[Congressional Record Volume 141, Number 168 (Friday, October 27, 1995)]
[Senate]
[Pages S16111-S16156]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          AMENDMENTS SUBMITTED

                                 ______



             the balanced budget reconciliation act of 1995

                                 ______



                       specter amendment no. 2985

  Mr. SPECTER proposed an amendment to the bill (S. 1357) to provide 
for reconciliation pursuant to section 105 of the concurrent resolution 
on the budget for fiscal year 1996; as follows:

       On page 539, line 16, strike all that follows through page 
     541, line 9.
                                 ______



                       specter amendment no. 2986

  Mr. SPECTER proposed an amendment to the bill S. 1357, supra, as 
follows:

       At the appropriate place in the bill, insert the following 
     new section:

     SEC.  . SENSE OF THE SENATE.

       (a) Findings.--The Senate finds that--
       (1) The current Internal Revenue Code, with its myriad 
     deductions, credits and schedules, and over 12,000 pages of 
     rules and regulations, is long overdue for a complete 
     overhaul;
       (2) It is an unacceptable waste of our nation's precious 
     resources when Americans spend an estimated 5.4 billion hours 
     every year compiling information and filling out Internal 
     Revenue Code tax forms, and in addition, spend hundreds of 
     billions of dollars every year in tax code compliance. 
     America's resources could be dedicated to far more productive 
     pursuits.
       (3) The primary goal of any tax reform must be to unleash 
     growth and remove the inefficiencies of the current tax code, 
     with a flat tax that will expand the economy by an estimated 
     $2 trillion over seven years;
       (4) Another important goal of tax reform is to achieve 
     fairness, with a single low flat tax rate for all individuals 
     and businesses and an increase in personal and dependent 
     exemptions, is preferable to the current tax code;
       (5) Simplicity is another critically important goal of tax 
     reform, and it is in the public interest to have a ten-lined 
     tax form that fits on a postcard and takes 10 minutes to fill 
     out;
       (6) The home mortgage interest deduction is an important 
     element in the financial planning of millions of American 
     families and must be retained in a limited form; and
       (7) Charitable organizations play a vital role in our 
     nation's social fabric and any tax reform package must 
     include a limited deduction for charitable contributions.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that Congress should proceed expeditiously to adopt flat tax 
     legislation which would replace the current tax code with a 
     fairer, simpler, pro-growth and deficit neutral flat tax with 
     a low, single rate and limited deductions for home mortgage 
     interest and charitable contributions.
                                 ______


                      GRASSLEY AMENDMENT NO. 2987

  (Ordered to lie on the table.)
  Mr. GRASSLEY submitted an amendment intended to be proposed by him to 
the bill S. 1357, supra, as follows:

       Before ``; and'' at the end of sec. 2111 (a)(1)(D), insert 
     the following: ``; however, the payment of burial and/or 
     funeral expenses of the individual shall be subject to 42 
     U.S.C. Sec. Sec. 1382b(a)(2)(B) and 1382b(d)''.
                                 ______


                 BAUCUS (AND OTHERS) AMENDMENT NO. 2988

  Mr. BAUCUS (for himself, Mr. Roth, Mr. Lieberman, Mr. Wellstone, Mr. 
Biden, and Mr. Lautenberg) proposed an amendment to the bill S. 1357, 
supra, as follows:

       On page 272, strike line 21 and all that follows through 
     page 293, line 22.
       On page 161, strike line 3 and all that follows through 
     page 178, line 7.
                                 ______


                ABRAHAM (AND OTHERS) AMENDMENT NO. 2989

  (Ordered to lie on the table.)
  Mr. ABRAHAM (for himself, Mr. Lieberman, Mr. DeWine, and Mr. Breaux) 
submitted an amendment intended to be proposed by them to the bill S. 
1357, supra, as follows:

       At the end of title XII, add the following new subtitle:
                 Subtitle K--Enhanced Enterprise Zones

     SEC. 12971. SHORT TITLE.

       This subtitle may be cited as the ``Enhanced Enterprise 
     Zones Act of 1995''.

     SEC. 12972. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress makes the following findings:
       (1) Many of the Nation's urban centers are places with high 
     levels of poverty, high rates of welfare dependency, high 
     crime rates, poor schools, and joblessness.
       (2) Federal tax incentives and regulatory reforms can 
     encourage economic growth, job creation and small business 
     formation in many urban centers.
       (3) Encouraging private sector investment in America's 
     economically distressed urban and rural areas is essential to 
     breaking the cycle of poverty and the related ills of crime, 
     drug abuse, illiteracy, welfare dependency, and unemployment.
       (4) The provisions creating empowerment zones that were 
     enacted in 1993 should be enhanced by providing incentives to 
     increase entrepreneurial growth, capital formation, job 
     creation, educational opportunities, and homeownership in 
     designated enterprise communities and empowerment zones.
       (b) Purpose.--The purpose of this subtitle is to increase 
     job creation, small business expansion and formation, 
     educational opportunities, and homeownership in economically 
     depressed areas by providing Federal tax incentives, 
     regulatory reforms, school reform pilot projects, and 
     homeownership incentives.

                   CHAPTER 1--FEDERAL TAX INCENTIVES

     SEC. 12973. AMENDMENTS TO SUBCHAPTER U.

       (a) In General.--Subchapter U of chapter 1 (relating to 
     designation and treatment of empowerment zones, enterprise 
     communities, and rural development investment areas) is 
     amended--
       (1) by redesignating part IV as part V,
       (2) by redesignating section 1397D as section 1397F, and
       (3) by inserting after part III the following new part:

 ``PART IV--ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES AND ENTERPRISE 
                              COMMUNITIES

``Sec. 1397D. Empowerment zone and enterprise community capital gain.
``Sec. 1397E. Empowerment zone and enterprise community stock.

     ``SEC. 1397D. EMPOWERMENT ZONE AND ENTERPRISE COMMUNITY 
                   CAPITAL GAIN.

       ``(a) General Rule.--Gross income does not include any 
     qualified capital gain recognized on the sale or exchange of 
     a qualified zone asset held for more than 5 years.
       ``(b) Qualified Zone Asset.--For purposes of this section--
       ``(1) In general.--The term `qualified zone asset' means--
       ``(A) any qualified zone stock,
       ``(B) any qualified zone business property, and
       ``(C) any qualified zone partnership interest.
       ``(2) Qualified zone stock.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `qualified zone stock' means any stock in a domestic 
     corporation if--
       ``(i) such stock is acquired by the taxpayer on original 
     issue from the corporation solely in exchange for cash,
       ``(ii) as of the time such stock was issued, such 
     corporation was an enterprise zone business (or, in the case 
     of a new corporation, such corporation was being organized 
     for purposes of being an enterprise zone business), and
       ``(iii) during substantially all of the taxpayer's holding 
     period for such stock, such corporation qualified as an 
     enterprise zone business.
       ``(B) Exclusion of stock for which deduction under section 
     1397e allowed.--The term `qualified zone stock' shall not 
     include any stock the basis of which is reduced under section 
     1397E.
       ``(C) Redemptions.--The term `qualified zone stock' shall 
     not include any stock acquired from a corporation which made 
     a substantial stock redemption or distribution (without a 
     bona fide business purpose therefor) in an attempt to avoid 
     the purposes of this section.
       ``(3) Qualified zone business property.--
       ``(A) In general.--The term `qualified zone business 
     property' means tangible property if--
       ``(i) 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 or enterprise 
     community took effect,
       ``(ii) the original use of such property in the empowerment 
     zone or enterprise community commences with the taxpayer, and
       ``(iii) during substantially all of the taxpayer's holding 
     period for such property, substantially all of the use of 
     such property was in an enterprise zone business of the 
     taxpayer.
       ``(B) Special rule for substantial improvements.--
       ``(i) In general.--The requirements of clauses (i) and (ii) 
     of subparagraph (A) shall be treated as satisfied with 
     respect to--

       ``(I) property which is substantially improved by the 
     taxpayer, and
       ``(II) any land on which such property is located.

[[Page S 16112]]


       ``(ii) Substantial improvement.--For purposes of clause 
     (i), property shall be treated as substantially improved by 
     the taxpayer if, during any 24-month period beginning after 
     the date on which the designation of the empowerment zone or 
     enterprise community 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.

       ``(C) Limitation on land.--The term `qualified zone 
     business property' shall not include land which is not an 
     integral part of an enterprise zone business.
       ``(4) Qualified zone partnership interest.--The term 
     `qualified zone partnership interest' means any interest in a 
     partnership if--
       ``(A) such interest is acquired by the taxpayer from the 
     partnership solely in exchange for cash,
       ``(B) as of the time such interest was acquired, such 
     partnership was an enterprise zone business (or, in the case 
     of a new partnership, such partnership was being organized 
     for purposes of being an enterprise zone business), and
       ``(C) during substantially all of the taxpayer's holding 
     period for such interest, such partnership qualified as an 
     enterprise zone business.
     A rule similar to the rule of paragraph (2)(C) shall apply 
     for purposes of this paragraph.
       ``(5) Treatment of subsequent purchasers.--The term 
     `qualified zone asset' includes any property which would be a 
     qualified zone asset but for paragraph (2)(A)(i), (3)(A)(ii), 
     or (4)(A) in the hands of the taxpayer if such property was a 
     qualified zone asset in the hands of all prior holders.
       ``(6) 10-year safe harbor.--If any property ceases to be a 
     qualified zone asset by reason of paragraph (2)(A)(iii), 
     (3)(A)(iii), or (4)(C) after the 10-year period beginning on 
     the date the taxpayer acquired such property, such property 
     shall continue to be treated as meeting the requirements of 
     such paragraph; except that the amount of gain to which 
     subsection (a) applies on any sale or exchange of such 
     property shall not exceed the amount which would be qualified 
     capital gain had such property been sold on the date of such 
     cessation.
       ``(7) Treatment of zone terminations.--The termination of 
     any designation of an area as an empowerment zone or 
     enterprise community shall be disregarded for purposes of 
     determining whether any property is a qualified zone asset.
       ``(c) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Qualified capital gain.--Except as otherwise provided 
     in this subsection, the term `qualified capital gain' means 
     any long-term capital gain recognized on the sale or exchange 
     of a qualified zone asset held for more than 5 years.
       ``(2) Certain gain on real property not qualified.--The 
     term `qualified capital gain' shall not include any gain 
     which would be treated as ordinary income under section 1250 
     if section 1250 applied to all depreciation rather than the 
     additional depreciation.
       ``(3) Gain attributable to periods after termination of 
     zone designation not qualified.--The term `qualified capital 
     gain' shall not include any gain attributable to periods 
     after the termination of any designation of an area as an 
     empowerment zone or enterprise community.
       ``(4) Related party transactions.--The term `qualified 
     capital gain' shall not include any gain attributable, 
     directly or indirectly, in whole or in part, to a transaction 
     with a related person.
       ``(5) Enterprise zone business.--The term `enterprise zone 
     business' has the meaning given such term by section 
     1394(b)(3), except that, in applying section 1394(b)(3), the 
     term `qualified business' shall not include any trade or 
     business of producing property of a character subject to the 
     allowance for depletion under section 611.
       ``(d) Treatment of Pass-Thru Entities.--
       ``(1) Sales and exchanges.--Gain on the sale or exchange of 
     an interest in a pass-thru entity held by the taxpayer (other 
     than an interest in an entity which was an enterprise zone 
     business during substantially all of the period the taxpayer 
     held such interest) for more than 5 years shall be treated as 
     gain described in subsection (a) to the extent such gain is 
     attributable to amounts which would be qualified capital gain 
     on qualified zone assets (determined as if such assets had 
     been sold on the date of the sale or exchange) held by such 
     entity for more than 5 years and throughout the period the 
     taxpayer held such interest. A rule similar to the rule of 
     paragraph (2)(C) shall apply for purposes of the preceding 
     sentence.
       ``(2) Income inclusions.--
       ``(A) In general.--Any amount included in income by reason 
     of holding an interest in a pass-thru entity (other than an 
     entity which was an enterprise zone business during 
     substantially all of the period the taxpayer held the 
     interest to which such inclusion relates) shall be treated as 
     gain described in subsection (a) if such amount meets the 
     requirements of subparagraph (B).
       ``(B) Requirements.--An amount meets the requirements of 
     this subparagraph if--
       ``(i) such amount is attributable to qualified capital gain 
     recognized on the sale or exchange by the pass-thru entity of 
     property which is a qualified zone asset in the hands of such 
     entity and which was held by such entity for the period 
     required under subsection (a), and
       ``(ii) 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 asset and at all times 
     thereafter before the disposition of such asset by such pass-
     thru entity.
       ``(C) Limitation based on interest originally held by 
     taxpayer.--Subparagraph (A) shall not apply to any amount to 
     the extent such amount exceeds the amount to which 
     subparagraph (A) 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 zone asset was 
     acquired.
       ``(3) 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.
       ``(e) Sales and Exchanges of Interests in Partnerships and 
     S Corporations Which Are Qualified Zone Businesses.--In the 
     case of the sale or exchange of an interest in a partnership, 
     or of stock in an S corporation, which was an enterprise zone 
     business during substantially all of the period the taxpayer 
     held such interest or stock, the amount of qualified capital 
     gain shall be determined without regard to--
       ``(1) any intangible, and any land, which is not an 
     integral part of any qualified business (as defined in 
     section 1397B(b) except that references to empowerment zones 
     shall be treated as including references to enterprise 
     communities), and
       ``(2) gain attributable to periods before the designation 
     of an area as an empowerment zone or enterprise community.
       ``(f) Certain Tax-Free and Other Transfers.--For purposes 
     of this section--
       ``(1) In general.--In the case of a transfer of a qualified 
     zone asset to which this subsection applies, the transferee 
     shall be treated as--
       ``(A) having acquired such asset in the same manner as the 
     transferor, and
       ``(B) having held such asset during any continuous period 
     immediately preceding the transfer during which it was held 
     (or treated as held under this subsection) by the transferor.
       ``(2) Transfers to which subsection applies.--This 
     subsection shall apply to any transfer--
       ``(A) by gift,
       ``(B) at death, or
       ``(C) from a partnership to a partner thereof of a 
     qualified zone asset with respect to which the requirements 
     of subsection (d)(2) are met at the time of the transfer 
     (without regard to the 5-year holding requirement).
       ``(3) Certain rules made applicable.--Rules similar to the 
     rules of section 1244(d)(2) shall apply for purposes of this 
     section.

     ``SEC. 1397E. EMPOWERMENT ZONE AND ENTERPRISE COMMUNITY 
                   STOCK.

       ``(a) General Rule.--At the election of any individual, the 
     aggregate amount paid by such taxpayer during the taxable 
     year for the purchase of enterprise zone stock on the 
     original issue of such stock by a qualified issuer shall be 
     allowed as a deduction.
       ``(b) Limitations.--
       ``(1) Ceiling.--
       ``(A) In general.--The maximum amount allowed as a 
     deduction under subsection (a) to a taxpayer shall not 
     exceed--
       ``(i) $100,000 for any taxable year, and
       ``(ii) when added to the aggregate amount allowed as a 
     deduction under this section in all prior years, $500,000.
       ``(B) Excess amounts.--If the amount otherwise deductible 
     by any person under subsection (a) exceeds the limitation 
     under--
       ``(i) subparagraph (A)(i), the amount of such excess shall 
     be treated as an amount paid in the next taxable year, and
       ``(ii) subparagraph (A), the deduction allowed for any 
     taxable year shall be allocated proportionately among the 
     enterprise zone stock purchased by such person on the basis 
     of the respective purchase prices per share.
       ``(2) Related person.--The taxpayer and members of the 
     taxpayer's family shall be treated as one person for purposes 
     of paragraph (1) and the limitations contained in such 
     paragraph shall be allocated among the taxpayer and such 
     members in accordance with their respective purchases of 
     enterprise zone stock. For purposes of this paragraph, an 
     individual's family includes only such individual's spouse 
     and minor children.
       ``(3) Partial taxable year.--If designation of an area as 
     an empowerment zone or enterprise community occurs, expires, 
     or is revoked pursuant to section 1391 on a date other than 
     the first or last day of the taxable year of the taxpayer, or 
     in the case of a short taxable year, the limitations 
     specified in paragraph (1) shall be adjusted on a pro rata 
     basis (based upon the number of days).
       ``(c) Enterprise Zone Stock.--For purposes of this 
     section--
       ``(1) In general.--The term `enterprise zone stock' means 
     stock of a corporation if--
       ``(A) such stock is acquired on original issue from the 
     corporation, and
       ``(B) such corporation is, at the time of issue, a 
     qualified enterprise zone issuer.
       ``(2) Proceeds must be invested in qualified enterprise 
     zone property.--

[[Page S 16113]]

       ``(A) In general.--Such term shall include such stock only 
     to the extent that the proceeds of such issuance are used by 
     such issuer during the 12-month period beginning on the date 
     of issuance to purchase (as defined in section 179(d)(2)) 
     qualified enterprise zone property.
       ``(B) Qualified enterprise zone property.--For purposes of 
     this section, the term `qualified enterprise zone property' 
     means property to which section 168 applies (or would apply 
     but for section 179)--
       ``(i) the original use of which commences in an empowerment 
     zone or enterprise community with the issuer, and
       ``(ii) substantially all of the use of which is in such 
     empowerment zone or enterprise community.
       ``(3) Redemptions.--The term `enterprise zone stock' shall 
     not include any stock acquired from a corporation which made 
     a substantial stock redemption or distribution (without a 
     bona fide business purpose therefor) in an attempt to avoid 
     the purposes of this section.
       ``(d) Qualified Enterprise Zone Issuer.--For purposes of 
     this section, the term `qualified enterprise zone issuer' 
     means any domestic C corporation if--
       ``(1) such corporation is a corporation described in 
     section 1397B(b) (except that in applying such section the 
     references to empowerment zones shall be treated as including 
     references to enterprise communities) or, in the case of a 
     new corporation, such corporation is being organized for 
     purposes of being such a corporation,
       ``(2) such corporation does not have more than one class of 
     stock,
       ``(3) the sum of--
       ``(A) the money,
       ``(B) the aggregate unadjusted bases of property owned by 
     such corporation, and
       ``(C) the value of property leased to the corporation (as 
     determined under regulations prescribed by the Secretary),

     does not exceed $50,000,000, and
       ``(4) more than 20 percent of the total voting power, and 
     20 percent of the total value, of the stock of such 
     corporation is owned directly by individuals or estates or 
     indirectly by individuals through partnerships or trusts.

     The determination under paragraph (3) shall be made as of the 
     time of issuance of the stock in question but shall include 
     amounts received for such stock.
       ``(e) Dispositions of Stock.--
       ``(1) Basis reduction.--For purposes of this title, the 
     basis of any enterprise zone stock shall be reduced by the 
     amount of the deduction allowed under this section with 
     respect to such stock.
       ``(2) Deduction recaptured as ordinary income.--For 
     purposes of section 1245--
       ``(A) any stock the basis of which is reduced under 
     paragraph (1) (and any other property the basis of which is 
     determined in whole or in part by reference to the adjusted 
     basis of such stock) shall be treated as section 1245 
     property, and
       ``(B) any reduction under paragraph (1) shall be treated as 
     a deduction allowed for depreciation.

     If an exchange of any stock described in paragraph (1) 
     qualifies under section 354(a), 355(a), or 356(a), the amount 
     of gain recognized under section 1245 by reason of this 
     paragraph shall not exceed the amount of gain recognized in 
     the exchange (determined without regard to this paragraph).
       ``(3) Certain events treated as dispositions.--For purposes 
     of determining the amount treated as ordinary income under 
     section 1245 by reason of paragraph (2), paragraph (3) of 
     section 1245(b) (relating to certain tax-free transactions) 
     shall not apply.
       ``(4) Interest charged if disposition within 5 years of 
     purchase.--
       ``(A) In general.--If--
       ``(i) a taxpayer disposes of any enterprise zone stock with 
     respect to which a deduction was allowed under subsection (a) 
     (or any other property the basis of which is determined in 
     whole or in part by reference to the adjusted basis of such 
     stock) before the end of the 5-year period beginning on the 
     date such stock was purchased by the taxpayer, and
       ``(ii) section 1245(a) applies to such disposition by 
     reason of paragraph (2),

     then the tax imposed by this chapter for the taxable year in 
     which such disposition occurs shall be increased by the 
     amount determined under subparagraph (B).
       ``(B) Additional amount.--For purposes of subparagraph (A), 
     the additional amount shall be equal to the amount of 
     interest (determined at the rate applicable under section 
     6621(a)(2)) that would accrue--
       ``(i) during the period beginning on the date the stock was 
     purchased by the taxpayer and ending on the date of such 
     disposition by the taxpayer, and
       ``(ii) on an amount equal to the aggregate decrease in tax 
     of the taxpayer resulting from the deduction allowed under 
     this subsection (a) with respect to such stock.
       ``(C) Special rule.--Any increase in tax under subparagraph 
     (A) shall not be treated as a tax imposed by this chapter for 
     purposes of--
       ``(i) determining the amount of any credit allowable under 
     this chapter, and
       ``(ii) determining the amount of the tax imposed by section 
     55.
       ``(f) Disqualification.--
       ``(1) Issuer ceases to qualify.--If, during the 10-year 
     period beginning on the date enterprise zone stock was 
     purchased by the taxpayer, the issuer of such stock ceases to 
     be a qualified enterprise zone issuer (determined without 
     regard to subsection (d)(3)), then notwithstanding any 
     provision of this subtitle other than paragraph (2), the 
     taxpayer shall be treated for purposes of subsection (e) as 
     disposing of such stock (and any other property the basis of 
     which is determined in whole or in part by reference to the 
     adjusted basis of such stock) during the taxable year during 
     which such cessation occurs at its fair market value as of 
     the 1st day of such taxable year.
       ``(2) Cessation of enterprise zone status not to cause 
     recapture.--A corporation shall not fail to be treated as a 
     qualified enterprise zone issuer for purposes of paragraph 
     (1) solely by reason of the termination or revocation of a 
     designation as an empowerment zone or enterprise community, 
     as the case may be.
       ``(g) Other Special Rules.--
       ``(1) Application of limits to partnerships and s 
     corporations.--In the case of a partnership or an S 
     corporation, the limitations under subsection (b) shall apply 
     at the partner and shareholder level and shall not apply at 
     the partnership or corporation level.
       ``(2) Deduction not allowed to estates and trusts.--Estates 
     and trusts shall not be treated as individuals for purposes 
     of this section.''
       (b) Additional Expensing.--Section 1397A (relating to 
     increase in expensing under section 179) is amended--
       (1) in subparagraph (A) of subsection (a)(1), by striking 
     ``$20,000'' and inserting ``$35,000'', and
       (2) by adding at the end the following new subsection:
       ``(c) Enterprise Zone Business.--For purposes of this 
     section, the term `enterprise zone business' has the meaning 
     given such term by section 1397B, except that in applying 
     such section references to empowerment zones shall be treated 
     as including references to enterprise communities.''
       (c) Technical Amendment.--Subsection (a) of section 1016 
     (relating to adjustments to basis) is amended by striking 
     ``and'' at the end of paragraph (24), by striking the period 
     at the end of paragraph (25) and inserting ``, and''; and by 
     adding at the end the following new paragraph:
       ``(26) to the extent provided in section 1397E(b), in the 
     case of stock with respect to which a deduction was allowed 
     or allowable under section 1397E(a).''
       (d) Clerical and Conforming Amendments.--
       (1) The table of parts for subchapter U is amended by 
     striking the item relating to part IV and inserting the 
     following new items:

``Part IV. Additional incentives for empowerment zones and enterprise 
              communities.
``Part V.  Regulations.''

       (2) The table of sections for part V of subchapter U of 
     chapter 1, as redesignated by subsection (a)(1), is amended 
     by redesignating the item relating to section 1397D as 
     section 1397F.
       (3) Section 1397F, as so redesignated, is amended by 
     striking ``and III'' each place it appears and inserting ``, 
     III, and IV''.
       (e) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 1995.

     SEC. 12974. COMMERCIAL REVITALIZATION TAX CREDIT.

       (a) Allowance of Credit.--Section 46 (relating to 
     investment credit) is amended by striking ``and'' at the end 
     of paragraph (2), by striking the period at the end of 
     paragraph (3) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(4) the commercial revitalization credit.''
       (b) Commercial Revitalization Credit.--Subpart E of part IV 
     of subchapter A of chapter 1 (relating to rules for computing 
     investment credit) is amended by inserting after section 48 
     the following new section:

     ``SEC. 48A. COMMERCIAL REVITALIZATION CREDIT.

