[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2675 Introduced in Senate (IS)]

<DOC>






114th CONGRESS
  2d Session
                                S. 2675

   To provide for the adjustment of the debts of the Commonwealth of 
                  Puerto Rico, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 14, 2016

Mr. Menendez (for himself, Mr. Schumer, Mr. Brown, Mr. Blumenthal, Ms. 
 Warren, and Mr. Booker) introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To provide for the adjustment of the debts of the Commonwealth of 
                  Puerto Rico, and for other purposes.

    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 ``Puerto Rico Recovery Act of 2016''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                        TITLE I--TAX PROVISIONS

Sec. 101. Puerto Rico residents eligible for earned income tax credit.
Sec. 102. Equitable treatment for residents of Puerto Rico with respect 
                            to the refundable portion of the child tax 
                            credit.
                      TITLE II--HEALTH CARE PARITY

                          Subtitle A--Medicaid

Sec. 201. Elimination of general Medicaid funding limitations (``cap'') 
                            for territories.
Sec. 202. Elimination of specific Federal medical assistance percentage 
                            (FMAP) limitation for territories.
Sec. 203. Application of Medicaid waiver authority to all of the 
                            territories.
Sec. 204. Application of 100 percent Federal poverty line (FPL) 
                            limitation to territories.
Sec. 205. Permitting Medicaid DSH allotments for territories.
                          Subtitle B--Medicare

Sec. 211. Calculation of Medicare DSH payments for IPPS hospitals in 
                            Puerto Rico.
Sec. 212. Application of part B deemed enrollment process to residents 
                            of Puerto Rico; special enrollment period 
                            and limit on late enrollment penalties.
Sec. 213. Puerto Rico practice expense GPCI improvement.
Sec. 214. Adjustment in benchmark for low base payment counties in 
                            Puerto Rico.
Sec. 215. Eliminating exclusion of part D eligible individuals residing 
                            in territories from eligibility for premium 
                            and cost-sharing subsidies.
Sec. 216. Report on treatment of territories under Medicare part D.
                       Subtitle C--Miscellaneous

Sec. 221. Report on exclusion of territories from Exchanges.

                        TITLE I--TAX PROVISIONS

SEC. 101. PUERTO RICO RESIDENTS ELIGIBLE FOR EARNED INCOME TAX CREDIT.

    (a) In General.--Section 32 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(n) Residents of Puerto Rico.--
            ``(1) In general.--In the case of residents of Puerto 
        Rico--
                    ``(A) the United States shall be treated as 
                including Puerto Rico for purposes of subsections 
                (c)(1)(A)(ii)(I) and (c)(3)(C),
                    ``(B) subsection (c)(1)(D) shall not apply to 
                nonresident alien individuals who are residents of 
                Puerto Rico, and
                    ``(C) adjusted gross income and gross income shall 
                be computed without regard to section 933 for purposes 
                of subsections (a)(2)(B) and (c)(2)(A)(i).
            ``(2) Limitation.--The credit allowed under this section by 
        reason of this subsection for any taxable year shall not exceed 
        the amount, determined under regulations or other guidance 
        promulgated by the Secretary, that a similarly situated 
        taxpayer would receive if residing in a State.''.
    (b) Child Tax Credit Not Reduced.--Subclause (II) of section 
24(d)(1)(B)(ii) of such Code is amended by inserting before the period 
``(determined without regard to section 32(n) in the case of residents 
of Puerto Rico)''.
    (c) Effective Date.--The amendment made shall apply to taxable 
years beginning after December 31, 2015.

SEC. 102. EQUITABLE TREATMENT FOR RESIDENTS OF PUERTO RICO WITH RESPECT 
              TO THE REFUNDABLE PORTION OF THE CHILD TAX CREDIT.

    (a) In General.--Section 24(d)(1) of the Internal Revenue Code of 
1986 is amended by inserting ``or section 933'' after ``section 112''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2015.

