    [Congressional Bills 103th Congress]
    [From the U.S. Government Publishing Office]
    [H.R. 2264 Reported in House (RH)]

                                                      Union Calendar No. 57

    103d CONGRESS

      1st Session

                                   H. R. 2264

                              [Report No. 103-111]

    _______________________________________________________________________

                                     A BILL

     To provide for reconciliation pursuant to section 7 of the concurrent
                 resolution on the budget for fiscal year 1994.

    _______________________________________________________________________

                                  May 25, 1993

    Committed to the Committee of the Whole House on the State of the Union
                           and ordered to be printed
                                                      Union Calendar No. 57
    103d CONGRESS
      1st Session
                                    H. R. 2264

                              [Report No. 103-111]

     To provide for reconciliation pursuant to section 7 of the concurrent
                 resolution on the budget for fiscal year 1994.

    _______________________________________________________________________

                        IN THE HOUSE OF REPRESENTATIVES

                                  May 25, 1993

      Mr. Sabo, from the Committee on the Budget, reported the following
     bill; which was committed to the Committee of the Whole House on the
                  State of the Union and ordered to be printed

    _______________________________________________________________________

                                     A BILL

     To provide for reconciliation pursuant to section 7 of the concurrent
                 resolution on the budget for fiscal year 1994.

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

    SECTION 1. SHORT TITLE.

        This Act may be cited as the ``Omnibus Budget Reconciliation Act of
    1993''.

    SEC. 2. TABLE OF CONTENTS.

        The table of contents is as follows:

                       TITLE I--COMMITTEE ON AGRICULTURE

                     TITLE II--COMMITTEE ON ARMED SERVICES

           TITLE III--COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS

                   TITLE IV--COMMITTEE ON EDUCATION AND LABOR

                   TITLE V--COMMITTEE ON ENERGY AND COMMERCE

                     TITLE VI--COMMITTEE ON FOREIGN AFFAIRS

                     TITLE VII--COMMITTEE ON THE JUDICIARY

             TITLE VIII--COMMITTEE ON MERCHANT MARINE AND FISHERIES

                    TITLE IX--COMMITTEE ON NATURAL RESOURCES

              TITLE X--COMMITTEE ON POST OFFICE AND CIVIL SERVICE

                      TITLE XI--COMMITTEE ON PUBLIC WORKS

                   TITLE XII--COMMITTEE ON VETERANS' AFFAIRS

                TITLE XIII--COMMITTEE ON WAYS AND MEANS--SAVINGS

                TITLE XIV--COMMITTEE ON WAYS AND MEANS--REVENUES

                       TITLE I--COMMITTEE ON AGRICULTURE

    SEC. 1001. SHORT TITLE AND TABLE OF CONTENTS.

        (a) Short Title.--This title may be cited as the ``Agricultural
    Reconciliation Act of 1993''.
        (b) Table of Contents.--The table of contents of this title is as
    follows:

    Sec. 1001. Short title and table of contents.
                         Subtitle A--Commodity Programs

    Sec. 1101. Wheat program.
    Sec. 1102. Feed grain program.
    Sec. 1103. Upland cotton program.
    Sec. 1104. Rice program.
    Sec. 1105. Dairy program.
    Sec. 1106. Tobacco program.
    Sec. 1107. Sugar program.
    Sec. 1108. Oilseeds program.
    Sec. 1109. Peanut program.
    Sec. 1110. Honey program.
    Sec. 1111. Wool and mohair program.
    Sec. 1112. Conforming amendments to continue deficit reduction
                                activities in crop years after 1995.
                   Subtitle B--Restructuring of Loan Programs

    Sec. 1201. Restructuring of certain loan programs.
    Sec. 1202. Reorganization of rural development functions.
                         Subtitle C--Food Stamp Program

    Sec. 1301. Short title.
    Sec. 1302. References to Act.
                  Chapter 1--Ensuring Adequate Food Assistance

    Sec. 1311. Maximum benefit level.
    Sec. 1312. Helping low-income high school students.
    Sec. 1313. Families with high shelter expenses.
    Sec. 1314. Resource exclusion for earned income tax credits.
    Sec. 1315. Homeless families in transitional housing.
    Sec. 1316. Households benefiting from general assistance vendor
                                payments.
    Sec. 1317. Continuing benefits to eligible households.
    Sec. 1318. Improving the nutritional status of children in Puerto Rico.
                     Chapter 2--Promoting Self Sufficiency

    Sec. 1321. Income exclusion for education assistance.
    Sec. 1322. Child support payments to nonhousehold members.
    Sec. 1323. Child support exclusion.
    Sec. 1324. Improving access to employment and training activities.
    Sec. 1325. Vehicles needed to seek and continue employment and for
                                household transportation.
    Sec. 1326. Vehicles necessary to carry fuel or water.
    Sec. 1327. Demonstration projects testing resource accumulation.
            Chapter 3--Simplifying the Provision of Food Assistance

    Sec. 1331. Simplifying the household definition for households with
                                children and others.
    Sec. 1332. Eligibility of children of parents participating in drug or
                                alcohol treatment programs.
    Sec. 1333. Resources of households with disabled members.
    Sec. 1334. Ensuring adequate funding for the food stamp program.
                     Chapter 4--Improving Program Integrity

    Sec. 1341. Use and disclosure of information provided by retail food
                                stores and wholesale food concerns.
    Sec. 1342. Additional means of claims collection.
    Sec. 1343. Demonstration projects testing activities directed at street
                                trafficking in coupons.
               Chapter 5--Improving Food Stamp Program Management

    Sec. 1351. Clarification of categorical eligibility.
    Sec. 1352. Technical amendments related to electronic benefit transfer.
    Sec. 1353. Disqualification of recipients for trading firearms,
                                ammunition, explosives, or controlled
                                substances for coupons.
    Sec. 1354. Uncapped civil money penalty for trafficking in coupons.
    Sec. 1355. Uncapped civil money penalty for selling firearms,
                                ammunition, explosives, or controlled
                                substances for coupons.
    Sec. 1356. Modifying the food stamp quality control system.
                     Chapter 6--Uniform Reimbursement Rates

    Sec. 1361. Uniform reimbursement rates.
                 Chapter 7--Implementation and Effective Dates

    Sec. 1371. Implementation and effective dates.
                      Subtitle D--Miscellaneous Provisions

    Sec. 1401. Maximum expenditures under market promotion program for
                                fiscal years 1994 through 1998.
    Sec. 1402. Admission, entrance, and recreation fees.
    Sec. 1403. Additional program changes to meet reconciliation
                                requirements.
    Sec. 1404. Environmental conservation acreage reserve program
                                amendments.
    Sec. 1405. Levels of insurance coverage under the Federal Crop
                                Insurance Act.

                         Subtitle A--Commodity Programs

    SEC. 1101. WHEAT PROGRAM.

        (a) Five Percent Reduction in Payment Acres.--
                (1) Reduction.--Subsection (c)(1)(C)(ii) of section 107B of
            the Agricultural Act of 1949 (7 U.S.C. 1445b-3a) is amended by
            striking ``85 percent'' and inserting ``80 percent''.
                (2) Application of amendment.--The amendment made by
            paragraph (1) shall apply beginning with the 1994 crop of
            wheat.
        (b) Continuation of Deficit Reduction Activities in Crop Years
    After 1995.--
                (1) Agricultural act of 1949.--Section 107B of the
            Agricultural Act of 1949 (7 U.S.C. 1445b-3a) is further
            amended--
                        (A) in the section heading, by striking ``1995''
                    and inserting ``1998'';
                        (B) in subsections (a)(1), (a)(4)(C), (b)(1),
                    (c)(1)(A), (c)(1)(B)(iii), (e)(1)(G), (e)(3)(A),
                    (e)(3)(C)(iii), (f)(1), and (q), by striking ``1995''
                    each place it appears and inserting ``1998'';
                        (C) in the heading of subsection (c)(1)(B)(ii), by
                    striking ``and 1995'' and inserting ``through 1998'';
                        (D) in subsection (c)(1)(B)(ii), by striking ``and
                    1995'' and inserting ``through 1998''; and
                        (E) in the heading of subsection (e)(1)(G), by
                    striking ``1995'' and inserting ``1998''; and
                        (F) in subsection (g)(1), by striking ``and 1995''
                    and inserting ``through 1998''.
                (2) Food, agriculture, conservation, and trade act of
            1990.--Title III of the Food, Agriculture, Conservation, and
            Trade Act of 1990 (Public Law 101-624; 104 Stat. 3382) is
            amended--
                        (A) in section 302 (7 U.S.C. 1379d note), by
                    striking ``May 31, 1996'' and inserting ``May 31,
                    1999'';
                        (B) in section 303 (7 U.S.C. 1331 note), by
                    striking ``1995'' and inserting ``1998'';
                        (C) in section 304 (7 U.S.C. 1340 note), by
                    striking ``1995'' and inserting ``1998''; and
                        (D) in section 305 (7 U.S.C. 1445a note)--
                                (i) in the section heading, by striking
                            ``1995'' and inserting ``1998''; and
                                (ii) by striking ``1995'' and inserting
                            ``1998''.
                (3) Food security wheat reserve.--Section 302(i) of the
            Food Security Wheat Reserve Act of 1980 (7 U.S.C. 1736f-1(i))
            is amended by striking ``1995'' both places it appears and
            inserting ``1998''.

    SEC. 1102. FEED GRAIN PROGRAM.

        (a) Five Percent Reduction in Payment Acres.--
                (1) Reduction.--Subsection (c)(1)(C)(ii) of section 105B of
            the Agricultural Act of 1949 (7 U.S.C. 1444f) is amended by
            striking ``85 percent'' and inserting ``80 percent''.
                (2) Application of amendment.--The amendment made by
            paragraph (1) shall apply beginning with the 1994 crop of feed
            grains.
        (b) Continuation of Deficit Reduction Activities in Crop Years
    After 1995.--
                (1) Agricultural act of 1949.--Section 105B of the
            Agricultural Act of 1949 (7 U.S.C. 1444f) is further amended--
                        (A) in the section heading, by striking ``1995''
                    and inserting ``1998'';
                        (B) in subsections (a)(1), (a)(4)(C), (a)(6),
                    (b)(1), (c)(1)(A), (c)(1)(B)(iii)(I),
                    (c)(1)(B)(iii)(III), (e)(1)(G), (e)(1)(H), (e)(2)(H),
                    (e)(3)(A), (e)(3)(C)(iii), (f)(1), (p)(1), (q)(1), and
                    (r), by striking ``1995'' each place it appears and
                    inserting ``1998'';
                        (C) in the heading of subsection (c)(1)(B)(ii), by
                    striking ``and 1995'' and inserting ``through 1998'';
                        (D) in subsection (c)(1)(B)(ii), by striking ``and
                    1995'' and inserting ``through 1998'';
                        (E) in the headings of subsections (e)(1)(G) and
                    (e)(1)(H), by striking ``1995'' both places it appears
                    and inserting ``1998''; and
                        (F) in subsection (g)(1), by striking ``and 1995''
                    and inserting ``through 1998''.
                (2) Food, agriculture, conservation, and trade act of
            1990.--Section 402 of the Food, Agriculture, Conservation, and
            Trade Act of 1990 (7 U.S.C. 1444b note) is amended--
                        (A) in the section heading, by striking ``1995''
                    and inserting ``1998''; and
                        (B) by striking ``1995'' and inserting ``1998''.
                (3) Recourse loan program for silage.--Section 403 of the
            Food Security Act of 1985 (7 U.S.C. 1444e-1) is amended by
            striking ``1996'' and inserting ``1999''.

    SEC. 1103. UPLAND COTTON PROGRAM.

        (a) Five Percent Reduction in Payment Acres.--
                (1) Reduction.--Subsection (c)(1)(C)(ii) of section 103B of
            the Agricultural Act of 1949 (7 U.S.C. 1444-2) is amended by
            striking ``85 percent'' and inserting ``80 percent''.
                (2) Application of amendment.--The amendment made by
            paragraph (1) shall apply beginning with the 1994 crop of
            upland cotton.
        (b) Continuation of Deficit Reduction Activities in Crop Years
    After 1995.--
                (1) Agricultural act of 1949.--(A) Section 103(h)(16) of
            the Agricultural Act of 1949 (7 U.S.C. 1444(h)(16)) is amended
            by striking ``1996'' and inserting ``1999''.
                (B) Section 103B of such Act (7 U.S.C. 1444-2) is further
            amended--
                        (i) in the section heading, by striking ``1995''
                    and inserting ``1998'';
                        (ii) in subsections (a)(1), (b)(1), (c)(1)(A),
                    (c)(1)(B)(ii), (e)(3)(A), (f)(1), and (o), by striking
                    ``1995'' each place it appears and inserting ``1998'';
                    and
                        (iii) in subparagraphs (B)(i), (D)(i), (E)(i), and
                    (F)(i) of subsection (a)(5), by striking ``1996'' each
                    place it appears and inserting ``1999''.
                (C) Section 203(b) of such Act (7 U.S.C. 1446d(b)) is
            amended by striking ``1995'' and inserting ``1998''.
                (2) Agricultural adjustment act of 1938.--Section 374(a) of
            the Agricultural Adjustment Act of 1938 (7 U.S.C. 1374(a)) is
            amended by striking ``1995'' each place it appears and
            inserting ``1998''.
                (3) Food, agriculture, conservation, and trade act of
            1990.--Title V of the Food, Agriculture, Conservation, and
            Trade Act of 1990 (Public Law 101-624; 104 Stat. 3421) is
            amended--
                        (A) in section 502 (7 U.S.C. 1342 note), by
                    striking ``1995'' and inserting ``1998'';
                        (B) in section 503 (7 U.S.C. 1444 note), by
                    striking ``1995'' and inserting ``1998''; and
                        (C) in section 505 (7 U.S.C. 1342 note)--
                                (i) in the section heading, by striking
                            ``1996'' and inserting ``1999''; and
                                (ii) by striking ``1996'' and inserting
                            ``1999''.

    SEC. 1104. RICE PROGRAM.

        (a) Five Percent Reduction in Payment Acres.--
                (1) Reduction.--Subsection (c)(1)(C)(ii) of section 101B of
            the Agricultural Act of 1949 (7 U.S.C. 1441-2) is amended by
            striking ``85 percent'' and inserting ``80 percent''.
                (2) Application of amendment.--The amendment made by
            paragraph (1) shall apply beginning with the 1994 crop of rice.
        (b) Continuation of Deficit Reduction Activities in Crop Years
    After 1995.--Such section is further amended--
                (1) in the section heading, by striking ``1995'' and
            inserting ``1998'';
                (2) in subsections (a)(1), (a)(3), (b)(1), (c)(1)(A),
            (c)(1)(B)(iii), (e)(3)(A), (f)(1), and (n), by striking
            ``1995'' each place it appears and inserting ``1998'';
                (3) in subsection (a)(5)(D)(i), by striking ``1996'' and
            inserting ``1999'';
                (4) in the heading of subsection (c)(1)(B)(ii), by striking
            ``and 1995'' and inserting ``through 1998''; and
                (5) in subsection (c)(1)(B)(ii), by striking ``and 1995''
            and inserting ``through 1998''.

    SEC. 1105. DAIRY PROGRAM.

        (a) Allocation of Purchase Prices for Butter and Nonfat Dry Milk.--
                (1) In general.--Subsection (c)(3) of section 204 of the
            Agricultural Act of 1949 (7 U.S.C. 1446e) is amended--
                        (A) in the first sentence of subparagraph (A), by
                    striking ``The Secretary'' and inserting ``Subject to
                    subparagraph (B), the Secretary'';
                        (B) by redesignating subparagraph (B) as
                    subparagraph (C); and
                        (C) by inserting after subparagraph (A) the
                    following new subparagraph:
                        ``(B) Guidelines.--In allocating the rate of price
                    support between the purchase prices of butter and
                    nonfat dry milk under this paragraph, the Secretary may
                    not--
                                ``(i) offer to purchase butter for more
                            than $0.65 per pound; or
                                ``(ii) offer to purchase nonfat dry milk
                            for less than $1.034 per pound.''.
                (2) Application of amendments.--The amendments made by
            paragraph (1) shall apply with respect to purchases of butter
            and nonfat dry milk that are made by the Secretary of
            Agriculture under section 204 of the Agricultural Act of 1949
            (7 U.S.C. 1446e) on or after the date of the enactment of this
            Act.
        (b) Reduction in Price Received.--Subsection (h)(2) of such section
    is amended--
                (1) by striking ``and'' at the end of subparagraph (A);
                (2) by striking the period at the end of subparagraph (B)
            and inserting ``; and''; and
                (3) by adding at the end the following new subparagraph:
                        ``(C) during each of the calendar years 1996
                    through 1998, 10 cents per hundredweight of milk
                    marketed, which rate shall be adjusted on or before May
                    1 of each of the calendar years 1996 through 1998 in
                    the manner provided in subparagraph (B).''.
        (c) Continuation of Deficit Reduction Activities in Fiscal Years
    After 1995.--
                (1) In general.--Section 204 of the Agricultural Act of
            1949 (7 U.S.C. 1446e) is further amended--
                        (A) in the section heading, by striking ``1995''
                    and inserting ``1998'';
                        (B) in subsections (a), (b), (d)(1)(A), (d)(2)(A),
                    (d)(3), (f), (g)(1), and (k), by striking ``1995'' each
                    place it appears and inserting ``1998''; and
                        (C) in subsection (g)(2), by striking ``1994'' and
                    inserting ``1997''.
                (2) Transfer to military and veterans hospitals.--
            Subsections (a) and (b) of section 202 of such Act (7 U.S.C.
            1446a) are amended by striking ``1995'' both places it appears
            and inserting ``1998''.
                (3) Federal milk marketing orders.--Section 101(b) of the
            Agriculture and Food Act of 1981 (7 U.S.C. 608c note) is
            amended by striking ``1995'' and inserting ``1998''.
                (4) Dairy indemnity program.--Section 3 of Public Law 90-
            484 (7 U.S.C. 450l) is amended by striking ``1995'' and
            inserting ``1998''.
                (5) Food security act of 1985.--The Food Security Act of
            1985 is amended--
                        (A) in section 153 (15 U.S.C. 713a-14), by striking
                    ``1995'' and inserting ``1998''; and
                        (B) in section 1163 (7 U.S.C. 1731 note), by
                    striking ``1995'' each place it appears and inserting
                    ``1998''.

    SEC. 1106. TOBACCO PROGRAM.

        (a) Ten Percent Increase in Marketing Assessment.--Subsection
    (g)(1) of section 106 of the Agricultural Act of 1949 (7 U.S.C. 1445)
    is amended by striking ``equal to'' and all that follows through the
    period and inserting the following: ``equal to--
                ``(A) in the case of the 1991 through 1993 crops of
            tobacco, .5 percent of the national average price support level
            for each such crop as otherwise provided for in this section;
            and
                ``(B) in the case of the 1994 through 1998 crops of
            tobacco, .55 percent of the national average price support
            level for each such crop as otherwise provided for in this
            section.''.
        (b) Continuation of Deficit Reduction Activities in Fiscal Years
    After 1995.--Such subsection is further amended by striking ``1995''
    and inserting ``1998''.
        (c) Acreage-Poundage Quotas for Tobacco.--
                (1) Definitions.--Subsection (a) of section 317 of the
            Agricultural Adjustment Act of 1938 (7 U.S.C. 1314c) is
            amended--
                        (A) by inserting ``Definitions.--'' after ``(a)'';
                    and
                        (B) by striking paragraphs (2), (3), (4), (5), (6),
                    (7), and (8) and inserting the following new
                    paragraphs:
                ``(2) Farm acreage allotment.--The term `farm acreage
            allotment' for a tobacco farm, other than a new tobacco farm,
            means the acreage allotment determined by dividing the farm
            marketing quota by the farm yield.
                ``(3) Farm yield.--The term `farm yield' means the yield
            per acre for a farm determined according to regulations issued
            by the Secretary and which would be expected to result in a
            quality of tobacco acceptable to the tobacco trade.
                ``(4) Farm marketing quota.--
                        ``(A) In general.--The term `farm marketing quota'
                    for a farm for a marketing year means a number that is
                    equal to the number of pounds of tobacco determined by
                    multiplying--
                                ``(i) the farm marketing quota for the farm
                            for the previous marketing year (prior to any
                            adjustment for undermarketing or
                            overmarketing); by
                                ``(ii) the national factor.
                        ``(B) Adjustment.--The farm marketing quota
                    determined under subparagraph (A) for a marketing year
                    shall be increased for undermarketing or decreased for
                    overmarketing by the number of pounds by which
                    marketings of tobacco from the farm during the
                    immediate preceding marketing year (if marketing quotas
                    were in effect for that year under the program
                    established by this section) is less than or exceeds
                    the farm marketing quota for such year. Notwithstanding
                    the preceding sentence, the farm marketing quota for a
                    marketing year shall not be increased under this
                    subparagraph for undermarketing by an amount in excess
                    of the farm marketing quota determined for the farm for
                    the immediately preceding year prior to any increase
                    for undermarketing or decrease for overmarketing. If
                    due to excess marketing in the preceding marketing year
                    the farm marketing quota for the marketing year is
                    reduced to zero pounds without reflecting the entire
                    reduction required, the additional reduction shall be
                    made for the subsequent marketing year or years.
                ``(5) National factor.--The term `national factor' for a
            marketing year means a number obtained by dividing--
                        ``(A) the national marketing quota (less the
                    reserve provided for under subsection (e)); by
                        ``(B) the sum of the farm marketing quotas (prior
                    to any adjustments for undermarketing or overmarketing)
                    for the immediate preceding marketing year for all
                    farms for which marketing quotas for the kind of
                    tobacco involved will be determined for such succeeding
                    marketing year.''.
                (2) Conforming amendments.--Such section is further
            amended--
                        (A) in the first sentence of subsection (b), by
                    striking ``and the national acreage allotment and
                    national average yield goal for the 1965 crop of Flue-
                    cured tobacco,'';
                        (B) in the first sentence of subsection (c), by
                    striking ``and at the same time announce the national
                    acreage allotment and national average yield goal'';
                        (C) in subsection (d)--
                                (i) in the sixth sentence, by striking ``,
                            national acreage allotment, and national
                            average yield goal'';
                                (ii) in the eighth sentence, by striking
                            ``, national acreage allotment and national
                            average yield goal''; and
                                (iii) in the ninth sentence, by striking
                            ``, national acreage allotment, and national
                            average goal are'' and inserting ``is'';
                        (D) in subsection (e)--
                                (i) in the first sentence, by striking ``No
                            farm acreage allotment or farm yield shall be
                            established'' and inserting ``A farm marketing
                            quota and farm yield shall not be
                            established'';
                                (ii) in the second sentence, by striking
                            ``acreage allotment'' both places it appears
                            and inserting ``marketing quota'';
                                (iii) in the second sentence, by striking
                            ``acreage allotments'' both places it appears
                            and inserting ``marketing quotas''; and
                                (iv) in the last sentence, by striking
                            ``acreage allotment'' and inserting ``marketing
                            quota''; and
                        (E) in subsection (g)--
                                (i) in paragraph (1), by striking
                            ``paragraph (a)(8)'' and inserting ``subsection
                            (a)(4)''; and
                                (ii) in paragraph (3), by striking
                            ``subsection (a)(8)'' and inserting
                            ``subsection (a)(4)''.
                (3) Farm marketing quota reductions.--Subsection (f) of
            such section is amended to read as follows:
        ``(f) Causes for Farm Marketing Quota Reductions.--(1) When an
    acreage-poundage program is in effect for any kind of tobacco under
    this section, the farm marketing quota next established for a farm
    shall be reduced by the amount of such kind of tobacco produced on the
    farm--
                ``(A) which was marketed as having been produced on a
            different farm;
                ``(B) for which proof of disposition is not furnished as
            required by the Secretary;
                ``(C) on acreage equal to the difference between the
            acreage reported by the farm operator or a duly authorized
            representative and the determined acreage for the farm; and
                ``(D) as to which any producer on the farm files, or aids,
            or acquiesces, in the filing of any false report with respect
            to the production or marketing of tobacco.
        ``(2) If the Secretary, through the local committee, finds that no
    person connected with a farm caused, aided, or acquiesced in any
    irregularity described in paragraph (1), the next established farm
    marketing quota shall not be reduced under this subsection.
        ``(3) The reduction required under this subsection shall be in
    addition to any other adjustments made pursuant to this section.
        ``(4) In establishing farm marketing quotas for other farms owned
    by the owner displaced by acquisition of the owner's land by any
    agency, as provided in section 378 of this Act, increases or decreases
    in such farm marketing quotas as provided in this section shall be made
    on account of marketings below or in excess of the farm marketing quota
    for the farm acquired by the agency.
        ``(5) Acreage allotments and farm marketing quotas determined under
    this section may (except in the case of kinds of tobacco not subject to
    section 316) be leased and sold under the terms and conditions in
    section 316 of this Act, except that any credit for undermarketing or
    charge for overmarketing shall be attributed to the farm to which
    transferred.''.

    SEC. 1107. SUGAR PROGRAM.

        (a) Ten Percent Increase in Marketing Assessment.--Subsection (i)
    of section 206 of the Agricultural Act of 1949 (7 U.S.C. 1446g) is
    amended--
                (1) in paragraph (1), by striking ``equal to'' and all that
            follows through the period and inserting the following: ``equal
            to--
                        ``(A) in the case of marketings during fiscal years
                    1992 and 1993, .18 cents per pound of raw cane sugar,
                    processed by the processor from domestically produced
                    sugarcane or sugarcane molasses, that has been marketed
                    (including the transfer or delivery of the sugar to a
                    refinery for further processing or marketing); and
                        ``(B) in the case of marketings during fiscal years
                    1994 through 1999, .198 cents per pound of raw cane
                    sugar, processed by the processor from domestically
                    produced sugarcane or sugarcane molasses, that has been
                    marketed (including the transfer or delivery of the
                    sugar to a refinery for further processing or
                    marketing).''; and
                (2) in paragraph (2), by striking ``equal to'' and all that
            follows through the period and inserting the following: ``equal
            to--
                        ``(A) in the case of marketings during fiscal years
                    1992 and 1993, .193 cents per pound of beet sugar,
                    processed by the processor from domestically produced
                    sugar beets or sugar beet molasses, that has been
                    marketed; and
                        ``(B) in the case of marketings during fiscal years
                    1994 through 1999, .2123 cents per pound of beet sugar,
                    processed by the processor from domestically produced
                    sugar beets or sugar beet molasses, that has been
                    marketed.''.
        (b) Continuation of Deficit Reduction Activities in Crop Years
    After 1995.--
                (1) Agricultural act of 1949.--Section 206 of the
            Agricultural Act of 1949 (7 U.S.C. 1446g) is further amended--
                        (A) in the section heading, by striking ``1995''
                    and inserting ``1998'';
                        (B) in subsections (a), (c), (d)(1), and (j), by
                    striking ``1995'' each place it appears and inserting
                    ``1998''; and
                        (C) in paragraphs (1) and (2) of subsection (i), as
                    amended by subsection (a), by striking ``1996'' both
                    places it appears and inserting ``1999''.
                (2) Agricultural adjustment act of 1938.--Section
            359b(a)(1) of the Agricultural Adjustment Act of 1938 (7 U.S.C.
            1359bb(a)(1)) is amended by striking ``1996'' and inserting
            ``1999''.

    SEC. 1108. OILSEEDS PROGRAM.

        (a) Continuation of Deficit Reduction Activities in Crop Years
    After 1995.--Section 205 of the Agricultural Act of 1949 (7 U.S.C.
    1446f) is amended--
                (1) in the section heading, by striking ``1995'' and
            inserting ``1998''; and
                (2) in subsections (b), (c), (e)(1), and (n), by striking
            ``1995'' each place it appears and inserting ``1998''.

    SEC. 1109. PEANUT PROGRAM.

        (a) Assessment to Cover Unanticipated Losses in Administering the
    Program.--
                (1) Additional assessment.--Section 108B of the
            Agricultural Act of 1949 (7 U.S.C. 1445c-3) is amended--
                        (A) by redesignating subsection (h) as subsection
                    (i); and
                        (B) by inserting after subsection (g) the following
                    new subsection:
        ``(h) Additional Marketing Assessment.--
                ``(1) Two percent assessment.--In addition to the marketing
            assessment required by subsection (g), the Secretary shall also
            provide for a nonrefundable marketing assessment applicable to
            each of the 1993 through 1998 crops of peanuts and collected
            and paid in accordance with this subsection. The assessment
            shall be on a per pound basis in an amount equal to 2 percent
            of the national average quota or additional peanut support rate
            per pound, as applicable, for the applicable crop. No peanuts
            shall be assessed more than 2 percent of the applicable support
            rate under this subsection.
                ``(2) First purchasers.--Except as provided under
            paragraphs (3) and (4), the first purchaser of peanuts shall--
                        ``(A) collect from the producer a marketing
                    assessment equal to 1 percent of the applicable
                    national average support rate times the quantity of
                    peanuts acquired;
                        ``(B) pay, in addition to the amount collected
                    under subparagraph (A), a marketing assessment in an
                    amount equal to 1 percent of the applicable national
                    average support rate times the quantity of peanuts
                    acquired; and
                        ``(C) remit the amounts required under
                    subparagraphs (A) and (B) to the Commodity Credit
                    Corporation in a manner specified by the Secretary.
                ``(3) Other private marketings.--In the case of a private
            marketing by a producer directly to a consumer through a retail
            or wholesale outlet or in the case of a marketing by the
            producer outside of the continental United States, the producer
            shall be responsible for the full amount of the assessment
            under this subsection and shall remit the assessment by such
            time as is specified by the Secretary.
                ``(4) Loan peanuts.--In the case of peanuts that are
            pledged as collateral for a price support loan made under this
            section, \1/2\ of the assessment under this subsection shall be
            deducted from the proceeds of the loan. The remainder of the
            assessment shall be paid by the first purchaser of the peanuts
            as provided in subparagraph (B) of paragraph (2). For purposes
            of computing net gains on peanuts under this section, the
            reduction in loan proceeds under this subsection shall be
            treated as having been paid to the producer.
                ``(5) Reserve account.--
                        ``(A) Establishment.--The Secretary shall establish
                    in the Commodity Credit Corporation a reserve account
                    to be administered by the Secretary for purposes of
                    this section. There shall be deposited in the reserve
                    account for each crop of peanuts an amount equal to--
                                ``(i) the total amount remitted to the
                            Commodity Credit Corporation under paragraphs
                            (2) and (3) as the payment of the marketing
                            assessment applicable to that crop of peanuts
                            under this subsection; and
                                ``(ii) the total amount deducted from the
                            proceeds of a price support loan or paid by
                            first purchasers under paragraph (4) as the
                            payment of the marketing assessment applicable
                            to that crop of peanuts under this subsection.
                        ``(B) Use of reserve account.--The Secretary shall
                    use amounts in the reserve account established in this
                    paragraph to cover losses incurred by the Commodity
                    Credit Corporation on the sale or disposal of peanuts.
                ``(6) Application of other provisions.--Paragraphs (2)(B),
            (5), and (6) of subsection (g) shall apply with respect to the
            marketing assessment required by this subsection.''.
                (2) Effective date.--The amendments made by paragraph (1)
            shall take effect 15 days after the date of the enactment of
            this Act.
        (b) Continuation of Deficit Reduction Activities in Crop Years
    After 1995.--
                (1) Agricultural act of 1949.--Section 108B of the
            Agricultural Act of 1949 (7 U.S.C. 1445c-3) is further
            amended--
                        (A) in the section heading, by striking ``1995''
                    and inserting ``1998'';
                        (B) in subsections (a)(1), (a)(2), (b)(1), and
                    (g)(1), by striking ``1995'' each place it appears and
                    inserting ``1998''; and
                        (C) in subsection (i) (as redesignated by
                    subsection (a)(1)(A)), by striking ``1995'' and
                    inserting ``1998''.
                (2) Agricultural adjustment act of 1938.--Part VI of
            subtitle B of title III of the Agricultural Adjustment Act of
            1938 is amended--
                        (A) in section 358-1 (7 U.S.C. 1358-1)--
                                (i) in the section heading, by striking
                            ``1995'' and inserting ``1998''; and
                                (ii) in subsections (a)(1), (b)(1)(A),
                            (b)(1)(B), (b)(2)(A), (b)(2)(C), (b)(3), and
                            (f), by striking ``1995'' each place it appears
                            and inserting ``1998'';
                        (B) in section 358b (7 U.S.C. 1358b)--
                                (i) in the section heading, by striking
                            ``1995'' and inserting ``1998''; and
                                (ii) in subsection (c), by striking
                            ``1995'' and inserting ``1998'';
                        (C) in section 358c(d) (7 U.S.C. 1358c(d)), by
                    striking ``1995'' and inserting ``1998''; and
                        (D) in section 358e (7 U.S.C. 1359a)--
                                (i) in the section heading, by striking
                            ``1995'' and inserting ``1998''; and
                                (ii) in subsection (i), by striking
                            ``1995'' and inserting ``1998''.
                (3) Food, agriculture, conservation, and trade act of
            1990.--Title VIII of the Food, Agriculture, Conservation, and
            Trade Act of 1990 (Public Law 101-624; 104 Stat. 3459) is
            amended--
                        (A) in section 801 (104 Stat. 3459), by striking
                    ``1995'' and inserting ``1998'';
                        (B) in section 807 (104 Stat. 3478), by striking
                    ``1995'' and inserting ``1998''; and
                        (C) in section 808 (7 U.S.C. 1441 note), by
                    striking ``1995'' and inserting ``1998''.
        (c) Assessment Under Peanut Marketing Agreement.--Section 8b(b)(1)
    of the Agricultural Adjustment Act (7 U.S.C. 608b(b)(1)), reenacted
    with amendments by the Agricultural Marketing Agreement Act of 1937, is
    amended--
                (1) by striking ``and'' at the end of subparagraph (A);
                (2) by striking the period at the end of subparagraph (B)
            and inserting ``; and''; and
                (3) by adding at the end the following new subparagraph:
                ``(C) any assessment imposed under such agreement shall
            apply to peanut handlers (as that term is defined by the
            Secretary) who have not entered into such an agreement with the
            Secretary in addition to those handlers who have entered into
            such agreement.''.
        (d) Customs Treatment of Certain Peanut Products.--
                (1) Temporary additional duties.--Subchapter I of chapter
            99 of the Harmonized Tariff Schedule of the United States is
            amended by inserting in numerical order the following new
            headings:

           ``  9901.11.10  Peanut paste (provided for in subheading 2007.99.65).....  55 cents/kg      No change        55 cents/kg      On or before 7/
                                                                                                                                          31/96
               9901.11.12  Peanut butter (provided for in subheading 2008.11.00)....  55 cents/kg      No change        55 cents/kg      On or before 7/
                                                                                                                                          31/96           ''

                (2) Inclusion of peanut butter in quota.--Heading
            9904.20.20 of the Harmonized Tariff Schedule of the United
            States is amended by striking out ``(except peanut butter)''.
                (3) Effective dates.--
                        (A) Temporary additional duties.--The amendment
                    made by paragraph (1) applies with respect to entries
                    and withdrawals from warehouse for consumption made on
                    or after the 15th day after the date of the enactment
                    of this Act.
                        (B) Quota amendment.--The amendment made by
                    paragraph (2) applies with respect to entries and
                    withdrawals from warehouse for consumption made after
                    July 31, 1996.

    SEC. 1110. HONEY PROGRAM.

        (a) Reduced Support Rate.--Subsection (a) of section 207 of the
    Agricultural Act of 1949 (7 U.S.C. 1446h) is amended by striking ``53.8
    cents'' and inserting ``50 cents''.
        (b) Payment Limitations.--Subsection (e)(1) of such section is
    amended--
                (1) by striking ``and'' at the end of subparagraph (C);
                (2) by striking subparagraph (D); and
                (3) by adding at the end the following new subparagraphs:
                        ``(D) $125,000 in the 1994 crop year;
                        ``(E) $100,000 in the 1995 crop year;
                        ``(F) $75,000 in the 1996 crop year; and
                        ``(G) $50,000 in each of the 1997 and subsequent
                    crop years.''.
        (c) Continuation of Deficit Reduction Activities.--Subsections (a),
    (c)(1), and (j) of such section are amended by striking ``1995'' each
    place it appears and inserting ``1998''.
        (d) Termination of Assessment.--Subsection (i)(1) of such section
    is amended by striking ``1995'' and inserting ``1993''.

    SEC. 1111. WOOL AND MOHAIR PROGRAM.

        (a) Payment Limitations.--Section 704(b)(1) of the National Wool
    Act of 1954 (7 U.S.C. 1783(b)(1)) is amended--
                (1) by striking ``and'' at the end of subparagraph (C);
                (2) by striking subparagraph (D); and
                (3) by adding at the end the following new subparagraphs:
                        ``(D) $125,000 for the 1994 marketing year;
                        ``(E) $100,000 for the 1995 marketing year;
                        ``(F) $75,000 for 1996 marketing year; and
                        ``(G) $50,000 for each of the 1997 and subsequent
                    marketing years.''.
        (b) Marketing Charges.--Section 706 of National Wool Act of 1954 (7
    U.S.C. 1785) is amended by inserting after the second sentence the
    following new sentence: ``In determining the net sales proceeds and
    national payment rates for shorn wool and shorn mohair the Secretary
    shall not deduct marketing charges for commissions, coring, or
    grading.''.
        (c) Continuation of Deficit Reduction Activities in Crop Years
    After 1995.--Subsections (a) and (b)(2) of section 703 of the National
    Wool Act of 1954 (7 U.S.C. 1782) are amended by striking ``1995'' both
    places it appears and inserting ``1998''.
        (d) Termination of Marketing Assessment.--Section 704(c) of the
    National Wool Act of 1954 (7 U.S.C. 1783(c)) is amended by striking
    ``1995'' and inserting ``1992''.
        (e) Technical and Conforming Amendments.--
                (1) Policy of congress.--Section 702 of the National Wool
            Act of 1954 (7 U.S.C. 1781) is amended--
                        (A) by striking ``, strategic,'' in the first
                    sentence; and
                        (B) by striking ``as a measure of national security
                    and to promote'' and inserting ``that as a method to
                    promote''.
                (2) Elimination of obsolete provision.--Section 703(b) of
            the National Wool Act of 1954 (7 U.S.C. 1782(b)) is amended--
                        (A) in paragraph (1), by striking ``paragraphs (2)
                    and (3)'' and inserting ``paragraph (2)'';
                        (B) in paragraph (2), by striking ``Except as
                    provided in paragraph (3), for'' and inserting ``For'';
                    and
                        (C) by striking paragraph (3).
                (3) Advertising and sales promotion programs.--Section 708
            of the National Wool Act of 1954 (7 U.S.C. 1787) is amended--
                        (A) by inserting ``(a)'' after ``Sec. 708.''; and
                        (B) by adding at the end the following new
                    subsection:
        ``(b)(1) Except as provided in paragraph (2), to the extent that
    the Secretary determines that the amount of funds that would otherwise
    be made available under subsection (a) in any marketing year for
    agreements entered into under such subsection is less than the amount
    made available under such subsection in the previous marketing year,
    the difference in such amounts shall be provided from amounts available
    to support the prices of wool and mohair under section 703 of this
    title. Any amount provided under this subsection shall be considered to
    be an expenditure made in connection with payments to producers under
    this title for purposes of section 705 of this title.
        ``(2) Paragraph (1) shall not apply if the Secretary determines
    that any portion of the difference between the amounts made available
    under subsection (a) between two consecutive marketing years is the
    result of a per unit reduction in the amount of the assessment imposed
    under the agreements entered into under such subsection.''.

    SEC. 1112. CONFORMING AMENDMENTS TO CONTINUE DEFICIT REDUCTION
                  ACTIVITIES IN CROP YEARS AFTER 1995.

        (a) Supplemental Set-Aside and Acreage Limitation Authority.--
    Section 113 of the Agricultural Act of 1949 (7 U.S.C. 1445h) is amended
    by striking ``1995'' and inserting ``1998''.
        (b) Deficiency and Land Diversion Payments.--Subsections (a)(1),
    (b), and (c) of section 114 of the Agricultural Act of 1949 (7 U.S.C.
    1445j) are amended by striking ``1995'' each place it appears and
    inserting ``1998''.
        (c) Disaster Payments.--Section 208 of the Agricultural Act of 1949
    (7 U.S.C. 1446i) is amended--
                (1) in the section heading, by striking ``1995'' and
            inserting ``1998'';
                (2) in subsection (d), by striking ``1995'' and inserting
            ``1998''.
        (d) Miscellaneous.--Title IV of the Agricultural Act of 1949 (7
    U.S.C. 1421 et seq.) is amended--
                (1) in section 402(b) (7 U.S.C. 1422(b)), by striking
            ``1995'' and inserting ``1998'';
                (2) in section 403(c) (7 U.S.C. 1423(c)), by striking
            ``1995'' and inserting ``1998'';
                (3) in section 406(b) (7 U.S.C. 1426(b))--
                        (A) by striking ``1995'' each place it appears and
                    inserting ``1998''; and
                        (B) by striking ``1996'' each place it appears and
                    inserting ``1999''; and
                (4) in section 408(k)(3) (7 U.S.C. 1428(k)(3)), by striking
            ``1995'' and inserting ``1998''.
        (e) Acreage Base and Yield System.--Title V of the Agricultural Act
    of 1949 (7 U.S.C. 1461 et seq.) is amended--
                (1) in subsections (c)(3) and (h)(2)(A) of section 503 (7
            U.S.C. 1463), by striking ``1995'' each place it appears and
            inserting ``1998'';
                (2) in subsections (b)(1) and (b)(2) of section 505 (7
            U.S.C. 1465), by striking ``1995'' each place it appears and
            inserting ``1998''; and
                (3) in section 509 (7 U.S.C. 1469), by striking ``1995''
            and inserting ``1998''.
        (f) Normally Planted Acreage.--Section 1001 of the Food and
    Agriculture Act of 1977 (7 U.S.C. 1309) is amended in subsections (a),
    (b)(1), and (c) by striking ``1995'' each place it appears and
    inserting ``1998''.
        (g) Agriculture and Food Act of 1981.--Section 1014 of the
    Agriculture and Food Act of 1981 (7 U.S.C. 4110) is amended by striking
    ``1995'' and inserting ``1998''.
        (h) Food Security Act of 1985.--The Food Security Act of 1985
    (Public Law 99-198; 99 Stat. 1354) is amended--
                (1) in section 902(c)(2)(A) (7 U.S.C. 1446 note), by
            striking ``1995'' and inserting ``1998'';
                (2) in paragraphs (1)(A), (1)(B), and (2)(A) of section
            1001 (7 U.S.C. 1308), by striking ``1995'' each place it
            appears and inserting ``1998'';
                (3) in section 1001C(a) (7 U.S.C. 1308-3(a)), by striking
            ``1995'' both places it appears and inserting ``1998'';
                (4) in section 1017(b) (7 U.S.C. 1385 note), by striking
            ``1995'' and inserting ``1998''; and
                (5) in section 1019 (7 U.S.C. 1310a), by striking ``1995''
            and inserting ``1998''.
        (i) Options Pilot Program.--The Options Pilot Program Act of 1990
    (subtitle E of title XI of Public Law 101-624; 104 Stat. 3518; 7 U.S.C.
    1421 note) is amended--
                (1) in subsections (a) and (b) of section 1153, by striking
            ``1995'' each place it appears and inserting ``1998''; and
                (2) in section 1154(b)(1)(A), by striking ``1995'' both
            places it appears and inserting ``1998''.
        (j) Readjustment of Support Levels.--Section 1302 of the
    Agricultural Reconciliation Act of 1990 (7 U.S.C. 1421 note) is amended
    in subsections (b)(1), (b)(3), and (d)(1)(C) by striking ``1995'' each
    place it appears and inserting ``1998''.

                   Subtitle B--Restructuring of Loan Programs

    SEC. 1201. RESTRUCTURING OF CERTAIN LOAN PROGRAMS.

        (a) Loan Programs Under the Rural Electrification Act of 1936.--
                (1) Insured loan programs.--Section 305 of the Rural
            Electrification Act of 1936 (7 U.S.C. 935) is amended--
                        (A) by striking subsections (b) and (d);
                        (B) by redesignating subsection (c) as subsection
                    (b); and
                        (C) by inserting after subsection (b) (as so
                    redesignated) the following:
        ``(c) Insured Electric Loans.--
                ``(1) Hardship loans.--
                        ``(A) In general.--The Administrator shall make
                    insured electric loans at an interest rate of 5 percent
                    per annum to any applicant therefor who meets each of
                    the following requirements:
                                ``(i) The average revenue per kilowatt-hour
                            sold by the applicant is not less than 120
                            percent of the average revenue per kilowatt-
                            hour sold by all utilities in the State in
                            which the borrower provides service.
                                ``(ii) The average residential revenue per
                            kilowatt-hour sold by the applicant is not less
                            than 120 percent of the average residential
                            revenue per kilowatt-hour sold by all utilities
                            in the State in which the borrower provides
                            service.
                                ``(iii) The average per capita income of
                            the residents receiving electric service from
                            the applicant is less than the average per
                            capita income of the residents of the State in
                            which the applicant provides service, or the
                            median household income of the households
                            receiving electric service from the applicant
                            is less than the median household income of the
                            households in the State.
                        ``(B) Severe hardship loans.--The Administrator may
                    make an insured electric loan at an interest rate of 5
                    percent per annum to an applicant therefor if, in the
                    sole discretion of the Administrator, the applicant has
                    experienced a severe hardship.
                        ``(C) Limitation.--The Administrator may not make a
                    loan under this paragraph to an applicant for the
                    purpose of furnishing or improving electric service to
                    a consumer located in an urban or urbanized area (as
                    defined by the Bureau of the Census) if the average
                    number of consumers per mile of line of the total
                    electric system of the applicant exceeds 17.
                ``(2) Municipal rate loans.--
                        ``(A) In general.--The Administrator shall make
                    insured electric loans, to the extent of qualifying
                    applications therefor, at the interest rate described
                    in subparagraph (B) for the term or terms selected by
                    the applicant pursuant to subparagraph (C).
                        ``(B) Interest rate.--
                                ``(i) In general.--Subject to clause (ii),
                            the interest rate described in this
                            subparagraph on a loan to a qualifying
                            applicant shall be--
                                        ``(I) the interest rate determined
                                    by the Administrator to be equal to the
                                    current market yield on outstanding
                                    municipal obligations with remaining
                                    periods to maturity similar to the term
                                    selected by the applicant pursuant to
                                    subparagraph (C), but not greater than
                                    the rate determined under section
                                    307(a)(3)(A) of the Consolidated Farm
                                    and Rural Development Act which is
                                    based on the current market yield on
                                    outstanding municipal obligations; plus
                                        ``(II) if the applicant for the
                                    loan makes an election pursuant to
                                    subparagraph (D) to include in the loan
                                    agreement the right of the applicant to
                                    prepay the loan, a rate equal to the
                                    amount by which--
                                                ``(aa) the interest rate on
                                            commercial loans for a similar
                                            period that afford the borrower
                                            such a right; exceeds
                                                ``(bb) the interest rate on
                                            commercial loans for such
                                            period that do not afford the
                                            borrower such a right.
                                ``(ii) Maximum rate.--The interest rate
                            described in this subparagraph on a loan to an
                            applicant therefor shall not exceed 7 percent
                            if--
                                        ``(I) the average number of
                                    consumers per mile of line of the total
                                    electric system of the applicant is
                                    less than 5.50; or
                                        ``(II)(aa) the average revenue per
                                    kilowatt-hour sold by the applicant is
                                    more than the average revenue per
                                    kilowatt-hour sold by all utilities in
                                    the State in which the borrower
                                    provides service; and
                                        ``(bb) the average per capita
                                    income of the residents receiving
                                    electric service from the applicant is
                                    less than the average per capita income
                                    of the residents of the State in which
                                    the applicant provides service, or the
                                    median household income of the
                                    households receiving electric service
                                    from the applicant is less than the
                                    median household income of the
                                    households in the State.
                                ``(iii) Exception.--Clause (ii) shall not
                            apply to a loan to be made to an applicant for
                            the purpose of furnishing or improving electric
                            service to consumers located in an urban or
                            urbanized area (as defined by the Bureau of the
                            Census) if the average number of consumers per
                            mile of line of the total electric system of
                            the applicant exceeds 17.
                        ``(C) Loan term.--
                                ``(i) In general.--Subject to clause (ii),
                            the applicant for a loan under this paragraph
                            may select the term during which the loan is to
                            be repaid, and, at the end of such term (and
                            any succeeding term selected by the applicant
                            under this subparagraph), may renew the loan
                            for another term selected by the applicant.
                                ``(ii) Maximum term.--Notwithstanding
                            clause (i), the applicant may not select a term
                            that ends more than 35 years after the
                            beginning of the 1st term the applicant selects
                            under clause (i).
                        ``(D) Call provision.--The Administrator shall
                    offer any applicant for a loan under this paragraph the
                    option to include in the loan agreement the right of
                    the applicant to prepay the loan on terms consistent
                    with similar provisions of commercial loans.
                ``(3) Other source of credit not required in certain
            cases.--The Administrator may not require any applicant for a
            loan made under this subsection who is eligible for a loan
            under paragraph (1) to obtain a loan from another source as a
            condition of approving the application for the loan or
            advancing any amount under the loan.
        ``(d) Insured Telephone Loans.--
                ``(1) Hardship loans.--
                        ``(A) In general.--The Administrator shall make
                    insured telephone loans, to the extent of qualifying
                    applications therefor, at an interest rate of 5 percent
                    per annum, to any applicant who meets each of the
                    following requirements:
                                ``(i) The average number of subscribers per
                            mile of line in the service area of the
                            applicant is not more than 4.
                                ``(ii) The applicant is capable of
                            producing net income or margins, after interest
                            payments on the loan applied for, of not less
                            than 100 percent (but not more than 300
                            percent) of the interest requirements on all of
                            the outstanding and proposed loans of the
                            applicant.
                                ``(iii) The Administrator has approved a
                            telecommunications modernization plan for the
                            State under paragraph (3), and, if the plan was
                            developed by telephone borrowers under this
                            title, the applicant is a participant in the
                            plan.
                        ``(B) Authority to waive tier requirement.--The
                    Administrator may waive the requirement of subparagraph
                    (A)(ii) in any case in which the Administrator
                    determines (and sets forth the reasons therefor in
                    writing) that the requirement would prevent emergency
                    restoration of the telephone system of the applicant or
                    result in severe hardship to the applicant.
                        ``(C) Effect of lack of funds.--On request of any
                    applicant who is eligible for a loan under this
                    paragraph for which funds are not available, the
                    applicant shall be considered to have applied for a
                    loan under title IV.
                ``(2) Cost-of-money loans.--
                        ``(A) In general.--The Administrator may make
                    insured telephone loans for the purchase and
                    installation of telephone lines, systems, and
                    facilities (other than buildings used primarily for
                    administrative purposes, vehicles not used primarily in
                    construction, and personal customer premise equipment)
                    directly related to the furnishing, improvement, or
                    extension of rural telecommunications service or the
                    acquisition of a rural telecommunications capability,
                    at an interest rate equal to the then cost of money to
                    the Government of the United States for loans of
                    similar maturity, but not more than 7 percent per
                    annum, to any applicant therefor who meets the
                    following requirements:
                                ``(i) The average number of subscribers per
                            mile of line in the service area of the
                            applicant is not more than 15.
                                ``(ii) The applicant is capable of
                            producing net income or margins, after interest
                            payments on the loan applied for, of not less
                            than 100 percent (but not more than 500
                            percent) of the interest requirements on all of
                            the outstanding and proposed loans of the
                            applicant.
                                ``(iii) The Administrator has approved a
                            telecommunications modernization plan for the
                            State under paragraph (3), and, if the plan was
                            developed by telephone borrowers under this
                            title, the applicant is a participant in the
                            plan.
                        ``(B) Call provision.--The Administrator shall
                    offer any applicant for a loan under this paragraph the
                    option to include in the loan agreement the right of
                    the applicant to prepay the loan.
                        ``(C) Concurrent loan authority.--On request of any
                    applicant for a loan under this paragraph during any
                    fiscal year, the Administrator shall--
                                ``(i) consider the application to be for a
                            loan under this paragraph and a loan under
                            section 408; and
                                ``(ii) if the applicant is eligible
                            therefor, make a loan to the applicant under
                            this paragraph in an amount equal to the amount
                            that bears the same ratio to the total amount
                            of loans for which the applicant is eligible
                            under this paragraph and under section 408, as
                            the amount made available for loans under this
                            paragraph for the fiscal year bears to the
                            total amount made available for loans under
                            this paragraph and under section 408 for the
                            fiscal year.
                        ``(D) Effect of lack of funds.--On request of any
                    applicant who is eligible for a loan under this
                    paragraph for which funds are not available, the
                    applicant shall be considered to have applied for a
                    loan guarantee under section 306.
                ``(3) State telecommunications modernization plans.--
                        ``(A) Approval.--If, within 6 months after final
                    regulations are promulgated to carry out this
                    paragraph, the public utility commission of any State
                    develops a telecommunications modernization plan that
                    meets the requirements of subparagraph (B), then the
                    Administrator shall approve the plan for the State.
                    Otherwise, the Administrator shall approve any
                    telecommunications modernization plan for the State
                    that meets such requirements, which is developed by a
                    majority of the borrowers of telephone loans made under
                    this title who are located in the State.
                        ``(B) Requirements.--A telecommunications
                    modernization plan must, at a minimum, meet the
                    following objectives:
                                ``(i) The plan must provide for the
                            elimination of party line service.
                                ``(ii) The plan must provide for the
                            availability of telecommunications services for
                            improved business, educational, and medical
                            services.
                                ``(iii) The plan must encourage and improve
                            computer networks and information highways for
                            subscribers in rural areas.
                                ``(iv) The plan must provide for--
                                        ``(I) subscribers in rural areas to
                                    be able to receive through telephone
                                    lines--
                                                ``(aa) multiple voices;
                                                ``(bb) video images; and
                                                ``(cc) data at a rate of at
                                            least 1,000,000 bits of
                                            information per second; and
                                        ``(II) the proper routing of
                                    information to subscribers.
                                ``(v) The plan must provide for uniform
                            deployment schedules to ensure that advanced
                            services are deployed at the same time in rural
                            and nonrural areas.
                        ``(C) Finality of approval.--A telecommunications
                    modernization plan approved under subparagraph (A) may
                    not subsequently be disapproved.''.
                (2) Rural telephone bank loan program.--Section 408 of the
            Rural Electrification Act of 1936 (7 U.S.C. 948) is amended--
                        (A) in subsection (a)--
                                (i) by striking ``, (1)'' and all that
                            follows through ``(3)'' and inserting ``(1) for
                            the purchase and installation of telephone
                            lines, systems, and facilities (other than
                            buildings used primarily for administrative
                            purposes, vehicles not used primarily in
                            construction, and personal customer premise
                            equipment) directly related to the furnishing,
                            improvement, or extension of rural
                            telecommunications service or the acquisition
                            of a rural telecommunications capability, and
                            (2)''; and
                                (ii) by striking ``(2) hereof'' and
                            inserting ``clause (1)'';
                        (B) in subsection (b)--
                                (i) by amending paragraph (4) to read as
                            follows:
                ``(4)(A) The Governor of the telephone bank may make a loan
            under this section only to an applicant therefor who meets the
            following requirements:
                        ``(i) The average number of subscribers per mile of
                    line in the service area of the applicant is not more
                    than 15.
                        ``(ii) The applicant is capable of producing net
                    income or margins, after interest payments on the loan
                    applied for, of not less than 100 percent (but not more
                    than 500 percent) of the interest requirements on all
                    of the outstanding and proposed loans of the applicant.
                        ``(iii) The Administrator has approved, under
                    section 305(d)(3), a telecommunications modernization
                    plan for the State in which the applicant is located,
                    and, if the plan was developed by telephone borrowers
                    under title III, the applicant is a participant in the
                    plan.'';
                                (ii) in paragraph (8)--
                                        (I) by inserting ``(A)'' after
                                    ``(8)'';
                                        (II) by striking ``if such
                                    prepayment is not made later than
                                    September 30, 1988'' and inserting
                                    ``except for any prepayment penalty
                                    provided for in a loan agreement
                                    entered into before the date of the
                                    enactment of the Omnibus Budget
                                    Reconciliation Act of 1993''; and
                                        (III) by adding at the end the
                                    following:
                ``(B) If a borrower prepays part or all of a loan made
            under this section, then, notwithstanding section 407(b), the
            Governor of the telephone bank shall--
                        ``(i) use the full amount of the prepayment to
                    repay obligations of the telephone bank issued pursuant
                    to section 407(b) before October 1, 1991, to the extent
                    any such obligations are outstanding; and
                        ``(ii) in repaying such obligations, first repay
                    the advances bearing the greatest rate of interest.'';
                    and
                                (iii) by adding at the end the following:
                ``(9) On request of any applicant for a loan under this
            section during any fiscal year, the Governor of the telephone
            bank shall--
                        ``(A) consider the application to be for a loan
                    under this section and a loan under section 305(d)(2);
                    and
                        ``(B) if the applicant is eligible therefor, make a
                    loan to the applicant under this section in an amount
                    equal to the amount that bears the same ratio to the
                    total amount of loans for which the applicant is
                    eligible under this section and under section
                    305(d)(2), as the amount made available for loans under
                    this section for the fiscal year bears to the total
                    amount made available for loans under this section and
                    under section 305(d)(2) for the fiscal year.
                ``(10) On request of any applicant who is eligible for a
            loan under this section for which funds are not available, the
            applicant shall be considered to have applied for a loan under
            section 305(d)(2).''; and
                        (C) by adding at the end the following:
        ``(e) Loans and advances made under this section on or after
    November 5, 1990, shall bear interest at a rate determined under this
    section, taking into account all assets and liabilities of the
    telephone bank. This subsection shall not apply to loans obligated
    before the date of the enactment of this subsection.''.
                (3) Funding.--Section 314 of such Act (7 U.S.C. 940d) is
            amended to read as follows:

    ``SEC. 314. LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.

        ``(a) In General.--There are authorized to be appropriated to the
    Administrator such sums as may be necessary for the cost of loans in
    the following amounts, for the following purposes and periods of time:
                ``(1) Electric hardship loans.--For loans under section
            305(c)(1)--
                        ``(A) for fiscal year 1994, $125,000,000; and
                        ``(B) for each of fiscal years 1995 through 1998,
                    $125,000,000, increased by the adjustment percentage
                    for the fiscal year.
                ``(2) Electric municipal rate loans.--For loans under
            section 305(c)(2)--
                        ``(A) for fiscal year 1994, $600,000,000; and
                        ``(B) for each of fiscal years 1995 through 1998,
                    $600,000,000, increased by the adjustment percentage
                    for the fiscal year.
                ``(3) Telephone hardship loans.--For loans under section
            305(d)(1)--
                        ``(A) for fiscal year 1994, $125,000,000; and
                        ``(B) for each of fiscal years 1995 through 1998,
                    $125,000,000, increased by the adjustment percentage
                    for the fiscal year.
                ``(4) Telephone cost-of-money loans.--For loans under
            section 305(d)(2)--
                        ``(A) for fiscal year 1994, $198,000,000; and
                        ``(B) for each of fiscal years 1995 through 1998,
                    $198,000,000, increased by the adjustment percentage
                    for the fiscal year.
        ``(b) Adjustment Percentage Defined.--As used in subsection (a),
    the term `adjustment percentage' means, with respect to a fiscal year,
    the percentage (if any) by which--
                ``(1) the average of the Consumer Price Index (as defined
            in section 1(f)(5) of the Internal Revenue Code of 1986) for
            the 12-month period ending on July 31 of the immediately
            preceding fiscal year; exceeds
                ``(2) the average of the Consumer Price Index (as so
            defined) for the 12-month period ending on July 31, 1993.
        ``(c) Mandatory Levels.--The Administrator shall make insured loans
    under this title from the Rural Electrification and Telephone Revolving
    Fund established under section 301, for the purposes, in the amounts,
    and for the periods of time specified in subsection (a), as provided in
    advance in appropriations Acts.
        ``(d) Availability of Funds for Insured Loans.--Amounts made
    available for loans under section 305 are authorized to remain
    available until expended.''.
                (4) Rule of interpretation.--Section 309(a) of such Act (7
            U.S.C. 939(a)) is amended by adding at the end the following:
            ``The preceding sentence shall not be construed to make section
            408(b)(2) or 412 applicable to this title.''.
                (5) Miscellaneous amendments.--
                        (A) Section 2 of such Act (7 U.S.C. 902) is
                    amended--
                                (i) by inserting ``(a)'' before ``The
                            Administrator'';
                                (ii) by striking ``telephone service in
                            rural areas, as hereinafter provided;'' and
                            inserting ``electric and telephone service in
                            rural areas, as provided in this Act, and for
                            the purpose of assisting electric borrowers to
                            implement demand side management and energy
                            conservation programs''; and
                                (iii) by adding at the end the following:
        ``(b) Not later than January 1, 1994, the Administrator shall issue
    interim regulations to implement the authority contained in subsection
    (a) to make loans for the purpose of assisting electric borrowers to
    implement demand side management and energy conservation programs. If
    such regulations are not issued by such date, the Administrator shall
    consider any demand side management program which is approved by a
    State agency to be eligible for such loans.''
                        (B) Section 4 of such Act (7 U.S.C. 904) is amended
                    by inserting ``and for the furnishing and improving of
                    electric service to persons in rural areas, including
                    by assisting electric borrowers to implement demand
                    side management and energy conservation programs''
                    after ``central station service''.
                        (C) Section 7 of such Act (7 U.S.C. 907) is
                    amended--
                                (i) by inserting ``(a)'' before ``The
                            Administrator is'';
                                (ii) by designating the 2nd undesignated
                            paragraph as subsection (b); and
                                (iii) by adding at the end the following:
        ``(c) Section 306(b) of the Consolidated Farm and Rural Development
    Act shall apply to a borrower of a loan under this Act in the same
    manner in which such section applies to an association referred to in
    such section.''.
                        (D) Section 13 of such Act (7 U.S.C. 913) is
                    amended--
                                (i) by inserting ``, except as provided in
                            section 203(b),'' before ``shall be deemed to
                            mean any area''; and
                                (ii) by striking ``city, village, or
                            borough having a population in excess of
                            fifteen hundred inhabitants'' and inserting
                            ``urban or urbanized area, as defined by the
                            Bureau of the Census''.
                        (E) Section 203(b) of such Act (7 U.S.C. 923(b)) is
                    amended by striking ``one thousand five hundred'' and
                    inserting ``5,000''.
                        (F) Section 307 of such Act (7 U.S.C. 937) is
                    amended by adding at the end the following: ``The
                    Administrator may not request any applicant for an
                    electric loan under this Act to apply for and accept a
                    loan in an amount exceeding 30 percent of the credit
                    needs of the applicant.''.
                        (G) Section 406 of such Act (7 U.S.C. 946) is
                    amended by adding at the end the following:
        ``(i) The Governor of the telephone bank may invest in obligations
    of the United States the amounts in the account in the Treasury of the
    United States numbered 12X8139 (known as `the RTB Equity Fund').''.
                        (H) Section 18 of such Act (7 U.S.C. 918) is
                    amended--
                                (i) by inserting ``(a) No Consideration of
                            Borrower's Level of General Funds.--'' before
                            ``The Administrator''; and
                                (ii) by adding at the end the following:
        ``(b) No Loan Origination Fees.--The Administrator and the Governor
    of the telephone bank may not charge any fee or charge not expressly
    provided in this Act in connection with any loan under this Act.''.
                        (I) Title III of such Act (7 U.S.C. 931-940d) is
                    amended by inserting after section 306B the following:

    ``SEC. 306C. ELIGIBILITY OF DISTRIBUTION BORROWERS FOR LOANS, LOAN
                  GUARANTEES, AND LIEN ACCOMMODATIONS.

        ``A distribution borrower not in default on the repayment of any
    loan made or guaranteed under this Act shall be eligible for a loan,
    loan guarantee, or lien accommodation under this title. For the purpose
    of determining such eligibility, a default by a borrower from which a
    distribution borrower purchases wholesale power shall not be considered
    a default by the distribution borrower.

    ``SEC. 306D. ADMINISTRATIVE PROHIBITIONS APPLICABLE TO ELECTRIC
                  BORROWERS.

        ``The Administrator may not require prior approval of, impose any
    requirement, restriction, or prohibition with respect to the operations
    of, or deny or delay the granting of a lien accommodation to, any
    electric borrower under this Act whose net worth exceeds 110 percent of
    the outstanding principal balance on all loans made or guaranteed to
    the borrower by the Administrator.''.
        (b) Expanded Eligibility for Loans for Water and Waste Disposal
    Facilities.--Section 306(a)(1) of the Consolidated Farm and Rural
    Development Act (7 U.S.C. 1926(a)(1)) is amended by inserting after the
    1st sentence the following: ``The Secretary may also make loans to any
    borrower to whom a loan has been made under the Rural Electrification
    Act of 1936, for the conservation, development, use, and control of
    water, and the installation of drainage or waste disposal facilities,
    primarily serving farmers, ranchers, farm tenants, farm laborers, rural
    businesses, and other rural residents.''.
        (c) Regulations.--Not later than October 1, 1993, the Administrator
    of the Rural Development Administration shall issue interim final rules
    to implement the amendments made by this section.

    SEC. 1202. REORGANIZATION OF RURAL DEVELOPMENT FUNCTIONS.

        (a) Administration of Rural Electrification Act of 1936 Transferred
    to the Rural Development Administration.--
                (1) In general.--The Rural Electrification Act of 1936 (7
            U.S.C. 901 et seq.) is amended by striking all after the
            enacting clause that precedes section 2 and inserting the
            following:

    ``SECTION 1. SHORT TITLE; ADMINISTRATION OF ACT.

        ``(a) Short Title.--This Act may be cited as the `Rural
    Electrification Act of 1936'.
        ``(b) Administration of Act.--The Administrator of the Rural
    Development Administration (in this Act referred to as the
    `Administrator') shall carry out this Act under the general direction
    and supervision of the Secretary of Agriculture.''.
                (2) Conforming amendments.--
                        (A) Section 3(a) of such Act (7 U.S.C. 903(a)) is
                    amended by striking ``appointed pursuant to the
                    provisions of this Act''.
                        (B) Section 8 of such Act (7 U.S.C. 908) is
                    amended--
                                (i) by striking ``authorized to be
                            appointed by this Act''; and
                                (ii) by striking ``Rural Electrification
                            Administration created by this Act'' and
                            inserting ``Rural Development Administration''.
                        (C) Each of the following provisions of such Act is
                    amended by striking ``Rural Electrification
                    Administration'' and inserting ``Rural Development
                    Administration'':
                                (i) Section 306A(b) (7 U.S.C. 936a(b)).
                                (ii) Section 403(b) (7 U.S.C. 943(b)).
                                (iii) Section 404 (7 U.S.C. 944).
                                (iv) Section 406(c) (7 U.S.C. 946(c)).
                                (v) Section 410(a)(1) (7 U.S.C. 950(a)(1)).
        (b) Other Functions of the Rural Electrification Administration
    Transferred to the Rural Development Administration.--Section 364 of
    the Consolidated Farm and Rural Development Act (7 U.S.C. 2006f) is
    amended by adding at the end the following:
        ``(g) Transfer of Functions of the Rural Electrification
    Administration to the Rural Development Administration.--
                ``(1) In general.--All rights, interests, obligations, and
            duties of the Administrator of the Rural Electrification
            Administration arising before the date of the enactment of this
            subsection, from any loan made, insured, or guaranteed by, or
            other action of, the Rural Electrification Administration shall
            be vested in the Administrator of the Rural Development
            Administration.
                ``(2) References.--Any reference in any law, regulation, or
            order in effect immediately before the date of the enactment of
            this subsection to the Rural Electrification Administration or
            to the Administrator of the Rural Electrification
            Administration, is deemed to be a reference to the Rural
            Development Administration or to the Administrator of the Rural
            Development Administration, respectively.
                ``(3) Effect on pending proceedings and parties to such
            proceedings.--
                        ``(A) Nonabatement of proceedings.--This subsection
                    shall not be construed to abate any proceeding
                    commenced by or against the Rural Electrification
                    Administration or the Administrator of the Rural
                    Electrification Administration.
                        ``(B) Effect on parties.--If an officer of the
                    Rural Electrification Administration, in the official
                    capacity of such officer, is a party to a proceeding
                    pending on the date of the enactment of this
                    subsection, then such action shall be continued with
                    the Administrator, or other appropriate officer, of the
                    Rural Development Administration substituted or added
                    as a party.
                ``(4) Incidental transfers.--The Secretary shall transfer
            all personnel from the Rural Electrification Administration to
            the Rural Development Administration, and shall make such
            determinations as may be appropriate to carry out this
            subsection.''.
        (c) Structure of the Rural Development Administration.--Such
    section 364 (7 U.S.C. 2006f), as amended by subsection (b) of this
    section, is amended by adding at the end the following:
        ``(h) Structure of the Rural Development Administration.--
                ``(1) Deputy administrator for rural utilities.--The
            Administrator of the Rural Development Administration shall
            appoint a Deputy Administrator for Rural Utilities who shall
            administer--
                        ``(A) the programs authorized by the Rural
                    Electrification Act of 1936; and
                        ``(B) the rural water and waste disposal programs
                    administered by the Rural Development Administration.
                ``(2) Assistant administrators.--The Administrator of the
            Rural Development Administration may appoint--
                        ``(A) an Assistant Administrator for the electric
                    programs authorized by the Rural Electrification Act of
                    1936;
                        ``(B) an Assistant Administrator for the telephone
                    programs authorized by such Act;
                        ``(C) an Assistant Administrator who shall be
                    responsible for--
                                ``(i) rural utility technical engineering
                            standards and specifications; and
                                ``(ii) other utility management and
                            accounting functions assigned by the
                            Administrator; and
                        ``(D) an Assistant Administrator for water and
                    sewer programs.''.
        (d) Rural Economic Development.--
                (1) In general.--Such section 364 (7 U.S.C. 2006f), as
            amended by subsections (b) and (c) of this section, is amended
            by adding at the end the following:
        ``(i) Rural Economic Development.--A borrower of a loan or loan
    guarantee under the Rural Electrification Act of 1936 shall be eligible
    for assistance under all programs administered by the Rural Development
    Administration, and the Administrator of the Rural Development
    Administration shall encourage and facilitate the full participation of
    such a borrower in such programs.
        ``(j) Technical Assistance Unit.--The Administrator of the Rural
    Development Administration shall establish a technical assistance unit
    to provide to borrowers under the programs administered by the Rural
    Development Administration advice and guidance on community and
    economic development activities.''.
                (2) Conforming repeal.--Section 11A of the Rural
            Electrification Act of 1936 (7 U.S.C. 911a) is hereby repealed.
        (e) Regulations.--Not later than January 1, 1994, the Administrator
    of the Rural Development Administration shall issue interim final rules
    to implement the amendments made by this section.

                         Subtitle C--Food Stamp Program

    SEC. 1301. SHORT TITLE.

        This subtitle may be cited as the ``Mickey Leland Childhood Hunger
    Relief Act''.

    SEC. 1302. REFERENCES TO THE ACT.

        Except as otherwise provided in this subtitle, references in this
    subtitle to ``the Act'' and sections of the Act shall be deemed to be
    references to the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) and
    the sections of such Act.

                  CHAPTER 1--ENSURING ADEQUATE FOOD ASSISTANCE

    SEC. 1311. MAXIMUM BENEFIT LEVEL.

        Section 3(o) of the Act (7 U.S.C. 2012(o)) is amended by striking
    ``(4) through'' and all that follows through the end of the subsection,
    and inserting the following:
    ``and (4) on October 1, 1993, and each October 1 thereafter, adjust the
    cost of such diet to reflect 104 percent of the cost of the thrifty
    food plan in the preceding June (without regard to adjustments made to
    such costs in any previous year), as determined by the Secretary, and
    round the result to the nearest lower dollar increment for each
    household size.''.

    SEC. 1312. HELPING LOW-INCOME HIGH SCHOOL STUDENTS.

        Section 5(d)(7) of the Act (7 U.S.C. 2014(d)(7)) is amended by
    striking ``who is a student, and who has not attained his eighteenth
    birthday'' and inserting ``who is an elementary or secondary school
    student, and who is 21 years of age or younger''.

    SEC. 1313. FAMILIES WITH HIGH SHELTER EXPENSES.

        (a) Computation.--Section 5(e) of the Act (7 U.S.C. 2014(e)) is
    amended--
                (1) in the fourth sentence by striking ``: Provided, That
            the amount'' and all that follows through ``June 30''; and
                (2) in the fifth sentence by striking ``under clause (2) of
            the preceding sentence''.
        (b) Limitations.--
                (1) Fiscal year 1994.--Effective on the date of enactment
            of this Act, section 5(e) of the Act (7 U.S.C. 2014(e)) is
            amended by inserting after the fourth sentence the following:
    ``In the 12-month period ending September 30, 1994, such excess shelter
    expense deduction shall not exceed $214 a month in the 48 contiguous
    States and the District of Columbia, and shall not exceed, in Alaska,
    Hawaii, Guam, and the Virgin Islands of the United States, $372, $305,
    $259, and $158 a month, respectively.''.
                (2) Removal of cap.--Effective October 1, 1994, section
            5(e) of the Act (7 U.S.C. 2014(e)), as amended by paragraph
            (1), is amended by striking the fifth sentence.

    SEC. 1314. RESOURCE EXCLUSION FOR EARNED INCOME TAX CREDITS.

        Section 5(g)(3) of the Act (7 U.S.C. 2014(g)(3)) is amended by
    adding at the end the following:
    ``The Secretary shall also exclude from financial resources any earned
    income tax credits received by any member of the household for a period
    of 12 months from receipt if such member was participating in the food
    stamp program at the time the credits were received and participated in
    such program continuously during the twelve-month period.''.

    SEC. 1315. HOMELESS FAMILIES IN TRANSITIONAL HOUSING.

        Section 5(k)(2)(F) of the Act (7 U.S.C. 2014(k)(2)(F)) is amended
    to read as follows:
                ``(F) housing assistance payments made to a third party on
            behalf of the household residing in transitional housing for
            the homeless;''.

    SEC. 1316. HOUSEHOLDS BENEFITING FROM GENERAL ASSISTANCE VENDOR
                  PAYMENTS.

        Section 5(k)(1)(B) of the Act (7 U.S.C. 2014(k)(1)(B)) is amended
    by striking ``living expenses'' and inserting ``housing expenses, not
    including energy or utility-cost assistance,''.

    SEC. 1317. CONTINUING BENEFITS TO ELIGIBLE HOUSEHOLDS.

        Section 8(c)(2)(B) of the Act (7 U.S.C. 2017(c)(2)(B)) is amended
    by inserting ``of more than one month in'' after ``following any
    period''.

    SEC. 1318. IMPROVING THE NUTRITIONAL STATUS OF CHILDREN IN PUERTO RICO.

        Section 19(a)(1)(A) of the Act (7 U.S.C. 2028(a)(1)(A)) is amended
    by--
                 (1) striking ``$1,091,000,000'' and inserting
            ``$1,111,000,000''; and
                (2) striking ``$1,133,000,000'' and inserting
            ``$1,158,000,000''.

                     CHAPTER 2--PROMOTING SELF SUFFICIENCY

    SEC. 1321. INCOME EXCLUSION FOR EDUCATION ASSISTANCE.

        Section 5 of the Act (7 U.S.C. 2014) is amended by--
                (1) amending subsection (d)(3) to read as follows:
                ``(3) all educational loans on which payment is deferred
            (including any loan origination fees or insurance premiums
            associated with such loans), grants, scholarships, fellowships,
            veterans' educational benefits, and the like awarded to a
            household member enrolled at a recognized institution of post-
            secondary education, at a school for the handicapped, in a
            vocational education program, or in a program that provides for
            completion of a secondary school diploma or obtaining the
            equivalent thereof,'';
                (2) striking ``, and no portion'' and all that follows
            through ``for living expenses,'' in subsection (d)(5); and
                (3) striking subsection (k)(3).

    SEC. 1322. CHILD SUPPORT PAYMENTS TO NON-HOUSEHOLD MEMBERS.

        Section 5(d)(6) of the Act (7 U.S.C. 2014(d)6)) is amended by
    striking the comma at the end and inserting the following--
    ``: Provided, That child support payments made by a household member to
    or for a person who is not a member of the household shall be excluded
    from the income of the household of the person making such payments if
    such household member was legally obligated to make such payments:
    Provided further, That the Secretary is authorized to prescribe by
    regulation the method(s), which may include calculation on a
    retrospective basis, that State agencies may use to determine the
    amount of child support excluded,''.

    SEC. 1323. CHILD SUPPORT EXCLUSION.

        Section 5 of the Act (7 U.S.C. 2014) is amended--
                (1) in subsection (d)(13)--
                        (A) by striking ``at the option'' and all that
                    follows through ``subsection (m),'' and inserting
                    ``(A)''; and
                        (B) by adding at the end ``or (B) the first $50 of
                    any child support payment in the month received if such
                    payment was made by the absent parent in the month when
                    due,''; and
                (2) by striking subsection (m).

    SEC. 1324. IMPROVING ACCESS TO EMPLOYMENT AND TRAINING ACTIVITIES.

        (a) Dependent Care Deduction.--Section 5(e) of the Act (7 U.S.C.
    2014(e)) is amended in clause (1) of the fourth sentence by--
                (1) striking ``$160 a month for each dependent'' and
            inserting ``$200 a month for a dependent child under 2 years of
            age and $175 a month for any other dependent''; and
                (2) striking ``, regardless of the dependent's age,''.
        (b) Reimbursements to Participants in Employment and Training
    Programs.--
                (1) Costs other than costs of dependent care.--Section
            6(d)(4)(I)(i)(I) of the Act (7 U.S.C. 2015(d)(4)(I)(i)(I)) is
            amended by striking ``, except that'' and all that follows
            through ``per month'' and inserting the following--
            ``(which may include reimbursements for costs of any supportive
            services of the kinds provided or reimbursed under the State's
            plan under part F of title IV of the Social Security Act (42
            U.S.C. 681 et seq.)), except that State agencies may establish
            limits on reimbursements to participants for such costs, which
            limits may not be less than $25 per month''.
                (2) Costs of dependent care.--Section 6(d)(4)(I)(i)(II) of
            the Act (7 U.S.C. 2015(d)(4)(I)(i)(II)) is amended to read as
            follows--
                ``(II) the actual costs of such dependent care expenses
            that are determined by the State agency to be necessary for the
            participation of an individual in the program (other than an
            individual who is the caretaker relative of a dependent in a
            family receiving benefits under part A of title IV of the
            Social Security Act (42 U.S.C. 601 et seq.) in a local area
            where an employment, training, or education program under title
            IV of such Act is in operation, or was in operation, on the
            date of enactment of the Hunger Prevention Act of 1988) up to
            any limit set by the State agency (which limit shall not be
            less than the limit for the dependent care deduction under
            section 5(e)), but in no event shall such payment or
            reimbursements exceed the applicable local market rate as
            determined by procedures consistent with any such determination
            under the Social Security Act. Individuals subject to the
            program under this paragraph may not be required to participate
            if dependent costs exceed the limit established by the State
            agency under this subclause or other actual costs exceed any
            limit established under subclause (I).''.
        (c) Conforming Amendments.--Section 16(h)(3) of the Act (7 U.S.C.
    2025(h)(3)) is amended by--
                (1) striking ``$25'' and all that follows through
            ``dependent care costs)'', and inserting ``the payment made
            under section 6(d)(4)(I)(i)(I) and subject to any limits the
            State has established under such section''; and
                (2) striking ``representing $160 per month per dependent''
            and inserting ``equal to the payment made under section
            6(d)(4)(I)(i)(II) but not more than the applicable local market
            rate,''.

    SEC. 1325. VEHICLES NEEDED TO SEEK AND CONTINUE EMPLOYMENT AND FOR
                  HOUSEHOLD TRANSPORTATION.

        Section 5(g)(2) of the Act (7 U.S.C. 2014(g)(2)) is amended by
    striking ``$4,500'' and inserting the following:
    ``a level set by the Secretary, which shall be $5,500 through September
    30, 1994, and which shall be adjusted on each October 1 thereafter to
    reflect changes in the new car component of the Consumer Price Index
    for All Urban Consumers published by the Bureau of Labor Statistics for
    the 12-month period ending on June 30 preceding the date of such
    adjustment and rounded to the nearest $50''.

    SEC. 1326. VEHICLES NECESSARY TO CARRY FUEL OR WATER.

        Section 5(g)(2) of the Act (7 U.S.C. 2014(g)(2)) is amended by
    adding at the end the following:
    ``The Secretary shall exclude from financial resources the value of a
    vehicle that a household depends upon to carry fuel for heating or
    water for home use when such transported fuel or water is the primary
    source of fuel or water for the household.''.

    SEC. 1327. DEMONSTRATION PROJECTS TESTING RESOURCE ACCUMULATION.

        Section 17 of the Act (7 U.S.C. 2026) is amended by adding at the
    end the following:
        ``(k) The Secretary may conduct, under such terms and conditions as
    the Secretary may prescribe, for a period not to exceed 4 years,
    demonstration projects to test allowing eligible households to
    accumulate resources up to $10,000 for later expenditure for a purpose
    directly related to improving the education, training, or employability
    (including self employment) of household members, for the purchase of a
    home for the household, for a change of the household's residence, or
    for making major repairs to the household's home. The Secretary is
    authorized to pay up to $100,000,000 in food stamp benefits to
    households participating in such demonstration projects during the
    period in which such projects are in operation.''.

            CHAPTER 3--SIMPLIFYING THE PROVISION OF FOOD ASSISTANCE

    SEC. 1331. SIMPLIFYING THE HOUSEHOLD DEFINITION FOR HOUSEHOLDS WITH
                  CHILDREN AND OTHERS.

        Section 3(i) of the Act (7 U.S.C. 2012(i)) is amended--
                (1) in the first sentence--
                        (A) by striking ``(2)'' and inserting ``or (2)'';
                        (B) by striking ``, or (3) a parent of minor
                    children and that parent's children'' and all that
                    follows through ``parents and children, or siblings,
                    who live together'', and inserting the following:
            ``. Spouses who live together, parents and their children 21
            years of age or younger (who are not themselves parents living
            with their children or married living with their spouses) who
            live together, and children (excluding foster children) under
            18 years of age who live with and are under the parental
            control of a person other than their parent together with the
            person exercising parental control''; and
                        (C) striking ``, unless one of '' and all that
                    follows through ``disabled member''; and
                (2) in the second sentence by striking ``clause (1) of the
            preceding sentence'' and inserting ``the preceding sentences''.

    SEC. 1332. ELIGIBILITY OF CHILDREN OF PARENTS PARTICIPATING IN DRUG OR
                  ALCOHOL ABUSE TREATMENT PROGRAMS.

        Section 3 of the Act (7 U.S.C. 2012) is amended--
                (1) in the last sentence of subsection (i) by inserting ``,
            together with their children,'' after ``narcotics addicts or
            alcoholics''; and
                (2) in subsection (g)(5) by inserting ``, and their
            children,'' after ``or alcoholics''.

    SEC. 1333. RESOURCES OF HOUSEHOLDS WITH DISABLED MEMBERS.

        Section 5(g)(1) of the Act (7 U.S.C. 2014(g)(1)) is amended by
    striking ``a member who is 60 years of age or older,'' and inserting
    ``an elderly or disabled member,''.

    SEC. 1334. ENSURING ADEQUATE FUNDING FOR THE FOOD STAMP PROGRAM.

        Section 18 of the Act (7 U.S.C. 2027) is amended by--
                (1) striking the third and fourth sentences of subsection
            (a)(1) and inserting the following--
    ``The Secretary shall, once every 3 months, submit a report to the
    Committee on Agriculture of the House of Representatives and to the
    Committee on Agriculture, Forestry, and Nutrition of the Senate setting
    forth the Secretary's best estimate of the preceding quarter's
    expenditure, including administrative costs, as well as the cumulative
    totals for the fiscal year. In each quarterly report, the Secretary
    shall also state whether there is reason to believe that supplemental
    appropriations will be needed to support the operation of the program
    through the end of the fiscal year.''; and
                (2) striking subsections (b), (c), and (d) and
            redesignating subsections (e) and (f) as subsections (b) and
            (c), respectively.

                     CHAPTER 4--IMPROVING PROGRAM INTEGRITY

    SEC. 1341. USE AND DISCLOSURE OF INFORMATION PROVIDED BY RETAIL FOOD
                  STORES AND WHOLESALE FOOD CONCERNS.

        Section 9(c) of the Act (7 U.S.C. 2018(c)) is amended--
                (1) in the second sentence by inserting after ``disclosed
            to and used by'' the following:
    ``State and Federal law enforcement and investigative agencies for the
    purposes of administering or enforcing the provisions of this Act or
    any other Federal or State law and the regulations issued under this
    Act or such law, and'';
                (2) by inserting after the second sentence the following:
    ``An officer or employee of an agency described in the preceding
    sentence who publishes, divulges, discloses, or makes known in any
    manner or to any extent not authorized by Federal law any information
    obtained under the authority granted by this subsection shall be
    subject to section 1905 of title 18 of the United States Code.''; and
                (3) in the last sentence by striking ``Such purposes shall
            not exclude'' and inserting the following--
    ``Such regulations shall establish the criteria to be used by the
    Secretary to determine that such information is needed. Such
    regulations shall not prohibit''.

    SEC. 1342. ADDITIONAL MEANS OF CLAIMS COLLECTION.

        (a) Safeguards.--Section 11(e)(8) of the Act (7 U.S.C. 2020(e)(8))
    is amended by--
                (1) striking ``and (B)'' and inserting ``(B)''; and
                (2) striking the semi-colon at the end and inserting the
            following:
            ``, and (C) such safeguards shall not prevent the use by, or
            disclosure of such information, to agencies of the Federal
            Government (including the United States Postal Service) for
            purposes of collecting the amount of an overissuance of
            coupons, as determined under section 13(b) of this Act and
            excluding claims arising from an error of the State agency,
            that has not been recovered pursuant to such section, from
            refunds of Federal taxes as authorized pursuant to section
            3720A of title 31 of the United States Code, or from Federal
            pay (including salaries and pensions) as authorized pursuant to
            section 5514 of title 5 of the United States Code;''.
        (b) Recovery.--Section 13 of the Act (7 U.S.C. 2022) is amended by
    adding the following:
        ``(d) The amount of an overissuance of coupons (as determined under
    subsection (b) and except for claims arising from an error of the State
    agency) that has not been recovered pursuant to such subsection may be
    recovered from refunds of Federal taxes, as authorized pursuant to
    section 3720A of title 31 of the United States Code, or from Federal
    pay (including salaries and pensions) as authorized by section 5514 of
    title 5 of the United States Code.''.

    SEC. 1343. DEMONSTRATION PROJECTS TESTING ACTIVITIES DIRECTED AT STREET
                  TRAFFICKING IN COUPONS.

        Section 17 of the Act (7 U.S.C. 2026) is amended by adding a new
    subsection (l) at the end thereof as follows--
        ``(l) The Secretary may use up to $4 million of funds provided in
    advance in appropriations Acts for projects authorized by this section
    in Fiscal Year 1994 to conduct projects in which State or local food
    stamp agencies test innovative ideas for working with State or local
    law enforcement agencies to investigate and prosecute coupon street
    trafficking by recipients, buyers, and authorized retail stores.''.

               CHAPTER 5--IMPROVING FOOD STAMP PROGRAM MANAGEMENT

    SEC. 1351. CLARIFICATION OF CATEGORICAL ELIGIBILITY.

        Effective on the date of enactment of this Act, section 5 of the
    Act (7 U.S.C. 2014) is amended by--
                (1) striking ``and the third sentence of section 3(i)''
            each place it appears in subsection (a) and inserting the ``,
            the third sentence of section 3(i), and section 20(f)''; and
                (2) striking ``II,'' in subsection (j).

    SEC. 1352. TECHNICAL AMENDMENTS RELATED TO ELECTRONIC BENEFIT TRANSFER.

        (a) Eligibility Disqualification of Individuals.--Section
    6(b)(1)(B) of the Act (7 U.S.C. 2015(b)(1)(B)) is amended by striking
    ``or authorization cards'' and inserting ``, authorization cards, or
    access devices''.
        (b) Eligibility Disqualification of Retail Food Stores and
    Wholesale Food Concerns.--Section 12(b)(3)(B) of the Act (7 U.S.C.
    2021(b)(3)(B)) is amended by--
                (1) striking ``or authorization cards'' and inserting ``,
            authorization cards, or access devices''; and
                (2) striking ``or cards'' and inserting ``, cards, or
            devices''.

    SEC. 1353. DISQUALIFICATION OF RECIPIENTS FOR TRADING FIREARMS,
                  AMMUNITION, EXPLOSIVES, OR CONTROLLED SUBSTANCES FOR
                  COUPONS.

        Section 6(b)(1) of the Act (7 U.S.C. 2015(b)(1)) is amended by
    striking subdivisions (ii) and (iii) and inserting the following:
                ``(ii) for a period of 1 year upon--
                        ``(I) the second occasion of any such
                    determination; or
                        ``(II) the first occasion of a finding of the
                    trading of a controlled substance (as defined in
                    section 102 of the Controlled Substances Act (21 U.S.C.
                    802)); and
                ``(iii) permanently upon--
                        ``(I) the third occasion of any such determination;
                        ``(II) the second occasion of a finding of the
                    trading of a controlled substance (as defined in
                    section 102 of the Controlled Substances Act (21 U.S.C.
                    802)) for coupons; or
                        ``(III) the first occasion of a finding of the
                    trading of firearms, ammunition, or explosives for
                    coupons.''.

    SEC. 1354. UNCAPPED CIVIL MONEY PENALTY FOR TRAFFICKING IN COUPONS.

        Effective on the date of enactment of this Act, section 12(b)(3)(B)
    of the Act (7 U.S.C. 2021(b)(3)(B)) is amended by striking ``(except''
    and all that follows through ``) in'', and inserting ``in''.

    SEC. 1355. UNCAPPED CIVIL MONEY PENALTY FOR SELLING FIREARMS,
                  AMMUNITION, EXPLOSIVES, OR CONTROLLED SUBSTANCES FOR
                  COUPONS.

        Effective on the date of enactment of this Act, section 12(b)(3)(C)
    of the Act (7 U.S.C. 2021(b)(3)(C)) is amended--
                (1) by striking ``substances (as the term is'' and
            inserting ``substance (as''; and
                (2) by striking ``(except'' and all that follows through
            ``) in'', and inserting ``in''.

    SEC. 1356. MODIFYING THE FOOD STAMP QUALITY CONTROL SYSTEM.

        (a) Amendments.--Section 16(c) of the Act (7 U.S.C. 2025(c)) is
    amended--
                (1) in paragraph (1)(C)--
                        (A) by striking ``payment error tolerance level''
                    and inserting ``national performance measure''; and
                        (B) by striking ``equal to'' and all that follows
                    through the period at the end, and inserting the
                    following:
            ``equal to--
                        ``(i) the product of--
                                ``(I) the value of all allotments issued by
                            the State agency in the fiscal year; times
                                ``(II) the lesser of--
                                        ``(aa) the ratio of--
                                                ``(1) the amount by which
                                            the State agency's payment
                                            error rate for the fiscal year
                                            exceeds the national
                                            performance measure for the
                                            fiscal year, to
                                                ``(2) the national
                                            performance measure for the
                                            fiscal year; or
                                        ``(bb) one; times
                                ``(III) the amount by which the State
                            agency's payment error rate for the fiscal year
                            exceeds the national performance measure for
                            the fiscal year.
                        ``(ii) The amount of liability shall not be
                    affected by corrective action under subparagraph
                    (B).'';
                (2) in paragraph (3)(A) by striking ``60 days (or 90 days
            at the discretion of the Secretary)'' and inserting ``120
            days''; and
                (3) in paragraph (6) by striking ``shall be used'' and all
            that follows through ``level'' the last place it appears.
        (b) Study by the Office of Technology Assessment.--The Office of
    Technology Assessment shall undertake a study of measurement error, any
    bias in penalty amounts, extreme value bias, regression formula, and of
    geographical and temporal uniformity of measurements, in the food stamp
    program quality control system, and shall report the results and
    recommendations of such study to the Committee on Agriculture of the
    House of Representatives and the Committee on Agriculture, Nutrition,
    and Forestry of the Senate not later than 12 months after the date of
    enactment of this Act.
        (c) Study by the Secretary of Agriculture.--The Secretary of
    Agriculture shall conduct a study of major causal factors which
    contribute to the payment error rate. The Secretary shall also conduct
    controlled experiments under which various reviewers review identical
    cases, with the objective of determining the degree of uniformity in
    quality control error-rate measurements and the extent to which
    different levels of investment of resources in the review process
    affect measurement error. The Secretary shall report the results and
    recommendations (including recommendations as to what measures would
    best reduce measurement error and increase uniformity of quality
    control error-rate measurements at reasonable cost) of such study to
    the Committee on Agriculture of the House of Representatives and the
    Committee on Agriculture, Nutrition, and Forestry of the Senate not
    later than 2 years after the date of enactment of this Act.

                     CHAPTER 6--UNIFORM REIMBURSEMENT RATES

    SEC. 1361. UNIFORM REIMBURSEMENT RATES.

        (a) Amendments.--Section 16 of the Act (7 U.S.C. 2025) is amended--
                (1) in subsection (a)--
                        (A) by striking ``and (5)'' and inserting ``(5)'';
                        (B) by inserting before the colon the following--
            ``, (6) automated data processing and information retrieval
            systems subject to the conditions set forth in subsection (g),
            (7) food stamp program investigations and prosecutions, and (8)
            implementing and operating the immigration status verification
            system under section 1137(d) of the Social Security Act (42
            U.S.C. 1320b-7(d))''; and
                        (C) in the proviso by inserting after ``75 per
                    centum'' the following:
            ``through June 30, 1994, 70 percent for the 1-year period
            beginning July 1, 1994, 60 percent for the 1-year period
            beginning July 1, 1995, and 50 percent for any subsequent
            period,'';
                (2) in subsection (g)--
                        (A) by inserting ``through June 30, 1995, equal to
                    60 percent for the 1-year period beginning July 1,
                    1995, and 50 percent effective July 1, 1996,'' after
                    ``1991,''; and
                        (B) by striking ``automatic'' and inserting
                    ``automated''; and
                (3) in subsection (j) by inserting after ``100 per centum''
            the following:
    ``through June 30, 1994, 70 percent for the 1-year period beginning
    July 1, 1994, 60 percent for the 1-year period beginning July 1, 1995,
    and 50 percent for any subsequent period,''.
        (b) Application of Amendments.--The reductions in enhanced Federal
    match rates for administration resulting from the amendments made by
    subsection (a) shall apply to payments to States for expenditures
    incurred only after--
                (1) the end of the State fiscal year that ends during 1994;
            or
                (2) in the case of a State with a State legislature which
            is not scheduled to have a regular legislative session in 1994,
            the end of the State fiscal year that ends during 1995;
    without regard to whether or not final regulations to carry out such
    amendments have been promulgated by the Secretary before the end of
    either of such State fiscal years.

                 CHAPTER 7--IMPLEMENTATION AND EFFECTIVE DATES

    SEC. 1371. IMPLEMENTATION AND EFFECTIVE DATES.

        (a) General Effective Date and Implementation.--Except as otherwise
    provided in this subtitle, this subtitle and the amendments made by
    this subtitle shall take effect, and shall be implemented beginning on,
    October 1, 1993.
        (b) Special Effective Dates and Implementation.--(1) Sections 1312,
    1315, 1316, 1317, 1322, 1323, 1326, 1331, 1333, and 1353 and the
    amendments made by such sections shall take effect, and shall be
    implemented beginning on, July 1, 1994.
        (2) Paragraphs (1) and (3) of section 1356(a) and the amendments
    made by such paragraphs shall take effect, and shall be implemented
    beginning on, October 1, 1991.
        (3) Paragraph (2) of section 1356(a) and the amendment made by such
    paragraph shall take effect, and shall be implemented beginning on,
    October 1, 1992.

                      Subtitle D--Miscellaneous Provisions

    SEC. 1401. MAXIMUM EXPENDITURES UNDER MARKET PROMOTION PROGRAM FOR
                  FISCAL YEARS 1994 THROUGH 1998.

        (a) Limitation.--Section 211(c)(1) of the Agricultural Trade Act of
    1978 (7 U.S.C. 5641(c)) is amended by striking ``not less than
    $200,000,000 for each of the fiscal years 1991 through 1995'' and
    inserting ``an amount equal to $147,734,000 for each of the fiscal
    years 1991 through 1998''.
        (b) Application of Amendments.--The amendment made by this section
    shall apply with respect to fiscal years beginning after September 30,
    1993.

    SEC. 1402. ADMISSION, ENTRANCE, AND RECREATION FEES.

        (a) Authority To Impose Fees.--
                (1) Entrance and admission fees.--The Secretary of
            Agriculture may charge admission or entrance fees at National
            Monuments, National Volcanic Monuments, National Scenic Areas,
            and areas of concentrated public use administered by the
            Secretary.
                (2) Recreation use fees.--The Secretary may charge
            recreation use fees at lands administered by the Secretary in
            connection with the use of specialized outdoor recreation
            sites, equipment, services, or facilities, including visitors'
            centers, picnic tables, boat launching facilities, or
            campgrounds.
        (b) Amount of Fees.--The amount of the admission, entrance, and
    recreation fees authorized to be imposed under this section shall be
    determined by the Secretary.
        (c) Definitions.--For purposes of this section:
                (1) The term ``area of concentrated public use'' means an
            area administered by the Secretary that meets each of the
            following criteria:
                        (A) The area is managed primarily for outdoor
                    recreation purposes.
                        (B) Facilities and services necessary to
                    accommodate heavy public use are provided in the area.
                        (C) The area contains at least one major recreation
                    attraction.
                        (D) Public access to the area is provided in such a
                    manner that admission fees can be efficiently collected
                    at one or more centralized locations.
                (2) The term ``boat launching facility'' includes any boat
            launching facility regardless of whether specialized facilities
            or services, such as mechanical or hydraulic boat lifts or
            facilities, are provided.
                (3) The term ``campground'' means any campground where a
            majority of the following amenities are provided, as determined
            by the Secretary:
                        (A) Tent or trailer spaces.
                        (B) Drinking water.
                        (C) An access road.
                        (D) Refuse containers.
                        (E) Toilet facilities.
                        (F) The personal collection of recreation use fees
                    by an employee or agent of the Secretary.
                        (G) Reasonable visitor protection.
                        (H) If campfires are permitted in the campground,
                    simple devices for containing the fires.
                (4) The term ``Secretary'' means the Secretary of
            Agriculture.

    SEC. 1403. ADDITIONAL PROGRAM CHANGES TO MEET RECONCILIATION
                  REQUIREMENTS.

        The Secretary of Agriculture shall consolidate personnel and field,
    regional, and national offices of agencies within the Department of
    Agriculture in order to reduce personnel and duplicative overhead
    expenses as a result of the consolidation such that Department
    expenditures are reduced by--
                (1) $90,000,000 in fiscal year 1995;
                (2) $97,000,000 in fiscal year 1996;
                (3) $135,000,000 in fiscal year 1997; and
                (4) $178,000,000 in fiscal year 1998.

    SEC. 1404. ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM
                  AMENDMENTS.

        (a) Enrollment Requirement.--
                (1) Conservation reserve program.--
                        (A) In general.--Section 1231(d) of the Food
                    Security Act of 1985 (16 U.S.C. 3831(d)) is amended--
                                (i) by striking ``the amount of acres
                            specified in section 1230(b)'' and inserting
                            ``a total of not more than 38,000,000 acres
                            during the 1986 through 1995 calendar years'';
                            and
                                (ii) by striking ``each of calendar years
                            1994 and 1995'' and inserting ``the 1995
                            calendar year''.
                        (B) Conforming amendment.--Section 1230(b) of such
                    Act (16 U.S.C. 3830(b)) is amended by striking ``to
                    place in'' and all that follows through ``acres''.
                (2) Wetlands reserve program.--
                        (A) In general.--Section 1237(b) of such Act (16
                    U.S.C. 3837(b)) is amended to read as follows:
        ``(b) Minimum Enrollment.--The Secretary shall enroll into the
    wetlands reserve program--
                ``(1) a total of not less than 330,000 acres by the end of
            the 1995 calendar year; and
                ``(2) a total of not less than 975,000 acres during the
            1991 through 2000 calendar years.''.
                        (B) Conforming amendment.--Section 1237(c) of such
                    Act (16 U.S.C. 3837(c)) is amended by striking ``1995''
                    and inserting ``2000''.
        (b) Use of Commodity Credit Corporation.--Section 1241 of such Act
    (16 U.S.C. 3841) is amended--
                (1) in subsection (a)--
                        (A) by striking ``(a)(1) During each of the fiscal
                    years ending September 30, 1986, and September 30,
                    1987'' and inserting ``(a) During each of the fiscal
                    years 1994 through 2000''; and
                        (B) by striking paragraph (2); and
                (2) in subsection (b), by striking ``(A) through (E)'' and
            inserting ``A through E''.

    SEC. 1405. LEVELS OF INSURANCE COVERAGE UNDER THE FEDERAL CROP
                  INSURANCE ACT.

        (a) Conversion of Program to Four Levels of Coverage.--The Federal
    Crop Insurance Act is amended--
                (1) in subsection (a) of section 508 (7 U.S.C. 1508)--
                        (A) in the first sentence, by striking ``If
                    sufficient actuarial data are available, as determined
                    by the Board,'' and inserting ``Subject to section
                    508B, based on the actuarial and underwriting data
                    available to the Board,''; and
                        (B) by striking the fifth, sixth, seventh, eighth,
                    ninth, tenth, fourteenth, fifteenth, and sixteenth
                    sentences; and
                (2) by inserting after section 508A (7 U.S.C. 1508a) the
            following new section:

    ``SEC. 508B. FOUR LEVELS OF CROP INSURANCE COVERAGE.

        ``(a) Four Levels of Coverage.--In making crop insurance available
    under section 508 to producers of agricultural commodities grown in the
    United States, the Corporation shall make available four levels of
    insurance coverage against losses in yields of the insured commodity:
                ``(1) Level i.--Coverage level I shall be available only to
            those producers who do not purchase insurance at coverage
            levels II, III, or IV and shall provide for the indemnification
            of those producers for losses in yield to the extent that such
            losses exceed 65 percent of the determined yield of the
            commodity for the farm, as established under subsection (b).
                ``(2) Levels ii, iii, and iv.--Coverage levels II, III, and
            IV shall provide for the indemnification of producers for those
            losses in yield to the extent that such losses exceed 50, 35,
            and 25 percent, respectively, of--
                        ``(A) the average proven yield on the farm for a
                    representative period based on the actual production
                    history of the farm, as determined from the producer's
                    records; or
                        ``(B) if such records are not available or are
                    insufficient, the recorded or appraised average yield
                    of the commodity on the farm for a representative
                    period, subject to such adjustments as the Board may
                    prescribe to ensure that the average yield for farms in
                    the same area, which are subject to the same
                    conditions, are fair and just.
        ``(b) Determined Yield.--For purposes of subsection (a)(1), the
    determined yield for a commodity shall be equal to--
                ``(1) in the case of a crop of any commodity for which the
            Agricultural Stabilization and Conservation Service establishes
            a yield for the farm, the yield so established; and
                ``(2) in the case of a crop of any other commodity, the
            recorded or appraised average yield of the commodity on the
            farm for a representative period, subject to such adjustments
            as the Board may prescribe to ensure that the average yield for
            farms in the same area, which are subject to the same
            conditions, are fair and just.
        ``(c) Use of ASCS Yield.--If the Agricultural Stabilization and
    Conservation Service has established a yield for a crop of a commodity
    for a farm and such yield is higher than the yield determined for the
    farm under subsection (a)(2) for coverage levels II, III, or IV, the
    producer may elect to use such higher yield for purpose of coverage
    levels II, III, and IV. Use of such higher yield shall be subject to an
    additional premium for the coverage at such a rate as the Board
    determines appropriate to accurately reflect the increased risk
    involved and that the Board determines to be actuarially sufficient to
    cover claims for losses on such insurance and to establish a reasonable
    reserve against unforeseen losses. No premium subsidy or administrative
    subsidy may be provided by the Corporation in connection with any
    additional coverage provided under this subsection.
        ``(d) Price Elections.--The Corporation shall establish a high and
    low price election for each agricultural commodity for which insurance
    is available under this title. The high price shall not be less than
    the projected market price of the commodity. Coverage levels II, III,
    and IV shall be available to producers at any price election that is
    equal to or less than the high price election and shall be quoted in
    terms of dollars per acre coverage that may be purchased. Coverage
    level I shall be offered only at the low price election.
        ``(e) Coverage and Price Information.--The Corporation shall ensure
    that each producer is provided accurate and adequate information at the
    time of application regarding the amount of coverage available at each
    level of coverage for the commodity to be insured and the cost to the
    producer for such coverage.
        ``(f) Annual Report.--The Corporation shall report annually to the
    Congress the results of its operations regarding each commodity for
    which insurance is available under this title. The report shall include
    for each insured commodity a description of operations under this
    section at each level of coverage.''.
        (b) Premium Payment.--Subsection (e)(3) of section 508 of the
    Federal Crop Insurance Act (7 U.S.C. 1508) is amended to read as
    follows:
        ``(3) For the purpose of encouraging the broadest possible
    participation in the crop insurance program, the Corporation shall
    pay--
                ``(A) with respect to each policy providing for coverage
            level I, the full amount of the premium for such coverage; and
                ``(B) with respect to each policy providing for coverage
            level II, III, or IV, the portion of the premium that is equal
            to the amount that would have been paid under subparagraph (A)
            if the producer had elected coverage level I.''.
        (c) Reinsurance.--Subsection (h) of section 508 of the Federal Crop
    Insurance Act (7 U.S.C. 1508) is amended to read as follows:
        ``(h) Reinsurance.--The Corporation shall provide reinsurance, to
    the maximum extent practicable, upon such terms and conditions as the
    Board may determine to be consistent with subsections (a) and (b) and
    with sound reinsurance principles promulgated pursuant to the Office of
    Federal Procurement Policy Act (41 U.S.C. 401, et seq.), which the
    Board shall modify as necessary to conform to the purposes of this Act,
    taking into account the expenses of the Corporation paid on its own
    policies of insurance. Reinsurance shall be provided to insurers
    including private insurance companies or pools of such companies,
    reinsurers of such companies, or State or local governmental entities,
    including any political subdivisions thereof, that insure producers of
    any agricultural commodity under a plan or plans acceptable to the
    Corporation. However, in the case of the sale of coverage level I
    policies only (but not for the processing and adjustment of claims on
    those policies), contractors of the Corporation shall be paid only $50
    per policy, of which $25.50 shall be paid by the policyholder at the
    time of application and $24.50 shall be paid by the Corporation.
    Whenever the Corporation provides reinsurance under this subsection to
    any such insurers, the Corporation shall pay (as provided in subsection
    (e)) the portion of the producer's premium for such insurance so
    reinsured. Insurers of policies on which reinsurance is provided shall
    make use of licensed private insurance agents and brokers on the same
    basis as provided for policies of the Corporation under section
    507(c)(3) of this title, except that the provisions for compensating
    agents and brokers from premiums paid by the insured shall not apply.
    The Corporation shall periodically revise its reinsurance agreement
    with the reinsured companies to provide for the reinsured companies to
    bear an increased share of any potential loss under such agreement, in
    cases in which the financial conditions of the reinsured companies and
    the availability of private reinsurance so permits.''.
        (d) Application of Amendments.--The amendments made by this section
    shall apply beginning with crops to be harvested in 1995.

                     TITLE II--COMMITTEE ON ARMED SERVICES

    SEC. 2001. LIMITATION ON COST-OF-LIVING ADJUSTMENTS FOR MILITARY
                  RETIREES.

        Paragraph (2) of section 1401a(b) of title 10, United States Code,
    is amended to read as follows:
                ``(2) Pre-august 1, 1986 members.--
                        ``(A) General rule.--The Secretary shall increase
                    the retired pay of each member and former member who
                    first became a member of a uniformed service before
                    August 1, 1986, by the percent (adjusted to the nearest
                    one-tenth of 1 percent) by which--
                                ``(i) the price index for the base quarter
                            of that year, exceeds
                                ``(ii) the base index.
                        ``(B) Special rule for fiscal years 1994 through
                    1998.--In the case of the increases in retired pay
                    that, pursuant to paragraph (1), become effective on
                    December 1 of each of fiscal years 1994, 1995, 1996,
                    1997, and 1998, the initial month for which each such
                    increase is payable as part of such retired pay shall
                    (notwithstanding such December 1 effective date) be as
                    set forth in the following table:

                                                      First month for which
                    ``Fiscal year:
                                                       increase is payable:
                            1994.........................     April 1994.
                            1995.........................     July 1995.
                            1996.........................     October 1996.
                            1997.........................     January 1998.
                            1998.........................     April 1999.
                        ``(C) Exclusion of disability retirees from rolling
                    cola.--Subparagraph (B) does not apply with respect to
                    the retired pay of a member retired under chapter 61 of
                    this title.''.

    SEC. 2002. ELIMINATION OF MILITARY PAY RAISE FOR FISCAL YEAR 1994 AND
                  REDUCTION IN THE AMOUNT OF THE RAISE FOR FISCAL YEARS
                  1995 THROUGH 1998.

        (a) Fiscal Year 1994.--During fiscal year 1994, no increase in the
    rates of basic pay, basic allowance for quarters, or basic allowance
    for subsistence of members of the uniformed services shall be made or
    take effect pursuant to section 1009 of title 37, United States Code.
        (b) One Percent Reduction in Subsequent Fiscal Years.--If the
    General Schedule of compensation for Federal classified employees is
    increased under section 5303 of title 5, United States Code, as amended
    by title X of this Act, during fiscal year 1995, 1996, 1997, or 1998,
    the elements of compensation of members of the uniformed services shall
    likewise be increased during that fiscal year in the manner provided in
    section 1009 of title 37, United States Code, based on the
    corresponding increase under section 5303 of title 5, United States
    Code (as so amended).

           TITLE III--COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS

    SEC. 3001. NATIONAL DEPOSITOR PREFERENCE.

        (a) In General.--Section 11(d)(11) of the Federal Deposit Insurance
    Act (12 U.S.C. 1821(d)(11)) is amended to read as follows:
                ``(11) Depositor preference.--
                        ``(A) In general.--Subject to section 5(e)(2)(C),
                    amounts realized from the liquidation or other
                    resolution of any insured depository institution by any
                    receiver appointed for such institution shall be
                    distributed to pay claims (other than secured claims to
                    the extent of any such security) in the following order
                    of priority:
                                ``(i) Administrative expenses of the
                            receiver.
                                ``(ii) Any deposit liability of the
                            institution.
                                ``(iii) Any claim of an employee of the
                            institution, other than a senior executive
                            officer (as defined by the Corporation pursuant
                            to section 32(f)), for pay accrued but unpaid
                            as of the date the receiver was appointed for
                            the institution.
                                ``(iv) Any other general or senior
                            liability of the institution (which is not a
                            liability described in clause (v) or (vi)).
                                ``(v) Any obligation subordinated to
                            depositors or other general creditors (which is
                            not an obligation described in clause (vi)).
                                ``(vi) Any obligation to shareholders
                            arising as a result of their status as
                            shareholders (including any depository
                            institution holding company or any shareholder
                            or creditor of such company).
                        ``(B) Effect on state law.--
                                ``(i) In general.--The provisions of
                            subparagraph (A) shall not supersede the law of
                            any State except to the extent such law is
                            inconsistent with the provisions of such
                            subparagraph, and then only to the extent of
                            the inconsistency.
                                ``(ii) Procedure for determination of
                            inconsistency.--Upon the Corporation's own
                            motion or upon the request of any person with a
                            claim described in subparagraph (A)(i) or any
                            State which is submitted to the Corporation in
                            accordance with procedures which the
                            Corporation shall prescribe, the Corporation
                            shall determine whether any provision of the
                            law of any State is inconsistent with any
                            provision of subparagraph (A) and the extent of
                            any such inconsistency.
                                ``(iii) Judicial review.--The final
                            determination of the Corporation under clause
                            (ii) shall be subject to judicial review under
                            chapter 7 of title 5, United States Code.
                        ``(C) Accounting report.--Any distribution by the
                    Corporation in connection with any claim described in
                    subparagraph (A)(vi) shall be accompanied by the
                    accounting report required under paragraph (15)(B).''.
        (b) Technical and Conforming Amendments.--
                (1) Section 11(c)(13) of the Federal Deposit Insurance Act
            (12 U.S.C. 1821(c)(13)) is amended--
                        (A) in subparagraph (A), by striking ``subject to
                    subparagraph (B),'';
                        (B) in inserting ``and'' after the semicolon at the
                    end of subparagraph (A);
                        (C) by striking subparagraph (B); and
                        (D) by redesignating subparagraph (C) as
                    subparagraph (B).
                (2) Section 11(g)(4) of the Federal Deposit Insurance Act
            (12 U.S.C. 1921(g)(4)) is amended by striking ``If the
            Corporation'' and inserting ``Subject to subsection (d)(11), if
            the Corporation''.
        (c) Effective Date.--The amendments made by this section shall
    apply with respect to insured depository institutions for which a
    receiver is appointed after the date of the enactment of this Act.

    SEC. 3002. TRANSFER OF FEDERAL RESERVE SURPLUSES.

        (a) In General.--The 1st undesignated paragraph of section 7 of the
    Federal Reserve Act (12 U.S.C. 289) is amended to read as follows:
        ``(a) Dividends and Surplus Funds of Reserve Banks.--
                ``(1) Stockholder dividends.--
                        ``(A) In general.--After all necessary expenses of
                    a Federal reserve bank have been paid or provided for,
                    the stockholders of the bank shall be entitled to
                    receive an annual dividend of 6 percent on paid-in
                    capital stock.
                        ``(B) Dividend cumulative.--The entitlement to
                    dividends under subparagraph shall be cumulative.
                ``(2) Deposit of net earnings in surplus fund.--That
            portion of net earnings of each Federal reserve bank which
            remains after dividend claims under subparagraph (A) have been
            fully met shall be deposited in the surplus fund of the bank.
                ``(3) Payment to treasury.--During fiscal years 1994
            through 1998, any amount in the surplus fund of any Federal
            reserve bank in the excess of the amount equal to 3 percent of
            the total paid-in capital and surplus of the member banks of
            such bank shall be transferred to the Board for transfer to the
            Secretary of the Treasury for deposit in the general fund of
            the Treasury.''.
        (b) Additional Transfers for Fiscal Years 1997 and 1998.--
                (1) In general.--In addition to the amounts required to be
            transferred from the surplus funds of the Federal reserve banks
            pursuant to section 7(a)(3) of the Federal Reserve Act, the
            Federal reserve banks shall transfer from such surplus funds to
            the Board of Governors of the Federal Reserve System for
            transfer to the Secretary of the Treasury for deposit in the
            general fund of the Treasury, a total amount of $106,000,000 in
            fiscal year 1997 and a total amount of $107,000,000 in fiscal
            year 1998.
                (2) Allocation by fed.--Of the total amount required to be
            paid by the Federal reserve banks under paragraph (1) for
            fiscal year 1997 or 1998, the Board of Governors of the Federal
            Reserve System shall determine the amount each such bank shall
            pay in such fiscal year.
                (3) Replenishment of surplus fund prohibited.--No Federal
            reserve bank may replenish such bank's surplus fund by the
            amount of any transfer by such bank under paragraph (1) during
            the fiscal year for which such transfer is made.
        (c) Technical and Conforming Amendments.--
                (1) The penultimate undesignated paragraph of section 7 of
            the Federal Reserve Act (12 U.S.C. 290) is amended by striking
            ``The net earnings derived'' and inserting ``(b) Use of
            Earnings Transferred to the Treasury.--The net earnings
            derived''.
                (2) The last undesignated paragraph of section 7 of the
            Federal Reserve Act (12 U.S.C. 531) is amended by striking
            ``Federal reserve banks'' and inserting ``(c) Exemption From
            Taxation.--Federal reserve banks''.

    SEC. 3003. USE OF RETURN DATA FOR INCOME VERIFICATION UNDER CERTAIN
                  HOUSING ASSISTANCE PROGRAMS.

        Section 904 of the Stewart B. McKinney Homeless Assistance
    Amendments Act of 1988 (42 U.S.C. 3544) is amended as follows:
                (1) Consent forms.--In subsection (b)--
                        (A) in the matter preceding paragraph (1), by
                    inserting ``(including the Indian housing program under
                    title II of the United States Housing Act of 1937)''
                    before the 1st comma;
                        (B) in paragraph (1), by striking ``and'' at the
                    end;
                        (C) in paragraph (2), by striking the period at the
                    end and inserting ``; and'';
                        (D) by inserting after paragraph (2) the following
                    new paragraph:
                ``(3) sign a consent from approved by the Secretary
            authorizing the Secretary to request the Commissioner of Social
            Security and the Secretary of the Treasury to release
            information pursuant to section 6103(l)(7)(D)(ix) of the
            Internal Revenue Code of 1986 with respect to such applicant or
            participant for the sole purpose of the Secretary verifying
            income information pertinent to the applicant's or
            participant's eligibility or level of benefits.''; and
                        (E) in the last sentence, by striking ``This'' and
                    inserting the following: ``Except as provided in this
                    subsection, this''.
                (2) Applicant and participant protections.--In subsection
            (c)(2)--
                        (A) in subparagraph (A)--
                                (i) in the matter preceding clause (i)--
                                        (I) by inserting after
                                    ``compensation law'' the following:
                                    ``or pursuant to section
                                    6103(i)(7)(D)(ix) of the Internal
                                    Revenue Code of 1986 from the
                                    Commissioner of Social Security or the
                                    Secretary of the Treasury''; and
                                        (II) by inserting ``(in the case of
                                    information obtained pursuant to such
                                    section 303(i))'' before
                                    ``representatives''; and
                                (ii) in clause (ii), by inserting ``or
                            public housing agency'' after ``owner'' each
                            place it appears;
                        (B) in subparagraph (B), by inserting after
                    ``wages'' each place it appears the following: ``,
                    other earnings or income,''; and
                        (C) in subparagraph (C), by inserting before the
                    second comma the following: ``at a hearing that
                    provides the basic elements of due process''.
                (3) Penalty.--In subsection (c)(3)--
                        (A) in subparagraph (A), by inserting ``or section
                    6103(l)(7)(D)(ix) of the Internal Revenue Code of
                    1986'' after ``Social Security Act''; and
                        (B) in the first sentence of subparagraph (B)--
                                (i) by striking clause (i) and inserting
                            the following: ``(i) a negligent or knowing
                            disclosure of information referred to in this
                            section, section 303(i) of the Social Security
                            Act, or section 6103(l)(7)(D)(ix) of the
                            Internal Revenue Code of 1986 about such person
                            by an officer or employee of any public housing
                            agency or owner (or employee thereof), which
                            disclosure is not authorized by this section,
                            such section 303(i), such section
                            6103(l)(7)(D)(ix), or any regulation
                            implementing this section, such section 303(i),
                            or such section 6103(l)(7)(D)(ix), or''; and
                                (ii) in clause (ii), by inserting ``such
                            6103(l)(7)(D)(ix),'' after ``303(i),''.
                (4) Conforming amendment.--The heading of subsection (c) of
            section 904 of the Stewart B. McKinney Homeless Assistance
            Amendments Act of 1988 is amended by striking ``State
            Employment''.

    SEC. 3004. GNMA REMIC GUARANTEE FEES.

        Section 306(g)(3) of the National Housing Act (12 U.S.C.
    1721(g)(3)) is amended by adding at the end the following new
    subparagraph:
        ``(E)(i) Notwithstanding subparagraphs (A) through (D), fees
    charged for the guaranty of, or commitment to guaranty, multiclass
    securities backed by a trust or pool of securities or notes guaranteed
    by the Association under this subsection and other related fees shall
    be charged by the Association in an amount not to exceed the value, as
    determined by the Association, of the guarantee or commitment to
    guarantee. The Association shall take such action as may be necessary
    to reasonably assure that such portion of the value of the guaranties
    or commitments to guaranty as the Association determines is appropriate
    accrues to the benefit of mortgagors under mortgages executed after the
    date of the enactment of this subparagraph by or upon which such
    securities or notes are backed.
        ``(ii) For each Federal fiscal year, the Association shall submit a
    report to the Congress describing any activities of the Association
    with respect to guarantying and making commitments to guaranty
    multiclass securities described in clause (i). The report shall be
    submitted not later than 90 days after the end of the fiscal year for
    which the report is made and shall identify the extent of such
    activities during the fiscal year, the size of each transaction closed
    during the fiscal year involving such securities, the number of
    mortgages involved in each such transaction, the amount of the fees
    charged and earned by the Association for such transactions, and any
    persons receiving payments for any services provided with respect to
    any such transactions and the amounts of such payments, and shall
    include an estimate of the portion of the value of the guarantee or
    commitment to guarantee accruing to the benefit of mortgagors and a
    description of any action taken by the Association to ensure such
    accrual.
        ``(iii) The Association shall provide for the initial
    implementation of the program for which fees are charged under the
    first sentence of clause (i) by notice published in the Federal
    Register. The notice shall be effective upon publication and shall
    provide an opportunity for public comment. Not later than 12 months
    after publication of the notice, the Association shall issue
    regulations for such program based on the notice, comments received,
    and the experience of the Association in carrying out the program
    during such period.''.

    SEC. 3005. MUTUAL MORTGAGE INSURANCE FUND PREMIUMS.

        To improve the actuarial soundness of the Mutual Mortgage Insurance
    Fund under the National Housing Act, the Secretary of Housing and Urban
    Development shall increase the rate at which the Secretary earns the
    single premium payment collected at the time of insurance of a mortgage
    that is an obligation of such Fund (with respect to the rate in effect
    on the date of the enactment of this Act). In establishing such
    increased rate, the Secretary shall consider any current audit findings
    and reserve analyses and information regarding the expected average
    duration of mortgages that are obligations of such Fund and may
    consider any other information that the Secretary determines to be
    appropriate.

                         TITLE IV--EDUCATION AND LABOR

    SEC. 4000. TABLE OF CONTENTS.

        The table of contents of this title is as follows:

                         TITLE IV--EDUCATION AND LABOR

    Sec. 4000. Table of contents.
                    Subtitle A--Federal Direct Loan Program

    Chapter 1--Amendments to Part D of Title IV of the Higher Education Act
                                    of 1965

    Sec. 4001. Short title; references.
    Sec. 4002. Federal Direct Student Loan Program.
                        Chapter 2--Conforming Amendments

    Sec. 4021. Preserving loan access.
    Sec. 4022. Guaranty agency reserves.
    Sec. 4023. Terms of loans.
    Sec. 4024. Assignment of loans.
    Sec. 4025. Termination of guaranty agency agreements; assumption of
                                guaranty agency functions by the Secretary.
    Sec. 4026. Administrative cost allowance.
    Sec. 4027. Consolidation loans.
    Sec. 4028. Student Loan Marketing Association.
    Sec. 4029. Authority to use optically imaged documents.
    Sec. 4030. Amendment to the Balanced Budget and Emergency Deficit
                                Control Act of 1985.
                       Chapter 3--Effective Dates; Study

    Sec. 4031. Effective dates.
    Sec. 4032. Study of Internal Revenue Service collection of student
                                loans.
    Sec. 4033. Preference of committee for IRS collection mechanism.
                       Subtitle B--Cost Sharing by States

    Sec. 4101. Cost sharing by States.
          Subtitle C--ERISA Amendments Relating to Group Health Plans

    Sec. 4201. Coordination of ERISA preemption rules with title XIX
                                provisions providing for liability of third
                                parties.
    Sec. 4202. Continued coverage of costs of a pediatric vaccine under
                                group health plans.
    Sec. 4203. Temporary rules governing preemption of certain State laws.

                    Subtitle A--Federal Direct Loan Program

    CHAPTER 1--AMENDMENTS TO PART D OF TITLE IV OF THE HIGHER EDUCATION ACT
                                    OF 1965

    SEC. 4001. SHORT TITLE; REFERENCES.

        (a) Short Title.--This subtitle may be cited as the ``Student Loan
    Reform Act of 1993''.
        (b) References.--References in this subtitle to ``the Act'' are
    references to the Higher Education Act of 1965 (20 U.S.C. 1001 et
    seq.).

    SEC. 4002. FEDERAL DIRECT STUDENT LOAN PROGRAM.

        Part D of title IV of the Act (20 U.S.C. 1087a et seq.) is amended
    to read as follows:

                 ``PART D--FEDERAL DIRECT STUDENT LOAN PROGRAM

    ``SEC. 451. PURPOSE; PROGRAM AUTHORIZATION.

        ``(a) Purpose.--It is the purpose of this part--
                ``(1) to simplify the delivery of student loans to
            borrowers and eliminate borrower confusion;
                ``(2) to provide a variety of repayment plans, including
            income contingent repayment through the EXCEL Account, to
            borrowers so that they have flexibility in managing their
            student loan repayment obligations, and so that those
            obligations do not foreclose community service-oriented career
            choices for those borrowers;
                ``(3) to replace, through an orderly transition, the
            Federal Family Education Loan Program under part B of this
            title with the Federal Direct Student Loan Program under this
            part;
                ``(4) to avoid the unnecessary cost, to taxpayers and
            borrowers, and administrative complexity associated with the
            Federal Family Education Loan Program under part B of this
            title through the use of a direct student loan program; and
                ``(5) to create a more streamlined student loan program
            that can be managed more effectively at the Federal level.
        ``(b) Program Authority.--There are hereby made available, in
    accordance with the provisions of this part, such sums as may be
    necessary to make loans to all eligible students in attendance at
    participating institutions of higher education selected by the
    Secretary (and the eligible parents of such students), to enable such
    students to pursue their courses of study at such institutions during
    the period beginning July 1, 1994. Such loans shall be made by
    participating institutions that have agreements with the Secretary to
    originate loans, or by alternative originators designated by the
    Secretary to make loans for students in attendance at participating
    institutions (and their parents).

    ``SEC. 452. FUNDS FOR ORIGINATION OF DIRECT STUDENT LOANS.

        ``(a) In General.--The Secretary shall provide, on the basis of the
    need and the eligibility of students at each participating institution,
    and parents of such students, for such loans, funds for student and
    parent loans under this part--
                ``(1) directly to an institution of higher education that
            has an agreement with the Secretary under section 454(a) to
            participate in the direct student loan programs under this part
            and that also has an agreement with the Secretary under section
            454(b) to originate loans under this part, or
                ``(2) through an alternative originator designated by the
            Secretary to students and parents of students attending
            institutions of higher education that have an agreement with
            the Secretary under section 454(a) but that do not have an
            agreement with the Secretary under section 454(b).
        ``(b) Fees for Origination Services.--
                ``(1) Fees for institutions.--The Secretary shall pay fees
            to institutions of higher education (or a consortium of such
            institutions) with agreements under section 454(b), in an
            amount established by the Secretary, to assist in meeting the
            costs of loan origination. Such fees--
                        ``(A) shall be paid by the Secretary based on all
                    the loans made under this part to a particular borrower
                    in the same academic year;
                        ``(B) shall be subject to a sliding scale that
                    decreases the amount of such fees as the number of
                    borrowers increases; and
                        ``(C)(i) for academic year 1994-1995, shall not
                    exceed a program-wide average of $10 per borrower for
                    all the loans made under this part in the same academic
                    year; and
                        ``(ii) for succeeding academic years, shall not
                    exceed such average fee as the Secretary shall
                    establish in regulations.
                ``(2) Fees for alternative originators.--The Secretary
            shall pay fees for loan origination services to alternative
            originators of loans made under this part in an amount
            established by the Secretary in accordance with the terms of
            the contract between the Secretary and each such alternative
            originator.
        ``(c) No Entitlement To Participate or Originate.--No institution
    of higher education shall have a right to participate in the programs
    authorized by this part, to originate loans, or to perform any program
    function under this part. Nothing in this subsection shall be construed
    so as to limit the entitlement of an eligible student attending a
    participating institution (or the eligible parent of such student) to
    borrow under this part.

    ``SEC. 453. SELECTION OF INSTITUTIONS FOR PARTICIPATION AND
                  ORIGINATION.

        ``(a) Phase-in of Program.--
                ``(1) General authority.--The Secretary shall enter into
            agreements pursuant to section 454(a) with institutions of
            higher education to participate in the direct student loan
            programs under this part, and agreements pursuant to section
            454(b) with institutions of higher education to originate loans
            in such programs, for academic years beginning on or after July
            1, 1994. Alternative origination services, through which an
            entity other than the participating institution at which the
            student is in attendance originates the loan, shall be provided
            by the Secretary, through one or more contracts under section
            456 or such other means as the Secretary may provide, for
            students attending participating institutions that do not
            originate direct student loans under this part. Such agreements
            for the first year of the program shall, to the extent
            feasible, be entered into not later than January 1, 1994.
                ``(2) Transition provisions.--In order to ensure an
            expeditious but orderly transition from the loan programs under
            part B of this title to the direct student loan programs under
            this part, the Secretary shall, in the exercise of his or her
            discretion, determine the number of institutions with which he
            or she shall enter into agreements under sections 454 (a) and
            (b) for any academic year, except that the Secretary shall
            exercise such discretion so as to achieve the following goals:
                        ``(A) for academic year 1994-1995, loans made under
                    this part shall represent 4 percent of the sum of new
                    student loan volume under this part and part B of this
                    title;
                        ``(B) for academic year 1995-1996, loans made under
                    this part shall represent 25 percent of the sum of new
                    student loan volume under this part and part B of this
                    title;
                        ``(C) for academic year 1996-1997, loans made under
                    this part shall represent 60 percent of the sum of new
                    student loan volume under this part and part B of this
                    title; and
                        ``(D) for academic year 1997-1998, loans made under
                    this part shall represent 100 percent of the sum of new
                    student loan volume under this part and part B of this
                    title.
                ``(3) Cash management.--The requirements of the Cash
            Management Improvement Act of 1990 (Public Law 101-453) shall
            apply to the program under this part only to the extent
            specified in a schedule established by the Secretaries of
            Education and the Treasury, except that such schedule shall
            provide for the application of all such requirements not later
            than July 1, 1998.
        ``(b) Selection Criteria for Participation.--
                ``(1) Application.--Each institution of higher education
            desiring to participate in the direct student loan program
            under this part shall submit an application satisfactory to the
            Secretary containing such information and assurances as the
            Secretary may require.
                ``(2) Agreement.--When the program authorized under this
            part is fully implemented, the Secretary shall enter into
            agreements under section 454(a) with institutions that submit
            applications in accordance with paragraph (1).
                ``(3) Transition selection criteria.--Until such full
            implementation, the Secretary shall select institutions for
            participation in the direct student loan program under this
            part, and shall enter into agreements with them under section
            454(a), from among those institutions that submit the
            applications described in paragraph (1), and meet such other
            eligibility requirements as the Secretary may prescribe, by--
                        ``(A)(i) categorizing such institutions according
                    to anticipated loan volume, length of academic program,
                    and control of the institution; and
                        ``(ii) selecting institutions that are reasonably
                    representative of the respective categories; and
                        ``(B) if needed to carry out the purposes of this
                    part, selecting additional institutions.
        ``(c) Selection Criteria for Origination.--
                ``(1) In general.--The Secretary may enter into a
            supplemental agreement with an institution (or a consortium of
            such institutions) that--
                        ``(A) has an agreement under subsection 454(a);
                        ``(B) desires to originate loans under this part;
                    and
                        ``(C) meets the criteria specified in paragraph
                    (2).
                ``(2) Transition selection criteria.--For academic year
            1994-1995, the Secretary may approve an institution to
            originate loans only if such institution--
                        ``(A) made loans under part E of this title in
                    academic year 1993-1994 and did not exceed the
                    applicable maximum default rate under section 464(g)
                    for the most recent fiscal year for which data are
                    available;
                        ``(B) is not on the reimbursement system of payment
                    for any of the programs under subpart 1 or 3 of part A,
                    part C, or part E;
                        ``(C) is not overdue on program or financial
                    reports or audits required under this title;
                        ``(D) is not subject to an emergency action, or a
                    limitation, suspension, or termination under section
                    428(b)(1)(T), 432(h), or 487(c);
                        ``(E) in the opinion of the Secretary, has not had
                    significant deficiencies identified by the State
                    postsecondary review entity under subpart 1 of part H
                    of this title;
                        ``(F) in the opinion of the Secretary, has not had
                    severe performance deficiencies for any of the programs
                    under this title, including those demonstrated by
                    audits or program reviews submitted or conducted during
                    the 5 calendar years immediately preceding the date of
                    application;
                        ``(G) provides an assurance that it has no
                    delinquent outstanding debts to the United States,
                    unless such debts are being repaid under or in
                    accordance with a repayment arrangement satisfactory to
                    the United States, or the Secretary in his or her
                    discretion determines that the existence or amount of
                    such debts has not been finally determined by the
                    cognizant Federal agency or agencies; and
                        ``(H) meets such other criteria as the Secretary
                    may establish to protect the financial interest of the
                    United States and to promote the purposes of this part.
                ``(3) Regulations governing approval after transition.--For
            academic year 1995-1996 and subsequent academic years, the
            Secretary shall publish regulations governing the approval of
            institutions to originate loans.
        ``(d) Consortia.--Subject to such requirements as the Secretary may
    prescribe, eligible institutions of higher education with agreements
    under section 454(a) may apply as consortia to originate loans under
    this part for students in attendance at such institutions. Such
    institutions shall each be required to meet the requirements of
    subsection (c) with respect to loan origination.

    ``SEC. 454. AGREEMENTS WITH INSTITUTIONS.

        ``(a) Participation Agreements.--An agreement with any institution
    of higher education for participation in the direct student loan
    program under this part shall--
                ``(1) provide for the establishment and maintenance of a
            direct student loan program at the institution under which the
            institution will--
                        ``(A) identify eligible students who seek student
                    financial assistance at such institution in accordance
                    with section 484;
                        ``(B) estimate the need of each such student as
                    required by part F of this title for an academic year,
                    provided that any loan obtained by a student under this
                    part with the same terms (except as otherwise provided
                    in this part) as loans made under section 428A or 428H,
                    or a loan obtained by a parent under this part with the
                    same terms (except as otherwise provided in this part)
                    as loans made under section 428B, or obtained under any
                    State-sponsored or private loan program, may be used to
                    offset the expected family contribution of the student
                    for that year;
                        ``(C) provide a statement that certifies the
                    eligibility of any student to receive a loan under this
                    part that is not in excess of the annual or aggregate
                    limit applicable to the amount of such loan, except
                    that the institution may, in exceptional circumstances
                    specified in regulations prescribed by the Secretary,
                    refuse to certify a statement that permits a student to
                    receive a loan under this part, or certify a loan
                    amount that is less than the student's determination of
                    need (as determined under part F of this title), if the
                    reason for such action is documented and provided in
                    written form to such student;
                        ``(D) set forth a schedule for disbursement of the
                    proceeds of the loan in installments, consistent with
                    the requirements of section 428G (other than subsection
                    (b)(1) of such section); and
                        ``(E) provide timely and accurate information--
                                ``(i) concerning the status of student
                            borrowers (and students on whose behalf parents
                            borrow under this part) while such students are
                            in attendance at the institution and concerning
                            any new information of which the institution
                            becomes aware for such students (or their
                            parents) after they leave the institution, to
                            the Secretary for the servicing and collecting
                            of loans made under this part; and
                                ``(ii) if the institution does not have an
                            agreement with the Secretary under subsection
                            (b), concerning student eligibility and need,
                            as determined under subparagraphs (A) and (B),
                            to the Secretary as needed for the alternative
                            origination of loans to eligible students and
                            parents in accordance with this part;
                ``(2) provide assurances that the institution will comply
            with requirements established by the Secretary relating to
            student loan information with respect to loans made under this
            part;
                ``(3) provide that the institution accepts responsibility
            and financial liability stemming from its failure to perform
            its functions pursuant to the agreement;
                ``(4) provide that students at the institution and their
            parents (with respect to such students) will not be eligible to
            participate in the programs under part B of this title for the
            period during which such institution participates in the direct
            student loan program under this part;
                ``(5) provide for the implementation of a quality assurance
            system, as established by the Secretary, to ensure that the
            institution is complying with program requirements and meeting
            program objectives;
                ``(6) provide that the institution will not charge any fees
            of any kind, however described, to student or parent borrowers
            for origination activities or the provision of any information
            necessary for a student or parent to receive a loan under this
            part, or any benefits associated with such loan; and
                ``(7) include such other provisions as the Secretary
            determines are necessary to protect the interests of the United
            States and to promote the purposes of this part.
        ``(b) Origination.--An agreement with any institution of higher
    education for the origination of loans under this part shall--
                ``(1) supplement the agreement entered into in accordance
            with subsection (a);
                ``(2) include provisions established by the Secretary that
            are similar to the participation agreement provisions described
            in paragraphs (1)(E)(ii), (2), (3), (4), (5), (6), and (7) of
            subsection (a), as modified to relate to the origination of
            loans by the institution;
                ``(3) provide that the institution will originate loans to
            eligible students and parents in accordance with this part; and
                ``(4) provide that the note or evidence of obligation on
            the loan shall be the property of the Secretary.
        ``(c) Withdrawal and Termination Procedures.--The Secretary shall
    establish procedures by which institutions may withdraw or be
    terminated from the program under this part.

    ``SEC. 455. TERMS AND CONDITIONS OF LOANS.

        ``(a) In General.--
                ``(1) Parallel terms, conditions, benefits, and amounts.--
            Unless otherwise specified in this part, loans made to
            borrowers under this part shall have the same terms,
            conditions, and benefits, and be available in the same amounts,
            as loans made to borrowers under sections 428, 428A, 428B, and
            428H of this title.
                ``(2) Designation of loans.--Loans made to borrowers under
            this part that, except as otherwise specified in this part,
            have the same terms, conditions, and benefits as loans made to
            borrowers under--
                        ``(A) section 428 shall be known as `Federal Direct
                    Student Loans';
                        ``(B) section 428A shall be known as `Federal
                    Direct Supplemental Loans for Students';
                        ``(C) section 428B shall be known as `Federal
                    Direct PLUS Loans'; and
                        ``(D) section 428H shall be known as `Federal
                    Direct Unsubsidized Student Loans'.
        ``(b) Interest Rates.--
                ``(1) Rates for fdsl and fdusl.--(A) For Federal Direct
            Student Loans and Federal Direct Unsubsidized Student Loans
            made before July 1, 1997, the applicable rate of interest
            shall, during any 12-month period beginning on July 1 and
            ending on June 30, be determined on the preceding June 1 and be
            equal to--
                        ``(i) the bond equivalent rate of 91-day Treasury
                    bills auctioned at the final auction held prior to such
                    June 1; plus
                        ``(ii) 3.1 percent,
            except that such rate shall not exceed 9 percent.
                ``(B) For Federal Direct Student Loans and Federal Direct
            Unsubsidized Student Loans made on or after July 1, 1997, the
            applicable rate of interest shall, during any 12-month period
            beginning on July 1 and ending on June 30, be determined on the
            preceding June 1 for all such loans and be equal to--
                        ``(i) the bond equivalent rate of the security with
                    a comparable maturity as established by the Secretary;
                    plus
                        ``(ii) 1 percent,
            except that such rate shall not exceed 9 percent.
                ``(2) Rates for fdsls.--(A) For Federal Direct Supplemental
            Loans for Students made before July 1, 1997, the applicable
            rate of interest shall, during any 12-month period beginning on
            July 1 and ending on June 30, be determined on the preceding
            June 1 and be equal to--
                        ``(i) the bond equivalent rate of 52-week Treasury
                    bills auctioned at the final auction held prior to such
                    June 1; plus
                        ``(ii) 3.1 percent,
            except that such rate shall not exceed 11 percent.
                ``(B) For Federal Direct Supplemental Loans for Students
            made on or after July 1, 1997, the applicable rate of interest
            shall, during any 12-month period beginning on July 1 and
            ending on June 30, be determined on the preceding June 1 for
            all such loans and be equal to--
                        ``(i) the bond equivalent rate of the security with
                    a comparable maturity as established by the Secretary;
                    plus
                        ``(ii) 1.5 percent,
            except that such rate shall not exceed 11 percent.
                ``(3) Rates for fdplus.--(A) For Federal Direct PLUS loans
            made before July 1, 1997, the applicable rate of interest
            shall, during any 12-month period beginning on July 1 and
            ending on June 30, be determined on the preceding June 1 for
            loans and be equal to--
                        ``(i) the bond equivalent rate of 52-week Treasury
                    bills auctioned at the final auction held prior to such
                    June 1; plus
                        ``(ii) 3.1 percent,
            except that such rate shall not exceed 10 percent.
                ``(B) For Federal Direct PLUS loans made on or after July
            1, 1997, the applicable rate of interest shall, during any 12-
            month period beginning on July 1 and ending on June 30, be
            determined on the preceding June 1 for all such loans and be
            equal to--
                        ``(i) the bond equivalent rate of the security with
                    a comparable maturity as established by the Secretary;
                    plus
                        ``(ii) 2.1 percent,
            except that such rate shall not exceed 10 percent.
                ``(4) Publication.--The Secretary shall determine the
            applicable rates of interest under this subsection after
            consultation with the Secretary of Treasury and shall publish
            such rate in the Federal Register as soon as practicable after
            the date of determination.
        ``(c) Loan Fee.--For academic years 1994-1995, 1995-1996, and 1996-
    1997, the Secretary shall charge the borrower of a loan made under this
    part a loan fee of 5 percent of the principal amount of the loan. For
    academic years 1997-1998 and succeeding academic years, the Secretary
    shall charge the borrower of a loan made under this part a loan fee of
    3.65 percent of the principal amount of the loan.
        ``(d) Repayment Plans.--
                ``(1) Design and selection.--Consistent with criteria
            established by the Secretary, the Secretary shall offer to a
            borrower of a loan made under this part a variety of plans for
            repayment of such loan, including principal and interest on the
            loan. The borrower shall be entitled to accelerate, without
            penalty, repayment on his or her loans. The borrower may
            choose--
                        ``(A) a standard repayment plan, with a fixed
                    annual repayment amount paid over a fixed period of
                    time, consistent with subsection (a)(1) of this
                    section;
                        ``(B) an extended repayment plan, with a fixed
                    annual repayment amount paid over an extended period of
                    time, provided that the borrower annually repays a
                    minimum amount determined by the Secretary, consistent
                    with the requirements of section 428(b)(1)(L);
                        ``(C) a graduated repayment plan, with annual
                    repayment amounts established at two or more graduated
                    levels and paid over a fixed or extended period of
                    time, provided that any of the borrower's scheduled
                    payments shall not be less than 50 percent, nor more
                    than 150 percent, of what the amortized payment on the
                    amount owed would be if the loan were repaid under the
                    standard repayment plan; and
                        ``(D) except for the borrower of a Federal Direct
                    PLUS Loan, an income contingent repayment plan known as
                    the `EXCEL Account,' with varying annual repayment
                    amounts based on the income of the borrower, paid over
                    an extended period of time, not to exceed a maximum
                    length of time determined by the Secretary.
                ``(2) Selection by secretary.--If a borrower of a loan made
            under this part does not select a repayment plan described in
            paragraph (1), the Secretary may provide the borrower with a
            repayment plan described in subparagraph (A), (B), or (C) of
            paragraph (1).
                ``(3) Changes in selections.--The borrower of a loan made
            under this part may change his or her selection of a repayment
            plan under paragraph (1), or the Secretary's selection of a
            plan for the borrower under paragraph (2), as the case may be,
            under such terms and conditions as may be established by the
            Secretary.
                ``(4) Alternative repayment plans.--The Secretary may
            provide, on a case-by-case basis, an alternative repayment plan
            to a borrower of a loan under this part who demonstrates to the
            satisfaction of the Secretary that the terms and conditions of
            the repayment plans available under paragraph (1) are not
            adequate to accommodate the borrower's exceptional
            circumstances. In designing such alternative repayment plans,
            the Secretary shall ensure that such plans do not exceed the
            cost to the Federal Government, as determined on the basis of
            the present value of future payments by such borrowers, of
            loans made using the plans available under paragraph (1).
                ``(5) Repayment after default.--The Secretary may require
            any borrower who has defaulted on a loan made under this part
            to--
                        ``(A) pay all reasonable collection costs
                    associated with such loan; and
                        ``(B) repay the loan pursuant to an EXCEL Account
                    in accordance with subsection (e).
        ``(e) Repayment Through EXCEL Accounts.--
                ``(1) Information and procedures.--The Secretary may obtain
            such information as is reasonably necessary regarding the
            income of a borrower (and the borrower's spouse, if applicable)
            of a loan made under this part that is, or may be, repaid
            pursuant to an EXCEL Account for the purpose of determining the
            annual repayment obligation of the borrower. Return and return
            information (as defined in section 6103 of the Internal Revenue
            Code of 1986) may be obtained under the preceding sentence only
            to the extent authorized by section 6103(l)(13) of such Code.
            The Secretary shall establish procedures for determining the
            borrower's repayment obligation on that loan for such year, and
            such other procedures as are necessary to implement effectively
            repayment pursuant to an EXCEL Account.
                ``(2) Repayment based on adjusted gross income.--A
            repayment schedule for a loan made under this part and repaid
            pursuant to an EXCEL Account shall be based on adjusted gross
            income (as defined in section 62 of the Internal Revenue Code
            of 1986, 26 U.S.C. 62) of the borrower or, if the borrower is
            married and files a Federal income tax return jointly with his
            or her spouse, on adjusted gross income of the borrower and his
            or her spouse.
                ``(3) Additional documents.--A borrower who chooses, or is
            required, to repay a loan made under this part pursuant to an
            EXCEL Account, and for whom adjusted gross income is
            unavailable or does not reasonably reflect his or her current
            income, shall provide to the Secretary other documentation of
            income satisfactory to the Secretary, which documentation the
            Secretary may use to determine an appropriate repayment
            schedule.
                ``(4) Repayment schedules.--EXCEL Account repayment
            schedules shall be established by the Secretary through
            regulations and shall require payments measured as a percentage
            of the appropriate portion of the annual income of the borrower
            (and the borrower's spouse, if applicable) as determined by the
            Secretary.
                ``(5) Calculation of balance due.--The balance due on a
            loan made under this part that is repaid pursuant to an EXCEL
            Account shall equal the unpaid principal amount of the loan,
            any accrued interest, and any fees, such as late charges,
            assessed on such loan. The Secretary may limit by regulation
            the amount of interest that may be capitalized on such loan,
            and the timing of any such capitalization.
                ``(6) Notification to borrowers.--The Secretary shall
            establish procedures under which a borrower of a loan made
            under this part who chooses or is required to repay such loan
            pursuant to an EXCEL Account is notified of the terms and
            conditions of such plan, including notification of such
            borrower--
                        ``(A) that the Internal Revenue Service will
                    disclose to the Secretary tax return information as
                    authorized under section 6103(l)(13) of the Internal
                    Revenue Code of 1986; and
                        ``(B) that if a borrower considers that special
                    circumstances, such as a loss of employment by the
                    borrower or his or her spouse, warrant an adjustment in
                    the borrower's loan repayment as determined using the
                    information described in subparagraph (A), or the
                    alternative documentation described in paragraph (3),
                    the borrower may contact the Secretary, who shall
                    determine whether such adjustment is appropriate, in
                    accordance with criteria established by the Secretary.
        ``(f) Deferment.--
                ``(1) Effect on principal and interest.--A borrower of a
            loan made under this part who meets the requirements described
            in paragraph (2) shall be eligible for a deferment, during
            which periodic installments of principal need not be paid, and
            interest--
                        ``(A) shall not accrue, in the case of a Federal
                    Direct Student Loan or a Federal Direct Consolidation
                    Loan that consolidated only Federal Direct Student
                    Loans, or a combination of such loans and Federal
                    Student Loans for which the student borrower received
                    an interest subsidy under section 428; or
                        ``(B) shall accrue and be capitalized or paid by
                    the borrower, in the case of a Federal Direct
                    Supplemental Loan for Students loan, a Federal Direct
                    PLUS Loan, a Federal Direct Unsubsidized Student Loan,
                    or a Federal Direct Consolidation Loan other than those
                    described in subparagraph (A).
                ``(2) Eligibility.--A borrower of a loan made under this
            part shall be eligible for a deferment during any period--
                        ``(A) during which the borrower--
                                ``(i) is pursuing at least a half-time
                            course of study at an eligible institution, as
                            determined by such institution; or
                                ``(ii) is pursuing a course of study
                            pursuant to a graduate fellowship program
                            approved by the Secretary, or pursuant to a
                            rehabilitation training program for individuals
                            with disabilities approved by the Secretary,
                    except that no borrower shall be eligible for a
                    deferment under this subparagraph, or a loan made under
                    this part (other than a Federal Direct PLUS Loan, or a
                    Federal Direct Consolidation Loan), while serving in a
                    medical internship or residency program;
                        ``(B) not in excess of 3 years during which the
                    borrower is seeking and unable to find full-time
                    employment; or
                        ``(C) not in excess of 3 years during which the
                    Secretary determines, in accordance with regulations
                    prescribed under section 435(o), that the borrower has
                    experienced or will experience an economic hardship,
                    regardless of the reason for such hardship.
        ``(g) Federal Direct Consolidation Loans.--A borrower of a loan
    made under this part may consolidate such loan with the loans described
    in subsections (a)(4) and (d)(1)(C) of section 428C only under the
    terms and conditions established by the Secretary under this part.
    Loans made under this subsection shall be known as `Federal Direct
    Consolidation Loans'.
        ``(h) Borrower Defenses.--Notwithstanding any other provision of
    State or Federal law, the Secretary shall specify in regulations
    (except as authorized under section 458(a)) which acts or omissions of
    an institution of higher education a borrower may assert as a defense
    to repayment of a loan made under this part, except that in no event
    may a borrower recover from the Secretary, in any action arising from
    or relating to a loan made under this part, an amount in excess of the
    amount such borrower has repaid on such loan.
        ``(i) Optically Imaged Documents.--Records maintained in accordance
    with section 484A(c) may be used in any proceeding, as permitted by
    section 484A(c), with respect to a loan made under this part.
        ``(j) Nondischargeability in Bankruptcy.--Notwithstanding any other
    provision of law, a loan made under this part shall not be
    dischargeable in bankruptcy.

    ``SEC. 456. CONTRACTS.

        ``(a) Contracts for Supplies and Services.--
                ``(1) In general.--The Secretary may award one or more
            contracts for services and supplies under subsection (b). The
            entities with which the Secretary may enter into such contracts
            may include, but are not limited to, agencies with agreements
            with the Secretary under sections 428(b) and (c), if such
            agencies are otherwise qualified and comply with the procedures
            applicable to the award of such contracts.
                ``(2) Exemption.--(A) The Secretary may, through June 30,
            1998, award contracts under this section without regard to the
            requirements in section 303 of the Federal Property and
            Administrative Services Act of 1949 (41 U.S.C. 253), section 18
            of the Office of Federal Procurement Policy Act (41 U.S.C.
            416), and section 8(e) of the Small Business Act (15 U.S.C.
            637(e)) and the corresponding requirements of the Federal
            Acquisition Regulations if the Secretary--
                        ``(i) determines in writing, on a case-by-case
                    basis, that the Government's need for the services and
                    supplies to be provided under the contract is of such
                    an unusual and compelling urgency that sources from
                    which the Secretary solicits bids or proposals must be
                    limited; and
                        ``(ii) notifies the Congress in writing of that
                    determination not more than 30 days after the award of
                    the contract.
                ``(B) The Secretary may make the determination described in
            subparagraph (A)(i) if the Secretary determines that exemption
            from the requirements described in subparagraph (A) is in the
            public interest and necessary for the orderly transition from
            the loan programs under part B to the direct student loan
            programs under this part.
                ``(C) On and after July 1, 1998, all statutory and
            regulatory requirements described in subparagraph (A) shall
            apply to the award of a contract under this section.
        ``(b) Contracts for Origination, Servicing, and Data Systems.--The
    Secretary may enter into one or more contracts for--
                ``(1) the alternative origination of loans to students
            attending institutions with agreements to participate in the
            program under this part (or their parents), if such
            institutions do not have agreements with the Secretary under
            section 454(b);
                ``(2) the servicing and collection of loans made under this
            part;
                ``(3) the establishment and operation of one or more data
            systems for the maintenance of records on all loans made under
            this part;
                ``(4) services to assist in the orderly transition from the
            loan programs under part B to the direct student loan programs
            under this part; and
                ``(5) such other aspects of the direct student loan
            programs as the Secretary determines are necessary to ensure
            the successful operation of the programs.

    ``SEC. 457. REPORTS.

        ``(a) Annual Reports.--The Secretary shall submit to the Congress
    not later than July 1, 1993, and each July 1 for the 5 succeeding years
    an annual report describing the progress and status of the loan program
    under this part.
        ``(b) Research, Demonstration, and Evaluation.--The Secretary may
    use a portion of the funds described in section 459 for research on, or
    the demonstration or evaluation of, any aspects of the program
    authorized by this part, including flexible repayment plans.

    ``SEC. 458. REGULATORY ACTIVITIES.

        ``(a) Notice in Lieu of Regulations for First Year of Program.--The
    Secretary shall publish in the Federal Register whatever standards,
    criteria, and procedures, consistent with the provisions of this part,
    the Secretary determines are reasonable and necessary to the successful
    implementation of the first year of the direct student loan program
    authorized by this part. Section 431 of the General Education
    Provisions Act shall not apply to the publication of such standards,
    criteria, and procedures.
        ``(b) Closing Date for Applications From Institutions.--The
    Secretary shall establish a date not later than October 1, 1993, as the
    closing date for receiving applications from institutions of higher
    education desiring to participate in the first year of the direct loan
    program under this part.
        ``(c) Publication of List of Participating Institutions and Control
    Group.--Not later than January 1, 1994, the Secretary shall publish in
    the Federal Register a list of the institutions of higher education
    selected to participate in the first year of the direct loan program
    under this part.

    ``SEC. 459. FUNDS FOR ADMINISTRATIVE EXPENSES.

        ``Each fiscal year, there shall be available to the Secretary of
    Education from funds not otherwise appropriated, funds to be obligated
    for administrative costs under this part, including the costs of the
    transition from the loan programs under part B to the direct student
    loan programs under this part and transition support for the expenses
    of guaranty agencies in servicing outstanding loans in their portfolios
    and in guaranteeing new loans, not to exceed $261,000,000 in fiscal
    year 1994, $346,000,000 in fiscal year 1995, $552,000,000 in fiscal
    year 1996, $596,000,000 in fiscal year 1997, and $749,000,000 in fiscal
    year 1998. If in any fiscal year, the Secretary determines that
    additional funds for administrative expenses are needed as a result of
    such transition, or the expansion of the direct student loan programs
    under this part, the Secretary is authorized to use funds available
    under this section for a subsequent fiscal year for such expenses,
    except that the total expenditures by the Secretary shall not exceed
    $2,504,000,000 in fiscal years 1994 through 1998. The Secretary is also
    authorized to carry over funds available under this section to a
    subsequent fiscal year.''.

                        CHAPTER 2--CONFORMING AMENDMENTS

    SEC. 4021. PRESERVING LOAN ACCESS.

        (a) Purpose.--It is the purpose of the amendments made by this
    section to provide the Secretary with flexible authority as needed to
    preserve access to student and parent loans under part B of title IV of
    the Act during the transition from the Federal Family Education Loan
    Program under such part to the Federal Direct Student Loan Program
    under part D of such title.
        (b) Advances to Guaranty Agencies for Lender-of-Last Resort
    Services.--
                (1) Amendment.--Section 428(j) of the Act is amended by
            adding at the end thereof the following new paragraph:
                ``(4) Advances to guaranty agencies for lender-of-last
            resort services during transition to direct lending.--(A) In
            order to ensure the availability of loan capital during the
            transition from the Federal Family Education Loan program under
            this part to the Federal Direct Student Loan program under part
            D of this title, the Secretary is authorized to provide a
            guaranty agency with additional advance funds in accordance
            with section 422(c)(7), with such restrictions on the use of
            such funds as are determined appropriate by the Secretary, in
            order to ensure that the guaranty agency will make loans as the
            lender-of-last-resort. Such agency shall make such loans in
            accordance with this subsection and the requirements of the
            Secretary.
                ``(B) Notwithstanding any other provision of this part, a
            guaranty agency serving as a lender-of-last-resort under this
            paragraph shall be paid a fee, established by the Secretary,
            for making such loans in lieu of interest and special allowance
            subsidies, and shall be required to assign such loans to the
            Secretary on demand. Upon such assignment, the portion of the
            advance represented by the loans assigned shall be considered
            repaid by such guaranty agency.''.
                (2) Conforming amendment.--Section 422(c)(7) of the Act is
            amended by striking ``to a guaranty agency'' through the end
            thereof and inserting the following: ``to a guaranty agency--
                        ``(A) in accordance with section 428(j), in order
                    to ensure that the guaranty agency shall make loans as
                    the lender-of-last-resort during the transition from
                    the Federal Family Education Loan Program under this
                    part to the Federal Direct Student Loan Program under
                    part D of this title; or
                        ``(B) if the Secretary is seeking to terminate the
                    guaranty agency's agreement, or assuming the guaranty
                    agency's functions, in accordance with section
                    428(c)(10)(F)(v), in order to assist the agency in
                    meeting its immediate cash needs, ensure the
                    uninterrupted payment of claims, or ensure that the
                    guaranty agency shall make loans as described in
                    subparagraph (A);''.
        (c) Lender Referral Services.--Section 428(e) of the Act is
    amended--
                (1) in paragraph (1)--
                        (A) by amending the paragraph heading to read as
                    follows: ``In general; agreements with guaranty
                    agencies.--'';
                        (B) by inserting the subparagraph designation
                    ``(A)'' immediately after the paragraph heading;
                        (C) by striking ``in any State'' and inserting
                    ``with which the Secretary has an agreement under
                    subparagraph (B)''; and
                        (D) by adding at the end thereof the following new
                    subparagraph:
                ``(B)(i) The Secretary may enter into agreements with
            guaranty agencies that meet standards established by the
            Secretary to provide lender referral services in geographic
            areas specified by the Secretary. Such guaranty agencies shall
            be paid in accordance with paragraph (3) for such services.
                ``(ii) The Secretary shall publish in the Federal Register
            whatever standards, criteria, and procedures consistent with
            the provisions of this part and part D of this title, the
            Secretary determines are reasonable and necessary to provide
            lender referral services under this subsection and ensure loan
            access to student and parent borrowers during the transition
            from the loan programs under this part to the direct student
            loan programs under part D of this title. Section 431 of the
            General Education Provisions Act shall not apply to the
            publication of such standards, criteria, and procedures.'';
                (2) in paragraph (2)--
                        (A) in the matter preceding subparagraph (A), by
                    striking ``in a State'' and inserting ``with which the
                    Secretary has an agreement under paragraph (1)(B)'';
                        (B) by amending subparagraph (A) to read as
                    follows:
                        ``(A) such student is either a resident of, or is
                    accepted for enrollment in, or is attending, an
                    eligible institution located in a geographic area for
                    which the Secretary (I) determines that loans are not
                    available to all eligible students, and (II) has
                    entered into an agreement with a guaranty agency under
                    paragraph (1)(B) to provide lender referral services;
                    and'';
                (4) in paragraph (3), by striking ``The'' and inserting
            ``From funds available for costs of transition under section
            459 of the Act, the''; and
                (5) by striking paragraph (5).
        (d) Student Loan Marketing Association.--Section 439(q) of the Act
    is amended--
                (1) in paragraph (1)(A)--
                        (A) in the first sentence, by striking ``the
                    Association or its designated agency may begin making
                    loans'' and inserting ``the Association or its
                    designated agent shall, subject to the limitations in
                    section 428(j)(3), begin making loans to such eligible
                    borrowers''; and
                        (B) by striking the second sentence;
                (2) in paragraph (2)(A), by striking ``the Association or
            its designated agent may'' and inserting ``the Association or
            its designated agent shall, subject to the limitations in
            section 428(j)(3),''; and
                (3) in paragraph (3), by striking ``that--'' through the
            end thereof and inserting the following: ``that the conditions
            that caused the implementation of this subsection have ceased
            to exist.''.

    SEC. 4022. GUARANTY AGENCY RESERVES.

        Section 422 of the Act is amended by adding at the end thereof the
    following new subsection:
        ``(g) Preservation of Guaranty Agency Reserves.--
                ``(1) Authority to recover funds.--Notwithstanding any
            other provision of law, the reserve funds of the guaranty
            agencies, and any assets purchased with such reserve funds,
            regardless of who holds or controls the reserves or assets,
            shall be considered to be the property of the United States to
            be used in the operation of the program authorized by this part
            or the program authorized by part D of this title. However, the
            Secretary may not require the return of all of a guaranty
            agency reserve funds to the Secretary unless he or she
            determines that such return is essential to the operation of
            the program authorized by this part or the program authorized
            by part D of this title, or to ensure the orderly termination
            of the guaranty agency's operations and the liquidation of its
            assets. The reserves shall be maintained by each guaranty
            agency to pay program expenses and contingent liabilities, as
            authorized by the Secretary, except that the Secretary may--
                        ``(A) direct a guaranty agency to return to the
                    Secretary a portion of its reserve fund which the
                    Secretary determines is unnecessary to pay the program
                    expenses and contingent liabilities of the guaranty
                    agency; and
                        ``(B) direct the guaranty agency to require the
                    return, to the guaranty agency or to the Secretary, of
                    any reserve funds or assets held by, or under the
                    control of, any other entity, which the Secretary
                    determines are necessary to pay the program expenses
                    and contingent liabilities of the guaranty agency, or
                    which are required for the orderly termination of the
                    guaranty agency's operations and the liquidation of its
                    assets.
                ``(2) Termination provisions in contracts.--To ensure that
            the funds and assets of the guaranty agency are preserved, any
            contract with respect to the administration of a guaranty
            agency's reserve funds, or the administration of any assets
            purchased or acquired with the reserve funds of the guaranty
            agency, that is entered into or extended by the guaranty
            agency, or any other party on behalf of or with the concurrence
            of the guaranty agency, after the effective date of this
            provision shall provide that the contract is terminable by the
            Secretary upon 30 days notice to the contracting parties if the
            Secretary determines that such contract includes an
            impermissible transfer of the reserve funds or assets, or is
            otherwise inconsistent with the terms or purposes of this
            section.''.

    SEC. 4023. TERMS OF LOANS.

        Section 428 of the Act is amended--
                (1) in subsection (b)(1)(D), by striking ``be subject to''
            through the end thereof and inserting the following: ``be
            subject to income contingent repayment in accordance with
            subsection (m);''; and
                (2) in subsection (m)--
                        (A) by amending paragraph (1) to read as follows:
                ``(1) Authority of secretary to require.--The Secretary may
            require any borrower who has defaulted on a loan made under
            this part that is assigned to the Secretary under subsection
            (c)(8) to repay that loan under an income contingent repayment
            plan, the terms and conditions of which shall be established by
            the Secretary and the same as, or similar to, the EXCEL Account
            established for purposes of part D of this title.''; and
                        (B) by striking paragraphs (2) through (4) and
                    inserting the following:
                ``(2) Loans for which income contingent repayment may be
            required.--A loan made under this part may be required to be
            repaid under this subsection if the note or other evidence of
            the loan has been assigned to the Secretary pursuant to
            subsection (c)(8).''.

    SEC. 4024. ASSIGNMENT OF LOANS.

        Section 428(c)(8) of the Act is amended by--
                (1) inserting the subparagraph designation ``(A)'' after
            the paragraph heading;
                (2) striking the second and third sentences; and
                (3) adding at the end thereof the following new
            subparagraph:
                ``(B) An orderly transition from the Federal Family
            Education Loan program under this part to the Federal Direct
            Student Loan program under part D of this title shall be deemed
            to be in the Federal fiscal interest, and a guaranty agency
            shall promptly assign loans to the Secretary under this
            paragraph upon his or her request.''.

    SEC. 4025. TERMINATION OF GUARANTY AGENCY AGREEMENTS; ASSUMPTION OF
                  GUARANTY AGENCY FUNCTIONS BY THE SECRETARY.

        Section 428(c)(10) of the Act is amended--
                (1) in subparagraph (C), by inserting a comma and ``as
            appropriate,'' immediately after ``the Secretary shall'';
                (2) in subparagraph (D)--
                        (A) by inserting the clause designation ``(i)''
                    after ``(D)'';
                        (B) by striking ``Each'' and inserting ``If the
                    Secretary is not seeking to terminate the guaranty
                    agency's agreement under subparagraph (E), or assuming
                    the guaranty agency's functions under subparagraph (F),
                    a'';
                        (C) by adding at the end thereof the following new
                    clause:
                ``(ii) If the Secretary is seeking to terminate the
            guaranty agency's agreement under subparagraph (E), or assuming
            the guaranty agency's functions under subparagraph (F), a
            management plan described in subparagraph (C) shall include the
            means by which the Secretary and the guaranty agency shall work
            together to ensure the orderly termination of the operations,
            and liquidation of the assets of, the guaranty agency.'';
                (3) in subparagraph (E)--
                        (A) in clause (ii), by striking ``or'' at the end
                    thereof;
                        (B) in clause (iii), by striking the period at the
                    end thereof and inserting a semicolon; and
                        (C) by adding at the end thereof the following new
                    clauses:
                        ``(iv) the Secretary determines that such action is
                    necessary to protect the Federal fiscal interest;
                        ``(v) the Secretary determines that such action is
                    necessary to ensure the continued availability of loans
                    to student or parent borrowers; or
                        ``(vi) the Secretary determines that such action is
                    necessary to ensure an orderly transition from the loan
                    programs under this part to the direct student loan
                    programs under part D of this title.'';
                (4) in subparagraph (F)--
                        (A) in the matter preceding clause (i), by striking
                    ``Except as provided in subparagraph (G), if'' and
                    inserting ``If'';
                        (B) by amending clause (v) to read as follows:
                        ``(v) provide the guaranty agency with additional
                    advance funds in accordance with section 422(c)(7),
                    with such restrictions on the use of such funds as is
                    determined appropriate by the Secretary, in order to--
                                ``(I) meet the immediate cash needs of the
                            guaranty agency;
                                ``(II) ensure the uninterrupted payment of
                            claims; or
                                ``(III) ensure that the guaranty agency
                            will make loans as the lender-of-last- resort,
                            in accordance with subsection (j)(4);'';
                        (C) in clause (vi)--
                                (i) by striking ``and to avoid'' and
                            inserting ``to avoid'';
                                (ii) by striking the period at the end
                            thereof and inserting ``, and to ensure an
                            orderly transition from the loan programs under
                            this part to the direct student loan programs
                            under part D of this title.''; and
                                (iii) by redesignating such clause as
                            clause (vii); and
                        (D) by inserting after clause (v) the following new
                    clause:
                        ``(vi) use all funds and assets of the guaranty
                    agency to assist in the activities undertaken in
                    accordance with this subparagraph and take appropriate
                    action to require the return, to the guaranty agency or
                    the Secretary, of any funds or assets provided by the
                    guaranty agency, under contract or otherwise, to any
                    person or organization; or'';
                (5) by striking subparagraph (G);
                (6) by redesignating subparagraphs (H), (I), and (J) as
            subparagraphs (I), (J), and (K), respectively;
                (7) by inserting after subparagraph (F) the following new
            subparagraphs:
                ``(G) Notwithstanding any other provision of Federal or
            State law, if the Secretary has terminated or is seeking to
            terminate a guaranty agency's agreement under subparagraph (E),
            or has assumed a guaranty agency's functions under subparagraph
            (F)--
                        ``(i) such guaranty agency may not file for
                    bankruptcy;
                        ``(ii) no State court may issue any order affecting
                    the Secretary's actions with respect to such guaranty
                    agency;
                        ``(iii) any contract with respect to the
                    administration of a guaranty agency's reserve funds, or
                    the administration of any assets purchased or acquired
                    with the reserve funds of the guaranty agency, that is
                    entered into or extended by the guaranty agency, or any
                    other party on behalf of or with the concurrence of the
                    guaranty agency, after the effective date of this
                    provision shall provide that the contract is terminable
                    by the Secretary upon 30 days notice to the contracting
                    parties if the Secretary determines that such contract
                    includes an impermissible transfer of the reserve funds
                    or assets, or is otherwise inconsistent with the terms
                    or purposes of this section; and
                        ``(iv) no provision of State law shall apply to the
                    actions of the Secretary in terminating the operations
                    of a guaranty agency.
                ``(H) Notwithstanding any other provision of law, the
            Secretary's liability for any outstanding liabilities of a
            guaranty agency (other than outstanding student loan guarantees
            under this part), the functions of which the Secretary has
            assumed, shall not exceed the fair market value of the reserves
            of the guaranty agency, minus any necessary liquidation or
            other administrative costs.''; and
                (8) in subparagraph (K) (as redesignated by paragraph (6)),
            by striking ``system, together'' through the end thereof and
            inserting the following: ``system and the progress of the
            transition from the loan programs under this part to the direct
            student loan programs under part D of this title.''.

    SEC. 4026. ADMINISTRATIVE COST ALLOWANCE.

        Section 428(f)(1) of the Act is amended--
                (1) in subparagraph (A), by striking ``The Secretary'' and
            inserting ``For a fiscal year prior to fiscal year 1994, the
            Secretary''; and
                (2) in subparagraph (B), by inserting ``prior to fiscal
            year 1994'' after ``any fiscal year''.

    SEC. 4027. CONSOLIDATION LOANS.

        Section 428C of the Act is amended--
                (1) by amending subsection (a)(3)(A) to read as follows:
                ``(3) Definition of eligible borrowers.--(A) For the
            purpose of this section, the term `eligible borrower' means a
            borrower who, at the time of application for a consolidation
            loan is in repayment status, or in a grace period preceding
            repayment, or is a delinquent or defaulted borrower who will
            reenter repayment through loan consolidation.'';
                (2) in subsection (b)--
                        (A) in paragraph (1)--
                                (i) in subparagraph (A)(ii), by inserting
                            ``with income-sensitive repayment terms'' after
                            ``obtain a consolidation loan'';
                                (ii) by redesignating subparagraph (E) as
                            subparagraph (F); and
                                (iii) by inserting after subparagraph (D)
                            the following new subparagraph:
                        ``(E) that the lender shall offer an income-
                    sensitive repayment schedule, established by the lender
                    in accordance with the regulations of the Secretary, to
                    the borrower of any consolidation loan made by the
                    lender on or after July 1, 1994; and'';
                        (B) in paragraph (4), by amending subparagraph (C)
                    to read as follows:
                        ``(C)(i) provides that periodic installments of
                    principal need not be paid, but interest shall accrue
                    and be paid in accordance with clause (ii), during any
                    period for which the borrower would be eligible for a
                    deferral under section 428(b)(1)(M), and that any such
                    period shall not be included in determining the
                    repayment period pursuant to subsection (c)(2) of this
                    section; and
                        ``(ii) provides that interest shall accrue and be
                    paid--
                                ``(I) by the Secretary, in the case of a
                            consolidation loan that consolidated only
                            Federal Stafford Loans for which the student
                            borrower received an interest subsidy under
                            section 428; or
                                ``(II) by the borrower, or capitalized, in
                            the case of a consolidation loan other than one
                            described in subclause (I);''; and
                        (C) by adding at the end thereof the following new
                    paragraph:
                ``(5) Direct loans.--In the event that a borrower is unable
            to obtain a consolidation loan with income-sensitive repayment
            terms acceptable to the borrower from a lender with an
            agreement under subsection (a)(1), the Secretary shall offer
            any such borrower who applies for it, a direct consolidation
            loan to be repaid pursuant to an EXCEL Account under part D of
            this title, except that the Secretary shall not offer such
            loans if, in his or her judgment, the Department does not yet
            have the necessary origination and servicing arrangements in
            place for such loans.''; and
                (3) in subsection (c)--
                        (A) in paragraph (1), by amending subparagraphs (B)
                    and (C) to read as follows:
                ``(B) A consolidation loan made before July 1, 1994, shall
            bear interest at an annual rate on the unpaid principal balance
            of the loan that is equal to the greater of--
                        ``(i) the weighted average of the interest rates on
                    the loans consolidated, rounded to the nearest whole
                    percent; or
                        ``(ii) 9 percent.
                ``(C) A consolidation loan made on or after July 1, 1994,
            shall bear interest at an annual rate on the unpaid principal
            balance of the loan that is equal to the weighted average of
            the interest rates on the loans consolidated, rounded upward to
            the nearest whole percent.'';
                        (B) in paragraph (2)(A)--
                                (i) in the matter preceding clause (i), by
                            striking out ``income sensitive repayment
                            schedules. Such repayment terms'' and inserting
                            in lieu thereof ``income sensitive repayment
                            schedules, established by the lender in
                            accordance with the regulations of the
                            Secretary. Except as required by such income
                            sensitive repayment schedules, or by the terms
                            of repayment pursuant to an EXCEL Account
                            offered by the Secretary under subsection
                            (b)(5), such repayment terms'';
                                (ii) by redesignating clauses (i), (ii),
                            (iii), (iv), and (v) as clauses (ii), (iii),
                            (iv), (v), and (vi), respectively;
                                (iii) by inserting immediately preceding
                            clause (ii) (as redesignated by clause (ii))
                            the following new clause:
                        ``(i) is less than $7,500, then such consolidation
                    loan shall be repaid in not more than 10 years;''; and
                                (iv) by adding a period at the end of
                            clause (vi) (as redesignated by clause (ii));
                        (C) by striking out suparagraph (B) of paragraph
                    (2); and
                        (D) by redesignating subparagraph (C) of paragraph
                    (2) as subparagraph (B); and
                        (E) in paragraph (3)(A), by inserting after the
                    subparagraph designation the following: ``except as
                    required by the terms of repayment pursuant to an EXCEL
                    Account offered by the Secretary under subsection
                    (b)(5),''.

    SEC. 4028. STUDENT LOAN MARKETING ASSOCIATION.

        Section 439 of the Act is further amended by adding at the end
    thereof the following new subsection:
        ``(s) Transition Study.--The Secretaries of Education and the
    Treasury shall prepare a study, to be completed within 6 months of the
    enactment of this provision, which shall examine alternatives
    concerning the status, operations, and purposes of the Association
    during and after the transition from the Federal Family Education Loan
    program to the Federal Direct Student Loan program. Such study shall--
                ``(1) consider how best to meet the needs of students and
            taxpayers;
                ``(2) reflect the need for the Association to maintain
            liquidity and perform other functions for the Federal Family
            Education Loan program during the transition from such program
            to the Federal Direct Student Loan program under part D of this
            title, including additional duties as specified by the
            Secretary of Education or the Secretary of the Treasury;
                ``(3) consider any appropriate change to part D of title
            VII, relating to the College Construction Loan Insurance
            Association; and
                ``(4) be considered by the Secretaries of Education and the
            Treasury in developing any legislative proposals concerning any
            changes to the status of the Association as a Government-
            sponsored enterprise or its duties under the Federal Family
            Education Loan program.''.

    SEC. 4029. AUTHORITY TO USE OPTICALLY IMAGED DOCUMENTS.

        (a) General Authority.--Section 484A of the Act is amended--
                (1) in the heading, by adding a semicolon and ``optically
            imaged documents'' after ``limitations''; and
                (2) by adding at the end thereof the following new
            subsection:
        ``(c) In General.--(1) It is the purpose of this subsection to--
                ``(A) allow the Secretary to use optical imaging technology
            to store and retrieve documents and records, including
            promissory notes and repayment agreements, required for the
            administration of the programs authorized under part D of this
            title, or for the administration of loans made under part B of
            this title that have been assigned to the Secretary;
                ``(B) permit the Secretary to destroy originals of such
            documents and records, including promissory notes and repayment
            agreements, after they have been optically imaged, thereby
            achieving significant savings in storage and retrieval costs;
            and
                ``(C) ensure that the Secretary may introduce as evidence
            in any proceeding with respect to the programs or loans
            described in subparagraph (A) optically imaged documents and
            records, including promissory notes and repayment agreements.
        ``(2) Notwithstanding any other provision of Federal or State law,
    an optically imaged copy of any document or record, including a
    promissory note or repayment agreement, may be introduced as evidence
    in any proceeding with respect to the programs or loans described in
    paragraph (1)(A) in any Federal or State court, or other tribunal, and
    such optically imaged copy shall be admissible in any court or tribunal
    of the United States or any State as if it were the original document
    or record and have the same force and effect as the original.
        ``(3) Nothing in this subsection shall be interpreted to preclude
    the admissibility of a duplicate of a document or record required for
    the administration of the programs or loans described in paragraph
    (1)(A) made by a technology other than optical imaging consistent with
    the Federal Rules of Evidence and section 1732 of title 28 of the
    United States Code, or applicable State law.
        ``(4) Nothing in this subsection shall be interpreted to preclude
    the admissibility of an optically imaged copy of any document or record
    in a proceeding outside the scope of this subsection consistent with
    the Federal Rules of Evidence and section 1732 of title 28 of the
    United States Code, or applicable State law.''.
        (b) Part B Authority.--Section 432 of the Act is amended by adding
    at the end thereof the following new subsection:
        ``(q) Optically Imaged Documents.--Records maintained in accordance
    with section 484A(c) may be used in any proceeding, as permitted by
    section 484A(c), with respect to a loan that was made under this part
    and has been assigned to the Secretary.''.
        (c) Conforming Amendment.--Section 487 of the Act is amended by
    adding at the end thereof the following new subsection:
        ``(f) Use of Optically Imaged Documents.--In any proceeding with
    respect to a program or activity under part D of this title, or with
    respect to a loan made under part B of this title that has been
    assigned to the Secretary, records maintained in accordance with
    section 484A may be used as provided in that section.''.

    SEC. 4030. AMENDMENT TO THE BALANCED BUDGET AND EMERGENCY DEFICIT
                  CONTROL ACT OF 1985.

        The Balanced Budget and Emergency Deficit Control Act of 1985 is
    amended--
                (1) in section 252(c)(1)(B), by striking ``guaranteed'';
                (2) in section 256(b)--
                        (A) by striking the subsection designation and
                    heading and inserting the following:
        ``(b) Effect of Orders on Student Loan Programs.--
                ``(1) Federal family education loan program.--(A)'';
                        (B) by redesignating paragraphs (2) and (3) as
                    subparagraphs (B) and (C), respectively, and by
                    indenting such subparagraphs by an additional 2 ems
                    spaces;
                        (C) in paragraph (1)(A) (as redesignated in
                    subparagraph (B)), by striking ``described in
                    paragraphs (2) and (3)'' and inserting ``described in
                    subparagraphs (B) and (C)'';
                        (D) in paragraph (1)(B) (as redesignated in
                    subparagraph (C)), by redesignating subparagraphs (A)
                    and (B) as clauses (i) and (ii), respectively; and
                        (E) by adding at the end thereof the following new
                    paragraph:
                ``(2) Federal direct student loan program.--(A) Any
            reductions that are required to be achieved from the Federal
            Direct Student Loan program operated under part D of title IV
            of the Higher Education Act of 1965 as a consequence of an
            order issued pursuant to section 254, shall be achieved only by
            the application of the measures described in subparagraph (B).
                ``(B) For any loan made during the period beginning on the
            date that an order issued under section 254 takes effect with
            respect to a fiscal year, and ending at the close of such
            fiscal year, the loan fee that is authorized to be collected
            pursuant to section 456(c) of such Act shall be increased by
            0.50 percent.''.

                       CHAPTER 3--EFFECTIVE DATES; STUDY

    SEC. 4031. EFFECTIVE DATES.

        (a) In General.--Except as otherwise provided in this section, the
    amendments made by this subtitle shall be effective upon enactment.
        (b) Income Contingent Repayment.--The amendments made by section
    4023 of this Act shall be effective for loans made in accordance with
    section 428 for periods of instruction beginning on or after July 1,
    1993, or made on or after July 1, 1993, in the case of loans made in
    accordance with section 428A, 428B, or 428C of the Act.
        (c) Administrative Cost Allowance.--The amendments made by section
    4026 of this Act shall be effective on October 1, 1994.
        (d) Consolidation Loans.--The amendments made by section 4027 of
    this Act (other than the amendment made by section 4027(2)(B)) shall be
    effective for loans made in accordance with section 428C of the Act or
    after July 1, 1994.

    SEC. 4032. STUDY OF INTERNAL REVENUE SERVICE COLLECTION OF STUDENT
                  LOANS.

        (a) General Rule.--The Secretary of Education, in consultation with
    the Secretary of the Treasury, shall conduct a study of the feasibility
    of implementing a system for the repayment of Federal student loans
    through wage withholding or other means involving the Internal Revenue
    Service. Such study shall include an examination of--
                (1) whether the Internal Revenue Service could implement
            such a system within its current resources and without
            adversely affecting the ability of the Internal Revenue Service
            to collect tax revenues,
                (2) the cumulative impact on voluntary compliance with the
            tax system of increased disclosure of tax return information
            and increased Internal Revenue Service involvement in nontax
            collection activities,
                (3) the anticipated effect on the management of Federal
            student loan collections and on borrower repayment of such
            loans, and
                (4) the ability of the Internal Revenue Service to
            effectively service student loans.
        (b) Recommendations.--Not later than the date 6 months after the
    date of the enactment of this Act, the Secretary of Education shall
    submit to the Congress a report on the study conducted under subsection
    (a), together with such legislative recommendations as such Secretary
    may deem advisable.

    SEC. 4033. PREFERENCE OF COMMITTEE FOR IRS COLLECTION MECHANISM.

        It is the sense of the Committee on Education and Labor that--
                (1) the Committee may not, consistent with its jurisdiction
            under the Rules of the House of Representatives, amend this Act
            to include provisions providing for the collection of student
            loans pursuant to the Internal Revenue Code of 1986 using the
            Internal Revenue Service of the Department of the Treasury;
                (2) the Committee would support the amendment of this Act
            to include such provisions, as well as amendments to the Higher
            Education Act of 1965, in the manner proposed by H.R. ________
            as introduced on May 11, 1993; and
                (3) the Committee recommends that the House of
            Representatives consider and adopt such amendments.

                       Subtitle B--Cost Sharing by States

    SEC. 4101. COST SHARING BY STATES.

        (a) Amendment.--Section 428 of the Higher Education Act of 1965 (20
    U.S.C. 1001 et seq.) is amended by adding at the end thereof the
    following new subsection:
        ``(n) State Share of Default Costs.--(1) In the case of any State
    in which there are located any institutions of higher education with
    cohort default rates that exceed 20 percent, such State shall pay to
    the Secretary an amount equal to--
                ``(A) the new loan volume attributable to all institutions
            in the State for the current fiscal year, multiplied by
                ``(B) the percentage specified in paragraph (2), multiplied
            by
                ``(C) the quotient of--
                        ``(i) the sum of the amounts calculated under
                    paragraph (3) for each such institution in the State,
                    divided by
                        ``(ii) the total amount of loan volume attributable
                    to current and former students of institutions located
                    in that State entering repayment in the period used to
                    calculate the cohort default rate.
        ``(2) For purposes of paragraph (1)(B), the percentage used shall
    be--
                ``(A) 12.5 percent for fiscal year 1995;
                ``(B) 20 percent for fiscal year 1996; and
                ``(C) 50 percent for fiscal year 1997 and succeeding fiscal
            years.
        ``(3) For purposes of paragraph (1)(C)(i), the amount shall be
    determined by calculating for each institution the amount by which--
                ``(A) the amount of the loans received for attendance by
            its current and former students who (i) enter repayment during
            the fiscal year used for the calculation of the cohort default
            rate, and (ii) default before the end of the following fiscal
            year; exceeds
                ``(B) 20 percent of the loans received for attendance by
            all the current and former students who enter repayment during
            the fiscal year used for the calculation of the cohort default
            rate.
        ``(4) A State may charge a fee to an institution of higher
    education that participates in the program under this part and is
    located in that State according to a fee structure, approved by the
    Secretary, that is based on the institution's cohort default rate and
    the State's risk of loss under this subsection. Such fee structure
    shall include a process by which an institution with a high cohort
    default rate is exempt from any fees under this paragraph if such
    institution demonstrates to the satisfaction of the State that
    exceptional mitigating circumstances, as determined by the State and
    approved by the Secretary, contributed to its cohort default rate.''.
        (b) Effective Date.--The amendment made by this section shall be
    effective on October 1, 1994.

          Subtitle C--ERISA Amendments Relating to Group Health Plans

    SEC. 4201. COORDINATION OF ERISA PREEMPTION RULES WITH TITLE XIX
                  PROVISIONS PROVIDING FOR LIABILITY OF THIRD PARTIES.

        (a) In General.--Paragraph (8) of section 514(b) of the Employee
    Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)(8)) is
    amended to read as follows:
        ``(8)(A) Subsection (a) of this section shall not apply to any
    State law to the extent necessary to permit the State to comply with
    the following requirements for the receipt of Federal financial
    assistance under title XIX of the Social Security Act:
                ``(i) subparagraphs (A), (B), and (H) of section
            1902(a)(25) of such Act (relating to third-party liability) and
            section 1903(o) of such Act (relating to medicaid as secondary
            payor), as in effect on October 1, 1993; and
                ``(ii) sections 1902(a)(45) and 1912 of such Act (relating
            to assignment of rights of payment), as in effect on May 12,
            1993.
        ``(B) Paragraph (2)(B) shall not apply to any State law to the
    extent necessary to permit the compliance of the State with any of the
    requirements described in subparagraph (A).''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect October 1, 1993.

    SEC. 4202. CONTINUED COVERAGE OF COSTS OF A PEDIATRIC VACCINE UNDER
                  GROUP HEALTH PLANS.

        (a) In General.--Part 6 of subtitle B of title I of the Employee
    Retirement Income Security Act of 1974 (29 U.S.C. 1161 et seq.) is
    amended by adding at the end the following new section:

    ``SEC. 609. CONTINUED COVERAGE OF COSTS OF A PEDIATRIC VACCINE UNDER
                  GROUP HEALTH PLANS.

        ``A group health plan may not reduce its coverage of the costs of
    pediatric vaccines (as defined under section 2162 of the Public Health
    Service Act) below the coverage it provided as of May 1, 1993.''.
        (b) Conforming Amendment.--The table of contents in section 1 of
    such Act is amended by adding after the item relating to section 608
    the following new item:

    ``Sec. 609. Continued coverage of costs of a pediatric vaccine under
                                group health plans.''.
        (c) Effective Date.--The amendments made by this section shall
    apply with respect to plan years beginning after the date of the
    enactment of this Act.

    SEC. 4203. TEMPORARY RULES GOVERNING PREEMPTION OF CERTAIN STATE LAWS.