       ``(a) General Rule.--For purposes of section 46, except as 
     provided in subsection (e), the commercial revitalization 
     credit for any taxable year is an amount equal to the 
     applicable percentage of the qualified revitalization 
     expenditures with respect to any qualified revitalization 
     building.
       ``(b) Applicable Percentage.--For purposes of this 
     section--
       ``(1) In general.--The term `applicable percentage' means--
       ``(A) 20 percent, or
       ``(B) at the election of the taxpayer, 5 percent for each 
     taxable year in the credit period.
     The election under subparagraph (B), once made, shall be 
     irrevocable.
       ``(2) Credit period.--
       ``(A) In general.--The term `credit period' means, with 
     respect to any building, the period of 10 taxable years 
     beginning with the taxable year in which the building is 
     placed in service.
       ``(B) Applicable rules.--Rules similar to the rules under 
     paragraphs (2) and (4) of section 42(f) shall apply.
       ``(c) Qualified Revitalization Buildings and 
     Expenditures.--For purposes of this section--
       ``(1) Qualified revitalization building.--The term 
     `qualified revitalization building' means any building (and 
     its structural components) if--
       ``(A) such building is located in an eligible commercial 
     revitalization area, 

[[Page S 16114]]

       ``(B) a commercial revitalization credit amount is 
     allocated to the building under subsection (e), and
       ``(C) depreciation (or amortization in lieu of 
     depreciation) is allowable with respect to the building.
       ``(2) Qualified rehabilitation expenditure.--
       ``(A) In general.--The term `qualified rehabilitation 
     expenditure' means any amount properly chargeable to capital 
     account--
       ``(i) for property for which depreciation is allowable 
     under section 168 and which is--

       ``(I) nonresidential real property, or
       ``(II) an addition or improvement to property described in 
     subclause (I),

       ``(ii) in connection with the construction or substantial 
     rehabilitation or reconstruction of a qualified 
     revitalization building, and
       ``(iii) for the acquisition of land in connection with the 
     qualified revitalization building.
       ``(B) Dollar limitation.--The aggregate amount which may be 
     treated as qualified revitalization expenditures with respect 
     to any qualified revitalization building for any taxable year 
     shall not exceed $10,000,000, reduced by any such 
     expenditures with respect to the building taken into account 
     by the taxpayer or any predecessor in determining the amount 
     of the credit under this section for all preceding taxable 
     years.
       ``(C) Certain expenditures not included.--The term 
     `qualified revitalization expenditure' does not include--
       ``(i) Straight line depreciation must be used.--Any 
     expenditure (other than with respect to land acquisitions) 
     with respect to which the taxpayer does not use the straight 
     line method over a recovery period determined under 
     subsection (c) or (g) of section 168. The preceding sentence 
     shall not apply to any expenditure to the extent the 
     alternative depreciation system of section 168(g) applies to 
     such expenditure by reason of subparagraph (B) or (C) of 
     section 168(g)(1).
       ``(ii) Acquisition costs.--The costs of acquiring any 
     building or interest therein and any land in connection with 
     such building to the extent that such costs exceed 30 percent 
     of the qualified revitalization expenditures determined 
     without regard to this clause.
       ``(iii) Other credits.--Any expenditure which the taxpayer 
     may take into account in computing any other credit allowable 
     under this part unless the taxpayer elects to take the 
     expenditure into account only for purposes of this section.
       ``(3) Eligible commercial revitalization area.--The term 
     `eligible commercial revitalization area' means an 
     empowerment zone or enterprise community designated under 
     subchapter U.
       ``(4) Substantial rehabilitation or reconstruction.--For 
     purposes of this subsection, a rehabilitation or 
     reconstruction shall be treated as a substantial 
     rehabilitation or reconstruction only if the qualified 
     revitalization expenditures in connection with the 
     rehabilitation or reconstruction exceed 25 percent of the 
     fair market value of the building (and its structural 
     components) immediately before the rehabilitation or 
     reconstruction.
       ``(d) When Expenditures Taken Into Account.--
       ``(1) In general.--Qualified revitalization expenditures 
     with respect to any qualified revitalization building shall 
     be taken into account for the taxable year in which the 
     qualified rehabilitated building is placed in service. For 
     purposes of the preceding sentence, a substantial 
     rehabilitation or reconstruction of a building shall be 
     treated as a separate building.
       ``(2) Progress expenditure payments.--Rules similar to the 
     rules of subsections (b)(2) and (d) of section 47 shall apply 
     for purposes of this section.
       ``(e) Limitation on Aggregate Credits Allowable With 
     Respect to Buildings Located in a State.--
       ``(1) In general.--The amount of the credit determined 
     under this section for any taxable year with respect to any 
     building shall not exceed the commercial revitalization 
     credit amount (in the case of an amount determined under 
     subsection (b)(1)(B), the present value of such amount as 
     determined under the rules of section 42(b)(2)(C)) allocated 
     to such building under this subsection by the commercial 
     revitalization credit agency. Such allocation shall be made 
     at the same time and in the same manner as under paragraphs 
     (1) and (7) of section 42(h).
       ``(2) Commercial revitalization credit amount for 
     agencies.--
       ``(A) In general.--The aggregate commercial revitalization 
     credit amount which a commercial revitalization credit agency 
     may allocate for any calendar year is the amount of the State 
     commercial revitalization credit ceiling determined under 
     this paragraph for such calendar year for such agency.
       ``(B) State commercial revitalization credit ceiling.--
       ``(i) In general.--The State commercial revitalization 
     credit ceiling applicable to any State for any calendar year 
     is $2,000,000 for each empowerment zone and enterprise 
     community in the State designated under subchapter U.
       ``(ii) Special rule where zone or community located in more 
     than 1 state.--If an empowerment zone or enterprise community 
     is located in more than 1 State, a State's share of the 
     amount specified in clause (i) with respect to such zone or 
     community shall be an amount that bears the same ratio to 
     $2,000,000 as the population in the State bears to the 
     population in all States in which such zone or community is 
     located.
       ``(iii) Other special rules.--Rules similar to the rules of 
     subparagraphs (D), (E), (F), and (G) of section 42(h)(3) 
     shall apply for purposes of this subsection.
       ``(C) Commercial revitalization credit agency.--For 
     purposes of this section, the term `commercial revitalization 
     credit agency' means any agency authorized by a State to 
     carry out this section.
       ``(f) Responsibilities of Commercial Revitalization Credit 
     Agencies.--
       ``(1) Plans for allocation.--Notwithstanding any other 
     provision of this section, the commercial revitalization 
     credit dollar amount with respect to any building shall be 
     zero unless--
       ``(A) such amount was allocated pursuant to a qualified 
     allocation plan of the commercial revitalization credit 
     agency which is approved by the governmental unit (in 
     accordance with rules similar to the rules of section 
     147(f)(2) (other than subparagraph (B)(ii) thereof)) of which 
     such agency is a part, and
       ``(B) such agency notifies the chief executive officer (or 
     its equivalent) of the local jurisdiction within which the 
     building is located of such project and provides such 
     individual a reasonable opportunity to comment on the 
     project.
       ``(2) Qualified allocation plan.--For purposes of this 
     subsection, the term `qualified allocation plan' means any 
     plan--
       ``(A) which sets forth selection criteria to be used to 
     determine priorities of the commercial revitalization credit 
     agency which are appropriate to local conditions,
       ``(B) which considers--
       ``(i) the degree to which a project contributes to the 
     implementation of a strategic plan that is devised for an 
     eligible commercial revitalization area through a citizen 
     participation process,
       ``(ii) the amount of any increase in permanent, full-time 
     employment by reason of any project, and
       ``(iii) the active involvement of residents and nonprofit 
     groups within the eligible commercial revitalization area, 
     and
       ``(C) which provides a procedure that the agency (or its 
     agent) will follow in monitoring for compliance with this 
     section.
       ``(g) Termination.--This section shall not apply to any 
     building placed in service after December 31, 2000.''
       (c) Conforming Amendments.--
       (1) Section 39(d) is amended by adding at the end the 
     following new paragraph:
       ``(7) No carryback of section 48a credit before 
     enactment.--No portion of the unused business credit for any 
     taxable year which is attributable to any commercial 
     revitalization credit determined under section 48A may be 
     carried back to a taxable year ending before the date of the 
     enactment of section 48A.''
       (2) Subparagraph (B) of section 48(a)(2) is amended by 
     inserting ``or commercial revitalization'' after 
     ``rehabilitation'' each place it appears in the text and 
     heading thereof.
       (3) Subparagraph (C) of section 49(a)(1) is amended by 
     striking ``and'' at the end of clause (ii), by striking the 
     period at the end of clause (iii) and inserting ``, and'', 
     and by adding at the end the following new clause:
       ``(iv) the basis of any qualified revitalization building 
     attributable to qualified revitalization expenditures.''
       (4) Paragraph (2) of section 50(a) is amended by inserting 
     ``or 48A(d)(2)'' after ``section 47(d)'' each place it 
     appears.
       (5) Subparagraph (B) of section 50(a)(2) is amended by 
     adding at the end the following new sentence: ``A similar 
     rule shall apply for purposes of section 48A.''
       (6) Paragraph (2) of section 50(b) is amended by striking 
     ``and'' at the end of subparagraph (C), by striking the 
     period at the end of subparagraph (D) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(E) a qualified revitalization building to the extent of 
     the portion of the basis which is attributable to qualified 
     revitalization expenditures.''
       (7) Subparagraph (C) of section 50(b)(4) is amended by 
     inserting ``or commercial revitalization'' after 
     ``rehabilitated'' each place it appears in the text or 
     heading thereof.
       (8) Subparagraph (C) of section 469(i)(3) is amended--
       (A) by inserting ``or section 48A'' after ``section 42''; 
     and
       (B) by striking ``credit'' in the heading and inserting 
     ``and commercial revitalization credits''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     1995.

                   CHAPTER 2--REGULATORY FLEXIBILITY

     SEC. 12975. DEFINITION OF SMALL ENTITIES IN EMPOWERMENT ZONES 
                   AND ENTERPRISE COMMUNITIES FOR ANALYSIS OF 
                   REGULATORY FUNCTIONS.

       Section 601 of title 5, United States Code, is amended--
       (1) by striking ``and'' at the end of paragraph (5); and
       (2) by striking paragraph (6) and inserting the following:
       ``(6) the term `small entity' means--
       ``(A) a small business, small organization, or small 
     governmental jurisdiction defined in paragraphs (3), (4), and 
     (5) of this section; and
       ``(B)(i) any enterprise zone business (as defined by 
     section 1394(b)(3) of the Internal Revenue Code of 1986);
       ``(ii) any unit of government that nominated an area which 
     the appropriate Secretary designates as an empowerment zone 

[[Page S 16115]]
     or enterprise community (within the meaning of section 1391 of the 
     Internal Revenue Code of 1986) that has a rule pertaining to 
     the carrying out of any project, activity, or undertaking 
     within such zone or community; and
       ``(iii) any not-for-profit enterprise carrying out a 
     significant portion of its activities within such a zone or 
     community.

     For purposes of subparagraph (B)(ii), the term `appropriate 
     Secretary' has the meaning given such term by section 
     1393(a)(1) of the Internal Revenue Code of 1986.''

     SEC. 12976. WAIVER OR MODIFICATION OF AGENCY RULES IN 
                   EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES.

       (a) In General.--Chapter 6 of title 5, United States Code, 
     is amended by adding after section 612 the following new 
     section:

     ``Sec. 613. Waiver or modification of agency rules in 
       empowerment zones and enterprise communities

       ``(a) Upon the written request of any government which 
     nominated an area that the appropriate Secretary has 
     designated as an empowerment zone or enterprise community 
     under section 1391 of the Internal Revenue Code of 1986, an 
     agency is authorized, in order to further the job creation, 
     community development, or economic revitalization objectives 
     with respect to such zone or community, to waive or modify 
     all or part of any rule which such agency has authority to 
     promulgate, as such rule pertains to the carrying out of 
     projects, activities, or undertakings within such zone or 
     community.
       ``(b) Nothing in this section shall authorize an agency to 
     waive or modify any rule adopted to carry out a statute or 
     Executive order which prohibits, or the purpose of which is 
     to protect persons against, discrimination on the basis of 
     race, color, religion, sex, familial status, national origin, 
     age, or handicap.
       ``(c) A request under subsection (a) shall specify the rule 
     or rules to be waived or modified and the change proposed, 
     and shall briefly describe why the change would promote the 
     achievement of the job creation, community development, or 
     economic revitalization objectives of the empowerment zone or 
     enterprise community. If such a request is made to any agency 
     other than the Department of Housing and Urban Development or 
     the Department of Agriculture, the requesting government 
     shall send a copy of the request to the Secretary of Housing 
     and Urban Development or to the Secretary of Agriculture, 
     whichever is appropriate, at the time the request is made.
       ``(d) Any petition for a modification or waiver shall--
       ``(i) identify the requirements for which the modification 
     or waiver is sought;
       ``(ii) identify the existing or proposed business or type 
     of business to which the modification or waiver would 
     pertain;
       ``(iii) demonstrate that the public interest which the 
     proposed change would serve in furthering such job creation, 
     community development, or economic revitalization outweighs 
     the public interest which continuation of the rule unchanged 
     would serve;
       ``(iv) demonstrate the extent to which the proposed change 
     is likely to further job creation, community development, or 
     economic revitalization within the empowerment zone or 
     enterprise community against the effect the change is likely 
     to have on the underlying purposes of applicable statutes in 
     the geographic area which would be affected by the change; 
     and
       ``(v) demonstrate that the waiver or modification is 
     necessary because the existing rule impedes the 
     implementation of an existing or proposed business or type of 
     business that furthers job creation, community development, 
     or economic revitalization.
       ``(e) The agency may approve, in its discretion, a petition 
     upon determining that the petition meets the above-stated 
     criteria. The agency shall not approve any request to waive 
     or modify a rule if that waiver or modification would--
       ``(1) violate a statutory requirement (including any 
     requirements of the Fair Labor Standards Act of 1938 (52 
     Stat. 1060; 29 U.S.C. 201 et seq.)); or
       ``(2) be likely to present a significant risk to the public 
     health, including environmental or occupational health or 
     safety or of environmental pollution.
       ``(f) A modified rule shall be enforceable as if it were 
     the issuance of an amendment to the rule being modified or 
     waived.
       ``(g) If a request is disapproved, the agency shall inform 
     all the requesting governments, and the appropriate Secretary 
     (as defined in section 1393(a)(1) of the Internal Revenue 
     Code of 1986), in writing of the reasons therefor and shall, 
     to the maximum extent possible, work with such governments to 
     develop an alternative, consistent with the standards 
     contained in subsection (d).
       ``(h) No later than the date on which the petitioner 
     submits the petition to the agency, the petitioner shall 
     inform the public of the submission of such petition 
     (including a brief description of the petition) through 
     publication of a notice in newspapers of general circulation 
     in the area in which the facility is located. The agency may 
     authorize or require petitioners to use additional or 
     alternative means of informing the public of the submission 
     of such petitions. If the agency proposes to grant the 
     petitions, the agency shall provide public notice and 
     opportunity to comment. The agency shall publish a notice in 
     the Federal Register stating any waiver or modification of a 
     rule under this section, the time such waiver or modification 
     takes effect and its duration, and the scope of the 
     applicability of such waiver or modification, consistent with 
     the Administrative Procedure Act requirements.
       ``(i) In the event that an agency proposes to amend a rule 
     for which a waiver or modification under this section is in 
     effect, the agency shall not change the waiver or 
     modification to impose additional requirements unless it 
     determines, consistent with standards contained in subsection 
     (d), that such action is necessary. Such determinations shall 
     be published with the proposal to amend such rule.
       ``(j) No waiver or modification of a rule under this 
     section shall remain in effect with respect to an empowerment 
     zone or enterprise community after the zone or community 
     designation has expired or has been revoked.
       ``(k) For purposes of this section, the term `rule' means--
       ``(1) any rule as defined in section 551(4) of this title, 
     or
       ``(2) any rulemaking conducted on the record after 
     opportunity for an agency hearing pursuant to sections 556 
     and 557 of this title.''
       (b) Clerical Amendment.--The analysis for chapter 6 of 
     title 5, United States Code, is amended by inserting after 
     the item relating to section 612, the following new item:

``613. Waiver or modification of agency rules in empowerment zones and 
              enterprise communities.''

       (c) Conforming Amendments.--
       (1) Section 601(2) of such title 5 is amended by inserting 
     ``(except for purposes of section 613)'' before ``means''.
       (2) Section 612 of such title 5 is amended--
       (A) in subsection (a), by inserting ``(except section 
     613)'' after ``chapter''; and
       (B) in subsection (b), by inserting ``as defined in section 
     601(2)'' before the period at the end of the first sentence.

      CHAPTER 3--RESIDENT MANAGEMENT AND HOMEOWNERSHIP INCENTIVES

     SEC. 12977. ENTERPRISE ZONE OPPORTUNITY GRANTS.

       (a) In General.--Section 186 of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 12898a) is amended by 
     striking the section designation and the section heading and 
     inserting the following:

     ``SEC. 186. ENTERPRISE ZONE GRANTS.''

       (b) Statement of Purpose.--Section 186(a) of the Housing 
     and Community Development Act of 1992 (42 U.S.C. 12898a(a)) 
     is amended--
       (1) in paragraph (2), by striking ``and'' at the end;
       (2) in paragraph (3)--
       (A) by striking ``federally approved and equivalent State-
     approved''; and
       (B) by striking the period at the end and inserting ``; 
     and''; and
       (3) by adding at the end the following new paragraph:
       ``(4) to encourage the development of resident management 
     corporations and resident councils in enterprise zones.''
       (c) Definitions.--Section 186(b) of the Housing and 
     Community Development Act of 1992 (42 U.S.C. 12898a(b)) is 
     amended by adding at the end the following new paragraphs:
       ``(7) Enterprise zone.--The term `enterprise zone' means an 
     area designated as an enterprise community or an empowerment 
     zone under section 1391 of the Internal Revenue Code of 1986.
       ``(8) Resident management corporation.--The term `resident 
     management corporation' has the same meaning as in section 
     24(h) of the United States Housing Act of 1937.''
       (d) Assistance to Nonprofit Organizations.--Section 
     186(c)(1) of the Housing and Community Development Act of 
     1992 (42 U.S.C. 12898a(c)(1)) is amended to read as follows:
       ``(1) In general.--In carrying out this section, the 
     Secretary may make grants to nonprofit organizations--
       ``(A) to carry out enterprise zone homeownership 
     opportunity programs to promote homeownership in enterprise 
     zones in accordance with this section; and
       ``(B) to promote the development of resident management 
     corporations in enterprise zones.''
       (e) Eligible Uses of Assistance.--Section 186(d) of the 
     Housing and Community Development Act of 1992 (42 U.S.C. 
     12898a(d)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``assistance to provide'' and inserting the 
     following: ``assistance to--
       ``(A) provide'';
       (B) by striking the period at the end and inserting ``; 
     and''; and
       (C) by adding at the end the following:
       ``(B) to promote the development of resident management 
     corporations in enterprise zones.''; and
       (2) in paragraph (2), by striking ``under this subsection'' 
     and inserting ``under paragraph (1)(A)''.
       (f) Program Requirements.--Section 186(e) of the Housing 
     and Community Development Act of 1992 (42 U.S.C. 12898a(e)) 
     is amended--
       (1) in paragraph (2), by striking ``under this section'' 
     and inserting ``under subsection (d)(1)(A)''; and
       (2) in paragraph (3), by striking ``federally approved or 
     State-approved''.
       (g) Terms and Conditions of Assistance.--Section 186(f)(2) 
     of the Housing and Community Development Act of 1992 (42 
     U.S.C. 12898a(f)(2)) is amended by striking ``under this 
     section'' and inserting ``under subsection (c)(1)(A)''.
       (h) Program Selection Criteria.--Section 186(g)(1) of the 
     Housing and Community Development Act of 1992 (42 U.S.C. 
     12898a(g)(1)) 

[[Page S 16116]]
     is amended by striking ``under this section'' and inserting ``under 
     subsection (d)(1)(A)''.
       (i) Authorization of Appropriations.--Section 186(i) of the 
     Housing and Community Development Act of 1992 (42 U.S.C. 
     12898a(i)) is amended to read as follows:
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section--
       ``(1) $100,000,000 for fiscal year 1997; and
       ``(2) such sums as may be necessary for each of fiscal 
     years 1998, 1999, and 2000.''

               CHAPTER 4--MODIFICATION OF CPI CALCULATION

     SEC. 12978. MODIFICATION OF CPI CALCULATION.

       (a) In General.--Notwithstanding any other provision of 
     law, with respect to calculations made after December 31, 
     1995, the Bureau of Labor Statistics of the Department of 
     Labor shall reduce the annual percentage change in the 
     Consumer Price Indexes, as determined without regard to this 
     section, by .05 percentage point.
       (b) Exception.--The reduction described in subsection (a) 
     shall not apply for purposes of calculating the cost-of-
     living increases under the old-age, survivors, and disability 
     insurance program established under title II of the Social 
     Security Act (42 U.S.C. 401 et seq.).
                                 ______


                 SIMON (AND OTHERS) AMENDMENT NO. 2990

  (Ordered to lie on the table.)
  Mr. SIMON (for himself, Mr. Stevens, and Mr. Breaux) submitted an 
amendment intended to be proposed by them to the bill S. 1357, supra as 
follows:

       On page 1771, line 25, strike ``1995'' and insert ``1997''.
       On page 1772, line 3, strike ``1995'' and insert ``1997''.
                                 ______


                       BAUCUS AMENDMENT NO. 2991

  Mr. BAUCUS proposed an amendment to the bill S. 1357, supra as 
follows:

       On page 1469, strike lines 8 through 11, and insert the 
     following:
       ``(a) Allowance of Credit.--
       ``(1) In general.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to the applicable amount multiplied by the 
     number of qualifying children of the taxpayer.
       ``(2) Applicable amount.--For purposes of paragraph (1), 
     the applicable amount shall be determined in the following 
     table:

                                                             Applicable
``Taxable year:                                                 Amount:
    1996...........................................................$400
    1997............................................................450
    1998 and thereafter............................................500.

       On page 1470, line 7, strike ``$110,000'' and insert 
     ``$90,000''.
       On page 1470, line 9, strike ``$75,000'' and insert 
     ``$55,000''.
       On page 1470, line 11, strike ``$55,000'' and insert 
     ``$45,000''.
       On page 1472, strike the table between lines 10 and 11, and 
     insert the following:

``For taxable years                                                    
  beginning in                                           The applicable
  calendar year--                                    dollar amount is--
    1996.........................................................$6,700
    1997..........................................................7,050
    1998..........................................................7,400
    1999..........................................................7,850
    2000..........................................................8,100
    2001..........................................................8,500
    2002..........................................................9,000
    2003..........................................................9,400
    2004..........................................................9,850
    2005 and thereafter.......................................10,800.''

       On page 1530, strike lines 2 through 5, and insert the 
     following:
       ``(a) General Rule.--If for any taxable year a taxpayer 
     other than a corporation has a net capital gain, 50 percent 
     of the first $100,000 of such gain shall be a deduction from 
     gross income.
       On page 1547, beginning on line 20, strike all through page 
     1550, line 12.
       On page 1551, beginning on line 4, strike all through page 
     1553, line 10.
       On page 1867, after line 20, insert the following:

     SEC. 12879. DEPOSIT ADDITIONAL REVENUES IN MEDICARE TRUST 
                   FUNDS.

       There is hereby authorized to be appropriated and is 
     appropriated for each fiscal year an amount equal to the 
     increase in revenues for such year as estimated by the 
     Secretary of the Treasury resulting from the amendments made 
     by amendment no. ------, offered on October ----, 1995, with 
     respect to the Balanced Budget Reconciliation Act of 1995 to 
     be deposited in the Federal Hospital Insurance Trust Fund and 
     the Federal Supplementary Medical Insurance Trust Fund in 
     amounts which bear the same ratio as the balances in each 
     Trust Fund.
                                 ______


                  REID (AND OTHERS) AMENDMENT NO. 2992

  Mr. EXON (for Mr. Reid for himself, Mr. Bryan, Mr. Bumpers, and Mr. 
Craig) proposed on amendment to the bill S. 1357, supra, as follows:

       At the end of subchapter E of chapter 1 of subtitle J of 
     title XII, insert the following new section:

     SEC.  . LIMITATION ON STATE INCOME TAXATION OF CERTAIN 
                   PENSION INCOME.

