     United States at legal points of entry each year, including 
     approximately 330,000,000 people who are not citizens of the 
     United States.
       (2) The National Commission on Terrorist Attacks Upon the 
     United States found that 15 of the 19 hijackers involved in 
     the September 11, 2001 terrorist attacks ``were potentially 
     vulnerable to interception by border authorities''.
       (3) Officials with the Bureau of Customs and Border 
     Protection and with the Bureau of Immigration and Customs 
     Enforcement have stated that there is a shortage of agents in 
     such Bureaus. Due to an inadequate budget, the Bureau of 
     Immigration and Customs Enforcement has effected a hiring 
     freeze since March 2004, and the Bureau has not made public 
     any plans to end this freeze.

     SEC. 312. HIRING AND TRAINING OF BORDER SECURITY PERSONNEL.

       (a) Inspectors and Agents.--
       (1) Increase in inspectors and agents.--During each of 
     fiscal years 2005 through 2008, the Under Secretary shall--
       (A) increase the number of full-time agents and associated 
     support staff in the Bureau of Immigration and Customs 
     Enforcement of the Department of Homeland Security by the 
     equivalent of at least 100 more than the number of such 
     employees in the Bureau as of the end of the preceding fiscal 
     year; and
       (B) increase the number of full-time inspectors and 
     associated support staff in the Bureau of Customs and Border 
     Protection by the equivalent of at least 200 more than the 
     number of such employees in the Bureau as of the end of the 
     preceding fiscal year.
       (2) Waiver of fte limitation.--The Under Secretary is 
     authorized to waive any limitation on the number of full-time 
     equivalent personnel assigned to the Department of Homeland 
     Security to fulfill the requirements of paragraph (1).
       (b) Training.--The Under Secretary shall provide 
     appropriate training for agents, inspectors, and associated 
     support staff on an ongoing basis to utilize new technologies 
     and to ensure that the proficiency levels of such personnel 
     are acceptable to protect the borders of the United States.
                     Subtitle C--Seaport Protection

     SEC. 321. FINDINGS.

       Congress makes the following findings:
       (1) The United States port system is a vital artery of the 
     economy of the United States. Almost 95 percent of all 
     foreign trade passes through one or more of the 361 ports in 
     the United States. Such seaports handle more than 
     2,000,000,000 tons of domestic and international freight each 
     year of which has a value of more than $740,000,000. The 
     shipment of cargo in vessels creates employment for 
     13,000,000 people within the United States.
       (2) The United States Coast Guard has estimated that, given 
     this tremendous commerce, a terrorist attack shutting down a 
     major port in the United States would have a $60,000,000 
     impact on the United States economy during the first 30 days 
     after such an attack.
       (3) Although 6,000,000 cargo containers, each a possible 
     hiding place for a bomb or other weapon, are off-loaded at 
     ports in the United States each year, less than \1/10\ of 
     these containers are physically inspected. A container ship 
     can carry as many as 3,000 containers, each one weighing up 
     to 45,000 pounds, hundreds of which may be off-loaded at a 
     port.
       (4) The United States Coast Guard has estimated that the 
     maritime security requirements set for ports by the Maritime 
     Transportation Security Act of 2002 (Public Law 107-295; 116 
     Stat. 2064), which are critical to protecting United States 
     ports from a nuclear terrorist attack, will cost 
     $5,400,000,000 to implement over a 10-year period.

     SEC. 322. PORT SECURITY GRANT FUNDING.

       Section 70107(h) of title 46, United States Code, is 
     amended to read as follows:
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary to carry out 
     subsections (a) through (g)--
       ``(1) $500,000,000 for fiscal year 2006;
       ``(2) $750,000,000 for fiscal year 2007;
       ``(3) $1,000,000,000 for fiscal year 2008;
       ``(4) $1,250,000,000 for fiscal year 2009; and
       ``(5) such sums as may be needed for each fiscal year after 
     fiscal year 2009.''.

     SEC. 323. DEPLOYMENT OF RADIATION DETECTION PORTAL EQUIPMENT; 
                   INTEGRATED CARGO INSPECTION SYSTEM.

       (a) In General.--Subtitle C of title IV of the Homeland 
     Security Act of 2002 (6 U.S.C. 231 et seq.) is amended by 
     adding at the end the following new section:

     ``SEC. 431. DETECTION OF NUCLEAR MATERIAL AT UNITED STATES 
                   SEAPORTS.

       ``(a) Deployment of Radiation Detection Portal Equipment.--
       ``(1) Deployment.--Not later than September 30, 2006, the 
     Undersecretary for Border and Transportation Security shall 
     deploy radiation detection portal equipment at all United 
     States seaports, other United States ports of entry, and 
     major facilities as determined by the Undersecretary.
       ``(2) Report.--Not later than December 31, 2005, the 
     Undersecretary shall submit to the appropriate congressional 
     committees a report on the implementation of the requirement 
     under paragraph (1).
       ``(3) Authorization of appropriations.--There is authorized 
     to be appropriated to the Undersecretary $217,000,000 for 
     fiscal year 2006 to carry out this subsection.
       ``(b) Integrated Cargo Inspection System.--
       ``(1) Plan.--The Undersecretary for Border and 
     Transportation Security shall develop a plan to integrate 
     radiation detection portal equipment with gamma-ray 
     inspection technology equipment at United States seaports and 
     foreign seaports that are participating the Container 
     Security Initiative in order to facilitate the detection of 
     nuclear weapons in maritime cargo containers. Such plan shall 
     include methods for automatic identification of containers 
     and vehicles for inspection in a timely manner and a data 
     sharing network capable of transmitting gamma-ray images and 
     cargo data among relevant ports and the National Targeting 
     Center of the Bureau of Customs and Border Protection.
       ``(2) Report.--Not later than 180 days after the date of 
     the enactment of the Targeting Terrorists More Effectively 
     Act of 2005, the Undersecretary for Border and Transportation 
     Security shall prepare and submit to the appropriate 
     congressional committees a report that contains--
       ``(A) a description of the plan developed under paragraph 
     (1), including any infrastructure improvements required at 
     the seaports involved;
       ``(B) an estimate of the costs associated with 
     implementation of the plan; and
       ``(C) an estimate of the timeframe for implementation of 
     the plan.''.

     SEC. 324. ACCELERATION OF THE MEGAPORTS INITIATIVE.

       (a) Deployment.--Not later than September 30, 2007, the 
     Administrator of the National Nuclear Security Administration 
     shall--
       (1) complete agreements under the Megaports Initiative of 
     the Office of International Material Protection and 
     Cooperation with each country that possesses one or more of 
     the world's twenty largest seaports, as defined by volume of 
     maritime cargo traffic; and
       (2) deploy radiation portal monitoring equipment to each 
     seaport operating under an agreement described in subsection 
     (a)(1).
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Administrator such funds as are 
     necessary to carry out the provisions of this section.

     SEC. 325. TANKER SECURITY INITIATIVE.

       (a) Establishment.--The Secretary of Homeland Security 
     shall establish a Tanker Security Initiative to promulgate 
     and enforce standards and carry out activities to ensure that 
     tanker vessels that transport oil, natural gas, or other 
     materials are not used by terrorists or as carriers of 
     weapons of mass destruction.
       (b) Elements.--To carry out the Tanker Security Initiative 
     the Secretary of Homeland Security may--
       (1) develop physical standards intended to prevent 
     terrorists from placing a weapon of mass destruction in or on 
     a tanker vessel without detection;
       (2) develop detection equipment, and prescribe the use of 
     such equipment, to be employed on a tanker vessel that is 
     bound for a United States port of entry;
       (3) develop new security inspection procedures required to 
     be carried out on a tanker vessel at a foreign port of 
     embarkation, on

[[Page S165]]

     the high seas, or in United States waters prior to the 
     arrival of such tanker at a United States port of entry;
       (4) carry out research and development of sensing devices 
     to detect any nuclear device that is placed in or on a tanker 
     vessel; and
       (5) provide assistance to a foreign country to assist such 
     country in carrying out any provisions of the Tanker Security 
     Initiative.
       (c) Report.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of Homeland Security 
     shall submit to Congress a report that includes--
       (1) a description of the terrorism risks posed by tanker 
     vessels:
       (2) the elements of the Tanker Security Initiative 
     developed to combat such risks;
       (3) a proposed budget describing the resources needed to 
     carry out the Tanker Security Initiative during the 3-year 
     period beginning on the date of the enactment of this Act; 
     and
       (4) any proposal for legislation that the Secretary 
     determines would address effectively such risks.
                      Subtitle D--First Responders

     SEC. 331. FINDINGS.

       Congress makes the following findings:
       (1) In a report entitled ``Emergency First Responders: 
     Drastically Underfunded, Dangerously Unprepared'', an 
     independent task force sponsored by the Council on Foreign 
     Relations found that ``America's local emergency responders 
     will always be the first to confront a terrorist incident and 
     will play the central role in managing its immediate 
     consequences. Their efforts in the first minutes and hours 
     following an attack will be critical to saving lives, 
     establishing order, and preventing mass panic. The United 
     States has both a responsibility and a critical need to 
     provide them with the equipment, training, and other 
     resources necessary to do their jobs safely and 
     effectively.''.
       (2) The task force further concluded that many state and 
     local emergency responders, including police officers and 
     firefighters, lack the equipment and training needed to 
     respond effectively to a terrorist attack involving weapons 
     of mass destruction.
       (3) The Federal Government has a responsibility to ensure 
     that the people of the United States are protected to the 
     greatest possible extent against a terrorist attack, 
     especially an attack that utilizes nuclear, chemical, 
     biological, or radiological weapons, and consequently, the 
     Federal Government has a critical responsibility to address 
     the equipment, training, and other needs of State and local 
     first responders.

     SEC. 332. RESTORATION OF JUSTICE ASSISTANCE FUNDING.

       (a) Findings.--Congress makes the following findings:
       (1) State and local police officers, firefighters, and 
     emergency responders play an essential role in the efforts of 
     the United States to prevent terrorist attacks and, if an 
     attack occurred, to address the effects of the attack.
       (2) An independent task force has concluded that hundreds 
     of local police offices and firefighting and emergency 
     response units throughout the United States are unprepared 
     for responding to a terrorist attack involving nuclear, 
     chemical, biological, or radiological weapons.
       (3) The Edward Byrne Memorial Justice Assistance Grant 
     Program provides critical Federal support for personnel, 
     equipment, training, and technical assistance for the 
     homeland security responsibilities of local law enforcement 
     offices.
       (4) The Consolidated Appropriations Act, 2005 (Public Law 
     108-447) appropriated funding for the Edward Byrne Memorial 
     Justice Assistance Grant Program, a program that resulted 
     from the combination of the Edward Byrne Memorial Grant 
     Program and the Local Law Enforcement Block Grant Program.
       (5) Funding for the Edward Byrne Memorial Justice 
     Assistance Grant Program, as provided in the Consolidated 
     Appropriations Act, 2005, has been reduced by nearly 50 
     percent since fiscal year 2002.
       (b) Sense of Congress.--It is the sense of Congress that 
     the President should request in the annual budget proposal, 
     and Congress should appropriate, the full amount authorized 
     to be appropriated in subsection (c).
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated for the Edward Byrne Memorial Justice 
     Assistance Grant Program--
       (1) for fiscal year 2006, $1,250,000,000;
       (2) for fiscal year 2007, $1,400,000,000; and
       (3) for fiscal year 2008, $1,600,000,000.

     SEC. 333. PROVIDING RELIABLE OFFICERS, TECHNOLOGY, EDUCATION, 
                   COMMUNITY PROSECUTORS, AND TRAINING IN OUR 
                   NEIGHBORHOOD INITIATIVE.

       (a) COPS Program.--Section 1701(a) of title I of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3796dd(a)) is amended by--
       (1) inserting ``and prosecutor'' after ``increase police''; 
     and
       (2) inserting ``to enhance law enforcement access to new 
     technologies, and'' after ``presence,''.
       (b) Hiring and Redeployment Grant Projects.--Section 
     1701(b) of title I of the Omnibus Crime Control and Safe 
     Streets Act of 1968 (42 U.S.C. 3796dd(b)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (B)--
       (i) by inserting after ``Nation'' the following: ``, or pay 
     overtime to existing career law enforcement officers to the 
     extent that such overtime is devoted to community policing 
     efforts''; and
       (ii) by striking ``and'' at the end;
       (B) in subparagraph (C), by--
       (i) striking ``or pay overtime''; and
       (ii) striking the period at the end and inserting ``; 
     and''; and
       (C) by adding at the end the following:
       ``(D) promote higher education among in-service State and 
     local law enforcement officers by reimbursing them for the 
     costs associated with seeking a college or graduate school 
     education.''; and
       (2) in paragraph (2) by striking all that follows ``Support 
     Systems.--'' and inserting ``Grants pursuant to--
       ``(A) paragraph (1)(B) for overtime may not exceed 25 
     percent of the funds available for grants pursuant to this 
     subsection for any fiscal year;
       ``(B) paragraph (1)(C) may not exceed 20 percent of the 
     funds available for grants pursuant to this subsection in any 
     fiscal year; and
       ``(C) paragraph (1)(D) may not exceed 5 percent of the 
     funds available for grants pursuant to this subsection for 
     any fiscal year.''.
       (c) Additional Grant Projects.--Section 1701(d) of title I 
     of the Omnibus Crime Control and Safe Streets Act of 1968 (42 
     U.S.C. 3796dd(d)) is amended--
       (1) in paragraph (2)--
       (A) by inserting ``integrity and ethics'' after 
     ``specialized''; and
       (B) by inserting ``and'' after ``enforcement officers'';
       (2) in paragraph (7) by inserting ``school officials, 
     religiously-affiliated organizations,'' after ``enforcement 
     officers'';
       (3) by striking paragraph (8) and inserting the following:
       ``(8) establish school-based partnerships between local law 
     enforcement agencies and local school systems, by using 
     school resource officers who operate in and around elementary 
     and secondary schools to serve as a law enforcement liaison 
     with other Federal, State, and local law enforcement and 
     regulatory agencies, combat school-related crime and disorder 
     problems, gang membership and criminal activity, firearms and 
     explosives-related incidents, illegal use and possession of 
     alcohol, and the illegal possession, use, and distribution of 
     drugs;'';
       (4) in paragraph (10) by striking ``and'' at the end;
       (5) in paragraph (11) by striking the period that appears 
     at the end and inserting ``; and''; and
       (6) by adding at the end the following:
       ``(12) develop and implement innovative programs (such as 
     the TRIAD program) that bring together a community's sheriff, 
     chief of police, and elderly residents to address the public 
     safety concerns of older citizens.''.
       (d) Technical Assistance.--Section 1701(f) of title I of 
     the Omnibus Crime Control and Safe Streets Act of 1968 (42 
     U.S.C. 3796dd(f)) is amended--
       (1) in paragraph (1)--
       (A) by inserting ``use up to 5 percent of the funds 
     appropriated under subsection (a) to'' after ``The Attorney 
     General may'';
       (B) by inserting at the end the following: ``In addition, 
     the Attorney General may use up to 5 percent of the funds 
     appropriated under subsections (d), (e), and (f) for 
     technical assistance and training to States, units of local 
     government, Indian tribal governments, and to other public 
     and private entities for those respective purposes.'';
       (2) in paragraph (2) by inserting ``under subsection (a)'' 
     after ``the Attorney General''; and
       (3) in paragraph (3)--
       (A) by striking ``the Attorney General may'' and inserting 
     ``the Attorney General shall'';
       (B) by inserting ``regional community policing institutes'' 
     after ``operation of''; and
       (C) by inserting ``representatives of police labor and 
     management organizations, community residents,'' after 
     ``supervisors,''.
       (e) Technology and Prosecution Programs.--Section 1701 of 
     title I of the Omnibus Crime Control and Safe Streets Act of 
     1968 (42 U.S.C. 3796dd) is amended by--
       (1) striking subsection (k);
       (2) redesignating subsections (f) through (j) as 
     subsections (g) through (k); and
       (3) striking subsection (e) and inserting the following:
       ``(e) Law Enforcement Technology Program.--Grants made 
     under subsection (a) may be used to assist police 
     departments, in employing professional, scientific, and 
     technological advancements that will help them--
       ``(1) improve police communications through the use of 
     wireless communications, computers, software, videocams, 
     databases and other hardware and software that allow law 
     enforcement agencies to communicate more effectively across 
     jurisdictional boundaries and effectuate interoperability;
       ``(2) develop and improve access to crime solving 
     technologies, including DNA analysis, photo enhancement, 
     voice recognition, and other forensic capabilities; and
       ``(3) promote comprehensive crime analysis by utilizing new 
     techniques and technologies, such as crime mapping, that 
     allow law enforcement agencies to use real-time crime and 
     arrest data and other related information--including non-
     criminal justice data--to improve their ability to analyze, 
     predict, and respond pro-actively to local crime and disorder 
     problems, as well as to engage in regional crime analysis.

[[Page S166]]

       ``(f) Community-Based Prosecution Program.--Grants made 
     under subsection (a) may be used to assist State, local or 
     tribal prosecutors' offices in the implementation of 
     community-based prosecution programs that build on local 
     community policing efforts. Funds made available under this 
     subsection may be used to--
       ``(1) hire additional prosecutors who will be assigned to 
     community prosecution programs, including programs that 
     assign prosecutors to handle cases from specific geographic 
     areas, to address specific violent crime and other local 
     crime problems (including intensive illegal gang, gun and 
     drug enforcement projects and quality of life initiatives), 
     and to address localized violent and other crime problems 
     based on needs identified by local law enforcement agencies, 
     community organizations, and others;
       ``(2) redeploy existing prosecutors to community 
     prosecution programs as described in paragraph (1) of this 
     section by hiring victim and witness coordinators, 
     paralegals, community outreach, and other such personnel; and
       ``(3) establish programs to assist local prosecutors' 
     offices in the implementation of programs that help them 
     identify and respond to priority crime problems in a 
     community with specifically tailored solutions.

     At least 75 percent of the funds made available under this 
     subsection shall be reserved for grants under paragraphs (1) 
     and (2) and of those amounts no more than 10 percent may be 
     used for grants under paragraph (2) and at least 25 percent 
     of the funds shall be reserved for grants under paragraphs 
     (1) and (2) to units of local government with a population of 
     less than 50,000.''.
       (f) Retention Grants.--Section 1703 of title I of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3796dd-2) is amended by inserting at the end the following:
       ``(d) Retention Grants.--The Attorney General may use no 
     more than 50 percent of the funds under subsection (a) to 
     award grants targeted specifically for retention of police 
     officers to grantees in good standing, with preference to 
     those that demonstrate financial hardship or severe budget 
     constraint that impacts the entire local budget and may 
     result in the termination of employment for police officers 
     funded under subsection (b)(1).''.
       (g) Definitions.--
       (1) Career law enforcement officer.--Section 1709(1) of 
     title I of the Omnibus Crime Control and Safe Streets Act of 
     1968 (42 U.S.C. 3796dd-8) is amended by inserting after 
     ``criminal laws'' the following: ``including sheriffs 
     deputies charged with supervising offenders who are released 
     into the community but also engaged in local community 
     policing efforts.''.
       (2) School resource officer.--Section 1709(4) of title I of 
     the Omnibus Crime Control and Safe Streets Act of 1968 (42 
     U.S.C. 3796dd-8) is amended--
       (A) by striking subparagraph (A) and inserting the 
     following:
       ``(A) to serve as a law enforcement liaison with other 
     Federal, State, and local law enforcement and regulatory 
     agencies, to address and document crime and disorder problems 
     including gangs and drug activities, firearms and explosives-
     related incidents, and the illegal use and possession of 
     alcohol affecting or occurring in or around an elementary or 
     secondary school;'';
       (B) by striking subparagraph (E) and inserting the 
     following:
       ``(E) to train students in conflict resolution, restorative 
     justice, and crime awareness, and to provide assistance to 
     and coordinate with other officers, mental health 
     professionals, and youth counselors who are responsible for 
     the implementation of prevention/intervention programs within 
     the schools;''; and
       (C) by adding at the end the following:
       ``(H) to work with school administrators, members of the 
     local parent teacher associations, community organizers, law 
     enforcement, fire departments, and emergency medical 
     personnel in the creation, review, and implementation of a 
     school violence prevention plan;
       ``(I) to assist in documenting the full description of all 
     firearms found or taken into custody on school property and 
     to initiate a firearms trace and ballistics examination for 
     each firearm with the local office of the Bureau of Alcohol, 
     Tobacco, and Firearms;
       ``(J) to document the full description of all explosives or 
     explosive devices found or taken into custody on school 
     property and report to the local office of the Bureau of 
     Alcohol, Tobacco, and Firearms; and
       ``(K) to assist school administrators with the preparation 
     of the Department of Education, Annual Report on State 
     Implementation of the Gun-Free Schools Act which tracks the 
     number of students expelled per year for bringing a weapon, 
     firearm, or explosive to school.''.
       (h) Authorization of Appropriations.--Section 1001(a)(11) 
     of title I of the Omnibus Crime Control and Safe Streets Act 
     of 1968 (42 U.S.C. 3793(a)(11)) is amended--
       (1) by amending subparagraph (A) to read as follows:
       ``(A) There are authorized to be appropriated to carry out 
     part Q, to remain available until expended--
       ``(i) $1,150,000,000 for fiscal year 2006;
       ``(ii) $1,150,000,000 for fiscal year 2007;
       ``(iii) $1,150,000,000 for fiscal year 2008;
       ``(iv) $1,150,000,000 for fiscal year 2009;
       ``(v) $1,150,000,000 for fiscal year 2010; and
       ``(vi) $1,150,000,000 for fiscal year 2011.''; and
       (2) in subparagraph (B)--
       (A) by striking ``3 percent'' and inserting ``5 percent'';
       (B) by striking ``1701(f)'' and inserting ``1701(g)'';
       (C) by striking the second sentence and inserting ``Of the 
     remaining funds, if there is a demand for 50 percent of 
     appropriated hiring funds, as determined by eligible hiring 
     applications from law enforcement agencies having 
     jurisdiction over areas with populations exceeding 150,000, 
     no less than 50 percent shall be allocated for grants 
     pursuant to applications submitted by units of local 
     government or law enforcement agencies having jurisdiction 
     over areas with populations exceeding 150,000 or by public 
     and private entities that serve areas with populations 
     exceeding 150,000, and no less than 50 percent shall be 
     allocated for grants pursuant to applications submitted by 
     units of local government or law enforcement agencies having 
     jurisdiction over areas with populations less than 150,000 or 
     by public and private entities that serve areas with 
     populations less than 150,000.'';
       (D) by striking ``85 percent'' and inserting 
     ``$600,000,000''; and
       (E) by striking ``1701(b),'' and all that follows through 
     ``of part Q'' and inserting the following: ``1701 (b) and 
     (c), $350,000,000 to grants for the purposes specified in 
     section 1701(e), and $200,000,000 to grants for the purposes 
     specified in section 1701(f).''.

     SEC. 334. FIRST RESPONDERS ANTI-TERRORISM PARTNERSHIP.

       (a) Definitions.--In this section:
       (1) Indian tribe.--The term ``Indian tribe'' has the same 
     meaning as in section 4(e) of the Indian Self-Determination 
     and Education Assistance Act (25 U.S.C. 450b(e)).
       (2) Law enforcement officer.--The term ``law enforcement 
     officer'' means any officer, agent, or employee of a State, 
     unit of local government, public or private college or 
     university, or Indian tribe authorized by law or by a 
     government agency to engage in or supervise the prevention, 
     detection, or investigation of any violation of criminal law, 
     or authorized by law to supervise sentenced criminal 
     offenders.
       (3) Public safety officer.--The term ``public safety 
     officer'' means any person serving a public or private agency 
     with or without compensation as a law enforcement officer, as 
     a firefighter, or as a member of a rescue squad or ambulance 
     crew.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Homeland Security.
       (5) State.--The term ``State'' means each of the 50 States, 
     the District of Columbia, and the Commonwealth of Puerto 
     Rico.
       (6) Unit of local government.--The term ``unit of local 
     government'' means a county, municipality, town, township, 
     village, parish, borough, or other unit of general government 
     below the State level.
       (b) First Responders Partnership Grant Program for Public 
     Safety Officers.--
       (1) In general.--The Secretary is authorized to make grants 
     to States, units of local government, and Indian tribes to 
     support public safety officers in their efforts to protect 
     homeland security and prevent and respond to acts of 
     terrorism.
       (2) Use of funds.--Grants awarded under this section shall 
     be--
       (A) distributed directly to the State, unit of local 
     government, or Indian tribe; and
       (B) used to fund overtime expenses, equipment, training, 
     and facilities to support public safety officers in their 
     efforts to protect homeland security and prevent and respond 
     to acts of terrorism.
       (3) Allocation and distribution of funds.--
       (A) Set-aside for indian tribes.--
       (i) In general.--The Secretary shall reserve 1 percent of 
     the amount appropriated for grants pursuant to this section 
     to be used for grants to Indian tribes.
       (ii) Selection of indian tribes.--

       (I) In general.--The Secretary shall award grants under 
     this paragraph to Indian tribes on the basis of a competition 
     conducted pursuant to specific criteria.
       (II) Rulemaking.--The criteria under subclause (I) shall be 
     contained in a regulation promulgated by the Secretary after 
     notice and public comment.

       (B) Set-aside for rural states.--
       (i) In general.--The Secretary shall reserve 5 percent of 
     the amount appropriated for grants pursuant to this section 
     to be used for grants to rural States.
       (ii) Selection of rural states.--The Secretary shall award 
     grants under this subparagraph to rural States (as defined in 
     section 1501(b) of the Omnibus Crime Control and Safe Streets 
     Act of 1968 (42 U.S.C. 3796bb(b))).
       (C) Minimum amount.--The Secretary shall allocate, from the 
     total amount appropriated for grants to States under this 
     subsection--
       (i) not less than 0.75 percent for each State; and
       (ii) not less than 0.25 percent for American Samoa, Guam, 
     the Northern Mariana Islands, and the United States Virgin 
     Islands, respectively.
       (D) Allocation to metropolitan cities and urban counties.--
     The balance of the total amount appropriated for grants to 
     States under this subsection after allocations have been made 
     to Indian tribes, rural States, and the minimum amount to 
     each State pursuant to subparagraphs (A) through

[[Page S167]]

     (C), shall be allocated by the Secretary to metropolitan 
     cities and urban counties pursuant to subparagraphs (E) and 
     (F).
       (E) Computation of amount allocated to metropolitan 
     cities.--
       (i) Computation ratios.--The Secretary shall determine the 
     amount to be allocated to each metropolitan city, which shall 
     bear the same ratio to the allocation for all metropolitan 
     cities as the weighted average of--

       (I) the population of the metropolitan city divided by the 
     population of all metropolitan cities;
       (II) the potential chemical security risk of the 
     metropolitan city divided by the potential chemical security 
     risk of all metropolitan cities;
       (III) the proximity of the metropolitan city to the nearest 
     operating nuclear power plant compared to the proximity of 
     all metropolitan cities to the nearest operating nuclear 
     power plant to each such city;
       (IV) the proximity of the metropolitan cities to the 
     nearest United States land or water port compared with the 
     proximity of all metropolitan cities to the nearest United 
     States land or water port to each such city;
       (V) the proximity of the metropolitan city to the nearest 
     international border compared with the proximity of all 
     metropolitan cities to the nearest international border to 
     each such city; and
       (VI) the proximity of the metropolitan city to the nearest 
     Disaster Medical Assistance Team (referred to in this 
     subsection as ``DMAT'') compared with the proximity of all 
     metropolitan cities to the nearest DMAT to each such city.

       (ii) Clarification of computation ratios.--

       (I) Relative weight of factor.--In determining the average 
     of the ratios under clause (i), the ratio involving 
     population shall constitute 50 percent of the formula in 
     calculating the allocation and the remaining factors shall be 
     equally weighted.
       (II) Potential chemical security risk.--If a metropolitan 
     city is within the vulnerable zone of a worst-case chemical 
     release (as specified in the most recent risk management 
     plans filed with the Environmental Protection Agency, or 
     another instrument developed by the Environmental Protection 
     Agency or the Homeland Security Department that captures the 
     same information for the same facilities), the ratio under 
     clause (i)(II) shall be 1 divided by the total number of 
     metropolitan cities that are within such a zone.
       (III) Proximity as it pertains to nuclear security.--If a 
     metropolitan city is located within 50 miles of an operating 
     nuclear power plant (as identified by the Nuclear Regulatory 
     Commission), the ratio under clause (i)(III) shall be 1 
     divided by the total number of metropolitan cities, not to 
     exceed 100, which are located within 50 miles of an operating 
     nuclear power plant.
       (IV) Proximity as it pertains to port security.--If a 
     metropolitan city is located within 50 miles of 1 of the 100 
     largest United States ports (as stated by the Department of 
     Transportation, Bureau of Transportation Statistics, United 
     States Port Report by All Land Modes), or within 50 miles of 
     1 of the 30 largest United States water ports by metric tons 
     and value (as stated by the Department of Transportation, 
     Maritime Administration, United States Foreign Waterborne 
     Transportation Statistics), the ratio under clause (i)(IV) 
     shall be 1 divided by the total number of metropolitan cities 
     that are located within 50 miles of a United States land or 
     water port.
       (V) Proximity to international border.--If a metropolitan 
     city is located within 50 miles of an international border, 
     the ratio under clause (i)(V) shall be 1 divided by the total 
     number of metropolitan cities that are located within 50 
     miles of an international border.
       (VI) Proximity to disaster medical assistance team.--If a 
     metropolitan city is located within 50 miles of a DMAT, as 
     organized by the National Disaster Medical System, the ratio 
     under clause (i)(VI) shall be 1 divided by the total number 
     of metropolitan cities that are located within 50 miles of a 
     DMAT.

       (F) Computation of amount allocated to urban counties.--
       (i) Computation ratios.--The Secretary shall determine the 
     amount to be allocated to each urban county, which shall bear 
     the same ratio to the allocation for all urban counties as 
     the weighted average of--

       (I) the population of the urban county divided by the 
     population of all urban counties;
       (II) the potential chemical security risk of the urban 
     county divided by the potential chemical security risk of all 
     urban counties;
       (III) the proximity of the urban county to the nearest 
     operating nuclear power plant compared to the proximity of 
     all urban counties to the nearest operating nuclear power 
     plant to each such county;
       (IV) the proximity of the urban counties to the nearest 
     United States land or water port compared with the proximity 
     of all urban counties to the nearest United States land or 
     water port to each such county;
       (V) the proximity of the urban county to the nearest 
     international border compared with the proximity of all urban 
     counties to the nearest international border to each such 
     county; and
       (VI) the proximity of the urban county to the nearest 
     Disaster Medical Assistance Team compared with the proximity 
     of all urban counties to the nearest DMAT to each such 
     county.

       (ii) Clarification of computation ratios.--

       (I) Relative weight of factor.--In determining the average 
     of the ratios under clause (i), the ratio involving 
     population shall constitute 50 percent of the formula in 
     calculating the allocation and the remaining factors shall be 
     equally weighted.
       (II) Potential chemical security risk.--If an urban county 
     is within the vulnerable zone of a worst-case chemical 
     release (as specified in the most recent risk management 
     plans filed with the Environmental Protection Agency, or 
     another instrument developed by the Environmental Protection 
     Agency or the Homeland Security Department that captures the 
     same information for the same facilities), the ratio under 
     clause (i)(II) shall be 1 divided by the total number of 
     urban counties that are within such a zone.
       (III) Proximity as it pertains to nuclear security.--If an 
     urban county is located within 50 miles of an operating 
     nuclear power plant (as identified by the Nuclear Regulatory 
     Commission), the ratio under clause (i)(III) shall be 1 
     divided by the total number of urban counties, not to exceed 
     100, which are located within 50 miles of an operating 
     nuclear power plant.
       (IV) Proximity as it pertains to port security.--If an 
     urban county is located within 50 miles of 1 of the 100 
     largest United States ports (as stated by the Department of 
     Transportation, Bureau of Transportation Statistics, United 
     States Port Report by All Land Modes), or within 50 miles of 
     1 of the 30 largest United States water ports by metric tons 
     and value (as stated by the Department of Transportation, 
     Maritime Administration, United States Foreign Waterborne 
     Transportation Statistics), the ratio under clause (i)(IV) 
     shall be 1 divided by the total number of urban counties that 
     are located within 50 miles of a United States land or water 
     port.
       (V) Proximity to international border.--If an urban county 
     is located within 50 miles of an international border, the 
     ratio under clause (i)(V) shall be 1 divided by the total 
     number of urban counties that are located within 50 miles of 
     an international border.
       (VI) Proximity to disaster medical assistance team.--If an 
     urban county is located within 50 miles of a DMAT, as 
     organized by the National Disaster Medical System, the ratio 
     under clause (i)(VI) shall be 1 divided by the total number 
     of urban counties that are located within 50 miles of a DMAT.

       (G) Exclusions.--
       (i) In general.--In computing amounts or exclusions under 
     subparagraph (F) with respect to any urban county, units of 
     general local government located in the county shall be 
     excluded if the populations of such units are not counted to 
     determine the eligibility of the urban county to receive a 
     grant under this paragraph.
       (ii) Independent cities.--

       (I) In general.--In computing amounts under clause (i), 
     there shall be included any independent city (as defined by 
     the Bureau of the Census) which--

       (aa) is not part of any county;
       (bb) is not eligible for a grant;
       (cc) is contiguous to the urban county;
       (dd) has entered into cooperation agreements with the urban 
     county which provide that the urban county is to undertake or 
     to assist in the undertaking of essential community 
     development and housing assistance activities with respect to 
     such independent city; and
       (ee) is not included as a part of any other unit of general 
     local government for purposes of this section.

       (II) Limitation.--Any independent city that is included in 
     the computation under subclause (I) shall not be eligible to 
     receive assistance under this paragraph for the fiscal year 
     for which such computation is used to allocate such 
     assistance.

       (H) Inclusion.--
       (i) Local government straddling county line.--In computing 
     amounts or exclusions under subparagraph (F) with respect to 
     any urban county, all of the area of any unit of local 
     government shall be included, which is part of, but is not 
     located entirely within the boundaries of, such urban county 
     if--

       (I) the part of such unit of local government that is 
     within the boundaries of such urban county would otherwise be 
     included in computing the amount for such urban county under 
     this subsection; and
       (II) the part of such unit of local government that is not 
     within the boundaries of such urban county is not included as 
     a part of any other unit of local government for the purpose 
     of this subsection.

       (ii) Use of grant funds outside urban county.--Any amount 
     received under this section by an urban county described 
     under clause (i) may be used with respect to the part of such 
     unit of local government that is outside the boundaries of 
     such urban county.
       (I) Population.--
       (i) Effect of consolidation.--Where data are available, the 
     amount to be allocated to a metropolitan city that has been 
     formed by the consolidation of 1 or more metropolitan cities 
     within an urban county shall be equal to the sum of the 
     amounts that would have been allocated to the urban county or 
     cities and the balance of the consolidated government if such 
     consolidation had not occurred.
       (ii) Limitation.--Clause (i) shall apply only to a 
     consolidation that--

[[Page S168]]

       (I) included all metropolitan cities that received grants 
     under this section for the fiscal year preceding such 
     consolidation and that were located within the urban county;
       (II) included the entire urban county that received a grant 
     under this section for the fiscal year preceding such 
     consolidation; and
       (III) took place on or after January 1, 2005.

       (iii) Growth rate.--The population growth rate of all 
     metropolitan cities defined in this section shall be based on 
     the population of metropolitan cities other than consolidated 
     governments the grant for which is determined under this 
     paragraph and cities that were metropolitan cities before 
     their incorporation into consolidated governments.
       (4) Maximum amount per grantee.--
       (A) In general.--A qualifying State, unit of local 
     government, or Indian tribe may not receive more than 5 
     percent of the total amount appropriated for grants under 
     this section.
       (B) Aggregate amount per state.--A State, together with the 
     grantees within the State, may not receive more than 20 
     percent of the total amount appropriated for grants under 
     this section.
       (5) Matching funds.--
       (A) In general.--The portion of the costs of a program 
     provided by a grant under paragraph (1) may not exceed 90 
     percent.
       (B) Waiver.--If the Secretary determines that a grantee is 
     experiencing fiscal hardship, the Secretary may waive, in 
     whole or in part, the matching requirement under subparagraph 
     (A).
       (C) Exception.--Any funds appropriated by Congress for the 
     activities of any agency of an Indian tribal government or 
     the Bureau of Indian Affairs performing law enforcement 
     functions on any Indian lands may be used to provide the non-
     Federal share of a matching requirement under subparagraph 
     (A).
       (c) Applications.--
       (1) In general.--To request a grant under this section, the 
     chief executive of a State, unit of local government, or 
     Indian tribe shall submit an application to the Secretary in 
     such form and containing such information as the Secretary 
     may reasonably require.
       (2) Regulations.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall promulgate 
     regulations to implement this subsection (including the 
     information that must be included and the requirements that 
     the States, units of local government, and Indian tribes must 
     meet) in submitting the applications required under this 
     subsection.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated $5,000,000,000 for fiscal year 2006 to 
     carry out this section.
                     TITLE IV--PROTECTING TAXPAYERS

     SEC. 401. REPORTS ON METRICS FOR MEASURING SUCCESS IN GLOBAL 
                   WAR ON TERRORISM.

       (a) Requirement for Reports.--The Comptroller General of 
     the United States shall submit to Congress reports on the 
     metrics for use in tracking and measuring acts of global 
     terrorism, international counterterrorism efforts, and the 
     success of United States counterterrorism policies and 
     practices including specific, replicable definitions, 
     criteria, and standards of measurement to be used for the 
     following:
       (A) Counting and categorizing acts of international 
     terrorism.
       (B) Monitoring counterterrorism efforts of foreign 
     governments.
       (C) Monitoring financial support provided to terrorist 
     groups.
       (D) Assessing the success of United States counterterrorism 
     policies and practices.
       (b) Schedule of Reports.--The Comptroller General shall 
     submit to Congress an initial report under subsection (a) not 
     later than 1 year after the date of enactment of this Act and 
     a second report not later than 1 year after the date on which 
     the initial report is submitted.

     SEC. 402. PROHIBITION ON WAR PROFITEERING.

       (a) Findings.--Congress makes the following findings:
       (1) War profiteering, the overcharging of taxpayers for any 
     good or service with the specific intent to excessively 
     profit from a conflict or reconstruction situation, not only 
     defrauds taxpayers in the United States, but also threatens 
     the safety of United States troops in harms way by hindering 
     reconstruction progress, damaging the credibility of the 
     United States, and wasting resources that could be used for 
     troop protection.
       (2) Laws prohibiting fraud protect against waste of tax 
     dollars within the United States, but no current fraud 
     statute expressly prohibits waste of tax dollars resulting 
     from war profiteering during conflicts in foreign countries.
       (3) War profiteers have hindered United States efforts to 
     secure and reconstruct Iraq. In its third quarterly report, 
     the Coalition Provisional Authority Inspector General 
     reported that, as of October 12, 2004, it had received a 
     total of 113 potential criminal cases.
       (4) In nine separate reports, the Defense Contract Audit 
     Agency, the Coalition Provisional Authority Inspector 
     General, and the Government Accountability Office have found 
     widespread, systematic abuses by the Halliburton Company and 
     its subsidiaries, including instances of overcharging worth 
     tens of millions of dollars, fraudulent accounting practices, 
     and kickbacks. Contracts awarded to Custer Battles, LLC, were 
     suspended by the Department of Defense after it uncovered 
     fraudulent billing practices including the establishment of 
     phantom off-shore corporations. Government investigators have 
     found contract irregularities, including lack of transparency 
     and poor accounting, in contracts awarded to other firms.
       (b) Prohibition of Profiteering.--
       (1) Prohibition.--
       (A) In general.--Chapter 47 of title 18, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 1038. War profiteering and fraud relating to military 
       action, relief, and reconstruction efforts

       ``(a) Prohibition.--
       ``(1) In general.--Whoever, in any matter involving a 
     contract or the provision of goods or services, directly or 
     indirectly, in connection with the war, military action, or 
     relief or reconstruction activities, knowingly and 
     willfully--
       ``(A) executes or attempts to execute a scheme or artifice 
     to defraud the United States;
       ``(B) falsifies, conceals, or covers up by any trick, 
     scheme, or device a material fact;
       ``(C) makes any materially false, fictitious, or fraudulent 
     statements or representations, or makes or uses any 
     materially false writing or document knowing the same to 
     contain any materially false, fictitious, or fraudulent 
     statement or entry; or
       ``(D) materially overvalues any good or service with the 
     specific intent to excessively profit from the war, military 
     action, or relief or reconstruction activities;

     shall be fined under paragraph (2), imprisoned not more than 
     20 years, or both.
       ``(2) Fine.--A person convicted of an offense under 
     paragraph (1) may be fined the greater of--
       ``(A) $1,000,000; or
       ``(B) if such person derives profits or other proceeds from 
     the offense, not more than twice the gross profits or other 
     proceeds.
       ``(b) Extraterritorial Jurisdiction.--There is 
     extraterritorial Federal jurisdiction over an offense under 
     this section.
       ``(c) Venue.--A prosecution for an offense under this 
     section may be brought--
       ``(1) as authorized by chapter 211 of this title;
       ``(2) in any district where any act in furtherance of the 
     offense took place; or
       ``(3) in any district where any party to the contract or 
     provider of goods or services is located.''.
       (2) Table of sections.--The table of sections for chapter 
     47 of title 18, United States Code, is amended by adding at 
     the end the following:

``1038. War profiteering and fraud relating to military action, relief, 
              and reconstruction efforts.''.

       (c) Civil Forfeiture.--Section 981(a)(1)(C) of title 18, 
     United States Code, is amended by inserting ``1038,'' after 
     ``1032,''.
       (d) Criminal Forfeiture.--Section 982(a)(2)(B) of title 18, 
     United States Code, is amended by striking ``or 1030'' and 
     inserting ``1030, or 1038''.
       (e) Money Laundering.--Section 1956(c)(7)(D) of title 18, 
     United States Code, is amended by inserting ``section 1038 
     (relating to war profiteering and fraud relating to military 
     action, relief, and reconstruction efforts),'' after 
     ``liquidating agent of financial institution),''.
       (f) Relationship to Existing Law.--This section shall not 
     limit or repeal any additional authorities provided by law.
       (g) Effective Date of Amendments.--The amendments made by 
     this section shall be effective during the 7-year period 
     beginning on the date of enactment of this Act.
                                 ______
                                 
      By Mr. AKAKA (for himself, Mr. Reid, Ms. Mikulski, Ms. Stabenow, 
        Mr. Inouye, Mr. Dorgan, Mr. Lautenberg, Mr. Leahy, Mr. Salazar, 
        Mr. Rockefeller, Mrs. Murray, Mr. Bingaman, Mrs. Feinstein, Mr. 
        Durbin, Mr. Kennedy, Mr. Corzine, Mr. Pryor, Mr. Schumer, Mr. 
        Sarbanes, and Mr. Dayton):
  S. 13. A bill to amend titles 10 and 38, United States Code, to 
expand and enhance health care, mental health, transition, and 
disability benefits for veterans, and for other purposes; to the 
Committee on Veterans' Affairs.
  Mr. AKAKA. Mr. President, I rise today to introduce a bill that would 
make sweeping changes to the way the Department of Veterans Affairs 
(VA) delivers health care and benefits to our nation's veterans. S. 13 
would, among other things, guarantee full funding for VA health care, 
provide for full concurrent receipt, enhance mental health care 
services, and ease the transition from military service to civilian 
life.
  This bill would mean that the 115,000 veterans who choose to make 
Hawaii their home would be assured the services they have earned. The 
nearly 18,000 veterans who avail themselves of VA health care in 
Honolulu, Hawaii,

[[Page S169]]

Kauai, and Maui would not have to worry if resources for doctors and 
nurses will materialize next year.
  And because so many of our reservists and Guardsmen are being 
deployed for the current wars in Iraq and Afghanistan, this bill will 
help ensure they get the care they need upon their return.
  Every year the President sends forward his budget proposal to 
Congress, and every year we go through the same battles to get VA 
health care the money it needs to adequately serve its veteran 
patients. The time has come to approach this process more rationally. 
This legislation would ensure full funding for VA health care by simply 
changing the way funds are allocated. To be perfectly clear, this bill 
merely shifts money already being allocated over to a more reliable 
mechanism.
  The American Legion, the Disabled American Veterans, and the Veterans 
of Foreign Wars support this approach to fully fund the veterans health 
care system.
  These three organizations--representing more than 7 million military 
veterans--rightly believe that veterans have earned the right to VA 
medical care through their ``extraordinary sacrifices and service to 
this Nation.''
  We have seen huge numbers of veterans seeking VA care for the first 
time. I, for one, believe this is a good thing. Others rationalize that 
as we are at war, we must cut back on VA care. I simply do not 
understand this logic. We are at war, and therefore we must do 
everything we can to show our military that VA health care will be 
there for all veterans who served. To accomplish this goal, we must 
change the way VA health care is funded.
  Although we have continued to make progress on eliminating the long-
standing injustice that has affected our disabled retired veterans' 
retirement pay, we still have work to do.
  S. 13 will correct this unfairness by allowing all disabled military 
retirees to collect both their full military retired and VA disability 
pay concurrently.
  Most military retirees who have a service-connected disability are 
not permitted to collect both their retirement and disability benefits 
concurrently. Military retired pay is the promised reward for 20 or 
more years of uniformed service and is based on length of service. VA 
disability compensation is unrelated to length of service and is 
intended to compensate a veteran for a service-connected loss of 
function.
  In order to continue to recruit and retain quality soldiers, sailors, 
airmen and marines, we must pay attention not only to the present, but 
also to the future. George Washington said:

       The willingness with which our young people are likely to 
     serve in any war, no matter how justified, shall be directly 
     proportional to how they perceive the Veterans of earlier 
     wars were treated and appreciated by their nation.

  Our disabled military retirees deserve to receive the retirement pay 
that they earned and be compensated for their service-connected 
disabilities. Our young people will wear the uniforms of our Armed 
Forces only if they believe that their service is appreciated and 
compensated accordingly.
  Along those lines, S. 13 also seeks to ensure that veterans and 
returning service members can receive the mental health care they might 
need as a result of their service. The legislation requires that VA 
employ at least one psychiatrist and treatment team at each medical 
center that does not currently have one. This legislation would also 
mandate that VA carry out a community outreach program to let Operation 
Iraqi Freedom and Operation Enduring Freedom veterans know about the 
services available to them at VA.
  Why is good VA mental health care so important?
  Because so often battle wounds do not manifest in physical illness, 
but in quiet and equally debilitating mental illness. These wounds are 
revealed as post-traumatic stress disorder with effects that linger and 
symptoms that can be brought on years after combat.
  While hypertension and heart disease afflict vast numbers of 
veterans, mental illness is not far behind. It might surprise some of 
my colleagues to know that cancer and depression affect roughly the 
same number of veterans. But is VA reaching and treating all veterans 
who need care? This remains very much an open question.
  This legislation also seeks to improve access to needed prescription 
drugs. Many veterans have expressed their desire to bring prescriptions 
from their Medicare doctors to VA pharmacies to get them filled. 
Current VA policy requires that nearly all veterans see a VA doctor 
before such prescriptions are issued. This does not make sense.
  The Department's inspector general testified that VA could see 
savings of $1 billion a year if veterans were allowed to bring their 
outside prescriptions, because it would obviate the need for VA to re 
diagnose patients and then re-issue prescriptions that have already 
been written. S. 13 would allow these veterans to get their 
prescriptions filled by VA at prices that are far better than in the 
private sector.
  This legislation also seeks to help veterans with their education. S. 
13 would exclude MGIB benefits from computation as income when 
calculating campus based aid, such as Perkins loans. This draws the 
distinction between a benefit that has been earned, and paid for, by 
the veterans, and other types of income. This allows the individual 
applying for financial aid to subtract $1,200 from the expected family 
contribution for 1 year. This $1,200 represents the money that the 
individual paid to participate in the MGIB program.
  S. 13 also offers an opportunity for enrollment in the MGIB education 
program for servicemembers who participated in or were eligible to 
participate in the post-Vietnam era educational assistance program, 
known as VEAP. This bill would create a 1-year window and requires the 
individual to pay $2,700, which was the VEAP contribution.
  Last year, Congress extended the period of eligibility for education 
benefits for survivors of servicemembers who were killed during active 
duty. We would like to further extend this delimiting date for veterans 
and other dependents. The 10-year period of eligibility would not begin 
to toll until they began to use the benefit, rather than when they 
became eligible for the benefit.
  Overall, this is a bill to spur dialogue started on the issues that 
are truly important to our Nation's veterans.
  We all need to work harder towards the goal of seeing that the 
promises made to the men and women who are serving today are met; that 
their sacrifices were not in vain.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 13

       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 ``Fulfilling Our Duty to 
     America's Veterans Act of 2005''.

                      TITLE I--HEALTH CARE MATTERS

     SEC. 100. FINDINGS.

       Congress makes the following findings:
       (1) The three largest veterans advocacy groups, the 
     Disabled American Veterans, the American Legion, and the 
     Veterans of Foreign Wars, have called upon Congress to change 
     veterans funding to a mandatory process, stating, ``We 
     believe it is time to guarantee health care funding for all 
     veterans. We believe health care rationing must end. We 
     believe it is time the promise is kept.''.
       (2) The May 2003 report of The President's Task Force To 
     Improve Health Care Delivery For Our Nation's Veterans found 
     that ``there is a significant mismatch in VA between demand 
     and available funding--an imbalance that . . . if unresolved, 
     will delay veterans' access to care and could threaten the 
     quality of VA health care.''.
       (3) Under the current funding process, the VA has 
     experienced billion-dollar shortfalls every year for the past 
     several years, resulting in waiting lists several months long 
     for appointments with physicians, a substantial disability 
     claims backlog, and policies designed to prevent veterans 
     from obtaining the health care they were promised.

                      Subtitle A--Funding Matters

     SEC. 101. FUNDING TO ADDRESS CHANGES IN POPULATION AND 
                   INFLATION.

       (a) In General.--Chapter 17 of title 38, United States 
     Code, is amended by inserting after section 1706 the 
     following new section:

     ``Sec. 1706A. Management of health care: funding to address 
       changes in population and inflation

       ``(a) By the enactment of this section, Congress and the 
     President intend to ensure access to health care for all 
     veterans. Upon the

[[Page S170]]

     enactment of this section, funding for the programs, 
     functions, and activities of the Veterans Health 
     Administration specified in subsection (d) to accomplish this 
     objective shall be provided through a combination of 
     discretionary and mandatory funds. The discretionary amount 
     should be equal to the fiscal year 2005 discretionary funding 
     for such programs, functions, and activities, and should 
     remain unchanged each fiscal year thereafter. The annual 
     level of mandatory amount shall be adjusted according to the 
     formula specified in subsection (c). While this section does 
     not purport to control the outcome of the annual 
     appropriations process, it anticipates cooperation from 
     Congress and the President in sustaining discretionary 
     funding for such programs, functions, and activities in 
     future fiscal years at the level of discretionary funding for 
     such programs, functions, and activities for fiscal year 
     2005. The success of that arrangement, as well as of the 
     funding formula, are to be reviewed after two years.
       ``(b) On the first day of each fiscal year, the Secretary 
     of the Treasury shall make available to the Secretary of 
     Veterans Affairs the amount determined under subsection (c) 
     with respect to that fiscal year. Each such amount is 
     available, without fiscal year limitation, for the programs, 
     functions, and activities of the Veterans Health 
     Administration specified in subsection (d). There is hereby 
     appropriated, out of any sums in the Treasury not otherwise 
     appropriated, amounts necessary to implement this section.
       ``(c)(1) The amount applicable to fiscal year 2006 under 
     this subsection is the amount equal to--
       ``(A) 130 percent of the amount obligated by the Department 
     during fiscal year 2004 for the purposes specified in 
     subsection (d); minus
       ``(B) the amount appropriated for those purposes for fiscal 
     year 2005.
       ``(2) The amount applicable to any fiscal year after fiscal 
     year 2006 under this subsection is the amount equal to the 
     product of the following, minus the amount appropriated for 
     the purposes specified for subsection (d) for fiscal year 
     2005:
       ``(A) The sum of--
       ``(i) the number of veterans enrolled in the Department 
     health care system under section 1705 of this title as of 
     July 1 preceding the beginning of such fiscal year; and
       ``(ii) the number of persons eligible for health care under 
     chapter 17 of this title who are not covered by clause (i) 
     and who were provided hospital care or medical services under 
     such chapter at any time during the fiscal year preceding 
     such fiscal year.
       ``(B) The per capita baseline amount, as increased from 
     time to time pursuant to paragraph (3)(B).
       ``(3)(A) For purposes of paragraph (2)(B), the term `per 
     capita baseline amount' means the amount equal to--
       ``(i) the amount obligated by the Department during fiscal 
     year 2005 for the purposes specified in subsection (d); 
     divided by
       ``(ii) the number of veterans enrolled in the Department 
     health care system under section 1705 of this title as of 
     September 30, 2004.
       ``(B) With respect to any fiscal year, the Secretary shall 
     provide a percentage increase (rounded to the nearest dollar) 
     in the per capita baseline amount equal to the percentage by 
     which--
       ``(i) the Consumer Price Index (all Urban Consumers, United 
     States City Average, Hospital and related services, 
     Seasonally Adjusted), published by the Bureau of Labor 
     Statistics of the Department of Labor for the 12-month period 
     ending on the June 30 preceding the beginning of the fiscal 
     year for which the increase is made; exceeds
       ``(ii) such Consumer Price Index for the 12-month period 
     preceding the 12-month period described in clause (i).
       ``(d)(1) Except as provided in paragraph (2), the purposes 
     for which amounts are made available pursuant to subsection 
     (b) shall be all programs, functions, and activities of the 
     Veterans Health Administration.
       ``(2) Amounts made available pursuant to subsection (b) are 
     not available for--
       ``(A) construction, acquisition, or alteration of medical 
     facilities as provided in subchapter I of chapter 81 of this 
     title (other than for such repairs as were provided for 
     before the date of the enactment of this section through the 
     Medical Care appropriation for the Department); or
       ``(B) grants under subchapter III of chapter 81 of this 
     title.
       ``(e) Nothing in this section shall be construed to prevent 
     or limit the authority of Congress to reauthorize provisions 
     relating to veterans health care.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by adding at the end the 
     following new item:

``1706A. Management of health care: funding to address changes in 
              population and inflation.''.

     SEC. 102. COMPTROLLER GENERAL REPORT.

       (a) Requirement for Report.--Not later than January 31, 
     2008, the Comptroller General of the United States shall 
     submit to Congress a report on the extent to which section 
     1706A of title 38, United States Code (as added by section 
     101 of this Act), has achieved the objective set forth in 
     subsection (a) of such section 1706A during fiscal years 2006 
     and 2007.
       (b) Content.--The report under subsection (a) shall set 
     forth the following:
       (1) The amount appropriated for fiscal year 2005 for the 
     programs, functions, and activities of the Veterans Health 
     Administration specified in subsection (d) of section 1706A 
     of title 38, United States Code (as so added).
       (2) The amount appropriated by annual appropriations Acts 
     for each of fiscal years 2006 and 2007 for such programs, 
     functions, and activities.
       (3) The amount provided by section 1706A of title 38, 
     United States Code (as so added), for each of fiscal years 
     2006 and 2007 for such programs, functions, and activities.
       (4) An assessment whether the amount described in paragraph 
     (3) for each of fiscal years 2006 and 2007 was appropriate to 
     address the changes in costs to the Veterans Health 
     Administration for such programs, functions, and activities 
     that were attributable to changes in population and in 
     inflation over the course of such fiscal years.
       (5) An assessment whether the amount provided by section 
     1706A of title 38, United States Code (as so added), in each 
     of fiscal years 2006 and 2007, when combined with amounts 
     appropriated by annual appropriations Acts for each of such 
     fiscal years for such programs, functions, and activities, 
     provided adequate funding of such programs, functions, and 
     activities in each such fiscal year.
       (6) Such recommendations as the Comptroller General 
     considers appropriate regarding modifications of the formula 
     under subsection (c) of section 1706A of title 38, United 
     States Code (as so added), or any other modifications of law, 
     to better ensure adequate funding of such programs, 
     functions, and activities.

     SEC. 103. CONGRESSIONAL CONSIDERATION OF COMPTROLLER GENERAL 
                   RECOMMENDATIONS.

       (a) Applicable Procedure.--The procedure provided under 
     this section shall apply to consideration of a joint 
     resolution described in subsection (b) in the Senate and the 
     House of Representatives.
       (b) Joint Resolution Defined.--For purposes of this 
     section, the term ``joint resolution'' means only a joint 
     resolution that is introduced in the House of Representatives 
     by the Speaker of the House of Representatives (or the 
     Speaker's designee) or the Minority Leader (or the Minority 
     Leader's designee), or in the Senate by the Majority Leader 
     (or the Majority Leader's designee) or the Minority Leader 
     (or the Minority Leader's designee), within the 10-day period 
     beginning on the date on which Congress receives the report 
     of the Comptroller General of the United States under section 
     102, and--
       (1) that does not have a preamble;
       (2) the matter after the resolving clause of which consists 
     of amendments of title 38, United States Code, or other 
     amendments or modifications of laws administered by the 
     Secretary of Veterans Affairs to implement the 
     recommendations of the Comptroller General in the report 
     under section 102(b)(6); and
       (3) the title of which is as follows: ``Joint resolution to 
     ensure adequate funding of health care for veterans.''.
       (c) Referral.--A joint resolution described in subsection 
     (b) that is introduced in the House of Representatives shall 
     be referred to the Committee on Veterans' Affairs of the 
     House of Representatives. A joint resolution described in 
     subsection (b) introduced in the Senate shall be referred to 
     the Committee on Veterans' Affairs of the Senate.
       (d) Discharge.--If the committee to which a joint 
     resolution described in subsection (b) is referred has not 
     reported such resolution (or an identical resolution) by the 
     end of the 20-day period beginning on the date on which the 
     Comptroller General submits to Congress the report under 
     section 102, such committee shall be, at the end of such 
     period, discharged from further consideration of such 
     resolution, and such resolution shall be placed on the 
     appropriate calendar of the House involved.
       (e) Consideration.--
       (1) Motion to proceed to consideration.--On or after the 
     third day after the date on which the committee to which such 
     a joint resolution is referred has reported, or has been 
     discharged (under subsection (d)) from further consideration 
     of, such a resolution, it is in order (even though a previous 
     motion to the same effect has been disagreed to) for any 
     Member of the respective House to move to proceed to the 
     consideration of the resolution (but only on the day after 
     the calendar day on which such Member announces to the House 
     concerned the Member's intention to do so). The motion is 
     highly privileged in the House of Representatives and is 
     privileged in the Senate and is not debatable. The motion is 
     not subject to amendment, or to a motion to postpone, or to a 
     motion to proceed to the consideration of other business. A 
     motion to reconsider the vote by which the motion is agreed 
     to or disagreed to shall not be in order. If a motion to 
     proceed to the consideration of the resolution is agreed to, 
     the respective House shall immediately proceed to 
     consideration of the joint resolution without intervening 
     motion, order, or other business, and the resolution shall 
     remain the unfinished business of the respective House until 
     disposed of.
       (2) Debate.--Debate on the resolution, and on all debatable 
     motions and appeals in connection therewith, shall be limited 
     to not more than 2 hours, which shall be divided equally 
     between those favoring and those opposing the resolution. An 
     amendment to the resolution is not in order. A motion further 
     to limit debate is in order and not debatable. A motion to 
     postpone, or a motion to proceed to the consideration of 
     other business,

[[Page S171]]

     or a motion to recommit the resolution is not in order. A 
     motion to reconsider the vote by which the resolution is 
     agreed to or disagreed to is not in order.
       (3) Vote on final passage.--Immediately following the 
     conclusion of the debate on a joint resolution described in 
     subsection (b) and a single quorum call at the conclusion of 
     the debate if requested in accordance with the rules of the 
     appropriate House, the vote on final passage of the 
     resolution shall occur.
       (4) Appeals from decisions of the chair.--Appeals from the 
     decisions of the Chair relating to the application of the 
     rules of the Senate or the House of Representatives, as the 
     case may be, to the procedure relating to a joint resolution 
     described in subsection (b) shall be decided without debate.
       (f) Consideration by Other House.--
       (1) Procedure.--If, before the passage by one House of a 
     joint resolution of that House described in subsection (b), 
     that House receives from the other House a joint resolution 
     described in subsection (b), then the following procedures 
     shall apply:
       (A) The resolution of the other House shall not be referred 
     to a committee and may not be considered in the House 
     receiving it except in the case of final passage as provided 
     in subparagraph (B)(ii).
       (B) With respect to a joint resolution described in 
     subsection (b) of the House receiving the resolution--
       (i) the procedure in that House shall be the same as if no 
     resolution had been received from the other House; but
       (ii) the vote on final passage shall be on the resolution 
     of the other House.
       (2) Disposition.--Upon disposition of the resolution 
     received from the other House, it shall no longer be in order 
     to consider the resolution that originated in the receiving 
     House.
       (g) Rules of Senate and House.--This section is enacted by 
     Congress--
       (1) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and as such it is 
     deemed a part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a joint resolution described in 
     subsection (b), and it supersedes other rules only to the 
     extent that it is inconsistent with such rules; and
       (2) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.

                   Subtitle B--Mental Health Matters

     SEC. 111. FINDINGS.

       Congress makes the following findings:
       (1) A study published in the New England Journal of 
     Medicine reported that about one in six soldiers of the Iraq 
     war displays symptoms of post-traumatic stress disorder.
       (2) Clinical experts are anticipating an increase in the 
     number of post-traumatic stress disorder cases in light of 
     the increasing duration of military deployment.
       (3) 86 of 163 Department of Veterans Affairs Medical 
     Centers have post-traumatic stress disorder treatment 
     programs.
       (4) Section 1706 of title 38, United States Code, requires 
     that the Secretary of Veterans Affairs ensure, in accordance 
     with that section, that the Department of Veterans Affairs 
     maintains its capacity to provide for the specialized 
     treatment and rehabilitative needs of disabled veterans 
     within distinct programs or facilities of the Department.

     SEC. 112. POST-TRAUMATIC STRESS DISORDER TREATMENT FOR 
                   VETERANS OF SERVICE IN AFGHANISTAN AND IRAQ AND 
                   THE WAR ON TERROR.

       (a) Enhanced Capacity for Department of Veterans Affairs.--
     Using funds available to the Secretary of Veterans Affairs 
     for fiscal year 2006 for ``Medical Care'', the Secretary 
     shall employ at least one psychiatrist and a complementary 
     clinical team at each medical center of the Department of 
     Veterans Affairs in order to conduct a specialized program 
     for the diagnosis and treatment of post-traumatic stress 
     disorder and to employ additional mental health services 
     specialists at the medical center.
       (b) Outreach at the Community Level.--
       (1) Program.--The Secretary of Veterans Affairs shall, 
     within the authorities of the Secretary under title 38, 
     United States Code, carry out a program to provide outreach 
     at the community level to veterans who participated in 
     Operation Iraqi Freedom or Operation Enduring Freedom who are 
     or may be suffering from post-traumatic stress disorder.
       (2) Program sites.--The program shall be carried out on a 
     nation-wide basis through facilities of the Department of 
     Veterans Affairs.
       (3) Program content.--The program shall provide for 
     individualized case management to be conducted on a one-on-
     one basis, counseling, education, and group therapy to help 
     participants cope with post-traumatic stress disorder. The 
     program--
       (A) shall emphasize early identification of veterans who 
     may be experiencing symptoms of post-traumatic stress 
     disorder; and
       (B) shall include group-oriented, peer-to-peer settings for 
     treatment.