                      TITLE II--HEALTH CARE PARITY

                          Subtitle A--Medicaid

SEC. 201. ELIMINATION OF GENERAL MEDICAID FUNDING LIMITATIONS (``CAP'') 
              FOR TERRITORIES.

    (a) In General.--Section 1108 of the Social Security Act (42 U.S.C. 
1308) is amended--
            (1) in subsection (f), in the matter before paragraph (1), 
        by striking ``subsection (g)'' and inserting ``subsections (g) 
        and (h)'';
            (2) in subsection (g)(2), in the matter before subparagraph 
        (A), by inserting ``and subsection (h)'' after ``paragraphs (3) 
        and (5)''; and
            (3) by adding at the end the following new subsection:
    ``(h) Sunset of Medicaid Funding Limitations for Puerto Rico, the 
Virgin Islands of the United States, Guam, the Northern Mariana 
Islands, and American Samoa.--Subsections (f) and (g) shall not apply 
to Puerto Rico, the Virgin Islands of the United States, Guam, the 
Northern Mariana Islands, and American Samoa beginning with fiscal year 
2017.''.
    (b) Conforming Amendments.--
            (1) Section 1902(j) of the Social Security Act (42 U.S.C. 
        1396a(j)) is amended by striking ``, the limitation in section 
        1108(f),''.
            (2) Section 1903(u) of the Social Security Act (42 U.S.C. 
        1396b(u)) is amended by striking paragraph (4).
            (3) Section 1323(c)(1) of the Patient Protection and 
        Affordable Care Act (42 U.S.C. 18043(c)(1)) is amended by 
        striking ``2019'' and inserting ``2016''.
    (c) Effective Date.--The amendments made by this section shall 
apply beginning with fiscal year 2017.

SEC. 202. ELIMINATION OF SPECIFIC FEDERAL MEDICAL ASSISTANCE PERCENTAGE 
              (FMAP) LIMITATION FOR TERRITORIES.

    Section 1905 of the Social Security Act (42 U.S.C. 1396d) is 
amended--
            (1) in subsection (b)(2), by inserting ``for fiscal years 
        before fiscal year 2017'' after ``American Samoa''; and
            (2) in subsection (y)(1), in the matter preceding 
        subparagraph (A)--
                    (A) by inserting ``, for fiscal years before fiscal 
                year 2017,'' before ``is one of the''; and
                    (B) by inserting ``and, for fiscal year 2017 and 
                subsequent fiscal years, is one of the 50 States, the 
                District of Columbia, Puerto Rico, the Virgin Islands 
                of the United States, Guam, the Northern Mariana 
                Islands, or American Samoa,'' after ``the District of 
                Columbia''.

SEC. 203. APPLICATION OF MEDICAID WAIVER AUTHORITY TO ALL OF THE 
              TERRITORIES.

    (a) In General.--Section 1902(j) of the Social Security Act (42 
U.S.C. 1396a(j)) is amended--
            (1) by striking ``American Samoa and the Northern Mariana 
        Islands'' and inserting ``Puerto Rico, the Virgin Islands of 
        the United States, Guam, the Northern Mariana Islands, and 
        American Samoa'';
            (2) by striking ``American Samoa or the Northern Mariana 
        Islands'' and inserting ``Puerto Rico, the Virgin Islands of 
        the United States, Guam, the Northern Mariana Islands, or 
        American Samoa'';
            (3) by inserting ``(1)'' after ``(j)'';
            (4) by inserting ``except as otherwise provided in this 
        subsection,'' after ``Notwithstanding any other requirement of 
        this title''; and
            (5) by adding at the end the following:
    ``(2) The Secretary may not waive under this subsection the 
requirement of subsection (a)(10)(A)(i)(IX) (relating to coverage of 
adults formerly under foster care) with respect to any territory.''.
    (b) Effective Date.--The amendments made by this section shall 
apply beginning October 1, 2016.