       (a) In General.--Chapter 4 of title 4, United States Code, 
     is amended by adding at the end the following:

     Sec. 114. Limitation on State income taxation of certain 
       pension income

       ``(a) No State may impose an income tax on any retirement 
     income of an individual who is not a resident or domiciliary 
     of such State (as determined under the laws of such State).
       ``(b) For purposes of this section--
       ``(1) The term `retirement income' means any income from--
       ``(A) a qualified trust under section 401(a) of the 
     Internal Revenue Code of 1986 that is exempt under section 
     501(a) from taxation;
       ``(B) a simplified employee pension as defined in section 
     408(k) of such Code;
       ``(C) an annuity plan described in section 403(a) of such 
     Code;
       ``(D) an annuity contract described in section 403(b) of 
     such Code;
       ``(E) an individual retirement plan described in section 
     7701(a)(37) of such Code;
       ``(F) an eligible deferred compensation plan (as defined in 
     section 457 of such Code);
       ``(G) a governmental plan (as defined in section 414(d) of 
     such Code);
       ``(H) a trust described in section 501(c)(18) of such Code; 
     or
       ``(I) any plan, program, or arrangement described in 
     section 3121(v)(2)(C) of such Code, if such income is part of 
     a series of substantially equal periodic payments (not less 
     frequently than annually) made for--
       ``(i) the life or life expectancy of the recipient (or the 
     joint lives or joint life expectancies of the recipient and 
     the designated beneficiary of the recipient), or
       ``(ii) a period of not less than 10 years.
     Such term includes any retired or retainer pay of a member or 
     former member of a uniform service computed under chapter 71 
     of title 10, United States Code.
       ``(2) The term `income tax' has the meaning given such term 
     by section 110(c).
       ``(3) The term `State' includes any political subdivision 
     of a State, the District of Columbia, and the possessions of 
     the United States.
       ``(c) Nothing in this section shall be construed as having 
     any effect on the application of section 514 of the Employee 
     Retirement Income Security Act of 1974.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 4 of title 4, United States Code, is amended by 
     adding at the end the following:

``114. Limitation on State income taxation of certain pension income''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts received after December 31, 1994.
                                 ______


                       D'AMATO AMENDMENT NO. 2993

  Mr. DOMENICI (for Mr. D'Amato) proposed an amendment to the bill S. 
1357, supra, as follows:

       On page 183, between lines 17 and 18, insert the following:
       (C) Exemption for certain newly chartered institutions.--
       (i) In general.--In addition to the institutions exempted 
     from paying the special assessment under subparagraph (A), 
     the Board of Directors shall, by order, exempt any insured 
     depository institution from payment of the special assessment 
     if the institution was in existence on October 1, 1995, and 
     held no Savings Association Insurance Fund insured deposits 
     prior to January 1, 1993.
       (ii) Definition.--For purposes of this subparagraph, an 
     institution shall be deemed to have held Savings Association 
     Insurance Fund insured deposits prior to January 1, 1993, if 
     it directly held Savings Association Insurance Fund insured 
     deposits prior to that date, or it succeeded to, acquired, 
     purchased, or otherwise holds any Savings Association 
     Insurance Fund insured deposits as of the date of enactment 
     of this Act that were Savings Association Insurance Fund 
     insured prior to January 1, 1993.
       On page 183, line 18, strike ``(C)'' and insert ``(D)''.
       On page 199, line 9, insert ``and subsection (e)'' after 
     ``subsection''.
       On page 199, between lines 11 and 12, insert the following:
       (e) Other Technical and Conforming Amendments.--
       (1) Section 5136 of the revised statutes.--Paragraph 
     Eleventh of section 5136 of the Revised Statutes (12 U.S.C. 
     24) is amended in the fifth sentence by striking ``affected 
     deposit insurance fund'' and inserting ``Deposit Insurance 
     Fund''.
       (2) Investments promoting public welfare; limitations on 
     aggregate investments.--The 23d undesignated paragraph of 
     section 9 of the Federal Reserve Act (12 U.S.C. 338a) is 
     amended in the fourth sentence, by striking ``affected 
     deposit insurance fund'' and inserting ``Deposit Insurance 
     Fund''.
       (3) Advances to critically undercapitalized depository 
     institutions.--Section 10B(b)(3)(A)(ii) of the Federal 
     Reserve Act (12 U.S.C. 347b(b)(3)(A)(ii)) is amended by 
     striking ``any deposit insurance fund in'' and inserting 
     ``the Deposit Insurance Fund of''.
       (4) Amendments to the balanced budget and emergency deficit 
     control act of 1985.--Section 255(g)(1)(A) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
     905(g)(1)(A)) is amended--

[[Page S 16117]]

       (A) by striking ``Bank Insurance Fund'' and inserting 
     ``Deposit Insurance Fund''; and
       (B) by striking ``Federal Deposit Insurance Corporation, 
     Savings Association Insurance Fund;''.
       (5) Amendments to the federal home loan bank act.--The 
     Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is 
     amended--
       (A) in section 11(k) (12 U.S.C. 1431(k))--
       (i) in the subsection heading, by striking ``SAIF'' and 
     inserting ``the Deposit Insurance Fund''; and
       (ii) by striking ``Savings Association Insurance Fund'' 
     each place such term appears and inserting ``Deposit 
     Insurance Fund'';
       (B) in section 21A(b)(4)(B) (12 U.S.C. 1441a(b)(4)(B)), by 
     striking ``affected deposit insurance fund'' and inserting 
     ``Deposit Insurance Fund'';
       (C) in section 21A(b)(6)(B) (12 U.S.C. 1441a(b)(6)(B))--
       (i) in the subparagraph heading, by striking ``SAIF-insured 
     banks'' and inserting ``Charter conversions''; and
       (ii) by striking ``Savings Association Insurance Fund 
     member'' and inserting ``savings association'';
       (D) in section 21A(b)(10)(A)(iv)(II) (12 U.S.C. 
     1441a(b)(10)(A)(iv)(II)), by striking ``Savings Association 
     Insurance Fund'' and inserting ``Deposit Insurance Fund'';
       (E) in section 21B(e) (12 U.S.C. 1441b(e))--
       (i) in paragraph (5), by inserting ``as of the date of 
     funding'' after ``Savings Association Insurance Fund 
     members'' each place such term appears;
       (ii) by striking paragraph (7); and
       (iii) by redesignating paragraph (8) as paragraph (7); and
       (F) in section 21B(k) (12 U.S.C. 1441b(k))--
       (i) by striking paragraph (8); and
       (ii) by redesignating paragraphs (9) and (10) as paragraphs 
     (8) and (9), respectively.
       (6) Amendments to the home owners' loan act.--The Home 
     Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended--
       (A) in section 5 (12 U.S.C. 1464)--
       (i) in subsection (c)(5)(A), by striking ``that is a member 
     of the Bank Insurance Fund'';
       (ii) in subsection (c)(6), by striking ``As used in this 
     subsection--'' and inserting ``For purposes of this 
     subsection, the following definitions shall apply:'';
       (iii) in subsection (o)(1), by striking ``that is a Bank 
     Insurance Fund member'';
       (iv) in subsection (o)(2)(A), by striking ``a Bank 
     Insurance Fund member until such time as it changes its 
     status to a Savings Association Insurance Fund member'' and 
     inserting ``insured by the Deposit Insurance Fund'';
       (v) in subsection (t)(5)(D)(iii)(II), by striking 
     ``affected deposit insurance fund'' and inserting ``Deposit 
     Insurance Fund'';
       (vi) in subsection (t)(7)(C)(i)(I), by striking ``affected 
     deposit insurance fund'' and inserting ``Deposit Insurance 
     Fund''; and
       (vii) in subsection (v)(2)(A)(i), by striking ``, the 
     Savings Association Insurance Fund'' and inserting ``or the 
     Deposit Insurance Fund''; and
       (B) in section 10 (12 U.S.C. 1467a)--
       (i) in subsection (e)(1)(A)(iii)(VII), by adding ``or'' at 
     the end;
       (ii) in subsection (e)(1)(A)(iv), by adding ``and'' at the 
     end;
       (iii) in subsection (e)(1)(B), by striking ``Savings 
     Association Insurance Fund or Bank Insurance Fund'' and 
     inserting ``Deposit Insurance Fund'';
       (iv) in subsection (e)(2), by striking ``Savings 
     Association Insurance Fund or the Bank Insurance Fund'' and 
     inserting ``Deposit Insurance Fund''; and
       (v) in subsection (m)(3), by striking subparagraph (E), and 
     by redesignating subparagraphs (F), (G), and (H) as 
     subparagraphs (E), (F), and (G), respectively.
       (7) Amendments to the national housing act.--The National 
     Housing Act (12 U.S.C. 1701 et seq.) is amended--
       (A) in section 317(b)(1)(B) (12 U.S.C. 1723i(b)(1)(B)), by 
     striking ``Bank Insurance Fund for banks or through the 
     Savings Association Insurance Fund for savings associations'' 
     and inserting ``Deposit Insurance Fund''; and
       (B) in section 526(b)(1)(B)(ii) (12 U.S.C. 1735f-
     14(b)(1)(B)(ii)), by striking ``Bank Insurance Fund for banks 
     and through the Savings Association Insurance Fund for 
     savings associations'' and inserting ``Deposit Insurance 
     Fund''.
       (8) Amendments to the federal deposit insurance act.--The 
     Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
     amended--
       (A) in section 3(a)(1) (12 U.S.C. 1813(a)(1)), by striking 
     subparagraph (B) and inserting the following:
       ``(B) includes any former savings association.'';
       (B) in section 5(b)(5) (12 U.S.C. 1815(b)(5)), by striking 
     ``the Bank Insurance Fund or the Savings Association 
     Insurance Fund;'' and inserting ``Deposit Insurance Fund,'';
       (C) in section 5(d) (12 U.S.C. 1815(d)), by striking 
     paragraphs (2) and (3);
       (D) in section 5(d)(1) (12 U.S.C. 1815(d)(1))--
       (i) in subparagraph (A), by striking ``reserve ratios in 
     the Bank Insurance Fund and the Savings Association Insurance 
     Fund'' and inserting ``the reserve ratio of the Deposit 
     Insurance Fund'';
       (ii) by striking subparagraph (B) and inserting the 
     following:
       ``(2) Fee credited to the deposit insurance fund.--The fee 
     paid by the depository institution under paragraph (1) shall 
     be credited to the Deposit Insurance Fund.'';
       (iii) by striking ``(1) Uninsured institutions.--''; and
       (iv) by redesignating subparagraphs (A) and (C) as 
     paragraphs (1) and (3), respectively and moving the margins 2 
     ems to the left;
       (E) in section 5(e) (12 U.S.C. 1815(e))--
       (i) in paragraph (5)(A), by striking ``Bank Insurance Fund 
     or the Savings Association Insurance Fund'' and inserting 
     ``Deposit Insurance Fund'';
       (ii) by striking paragraph (6); and
       (iii) by redesignating paragraphs (7), (8), and (9) as 
     paragraphs (6), (7), and (8), respectively;
       (F) in section 6(5) (12 U.S.C. 1816(5)), by striking ``Bank 
     Insurance Fund or the Savings Association Insurance Fund'' 
     and inserting ``Deposit Insurance Fund'';
       (G) in section 7(b) (12 U.S.C. 1817(b))--
       (i) in paragraph (1)(D), by striking ``each deposit 
     insurance fund'' and inserting ``the Deposit Insurance 
     Fund'';
       (ii) in clauses (i)(I) and (iv) of paragraph (2)(A), by 
     striking ``each deposit insurance fund'' each place such term 
     appears and inserting ``the Deposit Insurance Fund'';
       (iii) in paragraph (2)(A)(iii), by striking ``a deposit 
     insurance fund'' and inserting ``the Deposit Insurance 
     Fund'';
       (iv) in paragraph (2)(D) (as redesignated by section 
     3001(d)(3)(F)(ii)(IV) of this Act)--

       (I) by striking ``any deposit insurance fund'' and 
     inserting ``the Deposit Insurance Fund''; and
       (II) by striking ``that fund'' each place such term appears 
     and inserting ``the Deposit Insurance Fund'';

       (v) by striking paragraph (2)(E) (as redesignated by 
     section 3001(d)(3)(F)(ii)(IV) of this Act);
       (vi) in paragraph (2)(F) (as redesignated by section 
     3001(d)(3)(F)(ii)(IV) of this Act)--

       (I) in the subparagraph heading, by striking ``funds 
     achieve'' and inserting ``fund achieves''; and
       (II) by striking ``a deposit insurance fund'' and inserting 
     ``the Deposit Insurance Fund'';

       (vii) in paragraph (3)--

       (I) in the paragraph heading, by striking ``funds'' and 
     inserting ``fund'';
       (II) by striking ``that fund'' each place such term appears 
     and inserting ``the Deposit Insurance Fund'';
       (III) in subparagraph (A), by striking ``Except as provided 
     in paragraph (2)(F), if'' and inserting ``If'';
       (IV) in subparagraph (A), by striking ``any deposit 
     insurance fund'' and inserting ``the Deposit Insurance 
     Fund''; and
       (V) by striking subparagraphs (C) and (D) and inserting the 
     following:

       ``(C) Amending schedule.--The Corporation may, by 
     regulation, amend a schedule promulgated under subparagraph 
     (B).''; and
       (viii) in paragraph (6)--

       (I) by striking ``any such assessment'' and inserting ``any 
     such assessment is necessary'';
       (II) by striking ``(A) is necessary--'';
       (III) by striking subparagraph (B);
       (IV) by redesignating clauses (i), (ii), and (iii) as 
     subparagraphs (A), (B), and (C), respectively, and moving the 
     margins 2 ems to the left; and
       (V) in subparagraph (C) (as redesignated), by striking ``; 
     and'' and inserting a period;

       (H) in section 7(d) (12 U.S.C. 1817(d)) (as added by 
     section 3001(c)(1) of this Act)--
       (i) in the subsection heading, by striking ``Bank'' and 
     inserting ``Deposit''; and
       (ii) by striking ``Bank Insurance Fund'' each place such 
     term appears and inserting ``Deposit Insurance Fund'';
       (I) in section 11(f)(1) (12 U.S.C. 1821(f)(1)), by striking 
     ``, except that--'' and all that follows through the end of 
     the paragraph and inserting a period;
       (J) in section 11(i)(3) (12 U.S.C. 1821(i)(3))--
       (i) by striking subparagraph (B);
       (ii) by redesignating subparagraph (C) as subparagraph (B); 
     and
       (iii) in subparagraph (B) (as redesignated), by striking 
     ``subparagraphs (A) and (B)'' and inserting ``subparagraph 
     (A)'';
       (K) in section 11A(a) (12 U.S.C. 1821a(a))--
       (i) in paragraph (2), by striking ``liabilities.--'' and 
     all that follows through ``Except'' and inserting 
     ``liabilities.--Except'';
       (ii) by striking paragraph (2)(B); and
       (iii) in paragraph (3), by striking ``the Bank Insurance 
     Fund, the Savings Association Insurance Fund,'' and inserting 
     ``the Deposit Insurance Fund'';
       (L) in section 11A(b) (12 U.S.C. 1821a(b)), by striking 
     paragraph (4);
       (M) in section 11A(f) (12 U.S.C. 1821a(f)), by striking 
     ``Savings Association Insurance Fund'' and inserting 
     ``Deposit Insurance Fund'';
       (N) in section 13 (12 U.S.C. 1823)--
       (i) in subsection (a)(1), by striking ``Bank Insurance 
     Fund, the Savings Association Insurance Fund,'' and inserting 
     ``Deposit Insurance Fund, the Special Reserve of the Deposit 
     Insurance Fund,'';
       (ii) in subsection (c)(4)(E)--

       (I) in the subparagraph heading, by striking ``funds'' and 
     inserting ``fund''; and
       (II) in clause (i), by striking ``any insurance fund'' and 
     inserting ``the Deposit Insurance Fund'';

       (iii) in subsection (c)(4)(G)(ii)--

       (I) by striking ``appropriate insurance fund'' and 
     inserting ``Deposit Insurance Fund'';
       (II) by striking ``the members of the insurance fund (of 
     which such institution is a member)'' and inserting ``insured 
     depository institutions'';
       (III) by striking ``each member's'' and inserting ``each 
     insured depository institution's''; and

[[Page S 16118]]

       (IV) by striking ``the member's'' each place such term 
     appears and inserting ``the institution's'';

       (iv) in subsection (c), by striking paragraph (11);
       (v) in subsection (h), by striking ``Bank Insurance Fund'' 
     and inserting ``Deposit Insurance Fund'';
       (vi) in subsection (k)(4)(B)(i), by striking ``Savings 
     Association Insurance Fund'' and inserting ``Deposit 
     Insurance Fund''; and
       (vii) in subsection (k)(5)(A), by striking ``Savings 
     Association Insurance Fund'' and inserting ``Deposit 
     Insurance Fund'';
       (O) in section 14(a) (12 U.S.C. 1824(a)) in the fifth 
     sentence--
       (i) by striking ``Bank Insurance Fund or the Savings 
     Association Insurance Fund'' and inserting ``Deposit 
     Insurance Fund''; and
       (ii) by striking ``each such fund'' and inserting ``the 
     Deposit Insurance Fund'';
       (P) in section 14(b) (12 U.S.C. 1824(b)), by striking 
     ``Bank Insurance Fund or Savings Association Insurance Fund'' 
     and inserting ``Deposit Insurance Fund'';
       (Q) in section 14(c) (12 U.S.C. 1824(c)), by striking 
     paragraph (3);
       (R) in section 14(d) (12 U.S.C. 1824(d))--
       (i) by striking ``BIF'' each place such term appears and 
     inserting ``DIF''; and
       (ii) by striking ``Bank Insurance Fund'' each place such 
     term appears and inserting ``Deposit Insurance Fund'';
       (S) in section 15(c)(5) (12 U.S.C. 1825(c)(5))--
       (i) by striking ``the Bank Insurance Fund or Savings 
     Association Insurance Fund, respectively'' each place such 
     term appears and inserting ``the Deposit Insurance Fund''; 
     and
       (ii) in subparagraph (B), by striking ``the Bank Insurance 
     Fund or the Savings Association Insurance Fund, 
     respectively'' and inserting ``the Deposit Insurance Fund'';
       (T) in section 17(a) (12 U.S.C. 1827(a))--
       (i) in the subsection heading, by striking ``BIF, SAIF,'' 
     and inserting ``the Deposit Insurance Fund''; and
       (ii) in paragraph (1), by striking ``the Bank Insurance 
     Fund, the Savings Association Insurance Fund,'' each place 
     such term appears and inserting ``the Deposit Insurance 
     Fund'';
       (U) in section 17(d) (12 U.S.C. 1827(d)), by striking ``the 
     Bank Insurance Fund, the Savings Association Insurance 
     Fund,'' each place such term appears and inserting ``the 
     Deposit Insurance Fund'';
       (V) in section 18(m)(3) (12 U.S.C. 1828(m)(3))--
       (i) by striking ``Savings Association Insurance Fund'' each 
     place such term appears and inserting ``Deposit Insurance 
     Fund''; and
       (ii) in subparagraph (C), by striking ``or the Bank 
     Insurance Fund'';
       (W) in section 18(p) (12 U.S.C. 1828(p)), by striking 
     ``deposit insurance funds'' and inserting ``Deposit Insurance 
     Fund'';
       (X) in section 24 (12 U.S.C. 1831a) in subsections (a)(1) 
     and (d)(1)(A), by striking ``appropriate deposit insurance 
     fund'' each place such term appears and inserting ``Deposit 
     Insurance Fund'';
       (Y) in section 28 (12 U.S.C. 1831e), by striking ``affected 
     deposit insurance fund'' each place such term appears and 
     inserting ``Deposit Insurance Fund'';
       (Z) by striking section 31 (12 U.S.C. 1831h);
       (AA) in section 36(i)(3) (12 U.S.C. 1831m(i)(3)) by 
     striking ``affected deposit insurance fund'' and inserting 
     ``Deposit Insurance Fund'';
       (BB) in section 38(a) (12 U.S.C. 1831o(a)) in the 
     subsection heading, by striking ``Funds'' and inserting 
     ``Fund'';
       (CC) in section 38(k) (12 U.S.C. 1831o(k))--
       (i) in paragraph (1), by striking ``a deposit insurance 
     fund'' and inserting ``the Deposit Insurance Fund''; and
       (ii) in paragraph (2)(A)--

       (I) by striking ``A deposit insurance fund'' and inserting 
     ``The Deposit Insurance Fund''; and
       (II) by striking ``the deposit insurance fund's outlays'' 
     and inserting ``the outlays of the Deposit Insurance Fund''; 
     and

       (DD) in section 38(o) (12 U.S.C. 1831o(o))--
       (i) by striking ``Associations.--'' and all that follows 
     through ``Subsections (e)(2)'' and inserting 
     ``Associations.--Subsections (e)(2)'';
       (ii) by redesignating subparagraphs (A), (B), and (C) as 
     paragraphs (1), (2), and (3), respectively; and
       (iii) in paragraph (1) (as redesignated), by redesignating 
     clauses (i) and (ii) as subparagraphs (A) and (B), 
     respectively.
       (9) Amendments to the financial institutions reform, 
     recovery, and enforcement act of 1989.--The Financial 
     Institutions Reform, Recovery, and Enforcement Act (Public 
     Law 101-73; 103 Stat. 183) is amended--
       (A) in section 951(b)(3)(B) (12 U.S.C. 1833a(b)(3)(B)), by 
     striking ``Bank Insurance Fund, the Savings Association 
     Insurance Fund,'' and inserting ``Deposit Insurance Fund''; 
     and
       (B) in section 1112(c)(1)(B) (12 U.S.C. 3341(c)(1)(B)), by 
     striking ``Bank Insurance Fund, the Savings Association 
     Insurance Fund,'' and inserting ``Deposit Insurance Fund''.
       (10) Amendment to the bank enterprise act of 1991.--Section 
     232(a)(1) of the Bank Enterprise Act of 1991 (12 U.S.C. 
     1834(a)(1)) is amended by striking ``section 7(b)(2)(H)'' and 
     inserting ``section 7(b)(2)(G)''.
       (11) Amendment to the bank holding company act.--Section 
     2(j)(2) of the Bank Holding Company Act (12 U.S.C. 
     1841(j)(2)) is amended by striking ``Savings Association 
     Insurance Fund'' and inserting ``Deposit Insurance Fund''.
       On page 199, line 12, strike ``(e)'' and insert ``(f)''.
                                 ______


               HUTCHISON (AND OTHERS) AMENDMENT NO. 2994

  Mrs. HUTCHISON (for herself, Mr. McCain, Mr. Lieberman, Mr. Stevens, 
and Mr. Levin) submitted an amendment intended to be proposed by them 
to the bill S. 1357, supra, as follows:

       (a) The Senate makes the following findings:
       (1) Human rights violations and atrocities continue 
     unabated in the Former Yugoslavia.
       (2) The Assistant Secretary of State for Human Rights 
     recently reported that starting in mid-September and 
     intensifying between October 6 and October 12, 1995 many 
     thousands of Bosnian Muslims and Croats in Northwest Bosnia 
     were systematically forced from their homes by paramilitary 
     units, local police and in some instances, Bosnian Serb Army 
     officials and soldiers.
       (3) Despite the October 12, 1995 cease-fire which went into 
     effect by agreement of the warring parties in the former 
     Yugoslavia, Bosnian Serbs continue to conduct a brutal 
     campaign to expel non-Serb civilians who remain in Northwest 
     Bosnia, and are subjecting non-Serbs to untold horror--
     murder, rape, robbery and other violence.
       (4) Horrible examples of ``ethnic cleansing'' persist in 
     Northwest Bosnia. Some six thousand refugees recently reached 
     Zenica and reported that nearly two thousand family members 
     from this group are still unaccounted for.
       (5) The U.N. spokesman in Zagreb reported that many 
     refugees have been given only a few minutes to leave their 
     homes and that ``girls as young as 17 are reported to have 
     been taken into wooded areas and raped.'' Elderly, sick and 
     very young refugees have been driven to remote areas and 
     forced to walk long distances on unsafe roads and cross 
     rivers without bridges.
       (6) The War Crime Tribunal for the former Yugoslavia has 
     collected volumes of evidence of atrocities, including the 
     establishment of death camps, mass executions and systematic 
     campaigns of rape and terror. This War Crimes Tribunal has 
     already issued 43 indictments on the basis of this evidence.
       (7) The Assistant Secretary of State for Human Rights has 
     described the eye witness accounts as ``prima facia evidence 
     of war crimes which, if confirmed, could very well lead to 
     further indictments by the War Crimes Tribunal.''
       (8) The U.N. High Commissioner for Refugees estimates that 
     more than 22,000 Muslims and Croats have been forced from 
     their homes since mid-September in Bosnian Serb controlled 
     areas.
       (9) In opening the Dodd Center Symposium on the topic of 
     ``50 Years After Nuremburg'' on October 16, 1995, President 
     Clinton cited the ``excellent progress'' of the War Crimes 
     Tribunal for the former Yugoslavia and said, ``Those accused 
     of war crimes, crimes against humanity and genocide must be 
     brought to justice. They must be tried and, if found guilty, 
     they must be held accountable.''
       (10) President Clinton also observed on October 16, 1995, 
     ``some people are concerned that pursuing peace in Bosnia and 
     prosecuting war criminals are incompatible goals. But I 
     believe they are wrong. There must be peace for justice to 
     prevail, but there must be justice when peace prevails.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the Senate condemns the systematic human rights abuses 
     against the people of Bosnia and Herzogovenia.
       (2) with peace talks scheduled to begin in the United 
     States on October 31, 1995, and with the President clearly 
     indicating his willingness to send American forces into the 
     heart of this conflict, these new reports of Serbian 
     atrocities are of grave concern to all Americans.
       (3) the Bosnian Serb leadership should immediately halt 
     these atrocities, fully account for the missing, and allow 
     those who have been separated to return to their families.
       (4) the International Red Cross, United Nations agencies 
     and human rights organizations should be granted full and 
     complete access to all locations throughout Bosnia and 
     Herzogovenia.
       (5) the Bosnian Serb leadership should fully cooperate to 
     facilitate the complete investigation of the above 
     allegations so that those responsible may be held accountable 
     under international treaties, conventions, obligations and 
     law.
       (6) the United States should continue to support the work 
     of the War Crime Tribunal for the Former Yugoslavia.
       (7) the United States should ensure that any negotiated 
     peace agreements in former Yugoslavia, particularly with 
     respect to Bosnia, require all states of the former 
     Yugoslavia to cooperate fully with the War Crimes Tribunal 
     and apprehend and turn over for trial any indicted persons 
     found in their territories.
       (8) ethnic cleansing'' by any faction, group, leader, or 
     government is unjustified, immoral and illegal and all 
     perpetrators of war crimes, crimes against humanity, genocide 
     and other human rights violations in former Yugoslavia must 
     be held accountable.
                                 ______

                                 
[[Page S 16119]]


                 HEFLIN (AND SHELBY) AMENDMENT NO. 2995

       Mr. DOMENICI (for Mr. Heflin, for himself, and Mr. Shelby) 
     proposed an amendment to the bill S. 1357, supra, as follows:

       On page 1773, strike line 24, and insert the following:
       (c) Special Rule for States in Which Only Punitive Damages 
     May Be Awarded in Wrongful Death Actions.--Section 104 is 
     amended by redesignating subsection (c) as subsection (d) and 
     by inserting after the subsection (b) the following new 
     subsection:
       ``(c) Restriction on Punitive Damages Not To Apply in 
     Certain Cases.--The restriction on the application of 
     subsection (a)(2) to punitive damages shall not apply to 
     punitive damages awarded in a civil action--
       ``(1) which is a wrongful death action, and
       ``(2) with respect to which applicable State law (as in 
     effect on September 13, 1995 and without regard to any 
     modification after such date) provides, or has been construed 
     to provide by a court of competent jurisdiction pursuant to a 
     decision issued on or before September 13, 1995, that only 
     punitive damages may be awarded in such an action.

       This subsection shall cease to apply to any civil action 
     filed on or after the first date on which the applicable 
     State law ceases to provide (or is no longer construed to 
     provide) the treatment described in paragraph (2).''
       (d) Effective Date.--
                                 ______


                       KENNEDY AMENDMENT NO. 2996

  Mr. KENNEDY proposed an amendment to the bill S. 1357, supra, as 
follows:

       On page 469, between lines 8 and 9, insert the following:
       ``(g) Prohibition of Balance Billing.--Notwithstanding any 
     other provision of law an individual who is enrolled in a 
     medicare choice plan under this part shall not be liable for 
     a provider's charges for items or services furnished under 
     the plan if such charges are in excess of the copayments, 
     coinsurance and deductibles required by such plan in 
     accordance with subsection (c)
                                 ______


                D'AMATO (AND OTHERS) AMENDMENT NO. 2997

  (Ordered to lie on the table.)
  Mr. D'Amato (for himself, Mr. Grams, and Mr. Shelby) submitted an 
amendment intended to be proposed by them to the bill S. 1357, supra, 
as follows:

       At the end of chapter 8 of subtitle I of title XII, insert:

     SEC.--. SENSE OF THE SENATE REGARDING TAX TREATMENT OF 
                   CONVERSIONS OF THRIFT CHARTERS TO BANK 
                   CHARTERS.