     SEC. 113. ARMED FORCES REVIEW OF MENTAL HEALTH PROGRAMS.

       (a) Review of Mental Health Programs.--The Secretary of 
     each military department shall conduct a comprehensive review 
     of the mental health care programs of the Armed Forces under 
     the jurisdiction of that Secretary in order to determine ways 
     to improve the efficacy of such care, including a review of 
     joint Department of Defense and Department of Veterans 
     Affairs clinical guidelines to ensure a seamless delivery of 
     care during transitions from active duty or reserve status to 
     civilian life.
       (b) Report to Congress.--The Secretary of Defense shall 
     submit to Congress a report setting forth the results of such 
     review not later than 90 days after the date of the enactment 
     of this Act.

                       Subtitle C--Other Matters

     SEC. 121. AUTHORITY OF DEPARTMENT OF VETERANS AFFAIRS 
                   PHARMACIES TO DISPENSE MEDICATIONS TO VETERANS 
                   ON PRESCRIPTIONS WRITTEN BY PRIVATE 
                   PRACTITIONERS.

       (a) Findings.--Congress makes the following findings:
       (1) Under longstanding regulations of the Department of 
     Veterans Affairs, most veterans who receive prescriptions for 
     medication from private doctors are forced to complete 
     physicals conducted by Department of Veterans Affairs 
     physicians before the veterans can have their prescriptions 
     filled by a pharmacy. This bureaucratic red tape can prevent 
     veterans from quickly receiving the medical treatment they 
     need.
       (2) In December 2000, the Inspector General of the 
     Department of Veterans Affairs reported that eliminating this 
     unnecessary red tape would save the underfunded Department of 
     Veterans Affairs over $1,000,000,000 per year. The report 
     concluded that ``a decision to continue the current policies 
     results in inefficiency and waste that we estimate annually 
     costs the Department over $1,000,000,000 in resources that 
     could be better used in the delivery of healthcare services 
     to veterans.''.
       (3) In 2004, the Department of Justice, in a reversal of an 
     earlier legal opinion, stating that the Secretary of Veterans 
     Affairs has the authority to eliminate this rule without 
     further legislative action. The Secretary has failed to take 
     such a step, thus necessitating action by Congress.
       (b) Authority.--Section 1712 of title 38, United States 
     Code, is amended--
       (1) by redesignating subsection (e) as subsection (f); and
       (2) by inserting after subsection (d) the following new 
     subsection (e):
       ``(e)(1) The Secretary shall furnish to any medicare-
     eligible veteran on an out-patient basis such drugs and 
     medicines as may be ordered on prescription of a duly 
     licensed physician as specific therapy in the treatment of 
     any illness or injury suffered by such veteran.
       ``(2) In this subsection, the term `medicare-eligible 
     veteran' means any veteran who--
       ``(A) is entitled to or enrolled in hospital insurance 
     benefits under part A of title XVIII of the Social Security 
     Act (42 U.S.C. 1395 et seq.); or
       ``(B) is enrolled in the supplementary medical insurance 
     program under part B of such title (42 U.S.C. 1395j et seq.).
       ``(3) The furnishing of drugs and medicines under this 
     subsection shall be subject to the provisions of section 
     1722A(b) of this title.''.
       (c) Copayment Requirements.--
       (1) In general.--Section 1722A of such title is amended--
       (A) in subsection (a)(1), by inserting ``(other than a 
     veteran covered by subsection (b))'' after ``require a 
     veteran'';
       (B) by redesignating subsections (b) and (c) as subsections 
     (c) and (d), respectively;
       (C) by inserting after subsection (a) the following new 
     subsection (b):
       ``(b)(1) In the case of a veteran who is furnished 
     medications on an out-patient basis under section 1712(e) of 
     this title, the Secretary shall require the veteran to pay, 
     at the election of the Secretary, one or more of the 
     following:
       ``(A) An annual enrollment fee in an amount determined 
     appropriate by the Secretary.
       ``(B) A copayment for each 30-day supply of such 
     medications in an amount determined appropriate by the 
     Secretary.
       ``(C) An amount equal to the cost to the Secretary of such 
     medications, as determined by the Secretary.
       ``(2)(A) In determining the amounts to be paid by a veteran 
     under paragraph (1), and the basis of payment under one or 
     more subparagraphs of that paragraph, the Secretary shall 
     ensure that the total amount paid by veterans for medications 
     under that paragraph in a year is not less than the costs of 
     the Department in furnishing medications to veterans under 
     section 1712(e) of this title during that year, including the 
     cost of purchasing and furnishing medications, and other 
     costs of administering that section.
       ``(B) The Secretary shall take appropriate actions to 
     ensure, to the maximum extent practicable, that amounts paid 
     by veterans under paragraph (1) in a year are equal to the 
     costs of the Department referred to in subparagraph (A) in 
     that year.
       ``(3) In determining amounts under paragraph (1), the 
     Secretary may take into account the following:
       ``(A) Whether or not the medications furnished are generic 
     medications or brand name medications.
       ``(B) Whether or not the medications are furnished by mail.
       ``(C) Whether or not the medications furnished are listed 
     on the National Prescription Drug Formulary of the 
     Department.
       ``(D) Any other matters the Secretary considers 
     appropriate.

[[Page S172]]

       ``(4) The Secretary may from time to time adjust any amount 
     determined by the Secretary under paragraph (1), as 
     previously adjusted under this paragraph, in order to meet 
     the purpose specified in paragraph (2).''; and
       (D) in subsection (d), as so redesignated--
       (i) by striking ``subsection (a)'' and inserting 
     ``subsections (a) and (b)''; and
       (ii) by striking ``subsection (b)'' and inserting 
     ``subsection (c)''.
       (2) Deposit of collections in medical care collections 
     fund.--Paragraph (4) of section 1729A(b) of such title is 
     amended to read as follows:
       ``(4) Subsection (a) or (b) of section 1722A of this 
     title.''.
       (d) Clerical Amendments.--(1) The heading for section 1712 
     of such title is amended by striking ``for certain disabled 
     veterans''.
       (2) The table of sections at the beginning of chapter 17 of 
     such title is amended in the item relating to section 1712 by 
     striking ``for certain disabled veterans''.

   TITLE II--CONCURRENT RECEIPT OF RETIRED PAY AND SERVICE-CONNECTED 
                        DISABILITY COMPENSATION

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Retired Pay Restoration 
     Act of 2005''.

     SEC. 202. FINDINGS.

       Congress makes the following findings:
       (1) The United States Government has an essential 
     obligation to provide support and care for men and women who 
     have completed honorable military service in defense of the 
     Nation. In no instance is this obligation more critical than 
     for veterans who were injured or disabled during their 
     military service.
       (2) Disability compensation and military retired pay are 
     benefits earned for two distinct reasons. Disability 
     compensation is provided to veterans for disabilities 
     resulting from their military service to the Nation as an 
     expression of the Nation's gratitude and as recompense for 
     their sacrifice. Military retired pay is earned by members of 
     the Armed Forces for the devotion of 20 or more years of 
     their lives to the military service of the Nation.
       (3) Until 2002, Federal law prohibited disabled veterans 
     from concurrently receiving both disability compensation and 
     retirement pay. The prohibition against concurrent receipt 
     was a gross violation of the Government's commitment to 
     veterans.
       (4) Despite recent legislative advances, over 1,500,000 
     disabled veterans continue to be prohibited from receiving 
     both military retirement and disability payments 
     concurrently.

     SEC. 203. FULL PAYMENT OF BOTH RETIRED PAY AND COMPENSATION 
                   TO DISABLED MILITARY RETIREES.

       (a) Restoration of Full Retired Pay Benefits.--Section 1414 
     of title 10, United States Code, is amended to read as 
     follows:

     ``Sec. 1414. Members eligible for retired pay who are also 
       eligible for veterans' disability compensation: payment of 
       retired pay and veterans' disability compensation

       ``(a) Payment of Both Retired Pay and Compensation.--Except 
     as provided in subsection (b), a member or former member of 
     the uniformed services who is entitled to retired pay (other 
     than as specified in subsection (c)) and who is also entitled 
     to veterans' disability compensation is entitled to be paid 
     both without regard to sections 5304 and 5305 of title 38.
       ``(b) Special Rule for Chapter 61 Career Retirees.--The 
     retired pay of a member retired under chapter 61 of this 
     title with 20 years or more of service otherwise creditable 
     under section 1405 of this title at the time of the member's 
     retirement is subject to reduction under sections 5304 and 
     5305 of title 38, but only to the extent that the amount of 
     the member's retired pay under chapter 61 of this title 
     exceeds the amount of retired pay to which the member would 
     have been entitled under any other provision of law based 
     upon the member's service in the uniformed services if the 
     member had not been retired under chapter 61 of this title.
       ``(c) Exception.--Subsection (a) does not apply to a member 
     retired under chapter 61 of this title with less than 20 
     years of service otherwise creditable under section 1405 of 
     this title at the time of the member's retirement.
       ``(d) Definitions.--In this section:
       ``(1) The term `retired pay' includes retainer pay, 
     emergency officers' retirement pay, and naval pension.
       ``(2) The term `veterans' disability compensation' has the 
     meaning given the term `compensation' in section 101(13) of 
     title 38.''.
       (b) Repeal of Combat-Related Special Compensation 
     Program.--Section 1413a of such title is repealed.
       (c) Clerical Amendment.--The table of sections at the 
     beginning of chapter 71 of such title is amended by striking 
     the items relating to sections 1413a and 1414 and inserting 
     the following:

``1414. Members eligible for retired pay who are also eligible for 
              veterans' disability compensation: payment of retired pay 
              and veterans' disability compensation.''.

     SEC. 204. EFFECTIVE DATE; PROHIBITION ON RETROACTIVE 
                   BENEFITS.

       (a) In General.--The amendments made by section 202 shall 
     take effect on--
       (1) the first day of the first month that begins after the 
     date of the enactment of this Act; or
       (2) the first day of the fiscal year that begins in the 
     calendar year in which this Act is enacted, if later than the 
     date specified in paragraph (1).
       (b) Retroactive Benefits.--No benefits may be paid to any 
     person by reason of section 1414 of title 10, United States 
     Code, as amended by section 202(a), for any period before the 
     effective date applicable under subsection (a).

TITLE III--SEAMLESS TRANSITION FROM MILITARY SERVICE TO VETERANS STATUS

     SEC. 301. FINDINGS.

       Congress makes the following findings:
       (1) In its final report, the President's Task Force To 
     Improve Health Care Delivery For Our Nation's Veterans found 
     that ``. . . increased collaboration between the Departments 
     [of Defense and Veterans Affairs] for the transfer of 
     personnel and health information is needed. Within VA, 
     broader sharing of the information received from the DOD and 
     individual veterans is required so that veterans are not met 
     at every turn with the question, `Who are you and what do you 
     want?' A `seamless transition' from military service to 
     veteran status is especially critical in the context of 
     health care, where readily available, accurate, and current 
     medical information must be accessible to health care 
     providers''.
       (2) The Task Force put forward a series of seven 
     recommendations designed to create a seamless transition from 
     military service to veteran status. Nearly two years after 
     the submittal of its final report, few of the recommendations 
     have been adopted.
       (3) Leading nonpartisan veterans' advocates, including the 
     American Legion, Veterans of Foreign Wars, Disabled American 
     Veterans, and the Military Officers Association of America, 
     support the adoption of the recommendations made by the Task 
     Force to create a seamless transition from military service 
     to veteran status.

     SEC. 302. REPORT ON DEVELOPMENT OF INTEROPERABLE ELECTRONIC 
                   MEDICAL RECORDS.

       Not later than 60 days after the date of the enactment of 
     this Act, the Secretary of Defense and the Secretary of 
     Veterans Affairs shall jointly submit to Congress a report on 
     the status of the development of interoperable electronic 
     medical records for members of the Armed Forces and veterans 
     that are utilizable by both the Department of Defense and the 
     Department of Veterans Affairs.

     SEC. 303. EXCHANGE OF MEDICAL RECORDS FOR SEAMLESS TRANSITION 
                   IN THE PROVISION OF HEALTHCARE SERVICES.

       The Secretary of Health and Human Services shall modify 
     section 164.512(k)(1) of title 45, Code of Federal 
     Regulations, to provide that the Department of Defense and 
     the Department of Veterans Affairs may exchange protected 
     health information of members of the Armed Forces and 
     veterans in a manner that, as determined jointly by the 
     Secretary of Health and Human Services, the Secretary of 
     Defense, and the Secretary of Veterans Affairs, facilitates a 
     seamless transition between the provision of health care 
     services by the Department of Defense to members of the Armed 
     Forces and the provision of health care services by the 
     Department of Veterans Affairs to veterans who require such 
     services after their separation or retirement from the Armed 
     Forces.

     SEC. 304. ENHANCEMENT OF PRESEPARATION PHYSICAL EXAMINATION 
                   REQUIREMENTS.

       Section 1145 of title 10, United States Code, is amended--
       (1) in subsection (a), by striking paragraph (4);
       (2) by redesignating subsections (d) and (e) as subsections 
     (e) and (f), respectively; and
       (3) by inserting after subsection (c) the following new 
     subsection (d):
       ``(d) Preseparation Physical.--(1) The Secretary concerned 
     shall require a member of the armed forces to be separated 
     from active duty to undergo a physical examination before 
     that separation.
       ``(2) The physical examination of a member under this 
     subsection shall be conducted before the member receives 
     preseparation counseling under section 1142 of this title.
       ``(3)(A) The physical examinations conducted under this 
     subsection shall be comprehensive and, to the maximum extent 
     practicable, uniform throughout the armed forces.
       ``(B) The purpose of a physical examination conducted for a 
     member under this subsection shall be--
       ``(i) to determine the immediate health care needs, if any, 
     of the member as of separation and the ongoing health care 
     needs, if any, of the member after separation; and
       ``(ii) to identify any illness, injury, or other medical 
     conditions that may make the member eligible for benefits as 
     a veteran under the laws administered by the Secretary of 
     Veterans Affairs.
       ``(C) The Secretary of Defense shall prescribe in 
     regulations the requirements for physical examinations 
     conducted under this subsection.
       ``(4) The results of the physical examination of a member 
     under this subsection shall be included on the Form DD214 of 
     the member (or any successor form).
       ``(5) The Secretary concerned shall transmit in electronic 
     form to the Secretary of Veterans Affairs the results of each 
     physical examination conducted by such Secretary under this 
     subsection.''.

     SEC. 305. ENHANCEMENT OF PRESEPARATION COUNSELING 
                   REQUIREMENTS.

       Section 1142(b) of title 10, United States Code, is 
     amended--
       (1) by redesignating paragraphs (3) through (10) as 
     paragraphs (4) through (11), respectively; and

[[Page S173]]

       (2) by striking paragraph (2) and inserting the following 
     new paragraphs:
       ``(2) A description (to be developed with the assistance of 
     the Secretary of Veterans Affairs) of the health care and 
     other benefits to which the member may be entitled under the 
     laws administered by the Secretary of Veterans Affairs, 
     including compensation and vocational rehabilitation benefits 
     in the case of a member being medically separated or being 
     retired under chapter 61 of this title, which shall be taken 
     into account the preseperation physical examination of the 
     member conducted under section 1145(d) of this title.
       ``(3) In the case of a member who, as determined pursuant 
     to the preseperation physical examination conducted under 
     section 145(d) of this title, may be entitled to compensation 
     or pensions benefits under the laws administered by the 
     Secretary of Veterans Affairs, a referral (to be provided 
     with the assistance of the Secretary of Veterans Affairs) for 
     a compensation and pension examination by the Secretary of 
     Veterans Affairs.''.

     SEC. 306. EPIDEMIOLOGICAL STUDIES.

       (a) In General.--The Secretary of Defense and the Secretary 
     of Veterans Affairs may, during the five-year period 
     beginning on October 1, 2005, jointly carry out such 
     epidemioligical studies relating to veterans' health 
     conditions that develop as a result of occupational exposure 
     during military service as such Secretaries consider 
     appropriate.
       (b) Funding.--
       (1) Department of defense.--Of the amount authorized to be 
     appropriated for fiscal year 2006 for the Department of 
     Defense for the Defense Health Program, $2,500,000 shall be 
     available for the epidemiological studies authorized by 
     subsection (a).
       (2) Department of veterans affairs.--Of the amount 
     appropriated for fiscal year 2006 for the Department of 
     Veterans Affairs for Medical Care, $2,500,000 shall be 
     available for the epidemiological studies authorized by 
     subsection (a).
       (3) Availability.--Amounts available under this subsection 
     shall be available without fiscal year limitation.

     SEC. 307. INFORMATION SHARING.

       (a) In General.--The Secretary of Defense and the Secretary 
     of Veterans Affairs shall jointly develop protocols to 
     facilitate the sharing of information between the Department 
     of Defense and the Department of Veterans Affairs on the 
     matters referred to in subsection (c) with respect to each 
     member of the Armed Forces.
       (b) Purpose.--The purpose of the protocols is to facilitate 
     determinations by the Department of Veterans Affairs of the 
     existence and extent of a connection any illness or injury 
     experienced by a former member of the Armed Forces after 
     separation from the Armed Forces and the exposure of the 
     member to toxic or hazardous substances in the course of the 
     member's duties or assignments as a member of the Armed 
     Forces.
       (c) Covered Matters.--The matters referred to in this 
     subsection with respect to a member of the Armed Forces are 
     as follows:
       (1) The duties and assignments of the member, including the 
     location of such duties and assignments.
       (2) Any exposures of the member in the course of such 
     duties and assignments to toxic or hazardous substances.
       (3) Any illness or injury of the member incurred or 
     aggravated in the course of such duties and assignments.
       (d) Elements of Protocols.--The protocols on the sharing of 
     information developed under subsection (a) shall include the 
     following:
       (1) Mechanisms to ensure that the Department of Veterans 
     Affairs receives information to facilitate the timely and 
     accurate assessment of the illnesses or injuries of a member 
     of the Armed Forces that may have been incurred or aggravated 
     by the members's exposure to toxic or hazardous substances 
     during service in the Armed Forces.
       (2) Mechanisms that provide, to the maximum extent 
     practicable consistent with the national security interests 
     of the United States, for the declassification of information 
     necessary to achieve the purpose of the protocols.
       (3) Procedures to ensure that information is shared under 
     the protocols as a matter of routine operations of the 
     Department of Defense and the Department of Veterans Affairs.
       (e) Report.--Not later than one year after the date of the 
     enactment of this Act, the Secretary of Defense and the 
     Secretary of Veterans Affairs shall jointly submit to 
     Congress a report on the protocols developed under subsection 
     (a). The report shall include such recommendations for 
     legislative or administrative action as the Secretaries 
     consider appropriate.
       (f) Funding.--
       (1) Department of defense.--Amounts authorized to be 
     appropriated for fiscal year 2006 for the Department of 
     Defense for operation and maintenance, defense-wide, shall be 
     available for the development of protocols under subsection 
     (a).
       (2) Department of veterans affairs.--Amounts authorized to 
     be appropriated for fiscal year 2006 for the Department of 
     Veterans Affairs shall be available for the development of 
     protocols under subsection (a).

     SEC. 308. COORDINATION OF LONG-TERM RESEARCH ON HEALTH CARE.

       (a) Department of Veterans Affairs Representative on Armed 
     Force Epidemiological Board.--
       (1) In general.--The Secretary of Defense shall appoint to 
     the Armed Forces Epidemiological Board, as an ex officio 
     member, an officer of the Department of Veterans Affairs 
     designated by the Secretary of Veterans Affairs for the 
     purpose of this subsection.
       (2) Purpose.--The purpose of the appointment under this 
     subsection is to ensure that the Armed Forces Epidemiological 
     Board considers and takes into account the views and 
     recommendations of the Department of Veterans Affairs in 
     providing advice to the Assistant Secretary of Defense for 
     Health Affairs and the surgeons general of the Armed Forces.
       (b) Department of Veterans Affairs Representative on 
     Department of Defense Safety and Occupational Health 
     Committee.--
       (1) In general.--The Secretary of Defense shall appoint to 
     the Department of Defense Safety and Occupational Health 
     Committee, as an ex officio member, an officer of the 
     Department of Veterans Affairs designated by the Secretary of 
     Veterans Affairs for the purpose of this subsection.
       (2) Purpose.--The purpose of the appointment under 
     paragraph (1) is to ensure that the Department of Defense and 
     the Department of Veterans Affairs establish and maintain 
     effective collaboration on matters relating to occupational 
     safety and health of current and former members of the Armed 
     Forces.
       (c) Annual Report on Force Health Protection.--Not later 
     than March 1 each year, the Secretary of Defense and the 
     Secretary of Veterans Affairs shall jointly submit to 
     Congress each year a report on the efforts of the Department 
     of Defense and Department of Veterans Affairs, respectively, 
     during the preceding calendar year, to accomplish the 
     following:
       (1) The identification of illnesses and injuries incurred 
     or aggravated by members of the Armed Forces during service 
     in the Armed Forces through exposure to occupational hazards 
     and other toxic and hazardous substances.
       (2) The treatment of members of the Armed Forces and 
     veterans for illnesses and injuries described in paragraph 
     (1).
       (3) The conduct of epidemiological studies on the health 
     consequences of the exposure of members of the Armed Forces 
     to occupational hazards and other toxic and hazardous 
     substances during service in the Armed Forces.
       (4) The development of guidance and other information on 
     policies and practices intended to prevent, reduce, or 
     mitigate the exposure of members of the Armed Forces to 
     occupational hazards and other toxic and hazardous substances 
     during service in the Armed Forces.

    TITLE IV--INCREASED GOVERNMENT COMMITMENT TO VETERANS' EDUCATION

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Montgomery GI Bill for the 
     21st Century Act''.

     SEC. 402. FINDINGS.

       Congress makes the following findings:
       (1) 2004 marked the 60th anniversary of the Servicemen's 
     Readjustment Act of 1944, better known as the G.I. Bill. Out 
     of an eligible population of 15,500,000 veterans, nearly 
     8,000,000 received education or training as a result of this 
     legislation, one of the most successful Federal Government 
     programs in United States history.
       (2) Since Congress first enacted the G.I. Bill, veterans' 
     benefits have been updated to keep pace with changing times. 
     Over 21,000,000 veterans have now received educational 
     assistance through the G.I. Bill and its successors.
       (3) Congress has a duty to ensure that the VA can continue 
     to offer an education assistance program that robustly 
     supports veterans' efforts to obtain higher education and 
     make a successful transition from military to civilian life.

     SEC. 403. EXCLUSION OF BASIC PAY CONTRIBUTIONS FOR 
                   PARTICIPATION IN BASIC EDUCATIONAL ASSISTANCE 
                   IN CERTAIN COMPUTATIONS ON STUDENT FINANCIAL 
                   AID.

       (a) Exclusion.--Subchapter II of chapter 30 of title 38, 
     United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 3020A. Exclusion of basic pay contributions in certain 
       computations on student financial aid

       ``(a) In General.--The expected family contribution 
     computed under section 475, 476, or 477 of the Higher 
     Education Act of 1965 (20 U.S.C. 1087oo, 1087pp, 1087qq) for 
     a covered student shall be decreased by $1,200 for the 
     applicable year.
       ``(b) Definitions.--In this section:
       ``(1) The term `academic year' has the meaning given the 
     term in section 481(a)(2) of the Higher Education Act of 1965 
     (20 U.S.C. 1088(a)(2)).
       ``(2) The term `applicable year' means the first academic 
     year for which a student uses entitlement to basic 
     educational assistance under this chapter.
       ``(3) The term `covered student' means any individual 
     entitled to basic educational assistance under this chapter 
     whose basic pay or voluntary separation incentives was or 
     were subject to reduction under section 3011(b), 3012(c), 
     3018(c), 3018A(b), or 3018B(b) of this title.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 3020 the following new item:

``3020A. Exclusion of basic pay contributions in certain computations 
              on student financial aid.''.

[[Page S174]]

     SEC. 404. OPPORTUNITY FOR ENROLLMENT IN BASIC EDUCATIONAL 
                   ASSISTANCE PROGRAM OF CERTAIN INDIVIDUALS WHO 
                   PARTICIPATED OR WERE ELIGIBLE TO PARTICIPATE IN 
                   POST-VIETNAM ERA VETERANS EDUCATIONAL 
                   ASSISTANCE PROGRAM.

       (a) Opportunity for Enrollment.--Section 3018C(e) of title 
     38, United States Code, is amended--
       (1) in paragraph (1), by inserting ``or (3)'' after 
     ``paragraph (2)'';
       (2) by redesignating paragraphs (3), (4), and (5) as 
     paragraphs (4), (5), and (6), respectively;
       (3) by inserting after paragraph (2) the following new 
     paragraph (3):
       ``(3) A qualified individual referred to in paragraph (1) 
     is also an individual who meets each of the following 
     requirements:
       ``(A) The individual is a participant in the educational 
     benefits program under chapter 32 of this title as of the 
     date of the enactment of the Montgomery GI Bill for the 21st 
     Century Act, or was eligible to participate in such program, 
     but had not participated in that program or any other 
     educational benefits program under this title, as of that 
     date.
       ``(B) The individual meets the requirements of subsection 
     (a)(3).
       ``(C) The individual, when discharged or released from 
     active duty, is discharged or released therefrom with an 
     honorable discharge.'';
       (4) in paragraph (5), as so redesignated, by striking 
     ``paragraph (3)(A)(ii)'' and inserting ``paragraph 
     (4)(A)(ii)''; and
       (5) in paragraph (6), as so redesignated, by inserting ``, 
     or individuals eligible to participate in that program who 
     have not participated in that program or any other 
     educational benefits program under this title,'' after 
     ``chapter 32 of this title''.
       (b) Conforming and Clerical Amendments.--(1) The heading of 
     such section is amended to read as follows:

     ``Sec. 3018C. Opportunity to enroll: certain VEAP 
       participants; certain individuals eligible for 
       participation in VEAP''.

       (2) The table of sections at the beginning of chapter 30 of 
     such title is amended by striking the item relating to 
     section 3018C and inserting the following new item:

``3018C. Opportunity to enroll: certain VEAP participants; certain 
              individuals eligible for participation in VEAP.''.

     SEC. 405. COMMENCEMENT OF 10-YEAR DELIMITING PERIOD FOR 
                   VETERANS, SURVIVORS, AND DEPENDENTS WHO ENROLL 
                   IN TRAINING PROGRAM.

       (a) Veterans.--Section 3031 of title 38, United States 
     Code, is amended--
       (1) in subsection (a), by striking ``through (g), and 
     subject to subsection (h)'' and inserting ``through (h), and 
     subject to subsection (i)'';
       (2) by redesignating subsection (h) as subsection (i); and
       (3) by inserting after subsection (g) the following new 
     subsection (h):
       ``(h) In the case of an individual eligible for educational 
     assistance under this chapter who, during the 10-year period 
     described in subsection (a) of this section, enrolls in a 
     program of training under this chapter, the period during 
     which the individual may use the individual's entitlement to 
     educational assistance under this chapter expires on the last 
     day of the 10-year period beginning on the first day of the 
     individual's pursuit of such program of training.''.
       (b) Eligible Children.--Subsection (a) of section 3512 of 
     such title is amended--
       (1) in paragraph (6)(B), by striking ``and'' at the end;
       (2) in paragraph (7), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(8) if the person enrolls in a program of special 
     restorative training under subchapter V of this chapter, such 
     period shall begin on the first day of the person's pursuit 
     of such program of special restorative training.''.
       (c) Eligible Surviving Spouses.--Subsection (b) of such 
     section is amended by adding at the end the following new 
     paragraph:
       ``(3) Notwithstanding the provisions of paragraph (1) of 
     this subsection, any eligible person (as defined in section 
     3501(a)(1)(B) or (D)(ii) of this title) who, during the 10-
     year period described in paragraph (1) of this subsection, 
     enrolls in a program of special restorative training under 
     subchapter V of this chapter may be afforded educational 
     assistance under this chapter during the 10-year period 
     beginning on the first day of the individual's pursuit of 
     such program of special restorative training.''.
                                 ______
                                 
      By Mr. BINGAMAN (for himself, Mr. Reid, Mr. Kennedy, Mr. Corzine, 
        Mr. Durbin, Mr. Reed, Mr. Schumer, Mr. Dodd, Mr. Harkin, Ms. 
        Mikulski, Ms. Stabenow, Mr. Lautenberg, Mrs. Feinstein, Mrs. 
        Clinton, Mr. Inouye, Mr. Rockefeller, Mr. Sarbanes, and Mr. 
        Dayton):
  S. 15. A bill to improve education for all students, and for other 
purposes; to the Committee on Finance
  Mr. BINGAMAN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 15

       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 ``Quality Education for All 
     Act''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

       TITLE I--STRENGTHENING HEAD START AND CHILD CARE PROGRAMS

          Subtitle A--Increasing Access to Head Start Programs

Sec. 101. Authorization of appropriations.
Sec. 102. Strengthening Indian and migrant and seasonal Head Start 
              programs.
Sec. 103. Expanding Early Head Start programs.
Sec. 104. Participation in Head Start programs.

   Subtitle B--Enhancing the School Readiness of Head Start Children

Sec. 111. School readiness standards.
Sec. 112. Staff.

     Subtitle C--Expanding Access to Quality, Affordable Child Care

Sec. 121. Authorization of appropriations.

          Subtitle D--Strengthening the Quality of Child Care

Sec. 131. State plan requirements relating to training.
Sec. 132. Strengthening the quality of child care.

  TITLE II--PROVIDING SAFE, RELIABLE TRANSPORTATION FOR RURAL SCHOOL 
                                CHILDREN

Sec. 201. Findings and purpose.
Sec. 202. Definitions.
Sec. 203. Grant program.
Sec. 204. Authorization of appropriations.

TITLE III--SENSE OF THE SENATE REGARDING FULLY FUNDING THE INDIVIDUALS 
                WITH DISABILITIES EDUCATION ACT BY 2011

Sec. 301. Findings.
Sec. 302. Sense of the Senate regarding authorization of 
              appropriations.

      TITLE IV--IMPROVEMENT OF ELEMENTARY AND SECONDARY EDUCATION

 Subtitle A--Public School Choice, Supplemental Educational Services, 
                          and Teacher Quality

Sec. 401. Public school choice capacity.
Sec. 402. Supplemental educational services.
Sec. 403. Qualifications for teachers and paraprofessionals.

          Subtitle B--Adequate Yearly Progress Determinations

Sec. 421. Review of adequate yearly progress determinations for schools 
              for the 2002-2003 school year.
Sec. 422. Review of adequate yearly progress determinations for local 
              educational agencies for the 2002-2003 school year.
Sec. 423. Definitions.

                    Subtitle C--Technical Assistance

Sec. 451. Technical assistance.

            TITLE V--IMPROVING ASSESSMENT AND ACCOUNTABILITY

Sec. 501. Grants for increasing data capacity for purposes of 
              assessment and accountability.
Sec. 502. Grants for assessment of children with disabilities and 
              children who are limited English proficient.
Sec. 503. Reports on student enrollment and graduation rates.
Sec. 504. Civil rights.

  TITLE VI--SENSE OF THE SENATE REGARDING FUNDING FOR ELEMENTARY AND 
                          SECONDARY EDUCATION

Sec. 601. Sense of the Senate.

    TITLE VII--PROVIDING A ROADMAP FOR FIRST GENERATION COLLEGE FOR 
                                STUDENTS

Sec. 701. Expansion of TRIO and GEARUP.

  TITLE VIII--COLLEGE TUITION RELIEF FOR STUDENTS AND THEIR FAMILIES 
                          THROUGH PELL GRANTS

Sec. 801. Pell Grants tax tables hold harmless.
Sec. 802. Sense of the Senate regarding increasing the maximum Pell 
              Grant.
Sec. 803. Establishment of a Pell demonstration program.

 TITLE IX--TUITION FREE COLLEGE FOR MATHEMATICS, SCIENCE, AND SPECIAL 
                           EDUCATION TEACHERS

Sec. 901. Purpose.
Sec. 902. Tuition free college for mathematics, science, and special 
              education teachers.
Sec. 903. Offset for tuition free college for mathematics, science, and 
              special education teachers.

          TITLE X--MAKING COLLEGE AFFORDABLE FOR ALL STUDENTS

Sec. 1001. Expansion of deduction for higher education expenses.
Sec. 1002. Credit for interest on higher education loans.
Sec. 1003. Hope and Lifetime Learning credits to be refundable.

[[Page S175]]

       TITLE I--STRENGTHENING HEAD START AND CHILD CARE PROGRAMS

          Subtitle A--Increasing Access to Head Start Programs

     SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

       Section 639(a) of the Head Start Act (42 U.S.C. 9834(a)) is 
     amended by striking ``such sums'' and all that follows and 
     inserting the following: ``$8,570,000,000 for fiscal year 
     2006, $10,445,000,000 for fiscal year 2007, $12,384,000,000 
     for fiscal year 2008, $14,334,000,000 for fiscal year 2009, 
     and $16,332,000,000 for fiscal year 2010.''.

     SEC. 102. STRENGTHENING INDIAN AND MIGRANT AND SEASONAL HEAD 
                   START PROGRAMS.

       Section 640(a)(2) of the Head Start Act (42 U.S.C. 
     9835(a)(2)) is amended by striking subparagraph (A) and 
     inserting the following:
       ``(A) Indian Head Start programs, services for children 
     with disabilities, and migrant and seasonal Head Start 
     programs, except that the Secretary shall reserve for each 
     fiscal year for use by Indian Head Start and migrant and 
     seasonal Head Start programs (referred to in this 
     subparagraph as `covered programs'), on a nationwide basis, a 
     sum that is the total of not less than 4 percent of the 
     amount appropriated under section 639(a) for that fiscal year 
     (for Indian Head Start programs), and not less than 5 percent 
     of that appropriated amount (for migrant and seasonal Head 
     Start programs), except that--
       ``(i) if reserving the specified percentages for covered 
     programs and would reduce the number of children served by 
     Head Start programs, relative to the number of children 
     served on the date of enactment of the Quality Education for 
     All Act, taking into consideration an appropriate adjustment 
     for inflation, the Secretary shall reserve percentages that 
     approach, as closely as practicable, the specified 
     percentages and that do not cause such a reduction; and
       ``(ii) notwithstanding any other provision of this 
     subparagraph, the Secretary shall reserve for each fiscal 
     year for use by Indian Head Start programs and by migrant and 
     seasonal Head Start programs, on a nationwide basis, not less 
     than the amount that was obligated for use by Indian Head 
     Start programs and by migrant and seasonal Head Start 
     programs, respectively, for the previous fiscal year;''.

     SEC. 103. EXPANDING EARLY HEAD START PROGRAMS.

       Section 640(a)(6) of the Head Start Act (42 U.S.C. 
     9835(a)(6)) is amended--
       (1) in subparagraph (A), by striking ``7.5 percent for 
     fiscal year 1999'' and all that follows and inserting ``12 
     percent for fiscal year 2006, 14 percent for fiscal year 
     2007, 16 percent for fiscal year 2008, 18 percent for fiscal 
     year 2009, and 20 percent for fiscal year 2010, of the amount 
     appropriated pursuant to section 639(a).'';
       (2) by striking subparagraph (B); and
       (3) by redesignating subparagraph (C) as subparagraph (B).

     SEC. 104. PARTICIPATION IN HEAD START PROGRAMS.

        Section 645 of the Head Start Act (42 U.S.C. 9840) is 
     amended--
       (1) in subsection (a)(1)(A), by inserting ``130 percent 
     of'' after ``below''; and
       (2) by adding at the end the following:
       ``(e) After demonstrating a need through a community needs 
     assessment, a Head Start agency may apply to the Secretary to 
     convert part-day sessions, particularly consecutive part-day 
     sessions, into full-day sessions.''.

   Subtitle B--Enhancing the School Readiness of Head Start Children

     SEC. 111. SCHOOL READINESS STANDARDS.

       Section 641A(a)(1)(B)(ii) of the Head Start Act (42 U.S.C. 
     9836(a)(1)(B)(ii)) is amended by striking ``at a minimum'' 
     and all that follows and inserting the following: ``at a 
     minimum, develop and demonstrate--
       ``(I) language skills, including an expanded use of 
     vocabulary;
       ``(II) interest in and appreciation of books, reading, and 
     writing (either alone or with others), phonological and 
     phonemic awareness, and varied modes of expression and 
     communication;
       ``(III) premathematics knowledge and skills, including 
     knowledge and skills relating to aspects of classification, 
     seriation, numbers, spatial relations, and time;
       ``(IV) cognitive abilities related to academic achievement;
       ``(V) abilities related to social and emotional 
     development;
       ``(VI) gross and fine motor skills; and
       ``(VII) in the case of children with limited English 
     proficiency, abilities related to progress toward acquisition 
     of the English language.''.

     SEC. 112. STAFF.

       (a) Staff Qualifications and Development.--Section 648A of 
     the Head Start Act (42 U.S.C. 9843a) is amended--
       (1) in subsection (a)(2)--
       (A) in subparagraph (A)--
       (i) in the matter preceding clause (i), by striking ``not 
     later than September 30, 2003'' and all that follows through 
     ``programs have'' and inserting ``not later than the date 
     determined under subparagraph (D) for a Head Start region, 
     each Head Start agency in the region with a center-based 
     program shall ensure that all classrooms in the program have 
     at least 1 teacher who has'';
       (ii) in clause (i), strike ``an associate, baccalaureate,'' 
     and insert ``a baccalaureate''; and
       (iii) in clause (ii), strike ``an associate, 
     baccalaureate,'' and insert ``a baccalaureate''; and
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B) Temporary requirement.--Until the date determined 
     under subparagraph (D) for a Head Start region, the Secretary 
     shall ensure that at least 50 percent of all Head Start 
     teachers in the region in center-based programs have--
       ``(i) an associate, baccalaureate, or advanced degree in 
     early childhood education; or
       ``(ii) an associate, baccalaureate, or advanced degree in a 
     field related to early childhood education, with experience 
     in teaching preschool children.
       ``(C) Requirement for new head start teachers.--Not later 
     than 3 years after the date of enactment of the Quality 
     Education for All Act, the Secretary shall require that all 
     teachers hired nationwide in center-based programs of Head 
     Start agencies following the date of the requirement--
       ``(i) have an associate, baccalaureate, or advanced degree 
     in early childhood education;
       ``(ii) have an associate, baccalaureate, or advanced degree 
     in a field related to early childhood education, with 
     experience in teaching preschool children; or
       ``(iii) be enrolled, or enroll not later than 1 year after 
     the date of hire, in a program of study leading to an 
     associate degree in early childhood education.
       ``(D) Appropriate date.--The Secretary shall determine an 
     appropriate date for Head Start agencies in each Head Start 
     region to reach the result described in subparagraph (A), but 
     in no case shall such a date be later than 8 years after the 
     date of enactment of Quality Education for All Act.
       ``(E) Progress.--
       ``(i) Requirement.--The Secretary shall require Head Start 
     agencies with center-based programs to demonstrate continuing 
     and consistent progress each year to reach the results 
     described in subparagraphs (A) and (C).
       ``(ii) Plan.--Each State shall establish a plan for the 
     Head Start agencies with center-based programs in the State 
     to reach the results described in subparagraphs (A) and (C).
       ``(iii) Progress.--Each Head Start agency shall prepare and 
     submit to the Secretary and the Governor of the State a 
     report indicating the number and percentage of its teachers 
     in center-based programs with child development associate 
     credentials or associate, baccalaureate, or advanced degrees 
     in early childhood education or a field related to early 
     childhood education. The Secretary shall compile all such 
     reports and submit a summary of the compiled reports to the 
     Committee on Health, Education, Labor, and Pensions of the 
     Senate and the Committee on Education and the Workforce of 
     the House of Representatives.'';
       (2) in subsection (a)(3), by striking ``(2)(A)'' and 
     inserting ``(2)(B)''; and
       (3) by adding at the end the following:
       ``(f) Pre-Literacy and Language Training.--To support local 
     efforts to enhance early language and pre-literacy 
     development of children in Head Start programs, and to 
     provide the children with high-quality oral language skills 
     and environments that are rich in literature, in which to 
     acquire early language and pre-literacy skills, each Head 
     Start agency shall ensure that all of the agency's Head Start 
     teachers receive ongoing training in language and emergent 
     literacy. Such training shall also include information 
     regarding appropriate curricula and assessments to improve 
     instruction and learning. Such training shall include 
     training in methods to promote phonological and phonemic 
     awareness and vocabulary development in an age-appropriate 
     and culturally and linguistically appropriate manner.
       ``(g) Professional Development Plans.--Each Head Start 
     agency and center shall create, in consultation with 
     employees of the agency or center (including family service 
     workers), a professional development plan for employees who 
     provide direct services to children, including a plan for 
     teachers, to meet the requirements set forth in subsection 
     (a).''.
       (b) Attracting and Retaining High-Quality Head Start 
     Teachers; Tribal College or University-Head Start Partnership 
     Program.--
       (1) Program.--The Head Start Act is amended by inserting 
     after section 648A (42 U.S.C. 9843a) the following:

     ``SEC. 648B. ATTRACTING AND RETAINING HIGH-QUALITY HEAD START 
                   TEACHERS.

       ``(a) In General.--The Secretary shall make grants to 
     eligible Head Start agencies to enable the agencies to reach 
     the results described in subparagraphs (A) and (C) of section 
     648A(a)(2). The Secretary shall make the grants from 
     allotments determined under subsection (b).
       ``(b) Allotments.--From the funds made available under 
     section 639(c) for a fiscal year and not reserved under 
     subsection (d), the Secretary shall allot to each Head Start 
     agency an amount that bears the same relationship to such 
     funds as the amount received by the agency under section 640 
     for that fiscal year bears to the amount received by all Head 
     Start agencies under section 640 for that fiscal year.
       ``(c) Salary Plan.--A Head Start agency that receives a 
     grant under this section shall develop and carry out a plan 
     to raise the average salaries of teachers in the agency's 
     Head Start programs. In developing the plan, the agency shall 
     take into consideration the training, level of education, and 
     experience of the teachers, and the average salaries of

[[Page S176]]

     prekindergarten and kindergarten teachers employed by the 
     local educational agency for the school district in which the 
     Head Start agency is located, with similar training, level of 
     education, and experience.
       ``(d) Salaries in High-Cost Areas.--The Secretary may 
     reserve and use a portion of the funds available under 
     section 639(c) to assist Head Start agencies located in high-
     cost areas to help reduce the discrepancy between such 
     average salaries of such teachers and such average salaries 
     of such prekindergarten and kindergarten teachers.

     ``SEC. 648C. TRIBAL COLLEGE OR UNIVERSITY-HEAD START 
                   PARTNERSHIP PROGRAM.

       ``(a) Tribal College or University-Head Start Partnership 
     Program.--
       ``(1) Grants.--The Secretary is authorized to award grants, 
     of not less than 5 years duration, to Tribal Colleges and 
     Universities to--
       ``(A) implement education programs that include tribal 
     culture and language and increase the number of associate, 
     baccalaureate, and graduate degrees in early childhood 
     education and related fields that are earned by Indian Head 
     Start agency staff members, parents of children served by 
     such an agency, and members of the tribal community involved;
       ``(B) develop and implement the programs under subparagraph 
     (A) in technology-mediated formats; and
       ``(C) provide technology literacy programs for Indian Head 
     Start agency staff members and children and families of 
     children served by such an agency.
       ``(2) Staffing.--The Secretary shall ensure that the 
     American Indian Programs Branch of the Head Start Bureau of 
     the Department of Health and Human Services shall have 
     staffing sufficient to administer the programs under this 
     section and to provide appropriate technical assistance to 
     Tribal Colleges and Universities receiving grants under this 
     section.
       ``(b) Application.--Each Tribal College or University 
     desiring a grant under this section shall submit an 
     application to the Secretary, at such time, in such manner, 
     and containing such information as the Secretary may require, 
     including a certification that the Tribal College or 
     University has established a partnership with 1 or more 
     Indian Head Start agencies for the purpose of conducting the 
     activities described in subsection (a).
       ``(c) Definitions.--In this section:
       ``(1) Institution of higher education.--The term 
     `institution of higher education' has the meaning given such 
     term in section 101(a) of the Higher Education Act of 1965 
     (20 U.S.C. 1001(a)).
       ``(2) Tribal college or university.--The term `Tribal 
     College or University' means an institution--
       ``(A) defined by such term in section 316(b) of the Higher 
     Education Act of 1965 (20 U.S.C. 1059c(b)); and
       ``(B) determined to be accredited or a candidate for 
     accreditation by a nationally recognized accrediting agency 
     or association.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $10,000,000 for fiscal year 2006 and such sums as may be 
     necessary for each of fiscal years 2007 through 2010.''.
       (2) Authorization of appropriations.--Section 639 of the 
     Head Start Act (42 U.S.C. 9834) is amended--
       (A) in subsection (a), by inserting ``(other than section 
     648B)'' after ``this subchapter''; and
       (B) by adding at the end the following:
       ``(c) There are authorized to be appropriated to carry out 
     section 648B $387,000,000 for fiscal year 2006, $496,000,000 
     for fiscal year 2007, $608,000,000 for fiscal year 2008, 
     $723,000,000 for fiscal year 2009, and $841,000,000 for 
     fiscal year 2010.''.
       (3) Conforming amendments.--Section 640 of the Head Start 
     Act (42 U.S.C. 9835) is amended--
       (A) in subsection (a)--
       (i) in paragraph (1), by striking ``section 639'' and 
     inserting ``section 639(a)'';
       (ii) in paragraph (2)--

       (I) in the matter preceding subparagraph (A), by inserting 
     ``pursuant to section 639(a)'' after ``appropriated'';
       (II) in subparagraph (B), in the matter following clause 
     (ii), by inserting ``pursuant to section 639(a)'' after 
     ``appropriated''; and
       (III) in subparagraph (C), by inserting ``pursuant to 
     section 639(a)'' after ``appropriated'' each place it 
     appears; and

       (iii) in paragraph (4), in the matter preceding 
     subparagraph (A), by inserting ``pursuant to section 639(a)'' 
     after ``appropriated''; and
       (B) in subsection (g)(1), by inserting ``pursuant to 
     section 639(a)'' after ``appropriated'' each place it 
     appears.

     Subtitle C--Expanding Access to Quality, Affordable Child Care

     SEC. 121. AUTHORIZATION OF APPROPRIATIONS.

       Section 658B of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858) is amended--
       (1) by striking ``is'' and inserting ``are''; and
       (2) by striking ``subchapter'' and all that follows and 
     inserting ``subchapter $3,100,000,000 for fiscal year 2006, 
     $4,100,000,000 for fiscal year 2007, $5,100,000,000 for 
     fiscal year 2008, $6,100,000,000 for fiscal year 2009, and 
     $7,100,000,000 for fiscal year 2010.''.

          Subtitle D--Strengthening the Quality of Child Care

     SEC. 131. STATE PLAN REQUIREMENTS RELATING TO TRAINING.

       Section 658E(c) of the Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C. 9858c(c)) is amended by adding 
     at the end the following:
       ``(6) Training in early learning and childhood 
     development.--The State plan shall describe any training 
     requirements that are in effect within the State that are 
     designed to enable child care providers to promote the 
     social, emotional, physical, and cognitive development of 
     children and that are applicable to child care providers that 
     provide services for which assistance is made available under 
     this subchapter in the State.''.

     SEC. 132. STRENGTHENING THE QUALITY OF CHILD CARE.

       Section 658G of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858e) is amended to read as follows:

     ``SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

       ``(a) In General.--
       ``(1) Reservation.--Each State that receives funds 
     appropriated under section 639(a) for a fiscal year shall 
     reserve and use not less than 6 percent of the funds for 
     activities provided directly, or through grants or contracts 
     with resource and referral organizations or other appropriate 
     entities, that are designed to improve the quality of child 
     care services.
       ``(2) Activities.--The funds reserved under paragraph (1) 
     may only be used to--
       ``(A) develop and implement voluntary guidelines on pre-
     reading and language skills and activities, for child care 
     programs in the State, that are aligned with State standards 
     for kindergarten through grade 12 or the State's general 
     goals for school preparedness;
       ``(B) support activities and provide technical assistance 
     in child care settings to enhance early learning for young 
     children, to promote literacy, and to foster school 
     preparedness;
       ``(C) offer training, professional development, and 
     educational opportunities for child care providers that 
     relate to the use of developmentally appropriate and age-
     appropriate curricula, and early childhood teaching 
     strategies, that are scientifically based and aligned with 
     the social, emotional, physical, and cognitive development of 
     children, including--
       ``(i) developing and operating distance learning child care 
     training infrastructures;
       ``(ii) developing model technology-based training courses;
       ``(iii) offering training for caregivers in informal child 
     care settings; and
       ``(iv) offering training for child care providers who care 
     for infants and toddlers and children with special needs;
       ``(D) engage in programs designed to increase the retention 
     and improve the competencies of child care providers, 
     including wage incentive programs and initiatives that 
     establish tiered payment rates for providers that meet or 
     exceed child care services guidelines, as defined by the 
     State;
       ``(E) evaluate and assess the quality and effectiveness of 
     child care programs and services offered in the State to 
     young children on improving overall school preparedness; and
       ``(F) carry out other activities determined by the State to 
     improve the quality of child care services provided in the 
     State and for which measurement of outcomes relating to 
     improved child safety, child well-being, or school 
     preparedness is possible.
       ``(b) Certification.--For each fiscal year beginning after 
     September 30, 2005, the State shall annually submit to the 
     Secretary a certification in which the State certifies and 
     demonstrates that the State was in compliance with subsection 
     (a) during the preceding fiscal year and describes how the 
     State used funds made available to carry out this subchapter 
     to comply with subsection (a) during that preceding fiscal 
     year.''.

  TITLE II--PROVIDING SAFE, RELIABLE TRANSPORTATION FOR RURAL SCHOOL 
                                CHILDREN

     SEC. 201. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) school transportation issues have concerned parents, 
     local educational agencies, lawmakers, the National Highway 
     Traffic Safety Administration, the National Transportation 
     Safety Board, and the Environmental Protection Agency for 
     years;
       (2) millions of children face potential future health 
     problems because of exposure to noxious fumes emitted from 
     older school buses;
       (3) the Environmental Protection Agency established the 
     Clean School Bus USA program to replace 129,000 of the oldest 
     diesel buses that cannot be retrofitted in an effort to help 
     children and the environment by improving air quality;
       (4) unfortunately, many rural local educational agencies 
     are unable to participate in that program because of the 
     specialized fuels needed to sustain a clean bus fleet;
       (5) many rural local educational agencies are operating 
     outdated, unsafe school buses that are failing inspections 
     because of automotive flaws, resulting in the depletion of 
     the school bus fleets of the local educational agencies; and
       (6) many rural local educational agencies are unable to 
     afford to buy newer, safer buses.
       (b) Purpose.--The purpose of this title is to establish 
     within the Department of Education a Federal cost-sharing 
     program to assist rural local educational agencies with 
     older, unsafe school bus fleets in purchasing newer, safer 
     school buses.

[[Page S177]]

     SEC. 202. DEFINITIONS.

       In this title:
       (1) Rural local educational agency.--The term ``rural local 
     educational agency'' means a local educational agency, as 
     defined in section 9101 of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 7801), with respect to 
     which--
       (A) each county in which a school served by the local 
     educational agency is located has a total population density 
     of fewer than 10 persons per square mile;
       (B) all schools served by the local educational agency are 
     designated with a school locale code of 7 or 8, as determined 
     by the Secretary; or
       (C) all schools served by the local educational agency have 
     been designated, by official action taken by the legislature 
     of the State in which the local educational agency is 
     located, as rural schools for purposes relating to the 
     provision of educational services to students in the State.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (3) School bus.--The term ``school bus'' means a vehicle 
     the primary purpose of which is to transport students to and 
     from school or school activities.

     SEC. 203. GRANT PROGRAM.

       (a) In General.--From amounts appropriated under subsection 
     (e) for a fiscal year, the Secretary shall provide grants, on 
     a competitive basis, to rural local educational agencies to 
     pay the Federal share of the cost of purchasing new school 
     buses.
       (b) Application.--
       (1) In general.--Each rural local educational agency that 
     seeks to receive a grant under this title shall submit to the 
     Secretary for approval an application at such time, in such 
     manner, and accompanied by such information (in addition to 
     information required under paragraph (2)) as the Secretary 
     may require.
       (2) Contents.--Each application submitted under paragraph 
     (1) shall include--
       (A) documentation that, of the total number of school buses 
     operated by the rural local educational agency, not less than 
     50 percent of the school buses are in need of repair or 
     replacement;
       (B) documentation of the number of miles that each school 
     bus operated by the rural local educational agency traveled 
     in the most recent 9-month academic year;
       (C) documentation that the rural local educational agency 
     is operating with a reduced fleet of school buses;
       (D) a certification from the rural local educational agency 
     that--
       (i) authorizes the application of the rural local 
     educational agency for a grant under this title; and
       (ii) describes the dedication of the rural local 
     educational agency to school bus replacement programs and 
     school transportation needs (including the number of new 
     school buses needed by the rural local educational agency); 
     and
       (E) an assurance that the rural local educational agency 
     will pay the non-Federal share of the cost of the purchase of 
     new school buses under this title from non-Federal sources.
       (c) Priority.--In providing grants under this title, the 
     Secretary shall give priority to rural local educational 
     agencies that, as determined by the Secretary--
       (1) are transporting students in a bus manufactured before 
     1977;
       (2) have a grossly depleted fleet of school buses; or
       (3) serve a school that is required, under section 
     1116(b)(9) of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 6316(b)(9)), to provide transportation to 
     students to enable the students to transfer to another public 
     school served by the rural local educational agency.
       (d) Use of Funds.--School buses purchased with grant funds 
     awarded under subsection (a) shall be in compliance with 
     proposed air quality regulations and standards of the 
     Environmental Protection Agency for 2006.
       (e) Payments; Federal Share.--
       (1) Payments.--The Secretary shall pay to each rural local 
     educational agency having an application approved under this 
     section the Federal share described in paragraph (2) of the 
     cost of purchasing such number of new school buses as is 
     specified in the approved application.
       (2) Federal share.--The Federal share of the cost of 
     purchasing a new school bus under this title shall be 75 
     percent.

     SEC. 204. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     title $50,000,000 for fiscal year 2006 and such sums as may 
     be necessary for each of fiscal years 2007 through 2010.

TITLE III--SENSE OF THE SENATE REGARDING FULLY FUNDING THE INDIVIDUALS 
                WITH DISABILITIES EDUCATION ACT BY 2011

     SEC. 301. FINDINGS.

       (a) Findings.--The Senate finds the following:
       (1) Disability is a natural part of the human experience 
     and in no way diminishes the right of individuals to 
     participate in or contribute to society. Improving 
     educational results for children with disabilities is an 
     essential element of our national policy of ensuring equality 
     of opportunity, full participation, independent living, and 
     economic self-sufficiency for individuals with disabilities.
       (2) Before the date of enactment of the Education for All 
     Handicapped Children Act of 1975 (Public Law 94-142), the 
     predecessor to the Individuals with Disabilities Education 
     Act (20 U.S.C. 1400 et seq.), the educational needs of 
     millions of children with disabilities were not being fully 
     met because--
       (A) the children did not receive appropriate educational 
     services;
       (B) the children were excluded entirely from the public 
     school system and from being educated with their peers;
       (C) undiagnosed disabilities prevented the children from 
     having a successful educational experience; or
       (D) a lack of adequate resources within the public school 
     system forced such families to find services outside the 
     public school system.
       (3) The Individuals with Disabilities Education Act has 
     been successful in ensuring children with disabilities and 
     the families of such children access to a free appropriate 
     public education and in improving educational results for 
     children with disabilities.
       (4) The implementation of the Individuals with Disabilities 
     Education Act has been impeded by the Federal Government's 
     failure to honor the commitment it made 30 years ago to 
     provide States with 40 percent of the excess costs of special 
     education.
       (5) While States, local educational agencies, and 
     educational service agencies are primarily responsible for 
     providing an education for all children with disabilities, it 
     is in the national interest that the Federal Government have 
     a supporting role in assisting State and local efforts to 
     educate children with disabilities in order to improve 
     results for such children and to ensure equal protection of 
     the law.
       (6) Congress passed authorizing language to fully fund the 
     Individuals with Disabilities Education Act and should 
     appropriate such sums as authorized.
       (7) A more equitable allocation of resources is essential 
     for the Federal Government to meet its responsibility to 
     provide an equal educational opportunity for all individuals.

     SEC. 302. SENSE OF THE SENATE REGARDING AUTHORIZATION OF 
                   APPROPRIATIONS.

        It is the sense of the Senate that for the purpose of 
     carrying out the Federal Government's commitment to children, 
     parents, and the States, there should be authorized to be 
     appropriated--
       (1) $14,648,647,143 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2006, and there should be appropriated 
     $4,058,901,319 for fiscal year 2006, which should become 
     available for obligation on July 1, 2006, and should remain 
     available through September 30, 2007, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $14,648,647,143, then the 
     amount should be reduced by the difference between 
     $14,648,647,143 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act;
       (2) $16,938,917,714 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2007, and there should be appropriated 
     $6,349,171,890 for fiscal year 2007, which should become 
     available for obligation on July 1, 2007, and should remain 
     available through September 30, 2008, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $16,938,917,714, then the 
     amount should be reduced by the difference between 
     $16,938,917,714 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act;
       (3) $19,229,188,286 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2008, and there should be appropriated 
     $8,639,442,462 for fiscal year 2008, which should become 
     available for obligation on July 1, 2008, and should remain 
     available through September 30, 2009, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $19,229,188,286, then the 
     amount should be reduced by the difference between 
     $19,229,188,286 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act;
       (4) $21,519,458,857 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2009, and there should be appropriated 
     $10,929,713,033 for fiscal year 2009, which should become 
     available for obligation on July 1, 2009, and should remain 
     available through September 30, 2010, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $21,519,458,857, then the 
     amount should be reduced by the difference between 
     $21,519,458,857 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act;
       (5) $23,809,729,429 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2010, and there should be appropriated 
     $13,219,983,605 for fiscal year 2010, which should become 
     available for obligation on July 1, 2010, and should remain 
     available through September 30, 2011, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $23,809,729,429, then the 
     amount

[[Page S178]]

     should be reduced by the difference between $23,809,729,429 
     and the maximum amount available for awarding grants under 
     section 611(a)(2) of such Act;
       (6) $26,100,000,000 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2011, and there should be appropriated 
     $15,510,254,176 for fiscal year 2011, which should become 
     available for obligation on July 1, 2011, and should remain 
     available through September 30, 2012, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $26,100,000,000, then the 
     amount should be reduced by the difference between 
     $26,100,000,000 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act; and
       (7) the maximum amount available for awarding grants under 
     section 611(a)(2) of the Individuals with Disabilities 
     Education Act for fiscal year 2012 and each succeeding fiscal 
     year, and there should be appropriated for each such year an 
     amount equal to the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act for the fiscal 
     year for which the determination is made minus 
     $10,589,745,824, which should become available for obligation 
     on July 1 of the fiscal year for which the determination is 
     made and should remain available through September 30 of the 
     succeeding fiscal year.

      TITLE IV--IMPROVEMENT OF ELEMENTARY AND SECONDARY EDUCATION

 Subtitle A--Public School Choice, Supplemental Educational Services, 
                          and Teacher Quality

     SEC. 401. PUBLIC SCHOOL CHOICE CAPACITY.

       (a) School Capacity.--Section 1116(b)(1)(E) of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6316(b)(1)(E)) is amended--
       (1) in clause (i), by striking ``In the case'' and 
     inserting ``Subject to clauses (ii) and (iii), in the case'';
       (2) by redesignating clause (ii) as clause (iii);
       (3) by inserting after clause (i) the following:
       ``(ii) School capacity.--The obligation of a local 
     educational agency to provide the option to transfer to 
     students under clause (i) is subject to all applicable State 
     and local health and safety code requirements regarding 
     facility capacity.''; and
       (4) in clause (iii) (as redesignated by paragraph (2)), by 
     inserting ``and subject to clause (ii),'' after ``public 
     school,''.
       (b) Grants for School Construction and Renovation.--
       (1) In general.--Subpart 1 of part A of title I of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311 et seq.) is amended by adding at the end the following:

     ``SEC. 1120C. GRANTS FOR SCHOOL CONSTRUCTION AND RENOVATION.

       ``(a) Program Authorized.--From funds appropriated under 
     subsection (g), the Secretary is authorized to award grants 
     to local educational agencies experiencing overcrowding in 
     the schools served by the local educational agencies, for the 
     construction and renovation of safe, healthy, high-
     performance school buildings.
       ``(b) Application.--Each local educational agency desiring 
     a grant under this section shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such additional information as the Secretary may require.
       ``(c) Priority.--In awarding grants under this section, the 
     Secretary shall give priority to local educational agencies--
       ``(1) who have documented difficulties in meeting the 
     public school choice requirements of paragraph (1)(E), 
     (5)(A), (7)(C)(i), or (8)(A)(i) of section 1116(b), or 
     section 1116(c)(10)(C)(vii); and
       ``(2) with the highest number of schools at or above 
     capacity.
       ``(d) Award Basis.--From funds remaining after awarding 
     grants under subsection (c), the Secretary shall award grants 
     to local educational agencies that are experiencing 
     overcrowding in the schools served by the local educational 
     agencies.
       ``(e) Prevailing Wages.--Any laborer or mechanic employed 
     by any contractor or subcontractor in the performance of work 
     on any construction funded by a grant awarded under this 
     section will be paid wages at rates not less than those 
     prevailing on similar construction in the locality as 
     determined by the Secretary of Labor under subchapter IV of 
     chapter 31 of title 40, United States Code (commonly referred 
     to as the Davis-Bacon Act).
       ``(f) Definitions.--In this section:
       ``(1) At or above capacity.--The term `at or above 
     capacity', in reference to a school, means a school in which 
     1 additional student would increase the average class size of 
     the school above the average class size of all schools in the 
     State in which the school is located.
       ``(2) Healthy, high-performance school building.--The term 
     `healthy, high-performance school building' has the meaning 
     given such term in section 5586.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $250,000,000 for fiscal year 2006, and such sums as may be 
     necessary for each of the 2 succeeding fiscal years.''.
       (2) Table of contents.--The table of contents of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C.6301 
     note) is amended by inserting after the item relating to 
     section 1120B the following:

``Sec. 1120C. Grants for school construction and renovation.''.

     SEC. 402. SUPPLEMENTAL EDUCATIONAL SERVICES.