SEC. 204. APPLICATION OF 100 PERCENT FEDERAL POVERTY LINE (FPL) 
              LIMITATION TO TERRITORIES.

    (a) In General.--Section 1902 of the Social Security Act (42 U.S.C. 
1396a) is amended--
            (1) in subsection (a)(10)(A)(i)(VIII), by inserting ``(or, 
        subject to subsection (j), 100 percent in the case of Puerto 
        Rico, the Virgin Islands of the United States, Guam, the 
        Northern Mariana Islands, and American Samoa)'' after ``133 
        percent''; and
            (2) in subsection (j), as amended by section 203, by adding 
        at the end the following new paragraph:
    ``(3)(A) Subject to subparagraph (B), Federal financial 
participation shall not be available to Puerto Rico, the Virgin Islands 
of the United States, Guam, the Northern Mariana Islands, or American 
Samoa for medical assistance for an individual whose family income 
exceeds 100 percent of the official poverty line for a family of the 
size involved, except in the case of individuals qualifying for medical 
assistance under subsection (a)(10)(A)(i)(IX).
    ``(B) The Secretary may, under paragraph (1) or section 1115, waive 
the limitation under subparagraph (A) in the case of a territory other 
than Puerto Rico. In carrying out this subparagraph, the Secretary 
shall take into account the eligibility levels established under the 
State plan of the territory involved before the date of the enactment 
of this paragraph.''.
    (b) Not Applying 5 Percent Disregard.--Section 1902(e)(14)(I) of 
the Social Security Act (42 U.S.C. 1396b(e)(14)(I)) is amended by 
adding at the end the following:
                ``The previous sentence shall only apply to a State 
                that is one of the 50 States or the District of 
                Columbia.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to eligibility determinations made with respect to 
items and services furnished on or after October 1, 2016.

SEC. 205. PERMITTING MEDICAID DSH ALLOTMENTS FOR TERRITORIES.

    Section 1923(f) of the Social Security Act (42 U.S.C. 1396) is 
amended--
            (1) in paragraph (6), by adding at the end the following 
        new subparagraph:
                    ``(C) Territories.--
                            ``(i) Fiscal year 2017.--For fiscal year 
                        2017, with respect to the territories of Puerto 
                        Rico, the Virgin Islands of the United States, 
                        Guam, the Northern Mariana Islands, and 
                        American Samoa, the DSH allotment determined 
                        for each such territory shall bear the same 
                        ratio to $150,000,000 as the ratio of the 
                        number of individuals who are low-income or 
                        uninsured and residing in each such respective 
                        territory (as estimated from time to time by 
                        the Secretary) bears to the sums of the number 
                        of such individuals residing in all of the 
                        territories.
                            ``(ii) Subsequent fiscal year.--For each 
                        subsequent fiscal year, the DSH allotment for 
                        each such territory is subject to an increase 
                        or reduction in accordance with paragraphs (3) 
                        and (7).'';
            (2) in paragraph (7)(A), by striking clause (iv) and 
        redesignating clause (v) as clause (iv); and
            (3) in paragraph (9), by inserting before the period at the 
        end the following: ``, and includes, beginning with fiscal year 
        2017, Puerto Rico, the Virgin Islands of the United States, 
        Guam, the Northern Mariana Islands, and American Samoa''.

                          Subtitle B--Medicare

SEC. 211. CALCULATION OF MEDICARE DSH PAYMENTS FOR IPPS HOSPITALS IN 
              PUERTO RICO.