        Paragraph (5) of section 514(b) of the Employee Retirement Income
    Security Act of 1974 (29 U.S.C. 1144(b)(5)) is amended to read as
    follows:
        ``(5)(A)(i) Except as provided in clauses (ii) and (iii),
    subsection (a) shall not apply to the Hawaii Prepaid Health Care Act
    (Haw. Rev. Stat. Sec. Sec. 393-1 through 393-51).
        ``(ii) Nothing in clause (i) shall be construed to exempt from
    subsection (a) any State tax law relating to employee benefit plans.
        ``(iii) Notwithstanding clause (i), parts 1 and 4 of this subtitle,
    and the preceding sections of this part to the extent they govern
    matters which are governed by the provisions of such parts 1 and 4,
    shall supersede the Hawaii Prepaid Health Care Act (as in effect on or
    after January 14, 1983), but the Secretary may enter into cooperative
    arrangements under this subparagraph and section 506 with officials of
    the State of Hawaii to assist them in effectuating the policies of
    provisions of such Act which are superseded by such parts 1 and 4 and
    the preceding sections of this part.
        ``(B)(i) Except as provided in clauses (ii) and (iii), subsection
    (a) shall not apply to subtitle 2 of title 19 of the Annotated Code of
    Maryland (relating to the Health Services Cost Review Commission).
        ``(ii) Nothing in clause (i) shall be construed to exempt from
    subsection (a)--
                ``(I) any State tax law relating to employee benefit plans,
            or
                ``(II) any amendment of the provision referred to in clause
            (i) enacted on or after May 12, 1993, to the extent it provides
            for more than the effective administration of such Act as in
            effect on such date.
        ``(iii) Notwithstanding clause (i), parts 1 and 4 of this subtitle,
    and the preceding sections of this part to the extent they govern
    matters which are governed by the provisions of such parts 1 and 4,
    shall supersede the provision referred to in clause (i) (as in effect
    on or after May 12, 1993), but the Secretary may enter into cooperative
    arrangements under this subparagraph and section 506 with officials of
    the State of Maryland to assist them in effectuating the policies of
    such provision which are superseded by such parts 1 and 4 and the
    preceding sections of this part.
        ``(C)(i) Except as provided in clauses (ii) and (iii), subsection
    (a) shall not apply to the following provisions of the law of the State
    of Minnesota:
                ``(I) section 295.52, Minnesota Statutes, as amended in May
            1993 by House File 1178 (relating to receipts tax on
            providers);
                ``(II) section 19 of article 9 of the Minnesota Health
            Right Act, as amended in May 1993 by House File 1178 (relating
            to passthrough of 2 percent gross receipts tax on providers);
            and
                ``(III) subdivision 2 of section 3 of article 1 of such
            Act, article 7 of such Act, and section 1 of article 3 of
            Minnesota House File 1178 and section 4 and all that follows
            through the end of such article 3, as enacted in May 1993
            (relating to data collection).
        ``(ii) Nothing in clause (i) shall be construed to exempt from
    subsection (a)--
                ``(I) any State tax law relating to employee benefit plans
            (other than a provision described in clause (i)), and
                ``(II) any amendment of any provision referred to in clause
            (i) enacted on or after May 12, 1993, to the extent it provides
            for more than the effective administration of such provision as
            in effect on such date.
        ``(iii) Notwithstanding clause (i), parts 1 and 4 of this subtitle,
    and the preceding sections of this part to the extent they govern
    matters which are governed by the provisions of such parts 1 and 4,
    shall supersede the provisions described in clause (i) (as in effect on
    or after May 12, 1993), but the Secretary may enter into cooperative
    arrangements under this subparagraph and section 506 with officials of
    the State of Minnesota to assist them in effectuating the policies of
    such provisions which are superseded by such parts 1 and 4 and the
    preceding sections of this part.
        ``(D)(i) Except as provided in clauses (ii), (iv), (v), and (vii),
    subsection (a) shall not apply to the following provisions of the law
    of the State of New York:
                ``(I) subdivisions 1(b) and 4(e) of section 2807-c of the
            Public Health Law (relating to 13 percent surcharge);
                ``(II) subdivision 1(c) of section 2807-c of the Public
            Health Law (relating to uniform hospital charges);
                ``(III) subdivision 2-a of section 2807-c of the Public
            Health Law (relating to the variable surcharge for HMOs);
                ``(IV) subdivision 14 of section 2807-c of the Public
            Health Law (relating to basic percentage allowances for bad
            debt and charity care);
                ``(V) subdivision 14-b of section 2807-c of the Public
            Health Law (relating to health care services allowances);
                ``(VI) subdivision 14-c of section 2807-c of the Public
            Health Law (relating to further allowances for financially
            distressed hospitals); and
                ``(VII) section 18 of chapter 266 of the laws of 1986, as
            amended (relating to excess malpractice insurance adjustments).
        ``(ii) Except as provided in clause (iii), nothing in clause (i)
    shall be construed to exempt from subsection (a)--
                ``(I) any State tax law relating to employee benefit plans,
            or
                ``(II) any provision referred to in clause (i) to the
            extent that any law of the State of New York appropriates
            amounts based on amounts collected by the State under such
            provision for any purpose other than carrying out the programs
            established under the provisions described in clause (i).
        ``(iii) Notwithstanding clause (ii), subsection (a) shall not apply
    to any provision of the law of the State of New York to the extent that
    such provision constitutes--
                ``(I) an HMO surcharge of the type provided for under
            subdivision 2-a of such section 2807-c (as in effect on
            February 2, 1993), or
                ``(II) an allowance, of the type provided for under the
            provisions referred to in clause (i) (as so in effect), for bad
            debts, charity care, health care services, or excess
            malpractice insurance,
    but only if the law of such State appropriates amounts based on and
    equivalent to amounts collected by the State under such provision
    solely for the purpose of carrying out one or more programs established
    under the provisions described in clause (i).
        ``(iv) Subsection (a) shall apply to any provision of the law of
    the State of New York to the extent that such provision constitutes a
    surcharge of the type provided for under subdivisions 1(b) and 4(e) of
    section 2807-c of the Public Health Law of the State of New York (as in
    effect on February 2, 1993) unless such provision provides for use of
    amounts collected under such provision solely for the purpose of
    carrying out one or more programs established under the provisions
    described in clause (i).
        ``(v) Nothing in clause (i) shall be construed to exempt from
    subsection (a) any amendment of any provision referred to in clause (i)
    enacted on or after February 2, 1993, to the extent it provides for
    more than the effective administration of such provisions as in effect
    on such date, unless such amendment constitutes only a change in the
    methodology of determining payments to hospitals and would result in--
                ``(I) a surcharge described in clause (iii)(I) of not more
            than 9 percent with respect to which the requirements of clause
            (iii) are met,
                ``(II) an allowance described in clause (iii)(II) which
            does not exceed in the aggregate a Statewide average of not
            more than 10 percent and with respect to which the requirements
            of clause (iii) are met, or
                ``(III) a surcharge described in clause (iv) of not more
            than 13 percent with respect to which the requirements of
            clause (iv) are met.
        ``(vi) Subsection (a) shall not apply to any amendment to chapter 2
    of the laws of 1988 of the State of New York, as amended, to the extent
    that such amendment extends the period for which the provisions
    referred to in clause (i) are in effect.
        ``(vii) Notwithstanding clause (i), parts 1 and 4 of this subtitle,
    and the preceding sections of this part to the extent they govern
    matters which are governed by the provisions of such parts 1 and 4,
    shall supersede the provisions described in clause (i) (as in effect on
    or after February 2, 1993), but the Secretary may enter into
    cooperative arrangements under this subparagraph and section 506 with
    officials of the State of New York to assist them in effectuating the
    policies of such provisions which are superseded by such parts 1 and 4
    and the preceding sections of this part.
        ``(viii) The provisions of this subparagraph shall be effective as
    of February 2, 1993.
        ``(E) This paragraph shall cease to be effective as of May 12,
    1995.''.

                   TITLE V--COMMITTEE ON ENERGY AND COMMERCE

                          Subtitle A--Medicare Program

    SEC. 5000. REFERENCES IN SUBTITLE; TABLE OF CONTENTS OF SUBTITLE.

        (a) Amendments to Social Security Act.--Except as otherwise
    specifically provided, whenever in this subtitle an amendment is
    expressed in terms of an amendment to or repeal of a section or other
    provision, the reference shall be considered to be made to that section
    or other provision of the Social Security Act.
        (b) References to OBRA.--In this subtitle, the terms ``OBRA-1986'',
    ``OBRA-1987'', ``OBRA-1989'', and ``OBRA-1990'' refer to the Omnibus
    Budget Reconciliation Act of 1986 (Public Law 99-509), the Omnibus
    Budget Reconciliation Act of 1987 (Public Law 100-203), the Omnibus
    Budget Reconciliation Act of 1989 (Public Law 101-239), and the Omnibus
    Budget Reconciliation Act of 1990 (Public Law 101-508), respectively.
        (c) Table of Contents of Subtitle.--The table of contents of this
    subtitle is as follows:

    Sec. 5000. References in subtitle; table of contents of subtitle.
                    Chasubchapter a--physicians' servicest B
    Sec. 5001. Reduction in default update for conversion factor for 1994.
    Sec. 5002. Reduction in performance standard rate of increase and
                                increase in maximum reduction permitted in
                                default update.
    Sec. 5003. Classification of primary care services as a separate
                                category of services.
    Sec. 5004. Phased-in reduction in practice expense relative value units
                                for certain services.
    Sec. 5005. Limitation on payment for the anesthesia care team.
    Sec. 5006. Basing payments for anesthesia services on actual time.
    Sec. 5007. Separate payment for interpretation of electrocardiograms.
    Sec. 5008. Payments for new physicians and practitioners.
    Sec. 5009. Geographic adjustment factors for medicare physicians'
                                services.
    Sec. 5010. Extra-billing limits.
    Sec. 5011. Relative values for pediatric services.
    Sec. 5012. Antigens under physician fee schedule.
    Sec. 5013. Administration of claims relating to physicians' services.
    Sesubchapter b--outpatient hospital services and ambulatory surgical
                                    services
    Sec. 5021. Extension of 10 percent reduction in payments for capital-
                                related costs of outpatient hospital
                                services.
    Sec. 5022. Extension of current reduction in payments for other costs
                                of outpatient hospital services.
    Sec. 5023. 1-year freeze in ambulatory surgery rates.
    Sec. 5024. Eye or eye and ear hospitals.
    Sec. 5025. Extension of cap on payments for intraocular lenses.
    Sec. 5026. Miscesubchapter c--durable medical equipment
    Sec. 5031. Revisions to payment rules for durable medical equipment.
    Sec. 5032. Payment for parenteral and enteral nutrients, supplies, and
                                equipment during 1994.
    Sec. 5033. Treatment of nebulizers and aspirators.
    Sec. 5034. Certification of suppliers.
    Sec. 5035. Prohibition against carrier forum shopping.
    Sec. 5036. Restrictions on certain marketing and sales activities.
    Sec. 5037. Kickback clarification.
    Sec. 5038. Beneficiary liability for noncovered services.
    Sec. 5039. Adjustments for inherent reasonableness.
    Sec. 5040. Payment for surgical dressings.
    Sec. 5041. Payments for tens devices.
    Sec. 5042. Miscellaneosubchapter d--part b premium.
    Sec. 5051. Part B presubchapter e--other provisions
    Sec. 5061. Payments for clinical diagnostic laboratory tests.
    Sec. 5062. Treatment of inpatients and provision of diagnostic and
                                therapeutic X-ray services by rural health
                                clinics and Federally qualified health
                                centers.
    Sec. 5063. Application of mammography certification requirements.
    Sec. 5064. Extension of Alzheimer's disease demonstration.
    Sec. 5065. Oral cancer drugs.
    Sec. 5066. Extension of municipal health service demonstration
                                projects.
    Sec. 5067. Treatment of certain Indian health programs and facilities
                                as Federally-qualified health centers.
    Sec. 5068. Interest payments.
    Sec. 5069. Clarification of coverage of certified nurse-midwife
                                services performed outside the maternity
                                cycle.
    Sec. 5069A. Increase in, and study of, annual cap on amount of medicare
                                payment for outpatient physical therapy and
                                occupational therapy services.
    Sec. 5070. Miscellaneous and technical corrections.
                Chapter 2--Provisions Relating to Parts A and B

    Sec. 5071. Elimination of add-on for overhead of hospital-based home
                                health agencies.
    Sec. 5072. Study and report on medicare GME payments.
    Sec. 5073. Medicare as secondary payer.
    Sec. 5074. Extension of self-referral ban to additional specified
                                services.
    Sec. 5075. Reduction in payment for erythropoietin.
    Sec. 5076. Medicare hospital agreements with organ procurement
                                organizations.
    Sec. 5077. Extension of waiver for Watts Health Foundation.
    Sec. 5078. Improved outreach for qualified medicare beneficiaries.
    Sec. 5079. Social health maintenance organizations.
    Sec. 5080. Peer review organizations.
    Sec. 5081. Hospice information to home health beneficiaries.
    Sec. 5082. Health maintenance organizations.
    Sec. 5083. Miscellaneous and technical corrections.
       Chapter 3--Provisions Relating to Medicare Supplemental Insurance
                                    Policies

    Sec. 5091. Standards for medicare supplemental insurance policies.

                    CHAPTER 1--PROVISIONS RELATING TO PART B

                       Subchapter A--Physicians' Services

    SEC. 5001. REDUCTION IN DEFAULT UPDATE FOR CONVERSION FACTOR FOR 1994.

        Section 1848(d)(3)(A) (42 U.S.C. 1395w-4(d)(3)(A)) is amended--
                (1) in clause (i), by striking ``clause (iii)'' and
            inserting ``clauses (iii) and (iv)'', and
                (2) by adding at the end the following new clause:
                                ``(iv) Adjustment in percentage increase
                            for 1994.--In applying clause (i) for services
                            (other than primary care services) furnished in
                            1994, the percentage increase in the
                            appropriate update index shall be reduced by--
                                        ``(I) 3 percentage points for
                                    surgical services (as defined for
                                    purposes of subsection (j)(1)), and
                                        ``(II) 2 percentage points for
                                    other services.''.

    SEC. 5002. REDUCTION IN PERFORMANCE STANDARD RATE OF INCREASE AND
                  INCREASE IN MAXIMUM REDUCTION PERMITTED IN DEFAULT
                  UPDATE.

        (a) Reduction in Performance Standard Factor.--Section
    1848(f)(2)(B) (42 U.S.C. 1395w-4(f)(2)(B)) is amended--
                (1) by striking ``and'' at the end of clause (ii), and
                (2) by striking clause (iii) and inserting the following:
                                ``(iii) for 1993 is 2 percentage points,
                                ``(iv) for 1994 is 3\1/2\ percentage
                            points, and
                                ``(v) for each succeeding year is 4
                            percentage points.''.
        (b) Increase in Maximum Reduction Permitted in Default Update.--
    Section 1848(d)(3)(B)(ii) (42 U.S.C. 1395w-4(d)(3)(B)(ii)) is amended--
                (1) in subclause (II), by striking ``or 1995'', and
                (2) in subclause (III), by striking ``3'' and inserting
            ``5''.

    SEC. 5003. CLASSIFICATION OF PRIMARY CARE SERVICES AS A SEPARATE
                  CATEGORY OF SERVICES.

        (a) In General.--Section 1848(j)(1) (42 U.S.C. 1395w-4(j)(1)) is
    amended by inserting ``, primary care services (as defined in section
    1842(i)(4)),'' after ``Secretary)''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply--
                (1) to volume performance standard rates of increase
            established under section 1848(f) of the Social Security Act
            for fiscal years beginning with fiscal year 1994, and
                (2) to updates in the conversion factors for physicians'
            services established under section 1848(d) of such Act for
            physicians' services to be furnished in calendar years
            beginning with 1996.

    SEC. 5004. PHASED-IN REDUCTION IN PRACTICE EXPENSE RELATIVE VALUE UNITS
                  FOR CERTAIN SERVICES.

        (a) In General.--Section 1848(c)(2) (42 U.S.C. 1395w-4(c)(2)) is
    amended by adding at the end the following new subparagraph:
                        ``(E) Reduction in practice expense relative value
                    units for certain services.--
                                ``(i) In general.--Subject to clause (ii),
                            the Secretary shall reduce the practice expense
                            relative value units applied to services
                            described in clause (iii) furnished in--
                                        ``(I) 1994, by 25 percent of the
                                    number by which the number of practice
                                    expense relative value units
                                    (determined for 1994 without regard to
                                    this subparagraph) exceeds the number
                                    of work relative value units determined
                                    for 1994,
                                        ``(II) 1995, by an additional 25
                                    percent of such excess, and
                                        ``(III) 1996 and subsequent years,
                                    by an additional 25 percent of such
                                    excess.
                                ``(ii) Floor on reductions.--The practice
                            expense relative value units for a physicians'
                            service shall not be reduced under this
                            subparagraph to a number less than 110 percent
                            of the number of work relative value units.
                                ``(iii) Services covered.--For purposes of
                            clause (i), the services described in this
                            clause are physicians' services that are not
                            described in clause (iv) and for which--
                                        ``(I) there are work relative value
                                    units, and
                                        ``(II) the number of practice
                                    expense relative value units
                                    (determined for 1994) exceeds 110
                                    percent of the number of work relative
                                    value units (determined for such year).
                                ``(iv) Excluded services.--For purposes of
                            clause (iii), the services described in this
                            clause are--
                                        ``(I) anesthesia services,
                                        ``(II) radiology services, and
                                        ``(III) services which the
                                    Secretary determines at least 75
                                    percent of which are provided under
                                    this title in an office setting.''.
        (b) Development of Resource-Based Methodology for Practice
    Expenses.--
                (1) The Secretary of Health and Human Services shall
            develop a methodology for implementing in 1997 a resource-based
            system for determining practice expense relative value units
            for each physician's service.
                (2) The Secretary shall transmit a report by June 30, 1996,
            on the methodology developed under paragraph (1) to the
            Committees on Ways and Means and Energy and Commerce of the
            House of Representatives and the Committee on Finance of the
            Senate. The report shall include a presentation of data
            utilized in developing the methodology and an explanation of
            the methodology.

    SEC. 5005. LIMITATION ON PAYMENT FOR THE ANESTHESIA CARE TEAM.

        (a) Limit on Payment to a Physician for Medical Direction.--
                (1) In general.--Section 1848(a) (42 U.S.C. 1395w-4(a)), as
            amended by section 5008(a)(1), is amended by adding at the end
            the following new paragraph:
                ``(4) Special rule for medical direction.--
                        ``(A) In general.--With respect to physicians'
                    services furnished on or after January 1, 1994, and
                    consisting of medical direction of two, three, or four
                    concurrent anesthesia cases, the fee schedule amount to
                    be applied shall not exceed one-half of the amount
                    described in subparagraph (B).
                        ``(B) Amount.--The amount described in this
                    subparagraph, for a physician's medical direction of
                    the performance of anesthesia services, is the
                    following percentage of the fee schedule amount
                    otherwise applicable under this section if the
                    anesthesia services were personally performed by the
                    physician alone:
                                ``(i) For services furnished during 1994,
                            120 percent.
                                ``(ii) For services furnished during 1995,
                            115 percent.
                                ``(iii) For services furnished during 1996,
                            110 percent.
                                ``(iv) For services furnished during 1997,
                            105 percent.
                                ``(v) For services furnished after 1997,
                            100 percent.''.
                (2) Elimination of reduction for medical direction of
            multiple nurse anesthetists.--Section 1842(b) (42 U.S.C.
            1395u(b)) is amended by striking paragraph (13).
        (b) Payment to a Certified Registered Nurse Anesthetist for
    Medically Directed Services.--Subparagraph (B) of section 1833(l)(4)
    (42 U.S.C. 1395l(l)(4)) is amended--
                (1) in clause (i), by inserting ``and before January 1,
            1994,'' after ``1991,'';
                (2) in clause (ii)--
                        (A) by adding ``and'' at the end of subclause (II),
                        (B) by striking the comma at the end of subclause
                    (III) and inserting a period, and
                        (C) by striking subclauses (IV) through (VII); and
                (3) by adding at the end the following new clause:
        ``(iii) In the case of services of a certified registered nurse
    anesthetist who is medically directed by a physician and that are
    furnished on or after January 1, 1994, the fee schedule amount shall be
    one-half of the amount described in section 1848(a)(4)(B) with respect
    to the physician.''.

    SEC. 5006. BASING PAYMENTS FOR ANESTHESIA SERVICES ON ACTUAL TIME.

        (a) Physicians' Services.--Section 1848(b)(2)(B) (42 U.S.C. 1395w-
    4(b)(2)(B)) is amended by adding at the end the following: ``For
    anesthesia services furnished on or after January 1, 1994, the
    Secretary may not modify the methodology in effect as of January 1,
    1993, for determining the amount of time that may be billed for such
    services under this section.''.
        (b) Services of Certified Registered Nurse Anesthetists.--Section
    1833(l)(1)(B) (42 U.S.C. 1395l(l)(1)(B)) is amended by adding at the
    end the following: ``For anesthesia services furnished on or after
    January 1, 1994, the Secretary may not modify the methodology in effect
    as of January 1, 1993, for determining the amount of time that may be
    billed for such services under this section.''.

    SEC. 5007. SEPARATE PAYMENT FOR INTERPRETATION OF ELECTROCARDIOGRAMS.

        (a) In General.--Paragraph (3) of section 1848(b) (42 U.S.C. 1395w-
    4(b)) is amended to read as follows:
                ``(3) Treatment of interpretation of electrocardiograms.--
            The Secretary--
                        ``(A) shall make separate payment under this
                    section for the interpretation of electrocardiograms
                    performed or ordered to be performed as part of or in
                    conjunction with a visit to or a consultation with a
                    physician, and
                        ``(B) shall adjust the relative values established
                    for visits and consultations under subsection (c) so as
                    not to include relative value units for interpretations
                    of electrocardiograms in the relative value for visits
                    and consultations.''.
        (b) Assuring Budget Neutrality.--Section 1848(c)(2) (42 U.S.C.
    1395w-4(c)(2)), as amended by section 5004(a); is amended by adding at
    the end the following new subparagraph:
                        ``(F) Budget neutrality adjustments.--The
                    Secretary--
                                ``(i) shall reduce the relative values for
                            all services (other than anesthesia services)
                            established under this paragraph (and, in the
                            case of anesthesia services, the conversion
                            factor established by the Secretary for such
                            services) by such percentage as the Secretary
                            determines to be necessary so that, beginning
                            in 1996, the amendment made by section 5007(a)
                            of the Omnibus Budget Reconciliation Act of
                            1993 would not result in expenditures under
                            this section that exceed the amount of such
                            expenditures that would have been made if such
                            amendment had not been made, and
                                ``(ii) shall reduce the amounts determined
                            under subsection (a)(2)(B)(ii)(I) by such
                            percentage as the Secretary determines to be
                            required to assure that, taking into account
                            the reductions made under clause (i), the
                            amendment made by section 5007(a) of the
                            Omnibus Budget Reconciliation Act of 1993 would
                            not result in expenditures under this section
                            in 1994 that exceed the amount of such
                            expenditures that would have been made if such
                            amendment had not been made.''.
        (c) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-4) is
    amended--
                (1) in subsection (a)(2)(B)(ii)(I), by inserting ``and as
            adjusted under subsection (c)(2)(F)(ii)'' after ``for 1994'';
                (2) in subsection (c)(2)(A)(i), by adding at the end the
            following: ``Such relative values are subject to adjustment
            under subparagraph (F)(i).''; and
                (3) in subsection (i)(1)(B), by adding at the end
            ``including adjustments under subsection (c)(2)(F),''.
        (d) Effective Date.--The amendments made by this section shall
    apply to services furnished on or after January 1, 1994.

    SEC. 5008. PAYMENTS FOR NEW PHYSICIANS AND PRACTITIONERS.

        (a) Equal Treatment of New Physicians and Practitioners.--(1)
    Section 1848(a) (42 U.S.C. 1395w-4(a)) is amended by striking paragraph
    (4).
        (2) Section 1842(b)(4) (42 U.S.C. 1395u(b)(4)) is amended by
    striking subparagraph (F).
        (b) Budget Neutrality Adjustment.--Notwithstanding any other
    provision of law, the Secretary of Health and Human Services shall
    reduce the following values and amounts for 1994 (to be applied for
    that year and subsequent years) by such uniform percentage as the
    Secretary determines to be required to assure that the amendments made
    by subsection (a) will not result in expenditures under part B of title
    XVIII of the Social Security Act in 1994 that exceed the amount of such
    expenditures that would have been made if such amendments had not been
    made:
                (1) The relative values established under section 1848(c)
            of such Act for services (other than anesthesia services) and,
            in the case of anesthesia services, the conversion factor
            established under section 1848 of such Act for such services.
                (2) The amounts determined under section
            1848(a)(2)(B)(ii)(I) of such Act.
                (3) The prevailing charges or fee schedule amounts to be
            applied under such part for services of a health care
            practitioner (as defined in section 1842(b)(4)(F)(ii)(I) of
            such Act, as in effect before the date of the enactment of this
            Act).
        (c) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-4), as
    amended by section 5007(c), is amended--
                (1) in subsection (a)(2)(B)(ii)(I), by inserting ``and
            section 5008(b) of the Omnibus Budget Reconciliation Act of
            1993'' after ``(c)(2)(F)(ii)'';
                (2) in subsection (c)(2)(A)(i), by inserting ``and section
            5008(b) of the Omnibus Budget Reconciliation Act of 1993''
            after ``under subparagraph (F)(i)''; and
                (3) in subsection (i)(1)(B), by inserting ``and section
            5008(b) of the Omnibus Budget Reconciliation Act of 1993''
            after ``under subsection (c)(2)(F)''.
        (d) Effective Date.--The amendments made by subsection (a) shall
    apply to services furnished on or after January 1, 1994.

    SEC. 5009. GEOGRAPHIC ADJUSTMENT FACTORS FOR MEDICARE PHYSICIANS'
                  SERVICES.

        (a) Requiring Consultation with Representatives of Physicians in
    Reviewing Geographic Adjustment Factors.--Section 1848(e)(1)(C) (42
    U.S.C. 1395w-4(e)(1)(C)) is amended by striking ``shall review'' and
    inserting ``shall, in consultation with appropriate representatives of
    physicians, review''.
        (b) Use of Most Recent Data In Geographic Adjustment.--Section
    1848(e)(1) (42 U.S.C. 1395w-4(e)(1)) is amended by adding at the end
    the following new subparagraph:
                        ``(D) Use of recent data.--In establishing indices
                    and index values under this paragraph, the Secretary
                    shall use the most recent data available relating to
                    practice expenses, malpractice expenses, and physician
                    work effort in different fee schedule areas.''.
        (c) Deadline for Initial Review and Revision.--The Secretary of
    Health and Human Services shall first review and revise geographic
    adjustment factors under section 1848(e)(1)(C) of the Social Security
    Act by not later than January 1, 1995.
        (d) Report on Review Process.--Not later than 1 year after the date
    of the enactment of this Act, the Secretary of Health and Human
    Services shall study and report to the Committee on Finance of the
    Senate and the Committee on Ways and Means and the Committee on Energy
    and Commerce of the House of Representatives on--
                (1) the data necessary to review and revise the indices
            established under section 1848(e)(1)(A) of the Social Security
            Act, including--
                        (A) the shares allocated to physicians' work
                    effort, practice expenses (other than malpractice
                    expenses), and malpractice expenses;
                        (B) the weights assigned to the input components of
                    such shares; and
                        (C) the index values assigned to such components;
                (2) any limitations on the availability of data necessary
            to review and revise such indices at least every three years;
                (3) ways of addressing such limitations, with particular
            attention to the development of alternative data sources for
            input components for which current index values are based on
            data collected less frequently than every three years; and
                (4) the costs of developing more accurate and timely data.

    SEC. 5010. EXTRA-BILLING LIMITS.

        (a) Enforcement and Uniform Application.--
                (1) Enforcement.--Paragraph (1) of section 1848(g) (42
            U.S.C. 1395w-4(g)) is amended to read as follows:
                ``(1) Limitation on actual charges.--
                        ``(A) In general.--In the case of a
                    nonparticipating physician or nonparticipating supplier
                    or other person (as defined in section 1842(i)(2)) who
                    does not accept payment on an assignment-related basis
                    for a physician's service furnished with respect to an
                    individual enrolled under this part, the following
                    rules apply:
                                ``(i) Application of limiting charge.--No
                            person may bill or collect an actual charge for
                            the service in excess of the limiting charge
                            described in paragraph (2) for such service.
                                ``(ii) No liability for excess charges.--No
                            person is liable for payment of any amounts
                            billed for the service in excess of such
                            limiting charge.
                                ``(iii) Correction of excess charges.--If
                            such a physician, supplier, or other person
                            bills, but does not collect, an actual charge
                            for a service in violation of clause (i), the
                            physician, supplier, or other person shall
                            reduce on a timely basis the actual charge
                            billed for the service to an amount not to
                            exceed the limiting charge for the service.
                                ``(iv) Refund of excess collections.--If
                            such a physician, supplier, or other person
                            collects an actual charge for a service in
                            violation of clause (i), the physician,
                            supplier, or other person shall provide on a
                            timely basis a refund to the individual charged
                            in the amount by which the amount collected
                            exceeded the limiting charge for the service.
                            The amount of such a refund shall be reduced to
                            the extent the individual has an outstanding
                            balance owed by the individual to the
                            physician.
                        ``(B) Sanctions.--If a physician, supplier, or
                    other person--
                                ``(i) knowingly and willfully bills or
                            collects for services in violation of
                            subparagraph (A)(i) on a repeated basis, or
                                ``(ii) fails to comply with clause (iii) or
                            (iv) of subparagraph (A) on a timely basis,
                    the Secretary may apply sanctions against the
                    physician, supplier, or other person in accordance with
                    paragraph (2) of section 1842(j). In applying this
                    subparagraph, paragraph (4) of such section applies in
                    the same manner as such paragraph applies to such
                    section and any reference in such section to a
                    physician is deemed also to include a reference to a
                    supplier or other person under this subparagraph.
                        ``(C) Timely basis.--For purposes of this
                    paragraph, a correction of a bill for an excess charge
                    or refund of an amount with respect to a violation of
                    subparagraph (A)(i) in the case of a service is
                    considered to be provided `on a timely basis', if the
                    reduction or refund is made not later than 30 days
                    after the date the physician, supplier, or other person
                    is notified by the carrier under this part of such
                    violation and of the requirements of subparagraph
                    (A).''.
                (2) Uniform application of extra-billing limits to
            physicians' services.--
                        (A) In general.--Section 1848(g)(2)(C) (42 U.S.C.
                    1395w-4(g)(2)(C)) is amended by inserting ``or for
                    nonparticipating suppliers or other persons'' after
                    ``nonparticipating physicians''.
                        (B) Conforming definition.--Section 1842(i)(2) (42
                    U.S.C. 1395u(i)(2)) is amended--
                                (i) by striking ``, and the term'' and
                            inserting ``; the term'', and
                                (ii) by inserting before the period at the
                            end the following: ``; and the term
                            `nonparticipating supplier or other person'
                            means a supplier or other person (excluding a
                            provider of services) that is not a
                            participating physician or supplier (as defined
                            in subsection (h)(1))''.
                (3) Additional conforming amendments.--Section 1848 (42
            U.S.C. 1395w-4) is amended--
                        (A) in subsection (a)(3)--
                                (i) by inserting ``and suppliers'' after
                            ``physicians'',
                                (ii) by inserting ``or a nonparticipating
                            supplier or other person'' after
                            ``nonparticipating physician'', and
                                (iii) by adding at the end the following:
                            ``In the case of physicians' services
                            (including services which the Secretary
                            excludes pursuant to subsection (j)(3)) of a
                            nonparticipating physician, supplier, or other
                            person for which payment is made under this
                            part on a basis other than the fee schedule
                            amount, the payment shall be based on 95
                            percent of the payment basis for such services
                            furnished by a participating physician,
                            supplier, or other person.'';
                        (B) in subsection (g)(1)(A), as amended by
                    subsection (a), in the matter before clause (i), by
                    inserting ``(including services which the Secretary
                    excludes pursuant to subsection (j)(3))'' after ``a
                    physician's service'';
                        (C) in subsection (g)(2)(D), by inserting ``(or, if
                    payment under this part is made on a basis other than
                    the fee schedule under this section, 95 percent of the
                    other payment basis)'' after ``subsection (a)'';
                        (D) in subsection (g)(3)(B)--
                                (i) by inserting after the first sentence
                            the following: ``No person is liable for
                            payment of any amounts billed for such a
                            service in violation of the previous
                            sentence.'', and
                                (ii) in the last sentence, by striking
                            ``previous sentence'' and inserting ``first
                            sentence'';
                        (E) in subsection (h)--
                                (i) by inserting ``or nonparticipating
                            supplier or other person furnishing physicians'
                            services (as defined in section 1848(j)(3))''
                            after ``physician'' the first place it appears,
                                (ii) by inserting ``, supplier, or other
                            person'' after ``physician'' the second place
                            it appears, and
                                (iii) by inserting ``, suppliers, and other
                            persons'' after ``physicians'' the second place
                            it appears; and
                        (F) in subsection (j)(3), by inserting ``, except
                    for purposes of subsections (a)(3), (g), and (h)''
                    after ``tests and''.
        (b) Clarification of Mandatory Assignment Rules for Certain
    Practitioners.--
                (1) In general.--Section 1842(b) (42 U.S.C. 1395u(b)), as
            amended by section 5014(e), is amended by adding at the end the
            following new paragraph:
        ``(18)(A) Payment for any service furnished by a practitioner
    described in subparagraph (C) and for which payment may be made under
    this part on a reasonable charge or fee schedule basis may only be made
    under this part on an assignment-related basis.
        ``(B) A practitioner described in subparagraph (C) or other person
    may not bill (or collect any amount from) the individual or another
    person for any service described in subparagraph (A), except for
    deductible and coinsurance amounts applicable under this part. No
    person is liable for payment of any amounts billed for such a service
    in violation of the previous sentence. If a practitioner or other
    person knowingly and willfully bills (or collects an amount) for such a
    service in violation of such sentence, the Secretary may apply
    sanctions against the practitioner or other person in the same manner
    as the Secretary may apply sanctions against a physician in accordance
    with section 1842(j)(2) in the same manner as such section applies with
    respect to a physician. Paragraph (4) of section 1842(j) shall apply in
    this subparagraph in the same manner as such paragraph applies to such
    section.
        ``(C) A practitioner described in this subparagraph is any of the
    following:
                ``(i) A physician assistant, nurse practitioner, or
            clinical nurse specialist (as defined in section 1861(aa)(5)).
                ``(ii) A certified registered nurse anesthetist (as defined
            in section 1861(bb)(2)).
                ``(iii) A certified nurse-midwife (as defined in section
            1861(gg)(2)).
                ``(iv) A clinical social worker (as defined in section
            1861(hh)(1)).
                ``(v) A clinical psychologist (as defined by the Secretary
            for purposes of section 1861(ii)).
        ``(D) For purposes of this paragraph, a service furnished by a
    practitioner described in subparagraph (C) includes any services and
    supplies furnished as incident to the service as would otherwise be
    covered under this part if furnished by a physician or as incident to a
    physician's service.''.
                (2) Conforming amendments.--
                        (A) Section 1833 (42 U.S.C. 1395l) is amended--
                                (i) in subsection (l)(5), by striking
                            subparagraph (B) and redesignating subparagraph
                            (C) as subparagraph (B);
                                (ii) by striking subsection (p); and
                                (iii) in subsection (r), by striking
                            paragraph (3) and redesignating paragraph (4)
                            as paragraph (3).
                        (B) Section 1842(b)(12) (42 U.S.C. 1395u(b)(12)) is
                    amended by striking subparagraph (C).
        (c) Information on Extra-Billing Limits.--
                (1) Part of explanation of medicare benefits.--Section
            1842(h)(7) (42 U.S.C. 1395u(h)(7)) is amended--
                        (A) by striking ``and'' at the end of subparagraph
                    (B),
                        (B) in subparagraph (C), by striking ``shall
                    include'',
                        (C) in subparagraph (C), by striking the period at
                    the end and inserting ``, and'', and
                        (D) by adding at the end the following new
                    subparagraph:
                ``(D) in the case of services for which the billed amount
            exceeds the limiting charge imposed under section 1848(g),
            information regarding such applicable limiting charge
            (including information concerning the right to a refund under
            section 1848(g)(1)(A)(iv)).''.
                (2) Determinations by carriers.--Subparagraph (G) of
            section 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended to read
            as follows:
                ``(G) will, for a service that is furnished with respect to
            an individual enrolled under this part, that is not paid on an
            assignment-related basis, and that is subject to a limiting
            charge under section 1848(g)--
                        ``(i) determine, prior to making payment, whether
                    the amount billed for such service exceeds the limiting
                    charge applicable under section 1848(g)(2);
                        ``(ii) notify the physician, supplier, or other
                    person periodically (but not less often than once every
                    30 days) of determinations that amounts billed exceeded
                    such applicable limiting charges; and
                        ``(iii) provide for prompt response to inquiries of
                    physicians, suppliers, and other persons concerning the
                    accuracy of such limiting charges for their
                    services;''.
        (d) Report on Charges in Excess of Limiting Charge.--Section
    1848(g)(6)(B) (42 U.S.C. 1395w-4(g)(6)(B)) is amended by inserting
    ``the extent to which actual charges exceed limiting charges, the
    number and types of services involved, and the average amount of excess
    charges and'' after ``report to the Congress''.
        (e) Miscellaneous and Technical Amendments.--Section 1833 (42
    U.S.C. 1395l) is amended--
                (1) in subsection (a)(1), as amended by section
            5070(e)(2)--
                        (A) by striking ``and'' before ``(O)'', and
                        (B) by inserting before the semicolon at the end
                    the following: ``, and (P) with respect to services
                    described in clauses (i), (ii) and (iv) of section
                    1861(s)(2)(K), the amounts paid are subject to the
                    provisions of section 1842(b)(12)''; and
                (2) in subsection (h)(5)(D)--
                        (A) by striking ``paragraphs (2) and (3)'' and by
                    inserting ``paragraph (2)'', and
                        (B) by adding at the end the following: ``Paragraph
                    (4) of such section shall apply in this subparagraph in
                    the same manner as such paragraph applies to such
                    section.''.
        (f) Effective Dates.--
                (1) Enforcement and uniform application; miscellaneous and
            technical amendments.--The amendments made by subsections (a)
            and (e) shall apply to services furnished on or after the date
            of the enactment of this Act; except that the amendments made
            by subsection (a) shall not apply to services of a
            nonparticipating supplier or other person furnished before
            January 1, 1994.
                (2) Practitioners.--The amendments made by subsection (b)
            shall apply to services furnished on or after January 1, 1994.
                (3) EOMBs.--The amendments made by subsection (c)(1) shall
            apply to explanations of benefits provided on or after January
            1, 1994.
                (4) Carrier determinations.--The amendments made by
            subsection (c)(2) shall apply to contracts as of January 1,
            1994.
                (5) Report.--The amendment made by subsection (d) shall
            apply to reports for years beginning with 1994.

    SEC. 5011. RELATIVE VALUES FOR PEDIATRIC SERVICES.

        (a) In General.--The Secretary of Health and Human Services shall
    fully develop, by not later than July 1, 1994, relative values for the
    full range of pediatric physicians' services which are consistent with
    the relative values developed for other physicians' services under
    section 1848(c) of the Social Security Act. In developing such values,
    the Secretary shall conduct such refinements as may be necessary to
    produce appropriate estimates for such relative values.
        (b) Study.--
                (1) In general.--The Secretary shall conduct a study of the
            relative values for pediatric and other services to determine
            whether there are significant variations in the resources used
            in providing similar services to different populations. In
            conducting such study, the Secretary shall consult with
            appropriate organizations representing pediatricians and other
            physicians and physical and occupational therapists.
                (2) Report.--Not later than July 1, 1994, the Secretary
            shall submit to Congress a report on the study conducted under
            paragraph (1). Such report shall include any appropriate
            recommendations regarding needed changes in coding or other
            payment policies to ensure that payments for pediatric services
            appropriately reflect the resources required to provide these
            services.

    SEC. 5012. ANTIGENS UNDER PHYSICIAN FEE SCHEDULE.

        (a) In General.--Section 1848(j)(3) (42 U.S.C. 1395w-4(j)(3)) is
    amended by inserting ``(2)(G),'' after ``(2)(D),''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to services furnished on or after January 1, 1994.

    SEC. 5013. ADMINISTRATION OF CLAIMS RELATING TO PHYSICIANS' SERVICES.

        (a) Limitation on Carrier User Fees.--Section 1842(c) (42 U.S.C.
    1395u(c)) is amended by adding at the end the following new paragraph:
        ``(4) Neither a carrier nor the Secretary may impose a fee under
    this title--
                ``(A) for the filing of claims related to physicians'
            services,
                ``(B) for an error in filing a claim relating to
            physicians' services or for such a claim which is denied,
                ``(C) for any appeal under this title with respect to
            physicians' services,
                ``(D) for applying for (or obtaining) a unique identifier
            under subsection (r), or
                ``(E) for responding to inquiries respecting physicians'
            services or for providing information with respect to medical
            review of such services.''.
        (b) Clarification of Permissible Substitute Billing Arrangements.--
                (1) In general.--Clause (D) of section 1842(b)(6) (42
            U.S.C. 1395u(b)(6)) is amended to read as follows: ``(D)
            payment may be made to a physician for physicians' services
            (and services furnished incident to such services) furnished by
            a second physician to patients of the first physician if (i)
            the first physician is unavailable to provide the services;
            (ii) the services are furnished pursuant to an arrangement
            between the two physicians that (I) is informal and reciprocal,
            or (II) involves per diem or other fee-for-time compensation
            for such services; (iii) the services are not provided by the
            second physician over a continuous period of more than 60 days;
            and (iv) the claim form submitted to the carrier for such
            services includes the second physician's unique identifier
            (provided under the system established under subsection (r))
            and indicates that the claim meets the requirements of this
            clause for payment to the first physician''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to services furnished on or after the first day of
            the first month beginning more than 60 days after the date of
            the enactment of this Act.

    SEC. 5014. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

        (a) Overvalued Procedures (Section 4101 of OBRA-1990).--(1) Section
    1842(b)(16)(B)(iii) (42 U.S.C. 1395u(b)(16)(B)(iii)) is amended--
                (A) by striking ``, simple and subcutaneous'',
                (B) by striking ``; small'' and inserting ``and small'',
                (C) by striking ``treatments;'' the first place it appears
            and inserting ``and'',
                (D) by striking ``lobectomy;'',
                (E) by striking ``enterectomy; colectomy;
            cholecystectomy;'',
                (F) by striking ``; transurerethral resection'' and
            inserting ``and resection'', and
                (G) by striking ``sacral laminectomy;''.
        (2) Section 4101(b)(2) of OBRA-1990 is amended--
                (A) in the matter before subparagraph (A), by striking
            ``1842(b)(16)'' and inserting ``1842(b)(16)(B)'', and
                (B) in subparagraph (B)--
                        (i) by striking ``, simple and subcutaneous'',
                        (ii) by striking ``(HCPCS codes 19160 and 19162)''
                    and inserting ``(HCPCS code 19160)'', and
                        (iii) by striking all that follows ``(HCPCS codes
                    92250'' and inserting ``and 92260).''.
        (b) Radiology Services (Section 4102 of OBRA-1990).--(1) Section
    1834(b)(4) (42 U.S.C. 1395m(b)(4)) is amended by redesignating
    subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively.
        (2) Section 1834(b)(4)(D) (42 U.S.C. 1395m(b)(4)(D)) is amended--
                (A) in the matter before clause (i), by striking ``shall be
            determined as follows:'' and inserting ``shall, subject to
            clause (vii), be reduced to the adjusted conversion factor for
            the locality determined as follows:'',
                (B) in clause (iv), by striking ``Local adjustment.--
            Subject to clause (vii), the conversion factor to be applied
            to'' and inserting ``Adjusted conversion factor.--The adjusted
            conversion factor for'',
                (C) in clause (vii), by striking ``under this
            subparagraph'', and
                (D) in clause (vii), by inserting ``reduced under this
            subparagraph by'' after ``shall not be''.
        (3) Section 4102(c)(2) of OBRA-1990 is amended by striking
    ``radiology services'' and all that follows and inserting ``nuclear
    medicine services.''.
        (4) Section 4102(d) of OBRA-1990 is amended by striking ``new
    paragraph'' and inserting ``new subparagraph''.
        (5) Section 1834(b)(4)(E) (42 U.S.C. 1395m(b)(4)(E)) is amended by
    inserting ``Rule for certain scanning services.--'' after ``(E)''.
        (6) Section 1848(a)(2)(D)(iii) (42 U.S.C. 1395w-4(a)(2)(D)(iii)) is
    amended by striking ``that are subject to section 6105(b) of the
    Omnibus Budget Reconciliation Act of 1989'' and by striking ``provided
    under such section'' and inserting ``provided under section 6105(b) of
    the Omnibus Budget Reconciliation Act of 1989''.
        (c) Anesthesia Services (Section 4103 of OBRA-1990).--(1) Section
    4103(a) of OBRA-1990 is amended by striking ``Reduction in Fee
    Schedule'' and inserting ``Reduction in Prevailing Charges''.
        (2) Section 1842(q)(1)(B) (42 U.S.C. 1395u(q)(1)(B)) is amended--
                (A) in the matter before clause (i), by striking ``shall be
            determined as follows:'' and inserting ``shall, subject to
            clause (iv), be reduced to the adjusted prevailing charge
            conversion factor for the locality determined as follows:'',
            and
                (B) in clause (iii), by striking ``Subject to clause (iv),
            the prevailing charge conversion factor to be applied in'' and
            inserting ``The adjusted prevailing charge conversion factor
            for''.
        (d) Assistants at Surgery (Section 4107 of OBRA-1990).--(1) Section
    4107(c) of OBRA-1990 is amended by inserting ``(a)(1)'' after
    ``subsection''.
        (2) Section 4107(a)(2) of OBRA-1990 is amended by adding at the end
    the following: ``In applying section 1848(g)(2)(D) of the Social
    Security Act for services of an assistant-at-surgery furnished during
    1991, the recognized payment amount shall not exceed the maximum amount
    specified under section 1848(i)(2)(A) of such Act (as applied under
    this paragraph in such year).''.
        (e) Technical Components of Diagnostic Services (Section 4108 of
    OBRA-1990).--Section 1842(b) (42 U.S.C. 1395u(b)) is amended by
    redesignating paragraph (18), as added by section 4108(a) of OBRA-1990,
    as paragraph (17) and, in such paragraph, by inserting ``, tests
    specified in paragraph (14)(C)(i),'' after ``diagnostic laboratory
    tests''.
        (f) Statewide Fee Schedules (Section 4117 of OBRA-1990).--Section
    4117 of OBRA-1990 is amended--
                (1) in subsection (a)--
                        (A) by striking ``(a) In General.--'', and
                        (B) by striking ``, if the'' and all that follows
                    through ``1991, ''; and
                (2) by striking subsections (b), (c), and (d).
        (g) Study of Aggregation Rule for Claims of Similar Physician
    Services (Section 4113 of OBRA-1990).--Section 4113 of OBRA-1990 is
    amended--
                (1) by inserting ``of the Social Security Act'' after
            ``1869(b)(2)''; and
                (2) by striking ``December 31, 1992'' and inserting
            ``December 31, 1993''.
        (h) Other Miscellaneous and Technical Amendments.--(1) The heading
    of section 1834(f) (42 U.S.C. 1395m(f)) is amended by striking ``Fiscal
    Year''.
        (2)(A) Section 4105(b) of OBRA-1990 is amended--
                (i) in paragraph (2), by striking ``amendments'' and
            inserting ``amendment'', and
                (ii) in paragraph (3), by striking ``amendments made by
            paragraphs (1) and (2)'' and inserting ``amendment made by
            paragraph (1)''.
        (B) Section 1848(f)(2)(C) (42 U.S.C. 1395w-4(f)(2)(C)) is amended
    by inserting ``Performance standard rates of increase for fiscal year
    1991.--'' after ``(C)''.
        (C) Section 4105(d) of OBRA-1990 is amended by inserting
    ``Publication of Performance Standard Rates.--'' after ``(d)''.
        (3) Section 1842(b)(4)(F) (42 U.S.C. 1395u(b)(4)(F)) is amended--
                (A) in clause (i), by striking ``prevailing charge'' the
            first place it appears and inserting ``customary charge''; and
                (B) in clause (ii)(III), by striking ``second, third, and
            fourth'' and inserting ``first, second, and third''.
        (4) Section 1842(b)(4)(F)(ii)(I) (42 U.S.C. 1395u(b)(4)(F)(ii)(I))
    is amended by striking ``respiratory therapist,''.
        (5) Section 4106(c) of OBRA-1990 is amended by inserting ``of the
    Social Security Act'' after ``1848(d)(1)(B)''.
        (6) Section 4114 of OBRA-1990 is amended by striking ``patients''
    the second place it appears.
        (7) Section 1848(e)(1)(C) (42 U.S.C. 1395w-4(e)(1)(C)) is amended
    by inserting ``date of the'' after ``since the''.
        (8) Section 4118(f)(1)(D) of OBRA-1990 is amended by striking ``is
    amended''.
        (9) Section 4118(f)(1)(N)(ii) of OBRA-1990 is amended by striking
    ``subsection (f)(5)(A)'' and inserting ``subsection (f)(5)(A))''.
        (10) Section 1845(e) (42 U.S.C. 1395w-1(e)) is amended--
                (A) by striking paragraph (2); and
                (B) by redesignating paragraphs (3), (4), and (5) as
            paragraphs (2), (3), and (4).
        (11) Section 4118(j)(2) of OBRA-1990 is amended by striking ``In
    section'' and inserting ``Section''.
        (12)(A) Section 1848(i)(3) (42 U.S.C. 1395w-4(i)(3)) is amended by
    striking the space before the period at the end.
        (B) Section 1834(a)(10)(B) (42 U.S.C. 1395m(a)(10)(B)) is amended
    by striking ``as such provisions apply to physicians' services and
    physicians and a reasonable charge under section 1842(b)''.
        (i) Other Corrections.--(1) Effective on the date of the enactment
    of this Act, section 6102(d)(4) of OBRA-1989 is amended by striking all
    that follows the first sentence.
        (2) Effective for payments for fiscal years beginning with fiscal
    year 1994, section 1842(c)(1) (42 U.S.C. 1395u(c)(1)) is amended--
                (A) in subparagraph (A), by striking ``(A) Any contract''
            and inserting ``Any contract''; and
                (B) by striking subparagraph (B).
        (j) Effective Date.--Except as provided in subsection (i), the
    amendments made by this section and the provisions of this section
    shall take effect as if included in the enactment of OBRA-1990.

      Subchapter B--Outpatient Hospital Services and Ambulatory Surgical
                                    Services

    SEC. 5021. EXTENSION OF 10 PERCENT REDUCTION IN PAYMENTS FOR CAPITAL-
                  RELATED COSTS OF OUTPATIENT HOSPITAL SERVICES.

        Section 1861(v)(1)(S)(ii)(I) (42 U.S.C. 1395x(v)(1)(S)(ii)(I)) is
    amended by striking ``fiscal year 1992, 1993, 1994, or 1995'' and
    inserting ``fiscal years 1992 through 1998''.

    SEC. 5022. EXTENSION OF CURRENT REDUCTION IN PAYMENTS FOR OTHER COSTS
                  OF OUTPATIENT HOSPITAL SERVICES.

        Section 1861(v)(1)(S)(ii)(II) (42 U.S.C. 1395x(v)(1)(S)(ii)(II)) is
    amended by striking ``1991'' and all that follows and inserting ``1991
    through 1998.''.

    SEC. 5023. 1-YEAR FREEZE IN AMBULATORY SURGERY RATES.

        The Secretary of Health and Human Services shall not provide for
    any update in the amounts of payment described in paragraphs (2)(A) and
    (2)(B) of section 1833(i)(2) of the Social Security Act that otherwise
    would occur in fiscal year 1994.

    SEC. 5024. EYE OR EYE AND EAR HOSPITALS.

        (a) In General.--Section 1833(i) (42 U.S.C. 1395l(i)) is amended--
                (1) in paragraph (3)(B)(ii)--
                        (A) by striking ``the last sentence of this
                    clause'' and inserting ``paragraph (4)'', and
                        (B) by striking the last sentence; and
                (2) by inserting after paragraph (3) the following new
            paragraph:
        ``(4)(A) In the case of a hospital that--
                ``(i) makes application to the Secretary and demonstrates
            that it specializes in eye services or eye and ear services (as
            determined by the Secretary),
                ``(ii) receives more than 30 percent of its total revenues
            from outpatient services, and
                ``(iii) on October 1, 1987--
                        ``(I) was an eye specialty hospital or an eye and
                    ear specialty hospital, or
                        ``(II) was operated as an eye or eye and ear unit
                    (as defined in subparagraph (B)) of a general acute
                    care hospital which, on the date of the application
                    described in clause (i), operates less than 20 percent
                    of the beds that the hospital operated on October 1,
                    1987, and has sold or otherwise disposed of a
                    substantial portion of the hospital's other acute care
                    operations,
    the cost proportion and ASC proportion in effect under subclauses (I)
    and (II) of paragraph (3)(B)(ii) for cost reporting periods beginning
    in fiscal year 1988 shall remain in effect for cost reporting periods
    beginning on or after October 1, 1988, and before January 1, 1995.
        ``(B) For purposes of this subparagraph (A)(iii)(II), the term `eye
    or eye and ear unit' means a physically separate or distinct unit
    containing separate surgical suites devoted solely to eye or eye and
    ear services.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to portions of cost reporting periods beginning on or after
    January 1, 1994.

    SEC. 5025. EXTENSION OF CAP ON PAYMENTS FOR INTRAOCULAR LENSES.

        (a) In General.--Section 4151(c)(3) of OBRA-1990 is amended by
    striking ``December 31, 1992'' and inserting ``December 31, 1994''.
        (b) Effective Date.--The amendment made by subsection (a) shall be
    effective as if included in the enactment of OBRA-1990.

    SEC. 5026. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

        (a) Payment Amounts for Services Furnished in Ambulatory Surgical
    Centers.--(1)(A) Section 1833(i)(2)(A)(i) (42 U.S.C. 1395l(i)(2)(A)(i))
    is amended by striking the comma at the end and inserting the
    following: ``, as determined in accordance with a survey (based upon a
    representative sample of procedures and facilities) taken not later
    than January 1, 1995, and every 5 years thereafter, of the actual
    audited costs incurred by such centers in providing such services,''.
        (B) Section 1833(i)(2) (42 U.S.C. 1395l(i)(2)) is amended--
                (i) in the second sentence of subparagraph (A) and the
            second sentence of subparagraph (B), by striking ``and may be
            adjusted by the Secretary, when appropriate,''; and
                (ii) by adding at the end the following new subparagraph:
        ``(C) Notwithstanding the second sentence of subparagraph (A) or
    the second sentence of subparagraph (B), if the Secretary has not
    updated amounts established under such subparagraphs with respect to
    facility services furnished during a fiscal year (beginning with fiscal
    year 1996), such amounts shall be increased by the percentage increase
    in the consumer price index for all urban consumers (U.S. city average)
    as estimated by the Secretary for the 12-month period ending with the
    midpoint of the fiscal year involved.''.
        (C) The second sentence of section 1833(i)(1) (42 U.S.C.
    1395l(i)(1)) is amended by striking the period and inserting the
    following: ``, in consultation with appropriate trade and professional
    organizations.''.
        (2) Section 4151(c)(3) of OBRA-1990 is amended by striking ``for
    the insertion of an intraocular lens'' and inserting ``for an
    intraocular lens inserted''.
        (b) Adjustments to Payment Amounts for New Technology Intraocular
    Lenses.--(1) Not later than 1 year after the date of the enactment of
    this Act, the Secretary of Health and Human Services (in this
    subsection referred to as the ``Secretary'') shall develop and
    implement a process under which interested parties may request review
    by the Secretary of the appropriateness of the reimbursement amount
    provided under section 1833(i)(2)(A)(iii) of the Social Security Act
    with respect to a class of new technology intraocular lenses. For
    purposes of the preceding sentence, an intraocular lens may not be
    treated as a new technology lens unless it has been approved by the
    Food and Drug Administration.
        (2) In determining whether to provide an adjustment of payment with
    respect to a particular lens under paragraph (1), the Secretary shall
    take into account whether use of the lens is likely to result in
    reduced risk of intraoperative or postoperative complication or trauma,
    accelerated postoperative recovery, reduced induced astigmatism,
    improved postoperative visual acuity, more stable postoperative vision,
    or other comparable clinical advantages.
        (3) The Secretary shall publish notice in the Federal Register from
    time to time (but no less often than once each year) of a list of the
    requests that the Secretary has received for review under this
    subsection, and shall provide for a 30-day comment period on the lenses
    that are the subjects of the requests contained in such notice. The
    Secretary shall publish a notice of his determinations with respect to
    intraocular lenses listed in the notice within 90 days after the close
    of the comment period.
        (4) Any adjustment of a payment amount (or payment limit) made
    under this subsection shall become effective not later than 30 days
    after the date on which the notice with respect to the adjustment is
    published under paragraph (3).

                    Subchapter C--Durable Medical Equipment

    SEC. 5031. REVISIONS TO PAYMENT RULES FOR DURABLE MEDICAL EQUIPMENT.

        (a) Basing National Payment Limits on Median of Local Payment
    Amounts.--
                (1) Inexpensive and routinely purchased items; items
            requiring frequent and substantial servicing.--(A) Paragraphs
            (2)(C)(i)(II) and (3)(C)(i)(II) of section 1834(a) (42 U.S.C.
            1395m(a)) are each amended--
                        (i) by striking ``1992'' the first place it appears
                    and inserting ``1992, 1993, and 1994''; and
                        (ii) by striking ``1992'' the second place it
                    appears and inserting ``the year''.
                (B) Paragraphs (2)(C)(ii) and (3)(C)(ii) of section 1834(a)
            (42 U.S.C. 1395m(a)) are each amended--
                        (i) by striking ``and'' at the end of subclause
                    (I);
                        (ii) by redesignating subclause (II) as (IV); and
                        (iii) by inserting after subclause (I) the
                    following new subclauses:
                                        ``(II) for 1992 and 1993, the
                                    amount determined under this clause for
                                    the preceding year increased by the
                                    covered item update for such subsequent
                                    year,
                                        ``(III) for 1994, the local payment
                                    amount determined under clause (i) for
                                    such item or device for that year,
                                    except that the national limited
                                    payment amount may not exceed 100
                                    percent of the median of all local
                                    payment amounts determined under such
                                    clause for such item for that year and
                                    may not be less than 85 percent of the
                                    median of all local payment amounts
                                    determined under such clause for such
                                    item or device for that year, and''.
                (2) Miscellaneous devices and items.--Section 1834(a)(8)
            (42 U.S.C. 1395m(a)(8)) is amended--
                        (A) in subparagraph (A)(ii)(III), by striking
                    ``1992'' and inserting ``1992, 1993, and 1994''; and
                        (B) in subparagraph (B)--
                                (i) by striking ``and'' at the end of
                            clause (i),
                                (ii) by redesignating clause (ii) as (iv),
                            and
                                (iii) by inserting after clause (i) the
                            following new clauses:
                                ``(ii) for 1992 and 1993, the amount
                            determined under this subparagraph for the
                            preceding year increased by the covered item
                            update for such subsequent year;
                                ``(iii) for 1994, the local purchase price
                            computed under subparagraph (A)(ii) for the
                            item for the year, except that such national
                            limited purchase price may not exceed 100
                            percent of the median of all local purchase
                            prices computed for the item under such
                            subparagraph for the year and may not be less
                            than 85 percent of the median of all local
                            purchase prices computed under such
                            subparagraph for the item for the year; and''.
                (3) Oxygen and oxygen equipment.--Section 1834(a)(9) (42
            U.S.C. 1395m(a)(9)) is amended--
                        (A) in subparagraph (A)(ii)(II), by striking ``1991
                    and 1992'' and inserting ``1991, 1992, 1993, and
                    1994''; and
                        (B) in subparagraph (B)--
                                (i) by striking ``and'' at the end of
                            clause (i),
                                (ii) by redesignating clause (ii) as (iv),
                            and
                                (iii) by inserting after clause (i) the
                            following new clauses:
                                ``(ii) for 1992 and 1993, the amount
                            determined under this subparagraph for the
                            preceding year increased by the covered item
                            update for such subsequent year;
                                ``(iii) for 1994, the local monthly payment
                            rate computed under subparagraph (A)(ii) for
                            the item for the year, except that such
                            national limited monthly payment rate may not
                            exceed 100 percent of the median of all local
                            monthly payment rates computed for the item
                            under such subparagraph for the year and may
                            not be less than 85 percent of the median of
                            all local monthly payment rates computed for
                            the item under such subparagraph for the year;
                            and''.
        (b) Payment for Prosthetic Devices and Orthotics and Prosthetics.--
                (1) In general.--Section 1834(h)(2) (42 U.S.C. 1395m(h)(2))
            is amended--
                        (A) in subparagraph (A)(ii)(II), by striking ``1992
                    or 1993'' and inserting ``1992, 1993, or 1994'';
                        (B) in subparagraph (B)(ii), by striking ``each
                    subsequent year'' and inserting ``1993'';
                        (C) in subparagraph (C)(iv), by striking ``regional
                    purchase price computed under subparagraph (B)'' and
                    inserting ``national limited purchase price computed
                    under subparagraph (E)'';
                        (D) in subparagraph (D)(ii), by striking ``a
                    subsequent year'' and inserting ``1993''; and
                        (E) by adding at the end the following new
                    subparagraph:
                        ``(E) Computation of national limited purchase
                    price.--With respect to the furnishing of a particular
                    item in a year, the Secretary shall compute a national
                    limited purchase price--
                                ``(i) for 1994, equal to the local purchase
                            price computed under subparagraph (A)(ii)(II)
                            for the item for the year, except that such
                            national limited purchase price may not exceed
                            100 percent of the median of all local purchase
                            prices for the item computed under such
                            subparagraph for the year, and may not be less
                            than 85 percent of the median of all local
                            purchase prices for the item computed under
                            such subparagraph for the year; and
                                ``(ii) for each subsequent year, equal to
                            the amount determined under this subparagraph
                            for the preceding year increased by the
                            applicable percentage increase for such
                            subsequent year.''.
                (2) Exception for certain items.--Section 1834(h) (42
            U.S.C. 1395m(h)), as amended by paragraph (1), is further
            amended--
                        (A) in paragraph (1)(B), by striking ``subparagraph
                    (C),'' and inserting ``subparagraphs (C) and (F),'';
                    and
                        (B) by adding at the end of paragraph (2) the
                    following new subparagraph:
                        ``(F) Exception for certain items.--Payment for
                    ostomy supplies, tracheostomy supplies, and urologicals
                    shall be made in accordance with subparagraphs (B) and
                    (C) of section 1834(a)(2).''.
        (c) Effective Date.--The amendments made by this section shall
    apply to items furnished on or after January 1, 1994.

    SEC. 5032. PAYMENT FOR PARENTERAL AND ENTERAL NUTRIENTS, SUPPLIES, AND
                  EQUIPMENT DURING 1994.

        In determining the amount of payment under part B of title XVIII of
    the Social Security Act during 1994, the charges determined to be
    reasonable with respect to parenteral and enteral nutrients, supplies,
    and equipment may not exceed the charges determined to be reasonable
    with respect to such nutrients, supplies, and equipment during 1993.

    SEC. 5033. TREATMENT OF NEBULIZERS AND ASPIRATORS.

        (a) In General.--Section 1834(a)(3)(A) (42 U.S.C. 1395m(a)(3)(A))
    is amended by striking ``ventilators, aspirators, IPPB machines, and
    nebulizers'' and inserting ``ventilators and IPPB machines''.
        (b) Payment for Accessories Relating to Nebulizers and
    Aspirators.--Section 1834(a)(2)(A) (42 U.S.C. 1395m(a)) is amended--
                (1) by striking ``or'' at the end of clause (i),
                (2) by adding ``or'' at the end of clause (ii), and
                (3) by inserting after clause (ii) the following new
            clause:
                                ``(iii) which is an accessory used in
                            conjunction with a nebulizer or aspirator,''.
        (c) Effective Date.--The amendments made by this section shall
    apply to items furnished on or after January 1, 1994.

    SEC. 5034. CERTIFICATION OF SUPPLIERS.

        (a) Requirements.--
                (1) In general.--Section 1834 (42 U.S.C. 1395m) is amended
            by adding at the end the following new subsection:
        ``(i) Requirements for Suppliers of Medical Equipment and
    Supplies.--
                ``(1) Issuance and renewal of supplier number.--
                        ``(A) Payment.--Except as provided in subparagraph
                    (C), no payment may be made under this part after
                    October 1, 1994, for items furnished by a supplier of
                    medical equipment and supplies unless such supplier
                    obtains (and renews at such intervals as the Secretary
                    may require) a supplier number.
                        ``(B) Standards for possessing a supplier number.--
                    A supplier may not obtain a supplier number unless--
                                ``(i) for medical equipment and supplies
                            furnished on or after October 1, 1994, and
                            before January 1, 1996, the supplier meets
                            standards prescribed by the Secretary; and
                                ``(ii) for medical equipment and supplies
                            furnished on or after January 1, 1996, the
                            supplier meets revised standards prescribed by
                            the Secretary (in consultation with
                            representatives of suppliers of medical
                            equipment and supplies, carriers, and
                            consumers) that shall include requirements that
                            the supplier--
                                        ``(I) comply with all applicable
                                    State and Federal licensure and
                                    regulatory requirements;
                                        ``(II) maintain a physical facility
                                    on an appropriate site;
                                        ``(III) have proof of appropriate
                                    liability insurance; and
                                        ``(IV) meet such other requirements
                                    as the Secretary may specify.
                        ``(C) Exception for items furnished as incident to
                    a physician's service.--Subparagraph (A) shall not
                    apply with respect to medical equipment and supplies
                    furnished as an incident to a physician's service.
                        ``(D) Prohibition against multiple supplier
                    numbers.--The Secretary may not issue more than one
                    supplier number to any supplier of medical equipment
                    and supplies unless the issuance of more than one
                    number is appropriate to identify subsidiary or
                    regional entities under the supplier's ownership or
                    control.
                        ``(E) Prohibition against delegation of supplier
                    determinations.--The Secretary may not delegate (other
                    than by contract under section 1842) the responsibility
                    to determine whether suppliers meet the standards
                    necessary to obtain a supplier number.
                ``(2) Certificates of medical necessity.--
                        ``(A) Standardized certificates.--Not later than
                    October 1, 1994, the Secretary shall, in consultation
                    with carriers under this part, develop one or more
                    standardized certificates of medical necessity (as
                    defined in subparagraph (C)) for medical equipment and
                    supplies for which the Secretary determines that such a
                    certificate is necessary.
                        ``(B) Prohibition against distribution by suppliers
                    of certificates of medical necessity.--
                                ``(i) In general.--Except as provided in
                            clause (ii), a supplier of medical equipment
                            and supplies may not distribute to physicians
                            or to individuals entitled to benefits under
                            this part for commercial purposes any completed
                            or partially completed certificates of medical
                            necessity on or after October 1, 1994.
                                ``(ii) Exception for certain billing
                            information.--Clause (i) shall not apply with
                            respect to a certificate of medical necessity
                            for any item that is not contained on the list
                            of potentially overused items developed by the
                            Secretary under subsection (a)(15)(A) to the
                            extent that such certificate contains only
                            information completed by the supplier of
                            medical equipment and supplies identifying such
                            supplier and the beneficiary to whom such
                            medical equipment and supplies are furnished, a
                            description of such medical equipment and
                            supplies, any product code identifying such
                            medical equipment and supplies, and any other
                            administrative information (other than
                            information relating to the beneficiary's
                            medical condition) identified by the Secretary.
                            In the event a supplier provides a certificate
                            of medical necessity containing information
                            permitted under this clause, such certificate
                            shall also contain the fee schedule amount and
                            the supplier's charge for the medical equipment
                            or supplies being furnished prior to
                            distribution of such certificate to the
                            physician.
                                ``(iii) Penalty.--Any supplier of medical
                            equipment and supplies who knowingly and
                            willfully distributes a certificate of medical
                            necessity in violation of clause (i) is subject
                            to a civil money penalty in an amount not to
                            exceed $1,000 for each such certificate of
                            medical necessity so distributed. The
                            provisions of section 1128A (other than
                            subsections (a) and (b)) shall apply to civil
                            money penalties under this subparagraph in the
                            same manner as they apply to a penalty or
                            proceeding under section 1128A(a).
                        ``(C) Definition.--For purposes of this paragraph,
                    the term `certificate of medical necessity' means a
                    form or other document containing information required
                    by the Secretary to be submitted to show that a covered
                    item is reasonable and necessary for the diagnosis or
                    treatment of illness or injury or to improve the
                    functioning of a malformed body member.
        ``(3) Coverage and review criteria.--
                        ``(A) Development and establishment.--Not later
                    than January 1, 1996, the Secretary, in consultation
                    with representatives of suppliers of medical equipment
                    and supplies, individuals enrolled under this part, and
                    appropriate medical specialty societies, shall develop
                    and establish uniform national coverage and utilization
                    review criteria for 200 items of medical equipment and
                    supplies selected in accordance with the standards
                    described in subparagraph (B). The Secretary shall
                    publish the criteria as part of the instructions
                    provided to fiscal intermediaries and carriers under
                    this part and no further publication, including
                    publication in the Federal Register, shall be required.
                        ``(B) Standards for selecting items subject to
                    criteria.--The Secretary may select an item for
                    coverage under the criteria developed and established
                    under subparagraph (A) if the Secretary finds that--
                                ``(i) the item is frequently purchased or
                            rented by beneficiaries;
                                ``(ii) the item is frequently subject to a
                            determination that such item is not medically
                            necessary; or
                                ``(iii) the coverage or utilization
                            criteria applied to the item (as of the date of
                            the enactment of this subsection) is not
                            consistent among carriers.
                        ``(C) Annual review and expansion of items subject
                    to criteria.--The Secretary shall annually review the
                    coverage and utilization of items of medical equipment
                    and supplies to determine whether items not included
                    among the items selected under subparagraph (A) should
                    be made subject to uniform national coverage and
                    utilization review criteria, and, if appropriate, shall
                    develop and apply such criteria to such additional
                    items.
                ``(4) Definition.--The term `medical equipment and
            supplies' means--
                        ``(A) durable medical equipment (as defined in
                    section 1861(n));
                        ``(B) prosthetic devices (as described in section
                    1861(s)(8));
                        ``(C) orthotics and prosthetics (as described in
                    section 1861(s)(9));
                        ``(D) surgical dressings (as described in section
                    1861(s)(5));
                        ``(E) such other items as the Secretary may
                    determine; and
                        ``(F) for purposes of paragraphs (1) and (3)--
                                ``(i) home dialysis supplies and equipment
                            (as described in section 1861(s)(2)(F)), and
                                ``(ii) immunosuppressive drugs (as
                            described in section 1861(s)(2)(J)).''.
                (2) Conforming amendment.--Effective October 1, 1994,
            paragraph (16) of section 1834(a) (42 U.S.C. 1395m(a)) is
            repealed.
        (b) Report on Effect of Uniform Criteria on Utilization of Items.--
    Not later than July 1, 1996, the Secretary shall submit a report to the
    Committee on Ways and Means and the Committee on Energy and Commerce of
    the House of Representatives and the Committee on Finance of the Senate
    analyzing the impact of the uniform criteria established under section
    1834(i)(3)(A) of the Social Security Act (as added by subsection (a))
    on the utilization of items of medical equipment and supplies by
    individuals enrolled under part B of the medicare program.
        (c) Use of Covered Items by Disabled Beneficiaries.--
                (1) In general.--The Secretary of Health and Human
            Services, in consultation with representatives of suppliers of
            durable medical equipment under part B of the medicare program
            and individuals entitled to benefits under such program on the
            basis of disability, shall conduct a study of the effects of
            the methodology for determining payments for items of such
            equipment under such part on the ability of such individuals to
            obtain items of such equipment, including customized items.
                (2) Report.--Not later than one year after the date of the
            enactment of this Act, the Secretary shall submit a report to
            Congress on the study conducted under paragraph (1), and shall
            include in the report such recommendations as the Secretary
            considers appropriate to assure that disabled medicare
            beneficiaries have access to items of durable medical
            equipment.
        (d) Criteria for Treatment of Items as Prosthetics Devices or
    Orthotics and Prosthetics.--Not later than one year after the date of
    the enactment of this Act, the Secretary of Health and Human Services
    shall submit a report to the Committees on Ways and Means and Energy
    and Commerce of the House of Representatives and the Committee on
    Finance of the Senate describing prosthetic devices or orthotics and
    prosthetics covered under part B of the medicare program that do not
    require individualized or custom fitting and adjustment to be used by a
    patient. Such report shall include recommendations for an appropriate
    methodology for determining the amount of payment for such items under
    such program.

    SEC. 5035. PROHIBITION AGAINST CARRIER FORUM SHOPPING.

        (a) In General.--Section 1834(a)(12) (42 U.S.C. 1395m(a)(12)) is
    amended to read as follows:
                ``(12) Use of carriers to process claims.--
                        ``(A) Designation of regional carriers.--The
                    Secretary may designate, by regulation under section
                    1842, one carrier for one or more entire regions to
                    process all claims within the region for covered items
                    under this section.
                        ``(B) Prohibition against carrier shopping.--(i) No
                    supplier of a covered item may present or cause to be
                    presented a claim for payment under this part unless
                    such claim is presented to the appropriate regional
                    carrier (as designated by the Secretary).
                        ``(ii) For purposes of clause (i), the term
                    `appropriate regional carrier' means the carrier having
                    jurisdiction over the geographic area that includes the
                    permanent residence of the patient to whom the item is
                    furnished.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to items furnished on or after October 1, 1993.
        (c) Clarification of Authority To Designate Carriers for Other
    Items and Services.--Nothing in this subsection or the amendment made
    by this subsection may be construed to restrict the authority of the
    Secretary of Health and Human Services to designate regional carriers
    or modify claims jurisdiction rules with respect to items or services
    under part B of the medicare program that are not covered items under
    section 1834(a) of the Social Security Act or prosthetic devices or
    orthotics and prosthetics under section 1834(h) of such Act.

    SEC. 5036. RESTRICTIONS ON CERTAIN MARKETING AND SALES ACTIVITIES.

        (a) Prohibiting Unsolicited Telephone Contacts From Suppliers of
    Durable Medical Equipment to Medicare Beneficiaries.--
                (1) In general.--Section 1834(a) (42 U.S.C. 1395m(a)) is
            amended by adding at the end the following new paragraph:
                ``(17) Prohibition against unsolicited telephone contacts
            by suppliers.--
                        ``(A) In general.--A supplier of a covered item
                    under this subsection may not contact an individual
                    enrolled under this part by telephone regarding the
                    furnishing of a covered item to the individual (other
                    than a covered item the supplier has already furnished
                    to the individual) unless--
                                ``(i) the individual gives permission to
                            the supplier to make contact by telephone for
                            such purpose; or
                                ``(ii) the supplier has furnished a covered
                            item under this subsection to the individual
                            during the 15-month period preceding the date
                            on which the supplier contacts the individual
                            for such purpose.
                        ``(B) Prohibiting payment for items furnished
                    subsequent to unsolicited contacts.--If a supplier
                    knowingly contacts an individual in violation of
                    subparagraph (A), no payment may be made under this
                    part for any item subsequently furnished to the
                    individual by the supplier.
                        ``(C) Exclusion from program for suppliers engaging
                    in pattern of unsolicited contacts.--If a supplier
                    knowingly contacts individuals in violation of
                    subparagraph (A) to such an extent that the supplier's
                    conduct establishes a pattern of contacts in violation
                    of such subparagraph, the Secretary shall exclude the
                    supplier from participation in the programs under this
                    Act, in accordance with the procedures set forth in
                    subsections (c), (f), and (g) of section 1128.''.
                (2) Requiring refund of amounts collected for disallowed
            items.--Section 1834(a) (42 U.S.C. 1395m(a)), as amended by
            paragraph (1), is amended by adding at the end the following
            new paragraph:
                ``(18) Refund of amounts collected for certain disallowed
            items.--
                        ``(A) In general.--If a nonparticipating supplier
                    furnishes to an individual enrolled under this part a
                    covered item for which no payment may be made under
                    this part by reason of paragraph (17)(B), the supplier
                    shall refund on a timely basis to the patient (and
                    shall be liable to the patient for) any amounts
                    collected from the patient for the item, unless--
                                ``(i) the supplier establishes that the
                            supplier did not know and could not reasonably
                            have been expected to know that payment may not
                            be made for the item by reason of paragraph
                            (17)(B), or
                                ``(ii) before the item was furnished, the
                            patient was informed that payment under this
                            part may not be made for that item and the
                            patient has agreed to pay for that item.
                        ``(B) Sanctions.--If a supplier knowingly and
                    willfully fails to make refunds in violation of
                    subparagraph (A), the Secretary may apply sanctions
                    against the supplier in accordance with section
                    1842(j)(2).
                        ``(C) Notice.--Each carrier with a contract in
                    effect under this part with respect to suppliers of
                    covered items shall send any notice of denial of
                    payment for covered items by reason of paragraph
                    (17)(B) and for which payment is not requested on an
                    assignment-related basis to the supplier and the
                    patient involved.
                        ``(D) Timely basis defined.--A refund under
                    subparagraph (A) is considered to be on a timely basis
                    only if--
                                ``(i) in the case of a supplier who does
                            not request reconsideration or seek appeal on a
                            timely basis, the refund is made within 30 days
                            after the date the supplier receives a denial
                            notice under subparagraph (C), or
                                ``(ii) in the case in which such a
                            reconsideration or appeal is taken, the refund
                            is made within 15 days after the date the
                            supplier receives notice of an adverse
                            determination on reconsideration or appeal.''.
        (b) Conforming Amendment.--Section 1834(h)(3) (42 U.S.C.
    1395m(h)(3)) is amended by striking ``Paragraph (12)'' and inserting
    ``Paragraphs (12) and (17)''.
        (c) Effective Date.--The amendments made by subsections (a) and (b)
    shall apply to items furnished after the expiration of the 60-day
    period that begins on the date of the enactment of this Act.

    SEC. 5037. KICKBACK CLARIFICATION.

        (a) In General.--Section 1128B(b)(3)(B) (42 U.S.C. 1320a-
    7b(b)(3)(B)) is amended by inserting before the semicolon the
    following: ``(except that in the case of a contract supply arrangement
    between any entity and a supplier of medical supplies and equipment (as
    defined in section 1834(i)(4), but not including items described in
    subparagraph (F) of such section), such employment shall not be
    considered bona fide to the extent that it includes tasks of a clerical
    and cataloging nature in transmitting to suppliers assignment rights of
    individuals eligible for benefits under part B of title XVIII, or
    performance of warehousing or stock inventory functions)''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply with respect to services furnished on or after the first day of
    the first month that begins after the expiration of the 60-day period
    beginning on the date of the enactment of this Act.

    SEC. 5038. BENEFICIARY LIABILITY FOR NONCOVERED SERVICES.

        (a) Unassigned Claims.--
                (1) In general.--Section 1834(i) (42 U.S.C. 1395m(i)), as
            added by section 5034(a)(1), is amended--
                        (A) by redesignating paragraph (4) as paragraph
                    (5), and
                        (B) by inserting after paragraph (3) the following
                    new paragraph:
                ``(4) Limitation on patient liability.--If a supplier of
            medical equipment and supplies (as defined in paragraph (5))--
                        ``(A) furnishes an item or service to a beneficiary
                    for which no payment may be made by reason of paragraph
                    (1);
                        ``(B) furnishes an item or service to a beneficiary
                    for which payment is denied in advance under subsection
                    (a)(15); or
                        ``(C) furnishes an item or service to a beneficiary
                    for which payment is denied under section 1862(a)(1);
            any expenses incurred for items and services furnished to an
            individual by such a supplier not on an assigned basis shall be
            the responsibility of such supplier. The individual shall have
            no financial responsibility for such expenses and the supplier
            shall refund on a timely basis to the individual (and shall be
            liable to the individual for) any amounts collected from the
            individual for such items or services. The provisions of
            subsection (a)(18) shall apply to refunds required under the
            previous sentence in the same manner as such provisions apply
            to refunds under such subsection.''.
                (2) Conforming amendment.--Section 1128B(b)(3)(B) (42
            U.S.C. 1320a-7b(b)(3)(B)), as amended by section 5037(a), is
            amended by striking ``1834(i)(4)'' and inserting
            ``1834(i)(5)''.
        (b) Assigned Claims.--Section 1879 (42 U.S.C. 1395pp) is amended by
    adding at the end the following new subsection:
        ``(h) If a supplier of medical equipment and supplies (as defined
    in section 1834(i)(4))--
                ``(1) furnishes an item or service to a beneficiary for
            which no payment may be made by reason of section 1834(i)(1);
            or
                ``(2) furnishes an item or service to a beneficiary for
            which payment is denied in advance under section 1834(a)(15);
    any expenses incurred for items and services furnished to an individual
    by such a supplier on an assignment-related basis shall be the
    responsibility of such supplier. The individual shall have no financial
    responsibility for such expenses and the supplier shall refund on a
    timely basis to the individual (and shall be liable to the individual
    for) any amounts collected from the individual for such items or
    services. The provisions of section 1834(a)(18) shall apply to refunds
    required under the previous sentence in the same manner as such
    provisions apply to refunds under such section.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to items or services furnished on or after October 1, 1994.

    SEC. 5039. ADJUSTMENTS FOR INHERENT REASONABLENESS.

        (a) Adjustments Made to Final Payment Amounts.--
                (1) In general.--Section 1834(a)(10)(B) (42 U.S.C.
            1395m(a)(10)(B)) is amended by adding at the end the following:
            ``In applying such provisions to payments for an item under
            this subsection, the Secretary shall make adjustments to the
            payment basis for the item described in paragraph (1)(B) if the
            Secretary determines (in accordance with such provisions and on
            the basis of prices and costs applicable at the time the item
            is furnished) that such payment basis is not inherently
            reasonable.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall take effect on the date of the enactment of this Act.
        (b) Adjustment Required for Certain Items.--
                (1) In general.--In accordance with section 1834(a)(10)(B)
            of the Social Security Act (as amended by subsection (a)), the
            Secretary of Health and Human Services shall determine whether
            the payment amounts for the items described in paragraph (2)
            are not inherently reasonable, and shall adjust such amounts in
            accordance with such section if the amounts are not inherently
            reasonable.
                (2) Items described.--The items referred to in paragraph
            (1) are decubitus care equipment, transcutaneous electrical
            nerve stimulators, and any other items considered appropriate
            by the Secretary.

    SEC. 5040. PAYMENT FOR SURGICAL DRESSINGS.

        (a) In General.--Section 1834 (42 U.S.C. 1395m), as amended by
    section 5034(a)(1), is amended by adding at the end the following new
    subsection:
        ``(j) Payment for Surgical Dressings.--
                ``(1) In general.--Payment under this subsection for
            surgical dressings (described in section 1861(s)(5)) shall be
            made in a lump sum amount for the purchase of the item in an
            amount equal to 80 percent of the lesser of--
                        ``(A) the actual charge for the item; or
                        ``(B) a payment amount determined in accordance
                    with the methodology described in subparagraphs (B) and
                    (C) of subsection (a)(2) (except that in applying such
                    methodology, the national limited payment amount
                    referred to in such subparagraphs shall be initially
                    computed based on local payment amounts using average
                    reasonable charges for the 12-month period ending
                    December 31, 1992, increased by the covered item
                    updates described in such subsection for 1993 and 1994)
                ``(2) Exceptions.--Paragraph (1) shall not apply to
            surgical dressings that are--
                        ``(A) furnished as an incident to a physician's
                    professional service; or
                        ``(B) furnished by a home health agency.''.
        (b) Conforming Amendment.--Section 1833(a)(1) (42 U.S.C.
    1395l(a)(1)), as amended by sections 5070(e)(2) and 5010(e)(1), is
    amended--
                (1) by striking ``and'' before ``(P)'', and
                (2) by inserting before the semicolon at the end the
            following: ``, and (Q) with respect to surgical dressings, the
            amounts paid shall be the amounts determined under section
            1834(j)''.
        (c) Effective Date.--The amendments made by this section shall
    apply to items furnished on or after January 1, 1994.

    SEC. 5041. PAYMENTS FOR TENS DEVICES.

        (a) In General.--Section 1834(a)(1)(D) (42 U.S.C. 1395m(a)(1)(D))
    is amended by striking ``15 percent'' the second place it appears and
    inserting ``45 percent''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to items furnished on or after January 1, 1994.

    SEC. 5042. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

        (a) Updates to Payment Amounts.--Subparagraph (A) of section
    1834(a)(14) (42 U.S.C. 1395m(a)(14)) is amended to read as follows:
                        ``(A) for 1991 and 1992, the percentage increase in
                    the consumer price index for all urban consumers (U.S.
                    city average) for the 12-month period ending with June
                    of the previous year reduced by 1 percentage point;
                    and''.
        (b) Treatment of Potentially Overused Items and Advanced
    Determinations of Coverage.--(1) Effective on the date of the enactment
    of this Act, section 1834(a)(15) (42 U.S.C. 1395m(a)(15)) is amended to
    read as follows:
                ``(15) Special treatment for potentially overused items.--
                        ``(A) Development of list of items by secretary.--
                    The Secretary shall develop and periodically update a
                    list of items for which payment may be made under this
                    subsection that are potentially overused, and shall
                    include in such list seat-lift mechanisms,
                    transcutaneous electrical nerve stimulators, motorized
                    scooters, decubitus care mattresses, and any such other
                    item determined by the Secretary to be potentially
                    overused on the basis of any of the following
                    criteria--
                                ``(i) the item is marketed directly to
                            potential patients;
                                ``(ii) the item is marketed with an offer
                            to potential patients to waive the costs of
                            coinsurance associated with the item or is
                            marketed as being available at no cost to
                            policyholders of a medicare supplemental policy
                            (as defined in section 1882(g)(1));
                                ``(iii) the item has been subject to a
                            consistent pattern of overutilization; or
                                ``(iv) a high proportion of claims for
                            payment for such item under this part may not
                            be made because of the application of section
                            1862(a)(1).
                        ``(B) Items subject to special carrier scrutiny.--
                    Payment may not be made under this part for any item
                    contained in the list developed by the Secretary under
                    subparagraph (A) unless the carrier has subjected the
                    claim for payment for the item to special scrutiny or
                    has followed the procedures described in paragraph
                    (11)(C) with respect to the item.''.
        (2) Effective January 1, 1994, section 1834(a)(11) (42 U.S.C.
    1395m(a)) is amended by adding at the end the following new
    subparagraph:
                        ``(C) Carrier determinations for certain items in
                    advance.--A carrier shall determine in advance whether
                    payment for an item may not be made under this
                    subsection because of the application of section
                    1862(a)(1) if--
                                ``(i) the item is a customized item (other
                            than inexpensive items specified by the
                            Secretary); or
                                ``(ii) the item is a specified covered item
                            under subparagraph (B).''.
        (3) Effective for standards applied for contract years beginning
    after the date of the enactment of this Act, section 1842(c) (42 U.S.C.
    1395u(c)), as amended by section 5013(a), is amended by adding at the
    end the following new paragraph:
        ``(5) Each contract under this section which provides for the
    disbursement of funds, as described in subsection (a)(1)(B), shall
    require the carrier to meet criteria developed by the Secretary to
    measure the timeliness of carrier responses to requests for payment of
    items described in section 1834(a)(11)(C).''.
        (4) Section 1834(h)(3) (42 U.S.C. 1395m(h)(3)) is amended by
    striking ``paragraph (10) and paragraph (11)'' and inserting
    ``paragraphs (10) and (11)''.
        (c) Study of Variations in Durable Medical Equipment Supplier
    Costs.--
                (1) Collection and analysis of supplier cost data.--The
            Administrator of the Health Care Financing Administration
            shall, in consultation with appropriate organizations, collect
            data on supplier costs of durable medical equipment for which
            payment may be made under part B of the medicare program, and
            shall analyze such data to determine the proportions of such
            costs attributable to the service and product components of
            furnishing such equipment and the extent to which such
            proportions vary by type of equipment and by the geographic
            region in which the supplier is located.
                (2) Development of geographic adjustment index; reports.--
            Not later than January 1, 1995--
                        (A) the Administrator shall submit a report to the
                    Committees on Energy and Commerce and Ways and Means of
                    the House of Representatives and the Committee on
                    Finance of the Senate on the data collected and the
                    analysis conducted under paragraph (1), and shall
                    include in such report the Administrator's
                    recommendations for a geographic cost adjustment index
                    for suppliers of durable medical equipment under the
                    medicare program and an analysis of the impact of such
                    proposed index on payments under the medicare program;
                    and
                        (B) the Comptroller General shall submit a report
                    to the Committees on Energy and Commerce and Ways and
                    Means of the House of Representatives and the Committee
                    on Finance of the Senate analyzing on a geographic
                    basis the supplier costs of durable medical equipment
                    under the medicare program.
        (d) Oxygen Retesting.--Section 1834(a)(5)(E) (42 U.S.C.
    1395m(a)(5)(E)) is amended by striking ``55'' and inserting ``56''.
        (e) Other Miscellaneous and Technical Amendments.--(1) Section
    4152(a)(3) of OBRA-1990 is amended by striking ``amendment made by
    subsection (a)'' and inserting ``amendments made by this subsection''.
        (2) Section 4152(c)(2) of OBRA-1990 is amended by striking
    ``1395m(a)(7)(A)'' and inserting ``1395m(a)(7)''.
        (3) Section 1834(a)(7)(A)(iii)(II) (42 U.S.C.
    1395m(a)(7)(A)(iii)(II)) is amended by striking ``clause (v)'' and
    inserting ``clause (vi)''.
        (4) Section 1834(a)(7)(C)(i) (42 U.S.C. 1395m(a)(7)(C)(i)) is
    amended by striking ``or paragraph (3)''.
        (5) Section 1834(a)(3) (42 U.S.C. 1395m(a)(3)) is amended by
    striking subparagraph (D).
        (6) Section 4153(c)(1) of OBRA-1990 is amended by striking
    ``1834(a)'' and inserting ``1834(h)''.
        (7) Section 4153(d)(2) of OBRA-1990 is amended by striking
    ``Reconiliation'' and inserting ``Reconciliation''.
        (8)(A) Section 1834(a) (42 U.S.C. 1395m(a)) is amended by striking
    paragraph (6).
        (B) Section 1834(a) (42 U.S.C. 1395m(a)) is amended--
                (i) in subparagraphs (A) and (B) of paragraph (1), by
            striking ``(2) through (7)'' each place it appears and
            inserting ``(2) through (5) and (7)'';
                (ii) in paragraph (7), by striking ``(2) through (6)'' and
            inserting ``(2) through (5)'';
                (iii) in paragraph (8), by striking ``paragraphs (6) and
            (7)'' each place it appears in the matter preceding
            subparagraph (A) and in subparagraph (C) and inserting
            ``paragraph (7)''; and
                (iv) in paragraph (8)(A)(i), by striking ``described--''
            and all that follows and inserting ``described in paragraph (7)
            equal to the average of the purchase prices on the claims
            submitted on an assignment-related basis for the unused item
            supplied during the 6-month period ending with December
            1986.''.
        (9) The amendments made by this subsection shall take effect as if
    included in the enactment of OBRA-1990.

                          Subchapter D--Part B Premium

    SEC. 5051. PART B PREMIUM.

        Section 1839(e) (42 U.S.C. 1395r(e)) is amended--
                (1) in paragraph (1)(A), by inserting ``and for each month
            in 1996 and 1997'' after ``January 1991'', and
                (2) in paragraph (2), by striking ``1991'' and inserting
            ``1998''.

                         Subchapter E--Other Provisions

    SEC. 5061. PAYMENTS FOR CLINICAL DIAGNOSTIC LABORATORY TESTS.

        (a) Lower Cap.--Section 1833(h)(4)(B) (42 U.S.C. 1395l(h)(4)(B)) is
    amended--
                (1) by striking ``and'' at the end of clause (iii),
                (2) in clause (iv), by inserting ``and before January 1,
            1994,'' after ``1990,'',
                (3) by striking the period at the end of clause (iv) and
            inserting ``, and'', and
                (4) by adding at the end the following:
                ``(v) after December 31, 1993, is equal to 76 percent of
            the median of all the fee schedules established for that test
            for that laboratory setting under paragraph (1).''.
        (b) Two Percent Update for 1994 Through 1998.--Section
    1833(h)(2)(A)(ii)(III) (42 U.S.C. 1395l(h)(2)(A)(ii)(III)) is amended
    by striking ``1991, 1992, and 1993'' and inserting ``1991 through
    1998''.

    SEC. 5062. TREATMENT OF INPATIENTS AND PROVISION OF DIAGNOSTIC AND
                  THERAPEUTIC X-RAY SERVICES BY RURAL HEALTH CLINICS AND
                  FEDERALLY QUALIFIED HEALTH CENTERS.

        (a) Treatment of Inpatients.--Section 1861(aa) (42 U.S.C.
    1395x(aa)) is amended--
                (1) in paragraph (1), in the matter following subparagraph
            (C), by striking ``as an outpatient'' and inserting ``as a
            patient'';
                (2) in paragraph (2)(A), by striking ``furnishing to
            outpatients'' and inserting ``furnishing to patients''; and
                (3) in paragraph (3), in the matter following subparagraph
            (B), by striking ``as an outpatient'' and inserting ``as a
            patient''.
        (b) Treatment of Diagnostic and Therapeutic X-Ray Services.--
    Section 1861(aa) (42 U.S.C. 1395x(aa)) is further amended--
                (1) in paragraph (1)(A), by inserting ``(i)'' after ``(A)''
            and by adding at the end the following: ``and (ii) diagnostic
            and therapeutic x-ray services,'', and
                (2) in paragraph (2)(A), by striking ``(A)'' and inserting
            ``(A)(i)''.
        (c) Conforming Amendment.--Section 1862(a)(14) (42 U.S.C.
    1395y(a)(14)) is amended by striking ``and services of a certified
    registered nurse anesthetist'' and inserting ``services of a certified
    registered nurse anesthetist, rural health clinic services, and
    Federally-qualified health center services''.
        (d) Effective Date.--The amendments made by this section shall take
    effect on January 1, 1994, and shall apply to services furnished on or
    after such date.

    SEC. 5063. APPLICATION OF MAMMOGRAPHY CERTIFICATION REQUIREMENTS.

        (a) Screening Mammography.--Section 1834(c) (42 U.S.C. 1395m(c)) is
    amended--
                (1) in paragraph (1)(B), by striking ``meets the quality
            standards established under paragraph (3)'' and inserting ``is
            conducted by a facility that has a certificate (or provisional
            certificate) issued under section 354 of the Public Health
            Service Act'';
                (2) in paragraph (1)(C)(iii), by striking ``paragraph (4)''
            and inserting ``paragraph (3)'';
                (3) by striking paragraph (3); and
                (4) by redesignating paragraphs (4) and (5) as paragraphs
            (3) and (4).
        (b) Diagnostic Mammography.--Section 1861(s)(3) (42 U.S.C.
    1395x(s)(3)) is amended by inserting ``and including diagnostic
    mammography if conducted by a facility that has a certificate (or
    provisional certificate) issued under section 354 of the Public Health
    Service Act'' after ``necessary''.
        (c) Conforming Amendments.--(1) Section 1862(a)(1)(F) (42 U.S.C.
    1395y(a)(1)(F)) is amended by striking ``or which does not meet the
    standards established under section 1834(c)(3)'' and inserting ``or
    which is not conducted by a facility described in section
    1834(c)(1)(B)''.
        (2) Section 1863 (42 U.S.C. 1395z) is amended by striking ``or
    whether screening mammography meets the standards established under
    section 1834(c)(3),''.
        (3) The first sentence of section 1864(a) (42 U.S.C. 1395aa(a)) is
    amended by striking ``, or whether screening mammography meets the
    standards established under section 1834(c)(3)''.
        (4) The third sentence of section 1865(a) (42 U.S.C. 1395bb(a)) is
    amended by striking ``1834(c)(3),''.
        (d) Effective Date.--The amendments made by this section shall
    apply to mammography furnished by a facility on and after the first
    date that the certificate requirements of section 354(b) of the Public
    Health Service Act apply to such mammography conducted by such
    facility.

    SEC. 5064. EXTENSION OF ALZHEIMER'S DISEASE DEMONSTRATION.

        Section 9342 of OBRA-1986, as amended by section 4164(a)(2) of
    OBRA-1990, is amended--
                (1) in subsection (c)(1), by striking ``4 years'' and
            inserting ``5 years''; and
                (2) in subsection (f)--
                        (A) by striking ``$55,000,000'' and inserting
                    ``$60,000,000'', and
                        (B) by striking ``$3,000,000'' and inserting
                    ``$5,000,000''.

    SEC. 5065. ORAL CANCER DRUGS.

        (a) Coverage of Certain Self-Administered Anticancer Drugs.--
    Section 1861(s)(2) (42 U.S.C. 1395(s)(2)), as amended by section
    5070(f)(7)(B), is amended--
                (1) by striking ``and'' at the end of subparagraph (N);
                (2) by adding ``and'' at the end of subparagraph (O); and
                (3) by adding at the end the following new subparagraph:
                ``(P) an oral drug (which is approved by the Federal Food
            and Drug Administration) prescribed for use as an anticancer
            chemotherapeutic agent for a given indication, and containing
            an active ingredient (or ingredients), which is the same
            indication and active ingredient (or ingredients) as a drug
            which the carrier determines would be covered pursuant to
            subparagraph (A) or (B) if the drug could not be self-
            administered;''.
        (b) Effective Date.--The amendments made by this section shall
    apply to items furnished on or after January 1, 1994.

    SEC. 5066. EXTENSION OF MUNICIPAL HEALTH SERVICE DEMONSTRATION
                  PROJECTS.

        Section 9215 of the Consolidated Omnibus Budget Reconciliation Act
    of 1985, as amended by section 6135 of OBRA-1989, is amended--
                (1) by striking ``December 31, 1993'' and inserting
            ``December 31, 1997'', and
                (2) in the second sentence, by inserting after
            ``beneficiary costs,'' the following: ``costs to the medicaid
            program and other payors, access to care, outcomes, beneficiary
            satisfaction, utilization differences among the different
            populations served by the projects,''.

    SEC. 5067. TREATMENT OF CERTAIN INDIAN HEALTH PROGRAMS AND FACILITIES
                  AS FEDERALLY-QUALIFIED HEALTH CENTERS.

        (a) In General.--Section 1861(aa)(4) (42 U.S.C. 1395x(aa)(4)) is
    amended--
                (1) by striking ``or'' at the end of subparagraph (B);
                (2) by striking the period at the end of subparagraph (C)
            and inserting ``; or''; and
                (3) by adding at the end the following new subparagraph:
                ``(D) is an outpatient health program or facility operated
            by a tribe or tribal organization under the Indian Self-
            Determination Act or by an urban Indian organization receiving
            funds under title V of the Indian Health Care Improvement
            Act.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect as if included in the enactment of section 4161(a)(2)(C) of
    OBRA-1990.

    SEC. 5068. INTEREST PAYMENTS.

        (a) In General.--Section 1842(c)(2)(B)(ii)(IV) of the Social
    Security Act shall be applied with respect to paper claims received in
    the 9-month period beginning January 1, 1993, by substituting ``27
    calendar days'' for ``24 calendar days'' and ``17 calendar days''.
        (b) Prohibiting Payment of Interest During Mandatory Payment Delay
    Period.--Section 1842(c)(2)(C) (42 U.S.C. 1395u(c)(2)(C)) is amended by
    adding at the end the following: ``Notwithstanding any other provision
    of law, no interest may be paid with respect to a claim pursuant to the
    preceding sentence within any period following the submission of the
    claim during which no payment may be issued, mailed, or otherwise
    transmitted with respect to the claim.''.

    SEC. 5069. CLARIFICATION OF COVERAGE OF CERTIFIED NURSE-MIDWIFE
                  SERVICES PERFORMED OUTSIDE THE MATERNITY CYCLE.

        (a) In General.--Section 1861(gg)(2) (42 U.S.C. 1395x(gg)(2)) is
    amended by striking ``, and performs services'' and all that follows
    and inserting a period.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to services furnished on or after January 1, 1994.

    SEC. 5069A. INCREASE IN, AND STUDY OF, ANNUAL CAP ON AMOUNT OF MEDICARE
                  PAYMENT FOR OUTPATIENT PHYSICAL THERAPY AND OCCUPATIONAL
                  THERAPY SERVICES.

        (a) Increase in Annual Limitation.--Section 1833(g) (42 U.S.C.
    1395l(g)) is amended by striking ``$750'' and inserting ``$900'' each
    place it appears.
        (b) Study.--(1) The Physician Payment Review Commission shall
    conduct a study of the appropriateness of continuing an annual
    limitation on the amount of payment for outpatient services of
    independently practicing physical and occupational therapists under the
    medicare program.
        (2) By not later than January 1, 1995, the Commission shall submit
    to the Committees on Energy and Commerce and Ways and Means of the
    House of Representatives and the Committee on Finance of the Senate a
    report on the study conducted under paragraph (1). Such report shall
    include such recommendations for changes in such annual limitation as
    the Commission finds appropriate.
        (c) Effective Date.--The amendment made by subsection (a) shall
    apply to services furnished on or after January 1, 1994.

    SEC. 5070. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

        (a) Revision of Information on Part B Claims Forms.--Section
    1833(q)(1) (42 U.S.C. 1395l(q)(1)) is amended--
                (1) by striking ``provider number'' and inserting ``unique
            physician identification number''; and
                (2) by striking ``and indicate whether or not the referring
            physician is an interested investor (within the meaning of
            section 1877(h)(5))''.
        (b) Consultation for Social Workers.--Effective with respect to
    services furnished on or after January 1, 1991, section 6113(c) of
    OBRA-1989 is amended--
                (1) by inserting ``and clinical social worker services''
            after ``psychologist services''; and
                (2) by striking ``psychologist'' the second and third place
            it appears and inserting ``psychologist or clinical social
            worker''.
        (c) Reports on Hospital Outpatient Payment.--(1) OBRA-1989 is
    amended by striking section 6137.
        (2) Section 1135(d) (42 U.S.C. 1320b-5(d)) is amended--
                (A) by striking paragraph (6); and
                (B) in paragraph (7)--
                        (i) by striking ``systems'' each place it appears
                    and inserting ``system''; and
                        (ii) by striking ``paragraphs (1) and (6)'' and
                    inserting ``paragraph (1)''.
        (d) Radiology and Diagnostic Services Provided in Hospital
    Outpatient Departments.-- (1) Effective as if included in the enactment
    of OBRA-1989, section 1833(n)(1)(B)(i)(II) (42 U.S.C.
    1395l(n)(1)(B)(i)(II)) is amended--
                (A) by inserting ``and for services described in subsection
            (a)(2)(E)(ii) furnished on or after January 1, 1992'' after
            ``1989''; and
                (B) by striking ``1842(b)'' and inserting ``1842(b) (or, in
            the case of services furnished on or after January 1, 1992,
            under section 1848)''.
        (2) Effective as if included in the enactment of OBRA-1989, section
    1833(n)(1)(B)(i)(II) (42 U.S.C. 1395l(n)(1)(B)(i)(II)) is amended by
    striking ``January 1,'' and inserting ``April 1,''.
        (e) Payments to Nurse Practitioners in Rural Areas (Section 4155 of
    OBRA-1990).--(1) Section 1861(s)(2)(K)(iii) (42 U.S.C.
    1395x(s)(2)(K)(iii)) is amended--
                (A) by striking ``subsection (aa)(3)'' and inserting
            ``subsection (aa)(5)''; and
                (B) by striking ``subsection (aa)(4)'' and inserting
            ``subsection (aa)(6)''.
        (2) Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)) is amended--
                (A) by striking ``and'' before ``(N)''; and
                (B) with respect to the matter inserted by section
            4155(b)(2)(B) of OBRA-1990--
                        (i) by striking ``(M)'' and inserting ``, and
                    (O)'', and
                        (ii) by transferring and inserting it (as amended)
                    immediately before the semicolon at the end.
        (3) Section 1833(r)(1) (42 U.S.C. 1395l(r)(1)) is amended--
                (A) by striking ``ambulatory'' each place it appears and
            inserting ``or ambulatory''; and
                (B) by striking ``center,'' and inserting ``center''.
        (4) Section 1833(r)(2)(A) (42 U.S.C. 1395l(r)(2)(A)) is amended by
    striking ``subsection (a)(1)(M)'' and inserting ``subsection
    (a)(1)(O)''.
        (5) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is amended by
    striking ``subsection (s)(2)(K)(i)'' and inserting ``clauses (i) or
    (iii) of subsection (s)(2)(K)''.
        (6) Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is amended by
    striking ``this Act'' and inserting ``this title''.
        (7) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is amended by
    striking ``1861(s)(2)(K)(i)'' and inserting ``1861(s)(2)(K)(i) or
    1861(s)(2)(K)(iii)''.
        (8) Section 1866(a)(1)(H) (42 U.S.C. 1395cc(a)(1)(H)) is amended by
    striking ``1861(s)(2)(K)(i)'' and inserting ``1861(s)(2)(K)(i) or
    1861(s)(2)(K)(iii)''.
        (f) Other Miscellaneous and Technical Amendments.--
                (1) Immediate enrollment in part b by individuals covered
            by an employment-based plan.--(A) Subparagraphs (A) and (B) of
            section 1837(i)(3) (42 U.S.C. 1395p(i)(3)) are each amended--
                        (i) by striking ``beginning with the first day of
                    the first month in which the individual is no longer
                    enrolled'' and inserting ``including each month during
                    any part of which the individual is enrolled''; and
                        (ii) by striking ``and ending seven months later''
                    and inserting ``ending with the last day of the eighth
                    consecutive month in which the individual is at no time
                    so enrolled''.
                (B) Paragraphs (1) and (2) of section 1838(e) (42 U.S.C.
            1395q(e)) are amended to read as follows:
                ``(1) in any month of the special enrollment period in
            which the individual is at any time enrolled in a plan
            (specified in subparagraph (A) or (B), as applicable, of
            section 1837(i)(3)) or in the first month following such a
            month, the coverage period shall begin on the first day of the
            month in which the individual so enrolls (or, at the option of
            the individual, on the first day of any of the following three
            months), or
                ``(2) in any other month of the special enrollment period,
            the coverage period shall begin on the first day of the month
            following the month in which the individual so enrolls.''.
                (C) The amendments made by subparagraphs (A) and (B) shall
            take effect on the first day of the first month that begins
            after the expiration of the 120-day period that begins on the
            date of the enactment of this Act.
                (2) Blend amounts for ambulatory surgical center
            payments.--Subclauses (I) and (II) of section 1833(i)(3)(B)(ii)
            (42 U.S.C. 1395l(i)(3)(B)(ii)) are each amended--
                        (A) by striking ``for reporting'' and inserting
                    ``for portions of cost reporting''; and
                        (B) by striking ``and on or before'' and inserting
                    ``and ending on or before''.
                (3) Clinical diagnostic laboratory tests (section 4154 of
            obra-1990).--Section 4154(e)(5) of OBRA-1990 is amended by
            striking ``(1)(A)'' and inserting ``(1)(A),''.
                (4) Separate payment under part b for certain services
            (section 4157 of obra-1990).--Section 4157(a) of OBRA-1990 is
            amended by striking ``(a) Services of'' and all that follows
            through ``Section'' and inserting ``(a) Treatment of Services
            of Certain Health Practitioners.--Section''.
                (5) Community health centers and rural health clinics
            (section 4161 of obra-1990).--(A) The fourth sentence of
            section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended--
                        (i) by striking ``certification'' the first place
                    it appears and inserting ``approval''; and
                        (ii) by striking ``the Secretary's approval or
                    disapproval of the certification'' and inserting
                    ``Secretary's approval or disapproval''.
                (B) Section 4161(a)(7)(B) of OBRA-1990 is amended by
            inserting ``and to the Committee on Finance of the Senate''
            after ``Representatives''.
                (6) Screening mammography (section 4163 of obra-1990).--
            Section 4163 of OBRA-1990 is amended--
                        (A) by adding at the end of subsection (d) the
                    following new paragraph:
                ``(3) The amendment made by paragraph (2)(A)(iv) shall
            apply to screening pap smears performed on or after July 1,
            1990.''; and
                        (B) in subsection (e), by striking ``The
                    amendments'' and inserting ``Except as provided in
                    subsection (d)(3), the amendments''.
                (7) Injectable drugs for treatment of osteoporosis.--
                        (A) Clarification of drugs covered.--The section
                    1861(jj) (42 U.S.C. 1395x(jj)) inserted by section
                    4156(a)(2) of OBRA-1990 is amended--
                                (i) in the matter preceding paragraph (1),
                            by striking ``a bone fracture related to''; and
                                (ii) in paragraph (1), by striking
                            ``patient'' and inserting ``individual has
                            suffered a bone fracture related to post-
                            menopausal osteoporosis and that the
                            individual''.
                        (B) Limiting coverage to drugs provided by home
                    health agencies.--(i) The section 1861(jj) (42 U.S.C.
                    1395x(jj)) inserted by section 4156(a)(2) of OBRA-1990
                    is amended by striking ``if'' and inserting ``by a home
                    health agency if''.
                        (ii) Section 1861(m)(5) (42 U.S.C. 1395x(m)(5)) is
                    amended by striking ``but excluding'' and inserting
                    ``and a covered osteoporosis drug (as defined in
                    subsection (kk), but excluding other''.
                        (iii) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is
                    amended--
                                (I) by adding ``and'' at the end of
                            subparagraph (N), and
                                (II) by striking subparagraph (O) and
                            redesignating subparagraph (P) as subparagraph
                            (O).
                        (C) Payment based on reasonable cost.--Section
                    1833(a)(2) (42 U.S.C. 1395l(a)(2)) is amended--
                                (i) in subparagraph (A), by striking
                            ``health services'' and inserting ``health
                            services (other than covered osteoporosis drug
                            (as defined in section 1861(kk)))'';
                                (ii) by striking ``and'' at the end of
                            subparagraph (D);
                                (iii) by striking the semicolon at the end
                            and inserting ``; and''; and
                                (iv) by adding at the end the following new
                            subparagraph:
                        ``(F) with respect to covered osteoporosis drug (as
                    defined in section 1861(kk)) furnished by a home health
                    agency, 80 percent of the reasonable cost of such
                    service, as determined under section 1861(v);''.
                        (D) Application of part b deductible.--Section
                    1833(b)(2) (42 U.S.C. 1395l(b)(2)) is amended by
                    striking ``services'' and inserting ``services (other
                    than covered osteoporosis drug (as defined in section
                    1861(kk)))''.
                        (E) Covered osteoporosis drug (section 4156 of
                    obra-1990).--Section 1861 (42 U.S.C. 1395x) is amended,
                    in the subsection (jj) inserted by section 4156(a)(2)
                    of OBRA-1990, by striking ``(jj) The term'' and
                    inserting ``(kk) The term''.
                (8) Other miscellaneous and technical corrections (section
            4164 of obra-1990).--
                        (A) Ownership disclosure requirements.--(i) Section
                    1124A(a)(2)(A) (42 U.S.C. 1320a-3a(a)(2)(A)) is amended
                    by striking ``of the Social Security Act''.
                        (ii) Section 4164(b)(4) of OBRA-1990 is amended by
                    striking ``paragraph'' and inserting ``paragraphs''.
                        (B) Directory of unique physician identifier
                    numbers.--Section 4164(c) of OBRA-1990 is amended by
                    striking ``publish'' and inserting ``publish, and shall
                    periodically update,''.
        (g) Effective Date.--Except as otherwise provided in this section,
    the amendments made by this section shall take effect as if included in
    the enactment of OBRA-1990.

                CHAPTER 2--PROVISIONS RELATING TO PARTS A AND B

    SEC. 5071. ELIMINATION OF ADD-ON FOR OVERHEAD OF HOSPITAL-BASED HOME
                  HEALTH AGENCIES.

        (a) General Rule.--The first sentence of section 1861(v)(1)(L)(ii)
    (42 U.S.C. 1395x(v)(1)(L)(ii)) is amended by striking ``, with
    appropriate adjustment for administrative and general costs of
    hospital-based agencies''.
        (b) Effective Date.--The amendment made by subsection (a) applies
    to cost reporting periods beginning after fiscal year 1993.

    SEC. 5072. STUDY AND REPORT ON MEDICARE GME PAYMENTS.

        (a) Study.--The Secretary of Health and Human Services shall
    conduct a study of the methodology used to determine payments to
    hospitals under the medicare program for the costs of medical residency
    training programs and shall include in the study an analysis of the
    causes of variation among such programs in the per resident costs of
    direct graduate medical education, including the extent of support for
    such programs from non-hospital sources.
        (b) Report.--Not later than 1 year after the date of the enactment
    of this Act, the Secretary shall submit a report to Congress on the
    study conducted under subsection (a), and shall include in the report
    any recommendations considered appropriate by the Secretary for
    modifications to the methodology used to determine payments to
    hospitals under the medicare program for the costs of medical residency
    training programs that will encourage greater uniformity among medical
    residency training programs in the per resident costs of direct
    graduate medical education.

    SEC. 5073. MEDICARE AS SECONDARY PAYER.

        (a) Extension of Data Match Program.--Section 1862(b)(5)(C)(iii)
    (42 U.S.C. 1395y(b)(5)(C)(iii)) is amended by striking ``1995'' and
    inserting ``1998''.
        (b) Permanent Application to Disabled Individuals.--Section
    1862(b)(1)(B) (42 U.S.C. 1395y(b)(1)(B)) is amended by striking clause
    (iii).
        (c) Application of ESRD Rules to Certain Aged and Disabled
    Beneficiaries and Extension of Application of 18-Month Rule.--
                (1) Subparagraphs (A)(iv) and (B)(ii) of section 1862(b)(1)
            (42 U.S.C. 1395y(b)(1)) are each amended--
                        (A) by striking ``Clause (i) shall not apply'' and
                    inserting ``Subparagraph (C) shall apply instead of
                    clause (i)'', and
                        (B) by inserting ``(without regard to entitlement
                    under section 226)'' after ``or'' the second place it
                    appears.
                (2) The second sentence of section 1862(b)(1)(C) is amended
            by striking ``on or before January 1, 1996'' and inserting
            ``before October 1, 1998''.
        (d) Uniform Rules for Size of Employer.--
                (1) In general.--Section 1862(b)(1) (42 U.S.C. 1395y(b)(1))
            is amended by adding at the end the following:
                        ``(E) General provisions.--
                                ``(i) Exclusion of group health plan of a
                            small employer.--Subparagraphs (A) through (C)
                            do not apply to a group health plan unless the
                            plan is a plan of, or contributed to by, an
                            employer or employee organization that has 20
                            or more individuals in current employment
                            status for each working day in each of 20 or
                            more calendar weeks in the current calendar
                            year or the preceding calendar year.
                                ``(ii) Exception for small employers in
                            multiemployer or multiple employer group health
                            plans.--Subparagraphs (A) through (C) also do
                            not apply with respect to individuals enrolled
                            in a multiemployer or multiple employer group
                            health plan if the coverage of the individuals
                            under the plan is by virtue of current
                            employment status with an employer that does
                            not have 20 or more individuals in current
                            employment status for each working day in each
                            of 20 or more calendar weeks in the current
                            calendar year and the preceding calendar year;
                            but the exception provided in this clause
                            applies only if the plan elects treatment under
                            this clause.
                                ``(iii) Application of controlled group
                            rules.--For purposes of clauses (i) and (ii)--
                                        ``(I) all employees of corporations
                                    which are members of a controlled group
                                    of corporations (within the meaning of
                                    section 1563(a) of the Internal Revenue
                                    Code of 1986, determined without regard
                                    to subsection (a)(4) or (e)(3)(C)),
                                    shall be treated as employed by a
                                    single employer,
                                        ``(II) all employees of trades or
                                    businesses (whether or not
                                    incorporated) which are under common
                                    control (under regulations prescribed
                                    by the Secretary of the Treasury under
                                    section 414(c) of that Code) shall be
                                    treated as employed by a single
                                    employer,
                                        ``(III) all employees of the
                                    members of an affiliated service group
                                    (as defined in section 414(m) of that
                                    Code) shall be treated as employed by a
                                    single employer, and
                                        ``(IV) leased employees (as defined
                                    in section 414(n)(2) of that Code)
                                    shall be treated as employees of the
                                    person for whom they perform services
                                    to the extent they are so treated under
                                    section 414(n) of that Code.
                            In applying sections of the Internal Revenue
                            Code of 1986 under this clause, the Secretary
                            shall rely upon the regulations and decisions
                            of the Secretary of the Treasury respecting
                            such sections.
                                ``(iv) Group health plan defined.--For
                            purposes of this subsection, the term `group
                            health plan' has the meaning given such term in
                            section 5000(b) of the Internal Revenue Code of
                            1986, without regard to section 5000(d) of such
                            Code.
                                ``(v) Current employment status defined.--
                            For purposes of this subsection, an individual
                            has `current employment status' with an
                            employer if the individual is an employee, is
                            the employer, or is associated with the
                            employer in a business relationship.
                                ``(vi) Treatment of self-employed persons
                            as employers.--For purposes of this subsection,
                            the term `employer' includes a self-employed
                            person.''.
                (2) Conforming amendments for working aged.--Section
            1862(b)(1)(A) (42 U.S.C. 1395y(b)(1)(A)) is amended--
                        (A) by amending subclauses (I) and (II) of clause
                    (i) to read as follows:
                                        ``(I) may not take into account
                                    that an individual (or the individual's
                                    spouse) who is covered under the plan
                                    by virtue of the individual's current
                                    employment status with an employer is
                                    entitled to benefits under this title
                                    under section 226(a), and
                                        ``(II) shall provide that any
                                    individual age 65 or over (and the
                                    individual's spouse age 65 or older)
                                    who is covered under the plan by virtue
                                    of the individual's current employment
                                    status with an employer shall be
                                    entitled to the same benefits under the
                                    plan under the same conditions as any
                                    such individual (or spouse) under age
                                    65.'';
                        (B) by striking clauses (ii), (iii), and (v), and
                        (C) by redesignating clause (iv) as clause (ii).
                (3) Amendments for disabled individuals.--Section 1862(b)
            (42 U.S.C. 1395y(b)) is amended--
                        (A) by amending the heading and clause (i) of
                    paragraph (1)(B) to read as follows:
                        ``(B) Disabled individuals under group health
                    plans.--
                                ``(i) In general.--A group health plan may
                            not take into account that an individual (or a
                            member of the individual's family) who is
                            covered under the plan by virtue of the
                            individual's current employment status with an
                            employer is entitled to benefits under this
                            title under section 226(b).'';
                        (B) by striking clause (iv) of paragraph (1)(B);
                    and
                        (C) in the second sentence of paragraph (2)(A), by
                    striking ``or large group health plan''.
                (4) Amendments for individuals with esrd.--Section
            1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended--
                        (A) in the matter preceding clause (i), by striking
                    ``(as defined in subparagraph (A)(v))'',
                        (B) by striking ``solely'' each place it appears,
                        (C) by striking ``by reason of'' and inserting
                    ``under'' each place it appears, and
                        (D) by inserting ``or eligible for'' after
                    ``entitled to'' each place it appears.
        (e) Secondary Payer Exemption for Members of Religious Orders.--
    Effective as if included in the enactment of OBRA-1989, section
    6202(e)(2) of such Act is amended by adding at the end the following:
    ``Such amendment also shall apply to items and services furnished
    before such date with respect to secondary payer cases which the
    Secretary of Health and Human Services had not identified as of such
    date.''.
        (f) Improving Identification of Medicare Secondary Payer
    Situations.--
                (1) Survey of beneficiaries.--
                        (A) In general.--Section 1862(b)(5) (42 U.S.C.
                    1395y(b)(5)) is amended by adding at the end the
                    following new subparagraph:
                        ``(D) Obtaining information from beneficiaries.--
                    Before an individual applies for benefits under part A
                    or enrolls under part B, the Administrator shall mail
                    the individual a questionnaire to obtain information on
                    whether the individual is covered under a primary plan
                    and the nature of the coverage provided under the plan,
                    including the name, address, and identifying number of
                    the plan.''.
                        (B) Distribution of questionnaire by contractor.--
                    The Secretary of Health and Human Services shall enter
                    into an agreement with an entity not later than April
                    1, 1994, to distribute the questionnaire described in
                    section 1862(b)(5)(D) of the Social Security Act (as
                    added by subparagraph (A)).
                        (C) No medicare secondary payer denial based on
                    failure to complete questionnaire.--Section 1862(b)(2)
                    (42 U.S.C. 1395y(b)(2)) is amended by adding at the end
                    the following new subparagraph:
                        ``(C) Treatment of questionnaires.--The Secretary
                    may not fail to make payment under subparagraph (A)
                    solely on the ground that an individual failed to
                    complete a questionnaire concerning the existence of a
                    primary plan.''.
                (2) Mandatory screening by providers and suppliers under
            part b.--
                        (A) In general.--Section 1862(b) (42 U.S.C.
                    1395y(b)) is amended by adding at the end the following
                    new paragraph:
                ``(6) Screening requirements for providers and suppliers.--
                        ``(A) In general.--Notwithstanding any other
                    provision of this title, no payment may be made for any
                    item or service furnished under part B unless the
                    entity furnishing such item or service completes (to
                    the best of its knowledge and on the basis of
                    information obtained from the individual to whom the
                    item or service is furnished) the portion of the claim
                    form relating to the availability of other health
                    benefit plans.
                        ``(B) Penalties.--An entity that knowingly,
                    willfully, and repeatedly fails to complete a claim
                    form in accordance with subparagraph (A) or provides
                    inaccurate information relating to the availability of
                    other health benefit plans on a claim form under such
                    subparagraph shall be subject to a civil money penalty
                    of not to exceed $2,000 for each such incident. The
                    provisions of section 1128A (other than subsections (a)
                    and (b)) shall apply to a civil money penalty under the
                    previous sentence in the same manner as such provisions
                    apply to a penalty or proceeding under section
                    1128A(a).''.
                        (B)  Effective date.--The amendment made by
                    subparagraph (A) shall apply with respect to items and
                    services furnished on or after January 1, 1994.
        (g) Improvements in Recovery of Payments From Primary Payers.--
                (1) Submission of reports on efforts to recover erroneous
            payments.--Section 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is
            amended--
                        (A) by striking ``and'' at the end of subparagraph
                    (H); and
                        (B) by inserting after subparagraph (H) the
                    following new subparagraph:
                ``(I) will submit annual reports to the Secretary
            describing the steps taken to recover payments made under this
            part for items or services for which payment has been or could
            be made under a primary plan (as defined in section
            1862(b)(2)(A)).''.
                (2) Requirements under carrier performance evaluation
            program.--Section 1842(b)(2) (42 U.S.C. 1395u(b)(2)) is amended
            by adding at the end the following new subparagraph:
        ``(D) In addition to any other standards and criteria established
    by the Secretary for evaluating carrier performance under this
    paragraph relating to avoiding erroneous payments, the Secretary shall
    establish standards and criteria relating to the carrier's success in
    recovering payments made under this part for items or services for
    which payment has been or could be made under a primary plan (as
    defined in section 1862(b)(2)(A)).''.
                (3) Deadline for reimbursement by primary plans.--
                        (A) In general.--Section 1862(b)(2)(B)(i) (42
                    U.S.C. 1395y(b)(2)(B)(i)) is amended by adding at the
                    end the following sentence: ``If reimbursement is not
                    made to the appropriate Trust Fund before the
                    expiration of the 60-day period that begins on the date
                    such notice or other information is received, the
                    Secretary may charge interest (beginning with the date
                    on which the notice or other information is received)
                    on the amount of the reimbursement until reimbursement
                    is made (at a rate determined by the Secretary in
                    accordance with regulations of the Secretary of the
                    Treasury applicable to charges for late payments).''.
                        (B) Conforming amendment.--The heading of clause
                    (i) of section 1862(b)(2)(B) is amended to read as
                    follows: ``Repayment required.--''.
                        (C) Effective date.--The amendments made by this
                    paragraph shall apply to payments for items and
                    services furnished on or after the date of the
                    enactment of this Act.
                (4) Effective date.--The amendments made by paragraphs (1)
            and (2) shall apply to contracts with fiscal intermediaries and
            carriers under title XVIII of the Social Security Act for years
            beginning with 1994.
        (h) Miscellaneous and Technical Corrections.--
                (1) The sentence in section 1862(b)(1)(C) added by section
            4203(c)(1)(B) of OBRA-1990 is amended by striking ``clauses (i)
            and (ii)'' and inserting ``this subparagraph''.
                (2) Effective as if included in the enactment of OBRA-1989,
            section 1862(b)(1) is amended--
                        (A) in subparagraphs (A)(v) and (B)(iv)(II), by
                    inserting ``, without regard to section 5000(d) of such
                    Code'' before the period at the end of each
                    subparagraph;
                        (B) in subparagraph (A)(iii), by striking ``current
                    calendar year or the preceding calendar year'' and
                    inserting ``current calendar year and the preceding
                    calendar year''; and
                        (C) in the matter in subparagraph (C) after clause
                    (ii), by striking ``taking into account that'' and
                    inserting ``paying benefits secondary to this title
                    when''.
                (3) Section 1862(b)(5)(C)(i) (42 U.S.C. 1395y(b)(5)(C)(i))
            is amended by striking ``6103(l)(12)(D)(iii)'' and inserting
            ``6103(l)(12)(E)(iii)''.
                (4) Section 4203(c)(2) of OBRA-1990 is amended--
                        (A) by striking ``the application of clause (iii)''
                    and inserting ``the second sentence'';
                        (B) by striking ``on individuals'' and all that
                    follows through ``section 226A of such Act'';
                        (C) in clause (ii), by striking ``clause'' and
                    inserting ``sentence'';
                        (D) in clause (v), by adding ``and'' at the end;
                    and
                        (E) in clause (vi)--
                                (i) by inserting ``of such Act'' after
                            ``1862(b)(1)(C)'', and
                                (ii) by striking the period at the end and
                            inserting the following: ``, without regard to
                            the number of employees covered by such
                            plans.''.
                (5) Section 4203(d) of OBRA-1990 is amended by striking
            ``this subsection'' and inserting ``this section''.
                (6) Except as provided in paragraph (2), the amendments
            made by this subsection shall be effective as if included in
            the enactment of OBRA-1990 and shall be executed before the
            amendments made by subsections (a) through (d) of this section.
        (i) Effective Date.--
                (1) In general.--Except as otherwise provided in this
            section, the amendments made by this section shall take effect
            on the date of the enactment of this Act.
                (2) ESRD and uniform size rules.--The amendments made by
            subsections (c) and (d) apply to items and services furnished
            on or after January 1, 1994.

    SEC. 5074. EXTENSION OF SELF-REFERRAL BAN TO ADDITIONAL SPECIFIED
                  SERVICES.

        (a) Extension to Designated Health Services.--
                (1) In general.--Section 1877 (42 U.S.C. 1395nn) is
            amended--
                        (A) by striking ``clinical laboratory services''
                    and ``clinical laboratory services'' and inserting
                    ``designated health services'' and ``designated health
                    services'', respectively, each place either appears in
                    subsections (a)(1), (b)(2)(A)(ii), (b)(4), (d)(1), and
                    (d)(3); and
                        (B) by adding at the end the following new
                    subsection:
        ``(i) Designated Health Services Defined.--In this section, the
    term `designated health services' means--
                ``(1) clinical laboratory services;
                ``(2) physical or occupational therapy services;
                ``(3) radiology or other diagnostic services;
                ``(4) radiation therapy services;
                ``(5) the furnishing of durable medical equipment;
                ``(6) the furnishing of parenteral and enteral nutrition
            nutrients, supplies, and equipment;
                ``(7) home health services; and
                ``(8) home infusion therapy services.''.
                (2) Conforming amendments.--Section 1877 is further
            amended--
                        (A) in subsection (g)(1), by striking ``clinical
                    laboratory service'' and inserting ``designated health
                    service'', and
                        (B) in subsection (h)(7)(B), by striking ``clinical
                    laboratory service'' and inserting ``designated health
                    service''.
        (b) Multiple Locations for Group Practices.--Section
    1877(b)(2)(A)(ii)(II) (42 U.S.C. 1395nn(b)(2)(A)(ii)(II)) is amended by
    striking ``centralized provision'' and inserting ``provision of some or
    all''.
        (c) Treatment of Compensation Arrangements.--
                (1) Rental of office space and equipment.--Paragraph (1) of
            section 1877(e) (42 U.S.C. 1395nn(e)) is amended to read as
            follows:
                ``(1) Rental of office space; rental of equipment.--
                        ``(A) Office space.--Payments made by a lessee to a
                    lessor for the use of premises if--
                                ``(i) the lease is set out in writing,
                            signed by the parties, and specifies the
                            premises covered by the lease,
                                ``(ii) the aggregate space rented or leased
                            is reasonable and necessary for the legitimate
                            business purposes of the lease or rental and is
                            used exclusively by the lessee when being used
                            by the lessee,
                                ``(iii) the lease provides for a term of
                            rental or lease for at least one year,
                                ``(iv) the rental charges over the term of
                            the lease are set in advance, are consistent
                            with fair market value, and are not determined
                            in a manner that takes into account the volume
                            or value of any referrals or other business
                            generated between the parties,
                                ``(v) the lease would be commercially
                            reasonable even if no referrals were made
                            between the parties,
                                ``(vi) the lease covers all of the premises
                            leased between the parties for the period of
                            the lease, and
                                ``(vii) the compensation arrangement meets
                            such other requirements as the Secretary may
                            impose by regulation as needed to protect
                            against program or patient abuse.
                        ``(B) Equipment.--Payments made by a lessee of
                    equipment to the lessor of the equipment for the use of
                    the equipment if--
                                ``(i) the lease is set out in writing,
                            signed by the parties, and specifies the
                            equipment covered by the lease,
                                ``(ii) the equipment rented or leased is
                            reasonable and necessary for the legitimate
                            business purposes of the lease or rental and is
                            used exclusively by the lessee when being used
                            by the lessee,
                                ``(iii) the lease provides for a term of
                            rental or lease of at least one year,
                                ``(iv) the rental charges over the term of
                            the lease are set in advance, are consistent
                            with fair market value, and are not determined
                            in a manner that takes into account the volume
                            or value of any referrals or other business
                            generated between the parties,
                                ``(v) the lease would be commercially
                            reasonable even if no referrals were made
                            between the parties,
                                ``(vi) the lease covers all of the
                            equipment leased between the parties for the
                            period of the lease, and
                                ``(vii) the compensation arrangement meets
                            such other requirements as the Secretary may
                            impose by regulation as needed to protect
                            against program or patient abuse.''.
                (2) Bona fide employment relationships.--Section 1877(e)(2)
            (42 U.S.C. 1395nn(e)(2)) is amended--
                        (A) by striking ``and service'' and ``with
                    hospitals'';
                        (B) by striking ``An arrangement'' and all that
                    follows through ``if'' and inserting ``Any amount paid
                    by an employer to a physician (or immediate family
                    member) who has a bona fide employment relationship
                    with the employer for the provision of services if'';
                        (C) in subparagraphs (A), (B), and (D), by striking
                    ``arrangement'' and inserting ``employment'';
                        (D) in subparagraph (C), by striking ``to the
                    hospital''; and
                        (E) by adding at the end the following:
            ``Subparagraph (B)(ii) shall not be construed as prohibiting
            the payment of remuneration in the form of shares of overall
            profits or in the form of a productivity bonus based on
            services performed personally by the physician or member, if
            the amount of the remuneration is not determined in a manner
            that takes into account directly the volume or value of any
            referrals by the referring physician.''.
                (3) Personal service arrangements.--Section 1877(e) is
            further amended by adding at the end the following new
            paragraph:
                ``(7) Personal service arrangements.--Remuneration from an
            entity under an arrangement if--
                        ``(A) the arrangement is set out in writing, signed
                    by the parties, and specifies the services covered by
                    the arrangement,
                        ``(B) the arrangement covers all of the services to
                    be provided,
                        ``(C) the aggregate services contracted for do not
                    exceed those that are reasonable and necessary for the
                    legitimate business purposes of the arrangement,
                        ``(D) the term of the arrangement is for at least
                    one year,
                        ``(E) the compensation to be paid over the term of
                    the arrangement is set in advance, does not exceed fair
                    market value, and is not determined in a manner that
                    takes into account the volume or value of any referrals
                    or other business generated between the parties,
                        ``(F) the services to be performed under the
                    arrangement do not involve the counseling or promotion
                    of a business arrangement of other activity that
                    violates any State or Federal law, and
                        ``(G) the arrangement meets such other requirements
                    as the Secretary may impose by regulation as needed to
                    protect against program or patient abuse.''.
                (4) Additional exceptions.--Section 1877(e) is further
            amended by adding at the end the following new paragraphs:
                ``(8) Payments by a physician for items and services.--
            Payments made by a physician--
                        ``(A) to a laboratory in exchange for the provision
                    of clinical laboratory services, or
                        ``(B) to an entity as compensation for other items
                    or services if the items or services are furnished at a
                    price that is consistent with fair market value.
                ``(9) Payments for pathology services of a group
            practice.--Payments made to a group practice for pathology
            services under an agreement if--
                        ``(A) the agreement is set out in writing and
                    specifies the services to be provided by the parties
                    and the compensation for services provided under the
                    agreement,
                        ``(B) the compensation paid over the term of the
                    agreement is consistent with fair market value and is
                    not determined in a manner that takes into account the
                    volume or value of any referrals or other business
                    generated between the parties,
                        ``(C) the compensation is provided pursuant to an
                    agreement which would be commercially reasonable even
                    if no referrals were made to the entity, and
                        ``(D) the compensation arrangement between the
                    parties meets such other requirements as the Secretary
                    may impose by regulation as needed to protect against
                    program or patient abuse.''.
                (4) Referring physicians.--Section 1877(h)(7)(C) (42 U.S.C.
            1395nn(h)(7)(C)) is amended--
                        (A) by inserting ``a request by a radiologist for
                    diagnostic radiology services, and a request by a
                    radiation oncologist for radiation therapy,'' after
                    ``examination services,'', and
                        (B) by inserting ``, radiologist, or radiation
                    oncologist'' after ``pathologist'' the second place it
                    appears.
        (d) Treatment of Group Practices.--
                (1) Use of billing numbers, etc.--Section 1877 is amended--
                        (A) in subsection (b)(2)(B), by inserting ``under a
                    billing number assigned to the group practice'' after
                    ``member'',
                        (B) in subsection (h)(4)(B), by inserting ``and
                    under a billing number assigned to the group'' after
                    ``in the name of the group'', and
                        (C) in subsection (h)(4)(C), by striking ``by
                    members of the group''.
                (2) Treatment of services under arrangements between
            hospitals and group practices.--
                        (A) In general.--Section 1877(h)(4) (42 U.S.C.
                    1395nn(h)(4)) is amended--
                                (i) in subparagraph (B) (as amended by
                            paragraph (1)(B)), by inserting ``(or are
                            billed in the name of a hospital for which the
                            group provides designated health services
                            pursuant to an arrangement that meets the
                            requirements of subparagraph (B))'' after
                            ``assigned to the group'';
                                (ii) by redesignating subparagraphs (A)
                            through (D) as clauses (i) through (iv),
                            respectively;
                                (iii) by inserting ``(A)'' after ``.--'';
                            and
                                (iv) by adding at the end the following new
                            subparagraph:
                ``(B) The requirements of this subparagraph, with respect
            to an arrangement for designated health services provided by
            the group and billed in the name of a hospital, are that--
                        ``(i) with respect to services provided to an
                    inpatient of the hospital, the arrangement is pursuant
                    to the provision of inpatient hospital services under
                    section 1861(b)(3);
                        ``(ii) the arrangement began before December 19,
                    1989, and has continued in effect without interruption
                    since such date;
                        ``(iii) the group provides substantially all of the
                    designated health services to the hospital's patients;
                        ``(iv) the arrangement is pursuant to an agreement
                    that is set out in writing and that specifies the
                    services to be provided by the parties and the
                    compensation for services provided under the agreement;
                        ``(v) the compensation paid over the term of the
                    agreement is consistent with fair market value and the
                    compensation per unit of services is fixed in advance
                    and is not determined in a manner that takes into
                    account the volume or value of any referrals or other
                    business generated between the parties;
                        ``(vi) the compensation is provided pursuant to an
                    agreement which would be commercially reasonable even
                    if no referrals were made to the entity; and
                        ``(vii) the arrangement between the parties meets
                    such other requirements as the Secretary may impose by
                    regulation as needed to protect against program or
                    patient abuse.''.
                        (B) Conforming amendment.--Section 1877(b)(2)(B)
                    (42 U.S.C. 1395nn(b)(2)(B)) is amended by inserting
                    ``(or by a hospital for which such a group practice
                    provides designated health services pursuant to an
                    arrangement that meets the requirements of subsection
                    (h)(4)(B))'' before ``, or by an entity''.
                (3) Treatment of certain faculty practice plans.--The last
            sentence of section 1877(h)(4)(A) (42 U.S.C. 1395nn(h)(4)(A)),
            as redesignated by paragraph (2)(A), is amended by inserting
            ``, institution of higher education, or medical school'' after
            ``hospital''.
        (e) Expanding Rural Provider Exception To Cover Compensation
    Arrangements.--
                (1) In general.--Section 1877(b) (42 U.S.C. 1395nn(b)) is
            amended--
                        (A) by redesignating paragraph (5) as paragraph
                    (7), and
                        (B) by inserting after paragraph (4) the following
                    new paragraph:
                ``(5) Rural providers.--In the case of designated services
            if--
                        ``(A) the entity furnishing the services is in a
                    rural area (as defined in section 1886(d)(2)(D)), and
                        ``(B) substantially all of the services furnished
                    by the entity to individuals entitled to benefits under
                    this title are furnished to such individuals who reside
                    in such a rural area.''.
                (2) Conforming amendments.--Section 1877(d) (42 U.S.C.
            1395nn(d)) is amended--
                        (A) by striking paragraph (2), and
                        (B) by redesignating paragraph (3) as paragraph
                    (2).
        (f) Exception for Shared Facility Laboratory Services.--
                (1) In general.--Section 1877 is amended--
                        (A) in subsection (b), as amended by subsection
                    (e)(1), by inserting after paragraph (5) the following
                    new paragraph:
                ``(6) Shared facility laboratory services.--
                        ``(A) In general.--In the case of shared facility
                    laboratory services of a shared facility--
                                ``(i) that are furnished--
                                        ``(I) personally by the referring
                                    physician who is a shared facility
                                    physician or personally by an
                                    individual supervised by such a
                                    physician or by another shared facility
                                    physician and employed under the shared
                                    facility arrangement,
                                        ``(II) by a shared facility in a
                                    building in which the referring
                                    physician furnishes physician's
                                    services unrelated to the furnishing of
                                    shared facility laboratory services,
                                    and
                                        ``(III) to a patient of a shared
                                    facility physician; and
                                ``(ii) that are billed by the referring
                            physician or by an entity that is wholly owned
                            by such physician.
                        ``(B) Limitation.--The exception under this
                    paragraph shall only apply to a shared facility only if
                    the facility and the shared facility arrangement were
                    established as of June 26, 1992.''; and
                        (B) in subsection (h), by adding at the end the
                    following new paragraph:
                ``(8) Shared facility related definitions.--
                        ``(A) Shared facility laboratory services.--The
                    term `shared facility laboratory services' means, with
                    respect to a shared facility, clinical laboratory
                    services furnished by the facility to patients of
                    shared facility physicians.
                        ``(B) Shared facility.--The term `shared facility'
                    means an entity that furnishes shared facility
                    laboratory services under a shared facility
                    arrangement.
                        ``(C) Shared facility physician.--The term `shared
                    facility physician' means, with respect to a shared
                    facility, a physician who has a financial relationship
                    under a shared facility arrangement with the facility.
                        ``(D) Shared facility arrangement.--The term
                    `shared facility arrangement' means, with respect to
                    the provision of shared facility laboratory services in
                    a building, a financial arrangement--
                                ``(i) which is only between physicians who
                            are providing services (unrelated to shared
                            facility laboratory services) in the same
                            building,
                                ``(ii) in which the overhead expenses of
                            the facility are shared, in accordance with
                            methods previously determined by the physicians
                            in the arrangement, among the physicians in the
                            arrangement, and
                                ``(iii) which, in the case of a
                            corporation, is wholly owned and controlled by
                            shared facility physicians.''.
                (2) GAO study of shared facility arrangements.--
                        (A) In general.--The Comptroller General shall
                    analyze the effect on the utilization of health
                    services of shared facility arrangements for which an
                    exception is provided under the amendments made by
                    paragraph (1). The analysis shall include a review of
                    the effect of the limitation, described in section
                    1877(b)(6)(B) of the Social Security Act (as added by
                    paragraph (1)), with respect to such exception and on
                    the availability of services (including hematology
                    services).
                        (B) Report.--Not later than January 1, 1995, the
                    Comptroller General shall submit a report to Congress
                    on the analysis conducted under subparagraph (A). The
                    report shall include recommendations with respect to
                    changing the limitation.
        (g) Exemption of Compensation Arrangements Involving Certain Types
    of Remuneration.--Section 1877(h)(1) (42 U.S.C. 1395nn(h)(1)) is
    amended--
                (1) by striking subparagraph (B);
                (2) in subparagraph (A), by inserting before the period the
            following: ``(other than an arrangement involving only
            remuneration described in subparagraph (B))''; and
                (3) by adding at the end the following new subparagraph:
                ``(B) Remuneration described in this subparagraph is any
            remuneration consisting of any of the following:
                        ``(i) The forgiveness of amounts owed for
                    inaccurate tests or procedures, mistakenly performed
                    tests or procedures, or the correction of minor billing
                    errors.
                        ``(ii) The provision of items, devices, or supplies
                    that are used solely to--
                                ``(I) collect, transport, process, or store
                            specimens for the entity providing the item,
                            device, or supply, or
                                ``(II) communicate the results of tests or
                            procedures for such entity.''.
        (h) Exception for Publicly-Traded Securities.--Section 1877(c)(2)
    (42 U.S.C. 1395nn(d)(2)) is amended by striking ``total assets
    exceeding $100,000,000'' and inserting ``stockholder equity exceeding
    $75,000,000''.
        (i) Miscellaneous and Technical Corrections.--Section 1877 (42
    U.S.C. 1395nn) is amended--
                (1) in subsection (b)(2)(A)(i), in subparagraph (A)(i), by
            striking ``who are employed by such physician or group practice
            and who are personally'' and inserting ``who are directly'';
                (2) in the fourth sentence of subsection (f)--
                        (A) by striking ``provided'' and inserting
                    ``furnished'', and
                        (B) by striking ``provides'' and inserting
                    ``furnish'';
                (3) in the fifth sentence of subsection (f)--
                        (A) by striking ``providing'' each place it appears
                    and inserting ``furnishing'',
                        (B) by striking ``with respect to the providers''
                    and inserting ``with respect to the entities'', and
                        (C) by striking ``diagnostic imaging services of
                    any type'' and inserting ``magnetic resonance imaging,
                    computerized axial tomography scans, and ultrasound
                    services''; and
                (4) in subsection (a)(2)(B), by striking ``subsection
            (h)(1)(A)'' and inserting ``subsection (h)(1)''.
        (j) Effective Dates.--
                (1) The amendments made by subsection (a) apply with
            respect to a referral by a physician for designated health
            services (as described in section 1877(i) of the Social
            Security Act) made after December 31, 1994.
                (2) The amendments made by this section (other than
            subsection (a)) shall apply to referrals made on or after
            January 1, 1992.

    SEC. 5075. REDUCTION IN PAYMENT FOR ERYTHROPOIETIN.

        (a) In General.--Section 1881(b)(11)(B)(ii)(I) (42 U.S.C.
    1395rr(b)(11)(B)(ii)(I)) is amended--
                (1) by striking ``1991'' and inserting ``1994'', and
                (2) by striking ``$11'' and inserting ``$10''.
        (b) Effective Date.--The amendments made by subsection (a) apply to
    erythropoietin furnished after 1993.

    SEC. 5076. MEDICARE HOSPITAL AGREEMENTS WITH ORGAN PROCUREMENT
                  ORGANIZATIONS.

        (a) In General.--Section 1138(a)(1) (42 U.S.C. 1320b-8(a)(1)) is
    amended--
                (1) by striking ``and'' at the end of subparagraph (A),
                (2) by striking the period at the end of subparagraph (B)
            and inserting ``; and'', and
                (3) by adding at the end the following new subparagraph:
                ``(C) in the case of a hospital or rural primary care
            hospital that has in effect an agreement (described in section
            371(b)(3)(A) of the Public Health Service Act) with an organ
            procurement organization, the agreement is with such
            organization for the service area in which the hospital is
            located (as established under such section).''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to hospitals participating in the programs under titles XVIII and
    XIX of the Social Security Act as of January 1, 1994.

    SEC. 5077. EXTENSION OF WAIVER FOR WATTS HEALTH FOUNDATION.

        Section 9312(c)(3)(D) of OBRA-1986, as added by section 4018(d) of
    OBRA-1987 and as amended by section 6212(a)(1) of OBRA-1989, is amended
    by striking ``1994'' and inserting ``1996''.

    SEC. 5078. IMPROVED OUTREACH FOR QUALIFIED MEDICARE BENEFICIARIES.

        The Secretary of Health and Human Services shall establish and
    implement a method for obtaining information from newly eligible
    medicare beneficiaries that may be used to determine whether such
    beneficiaries may be eligible for medical assistance for medicare cost-
    sharing under State medicaid plans as qualified medicare beneficiaries,
    and for transmitting such information to the State in which such a
    beneficiary resides.

    SEC. 5079. SOCIAL HEALTH MAINTENANCE ORGANIZATIONS.

        (a) Extension of Current Waivers.--Section 4018(b) of OBRA-1987, as
    amended by section 4207(b)(4) of OBRA-1990, is amended--
                (1) in paragraph (1) by striking ``December 31, 1995'' and
            inserting ``December 31, 1997''; and
                (2) in paragraph (4) by striking ``March 31, 1996'' and
            inserting ``March 31, 1998''.
        (b) Expansion of Demonstrations.--Section 2355 of the Deficit
    Reduction Act of 1984, as amended by section 4207(b)(4)(B) of OBRA-
    1990, is amended--
                (1) in the last sentence of subsection (a) by striking ``12
            months'' and inserting ``36 months''; and
                (2) in subsection (b)(1)(B)--
                        (A) by striking ``or'' at the end of clause (iii),
                    and
                        (B) by redesignating clause (iv) as clause (v) and
                    inserting after clause (iii) the following new clause:
                                ``(iv) integrating acute and chronic care
                            management for patients with end-stage renal
                            disease through expanded community care case
                            management services (and for purposes of a
                            demonstration project conducted under this
                            clause, any requirement under a waiver granted
                            under this section that a project disenroll
                            individuals who develop end-stage renal disease
                            shall not apply); or''.
        (c) Expansion of Number of Members Per Site.--The Secretary of
    Health and Human Services may not impose a limit of less than 12,000 on
    the number of individuals that may participate in a project conducted
    under section 2355 of the Deficit Reduction Act of 1984.
        (d) Miscellaneous and Technical Corrections.--
                (1) The section following section 4206 of OBRA-1990 is
            amended by striking ``Sec. 4027.'' and inserting ``Sec.
            4207.'', and in this subtitle is referred to as section 4207 of
            OBRA-1990.
                (2) Section 2355(b)(1)(B) of the Deficit Reduction Act of
            1984, as amended by section 4207(b)(4)(B)(ii) of OBRA-1990, is
            amended--
                        (A) by striking ``12907(c)(4)(A)'' and inserting
                    ``4207(b)(4)(B)(i)'', and
                        (B) by striking ``feasibilitly'' and inserting
                    ``feasibility''.
                (3) Section 4207(b)(4)(B)(iii)(III) of OBRA-1990 is amended
            by striking the period at the end and inserting a semicolon.
                (4) Subsections (c)(3) and (e) of section 2355 of the
            Deficit Reduction Act of 1984, as amended by section
            4207(b)(4)(B) of OBRA-1990, are each amended by striking
            ``12907(c)(4)(A)'' each place it appears and inserting
            ``4207(b)(4)(B)''.
                (5) Section 4207(c)(2) of OBRA-1990 is amended by striking
            ``the Committee on Ways and Means'' each place it appears and
            inserting ``the Committees on Ways and Means and Energy and
            Commerce''.
                (6) Section 4207(d) of OBRA-1990 is amended by
            redesignating the second paragraph (3) (relating to effective
            date) as paragraph (4).
                (7) Section 4207(i)(2) of OBRA-1990 is amended--
                        (A) by striking the period at the end of clause
                    (iii) and inserting a semicolon, and
                        (B) in clause (v), by striking ``residents'' and
                    inserting ``patients''.
                (8) Section 4207(j) of OBRA-1990 is amended by striking
            ``title'' each place it appears and inserting ``subtitle''.
        (e) Effective Date.--The amendments made by this section shall take
    effect as if included in the enactment of OBRA-1990.

    SEC. 5080. PEER REVIEW ORGANIZATIONS.

        (a) Repeal of PRO Precertification Requirement for Certain Surgical
    Procedures.--
                (1) In general.--Section 1164 (42 U.S.C. 1320c-13) is
            repealed.
                (2) Conforming amendments.--
                        (A) Section 1154 (42 U.S.C. 1320c-3) is amended--
                                (i) in subsection (a), by striking
                            paragraph (12), and
                                (ii) in subsection (d), by striking ``(and
                            except as provided in section 1164)''.
                        (B) Section 1833 (42 U.S.C. 1395l) is amended--
                                (i) in subsection (a)(1)(D)(i), by striking
                            ``, or for tests furnished in connection with
                            obtaining a second opinion required under
                            section 1164(c)(2) (or a third opinion, if the
                            second opinion was in disagreement with the
                            first opinion)'';
                                (ii) in subsection (a)(1), by striking
                            clause (G);
                                (iii) in subsection (a)(2)(A), by striking
                            ``to items and services (other than clinical
                            diagnostic laboratory tests) furnished in
                            connection with obtaining a second opinion
                            required under section 1164(c)(2) (or a third
                            opinion, if the second opinion was in
                            disagreement with the first opinion),'';
                                (iv) in subsection (a)(2)(D)(i)--
                                        (I) by striking ``related basis,''
                                    and inserting ``related basis or'', and
                                        (II) by striking ``, or for tests
                                    furnished in connection with obtaining
                                    a second opinion required under section
                                    1164(c)(2) (or a third opinion, if the
                                    second opinion was in disagreement with
                                    the first opinion)'';
                                (v) in subsection (a)(3), by striking ``and
                            for items and services furnished in connection
                            with obtaining a second opinion required under
                            section 1164(c)(2), or a third opinion, if the
                            second opinion was in disagreement with the
                            first opinion)''; and
                                (vi) in the first sentence of subsection
                            (b), by striking ``(4)'' and all that follows
                            through ``and (5)'' and inserting ``and (4)''.
                        (C) Section 1834(g)(1)(B) (42 U.S.C.
                    1395m(g)(1)(B)) is amended by striking ``and for items
                    and services furnished in connection with obtaining a
                    second opinion required under section 1164(c)(2), or a
                    third opinion, if the second opinion was in
                    disagreement with the first opinion)''.
                        (D) Section 1862(a) (42 U.S.C. 1395y(a)) is
                    amended--
                                (i) by adding ``or'' at the end of
                            paragraph (14),
                                (ii) by striking ``; or'' at the end of
                            paragraph (15) and inserting a period, and
                                (iii) by striking paragraph (16).
                        (E) The third sentence of section 1866(a)(2)(A) (42
                    U.S.C. 1395w(a)(2)(A)) is amended by striking ``, with
                    respect to items and services furnished in connection
                    with obtaining a second opinion required under section
                    1164(c)(2) (or a third opinion, if the second opinion
                    was in disagreement with the first opinion),''.
                (3) Effective date.--The amendments made by this subsection
            shall apply to services provided on or after the date of the
            enactment of this Act.
        (b) Miscellaneous and Technical Corrections.--(1) The third
    sentence of section 1156(b)(1) (42 U.S.C. 1320c-5(b)(1)) is amended by
    striking ``whehter'' and inserting ``whether''.
        (2)(A) Subparagraph (B) of section 1154(a)(9) (42 U.S.C. 1320c-
    3(a)(9)) is amended to read as follows:
                ``(B) If the organization finds, after reasonable notice
            and opportunity for discussion with the physician or
            practitioner concerned, that the physician or practitioner has
            furnished services in violation of section 1156(a), the
            organization shall notify the State board or boards responsible
            for the licensing or disciplining of the physician or
            practitioner of its finding and of any action taken as a result
            of the finding.''.
        (B) Subparagraph (D) of section 1160(b)(1) (42 U.S.C. 1320c-
    9(b)(1)) is amended to read as follows:
                        ``(D) to provide notice in accordance with section
                    1154(a)(9)(B);''.
        (3) Section 4205(d)(2)(B) of OBRA-1990 is amended by striking
    ``amendments'' and inserting ``amendment''.
        (4) Section 1160(d) (42 U.S.C. 1320c-9(d)) is amended by striking
    ``subpena'' and inserting ``subpoena''.
        (5) Section 4205(e)(2) of OBRA-1990 is amended by striking
    ``amendments'' and inserting ``amendment'' and by striking ``all''.
        (6)(A) Except as provided in subparagraph (B), the amendments made
    by this subsection shall take effect as if included in the enactment of
    OBRA-1990.
        (B) The amendments made by paragraph (2) (relating to the
    requirement on reporting of information to State boards) shall take
    effect on the date of the enactment of this Act.

    SEC. 5081. HOSPICE INFORMATION TO HOME HEALTH BENEFICIARIES.

        (a) In General.--Section 1891(a)(1) (42 U.S.C. 1395bbb(a)(1)) is
    amended by adding at the end the following new subparagraph:
                        ``(H) The right, in the case of a resident who is
                    entitled to benefits under this title, to be fully
                    informed orally and in writing (at the time of coming
                    under the care of the agency) of the entitlement of
                    individuals to hospice care under section 1812(a)(4)
                    (unless there is no hospice program providing hospice
                    care for which payment may be made under this title
                    within the geographic area of the facility and it is
                    not the common practice of the agency to refer patients
                    to hospice programs located outside such geographic
                    area).''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to services furnished on or after the first day of the first
    month beginning more than one year after the date of the enactment of
    this Act.

    SEC. 5082. HEALTH MAINTENANCE ORGANIZATIONS.

        (a) Adjustment In Medicare Capitation Payments To Account For
    Regional Variations In Application of Secondary Payer Provisions.--
                (1) In general.--Section 1876(a)(4) (42 U.S.C.
            1395mm(a)(4)) is amended by adding at the end the following new
            sentence: ``In establishing the adjusted average per capita
            cost for a geographic area, the Secretary shall take into
            account the differences between the proportion of individuals
            in the area with respect to whom there is a group health plan
            that is a primary plan (within the meaning of section
            1862(b)(2)(A)) compared to the proportion of all such
            individuals with respect to whom there is such a group health
            plan.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to contracts entered into for years beginning with
            1994.
        (b) Revisions in the Payment Methodology for Risk Contractors.--
    Section 4204(b) of OBRA-1990 is amended to read as follows:
        ``(b) Revisions in the Payment Methodology for Risk Contractors.--
    (1)(A) Not later than January 1, 1995, the Secretary of Health and
    Human Services (in this subsection referred to as the ``Secretary'')
    shall submit a proposal to the Congress that provides for revisions to
    the payment method to be applied in years beginning with 1996 for
    organizations with a risk-sharing contract under section 1876(g) of the
    Social Security Act.
        ``(B) In proposing the revisions required under subparagraph (A)
    the Secretary shall consider--
                ``(i) the difference in costs associated with medicare
            beneficiaries with differing health status and demographic
            characteristics; and
                ``(ii) the effects of using alternative geographic
            classifications on the determinations of costs associated with
            beneficiaries residing in different areas.
        ``(2) Not later than 3 months after the date of submittal of the
    proposal made pursuant to paragraph (1), the Comptroller General shall
    review the proposal and shall report to Congress on the appropriateness
    of the proposed modifications.''.
        (c) Miscellaneous and Technical Corrections.--(1) Section
    1876(a)(3) (42 U.S.C. 1395mm(a)(3)) is amended by striking ``subsection
    (c)(7)'' and inserting ``subsections (c)(2)(B)(ii) and (c)(7)''.
        (2) Section 4204(c)(3) of OBRA-1990 is amended by striking ``for
    1991'' and inserting ``for years beginning with 1991''.
        (3) Section 4204(d)(2) of OBRA-1990 is amended by striking
    ``amendment'' and inserting ``amendments''.
        (4) Section 1876(a)(1)(E)(ii)(I) (42 U.S.C. 1395mm(a)(1)(E)(ii)(I))
    is amended by striking the comma after ``contributed to''.
        (5) Section 4204(e)(2) of OBRA-1990 is amended by striking ``(which
    has a risk-sharing contract under section 1876 of the Social Security
    Act)''.
        (6) Section 4204(f)(4) of OBRA-1990 is amended by striking
    ``final''.
        (7) Section 1862(b)(3)(C) (42 U.S.C. 1395y(b)(3)(C)) is amended--
                (A) in the heading, by striking ``plan'' and inserting
            ``plan or a large group health plan'';
                (B) by striking ``group health plan'' and inserting ``group
            health plan or a large group health plan'';
                (C) by striking ``, unless such incentive is also offered
            to all individuals who are eligible for coverage under the
            plan''; and
                (D) by striking ``the first sentence of subsection (a) and
            other than subsection (b)'' and inserting ``subsections (a) and
            (b)''.
        (8) The amendments made by this subsection shall take effect as if
    included in the enactment of OBRA-1990.

    SEC. 5083. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

        (a) Survey and Certification Requirements.--(1) Section 1864 (42
    U.S.C. 1395aa) is amended--
                (A) in subsection (e), by striking ``title'' and inserting
            ``title (other than any fee relating to section 353 of the
            Public Health Service Act)''; and
                (B) in the first sentence of subsection (a), by striking
            ``1861(s) or'' and all that follows through ``Service Act,''
            and inserting ``1861(s),''.
        (2) An agreement made by the Secretary of Health and Human Services
    with a State under section 1864(a) of the Social Security Act may
    include an agreement that the services of the State health agency or
    other appropriate State agency (or the appropriate local agencies) will
    be utilized by the Secretary for the purpose of determining whether a
    laboratory meets the requirements of section 353 of the Public Health
    Service Act.
        (b) Other Miscellaneous and Technical Provisions.--(1) Section 1833
    (42 U.S.C. 1395l) is amended by redesignating the subsection (r) added
    by section 4206(b)(2) of OBRA-1990 as subsection (s).
        (2) Section 1866(f)(1) (42 U.S.C. 1395cc(f)(1)) is amended by
    striking ``1833(r)'' and inserting ``1833(s)''.
        (3) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is amended by moving
    subparagraph (O), as redesignated by section 5070(f)(7)(B)(iii)(II) of
    this subtitle, two ems to the left.
        (4) Section 1881(b)(1)(C) (42 U.S.C. 1395rr(b)(1)(C)) is amended by
    striking ``1861(s)(2)(Q)'' and inserting ``1861(s)(2)(P)''.
        (5) Section 4201(d)(2) of OBRA-1990 is amended by striking ``(B) by
    striking'', ``(C) by striking'', and ``(3) by adding'' and inserting
    ``(i) by striking'', ``(ii) by striking'', and ``(B) by adding'',
    respectively.
        (6)(A) Section 4207(a)(1) of OBRA-1990 is amended by adding closing
    quotation marks and a period after ``such review.''.
        (B) Section 4207(a)(4) of OBRA-1990 is amended by striking ``this
    subsection'' and inserting ``paragraphs (2) and (3)''.
        (C) Section 4207(b)(1) of OBRA-1990 is amended by striking
    ``section 3(7)'' and inserting ``section 601(a)(1)''.
        (7) Section 4202 of OBRA-1990 is amended--
                (A) in subsection (b)(1)(A), by striking ``home
            hemodialysis staff assistant'' and inserting ``qualified home
            hemodialysis staff assistant (as described in subsection
            (d))'';
                (B) in subsection (b)(2)(B)(ii)(I), by striking ``(as
            adjusted to reflect differences in area wage levels)'';
                (C) in subsection (c)(1)(A), by striking ``skilled''; and
                (D) in subsection (c)(1)(E), by striking ``(b)(4)'' and
            inserting ``(b)(2)''.
        (c) Effective Date.--The amendments made by this section shall take
    effect as if included in the enactment of OBRA-1990.

       CHAPTER 3--PROVISIONS RELATING TO MEDICARE SUPPLEMENTAL INSURANCE
                                    POLICIES

    SEC. 5091. STANDARDS FOR MEDICARE SUPPLEMENTAL INSURANCE POLICIES.

        (a) Simplification of Medicare Supplemental Policies.--
                (1) Section 4351 of OBRA-1990 is amended by striking ``(a)
            In General.--''.
                (2) Section 1882(p) (42 U.S.C. 1395ss(p)) is amended--
                        (A) in paragraph (1)(A)--
                                (i) by striking ``promulgates'' and
                            inserting ``changes the revised NAIC Model
                            Regulation (described in subsection (m)) to
                            incorporate'',
                                (ii) by striking ``(such limitations,
                            language, definitions, format, and standards
                            referred to collectively in this subsection as
                            `NAIC standards'),'', and
                                (iii) by striking ``included a reference to
                            the NAIC standards'' and inserting ``were a
                            reference to the revised NAIC Model Regulation
                            as changed under this subparagraph (such
                            changed regulation referred to in this section
                            as the `1991 NAIC Model Regulation')'';
                        (B) in paragraph (1)(B)--
                                (i) by striking ``promulgate NAIC
                            standards'' and inserting ``make the changes in
                            the revised NAIC Model Regulation'',
                                (ii) by striking ``limitations, language,
                            definitions, format, and standards described in
                            clauses (i) through (iv) of such subparagraph
                            (in this subsection referred to collectively as
                            `Federal standards')'' and inserting ``a
                            regulation'', and
                                (iii) by striking ``included a reference to
                            the Federal standards'' and inserting ``were a
                            reference to the revised NAIC Model Regulation
                            as changed by the Secretary under this
                            subparagraph (such changed regulation referred
                            to in this section as the `1991 Federal
                            Regulation')'';
                        (C) in paragraph (1)(C)(i), by striking ``NAIC
                    standards or the Federal standards'' and inserting
                    ``1991 NAIC Model Regulation or 1991 Federal
                    Regulation'';
                        (D) in paragraphs (1)(C)(ii)(I), (1)(E), (2), and
                    (9)(B), by striking ``NAIC or Federal standards'' and
                    inserting ``1991 NAIC Model Regulation or 1991 Federal
                    Regulation'';
                        (E) in paragraph (2)(C), by striking ``(5)(B)'' and
                    inserting ``(4)(B)'';
                        (F) in paragraph (4)(A)(i), by inserting ``or
                    paragraph (6)'' after ``(B)'';
                        (G) in paragraph (4), by striking ``applicable
                    standards'' each place it appears and inserting
                    ``applicable 1991 NAIC Model Regulation or 1991 Federal
                    Regulation'';
                        (H) in paragraph (6), by striking ``in regard to
                    the limitation of benefits described in paragraph (4)''
                    and inserting ``described in clauses (i) through (iii)
                    of paragraph (1)(A)'';
                        (I) in paragraph (7), by striking ``policyholder''
                    and inserting ``policyholders'';
                        (J) in paragraph (8), by striking ``after the
                    effective date of the NAIC or Federal standards with
                    respect to the policy, in violation of the previous
                    requirements of this subsection'' and inserting ``on
                    and after the effective date specified in paragraph
                    (1)(C) (but subject to paragraph (10)), in violation of
                    the applicable 1991 NAIC Model Regulation or 1991
                    Federal Regulation insofar as such regulation relates
                    to the requirements of subsection (o) or (q) or clause
                    (i), (ii), or (iii) of paragraph (1)(A)'';
                        (K) in paragraph (9), by adding at the end the
                    following new subparagraph:
        ``(D) Subject to paragraph (10), this paragraph shall apply to
    sales of policies occurring on or after the effective date specified in
    paragraph (1)(C).''; and
                        (L) in paragraph (10), by striking ``this
                    subsection'' and inserting ``paragraph (1)(A)(i)''.
        (b) Guaranteed Renewability.--Section 1882(q) (42 U.S.C. 1395ss(q))
    is amended--
                (1) in paragraph (2), by striking ``paragraph (2)'' and
            inserting ``paragraph (4)'', and
                (2) in paragraph (4), by striking ``the succeeding issuer''
            and inserting ``issuer of the replacement policy''.
        (c) Enforcement of Standards.--
                (1) Section 1882(a)(2) (42 U.S.C. 1395ss(a)(2)) is
            amended--
                        (A) in subparagraph (A), by striking ``NAIC
                    standards or the Federal standards'' and inserting
                    ``1991 NAIC Model Regulation or 1991 Federal
                    Regulation'', and
                        (B) by striking ``after the effective date of the
                    NAIC or Federal standards with respect to the policy''
                    and inserting ``on and after the effective date
                    specified in subsection (p)(1)(C)''.
                (2) The sentence in section 1882(b)(1) added by section
            4353(c)(5) of OBRA-1990 is amended--
                        (A) by striking ``The report'' and inserting ``Each
                    report'',
                        (B) by inserting ``and requirements'' after
                    ``standards'',
                        (C) by striking ``and'' after ``compliance,'', and
                        (D) by striking the comma after ``Commissioners''.
                (3) Section 1882(g)(2)(B) (42 U.S.C. 1395ss(g)(2)(B)) is
            amended by striking ``Panel'' and inserting ``Secretary''.
                (4) Section 1882(b)(1) (42 U.S.C. 1395ss(b)(1)) is amended
            by striking ``the the Secretary'' and inserting ``the
            Secretary''.
        (d) Preventing Duplication.--
                (1) Section 1882(d)(3)(A) (42 U.S.C. 1395ss(d)(3)(A)) is
            amended--
                        (A) by amending the first sentence to read as
                    follows:
        ``(i) It is unlawful for a person to sell or issue to an individual
    entitled to benefits under part A or enrolled under part B of this
    title--
                ``(I) a health insurance policy with knowledge that the
            policy duplicates health benefits to which the individual is
            otherwise entitled under this title or title XIX,
                ``(II) a medicare supplemental policy with knowledge that
            the individual is entitled to benefits under another medicare
            supplemental policy, or
                ``(III) a health insurance policy (other than a medicare
            supplemental policy) with knowledge that the policy duplicates
            health benefits to which the individual is otherwise entitled,
            other than benefits to which the individual is entitled under a
            requirement of State or Federal law.'';
                        (B) by designating the second sentence as clause
                    (ii) and, in such clause, by striking ``the previous
                    sentence'' and inserting ``clause (i)'';
                        (C) by designating the third sentence as clause
                    (iii) and, in such clause--
                                (i) by striking ``the previous sentence''
                            and inserting ``clause (i) with respect to the
                            sale of a medicare supplemental policy'', and
                                (ii) by striking ``and the statement'' and
                            all that follows up to the period at the end;
                            and
                        (D) by striking the last sentence.
                (2) Section 1882(d)(3)(B) (42 U.S.C. 1395ss(d)(3)(B)) is
            amended--
                        (A) in clause (ii)(II), by striking ``65 years of
                    age or older'',
                        (B) in clause (iii)(I), by striking ``another
                    medicare'' and inserting ``a medicare'',
                        (C) in clause (iii)(I), by striking ``such a
                    policy'' and inserting ``a medicare supplemental
                    policy'',
                        (D) in clause (iii)(II), by striking ``another
                    policy'' and inserting ``a medicare supplemental
                    policy'', and
                        (E) by amending subclause (III) of clause (iii) to
                    read as follows:
        ``(III) If the statement required by clause (i) is obtained and
    indicates that the individual is entitled to any medical assistance
    under title XIX, the sale of the policy is not in violation of clause
    (i) (insofar as such clause relates to such medical assistance), if a
    State medicaid plan under such title pays the premiums for the policy,
    or, in the case of a qualified medicare beneficiary described in
    section 1905(p)(1), if the State pays less than the full amount of
    medicare cost-sharing as described in subparagraphs (B), (C), and (D)
    of section 1905(p)(3) for such individual.''.
                (3)(A) Section 1882(d)(3)(C) (42 U.S.C. 1395ss(d)(3)(C)) is
            amended--
                        (i) by striking ``the selling'' and inserting ``(i)
                    the sale or issuance'', and
                        (ii) by inserting before the period at the end the
                    following: ``, (ii) the sale or issuance of a policy or
                    plan described in subparagraph (A)(i)(I) (other than a
                    medicare supplemental policy to an individual entitled
                    to any medical assistance under title XIX) under which
                    all the benefits are fully payable directly to or on
                    behalf of the individual without regard to other health
                    benefit coverage of the individual but only if (for
                    policies sold or issued more than 60 days after the
                    date the statements are published or promulgated under
                    subparagraph (D)) there is disclosed in a prominent
                    manner as part of (or together with) the application
                    the applicable statement (specified under subparagraph
                    (D)) of the extent to which benefits payable under the
                    policy or plan duplicate benefits under this title, or
                    (iii) the sale or issuance of a policy or plan
                    described in subparagraph (A)(i)(III) under which all
                    the benefits are fully payable directly to or on behalf
                    of the individual without regard to other health
                    benefit coverage of the individual''.
                (B) Section 1882(d)(3) (42 U.S.C. 1395ss(d)(3)) is amended
            by adding at the end the following:
        ``(D)(i) If--
                ``(I) within the 90-day period beginning on the date of the
            enactment of this subparagraph, the National Association of
            Insurance Commissioners develops (after consultation with
            consumer and insurance industry representatives) and submits to
            the Secretary a statement for each of the types of health
            insurance policies (other than medicare supplemental policies
            and including, as separate types of policies, policies paying
            directly to the beneficiary fixed, cash benefits) which are
            sold to persons entitled to health benefits under this title,
            of the extent to which benefits payable under the policy or
            plan duplicate benefits under this title, and
                ``(II) the Secretary approves all the statements submitted
            as meeting the requirements of subclause (I),
    each such statement shall be (for purposes of subparagraph (C)) the
    statement specified under this subparagraph for the type of policy
    involved. The Secretary shall review and approve (or disapprove) all
    the statements submitted under subclause (I) within 30 days after the
    date of their submittal. Upon approval of such statements, the
    Secretary shall publish such statements.
        ``(ii) If the Secretary does not approve the statements under
    clause (i) or the statements are not submitted within the 90-day period
    specified in such clause, the Secretary shall promulgate (after
    consultation with consumer and insurance industry representatives and
    not later than 90 days after the date of disapproval or the end of such
    90-day period (as the case may be)) a statement for each of the types
    of health insurance policies (other than medicare supplemental policies
    and including, as separate types of policies, policies paying directly
    to the beneficiary fixed, cash benefits) which are sold to persons
    entitled to health benefits under this title, of the extent to which
    benefits payable under the policy or plan duplicate benefits under this
    title, and each such statement shall be (for purposes of subparagraph
    (C)) the statement specified under this subparagraph for the type of
    policy involved.''.
                (C) The requirement of a disclosure under section
            1882(d)(3)(C)(ii) of the Social Security Act shall not apply to
            an application made for a policy or plan before 60 days after
            the date of the Secretary of Health and Human Services
            publishes or promulgates all the statements under section
            1882(d)(3)(D) of such Act.
                (4) Subparagraphs (A) and (B) of section 1882(q)(5) (42
            U.S.C. 1395ss(q)(5)(A)) are amended by striking ``of the Social
            Security Act''.
        (e) Loss Ratios and Refunds of Premiums.--
                (1) Section 1882(r) (42 U.S.C. 1395ss(r)) is amended--
                        (A) in paragraph (1), by striking ``or sold'' and
                    inserting ``or renewed (or otherwise provide coverage
                    after the date described in subsection (p)(1)(C))'';
                        (B) in paragraph (1)(A), by inserting ``for periods
                    after the effective date of these provisions'' after
                    ``the policy can be expected'';
                        (C) in paragraph (1)(A), by striking
                    ``Commissioners,'' and inserting ``Commissioners)'';
                        (D) in paragraph (1)(B), by inserting before the
                    period at the end the following: ``, treating policies
                    of the same type as a single policy for each standard
                    package'';
                        (E) by adding at the end of paragraph (1) the
                    following: ``For the purpose of calculating the refund
                    or credit required under paragraph (1)(B) for a policy
                    issued before the date specified in subsection
                    (p)(1)(C), the refund or credit calculation shall be
                    based on the aggregate benefits provided and premiums
                    collected under all such policies issued by an insurer
                    in a State (separated as to individual and group
                    policies) and shall be based only on aggregate benefits
                    provided and premiums collected under such policies
                    after the date specified in section 5091(m)(4) of the
                    Omnibus Budget Reconciliation Act of 1993.'';
                        (F) in the first sentence of paragraph (2)(A), by
                    striking ``by policy number'' and inserting ``by
                    standard package'';
                        (G) by striking the second sentence of paragraph
                    (2)(A) and inserting the following: ``Paragraph (1)(B)
                    shall not apply to a policy until 12 months following
                    issue.'';
                        (H) in the last sentence of paragraph (2)(A), by
                    striking ``in order'' and all that follows through
                    ``are effective'';
                        (I) by adding at the end of paragraph (2)(A), the
                    following new sentence: ``In the case of a policy
                    issued before the date specified in subsection
                    (p)(1)(C), paragraph (1)(B) shall not apply until 1
                    year after the date specified in section 5091(m)(4) of
                    the Omnibus Budget Reconciliation Act of 1993.'';
                        (J) in paragraph (2), by striking ``policy year''
                    each place it appears and inserting ``calendar year'';
                        (K) in paragraph (4), by striking ``February'',
                    ``disllowance'', ``loss-ratios'' each place it appears,
                    and ``loss-ratio'' and inserting ``October'',
                    ``disallowance'', ``loss ratios'', and ``loss ratio'',
                    respectively;
                        (L) in paragraph (6)(A), by striking ``issues a
                    policy in violation of the loss ratio requirements of
                    this subsection'' and ``such violation'' and inserting
                    ``fails to provide refunds or credits as required in
                    paragraph (1)(B)'' and ``policy issued for which such
                    failure occurred'', respectively; and
                        (M) in paragraph (6)(B), by striking ``to
                    policyholders'' and inserting ``to the policyholder or,
                    in the case of a group policy, to the certificate
                    holder''.
                (2) Section 1882(b)(1) (42 U.S.C. 1395ss(b)(1)) is amended,
            in the matter after subparagraph (H), by striking ``subsection
            (F)'' and inserting ``subparagraph (F)''.
                (3) Section 4355(d) of OBRA-1990 is amended by striking
            ``sold or issued'' and all that follows and inserting ``issued
            or renewed (or otherwise providing coverage after the date
            described in section 1882(p)(1)(C) of the Social Security Act)
            on or after the date specified in section 1882(p)(1)(C) of such
            Act.''.
        (f) Treatment of HMO's.--
                (1) Section 1882(g)(1) (42 U.S.C. 1395ss(g)(1)) is amended
            by striking ``a health maintenance organization or other direct
            service organization'' and all that follows through ``1833''
            and inserting ``an eligible organization (as defined in section
            1876(b)) if the policy or plan provides benefits pursuant to a
            contract under section 1876 or an approved demonstration
            project described in section 603(c) of the Social Security
            Amendments of 1983, section 2355 of the Deficit Reduction Act
            of 1984, or section 9412(b) of the Omnibus Budget
            Reconciliation Act of 1986 or, during the period beginning on
            the date specified in subsection (p)(1)(C) and ending on
            December 31, 1994, a policy or plan of an organization if the
            policy or plan provides benefits pursuant to an agreement under
            section 1833(a)(1)(A)''.
                (2) Section 4356(b) of OBRA-1990 is amended by striking
            ``on the date of the enactment of this Act'' and inserting ``on
            the date specified in section 1882(p)(1)(C) of the Social
            Security Act''.
        (g) Pre-existing Condition Limitations.--Section 1882(s) (42 U.S.C.
    1395ss(s)) is amended--
                (1) in paragraph (2)(A), by striking ``for which an
            application is submitted'' and inserting ``in the case of an
            individual for whom an application is submitted prior to or'',
                (2) in paragraph (2)(A), by striking ``in which the
            individual (who is 65 years of age or older) first is enrolled
            for benefits under part B'' and inserting ``as of the first day
            on which the individual is 65 years of age or older and is
            enrolled for benefits under part B'', and
                (3) in paragraph (2)(B), by striking ``before it'' and
            inserting ``before the policy''.
        (h) Medicare Select Policies.--
                (1) Section 1882(t) (42 U.S.C. 1395ss(t)) is amended--
                        (A) in paragraph (1), by inserting ``medicare
                    supplemental'' after ``If a'',
                        (B) in paragraph (1), by striking ``NAIC Model
                    Standards'' and inserting ``1991 NAIC Model Regulation
                    or 1991 Federal Regulation'',
                        (C) in paragraph (1)(A), by inserting ``or
                    agreements'' after ``contracts'',
                        (D) in subparagraphs (E)(i) and (F) of paragraph
                    (1), by striking ``NAIC standards'' and inserting
                    ``standards in the 1991 NAIC Model Regulation or 1991
                    Federal Regulation'', and
                        (E) in paragraph (2), by inserting ``the issuer''
                    before ``is subject to a civil money penalty''.
                (2) Section 1154(a)(4)(B) (42 U.S.C. 1320c-3(a)(4)(B)) is
            amended--
                        (A) by inserting ``that is'' after ``(or'', and
                        (B) by striking ``1882(t)'' and inserting
                    ``1882(t)(3)''.
        (i) Health Insurance Counseling.--Section 4360 of OBRA-1990 is
    amended--
                (1) in subsection (b)(2)(A)(ii), by striking ``Act'' and
            inserting ``Act)'';
                (2) in subsection (b)(2)(D), by striking ``services'' and
            inserting ``counseling'';
                (3) in subsection (b)(2)(I), by striking ``assistance'' and
            inserting ``referrals'';
                (4) in subsection (c)(1), by striking ``and that such
            activities will continue to be maintained at such level'';
                (5) in subsection (d)(3), by striking ``to the rural
            areas'' and inserting ``eligible individuals residing in rural
            areas'';
                (6) in subsection (e)--
                        (A) by striking ``subsection (c) or (d)'' and
                    inserting ``this section'',
                        (B) by striking ``and annually thereafter, issue an
                    annual report'' and inserting ``and annually thereafter
                    during the period of the grant, issue a report'', and
                        (C) in paragraph (1), by striking ``State-wide;'',
                (7) in subsection (f), by striking paragraph (2) and by
            redesignating paragraphs (3) through (5) as paragraphs (2)
            through (4), respectively; and
                (8) by redesignating the second subsection (f) (relating to
            authorization of appropriations for grants) as subsection (g).
        (j) Telephone Information System.--
                (1) Section 1804 (42 U.S.C. 1395b-2) is amended--
                        (A) by adding at the end of the heading the
                    following: ``; medicare and medigap information'',
                        (B) by inserting ``(a)'' after ``1804.'', and
                        (C) by adding at the end the following new
                    subsection:
        ``(b) The Secretary shall provide information via a toll-free
    telephone number on the programs under this title.''.
                (2) Section 1882(f) (42 U.S.C. 1395ss(f)) is amended by
            adding at the end the following new paragraph:
        ``(3) The Secretary shall provide information via a toll-free
    telephone number on medicare supplemental policies (including the
    relationship of State programs under title XIX to such policies).''.
                (3) Section 1889 (42 U.S.C. 1395zz) is repealed.
        (k) Mailing of Policies.--Section 1882(d)(4) (42 U.S.C.
    1395ss(d)(4)) is amended--
                (1) in subparagraph (D), by striking ``, if such policy''
            and all that follows up to the period at the end, and
                (2) by adding at the end the following new subparagraph:
        ``(E) Subparagraph (A) shall not apply in the case of an issuer who
    mails or causes to be mailed a policy, certificate, or other matter
    solely to comply with the requirements of subsection (q).''.
        (l) Effective Date.--The amendments made by this section shall be
    effective as if included in the enactment of OBRA-1990; except that--
                (1) the amendments made by subsection (d)(1) shall take
            effect on the date of the enactment of this Act, but no penalty
            shall be imposed under section 1882(d)(3)(A) of the Social
            Security Act (for an action occurring after the effective date
            of the amendments made by section 4354 of OBRA-1990 and before
            the date of the enactment of this Act) with respect to the sale
            or issuance of a policy which is not unlawful under section
            1882(d)(3)(A)(i)(II) of the Social Security Act (as amended by
            this section);
                (2) the amendments made by subsection (d)(2)(A) and by
            subparagraphs (A), (B), and (E) of subsection (e)(1) shall be
            effective on the date specified in subsection (m)(4); and
                (3) the amendment made by subsection (g)(2) shall take
            effect on January 1, 1994, and shall apply to individuals who
            attain 65 years of age or older on or after the effective date
            of section 1882(s)(2) of the Social Security Act (and, in the
            case of individuals who attained 65 years of age after such
            effective date and before January 1, 1994, and who were not
            covered under such section before January 1, 1994, the 6-month
            period specified in that section shall begin January 1, 1994).
        (m) Transition Provisions.--
                (1) In general.--If the Secretary of Health and Human
            Services identifies a State as requiring a change to its
            statutes or regulations to conform its regulatory program to
            the changes made by this section, the State regulatory program
            shall not be considered to be out of compliance with the
            requirements of section 1882 of the Social Security Act due
            solely to failure to make such change until the date specified
            in paragraph (4).
                (2) NAIC standards.--If, within 6 months after the date of
            the enactment of this Act, the National Association of
            Insurance Commissioners (in this subsection referred to as the
            ``NAIC'') modifies its 1991 NAIC Model Regulation (adopted in
            July 1991) to conform to the amendments made by this section
            and to delete from section 15C the exception which begins with
            ``unless'', such modifications shall be considered to be part
            of that Regulation for the purposes of section 1882 of the
            Social Security Act.
                (3) Secretary standards.--If the NAIC does not make the
            modifications described in paragraph (2) within the period
            specified in such paragraph, the Secretary of Health and Human
            Services shall make the modifications described in such
            paragraph and such modifications shall be considered to be part
            of that Regulation for the purposes of section 1882 of the
            Social Security Act.
                (4) Date specified.--
                        (A) In general.--Subject to subparagraph (B), the
                    date specified in this paragraph for a State is the
                    earlier of--
                                (i) the date the State changes its statutes
                            or regulations to conform its regulatory
                            program to the changes made by this section, or
                                (ii) 1 year after the date the NAIC or the
                            Secretary first makes the modifications under
                            paragraph (2) or (3), respectively.
                        (B) Additional legislative action required.--In the
                    case of a State which the Secretary identifies as--
                                (i) requiring State legislation (other than
                            legislation appropriating funds) to conform its
                            regulatory program to the changes made in this
                            section, but
                                (ii) having a legislature which is not
                            scheduled to meet in 1994 in a legislative
                            session in which such legislation may be
                            considered,
                    the date specified in this paragraph is the first day
                    of the first calendar quarter beginning after the close
                    of the first legislative session of the State
                    legislature that begins on or after January 1, 1994.
                    For purposes of the previous sentence, in the case of a
                    State that has a 2-year legislative session, each year
                    of such session shall be deemed to be a separate
                    regular session of the State legislature.

         Subtitle B--Medicaid Program and Other Health Care Provisions

    SEC. 5100. REFERENCES IN SUBTITLE; TABLE OF CONTENTS OF SUBTITLE.

        (a) Amendments to Social Security Act.--Except as otherwise
    specifically provided, whenever in this subtitle an amendment is
    expressed in terms of an amendment to or repeal of a section or other
    provision, the reference shall be considered to be made to that section
    or other provision of the Social Security Act.
        (b) References to OBRA.--In this subtitle, the terms ``OBRA-1986'',
    ``OBRA-1987'', ``OBRA-1989'', and ``OBRA-1990'' refer to the Omnibus
    Budget Reconciliation Act of 1986 (Public Law 99-509), the Omnibus
    Budget Reconciliation Act of 1987 (Public Law 100-203), the Omnibus
    Budget Reconciliation Act of 1989 (Public Law 101-239), and the Omnibus
    Budget Reconciliation Act of 1990 (Public Law 101-508), respectively.
        (c) Table of Contents of Subtitle.--The table of contents of this
    subtitle is as follows:

         Subtitle B--Medicaid Program and Other Health Care Provisions

    Sec. 5100. References in subtitle; table of contents of subtitle.
                    subchapter a--program savings provisions
                           Part I--Repeal of Mandate

    Sec. 5101. Personal care services furnished outside the home as
                                optional benefit.
                     Part II--Outpatient Prescription Drugs

    Sec. 5106. Permitting prescription drug formularies under State plans.
    Sec. 5107. Elimination of special exemption from prior authorization
                                for new drugs.
    Sec. 5108. Technical corrections relating to section 4401 of OBRA-1990.
      Part III--Restrictions on Divestiture of Assets and Estate Recovery

    Sec. 5111. Transfer of assets.
    Sec. 5112. Medicaid estate recoveries.
    Sec. 5113. Closing loophole permitting wealthy individuals to qualify
                                for medicaid.
     Part IV--Improvement in Identification and Collection of Third Party
                                    Payments

    Sec. 5116. Liability of third parties to pay for care and services.
    Sec. 5117. Health Coverage Clearinghouse.
                   ``TITLE XXI--HEALTH COVERAGE CLEARINGHOUSE

            ``Sec. 2101. Establishment of clearinghouse.
            ``Sec. 2102. Provision of information.
            ``Sec. 2103. Requirement that employers furnish information.
            ``Sec. 2104. Data bank.''.

    Sec. 5118. Medical child support.
      Part V--Assuring Proper Payments to Disproportionate Share Hospitals

    Sec. 5121. Assuring proper payments to disproportionate share
                     subchapter b--miscellaneous provisions
                    Part I--Anti-fraud and Abuse Provisions

    Sec. 5131. Application of medicare rules limiting certain physician
                                referrals.
    Sec. 5132. Intermediate sanctions for kickback violations.
    Sec. 5133. Requiring maintenance of effort for State medicaid fraud
                                control units.
                        Part II--Managed Care Provisions

    Sec. 5135. Medicaid managed care anti-fraud provisions.
    Sec. 5136. Clarification of treatment of HMO enrollees in computing the
                                medicaid inpatient utilization rate in
                                qualifying hospitals as disproportionate
                                share hospitals.
    Sec. 5137. Extension of period of applicability of enrollment mix
                                requirement to certain health maintenance
                                organizations providing services under
                                Dayton Area Health Plan.
    Sec. 5138. Extension of medicaid waiver for Tennessee Primary Care
                                Network.
    Sec. 5139. Waiver of application of medicaid enrollment mix requirement
                                to District of Columbia Chartered Health
                                Plan, Inc.
    Sec. 5140. Extension of Minnesota Prepaid Medicaid Demonstration
                                Project.
              Part III--Emergency Services to Undocumented Aliens

    Sec. 5141. Increase in Federal financial participation for emergency
                                medical assistance to undocumented aliens.
    Sec. 5142. Limiting Federal medicaid matching payment to bona fide
                                emergency services for undocumented aliens.
                       Part IV--Miscellaneous Provisions

    Sec. 5144. Increase in limit on Federal medicaid matching payments to
                                Puerto Rico and other territories.
    Sec. 5145. Criteria for making determinations of denial of Federal
                                medicaid matching payments to States.
    Sec. 5146. Renewal of unfunded demonstration project for low-income
                                pregnant women and children.
    Sec. 5147. Optional medicaid coverage of TB-related services for
                                certain PTB-infected individuals.
    Sec. 5148. Application of mammography certification requirements under
                                the medicaid program.
    Sec. 5149. Removal of sunset on extension of eligibility for working
                                families.
    Sec. 5150. Extension of moratorium on treatment of certain facilities
                                as institutions for mental diseases.
    Sec. 5150A. Treatment of certain clinics as federally-qualified health
                                centers.
    subchapter c--miscellaneous and technical corrections relating to obra-
                                      1990
    Sec. 5151. Effective date.
    Sec. 5152. Corrections relating to section 4402 (enrollment under group
                                health plans).
    Sec. 5153. Corrections relating to section 4501 (low-income medicare
                                beneficiaries).
    Sec. 5154. Corrections relating to section 4601 (child health).
    Sec. 5155. Corrections relating to section 4602 (outreach locations).
    Sec. 5156. Corrections relating to section 4604 (payment for hospital
                                services for children under 6 years of
                                age).
    Sec. 5157. Corrections relating to section 4703 (payment adjustments
                                for disproportionate share hospitals).
    Sec. 5158. Corrections relating to section 4704 (Federally-qualified
                                health centers).
    Sec. 5159. Corrections relating to section 4708 (substitute
                                physicians).
    Sec. 5160. Corrections relating to section 4711 (home and community
                                care for frail elderly).
    Sec. 5161. Corrections relating to section 4712 (community supported
                                living arrangements services).
    Sec. 5162. Correction relating to section 4713 (COBRA continuation
                                coverage).
    Sec. 5163. Correction relating to section 4716 (medicaid transition for
                                family assistance).
    Sec. 5164. Corrections relating to section 4723 (medicaid spenddown
                                option).
    Sec. 5165. Corrections relating to section 4724 (optional State
                                disability determinations).
    Sec. 5166. Correction relating to section 4732 (special rules for
                                health maintenance organizations).
    Sec. 5167. Corrections relating to section 4741 (home and community-
                                based waivers).
    Sec. 5168. Corrections relating to section 4744 (frail elderly
                                waivers).
    Sec. 5169. Corrections relating to section 4747 (coverage of HIV-
                                positive individuals).
    Sec. 5170. Correction relating to section 4751 (advance directives).
    Sec. 5171. Corrections relating to section 4752 (physicians' services).
    Sec. 5172. Corrections relating to section 4801 (nursing home reform).
    Sec. 5173. Other technical corrections.
    Sec. 5174. Corrections to designations of new provisions.
             Chapter 2--Universal Access to Childhood Immunizations

    Sec. 5181. Establishment of entitlement and monitoring programs with
                                respect to childhood immunizations.
       ``Subtitle 3--Entitlement and Monitoring Programs With Respect to
                            Childhood Immunizations

                         ``Part A--Entitlement Program

            ``Sec. 2151. Delivery to States of sufficient quantities of
                                pediatric vaccines.
            ``Sec. 2152. Entitlements.
            ``Sec. 2153. Voluntary participation of health care providers.
            ``Sec. 2154. Intrastate distribution of pediatric vaccines.
            ``Sec. 2155. General provisions.
            ``Sec. 2156. State option regarding immunization of additional
                                categories of children.
            ``Sec. 2157. State application for vaccines.
            ``Sec. 2158. Contracts with manufacturers of pediatric
                                vaccines.
            ``Sec. 2159. Certain administrative variations.
            ``Sec. 2160. List of pediatric vaccines; schedule for
                                administration.
            ``Sec. 2161. Childhood Immunization Trust Fund.
            ``Sec. 2162. Definitions.
            ``Sec. 2163. Termination of program.
        ``Part B--National System for Monitoring Immunization Status of
                                    Children

            ``Sec. 2171. Formula grants for State registries with respect
                                to monitoring.
            ``Sec. 2172. Registry data.
            ``Sec. 2173. General provisions.
            ``Sec. 2174. Application for grant.
            ``Sec. 2175. Determination of amount of allotment.
            ``Sec. 2176. Definitions.
            ``Sec. 2177. Authorization of appropriations.
     ``Part C--Funding for Other Purposes Regarding Childhood Immunizations

            ``Sec. 2181. Grants regarding Year 2000 health objectives.