       Section 1116(e) of the Elementary and Secondary Education 
     Act of 1965 (20 U.S.C. 6316(e)) is amended--
       (1) in paragraph (4)--
       (A) in subparagraph (B), by striking the semicolon and 
     inserting ``, including criteria that--
       ``(i) ensure that personnel delivering supplemental 
     educational services to students have adequate 
     qualifications; and
       ``(ii) may, at the State's discretion, ensure that 
     personnel delivering supplemental educational services to 
     students are teachers that are highly qualified, as such term 
     is defined in section 9101;'';
       (B) in subparagraph (D), by striking ``and'' after the 
     semicolon;
       (C) in subparagraph (E), by striking the period and 
     inserting ``; and''; and
       (D) by adding at the end the following:
       ``(F) ensure that the list of approved providers of 
     supplemental educational services described in subparagraph 
     (C) includes a choice of providers that have sufficient 
     capacity to provide effective services for children who are 
     limited English proficient and children with disabilities.'';
       (2) in paragraph (5)(C)--
       (A) by striking ``applicable''; and
       (B) by inserting before the period ``, and acknowledge in 
     writing that, as an approved provider in the relevant State 
     educational agency program of providing supplemental 
     educational services, the provider is deemed to be a 
     recipient of Federal financial assistance'';
       (3) by redesignating paragraphs (6), (7), (8), (9), (10), 
     (11), and (12) as paragraphs (7), (8), (9), (10), (11), (12), 
     and (13), respectively;
       (4) by inserting after paragraph (5) the following:
       ``(6) Rule of construction.--Nothing in this section shall 
     be construed to prohibit a local educational agency from 
     being considered by a State educational agency as a potential 
     provider of supplemental educational services under this 
     subsection, if such local educational agency meets the 
     criteria adopted by the State educational agency in 
     accordance with paragraph (5).'';
       (5) in paragraph (13) (as redesignated by paragraph (3))--
       (A) in subparagraph (B)--
       (i) in clause (ii), by striking ``and'' after the 
     semicolon;
       (ii) in clause (iii), by striking ``and'' after the 
     semicolon; and
       (iii) by adding at the end the following:
       ``(iv) may employ teachers who are highly qualified, as 
     such term is defined in section 9101; and
       ``(v) pursuant to its inclusion on the relevant State 
     educational agency's list described in paragraph (4)(C), is 
     deemed to be a recipient of Federal financial assistance; 
     and''; and
       (B) in subparagraph (C)--
       (i) in the matter preceding clause (i), by striking 
     ``are'';
       (ii) in clause (i)--

       (I) by inserting ``are'' before ``in addition''; and
       (II) by striking ``and'' after the semicolon;

       (iii) in clause (ii), by striking the period and inserting 
     ``; and''; and
       (iv) by adding at the end the following:
       ``(iii) if provided by providers that are included on the 
     relevant State educational agency's list described in 
     paragraph (4)(C), shall be deemed to be programs or 
     activities of the relevant State educational agency.''; and
       (6) by adding at the end the following:
       ``(14) Civil rights.--In providing supplemental educational 
     services under this subsection, no State educational agency 
     or local educational agency may, directly or through 
     contractual, licensing, or other arrangements with a provider 
     of supplemental educational services, engage in any form of 
     discrimination prohibited by--
       ``(A) title VI of the Civil Rights Act of 1964;
       ``(B) title IX of the Education Amendments of 1972;
       ``(C) section 504 of the Rehabilitation Act of 1973;
       ``(D) titles II and III of the Americans with Disabilities 
     Act;
       ``(E) the Age Discrimination Act of 1975;
       ``(F) regulations promulgated under the authority of the 
     laws listed in subparagraphs (A) through (E); or
       ``(G) other Federal civil rights laws.''.

     SEC. 403. QUALIFICATIONS FOR TEACHERS AND PARAPROFESSIONALS.

       (a) High Objective Uniform State Standard of Evaluation.--
     Section 1119 of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 6319) is amended--
       (1) in subsection (a)(2)--
       (A) by redesignating subparagraphs (A) through (C) as 
     clauses (i) through (iii), respectively, and indenting as 
     appropriate;
       (B) by striking ``(2) State plan.--As part'' and inserting 
     the following:
       ``(2) State plan.--
       ``(A) In general.--As part''; and
       (C) by adding at the end the following:
       ``(B) Availability of state standards.--Each State 
     educational agency shall make available to teachers in the 
     State the high objective uniform State standard of 
     evaluation, as described in section 9101(23)(C)(ii), for the 
     purpose of meeting the teacher qualification requirements 
     established under this section.'';

[[Page S179]]

       (2) by redesignating subsections (e), (f), (g), (h), (i), 
     (j), (k), and (l) as subsections (f), (g), (h), (i), (j), 
     (k), (l), and (m), respectively;
       (3) by inserting after subsection (d) the following:
       ``(e) State Responsibilities.--Each State educational 
     agency shall ensure that local educational agencies in the 
     State make available all options described in subparagraphs 
     (A) through (C) of subsection (c)(1) to each new or existing 
     paraprofessional for the purpose of demonstrating the 
     qualifications of the paraprofessional, consistent with the 
     requirements of this section.''; and
       (4) in subsection (l) (as redesignated by paragraph (2)), 
     by striking ``subsection (l)'' and inserting ``subsection 
     (m)''.
       (b) Definition of Highly Qualified Teachers.--Section 
     9101(23)(B)(ii) is amended--
       (1) in subclause (I), by striking ``or'' after the 
     semicolon;
       (2) in subclause (II), by striking ``and'' after the 
     semicolon; and
       (3) by adding at the end the following:

       ``(III) in the case of a middle school teacher, passing a 
     State-approved middle school generalist exam when the teacher 
     receives a license to teach middle school in the State;
       ``(IV) obtaining a State middle school or secondary school 
     social studies certificate that qualifies the teacher to 
     teach history, geography, economics, civics, and government 
     in middle schools or in secondary schools, respectively, in 
     the State; or
       ``(V) obtaining a State middle school or secondary school 
     science certificate that qualifies the teacher to teach earth 
     science, biology, chemistry, and physics in middle schools or 
     secondary schools, respectively, in the State; and''.

       (c) Ensuring Highly Qualified Teachers.--
       (1) Requirement.--The Secretary of Education shall improve 
     coordination among the teacher quality programs authorized 
     under the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 6301 et seq.), the Individuals with Disabilities 
     Education Act (20 U.S.C. 1400 et seq.), the Higher Education 
     Act of 1965 (20 U.S.C. 1001 et seq.), and the Carl D. Perkins 
     Vocational and Technical Education Act of 1998 (20 U.S.C. 
     2301 et seq.), to provide a unified effort in strengthening 
     the American teaching workforce and ensuring highly qualified 
     teachers.
       (2) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Secretary of Education shall 
     submit a report to the relevant committees of Congress, that 
     shall be made available on the website of the Department of 
     Education, on efforts to coordinate programs pursuant to 
     paragraph (1).

          Subtitle B--Adequate Yearly Progress Determinations

     SEC. 421. REVIEW OF ADEQUATE YEARLY PROGRESS DETERMINATIONS 
                   FOR SCHOOLS FOR THE 2002-2003 SCHOOL YEAR.

       (a) In General.--The Secretary shall require each local 
     educational agency to provide each school served by the 
     agency with an opportunity to request a review of a 
     determination by the agency that the school did not make 
     adequate yearly progress for the 2002-2003 school year.
       (b) Final Determination.--Not later than 30 days after 
     receipt of a request by a school for a review under this 
     section, a local educational agency shall issue and make 
     publicly available a final determination on whether the 
     school made adequate yearly progress for the 2002-2003 school 
     year.
       (c) Evidence.--In conducting a review under this section, a 
     local educational agency shall--
       (1) allow the principal of the school involved to submit 
     evidence on whether the school made adequate yearly progress 
     for the 2002-2003 school year; and
       (2) consider that evidence before making a final 
     determination under subsection (b).
       (d) Standard of Review.--In conducting a review under this 
     section, a local educational agency shall revise, consistent 
     with the applicable State plan under section 1111 of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311), the local educational agency's original determination 
     that a school did not make adequate yearly progress for the 
     2002-2003 school year if the agency finds that the school 
     made such progress, taking into consideration--
       (1) the amendments made to part 200 of title 34, Code of 
     Federal Regulations (68 Fed. Reg. 68698) (relating to 
     accountability for the academic achievement of students with 
     the most significant cognitive disabilities); or
       (2) any regulation or guidance that, subsequent to the date 
     of such original determination, was issued by the Secretary 
     relating to--
       (A) the assessment of limited English proficient children;
       (B) the inclusion of limited English proficient children as 
     part of the subgroup described in section 
     1111(b)(2)(C)(v)(II)(dd) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6311(b)(2)(C)(v)(II)(dd)) 
     after such children have obtained English proficiency; or
       (C) any requirement under section 1111(b)(2)(I)(ii) of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311(b)(2)(I)(ii)).
       (e) Effect of Revised Determination.--
       (1) In general.--If pursuant to a review under this section 
     a local educational agency determines that a school made 
     adequate yearly progress for the 2002-2003 school year, upon 
     such determination--
       (A) any action by the Secretary, the State educational 
     agency, or the local educational agency that was taken 
     because of a prior determination that the school did not make 
     such progress shall be terminated; and
       (B) any obligations or actions required of the local 
     educational agency or the school because of the prior 
     determination shall cease to be required.
       (2) Exceptions.--Notwithstanding paragraph (1), a 
     determination under this section shall not affect any 
     obligation or action required of a local educational agency 
     or school under the following:
       (A) Section 1116(b)(13) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6316(b)(13)) (requiring a 
     local educational agency to continue to permit a child who 
     transferred to another school under such section to remain in 
     that school until completion of the highest grade in the 
     school).
       (B) Section 1116(e)(9) of the Elementary and Secondary 
     Education Act of 1965 (as redesignated by section 402(3)) (20 
     U.S.C. 6316(e)(9)) (requiring a local educational agency to 
     continue to provide supplemental educational services under 
     such section until the end of the school year).
       (3) Subsequent determinations.--In determining whether a 
     school is subject to school improvement, corrective action, 
     or restructuring as a result of not making adequate yearly 
     progress, the Secretary, a State educational agency, or a 
     local educational agency may not take into account a 
     determination that the school did not make adequate yearly 
     progress for the 2002-2003 school year if such determination 
     was revised under this section and the school received a 
     final determination of having made adequate yearly progress 
     for the 2002-2003 school year.
       (f) Notification.--The Secretary--
       (1) shall require each State educational agency to notify 
     each school served by the agency of the school's ability to 
     request a review under this section; and
       (2) not later than 30 days after the date of the enactment 
     of this section, shall notify the public by means of the 
     Department of Education's website of the review process 
     established under this section.

     SEC. 422. REVIEW OF ADEQUATE YEARLY PROGRESS DETERMINATIONS 
                   FOR LOCAL EDUCATIONAL AGENCIES FOR THE 2002-
                   2003 SCHOOL YEAR.

       (a) In General.--The Secretary shall require each State 
     educational agency to provide each local educational agency 
     in the State with an opportunity to request a review of a 
     determination by the State educational agency that the local 
     educational agency did not make adequate yearly progress for 
     the 2002-2003 school year.
       (b) Application of Certain Provisions.--Except as 
     inconsistent with, or inapplicable to, this section, the 
     provisions of section 421 shall apply to review by a State 
     educational agency of a determination described in subsection 
     (a) in the same manner and to the same extent as such 
     provisions apply to review by a local educational agency of a 
     determination described in section 421(a).

     SEC. 423. DEFINITIONS.

       In this subtitle:
       (1) The term ``adequate yearly progress'' has the meaning 
     given to that term in section 1111(b)(2)(C) of the Elementary 
     and Secondary Education Act of 1965 (20 U.S.C. 
     6311(b)(2)(C)).
       (2) The term ``local educational agency'' means a local 
     educational agency (as that term is defined in section 9101 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 7801)) receiving funds under part A of title I of such 
     Act (20 U.S.C. 6311 et seq.).
       (3) The term ``Secretary'' means the Secretary of 
     Education.
       (4) The term ``school'' means an elementary school or a 
     secondary school (as those terms are defined in section 9101 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 7801)) served under part A of title I of such Act (20 
     U.S.C. 6311 et seq.).
       (5) The term ``State educational agency'' means a State 
     educational agency (as that term is defined in section 9101 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 7801)) receiving funds under part A of title I of such 
     Act (20 U.S.C. 6311 et seq.).

                    Subtitle C--Technical Assistance

     SEC. 451. TECHNICAL ASSISTANCE.

       (a) In General.--Part F of title IX of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 7941) is amended--
       (1) in the part heading, by inserting ``AND TECHNICAL 
     ASSISTANCE'' after ``EVALUATIONS''; and
       (2) by adding at the end the following:

     ``SEC. 9602. TECHNICAL ASSISTANCE.

       ``The Secretary shall ensure that the technical assistance 
     provided by, and the research developed and disseminated 
     through, the Institute of Education Sciences and other 
     offices or agencies of the Department provide educators and 
     parents with the needed information and support for 
     identifying and using educational strategies, programs, and 
     practices, including strategies, programs, and practices 
     available through the clearinghouses supported under the 
     Education Sciences Reform Act of 2002 (20 U.S.C. 9501 et 
     seq.) and other federally supported clearinghouses, that have 
     been successful in improving educational opportunities and 
     achievement for all students.''.
       (b) Table of Contents.--The table of contents of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6301 note) is amended by inserting after the item relating to 
     section 9601 the following:

``Sec. 9602. Technical assistance.''.

[[Page S180]]

            TITLE V--IMPROVING ASSESSMENT AND ACCOUNTABILITY

     SEC. 501. GRANTS FOR INCREASING DATA CAPACITY FOR PURPOSES OF 
                   ASSESSMENT AND ACCOUNTABILITY.

       (a) Program Authorized.--From funds appropriated for a 
     fiscal year, the Secretary may award grants, on a competitive 
     basis, to State educational agencies--
       (1) to enable the State educational agencies to develop or 
     increase the capacity of data systems for assessment and 
     accountability purposes, including the collection of 
     graduation rates; and
       (2) to award subgrants to increase the capacity of local 
     educational agencies to upgrade, create, or manage 
     longitudinal data systems for the purpose of measuring 
     student academic progress and achievement.
       (b) State Application.--Each State educational agency 
     desiring a grant under this section shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require.
       (c) State Use of Funds.--Each State educational agency that 
     receives a grant under this section shall use--
       (1) not more than 20 percent of the grant funds for the 
     purpose of--
       (A) increasing the capacity of, or creating, State 
     databases to collect, disaggregate, and report information 
     related to student achievement, enrollment, and graduation 
     rates for assessment and accountability purposes; and
       (B) reporting, on an annual basis, for the elementary 
     schools and secondary schools within the State, on--
       (i) the enrollment data from the beginning of the academic 
     year;
       (ii) the enrollment data from the end of the academic year; 
     and
       (iii) the twelfth grade graduation rates; and
       (2) not less than 80 percent of the grant funds to award 
     subgrants to local educational agencies within the State to 
     enable the local educational agencies to carry out the 
     authorized activities described in subsection (e).
       (d) Local Application.--Each local educational agency 
     desiring a subgrant under this section shall submit an 
     application to the State educational agency at such time, in 
     such manner, and containing such information as the State 
     educational agency may require. Each such application shall 
     include, at a minimum, a demonstration of the local 
     educational agency's ability to put a longitudinal data 
     system in place.
       (e) Local Authorized Activities.--Each local educational 
     agency that receives a subgrant under this section shall use 
     the subgrant funds to increase the capacity of the local 
     educational agency to upgrade or manage longitudinal data 
     systems consistent with the uses in subsection (c)(1), by--
       (1) purchasing database software or hardware;
       (2) hiring additional staff for the purpose of managing 
     such data;
       (3) providing professional development or additional 
     training for such staff; and
       (4) providing professional development or training for 
     principals and teachers on how to effectively use such data 
     to implement instructional strategies to improve student 
     achievement and graduation rates.
       (f) Definitions.--In this section:
       (1) Graduation rate.--The term ``graduation rate'' means 
     the percentage that--
       (A) the total number of students who--
       (i) graduate from a secondary school with a regular diploma 
     (which shall not include the recognized equivalent of a 
     secondary school diploma or an alternative degree) in an 
     academic year; and
       (ii) graduated on time by progressing 1 grade per academic 
     year; represents of
       (B) the total number of students who entered the secondary 
     school in the entry level academic year applicable to the 
     graduating students.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (3) State educational agency and local educational 
     agency.--The terms ``State educational agency'' and ``local 
     educational agency'' have the meanings given such terms in 
     section 9101 of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 7801).
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $100,000,000 for 
     fiscal year 2006, and such sums as may be necessary for each 
     of the 2 succeeding fiscal years.

     SEC. 502. GRANTS FOR ASSESSMENT OF CHILDREN WITH DISABILITIES 
                   AND CHILDREN WHO ARE LIMITED ENGLISH 
                   PROFICIENT.

       (a) Grants for Assessment of Children With Disabilities and 
     Children Who Are Limited English Proficient.--Part E of title 
     I of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 6491 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 1505. GRANTS FOR ASSESSMENT OF CHILDREN WITH 
                   DISABILITIES AND CHILDREN WHO ARE LIMITED 
                   ENGLISH PROFICIENT.

       ``(a) Grants Authorized.--From amounts authorized to be 
     appropriated under subsection (e) for a fiscal year, the 
     Secretary shall award grants, on a competitive basis, to 
     State educational agencies, or to consortia of State 
     educational agencies, to enable the State educational 
     agencies or consortia to collaborate with institutions of 
     higher education, research institutions, or other 
     organizations--
       ``(1) to design and improve State academic assessments for 
     students who are limited English proficient and students with 
     disabilities; and
       ``(2) to ensure the most accurate, valid, and reliable 
     means to assess academic content standards and student 
     academic achievement standards for students who are limited 
     English proficient and students with disabilities.
       ``(b) Authorized Activities.--A State educational agency or 
     consortium that receives a grant under this section shall use 
     the grant funds to carry out 1 or more of the following 
     activities:
       ``(1) Developing alternate assessments for students with 
     disabilities, consistent with section 1111 and the amendments 
     made on December 9, 2003, to part 200 of title 34, Code of 
     Federal Regulations (68 Fed. Reg. 68698) (relating to 
     accountability for the academic achievement of students with 
     the most significant cognitive disabilities), including--
       ``(A) the alignment of such assessments, as appropriate and 
     consistent with such amendments, with--
       ``(i) State student academic achievement standards and 
     State academic content standards for all students; or
       ``(ii) alternate State student academic achievement 
     standards that reflect the intended instructional construct 
     for students with disabilities;
       ``(B) activities to ensure that such assessments do not 
     reflect the disabilities, or associated characteristics, of 
     the students that are extraneous to the intent of the 
     measurement;
       ``(C) the development of an implementation plan for pilot 
     tests for such assessments, in order to determine the level 
     of appropriateness and feasibility of full-scale 
     administration; and
       ``(D) activities that provide for the retention of all 
     feasible standardized features in the alternate assessments.
       ``(2) Developing alternate assessments that meet the 
     requirements of section 1111 for students who are limited 
     English proficient, including--
       ``(A) the alignment of such assessments with State student 
     academic achievement standards and State academic content 
     standards for all students;
       ``(B) the development of parallel native language 
     assessments or linguistically modified assessments for 
     limited English proficient students that meet the 
     requirements of section 1111(b)(3)(C)(ix)(III);
       ``(C) the development of an implementation plan for pilot 
     tests for such assessments, in order to determine the level 
     of appropriateness and feasibility of full-scale 
     administration; and
       ``(D) activities that provide for the retention of all 
     feasible standardized features in the alternate assessments.
       ``(3) Developing, modifying, or revising State policies and 
     criteria for appropriate accommodations to ensure the full 
     participation of students who are limited English proficient 
     and students with disabilities in State academic assessments, 
     including--
       ``(A) developing a plan to ensure that assessments provided 
     with accommodations are fully included and integrated into 
     the accountability system, for the purpose of making the 
     determinations of adequate yearly progress required under 
     section 1116;
       ``(B) ensuring the validity, reliability, and 
     appropriateness of such accommodations, such as--
       ``(i) a modification to the presentation or format of the 
     assessment;
       ``(ii) the use of assistive devices;
       ``(iii) an extension of the time allowed for testing;
       ``(iv) an alteration of the test setting or procedures;
       ``(v) the administration of portions of the test in a 
     method appropriate for the level of language proficiency of 
     the test taker;
       ``(vi) the use of a glossary or dictionary; and
       ``(vii) the use of a linguistically modified assessment;
       ``(C) ensuring that State policies and criteria for 
     appropriate accommodations take into account the form or 
     program of instruction provided to students, including the 
     level of difficulty, reliability, cultural difference, and 
     content equivalence of such form or program;
       ``(D) ensuring that such policies are consistent with the 
     standards prepared by the Joint Committee on Standards for 
     Educational and Psychological Testing of the American 
     Educational Research Association, the American Psychological 
     Association, and the National Council on Measurement in 
     Education; and
       ``(E) developing a plan for providing training on the use 
     of accommodations to school instructional staff, families, 
     students, and other appropriate parties.
       ``(4) Developing universally designed assessments that can 
     be accessible to all students, including--
       ``(A) examining test item or test performance for students 
     with disabilities and students who are limited English 
     proficient, to determine the extent to which the test item or 
     test is universally designed;
       ``(B) using think aloud and cognitive laboratory 
     procedures, as well as item statistics, to identify test 
     items that may pose particular problems for students with 
     disabilities or students who are limited English proficient;
       ``(C) developing and implementing a plan to ensure that 
     developers and reviewers of test items are trained in the 
     principles of universal design; and

[[Page S181]]

       ``(D) developing computer-based applications of universal 
     design principles.
       ``(c) Application.--Each State educational agency, or 
     consortium of State educational agencies, desiring to apply 
     for a grant under this section shall submit an application to 
     the Secretary at such time, in such manner, and containing 
     such information as the Secretary may require, including--
       ``(1) information regarding the institutions of higher 
     education, research institutions, or other organizations that 
     are collaborating with the State educational agency or 
     consortium, in accordance with subsection (a);
       ``(2) in the case of a consortium of State educational 
     agencies, the designation of 1 State educational agency as 
     the fiscal agent for the receipt of grant funds;
       ``(3) a description of the process and criteria by which 
     the State educational agency will identify students that are 
     unable to participate in general State content assessments 
     and are eligible to take alternate assessments, consistent 
     with the amendments made to part 200 of title 34, Code of 
     Federal Regulations (68 Fed. Reg. 68698);
       ``(4) in the case of a State educational agency or 
     consortium carrying out the activity described in subsection 
     (b)(1)(A), a description of how the State educational agency 
     plans to fulfill the requirement of subsection (b)(1)(A);
       ``(5) in the case of a State educational agency or 
     consortium carrying out the activities described in 
     paragraphs (1), (2), and (4) of subsection (b), information 
     regarding the proposed techniques for the development of 
     alternate assessments, including a description of the 
     technical adequacy of, technical aspects of, and scoring for 
     such assessments;
       ``(6) a plan for providing training for school 
     instructional staff, families, students, and other 
     appropriate parties on the use of alternate assessments; and
       ``(7) information on how the scores of students 
     participating in alternate assessments will be reported to 
     the public and to parents.
       ``(d) Evaluation and Reporting Requirements.--Each State 
     educational agency receiving a grant under this section shall 
     submit an annual report to the Secretary describing the 
     activities carried out under the grant and the result of such 
     activities, including--
       ``(1) details on the effectiveness of the activities 
     supported under this section in helping students with 
     disabilities, or students who are limited English proficient, 
     better participate in State assessment programs; and
       ``(2) information on the change in achievement, if any, of 
     students with disabilities and students who are limited 
     English proficient, as a result of a more accurate assessment 
     of such students.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $50,000,000 for fiscal year 2006, and such sums as may be 
     necessary for each of the 2 succeeding fiscal years.''.
       (b) Table of Contents.--The table of contents of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6301 note) is amended by inserting after the item relating to 
     section 1504 the following:

``Sec. 1505. Grants for assessment of children with disabilities and 
              children who are limited English proficient.''.

     SEC. 503. REPORTS ON STUDENT ENROLLMENT AND GRADUATION RATES.

       (a) Student Enrollment and Graduation Rates.--Part E of 
     title I of the Elementary and Secondary Education Act of 1965 
     (as amended by section 502) (20 U.S.C. 6491 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 1506. REPORTS ON STUDENT ENROLLMENT AND GRADUATION 
                   RATES.

       ``(a) In General.--The Secretary shall collect from each 
     State educational agency, local educational agency, and 
     school, on an annual basis, the following data:
       ``(1) The number of students enrolled in each of grades 7 
     through 12 at the beginning of the most recent school year.
       ``(2) The number of students enrolled in each of grades 7 
     through 12 at the end of the most recent school year.
       ``(3) The graduation rate for the most recent school year.
       ``(4) The data described in paragraphs (1) through (3), 
     disaggregated by the groups of students described in section 
     1111(b)(2)(C)(v)(II).
       ``(b) Annual Report.--The Secretary shall report the 
     information collected under subsection (a) on an annual 
     basis.''.
       (b) Table of Contents.--The table of contents of the 
     Elementary and Secondary Education Act of 1965 (as amended by 
     section 502(b)) (20 U.S.C. 6301 note) is amended by inserting 
     after the item relating to section 1505 the following:

``Sec. 1506. Reports on student enrollment and graduation rates.''.

     SEC. 504. CIVIL RIGHTS.

       Section 9534 of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 7914) is amended--
       (1) by redesignating subsections (a) and (b) as subsections 
     (b) and (c), respectively; and
       (2) by inserting before subsection (b) (as redesignated by 
     paragraph (1)) the following:
       ``(a) Prohibition of Discrimination.--Discrimination on the 
     basis of race, color, religion, sex (except as otherwise 
     permitted under title IX of the Education Amendments of 
     1972), national origin, or disability in any program funded 
     under this Act is prohibited.''.

  TITLE VI--SENSE OF THE SENATE REGARDING FUNDING FOR ELEMENTARY AND 
                          SECONDARY EDUCATION

     SEC. 601. SENSE OF THE SENATE.

       (a) Findings.--The Senate finds the following:
       (1) Congress enacted, with bipartisan support, and the 
     President signed into law the No Child Left Behind Act of 
     2001 (Public Law 107-210; 115 Stat. 1425), that reauthorized 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6301 et seq.). The new law required States to set high 
     standards for learning and required schools to implement 
     reforms to help improve student achievement. In return, 
     Congress and the President pledged to make sure schools would 
     have resources to carry out the reforms as called for in the 
     new law.
       (2) $22,750,000,000 is needed to fund part A of title I of 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311 et seq.) in fiscal year 2006, as promised pursuant to 
     the No Child Left Behind Act of 2001 (Public Law 107-210; 115 
     Stat. 1425).
       (3) $25,000,000,000 is needed to fund part A of title I of 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311 et seq.) in fiscal year 2007, as promised pursuant to 
     the No Child Left Behind Act of 2001 (Public Law 107-210; 115 
     Stat. 1425).
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) it is in the best interest of the Nation that all 
     students have access to a high-quality elementary and 
     secondary education; and
       (2) part A of title I of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6311 et seq.) should be 
     funded as promised pursuant to the No Child Left Behind Act 
     of 2001 (Public Law 107-210; 115 Stat. 1425).

    TITLE VII--PROVIDING A ROADMAP FOR FIRST GENERATION COLLEGE FOR 
                                STUDENTS

     SEC. 701. EXPANSION OF TRIO AND GEARUP.

       The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) 
     is amended--
       (1) in section 402A(f), by striking ``$700,000,000 for 
     fiscal year 1999'' and inserting ``$1,000,000,000 for fiscal 
     year 2006''; and
       (2) by striking section 404H and inserting the following:

     ``SEC. 404H. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     chapter $400,000,000 for fiscal year 2006 and such sums as 
     may be necessary for each of the 4 succeeding fiscal 
     years.''.

  TITLE VIII--COLLEGE TUITION RELIEF FOR STUDENTS AND THEIR FAMILIES 
                          THROUGH PELL GRANTS

     SEC. 801. PELL GRANTS TAX TABLES HOLD HARMLESS.

        Notwithstanding any other provision of law, the annual 
     updates to the allowance for State and other taxes in the 
     tables used in the Federal Need Analysis Methodology to 
     determine a student's expected family contribution for the 
     award year 2005-2006 under part F of title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1087kk et seq.), published 
     in the Federal Register on Thursday, December 23, 2004 (69 
     Fed. Reg. 76926), shall not apply to a student to the extent 
     the updates will reduce the amount of Federal student 
     assistance for which the student is eligible.

     SEC. 802. SENSE OF THE SENATE REGARDING INCREASING THE 
                   MAXIMUM PELL GRANT.

       (a) Findings.--The Senate makes the following findings:
       (1) Increasing the percentage of individuals who obtain a 
     postsecondary education has become increasingly important, 
     not just to the individual beneficiary, but to the Nation as 
     a whole. The growth and continued expansion of the Nation's 
     economy is heavily dependent on an educated and highly 
     skilled workforce.
       (2) The opportunity to gain a postsecondary education also 
     is important to the Nation as a means to help advance the 
     American ideals of progress and equality.
       (3) The Federal Government plays an invaluable role in 
     making student financial aid available to ensure that 
     qualified students are able to attend college, regardless of 
     their financial means. Since the inception of the Pell Grant 
     program in 1973, nearly 80,000,000 grants have helped low- 
     and middle-income students go to college, enrich their lives, 
     and become productive members of society.
       (4) Nationwide, almost 63 percent of secondary school 
     graduates continue on to higher education immediately after 
     completing secondary school. This degree of college 
     participation would not exist without the Federal investment 
     in student aid, especially the Pell Grant program. More than 
     4,000,000 low- and middle-income students receive Pell 
     Grants; 95 percent of whom have a family income of not more 
     than $40,000.
       (5) In the next 10 years, the number of undergraduate 
     students enrolled in the Nation's colleges and universities 
     will increase by 15 percent to more than 15,000,000 students. 
     Many of these students will be the first in their families to 
     attend college. The continued investment in the Pell Grant 
     program is essential if college is to remain an achievable 
     part of the American dream.
       (6) Increasing the maximum Pell Grant to $5,100 would allow 
     more than 430,000 additional students to benefit from the 
     program.
       (7) Increasing the maximum Pell Grant to $5,100 would 
     result in 200,000 new Pell Grant recipients.

[[Page S182]]

       (8) Pell Grant recipients are more likely to graduate with 
     student loan debt and to amass more debt than other student 
     borrowers. Increasing the maximum Pell Grant to $5,100 will 
     help remedy this disparity.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the maximum Pell Grant should be increased to $5,100 
     during award year 2006-2007; and
       (2) the maximum Pell Grant amount set by Congress should be 
     the amount eligible students receive.

     SEC. 803. ESTABLISHMENT OF A PELL DEMONSTRATION PROGRAM.

       (a) Findings.--Congress finds that:
       (1) A student remains eligible to receive a Federal Pell 
     Grant as long as the student is income-eligible and has not 
     received a bachelor's degree.
       (2) By encouraging persistence and degree acquisition in a 
     timely manner, the Federal Government, in effect, saves 
     money--
       (A) by reducing the courses that do not lead to a degree; 
     and
       (B) by helping students get the financial benefits of a 
     college degree as soon as possible.
       (b) Pell Demonstration Program.--
       (1) Authorization.--The Secretary of Education shall 
     establish a demonstration program to facilitate the ability 
     of low-income students to complete the students' degree 
     within 150 percent of the time expected to complete such 
     degree.
       (2) Grants.--The Secretary of Education shall award 
     competitive grants to institutions of higher education to 
     enable students who are eligible to receive Federal Pell 
     Grants under subpart 1 of part A of title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1070a et seq.) to enroll in 
     courses in the summer at such institutions to expedite the 
     students' graduation from the institutions.
       (3) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $500,000,000 
     for the period of fiscal years 2006 through 2008.

 TITLE IX--TUITION FREE COLLEGE FOR MATHEMATICS, SCIENCE, AND SPECIAL 
                           EDUCATION TEACHERS

     SEC. 901. PURPOSE.

       It is the purpose of this title to make public college 
     tuition free for future mathematics, science, and special 
     education teachers and to provide additional assistance to 
     students eligible to receive a Federal Pell Grant under 
     subpart 1 of part A of title IV of the Higher Education Act 
     of 1965 (20 U.S.C. 1070a et seq.).

     SEC. 902. TUITION FREE COLLEGE FOR MATHEMATICS, SCIENCE, AND 
                   SPECIAL EDUCATION TEACHERS.

       (a) Additional Amounts for Teachers in Mathematics, 
     Science, and Special Education.--
       (1) Ffel loans.--Section 428J(c)(3) of the Higher Education 
     Act of 1965 (20 U.S.C. 1078-10(c)(3)) is amended by striking 
     ``$17,500'' and inserting ``$23,000''.
       (2) Direct loans.--Section 460(c)(3) of the Higher 
     Education Act of 1965 (20 U.S.C. 1087j(c)(3)) is amended by 
     striking ``$17,500'' and inserting ``$23,000''.
       (b) Effective Date.--The amendments made by this section 
     shall apply only with respect to eligible individuals who are 
     new borrowers on or after October 1, 1998.

     SEC. 903. OFFSET FOR TUITION FREE COLLEGE FOR MATHEMATICS, 
                   SCIENCE, AND SPECIAL EDUCATION TEACHERS.

       (a) Special Allowances.--
       (1) In general.--Section 438(b)(2)(B) of the Higher 
     Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(B)) is 
     amended--
       (A) in clause (iv), by striking ``or refunded after 
     September 30, 2004, and before January 1, 2006,'' and 
     inserting ``or refunded on or after the date of enactment of 
     the Taxpayer-Teacher Protection Act of 2004,''; and
       (B) by striking clause (v) and inserting the following:
       ``(v) Notwithstanding clauses (i) and (ii), the quarterly 
     rate of the special allowance shall be the rate determined 
     under subparagraph (A), (E), (F), (G), (H), or (I) of this 
     paragraph, or paragraph (4), as the case may be, for loans--

       ``(I) originated, transferred, or purchased on or after the 
     date of enactment of the Taxpayer-Teacher Protection Act of 
     2004;
       ``(II) financed by an obligation that has matured, been 
     retired, or defeased on or after the date of enactment of the 
     Taxpayer-Teacher Protection Act of 2004;
       ``(III) which the special allowance was determined under 
     such subparagraphs or paragraph, as the case may be, on or 
     after the date of enactment of the Taxpayer-Teacher 
     Protection Act of 2004;
       ``(IV) for which the maturity date of the obligation from 
     which funds were obtained for such loans was extended on or 
     after the date of enactment of the Taxpayer-Teacher 
     Protection Act of 2004; or
       ``(V) sold or transferred to any other holder on or after 
     the date of enactment of the Taxpayer-Teacher Protection Act 
     of 2004.''.

       (2) Rule of construction.--Nothing in the amendment made by 
     paragraph (1) shall be construed to abrogate a contractual 
     agreement between the Federal Government and a student loan 
     provider.
       (b) Available Funds From Reduced Expenditures.--
       (1) In general.--Any funds available to the Secretary of 
     Education as a result of reduced expenditures under section 
     438 of the Higher Education Act of 1965 (20 U.S.C. 1087-1) 
     secured by the enactment of subsection (a) shall first be 
     used by the Secretary for loan cancellation and loan 
     forgiveness for teachers under sections 428J and 460 of the 
     Higher Education Act of 1965 (20 U.S.C. 1078-10, 1087j), as 
     amended by section 902 of this Act.
       (2) Remaining funds.--
       (A) In general.--Any such funds remaining after carrying 
     out paragraph (1) shall be used by the Secretary of Education 
     to make payments to each nonprofit lender in an amount that 
     bears the same relation to the remaining funds as the amount 
     the nonprofit lender receives for fiscal year 2005 under 
     section 438(b)(2)(B) of the Higher Education Act of 1965 (20 
     U.S.C. 1087-1(b)(2)(B)) bears to the total amount received by 
     nonprofit lenders for fiscal year 2005 under such section.
       (B) Definition of nonprofit lender.--In this paragraph the 
     term ``nonprofit lender'' means an eligible lender (as 
     defined in section 435(d) of the Higher Education Act of 1965 
     (20 U.S.C.1085(d)) that--
       (i) is an organization described in section 501(c)(3) of 
     the Internal Revenue Code of 1986;
       (ii) is a nonprofit entity as defined by applicable State 
     law; and
       (iii) meets the following requirements:

       (I) The nonprofit lender does not confer a salary or 
     benefits to any employee of the nonprofit lender in an amount 
     that is in excess of the salary and benefits provided to the 
     Secretary of Education by the Department of Education.
       (II) The nonprofit lender does not maintain an ongoing 
     relationship whereby the nonprofit lender passes on revenue 
     directly or indirectly through lease, securitization, resale, 
     or any other financial instrument to a for-profit entity or 
     to shareholders.
       (III) The nonprofit lender does not offer benefits to a 
     borrower in a manner directly or indirectly predicated on 
     such borrower's participation--

       (aa) in a program under part B or D of title IV of the 
     Higher Education Act of 1965 (20 U.S.C. 1071 et seq., 1087a 
     et seq.); or
       (bb) with any particular lender.

       (IV) The nonprofit lender certifies that the nonprofit 
     lender uses the payment received pursuant to subparagraph (A) 
     to confer grant or scholarship benefits to students who are 
     eligible to receive Federal Pell Grants under subpart 1 of 
     part A of title IV of the Higher Education Act of 1965 (20 
     U.S.C. 1070a et seq.).
       (V) The nonprofit lender is subject to public oversight 
     through either a State charter, or through not less than 50 
     percent of the nonprofit lender's board of directors 
     consisting of State appointed representatives.
       (VI) The nonprofit lender does not engage in the marketing 
     of the relative value of programs under part B of title IV of 
     the Higher Education Act of 1965 as compared to programs 
     under part D of title IV of the Higher Education Act of 1965, 
     nor does the nonprofit lender engage in the marketing of 
     loans or programs offered by for-profit lenders. This 
     subclause shall not be construed to prohibit the nonprofit 
     lender from conferring basic information on lenders under 
     part B of title IV of the Higher Education Act of 1965 and 
     the related benefits offered by such nonprofit lenders.

          TITLE X--MAKING COLLEGE AFFORDABLE FOR ALL STUDENTS

     SEC. 1001. EXPANSION OF DEDUCTION FOR HIGHER EDUCATION 
                   EXPENSES.

       (a) Amount of Deduction.--Subsection (b) of section 222 of 
     the Internal Revenue Code of 1986 (relating to deduction for 
     qualified tuition and related expenses) is amended to read as 
     follows:
       ``(b) Limitations.--
       ``(1) Dollar limitations.--
       ``(A) In general.--Except as provided in paragraph (2), the 
     amount allowed as a deduction under subsection (a) with 
     respect to the taxpayer for any taxable year shall not exceed 
     the applicable dollar limit.
       ``(B) Applicable dollar limit.--The applicable dollar limit 
     for any taxable year shall be determined as follows:

                                                             Applicable
  ``Taxable year:                                        dollar amount:
  2005 and 2006..................................................$6,000
  2007 and 2008..................................................$8,000
  2009 and 2010.................................................$10,000
  2011 and thereafter..........................................$12,000.
       ``(2) Limitation based on modified adjusted gross income.--
       ``(A) In general.--The amount which would (but for this 
     paragraph) be taken into account under subsection (a) shall 
     be reduced (but not below zero) by the amount determined 
     under subparagraph (B).
       ``(B) Amount of reduction.--The amount determined under 
     this subparagraph equals the amount which bears the same 
     ratio to the amount which would be so taken into account as--
       ``(i) the excess of--

       ``(I) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(II) $65,000 ($130,000 in the case of a joint return), 
     bears to

       ``(ii) $15,000 ($30,000 in the case of a joint return).
       ``(C) Modified adjusted gross income.--For purposes of this 
     paragraph, the term `modified adjusted gross income' means 
     the adjusted gross income of the taxpayer for the taxable 
     year determined--
       ``(i) without regard to this section and sections 199, 911, 
     931, and 933, and
       ``(ii) after the application of sections 86, 135, 137, 219, 
     221, and 469.
     For purposes of the sections referred to in clause (ii), 
     adjusted gross income shall be determined without regard to 
     the deduction allowed under this section.

[[Page S183]]

       ``(D) Inflation adjustments.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2005, both of the dollar 
     amounts in subparagraph (B)(i)(II) shall be increased by an 
     amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, by substituting `calendar year 2004' for 
     `calendar year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any amount as adjusted under clause 
     (i) is not a multiple of $50, such amount shall be rounded to 
     the nearest multiple of $50.''.
       (b) Qualified Tuition and Related Expenses of Eligible 
     Students.--
       (1) In general.--Section 222(a) of the Internal Revenue 
     Code of 1986 (relating to allowance of deduction) is amended 
     by inserting ``of eligible students'' after ``expenses''.
       (2) Definition of eligible student.--Section 222(d) of such 
     Code (relating to definitions and special rules) is amended 
     by redesignating paragraphs (2) through (6) as paragraphs (3) 
     through (7), respectively, and by inserting after paragraph 
     (1) the following new paragraph:
       ``(2) Eligible student.--The term `eligible student' has 
     the meaning given such term by section 36(b)(3).''.
       (c) Deduction Made Permanent.--Title IX of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001 (relating to 
     sunset of provisions of such Act) shall not apply to the 
     amendments made by section 431 of such Act.
       (d) Effective Date.--The amendments made by this section 
     shall apply to payments made in taxable years beginning after 
     December 31, 2004.

     SEC. 1002. CREDIT FOR INTEREST ON HIGHER EDUCATION LOANS.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting after 
     section 25B the following new section:

     ``SEC. 25C. INTEREST ON HIGHER EDUCATION LOANS.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to the 
     interest paid by the taxpayer during the taxable year on any 
     qualified education loan.
       ``(b) Maximum Credit.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     credit allowed by subsection (a) for the taxable year shall 
     not exceed $1,500.
       ``(2) Limitation based on modified adjusted gross income.--
       ``(A) In general.--If the modified adjusted gross income of 
     the taxpayer for the taxable year exceeds $50,000 ($100,000 
     in the case of a joint return), the amount which would (but 
     for this paragraph) be allowable as a credit under this 
     section shall be reduced (but not below zero) by the amount 
     which bears the same ratio to the amount which would be so 
     allowable as such excess bears to $20,000 ($40,000 in the 
     case of a joint return).
       ``(B) Modified adjusted gross income.--The term `modified 
     adjusted gross income' means adjusted gross income determined 
     without regard to sections 199, 222, 911, 931, and 933.
       ``(C) Inflation adjustment.--In the case of any taxable 
     year beginning after 2005, the $50,000 and $100,000 amounts 
     referred to in subparagraph (A) shall be increased by an 
     amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, by substituting `2004' for `1992'.
       ``(D) Rounding.--If any amount as adjusted under 
     subparagraph (C) is not a multiple of $50, such amount shall 
     be rounded to the nearest multiple of $50.
       ``(c) Dependents Not Eligible for Credit.--No credit shall 
     be allowed by this section to an individual for the taxable 
     year if a deduction under section 151 with respect to such 
     individual is allowed to another taxpayer for the taxable 
     year beginning in the calendar year in which such 
     individual's taxable year begins.
       ``(d) Limit on Period Credit Allowed.--A credit shall be 
     allowed under this section only with respect to interest paid 
     on any qualified education loan during the first 60 months 
     (whether or not consecutive) in which interest payments are 
     required. For purposes of this paragraph, any loan and all 
     refinancings of such loan shall be treated as 1 loan.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Qualified education loan.--The term `qualified 
     education loan' has the meaning given such term by section 
     221(d)(1).
       ``(2) Dependent.--The term `dependent' has the meaning 
     given such term by section 152.
       ``(f) Special Rules.--
       ``(1) Denial of double benefit.--No credit shall be allowed 
     under this section for any amount taken into account for any 
     deduction under any other provision of this chapter.
       ``(2) Married couples must file joint return.--If the 
     taxpayer is married at the close of the taxable year, the 
     credit shall be allowed under subsection (a) only if the 
     taxpayer and the taxpayer's spouse file a joint return for 
     the taxable year.
       ``(3) Marital status.--Marital status shall be determined 
     in accordance with section 7703.''.
       (b) Conforming Amendment.--The table of sections for 
     subpart A of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     the item relating to section 25B the following new item:

``Sec. 25C. Interest on higher education loans.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to any qualified education loan (as defined in 
     section 25C(e)(1) of the Internal Revenue Code of 1986, as 
     added by this section) incurred on, before, or after the date 
     of the enactment of this Act, but only with respect to any 
     loan interest payment due after December 31, 2004.

     SEC. 1003. HOPE AND LIFETIME LEARNING CREDITS TO BE 
                   REFUNDABLE.

       (a) Credit To Be Refundable.--Section 25A of the Internal 
     Revenue Code of 1986 (relating to Hope and Lifetime Learning 
     credits) is hereby moved to subpart C of part IV of 
     subchapter A of chapter 1 of such Code (relating to 
     refundable credits) and inserted after section 35.
       (b) Technical Amendments.--
       (1) Section 36 of such Code is redesignated as section 37.
       (2) Section 25A of such Code (as moved by subsection (a)) 
     is redesignated as section 36.
       (3) Paragraph (1) of section 36(a) of such Code (as 
     redesignated by paragraph (2)) is amended by striking ``this 
     chapter'' and inserting ``this subtitle''.
       (4) Subparagraph (B) of section 72(t)(7) of such Code is 
     amended by striking ``section 25A(g)(2)'' and inserting 
     ``section 36(g)(2)''.
       (5) Subparagraph (A) of section 135(d)(2) of such Code is 
     amended by striking ``section 25A'' and inserting ``section 
     36''.
       (6) Section 221(d) of such Code is amended--
       (A) by striking ``section 25A(g)(2)'' in paragraph (2)(B) 
     and inserting ``section 36(g)(2)'',
       (B) by striking ``section 25A(f)(2)'' in the matter 
     following paragraph (2)(B) and inserting ``section 
     36(f)(2)'', and
       (C) by striking ``section 25A(b)(3)'' in paragraph (3) and 
     inserting ``section 36(b)(3)''.
       (7) Section 222 of such Code is amended--
       (A) by striking ``section 25A'' in subparagraph (A) of 
     subsection (c)(2) and inserting ``section 36'',
       (B) by striking ``section 25A(f)'' in subsection (d)(1) and 
     inserting ``section 36(f)'', and
       (C) by striking ``section 25A(g)(2)'' in subsection (d)(1) 
     and inserting ``section 36(g)(2)''.
       (8) Section 529 of such Code is amended--
       (A) by striking ``section 25A(g)(2)'' in subclause (I) of 
     subsection (c)(3)(B)(v) and inserting ``section 36(g)(2)'',
       (B) by striking ``section 25A'' in subclause (II) of 
     subsection (c)(3)(B)(v) and inserting ``section 36'', and
       (C) by striking ``section 25A(b)(3)'' in clause (i) of 
     subsection (e)(3)(B) and inserting ``section 36(b)(3)''.
       (9) Section 530 of such Code is amended--
       (A) by striking ``section 25A(g)(2)'' in subclause (I) of 
     subsection (d)(2)(C)(i) and inserting ``section 36(g)(2)'',
       (B) by striking ``section 25A'' in subclause (II) of 
     subsection (d)(2)(C)(i) and inserting ``section 36'', and
       (C) by striking ``section 25A(g)(2)'' in clause (iii) of 
     subsection (d)(4)(B) and inserting ``section 36(g)(2)''.
       (10) Subsection (e) of section 6050S of such Code is 
     amended by striking ``section 25A'' and inserting ``section 
     36''.
       (11) Subparagraph (J) of section 6213(g)(2) of such Code is 
     amended by striking ``section 25A(g)(1)'' and inserting 
     ``section 36(g)(1)''.
       (12) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``or 
     from section 36 of such Code''.
       (13) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by striking the item relating to section 36 
     and inserting the following:

``Sec. 36. Hope and Lifetime Learning credits.
``Sec. 37. Overpayments of tax.''.
       (14) The table of sections for subpart A of such part IV is 
     amended by striking the item relating to section 25A.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Mr. Reid, Ms. Stabenow, Mr. Corzine, 
        Mr. Schumer, Ms. Mikulski, Mr. Akaka, Mr. Inouye, Mr. Levin, 
        Mr. Kerry, Mr. Lautenberg, Mr. Rockefeller, Mr. Dodd, Mr. 
        Pryor, and Mr. Durbin):
  S. 16. A bill to reduce to the cost of quality health care coverage 
and improve the availability of health care coverage for all Americans; 
to the Committee on Finance.
  Mr. KENNEDY. Mr. President, it's an honor to join our Democratic 
Leader and so many of our colleagues in introducing the Affordable 
Health Care Act.
  This legislation states our strong commitment as Democrats to end the 
crisis in health care that affects every family. It's a down payment on 
our commitment to quality, affordable health care for every American, 
and we

[[Page S184]]

will not rest until that goal is achieved.
  The worsening crisis in health care is caused by skyrocketing costs, 
declining insurance coverage, and less security for every family. 
Businesses--especially small businesses--find it increasingly difficult 
to provide decent coverage for their employees. Companies struggling 
with foreign competition are at an every-larger competitive 
disadvantage because of their constantly rising costs.
  Last year, the percentage of the Nation's gross domestic product 
devoted to health was 15.5%, the highest in our history. Since 2000, 
annual spending on health care has risen from $1.3 trillion to $1.7 
trillion, an increase of almost half a trillion dollars in just four 
years.
  Even worse, insurance premiums have soared by 59 percent during those 
four years. The cost of insurance for a family has risen by almost 
$3,000. Last year, the cost of the premiums for family coverage 
averaged $10,000, and was much higher for many families.
  Drug costs are also out of control. According to current data, they 
rose 47 percent in the first three years of the Bush Administration. 
Too many patients are cutting the pills their doctors prescribe in half 
or going without them altogether, because they can't afford the drugs 
they need to treat or prevent disease.
  Even Medicare premiums are out of control. The largest premium 
increase in Medicare's history went into effect just three weeks ago. 
Since President Bush took office, Medicare premiums have climbed by 72 
percent. Senior citizens, with an average income of $15,000, now have 
to pay almost $1,000 a year for their Part B premiums under Medicare. 
The recent report of the Medicare trustees included the stunning 
revelation that Medicare cost sharing and premiums will soon eat up 
more than 40 percent of the total Social Security benefit of the 
typical 85 year old.
  As a proportion of Gross Domestic Product spent on health care, 
America is first in the world by a large margin. We spend 30 percent 
more than the Swiss who are number two, a third more than the Germans, 
fifty percent more than the French and the Canadians, and seventy-eight 
percent more than the Japanese.
  These extraordinarily high levels of health spending might be 
justified if they produced dramatically better health care for the 
American people. But they don't. Among the world's leading 
industrialized countries, the United States ranks 22nd in average life 
expectancy and 25th in infant mortality.
  We also face a worsening crisis of the uninsured. Since President 
Bush took office, the number of uninsured Americans has increased by a 
shameful million a year. Today, 45 million Americans have no coverage. 
Between 2001 and 2004, five million jobs offering health insurance were 
lost.
  Even these figures understate the problem. Over a two-year period, 82 
million Americans--one out of every three non-elderly Americans--will 
be uninsured for a significant period of time.
  Tragically, eight and a half million children are uninsured and may 
well be denied the opportunity for a healthy start in life that should 
be the birthright of every child. Even people who have health insurance 
today cannot count on it being there for them tomorrow. No American 
family is more than one pink slip or one employer decision away from 
being uninsured.
  The uninsured are vulnerable not only to unaffordable costs, but to 
substandard or health care or no care at all. In any given year, one-
third of the uninsured go without needed medical care. Two hundred 
seventy thousand children suffering from asthma never see a doctor. 
Three hundred fifty thousand children with recurrent earaches never see 
a doctor. Three hundred fifty thousand children with severe sore 
throats never see a doctor.
  Twenty-seven thousand uninsured women are diagnosed with breast 
cancer each year. They are twice as likely as insured women not to 
receive medical treatment until their cancer has spread too far, and 
they are 50 percent more likely to die of the disease.
  Thirty-two thousand Americans with heart disease go without life-
saving and life-enhancing bypass surgery or angioplasty--because they 
are uninsured.
  The bottom line is that whether the disease is AIDS or mental illness 
or cancer or heart disease or diabetes, the uninsured are left out and 
left behind. In hospital and out, young or old, black or brown or 
white, they receive less care, suffer more, and are 25 percent more 
likely to die prematurely than those who have insurance.
  Even for those with insurance, the quality of health care is often 
needlessly compromised. Recent events cast serious doubt on the FDA's 
ability to respond promptly when drugs it has approved turn out to have 
dangerous side effects. By some estimates, tens of thousands of 
unnecessary deaths have resulted.
  The lack of coordination in our system results in duplicative, 
costly, and often counterproductive tests and procedures. The Midwest 
Business Group on Health estimates that the cost of poor quality care 
to employers providing health insurance coverage is $2,000 per worker, 
and it's paid in the form of higher insurance premiums. A recent study 
found that for many serious illnesses, patients are as likely to 
receive substandard care as they are to receive care meeting accepted 
professional standards.
  In the face of this massive crisis in health care, the Administration 
and Congress have been missing in action for too long. The Bush 
Administration and the Republican leadership in Congress defend the 
special interests that profit from the status quo and ignore the 
suffering of the millions of families victimized by their neglect.
  Reports suggest in fact that the Administration's new budget will 
propose to cut Medicaid, which provides health care for more than 50 
million of the poorest of the poor. The deficit must be addressed--but 
it was created by the Administration's tax breaks for the wealthy, and 
the poor and the sick should not have to bear the burden of reducing 
it. That's the wrong priority and the wrong values.
  The legislation we are offering today will not solve all these 
problems, but it is a good start, and we are committed to finishing the 
job.
  The Affordable Health Care Act guarantees that every child in America 
will have quality health care coverage.
  It reduces health costs substantially, by making FDA-approved drugs 
available at the same fair prices available to Canadians and Europeans, 
rather than the inflated prices charged to U.S. patients.
  It takes a giant step toward adoption of modern information 
technology in health care, which has the potential to dramatically 
improve the quality of care and dramatically reduce its cost--by as 
much as $140 billion a year. It also improves quality by giving the FDA 
additional authority to monitor the safety of approved drugs.
  It addresses the special burden faced by small businesses by offering 
tax credits to reduce the premiums they pay to cover their employees. 
It also establishes a demonstration program in 25 cities to see if a 
successful program in Michigan to expand insurance coverage for small 
businesses can be replicated elsewhere. Finally, our bill includes a 
sense of the Senate resolution to put Congress firmly on record against 
destructive cuts in Medicaid.
  Affordable health care is a high priority for every family, and it 
should be an equally high priority for this Congress. We face a crisis, 
and it is time to act. Senate Democrats are committed to guaranteeing 
the basic right to health care for all Americans, and when we say 
``all'', we mean ``all''.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 16

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Affordable 
     Health Care Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

      TITLE I--MAKING PRESCRIPTION DRUGS MORE SAFE AND AFFORDABLE

                Subtitle A--Access to Prescription Drugs

Sec. 101. Findings.
Sec. 102. Repeal of certain section regarding importation of 
              prescription drugs.
Sec. 103. Importation of prescription drugs; waiver of certain import 
              restrictions.

[[Page S185]]

Sec. 104. Additional waivers regarding personal importation; 
              enforcement policies of Secretary.
Sec. 105. Disposition of certain drugs denied admission into United 
              States.
Sec. 106. Civil actions regarding property.
Sec. 107. Wholesale distribution of drugs; Statements regarding prior 
              sale, purchase, or trade.
Sec. 108. Repeal of importation exemption under Controlled Substances 
              Import and Export Act.
Sec. 109. Effect on administration practices.

                    Subtitle B--Ensuring Drug Safety

Sec. 121. Drug safety. 
Sec. 122. Report by GAO on drug safety.

              TITLE II--MODERNIZING THE HEALTH CARE SYSTEM

Sec. 201. Amendment to the Public Health Service Act.
Sec. 202. Standardized measures of quality health care and data 
              collection.

TITLE III--MAKING HEALTH CARE MORE AFFORDABLE FOR CHILDREN AND PREGNANT 
                                 WOMEN

                   Subtitle A--Covering all Children

Sec. 300. Findings.

   Chapter 1--Expanded Coverage of Children Under Medicaid and SCHIP

Sec. 301. State option to receive 100 percent fmap for medical 
              assistance for children in poverty in exchange for 
              expanded coverage of children in working poor families 
              under title XXI.
Sec. 302. Elimination of cap on SCHIP funding for States that expand 
              eligibility for children.

   Chapter 2--State Options for Incremental Child Coverage Expansions

Sec. 311. State option to enroll low-income children of State employees 
              in SCHIP.
Sec. 312. State option for passive renewal of eligibility for children 
              under medicaid and SCHIP.

  Chapter 3--Tax Incentives for Health Insurance Coverage of Children

Sec. 321. Refundable credit for health insurance coverage of children.
Sec. 322. Forfeiture of personal exemption for any child not covered by 
              health insurance.

                        Chapter 4--Miscellaneous

Sec. 331. Requirement for group market health insurers to offer 
              dependent coverage option for workers with children.
Sec. 332. Effective date.

                  Subtitle B--Covering Pregnant Women

Sec. 351. State option to expand or add coverage of pregnant women 
              under the medicaid program and State Children's Health 
              Insurance Program.
Sec. 352. Optional coverage of legal immigrants under the medicaid 
              program and SCHIP.
Sec. 353. Promoting cessation of tobacco use under the medicaid 
              program.
Sec. 354. Promoting cessation of tobacco use under the maternal and 
              child health services block grant program.
Sec. 355. State option to provide family planning services and supplies 
              to individuals with incomes that do not exceed a State's 
              income eligibility level for medical assistance.
Sec. 356. State option to extend the postpartum period for provision of 
              family planning services and supplies.
Sec. 357. State option to provide wrap-around SCHIP coverage to 
              children who have other health coverage.
Sec. 358. Innovative outreach programs.

            Subtitle C--Affirming the Importance of Medicaid

Sec. 361. Sense of the Senate.

        TITLE IV--REDUCING HEALTH CARE COSTS FOR SMALL EMPLOYERS

                         Subtitle A--Tax Relief

Sec. 401. Refundable credit for small business employee health 
              insurance expenses.

                    Subtitle B--Three-Share Program

Sec. 421. Three-share programs.

      TITLE I--MAKING PRESCRIPTION DRUGS MORE SAFE AND AFFORDABLE

                Subtitle A--Access to Prescription Drugs

     SEC. 101. FINDINGS.

       Congress finds that--
       (1) Americans unjustly pay up to 5 times more to fill their 
     prescriptions than consumers in other countries;
       (2) the United States is the largest market for 
     pharmaceuticals in the world, yet American consumers pay the 
     highest prices for brand pharmaceuticals in the world;
       (3) a prescription drug is neither safe nor effective to an 
     individual who cannot afford it;
       (4) allowing and structuring the importation of 
     prescription drugs to ensure access to safe and affordable 
     drugs approved by the Food and Drug Administration will 
     provide a level of safety to American consumers that they do 
     not currently enjoy;
       (5) American seniors alone will spend $1,800,000,000,000 on 
     pharmaceuticals over the next 10 years; and
       (6) allowing open pharmaceutical markets could save 
     American consumers at least $38,000,000,000 each year.

     SEC. 102. REPEAL OF CERTAIN SECTION REGARDING IMPORTATION OF 
                   PRESCRIPTION DRUGS.

       Chapter VIII of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 381 et seq.) is amended by striking section 804.

     SEC. 103. IMPORTATION OF PRESCRIPTION DRUGS; WAIVER OF 
                   CERTAIN IMPORT RESTRICTIONS.

       (a) In General.--Chapter VIII of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by 
     section 102, is further amended by inserting after section 
     803 the following:

     ``SEC. 804. COMMERCIAL AND PERSONAL IMPORTATION OF 
                   PRESCRIPTION DRUGS.

       ``(a) Importation of Prescription Drugs.--
       ``(1) In general.--The Secretary shall in accordance with 
     this section provide by regulation that, in the case of 
     qualifying drugs imported or offered for import into the 
     United States from registered exporters or by registered 
     importers--
       ``(A) the limitation on importation that is established in 
     section 801(d)(1) is waived; and
       ``(B) the standards referred to in section 801(a) regarding 
     admission of the drugs are subject to subsection (g) of this 
     section (including with respect to qualifying drugs to which 
     section 801(d)(1) does not apply).
       ``(2) Importers.--A qualifying drug may not be imported 
     under paragraph (1) unless--
       ``(A) the drug is imported by a pharmacy or a wholesaler 
     that is a registered importer; or
       ``(B) the drug is imported by an individual for personal 
     use or for the use of a family member of the individual (not 
     for resale) from a registered exporter.
       ``(3) Rule of construction.--This section shall apply only 
     with respect to a drug that is imported or offered for import 
     into the United States--
       ``(A) by a registered importer; or
       ``(B) from a registered exporter to an individual.
       ``(4) Definitions.--
       ``(A) Registered exporter; registered importer.--For 
     purposes of this section:
       ``(i) The term `registered exporter' means an exporter for 
     which a registration under subsection (b) has been approved 
     and is in effect.
       ``(ii) The term `registered importer' means a pharmacy, 
     group of pharmacies, or a wholesaler for which a registration 
     under subsection (b) has been approved and is in effect.
       ``(iii) The term `registration condition' means a condition 
     that must exist for a registration under subsection (b) to be 
     approved.
       ``(B) Qualifying drug.--For purposes of this section, the 
     term `qualifying drug' means a prescription drug, other than 
     any of the following:
       ``(i) A controlled substance, as defined in section 102 of 
     the Controlled Substances Act (21 U.S.C. 802).
       ``(ii) A biological product, as defined in section 351 of 
     the Public Health Service Act (42 U.S.C. 262).
       ``(iii) An infused drug, including a peritoneal dialysis 
     solution.
       ``(iv) An intravenously injected drug.
       ``(v) A drug that is inhaled during surgery.
       ``(C) Other definitions.--For purposes of this section:
       ``(i) The term `exporter' means a person that is in the 
     business of exporting a drug from Canada to individuals in 
     the United States or that, pursuant to submitting a 
     registration under subsection (b), seeks to be in such 
     business.
       ``(ii) The term `importer' means a pharmacy, a group of 
     pharmacies, or a wholesaler that is in the business of 
     importing a drug into the United States or that, pursuant to 
     submitting a registration under subsection (b), seeks to be 
     in such business.
       ``(iii) The term `pharmacist' means a person licensed by a 
     State to practice pharmacy, including the dispensing and 
     selling of prescription drugs.
       ``(iv) The term `pharmacy' means a person that--

       ``(I) is licensed by a State to engage in the business of 
     selling prescription drugs at retail; and
       ``(II) employs 1 or more pharmacists.

       ``(v) The term `prescription drug' means a drug that is 
     described in section 503(b)(1).
       ``(vi) The term `wholesaler'--

       ``(I) means a person licensed as a wholesaler or 
     distributor of prescription drugs in the United States under 
     section 503(e)(2)(A); and
       ``(II) does not include a person authorized to import drugs 
     under section 801(d)(1).