    Section 1886(d)(9)(D)(iii) of the Social Security Act (42 U.S.C. 
1395ww(d)(9)(D)(iii)) is amended to read as follows:
            ``(iii) Subparagraph (F) (relating to disproportionate 
        share payments), including application of subsection (r), 
        except that for this purpose--
                    ``(I) the sum described in clause (ii) of this 
                subparagraph shall be substituted for the sum referred 
                to in paragraph (5)(F)(ii)(I); and
                    ``(II) for discharges occurring on or after October 
                1, 2015, subclause (I) of paragraph (5)(F)(vi) shall be 
                applied by substituting for the numerator described in 
                such subclause the number of subsection (d) Puerto Rico 
                hospital's patient days for the cost reporting period 
                involved which were made up of patients who (for such 
                days) were entitled to benefits under part A of this 
                title and were--
                            ``(aa) entitled to supplementary security 
                        income benefits (excluding any State 
                        supplementation) under title XVI of this Act;
                            ``(bb) eligible for medical assistance 
                        under a State plan under title XIX; or
                            ``(cc) receiving aid or assistance under 
                        any plan of the State approved under title I, 
                        X, XIV, or XVI.''.

SEC. 212. APPLICATION OF PART B DEEMED ENROLLMENT PROCESS TO RESIDENTS 
              OF PUERTO RICO; SPECIAL ENROLLMENT PERIOD AND LIMIT ON 
              LATE ENROLLMENT PENALTIES.

    (a) Application of Part B Deemed Enrollment Process to Residents of 
Puerto Rico.--Section 1837(f)(3) of the Social Security Act (42 U.S.C. 
1395p(f)(3)) is amended by striking ``, exclusive of Puerto Rico''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individuals whose initial enrollment period under section 
1837(d) of the Social Security Act begins on or after the first day of 
the effective month, specified by the Secretary of Health and Human 
Services under section 1839(j)(1)(C) of such Act, as added by 
subsection (c)(2).
    (c) Transition Providing Special Enrollment Period and Limit on 
Late Enrollment Penalties for Certain Medicare Beneficiaries.--Section 
1839 of the Social Security Act (42 U.S.C. 1395r) is amended--
            (1) in the first sentence of subsection (b), by inserting 
        ``subject to section 1839(j)(2),'' after ``subsection (i)(4) or 
        (l) of section 1837,''; and
            (2) by adding at the end the following new subsection:
    ``(j) Special Rules for Certain Residents of Puerto Rico.--
            ``(1) Special enrollment period, coverage period for 
        residents who are eligible but not enrolled.--
                    ``(A) In general.--In the case of a transition 
                individual (as defined in paragraph (3)) who is not 
                enrolled under this part as of the day before the first 
                day of the effective month (as defined in subparagraph 
                (C)), the Secretary shall provide for a special 
                enrollment period under section 1837 of 7 months 
                beginning with such effective month during which the 
                individual may be enrolled under this part.
                    ``(B) Coverage period.--In the case of such an 
                individual who enrolls during such special enrollment 
                period, the coverage period under section 1838 shall 
                begin on the first day of the second month after the 
                month in which the individual enrolls.
                    ``(C) Effective month defined.--In this section, 
                the term `effective month' means a month, not earlier 
                than October 2016 and not later than January 2017, 
                specified by the Secretary.
            ``(2) Reduction in late enrollment penalties for current 
        enrollees and individuals enrolling during transition.--
                    ``(A) In general.--In the case of a transition 
                individual who is enrolled under this part as of the 
                day before the first day of the effective month or who 
                enrolls under this part on or after the date of the 
                enactment of this subsection but before the end of the 
                special enrollment period under paragraph (1)(A), the 
                amount of the late enrollment penalty imposed under 
                section 1839(b) shall be recalculated by reducing the 
                penalty to 15 percent of the penalty otherwise 
                established.
                    ``(B) Application.--Subparagraph (A) shall be 
                applied in the case of a transition individual who--
                            ``(i) is enrolled under this part as of the 
                        month before the effective month, for premiums 
                        for months beginning with such effective month; 
                        or
                            ``(ii) enrolls under this part on or after 
                        the date of the enactment of this Act and 
                        before the end of the special enrollment period 
                        under paragraph (1)(A), for premiums for months 
                        during the coverage period under this part 
                        which occur during or after the effective 
                        month.
                    ``(C) Loss of reduction if individual terminates 
                enrollment.--Subparagraph (A) shall not apply to a 
                transition individual if the individual terminates 
                enrollment under this part after the end of the special 
                enrollment period under paragraph (1).
            ``(3) Transition individual defined.--In this section, the 
        term `transition individual' means an individual who resides in 
        Puerto Rico and who would have been deemed enrolled under this 
        part pursuant to section 1837(f) before the first day of the 
        effective month but for the fact that the individual was a 
        resident of Puerto Rico, regardless of whether the individual 
        is enrolled under this part as of such first day.''.