    Sec. 5182. National Vaccine Injury Compensation Program amendments.
    Sec. 5183. Medicaid immunization provisions.
    Sec. 5184. Availability of medicaid payments for childhood vaccine
                                replacement programs.
    Sec. 5185. Healthy start for infants.
    Sec. 5186. Increase in authorization of appropriations for the Maternal
                                and Child Health Services Block Grant
                                Program.
    Sec. 5187. Miscellaneous technical corrections to Public Health Service
                                Act provisions.

                          CHAPTER 1--MEDICAID PROGRAM

                    Subchapter A--Program Savings Provisions

                           PART I--REPEAL OF MANDATE

    SEC. 5101. PERSONAL CARE SERVICES FURNISHED OUTSIDE THE HOME AS
                  OPTIONAL BENEFIT.

        (a) In General.--Section 1905(a) (42 U.S.C. 1396d(a)), as amended
    by section 5174(c)(1), is further amended--
                (1) in paragraph (7), by striking ``including personal care
            services'' and all that follows through ``nursing facility'';
                (2) in paragraph (23), by striking ``and'' at the end;
                (3) by redesignating paragraph (24) as paragraph (25); and
                (4) by inserting after paragraph (23) the following new
            paragraph:
                ``(24) personal care services furnished to an individual
            who is not an inpatient or resident of a nursing facility that
            are (A) authorized by a physician for the individual in
            accordance with a plan of treatment, (B) provided by an
            individual who is qualified to provide such services and who is
            not a member of the individual's family, (C) supervised by a
            registered nurse, and (D) furnished in a home or other
            location; and''.
        (b) Conforming Amendments.--(1) Section 1902(a)(10)(C)(iv) (42
    U.S.C. 1396a(a)(10)(C)(iv)), as amended by section 5174(c)(2)(A), is
    amended by striking ``through (23)'' and inserting ``through (24)''.
        (2) Section 1902(j) (42 U.S.C. 1396a(j)), as amended by section
    5174(c)(2)(B), is amended by striking ``through (24)'' and inserting
    ``through (25)''.
        (c) Effective Date.--The amendments made by subsections (a) and (b)
    shall take effect as if included in the enactment of section 4721(a) of
    OBRA-90.

                     PART II--OUTPATIENT PRESCRIPTION DRUGS

    SEC. 5106. PERMITTING PRESCRIPTION DRUG FORMULARIES UNDER STATE PLANS.

        (a) Elimination of Prohibition Against Use of Formularies.--
    Paragraph (54) of section 1902(a)(54) (42 U.S.C. 1396a(a)(54)) is
    amended to read as follows:
                ``(54) in the case of a State plan that provides medical
            assistance for covered outpatient drugs (as defined in section
            1927(k)), comply with the applicable requirements of section
            1927;''.
        (b) Standards for Formularies.--Section 1927(d) (42 U.S.C. 1396r-
    8(d)), as amended by sections 5107(a) and 5108(b)(4)(A)(iii), is
    amended--
                (1) by adding at the end of paragraph (1) the following new
            subparagraph:
                ``(C) In the case of a State that establishes a formulary
            in accordance with paragraph (5), the State may exclude
            coverage of a covered outpatient drug that is not included in
            the formulary.''; and
                (2) by inserting after paragraph (4) the following new
            paragraph:
                ``(5) Requirements for formularies.--A State may establish
            a formulary only if the following requirements are met:
                        ``(A) The formulary is established by a committee
                    consisting of physicians, pharmacists, and other
                    appropriate individuals appointed by the Governor of
                    the State (or, at the option of the State, the State's
                    drug use review board established under subsection
                    (g)(3)).
                        ``(B) Except as provided in subparagraph (C), the
                    formulary includes the covered outpatient drugs of any
                    manufacturer which has entered into and complies with
                    an agreement under subsection (a).
                        ``(C) The committee may exclude a covered
                    outpatient drug with respect to the treatment of a
                    specific disease or condition for an identified
                    population (if any) only if the committee finds, based
                    on the drug's labeling (or, in the case of a drug whose
                    prescribed use is not approved under the Federal Food,
                    Drug, and Cosmetic Act but is a medically accepted
                    indication, based on information from the appropriate
                    compendia described in subsection (k)(6)), that the
                    excluded drug does not have a significant, clinically
                    meaningful therapeutic advantage in terms of safety,
                    effectiveness, or clinical outcome of such treatment
                    for such population over other drugs included in the
                    formulary.
                        ``(D) With respect to a decision to exclude a
                    covered outpatient drug from the formulary or a
                    prescribed use of such a drug, the committee issues a
                    written explanation of its decision that is available
                    to the public, unless the decision was made at a
                    meeting of the committee which was open to the public.
                        ``(E) The manufacturer of the drug, and any person
                    affected by the decision, may obtain a reversal of the
                    committee's decision to exclude a covered outpatient
                    drug from the formulary under subparagraph (C) on the
                    ground that the decision was arbitrary and capricious,
                    in accordance with an appeals process that is
                    established by the State and that provides an
                    opportunity for judicial review of such decision.
                        ``(F) The State plan permits coverage of a drug
                    excluded from the formulary pursuant to a prior
                    authorization program that is consistent with paragraph
                    (4).
                        ``(G) The formulary meets such other requirements
                    as the Secretary may impose.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to calendar quarters beginning on or after October 1, 1993,
    without regard to whether or not regulations to carry out such
    amendments have been promulgated by such date.

    SEC. 5107. ELIMINATION OF SPECIAL EXEMPTION FROM PRIOR AUTHORIZATION
                  FOR NEW DRUGS.

        (a) In General.--Section 1927(d) (42 U.S.C. 1396r-8(d)), as amended
    by section 5108(b)(4)(A)(iii), is amended by striking paragraph (5).
        (b) Conforming Amendment.--Section 1927(d)(3) (42 U.S.C. 1396r-
    8(d)(3)) is amended by striking ``(except with respect'' and all that
    follows through ``of this paragraph)''.
        (c) Effective Date.--The amendments made by this section shall
    apply to calendar quarters beginning on or after October 1, 1993,
    without regard to whether or not regulations to carry out such
    amendments have been promulgated by such date.

    SEC. 5108. TECHNICAL CORRECTIONS RELATING TO SECTION 4401 OF OBRA-1990.

        (a) Section 1903, SSA.--Paragraph (10) of section 1903(i), as
    inserted by section 4401(a)(1)(B) of OBRA-1990, is amended to read as
    follows:
                ``(10) with respect to covered outpatient drugs unless
            there is a rebate agreement in effect under section 1927 with
            respect to such drugs or unless section 1927(a)(3) applies;''.
        (b) Section 1927, SSA.--(1) Section 1927(a) (42 U.S.C. 1396r-8(a))
    is amended--
                (A) in paragraph (1)--
                        (i) by amending the second sentence to read as
                    follows: ``Any such agreement entered into prior to
                    April 1, 1991, shall be deemed to have been entered
                    into on January 1, 1991, and the amount of the rebate
                    under such agreement shall be calculated as if the
                    agreement had been entered into on January 1, 1991.'',
                    and
                        (ii) in the third sentence, by striking ``March''
                    and inserting ``April'';
                (B) in paragraph (2)--
                        (i) by striking ``first'', and
                        (ii) by striking the period at the end and
                    inserting the following: ``, except that such paragraph
                    (and section 1903(i)(10)(A)) shall not apply to the
                    dispensing of such a drug before April 1, 1991, if the
                    Secretary determines that there were extenuating
                    circumstances with respect to the first calendar
                    quarter of 1991.'';
                (C) in paragraph (3), by striking ``single source'' and all
            that follows and inserting the following: ``covered outpatient
            drugs if--
                        ``(A) based on information provided by a
                    beneficiary's physician, the State has made a
                    determination that the availability of the drug is
                    essential to the health of the beneficiary under the
                    State plan, and the Secretary has reviewed and approved
                    such determination; and
                        ``(B) the drug has been given a rating of 1-A by
                    the Food and Drug Administration.'';
                (D) in paragraph (4)--
                                (i) by striking ``in compliance with'' and
                            inserting ``in effect under'', and
                                (ii) by striking ``coverage of the
                            manufacturer's drugs'' and inserting
                            ``ingredient costs of the manufacturer's
                            covered outpatient drugs covered''; and
                        (E) by adding at the end the following new
                    paragraph:
                ``(5) Application in certain states and territories.--
                        ``(A) Application in states operating under
                    demonstration projects.--In the case of any State which
                    is providing medical assistance to its residents under
                    a waiver granted under section 1115, the Secretary
                    shall require the State to meet the requirements of
                    section 1902(a)(54) and of this section in the same
                    manner as the State would be required to meet such
                    requirements if the State had in effect a plan approved
                    under this title.
                        ``(B) No application in commonwealths and
                    territories.--This section, and sections 1902(a)(54)
                    and 1903(i)(10), shall only apply to a State that is
                    one of the 50 States or the District of Columbia.''.
        (2) Section 1927(b) (42 U.S.C. 1396r-8(b)) is amended--
                (A) in paragraph (1)(A)--
                        (i) by striking ``(or periodically in accordance
                    with a schedule specified by the Secretary)'' and
                    inserting ``(or other period specified by the
                    Secretary)'', and
                        (ii) by inserting ``after December 31, 1990, for
                    which payment was made'' after ``dispensed'';
                (B) in paragraph (2)(A)--
                        (i) by striking ``calendar quarter'' and ``the
                    quarter'' and inserting ``rebate period'' and ``the
                    period'', respectively,
                        (ii) by striking ``dosage units'' and inserting
                    ``units of each dosage form and strength'', and
                        (iii) by inserting ``after December 31, 1990, for
                    which payment was made'' after ``dispensed'';
                (C) in paragraph (3)(A)--
                        (i) in clause (i), by striking ``quarter'' each
                    place it appears and inserting ``calendar quarter or
                    other rebate period under the agreement'',
                        (ii) in clause (i), by striking the open
                    parenthesis before ``for'' and the close parenthesis
                    after ``drugs'',
                        (iii) in clause (i), by striking ``subsection
                    (c)(2)(B)) for covered outpatient drugs'' and inserting
                    ``subsection (c)(1)(C) for each covered outpatient
                    drug'', and
                        (iv) in clause (ii), by inserting a comma after
                    ``this section'' and after ``1990'';
                (D) in paragraph (3)(B)--
                        (i) by striking ``$100,000'' and inserting
                    ``$10,000'',
                        (ii) by striking ``if the wholesaler'' and
                    inserting ``for each instance in which the
                    wholesaler'',
                        (iii) by inserting ``in response to such a
                    request'' after ``false information'', and
                        (iv) by striking ``(with respect to amounts of
                    penalties or additional assessments)'';
                (E) in paragraph (3)(C)--
                        (i) in clause (i), by striking ``the penalty'' and
                    inserting ``the rebate next required to be paid'',
                        (ii) in clause (i), by striking ``and such amount
                    shall be paid to the Treasury, and, if'' and inserting
                    ``. If'',
                        (iii) in clause (ii), by inserting ``under
                    subparagraph (A)'' after ``provides false
                    information'', and
                        (iv) in clause (ii), by striking ``Such civil money
                    penalties are'' and inserting ``Any such civil money
                    penalty shall be'';
                (F) in paragraph (3)(D), by striking ``wholesaler,'' the
            first place it appears and inserting ``wholesaler or the''; and
                (G) in paragraph (4)(B)(iii), by adding at the end the
            following: ``In the case of such a termination, a State may
            terminate coverage of the drugs affected by such termination as
            of the effective date of such termination without providing any
            advance notice otherwise required by regulation.''.
        (3) Section 1927(c) (42 U.S.C. 1396r-8(c)) is amended--
                (A) in paragraph (1) in the matter preceding subparagraph
            (A)--
                        (i) by striking the first sentence,
                        (ii) in the second sentence, by striking ``Except
                    as otherwise provided'' and all that follows through
                    ``the Secretary)'' and inserting the following: ``For
                    purposes of this section, the amount of the rebate
                    under this subsection for a rebate period'', and
                        (iii) by inserting ``(except as provided in
                    subsection (b)(3)(C) and paragraph (2))'' after ``drugs
                    shall'';
                (B) in paragraph (1)(A), by striking ``the quarter (or
            other period)'' and inserting ``the rebate period'';
                (C) in subparagraph (C)--
                        (i) by striking ``For purposes of this paragraph''
                    and inserting ``Best price defined.--For purposes of
                    this section'',
                        (ii) by inserting ``provider,'' after
                    ``retailer,'', and
                        (iii) by striking the semicolon at the end and
                    inserting a period; and
                (D) by striking subparagraph (D) and inserting the
            following:
                        ``(D) Use of estimated best prices during initial
                    year of availability of drug.--If the Secretary
                    determines that a manufacturer cannot determine the
                    best price for rebate periods during the first year in
                    which an agreement is in effect until after the end of
                    the year, as part of the agreement the Secretary may
                    require the manufacturer to estimate the best price for
                    rebate periods during the year and provide an
                    adjustment to the rebate paid to the State to take into
                    account the difference (if any) between the best price
                    and the estimated best price.''.
        (4)(A) Section 1927(d) (42 U.S.C. 1396r-8(d)) is amended--
                (i) in paragraph (2)--
                        (I) in subparagraph (A), by inserting ``or loss''
                    after ``gain'',
                        (II) by striking subparagraph (I), and
                        (III) by redesignating subparagraphs (J) and (K) as
                    subparagraphs (I) and (J);
                (ii) in paragraph (3)--
                        (I) by striking ``described in paragraph (2)'', and
                        (II) by inserting ``described in paragraph (2)''
                    after ``classes of drugs,'';
                (iii) by striking paragraph (4) and by redesignating
            paragraphs (5) through (7) as paragraphs (4) through (6);
                (iv) in paragraph (6), as so redesignated, by striking
            ``provided'' and inserting ``if''; and
                (v) by striking the second sentence of paragraph (6), as so
            redesignated, and paragraph (8) and inserting the following:
                ``(7) Construction with respect to fraud and abuse.--
            Nothing in this section shall be construed to restrict the
            authority of a State to apply sanctions under this Act against
            any person for fraud or abuse.''.
        (B) Section 1927(d)(4), as redesignated by subparagraph (A)(iii),
    shall first apply to drugs dispensed on or after July 1, 1991.
        (5)(A) Section 1927(f) (42 U.S.C. 1396r-8(f)) is amended to read as
    follows:
        ``(f) No Reductions in Pharmacy Reimbursement Limits.--
                ``(1) In general.--During the period beginning on November
            5, 1990, and ending on December 31, 1994--
                        ``(A) a State may not reduce the amount paid by the
                    State under this title with respect to the ingredient
                    cost of a covered outpatient drug or the dispensing fee
                    for such a drug below the amount in effect as of
                    November 5, 1990, and
                        ``(B) the Secretary may not change the regulations
                    in effect on November 5, 1990, governing the amounts
                    described in subparagraph (A) which are eligible for
                    Federal financial participation, to reduce the
                    reimbursement limits described in such regulations.
                ``(2) Construction.--If the Secretary notified a State
            before November 5, 1990, that its payment amounts under this
            title with respect to the ingredient cost of a covered
            outpatient drug or the dispensing fee for such a drug were in
            excess of those permitted under regulations in effect on such
            date, paragraph (1)(B) shall not be construed as preventing a
            State from reducing payment amounts or dispensing fee in order
            to comply with such regulations.''.
        (B) Not later than April 1, 1994, the Secretary of Health and Human
    Services shall establish an upper limit on the amount of payment which
    is eligible for Federal financial participation under title XIX of the
    Social Security Act for each multiple source drug (as defined in
    section 1927(k)(7)(A)(i) of such Act) for which the Food and Drug
    Administration has rated at least 3 formulations of such drug as
    therapeutically and pharmaceutically equivalent, regardless of whether
    all the formulations of such drug are rated as so equivalent. In
    establishing such a limit for a drug, the Secretary shall take into
    account only those formulations of the drug which the Food and Drug
    Administration has rated as therapeutically and pharmaceutically
    equivalent.
        (6) Section 1927(g) (42 U.S.C. 1396r-8(g)) is amended--
                (A) by amending paragraph (1) to read as follows:
                ``(1) Requirement for drug use review program.--Each State
            shall provide, by not later than January 1, 1993, for a drug
            use review program for covered outpatient drugs (other than
            drugs dispensed to residents of nursing facilities) that--
                        ``(A) meets the requirements of paragraph (2), and
                        ``(B) is intended to assure that prescriptions for
                    such drugs are appropriate, medically necessary, and
                    not likely to lead to adverse medical results.'';
                (B) in paragraph (2)--
                        (i) by amending the matter before subparagraph (A)
                    to read as follows:
                ``(2) Requirements.--'',
                        (ii) by amending subparagraph (A) to read as
                    follows:
                        ``(A) Prospective drug use review.--Each drug use
                    review program shall provide for a review of drug
                    therapy before each prescription is filled or delivered
                    to an individual receiving benefits under this title
                    (including counseling by pharmacists) consistent with
                    standards established by the Secretary. Nothing in this
                    paragraph shall be construed as requiring a pharmacist
                    to provide consultation when an individual receiving
                    benefits under this title or caregiver of such
                    individual refuses such consultation.'',
                        (iii) in subparagraph (C)--
                                (I) by striking ``Application of
                            standards.--'' and inserting ``Standards.--
                            (i)'',
                                (II) by striking ``and literature referred
                            to in subsection (1)(B)'' and inserting
                            ``described in clause (ii)'',
                                (III) by striking ``including but not
                            limited to'' and inserting ``. Such assessment
                            shall include'',
                                (IV) by striking ``abuse/misuse and, as
                            necessary, introduce remedial strategies,'' and
                            inserting ``abuse or misuse and introduce
                            remedial strategies'', and
                                (V) by adding at the end the following new
                            clause:
                        ``(ii) The compendia described in this clause are
                    the American Hospital Formulary Service Drug
                    Information, the United States Pharmacopeia-Drug
                    Information, and the American Medical Association Drug
                    Evaluations.'', and
                        (iv) by amending subparagraph (D) to read as
                    follows:
                        ``(D) Educational program.--The program shall
                    educate (directly or by contract) pharmacists,
                    physicians, and other individuals prescribing or
                    dispensing covered outpatient drugs under the State
                    plan on common drug therapy problems in order to
                    improve prescribing or dispensing practices.'';
                (C) in paragraph (3)--
                        (i) in subparagraph (A), by striking
                    ``(hereinafter'' and all that follows and inserting
                    ``(in this paragraph referred to as the `DUR
                    Board').'',
                        (ii) in subparagraph (B), by striking ``51
                    percent'' and all that follows and inserting ``50
                    percent licensed and actively practicing physicians and
                    at least 1/3 but not more than 50 percent licensed and
                    actively practicing pharmacists.'',
                        (iii) by amending subparagraph (C) to read as
                    follows:
                        ``(C) Responsibilities.--The responsibilities of
                    the DUR Board shall include the following:
                                ``(i) Carrying out retrospective drug use
                            review pursuant to paragraph (2)(B).
                                ``(ii) Establishing and applying standards
                            for drug use review described in paragraph
                            (2)(C).
                                ``(iii) Implementing educational programs
                            described in paragraph (2)(D).
                                ``(iv) Conducting ongoing evaluations of
                            the effectiveness of its programs and
                            activities in improving the quality and safety
                            of drug therapy for individuals receiving
                            benefits under the State plan.''; and
                (D) by amending subparagraph (D) to read as follows:
                ``(4) Annual report.--Each State shall submit a report each
            year to the Secretary on the nature and scope of the drug use
            review program under this subsection. Such report shall include
            an estimate of cost savings resulting from operation of such
            program.''.
        (7) Section 1927(h) (42 U.S.C. 1396r-8(h)) is amended to read as
    follows:
        ``(h) Encouraging Electronic Claims Management.--The Secretary
    shall encourage each single State agency under this title to establish,
    as its principal means of processing claims for covered outpatient
    drugs, a point-of-sale electronic claims management system for the
    purpose of verifying eligibility, transmitting data on claims, and
    assisting pharmacists and other authorized persons in applying for and
    receiving payment under the State plan.''.
        (8) Section 1927(i) (42 U.S.C. 1396r-8(i)) is amended to read as
    follows:
        ``(i) Annual Report on Rebate Program.--Not later than May 1 of
    each year, the Secretary shall submit to the Committee on Finance of
    the Senate, the Committee on Energy and Commerce of the House of
    Representatives, and the Committee on Aging of the Senate a report on
    the operation of the rebate agreements required for covered outpatient
    drugs under this section in the preceding fiscal year, and shall
    include in the report such information in addition to the information
    required to be reported under section 601(d) of the Veterans Health
    Care Act of 1992 as the Secretary considers appropriate.''.
        (9) Section 1927(j) (42 U.S.C. 1396r-8(j)) is amended to read as
    follows:
        ``(j) Exemption From Certain Requirements for Certain Health
    Maintenance Organizations and Hospitals.--
                ``(1) Certain health maintenance organizations and
            pharmacies.--The requirements of subsections (g) and (h) shall
            not apply with respect to covered outpatient drugs dispensed
            by--
                        ``(A) an entity which receives payment under a
                    prepaid capitation basis or under any other risk basis
                    in accordance with section 1903(m)(2)(A) for services
                    provided under the State plan; or
                        ``(B) a pharmacy that is owned or operated by a
                    qualified health maintenance organization (as defined
                    in section 1310(d) of the Public Health Service Act)
                    that operates its own prospective drug use review
                    program.
                ``(2) Hospitals with independent formulary systems.--
                        ``(A) In general.--The requirements of subsections
                    (g) and (h) shall not apply with respect to covered
                    outpatient drugs dispensed by a hospital providing
                    medical assistance under the State plan that dispenses
                    such drugs under a drug formulary system.
                        ``(B) Application of state formulary.--Nothing in
                    subparagraph (A) shall be construed to permit payment
                    to be made under the State plan for a covered
                    outpatient drug that is included in a drug formulary
                    but that is not included in the State formulary under
                    subsection (d)(5).
                ``(3) Construction in determining best price.--Nothing in
            this subsection shall be construed to exclude any covered
            outpatient drugs subject to the provisions of this subsection
            from the determination of the best price (as defined in
            subsection (c)(1)(C)) for such drugs.''.
        (10) Section 1927(k) (42 U.S.C. 1396r-8(k)) is amended--
                (A) in paragraph (1), by striking ``calendar quarter'' and
            inserting ``rebate period'';
                (B) in paragraph (2)--
                        (i) in the matter before clause (i) of subparagraph
                    (A), by striking ``paragraph (5)'' and inserting
                    ``subparagraph (D)'',
                        (ii) by striking ``, and'' at the end of
                    subparagraph (A),
                        (iii) by striking the period at the end of
                    subparagraph (C) and inserting ``; and'', and
                        (iv) by adding at the end the following new
                    subparagraph:
                        ``(D) a drug which may be sold without a
                    prescription (commonly referred to as an `over-the-
                    counter drug'), if the drug is prescribed by a
                    physician (or other person authorized to prescribe
                    under State law).'';
                (C) in paragraph (3)--
                        (i) in subparagraph (E), by striking ``****
                    emergency room visits'',
                        (ii) in subparagraph (F), by striking ``sevices''
                    and inserting ``services'', and
                        (iii) in subparagraph (H), by inserting
                    ``services'' after ``dialysis'';
                (D) by striking paragraph (4);
                (E) by amending paragraph (5) to read as follows:
                ``(5) Manufacturer.--The term `manufacturer' means, with
            respect to a covered outpatient drug,--
                        ``(A) the entity (if any) that both manufactures
                    and distributes the drug, or
                        ``(B) if no such entity exists, the entity that
                    distributes the drug.
            Such term does not include a wholesale distributor of the drug
            that does not hold a National Drug Code number for the drug or
            a retail pharmacy licensed under State law.'';
                (F) in paragraph (6), by striking ``, which appears'' and
            all that follows and inserting ``which is accepted by any of
            the compendia described in subsection (g)(2)(C)(ii).'';
                (G) in paragraph (7)--
                        (i) in subparagraph (A)(i), by striking ``calendar
                    quarter'' and inserting ``rebate period'',
                        (ii) in subparagraph (A)(i), by striking
                    ``paragraph (5)'' and inserting ``paragraph (2)(D)'',
                        (iii) in subparagraph (A)(ii), by inserting ``or
                    product licensing application'' after ``application'',
                        (iv) in subparagraph (C)(i), by striking
                    ``pharmaceuutically'' and inserting
                    ``pharmaceutically'', and
                        (v) in subparagraph (C)(iii), by striking ``,
                    provided that'' and inserting ``and''; and
                (H) by redesignating paragraph (8) as paragraph (9) and by
            inserting after paragraph (7) the following new paragraph:
                ``(8) Rebate period.--The term `rebate period' means, with
            respect to an agreement under subsection (a), a calendar
            quarter or other period specified with respect to the agreement
            under subsection (b)(1)(A) for the payment of rebates.''.
        (d) Funding.--Section 4401(b)(2) of OBRA-1990 is amended by
    striking ``75 percent,'' and all that follows and inserting ``75
    percent.''.
        (e) Demonstration Projects.--Section 4401(c)(1) of OBRA-1990 is
    amended--
                (A) in subparagraph (A), by striking ``10'' and inserting
            ``5''; and
                (B) in subparagraph (C), by striking ``regiment'' and
            inserting ``regimen''.
        (f) Studies.--Section 4401(d) of OBRA-1990 is amended--
                (1) in paragraph (1)(A), by striking ``other institutional
            facilities, and managed care plans'' and inserting ``nursing
            facilities, intermediate care facilities for the mentally
            retarded, and health maintenance organizations'';
                (2) in paragraph (1)(B), by striking ``under this
            subsection'' and inserting ``under this paragraph'';
                (3) in paragraph (1)(B)(i), by striking ``under this
            section'' and inserting ``under section 1927 of the Social
            Security Act'';
                (4) in paragraph (1)(B)(ii)--
                        (A) by striking ``drug use review'' the second
                    place it appears and inserting ``the type of drug use
                    review that is'', and
                        (B) by striking ``under this section'' and
                    inserting ``under such section'';
                (5) in paragraph (1)(B)(iii), by striking ``under this
            title'' and inserting ``under title XIX of the Social Security
            Act'';
                (6) in paragraph (1)(C)--
                        (A) by striking ``May 1, 1991'' and inserting ``May
                    1, 1992'', and
                        (B) by striking ``hereafter'';
                (7) in paragraph (2), by striking ``the Committees on Aging
            of the Senate and House of Representatives an annual report''
            and inserting ``the Committee on Aging of the Senate a
            report'';
                (8) in paragraph (3)--
                        (A) in subparagraph (A), by striking ``, acting in
                    consultation with the Comptroller General,'', and
                        (B) in subparagraph (B)--
                                (i) by striking ``December 31, 1991, the
                            Secretary and the Comptroller General'' and
                            inserting ``June 1, 1993, the Secretary'', and
                                (ii) by striking ``the Committees on Aging
                            of the Senate and the House of
                            Representatives'' and inserting ``the Committee
                            on Aging of the Senate'';
                (9) in paragraph (4)(A), by striking ``each'' and by
            striking the semicolon and inserting a comma; and
                (10) by striking paragraphs (5) and (6).

      PART III--RESTRICTIONS ON DIVESTITURE OF ASSETS AND ESTATE RECOVERY

    SEC. 5111. TRANSFER OF ASSETS.

        (a) Period of Ineligibility.--
                (1) Extending look-back period to 36 months.--Section
            1917(c)(1) (42 U.S.C. 1396p(c)(1)) is amended by striking ``30-
            month period'' and inserting ``36-month period''.
                (2) Eliminating 30-month limit on period of
            ineligibility.--The second sentence of such section is amended
            by striking ``equal to'' and all that follows and inserting the
            following: ``equal to--
                ``(A) the total uncompensated value of the resources so
            transferred; divided by
                ``(B) the average monthly cost, to a private patient at the
            time of the application, of nursing facility services in the
            State or, at State option, in the community in which the
            individual is institutionalized.''.
                (3) Cumulative periods of ineligibility in the case of
            multiple transfers.--Such sentence is further amended by
            inserting ``(or, in the case of a transfer which occurs during
            a period of ineligibility attributable to a previous transfer,
            the first month after the end of all periods of ineligibility
            attributable to any previous transfer)'' after ``shall begin
            with the month in which such resources were transferred''.
        (b) Criteria for Undue Hardship Exception.--Section 1917(c)(2)(D)
    (42 U.S.C. 1396p(c)(2)(D)) is amended to read as follows:
                ``(D) the State agency determines, under procedures
            established by the State (in accordance with standards
            specified by the Secretary) that the denial of eligibility
            would work an undue hardship (in accordance with criteria
            established by the Secretary).''.
        (c) Treatment of Jointly Held Assets.--Section 1917(c) (42 U.S.C.
    1936p(c)) is further amended by adding at the end the following new
    paragraph:
        ``(6) For purposes of this subsection, in the case of an asset held
    by an individual in common with another person or persons in a joint
    tenancy or a similar arrangement, the asset (or the affected portion
    thereof) shall be considered to be transferred by such individual when
    any action is taken, either by such individual or by any other person,
    that reduces or eliminates such individual's ownership or control of
    such asset.''.
        (d) Medicaid Qualifying Trusts.--Section 1902(k) (42 U.S.C.
    1396a(k)) is amended to read as follows:
        ``(k) Treatment of Trust Amounts.--
                ``(1) In general.--For purposes of determining an
            individual's eligibility for or amount of benefits under a
            State plan under this title, subject to paragraph (4), the
            following rules shall apply to a trust (which term includes,
            for purposes of this subsection, any similar legal instrument
            or device, such as an annuity) established by such individual:
                        ``(A) Revocable trusts.--In the case of a revocable
                    trust--
                                ``(i) the corpus of the trust shall be
                            considered resources available to the
                            individual,
                                ``(ii) payments from the trust to or for
                            the benefit of the individual shall be
                            considered income of the individual, and
                                ``(iii) any other payments from the trust
                            shall be considered a transfer of assets by the
                            individual subject to section 1917(c).
                        ``(B) Irrevocable trusts which may benefit
                    grantor.--In the case of an irrevocable trust, if there
                    are any circumstances under which payment from the
                    trust could be made to or for the benefit of the
                    individual--
                                ``(i) the corpus of the trust (or that
                            portion of the corpus from which, or from the
                            increase whereof, payment to the individual
                            could be made) shall be considered resources
                            available to the individual, and payments from
                            that portion of the corpus (or increase)--
                                        ``(I) to or for the benefit of the
                                    individual, shall be considered income
                                    of the individual, and
                                        ``(II) for any other purpose, shall
                                    be considered a transfer of assets by
                                    the individual subject to the
                                    provisions of section 1917(c); and
                                ``(ii) any portion of the trust from which
                            (or from the income whereof) no payment could
                            under any circumstances be made to the
                            individual shall be considered, as of the date
                            of establishment of the trust (or, if later,
                            the date on which payment to the individual was
                            foreclosed), a transfer of assets by the
                            individual subject to section 1917(c), and
                            payments from such portion of the trust after
                            such date shall be disregarded.
                        ``(C) Irrevocable trusts which cannot benefit
                    grantor.--In the case of an irrevocable trust, if no
                    payment may be made from the trust under any
                    circumstances to or for the benefit of the individual--
                                ``(i) the corpus of the trust shall be
                            considered, as of the date of establishment of
                            the trust (or, if later, the date on which
                            payment to the individual was foreclosed), a
                            transfer of assets subject to section 1917(c),
                            and
                                ``(ii) payments from the trust after the
                            date specified in clause (i) shall be
                            disregarded.
                ``(2) Determination of grantor.--
                        ``(A) Treatment of acts by individual and others.--
                    For purposes of this subsection, an individual shall be
                    considered to have established a trust if--
                                ``(i) the individual (or the individual's
                            spouse), or a person (including a court or
                            administrative body) with legal authority to
                            act in place of or on behalf of such individual
                            (or spouse), or any person (including any court
                            or administrative body) acting at the direction
                            or upon the request of such individual (or
                            spouse), established (other than by will) such
                            a trust, and
                                ``(ii) assets of the individual (as defined
                            in subparagraph (B)) were used to form all or
                            part of the corpus of such trust.
                        ``(B) Assets.--For purposes of this paragraph,
                    assets of an individual include all income and
                    resources of the individual and of the individual's
                    spouse, including any income or resources which the
                    individual (or spouse) is entitled to but does not
                    receive because of action by the individual (or
                    spouse), by a person (including a court or
                    administrative body) with legal authority to act in
                    place of or on behalf of such individual (or spouse),
                    or by any person (including any court or administrative
                    body) acting at the direction or upon the request of
                    such individual (or spouse).
                        ``(C) Trusts containing assets of more than one
                    individual.--In the case of a trust whose corpus
                    includes assets of an individual (as determined
                    pursuant to subparagraph (A)) and assets of any other
                    person or persons, the provisions of this subsection
                    shall apply to the portion of the trust attributable to
                    the assets of the individual.
                ``(3) Application; relation to other provisions.--Subject
            to paragraph (4), this subsection shall apply without regard
            to--
                        ``(A) the purposes for which the trust is
                    established,
                        ``(B) whether the trustees have or exercise any
                    discretion under the trust,
                        ``(C) any restrictions on when or whether
                    distributions may be made from the trust, or
                        ``(D) any restrictions on the use of distributions
                    from the trust.
                ``(4) Exceptions and hardship waiver.--
                        ``(A) Exception for certain trusts.--This
                    subsection shall not apply to any of the following
                    trusts:
                                ``(i) A trust established for the benefit
                            of a disabled individual (as determined under
                            section 1614(a)(3)) by a parent, grandparent,
                            or other representative payee of the
                            individual.
                                ``(ii) A trust established in a State for
                            the benefit of an individual if--
                                        ``(I) the trust is composed only of
                                    pension, Social Security, and other
                                    income to the individual (and
                                    accumulated income in the trust),
                                        ``(II) the State will receive any
                                    amounts remaining in the trust upon the
                                    death of the individual, and
                                        ``(III) the State makes medical
                                    assistance available to individuals
                                    described in section
                                    1902(a)(10)(A)(ii)(V), but does not
                                    make such assistance available to any
                                    group of individuals under section
                                    1902(a)(10)(C).
                        ``(B) Special treatment of annuities.--In this
                    subsection, the term `trust' includes an annuity only
                    to such extent and in such manner as the Secretary
                    specifies.
                        ``(C) Hardship waiver.--The State agency shall
                    establish procedures (in accordance with standards
                    specified by the Secretary) under which the agency
                    waives the application of this subsection with respect
                    to an individual if the individual establishes (under
                    criteria established by the Secretary) that such
                    application would work an undue hardship on the
                    individual.''.
        (e) Effective Date.--(1) The amendments made by this section shall
    apply, except as provided in this subsection, to payments under title
    XIX of the Social Security Act for calendar quarters beginning on or
    after October 1, 1993, without regard to whether or not final
    regulations to carry out such amendments have been promulgated by such
    date.
        (2) The amendments made by this section shall not apply--
                (A) to medical assistance provided for services furnished
            before October 1, 1993,
                (B) with respect to resources disposed of before May 11,
            1993,
                (C) with respect to trusts established before May 11, 1993,
            or
                (D) with respect to inter-spousal transfers.

    SEC. 5112. MEDICAID ESTATE RECOVERIES.

        (a) Requiring Establishment of Estate Recovery Programs.--
                (1) In general.--Section 1902(a)(51) (42 U.S.C.
            1396a(a)(51)) is amended by striking ``and (B)'' and inserting
            ``(B) provide for an estate recovery program that meets the
            requirements of section 1917(b)(1), and (C)''.
                (2) Requirements for estate recovery programs.--Section
            1917(b) (42 U.S.C. 1396p(b)) is amended--
                        (A) in paragraph (1)--
                                (i) by striking ``(b)(1)'' and inserting
                            ``(2)'', and
                                (ii) by striking ``(a)(1)(B)'' and
                            inserting ``(a)(1)(B)(i)'';
                        (B) in paragraph (2), by striking ``(2) Any
                    adjustment or recovery under'' and inserting ``(3) Any
                    adjustment or recovery under an estate recovery program
                    under''; and
                        (C) by inserting before paragraph (2), as
                    designated by subparagraph (A), the following:
        ``(b)(1) For purposes of section 1902(a)(51)(B), the requirements
    for an estate recovery program of a State are as follows:
                ``(A) The program provides for identifying and tracking
            (and, at the option of the State, preserving) resources
            (whether excluded or not) of individuals who are furnished any
            of the following long-term care services for which medical
            assistance is provided under this title:
                        ``(i) Nursing facility services.
                        ``(ii) Home and community-based services (as
                    defined in section 1915(d)(5)(C)(i)).
                        ``(iii) Services described in section 1905(a)(14)
                    (relating to services in an institution for mental
                    diseases).
                        ``(iv) Home and community care provided under
                    section 1929.
                        ``(v) Community supported living arrangements
                    services provided under section 1930.
                ``(B) The program provides for promptly ascertaining--
                        ``(i) when such an individual dies;
                        ``(ii) in the case of such an individual who was
                    married at the time of death, when the surviving spouse
                    dies; and
                        ``(iii) at the option of the State, cases in which
                    adjustment or recovery may not be made at the time of
                    death because of the application of paragraph (3)(A) or
                    paragraph (3)(B).
                ``(C)(i) The program provides for the collection consistent
            with paragraph (3) of an amount (not to exceed the amount
            described in clause (ii)) from--
                        ``(I) the estate of the individual;
                        ``(II) in the case of an individual described in
                    subparagraph (B)(ii), from the estate of the surviving
                    spouse; or
                        ``(III) at the option of the State, in a case
                    described in subparagraph (B)(iii), from the
                    appropriate person.
                ``(ii) The amount described in this clause is the amount of
            medical assistance correctly paid under this title for long-
            term care services described in subparagraph (A) furnished on
            behalf of the individual.''.
        (b) Hardship Waiver.--Section 1917(b) (42 U.S.C. 1396p(b)) is
    further amended by adding at the end the following new paragraph:
        ``(4) The State agency shall establish procedures (in accordance
    with standards specified by the Secretary) under which the agency
    waives the application of this subsection if such application would
    work an undue hardship (in accordance with criteria established by the
    Secretary).''.
        (c) Definition of Estate.--Section 1917(b) (42 U.S.C. 1396(b)) is
    further amended by adding at the end the following new paragraph:
        ``(5) For purposes of this section, the term `estate', with respect
    to a deceased individual, includes all real and personal property and
    other assets in which the individual had any legally cognizable title
    or interest at the time of his death, including such assets conveyed to
    a survivor, heir, or assign of the deceased individual through joint
    tenancy, survivorship, life estate, living trust, or other
    arrangement.''.
        (d) Effective Date.--
                (1)(A) The amendments made by subsections (a) and (b) apply
            (except as provided under subparagraph (B)) to payments under
            title XIX of the Social Security Act for calendar quarters
            beginning on or after October 1, 1993, without regard to
            whether or not final regulations or standards to carry out such
            amendments have been promulgated by such date.
                (B) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act which the Secretary
            of Health and Human Services determines requires State
            legislation (other than legislation appropriating funds) in
            order for the plan to meet the additional requirements imposed
            by the amendments made by subsections (a) and (b), the State
            plan shall not be regarded as failing to comply with the
            requirements of such title solely on the basis of its failure
            to meet these additional requirements before the first day of
            the first calendar quarter beginning after the close of the
            first regular session of the State legislature that begins
            after the date of the enactment of this Act. For purposes of
            the previous sentence, in the case of a State that has a 2-year
            legislative session, each year of such session shall be deemed
            to be a separate regular session of the State legislature.
                (2) The amendments made by this section shall not apply to
            individuals who died before October 1, 1993.

    SEC. 5113. CLOSING LOOPHOLE PERMITTING WEALTHY INDIVIDUALS TO QUALIFY
                  FOR MEDICAID.

        (a) In General.--Section 1902(r)(2) (42 U.S.C. 1396a(r)(2)) is
    amended by adding at the end the following:
        ``(C)(i) Notwithstanding subparagraph (A), except as provided in
    clause (ii), a State plan may not provide pursuant to this paragraph
    for disregarding any assets--
                ``(I) to the extent that payments are made under a long-
            term care insurance policy; or
                ``(II) because an individual has received (or is entitled
            to receive) benefits for a specified period of time under a
            long-term care insurance policy.
        ``(ii) Clause (i) shall not apply to State plan provisions that are
    approved as of May 14, 1993.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect on the date of the enactment of this Act.

     PART IV--IMPROVEMENT IN IDENTIFICATION AND COLLECTION OF THIRD PARTY
                                    PAYMENTS

    SEC. 5116. LIABILITY OF THIRD PARTIES TO PAY FOR CARE AND SERVICES.

        (a) Liability of ERISA Plans.--(1) Section 1902(a)(25)(A) (42
    U.S.C. 1396a(a)(25)(A)) is amended by striking ``insurers)'' and
    inserting ``insurers and group health plans (as defined in section
    607(1) of the Employee Retirement Income Security Act of 1974) and
    including a service benefit plan and a health maintenance
    organization)''.
        (2) Section 1903(o) of such Act (42 U.S.C. 1396b(o)) is amended by
    striking ``regulation)'' and inserting ``regulation and including a
    group health plan (as defined in section 607(1) of the Employee
    Retirement Income Security Act of 1974)), a service benefit plan, and a
    health maintenance organization''.
        (b) Requiring State to Prohibit Insurers From Taking Medicaid
    Status Into Account.--Section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) is
    amended--
                (1) by striking ``and'' at the end of subparagraph (F);
                (2) by adding ``and'' at the end of subparagraph (G); and
                (3) by adding after subparagraph (G) the following new
            subparagraph:
                        ``(H) that the State prohibits any health insurer
                    (including a group health plan, as defined in section
                    607(1) of the Employee Retirement Income Security Act
                    of 1974, a service benefit plan, and a health
                    maintenance organization), in enrolling an individual
                    or in making any payments for benefits to the
                    individual or on the individual's behalf, from taking
                    into account that the individual is eligible for or is
                    provided medical assistance under a State plan;''.
        (c) State Right to Subrogation.--Section 1902(a)(25) (42 U.S.C.
    1396a(a)(25)), as amended by subsection (b), is further amended--
                (1) by striking ``and'' at the end of subparagraph (G);
                (2) by adding ``and'' at the end of subparagraph (H); and
                (3) by adding after subparagraph (H) the following new
            subparagraph:
                        ``(I) that to the extent that payment has been made
                    under the State plan for medical assistance in any case
                    where a third party has a legal liability to make
                    payment for such assistance, the State is subrogated to
                    the right of any other party to payment for such
                    assistance;''.
        (d) Effective Date.--(1) Except as provided in paragraph (2), the
    amendments made by subsections (a)(1), (b), and (c) shall apply to
    calendar quarters beginning on or after October 1, 1993, without regard
    to whether or not final regulations to carry out such amendments have
    been promulgated by such date.
        (2) In the case of a State plan for medical assistance under title
    XIX of the Social Security Act which the Secretary of Health and Human
    Services determines requires State legislation (other than legislation
    appropriating funds) in order for the plan to meet the additional
    requirements imposed by the amendments made by subsections (a) and (b),
    the State plan shall not be regarded as failing to comply with the
    requirements of such title solely on the basis of its failure to meet
    these additional requirements before the first day of the first
    calendar quarter beginning after the close of the first regular session
    of the State legislature that begins after the date of the enactment of
    this Act. For purposes of the previous sentence, in the case of a State
    that has a 2-year legislative session, each year of such session shall
    be deemed to be a separate regular session of the State legislature.
        (3) The amendment made by subsection (a)(2) shall apply to items
    and services furnished on or after October 1, 1993.

    SEC. 5117. HEALTH COVERAGE CLEARINGHOUSE.

        (a) In General.--The Social Security Act is amended by adding at
    the end the following new title:

                   ``TITLE XXI--HEALTH COVERAGE CLEARINGHOUSE

                        ``establishment of clearinghouse

        ``Sec. 2101. (a) In General.--The Secretary shall establish and
    operate a Health Coverage Clearinghouse (in this title referred to as
    the `Clearinghouse') for the purpose of identifying, for beneficiaries
    of a covered health program (as defined in subsection (c)), third
    parties (which may include a covered health program) which may be
    liable for payment for health care items and services furnished to such
    beneficiaries under such program.
        ``(b) Director.--The Clearinghouse shall be headed by a Director
    (in this title referred to as the `Director') appointed by the
    Secretary.
        ``(c) Covered Health Program Defined.--In this title, the term
    `covered health program' means any of the following under which payment
    is made for health care items or services furnished to a beneficiary:
                ``(1) The medicare program under title XVIII.
                ``(2) A State plan for medical assistance under title XIX
            (including a State plan operating under a Statewide waiver
            under section 1115).
                ``(3) The Indian Health Service and any program under the
            Indian Health Care Improvement Act.
                ``(4) A State program under title V that provides payment
            for items or services.
        ``(d) Other Definitions.--In this title:
                ``(1) The term `administrator' means, with respect to the
            covered health program described in--
                        ``(A) subsection (c)(1), the Administrator of the
                    Health Care Financing Administration;
                        ``(B) subsection (c)(2), the single State agency
                    referred to in section 1902(a)(5);
                        ``(C) subsection (c)(3), the Director of the Indian
                    Health Service; and
                        ``(D) subsection (c)(4), the State agency receiving
                    funds under title V.
                ``(2) The term `group health plan' has the meaning given
            such term in section 6103(l)(12)(E)(ii) of such Code.
                ``(3) The term `qualified employer' has the meaning given
            such term in section 6103(l)(12)(E)(iii) of the Internal
            Revenue Code of 1986.

                           ``provision of information

        ``Sec. 2102. (a) Request for Information.--An administrator of a
    covered health program may request from the Director information
    concerning the employment and group health coverage of a program
    beneficiary, the beneficiary's spouse, and (if the beneficiary is a
    dependent child) the beneficiary's parents. The Director shall provide
    such information if the request--
                ``(1) is in such form and manner and at such a time as the
            Director may require, and
                ``(2) specifies the name and tax identification number of
            the beneficiary.
        ``(b) Data Matching Program.--
                ``(1) Request by director.--The Director shall, at such
            intervals as the Director finds appropriate, transmit to the
            Secretary of the Treasury the names and tax identification
            numbers of beneficiaries with respect to whom a request has
            been made pursuant to subsection (a), and request that such
            Secretary disclose to the Commissioner of Social Security the
            following information:
                        ``(A) Whether the beneficiary is married and, if
                    so, the name of the spouse and such spouse's tax
                    identification number.
                        ``(B) If the beneficiary is a dependent child, the
                    name of and tax identification numbers of the
                    beneficiary's parents.
                ``(2) Information from commissioner of social security.--
            The Secretary, acting through the Commissioner of Social
            Security, shall, upon written request from the Director,
            disclose to the Director, the following information:
                        ``(A) For each individual who is identified as
                    having received wages (as defined in section 3401(a) of
                    the Internal Revenue Code of 1986) from, and as having
                    available coverage under a group health plan of, an
                    employer in a previous year--
                                ``(i) the name and taxpayer identification
                            number of the individual;
                                ``(ii) the name, address, and taxpayer
                            identification number of the employer, and
                            whether such employer is a qualified employer;
                            and
                                ``(iii) whether the employer has made
                            available a group health plan to the employee
                            and the plan coverage provided (if any) with
                            respect to the employee and family members of
                            the employee under the group health plan.
                        ``(B) For each individual who is identified as
                    married and whose spouse is identified as having
                    received wages (as defined in section 3401(a) of the
                    Internal Revenue Code of 1986) from, and as having
                    available coverage under a group health plan of, an
                    employer in a previous year--
                                ``(i) the name and taxpayer identification
                            number of the individual and of the
                            individual's spouse;
                                ``(ii) the name, address, and taxpayer
                            identification number of the spouse's employer,
                            and whether such employer is a qualified
                            employer; and
                                ``(iii) whether the spouse's employer has
                            made available a group health plan to the
                            spouse and the plan coverage provided (if any)
                            with respect to the spouse and family members
                            of the spouse under the group health plan.
                        ``(C) For each individual who is identified as a
                    dependent child and whose parent is identified as
                    having received wages (as defined in section 3401(a) of
                    the Internal Revenue Code of 1986) from, and as having
                    available coverage under a group health plan of, an
                    employer in a previous year--
                                ``(i) the name and taxpayer identification
                            number of the individual and of the
                            individual's parent;
                                ``(ii) the name, address, and taxpayer
                            identification number of the parent's employer,
                            and whether such employer is a qualified
                            employer; and
                                ``(iii) whether the parent's employer has
                            made available a group health plan to the
                            parent and the plan coverage provided (if any)
                            with respect to the parent and dependent
                            children of the parent under the group health
                            plan.
                ``(3) Information from employers.--The Director shall--
                        ``(A) request, from the employer of each individual
                    (including each spouse) with respect to whom
                    information was received from the Commissioner of
                    Social Security pursuant to paragraph (2), specific
                    information concerning coverage of such individual (and
                    of the individual's spouse and dependent children)
                    under the employer's group health plan (including the
                    period and nature of the coverage, and the name,
                    address, and identifying number of the plan), and
                        ``(B) furnish the information received in response
                    to such request with respect to an individual (or such
                    individual's spouse or dependent children) to the
                    administrator requesting such information pursuant to
                    subsection (a).

                ``requirement that employers furnish information

        ``Sec. 2103. (a) In General.--An employer shall furnish to the
    Director the information requested pursuant to section 2102(b)(3)
    within 30 days after receipt of such a request.
        ``(b) Sunset on Requirement.--Subsection (a) shall not apply to
    inquiries made after September 30, 1998.
        ``(c) Civil Money Penalty for Failure to Cooperate.--
                ``(1) In general.--An employer (other than a Federal or
            other governmental entity) who willfully or repeatedly fails to
            provide timely and accurate response to a request for
            information pursuant to section 2102(b)(3) shall be subject, in
            addition to any other penalties that may be prescribed by law,
            to a civil money penalty of not to exceed $1,000 for each
            individual with respect to whom such a request is made.
                ``(2) Enforcement authority.--In cases of failure to
            respond to the Director in accordance with subsection (a) to
            inquiries relating to requests pursuant to section 2102, the
            provisions of section 1128A (other than subsections (a) and
            (b)) shall apply to civil money penalties under paragraph (1)
            in the same manner as such provisions apply to penalties or
            proceedings under section 1128A(a).

                                  ``data bank

        ``Sec. 2104. (a) Maintenance of Information.--The Clearinghouse
    shall maintain a data bank, containing information on individuals
    obtained pursuant to this title. Individual information in the data
    bank shall be retained for not less than one year after the date the
    information was obtained.
        ``(b) Disclosure of Information in Data Bank.--
                ``(1) In general.--The Director is authorized (subject to
            paragraph (2)) to disclose any information in the data bank
            established pursuant to subsection (a) with respect to an
            individual (or an individual's spouse or parent)--
                        ``(A) to the Commissioner of Social Security, the
                    Secretary of the Treasury, administrators, employers,
                    and insurers, to the extent necessary to assist such
                    administrators;
                        ``(B) to Federal and State law enforcement
                    officials responsible for enforcement of civil or
                    criminal laws, in connection with investigations or
                    administrative or judicial law enforcement proceedings
                    relating to a covered health program; and
                        ``(C) for research or statistical purposes.
                ``(2) Restrictions on disclosure.--Information in the data
            bank may be disclosed under this subsection only for purposes
            of, and to the extent necessary in, determining the extent to
            which an individual is covered under any group health plan.
        ``(c) Use of Contractors.--The responsibilities of the
    Clearinghouse under this section may be carried out by contract.
        ``(d) Fees.--The Clearinghouse shall--
                ``(1) establish fees for services under this section
            designed to cover the full costs to the Clearinghouse of
            providing such services, and
                ``(2) require the payment of such fees to provide such
            services.''.
        (b) Conforming Medicare Amendments.--Section 1862(b)(5) (42 U.S.C.
    1395y(b)(5)) is amended--
                (1) in subparagraph (A)(i)--
                        (A) by striking ``Secretary of the Treasury'' and
                    inserting ``Director of the Health Coverage
                    Clearinghouse'',
                        (B) by striking ``(as defined in section
                    6103(l)(12) of the Internal Revenue Code of 1986)'' and
                    inserting ``(as defined in clause (iii))'', and
                        (C) by striking ``and request'' and all that
                    follows and inserting a period;
                (2) in subparagraph (A)(ii)--
                        (A) by striking ``the Commissioner of the Social
                    Security Administration'' and all that follows and
                    inserting ``the Director of the Health Coverage
                    Clearinghouse to obtain and disclose to the
                    Administrator, pursuant to section 2102(b) and to
                    subparagraph (C) of section 6103(l)(12) of the Internal
                    Revenue Code of 1986, the information described in
                    section 2102(b) and subparagraph (B) of such section
                    6103(l)(12).'', and
                        (B) by inserting ``, pursuant to section 1144(c),''
                    after ``disclose to the Administrator''; and
                (3) by striking subparagraph (C).
        (c) Medicaid Use of Clearinghouse.--Section 1902(a)(25)(A) (42
    U.S.C. 1396a(a)(25)(A)) is amended by inserting ``(including making
    appropriate requests to the Director of the Health Coverage
    Clearinghouse under section 2102)'' after ``all reasonable measures''.
        (d) Collection of Third Party Payments Under Maternal and Child
    Health Block Grant Program.--Section 505(a) (42 U.S.C. 705(a)) is
    amended--
                (1) by striking ``and'' at the end of paragraph (4),
                (2) by striking the period at the end of paragraph (5) and
            inserting ``; and'', and
                (3) by inserting after paragraph (5) the following new
            paragraph:
                ``(6) provides for an entity providing health services with
            assistance from the State under this title taking all
            reasonable steps--
                        ``(A) to ascertain the legal liability of third
                    parties to pay for such services, and
                        ``(B) where such liability is found to exist, to
                    seek reimbursement for such services.''.
        (e) Effective Dates.--
                (1) The amendments made by subsections (a), (b), and (d)
            shall take effect on April 1, 1995.
                (2) The amendments made by subsection (c) shall apply to
            allotments for years beginning with fiscal year 1994.

    SEC. 5118. MEDICAL CHILD SUPPORT.

        (a) State Plan Requirement.--Section 1902(a)(45) (42 U.S.C.
    1396a(a)(45)) is amended by striking ``owed to recipients'' and
    inserting ``and have in effect laws relating to medical child
    support''.
        (b) Medical Child Support Laws.--Section 1912 of such Act (42
    U.S.C. 1396k) is amended--
                (1) by adding at the end of the heading the following: ``;
            required laws relating to medical child support''; and
                (2) by adding at the end the following new subsection:
        ``(c) The laws relating to medical child support, which a State is
    required to have in effect under section 1902(a)(45), are as follows:
                ``(1) A law that prohibits an insurer from denying
            enrollment of a child under the health coverage of the child's
            parent on the ground that the child was born out of wedlock, on
            the ground that the child may not be claimed as a dependent on
            the parent's Federal income tax return, or on the ground that
            the child does not reside with the parent or in the insurer's
            service area. In this subsection, the term `insurer' includes a
            group health plan, as defined in section 607(1) of the Employee
            Retirement Income Security Act of 1974, a health maintenance
            organization, and an entity offering a service benefit plan.
                ``(2) A law that requires an insurer, in any case in which
            a parent is required by court or administrative order to
            provide health coverage for a child and the parent is eligible
            for family health coverage through the insurer--
                        ``(A) to permit such parent, upon application and
                    without regard to any enrollment season restrictions,
                    to enroll the parent and such child under such family
                    coverage;
                        ``(B) if such a parent is enrolled but fails to
                    make application to obtain coverage of such child, to
                    enroll such child under such family coverage upon
                    application by the child's other parent or by the State
                    agency administering the program under this title or
                    part D of title IV; and
                        ``(C) not to disenroll (or eliminate coverage of)
                    such a child unless the insurer is provided
                    satisfactory written evidence that--
                                ``(i) such court or administrative order is
                            no longer in effect, or
                                ``(ii) the child is or will be enrolled in
                            comparable health coverage through another
                            insurer which will take effect not later than
                            the effective date of such disenrollment.
                ``(3) A law that requires an employer doing business in the
            State, in the case of health coverage offered through
            employment with the employer and providing coverage of a child
            of an employee pursuant to a court or administrative order, to
            withhold from such employee's compensation the employee's share
            (if any) of premiums for health coverage (to the maximum amount
            permitted under section 303(b) of the Consumer Credit
            Protection Act) and to pay such share of premiums to the
            insurer.
                ``(4) A law that prohibits an insurer from imposing
            requirements upon a State agency, which is acting as an agent
            or subrogee of an individual eligible for medical assistance
            under this title and covered for health benefits from the
            insurer, that are different from requirements applicable to an
            agent or subrogee of any other individual so covered.
                ``(5) A law that requires an insurer, in any case in which
            a child has health coverage through the insurer of a
            noncustodial parent--
                        ``(A) to provide such information to the custodial
                    parent as may be necessary for the child to obtain
                    benefits through such coverage;
                        ``(B) to permit the custodial parent (or provider,
                    with the custodial parent's approval) to submit claims
                    for covered services without the approval of the
                    noncustodial parent; and
                        ``(C) to make payment on claims submitted in
                    accordance with subparagraph (B) directly to the
                    custodial parent or the provider.
                ``(6) A law that requires the State agency under this title
            to garnish the wages, salary, or other employment income of,
            and to withhold amounts from State tax refunds to, any person
            who--
                        ``(A) is required by court or administrative order
                    to provide coverage of the costs of health services to
                    a child who is eligible for medical assistance under
                    this title,
                        ``(B) has received payment from a third party for
                    the costs of such services to such child, but
                        ``(C) has not used such payments to reimburse, as
                    appropriate, either the other parent or guardian of
                    such child or the provider of such services,
            to the extent necessary to reimburse the State agency for
            expenditures for such costs under its plan under this title,
            but any claims for current or past-due child support shall take
            priority over any such claims for the costs of such
            services.''.
        (c) Effective Date.--(1) Except as provided in paragraph (2), the
    amendments made by this section apply to calendar quarters beginning on
    or after April 1, 1994, without regard to whether or not final
    regulations to carry out such amendments have been promulgated by such
    date.
        (2) In the case of a State plan under title XIX of the Social
    Security Act which the Secretary of Health and Human Services
    determines requires State legislation in order for the plan to meet the
    additional requirements imposed by the amendments made by this section,
    the State plan shall not be regarded as failing to comply with the
    requirements of such title solely on the basis of its failure to meet
    these additional requirements before the first day of the first
    calendar quarter beginning after the close of the first regular session
    of the State legislature that begins after the date of enactment of
    this Act. For purposes of the previous sentence, in the case of a State
    that has a 2-year legislative session, each year of such session shall
    be deemed to be a separate regular session of the State legislature.

      PART V--ASSURING PROPER PAYMENTS TO DISPROPORTIONATE SHARE HOSPITALS

    SEC. 5121. ASSURING PROPER PAYMENTS TO DISPROPORTIONATE SHARE
                  HOSPITALS.

        (a) Disproportionate Share Hospitals Required to Provide Minimum
    Level of Services to Medicaid Patients.--Section 1923 (42 U.S.C. 1396r-
    4) is amended--
                (1) in subsection (a)(1)(A), by striking ``requirement''
            and inserting ``requirements'';
                (2) in subsection (b)(1), by striking ``requirement'' and
            inserting ``requirements'';
                (3) in the heading to subsection (d), by striking
            ``Requirement'' and inserting ``Requirements'';
                (4) by adding at the end of subsection (d) the following
            new paragraph:
                ``(3) No hospital may be defined or deemed as a
            disproportionate share hospital under a State plan under this
            title or under subsection (b) or (e) of this section unless the
            hospital has a medicaid inpatient utilization rate (as defined
            in subsection (b)(2)) of not less than 1 percent.'';
                (5) in subsection (e)(1)--
                        (A) by striking ``and'' before ``(B)'', and
                        (B) by inserting before the period at the end the
                    following: ``, and (C) the plan meets the requirement
                    of subsection (d)(3) and such payment adjustments are
                    made consistent with the fourth sentence of subsection
                    (c)''; and
                (6) in subsection (e)(2)--
                        (A) in subparagraph (A), by inserting ``(other than
                    the fourth sentence of subsection (c))'' after ``(c)'',
                        (B) by striking ``and'' at the end of subparagraph
                    (A),
                        (C) by striking the period at the end of
                    subparagraph (B) and inserting ``, and'', and
                        (D) by adding at the end the following new
                    subparagraph:
                ``(C) subsection (d)(3) shall apply.''.
        (b) Limiting Amount of Payment Adjustments for State or County
    Hospitals to Uncovered Costs.--Subsection (c) of such section is
    amended by adding at the end the following: ``A payment adjustment
    during a year is not considered to be consistent with this subsection
    with respect to a hospital owned or operated by a State (or by an
    instrumentality of or a unit of government within a State) if the
    payment adjustment exceeds the costs of furnishing hospital services
    (as determined by the Secretary and net of payments under this title,
    other than under this section, and by uninsured patients) by the
    hospital to individuals who either are eligible for medical assistance
    under the State plan or have no health insurance (or other source of
    third party payment) for such services during the year. For purposes of
    the preceding sentence, payments made to a hospital for services
    provided to indigent patients made by a State or a unit of local
    government within a State shall not be considered to be a source of
    third party payment.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to payments to States under section 1903(a) of the Social
    Security Act for payments to hospitals made under State plans after--
                (1) the end of the State fiscal year that ends during 1994,
            or
                (2) in the case of a State with a State legislature which
            is not scheduled to have a regular legislative session in 1994,
            the end of the State fiscal year that ends during 1995;
    without regard to whether or not final regulations to carry out such
    amendments have been promulgated by either such date.

                     Subchapter B--Miscellaneous Provisions

                    PART I--ANTI-FRAUD AND ABUSE PROVISIONS

    SEC. 5131. APPLICATION OF MEDICARE RULES LIMITING CERTAIN PHYSICIAN
                  REFERRALS.

        (a) In General.--Section 1903(i) (42 U.S.C. 1396b(i)), as amended
    by section 5174(b), is amended--
                        (A) in paragraph (12), by striking or at the end,
                        (B) in paragraph (13), by striking the period at
                    the end and inserting ``; or'', and
                        (C) by inserting after paragraph (13) the following
                    new paragraph:
                ``(14) with respect to any amount expended for an item or
            service for which payment would be denied under section
            1877(g)(1) if the item or service were furnished to an
            individual entitled to benefits under title XVIII.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to items and services furnished on or after October 1, 1993.

    SEC. 5132. INTERMEDIATE SANCTIONS FOR KICKBACK VIOLATIONS.

        (a) Penalty for Kickbacks.--Section 1128A(a) (42 U.S.C. 1320a-
    7a(a)) is amended--
                (1) by striking ``or'' at the end of paragraphs (1) and
            (2);
                (2) by adding ``or'' at the end of paragraph (3);
                (3) by inserting after paragraph (3) the following new
            paragraph:
                ``(4) carries out any activity in violation of paragraph
            (1) or (2) of section 1128B(b);'';
                (4) by striking ``given).'' at the end of the first
            sentence and inserting ``given or, in cases under paragraph
            (4), $50,000 for each such violation).'';
                (5) in the second sentence, by inserting ``in cases under
            paragraphs (1), (2), and (3),'' after ``In addition,''; and
                (6) by inserting after the second sentence, the following
            new sentence: ``In cases under paragraph (4), such a person
            shall be subject to an assessment of not more than twice the
            total amount of the remuneration offered, paid, solicited, or
            received in violation of section 1128B(b), determined without
            regard to whether a portion of such remuneration was offered,
            paid, solicited, or received for a lawful purpose.''.
        (b) Authorization To Act.--The first sentence of section
    1128A(c)(1) (42 U.S.C. 1320a-7a(c)(1)) is amended by striking all that
    follows ``(b)'' and inserting the following: ``unless, within one year
    after the date the Secretary presents a case to the Attorney General
    for consideration, the Attorney General brings an action in a district
    court of the United States.''.
        (c) Effective Dates.--
                (1) The amendments made by subsection (a) shall apply to
            remuneration offered, paid, solicited, or received before, on,
            or after the date of the enactment of this Act.
                (2) The amendment made by subsection (b) shall apply to
            cases presented by the Secretary of Health and Human Services
            for consideration on or after the date of the enactment of this
            Act.

    SEC. 5133. REQUIRING MAINTENANCE OF EFFORT FOR STATE MEDICAID FRAUD
                  CONTROL UNITS.

        (a) In General.--Section 1902(a)(49) (42 U.S.C. 1396a(a)(49)) is
    amended--
                (1) by inserting ``(A)'' after ``(49)'', and
                (2) by adding at the end the following new subparagraph:
                ``(B) provide that the State will expend for its medicaid
            fraud and abuse control unit (as defined in section 1903(q)),
            for each State fiscal year, an amount that is not less than the
            amount expended for such unit in the State fiscal year that
            ended in 1992 adjusted to reflect the percentage increase in
            total expenditures under the State plan between such State
            fiscal year and the State fiscal year involved;''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to State fiscal years ending after 1993.

                        PART II--MANAGED CARE PROVISIONS

    SEC. 5135. MEDICAID MANAGED CARE ANTI-FRAUD PROVISIONS.

        (a) Prohibiting Affiliations With Individuals Debarred by Federal
    Agencies.--
                (1) In general.--Section 1903(m) (42 U.S.C. 1396b(m)) is
            amended--
                        (A) in paragraph (2)(A)--
                                (i) by striking ``and'' at the end of
                            clause (x),
                                (ii) by striking the period at the end of
                            clause (xi) and inserting ``; and'', and
                                (iii) by adding at the end the following
                            new clause:
                ``(xii) the entity complies with the requirements of
            paragraph (3) (relating to certain protections against fraud
            and abuse).'';
                        (B) in paragraph (2)(B), as amended by section
                    5158(b), by striking ``clause (ix)'' and inserting
                    ``clauses (ix) and (xii)''; and
                        (C) by inserting after paragraph (2) the following
                    new paragraph:
        ``(3)(A)(i) A health maintenance organization may not have a person
    described in clause (iv) as a director, officer, partner, or person
    with beneficial ownership of more than 5 percent of organization's
    equity.
        ``(ii) A health maintenance organization may not have an
    employment, consulting, or other agreement with a person described in
    clause (iv) for the provision of goods and services that are
    significant and material to the organization's obligations under its
    contract with the State described in paragraph (2)(A)(iii).
        ``(iii) If a health maintenance organization is not in compliance
    with clause (i) or clause (ii)--
                ``(I) a State may continue an existing agreement with the
            organization unless the Secretary (in consultation with the
            Inspector General of the Department of Health and Human
            Services) directs otherwise; and
                ``(II) a State may not renew or otherwise extend the
            duration of an existing agreement with the organization unless
            the Secretary (in consultation with the Inspector General of
            the Department of Health and Human Services) provides a written
            statement describing compelling reasons that exist for renewing
            or extending the agreement.
        ``(iv) A person described in this clause is a person that--
                ``(I) is debarred or suspended by the Federal Government,
            pursuant to the Federal acquisition regulation, from Government
            contracting and subcontracting, or
                ``(II) is an affiliate (within the meaning of the Federal
            acquisition regulation) of a person described in subclause
            (I).''.
                (2) Effective date.--The amendments made by paragraph (1)
            shall apply to agreements between a State and an entity under
            section 1903(m) of the Social Security Act entered into or
            renewed on or after October 1, 1993, without regard to whether
            regulations to carry out such amendments are promulgated by
            such date.
        (b) Requirement for State Conflict-of-Interest Safeguards in
    Medicaid Risk Contracting.--
                (1) In general.--Section 1903(m)(2)(A) (42 U.S.C.
            1396b(m)(2)(A)), as amended by subsection (a)(1)(C), is
            amended--
                        (A) by striking ``and'' at the end of clause (xi),
                        (B) by striking the period at the end of clause
                    (xii) and inserting ``; and'', and
                        (C) by adding at the end the following new clause:
                ``(xiii) the State certifies to the Secretary that it has
            in effect conflict-of-interest safeguards with respect to
            officers and employees of the State with responsibility with
            respect to contracts with organizations under this subsection
            that are at least as effective as the Federal safeguards,
            provided under section 27 of the Office of Federal Procurement
            Policy Act (41 U.S.C. 423), against conflicts of interest that
            apply with respect to Federal procurement officials with
            comparable responsibilities with respect to such contracts.''.
                (2) Effective date.--The amendments made by paragraph (1)
            shall apply as of July 1, 1994, without regard to whether
            regulations to carry out such amendments are promulgated by
            such date.
        (c) Requiring Disclosure of Financial Information.--
                (1) In general.--Section 1903(m)(3), as inserted by
            subsection (a)(1)(C), is amended by adding at the end the
            following new subparagraph:
        ``(B) The contract between the State and an entity referred to in
    paragraph (2)(A)(iii) shall provide that--
                ``(i) the entity agrees to report to the State such
            financial information as the Secretary or the State may require
            to demonstrate that the entity has a fiscally sound operation;
            and
                ``(ii) the entity agrees to make available to its enrollees
            upon reasonable request--
                        ``(I) the information reported under paragraph (1),
                        ``(II) the information required to be disclosed
                    under sections 1124 and 1126, and
                        ``(III) a description of each transaction,
                    described in subparagraphs (A) through (C) of section
                    1318(a)(3) of the Public Health Service Act, between
                    the entity and a party in interest (as defined in
                    section 1318(b) of such Act).''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to contract years beginning on or after October 1,
            1993, without regard to whether regulations to carry out such
            amendments are promulgated by such date, with respect to
            information reported or required to be disclosed, or
            transactions occurring, before, on, or after such date.
        (d) Prohibiting Marketing Fraud.--
                (1) In general.--Section 1903(m)(3), as inserted by
            subsection (a)(1) and as amended by subsection (c)(1), is
            amended by adding at the end the following new subparagraph:
        ``(C) The contract between the State and an entity referred to in
    paragraph (2)(A)(iii) shall provide that the entity agrees to comply
    with such procedures and conditions as the Secretary prescribes in
    order to ensure that, before an individual is enrolled with the entity,
    the individual is provided accurate and sufficient information to make
    an informed decision whether or not to enroll.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to contract years that begin on or after October 1,
            1993, without regard to whether regulations to carry out such
            amendment are promulgated by such date.
        (e) Requiring Adequate Equity for For-Profit Entities.--
                (1) In general.--Section 1903(m)(3), as previously amended
            by this section, is further amended by adding at the end the
            following new subparagraph:
        ``(D)(i) The contract between the State and an entity referred to
    in paragraph (2)(A)(iii) shall require, in the case of a for-profit
    entity, that the entity shall maintain an average ratio of--
                ``(I) equity capital to
                ``(II) payments made by the State to the entity under the
            contract on a capitation basis or any other risk basis,
    of not less than such minimum ratio as the Secretary shall specify.
        ``(ii) The contract between the State and a non-profit entity
    referred to in paragraph (2)(A)(iii) shall require that no payment
    shall be made directly or indirectly under an agreement between the
    non-profit entity and a related for-profit entity (as defined by the
    Secretary) unless the for-profit entity maintains an average ratio of
    equity capital to payments under such agreement of not less than such
    ratio as the Secretary shall specify.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to contract years beginning on or after July 1,
            1994, without regard to whether regulations to carry out such
            amendment are promulgated by such date.
        (f) Requiring Adequate Provision Against Risk of Insolvency.--
                (1) In general.--Section 1903(m)(1)(A)(ii) (42 U.S.C.
            1396b(m)(1)(A)(ii)) is amended by inserting ``, which meets
            such standards as the Secretary shall prescribe'' after
            ``satisfactory to the State''.
                (2) Effective date and transition.--(A) The amendment made
            by paragraph (1) shall apply to contract years beginning on or
            after July 1, 1994, without regard to whether regulations to
            carry out such amendments are promulgated by such date.
                (B) If the Secretary of Health and Human Services has not
            promulgated standards to carry out the amendment made by
            paragraph (1) by July 1, 1994, until such standards have been
            promulgated a provision of a health maintenance organization
            against the risk of insolvency shall not be considered to meet
            standards prescribed by the Secretary, for purposes of section
            1903(m)(1)(A)(ii) of the Social Security Act, unless such
            provision has been found satisfactory by the Secretary under
            section 1876(b)(2)(E) of such Act.
        (g) Requiring Report on Net Earnings and Additional Benefits.--
                (1) In general.--Section 1903(m)(3), as previously amended
            by this section, is amended by adding at the end the following
            new subparagraph:
        ``(E) The contract between the State and an entity referred to in
    paragraph (2)(A)(iii) shall provide that the entity shall submit a
    report to the State and the Secretary not later than 12 months after
    the close of a contract year containing--
                ``(i) a financial statement of the entity's net earnings
            under the contract during the contract year, which statement
            has been audited using auditing standards established by the
            Secretary in consultation with the States; and
                ``(ii) a description of any benefits that are in addition
            to the benefits required to be provided under the contract that
            were provided during the contract year to members enrolled with
            the entity and entitled to medical assistance under the
            plan.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to contract years beginning on or after October 1,
            1993, without regard to whether regulations to carry out such
            amendments are promulgated by such date.
        (h) Report on Net Earnings of Contractors.--Not later than 6 months
    after the date of the enactment of this Act, the Secretary of Health
    and Human Services shall submit a report to Congress on the earnings of
    organizations with contracts to receive payment for providing medical
    assistance under title XIX of the Social Security Act on a prepaid
    capitation or any other risk basis. The report shall include the
    Secretary's recommendations on options for requiring such
    organizations, as a condition of participation under such title, to
    dedicate a portion of such earnings to the provision of additional
    benefits to individuals enrolled with the organization.

    SEC. 5136. CLARIFICATION OF TREATMENT OF HMO ENROLLEES IN COMPUTING THE
                  MEDICAID INPATIENT UTILIZATION RATE IN QUALIFYING
                  HOSPITALS AS DISPROPORTIONATE SHARE HOSPITALS.

        (a) In General.--Section 1923(b)(2) (42 U.S.C. 1396r-4(b)(2)) is
    amended by inserting before the period at the end the following: ``and
    whether or not the individual is enrolled with an entity contracting
    with the State on a prepaid capitation basis or other risk basis under
    section 1903(m)''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to payments to States under section 1903(a) of the Social
    Security Act for payments to hospitals made under State plans on and
    after the first day of the first calendar quarter beginning after the
    date of the enactment of this Act.

    SEC. 5137. EXTENSION OF PERIOD OF APPLICABILITY OF ENROLLMENT MIX
                  REQUIREMENT TO CERTAIN HEALTH MAINTENANCE ORGANIZATIONS
                  PROVIDING SERVICES UNDER DAYTON AREA HEALTH PLAN.

        Section 2 of Public Law 102-276 is amended by striking ``January
    31, 1994'' and inserting ``December 31, 1995''.

    SEC. 5138. EXTENSION OF MEDICAID WAIVER FOR TENNESSEE PRIMARY CARE
                  NETWORK.

        Section 6411(f) of the Omnibus Budget Reconciliation Act of 1989,
    as amended by section 1 of Public Law 102-317, is amended by striking
    ``January 31, 1994'' and inserting ``December 31, 1995''.

    SEC. 5139. WAIVER OF APPLICATION OF MEDICAID ENROLLMENT MIX REQUIREMENT
                  TO DISTRICT OF COLUMBIA CHARTERED HEALTH PLAN, INC.

        (a) In General.--The Secretary of Health and Human Services shall
    waive the application of the requirement described in section
    1903(m)(2)(A)(ii) of the Social Security Act to the entity known as the
    District of Columbia Chartered Health Plan, Inc., for the period
    described in subsection (b), if the Secretary determines that the
    entity is making continuous efforts and progress toward achieving
    compliance with such requirement.
        (b) Period of Applicability.--The period referred to in subsection
    (a) is the period that begins on October 1, 1992, and ends on December
    31, 1995.

    SEC. 5140. EXTENSION OF MINNESOTA PREPAID MEDICAID DEMONSTRATION
                  PROJECT.

        (a) In General.--Section 507 of the Family Support Act of 1988, as
    amended by section 6411(j) of OBRA-1989 and by section 4733 of OBRA-
    1990, is amended by striking ``1996'' and inserting ``1998''.
        (b) Authority to Impose Premium.--
                (1) In general.--Notwithstanding section 1916 of the Social
            Security Act and subject to paragraph (2), the State of
            Minnesota may impose a premium on individuals receiving medical
            assistance under the Minnesota Prepaid Demonstration Project
            operated under a waiver granted by the Secretary of Health and
            Human Services under section 1115(a) of the Social Security Act
            and other individuals eligible under the State's plan for
            medical assistance under title XIX of such Act.
                (2) Limitation on amount of premium.--In no case may the
            amount of any premium imposed on an individual receiving
            medical assistance under the State plan or under the
            Demonstration Project described in paragraph (1) exceed 10
            percent of the amount by which the family income (less expenses
            for the care of a dependent child) of the individual exceeds
            110 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.

              PART III--EMERGENCY SERVICES TO UNDOCUMENTED ALIENS

    SEC. 5141. INCREASE IN FEDERAL FINANCIAL PARTICIPATION FOR EMERGENCY
                  MEDICAL ASSISTANCE TO UNDOCUMENTED ALIENS.

        (a) In General.--Section 1905(b) (42 U.S.C. 1396d(b)) is amended by
    adding at the end the following: ``Notwithstanding the first sentence
    of this section, subject to 1903(v)(4), the Federal medical assistance
    percentage shall be 100 per centum with respect to amounts expended by
    an eligible State in a covered fiscal year (as defined in section
    1903(v)(4)(C)) as medical assistance for care and services described in
    section 1903(v)(2) to aliens described in section 1903(v)(1).''.
        (b) Limitation.--Section 1903(v) (42 U.S.C. 1396b(v)) is amended by
    adding at the end the following new paragraphs:
        ``(4)(A) With respect to any eligible State (as defined in
    subparagraph (C)(i)), the amount of the increase in payments to a State
    under subsection (a) in a covered fiscal year (as defined in
    subparagraph (C)(ii)), resulting from the increase in the Federal
    medical assistance percentage under the fourth sentence of section
    1905(b), shall not exceed the State's allotment determined under
    subparagraph (B).
        ``(B)(i) The total of the allotments to all States for a covered
    fiscal year under this paragraph shall be $300,000,000.
        ``(ii) From the total allotment under clause (i) for a covered
    fiscal year, the Secretary shall determine the amount of the allotment
    for each eligible State. Subject to clause (iii), the amount of such
    allotment for such a fiscal year shall bear the same ratio to the total
    amount specified in clause (i) for the fiscal year as the ratio of--
                ``(I) the allotment to the State for fiscal year 1993 under
            section 204 of the Immigration Reform and Control Act of 1986,
            to
                ``(II) the total of such allotments for all such eligible
            States for fiscal year 1993.
        ``(iii) In the case of an eligible State which notifies the
    Secretary that an amount of its allotment will not be used by the State
    under this paragraph, the State's allotment shall be reduced by such
    amount and such amount shall be redistributed among the other eligible
    States in proportion to the amount otherwise allotted to such State
    under clause (ii).
        ``(C) For purposes of this paragraph and the fourth sentence of
    section 1905(b):
                ``(i) The term `eligible State' means a State--
                        ``(I) with a plan approved under this title
                    (including a State which is providing medical
                    assistance to its residents under a statewide waiver
                    granted under section 1115), and
                        ``(II) for which its allotment for fiscal year 1993
                    under section 204 of the Immigration Reform and Control
                    Act of 1986 is at least 1 percent of the total of such
                    allotments for all the States for fiscal year 1993.
                ``(ii) The term `covered fiscal year' means only fiscal
            year 1994.
        ``(D) Nothing in this paragraph or the fourth sentence of section
    1905(b) shall be construed as establishing entitlement authority
    (within the meaning of section 3(9) of the Congressional Budget Act of
    1974) for any fiscal year other than a covered fiscal year.''.

    SEC. 5142. LIMITING FEDERAL MEDICAID MATCHING PAYMENT TO BONA FIDE
                  EMERGENCY SERVICES FOR UNDOCUMENTED ALIENS.

        (a) In General.--Section 1903(v)(2) (42 U.S.C. 1396b(v)(2)) is
    amended--
                (1) by striking ``and'' at the end of subparagraph (A),
                (2) by striking the period at the end of subparagraph (B)
            and inserting ``, and'', and
                (3) by adding at the end the following new subparagraph:
                ``(C) such care and services are not related to an organ
            transplant procedure.''.
        (b) Effective Date.--(1) Subject to paragraph (2), the amendments
    made by subsection (a) shall apply as if included in the enactment of
    OBRA-1986.
        (2) The Secretary of Health and Human Services shall not disallow
    expenditures made for the care and services described in section
    1903(v)(2)(C) of the Social Security Act, as added by subsection (a),
    furnished before the date of the enactment of this Act.

                       PART IV--MISCELLANEOUS PROVISIONS

    SEC. 5144. INCREASE IN LIMIT ON FEDERAL MEDICAID MATCHING PAYMENTS TO
                  PUERTO RICO AND OTHER TERRITORIES.

        (a) In General.--Paragraphs (1) through (5) of section 1108(c) (42
    U.S.C. 1308(c)) are amended to read as follows:
                ``(1) Puerto Rico shall not exceed (A) $104,000,000 for
            fiscal year 1994 and (B) for each succeeding fiscal year the
            amount provided in this paragraph for the preceding fiscal year
            increased by the percentage increase in the medical care
            component of the consumer price index for all urban consumers
            (as published by the Bureau of Labor Statistics) for the
            twelve-month period ending in March preceding the beginning of
            the fiscal year, rounded to the nearest $100,000;
                ``(2) the Virgin Islands shall not exceed (A) $3,425,000
            for fiscal year 1994, and (B) for each succeeding fiscal year
            the amount provided in this paragraph for the preceding fiscal
            year increased by the percentage increase referred to in
            paragraph (1)(B), rounded to the nearest $10,000;
                ``(3) Guam shall not exceed (A) $3,290,000 for fiscal year
            1994, and (B) for each succeeding fiscal year the amount
            provided in this paragraph for the preceding fiscal year
            increased by the percentage increase referred to in paragraph
            (1)(B), rounded to the nearest $10,000;
                ``(4) Northern Mariana Islands shall not exceed (A)
            $990,000 for fiscal year 1994, and (B) for each succeeding
            fiscal year the amount provided in this paragraph for the
            preceding fiscal year increased by the percentage increase
            referred to in paragraph (1)(B), rounded to the nearest
            $10,000; and
                ``(5) American Samoa shall not exceed (A) $1,910,000 for
            fiscal year 1994, and (B) for each succeeding fiscal year the
            amount provided in this paragraph for the preceding fiscal year
            increased by the percentage increase referred to in paragraph
            (1)(B), rounded to the nearest $10,000.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply beginning with fiscal year 1994.

    SEC. 5145. CRITERIA FOR MAKING DETERMINATIONS OF DENIAL OF FEDERAL
                  MEDICAID MATCHING PAYMENTS TO STATES.

        (a) In General.--Section 1903 (42 U.S.C. 1396b) is amended by
    adding at the end the following new subsection:
        ``(x)(1) In any case in which the Secretary proposes to disallow
    under section 1116(d) a claim by a State under this section and the
    State exercises its right of reconsideration under section 1116(d), the
    Departmental Appeals Board established in the Department of Health and
    Human Services shall, if such Board upholds the basis for the
    disallowance, determine whether the amount of the disallowance should
    be reduced. In making this determination, the Board shall take into
    account (to the extent the State makes a showing) factors which shall
    include--
                ``(A) the nature of the basis for the disallowance;
                ``(B) whether the amount of the disallowance is
            proportionate to the error or deficiency on which the
            disallowance is based;
                ``(C) whether the basis of the disallowance constitutes
            noncompliance that prevented or materially affected the
            provision of appropriate services to individuals eligible under
            this title; or
                ``(D) whether Federal guidance with respect to the action
            that is the basis for the proposed disallowance was
            insufficient and the State made good faith efforts to conform
            its action to the intent of the applicable Federal statute or
            regulation.
        ``(2) No disallowance shall be taken or upheld if the action of the
    State on which the disallowance would be based is consistent with its
    approved State plan.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to disallowances made after the date of the enactment of this Act
    and shall take effect without regard to the promulgation of
    implementing regulations.

    SEC. 5146. RENEWAL OF UNFUNDED DEMONSTRATION PROJECT FOR LOW-INCOME
                  PREGNANT WOMEN AND CHILDREN.

        (a) In General.--Section 6407 of OBRA-89 is amended--
                (1) in subsection (d), by striking ``3 years'' and
            inserting ``5 years'';
                (2) in subsection (f), by striking ``$10,000,000 in each of
            fiscal years 1990, 1991, and 1992'' and inserting
            ``$30,000,000''; and
                (3) in subsection (g)(2), by striking ``January 1, 1994''
            and inserting ``one year after the termination of the
            demonstration projects''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    take effect as if included in the enactment of OBRA-89.

    SEC. 5147. OPTIONAL MEDICAID COVERAGE OF TB-RELATED SERVICES FOR
                  CERTAIN TB-INFECTED INDIVIDUALS.

        (a) Coverage as Optional, Categorically Needy Group.--Section
    1902(a)(10)(A)(ii) (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
                (1) by striking ``or'' at the end of subclause (X),
                (2) by adding ``or'' at the end of subclause (XI), and
                (3) by adding at the end the following new subclause:
                                        ``(XII) who are described in
                                    subsection (z)(1) (relating to certain
                                    TB-infected individuals);''.
        (b) Group and Benefit Described.--Section 1902 is amended by adding
    at the end the following new subsection:
        ``(z)(1) Individuals described in this paragraph are individuals
    not described in subsection (a)(10)(A)(i)--
                ``(A) who have tested positively to be infected with
            tuberculosis;
                ``(B) whose income (as determined under the State plan
            under this title with respect to disabled individuals) does not
            exceed the maximum amount of income a disabled individual
            described in subsection (a)(10)(A)(i) may have and obtain
            medical assistance under the plan; and
                ``(C) whose resources (as determined under the State plan
            under this title with respect to disabled individuals) do not
            exceed the maximum amount of resources a disabled individual
            described in subsection (a)(10)(A)(i) may have and obtain
            medical assistance under the plan.
        ``(2) For purposes of subsection (a)(10), the term `TB-related
    services' means each of the following services relating to treatment of
    infection with tuberculosis:
                ``(A) Prescribed drugs.
                ``(B) Physicians' services and services described in
            section 1905(a)(2).
                ``(C) Laboratory and X-ray services.
                ``(D) Clinic services and Federally-qualified health center
            services.
                ``(E) Case management services (as defined in section
            1915(g)(2)).
                ``(F) Services (other than room and board) designed to
            encourage completion of regimens of prescribed drugs by
            outpatients, including services to observe directly the intake
            of prescribed drugs.''.
        (c) Limitation on Benefits.--Section 1902(a)(10), as amended by
    section 5162(a), is amended, in the matter following subparagraph (F)--
                (1) by striking ``, and (XII)'' and inserting ``, (XII)'',
            and
                (2) by inserting before the semicolon at the end the
            following: ``, and (XIII) the medical assistance made available
            to an individual described in subsection (z)(1) who is eligible
            for medical assistance only because of subparagraph
            (A)(ii)(XII) shall be limited to medical assistance for TB-
            related services (as defined in subsection (z)(2))''.
        (d) Conforming Expansion of Case Management Services Option.--
    Section 1915(g)(1) (42 U.S.C. 1396n(g)(1)) is amended by inserting ``or
    to individuals described in section 1902(z)(1)(A),'' after ``or with
    either,''.
        (e) Conforming Amendment.--Section 1905(a) (42 U.S.C. 1396d(a)) is
    amended--
                (1) by striking ``or'' at the end of clause (ix),
                (2) by adding ``or'' at the end of clause (x),
                (3) by inserting after clause (x) the following new clause:
                ``(xi) individuals described in section 1902(z)(1),'', and
                (4) by amending paragraph (19) to read as follows:
                ``(19) case management services (as defined in section
            1915(g)(2)) and TB-related services described in section
            1902(z)(2)(F);''.
        (f) Effective Date.--The amendments made by this section shall
    apply to medical assistance furnished on or after January 1, 1994,
    without regard to whether or not final regulations to carry out such
    amendments have been promulgated by such date.

    SEC. 5148. APPLICATION OF MAMMOGRAPHY CERTIFICATION REQUIREMENTS UNDER
                  THE MEDICAID PROGRAM.

        (a) In General.--Section 1902(a)(9) (42 U.S.C. 1396a(a)(9)) is
    amended--
                (1) by striking ``and'' at the end of subparagraph (B),
                (2) by striking the semicolon at the end of subparagraph
            (C) and inserting ``, and'', and
                (3) by adding at the end the following new subparagraph:
                        ``(D) that any mammography paid for under such plan
                    must be conducted by a facility that has a certificate
                    (or provisional certificate) issued under section 354
                    of the Public Health Service Act;''.
        (b) Effective Date.--(1) Except as provided in paragraph (2), the
    amendments made by subsection (a) shall apply to mammography furnished
    by a facility during calendar quarters beginning on or after the first
    date that the certificate requirements of section 354(b) of the Public
    Health Service Act apply to such mammography conducted by such
    facility, without regard to whether or not final regulations to carry
    out such amendments have been promulgated by such date.
        (2) In the case of a State plan for medical assistance under title
    XIX of the Social Security Act which the Secretary of Health and Human
    Services determines requires State legislation (other than legislation
    appropriating funds) in order for the plan to meet the additional
    requirement imposed by the amendment made by subsection (a)(3), the
    State plan shall not be regarded as failing to comply with the
    requirements of such title solely on the basis of its failure to meet
    this additional requirement before the first day of the first calendar
    quarter beginning after the close of the first regular session of the
    State legislature that begins after the date of the enactment of this
    Act. For purposes of the previous sentence, in the case of a State that
    has a 2-year legislative session, each year of such session shall be
    deemed to be a separate regular session of the State legislature.

    SEC. 5149. REMOVAL OF SUNSET ON EXTENSION OF ELIGIBILITY FOR WORKING
                  FAMILIES.

        Subsection (f) of section 1925 (42 U.S.C. 1396r-6) is repealed.

    SEC. 5150. EXTENSION OF MORATORIUM ON TREATMENT OF CERTAIN FACILITIES
                  AS INSTITUTIONS FOR MENTAL DISEASES.

        Effective as if included in the enactment of OBRA-1989, section
    6408(a)(3) of such Act is amended by striking ``180 days'' and all that
    follows and inserting ``December 31, 1995.''.

    SEC. 5150A. TREATMENT OF CERTAIN CLINICS AS FEDERALLY-QUALIFIED HEALTH
                  CENTERS.

        (a) In General.--Section 1905(l)(2)(B) (42 U.S.C. 1396d(l)(2)(B)),
    as amended by section 5158(c), is amended--
                (1) by striking ``or'' at the end of clause (ii)(II),
                (2) by adding ``or'' at the end of clause (iii), and
                (3) by inserting after clause (iii) the following new
            clause:
                ``(iv) was treated by the Secretary, for purposes of part B
            of title XVIII, as a comprehensive Federally funded health
            center as of January 1, 1990;''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to calendar quarters beginning on or after July 1, 1993.

    SEC. 5150B. NURSING HOME REFORM.

        (a) Suspension of Decertification of Nurse Aide Training and
    Competency Evaluation Programs Based on Extended Surveys.--
                (1) In general.--Section 1919(f)(2)(B)(iii)(I)(b) (42
            U.S.C. 1396r(f)(2)(B)(iii)(I)(b)) is amended by striking the
            semicolon and inserting the following: ``, unless the survey
            shows that the facility is in compliance with the requirements
            of subsections (b), (c), and (d) of this section;''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall take effect as included in the enactment of OBRA-1990.
        (b) Requirements for Consultants Conducting Reviews of use of
    Drugs.--
                (1) In general.--Section 1919(c)(1)(D) (42 U.S.C.
            1396r(c)(1)(D)) is amended by adding at the end the following
            sentence: ``In determining whether such a consultant is
            qualified to conduct reviews under the previous sentence, the
            Secretary shall take into account the needs of nursing
            facilities under this title to have access to the services of
            such a consultant on a timely basis.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall take effect as included in the enactment of OBRA-1987.
        (c) Increase in Minimum Amount Required for Separate Deposit of
    Personal Funds.--
                (1) In general.--Section 1919(c)(6)(B)(i) (42 U.S.C.
            1396r(c)(6)(B)(i)) is amended by striking ``$50'' and inserting
            ``$100''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall take effect October 1, 1993.
        (d) Due Process Protections for Nurse Aides.--
                (1) Prohibiting state from including undocumented
            allegations in nurse aide registry.--Section 1919(e)(2)(B) (42
            U.S.C. 1396r(e)(2)(B)) is amended by striking the period at the
            end of the first sentence and inserting the following: ``, but
            shall not include any allegations of resident abuse or neglect
            or misappropriation of resident property that are not
            specifically documented by the State under such subsection.''.
                (2) Due process requirements for rebutting allegations.--
            Section 1919(g)(1)(C) (42 U.S.C. 1396r(g)(1)(C)) is amended by
            striking the second sentence and inserting the following: ``The
            State shall, after providing the individual involved with a
            written notice of the allegations (including a statement of the
            availability of a hearing for the individual to rebut the
            allegations) and the opportunity for a hearing on the record,
            make a written finding as to the accuracy of the
            allegations.''.
                (3) Effective date.--The amendments made by this subsection
            shall take effect October 1, 1993.

    Subchapter C--Miscellaneous and Technical Corrections Relating to OBRA-
                                      1990

    SEC. 5151. EFFECTIVE DATE.

        Except as otherwise provided, the amendments made by this
    subchapter shall take effect as if included in the enactment of OBRA-
    1990.

    SEC. 5152. CORRECTIONS RELATING TO SECTION 4402 (ENROLLMENT UNDER GROUP
                  HEALTH PLANS).

        Section 4402(b) of OBRA-1990 is amended by striking
    ``1903(u)(1)(C)(iv) (42 U.S.C. 1396b(u)(1)(C)(iv))'' and inserting
    ``1903(u)(1)(D)(iv) (42 U.S.C. 1396b(u)(1)(D)(iv))''.

    SEC. 5153. CORRECTIONS RELATING TO SECTION 4501 (LOW-INCOME MEDICARE
                  BENEFICIARIES).

        (a) Section 1902(a)(10)(E)(iii), as added by section 4501(b)(3) of
    OBRA-1990, is amended by striking ``cost sharing'' and inserting
    ``cost-sharing''.
        (b) Section 1905(p)(4)(B), as amended by section 4501(c)(1) of
    OBRA-1990, is amended by striking ``1902(a)(10)(E)(iii)'' and inserting
    ``section 1902(a)(10)(E)(iii)''.

    SEC. 5154. CORRECTIONS RELATING TO SECTION 4601 (CHILD HEALTH).

        (a) Section 1902(a)(10)(A)(i)(VII), as added by section
    4601(a)(10)(A)(iii) of OBRA-1990, is amended by striking ``family;''
    and inserting ``family; and''.
        (b) Section 1902(l), as amended by section 4601(a)(1)(C) of OBRA-
    1990, is amended--
                (1) in paragraph (1)(C), by striking ``children'' after
            ``(C)'';
                (2) in paragraph (3), by striking ``(a)(10)(A)(i)(VII),,''
            and inserting ``(a)(10)(A)(i)(VII),''; and
                (3) in paragraph (4)(B), by inserting a comma before
            ``(a)(10)(A)(i)(VI),''.
        (c) Subsections (a)(3)(C) and (b)(3)(C)(i) of section 1925, as
    amended by section 4601(a) of OBRA-1990, are each amended by striking
    ``(i)(VI)'' and inserting ``(i)(VI),''.

    SEC. 5155. CORRECTIONS RELATING TO SECTION 4602 (OUTREACH LOCATIONS).

        (a) Section 1902(a)(55), as added by section 4602(a)(3) of OBRA-
    1990, is amended--
                (1) in the matter preceding subparagraph (A)--
                        (A) by striking ``subsection'' and inserting
                    ``paragraph'', and
                        (B) by striking ``(a)'' each place it appears; and
                (2) in subparagraph (A), by striking ``1905(1)(2)(B)'' and
            inserting ``1905(l)(2)(B)''.
        (b) Section 1902(l)(1) is amended by striking ``who are not
    described in any of subclauses (I) through (III) of subsection
    (a)(10)(A)(i) and''.

    SEC. 5156. CORRECTIONS RELATING TO SECTION 4604 (PAYMENT FOR HOSPITAL
                  SERVICES FOR CHILDREN UNDER 6 YEARS OF AGE).

        (a) Section 1902(a)(10) is amended in clause (X) in the matter
    following subparagraph (F) by striking ``under one year of age'' and
    inserting ``under 6 years of age''.
        (b) Section 1902(s), as added by section 4604(a) of OBRA-1990, is
    amended to read as follows:
        ``(s) In order to meet the requirements of subsection (a)(56), the
    State plan must provide that payments to hospitals under the plan for
    inpatient services furnished to infants who have not attained the age
    of 1 year (or, in the case of such an individual who is an inpatient on
    his first birthday, until such individual is discharged) shall--
                ``(1) if made on a prospective basis (whether per diem, per
            case, or otherwise) provide for an outlier adjustment in
            payment amounts for medically necessary inpatient hospital
            services involving exceptionally high costs or exceptionally
            long lengths of stay;
                ``(2) not be limited by the imposition of day limits; and
                ``(3) not be limited by the imposition of dollar limits
            (other than dollar limits resulting from prospective payments
            as adjusted pursuant to paragraph (1)).''.
        (c) Section 1923(a)(2)(C) is amended by striking ``provided on or
    after July 1, 1989,'' and all that follows and inserting the following:
    ``involving exceptionally high costs or exceptionally long lengths of
    stay--
                ``(i) for individuals under 1 year of age, in the case of
            services provided on or after July 1, 1989, and on or before
            June 30, 1991; and
                ``(ii) for individuals under 6 years of age, in the case of
            services provided on or after July 1, 1991.''.

    SEC. 5157. CORRECTIONS RELATING TO SECTION 4703 (PAYMENT ADJUSTMENTS
                  FOR DISPROPORTIONATE SHARE HOSPITALS).

        (a) Section 1923(c) is amended--
                (1) in paragraph (2), by striking ``paragraph (b)(3)'' and
            inserting ``subsection (b)(3)'';
                (2) by striking the period at the end of paragraph (3)(B)
            and inserting a comma; and
                (3) in the third sentence, by striking ``the payment
            adjustment described in paragraph (2)'' and inserting ``a
            payment adjustment described in paragraph (2) or (3)''.
        (b) Effective December 22, 1987, section 1923(d)(2)(A)(ii) is
    amended by striking ``the date of the enactment of this Act'' and
    inserting ``December 22, 1987''.
        (c) Section 4703(d) of OBRA-1990 is amended by striking
    ``412(a)(2)'' and inserting ``4112(a)(2)''.

    SEC. 5158. CORRECTIONS RELATING TO SECTION 4704 (FEDERALLY-QUALIFIED
                  HEALTH CENTERS).

        (a) Clause (ix) of section 1903(m)(2)(A), as added by section
    4704(b)(1)(C) of OBRA-1990, is amended--
                (1) by striking ``of such center'' the first place it
            appears;
                (2) by striking ``federally qualified'' and inserting
            ``Federally-qualified'';
                (3) by inserting ``section'' before ``1905(a)(2)(C)''; and
                (4) by moving such clause 2 ems to the left.
        (b) Section 1903(m)(2)(B), as amended by section 4704(b)(2) of
    OBRA-1990, is amended by striking ``except with respect to clause (ix)
    of subparagraph (A),'' and inserting ``(except with respect to clause
    (ix) of such subparagraph)''.
        (c) Section 1905(l)(2), as amended by section 4704(c) of OBRA-1990,
    is amended--
                (1) in subparagraph (A)--
                        (A) by striking ``Federally-qualififed'' and
                    inserting ``Federally-qualified'', and
                        (B) by striking ``an patient'' and inserting ``a
                    patient''; and
                (2) in subparagraph (B)--
                        (A) in the matter preceding clause (i), by striking
                    ``a entity'' and inserting ``an entity'',
                        (B) by striking ``or'' at the end of clause (i),
                        (C) by striking the semicolon at the end of clause
                    (ii)(II) and inserting ``, or'',
                        (D) by moving clause (ii) 4 ems to the left, and
                        (E) in the last sentence, by striking ``clause
                    (ii)'' and inserting ``clause (iii)''.

    SEC. 5159. CORRECTIONS RELATING TO SECTION 4708 (SUBSTITUTE
                  PHYSICIANS).

        Section 1902(a)(32)(C), as added by section 4708(a)(3) of OBRA-
    1990, is amended to read as follows:
                        ``(C) payment may be made to a physician for
                    physicians' services (and services furnished incident
                    to such services) furnished by a second physician to
                    patients of the first physician if (i) the first
                    physician is unavailable to provide the services; (ii)
                    the services are furnished pursuant to an arrangement
                    between the two physicians that (I) is informal and
                    reciprocal, or (II) involves per diem or other fee-for-
                    time compensation for such services; (iii) the services
                    are not provided by the second physician over a
                    continuous period of more than 60 days; and (iv) the
                    claim form submitted to the carrier for such services
                    includes the second physician's unique identifier
                    (provided under the system established under subsection
                    (x)) and indicates that the claim meets the
                    requirements of this clause for payment to the first
                    physician.''.

    SEC. 5160. CORRECTIONS RELATING TO SECTION 4711 (HOME AND COMMUNITY
                  CARE FOR FRAIL ELDERLY).

        (a) Section 1929, as added by section 4711(b) of OBRA-1990, is
    amended--
                (1) in subsection (c)(2)(F), by moving the second sentence
            2 ems to the right;
                (2) in subsection (d)(2)(F)(ii), by striking ``they
            manage'' and inserting ``it manages'';
                (3) in subsection (d)(2)(F)(iii), by inserting ``the agency
            or organization'' after ``(iii)'';
                (4) in subsection (e)(2)(B), by striking ``fiscal year
            1989'' and inserting ``fiscal year 1990'';
                (5) in subsection (f)(1), by striking ``Community care''
            and inserting ``community care'';
                (6) in subsection (g)(1)--
                        (A) by striking ``settings'' and inserting
                    ``setting'', and
                        (B) in subparagraph (B), by striking ``setting.''
                    and inserting ``setting in which home and community
                    care under this section is provided.'';
                (7) in subsection (g)(2), by striking ``community care''
            the second, third, and fourth places it appears and inserting
            ``home and community care'';
                (8) in subsection (h)(1)--
                        (A) by striking ``more than 8'' each place it
                    appears and inserting ``8 or more'', and
                        (B) in subparagraph (B), by inserting ``(other than
                    merely board)'' after ``personal services'';
                (9) in subsection (h)(2), by striking ``community care''
            the second and third places it appears and inserting ``home and
            community care'';
                (10) in subsection (j)(1)--
                        (A) in subparagraph (B)(ii), by striking ``1990''
                    and inserting ``1991'', and
                        (B) by adding at the end the following new
                    subparagraph:
                        ``(C) Applicability to community care settings.--
                    Subparagraphs (A) and (B) shall apply to community care
                    settings in the same manner as such subparagraphs apply
                    to providers of home or community care.'';
                (11) in subsection (j)(2), by adding at the end the
            following new subparagraph:
                        ``(D) Applicability to community care settings.--
                    Subparagraphs (A), (B), and (C) shall apply to
                    community care settings in the same manner as such
                    subparagraphs apply to providers of home or community
                    care.'';
                (12) in subsection (k)(1)(A)(i)--
                        (A) by striking ``(d)(2)(E)'' and inserting
                    ``(d)(2)'', and
                        (B) by striking ``settings,'' and inserting
                    ``settings),'';
                (13) in subsection (l), by striking ``State wideness'' and
            inserting ``Statewideness'';
                (14) in subsection (m)--
                        (A) in paragraph (2), by striking ``Individual
                    Community Care Plan'' and inserting ``individual
                    community care plan'',
                        (B) in paragraph (3), by striking ``and need for
                    services'' and inserting ``need for services, and
                    income'',
                        (C) in the second sentence in paragraph (4), by
                    striking ``elderly individuals'' and all that follows
                    and inserting ``individuals receiving home and
                    community care under this section who reside in such
                    State in relation to the total number of individuals
                    receiving home and community care under this
                    section.'', and
                        (D) by adding at the end the following new
                    paragraph:
                ``(5) Notice to states of amounts available for
            assistance.--
                        ``(A) Notice to secretary.--In order to receive
                    Federal medical assistance for expenditures for home
                    and community care under this section for a fiscal year
                    (beginning with fiscal year 1994), a State shall submit
                    a notice to the Secretary of its intention to provide
                    such care under this section not later than 3 months
                    before the beginning of the fiscal year.
                        ``(B) Notice to states.--Not later than 2 months
                    before the beginning of each fiscal year (beginning
                    with fiscal year 1994), the Secretary shall notify each
                    State that has submitted a notice to the Secretary
                    under subparagraph (A) for the fiscal year of the
                    amount of Federal medical assistance that will be
                    available to the State for the fiscal year (as
                    established under paragraph (4)).''; and
                (15) by adding at the end the following new subsection:
        ``(n) Community Care Setting Defined.--In this section, the term
    `community care setting' means a small community care setting (as
    defined in subsection (g)(1)) or a large community care setting (as
    defined in subsection (h)(1)).''.
        (b) Section 1905(r)(5) is amended by striking ``1905(a)'' and
    inserting ``subsection (a) (other than services described in paragraph
    (22) or (23) of such subsection)''.
        (c) Section 4711(f) of OBRA-1990 is amended by striking ``Act''
    each place it appears and inserting ``section''.

    SEC. 5161. CORRECTIONS RELATING TO SECTION 4712 (COMMUNITY SUPPORTED
                  LIVING ARRANGEMENTS SERVICES).

        (a) Section 1930, as added by section 4712(b)(2) of OBRA-1990, is
    amended--
                (1) in subsection (b)--
                        (A) by striking ``title the term,'' and inserting
                    ``title, the term'',
                        (B) by striking ``guardian'' and inserting
                    ``guardian or'', and
                        (C) by striking ``3 other'' and inserting ``3'';
                (2) in subsection (d)--
                        (A) in the matter preceding paragraph (1), by
                    striking ``program,'' and inserting ``program'', and
                        (B) in the second sentence, by striking ``plan''
                    each place it appears and inserting ``program''; and
                (3) in subsection (i), by striking ``funds'' and inserting
            ``Funds''.
        (b) Section 4712(c) of OBRA-1990 is amended--
                (1) in paragraph (1), by inserting ``of section 1930 of the
            Social Security Act'' after ``subsection (h)''; and
                (2) in paragraph (2), by striking ``this section'' and
            inserting ``such section''.

    SEC. 5162. CORRECTION RELATING TO SECTION 4713 (COBRA CONTINUATION
                  COVERAGE).

        (a) Section 1902(a)(10) is amended in the matter following
    subparagraph (F)--
                (1) by striking ``; and (XI)'' and inserting ``, (XI)'';
                (2) by striking ``individuals, and (XI)'' and inserting
            ``individuals, and (XII)''; and
                (3) by striking ``COBRA continuation premiums'' and
            inserting ``COBRA premiums''.
        (b) Section 1902(u)(3), as added by section 4713(a)(2) of OBRA-
    1990, is amended by striking ``title VI'' and inserting ``part 6 of
    subtitle B of title I''.

    SEC. 5163. CORRECTION RELATING TO SECTION 4716 (MEDICAID TRANSITION FOR
                  FAMILY ASSISTANCE).

        Section 4716(a) of OBRA-1990 is amended by striking ``Amendments.--
    Subsection (f) of section'' and inserting ``In General.--Section''.

    SEC. 5164. CORRECTIONS RELATING TO SECTION 4723 (MEDICAID SPENDDOWN
                  OPTION).

        Section 1903(f)(2), as amended by section 4723(a) of OBRA-1990, is
    amended--
                (1) by striking ``(A)'' after ``(2)'';
                (2) by striking ``or, (B)'' and inserting ``. There shall
            also be excluded,'';
                (3) by striking ``to the State, provided that'' and
            inserting ``to the State if''; and
                (4) by striking ``pursuant to this subparagraph.'' and
            inserting ``pursuant to the previous sentence''.

    SEC. 5165. CORRECTIONS RELATING TO SECTION 4724 (OPTIONAL STATE
                  DISABILITY DETERMINATIONS).

        Section 1902(v), as added by section 4724 of OBRA-1990, is
    amended--
                (1) by striking ``(v)(1)'' and inserting ``(v)''; and
                (2) by striking ``of the Social Security Act''.

    SEC. 5166. CORRECTION RELATING TO SECTION 4732 (SPECIAL RULES FOR
                  HEALTH MAINTENANCE ORGANIZATIONS).

        Section 1903(m)(2)(F)(i), as amended by section 4732(b)(2)(B) of
    OBRA-1990, is amended by striking ``or'' before ``with an eligible
    organization''.

    SEC. 5167. CORRECTIONS RELATING TO SECTION 4741 (HOME AND COMMUNITY-
                  BASED WAIVERS).

        The first sentence of section 1915(d)(3) is amended by striking the
    period at the end and inserting the following: ``, and a waiver of the
    requirements of section 1902(a)(23) (relating to choice of providers)
    insofar as such requirements relate to the provision of case management
    services and the State provides assurances satisfactory to the
    Secretary that a waiver of such requirements will not substantially
    limit access to such services).''

    SEC. 5168. CORRECTIONS RELATING TO SECTION 4744 (FRAIL ELDERLY
                  WAIVERS).

        (a) Section 1924(a)(5), as added by section 4744(b)(1) of OBRA-
    1990, is amended by striking ``1986.'' and inserting ``1986 or a waiver
    under section 603(c) of the Social Security Amendments of 1983.''.
        (b) Section 603(c) of the Social Security Amendments of 1983 is
    amended--
                (1) by striking ``(c)'' and inserting ``(c)(1)'';
                (2) by redesignating paragraphs (1) and (2) as
            subparagraphs (A) and (B); and
                (3) by adding at the end the following new paragraph:
        ``(2) Section 1924 of the Social Security Act shall apply to any
    individual receiving services from an organization receiving a waiver
    under this subsection.''.

    SEC. 5169. CORRECTIONS RELATING TO SECTION 4747 (COVERAGE OF HIV-
                  POSITIVE INDIVIDUALS).

        Section 4747 of OBRA-1990 is amended--
                (1) in subsection (a), by striking ``subsection (c)'' and
            inserting ``subsection (b)'';
                (2) in subsection (b)(2)--
                        (A) by striking ``preventative'' each place it
                    appears and inserting ``preventive'', and
                        (B) by adding a period at the end of subparagraph
                    (J);
                (3) in subsection (c)(1)--
                        (A) by striking ``subsection (c)'' and inserting
                    ``subsection (b)'', and
                        (B) by striking ``paragraphs (1) and (2) of''; and
                (4) in subsection (d)--
                        (A) by striking ``paragraph (3)'' and inserting
                    ``subsection (b)'', and
                        (B) by striking ``paragraph (1)'' and inserting
                    ``subsection (a)''.

    SEC. 5170. CORRECTION RELATING TO SECTION 4751 (ADVANCE DIRECTIVES).

        Section 1903(m)(1)(A), as amended by section 4751(b)(1) of OBRA-
    1990, is amended--
                (1) by striking ``1902(w)'' and inserting ``1902(w) and'';
            and
                (2) by striking ``1902(a)'' and inserting ``1902(w)''.

    SEC. 5171. CORRECTIONS RELATING TO SECTION 4752 (PHYSICIANS' SERVICES).

        (a) The paragraph (58) of section 1902(a) added by section
    4752(c)(1)(C) of OBRA-1990 is amended by striking ``subsection (v)''
    and inserting ``subsection (x)''.
        (b) Subparagraphs (A) and (B) of the paragraph (14) of section
    1903(i) added by section 4752(e)(2) of OBRA-1990 are each amended--
                (1) by striking ``or'' at the end of clause (v);
                (2) by redesignating clause (vi) as clause (vii); and
                (3) by inserting after clause (v) the following new clause:
                                ``(vi) delivers such services in the
                            emergency department of a hospital
                            participating in the state plan approved under
                            this title, or''.

    SEC. 5172. CORRECTIONS RELATING TO SECTION 4801 (NURSING HOME REFORM).

        (a) Section 1919(b)(3)(C)(i)(I), as amended by section 4801(e)(3)
    of OBRA-1990, is amended by striking ``no later than'' before ``not to
    exceed 14 days''.
        (b) Section 1919(b)(5)(D), as amended by section 4801(a)(4) of
    OBRA-1990, is amended by striking the comma before ``or a new
    competency evaluation program.''.
        (c) Section 1919(b)(5)(G) is amended by striking ``or licensed or
    certified social worker'' and inserting ``licensed or certified social
    worker, registered respiratory therapist, or certified respiratory
    therapy technician''.
        (d) Section 1919(f)(2)(B)(i) is amended by striking ``facilities,''
    and inserting ``facilities (subject to clause (iii)),''.
        (e) Section 1919(f)(2)(B)(iii)(I)(c) is amended by striking
    ``clauses'' each place it appears and inserting ``clause''.
        (f) Section 1919(g)(5)(B) is amended by striking ``paragraphs'' and
    inserting ``paragraph''.
        (g) Section 4801(a)(6)(B) of OBRA-1990 is amended--
                (1) by striking ``The amendments'' and inserting ``(i) The
            amendments'';
                (2) by redesignating clauses (i) through (v) as subclauses
            (I) through (V); and
                (3) by adding at the end the following new clause:
                        ``(ii) Notwithstanding clause (i) and subject to
                    section 1919(f)(2)(B)(iii) of the Social Security Act
                    (as amended by subparagraph (A)), a State may approve a
                    training and competency evaluation program or a
                    competency evaluation program offered by or in a
                    nursing facility described in clause (i) if, during the
                    previous 2 years, none of the subclauses of clause (i)
                    applied to the facility.''.

    SEC. 5173. OTHER TECHNICAL CORRECTIONS.

        (a) Section 1905(o)(1)(A) is amended--
                (1) in the first sentence, by striking ``intermediate care
            facility services'' and inserting ``for nursing facility
            services or intermediate care facility services for the
            mentally retarded''; and
                (2) in the second sentence, by striking ``or intermediate
            care facility'' and inserting ``(for purposes of title XVIII),
            a nursing facility, or an intermediate care facility for the
            mentally retarded''.
        (b) Section 1915(d) is amended--
                (1) by striking ``skilled nursing facility or intermediate
            care facility'' each place it appears in paragraphs (1),
            (2)(B), and (2)(C) and inserting ``nursing facility'';
                (2) in paragraph (2)(B)(i), by striking ``skilled nursing
            or intermediate care facility'' and inserting ``nursing
            facility'';
                (3) in paragraph (5)(A), by striking ``under'' the second
            place it appears and inserting ``(or, in the case of waiver
            years beginning on or after October 1, 1990, with respect to
            nursing facility services and home and community-based
            services) under''; and
                (4) in paragraph (5)(B)--
                        (A) in clause (i), by striking ``furnished'' and
                    inserting ``(or, with respect to waiver years beginning
                    on or after October 1, 1990, for nursing facility
                    services) furnished''; and
                        (B) in clause (iii)(I), by striking ``(regardless''
                    and inserting ``(or, with respect to waiver years
                    beginning on or after October 1, 1990, which comprise
                    nursing facility services) (regardless''.

    SEC. 5174. CORRECTIONS TO DESIGNATIONS OF NEW PROVISIONS.

        (a) Paragraphs Added to Section 1902(a).--Section 1902(a) is
    amended--
                (1) by striking ``and'' at the end of paragraph (54);
                (2) in the paragraph (55) inserted by section 4602(a)(3) of
            OBRA-1990, by striking the period at the end and inserting a
            semicolon;
                (3) by redesignating the paragraph (55) inserted by section
            4604(b)(3) of OBRA-1990 as paragraph (56), by transferring and
            inserting it after the paragraph (55) inserted by section
            4602(a)(3) of such Act, and by striking the period at the end
            and inserting a semicolon;
                (4) by placing paragraphs (57) and (58), inserted by
            section 4751(a)(1)(C) of OBRA-1990, immediately after paragraph
            (56), as redesignated by paragraph (3);
                (5) in the paragraph (58) inserted by section 4751(a)(1)(C)
            of OBRA-1990, by striking the period at the end and inserting
            ``; and''; and
                (6) by redesignating the paragraph (58) inserted by section
            4752(c)(1)(C) of OBRA-1990 as paragraph (59) and by
            transferring and inserting it after the paragraph (58) inserted
            by section 4751(a)(1)(C) of such Act.
        (b) Paragraphs Added to Section 1903(i).--Section 1903(i), as
    amended by section 2(b)(2) of the Medicaid Voluntary Contribution and
    Provider-Specific Tax Amendments of 1991, is amended--
                (1) in the paragraph (10) inserted by section 4401(a)(1)(B)
            of OBRA-1990, by striking all that follows ``1927(g)'' and
            inserting a semicolon;
                (2) by redesignating the paragraph (12) inserted by section
            4752(a)(2) of OBRA-1990 as paragraph (11), by transferring and
            inserting it after the paragraph (10) inserted by section
            4401(a)(1)(B) of OBRA-1990, and by striking the period at the
            end and inserting a semicolon;
                (3) by redesignating the paragraph (14) inserted by section
            4752(e) of OBRA-1990 as paragraph (12), by transferring and
            inserting it after paragraph (11), as redesignated by paragraph
            (2), and by striking the period at the end and inserting ``;
            or''; and
                (4) by redesignating the paragraph (11) inserted by section
            4801(e)(16)(A) of OBRA-1990 as paragraph (13) and by
            transferring and inserting it after paragraph (12), as
            redesignated by paragraph (3).
        (c) Paragraphs Added to Section 1905(a).--
                (1) In general.--Section 1905(a) is amended--
                        (A) by striking ``and'' at the end of paragraph
                    (21);
                        (B) in paragraph (24), by striking the period at
                    the end and inserting ``; and''; and
                        (C) by redesignating paragraphs (22), (23), and
                    (24) as paragraphs (24), (22), and (23), respectively,
                    and by transferring and inserting paragraph (24) after
                    paragraph (23), as so redesignated.
                (2) Conforming amendments.--(A) Effective July 1, 1991,
            section 1902(a)(10)(C)(iv), as amended by section 4755(c)(1)(A)
            of OBRA-1990, is amended by striking ``through (21)'' and
            inserting ``through (23)''.
                (B) Effective July 1, 1991, section 1902(j), as amended by
            section 4711(d)(1) of OBRA-1990, is amended by striking
            ``through (22)'' and inserting ``through (24)''.
        (d) Final Sections.--Section 1928, as redesignated by section
    4401(a)(3) of OBRA-1990, is amended--
                (1) by transferring such section to the end of title XIX of
            the Social Security Act; and
                (2) by redesignating such section as section 1931.

             CHAPTER 2--UNIVERSAL ACCESS TO CHILDHOOD IMMUNIZATIONS

    SEC. 5181. ESTABLISHMENT OF ENTITLEMENT AND MONITORING PROGRAMS WITH
                  RESPECT TO CHILDHOOD IMMUNIZATIONS.

        (a) In General.--Title XXI of the Public Health Service Act (42
    U.S.C. 300aa-1 et seq.) is amended by adding at the end the following
    subtitle:

       ``Subtitle 3--Entitlement and Monitoring Programs With Respect to
                            Childhood Immunizations

                         ``PART A--ENTITLEMENT PROGRAM

    ``SEC. 2151. DELIVERY TO STATES OF SUFFICIENT QUANTITIES OF PEDIATRIC
                  VACCINES.

        ``(a) In General.--In the case of any State that submits to the
    Secretary an application in accordance with section 2157, the
    Secretary, acting through the Director of the Centers for Disease
    Control and Prevention, shall provide for the purchase and delivery on
    behalf of the State of such quantities of pediatric vaccines as may be
    necessary for the immunization of each eligible child in the State. The
    preceding sentence is subject to sections 2152(d) and 2159(a).
        ``(b) Eligible Children.--For purposes of this part, the term
    `eligible child' means an individual 18 years of age or younger who--
                ``(1) with respect to the State involved, is entitled to
            medical assistance under the plan approved for the State under
            title XIX of the Social Security Act (including a State
            operating under a statewide waiver under section 1115 of such
            Act);
                ``(2)(A) is uninsured with respect to health insurance
            policies or plans (including group health plans or prepaid
            health plans and including employee welfare benefit plans under
            the Employee Retirement Income Security Act of 1974); or
                ``(B) is covered under such a policy or plan, but under the
            policy or plan benefits are not available with respect to
            immunizations; or
                ``(3) is an Indian.

    ``SEC. 2152. ENTITLEMENTS.

        ``(a) Entitlement of States.--Subject to subsection (d), in the
    case of any State that submits to the Secretary an application in
    accordance with section 2157, the State is entitled to have the
    Secretary provide for the purchase and delivery on behalf of the State
    of pediatric vaccines under section 2151. The preceding sentence
    constitutes budget authority in advance of appropriations Acts, and
    represents the obligation of the Federal Government to provide for the
    purchase and delivery to the State of the vaccines.
        ``(b) Entitlements of Children and Health Care Providers.--Subject
    to subsection (d), the Secretary may provide for the purchase and
    delivery of pediatric vaccines under section 2151 on behalf of a State
    only if the State agrees as follows:
                ``(1) Each eligible child in the State, in receiving an
            immunization with a pediatric vaccine from a program-registered
            provider (as defined in section 2153(a)), is entitled to
            receive the immunization without charge for the cost of such
            vaccine.
                ``(2) Each program-registered provider in the State who
            administers a pediatric vaccine to an eligible child in the
            State is entitled to receive such vaccine from the State
            without charge.
                ``(3) The State will carry out a program to administer the
            entitlements established pursuant to paragraphs (1) and (2).
        ``(c) Enforcement of Provider Rights by Eligible Children.--With
    respect to the obligation of a State under the entitlement established
    in subsection (b)(2), an eligible child (or representative of the
    child) may enforce the rights of the provider under such paragraph if--
                ``(1) the provider administered a pediatric vaccine to the
            child notwithstanding the failure of the State to carry out
            such obligation with respect to the vaccine; or
                ``(2) an immunization with the vaccine was sought for the
            child by a parent of the child, but the provider, on the basis
            of such failure of the State, did not administer the vaccine to
            the child.
        ``(d) Certain Conditions.--
                ``(1) In general.--This part does not apply with respect to
            any vaccine administered before October 1, 1994.
                ``(2) Relationship to purchase contracts with
            manufacturers.--With respect to a pediatric vaccine, the
            obligation of the Federal Government pursuant to subsection
            (a), and the obligations of the State pursuant to subsection
            (b), are effective only to the extent that there is in effect a
            contract under section 2158 for the purchase and delivery of
            the vaccine.
                ``(3) Submission of application.--
                        ``(A) Subject to subparagraph (C), the entitlements
                    established pursuant to subsections (a) and (b) are
                    established with respect to a State upon the State
                    submitting to the Secretary an application in
                    accordance with section 2157.
                        ``(B) An application submitted to the Secretary
                    under section 2157 is deemed to have been submitted in
                    accordance with such section unless the Secretary, not
                    later than 30 days after the date on which the
                    application is submitted, notifies the State that the
                    application is not in accordance with such section.
                        ``(C) In the case of a State whose application
                    submitted under section 2157 is not submitted in
                    accordance with such section, the Secretary may, upon
                    the submission by the State of an application that is
                    in accordance with such section, provide that the
                    entitlements established pursuant to such submission
                    are deemed to have been established on the date on
                    which the State first submitted the application.

    ``SEC. 2153. VOLUNTARY PARTICIPATION OF HEALTH CARE PROVIDERS.

        ``(a) In General.--
                ``(1) Request for participation; required approval.--The
            Secretary may provide for the purchase and delivery of
            pediatric vaccines under section 2151 on behalf of a State only
            if the State agrees that federally-supplied pediatric vaccines
            will not be distributed to a health care provider unless--
                        ``(A) the provider submits to the State a written
                    request to participate in the program established by
                    the State pursuant to section 2152(b)(3);
                        ``(B) the request is in such form and is made in
                    such manner as the Secretary may require; and
                        ``(C) the provider makes the agreements described
                    in this section.
                ``(2) Program-registered providers.--For purposes of this
            part, the term `program-registered provider' means a health
            care provider that meets the conditions specified in
            subparagraphs (A) through (C) of paragraph (1).
        ``(b) Eligibility of Children.--
                ``(1) In general.--An agreement for a health care provider
            under subsection (a) is that the provider--
                        ``(A) before administering a pediatric vaccine to a
                    child, will ask a parent of the child such questions as
                    are necessary to determine whether the child is an
                    eligible child;
                        ``(B) will, for a period of time specified by the
                    Secretary, maintain records of responses made to the
                    questions; and
                        ``(C) will, upon request, make such records
                    available to the State involved and to the Secretary,
                    subject to paragraph (2).
                ``(2) Restriction on use of information.--Records provided
            to a State or to the Secretary under paragraph (1)(C) may be
            used only for purposes of audit of the program carried out
            under section 2152(b)(3) by the State.
        ``(c) Charges for Vaccines.--
                ``(1) Vaccines per se.--An agreement for a health care
            provider under subsection (a) is that, in administering a
            federally-supplied pediatric vaccine to an eligible child, the
            provider will not impose a charge for the cost of the vaccine.
                ``(2) Administration of vaccines.--With respect to
            compliance with an agreement under paragraph (1), a program-
            registered provider may impose a charge for the administration
            of a federally-supplied pediatric vaccine, subject to an
            agreement by the provider that the provider will not impose
            such charge with respect to a child if a parent of the child
            certifies to the provider that the parent is unable to pay the
            charge.
        ``(d) Rules of Construction.--
                ``(1) Extent of participation.--This section may not be
            construed as requiring that a program-registered provider
            administer a federally-supplied pediatric vaccine to each
            eligible child for whom an immunization with the vaccine is
            sought from the provider.
                ``(2) Verification of information.--With respect to
            compliance with agreements under subsections (b) and (c), such
            agreements may not be construed as requiring a program-
            registered provider to verify independently the information
            provided to the provider by a parent pursuant to such
            subsections.

    ``SEC. 2154. INTRASTATE DISTRIBUTION OF PEDIATRIC VACCINES.

        ``(a) In General.--Not later than 180 days after the date of the
    enactment of the Omnibus Budget Reconciliation Act of 1993, the
    Secretary shall, through publication in the Federal Register, establish
    criteria for the delivery on behalf of the States of federally-supplied
    pediatric vaccines to program-registered providers in the State.
        ``(b) Involvement of Certain Providers.--
                ``(1) In general.--In establishing criteria under
            subsection (a), the Secretary shall establish criteria with
            respect to encouraging the entities described in paragraph (2)
            to become program-registered providers.
                ``(2) Relevant providers.--The entities referred to in
            paragraph (1) are--
                        ``(A) private health care providers; and
                        ``(B)(i) health care providers that receive funds
                    under title V of the Indian Health Care Improvement
                    Act;
                        ``(ii) the Indian Health Service; and
                        ``(iii) health programs or facilities operated by
                    Indian tribes or tribal organizations.
        ``(c) Cultural Context of Services.--In establishing criteria under
    subsection (a), the Secretary shall require that, in providing a
    federally-supplied pediatric vaccine to any population of eligible
    children a substantial portion of whose parents have a limited ability
    to speak the English language, a State have in effect a reasonable plan
    to administer the vaccines through program-registered providers who are
    able to communicate with the population involved in the language and
    cultural context that is most appropriate.
        ``(d) Compliance by States.--The Secretary may provide for the
    purchase and delivery of pediatric vaccines under section 2151 on
    behalf of a State only if the State agrees to maintain compliance with
    the criteria established under subsection (a).

    ``SEC. 2155. GENERAL PROVISIONS.

        ``(a) Federal Standards on Accountability.--
                ``(1) Establishment of standards.--Not later than 180 days
            after the date of the enactment of the Omnibus Budget
            Reconciliation Act of 1993, the Secretary shall, through
            publication in the Federal Register, establish standards with
            respect to determining the extent to which States and program-
            registered providers are in compliance with the agreements made
            under this part.
                ``(2) Compliance by states.-- The Secretary may provide for
            the purchase and delivery of pediatric vaccines under section
            2151 on behalf of a State only if the State agrees to maintain
            compliance with the standards established under subsection (a).
        ``(b) State Maintenance of Immunization Laws.--The Secretary may
    provide for the purchase and delivery of vaccines under section 2151 on
    behalf of a State only if the State certifies to the Secretary that, if
    it had in effect as of May 1, 1993, a law that requires some or all
    health insurance policies or plans to provide some coverage with
    respect to a pediatric vaccine, the State has not modified or repealed
    such law in a manner that reduces the amount of coverage so required.
        ``(c) Participation in National Monitoring System.--On and after
    January 1, 1998, the Secretary may provide for the purchase and
    delivery of vaccines under section 2151 on behalf of a State only if
    the State certifies to the Secretary that the State is operating a
    registry in accordance with part B.

    ``SEC. 2156. STATE OPTION REGARDING IMMUNIZATION OF ADDITIONAL
                  CATEGORIES OF CHILDREN.

        ``(a) State Purchases.--Subject to subsections (b) and (c), for the
    purpose of administering a pediatric vaccine to children in addition to
    eligible children, any participating State under section 2151 may,
    pursuant to section 2158(a)(2), purchase the vaccine from a
    manufacturer of the vaccine at the price in effect under section 2158.
        ``(b) Requirements.--A State may purchase pediatric vaccines
    pursuant to subsection (a) only if the following conditions are met:
                ``(1) The State agrees that the vaccines will be used to
            provide immunizations for children who are not eligible
            children.
                ``(2) The State designates the particular categories of
            children who are to receive the immunizations, and submits to
            the Secretary a description of the categories so designated.
                ``(3) The State provides to the Secretary such information
            as the Secretary determines to be necessary to provide for
            quantities of pediatric vaccines for the State to purchase
            pursuant to section 2158(a)(2).
                ``(4) The State agrees, subject to subsection (c), that the
            program established by the State pursuant to section 2152(b)(3)
            applies to children designated under paragraph (2) to the same
            extent and in the same manner as the program applies to
            eligible children (except for the State being the purchaser of
            the pediatric vaccines involved).
        ``(c) Certain Limitations.--A State may purchase pediatric vaccines
    pursuant to subsection (a) only if the State agrees as follows:
                ``(1) The authorization established in such subsection with
            respect to a pediatric vaccine is subject to the quantity of
            the vaccine that, on behalf of the State, the Secretary
            provides for under section 2158(a)(2).
                ``(2) In any case in which multiple contracts are in effect
            under section 2158 with respect to such a vaccine and the State
            elects to purchase the vaccine pursuant to subsection (a), the
            Secretary will determine which of such contracts will be
            applicable to the purchase.

    ``SEC. 2157. STATE APPLICATION FOR VACCINES.

        ``(a) In General.--An application by a State for pediatric vaccines
    under section 2151(a) is in accordance with this section if the
    application--
                ``(1) is submitted not later than the date specified by the
            Secretary;
                ``(2) contains each agreement required in this part
            (including the agreements required in section 2156, if the
            State is electing to purchase pediatric vaccines pursuant to
            such section);
                ``(3) contains any information required in this part to be
            submitted to the Secretary (including the information required
            in section 2156, if the State is electing to purchase pediatric
            vaccines pursuant to such section);
                ``(4) contains the certification required in subsection (b)
            of section 2155 and, as applicable, the certification required
            in subsection (c) of such section; and
                ``(5) is in such form, is made in such manner, and contains
            such agreements, assurances, and information as the Secretary
            determines to be necessary to carry out this part.
        ``(b) Failure to Apply.--
                ``(1) In general.--If, as of January 1, 1998, a State is
            not receiving pediatric vaccines under section 2151 and
            carrying out a program pursuant to section 2152(b)(3), the
            Secretary shall, subject to paragraph (2), terminate payments
            to the State under part A of title XIX.
                ``(2) Exceptions.--Paragraph (1) does not apply in the case
            of a State described in such paragraph that--
                        ``(A) is, through all willing health care
                    providers, providing for the immunization of eligible
                    children with pediatric vaccines, and is not imposing a
                    charge on such providers or children for the costs of
                    the vaccines; or
                        ``(B) meets or exceeds the objectives established
                    by the Secretary for the year 2000 for the immunization
                    status of children in the United States who are 2 years
                    of age.

    ``SEC. 2158. CONTRACTS WITH MANUFACTURERS OF PEDIATRIC VACCINES.

        ``(a) In General.--Subject to the provisions of this section, the
    Secretary shall periodically enter into negotiations with manufacturers
    of pediatric vaccines for the purpose of maintaining contracts under
    which--
                ``(1) the Secretary provides for the purchase of quantities
            of pediatric vaccines necessary for carrying out section 2151,
            and provides for the delivery of the vaccines to participating
            States under such section; and
                ``(2) each participating State, at the option of the State
            under section 2156, is permitted to obtain additional
            quantities of pediatric vaccines (subject to limits in such
            contracts regarding quantities) through purchasing the vaccines
            from the manufacturers at the price negotiated by the Secretary
            for the quantities specified in paragraph (1).
    The Secretary shall enter into the initial negotiations under the
    preceding sentence not later than 180 days after the date of the
    enactment of the Omnibus Budget Reconciliation Act of 1993.
        ``(b) Negotiation of Purchase Price.--
                ``(1) In general.--In negotiating the prices at which
            pediatric vaccines will be purchased from a manufacturer under
            subsection (a), the Secretary shall negotiate a price that
            provides a reasonable profit for the manufacturer.
                ``(2) Certain factors.--
                        ``(A) In determining a reasonable profit for a
                    manufacturer under paragraph (1), the Secretary shall
                    consider the following factors:
                                ``(i) The costs of the manufacturer in
                            researching, developing, and producing the
                            pediatric vaccine involved.
                                ``(ii) The costs of the manufacturer in
                            researching and developing new or improved
                            vaccines (pediatric or otherwise).
                                ``(iii) The costs of shipping and handling
                            pediatric vaccines in compliance with the
                            agreement under subsection (c).
                                ``(iv) Such other factors as the Secretary
                            determines to be appropriate.
                        ``(B) With respect to factors considered under
                    subparagraph (A), the Secretary may enter into a
                    contract under subsection (a) only if the manufacturer
                    involved provides to the Secretary such information
                    regarding the factors as the Secretary determines to be
                    appropriate.
                ``(3) Confidentiality.--With respect to information
            provided to the Secretary by a manufacturer under paragraph
            (2), the following applies:
                        ``(A) The Secretary shall maintain the
                    confidentiality of the information, with provision for
                    reasonable disclosures.
                        ``(B) For purposes of section 552(b)(4) of title 5,
                    United States Code, the information shall be considered
                    to be trade secrets and commercial or financial
                    information obtained from a person and privileged or
                    confidential.
                        ``(C) Section 1905 of title 18, United States Code,
                    applies to information maintained confidentially under
                    subparagraph (A).
        ``(c) Charges for Shipping and Handling.--The Secretary may enter
    into a contract under subsection (a) only if the manufacturer involved
    agrees that the manufacturer will provide for delivering the vaccines
    on behalf of the States in accordance with the programs established by
    the States pursuant to section 2152(b)(3), and will not impose any
    charges for the costs of such delivery (except to the extent such costs
    are provided for in the price negotiated under subsection (b)).
        ``(d) Quantity of Vaccines.--For the purpose of ensuring that the
    Federal Government has the ability to carry out section 2151, the
    Secretary, in negotiations under subsection (a), shall negotiate for
    maintaining a supply of pediatric vaccines to meet unanticipated needs
    for the vaccines. For purposes of the preceding sentence, the Secretary
    shall negotiate for a 6-month supply of vaccines in addition to the
    quantity that the Secretary otherwise would provide for in such
    negotiations. In carrying out this paragraph, the Secretary shall
    consider the potential for outbreaks of the diseases with respect to
    which the vaccines have been developed.
        ``(e) Negotiating Authority of Secretary.--In carrying out
    subsection (a), the Secretary, to the extent determined by the
    Secretary to be appropriate, may enter into contracts described in such
    subsection, may decline to enter into such contracts, and with the
    consent of the manufacturers involved, may modify such agreements and
    may extend such agreements.
        ``(f) Certain Contract Provisions.--
                ``(1) Duration.--A contract entered into by the Secretary
            under subsection (a) is effective for such period as the
            Secretary and the manufacturer involved may agree in the
            contract.
                ``(2) Advance funding.--The Secretary may, pursuant to
            section 2152(a), enter into contracts under subsection (a)
            under which the Federal Government is obligated to make
            outlays, the budget authority for which is not provided for in
            advance in appropriations Acts.
        ``(g) Reports to Secretary.--The Secretary may enter into a
    contract under subsection (a) only if the manufacturer involved agrees
    to submit to the Secretary such reports as the Secretary determines to
    be appropriate with respect to compliance with the contract. For
    purposes of paragraph (3) of subsection (b), such reports shall be
    considered to be information provided by the manufacturer to the
    Secretary under paragraph (2) of such subsection.
        ``(h) Multiple Suppliers.--
                ``(1) In general.--In the case of the pediatric vaccine
            involved, the Secretary shall, as appropriate, enter into a
            contract under subsection (a) with each manufacturer of the
            vaccine that meets the terms and conditions of the Secretary
            for an award of such a contract (including terms and conditions
            regarding safety, quality, and price).
                ``(2) Rule of construction.--With respect to multiple
            contracts entered into pursuant to paragraph (1), such
            paragraph may not be construed as prohibiting the Secretary
            from having in effect different prices under each of such
            contracts.

    ``SEC. 2159. CERTAIN ADMINISTRATIVE VARIATIONS.

        ``(a) Tribes and Tribal Organizations.--
                ``(1) In general.--Subject to paragraph (2), the Secretary
            shall provide for the purchase and delivery on behalf of each
            Indian tribe and each tribal organization of such quantities of
            pediatric vaccines as may be necessary for the immunization of
            each Indian child in the State in which the tribe or
            organization (as the case may be) is located.
                ``(2) Entitlements; administering program.--The Secretary
            may provide for the purchase and delivery of pediatric vaccines
            under paragraph (1) on behalf of an Indian tribe or tribal
            organization only if the tribe or organization (as the case may
            be) agrees that this part applies to the tribe or organization
            (in relation to Indian children) to the same extent and in the
            manner as such part applies to States (in relation to eligible
            children).
        ``(b) State as Manufacturer.--
                ``(1) Payments in lieu of vaccines.--In the case of a
            participating State under section 2151 that manufactures a
            pediatric vaccine and is not receiving the vaccine under such
            section, if the Secretary determines that the program of the
            State under 2152(b)(3) is carried out with respect to the
            vaccine, the Secretary shall provide to the State an amount
            equal to the value of the quantity of such vaccine that
            otherwise would have been delivered to the State under section
            2151, subject to the provisions of this subsection.
                ``(2) Determination of value.--In determining the amount to
            pay a State under paragraph (1) with respect to a pediatric
            vaccine, the value of the quantity of vaccine shall be
            determined on the basis of the price in effect for the vaccine
            under contracts under section 2158. If more than 1 such
            contract is in effect, the Secretary shall determine such value
            on the basis of the average of the prices under the contracts,
            after weighting each such price in relation to the quantity of
            vaccine under the contract involved.
                ``(3) Use of payments.--A State may expend payments
            received under paragraph (1) only for purposes relating to
            pediatric vaccines.

    ``SEC. 2160. LIST OF PEDIATRIC VACCINES; SCHEDULE FOR ADMINISTRATION.

        ``(a) Recommended Pediatric Vaccines.--
                ``(1) In general.--The Secretary shall establish a list of
            the vaccines that the Secretary recommends for administration
            to all children for the purpose of immunizing the children,
            subject to such contraindications for particular medical
            categories of children as the Secretary may establish under
            subsection (b)(1)(D). The Secretary shall periodically review
            the list, and shall revise the list as appropriate.
                ``(2) Rule of construction.--
                        ``(A) The list of vaccines specified in
                    subparagraph (B) is deemed to be the list of vaccines
                    maintained under paragraph (1).
                        ``(B) The list of vaccines specified in this
                    subparagraph is the list of vaccines that, for purposes
                    of paragraph (1), is established (and periodically
                    reviewed and as appropriate revised) by the Advisory
                    Committee on Immunization Practices, an advisory
                    committee established by the Secretary, acting through
                    the Director of the Centers for Disease Control and
                    Prevention.
        ``(b) Recommended Schedule for Administration.--
                ``(1) In general.--Subject to paragraph (2), in the case of
            a pediatric vaccine, the Secretary shall establish (and
            periodically review and as appropriate revise) a schedule of
            nonbinding recommendations for the following:
                        ``(A) The number of immunizations with the vaccine
                    that children should receive.
                        ``(B) The ages at which children should receive the
                    immunizations.
                        ``(C) The dosage of vaccine that should be
                    administered in the immunizations.
                        ``(D) Any contraindications regarding
                    administration of the vaccine to particular medical
                    categories of children.
                        ``(E) Such other guidelines as the Secretary
                    determines to be appropriate with respect to
                    administering the vaccine to children.
                ``(2) Variations in medical practice.--In establishing and
            revising a schedule under paragraph (1), the Secretary shall
            ensure that, in the case of the pediatric vaccine involved, the
            schedule provides for the full range of variations in medical
            judgment regarding the administration of the vaccine, subject
            to remaining within medical norms.
                ``(3) Rule of construction.--
                        ``(A) The schedule specified in subparagraph (B) is
                    deemed to be the schedule maintained under paragraph
                    (1).
                        ``(B) The schedule specified in this subparagraph
                    is the schedule that, for purposes of paragraph (1), is
                    established (and periodically reviewed and as
                    appropriate revised) by the advisory committee
                    specified in subsection (a)(2)(B).
        ``(c) Generally Applicable Rules of Construction.--
                ``(1) In general.--The list established under subsection
            (a) and the schedules established under subsection (b) do not
            constitute guidelines, standards, performance measures, or
            review criteria for purposes of the program carried out by the
            Administrator for Health Care Policy and Research under part B
            of title IX or under section 1142 of the Social Security Act.
                ``(2) State laws.--This section does not supersede any
            State law on requirements with respect to receiving
            immunizations (including any such law relating to religious
            exemptions or medical exemptions).
        ``(d) Issuance of List and Schedules.--Not later than 180 days
    after the date of the enactment of the Omnibus Budget Reconciliation
    Act of 1993, the Secretary shall establish the initial list required in
    subsection (a) and the schedule required in subsection (b).

    ``SEC. 2161. CHILDHOOD IMMUNIZATION TRUST FUND.

        ``(a) Establishment of Fund.--There is established in the Treasury
    of the United States a fund to be known as the National Childhood
    Immunization Trust Fund (in this section referred to as the `Fund').
    The Fund shall consist of such amounts as may be appropriated to the
    Fund in appropriations Acts, in the Internal Revenue Code of 1986, or
    in subsection (c)(3). Amounts appropriated to the Fund shall remain
    available until expended.
        ``(b) Expenditures From Fund.--Amounts in the Fund are available to
    the Secretary for the purpose of carrying out this part. Payments under
    the program under this part, and the costs of carrying out such
    program, shall be exempt from reduction under any order issued under
    part C of the Balanced Budget and Emergency Deficit Control Act of
    1985.
        ``(c) Investment.--
                ``(1) In general.--The Secretary of the Treasury shall
            invest such amounts of the Fund as such Secretary determines
            are not required to meet current withdrawals from the Fund.
            Such investments may be made only in interest-bearing
            obligations of the United States. For such purpose, such
            obligations may be acquired on original issue at the issue
            price, or by purchase of outstanding obligations at the market
            price.
                ``(2) Sale of obligations.--Any obligation acquired by the
            Fund may be sold by the Secretary of the Treasury at the market
            price.
                ``(3) Availability of income.--Any interest derived from
            obligations acquired by the Fund, and proceeds from any sale or
            redemption of such obligations, are hereby appropriated to the
            Fund.

    ``SEC. 2162. DEFINITIONS.

        ``For purposes of this subtitle:
                ``(1) The term `eligible child' has the meaning given such
            term in section 2151(b).
                ``(2) The term `federally-supplied', with respect to a
            pediatric vaccine, means that such vaccine is purchased and
            delivered on behalf of a State under section 2151(a).
                ``(3) The term `health care provider', with respect to the
            administration of vaccines to children, means an entity that is
            licensed or otherwise authorized for such administration under
            the law of the State in which the entity administers the
            vaccine, subject to section 333(e).
                ``(4) The term `immunization' means an immunization against
            a vaccine-preventable disease.
                ``(5) Each of the terms `Indian', `Indian tribe', and
            `tribal organization' has the meaning given such term in
            section 4 of the Indian Health Care Improvement Act.
                ``(6) The term `Indian child' means an Indian who is 18
            years of age or younger.
                ``(7) The term `manufacturer' means any corporation,
            organization, or institution, whether public or private
            (including Federal, State, and local departments, agencies, and
            instrumentalities), which manufactures, imports, processes, or
            distributes under its label any pediatric vaccine. The term
            `manufacture' means to manufacture, import, process, or
            distribute a vaccine.
                ``(8) The term `parent', with respect to a child, means a
            legal guardian of the child.
                ``(9) The term `participating State under section 2151'
            means a State that has submitted to the Secretary an
            application in accordance with section 2157.
                ``(10) The term `pediatric vaccine' means a vaccine
            included on the list established under section 2160(a).
                ``(11) The term `program-registered provider' has the
            meaning given such term in 2153(a)(2).

    ``SEC. 2163. TERMINATION OF PROGRAM.

        This part shall cease to be in effect beginning on such date as may
    be prescribed in Federal law providing for immunization services for
    all children as part of a broad-based reform of the national health
    care system.

        ``Part B--National System for Monitoring Immunization Status of
                                    Children

    ``SEC. 2171. FORMULA GRANTS FOR STATE REGISTRIES WITH RESPECT TO
                  MONITORING.

        ``(a) In General.--For the purpose described in subsection (b), the
    Secretary, acting through the Director of the Centers for Disease
    Control and Prevention, shall make an allotment each fiscal year for
    each State in an amount determined in accordance with section 2175. The
    Secretary shall make a grant to the State of the allotment made for the
    State for the fiscal year if the State submits to the Secretary an
    application in accordance with section 2174.
        ``(b) Authorized Activities.--The Secretary may make a grant under
    subsection (a) only if the State agrees to expend the grant for the
    purpose of--
                ``(1) collecting the data described in section 2172;
                ``(2) operating registries to maintain the data (and
            establishing such registries, in the case of a State that is
            not operating such a registry);
                ``(3) utilizing the data to monitor the extent to which
            children have received immunizations in accordance with the
            schedule established under section 2160(b);
                ``(4) notifying parents if children have not received
            immunizations in accordance with such schedule; and
                ``(5) such other activities as the Secretary may authorize
            with respect to achieving the objectives established by the
            Secretary for the year 2000 for the immunization status of
            children in the United States.
        ``(c) Requirement Regarding State Laws.--
                ``(1) In general.--The Secretary may make a grant under
            subsection (a) only if the State involved--
                        ``(A) provides assurances satisfactory to the
                    Secretary that, not later than October 1, 1996, the
                    State will be operating a registry in accordance with
                    this part, including having in effect such laws and
                    regulations as may be necessary to so operate such a
                    registry; and
                        ``(B) agrees that, prior to such date, the State
                    will make such efforts to operate a registry in
                    accordance with this part as may be authorized in the
                    law and regulations of the State.
                ``(2) Rules of construction.--
                        ``(A) With respect to the agreements made by a
                    State under this part, other than the agreement under
                    paragraph (1)(B), the Secretary may require compliance
                    with the agreements only to the extent consistent with
                    such paragraph.
                        ``(B) This part does not authorize the Secretary,
                    as a condition of the receipt of a grant under
                    subsection (a) by a State, to prohibit the State from
                    providing any parent, upon the request of the parent,
                    with an exemption from the requirements established by
                    the State pursuant to this part for the collection of
                    data regarding any child of the parent.

    ``SEC. 2172. REGISTRY DATA.

        ``(a) In General.--For purposes of section 2171(b)(1), the data
    described in this section are the data described in subsection (b) and
    the data described in subsection (c). This section applies to data
    regarding a child without regard to whether the child is an eligible
    child as defined in section 2162.
        ``(b) Data Regarding Birth of Child.--With respect to the birth of
    a child, the data described in this subsection is as follows:
                ``(1) The name of each child born in the State involved on
            or after October 1, 1993.
                ``(2) Demographic data on the child.
                ``(3) The name of one or both of the parents of the child.
                ``(4) The address, as of the date of the birth of the
            child, of each parent whose name is received in the registry
            pursuant to paragraph (3).
        ``(c) Data Regarding Individual Immunizations.--With respect to a
    child to whom a pediatric vaccine is administered in the State
    involved, the data described in this subsection is as follows:
                ``(1) The name, age, and address of the child.
                ``(2) The date on which the vaccine was administered to the
            child.
                ``(3) The name and business address of the health care
            provider that administered the vaccine.
                ``(4) The address of the facility at which the vaccine was
            administered.
                ``(5) The name and address of one or both parents of the
            child as of the date on which the vaccine was administered, if
            such information is available to the health care provider.
                ``(6) The type of vaccine.
                ``(7) The number or other information identifying the
            particular manufacturing batch of the vaccine, if such
            information appears on the container or packaging for the
            vaccine or is otherwise readily accessible to the health care
            provider.
                ``(8) The dosage of vaccine that was administered.
                ``(9) A description of any adverse medical reactions that
            the child experienced in relation to the vaccine and of which
            the health care provider is aware.
                ``(10) Any other contraindications noted by the health care
            provider with respect to administration of the vaccine to the
            child.
                ``(11) Such other data regarding immunizations for the
            child, including identifying data, as the Secretary may require
            consistent with applicable law (including social security
            account numbers furnished pursuant to section 205(c)(2)(E) of
            the Social Security Act).
        ``(d) Date Certain for Submission to Registry.--The Secretary may
    make a grant under section 2171 only if the State involved agrees to
    ensure that, with respect to a child--
                ``(1) the data described in subsection (b) are submitted to
            the registry under such section not later than 6 weeks after
            the date on which the child is born; and
                ``(2) the data described in subsection (c) with respect to
            a vaccine are submitted to such registry not later than 6 weeks
            after the date on which the vaccine is administered to the
            child.

    ``SEC. 2173. GENERAL PROVISIONS.

        ``(a) Federal Standards on Confidentiality.--The Secretary shall by
    regulation establish standards providing for maintaining the
    confidentiality of the identity of individuals with respect to whom
    data are maintained in registries under section 2171. Such standards
    shall, with respect to a State, provide that the State is to have in
    effect laws regarding such confidentiality, including appropriate
    penalties for violation of the laws. The Secretary may make a grant
    under such section only if the State involved agrees to comply with the
    standards.
        ``(b) Use of Social Security Account Numbers.--Any usage or
    disclosure of data in registries under section 2171 that consists of
    social security account numbers and related information which is
    otherwise permitted under this part may be exercised only to the extent
    permitted under section 205(c)(2)(E) of the Social Security Act. For
    purposes of the preceding sentence, the term `related information' has
    the meaning given such term in clause (iv)(II) of such section.
        ``(c) Uniformity in Methodologies.--The Secretary shall establish
    standards regarding the methodologies used in establishing and
    operating registries under section 2171, and may make a grant under
    such section only if the State agrees to comply with the standards. The
    Secretary shall provide for a reasonable degree of uniformity among the
    States in such methodologies for the purpose of ensuring the utility,
    comparability, and exchange of the data maintained in such registries.
        ``(d) Coordination Among States.--The Secretary may make a grant
    under section 2171 to a State only if, with respect to the operation of
    the registry of the State under such section, the State agrees to
    cooperate with the Secretary and with other States in carrying out
    activities with respect to achieving the objectives established by the
    Secretary for the year 2000 for the immunization status of children in
    the United States.
        ``(e) Reports to Secretary.--The Secretary may make a grant under
    section 2171 only if the State involved agrees to submit to the
    Secretary such reports as the Secretary determines to be appropriate
    with respect to the activities of the State under this part.

    ``SEC. 2174. APPLICATION FOR GRANT.

        ``An application by a State for a grant under section 2171 is in
    accordance with this section if the application--
                ``(1) is submitted not later than the date specified by the
            Secretary;
                ``(2) contains each agreement required in this part;
                ``(3) contains any information required in this part to be
            submitted to the Secretary; and
                ``(4) is in such form, is made in such manner, and contains
            such agreements, assurances, and information as the Secretary
            determines to be necessary to carry out this part.

    ``SEC. 2175. DETERMINATION OF AMOUNT OF ALLOTMENT.

        ``The Secretary shall determine the amount of the allotments
    required in section 2171 for States for a fiscal year in accordance
    with a formula established by the Secretary that allots the amounts
    appropriated under section 2177 for the fiscal year on the basis of the
    costs of the States in establishing and operating registries under
    section 2171.

    ``SEC. 2176. DEFINITIONS.

        ``For purposes of this part, each of the terms `health care
    provider, `pediatric vaccine' and `parent' has the meaning given the
    term in section 2162.

    ``SEC. 2177. AUTHORIZATION OF APPROPRIATIONS.

        ``For the purpose of carrying out this part, there are authorized
    to be appropriated $50,000,000, for fiscal year 1994, $152,000,000 for
    fiscal year 1995, $125,000,000 for fiscal year 1996, and $35,000,000
    for each of the fiscal years 1997 through 1999.

     ``Part C--Funding for Other Purposes Regarding Childhood Immunizations

    ``SEC. 2181. GRANTS REGARDING YEAR 2000 HEALTH OBJECTIVES.

        ``(a) In General.--The Secretary, acting through the Director of
    the Centers for Disease Control and Prevention, may make grants to
    States for the purpose of carrying out activities with respect to
    achieving the objectives established by the Secretary for the year 2000
    for the immunization status of children in the United States, other
    than providing for the purchase and delivery on behalf of the State of
    any pediatric vaccine (as defined in section 2162).
        ``(b) Certain Activities.--Subject to subsection (a), the purposes
    for which a grant under such subsection may be expended include the
    following:
                ``(1) Research into the prevention and control of diseases
            that may be prevented through vaccination.
                ``(2) Demonstration projects for the prevention and control
            of such diseases.
                ``(3) Public information and education programs for the
            prevention and control of such diseases.
                ``(4) Education, training, and clinical skills improvement
            activities in the prevention and control of such diseases for
            health professionals (including allied health personnel).
                ``(5) Such other activities as the Secretary determines to
            be appropriate.
        ``(c) Application for Grant.--The Secretary may make a grant under
    subsection (a) only if an application for the grant is submitted to the
    Secretary and the application is in such form, is made in such manner,
    and contains such agreements, assurances, and information as the
    Secretary determines to be necessary to carry out this section.
        ``(d) Supplies and Services in Lieu of Grant Funds.-- The
    Secretary, at the request of a recipient of a grant under subsection
    (a), may reduce the amount of such grant by--
                ``(1) the fair market value of any supplies or equipment
            furnished the grant recipient, and
                ``(2) the amount of the pay, allowances, and travel
            expenses of any officer or employee of the Federal Government
            when detailed to the grant recipient and the amount of any
            other costs incurred in connection with the detail of such
            officer or employee.
    When the furnishing of such supplies or equipment or the detail of such
    an officer or employee is for the convenience of and at the request of
    such grant recipient and for the purpose of carrying out a program with
    respect to which the grant under subsection (a) is made. The amount by
    which any such grant is so reduced shall be available for payment by
    the Secretary of the costs incurred in furnishing the supplies or
    equipment, or in detailing the personnel, on which the reduction of
    such grant is based, and such amount shall be deemed as part of the
    grant and shall be deemed to have been paid to the grant recipient.
        ``(e) Authorization of Appropriations.--For the purpose of carrying
    out this part, there are authorized to be appropriated $580,000,000 for
    fiscal year 1993, $680,000,000 for fiscal year 1994, and such sums as
    may be necessary for each of the fiscal years 1995 through 1999.''.
        (b) Authority to Use Social Security Account Numbers.--Section
    205(c)(2) of the Social Security Act (42 U.S.C. 405(c)(2)) is amended--
                (1) by redesignating subparagraphs (E) and (F) as
            subparagraphs (F) and (G), respectively; and
                (2) by inserting after subparagraph (D) the following new
            subparagraph:
        ``(E)(i) The Secretary and each State receiving grants under
    section 2171(a) of the Public Health Service Act may utilize social
    security account numbers issued by the Secretary under this subsection
    for purposes of--
                ``(I) operating registries under such section to maintain
            information including such numbers (and establishing such
            registries, in the case of a State that is not operating such a
            registry),
                ``(II) utilizing such numbers to monitor the extent to
            which children have received immunizations in accordance with
            the schedule established under section 2160(b) of the Public
            Health Service Act, and
                ``(III) notifying parents if children have not received
            immunizations in accordance with such schedule.
        ``(ii) Disclosure by individuals of social security account numbers
    may be required by a State for purposes of identification of children
    in a registry operated pursuant to a grant referred to in clause (i),
    except that such disclosure may be required to be made only to persons
    specifically authorized in regulations of the Secretary prescribed
    under part B of subtitle 3 of title XXI of the Public Health Service
    Act. The Secretary shall take such actions as are necessary to restrict
    access to information consisting of such numbers and related
    information only to such authorized persons whose duties or
    responsibilities require access for the purposes described in clause
    (i). The Secretary shall issue regulations governing the use,
    maintenance, and disclosure by any holder of such information,
    including appropriate administrative, technical, and physical
    safeguards, to ensure that only such authorized persons have access to
    such information. Any use or disclosure of such information in
    violation of such regulations shall be deemed a disclosure in violation
    of subparagraph (C)(vii).
        ``(iii) The Secretary shall submit a report to the Committee on
    Ways and Means of the House of Representatives and the Committee on
    Finance of the Senate not later than January 1, 1996, and biennially
    thereafter, on the operation of this subparagraph.
        ``(iv) For purposes of this subparagraph--
                ``(I) the term `State' has the meaning provided such term
            under section 2(f) of the Public Health Service Act, and
                ``(II) the term `related information' means any record,
            list, or compilation which indicates, directly or indirectly,
            the identity of any individual with respect to whom a social
            security account number is maintained pursuant to this
            subparagraph and part B of subtitle 3 of title XXI of the
            Public Health Service Act.''.
        (c) Relationship of New Program of Immunization Grants to Current
    Program.--
                (1) Striking of current program.--Section 317 of the Public
            Health Service Act (42 U.S.C. 247b) is amended--
                        (A) in subsection (j)--
                                (i) by striking paragraph (1); and
                                (ii) by striking the remaining paragraph
                            designation; and
                        (B) in subsection (k)--
                                (i) by striking paragraph (1); and
                                (ii) by redesignating paragraphs (2)
                            through (5) as paragraphs (1) through (4),
                            respectively.
                (2) Transitional authority under new program.--With respect
            to activities that the Secretary of Health and Human Services
            was authorized to carry out pursuant to section 317(j)(1) of
            the Public Health Service Act (as in effect on the day before
            the date of the enactment of this Act), the Secretary may, for
            fiscal year 1994, carry out any such activity under section
            2181 of the Public Health Service Act (as added by subsection
            (a) of this section), notwithstanding the provisions of such
            section 2181. The authority established in the preceding
            sentence includes the authority to purchase vaccines.
        (d) Continued Coverage of Costs of a Pediatric Vaccine under Group
    Health Plans.--
                (1) Requirement.--The requirement of this paragraph, with
            respect to a group health plan for plan years beginning after
            the date of the enactment of this Act, is that the group health
            plan not reduce its coverage of the costs of pediatric vaccines
            (as defined under section 2162 of the Public Health Service
            Act) below the coverage it provided as of May 1, 1993.
                (2) Enforcement.--
                        (A) For purposes of section 2207 of the Public
                    Health Service Act, the requirement of paragraph (1) is
                    deemed a requirement of title XXII of such Act.
                        (B) For purposes of subsections (a) through (e) of
                    section 4980B of the Internal Revenue Code of 1986,
                    paragraph (1) is deemed a requirement of subsection (f)
                    of such section.
                        (C) For purposes of section 502 of the Employee
                    Retirement Income Security Act of 1974, paragraph (1)
                    is deemed a provision of part 6 of subtitle B of title
                    I of such Act.

    SEC. 5182. NATIONAL VACCINE INJURY COMPENSATION PROGRAM AMENDMENTS.

        (a) Use of Vaccine Injury Compensation Trust Fund.--Section 6601(r)
    of the Omnibus Budget Reconciliation Act of 1989 is amended by striking
    ``$2,500,000 for each of fiscal years 1991 and 1992'' each place it
    appears and inserting ``$3,000,000 for fiscal year 1994 and each fiscal
    year thereafter'' (in three places).
        (b) Amendment of Vaccine Injury Table.--Section 2116(b) of the
    Public Health Service Act (42 U.S.C. 300aa-16(b)) is amended by
    striking ``such person may file'' and inserting ``or to significantly
    increase the likelihood of obtaining compensation, such person may,
    notwithstanding section 2111(b)(2), file''.
        (c) Extension of Time for Decision.--Section 2112(d)(3)(D) of such
    Act (42 U.S.C. 300aa-12(d)(3)(D)) is amended by striking ``540 days''
    and inserting ``30 months (but for no more than 6 months at a time)''.
        (d) Simplification of Vaccine Information Materials.--
                (1) Section 2126(b) of such Act (42 U.S.C. 300aa-26(b)) is
            amended--
                        (A) by striking ``by rule'' in the matter preceding
                    paragraph (1);
                        (B) by striking, in paragraph (1), ``, opportunity
                    for a public hearing, and 90'' and inserting ``and
                    30''; and
                        (C) by striking, in paragraph (2), ``, appropriate
                    health care providers and parent organizations''.
                (2) Section 2126(c) of such Act (42 U.S.C. 300aa-26(c)) is
            amended--
                        (A) by inserting ``shall be based on available data
                    and information,'' after ``such materials'' in the
                    matter preceding paragraph (1), and
                        (B) by striking paragraphs (1) through (10) and
                    inserting the following:
                ``(1) a concise description of the benefits of the vaccine,
                ``(2) a concise description of the risks associated with
            the vaccine,
                ``(3) a statement of the availability of the National
            Vaccine Injury Compensation Program, and
                ``(4) such other relevant information as may be determined
            by the Secretary.''.
                (3) Subsections (a) and (d) of section 2126 of such Act (42
            U.S.C. 300aa-26) are each amended by inserting ``or to any
            other individual'' after ``to the legal representatives of any
            child''.
                (4) Subsection (d) of section 2126 of such Act (42 U.S.C.
            300aa-26) is amended--
                        (A) by striking all after ``subsection (a),'' the
                    second place it appears in the first sentence and
                    inserting ``supplemented with visual presentations or
                    oral explanations, in appropriate cases.'', and
                        (B) by striking ``or other information'' in the
                    last sentence.

    SEC. 5183. MEDICAID IMMUNIZATION PROVISIONS.

        (a) Outreach and Education.--
                (1) Immunization outreach through epsdt program.--Section
            1902(a)(43)(A) (42 U.S.C. 1396a(a)(43)(A)) is amended by
            inserting before the comma at the end the following: ``and the
            need for age-appropriate immunizations against vaccine-
            preventable diseases''.
                (2) Coordination with maternal and child health block grant
            programs and wic programs.--Section 1902(a)(11) (42 U.S.C.
            1396a(a)(11)) is amended--
                        (A) in clause (B)--
                                (i) by striking ``effective July 1,
                            1969,'',
                                (ii) by striking ``and'' before ``(ii)'',
                            and
                                (iii) by striking ``to him under section
                            1903'' and inserting ``to the individual under
                            section 1903, and (iii) providing for
                            coordination of information and education on
                            childhood vaccinations and delivery of
                            immunization services''; and
                        (B) in clause (C), by inserting ``(including the
                    provision of information and education on childhood
                    vaccinations and the delivery of immunization
                    services)'' after ``operations under this title''.
                (3) Coverage of public housing health centers as federally-
            qualified health centers.--Section 1905(l)(2)(B) (42 U.S.C.
            1396d(l)(2)(B)) is amended by striking ``or 340'' each place it
            appears and inserting ``340, or 340A''.
                (4) Effective date.--(A) Except as provided in subparagraph
            (B), the amendments made by this subsection shall apply to
            calendar quarters beginning on or after October 1, 1993,
            without regard to whether or not final regulations to carry out
            such amendments have been promulgated by such date.
                (B) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act which the Secretary
            of Health and Human Services determines requires State
            legislation (other than legislation appropriating funds) in
            order for the plan to meet the additional requirements imposed
            by the amendments made by this subsection, the State plan shall
            not be regarded as failing to comply with the requirements of
            such title solely on the basis of its failure to meet these
            additional requirements before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.
        (b) Schedule of Immunizations under EPSDT.--
                (1) In general.--Section 1905(r)(1) (42 U.S.C. 1396d(r)(1))
            is amended--
                        (A) in subparagraph (A)(i), by inserting ``and,
                    with respect to immunizations under subparagraph
                    (B)(iii), in accordance with the schedule recommended
                    by the Secretary under section 2160 of the Public
                    Health Service Act'' after ``child health care''; and
                        (B) in subparagraph (B)(iii), by inserting
                    ``(according to the schedule recommended by the
                    Secretary under section 2160 of the Public Health
                    Service Act)'' after ``appropriate immunizations''.
                (2) Effective date.--The amendments made by subparagraphs
            (A) and (B) of paragraph (1) shall first apply 90 days after
            the date the Secretary of Health and Human Services first
            issues the recommended schedule referred to in subparagraphs
            (A)(i) and subparagraph (B)(iii) of section 1905(r)(1) of the
            Social Security Act (as amended by such respective
            subparagraphs).
        (c) Assuring Adequate Payment Rates for Administration of Vaccines
    to Children.--
                (1) Payment rates.--Section 1926(a)(4)(B) (42 U.S.C. 1396r-
            7(a)(4)(B)) is amended by inserting ``(including the
            administration of vaccines)'' after ``means services''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to the plan amendment required to be submitted
            under section 1926(a)(2) of the Social Security Act by not
            later than April 1, 1994.
        (d) Denial of Federal Financial Participation for Inappropriate
    Administration of Single-Antigen Vaccine.--
                (1) In general.--Section 1903(i) (42 U.S.C. 1396b(i)), as
            amended by sections 5174(b) and 5131(a), is amended--
                        (A) in paragraph (13), by striking ``or'' at the
                    end,
                        (B) in paragraph (14), by striking the period at
                    the end and inserting ``; or'', and
                        (C) by inserting after paragraph (14) the following
                    new paragraph:
                ``(15) with respect to any amount expended for a single-
            antigen vaccine and its administration in any case in which the
            administration of a combined-antigen vaccine was medically
            appropriate (as determined by the Secretary).''.
                (2) Effective date.--The amendments made by paragraph (1)
            shall apply to amounts expended for vaccines administered on or
            after October 1, 1993.
        (e) Requiring Medicaid Managed Care Plans to Comply with
    Immunization and Other EPSDT Requirements.--
                (1) In general.--Section 1903(m) (42 U.S.C. 1396b(m)) is
            amended--
                        (A) in paragraph (2)(A), as amended by subsections
                    (a)(1) and (b)(1) of section 5135--
                                (i) by striking ``and'' at the end of
                            clause (xii),
                                (ii) by striking the period at the end of
                            clause (xiii) and inserting ``; and'', and
                                (iii) by adding at the end the following
                            new clause:
                ``(xiv) the entity complies with the requirements of
            paragraph (7) (relating to EPSDT compliance).''; and
                        (B) by adding at the end the following new
                    paragraph:
        ``(7) The contract between the State and an entity referred to in
    paragraph (2)(A)(iii) shall--
                ``(A) specify which early and periodic screening,
            diagnostic, and treatment services are to be provided under the
            contract to individuals under age 21 enrolled with the entity;
                ``(B) in the case of such services which are not to be so
            provided, specify the steps the entity will take (through
            referrals or other arrangements) to assure that such
            individuals will receive such services; and
                ``(C) require the entity to submit such periodic reports as
            may be necessary to enable the State to prepare and submit
            timely reports under section 1902(a)(43)(D) and section
            506(a)(2).''.
                (2) Application of intermediate sanctions for failure to
            provide immuniza- tions and other epsdt services.--Section
            1903(m)(5)(A) (42 U.S.C. 1396b(m)(5)(A)) is amended--
                        (A) by striking ``, or'' at the end of clause (iv)
                    and inserting a semicolon,
                        (B) by striking the comma at the end of clause (v)
                    and inserting ``; or'', and
                        (C) by inserting after clause (v) the following new
                    clause:
                ``(vi) fails substantially to provide early and periodic
            screening, diagnostic, and treatment services to the extent
            specified in the contract under paragraph (7)(A);''.
                (3) Effective date.--The amendments made by this subsection
            shall apply to contract years beginning on or after October 1,
            1993, without regard to whether or not final regulations to
            carry out such amendments have been promulgated by such date.
        (f) Transition Rule.--
                (1) Medicaid use of cdc contract price.--The Secretary of
            Health and Human Services shall not, on or after the date of
            the enactment of this Act, enter into a contract for the
            purchase by the Centers for Disease Control and Prevention of
            pediatric vaccines for distribution (as provided for in section
            317 or section 2181 of the Public Health Service Act) unless
            such contract provides that the charge for such vaccines, for
            which medical assistance is provided under a State plan under
            title XIX of the Social Security Act, will not exceed the price
            negotiated under the contract. The previous sentence shall not
            apply, with respect to a vaccine for which medical assistance
            is provided by a State, on and after such date as the State
            becomes entitled to have the Secretary provide for the purchase
            and delivery on behalf of the State of that vaccine under
            section 2151 of the Public Health Service Act.
                (2) Optional use by states of cdc contract price.--Nothing
            in paragraph (1) shall be construed as limiting the Federal
            financial participation available to States, under title XIX of
            the Social Security Act, for the cost of a pediatric vaccine to
            the contract price described in such paragraph for the vaccine.

    SEC. 5184. AVAILABILITY OF MEDICAID PAYMENTS FOR CHILDHOOD VACCINE
                  REPLACEMENT PROGRAMS.

        (a) In General.--Section 1902(a)(32) (42 U.S.C. 1396a(a)(32)) is
    amended--
                (1) by striking ``and'' at the end of subparagraph (B),
                (2) by striking the period at the end of subparagraph (C)
            and inserting ``; and'', and
                (3) by adding at the end the following new subparagraph:
                        ``(D) in the case of payment for a childhood
                    vaccine administered to individuals entitled to medical
                    assistance under the State plan, the State plan may
                    make payment directly to the manufacturer of the
                    vaccine under a voluntary replacement program agreed to
                    by the State pursuant to which the manufacturer (i)
                    supplies doses of the vaccine to providers
                    administering the vaccine, (ii) periodically replaces
                    the supply of the vaccine, and (iii) charges the State
                    the manufacturer's bid price to the Centers for Disease
                    Control and Prevention for the vaccine so administered
                    plus a reasonable premium to cover shipping and the
                    handling of returns;''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    take effect on the date of the enactment of this Act.

    SEC. 5185. HEALTHY START FOR INFANTS.

        (a) In General.--Part D of title III of the Public Health Service
    Act (42 U.S.C. 254b et seq.) is amended by inserting after section 330
    the following section:

                          ``healthy start for infants

        ``Sec. 330A. (a) Grants for Comprehensive Services.--
                ``(1) In general.--The Secretary may make grants for the
            operation of not more than 21 demonstration projects to provide
            the services described in subsection (b) for the purpose of
            reducing, in the geographic areas in which the projects are
            carried out--
                        ``(A) the incidence of infant mortality and
                    morbidity;
                        ``(B) the incidence of fetal deaths;
                        ``(C) the incidence of maternal mortality;
                        ``(D) the incidence of fetal alcohol syndrome; and
                        ``(E) the incidence of low-birthweight births.
                ``(2) Achievement of year 2000 health status objectives.--
            With respect to the objectives established by the Secretary for
            the health status of the population of the United States for
            the year 2000, the Secretary shall, in providing for a
            demonstration project under paragraph (1) in a geographic area,
            seek to meet the objectives that are applicable to the purpose
            described in such paragraph and the populations served by the
            project.
        ``(b) Authorized Services.--
                ``(1) In general.--Subject to subsection (h), the services
            referred to in this subsection are comprehensive services
            (including preventive and primary health services for pregnant
            women and infants and childhood immunizations in accordance
            with the schedule recommended by the Secretary under section
            2160) for carrying out the purpose described in subsection (a),
            including services other than health services.
                ``(2) Certain providers.--The Secretary may make a grant
            under subsection (a) only if the applicant involved agrees
            that, in making any arrangements under which other entities
            provide authorized services in the demonstration project
            involved, the applicant will include among the entities with
            which the arrangements are made grantees under any of sections
            329, 330, 340, and 340A, if such grantees are providing
            services in the service area of such project and the grantees
            are willing to make such arrangements with the applicant.
        ``(c) Eligible Geographic Areas.--The Secretary may make a grant
    under subsection (a) only if--
                ``(1) the applicant for the grant specifies the geographic
            area in which the demonstration project under such subsection
            is to be carried out and agrees that the project will not be
            carried out in other areas; and
                ``(2) the rate of infant mortality in the geographic area
            equals or exceeds 150 percent of the national average in the
            United States of such rates.
        ``(d) Minimum Qualifications of Grantees.--
                ``(1) Public or nonprofit private entities.--The Secretary
            may make a grant under subsection (a) only if the applicant for
            the grant is a State or local department of health, or other
            public or nonprofit private entity, or a consortium of public
            or nonprofit private entities.
                ``(2) Approval of political subdivisions.--With respect to
            a proposed demonstration project under subsection (a), the
            Secretary may make a grant under such subsection only if--
                        ``(A) the chief executive officer of each political
                    subdivision in the service area of such project
                    approves the applicant for the grant as being qualified
                    to carry out the project; and
                        ``(B) the leadership of any Indian tribe or tribal
                    organization with jurisdiction over any portion of such
                    area so approves the applicant.
                ``(3) Status as medicaid provider.--
                        ``(A) In the case of any service described in
                    subsection (b) that is available pursuant to the State
                    plan approved under title XIX of the Social Security
                    Act for a State in which a demonstration project under
                    subsection (a) is carried out, the Secretary may make a
                    grant under such subsection for the project only if,
                    subject to subparagraph (B)--
                                ``(i) the applicant for the grant will
                            provide the service directly, and the applicant
                            has entered into a participation agreement
                            under the State plan and is qualified to
                            receive payments under such plan; or
                                ``(ii) the applicant will enter into an
                            agreement with a public or private entity under
                            which the entity will provide the service, and
                            the entity has entered into such a
                            participation agreement under the State plan
                            and is qualified to receive such payments.
                        ``(B)(i) In the case of an entity making an
                    agreement pursuant to subparagraph (A)(ii) regarding
                    the provision of services, the requirement established
                    in such subparagraph regarding a participation
                    agreement shall be waived by the Secretary if the
                    entity does not, in providing health care services,
                    impose a charge or accept reimbursement available from
                    any third-party payor, including reimbursement under
                    any insurance policy or under any Federal or State
                    health benefits plan.
                        ``(ii) A determination by the Secretary of whether
                    an entity referred to in clause (i) meets the criteria
                    for a waiver under such clause shall be made without
                    regard to whether the entity accepts voluntary
                    donations regarding the provision of services to the
                    public.
        ``(e) State Approval of Project.--With respect to a proposed
    demonstration project under subsection (a), the Secretary may make a
    grant under such subsection to the applicant involved only if--
                ``(1) the chief executive officer of the State in which the
            project is to be carried out approves the proposal of the
            applicant for carrying out the project; and
                ``(2) the leadership of any Indian tribe or tribal
            organization with jurisdiction over any portion of the service
            area of the project so approves the proposal.
        ``(f) Eligibility for Services Provided With Grant Funds.--
                ``(1) In general.--With respect to any authorized service
            under subsection (b), if the service is a service that States
            are required or authorized to provide under title XIX of the
            Social Security Act, the Secretary may make a grant under
            subsection (a) only if the applicant involved agrees that the
            grant will not be expended to provide the service to any
            individual to whom States are required or authorized under such
            title to provide the service. The Secretary may not make a
            grant under subsection (a) unless the State involved agrees
            that the grant will not be expended to make payment for any
            item or service to the extent that payment has been made, or
            can reasonably be expected to be made, with respect to such
            item or service--
                        ``(A) under a health insurance policy or plan
                    (including a group health plan or a prepaid health
                    plan),
                        ``(B) under any Federal or State health benefits
                    program, including any program under title V, XVIII, or
                    XIX of the Social Security Act, or
                        ``(C) under subpart 2 of part B of title XIX of
                    this Act.
                ``(2) Rules of construction.--For purposes of paragraph
            (1):
                        ``(A) Individuals to whom States are authorized to
                    provide services under title XIX of the Social Security
                    Act include, pursuant to section 1902(l) of such title,
                    pregnant women, infants, and children with an income
                    level not less than 133 percent, and not more than 185
                    percent, of the official poverty line.
                        ``(B) Authorized services under subsection (b) that
                    are authorized to be provided under title XIX of such
                    Act include, pursuant to section 1920 of such title,
                    ambulatory prenatal services during a period of
                    presumptive eligibility.
                        ``(C) Authorized services under subsection (b) that
                    are required to be provided under title XIX of such Act
                    include, pursuant to section 1905(a)(4)(B) of such
                    title, early and periodic screening, diagnostic, and
                    treatment services for children under the age of 21.
                        ``(D) Authorized services under subsection (b) that
                    are authorized to be provided under title XIX of such
                    Act include, pursuant to section 1905(a)(19) of such
                    title, case-management services.
        ``(g) Maintenance of Effort.--
                ``(1) Grantee.--With respect to authorized services under
            subsection (b), the Secretary may make a grant under subsection
            (a) only if the applicant involved agrees to maintain
            expenditures of non-Federal amounts for such services at a
            level that is not less than the level of such expenditures
            maintained by the applicant for fiscal year 1991.
                ``(2) Relevant political subdivisions.--With respect to
            authorized services under subsection (b), the Secretary may
            make a grant under subsection (a) only if each political
            subdivision in the service area of the demonstration project
            involved agrees to maintain expenditures of non-Federal amounts
            for such services at a level that is not less than the level of
            such expenditures maintained by the political subdivision for
            fiscal year 1991.
        ``(h) Restrictions on Expenditure of Grant.--
                ``(1) In general.--Except as provided in paragraph (3), the
            Secretary may make a grant under subsection (a) only if the
            applicant involved agrees that the grant will not be expended--
                        ``(A) to provide inpatient services, except with
                    respect to residential treatment for substance abuse
                    provided in settings other than hospitals;
                        ``(B) to make cash payments to intended recipients
                    of health services or mental health services; or
                        ``(C) to purchase or improve real property (other
                    than minor remodeling of existing improvements to real
                    property) or to purchase major medical equipment (other
                    than mobile medical units for providing ambulatory
                    prenatal services).
                ``(2) Administrative expenses; data collection.--The
            Secretary may make a grant under subsection (a) only if the
            applicant involved agrees that not more than an aggregate 10
            percent of the grant will be expended for administering the
            grant and the collection and analysis of data.
                ``(3) Waiver.--If the Secretary finds that the purpose
            described in subsection (a) cannot otherwise be carried out,
            the Secretary may, with respect to an otherwise qualified
            applicant, waive the restriction established in paragraph
            (1)(C).
        ``(i) Determination of Cause of Infant Deaths.--The Secretary may
    make a grant under subsection (a) only if the applicant involved--
                ``(1) agrees to provide for a determination of the cause of
            each infant death in the service area of the demonstration
            project involved; and
                ``(2) the applicant has made such arrangements with public
            entities as may be necessary to carry out paragraph (1).
        ``(j) Annual Reports to Secretary.--The Secretary may make a grant
    under subsection (a) only if the applicant involved agrees that, for
    each fiscal year for which the applicant operates a demonstration
    project under such subsection the applicant will, not later than April
    1 of the subsequent fiscal year, submit to the Secretary a report
    providing the following information with respect to the project:
                ``(1) The number of individuals that received authorized
            services, and the demographic characteristics of the population
            of such individuals.
                ``(2) The types of authorized services provided, including
            the types of ambulatory prenatal services provided and the
            trimester of the pregnancy in which the services were provided.
                ``(3) The sources of payment for the authorized services
            provided.
                ``(4) The extent to which children under age 2 receiving
            authorized services have received the appropriate number and
            variety of immunizations against vaccine-preventable diseases.
                ``(5) An analysis of the causes of death determined under
            subsection (i).
                ``(6) The extent of progress being made toward meeting the
            health status objectives specified in subsection (a)(2).
                ``(7) The extent to which, in the service area involved,
            progress is being made toward meeting the participation goals
            established for the State by the Secretary under section
            1905(r) of the Social Security Act (relating to early periodic
            screening, diagnostic, and treatment services for children
            under the age of 21).
        ``(k) Community Participation.--The Secretary may make a grant
    under subsection (a) only if the applicant involved agrees that, in
    preparing the proposal of the applicant for the demonstration project
    involved, and in the operation of the project, the applicant will
    consult with the residents of the service area for the project and with
    public and nonprofit private entities that provide authorized services
    to such residents.
        ``(l) Application for Grant.--The Secretary may make a grant under
    subsection (a) only if an application for the grant is submitted to the
    Secretary and the application is in such form, is made in such manner,
    and contains such agreements, assurances, and information as the
    Secretary determines to be necessary to carry out this subsection.
        ``(m) Report to Congress.--Not later than February 1, 1998, the
    Secretary shall submit to the Committee on Energy and Commerce of the
    House of Representatives, and the Committee on Labor and Human
    Resources of the Senate, a report--
                ``(1) summarizing the reports received by the Secretary
            under subsection (j);
                ``(2) describing the extent to which demonstration projects
            under subsection (a) have been cost effective; and
                ``(3) describing the extent to which the Secretary has, in
            the service areas of such projects, been successful in meeting
            the health status objectives specified in subsection (a)(2).
        ``(n) Limitation on Certain Expenses of Secretary.--Of the amounts
    appropriated under subsection (o) for a fiscal year, the Secretary may
    not obligate more than an aggregate 5 percent for the administrative
    costs of the Secretary in carrying out this section, for the provision
    of technical assistance regarding demonstration projects under
    subsection (a), and for evaluations of such projects.
        ``(o) Definitions.--For purposes of this section:
                ``(1) The term `authorized services' means the services
            specified in subsection (b).
                ``(2) The terms `Indian tribe' and `tribal organization'
            have the meaning given such terms in section 4(b) and section
            4(c) of the Indian Self-Determination and Education Assistance
            Act.
                ``(3) The term `service area', with respect to a
            demonstration project under subsection (a), means the
            geographic area specified in subsection (c).
        ``(p) Authorization of Appropriations.--For the purpose of carrying
    out this section, there are authorized to be appropriated for each of
    the fiscal years 1994 through 1997 such sums as may be necessary.
        ``(q) Sunset.--Effective October 1, 1997, this section is
    repealed.''.
        (b) Report for Fiscal Year 1993.--With respect to grants under
    section 330A of the Public Health Service Act, as added by subsection
    (a) of this section, the Secretary of Health and Human Services may
    make a grant under such section for fiscal year 1994 only if the
    applicant for the grant agrees to submit to the Secretary, not later
    than April 1 of such year, a report on any federally-supported project
    of the applicant that is substantially similar to the demonstration
    projects authorized in such section 330A, which report provides, to the
    extent practicable, the information described in subsection (j) of such
    section.
        (c) Savings Provision.--With respect to grants under section 330A
    of the Public Health Service Act, as added by subsection (a) of this
    section and in effect for the fiscal years 1994 through 1997, such
    grants remain available for obligation and expenditure in accordance
    with the terms upon which the grants were made, notwithstanding the
    repeal of such section 330A pursuant to subsection (q) of such section.
        (d) Use of General Authority Under Public Health Service Act.--With
    respect to the program established in section 330A of the Public Health
    Service Act, as added by subsection (a) of this section, section 301 of
    the Public Health Service Act may not be construed as providing to the
    Secretary of Health and Human Services any authority to carry out,
    during any fiscal year in which such program is in operation, any
    demonstration project to provide any of the services specified in
    subsection (b) of such section 330A.

    SEC. 5186. INCREASE IN AUTHORIZATION OF APPROPRIATIONS FOR THE MATERNAL
                  AND CHILD HEALTH SERVICES BLOCK GRANT PROGRAM.

        Section 501(a) (42 U.S.C. 701(a)) is amended by striking
    ``$686,000,000 for fiscal year 1990'' and inserting ``$705,000,000 for
    fiscal year 1994''.

    SEC. 5187. MISCELLANEOUS TECHNICAL CORRECTIONS TO PUBLIC HEALTH SERVICE
                  ACT PROVISIONS.