       ``(D) Permitted country.--The term `permitted country' 
     means--
       ``(i) Australia;
       ``(ii) Canada;
       ``(iii) a member country of the European Union as of 
     January 1, 2003;
       ``(iv) Japan;
       ``(v) New Zealand; and
       ``(vi) Switzerland.
       ``(b) Registration of Importers and Exporters.--
       ``(1) Registration of importers and exporters.--A 
     registration condition is that the importer or exporter 
     involved (referred to in this subsection as a `registrant') 
     submits to the Secretary a registration containing the 
     following:
       ``(A) The name of the registrant and an identification of 
     all places of business of the

[[Page S186]]

     registrant that relate to qualifying drugs, including each 
     warehouse or other facility owned or controlled by, or 
     operated for, the registrant.
       ``(B) Such information as the Secretary determines to be 
     necessary to demonstrate that the registrant is in compliance 
     with registration conditions under--
       ``(i) in the case of an importer, subsections (c), (d), 
     (e), (g), and (j) (relating to the sources of exported drugs; 
     the inspection of facilities of the importer; the payment of 
     fees; compliance with the standards referred to in section 
     801(a); and maintenance of records and samples); or
       ``(ii) in the case of an exporter, subsections (c), (d), 
     (f), (g), (h), (i), and (j) (relating to the sources of 
     exported drugs; the inspection of facilities of the exporter 
     and the marking of compliant shipments; the payment of fees; 
     and compliance with the standards referred to in section 
     801(a); being licensed as a pharmacist; conditions for 
     individual importation from Canada; and maintenance of 
     records and samples).
       ``(C) An agreement by the registrant that the registrant 
     will not under subsection (a) import or export any drug that 
     is not a qualifying drug.
       ``(D) An agreement by the registrant to--
       ``(i) notify the Secretary of a recall or withdrawal of a 
     drug distributed in a permitted country that the registrant 
     has exported or imported, or intends to export or import, to 
     the United States under subsection (a);
       ``(ii) provide for the return to the registrant of such 
     drug; and
       ``(iii) cease, or not begin, the exportation or importation 
     of such drug unless the Secretary has notified the registrant 
     that exportation or importation of such drug may proceed.
       ``(E) An agreement by the registrant to ensure and monitor 
     compliance with each registration condition, to promptly 
     correct any noncompliance with such a condition, and to 
     promptly report to the Secretary any such noncompliance.
       ``(F) A plan describing the manner in which the registrant 
     will comply with the agreement under subparagraph (E).
       ``(G) An agreement by the registrant to enforce a contract 
     under subsection (c)(3)(B) against a party in the chain of 
     custody of a qualifying drug with respect to the authority of 
     the Secretary under clauses (ii) and (iii) of that 
     subsection.
       ``(H) An agreement by the registrant to notify the 
     Secretary of--
       ``(i) any change that the registrant intends to make 
     regarding information provided under subparagraph (A) or (B); 
     and
       ``(ii) any change that the registrant intends to make in 
     the compliance plan under subparagraph (F).
       ``(I) In the case of an exporter--
       ``(i) An agreement by the exporter that a qualifying drug 
     will not under subsection (a) be exported to any individual 
     not authorized pursuant to subsection (a)(2)(B) to be an 
     importer of such drug.
       ``(ii) An agreement to post a bond, payable to the Treasury 
     of the United States if, after opportunity for an informal 
     hearing, the Secretary determines that the exporter has 
     exported a drug to the United States that is not a qualifying 
     drug or that is not in compliance with subsections (g) or 
     (i), that is equal in value to the lesser of--

       ``(I) the value of drugs exported by the exporter to the 
     United States in a typical 4-week period over the course of a 
     year under this section; or
       ``(II) $1,000,000.

       ``(J) Such other provisions as the Secretary may require to 
     protect the public health while permitting--
       ``(i) the importation by pharmacies, groups of pharmacies, 
     wholesalers as registered importers of qualifying drugs under 
     subsection (a); and
       ``(ii) importation by individuals of qualifying drugs under 
     subsection (a).
       ``(2) Approval or disapproval of registration.--
       ``(A) In general.--Not later than 90 days after the date on 
     which a registrant submits to the Secretary a registration 
     under paragraph (1), the Secretary shall notify the 
     registrant whether the registration is approved or is 
     disapproved. The Secretary shall disapprove a registration if 
     there is reason to believe that the registrant is not in 
     compliance with one or more registration conditions, and 
     shall notify the registrant of such reason. In the case of a 
     disapproved registration, the Secretary shall subsequently 
     notify the registrant that the registration is approved if 
     the Secretary determines that the registrant is in compliance 
     with such conditions.
       ``(B) Changes in registration information.--Not later than 
     30 days after receiving a notice under paragraph (1)(G) from 
     a registrant, the Secretary shall determine whether the 
     change involved affects the approval of the registration of 
     the registrant under paragraph (1), and shall inform the 
     registrant of the determination.
       ``(3) Publication of contact information for registered 
     exporters.--Through the Internet website of the Food and Drug 
     Administration, the Secretary shall make readily available to 
     the public a list of registered exporters, including contact 
     information for the exporters. Promptly after the approval of 
     a registration submitted under paragraph (1), the Secretary 
     shall update the Internet website accordingly.
       ``(4) Suspension and termination.--
       ``(A) Suspension.--With respect to the effectiveness of a 
     registration submitted under paragraph (1):
       ``(i) Subject to clause (ii), if the Secretary determines, 
     after notice and opportunity for a hearing, that the 
     registrant has failed to maintain substantial compliance with 
     all registration conditions, the Secretary may suspend the 
     registration.
       ``(ii) If the Secretary determines that, under color of the 
     registration, the exporter has exported a drug or the 
     importer has imported a drug that is not a qualifying drug, 
     or a drug that does not meet the criteria under subsection 
     (g)(2)(A), or has exported a qualifying drug to an individual 
     in violation of subsection (i)(1)(F), the Secretary shall 
     immediately suspend the registration. A suspension under the 
     preceding sentence is not subject to the provision by the 
     Secretary of prior notice, and the Secretary shall provide to 
     the registrant an opportunity for a hearing not later than 10 
     days after the date on which the registration is suspended.
       ``(iii) The Secretary may reinstate the registration, 
     whether suspended under clause (i) or (ii), if the Secretary 
     determines that the registrant has demonstrated that further 
     violations of registration conditions will not occur.
       ``(B) Termination.--The Secretary, after notice and 
     opportunity for a hearing, may terminate the registration 
     under paragraph (1) of a registrant if the Secretary 
     determines that the registrant has engaged in a pattern or 
     practice of violating 1 or more registration conditions, or 
     if on 1 or more occasions the Secretary has under 
     subparagraph (A)(ii) suspended the registration of the 
     registrant. The Secretary may make the termination permanent, 
     or for a fixed period of not less than 1 year. During the 
     period in which the registration is terminated, any 
     registration submitted under paragraph (1) by the registrant, 
     or a person that is a partner in the export or import 
     enterprise, or a principal officer in such enterprise, and 
     any registration prepared with the assistance of the 
     registrant or such a person, has no legal effect under 
     this section.
       ``(c) Sources of Qualifying Drugs.--A registration 
     condition is that the exporter or importer involved agrees 
     that a qualifying drug will under subsection (a) be exported 
     or imported to the United States only if there is compliance 
     with the following:
       ``(1) The drug was manufactured in an establishment--
       ``(A) required to register under subsection (h) or (i) of 
     section 510; or
       ``(B) inspected by the Secretary as provided by this 
     section.
       ``(2) The establishment is located in the United States or 
     in any foreign country, and the establishment manufactured 
     the drug for distribution in the United States or for 
     distribution in 1 or more of the permitted countries (without 
     regard to whether in addition the drug was manufactured for 
     distribution in a foreign country that is not a permitted 
     country).
       ``(3) The exporter or importer obtained the drug--
       ``(A) directly from the establishment; or
       ``(B) directly from an entity that, by contract with the 
     exporter or importer--
       ``(i) provides to the exporter or importer a statement (in 
     such form and containing such information as the Secretary 
     may require) that, for the chain of custody from the 
     establishment, identifies each prior sale, purchase, or trade 
     of the drug (including the date of the transaction and the 
     names and addresses of all parties to the transaction);
       ``(ii) agrees to permit the Secretary to inspect such 
     statements and related records to determine their accuracy;
       ``(iii) agrees, with respect to the qualifying drugs 
     involved, to permit the Secretary to inspect warehouses and 
     other facilities of the entity for purposes of determining 
     whether the facilities are in compliance with any standards 
     under this Act that are applicable to facilities of that type 
     in the United States; and
       ``(iv) has ensured, through such contractual relationships 
     as may be necessary, that the Secretary has the same 
     authority regarding other parties in the chain of custody 
     from the establishment that the Secretary has under clauses 
     (ii) and (iii) regarding such entity.
       ``(4) The foreign country from which the importer will 
     import the drug is a permitted country.
       ``(5) The foreign country from which the exporter will 
     export the drug is Canada.
       ``(6) During any period in which the drug was not in the 
     control of the manufacturer of the drug, the drug did not 
     enter any country that is not a permitted country.
       ``(7) The exporter or importer retains a sample of each lot 
     of the drug sufficient for testing by the Secretary.
       ``(d) Inspection of Facilities; Marking of Shipments.--
       ``(1) Inspection of facilities.--A registration condition 
     is that, for the purpose of assisting the Secretary in 
     determining whether the exporter involved is in compliance 
     with all other registration conditions--
       ``(A) the exporter agrees to permit the Secretary--
       ``(i) to conduct onsite inspections, including monitoring 
     on a day-to-day basis, of places of business of the exporter 
     that relate to qualifying drugs, including each warehouse or 
     other facility owned or controlled by, or operated for, the 
     exporter;
       ``(ii) to have access, including on a day-to-day basis, 
     to--

[[Page S187]]

       ``(I) records of the exporter that relate to the export of 
     such drugs, including financial records; and
       ``(II) samples of such drugs;

       ``(iii) to carry out the duties described in paragraph (3); 
     and
       ``(iv) to carry out any other functions determined by the 
     Secretary to be necessary regarding the compliance of the 
     exporter; and
       ``(B) the Secretary has assigned 1 or more employees of the 
     Secretary to carry out the functions described in this 
     subsection for the Secretary not less than every 3 weeks on 
     the premises of places of businesses referred to in 
     subparagraph (A)(i), and such an assignment remains in effect 
     on a continuous basis.
       ``(2) Marking of compliant shipments.--A registration 
     condition is that the exporter involved agrees to affix to 
     each shipping container of qualifying drugs exported under 
     subsection (a) such markings as the Secretary determines to 
     be necessary to identify the shipment as being in compliance 
     with all registration conditions. Markings under the 
     preceding sentence--
       ``(A) shall be designed to prevent affixation of the 
     markings to any shipping container that is not authorized to 
     bear the markings; and
       ``(B) may include anti-counterfeiting or track-and-trace 
     technologies.
       ``(3) Certain duties relating to exporters.--Duties of the 
     Secretary with respect to an exporter include the following:
       ``(A) Verifying the chain of custody of a statistically 
     significant sample of qualifying drugs from the establishment 
     in which the drug was manufactured to the exporter, which may 
     be accomplished by the use of anticounterfeiting or track-
     and-trace technologies, if available.
       ``(B) Randomly reviewing records of exports to individuals 
     for the purpose of determining whether the drugs are being 
     imported by the individuals in accordance with the conditions 
     under subsection (i). Such reviews shall be conducted in a 
     manner that will result in a statistically significant 
     determination of compliance with all such conditions.
       ``(C) Monitoring the affixing of markings under paragraph 
     (2).
       ``(D) Inspect as the Secretary determines is necessary the 
     warehouses and other facilities of other parties in the chain 
     of custody of qualifying drugs.
       ``(E) Determine whether the exporter is in compliance with 
     all other registration conditions.
       ``(4) Certain duties relating to importers.--Duties of the 
     Secretary with respect to an importer include the following:
       ``(A) As authorized under section 704, inspect not less 
     than every 3 weeks, the places of business of the importer 
     that relate to the receipt and distribution of a qualifying 
     drug, including each warehouse or other facility owned or 
     controlled by, or operated for, the importer at which 
     qualifying drugs are received or from which they are 
     distributed to pharmacies.
       ``(B) During the inspections under subparagraph (A), verify 
     the chain of custody of a statistically significant sample of 
     qualifying drugs from the establishment in which the drug was 
     manufactured to the importer, which may be accomplished by 
     the use of anticounterfeiting or track-and-trace 
     technologies, if available.
       ``(C) Inspect as the Secretary determines is necessary the 
     warehouses and other facilities of other parties in the chain 
     of custody of qualifying drugs.
       ``(D) Determine whether the importer is in compliance with 
     all other registration conditions.
       ``(e) Importer Fees.--
       ``(1) Registration fee.--A registration condition is that 
     the importer involved pays to the Secretary a fee of $10,000 
     due on the date on which the importer first submits the 
     registration to the Secretary under subsection (b).
       ``(2) Inspection fee.--A registration condition is that the 
     importer involved pays to the Secretary in accordance with 
     this subsection a fee on a semiannual basis, with the first 
     fee due on the date that is 6 months after the date on which 
     the registration of the importer under subsection (b) is 
     first approved by the Secretary.
       ``(3) Amount of inspection fee.--
       ``(A) Aggregate total of fees.--The Secretary shall ensure 
     that the aggregate total of fees collected under paragraph 
     (2) for a fiscal year from all importers is sufficient, and 
     no more than necessary, to pay the costs of administering 
     this section with respect to registered importers for a 
     fiscal year, including--
       ``(i) inspection of the facilities of importers under 
     subsection (d)(4);
       ``(ii) reviewing qualifying drugs offered for import to 
     importers; and
       ``(iii) determining the compliance of importers with 
     registration conditions.
       ``(B) Limitation.--The aggregate total of fees collected 
     under paragraph (2) shall not exceed 1 percent of the total 
     price of drugs imported annually to the United States by 
     registered importers under this section.
       ``(C) Individual importer fee.--Subject to the limitation 
     described in subparagraph (B), a fee under paragraph (2) for 
     an importer shall be an amount that is a reasonable estimate 
     by the Secretary of the semiannual share of the importer of 
     the volume of drugs imported by importers under this section.
       ``(D) Adjustment of fee.--The Secretary shall annually 
     adjust the fees under paragraph (2) to ensure that the fees 
     accurately reflect the actual costs referred to in 
     subparagraph (A) and do not exceed, in the aggregate, 1 
     percent of the total price of drugs imported annually to the 
     United States under this section.
       ``(4) Use of fees.--Subject to appropriations Acts, fees 
     collected by the Secretary under paragraphs (1) and (2) are 
     available only to the Secretary and are for the sole purpose 
     of paying the costs referred to in paragraph (3)(A).
       ``(f) Exporter Fees.--
       ``(1) Registration fee.--A registration condition is that 
     the exporter involved pays to the Secretary a fee of $10,000 
     due on the date on which the exporter first submits that 
     registration to the Secretary under subsection (b).
       ``(2) Inspection fee.--A registration condition is that the 
     exporter involved pays to the Secretary in accordance with 
     this subsection a fee on a semiannual basis, with the first 
     fee due on the date that is 6 months after the date on which 
     the registration of the exporter under subsection (b) is 
     first approved by the Secretary.
       ``(3) Amount of inspection fee.--
       ``(A) Aggregate total of fees.--The Secretary shall ensure 
     that the aggregate total of fees collected under paragraph 
     (2) for a fiscal year from all exporters is sufficient, and 
     not more than necessary, to pay the costs of administering 
     this section with respect to registered exporters for a 
     fiscal year, including--
       ``(i) monitoring foreign facilities under subsection (d);
       ``(ii) developing, implementing, and maintaining under such 
     subsection a system to mark shipments to indicate compliance 
     with all registration conditions; and
       ``(iii) conducting under such subsection inspections within 
     the United States to determine compliance with conditions 
     under subsections (h) and (i).
       ``(B) Limitation.--The aggregate total of fees collected 
     under paragraph (2) shall not exceed 1 percent of the total 
     price of drugs imported annually to the United States by 
     registered exporters under this section.
       ``(C) Individual exporter fee.--Subject to the limitation 
     described in subparagraph (B), a fee under paragraph (2) for 
     an exporter shall be an amount that is a reasonable estimate 
     by the Secretary of the semiannual share of the exporter of 
     the volume of drugs exported by exporters under this section.
       ``(D) Adjustment of fee.--The Secretary shall annually 
     adjust the fees under paragraph (2) to ensure that the fees 
     accurately reflect the actual costs referred to in 
     subparagraph (A) and do not exceed, in the aggregate, 1 
     percent of the total price of drugs imported annually to the 
     United States under this section.
       ``(4) Use of fees.--Subject to appropriations Acts, fees 
     collected by the Secretary under paragraphs (1) and (2) are 
     only available to the Secretary and are for the sole purpose 
     of paying the costs referred to in paragraph (3)(A).
       ``(g) Compliance With Section 801(a).--
       ``(1) In general.--A registration condition is that each 
     qualifying drug exported under subsection (a) by the 
     registered exporter involved or imported under subsection (a) 
     by the registered importer involved is in compliance with the 
     standards referred to in section 801(a) regarding admission 
     of the drug into the United States, subject to paragraphs 
     (2), (3), and (4).
       ``(2) Section 505; approval status.--
       ``(A) In general.--For purposes of administrative and 
     judicial procedure, there is a presumption that a drug 
     proposed for export or import under subsection (a) is an 
     approved drug under section 505(b) if the following criteria 
     are met:
       ``(i) The drug proposed for export or import is in 
     compliance with subsection (c).
       ``(ii) The drug proposed for export or import has the same 
     active ingredient or ingredients, route of administration, 
     dosage form, and strength, according to information provided 
     by the labeling of the drug proposed for export or import, as 
     a drug (referred to in this subsection as a `U.S. label 
     drug') that--

       ``(I) is manufactured by or for the person that 
     manufactures the drug proposed for export or import; and
       ``(II) is approved under section 505(b).

       ``(B) Importation.--Subject to subparagraphs (D) and (E), a 
     drug meeting the criteria described in subparagraph (A) may, 
     in accordance with the other subsections of this section, be 
     imported into the United States.
       ``(C) Notice by manufacturer; general provisions.--
       ``(i) In general.--The person that manufactures a drug that 
     may be imported under subsection (a) shall in accordance with 
     this paragraph submit to the Secretary a notice that--

       ``(I) includes each difference in the drug from a condition 
     established in the approved application for the U.S. label 
     drug beyond the variations provided for in the application, 
     any difference in labeling, the date on which the drug with 
     such difference was, or will be, introduced for commercial 
     distribution in a permitted country, and such additional 
     information as the Secretary may require; or
       ``(II) states that there is no difference in the drug from 
     a condition established in the approved application for the 
     U.S. label drug beyond the variations provided for in the 
     application and differences in labeling.

       ``(ii) Information regarding foreign government.--A notice 
     under clause (i)(I) shall with respect to the permitted 
     country that

[[Page S188]]

     approved the drug for commercial distribution, or with 
     respect to which such approval is sought, include the 
     following:

       ``(I) Information demonstrating that the person submitting 
     the notice has also notified the government of the permitted 
     country in writing that the person is submitting to the 
     Secretary a notice under clause (i)(I), which notice 
     describes the difference in the drug from a condition 
     established in the approved application for the U.S. label 
     drug.
       ``(II) The information that the person submitted or will 
     submit to the government of the permitted country for 
     purposes of obtaining approval for commercial distribution of 
     the drug in the country which, if in a language other than 
     English, shall be accompanied by an English translation 
     verified to be complete and accurate, with the name, address, 
     and a brief statement of the qualifications of the person 
     that made the translation.

       ``(iii) Certifications.--The chief executive officer and 
     the chief medical officer of the manufacturer involved shall 
     each certify in the notice under clause (i) that--

       ``(I) the information provided in the notice is complete 
     and true; and

       ``(II) a copy of the notice has been provided to the 
     Federal Trade Commission and to the Assistant Attorney 
     General in charge of the Antitrust Division of the Department 
     of Justice (referred to in this subsection as the `Assistant 
     Attorney General').

       ``(iv) Fee.--If a notice submitted under clause (i) 
     includes a difference that would, under section 506A, require 
     the submission of a supplemental application if made as a 
     change to the U.S. label drug, the person that submits the 
     notice shall pay to the Secretary a fee in the same amount as 
     would apply if the person were paying a fee pursuant to 
     section 736(a)(1)(A)(ii). Subject to appropriations Acts, 
     fees collected by the Secretary under the preceding sentence 
     are available only to the Secretary and are for the sole 
     purpose of paying the costs of reviewing notices submitted 
     under clause (i).
       ``(v) Timing of submission of notices.--

       ``(I) Prior approval notices.--A notice under clause (i) to 
     which subparagraph (D) applies shall be submitted to the 
     Secretary not later than 120 days before the drug with the 
     difference is introduced for commercial distribution in a 
     permitted country, unless the country requires that 
     distribution of the drug with the difference begin less than 
     120 days after the country requires the difference.
       ``(II) Other approval notices.--A notice under clause (i) 
     to which subparagraph (E) applies shall be submitted to the 
     Secretary not later than the day on which the drug with the 
     difference is introduced for commercial distribution in a 
     permitted country.
       ``(III) Other notices.--A notice under clause (i) to which 
     subparagraph (F) applies shall be submitted to the Secretary 
     on the date that the drug is first introduced for commercial 
     distribution in a permitted country and annually thereafter.

       ``(vi) Review by secretary.--

       ``(I) In general.--In this paragraph, the difference in a 
     drug that may be imported under subsection (a) from the U.S. 
     label drug shall be treated by the Secretary as if it was a 
     manufacturing change to the U.S. label drug under section 
     506A.
       ``(II) Review by the secretary.--The Secretary shall review 
     and approve or disapprove the difference in a notice 
     submitted under clause (i), if required under section 506A, 
     not later than 120 days after the date on which the notice is 
     submitted.
       ``(III) Establishment inspection.--If review of such 
     difference would require an inspection by the Secretary of 
     the establishment in which the drug is manufactured, such 
     inspection shall be authorized by section 704.

       ``(vii) Publication of information on notices.--

       ``(I) In general.--Through the Internet website of the Food 
     and Drug Administration, the Secretary shall readily make 
     available to the public a list of notices submitted under 
     clause (i).
       ``(II) Contents.--The list under subclause (I) shall 
     include the date on which a notice is submitted and whether--

       ``(aa) a notice is under review;
       ``(bb) the Secretary has ordered that importation of the 
     drug from a permitted country cease; or
       ``(cc) the importation of the drug is permitted under 
     subsection (a).

       ``(III) Update.--The Secretary shall promptly update the 
     Internet website with any changes to the list.

       ``(D) Notice; drug difference requiring prior approval.--In 
     the case of a notice under subparagraph (C)(i) that includes 
     a difference that would, under section 506A(c) or 
     (d)(3)(B)(i), require the approval of a supplemental 
     application before the difference could be made to the U.S. 
     label drug the following shall occur:
       ``(i) Promptly after the notice is submitted, the Secretary 
     shall notify registered exporters, registered importers, the 
     Federal Trade Commission, and the Assistant Attorney General 
     that the notice has been submitted with respect to the drug 
     involved.
       ``(ii) If the Secretary has not made a determination 
     whether a supplemental application regarding the U.S. label 
     drug would be approved or disapproved by the date on which 
     the drug involved is to be introduced for commercial 
     distribution in a permitted country, the Secretary shall--

       ``(I) order that the importation of the drug involved from 
     the permitted country cease for the period in which the 
     Secretary completes review of the notice; and

       ``(II) promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the Attorney 
     General of the order.

       ``(iii) If the Secretary determines that such a 
     supplemental application regarding the U.S. label drug would 
     not be approved, the Secretary shall--

       ``(I) order that the importation of the drug involved from 
     the permitted country cease, or provide that an order under 
     clause (ii), if any, remains in effect;
       ``(II) notify the permitted country that approved the drug 
     for commercial distribution of the determination; and
       ``(III) promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the Assistant 
     Attorney General of the determination.

       ``(iv) If the Secretary determines that such a supplemental 
     application regarding the U.S. label drug would be approved, 
     the Secretary shall vacate the order under clause (ii), if 
     any, permit importation of the drug under subsection (a), and 
     promptly notify registered exporters, registered importers, 
     the Federal Trade Commission, and the Assistant Attorney 
     General of the determination.
       ``(E) Notice; drug difference not requiring prior 
     approval.--In the case of a notice under subparagraph (C)(i) 
     that includes a difference that would, under section 
     506A(d)(3)(B)(ii), not require the approval of a supplemental 
     application before the difference could be made to the U.S. 
     label drug the following shall occur:
       ``(i) During the period in which the notice is being 
     reviewed by the Secretary, the authority under this 
     subsection to import the drug involved continues in effect.
       ``(ii) If the Secretary determines that such a supplemental 
     application regarding the U.S. label drug would not be 
     approved, the Secretary shall order that the importation of 
     the drug involved from the permitted country cease, shall 
     notify the permitted country that approved the drug for 
     commercial distribution of the determination, and shall 
     promptly notify registered exporters, registered importers, 
     the Federal Trade Commission, and the Assistant Attorney 
     General of the determination.
       ``(F) Notice; drug difference not requiring approval; no 
     difference.--In the case of a notice under subparagraph 
     (C)(i) that includes a difference for which, under section 
     506A(d)(1)(A), a supplemental application would not be 
     required for the difference to be made to the U.S. label 
     drug, or that states that there is no difference, the 
     Secretary--
       ``(i) may not order that the importation of the drug 
     involved cease; and
       ``(ii) shall promptly notify registered exporters and 
     registered importers.
       ``(G) Differences in active ingredient, route of 
     administration, dosage form, or strength.--
       ``(i) In general.--A person who manufactures a U.S. label 
     drug shall submit an application under section 505(b) for a 
     drug that is manufactured for distribution in a permitted 
     country by or for the person that manufactures the U.S. label 
     drug if--

       ``(I) there is no drug for export from at least half of the 
     permitted countries with the same active ingredient or 
     ingredients, route of administration, dosage form, and 
     strength as the U.S. label drug; and
       ``(II) each active ingredient of the drug is related to an 
     active ingredient of the U.S. label drug, as defined in 
     clause (v).

       ``(ii) Application under section 505(b).--The application 
     under section 505(b) required under clause (i) shall--

       ``(I) request approval of the drug for the indication or 
     indications for which the U.S. label drug is approved under 
     section 505;
       ``(II) include the information that the person submitted to 
     the government of the permitted country for purposes of 
     obtaining approval for commercial distribution of the drug in 
     that country, which if in a language other than English, 
     shall be accompanied by an English translation verified to be 
     complete and accurate, with the name, address, and a brief 
     statement of the qualifications of the person that made the 
     translation;
       ``(III) include a right of reference to the application 
     under section 505(b) for the U.S. label drug; and
       ``(IV) include such additional information as the Secretary 
     may require.

       ``(iii) Timing of submission of application.--An 
     application under section 505(b) required under clause (i) 
     shall be submitted to the Secretary not later than the day on 
     which the information referred to in clause (ii)(II) is 
     submitted to the government of the permitted country.
       ``(iv) Notice of decision on application.--The Secretary 
     shall promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the Assistant 
     Attorney General of a determination to approve or to 
     disapprove an application under section 505(b) required under 
     clause (i).
       ``(v) Related active ingredients.--For purposes of clause 
     (i)(II), 2 active ingredients are related if they are--

       ``(I) the same; or
       ``(II) different salts, esters, or complexes of the same 
     moiety.

       ``(3) Section 502; labeling.--
       ``(A) Importation by registered importer.--
       ``(i) In general.--In the case of a qualifying drug that is 
     imported or offered for import by a registered importer, such 
     drug

[[Page S189]]

     shall be considered to be in compliance with section 502 if 
     the drug bears--

       ``(I) a copy of the labeling approved for the drug under 
     section 505, without regard to whether the copy bears the 
     trademark involved;
       ``(II) the name of the manufacturer and location of the 
     manufacturer;
       ``(III) the lot number assigned by the manufacturer; and
       ``(IV) the name, location, and registration number of the 
     importer.

       ``(ii) Request for copy of the labeling.--The Secretary 
     shall provide such copy to the registered importer involved, 
     upon request of the importer.
       ``(B) Importation by individual.--In the case of a 
     qualifying drug that is imported or offered for import by a 
     registered exporter to an individual, such drug shall be 
     considered to be in compliance with section 502 if the drug 
     bears a label providing the directions for use by the 
     consumer, and bears a copy of any special labeling that would 
     be required by the Secretary had the drug been dispensed by a 
     pharmacist in the United States, without regard to whether 
     the special labeling bears the trademark involved. The 
     Secretary shall provide to the registered exporter involved a 
     copy of the special labeling, upon request of the exporter.
       ``(4) Section 501; standards for refusing admission.--
       ``(A) In general.--For purposes of administrative and 
     judicial procedure, there is a presumption that a drug 
     proposed for export or import under subsection (a) is in 
     compliance with section 501 if the drug is in compliance with 
     subsection (c).
       ``(B) Standards for refusing admission.--A qualifying drug 
     exported under subsection (a) from a registered exporter or 
     imported by a registered importer may be refused admission 
     into the United States if 1 or more of the following applies:
       ``(i) The shipping container appears damaged in a way that 
     may affect the strength, quality, or purity of the drug.
       ``(ii) The Secretary becomes aware that--

       ``(I) the drug may be counterfeit;
       ``(II) the drug may have been prepared, packed, or held 
     under insanitary conditions; or
       ``(III) the methods used in, or the facilities or controls 
     used for, the manufacturing, processing, packing, or holding 
     of the drug do not conform to good manufacturing practice.

       ``(iii) The Secretary has obtained an injunction under 
     section 302 that prohibits the distribution of the drug in 
     interstate commerce.
       ``(iv) The Secretary has under section 505(e) withdrawn 
     approval of the drug.
       ``(v) The manufacturer of the drug has instituted a recall 
     of the drug.
       ``(vi) If the qualifying drug is exported from a registered 
     exporter to an individual and 1 or more of the following 
     applies:

       ``(I) The shipping container for such drug does not bear 
     the markings required under subsection (d)(2).
       ``(II) The markings on the shipping container appear to be 
     counterfeit.
       ``(III) The shipping container or markings appear to have 
     been tampered with.

       ``(h) Licensing as Pharmacist.--A registration condition is 
     that the exporter involved agrees that a qualifying drug will 
     be exported to an individual only if the Secretary has 
     verified that--
       ``(1) the exporter is authorized under Canadian law to 
     dispense prescription drugs; and
       ``(2) the exporter employs persons that are licensed under 
     Canadian law to dispense prescription drugs in sufficient 
     number to dispense safely the qualifying drugs exported by 
     the exporter to individuals, and the exporter assigns to 
     those persons responsibility for dispensing such qualifying 
     drugs to individuals.
       ``(i) Individuals; Conditions for Importation From 
     Canada.--
       ``(1) In general.--For purposes of subsection (a)(2)(B), 
     the importation of a qualifying drug by an individual is in 
     accordance with this subsection if the following conditions 
     are met:
       ``(A) The drug is accompanied by a copy of a prescription 
     for the drug, which prescription--
       ``(i) is valid under applicable Federal and State laws; and
       ``(ii) was issued by a practitioner who, under the law of a 
     State of which the individual is a resident, or in which the 
     individual receives care from the practitioner who issues the 
     prescription, is authorized to administer prescription drugs.
       ``(B) The drug is accompanied by a copy of the 
     documentation that was required under the law or regulations 
     of Canada as a condition of dispensing the drug to the 
     individual.
       ``(C) The copies referred to in subparagraphs (A)(i) and 
     (B) are marked in a manner sufficient--
       ``(i) to indicate that the prescription, and the equivalent 
     document in Canada, have been filled; and
       ``(ii) to prevent a duplicative filling by another 
     pharmacist.
       ``(D) The individual has provided to the registered 
     exporter a complete list of all drugs used by the individual 
     for review by the individuals who dispense the drug.
       ``(E) The quantity of the drug does not exceed a 90-day 
     supply.
       ``(F) The drug is not an ineligible subpart H drug. For 
     purposes of this section, a prescription drug is an 
     `ineligible subpart H drug' if the drug was approved by the 
     Secretary under subpart H of part 314 of title 21, Code of 
     Federal Regulations (relating to accelerated approval), with 
     restrictions under section 520 of such part to assure safe 
     use, and the Secretary has published in the Federal Register 
     a notice that the Secretary has determined that good cause 
     exists to prohibit the drug from being imported pursuant to 
     this subsection.
       ``(2) Notice regarding drug refused admission.--If a 
     registered exporter ships a drug to an individual pursuant to 
     subsection (a)(2)(B) and the drug is refused admission to the 
     United States, a written notice shall be sent to the 
     individual and to the exporter that informs the individual 
     and the exporter of such refusal and the reason for the 
     refusal.
       ``(j) Maintenance of Records and Samples.--A registration 
     condition is that the importer or exporter involved shall--
       ``(1) maintain records required under this section for not 
     less than 2 years; and
       ``(2) maintain samples of each lot of a drug required under 
     this section for not less than 2 years.
       ``(k) Drug Recalls.--
       ``(1) Manufacturers.--A person that manufactures a 
     prescription drug imported from a permitted country under 
     this section shall promptly inform the Secretary--
       ``(A) if the drug is recalled or withdrawn from the market 
     in a permitted country;
       ``(B) how the drug may be identified, including lot number; 
     and
       ``(C) the reason for the recall or withdrawal.
       ``(2) Secretary.--With respect to each permitted country, 
     the Secretary shall--
       ``(A) enter into an agreement with the government of the 
     country to receive information about recalls and withdrawals 
     of prescription drugs in the country; or
       ``(B) monitor recalls and withdrawals of prescription drugs 
     in the country using any information that is available to the 
     public in any media.
       ``(3) Notice.--The Secretary may notify, as appropriate, 
     registered exporters, registered importers, wholesalers, 
     pharmacies, or the public of a recall or withdrawal of a 
     prescription drug in a permitted country.''.
       (b) Prohibited Acts.--The Federal Food, Drug, and Cosmetic 
     Act is amended--
       (1) in section 301 (21 U.S.C. 331), by striking paragraph 
     (aa) and inserting the following:
       ``(aa)(1) The sale or trade by a pharmacist, or by a 
     business organization of which the pharmacist is a part, of a 
     qualifying drug that under section 804(a)(2)(A) was imported 
     by the pharmacist, other than--
       ``(A) a sale at retail made pursuant to dispensing the drug 
     to a customer of the pharmacist or organization; or
       ``(B) a sale or trade of the drug to a pharmacy or a 
     wholesaler registered to import drugs under section 804.
       ``(2) The sale or trade by an individual of a qualifying 
     drug that under section 804(a)(2)(B) was imported by the 
     individual.
       ``(3) The making of a materially false, fictitious, or 
     fraudulent statement or representation, or a material 
     omission, in a notice under clause (i) of section 
     804(g)(2)(C) or in an application required under section 
     804(g)(2)(G), or the failure to submit such a notice or 
     application.
       ``(4) The importation of a drug in violation of a 
     requirement under section 804.''; and
       (2) in section 303(a) (21 U.S.C. 333(a)), by striking 
     paragraph (6) and inserting the following:
       ``(6) Notwithstanding subsection (a), any person that 
     knowingly violates section 301(aa) (3) or (4) shall be 
     imprisoned not more than 10 years, or fined in accordance 
     with title 18, United States Code, or both.''.
       (c) Implementation.--
       (1) Rulemaking.--
       (A) In general.--
       (i) Promulgation by secretary.--Not later than 90 days 
     after the date of the enactment of this Act, the Secretary of 
     Health and Human Services shall promulgate an interim rule 
     for implementing section 804 of the Federal Food, Drug, and 
     Cosmetic Act, as added by subsection (a) of this section. 
     Such rule shall be developed and promulgated by the Secretary 
     without providing general notice of proposed rulemaking. Not 
     later than 1 year after the date on which the interim rule is 
     promulgated, the Secretary shall, in accordance with 
     procedures under section 553 of title 5, United States 
     Code, promulgate a final rule for implementing such 
     section 804, which may incorporate by reference provisions 
     of the interim rule, to the extent that such provisions 
     are not modified.
       (ii) Effect of rules.--The rules promulgated under clause 
     (i) shall permit the importation of prescription drugs--

       (I) from registered exporters by individuals effective on 
     the date of the promulgation of the interim rule;
       (II) from Canada by registered importers effective on the 
     date of the promulgation of the interim rule; and
       (III) from Australia, a member country of the European 
     Union as of January 1, 2003, Japan, New Zealand, or 
     Switzerland by registered importers on the date that is 1 
     year after the date of the enactment of this Act.

       (B) Certain exporters.--The interim rule under subparagraph 
     (A) shall provide that, in the review of registrations 
     submitted under subsection (b) of the section 804 referred to 
     in such subparagraph, registrations submitted by entities in 
     Canada that are significant exporters of prescription drugs 
     to individuals in the United States as of the date of the 
     enactment of this Act will have priority during the period in 
     which the interim rule

[[Page S190]]

     under subparagraph (A) is in effect. During such period, the 
     reference in subsection (b)(2)(A) of such section 804 to 90 
     days (relating to approval or disapproval of registrations) 
     is, as applied to such entities, deemed to be 30 days.
       (C) Drugs for import from canada.--The notices with respect 
     to drugs to be imported from Canada that are required under 
     subsection (g)(2)(C)(i)(I) of such section 804 and that 
     require approval under subsection (g)(2)(D) or (E) of such 
     section 804 shall be submitted to the Secretary not later 
     than 30 days after the date of enactment of this Act. The 
     notices with respect to drugs to be imported from Canada that 
     are required under subsection (g)(2)(C)(i) of such section 
     804 and that do not require approval under subsection 
     (g)(2)(D) or (E) of such section 804 shall be submitted to 
     the Secretary not later than 90 days after the date of 
     enactment of this Act.
       (D) Drugs for import from other countries.--The notices 
     with respect to drugs to be imported from Australia, a member 
     country of the European Union as of January 1, 2003, Japan, 
     New Zealand, or Switzerland that are required under 
     subsection (g)(2)(C)(i)(I) of such section 804 and that 
     require approval under subsection (g)(2)(D) or (E) of such 
     section 804 shall be submitted to the Secretary not later 
     than 180 days after the date of enactment of this Act. The 
     notices with respect to drugs to be imported from such 
     countries that are required under subsection (g)(2)(C)(i)(II) 
     of such section 804 and that do not require approval under 
     subsection (g)(2)(D) or (E) of such section 804 shall be 
     submitted to the Secretary not later than 270 days after the 
     date of enactment of this Act.
       (2) Personal importation from canada.--Until the expiration 
     of the 60-day period beginning on the date on which the 
     interim rule under paragraph (1)(A) is promulgated, an 
     individual may import a prescription drug from Canada for 
     personal use or for the use of a family member of the 
     individual (rather than for resale), subject to compliance 
     with the following conditions:
       (A) The drug is not--
       (i) a controlled substance, as defined in section 102 of 
     the Controlled Substances Act (21 U.S.C. 802);
       (ii) a biological product, as defined in section 351 of the 
     Public Health Service Act (42 U.S.C. 262);
       (iii) an infused drug, including a peritoneal dialysis 
     solution;
       (iv) an intravenously injected drug;
       (v) a drug that is inhaled during surgery; or
       (vi) a drug approved by the Secretary under subpart H of 
     part 314 of title 21, Code of Federal Regulations (relating 
     to accelerated approval) with restrictions under section 520 
     of such part to assure safe use.
       (B) The drug is dispensed by a person licensed in Canada to 
     dispense such drugs.
       (C) The drug is accompanied by a copy of the prescription 
     for the drug, which prescription--
       (i) is valid under applicable Federal and State laws; and
       (ii) was issued by a practitioner who, under the law of a 
     State of which the individual is a resident, or in which the 
     individual receives care from the practitioner who issues the 
     prescription, is authorized to administer prescription drugs.
       (D) The drug is accompanied by a copy of the document that 
     was required in Canada as a condition of dispensing the drug 
     to the individual.
       (E) The copies referred to in subparagraphs (C) and (D) are 
     marked in a manner sufficient--
       (i) to indicate that the prescription, and the equivalent 
     document in Canada, have been filled; and
       (ii) to prevent a duplicative filling by another 
     pharmacist.
       (F) The quantity of the drug does not exceed a 90-day 
     supply.
       (3) Facilitation of canadian imports.--Not less than 15 
     days after the enactment of this Act and until the expiration 
     of the 60-day period that begins on the date on which the 
     interim rule under paragraph (1)(A) is promulgated, the 
     Secretary shall, through the Internet website of the Food and 
     Drug Administration, make readily available to the public a 
     list of persons licensed in Canada to dispense prescription 
     drugs who are willing to export drugs under paragraph (2) to 
     individuals in the United States.
       (4) Effect of provisions.--The amendments made in 
     subsection (d), section 6, and section 7 of this Act shall 
     have no effect with respect to imports made under paragraph 
     (2).
       (d) Amendment of Certain Provision.--Section 801 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381) is 
     amended by striking subsection (g) and inserting the 
     following:
       ``(g) With respect to a prescription drug that is imported 
     or offered for import into the United States by an individual 
     who is not in the business of such importation, that is not 
     shipped by a registered exporter under section 804, and that 
     is refused admission under subsection (a), the Secretary 
     shall notify the individual that--
       ``(1) the drug has been refused admission because the drug 
     was not a lawful import under section 804;
       ``(2) the drug is not otherwise subject to a waiver of the 
     requirements of subsection (a);
       ``(3) the individual may under section 804 lawfully import 
     certain prescription drugs from Canadian exporters registered 
     with the Secretary; and
       ``(4) the individual can find information about such 
     importation, including a list of registered exporters, on the 
     Internet website of the Food and Drug Administration.''.
       (e) Anticompetitive Practices Relating to Importing and 
     Exporting Drugs to the United States.--
       (1) In general.--The Clayton Act (15 U.S.C. 12 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 27. RESTRAINT OF TRADE REGARDING PRESCRIPTION DRUGS.

       ``(a) In General.--It shall be unlawful for any person 
     engaged in commerce, directly or indirectly to--
       ``(1) charge a higher price for prescription drugs sold to 
     a registered exporter or other person that exports 
     prescription drugs to the United States under section 804 of 
     the Federal Food, Drug, and Cosmetic Act than the price that 
     is charged to another person that is in the same country and 
     that does not export prescription drugs into the United 
     States under section 804 of such Act;
       ``(2) charge a higher price for prescription drugs sold to 
     a registered importer or other person that distributes, 
     sells, or uses prescription drugs imported to the United 
     States under section 804 of such Act than the price that is 
     charged to another person in the United States that does not 
     import prescription drugs under section 804 of such Act, or 
     that does not distribute, sell, or use such drugs;
       ``(3) deny supplies of prescription drugs to a registered 
     exporter or other person that exports prescription drugs to 
     the United States under section 804 of such Act or to a 
     registered importer or other person that distributes, sells, 
     or uses prescription drugs imported to the United States 
     under section 804 of such Act;
       ``(4) publicly, privately, or otherwise refuse to do 
     business with a registered exporter or other person that 
     exports prescription drugs to the United States under section 
     804 of such Act or with a registered importer or other person 
     that distributes, sells, or uses prescription drugs imported 
     to the United States under section 804 of such Act;
       ``(5) specifically restrict supplies of prescription drugs 
     to a registered exporter or other person that exports 
     prescription drugs to the United States under section 804 of 
     such Act or to a registered importer or other person that 
     distributes, sells, or uses prescription drugs imported to 
     the United States under section 804 of such Act;
       ``(6) fail to submit a notice under subsection (g)(2)(C)(i) 
     of section 804 of such Act, fail to submit such a notice on 
     or before the date specified in subsection (g)(2)(C)(v) of 
     section 804 of such Act, submit such a notice that makes a 
     materially false, fictitious, or fraudulent statement, or 
     fail to provide promptly any information requested by the 
     Secretary of Health and Human Services to review such a 
     notice;
       ``(7) fail to submit an application required under 
     subsection (g)(2)(G) of section 804 of such Act, fail to 
     submit such an application on or before the date specified in 
     subsection (g)(2)(G)(ii) of section 804 of such Act, submit 
     such an application that makes a materially false, 
     fictitious, or fraudulent statement, or fail to provide 
     promptly any information requested by the Secretary of Health 
     and Human Services to review such an application;
       ``(8) cause there to be a difference (including a 
     difference in active ingredient, route of administration, 
     dosage form, strength, formulation, manufacturing 
     establishment, manufacturing process, or person that 
     manufactures the drug) between a prescription drug for 
     distribution in the United States and a prescription drug for 
     distribution in Australia, Canada, a member country of the 
     European Union as of January 1, 2003, Japan, New Zealand, or 
     Switzerland for the purpose of restricting importation of the 
     drug to the United States under section 804 of such Act;
       ``(9) refuse to allow an inspection authorized under 
     section 804 of such Act of an establishment that manufactures 
     a prescription drug that is offered for import under such 
     section;
       ``(10) fail to conform to the methods used in, or the 
     facilities used for, the manufacturing, processing, packing, 
     or holding of a prescription drug offered for import under 
     section 804 to good manufacturing practice under such Act; or
       ``(11) engage in any other action that the Federal Trade 
     Commission determines to unfairly restrict competition under 
     section 804 of such Act.
       ``(b) Presumption.--A difference (including a difference in 
     active ingredient, route of administration, dosage form, 
     strength, formulation, manufacturing establishment, 
     manufacturing process, or person that manufactures the drug) 
     between a prescription drug for distribution in the United 
     States and a prescription drug for distribution in Australia, 
     Canada, a member country of the European Union as of January 
     1, 2003, Japan, New Zealand, or Switzerland made after 
     January 1, 2004, shall be presumed to be for the purpose of 
     restricting importation of the drug to the United States 
     under section 804 of the Federal Food, Drug, and Cosmetic Act 
     unless--
       ``(1) the person manufacturing the drug for distribution in 
     the United States proves that the difference was required by 
     the country in which the drug is distributed;
       ``(2) the Secretary of Health and Human Services, acting 
     through the Commissioner

[[Page S191]]

     of Food and Drug, determines that the difference was 
     necessary to improve the safety or efficacy of the drug; or
       ``(3) the person manufacturing the drug for distribution in 
     the United States has given notice to the Secretary of Health 
     and Human Services under subsection (g)(2)(C)(i) of section 
     804 of such Act that the drug for distribution in the United 
     States is not different from a drug for distribution in not 
     fewer than half of those countries.
       ``(c) Affirmative Defense.--It shall be an affirmative 
     defense to a charge that a person has violated paragraph (1), 
     (2), (3), (4), or (5) of subsection (a) that the higher 
     prices charged for prescription drugs sold to a person, the 
     denial of supplies of prescription drugs to a person, the 
     refusal to do business with a person, or the specific 
     restriction or delay of supplies to a person is not based, in 
     whole or in part, on--
       ``(1) the person exporting or importing prescription drugs 
     to the United States under section 804 of the Federal Food, 
     Drug, and Cosmetic Act; or
       ``(2) the person distributing, selling, or using 
     prescription drugs imported to the United States under 
     section 804 of such Act.
       ``(d) Definitions.--In this section:
       ``(1) Prescription drug.--The term `prescription drug' 
     means a drug that is described in section 503(b)(1) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)).
       ``(2) Registered importer.--The term `registered importer' 
     has the meaning given such term in section 804 of the Federal 
     Food, Drug, and Cosmetic Act.
       ``(3) Registered exporter.--The term `registered exporter' 
     has the same meaning as in section 804 of the Federal Food, 
     Drug, and Cosmetic Act.''.
       (2) Applicability of amendments to importation under the 
     pharmaceutical market access and fair trade act of 2004.--
       (A) Personal importation from canada.--Paragraphs (1) 
     through (5) and (11) of subsection (a) of section 27 of the 
     Clayton Act (15 U.S.C. et seq.) (as amended by paragraph (1)) 
     shall apply with respect to the importation of drugs from 
     Canada under subsection (c)(2).
       (B) Notices respecting drug for import.--Paragraph (6) of 
     subsection (a) of section 27 of the Clayton Act (15 U.S.C. et 
     seq.) (as amended by paragraph (1)) shall apply with respect 
     to notices required under section 804(g)(2)(C)(i) of the 
     Federal Food Drug and Cosmetic Act (21 U.S.C. 
     384(g)(2)(C)(i)) that are not submitted by the dates required 
     under subsections (c)(1)(C) and (D).
       (f)  Exhaustion.--
       (1) In general.--Section 271 of title 35, United States 
     Code, is amended--
       (A) by redesignating subsections (h) and (i) as (i) and 
     (j), respectively; and
       (B) by inserting after subsection (g) the following:
       ``(h) It shall not be an act of infringement to use, offer 
     to sell, or sell within the United States or to import into 
     the United States any patented invention under section 804 of 
     the Federal Food, Drug, and Cosmetic Act that was first sold 
     abroad by or under authority of the owner or licensee of such 
     patent.''.
       (2) Rule of construction.--Nothing in the amendment made by 
     paragraph (1) shall be construed to affect the ability of a 
     patent owner or licensee to enforce their patent, subject to 
     such amendment.

     SEC. 104. ADDITIONAL WAIVERS REGARDING PERSONAL IMPORTATION; 
                   ENFORCEMENT POLICIES OF SECRETARY.

       (a) In General.--Section 801 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 381) is amended by adding at the end 
     the following:
       ``(p)(1) Waivers under this subsection are in addition to, 
     and independent of, the waiver pursuant to section 
     804(a)(2)(B).
       ``(2) With respect to the standards referred to in 
     subsection (d)(1), the Secretary shall establish by 
     regulation a waiver of such standards in the case of the 
     importation by an individual of a drug into the United States 
     in the following circumstances:
       ``(A) The drug was dispensed to the individual while the 
     individual was in the United States, the drug was dispensed 
     by a pharmacist or by a practitioner licensed by law to 
     administer the drug, and the individual traveled from the 
     United States with the drug.
       ``(B) The individual is entering the United States and the 
     drug accompanies the individual at the time of entry.
       ``(C) The drug does not appear to the Secretary to be 
     adulterated.
       ``(D) The quantity of the drug does not exceed a 90-day 
     supply.
       ``(E) The drug is accompanied by a statement that the 
     individual seeks to import the drug into the United States 
     under a personal importation waiver.
       ``(F) Such additional standards as the Secretary determines 
     to be appropriate to protect the public health.
       ``(3) With respect to the standards referred to in 
     subsections (a) and (d)(1), the Secretary shall establish by 
     regulation a waiver of such standards in the case of the 
     importation by an individual of a drug into the United States 
     in the following circumstances:
       ``(A) The drug was dispensed to the individual while the 
     individual was in a foreign country, and the drug was 
     dispensed in accordance with the laws and regulations of such 
     country.
       ``(B) The individual is entering the United States and the 
     drug accompanies the individual at the time of entry.
       ``(C) The drug is approved for commercial distribution in 
     the foreign country in which the drug was obtained.
       ``(D) The drug does not appear to the Secretary to be 
     adulterated.
       ``(E) The quantity of the drug does not exceed--
       ``(i) a 90-day supply if the drug is dispensed in 
     Australia, Canada, a member country of the European Union as 
     of January 1, 2003, Japan, New Zealand, or Switzerland; or
       ``(ii) a 14-day supply otherwise.
       ``(F) The drug is accompanied by a statement that the 
     individual seeks to import the drug into the United States 
     under a personal importation waiver.
       ``(G) Such additional standards as the Secretary determines 
     to be appropriate to protect the public health.
       ``(q) The Secretary may not administer any enforcement 
     policy that has the effect of permitting the importation of a 
     prescription drug into the United States in violation of this 
     Act or section 351 of the Public Health Service Act.''.
       (b) Additional Waiver.--This Act and the amendments made by 
     this Act shall not be construed as limiting the authority of 
     the Secretary of Health and Human Services to establish a 
     waiver of the standards referred to in section 801(a) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381(a)) with 
     respect to the importation by an individual of a drug into 
     the United States that does not meet such standards, provided 
     that such waiver is no more permissive than the guidance, as 
     in effect on January 1, 2004, that is provided in the item 
     numbered 2 (relating to a specific situation, consisting of 
     conditions (a) through (d)) under the heading ``Drugs, 
     Biologics, and Devices'' in chapter 9 of the FDA/ORA 
     Regulatory Procedures Manual (relating to import operations/
     actions), in the subchapter relating to coverage of personal 
     importations.

     SEC. 105. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION INTO 
                   UNITED STATES.

       (a) In General.--Chapter VIII of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by 
     section 102, is further amended by adding at the end the 
     following section:

     ``SEC. 805. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION.

       ``(a) In General.--The Secretary of Homeland Security shall 
     refuse admission to a shipment of drugs that is imported or 
     offered for import into the United States if the shipment has 
     a declared value of less than $10,000 and the drugs are in 
     violation of any standard referred to in section 801(a) or 
     801(d)(1), including any drugs imported or offered for import 
     under enforcement policies prohibited under section 801(q).
       ``(b) Importation Under Section 804.--In the case of a drug 
     that under section 804 is imported or offered for import from 
     a registered exporter, the reference in subsection (a) to 
     standards referred to in section 801(a) or 801(d)(1) shall be 
     considered a reference to standards referred to in section 
     804(g)(4)(B).
       ``(c) Destruction of Violative Shipments.--Drugs refused 
     admission under subsection (a) or (b) shall be destroyed, 
     subject to subsection (e). Section 801(b) does not authorize 
     the delivery of the drugs pursuant to the execution of a 
     bond, and the drugs may not be exported.
       ``(d) Certain Procedures.--
       ``(1) In general.--The refusal of admission and destruction 
     of drugs under this section may be carried out without notice 
     to the importer, owner, or consignee of the drugs except as 
     required by section 801(g) or section 804(i)(2). The issuance 
     of receipts for the drugs, and recordkeeping activities 
     regarding the drugs, may be carried out on a summary basis.
       ``(2) Objective of procedures.--Procedures promulgated 
     under paragraph (1) shall be designed toward the objective of 
     ensuring that, with respect to efficiently utilizing Federal 
     resources available for carrying out this section, a 
     substantial majority of shipments of drugs subject to 
     subsection (a) or (b) are identified and refused admission 
     and destroyed.
       ``(e) Evidence Exception.--Drugs may not be destroyed under 
     subsection (c) to the extent that the Attorney General of the 
     United States determines that the drugs should be preserved 
     as evidence or potential evidence with respect to an offense 
     against the United States.
       ``(f) Rule of Construction.--This section may not be 
     construed as having any legal effect on applicable law with 
     respect to a shipment of drugs that is imported or offered 
     for import into the United States and has a declared value 
     equal to or greater than $10,000.''.
       (b) Procedures.--Procedures for carrying out section 805 of 
     the Federal Food, Drug, and Cosmetic Act, as added by 
     subsection (a), shall be established not later than 90 days 
     after the date of the enactment of this Act.

     SEC. 106. CIVIL ACTIONS REGARDING PROPERTY.

        Section 303 of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 333) is amended by adding at the end the following 
     subsection:
       ``(g)(1) If a person is alienating or disposing of 
     property, or intends to alienate or dispose of property, that 
     is obtained as a result of or is traceable to a drug imported 
     in violation of section 801(a) or 801(d), the Attorney 
     General may commence a civil action in any Federal court--
       ``(A) to enjoin such alienation or disposition of property; 
     or
       ``(B) for a restraining order to--

[[Page S192]]

       ``(i) prohibit any person from withdrawing, transferring, 
     removing, dissipating, or disposing of any such property or 
     property of equivalent value; and
       ``(ii) appoint a temporary receiver to administer such 
     restraining order.
       ``(2) Proceedings under paragraph (1) shall be carried out 
     in the same manner as applies under section 1345 of title 18, 
     United States Code.''.

     SEC. 107. WHOLESALE DISTRIBUTION OF DRUGS; STATEMENTS 
                   REGARDING PRIOR SALE, PURCHASE, OR TRADE.

       (a) Striking of Exemptions; Applicability to Registered 
     Exporters.--Section 503(e) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 353(e)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``and who is not the manufacturer or an 
     authorized distributor of record of such drug'';
       (B) by striking ``to an authorized distributor of record 
     or''; and
       (C) by striking subparagraph (B) and inserting the 
     following:
       ``(B) The fact that a drug subject to subsection (b) is 
     exported from the United States does not with respect to such 
     drug exempt any person that is engaged in the business of the 
     wholesale distribution of the drug from providing the 
     statement described in subparagraph (A) to the person that 
     receives the drug pursuant to the export of the drug.
       ``(C)(i) The Secretary may by regulation establish 
     requirements that supersede subparagraph (A) (referred to in 
     this subparagraph as `alternative requirements') to identify 
     the chain of custody of a drug subject to subsection (b) from 
     the manufacturer of the drug throughout the wholesale 
     distribution of the drug to a pharmacist who intends to sell 
     the drug at retail if the Secretary determines that the 
     alternative requirements, which may include anti-
     counterfeiting or track-and-trace technologies, will identify 
     such chain of custody or the identity of the drug with equal 
     certainty to the requirements of subparagraph (A), and that 
     the alternative requirements are economically and technically 
     feasible.
       ``(ii) If the Secretary promulgates a final rule to 
     establish such alternative requirements, the final rule in 
     addition shall, with respect to the registration condition 
     established in clause (i) of section 804(c)(3)(B), establish 
     a condition equivalent to the alternative requirements, and 
     such equivalent condition supersedes such clause (i).'';
       (2) in paragraph (2)(A), by adding at the end the 
     following: ``The preceding sentence may not be construed as 
     having any applicability with respect to a registered 
     exporter under section 804.''; and
       (3) in paragraph (3), by striking ``and subsection (d)--'' 
     in the matter preceding subparagraph (A) and all that follows 
     through ``the term `wholesale distribution' means'' in 
     subparagraph (B) and inserting the following: ``and 
     subsection (d), the term `wholesale distribution' means''.
       (b) Conforming Amendment.--Section 503(d) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 353(d)) is amended by 
     adding at the end the following:
       ``(4) Each manufacturer of a drug subject to subsection (b) 
     shall maintain at its corporate offices a current list of the 
     authorized distributors of record of such drug.
       ``(5) For purposes of this subsection, the term `authorized 
     distributors of record' means those distributors with whom a 
     manufacturer has established an ongoing relationship to 
     distribute such manufacturer's products.''.

     SEC. 108. REPEAL OF IMPORTATION EXEMPTION UNDER CONTROLLED 
                   SUBSTANCES IMPORT AND EXPORT ACT.

       Section 1006 of the Controlled Substances Import and Export 
     Act (21 U.S.C. 956) is repealed.

     SEC. 109. EFFECT ON ADMINISTRATION PRACTICES.

       Notwithstanding any provision of this Act (and the 
     amendments made by this Act), nothing in this Act (or the 
     amendments made by this Act) shall be construed to change, 
     limit, or restrict the practices of the Food and Drug 
     Administration or the Bureau of Customs and Border Protection 
     in effect on January 1, 2004, with respect to the importation 
     of prescription drugs into the United States by an 
     individual, on the person of such individual, for personal 
     use.

                    Subtitle B--Ensuring Drug Safety

     SEC. 121. DRUG SAFETY.

       (a) In General.--Chapter V of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 351 et seq.) is amended by inserting 
     after section 506C the following:

     ``SEC. 507. DRUG SAFETY.

       ``(a) Phase IV Studies.--
       ``(1) In general.--The Secretary may require that the 
     sponsor of a drug that is approved or licensed under section 
     505(c) or under section 351 of the Public Health Service Act 
     conduct one or more studies, to be completed by a date after 
     approval or licensing of such drug specified by the 
     Secretary, that confirms or refutes an empirical or 
     theoretical hypothesis of a significant safety issue with the 
     drug, raised with respect to the drug or the class of the 
     drug, found in--
       ``(A) the MedWatch post-market surveillance system;
       ``(B) a clinical or epidemiological study; or
       ``(C) the scientific literature.
       ``(b) Supplements.--The sponsor of a drug that is approved 
     or licensed under section 505(c) or under section 351 of the 
     Public Health Service Act shall promptly submit the results 
     of a study required under subsection (a) as a supplement to 
     the application for the drug.
       ``(c) Public Disclosure.--The Secretary shall, not less 
     than every quarter, make public each study required under 
     subsection (a), including a description of, and the reason 
     for, the study, the required completion date, and whether the 
     study has been completed, through--
       ``(1) a notice in the Federal Register; and
       ``(2) a database that shall be readily accessible to the 
     public through the Internet site of the Food and Drug 
     Administration.
       ``(d) Civil Penalties.--
       ``(1) In general.--The Secretary may order the sponsor of a 
     drug that is approved or licensed under section 505(c) or 
     under section 351 of the Public Health Service Act to pay a 
     civil penalty, subject to paragraph (2), if, after providing 
     an opportunity for an informal hearing, the Secretary 
     determines that--
       ``(A) the sponsor has failed to complete a study required 
     under subsection (a) by the date specified by the Secretary; 
     and
       ``(B) there is no legitimate reason for such failure.
       ``(2) Amount of penalties.--The civil penalty order under 
     paragraph (1) may be assessed for each day the completion of 
     a required study of a drug is delayed in an amount that is 
     not more than 3 times the gross revenue received by the 
     sponsor for the average sales of the drug in a day.
       ``(3) Records relating to gross revenue.--When provided an 
     opportunity for an informal hearing under paragraph (1), a 
     drug sponsor shall provide to the Secretary all records 
     relating to the gross revenues received by the sponsor for 
     average sales of the drug in a day.
       ``(4) Procedure.--The provisions of paragraphs (3) (other 
     than subparagraph (A)), (4), and (5) of section 303(f) shall 
     apply to a violation under subsection (a) in the same manner 
     as such provisions apply to a violation of a requirement of 
     this Act that relates to devices.''.
       (b) Resources.--In addition to fees that may be available 
     to the Office of Drug Safety under sections 735 and 736 of 
     the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379g and 
     379h), there is authorized to be appropriated for the Office 
     of Drug Safety within the Center for Drug Evaluation and 
     Research of the Food and Drug Administration--
       (1) $30,000,000 for fiscal year 2006;
       (2) $40,000,0000 for fiscal year 2007;
       (3) $50,000,000 for fiscal year 2008;
       (4) $60,000,000 for fiscal year 2009; and
       (5) $70,00,000 for fiscal year 2010.

     SEC. 122. REPORT BY GAO ON DRUG SAFETY.

       (a) In General.--The Government Accountability Office shall 
     provide for the conduct of a study concerning measures to 
     increase the safety of prescription drugs, including--
       (1) whether Federal funding levels are adequate to ensure 
     drug safety and whether the uncertainty associated with the 
     Federal budgetary process hampers planning;
       (2) whether the lack of permanent leadership at the Food 
     and Drug Administration has contributed to problems in 
     decisionmaking and in transmitting information to the public 
     concerning the safety of drugs;
       (3) whether prolonged and rampant vacancies within the Food 
     and Drug Administration have contributed to the ability of 
     the Food and Drug Administration to properly examine drug 
     safety;
       (4) whether conflicts of interest exist that unduly bias 
     approvals or later reviews of drug safety;
       (5) whether employees of the Food and Drug Administration 
     have been improperly threatened or face any barriers to 
     raising concerns about drug safety;
       (6) whether the procedure of the Food and Drug 
     Administration for notifying the public of possible drug 
     safety issues is appropriate and complied with;
       (7) whether further measures or authorities are necessary 
     to ensure the safety of drugs; and
       (8) other matters determined appropriate.
       (b) Report.--Not later than 90 days after the date of 
     enactment of this Act, the Government Accountability Office 
     shall prepare and submit to the appropriate committees of 
     Congress a report concerning the results of the study 
     conducted under subsection (a). Such report shall include a 
     proposal (including legislative language) for improving the 
     safety of prescription drugs.

              TITLE II--MODERNIZING THE HEALTH CARE SYSTEM

     SEC. 201. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.

       The Public Health Service Act (42 U.S.C. 201 et seq.) is 
     amended by adding at the end thereof the following:

            ``TITLE XXIX--HEALTH CARE INFORMATION TECHNOLOGY

     ``SEC. 2901. DEFINITIONS.