       In order to facilitate sound national banking policy and 
     assist in the conversion of thrift charters to bank charters, 
     it is the sense of the Senate that section 593 of the 
     Internal Revenue Code of 1986 (relating to reserves for 
     losses on loans) should be repealed and appropriate relief 
     should be granted for the pre-1988 portion of any bad debt 
     reserves of a thrift charter.
                                 ______


                      FAIRCLOTH AMENDMENT NO. 2998

  (Ordered to lie on the table.)
  Mr. FAIRCLOTH submitted an amendment intended to be proposed by him 
to the bill S. 1357, supra, as follows:

       On page 187, line 3:
       On page 187, line 22:
       Strike ``5'' and insert ``10.''
                                 ______


                FEINGOLD (AND OTHERS) AMENDMENT NO. 2999

  Mr. FEINGOLD (for himself, Mr. Pressler, Mr. Grams, Mr. McCain, Mr. 
Kohn, and Mr. Wellstone) proposed an amendment to the bill S. 1357, 
supra; as follows:

       On page 33, strike lines 21 through 24.
                                 ______


              FEINGOLD (AND WELLSTONE) AMENDMENT NO. 3000

  (Ordered to lie on the table.)
  Mr. FEINGOLD (for himself and Mr. Wellstone) submitted an amendment 
intended to be proposed by them to the bill S. 1357, supra, as follows:

       At the end of chapter 8 of subtitle I of title XII add the 
     following new section:

     SEC.     . CERTAIN MINERALS NOT ELIGIBLE FOR PERCENTAGE 
                   DEPLETION.

       (a) General Rule.--
       (1) Paragraph (1) of section 613(b) (relating to percentage 
     depletion rates) is amended--
       (A) by striking ``and uranium'' in subparagraph (A), and
       (B) by striking ``asbestos,'', ``lead,'' and ``mercury,'' 
     in subparagraph (B).
       (2) Subparagraph (A) of section 613(b)(3) is amended by 
     inserting ``other than lead, mercury, or uranium'' after 
     ``metal mines''.
       (3) Paragraph (4) of section 613(b) is amended by striking 
     ``asbestos (if paragraph (1)(B) does not apply),''.
       (4) Paragraph (7) of section 613(b) 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 
     inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) mercury, uranium, lead, and asbestos.''
       (b) Conforming Amendments.--Subparagraph (D) of section 
     613(c)(4) is amended by striking ``lead,'' and ``uranium,''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.
                                 ______


                      FEINGOLD AMENDMENT NO. 3001

  (Ordered to lie on the table.)
  Mr. FEINGOLD submitted an amendment intended to be proposed by him to 
the bill S. 1357, supra, as follows:

       At the end of title VII add the following new subtitle:

  Subtitle K--Home and Community-Based Services for Individuals with 
                              Disabilities

     SEC. 7500. PURPOSES; SHORT TITLE; TABLE OF CONTENTS.

       (a) Purposes.--The purposes of this subtitle are--
       (1) to provide States with a capped source of funding to 
     establish a system of consumer-oriented, consumer-directed 
     home and community-based long-term care services for 
     individuals with disabilities of any age;
       (2) to ensure that all individuals with severe disabilities 
     have access to such services while protecting taxpayers and 
     maximizing program benefits by including significant cost-
     sharing provisions that require individuals with higher 
     incomes to pay a greater share of the cost of their care;
       (3) to build on the experience of Wisconsin's home and 
     community-based long-term care program, the Community Options 
     Program (COP), which has been a national model of reform, and 
     the keystone of Wisconsin's long-term care reforms that have 
     saved Wisconsin taxpayers hundreds of millions of dollars; 
     and
       (4) to continue the recent bipartisan efforts to establish 
     this kind of long-term care reform, including the excellent 
     long-term care proposal included in President Clinton's 
     health care reform bill last year, as well as the provisions 
     establishing home and community-based long-term care benefits 
     in the versions of the President's bill that were reported 
     out of the Senate Committee on Labor and Human Resources and 
     the Senate Committee on Finance last session, provisions 
     which had, in both cases, strong bipartisan support.
       (b) Short Title.--This subtitle may be cited as the ``Long-
     Term Care Reform and Deficit Reduction Act of 1995''.
       (c) Table of Contents.--The table of contents of this 
     subtitle is as follows:

Sec. 7500. Purposes, short title; table of contents.
Sec. 7501. State programs for home and community-based services for 
              individuals with disabilities.
Sec. 7502. State plans
Sec. 7503. Individuals with disabilities defined.
Sec. 7504. Home and community-based services covered under State plan.
Sec. 7505. Cost sharing.
Sec. 7506. Quality assurance and safeguards.
Sec. 7507. Advisory groups.
Sec. 7508. Payments to States.
Sec. 7509. Appropriations; allotments to States.
Sec. 7510. Repeals.

     SEC. 7501. STATE PROGRAMS FOR HOME AND COMMUNITY-BASED 
                   SERVICES FOR INDIVIDUALS WITH DISABILITIES.

       (a) In General.--Each State that has a plan for home and 
     community-based services for individuals with disabilities 
     submitted to and approved by the Secretary under section 
     7502(b) may receive payment in accordance with section 7508.
       (b) Entitlement to Services.--Nothing in this subtitle 
     shall be construed to create a right to services for 
     individuals or a requirement that a State with an approved 
     plan expend the entire amount of funds to which it is 
     entitled under this subtitle.
       (c) Designation of Agency.--Not later than 6 months after 
     the date of enactment of this Act, the Secretary shall 
     designate an agency responsible for program administration 
     under this subtitle.

     SEC. 7502. STATE PLANS.

       (a) Plan Requirements.--In order to be approved under 
     subsection (b), a State plan for home and community-based 
     services for individuals with disabilities must meet the 
     following requirements:
       (1) State maintenance of effort.--
       (A) In general.--A State plan under this subtitle shall 
     provide that the State will, during any fiscal year that the 
     State is furnishing services under this subtitle, make 
     expenditures of State funds in an amount equal to the State 
     maintenance of effort amount for the year determined under 
     subparagraph (B) for furnishing the services described in 
     subparagraph (C) under the State plan under this subtitle or 
     the State plan under title XXI of the Social Security Act.
       (B) State maintenance of effort amount.--
       (i) In general.--The maintenance of effort amount for a 
     State for a fiscal year is an amount equal to--
       (I) for fiscal year 1997, the base amount for the State (as 
     determined under clause (ii)) updated through the midpoint of 
     fiscal year 1997 by the estimated percentage change in the 
     index described in clause (iii) during the period beginning 
     on October 1, 1995, and ending at that midpoint; and

[[Page S 16120]]

       (II) for succeeding fiscal years, an amount equal to the 
     amount determined under this clause for the previous fiscal 
     year updated through the midpoint of the year by the 
     estimated percentage change in the index described in clause 
     (iii) during the 12-month period ending at that midpoint, 
     with appropriate adjustments to reflect previous 
     underestimations or overestimations under this clause in the 
     projected percentage change in such index.
       (ii) State base amount.--The base amount for a State is an 
     amount equal to the total expenditures from State funds made 
     under the State plan under title XIX of the Social Security 
     Act (42 U.S.C. 1396 et seq.) during fiscal year 1995 with 
     respect to medical assistance consisting of the services 
     described in subparagraph (C).
       (iii) Index described.--For purposes of clause (i), the 
     Secretary shall develop an index that reflects the projected 
     increases in spending for services under subparagraph (C), 
     adjusted for differences among the States.
       (C) Medicaid services described.--The services described in 
     this subparagraph are the following:
       (i) Personal care services (as described in section 
     1905(a)(24) of the Social Security Act (42 U.S.C. 
     1396(a)(24)), as in effect on the day before the date of the 
     enactment of this Act).
       (ii) Home or community-based services furnished under a 
     waiver granted under subsection (c), (d), or (e) of section 
     1915 of such Act (42 U.S.C. 1396n), as so in effect.
       (iii) Home and community care furnished to functionally 
     disabled elderly individuals under section 1929 of such Act 
     (42 U.S.C. 1396t), as so in effect.
       (iv) Community supported living arrangements services under 
     section 1930 of such Act (42 U.S.C. 1396u), as so in effect.
       (v) Services furnished in a hospital, nursing facility, 
     intermediate care facility for the mentally retarded, or 
     other institutional setting specified by the Secretary.
       (2) Eligibility.--
       (A) In general.--Within the amounts provided by the State 
     and under section 7508 for such plan, the plan shall provide 
     that services under the plan will be available to individuals 
     with disabilities (as defined in section 7503(a)) in the 
     State.
       (B) Initial screening.--The plan shall provide a process 
     for the initial screening of an individual who appears to 
     have some reasonable likelihood of being an individual with 
     disabilities. Any such process shall require the provision of 
     assistance to individuals who wish to apply but whose 
     disability limits their ability to apply. The initial 
     screening and the determination of disability (as defined 
     under section 7503(b)) shall be conducted by a public agency.
       (C) Restrictions.--
       (i) In general.--The plan may not limit the eligibility of 
     individuals with disabilities based on--
       (I) income;
       (II) age;
       (III) residential setting (other than with respect to an 
     institutional setting, in accordance with clause (ii)); or
       (IV) other grounds specified by the Secretary;
     except that through fiscal year 2005, the Secretary may 
     permit a State to limit eligibility based on level of 
     disability or geography (if the State ensures a balance 
     between urban and rural areas).
       (ii) Institutional setting.--The plan may limit the 
     eligibility of individuals with disabilities based on the 
     definition of the term ``institutional setting'', as 
     determined by the State.
       (D) Continuation of services.--The plan must provide 
     assurances that, in the case of an individual receiving 
     medical assistance for home and community-based services 
     under the State medicaid plan under title XXI of the Social 
     Security Act (42 U.S.C. 1396 et seq.) as of the date a 
     State's plan is approved under this subtitle, the State will 
     continue to make available (either under this plan, under the 
     State medicaid plan, or otherwise) to such individual an 
     appropriate level of assistance for home and community-based 
     services, taking into account the level of assistance 
     provided as of such date and the individual's need for home 
     and community-based services.
       (3) Services.--
       (A) Needs assessment.--Not later than the end of the second 
     year of implementation, the plan or its amendments shall 
     include the results of a statewide assessment of the needs of 
     individuals with disabilities in a format required by the 
     Secretary. The needs assessment shall include demographic 
     data concerning the number of individuals within each 
     category of disability described in this subtitle, and the 
     services available to meet the needs of such individuals.
       (B) Specification.--Consistent with section 7504, the plan 
     shall specify--
       (i) the services made available under the plan;
       (ii) the extent and manner in which such services are 
     allocated and made available to individuals with 
     disabilities; and
       (iii) the manner in which services under the plan are 
     coordinated with each other and with health and long-term 
     care services available outside the plan for individuals with 
     disabilities.
       (C) Taking into account informal care.--A State plan may 
     take into account, in determining the amount and array of 
     services made available to covered individuals with 
     disabilities, the availability of informal care. Any 
     individual plan of care developed under section 7504(b)(1)(B) 
     that includes informal care shall be required to verify the 
     availability of such care.
       (D) Allocation.--The State plan--
       (i) shall specify how services under the plan will be 
     allocated among covered individuals with disabilities;
       (ii) shall attempt to meet the needs of individuals with a 
     variety of disabilities within the limits of available 
     funding;
       (iii) shall include services that assist all categories of 
     individuals with disabilities, regardless of their age or the 
     nature of their disabling conditions;
       (iv) shall demonstrate that services are allocated 
     equitably, in accordance with the needs assessment required 
     under subparagraph (A); and
       (v) shall ensure that--
       (I) the proportion of the population of low-income 
     individuals with disabilities in the State that represents 
     individuals with disabilities who are provided home and 
     community-based services either under the plan, under the 
     State medicaid plan, or under both, is not less than
       (II) the proportion of the population of the State that 
     represents individuals who are low-income individuals.
       (E) Limitation on licensure or certification.--The State 
     may not subject consumer-directed providers of personal 
     assistance services to licensure, certification, or other 
     requirements that the Secretary finds not to be necessary for 
     the health and safety of individuals with disabilities.
       (F) Consumer choice.--To the extent feasible, the State 
     shall follow the choice of an individual with disabilities 
     (or that individual's designated representative who may be a 
     family member) regarding which covered services to receive 
     and the providers who will provide such services.
       (4) Cost sharing.--The plan shall impose cost sharing with 
     respect to covered services in accordance with section 7505.
       (5) Types of providers and requirements for 
     participation.--The plan shall specify--
       (A) the types of service providers eligible to participate 
     in the program under the plan, which shall include consumer-
     directed providers of personal assistance services, except 
     that the plan--
       (i) may not limit benefits to services provided by 
     registered nurses or licensed practical nurses; and
       (ii) may not limit benefits to services provided by 
     agencies or providers certified under title XVIII of the 
     Social Security Act (42 U.S.C. 1395 et seq.); and
       (B) any requirements for participation applicable to each 
     type of service provider.
       (6) Provider reimbursement.--
       (A) Payment methods.--The plan shall specify the payment 
     methods to be used to reimburse providers for services 
     furnished under the plan. Such methods may include 
     retrospective reimbursement on a fee-for-service basis, 
     prepayment on a capitation basis, payment by cash or vouchers 
     to individuals with disabilities, or any combination of these 
     methods. In the case of payment to consumer-directed 
     providers of personal assistance services, including payment 
     through the use of cash vouchers, the plan shall specify how 
     the plan will assure compliance with applicable employment 
     tax and health care coverage provisions.
       (B) Payment rates.--The plan shall specify the methods and 
     criteria to be used to set payment rates for--
       (i) agency administered services furnished under the plan; 
     and
       (ii) consumer-directed personal assistance services 
     furnished under the plan, including cash payments or vouchers 
     to individuals with disabilities, except that such payments 
     shall be adequate to cover amounts required under applicable 
     employment tax and health care coverage provisions.
       (C) Plan payment as payment in full.--The plan shall 
     restrict payment under the plan for covered services to those 
     providers that agree to accept the payment under the plan (at 
     the rates established pursuant to subparagraph (B)) and any 
     cost sharing permitted or provided for under section 7505 as 
     payment in full for services furnished under the plan.
       (7) Quality assurance and safeguards.--The State plan shall 
     provide for quality assurance and safeguards for applicants 
     and beneficiaries in accordance with section 7506.
       (8) Advisory group.--The State plan shall--
       (A) assure the establishment and maintenance of an advisory 
     group under section 7507(b); and
       (B) include the documentation prepared by the group under 
     section 7507(b)(4).
       (9) Administration and access.--
       (A) State agency.--The plan shall designate a State agency 
     or agencies to administer (or to supervise the administration 
     of) the plan.
       (B) Coordination.--The plan shall specify how it will--
       (i) coordinate services provided under the plan, including 
     eligibility prescreening, service coordination, and referrals 
     for individuals with disabilities who are ineligible for 
     services under this subtitle with the State medicaid plan 
     under title XXI of the Social Security Act, titles V and XX 
     of such Act (42 U.S.C. 701 et seq. and 1397 et seq.), 
     programs under the Older Americans Act of 1965 (42 U.S.C. 
     3001 et seq.), programs under the Developmental Disabilities 
     Assistance and Bill of Rights Act (42 U.S.C. 6000 et seq.), 
     programs under the Individuals with Disabilities Education 
     Act (20 U.S.C. 1400 et seq.), and any other Federal or State 
     programs that provide services or assistance targeted to 
     individuals with disabilities; and

[[Page S 16121]]

       (ii) coordinate with health plans.
       (C) Administrative expenditures.--Effective beginning with 
     fiscal year 2005, the plan shall contain assurances that not 
     more than 10 percent of expenditures under the plan for all 
     quarters in any fiscal year shall be for administrative 
     costs.
       (D) Information and assistance.--The plan shall provide for 
     a single point of access to apply for services under the 
     State program for individuals with disabilities. 
     Notwithstanding the preceding sentence, the plan may 
     designate separate points of access to the State program for 
     individuals under 22 years of age, for individuals 65 years 
     of age or older, or for other appropriate classes of 
     individuals.
       (10) Reports and information to secretary; audits.--The 
     plan shall provide that the State will furnish to the 
     Secretary--
       (A) such reports, and will cooperate with such audits, as 
     the Secretary determines are needed concerning the State's 
     administration of its plan under this subtitle, including the 
     processing of claims under the plan; and
       ((B) such data and information as the Secretary may require 
     in a uniform format as specified by the Secretary.
       (11) Use of state funds for matching.--The plan shall 
     provide assurances that Federal funds will not be used to 
     provide for the State share of expenditures under this 
     subtitle.
       (12) Health care worker redeployment.--The plan shall 
     provided for the following:
       (A) Before initiating the process of implementing the State 
     program under such plan, negotiations will be commenced with 
     labor unions representing the employees of the affected 
     hospitals or other facilities.
       (B) Negotiations under subparagraph (A) will address the 
     following:
       (i) The impact of the implementation of the program upon 
     the workforce.
       (ii) Methods to redeploy workers to positions in the 
     proposed system, in the case of workers affected by the 
     program.
       (C) The plan will provide evidence that there has been 
     compliance with subparagraphs (A) and (B), including a 
     description of the results of the negotiations.
       (13) Terminology.--The plan shall adhere to uniform 
     definitions of terms, as specified by the Secretary.
       (b) Approval of Plans.--The Secretary shall approve a plan 
     submitted by a State if the Secretary determines that the 
     plan--
       (1) was developed by the State after a public comment 
     period of not less than 30 days; and
       (2) meets the requirements of subsection (a).
     The approval of such a plan shall take effect as of the first 
     day of the first fiscal year beginning after the date of such 
     approval (except that any approval made before January 1, 
     1997, shall be effective as of January 1, 1997). In order to 
     budget funds allotted under this subtitle, the Secretary 
     shall establish a deadline for the submission of such plan 
     before the beginning of a fiscal year as a condition of its 
     approval effective with that fiscal year. Any significant 
     changes to the State plan shall be submitted to the 
     Secretary in the form of plan amendments and shall be 
     subject to approval by the Secretary.
       (c) Monitoring.--The Secretary shall annually monitor the 
     compliance of State plans with the requirements of this 
     subtitle according to specified performance standards. In 
     accordance with section 7508(e), States that fail to comply 
     with such requirements may be subject to a reduction in the 
     Federal matching rates available to the State under section 
     7508(a) or the withholding of Federal funds for services or 
     administration until such time as compliance is achieved.
       (d) Technical Assistance.--The Secretary shall ensure the 
     availability of ongoing technical assistance to States under 
     this section. Such assistance shall include serving as a 
     clearinghouse for information regarding successful practices 
     in providing long-term care services.
       (e) Regulations.--The Secretary shall issue such 
     regulations as may be appropriate to carry out this subtitle 
     on a timely basis.

     SEC. 7503. INDIVIDUALS WITH DISABILITIES DEFINED.

       (a) In General.--For purposes of this subtitle, the term 
     ``individual with disabilities'' means any individual within 
     one or more of the following categories of individuals:
       (1) Individual's requiring help with activities of daily 
     living.--An individual of any age who--
       (A) requires hands-on or standby assistance, supervision, 
     or cueing (as defined in regulations) to perform three or 
     more activities of daily living (as defined in subsection 
     (d)); and
       (B) is expected to require such assistance, supervision, or 
     cueing over a period of at least 90 days.
       (2) Individuals with severe cognitive or mental 
     impairment.--An individual of any age--
       (A) whose score, on a standard mental status protocol (or 
     protocols) appropriate for measuring the individual's 
     particular condition specified by the Secretary, indicates 
     either severe cognitive impairment or severe mental 
     impairment, or both;
       (B) who--
       (i) requires hands-on or standby assistance, supervision, 
     or curing with one or more activities of daily living;
       (ii) requires hands-on or standby assistance, supervision, 
     or cueing with at least such instrumental activity (or 
     activities) of daily living related to cognitive or mental 
     impairment as the Secretary specifies; or
       (iii) displays symptoms of one or more serious behavioral 
     problems (that is on a list of such problems specified by the 
     Secretary) that create a need for supervision to prevent harm 
     to self or others; and
       (C) who is expected to meet the requirements of 
     subparagraphs (A) and (B) over a period of at least 90 days.

     Not later than 2 years after the date of enactment of this 
     Act, the Secretary shall make recommendations regarding the 
     most appropriate duration of disability under this paragraph.
       (3) Individuals with severe or profound mental 
     retardation.--An individual of any age who has severe or 
     profound mental retardation (as determined according to a 
     protocol specified by the Secretary).
       (4) Young children with severe disabilities.--An individual 
     under 6 years of age who--
       (A) has a severe disability or chronic medical condition 
     that limits functioning in a manner that is comparable in 
     severity to the standards established under paragraphs (1), 
     (2), or (3); and
       (B) is expected to have such a disability or condition and 
     require such services over a period of at least 90 days.
       (5) State option with respect to individuals with 
     comparable disabilities.--Not more than 2 percent of a 
     State's allotment for services under this subtitle may be 
     expended for the provision of services to individuals with 
     severe disabilities that are comparable in severity to the 
     criteria described in paragraphs (1) through (4), but who 
     fail to meet the criteria in any single category under such 
     paragraphs.
       (b) Determination.--
       (1) In general.--In formulating eligibility criteria under 
     subsection (a), the Secretary shall establish criteria for 
     assessing the functional level of disability among all 
     categories of individuals with disabilities that are 
     comparable in severity, regardless of the age or the nature 
     of the disabling condition of the individual. The 
     determination of whether an individual is an individual with 
     disabilities shall be made by a public or nonprofit agency 
     that is specified under the State plan and that is not a 
     provider of home and community-based services under this 
     subtitle and by using a uniform protocol consisting of an 
     initial screening and a determination of disability 
     specified by the Secretary. A State may not impose cost 
     sharing with respect to a determination of disability. A 
     State may collect additional information, at the time of 
     obtaining information to make such determination, in order 
     to provide for the assessment and plan described in 
     section 7504(b) or for other purposes.
       (2) Periodic reassessment.--The determination that an 
     individual is an individual with disabilities shall be 
     considered to be effective under the State plan for a period 
     of not more than 6 months (or for such longer period in such 
     cases as a significant change in an individual's condition 
     that may affect such determination is unlikely). A 
     reassessment shall be made if there is a significant change 
     in an individual's condition that may affect such 
     determination.
       (c) Eligibility Criteria.--The Secretary shall reassess the 
     validity of the eligibility criteria described in subsection 
     (a) as new knowledge regarding the assessments of functional 
     disabilities becomes available. The Secretary shall report to 
     the Congress on its findings under the preceding sentence as 
     determined appropriate by the Secretary.
       (d) Activity of Daily Living Defined.--For purposes of this 
     subtitle, the term ``activity of daily living'' means any of 
     the following: eating, toileting, dressing, bathing, and 
     transferring.

     SEC. 7504. HOME AND COMMUNITY-BASED SERVICES COVERED UNDER 
                   STATE PLAN.

       (a) Specification.--
       (1) In general.--Subject to the succeeding provisions of 
     this section, the State plan under this subtitle shall 
     specify--
       (A) the home and community-based services available under 
     the plan to individuals with disabilities (or to such 
     categories of such individuals); and
       (B) any limits with respect to such services.
       (2) Flexibility in meeting individual needs.--Subject to 
     subsection (e)(2), such services may be delivered in an 
     individual's home, a range of community residential 
     arrangements, or outside the home.
       (b) Requirement for Needs Assessment and Plan of Care.--
       (1) In general.--The State plan shall provide for home and 
     community-based services to an individual with disabilities 
     only if the following requirements are met:
       (A) Comprehensive assessment.--
       (i) In general.--A comprehensive assessment of an 
     individual's need for home and community-based services 
     (regardless of whether all needed services are available 
     under the plan) shall be made in accordance with a uniform, 
     comprehensive assessment tool that shall be used by a State 
     under this paragraph with the approval of the Secretary. The 
     comprehensive assessment shall be made by a public or 
     nonprofit agency that is specified under the State plan and 
     that is not a provider of home and community-based services 
     under this subtitle.
       (ii) Exception.--The State may elect to waive the 
     provisions of clause (i) if--
       (I) with respect to any area of the State, the State has 
     determined that there is an insufficient pool of entities 
     willing to perform comprehensive assessments in such area due 


[[Page S 16122]]
     to a low population of individuals eligible for home and community-
     based services under this subtitle residing in the area; and
       (II) the State plan specifies procedures that the State 
     will implement in order to avoid conflicts of interest.
       (B) Individualized plan of care.--
       (i) In general.--An individualized plan of care based on 
     the assessment made under subparagraph (A) shall be developed 
     by a public or nonprofit agency that is specified under the 
     State plan and that is not a provider of home and community-
     based services under this subtitle, except that the State may 
     elect to waive the provisions of this sentence if, with 
     respect to any area of the State, the State has determined 
     there is an insufficient pool of entities willing to develop 
     individualized plans of care in such area due to a low 
     population of individuals eligible for home and community-
     based services under this subtitle residing in the area, 
     and the State plan specifies procedures that the State 
     will implement in order to avoid conflicts of interest.
       (ii) Requirments with respect to plan of care.--A plan of 
     care under this subparagraph shall--
       (I) specify which services included under the individual 
     plan will be provided under the State plan under this 
     subtitle;
       (II) identify (to the extent possible) how the individual 
     will be provided any services specified under the plan of 
     care and not provided under the State plan;
       (III) specify how the provision of services to the 
     individual under the plan will be coordinated with the 
     provision of other health care services to the individual; 
     and
       (IV) be reviewed and updated every 6 months (or more 
     frequently if there is a change in the individual's 
     condition).