        (a) Compensation for Members of National Advisory Council on
    National Health Service Corps.--
        (1) In General.--Section 337(b)(2) of the Public Health Service Act
    (42 U.S.C. 254j(b)(2)) is amended--
                        (A) by inserting after ``so serving'' the
                    following: ``compensation at a rate fixed by the
                    Secretary (but not to exceed'', and
                        (B) by striking ``Schedule;'' and inserting
                    ``Schedule);''.
                (2) Effective date.--The amendments made by paragraph (1)
            shall take effect on the date of the enactment of this Act.
        (b) Liability Protections for Individuals Providing Services at
    Certain Clinics.--
                (1) Clarification of voluntary participation by certain
            entities.--(A) Section 224(g) of the Public Health Service Act
            (42 U.S.C. 133(g)(1)), as added by section 2(a) of the
            Federally Supported Health Centers Assistance Act of 1992, is
            amended--
                        (i) in paragraph (4), by striking ``An entity'' and
                    inserting ``Except as provided in paragraph (6), an
                    entity'', and
                        (ii) by adding at the end the following new
                    paragraph:
        ``(6) An entity may elect not to be treated as being described in
    paragraph (4) if the entity establishes that on a continuous basis
    since October 24, 1992, the entity has been a participant in, and
    partial owner of, a nonprofit risk retention group which offers
    malpractice and other liability coverage to the entity.''.
                (B) Section 224(k)(2) of such Act (42 U.S.C. 233(k)(2)), as
            added by section 4 of the Federally Supported Health Centers
            Assistance Act of 1992, is amended by striking ``entities
            receiving funds'' and all that follows through ``subsection
            (g)'' and inserting the following: ``entities described in
            subsection (g)(4) and receiving funds under each of the grant
            programs described in such subsection''.
                (2) Clarification of coverage of officers and employees of
            clinics.--The first sentence of section 224(g)(1) of the Public
            Health Service Act (42 U.S.C. 233(g)(1)) is amended by striking
            ``officer, employee, or contractor'' and inserting the
            following: ``officer or employee of such an entity, and any
            contractor''.
                (3) Coverage for services furnished to individuals other
            than patients of clinic.--Section 224(g) of such Act (42 U.S.C.
            233(g)(1)), as amended by paragraph (1), is amended--
                        (A) in the first sentence of paragraph (1), by
                    inserting after ``Service'' the following: ``with
                    respect to services provided to patients of the entity
                    and (subject to paragraph (7)) to certain other
                    individuals''; and
                        (B) by adding at the end the following new
                    paragraph:
        ``(7) For purposes of paragraph (1), an officer, employee, or
    contractor described in such paragraph may be deemed to be an employee
    of the Public Health Service with respect to services provided to
    individuals who are not patients of an entity described in paragraph
    (4) only if the Secretary determines--
                ``(A) that the provision of the services to such
            individuals is necessary to assure the treatment of patients of
            such an entity; or
                ``(B) that such services are otherwise required to be
            provided to such individuals under an employment contract (or
            other similar arrangement) between the individual and the
            entity.''.
                (4) Determining compliance of entity with requirements for
            coverage.--Section 224(h) of such Act (42 U.S.C. 233(h)), as
            added by section 2(b) of the Federally Supported Health Centers
            Assistance Act of 1992, is amended by striking ``the entity--''
            and inserting the following: ``the Secretary, after receiving
            such assurances and conducting such investigation as the
            Secretary considers necessary, finds that the entity--''.
                (5) Effective date.--The amendments made by this subsection
            shall take effect as if included in the enactment of the
            Federally Supported Health Centers Assistance Act of 1992.
        (c) Elimination of Duplicate Waiver Authority for Participants in
    National Health Service Corps.--Section 338E(c) of the Public Health
    Service Act (42 U.S.C. 254o(c)) is amended by striking paragraph (3)
    and redesignating paragraph (4) as paragraph (3).
        (d) Clarification of Prohibition Against Resale of Drugs Under Drug
    Rebate Agreements.--Section 340B(a)(5)(B) of the Public Health Service
    Act (42 U.S.C. 256b(a)(5)(B)), as added by section 602(a) of the
    Veterans Health Care of 1992, is amended by striking ``entity.'' and
    inserting ``covered entity.''.

                Subtitle C--Communications Licensing Improvement

    SEC. 5200. TABLE OF CONTENTS.

        The table of contents is as follows:

                Subtitle C--Communications Licensing Improvement

    Sec. 5200. Table of contents.
                    Chapter 1--Competitive Bidding Authority

    Sec. 5201. Short title.
    Sec. 5202. Findings.
    Sec. 5203. Authority to use competitive bidding.
    Sec. 5204. Conforming amendments.
    Sec. 5205. Regulatory parity.
    Sec. 5206. Effective dates; deadlines for Commission action.
              Chapter 2--Emerging Telecommunications Technologies

    Sec. 5221. Short title.
    Sec. 5222. Amendment to the National Telecommunications and Information
                                Administration Organization Act.
                 Chapter 3--Communications Technical Amendments

    Sec. 5241. Clerical corrections.
    Sec. 5242. Transfer of provisions of law concerning public
                                telecommunications facilities, children's
                                educational television, and
                                telecommunications demonstration program.
    Sec. 5243. Elimination of expired and outdated provisions.
    Sec. 5244. Stylistic consistency.

                    CHAPTER 1--COMPETITIVE BIDDING AUTHORITY

    SEC. 5201. SHORT TITLE.

        This chapter may be cited as the ``Licensing Improvement Act of
    1993''.

    SEC. 5202. FINDINGS.

        The Congress finds that--
                (1) current licensing procedures often delay delivery of
            services to the public and can result in the unjust enrichment
            of applicants on the basis of the value of the public airwaves;
                (2) if licensees are engaged in reselling the use of the
            public airwaves to subscribers for a fee, the licensee should
            pay reasonable compensation to the public for those public
            resources;
                (3) a carefully designed system to obtain competitive bids
            from competing qualified applicants can speed delivery of
            services, promote efficient and intensive use of the
            electromagnetic spectrum, prevent unjust enrichment, and
            produce revenues to compensate the public for the use of the
            public airwaves; and
                (4) therefore, the Federal Communications Commission should
            have the authority to differentiate among multiple qualified
            applicants for a single license using a system of competitive
            bids.

    SEC. 5203. AUTHORITY TO USE COMPETITIVE BIDDING.

        Section 309 of the Communications Act of 1934 (47 U.S.C. 309) is
    amended by adding at the end the following new subsection:
        ``(j) Use of Competitive Bidding.--
                ``(1) General authority.--If mutually exclusive
            applications are filed for any initial license or construction
            permit which will involve a use of the electromagnetic spectrum
            described in paragraph (2), then the Commission shall have the
            authority to grant such license or permit to a qualified
            applicant through the use of a system of competitive bidding
            that meets the requirements of this subsection.
                ``(2) Uses to which bidding may apply.--A use of the
            electromagnetic spectrum is described in this paragraph if the
            Commission determines that--
                        ``(A) the principal use of such spectrum will
                    involve, or is reasonably likely to involve, the
                    licensee receiving compensation from subscribers in
                    return--
                                ``(i) for the licensee enabling those
                            subscribers to receive communications signals
                            that are transmitted utilizing frequencies on
                            which the licensee is licensed to operate; or
                                ``(ii) for the licensee enabling those
                            subscribers to transmit directly communications
                            signals utilizing frequencies on which the
                            licensee is licensed to operate; and
                        ``(B) a system of competitive bidding will promote
                    the objectives described in paragraph (3).
                ``(3) Design of systems of competitive bidding.--For each
            license or permit, or class of licenses or permits, that the
            Commission grants through the use of a competitive bidding
            system, the Commission shall, by rule, establish a competitive
            bidding methodology. The Commission shall seek to design and
            test multiple alternative methodologies under appropriate
            circumstances. In identifying licenses and permits to be issued
            by competitive bidding, in specifying eligibility and other
            characteristics of such licenses and permits, and in designing
            the methodologies for use under this subsection, the Commission
            shall seek to promote the purposes specified in section 1 of
            this Act and the following objectives:
                        ``(A) the development and rapid deployment of new
                    technologies, products, and services for the benefit of
                    the public, including those residing in rural areas,
                    without administrative or judicial delays;
                        ``(B) promoting economic opportunity and
                    competition and ensuring that new and innovative
                    technologies are readily accessible to the American
                    people by avoiding excessive concentration of licenses
                    and by disseminating licenses among a wide variety of
                    applicants, including small businesses and businesses
                    owned by members of minority groups and women;
                        ``(C) recovery for the public of a portion of the
                    value of the public spectrum resource made available
                    for commercial use and avoidance of unjust enrichment
                    through the methods employed to award uses of that
                    resource; and
                        ``(D) efficient and intensive use of the
                    electromagnetic spectrum.
                ``(4) Contents of regulations.--In prescribing rules
            pursuant to paragraph (3), the Commission shall--
                        ``(A) consider alternative payment schedules and
                    methods of calculation, including initial lump sums,
                    installment or royalty payments, guaranteed annual
                    minimum payments, or other schedules or methods that
                    promote the objectives described in paragraph (3)(B),
                    and combinations of such schedules and methods;
                        ``(B) include performance requirements, such as
                    appropriate deadlines and penalties for performance
                    failures, to ensure prompt delivery of service to rural
                    areas, to prevent stockpiling or warehousing of
                    spectrum by licensees or permittees, and to promote
                    investment in and rapid deployment of new technologies
                    and services;
                        ``(C) consistent with the public interest,
                    convenience, and necessity, the purposes of this Act,
                    and the characteristics of the proposed service,
                    prescribe area designations and bandwidth assignments
                    that promote (i) an equitable distribution of licenses
                    and services among geographic areas, (ii) economic
                    opportunity for a wide variety of applicants, including
                    small businesses and businesses owned by members of
                    minority groups and women, and (iii) investment in and
                    rapid deployment of new technologies and services; and
                        ``(D) require such transfer disclosures and
                    antitrafficking restrictions and payment schedules as
                    may be necessary to prevent unjust enrichment as a
                    result of the methods employed to issue licenses and
                    permits.
                ``(5) Bidder and licensee qualification.--No person shall
            be permitted to participate in a system of competitive bidding
            pursuant to this subsection unless such bidder submits such
            information and assurances as the Commission may require to
            demonstrate that such bidder's application is acceptable for
            filing. No license shall be granted to an applicant selected
            pursuant to this subsection unless the Commission determines
            that the applicant is qualified pursuant to subsection (a) and
            sections 308(b) and 310. Consistent with the objectives
            described in paragraph (3), the Commission shall, by rule,
            prescribe expedited procedures consistent with the procedures
            authorized by subsection (i)(2) for the resolution of any
            substantial and material issues of fact concerning
            qualifications.
                ``(6) Rules of construction.--Nothing in this subsection,
            or in the use of competitive bidding, shall--
                        ``(A) limit or otherwise affect the requirements of
                    subsection (h) of this section, section 301, 304, 307,
                    310, or 706, or any other provision of this Act (other
                    than subsections (d)(2) and (e) of this section);
                        ``(B) be construed to convey any rights, including
                    any expectation of renewal of a license, that differ
                    from the rights that apply to other licenses within the
                    same service that were not issued pursuant to this
                    subsection; or
                        ``(C) be construed to prohibit the Commission from
                    issuing nationwide licenses or permits.
                ``(7) Limitation of effect on allocation decisions.--In
            making a decision pursuant to section 303(c) to assign a band
            of frequencies to a use for which licenses or permits will be
            issued pursuant to this subsection, and in prescribing
            regulations pursuant to paragraph (4)(A) and (4)(C) of this
            subsection, the Commission may not base a finding of public
            interest, convenience, and necessity solely or predominantly on
            the expectation of Federal revenues from the use of a system of
            competitive bidding under this subsection.
                ``(8) Treatment of revenues.--All proceeds from the use of
            a competitive bidding system under this subsection shall be
            deposited in the Treasury in accordance with chapter 33 of
            title 31, United States Code. A license or permit issued by the
            Commission under this section shall not be treated as the
            property of the licensee for tax purposes by any State or local
            government entity.
                ``(9) Termination; evaluation.--The authority of the
            Commission to grant a license or permit under this subsection
            shall expire September 30, 1998. Not later than September 30,
            1997, the Commission shall conduct a public inquiry and submit
            to the Congress a report--
                        ``(A) describing the methodologies established by
                    the Commission pursuant to paragraphs (3) and (4);
                        ``(B) comparing the relative advantages and
                    disadvantages of such methodologies in terms of
                    attaining the objectives described in such paragraphs;
                        ``(C) evaluating the extent to which such
                    methodologies have secured prompt delivery of service
                    to rural areas; and
                        ``(D) containing a statement of the revenues
                    obtained, and a projection of the future revenues, from
                    the use of competitive bidding systems under this
                    subsection.''.

    SEC. 5204. CONFORMING AMENDMENTS.

        Section 309 of the Communications Act of 1934 is further amended--
                (1) by striking subsection (i)(1) and inserting the
            following:
        ``(i) Random Selection.--
                ``(1) General authority.--If--
                        ``(A) there is more than one application for any
                    initial license or construction permit which will
                    involve a use of the electromagnetic spectrum; and
                        ``(B) the Commission has determined that the use is
                    not described in subsection (j)(2)(A);
            then the Commission shall have the authority to grant such
            license or permit to a qualified applicant through the use of a
            system of random selection.'';
                (2) in paragraph (2)--
                        (A) by indenting paragraph (2), including
                    subparagraphs (A) through (C), by an additional 2 em
                    spaces; and
                        (B) by inserting ``Determinations of
                    qualifications.--'' after ``(2)'';
                (3) in paragraph (3)--
                        (A) by indenting subparagraphs (A) and (B), and so
                    much of subparagraph (C) as precedes clause (i), by an
                    additional 2 em spaces;
                        (B) by indenting clauses (i) and (ii) of
                    subparagraph (C) by an additional 4 em spaces; and
                        (C) by inserting ``Preferences; diversity.--''
                    after ``(3)'';
                (4) in paragraph (4)--
                        (A) by indenting subparagraphs (A) and (B) of such
                    paragraph by an additional 2 em spaces;
                        (B) by inserting ``Rulemaking schedule and
                    authority.--'' after ``(4)''; and
                        (C) by adding at the end the following new
                    subparagraph:
                ``(C) Not later than 180 days after the date of enactment
            of this subparagraph, the Commission shall prescribe such
            transfer disclosures and antitrafficking restrictions and
            payment schedules as are necessary to prevent the unjust
            enrichment of recipients of licenses or permits as a result of
            the methods employed to issue licenses under this
            subsection.''.

    SEC. 5205. REGULATORY PARITY.

        (a) Amendment.--Section 332 of the Communications Act of 1934 (47
    U.S.C. 332) is amended--
                (1) by striking ``private land'' from the heading of the
            section; and
                (2) by amending striking subsection (c) and inserting the
            following:
        ``(c) Regulatory Treatment of Mobile Services.--
                ``(1) Common carrier treatment of commercial mobile
            services.--(A) A person engaged in the provision of commercial
            mobile services shall, insofar as such person is so engaged, be
            treated as a common carrier for purposes of this Act, except
            for such provisions of title II as the Commission may,
            consistent with the public interest, specify as inapplicable by
            rule. In prescribing any such rule, the Commission may not
            specify section 201, 202, or 208, or any other provision that
            the Commission determines to be necessary in order to ensure
            that the charges, practices, classifications, or regulations
            for or in connection with commercial mobile services are just
            and reasonable and are not unjustly or unreasonably
            discriminatory or is otherwise in the public interest.
                ``(B) Upon reasonable request of any person providing
            commercial mobile service, the Commission shall order a common
            carrier to establish physical connections with such service
            pursuant to the provisions of section 201 of this Act. Except
            to the extent that the Commission is required to respond to
            such a request, this subparagraph shall not be construed as a
            limitation or expansion of the Commission's authority to order
            interconnection pursuant to this Act.
                ``(2) Noncommon carrier treatment of private land mobile
            services.--A person engaged in private land mobile service
            shall not, insofar as such person is so engaged, be treated as
            a common carrier for any purpose under this Act. A common
            carrier (other than a person that was treated as provider of
            private land mobile services prior to the enactment of the
            Licensing Improvement Act of 1993) shall not provide any
            dispatch service on any frequency allocated for common carrier
            service, except to the extent such dispatch service is provided
            on stations licensed in the domestic public land mobile radio
            service before January 1, 1982. The Commission may by
            regulation terminate, in whole or in part, the prohibition
            contained in the preceding sentence if the Commission
            determines that such termination will serve the public
            interest.
                ``(3) State authority to regulate.--(A) Notwithstanding
            sections 2(b) and 221(b), no State or local government shall
            have any authority to impose any rate or entry regulation upon
            any commercial mobile service or any private land mobile
            service, except that this paragraph shall not prohibit a State
            from regulating the other terms and conditions of commercial
            mobile services.
                ``(B) Notwithstanding subparagraph (A), a State may
            petition the Commission for authority to regulate the rates for
            any commercial mobile service and the Commission shall grant
            such petition if such State demonstrates that (i) such service
            is a substitute for land line telephone exchange service for a
            substantial portion of the public within such State, or (ii)
            market conditions with respect to such services fail to protect
            subscribers adequately from unjust and unreasonable rates or
            rates that are unjustly or unreasonably discriminatory. The
            Commission shall provide reasonable opportunity for public
            comment in response to such petition, and shall, within 9
            months after the date of its submission, grant or deny such
            petition. If the Commission grants such petition, the
            Commission shall authorize the State to exercise under State
            law such authority over rates, for such periods of time, as the
            Commission deems necessary to ensure that such rates are just
            and reasonable and not unjustly or unreasonably discriminatory.
                ``(4) Regulatory treatment of communications satellite
            corporation.--Nothing in this subsection shall be construed to
            alter or affect the regulatory treatment required by title IV
            of the Communications Satellite of 1962 of the corporation
            authorized by title III of such Act.
        ``(d) Definitions.--For purposes of this section--
                ``(1) the term `commercial mobile service' means all mobile
            services (as defined in section 3(n)) that--
                        ``(A) are provided for profit (i) to the public,
                    (ii) on an indiscriminate basis, or (iii) to such broad
                    classes of eligible users as to be effectively
                    available to a substantial portion of the public; and
                        ``(B) are interconnected (or have requested
                    interconnection pursuant to paragraph (1)(B)) with the
                    public switched network (as such terms are defined by
                    regulation by the Commission); and
                ``(2) the term `private mobile service' means any mobile
            service (as defined in section 3(n)) that is not a commercial
            mobile service.''.
        (b) Conforming Amendments.--
                (1) Amendments to definitions.--Section 3 of the
            Communications Act of 1934 (47 U.S.C. 153) is amended--
                        (A) in subsection (n)--
                                (i) by inserting ``(1)'' after ``and
                            includes''; and
                                (ii) by inserting before the period at the
                            end the following: ``, (2) a mobile service
                            which provides a regularly interacting group of
                            base, mobile, portable, and associated control
                            and relay stations (whether licensed on an
                            individual, cooperative, or multiple basis) for
                            private one-way or two-way land mobile radio
                            communications by eligible users over
                            designated areas of operation, and (3) any
                            service for which a license is required in a
                            personal communications service established
                            pursuant to the proceeding entitled `Amendment
                            of the Commission's Rules to Establish New
                            Personal Communications Services' (GEN Docket
                            No. 90-314; ET Docket No. 92-100), or any
                            successor proceeding''; and
                        (B) by striking subsection (gg).
                (2) Conforming amendments to section 332.--Section 332 of
            such Act is further amended--
                        (A) in subsection (a), by inserting after ``(a)''
                    the following: ``Management of Private Land Mobile
                    Frequencies.--'';
                        (B) in subsection (b)--
                                (i) by indenting the margin of paragraphs
                            (2) through (4) by 2 em spaces;
                                (ii) by striking ``(b)(1)'' and inserting
                            the following:
        ``(b) Use of Advisory Committee.--
                ``(1) Coordination of frequency assignment.--'';
                                (iii) by inserting ``Exemption.--'' after
                            ``(2)'';
                                (iv) by inserting ``Nonemployee status.--''
                            after ``(3)''; and
                                (v) by inserting ``Application of federal
                            advisory committee act.--'' after ``(4).

    SEC. 5206. EFFECTIVE DATES; DEADLINES FOR COMMISSION ACTION.

        (a) Effective Dates.--
                (1) In general.--Except as provided in paragraph (2), the
            amendments made by this chapter are effective on the date of
            enactment of this Act.
                (2) Effective date of mobile service amendments.--The
            amendments made by section 5205 shall be effective 1 year after
            such date of enactment, except that any person that provides
            private land mobile services before such date of enactment
            shall continue to be treated as a provider of private land
            mobile service until 3 years after such date of enactment.
        (b) Deadlines for Commission Action.--
                (1) General rulemaking.--The Federal Communications
            Commission shall prescribe rules to implement section 309(j) of
            the Communications Act of 1934 (as added by this chapter)
            within 210 days after the date of enactment of this Act.
                (2) PCS orders and licensing.--The Commission shall--
                        (A) within 180 days after such date of enactment,
                    issue a final report and order (i) in the matter
                    entitled ``Redevelopment of Spectrum to Encourage
                    Innovation in the Use of New Telecommunications
                    Technologies'' (ET Docket No. 92-9); and (ii) in the
                    matter entitled ``Amendment of the Commission's Rules
                    to Establish New Personal Communications Services''
                    (GEN Docket No. 90-314; ET Docket No. 92-100); and
                        (B) within 270 days after such date of enactment,
                    commence issuing licenses and permits in the personal
                    communications service.
                (3) Mobile service rulemaking required.--Within 1 year
            after the date of enactment of this Act, the Federal
            Communications Commission shall--
                        (A) issue such modifications or terminations of its
                    regulations concerning private land mobile services as
                    are necessary to implement the amendments made by
                    section 5205;
                        (B) make such other modifications of such
                    regulations as may be necessary to equalize the
                    regulatory treatment of providers of all commercial
                    mobile services that offer services that are
                    substantially similar; and
                        (C) include in such modifications and terminations
                    such provisions as are necessary to provide for an
                    orderly transition to the regulatory treatment required
                    by such amendments.
        (c) Special Rule.--The Federal Communications Commission shall not
    issue any license or permit pursuant to section 309(i) of the
    Communications Act of 1934 after the date of enactment of this Act
    unless the Commission has made the determination required by paragraph
    (1)(B) of such section (as added by this chapter).

              CHAPTER 2--EMERGING TELECOMMUNICATIONS TECHNOLOGIES

    SEC. 5221. SHORT TITLE.

        This chapter may be cited as the ``Emerging Telecommunications
    Technologies Act of 1993''.

    SEC. 5222. AMENDMENT TO THE NATIONAL TELECOMMUNICATIONS AND INFORMATION
                  ADMINISTRATION ORGANIZATION ACT.

        The National Telecommunications and Information Administration
    Organization Act is amended--
                (1) by striking the heading of part B and inserting the
            following:

                 ``PART D--SPECIAL AND TEMPORARY PROVISIONS'';

                (2) by redesignating sections 131 through 135 as sections
            151 through 155, respectively; and
                (3) by inserting after part A the following new part:

               ``PART B--EMERGING TELECOMMUNICATIONS TECHNOLOGIES

    ``SEC. 111. FINDINGS.

        ``The Congress finds that--
                ``(1) the Federal Government currently reserves for its own
            use, or has priority of access to, approximately 40 percent of
            the electromagnetic spectrum that is assigned for use pursuant
            to the Communications Act of 1934;
                ``(2) many of such frequencies are underutilized by Federal
            Government licensees;
                ``(3) the public interest requires that many of such
            frequencies be utilized more efficiently by Federal Government
            and non-Federal licensees;
                ``(4) additional frequencies are assigned for services that
            could be obtained more efficiently from commercial carriers or
            other vendors;
                ``(5) scarcity of assignable frequencies for licensing by
            the Commission can and will--
                        ``(A) impede the development and commercialization
                    of new telecommunications products and services;
                        ``(B) limit the capacity and efficiency of the
                    United States telecommunications systems;
                        ``(C) prevent some State and local police, fire,
                    and emergency services from obtaining urgently needed
                    radio channels; and
                        ``(D) adversely affect the productive capacity and
                    international competitiveness of the United States
                    economy;
                ``(6) a reassignment of these frequencies can produce
            significant economic returns; and
                ``(7) the Secretary of Commerce, the President, and the
            Federal Communications Commission should be directed to take
            appropriate steps to correct these deficiencies.

    ``SEC. 112. NATIONAL SPECTRUM PLANNING.

        ``(a) Planning Activities.--The Assistant Secretary and the
    Chairman of the Commission shall meet, at least biannually, to conduct
    joint spectrum planning with respect to the following issues--
                ``(1) the future spectrum requirements for public and
            private uses, including State and local government public
            safety agencies;
                ``(2) the spectrum allocation actions necessary to
            accommodate those uses; and
                ``(3) actions necessary to promote the efficient use of the
            spectrum, including spectrum management techniques to promote
            increased shared use of the spectrum that does not cause
            harmful interference as a means of increasing commercial
            access.
        ``(b) Reports.--The Assistant Secretary and the Chairman of the
    Commission shall submit a joint annual report to the Committee on
    Energy and Commerce of the House of Representatives, the Committee on
    Commerce, Science, and Transportation of the Senate, the Secretary, and
    the Commission on the joint spectrum planning activities conducted
    under subsection (a) and recommendations for action developed pursuant
    to such activities.
        ``(c) Reporting Requirements.--The first annual report submitted
    after the date of the report by the advisory committee under section
    113(d)(4) shall--
                ``(1) include an analysis of and response to that committee
            report; and
                ``(2) include an analysis of the effect on spectrum
            efficiency and the cost of equipment to Federal spectrum users
            of maintaining separate allocations for Federal Government and
            non-Federal Government licensees for the same or similar
            services.

    ``SEC. 113. IDENTIFICATION OF REALLOCABLE FREQUENCIES.

        ``(a) Identification Required.--The Secretary shall, within 24
    months after the date of the enactment of this part, prepare and submit
    to the President and the Congress a report identifying bands of
    frequencies that--
                ``(1) are allocated on a primary basis for Federal
            Government use and eligible for licensing pursuant to section
            305(a) of the Act (47 U.S.C. 305(a));
                ``(2) are not required for the present or identifiable
            future needs of the Federal Government;
                ``(3) can feasibly be made available, as of the date of
            submission of the report or at any time during the next 15
            years, for use under the Act (other than for Federal Government
            stations under such section 305);
                ``(4) will not result in costs to the Federal Government,
            or losses of services or benefits to the public, that are
            excessive in relation to the benefits that may be obtained by
            non-Federal licensees; and
                ``(5) are most likely to have the greatest potential for
            productive uses and public benefits under the Act.
        ``(b) Minimum Amount of Spectrum Recommended.--
                ``(1) In general.--Based on the report required by
            subsection (a), the Secretary shall recommend for reallocation,
            for use other than by Federal Government stations under section
            305 of the Act (47 U.S.C. 305), bands of frequencies that span
            a total of not less than 200 megahertz, that are located below
            6 gigahertz, and that meet the criteria specified in paragraphs
            (1) through (4) of subsection (a). The Secretary may not
            include, in such 200 megahertz, bands of frequencies that span
            more than 20 megahertz and that are located between 5 and 6
            gigahertz. If the report identifies (as meeting such criteria)
            bands of frequencies spanning more than 200 megahertz, the
            report shall identify and recommend for reallocation those
            bands (spanning not less than 200 megahertz) that meet the
            criteria specified in paragraph (5) of such subsection.
                ``(2) Mixed uses permitted to be counted.--Bands of
            frequencies which the Secretary's report recommends be
            partially retained for use by Federal Government stations, but
            which are also recommended to be reallocated to be made
            available under the Act for use by non-Federal stations, may be
            counted toward the minimum spectrum required by paragraph (1)
            of this subsection, except that--
                        ``(A) the bands of frequencies counted under this
                    paragraph may not count toward more than one-half of
                    the minimum required by paragraph (1) of this
                    subsection;
                        ``(B) a band of frequencies may not be counted
                    under this paragraph unless the assignments of the band
                    to Federal Government stations under section 305 of the
                    Act (47 U.S.C. 305) are limited by geographic area, by
                    time, or by other means so as to guarantee that the
                    potential use to be made by such Federal Government
                    stations is substantially less (as measured by
                    geographic area, time, or otherwise) than the potential
                    use to be made by non-Federal stations; and
                        ``(C) the operational sharing permitted under this
                    paragraph shall be subject to coordination procedures
                    which the Commission shall establish and implement to
                    ensure against harmful interference.
        ``(c) Criteria for Identification.--
                ``(1) Needs of the federal government.--In determining
            whether a band of frequencies meets the criteria specified in
            subsection (a)(2), the Secretary shall--
                        ``(A) consider whether the band of frequencies is
                    used to provide a communications service that is or
                    could be available from a commercial carrier or other
                    vendor;
                        ``(B) seek to promote--
                                ``(i) the maximum practicable reliance on
                            commercially available substitutes;
                                ``(ii) the sharing of frequencies (as
                            permitted under subsection (b)(2));
                                ``(iii) the development and use of new
                            communications technologies; and
                                ``(iv) the use of nonradiating
                            communications systems where practicable; and
                        ``(C) seek to avoid--
                                ``(i) serious degradation of Federal
                            Government services and operations; and
                                ``(ii) excessive costs to the Federal
                            Government and users of Federal Government
                            services.
                ``(2) Feasibility of use.--In determining whether a
            frequency band meets the criteria specified in subsection
            (a)(3), the Secretary shall--
                        ``(A) assume such frequencies will be assigned by
                    the Commission under section 303 of the Act (47 U.S.C.
                    303) over the course of not less than 15 years;
                        ``(B) assume reasonable rates of scientific
                    progress and growth of demand for telecommunications
                    services;
                        ``(C) determine the extent to which the
                    reallocation or reassignment will relieve actual or
                    potential scarcity of frequencies available for
                    licensing by the Commission for non-Federal use;
                        ``(D) seek to include frequencies which can be used
                    to stimulate the development of new technologies; and
                        ``(E) consider the immediate and recurring costs to
                    reestablish services displaced by the reallocation of
                    spectrum.
                ``(3) Analysis of benefits.--In determining whether a band
            of frequencies meets the criteria specified in subsection
            (a)(4), the Secretary shall consider--
                        ``(A) the extent to which equipment is or will be
                    available that is capable of utilizing the band;
                        ``(B) the proximity of frequencies that are already
                    assigned for commercial or other non-Federal use; and
                        ``(C) the activities of foreign governments in
                    making frequencies available for experimentation or
                    commercial assignments in order to support their
                    domestic manufacturers of equipment.
                ``(4) Power agency frequencies.--
                        ``(A) Eligible for mixed use only.--The frequencies
                    assigned to any Federal power agency may only be
                    eligible for mixed use under subsection (b)(2) in
                    geographically separate areas and shall not be
                    recommended for the purposes of withdrawing that
                    assignment. In any case where a frequency is to be
                    shared by an affected Federal power agency and a non-
                    Federal user, such use by the non-Federal user shall,
                    consistent with the procedures established under
                    subsection (b)(2)(C), not cause harmful interference to
                    the affected Federal power agency or adversely affect
                    the reliability of its power system.
                        ``(B) Definition.--As used in this paragraph, the
                    term `Federal power agency' means the Tennessee Valley
                    Authority, the Bonneville Power Administration, the
                    Western Area Power Administration, or the Southwestern
                    Power Administration.
        ``(d) Procedure for Identification of Reallocable Bands of
    Frequencies.--
                ``(1) Submission of preliminary identification to
            congress.--Within 12 months after the date of the enactment of
            this part, the Secretary shall prepare and submit to the
            Congress a report which makes a preliminary identification of
            reallocable bands of frequencies which meet the criteria
            established by this section.
                ``(2) Convening of advisory committee.--Not later than the
            date the Secretary submits the report required by paragraph
            (1), the Secretary shall convene an advisory committee to--
                        ``(A) review the bands of frequencies identified in
                    such report;
                        ``(B) advise the Secretary with respect to (i) the
                    bands of frequencies which should be included in the
                    final report required by subsection (a), and (ii) the
                    effective dates which should be established under
                    subsection (e) with respect to such frequencies;
                        ``(C) receive public comment on the Secretary's
                    report and on the final report; and
                        ``(D) prepare and submit the report required by
                    paragraph (4).
            The advisory committee shall meet at least monthly until each
            of the actions required by section 114(a) have taken place.
                ``(3) Composition of committee; chairman.--The advisory
            committee shall include--
                        ``(A) the Chairman of the Commission and the
                    Assistant Secretary, and one other representative of
                    the Federal Government as designated by the Secretary;
                    and
                        ``(B) representatives of--
                                ``(i) United States manufacturers of
                            spectrum-dependent telecommunications
                            equipment;
                                ``(ii) commercial carriers;
                                ``(iii) other users of the electromagnetic
                            spectrum, including radio and television
                            broadcast licensees, State and local public
                            safety agencies, and the aviation industry; and
                                ``(iv) other interested members of the
                            public who are knowledgeable about the uses of
                            the electromagnetic spectrum.
            A majority of the members of the committee shall be members
            described in subparagraph (B), and one of such members shall be
            designated as chairman by the Secretary.
                ``(4) Recommendations on spectrum allocation procedures.--
            The advisory committee shall, not later than 36 months after
            the date of the enactment of this part, submit to the
            Secretary, the Commission, the Committee on Energy and Commerce
            of the House of Representatives, and the Committee on Commerce,
            Science, and Transportation of the Senate, a report containing
            such recommendations as the advisory committee considers
            appropriate for the reform of the process of allocating the
            electromagnetic spectrum between Federal and non-Federal use,
            and any dissenting views thereon.
        ``(e) Timetable for Reallocation and Limitation.--
                ``(1) Timetable required.--The Secretary shall, as part of
            the report required by subsection (a), include a timetable that
            recommends immediate and delayed effective dates by which the
            President shall withdraw or limit assignments on the
            frequencies specified in the report.
                ``(2) Expedited reallocation of initial 30 mhz permitted.--
            The Secretary may prepare and submit to the President a report
            which specifically identifies an initial 30 megahertz of
            spectrum that meets the criteria described in subsection (a)
            and that can be made available for reallocation immediately
            upon issuance of the report required by this section.
                ``(3) Delayed effective date.--The recommended delayed
            effective dates shall--
                        ``(A) permit the earliest possible reallocation of
                    the frequency bands, taking into account the
                    requirements of section 115(1);
                        ``(B) be based on the useful remaining life of
                    equipment that has been purchased or contracted for to
                    operate on identified frequencies;
                        ``(C) be based on the need to coordinate frequency
                    use with other nations; and
                        ``(D) take into account the relationship between
                    the costs to the Federal Government of changing to
                    different frequencies and the benefits that may be
                    obtained from commercial and other non-Federal uses of
                    the reassigned frequencies.

    ``SEC. 114. WITHDRAWAL OF ASSIGNMENT TO FEDERAL GOVERNMENT STATIONS.

        ``(a) In General.--The President shall--
                ``(1) within 6 months after receipt of the Secretary's
            report under section 113(a), withdraw the assignment to a
            Federal Government station of any frequency which the report
            recommends for immediate reallocation;
                ``(2) within such 6-month period, limit the assignment to a
            Federal Government station of any frequency which the report
            recommends be made immediately available for mixed use under
            section 113(b)(2);
                ``(3) by the delayed effective date recommended by the
            Secretary under section 113(e) (except as provided in
            subsection (b)(4) of this section), withdraw or limit the
            assignment to a Federal Government station of any frequency
            which the report recommends be reallocated or made available
            for mixed use on such delayed effective date;
                ``(4) assign or reassign other frequencies to Federal
            Government stations as necessary to adjust to such withdrawal
            or limitation of assignments; and
                ``(5) transmit a notice and description to the Commission
            and each House of Congress of the actions taken under this
            subsection.
        ``(b) Exceptions.--
                ``(1) Authority to substitute.--If the President determines
            that a circumstance described in paragraph (2) exists, the
            President--
                        ``(A) may substitute an alternative frequency or
                    band of frequencies for the frequency or band that is
                    subject to such determination and withdraw (or limit)
                    the assignment of that alternative frequency or band in
                    the manner required by subsection (a); and
                        ``(B) shall submit a statement of the reasons for
                    taking the action described in subparagraph (A) to the
                    Committee on Energy and Commerce of the House of
                    Representatives and the Committee on Commerce, Science,
                    and Transportation of the Senate.
                ``(2) Grounds for substitution.--For purposes of paragraph
            (1), the following circumstances are described in this
            paragraph:
                        ``(A) the reassignment would seriously jeopardize
                    the national defense interests of the United States;
                        ``(B) the frequency proposed for reassignment is
                    uniquely suited to meeting important governmental
                    needs;
                        ``(C) the reassignment would seriously jeopardize
                    public health or safety; or
                        ``(D) the reassignment will result in costs to the
                    Federal Government that are excessive in relation to
                    the benefits that may be obtained from commercial or
                    other non-Federal uses of the reassigned frequency.
                ``(3) Criteria for substituted frequencies.--For purposes
            of paragraph (1), a frequency may not be substituted for a
            frequency identified by the report of the Secretary under
            section 113(a) unless the substituted frequency also meets each
            of the criteria specified by section 113(a).
                ``(4) Delays in implementation.--If the President
            determines that any action cannot be completed by the delayed
            effective date recommended by the Secretary pursuant to section
            113(e), or that such an action by such date would result in a
            frequency being unused as a consequence of the Commission's
            plan under section 115, the President may--
                        ``(A) withdraw or limit the assignment to Federal
                    Government stations on a later date that is consistent
                    with such plan, except that the President shall notify
                    each committee specified in paragraph (1)(B) and the
                    Commission of the reason that withdrawal or limitation
                    at a later date is required; or
                        ``(B) substitute alternative frequencies pursuant
                    to the provisions of this subsection.
        ``(c) Limitation on Delegation.--Notwithstanding any other
    provision of law, the authorities and duties established by this
    section may not be delegated.

    ``SEC. 115. DISTRIBUTION OF FREQUENCIES BY THE COMMISSION.

        ``Not later than 1 year after the President notifies the Commission
    pursuant to section 114(a)(5), the Commission shall prepare, in
    consultation with the Assistant Secretary when necessary, and submit to
    the President and the Congress, a plan for the distribution under the
    Act of the frequency bands reallocated pursuant to the requirements of
    this part. Such plan shall--
                ``(1) not propose the immediate distribution of all such
            frequencies, but, taking into account the timetable recommended
            by the Secretary pursuant to section 113(e), shall propose--
                        ``(A) gradually to distribute the frequencies
                    remaining, after making the reservation required by
                    subparagraph (B), over the course of a period of not
                    less than 10 years beginning on the date of submission
                    of such plan; and
                        ``(B) to reserve a significant portion of such
                    frequencies for distribution beginning after the end of
                    such 10-year period;
                ``(2) contain appropriate provisions to ensure--
                        ``(A) the availability of frequencies for new
                    technologies and services in accordance with the
                    policies of section 7 of the Act (47 U.S.C. 157); and
                        ``(B) the availability of frequencies to stimulate
                    the development of such technologies;
                ``(3) address (A) the feasibility of reallocating spectrum
            from current commercial and other non-Federal uses to provide
            for more efficient use of the spectrum, and (B) innovation and
            marketplace developments that may affect the relative
            efficiencies of different spectrum allocations; and
                ``(4) not prevent the Commission from allocating bands of
            frequencies for specific uses in future rulemaking proceedings.

    ``SEC. 116. AUTHORITY TO RECOVER REASSIGNED FREQUENCIES.

        ``(a) Authority of President.--Subsequent to the withdrawal of
    assignment to Federal Government stations pursuant to section 114, the
    President may reclaim reassigned frequencies for reassignment to
    Federal Government stations in accordance with this section.
        ``(b) Procedure for Reclaiming Frequencies.--
                ``(1) Unallocated frequencies.--If the frequencies to be
            reclaimed have not been allocated or assigned by the Commission
            pursuant to the Act, the President shall follow the procedures
            for substitution of frequencies established by section 114(b)
            of this part.
                ``(2) Allocated frequencies.--If the frequencies to be
            reclaimed have been allocated or assigned by the Commission,
            the President shall follow the procedures for substitution of
            frequencies established by section 114(b) of this part, except
            that the notification required by section 114(b)(1)(A) shall
            include--
                        ``(A) a timetable to accommodate an orderly
                    transition for licensees to obtain new frequencies and
                    equipment necessary for its utilization; and
                        ``(B) an estimate of the cost of displacing
                    spectrum users licensed by the Commission.
        ``(c) Costs of Reclaiming Frequencies; Appropriations Authorized.--
    The Federal Government shall bear all costs of reclaiming frequencies
    pursuant to this section, including the cost of equipment which is
    rendered unusable, the cost of relocating operations to a different
    frequency band, and any other costs that are directly attributable to
    the reclaiming of the frequency pursuant to this section. There are
    authorized to be appropriated such sums as may be necessary to carry
    out the purposes of this section.
        ``(d) Effective Date of Reclaimed Frequencies.--The Commission
    shall not withdraw licenses for any reclaimed frequencies until the end
    of the fiscal year following the fiscal year in which the President's
    notification is received.
        ``(e) Effect on Other Law.--Nothing in this section shall be
    construed to limit or otherwise affect the authority of the President
    under sections 305 and 706 of the Act (47 U.S.C. 305, 606).

    ``SEC. 117. DEFINITIONS.

        ``As used in this part:
                ``(1) The term `allocation' means an entry in the National
            Table of Frequency Allocations of a given frequency band for
            the purpose of its use by one or more radiocommunication
            services.
                ``(2) The term `assignment' means an authorization given to
            a station licensee to use specific frequencies or channels.
                ``(3) The term `commercial carrier' means any entity that
            uses a facility licensed by the Federal Communications
            Commission pursuant to the Communications Act of 1934 for hire
            or for its own use, but does not include Federal Government
            stations licensed pursuant to section 305 of the Act (47 U.S.C.
            305).
                ``(4) The term `the Act' means the Communications Act of
            1934 (47 U.S.C. 151 et seq.).''.

                 CHAPTER 3--COMMUNICATIONS TECHNICAL AMENDMENTS

    SEC. 5241. CLERICAL CORRECTIONS.

        (a) Amendments to the Communications Act of 1934.--The
    Communications Act of 1934 is amended--
                (1) in section 4(f)(3), by striking ``overtime exceeds
            beyond'' and inserting ``overtime extends beyond'';
                (2) in section 5, by redesignating subsection (f) as
            subsection (e);
                (3) in section 220(b), by striking ``clasess'' and
            inserting ``classes'';
                (4) in section 223(b)(3), by striking ``defendant restrict
            access'' and inserting ``defendant restricted access'';
                (5) in section 226(d), by striking paragraph (2) and
            redesignating paragraphs (3) and (4) as paragraphs (2) and (3),
            respectively;
                (6) in section 227(e)(2), by striking ``national datebase''
            and inserting ``national database'';
                (7) in section 228(c)(6)(D), by striking ``conservation''
            and inserting ``conversation'';
                (8) in section 308(c), by striking ``May 24, 1921'' and
            inserting ``May 27, 1921'';
                (9) in section 331, by amending the heading of such section
            to read as follows:

            ``very high frequency stations and am radio stations'';

                (10) in section 358, by striking ``(a)'';
                (11) in part III of title III--
                        (A) by inserting before section 381 the following
                    heading:

    ``vessels transporting more than six passengers for hire required to be
                        equipped with radio telephone'';

                        (B) by inserting before section 382 the following
                    heading:

             ``vessels excepted from radio telephone requirement'';

                        (C) by inserting before section 383 the following
                    heading:

                         ``exemptions by commission'';

                        (D) by inserting before section 384 the following
                    heading:

     ``authority of commission; operations, installations, and additional
                                  equipment'';

                        (E) by inserting before section 385 the following
                    heading:

                              ``inspections''; and

                        (F) by inserting before section 386 the following
                    heading:

                                ``forfeitures'';

                (12) in section 410(c), by striking ``, as referred to in
            sections 202(b) and 205(f) of the Interstate Commerce Act,'';
                (13) in section 705(e)(3)(A), by striking ``paragraph (4)
            of subsection (d)'' and inserting ``paragraph (4) of this
            subsection'';
                (14) in section 705, by redesignating subsections (f) and
            (g) (as added by Public Law 100-667) as subsections (g) and
            (h); and
                (15) in section 705(h) (as so redesignated), by striking
            ``subsection (f)'' and inserting ``subsection (g)''.
        (b) Amendments to the Communications Satellite Act of 1962.--The
    Communications Satellite Act of 1962 is amended--
                (1) in section 303(a)--
                        (A) by striking ``section 27(d)'' and inserting
                    ``section 327(d)'';
                        (B) by striking ``sec. 29-911(d)'' and inserting
                    ``sec. 29-327(d)'';
                        (C) by striking ``section 36'' and inserting
                    ``section 336''; and
                        (D) by striking ``sec. 29-916d'' and inserting
                    ``sec. 29-336(d)'';
                (2) in section 304(d), by striking ``paragraphs (1), (2),
            (3), (4), and (5) of section 310(a)'' and inserting
            ``subsection (a) and paragraphs (1) through (4) of subsection
            (b) of section 310''; and
                (3) in section 304(e)--
                        (A) by striking ``section 45(b)'' and inserting
                    ``section 345(b)''; and
                        (B) by striking ``sec. 29-920(b)'' and inserting
                    ``sec. 29-345(b)''; and
                (4) in sections 502(b) and 503(a)(1), by striking
            ``Communications Satellite Corporation'' and inserting
            ``communications satellite corporation established pursuant to
            title III of this Act''.
        (c) Conforming Amendment.--Section 1253 of the Omnibus Budget
    Reconciliation Act of 1981 is repealed.

    SEC. 5242. TRANSFER OF PROVISIONS OF LAW CONCERNING PUBLIC
                  TELECOMMUNICATIONS FACILITIES, CHILDREN'S EDUCATIONAL
                  TELEVISION, AND TELECOMMUNICATIONS DEMONSTRATION PROGRAM.

        (a) Amendments.--The Communications Act of 1934 (hereinafter in
    this section referred to as ``the 1934 Act'') and the National
    Telecommunications and Information Administration Organization Act
    (hereinafter in this section referred to as ``the NTIAO Act'') are
    amended as follows:
                (1) The NTIAO Act is amended by inserting after part B (as
            added by chapter 2 of this subtitle) a new part C, the heading
            of which shall be as follows:

        ``PART C--ASSISTANCE FOR PUBLIC TELECOMMUNICATIONS FACILITIES;
    CHILDREN'S EDUCATIONAL TELEVISION; TELECOMMUNICATIONS DEMONSTRATIONS'';

                (2) Sections 390, 391, 392, 393, 393A, 394, and 395 of the
            1934 Act are transferred to such new part C of the NTIAO Act
            and are redesignated as sections 121, 122, 123, 124, 125, 131,
            and 135, respectively, of the NTIAO Act.
                (3) Such new part C of the NTIAO Act is amended--
                        (A) by inserting before section 121 the following:

    ``Subpart 1--Assistance for Public Telecommunications Facilities'' and;

                        (B) by inserting before section 131 the following:

        ``Subpart 2--National Endowment for Children's Television'' and;

                        (C) by inserting before section 135 the following:

               ``Subpart 3--Telecommunications Demonstrations''.

                (4) Section 125 of the NTIAO Act (as added by paragraph (2)
            of this subsection) is amended by striking ``section 390'' and
            inserting ``section 121''.
                (5) Each of such sections 121 through 135 is amended so
            that the section designation and section heading of each such
            shall be in the form and typeface of the section designation
            and section heading of this section.
        (b) Conforming Amendment to Communications Act of 1934.--Part IV of
    title III of the 1934 Act is amended by striking out subparts A, B, and
    C.
        (c) References in Other Laws and Documents.--Any reference to any
    section or other provision of subpart A, B, or C of part IV of title
    III of the 1934 Act in any law, rule, regulation, certificate,
    directive, instruction, or other official paper in force on the date of
    enactment of this section shall be deemed to refer to the section or
    other provision of subpart 1, 2, or 3 of part C of the NTIAO Act to
    which such section or other provision is transferred by this section.

    SEC. 5243. ELIMINATION OF EXPIRED AND OUTDATED PROVISIONS.

        (a) Amendments to the Communications Act of 1934.--The
    Communications Act of 1934 is amended--
                (1) in section 7(b), by striking ``or twelve months after
            the date of the enactment of this section, if later'' both
            places it appears;
                (2) in section 212, by striking ``After sixty days from the
            enactment of this Act it shall'' and inserting ``It shall'';
                (3) in section 213, by striking subsection (g) and
            redesignating subsection (h) as subsection (g);
                (4) in section 214(a), by striking ``section 221 or 222''
            and inserting ``section 221'';
                (5) in section 220(b), by striking ``, as soon as
            practicable,'';
                (6) in section 222--
                        (A) by striking paragraph (1) of subsection (a);
                        (B) by redesignating paragraphs (2) and (3) of such
                    subsection as paragraphs (1) and (2), respectively;
                        (C) by striking paragraph (2) of subsection (b);
                        (D) by redesignating subsection (b)(1) as
                    subsection (b); and
                        (E) by striking subsections (c), (d), and (e);
                (7) in section 224(b)(2), by striking ``Within 180 days
            from the date of enactment of this section the Commission'' and
            inserting ``The Commission'';
                (8) in 226(e)(1), by striking ``, within 9 months after the
            date of enactment of this section,'';
                (9) in section 309(i)(4)(A), by striking ``The commission,
            not later than 180 days after the date of the enactment of the
            Communications Technical Amendments Act of 1982, shall,'' and
            inserting ``The Commission shall,'';
                (10) by striking section 328;
                (11) in section 331(b), by striking the last sentence;
                (12) in section 413, by striking ``, within sixty days
            after the taking effect of this Act,'';
                (13) in section 624(d)(2)--
                        (A) by striking out ``(A)'';
                        (B) by inserting ``of'' after ``restrict the
                    viewing''; and
                        (C) by striking subparagraph (B);
                (14) by striking sections 702 and 703;
                (15) in section 704--
                        (A) by striking subsections (b) and (d); and
                        (B) by redesignating subsection (c) as subsection
                    (b);
                (16) in section 705(g) (as redesignated by section
            5211(15)), by striking ``Within 6 months after the date of
            enactment of the Satellite Home Viewer Act of 1988, the Federal
            Communications Commission'' and inserting ``The Commission'';
                (16) in section 710(f)--
                        (A) by striking the first and second sentences; and
                        (B) in the third sentence, by striking
                    ``Thereafter, the Commission'' and inserting ``The
                    Commission'';
                (17) in section 712(a), by striking ``, within 120 days
            after the effective date of the Satellite Home Viewer Act of
            1988,''; and
                (18) by striking section 713.
        (b) Amendments to the Communications Satellite Act of 1962.--The
    Communications Satellite Act of 1962 is amended--
                (1) in section 201(a)(1), by striking ``as expeditiously as
            possible,'';
                (2) by striking sections 301 and 302 and inserting the
            following:

    ``SEC. 301. CREATION OF CORPORATION.

        ``There is authorized to be created a communications satellite
    corporation for profit which will not be an agency or establishment of
    the United States Government.

    ``SEC. 302. APPLICABLE LAWS.

        ``The corporation shall be subject to the provisions of this Act
    and, to the extent consistent with this Act, to the District of
    Columbia Business Corporation Act. The right to repeal, alter, or amend
    this Act at any time is expressly reserved.'';
                (3) in section 304(a), by striking ``at a price not in
            excess of $100 for each share and'';
                (4) in section 404--
                        (A) by striking subsections (a) and (c); and
                        (B) by striking ``(b)'' at the beginning of
                    subsection (b);
                (5) in section 503--
                        (A) by striking paragraph (2) of subsection (a);
                    and
                        (B) by redesignating paragraph (3) of subsection
                    (a) as paragraph (2) of such subsection;
                        (C) by striking subsection (b);
                        (D) in subsection (g)--
                                (i) by striking ``subsection (c)(3)'' and
                            inserting ``subsection (b)(3)''; and
                                (ii) by striking the last sentence; and
                        (E) by redesignating subsections (c) through (h) as
                    subsections (b) through (g), respectively;
                (5) by striking sections 505, 506, and 507; and
                (6) by redesignating section 508 as section 505.

    SEC. 5244. STYLISTIC CONSISTENCY.

        The Communications Act of 1934 and the Communications Satellite Act
    of 1962 are amended so that the section designation and section heading
    of each section of such Acts shall be in the form and typeface of the
    section designation and heading of this section.

                          Subtitle D--Energy Programs

    SEC. 5301. NUCLEAR REGULATORY COMMISSION ANNUAL CHARGES.

        Section 6101(a)(3) of the Omnibus Budget Reconciliation Act of 1990
    (42 U.S.C. 2214(a)(3)) is amended by striking ``September 30, 1995''
    and inserting ``September 30, 1998''.

                     TITLE VI--COMMITTEE ON FOREIGN AFFAIRS

        In order to implement its reconciliation instructions, the
    Committee on Foreign Affairs recommends changes in law that are also
    recommended by the Committee on Post Office and Civil Service. These
    changes in law, which are contained in title X of this Act, would
    reduce direct spending under the Foreign Service Retirement and
    Disability Fund and the Foreign Service Pension System by requiring a
    3-month delay in cost-of-living adjustments in each of the fiscal years
    1994, 1995, and 1996.

                     TITLE VII--COMMITTEE ON THE JUDICIARY

    SEC. 7001. PATENT AND TRADEMARK FEES.

        Section 10101 of the Omnibus Budget Reconciliation Act of 1990 (35
    U.S.C. 41 note) is amended--
                (1) in subsection (a) by striking ``1995'' and inserting
            ``1998'';
                (2) in subsection (b)(2) by striking ``1995'' and inserting
            ``1998''; and
                (3) in subsection (c)--
                        (A) by striking ``through 1995'' and inserting
                    ``through 1998''; and
                        (B) by adding at the end the following:
                ``(6) $111,000,000 in fiscal year 1996.
                ``(7) $115,000,000 in fiscal year 1997.
                ``(8) $119,000,000 in fiscal year 1998.''.

             TITLE VIII--COMMITTEE ON MERCHANT MARINE AND FISHERIES

    SEC. 8001. EXTENSION OF VESSEL TONNAGE DUTIES.

        (a) Extension of Duties.--Section 36 of the Act of August 5, 1909
    (36 Stat. 111; 46 App. U.S.C. 121), is amended by--
                (1) striking ``and 1995,'' each place it appears and
            inserting ``1995, 1996, 1997, 1998,'';
                (2) striking ``place,'' and inserting ``place;''; and
                (3) striking ``port, not, however, to include vessels in
            distress or not engaged in trade'' and inserting ``port.
            However, neither duty shall be imposed on vessels in distress
            or not engaged in trade''.
        (b) Conforming Amendment.--The Act of March 8, 1910 (36 Stat. 234;
    46 App. U.S.C. 132), is amended by striking ``and 1995,'' and inserting
    ``1995, 1996, 1997, and 1998,''.
        (c) Technical Correction.--
                (1) Correction.--Section 10402(a) of the Omnibus Budget
            Reconciliation Act of 1990 (104 Stat. 1388-398) is amended by
            striking ``in the second paragraph''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall be effective on and after November 5, 1990.

    SEC. 8002. SENSE OF THE CONGRESS ON THE INLAND WATERWAYS FUEL TAX.

        (a) Findings.--The Congress finds the following:
                (1) The Administration has proposed to increase the tax on
            inland barge fuels from $0.19 to $1.19 per gallon by 1997,
            which represents an increase of 525 percent.
                (2) The General Accounting Office has recently identified
            117 forms of Federal fees, taxes, and assessments, not
            including customs duties, which raise some $2,000,000,000 in
            Federal revenues each year.
                (3) Barge transportation is one of the most competitive,
            efficient, safe, and environmentally friendly modes of
            transportation.
                (4) Barges transport 15 percent of our Nation's commerce
            and provide jobs to some 180,000 Americans.
                (5) The Administration's proposed increase would add
            $420,000,000 in new taxes for operators on inland waterways,
            which is more than their pretax profits.
                (6) This increase would cause barge rates to skyrocket,
            increasing costs to consumers and devastating industries
            dependent upon the commercial use of barges such as coal,
            agriculture, and petrochemicals, and would add to our
            unfavorable balance of trade payments by hurting the
            competitiveness of United States exports.
                (7) Because the price of certain agricultural commodities,
            such as grain, are set in the world marketplace, increased
            inland barge fuel taxes could not be passed on to consumers and
            would largely be borne by our Nation's farmers.
                (8) The Senate on March 18, 1993, voted 88 to 12 to reject
            any further increase in inland barge fuel taxes.
                (9) This huge tax increase would cause many barge companies
            to go out of business, would result in thousands of lost
            American jobs, and would further burden the already beleaguered
            United States maritime industry.
        (b) Sense of Congress.--It is the sense of the Congress that the
    inland waterways fuel tax should not be further increased beyond those
    increases already mandated by law.

                    TITLE IX--COMMITTEE ON NATURAL RESOURCES

    SEC. 9001. ANNUAL DIRECT GRANT ASSISTANCE.

        (a) Repeal.--Sections 3 and 4 of the Act of March 24, 1976 entitled
    ``a Joint Resolution to approve the `Covenant To Establish a
    Commonwealth of the Northern Mariana Islands in Political Union with
    the United States of America', and for other purposes'' (90 Stat. 263
    and following; 48 U.S.C. 1681 note) are repealed, effective on October
    1, 1993.
        (b) Definitions.--As used in this section:
                (1) Committees.--The term ``committees'' means the
            Committee on Natural Resources of the House of Representatives
            and the Committee on Energy and Natural Resources of the
            Senate.
                (2) Recommendations.--The term ``Recommendations'' means
            the document executed December 17, 1992, between the special
            representative of the President of the United States and the
            special representatives of the Governor of the Commonwealth of
            the Northern Mariana Islands relating to future federal
            assistance for the Northern Mariana Islands.
                (3) Reporting date.--The term ``reporting date'' means the
            date on which the budget of the President for the fiscal year
            1995 is required to be submitted to the Congress under section
            1105 of title 31, United States Code.
        (c) Assistance.--
                        (1) Amounts.--Except as otherwise provided under
                    this section, enactment of this section shall
                    constitute a commitment and pledge of the full faith
                    and credit of the United States for the payment of the
                    following amounts:
                                (A) In fulfillment of the United States
                            obligation under P.L. 94-241 and the
                            authorization in P.L. 95-348, $3,000,000 for
                            fiscal year 1994, which shall be available only
                            for the American Memorial Park, located at
                            Tanapag Harbor Reservation, Saipan, to be
                            expended in accordance with section 5 of the
                            Act entitled ``An Act to authorize
                            appropriations for certain insular areas of the
                            United States, and for other purposes'',
                            approved August 18, 1978 (92 Stat. 492), for
                            the primary purpose of constructing an
                            appropriate monument honoring the dead in the
                            World War II Mariana Islands campaign.
                                (B) $19,000,000 for fiscal year 1994, to be
                            held in trust in a special account by the
                            Secretary of the Interior for American Samoa,
                            the Commonwealth of the Northern Mariana
                            Islands, Guam, the Trust Territory of the
                            Pacific Islands, and the Virgin Islands, and to
                            be disbursed by the Secretary during fiscal
                            year 1994 for essential capital improvement
                            projects. Such disbursements shall be made by
                            the Secretary for projects described in plans
                            submitted to the Secretary by the governments
                            of American Samoa, the Commonwealth of the
                            Northern Mariana Islands, Guam, the Trust
                            Territory of the Pacific Islands, and the
                            Virgin Islands. No such disbursements shall be
                            made pursuant to any such plan until after the
                            expiration of a period of 60 days after such
                            plan has been submitted to the committees. No
                            such disbursements shall be made to the
                            Commonwealth of the Northern Mariana Islands
                            during fiscal year 1994 pursuant to any such
                            plan until the committees have received the
                            reports required under subsection (d)(3) and a
                            Joint Resolution has been adopted expressing
                            the sense of Congress that disbursements are
                            appropriate. The Inspector General of the
                            Department of the Interior shall (i) monitor
                            the expenditure of such funds to determine
                            whether such funds are expended in accordance
                            with applicable law, and (ii) submit a report
                            of the findings to the committees not later
                            than January 1, 1995.
                                (C) Subject to paragraphs (2), (3), and (4)
                            and subject to subsection (d), not more than
                            $98,000,000 for the 6-year period beginning
                            October 1, 1994, for the government of the
                            Commonwealth of the Northern Mariana Islands,
                            for capital improvement projects, at annual
                            amounts that shall not exceed those specified
                            for the Federal contribution within the general
                            funding schedule contained in the
                            Recommendations.
                        (2) Matching ratio and interest earnings.--Nothing
                    in this section shall be construed to--
                                (A) modify the matching ratio requirement
                            specified in the funding schedule contained in
                            the Recommendations; or
                                (B) modify the terms of the Recommendations
                            as to the availability of interest earnings on
                            funds contributed under Public Law 99-396 upon
                            meeting the terms of the grant pledge
                            agreements entered into under Public Law 99-
                            396.
                        (3) Rota, tinian, and saipan.--No less than \1/8\th
                    share of the funds made available under subsection
                    (c)(1)(C) shall be expended in the islands of Rota and
                    Tinian and no less than \1/4\th share shall be expended
                    in Saipan.
                        (4) Applicability of grant regulations.--The
                    Federal assistance provided under this section shall be
                    subject to the applicable Federal grant regulations set
                    forth in the Common Rule (43 C.F.R. 12a, OMB Circular
                    A-102, and OMB Circular A-128).
        (d) Condition on Multi-Year Assistance.--
                (1) Joint resolution.--Amounts under subsection (c)(1)(C)
            for fiscal years 1995 through 2000 shall be as determined by
            the Congress by joint resolution. It is the intent of the
            Congress that the committees report such a joint resolution
            after considering the plan referred to in paragraph (2) and
            reports required by this subsection.
                (2) Capital improvement projects plan.--The plan referred
            to in paragraph (1) is a plan developed and submitted by the
            Governor of the Commonwealth of the Northern Mariana Islands to
            the Secretary of the Interior as approved by the legislature of
            the Commonwealth for new and reconstructed capital
            infrastructure projects, indicating the order of priority,
            together with cost estimates for each project and
            identification of sources of financing for each project. The
            Secretary of the Interior shall submit the plan, together with
            his recommendations, to the committees not later than the
            reporting date.
                (3) Reports.--Each of the following reports shall be
            submitted to the committees not later than the reporting date
            as follows:
                        (A) Revenue burden.--The Comptroller General of the
                    United States, after consultation with the government
                    of the Northern Mariana Islands, shall submit a report
                    describing the effective revenue burden (including all
                    taxes and fees) imposed by the government of the
                    Commonwealth of the Northern Mariana Islands. The
                    report shall--
                                (i) address whether revenues raised are
                            sufficient to meet the infrastructure needs of
                            the Commonwealth; and
                                (ii) compare the revenue burden of the
                            Commonwealth with that of Guam.
                        (B) Compliance with audit recommendations.--The
                    Inspector General of the Department of the Interior
                    shall submit a report on (i) compliance by the
                    government of the Commonwealth of the Northern Mariana
                    Islands with recommendations made by the Inspector
                    General pursuant to audits of the government of the
                    Commonwealth, and (ii) on all unfulfilled commitments
                    made by the government of the Commonwealth in response
                    to those recommendations.
                        (C) Assessment of minimum wage.--The Secretary of
                    Labor, after consultation with the government of the
                    Commonwealth of the Northern Mariana Islands, shall
                    submit a report which assesses whether--
                                (i) the minimum wage policies of the
                            Commonwealth are sufficient for the maintenance
                            of the minimum standard of living necessary for
                            health, efficiency, and general well-being of
                            workers in the Commonwealth;
                                (ii) the prevailing wages paid in the
                            Commonwealth are effectively reduced by the
                            immigration policy of the Commonwealth; and
                                (iii) the wage rate in the Commonwealth
                            gives industries in the Commonwealth a
                            competitive advantage over industries in the
                            United States outside of the Commonwealth.
                        (D) Immigration policy and burden on
                    infrastructure.--(i) The Attorney General of the United
                    States, after consultation with the government of the
                    Commonwealth of the Northern Mariana Islands, shall
                    submit a report which assesses--
                                (I) whether the immigration laws of the
                            Commonwealth are appropriate in light of the
                            social and economic situation in the
                            Commonwealth;
                                (II) the extent to which the Commonwealth
                            is relying on temporary alien workers to meet
                            the Commonwealth's permanent labor needs;
                                (III) whether the Commonwealth has taken
                            steps to reduce its dependence on temporary
                            alien workers; and
                                (IV) the political and civil rights of the
                            alien population as compared to the resident
                            population.
                        (ii) The Comptroller General of the United States
                    shall submit a report to the Congress which analyzes
                    the socioeconomic impact of the immigration policy of
                    the Commonwealth of the Northern Mariana Islands,
                    including the financial burden imposed by the alien
                    population on the infrastructure.
                        (E) Environmental laws.--The Secretary of the
                    Interior and the Administrator of the Environmental
                    Protection Agency shall each submit a report to the
                    Congress on the compliance by the Commonwealth of the
                    Northern Mariana Islands with United States
                    environmental laws, including (but not limited to) the
                    National Environmental Policy Act of 1969, the
                    Endangered Species Act of 1973, and the Federal Water
                    Pollution Control Act.

    SEC. 9002. NET RECEIPTS SHARING.

        Section 35 of the Mineral Leasing Act is amended as follows:
                (1) Strike the last sentence.
                (2) Insert ``(a) In General.--'' after ``Sec. 35.''
                (3) Insert ``and, subject to subsection (b),'' between
            ``United States;'' and ``50 percentum''.
                (4) Add the following new subsection at the end thereof:
        ``(b) Administrative Costs.--(1) In calculating the amount to be
    paid to each State during any fiscal year under this section and under
    other provisions of law requiring payment to a State of any revenues
    derived from the leasing of any other onshore lands or interest in land
    owned by the United States for the production of the same types of
    minerals as are leasable under this Act or for the production of
    geothermal steam, prior to the division and distribution of such
    leasing receipts between the States and the United States, the
    Secretary shall deduct 50 percent of the portion of the enacted
    appropriations of the Department of the Interior and of other
    departments and agencies of the United States for the preceding fiscal
    year allocable to the administration and enforcement of this Act and
    such other provisions of law. Such deduction shall be in approximately
    equal amounts each month (subject to paragraph (3)).
        ``(2) The proportion of the deduction required under paragraph (1)
    which is allocable to each State shall be a percentage of the total
    deduction allocable to all States. The percentage shall be determined
    by dividing--
                ``(A) the monies disbursed to the State during the
            preceding fiscal year under the provisions of this section and
            the other provisions of law referred to in paragraph (1), by
                ``(B) the total money disbursed to all States during that
            fiscal year under such provisions.
        ``(3) If the amount otherwise deductible under this subsection in
    any month from the portion of revenues to be distributed to a State
    exceeds the amount payable to the State during that month, any amount
    exceeding the amount payable shall be carried forward and deducted from
    amounts payable to the State in subsequent months.
        ``(4) All amounts deducted under this subsection from monies
    otherwise payable to a State shall be credited to miscellaneous
    receipts in the Treasury.''.

    SEC. 9003. HARD ROCK MINING CLAIM MAINTENANCE AND LOCATION FEES.

        (a) Claim Maintenance and Location Fees.--
                (1) Claim Maintenance Fees.--The holder of each unpatented
            mining claim, mill or tunnel site located pursuant to the
            Mining Laws of the United States (whether located before or
            after enactment of this Act) shall pay to the Secretary of the
            Interior or his designee for each assessment year a flat claim
            maintenance fee of not less than $100 per claim. Such claim
            maintenance fee shall be in lieu of the assessment work
            requirement contained in the Mining Law of 1872 (30 U.S.C. 28-
            28e) and the related filing requirements contained in section
            314 (a) and (c) of the Federal Land Policy and Management Act
            of 1976 (43 U.S.C. 1744 (a) and (c)).
                (2) Location Fee.--For each mining claim, mill or tunnel
            site located pursuant to the Mining Laws of the United States
            after the date of enactment of this Act, the claimant shall pay
            the Secretary a location fee of $25.
        (b) Time of Payment.--The claim maintenance fee payable under
    subsection (a)(1) for any assessment year shall be paid before the
    commencement of the assessment year, except that for the initial
    assessment year in which the location is made, the locator shall pay
    the claim maintenance fee at the time the location notice is recorded
    with the Bureau of Land Management. The location fee imposed under
    subsection (a)(2) shall be payable not later than 90 days after the
    date of location
        (c) Deposit in Treasury.--The Secretary shall deposit monies
    received under this Act as miscellaneous receipts in the Treasury.
        (d) Co-ownership.--The co-ownership provisions of section 2324 of
    the Mining Law of 1872 (30 U.S.C. 28) shall remain in effect with
    respect to mining claims subject to such provisions except that the
    annual claim maintenance fee, where applicable, shall be paid in lieu
    of applicable assessment requirements and expenditures.
        (e) Forfeiture.--Failure to make the annual payment of any claim
    maintenance or location fee required with respect to any unpatented
    mining claim, mill, or tunnel site required by subsection (a) shall
    conclusively constitute a forfeiture by the holder of the unpatented
    mining claim, mill or tunnel site, effective at noon on the date the
    payment is due.
        (f) FLPMA Filing Requirements.--Nothing in this Act shall change or
    modify the requirements of section 314(b) of the Federal Land Policy
    and Management Act of 1976 (43 U.S.C. 1744(b)) or the requirements of
    section 314(c) of the Federal Land Policy and Management Act of 1976
    (43 U.S.C. 1744(c)) related to filings required by such section 314(b).
    Such requirements shall remain in effect with respect to claims, and
    mill or tunnel sites for which fees are required to be paid under this
    section.
        (g) Rules and Regulations.--The Secretary of the Interior shall
    promulgate rules and regulations to carry out the purposes of this
    section as soon as practicable after the date of enactment of this Act.
        (h) Purchasing Power Adjustment.--Every 5 years following the date
    of enactment of this Act, or more frequently if the Secretary
    determines a more frequent adjustment to be reasonable, the Secretary
    of the Interior shall adjust the fees specified in subsection (a) to
    reflect changes in the purchasing power of the dollar. The Secretary
    shall use the Consumer Price Index for all urban consumers published by
    the Department of Labor as the basis for adjustment, rounding according
    to the adjustment process of conditions of the Federal Civil Penalties
    Inflation Adjustment Act of 1990 (104 Stat. 890). The Secretary shall
    provide claimants notice of any adjustment made under this subsection
    not later than July 1 of any year in which the adjustment is made. A
    fee adjustment under this paragraph shall begin to apply the first
    assessment which begins after the adjustment is made.
        (i) Oil Shale Claims Subject To Claim Maintenance Fees Under Energy
    Policy Act of 1992.--This section shall not apply to any oil shale
    claims for which a fee is required to be paid under section 2511(e)(2)
    of the Energy Policy Act of 1992 (Public Law 102-486; 106 Stat. 3111;
    30 U.S.C. 242).
        (j) Exception for Holders of Fewer than 50 Claims.--
                (1) Eligibility.--In accordance with paragraph (3), a
            claimant may be eligible for a waiver or reduction of the claim
            maintenance fees imposed under this section if the claimant
            certifies in writing to the Secretary that on the date the
            payment was due, the claimant and all related parties--
                        (A) held not more than 50 mining claims, mill
                    sites, or tunnel sites, or any combination thereof, on
                    public lands; and
                        (B) have performed assessment work sufficient to
                    maintain the mining claims held by the claimant and
                    such related parties for the assessment year ending on
                    noon of September 1 of the calendar year in which
                    payment of the claim maintenance fee was due; except
                    that such performance of assessment work shall not be
                    required by reason of section 5 of Public Law 94-429,
                    commonly known as the Mining in the Parks Act, or such
                    other laws that before the date of the enactment of
                    this Act removed the applicability of the assessment
                    work requirement of the general mining laws for any
                    claim subject to such laws.
                (2) Holder.--For purposes of paragraph (1), with respect to
            any claimant, the term ``related parties'' means--
                        (A) the spouse and dependent children (as defined
                    in section 152 of the Internal Revenue Code of 1986),
                    of the claimant; and
                        (B) a person affiliated with the claimant,
                    including--
                                (i) a person controlled by, controlling, or
                            under common control with the claimant; and
                                (ii) a subsidiary or parent company or
                            corporation of the claimant.
                (3) Waived or reduced maintenance fees.--
                        (A) 10 or fewer claims.--The Secretary of the
                    Interior may waive the claim maintenance fee imposed
                    under this section in its entirety for 10 or fewer
                    claims held by a claimant eligible under paragraph (1).
                        (B) 11 or more claims.--
                                (i) In general.--Subject to clause (ii),
                            for a claimant eligible under paragraph (1),
                            the Secretary may reduce the claim maintenance
                            fee imposed under this section to $25 per claim
                            for each claim in excess of 10.
                                (ii) Limitation.--The reduction provided
                            for in this subparagraph shall be available for
                            no more than 50 claims held by a claimant who
                            is eligible under paragraph (1).
                (4) Payment in lieu of annual labor requirements.--The
            third sentence of section 2324 of the Revised Statutes (30
            U.S.C. 28) is amended by inserting after ``On each claim
            located after the tenth day of May, eighteen hundred and
            seventy-two,'' the following: ``for which a waiver of the
            maintenance fee, or a reduced maintenance fee, under section
            9003 of the Omnibus Budget Reconciliation Act of 1993 has been
            granted under subsection (j) of that section,''.
                (5) Filing requirements.--The holder of any unpatented
            mining claim for which a waiver of the maintenance fee, or a
            reduced maintenance fee, has been granted pursuant to this
            subsection shall continue to be subject to the filing
            requirements contained in sections 314(a) and (c) of the
            Federal Land Policy Management Act of 1976 (43 U.S.C. 1744(a)
            and (c)).
        (k) Effective Date.--This section shall take effect with respect to
    assessment years beginning after August 31, 1994.

    SEC. 9004. FEDERAL IRRIGATION WATER SURCHARGE.

        (a) Findings and Purposes.--
                (1) Findings.--The Congress finds that--
                        (A) the construction and operation of Federal
                    reclamation projects have contributed to the depletion
                    of streams, the alteration of riparian habitat, and the
                    degradation of water quality;
                        (B) such impacts have had adverse impacts on fish
                    and wildlife resources; and
                        (C) the restoration of fish and wildlife and
                    related habitat affected by the construction or
                    operation of Federal reclamation projects is a
                    continuing responsibility of the beneficiaries of such
                    projects.
                (2) Purposes.--The purposes of this section are to--
                        (A) incorporate the restoration of fish and
                    wildlife resources and related habitat affected by the
                    construction or operation of Federal reclamation
                    projects into the annual operation and maintenance
                    requirements of such projects;
                        (B) establish a fair and equitable mechanism for
                    securing timely payments from the beneficiaries of such
                    projects for the implementation, operation, and
                    maintenance of fish and wildlife restoration measures;
                        (C) accelerate the rate of restoration and recovery
                    of depleted populations of indigenous fish and
                    wildlife; and
                        (D) encourage more efficient use of water resources
                    by the beneficiaries of Federal reclamation projects.
        (b) Operational Charges.--
                (1) In general.--Individuals or non-Federal entities that
            receive delivery of water (including by exchange) which is
            stored in or transported through Federal reclamation projects
            or project facilities or projects or project facilities
            constructed by the Secretary of the Army that meet the
            conditions specified in paragraph (1) or (2) of section 212(a)
            of the Reclamation Reform Act of 1982 (Public Law 97-293, 43
            U.S.C. 390ll), except for facilities of the Central Valley
            Project, California (as that project is defined by title XXXIV
            of Public Law 102-575), shall, pursuant to such terms,
            conditions, and procedures as the Secretary of the Interior may
            prescribe, pay to the United States an operation and
            maintenance charge sufficient to yield at least $10,000,000
            (January 1993 price levels) annually in the years 1994, 1995,
            and 1996 and at least $15,000,000 (January 1993 price levels)
            annually in 1997 and each year thereafter.
                (2) Payments.--Payments required by paragraph (1) shall be
            made without reduction or deferral by the Secretary under any
            provision of reclamation law and without regard to whether an
            individual or entity has discharged its repayment obligation
            within the meaning of the first section of the Act of July 2,
            1956 (70 Stat. 483; 43 U.S.C. 485h-1), section 213 of the
            Reclamation Reform Act of 1982 (Public Law 97-293, 43 U.S.C.
            390mm), or any other provision of Federal Reclamation law. The
            payments shall be in addition to any other repayments owed or
            made to the United States and shall not be applied or credited
            to an individual's or entity's repayment of project
            construction costs, payment of other annual project operation
            and maintenance costs, payment of interest, or reduction of any
            contractual obligation the individual or entity may have with
            the United States.
        (c) Natural Resources Restoration Fund.--There is hereby
    established in the Treasury of the United States a fund to be known as
    the ``Natural Resources Restoration Fund'' (hereafter in this section
    referred to as the ``Fund''). All payments of the operation and
    maintenance charges authorized in subsection (b) shall be deposited in
    the Fund, and shall be available in the fiscal year following deposit
    and thereafter, to such extent or in such amounts as are provided in
    advance in appropriation Acts, for expenditures by the Secretary of the
    Interior for the benefit of fish and wildlife resources, including
    habitat, affected by construction or operation of the projects referred
    to in this section.
        (d) Indian Land Owners.--For the purposes of this section, Indian
    tribes or individual Indian beneficial owners of land held in trust by
    the United States or subject to a restriction against alienation by the
    United States shall be considered to be Federal entities.
        (e) Federal Reclamation Law.--This section shall constitute an
    amendment of and a supplement to the Federal Reclamation laws (the
    Reclamation Act of 1902, 32 Stat. 388, and Acts amendatory thereof and
    supplementary thereto).

    SEC. 9005. RECREATION USER FEES.

        (a) Land and Water Conservation Fund Act of 1965.--
                (1) In general.--The first sentence of section 4(b) of the
            Land and Water Conservation Fund Act of 1965 (relating to
            recreation use fees) is amended by striking out ``picnic
            tables, or boat ramps'' and all that follows down through the
            period at the end thereof and inserting the following: ``or
            picnic tables, and in no event shall there be any charge for
            the use of any campground not having a majority of the
            following: tent or trailer spaces, drinking water, access road,
            refuse containers, toilet facilities, fee collection by an
            employee or agent of the Federal agency operating the facility,
            reasonable visitor protection, and simple devices for
            containing a campfire (where campfires are permitted). For
            purposes of this subsection, the term `specialized outdoor
            recreation site' includes but shall not be limited to
            campgrounds, swimming sites, boat launch facilities, and
            managed parking lots.''. The second sentence of such section
            4(b) is hereby repealed.
                (2) Conforming amendment.--Section 210 of Public Law 90-483
            (82 Stat. 746; 16 U.S.C. 460d-3) is repealed.
        (b) Costs of Collection.--Section 4(i) of the Land and Water
    Conservation Fund Act of 1965 (relating to special accounts for fees
    collected) is amended by inserting ``(A)'' after ``(1)'' and by adding
    the following at the end of paragraph (1):
        ``(B) Notwithstanding subparagraph (A), in any fiscal year, the
    Secretary of Agriculture and the Secretary of the Interior may withhold
    from the special account established under subparagraph (A) such
    portion of all receipts the fees collected in that fiscal year under
    this section as such Secretary determines to be equal to the additional
    fee collection costs for that fiscal year. The amounts so withheld
    shall be retained by the Secretary of Agriculture or the Secretary of
    the Interior and shall be available, without further appropriation, for
    expenditure by the Secretary concerned in the fiscal year in which
    collected to cover such additional fee collection costs. The Secretary
    concerned shall deposit in the special account established pursuant to
    subparagraph (A) any amounts so retained which remain unexpended and
    unobligated at the end of such fiscal year. For the purposes of this
    subparagraph, for any fiscal year, the term `additional fee collection
    costs' means those costs for personnel and infrastructure directly
    associated with the collection of fees imposed under this section which
    exceed the costs for personnel and infrastructure directly associated
    with the collection of such fees during fiscal year 1993.''.
        (c) Golden Age Passport.--The second sentence of section 4(a)(4) of
    the Land and Water Conservation Fund Act of 1965 (relating to Golden
    Age Passports) is amended to read as follows: ``Such permit shall be
    nontransferable, shall be issued for a charge of $10, and shall entitle
    the permittee and the permittee's spouse accompanying the permittee to
    general admission into any area designated pursuant to this section.''.
        (d) User Fees for Rights-of-Way.--In each fiscal year after the
    enactment of this Act, the Secretary of the Interior shall impose and
    collect an annual fee for the use and occupancy of any right-of-way
    through any national park system unit for which a permit has been
    issued by the Secretary pursuant to any general or specific statutory
    right-of-way authority (whether issued before or after the enactment of
    this Act) or for any other right-of-way allowed as of the date of the
    enactment of this Act. The amount of such annual fee shall be equal to
    the fair market rental value, as determined by the Secretary, of such
    use and occupancy for the fiscal year concerned. The fair market value
    shall be reviewed (and revised if necessary) not less frequently than
    every 3 years. The Secretary shall deposit all fees collected under
    this subsection in the special account established under section 4(i)
    of the Land and Water Conservation Fund Act of 1965.
        (e) Commercial Tour Use Fees.--(1) In the case of each unit of the
    National Park System for which an admission fee is charged under
    section 4 of the Land and Water Conservation Fund Act of 1965 (16
    U.S.C. 460l-4), the Secretary of the Interior shall establish, by
    October 1, 1993, a commercial tour use fee to be imposed on each
    vehicle or aircraft entering the unit (or the airspace of the unit) for
    the purpose of providing commercial tour services within (or within the
    air space of) the unit. Fee revenue derived from such commercial tour
    use fees shall be deposited into the special account established under
    section 4(i) of the Land and Water Conservation Fund Act of 1965.
        (2) The Secretary shall establish the amount of fee to be imposed
    under this subsection per entry. The fee shall not be less than--
                (A) $25 per vehicle or aircraft with a passenger capacity
            of 25 persons or less,
                (B) $50 per vehicle or aircraft with a passenger capacity
            of 26 to 99 persons, and
                (C) $100 per vehicle or aircraft with a passenger capacity
            of 100 to 299 persons.
    The Secretary may periodically increase the fee imposed under this
    subsection as he deems necessary and justifiable.
        (3) The commercial tour use fee imposed under this subsection shall
    not apply to either of the following:
                (A) Any vehicle or aircraft transporting organized school
            groups or outings conducted for educational purposes by schools
            or other bona fide educational institutions.
                (B) Any vehicle or aircraft entering a park system unit
            pursuant to a contract issued under the Act of October 9, 1965
            (16 U.S.C. 20-20g) entitled ``An Act relating to the
            establishment of concession policies in the areas administered
            by the National Park Service and for other purposes''.
        (f) Fair Market Value for Communication Site Fees.--No permit or
    other authorization for the use of any area of the public lands of the
    United States for purposes of commercial telephone transmission
    facilities shall remain in force and effect after January 1, 1994
    unless, before that date, and before January 1 of each year thereafter,
    the holder of such permit or other authorization pays to Secretary of
    the Department having administrative jurisdiction over such lands an
    amount equal to the fair market value, as determined by such Secretary,
    of the right to use and occupy such area for such purposes. For
    purposes of this subsection, the term ``public lands of the United
    States'' means lands owned by the United States and administered by the
    Secretary of the Interior (other than lands held for the benefit of
    Indians, Aleuts, and Eskimos) and lands within the National Forest
    System.

    SEC. 9006. NUCLEAR REGULATORY COMMISSION ANNUAL CHARGES.

        Section 6101(a)(3) of the Omnibus Budget Reconciliation Act of 1990
    (42 U.S.C. 2214(a)(3)) is amended by striking ``September 30, 1995''
    and inserting ``September 30, 1998''.

    SEC. 9007. RECOVERING THE COST FOR GOVERNMENT SERVICES.

        (a) Report.--Not later than January 1, 1994, the Secretary of the
    Interior and the Secretary of Energy shall each submit a report
    identifying fees, penalties, and other charges to the Committee on
    Natural Resources of the House of Representatives and the Committee on
    Energy and Natural Resources of the Senate. Each report shall--
                (1) identify all fees, penalties, and other charges imposed
            by the respective Secretary for the provision of services;
                (2) include the procedures for adjusting such fees to
            recover the cost of providing those services; and
                (3) identify those services for which no fee is currently
            charged and make recommendations for a fee appropriate to cover
            the cost of providing each service.
        (b) Adjustment of Fees.--Except as provided in subsection (d), for
    fiscal year 1995 and each fiscal year thereafter, the Secretary of the
    Interior and the Secretary of Energy shall adjust each fee, penalty,
    and other charge for the provision of services identified pursuant to
    subsection (a)(1). Each such fee, penalty, and charge shall be adjusted
    in accordance with the procedures identified pursuant to subsection
    (a)(2).
        (c) Implementation of Fees for Services Not Covered.--Beginning
    with fiscal year 1995, the Secretary of the Interior and the Secretary
    of Energy shall charge fees for each of the services identified
    pursuant to subsection (a)(3) in an amount sufficient to recover the
    cost of providing the service. For each fiscal year thereafter, the fee
    shall be adjusted in the same manner as adjustments are made pursuant
    to subsection (b), using fiscal year 1995 as the base year.
        (d) Certain Fees, Penalties and Charges Not Covered.--Subsection
    (b) shall not apply to any fee, penalty, or charge the amount of which
    is expressly specified in any statute or contract.

    SEC. 9008. UNFUNDED LIABILITIES OF THE FEDERAL GOVERNMENT.

        Section 1105 of title 31, United States Code, is amended by adding
    the following subsection at the end thereof:
        ``(g) The President shall transmit with materials related to each
    budget an estimate of unfunded future liabilities of the Federal
    Government that are not accounted for in the budget itself. Such
    estimate shall include (but not be limited to) liabilities for future
    remediation of environmental and natural resources damage, and cleaning
    up waste sites, on Federal lands. Sources of liabilities shall include
    (but not be limited to) active, inactive, or abandoned mines or oil or
    gas wells, irrigation waste water impacts, decommissioning of nuclear
    power plants, and uranium mining and processing activities (without
    regard to the location of such mining or processing activities)
    affecting the health of Native Americans and carried out pursuant to a
    program administered by the United States.''.

              TITLE X--COMMITTEE ON POST OFFICE AND CIVIL SERVICE

                           Subtitle A--Civil Service

    SEC. 10001. DELAY IN COST-OF-LIVING ADJUSTMENTS IN FEDERAL EMPLOYEE
                  RETIREMENT BENEFITS DURING FISCAL YEARS 1994, 1995, AND
                  1996.

        (a) Applicability.--This section shall apply with respect to any
    cost-of-living increase scheduled to take effect, during fiscal year
    1994, 1995, or 1996, under--
                (1) section 8340(b) or 8462(b) of title 5, United States
            Code;
                (2) section 826 or 858 of the Foreign Service Act of 1980;
            or
                (3) section 291 of the Central Intelligence Agency
            Retirement Act (50 U.S.C. 2131), as set forth in section 802 of
            the CIARDS Technical Corrections Act of 1992 (Public Law 102-
            496; 106 Stat. 3196).
        (b) Delay in Effective Date of Adjustments.--A cost-of-living
    increase described in subsection (a) shall not take effect until the
    first day of the third calendar month after the date such increase
    would otherwise take effect.
        (c) Rule of Construction.--Nothing in this section shall be
    considered to affect any determination relating to eligibility for an
    annuity increase or the amount of the first increase in an annuity
    under section 8340(b) or (c) or section 8462(b) or (c) of title 5,
    United States Code, or comparable provisions of law.

    SEC. 10002. PERMANENT ELIMINATION OF THE ALTERNATIVE-FORM-OF-ANNUITY
                  OPTION EXCEPT FOR INDIVIDUALS WITH A CRITICAL MEDICAL
                  CONDITION.

        (a) Civil Service Retirement System; Federal Employees' Retirement
    System.--Sections 8343a and 8420a of title 5, United States Code, are
    each amended--
                (1) in subsection (a) by striking ``an employee or Member
            may,'' and inserting ``any employee or Member who has a life-
            threatening affliction or other critical medical condition
            may,''; and
                (2) by striking subsection (f).
        (b) Foreign Service Retirement and Disability System.--Section
    807(e)(1) of the Foreign Service Act of 1980 (22 U.S.C. 4047(e)(1)) is
    amended by striking ``a participant may,'' and inserting ``any
    participant who has a life-threatening affliction or other critical
    medical condition may,''.
        (c) Central Intelligence Agency Retirement and Disability System.--
    Section 294(a) of the Central Intelligence Agency Retirement Act (50
    U.S.C. 2143(a)), as set forth in section 802 of the CIARDS Technical
    Corrections Act of 1992 (Public Law 102-496; 106 Stat. 3196), is
    amended by striking ``a participant may,'' and inserting ``any
    participant who has a life-threatening affliction or other critical
    medical condition may,''.
        (d) Effective Date.--The amendments made by this section shall
    become effective on January 1, 1994, and shall apply with respect to
    any annuity commencing on or after that date.

    SEC. 10003. PAY LIMITATIONS.

        (a) Elimination of the 1994 Annual Pay Adjustment.--
                (1) Statutory pay systems.--Notwithstanding section 633 of
            the Treasury, Postal Service and General Government
            Appropriations Act, 1991 (5 U.S.C. 5303 note) or any other
            provision of law, the adjustment in rates of basic pay that is
            scheduled to take effect in 1994 under section 5303 of title 5,
            United States Code, shall not take effect.
                (2) Other pay systems.--
                        (A) In general.--Notwithstanding any other
                    provision of law, any general pay adjustment, similar
                    to the adjustment referred to in paragraph (1), which
                    is scheduled to take effect in 1994 with respect to any
                    civilian officers or employees in the executive branch
                    (other than those affected by paragraph (1)) shall not
                    take effect.
                        (B) Exceptions.--Subparagraph (A) shall not apply
                    with respect to--
                                (i) any pay adjustment required under the
                            terms of a contract, as in effect before the
                            date of the enactment of this Act; or
                                (ii) any alien or noncitizen of the United
                            States who occupies a position outside the
                            United States.
                        (C) Regulations.--The Office of Personnel
                    Management may prescribe any regulations it considers
                    necessary for the administration of this paragraph.
        (b) Modification in Formula for Computing Annual Pay Adjustments
    for 1995, 1996, and 1997.--
                (1) Statutory pay systems.--Section 5303(a) of title 5,
            United States Code, is amended--
                        (A) by striking ``(a)'' and inserting ``(a)(1)'';
                    and
                        (B) by adding at the end the following:
        ``(2) Notwithstanding section 633 of the Treasury, Postal Service
    and General Government Appropriations Act, 1991 or any other provision
    of law, for purposes of any adjustment scheduled to take effect under
    this section in 1995, 1996, or 1997, paragraph (1) shall be deemed to
    be amended by striking `equal to' through `less than' and inserting
    `equal to one and one-half percentage points less than'.''.
                (2) Other pay systems.--Section 704(a)(1) of the Ethics
            Reform Act of 1989 (5 U.S.C. 5318 note) is amended by adding at
            the end the following:
                        ``(C) Special rule.--For purposes of any pay
                    adjustment scheduled to take effect in 1995, 1996, or
                    1997, subparagraph (B) shall be deemed to be amended by
                    striking `one-half of 1 percent' and inserting `one and
                    one-half percent'.''.

    SEC. 10004. PROVISIONS RELATING TO LOCALITY-BASED COMPARABILITY
                  PAYMENTS.

        (a) Locality-Based Comparability Payments.--
                (1) Change in effective date of payments.--Section
            5304(d)(2) of title 5, United States Code, is amended by
            striking ``January 1'' and inserting ``July 1''.
                (2) Limitation relating to aggregate amount payable during
            certain periods.--Section 5304 of title 5, United States Code,
            is amended--
                        (A) by redesignating subsection (i) as subsection
                    (j); and
                        (B) by inserting after subsection (h) the
                    following:
        ``(i)(1) Notwithstanding any other provision of this section,
    comparability payments may not be established or adjusted under this
    section in a manner that would cause the resulting estimated total
    amount payable under this section during the period which--
                ``(A) begins on July 1, 1994, and ends on June 30, 1995, to
            exceed $1,800,000,000;
                ``(B) begins on July 1, 1995, and ends on June 30, 1996, to
            exceed $2,500,000,000;
                ``(C) begins on July 1, 1996, and ends on June 30, 1997, to
            exceed $3,300,000,000;
                ``(D) begins on July 1, 1997, and ends on June 30, 1998, to
            exceed $4,200,000,000; or
                ``(E) begins on July 1, 1998, and ends on September 30,
            1998, to exceed $1,747,000,000.
        ``(2) If necessary in order to achieve compliance with any of the
    respective limitations under paragraph (1), the President may, in
    carrying out subsection (d)(2), specify levels of comparability
    payments less than the minimum which would otherwise be required under
    subsection (a)(3).
        ``(3) The pay agent shall develop and include in the appropriate
    reports under subsection (d)(1) the methodology for making any
    estimates under this subsection, and any such estimate shall be made in
    accordance with the methodology so included in the then most recent
    report.
        ``(4) Whenever any authority under this subsection is exercised,
    the President shall so indicate in his next report under subsection
    (d)(3), including specific information as to how such authority was
    exercised and the reasons why it was so exercised.''.
        (b) Temporary Change in Effective Date of Annual Pay Adjustments
    Under Section 5303 of Title 5, United States Code.--Section 5303(a) of
    title 5, United States Code (as amended by section 10003(b)(1)), is
    further amended by adding after paragraph (2) of such section 5303(a)
    (as so amended) the following:
        ``(3) Effective for the period beginning on January 1, 1995, and
    ending on December 31, 2003, paragraph (1) shall be deemed to be
    amended by striking `January 1' and inserting `July 1'.''.
        (c) Repeal of the Provision Excluding Senior Executives From the
    Limitation Generally Applicable on the Accumulation of Annual Leave.--
                (1) In general.--Section 6304(f) of title 5, United States
            Code, is repealed, effective as of January 1, 1994.
                (2) Savings provision.--
                        (A) Applicability.--This paragraph shall apply with
                    respect to an individual--
                                (i) who, as of December 31, 1993, has more
                            than 30 days of annual leave to such
                            individual's credit (or more than 45 days, if
                            the individual would be subject to section
                            6304(b) of such title) which were accrued in
                            any position described in section 6304(f) of
                            title 5, United States Code (as in effect on
                            the date of the enactment of this Act); and
                                (ii) only for so long as such individual
                            remains continuously employed in any such
                            position (disregarding any break in service of
                            3 days or less).
                        (B) Statement of the rule.--For purposes of
                    administering section 6304 of title 5, United States
                    Code, with respect to any individual to whom this
                    paragraph applies--
                                (i) subsection (a) of such section shall be
                            deemed amended by striking ``30'' and inserting
                            the number corresponding to the number of days
                            determined for such individual under
                            subparagraph (A)(i); and
                                (ii) subsection (b) of such section shall
                            be deemed amended by striking ``45'' and
                            inserting the number corresponding to the
                            number of days determined for such individual
                            under subparagraph (A)(i).
                (3) Conforming amendment.--Section 6304(a) of title 5,
            United States Code, is amended by striking ``(d), (e), (f), and
            (g)'' and inserting ``(d) and (e)''.
        (d) No Cash Awards Between Fiscal Years 1994 Through 1998.--
                (1) Definition.--For the purpose of this subsection, the
            term ``cash award'' means any cash award, performance award,
            rank, or other form of recognition entitling the recipient to
            any monetary payment under subchapter I of chapter 45 of title
            5, United States Code, or section 5384, 5406, or 5407 of such
            title.
                (2) Restriction.--Notwithstanding any other provision of
            law, no cash award may be awarded during the period beginning
            on October 1, 1993, and ending on September 30, 1998.
        (e) Reduction of Federal Workforce by 150,000.--
                (1) Definition.--For the purpose of this subsection, the
            term ``civilian employees in the executive branch'' means all
            civilian employees within the executive branch of the
            Government (other than in the United States Postal Service or
            the Postal Rate Commission).
                (2) Limitations.--The average total number of civilian
            employees in the executive branch may not exceed--
                        (A) 2,095,200 in fiscal year 1994;
                        (B) 2,044,100 in fiscal year 1995;
                        (C) 2,010,100 in fiscal year 1996;
                        (D) 1,998,500 in fiscal year 1997; or
                        (E) 1,996,700 in fiscal year 1998.
                (3) Averaging.--The average total number of civilian
            employees in the executive branch in a fiscal year shall, for
            purposes of this subsection, be the average number in such
            fiscal year, as determined under regulations prescribed under
            paragraph (5). Any such average shall be determined on a
            ``full-time equivalent'' basis.
                (4) Voluntary measures.--To the extent practicable, any
            reductions necessary to achieve compliance with any limitation
            under paragraph (2) shall be effected through attrition or
            other voluntary measures.
                (5) Regulations.--The President shall prescribe regulations
            to carry out this subsection.
        (f) Pay-Limitation Provisions Made Applicable to Certain Employees
    in the Judicial Branch.--The Director of the Administrative Office of
    the United States Courts shall take such measures as may be necessary
    to ensure that the purposes of subsections (a) and (b) of section 10003
    and subsections (a)(1) (if applicable) and (b) of this section are
    carried out with respect to employees who are subject to the personnel
    management system established by the Director under section 3 of Public
    Law 101-474 (28 U.S.C. 602 note).

    SEC. 10005. APPLICATION OF MEDICARE PART B LIMITS TO PHYSICIANS'
                  SERVICES FURNISHED TO FEDERAL EMPLOYEE HEALTH BENEFITS
                  ENROLLEES AGE 65 OR OLDER.

        (a) In General.--Section 8904(b) of title 5, United States Code, is
    amended--
                (1) in paragraph (1) by inserting ``(A)'' after ``(b)(1)''
            and by adding at the end the following:
        ``(B)(i) A plan, other than a prepayment plan described in section
    8903(4), may not provide benefits, in the case of any retired enrolled
    individual who is age 65 or older and is not entitled to Medicare
    supplementary medical insurance benefits under part B of title XVIII of
    the Social Security Act (42 U.S.C. 1395j et seq.), to pay a charge
    imposed for physicians' services (as defined in section 1848(j) of such
    Act, 42 U.S.C. 1395w-4(j)) which are covered for purposes of benefit
    payments under this chapter and under such part, to the extent that
    such charge exceeds the fee schedule amount under section 1848(a) of
    such Act (42 U.S.C. 1395w-4(a)).
        ``(ii) Physicians and suppliers who have in force participation
    agreements with the Secretary of Health and Human Services consistent
    with section 1842(h)(1) of such Act (42 U.S.C. 1395u(h)(1)), whereby
    the participating provider accepts Medicare benefits (including
    allowable deductible and coinsurance amounts) as full payment for
    covered items and services shall accept equivalent benefit and enrollee
    cost-sharing under this chapter as full payment for services described
    in clause (i). Physicians and suppliers who are nonparticipating
    physicians and suppliers for purposes of part B of title XVIII of such
    Act shall not impose charges that exceed the limiting charge under
    section 1848(g) of such Act (42 U.S.C. 1395w-4(g)) with respect to
    services described in clause (i) provided to enrollees described in
    such clause. The Office of Personnel Management shall notify a
    physician or supplier who is found to have violated this clause and
    inform them of the requirements of this clause and sanctions for such a
    violation. The Office of Personnel Management shall notify the
    Secretary of Health and Human Services if a physician or supplier is
    found to knowingly and willfully violate this clause on a repeated
    basis and the Secretary of Health and Human Services may invoke
    appropriate sanctions in accordance with sections 1128A(a) and section
    1848(g)(1) of such Act (42 U.S.C. 1320a-7a(a), 1395w-4(g)(1)) and
    applicable regulations.
        ``(C) If the Secretary of Health and Human Services determines that
    a violation of this subsection warrants excluding a provider from
    participation for a specified period under title XVIII of the Social
    Security Act, the Office shall enforce a corresponding exclusion of
    such provider for purposes of this chapter.'';
                (2) in paragraph (3)(B)--
                        (A) by inserting ``(i)'' after ``includes''; and
                        (B) by inserting before the period at the end the
                    following: ``, and (ii) the fee schedule amounts and
                    limiting charges for physicians' services established
                    under section 1848 of such Act (42 U.S.C. 1395w-4) and
                    the identity of participating physicians and suppliers
                    who have in force agreements with such Secretary under
                    section 1842(h) of such Act (42 U.S.C. 1395u(h))''; and
                (3) by adding at the end the following:
        ``(4) The Director of the Office of Personnel Management shall
    certify, before the first day of the fifth month that begins before
    each contract year, that there is in effect an arrangement with the
    Secretary of Health and Human Services under which, before the
    beginning of the contract year--
                ``(A) physicians and suppliers (whether or not
            participating) under the Medicare program will be notified of
            the requirements of paragraph (1)(B);
                ``(B) enforcement procedures will be in place to carry out
            such paragraph (including enforcement of protections against
            overcharging of beneficiaries); and
                ``(C) Medicare program information described in paragraph
            (3)(B)(ii) will be supplied to carriers under paragraph
            (3)(A).''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply with respect to contract years beginning on or after January 1,
    1995.

    SEC. 10006. TEMPORARY EXTENSION OF METHOD FOR DETERMINING GOVERNMENT
                  CONTRIBUTIONS UNDER FEHBP IN THE ABSENCE OF A GOVERNMENT-
                  WIDE INDEMNITY BENEFIT PLAN.

        (a) In General.--Public Law 101-76 (5 U.S.C. 8906 note) is amended
    in subsection (a)(1) by striking ``1993'' and inserting ``1998''.
        (b) Sense of Congress.--It is the sense of the Congress that
    nothing in this section should be considered to reflect any view on the
    appropriateness, merits, or timing, or any other aspect of any
    comprehensive health care reform legislation.

                           Subtitle B--Postal Service

    SEC. 10101. PAYMENTS TO BE MADE BY THE UNITED STATES POSTAL SERVICE.

        (a) Relating to Corrected Calculations for Past Retirement COLAs.--
    In addition to any other payments required under section 8348(m) of
    title 5, United States Code, or any other provision of law, the United
    States Postal Service shall pay into the Civil Service Retirement and
    Disability Fund a total of $693,000,000, of which--
                (1) at least one-third shall be paid not later than
            September 30, 1995;
                (2) at least two-thirds shall be paid not later than
            September 30, 1996; and
                (3) any remaining balance shall be paid not later than
            September 30, 1997.
        (b) Relating to Corrected Calculations for Past Health Benefits.--
    In addition to any other payments required under section 8906(g)(2) of
    title 5, United States Code, or any other provision of law, the United
    States Postal Service shall pay into the Employees Health Benefits Fund
    a total of $348,000,000, of which--
                (1) at least one-third shall be paid not later than
            September 30, 1995;
                (2) at least two-thirds shall be paid not later than
            September 30, 1996; and
                (3) any remaining balance shall be paid not later than
            September 30, 1997.

                       Subtitle C--Revenue Forgone Reform

    SEC. 10201. SHORT TITLE; TABLE OF CONTENTS.

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

    Sec. 10201. Short title; table of contents.
    Sec. 10202. References.
    Sec. 10203. Repeal of authorization of appropriations for mail sent at
                                reduced rates of postage.
    Sec. 10204. Establishing reduced rates of postage.
    Sec. 10205. Eligibility of certain mailings for reduced rates of
                                postage.
    Sec. 10206. Provisions relating to rates for books and certain other
                                materials.
    Sec. 10207. Sense of Congress.
    Sec. 10208. Technical corrections.

    SEC. 10202. REFERENCES.

        Except as otherwise expressly provided, whenever in this subtitle
    an amendment or repeal is expressed in terms of an amendment to, or a
    repeal of, a section or other provision, the reference shall be
    considered to be made to a section or other provision of title 39,
    United States Code.

    SEC. 10203. REPEAL OF AUTHORIZATION OF APPROPRIATIONS FOR MAIL SENT AT
                  REDUCED RATES OF POSTAGE.

        (a) In General.--Section 2401(c) is amended--
                (1) in the first sentence--
                        (A) by striking ``if sections'' through ``had not
                    been enacted'' and inserting ``if sections 3217 and
                    3403-3406 had not been enacted''; and
                        (B) by striking ``such sections and Acts.'' and
                    inserting ``such sections.''; and
                (2) in the second sentence--
                        (A) by striking ``(i)''; and
                        (B) by striking ``volume;'' through ``schedules.''
                    and inserting ``volume.''.
        (b) Applicability.--The amendments made by subsection (a) shall
    apply with respect to appropriations for fiscal years beginning after
    September 30, 1993.

    SEC. 10204. ESTABLISHING REDUCED RATES OF POSTAGE.

        (a) Rates.--
                (1) In general.--Section 3626(a) is amended to read as
            follows:
        ``(a)(1) For the purpose of this subsection--
                ``(A) the term `costs attributable', as used with respect
            to a class of mail or kind of mailer, means the direct and
            indirect postal costs attributable to such class of mail or
            kind of mailer (excluding any other costs of the Postal
            Service);
                ``(B) the term `regular-rate category' means any class of
            mail or kind of mailer, other than a class or kind referred to
            in paragraph (2)(A) or section 2401(c); and
                ``(C) the term `institutional-costs contribution', as used
            with respect to a class of mail or kind of mailer, means that
            portion of the estimated revenues to the Postal Service from
            such class of mail or kind of mailer which remains after
            subtracting an amount equal to the estimated costs attributable
            to such class of mail or kind of mailer.
        ``(2)(A) Except as provided in paragraph (3) or (4), rates of
    postage for a class of mail or kind of mailer under former section
    4358, 4452(b), 4452(c), 4554(b), or 4554(c) of this title shall be
    established in a manner such that the estimated revenues to be received
    by the Postal Service from such class of mail or kind of mailer shall
    be equal to the sum of--
                ``(i) the estimated costs attributable to such class of
            mail or kind of mailer; and
                ``(ii) the product derived by multiplying the estimated
            costs referred to in clause (i) by the applicable percentage
            under subparagraph (B).
        ``(B) The applicable percentage for any class of mail or kind of
    mailer referred to in subparagraph (A) shall be the product derived by
    multiplying--
                ``(i) the percentage which, for the most closely
            corresponding regular-rate category, the institutional-costs
            contribution for such category represents relative to the
            estimated costs attributable to such category of mail, times
                ``(ii)(I) one-twelfth, for fiscal year 1994;
                ``(II) one-sixth, for fiscal year 1995;
                ``(III) one-fourth, for fiscal year 1996;
                ``(IV) one-third, for fiscal year 1997;
                ``(V) five-twelfths, for fiscal year 1998; and
                ``(VI) one-half, for any fiscal year after fiscal year
            1998.
        ``(C) For temporary special authority to permit the timely
    implementation of the preceding provisions of this paragraph, see
    section 3642.
        ``(D) For purposes of establishing rates of postage under this
    subchapter for any of the classes of mail or kinds of mailers referred
    to in subparagraph (A), subclauses (I) through (V) of subparagraph
    (B)(ii) shall be deemed amended by striking the fraction specified in
    each such subclause and inserting `one-half'.
        ``(3) The rates for the advertising portion of any mail matter
    under former section 4358(d) or 4358(e) of this title shall be equal to
    the rates for the advertising portion of the most closely corresponding
    regular-rate category of mail, except that if the advertising portion
    does not exceed 10 percent of the issue of the publication involved,
    the advertising portion shall be subject to the same rates as apply to
    the nonadvertising portion.
        ``(4) The rates for any advertising under former section 4358(f) of
    this title shall be equal to 75 percent of the rates for advertising
    contained in the most closely corresponding regular-rate category of
    mail.''.
                (2) Special authority.--Subchapter III of chapter 36 is
            amended by adding at the end the following:
    ``Sec. 3642. Special authority relating to reduced-rate categories of
                  mail
        ``(a) In order to permit the timely implementation of section
    3626(a)(2), the Postal Service may establish temporary rates of postage
    for any class of mail or kind of mailer referred to in section
    3626(a)(2)(A).
        ``(b) Any exercise of authority under this section shall be in
    conformance with the requirements of section 3626(a), subject to the
    following:
                ``(1) All `attributable costs' and `institutional-costs
            contributions' assumed shall be the same as those which were
            assumed for purposes of the then most recent proceedings under
            subchapter II pursuant to which rates of postage for the class
            of mail or kind of mailer involved were last adjusted.
                ``(2) Any temporary rate established under this section
            shall take effect upon such date as the Postal Service may
            determine, except that--
                        ``(A) such a rate may take effect only after 10
                    days' notice in the Federal Register; and
                        ``(B) no such rate may take effect after September
                    30, 1998.
                ``(3) A temporary rate under this section may remain in
            effect no longer than the last day of the fiscal year in which
            it first takes effect.
                ``(4) Authority under this section may not be exercised in
            a manner that would result in more than 1 change taking effect
            under this section, during the same fiscal year, in the rates
            of postage for a particular class of mail or kind of mailer,
            except as provided in paragraph (5).
                ``(5) Nothing in paragraph (4) shall prevent an adjustment
            under this section in rates for a class of mail or kind of
            mailer with respect to which any rates took effect under this
            section earlier in the same fiscal year if--
                        ``(A) the rates established for such class of mail
                    or kind of mailer by the earlier adjustment are
                    superseded by new rates established under subchapter
                    II; and
                        ``(B) authority under this paragraph has not
                    previously been exercised with respect to such class of
                    mail or kind of mailer based on the new rates referred
                    to in subparagraph (A).
        ``(c) The Postal Service may prescribe any regulations which may be
    necessary to carry out this section, including provisions governing the
    coordination of adjustments under this section with any other
    adjustments under this title.''.
                (3) Technical and conforming amendments.--
                        (A) Section 3626.--Section 3626(i) is repealed.
                        (B) Section 3627.--
                                (i) In general.--Section 3627 is amended--
                                        (I) by striking ``sent at a free or
                                    reduced rate under section 3217, 3403-
                                    3406, or 3626 of this title,'' and
                                    inserting ``sent free of postage under
                                    section 3217 or 3403-3406''; and
                                        (II) in the section heading by
                                    striking ``and reduced''.
                                (ii) Table of contents.--The table of
                            contents for chapter 36 is amended--
                                        (I) by striking the item relating
                                    to section 3627 and inserting the
                                    following:

    ``3627. Adjusting free rates.'';
                                    and
                                        (II) by inserting after the item
                                    relating to section 3641 the following:

    ``3642. Special authority relating to reduced-rate categories of
                                mail.''.
        (b) Authorization.--
                (1) In general.--Section 2401 is amended--
                        (A) by striking subsections (d) through (f);
                        (B) by redesignating subsections (g) through (i) as
                    subsections (e) through (g), respectively;
                        (C) in subsection (f) (as so redesignated by
                    subparagraph (B)) by striking the second sentence;
                        (D) in subsection (g) (as so redesignated by
                    subparagraph (B)) by striking ``subsections (b) and (d)
                    of this section'' and inserting ``subsection (b)''; and
                        (E) by inserting after subsection (c) the
                    following:
        ``(d) As reimbursement to the Postal Service for losses which it
    incurred as a result of insufficient amounts appropriated under section
    2401(c) for fiscal years 1991 through 1993, and to compensate for the
    additional revenues it is estimated the Postal Service would have
    received under the provisions of section 3626(a), for the period
    beginning on October 1, 1993, and ending on September 30, 1998, if the
    fraction specified in subclause (VI) of section 3626(a)(2)(B)(ii) were
    applied with respect to such period (instead of the respective
    fractions specified in subclauses (I) through (V) thereof), there are
    authorized to be appropriated to the Postal Service $29,000,000 for
    each of fiscal years 1994 through 2035.''.
                (2) Ratemaking limitations.--
                        (A) In general.--Except as provided in subparagraph
                    (B), rates of postage may not be established, under
                    subchapter II of chapter 36 of title 39, United States
                    Code, in a manner designed to allow the United States
                    Postal Service to receive through revenues any portion
                    of the additional revenues (referred to in section
                    2401(d) of such title, as amended by paragraph (1)(E))
                    for which amounts are authorized to be appropriated
                    under such section 2401(d).
                        (B) Exception.--If Congress fails to appropriate an
                    amount authorized under section 2401(d) of title 39,
                    United States Code (as amended by paragraph (1)(E)),
                    rates for the various classes of mail may be adjusted
                    in accordance with the provisions of subchapter II of
                    chapter 36 of such title (excluding section 3627
                    thereof) such that the resulting increase in revenues
                    will equal the amount that Congress so failed to
                    appropriate.
        (c) Applicability.--
                (1) Rates.--The amendments made by subsection (a) shall
            apply with respect to rates for mail sent after September 30,
            1993.
                (2) Authorization.--The amendments made by subsection (b)
            shall apply with respect to appropriations for fiscal years
            beginning after September 30, 1993.

    SEC. 10205. ELIGIBILITY OF CERTAIN MAILINGS FOR REDUCED RATES OF
                  POSTAGE.

        (a) Advertising.--Section 3626(j)(1) is amended--
                (1) in subparagraph (B) by striking ``or'' after the
            semicolon;
                (2) in subparagraph (C) by striking the period and
            inserting ``; or''; and
                (3) by adding at the end the following:
                ``(D) any product or service (other than any to which
            subparagraph (A), (B), or (C) relates), if--
                        ``(i) the sale of such product or the providing of
                    such service is not substantially related (aside from
                    the need, on the part of the organization promoting
                    such product or service, for income or funds or the use
                    it makes of the profits derived) to the exercise or
                    performance by the organization of one or more of the
                    purposes constituting the basis for the organization's
                    authorization to mail at such rates; or
                        ``(ii) the mail matter involved is part of a
                    cooperative mailing (as defined under regulations of
                    the Postal Service) with any person or organization not
                    authorized to mail at the rates for mail under former
                    section 4452(b) or 4452(c) of this title;
            except that--
                        ``(I) any determination under clause (i) that a
                    product or service is not substantially related to a
                    particular purpose shall be made under regulations
                    which shall be prescribed by the Postal Service based
                    on subsections (a) and (c) of section 513 of the
                    Internal Revenue Code of 1986; and
                        ``(II) clause (i) shall not apply if the product
                    involved is a periodical publication described in
                    subsection (m)(2) (including a subscription to receive
                    any such publication).''.
        (b) Products.--Section 3626 is amended by adding at the end the
    following:
        ``(m)(1) In the administration of this section, the rates for mail
    under former section 4452(b) or 4452(c) of this title shall not apply
    to mail consisting of products, unless such products--
                ``(A) were received by the organization as gifts or
            contributions; or
                ``(B) are low cost articles (as defined by section
            513(h)(2) of the Internal Revenue Code of 1986).
        ``(2) Paragraph (1) shall not apply with respect to a periodical
    publication of a qualified nonprofit organization.''.
        (c) Certification; Verification.--Section 3626(j)(3) is amended--
                (1) by striking ``(3)'' and inserting ``(3)(A)''; and
                (2) by adding at the end the following:
        ``(B) The Postal Service shall establish procedures to carry out
    this paragraph, including procedures for mailer certification of
    compliance with the conditions specified in paragraph (1)(D) or
    subsection (m), as applicable, and verification of such compliance.''.
        (d) Applicability.--The amendments made by this section shall apply
    with respect to mail sent, and the rates for mail sent, after September
    30, 1993.

    SEC. 10206. PROVISIONS RELATING TO RATES FOR BOOKS AND CERTAIN OTHER
                  MATERIALS.

        (a) In General.--Section 3683(b) is amended to read as follows:
        ``(b) The rates of postage under former section 4554(b)(1) of this
    title shall not be effective except with respect to mailings which--
                ``(1) constitute materials specified in former section
            4554(b)(2) of this title; and
                ``(2) are sent between--
                        ``(A) an institution, organization, or association
                    listed in subparagraph (A) or (B) of such former
                    section 4554(b)(1) and any other such institution,
                    organization, or association;
                        ``(B) an institution, organization, or association
                    referred to in subparagraph (A) and any individual
                    (other than an individual having a financial interest
                    in the sale, promotion, or distribution of the
                    materials involved); or
                        ``(C) an institution, organization, or association
                    referred to in subparagraph (A) and a qualified
                    nonprofit organization (as defined in former section
                    4452(d) of this title) that is not such an institution,
                    organization, or association.''.
        (b) Applicability.--The amendment made by subsection (a) shall
    apply with respect to mail sent after September 30, 1993.

    SEC. 10207. SENSE OF CONGRESS.

        It is the sense of the Congress that any legislation, enacted after
    September 30, 1994, which would have the effect of expanding the
    classes of mail or kinds of mailers eligible for reduced rates of
    postage should provide for sufficient funding to ensure that neither
    any losses to the United States Postal Service nor any increase in the
    rates of postage for any of the other classes of mail or kinds of
    mailers will result.

    SEC. 10208. TECHNICAL CORRECTIONS.

        (a) Section 410.--Section 410(b) is amended--
                (1) in paragraph (8) by striking ``and'' after the
            semicolon;
                (2) in the first paragraph (9) by striking ``Chapter'' and
            inserting ``chapter'', and by striking the period and inserting
            ``; and''; and
                (3) by designating the second paragraph (9) as paragraph
            (10).
        (b) Section 3202.--Section 3202(a) is amended--
                (1) in paragraph (3) by adding ``and'' after the semicolon;
            and
                (2) in paragraph (4) by striking ``; and'' and inserting a
            period.
        (c) Section 3210.--The provisions of section 318(3) of Public Law
    101-163 (103 Stat. 1068), which amended section 3210 of title 39,
    United States Code, shall be treated as if, as enacted, the reference
    in such provisions to ``subparagraph (c)'' had instead read
    ``subparagraph (C)''.
        (d) Section 3601.--Section 3601(a) is amended by striking
    ``concent'' and inserting ``consent''.
        (e) Section 3625.--Section 3625(d) is amended by striking ``section
    3268'' and inserting ``section 3628''.
        (f) Section 3626.--Section 3626 is amended by redesignating the
    second subsection (k) as subsection (l).

             TITLE XI--COMMITTEE ON PUBLIC WORKS AND TRANSPORTATION

    SEC. 11001. AVIATION FEES FOR SERVICES.

        (a) In General.--Section 313(f) of the Federal Aviation Act of 1958
    (49 U.S.C. App. 1354(f)) is amended to read as follows:
        ``(f) Fees for Services.--
                ``(1) Imposition and collection.--The following fees are
            imposed and shall be collected for services rendered:
                        ``(A) Aircraft registration fees.--
                                ``(i) General rule.--For registration of an
                            aircraft, the fee to be collected from the
                            owner of the aircraft in each fiscal year
                            beginning after September 30, 1993, shall be
                            determined under the following table:

    If the maximum certificated
      gross weight of                                             Amount of
      the aircraft is:                                            fee is:
        Not over 3,500 pounds.........................               $40.00
        Over 3,500 lbs. but not over 6,500 lbs........              $175.00
        Over 6,500 lbs. but not over 10,000 lbs.......              $500.00
        Over 10,000 lbs. but not over 100,000 lbs.....            $1,000.00
        Over 100,000 lbs..............................           $2,000.00.
                    If the ownership of the aircraft is also transferred in
                    such fiscal year, the fee to be collected for
                    registration of the aircraft in such fiscal year under
                    this subparagraph, as determined from the table, shall
                    be increased by such amount as the Administrator shall
                    determine so that the average amount of the increase
                    for all aircraft collected under this sentence in such
                    fiscal year will be approximately $200.00.
                        ``(ii) Exemptions.--No fee shall be collected under
                    this subparagraph for registration of an aircraft in a
                    fiscal year if the aircraft--
                                ``(I) is owned or operated by an air
                            carrier exclusively to provide air
                            transportation;
                                ``(II) is owned by, or operated exclusively
                            by or for, the United States Government;
                                ``(III) is registered under a dealer's
                            aircraft registration certificate issued under
                            section 505 of this Act;
                                ``(IV) is not originally certificated with
                            an engine driven electrical system or has not
                            subsequently been certified by the
                            Administrator with such a system installed; or
                                ``(V) is a balloon or glider.
                        ``(B) Designation as aviation medical examiners.--
                    For designation of a person as an aviation medical
                    examiner, the fee to be collected from such person in
                    each fiscal year beginning after September 30, 1993,
                    shall be $500.
                        ``(C) Issuance of certificates to pilots.--After
                    September 30, 1993, the fee to be collected for
                    issuance or renewal of an airman's certificate to a
                    pilot shall be $12. The fee shall be collected from
                    each pilot at least once every 3 fiscal years.
                ``(2) Continuation of fee for processing of forms for major
            fuel tank alterations.--
                        ``(A) Establishment and collection.--The
                    Administrator may establish such fees as may be
                    necessary to cover the costs associated with processing
                    of forms for major repairs and alterations of fuel
                    tanks and fuel systems of aircraft.
                        ``(B) Maximum amount.--The amount of any fee under
                    this subsection with respect to processing of a form
                    for a major repair or alternation of a fuel tank or
                    fuel system of an aircraft may not exceed $7.50. Such
                    maximum amount shall be adjusted annually by the
                    Administrator for changes in the Consumer Price Index
                    of All Urban Consumers published by the Bureau of Labor
                    Statistics of the Department of Labor.
                ``(3) Collection and deposit in trust fund.--The amounts of
            all fees established by or under this subsection shall be
            collected by the Administrator, or the Secretary of the
            Treasury for the Administrator, and shall be deposited in the
            Airport and Airway Trust Fund.''.
        (b) Conforming Amendment.--The portion of the table of contents
    contained in the first section of such Act relating to section 313 is
    amended by striking

                                  ``(f) Processing fees.''.
    and inserting

                                  ``(f) Fees for services.''.

    SEC. 11002. RECREATIONAL USER FEES.

        (a) In General.--Section 210 of the Flood Control Act of 1968 (16
    U.S.C. 460d-3) is amended--
                (1) by striking ``Sec. 210. No entrance'' and inserting the
            following:

    ``SEC. 210. RECREATIONAL USER FEES.

        ``(a) Prohibition on Admissions Fees.--No entrance'';
                (2) by striking the second sentence; and
                (3) by adding at the end the following new subsection:
        ``(b) Fees for Use of Developed Recreation Sites and Facilities.--
                ``(1) Establishment and collection.--Notwithstanding
            section 4(b) of the Land and Water Conservation Fund Act of
            1965 (16 U.S.C. 460l-6a(b)), the Secretary of the Army is
            authorized, subject to paragraphs (2) and (3), to establish and
            collect fees for the use of developed recreation sites and
            facilities, including campsites, swimming beaches, and boat
            launching ramps.
                ``(2) Exemption of certain facilities.--The Secretary shall
            not establish or collect fees under this subsection for the use
            or provision of drinking water, wayside exhibits, general
            purpose roads, overlook sites, picnic tables, toilet
            facilities, surface water areas, undeveloped or lightly
            developed shoreland, or general visitor information.
                ``(3) Per vehicle limit.--The fee under this subsection for
            use of a site or facility (other than an overnight camping site
            or facility or any other site or facility at which a fee is
            charged for use of the site or facility as of the date of the
            enactment of this paragraph) for persons entering the site or
            facility by private, noncommercial vehicle shall not exceed $3
            per day per vehicle. Such maximum amount may be adjusted
            annually by the Secretary for changes in the Consumer Price
            Index of All Urban Consumers published by the Bureau of Labor
            Statistics of the Department of Labor.
                ``(4) Deposit into treasury account.--All fees collected
            under this subsection shall be deposited into the Treasury
            account for the Corps of Engineers established by section 4(i)
            of the Land and Water Conservation Fund Act of 1965 (16 U.S.C.
            460l-6a(i)).''.
        (b) Conforming Amendment for Campsites.--Section 4(b) of the Land
    and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-6a(b)) is
    amended by striking the next to the last sentence.

                    TITLE XII--COMMITTEE ON VETERANS AFFAIRS

    SEC. 12001. SHORT TITLE.

        This title may be cited as the ``Veterans Reconciliation Act of
    1993''.

    SEC. 12002. EXTENSION OF AUTHORITY TO REQUIRE THAT CERTAIN VETERANS
                  AGREE TO MAKE COPAYMENTS IN EXCHANGE FOR RECEIVING
                  HEALTH-CARE BENEFITS.

        (a) Hospital and Medical Care.--Section 8013(e) of the Omnibus
    Budget Reconciliation Act of 1990 (Public Law 101-508; 38 U.S.C. 1710
    note) is amended--
                (1) by striking out ``September 30, 1992'' in the first
            sentence and inserting in lieu thereof ``September 30, 1998'';
            and
                (2) by striking out the second sentence.
        (b) Outpatient Medications.--Section 1722A(c) of title 38, United
    States Code, is amended--
                (1) by striking out ``September 30, 1992'' in the first
            sentence and inserting in lieu thereof ``September 30, 1998'';
            and
                (2) by striking out the second sentence.

    SEC. 12003. EXTENSION OF AUTHORITY FOR MEDICAL CARE COST RECOVERY.

        (a) In General.--Section 1729(a) of title 38, United States Code,
    is amended--
                (1) in paragraph (1), by striking out ``non-service-
            connected''; and
                (2) in paragraph (2)--
                        (A) by inserting ``disability and, during the
                    period before October 1, 1998, to a service-connected''
                    after ``non-service-connected'' in the matter preceding
                    subparagraph (A); and
                        (B) by striking out ``before August 1, 1994,'' in
                    subparagraph (E) and inserting in lieu thereof ``before
                    October 1, 1998,''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply with respect to care and services furnished under chapter 17 of
    title 38, United States Code, after September 30, 1993.

    SEC. 12004. EXTENSION OF AUTHORITY FOR CERTAIN INCOME VERIFICATION
                  PROVISIONS UNDER THE OMNIBUS BUDGET RECONCILIATION ACT OF
                  1990.

        (a) Authority for Secretary of Veterans Affairs To Obtain
    Information.--Section 5317(g) of title 38, United States Code, is
    amended by striking out ``September 30, 1997'' and inserting in lieu
    thereof ``September 30, 1998''.
        (b) Authority for Secretary of Treasury To Provide Information.--
    Subparagraph (D) of section 6103(l)(7) of the Internal Revenue Code of
    1986 is amended by striking out ``September 30, 1997'' in the last
    sentence and inserting in lieu thereof ``September 30, 1998''.

    SEC. 12005. EXTENSION OF LIMITATION ON PENSION FOR CERTAIN RECIPIENTS
                  OF MEDICAID-COVERED NURSING HOME CARE.

        Section 5503(f)(7) of title 38, United States Code, is amended by
    striking out ``September 30, 1997'' and inserting in lieu thereof
    ``September 30, 1998''.

    SEC. 12006. DENIAL OF FISCAL YEAR 1994 COST-OF-LIVING ADJUSTMENT FOR
                  CERTAIN DIC RECIPIENTS.

        During fiscal year 1994, no increase may be provided in the rates
    of dependency and indemnity compensation in effect under section
    1311(a)(3) of title 38, United States Code.

    SEC. 12007. EXTENSION OF PROCEDURES APPLICABLE TO LIQUIDATION SALES ON
                  DEFAULTED HOME LOANS GUARANTEED BY THE DEPARTMENT OF
                  VETERANS AFFAIRS.

        (a) Inclusion of Losses.--Section 3732(c) of title 38, United
    States Code, is amended--
                (1) in paragraph (1)(C), by striking out ``resale,'' and
            inserting in lieu thereof ``resale (including losses sustained
            on the resale of the property),''; and
                (2) in paragraph (11), by striking out ``December 31,
            1992'' and inserting in lieu thereof ``September 30, 1998''.
        (b) Effective Date.--The amendment made by subsection (a)(1) shall
    apply to all liquidation sales occurring on or after October 1, 1993.

    SEC. 12008. INCREASE IN HOME LOAN FEES.

        Paragraph (6) of section 3729(a) of title 38, United States Code,
    is amended to read as follows:
        ``(6) With respect to a loan closed after September 30, 1993, and
    before October 1, 1998, for which a fee is collected under paragraph
    (1), the amount of such fee, as computed under paragraph (2), shall be
    increased by 0.75 percent of the total loan amount other than in the
    case of a loan described in subparagraph (A), (D)(ii), or (E) of
    paragraph (2).''.

    SEC. 12009. REDUCTION OF FISCAL YEAR 1994 COST-OF-LIVING ADJUSTMENT FOR
                  MONTGOMERY GI BILL BENEFITS.

        (a) Benefits Payable Under Chapter 30.--Section 3015(g)(1) of title
    38, United States Code, is amended by inserting ``less one percentage
    point'' after ``June 30, 1993,''.
        (b) Benefits Payable Under Selected Reserve Program.--Section
    2131(b)(2)(A) of title 10, United States Code, is amended by inserting
    ``less one percentage point'' after ``June 30, 1993,''.
        (c) Technical Amendments.--(1) Section 301(c) of Public Law 102-568
    (106 Stat. 4326) is amended by striking out ``Section 3015(f)'' and
    inserting in lieu thereof ``Section 3015(g) (as redesignated by section
    307(a)(1))''.
        (2) Section 307(a) of such Public Law (106 Stat. 4328) is amended
    by striking out ``(as amended by section 301)''.
        (3) The amendments made by paragraphs (1) and (2) shall apply as if
    included in the enactment of Public Law 102-568.

    SEC. 12010. LIMITATION ON CHILDREN ELIGIBLE FOR SURVIVORS' AND
                  DEPENDENTS' EDUCATIONAL ASSISTANCE.

        (a) Revision in Definition of Children Eligible.--Section
    3501(a)(2) of title 38, United States Code, is amended by inserting ``,
    but does not include an individual who is not the natural or legally
    adopted child of the parent from whom eligibility under this chapter is
    derived'' before the period at the end.
        (b) Effective Date.--The amendment made by subsection (a) does not
    apply with respect to any individual who, before October 1, 1993, files
    an original application for educational assistance under chapter 35 of
    title 38, United States Code.

                TITLE XIII--COMMITTEE ON WAYS AND MEANS--SAVINGS

        Subtitle A--Old-Age, Survivors, and Disability Insurance Program

                         TABLE OF CONTENTS OF SUBTITLE

    Sec. 13001. Explicit requirements for maintenance of telephone access
                                to local offices of the Social Security
                                Administration.
    Sec. 13002. Expansion of State option to exclude service of election
                                officials or election workers from
                                coverage.
    Sec. 13003. Use of social security numbers by States and local
                                governments and Federal district courts for
                                jury selection purposes.
    Sec. 13004. Authorization for all States to extend coverage to State
                                and local policemen and firemen under
                                existing coverage agreements.
    Sec. 13005. Limited exemption for Canadian ministers from certain self-
                                employment tax liability.
    Sec. 13006. Exclusion of totalization benefits from the application of
                                the windfall elimination provision.
    Sec. 13007. Exclusion of military reservists from application of the
                                government pension offset and windfall
                                elimination provisions.
    Sec. 13008. Repeal of the facility-of-payment provision.
    Sec. 13009. Maximum family benefits in guarantee cases.
    Sec. 13010. Authorization for disclosure by the Secretary of Health and
                                Human Services of information for purposes
                                of public or private epidemiological and
                                similar research.
    Sec. 13011. Improvement and clarification of provisions prohibiting
                                misuse of symbols, emblems, or names in
                                reference to social security programs and
                                agencies.
    Sec. 13012. Increased penalties for unauthorized disclosure of social
                                security information.
    Sec. 13013. Simplification of employment taxes on domestic services.
    Sec. 13014. Increase in authorized period for extension of time to file
                                annual earnings report.
    Sec. 13015. Allocations to Federal Disability Insurance Trust Fund.
    Sec. 13016. Extension of disability insurance program demonstration
                                project authority.
    Sec. 13017. Technical and clerical amendments.
    Sec. 13018. Cross-matching of social security account number
                                information and employer identification
                                number information maintained by the
                                Department of Agriculture.
    Sec. 13019. Prohibition of misuse of Department of the Treasury names,
                                symbols, etc.
    Sec. 13020. Availability and use of death information under the old-
                                age, survivors, and disability insurance
                                program.

    SEC. 13001. EXPLICIT REQUIREMENTS FOR MAINTENANCE OF TELEPHONE ACCESS
                  TO LOCAL OFFICES OF THE SOCIAL SECURITY ADMINISTRATION.

        (a) Maintenance of Service to Local Offices.--
                (1) In general.--Section 5110(a) of the Omnibus Budget
            Reconciliation Act of 1990 (104 Stat. 1388-272) is amended by
            adding at the end the following new sentence: ``In carrying out
            the requirements of the preceding sentence, the Secretary shall
            reestablish and maintain in service at least the same number of
            telephone lines to each such local office as was in place as of
            such date, including telephone sets for connections to such
            lines.''.
                (2) Effective date.--The Secretary of Health and Human
            Services shall ensure that the requirements of the amendment
            made by paragraph (1) are carried out no later than 90 days
            after the date of the enactment of this Act.
                (3) GAO report.--The Comptroller General of the United
            States shall make an independent determination of the number of
            telephone lines to each local office of the Social Security
            Administration which are in place as of 90 days after the
            enactment of this Act and shall report his findings to the
            Committee on Ways and Means of the House of Representatives and
            the Committee on Finance of the Senate no later than 150 days
            after the date of the enactment of this Act.
        (b) Maintenance of Toll-Free Telephone Number Service.--The
    Secretary of Health and Human Services shall ensure that toll-free
    telephone service provided by the Social Security Administration is
    maintained at a level which is at least equal to that in effect on the
    date of the enactment of this Act.

    SEC. 13002. EXPANSION OF STATE OPTION TO EXCLUDE SERVICE OF ELECTION
                  OFFICIALS OR ELECTION WORKERS FROM COVERAGE.

        (a) Limitation on Mandatory Coverage of State Election Officials
    and Election Workers Without State Retirement System.--
                (1) Amendment to social security act.--Section
            210(a)(7)(F)(iv) of the Social Security Act (42 U.S.C.
            410(a)(7)(F)(iv)) (as amended by section 11332(a) of the
            Omnibus Budget Reconciliation Act of 1990) is amended by
            striking ``$100'' and inserting ``$1,000 with respect to
            service performed during 1994, and the adjusted amount
            determined under section 218(c)(8)(B) for any subsequent year
            with respect to service performed during such subsequent
            year''.
                (2) Amendment to fica.--Section 3121(b)(7)(F)(iv) of the
            Internal Revenue Code of 1986 (as amended by section 11332(b)
            of the Omnibus Budget Reconciliation Act of 1990) is amended by
            striking ``$100'' and inserting ``$1,000 with respect to
            service performed during 1994, and the adjusted amount
            determined under section 218(c)(8)(B) of the Social Security
            Act for any subsequent year with respect to service performed
            during such subsequent year''.
        (b) Conforming Amendments Relating to Medicare Qualified Government
    Employment.--
                (1) Amendment to social security act.--Section 210(p)(2)(E)
            of the Social Security Act (42 U.S.C. 410(p)(2)(E)) is amended
            by striking ``$100'' and inserting ``$1,000 with respect to
            service performed during 1994, and the adjusted amount
            determined under section 218(c)(8)(B) for any subsequent year
            with respect to service performed during such subsequent
            year''.
                (2) Amendment to fica.--Section 3121(u)(2)(B)(ii)(V) of the
            Internal Revenue Code of 1986 is amended by striking ``$100''
            and inserting ``$1,000 with respect to service performed during
            1994, and the adjusted amount determined under section
            218(c)(8)(B) of the Social Security Act for any subsequent year
            with respect to service performed during such subsequent
            year''.
        (c) Authority for States To Modify Coverage Agreements With Respect
    to Election Officials and Election Workers.--Section 218(c)(8) of the
    Social Security Act (42 U.S.C. 418(c)(8)) is amended--
                (1) by striking ``on or after January 1, 1968,'' and
            inserting ``at any time'';
                (2) by striking ``$100'' and inserting ``$1,000 with
            respect to service performed during 1994, and the adjusted
            amount determined under subparagraph (B) for any subsequent
            year with respect to service performed during such subsequent
            year''; and
                (3) by striking the last sentence and inserting the
            following new sentence: ``Any modification of an agreement
            pursuant to this paragraph shall be effective with respect to
            services performed in and after the calendar year in which the
            modification is mailed or delivered by other means to the
            Secretary.''.
        (d) Indexation of Exempt Amount.--Section 218(c)(8) of such Act (as
    amended by subsection (c)) is further amended--
                (1) by inserting ``(A)'' after ``(8)''; and
                (2) by adding at the end the following new subparagraph:
        ``(B) For each year after 1994, the Secretary shall adjust the
    amount referred to in subparagraph (A) at the same time and in the same
    manner as is provided under section 215(a)(1)(B)(ii) with respect to
    the amounts referred to in section 215(a)(1)(B)(i), except that--
                ``(i) for purposes of this subparagraph, 1992 shall be
            substituted for the calendar year referred to in section
            215(a)(1)(B)(ii)(II), and
                ``(ii) such amount as so adjusted, if not a multiple of
            $100, shall be rounded to the next higher multiple of $100
            where such amount is a multiple of $50 and to the nearest
            multiple of $100 in any other case.
    The Secretary shall determine and publish in the Federal Register each
    adjusted amount determined under this subparagraph not later than
    November 1 preceding the year for which the adjustment is made.''.
        (e) Effective Date.--The amendments made by subsections (a), (b),
    and (c) shall apply with respect to service performed on or after
    January 1, 1994.

    SEC. 13003. USE OF SOCIAL SECURITY NUMBERS BY STATES AND LOCAL
                  GOVERNMENTS AND FEDERAL DISTRICT COURTS FOR JURY
                  SELECTION PURPOSES.

        (a) In General.--Section 205(c)(2) of the Social Security Act (42
    U.S.C. 405(c)(2)) is amended--
                (1) in subparagraph (B)(i), by striking ``(E)'' in the
            matter preceding subclause (I) and inserting ``(F)'';
                (2) by redesignating subparagraphs (E) and (F) as
            subparagraphs (F) and (G), respectively; and
                (3) by inserting after subparagraph (D) the following:
        ``(E)(i) It is the policy of the United States that--
                ``(I) any State (or any political subdivision of a State)
            may utilize the social security account numbers issued by the
            Secretary for the additional purposes described in clause (ii)
            if such numbers have been collected and are otherwise utilized
            by such State (or political subdivision) in accordance with
            applicable law, and
                ``(II) any district court of the United States may use, for
            such additional purposes, any such social security account
            numbers which have been so collected and are so utilized by any
            State.
        ``(ii) The additional purposes described in this clause are the
    following:
                ``(I) identifying duplicate names of individuals on master
            lists used for jury selection purposes, and
                ``(II) identifying on such master lists those individuals
            who are ineligible to serve on a jury by reason of their
            conviction of a felony.
        ``(iii) To the extent that any provision of Federal law enacted
    before the date of the enactment of this subparagraph is inconsistent
    with the policy set forth in clause (i), such provision shall, on and
    after that date, be null, void, and of no effect.
        ``(iv) For purposes of this subparagraph, the term `State' has the
    meaning such term has in subparagraph (D).''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    take effect on the date of the enactment of this Act.

    SEC. 13004. AUTHORIZATION FOR ALL STATES TO EXTEND COVERAGE TO STATE
                  AND LOCAL POLICEMEN AND FIREMEN UNDER EXISTING COVERAGE
                  AGREEMENTS.

        (a) In General.--Section 218(l) of the Social Security Act (42
    U.S.C. 418(l)) is amended--
                (1) in paragraph (1), by striking ``(1)'' after ``(l)'',
            and by striking ``the State of'' and all that follows through
            ``prior to the date of enactment of this subsection'' and
            inserting ``a State entered into pursuant to this section'';
            and
                (2) by striking paragraph (2).
        (b) Conforming Amendment.--Section 218(d)(8)(D) of such Act (42
    U.S.C. 418(d)(8)(D)) is amended by striking ``agreements with the
    States named in'' and inserting ``State agreements modified as provided
    in''.
        (c) Effective Date.--The amendments made by this section shall
    apply with respect to modifications filed by States after the date of
    the enactment of this Act.

    SEC. 13005. LIMITED EXEMPTION FOR CANADIAN MINISTERS FROM CERTAIN SELF-
                  EMPLOYMENT TAX LIABILITY.

        (a) In General.--Notwithstanding any other provision of law, if--
                (1) an individual performed services described in section
            1402(c)(4) of the Internal Revenue Code of 1986 which are
            subject to tax under section 1401 of such Code,
                (2) such services were performed in Canada at a time when
            no agreement between the United States and Canada pursuant to
            section 233 of the Social Security Act was in effect, and
                (3) such individual was required to pay contributions on
            the earnings from such services under the social insurance
            system of Canada,
    then such individual may file a certificate under this section in such
    form and manner, and with such official, as may be prescribed in
    regulations issued under chapter 2 of such Code. Upon the filing of
    such certificate, notwithstanding any judgment which has been entered
    to the contrary, such individual shall be exempt from payment of such
    tax with respect to services described in paragraphs (1) and (2) and
    from any penalties or interest for failure to pay such tax or to file a
    self-employment tax return as required under section 6017 of such Code.
        (b) Period for Filing.--A certificate referred to in subsection (a)
    may be filed only during the 180-day period commencing with the date on
    which the regulations referred to in subsection (a) are issued.
        (c) Taxable Years Affected by Certificate.--A certificate referred
    to in subsection (a) shall be effective for taxable years ending after
    December 31, 1978, and before January 1, 1985.
        (d) Restriction on Crediting of Exempt Self-Employment Income.--In
    any case in which an individual is exempt under this section from
    paying a tax imposed under section 1401 of the Internal Revenue Code of
    1986, any income on which such tax would have been imposed but for such
    exemption shall not constitute self-employment income under section
    211(b) of the Social Security Act (42 U.S.C. 411(b)), and, if such
    individual's primary insurance amount has been determined under section
    215 of such Act (42 U.S.C. 415), notwithstanding section 215(f)(1) of
    such Act, the Secretary of Health and Human Services shall recompute
    such primary insurance amount so as to take into account the provisions
    of this subsection. The recomputation under this subsection shall be
    effective with respect to benefits for months following approval of the
    certificate of exemption.

    SEC. 13006. EXCLUSION OF TOTALIZATION BENEFITS FROM THE APPLICATION OF
                  THE WINDFALL ELIMINATION PROVISION.

        (a) In General.--Section 215(a)(7) of the Social Security Act (42
    U.S.C. 415(a)(7)) is amended--
                (1) in subparagraph (A), by striking ``but excluding'' and
            all that follows through ``1937'' and inserting ``but excluding
            (I) a payment under the Railroad Retirement Act of 1974 or
            1937, and (II) a payment by a social security system of a
            foreign country based on an agreement concluded between the
            United States and such foreign country pursuant to section
            233''; and
                (2) in subparagraph (E), by inserting after ``in the case
            of an individual'' the following: ``whose eligibility for old-
            age or disability insurance benefits is based on an agreement
            concluded pursuant to section 233 or an individual''.
        (b) Conforming Amendment Relating to Benefits Under 1939 Act.--
    Section 215(d)(3) of such Act (42 U.S.C. 415(d)(3)) is amended by
    striking ``but excluding'' and all that follows through ``1937'' and
    inserting ``but excluding (I) a payment under the Railroad Retirement
    Act of 1974 or 1937, and (II) a payment by a social security system of
    a foreign country based on an agreement concluded between the United
    States and such foreign country pursuant to section 233''.
        (c) Effective Date.--The amendments made by this section shall
    apply (notwithstanding section 215(f)(1) of the Social Security Act (42
    U.S.C. 415(f)(1))) with respect to benefits payable for months after
    October 1993.

    SEC. 13007. EXCLUSION OF MILITARY RESERVISTS FROM APPLICATION OF THE
                  GOVERNMENT PENSION OFFSET AND WINDFALL ELIMINATION
                  PROVISIONS.

        (a) Exclusion from Government Pension Offset Provisions.--
    Subsections (b)(4), (c)(2), (e)(7), (f)(2), and (g)(4) of section 202
    of the Social Security Act (42 U.S.C. 402 (b)(4), (c)(2), (e)(7),
    (f)(2), and (g)(4)) are each amended--
                (1) in subparagraph (A)(ii), by striking ``unless
            subparagraph (B) applies.'';
                (2) in subparagraph (A), by striking ``The'' in the matter
            following clause (ii) and inserting ``unless subparagraph (B)
            applies. The''; and
                (3) in subparagraph (B), by redesignating the existing
            matter as clause (ii), and by inserting before such clause (ii)
            (as so redesignated) the following:
        ``(B)(i) Subparagraph (A)(i) shall not apply with respect to
    monthly periodic benefits based wholly on service as a member of a
    uniformed service (as defined in section 210(m)).''.
        (b) Exclusion From Windfall Elimination Provisions.--Section
    215(a)(7)(A) of such Act (as amended by section 13006(a) of this Act)
    and section 215(d)(3) of such Act (as amended by section 13006(b) of
    this Act) are each further amended--
                (1) by striking ``and'' before ``(II)''; and
                (2) by striking ``section 233'' and inserting ``section
            233, and (III) a payment based wholly on service as a member of
            a uniformed service (as defined in section 210(m))''.
        (c) Effective Date.--The amendments made by this section shall
    apply (notwithstanding section 215(f) of the Social Security Act) with
    respect to benefits payable for months after October 1993.

    SEC. 13008. REPEAL OF THE FACILITY-OF-PAYMENT PROVISION.

        (a) Repeal of Rule Precluding Redistribution Under Family
    Maximum.--Section 203(i) of the Social Security Act (42 U.S.C. 403(i))
    is repealed.
        (b) Coordination Under Family Maximum of Reduction in Beneficiary's
    Auxiliary Benefits With Suspension of Auxiliary Benefits of Other
    Beneficiary Under Earnings Test.--Section 203(a)(4) of such Act (42
    U.S.C. 403(a)(4)) is amended by striking ``section 222(b). Whenever''
    and inserting the following: ``section 222(b). Notwithstanding the
    preceding sentence, any reduction under this subsection in the case of
    an individual who is entitled to a benefit under subsection (b), (c),
    (d), (e), (f), (g), or (h) of section 202 for any month on the basis of
    the same wages and self-employment income as another person--
                ``(A) who also is entitled to a benefit under subsection
            (b), (c), (d), (e), (f), (g), or (h) of section 202 for such
            month,
                ``(B) who does not live in the same household as such
            individual, and
                ``(C) whose benefit for such month is suspended (in whole
            or in part) pursuant to subsection (h)(3) of this section,
    shall be made before the suspension under subsection (h)(3).
    Whenever''.
        (c) Conforming Amendment Applying Earnings Reporting Requirement
    Despite Suspension of Benefits.--The third sentence of section
    203(h)(1)(A) of such Act (42 U.S.C. 403(h)(1)(A)) is amended by
    striking ``Such report need not be made'' and all that follows through
    ``The Secretary may grant'' and inserting the following: ``Such report
    need not be made for any taxable year--
                ``(i) beginning with or after the month in which such
            individual attained age 70, or
                ``(ii) if benefit payments for all months (in such taxable
            year) in which such individual is under age 70 have been
            suspended under the provisions of the first sentence of
            paragraph (3) of this subsection, unless--
                        ``(I) such individual is entitled to benefits under
                    subsection (b), (c), (d), (e), (f), (g), or (h) of
                    section 202,
                        ``(II) such benefits are reduced under subsection
                    (a) of this section for any month in such taxable year,
                    and
                        ``(III) in any such month there is another person
                    who also is entitled to benefits under subsection (b),
                    (c), (d), (e), (f), (g), or (h) of section 202 on the
                    basis of the same wages and self-employment income and
                    who does not live in the same household as such
                    individual.
    The Secretary may grant''.
        (d) Conforming Amendment Deleting Special Income Tax Treatment of
    Benefits No Longer Required by Reason of Repeal.--Section 86(d)(1) of
    the Internal Revenue Code of 1986 (relating to income tax on social
    security benefits) is amended by striking the last sentence.
        (e) Effective Dates.--
                (1) The amendments made by subsections (a), (b), and (c)
            shall apply with respect to benefits payable for months after
            December 1994.
                (2) The amendment made by subsection (d) shall apply with
            respect to benefits received after December 31, 1994, in
            taxable years ending after such date.

    SEC. 13009. MAXIMUM FAMILY BENEFITS IN GUARANTEE CASES.

        (a) In General.--Section 203(a) of the Social Security Act (42
    U.S.C. 403(a)) is amended by adding at the end the following new
    paragraph:
        ``(10)(A) Subject to subparagraphs (B) and (C)--
                ``(i) the total monthly benefits to which beneficiaries may
            be entitled under sections 202 and 223 for a month on the basis
            of the wages and self- employment income of an individual whose
            primary insurance amount is computed under section
            215(a)(2)(B)(i) shall equal the total monthly benefits which
            were authorized by this section with respect to such
            individual's primary insurance amount for the last month of his
            prior entitlement to disability insurance benefits, increased
            for this purpose by the general benefit increases and other
            increases under section 215(i) that would have applied to such
            total monthly benefits had the individual remained entitled to
            disability insurance benefits until the month in which he
            became entitled to old-age insurance benefits or reentitled to
            disability insurance benefits or died, and
                ``(ii) the total monthly benefits to which beneficiaries
            may be entitled under sections 202 and 223 for a month on the
            basis of the wages and self- employment income of an individual
            whose primary insurance amount is computed under section
            215(a)(2)(C) shall equal the total monthly benefits which were
            authorized by this section with respect to such individual's
            primary insurance amount for the last month of his prior
            entitlement to disability insurance benefits.
        ``(B) In any case in which--
                ``(i) the total monthly benefits with respect to such
            individual's primary insurance amount for the last month of his
            prior entitlement to disability insurance benefits was computed
            under paragraph (6), and
                ``(ii) the individual's primary insurance amount is
            computed under subparagraph (B)(i) or (C) of section 215(a)(2)
            by reason of the individual's entitlement to old-age insurance
            benefits or death,
    the total monthly benefits shall equal the total monthly benefits that
    would have been authorized with respect to the primary insurance amount
    for the last month of his prior entitlement to disability insurance
    benefits if such total monthly benefits had been computed without
    regard to paragraph (6).
        ``(C) This paragraph shall apply before the application of
    paragraph (3)(A), and before the application of section 203(a)(1) of
    this Act as in effect in December 1978.''.
        (b) Conforming Amendment.--Section 203(a)(8) of such Act (42 U.S.C.
    403(a)(8)) is amended by striking ``Subject to paragraph (7),'' and
    inserting ``Subject to paragraph (7) and except as otherwise provided
    in paragraph (10)(C),''.
        (c) Effective Date.--The amendments made by this section shall
    apply for the purpose of determining the total monthly benefits to
    which beneficiaries may be entitled under sections 202 and 223 of the
    Social Security Act based on the wages and self-employment income of an
    individual who--
                (1) becomes entitled to an old-age insurance benefit under
            section 202(a) of such Act,
                (2) becomes reentitled to a disability insurance benefit
            under section 223 of such Act, or
                (3) dies,
    after October 1993.

    SEC. 13010. AUTHORIZATION FOR DISCLOSURE BY THE SECRETARY OF HEALTH AND
                  HUMAN SERVICES OF INFORMATION FOR PURPOSES OF PUBLIC OR
                  PRIVATE EPIDEMIOLOGICAL AND SIMILAR RESEARCH.

        (a) In General.--Section 1106 of the Social Security Act (42 U.S.C.
    1306) is amended--
                (1) by redesignating subsections (d) and (e) as subsections
            (e) and (f), respectively;
                (2) in subsection (f) (as so redesignated), by striking
            ``subsection (d)'' and inserting ``subsection (e)''; and
                (3) by inserting after subsection (c) the following new
            subsection:
        ``(d) Notwithstanding any other provision of this section, in any
    case in which--
                ``(1) information regarding whether an individual is shown
            on the records of the Secretary as being alive or deceased is
            requested from the Secretary for purposes of epidemiological or
            similar research which the Secretary finds may reasonably be
            expected to contribute to a national health interest, and
                ``(2) the requester agrees to reimburse the Secretary for
            providing such information and to comply with limitations on
            safeguarding and rerelease or redisclosure of such information
            as may be specified by the Secretary,
    the Secretary shall comply with such request, except to the extent that
    compliance with such request would constitute a violation of the terms
    of any contract entered into under section 205(r).''.
        (b) Availability of Information Returns Regarding Wages Paid
    Employees.--Section 6103(l)(5) of the Internal Revenue Code of 1986
    (relating to disclosure of returns and return information to the
    Department of Health and Human Services for purposes other than tax
    administration) is amended--
                (1) by striking ``for the purpose of'' and inserting ``for
            the purpose of--'';
                (2) by striking ``carrying out, in accordance with an
            agreement'' and inserting the following:
                        ``(A) carrying out, in accordance with an
                    agreement'';
                (3) by striking ``program.'' and inserting ``program; or'';
            and
                (4) by adding at the end the following new subparagraph:
                        ``(B) providing information regarding the mortality
                    status of individuals for epidemiological and similar
                    research in accordance with section 1106(d) of the
                    Social Security Act.''.
        (c) Effective Date.--The amendments made by this section shall
    apply with respect to requests for information made after the date of
    the enactment of this Act.

    SEC. 13011. IMPROVEMENT AND CLARIFICATION OF PROVISIONS PROHIBITING
                  MISUSE OF SYMBOLS, EMBLEMS, OR NAMES IN REFERENCE TO
                  SOCIAL SECURITY PROGRAMS AND AGENCIES.

        (a) Prohibition of Unauthorized Reproduction, Reprinting, or
    Distribution for Fee of Certain Official Publications.--Section 1140(a)
    of the Social Security Act (42 U.S.C. 1320b-10(a)) is amended--
                (1) by redesignating paragraphs (1) and (2) as
            subparagraphs (A) and (B), respectively;
                (2) by inserting ``(1)'' after ``(a)''; and
                (3) by adding at the end the following new paragraph:
        ``(2) No person may, for a fee, reproduce, reprint, or distribute
    any item consisting of a form, application, or other publication of the
    Social Security Administration unless such person has obtained
    specific, written authorization for such activity in accordance with
    regulations which the Secretary shall prescribe.''.
        (b) Addition to Prohibited Words, Letters, Symbols, and Emblems.--
    Paragraph (1) of section 1140(a) of such Act (as redesignated by
    subsection (a)) is further amended--
                (1) in subparagraph (A) (as redesignated), by striking
            ``Administration', the letters `SSA' or `HCFA','' and inserting
            ``Administration', `Department of Health and Human Services',
            `Health and Human Services', `Supplemental Security Income
            Program', or `Medicaid', the letters `SSA', `HCFA', `DHHS',
            `HHS', or `SSI',''; and
                (2) in subparagraph (B) (as redesignated), by striking
            ``Social Security Administration'' each place it appears and
            inserting ``Social Security Administration, Health Care
            Financing Administration, or Department of Health and Human
            Services'', and by striking ``or of the Health Care Financing
            Administration''.
        (c) Exemption for Use of Words, Letters, Symbols, and Emblems of
    State and Local Government Agencies by Such Agencies.--Paragraph (1) of
    section 1140(a) of such Act (as redesignated by subsection (a)) is
    further amended by adding at the end the following new sentence: ``The
    preceding provisions of this subsection shall not apply with respect to
    the use by any agency or instrumentality of a State or political
    subdivision of a State of any words or letters which identify an agency
    or instrumentality of such State or of a political subdivision of such
    State or the use by any such agency or instrumentality of any symbol or
    emblem of an agency or instrumentality of such State or a political
    subdivision of such State.''.
        (d) Inclusion of Reasonableness Standard.--Section 1140(a)(1) of
    such Act (as amended by the preceding provisions of this section) is
    further amended, in the matter following subparagraph (B) (as
    redesignated), by striking ``convey'' and inserting ``convey, or in a
    manner which reasonably could be interpreted or construed as
    conveying,''.
        (e) Ineffectiveness of Disclaimers.--Subsection (a) of section 1140
    of such Act (as amended by the preceding provisions of this section) is
    further amended by adding at the end the following new paragraph:
        ``(3) Any determination of whether the use of one or more words,
    letters, symbols, or emblems (or any combination or variation thereof)
    in connection with an item described in paragraph (1) or the
    reproduction, reprinting, or distribution of an item described in
    paragraph (2) is a violation of this subsection shall be made without
    regard to any inclusion in such item (or any so reproduced, reprinted,
    or distributed copy thereof) of a disclaimer of affiliation with the
    United States Government or any particular agency or instrumentality
    thereof.''.
        (f) Violations With Respect to Individual Items.--Section
    1140(b)(1) of such Act (42 U.S.C. 1320b-10(b)(1)) is amended by adding
    at the end the following new sentence: ``In the case of any items
    referred to in subsection (a)(1) consisting of pieces of mail, each
    such piece of mail which contains one or more words, letters, symbols,
    or emblems in violation of subsection (a) shall represent a separate
    violation. In the case of any item referred to in subsection (a)(2),
    the reproduction, reprinting, or distribution of such item shall be
    treated as a separate violation with respect to each copy thereof so
    reproduced, reprinted, or distributed.''.
        (g) Elimination of Cap on Aggregate Liability Amount.--
                (1) Repeal.--Paragraph (2) of section 1140(b) of such Act
            (42 U.S.C. 1320b-10(b)(2)) is repealed.
                (2) Conforming amendments.--Section 1140(b) of such Act is
            further amended--
                        (A) by striking ``(1) Subject to paragraph (2),
                    the'' and inserting ``The'';
                        (B) by redesignating subparagraphs (A) and (B) as
                    paragraphs (1) and (2), respectively; and
                        (C) in paragraph (1) (as redesignated), by striking
                    ``subparagraph (B)'' and inserting ``paragraph (2)''.
        (h) Removal of Formal Declination Requirement.--Section 1140(c)(1)
    of such Act (42 U.S.C. 1320b-10(c)(1)) is amended by inserting ``and
    the first sentence of subsection (c)'' after ``and (i)''.
        (i) Penalties Relating to Social Security Administration Deposited
    in OASI Trust Fund.--Section 1140(c)(2) of such Act (42 U.S.C. 1320b-
    10(c)(2)) is amended in the second sentence by striking ``United
    States.'' and inserting ``United States, except that, to the extent
    that such amounts are recovered under this section as penalties imposed
    for misuse of words, letters, symbols, or emblems relating to the
    Social Security Administration, such amounts shall be deposited into
    the Federal Old-Age and Survivor's Insurance Trust Fund.''.
        (j) Enforcement.--Section 1140 of such Act (42 U.S.C. 1320b-10) is
    amended by adding at the end the following new subsection:
        ``(d) The preceding provisions of this section shall be enforced
    through the Office of Inspector General of the Department of Health and
    Human Services.''.
        (k) Annual Reports.--Section 1140 of such Act (as amended by the
    preceding provisions of this section) is further amended by adding at
    the end the following new subsection:
        ``(e) The Secretary shall include in the annual report submitted
    pursuant to section 704 a report on the operation of this section
    during the year covered by such annual report. Such report shall
    specify--
                ``(1) the number of complaints of violations of this
            section received by the Social Security Administration during
            the year,
                ``(2) the number of cases in which a notice of violation of
            this section was sent by the Social Security Administration
            during the year requesting that an individual cease activities
            in violation of this section,
                ``(3) the number of complaints of violations of this
            section referred by the Social Security Administration to the
            Inspector General in the Department of Health and Human
            Services during the year,
                ``(4) the number of investigations of violations of this
            section undertaken by the Inspector General during the year,
                ``(5) the number of cases in which a demand letter was sent
            during the year assessing a civil money penalty under this
            section,
                ``(6) the total amount of civil money penalties assessed
            under this section during the year,
                ``(7) the number of requests for hearings filed during the
            year pursuant to subsection (c)(1) of this section and section
            1128A(c)(2),
                ``(8) the disposition during such year of hearings filed
            pursuant to sections 1140(c)(1) and 1128A(c)(2), and
                ``(9) the total amount of civil money penalties under this
            section deposited into the Federal Old-Age and Survivors
            Insurance Trust Fund during the year.''.
        (l) Effective Date.--The amendments made by this section shall
    apply with respect to violations occurring after the date of the
    enactment of this Act.

    SEC. 13012. INCREASED PENALTIES FOR UNAUTHORIZED DISCLOSURE OF SOCIAL
                  SECURITY INFORMATION.

        (a) Unauthorized Disclosure.--Section 1106(a) of the Social
    Security Act (42 U.S.C. 1306(a)) is amended--
                (1) by striking ``misdemeanor'' and inserting ``felony'';
                (2) by striking ``$1,000'' and inserting ``$10,000 for each
            occurrence of a violation''; and
                (3) by striking ``one year'' and inserting ``5 years''.
        (b) Unauthorized Disclosure by Fraud.--Section 1107(b) of such Act
    (42 U.S.C. 1307(b)) is amended--
                (1) by inserting ``social security account number,'' after
            ``information as to the'';
                (2) by striking ``misdemeanor'' and inserting ``felony'';
                (3) by striking ``$1,000'' and inserting ``$10,000 for each
            occurrence of a violation''; and
                (4) by striking ``one year'' and inserting ``5 years''.
        (c) Effective Date.--The amendments made by this section shall
    apply to violations occurring on or after the date of the enactment of
    this Act.

    SEC. 13013. SIMPLIFICATION OF EMPLOYMENT TAXES ON DOMESTIC SERVICES.

        (a) Coordination of Collection of Domestic Service Employment With
    Collection of Income Taxes.--
                (1) In general.--Chapter 25 of the Internal Revenue Code of
            1986 (relating to general provisions relating to employment
            taxes) is amended by adding at the end thereof the following
            new section:

    ``SEC. 3510. COORDINATION OF COLLECTION OF DOMESTIC SERVICE EMPLOYMENT
                  TAXES WITH COLLECTION OF INCOME TAXES.

        ``(a) General Rule.--Except as otherwise provided in this section--
                ``(1) returns with respect to domestic service employment
            taxes shall be made on a calendar year basis,
                ``(2) any such return for any calendar year shall be filed
            on or before the 15th day of the fourth month following the
            close of the employer's taxable year which begins in such
            calendar year, and
                ``(3) no requirement to make deposits (or to pay
            installments under section 6157) shall apply with respect to
            such taxes.
        ``(b) Domestic Service Employment Taxes Subject to Estimated Tax
    Provisions.--
                ``(1) In general.--Solely for purposes of section 6654,
            domestic service employment taxes imposed with respect to any
            calendar year shall be treated as a tax imposed by chapter 2
            for the taxable year of the employer which begins in such
            calendar year.
                ``(2) Annualization.--Under regulations prescribed by the
            Secretary, appropriate adjustments shall be made in the
            application of section 6654(d)(2) in respect of the amount
            treated as tax under paragraph (1).
                ``(3) Transitional rule.--For purposes of applying section
            6654 to a taxable year beginning in 1993, the amount referred
            to in clause (ii) of section 6654(d)(1)(B) shall be increased
            by 90 percent of the amount treated as tax under paragraph (1)
            for such taxable year.
        ``(c) Domestic Service Employment Taxes.--For purposes of this
    section, the term `domestic service employment taxes' means--
                ``(1) any taxes imposed by chapter 21 or 23 on remuneration
            paid for domestic service in a private home of the employer,
            and
                ``(2) any amount withheld from such remuneration pursuant
            to an agreement under section 3402(p).
    For purposes of this subsection, the term `domestic service in a
    private home of the employer' does not include service described in
    section 3121(g)(5).
        ``(d) Exception Where Employer Liable for Other Employment Taxes.--
    To the extent provided in regulations prescribed by the Secretary, this
    section shall not apply to any employer for any calendar year if such
    employer is liable for any tax under this subtitle with respect to
    remuneration for services other than domestic service in a private home
    of the employer.
        ``(e) General Regulatory Authority.--The Secretary shall prescribe
    such regulations as may be necessary or appropriate to carry out the
    purposes of this section. Such regulations may treat domestic service
    employment taxes as taxes imposed by chapter 1 for purposes of
    coordinating the assessment and collection of such employment taxes
    with the assessment and collection of domestic employers' income taxes.
        ``(f) Authority To Enter Into Agreements To Collect State
    Unemployment Taxes.--
                ``(1) In general.--The Secretary is hereby authorized to
            enter into an agreement with any State to collect, as the agent
            of such State, such State's unemployment taxes imposed on
            remuneration paid for domestic service in a private home of the
            employer. Any taxes to be collected by the Secretary pursuant
            to such an agreement shall be treated as domestic service
            employment taxes for purposes of this section.
                ``(2) Transfers to state account.--Any amount collected
            under an agreement referred to in paragraph (1) shall be
            transferred by the Secretary to the account of the State in the
            Unemployment Trust Fund.
                ``(3) Subtitle f made applicable.--For purposes of subtitle
            F, any amount required to be collected under an agreement under
            paragraph (1) shall be treated as a tax imposed by chapter 23.
                ``(4) State.--For purposes of this subsection, the term
            `State' has the meaning given such term by section
            3306(j)(1).''
                (2) Clerical amendment.--The table of sections for chapter
            25 of such Code is amended by adding at the end thereof the
            following:

                                  ``Sec. 3510. Coordination of collection
                                            of domestic service employment
                                            taxes with collection of income
                                            taxes.''
                (3) Effective date.--The amendments made by this subsection
            shall apply to remuneration paid in calendar years beginning
            after December 31, 1993.
                (4) Expanded information to employers.--The Secretary of
            the Treasury or his delegate shall prepare and make available
            information on the Federal tax obligations of employers with
            respect to employees performing domestic service in a private
            home of the employer. Such information shall also include a
            statement that such employers may have obligations with respect
            to such employees under State laws relating to unemployment
            insurance and workers compensation.
        (b) Threshold Requirement for Social Security Taxes.--
                (1) Amendments of internal revenue code.--
                        (A) Subparagraph (B) of section 3121(a)(7) of the
                    Internal Revenue Code of 1986 (defining wages) is
                    amended to read as follows:
                        ``(B) cash remuneration paid by an employer in any
                    calendar year to an employee for domestic service in a
                    private home of the employer (within the meaning of
                    subsection (y)), if the cash remuneration paid in such
                    year by the employer to the employee for such service
                    is less than the applicable dollar threshold (as
                    defined in subsection (y)) for such year;''.
                        (B) Section 3121 of such Code is amended by adding
                    at the end thereof the following new subsection:
        ``(y) Domestic Service in a Private Home.--For purposes of
    subsection (a)(7)(B)--
                ``(1) Exclusion for certain farm service.--The term
            `domestic service in a private home of the employer' does not
            include service described in subsection (g)(5).
                ``(2) Applicable dollar threshold.--The term `applicable
            dollar threshold' means $1,800. In the case of calendar years
            after 1994, the Secretary of Health and Human Services shall
            adjust such $1,800 amount at the same time and in the same
            manner as under section 215(a)(1)(B)(ii) of the Social Security
            Act with respect to the amounts referred to in section
            215(a)(1)(B)(i) of such Act, except that, for purposes of this
            subparagraph, 1992 shall be substituted for the calendar year
            referred to in section 215(a)(1)(B)(ii)(II) of such Act. If the
            amount determined under the preceding sentence is not a
            multiple of $50, such amount shall be rounded to the nearest
            multiple of $50.''
                        (C) The second sentence of section 3102(a) of such
                    Code is amended--
                                (i) by striking ``calendar quarter'' each
                            place it appears and inserting ``calendar
                            year'', and
                                (ii) by striking ``$50'' and inserting
                            ``the applicable dollar threshold (as defined
                            in section 3121(y)(2)) for such year''.
                (2) Amendment of social security act.--Subparagraph (B) of
            section 209(a)(6) of the Social Security Act (42 U.S.C.
            409(a)(6)(B)) is amended to read as follows:
                ``(B) Cash remuneration paid by an employer in any calendar
            year to an employee for domestic service in a private home of
            the employer, if the cash remuneration paid in such year by the
            employer to the employee for such service is less than the
            applicable dollar threshold (as defined in section 3121(y)(2)
            of the Internal Revenue Code of 1986) for such year. As used in
            this subparagraph, the term `domestic service in a private home
            of the employer' does not include service described in section
            210(f)(5).''
                (3) Effective date.--The amendments made by this subsection
            shall apply to remuneration paid in calendar years beginning
            after December 31, 1993.
                (4) Relief from liability for certain underpayment
            amounts.--
                        (A) In general.--On and after the date of the
                    enactment of this Act, an underpayment to which this
                    paragraph applies (and any penalty, addition to tax,
                    and interest with respect to such underpayment) shall
                    not be assessed (or, if assessed, shall not be
                    collected).
                        (B) Underpayments to which paragraph applies.--This
                    paragraph shall apply to an underpayment to the extent
                    of the amount thereof which would not be an
                    underpayment if--
                                (i) the amendments made by paragraph (1)
                            had applied to all calendar years after 1950
                            and before 1994, and
                                (ii) the applicable dollar threshold for
                            any such calendar year were the amount
                            determined under the following table:

                      In the case of
                                                             The applicable
                        calendar year:
                                                       dollar threshold is:
              1951, 1952, or 1953........................     $   200
              1954, 1955, 1956, or 1957..................         250
              1958, 1959, 1960, 1961, or 1962............         300
              1963, 1964, 1965, or 1966..................         350
              1967, 1968, 1969...........................         400
              1970.......................................         450
              1971, 1972, or 1973........................         500
              1974 or 1975...............................         600
              1976.......................................         650
              1977.......................................         700
              1978.......................................         750
              1979.......................................         800
              1980.......................................         850
              1981.......................................         900
              1982.......................................       1,000
              1983.......................................       1,100
              1984.......................................       1,200
              1985.......................................       1,250
              1986.......................................       1,300
              1987.......................................       1,350
              1988.......................................       1,400
              1989.......................................       1,500
              1990.......................................       1,550
              1991.......................................       1,600
              1992.......................................       1,700
              1993.......................................       1,750

    SEC. 13014. INCREASE IN AUTHORIZED PERIOD FOR EXTENSION OF TIME TO FILE
                  ANNUAL EARNINGS REPORT.

        (a) In General.--Section 203(h)(1)(A) of the Social Security Act
    (42 U.S.C. 403(h)(1)(A)) is amended in the last sentence by striking
    ``three months'' and inserting ``four months''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply with respect to reports of earnings for taxable years ending on
    or after December 31, 1993.

    SEC. 13015. ALLOCATIONS TO FEDERAL DISABILITY INSURANCE TRUST FUND.

        (a) Allocation With Respect to Wages.--Section 201(b)(1) of the
    Social Security Act (42 U.S.C. 401(b)(1)) is amended to read as
    follows:
                ``(1) 1.75 percent of the wages (as defined in section 3121
            of the Internal Revenue Code of 1986) paid after December 31,
            1992, and reported to the Secretary of the Treasury or his
            delegate pursuant to subtitle F of the Internal Revenue Code of
            1986, which wages shall be certified by the Secretary of Health
            and Human Services on the basis of the records of wages
            established and maintained by such Secretary in accordance with
            such reports; and''.
        (b) Allocation With Respect to Self-Employment Income.--Section
    201(b)(2) of such Act (42 U.S.C. 401(b)(2)) is amended to read as
    follows:
                ``(2) 1.75 percent of the self-employment income (as
            defined in section 1402 of the Internal Revenue Code of 1986)
            reported to the Secretary of the Treasury or his delegate on
            tax returns under subtitle F of the Internal Revenue Code of
            1986 for any taxable year beginning after December 31, 1992,
            which self-employment income shall be certified by the
            Secretary of Health and Human Services on the basis of the
            records of self-employment income established and maintained by
            the Secretary of Health and Human Services in accordance with
            such returns.''.
        (c) Effective Date.--The amendments made by this section shall
    apply with respect to wages paid after December 31, 1992, and self-
    employment income for taxable years beginning after such date.
        (d) Study on Rising Costs of Disability Benefits.--
                (1) In general.--As soon as practicable after the date of
            the enactment of this Act, the Secretary of Health and Human
            Services shall conduct a comprehensive study of the reasons for
            rising costs payable from the Federal Disability Insurance
            Trust Fund.
                (2) Matters to be included in study.--In conducting the
            study under this subsection, the Secretary shall--
                        (A) determine the relative importance of the
                    following factors in increasing the costs payable from
                    the Trust Fund:
                                (i) increased numbers of applications for
                            benefits;
                                (ii) higher rates of benefit allowances;
                            and
                                (iii) decreased rates of benefit
                            terminations; and
                        (B) identify, to the extent possible, underlying
                    social, economic, demographic, programmatic, and other
                    trends responsible for changes in disability benefit
                    applications, allowances, and terminations.
                (3) Report.--Not later than December 31, 1995, the
            Secretary shall transmit a report to the Committee on Ways and
            Means of the House of Representatives and the Committee on
            Finance of the Senate setting forth the results of the study
            conducted under this subsection, together with any
            recommendations for legislative changes which the Secretary
            determines appropriate.

    SEC. 13016. EXTENSION OF DISABILITY INSURANCE PROGRAM DEMONSTRATION
                  PROJECT AUTHORITY.

        (a) In General.--Section 505 of the Social Security Disability
    Amendments of 1980 (Public Law 96-265), as amended by section 12101 of
    the Consolidated Omnibus Budget Reconciliation Act of 1985 (Public Law
    99-272), section 10103 of the Omnibus Budget Reconciliation Act of 1989
    (Public Law 101-239), and section 5120 of the Omnibus Budget
    Reconciliation Act of 1990 (Public Law 101-508) is further amended--
                (1) in paragraph (3) of subsection (a), by striking ``June
            10, 1993'' and inserting ``June 10, 1996'';
                (2) in paragraph (4) of subsection (a), by striking
            ``1992'' and inserting ``1995''; and
                (3) in subsection (c), by striking ``October 1, 1993'' and
            inserting ``June 9, 1996''.
        (b) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act.

    SEC. 13017. TECHNICAL AND CLERICAL AMENDMENTS.

        (a) Amendments to Title II of the Social Security Act.--
                (1) Section 201(a) of the Social Security Act (42 U.S.C.
            401(a)) is amended, in the matter following clause (4), by
            striking ``and and'' and inserting ``and''.
                (2) Section 202(d)(8)(D)(ii) of such Act (42 U.S.C.
            402(d)(8)(D)(ii)) is amended by adding a period at the end and
            by adjusting the left hand margination thereof so as to align
            with section 202(d)(8)(D)(i) of such Act.
                (3) Section 202(q)(1)(A) of such Act (42 U.S.C.
            402(q)(1)(A)) is amended by striking the dash at the end.
                (4) Section 202(q)(9) of such Act (42 U.S.C. 402(q)(9)) is
            amended, in the matter preceding subparagraph (A), by striking
            ``parargaph'' and inserting ``paragraph''.
                (5) Section 202(t)(4)(D) of such Act (42 U.S.C.
            402(t)(4)(D)) is amended by inserting ``if the'' before
            ``Secretary'' the second and third places it appears.
                (6) Clauses (i) and (ii) of section 203(f)(5)(C) of such
            Act (42 U.S.C. 403(f)(5)(C)) are amended by adjusting the left-
            hand margination thereof so as to align with clauses (i) and
            (ii) of section 203(f)(5)(B) of such Act.
                (7) Paragraph (3)(A) and paragraph (3)(B) of section 205(b)
            of such Act (42 U.S.C. 405(b)) are amended by adjusting the
            left-hand margination thereof so as to align with the matter
            following section 205(b)(2)(C) of such Act.
                (8) Section 205(c)(2)(B)(iii) of such Act (42 U.S.C.
            405(c)(2)(B)(iii)) is amended by striking ``non-public'' and
            inserting ``nonpublic''.
                (9) Section 205(c)(2)(C) of such Act (42 U.S.C.
            405(c)(2)(C)) is amended--
                        (A) by striking the clause (vii) added by section
                    2201(c) of Public Law 101-624; and
                        (B) by redesignating the clause (iii) added by
                    section 2201(b)(3) of Public Law 101-624, clause (iv),
                    clause (v), clause (vi), and the clause (vii) added by
                    section 1735(b) of Public Law 101-624 as clause (iv),
                    clause (v), clause (vi), clause (vii), and clause
                    (viii), respectively;
                        (C) in clause (v) (as redesignated), by striking
                    ``subclause (I) of'', and by striking ``subclause (II)
                    of clause (i)'' and inserting ``clause (ii)''; and
                        (D) in clause (viii)(IV) (as redesignated), by
                    inserting ``a social security account number or''
                    before ``a request for''.
                (10) The heading for section 205(j) of such Act (42 U.S.C.
            405(j)) is amended to read as follows:

                           ``Representative Payees''.

                (11) The heading for section 205(s) of such Act (42 U.S.C.
            405(s)) is amended to read as follows:

                            ``Notice Requirements''.

                (12) Section 208(c) of such Act (42 U.S.C. 408(c)) is
            amended by striking ``subsection (g)'' and inserting
            ``subsection (a)(7)''.
                (13) Section 210(a)(5)(B)(i)(V) of such Act (42 U.S.C.
            410(a)(5)(B)(i)(V)) is amended by striking ``section
            105(e)(2)'' and inserting ``section 104(e)(2)''.
                (14) Section 211(a) of such Act (42 U.S.C. 411(a)) is
            amended--
                        (A) in paragraph (13), by striking ``and'' at the
                    end; and
                        (B) in paragraph (14), by striking the period and
                    inserting ``; and''.
                (15) Section 213(c) of such Act (42 U.S.C. 413(c)) is
            amended by striking ``section'' the first place it appears and
            inserting ``sections''.
                (16) Section 215(a)(5)(B)(i) of such Act (42 U.S.C.
            415(a)(5)(B)(i)) is amended by striking ``subsection'' the
            second place it appears and inserting ``subsections''.
                (17) Section 215(f)(7) of such Act (42 U.S.C. 415(f)(7)) is
            amended by inserting a period after ``1990''.
                (18) Subparagraph (F) of section 218(c)(6) of such Act (42
            U.S.C. 418(c)(6)) is amended by adjusting the left-hand
            margination thereof so as to align with section 218(c)(6)(E) of
            such Act.
                (19) Section 223(i) of such Act (42 U.S.C. 423(i)) is
            amended by adding at the beginning the following heading:

                    ``Limitation on Payments to Prisoners''.

        (b) Related Amendments.--
                (1) Section 603(b)(5)(A) of Public Law 101-649 (amending
            section 202(n)(1) of the Social Security Act) (104 Stat. 5085)
            is amended by inserting ``under'' before ``paragraph (1),'' and
            by striking ``(17), or (18)'' and inserting ``(17), (18), or
            (19)'', effective as if this paragraph were included in such
            section 603(b)(5)(A).
                (2) Section 10208(b)(1) of Public Law 101-239 (amending
            section 230(b)(2)(A) of the Social Security Act) (103 Stat.
            2477) is amended by striking ``230(b)(2)(A)'' and
            ``430(b)(2)(A)'' and inserting ``230(b)(2)'' and ``430(b)(2)'',
            respectively, effective as if this paragraph were included in
            such section 10208(b)(1).
        (c) Conforming, Clerical Amendments Updating, Without Substantive
    Change, References in Title II of the Social Security Act to the
    Internal Revenue Code.--
                (1)(A) Section 201(a) of such Act (42 U.S.C. 401(a)) is
            amended--
                        (i) by striking clauses (1) and (2);
                        (ii) in clause (3), by striking ``(3) the taxes
                    imposed'' and all that follows through ``December 31,
                    1954,'' and inserting ``(1) the taxes imposed by
                    chapter 21 (other than sections 3101(b) and 3111(b)) of
                    the Internal Revenue Code of 1986 with respect to wages
                    (as defined in section 3121 of such Code) reported to
                    the Secretary of the Treasury or his delegate pursuant
                    to subtitle F of such Code,'', and by striking
                    ``subchapter or'';
                        (iii) in clause (4), by striking ``(4) the taxes
                    imposed'' and all that follows through ``such Code,''
                    and inserting ``(2) the taxes imposed by chapter 2
                    (other than section 1401(b)) of the Internal Revenue
                    Code of 1986 with respect to self-employment income (as
                    defined in section 1402 of such Code) reported to the
                    Secretary of the Treasury or his delegate on tax
                    returns under subtitle F of such Code,'', and by
                    striking ``subchapter or chapter'' and inserting
                    ``chapter''; and
                        (iv) in the matter following the clauses amended by
                    this subparagraph, by striking ``clauses (3) and (4)''
                    each place it appears and inserting ``clauses (1) and
                    (2)''.
                (B) The amendments made by subparagraph (A) shall apply
            only with respect to taxes imposed with respect to wages paid
            on or after January 1, 1993, or with respect to self-employment
            income for taxable years beginning on or after such date.
                (2)(A)(i) Section 201(g)(1) of such Act (42 U.S.C.
            401(g)(1)) is amended--
                        (I) in subparagraph (A)(i), by striking ``and
                    subchapter E'' and all that follows through ``1954''
                    and inserting ``and chapters 2 and 21 of the Internal
                    Revenue Code of 1986'';
                        (II) in subparagraph (A)(ii), by striking ``1954''
                    and inserting ``1986'';
                        (III) in the matter in subparagraph (A) following
                    clause (ii), by striking ``subchapter E'' and all that
                    follows through ``1954.'' and inserting ``chapters 2
                    and 21 of the Internal Revenue Code of 1986.'', and by
                    striking ``1954 other'' and inserting ``1986 other'';
                    and
                        (IV) in subparagraph (B), by striking ``1954'' each
                    place it appears and inserting ``1986''.
                (ii) The amendments made by clause (i) shall apply only
            with respect to periods beginning on or after the date of the
            enactment of this Act.
                (B)(i) Section 201(g)(2) of such Act (42 U.S.C. 401(g)(2))
            is amended by striking ``section 3101(a)'' and all that follows
            through ``1950.'' and inserting ``section 3101(a) of the
            Internal Revenue Code of 1986 which are subject to refund under
            section 6413(c) of such Code with respect to wages (as defined
            in section 3121 of such Code).'', and by striking ``wages
            reported'' and all that follows through ``1954,'' and inserting
            ``wages reported to the Secretary of the Treasury or his
            delegate pursuant to subtitle F of such Code,''.
                (ii) The amendments made by clause (i) shall apply only
            with respect to wages paid on or after January 1, 1993.
                (C) Section 201(g)(4) of such Act (42 U.S.C. 401(g)(4)) is
            amended--
                        (i) by striking ``The Board of Trustees shall
                    prescribe before January 1, 1981, the method'' and
                    inserting ``If at any time or times the Boards of
                    Trustees of such Trust Funds deem such action
                    advisable, they may modify the method prescribed by
                    such Boards'';
                        (ii) by striking ``1954'' and inserting ``1986'';
                    and
                        (iii) by striking the last sentence.
                (3) Section 202(v) of such Act (42 U.S.C. 402(v)) is
            amended--
                        (A) in paragraph (1), by striking ``1954'' and
                    inserting ``1986''; and
                        (B) in paragraph (3)(A), by inserting ``of the
                    Internal Revenue Code of 1986'' after ``3127''.
                (4) Section 205(c)(5)(F)(i) of such Act (42 U.S.C.
            405(c)(5)(F)(i)) is amended by inserting ``or the Internal
            Revenue Code of 1986'' after ``1954''.
                (5)(A) Section 208(a)(1) of such Act (42 U.S.C. 408(a)(1))
            is amended--
                        (i) in the matter preceding subparagraph (A), by
                    striking ``subchapter E'' and all that follows through
                    ``1954'' and inserting ``chapter 2 or 21 or subtitle F
                    of the Internal Revenue Code of 1986'';
                        (ii) in subparagraph (A), by inserting ``of 1986''
                    after ``Internal Revenue Code''; and
                        (iii) in subparagraph (B), by inserting ``of 1986''
                    after ``Internal Revenue Code''.
                (B) The amendments made by subparagraph (A) shall apply
            only with respect to violations occurring on or after the date
            of the enactment of this Act.
                (6)(A) Section 209(a)(4)(A) of such Act (42 U.S.C.
            409(a)(4)(A)) is amended by inserting ``or the Internal Revenue
            Code of 1986'' after ``Internal Revenue Code of 1954''.
                (B) Section 209(a) of such Act (42 U.S.C. 409(a)) is
            amended--
                        (i) in subparagraphs (C) and (E) of paragraph (4),
                        (ii) in paragraph (5)(A),
                        (iii) in subparagraphs (A) and (B) of paragraph
                    (14),
                        (iv) in paragraph (15),
                        (v) in paragraph (16), and
                        (vi) in paragraph (17),
            by striking ``1954'' each place it appears and inserting
            ``1986''.
                (C) Subsections (b), (f), (g), (i)(1), and (j) of section
            209 of such Act (42 U.S.C. 409) are amended by striking
            ``1954'' each place it appears and inserting ``1986''.
                (7) Section 211(a)(15) of such Act (42 U.S.C. 411(a)(15))
            is amended by inserting ``of the Internal Revenue Code of
            1986'' after ``section 162(m)''.
                (8) Title II of such Act is further amended--
                        (A) in subsections (f)(5)(B)(ii) and (k) of section
                    203 (42 U.S.C. 403),
                        (B) in section 205(c)(1)(D)(i) (42 U.S.C.
                    405(c)(1)(D)(i)),
                        (C) in the matter in section 210(a) (42 U.S.C.
                    410(a)) preceding paragraph (1) and in paragraphs (8),
                    (9), and (10) of section 210(a),
                        (D) in subsections (p)(4) and (q) of section 210
                    (42 U.S.C. 410),
                        (E) in the matter in section 211(a) (42 U.S.C.
                    411(a)) preceding paragraph (1) and in paragraphs (3),
                    (4), (6), (10), (11), and (12) and clauses (iii) and
                    (iv) of section 211(a),
                        (F) in the matter in section 211(c) (42 U.S.C.
                    411(c)) preceding paragraph (1), in paragraphs (3) and
                    (6) of section 211(c), and in the matter following
                    paragraph (6) of section 211(c),
                        (G) in subsections (d), (e), and (h)(1)(B) of
                    section 211 (42 U.S.C. 411),
                        (H) in section 216(j) (42 U.S.C. 416(j)),
                        (I) in section 218(e)(3) (42 U.S.C. 418(e)(3)),
                        (J) in section 229(b) (42 U.S.C. 429(b)),
                        (K) in section 230(c) (42 U.S.C. 430(c)), and
                        (L) in section 232 (42 U.S.C. 432),
            by striking ``1954'' each place it appears and inserting
            ``1986''.
        (d) Rules of Construction.--
                (1) The preceding provisions of this section shall be
            construed only as technical and clerical corrections and as
            reflecting the original intent of the provisions amended
            thereby.
                (2) Any reference in title II of the Social Security Act to
            the Internal Revenue Code of 1986 shall be construed to include
            a reference to the Internal Revenue Code of 1954 to the extent
            necessary to carry out the provisions of paragraph (1).
        (e) Utilization of National Average Wage Index for Wage-Based
    Adjustments.--
                (1) Definition of national average wage index.--Section
            209(k) of the Social Security Act (42 U.S.C. 409(k)) is
            amended--
                        (A) by redesignating paragraph (2) as paragraph
                    (3);
                        (B) in paragraph (3) (as redesignated), by striking
                    ``paragraph (1)'' and inserting ``this subsection'';
                    and
                        (C) by striking paragraph (1) and inserting the
                    following new paragraphs:
        ``(k)(1) For purposes of sections 203(f)(8)(B)(ii), 213(d)(2)(B),
    215(a)(1)(B)(ii), 215(a)(1)(C)(ii), 215(a)(1)(D), 215(b)(3)(A)(ii),
    215(i)(1)(E), 215(i)(2)(C)(ii), 224(f)(2)(B), and 230(b)(2) (and
    230(b)(2) as in effect immediately prior to the enactment of the Social
    Security Amendments of 1977), the term `national average wage index'
    for any particular calendar year means, subject to regulations of the
    Secretary under paragraph (2), the average of the total wages for such
    particular calendar year.
        ``(2) The Secretary shall prescribe regulations under which the
    national average wage index for any calendar year shall be computed--
                ``(A) on the basis of amounts reported to the Secretary of
            the Treasury or his delegate for such year,
                ``(B) by disregarding the limitation on wages specified in
            subsection (a)(1),
                ``(C) with respect to calendar years after 1990, by
            incorporating deferred compensation amounts and factoring in
            for such years the rate of change from year to year in such
            amounts, in a manner consistent with the requirements of
            section 10208 of the Omnibus Budget Reconciliation Act of 1989,
            and
                ``(D) with respect to calendar years before 1978, in a
            manner consistent with the manner in which the average of the
            total wages for each of such calendar years was determined as
            provided by applicable law as in effect for such years.''.
                (2) Conforming amendments.--
                        (A) Section 203(f)(8)(B)(ii) of such Act (42 U.S.C.
                    403(f)(8)(B)(ii)) is amended by striking ``deemed
                    average total wages'' each place it appears and
                    inserting ``national average wage index''.
                        (B) Section 213(d)(2)(B) of such Act (42 U.S.C.
                    413(d)(2)(B)) is amended by striking ``deemed average
                    total wages'' and inserting ``national average wage
                    index'', and by striking ``the average of the total
                    wages'' and all that follows and inserting ``the
                    national average wage index (as so defined) for
                    1976,''.
                        (C) Section 215(a)(1)(B)(ii) of such Act (42 U.S.C.
                    415(a)(1)(B)(ii)) is amended--
                                (i) in subclause (I), by striking ``deemed
                            average total wages'' and inserting ``national
                            average wage index''; and
                                (ii) in subclause (II), by striking ``the
                            average of the total wages'' and all that
                            follows and inserting ``the national average
                            wage index (as so defined) for 1977.''.
                        (D) Section 215(a)(1)(C)(ii) of such Act (42 U.S.C.
                    415(a)(1)(C)(ii)) is amended by striking ``deemed
                    average total wages'' and inserting ``national average
                    wage index''.
                        (E) Section 215(a)(1)(D) of such Act (42 U.S.C.
                    415(a)(1)(D)) is amended--
                                (i) by striking ``after 1978'';
                                (ii) by striking ``and the average of the
                            total wages (as described in subparagraph
                            (B)(ii)(I))'' and inserting ``and the national
                            average wage index (as defined in section
                            209(k)(1))''; and
                                (iii) by striking the last sentence.
                        (F) Section 215(b)(3)(A)(ii) of such Act (42 U.S.C.
                    415(b)(3)(A)(ii)) is amended by striking ``deemed
                    average total wages'' each place it appears and
                    inserting ``national average wage index''.
                        (G) Section 215(i)(1) of such Act (42 U.S.C.
                    415(i)(1)) is amended--
                                (i) in subparagraph (E), by striking ``SSA
                            average wage index'' and inserting ``national
                            average wage index (as defined in section
                            209(k)(1))''; and
                                (ii) by striking subparagraph (G) and
                            redesignating subparagraph (H) as subparagraph
                            (G).
                        (H) Section 215(i)(2)(C)(ii) of such Act (42 U.S.C.
                    415(i)(1)(C)(ii)) is amended to read as follows:
        ``(ii) The Secretary shall determine and promulgate the OASDI fund
    ratio for the current calendar year on or before November 1 of the
    current calendar year, based upon the most recent data then available.
    The Secretary shall include a statement of the fund ratio and the
    national average wage index (as defined in section 209(k)(1)) and a
    statement of the effect such ratio and the level of such index may have
    upon benefit increases under this subsection in any notification made
    under clause (i) and any determination published under subparagraph
    (D).''.
                        (I) Section 224(f)(2) of such Act (42 U.S.C.
                    424a(f)(2)) is amended--
                                (i) in subparagraph (A), by adding ``and''
                            at the end;
                                (ii) by striking subparagraph (C); and
                                (iii) by striking subparagraph (B) and
                            inserting the following:
                ``(B) the ratio of (i) the national average wage index (as
            defined in section 209(k)(1)) for the calendar year before the
            year in which such redetermination is made to (ii) the national
            average wage index (as so defined) for the calendar year before
            the year in which the reduction was first computed (but not
            counting any reduction made in benefits for a previous period
            of disability).''.
                        (J) Section 230(b)(2) of such Act (42 U.S.C.
                    430(b)(2)) is amended by striking ``deemed average
                    total wages'' each place it appears and inserting
                    ``national average wage index''.
                        (K) Section 230(d) of such Act (42 U.S.C. 430(d))
                    is amended by striking ``deemed average total wage''
                    and inserting ``national average wage index''.