       ``In this title:
       ``(1) Coverage area.--The term `coverage area' means the 
     boundaries of a local health information infrastructure.
       ``(2) Director.--The term `Director' means the Director of 
     the Office of Health Information Technology.
       ``(3) Health care provider.--The term `health care 
     provider' means a hospital, skilled nursing facility, home 
     health entity, health care clinic, community health center, 
     group practice (as defined in section

[[Page S193]]

     1877(h)(4) of the Social Security Act, including practices 
     with only 1 physician), and any other facility or clinician 
     determined appropriate by the Director.
       ``(4) Health information technology.--The term `health 
     information technology' means a computerized system that--
       ``(A) is consistent with the standards developed pursuant 
     to section 2903;
       ``(B) permits the secure electronic transmission of 
     information to other health care providers and public health 
     entities; and
       ``(C) includes--
       ``(i) an electronic health record (EHR) that provides 
     access in real-time to the patient's complete medical record;
       ``(ii) a personal health record (PHR) through which an 
     individual (and anyone authorized by such individual) can 
     maintain and manage their health information;
       ``(iii) computerized provider order entry (CPOE) technology 
     that permits the electronic ordering of diagnostic and 
     treatment services, including prescription drugs;
       ``(iv) decision support to assist physicians in making 
     clinical decisions by providing electronic alerts and 
     reminders to improve compliance with best practices, promote 
     regular screenings and other preventive practices, and 
     facilitate diagnoses and treatments;
       ``(v) error notification procedures so that a warning is 
     generated if an order is entered that is likely to lead to a 
     significant adverse outcome for the patient; and
       ``(vi) tools to allow for the collection, analysis, and 
     reporting of data on adverse events, near misses, and the 
     quality of care provided to the patient.
       ``(5) Local health information infrastructures.--The term 
     `local health information infrastructure' means an 
     independent organization of health care entities established 
     for the purpose of linking health information systems to 
     electronically shared information. A local health information 
     infrastructure may not be a single business entity.
       ``(6) Office.--The term `Office' means the Office of Health 
     Information Technology established under section 2902.

     ``SEC. 2902. OFFICE OF HEALTH INFORMATION TECHNOLOGY.

       ``(a) Establishment.--There is established within the 
     executive office of the President an Office of Health 
     Information Technology. The Office shall be headed by a 
     Director to be appointed by the President. The Director shall 
     report directly to the President.
       ``(b) Purpose.--It shall be the purpose of the Office to--
       ``(1) improve the quality and increase the efficiency of 
     health care delivery through the use of health information 
     technology;
       ``(2) provide national leadership relating to, and 
     encourage the adoption of, health information technology;
       ``(3) direct all health information technology activities 
     within the Federal Government; and
       ``(4) facilitate the interaction between the Federal 
     Government and the private sector relating to health 
     information technology development and use.
       ``(c) Duties and Responsibilities.--The Office shall be 
     responsible for the following:
       ``(1) National strategy.--The Office shall develop a 
     national strategy for improving the quality and enhancing the 
     efficiency of health care through the improved use of health 
     information technology and the creation of a National Health 
     Information Infrastructure.
       ``(2) Federal leadership.--The Office shall--
       ``(A) serve as the principle advisor to the President 
     concerning health information technology;
       ``(B) direct all health information technology activity 
     within the Federal Government, including approving or 
     disapproving agency policies submitted under paragraph (3);
       ``(C) work with public and private health information 
     technology stakeholders to implement the national strategy 
     described in paragraph (1); and
       ``(D) ensure that health information technology is utilized 
     as fully as practicable in carrying out health surveillance 
     efforts.
       ``(3) Agency policies.--
       ``(A) In general.--The Office shall, in accordance with 
     this paragraph, approve or disapprove the policies of Federal 
     departments or agencies with respect to any policy proposed 
     to be implemented by such agency or department that would 
     significantly affect that agency or department's use of 
     health information technology.
       ``(B) Submission of proposal.--The head of any Federal 
     Government agency or department that desires to implement any 
     policy with respect to such agency or department that would 
     significantly affect that agency or department's use of 
     health information technology shall submit an implementation 
     proposal to the Office at least 60 days prior to the proposed 
     date of the implementation of such policy.
       ``(C) Approval or disapproval.--Not later than 60 days 
     after the date on which a proposal is received under 
     subparagraph (B), the Office shall determine whether to 
     approve the implementation of such proposal. In making such 
     determination, the Office shall consider whether the proposal 
     is consistent with the national strategy described in 
     paragraph (1). If the Office fails to make a determination 
     within such 60-day period, such proposal shall be deemed to 
     be approved.
       ``(D) Failure to approve.--Except as otherwise provided for 
     by law, a proposal submitted under subparagraph (B) may not 
     be implemented unless such proposal is approved or deemed to 
     be approved under subparagraph (C).
       ``(4) Coordination.--The Office shall--
       ``(A) encourage the development and adoption of clinical, 
     messaging, and decision support health information data 
     standards, pursuant to the requirements of section 2903;
       ``(B) ensure the maintenance and implementation of the data 
     standards described in subparagraph (A);
       ``(C) oversee and coordinate the health information 
     technology efforts of the Federal Government;
       ``(D) ensure the compliance of the Federal Government with 
     Federally adopted health information technology data 
     standards;
       ``(E) ensure that the Federal Government consults and 
     collaborates on decision making with respect to health 
     information technology with the private sector and other 
     interested parties; and
       ``(F) in consultation with private sector, adopt 
     certification and testing criteria to determine if electronic 
     health information systems interoperate.
       ``(5) Communication.--The Office shall--
       ``(A) act as the point of contact for the private sector 
     with respect to the use of health information technology; and
       ``(B) work with the private sector to collect and 
     disseminate best health information technology practices.
       ``(6) Evaluation and dissemination.--The Office shall 
     coordinate with the Agency for Health Research and Quality 
     and other Federal agencies to--
       ``(A) evaluate and disseminate information relating to 
     evidence of the costs and benefits of health information 
     technology and to whom those costs and benefits accrue;
       ``(B) evaluate and disseminate information on the impact of 
     health information technology on the quality and efficiency 
     of patient care; and
       ``(C) review Federal payment structures and differentials 
     for health care providers that utilize health information 
     technology systems.
       ``(7) Technical assistance.--The Office shall utilize 
     existing private sector quality improvement organizations 
     to--
       ``(A) promote the adoption of health information technology 
     among healthcare providers; and
       ``(B) provide technical assistance concerning the 
     implementation of health information technology to healthcare 
     providers.
       ``(8) Federal reimbursement.--
       ``(A) In general.--Not later than 6 months after the date 
     of enactment of this title, the Office shall make 
     recommendations to the President and the Secretary of Health 
     and Human Services on changes to Federal reimbursement and 
     payment structures that would encourage the adoption of 
     information technology (IT) to improve health care quality 
     and safety.
       ``(B) Plan.--Not later than 90 days after receiving 
     recommendations under subparagraph (A), the Secretary shall 
     provide to the relevant Committees of Congress a report that 
     provides, with respect to each recommendation, a plan for the 
     implementation, or an explanation as to why implementation is 
     inadvisable, of such recommendations. The Office shall 
     continue to monitor federally funded and 
     supported information technology and quality initiatives 
     (including the initiatives authorized in this title), and 
     periodically update recommendations to the President and 
     the Secretary.
       ``(d) Resources.--The President shall make available to the 
     Office, the resources, both financial and otherwise, 
     necessary to enable the Director to carry out the purposes 
     of, and perform the duties and responsibilities of the Office 
     under, this section.
       ``(e) Detail of Federal Employees.--Upon the request of the 
     Director, the head of any Federal agency is authorized to 
     detail, without reimbursement from the Office, any of the 
     personnel of such agency to the Office to assist it in 
     carrying out its duties under this section. Any such detail 
     shall not interrupt or otherwise affect the civil service 
     status or privileges of the Federal employee.

     ``SEC. 2903. PROMOTING THE INTEROPERABILITY OF HEALTH CARE 
                   INFORMATION TECHNOLOGY SYSTEMS.

       ``(a) Development, and Federal Government Adoption, of 
     Standards.--
       ``(1) Adoption.--
       ``(A) In general.--Not later than 2 years after the date of 
     the enactment of this title, the Director, in collaboration 
     with the Consolidated Health Informatics Initiative (or a 
     successor organization to such Initiative), shall provide for 
     the adoption by the Federal Government of national data and 
     communication health information technology standards that 
     promote the efficient exchange of data between varieties of 
     provider health information technology systems. In carrying 
     out the preceding sentence, the Director may adopt existing 
     standards. Except as otherwise provided for in this title, 
     standards adopted under this section shall be voluntary for 
     private sector entities.
       ``(B) Grants or contracts.--The Director may utilize grants 
     or contracts to provide for the private sector development of 
     standards for adoption by the Federal Government under 
     subparagraph (A).
       ``(C) Definition.--In this paragraph, the term `provide 
     for' means that the Director shall promulgate, and each 
     Federal agency or department shall adopt, regulations to 
     ensure that each such agency or department complies with the 
     requirements of subsection (b).

[[Page S194]]

       ``(2) Requirements.--The standards developed and adopted 
     under paragraph (1) shall be designed to--
       ``(A) enable health information technology to be used for 
     the collection and use of clinically specific data;
       ``(B) promote the interoperability of health care 
     information across health care settings;
       ``(C) facilitate clinical decision support through the use 
     of health information technology; and
       ``(D) ensure the privacy and confidentiality of medical 
     records.
       ``(3) Public private partnership.--Consistent with 
     activities being carried out on the date of enactment of this 
     title, including the Consolidated Health Informatics 
     Initiative (or a successor organization to such Initiative), 
     health information technology standards shall be adopted by 
     the Director under paragraph (1) at the conclusion of a 
     collaborative process that includes consultation between the 
     Federal Government and private sector health care and 
     information technology stakeholders.
       ``(4) Privacy and security.--The regulations promulgated by 
     the Secretary under part C of title XI of the Social Security 
     Act (42 U.S.C. 1320d et seq.) and sections 261, 262, 263, and 
     264 of the Health Insurance Portability and Accountability 
     Act of 1996 (42 U.S.C. 1320d-2 note) with respect to the 
     privacy, confidentiality, and security of health information 
     shall apply to the implementation of programs and activities 
     under this title.
       ``(5) Pilot tests.--To the extent practical, the Director 
     shall pilot test the health information technology data 
     standards developed under paragraph (1) prior to their 
     implementation under this section.
       ``(6) Dissemination.--
       ``(A) In general.--The Director shall ensure that the 
     standards adopted under paragraph (1) are widely disseminated 
     to interested stakeholders.
       ``(B) Licensing.--To facilitate the dissemination and 
     implementation of the standards developed and adopted under 
     paragraph (1), the Director may license such standards, or 
     utilize other means, to ensure the widespread use of such 
     standards.
       ``(b) Implementation of Standards.--
       ``(1) Purchase of systems by the secretary.--Effective 
     beginning on the date that is 1 year after the adoption of 
     the technology standards pursuant to subsection (a), the 
     Secretary shall not purchase any health care information 
     technology system unless such system is in compliance with 
     the standards adopted under subsection (a), nor shall the 
     Director approve any proposal pursuant to section 2902(c)(3) 
     unless such proposal utilizes systems that are in compliance 
     with the standards adopted under subsection (a).
       ``(2) Recipients of federal funds.--Effective on the date 
     described in paragraph (1), no appropriated funds may be used 
     to purchase a health care information technology system 
     unless such system is in compliance with applicable standards 
     adopted under subsection (a).
       ``(c) Modification of Standards.--The Director shall 
     provide for ongoing oversight of the health information 
     technology standards developed under subsection (a) to--
       ``(1) identify gaps or other shortcomings in such 
     standards; and
       ``(2) modify such standards when determined appropriate or 
     develop additional standards, in collaboration with standard 
     setting organizations.

     ``SEC. 2904. LOAN GUARANTEES FOR THE ADOPTION OF HEALTH 
                   INFORMATION TECHNOLOGY.

       ``(a) In General.--The Director shall guarantee payment of 
     the principal of and the interest on loans made to eligible 
     entities to enable such entities--
       ``(1) to implement local health information infrastructures 
     to facilitate the development of interoperability across 
     health care settings to improve quality and efficiency; or
       ``(2) to facilitate the purchase and adoption of health 
     information technology to improve quality and efficiency.
       ``(b) Eligibility.--To be eligible to receive a loan 
     guarantee under subsection (a) an entity shall--
       ``(1) with respect to an entity desiring a loan guarantee--
       ``(A) under subsection (a)(1), be a coalition of entities 
     that represent an independent consortium of health care 
     stakeholders within a community that--
       ``(i) includes--

       ``(I) physicians (as defined in section 1881(r)(1) of the 
     Social Security Act);
       ``(II) hospitals; and
       ``(III) group health plans or other health insurance 
     issuers (as such terms are defined in section 2791); and

       ``(ii) may include any other health care providers; or
       ``(B) under subsection (a)(2) be a health care provider;
       ``(2) to the extent practicable, adopt the national health 
     information technology standards adopted under section 2903;
       ``(3) provide assurances that the entity shall submit to 
     the Director regular reports on the activities carried out 
     under the loan guarantee, including--
       ``(A) a description of the financial costs and benefits of 
     the project involved and of the entities to which such costs 
     and benefits accrue;
       ``(B) a description of the impact of the project on health 
     care quality and safety; and
       ``(C) a description of any reduction in duplicative or 
     unnecessary care as a result of the project involved;
       ``(4) provide assurances that not later than 30 days after 
     the development of the standard quality measures pursuant to 
     section 2906, the entity shall submit to the Director regular 
     reports on such measures, including provider level data and 
     analysis of the impact of information technology on such 
     measures;
       ``(5) prepare and submit to the Director an application at 
     such time, in such manner, and containing such information as 
     the Director may require.
       ``(c) Use of Funds.--Amounts received under a loan 
     guarantee under subsection (a) shall be used--
       ``(1) with respect to a loan guarantee described in 
     subsection (a)(1)--
       ``(A) to develop a plan for the implementation of a local 
     health information infrastructure under this section;
       ``(B) to establish systems for the sharing of data in 
     accordance with the national health information technology 
     standards developed under section 2903;
       ``(C) to purchase directly related integrated hardware and 
     software to establish an interoperable health information 
     technology system that is capable of linking to a local 
     health care information infrastructure; and
       ``(D) to train staff, maintain health information 
     technology systems, and maintain adequate security and 
     privacy protocols;
       ``(2) with respect to a loan guarantee described in 
     subsection (a)(2)--
       ``(A) to develop a plan for the purchase and installation 
     of health information technology;
       ``(B) to purchase directly related integrated hardware and 
     software to establish an interoperable health information 
     technology system that is capable of linking to a national or 
     local health care information infrastructure; and
       ``(C) to train staff, maintain health information 
     technology systems, and maintain adequate security and 
     privacy protocols; and
       ``(3) to carry out any other activities determined 
     appropriate by the Director.
       ``(d) Special Considerations for Certain Entities.--In 
     awarding loan guarantees under this section, the Director 
     shall give special consideration to eligible entities that--
       ``(1) provide service to low-income and underserved 
     populations; and
       ``(2) agree to electronically submit the information 
     described in paragraphs (3) and (4) of subsection (b) on a 
     daily basis.
       ``(e) Special Considerations for Local Health Information 
     Infrastructures.--In awarding loan guarantees under this 
     section to local health information infrastructures, the 
     Director shall give special consideration to eligible 
     entities that--
       ``(1) include at least 50 percent of the patients living in 
     the designated coverage area;
       ``(2) incorporate public health surveillance and reporting 
     into the overall architecture of the proposed infrastructure; 
     and
       ``(3) link local health information infrastructures.
       ``(f) Areas of Specific Interest.--In awarding loan 
     guarantees under this section, the Director shall include--
       ``(1) entities with a coverage area that includes an entire 
     State; and
       ``(2) entities with a multi-state coverage area.
       ``(g) Administrative Provisions.--
       ``(1) Aggregate amount.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the aggregate amount of principal of loans guaranteed under 
     subsection (a) with respect to an eligible entity may not 
     exceed $5,000,000. In any 12-month period the amount 
     disbursed to an eligible entity under this section (by a 
     lender under a guaranteed loan) may not exceed $5,000,000.
       ``(B) Exception.--The cumulative total of the principal of 
     the loans outstanding at any time to which guarantees have 
     been issued under subsection (a) may not exceed such 
     limitations as may be specified in appropriation Acts.
       ``(2) Protection of federal government.--
       ``(A) In general.--The Director may not approve an 
     application for a loan guarantee under this section unless 
     the Director determines that--
       ``(i) the terms, conditions, security (if any), and 
     schedule and amount of repayments with respect to the loan 
     are sufficient to protect the financial interests of the 
     United States and are otherwise reasonable, including a 
     determination that the rate of interest does not exceed such 
     percent per annum on the principal obligation outstanding as 
     the Director determines to be reasonable, taking into account 
     the range of interest rates prevailing in the private market 
     for loans with similar maturities, terms, conditions, and 
     security and the risks assumed by the United States; and
       ``(ii) the loan would not be available on reasonable terms 
     and conditions without the enactment of this section.
       ``(B) Recovery.--
       ``(i) In general.--The United States shall be entitled to 
     recover from the applicant for a loan guarantee under this 
     section the amount of any payment made pursuant to such loan 
     guarantee, unless the Director for good cause waives such 
     right of recovery, and, upon making any such payment, the 
     United States shall be subrogated to all of the rights of the 
     recipient of the payments with respect to which the loan was 
     made.

[[Page S195]]

       ``(ii) Modification of terms.--Any terms and conditions 
     applicable to a loan guarantee under this section may be 
     modified by the Director to the extent the Director 
     determines it to be consistent with the financial interest of 
     the United States.
       ``(3) Defaults.--The Director may take such action as the 
     Director deems appropriate to protect the interest of the 
     United States in the event of a default on a loan guaranteed 
     under this section, including taking possession of, holding, 
     and using real property pledged as security for such a loan 
     guarantee.
       ``(h) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     to carry out this section, such sums as may be necessary for 
     each of fiscal years 2006 through 2011.
       ``(2) Availability.--Amounts appropriated under 
     subparagraph (A) shall remain available for obligation until 
     expended.

     ``SEC. 2905. GRANTS FOR THE PURCHASE OF HEALTH INFORMATION 
                   TECHNOLOGY.

       ``(a) In General.--The Director may award competitive 
     grants to eligible entities--
       ``(1) to implement local health information infrastructures 
     to facilitate the development of interoperability across 
     health care settings; or
       ``(2) to facilitate the purchase and adoption of health 
     information technology.
       ``(b) Eligibility.--To be eligible to receive a grant under 
     subsection (a) an entity shall--
       ``(1) demonstrate financial need to the Director;
       ``(2) with respect to an entity desiring a grant--
       ``(A) under subsection (a)(1), represent an independent 
     consortium of health care stakeholders within a community 
     that--
       ``(i) includes--

       ``(I) physicians (as defined in section 1881(r)(1) of the 
     Social Security Act);
       ``(II) hospitals; and
       ``(III) group health plans or other health insurance 
     issuers (as such terms are defined in section 2791); and

       ``(ii) may include any other health care providers; or
       ``(B) under subsection (a)(2) be a health care provider 
     that provides health care services to low-income and 
     underserved populations;
       ``(3) adopt the national health information technology 
     standards developed under section 2903;
       ``(4) provide assurances that the entity shall submit to 
     the Director regular reports on the activities carried out 
     under the loan guarantee, including--
       ``(A) a description of the financial costs and benefits of 
     the project involved and of the entities to which such costs 
     and benefits accrue;
       ``(B) a description of the impact of the project on health 
     care quality and safety; and
       ``(C) a description of any reduction in duplicative or 
     unnecessary care as a result of the project involved;
       ``(5) provide assurances that not later than 30 days after 
     the development of the standard quality measures pursuant to 
     section 2906, the entity shall submit to the Director regular 
     reports on such measures, including provider level data and 
     analysis of the impact of information technology on such 
     measures;
       ``(6) prepare and submit to the Director an application at 
     such time, in such manner, and containing such information as 
     the Director may require; and
       ``(7) agree to provide matching funds in accordance with 
     subsection (g).
       ``(c) Use of Funds.--Amounts received under a grant under 
     subsection (a) shall be used to--
       ``(1) with respect to a grant described in subsection 
     (a)(1)--
       ``(A) to develop a plan for the implementation of a local 
     health information infrastructure under this section;
       ``(B) to establish systems for the sharing of data in 
     accordance with the national health information technology 
     standards developed under section 2903;
       ``(C) to implement, enhance, or upgrade a comprehensive, 
     electronic health information technology system; and
       ``(D) to maintain adequate security and privacy protocols;
       ``(2) with respect to a grant described in subsection 
     (a)(2)--
       ``(A) to develop a plan for the purchase and installation 
     of health information technology;
       ``(B) to purchase directly related integrated hardware and 
     software to establish an interoperable health information 
     technology system that is capable of linking to a national or 
     local health care information infrastructure; and
       ``(C) to train staff, maintain health information 
     technology systems, and maintain adequate security and 
     privacy protocols;
       ``(3) maintain adequate security and privacy protocols; and
       ``(4) carry out any other activities determined appropriate 
     by the Director.
       ``(d) Special Considerations for Certain Entities.--In 
     awarding grants under this section, the Director shall give 
     special consideration to eligible entities that--
       ``(1) provide service to low-income and underserved 
     populations; and
       ``(2) agree to electronically submit the information 
     described in paragraphs (4) and (5) of subsection (b).
       ``(e) Special Considerations for Local Health Information 
     Infrastructures.--In awarding grants under this section to 
     local health information infrastructures, the Director shall 
     give special consideration to eligible entities that--
       ``(1) include at least 50 percent of the patients living in 
     the designated coverage area;
       ``(2) incorporate public health surveillance and reporting 
     into the overall architecture of the proposed infrastructure; 
     and
       ``(3) link local health information infrastructures;
       ``(f) Areas of Specific Interest.--In awarding grants under 
     this section, the Director shall include--
       ``(1) entities with a coverage area that includes an entire 
     State; and
       ``(2) entities with a multi-state coverage area.
       ``(g) Matching Requirement.--
       ``(1) In general.--The Director may not make a grant under 
     this section to an entity unless the entity agrees that, with 
     respect to the costs to be incurred by the entity in carrying 
     out the infrastructure program for which the grant was 
     awarded, the entity will make available (directly or through 
     donations from public or private entities) non-Federal 
     contributions toward such costs in an amount equal to not 
     less than 20 percent of such costs ($1 for each $5 of Federal 
     funds provided under the grant).
       ``(2) Determination of amount contributed.--Non-Federal 
     contributions required under paragraph (1) may be in cash or 
     in kind, fairly evaluated, including equipment, technology, 
     or services. Amounts provided by the Federal Government, or 
     services assisted or subsidized to any significant extent by 
     the Federal Government, may not be included in determining 
     the amount of such non-Federal contributions.
       ``(h) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     to carry out this section, such sums as may be necessary for 
     each of fiscal years 2006 through 2011.
       ``(2) Availability.--Amounts appropriated under paragraph 
     (1) shall remain available for obligation until expended.''.

     SEC. 202. STANDARDIZED MEASURES OF QUALITY HEALTH CARE AND 
                   DATA COLLECTION.

       Title XXIX of the Public Health Service Act, as added by 
     section 201, is amended by adding at the end the following:

     ``SEC. 2906. STANDARDIZED MEASURES OF QUALITY HEALTH CARE.

       ``(a) In General.--
       ``(1) Collaboration.--The Secretary of Health and Human 
     Services, the Secretary of Defense, and the Secretary of 
     Veterans Affairs (referred to in this section as the 
     `Secretaries'), in consultation with the Quality Interagency 
     Coordination Taskforce (as established by Executive Order on 
     March 13, 1998), the Institute of Medicine, the Joint 
     Commission on Accreditation of Healthcare Organizations, the 
     National Committee for Quality Assurance, the American Health 
     Quality Association, the National Quality Forum, the Medicare 
     Payment Advisory Committee, and other individuals and 
     organizations determined appropriate by the Secretaries, 
     shall establish uniform health care quality measures to 
     assess the effectiveness, timeliness, patient-centeredness, 
     efficiency, equity, and safety of care delivered across all 
     federally supported health delivery programs.
       ``(2) Development of measures.--Not later than 18 months 
     after the date of enactment of this title, the Secretaries 
     shall develop standardized sets of quality measures for each 
     of the 20 priority areas for improvement in health care 
     quality as identified by the Institute of Medicine in their 
     report entitled `Priority Areas for National Action' in 2003, 
     or other such areas as identified by the Secretaries in order 
     to assist beneficiaries in making informed choices about 
     health plans or care delivery systems. The selection of 
     appropriate quality indicators under this subsection shall 
     include the evaluation criteria formulated by clinical 
     professionals, consumers, and data collection experts.
       ``(3) Pilot testing.--Each federally supported health 
     delivery program may conduct a pilot test of the quality 
     measures developed under paragraph (2) that shall include a 
     collection of patient-level data and a public release of 
     comparative performance reports.
       ``(b) Public Reporting Requirements.--The Secretaries, 
     working collaboratively, shall establish public reporting 
     requirements for clinicians, institutional providers, and 
     health plans in each of the federally supported health 
     delivery program described in subsection (a). Such 
     requirements shall provide that the entities described in the 
     preceding sentence shall report to the appropriate Secretary 
     on the measures developed under subsection (a).
       ``(c) Full Implementation.--The Secretaries, working 
     collaboratively, shall implement all sets of quality measures 
     and reporting systems developed under subsections (a) and (b) 
     by not later than the date that is 1 year after the date on 
     which the measures are developed under subsection (a)(2).
       ``(d) Reports.--Not later than 1 year after the date of 
     enactment of this title, and annually thereafter, the 
     Secretary shall--
       ``(1) submit to Congress a report that details the 
     collaborative efforts carried out under subsection (a), the 
     progress made on standardizing quality indicators throughout 
     the Federal Government, and the state of quality measurement 
     for priority areas that links data to the report submitted 
     under paragraph (2) for the year involved; and

[[Page S196]]

       ``(2) submit to Congress a report that details areas of 
     clinical care requiring further research necessary to 
     establish effective clinical treatments that will serve as a 
     basis for additional quality indicators.
       ``(e) Comparative Quality Reports.--Beginning not later 
     than 3 years after the date of enactment of this title, in 
     order to make comparative quality information available to 
     health care consumers, including members of health disparity 
     populations, health professionals, public health officials, 
     researchers, and other appropriate individuals and entities, 
     the Secretaries shall provide for the pooling, analysis, and 
     dissemination of quality measures collected under this 
     section. Nothing in this section shall be construed as 
     modifying the privacy standards under the Health Insurance 
     Portability and Accountability Act of 1996 (Public Law 104-
     191).
       ``(f) Ongoing Evaluation of Use.--The Secretary of Health 
     and Human Services shall ensure the ongoing evaluation of the 
     use of the health care quality measures established under 
     this section.
       ``(g) Evaluation and Regulations.--
       ``(1) Evaluation.--
       ``(A) In general.--The Secretary shall, directly or 
     indirectly through a contract with another entity, conduct an 
     evaluation of the collaborative efforts of the Secretaries to 
     establish uniform health care quality measures and reporting 
     requirements for federally supported health care delivery 
     programs as required under this section.
       ``(B) Report.--Not later than 1 year after the date of 
     enactment of this title, the Secretary of Health and Human 
     Services shall submit a report to the appropriate committees 
     of Congress concerning the results of the evaluation under 
     subparagraph (A).
       ``(2) Regulations.--
       ``(A) Proposed.--Not later than 6 months after the date on 
     which the report is submitted under paragraph (1)(B), the 
     Secretary shall publish proposed regulations regarding the 
     application of the uniform health care quality measures and 
     reporting requirements described in this section to federally 
     supported health delivery programs.
       ``(B) Final regulations.--Not later than 1 year after the 
     date on which the report is submitted under paragraph (1)(B), 
     the Secretary shall publish final regulations regarding the 
     uniform health care quality measures and reporting 
     requirements described in this section.
       ``(h) Definitions.--In this section, the term `federally 
     supported health delivery program' means a program that is 
     funded by the Federal Government under which health care 
     items or services are delivered directly to patients.''.

TITLE III--MAKING HEALTH CARE MORE AFFORDABLE FOR CHILDREN AND PREGNANT 
                                 WOMEN

                   Subtitle A--Covering all Children

     SEC. 300. FINDINGS.

       Congress makes the following findings:
       (1) Need for universal coverage.--
       (A) Currently, there are 9,000,000 children under the age 
     of 19 that are uninsured. One out of every 8 children are 
     uninsured while 1 in 5 Hispanic children and 1 in 7 African 
     American children are uninsured. Three-quarters, 
     approximately 6,800,000, of these children are eligible but 
     not enrolled in the medicaid program or the State children's 
     health insurance program (SCHIP). Long-range studies found 
     that 1 in 3 children went without health insurance for all or 
     part of 2002 and 2003.
       (B) Low-income children are 3 times as likely as children 
     in higher income families to be uninsured. It is estimated 
     that 65 percent of uninsured children have at least 1 parent 
     working full time over the course of the year.
       (C) It is estimated that 50 percent of all legal immigrant 
     children in families with income that is less than 200 
     percent of the Federal poverty line are uninsured. In States 
     without programs to cover immigrant children, 57 percent of 
     non-citizen children are uninsured.
       (D) Children in the Southern and Western parts of the 
     United States were nearly 1.7 times more likely to be 
     uninsured than children in the Northeast. In the Northeast, 
     9.4 percent of children are uninsured while in the Midwest, 
     8.3 percent are uninsured. The South's rate of uninsured 
     children is 14.3 percent while the West has an uninsured rate 
     of 13 percent.
       (E) Children's health care needs are neglected in the 
     United States. One-quarter of young children in the United 
     States are not fully up to date on their basic immunizations. 
     One-third of children with chronic asthma do not get a 
     prescription for the necessary medications to manage the 
     disease.
       (F) According to the Centers for Disease Control and 
     Prevention, nearly \1/2\ of all uninsured children have not 
     had a well-child visit in the past year. One out of every 5 
     children has problems accessing needed care, and 1 out of 
     every 4 children do not receive annual dental exams. One in 6 
     uninsured children had a delayed or unmet medical need in the 
     past year. Minority children are less likely to receive 
     proven treatments such as prescription medications to treat 
     chronic disease.
       (G) There are 7,600,000 young adults between the ages of 19 
     and 20. In the United States, approximately 28 percent, or 
     2,100,000 individuals, of this group are uninsured.
       (H) Chronic illness and disability among children are on 
     the rise. Children most at risk for chronic illness and 
     disability are children who are most likely to be poor and 
     uninsured.
       (2) Role of the medicaid and state children's health 
     insurance programs.--
       (A) The medicaid program and SCHIP serve as a crucial 
     health safety net for 30,000,000 children. During the recent 
     economic downturn and the highest number of uninsured 
     individuals ever recorded in the United States, the medicaid 
     program and SCHIP offset losses in employer-sponsored 
     coverage. While the number of children living in low-income 
     families increased by 2,000,000 between 2000 and 2003, the 
     number of uninsured children fell due to the medicaid program 
     and SCHIP.
       (B) In 2003, 25,000,000 children were enrolled in the 
     medicaid program, accounting for \1/2\ of all enrollees and 
     only 19 percent of total program costs.
       (C) The medicaid program and SCHIP do more than just fill 
     in the gaps. Gains in public coverage have reduced the 
     percentage of low-income uninsured by a \1/3\ from 1997 to 
     2003. In addition, a recent study found that publicly-insured 
     children are more likely to obtain medical care, preventive 
     care and dental care than similar low-income privately -
     insured children.
       (D) Publicly funded programs such as the medicaid program 
     and SCHIP actually improve children's health. Children who 
     are currently insured by public programs are in better health 
     than they were a year ago. Expansion of coverage for children 
     and pregnant women under the medicaid program and SCHIP 
     reduces rates of avoidable hospitalizations by 22 percent.
       (E) Studies have found that children enrolled in public 
     insurance programs experienced a 68 percent improvement in 
     measures of school performance.
       (F) Despite the success of expansions in general under the 
     medicaid program and SCHIP, due to current budget 
     constraints, many States have stopped doing aggressive 
     outreach and have raised premiums and cost-sharing 
     requirements on families under these programs. In addition, 8 
     States stopped enrollment in SCHIP for a period of time 
     between April 2003 and July 2004. As a result, SCHIP 
     enrollment fell by 200,000 children for the first time in the 
     program's history.
       (G) It is estimated that nearly 50 percent of children 
     covered through SCHIP do not remain in the program due to 
     reenrollment barriers. A recent study found that between 10 
     and 40 percent of these children are ``lost'' in the system. 
     Difficult renewal policies and reenrollment barriers make 
     seamless coverage in SCHIP unattainable. Studies indicate 
     that as many as 67 percent of children who were eligible but 
     not enrolled for SCHIP had applied for coverage but were 
     denied due to procedural issues.
       (H) While the medicaid program and SCHIP expansions to date 
     have done much to offset what otherwise would have been a 
     significant loss of coverage among children because of 
     declining access to employer coverage, the shortcomings of 
     previous expansions, such as the failure to enroll all 
     eligible children and caps on enrollment in SCHIP because of 
     under-funding, also are clear.

   CHAPTER 1--EXPANDED COVERAGE OF CHILDREN UNDER MEDICAID AND SCHIP

     SEC. 301. STATE OPTION TO RECEIVE 100 PERCENT FMAP FOR 
                   MEDICAL ASSISTANCE FOR CHILDREN IN POVERTY IN 
                   EXCHANGE FOR EXPANDED COVERAGE OF CHILDREN IN 
                   WORKING POOR FAMILIES UNDER TITLE XXI.

       (a) State Option.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended by redesignating section 1936 
     as section 1937, and by inserting after section 1935 the 
     following:


 ``STATE OPTION FOR INCREASED FMAP FOR MEDICAL ASSISTANCE FOR CHILDREN 
  IN POVERTY IN EXCHANGE FOR EXPANDED COVERAGE OF CHILDREN IN WORKING 
                     POOR FAMILIES UNDER TITLE XXI

       ``Sec. 1936. (a) 100 Percent FMAP.--
       ``(1) In general.--Notwithstanding any other provision of 
     this title, in the case of a State that, through an amendment 
     to each of its State plans under this title and title XXI (or 
     to a waiver of either such plan), agrees to satisfy the 
     conditions described in subsections (b), (c), and (d) the 
     Federal medical assistance percentage shall be 100 percent 
     with respect to the total amount expended by the State for 
     providing medical assistance under this title for each fiscal 
     year quarter beginning on or after the date described in 
     subsection (e) for children whose family income does not 
     exceed 100 percent of the poverty line.
       ``(2) Limitation on scope of application of increase.--The 
     increase in the Federal medical assistance percentage for a 
     State under this section shall apply only with respect to the 
     total amount expended for providing medical assistance under 
     this title for a fiscal year quarter for children described 
     in paragraph (1) and shall not apply with respect to--
       ``(A) any other payments made under this title, including 
     disproportionate share hospital payments described in section 
     1923;
       ``(B) payments under title IV or XXI; or
       ``(C) any payments made under this title or title XXI that 
     are based on the enhanced FMAP described in section 2105(b).
       ``(b) Eligibility Expansions.--The condition described in 
     this subsection is that the State agrees to do the following:
       ``(1) Coverage under medicaid or schip for children in 
     families whose income does not exceed 300 percent of the 
     poverty line.--
       ``(A) In general.--The State agrees to provide medical 
     assistance under this title or

[[Page S197]]

     child health assistance under title XXI to children whose 
     family income exceeds the medicaid applicable income level 
     (as defined in section 2110(b)(4) but by substituting 
     `January 1, 2005' for `March 31, 1997'), but does not exceed 
     300 percent of the poverty line.
       ``(B) State option to expand coverage through subsidized 
     purchase of family coverage.--A State may elect to carry out 
     subparagraph (A) through the provision of assistance for the 
     purchase of dependent coverage under a group health plan or 
     health insurance coverage if--
       ``(i) the dependent coverage is consistent with the benefit 
     standards under this title or title XXI, as approved by the 
     Secretary; and
       ``(ii) the State provides `wrap-around' coverage under this 
     title or title XXI.
       ``(C) Deemed satisfaction for certain states.--A State 
     that, as of January 1, 2005, provides medical assistance 
     under this title or child health assistance under title XXI 
     to children whose family income is 300 percent of the poverty 
     line shall be deemed to satisfy this paragraph.
       ``(2) Coverage for children under age 21.--The State agrees 
     to define a child for purposes of this title and title XXI as 
     an individual who has not attained 21 years of age.
       ``(3) Opportunity for higher income children to purchase 
     schip coverage.--The State agrees to permit any child whose 
     family income exceeds 300 percent of the poverty line to 
     purchase full or `wrap-around' coverage under title XXI at 
     the full cost of providing such coverage, as determined by 
     the State.
       ``(4) Coverage for legal immigrant children.--The State 
     agrees to--
       ``(A) provide medical assistance under this title and child 
     health assistance under title XXI for alien children who are 
     lawfully residing in the United States (including battered 
     aliens described in section 431(c) of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996) and who are otherwise eligible for such assistance in 
     accordance with section 1903(v)(4) and 2107(e)(1)(E); and
       ``(B) not establish or enforce barriers that deter 
     applications by such aliens, including through the 
     application of the removal of the barriers described in 
     subsection (c).
       ``(c) Removal of Enrollment and Access Barriers.--The 
     condition described in this subsection is that the State 
     agrees to do the following:
       ``(1) Presumptive eligibility for children.--The State 
     agrees to--
       ``(A) provide presumptive eligibility for children under 
     this title and title XXI in accordance with section 1920A;
       ``(B) treat any items or services that are provided to an 
     uncovered child (as defined in section 2110(c)(8)) who is 
     determined ineligible for medical assistance under this title 
     as child health assistance for purposes of paying a provider 
     of such items or services, so long as such items or services 
     would be considered child health assistance for a targeted 
     low-income child under title XXI.
       ``(2) Adoption of 12-month continuous enrollment.--The 
     State agrees to provide that eligibility for assistance under 
     this title and title XXI shall not be regularly redetermined 
     more often than once every year for children.
       ``(3) Acceptance of self-declaration of income.--The State 
     agrees to permit the family of a child applying for medical 
     assistance under this title or child health assistance under 
     title XXI to declare and certify by signature under penalty 
     of perjury family income for purposes of collecting financial 
     eligibility information.
       ``(4) Adoption of acceptance of eligibility determinations 
     for other assistance programs.--The State agrees to accept 
     determinations (made within a reasonable period, as found by 
     the State, before its use for this purpose) of an 
     individual's family or household income made by a Federal or 
     State agency (or a public or private entity making such 
     determination on behalf of such agency), including the 
     agencies administering the Food Stamp Act of 1977, the 
     Richard B. Russell National School Lunch Act, and the Child 
     Nutrition Act of 1966, notwithstanding any differences in 
     budget unit, disregard, deeming, or other methodology, but 
     only if--
       ``(A) such agency has fiscal liabilities or 
     responsibilities affected or potentially affected by such 
     determinations; and
       ``(B) any information furnished by such agency pursuant to 
     this subparagraph is used solely for purposes of determining 
     eligibility for medical assistance under this title or for 
     child health assistance under title XXI.
       ``(5) No assets test.--The State agrees to not (or 
     demonstrates that it does not) apply any assets or resources 
     test for eligibility under this title or title XXI with 
     respect to children.
       ``(6) Eligibility Determinations and Redeterminations.--
       ``(A) In general.--The State agrees for purposes of initial 
     eligibility determinations and redeterminations of children 
     under this title and title XXI not to require a face-to-face 
     interview and to permit applications and renewals by mail, 
     telephone, and the Internet.
       ``(B) Nonduplication of information.--
       ``(i) In general.--For purposes of redeterminations of 
     eligibility for currently or previously enrolled children 
     under this title and title XXI, the State agrees to use all 
     information in its possession (including information 
     available to the State under other Federal or State programs) 
     to determine eligibility or redetermine continued eligibility 
     before seeking similar information from parents.
       ``(ii) Rule of construction.--Nothing in clause (i) shall 
     be construed as limiting any obligation of a State to provide 
     notice and a fair hearing before denying, terminating, or 
     reducing a child's coverage based on such information in the 
     possession of the State.
       ``(7) No waiting list for children under schip.--The State 
     agrees to not impose any numerical limitation, waiting list, 
     waiting period, or similar limitation on the eligibility of 
     children for child health assistance under title XXI or to 
     establish or enforce other barriers to the enrollment of 
     eligible children based on the date of their application for 
     coverage.
       ``(8) Adequate provider payment rates.--The State agrees 
     to--
       ``(A) establish payment rates for children's health care 
     providers under this title that are no less than the average 
     of payment rates for similar services for such providers 
     provided under the benchmark benefit packages described in 
     section 2103(b);
       ``(B) establish such rates in amounts that are sufficient 
     to ensure that children enrolled under this title or title 
     XXI have adequate access to comprehensive care, in accordance 
     with the requirements of section 1902(a)(30)(A); and
       ``(C) include provisions in its contracts with providers 
     under this title guaranteeing compliance with these 
     requirements.
       ``(d) Maintenance of Medicaid Eligibility Levels for 
     Children.--
       ``(1) In general.--The condition described in this 
     subsection is that the State agrees to maintain eligibility 
     income, resources, and methodologies applied under this title 
     (including under a waiver of such title or under section 
     1115) with respect to children that are no more restrictive 
     than the eligibility income, resources, and methodologies 
     applied with respect to children under this title (including 
     under such a waiver) as of January 1, 2005.
       ``(2) Rule of construction.--Nothing in this section shall 
     be construed as implying that a State does not have to comply 
     with the minimum income levels required for children under 
     section 1902(l)(2).
       ``(e) Date Described.--The date described in this 
     subsection is the date on which, with respect to a State, a 
     plan amendment that satisfies the requirements of subsections 
     (b), (c), and (d) is approved by the Secretary.
       ``(f) Definition of Poverty Line.--In this section, the 
     term `poverty line' has the meaning given that term in 
     section 2110(c)(5).''.
       (b) Conforming Amendments.--
       (1) The third sentence of section 1905(b) of the Social 
     Security Act (42 U.S.C. 1396d(b)) is amended by inserting 
     before the period the following: ``, and with respect to 
     amounts expended for medical assistance for children on or 
     after the date described in subsection (d) of section 1936, 
     in the case of a State that has, in accordance with such 
     section, an approved plan amendment under this title and 
     title XXI''.
       (2) Section 1903(f)(4) of the Social Security Act (42 
     U.S.C. 1396b(f)(4)) is amended--
       (A) in subparagraph (C), by adding ``or'' after ``section 
     1611(b)(1),''; and
       (B) by inserting after subparagraph (C), the following:
       ``(D) who would not receive such medical assistance but for 
     State electing the option under section 1936 and satisfying 
     the conditions described in subsections (b), (c), and (d) of 
     such section,''.

     SEC. 302. ELIMINATION OF CAP ON SCHIP FUNDING FOR STATES THAT 
                   EXPAND ELIGIBILITY FOR CHILDREN.

       (a) In General.--Section 2105 of the Social Security Act 
     (42 U.S.C. 1397dd) is amended by adding at the end the 
     following:
       ``(h) Guaranteed Funding for Child Health Assistance for 
     Coverage Expansion States.--
       ``(1) In general.--Only in the case of a State that has, in 
     accordance with section 1936, an approved plan amendment 
     under this title and title XIX, any payment cap that would 
     otherwise apply to the State under this title as a result of 
     having expended all allotments available for expenditure by 
     the State with respect to a fiscal year shall not apply with 
     respect to amounts expended by the State on or after the date 
     described in section 1936(d).
       ``(2) Appropriation.--There is appropriated, out of any 
     money in the Treasury not otherwise appropriated, such sums 
     as may be necessary for the purpose of paying a State 
     described in paragraph (1) for each quarter beginning on or 
     after the date described in section 1936(d), an amount equal 
     to the enhanced FMAP of expenditures described in paragraph 
     (1) and incurred during such quarter.''.
       (b) Conforming Amendments.--Section 2104 of the Social 
     Security Act (42 U.S.C. 1397dd) is amended--
       (1) in subsection (a), by inserting ``subject to section 
     2105(h),'' after ``under this section,'';
       (2) in subsection (b)(1), by inserting ``and section 
     2105(h)'' after ``Subject to paragraph (4)''; and
       (3) in subsection (c)(1), by inserting ``subject to section 
     2105(h),'' after ``for a fiscal year,''.

   CHAPTER 2--STATE OPTIONS FOR INCREMENTAL CHILD COVERAGE EXPANSIONS

     SEC. 311. STATE OPTION TO ENROLL LOW-INCOME CHILDREN OF STATE 
                   EMPLOYEES IN SCHIP.

       Section 2110(b)(2) of the Social Security Act (42 U.S.C. 
     1397jj(b)(2)) is amended--

[[Page S198]]

       (1) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively and realigning the left margins of 
     such clauses appropriately;
       (2) by striking ``Such term'' and inserting the following:
       ``(A) In general.--Such term''; and
       (3) by adding at the end the following:
       ``(B) State option to enroll low-income children of state 
     employees.--At the option of a State, subparagraph (A)(ii) 
     shall not apply to any low-income child who would otherwise 
     be eligible for child health assistance under this title but 
     for such subparagraph.''.

     SEC. 312. STATE OPTION FOR PASSIVE RENEWAL OF ELIGIBILITY FOR 
                   CHILDREN UNDER MEDICAID AND SCHIP.

       (a) In General.--Section 1902(l) of the Social Security Act 
     (42 U.S.C. 1396a(l)) is amended by adding at the end the 
     following:
       ``(5) Notwithstanding any other provision of this title, a 
     State may provide that an individual who has not attained 21 
     years of age who has been determined eligible for medical 
     assistance under this title shall remain eligible for medical 
     assistance until such time as the State has information 
     demonstrating that the individual is no longer so 
     eligible.''.
       (b) Application under Title XXI.--Section 2107(e)(1) of the 
     Social Security Act (42 U.S.C. 1397gg(e)) is amended--
       (1) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively; and
       (2) by inserting after subparagraph (A), the following:
       ``(B) Section 1902(l)(5) (relating to passive renewal of 
     eligibility for children).''.

  CHAPTER 3--TAX INCENTIVES FOR HEALTH INSURANCE COVERAGE OF CHILDREN

     SEC. 321. REFUNDABLE CREDIT FOR HEALTH INSURANCE COVERAGE OF 
                   CHILDREN.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     refundable credits) is amended by redesignating section 36 as 
     section 37 and by inserting after section 35 the following 
     new section:

     ``SEC. 36. HEALTH INSURANCE COVERAGE OF CHILDREN.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     subtitle an amount equal to so much of the amount paid during 
     the taxable year, not compensated for by insurance or 
     otherwise, for qualified health insurance for each dependent 
     child of the taxpayer, as exceeds 5 percent of the adjusted 
     gross income of such taxpayer for such taxable year.
       ``(b) Dependent child.--For purposes of this section, the 
     term `dependent child' means any child (as defined in section 
     152(f)(1)) who has not attained the age of 19 as of the close 
     of the calendar year in which the taxable year of the 
     taxpayer begins and with respect to whom a deduction under 
     section 151 is allowable to the taxpayer.
       ``(c) Qualified Health Insurance.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified health insurance' 
     means insurance, either employer-provided or made available 
     under title XIX or XXI of the Social Security Act, which 
     constitutes medical care as defined in section 213(d) without 
     regard to--
       ``(A) paragraph (1)(C) thereof, and
       ``(B) so much of paragraph (1)(D) thereof as relates to 
     qualified long-term care insurance contracts.
       ``(2) Exclusion of certain other contracts.--Such term 
     shall not include insurance if a substantial portion of its 
     benefits are excepted benefits (as defined in section 
     9832(c)).
       ``(d) Medical Savings Account and Health Savings Account 
     Contributions.--
       ``(1) In general.--If a deduction would (but for paragraph 
     (2)) be allowed under section 220 or 223 to the taxpayer for 
     a payment for the taxable year to the medical savings account 
     or health savings account of an individual, subsection (a) 
     shall be applied by treating such payment as a payment for 
     qualified health insurance for such individual.
       ``(2) Denial of double benefit.--No deduction shall be 
     allowed under section 220 or 223 for that portion of the 
     payments otherwise allowable as a deduction under section 220 
     or 223 for the taxable year which is equal to the amount of 
     credit allowed for such taxable year by reason of this 
     subsection.
       ``(e) Special Rules.--
       ``(1) Determination of insurance costs.--The Secretary 
     shall provide rules for the allocation of the cost of any 
     qualified health insurance for family coverage to the 
     coverage of any dependent child under such insurance.
       ``(2) Coordination with deduction for health insurance 
     costs of self-employed individuals.--In the case of a 
     taxpayer who is eligible to deduct any amount under section 
     162(l) for the taxable year, this section shall apply only if 
     the taxpayer elects not to claim any amount as a deduction 
     under such section for such year.
       ``(3) Coordination with medical expense and high deductible 
     health plan deductions.--The amount which would (but for this 
     paragraph) be taken into account by the taxpayer under 
     section 213 or 224 for the taxable year shall be reduced by 
     the credit (if any) allowed by this section to the taxpayer 
     for such year.
       ``(4) Denial of credit to dependents.--No credit shall be 
     allowed under this section to any individual with respect to 
     whom a deduction under section 151 is allowable to another 
     taxpayer for a taxable year beginning in the calendar year in 
     which such individual's taxable year begins.
       ``(5) Denial of double benefit.--No credit shall be allowed 
     under subsection (a) if the credit under section 35 is 
     allowed and no credit shall be allowed under 35 if a credit 
     is allowed under this section.
       ``(6) Election not to claim credit.--This section shall not 
     apply to a taxpayer for any taxable year if such taxpayer 
     elects to have this section not apply for such taxable 
     year.''.
       (b) Information Reporting.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61 of the Internal Revenue Code of 1986 (relating to 
     information concerning transactions with other persons) is 
     amended by inserting after section 6050T the following new 
     section:

     ``SEC. 6050U. RETURNS RELATING TO PAYMENTS FOR QUALIFIED 
                   HEALTH INSURANCE.

       ``(a) In General.--Any governmental unit or any person who, 
     in connection with a trade or business conducted by such 
     person, receives payments during any calendar year from any 
     individual for coverage of a dependent child (as defined in 
     section 36(b)) of such individual under creditable health 
     insurance, shall make the return described in subsection (b) 
     (at such time as the Secretary may by regulations prescribe) 
     with respect to each individual from whom such payments were 
     received.
       ``(b) Form and Manner of Returns.--A return is described in 
     this subsection if such return--
       ``(1) is in such form as the Secretary may prescribe, and
       ``(2) contains--
       ``(A) the name, address, and TIN of the individual from 
     whom payments described in subsection (a) were received,
       ``(B) the name, address, and TIN of each dependent child 
     (as so defined) who was provided by such person with coverage 
     under creditable health insurance by reason of such payments 
     and the period of such coverage, and
       ``(C) such other information as the Secretary may 
     reasonably prescribe.
       ``(c) Creditable Health Insurance.--For purposes of this 
     section, the term `creditable health insurance' means 
     qualified health insurance (as defined in section 36(c)).
       ``(d) Statements To Be Furnished to Individuals With 
     Respect to Whom Information Is Required.--Every person 
     required to make a return under subsection (a) shall furnish 
     to each individual whose name is required under subsection 
     (b)(2)(A) to be set forth in such return a written statement 
     showing--
       ``(1) the name and address of the person required to make 
     such return and the phone number of the information contact 
     for such person,
       ``(2) the aggregate amount of payments described in 
     subsection (a) received by the person required to make such 
     return from the individual to whom the statement is required 
     to be furnished, and
       ``(3) the information required under subsection (b)(2)(B) 
     with respect to such payments.
     The written statement required under the preceding sentence 
     shall be furnished on or before January 31 of the year 
     following the calendar year for which the return under 
     subsection (a) is required to be made.
       ``(e) Returns Which Would Be Required To Be Made by 2 or 
     More Persons.--Except to the extent provided in regulations 
     prescribed by the Secretary, in the case of any amount 
     received by any person on behalf of another person, only the 
     person first receiving such amount shall be required to make 
     the return under subsection (a).''.
       (2) Assessable penalties.--
       (A) Subparagraph (B) of section 6724(d)(1) of such Code 
     (relating to definitions) is amended by redesignating clauses 
     (xiii) through (xviii) as clauses (xiv) through (xix), 
     respectively, and by inserting after clause (xii) the 
     following new clause:
       ``(xiii) section 6050U (relating to returns relating to 
     payments for qualified health insurance),''.
       (B) Paragraph (2) of section 6724(d) of such Code is 
     amended by striking ``or'' at the end of the next to last 
     subparagraph, by striking the period at the end of the last 
     subparagraph and inserting ``, or'', and by adding at the end 
     the following new subparagraph:
       ``(CC) section 6050U(d) (relating to returns relating to 
     payments for qualified health insurance).''.
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 of such Code is 
     amended by inserting after the item relating to section 6050T 
     the following new item:

``Sec. 6050U. Returns relating to payments for qualified health 
              insurance.''.

       (c) Conforming Amendments.--
       (1) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``, or 
     from section 36 of such Code''.
       (2) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by striking the last item and inserting the 
     following new items:


[[Page S199]]


``Sec. 36. Health insurance coverage of children.
``Sec. 37. Overpayments of tax.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

     SEC. 322. FORFEITURE OF PERSONAL EXEMPTION FOR ANY CHILD NOT 
                   COVERED BY HEALTH INSURANCE.

       (a) In General.--Section 151(d) of the Internal Revenue 
     Code of 1986 (relating to exemption amount) is amended by 
     adding at the end the following new paragraph:
       ``(5) Reduction of exemption amount for any child not 
     covered by health insurance.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the exemption amount otherwise determined under 
     this subsection for any dependent child (as defined in 
     section 36(b)) for any taxable year shall be reduced by the 
     same percentage as the percentage of such taxable year during 
     which such dependent child was not covered by qualified 
     health insurance (as defined in section 36(c)).
       ``(B) Full reduction if no proof of coverage is provided.--
     For purposes of subparagraph (A), in the case of any taxpayer 
     who fails to attach to the return of tax for any taxable year 
     a copy of the statement furnished to such taxpayer under 
     section 6050U, the percentage reduction under such 
     subparagraph shall be deemed to be 100 percent.
       ``(C) Nonapplication of paragraph to taxpayers in lowest 
     tax bracket.--This paragraph shall not apply to any taxpayer 
     whose taxable income for the taxable year does not exceed the 
     initial bracket amount determined under section 
     1(i)(1)(B).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

                        CHAPTER 4--MISCELLANEOUS

     SEC. 331. REQUIREMENT FOR GROUP MARKET HEALTH INSURERS TO 
                   OFFER DEPENDENT COVERAGE OPTION FOR WORKERS 
                   WITH CHILDREN.

       (a) ERISA.--
       (1) In general.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 714. REQUIREMENT TO OFFER OPTION TO PURCHASE DEPENDENT 
                   COVERAGE FOR CHILDREN.

       ``(a) Requirements for Coverage.--A group health plan, and 
     a health insurance issuer providing health insurance coverage 
     in connection with a group health plan, shall offer an 
     individual who is enrolled in such coverage the option to 
     purchase dependent coverage for a child of the individual.
       ``(b) No Employer Contribution Required.--An employer shall 
     not be required to contribute to the cost of purchasing 
     dependent coverage for a child by an individual who is an 
     employee of such employer.
       ``(c) Definition of Child.--In this section, the term 
     `child' means an individual who has not attained 21 years of 
     age.''.
       (2) Clerical amendment.--The table of contents in section 1 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1001) is amended by inserting after the item relating 
     to section 713 the following:

``Sec. 714. Requirement to offer option to purchase dependent coverage 
              for children.''.

       (b) Public Health Service Act.--Subpart 2 of part A of 
     title XXVII of the Public Health Service Act (42 U.S.C. 
     300gg-4 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 2707. REQUIREMENT TO OFFER OPTION TO PURCHASE 
                   DEPENDENT COVERAGE FOR CHILDREN.

       ``(a) Requirements for Coverage.--A group health plan, and 
     a health insurance issuer providing health insurance coverage 
     in connection with a group health plan, shall offer an 
     individual who is enrolled in such coverage the option to 
     purchase dependent coverage for a child of the individual.
       ``(b) No Employer Contribution Required.--An employer shall 
     not be required to contribute to the cost of purchasing 
     dependent coverage for a child by an individual who is an 
     employee of such employer.
       ``(c) Definition of Child.--In this section, the term 
     `child' means an individual who has not attained 21 years of 
     age.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to plan years beginning on or after 
     January 1, 2006.

     SEC. 332. EFFECTIVE DATE.

       Unless otherwise provided, the amendments made by this 
     subtitle shall take effect on October 1, 2005, and shall 
     apply to child health assistance and medical assistance 
     provided on or after that date without regard to whether or 
     not final regulations to carry out such amendments have been 
     promulgated by such date.

                  Subtitle B--Covering Pregnant Women

     SEC. 351. STATE OPTION TO EXPAND OR ADD COVERAGE OF PREGNANT 
                   WOMEN UNDER THE MEDICAID PROGRAM AND STATE 
                   CHILDREN'S HEALTH INSURANCE PROGRAM.

       (a) Medicaid.--
       (1) Authority to expand coverage.--Section 1902(l)(2)(A)(i) 
     of the Social Security Act (42 U.S.C. 1396a(l)(2)(A)(i)) is 
     amended by inserting ``(or such higher percentage as the 
     State may elect for purposes of expenditures for medical 
     assistance for pregnant women described in section 
     1905(u)(4)(A))'' after ``185 percent''.
       (2) Enhanced matching funds available if certain conditions 
     met.--Section 1905 of the Social Security Act (42 U.S.C. 
     1396d), as amended by section 311(b)(2), is amended--
       (A) in the fourth sentence of subsection (b), by striking 
     ``or (u)(4)'' and inserting ``, (u)(4), or (u)(5)''; and
       (B) in subsection (u)--
       (i) by redesignating paragraph (5) as paragraph (6); and
       (ii) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) For purposes of the fourth sentence of subsection (b) 
     and section 2105(a), the expenditures described in this 
     paragraph are the following:
       ``(A) Certain pregnant women.--If the conditions described 
     in subparagraph (B) are met, expenditures for medical 
     assistance for pregnant women described in subsection (n) or 
     under section 1902(l)(1)(A) in a family the income of which 
     exceeds 185 percent of the poverty line, but does not exceed 
     the income eligibility level established under title XXI for 
     a targeted low-income child.
       ``(B) Conditions.--The conditions described in this 
     subparagraph are the following:
       ``(i) The State plans under this title and title XXI do not 
     provide coverage for pregnant women described in subparagraph 
     (A) with higher family income without covering such pregnant 
     women with a lower family income.
       ``(ii) The State does not apply an effective income level 
     for pregnant women that is lower than the effective income 
     level (expressed as a percent of the poverty line and 
     considering applicable income disregards) that has been 
     specified under the State plan under subsection 
     (a)(10)(A)(i)(III) or (l)(2)(A) of section 1902, as of 
     January 1, 2005, to be eligible for medical assistance as a 
     pregnant woman.
       ``(C) Definition of poverty line.--In this subsection, the 
     term `poverty line' has the meaning given such term in 
     section 2110(c)(5).''.
       (3) Payment from title xxi allotment for medicaid expansion 
     costs; elimination of counting medicaid child presumptive 
     eligibility costs against title xxi allotment.--Section 
     2105(a)(1) of the Social Security Act (42 U.S.C. 
     1397ee(a)(1)) is amended--
       (A) in the matter preceding subparagraph (A), by striking 
     ``(or, in the case of expenditures described in subparagraph 
     (B), the Federal medical assistance percentage (as defined in 
     the first sentence of section 1905(b)))''; and
       (B) by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) for the provision of medical assistance that is 
     attributable to expenditures described in section 
     1905(u)(5)(A);''.
       (b) SCHIP.--
       (1) Coverage.--Title XXI of the Social Security Act (42 
     U.S.C. 1397aa et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 2111. OPTIONAL COVERAGE OF TARGETED LOW-INCOME 
                   PREGNANT WOMEN.