     The State shall make reasonable efforts to identify and 
     arrange for services described in subclause (II). Nothing in 
     this subsection shall be construed as requiring a State 
     (under the State plan or otherwise) to provide all the 
     services specified in such a plan.
       (C) Involvement of individuals.--The individualized plan of 
     care under subparagraph (B) for an individual with 
     disabilities shall--
       (i) be developed by qualified individuals (specified in 
     subparagraph (B));
       (ii) be developed and implemented in close consultation 
     with the individual (or the individual's designated 
     representative); and
       (iii) be approved by the individual (or the individual's 
     designated representative).
       (c) Requirement for Care Management.--
       (1) In general.--The State shall make available to each 
     category of individuals with disabilities care management 
     services that at a minimum include--
       (A) arrangements for the provision of such services; and
       (B) monitoring of the delivery of services.
       (2) Care management services.--
       (A) In general.--Except as provided in subparagraph (B), 
     the care management services described in paragraph (1) shall 
     be provided by a public or private entity that is not 
     providing home and community-based services under this 
     subtitle.
       (B) Exception.--A person who provides home and community-
     based services under this subtitle may provide care 
     management services if--
       (i) the State determines that there is an insufficient pool 
     of entities willing to provide such services in an area due 
     to a low population of individuals eligible for home and 
     community-based services under this subtitle residing in such 
     area; and
       (ii) the State plan specifies procedures that the State 
     will implement in order to avoid conflicts of interest.
       (d) Mandatory Coverage of Personal Assistance Services.--
     The State plan shall include, in the array of services made 
     available to each category of individuals with disabilities, 
     both agency-administered and consumer-directed personal 
     assistance services (as defined in subsection (h)).
       (e) Additional Services.--
       (1) Types of services.--Subject to subsection (f), services 
     available under a State plan under this subtitle may include 
     any (or all) of the following:
       (A) Homemaker and chore assistance.
       (B) Home modifications.
       (C) Respite services.
       (D) Assistive technology devices, as defined in section 
     3(2) of the Technology-Related Assistance of Individuals With 
     Disabilities Act of 1988 (29 U.S.C. 2202(2)).
       (E) Adult day services.
       (F) Habilitation and rehabilitation.
       (G) Supported employment.
       (H) Home health services.
       (I) Transportation.
       (J) Any other care or assistive services specified by the 
     State and approved by the Secretary that will help 
     individuals with disabilities to remain in their homes and 
     communities.
       (2) Criteria for selection of services.--The State electing 
     services under paragraph (1) shall specify in the State 
     plan--
       (A) the methods and standards used to select the types, and 
     the amount, duration, and scope, of services to be covered 
     under the plan and to be available to each category of 
     individuals with disabilities; and
       (B) how the types, and the amount, duration, and scope, of 
     services specified, within the limits of available funding, 
     provide substantial assistance in living independently to 
     individuals within each of the categories of individuals with 
     disabilities.
       (f) Exclusions and Limitations.--A State plan may not 
     provide for coverage of--
       (1) room and board;
       (2) services furnished in a hospital, nursing facility, 
     intermediate care facility for the mentally retarded, or 
     other institutional setting specified by the Secretary; or
       (3) items and services to the extent coverage is provided 
     for the individual under a health plan or the Medicare 
     program.
       (g) Payment for Services.--In order to pay for covered 
     services, a State plan may provide for the use of--
       (1) vouchers;
       (2) cash payments directly to individuals with 
     disabilities;
       (3) capitation payments to health plans; and
       (4) payment to providers.
       (h) Personal Assistance Services.--
       (1) In general.--For purposes of this subtitle, the term 
     ``personal assistance services'' means those services 
     specified under the State plan as personal assistance 
     services and shall include at least hands-on and standby 
     assistance, supervision, cueing with activities of daily 
     living, and such instrumental activities of daily living as 
     deemed necessary or appropriate, whether agency-administered 
     or consumer-directed (as defined in paragraph (2)). Such 
     services shall include services that are determined to be 
     necessary to help all categories of individuals with 
     disabilities, regardless of the age of such individuals or 
     the nature of the disabling conditions of such individuals.
       (2) Consumer-directed.--For purposes of this subtitle:
       (A) In general.--The term ``consumer-directed'' means, with 
     reference to personal assistance services or the provider of 
     such services, services that are provided by an individual 
     who is selected and managed (and, at the option of the 
     service recipient, trained) by the individual receiving the 
     services.
       (B) State responsibilities.--A State plan shall ensure that 
     where services are provided in a consumer-directed manner, 
     the State shall create or contract with an entity, other than 
     the consumer or the individual provider, to--
       (i) inform both recipients and providers of rights and 
     responsibilities under all applicable Federal labor and tax 
     law; and
       (ii) assume responsibility for providing effective billing, 
     payments for services, tax withholding, unemployment 
     insurance, and workers' compensation coverage, and act as the 
     employer of the home care provider.
       (C) Right of consumers.--Notwithstanding the State 
     responsibilities described in subparagraph (B), service 
     recipients, and, where appropriate, their designated 
     representative, shall retain the right to independently 
     select, hire, terminate, and direct (including manage, train, 
     schedule, and verify services provided) the work of a home 
     care provider.
       (3) Agency administered.--For purposes of this subtitle, 
     the term ``agency-administered'' means, with respect to such 
     services, services that are not consumer-directed.

     SEC. 7505. COST SHARING.

       (a) No Cost Sharing for Poorest.--
       (1) In general.--The State plan may not impose any cost 
     sharing for individuals with income (as determined under 
     subsection (d)) less than 150 percent of the official poverty 
     level applicable to a family of the size involved (referred 
     to in paragraph (2)).
       (2) Official poverty level.--For purposes of paragraph (1), 
     the term ``official poverty level applicable to a family of 
     the size involved'' means, for a family for a year, the 
     official poverty line (as defined by the Office of Management 
     and Budget, and revised annually in accordance with section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2)) applicable to a family of the size involved.
       (b) Sliding Scale for Remainder.--
       (1) Required coininsurance.--The State plan shall impose 
     cost sharing in the form of coinsurance (based on the amount 
     paid under the State plan for a service)--
       (A) at a rate of 10 percent for individuals with 
     disabilities with income not less than 150 percent, and less 
     than 175 percent, of such official poverty line (as so 
     applied);
       (B) at a rate of 15 percent for such individuals with 
     income not less than 175 percent, and less than 225 percent, 
     of such official poverty line (as so applied);
       (C) at a rate of 25 percent for such individuals with 
     income not less than 225 percent, and less than 275 percent, 
     of such official poverty line (as so applied);
       (D) at a rate of 30 percent for such individuals with 
     income not less than 275 percent, and less than 325 percent, 
     of such official poverty line (as so applied);
       (E) at a rate of 35 percent for such individuals with 
     income not less that 325 percent, and less than 400 percent, 
     of such official poverty line (as so applied); and
       (F) at a rate of 40 percent for such individuals with 
     income equal to at least 400 percent of such official poverty 
     line (as so applied).
       (2) Required annual deductible.--The State plan shall 
     impose cost sharing in the form of an annual deductible--
       (A) of $100 for individuals with disabilities with income 
     not less than 150 percent, and less than 175 percent, of such 
     official poverty line (as so applied);
       (B) of $200 for such individuals with income not less than 
     175 percent, and less than 225 percent, of such official 
     poverty line (as so applied);
       (C) of $300 for such individuals with income not less than 
     225 percent, and less than 275 percent, of such official 
     poverty line (as so applied);
       (D) of $400 for such individuals with income not less than 
     275 percent, and less than 325 

[[Page S 16123]]
     percent, of such official poverty line (as so applied);
       (E) of $500 for such individuals with income not less than 
     325 percent, and less than 400 percent, of such official 
     poverty line (as so applied); and
       (F) of $600 for such individuals with income equal to at 
     least 400 percent of such official poverty line (as so 
     applied).
       (c) Recommendation of the Secretary.--The Secretary shall 
     make recommendations to the States as to how to reduce cost-
     sharing for individuals with extraordinary out-of-pocket 
     costs for whom the cost-sharing provisions of this section 
     could jeopardize their ability to take advantage of the 
     services offered under this subtitle. The Secretary shall 
     establish a methodology for reducing the cost-sharing burden 
     for individuals with exceptionally high out-of-pocket costs 
     under this subtitle.
       (d) Determination of Income for Purposes of Cost Sharing.--
     The State plan shall specify the process to be used to 
     determine the income of an individual with disabilities for 
     purposes of this section. Such standards shall include a 
     uniform Federal definition of income and any allowable 
     deductions from income.

     SEC. 7506. QUALITY ASSURANCE AND SAFEGUARDS.

       (a) Quality Assurance.--
       (1) In general.--The State plan shall specify how the State 
     will ensure and monitor the quality of services, including--
       (A) safeguarding the health and safety of individuals with 
     disabilities;
       (B) setting the minimum standards for agency providers and 
     how such standards will be enforced;
       (C) setting the minimum competency requirements for agency 
     provider employees who provide direct services under this 
     subtitle and how the competency of such employees will be 
     enforced;
       (D) obtaining meaningful consumer input, including consumer 
     surveys that measure the extent to which participants receive 
     the services described in the plan of care and participant 
     satisfaction with such services;
       (E) establishing a process to receive, investigate, and 
     resolve allegations of neglect or abuse;
       (F) establishing optional training programs for individuals 
     with disabilities in the use and direction of consumer 
     directed providers of personal assistance services;
       (G) establishing an appeals procedure for eligibility 
     denials and a grievance procedure for disagreements with the 
     terms of an individualized plan of care;
       (H) providing for participation in quality assurance 
     activities; and
       (I) specifying the role of the Long-Term Care Ombudsman 
     (under the Older Americans Act of 1965 (42 U.S.C. 3001 et 
     seq.)) and the protection and advocacy system (established 
     under section 142 of the Developmental Disabilities 
     Assistance and Bill of Rights Act (42 U.S.C. 6042)) in 
     assuring quality of services and protecting the rights of 
     individuals with disabilities.
       (2) Issuance of regulations.--Not later than 1 year after 
     the date of enactment of this Act, the Secretary shall issue 
     regulations implementing the quality provisions of this 
     subsection.
       (b) Federal Standards.--The State plan shall adhere to 
     Federal quality standards in the following areas:
       (1) Case review of a specified sample of client records.
       (2) The mandatory reporting of abuse, neglect, or 
     exploitation.
       (3) The development of a registry of provider agencies or 
     home care workers and consumer directed providers of personal 
     assistance services against whom any complaints have been 
     sustained, which shall be available to the public.
       (4) Sanctions to be imposed on States or providers, 
     including disqualification from the program, if minimum 
     standards are not met.
       (5) Surveys of client satisfaction.
       (6) State optional training programs for informal 
     caregivers.
       (c) Client Advocacy.--
       (1) In general.--The State plan shall provide that the 
     State will expend the amount allocated under section 
     7509(b)(2) for client advocacy activities. The State may use 
     such funds to augment the budgets of the Long-Term Ombudsman 
     (under the Older Americans Act of 1965 (42 U.S.C. 3001 et 
     seq.) and the protection and advocacy system (established 
     under section 142 of the Developmental Disabilities 
     Assistance and Bill of Rights Act (42 U.S.C. 6042)) or may 
     establish a separate and independent client advocacy office 
     in accordance with paragraph (2) to administer a new program 
     designed to advocate for client rights.
       (2) Client advocacy office.--
       (A) In general.--A client advocacy office established under 
     this paragraph shall--
       (i) identify, investigate, and resolve complaints that--
       (I) are made by, or on behalf of, clients; and
       (II) relate to action, inaction, or decisions, that may 
     adversely affect the health, safety, welfare, or rights of 
     the clients (including the welfare and rights of the clients 
     with respect to the appointment and activities of guardians 
     and representatives payees) of--
       (aa) providers, or representatives of providers, of long-
     term care services;
       (bb) public agencies; or
       (cc) health and social service agencies;
       (ii) provide services to assist the clients in protecting 
     the health, safety, welfare, and rights of the clients;
       (iii) inform the clients about means of obtaining services 
     provided by providers or agencies described in clause (i)(II) 
     or services described in clause (ii);
       (iv) ensure that the clients have regular and timely access 
     to the services provided through the office and that the 
     clients and complainants receive timely responses from 
     representatives of the office to complaints; and
       (v) represent the interests of the clients before 
     governmental agencies and seek administrative, legal, and 
     other remedies to protect the health, safety, welfare, and 
     rights of the clients with regard to the provisions of this 
     subtitle.
       (B) Contracts and arrangements.--
       (i) In general.--Except as provided in clause (ii), the 
     State agency may establish and operate the office, and carry 
     out the program, directly, or by contract or other 
     arrangement with any public agency or nonprofit private 
     organization.
       (ii) Licensing and certification organizations; 
     associations.--The State agency may not enter into the 
     contract or other arrangement described in clause (i) with an 
     agency or organization that is responsible for licensing, 
     certifying, or providing long-term care services in the 
     State.
       (d) Safeguards.--
       (1) Confidentiality.--The State plan shall provide 
     safeguards that restrict the use or disclosure of information 
     concerning applicants and beneficiaries to purposes directly 
     connected with the administration of the plan.
       (2) Safeguards against abuse.--The State plans shall 
     provide safeguards against physical, emotional, or financial 
     abuse or exploitation (specifically including appropriate 
     safeguards in cases where payment for program benefits is 
     made by cash payments or vouchers given directly to 
     individuals with disabilities). All providers of services 
     shall be required to register with the State agency.
       (3) Regulations.--Not later than January 1, 1997, the 
     Secretary shall promulgate regulations with respect to the 
     requirements on States under this subsection.
       (e) Specified Rights.--The State plan shall provide that in 
     furnishing home and community-based services under the plan 
     the following individual rights are protected:
       (1) The right to be fully informed in advance, orally and 
     in writing, of the care to be provided, to be fully informed 
     in advance of any changes in care to be provided, and (except 
     with respect to an individual determined incompetent) to 
     participate in planning care or changes in care.
       (2) The right to--
       (A) voice grievances with respect to services that are (or 
     fail to be) furnished without discrimination or reprisal for 
     voicing grievances;
       (B) be told how to complain to State and local authorities; 
     and
       (C) prompt resolution of any grievances or complaints.
       (3) The right to confidentiality of personal and clinical 
     records and the right to have access to such records.
       (4) The right to privacy and to have one's property treated 
     with respect.
       (5) The right to refuse all or part of any care and to be 
     informed of the likely consequences of such refusal.
       (6) The right to education or training for oneself and for 
     members of one's family or household on the management of 
     care.
       (7) The right to be free from physical or mental abuse, 
     corporal punishment, and any physical or chemical restraints 
     imposed for purposes of discipline or convenience and not 
     included in an individual's plan of care.
       (8) The right to be fully informed orally and in writing of 
     the individual's rights.
       (9) The right to a free choice of providers.
       (10) The right to direct provider activities when an 
     individual is competent and willing to direct such 
     activities.

     SEC. 7507. ADVISORY GROUPS.

       (a) Federal Advisory Group.--
       (1) Establishment.--The Secretary shall establish an 
     advisory group, to advise the Secretary and States on all 
     aspects of the program under this subtitle.
       (2) Composition.--The group shall be composed of 
     individuals with disabilities and their representatives, 
     providers, Federal and State officials, and local community 
     implementing agencies. A majority of its members shall be 
     individuals with disabilities and their representatives.
       (b) State Advisory Groups.--
       (1) In general.--Each State plan shall provide for the 
     establishment and maintenance of an advisory group to advise 
     the State on all aspects of the State plan under this 
     subtitle.
       (2) Composition.--Members of each advisory group shall be 
     appointed by the Governor (or other chief executive officer 
     of the State) and shall include individuals with disabilities 
     and their representatives, providers, State officials, and 
     local community implementing agencies. A majority of its 
     members shall be individuals with disabilities and their 
     representatives. The members of the advisory group shall be 
     selected from those nominated as described in paragraph (3).
       (3) Selection of members.--Each State shall establish a 
     process whereby all residents of the State, including 
     individuals with disabilities and their representatives, 
     shall be given the opportunity to nominate members to the 
     advisory group.
       (4) Particular concerns.--Each advisory group shall--

[[Page S 16124]]

       (A) before the State plan is developed, advise the State on 
     guiding principles and values, policy directions, and 
     specific components of the plan;
       (B) meet regularly with State officials involved in 
     developing the plan, during the development phase, to review 
     and comment on all aspects of the plan;
       (C) participate in the public hearings to help assure that 
     public comments are addressed to the extent practicable;
       (D) report to the Governor and make available to the public 
     any differences between the group's recommendations and the 
     plan;
       (E) report to the Governor and make available to the public 
     specifically the degree to which the plan is consumer-
     directed; and
       (F) meet regularly with officials of the designated State 
     agency (or agencies) to provide advice on all aspects of 
     implementation and evaluation of the plan.

     SEC. 7508. PAYMENTS TO STATES.

       (a) In General.--Subject to section 7502(a)(9)(C) (relating 
     to limitation on payment for administrative costs), the 
     Secretary, in accordance with the Cash Management Improvement 
     Act, shall authorize payment to each State with a plan 
     approved under this subtitle, for each quarter (beginning on 
     or after January 1, 1997), from its allotment under section 
     7509(b), an amount equal to--
       (1)(A) with respect to the amount demonstrated by State 
     claims to have been expended during the year for home and 
     community-based services under the plan for individuals with 
     disabilities that does not exceed 20 percent of the amount 
     allotted to the State under section 7509(b), 100 percent of 
     such amount; and
       (B) with respect to the amount demonstrated by State claims 
     to have been expended during the year for home and community-
     based services under the plan for individuals with 
     disabilities that exceeds 20 percent of the amount allotted 
     to the State under section 7509(b), the Federal home and 
     community-based services matching percentage (as defined in 
     subsection (b)) of such amount; plus
       (2) an amount equal to 90 percent of the amount 
     demonstrated by the State to have been expended during the 
     quarter for quality assurance activities under the plan; plus
       (3) an amount equal to 90 percent of amount expended during 
     the quarter under the plan for activities (including 
     preliminary screening) relating to determination of 
     eligibility and performance of needs assessment; plus
       (4) an amount equal to 90 percent (or, beginning with 
     quarters in fiscal year 2005, 75 percent) of the amount 
     expended during the quarter for the design, development, and 
     installation of mechanical claims processing systems and for 
     information retrieval; plus
       (5) an amount equal to 50 percent of the remainder of the 
     amounts expended during the quarter as found necessary by the 
     Secretary for the proper and efficient administration of the 
     State plan.
       (b) Federal Home and Community-Based Services Matching 
     Percentage.--In subsection (a), the term ``Federal home and 
     community-based services matching percentage'' means, with 
     respect to a State, the State's Federal medical assistance 
     percentage (as defined in section 2122(c) of the Social 
     Security Act) increased by 15 percentage points, except that 
     the Federal home and community-based services matching 
     percentage shall in no case be more than 95 percent.
       (c) Payments on Estimates With Retrospective Adjustments.--
     The method of computing and making payments under this 
     section shall be as follows:
       (1) The Secretary shall, prior to the beginning of each 
     quarter, estimate the amount to be paid to the State under 
     subsection (a) for such quarter, based on a report filed by 
     the State containing its estimate of the total sum to be 
     expended in such quarter, and such other information as the 
     Secretary may find necessary.
       (2) From the allotment available therefore, the Secretary 
     shall provide for payment of the amount so estimated, reduced 
     or increased, as the case may be, by any sum (not previously 
     adjusted under this section) by which the Secretary finds 
     that the estimate of the amount to be paid the State for any 
     prior period under this section was greater or less than the 
     amount that should have been paid.
       (d) Application of Rules Regarding Limitations on Provider-
     Related donations and health Care-Related Taxes.--The 
     provisions of section 2122(d) of the Social Security Act 
     shall apply to payments to States under this section in the 
     same manner as they apply to payments to States under section 
     2122(a) of such Act.
       (e) Failure To Comply With State Plan.--If a State 
     furnishing home and community-based services under this 
     subtitle fails to comply with the State plan approved under 
     this subtitle, the Secretary may either reduce the Federal 
     matching rates available to the State under subsection (a) or 
     withhold an amount of funds determined appropriate by the 
     Secretary from any payment to the State under this section.

     SEC. 7509. APPROPRIATIONS; ALLOTMENTS TO STATES.

       (a) Appropriations.--
       (1) Fiscal years 1997 through 2005.--Subject to paragraph 
     (5)(C), for purposes of this subtitle, the appropriation 
     authorized under this subtitle for each of fiscal years 1997 
     through 2005 is the following:
       (A) For fiscal year 1997, $800,000,000.
       (B) For fiscal year 1998, $1,600,000,000.
       (C) For fiscal year 1999, $2,600,000,000.
       (D) For fiscal year 2000, $3,700,000,000.
       (E) For fiscal year 2001, $5,000,000,000.
       (F) For fiscal year 2002, $6,500,000,000.
       (G) For fiscal year 2003, $8,200,000,000.
       (H) For fiscal year 2004, $10,100,000,000.
       (I) For fiscal year 2005, $12,100,000,000.
       (2) Subsequent fiscal years.--For purposes of this 
     subtitle, the appropriation authorized for State plans under 
     this subtitle for each fiscal year after fiscal year 2005 is 
     the appropriation authorized under this subsection for the 
     preceding fiscal year multiplied by--
       (A) a factor (described in paragraph (3)) reflecting the 
     change in the consumer price index for the fiscal year; and
       (B) a factor (described in paragraph (4)) reflecting the 
     change in the number of individuals with disabilities for the 
     fiscal year.
       (3) CPI increase factor.--For purposes of paragraph (2)(A), 
     the factor described in this paragraph for a fiscal year is 
     the ratio of--
       (A) the annual average index of the consumer price index 
     for the preceding fiscal year, to--
       (B) such index, as so measured, for the second preceding 
     fiscal year.
       (4) Disabled population factor.--For purposes of paragraph 
     (2)(B), the factor described in this paragraph for a fiscal 
     year is 100 percent plus (or minus) the percentage increase 
     (or decrease) change in the disabled population of the United 
     States (as determined for purposes of the most recent update 
     under subsection (b)(3)(D)).
       (5) Additional funds due to medicaid offsets.--
       (A) In general.--Each participating State must provide the 
     Secretary with information concerning offsets and reductions 
     in the medicaid program resulting from home and community-
     based services provided disabled individuals under this 
     subtitle, that would have been paid for such individuals 
     under the State medicaid plan. At the time a State first 
     submits its plan under this subtitle and before each 
     subsequent fiscal year (through fiscal year 2005), the State 
     also must provide the Secretary with such budgetary 
     information (for each fiscal year through fiscal year 2005), 
     as the Secretary determines to be necessary to carry out this 
     paragraph.
       (B) Reports.--Each State with a program under this subtitle 
     shall submit such reports to the Secretary as the Secretary 
     may require in order to monitor compliance with subparagraph 
     (A). The Secretary shall specify the format of such reports 
     and establish uniform data reporting elements.
       (C) Adjustments to appropriations.--
       (i) In General.--For each fiscal year (beginning with 
     fiscal year 1997 and ending with fiscal year 2005) and based 
     on a review of information submitted under subparagraph (A), 
     the Secretary shall determine the amount by which the 
     appropriation authorized under subsection (a) will increase. 
     The amount of such increase for a fiscal year shall be 
     limited to the reduction in Federal expenditures of medical 
     assistance (as determined by Secretary) that would have been 
     made under title XXI of the Social Security Act but for the 
     provision of home and community-based services under the 
     program under this subtitle.
       (ii) Annual publication.--The Secretary shall publish 
     before the beginning of such fiscal year, the revised 
     appropriation authorized under this subsection for such 
     fiscal year.
       (D) Construction.--Nothing in this subsection shall be 
     construed as requiring States to determine eligibility for 
     medical assistance under the State medicaid plan on behalf of 
     individuals receiving assistance under this subtitle.
       (b) Allotments to States.--
       (1) In general.--The Secretary shall allot the amounts 
     available under the appropriation authorized for the fiscal 
     year under paragraph (1) subsection (a) (without regard to 
     any adjustment to such amount under paragraph (5) of such 
     subsection), to the States with plans approved under this 
     subtitle in accordance with an allocation formula developed 
     by the Secretary that takes into account--
       (A) the percentage of the total number of individuals with 
     disabilities in all States that reside in a particular State;
       (B) the per capita costs of furnishing home and community-
     based services to individuals with disabilities in the State; 
     and
       (C) the percentage of all individuals with incomes at or 
     below 150 percent of the official poverty line (as described 
     in section 7505(a)(2)) in all States that reside in a 
     particular State.
       (2) Allocation for client advocacy activities.--Each State 
     with a plan approved under this subtitle shall allocate one-
     half of one percent of the State's total allotment under 
     paragraph (1) for client advocacy activities as described in 
     section 7506(c).
       (3) No duplicate payment.--No payment may be made to a 
     State under this section for any services provided to an 
     individual to the extent that the State received payment for 
     such services under section 2122(a) of the Social Security 
     Act.
       (4) Reallocations.--Any amounts allotted to States under 
     this subsection for a year that are not expended in such year 
     shall remain available for State programs under this subtitle 
     and may be reallocated to States as the Secretary determines 
     appropriate.
       (5) Savings due to medicaid offsets.--
       (A) In general.--Except as provided in subparagraph (B), 
     from the total amount of the increase in the amount available 
     for a fiscal year under paragraph (1) of subsection 

[[Page S 16125]]
     (a) resulting from the application of paragraph (5) of such subsection, 
     the Secretary shall allot to each State with a plan approved 
     under this subtitle, an amount equal to the Federal offsets 
     and reductions in the State's medicaid plan for such fiscal 
     year that was reported to the Secretary under subsection 
     (a)(5), reduced or increased, as the case may be, by any 
     amount by which the Secretary determines that any estimated 
     Federal offsets and reductions in such State's medicaid plan 
     reported to the Secretary under subsection (a)(5) for the 
     previous fiscal year were greater or less than the actual 
     Federal offsets and reductions in such State's medicaid plan.
       (B) Cap on state savings allotment.--In no case shall the 
     allotment made under this paragraph to any State for a fiscal 
     year exceed the product of--
       (i) the Federal medical assistance percentage for such 
     State (as defined under section 2122(c) of the Social 
     Security Act); multiplied by
       (ii)(I) for fiscal year 1997, the base medical assistance 
     amount for the State (as determined under subparagraph (C)) 
     updated through the midpoint of fiscal year 1997 by the 
     estimated percentage change in the index described in section 
     7502(a)(1)(B)(iii) during the period beginning on October 
     1, 1995, and ending at that midpoint; and
       (II) for succeeding fiscal years, an amount equal to the 
     amount determined under this clause for the previous fiscal 
     year updated through the midpoint of the year by the 
     estimated percentage change in such index during the 12-month 
     period ending at that midpoint, with appropriate adjustments 
     to reflect previous underestimations or overestimations under 
     this clause in the projected percentage change in such index.
       (C) Base medical assistance amount.--The base medical 
     assistance amount for a State is an amount equal to the total 
     expenditures from Federal and State funds made under the 
     State plan under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) during fiscal year 1995 with respect to 
     medical assistance consisting of the services described in 
     section 7502(a)(1)(C).
       (c) State Entitlement.--This subtitle constitutes budget 
     authority in advance of appropriations Acts, and represents 
     the obligation of the Federal Government to provide for the 
     payment to States of amounts described in subsection (a).