    SEC. 13018. CROSS-MATCHING OF SOCIAL SECURITY ACCOUNT NUMBER
                  INFORMATION AND EMPLOYER IDENTIFICATION NUMBER
                  INFORMATION MAINTAINED BY THE DEPARTMENT OF AGRICULTURE.

        (a) Social Security Account Number Information.--Clause (iii) of
    section 205(c)(2)(C) of the Social Security Act (42 U.S.C.
    405(c)(2)(C)) (as added by section 1735(a)(3) of the Food, Agriculture,
    Conservation, and Trade Act of 1990 (Public Law 101-624; 104 Stat.
    3791)) is amended--
                (1) by inserting ``(I)'' after ``(iii)''; and
                (2) by striking ``The Secretary of Agriculture shall
            restrict'' and all that follows and inserting the following:
        ``(II) The Secretary of Agriculture may share any information
    contained in any list referred to in subclause (I) with any other
    agency or instrumentality of the United States which otherwise has
    access to social security account numbers in accordance with this
    subsection or other applicable Federal law, except that the Secretary
    of Agriculture may share such information only to the extent that such
    Secretary determines such sharing would assist in verifying and
    matching such information against information maintained by such other
    agency or instrumentality. Any such information shared pursuant to this
    subclause may be used by such other agency or instrumentality only for
    the purpose of effective administration and enforcement of the Food
    Stamp Act of 1977 or for the purpose of investigation of violations of
    other Federal laws or enforcement of such laws.
        ``(III) The Secretary of Agriculture, and the head of any other
    agency or instrumentality referred to in this subclause, shall
    restrict, to the satisfaction of the Secretary of Health and Human
    Services, access to social security account numbers obtained pursuant
    to this clause only to officers and employees of the United States
    whose duties or responsibilities require access for the purposes
    described in subclause (II).
        ``(IV) The Secretary of Agriculture, and the head of any agency or
    instrumentality with which information is shared pursuant to clause
    (II), shall provide such other safeguards as the Secretary of Health
    and Human Services determines to be necessary or appropriate to protect
    the confidentiality of the social security account numbers.''.
        (b) Employer Identification Number Information.--Subsection (f) of
    section 6109 of the Internal Revenue Code of 1986 (as added by section
    1735(c) of the Food, Agriculture, Conservation, and Trade Act of 1990
    (Public Law 101-624; 104 Stat. 3792)) (relating to access to employer
    identification numbers by Secretary of Agriculture for purposes of Food
    Stamp Act of 1977) is amended--
                (1) by striking paragraph (2) and inserting the following:
                ``(2) Sharing of information and safeguards.--
                        ``(A) Sharing of information.--The Secretary of
                    Agriculture may share any information contained in any
                    list referred to in paragraph (1) with any other agency
                    or instrumentality of the United States which otherwise
                    has access to employer identification numbers in
                    accordance with this section or other applicable
                    Federal law, except that the Secretary of Agriculture
                    may share such information only to the extent that such
                    Secretary determines such sharing would assist in
                    verifying and matching such information against
                    information maintained by such other agency or
                    instrumentality. Any such information shared pursuant
                    to this subparagraph may be used by such other agency
                    or instrumentality only for the purpose of effective
                    administration and enforcement of the Food Stamp Act of
                    1977 or for the purpose of investigation of violations
                    of other Federal laws or enforcement of such laws.
                        ``(B) Safeguards.--The Secretary of Agriculture,
                    and the head of any other agency or instrumentality
                    referred to in subparagraph (A), shall restrict, to the
                    satisfaction of the Secretary of the Treasury, access
                    to employer identification numbers obtained pursuant to
                    this subsection only to officers and employees of the
                    United States whose duties or responsibilities require
                    access for the purposes described in subparagraph (A).
                    The Secretary of Agriculture, and the head of any
                    agency or instrumentality with which information is
                    shared pursuant to subparagraph (A), shall provide such
                    other safeguards as the Secretary of the Treasury
                    determines to be necessary or appropriate to protect
                    the confidentiality of the employer identification
                    numbers.'';
                (2) in paragraph (3), by striking ``by the Secretary of
            Agriculture pursuant to this subsection'' and inserting
            ``pursuant to this subsection by the Secretary of Agriculture
            or the head of any agency or instrumentality with which
            information is shared pursuant to paragraph (2)'', and by
            striking ``social security account numbers'' and inserting
            ``employer identification numbers''; and
                (3) in paragraph (4), by striking ``by the Secretary of
            Agriculture pursuant to this subsection'' and inserting
            ``pursuant to this subsection by the Secretary of Agriculture
            or any agency or instrumentality with which information is
            shared pursuant to paragraph (2)''.

    SEC. 13019. PROHIBITION OF MISUSE OF DEPARTMENT OF THE TREASURY NAMES,
                  SYMBOLS, ETC.

        (a) General Rule.--Subchapter II of chapter 3 of title 31, United
    States Code, is amended by adding at the end thereof the following new
    section:
    ``Sec. 333. Prohibition of misuse of Department of the Treasury names,
                  symbols, etc.
        ``(a) General Rule.--No person may use, in connection with, or as a
    part of, any advertisement, solicitation, business activity, or
    product, whether alone or with other words, letters, symbols, or
    emblems--
                ``(1) the words `Department of the Treasury', or the name
            of any service, bureau, office, or other subdivision of the
            Department of the Treasury,
                ``(2) the titles `Secretary of the Treasury' or `Treasurer
            of the United States' or the title of any other officer or
            employee of the Department of the Treasury,
                ``(3) the abbreviations or initials of any entity referred
            to in paragraph (1),
                ``(4) the words `United States Savings Bond' or the name of
            any other obligation issued by the Department of the Treasury,
                ``(5) any symbol or emblem of an entity referred to in
            paragraph (1) (including the design of any envelope or
            stationary used by such an entity), and
                ``(6) any colorable imitation of any such words, titles,
            abbreviations, initials, symbols, or emblems,
    in a manner which could reasonably be interpreted or construed as
    conveying the false impression that such advertisement, solicitation,
    business activity, or product is in any manner approved, endorsed,
    sponsored, or authorized by, or associated with, the Department of the
    Treasury or any entity referred to in paragraph (1) or any officer or
    employee thereof.
        ``(b) Treatment of Disclaimers.--Any determination of whether a
    person has violated the provisions of subsection (a) shall be made
    without regard to any use of a disclaimer of affiliation with the
    United States Government or any particular agency or instrumentality
    thereof.
        ``(c) Civil Penalty.--
                ``(1) In general.--The Secretary of the Treasury may impose
            a civil penalty on any person who violates the provisions of
            subsection (a).
                ``(2) Amount of penalty.--The amount of the civil penalty
            imposed by paragraph (1) shall not exceed $5,000 for each use
            of any material in violation of subsection (a). If such use is
            in a broadcast or telecast, the preceding sentence shall be
            applied by substituting `$25,000' for `$5,000'.
                ``(3) Time limitations.--
                        ``(A) Assessments.--The Secretary of the Treasury
                    may assess any civil penalty under paragraph (1) at any
                    time before the end of the 3-year period beginning on
                    the date of the violation with respect to which such
                    penalty is imposed.
                        ``(B) Civil action.--The Secretary of the Treasury
                    may commence a civil action to recover any penalty
                    imposed under this subsection at any time before the
                    end of the 2-year period beginning on the date on which
                    such penalty was assessed.
                ``(4) Coordination with subsection (d).--No penalty may be
            assessed under this subsection with respect to any violation
            after a criminal proceeding with respect to such violation has
            been commenced under subsection (d).
        ``(d) Criminal Penalty.--
                ``(1) In general.--If any person knowingly violates
            subsection (a), such person shall, upon conviction thereof, be
            fined not more than $10,000 for each such use or imprisoned not
            more than 1 year, or both. If such use is in a broadcast or
            telecast, the preceding sentence shall be applied by
            substituting `$50,000' for `$10,000'.
                ``(2) Time limitations.--No person may be prosecuted,
            tried, or punished under paragraph (1) for any violation of
            subsection (a) unless the indictment is found or the
            information instituted during the 3-year period beginning on
            the date of the violation.
                ``(3) Coordination with subsection (c).--No criminal
            proceeding may be commenced under this subsection with respect
            to any violation if a civil penalty has previously been
            assessed under subsection (c) with respect to such violation.''
        (b) Clerical Amendment.--The analysis for chapter 3 of title 31,
    United States Code, is amended by adding after the item relating to
    section 332 the following new item:

    ``333. Prohibition of misuse of Department of the Treasury names,
                                symbols, etc.''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act.
        (d) Report.--Not later than May 1, 1995, the Secretary of the
    Treasury shall submit a report to the Committee on Ways and Means of
    the House of Representatives and the Committee on Finance of the Senate
    on the implementation of the amendments made by this section. Such
    report shall include the number of cases in which the Secretary has
    notified persons of violations of section 333 of title 31, United
    States Code (as added by subsection (a)), the number of prosecutions
    commenced under such section, and the total amount of the penalties
    collected in such prosecutions.

    SEC. 13020. AVAILABILITY AND USE OF DEATH INFORMATION UNDER THE OLD-
                  AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM.

        (a) Improvements in Program for Use of Death Certificates to
    Correct Program Information.--
                (1) Elimination of state restrictions on use of
            information.--Section 205(r)(1) of the Social Security Act (42
            U.S.C. 405(r)(1)) is amended by adding at the end, after and
            below subparagraph (B), the following new sentence:
    ``Any contract entered into pursuant to subparagraph (A) shall not
    include any restriction on the use of information obtained by the
    Secretary pursuant to such contract, except to the extent that such use
    may be restricted under paragraph (6).''.
                (2) Information provided to state agencies free of
            charge.--
                        (A) In general.--Section 205(r)(4) of such Act (42
                    U.S.C. 405(r)(4)) is amended to read as follows:
        ``(4)(A) In the case of individuals with respect to whom federally
    funded benefits are provided by (or through) a State agency other than
    under this Act, the Secretary shall to the extent feasible provide such
    information free of charge through a cooperative arrangement with such
    agency, for ensuring proper payment of those benefits with respect to
    such individuals, if such arrangement does not conflict with the duties
    of the Secretary under paragraph (1).
        ``(B) The Secretary may enter into similar agreements with States
    to provide information free of charge for their use in programs wholly
    funded by the States if such arrangement does not conflict with the
    duties of the Secretary under paragraph (1).''.
                        (B) Conforming amendment.--Section 205(r)(3) of
                    such Act (42 U.S.C. 405(r)(3)) is amended by striking
                    ``or State''.
                (3) Use by states of social security account numbers
            contingent upon participation in program.--Section 205(r)(2) of
            such Act (42 U.S.C. 405(r)(2)) is amended--
                        (A) by inserting ``(A)'' after ``(2)''; and
                        (B) by adding at the end the following new
                    subparagraph:
        ``(B) Notwithstanding section 7(a)(2)(B) of the Privacy Act of 1974
    and clauses (i) and (v) of subsection (c)(2)(C) of this section, any
    State which is not a party to a contract with the Secretary meeting the
    requirements of paragraph (1) (and any political subdivision thereof)
    may not utilize an individual's social security account number in the
    administration of any driver's license or motor vehicle registration
    law.''.
        (b) Study Regarding Improvements in Gathering and Reporting of
    Death Information.
                (1) In general.--As soon as practicable after the date of
            the enactment of this Act, the Secretary of Health and Human
            Services shall conduct a study of possible improvements in the
            current methods of gathering and reporting death information by
            the Federal, State, and local governments which would result in
            more efficient and expeditious handling of such information.
                (2) Specific matters to be studied.--In carrying out the
            study required under this subsection, the Secretary shall--
                        (A) ascertain the delays in the receipt of death
                    information which are currently encountered by the
                    Social Security Administration and other agencies in
                    need of such information on a regular basis,
                        (B) analyze the causes of such delays,
                        (C) develop alternative options for improving
                    Federal, State, and local agency cooperation in
                    reducing such delays, and
                        (D) evaluate the costs and benefits associated with
                    the options referred to in subparagraph (C).
                (3) Report.--Not later than June 1, 1994, the Secretary
            shall submit a written report to the Committee on Ways and
            Means of the House of Representatives and the Committee on
            Finance of the Senate setting forth the results of the study
            conducted pursuant to this subsection, together with such
            administrative and legislative recommendations as the Secretary
            may consider appropriate.
        (c) Effective Date.--
                (1) In general.--The amendments made by subsection (a)
            shall take effect 1 year after the date of the enactment of
            this Act.
                (2) Promotion of entry into new contracts.--As soon as
            practicable after the date of the enactment of this Act, the
            Secretary of Health and Human Services shall take such actions
            as are necessary and appropriate to promote entry into
            contracts under section 205(r) of the Social Security Act which
            are in compliance with the requirements of the amendments made
            by subsection (a).

                     Subtitle B--Human Resources Amendments

    SEC. 13201. TABLE OF CONTENTS.

        The table of contents of this subtitle is as follows:

                     Subtitle B--Human Resources Amendments

    Sec. 13201. Table of contents.
    Sec. 13202. References.
    Chapter 1--Child Welfare Services, Foster Care, and Adoption Assistance

    Sec. 13211. Entitlement funding for services designed to strengthen and
                                preserve families.
    Sec. 13212. Grants for State courts to assess and improve handling of
                                proceedings relating to foster care and
                                adoption.
    Sec. 13213. Required protections for foster children.
    Sec. 13214. States required to report on measures taken to comply with
                                the Indian Child Welfare Act.
    Sec. 13215. Child welfare traineeships.
    Sec. 13216. Dissolved adoptions.
    Sec. 13217. Time frame for judicial determinations on voluntary
                                placements.
    Sec. 13218. Study of reasonable efforts.
    Sec. 13219. Enhanced match for automated data systems.
    Sec. 13220. Periodic reevaluation of foster care maintenance payments.
    Sec. 13221. Dispositional hearing.
    Sec. 13222. Health care plans for foster children.
    Sec. 13223. Independent living.
    Sec. 13224. Elimination of foster care ceilings and of authority to
                                transfer unused foster care funds to child
                                welfare services programs.
    Sec. 13225. Training of agency staff and foster and adoptive parents.
    Sec. 13226. On-site reviews and audits of State claims for foster care
                                and adoption assistance.
    Sec. 13227. Conformity reviews.
    Sec. 13228. Repeal of annual report on voluntary placement.
    Sec. 13229. Demonstration projects.
    Sec. 13230. Placement accountability.
    Sec. 13231. Payments of State claims for foster care and adoption
                                assistance.
    Sec. 13232. Moratorium on collection of disallowances.
    Sec. 13233. Border region child welfare worker training demonstration.
    Sec. 13234. Effect of failure to carry out State plan.
                      Chapter 2--Child Support Enforcement

    Sec. 13241. State paternity establishment programs.
    Sec. 13242. Enforcement of health insurance support.
    Sec. 13243. Reports to credit bureaus on persons delinquent in child
                                support payments.
                    Chapter 3--Supplemental Security Income

    Sec. 13251. Fees for Federal administration of State supplementary
                                payments.
    Sec. 13252. Exclusion from income of State relocation assistance.
    Sec. 13253. Prevention of adverse effects on eligibility for, and
                                amount of, benefits when spouse or parent
                                of beneficiary is absent from the household
                                due to active military service.
    Sec. 13254. Eligibility for children of Armed Forces personnel residing
                                outside the United States other than in
                                foreign countries.
    Sec. 13255. Definition of disability for children under age 18 applied
                                to all individuals under age 18.
    Sec. 13256. Valuation of certain in-kind support and maintenance when
                                there is a cost of living adjustment in
                                benefits.
    Sec. 13257. Exclusion from income of certain amounts received by
                                Indians from interests held in trust.
               Chapter 4--Aid To Families With Dependent Children

    Sec. 13261. 50 percent Federal match of State administrative costs.
    Sec. 13262. Delay in effective date of penalty for failure to meet
                                required participation rate for unemployed
                                parents in the JOBS program.
    Sec. 13263. Report to the Congress with respect to performance
                                standards in the JOBS program.
    Sec. 13264. Measurement and reporting of welfare participation.
    Sec. 13265. New Hope demonstration project.
    Sec. 13266. Delay in requirement that outlying areas operate an AFDC-UP
                                program.
    Sec. 13267. Adult in family or household allowed to attest to
                                citizenship status of family or household
                                members.
    Sec. 13268. Increase in stepparent income disregard.
    Sec. 13269. Extension of New York State child support demonstration
                                program.
    Sec. 13270. Early childhood development projects.
                       Chapter 5--Unemployment Insurance

    Sec. 13271. Treatment of short-time compensation programs.
    Sec. 13272. Technical amendment to Unemployment Trust Fund.
    Sec. 13273. Extension of reporting date for advisory council.
    Sec. 13274. Clarification of emergency unemployment benefits
                                provisions.
    Sec. 13275. Modifications to extended unemployment program.
    Sec. 13276. Extension of current Federal unemployment rate.
    Sec. 13277. Disclosure of information to Railroad Retirement Board.
                        Chapter 6--Technical Provisions

    Sec. 13281. Corrections related to the income security and human
                                resources provisions of the Omnibus Budget
                                Reconciliation Act of 1990.
    Sec. 13282. Technical corrections related to the human resource and
                                income security provisions of the Omnibus
                                Budget Reconciliation Act of 1989.
    Sec. 13283. Elimination of obsolete provisions relating to treatment of
                                the earned income tax credit.
    Sec. 13284. Redesignation of certain provisions.

    SEC. 13202. REFERENCES.

        Except as otherwise expressly provided, wherever in this subtitle
    an amendment or repeal is expressed in terms of an amendment to, or
    repeal of, a section or other provision, the reference shall be
    considered to be made to a section or other provision of the Social
    Security Act.

    CHAPTER 1--CHILD WELFARE SERVICES, FOSTER CARE, AND ADOPTION ASSISTANCE

    SEC. 13211. ENTITLEMENT FUNDING FOR SERVICES DESIGNED TO STRENGTHEN AND
                  PRESERVE FAMILIES.

        (a) In General.--Part B of title IV (42 U.S.C. 620-628) is
    amended--
                (1) by striking the heading and inserting the following:

                      ``PART B--CHILD AND FAMILY SERVICES

                   ``Subpart 1--Child Welfare Services''; and

                (2) by adding at the end the following:

             ``Subpart 2--Family Preservation and Support Services

    ``SEC. 430. PURPOSES; LIMITATIONS ON AUTHORIZATIONS OF APPROPRIATIONS;
                  RESERVATION OF CERTAIN AMOUNTS.

        ``(a) Purposes; Limitations on Authorization of Appropriations.--
    For the purpose of encouraging and enabling each State to develop and
    establish, or expand, and to operate a program of family preservation
    services and community-based family support services, there are
    authorized to be appropriated to the Secretary--
                ``(1) $60,000,000 for fiscal year 1994;
                ``(2) $135,000,000 for fiscal year 1995;
                ``(3) $240,000,000 for fiscal year 1996;
                ``(4) $360,000,000 for fiscal year 1997; and
                ``(5) $600,000,000 for fiscal year 1998.
        ``(b) Reservation of Certain Amounts.--
                ``(1) Evaluation, research, training, and technical
            assistance.--The Secretary shall reserve 1 percent of the
            amount appropriated pursuant to subsection (a) for each fiscal
            year, for expenditure by the Secretary for evaluation,
            research, training, and technical assistance related to the
            program under this subpart.
                ``(2) State court assessments.--The Secretary shall reserve
            $5,000,000 of the amount appropriated pursuant to subsection
            (a) for fiscal year 1995, and $10,000,000 of the amount so
            appropriated for each of fiscal years 1996, 1997, and 1998, for
            grants under section 13212 of the Omnibus Budget Reconciliation
            Act of 1993.
                ``(3) Indian tribes.--The Secretary shall reserve 1 percent
            of the amount appropriated pursuant to subsection (a) for each
            fiscal year, for allotment to Indian tribes in accordance with
            section 433(a).

    ``SEC. 431. DEFINITIONS.

        ``(a) In General.--As used in this subpart:
                ``(1) Family preservation services.--The term `family
            preservation services' means services for children and families
            designed to help families (including adoptive and extended
            families) at risk or in crisis, including--
                        ``(A) service programs designed to help children--
                                ``(i) where appropriate, return to families
                            from which they have been removed; or
                                ``(ii) be placed for adoption, with a legal
                            guardian, or, if adoption or legal guardianship
                            is determined not to be appropriate for a
                            child, in some other planned, permanent living
                            arrangement;
                        ``(B) preplacement preventive services programs,
                    such as intensive family preservation programs,
                    designed to help children at risk of foster care
                    placement remain with their families;
                        ``(C) service programs designed to provide followup
                    care to families to whom a child has been returned
                    after a foster care placement;
                        ``(D) respite care of children to provide temporary
                    relief for parents and other caregivers (including
                    foster parents); and
                        ``(E) services designed to improve parenting skills
                    (by reinforcing parents' confidence in their strengths,
                    and helping them to identify where improvement is
                    needed and to obtain assistance in improving those
                    skills) with respect to matters such as child
                    development, family budgeting, coping with stress,
                    health, and nutrition.
                ``(2) Family support services.--The term `family support
            services' means community-based services to promote the well-
            being of children and families designed to increase the
            strength and stability of families (including adoptive, foster,
            and extended families), to increase parents' confidence and
            competence in their parenting abilities, to afford children a
            stable and supportive family environment, and otherwise to
            enhance child development, including--
                        ``(A) services described in paragraph (1)(E);
                        ``(B) respite care of children to provide temporary
                    relief for parents and other caregivers;
                        ``(C) structured activities involving parents and
                    children to strengthen the parent-child relationship;
                        ``(D) drop-in centers to afford families
                    opportunities for informal interaction with other
                    families and with program staff;
                        ``(E) information and referral services to afford
                    families access to other community services, including
                    child care, health care, nutrition programs, adult
                    education and literacy programs, and counseling and
                    mentoring services; and
                        ``(F) early developmental screening of children to
                    assess the needs of such children, and assistance to
                    families in securing specific services to meet these
                    needs.
                ``(3) State agency.--The term `State agency' means the
            State agency responsible for administering the program under
            subpart 1.
                ``(4) State.--The term `State' includes an Indian tribe or
            tribal organization, in addition to the meaning given such term
            for purposes of subpart 1.
                ``(5) Tribal organization.--The term `tribal organization'
            means the recognized governing body of any Indian tribe.
                ``(6) Indian tribe.--The term `Indian tribe' means any
            Indian tribe (as defined in section 482(i)(5)) and any Alaska
            Native organization (as defined in section 482(i)(7)(A)).
        ``(b) Other Terms.--For other definitions of other terms used in
    this subpart, see section 475.

    ``SEC. 432. STATE PLANS.

        ``(a) Plan Requirements.--A State plan meets the requirements of
    this subsection if the plan--
                ``(1) provides that the State agency shall administer, or
            supervise the administration of, the State program under this
            subpart;
                ``(2)(A)(i) sets forth the goals intended to be
            accomplished under the plan by the end of the 5th fiscal year
            in which the plan is in operation in the State, and (ii) is
            updated periodically to set forth the goals intended to be
            accomplished under the plan by the end of each 5th fiscal year
            thereafter;
                ``(B) describes the methods to be used in measuring
            progress toward accomplishment of the goals;
                ``(C) contains a commitment that the State--
                        ``(i) after the end of each of the 1st 4 fiscal
                    years covered by a set of goals, will perform an
                    interim review of progress toward accomplishment of the
                    goals, and on the basis of the interim review will
                    revise the statement of goals in the plan, if
                    necessary, to reflect changed circumstances; and
                        ``(ii) after the end of the last fiscal year
                    covered by a set of goals, will perform a final review
                    of progress toward accomplishment of the goals, and on
                    the basis of the final review (I) will prepare,
                    transmit to the Secretary, and make available to the
                    public a final report on progress toward accomplishment
                    of the goals, and (II) will develop (in consultation
                    with the entities required to be consulted pursuant to
                    subsection (b)) and add to the plan a statement of the
                    goals intended to be accomplished by the end of the 5th
                    succeeding fiscal year;
                ``(3) provides for coordination, to the extent feasible and
            appropriate, of the provision of services under the plan and
            the provision of services or benefits under other Federal or
            federally assisted programs serving the same populations;
                ``(4) contains assurances that not less than 90 percent of
            expenditures under the plan for any fiscal year with respect to
            which the State is eligible for payment under section 433 for
            the fiscal year shall be for services for children and
            families, and that significant portions of such 90 percent
            shall be expended--
                        ``(A) for family preservation services; and
                        ``(B) for community-based family support services;
                ``(5) provides that, by the beginning of the 6th fiscal
            year during which the plan is in effect, programs under the
            plan shall be available on a statewide basis, to the extent
            feasible and appropriate;
                ``(6) contains assurances that the State will--
                        ``(A) annually prepare, furnish to the Secretary,
                    and make available to the public a description
                    (including separate descriptions with respect to family
                    preservation services and community-based family
                    support services) of--
                                ``(i) the service programs to be made
                            available under the plan in the immediately
                            succeeding fiscal year;
                                ``(ii) the populations which the programs
                            will serve; and
                                ``(iii) the geographic areas in the State
                            in which the services will be available; and
                        ``(B) perform the activities described in
                    subparagraph (A)--
                                ``(i) in the case of the 1st fiscal year
                            under the plan, at the time the State submits
                            its initial plan; and
                                ``(ii) in the case of each succeeding
                            fiscal year, by the end of the 3rd quarter of
                            the immediately preceding fiscal year;
                ``(7) provides for such methods of administration as the
            Secretary finds to be necessary for the proper and efficient
            operation of the plan;
                ``(8)(A) contains assurances that Federal funds provided to
            the State under this subpart will not be used to supplant
            Federal or non-Federal funds for existing services and
            activities which promote the purposes of this subpart; and
                ``(B) provides that the State will furnish reports to the
            Secretary, at such times, in such format, and containing such
            information as the Secretary may require, that demonstrate the
            State's compliance with the prohibition contained in
            subparagraph (A); and
                ``(9) provides that the State agency will furnish such
            reports, containing such information, and participate in such
            evaluations, as the Secretary may require.
        ``(b) Approval of Plans.--
                ``(1) In general.--The Secretary shall approve a plan that
            meets the requirements of subsection (a) only if the plan was
            developed jointly by the Secretary and the State, after
            consultation by the State agency with appropriate public and
            nonprofit private agencies and community-based organizations
            with experience in administering programs of services for
            children and families (including family preservation and family
            support services).
                ``(2) Plans of indian tribes exempted from inappropriate
            requirements.--The Secretary may exempt a plan submitted by an
            Indian tribe from any requirement of this section that the
            Secretary determines would be inappropriate to apply to the
            Indian tribe, taking into account the resources, needs, and
            other circumstances of the Indian tribe.

    ``SEC. 433. ALLOTMENTS TO STATES.

        ``(a) Indian Tribes.--
                ``(1) In general.--From the amount reserved pursuant to
            section 430(b)(3), the Secretary shall allot to each Indian
            tribe with a plan approved under this subpart (except as
            provided in paragraph (2) of this subsection) an amount that
            bears the same ratio to such reserved amount as the number of
            children in the Indian tribe bears to the total number of
            children in all Indian tribes with State plans so approved, as
            determined by the Secretary on the basis of the most current
            and reliable information available to the Secretary.
                ``(2) Special rule.--The Secretary may not allot funds to
            an Indian tribe with a plan approved under this subpart whose
            allotment (but for this paragraph) would be less than $10,000
            if allotments were made under paragraph (1) to all Indian
            tribes with plans approved under this subpart with the same or
            larger numbers of children.
        ``(b) Territories.--From the amount appropriated pursuant to
    section 430 that remains after applying section 430(b) for each fiscal
    year, the Secretary shall allot to each of the jurisdictions of Puerto
    Rico, Guam, the Virgin Islands, the Northern Mariana Islands, and
    American Samoa an amount determined in the same manner as the allotment
    to each of such jurisdictions is determined under section 421.
        ``(c) Other States.--
                ``(1) In general.--From the amount appropriated pursuant to
            section 430 that remains after applying section 430(b) and
            subsection (b) of this section for each fiscal year, the
            Secretary shall allot to each State (other than an Indian
            tribe) which is not specified in subsection (b) of this section
            an amount equal to such remaining amount multiplied by the food
            stamp percentage of the State for the fiscal year.
                ``(2) Food stamp percentage defined.--
                        ``(A) In general.--As used in paragraph (1) of this
                    subsection, the term `food stamp percentage' means,
                    with respect to a State and a fiscal year, the average
                    monthly number of children receiving food stamp
                    benefits in the State for months in the 3 fiscal years
                    referred to in subparagraph (B) of this paragraph, as
                    determined from sample surveys made under section 16(c)
                    of the Food Stamp Act of 1977, expressed as a
                    percentage of the average monthly number of children
                    receiving food stamp benefits in the States described
                    in such paragraph (1) for months in such 3 fiscal
                    years, as so determined.
                        ``(B) Fiscal years used in calculation.--For
                    purposes of the calculation pursuant to subparagraph
                    (A), the Secretary shall use data for the 3 most recent
                    fiscal years, preceding the fiscal year for which the
                    State's allotment is calculated under this subsection,
                    for which such data are available to the Secretary.

    ``SEC. 434. PAYMENTS TO STATES.

        ``(a) Entitlement.--
                ``(1) General rule.--Except as provided in paragraph (2) of
            this subsection, each State which has a plan approved under
            this subpart shall be entitled to payment of the lesser of--
                        ``(A) 75 percent of the total cost of activities
                    under the plan during the fiscal year or the
                    immediately succeeding fiscal year; or
                        ``(B) the allotment of the State under section 433
                    for the fiscal year.
                ``(2) Special rule.--Upon submission by a State to the
            Secretary during fiscal year 1994 of an application in such
            form and containing such information as the Secretary may
            require (including, if the State is seeking payment of an
            amount pursuant to subparagraph (B) of this paragraph, a
            description of the services to be provided with the amount),
            the State shall be entitled to payment of an amount equal to
            the sum of--
                        ``(A) such amount not exceeding $1,000,000 as the
                    State may require to develop and submit a plan for
                    approval under section 432; and
                        ``(B) an amount equal to the lesser of--
                                ``(i) 75 percent of the cost of State
                            services to children and families provided in
                            accordance with section 432(a)(4); or
                                ``(ii) the allotment of the State under
                            section 433 for fiscal year 1994, reduced by
                            any amount paid to the State pursuant to
                            subparagraph (A) of this paragraph.
        ``(b) Prohibitions.--
                ``(1) No use of other federal funds for state match.--Each
            State receiving an amount paid under paragraph (1) or (2)(B) of
            subsection (a) may not expend any Federal funds to meet the
            costs of services described in this subpart not covered by the
            amount so paid.
                ``(2) Availability of funds.--
                        ``(A) In general.--A State may not expend any
                    amount paid under subsection (a)(1) for any fiscal year
                    after the end of the immediately succeeding fiscal
                    year.
                        ``(B) Plan development.--A State may not expend any
                    amount paid under subsection (a)(2) after the end of
                    fiscal year 1994.
        ``(c) Direct Payments to Tribal Organizations of Indian Tribes.--
    The Secretary shall pay any amount to which an Indian tribe is entitled
    under this section directly to the tribal organization of the Indian
    tribe.

    ``SEC. 435. EVALUATIONS; REPORT.

        ``(a) Evaluations.--
                ``(1) In general.--The Secretary shall evaluate the
            effectiveness of the programs carried out pursuant to this
            subpart in accomplishing the purposes of this subpart, in
            accordance with criteria established in accordance with
            paragraph (2).
                ``(2) Criteria to be used.--In developing the criteria to
            be used in evaluations under paragraph (1), the Secretary shall
            consult with appropriate parties, such as--
                        ``(A) State agencies administering programs under
                    this part and part E;
                        ``(B) persons administering child and family
                    services programs (including family preservation and
                    family support programs) for private, nonprofit
                    organizations with an interest in child welfare; and
                        ``(C) other persons with recognized expertise in
                    the evaluation of child and family services programs
                    (including family preservation and family support
                    programs) or other related programs.
        ``(b) Report to the Congress.--Not later than December 31, 1997,
    the Secretary shall submit to the Congress a report containing findings
    with respect to the evaluations required by subsection (a).
        ``(c) Coordination of Evaluations.--The Secretary shall develop
    procedures to coordinate evaluations under this section, to the extent
    feasible, with evaluations by the States of the effectiveness of
    programs under this subpart.''.
        (b) Conforming Amendments.--
                (1) Section 422 (42 U.S.C. 622) is amended--
                        (A) in subsection (a), by striking ``this part''
                    and inserting ``this subpart'';
                        (B) in subsection (b), by striking ``this part''
                    each place such term appears and inserting ``this
                    subpart''; and
                        (C) in subsection (b)(2), by inserting ``under the
                    State plan approved under subpart 2 of this part,''
                    after ``part A of this title,''.
                (2) Section 423(a) (42 U.S.C. 623(a)) is amended by
            striking ``this part'' and inserting ``this subpart''.
                (3) Section 428(a) (42 U.S.C. 628(a)) is amended by
            striking ``this part'' each place such term appears and
            inserting ``this subpart''.
                (4) Section 471(a)(2) (42 U.S.C. 671(a)(2)) is amended by
            inserting ``subpart 1 of'' before ``part B''.
        (c) Effective Date.--The amendments made by this section shall be
    effective with respect to calendar quarters beginning on or after
    October 1, 1993.

    SEC. 13212. GRANTS FOR STATE COURTS TO ASSESS AND IMPROVE HANDLING OF
                  PROCEEDINGS RELATING TO FOSTER CARE AND ADOPTION.

        (a) In General.--The Secretary shall make grants, in accordance
    with this section, to the highest State courts in States participating
    in the program under part E of title IV of the Social Security Act, for
    the purpose of enabling such courts--
                (1) to conduct assessments, in accordance with subsection
            (b), of the role, responsibilities, and effectiveness of State
            courts in carrying out State laws requiring proceedings
            (conducted by or under the supervision of the courts)--
                        (A) to determine the advisability or
                    appropriateness of foster care placement;
                        (B) to determine whether to terminate parental
                    rights; and
                        (C) to legally recognize the adoption of a child;
                    and
                (2) to implement changes deemed necessary as a result of
            the assessments.
        (b) Assessments.--Each assessment conducted with funds provided
    under this section shall--
                (1) identify the requirements imposed on State courts with
            respect to proceedings described in subsection (a), addressing
            separately--
                        (A) rules, standards, and criteria imposed pursuant
                    to State laws (including laws implementing parts B and
                    E of title IV of the Social Security Act, laws relating
                    to child abuse and neglect, or any other laws on
                    related matters) to be applied in determinations with
                    respect to placement of a child, or with respect to
                    related matters concerning the parent-child
                    relationship and the welfare of the child, including
                    determinations--
                                (i) whether to remove a child from or
                            return a child to the home of the child;
                                (ii) whether to place a child in foster
                            care or to continue a foster care placement;
                                (iii) whether to terminate parental rights;
                                (iv) whether to place a child for adoption
                            or in another permanent arrangement; and
                                (v) whether to set aside or to finalize an
                            adoption; and
                        (B) rules and procedures, established by or under
                    State law or adopted by the State court system on its
                    own initiative, with respect to the conduct of such
                    proceedings, that address matters such as--
                                (i) whether a proceeding should be judicial
                            or administrative;
                                (ii) timetables for such proceedings, and
                            determinations of the priority of such
                            proceedings relative to other matters under the
                            jurisdiction of the State courts;
                                (iii) procedural safeguards of the rights
                            of parents (including foster and adoptive
                            parents), guardians, and children, such as
                            provisions for legal representation and for
                            guardians ad litem; and
                                (iv) rules for conduct of the proceeding
                            with respect to matters such as admissible
                            evidence, opportunity to present witnesses, and
                            time limits on the presentation of evidence and
                            the making of arguments;
                (2) evaluate the performance of the State courts in
            implementing the requirements identified under paragraph (1),
            by assessing--
                        (A) the extent to which particular practices or
                    procedures have been successful in facilitating
                    compliance with such requirements;
                        (B) the frequency of failures to comply with any
                    such requirements, and patterns with respect to the
                    circumstances of and factors contributing to the
                    failures; and
                        (C) the extent to which caseload size and resource
                    limitations contribute to the failures identified
                    pursuant to subparagraph (B);
                (3) determine the extent to which the rules and practices
            identified under paragraph (1) or (2) are in accord with
            recommended standards of national organizations concerned with
            permanent placement for foster children;
                (4) determine, from the standpoint of the State courts, the
            extent to which particular requirements under paragraph (1)--
                        (A) are facilitating or impeding achievement of the
                    purposes of such parts B and E, including the goal of
                    appropriate permanent placement for each child; and
                        (B) are imposing significant administrative burdens
                    on the State court system; and
                (5) make specific recommendations for improvement, based on
            the conclusions reached as a result of activities described in
            paragraphs (1) through (4), including recommendations for--
                        (A) changes in Federal or State laws, regulations,
                    or policies;
                        (B) changes in procedures and practices of the
                    State courts and of the State agencies administering
                    foster care, adoption, child welfare, and child
                    protective services programs;
                        (C) additional education or training of State court
                    judges, or of personnel of the judicial system or of
                    the State agencies described in subparagraph (B);
                        (D) collection or dissemination of additional data
                    or information for purposes of increasing the
                    understanding of personnel of State courts and State
                    agencies of matters relating to case review proceedings
                    in general, or to specific case review proceedings; and
                        (E) increases in manpower, reductions in the number
                    of case reviews, or other changes needed to enable the
                    State courts to better manage their caseloads with
                    respect to such proceedings.
        (c) Applications.--In order to be eligible for a grant under this
    section, a highest State court shall submit to the Secretary, at such
    time and in such form as the Secretary may require, an application
    containing--
                (1) a timetable for conducting and completing the
            assessment;
                (2) a budget for the assessment;
                (3) a description of the methods to be used to select State
            courts for inclusion in, and to conduct, the assessment;
                (4) certifications by the head of the State agency
            administering the State program under such part E, and by the
            State foster care citizen review board or State organization of
            such review boards (if any), that such entities have had an
            opportunity to review and comment on a draft of the application
            before its submission, and a copy of such comments;
                (5) a description of the process to be used by the court to
            consult with the entities referred to in paragraph (4) of this
            subsection in conducting the assessment under subsection (b);
                (6) an assurance that, to the extent funds provided under
            this section are not necessary to complete the assessment under
            subsection (b), the court will use such funds to implement, to
            the extent feasible, recommendations made pursuant to
            subsection (b)(5);
                (7) an assurance that funds provided under this section
            will not be used to supplant State or local funds which would
            otherwise be used for similar purposes;
                (8) a commitment to furnish to the Secretary--
                        (A) an interim report following the end of the 2nd
                    year of assessment activities under this section; and
                        (B) a final report following the completion of the
                    assessment; and
                (9) any other information the Secretary may require.
        (d) Allotments.--
                (1) In general.--Each highest State court which has an
            application approved under subsection (c), and is conducting
            assessment activities in accordance with this section, shall be
            entitled to payment, for each of fiscal years 1995 through
            1998, from amounts reserved pursuant to section 430(b)(2) of
            the Social Security Act, of an amount equal to the sum of--
                        (A) for fiscal year 1995, $75,000 plus the amount
                    described in paragraph (2) for fiscal year 1995; and
                        (B) for each of fiscal years 1996 through 1998,
                    $85,000 plus the amount described in paragraph (2) for
                    each of such fiscal years.
                (2) Formula.--The amount described in this paragraph for
            any fiscal year is the amount that bears the same ratio to the
            amount reserved pursuant to section 430(b)(2) of the Social
            Security Act for the fiscal year (reduced by the dollar amount
            specified in paragraph (1) of this subsection for the fiscal
            year) as the number of individuals in the State who have not
            attained 21 years of age bears to the total number of such
            individuals in all States the highest State courts of which
            have approved applications under subsection (c).
        (e) Use of Grant Funds.--Each highest State court which receives
    funds paid under this section may use such funds to pay--
                (1) any or all costs of activities under this section in
            fiscal year 1995; and
                (2) not more than 75 percent of the cost of activities
            under this section in each of fiscal years 1996, 1997, and
            1998.

    SEC. 13213. REQUIRED PROTECTIONS FOR FOSTER CHILDREN.

        (a) In General.--Section 422(b) (42 U.S.C. 622(b)) is amended--
                (1) by striking ``and'' at the end of paragraph (7);
                (2) by striking the period at the end of paragraph (8) and
            inserting ``; and''; and
                (3) by adding at the end the following:
                ``(9) provide assurances that the State--
                        ``(A) since June 17, 1980, has completed an
                    inventory of all children who, before the inventory,
                    had been in foster care under the responsibility of the
                    State for 6 months or more, which determined--
                                ``(i) the appropriateness of, and necessity
                            for, the foster care placement;
                                ``(ii) whether the child could or should be
                            returned to the parents of the child or should
                            be freed for adoption or other permanent
                            placement; and
                                ``(iii) the services necessary to
                            facilitate the return of the child or the
                            placement of the child for adoption or legal
                            guardianship;
                        ``(B) is operating, to the satisfaction of the
                    Secretary--
                                ``(i) a statewide information system from
                            which can be readily determined the status,
                            demographic characteristics, location, and
                            goals for the placement of every child who is
                            (or, within the immediately preceding 12
                            months, has been) in foster care;
                                ``(ii) a case review system (as defined in
                            section 475(5)) for each child receiving foster
                            care under the supervision of the State;
                                ``(iii) a service program designed to help
                            children--
                                        ``(I) where appropriate, return to
                                    families from which they have been
                                    removed; or
                                        ``(II) be placed for adoption, with
                                    a legal guardian, or, if adoption or
                                    legal guardianship is determined not to
                                    be appropriate for a child, in some
                                    other planned, permanent living
                                    arrangement; and
                                ``(iv) a preplacement preventive services
                            program designed to help children at risk of
                            foster care placement remain with their
                            families; and
                        ``(C)(i) has reviewed (or within 12 months after
                    the date of the enactment of this paragraph will
                    review) State laws and administrative and judicial
                    procedures in effect for children abandoned at or
                    shortly after birth (including laws and procedures
                    providing for legal representation of such children);
                    and
                        ``(ii) has enacted and is implementing (or within
                    24 months after the date of the enactment of this
                    paragraph will enact and implement) such laws and
                    procedures as the State determines, on the basis of the
                    review described in clause (i), to be necessary to
                    enable permanent decisions to be made expeditiously
                    with respect to the placement of such children.''.
        (b) Restriction on Reallotment.--Section 424 (42 U.S.C. 624) is
    amended--
                (1) in the 1st sentence, by striking ``The amount'' and
            inserting the following:
        ``(a) In General.--Subject to subsection (b), the amount''; and
                (2) by adding at the end the following:
        ``(b) Exception Relating to Foster Child Protections.--The
    Secretary shall not reallot under subsection (a) of this section any
    amount that is withheld or recovered from a State due to the failure of
    the State to comply with section 422(b)(9).''.
        (c) Repeal.--Section 427 (42 U.S.C. 627) is hereby repealed.
        (d) Conforming Amendments.--
                (1) Section 423(a) (42 U.S.C. 623(a)) is amended by
            striking ``and in section 427''.
                (2) Section 425(a)(2) (42 U.S.C. 625(a)(2)) is amended by
            striking ``the statistical report required by section'' and
            inserting ``with section 422(b)(9) or''.
                (3) Section 472(d) (42 U.S.C. 672(d)) is amended by
            striking ``427(b)'' and inserting ``422(b)(9)''.
        (e) Effective Date.--The amendments and repeal made by this section
    shall be effective for fiscal years beginning on or after October 1,
    1994.
        (f) Construction of Section.--This section and the amendments and
    repeal made by this section shall not be construed to permit any State
    to interrupt the provision of the foster care protections described in
    section 427 of the Social Security Act, as in effect on the effective
    date of such amendments and repeal.

    SEC. 13214. STATES REQUIRED TO REPORT ON MEASURES TAKEN TO COMPLY WITH
                  THE INDIAN CHILD WELFARE ACT.

        (a) State Plan Requirement.--Section 422(b) (42 U.S.C. 622(b)), as
    amended by section 13213(a) of this Act, is amended--
                (1) by striking ``and'' at the end of paragraph (8);
                (2) by striking the period at the end of paragraph (9) and
            inserting ``; and''; and
                (3) by adding at the end the following:
                ``(10) contain a description, developed after consultation
            with tribal organizations (as defined in section 4 of the
            Indian Self-Determination and Education Assistance Act) in the
            State, of the specific measures taken by the State to comply
            with the Indian Child Welfare Act.''.
        (b) Effective Date.--The amendments made by subsection (a) shall be
    effective with respect to calendar quarters beginning on or after
    October 1, 1994.

    SEC. 13215. CHILD WELFARE TRAINEESHIPS.

        (a) In General.--Part B of title IV (42 U.S.C. 620-628) is amended
    by inserting after section 428 the following:

    ``SEC. 429. CHILD WELFARE TRAINEESHIPS.

        ``The Secretary may approve an application for a grant to a public
    or nonprofit institution for higher learning to provide traineeships
    with stipends under section 426(a)(1)(C) only if the application--
                ``(1) provides assurances that each individual who receives
            a stipend with such traineeship (in this section referred to as
            a `recipient') will enter into an agreement with the
            institution under which the recipient agrees--
                        ``(A) to participate in training at a public or
                    private nonprofit child welfare agency on a regular
                    basis (as determined by the Secretary) for the period
                    of the traineeship;
                        ``(B) to be employed for a period of years
                    equivalent to the period of the traineeship, in a
                    public or private nonprofit child welfare agency in any
                    State, within a period of time (determined by the
                    Secretary in accordance with regulations) after
                    completing the postsecondary education for which the
                    traineeship was awarded;
                        ``(C) to furnish to the institution and the
                    Secretary evidence of compliance with subparagraphs (A)
                    and (B); and
                        ``(D) if the recipient fails to comply with
                    subparagraph (A) or (B) and does not qualify for any
                    exception to this subparagraph which the Secretary may
                    prescribe in regulations, to repay to the Secretary all
                    (or an appropriately prorated part) of the amount of
                    the stipend, plus interest, and, if applicable,
                    reasonable collection fees (in accordance with
                    regulations promulgated by the Secretary);
                ``(2) provides assurances that the institution will--
                        ``(A) enter into agreements with child welfare
                    agencies for onsite training of recipients;
                        ``(B) permit an individual who is employed in the
                    field of child welfare services to apply for a
                    traineeship with a stipend if the traineeship furthers
                    the progress of the individual toward the completion of
                    degree requirements; and
                        ``(C) develop and implement a system that, for the
                    3-year period that begins on the date any student
                    completes a child welfare services program of study,
                    tracks the employment record of the student, for the
                    purpose of determining the percentage of students who
                    secure employment in the field of child welfare
                    services and remain employed in the field.''.
        (b) Conforming Amendment.--Section 426(a)(1)(C) (42 U.S.C.
    626(a)(1)(C)) is amended by inserting ``described in section 429''
    after ``including traineeships''.
        (c) Applicability.--The amendments made by this section shall apply
    to grants awarded on or after April 1, 1994.

    SEC. 13216. DISSOLVED ADOPTIONS.

        (a) Eligibility for Foster Care Maintenance Payments.--Section 472
    (42 U.S.C. 672) is amended--
                (1) in subsection (b), by inserting ``or (i)'' after
            ``subsection (a)''; and
                (2) by adding at the end the following:
        ``(i) Any State with a plan approved under this part may make
    foster care maintenance payments under this part on behalf of a child--
                ``(1) with respect to whom such payments were previously
            made;
                ``(2) whose adoption has been set aside by a court;
                ``(3) who meets the requirements of paragraphs (1), (2),
            and (3) of subsection (a); and
                ``(4) who fails to meet the requirements of subsection
            (a)(4) but would meet such requirements if--
                        ``(A) the child were treated as if the child were
                    in the same financial and other circumstances the child
                    was in the last time the child was determined eligible
                    for such payments; and
                        ``(B) the adoption were treated as having never
                    occurred.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to payments under part E of title IV of the Social Security Act
    in fiscal years beginning on or after October 1, 1995.

    SEC. 13217. TIME FRAME FOR JUDICIAL DETERMINATIONS ON VOLUNTARY
                  PLACEMENTS.

        (a) In General.--Section 472(e) (42 U.S.C. 672(e)) is amended--
                (1) by striking ``No'' and inserting ``(1) Except as
            provided in paragraph (2), no''; and
                (2) by adding at the end the following:
                ``(2) If the judicial determination referred to in
            paragraph (1) is made after the 180-day period described
            therein, the payments referred to therein may not be made for
            the period that begins at the end of the 180-day period and
            ends 180 days after the date of the judicial determination, but
            shall (unless otherwise prohibited) be made for periods
            thereafter.''.
        (b) Effective Date.--The amendments made by subsection (a) shall be
    effective with respect to foster care maintenance payments made, under
    State plans in fiscal year 1996 and succeeding fiscal years, on behalf
    of children placed in foster care on or after October 1, 1995.

    SEC. 13218. STUDY OF REASONABLE EFFORTS.

        (a) In General.--The Secretary of Health and Human Services shall
    conduct a study of the implementation by the States of section
    471(a)(15) of the Social Security Act, giving particular attention to--
                (1) standards used by States in determining what action to
            take, and whether and for how long to continue efforts--
                        (A) before the placement of a child in foster care,
                    to prevent or eliminate the need for removal of the
                    child from the home of the child; and
                        (B) to return a child home rather than to seek some
                    other planned, permanent placement; and
                (2) the responses of the courts to the State actions
            described in paragraph (1) of this subsection, including
            whether such responses facilitate or impede the achievement by
            State agencies of the objectives of such section 471(a)(15).
        (b) Report and Recommendations.--Within 18 months after the date of
    the enactment of this Act, the Secretary of Health and Human Services
    shall submit to the Congress a report, with such recommendations as the
    Secretary finds appropriate, based on the results of the study required
    by subsection (a) of this section, which describes State practices that
    the Secretary has found effective in achieving the objectives of
    section 471(a)(15) of the Social Security Act, and, if appropriate,
    shall set forth model practices for consideration by the States.

    SEC. 13219. ENHANCED MATCH FOR AUTOMATED DATA SYSTEMS.

        (a) Payments to States.--
                (1) In general.--Section 474(a)(3) (42 U.S.C. 674(a)(3)) is
            amended--
                        (A) by striking ``and'' at the end of subparagraph
                    (B);
                        (B) by redesignating subparagraph (C) as
                    subparagraph (E); and
                        (C) by inserting after subparagraph (B) the
                    following:
                        ``(C) 90 percent of so much of such expenditures as
                    are for the planning, design, development, or
                    installation of statewide mechanized data collection
                    and information retrieval systems (including 90 percent
                    of the full amount of expenditures for hardware
                    components for such systems) but only to the extent
                    that such systems--
                                ``(i) meet the requirements imposed by
                            regulations promulgated pursuant to section
                            479(b)(2);
                                ``(ii) to the extent practicable, are
                            capable of interfacing with the State data
                            collection system that collects information
                            relating to child abuse and neglect;
                                ``(iii) to the extent practicable, have the
                            capability of interfacing with, and retrieving
                            information from, the State data collection
                            system that collects information relating to
                            the eligibility of individuals under part A
                            (for the purposes of facilitating verification
                            of eligibility of foster children); and
                                ``(iv) are determined by the Secretary to
                            be likely to provide more efficient,
                            economical, and effective administration of the
                            programs carried out under a State plan
                            approved under part B or this part; and
                        ``(D) 50 percent of so much of such expenditures as
                    are for the operation of the statewide mechanized data
                    collection and information retrieval systems referred
                    to in subparagraph (C); and''.
                (2) Treatment of state expenditures for data collection and
            information retrieval systems.--Section 474 (42 U.S.C. 674), as
            amended by section 13224 of this Act, is amended by adding at
            the end the following:
        ``(c) Automated Data Collection Expenditures.--The Secretary shall
    treat as necessary for the proper and efficient administration of the
    State plan all expenditures of a State necessary in order for the State
    to plan, design, develop, install, and operate data collection and
    information retrieval systems described in subsection (a)(3)(C),
    without regard to whether the systems may be used with respect to
    foster or adoptive children other than those on behalf of whom foster
    care maintenance payments or adoption assistance payments may be made
    under this part.''.
                (3) Effective date.--The amendments made by this subsection
            shall apply to expenditures during fiscal years 1994, 1995, and
            1996.
        (b) Termination of Enhanced Match.--
                (1) In general.--Section 474(a)(3)(C) (42 U.S.C.
            674(a)(3)(C)), as amended by subsection (a) of this section, is
            amended by striking ``90 percent'' each place such term appears
            and inserting ``50 percent''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to expenditures during fiscal years beginning on or
            after October 1, 1996.

    SEC. 13220. PERIODIC REEVALUATION OF FOSTER CARE MAINTENANCE PAYMENTS.

        (a) In General.--Section 471(a)(11) (42 U.S.C. 671(a)(11)) is
    amended--
                (1) by inserting ``(A)'' after ``(11)'';
                (2) by striking ``and amounts paid as foster care
            maintenance payments and adoption assistance''; and
                (3) by adding at the end the following:
                ``(B) provides that, at least once every 3 years, the State
            agency will review the amount paid as foster care maintenance
            payments and adoption assistance payments to ensure their
            continuing appropriateness, and will submit to the Secretary
            (and make available to the public) a report on the results of
            the review, in such form and manner as the Secretary may by
            regulation require, which contains, at a minimum--
                        ``(i) a statement of the manner in which the foster
                    care maintenance payment level is determined, including
                    information on the cost of foster care with respect to
                    which such payments are made;
                        ``(ii) information on the amount of the basic
                    foster care maintenance payment level, and as to
                    whether such payment level includes an amount to cover
                    the cost of clothing, and whether such payment level
                    varies by the type of care or the special needs or age
                    of the child, and, if so, the payment levels for each
                    special needs, care, or age category;
                        ``(iii) if such payments are not made at a
                    different rate for children who test positive for human
                    immunodeficiency virus, have acquired immune deficiency
                    syndrome, are addicted to drugs, suffer from
                    complications due to exposure to drugs or alcohol, or
                    have other severe special needs, the reasons therefor;
                    and
                        ``(iv) information on any limitations imposed by
                    the State on adoption assistance payment levels;''.
        (b) Effective Date.--The amendment made by this section shall be
    effective with respect to calendar quarters beginning on or after
    October 1, 1994.

    SEC. 13221. DISPOSITIONAL HEARING.

        Section 475(5)(C) (42 U.S.C. 675(5)(C)) is amended by striking
    ``periodically'' and inserting ``not less frequently than every 12
    months''.

    SEC. 13222. HEALTH CARE PLANS FOR FOSTER CHILDREN.

        (a) In General.--Section 475(1)(C) (42 U.S.C. 675(1)(C)) is
    amended--
                (1) in clause (vii), by striking ``and''; and
                (2) by redesignating clause (viii) as clause (ix) and
            inserting after clause (vii) the following:
                        ``(viii) a record indicating that the child's
                    foster care provider was advised (where appropriate) of
                    the child's eligibility for early and periodic
                    screening, diagnostic, and treatment services under
                    title XIX; and''.
        (b) Effective Date.--The amendments made by this section shall
    apply to case plans established or reviewed on or after January 1,
    1994.

    SEC. 13223. INDEPENDENT LIVING.

        (a) Treatment of Assets of Participating Youths.--Section 477 (42
    U.S.C. 677) is amended--
                (1) by redesignating subsection (i) as subsection (j); and
                (2) by inserting after subsection (h) the following:
        ``(i) Notwithstanding any other provision of this title, with
    respect to a child who is included in a program established by a State
    agency under subsection (a), an amount of the assets of the child which
    would otherwise be regarded as resources for purposes of determining
    eligibility for benefits under this title may be disregarded for the
    purpose of allowing the child to establish a household, pursue
    education, or otherwise complete the transition to independent living.
    The amount disregarded may not exceed an amount determined by the State
    agency to be reasonable for such purposes.''.
        (b) Permanent Extension of Program.--Section 477 (42 U.S.C. 677) is
    amended--
                (1) in subsection (a)(1), by striking the 3rd sentence;
                (2) in subsection (c), by striking ``of the fiscal years
            1988 through 1992'' and inserting ``succeeding fiscal year'';
                (3) in subsection (e)(1)(A), by striking ``each of the
            fiscal years 1987 through 1992'' and inserting ``fiscal year
            1987 and any succeeding fiscal year'';
                (4) in subsection (e)(1)(B), by striking ``fiscal years
            1991 and 1992'' and inserting ``fiscal year 1991 and any
            succeeding fiscal year''; and
                (5) in subsection (e)(1)(C)(ii), by striking ``fiscal year
            1992'' and inserting ``any succeeding fiscal year''.
        (c) Effective Dates.--
                (1) Treatment of assets of participating youths.--The
            amendments made by subsection (a) shall apply to activities in
            fiscal years beginning on or after October 1, 1995.
                (2) Permanent extension of program.--The amendments made by
            subsection (b) shall apply to activities engaged in on or after
            October 1, 1992.

    SEC. 13224. ELIMINATION OF FOSTER CARE CEILINGS AND OF AUTHORITY TO
                  TRANSFER UNUSED FOSTER CARE FUNDS TO CHILD WELFARE
                  SERVICES PROGRAMS.

        (a) Repeal.--Subsections (b) and (c) of section 474 (42 U.S.C.
    674(b) and (c)) are hereby repealed.
        (b) Conforming Amendments.--Section 474 (42 U.S.C. 674) is
    amended--
                (1) in subsection (d)(1)--
                        (A) by striking ``subsections (a), (b), and (c)''
                    and inserting ``subsection (a)''; and
                        (B) by striking ``the provisions of such
                    subsections'' and inserting ``subsection (a)''; and
                (2) by redesignating subsection (d) as subsection (b).
        (c) Effective Date.--The amendments and repeal made by this section
    shall apply to payments for calendar quarters beginning on or after
    October 1, 1993.

    SEC. 13225. TRAINING OF AGENCY STAFF AND FOSTER AND ADOPTIVE PARENTS.

        (a) In General.--Section 8006(b) of the Omnibus Budget
    Reconciliation Act of 1989 (42 U.S.C. 674 note) is amended by striking
    ``, and before October 1, 1992''.
        (b) Retroactive Applicability.--The Social Security Act shall be
    applied and administered as if the amendment made by subsection (a) had
    been made on October 1, 1992.

    SEC. 13226. ON-SITE REVIEWS AND AUDITS OF STATE CLAIMS FOR FOSTER CARE
                  AND ADOPTION ASSISTANCE.

        (a) On-Site Reviews and Audits of State Claims.--Section 474 (42
    U.S.C. 674), as amended by sections 13224 and 13219(a)(2) of this Act,
    is amended--
                (1) by redesignating subsection (c) as subsection (d); and
                (2) by inserting after subsection (b) the following:
        ``(c) On-Site Reviews and Audits of State Claims for Payment.--
                ``(1) Regulations specifying review standards.--The
            Secretary shall promulgate regulations applicable to on-site
            reviews and audits of State expenditures for foster care
            maintenance payments and adoption assistance payments under
            this part, which specify--
                        ``(A) the criteria to be used to determine the
                    appropriateness of expenditures identified in sampled
                    case files;
                        ``(B) the criteria to be used to determine the
                    appropriateness of expenditures for child placement
                    services and plan administration; and
                        ``(C) the types of erroneous expenditures which
                    will be disregarded for purposes of determining the
                    appropriateness of payments under this part (including
                    erroneous payments resulting from the State's reliance
                    upon and correct use of formal written statements of
                    Federal law or policy provided to the State by the
                    Secretary).
                ``(2) Development and publication of written standards and
            procedures.--The Secretary, after consultation with
            organizations representing State and local governmental
            agencies with responsibility for foster care and adoption
            services and other relevant agencies and organizations, shall
            develop and furnish to State agencies a written description of
            the methods and procedures to be used in the on-site audits and
            reviews referred to in paragraph (1), which specify--
                        ``(A) the methods and procedures to be used to
                    select a sample of case files for review or audit;
                        ``(B) the procedures to be used in reviewing or
                    auditing sampled case files to determine erroneous
                    expenditures;
                        ``(C) the procedures to be used to review or audit
                    State expenditures for child placement services and
                    plan administration; and
                        ``(D) the methodology to be used to extrapolate
                    from review or audit findings to all expenditures under
                    the State plan.
                ``(3) Advance notice to states.--The Secretary shall not,
            in a review or audit of State expenditures during a fiscal
            year, use any criterion specified pursuant to paragraph (1), or
            any procedure or methodology specified pursuant to paragraph
            (2), which was not published in final regulations or furnished
            in writing to the State (as applicable) at least 3 months
            before the beginning of the fiscal year.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to expenditures in fiscal years beginning on or after October 1,
    1994.

    SEC. 13227. CONFORMITY REVIEWS.

        (a) In General.--Part A of title XI (42 U.S.C. 1301-1320b-13) is
    amended by inserting after section 1122 the following:

    ``SEC. 1123. REVIEWS OF CHILD AND FAMILY SERVICES PROGRAMS, AND OF
                  FOSTER CARE AND ADOPTION ASSISTANCE PROGRAMS, FOR
                  COMPLIANCE WITH STATE PLAN REQUIREMENTS.

        ``(a) In General.--The Secretary shall not impose a financial
    penalty on any State for any failure of the State programs under parts
    B and E of title IV to comply with any requirement of any State plan
    approved under such part B or E, except pursuant to final regulations,
    developed after consultation with State agencies administering such
    programs, which meet the requirements of this section.
        ``(b) Elements of Review System.--The regulations referred to in
    subsection (a) shall--
                ``(1) specify the timetable for compliance reviews of State
            programs, which--
                        ``(A) shall provide for annual reviews of each
                    State program during the 1st 2 years of operation;
                        ``(B) shall provide for review of a State program
                    not later than 1 year following a review in which the
                    State program was found not to be in substantial
                    compliance with plan requirements; and
                        ``(C) may provide for less frequent reviews of
                    State programs which have been found to be in
                    substantial compliance with plan requirements, but
                    shall permit the Secretary to reinstate more frequent
                    reviews based on information which indicates that the
                    State program may not be in compliance with plan
                    requirements;
                ``(2) specify the plan requirements subject to review, and
            the criteria to be used to measure compliance with such
            requirements and to determine whether there is a substantial
            failure to comply with a plan requirement;
                ``(3) specify the method to be used to determine the
            financial penalty to be imposed (subject to paragraph (4)) for
            a failure to comply with plan requirements, which ensures
            that--
                        ``(A) a financial penalty will not be imposed with
                    respect to a program, unless it is determined that the
                    program fails substantially to so comply;
                        ``(B) a financial penalty will not be imposed for a
                    failure to so comply resulting from the State's
                    reliance upon and correct use of formal written
                    statements of Federal law or policy provided to the
                    State by the Secretary; and
                        ``(C) the amount of financial penalty is related to
                    the extent of the noncompliance; and
                ``(4) require the Secretary, with respect to any State
            found to have failed substantially to comply with plan
            requirements--
                        ``(A) to afford the State an opportunity to adopt
                    and implement a corrective action plan, approved by the
                    Secretary, designed to end the noncompliance;
                        ``(B) to make technical assistance available to the
                    State to the extent necessary to enable the State to
                    develop and implement such a corrective action plan;
                        ``(C) to suspend the imposition of any penalty
                    under this section while such a corrective action plan
                    is in effect; and
                        ``(D) to rescind any such penalty if the
                    noncompliance is ended by successful completion of such
                    a corrective action plan.
        ``(c) Provisions for Administrative and Judicial Review.--The
    regulations referred to in subsection (a) shall--
                ``(1) require the Secretary, not later than 10 days after a
            determination that a program of the State is not in compliance
            with applicable plan requirements, to notify the State of--
                        ``(A) the basis for the determination; and
                        ``(B) the amount of the financial penalty (if any)
                    imposed on the State;
                ``(2) afford the State an opportunity to appeal the
            determination to the Departmental Appeals Board within 60 days
            after receipt of the notice described in paragraph (1) (or, if
            later, after failure to continue or to complete a corrective
            action plan); and
                ``(3) afford the State an opportunity to obtain judicial
            review of an adverse decision of the Board, within 60 days
            after the State receives notice of the decision of the Board,
            by appeal to the district court of the United States for the
            judicial district in which the principal or headquarters office
            of the agency responsible for administering the program is
            located.''.
        (b) Conforming Amendment.--Section 471(b) (42 U.S.C. 671(b)) is
    amended by striking all that follows the 1st sentence.
        (c) Effective Date.--The amendments made by subsections (a) and (b)
    shall take effect on the date of the enactment of this Act.
        (d) Construction.--This section shall not be construed to prevent
    the Secretary, before the effective date of final regulations meeting
    the requirements of section 1123 of the Social Security Act, from
    conducting compliance reviews of State programs under parts B and E of
    such Act for the purpose of providing information and technical
    assistance to States concerning corrective actions needed in order to
    comply with plan requirements applicable to such programs.

    SEC. 13228. REPEAL OF ANNUAL REPORT ON VOLUNTARY PLACEMENT.

        Section 102(e) of the Adoption Assistance and Child Welfare Act of
    1980 (42 U.S.C. 672 note) is hereby repealed.

    SEC. 13229. DEMONSTRATION PROJECTS.

        Part A of title XI (42 U.S.C. 1301-1320b-13) is amended by
    inserting after section 1128B the following:

    ``SEC. 1129. DEMONSTRATION PROJECTS.

        ``(a) In General.--The Secretary may authorize not more than 10
    States to conduct demonstration projects pursuant to this section which
    the Secretary finds are likely to promote the objectives of part B or E
    of title IV.
        ``(b) Waiver Authority.--The Secretary may waive compliance with
    any requirement of part B or E of title IV which (if applied) would
    prevent a State from carrying out a demonstration project under this
    section or prevent the State from effectively achieving the purpose of
    such a project, except that the Secretary may not waive--
                ``(1) any provision of section 427 (as in effect before
            October 1, 1994), section 422(b)(9) (as in effect after such
            date), or section 479; or
                ``(2) any provision of such part E, to the extent that the
            waiver would impair the entitlement of any qualified child or
            family to benefits under a State plan approved under such part
            E.
        ``(c) Treatment as Program Expenditures.--For purposes of parts B
    and E of title IV, the Secretary shall consider the expenditures of any
    State to conduct a demonstration project under this section to be
    expenditures under subpart 1 or 2 of such part B, or under such part E,
    as the State may elect.
        ``(d) Duration of Demonstration.--A demonstration project under
    this section may be conducted for not more than 5 years.
        ``(e) Application.--Any State seeking to conduct a demonstration
    project under this section shall submit to the Secretary an
    application, in such form as the Secretary may require, which
    includes--
                ``(1) a description of the proposed project, the geographic
            area in which the proposed project would be conducted, the
            children or families who would be served by the proposed
            project, and the services which would be provided by the
            proposed project (which shall provide, where appropriate, for
            random assignment of children and families to groups served
            under the project and to control groups);
                ``(2) a statement of the period during which the proposed
            project would be conducted;
                ``(3) a discussion of the benefits that are expected from
            the proposed project (compared to a continuation of activities
            under the approved plan or plans of the State);
                ``(4) an estimate of the costs or savings of the proposed
            project;
                ``(5) a statement of program requirements for which waivers
            would be needed to permit the proposed project to be conducted;
                ``(6) a description of the proposed evaluation design; and
                ``(7) such additional information as the Secretary may
            require.
        ``(f) Evaluations; Report.--Each State authorized to conduct a
    demonstration project under this section shall--
                ``(1) obtain an evaluation by an independent contractor of
            the effectiveness of the project, using an evaluation design
            approved by the Secretary which provides for--
                        ``(A) comparison of methods of service delivery
                    under the project, and such methods under a State plan
                    or plans, with respect to efficiency, economy, and any
                    other appropriate measures of program management;
                        ``(B) comparison of outcomes for children and
                    families (and groups of children and families) under
                    the project, and such outcomes under a State plan or
                    plans, for purposes of assessing the effectiveness of
                    the project in achieving program goals; and
                        ``(C) any other information that the Secretary may
                    require; and
                ``(2) provide interim and final evaluation reports to the
            Secretary, at such times and in such manner as the Secretary
            may require.
        ``(g) Cost Neutrality.--The Secretary may not authorize a State to
    conduct a demonstration project under this section unless the Secretary
    determines that the total amount of Federal funds that will be expended
    under (or by reason of) the project over its approved term (or such
    portion thereof or other period as the Secretary may find appropriate)
    will not exceed the amount of such funds that would be expended by the
    State under the State plans approved under parts B and E of title IV if
    the project were not conducted.''.

    SEC. 13230. PLACEMENT ACCOUNTABILITY.

        (a) Case Plan Requirements.--Section 475(5)(A) (42 U.S.C.
    675(5)(A)) is amended by adding at the end the following: ``which--
                                ``(i) if the child has been placed in a
                            foster family home or child-care institution a
                            substantial distance from the home of the
                            parents of the child, or in a State different
                            from the State in which the home is located,
                            sets forth the reasons why such placement is in
                            the best interests of the child, and
                                ``(ii) if the child has been placed in
                            foster care outside the State, requires that,
                            at least every 6 months, a caseworker on the
                            staff of the State agency of the State in which
                            the home of the parents of the child is
                            located, or of the State in which the child has
                            been placed, visit such child in such home or
                            institution and submit a report on such visit
                            to the State agency of the State in which the
                            home of the parents of the child is located,''.
        (b) Dispositional Hearing.--Section 475(5)(C) (42 U.S.C. 675(5)(C))
    is amended by inserting ``and, in the case of a child described in
    subparagraph (A)(ii), whether the out-of-State placement continues to
    be appropriate and in the best interests of the child,'' after ``long-
    term basis)''.
        (c) Data Collection.--Section 479(c)(3)(C) (42 U.S.C. 679(c)(3)(C))
    is amended--
                (1) by striking ``and'' at the end of clause (i); and
                (2) by adding at the end the following:
                                ``(iii) children placed in foster care
                            outside the State, and''.
        (d) Effective Dates.--The amendments made by subsections (a), (b),
    and (c) shall be effective with respect to fiscal years beginning on
    and after October 1, 1994.

    SEC. 13231. PAYMENTS OF STATE CLAIMS FOR FOSTER CARE AND ADOPTION
                  ASSISTANCE.

        Section 474(b) (42 U.S.C. 674(b)), as so redesignated by section
    13239(b)(2) of this Act, is amended by adding at the end the following:
        ``(4)(A) Within 60 days after receipt of a State claim for
    expenditures pursuant to subsection (a), the Secretary shall allow,
    disallow, or defer such claim.
        ``(B) Within 15 days after a decision to defer such a State claim,
    the Secretary shall notify the State of the reasons for the deferral
    and of the additional information necessary to determine the
    allowability of the claim.
        ``(C) Within 90 days after receiving such necessary information (in
    readily reviewable form), the Secretary shall--
                ``(i) disallow the claim, if able to complete the review
            and determine that the claim is not allowable, or
                ``(ii) in any other case, allow the claim, subject to
            disallowance (as necessary)--
                        ``(I) upon completion of the review, if it is
                    determined that the claim is not allowable; or
                        ``(II) on the basis of findings of an audit or
                    financial management review.''.

    SEC. 13232. MORATORIUM ON COLLECTION OF DISALLOWANCES.

        The Secretary of Health and Human Services shall not--
                (1) before October 1, 1994, reduce any payment to, withhold
            any payment from, or seek any repayment from any State under
            part B or E of title IV of the Social Security Act by reason of
            a determination made in connection with a review of State
            compliance with section 427 of such Act for any Federal fiscal
            year before fiscal year 1995; or
                (2) reduce any payment to, withhold any payment from, or
            seek any repayment from any State under such part E by reason
            of a determination made in connection with any on-site Federal
            financial review, or any audit conducted by the Inspector
            General using similar methodologies.

    SEC. 13233. BORDER REGION CHILD WELFARE WORKER TRAINING DEMONSTRATION.

        (a) In General.--The Secretary shall make grants to not more than 5
    eligible institutions to train individuals to deliver culturally
    sensitive and bilingual child welfare services in areas of the United
    States that border on Mexico, 1 of which grants shall be for training
    to deliver child welfare services to historically unserved or
    underserved populations in an urban center with a high concentration of
    such populations.
        (b) Applications.--The Secretary shall approve an application of an
    institution for a grant under this section only if the application--
                (1) demonstrates to the satisfaction of the Secretary that
            the institution has a history of, or a plan for, training
            students to deliver culturally sensitive and bilingual child
            welfare services in a border county;
                (2) provides assurances that the institution will develop
            and implement, in consultation with the child welfare agency of
            the State in which the institution is located, a curriculum in
            the field of child welfare services which--
                        (A) is sensitive to the culture of--
                                (i) the areas of the United States that
                            border on Mexico; or
                                (ii) in the case of the institution which
                            receives the urban center grant described in
                            subsection (a), the historically unserved or
                            underserved populations in the urban center;
                            and
                        (B) includes training for identification of health
                    problems of children and their families and of child
                    abuse and neglect;
                (3) provides assurances that each individual who receives a
            stipend with such training will enter into an agreement with
            the institution under which the individual agrees--
                        (A) to be employed for a period of years equivalent
                    to the period of such training, in a public or private
                    nonprofit family assistance agency that provides
                    services directly to residents of--
                                (i) the border county in which the agency
                            is located; or
                                (ii) in the case of the institution which
                            receives the urban center grant described in
                            subsection (a), the urban center in which the
                            agency is located; and
                        (B) if the individual fails to be so employed for
                    such period, to repay to the Secretary, in accordance
                    with such conditions as the Secretary may prescribe,
                    all or part of the amount of the stipend, plus
                    interest, and, if applicable, reasonable collection
                    fees; and
                (4) provides that each agreement entered into with an
            individual pursuant to paragraph (3) will fully disclose the
            terms and conditions under which the stipend is to be provided.
        (c) Evaluations.--Each institution that receives a grant under this
    section shall develop and carry out a plan for evaluating the effects
    of the training provided under the grant, and shall submit to the
    Secretary a report on the evaluation.
        (d) Definitions.--As used in this section:
                (1) Family assistance agency.--The term ``family assistance
            agency'' means a child welfare agency, family planning agency,
            hospital, clinic, community mental health facility, or drug and
            alcohol treatment program.
                (2) Eligible institution.--The term ``eligible
            institution'' means a public or private nonprofit institution
            of higher learning that is located in a State that contains a
            border county.
                (3) Border county.--The term ``border county'' means--
                        (A) a United States county that borders on Mexico;
                    and
                        (B) a United States county that borders on a county
                    described in subparagraph (A).
                (4) Urban center.--The term ``urban center'' means an area
            in a metropolitan statistical area, as designated by the Office
            of Management and Budget, which has a high incidence of
            individuals in historically unserved or underserved populations
            who are in need of social services, as determined by the
            Secretary using the most recent and best available information.
                (5) Historically unserved or underserved populations.--The
            term ``historically unserved or underserved populations''
            includes--
                        (A) socially and economically disadvantaged
                    populations;
                        (B) persons with limited English proficiency;
                        (C) populations residing in urban areas and
                    exhibiting a high incidence of child abuse, neglect, or
                    abandonment, as determined by the Secretary;
                        (D) homeless persons (within the meaning of section
                    103 of the Stewart B. McKinney Homeless Assistance
                    Act);
                        (E) persons who are, or are in danger of becoming,
                    infected with the human immunodeficiency virus; and
                        (F) persons who abuse alcohol or drugs.
                (6) Secretary.--The term ``Secretary'' means the Secretary
            of Health and Human Services.
        (e) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as may be necessary to carry out this section.

    SEC. 13234. EFFECT OF FAILURE TO CARRY OUT STATE PLAN.

        (a) In General.--Part A of title XI (42 U.S.C. 1301-1320b-13), as
    amended by section 13229 of this Act, is amended by inserting after
    section 1129 the following:

    ``SEC. 1130. EFFECT OF FAILURE TO CARRY OUT STATE PLAN.

        ``In an action brought to enforce a provision of the Social
    Security Act, such provision is not to be deemed unenforceable because
    of its inclusion in a section of the Act requiring a State plan or
    specifying the required contents of a State plan. This section is not
    intended to limit or expand the grounds for determining the
    availability of private actions to enforce State plan requirements
    other than by overturning any such grounds applied in Suter v. Artist
    M., 112 S. Ct. 1360 (1992), but not applied in prior Supreme Court
    decisions respecting such enforceability: Provided, however, That this
    section is not intended to alter the holding in Suter v. Artist M. that
    section 471(a)(15) of the Act is not enforceable in a private right of
    action.''.
        (b) Applicability.--The amendment made by subsection (a) shall
    apply to actions pending on the date of the enactment of this Act and
    to actions brought on or after such date of enactment.

                      CHAPTER 2--CHILD SUPPORT ENFORCEMENT

    SEC. 13241. STATE PATERNITY ESTABLISHMENT PROGRAMS.

        (a) Performance Standards.--Section 452(g) (42 U.S.C. 652(g)) is
    amended--
                (1) in paragraph (1)--
                        (A) by striking ``1991'' and inserting ``1994'';
                        (B) by inserting ``is based on reliable data and''
                    before ``equals or exceeds''; and
                        (C) by striking subparagraphs (A), (B), and (C) and
                    inserting the following:
                ``(A) 75 percent;
                ``(B) for a State with a paternity establishment percentage
            of not less than 50 percent but less than 75 percent for the
            fiscal year, the paternity establishment percentage of the
            State for the immediately preceding year plus 3 percentage
            points; or
                ``(C) for a State with a paternity establishment percentage
            of less than 50 percent for such fiscal year, the paternity
            establishment percentage of the State for the immediately
            preceding year plus 6 percentage points.''; and
                (2) in paragraph (2)--
                        (A) by striking ``(or under all such plans)'' each
                    place such term appears;
                        (B) by inserting ``or part E'' after ``under part
                    A'' each place such term appears;
                        (C) by amending subparagraph (B) to read as
                    follows:
                        ``(B) the term `reliable data' means the most
                    recent data available which are found by the Secretary
                    to be reliable for purposes of this section.'';
                        (D) by inserting ``unless paternity is established
                    for such child'' after ``the death of a parent'';
                        (E) by striking ``parent or'' and inserting
                    ``parent,''; and
                        (F) by inserting ``, or any child with respect to
                    whom the State agency administering the plan under part
                    E determines (as provided in section 454(4)(B)) that it
                    is against the best interest of such child to do so''
                    after ``cooperate under section 402(a)(26)''.
        (b) State Plan Requirements.--
                (1) Required procedures.--Section 466(a) (42 U.S.C. 666(a))
            is amended--
                        (A) in paragraph (2)--
                                (i) by striking ``at the option of the
                            State,''; and
                                (ii) by inserting ``and paternity
                            establishment'' after ``support order issuance
                            and enforcement'';
                        (B) in paragraph (5), by adding at the end the
                    following:
                        ``(C) Procedures for a simple civil process for
                    voluntarily acknowledging paternity under which the
                    State must explain the rights and responsibilities of
                    acknowledging paternity, and afford due process
                    safeguards. Such procedures must include (i) a
                    hospital-based program for the voluntary acknowledgment
                    of paternity during the period immediately before or
                    after the birth of a child, and (ii) the inclusion of
                    signature lines on applications for official birth
                    certificates which, once signed by the father and the
                    mother, are considered a voluntary acknowledgment of
                    paternity.
                        ``(D) Procedures under which the voluntary
                    acknowledgment of paternity of a child by an individual
                    in the manner described in subparagraph (C)(ii) creates
                    a rebuttable or, at the option of the State, conclusive
                    presumption that the individual is the father of the
                    child, and under which such a voluntary acknowledgment
                    is admissible as evidence of paternity.
                        ``(E) Procedures under which a voluntary
                    acknowledgment of paternity in the manner described in
                    subparagraph (C)(ii) must be recognized as a basis for
                    seeking a support order without first requiring any
                    further proceedings to establish paternity.
                        ``(F) Procedures requiring that (i) any objection
                    to genetic testing results be made in writing within a
                    specified number of days before any hearing at which
                    such results may be introduced into evidence, and (ii)
                    if no objection is made, the test results be admissible
                    as evidence of paternity without the need for
                    foundation testimony or other proof of authenticity or
                    accuracy.
                        ``(G) Procedures which create a rebuttable or, at
                    the option of the State, conclusive presumption of
                    paternity of a child, upon genetic testing results
                    indicating a threshold probability of the alleged
                    father being the father of the child.
                        ``(H) Procedures requiring a default order to be
                    entered in a paternity case upon a showing that process
                    has been served on the defendant and any additional
                    showing required by State law.''; and
                        (C) by inserting after paragraph (10) the
                    following:
                ``(11) Procedures under which a State must give full faith
            and credit to a determination of paternity made by any other
            State, whether established through voluntary acknowledgment or
            through administrative or judicial processes.''.
                (2) Furnishing of social security numbers.--
                        (A) In general.--Section 466(a) (42 U.S.C. 666(a)),
                    as amended by paragraph (1)(C) of this subsection, is
                    amended by inserting after paragraph (11) the
                    following:
                ``(12)(A) Procedures under which, in the administration of
            any law involving the issuance, reissuance, or amendment of a
            birth certificate, the State shall require each parent to
            furnish to the State, or any agency or political subdivision
            thereof having administrative responsibility for the law
            involved, the social security account number (or numbers, if
            the parent has more than 1 such number) issued to the parent,
            unless the State (in accordance with regulations prescribed by
            the Secretary) finds good cause for not requiring the
            furnishing of the number.
                ``(B) Procedures under which any number furnished under
            subparagraph (A) shall be made available to the agency
            administering the State plan under this part, in accordance
            with Federal or State law or regulation.
                ``(C) Procedures under which--
                        ``(i) any number furnished under subparagraph (A)
                    shall not be recorded on the birth certificate; and
                        ``(ii) any social security account number, obtained
                    with respect to the issuance by the State of any birth
                    certificate, shall not be used for other than child
                    support purposes, unless section 7(a) of the Privacy
                    Act of 1974 does not prohibit the State from requiring
                    the disclosure of the number, by reason of the State
                    having adopted, before January 1, 1975, a statute or
                    regulation requiring such disclosure.''.
                        (B) Conforming amendments.--Section
                    205(c)(2)(C)(ii) (42 U.S.C. 405(c)(2)(C)(ii)) is
                    amended--
                                (i) by striking ``(ii) In the
                            administration of any law involving the
                            issuance'' and inserting ``(ii) In the
                            administration of any law involving the
                            issuance, reissuance, or amendment''; and
                                (ii) by striking ``any purpose other than
                            for the enforcement of child support orders in
                            effect in the State'' and inserting ``other
                            than child support purposes''.
        (c) Conforming Repeal.--Section 468 (42 U.S.C. 668) is hereby
    repealed.
        (d) Effective Date.--The amendments and repeal made by this section
    shall become effective with respect to a State--
                (1) on October 1, 1993, or, if later
                (2) upon enactment by the legislature of the State of all
            laws required by such amendments,
    but in no event later than the 1st day of the 1st calendar quarter
    beginning after the close of the 1st regular session of the State
    legislature that begins after the date of the enactment of this Act.
    For purposes of the preceding sentence, in the case of a State that has
    a 2-year legislative session, each year of such session shall be deemed
    to be a separate regular session of the State legislature.

    SEC. 13242. ENFORCEMENT OF HEALTH INSURANCE SUPPORT.

        (a) State Plan Requirements.--Section 454(a) (42 U.S.C. 654(a)) is
    amended--
                (1) by striking ``and'' at the end of paragraph (23);
                (2) by striking the period at the end of paragraph (24) and
            inserting ``; and''; and
                (3) by inserting after paragraph (24) the following:
                ``(25) provide assurances satisfactory to the Secretary
            that the State has in effect laws applicable to health insurers
            and insurance policies or programs subject to the laws of the
            State that--
                        ``(A) prohibit insurers' consideration, in
                    determining an individual's eligibility for or coverage
                    under any such policy or program, of such individual's
                    eligibility for or coverage under the plan of any State
                    under title XIX;
                        ``(B) provide that, where an individual assigns
                    rights to any State in accordance with section 1912,
                    that State is subrogated, to the extent of medical
                    assistance furnished, to the individual's rights under
                    any health insurance policy or program;
                        ``(C) prohibit insurers from applying, to State
                    agencies administering programs under title XIX and
                    acting as agents or subrogees (for purposes of
                    insurance policies or programs of such insurers) of
                    individuals receiving medical assistance under such
                    State programs, requirements (with respect to deadlines
                    for filing claims or any other matters) different from
                    requirements applicable to any other applicant,
                    beneficiary, agent, or subrogee;
                        ``(D) prohibit insurers from denying enrollment of
                    a child under the health insurance coverage of the
                    child's parent on grounds that--
                                ``(i) the child does not reside with the
                            parent, or
                                ``(ii) the child was born out of wedlock;
                        ``(E) in any case where a parent is required by
                    court or administrative order to provide health
                    insurance coverage for a child, require insurers,
                    without regard to otherwise applicable enrollment
                    season restrictions--
                                ``(i) to permit such parent, upon
                            application, to enroll in family coverage (if
                            otherwise eligible and not already so
                            enrolled), and to enroll such child under such
                            family coverage, and
                                ``(ii) where such a parent who is enrolled
                            in family coverage fails to make application,
                            to enroll such child under such family coverage
                            upon application by the child's other parent or
                            by the State agency administering the program
                            under this part or title XIX; and
                        ``(F) in any case where a child is covered under
                    the health insurance of a noncustodial parent, require
                    insurers--
                                ``(i) to permit the custodial parent (or
                            service provider, with the custodial parent's
                            approval), or any State agency administering a
                            program under title XIX, to submit claims for
                            covered services without the approval of the
                            noncustodial parent, and
                                ``(ii) to make payment on claims submitted
                            in accordance with clause (i) directly to the
                            custodial parent, service provider, or State
                            agency submitting such claim;
                ``(26) provide assurances satisfactory to the Secretary
            that the State has in effect laws requiring employers doing
            business in the State--
                        ``(A) upon notice of a court or administrative
                    order requiring an employee to provide health insurance
                    coverage for the employee's child, and upon application
                    by such employee (or, where such employee fails to make
                    application, by the child's other parent or the State
                    agency administering the program under this part or
                    title XIX), to permit enrollment of such child at any
                    time as a dependent of the employee under the
                    employer's group health insurance;
                        ``(B) to permit disenrollment from such group
                    health insurance by such employee, or elimination of
                    coverage of such child, only upon receipt of
                    satisfactory evidence, in writing, that--
                                ``(i) such court or administrative order is
                            no longer in effect, or
                                ``(ii) the employee has enrolled or will
                            enroll in alternative health insurance covering
                            such child which will take effect immediately
                            upon the effective date of such disenrollment;
                            and
                        ``(C) to withhold from such employee's compensation
                    the employee's share (if any) of premiums for such
                    health insurance, and to pay such share of premiums to
                    the insurer;
                ``(27) provide assurances satisfactory to the Secretary
            that the State has in effect laws requiring the State agency to
            garnish the wages, salary, or other employment income of, and
            to withhold amounts from State tax refunds to, any person who--
                        ``(A) is required by court or administrative order
                    to provide coverage of the costs of medical services to
                    an individual eligible for medical assistance under
                    title XIX,
                        ``(B) has received payment from a third party for
                    the costs of medical services to such individual, and
                        ``(C) has not used such payments to reimburse, as
                    appropriate, either such individual or the provider of
                    such services,
            to the extent necessary to reimburse the State agency for
            expenditures for such costs under its plan under title XIX, but
            any claims for current or past-due child support shall take
            priority over any such claims for the costs of medical
            services.''.
        (b) Effective Date.--
                (1) In general.--The amendments made by subsection (a)
            apply to calendar quarters beginning on or after April 1, 1994,
            except as provided in paragraph (2).
                (2) Extension for state law amendment.--In the case of a
            State plan under part D of title IV of the Social Security Act
            which the Secretary of Health and Human Services determines
            requires State legislation in order for the plan to meet the
            additional requirements imposed by the amendments made by
            subsection (a), the State plan shall not be regarded as failing
            to comply with the requirements of such title solely on the
            basis of its failure to meet these additional requirements
            before the 1st day of the 1st calendar quarter beginning after
            the close of the 1st regular session of the State legislature
            that begins after the date of enactment of this Act. For
            purposes of the preceding sentence, in the case of a State that
            has a 2-year legislative session, each year of such session
            shall be deemed to be a separate regular session of the State
            legislature.

    SEC. 13243. REPORTS TO CREDIT BUREAUS ON PERSONS DELINQUENT IN CHILD
                  SUPPORT PAYMENTS.

        (a) In General.--Section 466(a)(7) (42 U.S.C. 666(a)(7)) is
    amended--
                (1) by striking ``upon the request of such agency'' and
            inserting ``, and procedures which require the State to
            periodically report to any such agency the name of any parent
            who owes overdue support and is at least 2 months delinquent in
            the payment of such support and the amount of such delinquency
            unless the agency requests not to receive such information'';
            and
                (2) by striking ``(C) a fee'' and all that follows through
            ``by the State'' and inserting ``, and (C) such information
            shall not be made available to (i) a consumer reporting agency
            which the State determines does not have sufficient capability
            to systematically and timely make accurate use of such
            information, or (ii) an entity which has not furnished evidence
            satisfactory to the State that the entity is a consumer
            reporting agency''.
        (b) Effective Date.--
                (1) In general.--Except as provided in paragraph (2), the
            amendments made by subsection (a) shall take effect on October
            1, 1994.
                (2) Exception.--If the Secretary of Health and Human
            Services determines that a State is unable to comply with the
            amendments made by subsection (a), such State shall be exempt
            from compliance with such amendments until the State
            establishes an automated data processing and information
            retrieval system under section 454(24) of the Social Security
            Act, or October 1, 1995, whichever occurs earlier.

                    CHAPTER 3--SUPPLEMENTAL SECURITY INCOME

    SEC. 13251. FEES FOR FEDERAL ADMINISTRATION OF STATE SUPPLEMENTARY
                  PAYMENTS.

        (a) In General.--
                (1) Optional state supplementary payments.--Section 1616(d)
            (42 U.S.C. 1382e(d)) is amended--
                        (A) by inserting ``(1)'' after ``(d)'';
                        (B) by inserting ``, plus an administration fee
                    assessed in accordance with paragraph (2) and any
                    additional services fee charged in accordance with
                    paragraph (3)'' before the period; and
                        (C) by adding after and below the end the
                    following:
        ``(2)(A) The Secretary shall assess each State an administration
    fee in an amount equal to--
                ``(i) the number of supplementary payments made by the
            Secretary on behalf of the State under this section for any
            month in a fiscal year; multiplied by
                ``(ii) the applicable rate for the fiscal year.
        ``(B) As used in subparagraph (A), the term `applicable rate'
    means--
                ``(i) for fiscal year 1994, $1.67;
                ``(ii) for fiscal year 1995, $3.33;
                ``(iii) for fiscal year 1996, $5.00; and
                ``(iv) for fiscal year 1997 and each succeeding fiscal
            year, $5.00, or such different rate as the Secretary determines
            pursuant to criteria established in regulations is appropriate
            for the State, taking into account the complexity of the
            State's supplementary payment program.
        ``(C) All fees collected pursuant to this paragraph shall be
    transferred to the United States at the same time that amounts for such
    supplementary payments are required to be so transferred.
        ``(3)(A) The Secretary shall charge a State an additional services
    fee if, at the request of the State, the Secretary provides additional
    services beyond the level customarily provided, in the administration
    of State supplementary payments pursuant to this section.
        ``(B) The additional services fee shall be in an amount that the
    Secretary determines is necessary to cover all costs (including
    indirect costs) incurred by the Federal Government in furnishing the
    additional services referred to in subparagraph (A).
        ``(C) The additional services fee shall be payable in advance or by
    way of reimbursement.
        ``(4) All administration fees and additional services fees
    collected pursuant to this subsection shall be deposited in the general
    fund of the Treasury of the United States as miscellaneous receipts.''.
                (2) Mandatory state supplementary payments.--Section
            212(b)(3) of Public Law 93-66 (42 U.S.C. 1382 note) is
            amended--
                        (A) by inserting ``(A)'' after ``(3)'';
                        (B) by inserting ``, plus an administration fee
                    assessed in accordance with subparagraph (B) and any
                    additional services fee charged in accordance with
                    subparagraph (C)'' before the period; and
                        (C) by adding after and below the end the
                    following:
        ``(B)(i) The Secretary shall assess each State an administration
    fee in an amount equal to--
                ``(I) the number of supplementary payments made by the
            Secretary on behalf of the State under this subsection for any
            month in a fiscal year; multiplied by
                ``(II) the applicable rate for the fiscal year.
        ``(ii) As used in clause (i), the term `applicable rate' means--
                ``(I) for fiscal year 1994, $1.67;
                ``(II) for fiscal year 1995, $3.33;
                ``(III) for fiscal year 1996, $5.00; and
                ``(IV) for fiscal year 1997 and each succeeding fiscal
            year, $5.00, or such different rate as the Secretary determines
            pursuant to regulations established in regulations is
            appropriate for the State, taking into account the complexity
            of the State's supplementary payment program.
        ``(iii) All fees collected pursuant to this subparagraph shall be
    transferred to the United States at the same time that amounts for such
    supplementary payments are required to be so transferred.
        ``(C)(i) The Secretary shall charge a State an additional services
    fee if, at the request of the State, the Secretary provides additional
    services beyond the level customarily provided, in the administration
    of State supplementary payments pursuant to this subsection.
        ``(ii) The additional services fee shall be in an amount that the
    Secretary determines is necessary to cover all costs (including
    indirect costs) incurred by the Federal Government in furnishing the
    additional services referred to in clause (i).
        ``(iii) The additional services fee shall be payable in advance or
    by way of reimbursement.
        ``(D) All administration fees and additional services fees
    collected pursuant to this paragraph shall be deposited in the general
    fund of the Treasury of the United States as miscellaneous receipts.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to supplementary payments made pursuant to section 1616(a) of the
    Social Security Act or section 212(a) of Public Law 93-66 for any
    calendar month beginning after September 30, 1993, and to services
    furnished after such date, regardless of whether regulations to
    implement such amendments have been promulgated by such date, or
    whether any agreement entered into under such section 1616(a) or such
    section 212(a) has been modified.

    SEC. 13252. EXCLUSION FROM INCOME OF STATE RELOCATION ASSISTANCE.

        Section 5035(c) of the Omnibus Budget Reconciliation Act of 1990
    (42 U.S.C. 1382a note; 104 Stat. 1388-225) is amended--
                (1) by striking ``The amendments made by this section'' and
            inserting ``(1) The amendments made by subsection (b)''; and
                (2) by adding at the end the following:
        ``(2) The amendments made by subsection (a) shall apply with
    respect to benefits for calendar months beginning on or after May 1,
    1991.''.

    SEC. 13253. PREVENTION OF ADVERSE EFFECTS ON ELIGIBILITY FOR, AND
                  AMOUNT OF, BENEFITS WHEN SPOUSE OR PARENT OF BENEFICIARY
                  IS ABSENT FROM THE HOUSEHOLD DUE TO ACTIVE MILITARY
                  SERVICE.

        (a) Absent Person Generally Deemed To Be Living in the Household.--
    Section 1614(f) (42 U.S.C. 1382c(f)) is amended by adding at the end
    the following:
        ``(4) For purposes of paragraphs (1) and (2), a spouse or parent
    (or spouse of such a parent) who is absent from the household in which
    the individual lives due solely to a duty assignment as a member of the
    Armed Forces on active duty shall, in the absence of evidence to the
    contrary, be deemed to be living in the same household as the
    individual.''.
        (b) Exclusion From Income of Hazardous Duty Pay Received While in
    Active Military Service.--Section 1612(b) (42 U.S.C. 1382a(b)) is
    amended--
                (1) in paragraph (18), by striking ``and'' the 2nd place
            such term appears;
                (2) in paragraph (19), by striking the period and inserting
            ``; and''; and
                (3) by adding at the end the following:
                ``(20) special pay received pursuant to section 310 of
            title 37, United States Code.''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the 1st day of the 2nd month that begins after the date of
    the enactment of this Act.

    SEC. 13254. ELIGIBILITY FOR CHILDREN OF ARMED FORCES PERSONNEL RESIDING
                  OUTSIDE THE UNITED STATES OTHER THAN IN FOREIGN
                  COUNTRIES.

        (a) In General.--Section 1614(a)(1)(B)(ii) (42 U.S.C.
    1382c(a)(1)(B)(ii)) is amended by striking ``the District of Columbia''
    and all that follows to the period and inserting ``and who, for the
    month before the parent reported for such assignment, received a
    benefit under this title''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect on October 1, 1993.

    SEC. 13255. DEFINITION OF DISABILITY FOR CHILDREN UNDER AGE 18 APPLIED
                  TO ALL INDIVIDUALS UNDER AGE 18.

        (a) In General.--Section 1614(a)(3)(A) (42 U.S.C. 1382c(a)(3)(A))
    is amended by striking ``a child'' and inserting ``an individual''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to determinations made on or after the date of the enactment of
    this Act.

    SEC. 13256. VALUATION OF CERTAIN IN-KIND SUPPORT AND MAINTENANCE WHEN
                  THERE IS A COST OF LIVING ADJUSTMENT IN BENEFITS.

        (a) In General.--Section 1611(c) (42 U.S.C. 1382(c)) is amended--
                (1) in paragraph (1), by striking ``and (5)'' and inserting
            ``(5), and (6)''; and
                (2) by redesignating paragraphs (6) and (7) as paragraphs
            (7) and (8), respectively; and
                (3) by inserting after paragraph (5) the following:
        ``(6) The dollar amount in effect under subsection (b) as a result
    of any increase in benefits under this title by reason of section 1617
    shall be used to determine the value of any in-kind support and
    maintenance required to be taken into account in determining the
    benefit payable under this title to an individual (and the eligible
    spouse, if any, of the individual) for the 1st 2 months for which the
    increase in benefits applies.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to benefits paid for months after the calendar year 1993.

    SEC. 13257. EXCLUSION FROM INCOME OF CERTAIN AMOUNTS RECEIVED BY
                  INDIANS FROM INTERESTS HELD IN TRUST.

        (a) In General.--Section 8 of the Act of October 19, 1973, (25
    U.S.C. 1408) is amended by inserting ``, and the first $2,000 per year
    of income received by individual Indians that is derived from such
    interests shall not be considered income,'' after ``resource''.
        (b) Effective Date.--The amendment made by this section shall take
    effect on January 1, 1993.

               CHAPTER 4--AID TO FAMILIES WITH DEPENDENT CHILDREN

    SEC. 13261. 50 PERCENT FEDERAL MATCH OF STATE ADMINISTRATIVE COSTS.

        (a) In General.--Section 403(a)(3) (42 U.S.C. 603(a)(3)) is amended
    by striking ``the sum of'' and all that follows through the end of
    subparagraph (D) and inserting ``50 percent of the total amounts
    expended during such quarter as the Secretary has found necessary for
    the proper and efficient administration of the State plan (including
    any amounts expended by the State to carry out initial evaluations
    under section 486(a)),''.
        (b) Optional Use of Certain Procedures To Verify Immigration Status
    of AFDC Applicants.--Section 1137(d) (42 U.S.C. 1320b-7(d)) is
    amended--
                (1) in each of paragraphs (3) and (4)(B)(i), by inserting
            ``(or, in the case of the program specified in subsection
            (b)(1), may)'' after ``shall''; and
                (2) in paragraph (4), by inserting ``(if required)'' after
            ``verified''.
        (c) Effective Date.--
                (1) In general.--Except as provided in paragraph (2), the
            amendments made by this section shall apply to payments made
            for calendar quarters beginning on or after April 1, 1994.
                (2) Delayed applicability to certain states.--
                        (A) In general.--The Secretary of Health and Human
                    Services may delay the applicability to a qualified
                    State of the amendments made by subsection (a) until
                    the 1st calendar quarter that begins after the close of
                    the 1st regular session of the State legislature that
                    begins after the date of the enactment of this section.
                        (B) Qualified state defined.--As used in
                    subparagraph (A), the term ``qualified State'' means a
                    State that meets such criteria as the Secretary shall
                    establish and apply uniformly, including whether the
                    State legislature meets biennially and does not have a
                    regular session scheduled in calendar year 1994.

    SEC. 13262. DELAY IN EFFECTIVE DATE OF PENALTY FOR FAILURE TO MEET
                  REQUIRED PARTICIPATION RATE FOR UNEMPLOYED PARENTS IN THE
                  JOBS PROGRAM.

        Section 403(l)(4)(B) (42 U.S.C. 603(l)(4)(B)) is amended--
                (1) in clause (i), by striking ``1994'' and inserting
            ``1995'';
                (2) in clause (ii), by striking ``1995'' and inserting
            ``1996'';
                (3) in clause (iii), by striking ``1996'' and inserting
            ``1997''; and
                (4) in clause (iv), by striking ``1997 and 1998'' and
            inserting ``1998 and 1999''.

    SEC. 13263. REPORT TO THE CONGRESS WITH RESPECT TO PERFORMANCE
                  STANDARDS IN THE JOBS PROGRAM.

        Section 487(a) (42 U.S.C. 687(a)) is amended--
                (1) by striking ``3'' and inserting ``4'';
                (2) in paragraph (1), by inserting ``criteria for'' after
            ``develop'';
                (3) in paragraph (2), by striking ``for'' and inserting
            ``with respect to''; and
                (4) in the 2nd sentence, by striking ``under this
            subsection'' and inserting ``with respect to the program under
            this part''.

    SEC. 13264. MEASUREMENT AND REPORTING OF WELFARE PARTICIPATION.

        (a) Congressional Policy.--The Congress hereby declares that--
                (1) it is the policy and responsibility of the Federal
            Government to reduce the rate at which, and the degree to
            which, families depend on income from welfare programs, and the
            duration of welfare participation, to assist families toward
            self-sufficiency, and to increase the living standards of low-
            income families, consistent with other essential national
            goals;
                (2) it is the policy of the United States to strengthen
            families and improve the life prospects of their children, to
            ensure that children grow up in families that are economically
            self-sufficient, and to underscore the responsibility of
            parents to support their children;
                (3) the Federal Government should help welfare recipients
            as well as individuals at risk of welfare participation to
            improve their education and job skills, to obtain access to
            high quality child care and other necessary support services,
            and to take such other steps as may assist them to meet their
            responsibilities to become financially independent; and
                (4) it is the purpose of this section to provide the public
            with generally accepted measures of welfare participation so
            that the public can track such participation over time and
            determine whether progress is being made in reducing the rate
            at which, and the degree to which, families depend on income
            from welfare programs, and the duration of welfare
            participation.
        (b) Development of Welfare Participation Measures and Predictors.--
                (1) In general.--The Secretary of Health and Human Services
            (in this section referred to as the ``Secretary'') in
            consultation with the Secretary of Agriculture shall develop--
                        (A) measures of--
                                (i) the rate at which, and the degree to
                            which, families depend on income from welfare
                            programs; and
                                (ii) the duration of welfare participation;
                            and
                        (B) predictors of welfare participation.
                (2) Interim report.--Not later than 2 years after the date
            of the enactment of this section, the Secretary shall provide
            an interim report containing conclusions resulting from such
            development, to--
                        (A) the Committee on Ways and Means of the House of
                    Representatives;
                        (B) the Committee on Education and Labor of the
                    House of Representatives;
                        (C) the Committee on Agriculture of the House of
                    Representatives;
                        (D) the Committee on Energy and Commerce of the
                    House of Representatives;
                        (E) the Committee on Finance of the Senate;
                        (F) the Committee on Labor and Human Resources of
                    the Senate; and
                        (G) the Committee on Agriculture, Nutrition, and
                    Forestry of the Senate.
        (c) Advisory Board on Welfare Participation.--
                (1) Establishment.--There is established an Advisory Board
            on Welfare Participation (in this section referred to as the
            ``Board'').
                (2) Composition.--The Board shall be composed of 12 members
            with equal numbers to be appointed by the House of
            Representatives, the Senate, and the President. The Board shall
            be composed of experts in the fields of welfare research and
            statistical methodology, representatives of State and local
            welfare agencies, and organizations concerned with welfare
            issues.
                (3) Vacancies.--Any vacancy occurring in the membership of
            the Board shall be filled in the same manner as the original
            appointment for the position being vacated. The vacancy shall
            not affect the power of the remaining members to execute the
            duties of the Board.
                (4) Duties.--Duties of the Board shall include--
                        (A) providing advice and recommendations to the
                    Secretary on the development of measures of the rate at
                    which, and the degree to which, families depend on
                    income from welfare programs, and the duration of
                    welfare participation; and
                        (B) providing advice on the development and
                    presentation of the report required by subsection (d).
                (5) Travel expenses.--Members of the Board shall not be
            compensated, but shall receive 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, for each day the member is engaged in the
            performance of duties away from the home or regular place of
            business of the member.
                (6) Detail of federal employees.--The Secretary shall
            detail, without reimbursement, any of the personnel of the
            Department of Health and Human Services to the Board to assist
            the Board in carrying out its duties. Any detail shall not
            interrupt or otherwise affect the civil service status or
            privileges of the Federal employee.
                (7) Voluntary service.--Notwithstanding section 1342 of
            title 31, United States Code, the Board may accept the
            voluntary services provided by a member of the Board.
                (8) Termination of board.--The Board shall be terminated at
            such time as the Secretary determines the duties described in
            subsection (c)(4) have been completed, but in any case prior to
            the submission of the 1st report required by subsection (d).
        (d) Annual Welfare Participation Reports.--
                (1) Preparation.--The Secretary shall prepare annual
            reports on welfare participation in the United States.
                (2) Coverage.--The report shall include analysis of
            families and individuals receiving assistance under means-
            tested benefit programs, including the program of aid to
            families with dependent children under part A of title IV of
            the Social Security Act (42 U.S.C. 601 et seq.), the food stamp
            program under the Food Stamp Act of 1977 (7 U.S.C. 2011 et
            seq.), and the supplemental security income program under title
            XVI of the Social Security Act (42 U.S.C. 1381 et seq.), or as
            general assistance under programs administered by State and
            local governments.
                (3) Contents.--Each such report shall set forth, for each
            means-tested benefit program described in paragraph (2)--
                        (A) measures of--
                                (i) the rate at which, and the degree to
                            which, families depend on income from welfare
                            programs; and
                                (ii) the duration of welfare participation;
                        (B) trends in the measures;
                        (C) predictors of welfare participation;
                        (D) the causes of welfare participation;
                        (E) patterns of multiple program participation;
                        (F) such other information as the Secretary deems
                    relevant; and
                        (G) such recommendations for legislation, which
                    shall not include proposals to reduce eligibility
                    levels or impose barriers to program access, as the
                    Secretary may determine to be necessary or desirable to
                    reduce--
                                (i) the rate at which, and the degree to
                            which, families depend on income from welfare
                            programs; and
                                (ii) the duration of welfare participation.
                (4) Submission.--The Secretary shall submit such reports
            not later than 3 years after the date of the enactment of this
            section, and annually thereafter, to the committees specified
            in subsection (b)(2). Each such report shall be transmitted
            during the 1st 60 days of each regular session of the Congress.

    SEC. 13265. NEW HOPE DEMONSTRATION PROJECT.

        (a) In General.--The Secretary of Health and Human Services (in
    this section referred to as the ``Secretary'') shall provide for a
    demonstration project for a qualified program to be conducted in
    Milwaukee, Wisconsin, in accordance with this section.
        (b) Payments.--For each calendar quarter in which there is a
    qualified program approved under this subsection, the Secretary shall
    pay to the operator of the qualified program, for no more than 20
    calendar quarters, an amount equal to the aggregate amount that would
    otherwise have been payable to the State with respect to participants
    in the program for such calendar quarter, in the absence of the
    program, for cash assistance and child care under part A of title IV of
    the Social Security Act and for administrative expenses related to such
    assistance. In calculating the amount of such payment, the expenses of
    the program incurred in evaluating the effects of the program may be
    treated as amounts necessary for the proper and efficient
    administration of the program, for purposes of part A of title IV of
    such Act.
        (c) Demonstration Project Described.--For purposes of this section,
    the term ``qualified program'' means a program operated--
                (1) by The New Hope Project, Inc., a private, not-for-
            profit corporation incorporated under the laws of the State of
            Wisconsin (in this section referred to as the ``operator''),
            which offers low-income residents of Milwaukee, Wisconsin,
            employment, wage supplements, child care, health care, and
            counseling and training for job retention or advancement; and
                (2) in accordance with an application submitted by the
            operator of the program and approved by the Secretary based on
            the Secretary's determination that the application satisfies
            the requirements of subsection (d).
        (d) Contents of Application.--The operator of the qualified program
    shall provide, in its application to conduct a demonstration project
    for the program, that the following terms and conditions will be met:
                (1) The operator will develop and implement an evaluation
            plan designed to provide reliable information on the impact and
            implementation of the program. The evaluation plan will include
            adequately sized groups of project participants and control
            groups assigned at random.
                (2) The operator will develop and implement a plan
            addressing the services and assistance to be provided by the
            program, the timing and determination of payments from the
            Secretary to the operator of the program, and the roles and
            responsibilities of the Secretary and the operator with respect
            to meeting the requirements of this paragraph.
                (3) The operator will specify a methodology for determining
            expenditures to be paid to the operator by the Secretary, with
            assistance from the Secretary in calculating the amount that
            would otherwise have been payable to the State in the absence
            of the program, pursuant to subsection (b).
                (4) The operator will issue an interim and final report on
            the results of the evaluation described in paragraph (1) to the
            Secretary at such times as required by the Secretary.
        (e) Effective Date.--This section shall take effect on the 1st day
    of the 1st calendar quarter that begins after the date of enactment of
    this Act.

    SEC. 13266. DELAY IN REQUIREMENT THAT OUTLYING AREAS OPERATE AN AFDC-UP
                  PROGRAM.

        Section 401(g)(2) of the Family Support Act of 1988 (42 U.S.C. 602
    note; 102 Stat. 2396) is amended by striking ``October 1, 1992'' and
    inserting ``the date of the repeal of the limitations contained in
    section 1108(a) of the Social Security Act on payments to such
    jurisdictions for purposes of making maintenance payments under parts A
    and E of title IV of such Act''.

    SEC. 13267. ADULT IN FAMILY OR HOUSEHOLD ALLOWED TO ATTEST TO
                  CITIZENSHIP STATUS OF FAMILY OR HOUSEHOLD MEMBERS.

        (a) In General.--Section 1137(d)(1)(A) (42 U.S.C. 1320b-7(d)(1)(A))
    is amended--
                (1) by inserting ``(i)'' after ``(1)(A)'';
                (2) by inserting ``(other than the aid to families with
            dependent children program under part A of title IV of this
            Act)'' after ``any program listed in subsection (b)''; and
                (3) by adding at the end the following:
                ``(ii) The State shall require, as a condition of an
            individual's eligibility for benefits under the aid to families
            with dependent children program under part A of title IV of
            this Act, a declaration in writing, under penalty of perjury--
                        ``(I) in the case of an individual who is an adult
                    member of a family or household applying for or
                    receiving such benefits, by such individual or another
                    adult member of such family or household on such
                    individual's behalf;
                        ``(II) in the case of an individual who is a child,
                    by an adult on the individual's behalf; or
                        ``(III) in the case of an individual born into a
                    family or household receiving such benefits, by an
                    adult member of such individual's family or household
                    on the individual's behalf no later than the next
                    redetermination of eligibility of such family or
                    household following the birth of such individual,
            stating whether the individual is a citizen or national of the
            United States, and, if that individual is not a citizen or
            national of the United States, that the individual is in a
            satisfactory immigration status.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    become effective with respect to benefits provided on or after October
    1, 1993.

    SEC. 13268. INCREASE IN STEPPARENT INCOME DISREGARD.

        (a) In General.--Section 402(a)(31) (42 U.S.C. 602(a)(31)) is
    amended by striking ``$75'' and inserting ``$90''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect on October 1, 1993, and shall apply to payments under part
    A of title IV of the Social Security Act for fiscal year 1994 and such
    payments for succeeding fiscal years.

    SEC. 13269. EXTENSION OF NEW YORK STATE CHILD SUPPORT DEMONSTRATION
                  PROGRAM.

        Section 9122(g)(1) of the Omnibus Budget Reconciliation Act of 1987
    (42 U.S.C. 602 note; 101 Stat. 1330-312) is amended by striking
    ``five'' and inserting ``10''.

    SEC. 13270. EARLY CHILDHOOD DEVELOPMENT PROJECTS.

        Section 501(a) of the Family Support Act of 1988 (42 U.S.C. 1315
    note; 102 Stat. 2400) is amended by adding at the end the following:
        ``(4) For grants to States to conduct demonstration projects under
    this subsection, there are authorized to be appropriated not to exceed
    $3,000,000 for each of the fiscal years 1994 through 1998.''.

                       CHAPTER 5--UNEMPLOYMENT INSURANCE

    SEC. 13271. TREATMENT OF SHORT-TIME COMPENSATION PROGRAMS.

        (a) General Rule.--Section 3306 of the Internal Revenue Code of
    1986 is amended by adding at the end thereof the following new
    subsection:
        ``(t) Short-Time Compensation Program.--For purposes of this
    chapter, the term `short-time compensation program' means a program
    under which--
                ``(1) individuals whose workweeks have been reduced by at
            least 10 percent are eligible for unemployment compensation;
                ``(2) the amount of unemployment compensation payable to
            any such individual is a pro rata portion of the unemployment
            compensation which would be payable to the individual if the
            individual were totally unemployed;
                ``(3) eligible employees are not required to meet the
            availability for work or work search test requirements while
            collecting short-time compensation benefits, but are required
            to be available for their normal workweek;
                ``(4) eligible employees may participate in an employer-
            sponsored training program to enhance jobs skills if such
            program has been approved by the State agency;
                ``(5) there is a reduction in the number of hours worked by
            employees in lieu of temporary layoffs;
                ``(6) there is a plan of an employer (or an employers
            association which is party to a collective bargaining
            agreement) approved by the State agency consisting of factors
            in this subsection or other factors as the Secretary of Labor
            may find relevant; and
                ``(7) the employer continues to provide health benefits and
            pension benefits under a pension plan (as defined in section
            3(35) of the Employee Retirement Income Security Act of 1974)
            to any employee whose workweek is reduced under such plan.
    A short-time compensation program may also contain such other factors
    as the Secretary of Labor finds relevant.''.
        (b) Conforming Amendments.--
                (1) Subparagraph (E) of section 3304(a)(4) of such Code is
            amended to read as follows:
                        ``(E) amounts may be withdrawn for the payment of
                    short-time compensation under a short-time compensation
                    program approved by the Secretary of Labor:''.
                (2) Paragraph (4) of section 3306(f) of such Code is
            amended to read as follows:
                ``(4) amounts may be withdrawn for the payment of short-
            time compensation under a short-time compensation program
            approved by the Secretary of Labor.''.
                (3) Section 303(a)(5) of the Social Security Act is amended
            by striking ``the payment of short-time compensation under a
            plan approved by the Secretary of Labor'' and inserting ``the
            payment of short-time compensation under a short-time
            compensation program (as defined in section 3306(t) of the
            Internal Revenue Code of 1986) approved by the Secretary of
            Labor''.

    SEC. 13272. TECHNICAL AMENDMENT TO UNEMPLOYMENT TRUST FUND.

        Paragraph (1) of section 905(b) of the Social Security Act is
    amended to read as follows:
        ``(b)(1) Except as provided in paragraph (3), the Secretary of the
    Treasury shall transfer (as of the close of each month), from the
    employment security administration account to the extended unemployment
    compensation account established by subsection (a), an amount equal to
    20 percent of the amount by which--
                ``(A) the transfers to such account pursuant to section
            901(b)(2) during such month, exceed
                ``(B) the payments during such month from the employment
            security administration account pursuant to section 901(b)(3)
            and (d).
    If for any month the payments referred to in subparagraph (B) exceed
    the transfers referred to in subparagraph (A), proper adjustments shall
    be made in the amounts subsequently transferred.''.

    SEC. 13273. EXTENSION OF REPORTING DATE FOR ADVISORY COUNCIL.

        In the case of the first Advisory Council on Unemployment
    Compensation established under section 908 of the Social Security Act,
    subsection (f) of such section 908 shall be applied--
                (1) by substituting ``3rd year'' for ``2d year'' in
            paragraph (1), and
                (2) by substituting ``February 1, 1995'' for ``February 1,
            1994'' in paragraph (2).

    SEC. 13274. CLARIFICATION OF EMERGENCY UNEMPLOYMENT BENEFITS
                  PROVISIONS.

        (a) In General.--Subclauses (II) and (III) of section
    102(b)(2)(A)(v) of the Emergency Unemployment Compensation Act of 1991
    are amended to read as follows:
                                        ``(II) The requirements of this
                                    subclause are met for any week if the
                                    national rate of total unemployment
                                    (seasonally adjusted) for each of the 2
                                    most recent calendar months (not
                                    averaged) for which data are published
                                    before the close of such week is less
                                    than 7 percent, and if the requirements
                                    of subclause (III) are not met for such
                                    week.
                                        ``(III) The requirements of this
                                    subclause are met for any week if the
                                    national rate of total unemployment
                                    (seasonally adjusted) for each of the 2
                                    most recent calendar months (not
                                    averaged) for which data are published
                                    before the close of such week is less
                                    than 6.8 percent.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply as if included in the amendments made by section 101(b) of the
    Unemployment Compensation Amendments of 1992.

    SEC. 13275. MODIFICATIONS TO EXTENDED UNEMPLOYMENT PROGRAM.

        (a) Increase in Reimbursement Rate.--Subsection (a) of section 204
    of the Federal-State Extended Unemployment Compensation Act of 1970 is
    amended by striking ``one-half'' and inserting ``75 percent''.
        (b) Repeal of Special Eligibility Requirements.--Subsection (a) of
    section 202 of such Act is amended--
                (1) by striking paragraphs (3), (4), and (7),
                (2) by redesignating paragraphs (5) and (6) as paragraphs
            (3) and (4), respectively, and
                (3) by striking ``paragraphs (3), (4), and (5)'' in
            paragraph (4) (as redesignated by paragraph (1) of this
            subsection) and inserting ``paragraph (3)''.
        (c) Effective Date.--
                (1) In general.--The amendments made by this section shall
            apply to weeks beginning after October 2, 1993.
                (2) Special rule.--In the case of any State the legislature
            of which has not been in session for at least 30 calendar days
            (whether or not successive) between the date of the enactment
            of this Act and October 1, 1993, the amendment made by
            subsection (b) shall not be a requirement of the State law of
            such State before the date 30 calendar days after the 1st day
            on which such legislature is in session on or after October 1,
            1993.

    SEC. 13276. EXTENSION OF CURRENT FEDERAL UNEMPLOYMENT RATE.

        Section 3301 of the Internal Revenue Code of 1986 is amended--
                (1) by striking ``1996'' in paragraph (1) and inserting
            ``1998'', and
                (2) by striking ``1997'' in paragraph (2) and inserting
            ``1999''.

    SEC. 13277. DISCLOSURE OF INFORMATION TO RAILROAD RETIREMENT BOARD.

        Section 6103(l)(1)(C) of the Internal Revenue Code of 1986 is
    amended to read as follows:
                        ``(C) taxes imposed by chapters 22 and 23A, to the
                    Railroad Retirement Board for purposes of its
                    administration of the Railroad Retirement and Railroad
                    Unemployment Insurance Acts.''.

                        CHAPTER 6--TECHNICAL PROVISIONS

    SEC. 13281. CORRECTIONS RELATED TO THE INCOME SECURITY AND HUMAN
                  RESOURCES PROVISIONS OF THE OMNIBUS BUDGET RECONCILIATION
                  ACT OF 1990.

        (a) Amendment Related to Section 5035(a)(2).--Section 5035(a)(2) of
    the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508) is
    amended by striking ``a semicolon'' and inserting ```; and'''.
        (b) Repeal of Provision Inadvertently Included.--Section 5057 of
    the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508), and
    the amendment made by such section, are hereby repealed, and section
    1139(d) of the Social Security Act shall be applied and administered as
    if such section 5057 had never been enacted.
        (c) Amendment Related to Section 5105(d)(1)(B).--Section
    5105(d)(1)(B) of the Omnibus Budget Reconciliation Act of 1990 (Public
    Law 101-508; 104 Stat. 1388-266) is amended to read as follows:
                        ``(B) Title xvi.--Section 1631(a)(2)(F) (42 U.S.C.
                    1383(a)(2)(F)), as so redesignated by subsection (c)(2)
                    of this section, is amended to read as follows:
        ```(F) The Secretary shall include as a part of the annual report
    required under section 704 information with respect to the
    implementation of the preceding provisions of this paragraph,
    including--
                ```(i) the number of cases in which the representative
            payee was changed;
                ```(ii) the number of cases discovered where there has been
            a misuse of funds;
                ```(iii) how any such cases were dealt with by the
            Secretary;
                ```(iv) the final disposition of such cases (including any
            criminal penalties imposed); and
                ```(v) such other information as the Secretary determines
            to be appropriate.'.''.
        (d) Amendment Related to Section 5105(a)(1)(B).--The 2nd paragraph
    of section 1631(a) (42 U.S.C. 1383(a)) is amended by striking ``(A)(i)
    Payments'' and inserting ``(2)(A)(i) Payments''.
        (e) Amendments Related to Section 5105(b).--Section 1631(a)(2)(C)
    (42 U.S.C. 1383(a)(2)(C)) is amended--
                (1) by striking clause (ii);
                (2) by redesignating clauses (iii), (iv), and (v) as
            clauses (ii), (iii), and (iv), respectively; and
                (3) in clause (iv) (as so redesignated), by striking
            ``(iii), and (iv)'' and inserting ``and (iii)''.
        (f) Amendments Related to Section 5107(a)(2)(B).--Section
    1631(c)(1)(B) (42 U.S.C. 1383(c)(1)(B)) is amended by striking
    ``paragraph (1)'' each place such term appears and inserting
    ``subparagraph (A)''.
        (g) Amendment Related to Section 5109(a)(2).--Section 1631 (42
    U.S.C. 1383) is amended by redesignating the subsection (n) added by
    section 5109(a)(2) of the Omnibus Budget Reconciliation Act of 1990, as
    subsection (o).
        (h) Amendments Related to Section 11115(b)(2).--Section 11115(b)(2)
    of the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508)
    is amended--
                (1) in subparagraph (A), by striking ``paragraph (8)'' and
            inserting ``paragraph (9)'';
                (2) in subparagraph (B), by striking ``paragraph (9)'' and
            inserting ``paragraph (10)''; and
                (3) in subparagraph (C), by redesignating the new paragraph
            added thereby as paragraph (11).
        (i) Amendment Related to Section 13101(d)(2).--Section 256(k)(2)(A)
    of the Balanced Budget and Emergency Deficit Control Act of 1985 is
    amended--
                (1) by striking ``--'' the 2nd place it appears and all
            that follows through ``(I)''; and
                (2) by striking ``; or'' and all that follows through
            ``(II)'' and inserting ``, except that a State may not be
            allotted an amount under this subparagraph that exceeds''.
        (j) Effective Date.--Each amendment made by this section shall take
    effect as if included in the provision of the Omnibus Budget
    Reconciliation Act of 1990 to which the amendment relates at the time
    such provision became law.

    SEC. 13282. TECHNICAL CORRECTIONS RELATED TO THE HUMAN RESOURCE AND
                  INCOME SECURITY PROVISIONS OF THE OMNIBUS BUDGET
                  RECONCILIATION ACT OF 1989.

        (a) Amendment Relating to Section 8004(a).--Section 408(m)(2)(A)
    (42 U.S.C. 608(m)(2)(A)) is amended by striking ``a fiscal'' and
    inserting ``the fiscal''.
        (b) Amendment Relating to Section 8006(a).--Section 473(a)(6)(B)
    (42 U.S.C. 673(a)(6)(B)) is amended by striking ``474(a)(3)(B)'' and
    inserting ``474(a)(3)(C)''.
        (c) Amendment Relating to Section 8007(b)(3).--Subparagraph (D) of
    section 475(5) (42 U.S.C. 675(5)(D)) is amended by moving such
    subparagraph 2 ems to the right so that the left margin of such
    subparagraph is aligned with the left margin of subparagraph (C) of
    such section.
        (d) Effective Date.--Each amendment made by this section shall take
    effect as if the amendment had been included in the provision of the
    Omnibus Budget Reconciliation Act of 1989 to which the amendment
    relates, at the time the provision became law.

    SEC. 13283. ELIMINATION OF OBSOLETE PROVISIONS RELATING TO TREATMENT OF
                  THE EARNED INCOME TAX CREDIT.

        (a) Treatment of EITC as Earned Income.--Section 1612(a)(1) (42
    U.S.C. 1382a(a)(1)) is amended by striking subparagraph (C) and by
    redesignating subparagraphs (D) and (E) as subparagraphs (C) and (D),
    respectively.
        (b) Adjustment of Benefits Due to Treatment of EITC as Earned
    Income.--Section 1631(b) (42 U.S.C. 1383(b)) is amended by striking
    paragraph (3) and by redesignating paragraphs (4) and (5) as paragraphs
    (3) and (4), respectively.

    SEC. 13284. REDESIGNATION OF CERTAIN PROVISIONS.

        Section 1631(e)(6) (42 U.S.C. 1383(e)(6)) is amended by
    redesignating subparagraphs (1) and (2) as subparagraphs (A) and (B),
    respectively.

                          Subtitle C--Medicare Program

    SEC. 13400. REFERENCES IN SUBTITLE; TABLE OF CONTENTS OF SUBTITLE.

        (a) Amendments to Social Security Act.--Except as otherwise
    specifically provided, whenever in this subtitle an amendment is
    expressed in terms of an amendment to or repeal of a section or other
    provision, the reference shall be considered to be made to that section
    or other provision of the Social Security Act.
        (b) References to OBRA.--In this subtitle, the terms ``OBRA-1986'',
    ``OBRA-1987'', ``OBRA-1989'', and ``OBRA-1990'' refer to the Omnibus
    Budget Reconciliation Act of 1986 (Public Law 99-509), the Omnibus
    Budget Reconciliation Act of 1987 (Public Law 100-203), the Omnibus
    Budget Reconciliation Act of 1989 (Public Law 101-239), and the Omnibus
    Budget Reconciliation Act of 1990 (Public Law 101-508), respectively.
        (c) Table of Contents of Subtitle.--The table of contents of this
    subtitle is as follows:

    Sec. 13400. References in subtitle; table of contents of subtitle.
      subchapter a--elimination of inflation update for services provided
                                  under part a
    Sec. 13401. Inpatient hospital services and hospice care.
    Sec. 13402. Limits on per diem routine service costs for extended care
               subchapter b--other provisions relating to part a
    Sec. 13411. Wage index provisions.
    Sec. 13412. Transition for hospital outlier thresholds.
    Sec. 13413. Essential access community hospital (EACH) amendments.
    Sec. 13414. Rural health transition grant program extension.
    Sec. 13415. Regional referral center extension.
    Sec. 13416. Medicare-dependent, small rural hospital payment extension.
    Sec. 13417. Extension of regional floor.
    Sec. 13418. Extension of rural hospital demonstration.
    Sec. 13419. Hemophilia pass-through extension.
    Sec. 13420. State hospital payment programs.
    Sec. 13421. Psychology services in hospitals.
    Sec. 13422. Graduate medical education payments in hospital-owned
                                community health centers.
    Sec. 13423. Treatment of certain military facilities.
    Sec. 13424. Epilepsy DRG.
    Sec. 13425. Skilled nursing facility wage index.
    Sec. 13426. Hospice notification to beneficiaries.
    Sec. 13427. Reduction in part A premium for certain individuals with 30
                                or more quarters of Social Security
                                coverage.
    Sec. 13428. Periodic updates to salary equivalency guidelines for
                                physical therapy and respiratory therapy
                                services.
    Sec. 13429. Extension of deadline for application for geographic
                                classification for certain reclassified
                                hospitals.
    Sec. 13430. Clarification of DRG payment window expansion;
                                miscellaneous and technical corrections.
                 subchapter a--elimination of inflation update
    Sec. 13431. Elimination of inflation update for physician and related
                                professional services.
    Sec. 13432. Elimination of cost-of-living adjustments for certain items
                                and services.
    Sec. 13433. Ambulatory surgical center services.
    Sec. 13434. Other isubchapter b--physicians' services
    Sec. 13441. Reinstating separate payment for the interpretation of
                                electrocardiograms (EKGs).
    Sec. 13442. Payments for new physicians and practitioners.
    Sec. 13443. Retaining payment for actual anesthesia time.
    Sec. 13444. Geographic cost of practice index refinements.
    Sec. 13445. Extra-billing.
    Sec. 13446. Relative values for pediatric services.
    Sec. 13447. Antigens under physician fee schedule.
    Sec. 13448. Administration of claims relating to physicians' services.
    Sec. 13449.subchapter c--ambulatory surgical center services
    Sec. 13451. Designation of certain hospitals as eye or eye and ear
                                hospitals.
    Sec. 13452. Treatment of intraocular lenses.
    Sec. 13453. Techsubchapter d--durable medical equipment
    Sec. 13461. Certification of suppliers.
    Sec. 13462. Prohibition against carrier forum shopping.
    Sec. 13463. Restrictions on certain marketing and sales activities.
    Sec. 13464. Anti-kickback clarification.
    Sec. 13465. Limitations on beneficiary liability for noncovered
                                services.
    Sec. 13466. Adjustments for inherent reasonableness.
    Sec. 13467. Treatment of nebulizers and aspirators.
    Sec. 13468. Payment for ostomy supplies and other supplies.
    Sec. 13469. Miscellansubchapter e--other provisions.
    Sec. 13471. Clarifying payments for medically directed certified
                                registered nurse anesthetist services.
    Sec. 13472. Extension of Alzheimer's disease demonstration projects.
    Sec. 13473. Oral cancer drugs.
    Sec. 13474. Part B premium for late enrollment.
    Sec. 13475. Coverage of services of speech-language pathologists and
                                audiologists.
    Sec. 13476. Extension of municipal health service demonstration
                                projects.
    Sec. 13477. Treatment of certain Indian health programs and facilities
                                as Federally-qualified health centers.
    Sec. 13478. Miscellanesubchapter f--part b premiums.
    Sec. 13481. Part B premium.
                Chaptesubchapter a--elimination of updatesand B
    Sec. 13501. Elimination of cost-of-living update in per resident
                                amounts for direct medical education.
    Sec. 13502. Elimination of inflation update in cost limits for home
               subchapter b--medicare secondary payer provisions
    Sec. 13511. Extension of transfer of data.
    Sec. 13512. 3-year extension of medicare secondary payer to disabled
                                beneficiaries.
    Sec. 13513. 3-year extension of 18-month rule for ESRD beneficiaries.
    Sec. 13514. Msubchapter c--physician ownership and referral
    Sec. 13521. Application of medicare ban on self-referrals to all
                                payers.
    Sec. 13522. Extension of self-referral ban to additional specified
                                services.
    Sec. 13523. Exceptions for both ownership and compensation
                                arrangements.
    Sec. 13524. Exceptions related only to ownership or investment.
    Sec. 13525. Exceptions related only to compensation arrangements.
    Sec. 13526. Clarification concerning civil money penalty sanctions.
    Sec. 13527. Requirements for group practice.
    Sec. 13538. No Federal preemption of more restrictive State laws.
    Sec. 13529. Miscellaneous provisions.
    Sec. 13530. Effectivesubchapter d--other provisions
    Sec. 13551. Direct graduate medical education.
    Sec. 13552. Immunosuppressive drug therapy.
    Sec. 13553. Reduction in payments for erythropoientin.
    Sec. 13554. Qualified medicare beneficiary outreach.
    Sec. 13555. Extension of social health maintenance organization
                                demonstrations.
    Sec. 13556. Hospice notification to home health beneficiaries.
    Sec. 13557. Interest payments.
    Sec. 13558. Peer review organizations.
    Sec. 13559. Health maintenance organizations.
    Sec. 13560. Medicare administration budget process.
    Sec. 13561. Other provisions.
              Chapter 4--Medicare Supplemental Insurance Policies

    Sec. 13571. Standards for medicare supplemental insurance policies.
           Chapter 5--Treatment of Certain State Health Care Programs

    Sec. 13581. Treatment of certain State health care programs.

                    CHAPTER 1--PROVISIONS RELATING TO PART A

      Subchapter A--Elimination of Inflation Update for Services Provided
                                  Under Part A

    SEC. 13401. INPATIENT HOSPITAL SERVICES AND HOSPICE CARE.

        Section 1886(b)(3)(B)(iii) (42 U.S.C. 1395ww(b)(3)(B)(iii)) is
    amended--
                (1) by striking ``(iii) For purposes of this subparagraph''
            and inserting ``(iii)(I) Except as provided in subclause (II),
            for purposes of this subparagraph'', and
                (2) by adding at the end the following new subclause:
        ``(II) For purposes of this subparagraph and section
    1814(i)(1)(C)(ii), the `market basket percentage increase', with
    respect to cost reporting periods and discharges occurring in fiscal
    year 1994 or 1995, is 0 percent.''.

    SEC. 13402. LIMITS ON PER DIEM ROUTINE SERVICE COSTS FOR EXTENDED CARE
                  SERVICES.

        The Secretary of Health and Human Services shall not provide for
    any increase, on the basis of inflation or changes in the cost of goods
    and services, in the limits on per diem routine service costs for
    extended care services under section 1888 of the Social Security Act
    for cost reporting periods beginning during fiscal year 1994 or fiscal
    year 1995.

               Subchapter B--Other Provisions Relating to Part A

    SEC. 13411. WAGE INDEX PROVISIONS.

        (a) Wage Index Hold Harmless Protection.--
                (1) In general.--Section 1886(d)(8)(C) (42 U.S.C.
            1395ww(d)(8)(C)) is amended by adding at the end the following
            new clause:
        ``(iv) The application of subparagraph (B) or a decision of the
    Medicare Geographic Classification Review Board or the Secretary under
    paragraph (1) may not result in a reduction in an urban area's wage
    index if--
                ``(I) the urban area has a wage index below the wage index
            for rural areas in the State in which it is located; or
                ``(II) the urban area is located in a State that is
            composed of a single urban area.''.
                (2) No standardized amount adjustment.--The Secretary of
            Health and Human Services shall not revise the fiscal year 1992
            or fiscal year 1993 standardized amounts pursuant to
            subsections (d)(3)(B) and (d)(8)(D) of section 1886 of the
            Social Security Act to account for the amendment made by
            paragraph (1).
                (3) Effective date.--The amendment made by paragraph (1)
            shall apply to discharges occurring--
                        (A) on or after October 1, 1991, in the case of
                    hospitals located in an urban area described in section
                    1886(d)(8)(C)(iv)(I) of the Social Security Act (as
                    added by paragraph (1)); and
                        (B) on or after the date of the enactment of this
                    Act, in the case of hospitals located in an urban area
                    described in section 1886(d)(8)(C)(iv)(II) of the
                    Social Security Act (as added by paragraph (1)).
        (b) Updating Standards for Treating Rural Counties as Urban
    Counties Based on Rates of Commutation.--
                (1) In general.--Section 1886(d)(8)(B) (42 U.S.C.
            1395ww(d)(8)(B)) is amended--
                        (A) by striking ``standards'' each place it appears
                    and inserting ``standards most recently used'', and
                        (B) by striking ``published in the Federal Register
                    on January 3, 1980''.
                (2) Hold harmless for counties currently treated as
            urban.--Any hospital that is treated as being located in an
            urban metropolitan statistical area pursuant to section
            1886(d)(8)(B) of the Social Security Act as of September 30,
            1992, shall continue to be so treated notwithstanding the
            amendments made by paragraph (1).
                (3) Effective date.--The amendments made by paragraph (1)
            shall be effective on October 1, 1993.
        (c) Use of Occupational Mix in Guidelines.--
                (1) In general.--Section 1886(d)(10)(D)(i)(I) (42 U.S.C.
            1395ww(d)(10)(D)(i)(I)) is amended by inserting ``(to the
            extent the Secretary determines appropriate)'' after ``taking
            into account''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall take effect as if included in the enactment of OBRA-1989.

    SEC. 13412. TRANSITION FOR HOSPITAL OUTLIER THRESHOLDS.

        Section 1886(d)(5)(A) (42 U.S.C. 1395ww(d)(5)(A)) is amended--
                (1) in clause (i), by striking ``The Secretary'' and
            inserting ``For discharges occurring during fiscal years ending
            on or before September 30, 1997, the Secretary''; and
                (2) by adding at the end the following new clauses:
        ``(v) The Secretary shall provide that--
                ``(I) the day outlier percentage for fiscal year 1995 shall
            be 75 percent of the day outlier percentage for fiscal year
            1994;
                ``(II) the day outlier percentage for fiscal year 1996
            shall be 50 percent of the day outlier percentage for fiscal
            year 1994; and
                ``(III) the day outlier percentage for fiscal year 1997
            shall be 25 percent of the day outlier percentage for fiscal
            year 1994.
        ``(vi) For purposes of this subparagraph, the term `day outlier
    percentage' means, for a fiscal year, the percentage of the total
    additional payments made by the Secretary under this subparagraph for
    discharges in that fiscal year which are additional payments under
    clause (i).''.

    SEC. 13413. ESSENTIAL ACCESS COMMUNITY HOSPITAL (EACH) AMENDMENTS.

        (a) Increasing Number of Participating States.--Section 1820(a)(1)
    (42 U.S.C. 1395i-4(a)(1)) is amended by striking ``7'' and inserting
    ``9''.
        (b) Treatment of Inpatient Hospital Services Provided in Rural
    Primary Care Hospitals.--
                (1) In general.--Section 1820(f)(1)(F) (42 U.S.C. 1395i-
            4(f)(1)(F)) is amended to read as follows:
                        ``(F) subject to paragraph (4), provides not more
                    than 6 inpatient beds (meeting such conditions as the
                    Secretary may establish) for providing inpatient care
                    to patients requiring stabilization before discharge or
                    transfer to a hospital, except that the facility may
                    not provide any inpatient hospital services--
                                ``(i) to any patient whose attending
                            physician does not certify that the patient may
                            reasonably be expected to be discharged or
                            transferred to a hospital within 72 hours of
                            admission to the facility; or
                                ``(ii) consisting of surgery or any other
                            service requiring the use of general anesthesia
                            (other than surgical procedures specified by
                            the Secretary under section 1833(i)(1)(A)),
                            unless the attending physician certifies that
                            the risk associated with transferring the
                            patient to a hospital for such services
                            outweighs the benefits of transferring the
                            patient to a hospital for such services.''.
                (2) Limitation on average length of stay.--Section 1820(f)
            (42 U.S.C. 1395i-4(f)) is amended by adding at the end the
            following new paragraph:
                ``(4) Limitation on average length of inpatient stays.--The
            Secretary may terminate a designation of a rural primary care
            hospital under paragraph (1) if the Secretary finds that the
            average length of stay for inpatients at the facility during
            the previous year in which the designation was in effect
            exceeded 72 hours. In determining the compliance of a facility
            with the requirement of the previous sentence, there shall not
            be taken into account periods of stay of inpatients in excess
            of 72 hours to the extent such periods exceed 72 hours because
            transfer to a hospital is precluded because of inclement
            weather or other emergency conditions.''.
                (3) Conforming amendment.--Section 1814(a)(8) (42 U.S.C.
            1395f(a)(8)) is amended by striking ``such services'' and all
            that follows and inserting ``the individual may reasonably be
            expected to be discharged or transferred to a hospital within
            72 hours after admission to the rural primary care hospital.''.
                (4) GAO reports.--Not later than 2 years after the date of
            the enactment of this Act, the Comptroller General shall submit
            reports to Congress on--
                        (A) the application of the requirements under
                    section 1820(f) of the Social Security Act (as amended
                    by this subsection) that rural primary care hospitals
                    provide inpatient care only to those individuals whose
                    attending physicians certify may reasonably be expected
                    to be discharged within 72 hours after admission and
                    maintain an average length of inpatient stay during a
                    year that does not exceed 72 hours; and
                        (B) the extent to which such requirements have
                    resulted in such hospitals providing inpatient care
                    beyond their capabilities or have limited the ability
                    of such hospitals to provide needed services.
        (c) Designation of Hospitals.--
                (1) Permitting designation of hospitals located in urban
            areas.--
                        (A) In general.--Section 1820 (42 U.S.C. 1395i-4)
                    is amended--
                                (i) by striking paragraph (1) of subsection
                            (e) and redesignating paragraphs (2) through
                            (6) as paragraphs (1) through (5); and
                                (ii) in subsection (e)(1)(A) (as
                            redesignated by subparagraph (A))--
                                        (I) by striking ``is located'' and
                                    inserting ``except in the case of a
                                    hospital located in an urban area, is
                                    located'',
                                        (II) by striking ``, (ii)'' and
                                    inserting ``or (ii)'',
                                        (III) by striking ``or (iii)'' and
                                    all that follows through ``section,'',
                                    and
                                        (IV) in subsection (i)(1)(B), by
                                    striking ``paragraph (3)'' and
                                    inserting ``paragraph (2)''.
                        (B) No change in medicare prospective payment.--
                    Section 1886(d)(5)(D) (42 U.S.C. 1395ww(d)(5)(D)) is
                    amended--
                                (i) in clause (iii)(III), by inserting
                            ``located in a rural area and'' after ``that
                            is'', and
                                (ii) in clause (v), by inserting ``located
                            in a rural area and'' after ``in the case of a
                            hospital''.
                (2) Permitting hospitals located in adjoining states to
            participate in state program.--
                        (A) In general.--Section 1820 (42 U.S.C. 1395i-4)
                    is amended--
                                (i) by redesignating subsection (k) as
                            subsection (l); and
                                (ii) by inserting after subsection (j) the
                            following new subsection:
        ``(k) Eligibility of Hospitals Not Located in Participating
    States.--Notwithstanding any other provision of this section--
                ``(1) for purposes of including a hospital or facility as a
            member institution of a rural health network, a State may
            designate a hospital or facility that is not located in the
            State as an essential access community hospital or a rural
            primary care hospital if the hospital or facility is located in
            an adjoining State and is otherwise eligible for designation as
            such a hospital;
                ``(2) the Secretary may designate a hospital or facility
            that is not located in a State receiving a grant under
            subsection (a)(1) as an essential access community hospital or
            a rural primary care hospital if the hospital or facility is a
            member institution of a rural health network of a State
            receiving a grant under such subsection; and
                ``(3) a hospital or facility designated pursuant to this
            subsection shall be eligible to receive a grant under
            subsection (a)(2).''.
                        (B) Conforming amendments.--(i) Section 1820(c)(1)
                    (42 U.S.C. 1395i-4(c)(1)) is amended by striking
                    ``paragraph (3)'' and inserting ``paragraph (3) or
                    subsection (k)''.
                        (ii) Paragraphs (1)(A) and (2)(A) of section
                    1820(i) (42 U.S.C. 1395i-4(i)) are each amended--
                                (I) in clause (i), by striking ``(a)(1)''
                            and inserting ``(a)(1) (except as provided in
                            subsection (k))'', and
                                (II) in clause (ii), by striking
                            ``subparagraph (B)'' and inserting
                            ``subparagraph (B) or subsection (k)''.
        (d) Skilled Nursing Services in Rural Primary Care Hospitals.--
    Section 1820(f)(3) (42 U.S.C. 1395i-4(f)(3)) is amended by striking
    ``because the facility'' and all that follows and inserting the
    following: ``because, at the time the facility applies to the State for
    designation as a rural primary care hospital, there is in effect an
    agreement between the facility and the Secretary under section 1883
    under which the facility's inpatient hospital facilities are used for
    the furnishing of extended care services, except that the number of
    beds used for the furnishing of such services may not exceed the total
    number of licensed inpatient beds at the time the facility applies to
    the State for such designation (minus the number of inpatient beds used
    for providing inpatient care pursuant to paragraph (1)(F)). For
    purposes of the previous sentence, the number of beds of the facility
    used for the furnishing of extended care services shall not include any
    beds of a unit of the facility that is licensed as a distinct-part
    skilled nursing facility at the time the facility applies to the State
    for designation as a rural primary care hospital.''.
        (e) Payment for Outpatient Rural Primary Care Hospital Services.--
                (1) Implementation of prospective payment system.--Section
            1834(g) (42 U.S.C. 1395m(g)) is amended--
                        (A) in paragraph (1), by striking ``during a year
                    before 1993'' and inserting ``during a year before the
                    prospective payment system described in paragraph (2)
                    is in effect''; and
                        (B) in paragraph (2), by striking ``January 1,
                    1993,'' and inserting ``January 1, 1996,''.
                (2) No use of customary charge in determining payment.--
            Section 1834(g)(1) (42 U.S.C. 1395m(g)(1)) is amended by adding
            at the end the following:
            ``The amount of payment shall be determined under either method
            without regard to the amount of the customary or other
            charge.''.
        (f) Clarification of Physician Staffing Requirement for Rural
    Primary Care Hospitals.--Section 1820(f)(1)(H) (42 U.S.C. 1395i-
    4(f)(1)(H)) is amended by striking the period and inserting the
    following: ``, except that in determining whether a facility meets the
    requirements of this subparagraph, subparagraphs (E) and (F) of that
    paragraph shall be applied as if any reference to a `physician' is a
    reference to a physician as defined in section 1861(r)(1).''.
        (g) Technical Amendments Relating to Part A Deductible,
    Coinsurance, and Spell of Illness.--(1) Section 1812(a)(1) (42 U.S.C.
    1395d(a)(1)) is amended--
                (A) by striking ``inpatient hospital services'' the first
            place it appears and inserting ``inpatient hospital services or
            inpatient rural primary care hospital services'';
                (B) by striking ``inpatient hospital services'' the second
            place it appears and inserting ``such services''; and
                (C) by striking ``and inpatient rural primary care hospital
            services''.
        (2) Sections 1813(a) and 1813(b)(3)(A) (42 U.S.C. 1395e(a),
    1395e(b)(3)(A)) are each amended by striking ``inpatient hospital
    services'' each place it appears and inserting ``inpatient hospital
    services or inpatient rural primary care hospital services''.
        (3) Section 1813(b)(3)(B) (42 U.S.C. 1395e(b)(3)(B)) is amended by
    striking ``inpatient hospital services'' and inserting ``inpatient
    hospital services, inpatient rural primary care hospital services''.
        (4) Section 1861(a) (42 U.S.C. 1395x(a)) is amended--
                (A) in paragraphs (1), by striking ``inpatient hospital
            services'' and inserting ``inpatient hospital services,
            inpatient rural primary care hospital services''; and
                (B) in paragraph (2), by striking ``hospital'' and
            inserting ``hospital or rural primary care hospital''.
        (h) Authorization of Appropriations.--Section 1820(k) (42 U.S.C.
    1395i-4(k)) is amended by striking ``1990, 1991, and 1992'' and
    inserting ``1990 through 1995''.
        (i) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act.

    SEC. 13414. RURAL HEALTH TRANSITION GRANT PROGRAM EXTENSION.

        Section 4005(e)(9) of OBRA-1987 is amended--
                (1) by striking ``1989 and'' and inserting ``1989,''; and
                (2) by striking ``1992'' and inserting ``1992 and
            $30,000,000 for each of fiscal years 1993 through 1997''.

    SEC. 13415. REGIONAL REFERRAL CENTER EXTENSION.

        (a) Extension of Classification Through Fiscal Year 1994.--
    Effective on the date of the enactment of this Act, section 6003(d) of
    such Act (42 U.S.C. 1395ww note) is amended by striking ``October 1,
    1992'' and inserting ``October 1, 1994''.
        (b) Permitting Hospitals to Decline Reclassification.--If any
    hospital fails to qualify as a rural referral center under section
    1886(d)(5)(C) of the Social Security Act as a result of a decision by
    the Medicare Geographic Classification Review Board under section
    1886(d)(10) of such Act to reclassify the hospital as being located in
    an urban area for fiscal year 1993 or fiscal year 1994, the Secretary
    of Health and Human Services shall--
                (1) notify such hospital of such failure to qualify,
                (2) provide an opportunity for such hospital to decline
            such reclassification, and
                (3) if the hospital declines such reclassification,
            administer the Social Security Act (other than section
            1886(d)(8)(D)) for such fiscal year as if the decision by the
            Review Board had not occurred.
        (c) Requiring Lump-sum Retroactive Payment for Hospitals Losing
    Classification.--
                (1) In general.--In the case of an affected regional
            referral center (as described in paragraph (2)), the Secretary
            of Health and Human Services shall make a lump sum payment to
            the center equal to the difference between the aggregate
            payment made to the center under section 1886 of such Act
            (excluding outlier payments under subsection (d)(5)(A) of such
            section) during the period of applicability described in
            paragraph (3) and the aggregate payment that would have been
            made to the center under such section if, during the period of
            applicability, the center was classified a regional referral
            center under section 1886(d)(5)(C) of such Act.
                (2) Affected centers described.--In paragraph (1), an
            ``affected regional referral center'' is a hospital classified
            as regional referral center under section 1886(d)(5)(C) of the
            Social Security Act as of September 30, 1992, that was not
            classified as such a center after such date but would have been
            so classified if the reference in section 6003(d) of OBRA-1989
            to ``October 1, 1992,'' had been deemed a reference to
            ``October 1, 1994,''.
                (3) Period of applicability.--In paragraph (1), the
            ``period of applicability'' is the period that begins on
            October 1, 1992, and ends on the date of the enactment of this
            Act.

    SEC. 13416. MEDICARE-DEPENDENT, SMALL RURAL HOSPITAL PAYMENT EXTENSION.

        (a) Extension of Additional Payments.--Effective on the date of the
    enactment of this Act, section 1886(d)(5)(G) (42 U.S.C.
    1395ww(d)(5)(G)) is amended--
                (1) in clause (i) in the matter preceding subclause (I)--
                        (A) by inserting ``(or portion thereof)'' after
                    ``cost reporting period'', and
                        (B) by striking ``March 31, 1993,'' and all that
                    follows and inserting the following: ``September 30,
                    1994, in the case of a subsection (d) hospital which is
                    a medicare-dependent, small rural hospital, payment
                    under paragraph (1)(A) shall be equal to the sum of the
                    amount determined under clause (ii) and the amount
                    determined under paragraph (1)(A)(iii).'';
                (2) by redesignating clauses (ii) and (iii) as clauses
            (iii) and (iv); and
                (3) by inserting after clause (i) the following new clause:
        ``(ii) The amount determined under this clause is--
                ``(I) for discharges occurring during the first 3 12-month
            cost reporting periods that begin on or after April 1, 1990,
            the amount by which the hospital's target amount for the cost
            reporting period (as defined in subsection (b)(3)(D)) exceeds
            the amount determined under paragraph (1)(A)(iii); and
                ``(II) for discharges occurring during any subsequent cost
            reporting period (or portion thereof), 50 percent of the amount
            by which the hospital's target amount for the cost reporting
            period (as defined in subsection (b)(3)(D)) exceeds the amount
            determined under paragraph (1)(A)(iii).''.
         (b) Permitting Hospitals to Decline Reclassification.--If any
    hospital fails to qualify as a medicare-dependent, small rural hospital
    under section 1886(d)(5)(G)(i) of the Social Security Act as a result
    of a decision by the Medicare Geographic Classification Review Board
    under section 1886(d)(10) of such Act to reclassify the hospital as
    being located in an urban area for fiscal year 1993 or fiscal year
    1994, the Secretary of Health and Human Services shall--
                (1) notify such hospital of such failure to qualify,
                (2) provide an opportunity for such hospital to decline
            such reclassification, and
                (3) if the hospital declines such reclassification,
            administer the Social Security Act (other than section
            1886(d)(8)(D)) for such fiscal year as if the decision by the
            Review Board had not occurred.
        (c) Requiring Lump-sum Retroactive Payment.--
                (1) In general.--In the case of a hospital treated as a
            medicare dependent, small rural hospital under section
            1886(d)(5)(G) of the Social Security Act, the Secretary of
            Health and Human Services shall make a lump sum payment to the
            hospital equal to the difference between the aggregate payment
            made to the hospital under section 1886 of such Act (excluding
            outlier payments under subsection (d)(5)(A) of such section)
            during the period of applicability described in paragraph (2)
            and the aggregate payment that would have been made to the
            hospital under such section if, during the period of
            applicability, section 1886(d)(5)(G) of such Act had been
            applied as if--
                        (A) the reference in clause (i) to ``March 31,
                    1993,'' had been deemed a reference to ``September 30,
                    1994,''; and
                        (B) the amendments made by subsection (a) had been
                    in effect.
                (2) Period of applicability.--In paragraph (1), the
            ``period of applicability'' is, with respect to a hospital, the
            period that begins on the first day of the hospital's first 12-
            month cost reporting period that begins after April 1, 1992,
            and ends on the date of the enactment of this Act.

    SEC. 13417. EXTENSION OF REGIONAL FLOOR.

        Section 1886(d)(1)(A)(iii) (42 U.S.C. 1395ww(d)(1)(A)(iii)) is
    amended by striking ``September 30, 1993'' and inserting ``September
    30, 1996''.

    SEC. 13418. EXTENSION OF RURAL HOSPITAL DEMONSTRATION.

        Section 4008(i)(1) of OBRA-1990 is amended by adding at the end the
    following new sentence: ``The Secretary shall continue any such
    demonstration project until at least December 31, 1995.''.

    SEC. 13419. HEMOPHILIA PASS-THROUGH EXTENSION.

        Effective as if included in the enactment of OBRA-1989, section
    6011(d) of such Act is amended by striking ``2 years after the date of
    enactment of this Act'' and inserting ``September 30, 1994''.

    SEC. 13420. STATE HOSPITAL PAYMENT PROGRAMS.

        In the case of a State hospital reimbursement system that meets the
    requirements of section 1814(b)(3) of the Social Security Act, no other
    provision of law shall be construed as preventing the system from
    providing that payment for services covered under the system be made on
    the basis of rates provided for under the system.

    SEC. 13421. PSYCHOLOGY SERVICES IN HOSPITALS.

        Section 1861(e)(4) (42 U.S.C. 1395x(e)(4)) is amended by striking
    ``physician;'' and inserting ``physician, except that a patient
    receiving qualified psychologist services (as defined in subsection
    (ii)) may be under the care of a clinical psychologist with respect to
    such services to the extent permitted under State law;''.

    SEC. 13422. GRADUATE MEDICAL EDUCATION PAYMENTS IN HOSPITAL-OWNED
                  COMMUNITY HEALTH CENTERS.

        Section 1886(d)(5)(B)(iv) (42 U.S.C. 1395ww(d)(5)(B)(iv)) is
    amended by inserting after ``the hospital'' the following: ``or
    providing services at any entity receiving a grant under section 330 of
    the Public Health Service Act that is under the ownership or control of
    the hospital (if the hospital incurs all, or substantially all, of the
    costs of the services furnished to the hospital by such interns and
    residents)''.

    SEC. 13423. TREATMENT OF CERTAIN MILITARY FACILITIES.

        (a) Coverage of Services Provided in Certain Uniformed Services
    Treatment Facilities.--
                (1) In general.--The Secretary of Health and Human Services
            may not take any recoupment action to recover amounts that were
            paid by the United States under title XVIII of the Social
            Security Act to the facilities described in paragraph (2) (or
            to other individuals or entities with whom such facilities had
            entered into agreements to provide services under such title)
            for services provided during the period beginning October 1,
            1986, and ending December 31, 1989, except to the extent that
            funds were obligated to the Uniformed Services Treatment
            Facilities program to fulfill such an action pursuant to title
            VI of the Department of Defense Appropriations Act, 1993.
                (2) Facilities described.--The facilities referred to in
            paragraph (1) are the hospitals described in section 248c of
            title 42, United States Code, that are located in Boston,
            Massachusetts; Baltimore, Maryland; and Seattle, Washington.
        (b) Study of Joint Medical Facilities.--
                (1) Study.--The Secretary of Health and Human Services, in
            consultation with the Secretary of Defense and the Secretary of
            Veterans Affairs, shall conduct a study of the feasibility and
            desirability of establishing joint medical facilities among the
            Department of Defense, the Department of Veterans' Affairs, and
            other public and private entities, and shall include in such
            study an analysis of the need to make changes in the medicare
            and medicaid programs (including facility certification
            standards under such programs) in order to facilitate the
            establishment of such joint medical facilities.
                (2) Report.--Not later than October 1, 1993, the Secretary
            of Health and Human Services shall submit a report to Congress
            on the study conducted under paragraph (1).

    SEC. 13424. EPILEPSY DRG.

        (a) In General.--The Secretary of Health and Human Services shall
    review the diagnosis-related groups established pursuant to section
    1886(d)(4) of the Social Security Act that are assigned to discharges
    of patients with intractable epilepsy, including patients whose
    admissions involve intensive neurodiagnostic monitoring, and shall
    revise, for discharges occurring on or after October 1, 1994, the
    assignment of discharges to such groups as the Secretary considers
    appropriate to account for the resource requirements of such patients.
        (b) Consultation Requirements.--In carrying out subsection (a), the
    Secretary shall consult with the Prospective Payment Assessment
    Commission and national organizations representing individuals with
    epilepsy or individuals and entities providing specialized medical
    services to such individuals related to the treatment of epilepsy.

    SEC. 13425. SKILLED NURSING FACILITY WAGE INDEX.

        (a) In General.--Not later than 1 year after the date of the
    enactment of this Act, the Secretary of Health and Human Services shall
    begin to collect data on employee compensation and paid hours of
    employment in skilled nursing facilities for the purpose of
    constructing a skilled nursing facility wage index adjustment to the
    routine service cost limits required under section 1888(a)(4) of the
    Social Security Act.
        (b) ProPAC Report.--The Prospective Payment Assessment Commission
    shall, by March 1, 1994, study and report to the Congress on the impact
    of applying routine per diem cost limits for skilled nursing facilities
    on a regional basis.

    SEC. 13426. HOSPICE NOTIFICATION TO BENEFICIARIES.

        (a) Hospitals.--Section 1861(ee)(2)(D) (42 U.S.C. 1395x(ee)(2)(D))
    is amended by inserting ``, including hospice services,'' after ``post-
    hospital services''.
        (b) Nursing Facilities.--Section 1819(c)(1)(B) (42 U.S.C. 1395i-
    3(c)(1)(B)) is amended--
                (1) by striking ``and'' at the end of clause (ii);
                (2) by striking the period at the end of clause (iii) and
            inserting ``; and''; and
                (3) by inserting after clause (iii) the following new
            clause:
                                ``(iv) inform each resident who is entitled
                            to benefits under this title, orally and in
                            writing at the time of admission to the
                            facility, of the entitlement of individuals to
                            hospice care under section 1812(a)(4) (unless
                            there is no hospice program providing hospice
                            care for which payment may be made under this
                            title within the geographic area of the
                            facility and it is not the common practice of
                            the facility to refer patients to hospice
                            programs located outside such geographic
                            area).''.
        (c) Effective Date.--The amendments made by this section shall
    apply to services furnished on or after the first day of the first
    month beginning more than one year after the date of the enactment of
    this Act.

    SEC. 13427. REDUCTION IN PART A PREMIUM FOR CERTAIN INDIVIDUALS WITH 30
                  OR MORE QUARTERS OF SOCIAL SECURITY COVERAGE.

        (a) In General.--Section 1818(d) (42 U.S.C. 1395i-2(d)) is
    amended--
                (1) in the second sentence of paragraph (2), by striking
            ``Such amount'' and inserting ``Subject to paragraph (4), the
            amount of an individual's monthly premium under this section'';
            and
                (2) by adding at the end the following new paragraph:
        ``(4)(A) In the case of an individual described in subparagraph
    (B), the monthly premium for a month shall be reduced by the applicable
    reduction percent specified in the following table:

                                                   The applicable reduction
    ``For a month in:                                      percent is:
        1994..........................................           25 percent
        1995..........................................           30 percent
        1996..........................................           35 percent
        1997..........................................           40 percent
        1998 or subsequent year.......................          45 percent.
        ``(B) An individual described in this subparagraph with respect to
    a month is an individual who establishes to the satisfaction of the
    Secretary that, as of the last day of the previous month, the
    individual--
                ``(i) had at least 30 quarters of coverage under title II;
                ``(ii) was married (and had been married for the previous 1
            year period) to an individual who had at least 30 quarters of
            coverage under such title;
                ``(iii) had been married to an individual for a period of
            at least 1 year (at the time of the individual's death) if at
            such time the individual had at least 30 quarters of coverage
            under such title; and
                ``(iv) is divorced from an individual and had been married
            to the individual for a period of at least 10 years (at the
            time of the divorce) if at such time the individual had at
            least 30 quarters of coverage under such title.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to monthly premiums under section 1818 of the Social Security Act
    for months beginning with January 1, 1994.

    SEC. 13428. PERIODIC UPDATES TO SALARY EQUIVALENCY GUIDELINES FOR
                  PHYSICAL THERAPY AND RESPIRATORY THERAPY SERVICES.

        (a) In General.--Section 1861(v)(5) (42 U.S.C. 1395x(v)(5)) is
    amended by adding at the end the following new subparagraph:
        ``(C) Using the most recent available data, the Secretary shall
    update, not less often than every 3 years, the salary equivalency
    guidelines used under subparagraph (A) with respect to physical therapy
    and respiratory therapy services.''.
        (b) Effective Date.--The Secretary of Health and Human Services
    shall first update the salary equivalency guidelines, under the
    amendment made by subsection (a), by not later than December 31, 1993.
    Such updated guidelines shall apply to cost reporting periods beginning
    on or after July 1, 1993.

    SEC. 13429. EXTENSION OF DEADLINE FOR APPLICATION FOR GEOGRAPHIC
                  CLASSIFICATION FOR CERTAIN RECLASSIFIED HOSPITALS.

        Notwithstanding section 1886(d)(10)(C)(ii) of the Social Security
    Act, a hospital may submit an application to the Medicare Geographic
    Classification Review Board requesting a change in geographic
    classification for fiscal year 1994 after the first day of fiscal year
    1993 if--
                (1) the hospital's geographic classification for fiscal
            year 1994 was changed from urban to rural as a result of the
            issuance of the Revised Statistical Definitions for
            Metropolitan Areas established by the Office of Management and
            Budget on December 28, 1992 (pursuant to OMB Bulletin No. 93-
            05); and
                (2) the hospital submits the application not later than 60
            days after the date of the enactment of this Act.

    SEC. 13430. CLARIFICATION OF DRG PAYMENT WINDOW EXPANSION;
                  MISCELLANEOUS AND TECHNICAL CORRECTIONS.

        (a) Clarification of DRG Payment Window Expansion.--The first
    sentence of section 1886(a)(4) (42 U.S.C. 1395ww(a)(4)) is further
    amended by striking ``and includes'' and inserting ``and (in the case
    of a subsection (d) hospital) includes''.
        (b) Technical Correction Relating to Resident Assessment in Nursing
    Homes.--Section 1819(b)(3)(C)(i)(I) (42 U.S.C. 1395i-3(b)(3)(C)(i)(I))
    is amended by striking ``not later than'' before ``14 days''.
        (c) Clerical Corrections.--(1) Section 1814(i)(1)(C)(i) (42 U.S.C.
    1395f(i)(1)(C)(i)) is amended by striking ``1990,,'' and inserting
    ``1990,''.
        (2) Section 1816(f)(2)(A)(ii) (42 U.S.C. 1396h(f)(2)(A)(ii)) is
    amended by striking ``such agency'' and inserting ``such agency's''.
        (3) Section 1886(d)(1)(A)(iii) (42 U.S.C. 1395ww(d)(1)(A)(iii)) is
    amended by striking ``, the sum of'' and inserting ``is equal to the
    sum of''.

                    CHAPTER 2--PROVISIONS RELATING TO PART B

                 Subchapter A--Elimination of Inflation Update

    SEC. 13431. ELIMINATION OF INFLATION UPDATE FOR PHYSICIAN AND RELATED
                  PROFESSIONAL SERVICES.

        (a) No Increase in Index.--Section 1848(d)(3)(A) (42 U.S.C. 1395w-
    4(d)(3)(A)) is amended--
                (1) in clause (i), by striking ``clause (iii)'' and
            inserting ``clauses (iii) and (iv)'', and
                (2) by adding at the end the following new clause:
                                ``(iv) No increase in index for 1994 or
                            1995.--In applying clause (i) for services
                            furnished on or after January 1, 1994, the
                            percentage increase in the appropriate update
                            index for each of 1994 and 1995 shall be 0
                            percent.''.
        (b) No Increase in MEI for 1994 and 1995.--Section 1842(b)(4)(E)
    (42 U.S.C. 1395u(b)(4)(E)) is amended by adding at the end the
    following new clause:
        ``(vi) For purposes of this part for items and services furnished
    in 1994 or 1995, the percentage increase in the MEI is 0 percent.''.

    SEC. 13432. ELIMINATION OF COST-OF-LIVING ADJUSTMENTS FOR CERTAIN ITEMS
                  AND SERVICES.

        (a) Clinical Laboratory Services.--Section 1833(h)(2)(A)(ii) (42
    U.S.C. 1395l(h)(2)(A)(ii)) is amended--
                (1) by striking ``and'' at the end of subclause (II),
                (2) by striking the period at the end of subclause (III)
            and inserting ``, and'', and
                (3) by adding at the end the following new subclause:
                ``(IV) the annual adjustment in the fee schedules
            determined under clause (i) for each of the years 1994 and 1995
            shall be 0 percent.''.
        (b) Durable Medical Equipment.--Section 1834(a)(14) (42 U.S.C.
    1395m(a)(14)) is amended--
                (1) in subparagraph (A), as amended by 13469(a), by
            striking ``and'' at the end;
                (2) in subparagraph (B)--
                        (A) by striking ``a subsequent year'' and inserting
                    ``1993'', and
                        (B) by striking ``June of the previous year.'' and
                    inserting ``June 1992,''; and
                (3) by adding at the end the following new subparagraphs:
                        ``(C) for 1994 and 1995, no percentage change, and
                        ``(D) for a subsequent year, the percentage
                    increase in the consumer price index for all urban
                    consumers (U.S. city average) for the 12-month period
                    ending with June of the previous year.''.
        (c) Orthotics and Prosthetics.--Section 1834(h)(4)(A) (42 U.S.C.
    1395m(h)(4)(A)) is amended--
                (1) in clause (i), by striking ``and'';
                (2) in clause (ii), by striking ``a subsequent year'' and
            inserting ``1992 and 1993''; and
                (3) by adding at the end the following new clauses:
                                ``(iii) for 1994 and 1995, 0 percent, and
                                ``(iv) for a subsequent year, the
                            percentage increase in the consumer price index
                            for all urban consumers (United States city
                            average) for the 12-month period ending with
                            June of the previous year;''.
        (d) Reasonable Charge Limits for Enteral and Parenteral Nutrients,
    Supplies and Equipment.--In determining the amount of payment under
    part B of title XVIII of the Social Security Act during 1994 and 1995,
    the charges determined to be reasonable with respect to parenteral and
    enteral nutrients, supplies, and equipment may not exceed the charges
    determined to be reasonable with respect to such nutrients, supplies,
    and equipment during 1993.

    SEC. 13433. AMBULATORY SURGICAL CENTER SERVICES.

        (a) Elimination of Inflation Update.--The Secretary of Health and
    Human Services shall not provide for any inflation update in the
    payment amounts under subparagraphs (A) and (B) of section 1833(i)(2)
    of the Social Security Act for fiscal year 1994 or for fiscal year
    1995.
        (b) Conforming Amendment.--Section 1833(i)(2)(C) (42 U.S.C.
    1395l(i)(2)(C)), as added by section 13453(a)(2)(B), is amended by
    striking ``fiscal year 1995'' and inserting ``fiscal year 1996''.

    SEC. 13434. OTHER ITEMS AND SERVICES UNDER PART B.

        (a) Rural Health Clinic Services; Federally-Qualified Health Center
    Services; Comprehensive Outpatient Rehabilitation Facility Services.--
    In determining the amount of payment made for rural health clinic
    services, Federally qualified health center services, or comprehensive
    outpatient rehabilitation facility services furnished under part B of
    title XVIII of the Social Security Act for services furnished on or
    after January 1, 1994, the Secretary of Health and Human Services shall
    provide that any inflation update, in the applicable limits used to
    determine the costs which are reasonable and related to the cost of
    furnishing such services under section 1833(a)(3) of such Act, that
    would otherwise have applied for 1994 or for 1995 shall be deemed to be
    0 percent.
        (b) Dialysis Services.--In determining the amount of payment made
    for dialysis services furnished under part B of title XVIII of the
    Social Security Act on or after January 1, 1994, the Secretary of
    Health and Human Services shall provide that any inflation update, in
    the payment amounts determined under section 1881(b)(2)(B) of such Act
    or the rates determined under section 1881(b)(7) of such Act, that
    would otherwise have applied for 1994 or for 1995 shall be deemed to be
    0 percent.
        (c) Other Part B Items and Services.--In determining the amount of
    payment made for an item or service furnished under part B of title
    XVIII of the Social Security Act on or after January 1, 1994, other
    than an item or service to which a preceding provision of (or amendment
    made by) this subchapter applies, the Secretary of Health and Human
    Services shall provide that any inflation update in the fee schedule
    amount for the item or service established under such part B of such
    title, or (if applicable) any applicable limit used to determine the
    actual charge, reasonable charge, or reasonable cost for the item or
    service under such part, that would otherwise have applied for 1994 or
    for 1995 shall be deemed to be 0 percent.

                       Subchapter B--Physicians' Services

    SEC. 13441. REINSTATING SEPARATE PAYMENT FOR THE INTERPRETATION OF
                  ELECTROCARDIOGRAMS (EKGS).

        (a) In General.--Paragraph (3) of section 1848(b) (42 U.S.C. 1395w-
    4(b)) is amended to read as follows:
                ``(3) Treatment of interpretation of electrocardiograms.--
            The Secretary--
                        ``(A) shall make separate payment under this
                    section for the interpretation of electrocardiograms
                    performed or ordered to be performed as part of or in
                    conjunction with a visit to or a consultation with a
                    physician, and
                        ``(B) shall adjust the relative values established
                    for visits and consultations under subsection (c) so as
                    not to include relative value units for interpretations
                    of electrocardiograms in the relative value for visits
                    and consultations.''.
        (b) Assuring Budget Neutrality.--Section 1848(c)(2) (42 U.S.C.
    1395w-4(c)(2)) is amended by adding at the end the following new
    subparagraph:
                        ``(E) Budget neutrality adjustments.--The
                    Secretary--
                                ``(i) shall reduce the relative values for
                            all services (other than anesthesia services)
                            established under this paragraph (and, in the
                            case of anesthesia services, the conversion
                            factor established by the Secretary for such
                            services) by such percentage as the Secretary
                            determines to be necessary so that, beginning
                            in 1996, the amendment made by section 13441(a)
                            of the Omnibus Budget Reconciliation Act of
                            1993 would not result in expenditures under
                            this section that exceed the amount of such
                            expenditures that would have been made if such
                            amendment had not been made, and
                                ``(ii) shall reduce the amounts determined
                            under subsection (a)(2)(B)(i)(I) by such
                            percentage as the Secretary determines to be
                            required to assure that, taking into account
                            the reductions made under clause (i), the
                            amendment made by section 13441(a) of the
                            Omnibus Budget Reconciliation Act of 1993 would
                            not result in expenditures under this section
                            in 1993 that exceed the amount of such
                            expenditures that would have been made if such
                            amendment had not been made.''.
        (c) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-4) is
    amended--
                (1) in subsection (a)(2)(B)(i)(I), by inserting ``and as
            adjusted under subsection (c)(2)(E)(ii)'' after ``for 1993'';
                (2) in subsection (c)(2)(A)(i), by adding at the end the
            following: ``Such relative values are subject to adjustment
            under subparagraph (E)(i).''; and
                (3) in subsection (i)(1)(B), by adding at the end
            ``including adjustments under subsection (c)(2)(E),''.
        (d) Effective Date.--The amendments made by this section shall
    apply to services furnished on or after January 1, 1994.

    SEC. 13442. PAYMENTS FOR NEW PHYSICIANS AND PRACTITIONERS.

        (a) Equal Treatment of New Physicians and Practitioners.--(1)
    Section 1848(a) (42 U.S.C. 1395w-4(a)) is amended by striking paragraph
    (4).
        (2) Section 1842(b)(4) (42 U.S.C. 1395u(b)(4)) is amended by
    striking subparagraph (F).
        (b) Budget Neutrality Adjustment.--Notwithstanding any other
    provision of law, the Secretary of Health and Human Services shall
    reduce the following values and amounts for 1993 (to be applied for
    that year and subsequent years) by such uniform percentage as the
    Secretary determines to be required to assure that the amendments made
    by subsection (a) will not result in expenditures under part B of title
    XVIII of the Social Security Act in 1993 that exceed the amount of such
    expenditures that would have been made if such amendments had not been
    made:
                (1) The relative values established under section 1848(c)
            of such Act for services (other than anesthesia services) and,
            in the case of anesthesia services, the conversion factor
            established under section 1848 of such Act for such services.
                (2) The amounts determined under section
            1848(a)(2)(B)(i)(I) of such Act.
                (3) The prevailing charges or fee schedule amounts to be
            applied under such part for services of a health care
            practitioner (as defined in section 1842(b)(4)(F)(ii)(I) of
            such Act, as in effect before the date of the enactment of this
            Act).
        (c) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-4), as
    amended by section 13441(c), is amended--
                (1) in subsection (a)(2)(B)(i)(I), by inserting ``and
            section 13442(b) of the Omnibus Budget Reconciliation Act of
            1993'' after ``(c)(2)(E)(ii)'' after ``for 1993'';
                (2) in subsection (c)(2)(A)(i), by inserting ``and section
            13442(b) of the Omnibus Budget Reconciliation Act of 1993''
            after ``under subparagraph (E)(i)''; and
                (3) in subsection (i)(1)(B), by inserting ``and section
            13442(b) of the Omnibus Budget Reconciliation Act of 1993''
            after ``under subsection (c)(2)(E)''.
        (d) Effective Date.--The amendments made by subsection (a) shall
    apply to services furnished on or after January 1, 1994.

    SEC. 13443. RETAINING PAYMENT FOR ACTUAL ANESTHESIA TIME.

        (a) Physicians' Services.--Section 1848(b)(2)(B) (42 U.S.C. 1395w-
    4(b)(2)(B)) is amended by adding at the end the following: ``The
    Secretary may not modify the methodology in effect as of January 1,
    1992, for determining the amount of time that may be billed for such
    services under this section.''.
        (b) Services of Certified Registered Nurse Anesthetists.--Section
    1833(l)(1)(B) (42 U.S.C. 1395l(l)(1)(B)) is amended by adding at the
    end the following: ``The Secretary may not modify the methodology in
    effect as of January 1, 1992, for determining the amount of time that
    may be billed for such services under this section.''.
        (c) Effective Date.--The amendments made by this section shall take
    apply to services furnished on or after the date of the enactment of
    this Act.

    SEC. 13444. GEOGRAPHIC COST OF PRACTICE INDEX REFINEMENTS.

        (a) Requiring Consultation with Representatives of Physicians in
    Reviewing Geographic Adjustment Factors.--Section 1848(e)(1)(C) (42
    U.S.C. 1395w-4(e)(1)(C)) is amended by striking ``shall review'' and
    inserting ``shall, in consultation with appropriate representatives of
    physicians, review''.
        (b) Use of Most Recent Data In Geographic Adjustment.--Section
    1848(e)(1) (42 U.S.C. 1395w-4(e)(1)) is amended by adding at the end
    the following new subparagraph:
                        ``(D) Use of recent data.--In establishing indices
                    and index values under this paragraph, the Secretary
                    shall use the most recent data available relating to
                    practice expenses, malpractice expenses, and physician
                    work effort in different fee schedule areas.''.
        (c) Deadline for Initial Review and Revision.--The Secretary of
    Health and Human Services shall first review and revise geographic
    adjustment factors under section 1848(e)(1)(C) of the Social Security
    Act by not later than January 1, 1995. Not later than April 1, 1994,
    the Secretary shall study and report to report to the Committee on
    Finance of the Senate and the Committee on Ways and Means and the
    Committee on Energy and Commerce of the House of Representatives on the
    construction of the geographic cost of practice index under section
    1848(e)(1)(A)(i) of such Act.
        (d) Report on Review Process.--Not later than 1 year after the date
    of the enactment of this Act, the Secretary of Health and Human
    Services shall study and report to the Committee on Finance of the
    Senate and the Committee on Ways and Means and the Committee on Energy
    and Commerce of the House of Representatives on--
                (1) the data necessary to review and revise the indices
            established under section 1848(e)(1)(A) of the Social Security
            Act, including--
                        (A) the shares allocated to physicians' work
                    effort, practice expenses (other than malpractice
                    expenses), and malpractice expenses;
                        (B) the weights assigned to the input components of
                    such shares; and
                        (C) the index values assigned to such components;
                (2) any limitations on the availability of data necessary
            to review and revise such indices at least every three years;
                (3) ways of addressing such limitations, with particular
            attention to the development of alternative data sources for
            input components for which current index values are based on
            data collected less frequently than every three years; and
                (4) the costs of developing more accurate and timely data.
        (e) Development of Criteria for Use in Determining Payment
    Localities.--The Physician Payment Review Commission shall conduct a
    study to develop criteria that would be used to refine the fee schedule
    areas that are used within States, in applying geographic adjustment
    factors for computing payment amounts, under section 1848 of the Social
    Security Act. The Commission shall include a report on such study in
    its recommendations submitted to the Congress under section 1845(b) of
    such Act in 1994.

    SEC. 13445. EXTRA-BILLING.

        (a) Enforcement and Uniform Application.--
                (1) Enforcement.--Paragraph (1) of section 1848(g) (42
            U.S.C. 1395w-4(g)) is amended to read as follows:
                ``(1) Limitation on actual charges.--
                        ``(A) In general.--In the case of a
                    nonparticipating physician or nonparticipating supplier
                    or other person (as defined in section 1842(i)(2)) who
                    does not accept payment on an assignment-related basis
                    for a physician's service furnished with respect to an
                    individual enrolled under this part, the following
                    rules apply:
                                ``(i) Application of limiting charge.--No
                            person may bill or collect an actual charge for
                            the service in excess of the limiting charge
                            described in paragraph (2) for such service.
                                ``(ii) No liability for excess charges.--No
                            person is liable for payment of any amounts
                            billed for the service in excess of such
                            limiting charge.
                                ``(iii) Correction of excess charges.--If
                            such a physician, supplier, or other person
                            bills, but does not collect, an actual charge
                            for a service in violation of clause (i), the
                            physician, supplier, or other person shall
                            reduce on a timely basis the actual charge
                            billed for the service to an amount not to
                            exceed the limiting charge for the service.
                                ``(iv) Refund of excess collections.--If
                            such a physician, supplier, or other person
                            collects an actual charge for a service in
                            violation of clause (i), the physician,
                            supplier, or other person shall provide on a
                            timely basis a refund to the individual charged
                            in the amount by which the amount collected
                            exceeded the limiting charge for the service.
                            The amount of such a refund shall be reduced to
                            the extent the individual has an outstanding
                            balance owed by the individual to the
                            physician.
                        ``(B) Sanctions.--If a physician, supplier, or
                    other person--
                                ``(i) knowingly and willfully bills or
                            collects for services in violation of
                            subparagraph (A)(i) on a repeated basis, or
                                ``(ii) fails to comply with clause (iii) or
                            (iv) of subparagraph (A) on a timely basis,
                    the Secretary may apply sanctions against the
                    physician, supplier, or other person in accordance with
                    paragraph (2) of section 1842(j). In applying this
                    subparagraph, paragraph (4) of such section applies in
                    the same manner as such paragraph applies to such
                    section and any reference in such section to a
                    physician is deemed also to include a reference to a
                    supplier or other person under this subparagraph.
                        ``(C) Timely basis.--For purposes of this
                    paragraph, a correction of a bill for an excess charge
                    or refund of an amount with respect to a violation of
                    subparagraph (A)(i) in the case of a service is
                    considered to be provided `on a timely basis', if the
                    reduction or refund is made not later than 30 days
                    after the date the physician, supplier, or other person
                    is notified by the carrier under this part of such
                    violation and of the requirements of subparagraph
                    (A).''.
                (2) Uniform application of extra-billing limits to
            physicians' services.--
                        (A) In general.--Section 1848(g)(2)(C) (42 U.S.C.
                    1395w-4(g)(2)(C)) is amended by inserting ``or for
                    nonparticipating suppliers or other persons'' after
                    ``nonparticipating physicians''.
                        (B) Conforming definition.--Section 1842(i)(2) (42
                    U.S.C. 1395u(i)(2)) is amended--
                                (i) by striking ``, and the term'' and
                            inserting ``; the term'', and
                                (ii) by inserting before the period at the
                            end the following: ``; and the term
                            `nonparticipating supplier or other person'
                            means a supplier or other person (excluding a
                            provider of services) that is not a
                            participating physician or supplier (as defined
                            in subsection (h)(1))''.
        (b) Pre-Payment Screening of Claims.--Subparagraph (G) of section
    1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended to read as follows:
                ``(G) will, for a service that is furnished with respect to
            an individual enrolled under this part, that is not paid on an
            assignment-related basis, and that is subject to a limiting
            charge under section 1848(g)--
                        ``(i) determine, prior to making payment, whether
                    the amount billed for such service exceeds the limiting
                    charge applicable under section 1848(g)(2);
                        ``(ii) notify the physician, supplier, or other
                    person periodically (but not less often than once every
                    30 days) of determinations that amounts billed exceeded
                    such applicable limiting charges; and
                        ``(iii) provide for prompt response to inquiries of
                    physicians, suppliers, and other persons concerning the
                    accuracy of such limiting charges for their
                    services;''.
        (c) Information on Extra-Billing Limits.--
                (1) Part of explanation of medicare benefits.--Section
            1842(h)(7) (42 U.S.C. 1395u(h)(7)) is amended--
                        (A) by striking ``and'' at the end of subparagraph
                    (B),
                        (B) in subparagraph (C), by striking ``shall
                    include'' and by striking the period at the end and
                    inserting ``, and'', and
                        (C) by adding at the end the following new
                    subparagraph:
                ``(D) in the case of services for which the billed amount
            exceeds the limiting charge imposed under section 1848(g),
            information regarding such applicable limiting charge
            (including information concerning the right to a refund under
            section 1848(g)(1)(A)(iv)).''.
                (2) Report on charges in excess of limiting charge.--
            Section 1848(g)(6)(B) (42 U.S.C. 1395w-4(g)(6)(B)) is amended
            by inserting ``the extent to which actual charges exceed
            limiting charges, the number and types of services involved,
            and the average amount of excess charges and'' after ``report
            to the Congress''.
        (d) Applying the Limiting Charge to Nonphysician Services Provided
    Under the Physician Fee Schedule.--Section 1848 (42 U.S.C. 1395w-4) is
    amended--
                (1) in subsection (a)(3), by inserting ``and suppliers''
            after ``physicians'', and by inserting ``or a nonparticipating
            supplier or other person'' after ``nonparticipating physician''
            and by adding at the end the following: ``In the case of
            physicians' services (including services which the Secretary
            excludes pursuant to subsection (j)(3)) of a nonparticipating
            physician, supplier, or other person for which payment is made
            under this part on a basis other than the fee schedule amount,
            the payment shall be based on 95 percent of the payment basis
            for such services furnished by a participating physician,
            supplier, or other person.'';
                (2) in subsection (g)(1)(A), as amended by subsection (a),
            in the matter before clause (i), by inserting ``(including
            services which the Secretary excludes pursuant to subsection
            (j)(3))'' after ``a physician's service'';
                (3) in subsection (g)(2)(D), by inserting ``(or, if payment
            under this part is made on a basis other than the fee schedule
            under this section, 95 percent of the other payment basis)''
            after ``subsection (a)'';
                (4) in subsection (g)(3)(B)--
                        (A) by inserting after the first sentence the
                    following: `` No person is liable for payment of any
                    amounts billed for such a service in violation of the
                    previous sentence.'', and
                        (B) in the last sentence, by striking ``previous
                    sentence'' and inserting ``first sentence'';
                (5) in subsection (h)--
                        (A) by inserting ``or nonparticipating supplier or
                    other person furnishing physicians' services (as
                    defined in section 1848(j)(3))'' after ``physician''
                    the first place it appears,
                        (B) by inserting ``, supplier, or other person''
                    after ``physician'' the second place it appears, and
                        (C) by inserting ``, suppliers, and other persons''
                    after ``physicians'' the second place it appears; and
                (6) in subsection (j)(3), by inserting ``, except for
            purposes of subsections (a)(3), (g), and (h)'' after ``tests
            and''.
        (e) Clarification of Mandatory Assignment Rules for Certain
    Practitioners.--
                (1) In general.--Section 1842(b) (42 U.S.C. 1395u(b)), as
            amended by section 13449(e), is amended by adding at the end
            the following new paragraph:
        ``(18)(A) Payment for any service furnished by a practitioner
    described in subparagraph (C) and for which payment may be made under
    this part on a reasonable charge or fee schedule basis may only be made
    under this part on an assignment-related basis.
        ``(B) A practitioner described in subparagraph (C) or other person
    may not bill (or collect any amount from) the individual or another
    person for any service described in subparagraph (A), except for
    deductible and coinsurance amounts applicable under this part. No
    person is liable for payment of any amounts billed for such a service
    in violation of the previous sentence. If a practitioner or other
    person knowingly and willfully bills (or collects an amount) for such a
    service in violation of such sentence, the Secretary may apply
    sanctions against the practitioner or other person in the same manner
    as the Secretary may apply sanctions against a physician in accordance
    with section 1842(j)(2) in the same manner as such section applies with
    respect to a physician. Paragraph (4) of section 1842(j) shall apply in
    this subparagraph in the same manner as such paragraph applies to such
    section.
        ``(C) A practitioner described in this subparagraph is any of the
    following:
                ``(i) A physician assistant, nurse practitioner, or
            clinical nurse specialist (as defined in section 1861(aa)(5)).
                ``(ii) A certified registered nurse anesthetist (as defined
            in section 1861(bb)(2)).
                ``(iii) A certified nurse-midwife (as defined in section
            1861(gg)(2)).
                ``(iv) A clinical social worker (as defined in section
            1861(hh)(1)).
                ``(v) A clinical psychologist (as defined by the Secretary
            for purposes of section 1861(ii)).
        ``(D) For purposes of this paragraph, a service furnished by a
    practitioner described in subparagraph (C) includes any services and
    supplies furnished as incident to the service as would otherwise be
    covered under this part if furnished by a physician or as incident to a
    physician's service.''.
                (2) Conforming amendments.--
                        (A) Section 1833 (42 U.S.C. 1395l) is amended--
                                (i) in subsection (l)(5), by striking
                            subparagraph (B) and redesignating subparagraph
                            (C) as subparagraph (B);
                                (ii) by striking subsection (p); and
                                (iii) in subsection (r), by striking
                            paragraph (3) and redesignating paragraph (4)
                            as paragraph (3).
                        (B) Section 1842(b)(12) (42 U.S.C. 1395u(b)(12)) is
                    amended by striking subparagraph (C).
        (f) Miscellaneous and Technical Amendments.--Section 1833 (42
    U.S.C. 1395l) is amended--
                (1) in subsection (a)(1), as amended by section
            13479(e)(2)--
                        (A) by striking ``and'' before ``(O)'', and
                        (B) by inserting before the semicolon at the end
                    the following: ``, and (P) with respect to services
                    described in clauses (i), (ii) and (iv) of section
                    1861(s)(2)(K), the amounts paid are subject to the
                    provisions of section 1842(b)(12)''; and
                (2) in subsection (h)(5)(D)--
                        (A) by striking ``paragraphs (2) and (3)'' and by
                    inserting ``paragraph (2)'', and
                        (B) by adding at the end the following: ``Paragraph
                    (4) of such section shall apply in this subparagraph in
                    the same manner as such paragraph applies to such
                    section.''.
        (g) Effective Dates.--
                (1) Enforcement and uniform application; miscellaneous and
            technical amendments.--The amendments made by subsections (a),
            (d), and (f) shall apply to services furnished on or after the
            date of the enactment of this Act; except that such amendments
            made by subsections (a) and (d) shall not apply to services of
            a nonparticipating supplier or other person furnished before
            January 1, 1994.
                (2) Carrier determinations.--The amendments made by
            subsection (b) shall apply to contracts as of January 1, 1994.
                (3) EOMBs.--The amendments made by subsection (c)(1) shall
            apply to explanations of benefits provided on or after January
            1, 1994.
                (4) Report.--The amendment made by subsection (c)(2) shall
            apply to reports for years beginning with 1994.
                (5) Practitioners.--The amendments made by subsection (e)
            shall apply to services furnished on or after January 1, 1994.