       ``(a) Optional Coverage.--Notwithstanding any other 
     provision of this title, a State may provide for coverage, 
     through an amendment to its State child health plan under 
     section 2102, of pregnancy-related assistance for targeted 
     low-income pregnant women in accordance with this section, 
     but only if--
       ``(1) the State has established an income eligibility level 
     for pregnant women under subsection (a)(10)(A)(i)(III) or 
     (l)(2)(A) of section 1902 that is at least 185 percent of the 
     income official poverty line; and
       ``(2) the State meets the conditions described in section 
     1905(u)(5)(B).
       ``(b) Definitions.--For purposes of this title:
       ``(1) Pregnancy-related assistance.--The term `pregnancy-
     related assistance' has the meaning given the term child 
     health assistance in section 2110(a) as if any reference to 
     targeted low-income children were a reference to targeted 
     low-income pregnant women, except that the assistance shall 
     be limited to services related to pregnancy (which include 
     prenatal, delivery, and postpartum services and services 
     described in section 1905(a)(4)(C)) and to other conditions 
     that may complicate pregnancy.
       ``(2) Targeted low-income pregnant woman.--The term 
     `targeted low-income pregnant woman' means a woman--
       ``(A) during pregnancy and through the end of the month in 
     which the 60-day period (beginning on the last day of her 
     pregnancy) ends;
       ``(B) whose family income exceeds the effective income 
     level (expressed as a percent of the poverty line and 
     considering applicable income disregards) that has been 
     specified under subsection (a)(10)(A)(i)(III) or (l)(2)(A) of 
     section 1902, as of January 1, 2005, to be eligible for 
     medical assistance as a pregnant woman under title XIX but 
     does not exceed the income eligibility level established 
     under the State child health plan under this title for a 
     targeted low-income child; and
       ``(C) who satisfies the requirements of paragraphs (1)(A), 
     (1)(C), (2), and (3) of section 2110(b).
       ``(c) References to Terms and Special Rules.--In the case 
     of, and with respect to, a State providing for coverage of 
     pregnancy-related assistance to targeted low-income pregnant 
     women under subsection (a), the following special rules 
     apply:
       ``(1) Any reference in this title (other than in subsection 
     (b)) to a targeted low-income

[[Page S200]]

     child is deemed to include a reference to a targeted low-
     income pregnant woman.
       ``(2) Any such reference to child health assistance with 
     respect to such women is deemed a reference to pregnancy-
     related assistance.
       ``(3) Any such reference to a child is deemed a reference 
     to a woman during pregnancy and the period described in 
     subsection (b)(2)(A).
       ``(4) In applying section 2102(b)(3)(B), any reference to 
     children found through screening to be eligible for medical 
     assistance under the State medicaid plan under title XIX is 
     deemed a reference to pregnant women.
       ``(5) There shall be no exclusion of benefits for services 
     described in subsection (b)(1) based on any preexisting 
     condition and no waiting period (including any waiting period 
     imposed to carry out section 2102(b)(3)(C)) shall apply.
       ``(6) Subsection (a) of section 2103 (relating to required 
     scope of health insurance coverage) shall not apply insofar 
     as a State limits coverage to services described in 
     subsection (b)(1) and the reference to such section in 
     section 2105(a)(1)(C) is deemed not to require, in such case, 
     compliance with the requirements of section 2103(a).
       ``(7) In applying section 2103(e)(3)(B) in the case of a 
     pregnant woman provided coverage under this section, the 
     limitation on total annual aggregate cost-sharing shall be 
     applied to such pregnant woman.
       ``(8) The reference in section 2107(e)(1)(D) to section 
     1920A (relating to presumptive eligibility for children) is 
     deemed a reference to section 1920 (relating to presumptive 
     eligibility for pregnant women).
       ``(d) Automatic Enrollment for Children Born to Women 
     Receiving Pregnancy-Related Assistance.--If a child is born 
     to a targeted low-income pregnant woman who was receiving 
     pregnancy-related assistance under this section on the date 
     of the child's birth, the child shall be deemed to have 
     applied for child health assistance under the State child 
     health plan and to have been found eligible for such 
     assistance under such plan or to have applied for medical 
     assistance under title XIX and to have been found eligible 
     for such assistance under such title, as appropriate, on the 
     date of such birth and to remain eligible for such assistance 
     until the child attains 1 year of age. During the period in 
     which a child is deemed under the preceding sentence to be 
     eligible for child health or medical assistance, the child 
     health or medical assistance eligibility identification 
     number of the mother shall also serve as the identification 
     number of the child, and all claims shall be submitted and 
     paid under such number (unless the State issues a separate 
     identification number for the child before such period 
     expires).''.
       (2) Additional allotments for providing coverage of 
     pregnant women.--
       (A) In general.--Section 2104 of the Social Security Act 
     (42 U.S.C. 1397dd) is amended by inserting after subsection 
     (c) the following new subsection:
       ``(d) Additional Allotments for Providing Coverage of 
     Pregnant Women.--
       ``(1) Appropriation; total allotment.--For the purpose of 
     providing additional allotments to States under this title, 
     there is appropriated, out of any money in the Treasury not 
     otherwise appropriated, for each of fiscal years 2006 through 
     2009, $200,000,000.
       ``(2) State and territorial allotments.--In addition to the 
     allotments provided under subsections (b) and (c), subject to 
     paragraphs (3) and (4), of the amount available for the 
     additional allotments under paragraph (1) for a fiscal year, 
     the Secretary shall allot to each State with a State child 
     health plan approved under this title--
       ``(A) in the case of such a State other than a commonwealth 
     or territory described in subparagraph (B), the same 
     proportion as the proportion of the State's allotment under 
     subsection (b) (determined without regard to subsection (f)) 
     to the total amount of the allotments under subsection (b) 
     for such States eligible for an allotment under this 
     paragraph for such fiscal year; and
       ``(B) in the case of a commonwealth or territory described 
     in subsection (c)(3), the same proportion as the proportion 
     of the commonwealth's or territory's allotment under 
     subsection (c) (determined without regard to subsection (f)) 
     to the total amount of the allotments under subsection (c) 
     for commonwealths and territories eligible for an allotment 
     under this paragraph for such fiscal year.
       ``(3) Use of additional allotment.--Additional allotments 
     provided under this subsection are not available for amounts 
     expended before October 1, 2005. Such amounts are available 
     for amounts expended on or after such date for child health 
     assistance for targeted low-income children, as well as for 
     pregnancy-related assistance for targeted low-income pregnant 
     women.
       ``(4) No payments unless election to expand coverage of 
     pregnant women.--No payments may be made to a State under 
     this title from an allotment provided under this subsection 
     unless the State provides pregnancy-related assistance for 
     targeted low-income pregnant women under this title, or 
     provides medical assistance for pregnant women under title 
     XIX, whose family income exceeds the effective income level 
     applicable under subsection (a)(10)(A)(i)(III) or (l)(2)(A) 
     of section 1902 to a family of the size involved as of 
     January 1, 2005.''.
       (B) Conforming amendments.--Section 2104 of the Social 
     Security Act (42 U.S.C. 1397dd), as amended by section 
     302(b), is amended--
       (i) in subsection (a), in the matter preceding paragraph 
     (1), by inserting ``subsection (d) and'' before ``section 
     2105(h)'';
       (ii) in subsection (b)(1), by inserting ``, subsection 
     (d),'' after ``Subject to paragraph (4)''; and
       (iii) in subsection (c)(1), by inserting ``subsection (d) 
     and'' after ``section 2105(h)''.
       (3) Additional conforming amendments.--
       (A) No cost-sharing for pregnancy-related benefits.--
     Section 2103(e)(2) of the Social Security Act (42 U.S.C. 
     1397cc(e)(2)) is amended--
       (i) in the heading, by inserting ``or pregnancy-related 
     services'' after ``preventive services''; and
       (ii) by inserting before the period at the end the 
     following: ``or for pregnancy-related services''.
       (B) No waiting period.--Section 2102(b)(1)(B) (42 U.S.C. 
     1397bb(b)(1)(B)) is amended--
       (i) in clause (i), by striking ``, and'' at the end and 
     inserting a semicolon;
       (ii) in clause (ii), by striking the period at the end and 
     inserting ``; and''; and
       (iii) by adding at the end the following new clause:
       ``(iii) may not apply a waiting period (including a waiting 
     period to carry out paragraph (3)(C)) in the case of a 
     targeted low-income pregnant woman.''.
       (c) Authority for States That Provide Medicaid or SCHIP 
     Coverage for Pregnant Women With Income Above 185 Percent of 
     the Poverty Line To Use Portion of SCHIP Funds for Medicaid 
     Expenditures.--Section 2105(g) of the Social Security Act (42 
     U.S.C. 1397ee(g)) is amended--
       (1) in the subsection heading, by inserting ``and Certain 
     Pregnancy Coverage Expansion States'' after ``Qualifying 
     States'';
       (2) by adding at the end the following:
       ``(4) Special authority for certain pregnancy coverage 
     expansion states.--
       ``(A) In general.--In the case of a State that, as of the 
     date of enactment of the Affordable Health Care Act of 2005, 
     has an income eligibility standard under title XIX or this 
     title (under section 1902(a)(10)(A) or under a statewide 
     waiver in effect under section 1115 with respect to title XIX 
     or this title) that is at least 185 percent of the poverty 
     line with respect to pregnant women, the State may elect to 
     use not more than 20 percent of any allotment under section 
     2104 for any fiscal year (insofar as it is available under 
     subsections (e) and (g) of such section) for payments under 
     title XIX in accordance with subparagraph (B), instead of for 
     expenditures under this title.
       ``(B) Payments to states.--
       ``(i) In general.--In the case of a State described in 
     subparagraph (A) that has elected the option described in 
     that subparagraph, subject to the availability of funds under 
     such subparagraph and, if applicable, paragraph (1)(A), with 
     respect to the State, the Secretary shall pay the State an 
     amount each quarter equal to the additional amount that would 
     have been paid to the State under title XIX with respect to 
     expenditures described in clause (ii) if the enhanced FMAP 
     (as determined under subsection (b)) had been substituted for 
     the Federal medical assistance percentage (as defined in 
     section 1905(b)).
       ``(ii) Expenditures described.--For purposes of this 
     subparagraph, the expenditures described in this clause are 
     expenditures, made after the date of the enactment of this 
     paragraph and during the period in which funds are available 
     to the State for use under subparagraph (A), for medical 
     assistance under title XIX for pregnant women whose family 
     income is at least 185 percent of the poverty line.
       ``(iii) No impact on determination of budget neutrality for 
     waivers.--In the case of a State described in subparagraph 
     (A) that uses amounts paid under this paragraph for 
     expenditures described in clause (ii) that are incurred under 
     a waiver approved for the State, any budget neutrality 
     determinations with respect to such waiver shall be 
     determined without regard to such amounts paid.''; and
       (3) in paragraph (3), by striking ``and (2)'' and inserting 
     ``(2), and (4)''.
       (d) Other Amendments to Medicaid.--
       (1) Eligibility of a newborn.--Section 1902(e)(4) of the 
     Social Security Act (42 U.S.C. 1396a(e)(4)) is amended in the 
     first sentence by striking ``so long as the child is a member 
     of the woman's household and the woman remains (or would 
     remain if pregnant) eligible for such assistance''.
       (2) Application of qualified entities to presumptive 
     eligibility for pregnant women under medicaid.--Section 
     1920(b) of the Social Security Act (42 U.S.C. 1396r-1(b)) is 
     amended by adding after paragraph (2) the following flush 
     sentence:
     ``The term `qualified provider' includes a qualified entity 
     as defined in section 1920A(b)(3).''.
       (e) Effective Date.--The amendments made by this section 
     apply to items and services furnished on or after October 1, 
     2005, without regard to whether regulations implementing such 
     amendments have been promulgated.

     SEC. 352. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE 
                   MEDICAID PROGRAM AND SCHIP.

       (a) Medicaid Program.--Section 1903(v) of the Social 
     Security Act (42 U.S.C. 1396b(v)) is amended--
       (1) in paragraph (1), by striking ``paragraph (2)'' and 
     inserting ``paragraphs (2) and (4)''; and

[[Page S201]]

       (2) by adding at the end the following new paragraph:
       ``(4)(A) A State may elect (in a plan amendment under this 
     title) to provide medical assistance under this title for 
     aliens who are lawfully residing in the United States 
     (including battered aliens described in section 431(c) of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996) and who are otherwise eligible for such 
     assistance, within any of the following eligibility 
     categories:
       ``(i) Pregnant women.--Women during pregnancy (and during 
     the 60-day period beginning on the last day of the 
     pregnancy).
       ``(ii) Children.--Children (as defined under such plan), 
     including optional targeted low-income children described in 
     section 1905(u)(2)(B).
       ``(B)(i) In the case of a State that has elected to provide 
     medical assistance to a category of aliens under subparagraph 
     (A), no debt shall accrue under an affidavit of support 
     against any sponsor of such an alien on the basis of 
     provision of assistance to such category and the cost of such 
     assistance shall not be considered as an unreimbursed cost.
       ``(ii) The provisions of sections 401(a), 402(b), 403, and 
     421 of the Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 shall not apply to a State that 
     makes an election under subparagraph (A).''.
       (b) Title XXI.--Section 2107(e)(1) of the Social Security 
     Act (42 U.S.C. 1397gg(e)(1)) is amended by adding at the end 
     the following new subparagraph:
       ``(E) Section 1903(v)(4) (relating to optional coverage of 
     permanent resident alien pregnant women and children), but 
     only with respect to an eligibility category under this 
     title, if the same eligibility category has been elected 
     under such section for purposes of title XIX.''.
       (c) Effective Date.--The amendments made by this section 
     take effect on October 1, 2005, and apply to medical 
     assistance and child health assistance furnished on or after 
     such date.

     SEC. 353. PROMOTING CESSATION OF TOBACCO USE UNDER THE 
                   MEDICAID PROGRAM.

       (a) Dropping Exception From Medicaid Prescription Drug 
     Coverage for Tobacco Cessation Medications.--Section 
     1927(d)(2) of the Social Security Act (42 U.S.C. 1396r-
     8(d)(2)) is amended--
       (1) by striking subparagraph (E);
       (2) by redesignating subparagraphs (F) through (J) as 
     subparagraphs (E) through (I), respectively; and
       (3) in subparagraph (F) (as redesignated by paragraph (2)), 
     by inserting before the period at the end the following: ``, 
     except agents approved by the Food and Drug Administration 
     for purposes of promoting, and when used to promote, tobacco 
     cessation''.
       (b) Requiring Coverage of Tobacco Cessation Counseling 
     Services for Pregnant Women.--Section 1905 of the Social 
     Security Act (42 U.S.C. 1396d(a)(4)) is amended--
       (1) in subsection (a)(4)--
       (A) by striking ``and'' before ``(C)''; and
       (B) by inserting before the semicolon at the end the 
     following new subparagraph: ``; and (D) counseling for 
     cessation of tobacco use (as defined in subsection (x)) for 
     pregnant women''; and
       (2) by adding at the end the following:
       ``(y)(1) For purposes of this title, the term `counseling 
     for cessation of tobacco use' means therapy and counseling 
     for cessation of tobacco use for pregnant women who use 
     tobacco products or who are being treated for tobacco use 
     that is furnished--
       ``(A) by or under the supervision of a physician; or
       ``(B) by any other health care professional who--
       ``(i) is legally authorized to furnish such services under 
     State law (or the State regulatory mechanism provided by 
     State law) of the State in which the services are furnished; 
     and
       ``(ii) is authorized to receive payment for other services 
     under this title or is designated by the Secretary for this 
     purpose.
       ``(2) Subject to paragraph (3), such term is limited to--
       ``(A) therapy and counseling services recommended in 
     `Treating Tobacco Use and Dependence: A Clinical Practice 
     Guideline', published by the Public Health Service in June 
     2000, or any subsequent modification of such Guideline; and
       ``(B) such other therapy and counseling services that the 
     Secretary recognizes to be effective.
       ``(3) Such term shall not include coverage for drugs or 
     biologicals that are not otherwise covered under this 
     title.''.
       (c) Removal of Cost-Sharing for Tobacco Cessation 
     Counseling Services for Pregnant Women.--Section 1916 of the 
     Social Security Act (42 U.S.C. 1396o) is amended in each of 
     subsections (a)(2)(B) and (b)(2)(B) by inserting ``, and 
     counseling for cessation of tobacco use (as defined in 
     section 1905(x))'' after ``complicate the pregnancy''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after the date that 
     is 1 year after the date of enactment of this Act.

     SEC. 354. PROMOTING CESSATION OF TOBACCO USE UNDER THE 
                   MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT 
                   PROGRAM.

       (a) Quality Maternal and Child Health Services Includes 
     Tobacco Cessation Counseling and Medications.--
       (1) In general.--Section 501 of the Social Security Act (42 
     U.S.C. 701) is amended by adding at the end the following new 
     subsection:
       ``(c) For purposes of this title, counseling for cessation 
     of tobacco use (as defined in section 1905(y)), drugs and 
     biologicals used to promote smoking cessation, and the 
     inclusion of antitobacco messages in health promotion 
     counseling shall be considered to be part of quality maternal 
     and child health services.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date that is 1 year after the date 
     of enactment of this Act.
       (b) Evaluation of National Core Performance Measures.--
       (1) In general.--The Administrator of the Health Resources 
     and Services Administration shall assess the current national 
     core performance measures and national core outcome measures 
     utilized under the Maternal and Child Health Block Grant 
     under title V of the Social Security Act (42 U.S.C. 701 et 
     seq.) for purposes of expanding such measures to include some 
     of the known causes of low birthweight and prematurity, 
     including the percentage of infants born to pregnant women 
     who smoked during pregnancy.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator of the Health 
     Resources and Services Administration shall submit to the 
     appropriate committees of Congress a report concerning the 
     results of the evaluation conducted under paragraph (1).

     SEC. 355. STATE OPTION TO PROVIDE FAMILY PLANNING SERVICES 
                   AND SUPPLIES TO INDIVIDUALS WITH INCOMES THAT 
                   DO NOT EXCEED A STATE'S INCOME ELIGIBILITY 
                   LEVEL FOR MEDICAL ASSISTANCE.

       (a) In General.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.), as amended by section 301(a), is 
     amended--
       (1) by redesignating section 1937 as section 1938; and
       (2) by inserting after section 1936 the following new 
     section:


    ``state option to provide family planning services and supplies

       ``Sec. 1937. (a) In General.--Subject to subsections (b) 
     and (c), a State may elect (through a State plan amendment) 
     to make medical assistance described in section 1905(a)(4)(C) 
     available to any individual whose family income does not 
     exceed the greater of--
       ``(1) 185 percent of the income official poverty 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) applicable to a family of 
     the size involved; or
       ``(2) the eligibility income level (expressed as a 
     percentage of such poverty line) that has been specified 
     under a waiver authorized by the Secretary or under section 
     1902(r)(2)), as of January 1, 2005, for an individual to be 
     eligible for medical assistance under the State plan.
       ``(b) Comparability.--Medical assistance described in 
     section 1905(a)(4)(C) that is made available under a State 
     plan amendment under subsection (a) shall--
       ``(1) not be less in amount, duration, or scope than the 
     medical assistance described in that section that is made 
     available to any other individual under the State plan; and
       ``(2) be provided in accordance with the restrictions on 
     deductions, cost sharing, or similar charges imposed under 
     section 1916(a)(2)(D).
       ``(c) Option To Extend Coverage During a Post-Eligibility 
     Period.--
       ``(1) Initial period.--A State plan amendment made under 
     subsection (a) may provide that any individual who was 
     receiving medical assistance described in section 
     1905(a)(4)(C) as a result of such amendment, and who becomes 
     ineligible for such assistance because of hours of, or income 
     from, employment, may remain eligible for such medical 
     assistance through the end of the 6-month period that begins 
     on the first day the individual becomes so ineligible.
       ``(2) Additional extension.--A State plan amendment made 
     under subsection (a) may provide that any individual who has 
     received medical assistance described in section 
     1905(a)(4)(C) during the entire 6-month period described in 
     paragraph (1) may be extended coverage for such assistance 
     for a succeeding 6-month period.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to medical assistance provided on and after October 1, 
     2005.

     SEC. 356. STATE OPTION TO EXTEND THE POSTPARTUM PERIOD FOR 
                   PROVISION OF FAMILY PLANNING SERVICES AND 
                   SUPPLIES.

       (a) In General.--Section 1902(e)(5) of the Social Security 
     Act (42 U.S.C. 1396a(e)(5)) is amended--
       (1) by striking ``eligible under the plan, as though'' and 
     inserting ``eligible under the plan--
       ``(A) as though'';
       (2) by striking the period and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(B) for medical assistance described in section 
     1905(a)(4)(C) for so long as the family income of such woman 
     does not exceed the maximum income level established by the 
     State for the woman to be eligible for medical assistance 
     under the State plan (as a result of pregnancy or 
     otherwise).''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to medical assistance provided on and after October 1, 
     2005.

[[Page S202]]

     SEC. 357. STATE OPTION TO PROVIDE WRAP-AROUND SCHIP COVERAGE 
                   TO CHILDREN WHO HAVE OTHER HEALTH COVERAGE.

       (a) In General.--
       (1) SCHIP.--
       (A) State option to provide wrap-around coverage.--Section 
     2110(b) of the Social Security Act (42 U.S.C. 1397jj(b)) is 
     amended--
       (i) in paragraph (1)(C), by inserting ``, subject to 
     paragraph (5),'' after ``under title XIX or''; and
       (ii) by adding at the end the following:
       ``(5) State option to provide wrap-around coverage.--A 
     State may waive the requirement of paragraph (1)(C) that a 
     targeted low-income child may not be covered under a group 
     health plan or under health insurance coverage, if the State 
     satisfies the conditions described in subsection (c)(8). The 
     State may waive such requirement in order to provide--
       ``(A) services for a child with special health care needs; 
     or
       ``(B) all services.

     In waiving such requirement, a State may limit the 
     application of the waiver to children whose family income 
     does not exceed a level specified by the State, so long as 
     the level so specified does not exceed the maximum income 
     level otherwise established for other children under the 
     State child health plan.''.
       (B) Conditions described.--Section 2105(c) of the Social 
     Security Act (42 U.S.C. 1397ee(c)) is amended by adding at 
     the end the following:
       ``(8) Conditions for provision of wrap-around coverage.--
     For purposes of section 2110(b)(5), the conditions described 
     in this paragraph are the following:
       ``(A) Income eligibility.--The State child health plan 
     (whether implemented under title XIX or this XXI)--
       ``(i) has the highest income eligibility standard permitted 
     under this title as of January 1, 2005;
       ``(ii) subject to subparagraph (B), does not limit the 
     acceptance of applications for children; and
       ``(iii) provides benefits to all children in the State who 
     apply for and meet eligibility standards.
       ``(B) No waiting list imposed.--With respect to children 
     whose family income is at or below 200 percent of the poverty 
     line, the State does not impose any numerical limitation, 
     waiting list, or similar limitation on the eligibility of 
     such children for child health assistance under such State 
     plan.
       ``(C) No more favorable treatment.--The State child health 
     plan may not provide more favorable coverage of dental 
     services to the children covered under section 2110(b)(5) 
     than to children otherwise covered under this title.''.
       (C) State option to waive waiting period.--Section 
     2102(b)(1)(B) of the Social Security Act (42 U.S.C. 
     1397bb(b)(1)(B)), as amended by section 2(b)(3)(B), is 
     amended--
       (i) in clause (ii), by striking ``, and'' at the end and 
     inserting a semicolon;
       (ii) in clause (iii), by striking the period at the end and 
     inserting ``; and''; and
       (iii) by adding at the end the following new clause:
       ``(iv) at State option, may not apply a waiting period in 
     the case of a child described in section 2110(b)(5), if the 
     State satisfies the requirements of section 2105(c)(8).''.
       (2) Application of enhanced match under medicaid.--Section 
     1905 of the Social Security Act (42 U.S.C. 1396d), as amended 
     by section 2(a)(2), is amended--
       (A) in subsection (b), in the fourth sentence, by striking 
     ``or (u)(4)'' and inserting ``(u)(4), or (u)(5)''; and
       (B) in subsection (u)--
       (i) by redesignating paragraph (5) as paragraph (6); and
       (ii) by inserting after paragraph (4) the following:
       ``(5) For purposes of subsection (b), the expenditures 
     described in this paragraph are expenditures for items and 
     services for children described in section 2110(b)(5), but 
     only in the case of a State that satisfies the requirements 
     of section 2105(c)(8).''.
       (3) Application of secondary payor provisions.--Section 
     2107(e)(1) of the Social Security Act (42 U.S.C. 
     1397gg(e)(1)), as amended by section 3(b), is amended by 
     adding at the end the following:
       ``(F) Section 1902(a)(25) (relating to coordination of 
     benefits and secondary payor provisions) with respect to 
     children covered under a waiver described in section 
     2110(b)(5).''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on January 1, 2005, and shall apply to 
     child health assistance and medical assistance provided on or 
     after that date.

     SEC. 358. INNOVATIVE OUTREACH PROGRAMS.

       Title XXI of the Social Security Act (42 U.S.C. 1397aa et 
     seq.), as amended by section 351(b), is amended by adding at 
     the end the following:

     ``SEC. 2112. EXPANDED OUTREACH ACTIVITIES.

       ``(a) In General.--Funds made available under subsection 
     (f) for expenditure under this section for a fiscal year 
     shall be used by the Secretary to award grants to eligible 
     entities to conduct innovative outreach and enrollment 
     efforts that are designed to increase the enrollment and 
     participation of eligible children under this title and title 
     XIX.
       ``(b) Priority for Grants in Certain Areas.--In making 
     grants under subsection (a), the Secretary shall give 
     priority to eligible entities that propose to target 
     geographic areas with high rates of--
       ``(1) eligible but unenrolled children, including such 
     children who reside in rural areas;
       ``(2) families for whom English is not their primary 
     language; or
       ``(3) racial and ethnic minorities and health disparity 
     populations
       ``(c) Application.--An eligible entity that desires to 
     receive a grant under this section shall submit an 
     application to the Secretary in such form and manner, and 
     containing such information, as the Secretary may decide. 
     Such application shall include--
       ``(1) quality and outcomes performance measures to evaluate 
     the effectiveness of activities funded by a grant under this 
     paragraph to ensure that the activities are meeting their 
     goals; and
       ``(2) an assurance that the entity will--
       ``(A) collect and report enrollment data; and
       ``(B) disseminate findings from evaluations of the 
     activities funded under the grant.
       ``(d) Report.--The Secretary shall report to Congress on an 
     annual basis the results of the outreach efforts under grants 
     awarded under this section.
       ``(e) Definition of Eligible Entity.--In this section, the 
     term `eligible entity' means any of the following:
       ``(1) A State.
       ``(2) A national, local, or community-based public or 
     nonprofit private organization.
       ``(f) Appropriation.--For the purpose of awarding grants to 
     eligible entities under this section, there is appropriated, 
     out of any money in the Treasury not otherwise appropriated, 
     $50,000,000 for each of fiscal years 2006 and 2007.''.

            Subtitle C--Affirming the Importance of Medicaid

     SEC. 361. SENSE OF THE SENATE.

       (a) Findings.--The Senate makes the following findings:
       (1) The Medicaid program under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) provides essential 
     health care and long-term care coverage to more than 
     50,000,000 low-income children, pregnant women and families, 
     individuals with disabilities, and senior citizens. It is a 
     Federal guarantee that even the most vulnerable will have 
     access to needed medical services.
       (2) Medicaid provides health insurance for more than \1/4\ 
     of America's children and is the largest purchaser of 
     maternity care, paying for more than \1/3\ of all the births 
     in the United States each year.
       (3) Medicaid provides critical help for the elderly and 
     individuals living with disabilities. Medicaid is America's 
     single largest purchaser of nursing home services and other 
     long-term care, covering the majority of nursing home 
     residents.
       (4) Medicaid pays for personal care and other supportive 
     services, which are typically not provided by private health 
     insurance, even if individuals could obtain it. These 
     services are necessary to enable individuals with spinal cord 
     injuries, developmental disabilities, neurological 
     degenerative diseases, serious and persistent mental 
     illnesses, HIV/AIDS, and other chronic conditions to remain 
     in the community, to work, and to maintain independence.
       (5) Medicaid is an essential supplement to the Medicare 
     program under title XVIII of the Social Security Act (42 
     U.S.C. 1395 et seq.) for more than 6,000,000 Medicare 
     beneficiaries who are low-income elderly or disabled, 
     assisting them with their Medicare premiums and co-insurance, 
     wrap-around benefits, and, in most States, the costs of 
     nursing home care that Medicare does not cover.
       (6) About 42 percent of all Medicaid spending is for those 
     who are elderly or are living with disabilities and are 
     dually eligible for Medicare and Medicaid.
       (7) Medicaid faces an ever growing burden as a result of 
     Medicare's gaps. The Medicaid program spent nearly 
     $40,000,000,000 on uncovered Medicare services in 2002. 
     Medicaid payments for low-income Medicare beneficiary cost-
     sharing are the largest and fastest growing share of Medicaid 
     spending.
       (8) The Medicare drug benefit imposes additional costs on 
     States, which will add to the already significant long-term 
     care cost burden. Medicaid spending on Medicare 
     beneficiaries' long-term care costs is expected to double 
     from $25,000,000,000 in 2002 to $51,000,000,000 in 2012.
       (9) Medicaid helps ensure access to care for all Americans. 
     Medicaid is the single largest source of revenue for the 
     Nation's safety net hospitals and health centers and is 
     critical to the ability of those providers to serve Medicaid 
     enrollees and uninsured Americans.
       (10) Medicaid serves a major role in ensuring that the 
     number of Americans without health insurance, approximately 
     45,000,000 in 2003, is not substantially higher. Medicaid 
     helps buffer the drop in private coverage during recessions. 
     More than 4,800,000 Americans lost employer sponsored 
     coverage between 2000 and 2003. Medicaid covered an 
     additional 5,800,000 Americans during this period, preventing 
     even greater numbers of uninsured.
       (11) Medicaid matters to women in America. More than 
     16,000,000 women depend on Medicaid for their health care. 
     Women comprise the majority of seniors (71 percent) on 
     Medicaid. Half of nonelderly women with permanent mental or 
     physical disabilities have health coverage through Medicaid. 
     Medicaid provides treatment for low-income women diagnosed 
     with breast or cervical cancer in every State.
       (12) Medicaid is critical for children with disabilities. 
     Medicaid covers 78 percent of poor children with disabilities 
     who are under

[[Page S203]]

     5 years of age and 70 percent of poor children with 
     disabilities who are between the ages of 5 and 17. Similarly, 
     Medicaid covers a substantial portion of children with 
     disabilities who are near poor, covering 40 percent of 
     children with disabilities who are under 5 years of age and 
     25 percent of children with disabilities who are between the 
     ages of 5 and 17.
       (13) Medicaid is the Nation's largest source of payment for 
     mental health services, HIV/AIDS care, and care for children 
     with special needs. Much of this care is either not covered 
     by private insurance or limited in scope or duration. 
     Medicaid is also a critical source of funding for health care 
     for children in foster care and for health services in 
     schools.
       (14) The need for Medicaid is greater than ever today, 
     because the number of Americans living in poverty has 
     increased by 8,000,000 over the last 4 years and the number 
     of the uninsured has increased by 5,000,000.
       (15) The system of Federal matching for State Medicaid 
     expenditures ensures that Federal funds will grow as State 
     spending increases in response to unmet needs.
       (16) Despite the varied population served by the Medicaid 
     program, including those with significant health care needs, 
     Medicaid per capita growth has been consistently about half 
     the rate of growth in private insurance premiums and Medicaid 
     has far lower administrative costs. Medicaid costs less per 
     person than private coverage for people who have similar 
     health status.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the Medicaid program under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) is a critical component 
     of the health care system of the United States;
       (2) Federal support for the Medicaid program must be 
     adequate to support State spending meeting the essential 
     health needs of the low-income elderly, low-income 
     individuals with disabilities, and low-income children and 
     families, and should not be cut or capped; and
       (3) any retreat from the Federal commitment to Medicaid 
     would threaten not only the health care safety net of the 
     United States but the entire health care system

        TITLE IV--REDUCING HEALTH CARE COSTS FOR SMALL EMPLOYERS

                         Subtitle A--Tax Relief

     SEC. 401. REFUNDABLE CREDIT FOR SMALL BUSINESS EMPLOYEE 
                   HEALTH INSURANCE EXPENSES.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     refundable credits) is amended by redesignating section 36 as 
     section 37 and inserting after section 35 the following new 
     section:

     ``SEC. 36. SMALL BUSINESS EMPLOYEE HEALTH INSURANCE EXPENSES.

       ``(a) Determination of Amount.--In the case of a qualified 
     small employer, there shall be allowed as a credit against 
     the tax imposed by this subtitle for the taxable year an 
     amount equal to the expense amount described in subsection 
     (b) paid by the taxpayer during the taxable year.
       ``(b)  Expense Amount.--For purposes of this section--
       ``(1) In general.--The expense amount described in this 
     subsection is the applicable percentage of the amount of 
     qualified employee health insurance expenses of each 
     qualified employee.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is equal to--
       ``(A) for any qualified small employer described in 
     subparagraph (A) of paragraph (4), 50 percent,
       ``(B) for any qualified small employer described in 
     subparagraph (B) of paragraph (4), 35 percent, and
       ``(C) for any qualified small employer described in 
     subparagraph (C) of paragraph (4), 25 percent.
       ``(3) Per employee dollar limitation.--The amount of 
     qualified employee health insurance expenses taken into 
     account under paragraph (1) with respect to any qualified 
     employee for any taxable year shall not exceed--
       ``(A) $1,500 in the case of self-only coverage; and
       ``(B) $3,500 in the case of family coverage.
       ``(4) Qualified small employers described.--A qualified 
     small employer is described in--
       ``(A) this subparagraph if such employer employed an 
     average of 9 or fewer employees (as determined under 
     subsection (c)(1)(A)(ii)),
       ``(B) this subparagraph if such employer employed an 
     average of more than 9 but less than 25 employees (as so 
     determined), and
       ``(C) this subparagraph if such employer employed an 
     average of more than 24 but not more than 50 employees (as so 
     determined).
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified small employer.--
       ``(A) In general.--The term `qualified small employer' 
     means, with respect to any calendar year, any employer if--
       ``(i) such employer pays or incurs at least 75 percent of 
     the qualified employee health insurance expenses of each 
     qualified employee (determined without regard to subsection 
     (b)(3)), and
       ``(ii) such employer employed an average of 50 or fewer 
     employees on business days during either of the 2 preceding 
     calendar years.

     For purposes of clause (ii), a preceding calendar year may be 
     taken into account only if the employer was in existence 
     throughout such year.
       ``(B) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence throughout the 
     1st preceding calendar year, the determination under 
     subparagraph (A)(ii) shall be based on the average number of 
     employees that it is reasonably expected such employer will 
     employ on business days in the current calendar year.
       ``(2) Qualified employee health insurance expenses.--
       ``(A) In general.--The term `qualified employee health 
     insurance expenses' means any amount paid by an employer for 
     health insurance coverage (as defined in section 9832(b)(1)) 
     to the extent such amount is attributable to coverage 
     provided to any employee while such employee is a qualified 
     employee.
       ``(B) Exception for amounts paid under salary reduction 
     arrangements.--No amount paid or incurred for health 
     insurance coverage pursuant to a salary reduction arrangement 
     shall be taken into account under subparagraph (A).
       ``(3) Qualified employee.--
       ``(A) In general.--The term `qualified employee' means, 
     with respect to any period, an employee of an employer if--
       ``(i) the annual amount of hours in the employ of such 
     employer by such employee is at least 400 hours,
       ``(ii) the total amount of wages paid or incurred by such 
     employer to such employee at an annual rate during the 
     taxable year is at least $5,000, and
       ``(iii) such employee is not eligible for--

       ``(I) any benefits under title XVIII, XIX, or XXI of the 
     Social Security Act, or
       ``(II) any other publicly-sponsored health insurance 
     program.

       ``(B) Treatment of certain employees.--For purposes of 
     subparagraph (A), the term `employee'--
       ``(i) shall not include an employee within the meaning of 
     section 401(c)(1), and
       ``(ii) shall include a leased employee within the meaning 
     of section 414(n).
       ``(C) Wages.--The term `wages' has the meaning given such 
     term by section 3121(a) (determined without regard to any 
     dollar limitation contained in such section).
       ``(d) Certain Rules Made Applicable.--For purposes of this 
     section, rules similar to the rules of section 52 shall 
     apply.
       ``(e) Coordination With Deduction for Health Insurance 
     Costs of Self-Employed Individuals.--In the case of a 
     taxpayer who is eligible to deduct any amount under section 
     162(l) for the taxable year, this section shall apply only if 
     the taxpayer elects not to claim any amount as a deduction 
     under such section for such year.''.
       (b) Conforming Amendments.--
       (1) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``, or 
     from section 36 of such Code''.
       (2) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by striking the last item and inserting the 
     following new items:

``Sec. 36. Small business employee health insurance expenses.
``Sec. 37. Overpayments of tax.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31, 2005.

                    Subtitle B--Three-Share Program

     SEC. 421. THREE-SHARE PROGRAMS.

       The Social Security Act (42 U.S.C. 301 et seq.) is amended 
     by adding at the end the following:

               ``TITLE XXII--PROVIDING FOR THE UNINSURED

     ``SEC. 2201. THREE-SHARE PROGRAMS.

       ``(a) Pilot Programs.--The Secretary, acting through the 
     Administrator, shall award grants under this section for the 
     startup and operation of 25 eligible three-share pilot 
     programs for a 5-year period.
       ``(b) Grants for Three-Share Programs.--
       ``(1) Establishment.--The Administrator may award grants to 
     eligible entities--
       ``(A) to establish three-share programs;
       ``(B) to provide for contributions to the premiums assessed 
     for coverage under a three-share program as provided for in 
     subsection (c)(2)(B)(iii); and
       ``(C) to establish risk pools.
       ``(2) Three-share program plan.--Each entity desiring a 
     grant under this subsection shall develop a plan for the 
     establishment and operation of a three-share program that 
     meets the requirements of paragraphs (2) and (3) of 
     subsection (c).
       ``(3) Application.--Each entity desiring a grant under this 
     subsection shall submit an application to the Administrator 
     at such time, in such manner and containing such information 
     as the Administrator may require, including--
       ``(A) the three-share program plan described in paragraph 
     (2); and
       ``(B) an assurance that the eligible entity will--
       ``(i) determine a benefit package;
       ``(ii) recruit businesses and employees for the three-share 
     program;
       ``(iii) build and manage a network of health providers or 
     contract with an existing network or licensed insurance 
     provider;
       ``(iv) manage all administrative needs; and

[[Page S204]]

       ``(v) establish relationships among community, business, 
     and provider interests.
       ``(4) Priority.--In awarding grants under this section the 
     Secretary shall give priority to an applicant--
       ``(A) that is an existing three-share program;
       ``(B) that is an eligible three-share program that has 
     demonstrated community support; or
       ``(C) that is located in a State with insurance laws and 
     regulations that permit three-share program expansion.
       ``(c) Grant Eligibility.--
       ``(1) In general.--The Secretary, acting through the 
     Administrator, shall promulgate regulations providing for the 
     eligibility of three-share programs for participation in the 
     pilot program under this section.
       ``(2) Three-share program requirements.--
       ``(A) In general.--To be determined to be an eligible 
     three-share program for purposes of participation in the 
     pilot program under this section a three-share program 
     shall--
       ``(i) be either a non-profit or local governmental entity;
       ``(ii) define the region in which such program will provide 
     services;
       ``(iii) have the capacity to carry out administrative 
     functions of managing health plans, including monthly 
     billings, verification/enrollment of eligible employers and 
     employees, maintenance of membership rosters, development of 
     member materials (such as handbooks and identification 
     cards), customer service, and claims processing; and
       ``(iv) have demonstrated community involvement.
       ``(B) Payment.--To be eligible under paragraph (1), a 
     three-share program shall pay the costs of services provided 
     under subparagraph (A)(ii) by charging a monthly premium for 
     each covered individual to be divided as follows:
       ``(i) Not more than 30 percent of such premium shall be 
     paid by a qualified employee desiring coverage under the 
     three-share program.
       ``(ii) Not more than 30 percent of such premium shall be 
     paid by the qualified employer of such a qualified employee.
       ``(iii) At least 40 percent of such premium shall be paid 
     from amounts provided under a grant under this section.
       ``(iv) Any remaining amount shall be paid by the three-
     share program from other public, private, or charitable 
     sources.
       ``(C) Program flexibility.--A three-share program may set 
     an income eligibility guideline for enrollment purposes.
       ``(3) Coverage.--
       ``(A) In general.--To be an eligible three-share program 
     under this section, the three-share program shall provide at 
     least the following benefits:
       ``(i) Physicians services.
       ``(ii) In-patient hospital services.
       ``(iii) Out-patient services.
       ``(iv) Emergency room visits.
       ``(v) Emergency ambulance services.
       ``(vi) Diagnostic lab fees and x-rays.
       ``(vii) Prescription drug benefits.
       ``(B) Limitation.--Nothing in subparagraph (A) shall be 
     construed to require that a three-share program provide 
     coverage for services performed outside the region described 
     in paragraph (2)(A)(i).
       ``(C) Preexisting conditions.--A program described in 
     subparagraph (A) shall not be an eligible three-share program 
     under paragraph (1) if any individual can be excluded from 
     coverage under such program because of a preexisting 
     health condition.
       ``(d) Grants for Existing Three-Share Programs To Meet 
     Certification Requirements.--
       ``(1) In general.--The Administrator may award grants to 
     three-share programs that are operating on the date of 
     enactment of this section.
       ``(2) Application.--Each eligible entity desiring a grant 
     under this subsection shall submit an application to the 
     Administrator at such time, in such manner, and containing 
     such information as the Administrator may require.
       ``(e) Application of State Laws.--Nothing in this section 
     shall be construed to preempt State law.
       ``(f) Distressed Business Formula.--
       ``(1) In general.--Not later than 60 days after the date of 
     enactment of this section, the Administrator of the Health 
     Resources and Services Administration shall develop a formula 
     to determine which businesses qualify as distressed 
     businesses for purposes of this section.
       ``(2) Effect on insurance market.--Granting eligibility to 
     a distressed business using the formula under paragraph (1) 
     shall not interfere with the insurance market. Any business 
     found to have reduced benefits to qualify as a distressed 
     business under the formula under paragraph (1) shall not be 
     eligible to be a three-share program for purposes of this 
     section.
       ``(g) Definitions.--In this section:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Health Resources and Services 
     Administration.
       ``(2) Covered individual.--The term `covered individual' 
     means--
       ``(A) a qualified employee; or
       ``(B) a child under the age of 23 or a spouse of such 
     qualified employee who--
       ``(i) lacks access to health care coverage through their 
     employment or employer;
       ``(ii) lacks access to health coverage through a family 
     member;
       ``(iii) is not eligible for coverage under the medicare 
     program under title XVIII or the medicaid program under title 
     XIX; and
       ``(iv) does not qualify for benefits under the State 
     Children's Health Insurance Program under title XXI.
       ``(3) Distressed business.--The term `distressed business' 
     means a business that--
       ``(A) in light of economic hardship and rising health care 
     premiums may be forced to discontinue or scale back its 
     health care coverage; and
       ``(B) qualifies as a distressed business according to the 
     formula under subsection (g).
       ``(4) Eligible entity.--The term `eligible entity' means an 
     entity that meets the requirements of subsection (a)(2)(A).
       ``(5) Qualified employee.--The term `qualified employee' 
     means any individual employed by a qualified employer who 
     meets certain criteria including--
       ``(A) lacking access to health coverage through a family 
     member or common law partner;
       ``(B) not being eligible for coverage under the medicare 
     program under title XVIII or the medicaid program under title 
     XIX; and
       ``(C) agreeing that the share of fees described in 
     subsection (a)(2)(B)(i) shall be paid in the form of payroll 
     deductions from the wages of such individual.
       ``(6) Qualified employer.--The term `qualified employer' 
     means an employer as defined in section 3(d) of the Fair 
     Labor Standards Act of 1938 (29 U.S.C. 203(d)) who--
       ``(A) is a small business concern as defined in section 
     3(a) of the Small Business Act (15 U.S.C. 632);
       ``(B) is located in the region described in subsection 
     (a)(2)(A)(i); and
       ``(C) has not contributed to the health care benefits of 
     its employees for at least 12 months consecutively or 
     currently provides insurance but is classified as a 
     distressed business.
       ``(h) Evaluation.--Not later than 90 days after the end of 
     the 5-year period during which grants are available under 
     this section, the Government Accountability Office shall 
     submit to the Secretary and the appropriate committees of 
     Congress a report concerning--
       ``(1) the effectiveness of the programs established under 
     this section;
       ``(2) the number of individuals covered under such 
     programs;
       ``(3) any resulting best practices; and
       ``(4) the level of community involvement.
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, such 
     sums as may be necessary for each of fiscal years 2006 
     through 2011.''.
                                 ______
                                 
      By Mr. DODD (for himself, Mr. Reid, Ms. Mikulski, Ms. Stabenow, 
        Mr. Rockefeller, and Mr. Schumer):
  S. 17. A bill to amend the Help America Vote Act of 2002 to protect 
voting rights and to improve the administration of Federal elections, 
and for other purposes; to the Committee on Rules and Administration.
  Mr. DODD. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 17

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Voting 
     Opportunity and Technology Enhancement Rights Act of 2005''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents. 
Sec. 2. Findings and purposes.
Sec. 3. National Federal write-in absentee ballot.
Sec. 4. Voter verified ballots.
Sec. 5. Requirements for counting provisional ballots.
Sec. 6. Minimum required voting systems and poll workers in polling 
              places. 
Sec. 7. Election day registration. 
Sec. 8. Integrity of voter registration list.
Sec. 9. Early voting. 
Sec. 10. Acceleration of study on election day as a public holiday. 
Sec. 11. Improvements to voting systems. 
Sec. 12. Voter registration. 
Sec. 13. Establishing voter identification. 
Sec. 14. Impartial administration of elections. 
Sec. 15. Strengthening the election assistance commission.
Sec. 16. Authorization of appropriations.
Sec. 17. Effective date. 

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) The right of all eligible citizens to vote and have 
     their vote counted is the cornerstone of a democratic form of 
     government and the core precondition of government of the 
     people, by the people, and for the people.
       (2) The right of citizens of the United States to vote is a 
     fundamental civil right guaranteed under the United States 
     Constitution.
       (3) Congress has an obligation to reaffirm the right of 
     each American to have an equal

[[Page S205]]

     opportunity to vote and have that vote counted in Federal 
     elections, regardless of color, ethnicity, disability, 
     language, or the resources of the community in which they 
     live.
       (4) Congress has an obligation to ensure the uniform and 
     nondiscriminatory exercise of that right by removing barriers 
     in the form of election administration procedures and 
     technology and insufficient and unequal resources of State 
     and local governments.
       (b) Purposes.--The purposes of this Act are as follows:
       (1) To secure the opportunity to participate in democracy 
     for all eligible American citizens by establishing a national 
     Federal write-in absentee ballot for Federal elections.
       (2) To expand and establish uniform and nondiscriminatory 
     requirements and standards to remove administrative 
     procedural barriers and technological obstacles to casting a 
     vote and having that vote counted in Federal elections.
       (3) To expand and establish uniform and nondiscriminatory 
     requirements and standards to provide for the accessibility, 
     accuracy, verifiability, privacy, and security of all voting 
     systems and technology used in Federal elections.
       (4) To provide a Federal funding mechanism for the States 
     to implement the requirements and standards to preserve and 
     protect voting rights and th integrity of Federal elections 
     in the United States.

     SEC. 3. NATIONAL FEDERAL WRITE-IN ABSENTEE BALLOT.

       (a) In General.--
       (1) In general.--Title III of the Help America Vote Act of 
     2002 (42 U.S.C. 15481 et seq.) is amended by adding at the 
     end the following new subtitle:

                 ``Subtitle C--Additional Requirements

     ``SEC. 321. USE OF NATIONAL FEDERAL WRITE-IN ABSENTEE BALLOT.

       ``(a) In General.--Any person who is otherwise qualified to 
     vote in a Federal election in a State shall be permitted to 
     use the national Federal write-in absentee ballot prescribed 
     by the Election Assistance Commission under section 298 to 
     cast a vote in an election for Federal office.
       ``(b) Submission and Processing.--
       ``(1) In general.--Except as otherwise provided in this 
     section, a national Federal write-in absentee ballot shall be 
     submitted and processed in the manner provided by law for 
     absentee ballots in the State involved.
       ``(2) Deadline.--An otherwise eligible national Federal 
     write-in absentee ballot shall be counted if postmarked or 
     signed before the close of the polls on election day and 
     received by the appropriate State election official on or 
     before the date which is 10 days after the date of the 
     election or the date provided for receipt of absentee ballots 
     under State law, whichever is later.
       ``(c) Special Rules.--The following rules shall apply with 
     respect to national Federal write-in absentee ballots:
       ``(1) In completing the ballot, the voter may designate a 
     candidate by writing in the name of the candidate or by 
     writing in the name of a political party (in which case the 
     ballot shall be counted for the candidate of that political 
     party).
       ``(2) In the case of the offices of President and Vice 
     President, a vote for a named candidate or a vote by writing 
     in the name of a political party shall be counted as a vote 
     for the electors supporting the candidate involved.
       ``(3) Any abbreviation, misspelling, or other minor 
     variation in the form of the name of a candidate or a 
     political party shall be disregarded in determining the 
     validity of the ballot.
       ``(d) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2007.''.
       (2) Conforming amendment.--Section 401 of the Help America 
     Vote Act of 2002 (42 U.S.C. 15511) is amended by striking 
     ``and 303'' and inserting ``303, and subtitle C''.
       (b) National Federal Write-in Absentee Ballot.--
       (1) In general.--Title II of the Help America Vote Act of 
     2002 (42 U.S.C. 15321 et seq.) is amended by adding at the 
     end the following new subtitle:

                  ``Subtitle E--Guidance and Standards

     ``SEC. 297. NATIONAL FEDERAL WRITE-IN ABSENTEE BALLOT.

       ``(a) Form of Ballot.--The Commission shall prescribe a 
     national Federal write-in absentee ballot (including a 
     secrecy envelope and mailing envelope for such ballot) for 
     use in elections for Federal office.
       ``(b) Standards.--The Commission shall prescribe standards 
     for--
       ``(1) distributing the national Federal write-in absentee 
     ballot, including standards for distributing such ballot 
     through the Internet; and
       ``(2) processing and submission of the national Federal 
     write-in absentee ballot.''.
       (2) Conforming amendment.--Section 202 of the Help America 
     Vote Act of 2002 (42 U.S.C. 15322) is amended by 
     redesignating paragraphs (5) and (6) as paragraphs (6) and 
     (7), respectively, and by inserting after paragraph (4) the 
     following new paragraph:
       ``(5) carrying out the duties described in subtitle E.''.
       (c) Coordination With Uniformed and Overseas Citizens 
     Absentee Voting Act.--
       (1) In general.--The Presidential designee under the 
     Uniformed and Overseas Absentee Voting Act, in consultation 
     with the Election Assistance Commission, shall facilitate the 
     use and return of the national Federal write-in ballot for 
     absent uniformed services voters and overseas voters.
       (2) Definitions.--The terms ``absent uniformed service 
     voter'' and ``overseas voter'' shall have the meanings given 
     such terms by section 107 of the Uniformed and Overseas 
     Citizens Absentee Voting Act (42 U.S.C. 1973gg-6).

     SEC. 4. VOTER VERIFIED BALLOTS.

       (a) Verification.--
       (1) In general.--Section 301(a) of the Help America Vote 
     Act of 2002 (42 U.S.C. 15481(a)) is amended by adding at the 
     end the following new paragraph:
       ``(7) Voter verified ballots.--In order to meet the 
     requirements of paragraph (1)(A)(i), on and after January 1, 
     2009:
       ``(A) The voting system shall provide an independent means 
     of voter verification which meets the requirements of 
     subparagraph (B) and which allows each voter to verify the 
     ballot before it is cast and counted.
       ``(B) A means of voter verification meets the requirements 
     of this subparagraph if the voting system allows the voter to 
     choose from one of the following options to verify the 
     voter's vote selection:
       ``(i) A paper record.
       ``(ii) An audio record.
       ``(iii) A pictorial record.
       ``(iv) An electronic record or other means that provides 
     for voter verification that is accessible for individuals 
     with disabilities, including nonvisual accessibility for the 
     blind and visually impaired, in a manner that provides 
     privacy and independence equal to that provided for other 
     voters.
       ``(C) Any means of verification described in clause (ii), 
     (iii), or (iv) of subparagraph (B) must provide verification 
     which is equal or superior to verification through the use of 
     a paper record.
       ``(D) The requirements of this paragraph shall not apply to 
     any voting system purchased before January 1, 2009, in order 
     to meet the requirements of paragraph (3)(B).''.
       (2) Conforming amendment.--Clause (i) of section 
     301(a)(1)(A) of the Help America Vote Act of 2002 (42 U.S.C. 
     15481(a)(1)(A)(i)) is amended by inserting ``and consistent 
     with the requirements of paragraphs (2), (4), and (7)'' after 
     ``independent manner''.
       (b) Guidance.--Subtitle E of Title II of the Help America 
     Vote Act of 2002, as added by this Act, is amended by adding 
     at the end the following new section:

     ``SEC. 298. VOTER VERIFIED BALLOTS.

       ``The Commission shall issue uniform and nondiscriminatory 
     standards--
       ``(1) for voter verified ballots required under section 
     301(a)(7); and
       ``(2) for meeting the audit requirements of section 
     301(a)(2).''.
       (c) Reports.--
       (1) Election assistance commission.--Section 207 of the 
     Help America Vote Act of 2002 (42 U.S.C. 15327) is amended by 
     redesignating paragraph (5) as paragraph (6) and by inserting 
     after paragraph (4) the following new paragraph:
       ``(5) A description of the progress on implementing the 
     voter verified ballot requirements of section 301(a)(7) and 
     the impact of the use of such requirements on the 
     accessibility, privacy, security, usability, and auditability 
     of voting systems.''.
       (2) State reports.--Section 258 of the Help America Vote 
     Act of 2002 (42 U.S.C. 15408) is amended by striking ``and'' 
     at the end of paragraph (2), by striking the period at the 
     end of paragraph (3) and inserting ``; and'', and by adding 
     at the end the following new paragraph:
       ``(4) an analysis and description in the form and manner 
     prescribed by the Commission of the progress on implementing 
     the voter verified ballot requirements of section 
     301(a)(7).''.

     SEC. 5. REQUIREMENTS FOR COUNTING PROVISIONAL BALLOTS.

       (a) In General.--Section 302 of the Help America Vote Act 
     of 2002 (42 U.S.C. 15482) is amended by redesignating 
     subsection (d) as subsection (e) and by inserting after 
     subsection (c) the following new subsection:
       ``(d) Statewide Counting of Provisional Ballots.--For 
     purposes of subsection (a)(4), notwithstanding at which 
     polling place a provisional ballot is cast within the State, 
     the State shall count such ballot if the individual who cast 
     such ballot is otherwise eligible to vote.''.
       (b) Effective Date.--
       (1) In general.--Subsection (e) of section 302 of the Help 
     America Vote Act of 2002 (42 U.S.C. 15482(e)), as 
     redesignated under subsection (a), is amended by adding at 
     the end the following:
       ``(2) Effective date for statewide counting of provisional 
     ballots.--Each State shall be required to comply with the 
     requirements of subsection (d) on and after January 1, 
     2007.''.
       (2) Conforming amendment.--Subsection (e) of section 302 of 
     the Help America Vote Act of 2002 (42 U.S.C. 15482(e)), as 
     redesignated under subsection (a), is amended by striking 
     ``Each'' and inserting the following:
       ``(1) In general.--Except as provided in paragraph (2), 
     each''.

     SEC. 6. MINIMUM REQUIRED VOTING SYSTEMS AND POLL WORKERS IN 
                   POLLING PLACES.

       (a) In General.--Subtitle C of title III of the Help 
     America Vote Act of 2002, as added by this Act, is amended by 
     adding at the end the following new section:

     ``SEC. 322. MINIMUM REQUIRED VOTING SYSTEMS AND POLL WORKERS.

       ``(a) In General.--Each State shall provide for the minimum 
     required number of voting

[[Page S206]]

     systems and poll workers for each polling place on the day of 
     any Federal election and on any days during which such State 
     allows early voting for a Federal election in accordance with 
     the standards determined under section 299A
       ``(b) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2007.''.
       (b) Standards.--Subtitle E of the Help America Vote Act of 
     2002, as added and amended by this Act, is amended by adding 
     at the end the following new section:

     ``SEC. 299. STANDARDS FOR ESTABLISHING THE MINIMUM REQUIRED 
                   VOTING SYSTEMS AND POLL WORKERS.

       ``(a) In General.--The Commission shall issue standards 
     regarding the minimum number of voting systems and poll 
     workers required in each polling place on the day of any 
     Federal election and on any days during which early voting is 
     allowed for a Federal election.
       ``(b) Distribution.--The standards described in subsection 
     (a) shall provide for a uniform and nondiscriminatory 
     geographic distribution of such systems and workers.
       ``(c) Deviation.--The standards described in subsection (a) 
     shall permit States, upon providing adequate public notice, 
     to deviate from any allocation requirements in the case of 
     unforseen circumstances such as a natural disaster, terrorist 
     attack, or a change in voter turnout.''.

     SEC. 7. ELECTION DAY REGISTRATION.

       (a) Requirement.--Subtitle C of title III of the Help 
     America Vote Act of 2002 is, as added and amended by this 
     Act, is amended by adding at the end the following new 
     section:

     ``SEC. 323. ELECTION DAY REGISTRATION.

       ``(a) In General.--
       ``(1) Registration.--Notwithstanding section 8(a)(1)(D) of 
     the National Voter Registration Act of 1993 (42 U.S.C. 
     1973gg-6), each State shall permit any individual on the day 
     of a Federal election--
       ``(A) to register to vote in such election at the polling 
     place using the form established by the Election Assistance 
     Commission pursuant to section 297; and
       ``(B) to cast a vote in such election.
       ``(2) Exception.--The requirements under paragraph (1) 
     shall not apply to a State in which, under a State law in 
     effect continuously on and after the date of the enactment of 
     this Act, there is no voter registration requirement for 
     individuals in the State with respect to elections for 
     Federal office.
       ``(b) Effective Date.--Each State shall be required to 
     comply with the requirements of subsection (a) on and after 
     January 1, 2007.''.
       (b) Election Day Registration Form.--Subtitle E of Title II 
     of the Help America Vote Act of 2002, as added and amended by 
     this Act, is amended by adding at the end the following new 
     section:

     ``SEC. 299A. ELECTION DAY REGISTRATION FORM.

       ``The Commission shall develop an election day registration 
     form for elections for Federal office.''.

     SEC. 8. INTEGRITY OF VOTER REGISTRATION LIST.

       Subtitle C of title III of the Help America Vote Act of 
     2002, as added and amended by this Act, is amended by adding 
     at the end the following new section:

     ``SEC. 324. REMOVAL FROM VOTER REGISTRATION LIST.

       ``(a) Public Notice.--Not later than 45 days before any 
     Federal election, each State shall provide public notice of 
     all names which have been removed from the voter registration 
     list of such State under section 303 since the later of the 
     most recent election for Federal office or the day of the 
     most recent previous public notice provided under this 
     section.
       ``(b) Notice to Individual Voters.--
       ``(1) In general.--No individual shall be removed from the 
     voter registration list under section 303 unless such 
     individual is first provided with a notice which meets the 
     requirements of paragraph (2).
       ``(2) Requirements of notice.--The notice required under 
     paragraph (1) shall be--
       ``(A) provided to each voter in a uniform and 
     nondiscriminatory manner;
       ``(B) consistent with the requirements of the National 
     Voter Registration Act of 1993 (42 U.S.C. 1973gg et seq.); 
     and
       ``(C) in the form and manner prescribed by the Election 
     Assistance Commission.
       ``(c) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2007.''.

     SEC. 9. EARLY VOTING.

       (a) In General.--Subtitle C of title III of the Help 
     America Vote Act of 2002, as added and amended by this Act, 
     is amended by adding at the end the following new section:

     ``SEC. 325. EARLY VOTING.

       ``(a) In General.--Each State shall allow individuals to 
     vote in an election for Federal office not less than 15 days 
     prior to the day scheduled for such election in the same 
     manner as voting is allowed on such day.
       ``(b) Minimum Early Voting Requirements.--Each polling 
     place which allows voting prior to the day of a Federal 
     election pursuant to subsection (a) shall--
       ``(1) allow such voting for no less than 4 hours on each 
     day (other than Sunday); and
       ``(2) have uniform hours each day for which such voting 
     occurs.
       ``(c) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2007.''.
       (b) Standards for Early Voting.--Subtitle E of the Help 
     America Vote Act of 2002, as added and amended by this Act, 
     is amended by adding at the end the following new section:

     ``SEC. 299B. STANDARDS FOR EARLY VOTING.

       ``(a) In General.--The Commission shall issue standards for 
     the administration of voting prior to the day scheduled for a 
     Federal election. Such standards shall include the 
     nondiscriminatory geographic placement of polling places at 
     which such voting occurs.
       ``(b) Deviation.--The standards described in subsection (a) 
     shall permit States, upon providing adequate public notice, 
     to deviate from any requirement in the case of unforseen 
     circumstances such as a natural disaster, terrorist attack, 
     or a change in voter turnout.''.

     SEC. 10. ACCELERATION OF STUDY ON ELECTION DAY AS A PUBLIC 
                   HOLIDAY.

       (a) In General.--Section 241 of the Help America Vote Act 
     of 2002 (42 U.S.C. 15381) is amended by adding at the end the 
     following new subsection:
       ``(d) Report on Election Day.--
       ``(1) In general.--The report required under subsection (a) 
     with respect to election administration issues described in 
     subsection (b)(10) shall be submitted not later than 6 months 
     after the date of the enactment of the Voting Enhancement and 
     Technology Accuracy Rights Act of 2005.
       ``(2) Authorization of appropriations.--Of the amount 
     authorized to be appropriated under section 210 for fiscal 
     year 2006, $100,000 shall be authorized solely to carry out 
     the purposes of this subsection.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 11. IMPROVEMENTS TO VOTING SYSTEMS.

       (a) In General.--Subparagraph (B) of section 301(a)(1) of 
     the Help America Vote Act of 2002 (42 U.S.C. 15481(a)(1)(B)) 
     is amended by striking ``, a punch card voting system, or a 
     central count voting system''.
       (b) Clarification of Requirements for Punch Card Systems.--
     Subparagraph (A) of section 301(a)(1) of the Help America 
     Vote Act of 2002 (42 U.S.C. 15481(a)(1)(A)) is amended by 
     inserting ``punch card voting system,'' after ``any''.

     SEC. 12. VOTER REGISTRATION.

       (a) In General.--Paragraph (4) of section 303(b) of the 
     Help America Vote Act of 2002 (42 U.S.C. 15483(b)(4)) is 
     amended by adding at the end the following new subparagraph:
       ``(C) Exception.--On and after January 1, 2007--
       ``(i) in lieu of the questions and statements required 
     under subparagraph (A), such mail voter registration form 
     shall include an affidavit to be signed by the registrant 
     attesting both to citizenship and age; and
       ``(ii) subparagraph (B) shall not apply.''.
       (b) Internet Registration.--Subtitle C of title III of the 
     Help America Vote Act of 2002, as added and amended by this 
     Act, is amended by adding at the end the following new 
     section:

     ``SEC. 326. INTERNET REGISTRATION.

       ``(a) Internet Registration.--Each State shall establish a 
     program under which individuals may access and submit voter 
     registration forms electronically through the Internet.
       ``(b) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2009.''.
       (c) Standards for Internet Registration.--Subtitle E of the 
     Help America Vote Act of 2002, as added and amended by this 
     Act, is amended by adding at the end the following new 
     section:

     ``SEC. 299C. STANDARDS FOR INTERNET REGISTRATION PROGRAMS.

       ``The Commission shall establish standards regarding the 
     design and operation of programs which allow electronic voter 
     registration through the Internet.''.

     SEC. 13. ESTABLISHING VOTER IDENTIFICATION.

       (a) In General.--
       (1) In person voting.--Clause (i) of section 303(b)(2)(A) 
     of the Help America Vote Act of 2002 (42 U.S.C. 
     15483(b)(2)(A)(i)) is amended by striking ``or'' at the end 
     of subclause (I) and by adding at the end the following new 
     subclause:

       ``(III) executes a written affidavit attesting to such 
     individual's identity; or''.

       (2) Voting by mail.--Clause (ii) of section 303(b)(2)(A) of 
     the Help America Vote Act of 2002 (42 U.S.C. 
     15483(b)(2)(A)(ii)) is amended by striking ``or'' at the end 
     of subclause (I), by striking the period at the end of 
     subclause (II) and inserting ``; or'', and by adding at the 
     end the following new subclause:

       ``(III) a written affidavit, executed by such individual, 
     attesting to such individual's identity.''.

       (b) Standards for Verifying Voter Information.--Subtitle E 
     of the Help America Vote Act of 2002, as added and amended by 
     this Act, is amended by adding at the end the following new 
     section:

     ``SEC. 299D. VOTER IDENTIFICATION.

       ``The Commission shall develop standards for verifying the 
     identification information required under section 303(a)(5) 
     in connection with the registration of an individual to vote 
     in a Federal election.''.

     SEC. 14. IMPARTIAL ADMINISTRATION OF ELECTIONS.

       Subtitle C of title III of the Help America Vote Act of 
     2002, as added and amended by this Act, is amended by adding 
     at the end the following new section:

     ``SEC. 327. ELECTION ADMINISTRATION REQUIREMENTS.

       ``(a) Notice of Changes in State Election Laws.--Not later 
     than 15 days prior to any Federal election, each State shall 
     issue a

[[Page S207]]

     public notice describing all changes in State law affecting 
     the administration of Federal elections since the most recent 
     prior election.
       ``(b) Observers.--
       ``(1) In general.--Each State shall allow uniform and 
     nondiscriminatory access to any polling place for purposes of 
     observing a Federal election to--
       ``(A) party challengers;
       ``(B) voting rights and civil rights organizations; and
       ``(C) nonpartisan domestic observers and international 
     observers.
       ``(2) Notice of denial of observation request.--Each State 
     shall issue a public notice with respect to any denial of a 
     request by any observer described in paragraph (1) for access 
     to any polling place for purposes of observing a Federal 
     election. Such notice shall be issued not later than 24 hours 
     after such denial.
       ``(c) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2007.''.

     SEC. 15. STRENGTHENING THE ELECTION ASSISTANCE COMMISSION.