SEC. 213. PUERTO RICO PRACTICE EXPENSE GPCI IMPROVEMENT.

    Section 1848(e)(1) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)) is amended--
            (1) in subparagraph (A), by striking ``and (I)'' and 
        inserting ``(I), and (J)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(J) Floor for practice expense index for services 
                furnished in puerto rico.--
                            ``(i) In general.--For purposes of payment 
                        for services furnished in Puerto Rico in a year 
                        (beginning with 2016), after calculating the 
                        practice expense index in subparagraph (A)(i) 
                        for Puerto Rico, if such index is below the 
                        reference index (as defined in clause (ii)) for 
                        the year, the Secretary shall increase such 
                        index for Puerto Rico to equal the value of the 
                        reference index for the year. The preceding 
                        sentence shall not be applied in a budget 
                        neutral manner.
                            ``(ii) Reference index defined.--In this 
                        subparagraph, the term `reference index' means, 
                        with respect to a year, 0.800 or, if less, the 
                        lowest practice expense index value for the 
                        year for any area in the 50 States or the 
                        District of Columbia.''.

SEC. 214. ADJUSTMENT IN BENCHMARK FOR LOW BASE PAYMENT COUNTIES IN 
              PUERTO RICO.

    Section 1853(n) of the Social Security Act (42 U.S.C. 1395w-23(n)) 
is amended--
            (1) in paragraph (1), by striking ``and (5)'' and inserting 
        ``, (5), and (6)'';
            (2) in paragraph (4), by striking ``In no case'' and 
        inserting ``Subject to paragraph (6), in no case''; and
            (3) by adding at the end the following new paragraph:
            ``(6) Special rules for blended benchmark amount for 
        territories.--
                    ``(A) In general.--Subject to paragraph (2), the 
                blended benchmark amount for an area in a territory for 
                a year (beginning with 2016) shall not be less than 80 
                percent of the national average of the base payment 
                amounts specified in subparagraph (2)(E) for such year 
                for areas within the 50 States and the District of 
                Columbia.
                    ``(B) Limitation.--In no case shall the blended 
                benchmark amount for an area in a territory for a year 
                under subparagraph (A) exceed the lowest blended 
                benchmark amount for any area within the 50 States and 
                the District of Columbia for such year.''.

SEC. 215. ELIMINATING EXCLUSION OF PART D ELIGIBLE INDIVIDUALS RESIDING 
              IN TERRITORIES FROM ELIGIBILITY FOR PREMIUM AND COST-
              SHARING SUBSIDIES.

    (a) In General.--Section 1860D-14(a)(3) of the Social Security Act 
(42 U.S.C. 1395w-114(a)(3)) is amended--
            (1) in subparagraph (A), in the matter preceding clause 
        (i), by striking ``subject to subparagraph (F),'';
            (2) in subparagraph (B)(v), in the matter preceding 
        subclause (I), by striking ``Subject to subparagraph (F), the 
        Secretary'' and inserting ``The Secretary'';
            (3) in subparagraph (C), by adding at the end the following 
        new sentence: ``In the case of an individual who is not a 
        resident of the 50 States or the District of Columbia, the 
        poverty line (as such term is defined in clause (ii)) that 
        shall apply to such individual shall be the poverty line for 
        the 48 contiguous States and the District of Columbia.''; and
            (4) by striking subparagraph (F).
    (b) Application of Medicaid Provisions.--Section 1935 of the Social 
Security Act (42 U.S.C. 1396u-5) is amended--
            (1) in subsection (a), by striking ``subject to subsection 
        (e)'' in the matter preceding paragraph (1); and
            (2) by striking subsection (e).
    (c) Conforming Amendment.--Section 1108(f) of the Social Security 
Act (42 U.S.C. 1308(f)) is amended by striking ``and section 
1935(e)(1)(B)'' in the matter preceding clause (i).
    (d) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2017.