     SEC. 7510. REPEALS.

       Section 12111 and chapter 1 of subtitle C of title XII of 
     this Act are hereby repealed.
                                 ______


                        KOHL AMENDMENT NO. 3002

  (Ordered to lie on the table.)
  Mr. KOHL submitted an amendment intended to be proposed by him to the 
bill S. 1357, supra; as follows:

       At the end of chapter 8 of subtitle I of title XII, insert 
     the following new sections:

     SEC. 12879. ROLLOVER OF GAIN FROM SALE OF FARM ASSETS TO 
                   INDIVIDUAL RETIREMENT PLANS.

       (a) In General.--Part III of subchapter O of chapter 1 
     (relating to common nontaxable exchanges) is amended by 
     inserting after section 1034 the following new section:

     ``SEC. 1034A. ROLLOVER OF GAIN ON SALE OF FARM ASSETS INTO 
                   ASSET ROLLOVER ACCOUNT.

       ``(a) Nonrecognition of Gain.--Subject to the limits of 
     subsection (c), if a taxpayer has a qualified net farm gain 
     from the sale of a qualified farm asset, then, at the 
     election of the taxpayer, gain (if any) from such sale shall 
     be recognized only to the extent such gain exceeds the 
     contributions to 1 or more asset rollover accounts of the 
     taxpayer for the taxable year in which such sale occurs.
       ``(b) Asset Rollover Account.--
       ``(1) General rule.--Except as provided in this section, an 
     asset rollover account shall be treated for purposes of this 
     title in the same manner as an individual retirement plan.
       ``(2) Asset rollover account.--For purposes of this title, 
     the term `asset rollover account' means an individual 
     retirement plan which is designated at the time of the 
     establishment of the plan as an asset rollover account. Such 
     designation shall be made in such manner as the Secretary may 
     prescribe.
       ``(c) Contribution Rules.--
       ``(1) No deduction allowed.--No deduction shall be allowed 
     under section 219 for a contribution to an asset rollover 
     account.
       ``(2) Aggregate contribution limitation.--Except in the 
     case of rollover contributions, the aggregate amount for all 
     taxable years which may be contributed to all asset rollover 
     accounts established on behalf of an individual shall not 
     exceed--
       ``(A) $500,000 ($250,000 in the case of a separate return 
     by a married individual), reduced by
       ``(B) the amount by which the aggregate value of the assets 
     held by the individual (and spouse) in individual retirement 
     plans (other than asset rollover accounts) exceeds $100,000.
     The determination under subparagraph (B) shall be made as of 
     the close of the taxable year for which the determination is 
     being made.
       ``(3) Annual contribution limitations.--
       ``(A) General rule.--The aggregate contribution which may 
     be made in any taxable year to all asset rollover accounts 
     shall not exceed 100 percent of the lesser of--
       ``(i) the qualified net farm gain for the taxable year, or
       ``(ii) an amount determined by multiplying the number of 
     years the taxpayer is a qualified farmer by $10,000.
       ``(B) Spouse.--In the case of a married couple filing a 
     joint return under section 6013 for the taxable year, 
     subparagraph (A) shall be applied by substituting `$20,000' 
     for `$10,000' for each year the taxpayer's spouse is a 
     qualified farmer.
       ``(4) Adjustment to annual contribution limitation.--The 
     Secretary may reduce the percentage limitation in paragraph 
     (3)(A) to such lower percentage as the Secretary determines 
     necessary to assure that the aggregate amount of deductions 
     for all individuals for a taxable year does not exceed the 
     aggregate amount of the increases in receipts for the taxable 
     year by reason of the amendments made by sections 12880 and 
     12881 of the Balanced Budget Reconciliation Act of 1995.
       ``(5) Time when contribution deemed made.--For purposes of 
     this section, a taxpayer shall be deemed to have made a 
     contribution to an asset rollover account on the last day of 
     the preceding taxable year if the contribution is made on 
     account of such taxable year and is made not later than the 
     time prescribed by law for filing the return for such taxable 
     year (not including extensions thereof).
       ``(d) Qualified Net Farm Gain; Etc.--For purposes of this 
     section--
       ``(1) Qualified net farm gain.--The term `qualified net 
     farm gain' means the lesser of--
       ``(A) the net capital gain of the taxpayer for the taxable 
     year, or
       ``(B) the net capital gain for the taxable year determined 
     by only taking into account gain (or loss) in connection with 
     a disposition of a qualified farm asset.
       ``(2) Qualified farm asset.--The term `qualified farm 
     asset' means an asset used by a qualified farmer in the 
     active conduct of the trade or business of farming (as 
     defined in section 2032A(e)).
       ``(3) Qualified farmer.--
       ``(A) In general.--The term `qualified farmer' means a 
     taxpayer who--
       ``(i) during the 5-year period ending on the date of the 
     disposition of a qualified farm asset materially participated 
     in the trade or business of farming, and
       ``(ii) owned (or who with the taxpayer's spouse owned) 50 
     percent or more of such trade or business during such 5-year 
     period.
       ``(B) Material participation.--For purposes of this 
     paragraph, a taxpayer shall be treated as materially 
     participating in a trade or business if the taxpayer meets 
     the requirements of section 2032A(e)(6).
       ``(4) Rollover contributions.--Rollover contributions to an 
     asset rollover account may be made only from other asset 
     rollover accounts.
       ``(e) Distribution Rules.--For purposes of this title, the 
     rules of paragraphs (1) and (2) of section 408(d) shall apply 
     to any distribution from an asset rollover account.
       ``(f) Individual Required To Report Qualified 
     Contributions.--
       ``(1) In general.--Any individual who--
       ``(A) makes a contribution to any asset rollover account 
     for any taxable year, or
       ``(B) receives any amount from any asset rollover account 
     for any taxable year,

     shall include on the return of tax imposed by chapter 1 for 
     such taxable year and any succeeding taxable year (or on such 
     other form as the Secretary may prescribe) information 
     described in paragraph (2).
       ``(2) Information required to be supplied.--The information 
     described in this paragraph is information required by the 
     Secretary which is similar to the information described in 
     section 408(o)(4)(B).
       ``(3) Penalties.--For penalties relating to reports under 
     this paragraph, see section 6693(b).''.
       (b) Contributions Not Deductible.--Section 219(d) (relating 
     to other limitations and restrictions) is amended by adding 
     at the end the following new paragraph:
       ``(5) Contributions to asset rollover accounts.--No 
     deduction shall be allowed under this section with respect to 
     a contribution under section 1034A.''.
       (c) Excess Contributions.--
       (1) In general.--Section 4973 (relating to tax on excess 
     contributions to individual retirement accounts, certain 
     section 403(b) contracts, and certain individual retirement 
     annuities) is amended by adding at the end the following new 
     subsection:
       ``(d) Asset Rollover Accounts.--For purposes of this 
     section, in the case of an asset rollover account referred to 
     in subsection (a)(1), the term `excess contribution' means 
     the excess (if any) of the amount contributed for the taxable 
     year to such account over the amount which may be contributed 
     under section 1034A.''.
       (2) Conforming amendments.--
       (A) Section 4973(a)(1) is amended by striking ``or'' and 
     inserting ``an asset rollover account (within the meaning of 
     section 1034A), or''.
       (B) The heading for section 4973 is amended by inserting 
     ``ASSET ROLLOVER ACCOUNTS,'' after ``contracts''.
       (C) The table of sections for chapter 43 is amended by 
     inserting ``asset rollover accounts,'' after ``contracts'' in 
     the item relating to section 4973.
       (d) Technical Amendments.--
       (1) Paragraph (1) of section 408(a) (defining individual 
     retirement account) is amended by inserting ``or a qualified 
     contribution under section 1034A,'' before ``no 
     contribution''.

[[Page S 16126]]

       (2) Subparagraph (A) of section 408(d)(5) is amended by 
     inserting ``or qualified contributions under section 1034A'' 
     after ``rollover contributions''.
       (3)(A) Subparagraph (A) of section 6693(b)(1) is amended by 
     inserting ``or 1034A(f)(1)'' after ``408(o)(4)''.
       (B) Section 6693(b)(2) is amended by inserting ``or 
     1034A(f)(1)'' after ``408(o)(4)''.
       (4) The table of sections for part III of subchapter O of 
     chapter 1 is amended by inserting after the item relating to 
     section 1034 the following new item:

``Sec. 1034A. Rollover of gain on sale of farm assets into asset 
              rollover account.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to sales and exchanges after the date of the 
     enactment of this Act.

     SEC. 12880. DISPOSITION OF STOCK IN DOMESTIC CORPORATIONS BY 
                   10-PERCENT FOREIGN SHAREHOLDERS.

       (a) General Rule.--Subpart D of part II of subchapter N of 
     chapter 1 (relating to miscellaneous provisions) is amended 
     by adding at the end the following new section:

     ``SEC. 899. DISPOSITION OF STOCK IN DOMESTIC CORPORATIONS BY 
                   10-PERCENT FOREIGN SHAREHOLDERS.

       ``(a) General Rule.--
       ``(1) Treatment as effectively connected with united states 
     trade or business.--For purposes of this title, if any 
     nonresident alien individual or foreign corporation is a 10-
     percent shareholder in any domestic corporation, any gain or 
     loss of such individual or foreign corporation from the 
     disposition of any stock in such domestic corporation shall 
     be taken into account--
       ``(A) in the case of a nonresident alien individual, under 
     section 871(b)(1), or
       ``(B) in the case of a foreign corporation, under section 
     882(a)(1),

     as if the taxpayer were engaged during the taxable year in a 
     trade or business within the United States through a 
     permanent establishment in the United States and as if such 
     gain or loss were effectively connected with such trade or 
     business and attributable to such permanent establishment. 
     Notwithstanding section 865, any such gain or loss shall be 
     treated as from sources in the United States.
       ``(2) 24-percent minimum tax on nonresident alien 
     individuals.--
       ``(A) In general.--In the case of any nonresident alien 
     individual, the amount determined under section 55(b)(1)(A) 
     shall not be less than 24 percent of the lesser of--
       ``(i) the individual's alternative minimum taxable income 
     (as defined in section 55(b)(2)) for the taxable year, or
       ``(ii) the individual's net taxable stock gain for the 
     taxable year.
       ``(B) Net taxable stock gain.--For purposes of subparagraph 
     (A), the term `net taxable stock gain' means the excess of--
       ``(i) the aggregate gains for the taxable year from 
     dispositions of stock in domestic corporations with respect 
     to which such individual is a 10-percent shareholder, over
       ``(ii) the aggregate of the losses for the taxable year 
     from dispositions of such stock.
       ``(C) Coordination with section 897(a)(2).--Section 
     897(a)(2)(A) shall not apply to any nonresident alien 
     individual for any taxable year for which such individual has 
     a net taxable stock gain, but the amount of such net taxable 
     stock gain shall be increased by the amount of such 
     individual's net United States real property gain (as defined 
     in section 897(a)(2)(B)) for such taxable year.
       ``(b) 10-Percent Shareholder.--
       ``(1) In general.--For purposes of this section, the term 
     `10-percent shareholder' means any person who at any time 
     during the shorter of--
       ``(A) the period beginning on January 1, 1996, and ending 
     on the date of the disposition, or
       ``(B) the 5-year period ending on the date of the 
     disposition,
     owned 10 percent or more (by vote or value) of the stock in 
     the domestic corporation.
       ``(2) Constructive ownership.--
       ``(A) In general.--Section 318(a) (relating to constructive 
     ownership of stock) shall apply for purposes of paragraph 
     (1).
       ``(B) Modifications.--For purposes of subparagraph (A)--
       ``(i) paragraph (2)(C) of section 318(a) shall be applied 
     by substituting `10 percent' for `50 percent', and
       ``(ii) paragraph (3)(C) of section 318(a) shall be 
     applied--

       ``(I) by substituting `10 percent' for `50 percent', and
       ``(II) in any case where such paragraph would not apply but 
     for subclause (I), by considering a corporation as owning the 
     stock (other than stock in such corporation) owned by or for 
     any shareholder of such corporation in that proportion which 
     the value of the stock which such shareholder owns in such 
     corporation bears to the value of all stock in such 
     corporation.

       ``(3) Treatment of stock held by certain partnerships.--
       ``(A) In general.--For purposes of this section, if--
       ``(i) a partnership is a 10-percent shareholder in any 
     domestic corporation, and
       ``(ii) 10 percent or more of the capital or profits 
     interests in such partnership is held (directly or 
     indirectly) by nonresident alien individuals or foreign 
     corporations,

     each partner in such partnership who is not otherwise a 10-
     percent shareholder in such corporation shall, with respect 
     to the stock in such corporation held by the partnership, be 
     treated as a 10-percent shareholder in such corporation.
       ``(B) Exception.--
       ``(i) In general.--Subparagraph (A) shall not apply with 
     respect to stock in a domestic corporation held by any 
     partnership if, at all times during the 5-year period ending 
     on the date of the disposition involved--

       ``(I) the aggregate bases of the stock and securities in 
     such domestic corporation held by such partnership was less 
     than 25 percent of the partnership's net adjusted asset cost, 
     and
       ``(II) the partnership did not own 50 percent or more (by 
     vote or value) of the stock in such domestic corporation.

     The Secretary may by regulations disregard any failure to 
     meet the requirements of subclause (I) where the partnership 
     normally met such requirements during such 5-year period.
       ``(ii) Net adjusted asset cost.--For purposes of clause 
     (i), the term `net adjusted asset cost' means--

       ``(I) the aggregate bases of all of the assets of the 
     partnership other than cash and cash items, reduced by
       ``(II) the portion of the liabilities of the partnership 
     not allocable (on a proportionate basis) to assets excluded 
     under subclause (I).

       ``(C) Exception not to apply to 50-percent partners.--
     Subparagraph (B) shall not apply in the case of any partner 
     owning (directly or indirectly) more than 50 percent of the 
     capital or profits interests in the partnership at any time 
     during the 5-year period ending on the date of the 
     disposition.
       ``(D) Special rules.--For purposes of subparagraph (B) and 
     (C)--
       ``(i) Treatment of predecessors.--Any reference to a 
     partnership or corporation shall be treated as including a 
     reference to any predecessor thereof.
       ``(ii) Partnership not in existence.--If any partnership 
     was not in existence throughout the entire 5-year period 
     ending on the date of the disposition, only the portion of 
     such period during which the partnership (or any predecessor) 
     was in existence shall be taken into account.
       ``(E) Other pass-thru entities; tiered entities.--Rules 
     similar to the rules of the preceding provisions of this 
     paragraph shall also apply in the case of any pass-thru 
     entity other than a partnership and in the case of tiered 
     partnerships and other entities.
       ``(c) Coordination With Nonrecognition Provisions; Etc.--
       ``(1) Coordination with nonrecognition provisions.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any nonrecognition provision shall apply for purposes of this 
     section to a transaction only in the case of--
       ``(i) an exchange of stock in a domestic corporation for 
     other property the sale of which would be subject to taxation 
     under this chapter, or
       ``(ii) a distribution with respect to which gain or loss 
     would not be recognized under section 336 if the sale of the 
     distributed property by the distributee would be subject to 
     tax under this chapter.
       ``(B) Regulations.--The Secretary shall prescribe 
     regulations (which are necessary or appropriate to prevent 
     the avoidance of Federal income taxes) providing--
       ``(i) the extent to which nonrecognition provisions shall, 
     and shall not, apply for purposes of this section, and
       ``(ii) the extent to which--

       ``(I) transfers of property in a reorganization, and

       ``(II) changes in interests in, or distributions from, a 
     partnership, trust, or estate,

     shall be treated as sales of property at fair market value.
       ``(C) Nonrecognition provision.--For purposes of this 
     paragraph, the term `nonrecognition provision' means any 
     provision of this title for not recognizing gain or loss.
       ``(2) Certain other rules made applicable.--For purposes of 
     this section, rules similar to the rules of subsections (g) 
     and (j) of section 897 shall apply.
       ``(d) Certain Interest Treated as Stock.--For purposes of 
     this section--
       ``(1) any option or other right to acquire stock in a 
     domestic corporation,
       ``(2) the conversion feature of any debt instrument issued 
     by a domestic corporation, and
       ``(3) to the extent provided in regulations, any other 
     interest in a domestic corporation other than an interest 
     solely as creditor,
     shall be treated as stock in such corporation.
       ``(e) Treatment of Certain Gain as a Dividend.--In the case 
     of any gain which would be subject to tax by reason of this 
     section but for a treaty and which results from any 
     distribution in liquidation or redemption, for purposes of 
     this subtitle, such gain shall be treated as a dividend to 
     the extent of the earnings and profits of the domestic 
     corporation attributable to the stock. Rules similar to the 
     rules of section 1248(c) (determined without regard to 
     paragraph (2)(D) thereof) shall apply for purposes of the 
     preceding sentence.
       ``(f) Regulations.--The Secretary shall prescribe such 
     regulations as may be appropriate to carry out the purposes 
     of this section, including--
       ``(1) regulations coordinating the provisions of this 
     section with the provisions of section 897, and
       ``(2) regulations aggregating stock held by a group of 
     persons acting together.''

[[Page S 16127]]

       (b) Withholding of Tax.--Subchapter A of chapter 3 is 
     amended by adding at the end the following new section:

     ``SEC. 1447. WITHHOLDING OF TAX ON CERTAIN STOCK 
                   DISPOSITIONS.

       ``(a) General Rule.--Except as otherwise provided in this 
     section, in the case of any disposition of stock in a 
     domestic corporation by a foreign person who is a 10-percent 
     shareholder in such corporation, the withholding agent shall 
     deduct and withhold a tax equal to 10 percent of the amount 
     realized on the disposition.
       ``(b) Exceptions.--
       ``(1) Stock which is not regularly traded.--In the case of 
     a disposition of stock which is not regularly traded, a 
     withholding agent shall not be required to deduct and 
     withhold any amount under subsection (a) if--
       ``(A) the transferor furnishes to such withholding agent an 
     affidavit by such transferor stating, under penalty of 
     perjury, that section 899 does not apply to such disposition 
     because--
       ``(i) the transferor is not a foreign person, or
       ``(ii) the transferor is not a 10-percent shareholder, and
       ``(B) such withholding agent does not know (or have reason 
     to know) that such affidavit is not correct.
       ``(2) Stock which is regularly traded.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a withholding agent shall not be required to deduct and 
     withhold any amount under subsection (a) with respect to any 
     disposition of regularly traded stock if such withholding 
     agent does not know (or have reason to know) that section 899 
     applies to such disposition.
       ``(B) Special rule where substantial disposition.--If--
       ``(i) there is a disposition of regularly traded stock in a 
     corporation, and
       ``(ii) the amount of stock involved in such disposition 
     constitutes 1 percent or more (by vote or value) of the stock 
     in such corporation,

     subparagraph (A) shall not apply but paragraph (1) shall 
     apply as if the disposition involved stock which was not 
     regularly traded.
       ``(C) Notification by foreign person.--If section 899 
     applies to any disposition by a foreign person of regularly 
     traded stock, such foreign person shall notify the 
     withholding agent that section 899 applies to such 
     disposition.
       ``(3) Nonrecognition transactions.--A withholding agent 
     shall not be required to deduct and withhold any amount under 
     subsection (a) in any case where gain or loss is not 
     recognized by reason of section 899(c) (or the regulations 
     prescribed under such section).
       ``(c) Special Rule Where No Withholding.--If
       ``(1) there is no amount deducted and withheld under this 
     section with respect to any disposition to which section 899 
     applies, and
       ``(2) the foreign person does not pay the tax imposed by 
     this subtitle to the extent attributable to such disposition 
     on the date prescribed therefor,

     for purposes of determining the amount of such tax, the 
     foreign person's basis in the stock disposed of shall be 
     treated as zero or such other amount as the Secretary may 
     determine (and, for purposes of section 6501, the 
     underpayment of such tax shall be treated as due to a willful 
     attempt to evade such tax).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Withholding agent.--The term `withholding agent' 
     means--
       ``(A) the last United States person to have the control, 
     receipt, custody, disposal, or payment of the amount realized 
     on the disposition, or
       ``(B) if there is no such United States person, the person 
     prescribed in regulations.
       ``(2) Foreign person.--The term `foreign person' means any 
     person other than a United States person.
       ``(3) Regularly traded stock.--The term `regularly traded 
     stock' means any stock of a class which is regularly traded 
     on an established securities market.
       ``(4) Authority to prescribe reduced amount.--At the 
     request of the person making the disposition or the 
     withholding agent, the Secretary may prescribe a reduced 
     amount to be withheld under this section if the Secretary 
     determines that to substitute such reduced amount will not 
     jeopardize the collection of the tax imposed by section 
     871(b)(1) or 882(a)(1).
       ``(5) Other terms.--Except as provided in this section, 
     terms used in this section shall have the same respective 
     meanings as when used in section 899.
       ``(6) Certain rules made applicable.--Rules similar to the 
     rules of section 1445(e) shall apply for purposes of this 
     section.
       ``(e) Regulations.--The Secretary shall prescribe such 
     regulations as may be appropriate to carry out the purposes 
     of this section, including regulations coordinating the 
     provisions of this section with the provisions of sections 
     1445 and 1446.''
       (c) Exception From Branch Profits Tax.--Subparagraph (C) of 
     section 884(d)(2) is amended to read as follows:
       ``(C) gain treated as effectively connected with the 
     conduct of a trade or business within the United States 
     under--
       ``(i) section 897 in the case of the disposition of a 
     United States real property interest described in section 
     897(c)(1)(A)(ii), or
       ``(ii) section 899,''.
       (d) Reports With Respect to Certain Distributions.--
     Paragraph (2) of section 6038B(a) (relating to notice of 
     certain transfers to foreign person) is amended by striking 
     ``section 336'' and inserting ``section 302, 331, or 336''.
       (e) Clerical Amendments.--
       (1) The table of sections for subpart D of part II of 
     subchapter N of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 899. Dispositions of stock in domestic corporations by 10-
              percent foreign shareholders.''

       (2) The table of sections for subchapter A of chapter 3 is 
     amended by adding at the end the following new item:

``Sec. 1447. Withholding of tax on certain stock dispositions.''

       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to dispositions after December 31, 1995, except that section 
     1447 of the Internal Revenue Code of 1986 (as added by this 
     section) shall not apply to any disposition before the date 
     that is 6 months after the date of the enactment of this Act.
       (2) Coordination with treaties.--Sections 899 (other than 
     subsection (e) thereof) and 1447 of the Internal Revenue Code 
     of 1986 (as added by this section) shall not apply to any 
     disposition by any person if the application of such sections 
     to such disposition would be contrary to any treaty between 
     the United States and a foreign country which was in effect 
     on the date of the enactment of this Act, and at the time of 
     such disposition and if the person making such disposition is 
     entitled to the benefits of such treaty determined after the 
     application of section 894(c) of the Internal Revenue Code of 
     1986 (as added by section 12881).

     SEC. 12881. LIMITATION ON TREATY BENEFITS.

       (a) General Rule.--Section 894 (relating to income affected 
     by treaty) is amended by adding at the end the following new 
     subsection:
       ``(c) Limitation on Treaty Benefits.--
       ``(1) Treaty shopping.--No foreign entity shall be entitled 
     to any benefits granted by the United States under any treaty 
     between the United States and a foreign country unless such 
     entity is a qualified resident of such foreign country.
       ``(2) Tax favored income.--No person shall be entitled to 
     any benefits granted by the United States under any treaty 
     between the United States and a foreign country with respect 
     to any income of such person if such income bears a 
     significantly lower tax under the laws of such foreign 
     country than similar income arising from sources within such 
     foreign country derived by residents of such foreign country.
       ``(3) Qualified resident.--For purposes of this 
     subsection--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the term `qualified resident' means, with respect 
     to any foreign country, any foreign entity which is a 
     resident of such foreign country unless--
       ``(i) 50 percent or more (by value) of the stock or 
     beneficial interests in such entity are owned (directly or 
     indirectly) by individuals who are not residents of such 
     foreign country and who are not United States citizens or 
     resident aliens, or
       ``(ii) 50 percent or more of its income is used (directly 
     or indirectly) to meet liabilities to persons who are not 
     residents of such foreign country or citizens or residents of 
     the United States.
       ``(B) Special rule for publicly traded entities.--A foreign 
     entity which is a resident of a foreign country shall be 
     treated as a qualified resident of such foreign country if--
       ``(i) interests in such entity are primarily and regularly 
     traded on an established securities market in such country, 
     or
       ``(ii) such entity is not described in subparagraph (A)(ii) 
     and such entity is wholly owned by another foreign entity 
     which is organized in such foreign country and the interests 
     in which are so traded.
       ``(C) Entities owned by publicly traded domestic 
     corporations.--A foreign entity which is a resident of a 
     foreign country shall be treated as a qualified resident of 
     such foreign country if--
       ``(i) such entity is not described in subparagraph (A)(ii) 
     and such entity is wholly owned (directly or indirectly) by a 
     domestic corporation, and
       ``(ii) stock of such domestic corporation is primarily and 
     regularly traded on an established securities market in the 
     United States.
       ``(D) Secretarial authority.--The Secretary may, in his 
     sole discretion, treat a foreign entity as being a qualified 
     resident of a foreign country if such entity establishes to 
     the satisfaction of the Secretary that such entity meets such 
     requirements as the Secretary may establish to ensure that 
     individuals who are not residents of such foreign country do 
     not use the treaty between such foreign country and the 
     United States in a manner consistent with the purposes of 
     this subsection.
       ``(4) Foreign entity.--For purposes of this subsection, the 
     term `foreign entity' means any corporation, partnership, 
     trust, estate, or other entity which is not a United States 
     person.''
       (b) Conforming Amendment.--Paragraph (4) of section 884(e) 
     is amended to read as follows:
       ``(4) Qualified resident.--For purposes of this subsection, 
     the term `qualified resident' 

[[Page S 16128]]
     has the meaning given to such term by section 894(c)(3).''
       (c) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 1996, and shall apply to any 
     treaty whether entered into before, on, or after such date.
                                 ______


                  DOLE (AND OTHERS) AMENDMENT NO. 3003

  (Ordered to lie on the table.)
  Mr. DOLE (for himself, Mr. Kohl, Mr. Grassley, and Mr. Roth) 
submitted an amendment intended to be proposed by them to the bill S. 
1357, supra, as follows:

       At the end of chapter 8 of subtitle I of title XII, insert 
     the following new section:

     SEC.  . INCREASED DEDUCTIBILITY OF BUSINESS MEAL EXPENSES FOR 
                   INDIVIDUALS SUBJECT TO FEDERAL LIMITATIONS ON 
                   HOURS OF SERVICE.