    SEC. 13446. RELATIVE VALUES FOR PEDIATRIC SERVICES.

        (a) In General.--The Secretary of Health and Human Services shall
    fully develop, by not later than July 1, 1994, relative values for the
    full range of pediatric physicians' services which are consistent with
    the relative values developed for other physicians' services under
    section 1848(c) of the Social Security Act. In developing such values,
    the Secretary shall conduct such refinements as may be necessary to
    produce appropriate estimates for such relative values.
        (b) Study.--
                (1) In general.--The Secretary shall conduct a study of the
            relative values for pediatric and other services to determine
            whether there are significant variations in the resources used
            in providing similar services to different populations. In
            conducting such study, the Secretary shall consult with
            appropriate organizations representing pediatricians and other
            physicians.
                (2) Report.--Not later than July 1, 1994, the Secretary
            shall submit to Congress a report on the study conducted under
            paragraph (1). Such report shall include any appropriate
            recommendations regarding needed changes in coding or other
            payment policies to ensure that payments for pediatric services
            appropriately reflect the resources required to provide these
            services.

    SEC. 13447. ANTIGENS UNDER PHYSICIAN FEE SCHEDULE.

        (a) In General.--Section 1848(j)(3) (42 U.S.C. 1395w-4(j)(3)) is
    amended by inserting ``(2)(G),'' after ``(2)(D),''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to services furnished on or after January 1, 1995.

    SEC. 13448. ADMINISTRATION OF CLAIMS RELATING TO PHYSICIANS' SERVICES.

        (a) Limitation on Carrier User Fees.--Section 1842(c) (42 U.S.C.
    1395u(c)) is amended by adding at the end the following new paragraph:
        ``(4) Neither a carrier nor the Secretary may impose a fee under
    this title--
                ``(A) for the filing of claims related to physicians'
            services,
                ``(B) for an error in filing a claim relating to
            physicians' services or for such a claim which is denied,
                ``(C) for any appeal under this title with respect to
            physicians' services,
                ``(D) for applying for (or obtaining) a unique identifier
            under subsection (r), or
                ``(E) for responding to inquiries respecting physicians'
            services or for providing information with respect to medical
            review of such services.''.
        (b) Clarification of Permissible Substitute Billing Arrangements.--
                (1) In general.--Clause (D) of section 1842(b)(6) (42
            U.S.C. 1395u(b)(6)), as amended by section 13449(f), is amended
            to read as follows: ``(D) payment may be made to a physician
            for physicians' services (and services furnished incident to
            such services) furnished by a second physician to patients of
            the first physician if (i) the first physician is unavailable
            to provide the services; (ii) the services are furnished
            pursuant to an arrangement between the two physicians that (I)
            is informal and reciprocal, or (II) involves per diem or other
            fee-for-time compensation for such services; (iii) the services
            are not provided by the second physician over a continuous
            period of more than 60 days; and (iv) the claim form submitted
            to the carrier for such services includes the second
            physician's unique identifier (provided under the system
            established under subsection (r)) and indicates that the claim
            meets the requirements of this clause for payment to the first
            physician''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to services furnished on or after the first day of
            the first month beginning more than 60 days after the date of
            the enactment of this Act.

    SEC. 13449. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

        (a) Overvalued Procedures (Section 4101 of OBRA-1990).--(1) Section
    1842(b)(16)(B)(iii) (42 U.S.C. 1395u(b)(16)(B)(iii)) is amended--
                (A) by striking ``, simple and subcutaneous'',
                (B) by striking ``; small'' and inserting ``and small'',
                (C) by striking ``treatments;'' the first place it appears
            and inserting ``and'',
                (D) by striking ``lobectomy;'',
                (E) by striking ``enterectomy; colectomy;
            cholecystectomy;'',
                (F) by striking ``; transurerethral resection'' and
            inserting ``and resection'', and
                (G) by striking ``sacral laminectomy;''.
        (2) Section 4101(b)(2) of OBRA-1990 is amended--
                (A) in the matter before subparagraph (A), by striking
            ``1842(b)(16)'' and inserting ``1842(b)(16)(B)'', and
                (B) in subparagraph (B)--
                        (i) by striking ``, simple and subcutaneous'',
                        (ii) by striking ``(HCPCS codes 19160 and 19162)''
                    and inserting ``(HCPCS code 19160)'', and
                        (iii) by striking all that follows ``(HCPCS codes
                    92250'' and inserting ``and 92260).''.
        (b) Radiology Services (Section 4102 of OBRA-1990).--(1) Section
    1834(b)(4) (42 U.S.C. 1395m(b)(4)) is amended by redesignating
    subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively.
        (2) Section 1834(b)(4)(D) (42 U.S.C. 1395m(b)(4)(D)) is amended--
                (A) in the matter before clause (i), by striking ``shall be
            determined as follows:'' and inserting ``shall, subject to
            clause (vii), be reduced to the adjusted conversion factor for
            the locality determined as follows:'',
                (B) in clause (iv), by striking ``Local adjustment.--
            Subject to clause (vii), the conversion factor to be applied
            to'' and inserting ``Adjusted conversion factor.--The adjusted
            conversion factor for'',
                (C) in clause (vii), by striking ``under this
            subparagraph'', and
                (D) in clause (vii), by inserting ``reduced under this
            subparagraph by'' after ``shall not be''.
        (3) Section 4102(c)(2) of OBRA-1990 is amended by striking
    ``radiology services'' and all that follows and inserting ``nuclear
    medicine services.''.
        (4) Section 4102(d) of OBRA-1990 is amended by striking ``new
    paragraph'' and inserting ``new subparagraph''.
        (5) Section 1834(b)(4)(E) (42 U.S.C. 1395m(b)(4)(E)) is amended by
    inserting ``Rule for certain scanning services.--'' after ``(E)''.
        (6) Section 1848(a)(2)(D)(iii) (42 U.S.C. 1395w-4(a)(2)(D)(iii)) is
    amended by striking ``that are subject to section 6105(b) of the
    Omnibus Budget Reconciliation Act of 1989'' and by striking ``provided
    under such section'' and inserting ``provided under section 6105(b) of
    the Omnibus Budget Reconciliation Act of 1989''.
        (c) Anesthesia Services (Section 4103 of OBRA-1990).--(1) Section
    4103(a) of OBRA-1990 is amended by striking ``Reduction in Fee
    Schedule'' and inserting ``Reduction in Prevailing Charges''.
        (2) Section 1842(q)(1)(B) (42 U.S.C. 1395u(q)(1)(B)) is amended--
                (A) in the matter before clause (i), by striking ``shall be
            determined as follows:'' and inserting ``shall, subject to
            clause (iv), be reduced to the adjusted prevailing charge
            conversion factor for the locality determined as follows:'',
            and
                (B) in clause (iii), by striking ``Subject to clause (iv),
            the prevailing charge conversion factor to be applied in'' and
            inserting ``The adjusted prevailing charge conversion factor
            for''.
        (d) Assistants at Surgery (Section 4107 of OBRA-1990).--(1) Section
    4107(c) of OBRA-1990 is amended by inserting ``(a)(1)'' after
    ``subsection''.
        (2) Section 4107(a)(2) of OBRA-1990 is amended by adding at the end
    the following: ``In applying section 1848(g)(2)(D) of the Social
    Security Act for services of an assistant-at-surgery furnished during
    1991, the recognized payment amount shall not exceed the maximum amount
    specified under section 1848(i)(2)(A) of such Act (as applied under
    this paragraph in such year).''.
        (e) Technical Components of Diagnostic Services (Section 4108 of
    OBRA-1990).--Section 1842(b) (42 U.S.C. 1395u(b)) is amended by
    redesignating paragraph (18), as added by section 4108(a) of OBRA-1990,
    as paragraph (17) and, in such paragraph, by inserting ``, tests
    specified in paragraph (14)(C)(i),'' after ``diagnostic laboratory
    tests''.
        (f) Reciprocal Billing Arrangements (Section 4110 of OBRA-1990).--
    Section 1842(b)(6)(D) (42 U.S.C. 1395u(b)(6)(D)) is amended--
                (1) by striking ``visit services (including emergency
            visits and related services)'' and inserting ``physicians'
            services (and services furnished incident to such services)'';
                (2) by striking ``on an occasional, reciprocal basis'' and
            inserting ``under an arrangement that is informal and
            reciprocal or involves per diem or other fee-for-time
            compensation for services'';
                (3) by striking ``visit'' in subclauses (i), (ii), and
            (iv); and
                (4) in subclause (iii), by striking ``the claim'' and all
            that follows through the comma at the end and inserting ``the
            claim meets the requirements of this clause for payment to the
            first physician''.
        (g) Study of Aggregation Rule for Claims of Similar Physician
    Services (Section 4113 of OBRA-1990).--Section 4113 of OBRA-1990 is
    amended--
                (1) by inserting ``of the Social Security Act'' after
            ``1869(b)(2)''; and
                (2) by striking ``December 31, 1992'' and inserting
            ``December 31, 1993''.
        (h) Statewide Fee Schedules (Section 4117 of OBRA-1990).--Section
    4117 of OBRA-1990 is amended--
                (1) in subsection (a)--
                        (A) by striking ``In General.--'', and
                        (B) by striking ``, if the'' and all that follows
                    through ``1991, ''; and
                (2) by striking subsections (b), (c), and (d).
        (i) Other Miscellaneous and Technical Amendments.--(1) The heading
    of section 1834(f) (42 U.S.C. 1395m(f)) is amended by striking ``Fiscal
    Year''.
        (2)(A) Section 4105(b) of OBRA-1990 is amended--
                (i) in paragraph (2), by striking ``amendments'' and
            inserting ``amendment'', and
                (ii) in paragraph (3), by striking ``amendments made by
            paragraphs (1) and (2)'' and inserting ``amendment made by
            paragraph (1)''.
        (B) Section 1848(f)(2)(C) (42 U.S.C. 1395w-4(f)(2)(C)) is amended
    by inserting ``Performance standard rates of increase for fiscal year
    1991.--'' after ``(C)''.
        (C) Section 4105(d) of OBRA-1990 is amended by inserting
    ``Publication of Performance Standard Rates.--'' after ``(d)''.
        (3) Section 1842(b)(4)(F) (42 U.S.C. 1395u(b)(4)(F)) is amended--
                (A) in clause (i), by striking ``prevailing charge'' the
            first place it appears and inserting ``customary charge''; and
                (B) in clause (ii)(III), by striking ``second, third, and
            fourth'' and inserting ``first, second, and third''.
        (4) Section 1842(b)(4)(F)(ii)(I) (42 U.S.C. 1395u(b)(4)(F)(ii)(I))
    is amended by striking ``respiratory therapist,''.
        (5) Section 4106(c) of OBRA-1990 is amended by inserting ``of the
    Social Security Act'' after ``1848(d)(1)(B)''.
        (6) Section 4114 of OBRA-1990 is amended by striking ``patients''
    the second place it appears.
        (7) Section 1848(e)(1)(C) (42 U.S.C. 1395w-4(e)(1)(C)) is amended
    by inserting ``date of the'' after ``since the''.
        (8) Section 4118(f)(1)(D) of OBRA-1990 is amended by striking ``is
    amended''.
        (9) Section 4118(f)(1)(N)(ii) of OBRA-1990 is amended by striking
    ``subsection (f)(5)(A)'' and inserting ``subsection (f)(5)(A))''.
        (10) Section 1845(e) (42 U.S.C. 1395w-1(e)) is amended--
                (A) by striking paragraph (2); and
                (B) by redesignating paragraphs (3), (4), and (5) as
            paragraphs (2), (3), and (4).
        (11) Section 4118(j)(2) of OBRA-1990 is amended by striking ``In
    section'' and inserting ``Section''.
        (12)(A) Section 1848(i)(3) (42 U.S.C. 1395w-4(i)(3)) is amended by
    striking the space before the period at the end.
        (B) Section 1834(a)(10)(B) (42 U.S.C. 1395m(a)(10)(B)) is amended--
                (i) by striking ``apply to'' and inserting ``would
            otherwise apply to'', and
                (ii) by inserting before the period at the end ``but for
            the application of section 1848(i)(3)''.
        (j) Effective Date.--The amendments made by this section and the
    provisions of this section shall take effect as if included in the
    enactment of OBRA-1990.

               Subchapter C--Ambulatory Surgical Center Services

    SEC. 13451. DESIGNATION OF CERTAIN HOSPITALS AS EYE OR EYE AND EAR
                  HOSPITALS.

        (a) In General.--Section 1833(i) (42 U.S.C. 1395l(i)) is amended--
                (1) in subparagraph (B)(ii)--
                        (A) by striking ``the last sentence of this
                    clause'' and inserting ``paragraph (4)'', and
                        (B) by striking the last sentence; and
                (2) by inserting after paragraph (3) the following new
            paragraph:
        ``(4)(A) In the case of a hospital that--
                ``(i) makes application to the Secretary and demonstrates
            that it specializes in eye services or eye and ear services (as
            determined by the Secretary),
                ``(ii) receives more than 30 percent of its total revenues
            from outpatient services, and
                ``(iii) on October 1, 1987--
                        ``(I) was an eye specialty hospital or an eye and
                    ear specialty hospital, or
                        ``(II) was operated as an eye or eye and ear unit
                    (as defined in subparagraph (B)) of a general acute
                    care hospital which, on the date of the application
                    described in clause (i), operates less than 20 percent
                    of the beds that the hospital operated on October 1,
                    1987, and has sold or otherwise disposed of a
                    substantial portion of the hospital's other acute care
                    operations,
    the cost proportion and ASC proportion in effect under subclauses (I)
    and (II) of paragraph (2)(B)(ii) for cost reporting periods beginning
    in fiscal year 1988 shall remain in effect for cost reporting periods
    beginning on or after October 1, 1988, and before January 1, 1995.
        ``(B) For purposes of this subparagraph (A)(iii)(II), the term `eye
    or eye and ear unit' means a physically separate or distinct unit
    containing separate surgical suites devoted solely to eye or eye and
    ear services.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to portions of cost reporting periods beginning on or after
    January 1, 1994.

    SEC. 13452. TREATMENT OF INTRAOCULAR LENSES.

        (a) Extension of Cap on Payments Through 1994.--
                (1) In general.--Section 4151(c)(3) of OBRA-1990 is amended
            by striking ``December 31, 1992'' and inserting ``December 31,
            1994''.
                (2) Effective date.--The amendment made by paragraph (1)
            this subsection shall be effective as if included in the
            enactment of OBRA-1990.
        (b) Study of Costs of Intraocular Lenses.--
                (1) Study.--The Secretary of Health and Human Services
            shall conduct a study, based on recent data, of the acquisition
            costs to providers of intraocular lenses provided to
            individuals enrolled under part B of the medicare program and
            shall include in the study an analysis of the impact of the
            availability of new technology lenses on such costs.
                (2) Report.--Not later than 1 year after the date of the
            enactment of this Act, the Secretary shall submit a report on
            the study conducted under paragraph (1) to the Committee on
            Finance of the Senate and the Committees on Ways and Means and
            Energy and Commerce of the House of Representatives, and shall
            include in the report any recommendations the Secretary
            considers appropriate regarding the determination of payment
            amounts for intraocular lenses under part B of the medicare
            program.

    SEC. 13453. TECHNICAL AMENDMENTS.

        (a) Payment Amounts for Services Furnished in Ambulatory Surgical
    Centers.--
                (1) Use of survey to determine incurred costs.--Section
            1833(i)(2)(A)(i) (42 U.S.C. 1395l(i)(2)(A)(i)) is amended by
            striking the comma at the end and inserting the following: ``,
            as determined in accordance with a survey (based upon a
            representative sample of procedures and facilities) taken not
            later than January 1, 1994, and every 5 years thereafter, of
            the actual audited costs incurred by such centers in providing
            such services,''.
                (2) Automatic application of inflation adjustment.--Section
            1833(i)(2) (42 U.S.C. 1395l(i)(2)) is amended--
                        (A) in the second sentence of subparagraph (A) and
                    the second sentence of subparagraph (B), by striking
                    ``and may be adjusted by the Secretary, when
                    appropriate,''; and
                        (B) by adding at the end the following new
                    subparagraph:
        ``(C) Notwithstanding the second sentence of subparagraph (A) or
    the second sentence of subparagraph (B), if the Secretary has not
    updated amounts established under such subparagraphs with respect to
    facility services furnished during a fiscal year (beginning with fiscal
    year 1995), such amounts shall be increased by the percentage increase
    in the consumer price index for all urban consumers (U.S. city average)
    for the 12-month period ending with March of the preceding fiscal
    year.''.
                (3) Consultation requirement.--The second sentence of
            section 1833(i)(1) (42 U.S.C. 1395l(i)(1)) is amended by
            striking the period and inserting the following: ``, in
            consultation with appropriate trade and professional
            organizations.''.
        (b) Adjustments to Payment Amounts for New Technology Intraocular
    Lenses.--
                (1) Establishment of process for review of amounts.--Not
            later than 1 year after the date of the enactment of this Act,
            the Secretary of Health and Human Services (in this subsection
            referred to as the ``Secretary'') shall develop and implement a
            process under which interested parties may request review by
            the Secretary of the appropriateness of the reimbursement
            amount provided under section 1833(i)(2)(A)(iii) of the Social
            Security Act with respect to a class of new technology
            intraocular lenses. For purposes of the preceding sentence, an
            intraocular lens may not be treated as a new technology lens
            unless it has been approved by the Food and Drug
            Administration.
                (2) Factors considered.--In determining whether to provide
            an adjustment of payment with respect to a particular lens
            under paragraph (1), the Secretary shall take into account
            whether use of the lens is likely to result in reduced risk of
            intraoperative or postoperative complication or trauma,
            accelerated postoperative recovery, reduced induced
            astigmatism, improved postoperative visual acuity, more stable
            postoperative vision, or other comparable clinical advantages.
                (3) Notice and comment.--The Secretary shall publish notice
            in the Federal Register from time to time (but no less often
            than once each year) of a list of the requests that the
            Secretary has received for review under this subsection, and
            shall provide for a 30-day comment period on the lenses that
            are the subjects of the requests contained in such notice. The
            Secretary shall publish a notice of his determinations with
            respect to intraocular lenses listed in the notice within 90
            days after the close of the comment period.
                (4) Effective date of adjustment.--Any adjustment of a
            payment amount (or payment limit) made under this subsection
            shall become effective not later than 30 days after the date on
            which the notice with respect to the adjustment is published
            under paragraph (3).
        (c) Technical Correction Relating to Blend Amounts for Ambulatory
    Surgical Center Payments.--
                (1) In general.--Subclauses (I) and (II) of section
            1833(i)(3)(B)(ii) (42 U.S.C. 1395l(i)(3)(B)(ii)) are each
            amended--
                        (A) by striking ``for reporting'' and inserting
                    ``for portions of cost reporting''; and
                        (B) by striking ``and on or before'' and inserting
                    ``and ending on or before''.
                (2) Effective date.--The amendments made by paragraph (1)
            shall take effect as if included in the enactment of OBRA-1990.
        (d) Technical Correction Related to Cataract Surgery.--Effective as
    if included in the enactment of OBRA-1990, section 4151(c)(3) of such
    Act is amended by striking ``for the insertion of an intraocular lens''
    and inserting ``for an intraocular lens inserted''.

                    Subchapter D--Durable Medical Equipment

    SEC. 13461. CERTIFICATION OF SUPPLIERS.

        (a) Requirements.--
                (1) In general.--Section 1834 (42 U.S.C. 1395m) is amended
            by adding at the end the following new subsection:
        ``(i) Requirements for Suppliers of Medical Equipment and
    Supplies.--
                ``(1) Issuance and renewal of supplier number.--
                        ``(A) Payment.--Except as provided in subparagraph
                    (C), no payment may be made under this part after
                    October 1, 1993, for items furnished by a supplier of
                    medical equipment and supplies unless such supplier
                    obtains (and renews at such intervals as the Secretary
                    may require) a supplier number.
                        ``(B) Standards for possessing a supplier number.--
                    A supplier may not obtain a supplier number unless--
                                ``(i) for medical equipment and supplies
                            furnished on or after October 1, 1993, and on
                            or before December 31, 1994, the supplier meets
                            standards prescribed by the Secretary; and
                                ``(ii) for medical equipment and supplies
                            furnished on or after January 1, 1995, the
                            supplier meets revised standards prescribed by
                            the Secretary (in consultation with
                            representatives of suppliers of medical
                            equipment and supplies, carriers, and
                            consumers) that shall include requirements that
                            the supplier--
                                        ``(I) comply with all applicable
                                    State and Federal licensure and
                                    regulatory requirements;
                                        ``(II) maintain a physical facility
                                    on an appropriate site;
                                        ``(III) have proof of appropriate
                                    liability insurance; and
                                        ``(IV) meet such other requirements
                                    as the Secretary may specify.
                        ``(C) Exception for items furnished as incident to
                    a physician's service.--Subparagraph (A) shall not
                    apply with respect to medical equipment and supplies
                    furnished as an incident to a physician's service.
                        ``(D) Prohibition against multiple supplier
                    numbers.--The Secretary may not issue more than one
                    supplier number to any supplier of medical equipment
                    and supplies unless the issuance of more than one
                    number is appropriate to identify subsidiary or
                    regional entities under the supplier's ownership or
                    control.
                        ``(E) Prohibition against delegation of supplier
                    determinations.--The Secretary may not delegate (other
                    than by contract under section 1842) the responsibility
                    to determine whether suppliers meet the standards
                    necessary to obtain a supplier number.
                ``(2) Certificates of medical necessity.--
                        ``(A) Standardized certificates.--Not later than
                    October 1, 1993, the Secretary shall, in consultation
                    with carriers under this part, develop one or more
                    standardized certificates of medical necessity (as
                    defined in subparagraph (C)) for medical equipment and
                    supplies for which the Secretary determines that such a
                    certificate is necessary.
                        ``(B) Prohibition against distribution by suppliers
                    of certificates of medical necessity.--
                                ``(i) In general.--Except as provided in
                            clause (ii), a supplier of medical equipment
                            and supplies may not distribute to physicians
                            or to individuals entitled to benefits under
                            this part for commercial purposes any completed
                            or partially completed certificates of medical
                            necessity on or after October 1, 1993.
                                ``(ii) Exception for certain billing
                            information.--Clause (i) shall not apply with
                            respect to a certificate of medical necessity
                            for any item that is not contained on the list
                            of potentially overused items developed by the
                            Secretary under subsection (a)(15)(A) to the
                            extent that such certificate contains only
                            information completed by the supplier of
                            medical equipment and supplies identifying such
                            supplier and the beneficiary to whom such
                            medical equipment and supplies are furnished, a
                            description of such medical equipment and
                            supplies, any product code identifying such
                            medical equipment and supplies, and any other
                            administrative information (other than
                            information relating to the beneficiary's
                            medical condition) identified by the Secretary.
                            In the event a supplier provides a certificate
                            of medical necessity containing information
                            permitted under this clause, such certificate
                            shall also contain the fee schedule amount and
                            the supplier's charge for the medical equipment
                            or supplies being furnished prior to
                            distribution of such certificate to the
                            physician.
                                ``(iii) Penalty.--Any supplier of medical
                            equipment and supplies who knowingly and
                            willfully distributes a certificate of medical
                            necessity in violation of clause (i) is subject
                            to a civil money penalty in an amount not to
                            exceed $1,000 for each such certificate of
                            medical necessity so distributed. The
                            provisions of section 1128A (other than
                            subsections (a) and (b)) shall apply to civil
                            money penalties under this subparagraph in the
                            same manner as they apply to a penalty or
                            proceeding under section 1128A(a).
                        ``(C) Definition.--For purposes of this paragraph,
                    the term `certificate of medical necessity' means a
                    form or other document containing information required
                    by the Secretary to be submitted to show that a covered
                    item is reasonable and necessary for the diagnosis or
                    treatment of illness or injury or to improve the
                    functioning of a malformed body member.
        ``(3) Coverage and review criteria.--
                        ``(A) Development and establishment.--Not later
                    than January 1, 1995, the Secretary, in consultation
                    with representatives of suppliers of medical equipment
                    and supplies, individuals enrolled under this part, and
                    appropriate medical specialty societies, shall develop
                    and establish uniform national coverage and utilization
                    review criteria for 200 items of medical equipment and
                    supplies selected in accordance with the standards
                    described in subparagraph (B). The Secretary shall
                    publish the criteria as part of the instructions
                    provided to fiscal intermediaries and carriers under
                    this part and no further publication, including
                    publication in the Federal Register, shall be required.
                        ``(B) Standards for selecting items subject to
                    criteria.--The Secretary may select an item for
                    coverage under the criteria developed and established
                    under subparagraph (A) if the Secretary finds that--
                                ``(i) the item is frequently purchased or
                            rented by beneficiaries;
                                ``(ii) the item is frequently subject to a
                            determination that such item is not medically
                            necessary; or
                                ``(iii) the coverage or utilization
                            criteria applied to the item (as of the date of
                            the enactment of this subsection) is not
                            consistent among carriers.
                        ``(C) Annual review and expansion of items subject
                    to criteria.--The Secretary shall annually review the
                    coverage and utilization of items of medical equipment
                    and supplies to determine whether items not included
                    among the items selected under subparagraph (A) should
                    be made subject to uniform national coverage and
                    utilization review criteria, and, if appropriate, shall
                    develop and apply such criteria to such additional
                    items.
                ``(4) Definition.--The term `medical equipment and
            supplies'' means--
                        ``(A) durable medical equipment (as defined in
                    section 1861(n));
                        ``(B) prosthetic devices (as described in section
                    1861(s)(8));
                        ``(C) orthotics and prosthetics (as described in
                    section 1861(s)(9));
                        ``(D) surgical dressings (as described in section
                    1861(s)(5));
                        ``(E) such other items as the Secretary may
                    determine; and
                        ``(F) for purposes of paragraphs (1) and (3)--
                                ``(i) home dialysis supplies and equipment
                            (as described in section 1861(s)(2)(F)), and
                                ``(ii) immunosuppressive drugs (as
                            described in section 1861(s)(2)(J)).''.
        (2) Conforming amendment.--Effective October 1, 1993, paragraph
    (16) of section 1834(a) (42 U.S.C. 1395m(a)) is repealed.
        (b) Report on Effect of Uniform Criteria on Utilization of Items.--
    Not later than July 1, 1995, the Secretary shall submit a report to the
    Committee on Ways and Means and the Committee on Energy and Commerce of
    the House of Representatives and the Committee on Finance of the Senate
    analyzing the impact of the uniform criteria established under section
    1834(i)(3)(A) of the Social Security Act (as added by subsection (a))
    on the utilization of items of medical equipment and supplies by
    individuals enrolled under part B of the medicare program.
        (c) Use of Covered Items by Disabled Beneficiaries.--
                (1) In general.--The Secretary of Health and Human Services
            in consultation with representatives of suppliers of durable
            medical equipment under part B of the medicare program and
            individuals entitled to benefits under such program on the
            basis of disability, shall conduct a study of the effects of
            the methodology for determining payments for items of such
            equipment under such part on the ability of such individuals to
            obtain items of such equipment, including customized items.
                (2) Report.--Not later than May 1, 1994, the Secretary
            shall submit a report to Congress on the study conducted under
            paragraph (1), and shall include in the report such
            recommendations as the Secretary considers appropriate to
            assure that disabled medicare beneficiaries have access to
            items of durable medical equipment.
        (d) Criteria for Treatment of Items as Prosthetics Devices or
    Orthotics and Prosthetics.--Not later than July 1, 1994, the Secretary
    of Health and Human Services shall submit a report to the Committees on
    Ways and Means and Energy and Commerce of the House of Representatives
    and the Committee on Finance of the Senate describing prosthetic
    devices or orthotics and prosthetics covered under part B of the
    medicare program that do not require individualized or custom fitting
    and adjustment to be used by a patient. Such report shall include
    recommendations for an appropriate methodology for determining the
    amount of payment for such items under such program.

    SEC. 13462. PROHIBITION AGAINST CARRIER FORUM SHOPPING.

        (a) In General.--Section 1834(a)(12) (42 U.S.C. 1395m(a)(12)) is
    amended to read as follows:
                ``(12) Use of carriers to process claims.--
                        ``(A) Designation of regional carriers.--The
                    Secretary may designate, by regulation under section
                    1842, one carrier for one or more entire regions to
                    process all claims within the region for covered items
                    under this section.
                        ``(B) Prohibition against carrier shopping.--(i) No
                    supplier of a covered item may present or cause to be
                    presented a claim for payment under this part unless
                    such claim is presented to the appropriate regional
                    carrier (as designated by the Secretary).
                        ``(ii) For purposes of clause (i), the term
                    `appropriate regional carrier' means the carrier having
                    jurisdiction over the geographic area that includes the
                    permanent residence of the patient to whom the item is
                    furnished.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to items furnished on or after October 1, 1993.
        (c) Clarification of Authority to Designate Carriers for Other
    Items and Services.--Nothing in this subsection or the amendment made
    by this subsection may be construed to restrict the authority of the
    Secretary of Health and Human Services to designate regional carriers
    or modify claims jurisdiction rules with respect to items or services
    under part B of the medicare program that are not covered items under
    section 1834(a) of the Social Security Act or prosthetic devices or
    orthotics and prosthetics under section 1834(h) of such Act.

    SEC. 13463. RESTRICTIONS ON CERTAIN MARKETING AND SALES ACTIVITIES.

        (a) Prohibiting Unsolicited Telephone Contacts From Suppliers of
    Durable Medical Equipment to Medicare Beneficiaries.--
                (1) In general.--Section 1834(a) (42 U.S.C. 1395m(a)) is
            amended by adding at the end the following new paragraph:
                ``(17) Prohibition against unsolicited telephone contacts
            by suppliers.--
                        ``(A) In general.--A supplier of a covered item
                    under this subsection may not contact an individual
                    enrolled under this part by telephone regarding the
                    furnishing of a covered item to the individual (other
                    than a covered item the supplier has already furnished
                    to the individual) unless--
                                ``(i) the individual gives permission to
                            the supplier to make contact by telephone for
                            such purpose; or
                                ``(ii) the supplier has furnished a covered
                            item under this subsection to the individual
                            during the 15-month period preceding the date
                            on which the supplier contacts the individual
                            for such purpose.
                        ``(B) Prohibiting payment for items furnished
                    subsequent to unsolicited contacts.--If a supplier
                    knowingly contacts an individual in violation of
                    subparagraph (A), no payment may be made under this
                    part for any item subsequently furnished to the
                    individual by the supplier.
                        ``(C) Exclusion from program for suppliers engaging
                    in pattern of unsolicited contacts.--If a supplier
                    knowingly contacts individuals in violation of
                    subparagraph (A) to such an extent that the supplier's
                    conduct establishes a pattern of contacts in violation
                    of such subparagraph, the Secretary shall exclude the
                    supplier from participation in the programs under this
                    Act, in accordance with the procedures set forth in
                    subsections (c), (f), and (g) of section 1128.''.
                (2) Requiring refund of amounts collected for disallowed
            items.--Section 1834(a) (42 U.S.C. 1395m(a)), as amended by
            paragraph (1), is amended by adding at the end the following
            new paragraph:
                ``(18) Refund of amounts collected for certain disallowed
            items.--
                        ``(A) In general.--If a nonparticipating supplier
                    furnishes to an individual enrolled under this part a
                    covered item for which no payment may be made under
                    this part by reason of paragraph (17)(B), the supplier
                    shall refund on a timely basis to the patient (and
                    shall be liable to the patient for) any amounts
                    collected from the patient for the item, unless--
                                ``(i) the supplier establishes that the
                            supplier did not know and could not reasonably
                            have been expected to know that payment may not
                            be made for the item by reason of paragraph
                            (17)(B), or
                                ``(ii) before the item was furnished, the
                            patient was informed that payment under this
                            part may not be made for that item and the
                            patient has agreed to pay for that item.
                        ``(B) Sanctions.--If a supplier knowingly and
                    willfully fails to make refunds in violation of
                    subparagraph (A), the Secretary may apply sanctions
                    against the supplier in accordance with section
                    1842(j)(2).
                        ``(C) Notice.--Each carrier with a contract in
                    effect under this part with respect to suppliers of
                    covered items shall send any notice of denial of
                    payment for covered items by reason of paragraph
                    (17)(B) and for which payment is not requested on an
                    assignment-related basis to the supplier and the
                    patient involved.
                        ``(D) Timely basis defined.--A refund under
                    subparagraph (A) is considered to be on a timely basis
                    only if--
                                ``(i) in the case of a supplier who does
                            not request reconsideration or seek appeal on a
                            timely basis, the refund is made within 30 days
                            after the date the supplier receives a denial
                            notice under subparagraph (C), or
                                ``(ii) in the case in which such a
                            reconsideration or appeal is taken, the refund
                            is made within 15 days after the date the
                            supplier receives notice of an adverse
                            determination on reconsideration or appeal.''.
        (b) Conforming Amendment.--Section 1834(h)(3) (42 U.S.C.
    1395m(h)(3)) is amended by striking ``Paragraph (12)'' and inserting
    ``Paragraphs (12) and (17)''.
        (c) Effective Date.--The amendments made by subsections (a) and (b)
    shall apply to items furnished after the expiration of the 60-day
    period that begins on the date of the enactment of this Act.

    SEC. 13464. ANTI-KICKBACK CLARIFICATION.

        (a) In General.--Section 1128B(b)(3)(B) (42 U.S.C. 1320a-
    7b(b)(3)(B)) is amended by inserting before the semicolon ``(except
    that in the case of a contract supply arrangement between any entity
    and a supplier of medical supplies and equipment (as defined in section
    1834(i)(4), but not including items described in subparagraph (F) of
    such section), such employment shall not be considered bona fide to the
    extent that it includes tasks of a clerical and cataloging nature in
    transmitting to suppliers assignment rights of individuals eligible for
    benefits under part B of title XVIII, or performance of warehousing or
    stock inventory functions)''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply with respect to services furnished on or after the first day of
    the first month that begins after the expiration of the 60-day period
    beginning on the date of the enactment of this Act.

    SEC. 13465. LIMITATIONS ON BENEFICIARY LIABILITY FOR NONCOVERED
                  SERVICES.

        (a) In General.--Section 1834(i) (42 U.S.C. 1395m(i)), as added by
    section 13461(a)(1), is amended--
                (1) by redesignating paragraph (4) as paragraph (5), and
                (2) by inserting after paragraph (3) the following new
            paragraph:
                ``(4) Limitation on patient liability.--If a supplier of
            medical equipment and supplies (as defined in paragraph (5))--
                        ``(A) furnishes an item or service to a beneficiary
                    for which no payment may be made by reason of paragraph
                    (1);
                        ``(B) furnishes an item or service to a beneficiary
                    for which payment is denied in advance under subsection
                    (a)(15); or
                        ``(C) furnishes an item or service to a beneficiary
                    for which payment is denied under section 1862(a)(1);
            any expenses incurred for items and services furnished to an
            individual by such a supplier not on an assigned basis shall be
            the responsibility of such supplier. The individual shall have
            no financial responsibility for such expenses and the supplier
            shall refund on a timely basis to the individual (and shall be
            liable to the individual for) any amounts collected from the
            individual for such items or services. The provisions of
            subsection (a)(18) shall apply to refunds required under the
            previous sentence in the same manner as such provisions apply
            to refunds under such subsection.''.
                (2) Conforming amendment.--Section 1128B(b)(3)(B) (42
            U.S.C. 1320a-7b(b)(3)(B)), as amended by section 13464(a), is
            amended by striking ``1834(i)(4)'' and inserting
            ``1834(i)(5)''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to items or services furnished on or after October 1, 1993.

    SEC. 13466. ADJUSTMENTS FOR INHERENT REASONABLENESS.

        (a) Adjustments Made to Final Payment Amounts.--
                (1) In general.--Section 1834(a)(10)(B) (42 U.S.C.
            1395m(a)(10)(B)) is amended by adding at the end the following:
            ``In applying such provisions to payments for an item under
            this subsection, the Secretary shall make adjustments to the
            payment basis for the item described in paragraph (1)(B) if the
            Secretary determines (in accordance with such provisions and on
            the basis of prices and costs applicable at the time the item
            is furnished) that such payment basis is not inherently
            reasonable.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall take effect on the date of the enactment of this Act.
        (b) Adjustment Required for Certain Items.--
                (1) In general.--In accordance with section 1834(a)(10)(B)
            of the Social Security Act (as amended by subsection (a)), the
            Secretary of Health and Human Services shall determine whether
            the payment amounts for the items described in paragraph (2)
            are not inherently reasonable, and shall adjust such amounts in
            accordance with such section if the amounts are not inherently
            reasonable.
                (2) Items described.--The items referred to in paragraph
            (1) are decubitus care equipment, transcutaneous electrical
            nerve stimulators, and any other items considered appropriate
            by the Secretary.

    SEC. 13467. TREATMENT OF NEBULIZERS AND ASPIRATORS.

        (a) In General.--Section 1834(a)(3)(A) (42 U.S.C. 1395m(a)(3)(A))
    is amended by striking ``ventilators, aspirators, IPPB machines, and
    nebulizers'' and inserting ``ventilators and IPPB machines''.
        (b) Payment for Accessories Relating to Nebulizers and
    Aspirators.--Section 1834(a)(2)(A) (42 U.S.C. 1395m(a)) is amended--
                (1) by striking ``or'' at the end of clause (i),
                (2) by adding ``or'' at the end of clause (ii), and
                (3) by inserting after clause (ii) the following new
            clause:
                                ``(iii) which is an accessory used in
                            conjunction with a nebulizer or aspirator,''.
        (c) Effective Date.--The amendments made by this section shall
    apply to items furnished on or after January 1, 1994.

    SEC. 13468. PAYMENT FOR OSTOMY SUPPLIES AND OTHER SUPPLIES.

        (a) Ostomy Supplies, Tracheostomy Supplies, and Urologicals.--
                (1) In general.--Section 1834(h)(1) (42 U.S.C. 1395m(h)(1))
            is amended by adding at the end the following new subparagraph:
                        ``(E) Exception for certain items.--Payment for
                    ostomy supplies, tracheostomy supplies, and urologicals
                    shall be made in accordance with subparagraphs (B) and
                    (C) of section 1834(a)(2).''.
                (2) Conforming amendment.--Section 1834(h)(1)(B) (42 U.S.C.
            1395m(h)(1)(B)) is amended by striking ``subparagraph (C),''
            and inserting ``subparagraphs (C) and (E),''.
                (3) Effective date.--The amendments made by this subsection
            shall apply to items furnished on or after January 1, 1994.
        (b) Surgical Dressings.--
                (1) In general.--Section 1834 (42 U.S.C. 1395m), as amended
            by section 13461(a), is amended by adding at the end the
            following new subsection:
        ``(j) Payment for Surgical Dressings.--
                ``(1) In general.--Payment under this subsection for
            surgical dressings (described in section 1861(s)(5)) shall be
            made in a lump sum amount for the purchase of the item in an
            amount equal to 80 percent of the lesser of--
                        ``(A) the actual charge for the item; or
                        ``(B) a payment amount determined in accordance
                    with the methodology described in subparagraphs (B) and
                    (C) of subsection (a)(2) (except that in applying such
                    methodology, the national limited payment amount
                    referred to in such subparagraphs shall be initially
                    computed based on local payment amounts using average
                    reasonable charges for the 12-month period ending
                    December 31, 1992, increased by the covered item
                    updates described in such subsection for 1993 and
                    1994).
                ``(2) Exceptions.--Paragraph (1) shall not apply to
            surgical dressings that are--
                        ``(A) furnished as an incident to a physician's
                    professional service; or
                        ``(B) furnished by a home health agency.''.
                (2) Conforming amendment.--Section 1833(a)(1) (42 U.S.C.
            1395l(a)(1)), as amended by sections 13478(e)(2) and
            13445(e)(1), is amended--
                        (A) by striking ``and'' before ``(P)'', and
                        (B) by inserting before the semicolon at the end
                    the following: ``, and (Q) with respect to surgical
                    dressings, the amounts paid shall be the amounts
                    determined under section 1834(j);''.
                (3) Effective date.--The amendments made by this subsection
            shall apply to items furnished on or after January 1, 1994.
        (c) Reduction in Payments for TENS Devices.--
                (1) In general.--Section 1834(a)(1)(D) (42 U.S.C.
            1395m(a)(1)(D)) is amended by striking ``15 percent'' the
            second place it appears and inserting ``45 percent''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to items furnished on or after January 1, 1994.

    SEC. 13469. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

        (a) Updates to Payment Amounts.--Subparagraph (A) of section
    1834(a)(14) (42 U.S.C. 1395m(a)(14)) is amended to read as follows:
                        ``(A) for 1991 and 1992, the percentage increase in
                    the consumer price index for all urban consumers (U.S.
                    city average) for the 12-month period ending with June
                    of the previous year reduced by 1 percentage point;
                    and''.
        (b) Treatment of Potentially Overused Items and Advanced
    Determinations of Coverage.--
                (1) In general.--Effective on the date of the enactment of
            this Act, section 1834(a)(15) (42 U.S.C. 1395m(a)(15)) is
            amended to read as follows:
                ``(15) Special treatment for potentially overused items.--
                        ``(A) Development of list of items by secretary.--
                    The Secretary shall develop and periodically update a
                    list of items for which payment may be made under this
                    subsection that are potentially overused, and shall
                    include in such list seat-lift mechanisms,
                    transcutaneous electrical nerve stimulators, motorized
                    scooters, decubitus care mattresses, and any such other
                    item determined by the Secretary to be potentially
                    overused on the basis of any of the following
                    criteria--
                                ``(i) the item is marketed directly to
                            potential patients;
                                ``(ii) the item is marketed with an offer
                            to potential patients to waive the costs of
                            coinsurance associated with the item or is
                            marketed as being available at no cost to
                            policyholders of a medicare supplemental policy
                            (as defined in section 1882(g)(1));
                                ``(iii) the item has been subject to a
                            consistent pattern of overutilization; or
                                ``(iv) a high proportion of claims for
                            payment for such item under this part may not
                            be made because of the application of section
                            1862(a)(1).
                        ``(B) Items subject to special carrier scrutiny.--
                    Payment may not be made under this part for any item
                    contained in the list developed by the Secretary under
                    subparagraph (A) unless the carrier has subjected the
                    claim for payment for the item to special scrutiny or
                    has followed the procedures described in paragraph
                    (11)(C) with respect to the item.''.
                (2) Advance determination by carriers.--Effective January
            1, 1994, section 1834(a)(11) (42 U.S.C. 1395m(a)) is amended by
            adding at the end the following new subparagraph:
                        ``(C) Carrier determinations for certain items in
                    advance.--A carrier shall determine in advance whether
                    payment for an item may not be made under this
                    subsection because of the application of section
                    1862(a)(1) if--
                                ``(i) the item is a customized item (other
                            than inexpensive items specified by the
                            Secretary); or
                                ``(ii) the item is a specified covered item
                            under subparagraph (B).''.
                (3) Inclusion in carrier performance evaluations.--
            Effective for standards applied for contract years beginning
            after the date of the enactment of this Act, section 1842(c)
            (42 U.S.C. 1395u(c)), as amended by section 13448(a), is
            amended by adding at the end the following new paragraph:
        ``(5) Each contract under this section which provides for the
    disbursement of funds, as described in subsection (a)(1)(B), shall
    require the carrier to meet criteria developed by the Secretary to
    measure the timeliness of carrier responses to requests for payment of
    items described in section 1834(a)(11)(C).''.
                (4) Application to prosthetic devices and orthotics and
            prosthetics.--Section 1834(h)(3) (42 U.S.C. 1395m(h)(3)) is
            amended by striking ``paragraph (10) and paragraph (11)'' and
            inserting ``paragraphs (10) and (11)''.
        (c) Study of Variations in Durable Medical Equipment Supplier
    Costs.--
                (1) Collection and analysis of supplier cost data.--The
            Administration of the Health Care Financing Administration
            shall, in consultation with appropriate organizations, collect
            data on supplier costs of durable medical equipment for which
            payment may be made under part B of the medicare program, and
            shall analyze such data to determine the proportions of such
            costs attributable to the service and product components of
            furnishing such equipment and the extent to which such
            proportions vary by type of equipment and by the geographic
            region in which the supplier is located.
                (2) Development of geographic adjustment index; reports.--
            Not later than January 1, 1995--
                        (A) the Administrator shall submit a report to the
                    Committees on Energy and Commerce and Ways and Means of
                    the House of Representatives and the Committee on
                    Finance of the Senate on the data collected and the
                    analysis conducted under paragraph (1), and shall
                    include in such report the Administrator's
                    recommendations for a geographic cost adjustment index
                    for suppliers of durable medical equipment under the
                    medicare program and an analysis of the impact of such
                    proposed index on payments under the medicare program;
                    and
                        (B) the Comptroller General shall submit a report
                    to the Committees on Energy and Commerce and Ways and
                    Means of the House of Representatives and the Committee
                    on Finance of the Senate analyzing on a geographic
                    basis the supplier costs of durable medical equipment
                    under the medicare program.
        (d) Oxygen Retesting.--Section 1834(a)(5)(E) (42 U.S.C.
    1395m(a)(5)(E)) is amended by striking ``55'' and inserting ``56''.
        (e) Other Miscellaneous and Technical Amendments.--(1) Section
    4152(a)(3) of OBRA-1990 is amended by striking ``amendment made by
    subsection (a)'' and inserting ``amendments made by this subsection''.
        (2) Section 4152(c)(2) of OBRA-1990 is amended by striking
    ``1395m(a)(7)(A)'' and inserting ``1395m(a)(7)''.
        (3) Section 1834(a)(7)(A)(iii)(II) (42 U.S.C.
    1395m(a)(7)(A)(iii)(II)) is amended by striking ``clause (v)'' and
    inserting ``clause (vi)''.
        (4) Section 1834(a)(7)(C)(i) (42 U.S.C. 1395m(a)(7)(C)(i)) is
    amended by striking ``or paragraph (3)''.
        (5) Section 1834(a)(3) (42 U.S.C. 1395m(a)(3)) is amended by
    striking subparagraph (D).
        (6) Section 4153(c)(1) of OBRA-1990 is amended by striking
    ``1834(a)'' and inserting ``1834(h)''.
        (7) Section 4153(d)(2) of OBRA-1990 is amended by striking
    ``Reconiliation'' and inserting ``Reconciliation''.
        (8)(A) Section 1834(a) (42 U.S.C. 1395m(a)) is amended by striking
    paragraph (6).
        (B) Section 1834(a) (42 U.S.C. 1395m(a)) is amended--
                (i) in subparagraphs (A) and (B) of paragraph (1), by
            striking ``(2) through (7)'' each place it appears and
            inserting ``(2) through (5) and (7)'';
                (ii) in paragraph (7), by striking ``(2) through (6)'' and
            inserting ``(2) through (5)'';
                (iii) in paragraph (8), by striking ``paragraphs (6) and
            (7)'' each place it appears in the matter preceding
            subparagraph (A) and in subparagraph (C) and inserting
            ``paragraph (7)''; and
                (iv) in paragraph (8)(A)(i), by striking ``described--''
            and all that follows and inserting ``described in paragraph (7)
            equal to the average of the purchase prices on the claims
            submitted on an assignment-related basis for the unused item
            supplied during the 6-month period ending with December
            1986.''.
        (9) The amendments made by this subsection shall take effect as if
    included in the enactment of OBRA-1990.

                         Subchapter E--Other Provisions

    SEC. 13471. CLARIFYING PAYMENTS FOR MEDICALLY DIRECTED CERTIFIED
                  REGISTERED NURSE ANESTHETIST SERVICES.

        (a) In General.--Section 1833(l)(4)(B) (42 U.S.C. 1395l(l)(4)(B))
    is amended to read as follows:
        ``(B) Except as provided in subparagraph (D), the conversion factor
    used to determine the amount paid under the fee schedule under this
    subsection for services furnished by a certified registered nurse
    anesthetist who is medically directed--
                ``(i) in a year after 1993 and before 1997, shall be
            $10.75, or
                ``(ii) in a subsequent calendar year, shall be the previous
            year's conversion factor increased by the update determined
            under section 1848(d)(3) for physician anesthesia services for
            that year.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to services furnished on or after January 1, 1994.

    SEC. 13472. EXTENSION OF ALZHEIMER'S DISEASE DEMONSTRATION PROJECTS.

        Section 9342 of OBRA-1986, as amended by section 4164(a)(2) of
    OBRA-1990, is amended--
                (1) in subsection (c)(1), by striking ``4 years'' and
            inserting ``5 years''; and
                (2) in subsection (f), --
                        (A) by striking ``$55,000,000'' and inserting
                    ``$58,000,000'', and
                        (B) by striking ``$3,000,000'' and inserting
                    ``$5,000,000''.

    SEC. 13473. ORAL CANCER DRUGS.

        (a) New Coverage of Certain Self-Administered Anticancer Drugs.--
    Section 1861(s)(2) (42 U.S.C. 1395(s)(2)), as amended by section
    13478(f)(8)(B), is amended--
                (1) by striking ``and'' at the end of subparagraph (N);
                (2) by adding ``and'' at the end of subparagraph (O); and
                (3) by adding at the end the following new subparagraph:
                ``(P) an oral drug (which is approved by the Federal Food
            and Drug Administration) prescribed for use as an anticancer
            chemotherapeutic agent for a given indication, and containing
            an active ingredient (or ingredients), which is the same
            indication and active ingredient (or ingredients) as a drug
            which the carrier determines would be covered pursuant to
            subparagraph (A) or (B) if the drug could not be self-
            administered;''.
        (b) Uniform Coverage of ``Off-Label'' Anticancer Drugs.--Section
    1861(t) (42 U.S.C. 1395x(t)) is amended--
                (1) by inserting ``(1)'' after ``(t)'';
                (2) by striking ``(m)(5) of this section'' and inserting
            ``(m)(5) and paragraph (2)''; and
                (3) by adding at the end the following new paragraph:
        ``(2)(A) For purposes of paragraph (1), the term `drugs' also
    includes any drugs or biologicals used in an anticancer
    chemotherapeutic regimen for a medically accepted indication (as
    described in subparagraph (B)).
        ``(B) In subparagraph (A), the term `medically accepted
    indication', with respect to the use of a drug, includes any use which
    has been approved by the Food and Drug Administration for the drug, and
    includes another use of the drug if--
                ``(i) the drug has been approved by the Food and Drug
            Administration, and
                ``(ii) the carrier involved determines, based upon guidance
            provided by the Secretary to carriers for determining medically
            accepted uses of drugs, that the use is medically accepted
            taking into account the uses of such drug which are--
                        ``(I) included (or approved for inclusion) in one
                    or more of the following compendia: the American
                    Hospital Formulary Service-Drug Information, the
                    American Medical Association Drug Evaluations, and the
                    United States Pharmacopoeia-Drug Information; or
                        ``(II) supported by clinical evidence in peer
                    reviewed medical literature appearing in publications
                    which have been specifically approved for purposes of
                    this paragraph by the Secretary.''.
        (c) Study of Medicare Coverage of Patient Care Costs Associated
    With Clinical Trials of New Cancer Therapies.--
                (1) Study.--The Secretary of Health and Human Services
            shall conduct a study of the effects of expressly covering
            under the medicare program the patient care costs for
            beneficiaries enrolled in clinical trials of new cancer
            therapies, where the protocol for the trial has been approved
            by the National Cancer Institute or meets similar scientific
            and ethical standards, including approval by an institutional
            review board. The study shall include--
                        (A) an estimate of the cost of such coverage,
                    taking into account the extent to which medicare
                    currently pays for such patient care costs in practice;
                        (B) an assessment of the extent to which such
                    clinical trials represent the best available treatment
                    for the patients involved and of the effects of
                    participation in the trials on the health of such
                    patients;
                        (C) an assessment of whether progress in developing
                    new anticancer therapies would be assisted by medicare
                    coverage of such patient care costs; and
                        (D) an evaluation of whether there should be
                    special criteria for the admission of medicare
                    beneficiaries (on account of their age or physical
                    condition) to clinical trials for which medicare would
                    pay the patient care costs.
                (2) Report.--Not later than 2 years after the date of the
            enactment of this Act, the Secretary of Health and Human
            Services shall submit a report on the study conducted under
            paragraph (1) to the Committee on Ways and Means and the
            Committee on Energy and Commerce of the House of
            Representatives and the Committee on Finance of the Senate.
            Such report shall include recommendations as to the coverage
            under the medicare program of patient care costs of
            beneficiaries enrolled in clinical trials of new cancer
            therapies.
        (d) Effective Date.--The amendments made by subsections (a) and (b)
    shall apply to items furnished on or after January 1, 1994.

    SEC. 13474. PART B PREMIUM PAYMENTS FOR LATE ENROLLMENT.

        (a) Limitation on Medicare Part B Late Enrollment Penalty.--
                (1) In general.--Section 1839 (42 U.S.C. 1395r) is amended
            by adding at the end the following new subsection:
        ``(g) The percent increase in premiums under subsection (b) due to
    late enrollment under this part shall not exceed 25 percent in the case
    of an individual who is an annuitant described in subparagraph (A) or
    (B) of section 8901(3) of title 5, United States Code (including an
    individual or survivor described in section 8906(g)(2)(A) of such
    title) for a month if--
                ``(1) during the individual's initial enrollment period
            under section 1837(d)--
                        ``(A) the individual was enrolled in a group health
                    plan (as defined in section 1862(b)(1)(A)(v)) that
                    provided coverage of items and services for which
                    payment may be made under this part, and
                        ``(B) the individual elected not to enroll (or to
                    be deemed enrolled) under this section; and
                ``(2) due to a change of coverage under such plan, there is
            no coverage during the month under such plan with respect to
            items and services for which payment may be made under this
            part unless the individual is enrolled under this part.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to premiums for months beginning with January 1992.
        (b) Payment of Part B Premium Late Enrollment Penalties by
    States.--Section 1839 (42 U.S.C. 1395r), as amended by subsection (a),
    is further amended by adding at the end the following new subsection:
        ``(h)(1) Upon the request of a State, the Secretary may enter into
    an agreement with the State under which the State agrees to pay on a
    quarterly or other periodic basis to the Secretary (to be deposited in
    the Treasury to the credit of the Federal Supplementary Medical
    Insurance Trust Fund) an amount equal to the amount of the part B late
    enrollment premium increases with respect to the premiums for eligible
    individuals (as defined in paragraph (3)(A)).
        ``(2) No part B late enrollment premium increase shall apply to an
    eligible individual for premiums for months for which the amount of
    such an increase is payable under an agreement under paragraph (1).
        ``(3) In this subsection:
                ``(A) The term `eligible individual' means an individual
            who is enrolled under this part B and who is within a class of
            individuals specified in the agreement under paragraph (1).
                ``(B) The term `part B late enrollment premium increase'
            means any increase in a premium as a result of the application
            of subsection (b).''.

    SEC. 13475. COVERAGE OF SERVICES OF SPEECH-LANGUAGE PATHOLOGISTS AND
                  AUDIOLOGISTS.

        (a) Services Defined.--Section 1861 (42 U.S.C. 1395x), as amended
    by section 13478(f)(8)(E), is amended by inserting after subsection
    (kk) the following new subsection:

            ``Speech-Language Pathology Services; Audiology Services

        ``(ll)(1) The term `speech-language pathology services' means such
    speech, language, and related function assessment and rehabilitation
    services furnished by a qualified speech-language pathologist as the
    speech-language pathologist is legally authorized to perform under
    State law (or the State regulatory mechanism provided by State law) as
    would otherwise be covered if furnished by a physician.
        ``(2) The term `audiology services' means such hearing and balance
    assessment services furnished by a qualified audiologist as the
    audiologist is legally authorized to perform under State law (or the
    State regulatory mechanism provided by State law).
        ``(3) In this subsection:
                ``(A) The term `qualified speech-language pathologist'
            means an individual with a master's or doctoral degree in
            speech-language pathology who has performed not less than 9
            months of supervised full-time speech-language pathology
            services after obtaining such degree and who--
                        ``(i) is licensed (or is otherwise certified) as a
                    speech-language pathologist by the State in which the
                    individual furnishes such services, or
                        ``(ii) in the case of an individual who furnishes
                    services in a State which does not provide for the
                    licensing (or other form of certification) of speech-
                    language pathologists, has successfully completed a
                    national clinical competency examination in speech-
                    language pathology approved by the Secretary.
                ``(B) The term `qualified audiologist' means an individual
            with a master's or doctoral degree in audiology who has
            performed not less than 9 months of supervised full-time
            audiology services after obtaining such degree and who--
                        ``(i) is licensed (or is otherwise certified) as an
                    audiologist by the State in which the individual
                    furnishes such services, or
                        ``(ii) in the case of an individual who furnishes
                    services in a State which does not provide for the
                    licensing (or other form of certification) of
                    audiologists, has successfully completed a national
                    clinical competency examination in audiology approved
                    by the Secretary.''.
        (b) Conforming Amendments Relating to Medicare Treatment of Speech
    and Language Services.--
                (1) Extended care services.--Section 1861(h)(3) (42 U.S.C.
            1395x(h)(3)) is amended by striking ``, occupational, or speech
            therapy'' and inserting ``or occupational therapy or speech-
            language pathology services''.
                (2) Home health services.--Section 1861(m)(2) (42 U.S.C.
            1395x(m)(2)) is amended by striking ``, occupational, or speech
            therapy'' and inserting ``or occupational therapy or speech-
            language pathology services''.
                (3) Outpatient physical therapy services.--The fourth
            sentence of section 1861(p) (42 U.S.C. 1395x(p)) is amended by
            striking ``speech pathology services'' and inserting ``speech-
            language pathology services''.
                (4) Comprehensive outpatient rehabilitation facility
            services.--Section 1861(cc)(1)(B) (42 U.S.C. 1395x(cc)(1)(B))
            is amended by striking ``speech pathology services'' and
            inserting ``speech-language pathology services''.
                (5) Hospice care.--Section 1861(dd)(1)(B) (42 U.S.C.
            1395x(dd)(1)(B)) is amended by striking ``therapy or speech-
            language pathology'' and inserting ``therapy, or speech-
            language pathology services''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on January 1, 1994.

    SEC. 13476. EXTENSION OF MUNICIPAL HEALTH SERVICE DEMONSTRATION
                  PROJECTS.

        Section 9215 of the Consolidated Omnibus Budget Reconciliation Act
    of 1985, as amended by section 6135 of OBRA-1989, is amended--
                (1) by striking ``December 31, 1993'' and inserting
            ``December 31, 1997'', and
                (2) in the second sentence, by inserting after
            ``beneficiary costs,'' the following: ``costs to the medicaid
            program and other payers, access to care, outcomes, beneficiary
            satisfaction, utilization differences among the different
            populations served by the projects,''.

    SEC. 13477. TREATMENT OF CERTAIN INDIAN HEALTH PROGRAMS AND FACILITIES
                  AS FEDERALLY-QUALIFIED HEALTH CENTERS.

        (a) In General.--Section 1861(aa)(4) (42 U.S.C. 1395x(aa)(4)) is
    amended--
                (1) by striking ``or'' at the end of subparagraph (B);
                (2) by striking the period at the end of subparagraph (C)
            and inserting ``; or''; and
                (3) by adding at the end the following new subparagraph:
                ``(D) is an outpatient health program or facility operated
            by a tribe or tribal organization under the Indian Self-
            Determination Act or by an urban Indian organization receiving
            funds under title V of the Indian Health Care Improvement
            Act.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to services furnished on or after January 1, 1994.

    SEC. 13478. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

        (a) Revision of Information on Part B Claims Forms.--Section
    1833(q)(1) (42 U.S.C. 1395l(q)(1)) is amended--
                (1) by striking ``provider number'' and inserting ``unique
            physician identification number''; and
                (2) by striking ``and indicate whether or not the referring
            physician is an interested investor (within the meaning of
            section 1877(h)(5))''.
        (b) Consultation for Social Workers.--Effective with respect to
    services furnished on or after January 1, 1991, section 6113(c) of
    OBRA-1989 is amended--
                (1) by inserting ``and clinical social worker services''
            after ``psychologist services''; and
                (2) by striking ``psychologist'' the second and third place
            it appears and inserting ``psychologist or clinical social
            worker''.
        (c) Reports on Hospital Outpatient Payment.--(1) OBRA-1989 is
    amended by striking section 6137.
        (2) Section 1135(d) (42 U.S.C. 1320b-5(d)) is amended--
                (A) by striking paragraph (6); and
                (B) in paragraph (7)--
                        (i) by striking ``systems'' each place it appears
                    and inserting ``system''; and
                        (ii) by striking ``paragraphs (1) and (6)'' and
                    inserting ``paragraph (1)''.
        (d) Radiology and Diagnostic Services Provided in Hospital
    Outpatient Departments.--(1) Effective as if included in the enactment
    of OBRA-1989, section 1833(n)(1)(B)(i)(II) (42 U.S.C.
    1395l(n)(1)(B)(i)(II)) is amended--
                (A) by inserting ``and for services described in subsection
            (a)(2)(E)(ii) furnished on or after January 1, 1992'' after
            ``1989''; and
                (B) by striking ``1842(b)'' and inserting ``1842(b) (or, in
            the case of services furnished on or after January 1, 1992,
            under section 1848)''.
        (2) Effective as if included in the enactment of OBRA-1989, section
    1833(n)(1)(B)(i)(II) (42 U.S.C. 1395l(n)(1)(B)(i)(II)) is amended by
    striking ``January 1, 1989'' and inserting ``April 1, 1989''.
        (e) Payments to Nurse Practitioners in Rural Areas (Section 4155 of
    OBRA-1990).--(1) Section 1861(s)(2)(K)(iii) (42 U.S.C.
    1395x(s)(2)(K)(iii)) is amended--
                (A) by striking ``subsection (aa)(3)'' and inserting
            ``subsection (aa)(5)''; and
                (B) by striking ``subsection (aa)(4)'' and inserting
            ``subsection (aa)(6)''.
        (2) Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)) is amended--
                (A) by striking ``and'' before ``(N)''; and
                (B) with respect to the matter inserted by section
            4155(b)(2)(B) of OBRA-1990--
                        (i) by striking ``(M)'' and inserting ``, and
                    (O)'', and
                        (ii) by transferring and inserting it (as amended)
                    immediately before the semicolon at the end.
        (3) Section 1833(r)(1) (42 U.S.C. 1395l(r)(1)) is amended--
                (A) by striking ``ambulatory'' each place it appears and
            inserting ``or ambulatory''; and
                (B) by striking ``center,'' and inserting ``center''.
        (4) Section 1833(r)(2)(A) (42 U.S.C. 1395l(r)(2)(A)) is amended by
    striking ``subsection (a)(1)(M)'' and inserting ``subsection
    (a)(1)(O)''.
        (5) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is amended by
    striking ``subsection (s)(2)(K)(i)'' and inserting ``clauses (i) or
    (iii) of subsection (s)(2)(K)''.
        (6) Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is amended by
    striking ``this Act'' and inserting ``this title''.
        (7) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is amended by
    striking ``1861(s)(2)(K)(i)'' and inserting ``1861(s)(2)(K)(i) or
    1861(s)(2)(K)(iii)''.
        (8) Section 1866(a)(1)(H) (42 U.S.C. 1395cc(a)(1)(H)) is amended by
    striking ``1861(s)(2)(K)(i)'' and inserting ``1861(s)(2)(K)(i) or
    1861(s)(2)(K)(iii)''.
        (f) Other Miscellaneous and Technical Amendments.--
                (1) Immediate enrollment in part b by individuals covered
            by an employment-based plan.--(A) Subparagraphs (A) and (B) of
            section 1837(i)(3) (42 U.S.C. 1395p(i)(3)) are each amended--
                        (i) by striking ``beginning with the first day of
                    the first month in which the individual is no longer
                    enrolled'' and inserting ``including each month during
                    any part of which the individual is enrolled''; and
                        (ii) by striking ``and ending seven months later''
                    and inserting ``ending with the last day of the eighth
                    consecutive month in which the individual is at no time
                    so enrolled''.
                (B) Paragraphs (1) and (2) of section 1838(e) (42 U.S.C.
            1395q(e)) are amended to read as follows:
                ``(1) in any month of the special enrollment period in
            which the individual is at any time enrolled in a plan
            (specified in subparagraph (A) or (B), as applicable, of
            section 1837(i)(3)) or in the first month following such a
            month, the coverage period shall begin on the first day of the
            month in which the individual so enrolls (or, at the option of
            the individual, on the first day of any of the following three
            months), or
                ``(2) in any other month of the special enrollment period,
            the coverage period shall begin on the first day of the month
            following the month in which the individual so enrolls.''.
                (C) The amendments made by subparagraphs (A) and (B) shall
            take effect on the first day of the first month that begins
            after the expiration of the 120-day period that begins on the
            date of the enactment of this Act.
                (2) Blend amounts for ambulatory surgical center
            payments.--Subclauses (I) and (II) of section 1833(i)(3)(B)(ii)
            (42 U.S.C. 1395l(i)(3)(B)(ii)) are each amended--
                        (A) by striking ``for reporting'' and inserting
                    ``for portions of cost reporting''; and
                        (B) by striking ``and on or before'' and inserting
                    ``and ending on or before''.
                (3) Clinical diagnostic laboratory tests (section 4154 of
            obra-1990).--Section 4154(e)(5) of OBRA-1990 is amended by
            striking ``(1)(A)'' and inserting ``(1)(A),''.
                (4) Separate payment under part b for certain services
            (section 4157 of obra-1990).--Section 4157(a) of OBRA-1990 is
            amended by striking ``(a) Services of'' and all that follows
            through ``Section'' and inserting ``(a) Treatment of Services
            of Certain Health Practitioners.--Section''.
                (5) Certified registered nurse anesthetists (section 4160
            of obra-1990).--Section 1833(l)(4)(B)(ii)(VII) (42 U.S.C.
            1395l(l)(4)(B)(ii)(VII)) is amended by striking ``1997'' and
            inserting ``1996''.
                (6) Community health centers and rural health clinics
            (section 4161 of obra-1990).--(A) The fourth sentence of
            section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended--
                        (i) by striking ``certification'' the first place
                    it appears and inserting ``approval''; and
                        (ii) by striking ``the Secretary's approval or
                    disapproval of the certification'' and inserting
                    ``Secretary's approval or disapproval''.
                (B) Section 4161(a)(7)(B) of OBRA-1990 is amended by
            inserting ``and to the Committee on Finance of the Senate''
            after ``Representatives''.
                (7) Screening mammography (section 4163 of obra-1990).--
            Section 4163 of OBRA-1990 is amended--
                        (A) by adding at the end of subsection (d) the
                    following new paragraph:
                ``(3) The amendment made by paragraph (2)(A)(iv) shall
            apply to screening pap smears performed on or after July 1,
            1990.''; and
                        (B) in subsection (e), by striking ``The
                    amendments'' and inserting ``Except as provided in
                    subsection (d)(3), the amendments''.
                (8) Injectable drugs for treatment of osteoporosis.--
                        (A) Clarification of drugs covered.--The section
                    1861(jj) (42 U.S.C. 1395x(jj)) inserted by section
                    4156(a)(2) of OBRA-1990 is amended--
                                (i) in the matter preceding paragraph (1),
                            by striking ``a bone fracture related to''; and
                                (ii) in paragraph (1), by striking
                            ``patient'' and inserting ``individual has
                            suffered a bone fracture related to post-
                            menopausal osteoporosis and that the
                            individual''.
                        (B) Limiting coverage to drugs provided by home
                    health agencies.--(i) The section 1861(jj) (42 U.S.C.
                    1395x(jj)) inserted by section 4156(a)(2) of OBRA-1990
                    is amended by striking ``if'' and inserting ``by a home
                    health agency if''.
                        (ii) Section 1861(m)(5) (42 U.S.C. 1395x(m)(5)) is
                    amended by striking ``but excluding'' and inserting
                    ``and a covered osteoporosis drug (as defined in
                    subsection (kk), but excluding other''.
                        (iii) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is
                    amended--
                                (I) by adding ``and'' at the end of
                            subparagraph (N), and
                                (II) by striking subparagraph (O) and
                            redesignating subparagraph (P) as subparagraph
                            (O).
                        (C) Payment based on reasonable cost.--Section
                    1833(a)(2) (42 U.S.C. 1395l(a)(2)) is amended--
                                (i) in subparagraph (A), by striking
                            ``health services'' and inserting ``health
                            services (other than covered osteoporosis drug
                            (as defined in section 1861(kk)))'';
                                (ii) by striking ``and'' at the end of
                            subparagraph (D);
                                (iii) by striking the semicolon at the end
                            and inserting ``; and''; and
                                (iv) by adding at the end the following new
                            subparagraph:
                        ``(F) with respect to covered osteoporosis drug (as
                    defined in section 1861(kk)) furnished by a home health
                    agency, 80 percent of the reasonable cost of such
                    service, as determined under section 1861(v);''.
                        (D) Application of part b deductible.--Section
                    1833(b)(2) (42 U.S.C. 1395l(b)(2)) is amended by
                    striking ``services'' and inserting ``services (other
                    than covered osteoporosis drug (as defined in section
                    1861(kk)))''.
                        (E) Covered osteoporosis drug (section 4156 of
                    obra-1990).--Section 1861 (42 U.S.C. 1395x) is amended,
                    in the subsection (jj) inserted by section 4156(a)(2)
                    of OBRA-1990, by striking ``(jj) The term'' and
                    inserting ``(kk) The term''.
                (9) Other miscellaneous and technical corrections (section
            4164 of obra-1990).--
                        (A) Ownership disclosure requirements.--(i) Section
                    1124A(a)(2)(A) (42 U.S.C. 1320a-3a(a)(2)(A)) is amended
                    by striking ``of the Social Security Act''.
                        (ii) Section 4164(b)(4) of OBRA-1990 is amended by
                    striking ``paragraph'' and inserting ``paragraphs''.
                        (B) Directory of unique physician identifier
                    numbers.--Section 4164(c) of OBRA-1990 is amended by
                    striking ``publish'' and inserting ``publish, and shall
                    periodically update,''.
        (g) Effective Date.--Except as otherwise provided in this section,
    the amendments made by this section shall take effect as if included in
    the enactment of OBRA-1990.

                          Subchapter F--Part B Premium

    SEC. 13481. PART B PREMIUM.

        Section 1839(e) (42 U.S.C. 1395r(e)) is amended--
                (1) in paragraph (1)(A), by inserting ``and for each month
            in 1996 and 1997'' after ``January 1991'', and
                (2) in paragraph (2), by striking ``1991'' and inserting
            ``1998''.

                CHAPTER 3--PROVISIONS RELATING TO PARTS A AND B

                      Subchapter A--Elimination of Updates

    SEC. 13501. ELIMINATION OF COST-OF-LIVING UPDATE IN PER RESIDENT
                  AMOUNTS FOR DIRECT MEDICAL EDUCATION.

        Section 1886(h)(2)(D) (42 U.S.C. 1395ww(h)(2)(D)) is amended by
    inserting ``(other than in the case of cost reporting periods beginning
    during fiscal year 1994 or fiscal year 1995)'' after ``updated''.

    SEC. 13502. ELIMINATION OF INFLATION UPDATE IN COST LIMITS FOR HOME
                  HEALTH SERVICES.

        The Secretary of Health and Human Services shall not provide for
    any increase, on the basis of inflation or changes in the cost of goods
    and services, in the per visit cost limits for home health services
    under section 1861(v)(1)(L) of the Social Security Act for cost
    reporting periods beginning during fiscal year 1994 or fiscal year
    1995.

               Subchapter B--Medicare Secondary Payer Provisions

    SEC. 13511. EXTENSION OF TRANSFER OF DATA.

        (a) Extension of Data Match Program.--
                (1) Section 1862(b)(5)(C)(iii) of the Social Security Act
            (42 U.S.C. 1395y(b)(5)(C)(iii)) is amended by striking ``1995''
            and inserting ``1998''.
                (2) Section 6103(l)(12)(F) of the Internal Revenue Code of
            1986 is amended--
                        (A) in clause (i), by striking ``1995'' and
                    inserting ``1998'',
                        (B) in clause (ii)(I), by striking ``1994'' and
                    inserting ``1997'', and
                        (C) in clause (ii)(II), by striking ``1995'' and
                    inserting ``1998''.
        (b) Secondary Payer Exemption for Members of Religious Orders.--
    Effective as if included in the enactment of OBRA-1989, section
    6202(e)(2) of such Act is amended by adding at the end the following:
    ``Such amendment also shall apply to items and services furnished
    before such date with respect to secondary payer cases which the
    Secretary of Health and Human Services had not identified as of such
    date.''.
        (c) Permitting the Use of Minimum Income Thresholds.--
                (1) Section 6103(l)(12)(B)(i) of the Internal Revenue Code
            of 1986 is amended by inserting ``, above an amount (if any)
            specified by the Secretary of Health and Human Services,''
            after ``section 3401(a))''.
                (2) The matter in section 6103(l)(12)(B)(ii) of such Code
            preceding subclause (I) is amended by inserting ``, above an
            amount (if any) specified by the Secretary of Health and Human
            Services,'' after ``wages''.
                (3) The heading to section 6103(l)(12) of such Code is
            amended by striking ``taxpayer identity'' and inserting
            ``return''.

    SEC. 13512. 3-YEAR EXTENSION OF MEDICARE SECONDARY PAYER TO DISABLED
                  BENEFICIARIES.

        Section 1862(b)(1)(B)(iii) (42 U.S.C. 1395y(b)(1)(B)(iii)) is
    amended by striking ``1995'' and inserting ``1998''.

    SEC. 13513. 3-YEAR EXTENSION OF 18-MONTH RULE FOR ESRD BENEFICIARIES.

        Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended by
    striking ``1996'' and inserting ``1999''.

    SEC. 13514. MEDICARE SECONDARY PAYER REFORMS.

        (a) Improving Identification of Medicare Secondary Payer
    Situations.--
                (1) Survey of beneficiaries.--
                        (A) In general.--Section 1862(b)(5) (42 U.S.C.
                    1395y(b)(5)) is amended by adding at the end the
                    following new subparagraph:
                        ``(D) Obtaining information from beneficiaries.--
                    Before an individual applies for benefits under part A
                    or enrolls under part B, the Administrator shall mail
                    the individual a questionnaire to obtain information on
                    whether the individual is covered under a primary plan
                    and the nature of the coverage provided under the plan,
                    including the name, address, and identifying number of
                    the plan.''.
                        (B) Distribution of questionnaire by contractor.--
                    The Secretary of Health and Human Services shall enter
                    into an agreement with an entity not later than
                    November 1, 1993, to distribute the questionnaire
                    described in section 1862(b)(5)(D) of the Social
                    Security Act (as added by subparagraph (A)).
                        (C) No medicare secondary payer denial based on
                    failure to complete questionnaire.--Section 1862(b)(2)
                    (42 U.S.C. 1395y(b)(2)) is amended by adding at the end
                    the following new subparagraph:
                        ``(C) Treatment of questionnaires.--The Secretary
                    may not fail to make payment under subparagraph (A)
                    solely on the ground that an individual failed to
                    complete a questionnaire concerning the existence of a
                    primary plan.''.
                (2) Mandatory screening by providers and suppliers under
            part b.--
                        (A) In general.--Section 1862(b) (42 U.S.C.
                    1395y(b)) is amended by adding at the end the following
                    new paragraph:
                ``(6) Screening requirements for providers and suppliers.--
                        ``(A) In general.--Notwithstanding any other
                    provision of this title, no payment may be made for any
                    item or service furnished under part B unless the
                    entity furnishing such item or service completes (to
                    the best of its knowledge and on the basis of
                    information obtained from the individual to whom the
                    item or service is furnished) the portion of the claim
                    form relating to the availability of other health
                    benefit plans.
                        ``(B) Penalties.--An entity that knowingly,
                    willfully, and repeatedly fails to complete a claim
                    form in accordance with subparagraph (A) or provides
                    inaccurate information relating to the availability of
                    other health benefit plans on a claim form under such
                    subparagraph shall be subject to a civil money penalty
                    of not to exceed $2,000 for each such incident. The
                    provisions of section 1128A (other than subsections (a)
                    and (b)) shall apply to a civil money penalty under the
                    previous sentence in the same manner as such provisions
                    apply to a penalty or proceeding under section
                    1128A(a).''.
                        (B)  Effective date.--The amendment made by
                    subparagraph (A) shall apply with respect to items and
                    services furnished on or after January 1, 1994.
        (b) Improvements in Recovery of Payments From Primary Payers.--
                (1) Submission of reports on efforts to recover erroneous
            payments.--
                        (A) Fiscal intermediaries under part a.--Section
                    1816 (42 U.S.C. 1396h) is amended by adding at the end
                    the following new subsection:
        ``(k) An agreement with an agency or organization under this
    section shall require that such agency or organization submit an annual
    report to the Secretary describing the steps taken to recover payments
    made for items or services for which payment has been or could be made
    under a primary plan (as defined in section 1862(b)(2)(A)).''.
                        (B) Carriers under part b.--Section 1842(b)(3) (42
                    U.S.C. 1395u(b)(3)) is amended--
                                (i) by striking ``and'' at the end of
                            subparagraph (H); and
                                (ii) by inserting after subparagraph (H)
                            the following new subparagraph:
                ``(I) will submit annual reports to the Secretary
            describing the steps taken to recover payments made under this
            part for items or services for which payment has been or could
            be made under a primary plan (as defined in section
            1862(b)(2)(A)).''.
                (2) Requirements under carrier performance evaluation
            program.--
                        (A) Fiscal intermediaries under part a.--Section
                    1816(f)(1)(A) (42 U.S.C. 1396h(f)(1)(A)) is amended by
                    striking ``processing'' and inserting ``processing
                    (including the agency's or organization's success in
                    recovering payments made under this title for services
                    for which payment has been or could be made under a
                    primary plan (as defined in section 1862(b)(2)(A)))''.
                        (B) Carriers under part b.--Section 1842(b)(2) (42
                    U.S.C. 1395u(b)(2)) is amended by adding at the end the
                    following new subparagraph:
        ``(D) In addition to any other standards and criteria established
    by the Secretary for evaluating carrier performance under this
    paragraph relating to avoiding erroneous payments, the Secretary shall
    establish standards and criteria relating to the carrier's success in
    recovering payments made under this part for items or services for
    which payment has been or could be made under a primary plan (as
    defined in section 1862(b)(2)(A)).''.
                (3) Deadline for reimbursement by primary plans.--
                        (A) In general.--Section 1862(b)(2)(B)(i) (42
                    U.S.C. 1395y(b)(2)(B)(i)) is amended by adding at the
                    end the following sentence: ``If reimbursement is not
                    made to the appropriate Trust Fund before the
                    expiration of the 60-day period that begins on the date
                    such notice or other information is received, the
                    Secretary may charge interest (beginning with the date
                    on which the notice or other information is received)
                    on the amount of the reimbursement until reimbursement
                    is made (at a rate determined by the Secretary in
                    accordance with regulations of the Secretary of the
                    Treasury applicable to charges for late payments).''.
                        (B) Conforming amendment.--The heading of clause
                    (i) of section 1862(b)(2)(B) is amended to read as
                    follows: ``Repayment required.--''.
                        (C) Effective date.--The amendments made by this
                    paragraph shall apply to payments for items and
                    services furnished on or after the date of the
                    enactment of this Act.
                (4) Effective date.--The amendments made by paragraphs (1)
            and (2) shall apply to contracts with fiscal intermediaries and
            carriers under title XVIII of the Social Security Act for years
            beginning with 1994.
        (c) Application of Aggregation Rules.--
                (1) Working aged.--Section 1862(b)(1)(A) (42 U.S.C.
            1395y(b)(1)(A)) is amended by adding at the end the following
            new clause:
                                ``(vi) Application of aggregation rules.--
                            All employers treated as a single employer
                            under subsection (a) or (b) of section 52 of
                            the Internal Revenue Code of 1986 shall be
                            treated as a single employer for purposes of
                            this subparagraph.''.
                (2) Disabled individuals.--Section 5000(b)(2) of the
            Internal Revenue Code of 1986 (relating to large group health
            plans) is amended by adding at the end the following: ``All
            employers treated as a single employer under subsection (a) or
            (b) of section 52 shall be treated as a single employer for
            purposes of this paragraph.''.
                (3) Effective date.--The amendments made by this subsection
            shall take effect 90 days after the date of the enactment of
            this Act.
        (d) Application of Excise Tax to Failure to Reimburse Federal
    Government.--
                (1) In general.--Section 5000(c) of the Internal Revenue
            Code of 1986 (relating to nonconforming group health plans) is
            amended by striking ``of section 1862(b)(1)'' and inserting
            ``of paragraph (1), or with the requirements of paragraph (2),
            of section 1862(b)''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to demands for repayment issued after the date of
            the enactment of this Act.
        (e) Miscellaneous and Technical Corrections.--
                (1) The sentence in section 1862(b)(1)(C) added by section
            4203(c)(1)(B) of OBRA-1990 is amended--
                        (A) by striking ``on or before'' and inserting
                    ``before'', and
                        (B) by striking ``clauses (i) and (ii)'' and
                    inserting ``this subparagraph''.
                (2) Effective as if included in the enactment of OBRA-1989,
            section 1862(b)(1) is amended--
                        (A) in subparagraphs (A)(v) and (B)(iv)(II), by
                    inserting ``, without regard to section 5000(d) of such
                    Code'' before the period at the end of each
                    subparagraph;
                        (B) in subparagraph (A)(iii), by striking ``current
                    calendar year or the preceding calendar year'' and
                    inserting ``current calendar year and the preceding
                    calendar year''; and
                        (C) in the matter in subparagraph (C) after clause
                    (ii), by striking ``taking into account that'' and
                    inserting ``paying benefits secondary to this title
                    when''.
                (3) Effective as if included in the enactment of OBRA-1989,
            section 1862(b)(5)(C)(i) (42 U.S.C. 1395y(b)(5)(C)(i)) is
            amended by striking ``6103(l)(12)(D)(iii)'' and inserting
            ``6103(l)(12)(E)(iii)''.
                (4) Section 4203(c)(2) of OBRA-1990 is amended--
                        (A) by striking ``the application of clause (iii)''
                    and inserting ``the second sentence'';
                        (B) by striking ``on individuals'' and all that
                    follows through ``section 226A of such Act'';
                        (C) in clause (ii), by striking ``clause'' and
                    inserting ``sentence'';
                        (D) in clause (v), by adding ``and'' at the end;
                    and
                        (E) in clause (vi)--
                                (i) by inserting ``of such Act'' after
                            ``1862(b)(1)(C)'', and
                                (ii) by striking the period at the end and
                            inserting the following: ``, without regard to
                            the number of employees covered by such
                            plans.''.
                (5) Section 4203(d) of OBRA-1990 is amended by striking
            ``this subsection'' and inserting ``this section''.
                (6) Except as provided in paragraphs (2) and (3), the
            amendments made by this subsection shall be effective as if
            included in the enactment of OBRA-1990.

                 Subchapter C--Physician Ownership and Referral

    SEC. 13521. APPLICATION OF MEDICARE BAN ON SELF-REFERRALS TO ALL
                  PAYERS.

        (a) In General.--Section 1877 (42 U.S.C. 1395nn) is amended--
                (1) in subsection (a)--
                        (A) in paragraph (1)(A), by striking ``for which
                    payment otherwise may be made under this title'' and
                    inserting ``for which a charge is imposed'', and
                        (B) in paragraph (1)(B), by striking ``under this
                    title'';
                (2) by amending paragraph (1) of subsection (g) to read as
            follows:
                ``(1) Denial of payment.--No payment may be made under this
            title, under another Federal health care program, or under a
            State health care program (as defined in section 1128(h)) for a
            designated health service for which a claim is presented in
            violation of subsection (a)(1)(B). No individual, third party
            payer, or other entity is liable for payment for designated
            health services for which a claim is presented in violation of
            such subsection.''; and
                (3) in subsection (g)(3), by striking ``for which payment
            may not be made under paragraph (1)'' and inserting ``for which
            such a claim may not be presented under subsection (a)(1)''.
        (b) Conforming Amendment to Reporting Requirement.--Section 1877(f)
    (42 U.S.C. 1395nn(f)) is amended--
                (1) by striking ``for which payment may be made under this
            title'' each place it appears and inserting ``for which a
            charge is imposed'', and
                (2) by striking the third sentence.

    SEC. 13522. EXTENSION OF SELF-REFERRAL BAN TO ADDITIONAL SPECIFIED
                  SERVICES.

        Section 1877 (42 U.S.C. 1395nn) is amended--
                (1) by striking ``clinical laboratory service'', ``clinical
            laboratory services'', and ``clinical laboratory services'' and
            inserting ``designated health service'', ``designated health
            services'', and ``designated health services'', respectively,
            each place each appears in subsections (a)(1), (b)(2)(A)(ii),
            (b)(4), (d)(1), (d)(2), (d)(3), (f), (g)(1), and (h)(7)(B); and
                (2) by adding at the end the following new subsection:
        ``(i) Designated Health Services Defined.--In this section, the
    term `designated health services' means any of the following items or
    services:
                ``(1) clinical laboratory services;
                ``(2) physical and occupational therapy services;
                ``(3) radiology services, including magnetic resonance
            imaging, computerized axial tomography scans, and ultrasound
            services;
                ``(4) radiation therapy services;
                ``(5) durable medical equipment;
                ``(6) parenteral and enteral nutrition equipment and
            supplies;
                ``(7) prosthetic devices and orthotics and prosthetics;
                ``(8) outpatient prescription drugs;
                ``(9) home infusion therapy services, home dialysis, and
            home health services;
                ``(10) ambulance services;
                ``(11) inpatient and outpatient hospital services;
                ``(12) comprehensive outpatient rehabilitation facility
            services;
                ``(13) contact lenses and eyeglasses; and
                ``(14) hearing aids.''.

    SEC. 13523. EXCEPTIONS FOR BOTH OWNERSHIP AND COMPENSATION
                  ARRANGEMENTS.

        (a) Modification to Exception for In-Office Ancillary Services.--
    Section 1877(b)(2) (42 U.S.C. 1395nn(b)(2)) is amended--
                (1) by inserting ``(other than durable medical equipment,
            parenteral and enteral nutrition equipment and supplies, and
            ambulance services)'' after ``services'' the first place it
            appears, and
                (2) in subparagraph (A)(ii)(II), by striking ``centralized
            provision'' and inserting ``provision of some or all''.
        (b) Modification of Rural Provider Exception.--
                (1) In general.--Section 1877(b) (42 U.S.C. 1395nn(b)) is
            amended--
                        (A) by redesignating paragraph (5) as paragraph
                    (6), and
                        (B) by inserting after paragraph (4) the following
                    new paragraph:
                ``(5) Rural providers.--In the case of designated health
            services if--
                        ``(A) the entity furnishing the services is in a
                    rural area (as defined in section 1886(d)(2)(D)), and
                        ``(B) substantially all of the services (as defined
                    by the Secretary) furnished by the entity are furnished
                    to individuals who reside in such a rural area.''.
                (2) Conforming amendments.--Section 1877(d) (42 U.S.C.
            1395nn(d)) is amended--
                        (A) by striking paragraph (2), and
                        (B) by redesignating paragraph (3) as paragraph
                    (2).

    SEC. 13524. EXCEPTIONS RELATED ONLY TO OWNERSHIP OR INVESTMENT.

        (a) Publicly-Traded Securities.--Section 1877(c)(2) (42 U.S.C.
    1395nn(c)(2)) is amended by striking ``total assets'' and inserting
    ``stockholder equity''.
        (b) Rural Providers.--For amendment to exception relation to rural
    providers, see section 13523(b).

    SEC. 13525. EXCEPTIONS RELATED ONLY TO COMPENSATION ARRANGEMENTS.

        (a) Rental of Office Space and Equipment.--
                (1) In general.--Paragraph (1) of section 1877(e) (42
            U.S.C. 1395nn(e)) is amended to read as follows:
                ``(1) Rental of office space; rental of equipment.--
                        ``(A) Office space.--Payments made by a lessee to a
                    lessor for the use of premises if--
                                ``(i) the lease is set out in writing,
                            signed by the parties, and specifies the
                            premises covered by the lease,
                                ``(ii) the aggregate space rented or leased
                            does not exceed that which is reasonable and
                            necessary for the legitimate business purposes
                            of the lease or rental and is used exclusively
                            by the lessee when being used by the lessee,
                                ``(iii) the lease provides for a term of
                            rental or lease for at least one year,
                                ``(iv) the aggregate rental charges over
                            the term of the lease are set in advance, are
                            consistent with fair market value, and are not
                            determined in a manner that takes into account
                            the volume or value of any referrals or other
                            business generated between the parties,
                                ``(v) the lease would be commercially
                            reasonable even if no referrals were made
                            between the parties,
                                ``(vi) the lease covers all of the premises
                            leased between the parties for the period of
                            the lease, and
                                ``(vii) the compensation arrangement meets
                            such other requirements as the Secretary may
                            impose by regulation as needed to protect
                            against program or patient abuse.
                        ``(B) Equipment.--Payments made by a lessee of
                    equipment to the lessor of the equipment for the use of
                    the equipment if--
                                ``(i) the lease is set out in writing,
                            signed by the parties, and specifies the
                            equipment covered by the lease,
                                ``(ii) the equipment rented or leased does
                            not exceed that which is reasonable and
                            necessary for the legitimate business purposes
                            of the lease or rental and is used exclusively
                            by the lessee when being used by the lessee,
                                ``(iii) the lease provides for a term of
                            rental or lease of at least one year,
                                ``(iv) the aggregate rental charges over
                            the term of the lease are set in advance, are
                            consistent with fair market value, and are not
                            determined in a manner that takes into account
                            the volume or value of any referrals or other
                            business generated between the parties,
                                ``(v) the lease would be commercially
                            reasonable even if no referrals were made
                            between the parties,
                                ``(vi) the lease covers all of the
                            equipment leased between the parties for the
                            period of the lease, and
                                ``(vii) the compensation arrangement meets
                            such other requirements as the Secretary may
                            impose by regulation as needed to protect
                            against program or patient abuse.''.
                (2) Conforming amendment.--Section 1877(h) (42 U.S.C.
            1395nn(h)) is amended by striking paragraphs (5) and (6).
        (b) Bona Fide Employment Relationships.--Section 1877(e) (42 U.S.C.
    1395nn(e)) is amended--
                (1) in paragraph (2)--
                        (A) by striking ``Employment'' and all that follows
                    through ``if'' and inserting ``Bona fide employment
                    relationships.--Any amount paid by an employer to a
                    physician (or immediate family member) who has a bona
                    fide employment relationship with the employer for the
                    provision of services if'';
                        (B) in subparagraphs (A), (B), and (D), by striking
                    ``arrangement'' and inserting ``employment'';
                        (C) in subparagraph (C), by striking ``to the
                    hospital''; and
                        (D) by adding at the end the following:
            ``Subparagraph (B)(ii) shall not be construed as prohibiting
            the payment of remuneration in the form of shares of overall
            profits or in the form of a productivity bonus based on
            services performed personally by the physician or family
            member, if the amount of the remuneration is not determined in
            a manner that takes into account directly the volume or value
            of any referrals by the referring physician.''; and
                (2) in paragraph (5)(A), by striking ``in the same manner
            as they apply to a hospital''.
        (c) Personal Service Arrangements.--
                (1) In general.--Paragraph (3) of section 1877(e) (42
            U.S.C. 1395nn(e)) is amended to read as follows:
                ``(3) Personal service arrangements.--Remuneration from an
            entity under an arrangement if--
                        ``(A) the arrangement is set out in writing, signed
                    by the parties, and specifies the services covered by
                    the arrangement,
                        ``(B) the arrangement covers all of the services to
                    be provided by the physician (or family member) to the
                    entity,
                        ``(C) the aggregate services contracted for do not
                    exceed those that are reasonable and necessary for the
                    legitimate business purposes of the arrangement,
                        ``(D) the term of the arrangement is for at least
                    one year,
                        ``(E) the compensation to be paid over the term of
                    the arrangement is set in advance, does not exceed fair
                    market value, and is not determined in a manner that
                    takes into account directly or indirectly the volume or
                    value of any referrals or other business generated
                    between the parties,
                        ``(F) the services to be performed under the
                    arrangement do not involve the counseling or promotion
                    of a business arrangement or other activity that
                    violates any State or Federal law, and
                        ``(G) the arrangement meets such other requirements
                    as the Secretary may impose by regulation as needed to
                    protect against program or patient abuse.''.
                (2) Health services furnished under certain hospital
            arrangements.--Section 1877(e) (42 U.S.C. 1395nn(e)) is amended
            by adding at the end the following new paragraph:
                ``(7) Certain group practice arrangements with a
            hospital.--
                        ``(A) In general.--An arrangement between a
                    hospital and a group for the provision of designated
                    health services by the group but billed in the name of
                    the hospital if--
                                ``(i) the group would be a group practice,
                            but for the fact that it bills for such
                            services in the name of the hospital;
                        ``(ii) with respect to services provided to an
                    inpatient of the hospital, the arrangement is pursuant
                    to the provision of inpatient hospital services under
                    section 1861(b)(3);
                        ``(iii) the arrangement began before December 19,
                    1989, and has continued in effect without interruption
                    since such date;
                        ``(iv) the group provides substantially all of the
                    designated health services furnished under the
                    arrangement to the hospital's patients;
                        ``(v) the arrangement is pursuant to an agreement
                    that is set out in writing and that specifies the
                    services to be provided by the parties and the
                    compensation for services provided under the agreement;
                        ``(vi) the compensation paid over the term of the
                    agreement is consistent with fair market value and the
                    compensation per unit of services is fixed in advance
                    and is not determined in a manner that takes into
                    account the volume or value of any referrals or other
                    business generated between the parties;
                        ``(vii) the compensation is provided pursuant to an
                    agreement which would be commercially reasonable even
                    if no referrals were made to the entity; and
                        ``(viii) the arrangement between the parties meets
                    such other requirements as the Secretary may impose by
                    regulation as needed to protect against program or
                    patient abuse.''.
        (d) Physician Recruitment.--Section 1877(e)(4) (42 U.S.C.
    1395nn(e)(4)) is amended--
                (1) by redesignating subparagraphs (A) through (C) as
            subparagraph (B) through (D), and
                (2) by inserting before subparagraph (B), as so
            redesignated, the following new subparagraph:
                        ``(A) the remuneration arrangement is set out in
                    writing, signed by the parties, and specifies the
                    benefits provided by the hospital, the terms under
                    which the benefits are to be provided, and the
                    obligations of the parties,''.
        (e) Isolated Transactions.--Section 1877(e)(5) (42 U.S.C.
    1395nn(e)(5)) is amended--
                (1) by striking ``Isolated'' and inserting ``One-time'',
                (2) by striking ``isolated'' and inserting ``one-time'',
            and
                (3) by inserting ``or practice'' after ``one-time sale of
            property''.
        (f) New Exception for Payments by Physician.--Section 1877(e) (42
    U.S.C. 1395nn(e)), as amended by subsection (c)(2), is further amended
    by adding at the end the following new paragraph:
                ``(8) Payments by a physician for items and services.--
            Payments made by a physician--
                        ``(A) to a laboratory in exchange for the provision
                    of clinical laboratory services, or
                        ``(B) to an entity as compensation for other items
                    or services if the items or services are furnished at a
                    price that is consistent with fair market value.''.

    SEC. 13526. CLARIFICATION CONCERNING CIVIL MONEY PENALTY SANCTIONS.

        Section 1877(g)(3) (42 U.S.C. 1395nn(g)(3)) is amended by inserting
    ``(including a referring physician)'' after ``Any person''.

    SEC. 13527. REQUIREMENTS FOR GROUP PRACTICE.

        (a) Additional Requirements.--Section 1877(h)(4) (42 U.S.C.
    1395nn(h)(4)) is amended--
                (1) by striking ``and'' at the end of subparagraph (C);
                (2) by redesignating subparagraphs (A), (B), (C), and (D)
            as clauses (i), (ii), (iii), and (vii), respectively;
                (3) by inserting ``(A)'' after ``.--'';
                (4) by inserting after clause (iii), as so redesignated,
            the following:
                        ``(iv) subject to subparagraph (B), no physician
                    who is a member of the group receives compensation
                    based on the volume or value of referrals by the
                    physician;
                        ``(v) there are no less than, on average, 5
                    physicians for each office location (as defined in
                    subparagraph (C)), except where there is only a single
                    office location for the entire group practice;
                        ``(vi) members of the group personally conduct no
                    less than 75 percent of the physician-patient
                    encounters of the group practice; and''; and
                (5) by adding at the end the following new subparagraphs:
                ``(B) A physician in a group practice may be paid a share
            of overall profits of the group or a productivity bonus (based
            on services personally performed or personally supervised by
            the physician or by another physician in the group) so long as
            the share or bonus is not determined in any manner which is
            directly related to the volume or value of referrals by that
            physician.
                ``(C)(i) Except as provided in clauses (ii) through (iv),
            the term `office location' means an office where physician
            services are offered to patients.
                ``(ii) Such term does not include a location consisting
            solely of a diagnostic facility, nursing facility, or treatment
            facility (such as a physical or occupational therapy center),
            or administrative services affiliated with the group practice.
                ``(iii) Any office location which is located immediately
            adjacent to another office location shall be treated as the
            same office location.
                ``(iv) The term `office location' does not include an
            office located in a rural area (as defined in section
            1886(d)(2)(D)) if at least 85 percent of the physician services
            at the location are provided to individuals who reside in such
            a rural area.''.
        (b) Use of Billing Numbers, Etc.--Section 1877 (42 U.S.C. 1395nn)
    is amended--
                (1) in subsection (b)(2)(B), by inserting ``under a billing
            number assigned to the group practice'' after ``member'',
                (2) in subsection (h)(4)(A)(ii), as redesignated by
            subsection (a)(2), by inserting ``and under a billing number
            assigned to the group'' after ``in the name of the group'', and
                (3) in subsection (h)(4)(A)(iii), as redesignated by
            subsection (a)(2), by striking ``by members of the group''.
        (c) Treatment of Certain Faculty Practice Plans.--The last sentence
    of section 1877(h)(4)(A) (42 U.S.C. 1395nn(h)(4)(A)), as redesignated
    by subsection (a)(2), is amended by inserting ``, institution of higher
    education, or medical school'' after ``hospital''.

    SEC. 13538. NO FEDERAL PREEMPTION OF MORE RESTRICTIVE STATE LAWS.

        Section 1877 (42 U.S.C. 1395nn), as amended by section 13522(2), is
    amended by adding at the end the following new subsection:
        ``(j) No Federal Preemption of More Restrictive State Laws.--
    Nothing in this section shall preempt provisions of State law--
                ``(1) that relate to referrals not covered by this section,
            or
                ``(2) that relate to referrals covered by this section and
            are more restrictive with respect to such referrals than the
            provisions of this section.''.

    SEC. 13529. MISCELLANEOUS PROVISIONS.

        (a) Indirect Financial Relationships.--The last sentence of section
    1877(a)(2) (42 U.S.C. 1395nn(a)(2)) is amended by inserting before the
    period the following: ``and includes an interest in an entity that
    holds an ownership or investment in another entity''.
        (b) Minor Remuneration.--Section 1877(h)(1) (42 U.S.C.
    1395nn(h)(1)) is amended--
                (1) in subparagraph (A), by inserting before the period at
            the end the following: ``(other than an arrangement involving
            only remuneration described in subparagraph (C))'', and
                (2) by adding at the end the following new subparagraph:
                ``(C) Remuneration described in this subparagraph is any
            remuneration consisting of any of the following:
                        ``(i) The forgiveness of amounts owed for
                    inaccurate tests or procedures, mistakenly performed
                    tests or procedures, or the correction of minor billing
                    errors.
                        ``(ii) The provision of items, devices, or supplies
                    that are used solely to--
                                ``(I) collect, transport, process, or store
                            specimens for the entity providing the item,
                            device, or supply, or
                                ``(II) communicate the results of tests or
                            procedures for such entity.''.
        (c) Referring Physician.--Section 1877(h)(7)(C) (42 U.S.C.
    1395nn(h)(7)(C)) is amended--
                (1) by inserting ``a request by a radiologist for
            diagnostic radiology services, and a request by a radiation
            oncologist for radiation therapy,'' after ``examination
            services,'', and
                (2) by inserting ``, radiologist, or radiation oncologist''
            after ``pathologist'' the second place it appears.
        (d) Miscellaneous and Technical Corrections.--Section 1877 (42
    U.S.C. 1395nn) is further amended--
                (1) in the next to last sentence of subsection (f)--
                        (A) by striking ``provided'' and inserting
                    ``furnished'', and
                        (B) by striking ``provides'' and inserting
                    ``furnish'';
                (2) in the last sentence of subsection (f)--
                        (A) by striking ``providing'' each place it appears
                    and inserting ``furnishing'',
                        (B) by striking ``with respect to the providers''
                    and inserting ``with respect to the entities'', and
                        (C) by striking ``diagnostic imaging services of
                    any type'' and inserting ``magnetic resonance imaging,
                    computerized axial tomography scans, and ultrasound
                    services''; and
                (3) in subsection (a)(2)(B), by striking ``subsection
            (h)(1)(A)'' and inserting ``subsection (h)(1)''.

    SEC. 13530. EFFECTIVE DATES.

        (a) Expansion of Payers and Services.--The amendments made by
    sections 13521 and 13522 shall apply with respect to a referral by a
    physician made on or after December 31, 1994.
        (b) Other Provisions.--
                (1) In general.--Except as provided in this subsection, the
            amendments made by sections 13523 through 13529 shall apply to
            referrals made on or after January 1, 1992.
                (2) Delay in effectiveness for more restrictive
            provisions.--The amendments made by the following sections
            shall apply with respect to a referral by a physician made on
            or after December 31, 1994:
                        (A) Section 13523(b) (relating to the rural
                    provider exception).
                        (B) Section 13524(a) (relating to publicly-traded
                    securities).
                        (C)(i) Section 13525(a) (relating to an exception
                    for office rental and equipment), other than the
                    exception relating to equipment.
                        (ii) Section 13525(c)(1) (relating to exception for
                    personal services arrangements).
                        (iii) Section 13525(d) (relating to physician
                    recruitment).
                        (D) Section 13526 (relating to civil money
                    penalty).
                        (E) Section 13527 (relating to requirements for
                    group practices), other than subsection (c) (relating
                    to faculty plans).
                        (F) Section 13528 (relating to non-preemption).
                        (G) Section 13529(a) (relating to indirect
                    financial relationships).

                         Subchapter D--Other Provisions

    SEC. 13551. DIRECT GRADUATE MEDICAL EDUCATION.

        (a) Adjustment in GME Base-year Costs of Federal Insurance
    Contributions Act.--
                (1) In general.--In determining the amount of payment to be
            made under section 1886(h) of the Social Security Act in the
            case of a hospital described in paragraph (2) for cost
            reporting periods beginning on or after October 1, 1992, the
            Secretary of Health and Human Services shall redetermine the
            approved FTE resident amount to reflect the amount that would
            have been paid the hospital if, during the hospital's base cost
            reporting period, the hospital had been liable for FICA taxes
            or for contributions to the retirement system of a State, a
            political subdivision of a State, or an instrumentality of such
            a State or political subdivision with respect to interns and
            residents in its medical residency training program.
                (2) Hospitals affected.--A hospital described in this
            paragraph is a hospital that did not pay FICA taxes with
            respect to interns and residents in its medical residency
            training program during the hospital's base cost reporting
            period, but is required to pay FICA taxes or make contributions
            to a retirement system described in paragraph (1) with respect
            to such interns and residents because of the amendments made by
            section 11332(b) of OBRA-1990.
                (3) Definitions.--In this subsection:
                        (A) The ``base cost reporting period'' for a
                    hospital is the hospital's cost reporting period that
                    began during fiscal year 1984.
                        (B) The term ``FICA taxes'' means, with respect to
                    a hospital, the taxes under section 3111 of the
                    Internal Revenue Code of 1986.
        (b) Publicly-Funded Family Practice Residency Programs.--
                (1) In general.--Section 1886(h)(5) (42 U.S.C.
            1395ww(h)(5)) is amended by adding at the end the following new
            subparagraph:
                        ``(I) Adjustments for certain family practice
                    residency programs.--
                                ``(i) In general.--In the case of an
                            approved medical residency training program
                            (meeting the requirements of clause (ii)) of a
                            hospital which received payments from the
                            United States, a State, or a political
                            subdivision of a State or an instrumentality of
                            such a State or political subdivision (other
                            than payments under this title or a State plan
                            under title XIX) for the program during the
                            cost reporting period that began during fiscal
                            year 1984, the Secretary shall--
                                        ``(I) provide for an average amount
                                    under paragraph (2)(A) that takes into
                                    account the Secretary's estimate of the
                                    amount that would have been recognized
                                    as reasonable under this title if the
                                    hospital had not received such
                                    payments, and
                                        ``(II) reduce the payment amount
                                    otherwise provided under this
                                    subsection in an amount equal to the
                                    proportion of such program payments
                                    during the cost reporting period
                                    involved that is allocable to this
                                    title.
                                ``(ii) Additional requirements.--A
                            hospital's approved medical residency program
                            meets the requirements of this clause if--
                                        ``(I) the program is limited to
                                    training for family and community
                                    medicine;
                                        ``(II) the program is the only
                                    approved medical residency program of
                                    the hospital; and
                                        ``(III) the average amount
                                    determined under paragraph (2)(A) for
                                    the hospital (as determined without
                                    regard to the increase in such amount
                                    described in clause (i)(I)) does not
                                    exceed $10,000.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to payments under section 1886(h) of the Social
            Security Act for cost reporting periods beginning on or after
            October 1, 1990.
        (c) Preventive Care Residencies.--
                (1) Eligibility of preventive care residency programs for
            expanded initial residency periods.--Section 1886(h)(5)(F)(ii)
            (42 U.S.C. 1395ww(h)(5)(F)(ii)) is amended by inserting after
            ``fellowship program'' the following: ``or a preventive care
            residency or fellowship program''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to cost reporting periods beginning on or after
            October 1, 1993.

    SEC. 13552. IMMUNOSUPPRESSIVE DRUG THERAPY.

        Section 1861(s)(2)(J) (42 U.S.C. 1395x(s)(2)(J)) is amended by
    striking ``title, within'' and all that follows and inserting the
    following: ``title, but only in the case of drugs furnished--
                        ``(i) before 1994, within 12 months after the date
                    of the transplant procedure,
                        ``(ii) during 1994, within 18 months after the date
                    of the transplant procedure,
                        ``(iii) during 1995, within 24 months after the
                    date of the transplant procedure,
                        ``(iv) during 1996, within 30 months after the date
                    of the transplant procedure, and
                        ``(v) during any year after 1997, within 36 months
                    after the date of the transplant procedure;''.

    SEC. 13553. REDUCTION IN PAYMENTS FOR ERYTHROPOIENTIN.

        (a) In General.--Section 1881(b)(11)(B)(ii)(I) (42 U.S.C.
    1395rr(b)(11)(B)(ii)(I)) is amended--
                (1) by striking ``1991'' and inserting ``1994''; and
                (2) by striking ``$11'' and inserting ``$10''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to erythropoietin furnished on or after January 1, 1994.

    SEC. 13554. QUALIFIED MEDICARE BENEFICIARY OUTREACH.

        The Secretary of Health and Human Services shall establish and
    implement a method for obtaining information from newly eligible
    medicare beneficiaries that may be used to determine whether such
    beneficiaries may be eligible for medical assistance for medicare cost-
    sharing under State medicaid plans as qualified medicare beneficiaries,
    and for transmitting such information to the State in which such a
    beneficiary resides.

    SEC. 13555. EXTENSION OF SOCIAL HEALTH MAINTENANCE ORGANIZATION
                  DEMONSTRATIONS.

        (a) Extension of Current Waivers.--Section 4018(b) of OBRA-1987, as
    amended by section 4207(b)(4)(B) of OBRA-1990, is amended--
                (1) in paragraph (1) by striking ``December 31, 1995'' and
            inserting ``December 31, 1997''; and
                (2) in paragraph (4) by striking ``March 31, 1996'' and
            inserting ``March 31, 1998''.
        (b) Expansion of Demonstrations.--Section 2355 of the Deficit
    Reduction Act of 1984 is amended--
                (1) in the last sentence of subsection (a) by striking ``12
            months'' and inserting ``36 months''; and
                (2) in subsection (b)(1)(B)--
                        (A) by striking ``or'' at the end of clause (iii);
                    and
                        (B) by redesignating clause (iv) as clause (v) and
                    inserting after clause (iii) the following new clause:
                                ``(iv) integrating acute and chronic care
                            management for patients with end-stage renal
                            disease through expanded community care case
                            management services (and for purposes of a
                            demonstration project conducted under this
                            clause, any requirement under a waiver granted
                            under this section that a project disenroll
                            individuals who develop end-stage renal disease
                            shall not apply); or''.
        (c) Expansion of Number of Members Per Site.--The Secretary of
    Health and Human Services may not impose a limit of less than 12,000 on
    the number of individuals that may participate in a project conducted
    under section 2355 of the Deficit Reduction Act of 1984.
        (d) Miscellaneous and Technical Corrections.--
                (1) The section following section 4206 of OBRA-1990 is
            amended by striking ``Sec. 4027.'' and inserting ``Sec.
            4207.'', and in this subtitle is referred to as section 4207 of
            OBRA-1990.
                (2) Section 2355(b)(1)(B) of the Deficit Reduction Act of
            1984, as amended by section 4207(b)(4)(B)(ii) of OBRA-1990, is
            amended--
                        (A) by striking ``12907(c)(4)(A)'' and inserting
                    ``4207(b)(4)(B)(i)'', and
                        (B) by striking ``feasibilitly'' and inserting
                    ``feasibility''.
                (3) Section 4207(b)(4)(B)(iii)(III) of OBRA-1990 is amended
            by striking the period at the end and inserting a semicolon.
                (4) Subsections (c)(3) and (e) of section 2355 of the
            Deficit Reduction Act of 1984, as amended by section
            4207(b)(4)(B) of OBRA-1990, are each amended by striking
            ``12907(c)(4)(A)'' each place it appears and inserting
            ``4207(b)(4)(B)''.
                (5) Section 4207(c)(2) of OBRA-1990 is amended by striking
            ``the Committee on Ways and Means'' each place it appears and
            inserting ``the Committees on Ways and Means and Energy and
            Commerce''.
                (6) Section 4207(d) of OBRA-1990 is amended by
            redesignating the second paragraph (3) (relating to effective
            date) as paragraph (4).
                (7) Section 4207(i)(2) of OBRA-1990 is amended--
                        (A) by striking the period at the end of clause
                    (iii) and inserting a semicolon, and
                        (B) in clause (v), by striking ``residents'' and
                    inserting ``patients''.
                (8) Section 4207(j) of OBRA-1990 is amended by striking
            ``title'' each place it appears and inserting ``subtitle''.
        (e) Effective Date.--The amendments made by this section shall take
    effect as if included in the enactment of OBRA-90.

    SEC. 13556. HOSPICE NOTIFICATION TO HOME HEALTH BENEFICIARIES.

        (a) In General.--Section 1891(a)(1) (42 U.S.C. 1395bbb(a)(1)) is
    amended by adding at the end the following new subparagraph:
                        ``(H) The right, in the case of a resident who is
                    entitled to benefits under this title, to be fully
                    informed orally and in writing (at the time of coming
                    under the care of the agency) of the entitlement of
                    individuals to hospice care under section 1812(a)(4)
                    (unless there is no hospice program providing hospice
                    care for which payment may be made under this title
                    within the geographic area of the facility and it is
                    not the common practice of the agency to refer patients
                    to hospice programs located outside such geographic
                    area).''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to services furnished on or after the first day of the first
    month beginning more than one year after the date of the enactment of
    this Act.

    SEC. 13557. INTEREST PAYMENTS.

        (a) In General.--Sections 1816(c)(2)(B)(ii)(IV) and
    1842(c)(2)(B)(ii)(IV) of the Social Security Act shall be applied with
    respect to claims received in the 12-month period beginning October 1,
    1992, by substituting ``30 calendar days'' for ``24 calendar days'' and
    ``17 calendar days''.
        (b) Effective Date.--Subsection (a) shall be in effect during the
    period that begins on the date of the enactment of this Act and ends on
    September 30, 1993.

    SEC. 13558. PEER REVIEW ORGANIZATIONS.

        (a) Repeal Of PRO Precertification Requirement for Certain Surgical
    Procedures.--
                (1) In general.--Section 1164 (42 U.S.C. 1320c-13) is
            repealed.
                (2) Conforming amendments.--
                        (A) Section 1154 (42 U.S.C. 1320c-3) is amended--
                                (i) in subsection (a), by striking
                            paragraph (12), and
                                (ii) in subsection (d), by striking ``(and
                            except as provided in section 1164)''.
                        (B) Section 1833 (42 U.S.C. 1395l) is amended--
                                (i) in subsection (a)(1)(D)(i), by striking
                            ``, or for tests furnished in connection with
                            obtaining a second opinion required under
                            section 1164(c)(2) (or a third opinion, if the
                            second opinion was in disagreement with the
                            first opinion)'';
                                (ii) in subsection (a)(1), by striking
                            clause (G);
                                (iii) in subsection (a)(2)(A), by striking
                            ``, to items and services (other than clinical
                            diagnostic laboratory tests) furnished in
                            connection with obtaining a second opinion
                            required under section 1164(c)(2) (or a third
                            opinion, if the second opinion was in
                            disagreement with the first opinion),'';
                                (iv) in subsection (a)(2)(D)(i)--
                                        (I) by striking ``basis,'' and
                                    inserting ``basis or'', and
                                        (II) by striking ``, or for tests
                                    furnished in connection with obtaining
                                    a second opinion required under section
                                    1164(c)(2) (or a third opinion, if the
                                    second opinion was in disagreement with
                                    the first opinion)'';
                                (v) in subsection (a)(3), by striking ``and
                            for items and services furnished in connection
                            with obtaining a second opinion required under
                            section 1164(c)(2), or a third opinion, if the
                            second opinion was in disagreement with the
                            first opinion)''; and
                                (vi) in the first sentence of subsection
                            (b), by striking ``(4)'' and all that follows
                            through ``and (5)'' and inserting and (4)''.
                        (C) Section 1834(g)(1)(B) (42 U.S.C.
                    1395m(g)(1)(B)) is amended by striking ``and for items
                    and services furnished in connection with obtaining a
                    second opinion required under section 1164(c)(2), or a
                    third opinion, if the second opinion was in
                    disagreement with the first opinion)''.
                        (D) Section 1862(a) (42 U.S.C. 1395y(a)) is
                    amended--
                                (i) by adding ``or'' at the end of
                            paragraph (14),
                                (ii) by striking ``; or'' at the end of
                            paragraph (15) and inserting a period, and
                                (iii) by striking paragraph (16).
                        (E) The third sentence of section 1866(a)(2)(A) (42
                    U.S.C. 1395w(a)(2)(A)) is amended by striking ``, with
                    respect to items and services furnished in connection
                    with obtaining a second opinion required under section
                    1164(c)(2) (or a third opinion, if the second opinion
                    was in disagreement with the first opinion),''.
                (3) Effective date.--The amendments made by this subsection
            shall apply to services provided on or after the date of the
            enactment of this Act.
        (b) Miscellaneous and Technical Corrections.--(1) The third
    sentence of section 1156(b)(1) (42 U.S.C. 1320c-5(b)(1)) is amended by
    striking ``whehter'' and inserting ``whether''.
        (2) Section 1154(a)(9)(B) (42 U.S.C. 1320c-3(a)(9)(B)) is amended
    by striking ``this subsection'' and inserting ``section 1156(a)''.
        (3) Section 4205(d)(2)(B) of OBRA-1990 is amended by striking
    ``amendments'' and inserting ``amendment''.
        (4) Section 1160(d) (42 U.S.C. 1320c-9(d)) is amended by striking
    ``subpena'' and inserting ``subpoena''.
        (5) Section 4205(e)(2) of OBRA-1990 is amended by striking
    ``amendments'' and inserting ``amendment'' and by striking ``all''.
        (6)(A) Except as provided in subparagraph (B), the amendments made
    by this subsection shall take effect as if included in the enactment of
    OBRA-1990.
        (B) The amendment made by paragraph (2) (relating to the
    requirement on reporting of information to State licensing boards)
    shall take effect on the date of the enactment of this Act.

    SEC. 13559. HEALTH MAINTENANCE ORGANIZATIONS.

        (a) Adjustment In Medicare Capitation Payments To Account For
    Regional Variations In Application Of Secondary Payer Provisions.--
                (1) In general.--Section 1876(a)(4) (42 U.S.C.
            1395mm(a)(4)) is amended by adding at the end the following new
            sentence: ``In establishing the adjusted average per capita
            cost for a geographic area, the Secretary shall take into
            account the differences between the proportion of individuals
            in the area with respect to whom there is a group health plan
            that is a primary plan (within the meaning of section
            1862(b)(2)(A)) compared to the proportion of all such
            individuals with respect to whom there is such a group health
            plan.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to contracts entered into for years beginning with
            1994.
        (b) Revisions in the Payment Methodology for Risk Contractors.--
    Section 4204(b) of OBRA-1990 is amended to read as follows:
        ``(b) Revisions in the Payment Methodology for Risk Contractors.--
    (1)(A) Not later than October 1, 1993, the Secretary of Health and
    Human Services (in this subsection referred to as the `Secretary')
    shall submit a proposal to the Congress that provides for revisions to
    the payment method to be applied in years beginning with 1995 for
    organizations with a risk-sharing contract under section 1876(g) of the
    Social Security Act.
        ``(B) In proposing the revisions required under subparagraph (A)
    the Secretary shall consider--
                ``(i) the difference in costs associated with medicare
            beneficiaries with differing health status and demographic
            characteristics; and
                ``(ii) the effects of using alternative geographic
            classifications on the determinations of costs associated with
            beneficiaries residing in different areas.
        ``(2) Not later than 3 months after the date of submittal of the
    proposal under paragraph (1), the Comptroller General shall review the
    proposal and shall report to Congress on the appropriateness of the
    proposed modifications.''.
        (c) Miscellaneous and Technical Corrections.--(1) Section
    1876(a)(3) (42 U.S.C. 1395mm(a)(3)) is amended by striking ``subsection
    (c)(7)'' and inserting ``subsections (c)(2)(B)(ii) and (c)(7)''.
        (2) Section 4204(c)(3) of OBRA-1990 is amended by striking ``for
    1991'' and inserting ``for years beginning with 1991''.
        (3) Section 4204(d)(2) of OBRA-1990 is amended by striking
    ``amendment'' and inserting ``amendments''.
        (4) Section 1876(a)(1)(E)(ii)(I) (42 U.S.C. 1395mm(a)(1)(E)(ii)(I))
    is amended by striking the comma after ``contributed to''.
        (5) Section 4204(e)(2) of OBRA-1990 is amended by striking ``(which
    has a risk-sharing contract under section 1876 of the Social Security
    Act)''.
        (6) Section 4204(f)(4) of OBRA-1990 is amended by striking
    ``final''.
        (7) Section 1862(b)(3)(C) (42 U.S.C. 1395y(b)(3)(C)) is amended--
                (A) in the heading, by striking ``plan'' and inserting
            ``plan or a large group health plan'';
                (B) by striking ``group health plan'' and inserting ``group
            health plan or a large group health plan'';
                (C) by striking ``, unless such incentive is also offered
            to all individuals who are eligible for coverage under the
            plan''; and
                (D) by striking ``the first sentence of subsection (a) and
            other than subsection (b)'' and inserting ``subsections (a) and
            (b)''.
        (8) The amendments made by this subsection shall take effect as if
    included in the enactment of OBRA-1990.

    SEC. 13560. MEDICARE ADMINISTRATION BUDGET PROCESS.

        (a) Adjustments.--Section 251(b)(2) of the Balanced Budget and
    Emergency Deficit Control Act of 1985 is amended by redesignating
    subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively,
    and by inserting after subparagraph (D) the following new subparagraph:
                        ``(E) Medicare administrative costs.--To the extent
                    that appropriations are enacted that provide additional
                    new budget authority (as compared with a base level of
                    $1,526,000,000 for new budget authority) for the
                    administration of the Medicare program by fiscal
                    intermediaries and carriers pursuant to sections 1816
                    and 1842(a) of title XVIII of the Social Security Act,
                    the adjustment for that year shall be that amount, but
                    shall not exceed--
                                ``(i) for fiscal year 1994, $198,000,000 in
                            new budget authority and $198,000,000 in
                            outlays; and
                                ``(ii) for fiscal year 1995, $220,000,000
                            in new budget authority and $220,000,000 in
                            outlays; and
            the prior-year outlays resulting from these appropriations of
            budget authority and additional adjustments equal to the sum of
            the maximum adjustments that could have been made in preceding
            fiscal years under this subparagraph.''.
        (b) Conforming Amendments.--
                (1) Section 603(a) of the Congressional Budget Act of 1974
            is amended by striking ``section 251(b)(2)(E)(i)'' and
            inserting ``section 251(b)(2)(F)(i)''.
                (2) Section 606(d) of the Congressional Budget Act of 1974
            is amended--
                        (A) in paragraph (1)(A) by striking ``section
                    251(b)(2)(E)(i)'' and inserting ``section
                    251(b)(2)(F)(i)''; and
                        (B) in paragraph (2), by inserting
                    ``251(b)(2)(E),'' after ``251(b)(2)(D),''.

    SEC. 13561. OTHER PROVISIONS.

        (a) Survey and Certification Requirements.--(1) Section 1864 (42
    U.S.C. 1395aa) is amended--
                (A) in subsection (e), by striking ``title'' and inserting
            ``title (other than any fee relating to section 353 of the
            Public Health Service Act)''; and
                (B) in the first sentence of subsection (a), by striking
            ``1861(s) or'' and all that follows through ``Service Act,''
            and inserting ``1861(s),''.
        (2) An agreement made by the Secretary of Health and Human Services
    with a State under section 1864(a) of the Social Security Act may
    include an agreement that the services of the State health agency or
    other appropriate State agency (or the appropriate local agencies) will
    be utilized by the Secretary for the purpose of determining whether a
    laboratory meets the requirements of section 353 of the Public Health
    Service Act.
        (b) Home Dialysis Demonstration Technical Correction.--Section 4202
    of OBRA-1990 is amended--
                (1) in subsection (b)(1)(A), by striking ``home
            hemodialysis staff assistant'' and inserting ``qualified home
            hemodialysis staff assistant (as described in subsection
            (d))'';
                (2) in subsection (b)(2)(B)(ii)(I), by striking ``(as
            adjusted to reflect differences in area wage levels);
                (3) in subsection (c)(1)(A), by striking ``skilled''; and
                (4) in subsection (c)(1)(E), by striking ``(b)(4)'' and
            inserting ``(b)(2)''.
        (c) Other Technical Amendments.--(1) Section 1833 (42 U.S.C. 1395l)
    is amended by redesignating the subsection (r) added by section
    4206(b)(2) of OBRA-1990 as subsection (s).
        (2) Section 1866(f)(1) (42 U.S.C. 1395cc(f)(1)) is amended by
    striking ``1833(r)'' and inserting ``1833(s)''.
        (3) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is amended by moving
    subparagraph (O), as redesignated by section 13478(f)(8)(B)(iii)(II) of
    this title, two ems to the left.
        (4) Section 1881(b)(1)(C) (42 U.S.C. 1395rr(b)(1)(C)) is amended by
    striking ``1861(s)(2)(Q)'' and inserting ``1861(s)(2)(P)''.
        (5) Section 4201(d)(2) of OBRA-1990 is amended by striking ``(B) by
    striking'', ``(C) by striking'', and ``(3) by adding'' and inserting
    ``(i) by striking'', ``(ii) by striking'', and ``(B) by adding'',
    respectively.
        (6)(A) Section 4207(a)(1) of OBRA-1990 is amended by adding closing
    quotation marks and a period after ``such review.''.
        (B) Section 4207(a)(4) of OBRA-1990 is amended by striking ``this
    subsection'' and inserting ``paragraphs (2) and (3)''.
        (C) Section 4207(b)(1) of OBRA-1990 is amended by striking
    ``section 3(7)'' and inserting ``section 601(a)(1)''.
        (d) Effective Date.--The amendments made by this section shall take
    effect as if included in the enactment of OBRA-1990.

              CHAPTER 4--MEDICARE SUPPLEMENTAL INSURANCE POLICIES

    SEC. 13571. STANDARDS FOR MEDICARE SUPPLEMENTAL INSURANCE POLICIES.

        (a) Simplification of Medicare Supplemental Policies.--
                (1) Section 4351 of OBRA-1990 is amended by striking ``(a)
            In General.--''.
                (2) Section 1882(p) (42 U.S.C. 1395ss(p)) is amended--
                        (A) in paragraph (1)(A)--
                                (i) by striking ``promulgates'' and
                            inserting ``changes the revised NAIC Model
                            Regulation (described in subsection (m)) to
                            incorporate'',
                                (ii) by striking ``(such limitations,
                            language, definitions, format, and standards
                            referred to collectively in this subsection as
                            `NAIC standards'),', and
                                (iii) by striking ``included a reference to
                            the NAIC standards'' and inserting ``were a
                            reference to the revised NAIC Model Regulation
                            as changed under this subparagraph (such
                            changed regulation referred to in this section
                            as the `1991 NAIC Model Regulation')'';
                        (B) in paragraph (1)(B)--
                                (i) by striking ``promulgate NAIC
                            standards'' and inserting ``make the changes in
                            the revised NAIC Model Regulation'',
                                (ii) by striking ``limitations, language,
                            definitions, format, and standards described in
                            clauses (i) through (iv) of such subparagraph
                            (in this subsection referred to collectively as
                            `Federal standards')'' and inserting ``a
                            regulation'', and
                                (iii) by striking ``included a reference to
                            the Federal standards'' and inserting ``were a
                            reference to the revised NAIC Model Regulation
                            as changed by the Secretary under this
                            subparagraph (such changed regulation referred
                            to in this section as the `1991 Federal
                            Regulation')'';
                        (C) in paragraph (1)(C)(i), by striking ``NAIC
                    standards or the Federal standards'' and inserting
                    ``1991 NAIC Model Regulation or 1991 Federal
                    Regulation'';
                        (D) in paragraphs (1)(C)(ii)(I), (1)(E), (2), and
                    (9)(B), by striking ``NAIC or Federal standards'' and
                    inserting ``1991 NAIC Model Regulation or 1991 Federal
                    Regulation'';
                        (E) in paragraph (2)(C), by striking ``(5)(B)'' and
                    inserting ``(4)(B)'';
                        (F) in paragraph (4)(A)(i), by inserting ``or
                    paragraph (6)'' after ``(B)'';
                        (G) in paragraph (4), by striking ``applicable
                    standards'' each place it appears and inserting
                    ``applicable 1991 NAIC Model Regulation or 1991 Federal
                    Regulation'';
                        (H) in paragraph (6), by striking ``in regard to
                    the limitation of benefits described in paragraph (4)''
                    and inserting ``described in clauses (i) through (iii)
                    of paragraph (1)(A)'';
                        (I) in paragraph (7), by striking ``policyholder''
                    and inserting ``policyholders'';
                        (J) in paragraph (8), by striking ``after the
                    effective date of the NAIC or Federal standards with
                    respect to the policy, in violation of the previous
                    requirements of this subsection'' and inserting ``on
                    and after the effective date specified in paragraph
                    (1)(C) (but subject to paragraph (10)), in violation of
                    the applicable 1991 NAIC Model Regulation or 1991
                    Federal Regulation insofar as such regulation relates
                    to the requirements of subsection (o) or (q) or clause
                    (i), (ii), or (iii) of paragraph (1)(A)'';
                        (K) in paragraph (9), by adding at the end the
                    following new subparagraph:
        ``(D) Subject to paragraph (10), this paragraph shall apply to
    sales of policies occurring on or after the effective date specified in
    paragraph (1)(C).''; and
                        (L) in paragraph (10), by striking ``this
                    subsection'' and inserting ``paragraph (1)(A)(i)''.
        (b) Guaranteed Renewability.--Section 1882(q) (42 U.S.C. 1395ss(q))
    is amended--
                (1) in paragraph (2), by striking ``paragraph (2)'' and
            inserting ``paragraph (4)'', and
                (2) in paragraph (4), by striking ``the succeeding issuer''
            and inserting ``issuer of the replacement policy''.
        (c) Enforcement of Standards.--
                (1) Section 1882(a)(2) (42 U.S.C. 1395ss(a)(2)) is
            amended--
                        (A) in subparagraph (A), by striking ``NAIC
                    standards or the Federal standards'' and inserting
                    ``1991 NAIC Model Regulation or 1991 Federal
                    Regulation'', and
                        (B) by striking ``after the effective date of the
                    NAIC or Federal standards with respect to the policy''
                    and inserting ``on and after the effective date
                    specified in subsection (p)(1)(C)''.
                (2) The sentence in section 1882(b)(1) added by section
            4353(c)(5) of OBRA-1990 is amended--
                        (A) by striking ``The report'' and inserting ``Each
                    report'',
                        (B) by inserting ``and requirements'' after
                    ``standards'',
                        (C) by striking ``and'' after ``compliance,'', and
                        (D) by striking the comma after ``Commissioners''.
                (3) Section 1882(g)(2)(B) (42 U.S.C. 1395ss(g)(2)(B)) is
            amended by striking ``Panel'' and inserting ``Secretary''.
                (4) Section 1882(b)(1) (42 U.S.C. 1395ss(b)(1)) is amended
            by striking ``the the Secretary'' and inserting ``the
            Secretary''.
        (d) Preventing Duplication.--
                (1) Section 1882(d)(3)(A) (42 U.S.C. 1395ss(d)(3)(A)) is
            amended--
                        (A) by amending the first sentence to read as
                    follows:
        ``(i) It is unlawful for a person to sell or issue to an individual
    entitled to benefits under part A or enrolled under part B of this
    title--
                ``(I) a health insurance policy with knowledge that the
            policy duplicates health benefits to which the individual is
            otherwise entitled under this title or title XIX,
                ``(II) a medicare supplemental policy with knowledge that
            the individual is entitled to benefits under another medicare
            supplemental policy, or
                ``(III) a health insurance policy (other than a medicare
            supplemental policy) with knowledge that the policy duplicates
            health benefits to which the individual is otherwise entitled,
            other than benefits to which the individual is entitled under a
            requirement of State or Federal law.'';
                        (B) by designating the second sentence as clause
                    (ii) and, in such clause, by striking ``the previous
                    sentence'' and inserting ``clause (i)'';
                        (C) by designating the third sentence as clause
                    (iii) and, in such clause--
                                (i) by striking ``the previous sentence''
                            and inserting ``clause (i) with respect to the
                            sale of a medicare supplemental policy'', and
                                (ii) by striking ``and the statement'' and
                            all that follows up to the period at the end;
                            and
                        (D) by striking the last sentence.
                (2) Section 1882(d)(3)(B) (42 U.S.C. 1395ss(d)(3)(B)) is
            amended--
                        (A) in clause (ii)(II), by striking ``65 years of
                    age or older'',
                        (B) in clause (iii)(I), by striking ``another
                    medicare'' and inserting ``a medicare'',
                        (C) in clause (iii)(I), by striking ``such a
                    policy'' and inserting ``a medicare supplemental
                    policy'',
                        (D) in clause (iii)(II), by striking ``another
                    policy'' and inserting ``a medicare supplemental
                    policy'', and
                        (E) by amending subclause (III) of clause (iii) to
                    read as follows:
        ``(III) If the statement required by clause (i) is obtained and
    indicates that the individual is entitled to any medical assistance
    under title XIX, the sale of the policy is not in violation of clause
    (i) (insofar as such clause relates to such medical assistance), if a
    State medicaid plan under such title pays the premiums for the policy,
    or, in the case of a qualified medicare beneficiary described in
    section 1905(p)(1), if the State pays less than the full amount of
    medicare cost-sharing as described in subparagraphs (B), (C), and (D)
    of section 1905(p)(3) for such individual.''.
                (3)(A) Section 1882(d)(3)(C) (42 U.S.C. 1395ss(d)(3)(C)) is
            amended--
                        (i) by striking ``the selling'' and inserting ``(i)
                    the sale or issuance'', and
                        (ii) by inserting before the period at the end the
                    following: ``, (ii) the sale or issuance of a policy or
                    plan described in subparagraph (A)(i)(I) (other than a
                    medicare supplemental policy to an individual entitled
                    to any medical assistance under title XIX) under which
                    all the benefits are fully payable directly to or on
                    behalf of the individual without regard to other health
                    benefit coverage of the individual but only if (for
                    policies sold or issued more than 60 days after the
                    date the statements are published or promulgated under
                    subparagraph (D)) there is disclosed in a prominent
                    manner as part of (or together with) the application
                    the applicable statement (specified under subparagraph
                    (D)) of the extent to which benefits payable under the
                    policy or plan duplicate benefits under this title, or
                    (iii) the sale or issuance of a policy or plan
                    described in subparagraph (A)(i)(III) under which all
                    the benefits are fully payable directly to or on behalf
                    of the individual without regard to other health
                    benefit coverage of the individual''.
                (B) Section 1882(d)(3) (42 U.S.C. 1395ss(d)(3)) is amended
            by adding at the end the following:
        ``(D)(i) If--
                ``(I) within the 90-day period beginning on the date of the
            enactment of this subparagraph, the National Association of
            Insurance Commissioners develops (after consultation with
            consumer and insurance industry representatives) and submits to
            the Secretary a statement for each of the types of health
            insurance policies (other than medicare supplemental policies
            and including, as separate types of policies, policies paying
            directly to the beneficiary fixed, cash benefits) which are
            sold to persons entitled to health benefits under this title,
            of the extent to which benefits payable under the policy or
            plan duplicate benefits under this title, and
                ``(II) the Secretary approves all the statements submitted
            as meeting the requirements of subclause (I),
    each such statement shall be (for purposes of subparagraph (C)) the
    statement specified under this subparagraph for the type of policy
    involved. The Secretary shall review and approve (or disapprove) all
    the statements submitted under subclause (I) within 30 days after the
    date of their submittal. Upon approval of such statements, the
    Secretary shall publish such statements.
        ``(ii) If the Secretary does not approve the statements under
    clause (i) or the statements are not submitted within the 90-day period
    specified in such clause, the Secretary shall promulgate (after
    consultation with consumer and insurance industry representatives and
    not later than 90 days after the date of disapproval or the end of such
    90-day period (as the case may be)) a statement for each of the types
    of health insurance policies (other than medicare supplemental policies
    and including, as separate types of policies, policies paying directly
    to the beneficiary fixed, cash benefits) which are sold to persons
    entitled to health benefits under this title, of the extent to which
    benefits payable under the policy or plan duplicate benefits under this
    title, and each such statement shall be (for purposes of subparagraph
    (C)) the statement specified under this subparagraph for the type of
    policy involved.''.
                (C) The requirement of a disclosure under section
            1882(d)(3)(C)(ii) of the Social Security Act shall not apply to
            an application made for a policy or plan before 60 days after
            the date of the Secretary of Health and Human Services
            publishes or promulgates all the statements under section
            1882(d)(3)(D) of such Act.
                (4) Subparagraphs (A) and (B) of section 1882(q)(5) are
            amended by striking ``of the Social Security Act''.
        (e) Loss Ratios and Refunds of Premiums.--
                (1) Section 1882(r) (42 U.S.C. 1395ss(r)) is amended--
                        (A) in paragraph (1), by striking ``or sold'' and
                    inserting ``or renewed (or otherwise provide coverage
                    after the date described in subsection (p)(1)(C))'';
                        (B) in paragraph (1)(A), by inserting ``for periods
                    after the effective date of these provisions'' after
                    ``the policy can be expected'';
                        (C) in paragraph (1)(A), by striking
                    ``Commissioners,'' and inserting ``Commissioners)'';
                        (D) in paragraph (1)(B), by inserting before the
                    period at the end the following: ``, treating policies
                    of the same type as a single policy for each standard
                    package'';
                        (E) by adding at the end of paragraph (1) the
                    following: ``For the purpose of calculating the refund
                    or credit required under paragraph (1)(B) for a policy
                    issued before the date specified in subsection
                    (p)(1)(C), the refund or credit calculation shall be
                    based on the aggregate benefits provided and premiums
                    collected under all such policies issued by an insurer
                    in a State (separated as to individual and group
                    policies) and shall be based only on aggregate benefits
                    provided and premiums collected under such policies
                    after the date specified in section 13571(m)(4) of the
                    Omnibus Budget Reconciliation Act of 1993.'';
                        (F) in the first sentence of paragraph (2)(A), by
                    striking ``by policy number'' and inserting ``by
                    standard package'';
                        (G) by striking the second sentence of paragraph
                    (2)(A) and inserting the following: ``Paragraph (1)(B)
                    shall not apply to a policy until 12 months following
                    issue.'';
                        (H) in the last sentence of paragraph (2)(A), by
                    striking ``in order'' and all that follows through
                    ``are effective'';
                        (I) by adding at the end of paragraph (2)(A), the
                    following new sentence: ``In the case of a policy
                    issued before the date specified in subsection
                    (p)(1)(C), paragraph (1)(B) shall not apply until 1
                    year after the date specified in section 13571(m)(4) of
                    the Omnibus Budget Reconciliation Act of 1993.'';
                        (J) in paragraph (2), by striking ``policy year''
                    each place it appears and inserting ``calendar year'';
                        (K) in paragraph (4), by striking ``February'',
                    ``disllowance'', ``loss-ratios'' each place it appears,
                    and ``loss-ratio'' and inserting ``October'',
                    ``disallowance'', ``loss ratios'', and ``loss ratio'',
                    respectively;
                        (L) in paragraph (6)(A), by striking ``issues a
                    policy in violation of the loss ratio requirements of
                    this subsection'' and ``such violation'' and inserting
                    ``fails to provide refunds or credits as required in
                    paragraph (1)(B)'' and ``policy issued for which such
                    failure occurred'', respectively; and
                        (M) in paragraph (6)(B), by striking ``to
                    policyholders'' and inserting ``to the policyholder or,
                    in the case of a group policy, to the certificate
                    holder''.
                (2) Section 1882(b)(1) (42 U.S.C. 1395ss(b)(1)) is amended,
            in the matter after subparagraph (H), by striking ``subsection
            (F)'' and inserting ``subparagraph (F)''.
                (3) Section 4355(d) of OBRA-1990 is amended by striking
            ``sold or issued'' and all that follows and inserting ``issued
            or renewed (or otherwise providing coverage after the date
            described in section 1882(p)(1)(C) of the Social Security Act)
            on or after the date specified in section 1882(p)(1)(C) of such
            Act.''.
        (f) Treatment of HMO's.--
                (1) Section 1882(g)(1) (42 U.S.C. 1395ss(g)(1)) is amended
            by striking ``a health maintenance organization or other direct
            service organization'' and all that follows through ``1833''
            and inserting ``an eligible organization (as defined in section
            1876(b)) if the policy or plan provides benefits pursuant to a
            contract under section 1876 or an approved demonstration
            project described in section 603(c) of the Social Security
            Amendments of 1983, section 2355 of the Deficit Reduction Act
            of 1984, or section 9412(b) of the Omnibus Budget
            Reconciliation Act of 1986 or, during the period beginning on
            the date specified in subsection (p)(1)(C) and ending on
            December 31, 1994, a policy or plan of an organization if the
            policy or plan provides benefits pursuant to an agreement under
            section 1833(a)(1)(A)''.
                (2) Section 4356(b) of OBRA-1990 is amended by striking
            ``on the date of the enactment of this Act'' and inserting ``on
            the date specified in section 1882(p)(1)(C) of the Social
            Security Act''.
        (g) Pre-existing Condition Limitations.--Section 1882(s) (42 U.S.C.
    1395ss(s)) is amended--
                (1) in paragraph (2)(A), by striking ``for which an
            application is submitted'' and inserting ``in the case of an
            individual for whom an application is submitted prior to or'',
                (2) in paragraph (2)(A), by striking ``in which the
            individual (who is 65 years of age or older) first is enrolled
            for benefits under part B'' and inserting ``as of the first day
            on which the individual is 65 years of age or older and is
            enrolled for benefits under part B'', and
                (3) in paragraph (2)(B), by striking ``before it'' and
            inserting ``before the policy''.
        (h) Medicare Select Policies.--
                (1) Section 1882(t) (42 U.S.C. 1395ss(t)) is amended--
                        (A) in paragraph (1), by inserting ``medicare
                    supplemental'' after ``If a'',
                        (B) in paragraph (1), by striking ``NAIC Model
                    Standards'' and inserting ``1991 NAIC Model Regulation
                    or 1991 Federal Regulation'',
                        (C) in paragraph (1)(A), by inserting ``or
                    agreements'' after ``contracts'',
                        (D) in subparagraphs (E)(i) and (F) of paragraph
                    (1), by striking ``NAIC standards'' and inserting
                    ``standards in the 1991 NAIC Model Regulation or 1991
                    Federal Regulation'', and
                        (E) in paragraph (2), by inserting ``the issuer''
                    before ``is subject to a civil money penalty''.
                (2) Section 1154(a)(4)(B) (42 U.S.C. 1320c-3(a)(4)(B)) is
            amended--
                        (A) by inserting ``that is'' after ``(or'', and
                        (B) by striking ``1882(t)'' and inserting
                    ``1882(t)(3)''.
        (i) Health Insurance Counseling.--Section 4360 of OBRA-1990 is
    amended--
                (1) in subsection (b)(2)(A)(ii), by striking ``Act'' and
            inserting ``Act)'';
                (2) in subsection (b)(2)(D), by striking ``services'' and
            inserting ``counseling'';
                (3) in subsection (b)(2)(I), by striking ``assistance'' and
            inserting ``referrals'';
                (4) in subsection (c)(1), by striking ``and that such
            activities will continue to be maintained at such level'';
                (5) in subsection (d)(3), by striking ``to the rural
            areas'' and inserting ``eligible individuals residing in rural
            areas'';
                (6) in subsection (e)--
                        (A) by striking ``subsection (c) or (d)'' and
                    inserting ``this section'',
                        (B) by striking ``and annually thereafter, issue an
                    annual report'' and inserting ``and annually thereafter
                    during the period of the grant, issue a report'', and
                        (C) in paragraph (1), by striking ``State-wide'';
                (7) in subsection (f), by striking paragraph (2) and by
            redesignating paragraphs (3) through (5) as paragraphs (2)
            through (4), respectively; and
                (8) by redesignating the second subsection (f) (relating to
            authorization of appropriations for grants) as subsection (g).
        (j) Telephone Information System.--
                (1) Section 1804 (42 U.S.C. 1395b-2) is amended--
                        (A) by adding at the end of the heading the
                    following: ``; medicare and medigap information'',
                        (B) by inserting ``(a)'' after ``1804.'', and
                        (C) by adding at the end the following new
                    subsection:
        ``(b) The Secretary shall provide information via a toll-free
    telephone number on the programs under this title.''.
                (2) Section 1882(f) (42 U.S.C. 1395ss(f)) is amended by
            adding at the end the following new paragraph:
        ``(3) The Secretary shall provide information via a toll-free
    telephone number on medicare supplemental policies (including the
    relationship of State programs under title XIX to such policies).''.
                (3) Section 1889 is repealed.
        (k) Mailing of Policies.--Section 1882(d)(4) (42 U.S.C.
    1395ss(d)(4)) is amended--
                (1) in subparagraph (D), by striking ``, if such policy''
            and all that follows up to the period at the end, and
                (2) by adding at the end the following new subparagraph:
        ``(E) Subparagraph (A) shall not apply in the case of an issuer who
    mails or causes to be mailed a policy, certificate, or other matter
    solely to comply with the requirements of subsection (q).''.
        (l) Effective Date.--The amendments made by this section shall be
    effective as if included in the enactment of OBRA-1990; except that--
                (1) the amendments made by subsection (d)(1) shall take
            effect on the date of the enactment of this Act, but no penalty
            shall be imposed under section 1882(d)(3)(A) of the Social
            Security Act (for an action occurring after the effective date
            of the amendments made by section 4354 of OBRA-1990 and before
            the date of the enactment of this Act) with respect to the sale
            or issuance of a policy which is not unlawful under section
            1882(d)(3)(A)(i)(II) of the Social Security Act (as amended by
            this section);
                (2) the amendments made by subsection (d)(2)(A) and by
            subparagraphs (A), (B), and (E) of subsection (e)(1) shall be
            effective on the date specified in subsection (m)(4); and
                (3) the amendment made by subsection (g)(2) shall take
            effect on January 1, 1994, and shall apply to individuals who
            attain 65 years of age or older on or after the effective date
            of section 1882(s)(2) of the Social Security Act (and, in the
            case of individuals who attained 65 years of age after such
            effective date and before January 1, 1994, and who were not
            covered under such section before January 1, 1994, the 6-month
            period specified in that section shall begin January 1, 1994).
        (m) Transition Provisions.--
                (1) In general.--If the Secretary of Health and Human
            Services identifies a State as requiring a change to its
            statutes or regulations to conform its regulatory program to
            the changes made by this section, the State regulatory program
            shall not be considered to be out of compliance with the
            requirements of section 1882 of the Social Security Act due
            solely to failure to make such change until the date specified
            in paragraph (4).
                (2) NAIC Standards.--If, within 6 months after the date of
            the enactment of this Act, the National Association of
            Insurance Commissioners (in this subsection referred to as the
            ``NAIC'') modifies its 1991 NAIC Model Regulation (adopted in
            July 1991) to conform to the amendments made by this section
            and to delete from section 15C the exception which begins with
            ``unless'', such modifications shall be considered to be part
            of that Regulation for the purposes of section 1882 of the
            Social Security Act.
                (3) Secretary standards.--If the NAIC does not make the
            modifications described in paragraph (2) within the period
            specified in such paragraph, the Secretary of Health and Human
            Services shall make the modifications described in such
            paragraph and such modifications shall be considered to be part
            of that Regulation for the purposes of section 1882 of the
            Social Security Act.
                (4) Date specified.--
                        (A) In general.--Subject to subparagraph (B), the
                    date specified in this paragraph for a State is the
                    earlier of--
                                (i) the date the State changes its statutes
                            or regulations to conform its regulatory
                            program to the changes made by this section, or
                                (ii) 1 year after the date the NAIC or the
                            Secretary first makes the modifications under
                            paragraph (2) or (3), respectively.
                        (B) Additional legislative action required.--In the
                    case of a State which the Secretary identifies as--
                                (i) requiring State legislation (other than
                            legislation appropriating funds) to conform its
                            regulatory program to the changes made in this
                            section, but
                                (ii) having a legislature which is not
                            scheduled to meet in 1994 in a legislative
                            session in which such legislation may be
                            considered,
                    the date specified in this paragraph is the first day
                    of the first calendar quarter beginning after the close
                    of the first legislative session of the State
                    legislature that begins on or after January 1, 1994.
                    For purposes of the previous sentence, in the case of a
                    State that has a 2-year legislative session, each year
                    of such session shall be deemed to be a separate
                    regular session of the State legislature.

           CHAPTER 5--TREATMENT OF CERTAIN STATE HEALTH CARE PROGRAMS

    SEC. 13581. TREATMENT OF CERTAIN STATE HEALTH CARE PROGRAMS.

        Section 514(b)(5) of the Employee Retirement Income Security Act of
    1974 (29 U.S.C. 1144(b)(5)) is amended to read as follows:
                ``(5)(A) Except as provided in subparagraphs (B) and (C),
            subsection (a) shall not apply to the Hawaii Prepaid Health
            Care Act (Haw. Rev. Stat. Sec. Sec. 393-1 through 393-51).
                ``(B) Nothing in subparagraph (A) shall be construed to
            exempt from subsection (a) any State tax law relating to
            employee benefits plans.
                ``(C) If the Secretary of Labor notifies the Governor of
            the State of Hawaii that as the result of an amendment to the
            Hawaii Prepaid Health Care Act enacted after October 5, 1992--
                        ``(i) the proportion of the population with health
                    care coverage under such Act is less than such
                    proportion on such date, or
                        ``(ii) the level of benefit coverage provided under
                    such Act is less than the actuarial equivalent of such
                    level of coverage on such date,
            subparagraph (A) shall not apply with respect to the
            application of such amendment to such Act after the date of
            such notification.''.

                    Subtitle D--Customs and Trade Provisions

    SEC. 13601. CUSTOMS AND TRADE AGENCY AUTHORIZATIONS FOR FISCAL YEARS
                  1994 AND 1995.

        (a) United States International Trade Commission.--Section
    330(e)(2) of the Tariff Act of 1930 (19 U.S.C. 1330(e)(2)) is amended
    to read as follows:
        ``(2)(A) There are authorized to be appropriated to the Commission
    for necessary expenses (including the rental of conference rooms in the
    District of Columbia and elsewhere) not to exceed the following:
                ``(i) $45,416,000 for fiscal year 1994.
                ``(ii) $45,974,000 for fiscal year 1995.
        ``(B) Not to exceed $2,500 of the amount authorized to be
    appropriated for any fiscal year under subparagraph (A) may be used,
    subject to the approval of the Chairman of the Commission, for
    reception and entertainment expenses.
        ``(C) No part of any sum that is appropriated under the authority
    of subparagraph (A) may be used by the Commission in the making of any
    special study, investigation, or report that is requested by any agency
    of the executive branch unless that agency reimburses the Commission
    for the cost thereof.''.
        (b) United States Customs Service.--Section 301(b) of the Customs
    Procedural Reform and Simplification Act of 1978 (19 U.S.C. 2075(b)) is
    amended to read as follows:
        ``(b) Authorization of Appropriations.--
                ``(1) For noncommercial operations.--There are authorized
            to be appropriated for the salaries and expenses of the Customs
            Service that are incurred in noncommercial operations not to
            exceed the following:
                        ``(A) $540,783,000 for fiscal year 1994.
                        ``(B) $527,000,000 for fiscal year 1995.
                ``(2) For commercial operations.--(A) There are authorized
            to be appropriated for the salaries and expenses of the Customs
            Service that are incurred in commercial operations not less
            than the following:
                        ``(i) $771,036,000 for fiscal year 1994.
                        ``(ii) $748,000,000 for fiscal year 1995.
                ``(B) The monies authorized to be appropriated under
            subparagraph (A) for any fiscal year, except for such sums as
            may be necessary for the salaries and expenses of the Customs
            Service that are incurred in connection with the processing of
            merchandise that is exempt from the fees imposed under section
            13031(a) (9) and (10) of the Consolidated Omnibus Budget
            Reconciliation Act of 1985, shall be appropriated from the
            Customs User Fee Account.
                ``(3) For air and marine interdiction.--There are
            authorized to be appropriated for the operation (including
            salaries and expenses) and maintenance of the air and marine
            interdiction programs of the Customs Service not to exceed the
            following:
                        ``(A) $95,156,000 for fiscal year 1994.
                        ``(B) $128,000,000 for fiscal year 1995.''.
        (c) Office of the United States Trade Representative.--Section
    141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)) is amended to
    read as follows:
        ``(g)(1)(A) There are authorized to be appropriated to the Office
    for the purposes of carrying out its functions not to exceed the
    following:
                ``(i) $20,143,000 for fiscal year 1994.
                ``(ii) $20,419,000 for fiscal year 1995.
        ``(B) Of the amounts authorized to be appropriated under
    subparagraph (A) for any fiscal year--
                ``(i) not to exceed $98,000 may be used for entertainment
            and representation expenses of the Office; and
                ``(ii) not to exceed $2,500,000 shall remain available
            until expended.''.

    SEC. 13602. EXTENSION OF AUTHORITY TO LEVY CUSTOMS USER FEES.

        Section 13031(j)(3) of the Consolidated Omnibus Budget
    Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended by striking
    out ``1995'' and inserting ``1998''.

    SEC. 13603. GENERALIZED SYSTEM OF PREFERENCES.

        (a) Treatment of Countries Formerly Within the Union of Soviet
    Socialist Republics.--The table in section 502(b) of the Trade Act of
    1974 (19 U.S.C. 2462(b)) is amended by striking out ``Union of Soviet
    Socialist Republics''.
        (b) Extension of Duty-Free Treatment Under System.--
                (1) In general.--Section 505(a) of the Trade Act of 1974
            (19 U.S.C. 2465(a)) is amended by striking out ``July 4, 1993''
            and inserting ``September 30, 1994''.
                (2) Retroactive application for certain liquidations and
            reliquidations.--Notwithstanding section 514 of the Tariff Act
            of 1930 or any other provision of law, upon proper request
            filed with the appropriate customs officer within 180 days
            after the date of the enactment of this Act, the entry--
                        (A) of any article to which duty-free treatment
                    under title V of the Trade Act of 1974 would have
                    applied if the entry had been made on July 4, 1993, and
                        (B) that was made after July 4, 1993, and before
                    such date of enactment,
            shall be liquidated or reliquidated as free of duty, and the
            Secretary of the Treasury shall refund any duty paid with
            respect to such entry. As used in this paragraph, the term
            ``entry'' includes a withdrawal from warehouse for consumption.

    SEC. 13604. EXTENSION OF, AND AUTHORIZATION OF APPROPRIATIONS FOR, THE
                  WORKER TRADE ADJUSTMENT ASSISTANCE PROGRAM.

        (a) Extension.--Section 285 of the Trade Act of 1974 (19 U.S.C.
    note preceding 2271) is amended--
                (1) by striking out ``No'' and all that follows thereafter
            down through ``chapter 2, no'' in subsection (b) and inserting
            ``No''; and
                (2) by adding at the end the following new subsection:
        ``(c) No assistance, vouchers, allowances, or other payments may be
    provided under chapter 2 after September 30, 1996.''.
        (b) Authorization of Appropriations.--Section 245 of the Trade Act
    of 1974 (19 U.S.C. 2317) is amended by striking out ``and 1993,'' and
    inserting ``1993, 1994, 1995, and 1996,''.

    SEC. 13605. EXTENSION OF URUGUAY ROUND TRADE AGREEMENT NEGOTIATING AND
                  PROCLAMATION AUTHORITY AND OF ``FAST TRACK'' PROCEDURES
                  TO IMPLEMENTING LEGISLATION.

        Section 1102 of the Omnibus Trade and Competitiveness Act of 1988
    (19 U.S.C. 2902) is amended by inserting at the end the following new
    subsection:
        ``(e) Special Provisions Regarding Uruguay Round Trade
    Negotiations.--
                ``(1) In general.--Notwithstanding the time limitations in
            subsections (a) and (b), if the Uruguay Round of multilateral
            trade negotiations under the auspices of the General Agreement
            on Tariffs and Trade has not resulted in trade agreements by
            May 31, 1993, the President may, during the period after May
            31, 1993, and before April 16, 1994, enter into, under
            subsections (a) and (b), trade agreements resulting from such
            negotiations.
                ``(2) Application of tariff proclamation authority.--No
            proclamation under subsection (a) to carry out the provisions
            regarding tariff barriers of a trade agreement that is entered
            into pursuant to paragraph (1) may take effect before the
            effective date of a bill that implements the provisions
            regarding nontariff barriers of a trade agreement that is
            entered into under such paragraph.
                ``(3) Application of implementing and `fast track'
            procedures.--Section 1103 applies to any trade agreement
            negotiated under subsection (b) pursuant to paragraph (1),
            except that--
                        ``(A) in applying subsection (a)(1)(A) of section
                    1103 to any such agreement, the phrase `at least 120
                    calendar days before the day on which he enters into
                    the trade agreement (but not later than December 15,
                    1993),' shall be substituted for the phrase `at least
                    90 calendar days before the day on which he enters into
                    the trade agreement; and
                        ``(B) no provision of subsection (b) of section
                    1103 other than paragraph (1)(A) applies to any such
                    agreement and in applying such paragraph, `April 16,
                    1994;' shall be substituted for `June 1, 1991;'.
                ``(4) Advisory committee reports.--The report required
            under section 135(e)(1) of the Trade Act of 1974 regarding any
            trade agreement provided for under paragraph (1) shall be
            provided to the President, the Congress, and the United States
            Trade Representative not later than 30 days after the date on
            which the President notifies the Congress under section
            1103(a)(1)(A) of his intention to enter into the agreement (but
            before January 15, 1994).''.

    SEC. 13606. REPEAL OF EAST-WEST TRADE STATISTICS MONITORING SYSTEM.

        (a) Repeal.--Section 410 of the Trade Act of 1974 (19 U.S.C. 2440)
    is repealed.
        (b) Conforming Amendment.--The table of contents for such Act of
    1974 is amended by striking out the following:

    ``Sec. 410. East-West Trade Statistics Monitoring System.''.

                     Subtitle E--Customs Officer Pay Reform

    SEC. 13701. OVERTIME AND PREMIUM PAY FOR CUSTOMS OFFICERS.

        (a) In General.--Section 5 of the Act of February 13, 1911 (19
    U.S.C. 261 and 267) is amended to read as follows:

    ``SEC. 5. OVERTIME AND PREMIUM PAY FOR CUSTOMS OFFICERS.

        ``(a) Overtime Pay.--
                ``(1) In general.--Subject to paragraph (2) and subsection
            (c), a customs officer who is officially assigned to perform
            work in excess of 40 hours in the administrative workweek of
            the officer or in excess of 8 hours in a day shall be
            compensated for that work at an hourly rate of pay that is
            equal to 2 times the hourly rate of the basic pay of the
            officer. For purposes of this paragraph, the hourly rate of
            basic pay for a customs officer does not include any premium
            pay provided for under subsection (b).
                ``(2) Special provisions relating to overtime work on
            callback basis.--
                        ``(A) Minimum duration.--Any work for which
                    compensation is authorized under paragraph (1) and for
                    which the customs officer is required to return to the
                    officer's place of work shall be treated as being not
                    less than 2 hours in duration; but only if such work
                    begins at least 1 hour after the end of any previous
                    regularly scheduled work assignment and ends at least 1
                    hour before the beginning of the following regularly
                    scheduled work assignment.
                        ``(B) Compensation for commuting time.--
                                ``(i) In general.--Except as provided in
                            clause (ii), in addition to the compensation
                            authorized under paragraph (1) for work to
                            which subparagraph (A) applies, the customs
                            officer is entitled to be paid, as compensation
                            for commuting time, an amount equal to 3 times
                            the hourly rate of basic pay of the officer.
                                ``(ii) Exception.--Compensation for
                            commuting time is not payable under clause (i)
                            if the work for which compensation is
                            authorized under paragraph (1)--
                                        ``(I) does not commence within 16
                                    hours of the customs officer's last
                                    regularly scheduled work assignment, or
                                        ``(II) commences within 2 hours of
                                    the next regularly scheduled work
                                    assignment of the customs officer.
        ``(b) Premium Pay for Customs Officers.--
                ``(1) Night work differential.--
                        ``(A) 3 p.m. to midnight shiftwork.--If the
                    majority of the hours of regularly scheduled work of a
                    customs officer occur during the period beginning at 3
                    p.m. and ending at 12 a.m., the officer is entitled to
                    pay for work during such period (except for work to
                    which paragraph (2) or (3) applies) at the officer's
                    hourly rate of basic pay plus premium pay amounting to
                    15 percent of that basic rate.
                        ``(B) 11 p.m. to 8 a.m. shiftwork.--If the majority
                    of the hours of regularly scheduled work of a customs
                    officer occur during the period beginning at 11 p.m.
                    and ending at 8 a.m., the officer is entitled to pay
                    for work during such period (except for work to which
                    paragraph (2) or (3) applies) at the officer's hourly
                    rate of basic pay plus premium pay amounting to 20
                    percent of that basic rate.
                        ``(C) 7:30 p.m. to 3:30 a.m. shiftwork.--If the
                    regularly scheduled work assignment of a customs
                    officer is 7:30 p.m. to 3:30 a.m., the officer is
                    entitled to pay for work during such period (except for
                    work to which paragraph (2) or (3) applies) at the
                    officer's hourly rate of basic pay plus premium pay
                    amounting to 15 percent of that basic rate for the
                    period from 7:30 p.m. to 11:30 p.m. and at the
                    officer's hourly rate of basic pay plus premium pay
                    amounting to 20 percent of that basic rate for the
                    period from 11:30 p.m. to 3:30 a.m.
                ``(2) Sunday differential.--A customs officer who performs
            any regularly scheduled work on a Sunday that is not a holiday
            is entitled to pay for that work at the officer's hourly rate
            of basic pay plus premium pay amounting to 50 percent of that
            basic rate.
                ``(3) Holiday differential.--A customs officer who performs
            any regularly scheduled work on a holiday is entitled to pay
            for that work at the officer's hourly rate of basic pay plus
            premium pay amounting to 100 percent of that basic rate.
                ``(4) Treatment of premium pay.--Premium pay provided for
            under this subsection may not be treated as being overtime pay
            or compensation for any purpose.
        ``(c) Limitations.--
                ``(1) Fiscal year cap.--The aggregate of overtime pay under
            subsection (a) (including commuting compensation under
            subsection (a)(2)(B)) and premium pay under subsection (b) that
            a customs officer may be paid in any fiscal year may not exceed
            $25,000; except that the Commissioner of Customs or his
            designee may waive this limitation in individual cases in order
            to prevent excessive costs or to meet emergency requirements of
            the Customs Service.
                ``(2) Exclusivity of pay under this section.--A customs
            officer who receives overtime pay under subsection (a) or
            premium pay under subsection (b) for time worked may not
            receive pay or other compensation for that work under any other
            provision of law.
        ``(d) Regulations.--The Secretary of the Treasury shall prescribe
    such regulations as are necessary or appropriate to carry out this
    section, including regulations--
                ``(1) to ensure that callback work assignments are
            commensurate with the overtime pay authorized for such work;
            and
                ``(2) to prevent the disproportionate assignment of
            overtime work to customs officers who are near to retirement.
        ``(e) Definitions.--As used in this section:
                ``(1) The term `customs officer' means an individual
            performing those functions specified by regulation by the
            Secretary of the Treasury for a customs inspector or canine
            enforcement officer. Such functions shall be consistent with
            such applicable standards as may be promulgated by the Office
            of Personnel Management.
                ``(2) The term `holiday' means any day designated as a
            holiday under a Federal statute or Executive order.''.
        (b) Conforming Amendments.--
                (1) Section 2 of the Act of June 3, 1944 (19 U.S.C. 1451a),
            is repealed.
                (2) Section 450 of the Tariff Act of 1930 (19 U.S.C. 1450)
            is amended--
                        (A) by striking out ``at night'' in the section
                    heading and inserting ``during overtime hours'';
                        (B) by striking out ``at night'' and inserting
                    ``during overtime hours''; and
                        (C) by inserting ``aircraft,'' immediately before
                    ``vessel''.
        (c) Effective Date.--The amendments made by subsections (a) and (b)
    apply to customs inspectional services provided on or after October 1,
    1993.

    SEC. 13702. FOREIGN LANGUAGE PROFICIENCY AWARDS FOR CUSTOMS OFFICERS.

        Cash awards for foreign language proficiency may, under regulations
    prescribed by the Secretary of the Treasury, be paid to customs
    officers (as referred to in section 5(e)(1) of the Act of February 13,
    1911) to the same extent and in the same manner as would be allowable
    under subchapter III of chapter 45 of title 5, United States Code, with
    respect to law enforcement officers (as defined by section 4521 of such
    title).

    SEC. 13703. APPROPRIATIONS REIMBURSEMENTS FROM THE CUSTOMS USER FEE
                  ACCOUNT.

        Section 13031(f)(3) of the Consolidated Omnibus Budget
    Reconciliation Act of 1985 (19 U.S.C. 58c(f)(3)) is amended--
                (1) by amending clause (i) of subparagraph (A) to read as
            follows: ``(i) in--
                        ``(I) paying overtime compensation under section
                    5(a) of the Act of February 13, 1911,
                        ``(II) paying premium pay under section 5(b) of the
                    Act of February 13, 1911, but the amount for which
                    reimbursement may be made under this subclause may not,
                    for any fiscal year, exceed the difference between the
                    cost of the premium pay for that year calculated under
                    such section 5(b) as amended by section 13701 of the
                    Omnibus Budget Reconciliation Act of 1993 and the cost
                    of such pay calculated under subchapter V of chapter 55
                    of title 5, United States Code,
                        ``(III) paying agency contributions to the Civil
                    Service Retirement and Disability Fund to match
                    deductions from the overtime compensation paid under
                    subclause (I), and
                        ``(IV) providing all preclearance services for
                    which the recipients of such services are not required
                    to reimburse the Secretary of the Treasury, and'';
                (2) by inserting before the flush sentence appearing after
            clause (ii) of subparagraph (A) the following sentence: ``The
            transfer of funds required under subparagraph (C)(iii) has
            priority over reimbursements under this subparagraph to carry
            out subclauses (II), (III), and (IV) of clause (i).'';
                (3) by striking out ``except for costs described in
            subparagraph (A)(i) (I) and (II),'' in subparagraph (B)(i); and
                (4) by amending subparagraph (C)--
                        (A) by striking out ``to fully reimburse
                    inspectional overtime and preclearance costs'' in
                    clause (i) and inserting ``to reimburse costs described
                    in subparagraph (A)(i)''; and
                        (B) by inserting after clause (ii) of subparagraph
                    (C) the following:
                ``(iii) For each fiscal year, the Secretary of the Treasury
            shall calculate the difference between--
                        ``(I) the estimated cost for overtime compensation
                    that would have been incurred during that fiscal year
                    for inspectional services if section 5 of the Act of
                    February 13, 1911 (19 U.S.C. 261 and 267), as in effect
                    before the enactment of section 13701 of the Omnibus
                    Budget Reconciliation Act of 1993, had governed such
                    costs, and
                        ``(II) the actual cost for overtime compensation,
                    premium pay, and agency retirement contributions that
                    is incurred during that fiscal year in regard to such
                    services under section 5 of the Act of February 13,
                    1991, as amended by section 13701 of the Omnibus Budget
                    Reconciliation Act of 1993, and under section 8331(3)
                    of title 5, United States Code, as amended by section
                    13704 of such Act of 1993,
            and shall transfer from the Customs User Fee Account to the
            General Fund of the Treasury an amount equal to the difference
            calculated under this clause, or $18,000,000, whichever amount
            is less. Transfers shall be made under this clause at least
            quarterly and on the basis of estimates to the same extent as
            are reimbursements under subparagraph (B)(iii).''.

    SEC. 13704. TREATMENT OF CERTAIN PAY OF CUSTOMS OFFICERS FOR RETIREMENT
                  PURPOSES.

        (a) In General.--Section 8331(3) of title 5, United States Code, is
    amended--
                (1) by striking out ``and'' at the end of subparagraph (C);
                (2) by striking out the semicolon at the end of
            subparagraph (D) and inserting ``; and'';
                (3) by adding after subparagraph (D) the following:
                        ``(E) with respect to a customs officer (referred
                    to in subsection (e)(1) of section 5 of the Act of
                    February 13, 1911), compensation for overtime
                    inspectional services provided for under subsection (a)
                    of such section 5, but not to exceed 50 percent of any
                    statutory maximum in overtime pay for customs officers
                    which is in effect for the year involved;''; and
                (4) by striking out ``subparagraphs (B), (C), and (D) of
            this paragraph,'' and inserting ``subparagraphs (B), (C), (D),
            and (E) of this paragraph''.
        (b) Effective Date.--The amendments made by subsection (a) take
    effect on the date of the enactment of this Act and apply only with
    respect to service performed on or after such date.

    SEC. 13705. REPORTS.

        (a) Customs User Fee Account Reports.--Subparagraph (D) of section
    13031(f)(3) of the Consolidated Omnibus Budget Reconciliation Act of
    1985 (19 U.S.C. 58c(f)(3)(D)) is amended to read as follows:
                        ``(D) At the close of each fiscal year, the
                    Secretary of the Treasury shall submit a report to the
                    Committee on Finance of the Senate and the Committee on
                    Ways and Means of the House of Representatives--
                                ``(i) containing a detailed accounting of
                            all expenditures from the Customs User Fee
                            Account during such year, including a summary
                            of the expenditures, on a port-by-port basis,
                            for which reimbursement has been provided under
                            subparagraph (A)(ii);
                                ``(ii) containing a listing of all callback
                            assignments of customs officers for which
                            overtime compensation was paid under section
                            5(a) of the Act of February 13, 1911, and that
                            were less than 1 hour in duration; and
                                ``(iii) containing a listing of all customs
                            officers who were paid $25,000 or more under
                            subsections 5(a) and 5(b) of the Act of
                            February 13, 1911, including a listing of the
                            total compensation paid to each of those
                            customs officers under all other statutory
                            authority.''.
        (b) Other Reports.--
                (1) GAO report.--The Comptroller General of the United
            States shall undertake--
                        (A) an evaluation of the appropriateness and
                    efficiency of the customs user fee laws for financing
                    the provision of customs inspectional services; and
                        (B) a study to determine whether cost savings in
                    the provision of overtime inspectional services could
                    be realized by the United States Customs Service
                    through the use of additional inspectors as opposed to
                    continuing the current practice of relying on overtime
                    pay.
            The Comptroller General shall submit a report on the evaluation
            and study required under this subsection to the Committees by
            no later than the 1st anniversary of the date of the enactment
            of this Act.
                (2) Treasury recommendation.--On the day that the President
            submits the budget for the United States Government for fiscal
            year 1995 to the Congress under section 1105(a) of title 31,
            United States Code, the Secretary of the Treasury shall submit
            to the Committees recommended legislative proposals for
            improving the operation of customs user fee laws in financing
            the provision of customs inspectional services.
                (3) Definition of committees.--For purposes of this
            subsection, the term ``Committees'' means the Committee on Ways
            and Means of the House of Representatives and the Committee on
            Finance of the Senate.

                         TITLE XIV--REVENUE PROVISIONS

    SEC. 14001. SHORT TITLE; ETC.

        (a) Short Title.--This title may be cited as the ``Revenue
    Reconciliation Act of 1993''.
        (b) Amendment to 1986 Code.--Except as otherwise expressly
    provided, whenever in this title an amendment or repeal is expressed in
    terms of an amendment to, or repeal of, a section or other provision,
    the reference shall be considered to be made to a section or other
    provision of the Internal Revenue Code of 1986.
        (c) Section 15 Not To Apply.--Except in the case of the amendments
    made by section 14221 (relating to corporate rate increase), no
    amendment made by this title shall be treated as a change in a rate of
    tax for purposes of section 15 of the Internal Revenue Code of 1986.
        (d) Waiver of Estimated Tax Penalties.--No addition to tax shall be
    made under section 6654 or 6655 of the Internal Revenue Code of 1986
    for any period before April 16, 1994 (March 16, 1994, in the case of a
    corporation), with respect to any underpayment to the extent such
    underpayment was created or increased by any provision of this title.
        (e) Table of Contents.--

                         TITLE XIV--REVENUE PROVISIONS

    Sec. 14001. Short title; etc.
                 Subtitle A--Training and Investment Incentives

             Part I--Provisions Relating to Education and Training

    Sec. 14101. Employer-provided educational assistance.
    Sec. 14102. Targeted jobs credit.
                         Pasubpart a--research credites
    Sec. 14111. Permanent extension of research credit.
    Sec. 14112. Modification of fixed base percentage for startup
                       subpart b--capital gain provisions
    Sec. 14113. 50-percent exclusion for gain from certain small business
                                stock.
    Sec. 14114. Rollover of gain from sale of publicly traded securities
                                into specialized small business investment
           subpart c--modifications to minimum tax depreciation rules
    Sec. subpart d--increase in expense treatment for small businesses
    Sec. 14116. Increase in expense treatment for small businesses.
                      Part III--Tax-Exempt Bond Provisions

    Sec. 14121. High-speed intercity rail facility bonds exempt from State
                                volume cap.
    Sec. 14122. Permanent extension of qualified small issue bonds.
       Part IV--Expansion and Simplification of Earned Income Tax Credit

    Sec. 14131. Expansion and simplification of earned income tax credit.
    subpart a--extension of qualified mortgage bonds and low-income housing
                                     credit
    Sec. 14141. Permanent extension of qualified mortgage bonds.
    Sec. 14142. Psubpart b--modification of passive loss rulesit.
    Sec. 14143. Application of passive loss rules to rental real estate
     subpart c--provisions relating to real estate investments by pension
                                     funds
    Sec. 14144. Real estate property acquired by a qualified organization.
    Sec. 14145. Repeal of special treatment of publicly traded
                                partnerships.
    Sec. 14146. Title-holding companies permitted to receive small amounts
                                of unrelated business taxable income.
    Sec. 14147. Exclusion from unrelated business tax of gains from certain
                                property.
    Sec. 14148. Exclusion from unrelated business tax of certain fees and
                                option premiums.
    Sec. 14149. Treatment of pension fund investments in real estate
                      subpart d--discharge of indebtedness
    Sec. 14150. Exclusion from gross income for income from discharge of
                                qualified real property business
    subpart e--increase in recovery period for nonresidential real property
    Sec. 14151. Increase in recovery period for nonresidential real
                                property.
                              Part VI--Luxury Tax

    Sec. 14161. Repeal of luxury excise taxes other than on passenger
                                vehicles.
    Sec. 14162. Exemption from luxury excise tax for certain equipment
                                installed on passenger vehicles for use by
                                disabled individuals.
    Sec. 14163. Tax on diesel fuel used in noncommercial boats.
                            Part VII--Other Changes

    Sec. 14171. Alternative minimum tax treatment of contributions of
                                appreciated property.
    Sec. 14172. Certain transfers to railroad retirement account made
                                permanent.
    Sec. 14173. Temporary extension of deduction for health insurance costs
                                of self-employed individuals.
                         Subtitle B--Revenue Increases

                    Part I-subpart a--rate increasesividuals
    Sec. 14201. Increase in top marginal rate under section 1.
    Sec. 14202. Surtax on high-income taxpayers.
    Sec. 14203. Modifications to alternative minimum tax rates and
                                exemption amounts.
    Sec. 14204. Overall limitation on itemized deductions for high-income
                                taxpayers made permanent.
    Sec. 14205. Phaseout of personal exemption of high-income taxpayers
                                made permanent.
    Sec. 14206. Provisions to prevent conversion of ordinary income to
                          subpart b--other provisions
    Sec. 14207. Repeal of limitation on amount of wages subject to health
                                insurance employment tax.
    Sec. 14208. Top estate and gift tax rates made permanent.
    Sec. 14209. Reduction in deductible portion of business meals and
                                entertainment.
    Sec. 14210. Elimination of deduction for club membership fees.
    Sec. 14211. Disallowance of deduction for certain employee remuneration
                                in excess of $1,000,000.
    Sec. 14212. Reduction in compensation taken into account in determining
                                contributions and benefits under qualified
                                retirement plans.
    Sec. 14213. Modification to deduction for certain moving expenses.
    Sec. 14214. Simplification of individual estimated tax safe harbor
                                based on last year's tax.
    Sec. 14215. Social security and tier 1 railroad retirement benefits.
                    Part II--Provisions Affecting Businesses

    Sec. 14221. Increase in top marginal rate under section 11.
    Sec. 14222. Denial of deduction for lobbying expenses.
    Sec. 14223. Mark to market accounting method for securities dealers.
    Sec. 14224. Clarification of treatment of certain FSLIC financial
                                assistance.
    Sec. 14225. Modification of corporate estimated tax rules.
    Sec. 14226. Limitation on section 936 credit.
    Sec. 14227. Modification to limitation on deduction for certain
                                interest.
     subpart a--current taxation of certain earnings of controlled foreign
                                  corporations
    Sec. 14231. Earnings invested in excess passive assets.
    Sec. 14232. Modification to taxation of investment in United States
                                property.
    Sec.subpart b--allocation of research and experimental expenditures
    Sec. 14234. Allocationsubpart c--other provisionsal expenditures.
    Sec. 14235. Repeal of certain exceptions for working capital.
    Sec. 14236. Modifications of accuracy-related penalty.
    Sec. 14237. Denial of portfolio interest exemption for contingent
                                interest.
    Sec. 14238. Regulations dealing with conduit arrangements.
                   subpart a--energy tax based on btu content
    Sec. 14241. Isubpart b--modifications to tax on diesel fuel
    Sec. 14242. Modifications to tax on diesel fuel.
    Ssubpart c--extension of motor fuel tax rates; increased deposits into
                               highway trust fund
    Sec. 14244. Extension of motor fuel tax rates; increased deposits into
                                highway trust fund.
                         Part V--Compliance Provisions

    Sec. 14251. Reporting required for certain payments to corporations.
    Sec. 14252. Modifications to substantial understatement and return-
                                preparer penalties.
    Sec. 14253. Returns relating to the cancellation of indebtedness by
                                certain financial entities.
                       Part VI--Treatment of Intangibles

    Sec. 14261. Amortization of goodwill and certain other intangibles.
    Sec. 14262. Treatment of certain payments to retired or deceased
                                partner.
                       Part VII--Miscellaneous Provisions

    Sec. 14271. Substantiation requirement for deduction of certain
                                charitable contributions.
    Sec. 14272. Disclosure related to quid pro quo contributions.
    Sec. 14273. Disallowance of interest on certain overpayments of tax.
    Sec. 14274. Denial of deduction relating to travel expenses.
    Sec. 14275. Increase in withholding from supplemental wage payments.
         Subtitle C--Empowerment Zones and Enterprise Communities, Etc.

              Part I--Empowerment Zones and Enterprise Communities

    Sec. 14301. Designation and treatment of empowerment zones and
                                enterprise communities.
    Sec. 14302. Expansion of targeted jobs credit.
    Sec. 14303. Technical and conforming amendments.
    Sec. 14304. Effective date.
      Part II--Credit for Contributions to Certain Community Development
                                  Corporations

    Sec. 14311. Credit for contributions to certain community development
                                corporations.
                          Subtitle D--Other Provisions

                         Part I--Disclosure Provisions

    Sec. 14401. Disclosure of return information for administration of
                                certain veterans programs.
    Sec. 14402. Disclosure of return information to carry out income
                                contingent repayment of student loans.
    Sec. 14403. Use of return information for income verification under
                                certain housing assistance programs.
                          Part II--User Fee Provisions

    Sec. 14411. Fees for applications for alcohol labeling and formula
                                reviews.
    Sec. 14412. Use of Harbor Maintenance Trust Fund amounts for
                                administrative expenses.
    Sec. 14413. Increase in tax on fuel used in commercial transportation
                                on inland waterways.
                          Part III--Public Debt Limit

    Sec. 14421. Increase in public debt limit.
                          Part IV--Vaccine Provisions

    Sec. 14431. Excise tax on certain vaccines made permanent.
    Sec. 14432. Continuation coverage under group health plans of costs of
                                pediatric vaccines.
    Sec. 14433. Childhood Immunization Trust Fund.

                 Subtitle A--Training and Investment Incentives

             PART I--PROVISIONS RELATING TO EDUCATION AND TRAINING

    SEC. 14101. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE.

        (a) Permanent Extension of Exclusion.--
                (1) In general.--Section 127 (relating to educational
            assistance programs) is amended by striking subsection (d) and
            by redesignating subsection (e) as subsection (d).
                (2) Conforming amendment.--Paragraph (2) of section 103(a)
            of the Tax Extension Act of 1991 is hereby repealed.
        (b) Coordination With Section 132.--Paragraph (8) of section 132(i)
    is amended to read as follows:
                ``(8) Application of section to otherwise taxable
            educational or training benefits.--Amounts paid or expenses
            incurred by the employer for education or training provided to
            the employee which are not excludable from gross income under
            section 127 shall be excluded from gross income under this
            section if (and only if) such amounts or expenses are a working
            condition fringe.''
        (c) Effective Dates.--
                (1) Subsection (a).--The amendments made by subsection (a)
            shall apply to taxable years ending after June 30, 1992.
                (2) Subsection (b).--The amendment made by subsection (b)
            shall apply to taxable years beginning after December 31, 1988.
        (d) Transition Rules.--
                (1) Waiver of interest and penalties.--No interest,
            penalty, or addition to tax shall be imposed or required to be
            paid solely by reason of a failure, before the date of the
            enactment of this Act, to treat educational assistance in a
            manner consistent with the provisions of section 103(a) of the
            Tax Extension Act of 1991 (as in effect before the amendments
            made by subsection (a)).
                (2) Special rules for 1992.--
                        (A) Employment taxes.--If--
                                (i) an employer provided an employee with
                            educational assistance during the period
                            beginning on July 1, 1992, and ending on
                            December 31, 1992,
                                (ii) consistent with the provisions of
                            section 103(a) of the Tax Extension Act of 1991
                            (as so in effect), such employer treated such
                            assistance as taxable for purposes of any
                            employment tax and as a result of such
                            treatment there was an increase in taxable
                            wages for purposes of such tax,
                                (iii) on or after the date of the enactment
                            of this Act and before January 1, 1994, such
                            employer pays such employee amounts which are
                            taxable wages for purposes of such tax and
                            which equal or exceed the increase referred to
                            in clause (ii), and
                                (iv) such employee did not treat such
                            assistance for purposes of such employment tax
                            (or for purposes of chapter 1 of the Internal
                            Revenue Code of 1986 in the case of employment
                            tax imposed by chapter 24 of such Code) in a
                            manner inconsistent with the employer's
                            treatment of such assistance,
                    the amendments made by subsection (a) shall not apply
                    to such educational assistance for purposes of such
                    employment tax, but, for purposes of applying such
                    employment tax (and for purposes of the reporting
                    requirements imposed by chapter 61 of such Code), the
                    taxable wages of the employee referred to in clause
                    (iii) shall be reduced by the amount of the increase
                    referred to in clause (ii). For purposes of clause
                    (iv), an employer may assume that the employee treated
                    the assistance in a manner consistent with the
                    employer's treatment unless such employer has actual
                    knowledge to the contrary.
                        (B) Reporting requirement.--An employer shall
                    separately report the amounts of any reduction under
                    subparagraph (A) as nontaxable income on any returns or
                    receipts required under chapter 61 of such Code for
                    calendar year 1993.
                        (C) Definitions.--For purposes of this paragraph--
                                (i) Employment tax.--The term ``employment
                            tax'' means any tax imposed by subtitle C of
                            such Code.
                                (ii) Taxable wages.--The term ``taxable
                            wages''means--
                                        (I) wages (as defined in section
                                    3121(a) of such Code) in the case of
                                    the taxes imposed by chapter 21 of such
                                    Code,
                                        (II) compensation (as defined in
                                    section 3231(e) of such Code) in the
                                    case of the taxes imposed by chapter 22
                                    of such Code,
                                        (III) wages (as defined in section
                                    3306(b) of such Code) in the case of
                                    the taxes imposed by chapter 23 of such
                                    Code, and
                                        (IV) wages (as defined in section
                                    3401(a) of such Code) in the case of
                                    the taxes imposed by chapter 24 of such
                                    Code.
                (3) Income tax treatment.--If--
                        (A) subparagraph (A) of paragraph (2) applies to
                    any educational assistance referred to in such
                    paragraph provided to any employee, and
                        (B) such employee included such assistance in his
                    taxable income for purposes of the tax imposed by
                    chapter 1 of such Code,
            the amendments made by subsection (a) shall not apply to such
            assistance for purposes of such chapter 1, but the amount
            included in the gross income of such employee by reason of
            wages received from the employer referred to in subparagraph
            (A) of paragraph (2) during 1993 shall be reduced in the manner
            provided in such subparagraph (A).

    SEC. 14102. TARGETED JOBS CREDIT.

        (a) Permanent Extension of Credit.--
                (1) In general.--Subsection (c) of section 51 (relating to
            amount of targeted jobs credit) is amended by striking
            paragraph (4).
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to individuals who begin work for the employer
            after June 30, 1992.
        (b) Credit for Participants in Approved School-To-Work Programs.--
                (1) In general.--Subparagraph (I) of section 51(d)(1)
            (defining members of targeted group) is amended to read as
            follows:
                                        ``(I) a qualified participant in an
                                    approved school-to-work program, or''.
                (2) Qualified participant in an approved school-to-work
            program.--Paragraph (10) of section 51(d) is amended to read as
            follows:
                ``(10) Qualified participant in an approved school-to-work
            program defined.--
                        ``(A) In general.--Except as otherwise provided in
                    this paragraph, the term `qualified participant in an
                    approved school-to-work program' means any individual
                    who is certified under an approved school-to-work
                    program as--
                                ``(i) having attained age 16 but not having
                            attained age 21, and
                                ``(ii) being enrolled in and making
                            satisfactory progress in completing such
                            approved school-to-work program.
                        ``(B) Limitation on number of participants.--
                                ``(i) In general.--Any individual who
                            begins work for the employer during any
                            calendar year shall not be treated as a
                            qualified participant in an approved school-to-
                            work program unless the individual is certified
                            under such program as an eligible participant
                            with respect to such calendar year.
                                ``(ii) Limitation on certifications.--The
                            aggregate number of individuals certified under
                            an approved school-to-work program as eligible
                            participants with respect to any calendar year
                            shall not exceed the portion of the national
                            school-to-work program limitation for such
                            calendar year allocated under subsection (l) to
                            such program.
                        ``(C) Approved school-to-work program.--The term
                    `approved school-to-work program' means any program
                    which--
                                ``(i) is a planned program of structured
                            job training designed to integrate academic
                            instruction provided by an educational
                            institution and work-based learning provided by
                            an employer, and
                                ``(ii) is approved by the Secretaries of
                            Labor and Education.
                        ``(D) Limitation on amount of wages taken into
                    account.--For purposes of applying this subpart to
                    wages paid or incurred to any qualified participant in
                    an approved school-to-work program, subsection (b)(3)
                    shall be applied by substituting `$3,000' for `$6,000'.
                        ``(E) Wages.--In the case of remuneration
                    attributable to services performed while the individual
                    meets the requirements of subparagraph (A), wages, and
                    unemployment insurance wages, shall be determined
                    without regard to section 3306(c)(10)(C).''
                (3) Overall limitations.--Section 51 is amended by adding
            at the end thereof the following new subsection:
        ``(l) Overall Limitation on Approved School-To-Work Program
    Participants.--
                ``(1) In general.--For purposes of subsection (d)(10), the
            national school-to-work program limitation--
                        ``(A) for calendar year 1994 is 125,000,
                        ``(B) for calendar year 1995 is 140,000,
                        ``(C) for calendar year 1996 is 160,000,
                        ``(D) for calendar year 1997 is 180,000, and
                        ``(E) for calendar year 1998 and any subsequent
                    calendar year is 200,000.
                ``(2) Allocation to states.--The national school-to-work
            program limitation for any calendar year shall be allocated
            among the States in proportion to the number of their eligible
            participants that are estimated to be served in approved
            school-to-work programs for that year. Such estimates shall be
            published by the Secretaries of Labor and Education before the
            beginning of the calendar year to which the allocation applies.
                ``(3) Allocation to approved school-to-work programs.--The
            portion of the national school-to-work program limitation for
            any calendar year which is allocated to any State shall be
            allocated among the approved school-to-work programs in such
            State in such manner as the Secretaries of Labor and Education
            shall prescribe.''
                (4) Effective date.--The amendments made by this subsection
            shall apply in the case of individuals who begin work for the
            employer after December 31, 1993.