SEC. 216. REPORT ON TREATMENT OF TERRITORIES UNDER MEDICARE PART D.

    Paragraph (4) of section 1935(e) of the Social Security Act (42 
U.S.C. 1396u-5(e)) is amended to read as follows:
            ``(4) Report on application of subsection.--
                    ``(A) In general.--Not later than May 1, 2018, the 
                Secretary shall submit to Congress a report on the 
                application of this subsection during the period 
                beginning with fiscal year 2006 and ending with 
                December 31, 2017.
                    ``(B) Information to be included in report.--Such 
                report shall include--
                            ``(i) program guidance issued by the 
                        Secretary to implement this subsection;
                            ``(ii) for each of Puerto Rico, the Virgin 
                        Islands of the United States, Guam, the 
                        Northern Mariana Islands, and American Samoa, 
                        information on the increased amount under 
                        paragraph (3) and how the territory has applied 
                        such amount, including the territory's program 
                        design, expenditures, and number of individuals 
                        (and dual-eligible individuals) assisted; and
                            ``(iii) a description of the differences 
                        between how such territories are treated under 
                        part D of title XVIII and under this title 
                        compared with the treatment of the 50 States 
                        and the District of Columbia under such part 
                        and this title for different fiscal years 
                        within the period covered under the report.
                    ``(C) Recommendations.--Such report shall include 
                recommendations for improving prescription drug 
                coverage for low-income individuals in each territory 
                identified in subparagraph (B)(ii), including 
                recommendations regarding each of the following 
                alternative approaches:
                            ``(i) Adjusting the aggregate amount 
                        specified in paragraph (3)(B).
                            ``(ii) Allowing residents of the 
                        territories to be subsidy eligible individuals 
                        under section 1860D-14, notwithstanding 
                        subsection (a)(3)(F) of such section, or 
                        providing substantially equivalent low-income 
                        prescription drug subsidies to such 
                        residents.''.

                       Subtitle C--Miscellaneous

SEC. 221. REPORT ON EXCLUSION OF TERRITORIES FROM EXCHANGES.

    (a) In General.--Not later than February 1, 2018, the Secretary of 
Health and Human Services shall submit to Congress a report that 
details the adverse impacts in each territory from the practical 
exclusion of the territories from the provisions of part II of subtitle 
D of title I of the Patient Protection and Affordable Care Act insofar 
as such provisions provide for the establishment of an American Health 
Benefit Exchange or the administration of a federally facilitated 
Exchange in each State and in the District of Columbia for the purpose 
of making health insurance more affordable and accessible for 
individuals and small businesses.
    (b) Information in Report.--The report shall include information on 
the following:
            (1) An estimate of the total number of uninsured and 
        underinsured individuals residing in each territory with 
        respect to health insurance coverage.
            (2) A description of the number of health insurance issuers 
        in each territory and the health insurance plans these issuers 
        offer.
            (3) An estimate of the number of individuals residing in 
        each territory who are denied premium and cost-sharing 
        assistance that would otherwise be available to them for 
        obtaining health insurance coverage through an Exchange if they 
        resided in one of the 50 States or in the District of Columbia.
            (4) An estimate of the amount of Federal assistance 
        described in paragraph (3) that is not being made available to 
        residents of each territory.
            (5) An estimate of the number of small employers in each 
        territory that would be eligible to purchase health insurance 
        coverage through a Small Business Health Options Program (SHOP) 
        Marketplace that would operate as part of an Exchange if the 
        employers were in one of the 50 States or in the District of 
        Columbia.
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