       (a) In General.--Section 274(n) (relating to only 50 
     percent of meal and entertainment expenses allowed as 
     deduction) is amended by adding at the end the following new 
     paragraph:
       ``(3) Special rule for individuals subject to federal 
     limitations on hours of service.--In the case of any expenses 
     for food or beverages consumed by an individual during, or 
     incident to, any period of study which is subject to the 
     hours of service limitations of the Department of 
     Transportation, paragraph (1) shall be applied by 
     substituting `80 percent' for `50 percent''.''
       (b) Repeal of Special Transition Rule to Financial 
     Institution Exception to Interest Allocation Rules.--
     Paragraph (5) of section 1215(c) of the Tax Reform Act of 
     1986 (Public Law 99-514, 100 Stat. 2548) is hereby repealed.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.
                                 ______


                COCHRAN (AND OTHERS) AMENDMENTS NO. 3004

  Mr. COCHRAN (for himself, Mr. Jeffords, Mr. Gorton, Mr. Leahy, Mr. 
Cohen, and Mr. Snowe) proposed an amendment to the bill S. 1357, supra, 
as follows:

       On page 33, after line 24, insert the following:
       (c) Class IV Account.--Effective January 1, 1996, section 
     8c(5), of the Agricultural Adjustment Act (7 U.S.C. 608c(5)), 
     reenacted with amendments by the Agricultural Marketing 
     Agreement Act of 1937, is amended--
       (1) in paragraph (A), by adding at the end the following: 
     ``Each marketing order issued pursuant to this section for 
     milk and milk products shall include all skim milk and 
     butterfat used to produce butter, nonfat dry milk, and dry 
     whole milk as part of a Class IV classification.''; and
       (2) by adding at the end the following:
       ``(M) Class iv account.--
       ``(i) Definitions.--In this paragraph:
       ``(I) Account.--The term `Account' means the Account for 
     Class IV final products established under clause (ii).
       ``(II) Administrator.--The term `Administrator' means the 
     Administrator of the Account appointed under clause (vii).
       ``(III) Class iv final product.--The term `Class IV final 
     product' means butter, nonfat dry milk, and dry whole milk.
       ``(IV) Milk marketing order.--The term `milk marketing 
     order' means a milk marketing order issued pursuant to this 
     section and any comparable State milk marketing order or 
     system.
       ``(ii) Establishment of account.--Notwithstanding any other 
     provision of law, the Secretary shall establish an Account 
     for Class IV final products to equalize returns from all milk 
     used in the 48 contiguous States to produce Class IV final 
     products among all milk marketed by producers for commercial 
     use.
       ``(iii) Class iv price and differential; proration.--
       ``(I) Price.--The Secretary shall determine a milk 
     equivalent value per hundredweight for Class IV final 
     products each month based on the average wholesale market 
     prices during the month for Class IV final products. The milk 
     equivalent value at 3.67 percent milkfat shall be the per 
     hundredweight Class IV price under the Account.
       ``(II) Differential.--The Administrator of the Account 
     shall announce, on the first business day of each month, the 
     per hundredweight Class IV differential applicable to the 
     preceding month. The monthly Class IV differential shall be 
     the amount, if any, by which the support rate for milk in 
     effect under section 204 of the Agricultural Act of 1949 (7 
     U.S.C. 1446e) exceeds the Class IV price established pursuant 
     to subclause (I).
       ``(III) Proration.--On or before the twentieth day after 
     the end of each month, the Administrator of the Account 
     shall--
       ``(aa) determine the quantity of milk produced in the 48 
     contiguous States of the United States and marketed for 
     commercial use in producing Class IV final products during 
     the preceding month;
       ``(bb) calculate the quantity equal to the number of 
     hundredweights of milk used for Class IV final products 
     during the preceding month (as determined under item (aa)) 
     multiplied by the Class IV differential for the month 
     established under subclause (II), and add to that amount 
     the cost of administering the Account during the current 
     month; and
       ``(cc) prorate the amount established under item (bb) among 
     the total amount, in hundredweights, of milk produced in the 
     48 contiguous States and marketed for commercial use during 
     the preceding month.
       ``(iv) Account obligations.--On or before the twenty-fifth 
     day after the end of each month:
       ``(I) Each person making payment to a producer for milk 
     produced in any of the 48 contiguous States of the United 
     States and marketed for commercial use shall collect from 
     each producer the amount determined by multiplying the 
     quantity of milk handled for the account of the producer 
     during the preceding month by the Class IV differential 
     proration established pursuant to clause (iii)(III)(ccc). The 
     amount shall be remitted to the Administrator of the Account.
       ``(II) Any producer marketing milk of the producer's own 
     production in the form of milk or dairy products to 
     consumers, either directly or through retail or wholesale 
     outlets, shall remit to the Administrator of the Account the 
     amount determined by multiplying the quantity of the milk 
     marketed by the producer by the Class IV differential 
     proration established under clause (iii)(III)(ccc).
       ``(v) Distribution of account proceeds.--On or before the 
     thirtieth day after the end of each month, the Administrator 
     of the Account shall pay to each person that used skim milk 
     and butterfat to produce Class IV final products during the 
     preceding month a proportionate share of the total Account 
     proceeds for the month. The proportion of the total proceeds 
     payable to each person shall be the same proportion that the 
     skim milk and butterfat used by the person to produce Class 
     IV final products during the preceding month is of the total 
     skim milk and butterfat used by all persons during the 
     preceding month to produce Class IV final products.
       ``(vi) Effect on blend prices.--Producer blend prices under 
     a milk marketing order shall be adjusted to account for 
     revenue distributions required under clauses (iv) and (v).
       ``(vii) Administration of class iv account.--The Secretary 
     shall appoint a person to serve as the Administrator of the 
     Account and shall delegate to the Administrator such powers 
     as are needed to carry out the duties of Administrator.
       ``(viii) Enforcement.--
       ``(I) Collection.--The amounts specified in clause (iv) 
     shall be collected and remitted to the Administrator in the 
     manner prescribed by the Secretary.
       ``(II) Penalties.--If any person fails to remit the amounts 
     required under clause (iv) or fails to comply with such 
     requirements for recordkeeping or otherwise as are required 
     by the Secretary to carry out this subparagraph, the person 
     shall be liable to the Secretary for a civil penalty up to, 
     as determined by the Secretary, an amount determined by 
     multiplying--
       ``(i) the quantity of milk involved in the violation; by
       ``(ii) the support rate for milk in effect under section 
     204 of the Agricultural Act of 1949 (7 U.S.C. 1446e) for the 
     applicable calendar year.
       ``(III) Enforcement.--The Secretary may enforce this clause 
     in the courts of the United States.
       ``(ix) Regulations.--The Secretary shall issue regulations 
     to establish the Account without regard to the notice and 
     comment requirements of section 553 of title 5, United States 
     Code.''.
       (d) Northeast Interstate Dairy Compact.--Congress consents 
     to the Northeast Interstate Dairy Compact entered into among 
     the States of Vermont, New Hampshire, Maine, Connecticut, 
     Rhode Island, and Massachusetts, subject to the following 
     conditions:
       (1) Compensation of ccc.--Before the end of each fiscal 
     year that a Compact price regulation is in effect, the 
     Compact Commission shall compensate the Commodity Credit 
     Corporation for the cost of any purchases of milk and milk 
     products by the Corporation that result from projected fluid 
     milk production for the fiscal year within the Compact region 
     in excess of the national average rate of purchases of milk 
     and milk products by the Corporation.
       (2) Milk market order administrator.--By agreement among 
     the States and the Secretary of Agriculture, the 
     Administrator shall provide technical assistance to the 
     compact Commission, and be reimbursed for the assistance, 
     with respect to the applicable milk marketing order issued 
     under section 8c(5) of the Agricultural Adjustment Act (7 
     U.S.C.608c(5)), reenacted with amendments by the Agricultural 
     Marketing Agreement Act of 1937.
       (3) Termination and renewal.--The consent for the Compact 
     shall--
       (A) terminate on the date that is 7 years after the date of 
     enactment of this Act, subject to subparagraph (B); and
       (B) may be renewed by Congress, without prior ratification 
     by the States' legislatures.
       On page 33, after line 24, insert the following:
       (c) Agricultural Competitiveness Grants.--
       The Secretary of Agriculture (referred to in this subtitle 
     as the ``Secretary'') shall, in accordance with this 
     subtitle, award a grant to a grantee eligible under section 
     1502 to promote a purpose of this subtitle.
       (d) Eligible Grantee.--
       The Secretary may make a grant under section 1501 to--
       (1) a college or university;
       (2) a State agricultural experiment station;

[[Page S 16129]]

       (3) a State Cooperative Extension Service;
       (4) a research institution or organization;
       (5) a private organization or person; or
       (6) a Federal agency.
       (e) Use of Grant.--
       A grant made under section 1501 may be used by a grantee 
     for 1 or more of the following uses:
       (1) Research, ranging from discovery to principles of 
     application.
       (2) Extension and related private-sector activities.
       (3) Education.
       (f) Priority.--
       In administering this subtitle, the Secretary shall--
       (1) establish priorities for allocating grants, based on 
     needs and opportunities of the food and agriculture system in 
     the United States;
       (2) seek and accept proposals for grants;
       (3) determine the relevance and merit of proposals through 
     a system of peer review; and
       (4) award grants on the basis of merit and quality.
       (g) Administration.--
       (1) competitive grant.--A grant under section 1501 shall be 
     awarded on a competitive basis.
       (2) Terms.--A grant under section 1501 shall have a term 
     that does not exceed 5 years.
       (3) Matching funds.--As a condition of receipt of a grant 
     under section 1501, the Secretary shall require the funding 
     of the grant with equal matching funds from a non-Federal 
     source if the grant is--
       (1) for applied research that is commodity-specific; and
       (2) not of national scope.
       (4) Administrative costs.--The Secretary may use not more 
     than 4 percent of the funds made available under section 1506 
     for administrative costs incurred by the Secretary in 
     carrying out this subtitle.
       (5) Construction costs.--None of the funds made available 
     under section 1507 may be used for the construction of a new 
     building or the acquisition, expansion, remodeling, or 
     alteration of an existing building (including site grading 
     and improvement and architect fees).
       (h) Regulations.--
       The Secretary shall issue such regulations as are necessary 
     to carry out this subtitle.
       (i) Use of Commodity Credit Corporation Funds.--
       (1) In general.--Subject to subsection (b), the Secretary 
     shall use $30,000,000 of the funds of the Commodity Credit 
     Corporation for each of fiscal years 1996 through 2002 to 
     carry out this title.
       (2) Limitation.--The Secretary may use less than 
     $30,000,000 of the funds of the Commodity Credit Corporation 
     for any fiscal year if the Secretary determines that the full 
     funding level is not necessary to fund all qualifying 
     applications for agricultural competitiveness grants that 
     satisfy the priority criteria established under section 1504.
       (3) Powers of the corporation.--Section 5 of the Commodity 
     Credit Corporation Charter Act (15 U.S.C. 714c) (as amended 
     by section 1201(c)(1)) is amended by inserting after 
     subsection (g) the following:
       ``(4) Carry out research, extension, and education related 
     to agriculture by using not more than $30,000,000 of the 
     funds of the Corporation in any fiscal year for any function 
     or activity relating to agricultural research, extension, or 
     education.''.
       (j) Effective Date.--
       This subtitle and the amendment made by this subtitle shall 
     become effective upon enactment.
                                 ______


                        CRAIG AMENDMENT NO. 3005

  Mr. CRAIG proposed an amendment to the motion to commit proposed by 
Mr. Lautenberg to the bill S. 1357, supra, as follows:

  In lieu of the instructions offered by Mr. Lautenberg, insert the 
following with instructions to report the following amendment;

       At the end of the bill, add the following title:

                TITLE XIII: CREDIT FOR ADOPTION EXPENSES

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 (relating to nonrefundable personal credits), as 
     amended by section 12001, is amended by inserting after 
     section 23 the following new section:

                     ``SEC. 24. ADOPTION EXPENSES.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this subtitle for the taxable year the amount of the 
     qualified adoption expenses paid or incurred by the taxpayer 
     during such taxable year.
       ``(b) Limitations.--
       ``(1) Dollar limitation.--The aggregate amount of qualified 
     adoption expenses which may be taken into account under 
     subsection (a) with respect to the adoption of a child shall 
     not exceed $5,000.
       ``(2) Income limitation.--The amount allowable as a credit 
     under subsection (a) for any taxable year shall be reduced 
     (but not below zero) by an amount which bears the same ratio 
     to the amount so allowable (determined without regard to this 
     paragraph but with regard to paragraph (1)) as--
       ``(d) Qualified Adoption Expenses.--For purposes of this 
     section, the term `qualified adoption expenses' has the 
     meaning given such term by section 24(d).''
       (c) Conforming Amendments.--
       (1) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1, as amended by section 12001, is 
     amended by inserting after the item relating to section 23 
     the following new item:

``Sec. 24. Adoption expenses.''

       (2) The table of sections for part III of subchapter B of 
     chapter 1 is amended by striking the item relating to section 
     137 and inserting the following:

``Sec. 137. Adoption assistance programs.
``Sec. 138. Cross reference to other Acts.''

       (d) Effective Date.--The amendment shall be effective after 
     January 2, 1995.''

  Mr. President, I move to commit S. 1357 to the Committee on Finance 
with instructions to report the bill back to the Senate within 3 days 
and insert provisions to limit any individual income tax break provided 
in the bill to those with incomes under $1 million, and to apply any 
resulting savings to reduce proposed cuts in Medicare and Medicaid.
                                 ______


                        DOLE AMENDMENT NO. 3006

  Mr. DOLE proposed an amendment to amendment No. 3005 proposed by Mr. 
Craig to the motion to commit proposed by Mr. Lautenberg to the bill S. 
1357, supra, as follows:

       At the end of the bill, add the following title:

                TITLE XIII: CREDIT FOR ADOPTION EXPENSES

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 (relating to nonrefundable personal credits), as 
     amended by section 12001, is amended by inserting after 
     section 23 the following new section:

     ``SEC. 24. ADOPTION EXPENSES.

       ``(a) Allownace of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this subtitle for the taxable year the amount of the 
     qualified adoption expenses paid or incurred by the taxpayer 
     during such taxable year.
       ``(b) Limitations.--
       ``(1) Dollar limitation.--The aggregate amount of qualified 
     adoption expenses which may be taken into account under 
     subsection (a) with respect to the adoption of a child shall 
     not exceed $5,000.
       ``(2) Income limitation.--The amount allowable as a credit 
     under subsection (a) for any taxable year shall be reduced 
     (but not below zero) by an amount which bears the same ratio 
     to the amount so allowable (determined without regard to this 
     paragraph but with record to paragraph (1)) as--
       ``(d) Qualified Adoption Expenses.--For purposes of this 
     section, the term `qualified adoption expenses' has the 
     meaning given such term by section 24(d).''
       (c) Conforming Amendments.--
       (1) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1, as amended by section 12001, is 
     amended by inserting after the item relating to section 23 
     the following new item:

``Sec. 24. Adoption expenses.''

       (2) The table of sections for part III of subchapter B of 
     chapter 1 is amended by striking the item relating to section 
     137 and inserting the following:

``Sec. 137. Adoption assistance programs.''
``Sec. 138. Cross reference to other Acts.''

       (d) Effective Date.--The amendment shall be effective after 
     February 1, 1995.
                                 ______


                     LAUTENBERG AMENDMENT NO. 3007

  Mr. LAUTENBERG proposed an amendment to amendment No. 3005 proposed 
by Mr. Craig to the motion to commit proposed by Mr. Lautenberg to the 
bill S. 1357, supra, as follows:

       Strike all after instructions and insert the following: 
     ``to report the bill back to the Senate within 3 days and 
     insert provisions to limit any individual income tax break 
     provided in the bill to those with incomes under $1 million, 
     and to apply any resulting savings to reduce proposed cuts in 
     Medicare and Medicaid.''
                                 ______


                NICKLES (AND OTHERS) AMENDMENT NO. 3008

  Mr. NICKLES (for himself, Mr. Dole, and Mr. Chafee) proposed an 
amendment to the bill S. 1357, supra, as follows:

       On page 1332, beginning with line 5, strike all through 
     page 1336, line 17.
                                 ______


                      MOYNIHAN AMENDMENT NO. 3009

  Mr. MOYNIHAN proposed an amendment to the bill S. 1357, supra, as 
follows:

       On page 541, strike line 10, and all that follows through 
     page 542, line 8.
                                 ______


                  DOLE (AND OTHERS) AMENDMENT NO. 3010

  Mr. DOMENICI (for Mr. Dole for himself, Mr. Kohl, Mr. Grassley, Mr. 
Roth, Mr. Bond, Mr. Ashcroft, and Mr. Kempthorne) proposed an amendment 
to the bill S. 1357, supra, as follows:

       At the end of chapter 8 of subtitle I of title XII, insert 
     the following new section:
     
[[Page S 16130]]


     SEC.   . INCREASED DEDUCTIBILITY OF BUSINESS MEAL EXPENSES 
                   FOR INDIVIDUALS SUBJECT TO FEDERAL LIMITATIONS 
                   ON HOURS OF SERVICE.

       (a) In General.--Section 274(n) (relating to only 50 
     percent of meal and entertainment expenses allowed as 
     deduction) is amended by adding at the end the following new 
     paragraph:
       ``(3) Special rule for individuals subject to Federal 
     limitations on hours of service.--In the case of any expenses 
     for food or beverages consumed by an individual during, or 
     incident to, any period of duty which is subject to the hours 
     of service limitations of the Department of Transportation, 
     paragraph (1) shall be applied by substituting `80 percent' 
     for `50 percent'.''
       (b) Repeal of Special Transition Rule to Financial 
     Institution Exception to Interest Allocation Rules.--
     Paragraph (5) of section 1215(c) of the Tax Reform Act of 
     1986 (Public Law 99-514, 100 Stat. 2548) is hereby repealed.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

  Mr. President, the amendment that I am offering will restore the 
business meal deduction to 80 percent for truckers, long-haul bus 
drivers and others subject to Department of Transportation hours of 
service regulations. My amendment would cost $673 million over 7 years 
and would be offset by repealing the special transition rule to 
financial institution exception to interest allocation rules.
  I urge my colleagues to support the amendment and I yield the floor.
                                 ______


                       D'AMATO AMENDMENT NO. 3011

  Mr. DOMENICI (for Mr. D'Amato) proposed an amendment to the bill S. 
1357, supra, as follows:

       At the end of chapter 8 of subtitle I of title XII, insert:

     SEC.   . SENSE OF THE SENATE REGARDING TAX TREATMENT OF 
                   CONVERSIONS OF THRIFT CHARTERS TO BANK 
                   CHARTERS.

       In order to facilitate sound national banking policy and 
     assist in the conversion of thrift charters to bank charters, 
     it is the sense of the Senate that section 593 of the 
     Internal Revenue Code of 1986 (relating to reserves for 
     losses on loans) should be repealed and appropriate relief 
     should be granted for the pre-1988 portion of any bad debt 
     reserves of a thrift charter.
                                 ______


                      GRASSLEY AMENDMENT NO. 3012

  Mr. DOMENICI (for Mr. Grassley) proposed an amendment to the bill S. 
1357, supra, as follows:

       On pages 764 and 765, section 2106. Medicaid Task Force, 
     under subsection (c) ``Advisory Group for the Task Force'' 
     add new number (14) to read:
       ``(14) American Osteopathic Association''.
       Redesignate old (14) to be (15);
       Redesignate old (15) to be (16);
       Redesignate old (16) to be (17);
       Redesignate old (17) to be new (18).
                                 ______


                        BOXER AMENDMENT NO. 3013

  Mr. DOMENICI (for Mrs. Boxer) proposed an amendment to the bill S. 
1357, supra, as follows:

       At the appropriate place in the bill, insert the following 
     new section:

     SEC.  . PAY OF MEMBERS OF CONGRESS AND THE PRESIDENT DURING 
                   GOVERNMENT SHUTDOWNS.

       (a) In General.--Members of Congress and the President 
     shall not receive basic pay for any period in which--
       (1) there is more than a 24-hour lapse in appropriations 
     for any Federal agency or department as a result of a failure 
     to enact a regular appropriations bill or continuing 
     resolution; or
       (2) the Federal Government is unable to make payments or 
     meet obligations because the public debt limit under section 
     3101 of title 31, United States Code has been reached.
       (b) Retroactive Pay Prohibited--No pay forfeited in 
     accordance with subsection (a) may be paid retroactively.
                                 ______


                       GRAHAM AMENDMENT NO. 3014

  Mr. DOMENICI (for Mr. Graham) proposed an amendment to the bill S. 
1357, supra, as follows:

       Beginning on page 476, strike line 20 and all that follows 
     through page 477, line 3 and insert the following: such 
     individuals have contracted for) available and accessible to 
     each such individual, within the medicare service area of the 
     plan, with reasonable promptness, and in a manner which 
     assures continuity.
       On page 481, between lines 15 and 16, insert the following:
       ``(h) Timely Authorization for Promptly Needed Care 
     Identified as a Result of Required Screening Evaluation.--
       ``(1) Access to process.--A medicare choice plan sponsor 
     shall provide access 24 hours a day, 7 days a week to such 
     persons as may be authorized to make any prior authorizations 
     required by the plan sponsor for coverage of items and 
     services (other than emergency services) that a treating 
     physician or other emergency department personnel identify, 
     pursuant to a screening evaluation required under section 
     1867(a), as being needed promptly by an individual enrolled 
     with the organization under this part.
       ``(2) deemed approval.--A medicare choice plan sponsor is 
     deemed to have approved a request for such promptly needed 
     items and services if the physician or other emergency 
     department personnel involved--
       ``(A) has made a reasonable effort to contact such a person 
     for authorization to provide an appropriate referral for such 
     items and services or to provide the items and services to 
     the individual and access to the person has not been provided 
     (as required in paragraph (1)), or
       ``(B) has requested such authorization from the person and 
     the person has not denied the authorization within 30 minutes 
     after the time the request is made.
       ``(3) Effect of approval.--Approval of a request for a 
     prior authorization determination (including a deemed 
     approval under paragraph (2)) shall be treated as approval of 
     a request for any items and services that are required to 
     treat the medical condition identified pursuant to the 
     required screening evaluation.
       ``(4) Definition of emergency services.--In this 
     subsection, the term `emergency services' means--
       ``(A) health care items and services furnished in the 
     emergency department of a hospital (including a trauma 
     center), and
       ``(B) ancillary services routinely available to such 
     department,

     to the extent they are required to evaluate and treat an 
     emergency medical condition (as defined in paragraph (5)) 
     until the condition is stabilized.
       ``(5) Emergency medical condition.--In paragraph (4), the 
     term `emergency medical condition' means a medical condition, 
     the onset of which is sudden, that manifests itself by 
     symptoms of sufficient severity, including severe pain, that 
     a prudent layperson, who possesses an average knowledge of 
     health and medicine, could reasonably expect the absence of 
     immediate medical attention to result in--
       ``(A) placing the person's health in serious jeopardy,
       ``(B) serious impairment to bodily functions, or
       ``(C) serious dysfunction of any bodily organ or part.
                                 ______


               HUTCHISON (AND OTHERS) AMENDMENT NO. 3015

  Mr. DOMENICI (for Mrs. Hutchison for herself, Mr. McCain, Mr. 
Lieberman, Mr. Stevens, Mr. Levin, Mr. Coverdell, Ms. Snowe, Mr. 
Kerrey, Mr. Thurmond, and Mr. Thomas) proposed an amendment to the bill 
S. 1357, supra; as follows:

       (a) The Senate makes the following findings:
       (1) Human rights violations and atrocities continue 
     unabated in the Former Yugoslavia.
       (2) The Assistant Secretary of State for Human Rights 
     recently reported that starting in mid-September and 
     intensifying between October 6 and October 12, 1995 many 
     thousands of Bosnian Muslims and Croats in Northwest Bosnia 
     were systematically forced from their homes by paramilitary 
     units, local police and in some instances, Bosnian Serb Army 
     officials and soliders.
       (3) Despite the October 12, 1995 cease-fire which went into 
     effect by agreement of the warring parties in the former 
     Yugoslavia, Bosnian Serbs continue to conduct a brutal 
     campaign to expel non-Serb civilians who remain in Northwest 
     Bosnia, and are subjecting non-Serbs to untold horror--
     murder, rape, robbery and other violence.
       (4) Horrible examples of ``ethnic cleansing'' persist in 
     Northwest Bosnia. Some six thousand refugees recently reached 
     Zenica and reported that nearly two thousand family members 
     from this group are still unaccounted for.
       (5) The U.N. spokesman in Zagreb reported that many 
     refugees have been given only a few minutes to leave their 
     homes and that ``girls as young as 17 are reported to have 
     been taken into wooded areas and raped.'' Elderly, sick and 
     very young refugees have been driven to remote areas and 
     forced to walk long distances on unsafe roads and cross 
     rivers without bridges.
       (6) The War Crimes Tribunal for the former Yugoslavia has 
     collected volumes of evidence of atrocities, including the 
     establishment of death camps, mass executions and systematic 
     campaigns of rape and terror. This War Crimes Tribunal has 
     already issued 43 indictments on the basis of this evidence.
       (7) The Assistant Secretary of State for Human Rights has 
     described the eye witness accounts as ``prima facia evidence 
     of war crimes which, if confirmed, could very well lead to 
     further indictments by the War Crimes Tribunal.''
       (8) The U.N. High Commissioner for Refugees estimates that 
     more than 22,000 Muslims and Croats have been forced from 
     their homes since mid-September in Bosnian Serb controlled 
     areas.
       (9) In opening the Dodd Center Symposium on the topic of 
     ``50 Years After Nuremburg'' on October 16, 1995, President 
     Clinton cited the ``excellent progress'' of the War Crimes 
     Tribunal for the former Yugoslavia and said, ``Those accused 
     of war crimes, crimes against humanity and genocide must be 

[[Page S 16131]]
     brought to justice. They must be tried and, if found guilty, they must 
     be held accountable.''
       (10) President Clinton also observed on October 16, 1995, 
     ``some people are concerned about pursuing peace in Bosnia 
     and prosecuting war criminals are incompatible goals. But I 
     believe they are wrong. There must be peace for justice to 
     prevail, but there must be justice when peace prevails.
       (b) SENSE OF THE SENATE.--It is the sense of the Senate 
     that--
       (1) the Senate condemns the systematic human rights abuses 
     against the people of Bosnia and Herzegovena.
       (2) with peace talks scheduled to begin in the United 
     States on October 31, 1995, these new reports of Serbian 
     atrocities are of grave concern to all Americans.
       (3) the Bosnian serb leadership should immediately halt 
     these atrocities, fully account for the missing, and allow 
     those who have been separated to return to their families.
       (4) the International Red Cross, United Nations agencies 
     and human rights organizations should be granted full and 
     complete access to all locations throughout Bosnia and 
     Herzogovenia.
       (5) the Bosnian Serb leadership should fully cooperate to 
     facilitate the complete investigation of the above 
     allegations so that those responsible may be held accountable 
     under international treaties, conventions, obligations and 
     law.
       (6) the United States should continue to support the work 
     of the War Crime Tribunal for the Former Yugoslavia.
       (7) ethnic cleansing'' by any faction, group, leader, or 
     government is unjustified, immoral and illegal and all 
     perpetrators of war crimes, crimes against humanity, genocide 
     and other human rights violations in former Yugoslavia must 
     be held accountable.
                                 ______


                        KOHL AMENDMENT NO. 3016

  Mr. DOMENICI (for Mr. Kohl) proposed an amendment to the bill S. 
1357, supra, as follows:

       At the end of chapter 8 of subtitle I of title XII, insert 
     the following new sections:

     SEC. 12879. ROLLOVER OF GAIN FROM SALE OF FARM ASSETS TO 
                   INDIVIDUAL RETIREMENT PLANS.