       (a) Budget Requests.--Part 1 of subtitle A of title II of 
     the Help America Vote Act of 2002 (42 U.S.C. 15321 et seq.) 
     is amended by inserting after section 209 the following new 
     section:

     ``SEC. 209A. SUBMISSION OF BUDGET REQUESTS.

       ``Whenever the Commission submits any budget estimate or 
     request to the President or the Office of Management and 
     Budget, it shall concurrently transmit a copy of such 
     estimate or request to the Congress and to the Committee on 
     House Administration of the House of Representatives and the 
     Committee on Rules and Administration of the Senate.''.
       (b) Exemption From Paperwork Reduction Act.--Paragraph (1) 
     of section 3502 of title 44, United States Code, is amended 
     by redesignating subparagraphs (B), (C), and (D) as 
     subparagraphs (C), (D), and (E), respectively, and by 
     inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) the Election Assistance Commission;''.
       (c) Rulemaking.--Section 209 of the Help America Vote Act 
     of 2002 (42 U.S.C. 15239) is amended--
       (1) by striking ``The Commission'' and inserting the 
     following:
       ``(a) In General.--Except as provided in subsection (b), 
     the Commission'', and
       (2) by inserting at the end the following new subsection:
       ``(b) Exception.--On and after January 1, 2007, subsection 
     (a) shall not apply to any authority granted under subtitle E 
     of this title or subtitle C of title III.''.
       (d) NIST Authority.--Subtitle E of title II of the Help 
     America Vote Act of 2002, as added and amended by this Act, 
     is amended by adding at the end the following new section:

     ``SEC. 299E. TECHNICAL SUPPORT.

       ``At the request of the Commission, the Director of the 
     National Institute of Standards and Technology shall provide 
     the Commission with technical support necessary for the 
     Commission to carry out its duties under this title.''.
       (e) Authorization of Appropriations.--Section 210 of the 
     Help America Vote Act of 2002 (42 U.S.C. 15330) is amended by 
     striking ``for each of fiscal years 2003 through 2005 such 
     sums as may be necessary (but not to exceed $10,000,000 for 
     each such year)'' and inserting ``$23,000,000 for fiscal year 
     2006 (of which $3,000,000 are authorized solely to carry out 
     the purposes of section 299E) and such sums as may be 
     necessary for succeeding fiscal years''.

     SEC. 16. AUTHORIZATION OF APPROPRIATIONS.

       Subsection (a) of section 257 of the Help America Vote Act 
     of 2002 (42 U.S.C. 15408(a)) is amended by adding at the end 
     the following new paragraphs:
       ``(4) For fiscal year 2006, $2,000,000,000.
       ``(5) For each fiscal year after 2006, such sums as are 
     necessary.''.

     SEC. 17. EFFECTIVE DATE.

       (a) In General.--Except as provided by section 10 and 
     subsection (b), the amendments made by this Act shall take 
     effect on January 1, 2007.
       (b) Exceptions.--The amendments made by section 4, section 
     11, section 12(b), and subsections (a) and (b) of section 15 
     shall take effect on January 1, 2009.
                                 ______
                                 
      By Mr. DAYTON (for himself, Mr. Reid, Ms. Stabenow, Mrs. 
        Feinstein, Mr. Kennedy, Mr. Corzine, Mr. Schumer, Mrs. Murray, 
        Ms. Mikulski, Mr. Lautenberg, Mr. Akaka, Mr. Inouye, Mrs. 
        Clinton, Mr. Levin, Mr. Kerry, Mr. Leahy, Mr. Rockefeller, Mr. 
        Dodd, Mr. Sarbanes, and Mr. Durbin):
  S. 18. A bill to amend title XVIII of the Social Security Act to make 
improvements to the medicare program for beneficiaries; to the 
Committee on Finance.
  Mr. DAYTON. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 18

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Meeting 
     Our Responsibility to Medicare Beneficiaries Act of 2005''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

           TITLE I--ELIMINATING SPECIAL INTEREST PREFERENCES

Sec. 101. Negotiating fair prices for medicare prescription drugs.
Sec. 102. Elimination of MA Regional Plan Stabilization Fund (Slush 
              Fund).
Sec. 103. Application of risk adjustment reflecting characteristics for 
              the entire medicare population in payments to Medicare 
              Advantage organizations.

       TITLE II--IMPROVING THE MEDICARE PROGRAM FOR BENEFICIARIES

Sec. 201. Eliminating coverage gap.
Sec. 202. Requiring two prescription drug plans to avoid Federal 
              fallback.
Sec. 203. Waiver of part D late enrollment penalty for transition 
              period.
Sec. 204. Improving the transition of full-benefit dual eligible 
              individuals to coverage under the medicare drug benefit.
Sec. 205. Part B premium reduction.
Sec. 206. Study and report on providing incentives to preserve retiree 
              coverage.
Sec. 207. Promoting transparency in employer subsidy payments.

           TITLE I--ELIMINATING SPECIAL INTEREST PREFERENCES

     SEC. 101. NEGOTIATING FAIR PRICES FOR MEDICARE PRESCRIPTION 
                   DRUGS.

       (a) In General.--Section 1860D-11 of the Social Security 
     Act (42 U.S.C. 1395w-111) is amended by striking subsection 
     (i) (relating to noninterference) and by inserting the 
     following new subsection:
       ``(i) Authority To Negotiate Prices With Manufacturers.--
       ``(1) In general.--The Secretary shall have authority 
     similar to that of other Federal entities that purchase 
     prescription drugs in bulk to negotiate contracts with 
     manufacturers of covered part D drugs, consistent with the 
     requirements and in furtherance of the goals of providing 
     quality care and containing costs under this part.
       ``(2) Required use of authority.--
       ``(A) Fallback plans.--The Secretary shall exercise the 
     authority described in paragraph (1) with respect to covered 
     part D drugs offered under each fallback prescription drug 
     plan under subsection (g).
       ``(B) PDPs and ma-pd plans.--In order to ensure that 
     beneficiaries enrolled under prescription drug plans and MA-
     PD plans and taxpayers are getting fair and affordable prices 
     for covered part D drugs that reflect the bulk purchasing 
     power of such enrollees, the Secretary shall exercise the 
     authority described in paragraph (1) with respect to such 
     drugs offered under all such plans if the Secretary 
     determines that the negotiated prices available under such 
     plans for such drugs are not fair and affordable prices 
     compared to the prices obtained by other Federal government 
     programs for such drugs.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).

     SEC. 102. ELIMINATION OF MA REGIONAL PLAN STABILIZATION FUND 
                   (SLUSH FUND).

       (a) In General.--Subsection (e) of section 1858 of the 
     Social Security Act (42 U.S.C. 1395w-27a) is repealed.
       (b) Conforming Amendment.--Section 1858(f)(1) of the Social 
     Security Act (42 U.S.C. 1395w-27a(f)(1)) is amended by 
     striking ``subject to subsection (e),''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     221(c) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2181).

     SEC. 103. APPLICATION OF RISK ADJUSTMENT REFLECTING 
                   CHARACTERISTICS FOR THE ENTIRE MEDICARE 
                   POPULATION IN PAYMENTS TO MEDICARE ADVANTAGE 
                   ORGANIZATIONS.

       Effective January 1, 2006, in applying risk adjustment 
     factors to payments to organizations under section 1853 of 
     the Social Security Act (42 U.S.C. 1395w-23), the Secretary 
     of Health and Human Services shall ensure that payments to 
     such organizations are adjusted based on such factors to 
     ensure that the health status of the enrollee is reflected in 
     such adjusted payments, including adjusting for the 
     difference between the health status of the enrollee and 
     individuals enrolled under the original medicare fee-for-
     service program under parts A and B of title XVIII of such 
     Act. Payments to such organizations must, in aggregate, 
     reflect such differences.

       TITLE II--IMPROVING THE MEDICARE PROGRAM FOR BENEFICIARIES

     SEC. 201. ELIMINATING COVERAGE GAP.

       (a) In General.--Section 1860D-2(b)(4)(B) of the Social 
     Security Act (42 U.S.C. 1395w-102(b)(4)(B)) is amended to 
     read as follows:
       ``(B) Annual out-of-pocket threshold.--For purposes of this 
     part, the `annual out-of-pocket threshold' specified in this 
     subparagraph for a year is equal to the greater of--
       ``(i) $3,600; or
       ``(ii) the initial coverage limit for the year specified in 
     paragraph (3).''.

[[Page S208]]

       (b) Conforming Amendment.--Section 1860D-22(a)(3)(B)(ii) of 
     the Social Security Act (42 U.S.C. 1395w-132(b)(4)(B)(ii)) is 
     amended by striking ``and the annual out-of-pocket threshold, 
     respectively, are annually adjusted under paragraphs (1) and 
     (4)(B) of section 1860D-2(b)'' and inserting ``is annually 
     adjusted under paragraph (1) of section 1860D-2(b) (using the 
     percentage increase specified in paragraph (6) of such 
     section)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).

     SEC. 202. REQUIRING TWO PRESCRIPTION DRUG PLANS TO AVOID 
                   FEDERAL FALLBACK.

       (a) In General.--Section 1860D-3(a) of the Social Security 
     Act (42 U.S.C. 1395w-103(a)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``qualifying plans (as defined in paragraph 
     (3))'' and inserting ``prescription drug plans''; and
       (B) by striking ``, at least one of which is a prescription 
     drug plan'';
       (2) in paragraph (2), by striking ``qualifying plans'' and 
     inserting ``prescription drug plans''; and
       (3) by striking paragraph (3).
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).

     SEC. 203. WAIVER OF PART D LATE ENROLLMENT PENALTY FOR 
                   TRANSITION PERIOD.

       (a) In General.--Section 1860D-13(b) of the Social Security 
     Act (42 U.S.C. 1895w-113(b)) is amended by adding at the end 
     the following new paragraph:
       ``(8) Waiver of penalty for months prior to 2008.--A part D 
     eligible individual who enrolls for the first time in a 
     prescription drug plan or an MA-PD plan under this part prior 
     to January 1, 2008, shall not be subject an increase in the 
     monthly beneficiary premium established under subsection (a) 
     with respect to months occurring prior to such date.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (117 Stat. 2071).

     SEC. 204. IMPROVING THE TRANSITION OF FULL-BENEFIT DUAL 
                   ELIGIBLE INDIVIDUALS TO COVERAGE UNDER THE 
                   MEDICARE DRUG BENEFIT.

       (a) In General.--Notwithstanding subsection (d)(1) of 
     section 1935 of the Social Security Act (42 U.S.C. 1396u-5), 
     beginning on January 1, 2006, the Secretary of Health and 
     Human Services shall administer a 12-month period during 
     which full-benefit dual eligible individuals (as defined in 
     section 1935(c)(6) of the Social Security Act) shall 
     gradually transition from receiving medical assistance for 
     prescribed drugs under the medicaid program under title XIX 
     of such Act to obtaining coverage of covered part D drugs (as 
     defined in section 1860D-2(e) (42 U.S.C. 1395w-102(e)) under 
     title XVIII of such Act in order to assure that such 
     individuals continue to receive the outpatient prescription 
     drugs they need.
       (b) Adjustments to Phased-Down State Contribution.--The 
     Secretary of Health and Human Services shall make appropriate 
     adjustments to the amount of payments required to be made by 
     a State or the District of Columbia under section 1935(c) of 
     the Social Security Act (42 U.S.C. 1396u-5(c)) for months 
     occurring during the period described in subsection (a) in 
     order to account for increased costs for the provision of 
     medical assistance incurred by the State or the District of 
     Columbia by reason of the application of the transition 
     period required under this section.

     SEC. 205. PART B PREMIUM REDUCTION.

       Section 1839(a) of the Social Security Act (42 U.S.C. 
     1395r(a)) is amended--
       (1) in paragraph (3), in the first sentence, by striking 
     ``The Secretary'' and inserting ``Subject to paragraph (5), 
     the Secretary''; and
       (2) by adding at the end the following new paragraph:
       ``(5) For each year (beginning with 2006), the Secretary 
     shall reduce the monthly premium rate determined under 
     paragraph (3) for each month in the year for each individual 
     enrolled under this part (including such an individual 
     subject to an increased premium under subsection (b) or (i)) 
     so that the aggregate amount of such reductions in the year 
     is equal to the aggregate amount of reduced expenditures from 
     the Federal Supplementary Medicare Insurance Trust Fund in 
     the year that the Secretary estimates will result from the 
     provisions of section 103 of the Meeting Our Responsibility 
     to Medicare Beneficiaries Act of 2005.''.

     SEC. 206. STUDY AND REPORT ON PROVIDING INCENTIVES TO 
                   PRESERVE RETIREE COVERAGE.

       (a) Study.--The Secretary of Health and Human Services 
     shall conduct a study to determine what additional incentives 
     should be provided to employers in order for such employers 
     to continue to provide retirees with prescription drug 
     coverage. Such study shall include an assessment of 
     permitting costs incurred by an employer for covered part D 
     drugs on behalf of a retiree to be treated as incurred costs 
     for purposes of reaching the annual out-of-pocket threshold 
     under section 1860D-2(b)(4) of the Social Security Act (42 
     U.S.C. 1395w-102(b)(4)).
       (b) Report.--Not later than January 1, 2006, the Secretary 
     of Health and Human Services shall submit to Congress a 
     report on the study under subsection (a) together with such 
     recommendations for legislation as the Secretary deems 
     appropriate.

     SEC. 207. PROMOTING TRANSPARENCY IN EMPLOYER SUBSIDY 
                   PAYMENTS.

       (a) In General.--Section 1860D-22(a) of the Social Security 
     Act (42 U.S.C. 1895w-132(a)) is amended by adding at the end 
     the following new paragraph:
       ``(7) Disclosure of certain information.--The Secretary 
     shall make the following information regarding the sponsor of 
     a qualified prescription drug plan receiving a subsidy under 
     this section available to the public through the Internet 
     website of the Centers for Medicare & Medicaid Services and 
     other appropriate means:
       ``(A) The information used by the Secretary to ensure that 
     the prescription drug coverage offered under the plan meets 
     the requirements for subsidy payments under this section.
       ``(B) The total amount of the subsidy payments made to the 
     sponsor under this section.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).

  Mr. KENNEDY. Mr. President, the Bush Administration and the 
Republican Congress are no friend of America's seniors. In 2003, they 
enacted legislation to dismantle Medicare, even though Medicare has 
helped a generation of seniors live their golden years with health and 
dignity.
  Now their target is Social Security. They want to privatize this 
trusted program for the benefit of Wall Street bankers. They even want 
to cut benefits for women because--in the Republican view--they live 
too long. It's time to end these shameful attacks on our senior 
citizens, restore Medicare and protect Social Security.
  I commend the leadership of my colleague from Minnesota, Senator 
Dayton, and our Democratic Leader, Senator Reid, in introducing this 
urgently needed legislation today to enable Medicare to keep its 
promise to the elderly.
  Forty years ago, Congress enacted the landmark legislation that 
established Medicare. We would do well today to remember President 
Lyndon Johnson's words on signing that historic bill in 1965: ``No 
longer will older Americans be denied the healing miracle of modern 
medicine. No longer will illness crush and destroy the savings they 
have so carefully put away over a lifetime so that they might enjoy 
dignity in their later years.''
  The ruinous Medicare legislation that the Republican Congress enacted 
in 2003 breaks that solemn promise.
  Before Medicare was created, millions of seniors could obtain health 
care coverage only at the whim of the insurance industry. If they were 
too sick or too poor to be profitable to an insurance company, they 
would be denied health care coverage. Their savings--and their 
children's savings--were in jeopardy when illness struck. Before 
Medicare, senior citizens were among the poorest Americans, with almost 
three in ten living in poverty. Bankruptcies from overwhelming medical 
bills were common.
  Medicare changed all that, and 40 years later, President Bush and the 
Republican Congress are wrong to try to turn back the clock.
  Some of my colleagues attempt to portray Medicare as a failure. But 
the facts show that it is one of the most successful endeavors the 
Nation has ever undertaken. In 1963, before Medicare was enacted, 
almost half of America's seniors were uninsured. Today that number is 
one in a hundred.
  Before Medicare was enacted, Americans turning 65 could expect to 
live another 14 years. Today, they can expect almost 18 more years.
  Seniors understand that Medicare works. They don't want to return to 
the days when they had to gamble their health, their savings and their 
lives on risky private insurance.
  The 2003 Republican bill was sold to the American people as a way to 
help seniors with the high cost of prescription drugs, so you might 
think it does something about the high cost of drugs. But it doesn't.
  It not only fails to help Medicare lower the cost of drugs--it 
actually makes it illegal for Medicare to try. Republicans were so 
worried about protecting drug company profits that they made it illegal 
for Medicare to do what

[[Page S209]]

the Veterans Administration does for veterans--negotiate discounts on 
drug prices. The Bush Administration and the GOP Congress wouldn't dare 
to prohibit the VA from doing that for the veterans, and they shouldn't 
do it for senior citizens either.
  The discounts on drug prices for veterans are substantial. On 
average, the price paid by the VA is 45 percent of the retail price, 
but often, the savings are even more dramatic. The retail price for 
Mevacor is $4 a pill, but the VA pays only 23 cents. The undiscounted 
price of Zantac is $1.83, but the VA pays two cents.
  Senator Dayton's legislation abolishes the unconscionable provision 
that bars Medicare from negotiating discounts on drug prices for 
America's seniors. That's not price control--it's common sense.
  Republicans also claim that their new drug benefit is ``voluntary.'' 
Not exactly. If seniors don't sign up the first year, they have to pay 
more and more to join in subsequent years. When they need the coverage, 
they may not be able to afford it.
  Senator Dayton's legislation reverses this flagrant system of fines 
and makes the Medicare drug program truly voluntary. When Congress 
enacts it, seniors will be able to sign up for the drug program without 
facing ruinous fines.
  Good prescription drug coverage for senior citizens is a priority for 
Democrats. For the Administration and the Republicans in Congress, 
however, tax cuts for billionaires are more important than health care 
for senior citizens.
  In addition, the 2003 Medicare law leaves too many elderly citizens 
with unaffordable costs. Seniors with moderate incomes and high drug 
expenses still face high drug costs. The benefits under the GOP law--
with its $250 deductible, 25 percent cost-sharing, an out-of-pocket 
limit of $3,600 on costs, but continued co-payment obligations even 
after the limit is reached--are far less generous than those enjoyed by 
most younger Americans, even though the elderly's need for prescription 
drugs is much greater.
  Senior citizens with an income of $15,000 and drug expenses of $4,000 
would have to pay more than $2,900, including premiums, out of their 
own pocket. That's too heavy a burden.
  If they fall into the so-called doughnut hole, their situation is 
much worse. Under the 2003 law, the government makes no contribution to 
any drug costs between $2,250 in expenditures and $5,100 in 
expenditures. Patients who need $5,200 worth of prescriptions could be 
forced to pay $2,850 in drug expenses without any help at all from 
Medicare. That's too much for an elderly person to pay and still meet 
other essential medical needs, pay the rent or mortgage, and buy food 
and other necessities of life.

  Senator Dayton's proposal begins to fill in that doughnut hole by not 
allowing the cap on total out of pocket expenditures to rise year after 
year, as it does under the GOP act. Under Senator Dayton's proposal, 
seniors will have the certainty of knowing where that limit is from one 
year to the next. As drug expenses rise, more seniors will gain the 
benefit of the assistance from Medicare at these high spending levels, 
and ultimately, the doughnut hole will close.
  The Republican Medicare law is a raw deal for seniors, but it's a 
bonanza for the drug industry and the insurance industry.
  It gives massive subsidies to HMOs. Most Americans probably think 
it's the job of insurance companies to guarantee the health of their 
beneficiaries, but according to the Republican view that's wrong. They 
make America's seniors guarantee the health and wealth of HMOs.
  The government already pays private insurance plans 104 percent of 
what it costs Medicare to provide seniors with the same health care. 
Republicans claim to be in favor of competition, but the playing field 
is tilted toward HMOs, and their 2003 Act tilted it further. You might 
think HMOs need that overpayment because they serve sicker or needier 
beneficiaries. Not true. Enrollees in private plans are actually 
healthier than those in Medicare, resulting in a further bonus of 8.7 
percent to the private plans.
  Senator Dayton's legislation requires realistic risk adjustment for 
private plans that provide services to seniors under Medicare. It 
removes the artificial calculations that inflate payments to HMOs and 
other private insurance carriers.
  Another problem with the 2003 Act is that if the subsidies don't 
provide enough profits, the Republican bill provides cash handouts for 
the insurance industry. If an HMO doesn't think it can make enough 
money in some area of the country, the Bush Administration can simply 
ladle out the cash--up to $12 billion a year--until the bribe is high 
enough to get the company to participate.
  Senator Dayton's legislation reverses this outrageous giveaway and 
ensures that the dollars devoted to this slush fund are used instead to 
provide better health care for seniors.
  The Republican law stacks the deck against seniors in other ways. It 
allows a region to be served by only one prescription drug plan, along 
with a PPO. That gives the drug plan a monopoly in that region for 
seniors who want to remain in Medicare. If the only available drug plan 
is tailored to the healthiest and youngest seniors, it might be 
acceptable for a senior whose prescription needs are limited. But it 
gives no help to seniors who take medications for multiple chronic 
conditions every day. Seniors have no real recourse if they can't 
afford the monopoly drug plan. The only way they can get prescription 
drug coverage is to enroll in the PPO.
  Senator Dayton's legislation provides an effective guarantee that 
seniors who wish to remain in traditional Medicare will have a genuine 
choice of prescription-only plans. If a choice between at least two 
private drug-only plans is not available in any region, the Federal 
Government will provide a plan. This proposal ensures that any senior 
who wishes to remain in Medicare will have access to high-quality 
affordable prescription drug coverage.

  The Republican Medicare law also dealt a harsh blow to the employer 
plans that millions of retirees depend on. The Congressional Budget 
Office estimates that almost three million retirees will lose their 
current drug coverage, because employers will drop the coverage when 
retirees become eligible for the new federal benefit, which is not as 
comprehensive.
  Democrats fought to include provisions in that flawed legislation to 
help employers maintain the good coverage that so many Americans depend 
on to meet their needs in retirement. Sadly, some employers could abuse 
these subsidies by failing to use them to assist their employees--and 
the Bush Administration is letting them get away with it. Toothless 
enforcement and weak regulation allow some unscrupulous employers to 
pocket the subsidy and weaken the coverage.
  Senator Dayton's legislation will put an end to this scandalous 
practice by requiring employers to account for the funds they receive 
in subsidies. No longer will employers be able to hide that they are 
accepting subsidies to maintain retiree health coverage and still cut 
back the coverage. The Dayton bill also requires new research on ways 
to help employers maintain retiree coverage.
  One of the most troubling aspects of the 2003 Act is that it 
victimizes six million senior citizens and disabled people on 
Medicaid--the poorest of the poor. Their out-of-pocket payments for 
drugs will be raised, even though they do not even have coverage for 
the drugs they need the most.
  Today, under Federal law, people with drug coverage under Medicaid 
may be charged only nominal amounts for the drugs they need. The vast 
majority of states charge nothing.
  For every other Medicare benefit, Medicaid wraps around Medicare 
coverage and picks up the out-of-pocket costs that Medicare does not 
pay. Not under this legislation. States are prohibited from wrapping 
around the Medicare benefits with their Medicaid program. Instead, a 
uniform Federal co-payment is imposed. It is indexed, so that it 
increases every year. If low income seniors need a drug that is not in 
the insurance company formulary, they have to go through a burdensome 
appeals process. Most will simply go without the drug they need.
  The people we are talking about are truly the poorest of the poor. In 
most cases, their incomes are well below poverty. And the impact of 
even small

[[Page S210]]

co-payments is devastating. Study after study finds that when the poor 
have to pay more for drugs, they end up hospitalized, in nursing homes, 
or dead.
  Senator Dayton's legislation reverses this cruel provision and allows 
States to delay implementing the requirement that the new Medicare 
provisions must immediately supplant State Medicaid programs for the 
poorest of the poor.
  Congress should be helping seniors with the burden of high drug 
costs, not allowing a right wing agenda to destroy the guarantee of 
affordable health care that America's seniors deserve and expect.
  That's why Senator Dayton and Senator Reid have introduced this 
needed legislation, and I urge my colleagues to support it.
                                 ______
                                 
      By Mr. CONRAD (for himself, Mr. Reid, Mr. Feingold, Ms. Mikulski, 
        Ms. Stabenow, Mr. Inouye, Mr. Leahy, Mr. Salazar, Mr. 
        Rockefeller, Mr. Schumer, Mrs. Feinstein, Mr. Dayton, Mr. Dodd, 
        and Mrs. Clinton):
  S. 19. A bill to reduce budget deficits by restoring budget 
enforcement and strengthening fiscal responsibility; to the Committee 
on the Budget.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 19

       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 ``Fiscal Responsibility for a 
     Sound Future Act''.

     SEC. 2. EXTENSION OF THE DISCRETIONARY SPENDING CAPS.

       (a) In General.--Section 251(c) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 901(c)) is 
     amended to read as follows:
       ``(c) Discretionary Spending Limit.--As used in this part, 
     the term `discretionary spending limit' means, with respect 
     to fiscal year 2005--
       ``(1) for the discretionary category: $836,268,000,000 in 
     new budget authority and $895,966,000,000 in outlays;
       ``(2) for the highway category: $31,761,000,000 in outlays; 
     and
       ``(3) for the mass transit category: $956,000,000 in new 
     budget authority and $6,748,000,000 in outlays;
     as adjusted in strict conformance with subsection (b).''.
       (b)  Commitment of the Senate.--Congress should enact a 
     limit on total discretionary spending for fiscal year 2006.

     SEC. 3. EXTENSION OF PAY-AS-YOU-GO REQUIREMENT.

       Section 252 of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 is amended--
       (1) in subsection (a), by striking ``enacted before October 
     1, 2002''; and
       (2) in subsection (b), by striking ``enacted before October 
     1, 2002,''.

     SEC. 4. EXTENSION OF BUDGET ENFORCEMENT THROUGH 2015.

       Section 275 of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 (2 U.S.C. 900 note) is amended by adding 
     at the end the following:
       ``(d) Reenactment.--Part C of this title is reenacted into 
     law effective for fiscal year 2005. Part C shall expire at 
     the end of fiscal year 2015.''.

     SEC. 5. RECONCILIATION FOR DEFICIT REDUCTION IN THE SENATE.

       (a) In General.--It shall not be in order in the Senate to 
     consider under the expedited procedures applicable to 
     reconciliation in sections 305 and 310 of the Congressional 
     Budget Act of 1974 any bill, resolution, amendment, amendment 
     between Houses, motion, or conference report that increases 
     the deficit in the first fiscal year covered by the most 
     recently adopted concurrent resolution on the budget, the 
     period of the first 5 fiscal years covered by the most 
     recently adopted concurrent resolution on the budget, or the 
     period of the 5 fiscal years following the first 5 fiscal 
     years covered by the most recently adopted concurrent 
     resolution on the budget.
       (b) Budget Resolution.--It shall not be in order in the 
     Senate to consider pursuant to sections 301, 305, or 310 of 
     the Congressional Budget Act of 1974 pertaining to concurrent 
     resolutions on the budget any resolution, concurrent 
     resolution, amendment, amendment between the Houses, motion, 
     or conference report that contains any reconciliation 
     directive that would increase the deficit in the first fiscal 
     year covered by the most recently adopted concurrent 
     resolution on the budget, the period of the first 5 fiscal 
     years covered by the most recently adopted concurrent 
     resolution on the budget, or the period of the 5 fiscal years 
     following the first 5 fiscal years covered by the most 
     recently adopted concurrent resolution on the budget.
       (c) Supermajority Waiver and Appeal.--This section may be 
     waived or suspended in the Senate only by an affirmative vote 
     of \3/5\ of the Members, duly chosen and sworn. An 
     affirmative vote of \3/5\ of the Members of the Senate, duly 
     chosen and sworn, shall be required in the Senate to sustain 
     an appeal of the ruling of the Chair on a point of order 
     raised under this section.

     SEC. 6. SENATE PAYGO RULE.

       (a) In General.--Section 505(a)(5)(A) of H. Con. Res. 95 
     (108th Congress) is amended by striking ``as adjusted for any 
     changes in revenues or direct spending assumed by such 
     resolution''.
       (b) Expiration Date.--Section 505(e) of H. Con. Res. 95 
     (108th Congress) is amended by striking ``2008'' and 
     inserting ``2015''.
                                 ______
                                 
      By Mr. REID (for himself, Mrs. Murray, Mr. Schumer, Mr. Corzine, 
        Mr. Lautenberg, Mrs. Clinton, Mr. Kerry, Mrs. Feinstein, Ms. 
        Cantwell, Mr. Harkin, Ms. Mikulski, Mr. Inouye, Mr. Akaka, Mr. 
        Levin, Mr. Kennedy, Mr. Leahy, Mr. Wyden, and Ms. Stabenow):
  S. 20. A bill to expand access to preventive health care services 
that help reduce unintended pregnancy, reduce the number of abortions, 
and improve access to women's health care; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. REID. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 20

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Prevention 
     First Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.

             TITLE I--TITLE X OF PUBLIC HEALTH SERVICE ACT

Sec. 101. Short title.
Sec. 102. Authorization of appropriations.

              TITLE II--FAMILY PLANNING STATE EMPOWERMENT

Sec. 201. Short title.
Sec. 202. State option to provide family planning services and supplies 
              to additional low-income individuals.
Sec. 203. State option to extend the period of eligibility for 
              provision of family planning services and supplies.

 TITLE III--EQUITY IN PRESCRIPTION INSURANCE AND CONTRACEPTIVE COVERAGE

Sec. 301. Short title.
Sec. 302. Amendments to Employee Retirement Income Security Act of 
              1974.
Sec. 303. Amendments to Public Health Service Act relating to the group 
              market.
Sec. 304. Amendment to Public Health Service Act relating to the 
              individual market.

      TITLE IV--EMERGENCY CONTRACEPTION EDUCATION AND INFORMATION

Sec. 401. Short title.
Sec. 402. Emergency contraception education and information programs.

         TITLE V--COMPASSIONATE ASSISTANCE FOR RAPE EMERGENCIES

Sec. 501. Short title.
Sec. 502. Survivors of sexual assault; provision by hospitals of 
              emergency contraceptives without charge.

                 TITLE VI--TEENAGE PREGNANCY PREVENTION

Sec. 601. Short title.
Sec. 602. Teenage pregnancy prevention.

            TITLE VII--ACCURACY OF CONTRACEPTIVE INFORMATION

Sec. 701. Short title.
Sec. 702. Accuracy of contraceptive information.

     SEC. 2. FINDINGS.

       The Congress finds as follows:
       (1) Although the Centers for Disease Control and Prevention 
     (referred to in this section as the ``CDC'') included family 
     planning in its published list of the Ten Great Public Health 
     Achievements in the 20th Century, the United States still has 
     one of the highest rates of unintended pregnancies among 
     industrialized nations.
       (2) Each year, 3,000,000 pregnancies, nearly half of all 
     pregnancies, in the United States are unintended, and nearly 
     half of unintended pregnancies end in abortion.
       (3) In 2002, 34,000,000 women-half of all women of 
     reproductive age (ages 15-44)-were in need of contraceptive 
     services and supplies to help prevent unintended pregnancy, 
     and half of those were in need of public support for such 
     care.
       (4) The United States also has the highest rate of 
     infection with sexually transmitted diseases of any 
     industrialized country. In 2003 there were approximately 
     19,000,000 new cases of sexually transmitted diseases. 
     According to the CDC (November 2004), these sexually 
     transmitted diseases impose a tremendous economic burden with 
     direct medical costs as high as $15,500,000,000 per year.

[[Page S211]]

       (5) Increasing access to family planning services will 
     improve women's health and reduce the rates of unintended 
     pregnancy, abortion, and infection with sexually transmitted 
     diseases. Contraceptive use saves public health dollars. 
     Every dollar spent on providing family planning services 
     saves an estimated $3 in expenditures for pregnancy-related 
     and newborn care for Medicaid alone.
       (6) Contraception is basic health care that improves the 
     health of women and children by enabling women to plan and 
     space births.
       (7) Women experiencing unintended pregnancy are at greater 
     risk for physical abuse and women having closely spaced 
     births are at greater risk of maternal death.
       (8) The child born from an unintended pregnancy is at 
     greater risk of low birth weight, dying in the first year of 
     life, being abused, and not receiving sufficient resources 
     for healthy development.
       (9) The ability to control fertility also allows couples to 
     achieve economic stability by facilitating greater 
     educational achievement and participation in the workforce.
       (10) The average American woman desires two children and 
     spends five years of her life pregnant or trying to get 
     pregnant and roughly 30 years trying to prevent pregnancy. 
     Without contraception, a sexually active woman has an 85 
     percent chance of becoming pregnant within a year.
       (11) The percentage of sexually active women ages 15 
     through 44 who were not using contraception increased from 
     5.4 percent to 7.4 percent in 2002, an increase of 37 
     percent, according to the CDC. This represents an apparent 
     increase of 1,430,000 women and could raise the rate of 
     unintended pregnancy.
       (12) Many poor and low-income women cannot afford to 
     purchase contraceptive services and supplies on their own. 
     12,100,000 or 20 percent of all women ages 15 through 24 were 
     uninsured in 2002, and that proportion has increased by 10 
     percent since 1999.
       (13) Public health programs like Medicaid and title X (of 
     the Public Health Service Act), the national family planning 
     program, provide high-quality family planning services and 
     other preventive health care to underinsured or uninsured 
     individuals who may otherwise lack access to health care.
       (14) Medicaid is the single largest source of public 
     funding for family planning services and HIV/AIDS care in the 
     United States. Half of all public dollars spent on 
     contraceptive services and supplies in the United States are 
     provided through Medicaid and approximately 5,500,000 women 
     of reproductive age-nearly one in 10 women between the ages 
     of 15 and 44-rely on Medicaid for their basic health care 
     needs.
       (15) Each year, title X services enable Americans to 
     prevent approximately 1,000,000 unintended pregnancies, and 
     one in three women of reproductive age who obtains testing or 
     treatment for sexually transmitted diseases does so at a 
     title X-funded clinic. In 2003, title X-funded clinics 
     provided 2,800,000 Pap tests, 5,100,000 sexually transmitted 
     disease tests, and 526,000 HIV tests.
       (16) The increasing number of uninsured, stagnant funding, 
     health care inflation, new and expensive contraceptive 
     technologies, and improved but expensive screening and 
     treatment for cervical cancer and sexually transmitted 
     diseases, have diminished the ability of title X funded 
     clinics to adequately serve all those in need. Taking 
     inflation into account, funding for the title X program 
     declined by 58 percent between 1980 and 2003.
       (17) While Medicaid remains the largest source of 
     subsidized family planning services, States are facing 
     significant budgetary pressures to cut their Medicaid 
     programs, putting many women at risk of losing coverage for 
     family planning services.
       (18) In addition, eligibility for Medicaid in many States 
     is severely restricted leaving family planning services 
     financially out of reach for many poor women. Many States 
     have demonstrated tremendous success with Medicaid family 
     planning waivers that allow them to expand access to Medicaid 
     family planning services. However, the administrative burden 
     of applying for a waiver poses a significant barrier to 
     States that would like to expand their coverage of family 
     planning programs through Medicaid.
       (19) As of January of 2005, 21 States offered expanded 
     family planning benefits as a result of Medicaid family 
     planning waivers. The cost-effectiveness of these waivers was 
     affirmed by a recent evaluation funded by the Centers for 
     Medicare & Medicaid. This evaluation of six waivers found 
     that all such programs resulted in significant savings to 
     both the Federal and State governments. Moreover, the 
     researchers found measurable reductions in unintended 
     pregnancy.
       (20) Although employer-sponsored health plans have improved 
     coverage of contraceptive services and supplies, largely in 
     response to State contraceptive coverage laws, there is still 
     significant room for improvement. The ongoing lack of 
     coverage in health insurance plans, particularly in self-
     insured and individual plans, continues to place effective 
     forms of contraception beyond the financial reach of many 
     women.
       (21) Including contraceptive coverage in private health 
     care plans saves employers money. Not covering contraceptives 
     in employee health plans costs employers 15 to 17 percent 
     more than providing such coverage.
       (22) Approved for use by the Food and Drug Administration, 
     emergency contraception is a safe and effective way to 
     prevent unintended pregnancy after unprotected sex. It is 
     estimated that the use of emergency contraception could cut 
     the number of unintended pregnancies in half, thereby 
     reducing the need for abortion. New research confirms that 
     easier access to emergency contraceptives does not increase 
     sexual risk-taking or sexually transmitted diseases.
       (23) In 2000, 51,000 abortions were prevented by the use of 
     emergency contraception. Increased use of emergency 
     contraception accounted for up to 43 percent of the total 
     decline in abortions between 1994 and 2000.
       (24) A February 2004 CDC study of declining birth and 
     pregnancy rates among teens concluded that the reduction in 
     teen pregnancy between 1991 and 2001 suggests that increased 
     abstinence and increased use of contraceptives were equally 
     responsible for the decline. As such, it is critically 
     important that teens receive accurate, unbiased information 
     about contraception.
       (25) Thirteen percent of all teens give birth before age 
     20. 88 percent of births to teens age 17 or younger were 
     unintended. 24 percent of Hispanic females gave birth before 
     the age of 20. (CDC, December 2004).
       (26) The American Medical Association, the American Nurses 
     Association, the American Academy of Pediatrics, the American 
     College of Obstetricians and Gynecologists, the American 
     Public Health Association, and the Society for Adolescent 
     Medicine, support responsible sexuality education that 
     includes information about both abstinence and contraception.
       (27) Teens who receive sex education that includes 
     discussion of contraception are more likely than those who 
     receive abstinence-only messages to delay sex and to have 
     fewer partners and use contraceptives when they do become 
     sexually active.
       (28) Government-funded abstinence only programs are 
     precluded from discussing contraception except to talk about 
     failure rates. A December 2004 review of federally-funded 
     abstinence-only programs by the United States House of 
     Representatives Committee on Government Reform (Minority 
     Staff) found that many federally funded abstinence-only 
     program curricula distort public health data and misrepresent 
     the effectiveness of contraception. Information on the 
     effectiveness of condoms, in preventing pregnancy and 
     sexually transmitted diseases, including HIV, was often 
     highly inaccurate.

             TITLE I--TITLE X OF PUBLIC HEALTH SERVICE ACT

     SEC. 101. SHORT TITLE.

       This Act may be cited as the ``Title X Family Planning 
     Services Act of 2005''.

     SEC. 102. AUTHORIZATION OF APPROPRIATIONS.

       For the purpose of making grants and contracts under 
     section 1001 of the Public Health Service Act, there are 
     authorized to be appropriated $643,000,000 for fiscal year 
     2006, and such sums as may be necessary for each subsequent 
     fiscal year.

              TITLE II--FAMILY PLANNING STATE EMPOWERMENT

     SEC. 201. SHORT TITLE.

       This Act may be cited as the ``Family Planning State 
     Empowerment Act''.

     SEC. 202. STATE OPTION TO PROVIDE FAMILY PLANNING SERVICES 
                   AND SUPPLIES TO ADDITIONAL LOW-INCOME 
                   INDIVIDUALS.

       (a) In General.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended--
       (1) by redesignating section 1936 as section 1937; and
       (2) by inserting after section 1935 the following:


  ``state option to provide family planning services and supplies to 
                   additional low-income individuals

       ``Sec. 1936.
       ``(a) In General.--A State may elect (through a State plan 
     amendment) to make medical assistance described in section 
     1905(a)(4)(C) available to any individual not otherwise 
     eligible for such assistance--
       ``(1) whose family income does not exceed an income level 
     (specified by the State) that does not exceed the greatest 
     of--
       ``(A) 200 percent of the income official poverty line (as 
     defined by the Office of Management and Budget, and revised 
     annually in accordance with section 673(2) of the Community 
     Services Block Grant Act) applicable to a family of the size 
     involved;
       ``(B) in the case of a State that has in effect (as of the 
     date of the enactment of this section) a waiver under section 
     1115 to provide such medical assistance to individuals based 
     on their income level (expressed as a percent of the poverty 
     line), the eligibility income level as provided under such 
     waiver; or
       ``(C) the eligibility income level (expressed as a percent 
     of such poverty line) that has been specified under the plan 
     (including under section 1902(r)(2)), for eligibility of 
     pregnant women for medical assistance; and
       ``(2) at the option of the State, whose resources do not 
     exceed a resource level specified by the State, which level 
     is not more restrictive than the resource level applicable 
     under the waiver described in paragraph (1)(B) or to pregnant 
     women under paragraph (1)(C).
       ``(b) Flexibility.--A State may exercise the authority 
     under subsection (a) with respect to one or more classes of 
     individuals described in such subsection.''.
       (b) Conforming Amendment.--Section 1905(a) of such Act (42 
     U.S.C. 1396d(a)) is amended, in the matter before paragraph 
     (1)--
       (1) by striking ``and'' at the end of clause (xii);

[[Page S212]]

       (2) by adding ``and'' at the end of clause (xiii); and
       (3) by inserting after clause (xiii) the following new 
     clause:
       ``(xiv) individuals described in section 1935, but only 
     with respect to items and services described in paragraph 
     (4)(C),''.
       (c) Effective Date.--The amendments made by this section 
     apply to medical assistance provided on and after October 1, 
     2005.

     SEC. 203. STATE OPTION TO EXTEND THE PERIOD OF ELIGIBILITY 
                   FOR PROVISION OF FAMILY PLANNING SERVICES AND 
                   SUPPLIES.

       (a) In General.--Section 1902(e) of the Social Security Act 
     (42 U.S.C. 1396a(e)) is amended by adding at the end the 
     following new paragraph:
       ``(13) At the option of a State, the State plan may provide 
     that, in the case of an individual who was eligible for 
     medical assistance described in section 1905(a)(4)(C), but 
     who no longer qualifies for such assistance because of an 
     increase in income or resources or because of the expiration 
     of a post-partum period, the individual may remain eligible 
     for such assistance for such period as the State may specify, 
     but the period of extended eligibility under this paragraph 
     shall not exceed a continuous period of 24 months for any 
     individual. The State may apply the previous sentence to one 
     or more classes of individuals and may vary the period of 
     extended eligibility with respect to different classes of 
     individuals.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to medical assistance provided on and after October 1, 
     2005.

 TITLE III--EQUITY IN PRESCRIPTION INSURANCE AND CONTRACEPTIVE COVERAGE

     SEC. 301. SHORT TITLE.

       This Act may be cited as the ``Equity in Prescription 
     Insurance and Contraceptive Coverage Act''.

     SEC. 302. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY 
                   ACT OF 1974.

       (a) In General.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 714. STANDARDS RELATING TO BENEFITS FOR 
                   CONTRACEPTIVES.

       ``(a) Requirements for Coverage.--A group health plan, and 
     a health insurance issuer providing health insurance coverage 
     in connection with a group health plan, may not--
       ``(1) exclude or restrict benefits for prescription 
     contraceptive drugs or devices approved by the Food and Drug 
     Administration, or generic equivalents approved as 
     substitutable by the Food and Drug Administration, if such 
     plan or coverage provides benefits for other outpatient 
     prescription drugs or devices; or
       ``(2) exclude or restrict benefits for outpatient 
     contraceptive services if such plan or coverage provides 
     benefits for other outpatient services provided by a health 
     care professional (referred to in this section as `outpatient 
     health care services').
       ``(b) Prohibitions.--A group health plan, and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan, may not--
       ``(1) deny to an individual eligibility, or continued 
     eligibility, to enroll or to renew coverage under the terms 
     of the plan because of the individual's or enrollee's use or 
     potential use of items or services that are covered in 
     accordance with the requirements of this section;
       ``(2) provide monetary payments or rebates to a covered 
     individual to encourage such individual to accept less than 
     the minimum protections available under this section;
       ``(3) penalize or otherwise reduce or limit the 
     reimbursement of a health care professional because such 
     professional prescribed contraceptive drugs or devices, or 
     provided contraceptive services, described in subsection (a), 
     in accordance with this section; or
       ``(4) provide incentives (monetary or otherwise) to a 
     health care professional to induce such professional to 
     withhold from a covered individual contraceptive drugs or 
     devices, or contraceptive services, described in subsection 
     (a).
       ``(c) Rules of Construction.--
       ``(1) In general.--Nothing in this section shall be 
     construed--
       ``(A) as preventing a group health plan and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan from imposing 
     deductibles, coinsurance, or other cost-sharing or 
     limitations in relation to--
       ``(i) benefits for contraceptive drugs under the plan or 
     coverage, except that such a deductible, coinsurance, or 
     other cost-sharing or limitation for any such drug shall be 
     consistent with those imposed for other outpatient 
     prescription drugs otherwise covered under the plan or 
     coverage;
       ``(ii) benefits for contraceptive devices under the plan or 
     coverage, except that such a deductible, coinsurance, or 
     other cost-sharing or limitation for any such device shall be 
     consistent with those imposed for other outpatient 
     prescription devices otherwise covered under the plan or 
     coverage; and
       ``(iii) benefits for outpatient contraceptive services 
     under the plan or coverage, except that such a deductible, 
     coinsurance, or other cost-sharing or limitation for any such 
     service shall be consistent with those imposed for other 
     outpatient health care services otherwise covered under the 
     plan or coverage;
       ``(B) as requiring a group health plan and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan to cover experimental or 
     investigational contraceptive drugs or devices, or 
     experimental or investigational contraceptive services, 
     described in subsection (a), except to the extent that the 
     plan or issuer provides coverage for other experimental or 
     investigational outpatient prescription drugs or devices, or 
     experimental or investigational outpatient health care 
     services; or
       ``(C) as modifying, diminishing, or limiting the rights or 
     protections of an individual under any other Federal law.
       ``(2) Limitations.--As used in paragraph (1), the term 
     `limitation' includes--
       ``(A) in the case of a contraceptive drug or device, 
     restricting the type of health care professionals that may 
     prescribe such drugs or devices, utilization review 
     provisions, and limits on the volume of prescription drugs or 
     devices that may be obtained on the basis of a single 
     consultation with a professional; or
       ``(B) in the case of an outpatient contraceptive service, 
     restricting the type of health care professionals that may 
     provide such services, utilization review provisions, 
     requirements relating to second opinions prior to the 
     coverage of such services, and requirements relating to 
     preauthorizations prior to the coverage of such services.
       ``(d) Notice Under Group Health Plan.--The imposition of 
     the requirements of this section shall be treated as a 
     material modification in the terms of the plan described in 
     section 102(a)(1), for purposes of assuring notice of such 
     requirements under the plan, except that the summary 
     description required to be provided under the last sentence 
     of section 104(b)(1) with respect to such modification shall 
     be provided by not later than 60 days after the first day of 
     the first plan year in which such requirements apply.
       ``(e) Preemption.--Nothing in this section shall be 
     construed to preempt any provision of State law to the extent 
     that such State law establishes, implements, or continues in 
     effect any standard or requirement that provides coverage or 
     protections for participants or beneficiaries that are 
     greater than the coverage or protections provided under this 
     section.
       ``(f) Definition.--In this section, the term `outpatient 
     contraceptive services' means consultations, examinations, 
     procedures, and medical services, provided on an outpatient 
     basis and related to the use of contraceptive methods 
     (including natural family planning) to prevent an unintended 
     pregnancy.''.
       (b) Clerical Amendment.--The table of contents in section 1 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1001) is amended by inserting after the item relating 
     to section 713 the following:

``Sec. 714. Standards relating to benefits for contraceptives.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to plan years beginning on or after 
     January 1, 2006.

     SEC. 303. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT RELATING TO 
                   THE GROUP MARKET.

       (a) In General.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 2707. STANDARDS RELATING TO BENEFITS FOR 
                   CONTRACEPTIVES.

       ``(a) Requirements for Coverage.--A group health plan, and 
     a health insurance issuer providing health insurance coverage 
     in connection with a group health plan, may not--
       ``(1) exclude or restrict benefits for prescription 
     contraceptive drugs or devices approved by the Food and Drug 
     Administration, or generic equivalents approved as 
     substitutable by the Food and Drug Administration, if such 
     plan or coverage provides benefits for other outpatient 
     prescription drugs or devices; or
       ``(2) exclude or restrict benefits for outpatient 
     contraceptive services if such plan or coverage provides 
     benefits for other outpatient services provided by a health 
     care professional (referred to in this section as `outpatient 
     health care services').
       ``(b) Prohibitions.--A group health plan, and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan, may not--
       ``(1) deny to an individual eligibility, or continued 
     eligibility, to enroll or to renew coverage under the terms 
     of the plan because of the individual's or enrollee's use or 
     potential use of items or services that are covered in 
     accordance with the requirements of this section;
       ``(2) provide monetary payments or rebates to a covered 
     individual to encourage such individual to accept less than 
     the minimum protections available under this section;
       ``(3) penalize or otherwise reduce or limit the 
     reimbursement of a health care professional because such 
     professional prescribed contraceptive drugs or devices, or 
     provided contraceptive services, described in subsection (a), 
     in accordance with this section; or
       ``(4) provide incentives (monetary or otherwise) to a 
     health care professional to induce such professional to 
     withhold from covered individual contraceptive drugs or 
     devices, or contraceptive services, described in subsection 
     (a).
       ``(c) Rules of Construction.--
       ``(1) In general.--Nothing in this section shall be 
     construed--

[[Page S213]]

       ``(A) as preventing a group health plan and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan from imposing 
     deductibles, coinsurance, or other cost-sharing or 
     limitations in relation to--
       ``(i) benefits for contraceptive drugs under the plan or 
     coverage, except that such a deductible, coinsurance, or 
     other cost-sharing or limitation for any such drug shall be 
     consistent with those imposed for other outpatient 
     prescription drugs otherwise covered under the plan or 
     coverage;
       ``(ii) benefits for contraceptive devices under the plan or 
     coverage, except that such a deductible, coinsurance, or 
     other cost-sharing or limitation for any such device shall be 
     consistent with those imposed for other outpatient 
     prescription devices otherwise covered under the plan or 
     coverage; and
       ``(iii) benefits for outpatient contraceptive services 
     under the plan or coverage, except that such a deductible, 
     coinsurance, or other cost-sharing or limitation for any such 
     service shall be consistent with those imposed for other 
     outpatient health care services otherwise covered under the 
     plan or coverage;
       ``(B) as requiring a group health plan and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan to cover experimental or 
     investigational contraceptive drugs or devices, or 
     experimental or investigational contraceptive services, 
     described in subsection (a), except to the extent that the 
     plan or issuer provides coverage for other experimental or 
     investigational outpatient prescription drugs or devices, or 
     experimental or investigational outpatient health care 
     services; or
       ``(C) as modifying, diminishing, or limiting the rights or 
     protections of an individual under any other Federal law.
       ``(2) Limitations.--As used in paragraph (1), the term 
     `limitation' includes--
       ``(A) in the case of a contraceptive drug or device, 
     restricting the type of health care professionals that may 
     prescribe such drugs or devices, utilization review 
     provisions, and limits on the volume of prescription drugs or 
     devices that may be obtained on the basis of a single 
     consultation with a professional; or
       ``(B) in the case of an outpatient contraceptive service, 
     restricting the type of health care professionals that may 
     provide such services, utilization review provisions, 
     requirements relating to second opinions prior to the 
     coverage of such services, and requirements relating to 
     preauthorizations prior to the coverage of such services.
       ``(d) Notice.--A group health plan under this part shall 
     comply with the notice requirement under section 714(d) of 
     the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of this section as if such 
     section applied to such plan.
       ``(e) Preemption.--Nothing in this section shall be 
     construed to preempt any provision of State law to the extent 
     that such State law establishes, implements, or continues in 
     effect any standard or requirement that provides coverage or 
     protections for enrollees that are greater than the coverage 
     or protections provided under this section.
       ``(f) Definition.--In this section, the term `outpatient 
     contraceptive services' means consultations, examinations, 
     procedures, and medical services, provided on an outpatient 
     basis and related to the use of contraceptive methods 
     (including natural family planning) to prevent an unintended 
     pregnancy.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to group health plans for plan years 
     beginning on or after January 1, 2006.

     SEC. 304. AMENDMENT TO PUBLIC HEALTH SERVICE ACT RELATING TO 
                   THE INDIVIDUAL MARKET.

       (a) In General.--Part B of title XXVII of the Public Health 
     Service Act (42 U.S.C. 300gg-41 et seq.) is amended--
       (1) by redesignating the first subpart 3 (relating to other 
     requirements) as subpart 2; and
       (2) by adding at the end of subpart 2 the following:

     ``SEC. 2753. STANDARDS RELATING TO BENEFITS FOR 
                   CONTRACEPTIVES.

       ``The provisions of section 2707 shall apply to health 
     insurance coverage offered by a health insurance issuer in 
     the individual market in the same manner as they apply to 
     health insurance coverage offered by a health insurance 
     issuer in connection with a group health plan in the small or 
     large group market.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to health insurance coverage 
     offered, sold, issued, renewed, in effect, or operated in the 
     individual market on or after January 1, 2006.

      TITLE IV--EMERGENCY CONTRACEPTION EDUCATION AND INFORMATION

     SEC. 401. SHORT TITLE.

       This Act may be cited as the ``Emergency Contraception 
     Education Act''.

     SEC. 402. EMERGENCY CONTRACEPTION EDUCATION AND INFORMATION 
                   PROGRAMS.

       (a) Definitions.--For purposes of this section:
       (1) Emergency contraception.--The term ``emergency 
     contraception'' means a drug or device (as the terms are 
     defined in section 201 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 321)) or a drug regimen that is--
       (A) used after sexual relations;
       (B) prevents pregnancy, by preventing ovulation, 
     fertilization of an egg, or implantation of an egg in a 
     uterus; and
       (C) approved by the Food and Drug Administration.
       (2) Health care provider.--The term ``health care 
     provider'' means an individual who is licensed or certified 
     under State law to provide health care services and who is 
     operating within the scope of such license.
       (3) Institution of higher education.--The term 
     ``institution of higher education'' has the same meaning 
     given such term in section 1201(a) of the Higher Education 
     Act of 1965 (20 U.S.C. 1141(a)).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (b) Emergency Contraception Public Education Program.--
       (1) In general.--The Secretary, acting through the Director 
     of the Centers for Disease Control and Prevention, shall 
     develop and disseminate to the public information on 
     emergency contraception.
       (2) Dissemination.--The Secretary may disseminate 
     information under paragraph (1) directly or through 
     arrangements with nonprofit organizations, consumer groups, 
     institutions of higher education, Federal, State, or local 
     agencies, clinics and the media.
       (3) Information.--The information disseminated under 
     paragraph (1) shall include, at a minimum, a description of 
     emergency contraception, and an explanation of the use, 
     safety, efficacy, and availability of such contraception.
       (c) Emergency Contraception Information Program for Health 
     Care Providers.--
       (1) In general.--The Secretary, acting through the 
     Administrator of the Health Resources and Services 
     Administration and in consultation with major medical and 
     public health organizations, shall develop and disseminate to 
     health care providers information on emergency contraception.
       (2) Information.--The information disseminated under 
     paragraph (1) shall include, at a minimum--
       (A) information describing the use, safety, efficacy and 
     availability of emergency contraception;
       (B) a recommendation regarding the use of such 
     contraception in appropriate cases; and
       (C) information explaining how to obtain copies of the 
     information developed under subsection (b), for distribution 
     to the patients of the providers.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $10,000,000 for 
     each of the fiscal years 2006 through 2010.

         TITLE V--COMPASSIONATE ASSISTANCE FOR RAPE EMERGENCIES

     SEC. 501. SHORT TITLE.

       This Act may be cited as the ``Compassionate Assistance for 
     Rape Emergencies Act''.

     SEC. 502. SURVIVORS OF SEXUAL ASSAULT; PROVISION BY HOSPITALS 
                   OF EMERGENCY CONTRACEPTIVES WITHOUT CHARGE.

       (a) In General.--Federal funds may not be provided to a 
     hospital under any health-related program, unless the 
     hospital meets the conditions specified in subsection (b) in 
     the case of--
       (1) any woman who presents at the hospital and states that 
     she is a victim of sexual assault, or is accompanied by 
     someone who states she is a victim of sexual assault; and
       (2) any woman who presents at the hospital whom hospital 
     personnel have reason to believe is a victim of sexual 
     assault.
       (b) Assistance for Victims.--The conditions specified in 
     this subsection regarding a hospital and a woman described in 
     subsection (a) are as follows:
       (1) The hospital promptly provides the woman with medically 
     and factually accurate and unbiased written and oral 
     information about emergency contraception, including 
     information explaining that--
       (A) emergency contraception does not cause an abortion; and
       (B) emergency contraception is effective in most cases in 
     preventing pregnancy after unprotected sex.
       (2) The hospital promptly offers emergency contraception to 
     the woman, and promptly provides such contraception to her on 
     her request.
       (3) The information provided pursuant to paragraph (1) is 
     in clear and concise language, is readily comprehensible, and 
     meets such conditions regarding the provision of the 
     information in languages other than English as the Secretary 
     may establish.
       (4) The services described in paragraphs (1) through (3) 
     are not denied because of the inability of the woman or her 
     family to pay for the services.
       (c) Definitions.--For purposes of this section:
       (1) The term ``emergency contraception'' means a drug, drug 
     regimen, or device that is--
       (A) used postcoitally;
       (B) prevents pregnancy by delaying ovulation, preventing 
     fertilization of an egg, or preventing implantation of an egg 
     in a uterus; and
       (C) is approved by the Food and Drug Administration.
       (2) The term ``hospital'' has the meanings given such term 
     in title XVIII of the Social Security Act, including the 
     meaning applicable in such title for purposes of making 
     payments for emergency services to hospitals

[[Page S214]]

     that do not have agreements in effect under such title.
       (3) The term ``Secretary'' means the Secretary of Health 
     and Human Services.
       (4) The term ``sexual assault'' means coitus in which the 
     woman involved does not consent or lacks the legal capacity 
     to consent.
       (d) Effective Date; Agency Criteria.--This section takes 
     effect upon the expiration of the 180-day period beginning on 
     the date of enactment of this Act. Not later than 30 days 
     prior to the expiration of such period, the Secretary shall 
     publish in the Federal Register criteria for carrying out 
     this section.

                 TITLE VI--TEENAGE PREGNANCY PREVENTION

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``Preventing Teen Pregnancy 
     Act''.

     SEC. 602. TEENAGE PREGNANCY PREVENTION.

       Part P of title III of the Public Health Service Act (42 
     U.S.C. 280g et seq.) is amended by inserting after section 
     399N the following section:

     ``SEC. 399N-1. TEENAGE PREGNANCY PREVENTION GRANTS.

       ``(a) Authority.--The Secretary may award on a competitive 
     basis grants to public and private entities to establish or 
     expand teenage pregnancy prevention programs.
       ``(b) Grant Recipients.--Grant recipients under this 
     section may include State and local not-for-profit coalitions 
     working to prevent teenage pregnancy, State, local, and 
     tribal agencies, schools, entities that provide afterschool 
     programs, and community and faith-based groups.
       ``(c) Priority.--In selecting grant recipients under this 
     section, the Secretary shall give--
       ``(1) highest priority to applicants seeking assistance for 
     programs targeting communities or populations in which--
       ``(A) teenage pregnancy or birth rates are higher than the 
     corresponding State average; or
       ``(B) teenage pregnancy or birth rates are increasing; and
       ``(2) priority to applicants seeking assistance for 
     programs that--
       ``(A) will benefit underserved or at-risk populations such 
     as young males or immigrant youths; or
       ``(B) will take advantage of other available resources and 
     be coordinated with other programs that serve youth, such as 
     workforce development and after school programs.
       ``(d) Use of Funds.--Funds received by an entity as a grant 
     under this section shall be used for programs that--
       ``(1) replicate or substantially incorporate the elements 
     of one or more teenage pregnancy prevention programs that 
     have been proven (on the basis of rigorous scientific 
     research) to delay sexual intercourse or sexual activity, 
     increase condom or contraceptive use (without increasing 
     sexual activity), or reduce teenage pregnancy; and
       ``(2) incorporate one or more of the following strategies 
     for preventing teenage pregnancy: encouraging teenagers to 
     delay sexual activity; sex and HIV education; interventions 
     for sexually active teenagers; preventive health services; 
     youth development programs; service learning programs; and 
     outreach or media programs.
       ``(e) Complete Information.--Programs receiving funds under 
     this section that choose to provide information on HIV/AIDS 
     or contraception or both must provide information that is 
     complete and medically accurate.
       ``(f) Relation to Abstinence-Only Programs.--Funds under 
     this section are not intended for use by abstinence-only 
     education programs. Abstinence-only education programs that 
     receive Federal funds through the Maternal and Child Health 
     Block Grant, the Administration for Children and Families, 
     the Adolescent Family Life Program, and any other program 
     that uses the definition of `abstinence education' found in 
     section 510(b) of the Social Security Act are ineligible for 
     funding.
       ``(g) Applications.--Each entity seeking a grant under this 
     section shall submit an application to the Secretary at such 
     time and in such manner as the Secretary may require.
       ``(h) Matching Funds.--
       ``(1) In general.--The Secretary may not award a grant to 
     an applicant for a program under this section unless the 
     applicant demonstrates that it will pay, from funds derived 
     from non-Federal sources, at least 25 percent of the cost of 
     the program.
       ``(2) Applicant's share.--The applicant's share of the cost 
     of a program shall be provided in cash or in kind.
       ``(i) Supplementation of Funds.--An entity that receives 
     funds as a grant under this section shall use the funds to 
     supplement and not supplant funds that would otherwise be 
     available to the entity for teenage pregnancy prevention.
       ``(j) Evaluations.--
       ``(1) In general.--The Secretary shall--
       ``(A) conduct or provide for a rigorous evaluation of 10 
     percent of programs for which a grant is awarded under this 
     section;
       ``(B) collect basic data on each program for which a grant 
     is awarded under this section; and
       ``(C) upon completion of the evaluations referred to in 
     subparagraph (A), submit to the Congress a report that 
     includes a detailed statement on the effectiveness of grants 
     under this section.
       ``(2) Cooperation by grantees.--Each grant recipient under 
     this section shall provide such information and cooperation 
     as may be required for an evaluation under paragraph (1).
       ``(k) Definition.--For purposes of this section, the term 
     `rigorous scientific research' means based on a program 
     evaluation that:
       ``(1) Measured impact on sexual or contraceptive behavior, 
     pregnancy or childbearing.
       ``(2) Employed an experimental or quasi-experimental design 
     with well-constructed and appropriate comparison groups.
       ``(3) Had a sample size large enough (at least 100 in the 
     combined treatment and control group) and a follow-up 
     interval long enough (at least six months) to draw valid 
     conclusions about impact.
       ``(l) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $20,000,000 for fiscal year 2006, and such sums as may be 
     necessary for each subsequent fiscal year. In addition, there 
     are authorized to be appropriated for evaluations under 
     subsection (j) such sums as may be necessary for fiscal year 
     2006 and each subsequent fiscal year.''.

            TITLE VII--ACCURACY OF CONTRACEPTIVE INFORMATION

     SEC. 701. SHORT TITLE.

       This title may be cited as the ``Truth in Contraception 
     Act''.

     SEC. 702. ACCURACY OF CONTRACEPTIVE INFORMATION.