                         PART II--INVESTMENT INCENTIVES

                           Subpart A--Research Credit

    SEC. 14111. PERMANENT EXTENSION OF RESEARCH CREDIT.

        (a) In General.--Section 41 (relating to credit for increasing
    research activities) is amended by striking subsection (h).
        (b) Conforming Amendment.--Paragraph (1) of section 28(b) is
    amended by striking subparagraph (D).
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years ending after June 30, 1992.

    SEC. 14112. MODIFICATION OF FIXED BASE PERCENTAGE FOR STARTUP
                  COMPANIES.

        (a) General Rule.--Clause (ii) of section 41(c)(3)(B) is amended to
    read as follows:
                                ``(ii) Fixed-base percentage.--In a case to
                            which this subparagraph applies, the fixed-base
                            percentage is--
                                        ``(I) 3 percent for each of the
                                    taxpayer's 1st 5 taxable years
                                    beginning after December 31, 1993, for
                                    which the taxpayer has qualified
                                    research expenses,
                                        ``(II) in the case of the
                                    taxpayer's 6th such taxable year, 1/6
                                    of the percentage which the aggregate
                                    qualified research expenses of the
                                    taxpayer for the 4th and 5th such
                                    taxable years is of the aggregate gross
                                    receipts of the taxpayer for such
                                    years,
                                        ``(III) in the case of the
                                    taxpayer's 7th such taxable year, 1/3
                                    of the percentage which the aggregate
                                    qualified research expenses of the
                                    taxpayer for the 5th and 6th such
                                    taxable years is of the aggregate gross
                                    receipts of the taxpayer for such
                                    years,
                                        ``(IV) in the case of the
                                    taxpayer's 8th such taxable year, 1/2
                                    of the percentage which the aggregate
                                    qualified research expenses of the
                                    taxpayer for the 5th, 6th, and 7th such
                                    taxable years is of the aggregate gross
                                    receipts of the taxpayer for such
                                    years,
                                        ``(V) in the case of the taxpayer's
                                    9th such taxable year, 2/3 of the
                                    percentage which the aggregate
                                    qualified research expenses of the
                                    taxpayer for the 5th, 6th, 7th, and 8th
                                    such taxable years is of the aggregate
                                    gross receipts of the taxpayer for such
                                    years,
                                        ``(VI) in the case of the
                                    taxpayer's 10th such taxable year, 5/6
                                    of the percentage which the aggregate
                                    qualified research expenses of the
                                    taxpayer for the 5th, 6th, 7th, 8th,
                                    and 9th such taxable years is of the
                                    aggregate gross receipts of the
                                    taxpayer for such years, and
                                        ``(VII) for taxable years
                                    thereafter, the percentage which the
                                    aggregate qualified research expenses
                                    for any 5 taxable years selected by the
                                    taxpayer from among the 5th through the
                                    10th such taxable years is of the
                                    aggregate gross receipts of the
                                    taxpayer for such selected years.''.
        (b) Conforming Amendments.--
                (1) Clause (iii) of section 41(c)(3)(B) is amended by
            striking ``clause (i)'' and inserting ``clauses (i) and (ii)''.
                (2) Subparagraph (D) of section 41(c)(3) is amended by
            striking ``subparagraph (A)'' and inserting ``subparagraphs (A)
            and (B)(ii)''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1993.

                       Subpart B--Capital Gain Provisions

    SEC. 14113. 50-PERCENT EXCLUSION FOR GAIN FROM CERTAIN SMALL BUSINESS
                  STOCK.

        (a) General Rule.--Part I of subchapter P of chapter 1 (relating to
    capital gains and losses) is amended by adding at the end thereof the
    following new section:

    ``SEC. 1202. 50-PERCENT EXCLUSION FOR GAIN FROM CERTAIN SMALL BUSINESS
                  STOCK.

        ``(a) 50-Percent Exclusion.--In the case of a taxpayer other than a
    corporation, gross income shall not include 50 percent of any gain from
    the sale or exchange of qualified small business stock held for more
    than 5 years.
        ``(b) Per-Issuer Limitation on Taxpayer's Eligible Gain.--
                ``(1) In general.--If the taxpayer has eligible gain for
            the taxable year from 1 or more dispositions of stock issued by
            any corporation, the aggregate amount of such gain from
            dispositions of stock issued by such corporation which may be
            taken into account under subsection (a) for the taxable year
            shall not exceed the greater of--
                        ``(A) $10,000,000 reduced by the aggregate amount
                    of eligible gain taken into account under subsection
                    (a) for prior taxable years and attributable to
                    dispositions of stock issued by such corporation, or
                        ``(B) 10 times the aggregate adjusted bases of
                    qualified small business stock issued by such
                    corporation and disposed of by the taxpayer during the
                    taxable year.
            For purposes of subparagraph (B), the adjusted basis of any
            stock shall be determined without regard to any addition to
            basis after the date on which such stock was originally issued.
                ``(2) Eligible gain.--For purposes of this subsection, the
            term `eligible gain' means any gain from the sale or exchange
            of qualified small business stock held for more than 5 years.
                ``(3) Treatment of married individuals.--
                        ``(A) Separate returns.--In the case of a separate
                    return by a married individual, paragraph (1)(A) shall
                    be applied by substituting `$5,000,000' for
                    `$10,000,000'.
                        ``(B) Allocation of exclusion.--In the case of any
                    joint return, the amount of gain taken into account
                    under subsection (a) shall be allocated equally between
                    the spouses for purposes of applying this subsection to
                    subsequent taxable years.
                        ``(C) Marital status.--For purposes of this
                    subsection, marital status shall be determined under
                    section 7703.
        ``(c) Qualified Small Business Stock.--For purposes of this
    section--
                ``(1) In general.--Except as otherwise provided in this
            section, the term `qualified small business stock' means any
            stock in a C corporation which is originally issued after
            December 31, 1992, if--
                        ``(A) as of the date of issuance, such corporation
                    is a qualified small business, and
                        ``(B) except as provided in subsections (f) and
                    (h), such stock is acquired by the taxpayer at its
                    original issue (directly or through an underwriter)--
                                ``(i) in exchange for money or other
                            property (not including stock), or
                                ``(ii) as compensation for services
                            provided to such corporation (other than
                            services performed as an underwriter of such
                            stock).
                ``(2) Active business requirement; etc.--
                        ``(A) In general.--Stock in a corporation shall not
                    be treated as qualified small business stock unless,
                    during substantially all of the taxpayer's holding
                    period for such stock, such corporation meets the
                    active business requirements of subsection (e) and such
                    corporation is a C corporation.
                        ``(B) Special rule for certain small business
                    investment companies.--
                                ``(i) Waiver of active business
                            requirement.--Notwithstanding any provision of
                            subsection (e), a corporation shall be treated
                            as meeting the active business requirements of
                            such subsection for any period during which
                            such corporation qualifies as a specialized
                            small business investment company.
                                ``(ii) Specialized small business
                            investment company.--For purposes of clause
                            (i), the term `specialized small business
                            investment company' means any eligible
                            corporation (as defined in subsection (e)(4))
                            which is licensed to operate under section
                            301(d) of the Small Business Investment Act of
                            1958 (as in effect on May 13, 1993).
                ``(3) Certain purchases by corporation of its own stock.--
                        ``(A) Redemptions from taxpayer or related
                    person.--Stock acquired by the taxpayer shall not be
                    treated as qualified small business stock if, at any
                    time during the 4-year period beginning on the date 2
                    years before the issuance of such stock, the
                    corporation issuing such stock purchased (directly or
                    indirectly) any of its stock from the taxpayer or from
                    a person related (within the meaning of section 267(b)
                    or 707(b)) to the taxpayer.
                        ``(B) Significant redemptions.--Stock issued by a
                    corporation shall not be treated as qualified business
                    stock if, during the 2-year period beginning on the
                    date 1 year before the issuance of such stock, such
                    corporation made 1 or more purchases of its stock with
                    an aggregate value (as of the time of the respective
                    purchases) exceeding 5 percent of the aggregate value
                    of all of its stock as of the beginning of such 2-year
                    period.
                        ``(C) Acquisitions by related persons.--For
                    purposes of this paragraph, the purchase by any person
                    related (within the meaning of section 267(b) or
                    707(b)) to the issuing corporation of any stock in the
                    issuing corporation shall be treated as a purchase by
                    the issuing corporation.
        ``(d) Qualified Small Business.--For purposes of this section--
                ``(1) In general.--The term `qualified small business'
            means any domestic corporation which is a C corporation if--
                        ``(A) the aggregate capitalization of such
                    corporation (or any predecessor thereof) at all times
                    on or after January 1, 1993, and before the issuance
                    did not exceed $50,000,000,
                        ``(B) the aggregate capitalization of such
                    corporation immediately after the issuance (determined
                    by taking into account amounts received in the
                    issuance) does not exceed $50,000,000, and
                        ``(C) such corporation agrees to submit such
                    reports to the Secretary and to shareholders as the
                    Secretary may require to carry out the purposes of this
                    section.
                ``(2) Aggregate capitalization.--For purposes of paragraph
            (1), the term `aggregate capitalization' means the excess of--
                        ``(A) the amount of cash and the aggregate adjusted
                    bases of other property held by the corporation, over
                        ``(B) the aggregate amount of the short-term
                    indebtedness of the corporation.
            For purposes of the preceding sentence, the term `short-term
            indebtedness' means any indebtedness which, when incurred, did
            not have a term in excess of 1 year.
                ``(3) Look-thru in case of subsidiaries.--In determining
            whether a corporation meets the requirements of this
            subsection--
                        ``(A) stock and debt of any subsidiary (as defined
                    in subsection (e)(5)(C)) held by such corporation shall
                    be disregarded, and
                        ``(B) such corporation shall be treated as holding
                    its ratable share of the assets of such subsidiary and
                    as being liable for its ratable share of the
                    indebtedness of such subsidiary.
        ``(e) Active Business Requirement.--
                ``(1) In general.--For purposes of subsection (c)(2), the
            requirements of this subsection are met by a corporation for
            any period if during such period--
                        ``(A) at least 80 percent (by value) of the assets
                    of such corporation are used by such corporation in the
                    active conduct of a qualified trade or business, and
                        ``(B) such corporation is an eligible corporation.
                ``(2) Special rule for certain activities.--For purposes of
            paragraph (1), if, in connection with any future qualified
            trade or business, a corporation is engaged in--
                        ``(A) start-up activities described in section
                    195(c)(1)(A),
                        ``(B) activities resulting in the payment or
                    incurring of expenditures which may be treated as
                    research and experimental expenditures under section
                    174, or
                        ``(C) activities with respect to in-house research
                    expenses described in section 41(b)(4),
            assets used in such activities shall be treated as used in the
            active conduct of a qualified trade or business. Any
            determination under this paragraph shall be made without regard
            to whether a corporation has any gross income from such
            activities at the time of the determination.
                ``(3) Qualified trade or business.--For purposes of this
            subsection, the term `qualified trade or business' means any
            trade or business other than--
                        ``(A) any trade or business involving the
                    performance of services in the fields of health, law,
                    engineering, architecture, accounting, actuarial
                    science, performing arts, consulting, athletics,
                    financial services, brokerage services, or any other
                    trade or business where the principal asset of such
                    trade or business is the reputation or skill of 1 or
                    more of its employees,
                        ``(B) any banking, insurance, financing, leasing,
                    investing, or similar business,
                        ``(C) any farming business (including the business
                    of raising or harvesting trees),
                        ``(D) any business involving the production or
                    extraction of products of a character with respect to
                    which a deduction is allowable under section 613 or
                    613A, and
                        ``(E) any business of operating a hotel, motel,
                    restaurant, or similar business.
                ``(4) Eligible corporation.--For purposes of this
            subsection, the term `eligible corporation' means any domestic
            corporation; except that such term shall not include--
                        ``(A) a DISC or former DISC,
                        ``(B) a corporation with respect to which an
                    election under section 936 is in effect,
                        ``(C) a regulated investment company, real estate
                    investment trust, or REMIC, and
                        ``(D) a cooperative.
                ``(5) Stock in other corporations.--
                        ``(A) Look-thru in case of subsidiaries.--For
                    purposes of this subsection, stock and debt in any
                    subsidiary corporation shall be disregarded and the
                    parent corporation shall be deemed to own its ratable
                    share of the subsidiary's assets, and to conduct its
                    ratable share of the subsidiary's activities.
                        ``(B) Portfolio stock or securities.--A corporation
                    shall be treated as failing to meet the requirements of
                    paragraph (1) for any period during which more than 10
                    percent of the value of its assets (in excess of
                    liabilities) consists of stock or securities in other
                    corporations which are not subsidiaries of such
                    corporation (other than assets described in paragraph
                    (6)).
                        ``(C) Subsidiary.--For purposes of this paragraph,
                    a corporation shall be considered a subsidiary if the
                    parent owns more than 50 percent of the combined voting
                    power of all classes of stock entitled to vote, or more
                    than 50 percent in value of all outstanding stock, of
                    such corporation.
                ``(6) Working capital.--For purposes of paragraph (1)(A),
            any assets which--
                        ``(A) are held as a part of the reasonably required
                    working capital needs of a qualified trade or business
                    of the corporation, or
                        ``(B) are held for investment and are reasonably
                    expected to be used within 2 years to finance future
                    research and experimentation in a qualified trade or
                    business or increases in working capital needs of a
                    qualified trade or business,
            shall be treated as used in the active conduct of a qualified
            trade or business. For periods after the corporation has been
            in existence for at least 2 years, in no event may more than 50
            percent of the assets of the corporation qualify as used in the
            active conduct of a qualified trade or business by reason of
            this paragraph.
                ``(7) Maximum real estate holdings.--A corporation shall
            not be treated as meeting the requirements of paragraph (1) for
            any period during which more than 10 percent of the total value
            of its assets consists of real property which is not used in
            the active conduct of a qualified trade or business. For
            purposes of the preceding sentence, the ownership of, dealing
            in, or renting of real property shall not be treated as the
            active conduct of a qualified trade or business.
                ``(8) Computer software royalties.--For purposes of
            paragraph (1), rights to computer software which produces
            active business computer software royalties (within the meaning
            of section 543(d)(1)) shall be treated as an asset used in the
            active conduct of a trade or business.
        ``(f) Stock Acquired on Conversion of Preferred Stock.--If any
    stock in a corporation is acquired solely through the conversion of
    other stock in such corporation which is qualified small business stock
    in the hands of the taxpayer--
                ``(1) the stock so acquired shall be treated as qualified
            small business stock in the hands of the taxpayer, and
                ``(2) the stock so acquired shall be treated as having been
            held during the period during which the converted stock was
            held.
        ``(g) Treatment of Pass-Thru Entities.--
                ``(1) In general.--If any amount included in gross income
            by reason of holding an interest in a pass-thru entity meets
            the requirements of paragraph (2)--
                        ``(A) such amount shall be treated as gain
                    described in subsection (a), and
                        ``(B) for purposes of applying subsection (b), such
                    amount shall be treated as gain from a disposition of
                    stock in the corporation issuing the stock disposed of
                    by the pass-thru entity and the taxpayer's
                    proportionate share of the adjusted basis of the pass-
                    thru entity in such stock shall be taken into account.
                ``(2) Requirements.--An amount meets the requirements of
            this paragraph if--
                        ``(A) such amount is attributable to gain on the
                    sale or exchange by the pass-thru entity of stock which
                    is qualified small business stock in the hands of such
                    entity (determined by treating such entity as an
                    individual) and which was held by such entity for more
                    than 5 years, and
                        ``(B) such amount is includible in the gross income
                    of the taxpayer by reason of the holding of an interest
                    in such entity which was held by the taxpayer on the
                    date on which such pass-thru entity acquired such stock
                    and at all times thereafter before the disposition of
                    such stock by such pass-thru entity.
                ``(3) Limitation based on interest originally held by
            taxpayer.--Paragraph (1) shall not apply to any amount to the
            extent such amount exceeds the amount to which paragraph (1)
            would have applied if such amount were determined by reference
            to the interest the taxpayer held in the pass-thru entity on
            the date the qualified small business stock was acquired.
                ``(4) Pass-thru entity.--For purposes of this subsection,
            the term `pass-thru entity' means--
                        ``(A) any partnership,
                        ``(B) any S corporation,
                        ``(C) any regulated investment company, and
                        ``(D) any common trust fund.
        ``(h) Certain Tax-Free and Other Transfers.--For purposes of this
    section--
                ``(1) In general.--In the case of a transfer described in
            paragraph (2), the transferee shall be treated as--
                        ``(A) having acquired such stock in the same manner
                    as the transferor, and
                        ``(B) having held such stock during any continuous
                    period immediately preceding the transfer during which
                    it was held (or treated as held under this subsection)
                    by the transferor.
                ``(2) Description of transfers.--A transfer is described in
            this subsection if such transfer is--
                        ``(A) by gift,
                        ``(B) at death, or
                        ``(C) from a partnership to a partner of stock with
                    respect to which requirements similar to the
                    requirements of subsection (g) are met at the time of
                    the transfer (without regard to the 5-year holding
                    period requirement).
                ``(3) Certain rules made applicable.--Rules similar to the
            rules of section 1244(d)(2) shall apply for purposes of this
            section.
                ``(4) Incorporations and reorganizations involving
            nonqualified stock.--
                        ``(A) In general.--In the case of a transaction
                    described in section 351 or a reorganization described
                    in section 368, if qualified small business stock is
                    exchanged for other stock which would not qualify as
                    qualified small business stock but for this
                    subparagraph, such other stock shall be treated as
                    qualified small business stock acquired on the date on
                    which the exchanged stock was acquired.
                        ``(B) Limitation.--This section shall apply to gain
                    from the sale or exchange of stock treated as qualified
                    small business stock by reason of subparagraph (A) only
                    to the extent of the gain which would have been
                    recognized at the time of the transfer described in
                    subparagraph (A) if section 351 or 368 had not applied
                    at such time.
                        ``(C) Successive application.--For purposes of this
                    paragraph, stock treated as qualified small business
                    stock under subparagraph (A) shall be so treated for
                    subsequent transactions or reorganizations, except that
                    the limitation of subparagraph (B) shall be applied as
                    of the time of the first transfer to which subparagraph
                    (A) applied.
                        ``(D) Control test.--Except in the case of a
                    transaction described in section 368, this paragraph
                    shall apply only if, immediately after the transaction,
                    the corporation issuing the stock owns directly or
                    indirectly stock representing control (within the
                    meaning of section 368(c)) of the corporation whose
                    stock was exchanged.
        ``(i) Basis Rules.--For purposes of this section--
                ``(1) Stock exchanged for property.--In the case where the
            taxpayer transfers property (other than money or stock) to a
            corporation in exchange for stock in such corporation--
                        ``(A) such stock shall be treated as having been
                    acquired by the taxpayer on the date of such exchange,
                    and
                        ``(B) the basis of such stock in the hands of the
                    taxpayer shall in no event be less than the fair market
                    value of the property exchanged.
                ``(2) Treatment of contributions to capital.--If the
            adjusted basis of any qualified small business stock is
            adjusted by reason of any contribution to capital after the
            date on which such stock was originally issued, in determining
            the amount of the adjustment by reason of such contribution,
            the basis of the contributed property shall in no event be
            treated as less than its fair market value on the date of the
            contribution.
        ``(j) Treatment of Certain Short Positions.--
                ``(1) In general.--If the taxpayer has an offsetting short
            position with respect to any qualified small business stock,
            subsection (a) shall not apply to any gain from the sale or
            exchange of such stock unless--
                        ``(A) such stock was held by the taxpayer for more
                    than 5 years as of the first day on which there was
                    such a short position, and
                        ``(B) the taxpayer elects to recognize gain as if
                    such stock were sold on such first day for its fair
                    market value.
                ``(2) Offsetting short position.--For purposes of paragraph
            (1), the taxpayer shall be treated as having an offsetting
            short position with respect to any qualified small business
            stock if--
                        ``(A) the taxpayer has made a short sale of
                    substantially identical property,
                        ``(B) the taxpayer has acquired an option to sell
                    substantially identical property at a fixed price, or
                        ``(C) to the extent provided in regulations, the
                    taxpayer has entered into any other transaction which
                    substantially reduces the risk of loss from holding
                    such qualified small business stock.
            For purposes of the preceding sentence, any reference to the
            taxpayer shall be treated as including a reference to any
            person who is related (within the meaning of section 267(b) or
            707(b)) to the taxpayer.
        ``(k) Regulations.--The Secretary shall prescribe such regulations
    as may be appropriate to carry out the purposes of this section,
    including regulations to prevent the avoidance of the purposes of this
    section through split-ups, shell corporations, partnerships, or
    otherwise.''
        (b) One-Half of Exclusion Treated as Preference for Minimum Tax.--
                (1) In general.--Subsection (a) of section 57 (relating to
            items of tax preference) is amended by adding at the end
            thereof the following new paragraph:
                ``(8) Exclusion for gains on sale of certain small business
            stock.--An amount equal to one-half of the amount excluded from
            gross income for the taxable year under section 1202.''
                (2) Conforming amendment.--Subclause (II) of section
            53(d)(1)(B)(ii) is amended by striking ``and (6)'' and
            inserting ``(6), and (8)''.
        (c) Penalty for Failure To Comply With Reporting Requirements.--
    Section 6652 is amended by inserting before the last subsection thereof
    the following new subsection:
        ``(k) Failure To Make Reports Required Under Section 1202.--In the
    case of a failure to make a report required under section 1202(d)(1)(C)
    which contains the information required by such section on the date
    prescribed therefor (determined with regard to any extension of time
    for filing), there shall be paid (on notice and demand by the Secretary
    and in the same manner as tax) by the person failing to make such
    report, an amount equal to $50 for each report with respect to which
    there was such a failure. In the case of any failure due to negligence
    or intentional disregard, the preceding sentence shall be applied by
    substituting `$100' for `$50'. In the case of a report covering periods
    in 2 or more years, the penalty determined under preceding provisions
    of this subsection shall be multiplied by the number of such years.''
        (d) Conforming Amendments.--
                (1)(A) Section 172(d)(2) (relating to modifications with
            respect to net operating loss deduction) is amended to read as
            follows:
                ``(2) Capital gains and losses of taxpayers other than
            corporations.--In the case of a taxpayer other than a
            corporation--
                        ``(A) the amount deductible on account of losses
                    from sales or exchanges of capital assets shall not
                    exceed the amount includable on account of gains from
                    sales or exchanges of capital assets; and
                        ``(B) the exclusion provided by section 1202 shall
                    not be allowed.''
                (B) Subparagraph (B) of section 172(d)(4) is amended by
            inserting ``, (2)(B),'' after ``paragraph (1)''.
                (2) Paragraph (4) of section 642(c) is amended to read as
            follows:
                ``(4) Adjustments.--To the extent that the amount otherwise
            allowable as a deduction under this subsection consists of gain
            described in section 1202(a), proper adjustment shall be made
            for any exclusion allowable to the estate or trust under
            section 1202. In the case of a trust, the deduction allowed by
            this subsection shall be subject to section 681 (relating to
            unrelated business income).''
                (3) Paragraph (3) of section 643(a) is amended by adding at
            the end thereof the following new sentence: ``The exclusion
            under section 1202 shall not be taken into account.''.
                (4) Paragraph (4) of section 691(c) is amended by striking
            ``1201, and 1211'' and inserting ``1201, 1202, and 1211''.
                (5) The second sentence of paragraph (2) of section 871(a)
            is amended by inserting ``such gains and losses shall be
            determined without regard to section 1202 and'' after ``except
            that''.
                (6) The table of sections for part I of subchapter P of
            chapter 1 is amended by adding after the item relating to
            section 1201 the following new item:

                                  ``Sec. 1202. 50-percent exclusion for
                                            gain from certain small
                                            business stock.''
        (e) Effective Date.--The amendments made by this section shall
    apply to stock issued after December 31, 1992.

    SEC. 14114. ROLLOVER OF GAIN FROM SALE OF PUBLICLY TRADED SECURITIES
                  INTO SPECIALIZED SMALL BUSINESS INVESTMENT COMPANIES.

        (a) In General.--Part III of subchapter O of chapter 1 (relating to
    common nontaxable exchanges) is amended by adding at the end the
    following new section:

    ``SEC. 1044. ROLLOVER OF PUBLICLY TRADED SECURITIES GAIN INTO
                  SPECIALIZED SMALL BUSINESS INVESTMENT COMPANIES.

        ``(a) Nonrecognition of Gain.--In the case of the sale of any
    publicly traded securities with respect to which the taxpayer elects
    the application of this section, gain from such sale shall be
    recognized only to the extent that the amount realized on such sale
    exceeds--
                ``(1) the cost of any common stock or partnership interest
            in a specialized small business investment company purchased by
            the taxpayer during the 60-day period beginning on the date of
            such sale, reduced by
                ``(2) any portion of such cost previously taken into
            account under this section.
    This section shall not apply to any gain which is treated as ordinary
    income for purposes of this subtitle.
        ``(b) Limitations.--
                ``(1) Limitation on individuals.--In the case of an
            individual, the amount of gain which may be excluded under
            subsection (a) for any taxable year shall not exceed the lesser
            of--
                        ``(A) $50,000, or
                        ``(B) $500,000, reduced by the amount of gain
                    excluded under subsection (a) for all preceding taxable
                    years.
                ``(2) Limitation on c corporations.--In the case of a C
            corporation, the amount of gain which may be excluded under
            subsection (a) for any taxable year shall not exceed the lesser
            of--
                        ``(A) $250,000, or
                        ``(B) $1,000,000, reduced by the amount of gain
                    excluded under subsection (a) for all preceding taxable
                    years.
                ``(3) Special rules for married individuals.--For purposes
            of this subsection--
                        ``(A) Separate returns.--In the case of a separate
                    return by a married individual, paragraph (1) shall be
                    applied by substituting `$25,000' for `$50,000' and
                    `$250,000' for `$500,000'.
                        ``(B) Allocation of gain.--In the case of any joint
                    return, the amount of gain excluded under subsection
                    (a) for any taxable year shall be allocated equally
                    between the spouses for purposes of applying this
                    subsection to subsequent taxable years.
                        ``(C) Marital status.--For purposes of this
                    subsection, marital status shall be determined under
                    section 7703.
                ``(4) Special rules for c corporation.--For purposes of
            this subsection--
                        ``(A) all corporations which are members of the
                    same controlled group of corporations (within the
                    meaning of section 52(a)) shall be treated as 1
                    taxpayer, and
                        ``(B) any gain excluded under subsection (a) by a
                    predecessor of any C corporation shall be treated as
                    having been excluded by such C corporation.
        ``(c) Definitions and Special Rules.--For purposes of this
    section--
                ``(1) Publicly traded securities.--The term `publicly
            traded securities' means securities which are traded on an
            established securities market.
                ``(2) Purchase.--The term `purchase' has the meaning given
            such term by section 1043(b)(4).
                ``(3) Specialized small business investment company.--The
            term `specialized small business investment company' means any
            partnership or corporation which is licensed by the Small
            Business Administration under section 301(d) of the Small
            Business Investment Act of 1958 (as in effect on May 13, 1993).
                ``(4) Certain entities not eligible.--This section shall
            not apply to any estate, trust, partnership, or S corporation.
        ``(d) Basis Adjustments.--If gain from any sale is not recognized
    by reason of subsection (a), such gain shall be applied to reduce (in
    the order acquired) the basis for determining gain or loss of any
    common stock or partnership interest in any specialized small business
    investment company which is purchased by the taxpayer during the 60-day
    period described in subsection (a). This subsection shall not apply for
    purposes of section 1202.''
        (b) Conforming Amendment.--Paragraph (24) of section 1016(a) is
    amended--
                (1) by striking ``section 1043'' and inserting ``section
            1043 or 1044'', and
                (2) by striking ``section 1043(c)'' and inserting ``section
            1043(c) or 1044(d), as the case may be''.
        (c) Clerical Amendment.--The table of sections for part III of
    subchapter O of chapter 1 is amended by adding at the end the following
    new item:

                                  ``Sec. 1044. Rollover of publicly traded
                                            securities gain into
                                            specialized small business
                                            investment companies.''
        (d) Effective Date.--The amendments made by this section shall
    apply to sales on and after the date of the enactment of this Act, in
    taxable years ending on and after such date.

           Subpart C--Modifications To Minimum Tax Depreciation Rules

    SEC. 14115. MODIFICATION TO MINIMUM TAX DEPRECIATION RULES.

        (a) General Rule.--Paragraph (1) of section 56(a) (relating to
    depreciation) 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) Treatment of certain personal property placed
                    in service after 1993.--
                                ``(i) In general.--In the case of any
                            property to which this subparagraph applies,
                            the depreciation deduction allowable under
                            section 167 shall be determined as provided in
                            section 168(a), except that the method of
                            depreciation used shall be--
                                        ``(I) the 120 percent declining
                                    balance method switching to the
                                    straight line method for the 1st
                                    taxable year for which using the
                                    straight line method with respect to
                                    the adjusted basis as of the beginning
                                    of the year will yield a higher
                                    allowance, or
                                        ``(II) the straight line method in
                                    the case of property for which the
                                    applicable depreciation method under
                                    section 168(a) is the straight line
                                    method.
                                ``(ii) Property to which subparagraph
                            applies.--This subparagraph shall apply to any
                            tangible property placed in service after
                            December 31, 1993, except that this
                            subparagraph shall not apply to--
                                        ``(I) any residential rental
                                    property or nonresidential real
                                    property (within the meaning of section
                                    168(e)), and
                                        ``(II) any other property for which
                                    the depreciation deduction provided by
                                    section 167(a) for purposes of the
                                    regular tax is computed under the
                                    alternative depreciation system of
                                    section 168(g).
                                ``(iii) Coordination with subparagraph
                            (a).--Subparagraph (A) shall not apply to any
                            property to which this subparagraph applies.''
        (b) Elimination of ACE Depreciation Adjustment.--Clause (i) of
    section 56(g)(4)(A) (relating to depreciation adjustments for computing
    adjusted current earnings) is amended by adding at the end thereof the
    following new sentence: ``The preceding sentence shall not apply to any
    property to which subsection (a)(1)(B) applies, and the depreciation
    deduction with respect to such property shall be determined under the
    rules of subsection (a)(1)(B).''.
        (c) Conforming Amendments.--
                (1) Paragraph (2) of section 168(b) is amended to read as
            follows:
                ``(2) Special rule for declining balance method in certain
            cases.--
                        ``(A) 150 percent method for certain property.--
                    Paragraph (1) shall be applied by substituting `150
                    percent' for `200 percent' in the case of--
                                ``(i) any 15-year or 20-year property, or
                                ``(ii) any property used in a farming
                            business (within the meaning of section
                            263A(e)(4)).
                        ``(B) Election to use minimum tax method.--In the
                    case of any property (other than property described in
                    paragraph (3)) with respect to which the taxpayer
                    elects under paragraph (5) to have the provisions of
                    this subparagraph apply, paragraph (1) shall be applied
                    by substituting `120 percent' for `200 percent' (and
                    subparagraph (A) of this paragraph shall not apply).''
                (2) Paragraph (5) of section 168(b) is amended by striking
            ``paragraph (2)(C)'' and inserting ``paragraph (2)(B)''.
                (3) Subsection (c) of section 168 is amended--
                        (A) by striking paragraph (2), and
                        (B) by striking so much of such subsection as
                    precedes the table contained in paragraph (1) and
                    inserting the following:
        ``(c) Applicable Recovery Period.--For purposes of this section,
    the applicable recovery period shall be determined in accordance with
    the following table:''.
        (d) Effective Dates.--
                (1) In general.--Except as provided in paragraph (2), the
            amendments made by this section shall apply to property placed
            in service after December 31, 1993.
                (2) Coordination with transitional rules.--The amendments
            made by this section shall not apply to any property to which
            paragraph (1) of section 56(a) of the Internal Revenue Code of
            1986 does not apply by reason of subparagraph (D)(i) thereof
            (as redesignated by subsection (a) of this section).

         Subpart D--Increase in Expense Treatment for Small Businesses

    SEC. 14116. INCREASE IN EXPENSE TREATMENT FOR SMALL BUSINESSES.

        (a) General Rule.--Paragraph (1) of section 179(b) (relating to
    dollar limitation) is amended by striking ``$10,000'' and inserting
    ``$25,000''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to taxable years beginning after December 31, 1992.

                      PART III--TAX-EXEMPT BOND PROVISIONS

    SEC. 14121. HIGH-SPEED INTERCITY RAIL FACILITY BONDS EXEMPT FROM STATE
                  VOLUME CAP.

        (a) In General.--Paragraph (4) of section 146(g) (relating to
    exemption for certain bonds) is amended by striking ``75 percent of''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to bonds issued after December 31, 1993.

    SEC. 14122. PERMANENT EXTENSION OF QUALIFIED SMALL ISSUE BONDS.

        (a) In General.--Subparagraph (B) of section 144(a)(12) is amended
    to read as follows:
                                ``(B) Bonds issued to finance manufacturing
                            facilities and farm property.--Subparagraph (A)
                            shall not apply to any bond issued as part of
                            an issue 95 percent or more of the net proceeds
                            of which are to be used to provide--
                                ``(i) any manufacturing facility, or
                                ``(ii) any land or property in accordance
                            with section 147(c)(2).''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to bonds issued after June 30, 1992.

       PART IV--EXPANSION AND SIMPLIFICATION OF EARNED INCOME TAX CREDIT

    SEC. 14131. EXPANSION AND SIMPLIFICATION OF EARNED INCOME TAX CREDIT.

        (a) General Rule.--Section 32 (relating to earned income credit) is
    amended by striking subsections (a) and (b) and inserting the
    following:
        ``(a) Allowance of Credit.--
                ``(1) In general.--In the case of an eligible individual,
            there shall be allowed as a credit against the tax imposed by
            this subtitle for the taxable year an amount equal to the
            credit percentage of so much of the taxpayer's earned income
            for the taxable year as does not exceed the earned income
            amount.
                ``(2) Limitation.--The amount of the credit allowable to a
            taxpayer under paragraph (1) for any taxable year shall not
            exceed the excess (if any) of--
                        ``(A) the credit percentage of the earned income
                    amount, over
                        ``(B) the phaseout percentage of so much of the
                    adjusted gross income (or, if greater, the earned
                    income) of the taxpayer for the taxable year as exceeds
                    the phaseout amount.
        ``(b) Percentages and Amounts.--For purposes of subsection (a)--
                ``(1) Percentages.--The credit percentage and the phaseout
            percentage shall be determined as follows:
                        ``(A) In general.--In the case of taxable years
                    beginning after 1994:

                     In the case of an eligible
                          individual with:            The credit percentage is:        The phaseout percentage is:

                    1 qualifying child..........  34.37...........................                16.16
                    2 or more qualifying
                     children...................  39.66...........................                19.83
                    No qualifying children......  7.65............................                7.65

                        ``(B) Transitional percentages.--In the case of a
                    taxable year beginning in 1994:

                            In the case of an
                           eligible individual        The credit percentage is:        The phaseout percentage is:
                                  with:

                        1 qualifying child......  26.60...........................                16.16
                        2 or more qualifying
                         children...............  31.59...........................                15.79
                        No qualifying children..  7.65............................                7.65

                ``(2) Amounts.--The earned income amount and the phaseout
            amount shall be determined as follows:
                        ``(A) In general.--In the case of taxable years
                    beginning after 1994:

                     In the case of an eligible
                          individual with:          The earned income amount is:         The phaseout amount is:

                    1 qualifying child..........  $6,000..........................               $11,000
                    2 or more qualifying
                     children...................  $8,500..........................               $11,000
                    No qualifying children......  $4,000..........................               $5,000

                        ``(B) Transitional amounts.--In the case of a
                    taxable year beginning in 1994:

                            In the case of an
                           eligible individual      The earned income amount is:         The phaseout amount is:
                                  with:

                        1 qualifying child......  $7,750..........................              $11,000
                        2 or more qualifying
                         children...............  $8,500..........................              $11,000
                        No qualifying children..  $4,000..........................              $5,000''.

        (b) Eligible Individual.--Subparagraph (A) of section 32(c)(1)
    (defining eligible individual) is amended to read as follows:
                        ``(A) In general.--The term `eligible individual'
                    means--
                                ``(i) any individual who has a qualifying
                            child for the taxable year, or
                                ``(ii) any other individual who does not
                            have a qualifying child for the taxable year,
                            if--
                                        ``(I) such individual's principal
                                    place of abode is in the United States
                                    for more than one-half of such taxable
                                    year,
                                        ``(II) such individual (or, if the
                                    individual is married, the individual's
                                    spouse) has attained age 22 before the
                                    close of the taxable year, and
                                        ``(III) such individual (or, if the
                                    individual is married, the individual's
                                    spouse) is not a dependent for whom a
                                    deduction is allowable under section
                                    151 to another taxpayer for any taxable
                                    year beginning in the same calendar
                                    year as such taxable year.''
        (c) Inflation Adjustments.--Section 32(i) (relating to inflation
    adjustments) is amended--
                (1) by striking paragraphs (1) and (2) and inserting the
            following new paragraph:
                ``(1) In general.--In the case of any taxable year
            beginning after 1994, each dollar amount contained in
            subsection (b)(2)(A) shall be increased by an amount equal to--
                        ``(A) such dollar amount, multiplied by
                        ``(B) 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
                    1993' for `calendar year 1992'.'', and
                (2) by redesignating paragraph (3) as paragraph (2).
        (d) Conforming Amendments.--
                (1) Subparagraph (D) of section 32(c)(3) is amended--
                        (A) by striking ``clause (i) or (ii)'' in clause
                    (iii) and inserting ``clause (i)'',
                        (B) by striking clause (ii), and
                        (C) by redesignating clause (iii) as clause (ii).
                (2) Paragraph (3) of section 162(l) is amended to read as
            follows:
                ``(3) Coordination with medical deduction.--Any amount paid
            by a taxpayer for insurance to which paragraph (1) applies
            shall not be taken into account in computing the amount
            allowable to the taxpayer as a deduction under section
            213(a).''
                (3) Section 213 is amended by striking subsection (f).
                (4) Subsection (b) of section 3507 is amended by
            redesignating paragraphs (2) and (3) as paragraphs (3) and (4),
            respectively, and by inserting after paragraph (1) the
            following new paragraph:
                ``(2) certifies that the employee has 1 or more qualifying
            children (within the meaning of section 32(c)(3)) for such
            taxable year,''.
                (5) Subparagraph (B) of section 3507(c)(2) is amended by
            striking clauses (i) and (ii) and inserting the following:
                                ``(i) of not more than the credit
                            percentage in effect under section 32(b)(1) for
                            an eligible individual with 1 qualifying child
                            and with earned income not in excess of the
                            earned income amount in effect under section
                            32(b)(2) for such an eligible individual, which
                                ``(ii) phases out at the phaseout
                            percentage in effect under section 32(b)(1) for
                            such an eligible individual between the
                            phaseout amount in effect under section
                            32(b)(2) for such an eligible individual and
                            the amount of earned income at which the credit
                            under section 32(a) phases out for such an
                            eligible individual, or''.
        (e) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1993.

                PART V--INCENTIVES FOR INVESTMENT IN REAL ESTATE

    Subpart A--Extension of Qualified Mortgage Bonds and Low-Income Housing
                                     Credit

    SEC. 14141. PERMANENT EXTENSION OF QUALIFIED MORTGAGE BONDS.

        (a) In General.--Paragraph (1) of section 143(a) (defining
    qualified mortgage bond) is amended to read as follows:
                ``(1) Qualified mortgage bond defined.--For purposes of
            this title, the term `qualified mortgage bond' means a bond
            which is issued as part of a qualified mortgage issue.''
        (b) Mortgage Credit Certificates.--Section 25 is amended by
    striking subsection (h) and by redesignating subsections (i) and (j) as
    subsections (h) and (i), respectively.
        (c) Effective Dates.--
                (1) Bonds.--The amendment made by subsection (a) shall
            apply to bonds issued after June 30, 1992.
                (2) Certificates.--The amendment made by subsection (b)
            shall apply to elections for periods after June 30, 1992.

    SEC. 14142. PERMANENT EXTENSION OF LOW-INCOME HOUSING CREDIT.

        (a) In General.--Section 42 (relating to low-income housing credit)
    is amended by striking subsection (o).
        (b) HOME Assistance Not To Result In Certain Buildings Being
    Federally Subsidized.--Paragraph (2) of section 42(i) (relating to
    determination of whether building is federally subsidized) is amended
    by adding at the end thereof the following new subparagraph:
                        ``(E) Buildings receiving home assistance.--
                    Assistance provided under the HOME Investment
                    Partnerships Act (as in effect on the date of the
                    enactment of this subparagraph) with respect to any
                    building shall not be taken under subparagraph (D) if
                    40 percent or more of the residential units in the
                    building are occupied by individuals whose income is 50
                    percent or less of area median gross income. Subsection
                    (d)(5)(C) shall not apply to any building to which the
                    preceding sentence applies.''.
        (c) Effective Dates.--
                (1) The amendment made by subsection (a) shall apply to
            periods after June 30, 1992.
                (2) The amendment made by subsection (b) shall apply to
            periods after the date of the enactment of this Act.

                 Subpart B--Modification of Passive Loss Rules

    SEC. 14143. APPLICATION OF PASSIVE LOSS RULES TO RENTAL REAL ESTATE
                  ACTIVITIES.

        (a) Rental Real Estate Activities of Persons in Real Property
    Business Not Automatically Treated as Passive Activities.--Subsection
    (c) of section 469 (defining passive activity) is amended by adding at
    the end thereof the following new paragraph:
                ``(7) Special rules for taxpayers in real property
            business--
                        ``(A) In general.--If this paragraph applies to any
                    taxpayer for a taxable year--
                                ``(i) paragraph (2) shall not apply to any
                            rental real estate activity of such taxpayer
                            for such taxable year, and
                                ``(ii) this section shall be applied as if
                            each interest of the taxpayer in rental real
                            estate were a separate activity.
                    Notwithstanding clause (ii), a taxpayer may elect to
                    treat all interests in rental real estate as one
                    activity. Nothing in the preceding provisions of this
                    subparagraph shall be construed as affecting the
                    determination of whether the taxpayer materially
                    participates with respect to any interest in a limited
                    partnership as a limited partner.
                        ``(B) Taxpayers to whom paragraph applies.--This
                    paragraph shall apply to a taxpayer for a taxable year
                    if more than one-half of the personal services
                    performed in trades or businesses by the taxpayer
                    during such taxable year are performed in real property
                    trades or businesses in which the taxpayer materially
                    participates.
                        ``(C) Real property trade or business.--For
                    purposes of this paragraph, the term `real property
                    trade or business' means any real property development,
                    redevelopment, construction, reconstruction,
                    acquisition, conversion, rental, operation, management,
                    leasing, or brokerage trade or business.
                        ``(D) Special rules for subparagraph (b).--
                                ``(i) Closely held c corporations.--In the
                            case of a closely held C corporation, the
                            requirements of subparagraph (B) shall be
                            treated as met for any taxable year if more
                            than 50 percent of the gross receipts of such
                            corporation for such taxable year are derived
                            from real property trades or businesses in
                            which the corporation materially participates.
                                ``(ii) Personal services as an employee.--
                            For purposes of subparagraph (B), personal
                            services performed as an employee shall not be
                            treated as performed in real property trades or
                            businesses. The preceding sentence shall not
                            apply if such employee is a 5-percent owner (as
                            defined in section 416(i)(1)(B)) in the
                            employer.''
        (b) Conforming Amendments.--
                (1) Paragraph (2) of section 469(c) is amended by striking
            ``The'' and inserting ``Except as provided in paragraph (7),
            the''.
                (2) Clause (iv) of section 469(i)(3)(E) is amended by
            inserting ``or any loss allowable by reason of subsection
            (c)(7)'' after ``loss''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1993.

     Subpart C--Provisions Relating to Real Estate Investments by Pension
                                     Funds

    SEC. 14144. REAL ESTATE PROPERTY ACQUIRED BY A QUALIFIED ORGANIZATION.

        (a) Modifications of Exceptions.--Paragraph (9) of section 514(c)
    (relating to real property acquired by a qualified organization) is
    amended by adding at the end thereof the following new subparagraphs:
                        ``(G) Special rules for purposes of the
                    exceptions.--Except as otherwise provided by
                    regulations--
                                ``(i) Small leases disregarded.--For
                            purposes of clauses (iii) and (iv) of
                            subparagraph (B), a lease to a person described
                            in such clause (iii) or (iv) shall be
                            disregarded if no more than 25 percent of the
                            leasable floor space in a building (or complex
                            of buildings) is covered by the lease and if
                            the lease is on commercially reasonable terms.
                                ``(ii) Commercially reasonable financing.--
                            Clause (v) of subparagraph (B) shall not apply
                            if the financing is on commercially reasonable
                            terms.
                        ``(H) Qualifying sales by financial institutions.--
                                ``(i) In general.--In the case of a
                            qualifying sale by a financial institution,
                            except as provided in regulations, clauses (i)
                            and (ii) of subparagraph (B) shall not apply
                            with respect to financing provided by such
                            institution for such sale.
                                ``(ii) Qualifying sale.--For purposes of
                            this clause, there is a qualifying sale by a
                            financial institution if--
                                        ``(I) a qualified organization
                                    acquires property described in clause
                                    (iii) from a financial institution and
                                    any gain recognized by the financial
                                    institution with respect to the
                                    property is ordinary income,
                                        ``(II) the stated principal amount
                                    of the financing provided by the
                                    financial institution does not exceed
                                    the amount of the outstanding
                                    indebtedness (including accrued but
                                    unpaid interest) of the financial
                                    institution with respect to the
                                    property described in clause (iii)
                                    immediately before the acquisition
                                    referred to in clause (iii) or (v),
                                    whichever is applicable, and
                                        ``(III) the present value
                                    (determined as of the time of the sale
                                    and by using the applicable Federal
                                    rate determined under section 1274(d))
                                    of the maximum amount payable pursuant
                                    to the financing that is determined by
                                    reference to the revenue, income, or
                                    profits derived from the property
                                    cannot exceed 30 percent of the total
                                    purchase price of the property
                                    (including the contingent payments).
                                ``(iii) Property to which subparagraph
                            applies.--Property is described in this clause
                            if such property is foreclosure property, or is
                            real property which--
                                        ``(I) was acquired by the qualified
                                    organization from a financial
                                    institution which is in conservatorship
                                    or receivership, or from the
                                    conservator or receiver of such an
                                    institution, and
                                        ``(II) was held by the financial
                                    institution at the time it entered into
                                    conservatorship or receivership.
                                ``(iv) Financial institution.--For purposes
                            of this subparagraph, the term `financial
                            institution' means--
                                        ``(I) any financial institution
                                    described in section 581 or 591(a),
                                        ``(II) any other corporation which
                                    is a direct or indirect subsidiary of
                                    an institution referred to in subclause
                                    (I) but only if, by virtue of being
                                    affiliated with such institution, such
                                    other corporation is subject to
                                    supervision and examination by a
                                    Federal or State agency which regulates
                                    institutions referred to in subclause
                                    (I), and
                                        ``(III) any person acting as a
                                    conservator or receiver of an entity
                                    referred to in subclause (I) or (II)
                                    (or any government agency or
                                    corporation succeeding to the rights or
                                    interest of such person).
                                ``(v) Foreclosure property.--For purposes
                            of this subparagraph, the term `foreclosure
                            property' means any real property acquired by
                            the financial institution as the result of
                            having bid on such property at foreclosure, or
                            by operation of an agreement or process of law,
                            after there was a default (or a default was
                            imminent) on indebtedness which such property
                            secured.''.
        (b) Conforming Amendment.--Paragraph (9) of section 514(c) is
    amended--
                (1) by adding the following new sentence at the end of
            subparagraph (A): ``For purposes of this paragraph, an interest
            in a mortgage shall in no event be treated as real property.'',
            and
                (2) by striking the last sentence of subparagraph (B).
        (c) Effective Dates.--
                (1) In general.--The amendments made by this section shall
            apply to acquisitions on or after January 1, 1994.
                (2) Small leases.--The provisions of section
            514(c)(9)(G)(i) of the Internal Revenue Code of 1986 shall, in
            addition to any leases to which the provisions apply by reason
            of paragraph (1), apply to leases entered into on or after
            January 1, 1994.

    SEC. 14145. REPEAL OF SPECIAL TREATMENT OF PUBLICLY TREATED
                  PARTNERSHIPS.

        (a) General Rule.--Subsection (c) of section 512 is amended--
                (1) by striking paragraph (2),
                (2) by redesignating paragraph (3) as paragraph (2), and
                (3) by striking ``paragraph (1) or (2)'' in paragraph (2)
            (as so redesignated) and inserting ``paragraph (1)''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to partnership years beginning on or after January 1, 1994.

    SEC. 14146. TITLE-HOLDING COMPANIES PERMITTED TO RECEIVE SMALL AMOUNTS
                  OF UNRELATED BUSINESS TAXABLE INCOME.

        (a) General Rule.--Paragraph (25) of section 501(c) is amended by
    adding at the end thereof the following new subparagraph:
                        ``(G)(i) An organization shall not be treated as
                    failing to be described in this paragraph merely by
                    reason of the receipt of any otherwise disqualifying
                    income which is incidentally derived from the holding
                    of real property.
                        ``(ii) Clause (i) shall not apply if the amount of
                    gross income described in such clause exceeds 10
                    percent of the organization's gross income for the
                    taxable year unless the organization establishes to the
                    satisfaction of the Secretary that the receipt of gross
                    income described in clause (i) in excess of such
                    limitation was inadvertent and reasonable steps are
                    being taken to correct the circumstances giving rise to
                    such income.''
        (b) Conforming Amendment.--Paragraph (2) of section 501(c) is
    amended by adding at the end thereof the following new sentence:
    ``Rules similar to the rules of subparagraph (G) of paragraph (25)
    shall apply for purposes of this paragraph.''
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning on or after January 1, 1994.

    SEC. 14147. EXCLUSION FROM UNRELATED BUSINESS TAX OF GAINS FROM CERTAIN
                  PROPERTY.

        (a) General Rule.--Subsection (b) of section 512 (relating to
    modifications) is amended by adding at the end thereof the following
    new paragraph:
                ``(16)(A) Notwithstanding paragraph (5)(B), there shall be
            excluded all gains or losses from the sale, exchange, or other
            disposition of any real property described in subparagraph (B)
            if--
                        ``(i) such property was acquired by the
                    organization from--
                                ``(I) a financial institution described in
                            section 581 or 591(a) which is in
                            conservatorship or receivership, or
                                ``(II) the conservator or receiver of such
                            an institution (or any government agency or
                            corporation succeeding to the rights or
                            interests of the conservator or receiver),
                        ``(ii) such property is designated by the
                    organization within the 9-month period beginning on the
                    date of its acquisition as property held for sale,
                    except that not more than one-half (by value determined
                    as of such date) of property acquired in a single
                    transaction may be so designated,
                        ``(iii) such sale, exchange, or disposition occurs
                    before the later of--
                                ``(I) the date which is 30 months after the
                            date of the acquisition of such property, or
                                ``(II) the date specified by the Secretary
                            in order to assure an orderly disposition of
                            property held by persons described in
                            subparagraph (A), and
                        ``(iv) while such property was held by the
                    organization, the aggregate expenditures on
                    improvements and development activities included in the
                    basis of the property are (or were) not in excess of 20
                    percent of the net selling price of such property.
                ``(B) Property is described in this subparagraph if it is
            real property which--
                        ``(i) was held by the financial institution at the
                    time it entered into conservatorship or receivership,
                    or
                        ``(ii) was foreclosure property (as defined in
                    section 514(c)(9)(H)(v)) which secured indebtedness
                    held by the financial institution at such time.
            For purposes of this subparagraph, real property includes an
            interest in a mortgage.''
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to property acquired on or after January 1, 1994.

    SEC. 14148. EXCLUSION FROM UNRELATED BUSINESS TAX OF CERTAIN FEES AND
                  OPTION PREMIUMS.

        (a) Loan Commitment Fees.--Paragraph (1) of section 512(b)
    (relating to modifications) is amended by inserting ``amounts received
    or accrued as consideration for entering into agreements to make
    loans,'' before ``and annuities''.
        (b) Option Premiums.--The second sentence of section 512(b)(5) is
    amended--
                (1) by striking ``all gains on'' and inserting ``all gains
            or losses recognized, in connection with the organization's
            investment activities, from'',
                (2) by striking ``, written by the organization in
            connection with its investment activities,'' and
                (3) by inserting ``or real property and all gains or losses
            from the forfeiture of good-faith deposits (that are consistent
            with established business practice) for the purchase, sale, or
            lease of real property in connection with the organization's
            investment activities'' before the period.
        (c) Effective Date.--The amendments made by this section shall
    apply to amounts received on or after January 1, 1994.

    SEC. 14149. TREATMENT OF PENSION FUND INVESTMENTS IN REAL ESTATE
                  INVESTMENT TRUSTS.

        (a) General Rule.--Subsection (h) of section 856 (relating to
    closely held determinations) is amended by adding at the end thereof
    the following new paragraph:
                ``(3) Treatment of trusts described in section 401(a).--
                        ``(A) Look-thru treatment.--
                                ``(i) In general.--Except as provided in
                            clause (ii), in determining whether the stock
                            ownership requirement of section 542(a)(2) is
                            met for purposes of paragraph (1)(A), any stock
                            held by a qualified trust shall be treated as
                            held directly by its beneficiaries in
                            proportion to their actuarial interests in such
                            trust and shall not be treated as held by such
                            trust.
                                ``(ii) Certain related trusts not
                            eligible.--Clause (i) shall not apply to any
                            qualified trust if one or more disqualified
                            persons (as defined in section 4975(e)(2),
                            without regard to subparagraphs (B) and (I)
                            thereof) with respect to such qualified trust
                            hold in the aggregate 5 percent or more in
                            value of the interests in the real estate
                            investment trust and such real estate
                            investment trust has accumulated earnings and
                            profits attributable to any period for which it
                            did not qualify as a real estate investment
                            trust.
                        ``(B) Coordination with personal holding company
                    rules.--If any entity qualifies as a real estate
                    investment trust for any taxable year by reason of
                    subparagraph (A), such entity shall not be treated as a
                    personal holding company for such taxable year for
                    purposes of part II of subchapter G of this chapter.
                        ``(C) Treatment for purposes of unrelated business
                    tax.--If any qualified trust holds more than 10 percent
                    (by value) of the interests in any pension-held REIT at
                    any time during a taxable year, the trust shall be
                    treated as having for such taxable year gross income
                    from an unrelated trade or business in an amount which
                    bears the same ratio to the aggregate dividends paid
                    (or treated as paid) by the REIT to the trust for the
                    taxable year of the REIT with or within which the
                    taxable year of the trust ends (the `REIT year') as--
                                ``(i) the gross income (less direct
                            expenses related thereto) of the REIT for the
                            REIT year from unrelated trades or businesses
                            (determined as if the REIT were a qualified
                            trust), bears to
                                ``(ii) the gross income (less direct
                            expenses related thereto) of the REIT for the
                            REIT year.
                    This subparagraph shall apply only if the ratio
                    determined under the preceding sentence is at least 5
                    percent.
                        ``(D) Pension-held reit.--The purposes of
                    subparagraph (C)--
                                ``(i) In general.--A real estate investment
                            trust is a pension-held REIT if such trust
                            would not have qualified as a real estate
                            investment trust but for the provisions of this
                            paragraph and if such trust is predominantly
                            held by qualified trusts.
                                ``(ii) Predominantly held.--For purposes of
                            clause (i), a real estate investment trust is
                            predominantly held by qualified trusts if--
                                        ``(I) at least 1 qualified trust
                                    holds more than 25 percent (by value)
                                    of the interests in such real estate
                                    investment trust, or
                                        ``(II) 1 or more qualified trusts
                                    (each of whom own more than 10 percent
                                    by value of the interests in such real
                                    estate investment trust) hold in the
                                    aggregate more than 50 percent (by
                                    value) of the interests in such real
                                    estate investment trust.
                        ``(E) Qualified trust.--For purposes of this
                    paragraph, the term `qualified trust' means any trust
                    described in section 401(a) and exempt from tax under
                    section 501(a).''
        (b) Effective Date.--The amendment made by this section shall apply
    to taxable years beginning after December 31, 1993.

                      Subpart D--Discharge of Indebtedness

    SEC. 14150. EXCLUSION FROM GROSS INCOME FOR INCOME FROM DISCHARGE OF
                  QUALIFIED REAL PROPERTY BUSINESS INDEBTEDNESS.

        (a) In General.--Paragraph (1) of section 108(a) (relating to
    income from discharge of indebtedness) is amended by striking ``or'' at
    the end of subparagraph (B), by striking the period at the end of
    subparagraph (C) and inserting ``, or'', and by adding at the end the
    following new subparagraph:
                ``(D) in the case of a taxpayer other than a C corporation,
            the indebtedness discharged is qualified real property business
            indebtedness.''
        (b) Qualified Real Property Business Indebtedness.--Section 108 is
    amended by inserting after subsection (b) the following new subsection:
        ``(c) Treatment of Discharge of Qualified Real Property Business
    Indebtedness.--
                ``(1) Basis reduction.--
                        ``(A) In general.--The amount excluded from gross
                    income under subparagraph (D) of subsection (a)(1)
                    shall be applied to reduce the basis of the depreciable
                    real property of the taxpayer.
                        ``(B) Cross reference.--For provisions making the
                    reduction described in subparagraph (A), see section
                    1017.
                ``(2) Limitations.--
                        ``(A) Indebtedness in excess of value.--The amount
                    excluded under subparagraph (D) of subsection (a)(1)
                    with respect to any qualified real property business
                    indebtedness shall not exceed the excess (if any) of--
                                ``(i) the outstanding principal amount of
                            such indebtedness (immediately before the
                            discharge), over
                                ``(ii) the fair market value of the real
                            property described in paragraph (3)(A) (as of
                            such time), reduced by the outstanding
                            principal amount of any other qualified real
                            property business indebtedness secured by such
                            property (as of such time).
                        ``(B) Overall limitation.--The amount excluded
                    under subparagraph (D) of subsection (a)(1) shall not
                    exceed the aggregate adjusted bases of depreciable real
                    property (determined after any reductions under
                    subsections (b) and (g)) held by the taxpayer
                    immediately before the discharge (other than
                    depreciable real property acquired in contemplation of
                    such discharge).
                ``(3) Qualified real property business indebtedness.--The
            term `qualified real property business indebtedness' means
            indebtedness which--
                        ``(A) was incurred or assumed by the taxpayer in
                    connection with real property used in a trade or
                    business and is secured by such real property,
                        ``(B) was incurred or assumed before January 1,
                    1993, or if incurred or assumed on or after such date,
                    is qualified acquisition indebtedness, and
                        ``(C) with respect to which such taxpayer makes an
                    election to have this paragraph apply.
            Such term shall not include qualified farm indebtedness.
            Indebtedness under subparagraph (B) shall include indebtedness
            resulting from the refinancing of indebtedness under
            subparagraph (B) (or this sentence), but only to the extent it
            does not exceed the amount of the indebtedness being
            refinanced.
                ``(4) Qualified acquisition indebtedness.--For purposes of
            paragraph (3)(B), the term `qualified acquisition indebtedness'
            means, with respect to any real property described in paragraph
            (3)(A), indebtedness incurred or assumed to acquire, construct,
            reconstruct, or substantially improve such property.
                ``(5) Regulations.--The Secretary shall issue such
            regulations as are necessary to carry out this subsection,
            including regulations preventing the abuse of this subsection
            through cross-collateralization or other means.''
        (c) Technical Amendments.--
                (1) Subparagraph (A) of section 108(a)(2) is amended by
            striking ``and (C)'' and inserting ``, (C), and (D)''.
                (2) Subparagraph (B) of section 108(a)(2) is amended to
            read as follows:
                        ``(B) Insolvency exclusion takes precedence over
                    qualified farm exclusion and qualified real property
                    business exclusion.--Subparagraphs (C) and (D) of
                    paragraph (1) shall not apply to a discharge to the
                    extent the taxpayer is insolvent.''
                (3) Subsection (d) of section 108 is amended--
                        (A) by striking ``subsections (a), (b), and (g)''
                    in paragraphs (6) and (7)(A) and inserting
                    ``subsections (a), (b), (c), and (g)'',
                        (B) by striking ``Subsections (a), (b), and (g)''
                    in the subsection heading and inserting ``Certain
                    Provisions'', and
                        (C) by striking ``Subsections (a), (b), and (g)''
                    in the headings of paragraphs (6) and (7)(A) and
                    inserting ``Certain provisions''.
                (4) Subparagraph (B) of section 108(d)(7) is amended by
            adding at the end thereof the following new sentence: ``The
            preceding sentence shall not apply to any discharge to the
            extent that subsection (a)(1)(D) applies to such discharge.''
                (5) Subparagraph (A) of section 108(d)(9) is amended by
            inserting ``or under paragraph (3)(B) of subsection (c)'' after
            ``subsection (b)''.
                (6) Paragraph (2) of section 1017(a) is amended by striking
            ``or (b)(5)'' and inserting ``, (b)(5), or (c)(1)''.
                (7) Subparagraph (A) of section 1017(b)(3) is amended by
            inserting ``or (c)(1)'' after ``subsection (b)(5)''.
                (8) Section 1017(b)(3) is amended by adding at the end the
            following new subparagraph:
                        ``(F) Special rules for qualified real property
                    business indebtedness.--In the case of any amount which
                    under section 108(c)(1) is to be applied to reduce
                    basis--
                                ``(i) depreciable property shall only
                            include depreciable real property for purposes
                            of subparagraphs (A) and (C),
                                ``(ii) subparagraph (E) shall not apply,
                            and
                                ``(iii) in the case of property taken into
                            account under section 108(c)(2)(B), the
                            reduction with respect to such property shall
                            be made as of the time immediately before
                            disposition if earlier than the time under
                            subsection (a).''
                (9) Paragraph (1) of section 703(b) is amended by striking
            ``subsection (b)(5)'' and inserting ``subsection (b)(5) or
            (c)(3)''.
        (d) Effective Date.--The amendments made by this section shall
    apply to discharges after December 31, 1992, in taxable years ending
    after such date.

    Subpart E--Increase in Recovery Period for Nonresidential Real Property

    SEC. 14151. INCREASE IN RECOVERY PERIOD FOR NONRESIDENTIAL REAL
                  PROPERTY.

        (a) General Rule.--Paragraph (1) of section 168(c) (relating to
    applicable recovery period) is amended by striking the item relating to
    nonresidential real property and inserting the following:

        ``Nonresidential real property................         39 years.''.
        (b) Effective Date.--
                (1) In general.--Except as provided in paragraph (2), the
            amendment made by subsection (a) shall apply to property placed
            in service by the taxpayer on or after February 25, 1993.
                (2) Exception.--The amendments made by this section shall
            not apply to property placed in service by the taxpayer before
            January 1, 1994, if--
                        (A) the taxpayer or a qualified person entered into
                    a binding written contract to purchase or construct
                    such property before February 25, 1993, or
                        (B) the construction of such property was commenced
                    by or for the taxpayer or a qualified person before
                    February  25, 1993.
            For purposes of this paragraph, the term ``qualified person''
            means any person who transfers his rights in such a contract or
            such property to the taxpayer but only if the property is not
            placed in service by such person before such rights are
            transferred to the taxpayer.

                              PART VI--LUXURY TAX

    SEC. 14161. REPEAL OF LUXURY EXCISE TAXES OTHER THAN ON PASSENGER
                  VEHICLES.

        (a) In General.--Subchapter A of chapter 31 (relating to retail
    excise taxes) is amended to read as follows:

                  ``Subchapter A--Luxury Passenger Automobiles

                                  ``Sec. 4001. Imposition of tax.
                                  ``Sec. 4002. 1st retail sale; uses, etc.
                                            treated as sales; determination
                                            of price.
                                  ``Sec. 4003. Special rules.

    ``SEC. 4001. IMPOSITION OF TAX.

        ``(a) Imposition of Tax.--There is hereby imposed on the 1st retail
    sale of any passenger vehicle a tax equal to 10 percent of the price
    for which so sold to the extent such price exceeds $30,000.
        ``(b) Passenger Vehicle.--
                ``(1) In general.--For purposes of this subchapter, the
            term `passenger vehicle' means any 4-wheeled vehicle--
                        ``(A) which is manufactured primarily for use on
                    public streets, roads, and highways, and
                        ``(B) which is rated at 6,000 pounds unloaded gross
                    vehicle weight or less.
                ``(2) Special rules.--
                        ``(A) Trucks and vans.--In the case of a truck or
                    van, paragraph (1)(B) shall be applied by substituting
                    `gross vehicle weight' for `unloaded gross vehicle
                    weight'.
                        ``(B) Limousines.--In the case of a limousine,
                    paragraph (1) shall be applied without regard to
                    subparagraph (B) thereof.
        ``(c) Exceptions for Taxicabs, Etc.--The tax imposed by this
    section shall not apply to the sale of any passenger vehicle for use by
    the purchaser exclusively in the active conduct of a trade or business
    of transporting persons or property for compensation or hire.
        ``(d) Exemption for Law Enforcement Uses, Etc.--No tax shall be
    imposed by this section on the sale of any passenger vehicle--
                ``(1) to the Federal Government, or a State or local
            government, for use exclusively in police, firefighting, search
            and rescue, or other law enforcement or public safety
            activities, or in public works activities, or
                ``(2) to any person for use exclusively in providing
            emergency medical services.
        ``(e) Inflation Adjustment.--
                ``(1) In general.--In the case of any calendar year after
            1992, the $30,000 amount in subsection (a) and section 4003(a)
            shall be increased by an amount equal to--
                        ``(A) $30,000, multiplied by
                        ``(B) the cost-of-living adjustment under section
                    1(f)(3) for such calendar year, determined by
                    substituting `calendar year 1990' for `calendar year
                    1992' in subparagraph (B) thereof.
                ``(2) Rounding.--If any amount as adjusted under paragraph
            (1) is not a multiple of $100, such amount shall be rounded to
            the nearest multiple of $100 (or, if such amount is a multiple
            of $50 and not of $100, such amount shall be rounded to the
            next highest multiple of $100).
        ``(f) Termination.--The tax imposed by this section shall not apply
    to any sale or use after December 31, 1999.

    ``SEC. 4002. 1ST RETAIL SALE; USES, ETC. TREATED AS SALES;
                  DETERMINATION OF PRICE.

        ``(a) 1st Retail Sale.--For purposes of this subchapter, the term
    `1st retail sale' means the 1st sale, for a purpose other than resale,
    after manufacture, production, or importation.
        ``(b) Use Treated as Sale.--
                ``(1) In general.--If any person uses a passenger vehicle
            (including any use after importation) before the 1st retail
            sale of such vehicle, then such person shall be liable for tax
            under this subchapter in the same manner as if such vehicle
            were sold at retail by him.
                ``(2) Exemption for further manufacture.--Paragraph (1)
            shall not apply to use of a vehicle as material in the
            manufacture or production of, or as a component part of,
            another vehicle taxable under this subchapter to be
            manufactured or produced by him.
                ``(3) Exemption for demonstration use.--Paragraph (1) shall
            not apply to any use of a passenger vehicle as a demonstrator.
                ``(4) Exception for use after importation of certain
            vehicles.--Paragraph (1) shall not apply to the use of a
            vehicle after importation if the user or importer establishes
            to the satisfaction of the Secretary that the 1st use of the
            vehicle occurred before January 1, 1991, outside the United
            States.
                ``(5) Computation of tax.--In the case of any person made
            liable for tax by paragraph (1), the tax shall be computed on
            the price at which similar vehicles are sold at retail in the
            ordinary course of trade, as determined by the Secretary.
        ``(c) Leases Considered as Sales.--For purposes of this
    subchapter--
                ``(1) In general.--Except as otherwise provided in this
            subsection, the lease of a vehicle (including any renewal or
            any extension of a lease or any subsequent lease of such
            vehicle) by any person shall be considered a sale of such
            vehicle at retail.
                ``(2) Special rules for long-term leases.--
                        ``(A) Tax not imposed on sale for leasing in a
                    qualified lease.--The sale of a passenger vehicle to a
                    person engaged in a passenger vehicle leasing or rental
                    trade or business for leasing by such person in a long-
                    term lease shall not be treated as the 1st retail sale
                    of such vehicle.
                        ``(B) Long-term lease.--For purposes of
                    subparagraph (A), the term `long-term lease' means any
                    long-term lease (as defined in section 4052).
                        ``(C) Special rules.--In the case of a long-term
                    lease of a vehicle which is treated as the 1st retail
                    sale of such vehicle--
                                ``(i) Determination of price.--The tax
                            under this subchapter shall be computed on the
                            lowest price for which the vehicle is sold by
                            retailers in the ordinary course of trade.
                                ``(ii) Payment of tax.--Rules similar to
                            the rules of section 4217(e)(2) shall apply.
                                ``(iii) No tax where exempt use by
                            lessee.--No tax shall be imposed on any lease
                            payment under a long-term lease if the lessee's
                            use of the vehicle under such lease is an
                            exempt use (as defined in section 4003(b)) of
                            such vehicle.
        ``(d) Determination of Price.--
                ``(1) In general.--In determining price for purposes of
            this subchapter--
                        ``(A) there shall be included any charge incident
                    to placing the article in condition ready for use,
                        ``(B) there shall be excluded--
                                ``(i) the amount of the tax imposed by this
                            subchapter,
                                ``(ii) if stated as a separate charge, the
                            amount of any retail sales tax imposed by any
                            State or political subdivision thereof or the
                            District of Columbia, whether the liability for
                            such tax is imposed on the vendor or vendee,
                            and
                                ``(iii) the value of any component of such
                            article if--
                                        ``(I) such component is furnished
                                    by the 1st user of such article, and
                                        ``(II) such component has been used
                                    before such furnishing, and
                        ``(C) the price shall be determined without regard
                    to any trade-in.
                ``(2) Other rules.--Rules similar to the rules of
            paragraphs (2) and (4) of section 4052(b) shall apply for
            purposes of this subchapter.

    ``SEC. 4003. SPECIAL RULES.

        ``(a) Separate Purchase of Vehicle and Parts and Accessories
    Therefor.--Under regulations prescribed by the Secretary--
                ``(1) In general.--Except as provided in paragraph (2),
            if--
                        ``(A) the owner, lessee, or operator of any
                    passenger vehicle installs (or causes to be installed)
                    any part or accessory on such vehicle, and
                        ``(B) such installation is not later than the date
                    6 months after the date the vehicle was 1st placed in
                    service,
            then there is hereby imposed on such installation a tax equal
            to 10 percent of the price of such part or accessory and its
            installation.
                ``(2) Limitation.--The tax imposed by paragraph (1) on the
            installation of any part or accessory shall not exceed 10
            percent of the excess (if any) of--
                        ``(A) the sum of--
                                ``(i) the price of such part or accessory
                            and its installation,
                                ``(ii) the aggregate price of the parts and
                            accessories (and their installation) installed
                            before such part or accessory, plus
                                ``(iii) the price for which the passenger
                            vehicle was sold, over
                        ``(B) $30,000.
                ``(3) Exceptions.--Paragraph (1) shall not apply if--
                        ``(A) the part or accessory installed is a
                    replacement part or accessory,
                        ``(B) the part or accessory is installed to enable
                    or assist an individual with a disability to operate
                    the vehicle, or to enter or exit the vehicle, by
                    compensating for the effect of such disability, or
                        ``(C) the aggregate price of the parts and
                    accessories (and their installation) described in
                    paragraph (1) with respect to the vehicle does not
                    exceed $200 (or such other amount or amounts as the
                    Secretary may by regulation prescribe).
            The price of any part or accessory (and its installation) to
            which paragraph (1) does not apply by reason of this paragraph
            shall not be taken into account under paragraph (2)(A).
                ``(4) Installers secondarily liable for tax.--The owners of
            the trade or business installing the parts or accessories shall
            be secondarily liable for the tax imposed by this subsection.
        ``(b) Imposition of Tax on Sales, Etc., Within 2 Years of Vehicles
    Purchased Tax-Free.--
                ``(1) In general.--If--
                        ``(A) no tax was imposed under this subchapter on
                    the 1st retail sale of any passenger vehicle by reason
                    of its exempt use, and
                        ``(B) within 2 years after the date of such 1st
                    retail sale, such vehicle is resold by the purchaser or
                    such purchaser makes a substantial nonexempt use of
                    such vehicle,
            then such sale or use of such vehicle by such purchaser shall
            be treated as the 1st retail sale of such vehicle for a price
            equal to its fair market value at the time of such sale or use.
                ``(2) Exempt use.--For purposes of this subsection, the
            term `exempt use' means any use of a vehicle if the 1st retail
            sale of such vehicle is not taxable under this subchapter by
            reason of such use.
        ``(c) Parts and Accessories Sold With Taxable Article.--Parts and
    accessories sold on, in connection with, or with the sale of any
    passenger vehicle shall be treated as part of the vehicle.
        ``(d) Partial Payments, Etc.--In the case of a contract, sale, or
    arrangement described in paragraph (2), (3), or (4) of section 4216(c),
    rules similar to the rules of section 4217(e)(2) shall apply for
    purposes of this subchapter.''
        (b) Technical Amendments.--
                (1) Subsection (c) of section 4221 is amended by striking
            ``4002(b), 4003(c), 4004(a)'' and inserting ``4001(d)''.
                (2) Subsection (d) of section 4222 is amended by striking
            ``4002(b), 4003(c), 4004(a)'' and inserting ``4001(d)''.
                (3) The table of subchapters for chapter 31 is amended by
            striking the item relating to subchapter A and inserting the
            following:

                                  ``Subchapter A. Luxury passenger
                                            vehicles.''
        (c) Effective Date.--The amendments made by this section shall take
    effect on January 1, 1993.

    SEC. 14162. EXEMPTION FROM LUXURY EXCISE TAX FOR CERTAIN EQUIPMENT
                  INSTALLED ON PASSENGER VEHICLES FOR USE BY DISABLED
                  INDIVIDUALS.

        (a) In General.--Paragraph (3) of section 4004(b) (relating to
    separate purchase of article and parts and accessories therefor), as in
    effect on the day before the date of the enactment of this Act, is
    amended--
                (1) by striking ``or'' at the end of subparagraph (A),
                (2) by redesignating subparagraph (B) as subparagraph (C),
                (3) by inserting after subparagraph (A) the following new
            subparagraph:
                        ``(B) the part or accessory is installed on a
                    passenger vehicle to enable or assist an individual
                    with a disability to operate the vehicle, or to enter
                    or exit the vehicle, by compensating for the effect of
                    such disability, or'', and
                (4) by inserting after subparagraph (C) the following flush
            sentence:
            ``The price of any part or accessory (and its installation) to
            which paragraph (1) does not apply by reason of this paragraph
            shall not be taken into account under paragraph (2)(A).''
        (b) Effective Date.--The amendments made by this section shall take
    effect as if included in the amendments made by section 11221(a) of the
    Omnibus Budget Reconciliation Act of 1990.
        (c) Period For Filing Claims.--If refund or credit of any
    overpayment of tax resulting from the application of the amendments
    made by this section is prevented at any time before the close of the
    1-year period beginning on the date of the enactment of this Act by the
    operation of any law or rule of law (including res judicata), refund or
    credit of such overpayment (to the extent attributable to such
    amendments) may, nevertheless, be made or allowed if claim therefor is
    filed before the close of such 1-year period.

    SEC. 14163. TAX ON DIESEL FUEL USED IN NONCOMMERCIAL BOATS.

        (a) General Rule.--
                (1) Paragraph (2) of section 4092(a) (defining diesel fuel)
            is amended by striking ``or a diesel-powered train'' and
            inserting ``, a diesel-powered train, or a diesel-powered
            boat''.
                (2) Paragraph (1) of section 4041(a) is amended--
                        (A) by striking ``diesel-powered highway vehicle''
                    each place it appears and inserting ``diesel-powered
                    highway vehicle or diesel-powered boat'', and
                        (B) by striking ``such vehicle'' and inserting
                    ``such vehicle or boat''.
                (3) Subparagraph (B) of section 4092(b)(1) is amended by
            striking ``commercial and noncommercial vessels'' each place it
            appears and inserting ``vessels for use in an off-highway
            business use (as defined in section 6421(e)(2)(B))''.
        (b) Exemption for Use In Fisheries or Commercial Navigation.--
    Subparagraph (B) of section 6421(e)(2) is amended to read as follows:
                        ``(B) Uses in boats.--The term `off-highway
                    business use' does not include any use in a motorboat;
                    except that such term shall include any use in--
                                ``(i) a vessel employed in the fisheries or
                            in the whaling business, and
                                ``(ii) in the case of diesel fuel, a boat
                            in the active conduct of--
                                        ``(I) a trade or business of
                                    commercial fishing or transporting
                                    persons or property for compensation or
                                    hire, or
                                        ``(II) any other trade or business
                                    unless the boat is used predominantly
                                    in any activity which is of a type
                                    generally considered to constitute
                                    entertainment, amusement or
                                    recreation.''
        (c) Retention of Taxes in General Fund.--
                (1) Taxes imposed at highway trust fund financing rate.--
            Paragraph (4) of section 9503(b) (relating to transfers to
            Highway Trust Fund) is amended--
                        (A) by striking ``and'' at the end of subparagraph
                    (A),
                        (B) by striking the period at the end of
                    subparagraph (B) and inserting ``, and'', and
                        (C) by adding at the end thereof the following new
                    subparagraph:
                        ``(C) there shall not be taken into account the
                    taxes imposed by sections 4041 and 4091 on diesel fuel
                    sold for use or used as fuel in a diesel-powered
                    boat.''
                (2) Taxes imposed at leaking underground storage tank trust
            fund financing rate.--Subsection (b) of section 9508 (relating
            to transfers to Leaking Underground Storage Tank Trust Fund) is
            amended by adding at the end thereof the following new
            sentence: ``For purposes of this subsection, there shall not be
            taken into account the taxes imposed by sections 4041 and 4091
            on diesel fuel sold for use or used as fuel in a diesel-powered
            boat.''
        (d) Effective Date.--The amendments made by this section shall take
    effect on January 1, 1994.

                            PART VII--OTHER CHANGES

    SEC. 14171. ALTERNATIVE MINIMUM TAX TREATMENT OF CONTRIBUTIONS OF
                  APPRECIATED PROPERTY.

        (a) Repeal of Tax Preference.--Subsection (a) of section 57 (as
    amended by section 14113) is amended by striking paragraph (6)
    (relating to appreciated property charitable deduction) and by
    redesignating paragraphs (7) and (8) as paragraphs (6) and (7),
    respectively.
        (b) Effect on Adjusted Current Earnings.--Paragraph (4) of section
    56(g) is amended by adding at the end thereof the following new
    subparagraph:
                        ``(J) Treatment of charitable contributions.--
                    Notwithstanding subparagraphs (B) and (C), no
                    adjustment related to the earnings and profits effects
                    of any charitable contribution shall be made in
                    computing adjusted current earnings.''
        (c) Conforming Amendment.--Subclause (II) of section
    53(d)(1)(B)(ii) (as amended by section 14113) is amended by striking
    ``(5), (6), and (8)'' and inserting ``(5), and (7)''.
        (d) Effective Date.--The amendments made by this section shall
    apply to contributions made after June 30, 1992, except that in the
    case of any contribution of capital gain property which is not tangible
    personal property, such amendments shall apply only if the contribution
    is made after December 31, 1992.
        (e) Report on Advance Determination of Value of Charitable Gifts.--
    Not later than 1 year after the date of the enactment of this Act, the
    Secretary of the Treasury shall report to the Committee on Finance of
    the Senate and the Committee on Ways and Means of the House of
    Representatives on the development of a procedure under which taxpayers
    may elect to seek an agreement with the Secretary as to the value of
    tangible personal property prior to the donation of such property to a
    qualifying charitable organization if the time limits for the donation
    and other conditions contained in the agreement are satisfied. Such
    report shall address the setting of possible threshold amounts for
    claimed value (and the payment of fees) by a taxpayer in order to seek
    agreement under the procedure, possible limitations on applying the
    procedure only to items with significant artistic or cultural value,
    and recommendations for legislative action needed to implement the
    proposed procedure.

    SEC. 14172. CERTAIN TRANSFERS TO RAILROAD RETIREMENT ACCOUNT MADE
                  PERMANENT.

        Subsection (c)(1)(A) of section 224 of the Railroad Retirement
    Solvency Act of 1983 (relating to section 72(r) revenue increase
    transferred to certain railroad accounts) is amended by striking ``with
    respect to benefits received before October 1, 1992''.

    SEC. 14173. TEMPORARY EXTENSION OF DEDUCTION FOR HEALTH INSURANCE COSTS
                  OF SELF-EMPLOYED INDIVIDUALS.

        (a) In General.--
                (1) Extension.--Paragraph (6) of section 162(l) (relating
            to special rules for health insurance costs of self-employed
            individuals) is amended by striking ``June 30, 1992'' and
            inserting ``December 31, 1993''.
                (2) Conforming amendment.--Paragraph (2) of section 110(a)
            of the Tax Extension Act of 1991 is hereby repealed.
                (3) Effective date.--The amendments made by this subsection
            shall apply to taxable years ending after June 30, 1992.
        (b) Determination of Eligibility for Employer-Sponsored Health
    Plan.--
                (1) In general.--Paragraph (2)(B) of section 162(l) is
            amended to read as follows:
                        ``(B) Other coverage.--Paragraph (1) shall not
                    apply to any taxpayer for any calendar month for which
                    the taxpayer is eligible to participate in any
                    subsidized health plan maintained by any employer of
                    the taxpayer or of the spouse of the taxpayer.''
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to taxable years beginning after December 31, 1992.

                         Subtitle B--Revenue Increases

                    PART I--PROVISIONS AFFECTING INDIVIDUALS

                           Subpart A--Rate Increases

    SEC. 14201. INCREASE IN TOP MARGINAL RATE UNDER SECTION 1.

        (a) General Rule.--Section 1 (relating to tax imposed) is amended
    by striking subsections (a) through (e) and inserting the following:
        ``(a) Married Individuals Filing Joint Returns and Surviving
    Spouses.--There is hereby imposed on the taxable income of--
                ``(1) every married individual (as defined in section 7703)
            who makes a single return jointly with his spouse under section
            6013, and
                ``(2) every surviving spouse (as defined in section 2(a)),
    a tax determined in accordance with the following table:

    ``If taxable income is:             The tax is:
        Not over $36,900...............
                                            15% of taxable income.
        Over $36,900 but not over
            $89,150.
                                            $5,535, plus 28% of the excess
                                                    over $36,900.
        Over $89,150 but not over
            $140,000.
                                            $20,165, plus 31% of the excess
                                                    over $89,150.
        Over $140,000..................
                                            $35,928.50, plus 36% of the
                                                    excess over $140,000.
        ``(b) Heads of Households.--There is hereby imposed on the taxable
    income of every head of a household (as defined in section 2(b)) a tax
    determined in accordance with the following table:

    ``If taxable income is:             The tax is:
        Not over $29,600...............
                                            15% of taxable income.
        Over $29,600 but not over
            $76,400.
                                            $4,440, plus 28% of the excess
                                                    over $29,600.
        Over $76,400 but not over
            $127,500.
                                            $17,544, plus 31% of the excess
                                                    over $76,400.
        Over $127,500..................
                                            $33,385, plus 36% of the excess
                                                    over $127,500.
        ``(c) Unmarried Individuals (Other Than Surviving Spouses and Heads
    of Households).--There is hereby imposed on the taxable income of every
    individual (other than a surviving spouse as defined in section 2(a) or
    the head of a household as defined in section 2(b)) who is not a
    married individual (as defined in section 7703) a tax determined in
    accordance with the following table:

    ``If taxable income is:             The tax is:
        Not over $22,100...............
                                            15% of taxable income.
        Over $22,100 but not over
            $53,500.
                                            $3,315, plus 28% of the excess
                                                    over $22,100.
        Over $53,500 but not over
            $115,000.
                                            $12,107, plus 31% of the excess
                                                    over $53,500.
        Over $115,000..................
                                            $31,172, plus 36% of the excess
                                                    over $115,000.
        ``(d) Married Individuals Filing Separate Returns.--There is hereby
    imposed on the taxable income of every married individual (as defined
    in section 7703) who does not make a single return jointly with his
    spouse under section 6013, a tax determined in accordance with the
    following table:

    ``If taxable income is:             The tax is:
        Not over $18,450...............
                                            15% of taxable income.
        Over $18,450 but not over
            $44,575.
                                            $2,767.50, plus 28% of the
                                                    excess over $18,450.
        Over $44,575 but not over
            $70,000.
                                            $10,082.50, plus 31% of the
                                                    excess over $44,575.
        Over $70,000...................
                                            $17,964.25, plus 36% of the
                                                    excess over $70,000.

        ``(e) Estates and Trusts.--There is hereby imposed on the taxable
    income of--
                ``(1) every estate, and
                ``(2) every trust,
    taxable under this subsection a tax determined in accordance with the
    following table:

    ``If taxable income is:             The tax is:
        Not over $1,500................
                                            15% of taxable income.
        Over $1,500 but not over $3,500
                                            $225, plus 28% of the excess
                                                    over $1,500.
        Over $3,500 but not over $5,500
                                            $785, plus 31% of the excess
                                                    over $3,500.
        Over $5,500....................
                                            $1,405, plus 36% of the excess
                                                    over $5,500.''
        (b) Conforming Amendments.--
                (1) Section 531 is amended by striking ``28 percent'' and
            inserting ``36 percent''.
                (2) Section 541 is amended by striking ``28 percent'' and
            inserting ``36 percent''.
                (3)(A) Subsection (f) of section 1 is amended--
                        (i) by striking ``1990'' in paragraph (1) and
                    inserting``1993'', and
                        (ii) by striking ``1989'' in paragraph (3)(B) and
                    inserting ``1992''.
                (B) Subsection (f) of section 1 is amended by adding at the
            end thereof the following new paragraph:
                ``(7) Special rule for certain brackets.--
                        ``(A) Calendar year 1994.--In prescribing the
                    tables under paragraph (1) which apply with respect to
                    taxable years beginning in calendar year 1994, the
                    Secretary shall make no adjustment to the dollar
                    amounts at which the 36 percent rate bracket begins or
                    at which the 39.6 percent rate begins under any table
                    contained in subsection (a), (b), (c), (d), or (e).
                        ``(B) Later calendar years.--In prescribing tables
                    under paragraph (1) which apply with respect to taxable
                    years beginning in a calendar year after 1994, the
                    cost-of-living adjustment used in making adjustments to
                    the dollar amounts referred to in subparagraph (A)
                    shall be determined under paragraph (3) by substituting
                    `1993' for `1992'.''
                (C) Subparagraph (C) of section 41(e)(5) is amended by
            striking ``1989'' each place it appears and inserting ``1992''.
                (D) Subparagraph (B) of section 63(c)(4) is amended by
            striking ``1989'' and inserting ``1992''.
                (E) Subparagraph (B) of section 68(b)(2) is amended by
            striking ``1989'' and inserting ``1992''.
                (F) Subparagraph (B) of section 132(f)(6) is amended by
            striking ``, determined by substituting'' and all that follows
            down through the period at the end thereof and inserting a
            period.
                (G) Subparagraphs (A)(ii) and (B)(ii) of section 151(d)(4)
            are each amended by striking ``1989'' and inserting ``1992''.
                (H) Clause (ii) of section 513(h)(2)(C) is amended by
            striking ``1989'' and inserting ``1992''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1992.

    SEC. 14202. SURTAX ON HIGH-INCOME TAXPAYERS.

        (a) General Rule.--
                (1) Subsection (a) of section 1 (as amended by section
            14201) is amended by striking the last item in the table
            contained therein and inserting the following:

        Over $140,000 but not over
            $250,000.
                                            $35,928.50, plus 36% of the
                                                    excess over $140,000.
        Over $250,000..................
                                            $75,528.50, plus 39.6% of the
                                                    excess over $250,000.''
                (2) Subsection (b) of section 1 (as so amended) is amended
            by striking the last item in the table contained therein and
            inserting the following:

        Over $127,500 but not over
            $250,000.
                                            $33,385, plus 36% of the excess
                                                    over $127,500.
        Over $250,000..................
                                            $77,485, plus 39.6% of the
                                                    excess over $250,000.''
                (3) Subsection (c) of section 1 (as so amended) is amended
            by striking the last item in the table contained therein and
            inserting the following:

        Over $115,000 but not over
            $250,000.
                                            $31,172, plus 36% of the excess
                                                    over $115,000.
        Over $250,000..................
                                            $79,772, plus 39.6% of the
                                                    excess over $250,000.''
                (4) Subsection (d) of section 1 (as so amended) is amended
            by striking the last item in the table contained therein and
            inserting the following:

        Over $70,000 but not over
            $125,000.
                                            $17,964.25, plus 36% of the
                                                    excess over $70,000.
        Over $125,000..................
                                            $37,764.25, plus 39.6% of the
                                                    excess over $125,000.''
                (5) Subsection (e) of section 1 (as so amended) is amended
            by striking the last item in the table contained therein and
            inserting the following:

        Over $5,500 but not over $7,500
                                            $1,405, plus 36% of the excess
                                                    over $5,500.
        Over $7,500....................
                                            $2,125, plus 39.6% of the
                                                    excess over $7,500.''
        (b) Technical Amendment.--Sections 531 and 541 (as amended by
    section 1420) are each amended by striking ``36 percent'' and inserting
    ``39.6 percent''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1992.

    SEC. 14203. MODIFICATIONS TO ALTERNATIVE MINIMUM TAX RATES AND
                  EXEMPTION AMOUNTS.

        (a) Increase in Rate.--Paragraph (1) of section 55(b) (defining
    tentative minimum tax) is amended to read as follows:
                ``(1) Amount of tentative tax.--
                        ``(A) Noncorporate taxpayers.--
                                ``(i) In general.--In the case of a
                            taxpayer other than a corporation, the
                            tentative minimum tax for the taxable year is
                            the sum of--
                                        ``(I) 26 percent of so much of the
                                    taxable excess as does not exceed
                                    $175,000, plus
                                        ``(II) 28 percent of so much of the
                                    taxable excess as exceeds $175,000.
                            The amount determined under the preceding
                            sentence shall be reduced by the alternative
                            minimum tax foreign tax credit for the taxable
                            year.
                                ``(ii) Taxable excess.--For purposes of
                            clause (i), the term `taxable excess' means so
                            much of the alternative minimum taxable income
                            for the taxable year as exceeds the exemption
                            amount.
                                ``(iii) Married individual filing separate
                            return.--In the case of a married individual
                            filing a separate return, clause (i) shall be
                            applied by substituting `$87,500' for
                            `$175,000' each place it appears. For purposes
                            of the preceding sentence, marital status shall
                            be determined under section 7703.
                        ``(B) Corporations.--In the case of a corporation,
                    the tentative minimum tax for the taxable year is--
                                ``(i) 20 percent of so much of the
                            alternative minimum taxable income for the
                            taxable year as exceeds the exemption amount,
                            reduced by
                                ``(ii) the alternative minimum tax foreign
                            tax credit for the taxable year.''
        (b) Increase in Exemption Amounts.--Paragraph (1) of section 55(d)
    (defining exemption amount) is amended--
                (1) by striking ``$40,000'' in subparagraph (A) and
            inserting ``$45,000'',
                (2) by striking ``$30,000'' in subparagraph (B) and
            inserting ``$33,750'', and
                (3) by striking ``$20,000'' in subparagraph (C) and
            inserting ``$22,500''.
        (c) Conforming Amendments.--
                (1) The last sentence of section 55(d)(3) is amended by
            striking ``$155,000 or (ii) $20,000'' and inserting ``$165,000
            or (ii) $22,500''.
                (2)(A) Subparagraph (A) of section 897(a)(2) is amended by
            striking ``the amount determined under section 55(b)(1)(A)
            shall not be less than 21 percent of'' and inserting ``the
            taxable excess for purposes of section 55(b)(1)(A) shall not be
            less than''.
                (B) The heading for paragraph (2) of section 897(a) is
            amended by striking ``21-Percent''.
        (d) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1992.

    SEC. 14204. OVERALL LIMITATION ON ITEMIZED DEDUCTIONS FOR HIGH-INCOME
                  TAXPAYERS MADE PERMANENT.

        Subsection (f) of section 68 (relating to overall limitation on
    itemized deductions) is hereby repealed.

    SEC. 14205. PHASEOUT OF PERSONAL EXEMPTION OF HIGH-INCOME TAXPAYERS
                  MADE PERMANENT.

        Section 151(d)(3) (relating to phaseout of personal exemption) is
    amended by striking subparagraph (E).

    SEC. 14206. PROVISIONS TO PREVENT CONVERSION OF ORDINARY INCOME TO
                  CAPITAL GAIN.

        (a) Interest Embedded in Financial Transactions.--
                (1) In general.--Part IV of subchapter P of chapter 1
            (relating to special rules for determining capital gains and
            losses) is amended by adding at the end thereof the following
            new section:

    ``SEC. 1258. RECHARACTERIZATION OF GAIN FROM CERTAIN FINANCIAL
                  TRANSACTIONS.

        ``(a) General Rule.--In the case of any gain--
                ``(1) which (but for this section) would be treated as gain
            from the sale or exchange of a capital asset, and
                ``(2) which is recognized on the disposition of any
            property which was held as part of a conversion transaction,
    such gain (to the extent such gain does not exceed the applicable
    imputed income amount) shall be treated as ordinary income.
        ``(b) Applicable Imputed Income Amount.--For purposes of subsection
    (a), the term `applicable imputed income amount' means, with respect to
    any disposition referred to in subsection (a), an amount equal to--
                ``(1) the amount of interest which would have accrued on
            the taxpayer's net investment in the conversion transaction for
            the period ending on the date of such disposition (or, if
            earlier, the date on which the requirements of subsection (c)
            ceased to be satisfied) at a rate equal to 120 percent of the
            applicable rate, reduced by
                ``(2) the amount treated as ordinary income under
            subsection (a) with respect to any prior disposition of
            property which was held as a part of such transaction.
    The Secretary shall by regulations provide for such reductions in the
    applicable imputed income amount as may be appropriate by reason of
    amounts capitalized under section 263(g), ordinary income received, or
    otherwise.
        ``(c) Conversion Transaction.--For purposes of this section, the
    term `conversion transaction' means any of the following where
    substantially all of the taxpayer's expected return from the
    transaction is attributable to the time value of the taxpayer's net
    investment in such transaction:
                ``(1) The holding of any property (whether or not actively
            traded), and the entering into a contract to sell such property
            (or substantially identical property) at a price determined in
            accordance with such contract, but only if such property was
            acquired and such contract was entered into on a substantially
            contemporaneous basis.
                ``(2) Any applicable straddle.
                ``(3) Any other transaction which is marketed or sold as
            producing capital gains.
                ``(4) Any other transaction specified in regulations
            prescribed by the Secretary.
        ``(d) Definitions and Special Rules.--For purposes of this
    section--
                ``(1) Applicable straddle.--The term `applicable straddle'
            means any straddle (within the meaning of section 1092(c));
            except that the term `personal property' shall include stock.
                ``(2) Applicable rate.--The term `applicable rate' means--
                        ``(A) the applicable Federal rate determined under
                    section 1274(d) (compounded semiannually) as if the
                    conversion transaction were a debt instrument, or
                        ``(B) if the term of the conversion transaction is
                    indefinite, the Federal short-term rates in effect
                    under section 6621(b) during the period of the
                    conversion transaction (compounded daily).
                ``(3) Treatment of property with built-in loss.--
                        ``(A) In general.--If any property with a built-in
                    loss becomes part of a conversion transaction--
                                ``(i) for purposes of applying this
                            subtitle to such property for periods after
                            such property becomes part of such transaction,
                            the adjusted basis of such property shall be
                            its fair market value as of the time it became
                            part of such transaction, except that
                                ``(ii) upon the disposition of such
                            property in a transaction in which gain or loss
                            is recognized, such built-in loss shall be
                            recognized and shall have a character
                            determined without regard to this section.
                        ``(B) Built-in loss.--For purposes of subparagraph
                    (A), the term `built-in loss' means the excess (if any)
                    of the adjusted basis of any property over its fair
                    market value (determined as of the date on which such
                    property became part of such transaction).
                ``(4) Property taken into account at fair market value.--In
            determining the taxpayer's net investment in any conversion
            transaction, there shall be included the fair market value of
            any property which becomes part of such transaction (determined
            as of the date on which such property became part of such
            transaction).''
                (2) Clerical amendment.--The table of sections for part IV
            of subchapter P of chapter 1 is amended by adding at the end
            thereof the following new item:

                                  ``Sec. 1258. Recharacterization of gain
                                            from certain financial
                                            transactions.''
                (3) Effective date.--The amendments made by this section
            shall apply to conversion transactions entered into after April
            30, 1993.
        (b) Repeal of Certain Exceptions to Market Discount Rules.--
                (1) Market discount bonds issued on or before july 18,
            1984.--The following provisions are hereby repealed:
                        (A) Section 1276(e).
                        (B) Section 1277(d).
                (2) Tax-exempt obligations.--
                        (A) In general.--Paragraph (1) of section 1278(a)
                    (defining market discount bond) is amended--
                                (i) by striking clause (ii) of subparagraph
                            (B) and redesignating subclauses (iii) and (iv)
                            of such subparagraph as clauses (ii) and (iii),
                            respectively,
                                (ii) by redesignating subparagraph (C) as
                            subparagraph (D), and
                                (iii) by inserting after subparagraph (B)
                            the following new subparagraph:
                        ``(C) Section 1277 not applicable to tax-exempt
                    obligations.--For purposes of section 1277, the term
                    `market discount bond' shall not include any tax-exempt
                    obligation (as defined in section 1275(a)(3)).''
                        (B) Conforming amendment.--Sections 1276(a)(4) and
                    1278(b)(1) are each amended by striking ``sections
                    871(a)'' and inserting ``sections 103, 871(a),''.
                (3) Effective date.--The amendments made by this section
            shall apply to obligations purchased (within the meaning of
            section 1272(d)(1) of the Internal Revenue Code of 1986) after
            April 30, 1993.
        (c) Treatment of Stripped Preferred Stock.--
                (1) In general.--Section 305 is amended by redesignating
            subsection (e) as subsection (f) and by inserting after
            subsection (d) the following new subsection:
        ``(e) Treatment of Purchaser of Stripped Preferred Stock.--
                ``(1) In general.--If any person purchases after April 30,
            1993 any stripped preferred stock, then such person, while
            holding such stock, shall include in gross income amounts equal
            to the amounts which would have been so includible if such
            stripped preferred stock were a bond issued on the purchase
            date and having original issue discount equal to the excess, if
            any, of--
                        ``(A) the redemption price for such stock, over
                        ``(B) the price at which such person purchased such
                    stock.
            The preceding sentence shall also apply in the case of any
            person whose basis in such stock is determined by reference to
            the basis in the hands of such purchaser.
                ``(2) Basis adjustments.--Appropriate adjustments to basis
            shall be made for amounts includible in gross income under
            paragraph (1).
                ``(3) Tax treatment of person stripping stock.--If any
            person strips the rights to 1 or more dividends from any stock
            described in paragraph (5)(B) and after April 30, 1993 disposes
            of such dividend rights, for purposes of paragraph (1), such
            person shall be treated as having purchased the stripped
            preferred stock on the date of such disposition for a purchase
            price equal to such person's adjusted basis in such stripped
            preferred stock.
                ``(4) Amounts treated as ordinary income.--Any amount
            included in gross income under paragraph (1) shall be treated
            as ordinary income.
                ``(5) Stripped preferred stock.--For purposes of this
            subsection--
                        ``(A) In general.--The term `stripped preferred
                    stock' means any stock described in subparagraph (B) if
                    there has been a separation in ownership between such
                    stock and any dividend on such stock which has not
                    become payable.
                        ``(B) Description of stock.--Stock is described in
                    this subsection if such stock--
                                ``(i) is limited and preferred as to
                            dividends and does not participate in corporate
                            growth to any significant extent, and
                                ``(ii) has a fixed redemption price.
                ``(6) Purchase.--For purposes of this subsection, the term
            `purchase' means--
                        ``(A) any acquisition of stock, where
                        ``(B) the basis of such stock is not determined in
                    whole or in part by the reference to the adjusted basis
                    of such stock in the hands of the person from whom
                    acquired.''
                (2) Coordination with section 167(e).--Paragraph (2) of
            section 167(e) is amended to read as follows:
                ``(2) Coordination with other provisions.--
                        ``(A) Section 273.--This subsection shall not apply
                    to any term interest to which section 273 applies.
                        ``(B) Section 305(e).--This subsection shall not
                    apply to the holder of the dividend rights which were
                    separated from any stripped preferred stock to which
                    section 305(e)(1) applies.''
                (3) Effective date.--The amendments made by this subsection
            shall take effect on April 30, 1993.
        (d) Treatment of Capital Gain Under Limitation on Investment
    Interest.--
                (1) In general.--Subparagraph (B) of section 163(d)(4)
            (defining investment income) is amended to read as follows:
                        ``(B) Investment income.--The term `investment
                    income' means the sum of--
                                ``(i) gross income from property held for
                            investment (other than any gain taken into
                            account under clause (ii)(I)),
                                ``(ii) the excess (if any) of--
                                        ``(I) the net gain attributable to
                                    the disposition of property held for
                                    investment, over
                                        ``(II) the net capital gain
                                    determined by only taking into account
                                    gains and losses from dispositions of
                                    property held for investment, plus
                                ``(iii) so much of the net capital gain
                            referred to in clause (ii)(II) (or, if lesser,
                            the net gain referred to in clause (ii)(I)) as
                            the taxpayer elects to take into account under
                            this clause.''
                (2) Coordination with special capital gains rate.--
            Subsection (h) of section 1 is amended by adding at the end
            thereof the following new sentence:
    ``For purposes of the preceding sentence, the net capital gain for any
    taxable year shall be reduced (but not below zero) by the amount which
    the taxpayer elects to take into account as investment income for the
    taxable year under section 163(d)(4)(B)(iii).''
                (3) Effective date.--The amendments made by this subsection
            shall apply to taxable years beginning after December 31, 1992.
        (e) Treatment of Certain Appreciated Inventory.--
                (1) Paragraph (1) of section 751(d) is amended to read as
            follows:
                ``(1) Substantial appreciation.--
                        ``(A) In general.--Inventory items of the
                    partnership shall be considered to have appreciated
                    substantially in value if their fair market value
                    exceeds 120 percent of the adjusted basis to the
                    partnership of such property.
                        ``(B) Certain property excluded.--For purposes of
                    subparagraph (A), there shall be excluded any inventory
                    property if a principal purpose for acquiring such
                    property was to avoid the provisions of this section
                    relating to inventory items.''
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to sales, exchanges, and distributions after April
            30, 1993.

                          Subpart B--Other Provisions

    SEC. 14207. REPEAL OF LIMITATION ON AMOUNT OF WAGES SUBJECT TO HEALTH
                  INSURANCE EMPLOYMENT TAX.

        (a) Hospital Insurance Tax.--
                (1) Paragraph (1) of section 3121(a) (defining wages) is
            amended--
                        (A) by inserting ``in the case of the taxes imposed
                    by sections 3101(a) and 3111(a)'' after ``(1)'',
                        (B) by striking ``applicable contribution base (as
                    determined under subsection (x))'' each place it
                    appears and inserting ``contribution and benefit base
                    (as determined under section 230 of the Social Security
                    Act)'', and
                        (C) by striking ``such applicable contribution
                    base'' and inserting ``such contribution and benefit
                    base''.
                (2) Section 3121 is amended by striking subsection (x).
        (b) Self-Employment Tax.--
                (1) Subsection (b) of section 1402 is amended--
                        (A) by striking ``that part of the net'' in
                    paragraph (1) and inserting ``in the case of the tax
                    imposed by section 1401(a), that part of the net'',
                        (B) by striking ``applicable contribution base (as
                    determined under subsection (k))'' in paragraph (1) and
                    inserting ``contribution and benefit base (as
                    determined under section 230 of the Social Security
                    Act)'',
                        (C) by inserting ``and'' after ``section
                    3121(b),'', and
                        (D) by striking ``and (C) includes'' and all that
                    follows through ``3111(b)''.
                (2) Section 1402 is amended by striking subsection (k).
        (c) Railroad Retirement Tax.--
                (1) Subparagraph (A) of section 3231(e)(2) is amended by
            adding at the end thereof the following new clause:
                                ``(iii) Hospital insurance taxes.--Clause
                            (i) shall not apply to--
                                        ``(I) so much of the rate
                                    applicable under section 3201(a) or
                                    3221(a) as does not exceed the rate of
                                    tax in effect under section 3101(b),
                                    and
                                        ``(II) so much of the rate
                                    applicable under section 3211(a)(1) as
                                    does not exceed the rate of tax in
                                    effect under section 1402(b).''
                (2) Clause (i) of section 3231(e)(2)(B) is amended to read
            as follows:
                                ``(i) Tier 1 taxes.--Except as provided in
                            clause (ii), the term `applicable base' means
                            for any calendar year the contribution and
                            benefit base determined under section 230 of
                            the Social Security Act for such calendar
                            year.''
        (d) Technical Amendments.--
                (1) Paragraph (1) of section 6413(c) is amended by striking
            ``section 3101 or section 3201'' and inserting ``section
            3101(a) or section 3201(a) (to the extent the rate applicable
            under section 3201(a) as does not exceed the rate of tax in
            effect under section 3101(a))''.
                (2) Subparagraphs (B) and (C) of section 6413(c)(2) are
            each amended by striking ``section 3101'' each place it appears
            and inserting ``section 3101(a)''.
                (3) Subsection (c) of section 6413 is amended by striking
            paragraph (3).
                (4) Sections 3122 and 3125 of such Code are each amended by
            striking ``applicable contribution base limitation'' and
            inserting ``contribution and benefit base limitation''.
        (e) Effective Date.--The amendments made by this section shall
    apply to 1994 and later calendar years.

    SEC. 14208. TOP ESTATE AND GIFT TAX RATES MADE PERMANENT.

        (a) General Rule.--The table contained in paragraph (1) of section
    2001(c) is amended by striking the last item and inserting the
    following new items:

        ``Over $2,500,000 but not over
            $3,000,000.
                                            $1,025,800, plus 53% of the
                                                    excess over $2,500,000.
        Over $3,000,000................
                                            $1,290,800, plus 55% of the
                                                    excess over
                                                    $3,000,000.''
        (b) Conforming Amendments.--
                (1) Subsection (c) of section 2001 is amended by striking
            paragraph (2) and by redesignating paragraph (3) as paragraph
            (2).
                (2) Paragraph (2) of section 2001(c), as redesignated by
            paragraph (1), is amended by striking ``($18,340,000 in the
            case of decedents dying, and gifts made, after 1992)''.
                (3) The last sentence of section 2101(b) is amended by
            striking ``section 2001(c)(3)'' and inserting ``section
            2001(c)(2)''.
        (c) Effective Date.--The amendments made by this section shall
    apply in the case of decedents dying, and gifts made, after December
    31, 1992.

    SEC. 14209. REDUCTION IN DEDUCTIBLE PORTION OF BUSINESS MEALS AND
                  ENTERTAINMENT.

        (a) General Rule.--Paragraph (1) of section 274(n) (relating to
    only 80 percent of meal and entertainment expenses allowed as
    deduction) is amended by striking ``80 percent'' and inserting ``50
    percent''.
        (b) Conforming Amendment.--The subsection heading for section
    274(n) is amended by striking ``80'' and inserting ``50''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1993.

    SEC. 14210. ELIMINATION OF DEDUCTION FOR CLUB MEMBERSHIP FEES.

        (a) In General.--Subsection (a) of section 274 (relating to
    disallowance of certain entertainment, etc., expenses) is amended by
    adding at the end thereof the following new paragraph:
                ``(3) Denial of deduction for club dues.--Notwithstanding
            the preceding provisions of this subsection, no deduction shall
            be allowed under this chapter for amounts paid or incurred for
            membership in any club organized for business, pleasure,
            recreation, or other social purpose. The preceding sentence
            shall not apply in the case of an airline or hotel club.''
        (b) Exception for Employee Recreational Expenses Not To Apply.--
    Paragraph (4) of section 274(e) is amended by adding at the end thereof
    the following: ``This paragraph shall not apply for purposes of
    subsection (a)(3).''
        (c) Effective Date.--The amendments made by this section shall
    apply to amounts paid or incurred after December 31, 1993.

    SEC. 14211. DISALLOWANCE OF DEDUCTION FOR CERTAIN EMPLOYEE REMUNERATION
                  IN EXCESS OF $1,000,000.

        (a) General Rule.--Section 162 (relating to trade or business
    expenses) is amended by redesignating subsection (m) as subsection (n)
    and by inserting after subsection (l) the following new subsection:
        ``(m) Certain Excessive Employee Remuneration.--
                ``(1) In general.--In the case of any publicly held
            corporation, no deduction shall be allowed under this chapter
            for applicable employee remuneration with respect to any
            covered employee to the extent that the amount of such
            remuneration for the taxable year with respect to such employee
            exceeds $1,000,000.
                ``(2) Publicly held corporation.--For purposes of this
            subsection, the term `publicly held corporation' means any
            corporation issuing any class of common equity securities
            required to be registered under section 12 of the Securities
            Exchange Act of 1934.
                ``(3) Covered employee.--For purposes of this subsection,
            the term `covered employee' means any employee of the taxpayer
            if--
                        ``(A) as of the close of the taxable year, such
                    employee is the chief executive officer of the taxpayer
                    or an individual acting in such a capacity, or
                        ``(B) the total compensation for the taxable year
                    of such employee is required to be reported to
                    shareholders under the Securities Exchange Act of 1934
                    by reason of such employee being among the 4 highest
                    compensated officers for the taxable year (other than
                    the chief executive officer).
                ``(4) Applicable employee remuneration.--For purposes of
            this subsection--
                        ``(A) In general.--Except as otherwise provided in
                    this paragraph, the term `applicable employee
                    remuneration' means, with respect to any covered
                    employee for any taxable year, the aggregate amount
                    allowable as a deduction under this chapter for such
                    taxable year (determined without regard to this
                    subsection) for remuneration for services performed by
                    such employee (whether or not during the taxable year).
                        ``(B) Exception for remuneration payable on
                    commission basis.--The term `applicable employee
                    remuneration' shall not include any remuneration
                    payable on a commission basis solely on account of
                    income generated directly by the individual performance
                    of the individual to whom such remuneration is payable.
                        ``(C) Other performance-based compensation.--The
                    term `applicable employee remuneration' shall not
                    include any remuneration payable solely on account of
                    the attainment of one or more performance goals but
                    only if--
                                ``(i) the performance goals are determined
                            by a compensation committee of the board of
                            directors of the taxpayer which is comprised
                            solely of 2 or more independent directors,
                                ``(ii) the material terms under which the
                            remuneration is to be paid, including the
                            performance goals, are disclosed to
                            shareholders and approved by a majority of the
                            vote in a separate shareholder vote before the
                            payment of such remuneration, and
                                ``(iii) before any payment of such
                            remuneration, the compensation committee
                            referred to in clause (i) certifies that the
                            performance goals and any other material terms
                            were in fact satisfied.
                        ``(D) Exception for existing binding contracts.--
                    The term `applicable employee remuneration' shall not
                    include any remuneration payable under a written
                    binding contract which was in effect on February 17,
                    1993, and which was not modified thereafter in any
                    material respect before such remuneration is paid.
                        ``(E) Remuneration.--For purposes of this
                    paragraph, the term `remuneration' includes any
                    remuneration (including benefits) in any medium other
                    than cash, but shall not include--
                                ``(i) any payment referred to in so much of
                            section 3121(a)(5) as precedes subparagraph (E)
                            thereof, and
                                ``(ii) any benefit provided to or on behalf
                            of an employee if at the time such benefit is
                            provided it is reasonable to believe that the
                            employee will be able to exclude such benefit
                            from gross income under this chapter.
                    For purposes of clause (i), section 3121(a)(5) shall be
                    applied without regard to section 3121(v)(1).
                        ``(F) Coordination with disallowed golden parachute
                    payments.--The dollar limitation contained in paragraph
                    (1) shall be reduced (but not below zero) by the amount
                    (if any) which would have been included in the
                    applicable employee remuneration of the covered
                    employee for the taxable year but for being disallowed
                    under section 280G.''
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to amounts which would otherwise be deductible for taxable years
    beginning on or after January 1, 1994.

    SEC. 14212. REDUCTION IN COMPENSATION TAKEN INTO ACCOUNT IN DETERMINING
                  CONTRIBUTIONS AND BENEFITS UNDER QUALIFIED RETIREMENT
                  PLANS.

        (a) In General.--Sections 401(a)(17), 404(l), and 505(b)(7) are
    each amended--
                (1) by striking ``$200,000'' in the first sentence and
            inserting ``$150,000'', and
                (2) by striking the second sentence and inserting ``In the
            case of years beginning after 1994, the Secretary shall adjust
            the $150,000 amount at the same time and in the same manner as
            under section 415(d), except that the base period for purposes
            of section 415(d)(1)(A) shall be the calendar quarter beginning
            October 1, 1994.''
        (b) Simplified Employee Pensions.--
                (1) In general.--Paragraphs (3)(C) and (6)(D)(ii) of
            section 408(k) are each amended by striking ``$200,000'' and
            inserting ``$150,000''.
                (2) Cost-of-living.--Paragraph (8) of section 408(k) is
            amended to read as follows:
                ``(8) Cost-of-living adjustment.--The Secretary shall
            adjust the $300 amount in paragraph (2)(C) at the same time and
            in the same manner as under section 415(d) and shall adjust the
            $150,000 amount in paragraphs (3)(C) and (6)(D)(ii) at the same
            time and by the same amount as the adjustment to the $150,000
            amount in section 401(a)(17).''
        (c) Conforming Amendment.--The heading for section 505(b)(7) is
    amended by striking ``$200,000''.
        (d) Effective Date.--The amendments made by this section shall
    apply to benefits accruing in plan years beginning after December 31,
    1993.

    SEC. 14213. MODIFICATION TO DEDUCTION FOR CERTAIN MOVING EXPENSES.

        (a) Repeal of Deduction for Qualified Residence Sale, Etc.,
    Expenses.--
                (1) In general.--Paragraph (1) of section 217(b) (defining
            moving expenses) is amended by inserting ``or'' at the end of
            subparagraph (C), by striking ``, or'' at the end of
            subparagraph (D) and inserting a period, and by striking
            subparagraph (E).
                (2) Conforming amendments.--
                        (A) Subsection (b) of section 217 is amended by
                    striking paragraph (2) and redesignating paragraph (3)
                    as paragraph (2).
                        (B) Paragraph (2) of section 217(b) (as
                    redesignated by subparagraph (A)) is amended--
                                (i) by striking the last sentence of
                            subparagraph (A), and
                                (ii) by striking ``, and by'' in
                            subparagraph (B) and all that follows down
                            through the period at the end of subparagraph
                            (B) and inserting a period.
                        (C) Paragraph (1) of section 217(h) is amended by
                    striking subparagraphs (B) and (C) and inserting the
                    following:
                        ``(B) subsection (b)(2)(A) shall be applied by
                    substituting `$4,500' for `$1,500', and
                        ``(C) subsection (b)(2)(B) shall be applied as if
                    the last sentence of such subsection read as follows:
                    `In the case of a husband and wife filing separate
                    returns, subparagraph (A) shall be applied by
                    substituting ``$2,250'' for ``$4,500''.' ''
                        (D) Section 217 is amended by striking subsection
                    (e).
        (b) Deduction Disallowed for Meal Expenses.--Paragraph (1) of
    section 217(b) is amended--
                (1) by striking ``meals and lodging'' in subparagraphs (B),
            (C) and (D) and inserting ``lodging'', and
                (2) by adding at the end thereof the following new
            sentence:
            ``Such term shall not include any expenses for meals.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to expenses incurred after December 31, 1993.

    SEC. 14214. SIMPLIFICATION OF INDIVIDUAL ESTIMATED TAX SAFE HARBOR
                  BASED ON LAST YEAR'S TAX.

        (a) In General.--Paragraph (1) of section 6654(d) (relating to
    amount of required estimated tax installments) is amended by striking
    subparagraphs (C), (D), (E), and (F) and by inserting the following new
    subparagraph:
                        ``(C) Limitation on use of preceding year's tax.--
                                ``(i) In general.--If the adjusted gross
                            income shown on the return of the individual
                            for the preceding taxable year exceeds
                            $150,000, clause (ii) of subparagraph (B) shall
                            be applied by substituting `110 percent' for
                            `100 percent'.
                                ``(ii) Separate returns.--In the case of a
                            married individual (within the meaning of
                            section 7703) who files a separate return for
                            the taxable year for which the amount of the
                            installment is being determined, clause (i)
                            shall be applied by substituting `$75,000' for
                            `$150,000'.
                                ``(iii) Special rule.--In the case of an
                            estate or trust, adjusted gross income shall be
                            determined as provided in section 67(e).''
        (b) Conforming Amendments.--
                (1) Subparagraph (A) of section 6654(j)(3) is amended by
            striking ``and subsection (d)(1)(C)(iii) shall not apply'',
                (2) Paragraph (4) of section 6654(l) is amended by striking
            ``paragraphs (1)(C)(iv) and (2)(B)(i) of subsection (d)'' and
            inserting ``subsection (d)(2)(B)(i)''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1993.

    SEC. 14215. SOCIAL SECURITY AND TIER 1 RAILROAD RETIREMENT BENEFITS.

        (a) In General.--Subsections (a) (1) and (2) of section 86
    (relating to social security and tier 1 railroad retirement benefits)
    are each amended by striking ``one-half'' and inserting ``85 percent''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to taxable years beginning after December 31, 1993.
        (c) Additional Receipts Retained in General Fund.--
                (1) Subsection (e) of section 121 of the Social Security
            Amendments of 1983 is amended by adding at the end the
            following new paragraph:
                ``(5) Certain increased receipts retained in general
            fund.--In determining the amount appropriated to any payor fund
            under paragraph (1), there shall be excluded any increase in
            tax liability to the extent such increase is attributable to
            the amendments made to section 86 of the Internal Revenue Code
            of 1986 by the Revenue Reconciliation Act of 1993.''.
                (2) Paragraph (4) of subsection (e) of such section 121 is
            amended by redesignating subparagraphs (A) and (B) as
            subparagraphs (B) and (C) and by inserting before subparagraph
            (B) (as so redesignated) the following new subparagraph:
                        ``(A) the total aggregate increase in tax liability
                    under chapter 1 of the Internal Revenue Code of 1986
                    which is attributable to the application of sections 86
                    and 871(a)(3) of such Code,''.

                    PART II--PROVISIONS AFFECTING BUSINESSES

    SEC. 14221. INCREASE IN TOP MARGINAL RATE UNDER SECTION 11.

        (a) General Rule.--Paragraph (1) of section 11(b) (relating to
    amount of tax) is amended--
                (1) by striking ``and'' at the end of subparagraph (B),
                (2) by striking subparagraph (C) and inserting the
            following:
                        ``(C) 34 percent of so much of the taxable income
                    as exceeds $75,000 but does not exceed $10,000,000, and
                        ``(D) 35 percent of so much of the taxable income
                    as exceeds $10,000,000.'', and
                (3) by adding at the end thereof the following new
            sentence: ``In the case of a corporation which has taxable
            income in excess of $15,000,000, the amount of the tax
            determined under the foregoing provisions of this paragraph
            shall be increased by an additional amount equal to the lesser
            of (i) 3 percent of such excess, or (ii) $100,000.''.
        (b) Certain Personal Service Corporations.--Paragraph (2) of
    section 11(b) is amended by striking ``34 percent'' and inserting ``35
    percent''.
        (c) Conforming Amendments.--
                (1) Clause (iii) of section 852(b)(3)(D) is amended by
            striking ``66 percent'' and inserting ``65 percent''.
                (2) Subsection (a) of section 1201 is amended by striking
            ``34 percent'' each place it appears and inserting ``35
            percent''.
                (3) Paragraphs (1) and (2) of section 1445(e) are each
            amended by striking ``34 percent'' and inserting ``35
            percent''.
        (d) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning on or after January 1, 1993; except
    that the amendment made by subsection (c)(3) shall take effect on the
    date of the enactment of this Act.

    SEC. 14222. DENIAL OF DEDUCTION FOR LOBBYING EXPENSES.

        (a) Disallowance of Deduction.--Section 162(e) (relating to
    appearances, etc., with respect to legislation) is amended to read as
    follows:
        ``(e) Denial of Deduction for Certain Lobbying and Political
    Expenditures.--
                ``(1) In general.--No deduction shall be allowed under
            subsection (a) for any amount paid or incurred--
                        ``(A) in connection with influencing legislation,
                        ``(B) for participation in, or intervention in, any
                    political campaign on behalf of (or in opposition to)
                    any candidate for public office, or
                        ``(C) in connection with any attempt to influence
                    the general public, or segments thereof, with respect
                    to elections.
                ``(2) Application to dues.--
                        ``(A) In general.--No deduction shall be allowed
                    under subsection (a) for the portion of dues or other
                    similar amounts (paid by the taxpayer with respect to
                    an organization) which is allocable to the expenditures
                    described in paragraph (1).
                        ``(B) Allocation.--
                                ``(i) In general.--For purposes of
                            subparagraph (A), expenditures described in
                            paragraph (1) shall be treated as paid out of
                            dues or other similar amounts.
                                ``(ii) Carryover of lobbying expenditures
                            in excess of dues.--For purposes of this
                            paragraph, if expenditures described in
                            paragraph (1) exceed the dues or other similar
                            amounts for any calendar year, such excess
                            shall be treated as expenditures described in
                            paragraph (1) which are paid or incurred by the
                            organization during the following calendar
                            year.
                ``(3) Influencing legislation.--For purposes of this
            subsection--
                        ``(A) In general.--The term `influencing
                    legislation' means--
                                ``(i) any attempt to influence the general
                            public, or segments thereof, with respect to
                            legislation, and
                                ``(ii) any attempt to influence any
                            legislation through communication with any
                            member or employee of the legislative body, or
                            with any government official or employee who
                            may participate in the formulation of the
                            legislation.
                        ``(B) Exception for certain technical advice.--The
                    term `influencing legislation' shall not include the
                    providing of technical advice or assistance to a
                    governmental body or to a committee or other
                    subdivision thereof in response to a specific written
                    request by such governmental entity to the taxpayer
                    which specifies the nature of the advice or assistance
                    requested.
                        ``(C) Legislation.--The term `legislation' has the
                    meaning given such term by section 4911(e)(2).
                ``(4) Exception for certain taxpayers.--In the case of any
            taxpayer engaged in the trade or business of conducting
            activities described in paragraph (1), paragraph (1) shall not
            apply to expenditures of the taxpayer in conducting such
            activities on behalf of another person (but shall apply to
            payments by such other person to the taxpayer for conducting
            such activities).
                ``(5) Cross reference.--

                                    ``For reporting requirements related to
    this subsection, see section 6050O.''
        (b) Reporting Requirements.--
                (1) In general.--Subpart B of part III of subchapter A of
            chapter 61 (relating to information concerning transactions
            with other persons) is amended by adding at the end the
            following new section:

    ``SEC. 6050O. RETURNS RELATING TO LOBBYING EXPENDITURES OF CERTAIN
                  ORGANIZATIONS.

        ``(a) Requirement of Reporting.--Each organization referred to in
    section 162(e)(2) shall make a return, according to the forms or
    regulations prescribed by the Secretary, setting forth the names and
    addresses of persons paying dues to the organization, the amount of the
    dues paid by such person, and the portion of such dues which is
    nondeductible under section 162(e)(2).
        ``(b) Statements To Be Furnished to Persons With Respect to Whom
    Information Is Furnished.--Any organization required to make a return
    under subsection (a) shall furnish to each person whose name is
    required to be set forth in such return a written statement showing--
                ``(1) the name and address of the organization, and
                ``(2) the dues paid by the person during the calendar year
            and the portion of such dues which is nondeductible under
            section 162(e)(2).
    The written statement required under the preceding sentence shall be
    furnished (either in person or in a statement mailing by first-class
    mail which includes adequate notice that the statement is enclosed) to
    the persons on or before January 31 of the year following the calendar
    year for which the return under subsection (a) was made and shall be in
    such form as the Secretary may prescribe by regulations.
        ``(c) Waiver.--The Secretary may waive the reporting requirements
    of this section with respect to any organization or class of
    organizations if the Secretary determines that such reporting is not
    necessary to carry out the purposes of section 162(e).
        ``(d) Dues.--For purposes of this section, the term `dues' includes
    other similar amounts.''
                (2) Penalties.--
                        (A) Returns.--Subparagraph (A) of section
                    6724(d)(1) (defining information return) is amended by
                    striking ``or'' at the end of clause (xi), by striking
                    the period at the end of the clause (xii) relating to
                    section 4101(d) and inserting a comma, by redesignating
                    the clause (xii) relating to section 338(h)(10) as
                    clause (xiii), by striking the period at the end of
                    clause (xiii) (as so redesignated) and inserting ``,
                    or'', and by adding at the end the following new
                    clause:
                                ``(xiv) section 6050O(a) (relating to
                            information on nondeductible lobbying
                            expenditures).''
                        (B) Payee statements.--Paragraph (2) of section
                    6724(d) (defining payee statement) is amended by
                    striking ``or'' at the end of subparagraph (R), by
                    striking the period at the end of subparagraph (S) and
                    inserting ``, or'', and by adding at the end the
                    following new subparagraph:
                        ``(T) section 6050O(b) (relating to returns on
                    nondeductible lobbying expenditures).''
                        (C) Excessive underreporting.--Section 6721
                    (relating to failure to file correct information
                    returns) is amended by adding at the end the following
                    new subsection:
        ``(f) Penalty in Case of Excessive Underreporting on Nondeductible
    Dues.--If the aggregate amount of nondeductible dues which is reported
    on the return required to be filed under section 6050O(a) for any
    calendar year is less than 75 percent of the aggregate amount required
    to be so reported--
                ``(1) subsections (b), (c), and (d) shall not apply, and
                ``(2) the penalty imposed under subsection (a) shall be
            equal to the product of--
                        ``(A) the amount required to be reported which was
                    not so reported, and
                        ``(B) the highest rate of tax imposed by section 11
                    for taxable years beginning in such calendar year.''
                (3) Conforming amendment.--The table of sections for
            subpart B of part III of subchapter A of chapter 61 is amended
            by adding at the end the following new item:

                                  ``Sec. 6050O. Returns relating to
                                            lobbying expenditures of
                                            certain organizations.''
        (c) Effective Date.--The amendments made by this section shall
    apply to amounts paid or incurred after December 31, 1993.

    SEC. 14223. MARK TO MARKET ACCOUNTING METHOD FOR SECURITIES DEALERS.

        (a) General Rule.--Subpart D of part II of subchapter E of chapter
    1 (relating to inventories) is amended by adding at the end thereof the
    following new section:

    ``SEC. 475. MARK TO MARKET ACCOUNTING METHOD FOR DEALERS IN SECURITIES.

        ``(a) General Rule.--Notwithstanding any other provision of this
    subpart, the following rules shall apply to securities held by a dealer
    in securities:
                ``(1) Any security which is inventory in the hands of the
            dealer shall be included in inventory at its fair market value.
                ``(2) In the case of any security which is not inventory in
            the hands of the dealer and which is held at the close of any
            taxable year--
                        ``(A) the dealer shall recognize gain or loss as if
                    such security were sold for its fair market value on
                    the last business day of such taxable year, and
                        ``(B) any gain or loss shall be taken into account
                    for such taxable year.
            Proper adjustment shall be made in the amount of any gain or
            loss subsequently realized for gain or loss taken into account
            under the preceding sentence. The Secretary may provide by
            regulations for the application of this paragraph at times
            other than the times provided in this paragraph.
        ``(b) Exceptions.--
                ``(1) In general.--Subsection (a) shall not apply to--
                        ``(A) any security held for investment,
                        ``(B)(i) any security described in subsection
                    (c)(2)(C) which is acquired (including originated) by
                    the taxpayer in the ordinary course of a trade or
                    business of the taxpayer and which is not held for
                    sale, and (ii) any obligation to acquire a security
                    described in clause (i) if such obligation is entered
                    into in the ordinary course of such trade or business
                    and is not held for sale, and
                        ``(C) any security which is a hedge with respect
                    to--
                                ``(i) a security to which subsection (a)
                            does not apply, or
                                ``(ii) a position, right to income, or a
                            liability which is not a security in the hands
                            of the taxpayer.
            To the extent provided in regulations, subparagraph (C) shall
            not apply to any security held by a person in its capacity as a
            dealer in securities.
                ``(2) Identification required.--A security shall not be
            treated as described in subparagraph (A), (B), or (C) of
            paragraph (1), as the case may be, unless such security is
            clearly identified in the dealer's records as being described
            in such subparagraph before the close of the day on which it
            was acquired, originated, or entered into (or such other time
            as the Secretary may by regulations prescribe).
                ``(3) Securities subsequently not exempt.--If a security
            ceases to be described in paragraph (1) at any time after it
            was identified as such under paragraph (2), subsection (a)
            shall apply to any changes in value of the security occurring
            after the cessation.
                ``(4) Special rule for property held for investment.--To
            the extent provided in regulations, subparagraph (A) of
            paragraph (1) shall not apply to any security described in
            subparagraph (D) or (E) of subsection (c)(2) which is held by a
            dealer in such securities.
        ``(c) Definitions.--For purposes of this section--
                ``(1) Dealer in securities defined.--The term `dealer in
            securities' means a taxpayer who--
                        ``(A) regularly purchases securities from or sells
                    securities to customers in the ordinary course of a
                    trade or business; or
                        ``(B) regularly offers to enter into, assume,
                    offset, assign or otherwise terminate positions in
                    securities with customers in the ordinary course of a
                    trade or business.
                ``(2) Security defined.--The term `security' means any--
                        ``(A) share of stock in a corporation;
                        ``(B) partnership or beneficial ownership interest
                    in a widely held or publicly traded partnership or
                    trust;
                        ``(C) note, bond, debenture, or other evidence of
                    indebtedness;
                        ``(D) interest rate, currency, or equity notional
                    principal contract;
                        ``(E) evidence of an interest in, or a derivative
                    financial instrument in, any security described in
                    subparagraph (A), (B), (C), or (D), or any currency,
                    including any option, forward contract, short position,
                    and any similar financial instrument in such a security
                    or currency; and
                        ``(F) position which--
                                ``(i) is not a security described in
                            subparagraph (A), (B), (C), (D), or (E),
                                ``(ii) is a hedge with respect to such a
                            security, and
                                ``(iii) is clearly identified in the
                            dealer's records as being described in this
                            subparagraph before the close of the day on
                            which it was acquired or entered into (or such
                            other time as the Secretary may by regulations
                            prescribe).
            Subparagraph (E) shall not include any contract to which
            section 1256(a) applies.
                ``(3) Hedge.--The term `hedge' means any position which
            reduces the dealer's risk of interest rate or price changes or
            currency fluctuations, including any position which is
            reasonably expected to become a hedge within 60 days after the
            acquisition of the position.
        ``(d) Special Rules.--For purposes of this section--
                ``(1) Coordination with certain rules.--The rules of
            sections 263(g), 263A, and 1256(a) shall not apply to
            securities to which subsection (a) applies, and section 1091
            shall not apply (and section 1092 shall apply) to any loss
            recognized under subsection (a).
                ``(2) Improper identification.--If a taxpayer--
                        ``(A) identifies any security under subsection
                    (b)(2) as being described in subsection (b)(1) and such
                    security is not so described, or
                        ``(B) fails under subsection (c)(2)(F)(iii) to
                    identify any position which is described in subsection
                    (c)(2)(F) (without regard to clause (iii) thereof) at
                    the time such identification is required,
            the provisions of subsection (a) shall apply to such security
            or position, except that any loss under this section prior to
            the disposition of the security or position shall be recognized
            only to the extent of gain previously recognized under this
            section (and not previously taken into account under this
            paragraph) with respect to such security or position.
                ``(3) Character of gain or loss.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B) or section 1236(b)--
                                ``(i) In general.--Any gain or loss with
                            respect to a security under subsection (a)(2)
                            shall be treated as ordinary income or loss.
                                ``(ii) Special rule for dispositions.--If--
                                        ``(I) gain or loss is recognized
                                    with respect to a security before the
                                    close of the taxable year, and
                                        ``(II) subsection (a)(2) would have
                                    applied if the security were held as of
                                    the close of the taxable year,
                            such gain or loss shall be treated as ordinary
                            income or loss.
                        ``(B) Exception.--Subparagraph (A) shall not apply
                    to any gain or loss which is allocable to a period
                    during which--
                                ``(i) the security is described in
                            subsection (b)(1)(C) (without regard to
                            subsection (b)(2)),
                                ``(ii) the security is held by a person
                            other than in connection with its activities as
                            a dealer in securities, or
                                ``(iii) the security is improperly
                            identified (within the meaning of subparagraph
                            (A) or (B) of paragraph (2)).
        ``(e) Regulatory Authority.--The Secretary shall prescribe such
    regulations as may be necessary or appropriate to carry out the
    purposes of this section, including rules--
                ``(1) to prevent the use of year-end transfers, related
            parties, or other arrangements to avoid the provisions of this
            section, and
                ``(2) to provide for the application of this section to any
            security which is a hedge which cannot be identified with a
            specific security, position, right to income, or liability.''
        (b) Conforming Amendments.--
                (1) Paragraph (1) of section 988(d) is amended--
                        (A) by striking ``section 1256'' and inserting
                    ``section 475 or 1256'', and
                        (B) by striking ``1092 and 1256'' and inserting
                    ``475, 1092, and 1256''.
                (2) The table of sections for subpart D of part II of
            subchapter E of chapter 1 is amended by adding at the end
            thereof the following new item:

                                  ``Sec. 475. Mark to market accounting
                                            method for dealers in
                                            securities.''

        (c) Effective Date.--
                (1) In general.--The amendments made by this section shall
            apply to all taxable years ending on or after December 31,
            1993.
                (2) Change in method of accounting.--In the case of any
            taxpayer required by this section to change its method of
            accounting for any taxable year--
                        (A) such change shall be treated as initiated by
                    the taxpayer,
                        (B) such change shall be treated as made with the
                    consent of the Secretary, and
                        (C) except as provided in paragraph (3), the net
                    amount of the adjustments required to be taken into
                    account by the taxpayer under section 481 of the
                    Internal Revenue Code of 1986 shall be taken into
                    account ratably over the 5-taxable year period
                    beginning with the first taxable year ending on or
                    after December 31, 1993.
                (3) Special rule for floor specialists and market makers.--
                        (A) In general.--If--
                                (i) a taxpayer used the last-in first-out
                            (LIFO) method of accounting with respect to any
                            qualified securities for its last taxable year
                            ending before December 31, 1993, and
                                (ii) any portion of the net amount
                            described in paragraph (2)(C) is attributable
                            to the use of such method of accounting,
                    then paragraph (2)(C) shall be applied by taking such
                    portion into account ratably over the 20-taxable year
                    period beginning with the first taxable year ending on
                    or after December 31, 1993 (or, if shorter, the period
                    of taxable years equal to the greater of 5 years or the
                    number of taxable years before such first taxable year
                    for which the taxpayer (or any predecessor) used such
                    method of accounting).
                        (B) Qualified security.--For purposes of this
                    paragraph, the term ``qualified security'' means any
                    security acquired--
                                (i) by a floor specialist (as defined in
                            section 1236(d)(2) of the Internal Revenue Code
                            of 1986) in connection with the specialist's
                            duties as a specialist on an exchange, but only
                            if the security is one in which the specialist
                            is registered with the exchange, or
                                (ii) by a taxpayer who is a market maker in
                            connection with the taxpayer's duties as a
                            market maker, but only if--
                                        (I) the security is included on the
                                    National Association of Security
                                    Dealers Automated Quotation System,
                                        (II) the taxpayer is registered as
                                    a market maker in such security with
                                    the National Association of Security
                                    Dealers, and
                                        (III) as of the last day of the
                                    taxable year preceding the taxpayer's
                                    first taxable year ending on or after
                                    December 31, 1993, the taxpayer (or any
                                    predecessor) has been actively and
                                    regularly engaged as a market maker in
                                    such security for the 2-year period
                                    ending on such date (or, if shorter,
                                    the period beginning 61 days after the
                                    security was listed in such quotation
                                    system and ending on such date).

    SEC. 14224. CLARIFICATION OF TREATMENT OF CERTAIN FSLIC FINANCIAL
                  ASSISTANCE.

        (a) General Rule.--For purposes of chapter 1 of the Internal
    Revenue Code of 1986--
                (1) any FSLIC assistance with respect to any loss of
            principal, capital, or similar amount upon the disposition of
            any asset shall be taken into account as compensation for such
            loss for purposes of section 165 of such Code, and
                (2) any FSLIC assistance with respect to any debt shall be
            taken into account for purposes of section 166, 585, or 593 of
            such Code in determining whether such debt is worthless (or the
            extent to which such debt is worthless) and in determining the
            amount of any addition to a reserve for bad debts arising from
            the worthlessness or partial worthlessness of such debts.
        (b) FSLIC Assistance.--For purposes of this section, the term
    ``FSLIC assistance'' means any assistance (or right to assistance) with
    respect to a domestic building and loan association (as defined in
    section 7701(a)(19) of such Code without regard to subparagraph (C)
    thereof) under section 406(f) of the National Housing Act or section
    21A of the Federal Home Loan Bank Act (or under any similar provision
    of law).
        (c) Effective Date.--
                (1) In general.--Except as otherwise provided in this
            subsection--
                        (A) The provisions of this section shall apply to
                    taxable years ending on or after March 4, 1991, but
                    only with respect to FSLIC assistance not credited
                    before March 4, 1991.
                        (B) If any FSLIC assistance not credited before
                    March 4, 1991, is with respect to a loss sustained or
                    charge-off in a taxable year ending before March 4,
                    1991, for purposes of determining the amount of any net
                    operating loss carryover to a taxable year ending on or
                    after March 4, 1991, the provisions of this section
                    shall apply to such assistance for purposes of
                    determining the amount of the net operating loss for
                    the taxable year in which such loss was sustained or
                    debt written off. Except as provided in the preceding
                    sentence, this section shall not apply to any FSLIC
                    assistance with respect to a loss sustained or charge-
                    off in a taxable year ending before March 4, 1991.
                (2) Exceptions.--The provisions of this section shall not
            apply to any assistance to which the amendments made by section
            1401(a)(3) of the Financial Institutions Reform, Recovery, and
            Enforcement Act of 1989 apply.

    SEC. 14225. MODIFICATION OF CORPORATE ESTIMATED TAX RULES.

        (a) Increase in Required Installment Based on Current Year Tax.--
                (1) In general.--Clause (i) of section 6655(d)(1)(B)
            (relating to amount of required installment) is amended by
            striking ``91 percent'' each place it appears and inserting
            ``100 percent''.
                (2) Conforming amendments.--
                        (A) Subsection (d) of section 6655 is amended--
                                (i) by striking paragraph (3), and
                                (ii) by striking ``91 percent'' in the
                            paragraph heading of paragraph (2) and
                            inserting ``100 percent''.
                        (B) Clause (ii) of section 6655(e)(2)(B) is amended
                    by striking the table contained therein and inserting
                    the following:

    ``In the case of the following re-                       The applicable
      quired installments:                                   percentage is:
        1st...........................................               25
        2nd...........................................               50
        3rd...........................................               75
        4th...........................................           100.''
                        (C) Clause (i) of section 6655(e)(3)(A) is amended
                    by striking ``91 percent'' and inserting ``100
                    percent''.
        (b) Modification of Periods for Applying Annualization.--
                (1) Clause (i) of section 6655(e)(2)(A) is amended--
                        (A) by striking ``or for the first 5 months'' in
                    subclause (II),
                        (B) by striking ``or for the first 8 months'' in
                    subclause (III), and
                        (C) by striking ``or for the first 11 months'' in
                    subclause (IV).
                (2) Paragraph (2) of section 6655(e) is amended by adding
            at the end thereof the following new subparagraph:
                        ``(C) Election for different annualization
                    periods.--
                                ``(i) If the taxpayer makes an election
                            under this clause--
                                        ``(I) subclause (I) of subparagraph
                                    (A)(i) shall be applied by substituting
                                    `2 months' for `3 months',
                                        ``(II) subclause (II) of
                                    subparagraph (A)(i) shall be applied by
                                    substituting `4 months' for `3 months',
                                        ``(III) subclause (III) of
                                    subparagraph (A)(i) shall be applied by
                                    substituting `7 months' for `6 months',
                                    and
                                        ``(IV) subclause (IV) of
                                    subparagraph (A)(i) shall be applied by
                                    substituting `10 months' for `9
                                    months'.
                                ``(ii) If the taxpayer makes an election
                            under this clause--
                                        ``(I) subclause (II) of
                                    subparagraph (A)(i) shall be applied by
                                    substituting `5 months' for `3 months',
                                        ``(II) subclause (III) of
                                    subparagraph (A)(i) shall be applied by
                                    substituting `8 months' for `6 months',
                                    and
                                        ``(III) subclause (IV) of
                                    subparagraph (A)(i) shall be applied by
                                    substituting `11 months' for `9
                                    months'.
                                ``(iii) An election under clause (i) or
                            (ii) shall apply to the taxable year for which
                            made and such an election shall be effective
                            only if made on or before the date required for
                            the payment of the first required installment
                            for such taxable year.''
                (3) The last sentence of section 6655(f)(3)(A) is amended
            by striking ``and subsection (e)(2)(A)'' and inserting ``and,
            except in the case of an election under subsection (e)(2)(C),
            subsection (e)(2)(A)''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1993.

    SEC. 14226. LIMITATION ON SECTION 936 CREDIT.

        (a) General Rule.--Subsection (a) of section 936 (relating to
    Puerto Rico and possession tax credit) is amended--
                (1) by striking ``as provided in paragraph (3)'' in
            paragraph (1) and inserting ``as otherwise provided in this
            section'';
                (2) by adding at the end thereof the following new
            paragraph:
                ``(4) Limitations on credit.--
                        ``(A) Credit for active business income.--The
                    amount of the credit determined under paragraph (1)(A)
                    for any taxable year shall not exceed 60 percent of the
                    aggregate amount of the possession corporation's
                    qualified possession wages for such taxable year.
                        ``(B) Credit for investment income.--
                                ``(i) In general.--If--
                                        ``(I) the QPSII assets of the
                                    possession corporation for any taxable
                                    year, exceed
                                        ``(II) 80 percent of such
                                    possession corporation's qualified
                                    tangible business investment for such
                                    taxable year,
                            the credit determined under paragraph (1)(B)
                            for such taxable year shall be reduced by the
                            amount determined under clause (ii).
                                ``(ii) Amount of reduction.--The reduction
                            determined under this clause for any taxable
                            year is an amount which bears the same ratio to
                            the credit determined under paragraph (1)(B)
                            for such taxable year (determined without
                            regard to this subparagraph) as--
                                        ``(I) the excess determined under
                                    clause (i), bears to
                                        ``(II) the QPSII assets of the
                                    possession corporation for such taxable
                                    year.
                        ``(C) Cross reference.--

                                    ``For definitions and special rules
    applicable to this paragraph, see subsection (i).''
        (b) Definitions and Special Rules.--Section 936 is amended by
    adding at the end thereof the following new subsection:
        ``(i) Definitions and Special Rules Relating to Limitations of
    Subsection (a)(4).--
                ``(1) Qualified possession wages.--For purposes of this
            section--
                        ``(A) In general.--The term `qualified possession
                    wages' means wages paid or incurred by the possession
                    corporation during the taxable year to any employee for
                    services performed in a possession of the United
                    States, but only if such services are performed while
                    the principal place of employment of such employee is
                    within such possession.
                        ``(B) Limitation on amount of wages taken into
                    account.--
                                ``(i) In general.--The amount of wages
                            which may be taken into account under
                            subparagraph (A) with respect to any employee
                            for any taxable year shall not exceed the
                            contribution and benefit base determined under
                            section 230 of the Social Security Act for the
                            calendar year in which such taxable year
                            begins.
                                ``(ii) Treatment of part-time employees,
                            etc.--If--
                                        ``(I) any employee is not employed
                                    by the possession corporation on a
                                    substantially full-time basis at all
                                    times during the taxable year, or
                                        ``(II) the principal place of
                                    employment of any employee with the
                                    possession corporation is not within a
                                    possession at all times during the
                                    taxable year,
                            the limitation applicable under clause (i) with
                            respect to such employee shall be the
                            appropriate portion (as determined by the
                            Secretary) of the limitation which would
                            otherwise be in effect under clause (i).
                        ``(C) Treatment of certain employees.--The term
                    `qualified possession wages' shall not include any
                    wages paid to employees who are assigned by the
                    employer to perform services for another person, unless
                    the principal trade or business of the employer is to
                    make employees available for temporary periods to other
                    persons in return for compensation. All possession
                    corporations treated as 1 corporation under paragraph
                    (4) shall be treated as 1 employer for purposes of the
                    preceding sentence.
                        ``(D) Wages.--
                                ``(i) In general.--Except as provided in
                            clause (ii), the term `wages' has the meaning
                            given to such term by subsection (b) of section
                            3306 (determined without regard to any dollar
                            limitation contained in such section). For
                            purposes of the preceding sentence, such
                            subsection (b) shall be applied as if the term
                            `United States' included all possessions of the
                            United States.
                                ``(ii) Special rule for agricultural labor
                            and railway labor.--In any case to which
                            subparagraph (A) or (B) of paragraph (1) of
                            section 51(h) applies, the term `wages' has the
                            meaning given to such term by section 51(h)(2).
                ``(2) QPSII assets.--For purposes of this section--
                        ``(A) In general.--The QPSII assets of a possession
                    corporation for any taxable year is the average of the
                    amounts of the possession corporation's qualified
                    investment assets as of the close of each quarter of
                    such taxable year.
                        ``(B) Qualified investment assets.--The term
                    `qualified investment assets' means the aggregate
                    adjusted bases of the assets which are held by the
                    possession corporation and the income from which
                    qualifies as qualified possession source investment
                    income. For purposes of the preceding sentence, the
                    adjusted basis of any asset shall be its adjusted basis
                    as determined for purposes of computing earnings and
                    profits.
                ``(3) Qualified tangible business investment.--For purposes
            of this section--
                        ``(A) In general.--The qualified tangible business
                    investment of any possession corporation for any
                    taxable year is the average of the amounts of the
                    possession corporation's qualified possession
                    investments as of the close of each quarter of such
                    taxable year.
                        ``(B) Qualified possession investments.--The term
                    `qualified possession investments' means the aggregate
                    adjusted bases of tangible property used by the
                    possession corporation in a possession of the United
                    States in the active conduct of a trade or business
                    within such possession. For purposes of the preceding
                    sentence, the adjusted basis of any property shall be
                    its adjusted basis as determined for purposes of
                    computing earnings and profits.
                ``(4) Relocated businesses.--
                        ``(A) In general.--In determining--
                                ``(i) the possession corporation's
                            qualified possession wages for any taxable
                            year, and
                                ``(ii) the possession corporation's
                            qualified tangible business investment for such
                            taxable year,
                    there shall be excluded all wages and all qualified
                    possession investments which are allocable to a
                    disqualified relocated business.
                        ``(B) Disqualified relocated business.--For
                    purposes of subparagraph (A), the term `disqualified
                    relocated business' means any trade or business
                    commenced by the possession corporation after May 13,
                    1993, or any addition after such date to an existing
                    trade or business of such possession corporation
                    unless--
                                ``(i) the possession corporation certifies
                            that the commencement of such trade or business
                            or such addition will not result in a decrease
                            in employment at an existing business operation
                            located in the United States, and
                                ``(ii) there is no reason to believe that
                            such commencement or addition was done with the
                            intention of closing down operations of an
                            existing business located in the United States.
                ``(5) Election to compute credit on consolidated basis.--
                        ``(A) In general.--Any affiliated group may elect
                    to treat all possession corporations which would be
                    members of such group but for section 1504(b)(4) as 1
                    corporation for purposes of this section. The credit
                    determined under this section with respect to such 1
                    corporation shall be allocated among such possession
                    corporations in such manner as the Secretary may
                    prescribe.
                        ``(B) Election.--An election under subparagraph (A)
                    shall apply to the taxable year for which made and all
                    succeeding taxable years unless revoked with the
                    consent of the Secretary.
                ``(6) Treatment of certain taxes.--Notwithstanding
            subsection (c), if--
                        ``(A) the credit determined under subsection (a)(1)
                    for any taxable year is limited under subsection
                    (a)(4), and
                        ``(B) the possession corporation has paid or
                    accrued any taxes of a possession of the United States
                    for such taxable year which are treated as not being
                    income, war profits, or excess profits taxes paid or
                    accrued to a possession of the United States by reason
                    of subsection (c),
            such possession corporation shall be allowed a deduction for
            such taxable year equal to the portion of such taxes which are
            allocable (on a pro rata basis) to taxable income of the
            possession corporation the tax on which is not offset by reason
            of the limitations of subsection (a)(4). In determining the
            credit under subsection (a) and in applying the preceding
            sentence, taxable income shall be determined without regard to
            the preceding sentence.
                ``(7) Possession corporation.--The term `possession
            corporation' means a domestic corporation for which the
            election provided in subsection (a) is in effect.
                ``(8) Transitional rule.--If any possession corporation
            elects the benefits of this paragraph for any taxable year
            beginning in 1994 or 1995--
                        ``(A) subsection (a)(4) shall not apply to such
                    taxable year, and
                        ``(B) the credit determined under subsection (a)(1)
                    for such taxable year shall be the following percentage
                    of the credit which would otherwise have been
                    determined under such subsection:
                                ``(i) 80 percent in the case of a taxable
                            year beginning in 1994.
                                ``(ii) 60 percent in the case of a taxable
                            year beginning in 1995.
                    A possession corporation which elects the benefits of
                    this paragraph shall be entitled to the benefits of
                    paragraph (6) for taxes allocable to taxable income the
                    tax on which is not offset by reason of this
                    paragraph.''
        (c) Minimum Tax Treatment.--
                (1) In general.--Clause (ii) of section 56(g)(4)(C)
            (relating to treatment of special rule for certain dividends)
            is amended by striking ``sections 936 and 921'' and inserting
            ``sections 936 (including subsection (a)(4) thereof) and 921''.
                (2) Treatment of foreign taxes.--Clause (iii) of section
            56(g)(4)(C) is amended by adding at the end thereof the
            following subclauses:
                                        ``(IV) Separate application of
                                    foreign tax credit limitations.--In
                                    determining the alternative minimum
                                    foreign tax credit, section 904(d)
                                    shall be applied as if dividends from a
                                    corporation eligible for the credit
                                    provided by section 936 were a separate
                                    category of income referred to in a
                                    subparagraph of section 904(d)(1).
                                        ``(V) Coordination with limitation
                                    on 936 credit.--Any reference in this
                                    clause to a dividend received from a
                                    corporation eligible for the credit
                                    provided by section 936 shall be
                                    treated as a reference to the portion
                                    of any such dividend for which the
                                    dividends received deduction is
                                    disallowed under clause (i) after the
                                    application of clause (ii)(I).''
        (d) Conforming Amendment.--Paragraph (4) of section 904(b) is
    amended by inserting before the period at the end thereof the
    following: ``(without regard to subsection (a)(4) thereof)''.
        (e) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1993.

    SEC. 14227. MODIFICATION TO LIMITATION ON DEDUCTION FOR CERTAIN
                  INTEREST.

        (a) General Rule.--Paragraph (3) of section 163(j) (defining
    disqualified interest) is amended to read as follows:
                ``(3) Disqualified interest.--For purposes of this
            subsection, the term `disqualified interest' means--
                        ``(A) any interest paid or accrued by the taxpayer
                    (directly or indirectly) to a related person if no tax
                    is imposed by this subtitle with respect to such
                    interest, and
                        ``(B) any interest paid or accrued by the taxpayer
                    with respect to any indebtedness to a person who is not
                    a related person if--
                                ``(i) there is a disqualified guarantee of
                            such indebtedness, and
                                ``(ii) no gross basis tax is imposed by
                            this subtitle with respect to such interest.''
        (b) Definitions.--Paragraph (6) of section 163(j) is amended by
    adding at the end thereof the following new subparagraphs:
                        ``(D) Disqualified guarantee.--
                                ``(i) In general.--Except as provided in
                            clause (ii), the term `disqualified guarantee'
                            means any guarantee by a related person which
                            is--
                                        ``(I) an organization exempt from
                                    taxation under this subtitle, or
                                        ``(II) a foreign person.
                                ``(ii) Exceptions.--The term `disqualified
                            guarantee' shall not include a guarantee--
                                        ``(I) in any circumstances
                                    identified by the Secretary by
                                    regulation, where the interest on the
                                    indebtedness would have been subject to
                                    a net basis tax if the interest had
                                    been paid to the guarantor, or
                                        ``(II) if the taxpayer owns a
                                    controlling interest in the guarantor.
                            For purposes of subclause (II), except as
                            provided in regulations, the term `a
                            controlling interest' means direct or indirect
                            ownership of at least 80 percent of the total
                            voting power and value of all classes of stock
                            of a corporation, or 80 percent of the profit
                            and capital interests in any other entity. For
                            purposes of the preceding sentence, the rules
                            of paragraphs (1) and (5) of section 267(c)
                            shall apply; except that such rules shall also
                            apply to interest in entities other than
                            corporations.
                                ``(iii) Guarantee.--Except as provided in
                            regulations, the term `guarantee' includes any
                            arrangement under which a person (directly or
                            indirectly through an entity or otherwise)
                            assures, on a conditional or unconditional
                            basis, the payment of another person's
                            obligation under any indebtedness.
                        ``(E) Gross basis and net basis taxation.--
                                ``(i) Gross basis tax.--The term `gross
                            basis tax' means any tax imposed by this
                            subtitle which is determined by reference to
                            the gross amount of any item of income without
                            any reduction for any deduction allowed by this
                            subtitle.
                                ``(ii) Net basis tax.--The term `net basis
                            tax' means any tax imposed by this subtitle
                            which is a not a gross basis tax.''
        (c) Conforming Amendment.--Subparagraph (B) of section 163(j)(5) is
    amended by striking ``to a related person''.
        (d) Effective Date.--The amendments made by this section shall
    apply to interest paid or accrued in taxable years beginning after
    December 31, 1993.

                        PART III--FOREIGN TAX PROVISIONS

     Subpart A--Current Taxation of Certain Earnings of Controlled Foreign
                                  Corporations

    SEC. 14231. EARNINGS INVESTED IN EXCESS PASSIVE ASSETS.

        (a) General Rule.--Paragraph (1) of section 951(a) (relating to
    amounts included in gross income of United States shareholders) is
    amended by striking ``and'' at the end of subparagraph (A), by striking
    the period at the end of subparagraph (B) and inserting ``; and'', and
    by adding at the end thereof the following new subparagraph:
                        ``(C) the amount determined under section 956A with
                    respect to such shareholder for such year (but only to
                    the extent not excluded from gross income under section
                    959(a)(3)).''
        (b) Amount of Inclusion.--Subpart F of part III of subchapter N of
    chapter 1 is amended by inserting after section 956 the following new
    section:

    ``SEC. 956A. EARNINGS INVESTED IN EXCESS PASSIVE ASSETS.

        ``(a) General Rule.--In the case of any controlled foreign
    corporation, the amount determined under this section with respect to
    any United States shareholder for any taxable year is the lesser of--
                ``(1) the excess (if any) of--
                        ``(A) such shareholder's pro rata share of the
                    amount of the controlled foreign corporation's excess
                    passive assets for such taxable year, over
                        ``(B) the amount of earnings and profits described
                    in section 959(c)(1)(B) with respect to such
                    shareholder, or
                ``(2) such shareholder's pro rata share of the applicable
            earnings of such controlled foreign corporation determined
            after the application of section 951(a)(1)(B).
        ``(b) Applicable Earnings.--For purposes of this section, the term
    `applicable earnings' means, with respect to any controlled foreign
    corporation, the amounts referred to in sections 316(a)(1) and
    316(a)(2) (but reduced by distributions made during the taxable year),
    reduced by the earnings and profits described in section 959(c)(1).
        ``(c) Excess Passive Assets.--For purposes of this section--
                ``(1) In general.--The excess passive assets of any
            controlled foreign corporation for any taxable year is the
            excess (if any) of--
                        ``(A) the average of the amounts of passive assets
                    held by such corporation as of the close of each
                    quarter of such taxable year, over
                        ``(B) 25 percent of the average of the amounts of
                    total assets held by such corporation as of the close
                    of each quarter of such taxable year.
            For purposes of the preceding sentence, the amount taken into
            account with respect to any asset shall be its adjusted basis
            as determined for purposes of computing earnings and profits.
                ``(2) Passive asset.--
                        ``(A) In general.--Except as otherwise provided in
                    this section, the term `passive asset' means any asset
                    held by the controlled foreign corporation which
                    produces passive income (as defined in section 1296(b))
                    or is held for the production of such income.
                        ``(B) Coordination with section 956.--The term
                    `passive asset' shall not include any United States
                    property (as defined in section 956).
                ``(3) Look-thru rules made applicable.--For purposes of
            this subsection, the rules of section 1296(c) shall apply.
                ``(4) Leasing rules made applicable.--For purposes of this
            subsection, the rules of section 1297(d) shall apply.
        ``(d) Special Rule Where Corporation Ceases To Be Controlled
    Foreign Corporation During Taxable Year.--If any foreign corporation
    ceases to be a controlled foreign corporation during any taxable year--
                ``(1) the determination of any United States shareholder's
            pro rata share shall be made on the basis of stock owned
            (within the meaning of section 958(a)) by such shareholder on
            the last day during the taxable year on which the foreign
            corporation is a controlled foreign corporation, and
                ``(2) the amount of such corporation's excess passive
            assets for such taxable year shall be determined by only taking
            into account quarters ending on or before such last day, and
                ``(3) in determining applicable earnings, the amount taken
            into account by reason of being described in paragraph (2) of
            section 316(a) shall be the portion of the amount so described
            which is allocable (on a pro rata basis) to the part of such
            year during which the corporation is a controlled foreign
            corporation.
        ``(e) Transition Rule.--In the case of any taxable year of a
    controlled foreign corporation beginning after September 30, 1993, and
    before October 1, 1997, the amount determined under subsection (a)
    shall be the applicable percentage (determined under the following
    table) of the amount which would otherwise be determined under such
    subsection:

    ``In the case of a taxable year
      beginning during the 1-year period
                                                             The applicable
      beginning on:
                                                             percentage is:
        October 1, 1993...............................               20
        October 1, 1994...............................               25
        October 1, 1995...............................               35
        October 1, 1996...............................              50.
        ``(f) Regulations.--The Secretary shall prescribe such regulations
    as may be necessary to carry out the purposes of this section,
    including regulations to prevent the avoidance of the provisions of
    this section through reorganizations or otherwise.''
        (c) Previously Taxed Income Rules.--
                (1) In general.--Subsection (a) of section 959 (relating to
            exclusion from gross income of previously taxed earnings and
            profits) is amended by striking ``or'' at the end of paragraph
            (1), by adding ``or'' at the end of paragraph (2), and by
            inserting after paragraph (2) the following new paragraph:
                ``(3) such amounts would, but for this subsection, be
            included under section 951(a)(1)(C) in the gross income of,''.
                (2) Allocation rules.--
                        (A) Subsection (a) of section 959 is amended by
                    adding at the end thereof the following new sentence:
                    ``The rules of subsection (c) shall apply for purposes
                    of paragraph (1) of this subsection and the rules of
                    subsection (f) shall apply for purposes of paragraphs
                    (2) and (3) of this subsection.''.
                        (B) Section 959 is amended by adding at the end
                    thereof the following new subsection:
        ``(f) Allocation Rules for Certain Inclusions.--
                ``(1) In general.--For purposes of this section, amounts
            that would be included under subparagraph (B) or (C) of section
            951(a)(1) (determined without regard to this section) shall be
            treated as attributable first to earnings described in
            subsection (c)(2), and then to earnings described in subsection
            (c)(3).
                ``(2) Treatment of distributions.--In applying this
            section, actual distributions shall be taken into account
            before amounts that would be included under subparagraphs (B)
            and (C) of section 951(a)(1) (determined without regard to this
            section).''
                        (C) Paragraph (1) of section 959(c) is amended to
                    read as follows:
                ``(1) first to the aggregate of--
                        ``(A) earnings and profits attributable to amounts
                    included in gross income under section 951(a)(1)(B) (or
                    which would have been included except for subsection
                    (a)(2) of this section), and
                        ``(B) earnings and profits attributable to amounts
                    included in gross income under section 951(a)(1)(C) (or
                    which would have been included except for subsection
                    (a)(3) of this section),
            with any distribution being allocated between earnings and
            profits described in subparagraph (A) and earnings and profits
            described in subparagraph (B) proportionately on the basis of
            the respective amounts of such earnings and profits,''.
                (3) Conforming amendments.--
                        (A) Subsections (a) and (b) of section 959 are each
                    amended by striking ``earnings and profits for a
                    taxable year'' and inserting ``earnings and profits''.
                        (B) Paragraph (2) of section 959(c) is amended to
                    read as follows:
                ``(2) then to earnings and profits attributable to amounts
            included in gross income under section 951(a)(1)(A) (but
            reduced by amounts not included under subparagraph (B) or (C)
            of section 951(a)(1) because of the exclusions in paragraphs
            (2) and (3) of subsection (a) of this section), and''
                        (C) Subsection (b) of section 989 is amended by
                    striking ``section 951(a)(1)(B)'' and inserting
                    ``subparagraph (B) or (C) of section 951(a)(1)''.
        (d) Modifications to Passive Foreign Investment Company Rules.--
                (1) Adjusted basis used in certain determinations.--
            Subsection (a) of section 1296 is amended by striking the
            material following paragraph (2) and inserting the following:
    ``In the case of a controlled foreign corporation (or any other foreign
    corporation if such corporation so elects), the determination under
    paragraph (2) shall be based on the adjusted bases (as determined for
    purposes of computing earnings and profits) of its assets in lieu of
    their value. Such an election, once made, may be revoked only with the
    consent of the Secretary.''
                (2) Treatment of certain subpart f inclusions.--Subsection
            (b) of section 1297 is amended by adding at the end thereof the
            following new paragraph:
                ``(9) Treatment of certain subpart f inclusions.--Any
            amount included in gross income under subparagraph (B) or (C)
            of section 951(a)(1) shall be treated as a distribution
            received with respect to the stock.''
                (3) Treatment of certain dealers in securities.--Subsection
            (b) of section 1296 is amended by adding at the end thereof the
            following new paragraph:
                ``(3) Treatment of certain dealers in securities.--
                        ``(A) In general.--In the case of any foreign
                    corporation which is a controlled foreign corporation
                    (as defined in section 957(a)), the term `passive
                    income' does not include any income derived in the
                    active conduct of a securities business by such
                    corporation if such corporation is registered as a
                    securities broker or dealer under section 15(a) of the
                    Securities Exchange Act of 1934 or is registered as a
                    Government securities broker or dealer under section
                    15C(a) of such Act. To the extent provided in
                    regulations, such term shall not include any income
                    derived in the active conduct of a securities business
                    by a controlled foreign corporation which is not so
                    registered.
                        ``(B) Application of look-thru rules.--For purposes
                    of paragraph (2)(C), rules similar to the rules of
                    subparagraph (A) shall apply in determining whether any
                    income of a related person (whether or not a
                    corporation) is passive income.
                        ``(C) Limitation.--The preceding provisions of this
                    paragraph shall only apply in the case of persons who
                    are United States shareholders (as defined in section
                    951(b)) in the controlled foreign corporation.''
                (4) Leasing rules.--Section 1297 is amended by
            redesignating subsection (d) as subsection (e) and by inserting
            after subsection (c) the following new subsection:
        ``(d) Treatment of Certain Leased Property.--For purposes of this
    part:
                ``(1) In general.--Any tangible personal property with
            respect to which a foreign corporation is the lessee under a
            lease with a term of at least 12 months shall be treated as an
            asset actually held by such corporation.
                ``(2) Determination of adjusted basis.--
                        ``(A) In general.--The adjusted basis of any asset
                    to which paragraph (1) applies shall be the unamortized
                    portion (as determined under regulations prescribed by
                    the Secretary) of the present value of the payments
                    under the lease for the use of such property.
                        ``(B) Present value.--For purposes of subparagraph
                    (A), the present value of payments described in
                    subparagraph (A) shall be determined in the manner
                    provided in regulations prescribed by the Secretary--
                                ``(i) as of the beginning of the lease
                            term, and
                                ``(ii) except as provided in such
                            regulations, by using a discount rate equal to
                            the applicable Federal rate determined under
                            section 1274(d)--
                                        ``(I) by substituting the lease
                                    term for the term of the debt
                                    instrument, and
                                        ``(II) without regard to paragraph
                                    (2) or (3) thereof.
                ``(3) Exceptions.--This subsection shall not apply in any
            case where--
                        ``(A) the lessor is a related person (as defined in
                    section 954(d)(3)) with respect to the foreign
                    corporation, or
                        ``(B) a principal purpose of leasing the property
                    was to avoid the provisions of this section.''
        (e) Effective Date.--The amendments made by this section shall
    apply to taxable years of foreign corporations beginning after
    September 30, 1993, and to taxable years of United States shareholders
    in which or with which such taxable years of foreign corporations end.

    SEC. 14232. MODIFICATION TO TAXATION OF INVESTMENT IN UNITED STATES
                  PROPERTY.

        (a) General Rule.--Section 956 (relating to investment of earnings
    in United States property) is amended--
                (1) by redesignating subsections (b) and (c) as subsections
            (c) and (d), respectively, and
                (2) by striking subsection (a) and inserting the following:
        ``(a) General Rule.--In the case of any controlled foreign
    corporation, the amount determined under this section with respect to
    any United States shareholder for any taxable year is the lesser of--
                ``(1) the excess (if any) of--
                        ``(A) such shareholder's pro rata share of the
                    average of the amounts of United States property held
                    (directly or indirectly) by the controlled foreign
                    corporation as of the close of each quarter of such
                    taxable year, over
                        ``(B) the amount of earnings and profits described
                    in section 959(c)(1)(A) with respect to such
                    shareholder, or
                ``(2) such shareholder's pro rata share of the applicable
            earnings of such controlled foreign corporation.
    The amount taken into account under paragraph (1) with respect to any
    property shall be its adjusted basis as determined for purposes of
    computing earnings and profits, reduced by any liability to which the
    property is subject.
        ``(b) Adjustments for Certain Distributions; Other Special Rules.--
                ``(1) Applicable earnings.--For purposes of this section,
            the term `applicable earnings' has the meaning given to such
            term by section 956A(b).
                ``(2) Special rule where corporation ceases to be
            controlled foreign corporation.--Rules similar to the rules of
            section 956A(d) shall apply for purposes of this section.''
        (b) Conforming Amendments.--
                (1) Subparagraph (B) of section 951(a)(1) is amended to
            read as follows:
                        ``(B) the amount determined under section 956 with
                    respect to such shareholder for such year (but only to
                    the extent not excluded from gross income under section
                    959(a)(2)); and''
                (2) Subsection (a) of section 951 is amended by striking
            paragraph (4).
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years of controlled foreign corporations beginning
    after September 30, 1993, and to taxable years of United States
    shareholders in which or with which such taxable years of controlled
    foreign corporations end.
        (d) Study of Investments by Controlled Foreign Corporations in
    United States Property.--
                (1) In general.--The Secretary of the Treasury shall
            conduct a study of the tax treatment of investments by
            controlled foreign corporations in obligations of United States
            persons other than corporations. Such study shall include the
            Secretary's views as to whether the treatment of such
            investments should be changed, along with a discussion of the
            merits and consequences of any such change.
                (2) Report.--Not later than December 31, 1993, the
            Secretary of the Treasury shall submit to the Committee on Ways
            and Means of the House of Representatives and the Committee on
            Finance of the Senate a report on the study conducted under
            this subsection, together with such recommendations as he may
            deem advisable.

    SEC. 14233. OTHER MODIFICATIONS TO SUBPART F.

        (a) Same Country Exception Not To Apply to Certain Dividends.--
                (1) In general.--Paragraph (3) of section 954(c) (relating
            to certain income received from related persons) is amended by
            adding at the end thereof the following new subparagraph:
                        ``(C) Exception for certain dividends.--
                    Subparagraph (A)(i) shall not apply to any dividend
                    with respect to any stock which is attributable to
                    earnings and profits of the distributing corporation
                    accumulated during any period during which the person
                    receiving such dividend did not hold such stock.''
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to taxable years of controlled foreign corporations
            beginning after September 30, 1993, and to taxable years of
            United States shareholders in which or with which such taxable
            years of controlled foreign corporations end.
        (b) Simplification of Section 960(b).--
                (1) In general.--Subsection (b) of section 960 is amended--
                        (A) by redesignating paragraphs (3) and (4) as
                    paragraphs (4) and (5), respectively, and
                        (B) by striking paragraphs (1) and (2) and
                    inserting the following new paragraphs:
                ``(1) Increase in section 904 limitation.--In the case of
            any taxpayer who--
                        ``(A) either (i) chose to have the benefits of
                    subpart A of this part for a taxable year beginning
                    after September 30, 1993, in which he was required
                    under section 951(a) to include any amount in his gross
                    income, or (ii) did not pay or accrue for such taxable
                    year any income, war profits, or excess profits taxes
                    to any foreign country or to any possession of the
                    United States,
                        ``(B) chooses to have the benefits of subpart A of
                    this part for any taxable year in which he receives 1
                    or more distributions or amounts which are excludable
                    from gross income under section 959(a) and which are
                    attributable to amounts included in his gross income
                    for taxable years referred to in subparagraph (A), and
                        ``(C) for the taxable year in which such
                    distributions or amounts are received, pays, or is
                    deemed to have paid, or accrues income, war profits, or
                    excess profits taxes to a foreign country or to any
                    possession of the United States with respect to such
                    distributions or amounts,
            the limitation under section 904 for the taxable year in which
            such distributions or amounts are received shall be increased
            by the lesser of the amount of such taxes paid, or deemed paid,
            or accrued with respect to such distributions or amounts or the
            amount in the excess limitation account as of the beginning of
            such taxable year.
                ``(2) Excess limitation account.--
                        ``(A) Establishment of account.--Each taxpayer
                    meeting the requirements of paragraph (1)(A) shall
                    establish an excess limitation account. The opening
                    balance of such account shall be zero.
                        ``(B) Increases in account.--For each taxable year
                    beginning after September 30, 1993, the taxpayer shall
                    increase the amount in the excess limitation account by
                    the excess (if any) of--
                                ``(i) the amount by which the limitation
                            under section 904(a) for such taxable year was
                            increased by reason of the total amount of the
                            inclusions in gross income under section 951(a)
                            for such taxable year, over
                                ``(ii) the amount of any income, war
                            profits, and excess profits taxes paid, or
                            deemed paid, or accrued to any foreign country
                            or possession of the United States which were
                            allowable as a credit under section 901 for
                            such taxable year and which would not have been
                            allowable but for the inclusions in gross
                            income described in clause (i).
                    Proper reductions in the amount added to the account
                    under the preceding sentence for any taxable year shall
                    be made for any increase in the credit allowable under
                    section 901 for such taxable year by reason of a
                    carryback if such increase would not have been
                    allowable but for the inclusions in gross income
                    described in clause (i).
                        ``(C) Decreases in account.--For each taxable year
                    beginning after September 30, 1993, for which the
                    limitation under section 904 was increased under
                    paragraph (1), the taxpayer shall reduce the amount in
                    the excess limitation account by the amount of such
                    increase.
                ``(3) Distributions of income previously taxed in years
            beginning before october 1, 1993.--If the taxpayer receives a
            distribution or amount in a taxable year beginning after
            September 30, 1993, which is excluded from gross income under
            section 959(a) and is attributable to any amount included in
            gross income under section 951(a) for a taxable year beginning
            before October 1, 1993, the limitation under section 904 for
            the taxable year in which such amount or distribution is
            received shall be increased by the amount determined under this
            subsection as in effect on the day before the date of the
            enactment of the Revenue Reconcilation Act of 1993.''
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to taxable years beginning after September 30,
            1993.

        Subpart B--Allocation of Research and Experimental Expenditures

    SEC. 14234. ALLOCATION OF RESEARCH AND EXPERIMENTAL EXPENDITURES.

        (a) General Rule.--Subparagraph (B) of section 864(f)(1) (relating
    to allocation of research and experimental expenditures) is amended by
    striking ``64 percent'' each place it appears and inserting ``50
    percent''.
        (b) Conforming Amendments.--
                (1) Subsection (f) of section 864 is amended by striking
            paragraph (5) and inserting the following:
                ``(5) Regulations.--The Secretary shall prescribe such
            regulations as may be appropriate to carry out the purposes of
            this subsection, including regulations relating to the
            determination of whether any expenses are attributable to
            activities conducted in the United States or outside the United
            States and regulations providing such adjustments to the
            provisions of this subsection as may be appropriate in the case
            of cost-sharing arrangements and contract research.''
                (2) Subparagraph (D) of section 864(f)(4) is amended by
            striking ``subparagraph (C)'' and inserting ``subparagraph (B)
            or (C)''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years ending after the date of the enactment of this
    Act; except that such amendments shall not apply in the case of any
    taxable year to which Revenue Procedure 92-56 applies or would apply if
    the taxpayer elected the benefits of such Revenue Procedure.

                          Subpart C--Other Provisions

    SEC. 14235. REPEAL OF CERTAIN EXCEPTIONS FOR WORKING CAPITAL.

        (a) Provisions Relating to Oil and Gas Income.--
                (1) Amendments to section 907.--
                        (A) Paragraph (1) of section 907(c) is amended by
                    adding at the end thereof the following new flush
                    sentence:
    ``Such term does not include any dividend or interest income which is
    passive income (as defined in section 904(d)(2)(A)).''.
                        (B) Paragraph (2) of section 907(c) is amended by
                    adding at the end thereof the following new flush
                    sentence:
    ``Such term does not include any dividend or interest income which is
    passive income (as defined in section 904(d)(2)(A)).''.
                (2) Separate application of foreign tax credit.--Clause
            (iii) of section 904(d)(2)(A) is amended by inserting ``and''
            at the end of subclause (II), by striking ``, and'' at the end
            of subclause (III) and inserting a period, and by striking
            subclause (IV).
                (3) Treatment under subpart f.--
                        (A) Paragraph (1) of section 954(g) is amended by
                    adding at the end thereof the following new flush
                    sentence:
    Such term shall not include any foreign personal holding company income
    (as defined in subsection (c)).''.
                        (B) Paragraph (8) of section 954(b) is amended by
                    striking ``(1),''.
        (b) Treatment of Shipping Income.--Subsection (f) of section 954 is
    amended by adding at the end thereof the following new sentence: ``Such
    term shall not include any dividend or interest income which is foreign
    personal holding company income (as defined in subsection (c)).''.
        (c) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1992.

    SEC. 14236. MODIFICATIONS OF ACCURACY-RELATED PENALTY.

        (a) Threshold Requirement.--Clause (ii) of section 6662(e)(1)(B)
    (relating to substantial valuation misstatement under chapter 1) is
    amended to read as follows:
                                ``(ii) the net section 482 transfer price
                            adjustment for the taxable year exceeds the
                            lesser of $5,000,000 or 10 percent of the
                            taxpayer's gross receipts.''
        (b) Certain Adjustments Excluded in Determining Threshold.--
    Subparagraph (B) of section 6662(e)(3) is amended to read as follows:
                        ``(B) Certain adjustments excluded in determining
                    threshold.--For purposes of determining whether the
                    threshold requirements of paragraph (1)(B)(ii) are met,
                    the following shall be excluded:
                                ``(i) Any portion of the net increase in
                            taxable income referred to in subparagraph (A)
                            which is attributable to any redetermination of
                            a price if--
                                        ``(I) it is established that the
                                    taxpayer determined such price in
                                    accordance with a specific pricing
                                    method set forth in the regulations
                                    prescribed under section 482 and that
                                    the taxpayer's use of such method was
                                    reasonable,
                                        ``(II) the taxpayer has
                                    documentation (which was in existence
                                    as of the time of filing the return)
                                    which sets forth the determination of
                                    such price in accordance with such a
                                    method and which establishes that the
                                    use of such method was reasonable, and
                                        ``(III) the taxpayer provides such
                                    documentation to the Secretary within
                                    30 days of a request for such
                                    documentation.
                                ``(ii) Any portion of the net increase in
                            taxable income referred to in subparagraph (A)
                            which is attributable to a redetermination of
                            price where such price was not determined in
                            accordance with such a specific pricing method
                            if--
                                        ``(I) the taxpayer establishes that
                                    none of such pricing methods was likely
                                    to result in a price that would clearly
                                    reflect income, the taxpayer used
                                    another pricing method to determine
                                    such price, and such other pricing
                                    method was likely to result in a price
                                    that would clearly reflect income,
                                        ``(II) the taxpayer has
                                    documentation (which was in existence
                                    as of the time of filing the return)
                                    which sets forth the determination of
                                    such price in accordance with such
                                    other method and which establishes that
                                    the requirements of subclause (I) were
                                    satisfied, and
                                        ``(III) the taxpayer provides such
                                    documentation to the Secretary within
                                    30 days of request for such
                                    documentation.
                                ``(iii) Any portion of such net increase
                            which is attributable to any transaction solely
                            between foreign corporations unless, in the
                            case of any such corporations, the treatment of
                            such transaction affects the determination of
                            income from sources within the United States or
                            taxable income effectively connected with the
                            conduct of a trade or business within the
                            United States.''
        (b) Coordination With Reasonable Cause Exception.--Paragraph (3) of
    section 6662(e) is amended by adding at the end thereof the following
    new subparagraph:
                        ``(D) Coordination with reasonable cause
                    exception.--For purposes of section 6664(c) the
                    taxpayer shall not be treated as having reasonable
                    cause for any portion of an underpayment attributable
                    to a net section 482 transfer price adjustment unless
                    such taxpayer meets the requirements of clause (i),
                    (ii), or (iii) of subparagraph (B) with respect to such
                    portion.''
        (c) Conforming Amendment.--Clause (iii) of section 6662(h)(2)(A) is
    amended to read as follows:
                                ``(iii) in paragraph (1)(B)(ii)--
                                        ``(I) `$20,000,000' for
                                    `$5,000,000', and
                                        ``(II) `20 percent' for `10
                                    percent'.''
        (d) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 1993.

    SEC. 14237. DENIAL OF PORTFOLIO INTEREST EXEMPTION FOR CONTINGENT
                  INTEREST.

        (a) General Rule.--
                (1) Subsection (h) of section 871 (relating to repeal of
            tax on interest of nonresident alien individuals received from
            certain portfolio debt investments) is amended by redesignating
            paragraphs (4), (5), and (6) as paragraphs (5), (6), and (7),
            respectively, and by inserting after paragraph (3) the
            following new paragraph:
                ``(4) Portfolio interest not to include certain contingent
            interest.--For purposes of this subsection--
                        ``(A) In general.--Except as otherwise provided in
                    this paragraph, the term `portfolio interest' shall not
                    include--
                                ``(i) any interest if the amount of such
                            interest is determined by reference to--
                                        ``(I) any receipts, sales or other
                                    cash flow of the debtor or a related
                                    person,
                                        ``(II) any income or profits of the
                                    debtor or a related person,
                                        ``(III) any change in value of any
                                    property of the debtor or a related
                                    person, or
                                        ``(IV) any dividend, partnership
                                    distributions, or similar payments made
                                    by the debtor or a related person, or
                                ``(ii) any other type of contingent
                            interest that is identified by the Secretary by
                            regulation, where a denial of the portfolio
                            interest exemption is necessary or appropriate
                            to prevent avoidance of Federal income tax.
                        ``(B) Related person.--The term `related person'
                    means any person who is related to the debtor within
                    the meaning of section 267(b) or 707(b)(1), or who is a
                    party to any arrangement undertaken for a purpose of
                    avoiding the application of this paragraph.
                        ``(C) Exceptions.--Subparagraph (A)(i) shall not
                    apply to--
                                ``(i) any amount of interest solely by
                            reason of the fact that the timing of any
                            interest or principal payment is subject to a
                            contingency,
                                ``(ii) any amount of interest solely by
                            reason of the fact that the interest is paid
                            with respect to nonrecourse or limited recourse
                            indebtedness,
                                ``(iii) any amount of interest all or
                            substantially all of which is determined by
                            reference to any other amount of interest not
                            described in subparagraph (A) (or by reference
                            to the principal amount of indebtedness on
                            which such other interest is paid),
                                ``(iv) any amount of interest solely by
                            reason of the fact that the debtor or a related
                            person enters into a hedging transaction to
                            reduce the risk of interest rate or currency
                            fluctuations with respect to such interest,
                                ``(v) any amount of interest determined by
                            reference to--
                                        ``(I) changes in the value of
                                    property (including stock) that is
                                    actively traded (within the meaning of
                                    section 1092(d)) other than property
                                    described in section 897(c)(1) or (g),
                                        ``(II) the yield on property
                                    described in subclause (I), other than
                                    a debt instrument that pays interest
                                    described in subparagraph (A), or stock
                                    or other property that represents a
                                    beneficial interest in the debtor or a
                                    related person, or
                                        ``(III) changes in any index of the
                                    value of property described in
                                    subclause (I) or of the yield on
                                    property described in subclause (II),
                                    and
                                ``(vi) any other type of interest
                            identified by the Secretary by regulation.
                        ``(D) Exception for certain existing
                    indebtedness.--Subparagraph (A) shall not apply to any
                    interest paid or accrued with respect to any
                    indebtedness with a fixed term--
                                ``(i) which was issued on or before April
                            7, 1993, or
                                ``(ii) which was issued after such date
                            pursuant to a written binding contract in
                            effect on such date and at all times thereafter
                            before such indebtedness was issued.''
                (2) Subsection (c) of section 881 is amended by
            redesignating paragraphs (4), (5), and (6) as paragraphs (5),
            (6), and (7), respectively, and by inserting after paragraph
            (3) the following new paragraph:
                ``(4) Portfolio interest not to include certain contingent
            interest.--For purposes of this subsection, the term `portfolio
            interest' shall not include any interest which is treated as
            not being portfolio interest under the rules of section
            871(h)(4).''
        (b) Conforming Amendments.--
                (1) Clause (ii) of section 871(h)(2)(B) is amended by
            striking ``paragraph (4)'' and inserting ``paragraph (5)''.
                (2) Clause (ii) of section 881(c)(2)(B) is amended by
            striking ``section 871(h)(4)'' and inserting ``section
            871(h)(5)''.
                (3) Paragraph (6) of section 881(c) (as redesignated by
            subsection (a)) is amended by striking ``section 871(h)(5)''
            each place it appears and inserting ``section 871(h)(6)''.
                (4) Paragraph (9) of section 1441(c) is amended by striking
            ``section 871(h)(3)'' and inserting ``section 871(h)(3) or
            (4)''.
                (5) Subsection (a) of section 1442 is amended--
                        (A) by striking ``871(h)(3)'' and inserting
                    ``871(h)(3) or (4)'', and
                        (B) by striking ``881(c)(3)'' and inserting
                    ``881(c)(3) or (4)''.
        (c) Effective Date.--The amendments made by this section shall
    apply to interest received after December 31, 1993.

    SEC. 14238. REGULATIONS DEALING WITH CONDUIT ARRANGEMENTS.

        Section 7701 is amended by redesignating subsection (l) as
    subsection (m) and by inserting after subsection (k) the following new
    subsection:
        ``(l) Regulations Relating to Conduit Arrangements.--The Secretary
    may prescribe regulations recharacterizing any multiple-party financing
    transaction as a transaction directly among any 2 or more of such
    parties where the Secretary determines that such recharacterization is
    appropriate to prevent avoidance of any tax imposed by this title.''

                         PART IV--ENERGY TAX PROVISIONS

                   Subpart A--Energy Tax Based on Btu Content

    SEC. 14241. IMPOSITION OF ENERGY TAX BASED ON BTU CONTENT.

        (a) In General.--Chapter 36 (relating to other excise taxes) is
    amended by redesignating subchapters A and B as subchapters B and C,
    respectively, and by inserting before subchapter B (as so redesignated)
    the following new subchapter:

                          ``Subchapter A--Energy Taxes

                                  ``Part I. Imposition of tax on refined
                                            petroleum products.
                                  ``Part II. Imposition of taxes on natural
                                            gas, coal, and electricity.
                                  ``Part III. Tax rates.
                                  ``Part IV. Use taxes; floor stocks taxes;
                                            administrative provisions;
                                            definitions and special rules.
                                  ``Part V. Tax on imported products with
                                            high embedded energy costs.

           ``PART I--IMPOSITION OF TAX ON REFINED PETROLEUM PRODUCTS

                                  ``Sec. 4441. Taxable refined petroleum
                                            products.
                                  ``Sec. 4442. Tax-free transfers and uses;
                                            refunds for certain sales and
                                            uses.

    ``SEC. 4441. TAXABLE REFINED PETROLEUM PRODUCTS.

        ``(a) Imposition of Tax.--
                ``(1) In general.--There is hereby imposed a tax on any
            taxable refined petroleum product--
                        ``(A) removed from any refinery in the United
                    States,
                        ``(B) removed from any terminal in the United
                    States,
                        ``(C) entered into the United States for
                    consumption, use, or warehousing, and
                        ``(D) sold to any person who is not registered
                    under section 4453(d).
            No tax shall be imposed by subparagraph (D) if there was a
            prior taxable removal or entry under subparagraph (A), (B), or
            (C).
                ``(2) Exception for bulk transfers to registered refineries
            or terminals.--The tax imposed by paragraph (1) shall not apply
            to any removal or entry of any taxable refined petroleum
            product transferred in bulk to a refinery or terminal if the
            person removing or entering such product and the operator of
            such refinery or terminal are registered under section 4453(d).
        ``(b) Rate of Tax.--
                ``(1) In general.--The amount of the tax imposed by
            subsection (a) on each barrel of any taxable refined petroleum
            product shall be the sum of--
                        ``(A) the base rate, and
                        ``(B) the supplemental rate,
            multiplied by the applicable per unit Btu factor for such
            product.
                ``(2) Only base rate applies to qualified heating oil,
            diesel fuel used on farms, and liquefied petroleum gases.--
                        ``(A) In general.--Subparagraph (B) of paragraph
                    (1) shall not apply to--
                                ``(i) qualified heating oil,
                                ``(ii) qualified farm diesel fuel, and
                                ``(iii) any liquefied petroleum gas.
                        ``(B) Qualified heating oil.--For purposes of
                    subparagraph (A), the term `qualified heating oil'
                    means No. 2 distillate fuel oil (including any kerosene
                    in a mixture with such oil) which--
                                ``(i) is indelibly dyed (or dyed and
                            marked) in accordance with regulations that the
                            Secretary shall prescribe, and
                                ``(ii) is delivered (or is to be delivered)
                            to any building to heat the building.
                        ``(C) Qualified farm diesel fuel.--For purposes of
                    subparagraph (A), the term `qualified farm diesel fuel'
                    means any diesel fuel which--
                                ``(i) is indelibly dyed (or dyed and
                            marked) in accordance with regulations that the
                            Secretary shall prescribe, and
                                ``(ii) is used (or to be used) on a farm
                            for farming purposes (determined under section
                            6420(c)).
        ``(c) Liability for Tax.--The determination of who is liable for
    the tax imposed by subsection (a) shall be made under the rules
    applicable in determining liability for the tax imposed by section
    4081. Section 4103 shall apply to the tax imposed by subsection (a) in
    the same manner as it applies to the tax imposed by section 4081.
        ``(d) Taxable Refined Petroleum Product.--For purposes of this
    subchapter, the term `taxable refined petroleum product' means--
                ``(1) aviation gasoline,
                ``(2) motor gasoline (including blending components of
            gasoline),
                ``(3) kerosene-type jet fuel,
                ``(4) naphtha-type jet fuel,
                ``(5) distillate fuel oil,
                ``(6) kerosene,
                ``(7) residual fuel oil,
                ``(8) petroleum coke,
                ``(9) butane,
                ``(10) propane,
                ``(11) ethanol,
                ``(12) methanol, and
                ``(13) to the extent provided in regulations prescribed by
            the Secretary, any other refined petroleum product.
        ``(e) Applicable Per Unit Btu Factor.--For purposes of this
    subchapter--
                ``(1) In general.--

                                                    The applicable per unit
                                                  Btu factor is the follow-
                      ``In the case of:
                                                     ing amount per barrel:
                              Aviation gasoline..........         5.048
                              Motor gasoline (including           5.267
                                blending components of
                                gasoline).
                              Kerosene-type jet fuel.....         5.670
                              Naphtha-type jet fuel......         5.355
                              Distillate fuel oil........         5.852
                              Kerosene...................         5.670
                              Residual fuel oil..........         6.486
                              Petroleum coke.............         6.024
                              Ethanol....................         3.500
                              Methanol...................         3.500
                              Butane.....................         4.326
                              Propane....................         3.836
                ``(2) Mixtures.--Any mixture which includes a taxable
            refined petroleum product shall be treated as specified in
            paragraph (1) and--
                        ``(A) if more than 1 such product is included in
                    such mixture, the applicable per unit Btu factor shall
                    be the weighted average of the applicable per unit Btu
                    factors for the taxable refined petroleum products
                    included in the mixture, and
                        ``(B) if any substance is included in the mixture
                    which is not a taxable refined petroleum product, the
                    applicable per unit Btu factor for the portion of such
                    mixture's volume which is attributable to such
                    substance shall be zero.
                ``(3) Cross reference.--

                                    ``For authority to adjust per unit Btu
    amounts, see section 4453(e).
        ``(f) Other Definitions.--For purposes of this subchapter--
                ``(1) Refinery.--The term `refinery' means any facility--
                        ``(A) at which crude oil or any petroleum product
                    is refined,
                        ``(B) which is a natural gas processing or
                    fractionation plant, or
                        ``(C) at which ethanol or methanol is produced for
                    use as a fuel.
                ``(2) Blending components.--The term `blending components'
            does not include ethanol or methanol.
                ``(3) Ethanol and methanol.--The terms `ethanol' and
            `methanol' include ether derivatives of ethanol and methanol,
            respectively.
                ``(4) Barrel.--The term `barrel' means 42 United States
            gallons determined with such temperature adjustments as the
            Secretary may prescribe. In the case of a taxable refined
            petroleum product which is not a liquid, the term `barrel'
            means a volume determined under regulations prescribed by the
            Secretary on the basis of an equivalence to a barrel of oil.
        ``(g) Refunds in Certain Cases.--Under regulations prescribed by
    the Secretary, if any person who paid the tax imposed by this section
    with respect to any taxable refined petroleum product establishes to
    the satisfaction of the Secretary that a prior tax was paid (and not
    credited or refunded) with respect to such product, then an amount
    equal to the tax paid by such person shall be allowed as a refund
    (without interest) to such person in the same manner as if it were an
    overpayment of tax imposed by this section.

    ``SEC. 4442. TAX-FREE TRANSFERS AND USES; REFUNDS FOR CERTAIN SALES AND
                  USES.

        ``(a) Tax-Free Sales, Etc.--
                ``(1) In general.--No tax shall be imposed by section
            4441--
                        ``(A) on any taxable refined petroleum product
                    which is used in an exempt use by the person otherwise
                    liable for such tax, or
                        ``(B) by reason of a removal, entry, or sale of
                    such product for an exempt use by the person receiving
                    the product.
                ``(2) Exempt use.--For purposes of this subsection, the
            term `exempt use' means--
                        ``(A) export,
                        ``(B) any use in the generation of electricity,
                        ``(C) any qualified feedstock use, and
                        ``(D) any use in the manufacture or production of
                    synthetic natural gas or any other synthetic fuel
                    specified in regulations prescribed by the Secretary.
                ``(3) Qualified feedstock use.--For purposes of this
            subsection--
                        ``(A) In general.--In the case of any qualified
                    feedstock use, only the exempt percentage of any
                    taxable refined petroleum product shall be exempt from
                    tax under paragraph (1).
                        ``(B) Qualified feedstock use.--The term `qualified
                    feedstock use' means use of any taxable refined
                    petroleum product in the manufacture or production of
                    any substance.
                        ``(C) Exempt percentage.--For purposes of
                    subparagraph (A), the term `exempt percentage' means
                    the percentage (determined on the basis of chemical
                    structure) of the taxable refined petroleum product
                    which is incorporated into the substance manufactured
                    or produced.
                ``(4) Registration requirements.--To the extent provided by
            the Secretary, paragraph (1) shall not apply to any taxable
            event unless--
                        ``(A) such persons with respect to such event as
                    the Secretary may specify are registered under section
                    4453(d), and
                        ``(B) in the case of a sale, the purchaser's name
                    and address, and the purchaser's registration number
                    for purposes of this subchapter, are provided to the
                    seller.
                ``(5) Refunds of products purchased tax-paid.--If tax was
            imposed under section 4441 with respect to any taxable refined
            petroleum product and such product is used by any person in an
            exempt use, the Secretary shall pay to such person an amount
            equal to the tax so imposed (or, in the case of a qualified
            feedstock use, the exempt percentage of the tax so imposed).
                ``(6) Cross reference.--

                                    ``For tax on fuel used to produce steam
    at facility which also generates electricity, see section 4451(e).
        ``(b) Refunds to Ultimate Vendors in Certain Cases.--Under
    regulations prescribed by the Secretary--
                ``(1) Heating oil.--If the supplemental rate of tax was
            imposed under section 4441 with respect to any No. 2 distillate
            fuel oil (including any kerosene in a mixture with such oil)
            and such fuel oil is delivered to any building to heat the
            building, the Secretary shall pay to the ultimate vendor of
            such fuel oil an amount equal to the product of the
            supplemental rate and the applicable per unit Btu factor per
            barrel of the fuel oil (and kerosene) so delivered.
                ``(2) International commercial transportation.--
                        ``(A) In general.--If tax was imposed under section
                    4441 with respect to any taxable refined petroleum
                    product and such product is sold for use or used by the
                    purchaser for international commercial transportation,
                    the Secretary shall pay to the ultimate vendor of such
                    product an amount equal to the tax so imposed.
                        ``(B) International commercial transportation.--For
                    purposes of subparagraph (A), the term `international
                    commercial transportation' means transportation in the
                    trade or business of transporting persons or property
                    for hire--
                                ``(i) by any vessel actually engaged in
                            foreign trade or trade between the United
                            States and any of its possessions, or
                                ``(ii) by aircraft from a point within the
                            United States to a point outside the United
                            States and outside the 225-mile zone (as
                            defined in section 4262(c)(2)).
                ``(3) Vendor requirements.--A payment may be made under
            this subsection to a vendor only if the vendor establishes that
            such vendor--
                        ``(A)(i) has not included the tax in the price of
                    the product, and
                        ``(ii) has not collected the tax from the purchaser
                    of such product, or
                        ``(B) has agreed to repay the tax to the purchaser.
        ``(c) Production of Calcined Coke.--If tax was imposed under
    section 4441 with respect to any petroleum product and such product is
    used by any person to produce calcined coke, the Secretary shall pay to
    such person an amount equal to the sum of the base rate and the
    supplemental rate for each million Btu's of the actual Btu content of
    the coke produced.
        ``(d) Cross Reference.--

                                    ``For refunds of gasoline and diesel
    fuel used on farms, see sections 6420(a) and 6427(m).

      ``PART II--IMPOSITION OF TAXES ON NATURAL GAS, COAL, AND ELECTRICITY

                                  ``Sec. 4444. Natural gas.
                                  ``Sec. 4445. Coal.
                                  ``Sec. 4446. Electricity.

    ``SEC. 4444. NATURAL GAS.

        ``(a) Imposition of Tax.--
                ``(1) In general.--There is hereby imposed a tax on natural
            gas--
                        ``(A) removed from any pipeline in the United
                    States,
                        ``(B) entered into the United States for
                    consumption, use, or warehousing, and
                        ``(C) entered into any pipeline the operator of
                    which is not registered under section 4453(d).
                ``(2) Exception for transfers to registered pipelines.--
                        ``(A) Pipeline to pipeline transfers.--The tax
                    imposed by paragraph (1) shall not apply to any removal
                    from a pipeline to another pipeline if the operators of
                    both pipelines are registered under section 4453(d).
                        ``(B) Entry into united states to pipeline
                    transfers.--The tax imposed by paragraph (1) shall not
                    apply to any entry into the United States if--
                                ``(i) pursuant to such entry the natural
                            gas is entered into any pipeline, and
                                ``(ii) the operator of such pipeline is
                            registered under section 4453(d).
        ``(b) Rate of Tax.--
                ``(1) In general.--The amount of the tax imposed by
            subsection (a) on each MCF of natural gas shall be the base
            rate multiplied by the applicable per unit Btu factor.
                ``(2) Authority to use actual btu content.--To the extent
            provided in regulations prescribed by the Secretary, the amount
            of the tax imposed by subsection (a) shall be the base rate for
            each million Btu's of the actual Btu content of the natural
            gas.
        ``(c) Liability for, and Collection of, Tax.--
                ``(1) In general.--The tax imposed by subsection
            (a)(1)(A)--
                        ``(A) shall be paid by the person receiving the
                    natural gas, and
                        ``(B) shall be collected by the operator of the
                    pipeline.
                ``(2) Importation.--The tax imposed by subsection (a)(1)(B)
            shall be paid by the person entering the natural gas into the
            United States for consumption, use, or warehousing.
                ``(3) Entry into unregistered pipelines.--The tax imposed
            by subsection (a)(1)(C) shall be paid by the person entering
            the natural gas.
                ``(4) Collection of tax.--
                        ``(A) In general.--In the case of natural gas
                    removed from a local distribution system, the operator
                    shall also be liable for any tax imposed by subsection
                    (a) which is not collected from the person receiving
                    the natural gas.
                        ``(B) Exception for large users from local
                    distribution systems.--Subparagraph (A) shall not apply
                    to natural gas received by any person during any month
                    from a local distribution system if the value
                    (exclusive of taxes) of the natural gas received by
                    such person from such system during the 12-month period
                    ending before such month exceeded $3,500,000.
        ``(d) Definitions.--For purposes of this subchapter--
                ``(1) Applicable per unit btu factor.--
                        ``(A) In general.--The applicable per unit Btu
                    factor with respect to natural gas is 1.031 per MCF.
                        ``(B) Cross reference.--

                                    ``For authority to adjust per unit Btu
    amounts, see section 4453(e).
                ``(2) Pipeline.--The term `pipeline' includes a local
            distribution system. To the extent provided in regulations
            prescribed by the Secretary, such term includes a gathering
            system.
                ``(3) Natural gas.--The term `natural gas' includes
            synthetic natural gas produced from coal or from any petroleum
            product.
                ``(4) MCF.--The term `MCF' means 1,000 cubic feet of
            natural gas measured at a pressure of 14.73 pounds per square
            inch (absolute) and a temperature of 60 degrees Fahrenheit.
        ``(e) Exemption From Tax for Certain Uses.--
                ``(1) In general.--No tax shall be imposed by subparagraph
            (A) or (B) of subsection (a)(1)--
                        ``(A) on any natural gas which is used in an exempt
                    natural gas use by the person otherwise liable for such
                    tax, or
                        ``(B) by reason of a removal or entry of natural
                    gas for an exempt natural gas use by the person
                    receiving the natural gas.
                ``(2) Exempt natural gas use.--For purposes of this
            subsection, the term `exempt natural gas use' means--
                        ``(A) use in the generation of electricity,
                        ``(B) any qualified feedstock use, or
                        ``(C) use in enhanced heavy oil recovery.
                ``(3) Qualified feedstock use.--For purposes of this
            subsection--
                        ``(A) In general.--In the case of any qualified
                    feedstock use, only the exempt percentage of the
                    natural gas shall be exempt from tax under paragraph
                    (1).
                        ``(B) Qualified feedstock use; exempt percentage.--
                    The terms `qualified feedstock use' and `exempt
                    percentage' have the respective meanings given such
                    terms by section 4442(a)(3) determined by substituting
                    `natural gas' for `taxable refined petroleum product'
                    each place it appears.
                ``(4) Enhanced heavy oil recovery.--For purposes of this
            subsection--
                        ``(A) In general.--Natural gas shall be treated as
                    used in enhanced heavy oil recovery if such gas is used
                    in an enhanced oil recovery project in the United
                    States for the recovery of oil having a weighted
                    average gravity of 20 degrees API or less (corrected to
                    60 degrees Fahrenheit).
                        ``(B) Enhanced oil recovery project.--For purposes
                    of subparagraph (A), the term `enhanced oil recovery
                    project' means any project which involves the
                    application (in accordance with sound engineering
                    principles) of 1 or more tertiary recovery methods (as
                    defined in section 193(b)(3)) which can reasonably be
                    expected to result in more than an insignificant
                    increase in the amount of crude oil which will
                    ultimately be recovered.
                ``(5) Registration requirements.--To the extent provided by
            the Secretary, paragraph (1) shall not apply to any taxable
            event unless the requirements of section 4442(a)(4) are met
            with respect to such event.
                ``(6) Refunds of natural gas purchased tax-paid.--If tax
            was imposed by this section with respect to any natural gas and
            such gas is used by any person in an exempt natural gas use,
            the Secretary shall pay to such person an amount equal to the
            tax so imposed (or, in the case of a qualified feedstock use,
            the exempt percentage of the tax so imposed).
                ``(7) Cross reference.--

                                    ``For tax on fuel used to produce steam
    at facility which also generates electricity, see section 4451(e).
        ``(f) Methane Recovered From Biomass or Coal Mining.--
                ``(1) In general.--If--
                        ``(A) methane is recovered from biomass or in
                    conjunction with room and pillar or long wall coal
                    mining operations, and
                        ``(B) such methane is entered into any natural gas
                    pipeline,
            the Secretary shall pay to the person so entering such methane
            an amount equal to the amount of tax which would be imposed
            under this section on such methane if such entry were a taxable
            event under such section.
                ``(2) Recapture of credit for methane recovered from coal
            mining in certain cases.--
                        ``(A) In general.--If--
                                ``(i) the Secretary has made a payment
                            under paragraph (1) to any person with respect
                            to methane recovered from coal mining
                            operations before the date the actual mining
                            commences, and
                                ``(ii)(I) such person disposes of his
                            interest in such coal mining operations, or
                                ``(II) the actual mining commences more
                            than 10 years after the date such methane was
                            first recovered,
                    then the tax under chapter 1 of such person for the
                    taxable year in which such disposition occurs (or, in a
                    case to which clause (ii)(II) applies, such 10th year
                    ends) shall be increased by the aggregate of such
                    payments to such person plus interest at the
                    underpayment rate under section 6621 for the periods
                    beginning on the dates such payments were made.
                        ``(B) No further payments until mining commences.--
                    If there is an increase in tax under subparagraph (A)
                    with respect to any payments for methane recovered from
                    any site, no further payments shall be made under this
                    subsection with respect to methane recovered from such
                    site until actual mining commences at such site.
                        ``(C) No credits against tax, etc.--Any increase in
                    tax under this paragraph shall not be taken into
                    account in determining the amount of any credit
                    allowable under part IV of subchapter A of chapter 1 or
                    in determining the amount of the tax imposed by section
                    55.
                        ``(D) Changes in form of business disregarded.--A
                    person shall not be treated as disposing of an interest
                    in coal mining operations by reason of a mere change in
                    the form of conducting the trade or business so long as
                    the coal mining operations are retained in such trade
                    or business and the taxpayer retains a substantial
                    interest in such trade or business.
        ``(g) Refunds in Certain Cases.--A rule similar to the rule of
    section 4441(g) shall apply to the tax imposed by this section.

    ``SEC. 4445. COAL.

        ``(a) General Rule.--There is hereby imposed a tax on coal received
    at any facility in the United States for use as a fuel at such
    facility.
        ``(b) Rate of Tax.--The amount of the tax imposed by subsection (a)
    shall be the base rate for each million Btu's of the actual Btu content
    of the coal. For purposes of the preceding sentence, the actual Btu
    content of any coal shall be determined under procedures prescribed by
    the Secretary.
        ``(c) Liability for Tax.--
                ``(1) In general.--Except as otherwise provided in this
            subsection, the tax imposed by subsection (a) shall be paid by
            the operator of the facility.
                ``(2) Coal received at small facilities.--If the ultimate
            vendor of coal received at a facility receives a certificate
            from the operator of such facility (or otherwise determines)
            that such facility received less than 1,000 tons of coal during
            the preceding calendar year, the tax imposed by subsection (a)
            shall be paid by the ultimate vendor.
                ``(3) Residential property.--
                        ``(A) In general.--In the case of coal received at
                    a residential property, the tax imposed by subsection
                    (a) shall be paid by the ultimate vendor.
                        ``(B) Residential property.--For purposes of this
                    paragraph, the term `residential property' means any
                    building which contains 1 or more dwelling units used
                    for residential purposes other than on a transient
                    basis.
        ``(d) Exemption From Tax for Certain Uses.--
                ``(1) In general.--No tax shall be imposed by subsection
            (a) on coal received for--
                        ``(A) use in the generation of electricity,
                        ``(B) any qualified feedstock use,
                        ``(C) use in enhanced heavy oil recovery (as
                    determined under section 4444(e)(4) by substituting
                    `coal' for `natural gas'),
                        ``(D) use in the manufacture or production of
                    synthetic natural gas or any other synthetic fuel
                    specified in regulations prescribed by the Secretary,
                    or
                        ``(E) any use in a vessel used in international
                    commercial transportation (as defined in section
                    4442(b)(2)(B)(i)).
                ``(2) Qualified feedstock use.--For purposes of this
            subsection--
                        ``(A) In general.--In the case of any qualified
                    feedstock use, only the exempt percentage of the coal
                    shall be exempt from tax under paragraph (1).
                        ``(B) Qualified feedstock use; exempt percentage.--
                    The terms `qualified feedstock use' and `exempt
                    percentage' have the respective meanings given such
                    terms by section 4442(a)(3) determined by substituting
                    `coal' for `taxable refined petroleum product' each
                    place it appears.
                ``(3) Cross reference.--

                                    ``For tax on fuel used to produce steam
    at facility which also generates electricity, see section 4451(e).
        ``(e) Production of Coke for Steel.--If tax was imposed under this
    subchapter with respect to any coal and such coal is used by any person
    to produce coke for use in the reduction of iron-bearing ores in the
    iron and steel process, the Secretary shall pay to such person an
    amount equal to the base rate for each million Btu's of the actual Btu
    content of the coke produced.

    ``SEC. 4446. ELECTRICITY.

        ``(a) General Rule.--There is hereby imposed a tax on--
                ``(1) the sale of electricity to ultimate users in the
            United States, and
                ``(2) the use of electricity in the United States which was
            not subject to tax under paragraph (1).
        ``(b) Rate of Tax.--The amount of the tax imposed by subsection (a)
    on each kilowatt hour of electricity sold or used during any month
    shall be the deemed Btu tax per kilowatt hour applicable for such
    month--
                ``(1) to the seller in the case of the tax imposed by
            subsection (a)(1), and
                ``(2) to the user in the case of the tax imposed by
            subsection (a)(2).
        ``(c) Liability for, and Collection of, Tax.--
                ``(1) Sales.--The tax imposed by subsection (a)(1)--
                        ``(A) shall be paid by the person to whom the
                    electricity is sold, and
                        ``(B) shall be collected by the seller.
                ``(2) Uses.--The tax imposed by subsection (a)(2) shall be
            paid by the person using the electricity.
                ``(3) Collection of tax.--
                        ``(A) In general.--The seller shall also be liable
                    for the tax imposed by subsection (a)(1) which is not
                    collected from the person to whom the electricity is
                    sold.
                        ``(B) Exception for large users.--Subparagraph (A)
                    shall not apply to electricity sold to any person
                    during any month by the seller if the amount paid by
                    such person for electricity (exclusive of taxes) sold
                    by such seller during the 12-month period ending before
                    such month exceeded $3,500,000.
        ``(d) Deemed Btu Taxes.--For purposes of this section--
                ``(1) In general.--The deemed Btu taxes per kilowatt hour
            of electricity applicable to any person for any month shall be
            the weighted average of--
                        ``(A) the deemed Btu taxes per kilowatt hour of
                    electricity generated at each facility of the person
                    during the base period, and
                        ``(B) the deemed Btu taxes per kilowatt hour of
                    electricity purchased by such person during the base
                    period.
            For purposes of this paragraph, the term `base period' means,
            with respect to any month, the 2d month preceding such month.
                ``(2) Deemed btu taxes per facility.--The deemed Btu taxes
            per kilowatt hour of electricity generated at any facility
            during any month shall be determined by dividing--
                        ``(A) the deemed Btu taxes on fuels used at such
                    facility to generate electricity during such month by
                        ``(B) the aggregate kilowatt hours of electricity
                    generated at such facility during such month.
                ``(3) Deemed btu taxes.--
                        ``(A) In general.--Except as otherwise provided in
                    this paragraph, the term `deemed Btu taxes' means, with
                    respect to electricity, the aggregate taxes which would
                    have been imposed by this subchapter on the fuels used
                    to generate such electricity--
                                ``(i) but for the exemption of such fuels
                            from such taxes, and
                                ``(ii) determined as of the month for which
                            the rate of the tax imposed by subsection (a)
                            is being determined.
                        ``(B) Electricity generated by hydropower or
                    nuclear power.--The deemed Btu taxes per kilowatt hour
                    of electricity generated by hydropower or nuclear power
                    shall be equal to the base rate multiplied by a
                    fraction the numerator of which is 10,335 and the
                    denominator of which is 1,000,000.
                        ``(C) Imported electricity.--
                                ``(i) In general.--Except as provided in
                            clause (ii), the deemed Btu taxes per kilowatt
                            hour of electricity transmitted into the United
                            States shall be determined as if such
                            electricity were generated by hydropower.
                                ``(ii) Lower deemed btu tax may be
                            established.--If the importer establishes to
                            the satisfaction of the Secretary the amount
                            which would be the deemed Btu taxes per
                            kilowatt hour of the electricity if the
                            electricity were generated in the United
                            States, such amount shall be used in lieu of
                            the amount under clause (i).
                        ``(D) Electricity generated by renewable sources.--
                    The deemed Btu taxes per kilowatt hour of electricity
                    generated from any renewable source shall be zero. For
                    purposes of the preceding sentence, the term `renewable
                    source' means solar energy, wind energy, any geothermal
                    deposit, biomass, municipal solid waste, and tires.
                ``(4) Sellers to specify deemed btu taxes.--
                        ``(A) In general.--In the case of electricity which
                    is sold other than to the ultimate user, the seller
                    shall certify to the purchaser the deemed Btu taxes per
                    kilowatt hour of the electricity sold.
                        ``(B) Failure to certify.--If the seller fails to
                    so certify--
                                ``(i) the tax imposed by subsection (a)
                            shall apply to such sale at the rate specified
                            in subparagraph (C),
                                ``(ii) the tax imposed by subsection (a)
                            shall apply to any subsequent sale or use
                            without regard to clause (i), and
                                ``(iii) the rate specified in subparagraph
                            (C) shall be the deemed Btu taxes per kilowatt
                            hour of such electricity for purposes of
                            determining the tax imposed by subsection (a)
                            on any subsequent sale or use of such
                            electricity.
                        ``(C) Rate.--The rate specified in this
                    subparagraph is, for each kilowatt hour, the product
                    of--
                                ``(i) the sum of the base rate and the
                            supplemental rate, multiplied by
                                ``(ii) a fraction the numerator of which is
                            10,335 and the denominator of which is
                            1,000,000.
                ``(5) Regulations.--The Secretary shall prescribe such
            regulations as may be necessary or appropriate to carry out
            this subsection, including regulations--
                        ``(A) prescribing a base period to be used by any
                    person not in existence during the base period, and
                        ``(B) prescribing such other modifications to the
                    application of this subsection as are necessary to
                    carry out the purposes of this subsection.
        ``(e) Exceptions.--
                ``(1) Electricity used in certain electrolytic processes.--
                        ``(A) In general.--In the case of electricity used
                    in any electrolytic process, the tax imposed by this
                    section shall not apply to the feedstock portion of
                    such electricity.
                        ``(B) Feedstock portion.--For purposes of
                    subparagraph (A), the feedstock portion of electricity
                    is the portion of the electrical energy which is
                    incorporated into the manufactured product.
                ``(2) Electricity used to generate pumped storage, etc.--
            The tax imposed by this section shall not apply to electricity
            used in the United States to create any hydropower source to
            generate electricity. The electricity generated by such
            hydropower source shall be disregarded in determining the
            deemed Btu taxes of the electricity.
                ``(3) Use tax exception.--The Secretary may provide by
            regulations that the tax imposed by subsection (a)(2) shall not
            apply in cases where the Secretary determines that such an
            exception is warranted, after taking into account the
            protection of revenues to the United States from this
            subchapter and the ease of administration for both taxpayers
            and the Secretary.

                             ``PART III--TAX RATES

                                  ``Sec. 4448. Tax rates.

    ``SEC. 4448. TAX RATES.

        ``(a) Base Rate.--For purposes of this subchapter--
                ``(1) Phase-in rates.--Effective during--
                        ``(A) the 1-year period beginning on July 1, 1994,
                    the base rate is 8.9 cents, and
                        ``(B) the 1-year period beginning on July 1, 1995,
                    the base rate is 17.9 cents.
                ``(2) Permanent unindexed rate.--Effective on and after
            July 1, 1996, the base rate is 26.8 cents.
                ``(3) Indexed rates.--
                        ``(A) In general.--Effective during any calendar
                    year after 1997, the base rate under paragraph (2)
                    shall be increased by an amount equal to--
                                ``(i) 26.8 cents, multiplied by
                                ``(ii) the inflation adjustment for such
                            calendar year.
                        ``(B) Inflation adjustment.--For purposes of
                    subparagraph (A), the inflation adjustment for any
                    calendar year is the percentage (if any) by which--
                                ``(i) the GDP deflator for the preceding
                            calendar year, exceeds
                                ``(ii) the GDP deflator for 1996.
                        ``(C) GDP deflator for calendar year.--For purposes
                    of subparagraph (B), the GDP deflator for any calendar
                    year is the GDP deflator for the second calendar
                    quarter of such year.
                        ``(D) GDP deflator.--For purposes of subparagraph
                    (C), the term `GDP deflator' means the most recent
                    revision of the implicit price deflator for the gross
                    domestic product as computed and published by the
                    Department of Commerce before November 15 of the
                    calendar year referred to in subparagraph (B)(i).
        ``(b) Supplemental Rate.--For purposes of this subchapter--
                ``(1) Phase-in rates.--Effective during--
                        ``(A) the 1-year period beginning on July 1, 1994,
                    the supplemental rate is 11.4 cents, and
                        ``(B) the 1-year period beginning on July 1, 1995,
                    the supplemental rate is 22.8 cents.
                ``(2) Permanent unindexed rate.--Effective on and after
            July 1, 1996, the supplemental rate is 34.2 cents.
                ``(3) Indexed rates.--Effective during any calendar year
            after 1997, the supplemental rate under paragraph (2) shall be
            increased by an amount equal to--
                        ``(A) 34.2 cents, multiplied by
                        ``(B) the inflation adjustment for such calendar
                    year determined under subsection (a)(3)(B).
        ``(c) Rounding.--If any increase determined under subsection (a)(3)
    or (b)(3) is not a multiple of 0.1 cent, such increase shall be rounded
    to the nearest multiple of 0.1 cent.

     ``PART IV--USE TAXES; FLOOR STOCKS TAXES; ADMINISTRATIVE PROVISIONS;
                         DEFINITIONS AND SPECIAL RULES

                                  ``Sec. 4451. Tax on certain uses.
                                  ``Sec. 4452. Floor stocks taxes.
                                  ``Sec. 4453. Administrative provisions.
                                  ``Sec. 4454. Definitions and special
                                            rules.

    ``SEC. 4451. TAX ON CERTAIN USES.

        ``(a) General Rule.--There is hereby imposed a tax on the use of
    any fossil fuel--
                ``(1) in the manufacture or production in the United States
            of a fuel other than at a refinery, or
                ``(2) as a fuel.
    The preceding sentence shall not apply if tax was imposed under this
    subchapter before such use and such tax is not credited or refunded.
        ``(b) Rate of Tax.--
                ``(1) In general.--Except as otherwise provided in this
            subsection, the amount of tax imposed by subsection (a) shall
            be the amount which would be imposed under the appropriate
            section of part I or II if such use were a taxable event under
            such section.
                ``(2) Crude oil and other products not taxed on removal or
            importation.--The amount of the tax imposed by subsection (a)
            on crude oil or other product not subject to tax under part I
            or II shall be the base rate (increased by the supplemental
            rate in the case of crude oil or any petroleum product other
            than any liquefied petroleum gas, isopentane, and natural
            gasoline) for each million Btu's of the Btu content of such oil
            or product.
                ``(3) Authority to prescribe applicable per unit btu
            factors.--In the case of crude oil or any other product for
            which an applicable per unit Btu factor is not prescribed for
            purposes of part I or II, the Secretary may prescribe such a
            factor, and, if so prescribed, such factor shall apply for
            purposes of paragraph (2).
        ``(c) Liability for Tax.--The taxes imposed by subsection (a) shall
    be paid by the person using the fuel.
        ``(d) Exceptions.--
                ``(1) In general.--Except as provided in subsection (e),
            the tax imposed by this section shall not apply to--
                        ``(A) any use to which section 4442, section
                    4444(e), or subsection (d) or (e) of section 4445
                    applies, or
                        ``(B) any use of methane described in section
                    4444(f)(1)(A).
                ``(2) Use on production premises.--The tax imposed by this
            section shall not apply to any use of crude oil or natural gas
            for producing crude oil or natural gas if--
                        ``(A) in the case of crude oil, it is used before
                    entry at the lease automatic custody transfer point (or
                    its manual equivalent), and
                        ``(B) in the case of natural gas, it is used before
                    entry into an interstate or intrastate transmission
                    pipeline.
                ``(3) Crude oil used at refinery, etc.--The tax imposed by
            this section shall not apply to--
                        ``(A) any use of crude oil at a facility at which
                    crude oil is refined or any use at such facility of any
                    product produced at such facility,
                        ``(B) any use of natural gas at a natural gas
                    processing or fractionation plant or any use at such
                    plant of any product produced at such plant, or
                        ``(C) any use of ethanol at a facility at which
                    ethanol is produced for use as a fuel.
                ``(4) Otherwise taxable event occurring before effective
            date.--The tax imposed by this section shall not apply to any
            use if no tax would be imposed by this section on such use were
            this subchapter in effect for all periods before July 1, 1994.
        ``(e) Generation of Steam and Electricity.--
                ``(1) In general.--In the case of a facility which uses any
            taxable refined petroleum product, natural gas, or coal--
                        ``(A) to generate electricity, and
                        ``(B) to produce steam which is used or which is
                    furnished or sold in the trade or business of the
                    furnishing or sale of steam,
            the tax imposed by subsection (a) shall apply to the use of
            such product, gas, or coal at such facility to the extent such
            use is attributable (determined on the basis of the
            proportionate Btu content of the electricity and the steam) to
            the production of steam which is so used, furnished, or sold.
                ``(2) Exceptions.--Paragraph (1) shall not apply to steam
            used for any purpose if tax would not be imposed under this
            subchapter on the fuel used to produce the steam had such fuel
            been used directly for such purpose.
        ``(f) Treatment of Natural Gas Lost in Transmission.--For purposes
    of this section, natural gas lost in transmission by a pipeline shall
    be treated as used as a fuel for such pipeline.

    ``SEC. 4452. FLOOR STOCKS TAXES.

        ``(a) Imposition of Tax.--There is hereby imposed a tax on any
    taxable fuel which on any tax-increase date is held in the United
    States by any person.
        ``(b) Amount of Tax.--The amount of the tax imposed by subsection
    (a) on any taxable fuel with respect to any tax-increase date shall be
    equal to the excess (if any) of--
                ``(1) the amount of tax which would be imposed under part I
            or II if a taxable event with respect to such fuel had occurred
            on such date, over
                ``(2) the prior tax (if any) imposed by this subchapter on
            such fuel.
        ``(c) Liability for Tax.--The person holding the taxable fuel on
    any tax-increase date shall pay the tax imposed by subsection (a).
        ``(d) Exceptions.--The tax imposed by subsection (a) shall not
    apply to--
                ``(1) any taxable fuel held before the point where it would
            otherwise be subject to tax under part I or II, or
                ``(2) any taxable fuel held by any person exclusively for
            any use by such person to the extent a credit or refund (or
            other payment) of the tax imposed by this section would be
            allowable or payable if such tax were imposed by part I or II.
        ``(e) Credit Against Tax.--
                ``(1) In general.--Each person shall be allowed $200 as a
            credit against the taxes imposed by subsection (a) with respect
            to each tax-increase date. Such credit shall not exceed the
            amount of taxes imposed by subsection (a) for which such person
            is liable with respect to such date.
                ``(2) Controlled groups.--For purposes of paragraph (1)--
                        ``(A) all persons who are treated as a single
                    employer under subsection (a) or (b) of section 52
                    shall be treated as 1 taxpayer, and
                        ``(B) the $200 amount specified in paragraph (1)
                    shall be apportioned among such persons under
                    regulations prescribed by the Secretary.
        ``(f) Definitions.--For purposes of this section--
                ``(1) Taxable fuel.--The term `taxable fuel' means any
            taxable refined petroleum product, natural gas, or coal.
                ``(2) Tax-increase date.--The term `tax-increase date'
            means--
                        ``(A) July 1, 1994,
                        ``(B) July 1, 1995,
                        ``(C) July 1, 1996, and
                        ``(D) January 1 of each calendar year for which
                    there is an increase in a rate of tax by reason of
                    subsection (a)(3) or (b)(3) of section 4448 (relating
                    to inflation adjustment).
        ``(g) Due Date.--The tax imposed by subsection (a) shall be paid on
    or before the close of the 7-month period beginning on the tax-increase
    date.

    ``SEC. 4453. ADMINISTRATIVE PROVISIONS.

        ``(a) Rules Relating to Refunds for Exempt and Other Uses.--
                ``(1) Period for filing claims.--No payment shall be made
            under section 4442, 4444(f), or 4445(e) unless, within 2 years
            after the date that the event occurs giving rise to a right to
            such payment, a claim therefor is filed by the person entitled
            to such payment.
                ``(2) Denial of interest.--Except as provided in paragraph
            (3), no interest shall be paid on claims for payments under
            section 4442, 4444(f), or 4445(e).
                ``(3) Minimum amounts and periods.--In the case of persons
            who meet such requirements as the Secretary may prescribe, if--
                        ``(A) a claim for payment is filed under section
                    4442, 4444(f), or 4445(e) for any period for which more
                    than $1,000 is payable and which is not less than 1
                    week, and
                        ``(B) the Secretary has not paid such claim within
                    20 days after the date the claim was filed,
            such claim shall be paid with interest from such date using the
            overpayment rate and method under section 6621. The preceding
            sentence shall not apply to a claim filed under section
            4442(b)(1). Nothing in section 6611(e) shall bar interest
            payable under this paragraph.
                ``(4) Heating oil.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), not more than 1 claim may be filed
                    under section 4442(b)(1) by any person with respect to
                    fuel oil sold by such person during any calendar year.
                        ``(B) Exception.--If $1,000 or more is payable
                    under section 4442(b)(1) to any person with respect to
                    fuel oil sold during any of the 1st 3 quarters of the
                    calendar year, a claim may be filed under section
                    4442(b)(1) with respect to fuel oil sold during such
                    quarter. No claim filed under this subparagraph shall
                    be allowed unless filed on or before the last day of
                    the 1st quarter following the quarter for which the
                    claim is filed.
                ``(5) Applicable laws.--
                        ``(A) In general.--All provisions of law, including
                    penalties, applicable in respect of the tax imposed by
                    this subchapter shall, insofar as applicable and not
                    inconsistent with this subsection and section 4442,
                    4444(f), or 4445(e), apply in respect of payments
                    provided for in such section to the same extent as if
                    such payments constituted refunds of overpayments of
                    the tax so imposed.
                        ``(B) Examination of books and witnesses.--For the
                    purpose of ascertaining the correctness of any claim
                    made under section 4442, 4444(f), or 4445(e), or the
                    correctness of any payment made in respect of such
                    claim, the Secretary shall have the authority granted
                    by paragraphs (1), (2), and (3) of section 7602(a)
                    (relating to examination of books and witnesses) as if
                    the claimant were the person liable for tax.
        ``(b) Payment of Tax to Persons Required to Collect Tax.--
                ``(1) Payment within 30 days.--In the case of the taxes
            imposed by sections 4444 and 4446 which are required to be
            collected by another person, the person liable for such tax
            shall remit the tax to such other person within 30 days after
            the date of the taxable event.
                ``(2) Relief from penalty for certain failures to collect
            tax.--No penalty shall be imposed under this title on the
            failure of any person to collect the taxes referred to in
            paragraph (1) if--
                        ``(A) during the 30-day period referred to in
                    paragraph (1), such person exercises due diligence in
                    attempting to collect such tax, and
                        ``(B) such person notifies the Secretary, within 15
                    days after the close of the month in which such 30-day
                    period ends, of the failure to collect such tax and
                    provides such other information as the Secretary may
                    require.
                ``(3) Exception for persons with secondary liability.--
            Paragraphs (1) and (2) shall not apply if the person required
            to collect the tax is required to pay any portion of such tax
            which is not paid by the person primarily liable for such tax.
        ``(c) Information Reporting.--The Secretary may require--
                ``(1) information reporting by each remitter of tax imposed
            by this subchapter, and
                ``(2) information reporting by, and registration of, such
            other persons as the Secretary deems necessary to carry out
            this subchapter.
        ``(d) Registration.--
                ``(1) In general.--Every person required by the Secretary
            to register under this subsection with respect to any tax
            imposed by this subchapter shall register with the Secretary at
            such time, in such form and manner, and subject to such terms
            and conditions, as the Secretary may by regulations prescribe.
            A registration under this subsection may be used only in
            accordance with regulations prescribed under this section.
                ``(2) Other rules.--Rules similar to the rules of section
            4101(b) and 4222(c) shall apply for purposes of this
            subsection.
        ``(e) Adjustments to Per Unit Btu Factors.--
                ``(1) In general.--If the Secretary determines that the
            applicable per unit Btu factor then in effect for any taxable
            refined petroleum product or natural gas does not, when
            multiplied by 1,000,000, properly reflect the Btu content per
            unit for such substance (in the circumstances where taxable
            events under this subchapter occur with respect to such
            substance), the Secretary may modify the applicable per unit
            Btu factor for such substance. Any such modification shall be
            effective as of the date prescribed by the Secretary.
                ``(2) Modification of list of refined petroleum products.--
            The Secretary may modify, as appropriate, the list of refined
            petroleum products in section 4441 for which applicable per
            unit Btu factors are separately determined.

    ``SEC. 4454. DEFINITIONS AND SPECIAL RULES.

        ``(a) Definitions.--For purposes of this subchapter--
                ``(1) Fossil fuel.--The term `fossil fuel' means crude oil,
            any petroleum product, natural gas, any natural gas product,
            and coal.
                ``(2) Crude oil.--The term `crude oil' includes condensates
            from crude oil.
                ``(3) Coal.--The term `coal' includes lignite.
                ``(4) United states.--The term `United States' means the 50
            States, the District of Columbia, and the foreign trade zones
            of the United States.
                ``(5) Person.--The term `person' includes the United
            States, any State or political subdivision thereof, the
            District of Columbia, and any agency or instrumentality of any
            of the foregoing.
        ``(c) Fractional Part of Unit.--In the case of a fraction of a
    unit, the tax imposed by this subchapter shall be the same fraction of
    the amount of such tax imposed on a whole unit.
        ``(d) Special Rules Relating to Puerto Rico and the Virgin
    Islands.--
                ``(1) Like tax on articles brought into the united states
            from puerto rico or the virgin islands.--For purposes of this
            subchapter, articles brought into the United States from the
            Commonwealth of Puerto Rico or the Virgin Islands shall be
            treated as entered into the United States at the time brought
            into the United States.
                ``(2) Disposition of revenues.--The provisions of
            subsections (a)(3) and (b)(3) of section 7652 shall not apply
            to any tax imposed by this subchapter.
        ``(e) No Exemption From Tax.--No person shall be exempt from any
    tax imposed by this subchapter except to the extent provided in this
    subchapter or in any provision of law enacted after the date of the
    enactment of this subchapter which grants a specific exemption, by
    reference to this subchapter, from a tax imposed by this subchapter.

                 ``PART V--TAX ON IMPORTED HIGH-ENERGY PRODUCTS

                                  ``Sec. 4456. Imposition of tax.
                                  ``Sec. 4457. Definitions and special
                                            rules.

    ``SEC. 4456. IMPOSITION OF TAX.

        ``(a) General Rule.--There is hereby imposed a tax on any taxable
    high-energy product entered into the United States for consumption,
    use, or warehousing.
        ``(b) Amount of Tax.--The amount of the tax imposed by subsection
    (a) on any taxable high-energy product shall be the imputed Btu tax
    with respect to such product.
        ``(c) Liability for Tax.--The tax imposed by subsection (a) shall
    be paid by the person entering the product for consumption, use, or
    warehousing.

    ``SEC. 4457. DEFINITIONS AND SPECIAL RULES.

        ``(a) Taxable High-Energy Product.--For purposes of this part--
                ``(1) In general.--The term `taxable high-energy product'
            means any product which, at the time entered into the United
            States for consumption, use, or warehousing, is listed as a
            taxable high-energy product by the Secretary.
                ``(2) Determination of products on list.--A product shall
            be listed under paragraph (1) if the product is produced in an
            industry identified (using 4-digit SIC codes) in the most
            recent census of manufacturing as producing products which on
            average have more than 2 percent of their value attributable to
            direct energy inputs (exclusive of the tax imposed by parts I
            and II) of taxable energy sources.
                ``(3) Taxable energy source.--The term `taxable energy
            source' means any taxable refined petroleum product, natural
            gas, coal, and electricity.
        ``(b) Imputed Btu Tax.--For purposes of this part--
                ``(1) In general.--Except as otherwise provided in this
            subsection, the term `imputed Btu tax' means, with respect to
            any taxable high-energy product, the amount of tax which would
            have been imposed by parts I and II on taxable energy sources
            directly used in the manufacture or production of the product
            if--
                        ``(A) such product were manufactured or produced
                    using the predominant method of manufacture or
                    production of such product in the United States, and
                        ``(B) such taxable energy sources had been subject
                    to tax under such parts on the date of the entry of the
                    product into the United States for consumption, use, or
                    warehousing.
                ``(2) Tax where information furnished.--If the person
            liable for the tax imposed by section 4456 with respect to any
            product furnishes to the Secretary (at such time and in such
            manner as the Secretary shall prescribe) sufficient information
            to determine the imputed Btu tax with respect to such product,
            the imputed Btu tax determined using such information shall
            apply in lieu of the amount determined under paragraph (1).
        ``(c) Requests To Change List.--If any importer or producer of any
    product requests that the Secretary determine whether--
                ``(1) such product should be listed as a taxable high-
            energy product under subsection (a)(1) or be removed from such
            listing, or
                ``(2) the imputed Btu tax for such product under subsection
            (b)(1),
    the Secretary shall make such determination within 180 days after the
    date the request was filed.''
        (b) Refunds for Farm Use of Gasoline and Diesel Fuel.--
                (1) Gasoline.--
                        (A) Subsection (a) of section 6420 is amended by
                    adding at the end thereof the following new flush
                    sentence:
    ``If the supplemental rate of the tax imposed by section 4441 was
    imposed on such gasoline, the Secretary shall also pay (without
    interest) to such ultimate purchaser an amount equal to the product of
    such supplemental rate and the applicable per unit Btu factor per
    barrel (determined under section 4441) of the gasoline so used.''
                        (B) Subsection (h) of section 6420 is amended by
                    inserting ``and taxes imposed by section 4441'' after
                    ``financing rate''.
                (2) Diesel fuel.--
                        (A) Section 6427 is amended by redesignating
                    subsections (m) through (r) as subsections (n) through
                    (s), respectively, and by inserting after subsection
                    (l) the following new subsection:
        ``(m) Refunds of Supplemental Rate of Btu Tax on Farm Use of Diesel
    Fuel.--Except as provided in subsection (k), if the supplemental rate
    of the tax imposed by section 4441 was imposed on diesel fuel used on a
    farm for farming purposes (within the meaning of section 6420(c)), the
    Secretary shall pay (without interest) to the ultimate purchaser of
    such fuel an amount equal to the product of such supplemental rate and
    the applicable per unit Btu factor per barrel (determined under section
    4441) of the diesel fuel so used.''
                        (B) Paragraph (1) of section 6427(i) is amended by
                    inserting ``(m),'' after ``(l),''.
                        (C) Paragraph (4) of section 6427(i), as amended by
                    subpart B, is amended--
                                (i) by striking ``or 4091'' in the
                            paragraph heading and inserting ``, 4091, or
                            4441'', and
                                (ii) by striking ``subsection (l)'' each
                            place it appears and inserting ``subsections
                            (l) and (m)''.
        (c) Civil Penalty For Using Reduced-Rate Fuel For Taxable Use.--
                (1) In general.--Part I of subchapter B of chapter 68
            (relating to assessable penalties) is amended by adding at the
            end thereof the following new section:

    ``SEC. 6714. DYED FUEL SOLD FOR USE OR USED IN TAXABLE USE.

        ``(a) Imposition of Penalty.--If any dyed fuel--
                ``(1) is sold by any person for any use which such person
            knows or has reason to know is not a reduced-tax use of such
            fuel, or
                ``(2) is used by any person for a use other than a reduced-
            tax use and such person knew, or had reason to know, that such
            fuel was so dyed,
    then, in addition to the tax, such person shall pay a penalty on such
    sale or use.
        ``(b) Amount of Penalty.--The amount of the penalty under
    subsection (a) on any sale or use shall be the greater of--
                ``(1) $1,000, or
                ``(2) an amount equal to twice the excess of the aggregate
            taxes which should have been imposed under section 4441 on the
            fuel so sold or used over the prior taxes (if any) imposed on
            such fuel under such section which have not been credited or
            refunded.
        ``(c) Definitions.--For purposes of this section--
                ``(1) Dyed fuel.--The term `dyed fuel' means--
                        ``(A) qualified heating oil (as defined in section
                    4441(b)(2)(B)), and
                        ``(B) diesel fuel dyed in accordance with section
                    4441(b)(2)(C).
                ``(2) Reduced-tax use.--The term `reduced-tax use' means,
            with respect to any fuel, the use for which such fuel was
            dyed.''
                (2) Clerical amendment.--The table of sections for such
            part I is amended by adding at the end thereof the following
            new item:

                                  ``Sec. 6714. Dyed fuel sold for use or
                                            used in taxable use.''
        (d) Technical Amendments.--
                (1)(A) Subsection (a) of section 6675 is amended by
            inserting ``section 4442 (relating to refunds of petroleum tax
            for certain sales and uses), section 4444(f) (relating to
            methane recovered from biomass or coal mining), section 4445(e)
            (relating to coal used in production of coke for steel),''
            before ``section 6420''.
                (B) Subsection (b) of section 6675 is amended by inserting
            ``4442, 4444(f), 4445(e),'' before ``6420''.
                (2) Section 6206 is amended--
                        (A) by inserting ``(a) Fuel Taxes.--'' before ``Any
                    portion of'', and
                        (B) by adding at the end thereof the following new
                    subsection:
        ``(b) Btu Taxes.--Any portion of a payment made under section 4442,
    4444(f), or 4445(e) which constitutes an excessive amount (as defined
    in section 6675(b)), and any civil penalty provided by section 6675,
    may be assessed and collected as if it were a tax imposed by subchapter
    A of chapter 36 and as if the person who made the claim were liable for
    such tax. The period for assessing any such portion, and for assessing
    any such penalty, shall be 3 years from the last day prescribed for
    filing a claim under section 4442, 4444(f), or 4445(e).''
                (3)(A) The section heading for section 6206 is amended by
            striking ``under sections 6420, 6421, and 6427'' and inserting
            ``for certain fuels tax refunds and energy tax refunds''.
                (B) The item relating to section 6206 in the table of
            sections for subchapter A of chapter 63 is amended by striking
            ``under sections 6420, 6421, and 6427'' and inserting ``for
            certain fuels tax refunds and energy tax refunds''.
                (4) Subparagraph (B) of section 6724(d)(1) is amended--
                        (A) by striking ``or'' at the end of clause (xi),
                        (B) by striking the period at the end of the clause
                    (xii) relating to section 4101(d) and inserting a
                    comma,
                        (C) by redesignating the clause (xii) relating to
                    section 338(h)(10)(C) as clause (xiii) and by striking
                    the period at the end thereof and inserting ``, or'',
                    and
                        (D) by inserting after clause (xiii), as so
                    redesignated, the following new clause:
                                ``(xiv) section 4453(c) (relating to
                            information reporting with respect to energy
                            taxes).''
                (5) Sections 7210, section 7603, subsections (b) and (c)(2)
            of section 7604, section 7605, and 7610(c) are each amended by
            inserting ``4453(a)(5)(B),'' before ``6420(e)(2)'' each place
            it appears.
                (6) Subparagraph (A) of section 9505(c)(3) is amended by
            striking ``subchapter A'' and inserting ``subchapter B''.
                (7) The table of subchapters for chapter 36 is amended by
            striking the items relating to subchapters A and B and
            inserting the following:

                                  ``Subchapter A. Energy taxes.
                                  ``Subchapter B. Harbor maintenance tax.
                                  ``Subchapter C. Transportation by
                                            water.''
        (e) Effective Date.--The amendments made by this section shall take
    effect on July 1, 1994.

                 Subpart B--Modifications to Tax on Diesel Fuel

    SEC. 14242. MODIFICATIONS TO TAX ON DIESEL FUEL.

        (a) In General.--Subparts A and B of part III of subchapter A of
    chapter 32 (relating to manufacturers excise taxes) are amended to read
    as follows:

                     ``Subpart A--Gasoline and Diesel Fuel

                                  ``Sec. 4081. Imposition of tax.
                                  ``Sec. 4082. Exemptions for diesel fuel.
                                  ``Sec. 4083. Definitions and special
                                            rule.
                                  ``Sec. 4084. Cross references.

    ``SEC. 4081. IMPOSITION OF TAX.

        ``(a) Tax Imposed.--
                ``(1) Tax on removal, entry, or sale.--
                        ``(A) In general.--There is hereby imposed a tax at
                    the rate specified in paragraph (2) on--
                                ``(i) the removal of a taxable fuel from
                            any refinery,
                                ``(ii) the removal of a taxable fuel from
                            any terminal,
                                ``(iii) the entry into the United States of
                            any taxable fuel for consumption, use, or
                            warehousing, and
                                ``(iv) the sale of a taxable fuel to any
                            person who is not registered under section 4101
                            unless there was a prior taxable removal or
                            entry of such fuel under clause (i), (ii), or
                            (iii).
                        ``(B) Exemption for bulk transfers to registered
                    terminals.--The tax imposed by this paragraph shall not
                    apply to any removal or entry of a taxable fuel
                    transferred in bulk to a terminal if the person
                    removing or entering the taxable fuel and the operator
                    of such terminal are registered under section 4101.
                ``(2) Rates of tax.--
                        ``(A) In general.--The rate of the tax imposed by
                    this section is the sum of--
                                ``(i) the Highway Trust Fund financing
                            rate,
                                ``(ii) the Leaking Underground Storage Tank
                            Trust Fund financing rate, and
                                ``(iii) the deficit reduction rate.
                        ``(B) Rates.--For purposes of subparagraph (A)--
                                ``(i) the Highway Trust Fund financing rate
                            is--
                                        ``(I) 11.5 cents per gallon in the
                                    case of gasoline, and
                                        ``(II) 17.5 cents per gallon in the
                                    case of diesel fuel,
                                ``(ii) the Leaking Underground Storage Tank
                            Trust Fund financing rate is 0.1 cent per
                            gallon, and
                                ``(iii) the deficit reduction rate is 2.5
                            cents per gallon.
        ``(b) Treatment of Removal or Subsequent Sale by Blender.--
                ``(1) In general.--There is hereby imposed a tax at the
            rate specified in subsection (a) on taxable fuel removed or
            sold by the blender thereof.
                ``(2) Credit for tax previously paid.--If--
                        ``(A) tax is imposed on the removal or sale of a
                    taxable fuel by reason of paragraph (1), and
                        ``(B) the blender establishes the amount of the tax
                    paid with respect to such fuel by reason of subsection
                    (a),
            the amount of the tax so paid shall be allowed as a credit
            against the tax imposed by reason of paragraph (1).
        ``(c) Taxable Fuels Mixed With Alcohol at Refinery, Etc.--
                ``(1) Reduced rates.--
                        ``(A) In general.--Under regulations prescribed by
                    the Secretary, subsection (a) shall be applied by
                    substituting rates which are the applicable fraction of
                    the otherwise applicable rates in the case of the
                    removal or entry of any taxable fuel for use in
                    producing at the time of such removal or entry a
                    qualified alcohol mixture. Subject to such terms and
                    conditions as the Secretary may prescribe (including
                    the application of section 4101), the treatment under
                    the preceding sentence also shall apply to use in
                    producing such a mixture after the time of such removal
                    or entry.
                        ``(B) Applicable fraction.--For purposes of
                    subparagraph (A), the applicable fraction is--
                                ``(i) in the case of a qualified alcohol
                            mixture which contains gasoline, the fraction
                            the numerator of which is 10 and the
                            denominator of which is--
                                        ``(I) 9 in the case of 10 percent
                                    gasohol,
                                        ``(II) 9.23 in the case of 7.7
                                    percent gasohol, and
                                        ``(III) 9.43 in the case of 5.7
                                    percent gasohol, and
                                ``(ii) in the case of a qualified alcohol
                            mixture which does not contain gasoline, \10/
                            9\.
                ``(2) Later separation of fuel from qualified alcohol
            mixture.--If any person separates the taxable fuel from a
            qualified alcohol mixture on which tax was imposed under
            subsection (a) at the otherwise applicable Highway Trust Fund
            financing rate (or its equivalent) by reason of this subsection
            (or with respect to which a credit or payment was allowed or
            made by reason of section 6427(f)(1)), such person shall be
            treated as the refiner of such taxable fuel. The amount of tax
            imposed on any removal of such fuel by such person shall be
            reduced by the amount of tax imposed (and not credited or
            refunded) on any prior removal or entry of such fuel.
                ``(3) Alcohol; qualified alcohol mixture.--For purposes of
            this subsection--
                        ``(A) Alcohol.--The term `alcohol' includes
                    methanol and ethanol but does not include alcohol
                    produced from petroleum, natural gas, or coal
                    (including peat). Such term does not include alcohol
                    with a proof of less than 190 (determined without
                    regard to any added denaturants).
                        ``(B) Qualified alcohol mixture.--The term
                    `qualified alcohol mixture' means--
                                ``(i) any mixture of gasoline with alcohol
                            if at least 5.7 percent of such mixture is
                            alcohol, and
                                ``(ii) any mixture of diesel fuel with
                            alcohol if at least 10 percent of such mixture
                            is alcohol.
                ``(4) Otherwise applicable rates for gasoline mixtures.--
            For purposes of this subsection--
                        ``(A) In general.--In the case of the Highway Trust
                    Fund financing rate, the otherwise applicable rate for
                    gasoline in a qualified alcohol mixture is--
                                ``(i) 6.1 cents a gallon for 10 percent
                            gasohol,
                                ``(ii) 7.342 cents a gallon for 7.7 percent
                            gasohol, and
                                ``(iii) 8.422 cents a gallon for 5.7
                            percent gasohol.
                    In the case of a mixture none of the alcohol in which
                    consists of ethanol, clauses (i), (ii), and (iii) shall
                    be applied by substituting `5.5 cents' for `6.1 cents',
                    `6.88 cents' for `7.342 cents', and `8.08 cents' for
                    `8.422 cents'.
                        ``(B) 10 percent gasohol.--The term `10 percent
                    gasohol' means any mixture of gasoline with alcohol if
                    at least 10 percent of such mixture is alcohol.
                        ``(C) 7.7 percent gasohol.--The term `7.7 percent
                    gasohol' means any mixture of gasoline with alcohol if
                    at least 7.7 percent, but not 10 percent or more, of
                    such mixture is alcohol.
                        ``(D) 5.7 percent gasohol.--The term `5.7 percent
                    gasohol' means any mixture of gasoline with alcohol if
                    at least 5.7 percent, but not 7.7 percent or more, of
                    such mixture is alcohol.
                ``(5) Otherwise applicable rates for diesel fuel
            mixtures.--For purposes of this subsection, in the case of the
            Highway Trust Fund financing rate, the otherwise applicable
            rate for diesel fuel in a qualified alcohol mixture is 12.1
            cents per gallon (11.5 cents per gallon in the case of a
            qualified alcohol mixture none of the alcohol in which consists
            of ethanol).
                ``(6) Termination.--Paragraph (1) shall not apply to any
            removal or sale after September 30, 2000.
        ``(d) Termination.--
                ``(1) Highway trust fund financing rate.--On and after
            October 1, 1999, the Highway Trust Fund financing rate under
            subsection (a)(2) shall not apply.
                ``(2) Leaking underground storage tank trust fund financing
            rate.--The Leaking Underground Storage Tank Trust Fund
            financing rate under subsection (a)(2) shall not apply after
            December 31, 1995.
                ``(3) Deficit reduction rate.--On and after October 1,
            1995, the deficit reduction rate under subsection (a)(2) shall
            not apply.
        ``(e) Refunds in Certain Cases.--Under regulations prescribed by
    the Secretary, if any person who paid the tax imposed by this section
    with respect to any taxable fuel establishes to the satisfaction of the
    Secretary that a prior tax was paid (and not credited or refunded) with
    respect to such taxable fuel, then an amount equal to the tax paid by
    such person shall be allowed as a refund (without interest) to such
    person in the same manner as if it were an overpayment of tax imposed
    by this section.

    ``SEC. 4082. EXEMPTIONS FOR DIESEL FUEL.

        ``(a) In General.--The tax imposed by section 4081 shall not apply
    to diesel fuel--
                ``(1) which the Secretary determines is destined for a
            nontaxable use,
                ``(2) which is indelibly dyed in accordance with
            regulations which the Secretary shall prescribe, and
                ``(3) which meets such marking requirements (if any) as may
            be prescribed by the Secretary in regulations.
        ``(b) Nontaxable Use.--For purposes of this section, the term
    `nontaxable use' means--
                ``(1) any use which is exempt from the tax imposed by
            section 4041(a)(1) other than by reason of the imposition of
            tax on any sale thereof,
                ``(2) any use in a train, and
                ``(3) any use described in section 6427(b)(1).
        ``(c) Regulations.--The Secretary shall prescribe such regulations
    as may be necessary to carry out this section, including regulations
    requiring the conspicuous labeling of retail diesel fuel pumps and
    other delivery facilities to assure that persons are aware of which
    fuel is available only for nontaxable uses.
        ``(d) Cross Reference.--

                                    ``For tax on train, motorboat, and
    certain bus uses of fuel purchased tax-free, see section 4041(a)(1).

    ``SEC. 4083. DEFINITIONS AND SPECIAL RULE.

        ``(a) Taxable Fuel.--For purposes of this subpart--
                ``(1) In general.--The term `taxable fuel' means--
                        ``(A) gasoline, and
                        ``(B) diesel fuel.
                ``(2) Gasoline.--The term `gasoline' includes, to the
            extent prescribed in regulations--
                        ``(A) gasoline blend stocks, and
                        ``(B) products commonly used as additives in
                    gasoline.
            For purposes of subparagraph (A), the term `gasoline blend
            stock' means any petroleum product component of gasoline.
                ``(3) Diesel fuel.--The term `diesel fuel' means any liquid
            (other than gasoline) which is suitable for use as a fuel in a
            diesel-powered highway vehicle, a diesel-powered train, or a
            diesel-powered boat.
        ``(b) Certain Uses Defined as Removal.--If any person uses taxable
    fuel (other than in the production of gasoline, diesel fuel, or special
    fuels referred to in section 4041), such use shall for the purposes of
    this chapter be considered a removal.

    ``SEC. 4084. CROSS REFERENCES.

                                    ``(1) For provisions to relieve farmers
    from excise tax in the case of gasoline used on the farm for farming
    purposes, see section 6420.
                                    ``(2) For provisions to relieve
    purchasers of gasoline from excise tax in the case of gasoline used for
    certain nonhighway purposes, used by local transit systems, or sold for
    certain exempt purposes, see section 6421.
                                    ``(3) For provisions to relieve
    purchasers from excise tax in the case of taxable fuel not used for
    taxable purposes, see section 6427.

                           ``Subpart B--Aviation Fuel

                                  ``Sec. 4091. Imposition of tax.
                                  ``Sec. 4092. Exemptions.
                                  ``Sec. 4093. Definitions.

    ``SEC. 4091. IMPOSITION OF TAX.

        ``(a) In General.--There is hereby imposed a tax on the sale of
    aviation fuel by the producer or the importer thereof or by any
    producer of aviation fuel.
        ``(b) Rate of Tax.--
                ``(1) In general.--The rate of the tax imposed by
            subsection (a) shall be the sum of--
                        ``(A) the Airport and Airway Trust Fund financing
                    rate, and
                        ``(B) the Leaking Underground Storage Tank Trust
                    Fund financing rate.
                ``(2) Airport and airway trust fund financing rate.--For
            purposes of paragraph (1), the Airport and Airway Trust Fund
            financing rate is 17.5 cents per gallon.
                ``(3) Leaking underground storage tank trust fund financing
            rate.--For purposes of paragraph (1), the Leaking Underground
            Storage Tank Trust Fund financing rate is 0.1 cent per gallon.
                ``(4) Termination of rates.--
                        ``(A) The Airport and Airway Trust Fund financing
                    rate shall not apply on and after January 1, 1996.
                        ``(B) The Leaking Underground Storage Tank Fund
                    financing rate shall not apply during any period during
                    which the Leaking Underground Storage Tank Trust Fund
                    financing rate under section 4081 does not apply.
        ``(c) Reduced Rate of Tax for Aviation Fuel in Alcohol Mixture,
    Etc.--
                ``(1) In general.--The Airport and Airway Trust Fund
            financing rate shall be--
                        ``(A) 4.1 cents per gallon in the case of the sale
                    of any mixture of aviation fuel if--
                                ``(i) at least 10 percent of such mixture
                            consists of alcohol (as defined in section
                            4081(c)(3)), and
                                ``(ii) the aviation fuel in such mixture
                            was not taxed under subparagraph (B), and
                        ``(B) 4.56 cents per gallon in the case of the sale
                    of aviation fuel for use (at the time of such sale) in
                    producing a mixture described in subparagraph (A).
            In the case of a sale described in subparagraph (B), the
            Leaking Underground Storage Tank Trust Fund financing rate
            shall be \1/9\ cent per gallon.
                ``(2) Later separation.--If any person separates the
            aviation fuel from a mixture of the aviation fuel and alcohol
            on which tax was imposed under subsection (a) at the Airport
            and Airway Trust Fund financing rate equivalent to 4.1 cents
            per gallon by reason of this subsection (or with respect to
            which a credit or payment was allowed or made by reason of
            section 6427(f)(1)), such person shall be treated as the
            producer of such aviation fuel. The amount of tax imposed on
            any sale of such aviation fuel by such person shall be reduced
            by the amount of tax imposed (and not credited or refunded) on
            any prior sale of such fuel.
                ``(3) Termination.--Paragraph (1) shall not apply to any
            sale after September 30, 2000.
        ``(d) Lower Rates of Tax on Alcohol Mixtures Not Made From
    Ethanol.--In the case of a mixture described in subsection (c)(1)(A)(i)
    none of the alcohol in which is ethanol--
                ``(1) subsections (c)(1)(A) and (c)(2) shall each be
            applied by substituting rates which are 0.6 cents less than the
            rates contained therein, and
                ``(2) subsection (c)(1)(B) shall be applied by substituting
            rates which are \10/9\ of the rates determined under paragraph
            (1).

    ``SEC. 4092. EXEMPTIONS.

        ``(a) Nontaxable Uses.--The Airport and Airway Trust Fund financing
    rate under section 4091 shall not apply to aviation fuel sold by a
    producer or importer for use by the purchaser in a nontaxable use (as
    defined in section 6427(l)(2)(B)).
        ``(b) Sales to Producer.--Under regulations prescribed by the
    Secretary, the tax imposed by section 4091 shall not apply to aviation
    fuel sold to a producer of such fuel.
        ``(c) Supplies for Vessels and Aircraft.--Under regulations
    prescribed by the Secretary, the Leaking Underground Storage Tank Trust
    Fund financing rate under section 4091 shall not apply to aviation fuel
    sold for use or used as supplies for vessels or aircraft (within the
    meaning of section 4221(d)(3)).

    ``SEC. 4093. DEFINITIONS.

        ``(a) Aviation Fuel.--For purposes of this subpart, the term
    `aviation fuel' means any liquid (other than any product taxable under
    section 4081) which is suitable for use as a fuel in an aircraft.
        ``(b) Producer.--For purposes of this subpart--
                ``(1) Certain persons treated as producers.--
                        ``(A) In general.--The term `producer' includes any
                    person described in subparagraph (B) and registered
                    under section 4101 with respect to the tax imposed by
                    section 4091.
                        ``(B) Persons described.--A person is described in
                    this subparagraph if such person is--
                                ``(i) a refiner, blender, or wholesale
                            distributor of aviation fuel, or
                                ``(ii) a dealer selling aviation fuel
                            exclusively to producers of aviation fuel.
                        ``(C) Reduced rate purchasers treated as
                    producers.--Any person to whom aviation fuel is sold at
                    a reduced rate under this subpart shall be treated as
                    the producer of such fuel.
                ``(2) Wholesale distributor.--For purposes of paragraph
            (1), the term `wholesale distributor' includes any person who
            sells aviation fuel to producers, retailers, or to users who
            purchase in bulk quantities and deliver into bulk storage
            tanks. Such term does not include any person who (excluding the
            term `wholesale distributor' from paragraph (1)) is a producer
            or importer.''
        (b) Civil Penalty For Using Reduced-Rate Fuel For Taxable Use.--
                (1) Paragraph (1) of section 6714(c), as added by subpart
            A, is amended by striking ``and'' at the end of subparagraph
            (A), by striking the period at the end of subparagraph (B) and
            inserting ``, and'', and by adding at the end thereof the
            following new subparagraph:
                        ``(C) diesel fuel dyed in accordance with section
                    4082.''
                (2) Paragraph (2) of section 6714(b), as added by subpart
            A, is amended by striking ``section 4441'' and inserting
            ``sections 4081 and 4441'' and by striking ``such section'' and
            inserting ``such sections''.
        (c) Technical and Conforming Amendments.--
                (1) Subsection (c) of section 40 is amended by striking ``,
            section 4081(c), or section 4091(c)'' and inserting ``or
            section 4081(c)''.
                (2) Subsection (a) of section 4101 is amended by striking
            ``4081'' and inserting ``4041(a)(1), 4081,''.
                (3) Section 4102 is amended by striking ``gasoline'' and
            inserting ``any taxable fuel (as defined in section 4083)''.
                (4) Paragraph (1) of section 4041(a) is amended to read as
            follows:
                ``(1) Tax on diesel fuel in certain cases.--
                        ``(A) In general.--There is hereby imposed a tax on
                    any liquid other than gasoline (as defined in section
                    4083)--
                                ``(i) sold by any person to an owner,
                            lessee, or other operator of a diesel-powered
                            highway vehicle, a diesel-powered train, or a
                            diesel-powered boat for use as a fuel in such
                            vehicle, train, or boat, or
                                ``(ii) used by any person as a fuel in a
                            diesel-powered highway vehicle, a diesel-
                            powered train, or a diesel-powered boat unless
                            there was a taxable sale of such fuel under
                            clause (i).
                        ``(B) Exemption for previously taxed fuel.--No tax
                    shall be imposed by this paragraph on the sale or use
                    of diesel fuel if there was a taxable sale of such fuel
                    under section 4081 and the tax thereon was not credited
                    or refunded.
                        ``(C) Rate of tax.--
                                ``(i) In general.--Except as otherwise
                            provided in this subparagraph, the rate of the
                            tax imposed by this paragraph shall be the sum
                            of the Highway Trust Fund financing rate on
                            diesel fuel and the deficit reduction rate in
                            effect under section 4081 at the time of such
                            sale or use.
                                ``(ii) Highway rate not to apply to
                            trains.--The Highway Trust Fund financing rate
                            shall not apply to any sale for use, or use, of
                            fuel in a train.
                                ``(iii) Certain bus uses.--If the
                            limitation in section 6427(b)(2)(A) applies to
                            fuel sold for use or used in an automobile bus,
                            the Highway Trust Fund financing rate shall be
                            3 cents per gallon and the deficit reduction
                            rate shall not apply.''
                (5) Paragraph (2) of section 4041(a) is amended by striking
            ``or paragraph (1) of this subsection'' and by inserting ``on
            gasoline'' after ``Highway Trust Fund financing rate''.
                (6) Paragraph (2) of section 4041(c) is amended by striking
            ``any product taxable under section 4081'' and inserting
            ``gasoline (as defined in section 4083)''.
                (7) Paragraph (2) of section 4041(d) is amended--
                        (A) by striking ``(other than a product taxable
                    under section 4081)'' and inserting ``(other than
                    gasoline (as defined in section 4083))'', and
                        (B) by striking ``section 4091'' and inserting
                    ``section 4081''.
                (8) Paragraph (3) of section 4041(d) is amended by striking
            ``(other than any product taxable under section 4081)'' and
            inserting ``(other than gasoline (as defined in section
            4083))''.
                (9) Subparagraph (A) of section 4041(k)(1) is amended by
            striking ``sections 4081(c) and 4091(c), as the case may be''
            and inserting ``section 4081(c)''.
                (10) Subparagraph (B) of section 4041(m)(1) is amended by
            striking ``section 4091(d)(1)'' and inserting ``section
            4091(c)(1)''.
                (11) Section 6206 is amended by striking ``4041 or 4091''
            and inserting ``4041, 4081, or 4091''.
                (12) Paragraph (1) of section 6302(f) is amended by
            inserting ``on gasoline'' after ``section 4081'' and after
            ``such tax''.
                (13) Paragraph (1) of section 6412(a) is amended by
            striking ``gasoline'' each place it appears (including the
            heading) and inserting ``taxable fuel''.
                (14)(A) Subparagraph (A) of section 6416(a)(4) is amended
            by striking ``product'' each place it appears and inserting
            ``gasoline''.
                (B) Subparagraph (B) of section 6416(a)(4) is amended by
            striking all that follows ``substituting'' and inserting ```any
            gasoline taxable under section 4081' for `aviation fuel'
            therein).''
                (15) Sections 6420(c)(5) and 6421(e)(1) are each amended by
            striking ``section 4082(b)'' and inserting ``section 4083(a)''.
                (16) Subsection (b) of section 6427 is amended--
                        (A) by striking ``if any fuel'' in paragraph (1)
                    and inserting ``if any diesel fuel (as defined in
                    section 4083(a))'', and
                        (B) by striking ``4091'' each place it appears and
                    inserting ``4081''.
                (17)(A) Paragraph (1) of section 6427(f) is amended by
            striking ``4091(c)(1)(A), or 4091(d)(1)(A)'' and inserting ``or
            4091(c)(1)(A)''.
                (B) Paragraph (2) of section 6427(f) is amended to read as
            follows:
                ``(2) Definitions.--For purposes of paragraph (1)--
                        ``(A) Regular tax rate.--The term `regular tax
                    rate' means--
                                ``(i) in the case of gasoline or diesel
                            fuel, the aggregate rate of tax imposed by
                            section 4081 determined without regard to
                            subsection (c) thereof, and
                                ``(ii) in the case of aviation fuel, the
                            aggregate rate of tax imposed by section 4091
                            determined without regard to subsection (c)
                            thereof.
                        ``(B) Incentive tax rate.--The term `incentive tax
                    rate' means--
                                ``(i) in the case of gasoline or diesel
                            fuel, the aggregate rate of tax imposed by
                            section 4081 with respect to fuel described in
                            subsection (c)(1) thereof, and
                                ``(ii) in the case of aviation fuel, the
                            aggregate rate of tax imposed by section 4091
                            with respect to fuel described in subsection
                            (c)(1)(B) thereof.''
                (18) Subsection (h) of section 6427 is amended by striking
            ``section 4082(b)'' and inserting ``section 4083(a)(2)''.
                (19) Paragraph (3) of section 6427(i) is amended--
                        (A) by striking ``gasohol'' in the heading and
                    inserting ``alcohol mixture'', and
                        (B) by striking ``gasoline used to produce gasohol
                    (as defined in section 4081(c)(1))'' in subparagraph
                    (A) and inserting ``gasoline or diesel fuel used to
                    produce a qualified alcohol mixture (as defined in
                    section 4081(c)(3))''.
                (20) The heading of paragraph (4) of section 6427(i) is
            amended by inserting ``4081 or'' before ``4091''.
                (21) Subsection (l) of section 6427 is amended to read as
            follows:
        ``(l) Nontaxable Uses of Diesel Fuel and Aviation Fuel.--
                ``(1) In general.--Except as provided in subsection (k) and
            in paragraphs (3) and (4) of this subsection, if--
                        ``(A) any diesel fuel on which tax has been imposed
                    by section 4081, or
                        ``(B) any aviation fuel on which tax has been
                    imposed by section 4091,
            is used by any person in a nontaxable use, the Secretary shall
            pay (without interest) to the ultimate purchaser of such fuel
            an amount equal to the aggregate amount of tax imposed on such
            fuel under section 4081 or 4091, as the case may be.
                ``(2) Nontaxable use.--For purposes of this subsection, the
            term `nontaxable use' means--
                        ``(A) in the case of diesel fuel, any use which is
                    exempt from the tax imposed by section 4041(a)(1) other
                    than by reason of the imposition of tax on any sale
                    thereof, and
                        ``(B) in the case of aviation fuel, any use which
                    is exempt from the tax imposed by section 4041(c)(1)
                    other than by reason of the imposition of tax on any
                    sale thereof.
                ``(3) Limit on refund of leaking underground storage tank
            trust fund financing rate.--Paragraph (1) shall not apply to so
            much of the tax imposed by section 4081 or 4091 as is
            attributable to the Leaking Underground Storage Tank Trust Fund
            financing rate imposed by such section in the case of--
                        ``(A) fuel used in a diesel-powered train, and
                        ``(B) fuel used in any aircraft (other than as
                    supplies for vessels or aircraft, within the meaning of
                    section 4221(d)(3)).
                ``(4) No refund of deficit reduction tax on fuel used in
            trains.--Fuel used in a diesel-powered train shall be treated
            as a nontaxable use for purposes of this section, except that
            paragraph (1) shall not apply to so much of the tax imposed by
            section 4081 as is attributable to the deficit reduction rate
            imposed by such section unless such fuel was used by a State or
            any political subdivision thereof.''
                (22) Paragraph (1) of section 9503(b) is amended--
                        (A) by striking ``gasoline),'' in subparagraph (E)
                    and inserting ``gasoline and diesel fuel), and'',
                        (B) by striking subparagraph (F), and
                        (C) by redesignating subparagraph (G) as
                    subparagraph (F).
                (23)(A) Subparagraph (B) of section 9503(b)(4) is amended
            by striking ``, 4081, and 4091'' and inserting ``and 4081''.
                (B) Subparagraph (C) of section 9503(b)(4), as amended by
            subtitle A, is amended by striking ``4091'' and inserting
            ``4081''.
                (24) Subparagraph (D) of section 9503(c)(6) is amended by
            striking ``, 4081, and 4091'' and inserting ``and 4081''.
                (25) Paragraph (2) of section 9503(e) is amended--
                        (A) by striking ``, 4081, and 4091'' and inserting
                    ``and 4081'', and
                        (B) by striking ``, 4081, or 4091'' and inserting
                    ``or 4081''.
                (26) Subsection (b) of section 9508 is amended--
                        (A) by inserting ``and diesel fuel'' after
                    ``gasoline'' in paragraph (2),
                        (B) by striking ``diesel fuel and'' in paragraph
                    (3), and
                        (C) by striking ``4091'' in the last sentence, as
                    added by subtitle A, and inserting ``4081''.
                (27) The table of subparts for part III of subchapter A of
            chapter 32 is amended by striking the items relating to
            subparts A and B and inserting the following new items:

                                  ``Subpart A. Gasoline and diesel fuel.
                                  ``Subpart B. Aviation fuel.''
        (d) Effective Date.--The amendments made by this section shall take
    effect on April 1, 1994.

    SEC. 14243. FLOOR STOCKS TAX.

        (a) In General.--There is hereby imposed a floor stocks tax on
    diesel fuel held by any person on April 1, 1994, if--
                (1) no tax was imposed on such fuel under section 4041(a)
            or 4091 of the Internal Revenue Code of 1986 as in effect on
            the day before the date of the enactment of this Act, and
                (2) tax would have been imposed by section 4081 of such
            Code, as amended by this Act, on any prior removal, entry, or
            sale of such fuel had such section 4081 applied to all prior
            removals, entries, and sales of such fuel.
        (b) Rate of Tax.--The rate of the tax imposed by subsection (a)
    shall be the amount of tax which would be imposed under section 4081 of
    the Internal Revenue Code of 1986 if there were a taxable sale of such
    fuel on such date.
        (c) Liability and Payment of Tax.--
                (1) Liability for tax.--A person holding the diesel fuel on
            April 1, 1994, to which the tax imposed by this section applies
            shall be liable for such tax.
                (2) Method of payment.--The tax imposed by this section
            shall be paid in such manner as the Secretary shall prescribe.
                (3) Time for payment.--The tax imposed by this section
            shall be paid on or before January 31, 1995.
        (d) Definitions.--For purposes of this section--
                (1) Diesel fuel.--The term ``diesel fuel'' has the meaning
            given such term by section 4083(a) of such Code.
                (2) Secretary.--The term ``Secretary'' means the Secretary
            of the Treasury or his delegate.
        (e) Exceptions.--
                (1) Persons entitled to credit or refund.--The tax imposed
            by this section shall not apply to fuel held by any person
            exclusively for any use to the extent a credit or refund of the
            tax imposed by section 4081 is allowable for such use.
                (2) Compliance with dyeing required.--Paragraph (1) shall
            not apply to the holder of any fuel if the holder of such fuel
            fails to comply with any requirement imposed by the Secretary
            with respect to dyeing and marking such fuel.
        (f) Other Laws Applicable.--All provisions of law, including
    penalties, applicable with respect to the taxes imposed by section 4081
    of such Code shall, insofar as applicable and not inconsistent with the
    provisions of this section, apply with respect to the floor stock taxes
    imposed by this section to the same extent as if such taxes were
    imposed by such section 4081.

     Subpart C--Extension of Motor Fuel Tax Rates; Increased Deposits Into
                               Highway Trust Fund

    SEC. 14244. EXTENSION OF MOTOR FUEL TAX RATES; INCREASED DEPOSITS INTO
                  HIGHWAY TRUST FUND.

        (a) In General.--Clause (i) of section 4081(a)(2)(B), as amended by
    subpart B, is amended--
                (1) by striking ``11.5 cents'' and inserting ``14 cents'',
            and
                (2) by striking ``17.5 cents'' and inserting ``20 cents''.
        (b) Conforming Amendments.--
                (1) Subparagraph (A) of section 4081(c)(4), as so amended,
            is amended to read as follows:
                        ``(A) In general.--In the case of the Highway Trust
                    Fund financing rate, the otherwise applicable rate for
                    gasoline in a qualified alcohol mixture is--
                                ``(i) 8.6 cents a gallon for 10 percent
                            gasohol,
                                ``(ii) 9.842 cents a gallon for 7.7 percent
                            gasohol, and
                                ``(iii) 10.922 cents a gallon for 5.7
                            percent gasohol.
            In the case of a mixture none of the alcohol in which consists
            of ethanol, clauses (i), (ii), and (iii) shall be applied by
            substituting `8.0 cents' for `8.6 cents', `9.38 cents' for
            `9.842 cents', and `10.58 cents' for `10.922'.''
                (2) Paragraph (5) of section 4081(c), as so amended, is
            amended--
                        (A) by striking ``12.1 cents'' and inserting ``14.6
                    cents'', and
                        (B) by striking ``11.5 cents'' and inserting
                    ``14.0''.
                (3) Subparagraph (A) of section 4041(m)(1) is amended to
            read as follows:
                        ``(A) under subsection (a)(2) the Highway Trust
                    Fund financing shall be 7 cents per gallon, and''.
                (4) Paragraph (4) of section 6427(l), as amended by subpart
            B, is amended--
                        (A) by striking ``the deficit reduction rate'' and
                    inserting ``2.5 cents per gallon of the Highway Trust
                    Fund financing rate'', and
                        (B) by striking ``deficit reduction tax'' in the
                    heading and inserting ``portion of tax''.
                (5) Subsection (b) of section 9503 is amended by adding at
            the end thereof the following new paragraph:
                ``(6) Retention of certain taxes in general fund.--
                        ``(A) In general.--There shall not be taken into
                    account under paragraphs (1) and (2)--
                                ``(i) the tax imposed by section 4081 on
                            diesel fuel used in any train, and
                                ``(ii) so much of the following taxes as
                            are attributable to 2.5 cents of the Highway
                            Trust Fund financing rate:
                                        ``(I) Motorboat fuel taxes (as
                                    defined in subsection (c)(4)(D)).
                                        ``(II) Small-engine fuel taxes (as
                                    defined in subsection (c)(5)(B)).
                                        ``(III) Nonhighway recreational
                                    fuel taxes (as defined in subsection
                                    (c)(6)(D)).
                        ``(B) Transfers from highway trust fund.--For
                    purposes of determining the amount paid from the
                    Highway Trust Fund under paragraphs (4), (5), and (6)
                    of subsection (c), the Highway Trust Fund financing
                    rates shall be treated as being 2.5 cents less than the
                    otherwise applicable rates.''
        (c) Increase in Deposits in Mass Transit Account.--Paragraph (2) of
    section 9503(e) is amended by striking ``1.5 cents'' and inserting ``2
    cents''.
        (d) Repeal of Expired Provisions.--
                (1) Subparagraph (A) of section 4081(a)(2) (relating to
            rate of tax), as amended by subpart B, is amended--
                        (A) by adding ``and'' at the end of clause (i),
                        (B) by striking ``, and'' at the end of clause (ii)
                    and inserting a period, and
                        (C) by striking clause (iii).
                (2) Subparagraph (B) of section 4081(a)(2), as so amended,
            is amended--
                        (A) by adding ``and'' at the end of clause (i),
                        (B) by striking ``, and'' at the end of clause (ii)
                    and inserting a period, and
                        (C) by striking clause (iii).
                (3) Subsection (d) of section 4081, as so amended, is
            amended by striking paragraph (3).
                (4) Paragraphs (1) and (2) of section 4041(a) (as so
            amended), and paragraph (3) of section 4041(c), are each
            amended by striking ``the sum of the Highway Trust Fund
            financing rate and the diesel fuel deficit reduction rate'' and
            by inserting ``the Highway Trust Fund financing rate''.
                (5) Clause (ii) of section 4041(a)(1)(C), as so amended, is
            amended--
                        (A) by striking ``The Highway Trust Fund financing
                    rate'' and inserting ``So much of the Highway Trust
                    Fund financing rate as exceeds 2.5 cents per gallon'',
                    and
                        (B) by striking ``Highway rate'' in the heading and
                    inserting ``Portion of highway rate''.
                (6) Clause (iii) of section 4041(a)(1)(C), as so amended,
            is amended by striking ``and the deficit reduction rate shall
            not apply''.
        (e) Effective Date.--The amendments made by this section shall take
    effect October 1, 1995, but the amendment made by subsection (c) shall
    apply only to amounts attributable to taxes imposed on or after such
    date.

                         PART V--COMPLIANCE PROVISIONS

    SEC. 14251. REPORTING REQUIRED FOR CERTAIN PAYMENTS TO CORPORATIONS.

        (a) Section 6041.--Section 6041 (relating to information at source)
    is amended by adding at the end thereof the following new subsection:
        ``(f) Special Rules for Payments for Services.--No payment for the
    performance of services shall be exempt from the requirements of this
    section merely because it is a payment to a corporation.''
        (b) Section 6041A(a).--Subsection (a) of section 6041A is amended
    by adding at the end thereof the following new sentence: ``A payment
    shall not be exempt from the requirements of this subsection merely
    because it is a payment to a corporation.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to payments made after December 31, 1993.

    SEC. 14252. MODIFICATIONS TO SUBSTANTIAL UNDERSTATEMENT AND RETURN-
                  PREPARER PENALTIES.

        (a) Reasonable Basis Required.--
                (1) Substantial understatement penalty.--Clause (ii) of
            section 6662(d)(2)(B) (relating to reduction for understatement
            due to position of taxpayer or disclosed item) is amended to
            read as follows:
                                ``(ii) any item if--
                                        ``(I) the relevant facts affecting
                                    the item's tax treatment are adequately
                                    disclosed in the return or in a
                                    statement attached to the return, and
                                        ``(II) there is a reasonable basis
                                    for the tax treatment of such item by
                                    the taxpayer.''
                (2) Return preparer penalty.--Paragraph (3) of section
            6694(a) (relating to understatement of taxpayer's liability by
            income tax return preparer) is amended to read as follows:
                ``(3) the requirements of subclauses (I) and (II) of
            section 6662(d)(2)(B)(ii) are not satisfied with respect to
            such position,''.
        (b) Special Tax Shelter Rule.--Subclause (II) of section
    6662(d)(2)(C)(i) (relating to special rules for tax shelters) is
    amended by inserting before the period at the end thereof the
    following: ``and the reasonably anticipated after-tax benefits from the
    taxpayer's investment in such shelter do not significantly exceed the
    reasonably anticipated pre-tax economic profit or loss from such
    investment''.
        (c) Reasonable Cause Exception.--Paragraph (1) of section 6664(c)
    is revised by striking ``this part'' and inserting ``section 6662''.
        (d) Effective Date.--The amendments made by this section shall
    apply to returns the due dates for which (determined without regard to
    extensions) are after December 31, 1993.

    SEC. 14253. RETURNS RELATING TO THE CANCELLATION OF INDEBTEDNESS BY
                  CERTAIN FINANCIAL ENTITIES.

        (a) In General.--Subpart B of part III of subchapter A of chapter
    61 (relating to information concerning transactions with other persons)
    is amended by adding at the end thereof the following new section:

    ``SEC. 6050P. RETURNS RELATING TO THE CANCELLATION OF INDEBTEDNESS BY
                  CERTAIN FINANCIAL ENTITIES.

        ``(a) In General.--Any applicable financial entity which discharges
    (in whole or in part) the indebtedness of any person during any
    calendar year shall make a return (at such time and in such form as the
    Secretary may by regulations prescribe) setting forth--
                ``(1) the name, address, and TIN of each person whose
            indebtedness was discharged during such calendar year,
                ``(2) the date of the discharge and the amount of the
            indebtedness discharged, and
                ``(3) such other information as the Secretary may
            prescribe.
        ``(b) Exception.--Subsection (a) shall not apply to any discharge
    of less than $600.
        ``(c) Definitions and Special Rules.--For purposes of this
    section--
                ``(1) Applicable financial entity.--The term `applicable
            financial entity' means--
                        ``(A) any financial institution described in
                    section 581 or 591(a) and any credit union,
                        ``(B) the Federal Deposit Insurance Corporation,
                    the Resolution Trust Corporation, and the National
                    Credit Union Administration, and any successor or
                    subunit of any of the foregoing, and
                        ``(C) any other corporation which is a direct or
                    indirect subsidiary of an entity referred to in
                    subparagraph (A) but only if, by virtue of being
                    affiliated with such entity, such other corporation is
                    subject to supervision and examination by a Federal or
                    State agency which regulates entities referred to in
                    subparagraph (A).
                ``(2) Governmental units.--In the case of an entity
            described in paragraph (1)(B), any return under this section
            shall be made by the officer or employee appropriately
            designated for the purpose of making such return.
        ``(d) Statements To Be Furnished to Persons With Respect to Whom
    Information Is Required To Be Furnished.--Every applicable financial
    entity required to make a return under subsection (a) shall furnish to
    each person whose name is required to be set forth in such return a
    written statement showing--
                ``(1) the name and address of the entity required to make
            such return, and
                ``(2) the information required to be shown on the return
            with respect to such person.
    The written statement required under the preceding sentence shall be
    furnished to the person on or before January 31 of the year following
    the calendar year for which the return under subsection (a) was made.''
        (b) Penalties.--
                (1) Returns.--Subparagraph (B) of section 6724(d)(1) is
            amended by redesignating clauses (viii) through (xv) as clauses
            (ix) through (xvi), respectively, and by inserting after clause
            (vii) the following new clause:
                                ``(viii) section 6050P (relating to returns
                            relating to the cancellation of indebtedness by
                            certain financial entities),''.
                (2) Statements.--Paragraph (2) of section 6724(d) is
            amended by redesignating subparagraphs (P) through (S) as
            subparagraphs (Q) through (T), respectively, and by inserting
            after subparagraph (O) the following new subparagraph:
                        ``(P) section 6050P(d) (relating to returns
                    relating to the cancellation of indebtedness by certain
                    financial entities),''.
        (c) Clerical Amendment.--The table of sections for subpart B of
    part III of subchapter A of chapter 61 is amended by adding at the end
    thereof the following new item:

                                  ``Sec. 6050P. Returns relating to the
                                            cancellation of indebtedness by
                                            certain financial entities.''
        (d) Effective Date.--The amendments made by this section shall
    apply to discharges of indebtedness after the date of the enactment of
    this Act.

                       PART VI--TREATMENT OF INTANGIBLES

    SEC. 14261. AMORTIZATION OF GOODWILL AND CERTAIN OTHER INTANGIBLES.

        (a) General Rule.--Part VI of subchapter B of chapter 1 (relating
    to itemized deductions for individuals and corporations) is amended by
    adding at the end thereof the following new section:

    ``SEC. 197. AMORTIZATION OF GOODWILL AND CERTAIN OTHER INTANGIBLES.

        ``(a) General Rule.--A taxpayer shall be entitled to an
    amortization deduction with respect to any amortizable section 197
    intangible. The amount of such deduction shall be determined by
    amortizing the adjusted basis (for purposes of determining gain) of
    such intangible ratably over the 14-year period beginning with the
    month in which such intangible was acquired.
        ``(b) No Other Depreciation or Amortization Deduction Allowable.--
    Except as provided in subsection (a), no depreciation or amortization
    deduction shall be allowable with respect to any amortizable section
    197 intangible.
        ``(c) Amortizable Section 197 Intangible.--For purposes of this
    section--
                ``(1) In general.--Except as otherwise provided in this
            section, the term `amortizable section 197 intangible' means
            any section 197 intangible--
                        ``(A) which is acquired by the taxpayer after the
                    date of the enactment of this section, and
                        ``(B) which is held in connection with the conduct
                    of a trade or business or an activity described in
                    section 212.
                ``(2) Exclusion of self-created intangibles, etc.--The term
            `amortizable section 197 intangible' shall not include any
            section 197 intangible--
                        ``(A) which is not described in subparagraph (D),
                    (E), or (F) of subsection (d)(1), and
                        ``(B) which is created by the taxpayer.
            This paragraph shall not apply if the intangible is created in
            connection with a transaction (or series of related
            transactions) involving the acquisition of assets constituting
            a trade or business or substantial portion thereof.
                ``(3) Anti-churning rules.--

                                    ``For exclusion of intangibles acquired
    in certain transactions, see subsection (f)(9).

        ``(d) Section 197 Intangible.--For purposes of this section--
                ``(1) In general.--Except as otherwise provided in this
            section, the term `section 197 intangible' means--
                        ``(A) goodwill,
                        ``(B) going concern value,
                        ``(C) any of the following intangible items:
                                ``(i) workforce in place including its
                            composition and terms and conditions
                            (contractual or otherwise) of its employment,
                                ``(ii) business books and records,
                            operating systems, or any other information
                            base (including lists or other information with
                            respect to current or prospective customers),
                                ``(iii) any patent, copyright, formula,
                            process, design, pattern, knowhow, format, or
                            other similar item,
                                ``(iv) any customer-based intangible,
                                ``(v) any supplier-based intangible, and
                                ``(vi) any other similar item,
                        ``(D) any license, permit, or other right granted
                    by a governmental unit or an agency or instrumentality
                    thereof,
                        ``(E) any covenant not to compete (or other
                    arrangement to the extent such arrangement has
                    substantially the same effect as a covenant not to
                    compete) entered into in connection with an acquisition
                    (directly or indirectly) of an interest in a trade or
                    business or substantial portion thereof, and
                        ``(F) any franchise, trademark, or trade name.
                ``(2) Customer-based intangible.--
                        ``(A) In general.--The term `customer-based
                    intangible' means--
                                ``(i) composition of market,
                                ``(ii) market share, and
                                ``(iii) any other value resulting from
                            future provision of goods or services pursuant
                            to relationships (contractual or otherwise) in
                            the ordinary course of business with customers.
                        ``(B) Special rule for financial institutions.--In
                    the case of a financial institution, the term
                    `customer-based intangible' includes deposit base and
                    similar items.
                ``(3) Supplier-based intangible.--The term `supplier-based
            intangible' means any value resulting from future acquisitions
            of goods or services pursuant to relationships (contractual or
            otherwise) in the ordinary course of business with suppliers of
            goods or services to be used or sold by the taxpayer.
        ``(e) Exceptions.--For purposes of this section, the term `section
    197 intangible' shall not include any of the following:
                ``(1) Financial interests.--Any interest--
                        ``(A) in a corporation, partnership, trust, or
                    estate, or
                        ``(B) under an existing futures contract, foreign
                    currency contract, notional principal contract, or
                    other similar financial contract.
                ``(2) Land.--Any interest in land.
                ``(3) Computer software.--
                        ``(A) In general.--Any--
                                ``(i) computer software which is readily
                            available for purchase by the general public,
                            is subject to a nonexclusive license, and has
                            not been substantially modified, and
                                ``(ii) other computer software which is not
                            acquired in a transaction (or series of related
                            transactions) involving the acquisition of
                            assets constituting a trade or business or
                            substantial portion thereof.
                        ``(B) Computer software defined.--For purposes of
                    subparagraph (A), the term `computer software' means
                    any program designed to cause a computer to perform a
                    desired function. Such term shall not include any data
                    base or similar item unless the data base or item is in
                    the public domain and is incidental to the operation of
                    otherwise qualifying computer software.
                ``(4) Certain interests or rights acquired separately.--Any
            of the following not acquired in a transaction (or series of
            related transactions) involving the acquisition of assets
            constituting a trade business or substantial portion thereof:
                        ``(A) Any interest in a film, sound recording,
                    video tape, book, or similar property.
                        ``(B) Any right to receive tangible property or
                    services under a contract or granted by a governmental
                    unit or agency or instrumentality thereof.
                        ``(C) Any interest in a patent or copyright.
                        ``(D) To the extent provided in regulations, any
                    right under a contract (or granted by a governmental
                    unit or an agency or instrumentality thereof) if such
                    right--
                                ``(i) has a fixed duration of less than 14
                            years, or
                                ``(ii) is fixed as to amount and, without
                            regard to this section, would be recoverable
                            under a method similar to the unit-of-
                            production method.
                ``(5) Interests under leases and debt instruments.--Any
            interest under--
                        ``(A) an existing lease of tangible property, or
                        ``(B) except as provided in subsection (d)(2)(B),
                    any existing indebtedness.
                ``(6) Treatment of sports franchises.--A franchise to
            engage in professional football, basketball, baseball, or other
            professional sport, and any item acquired in connection with
            such a franchise.
                ``(7) Certain transaction costs.--Any fees for professional
            services, and any transaction costs, incurred by parties to a
            transaction with respect to which any portion of the gain or
            loss is not recognized under part III of subchapter C.
        ``(f) Special Rules.--
                ``(1) Treatment of certain dispositions, etc.--If there is
            a disposition of any amortizable section 197 intangible
            acquired in a transaction or series of related transactions (or
            any such intangible becomes worthless) and one or more other
            amortizable section 197 intangibles acquired in such
            transaction or series of related transactions are retained--
                        ``(A) no loss shall be recognized by reason of such
                    disposition (or such worthlessness), and
                        ``(B) appropriate adjustments to the adjusted bases
                    of such retained intangibles shall be made for any loss
                    not recognized under subparagraph (A).
            All persons treated as a single taxpayer under section 41(f)(1)
            shall be so treated for purposes of the preceding sentence.
                ``(2) Treatment of certain transfers.--
                        ``(A) In general.--In the case of any section 197
                    intangible transferred in a transaction described in
                    subparagraph (B), the transferee shall be treated as
                    the transferor for purposes of applying this section
                    with respect to so much of the adjusted basis in the
                    hands of the transferee as does not exceed the adjusted
                    basis in the hands of the transferor.
                        ``(B) Transactions covered.--The transactions
                    described in this subparagraph are--
                                ``(i) any transaction described in section
                            332, 351, 361, 721, 731, 1031, or 1033, and
                                ``(ii) any transaction between members of
                            the same affiliated group during any taxable
                            year for which a consolidated return is made by
                            such group.
                ``(3) Treatment of amounts paid pursuant to covenants not
            to compete, etc.--Any amount paid or incurred pursuant to a
            covenant or arrangement referred to in subsection (d)(1)(E)
            shall be treated as an amount chargeable to capital account.
                ``(4) Treatment of franchises, etc.--
                        ``(A) Franchise.--The term `franchise' has the
                    meaning given to such term by section 1253(b)(1).
                        ``(B) Treatment of renewals.--Any renewal of a
                    franchise, trademark, or trade name (or of a license, a
                    permit, or other right referred to in subsection
                    (d)(1)(D)) shall be treated as an acquisition. The
                    preceding sentence shall only apply with respect to
                    costs incurred in connection with such renewal.
                        ``(C) Certain amounts not taken into account.--Any
                    amount to which section 1253(d)(1) applies shall not be
                    taken into account under this section.
                ``(5) Treatment of certain reinsurance transactions.--In
            the case of any amortizable section 197 intangible resulting
            from an assumption reinsurance transaction, the amount taken
            into account as the adjusted basis of such intangible under
            this section shall be the excess of--
                        ``(A) the amount paid or incurred by the acquirer
                    under the assumption reinsurance transaction, over
                        ``(B) the amount required to be capitalized under
                    section 848 in connection with such transaction.
            Subsection (b) shall not apply to any amount required to be
            capitalized under section 848.
                ``(6) Treatment of certain subleases.--For purposes of this
            section, a sublease shall be treated in the same manner as a
            lease of the underlying property involved.
                ``(7) Treatment as depreciable.--For purposes of this
            chapter, any amortizable section 197 intangible shall be
            treated as property which is of a character subject to the
            allowance for depreciation provided in section 167.
                ``(8) Treatment of certain increments in value.--This
            section shall not apply to any increment in value if, without
            regard to this section, such increment is properly taken into
            account in determining the cost of property which is not a
            section 197 intangible.
                ``(9) Anti-churning rules.--For purposes of this section--
                        ``(A) In general.--The term `amortizable section
                    197 intangible' shall not include any section 197
                    intangible which is described in subparagraph (A) or
                    (B) of subsection (d)(1) (or for which depreciation or
                    amortization would not have been allowable but for this
                    section) and which is acquired by the taxpayer after
                    the date of the enactment of this section, if--
                                ``(i) the intangible was held or used at
                            any time on or after July 25, 1991, and on or
                            before such date of enactment by the taxpayer
                            or a related person,
                                ``(ii) the intangible was acquired from a
                            person who held such intangible at any time on
                            or after July 25, 1991, and on or before such
                            date of enactment, and, as part of the
                            transaction, the user of such intangible does
                            not change, or
                                ``(iii) the taxpayer grants the right to
                            use such intangible to a person (or a person
                            related to such person) who held or used such
                            intangible at any time on or after July 25,
                            1991, and on or before such date of enactment.
                    For purposes of this subparagraph, the determination of
                    whether the user of property changes as part of a
                    transaction shall be determined in accordance with
                    regulations prescribed by the Secretary. For purposes
                    of this subparagraph, deductions allowable under
                    section 1253(d) shall be treated as deductions
                    allowable for amortization.
                        ``(B) Exception where gain recognized.--If--
                                ``(i) subparagraph (A) would not apply to
                            an intangible acquired by the taxpayer but for
                            the last sentence of subparagraph (C)(i), and
                                ``(ii) the person from whom the taxpayer
                            acquired the intangible elects, notwithstanding
                            any other provision of this title--
                                        ``(I) to recognize gain on the
                                    disposition of the intangible, and
                                        ``(II) to pay a tax on such gain
                                    which, when added to any other income
                                    tax on such gain under this title,
                                    equals such gain multiplied by the
                                    highest rate of income tax applicable
                                    to such person under this title,
                            then subparagraph (A) shall apply to the
                            intangible only to the extent that the
                            taxpayer's adjusted basis in the intangible
                            exceeds the gain recognized under clause
                            (ii)(I).
                        ``(C) Related person defined.--For purposes of this
                    paragraph--
                                ``(i) Related person.--A person
                            (hereinafter in this paragraph referred to as
                            the `related person') is related to any person
                            if--
                                        ``(I) the related person bears a
                                    relationship to such person specified
                                    in section 267(b) or section 707(b)(1),
                                    or
                                        ``(II) the related person and such
                                    person are engaged in trades or
                                    businesses under common control (within
                                    the meaning of subparagraphs (A) and
                                    (B) of section 41(f)(1)).
                            For purposes of subclause (I), in applying
                            section 267(b) or 707(b)(1), `20 percent' shall
                            be substituted for `50 percent'.
                                ``(ii) Time for making determination.--A
                            person shall be treated as related to another
                            person if such relationship exists immediately
                            before or immediately after the acquisition of
                            the intangible involved.
                        ``(D) Acquisitions by reason of death.--
                    Subparagraph (A) shall not apply to the acquisition of
                    any property by the taxpayer if the basis of the
                    property in the hands of the taxpayer is determined
                    under section 1014(a).
                        ``(E) Special rule for partnerships.--With respect
                    to any increase in the basis of partnership property
                    under section 732, 734, or 743, determinations under
                    this paragraph shall be made at the partner level and
                    each partner shall be treated as having owned and used
                    such partner's proportionate share of the partnership
                    assets.
                        ``(F) Anti-abuse rules.--The term `amortizable
                    section 197 intangible' does not include any section
                    197 intangible acquired in a transaction, one of the
                    principal purposes of which is to avoid the requirement
                    of subsection (c)(1) that the intangible be acquired
                    after the date of the enactment of this section or to
                    avoid the provisions of subparagraph (A).
        ``(g) Regulations.--The Secretary shall prescribe such regulations
    as may be appropriate to carry out the purposes of this section,
    including such regulations as may be appropriate to prevent avoidance
    of the purposes of this section through related persons or otherwise.''
        (b) Modifications to Depreciation Rules.--
                (1) Treatment of certain property excluded from section
            197.--Section 167 (relating to depreciation deduction) is
            amended by redesignating subsection (f) as subsection (g) and
            by inserting after subsection (e) the following new subsection:
        ``(f) Treatment of Certain Property Excluded From Section 197.--
                ``(1) Computer software.--
                        ``(A) In general.--If a depreciation deduction is
                    allowable under subsection (a) with respect to any
                    computer software, such deduction shall be computed by
                    using the straight line method and a useful life of 36
                    months.
                        ``(B) Computer software.--For purposes of this
                    section, the term `computer software' has the meaning
                    given to such term by section 197(e)(3)(B); except that
                    such term shall not include any such software which is
                    an amortizable section 197 intangible.
                ``(2) Certain interests or rights acquired separately.--If
            a depreciation deduction is allowable under subsection (a) with
            respect to any property described in subparagraph (B), (C), or
            (D) of section 197(e)(4), such deduction shall be computed in
            accordance with regulations prescribed by the Secretary.''
                (2) Allocation of basis in case of leased property.--
            Subsection (c) of section 167 is amended to read as follows:
        ``(c) Basis for Depreciation.--
                ``(1) In general.--The basis on which exhaustion, wear and
            tear, and obsolescence are to be allowed in respect of any
            property shall be the adjusted basis provided in section 1011,
            for the purpose of determining the gain on the sale or other
            disposition of such property.
                ``(2) Special rule for property subject to lease.--If any
            property is acquired subject to a lease--
                        ``(A) no portion of the adjusted basis shall be
                    allocated to the leasehold interest, and
                        ``(B) the entire adjusted basis shall be taken into
                    account in determining the depreciation deduction (if
                    any) with respect to the property subject to the
                    lease.''
        (c) Amendments to Section 1253.--Subsection (d) of section 1253 is
    amended by striking paragraphs (2), (3), (4), and (5) and inserting the
    following:
                ``(2) Other payments.--Any amount paid or incurred on
            account of a transfer, sale, or other disposition of a
            franchise, trademark, or trade name to which paragraph (1) does
            not apply shall be treated as an amount chargeable to capital
            account.
                ``(3) Renewals, etc.--For purposes of determining the term
            of a transfer agreement under this section, there shall be
            taken into account all renewal options (and any other period
            for which the parties reasonably expect the agreement to be
            renewed).''
        (d) Amendment to Section 848.--Subsection (g) of section 848 is
    amended by striking ``this section'' and inserting ``this section or
    section 197''.
        (e) Amendments to Section 1060.--
                (1) Paragraph (1) of section 1060(b) is amended by striking
            ``goodwill or going concern value'' and inserting ``section 197
            intangibles''.
                (2) Paragraph (1) of section 1060(d) is amended by striking
            ``goodwill or going concern value (or similar items)'' and
            inserting ``section 197 intangibles''.
        (f) Technical and Conforming Amendments.--
                (1) Subsection (g) of section 167 (as redesignated by
            subsection (b)) is amended to read as follows:
        ``(g) Cross References.--

                                    ``(1) For additional rule applicable to
    depreciation of improvements in the case of mines, oil and gas wells,
    other natural deposits, and timber, see section 611.
                                    ``(2) For amortization of goodwill and
    certain other intangibles, see section 197.''

                (2) Subsection (f) of section 642 is amended by striking
            ``section 169'' and inserting ``sections 169 and 197''.
                (3) Subsection (a) of section 1016 is amended by striking
            paragraph (19) and by redesignating the following paragraphs
            accordingly.
                (4) Subparagraph (C) of section 1245(a)(2) is amended by
            striking ``193, or 1253(d) (2) or (3)'' and inserting ``or
            193''.
                (5) Paragraph (3) of section 1245(a) is amended by striking
            ``section 185 or 1253(d) (2) or (3)''.
                (6) The table of sections for part VI of subchapter B of
            chapter 1 is amended by adding at the end thereof the following
            new item:

                                  ``Sec. 197. Amortization of goodwill and
                                            certain other intangibles.''.
        (g) Effective Date.--
                (1) In general.--Except as otherwise provided in this
            subsection, the amendments made by this section shall apply
            with respect to property acquired after the date of the
            enactment of this Act.
                (2) Election to have amendments apply to property acquired
            after july 25, 1991.--
                        (A) In general.--If an election under this
                    paragraph applies to the taxpayer--
                                (i) the amendments made by this section
                            shall apply to property acquired by the
                            taxpayer after July 25, 1991,
                                (ii) subsection (c)(1)(A) of section 197 of
                            the Internal Revenue Code of 1986 (as added by
                            this section) (and so much of subsection
                            (f)(9)(A) of such section 197 as precedes
                            clause (i) thereof) shall be applied with
                            respect to the taxpayer by treating July 25,
                            1991, as the date of the enactment of such
                            section, and
                                (iii) in applying subsection (f)(9) of such
                            section, with respect to any property acquired
                            by the taxpayer on or before the date of the
                            enactment of this Act, only holding or use on
                            July 25, 1991, shall be taken into account.
                        (B) Election.--An election under this paragraph
                    shall be made at such time and in such manner as the
                    Secretary of the Treasury or his delegate may
                    prescribe. Such an election by any taxpayer, once
                    made--
                                (i) may be revoked only with the consent of
                            the Secretary, and
                                (ii) shall apply to the taxpayer making
                            such election and any other taxpayer under
                            common control with the taxpayer (within the
                            meaning of subparagraphs (A) and (B) of section
                            41(f)(1) of such Code) at any time after
                            November 22, 1991, and on or before the date on
                            which such election is made.
                (3) Elective binding contract exception.--
                        (A) In general.--The amendments made by this
                    section shall not apply to any acquisition of property
                    by the taxpayer if--
                                (i) such acquisition is pursuant to a
                            written binding contract in effect on the date
                            of the enactment of this Act and at all times
                            thereafter before such acquisition,
                                (ii) an election under paragraph (2) does
                            not apply to the taxpayer, and
                                (iii) the taxpayer makes an election under
                            this paragraph with respect to such contract.
                        (B) Election.--An election under this paragraph
                    shall be made at such time and in such manner as the
                    Secretary of the Treasury or his delegate shall
                    prescribe. Such an election, once made--
                                (i) may be revoked only with the consent of
                            the Secretary, and
                                (ii) shall apply to all property acquired
                            pursuant to the contract with respect to which
                            such election was made.
        (h) Annual Reports.--The Secretary of the Treasury shall submit
    annual reports to the Committee on Ways and Means of the House of
    Representatives and the Committee on Finance of the Senate on the
    implementation and effects of the amendments made by this section,
    including the effects of such amendments on merger and acquisition
    activities. The first such annual report shall be submitted on or
    before December 31, 1994.
        (i) Annual Reports on Outstanding Cases.--The Secretary of the
    Treasury shall submit annual reports to the Committee on Ways and Means
    of the House of Representatives and the Committee on Finance of the
    Senate regarding the volume of cases still outstanding that involve
    disputes regarding the amortization of intangibles, progress made in
    resolving such cases, efforts made to coordinate settlement
    proceedings, and factors inhibiting the resolution of such cases. The
    report shall also address the impact of the amendments made by this
    section on the volume of disputes regarding the amortization of
    intangibles. The first such annual report shall be submitted on or
    before December 31, 1994.

    SEC. 14262. TREATMENT OF CERTAIN PAYMENTS TO RETIRED OR DECEASED
                  PARTNER.

        (a) Section 736(b) Not To Apply in Certain Cases.--Subsection (b)
    of section 736 (relating to payments for interest in partnership) is
    amended by adding at the end thereof the following new paragraph:
                ``(3) Limitation on application of paragraph (2).--
            Paragraph (2) shall apply only if--
                        ``(A) capital is not a material income-producing
                    factor for the partnership, and
                        ``(B) the retiring or deceased partner was a
                    general partner in the partnership.''
        (b) Limitation on Definition of Unrealized Receivables.--
                (1) In general.--Subsection (c) of section 751 (defining
            unrealized receivables) is amended--
                        (A) by striking ``sections 731, 736, and 741'' each
                    place they appear and inserting ``, sections 731 and
                    741 (but not for purposes of section 736)'', and
                        (B) by striking ``section 731, 736, or 741'' each
                    place it appears and inserting ``section 731 or 741''.
                (2) Technical amendments.--
                        (A) Subsection (e) of section 751 is amended by
                    striking ``sections 731, 736, and 741'' and inserting
                    ``sections 731 and 741''.
                        (B) Section 736 is amended by striking subsection
                    (c).
        (c) Effective Date.--
                (1) In general.--The amendments made by this section shall
            apply in the case of partners retiring or dying on or after
            January 5, 1993.
                (2) Binding contract exception.--The amendments made by
            this section shall not apply to any partner retiring on or
            after January 5, 1993, if a written contract to purchase such
            partner's interest in the partnership was binding on January 4,
            1993, and at all times thereafter before such purchase.

                       PART VII--MISCELLANEOUS PROVISIONS

    SEC. 14271. SUBSTANTIATION REQUIREMENT FOR DEDUCTION OF CERTAIN
                  CHARITABLE CONTRIBUTIONS.

        (a) Substantiation Requirement.--Section 170(f) (providing special
    rules relating to the deduction of charitable contributions and gifts)
    is amended by adding at the end the following new paragraph:
                ``(8) Substantiation requirement for certain
            contributions.--
                        ``(A) General rule.--No deduction shall be allowed
                    under subsection (a) for any contribution of $750 or
                    more unless the taxpayer substantiates the contribution
                    by a contemporaneous written acknowledgment of the
                    contribution by the donee organization that meets the
                    requirements of subparagraph (B).
                        ``(B) Content of acknowledgment.--An acknowledgment
                    meets the requirements of this subparagraph if it
                    provides information sufficient to substantiate the
                    amount of the deductible contribution. If the
                    contribution was made by means of a payment part of
                    which constituted consideration for goods or services
                    provided by the donee organization, the acknowledgment
                    must provide a good faith estimate of the value of such
                    goods or services.
                        ``(C) Contemporaneous.--For purposes of
                    subparagraph (A), an acknowledgment shall be considered
                    to be contemporaneous if the taxpayer obtains the
                    acknowledgment on or before the earlier of--
                                ``(i) the date on which the taxpayer files
                            a return for the taxable year in which the
                            contribution was made, or
                                ``(ii) the due date (including extensions)
                            for filing such return.
                        ``(D) Substantiation not required for contributions
                    reported by the donee organization.--Subparagraph (A)
                    shall not apply to a contribution if the donee
                    organization files a return, on such form and in
                    accordance with such regulations as the Secretary may
                    prescribe, which includes the information described in
                    subparagraph (B) with respect to the contribution.
                        ``(E) Regulations.--The Secretary shall prescribe
                    such regulations as may be necessary or appropriate to
                    carry out the purposes of this paragraph, including
                    regulations that may provide that some or all of the
                    requirements of this paragraph do not apply in
                    appropriate cases.''
        (b) Effective Date.--The provisions of this section shall apply to
    contributions made on or after January 1, 1994.

    SEC. 14272. DISCLOSURE RELATED TO QUID PRO QUO CONTRIBUTIONS.

        (a) Disclosure Requirement.--Subchapter B of chapter 61 (relating
    to information and returns) is amended by redesignating section 6115 as
    section 6116 and by inserting after section 6114 the following new
    section:

    ``SEC. 6115. DISCLOSURE RELATED TO QUID PRO QUO CONTRIBUTIONS.

        ``(a) Disclosure Requirement.--If an organization described in
    section 170(c) (other than paragraph (1) thereof) receives a quid pro
    quo contribution, the organization shall, in connection with the
    solicitation or receipt of the contribution--
                ``(1) inform the donor that the amount of the contribution
            that is deductible for Federal income tax purposes is limited
            to the excess of the amount of any money and the value of any
            property other than money contributed by the donor over the
            value of the goods or services provided by the organization,
            and
                ``(2) provide the donor with a good faith estimate of the
            value of such goods or services.
        ``(b) Quid Pro Quo Contribution.--For purposes of this section, the
    term `quid pro quo contribution' means a payment made partly as a
    contribution and partly in consideration for goods or services provided
    to the payor by the donee organization.''
        (b) Penalty for Failure To Disclose.--Part I of subchapter B of
    chapter 68 (relating to assessable penalties) is amended by inserting
    after section 6713 the following new section:

    ``SEC. 6714. FAILURE TO MEET DISCLOSURE REQUIREMENTS APPLICABLE TO QUID
                  PRO QUO CONTRIBUTIONS.

        ``(a) Imposition of Penalty.--If an organization fails to meet the
    disclosure requirement of section 6115 with respect to a quid pro quo
    contribution, such organization shall pay a penalty of $10 for each
    contribution in respect of which the organization fails to make the
    required disclosure, except that the total penalty imposed by this
    subsection with respect to a particular fundraising event or mailing
    shall not exceed $5,000.
        ``(b) Reasonable Cause Exception.--No penalty shall be imposed
    under this section with respect to any failure if it is shown that such
    failure is due to reasonable cause.''
        (c) Clerical Amendments.--
                (1) The table for subchapter B of chapter 61 is amended by
            striking the item relating to section 6115 and inserting the
            following new item:

                                  ``Sec. 6115. Disclosure related to quid
                                            pro quo contributions.
                                  ``Sec. 6116. Cross reference.''

                (2) The table for part I of subchapter B of chapter 68 is
            amended by inserting after the item for section 6713 the
            following new item:

                                  ``Sec. 6714. Failure to meet disclosure
                                            requirements applicable to quid
                                            pro quo contributions.''

        (d) Effective Date.--The provisions of this section shall apply to
    quid pro quo contributions made on or after January 1, 1994.

    SEC. 14273. DISALLOWANCE OF INTEREST ON CERTAIN OVERPAYMENTS OF TAX.

        (a) General Rule.--Subsection (e) of section 6611 is amended to
    read as follows:
        ``(e) Disallowance of Interest on Certain Overpayments.--
                ``(1) Refunds within 45 days after return is filed.--If any
            overpayment of tax imposed by this title is refunded within 45
            days after the last day prescribed for filing the return of
            such tax (determined without regard to any extension of time
            for filing the return) or, in the case of a return filed after
            such last date, is refunded within 45 days after the date the
            return is filed, no interest shall be allowed under subsection
            (a) on such overpayment.
                ``(2) Refunds after claim for credit or refund.--If--
                        ``(A) the taxpayer files a claim for a credit or
                    refund for any overpayment of tax imposed by this
                    title, and
                        ``(B) such overpayment is refunded within 45 days
                    after such claim is filed,
            no interest shall be allowed on such overpayment from the date
            the claim is filed until the day the refund is made.
                ``(3) IRS initiated adjustments.--If an adjustment
            initiated by the Secretary, results in a refund or credit of an
            overpayment, interest on such overpayment shall be computed by
            subtracting 45 days from the number of days interest would
            otherwise be allowed with respect to such overpayment.''
        (b) Effective Dates.--
                (1) Paragraph (1) of section 6611(e) of the Internal
            Revenue Code of 1986 (as amended by subsection (a)) shall apply
            in the case of returns the due date for which (determined
            without regard to extensions) is on or after January 1, 1994.
                (2) Paragraph (2) of section 6611(e) of such Code (as so
            amended) shall apply in the case of claims for credit or refund
            of any overpayment filed on or after January 1, 1995,
            regardless of the taxable period to which such refund relates.
                (3) Paragraph (3) of section 6611(e) of such Code (as so
            amended) shall apply in the case of any refund paid on or after
            January 1, 1995, regardless of the taxable period to which such
            refund relates.

    SEC. 14274. DENIAL OF DEDUCTION RELATING TO TRAVEL EXPENSES.

        (a) In General.--Section 274(m) (relating to additional limitations
    on travel expenses) is amended by adding at the end thereof the
    following new paragraph:
                ``(3) Travel expenses of spouse, dependent, or others.--No
            deduction shall be allowed under this chapter (other than
            section 217) for travel expenses paid or incurred with respect
            to a spouse, dependent, or other individual accompanying the
            taxpayer (or an officer or employee of the taxpayer) on
            business travel, unless--
                        ``(A) the spouse, dependent, or other individual is
                    an employee of the taxpayer,
                        ``(B) the travel of the spouse, dependent, or other
                    individual is for a bona fide business purpose, and
                        ``(C) such expenses would otherwise be deductible
                    by the spouse, dependent, or other individual.''
        (b) Effective Date.--The amendment made by this section shall apply
    to amounts paid or incurred after December 31, 1993.

    SEC. 14275. INCREASE IN WITHHOLDING FROM SUPPLEMENTAL WAGE PAYMENTS.

        If an employer elects under Treasury Regulation 31.3402 (g)-1 to
    determine the amount to be deducted and withheld from any supplemental
    wage payment by using a flat percentage rate, the rate to be used in
    determining the amount to be so deducted and withheld shall not be less
    than 28 percent. The preceding sentence shall apply to payments made
    after December 31, 1993.

         Subtitle C--Empowerment Zones and Enterprise Communities, Etc.

              PART I--EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES

    SEC. 14301. DESIGNATION AND TREATMENT OF EMPOWERMENT ZONES AND
                  ENTERPRISE COMMUNITIES.

        (a) In General.--Chapter 1 (relating to normal taxes and surtaxes)
    is amended by inserting after subchapter T the following new
    subchapter:

      ``Subchapter U--Designation and Treatment of Empowerment Zones and
                             Enterprise Communities

                                  ``Part I. Designation.
                                  ``Part II. Incentives for empowerment
                                            zones and enterprise
                                            communities.
                                  ``Part III. Additional incentives for
                                            empowerment zones.
                                  ``Part IV. Regulations.

                             ``PART I--DESIGNATION

                                  ``Sec. 1391. Designation procedure.
                                  ``Sec. 1392. Eligibility criteria.
                                  ``Sec. 1393. Definitions and special
                                            rules.

    ``SEC. 1391. DESIGNATION PROCEDURE.

        ``(a) In General.--From among the areas nominated for designation
    under this section, the appropriate Secretaries may, in consultation
    with the Enterprise Board, designate empowerment zones and enterprise
    communities.
        ``(b) Number of Designations.--
                ``(1) Enterprise communities.--The appropriate Secretaries
            may designate in the aggregate 100 nominated areas as
            enterprise communities under this section, subject to the
            availability of eligible nominated areas. Of that number, not
            more than 65 may be designated in urban areas, not more than 30
            may be designated in rural areas, and not more than 5 may be
            designated by the Secretary of the Interior in Indian
            reservations.
                ``(2) Empowerment zones.--The appropriate Secretaries may
            designate in the aggregate 10 nominated areas as empowerment
            zones under this section, subject to the availability of
            eligible nominated areas. Of that number, not more than 6 may
            be designated in urban areas, not more than 3 may be designated
            in rural areas, and not more than 1 may be designated by the
            Secretary of the Interior in an Indian reservation. If 6
            empowerment zones are designated in urban areas, no less than 1
            shall be designated in an urban area the most populous city of
            which has a population of 500,000 or less. The Secretary of
            Housing and Urban Development shall designate empowerment zones
            located in urban areas in such a manner that the aggregate
            population of all such zones does not exceed 750,000.
        ``(c) Period Designations May Be Made.--A designation may be made
    under this section only after 1993 and before 1996.
        ``(d) Period for Which Designation Is In Effect.--
                ``(1) In general.--Any designation under this section shall
            remain in effect during the period beginning on the date of the
            designation and ending on the earliest of--
                        ``(A) the close of the 10th calendar year beginning
                    on or after such date of designation,
                        ``(B) the termination date designated by the State
                    and local governments as provided for in their
                    nomination, or
                        ``(C) the date the appropriate Secretary revokes
                    the designation.
                ``(2) Revocation of designation.--
                        ``(A) In general.--The appropriate Secretary, in
                    consultation with the Enterprise Board, may revoke the
                    designation under this section of an area if such
                    Secretary determines that the local government or the
                    State in which it is located--
                                ``(i) has modified the boundaries of the
                            area, or
                                ``(ii) is not complying substantially with,
                            or fails to make progress in achieving the
                            benchmarks set forth in, the strategic plan
                            under subsection (f)(2).
                        ``(B) Applicable procedures.--A designation may be
                    revoked by the appropriate Secretary under subparagraph
                    (A) only after a hearing on the record involving
                    officials of the State or local government involved.
        ``(e) Limitations on Designations.--An area may be designated under
    subsection (a) only if--
                ``(1) the area is nominated by 1 or more local governments
            and the State or States in which it is located for designation
            under this section,
                ``(2) such State or States and the local governments have
            the authority--
                        ``(A) to nominate the area for designation under
                    this section, and
                        ``(B) to provide the assurances described in
                    paragraph (3),
                ``(3) such State or States and the local governments
            provide written assurances satisfactory to the appropriate
            Secretary that the strategic plan described in the application
            under subsection (f)(2) for such area will be implemented,
                ``(4) the appropriate Secretary determines that any
            information furnished is reasonably accurate, and
                ``(5) such State or States and local governments certify
            that no portion of the area nominated is already included in an
            empowerment zone or in an enterprise community or in an area
            otherwise nominated to be designated under this section.
        ``(f) Application.--An application for designation as an
    empowerment zone or as an enterprise community shall--
                ``(1) demonstrate that the nominated area satisfies the
            eligibility criteria described in section 1392,
                ``(2) include a strategic plan for accomplishing the
            purposes of this subchapter that--
                        ``(A) describes the coordinated economic, human,
                    community, and physical development plan and related
                    activities proposed for the nominated area,
                        ``(B) describes the process by which the affected
                    community is a full partner in the process of
                    developing and implementing the plan and the extent to
                    which local institutions and organizations have
                    contributed to the planning process,
                        ``(C) identifies the amount of State, local, and
                    private resources that will be available in the
                    nominated area and the private/public partnerships to
                    be used, which may include participation by, and
                    cooperation with, universities, medical centers, and
                    other private and public entities,
                        ``(D) identifies the funding requested under any
                    Federal program in support of the proposed economic,
                    human, community, and physical development and related
                    activities,
                        ``(E) identifies baselines, methods, and benchmarks
                    for measuring the success of carrying out the strategic
                    plan, including the extent to which poor persons and
                    families will be empowered to become economically self-
                    sufficient, and
                        ``(F) does not include any action to assist any
                    establishment in relocating from one area outside the
                    nominated area to the nominated area, except that
                    assistance for the expansion of an existing business
                    entity through the establishment of a new branch,
                    affiliate, or subsidiary is permitted if--
                                ``(i) the establishment of the new branch,
                            affiliate, or subsidiary will not result in a
                            decrease in employment in the area of original
                            location or in any other area where the
                            existing business entity conducts business
                            operations, and
                                ``(ii) there is no reason to believe that
                            the new branch, affiliate, or subsidiary is
                            being established with the intention of closing
                            down the operations of the existing business
                            entity in the area of its original location or
                            in any other area where the existing business
                            entity conducts business operation, and
                ``(3) include such other information as may be required by
            the appropriate Secretary or the Enterprise Board.

    ``SEC. 1392. ELIGIBILITY CRITERIA.

        ``(a) In General.--A nominated area shall be eligible for
    designation under section 1391 only if it meets the following criteria:
                ``(1) Population.--The nominated area has a maximum
            population of--
                        ``(A) in the case of an urban area, the lesser of--
                                ``(i) 200,000, or
                                ``(ii) the greater of 50,000 or 10 percent
                            of the population of the most populous city
                            located within the nominated area, and
                        ``(B) in the case of a rural area, 30,000.
                ``(2) Distress.--The nominated area is one of pervasive
            poverty, unemployment, and general distress.
                ``(3) Size.--The nominated area--
                        ``(A) does not exceed 20 square miles if an urban
                    area or 1,000 square miles if a rural area or an Indian
                    reservation,
                        ``(B) has a boundary which is continuous, or,
                    except in the case of a rural area located in more than
                    1 State, consists of not more than 3 noncontiguous
                    parcels,
                        ``(C)(i) in the case of an urban area, is located
                    entirely within no more than 2 contiguous States, and
                        ``(ii) in the case of a rural area, is located
                    entirely within no more than 3 contiguous States, and
                        ``(D) does not include any portion of a central
                    business district (as such term is used for purposes of
                    the most recent Census of Retail Trade) unless the
                    poverty rate for each population census tract in such
                    district is not less than 35 percent (30 percent in the
                    case of an enterprise community).
                ``(4) Poverty rate.--The poverty rate--
                        ``(A) for each population census tract within the
                    nominated area is not less than 20 percent,
                        ``(B) for at least 90 percent of the population
                    census tracts within the nominated area is not less
                    than 25 percent, and
                        ``(C) for at least 50 percent of the population
                    census tracts within the nominated area is not less
                    than 35 percent.
        ``(b) Special Rules Relating to Determination of Poverty Rate.--For
    purposes of subsection (a)(4)--
                ``(1) Treatment of census tracts with small populations.--
                        ``(A) Tracts with no population.--In the case of a
                    population census tract with no population--
                                ``(i) such tract shall be treated as having
                            a poverty rate which meets the requirements of
                            subparagraphs (A) and (B) of subsection (a)(4),
                            but
                                ``(ii) such tract shall be treated as
                            having a zero poverty rate for purposes of
                            applying subparagraph (C) thereof.
                        ``(B) Tracts with populations of less than 2,000.--
                    A population census tract with a population of less
                    than 2,000 shall be treated as having a poverty rate
                    which meets the requirements of subparagraphs (A) and
                    (B) of subsection (a)(4) if more than 75 percent of
                    such tract is zoned for commercial or industrial use.
                ``(2) Discretion to adjust requirements.--Where necessary
            to carry out the purposes of this subchapter, the appropriate
            Secretary may reduce by 5 percentage points one of the
            following thresholds for not more than 10 percent of the
            population census tracts (or, if fewer, 5 population census
            tracts) in the nominated area:
                        ``(A) The 20 percent threshold in subsection
                    (a)(4)(A).
                        ``(B) The 25 percent threshold in subsection
                    (a)(4)(B).
                        ``(C) The 35 percent threshold in subsection
                    (a)(4)(C).
            If the appropriate Secretary elects to reduce the threshold
            under subparagraph (C) for an enterprise community, such
            Secretary may (in lieu of applying the preceding sentence)
            reduce by 10 percentage points the threshold under subparagraph
            (C) for 3 population census tracts.
                ``(3) Each noncontiguous area must satisfy poverty rate
            rule.--A nominated area may not include a noncontiguous parcel
            unless such parcel separately meets (subject to paragraphs (1)
            and (2)) the criteria set forth in subsection (a)(4).
                ``(4) Areas not within census tracts.--In the case of an
            area which is not tracted for population census tracts, the
            equivalent county divisions (as defined by the Bureau of the
            Census for purposes of defining poverty areas) shall be used
            for purposes of determining poverty rates.
        ``(c) Factors To Consider.--From among the nominated areas eligible
    for designation under section 1391 by the appropriate Secretary, such
    appropriate Secretary shall make designations of empowerment zones and
    enterprise communities on the basis of--
                ``(1) the effectiveness of the strategic plan submitted
            pursuant to section 1391(f)(2) and the assurances made pursuant
            to section 1391(e)(3), and
                ``(2) criteria specified by the Enterprise Board.

    ``SEC. 1393. DEFINITIONS AND SPECIAL RULES.

        ``(a) In General.--For purposes of this subchapter--
                ``(1) Appropriate secretary.--The term `appropriate
            Secretary' means--
                        ``(A) the Secretary of Housing and Urban
                    Development in the case of any nominated area which is
                    located in an urban area,
                        ``(B) the Secretary of Agriculture in the case of
                    any nominated area which is located in a rural area,
                    and
                        ``(C) the Secretary of the Interior in the case of
                    any nominated area which is located in an Indian
                    reservation.
                ``(2) Enterprise board.--The term `Enterprise Board' means
            any board hereafter established and designated for purposes of
            this subchapter as the `Enterprise Board'.
                ``(3) Rural area.--The term `rural area' means any area
            which is--
                        ``(A) outside of a metropolitan statistical area
                    (within the meaning of section 143(k)(2)(B)), or
                        ``(B) determined by the Secretary of Agriculture,
                    after consultation with the Secretary of Commerce, to
                    be a rural area.
                ``(4) Urban area.--The term `urban area' means an area
            which is not a rural area.
                ``(5) Indian reservation.--
                        ``(A) In general.--The term `Indian reservation'
                    means a reservation as defined in--
                                ``(i) section 3(d) of the Indian Financing
                            Act of 1974 (25 U.S.C. 1452(d)), or
                                ``(ii) section 4(10) of the Indian Child
                            Welfare Act of 1978 (25 U.S.C. 1903(10)).
                        ``(B) Governments.--In the case of an area in an
                    Indian reservation, the reservation governing body (as
                    determined by the Secretary of the Interior) shall be
                    deemed to be both the State and local governments with
                    respect to such area.
                ``(6) Local government.--The term `local government'
            means--
                        ``(A) any county, city, town, township, parish,
                    village, or other general purpose political subdivision
                    of a State, and
                        ``(B) any combination of political subdivisions
                    described in subparagraph (A) recognized by the
                    appropriate Secretary.
                ``(7) Nominated area.--The term `nominated area' means an
            area which is nominated by 1 or more local governments and the
            State or States in which it is located for designation under
            section 1391.
                ``(8) Governments.--If more than 1 State or local
            government seeks to nominate an area as a tax enterprise zone,
            any reference to, or requirement of, this subchapter shall
            apply to all such governments.
                ``(9) Special rule.--An area shall be treated as nominated
            by a State and a local government if it is nominated by such
            other entity as may be specified by the Enterprise Board.
                ``(10) Use of census data.--Population and poverty rate
            shall be determined by the most recent decennial census data
            available.
        ``(b) Empowerment Zone; Enterprise Community.--For purposes of this
    title, the terms `empowerment zone' and `enterprise community' mean
    areas designated as such under section 1391.

     ``PART II--INCENTIVES FOR EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES

                                  ``Sec. 1394. Incentives.

    ``SEC. 1394. INCENTIVES.

        ``(a) Increase in Low Income Housing Credit.--For purposes of
    section 42(d)(5)(C), a building shall be treated as located in a
    qualified census tract if--
                ``(1) such building is located in a census tract having a
            poverty rate of at least 30 percent (determined in accordance
            with section 1393(a)(10)), and
                ``(2) such building is located in an empowerment zone or an
            enterprise community.
        ``(b) Tax Exempt Enterprise Zone Facility Bonds.--
                ``(1) In general.--For purposes of part IV of subchapter B
            of chapter 1 (relating to tax exemption requirements for State
            and local bonds), the term `exempt facility bond' includes any
            bond issued as part of an issue 95 percent or more of the net
            proceeds (as defined in section 150(a)(3)) of which are to be
            used to provide any enterprise zone facility.
                ``(2) Enterprise zone facility.--For purposes of this
            subsection--
                        ``(A) In general.--The term `enterprise zone
                    facility' means any qualified zone property the
                    principal user of which is an enterprise zone business
                    (as defined in section 1397D), and any land which is
                    functionally related and subordinate to such property.
                        ``(B) Qualified zone property.--The term `qualified
                    zone property' has the meaning given such term by
                    section 1397B(c); except that--
                                ``(i) section 1397B(c)(3) shall not apply,
                            and
                                ``(ii) the references to empowerment zones
                            shall be treated as including references to
                            enterprise communities.
                ``(3) Limitation on amount of bonds.--
                        ``(A) In general.--Paragraph (1) shall not apply to
                    any issue if the aggregate amount of outstanding
                    enterprise zone facility bonds allocable to any
                    enterprise zone business (taking into account such
                    issue) exceeds--
                                ``(i) $3,000,000 with respect to any 1
                            empowerment zone or enterprise community, or
                                ``(ii) $20,000,000 with respect to all
                            empowerment zones and enterprise communities.
                        ``(B) Aggregate enterprise zone facility bond
                    benefit.--For purposes of subparagraph (A), the
                    aggregate amount of outstanding enterprise zone
                    facility bonds allocable to any business shall be
                    determined under rules similar to the rules of section
                    144(a)(10), taking into account only bonds to which
                    paragraph (1) applies.
                ``(4) Acquisition of land and existing property
            permitted.--The requirements of sections 147(c)(1)(A) and
            147(d) shall not apply to any bond described in paragraph (1).
                ``(5) Partial exemption from volume cap.--Only for purposes
            of section 146, the term `private activity bond' shall not
            include 50 percent of any bond issued as part of an issue
            described in paragraph (1).
                ``(6) Penalty for ceasing to meet requirements.--
                        ``(A) Failures corrected.--An issue which fails to
                    meet 1 or more of the requirements of paragraphs (1)
                    and (2) shall be treated as meeting such requirements
                    if--
                                ``(i) the issuer and any principal user in
                            good faith attempted to meet such requirements,
                            and
                                ``(ii) any failure to meet such
                            requirements is corrected within a reasonable
                            period after such failure is first discovered.
                        ``(B) Loss of deductions where facility ceases to
                    be qualified.--No deduction shall be allowed under this
                    chapter for interest on any financing provided from any
                    bond to which paragraph (1) applies with respect to any
                    facility to the extent such interest accrues during the
                    period beginning on the first day of the calendar year
                    which includes the date on which--
                                ``(i) substantially all of the facility
                            with respect to which the financing was
                            provided ceases to be used in an empowerment
                            zone or enterprise community, or
                                ``(ii) the principal user of such facility
                            ceases to be an enterprise zone business (as
                            defined in section 1397D, but treating
                            references to empowerment zones as including
                            references to enterprise communities).
                        ``(C) Exception if zone ceases.--Subparagraphs (A)
                    and (B) shall not apply solely by reason of the
                    termination or revocation of a designation as an
                    empowerment zone or an enterprise community.
                        ``(D) Exception for bankruptcy.--Subparagraphs (A)
                    and (B) shall not apply to any cessation resulting from
                    bankruptcy.
        ``(c) Enterprise Zone Facility Bonds Not Subject to Interest
    Deduction Limitations on Financial Institutions.--Any tax-exempt bond
    described in subsection (b)(1)--
                ``(1) shall be treated as acquired before August 8, 1986,
            for purposes of sections 265(b) and 291(e)(1)(B), and
                ``(2) shall not be taken into account in determining
            whether any issuer is a qualified small issuer for purposes of
            section 265(b).
        ``(d) Additional Low-Income Housing Credit Amount.--
                ``(1) In general.--Each State which includes any
            empowerment zone or enterprise community shall receive an
            additional State housing credit ceiling amount for purposes of
            section 42 of $818,000 for each such zone or community.
                ``(2) Additional amount must be allocated to buildings in
            designated areas.--
                        ``(A) In general.--The portion of the additional
                    amount received under paragraph (1) by reason of any
                    empowerment zone or enterprise community which may be
                    applied to increase the State housing credit ceiling
                    for any calendar year shall not exceed the lesser of--
                                ``(i) the unused portion of such additional
                            amount with respect to such zone or community,
                            or
                                ``(ii) the aggregate housing credit dollar
                            amount allocated from such ceiling for such
                            year to buildings located in such zone or
                            community.
                        ``(B) Unused portion.--For purposes of subparagraph
                    (A), the unused portion for any calendar year of the
                    additional amount received under paragraph (1) is the
                    amount equal to the excess of--
                                ``(i) the additional amount received under
                            paragraph (1) by the State by reason of the
                            zone or community, over
                                ``(ii) the aggregate of the increases in
                            the State housing credit ceiling by reason of
                            such amount for all prior calendar years.
                ``(3) Availability of additional amount.--None of the
            additional amount received under paragraph (1) may be applied
            after 1996.
                ``(4) Areas located in more than 1 state.--In the case of
            an empowerment zone or enterprise community which is located in
            more than 1 State, the $818,000 amount shall be allocated among
            such States in proportion to the population of such zone or
            community which is within each such State.
                ``(5) Zones located in constitutional home rule cities.--If
            any empowerment zone or enterprise community is located in a
            constitutional home rule city (as defined in section
            42(h)(4)(E)), the additional amount received under paragraph
            (1) shall be allocated to such city and shall not be taken into
            account in determining such city's share of the State housing
            credit ceiling under section 42(h)(4)(E).

            ``PART III--ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES

                                  ``Subpart A. Empowerment zone employment
                                            credit.
                                  ``Subpart B. Zone resident empowerment
                                            savings credit.
                                  ``Subpart C. Depreciation and other
                                            incentives.

                ``Subpart A--Empowerment Zone Employment Credit

                                  ``Sec. 1396. Empowerment zone employment
                                            credit.
                                  ``Sec. 1397. Other definitions and
                                            special rules.

    ``SEC. 1396. EMPOWERMENT ZONE EMPLOYMENT CREDIT.

        ``(a) Amount of Credit.--For purposes of section 38, the amount of
    the empowerment zone employment credit determined under this section
    with respect to any employer for any taxable year is the applicable
    percentage of the qualified zone wages paid or incurred during the
    calendar year which ends with or within such taxable year.
        ``(b) Applicable Percentage.--For purposes of this section, the
    term `applicable percentage' means the percentage determined in
    accordance with the following table:

                      ``In the case of wages paid or
                                                             The applicable
                        incurred during calendar year:
                                                             percentage is:
                              1994 through 2000..........          25
                              2001.......................          20
                              2002.......................          15
                              2003.......................          10
                              2004.......................           5
        ``(c) Qualified Zone Wages.--
                ``(1) In general.--For purposes of this section, the term
            `qualified zone wages' means any wages paid or incurred by an
            employer for services performed by an employee while such
            employee is a qualified zone employee.
                ``(2) Only first $20,000 of wages per year taken into
            account.--With respect to each qualified zone employee, the
            amount of qualified zone wages which may be taken into account
            for a calendar year shall not exceed $20,000.
                ``(3) Coordination with targeted jobs credit.--
                        ``(A) In general.--The term `qualified zone wages'
                    shall not include wages taken into account in
                    determining the credit under section 51.
                        ``(B) Coordination with paragraph (2).--The $20,000
                    amount in paragraph (2) shall be reduced for any
                    calendar year by the amount of wages paid or incurred
                    during such year which are taken into account in
                    determining the credit under section 51.
        ``(d) Qualified Zone Employee.--For purposes of this section--
                ``(1) In general.--Except as otherwise provided in this
            subsection, the term `qualified zone employee' means, with
            respect to any period, any employee of an employer if--
                        ``(A) substantially all of the services performed
                    during such period by such employee for such employer
                    are performed within an empowerment zone in a trade or
                    business of the employer, and
                        ``(B) the principal place of abode of such employee
                    while performing such services is within such
                    empowerment zone.
                ``(2) Certain individuals not eligible.--The term
            `qualified zone employee' shall not include--
                        ``(A) any individual described in subparagraph (A),
                    (B), or (C) of section 51(i)(1),
                        ``(B) any 5-percent owner (as defined in section
                    416(i)(1)(B)),
                        ``(C) any individual employed by the employer for
                    less than 90 days,
                        ``(D) any individual employed by the employer at
                    any facility described in section 144(c)(6)(B), and
                        ``(E) any individual employed by the employer in a
                    trade or business the principal activity of which is
                    farming (within the meaning of subparagraphs (A) or (B)
                    of section 2032A(e)(5)), but only if, as of the close
                    of the taxable year, the sum of--
                                ``(i) the aggregate unadjusted bases (or,
                            if greater, the fair market value) of the
                            assets owned by the employer which are used in
                            such a trade or business, and
                                ``(ii) the aggregate value of assets leased
                            by the employer which are used in such a trade
                            or business (as determined under regulations
                            prescribed by the Secretary),
                    exceeds $500,000.
                ``(3) Special rules related to termination of employment.--
                        ``(A) In general.--Paragraph (2)(C) shall not apply
                    to--
                                ``(i) a termination of employment of an
                            individual who before the close of the period
                            referred to in paragraph (2)(C) becomes
                            disabled to perform the services of such
                            employment unless such disability is removed
                            before the close of such period and the
                            taxpayer fails to offer reemployment to such
                            individual, or
                                ``(ii) a termination of employment of an
                            individual if it is determined under the
                            applicable State unemployment compensation law
                            that the termination was due to the misconduct
                            of such individual.
                        ``(B) Changes in form of business.--For purposes of
                    paragraph (2)(C), the employment relationship between
                    the taxpayer and an employee shall not be treated as
                    terminated--
                                ``(i) by a transaction to which section
                            381(a) applies if the employee continues to be
                            employed by the acquiring corporation, or
                                ``(ii) by reason of a mere change in the
                            form of conducting the trade or business of the
                            taxpayer if the employee continues to be
                            employed in such trade or business and the
                            taxpayer retains a substantial interest in such
                            trade or business.

    ``SEC. 1397. OTHER DEFINITIONS AND SPECIAL RULES.

        ``(a) Wages.--For purposes of this subpart--
                ``(1) In general.--The term `wages' has the same meaning as
            when used in section 51.
                ``(2) Certain training and educational benefits.--
                        ``(A) In general.--The following amounts shall be
                    treated as wages paid to an employee:
                                ``(i) Any amount paid or incurred by an
                            employer which is excludable from the gross
                            income of an employee under section 127, but
                            only to the extent paid or incurred to a person
                            not related to the employer.
                                ``(ii) In the case of an employee who has
                            not attained the age of 19, any amount paid or
                            incurred by an employer for any youth training
                            program operated by such employer in
                            conjunction with local education officials.
                        ``(B) Related person.--A person is related to any
                    other person if the person bears a relationship to such
                    other person specified in section 267(b) or 707(b)(1),
                    or such person and such other person are engaged in
                    trades or businesses under common control (within the
                    meaning of subsections (a) and (b) of section 52). For
                    purposes of the preceding sentence, in applying section
                    267(b) or 707(b)(1), `10 percent' shall be substituted
                    for `50 percent'.
        ``(b) Controlled Groups.--For purposes of this subpart--
                ``(1) all employers treated as a single employer under
            subsection (a) or (b) of section 52 shall be treated as a
            single employer for purposes of this subpart, and
                ``(2) the credit (if any) determined under section 1396
            with respect to each such employer shall be its proportionate
            share of the wages giving rise to such credit.
        ``(c) Certain Other Rules Made Applicable.--For purposes of this
    subpart, rules similar to the rules of section 51(k) and subsections
    (c), (d), and (e) of section 52 shall apply.
        ``(d) Notice of Availability of Advance Payment of Earned Income
    Credit.--Each employer shall take reasonable steps to notify all
    qualified zone employees of the availability to eligible individuals of
    receiving advanced payments of the credit under section 32 (relating to
    the earned income credit).

             ``Subpart B--Zone Resident Empowerment Savings Credit

                                  ``Sec. 1397A. Zone resident empowerment
                                            savings credit.

    ``SEC. 1397A. ZONE RESIDENT EMPOWERMENT SAVINGS CREDIT.

        ``(a) General Rule.--For purposes of section 38, the amount of the
    zone resident empowerment savings credit determined under this section
    with respect to any employer for any taxable year is 50 percent of the
    qualified savings contributions for the taxable year.
        ``(b) Qualified Savings Contributions.--For purposes of this
    section--
                ``(1) In general.--The term `qualified savings
            contribution' means any contribution by an employer to a
            defined contribution plan--
                        ``(A) which is made on behalf of an employee in
                    connection with services performed by such employee
                    while such employee is a qualified zone employee, and
                        ``(B) with respect to which the employee has a
                    nonforfeitable right.
                ``(2) Limitation based on compensation.--
                        ``(A) In general.--The qualified savings
                    contributions taken into account with respect to any
                    qualified zone employee for any taxable year shall not
                    exceed an amount equal to 2 percent of so much of the
                    employee's compensation (as defined in section 414(s))
                    as does not exceed $35,000.
                        ``(B) Zone designation in effect for partial
                    year.--If a designation of an area as an empowerment
                    zone is in effect for less than the entire taxable
                    year, the $35,000 amount under subparagraph (A) shall
                    be ratably reduced to reflect the portion of the year
                    such designation is not in effect.
                ``(3) Certain contributions excluded.--The term `qualified
            savings contribution' shall not include any contribution--
                        ``(A) to a plan subject to the funding requirements
                    of section 412,
                        ``(B) to a tax credit employee stock ownership plan
                    (as defined in section 409(a)) or to an employee stock
                    ownership plan (as defined in section 4975(e)(7)),
                        ``(C) to a stock bonus plan, or
                        ``(D) which is an elective deferral (within the
                    meaning of section 402(g)(3)).
                ``(4) Simplified employee pension.--A contribution to an
            individual savings plan pursuant to a simplified employee
            pension (as defined in section 408(k)) shall be treated as a
            contribution to a defined contribution plan.
        ``(c) Employer Requirements.--This section shall apply to an
    employer for any taxable year only if--
                ``(1) the employer elects the application of this section,
            and
                ``(2) the plan pursuant to which any qualified savings
            contribution is made provides that any contribution to such
            plan (whether or not a qualified savings contribution) may be
            withdrawn by a qualified zone employee as described in section
            72(t)(2) (B) or (D).
        ``(d) Definitions.--For purposes of this section--
                ``(1) Qualified zone employee.--The term `qualified zone
            employee' has the meaning given such term by section 1396(d).
                ``(2) Defined contribution plan.--The term `defined
            contribution plan' means a defined contribution plan (as
            defined in section 414(i)) which is described in section 401(a)
            and includes a trust exempt from tax under section 501(a).
        ``(e) Treatment of Plans.--A plan shall not be treated as failing
    to meet any requirement of part I of subchapter D of chapter 1 by
    reason of permitting withdrawals required to be permitted under
    subsection (c)(2).

                 ``Subpart C--Depreciation and Other Incentives

                                  ``Sec. 1397B. Depreciation benefits.
                                  ``Sec. 1397C. Additional exclusion from
                                            volume cap for certain
                                            enterprise zone facility bonds.
                                  ``Sec. 1397D. Enterprise zone business.

    ``SEC. 1397B. DEPRECIATION BENEFITS.

        ``(a) Increase in Expensing Under Section 179.--
                ``(1) In general.--In the case of an enterprise zone
            business, for purposes of section 179--
                        ``(A) qualified zone property shall be treated as
                    section 179 property,
                        ``(B) the limitation under section 179(b)(1) shall
                    be increased by the lesser of--
                                ``(i) $50,000, or
                                ``(ii) the cost of qualified zone property
                            placed in service during the taxable year, and
                        ``(C) section 179(b)(2) shall be applied by
                    substituting `by one-half of the amount by which the
                    cost of qualified zone property (other than real
                    property) and other section 179 property' for `by the
                    amount by which the cost of section 179 property'.
        ``(b) Accelerated Depreciation.--
                ``(1) In general.--For purposes of section 168(a), with
            respect to qualified zone property of an enterprise zone
            business, the applicable recovery period shall be determined in
            accordance with the table contained in paragraph (2) in lieu of
            the table contained in section 168(c).
                ``(2) Applicable recovery period for qualified zone
            property.--For purposes of paragraph (1)--

                                                             The applicable
    ``In the case of:                                   recovery period is:
        3-year property...............................              2 years
        5-year property...............................              3 years
        7-year property...............................              4 years
        10-year property..............................              6 years
        15-year property..............................              9 years
        20-year property..............................             12 years
        Nonresidential real property..................            22 years.
                ``(3) Deduction allowed in computing minimum tax.--
            Paragraph (1) shall apply for purposes of determining
            alternative minimum taxable income under section 55.
        ``(c) Qualified Zone Property.--For purposes of this section--
                ``(1) In general.--The term `qualified zone property' means
            any property to which section 168 applies (or would apply but
            for section 179) if--
                        ``(A) such property was acquired by the taxpayer by
                    purchase (as defined in section 179(d)(2)) after the
                    date on which the designation of the empowerment zone
                    took effect,
                        ``(B) the original use of which in an empowerment
                    zone commences with the taxpayer, and
                        ``(C) substantially all of the use of which is in
                    an empowerment zone and is in the active conduct of a
                    trade or business by the taxpayer in such zone.
                ``(2) Special rule for substantial renovations.--In the
            case of any property which is substantially renovated by the
            taxpayer, the requirements of subparagraphs (A) and (B) of
            paragraph (1) shall be treated as satisfied. For purposes of
            the preceding sentence, property shall be treated as
            substantially renovated by the taxpayer if, during any 24-month
            period beginning after the date on which the designation of the
            empowerment zone took effect, additions to basis with respect
            to such property in the hands of the taxpayer exceed the
            greater of (i) an amount equal to the adjusted basis at the
            beginning of such 24-month period in the hands of the taxpayer,
            or (ii) $5,000.
                ``(3) Exception for alternative depreciation property.--The
            term `qualified zone property' does not include any property to
            which the alternative depreciation system under section 168(g)
            applies, determined--
                        ``(A) without regard to section 168(g)(7) (relating
                    to election to use alternative depreciation system),
                    and
                        ``(B) after the application of section 280F(b)
                    (relating to listed property with limited business
                    use).
        ``(d) Special Rules for Sale-Leasebacks.--For purposes of
    subsection (c)(1)(B), if property is sold and leased back by the
    taxpayer within 3 months after the date such property was originally
    placed in service, such property shall be treated as originally placed
    in service not earlier than the date on which such property is used
    under the leaseback.
        ``(e) Recapture.--Rules similar to the rules under section
    179(d)(10) shall apply with respect to any qualified zone property of
    any business which ceases to be an enterprise zone business.

    ``SEC. 1397C. ADDITIONAL EXCLUSION FROM VOLUME CAP FOR CERTAIN
                  ENTERPRISE ZONE FACILITY BONDS.

        ``(a) In General.--Section 1394(b)(5) shall be applied by
    substituting `75 percent' for `50 percent' in the case of any bond
    described in section 1394(b)(1) issued as part of an issue 95 percent
    or more of the net proceeds (as defined in section 150(a)(3)) of which
    are used to provide qualified zone property the principal user of which
    is any enterprise zone business if the ownership requirements of
    subsection (b) are met with respect to such business.
        ``(b) Ownership Requirements.--The ownership requirements of this
    subsection are met with respect to an enterprise zone business if--
                ``(1) in the case of a sole proprietorship, the principal
            place of abode of the proprietor is in an empowerment zone,
                ``(2) in the case of a corporation, more than 50 percent of
            the stock (by vote and value) in the corporation is owned
            (directly or indirectly) by individuals whose principal place
            of abode is in an empowerment zone, and
                ``(3) in the case of a partnership, more than 50 percent of
            the capital and profits interests in the partnership is owned
            (directly or indirectly) by individuals whose principal place
            of abode is in an empowerment zone.

    ``SEC. 1397D. ENTERPRISE ZONE BUSINESS DEFINED.

        ``(a) In General.--For purposes of this subpart, the term
    `enterprise zone business' means--
                ``(1) any qualified business entity, and
                ``(2) any qualified proprietorship.
        ``(b) Qualified Business Entity.--For purposes of this section, the
    term `qualified business entity' means, with respect to any taxable
    year, any corporation or partnership if for such year--
                ``(1) every trade or business of such entity is the active
            conduct of a qualified business within an empowerment zone,
                ``(2) at least 80 percent of the total gross income of such
            entity is derived from the active conduct of such business,
                ``(3) substantially all of the use of the tangible property
            of such entity (whether owned or leased) is within an
            empowerment zone,
                ``(4) substantially all of the intangible property of such
            entity is used in, and exclusively related to, the active
            conduct of any such business,
                ``(5) substantially all of the services performed for such
            entity by its employees are performed in an empowerment zone,
                ``(6) at least 35 percent of its employees are residents of
            an empowerment zone,
                ``(7) less than 5 percent of the average of the aggregate
            unadjusted bases of the property of such entity is attributable
            to collectibles (as defined in section 408(m)(2)) other than
            collectibles that are held primarily for sale to customers in
            the ordinary course of such business, and
                ``(8) less than 5 percent of the average of the aggregate
            unadjusted bases of the property of such entity is attributable
            to nonqualified financial property.
        ``(c) Qualified Proprietorship.--For purposes of this section, the
    term `qualified proprietorship' means, with respect to any taxable
    year, any qualified business carried on by an individual as a
    proprietorship if for such year--
                ``(1) at least 80 percent of the total gross income of such
            individual from such business is derived from the active
            conduct of such business in an empowerment zone,
                ``(2) substantially all of the use of the tangible property
            of such individual in such business (whether owned or leased)
            is within an empowerment zone,
                ``(3) substantially all of the intangible property of such
            business is used in, and exclusively related to, the active
            conduct of such business,
                ``(4) substantially all of the services performed for such
            individual in such business by employees of such business are
            performed in an empowerment zone,
                ``(5) at least 35 percent of such employees are residents
            of an empowerment zone,
                ``(6) less than 5 percent of the average of the aggregate
            unadjusted bases of the property of such individual which is
            used in such business is attributable to collectibles (as
            defined in section 408(m)(2)) other than collectibles that are
            held primarily for sale to customers in the ordinary course of
            such business, and
                ``(7) less than 5 percent of the average of the aggregate
            unadjusted bases of the property of such individual which is
            used in such business is attributable to nonqualified financial
            property.
    For purposes of this subsection, the term `employee' includes the
    proprietor.
        ``(d) Qualified Business.--For purposes of this section--
                ``(1) In general.--Except as otherwise provided in this
            subsection, the term `qualified business' means any trade or
            business.
                ``(2) Rental of real property.--The rental to others of
            real property located in an empowerment zone shall be treated
            as a qualified business if and only if--
                        ``(A) the property is not residential rental
                    property (as defined in section 168(e)(2)), and
                        ``(B) at least 50 percent of the gross rental
                    income from the real property is from enterprise zone
                    businesses.
                ``(3) Rental of tangible personal property.--The rental to
            others of tangible personal property shall be treated as a
            qualified business if and only if substantially all of the
            rental of such property is by enterprise zone businesses or by
            residents of an empowerment zone.
                ``(4) Treatment of business holding intangibles.--The term
            `qualified business' shall not include any trade or business
            consisting predominantly of the development or holding of
            intangibles for sale or license.
                ``(5) Certain businesses excluded.--The term `qualified
            business' shall not include--
                        ``(A) any trade or business consisting of the
                    operation of any facility described in section
                    144(c)(6)(B), and
                        ``(B) any trade or business the principal activity
                    of which is farming (within the meaning of
                    subparagraphs (A) or (B) of section 2032A(e)(5)), but
                    only if, as of the close of the preceding taxable year,
                    the sum of--
                                ``(i) the aggregate unadjusted bases (or,
                            if greater, the fair market value) of the
                            assets owned by the taxpayer which are used in
                            such a trade or business, and
                                ``(ii) the aggregate value of assets leased
                            by the taxpayer which are used in such a trade
                            or business,
                    exceeds $500,000.
            For purposes of subparagraph (B), rules similar to the rules of
            section 1397(b) shall apply.
        ``(e) Nonqualified Financial Property.--For purposes of this
    section, the term `nonqualified financial property' means debt, stock,
    partnership interests, options, futures contracts, forward contracts,
    warrants, notional principal contracts, annuities, and other similar
    property specified in regulations; except that such term shall not
    include--
                ``(1) reasonable amounts of working capital held in cash,
            cash equivalents, or debt instruments with a term of 18 months
            or less, or
                ``(2) debt instruments described in section 1221(4).

                             ``PART IV--REGULATIONS

                                  ``Sec. 1397E. Regulations.

    ``SEC. 1397E. REGULATIONS.

        ``The Secretary shall prescribe such regulations as may be
    necessary or appropriate to carry out the purposes of parts II and III,
    including--
                ``(1) regulations limiting the benefit of parts II and III
            in circumstances where such benefits, in combination with
            benefits provided under other Federal programs, would result in
            an activity being 100 percent or more subsidized by the Federal
            Government,
                ``(2) regulations preventing abuse of the provisions of
            parts II and III, and
                ``(3) regulations dealing with inadvertent failures of
            entities to be enterprise zone businesses.''
        (b) Clerical Amendment.--The table of subchapters for chapter 1 is
    amended by inserting after the item relating to subchapter T the
    following new item:

                                  ``Subchapter U. Designation and treatment
                                            of empowerment zones and
                                            enterprise communities.''

    SEC. 14302. EXPANSION OF TARGETED JOBS CREDIT.

        (a) Allowance of Credit for Hiring Empowerment Zone Resident.--
    Paragraph (1) of section 51(d) (defining members of targeted groups) is
    amended by striking ``or'' at the end of subparagraph (I), by striking
    the period at the end of subparagraph (J) and inserting ``, or'', and
    by adding at the end the following new subparagraph:
                ``(K) an economically disadvantaged empowerment zone
            resident.''
        (b) Economically Disadvantaged Empower- ment Zone Resident.--
    Section 51(d) is amended by redesignating paragraphs (13) through (16)
    as paragraphs (14) through (17), respectively, and by inserting after
    paragraph (12) the following new paragraph:
                ``(13) Economically disadvantaged empowerment zone
            resident.--The term `economically disadvantaged empowerment
            zone resident' means an individual--
                        ``(A) whose principal place of abode while
                    performing services for the employer is within an
                    empowerment zone, and
                        ``(B) who is certified by the designated local
                    agency as being a member of an economically
                    disadvantaged family (as determined under paragraph
                    (11)).
            Such term shall not include a qualified zone employee (as
            defined in section 1396(d) without regard to paragraph (2)
            thereof).''
        (c) Conforming Amendment.--Subparagraph (C) of section 51(d)(12) is
    amended by striking ``paragraph (14)'' and inserting ``paragraph
    (15)''.

    SEC. 14303. TECHNICAL AND CONFORMING AMENDMENTS.

        (a) Certain Credits Part of General Business Credit.--
                (1) Subsection (b) of section 38 (relating to current year
            business credit) is amended by striking ``plus'' at the end of
            paragraph (7), by striking the period at the end of paragraph
            (8) and inserting a comma, and by adding at the end the
            following new paragraphs:
                ``(9) the empowerment zone employment credit determined
            under section 1396(a), plus
                ``(10) the zone resident empowerment savings credit
            determined under section 1397A.''
                (2) Subsection (d) of section 39 is amended by adding at
            the end the following new paragraph:
                ``(4) Enterprise zone credits.--No portion of the unused
            business credit which is attributable to the credit determined
            under section 1396 (relating to empowerment zone employment
            credit) or section 1397A (relating to zone resident empowerment
            savings credit) may be carried to any taxable year ending
            before January 1, 1994.''
        (b) Denial of Deduction for Portion of Wages Equal to Empowerment
    Zone Employment Credit.--
                (1) Subsection (a) of section 280C (relating to rule for
            targeted jobs credit) is amended--
                        (A) by striking ``the amount of the credit
                    determined for the taxable year under section 51(a)''
                    and inserting ``the sum of the credits determined for
                    the taxable year under sections 51(a) and 1396(a)'',
                    and
                        (B) by striking ``Targeted Jobs Credit'' in the
                    subsection heading and inserting ``Employment
                    Credits''.
                (2) Subsection (c) of section 196 (relating to deduction
            for certain unused business credits) is amended by striking
            ``and'' at the end of paragraph (4), by striking the period at
            the end of paragraph (5) and inserting ``, and'', and by adding
            at the end the following new paragraph:
                ``(6) the empowerment zone employment credit determined
            under section 1396(a).''
        (c) Employment and Savings Credits May Offset 25 Percent of Minimum
    Tax.--
                (1) In general.--Section 38(c) (relating to limitation
            based on amount of tax) is amended by redesignating paragraph
            (2) as paragraph (3) and by inserting after paragraph (1) the
            following new paragraph:
                ``(2) Empowerment zone credits may offset 25 percent of
            minimum tax.--
                        ``(A) In general.--In the case of the empowerment
                    zone credits--
                                ``(i) this section and section 39 shall be
                            applied separately with respect to such
                            credits, and
                                ``(ii) for purposes of applying paragraph
                            (1) to such credits--
                                        ``(I) 75 percent of the tentative
                                    minimum tax shall be substituted for
                                    the tentative minimum tax under
                                    subparagraph (A) thereof, and
                                        ``(II) the limitation under
                                    paragraph (1) (as modified by subclause
                                    (I)) shall be reduced by the credit
                                    allowed under subsection (a) for the
                                    taxable year (other than the
                                    empowerment zone credits).
                        ``(B) Empowerment zone credits.--For purposes of
                    this paragraph, the term `empowerment zone credits'
                    means the portion of the credit under subsection (a)
                    which is attributable to the credits determined under
                    section 1396 (relating to empowerment zone employment
                    credit) and section 1397A (relating to zone resident
                    empowerment savings credit).''
        (d) Changes Relating to Empowerment Zone Resident Empowerment
    Savings Credit.--
                (1) Disallowance of deduction.--Section 404 (relating to
            deduction for certain employer contributions) is amended by
            adding at the end the following new subsection:
        ``(m) Coordination With Empowerment Zone Credit.--No deduction
    shall be allowed under this section for any qualified employer
    contribution taken into account in computing the credit determined
    under section 1397A.''
                (2) Penalty-free distributions.--
                        (A) In general.--Paragraph (2) of section 72(t)
                    (relating to exceptions to 10-percent additional tax on
                    early distributions from qualified retirement plans) is
                    amended by adding at the end thereof the following new
                    subparagraph:
                        ``(D) Distributions from certain plans for first
                    home purchases or educational expenses.--
                                ``(i) In general.--Distributions to an
                            individual from a qualified retirement plan--
                                        ``(I) which are qualified first-
                                    time homebuyer distributions (as
                                    defined in paragraph (6)),
                                        ``(II) to the extent such
                                    distributions do not exceed the
                                    qualified higher education expenses (as
                                    defined in paragraph (7)) of the
                                    taxpayer for the taxable year, or
                                        ``(III) to the extent such
                                    distributions do not exceed an amount
                                    equal to the aggregate investment made
                                    by the taxpayer during the taxable year
                                    in any enterprise zone business (as
                                    defined in section 1397D) that meets
                                    the ownership requirements of section
                                    1397C(b).
                                ``(ii) Limitation.--Clause (i) shall not
                            apply to the extent that the aggregate amount
                            of the distributions described in clause (i) is
                            greater than the excess of--
                                        ``(I) the qualified savings
                                    contributions (as defined in section
                                    1397A(b)) of the taxpayer, and any
                                    earnings thereon, over
                                        ``(II) the aggregate amounts to
                                    which clause (i) and the last sentence
                                    of paragraph (3)(A) applied for
                                    preceding taxable years.''
                        (B) Definitions.--Section 72(t) is amended by
                    adding at the end thereof the following new paragraphs:
                ``(6) Qualified first-time homebuyer distributions.--For
            purposes of paragraph (2)(D)(i)(I)--
                        ``(A) In general.--The term `qualified first-time
                    homebuyer distribution' means any payment or
                    distribution received by an individual to the extent
                    such payment or distribution is used by the individual
                    before the close of the 60th day after the day on which
                    such payment or distribution is received to pay
                    qualified acquisition costs with respect to a principal
                    residence of a first-time homebuyer who is such
                    individual or the spouse of such individual.
                        ``(B) Qualified acquisition costs.--For purposes of
                    this paragraph, the term `qualified acquisition costs'
                    means the costs of acquiring, constructing, or
                    reconstructing a residence. Such term includes any
                    usual or reasonable settlement, financing, or other
                    closing costs.
                        ``(C) First-time homebuyer; other definitions.--For
                    purposes of this paragraph--
                                ``(i) First-time homebuyer.--The term
                            `first-time homebuyer' means any individual
                            if--
                                        ``(I) such individual (and if
                                    married, such individual's spouse) had
                                    no present ownership interest in a
                                    principal residence during the 3-year
                                    period ending on the date of
                                    acquisition of the principal residence
                                    to which this paragraph applies, and
                                        ``(II) subsection (a)(6), (h), or
                                    (k) of section 1034 did not suspend the
                                    running of any period of time specified
                                    in section 1034 with respect to such
                                    individual on the day before the date
                                    the distribution is applied pursuant to
                                    subparagraph (A)(ii).
                                ``(ii) Principal residence.--The term
                            `principal residence' has the same meaning as
                            when used in section 1034.
                                ``(iii) Date of acquisition.--The term
                            `date of acquisition' means the date--
                                        ``(I) on which a binding contract
                                    to acquire the principal residence to
                                    which subparagraph (A) applies is
                                    entered into, or
                                        ``(II) on which construction or
                                    reconstruction of such a principal
                                    residence is commenced.
                        ``(D) Special rule where delay in acquisition.--If
                    any distribution from any qualified retirement plan
                    fails to meet the requirements of subparagraph (A)
                    solely by reason of a delay or cancellation of the
                    purchase or construction of the residence, the amount
                    of the distribution may be recontributed to the plan
                    from which it was distributed within 120 days after the
                    date of such distribution.
                ``(7) Qualified higher education expenses.--For purposes of
            paragraph (2)(D)(ii)(II)--
                        ``(A) In general.--The term `qualified higher
                    education expenses' means tuition, fees, books,
                    supplies, and equipment required for the enrollment or
                    attendance of--
                                ``(i) the taxpayer,
                                ``(ii) the taxpayer's spouse, or
                                ``(iii) the taxpayer's child (as defined in
                            section 151(c)(3)) or grandchild,
                    at an eligible educational institution (as defined in
                    section 135(c)(3)).
                        ``(B) Coordination with savings bond provisions.--
                    The amount of qualified higher education expenses for
                    any taxable year shall be reduced by any amount
                    excludable from gross income under section 135.''
                        (C) Conforming amendments.--
                                (i) Subparagraph (B) of section 72(t)(2) is
                            amended by striking ``or (C)'' and inserting
                            ``, (C), or (D)''.
                                (ii) Section 401(k)(2)(B)(i) is amended by
                            striking ``or'' at the end of subclause (III),
                            by striking ``and'' at the end of subclause
                            (IV) and inserting ``or'', and by inserting
                            after subclause (IV) the following new
                            subclause:
                                        ``(V) subject to the limitation of
                                    section 72(t)(2)(D)(ii), the date on
                                    which qualified first-time homebuyer
                                    distributions (as defined in section
                                    72(t)(6)), distributions for qualified
                                    higher education expenses (as defined
                                    in section 72(t)(7)), or distributions
                                    for investments described in section
                                    72(t)(2)(D)(i)(III) are made, and''.
        (e) Amendment of Targeted Jobs Credit.--Subparagraph (A) of section
    51(i)(1) is amended by inserting ``, or, if the taxpayer is an entity
    other than a corporation, to any individual who owns, directly or
    indirectly, more than 50 percent of the capital and profits interests
    in the entity,'' after ``of the corporation''.
        (f) Carryovers.--Subsection (c) of section 381 (relating to
    carryovers in certain corporate acquisitions) is amended by adding at
    the end the following new paragraph:
                ``(26) Enterprise zone provisions.--The acquiring
            corporation shall take into account (to the extent proper to
            carry out the purposes of this section and subchapter U, and
            under such regulations as may be prescribed by the Secretary)
            the items required to be taken into account for purposes of
            subchapter U in respect of the distributor or transferor
            corporation.''

    SEC. 14304. EFFECTIVE DATE.

        The amendments made by this part shall take effect on the date of
    the enactment of this Act.

      PART II--CREDIT FOR CONTRIBUTIONS TO CERTAIN COMMUNITY DEVELOPMENT
                                  CORPORATIONS

    SEC. 14311. CREDIT FOR CONTRIBUTIONS TO CERTAIN COMMUNITY DEVELOPMENT
                  CORPORATIONS.

        (a) In General.--For purposes of section 38 of the Internal Revenue
    Code of 1986, the current year business credit shall include the credit
    determined under this section.
        (b) Determination of Credit.--The credit determined under this
    section for each taxable year in the credit period with respect to any
    qualified CDC contribution made by the taxpayer is an amount equal to 5
    percent of such contribution.
        (c) Credit Period.--For purposes of this section, the credit period
    with respect to any qualified CDC contribution is the period of 10
    taxable years beginning with the taxable year during which such
    contribution was made.
        (d) Qualified CDC Contribution.--For purposes of this section--
                (1) In general.--The term ``qualified CDC contribution''
            means any transfer of cash--
                        (A) which is made to a selected community
                    development corporation during the 5-year period
                    beginning on the date such corporation was selected for
                    purposes of this section,
                        (B) the amount of which is available for use by
                    such corporation for at least 10 years,
                        (C) which is to be used by such corporation for
                    qualified low-income assistance within its operational
                    area, and
                        (D) which is designated by such corporation for
                    purposes of this section.
                (2) Limitations on amount designated.--The aggregate amount
            of contributions to a selected community development
            corporation which may be designated by such corporation shall
            not exceed $4,000,000.
        (e) Selected Community Development Corporations.--
                (1) In general.--For purposes of this section, the term
            ``selected community development corporation'' means any
            corporation--
                        (A) which is described in section 501(c)(3) of such
                    Code and exempt from tax under section 501(a) of such
                    Code,
                        (B) the principal purposes of which include
                    promoting employment of, and business opportunities
                    for, low-income individuals who are residents of the
                    operational area, and
                        (C) which is selected by the Secretary of Housing
                    and Urban Development for purposes of this section.
                (2) Only 10 corporations may be selected.--
                        (A) In general.--The Secretary of Housing and Urban
                    Development may select 10 corporations for purposes of
                    this section, subject to the availability of eligible
                    corporations. Such selections may be made only before
                    July 1, 1994. At least 4 of the operational areas of
                    the corporations selected must be rural areas (as
                    defined by section 1393(a)(3) of such Code).
                        (B) Priority of designations.--In selecting
                    corporations for purposes of this section, such
                    Secretary shall give priority to corporations with a
                    demonstrated record of performance in administering
                    community development programs which target at least 75
                    percent of the jobs emanating from their investment
                    funds to low income or unemployed individuals.
                (3) Operational areas must have certain characteristics.--A
            corporation may be selected for purposes of this section only
            if its operational area meets the following criteria:
                        (A) The area meets the size requirements under
                    section 1392(a)(3).
                        (B) The unemployment rate (as determined by the
                    appropriate available data) is not less than the
                    national unemployment rate.
                        (C) The median family income of residents of such
                    area does not exceed 80 percent of the median gross
                    income of residents of the jurisdiction of the local
                    government which includes such area.
        (f) Qualified Low-Income Assistance.--For purposes of this section,
    the term ``qualified low-income assistance'' means assistance--
                (1) which is designed to provide employment of, and
            business opportunities for, low-income individuals who are
            residents of the operational area of the community development
            corporation, and
                (2) which is approved by the Secretary of Housing and Urban
            Development.

                          Subtitle D--Other Provisions

                         PART I--DISCLOSURE PROVISIONS

    SEC. 14401. DISCLOSURE OF RETURN INFORMATION FOR ADMINISTRATION OF
                  CERTAIN VETERANS PROGRAMS.

        (a) General Rule.--Subparagraph (D) of section 6103(l)(7) (relating
    to disclosure of return information to Federal, State, and local
    agencies administering certain programs) is amended by striking
    ``September 30, 1997'' in the second sentence following clause (viii)
    and inserting ``September 30, 1998''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect on the date of the enactment of this Act.

    SEC. 14402. DISCLOSURE OF RETURN INFORMATION TO CARRY OUT INCOME
                  CONTINGENT REPAYMENT OF STUDENT LOANS.

        (a) General Rule.--Subsection (l) of section 6103 (relating to
    confidentiality and disclosure of returns and return information) is
    amended by adding at the end thereof the following new paragraph:
                ``(13) Disclosure of return information to carry out income
            contingent repayment of student loans.--
                        ``(A) In general.--The Secretary may, upon written
                    request from the Secretary of Education, disclose to
                    officers and employees of the Department of Education
                    return information with respect to a taxpayer who has
                    received an applicable student loan and whose loan
                    repayment amounts are based in whole or in part on the
                    taxpayer's income. Such return information shall be
                    limited to--
                                ``(i) taxpayer identity information with
                            respect to such taxpayer,
                                ``(ii) the filing status of such taxpayer,
                            and
                                ``(iii) the adjusted gross income of such
                            taxpayer.
                        ``(B) Restriction on use of disclosed
                    information.--Return information disclosed under
                    subparagraph (A) may be used by officers and employees
                    of the Department of Education only for the purposes
                    of, and to the extent necessary in, establishing the
                    appropriate income contingent repayment amount for an
                    applicable student loan.
                        ``(C) Applicable student loan.--For purposes of
                    this paragraph, the term `applicable student loan'
                    means--
                                ``(i) any loan made under the program
                            authorized under part D of title IV of the
                            Higher Education Act of 1965, and
                                ``(ii) any loan made under part B or E of
                            title IV of the Higher Education Act of 1965
                            which is in default and has been assigned to
                            the Department of Education.
                        ``(D) Termination.--This paragraph shall not apply
                    to any request made after September 30, 1998.''
        (b) Conforming Amendments.--
                (1) So much of paragraph (4) of section 6103(m) as precedes
            subparagraph (B) thereof is amended to read as follows:
                ``(4) Individuals who owe an overpayment of federal pell
            grants or who have defaulted on student loans administered by
            the department of education.--
                        ``(A) In general.--Upon written request by the
                    Secretary of Education, the Secretary may disclose the
                    mailing address of any taxpayer--
                                ``(i) who owes an overpayment of a grant
                            awarded to such taxpayer under subpart 1 of
                            part A of title IV of the Higher Education Act
                            of 1965, or
                                ``(ii) who has defaulted on a loan--
                                        ``(I) made under part B, D, or E of
                                    title IV of the Higher Education Act of
                                    1965, or
                                        ``(II) made pursuant to section
                                    3(a)(1) of the Migration and Refugee
                                    Assistance Act of 1962 to a student at
                                    an institution of higher education,
                    for use only by officers, employees, or agents of the
                    Department of Education for purposes of locating such
                    taxpayer for purposes of collecting such overpayment or
                    loan .''
                (2) Subparagraph (B) of section 6103(m)(4) is amended--
                        (A) in clause (i), by striking ``under part B'' and
                    inserting ``under part B or D''; and
                        (B) in clause (ii), by striking ``under part E''
                    and inserting ``under subpart 1 of part A, or part D or
                    E,'';
                (3) Section 6103(p) is amended--
                        (A) in paragraph (3)(A), by striking ``(11), or
                    (12), (m)'' and inserting ``(11), (12), or (13), (m)'';
                        (B) in paragraph (4)--
                                (i) in the matter preceding subparagraph
                            (A), by striking out ``(10), or (11),'' and
                            inserting ``(10), (11), or (13),'', and
                                (ii) in subparagraph (F)(ii), by striking
                            ``(11), or (12),'' and inserting ``(11), (12),
                            or (13),''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act.
        (d) Study of Internal Revenue Service Collection of Student
    Loans.--
                (1) General rule.--The Secretary of the Treasury, in
            consultation with the Secretary of Education, shall conduct a
            study of the feasibility of implementing a system for the
            repayment of Federal student loans through wage withholding or
            other means involving the Internal Revenue Service. Such study
            shall include an examination of--
                        (A) whether the Internal Revenue Service could
                    implement such a system within its current resources
                    and without adversely affecting the ability of the
                    Internal Revenue Service to collect tax revenues,
                        (B) the cumulative impact on voluntary compliance
                    with the tax system of increased disclosure of tax
                    return information and increased Internal Revenue
                    Service involvement in nontax collection activities,
                        (C) the anticipated effect on the management of
                    Federal student loan collections and on borrower
                    repayment of such loans, and
                        (D) the ability of the Internal Revenue Service to
                    effectively service student loans.
                (2) Recommendations.--Not later than the date 6 months
            after the date of the enactment of this Act, the Secretary of
            the Treasury shall submit to the Congress a report on the study
            conducted under paragraph (1) (together with such legislative
            recommendations as such Secretary may deem advisable).

    SEC. 14403. USE OF RETURN INFORMATION FOR INCOME VERIFICATION UNDER
                  CERTAIN HOUSING ASSISTANCE PROGRAMS.

        (a) In General.--Subparagraph (D) of section 6103(l)(7) (relating
    to the disclosure of return information to Federal, State, and local
    agencies administering certain programs) is amended--
                (1) in clause (vii), by striking ``and'' at the end;
                (2) in clause (viii), by striking the period at the end and
            inserting ``; and'';
                (3) by inserting after clause (viii) the following new
            clause:
                ``(ix) any housing assistance program administered by the
            Department of Housing and Urban Development that involves
            initial and periodic review of an applicant's or participant's
            income, except that return information may be disclosed under
            this clause only on written request by the Secretary of Housing
            and Urban Development and only for use by officers and
            employees of the Department of Housing and Urban Development
            with respect to applicants for and participants in such
            programs.''; and
                (4) by adding at the end thereof the following: ``Clause
            (ix) shall not apply after September 30, 1998.''
        (b) Conforming Amendment.--The heading of paragraph (7) of section
    6103(l) is amended by inserting after ``code'' the following: ``, or
    certain housing assistance programs''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act.
        (d) Study.--The Secretary of the Treasury or his delegate, in
    consultation with the Secretary of Housing and Urban Development, shall
    conduct a study on--
                (1) whether the information provided under section
            6103(l)(7)(D)(ix) of the Internal Revenue Code of 1986 is being
            used effectively by the Department of Housing and Urban
            Development,
                (2) such Department's compliance with the requirements of
            section 6103(p) of such Code, and
                (3) the impact on the privacy rights of applicants for and
            participants in housing assistance programs administered by the
            Department of Housing and Urban Development.
    The report of such study shall be submitted before January 1, 1998, to
    the Congress.

                          PART II--USER FEE PROVISIONS

    SEC. 14411. FEES FOR APPLICATIONS FOR ALCOHOL LABELING AND FORMULA
                  REVIEWS.

        (a) In General.--The Secretary of the Treasury or his delegate
    (hereinafter in this section referred to as the `Secretary') shall
    establish a program requiring the payment of user fees for--
                (1) requests for each certificate of alcohol label approval
            required under the Federal Alcohol Administration Act (27
            U.S.C. 201 et seq.) and for each request for exemption from
            such requirement, and
                (2) requests for each formula review, and requests for each
            statement of process (including laboratory tests and analyses),
            under such Act or under chapter 51 of the Internal Revenue Code
            of 1986.
        (b) Program Criteria.--
                (1) In general.--The fees charged under the program
            required by subsection (a) shall be determined such that the
            Secretary estimates that the aggregate of such fees received
            during any fiscal year will be $5,000,000.
                (2) Minimum fees.--The fee charged under the program
            required by subsection (a) shall not be less than--
                        (A) $50 for each request referred to in subsection
                    (a)(1), and
                        (B) $250 for each request referred to in subsection
                    (a)(2).
        (c) Application of Section.--Subsection (a) shall apply to requests
    made on or after the 90th day after the date of the enactment of this
    Act.
        (d) Deposit and Credit as Offsetting Receipts.--The amounts
    collected by the Secretary under the program required by subsection (a)
    (to the extent such amounts do not exceed $5,000,000) shall be
    deposited into the Treasury as offsetting receipts and ascribed to the
    alcohol compliance program of the Bureau of Alcohol, Tobacco, and
    Firearms.

    SEC. 14412. USE OF HARBOR MAINTENANCE TRUST FUND AMOUNTS FOR
                  ADMINISTRATIVE EXPENSES.

        (a) In General.--Paragraph (3) of section 9505(c) (relating to
    expenditures from Harbor Maintenance Trust Fund) is amended to read as
    follows:
                ``(3) for the payment of all expenses of administration
            incurred by the Department of the Treasury in administering
            subchapter A of chapter 36 (relating to harbor maintenance
            tax), but not in excess of $5,000,000 for any fiscal year.''
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to fiscal years beginning after the date of the enactment of this
    Act.

    SEC. 14413. INCREASE IN TAX ON FUEL USED IN COMMERCIAL TRANSPORTATION
                  ON INLAND WATERWAYS.

        (a) In General.--The table contained in section 4042(a)(2)(A) is
    amended to read as follows:

                      ``If the use occurs during:
                                                     The tax per gallon is:
                              1994.......................    24 cents
                              1995.......................    40 cents
                              1996.......................    55 cents
                              1997 or thereafter......... 70 cents.''
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect on January 1, 1994.

                          PART III--PUBLIC DEBT LIMIT

    SEC. 14421. INCREASE IN PUBLIC DEBT LIMIT.

        (a) General Rule.--Subsection (b) of section 3101 of title 31,
    United States Code, is amended by striking out the dollar limitation
    contained in such subsection and inserting in lieu thereof
    ``$4,900,000,000,000''.
        (b) Repeal of Temporary Increase.--Effective on and after the date
    of the enactment of this Act, section 1 of Public Law 103-12 is hereby
    repealed.

                          PART IV--VACCINE PROVISIONS

    SEC. 14431. EXCISE TAX ON CERTAIN VACCINES MADE PERMANENT.

        (a) Tax.--Subsection (c) of section 4131 (relating to tax on
    certain vaccines) is amended to read as follows:
        ``(c) Application of Section.--The tax imposed by this section
    shall apply--
                ``(1) after December 31, 1987, and before January 1, 1993,
            and
                ``(2) during periods after the date of the enactment of
            this subsection.''
        (b) Trust Fund.--Paragraph (1) of section 9510(c) (relating to
    expenditures from Vaccine Injury Compensation Trust Fund) is amended by
    striking ``and before October 1, 1992,''.
        (c) Study.--The Secretary of the Treasury, in consultation with the
    Secretary of Health and Human Services, shall conduct a study of--
                (1) the estimated amount that will be paid from the Vaccine
            Injury Compensation Trust Fund with respect to vaccines
            administered after September 30, 1988,
                (2) the rates of vaccine-related injury or death with
            respect to the various types of such vaccines,
                (3) new vaccines and immunization practices being developed
            or used for which amounts may be paid from such Trust Fund,
                (4) whether additional vaccines should be included in the
            vaccine injury compensation program, and
                (5) the appropriate treatment of vaccines produced by State
            governmental entities.
    The report of such study shall be submitted not later than 1 year after
    the date of the enactment of this Act, to the Committee on Ways and
    Means of the House of Representatives and the Committee on Finance of
    the Senate.
        (d) Floor Stocks Tax.--
                (1) Imposition of tax.--On any taxable vaccine--
                        (A) which was sold by the manufacturer, producer,
                    or importer before the date of the enactment of this
                    Act,
                        (B) on which no tax was imposed by section 4131 of
                    the Internal Revenue Code of 1986 (or, if such tax was
                    imposed, was credited or refunded), and
                        (C) which is held on such date by any person for
                    sale or use,
            there is hereby imposed a tax in the amount determined under
            section 4131(b) of such Code.
                (2) Liability for tax and method of payment.--
                        (A) Liability for tax.--The person holding any
                    taxable vaccine to which the tax imposed by paragraph
                    (1) applies shall be liable for such tax.
                        (B) Method of payment.--The tax imposed by
                    paragraph (1) shall be paid in such manner as the
                    Secretary shall prescribe by regulations.
                        (C) Time for payment.--The tax imposed by paragraph
                    (1) shall be paid on or before the last day of the 6th
                    month beginning after the date of the enactment of this
                    Act.
                (3) Definitions.--For purposes of this subsection, terms
            used in this subsection which are also used in section 4131 of
            such Code shall have the respective meanings such terms have in
            such section.
                (4) Other laws applicable.--All provisions of law,
            including penalties, applicable with respect to the taxes
            imposed by section 4131 of such Code shall, insofar as
            applicable and not inconsistent with the provisions of this
            subsection, apply to the floor stocks taxes imposed by
            paragraph (1), to the same extent as if such taxes were imposed
            by such section 4131.

    SEC. 14432. CONTINUATION COVERAGE UNDER GROUP HEALTH PLANS OF COSTS OF
                  PEDIATRIC VACCINES.

        (a) In General.--Paragraph (1) of section 4980B(f) is amended by
    inserting ``the coverage of the costs of pediatric vaccines (as defined
    under section 2162 of the Public Health Service Act) is not reduced
    below the coverage provided by the plan as of May 1, 1993, and only
    if'' after ``only if''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply with respect to plan years beginning after the date of the
    enactment of this Act.

    SEC. 14433. CHILDHOOD IMMUNIZATION TRUST FUND.

        (a) In General.--Subchapter A of chapter 98 (relating to trust fund
    code) is amended by adding at the end thereof the following new
    section:

    ``SEC. 9512. CHILDHOOD IMMUNIZATION TRUST FUND.

        ``(a) Creation of Trust Fund.--There is established in the Treasury
    of the United States a trust fund to be known as the `Childhood
    Immunization Trust Fund', consisting of such amounts as may be
    appropriated or credited to such Trust Fund as provided in this section
    or section 9602(b).
        ``(b) Transfers to Trust Fund.--There are hereby appropriated to
    the Childhood Immunization Trust Fund amounts equivalent to the taxes
    received in the Treasury under any tax hereafter specified by law for
    purposes of this subsection.
        ``(c) Expenditures From Trust Fund.--Amounts in the Childhood
    Immunization Trust Fund shall be available, as provided in
    appropriation Acts, only for purposes of making expenditures to carry
    out part A of subtitle 3 of title XXI of the Public Health Service
    Act.''
        (b) Clerical Amendment.--The table of sections for such subchapter
    A is amended by adding at the end thereof the following new item:

                                  ``Sec. 9512. Childhood Immunization Trust
                                            Fund.''
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