       Notwithstanding any other provision of law, any information 
     concerning the use of a contraceptive provided through any 
     federally funded sex education, family life education, 
     abstinence education, comprehensive health education, or 
     character education program shall be medically accurate and 
     shall include health benefits and failure rates relating to 
     the use of such contraceptive.
                                 ______
                                 
      By Mrs. HUTCHISON:
  S. 24. A bill to establish an emergency reserve fund to provide 
timely financial assistance in response to domestic disasters and 
emergencies; to the Committee on the Budget.
  Mrs. HUTCHISON. Mr. President, over the past decade, Congress has 
approved over $46 billion in disaster relief and emergency spending. 
This is an average of $4.6 billion a year. The majority of this 
funding--$34 billion--has been provided through supplemental bills, not 
subject to the normal appropriations process.
  Supporters of supplemental spending suggest it provides Congress 
flexibility to respond to emergencies and to priorities that did not 
receive the proper consideration during the budget cycle. While 
supplemental bills do offer flexibility, they are not always helpful 
for fiscal responsibility. Millions of dollars are put in emergency 
spending bills that should go through the regular budget process, 
adding more and more to the bottom line.
  America is at a critical time--we must be prepared to address 
domestic emergencies without increasing the deficit or being forced to 
fund non-emergency projects in order to release necessary funds. 
Supplemental spending circumvents budgetary enforcement mechanisms and 
can lead lawmakers to under-fund programs in the regular appropriations 
process, because they know they ultimately can get what is needed 
through a supplemental.
  Supplemental bills allocate funding for emergencies, and we have all 
witnessed, firsthand, how a natural disaster can impact a country 
severely. Merely because something is unforeseen does not mean we 
should not prepare. Congress needs to plan in a manner that is fiscally 
responsible and procedurally transparent.
  Today, I offer a bill to create an emergency fund under the office of 
the Secretary of the Treasury, in an interest bearing account, 
containing 1.2 percent of the annual non-defense domestic spending, or 
roughly $4.6 billion. This will be America's rainy day fund--a savings 
account ready for almost any potential unforeseen domestic emergencies.
  This account is not designed to eliminate the need for supplemental 
bills but rather lessen the need for them.
  Last year, in supplemental spending alone, Congress spent $2.5 
billion on disaster relief in America. Domestic discretionary 
supplemental bills enacted in response to natural disasters, such as 
hurricanes and earthquakes, rose steadily through the 1990s. Federal 
Emergency Management Agency, FEMA, was the second-largest recipient of 
supplemental spending during the 1990s. Supplemental appropriations for 
``non-natural'' disasters such as the Los Angeles riots in 1992 and the 
Oklahoma City bombing in 1995 as well as the September 11 terrorist 
attack have also demanded quick and efficient funding. History is 
teaching us a lesson; while we do not know what the

[[Page S215]]

emergencies will be, we can feel certain there will be something to 
which we will need to respond.
  Beyond the clear fiscal conservatism we need, I believe this rainy 
day fund would reduce the time it takes to respond to emergencies by 
giving Congress a more efficient, less political process. My bill would 
require the contingency fund to be expended before supplemental 
spending for domestic disasters can be pursued, with the exclusion of 
defense spending.
  As we seek to be more fiscally responsible, our next step forward 
should be this account, from which the funds we draw upon are planned 
for and set aside through the normal appropriations process. Our 
current system regularly underfunds FEMA and other agencies for 
emergencies, and this should end.
  As we prepare for the future, it is my goal that we save and prepare 
for the vital needs of our people should there be a domestic emergency. 
Recent events worldwide demand we be fiscally responsible and 
procedurally capable of this, our most important duty, the protection 
and safe-keeping of the American people.
                                 ______
                                 
      By Mr. CHAMBLISS:
  S. 25. A bill to promote freedom, fairness, and economic opportunity 
by repealing the income tax and other taxes, abolishing the Internal 
Revenue Service, and enacting a national sales tax to be administered 
primarily by the States; to the Committee on Finance.
  Mr. CHAMBLISS. Mr. President, I rise today to introduce the Fair Tax 
Act of 2005. This bill will promote freedom, fairness, and economic 
opportunity by repealing the Federal income tax and other taxes, 
abolishing the Internal Revenue Service, and enacting a national sales 
tax.
  The Fair Tax, which offers a national sales tax as the primary source 
of Federal revenue, is a necessary piece of tax reform that, should it 
pass, upon its inception would eliminate our current archaic and 
inefficient Tax Code and replace it with a simpler, fairer means of 
collecting revenue.
  Our antiquated Tax Code was implemented in 1913 and has since been 
modified numerous times. The Federal Tax Code in its present form is 
overly complicated and desperately in need of an overhaul. We are well 
beyond rectifying the unfairness in our current system by tinkering 
around the edges. All Americans are in dire need of unbiased, sweeping 
tax reform--and the Fair Tax provides just that.
  The Fair Tax Act of 2005 would repeal the individual income tax, the 
corporate income tax, capital gains taxes, all payroll taxes, the self-
employment tax and the estate and gift taxes in lieu of a 23 percent 
tax on the final sale of all goods and services. Elimination of these 
inefficient taxing mechanisms will not only bring about equality within 
in our tax system, it will also bring about simplicity.
  This bill will also provide for tax relief for business-to-business 
transactions. These transactions, including used-product transactions 
which have already been taxed, are not subject to the sales tax, 
thereby abrogating any double taxation.
  Social Security and Medicare benefits would remain untouched under 
the Fair Tax bill. There would be no financial reductions to either one 
of these vital programs. Instead, the source of the trust-fund revenue 
for these two programs would be replaced simply by sales-tax revenue 
instead of payroll-tax revenue.
  Lastly, under the Fair Tax Act, every American would receive a 
monthly rebate check equal to spending up to the Federal poverty level 
according to the Department of Health and Human Services guidelines. 
This rebate would ensure that no American pays taxes on the purchase of 
necessities.
  The Fair Tax creates a fairer, simpler code that allows every 
American the freedom to determine his or her own priorities and 
opportunities. Ronald Reagan once said, ``I believe we really can, 
however, say that God did give mankind virtually unlimited gifts to 
invent, produce and create. And for that reason alone, it would be 
wrong for governments to devise a tax structure or economic system that 
suppresses and denies those gifts.'' I couldn't agree more.
  And as long as we continue to operate under our current skewed Tax 
Code, we will continue to suppress and deny these unlimited gifts to 
the American people, who would otherwise thrive boundlessly under the 
Fair Tax.
                                 ______
                                 
      By Mrs. HUTCHISON (for herself, Mr. Frist, Ms. Cantwell, Mr. 
        Ensign, Mr. Alexander, and Mr. Cornyn):
  S. 27. A bill to amend the Internal Revenue Code of 1986 to make 
permanent the deduction of State and local general sales taxes; to the 
Committee on Finance.
  Mrs. HUTCHISON. Mr. President, I am pleased to introduce a bill to 
permanently correct an injustice in the tax code that has harmed 
citizens in many States of this great Nation.
  State and local governments have various alternatives for raising 
revenue. Some levy income taxes, some use sales taxes, and others use a 
combination of the two. The citizens who pay State and local income 
taxes have been able to offset some of what they pay by receiving a 
deduction on their federal taxes. Before 1986, taxpayers also had the 
ability to deduct their sales taxes.
  The philosophy behind these deductions is simple: people should not 
have to pay taxes on their taxes. The money that people must give to 
one level of government should not also be taxed by another level of 
government.
  Unfortunately, citizens of some States were treated differently after 
1986 when the deduction for State and local sales taxes was eliminated. 
This discriminated against those living in States, such as my home 
State of Texas, with no income taxes. It is important to remember the 
lack of an income tax does not mean citizens in these States do not pay 
State taxes; revenues are simply collected differently.
  It is unfair to give citizens from some States a deduction for the 
revenue they provide their State and local governments, while not doing 
the same for citizens from other States. Federal tax law should not 
treat people differently on the basis of State residence and differing 
tax collection methods, and it should not provide an incentive for 
States to establish income taxes over sales taxes.
  This discrepancy had a significant impact on Texas. According to the 
Texas Comptroller, the ability of taxpayers to deduct their sales taxes 
will lead to an additional $740 million staying in the hands of Texans 
each year, the creation of more than 16,500 new jobs, and the addition 
of $920 million in State economic activity.
  Last year, we took an important step by reinstating a sales tax 
deduction. As a result, everyone now has the opportunity to deduct 
either their State and local income taxes or sales taxes. For the 55 
million of us in the 7 States with a sales tax but no income tax, this 
means the tax code no longer discriminates against us. Unfortunately, 
the new deduction is only in effect for 2004 and 2005. We must act to 
prevent the inequity from returning.
  The legislation I am offering today will fix this problem for good by 
making the State and local sales tax deduction permanent. This will 
permanently end the discrimination suffered by my fellow Texans and 
citizens of other States who do not have the option of an income tax 
deduction.
  This legislation is about reestablishing equity to the tax code and 
defending the important principle of eliminating taxes on taxes. I hope 
my fellow Senators will support this effort.
  I ask unanimous consent that the test of the bill be printed in the 
Record. 
  Ms. CANTWELL. Mr. President, today I am joining my good friend the 
Senator from Texas, (Mrs. Hutchison), and the Senator from Tennessee, 
the Majority Leader, Mr. Frist, in legislation to permanently extend 
the State sales tax deduction. This bill aims to make permanent 
legislation that the Congress passed and the President signed into law 
last year on October 22, 2004 as a provision of the JOBS Act. It is a 
change to the tax code that I have worked to see enacted since coming 
to the U.S. Senate, and one I want to maintain.
  The JOBS Act reinstituted, for a period of 2 years, the ability of 
taxpayers to deduct State and local sales taxes just as they would 
State and local income taxes. Residents of States such as Washington 
that do not have income

[[Page S216]]

taxes, but have State sales taxes, had not been able to do this since 
the 1986.
  Make no mistake about it: permanently extending the sales tax 
deduction is a tax cut for Washington State taxpayers. Such a cut will 
strengthen our economy and fundamentally restore basic tax fairness.
  When the Federal income tax was first imposed in 1913, Congress 
allowed taxpayers to deduct State and local sales so they would not be 
taxed on once at the State level and then, again, at the Federal level 
in the same calendar year.
  In 1986, after 74 years of precedent, this tax equity abruptly ended. 
Taxpayers from States without income taxes were given a raw deal when 
Congress made a budgetary squeeze play and ended the tax deduction for 
State sales taxes.
  For States like Washington, where sales tax revenues are nearly 60 
percent of the State budget, the impact is immense. The loss to 
Washington State taxpayers in 2004 alone, is estimated to be $500 
million.
  Washington taxpayers waited 18 years to for the Federal government to 
correct the unique burden on them that amounts to requiring them to pay 
taxes twice on the same money. Now that the burden has been lifted for 
2 years, with thanks to this body and the President, Washington 
taxpayers are now looking for--and must have--permanence in the tax 
code with regard to their ability to deduct State and local sales taxes 
from their Federal income tax.
  As I mentioned, this issue has been a primary one for me on behalf of 
the people I serve. In fact, when I became a member of this body in the 
107th Congress, one of my first legislative acts was to cosponsor sales 
tax deduction legislation that at the time was introduced by the former 
Senator from Tennessee, Mr. Thompson. In the 108th Congress, Senator 
Hutchison and I carried the banner as the lead sponsors of similar 
legislation, the core of which we saw enacted into law for a 2-year 
period.
  I am here once again in the 109th Congress with the Senator from 
Texas, Mrs. Hutchison, on the heels of a victory for a two-year 
reprieve for our constituents, looking, now, for permanent equity in 
the tax code. I look forward to continuing to work with Senator 
Hutchison, as well as Senator Frist and others, in moving this sales 
tax deduction legislation forward in the coming months.
  Only by making the two-year law permanent will we be able to see to 
it that taxpayers from Washington State, or any other State, are not 
unfairly singled out to pay higher taxes.
  I urge prompt action on this measure.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mr. Leahy):
  S. 29. A bill to amend title 18, United States Code, to limit the 
misuse of social security numbers, to establish criminal penalties for 
such misuse, and for other purposes; to the Committee on the Judiciary.
  Mrs. FEINSTEN. Mr. President, I rise on behalf of myself and Senator 
Leahy to again introduce legislation to protect one of Americans' most 
valuable but vulnerable assets: Social Security numbers. This is the 
second Congress in a row that I have introduced this legislation, to 
restrict the sale and display of Social Security numbers.
  We have just begun the New Year, and unfortunately we can say with 
certainty that it will be another year in which millions of Americans 
will be victimized by identity theft, a crime so often linked to 
unprotected Social Security numbers. It is my hope that Congress will 
finally approve this legislation this year. For the benefit of all 
Californians and of all Americans, the Senate needs to take this step, 
to stop those who would do us harm by taking our very identities.
  The goal of this bill is straightforward--to get Social Security 
numbers out of the public domain, so that identity thieves can't get 
them. Toward this goal, this bill will do the following:
  The heart of this bill prohibits anyone from selling or displaying an 
individual's Social Security number to the general public without the 
individual's express consent.
  But in recognition that sometimes there are legitimate needs for 
Social Security numbers, the bill also makes exceptions. Perhaps the 
most important exception allows the sale of Social Security numbers 
between businesses, or between the government and businesses. The bill 
also makes exceptions for law enforcement, national security, 
compliance with other laws, and a few other areas.
  Additionally, this bill prohibits government entities from displaying 
Social Security numbers on public records that are posted on the 
Internet or in other electronic media after the legislation's effective 
date. It also prohibits governments from printing Social Security 
numbers on government checks.
  This bill also punishes people who fraudulently use Social Security 
numbers to obtain benefits that they do not deserve.
  Finally, this law has teeth to enforce its provisions. It gives the 
Attorney General the authority to issue civil penalties of up to $5,000 
for people who misuse Social Security numbers. It also creates a 
criminal penalty, of up to five years in prison, for anyone who obtains 
another person's Social Security number for the purpose of locating or 
identifying that individual with the intent to physically harm that 
person. And it lets the victims of identity theft sue in court to 
recover their loss from the person who causes it.
  Mr. President, the need for this bill should be clear. Theft of a 
Social Security number can be especially devastating, because that 
piece of information has become a de facto universal identifier in 
American society.
  Despite the widespread use of Social Security numbers, the General 
Accounting Office reported recently that ``No single federal law 
regulates the overall use or restricts the disclosure of SSNs by 
governments.'' (Source: Social Security numbers: SSNs are Widely Used 
by Government and Could be Better Protected, 2002 (Report Number GAO-
02-691T) at page 5). As a result, the use of Social Security numbers is 
regulated by an inconsistent and insufficient patchwork of state and 
federal laws, that often leaves the numbers in plain view of the whole 
world.
  One recent book on privacy in the United States documents how far the 
use of Social Security numbers has spread beyond its original purpose, 
when they were created in 1936, of tracking American workers' earnings 
and benefits. According to the book: ``The SSN began to be used for 
military personnel, legally admitted aliens, anyone receiving or 
applying for federal benefits, food stamps, school lunch program 
eligibility, draft registration, and federal loans. State and local 
governments, as well as private sector entities such as schools and 
banks, began to use SSNs as well--for drivers' licenses, birth 
certificates, blood donation, jury selection, worker's compensation, 
occupational licenses, and marriage licenses.'' (Source: Daniel Solove 
and Marc Rotenberg, Information Privacy Law, Aspen Publishers, 2003, at 
page 447-48.)
  It isn't surprising, then, that the sale of Social Security numbers 
is proceeding at a furious pace. According to the GAO in a report that 
it released earlier this year, ``Internet-based information resellers 
whose Web sites we accessed also obtain SSNs from their customers and 
scour public records and other publicly available information to 
provide the information to persons willing to pay a fee.'' (Source: 
Social Security numbers: Private Sector Entities Routinely Obtain and 
Use SSNs, and Laws Limit the Disclosure of this Information (2004, 
Report Number GAO-04-11, on Highlights Page).
  Governments also play a role in the widespread availability of Social 
Security numbers to the general public. According to another GAO 
report, issued just the other month in November 2004, ``State agencies 
in 41 States and the District of Columbia reported visible SSNs in at 
least one type of record.'' (Source: Government Could Do More to Reduce 
Display in Public Records and on Identity Cards, (November 2004, Report 
Number GAO-05-59, on Highlights Page). This affects about 94 percent of 
the country's population. The report continues that ``15 to 28 percent 
of the nation's 3,141 counties do place [Social Security numbers] on 
the Internet and this could affect millions of people.''
  If anyone who has doubts about the important role that this 
legislation will in protecting the identity of Americans, let me offer 
a few facts.

[[Page S217]]

  For the past four years, the Federal Trade Commission has ranked 
identity theft as its top consumer complaint. When the new numbers for 
2004 come out in early February, I will not be surprised if identity 
theft again ranks as the most common complaint.
  The most comprehensive survey of identity-theft victimization, a 
Federal Trade Commission report released in 2003, found that nearly 10 
million Americans had been victimized by identity theft in the previous 
year. The California Office of Privacy Protection estimates that 1.1 
million of those victims were Californians.
  A separate FTC report found California to have the third-highest rate 
of identity theft per capita in 2003, with the number of victims 
increasing by more than 28 percent from 2002.

  For anyone still unconvinced about the need for this law, let me 
offer a few specific examples of identity theft.
  In November, 2004, in my home state of California, a married couple--
Antonio and Rose Espino--pled guilty after stealing the identities of 
over 1,000 victims, and also stealing more than $8.8 million in 
fraudulent unemployment insurance. They obtained employer payroll lists 
that included names and Social Security numbers. (Source: ``San Joaquin 
couple plead guilty in identity-theft case,'' Fresno Bee, November 23, 
2004).
  In another case, Christopher Jones, a twenty-five-year-old employee 
at the University of North Carolina-Pembroke, stole approximately 3,000 
Social Security numbers through his job, handing out towels and other 
equipment at the university gym, and then tried to sell them in blocks 
of 1,000 on eBay. He stated in his advertisement: ``100 (one hundred 
Social Security # Numbers Obtain False Credit Cards Idenity Theft I 
Don't Care Bid Starts at a Dollar a Piece USPS Money Orders only all 
Different.''
  Similar behavior--using the Web to gather Social Secuirty numbers--
still continues. As The Washington Post reported last February, by 
using the common search engine Google on the Web, ``Search strings . . 
. often bring up spread sheets, credit card numbers, and Social 
Security numbers linked to a customer list.'' (Source: ``Online Search 
Engines Help Lift Cover of Privacy,'' The Washington Post, February 9, 
2004, at A1).
  I personally first became aware of the need for a law to restrict the 
sale and display of Social Security numbers about eight years ago, when 
one of my staff members sat me down and downloaded my own Social 
Security Number from the Internet in a matter of minutes.
  Unfortunately, Congress has done little to protect Social Security 
numbers since then. We still badly need a uniform law. Year after year, 
I have advocated and proposed such legislation that would restrict the 
public display and use of Social Security numbers:
  In the 106th Congress, I introduced S. 2966.
  In the 107th Congress, I introduced, S. 848 and S. 3100.
  In the 108th Congress, I introduced S. 228, S. 745, and S. 2801.
  None of these bills moved. Today, I stand before you yet again, to 
introduce for a seventh time a bill to take steps that will make it 
more difficult for thieves to steal this precious resource. This issue 
does not concern Republican government or Democratic government; this 
is an issue of good government.
  Last year, the President signed into law a bill that I helped to 
author, to increase penalties for those who steal the identities of 
others. But punishment is not enough. We need to stop identity theft 
from occurring in the first place. This information should have been 
under lock and key long ago. It is time for us to act. Thank you Mr. 
President.
  I ask for unanimous consent that the text of the legislation directly 
follow this statement in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 29

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Social 
     Security Number Misuse Prevention Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents
Sec. 2. Findings
Sec. 3. Prohibition of the display, sale, or purchase of social 
              security numbers
Sec. 4. Application of prohibition of the display, sale, or purchase of 
              social security numbers to public records
Sec. 5. Rulemaking authority of the Attorney General
Sec. 6. Treatment of social security numbers on government documents
Sec. 7. Limits on personal disclosure of a social security number for 
              consumer transactions
Sec. 8. Extension of civil monetary penalties for misuse of a social 
              security number
Sec. 9. Criminal penalties for the misuse of a social security number
Sec. 10. Civil actions and civil penalties
Sec. 11. Federal injunctive authority

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The inappropriate display, sale, or purchase of social 
     security numbers has contributed to a growing range of 
     illegal activities, including fraud, identity theft, and, in 
     some cases, stalking and other violent crimes.
       (2) While financial institutions, health care providers, 
     and other entities have often used social security numbers to 
     confirm the identity of an individual, the general display to 
     the public, sale, or purchase of these numbers has been used 
     to commit crimes, and also can result in serious invasions of 
     individual privacy.
       (3) The Federal Government requires virtually every 
     individual in the United States to obtain and maintain a 
     social security number in order to pay taxes, to qualify for 
     social security benefits, or to seek employment. An 
     unintended consequence of these requirements is that social 
     security numbers have become one of the tools that can be 
     used to facilitate crime, fraud, and invasions of the privacy 
     of the individuals to whom the numbers are assigned. Because 
     the Federal Government created and maintains this system, and 
     because the Federal Government does not permit individuals to 
     exempt themselves from those requirements, it is appropriate 
     for the Federal Government to take steps to stem the abuse of 
     social security numbers.
       (4) The display, sale, or purchase of social security 
     numbers in no way facilitates uninhibited, robust, and wide-
     open public debate, and restrictions on such display, sale, 
     or purchase would not affect public debate.
       (5) No one should seek to profit from the display, sale, or 
     purchase of social security numbers in circumstances that 
     create a substantial risk of physical, emotional, or 
     financial harm to the individuals to whom those numbers are 
     assigned.
       (6) Consequently, this Act provides each individual that 
     has been assigned a social security number some degree of 
     protection from the display, sale, and purchase of that 
     number in any circumstance that might facilitate unlawful 
     conduct.

     SEC. 3. PROHIBITION OF THE DISPLAY, SALE, OR PURCHASE OF 
                   SOCIAL SECURITY NUMBERS.

       (a) Prohibition.--
       (1) In general.--Chapter 47 of title 18, United States 
     Code, is amended by inserting after section 1028 the 
     following:

     ``Sec. 1028A. Prohibition of the display, sale, or purchase 
       of social security numbers

       ``(a) Definitions.--In this section:
       ``(1) Display.--The term `display' means to intentionally 
     communicate or otherwise make available (on the Internet or 
     in any other manner) to the general public an individual's 
     social security number.
       ``(2) Person.--The term `person' means any individual, 
     partnership, corporation, trust, estate, cooperative, 
     association, or any other entity.
       ``(3) Purchase.--The term `purchase' means providing 
     directly or indirectly, anything of value in exchange for a 
     social security number.
       ``(4) Sale.--The term `sale' means obtaining, directly or 
     indirectly, anything of value in exchange for a social 
     security number.
       ``(5) State.--The term `State' means any State of the 
     United States, the District of Columbia, Puerto Rico, the 
     Northern Mariana Islands, the United States Virgin Islands, 
     Guam, American Samoa, and any territory or possession of the 
     United States.
       ``(b) Limitation on Display.--Except as provided in section 
     1028B, no person may display any individual's social security 
     number to the general public without the affirmatively 
     expressed consent of the individual.
       ``(c) Limitation on Sale or Purchase.--Except as otherwise 
     provided in this section, no person may sell or purchase any 
     individual's social security number without the affirmatively 
     expressed consent of the individual.
       ``(d) Prerequisites for Consent.--In order for consent to 
     exist under subsection (b) or (c), the person displaying or 
     seeking to display, selling or attempting to sell, or 
     purchasing or attempting to purchase, an individual's social 
     security number shall--
       ``(1) inform the individual of the general purpose for 
     which the number will be used, the types of persons to whom 
     the number may be available, and the scope of transactions 
     permitted by the consent; and
       ``(2) obtain the affirmatively expressed consent 
     (electronically or in writing) of the individual.
       ``(e) Exceptions.--Nothing in this section shall be 
     construed to prohibit or limit the

[[Page S218]]

     display, sale, or purchase of a social security number--
       ``(1) required, authorized, or excepted under any Federal 
     law;
       ``(2) for a public health purpose, including the protection 
     of the health or safety of an individual in an emergency 
     situation;
       ``(3) for a national security purpose;
       ``(4) for a law enforcement purpose, including the 
     investigation of fraud and the enforcement of a child support 
     obligation;
       ``(5) if the display, sale, or purchase of the number is 
     for a use occurring as a result of an interaction between 
     businesses, governments, or business and government 
     (regardless of which entity initiates the interaction), 
     including, but not limited to--
       ``(A) the prevention of fraud (including fraud in 
     protecting an employee's right to employment benefits);
       ``(B) the facilitation of credit checks or the facilitation 
     of background checks of employees, prospective employees, or 
     volunteers;
       ``(C) the retrieval of other information from other 
     businesses, commercial enterprises, government entities, or 
     private nonprofit organizations; or
       ``(D) when the transmission of the number is incidental to, 
     and in the course of, the sale, lease, franchising, or merger 
     of all, or a portion of, a business;
       ``(6) if the transfer of such a number is part of a data 
     matching program involving a Federal, State, or local agency; 
     or
       ``(7) if such number is required to be submitted as part of 
     the process for applying for any type of Federal, State, or 
     local government benefit or program;

     except that, nothing in this subsection shall be construed as 
     permitting a professional or commercial user to display or 
     sell a social security number to the general public.
       ``(f) Limitation.--Nothing in this section shall prohibit 
     or limit the display, sale, or purchase of social security 
     numbers as permitted under title V of the Gramm-Leach-Bliley 
     Act, or for the purpose of affiliate sharing as permitted 
     under the Fair Credit Reporting Act, except that no entity 
     regulated under such Acts may make social security numbers 
     available to the general public, as may be determined by the 
     appropriate regulators under such Acts. For purposes of this 
     subsection, the general public shall not include affiliates 
     or unaffiliated third-party business entities as may be 
     defined by the appropriate regulators.''.
       (2) Conforming amendment.--The chapter analysis for chapter 
     47 of title 18, United States Code, is amended by inserting 
     after the item relating to section 1028 the following:

``1028A. Prohibition of the display, sale, or purchase of social 
              security numbers''.

       (b) Study; Report.--
       (1) In general.--The Attorney General shall conduct a study 
     and prepare a report on all of the uses of social security 
     numbers permitted, required, authorized, or excepted under 
     any Federal law. The report shall include a detailed 
     description of the uses allowed as of the date of enactment 
     of this Act, the impact of such uses on privacy and data 
     security, and shall evaluate whether such uses should be 
     continued or discontinued by appropriate legislative action.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General shall report to 
     Congress findings under this subsection. The report shall 
     include such recommendations for legislation based on 
     criteria the Attorney General determines to be appropriate.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date that is 30 days after the date 
     on which the final regulations promulgated under section 5 
     are published in the Federal Register.

     SEC. 4. APPLICATION OF PROHIBITION OF THE DISPLAY, SALE, OR 
                   PURCHASE OF SOCIAL SECURITY NUMBERS TO PUBLIC 
                   RECORDS.

       (a) Public Records Exception.--
       (1) In general.--Chapter 47 of title 18, United States Code 
     (as amended by section 3(a)(1)), is amended by inserting 
     after section 1028A the following:

     ``Sec. 1028B. Display, sale, or purchase of public records 
       containing social security numbers

       ``(a) Definition.--In this section, the term `public 
     record' means any governmental record that is made available 
     to the general public.
       ``(b) In General.--Except as provided in subsections (c), 
     (d), and (e), section 1028A shall not apply to a public 
     record.
       ``(c) Public Records on the Internet or in an Electronic 
     Medium.--
       ``(1) In general.--Section 1028A shall apply to any public 
     record first posted onto the Internet or provided in an 
     electronic medium by, or on behalf of a government entity 
     after the date of enactment of this section, except as 
     limited by the Attorney General in accordance with paragraph 
     (2).
       ``(2) Exception for government entities already placing 
     public records on the internet or in electronic form.--Not 
     later than 60 days after the date of enactment of this 
     section, the Attorney General shall issue regulations 
     regarding the applicability of section 1028A to any record of 
     a category of public records first posted onto the Internet 
     or provided in an electronic medium by, or on behalf of a 
     government entity prior to the date of enactment of this 
     section. The regulations will determine which individual 
     records within categories of records of these government 
     entities, if any, may continue to be posted on the Internet 
     or in electronic form after the effective date of this 
     section. In promulgating these regulations, the Attorney 
     General may include in the regulations a set of procedures 
     for implementing the regulations and shall consider the 
     following:
       ``(A) The cost and availability of technology available to 
     a governmental entity to redact social security numbers from 
     public records first provided in electronic form after the 
     effective date of this section.
       ``(B) The cost or burden to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments of complying with 
     section 1028A with respect to such records.
       ``(C) The benefit to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments if the Attorney General 
     were to determine that section 1028A should apply to such 
     records.

     Nothing in the regulation shall permit a public entity to 
     post a category of public records on the Internet or in 
     electronic form after the effective date of this section if 
     such category had not been placed on the Internet or in 
     electronic form prior to such effective date.
       ``(d) Harvested Social Security Numbers.--Section 1028A 
     shall apply to any public record of a government entity which 
     contains social security numbers extracted from other public 
     records for the purpose of displaying or selling such numbers 
     to the general public.
       ``(e) Attorney General Rulemaking on Paper Records.--
       ``(1) In general.--Not later than 60 days after the date of 
     enactment of this section, the Attorney General shall 
     determine the feasibility and advisability of applying 
     section 1028A to the records listed in paragraph (2) when 
     they appear on paper or on another nonelectronic medium. If 
     the Attorney General deems it appropriate, the Attorney 
     General may issue regulations applying section 1028A to such 
     records.
       ``(2) List of paper and other nonelectronic records.--The 
     records listed in this paragraph are as follows:
       ``(A) Professional or occupational licenses.
       ``(B) Marriage licenses.
       ``(C) Birth certificates.
       ``(D) Death certificates.
       ``(E) Other short public documents that display a social 
     security number in a routine and consistent manner on the 
     face of the document.
       ``(3) Criteria for attorney general review.--In determining 
     whether section 1028A should apply to the records listed in 
     paragraph (2), the Attorney General shall consider the 
     following:
       ``(A) The cost or burden to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments of complying with 
     section 1028A.
       ``(B) The benefit to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments if the Attorney General 
     were to determine that section 1028A should apply to such 
     records.''.
       (2) Conforming amendment.--The chapter analysis for chapter 
     47 of title 18, United States Code (as amended by section 
     3(a)(2)), is amended by inserting after the item relating to 
     section 1028A the following:

``1028B. Display, sale, or purchase of public records containing social 
              security numbers''.

       (b) Study and Report on Social Security Numbers in Public 
     Records.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study and prepare a report on social security 
     numbers in public records. In developing the report, the 
     Comptroller General shall consult with the Administrative 
     Office of the United States Courts, State and local 
     governments that store, maintain, or disseminate public 
     records, and other stakeholders, including members of the 
     private sector who routinely use public records that contain 
     social security numbers.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to Congress a report on the study 
     conducted under paragraph (1). The report shall include a 
     detailed description of the activities and results of the 
     study and recommendations for such legislative action as the 
     Comptroller General considers appropriate. The report, at a 
     minimum, shall include--
       (A) a review of the uses of social security numbers in non-
     federal public records;
       (B) a review of the manner in which public records are 
     stored (with separate reviews for both paper records and 
     electronic records);
       (C) a review of the advantages or utility of public records 
     that contain social security numbers, including the utility 
     for law enforcement, and for the promotion of homeland 
     security;
       (D) a review of the disadvantages or drawbacks of public 
     records that contain social security numbers, including 
     criminal activity, compromised personal privacy, or threats 
     to homeland security;
       (E) the costs and benefits for State and local governments 
     of removing social security numbers from public records, 
     including a review of current technologies and procedures for 
     removing social security numbers from public records; and

[[Page S219]]

       (F) an assessment of the benefits and costs to businesses, 
     their customers, and the general public of prohibiting the 
     display of social security numbers on public records (with 
     separate assessments for both paper records and electronic 
     records).
       (c) Effective Date.--The prohibition with respect to 
     electronic versions of new classes of public records under 
     section 1028B(b) of title 18, United States Code (as added by 
     subsection (a)(1)) shall not take effect until the date that 
     is 60 days after the date of enactment of this Act.

     SEC. 5. RULEMAKING AUTHORITY OF THE ATTORNEY GENERAL.

       (a) In General.--Except as provided in subsection (b), the 
     Attorney General may prescribe such rules and regulations as 
     the Attorney General deems necessary to carry out the 
     provisions of section 1028A(e)(5) of title 18, United States 
     Code (as added by section 3(a)(1)).
       (b) Display, Sale, or Purchase Rulemaking With Respect to 
     Interactions Between Businesses, Governments, or Business and 
     Government.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General, in consultation 
     with the Commissioner of Social Security, the Chairman of the 
     Federal Trade Commission, and such other heads of Federal 
     agencies as the Attorney General determines appropriate, 
     shall conduct such rulemaking procedures in accordance with 
     subchapter II of chapter 5 of title 5, United States Code, as 
     are necessary to promulgate regulations to implement and 
     clarify the uses occurring as a result of an interaction 
     between businesses, governments, or business and government 
     (regardless of which entity initiates the interaction) 
     permitted under section 1028A(e)(5) of title 18, United 
     States Code (as added by section 3(a)(1)).
       (2) Factors to be considered.--In promulgating the 
     regulations required under paragraph (1), the Attorney 
     General shall, at a minimum, consider the following:
       (A) The benefit to a particular business, to customers of 
     the business, and to the general public of the display, sale, 
     or purchase of an individual's social security number.
       (B) The costs that businesses, customers of businesses, and 
     the general public may incur as a result of prohibitions on 
     the display, sale, or purchase of social security numbers.
       (C) The risk that a particular business practice will 
     promote the use of a social security number to commit fraud, 
     deception, or crime.
       (D) The presence of adequate safeguards, procedures, and 
     technologies to prevent--
       (i) misuse of social security numbers by employees within a 
     business; and
       (ii) misappropriation of social security numbers by the 
     general public, while permitting internal business uses of 
     such numbers.
       (E) The presence of procedures to prevent identity thieves, 
     stalkers, and other individuals with ill intent from posing 
     as legitimate businesses to obtain social security numbers.
       (F) The impact of such uses on privacy.

     SEC. 6. TREATMENT OF SOCIAL SECURITY NUMBERS ON GOVERNMENT 
                   DOCUMENTS.

       (a) Prohibition of Use of Social Security Account Numbers 
     on Checks Issued for Payment by Governmental Agencies.--
       (1) In general.--Section 205(c)(2)(C) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)) is amended by adding at 
     the end the following:
       ``(x) No Federal, State, or local agency may display the 
     social security account number of any individual, or any 
     derivative of such number, on any check issued for any 
     payment by the Federal, State, or local agency.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply with respect to violations of section 
     205(c)(2)(C)(x) of the Social Security Act (42 U.S.C. 
     405(c)(2)(C)(x)), as added by paragraph (1), occurring after 
     the date that is 3 years after the date of enactment of this 
     Act.
       (b) Prohibition of Inmate Access to Social Security Account 
     Numbers.--
       (1) In general.--Section 205(c)(2)(C) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)) (as amended by 
     subsection (b)) is amended by adding at the end the 
     following:
       ``(xi) No Federal, State, or local agency may employ, or 
     enter into a contract for the use or employment of, prisoners 
     in any capacity that would allow such prisoners access to the 
     social security account numbers of other individuals. For 
     purposes of this clause, the term `prisoner' means an 
     individual confined in a jail, prison, or other penal 
     institution or correctional facility pursuant to such 
     individual's conviction of a criminal offense.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply with respect to employment of prisoners, or entry 
     into contract with prisoners, after the date that is 1 year 
     after the date of enactment of this Act.

     SEC. 7. LIMITS ON PERSONAL DISCLOSURE OF A SOCIAL SECURITY 
                   NUMBER FOR CONSUMER TRANSACTIONS.

       (a) In General.--Part A of title XI of the Social Security 
     Act (42 U.S.C. 1301 et seq.) is amended by adding at the end 
     the following:

     ``SEC. 1150A. LIMITS ON PERSONAL DISCLOSURE OF A SOCIAL 
                   SECURITY NUMBER FOR CONSUMER TRANSACTIONS.

       ``(a) In General.--A commercial entity may not require an 
     individual to provide the individual's social security number 
     when purchasing a commercial good or service or deny an 
     individual the good or service for refusing to provide that 
     number except--
       ``(1) for any purpose relating to--
       ``(A) obtaining a consumer report for any purpose permitted 
     under the Fair Credit Reporting Act;
       ``(B) a background check of the individual conducted by a 
     landlord, lessor, employer, voluntary service agency, or 
     other entity as determined by the Attorney General;
       ``(C) law enforcement; or
       ``(D) a Federal, State, or local law requirement; or
       ``(2) if the social security number is necessary to verify 
     the identity of the consumer to effect, administer, or 
     enforce the specific transaction requested or authorized by 
     the consumer, or to prevent fraud.
       ``(b) Application of Civil Money Penalties.--A violation of 
     this section shall be deemed to be a violation of section 
     1129(a)(3)(F).
       ``(c) Application of Criminal Penalties.--A violation of 
     this section shall be deemed to be a violation of section 
     208(a)(8).
       ``(d) Limitation on Class Actions.--No class action 
     alleging a violation of this section shall be maintained 
     under this section by an individual or any private party in 
     Federal or State court.
       ``(e) State Attorney General Enforcement.--
       ``(1) In general.--
       ``(A) Civil actions.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State has been or is threatened or 
     adversely affected by the engagement of any person in a 
     practice that is prohibited under this section, the State, as 
     parens patriae, may bring a civil action on behalf of the 
     residents of the State in a district court of the United 
     States of appropriate jurisdiction to--
       ``(i) enjoin that practice;
       ``(ii) enforce compliance with such section;
       ``(iii) obtain damages, restitution, or other compensation 
     on behalf of residents of the State; or
       ``(iv) obtain such other relief as the court may consider 
     appropriate.
       ``(B) Notice.--
       ``(i) In general.--Before filing an action under 
     subparagraph (A), the attorney general of the State involved 
     shall provide to the Attorney General--

       ``(I) written notice of the action; and
       ``(II) a copy of the complaint for the action.

       ``(ii) Exemption.--

       ``(I) In general.--Clause (i) shall not apply with respect 
     to the filing of an action by an attorney general of a State 
     under this subsection, if the State attorney general 
     determines that it is not feasible to provide the notice 
     described in such subparagraph before the filing of the 
     action.
       ``(II) Notification.--With respect to an action described 
     in subclause (I), the attorney general of a State shall 
     provide notice and a copy of the complaint to the Attorney 
     General at the same time as the State attorney general files 
     the action.

       ``(2) Intervention.--
       ``(A) In general.--On receiving notice under paragraph 
     (1)(B), the Attorney General shall have the right to 
     intervene in the action that is the subject of the notice.
       ``(B) Effect of intervention.--If the Attorney General 
     intervenes in the action under paragraph (1), the Attorney 
     General shall have the right to be heard with respect to any 
     matter that arises in that action.
       ``(3) Construction.--For purposes of bringing any civil 
     action under paragraph (1), nothing in this section shall be 
     construed to prevent an attorney general of a State from 
     exercising the powers conferred on such attorney general by 
     the laws of that State to--
       ``(A) conduct investigations;
       ``(B) administer oaths or affirmations; or
       ``(C) compel the attendance of witnesses or the production 
     of documentary and other evidence.
       ``(4) Actions by the attorney general of the united 
     states.--In any case in which an action is instituted by or 
     on behalf of the Attorney General for violation of a practice 
     that is prohibited under this section, no State may, during 
     the pendency of that action, institute an action under 
     paragraph (1) against any defendant named in the complaint in 
     that action for violation of that practice.
       ``(5) Venue; service of process.--
       ``(A) Venue.--Any action brought under paragraph (1) may be 
     brought in the district court of the United States that meets 
     applicable requirements relating to venue under section 1391 
     of title 28, United States Code.
       ``(B) Service of process.--In an action brought under 
     paragraph (1), process may be served in any district in which 
     the defendant--
       ``(i) is an inhabitant; or
       ``(ii) may be found.
       ``(f) Sunset.--This section shall not apply on or after the 
     date that is 6 years after the effective date of this 
     section.''.
       (b) Evaluation and Report.--Not later than the date that is 
     6 years and 6 months after the date of enactment of this Act, 
     the Attorney General, in consultation with the chairman of 
     the Federal Trade Commission, shall issue a report evaluating 
     the effectiveness and efficiency of section 1150A of the 
     Social Security Act (as added by subsection (a)) and shall 
     make recommendations to Congress as to any legislative action 
     determined to be necessary or advisable with respect to such 
     section, including a recommendation regarding whether to 
     reauthorize such section.

[[Page S220]]

       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to requests to provide a social security number 
     occurring after the date that is 1 year after the date of 
     enactment of this Act.

     SEC. 8. EXTENSION OF CIVIL MONETARY PENALTIES FOR MISUSE OF A 
                   SOCIAL SECURITY NUMBER.

       (a) Treatment of Withholding of Material Facts.--
       (1) Civil penalties.--The first sentence of section 
     1129(a)(1) of the Social Security Act (42 U.S.C. 1320a-
     8(a)(1)) is amended--
       (A) by striking ``who'' and inserting ``who--'';
       (B) by striking ``makes'' and all that follows through 
     ``shall be subject to'' and inserting the following:
       ``(A) makes, or causes to be made, a statement or 
     representation of a material fact, for use in determining any 
     initial or continuing right to or the amount of monthly 
     insurance benefits under title II or benefits or payments 
     under title VIII or XVI, that the person knows or should know 
     is false or misleading;
       ``(B) makes such a statement or representation for such use 
     with knowing disregard for the truth; or
       ``(C) omits from a statement or representation for such 
     use, or otherwise withholds disclosure of, a fact which the 
     individual knows or should know is material to the 
     determination of any initial or continuing right to or the 
     amount of monthly insurance benefits under title II or 
     benefits or payments under title VIII or XVI and the 
     individual knows, or should know, that the statement or 
     representation with such omission is false or misleading or 
     that the withholding of such disclosure is misleading, shall 
     be subject to'';
       (C) by inserting ``or each receipt of such benefits while 
     withholding disclosure of such fact'' after ``each such 
     statement or representation'';
       (D) by inserting ``or because of such withholding of 
     disclosure of a material fact'' after ``because of such 
     statement or representation''; and
       (E) by inserting ``or such a withholding of disclosure'' 
     after ``such a statement or representation''.
       (2) Administrative procedure for imposing penalties.--The 
     first sentence of section 1129A(a) of the Social Security Act 
     (42 U.S.C. 1320a-8a(a)) is amended--
       (A) by striking ``who'' and inserting ``who--''; and
       (B) by striking ``makes'' and all that follows through 
     ``shall be subject to'' and inserting the following:
       ``(1) makes, or causes to be made, a statement or 
     representation of a material fact, for use in determining any 
     initial or continuing right to or the amount of monthly 
     insurance benefits under title II or benefits or payments 
     under title VIII or XVI, that the person knows or should know 
     is false or misleading;
       ``(2) makes such a statement or representation for such use 
     with knowing disregard for the truth; or
       ``(3) omits from a statement or representation for such 
     use, or otherwise withholds disclosure of, a fact which the 
     individual knows or should know is material to the 
     determination of any initial or continuing right to or the 
     amount of monthly insurance benefits under title II or 
     benefits or payments under title VIII or XVI and the 
     individual knows, or should know, that the statement or 
     representation with such omission is false or misleading or 
     that the withholding of such disclosure is misleading, shall 
     be subject to''.
       (b) Application of Civil Money Penalties to Elements of 
     Criminal Violations.--Section 1129(a) of the Social Security 
     Act (42 U.S.C. 1320a-8(a)), as amended by subsection (a)(1), 
     is amended--
       (1) by redesignating paragraph (2) as paragraph (4);
       (2) by redesignating the last sentence of paragraph (1) as 
     paragraph (2) and inserting such paragraph after paragraph 
     (1); and
       (3) by inserting after paragraph (2) (as so redesignated) 
     the following:
       ``(3) Any person (including an organization, agency, or 
     other entity) who--
       ``(A) uses a social security account number that such 
     person knows or should know has been assigned by the 
     Commissioner of Social Security (in an exercise of authority 
     under section 205(c)(2) to establish and maintain records) on 
     the basis of false information furnished to the Commissioner 
     by any person;
       ``(B) falsely represents a number to be the social security 
     account number assigned by the Commissioner of Social 
     Security to any individual, when such person knows or should 
     know that such number is not the social security account 
     number assigned by the Commissioner to such individual;
       ``(C) knowingly alters a social security card issued by the 
     Commissioner of Social Security, or possesses such a card 
     with intent to alter it;
       ``(D) knowingly displays, sells, or purchases a card that 
     is, or purports to be, a card issued by the Commissioner of 
     Social Security, or possesses such a card with intent to 
     display, purchase, or sell it;
       ``(E) counterfeits a social security card, or possesses a 
     counterfeit social security card with intent to display, 
     sell, or purchase it;
       ``(F) discloses, uses, compels the disclosure of, or 
     knowingly displays, sells, or purchases the social security 
     account number of any person in violation of the laws of the 
     United States;
       ``(G) with intent to deceive the Commissioner of Social 
     Security as to such person's true identity (or the true 
     identity of any other person) furnishes or causes to be 
     furnished false information to the Commissioner with respect 
     to any information required by the Commissioner in connection 
     with the establishment and maintenance of the records 
     provided for in section 205(c)(2);
       ``(H) offers, for a fee, to acquire for any individual, or 
     to assist in acquiring for any individual, an additional 
     social security account number or a number which purports to 
     be a social security account number; or
       ``(I) being an officer or employee of a Federal, State, or 
     local agency in possession of any individual's social 
     security account number, willfully acts or fails to act so as 
     to cause a violation by such agency of clause (vi)(II) or (x) 
     of section 205(c)(2)(C), shall be subject to, in addition to 
     any other penalties that may be prescribed by law, a civil 
     money penalty of not more than $5,000 for each violation. 
     Such person shall also be subject to an assessment, in lieu 
     of damages sustained by the United States resulting from such 
     violation, of not more than twice the amount of any benefits 
     or payments paid as a result of such violation.''.
       (c) Clarification of Treatment of Recovered Amounts.--
     Section 1129(e)(2)(B) of the Social Security Act (42 U.S.C. 
     1320a-8(e)(2)(B)) is amended by striking ``In the case of 
     amounts recovered arising out of a determination relating to 
     title VIII or XVI,'' and inserting ``In the case of any other 
     amounts recovered under this section,''.
       (d) Conforming Amendments.--
       (1) Section 1129(b)(3)(A) of the Social Security Act (42 
     U.S.C. 1320a-8(b)(3)(A)) is amended by striking ``charging 
     fraud or false statements''.
       (2) Section 1129(c)(1) of the Social Security Act (42 
     U.S.C. 1320a-8(c)(1)) is amended by striking ``and 
     representations'' and inserting ``, representations, or 
     actions''.
       (3) Section 1129(e)(1)(A) of the Social Security Act (42 
     U.S.C. 1320a-8(e)(1)(A)) is amended by striking ``statement 
     or representation referred to in subsection (a) was made'' 
     and inserting ``violation occurred''.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply with respect to 
     violations of sections 1129 and 1129A of the Social Security 
     Act (42 U.S.C. 1320-8 and 1320a-8a), as amended by this 
     section, committed after the date of enactment of this Act.
       (2) Violations by government agents in possession of social 
     security numbers.--Section 1129(a)(3)(I) of the Social 
     Security Act (42 U.S.C. 1320a-8(a)(3)(I)), as added by 
     subsection (b), shall apply with respect to violations of 
     that section occurring on or after the effective date 
     described in section 3(c).

     SEC. 9. CRIMINAL PENALTIES FOR THE MISUSE OF A SOCIAL 
                   SECURITY NUMBER.

       (a) Prohibition of Wrongful Use as Personal Identification 
     Number.--No person may obtain any individual's social 
     security number for purposes of locating or identifying an 
     individual with the intent to physically injure, harm, or use 
     the identity of the individual for any illegal purpose.
       (b) Criminal Sanctions.--Section 208(a) of the Social 
     Security Act (42 U.S.C. 408(a)) is amended--
       (1) in paragraph (8), by inserting ``or'' after the 
     semicolon; and
       (2) by inserting after paragraph (8) the following:
       ``(9) except as provided in subsections (e) and (f) of 
     section 1028A of title 18, United States Code, knowingly and 
     willfully displays, sells, or purchases (as those terms are 
     defined in section 1028A(a) of title 18, United States Code) 
     any individual's social security account number without 
     having met the prerequisites for consent under section 
     1028A(d) of title 18, United States Code; or
       ``(10) obtains any individual's social security number for 
     the purpose of locating or identifying the individual with 
     the intent to injure or to harm that individual, or to use 
     the identity of that individual for an illegal purpose;''.

     SEC. 10. CIVIL ACTIONS AND CIVIL PENALTIES.

       (a) Civil Action in State Courts.--
       (1) In general.--Any individual aggrieved by an act of any 
     person in violation of this Act or any amendments made by 
     this Act may, if otherwise permitted by the laws or rules of 
     the court of a State, bring in an appropriate court of that 
     State--
       (A) an action to enjoin such violation;
       (B) an action to recover for actual monetary loss from such 
     a violation, or to receive up to $500 in damages for each 
     such violation, whichever is greater; or
       (C) both such actions.

     It shall be an affirmative defense in any action brought 
     under this paragraph that the defendant has established and 
     implemented, with due care, reasonable practices and 
     procedures to effectively prevent violations of the 
     regulations prescribed under this Act. If the court finds 
     that the defendant willfully or knowingly violated the 
     regulations prescribed under this subsection, the court may, 
     in its discretion, increase the amount of the award to an 
     amount equal to not more than 3 times the amount available 
     under subparagraph (B).
       (2) Statute of limitations.--An action may be commenced 
     under this subsection not later than the earlier of--
       (A) 5 years after the date on which the alleged violation 
     occurred; or
       (B) 3 years after the date on which the alleged violation 
     was or should have been reasonably discovered by the 
     aggrieved individual.

[[Page S221]]

       (3) Nonexclusive remedy.--The remedy provided under this 
     subsection shall be in addition to any other remedies 
     available to the individual.
       (b) Civil Penalties.--
       (1) In general.--Any person who the Attorney General 
     determines has violated any section of this Act or of any 
     amendments made by this Act shall be subject, in addition to 
     any other penalties that may be prescribed by law--
       (A) to a civil penalty of not more than $5,000 for each 
     such violation; and
       (B) to a civil penalty of not more than $50,000, if the 
     violations have occurred with such frequency as to constitute 
     a general business practice.
       (2) Determination of violations.--Any willful violation 
     committed contemporaneously with respect to the social 
     security numbers of 2 or more individuals by means of mail, 
     telecommunication, or otherwise, shall be treated as a 
     separate violation with respect to each such individual.
       (3) Enforcement procedures.--The provisions of section 
     1128A of the Social Security Act (42 U.S.C. 1320a-7a), other 
     than subsections (a), (b), (f), (h), (i), (j), (m), and (n) 
     and the first sentence of subsection (c) of such section, and 
     the provisions of subsections (d) and (e) of section 205 of 
     such Act (42 U.S.C. 405) shall apply to a civil penalty 
     action under this subsection in the same manner as such 
     provisions apply to a penalty or proceeding under section 
     1128A(a) of such Act (42 U.S.C. 1320a-7a(a)), except that, 
     for purposes of this paragraph, any reference in section 
     1128A of such Act (42 U.S.C. 1320a-7a) to the Secretary shall 
     be deemed to be a reference to the Attorney General.

     SEC. 11. FEDERAL INJUNCTIVE AUTHORITY.

       In addition to any other enforcement authority conferred 
     under this Act or the amendments made by this Act, the 
     Federal Government shall have injunctive authority with 
     respect to any violation by a public entity of any provision 
     of this Act or of any amendments made by this Act.
                                 ______
                                 
      By Mr. SARBANES (for himself, Mr. Corzine, Mrs. Clinton, Mr. 
        Akaka, Mr. Bingaman, Mr. Schumer, Mr. Dodd, Mrs. Boxer, Ms. 
        Mikulski, and Mr. Reid):
  S. 31. A bill to amend the Electronic Fund Transfer Act to extend 
certain consumer protections to international remittance transfers of 
funds originating in the United States, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. SARBANES. Mr. President, today I am introducing the International 
Remittance Consumer Protection Act of 2005. This legislation extends 
basic consumer protection rights to those who send remittances, and it 
creates new avenues and incentives for federally insured financial 
institutions to provide remittance and basic banking services to those 
who currently do not use such institutions to send remittances.
  The practice of sending remittances is not new. Immigrants to the 
United States traditionally have used remittances to provide financial 
assistance to family members who remained in their country of origin, 
but the practice has been largely overlooked; it has not been 
systematically studied and its implications have not been fully 
understood. The 2000 census shows that 30 million people in this 
country are foreign-born--the largest number in our Nation's history--
and the vast majority of them--22 million are citizens or legal 
residents. More than 40 percent of our Nation's foreign-born population 
immigrated to the United States in the 1990s, and some 15.4 million, or 
more than half the immigrant community, have come from Latin American 
countries. Immigrants make a vital contribution to the economic and 
social life of our Nation.
  In a recent study, Sending Money Home: Remittances to Latin America 
from the U.S., 2004, the Inter-American Development Bank, IADB, found 
that nationwide over 60 percent of Latin American immigrants send 
remittances. On average, each immigrant sends $240 at a time, 12 times 
per year. Although these individual transactions are not large, they 
have constituted an aggregate amount of over $30 billion from America 
to our Latin American neighbors in this year alone.
  In my State of Maryland, we have 175,000 immigrants from Latin 
America and the vast majority send remittances back home. According to 
the IADB's study 80 percent of Maryland's immigrants from Latin America 
send remittances. The typical sender remits an average of $245, 14 
times per year--in other words, remittances are a monthly matter, with 
special gifts for Christmas and Mother's Day.
  The subject of remittances has been a major interest of mine for some 
time. As chairman of the Banking Committee, in February, 2002, during 
the 107th Congress, I chaired what I understand was the first 
Congressional hearing devoted exclusively to the subject. Dr. Manuel 
Orozco, a leading researcher on remittances at the Inter-American 
Dialogue, told the Committee that remittances from the U.S. to Latin 
America had grown substantially--at that point to an estimated $20 
billion in 2001--and that between 15 to 20 percent--$3-$4 billion--was 
being lost in fees and other transaction costs. Since Dr. Orozco 
testified, remittances to Latin America have grown by $10 billion, or 
50 percent, in just three years, and continued growth is expected.
  That an estimated 15 percent to 20 percent of the money sent in 
remittances is diverted to fees and other transaction costs, often 
hidden from the remittance sender, is evidence of the abusive practices 
that exist in the remittance market. There are two primary factors that 
account for this abuse. First, studies have shown that people who send 
remittances tend to be relatively low-wage earners, with modest formal 
education and relatively little experience in dealing with this 
country's complex system of financial institutions. As a result they 
are susceptible to unscrupulous actors who can take advantage of them 
by charging all sorts of exorbitant fees, which are often hidden or 
misrepresented. The exchange rate conversion is often the mechanism for 
this abusive practice.
  Second, remittances are currently not subject to the requirements set 
by Federal consumer protection law, including the disclosure of fees. 
There is no requirement that a remittance transfer provider disclose to 
the consumer the exchange rate fee that will be applied in the 
transaction. Without knowing the exchange rate fee that the company is 
charging, a consumer has little ability to gauge accurately the full 
cost of sending a remittance. As Sergio Bendixen, a leading researcher 
of public opinion and behavior, with a specialty among Hispanic 
consumers, testified before the Banking Committee: ``an overwhelming 
majority of Hispanic immigrants are unaware that their families in 
Latin America receive less money than what they send from the United 
States.'' Further, a remittance sender cannot effectively shop between 
remittance transfer providers. The lack of basic information limits the 
amount of competition in this market.
  The legislation I am introducing today extends basic consumer rights 
to those who send remittances. Further, by requiring clear and 
understandable disclosures to the remittance sender of the cost of the 
remittance, thus presenting to the consumer the full cost of sending 
money, the legislation will enhance competition, which in turn should 
lead to an overall decrease in the cost of sending remittances. As 
Sergio Bendixen testified to the Banking Committee, ``Full disclosure 
should unleash market forces that, hopefully, will result in a 
significant reduction in the cost of sending cash remittances.''

  This legislation amends the Electronic Fund Transfer Act, EFTA, which 
is the primary vehicle for providing basic protections to most persons 
who engage in electronic transactions, to cover remittances, and to 
provide the basic rights associated with EFTA to remittance 
transactions. The two most important components of EFTA are the 
requirement of full disclosure of fees and the establishment of a 
process for the resolution of transactional errors. These rights have 
been an integral part of the regulations that govern our banking 
infrastructure since EFTA's enactment in 1978. The new legislation will 
build upon the success of EFTA by extending these basic rights to 
remittance senders.
  The cornerstone of this legislation is the requirement that 
remittance transfer providers make three key disclosures to their 
consumers: One, the total cost of the remittance, represented in a 
single dollar amount; two, the total amount of currency that will be 
sent to the designated recipient; and three, the promised date of 
delivery for the remittance. These disclosures follow the core 
recommendations of the Inter-American Development Bank, which in its 
publication, Remittances to Latin America and the Caribbean: Goals and 
Recommendations,

[[Page S222]]

states: ``Remittance institutions should disclose in a fully 
transparent manner, complete information on total costs and transfer 
conditions, including all commissions and fees, foreign exchange rates 
applied and execution time.''
  The total cost disclosure will include the cost of the exchange rate 
conversion as well as all up-front fees. This single item will both 
give consumers a more accurate representation of the cost of the 
remittance transaction and allow consumers to more effectively compare 
costs between remittance transfer providers.
  In order to calculate the cost of the exchange rate conversion, which 
is part of the total cost, the legislation requires that the Treasury 
Department post on its website, on a daily basis, the exchange rate for 
all currencies. At present the Treasury receives this information on a 
daily basis, but posts it only on a quarterly basis on the Treasury 
website. By posting the information daily, the Treasury could create a 
uniform and credible source for exchange rate information.
  To calculate the cost to the consumer of the exchange rate 
differential, remittance transfer providers will use the difference 
between the previous business day's exchange rate, as posted on the 
Treasury website, and the exchange rate that the remittance transfer 
provider offers. Using the exchange rate posted by the Treasury will 
ensure that the exchange rate cost is calculated on a uniform base. 
When the exchange rate cost is disclosed to the consumer as part of the 
total cost of the remittance transfer, the consumer will be better able 
to understand the full cost of the transaction and to shop between 
different remittance transfer providers.
  In addition to fee disclosure requirements, this legislation 
establishes an error resolution mechanism so that consumers whose 
remittance transactions experience an error have a fair, open, and 
expedient process through which they may resolve those errors with the 
institution that conducted the flawed transaction. This basic right is 
already afforded to consumers who are protected by EFTA, and now this 
right will be extended to cover consumers who send remittances as well. 
Further, the legislation establishes an error resolution mechanism for 
remittance transfer errors that is responsive to the different types of 
errors that can occur in a remittance transaction and is reflective of 
the unique characteristics of the remittance market and its 
participants.
  Under this legislation, a consumer has one year from the date that 
the remittance transfer company promised to deliver the money to notify 
the company that an error has occurred. The company is then required to 
resolve the error within 90 days. To resolve the error, the company 
must either 1. refund the full amount of the remittance that was not 
properly transferred, 2. resend that amount at no additional cost to 
the consumer or the designated recipient, or 3. demonstrate to the 
consumer that there was no error. The Federal Reserve Board is also 
granted the authority to establish additional remedies for specific 
situations that cannot be addressed by the three specific remedies that 
are described in the legislation.
  It is urgent that we continue to encourage efforts to bring those who 
send remittances into the financial mainstream. In his testimony to the 
Banking Committee, Dr. Orozco pointed out that, ``About two-thirds of 
immigrants cash their salary checks in check cashing stores that charge 
exorbitant fees. Many of these same immigrants then use what remains of 
their income to send remittances back home. In this common scenario, 
immigrants are penalized in both receiving and sending their 
earnings.'' In order to further bank those who are currently unbanked, 
the legislation that I am introducing today requires that the Federal 
banking agencies and the National Credit Union Administration provide 
guidelines to financial institutions regarding the offering of low-cost 
remittance transfers and no-cost or low-cost basic consumer accounts. 
This legislation also amends the Federal Credit Union Act to allow 
credit unions to offer remittances and to cash checks for persons who 
are in their field of membership but are not credit union members. The 
guidelines set out in the legislation will help educate the financial 
services industry about the importance and potential profitability of 
providing these services.

  The sending of remittances in a fair and scrupulous manner is likely 
to be profitable for the institution that provides the remittance 
service, and indeed we have begun to see aggressive moves into the 
remittance market by many of the largest banking institutions. 
Individuals who send remittances but are currently unbanked represent 
an expanded and profitable customer base for financial institutions.
  By its very nature, the issues involved in sending remittances affect 
both the United States and other nations. As Professor Susan Martin of 
Georgetown University, who also testified at our hearing, told the 
Banking Committee: ``Until relatively recently, researchers and policy 
makers tended to dismiss the importance of remittances or emphasize 
only their negative aspects . . . but recent work on remittances show a 
far more complex and promising picture. . . . Experts now recognize 
that remittances have far greater positive impact on communities in 
developing countries than previously acknowledged.'' In fact, the size 
of the remittance market is such that for six Central American and 
Caribbean nations--Nicaragua, Haiti, El Salvador, Honduras, Guyana and 
Jamaica--remittances constitute more than 10 percent of GDP; Haiti and 
Jamaica receive more in remittances than in revenues from trade. The 
World Bank estimates that Mexico receives more in remittances than it 
does in foreign direct investment. Reducing the costs of remittances is 
in the interest of both the United States and the countries that 
receive them.
  Given the growing importance of annual remittance flows, we must work 
to increase their efficiency. One mechanism for accomplishing this 
objective, and for increasing the ability of financial institutions to 
offer remittances, is linking our banking infrastructure with the 
banking infrastructures of other nations. The Federal Reserve operates 
an international automated clearing house system, ACHi, that is 
currently linked to seven countries, of which the vast majority are 
highly developed trading partners that receive relatively low levels of 
remittances. The ACHi was recently connected to Mexico, however, which 
will allow financial institutions throughout the United States, 
especially those institutions of smaller size, to provide remittance 
services more easily and cheaply to Mexico. This legislation directs 
the Fed to take into account the importance of remittance flows to 
other countries as it continues to expand the ACHi system. Linking the 
ACHi to countries that receive significant remittances has the 
potential to result in great benefits to consumers who send remittances 
from America as well as to those who receive the remittances around the 
world.
  Finally, I am acutely aware of the need for better and more broadly 
available financial literacy and education for all Americans. I am 
pleased to report that in the last Congress, as part of the 
reauthorization of the Fair Credit Reporting Act, we established a 
Presidential Financial Literacy and Education Commission, which is 
charged with developing a national strategy to promote financial 
literacy and education. The Act addresses the issue of remittances by 
including in the Commission's work a focus on increasing the 
``awareness of the particular financial needs and financial 
transactions, such as the sending of remittances, of consumers who are 
targeted in multilingual financial literacy and education programs.'' 
The legislation that I am introducing today builds on that framework by 
instructing the bank and credit union regulators to work with the 
Commission to specifically increase the financial education efforts 
that target those persons who send remittances.
  Millions of Americans send remittances to family members around the 
world, for a total far exceeding the $30 billion that goes to Latin 
America alone. Yet almost all of these transactions take place without 
the basic consumer ri