       (a) In General.--Part III of subchapter O of chapter 1 
     (relating to common nontaxable exchanges) is amended by 
     inserting after section 1034 the following new section:

     ``SEC. 1034A. ROLLOVER OF GAIN ON SALE OF FARM ASSETS INTO 
                   ASSET ROLLOVER ACCOUNT.

       ``(a) Nonrecognition of Gain.--Subject to the limits of 
     subsection (c), if a taxpayer has a qualified net farm gain 
     from the sale of a qualified farm asset, then, at the 
     election of the taxpayer, gain (if any) from such sale shall 
     be recognized only to the extent such gain exceeds the 
     contributions to 1 or more asset rollover accounts of the 
     taxpayer for the taxable year in which such sale occurs.
       ``(b) Asset Rollover Account.--
       ``(1) General rule.--Except as provided in this section, an 
     asset rollover account shall be treated for purposes of this 
     title in the same manner as an individual retirement plan.
       ``(2) Asset rollover account.--For purposes of this title, 
     the term `asset rollover account' means an individual 
     retirement plan which is designated at the time of the 
     establishment of the plan as an asset rollover account. Such 
     designation shall be made in such manner as the Secretary may 
     prescribe.
       ``(c) Contribution Rules.--
       ``(1) No deduction allowed.--No deduction shall be allowed 
     under section 219 for a contribution to an asset rollover 
     account.
       ``(2) Aggregate contribution limitation.--Except in the 
     case of rollover contributions, the aggregate amount for all 
     taxable years which may be contributed to all asset rollover 
     accounts established on behalf of an individual shall not 
     exceed--
       ``(A) $500,000 ($250,000 in the case of a separate return 
     by a married individual), reduced by
       ``(B) the amount by which the aggregate value of the assets 
     held by the individual (and spouse) in individual retirement 
     plans (other than asset rollover accounts) exceeds $100,000.

     The determination under subparagraph (B) shall be made as of 
     the close of the taxable year for which the determination is 
     being made.
       ``(3) Annual contribution limitations.--
       ``(A) General rule.--The aggregate contribution which may 
     be made in any taxable year to all asset rollover accounts 
     shall not exceed 100 percent of the lesser of--
       ``(i) the qualified net farm gain for the taxable year, or
       ``(ii) an amount determined by multiplying the number of 
     years the taxpayer is a qualified farmer by $10,000.
       ``(B) Spouse.--In the case of a married couple filing a 
     joint return under section 6013 for the taxable year, 
     subparagraph (A) shall be applied by substituting `$20,000' 
     for `$10,000' for each year the taxpayer's spouse is a 
     qualified farmer.
       ``(4) Adjustment to annual contribution limitation.--The 
     Secretary may reduce the percentage limitation in paragraph 
     (3)(A) to such lower percentage as the Secretary determines 
     necessary to assure that the aggregate amount of deductions 
     for all individuals for a taxable year does not exceed the 
     aggregate amount of the increases in receipts for the taxable 
     year by reason of the amendments made by sections 12880 and 
     12881 of the Balanced Budget Reconciliation Act of 1995.
       ``(5) Time when contribution deemed made.--For purposes of 
     this section, a taxpayer shall be deemed to have made a 
     contribution to an asset rollover account on the last day of 
     the preceding taxable year if the contribution is made on 
     account of such taxable year and is made not later than the 
     time prescribed by law for filing the return for such taxable 
     year (not including extensions thereof).
       ``(d) Qualified Net Farm Gain; Etc.--For purposes of this 
     section--
       ``(1) Qualified net farm gain.--The term `qualified net 
     farm gain' means the lesser of--
       ``(A) the net capital gain of the taxpayer for the taxable 
     year, or
       ``(B) the net capital gain for the taxable year determined 
     by only taking into account gain (or loss) in connection with 
     a disposition of a qualified farm asset.
       ``(2) Qualified farm asset.--The term `qualified farm 
     asset' means an asset used by a qualified farmer in the 
     active conduct of the trade or business of farming (as 
     defined in section 2032A(e)).
       ``(3) Qualified farmer.--
       ``(A) In general.--The term `qualified farmer' means a 
     taxpayer who--
       ``(i) during the 5-year period ending on the date of the 
     disposition of a qualified farm asset materially participated 
     in the trade or business of farming, and
       ``(ii) owned (or who with the taxpayer's spouse owned) 50 
     percent or more of such trade or business during such 5-year 
     period.
       ``(B) Material participation.--For purposes of this 
     paragraph, a taxpayer shall be treated as materially 
     participating in a trade or business if the taxpayer meets 
     the requirements of section 2032A(e)(6).
       ``(4) Rollover contributions.--Rollover contributions to an 
     asset rollover account may be made only from other asset 
     rollover accounts.
       ``(e) Distribution Rules.--For purposes of this title, the 
     rules of paragraphs (1) and (2) of section 408(d) shall apply 
     to any distribution from an asset rollover account.
       ``(f) Individual Required To Report Qualified 
     Contributions.--
       ``(1) In general.--Any individual who--
       ``(A) makes a contribution to any asset rollover account 
     for any taxable year, or
       ``(B) receives any amount from any asset rollover account 
     for any taxable year,

     shall include on the return of tax imposed by chapter 1 for 
     such taxable year and any succeeding taxable year (or on such 
     other form as the Secretary may prescribe) information 
     described in paragraph (2).
       ``(2) Information required to be supplied.--The information 
     described in this paragraph is information required by the 
     Secretary which is similar to the information described in 
     section 408(o)(4)(B).
       ``(3) Penalties.--For penalties relating to reports under 
     this paragraph, see section 6693(b).''.
       (b) Contributions Not Deductible.--Section 219(d) (relating 
     to other limitations and restrictions) is amended by adding 
     at the end the following new paragraph:
       ``(5) Contributions to asset rollover accounts.--No 
     deduction shall be allowed under this section with respect to 
     a contribution under section 1034A.''.
       (c) Excess Contributions.--
       (1) In general.--Section 4973 (relating to tax on excess 
     contributions to individual retirement accounts, certain 
     section 403(b) contracts, and certain individual retirement 
     annuities) is amended by adding at the end the following new 
     subsection:
       ``(d) Asset Rollover Accounts.--For purposes of this 
     section, in the case of an asset rollover account referred to 
     in subsection (a)(1), the term `excess contribution' means 
     the excess (if any) of the amount contributed for the taxable 
     year to such account over the amount which may be contributed 
     under section 1034A.''.
       (2) Conforming amendments.--
       (A) Section 4973(a)(1) is amended by striking ``or'' and 
     inserting ``an asset rollover account (within the meaning of 
     section 1034A), or''.
       (B) The heading for section 4973 is amended by inserting 
     ``ASSET ROLLOVER ACCOUNTS,'' after ``CONTRACTS''.
       (C) The table of sections for chapter 43 is amended by 
     inserting ``asset rollover accounts,'' after ``contracts'' in 
     the item relating to section 4973.
       (d) Technical Amendments.--
       (1) Paragraph (1) of section 408(a) (defining individual 
     retirement account) is amended by inserting ``or a qualified 
     contribution under section 1034A,'' before ``no 
     contribution''.
       (2) Subparagraph (A) of section 408(d)(5) is amended by 
     inserting ``or qualified contributions under section 1034A'' 
     after ``rollover contributions''.
       (3)(A) Subparagraph (A) of section 6693(b)(1) is amended by 
     inserting ``or 1034A(f)(1)'' after ``408(o)(4)''.
       (B) Section 6693(b)(2) is amended by inserting ``or 
     1034A(f)(1)'' after ``408(o)(4)''.
       (4) The table of sections for part III of subchapter O of 
     chapter 1 is amended by inserting after the item relating to 
     section 1034 the following new item:

``Sec. 1034A. Rollover of gain on sale of farm assets into asset 
              rollover account.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to sales and exchanges after the date of the 
     enactment of this Act.
     
[[Page S 16132]]


     SEC. 12880. DISPOSITION OF STOCK IN DOMESTIC CORPORATIONS BY 
                   10-PERCENT FOREIGN SHAREHOLDERS.

       (a) General Rule.--Subpart D of part II of subchapter N of 
     chapter 1 (relating to miscellaneous provisions) is amended 
     by adding at the end the following new section:

     ``SEC. 899. DISPOSITION OF STOCK IN DOMESTIC CORPORATIONS BY 
                   10-PERCENT FOREIGN SHAREHOLDERS.

       ``(a) General Rule.--
       ``(1) Treatment as effectively connected with united states 
     trade or business.--For purposes of this title, if any 
     nonresident alien individual or foreign corporation is a 10-
     percent shareholder in any domestic corporation, any gain or 
     loss of such individual or foreign corporation from the 
     disposition of any stock in such domestic corporation shall 
     be taken into account--
       ``(A) in the case of a nonresident alien individual, under 
     section 871(b)(1), or
       ``(B) in the case of a foreign corporation, under section 
     882(a)(1),
     as if the taxpayer were engaged during the taxable year in a 
     trade or business within the United States through a 
     permanent establishment in the United States and as if such 
     gain or loss were effectively connected with such trade or 
     business and attributable to such permanent establishment. 
     Notwithstanding section 865, any such gain or loss shall be 
     treated as from sources in the United States.
       ``(2) 24-percent minimum tax on nonresident alien 
     individuals.--
       ``(A) In general.--In the case of any nonresident alien 
     individual, the amount determined under section 55(b)(1)(A) 
     shall not be less than 24 percent of the lesser of--
       ``(i) the individual's alternative minimum taxable income 
     (as defined in section 55(b)(2)) for the taxable year, or
       ``(ii) the individual's net taxable stock gain for the 
     taxable year.
       ``(B) Net taxable stock gain.--For purposes of subparagraph 
     (A), the term `net taxable stock gain' means the excess of--
       ``(i) the aggregate gains for the taxable year from 
     dispositions of stock in domestic corporations with respect 
     to which such individual is a 10-percent shareholder, over
       ``(ii) the aggregate of the losses for the taxable year 
     from dispositions of such stock.
       ``(C) Coordination with section 897(a)(2).--Section 
     897(a)(2)(A) shall not apply to any nonresident alien 
     individual for any taxable year for which such individual has 
     a net taxable stock gain, but the amount of such net taxable 
     stock gain shall be increased by the amount of such 
     individual's net United States real property gain (as defined 
     in section 897(a)(2)(B)) for such taxable year.
       ``(b) 10-Percent Shareholder.--
       ``(1) In general.--For purposes of this section, the term 
     `10-percent shareholder' means any person who at any time 
     during the shorter of--
       ``(A) the period beginning on January 1, 1996, and ending 
     on the date of the disposition, or
       ``(B) the 5-year period ending on the date of the 
     disposition,
     owned 10 percent or more (by vote or value) of the stock in 
     the domestic corporation.
       ``(2) Constructive ownership.--
       ``(A) In general.--Section 318(a) (relating to constructive 
     ownership of stock) shall apply for purposes of paragraph 
     (1).
       ``(B) Modifications.--For purposes of subparagraph (A)--
       ``(i) paragraph (2)(C) of section 318(a) shall be applied 
     by substituting `10 percent' for `50 percent', and
       ``(ii) paragraph (3)(C) of section 318(a) shall be 
     applied--

       ``(I) by substituting `10 percent' for `50 percent', and
       ``(II) in any case where such paragraph would not apply but 
     for subclause (I), by considering a corporation as owning the 
     stock (other than stock in such corporation) owned by or for 
     any shareholder of such corporation in that proportion which 
     the value of the stock which such shareholder owns in such 
     corporation bears to the value of all stock in such 
     corporation.

       ``(3) Treatment of stock held by certain partnerships.--
       ``(A) In general.--For purposes of this section, if--
       ``(i) a partnership is a 10-percent shareholder in any 
     domestic corporation, and
       ``(ii) 10 percent or more of the capital or profits 
     interests in such partnership is held (directly or 
     indirectly) by nonresident alien individuals or foreign 
     corporations,
     each partner in such partnership who is not otherwise a 10-
     percent shareholder in such corporation shall, with respect 
     to the stock in such corporation held by the partnership, be 
     treated as a 10-percent shareholder in such corporation.
       ``(B) Exception.--
       ``(i) In general.--Subparagraph (A) shall not apply with 
     respect to stock in a domestic corporation held by any 
     partnership if, at all times during the 5-year period ending 
     on the date of the disposition involved--

       ``(I) the aggregate bases of the stock and securities in 
     such domestic corporation held by such partnership was less 
     than 25 percent of the partnership's net adjusted asset cost, 
     and
       ``(II) the partnership did not own 50 percent or more (by 
     vote or value) of the stock in such domestic corporation.

     The Secretary may by regulations disregard any failure to 
     meet the requirements of subclause (I) where the partnership 
     normally met such requirements during such 5-year period.
       ``(ii) Net adjusted asset cost.--For purposes of clause 
     (i), the term `net adjusted asset cost' means--

       ``(I) the aggregate bases of all of the assets of the 
     partnership other than cash and cash items, reduced by
       ``(II) the portion of the liabilities of the partnership 
     not allocable (on a proportionate basis) to assets excluded 
     under subclause (I).

       ``(C) Exception not to apply to 50-percent partners.--
     Subparagraph (B) shall not apply in the case of any partner 
     owning (directly or indirectly) more than 50 percent of the 
     capital or profits interests in the partnership at any time 
     during the 5-year period ending on the date of the 
     disposition.
       ``(D) Special rules.--For purposes of subparagraph (B) and 
     (C)--
       ``(i) Treatment of predecessors.--Any reference to a 
     partnership or corporation shall be treated as including a 
     reference to any predecessor thereof.
       ``(ii) Partnership not in existence.--If any partnership 
     was not in existence throughout the entire 5-year period 
     ending on the date of the disposition, only the portion of 
     such period during which the partnership (or any predecessor) 
     was in existence shall be taken into account.
       ``(E) Other pass-thru entities; tiered entities.--Rules 
     similar to the rules of the preceding provisions of this 
     paragraph shall also apply in the case of any pass-thru 
     entity other than a partnership and in the case of tiered 
     partnerships and other entities.
       ``(c) Coordination With Nonrecognition Provisions; Etc.--
       ``(1) Coordination with nonrecognition provisions.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any nonrecognition provision shall apply for purposes of this 
     section to a transaction only in the case of--
       ``(i) an exchange of stock in a domestic corporation for 
     other property the sale of which would be subject to taxation 
     under this chapter, or
       ``(ii) a distribution with respect to which gain or loss 
     would not be recognized under section 336 if the sale of the 
     distributed property by the distributee would be subject to 
     tax under this chapter.
       ``(B) Regulations.--The Secretary shall prescribe 
     regulations (which are necessary or appropriate to prevent 
     the avoidance of Federal income taxes) providing--
       ``(i) the extent to which nonrecognition provisions shall, 
     and shall not, apply for purposes of this section, and
       ``(ii) the extent to which--

       ``(I) transfers of property in a reorganization, and

       ``(II) changes in interests in, or distributions from, a 
     partnership, trust, or estate,

     shall be treated as sales of property at fair market value.
       ``(C) Nonrecognition provision.--For purposes of this 
     paragraph, the term `nonrecognition provision' means any 
     provision of this title for not recognizing gain or loss.
       ``(2) Certain other rules made applicable.--For purposes of 
     this section, rules similar to the rules of subsections (g) 
     and (j) of section 897 shall apply.
       ``(d) Certain Interest Treated as Stock.--For purposes of 
     this section--
       ``(1) any option or other right to acquire stock in a 
     domestic corporation,
       ``(2) the conversion feature of any debt instrument issued 
     by a domestic corporation, and
       ``(3) to the extent provided in regulations, any other 
     interest in a domestic corporation other than an interest 
     solely as creditor,
     shall be treated as stock in such corporation.
       ``(e) Treatment of Certain Gain as a Dividend.--In the case 
     of any gain which would be subject to tax by reason of this 
     section but for a treaty and which results from any 
     distribution in liquidation or redemption, for purposes of 
     this subtitle, such gain shall be treated as a dividend to 
     the extent of the earnings and profits of the domestic 
     corporation attributable to the stock. Rules similar to the 
     rules of section 1248(c) (determined without regard to 
     paragraph (2)(D) thereof) shall apply for purposes of the 
     preceding sentence.
       ``(f) Regulations.--The Secretary shall prescribe such 
     regulations as may be appropriate to carry out the purposes 
     of this section, including--
       ``(1) regulations coordinating the provisions of this 
     section with the provisions of section 897, and
       ``(2) regulations aggregating stock held by a group of 
     persons acting together.''
       (b) Withholding of Tax.--Subchapter A of chapter 3 is 
     amended by adding at the end the following new section:

     ``SEC. 1447. WITHHOLDING OF TAX ON CERTAIN STOCK 
                   DISPOSITIONS.

       ``(a) General Rule.--Except as otherwise provided in this 
     section, in the case of any disposition of stock in a 
     domestic corporation by a foreign person who is a 10-percent 
     shareholder in such corporation, the withholding agent shall 
     deduct and withhold a tax equal to 10 percent of the amount 
     realized on the disposition.
       ``(b) Exceptions.--
       ``(1) Stock which is not regularly traded.--In the case of 
     a disposition of stock which is not regularly traded, a 
     withholding agent shall not be required to deduct and 
     withhold any amount under subsection (a) if--
       ``(A) the transferor furnishes to such withholding agent an 
     affidavit by such transferor 

[[Page S 16133]]
     stating, under penalty of perjury, that section 899 does not apply to 
     such disposition because--
       ``(i) the transferor is not a foreign person, or
       ``(ii) the transferor is not a 10-percent shareholder, and
       ``(B) such withholding agent does not know (or have reason 
     to know) that such affidavit is not correct.
       ``(2) Stock which is regularly traded.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a withholding agent shall not be required to deduct and 
     withhold any amount under subsection (a) with respect to any 
     disposition of regularly traded stock if such withholding 
     agent does not know (or have reason to know) that section 899 
     applies to such disposition.
       ``(B) Special rule where substantial disposition.--If--
       ``(i) there is a disposition of regularly traded stock in a 
     corporation, and
       ``(ii) the amount of stock involved in such disposition 
     constitutes 1 percent or more (by vote or value) of the stock 
     in such corporation,
     subparagraph (A) shall not apply but paragraph (1) shall 
     apply as if the disposition involved stock which was not 
     regularly traded.
       ``(C) Notification by foreign person.--If section 899 
     applies to any disposition by a foreign person of regularly 
     traded stock, such foreign person shall notify the 
     withholding agent that section 899 applies to such 
     disposition.
       ``(3) Nonrecognition transactions.--A withholding agent 
     shall not be required to deduct and withhold any amount under 
     subsection (a) in any case where gain or loss is not 
     recognized by reason of section 899(c) (or the regulations 
     prescribed under such section).
       ``(c) Special Rule Where No Withholding.--If
       ``(1) there is no amount deducted and withheld under this 
     section with respect to any disposition to which section 899 
     applies, and
       ``(2) the foreign person does not pay the tax imposed by 
     this subtitle to the extent attributable to such disposition 
     on the date prescribed therefor,

     for purposes of determining the amount of such tax, the 
     foreign person's basis in the stock disposed of shall be 
     treated as zero or such other amount as the Secretary may 
     determine (and, for purposes of section 6501, the 
     underpayment of such tax shall be treated as due to a willful 
     attempt to evade such tax).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Withholding agent.--The term `withholding agent' 
     means--
       ``(A) the last United States person to have the control, 
     receipt, custody, disposal, or payment of the amount realized 
     on the disposition, or
       ``(B) if there is no such United States person, the person 
     prescribed in regulations.
       ``(2) Foreign person.--The term `foreign person' means any 
     person other than a United States person.
       ``(3) Regularly traded stock.--The term `regularly traded 
     stock' means any stock of a class which is regularly traded 
     on an established securities market.
       ``(4) Authority to prescribe reduced amount.--At the 
     request of the person making the disposition or the 
     withholding agent, the Secretary may prescribe a reduced 
     amount to be withheld under this section if the Secretary 
     determines that to substitute such reduced amount will not 
     jeopardize the collection of the tax imposed by section 
     871(b)(1) or 882(a)(1).
       ``(5) Other terms.--Except as provided in this section, 
     terms used in this section shall have the same respective 
     meanings as when used in section 899.
       ``(6) Certain rules made applicable.--Rules similar to the 
     rules of section 1445(e) shall apply for purposes of this 
     section.
       ``(e) Regulations.--The Secretary shall prescribe such 
     regulations as may be appropriate to carry out the purposes 
     of this section, including regulations coordinating the 
     provisions of this section with the provisions of sections 
     1445 and 1446.''
       (c) Exception From Branch Profits Tax.--Subparagraph (C) of 
     section 884(d)(2) is amended to read as follows:
       ``(C) gain treated as effectively connected with the 
     conduct of a trade or business within the United States 
     under--
       ``(i) section 897 in the case of the disposition of a 
     United States real property interest described in section 
     897(c)(1)(A)(ii), or
       ``(ii) section 899,''.
       (d) Reports With Respect to Certain Distributions.--
     Paragraph (2) of section 6038B(a) (relating to notice of 
     certain transfers to foreign person) is amended by striking 
     ``section 336'' and inserting ``section 302, 331, or 336''.
       (e) Clerical Amendments.--
       (1) The table of sections for subpart D of part II of 
     subchapter N of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 899. Dispositions of stock in domestic corporations by 10-
              percent foreign shareholders.''

       (2) The table of sections for subchapter A of chapter 3 is 
     amended by adding at the end the following new item:

``Sec. 1447. Withholding of tax on certain stock dispositions.''

       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to dispositions after December 31, 1995, except that section 
     1447 of the Internal Revenue Code of 1986 (as added by this 
     section) shall not apply to any disposition before the date 
     that is 6 months after the date of the enactment of this Act.
       (2) Coordination with treaties.--Sections 899 (other than 
     subsection (e) thereof) and 1447 of the Internal Revenue Code 
     of 1986 (as added by this section) shall not apply to any 
     disposition by any person if the application of such sections 
     to such disposition would be contrary to any treaty between 
     the United States and a foreign country which was in effect 
     on the date of the enactment of this Act, and at the time of 
     such disposition and if the person making such disposition is 
     entitled to the benefits of such treaty determined after the 
     application of section 894(c) of the Internal Revenue Code of 
     1986 (as added by section 12881).

     SEC. 12881. LIMITATION ON TREATY BENEFITS.

       (a) General Rule.--Section 894 (relating to income affected 
     by treaty) is amended by adding at the end the following new 
     subsection:
       ``(c) Limitation on Treaty Benefits.--
       ``(1) Treaty shopping.--No foreign entity shall be entitled 
     to any benefits granted by the United States under any treaty 
     between the United States and a foreign country unless such 
     entity is a qualified resident of such foreign country.
       ``(2) Tax favored income.--No person shall be entitled to 
     any benefits granted by the United States under any treaty 
     between the United States and a foreign country with respect 
     to any income of such person if such income bears a 
     significantly lower tax under the laws of such foreign 
     country than similar income arising from sources within such 
     foreign country derived by residents of such foreign country.
       ``(3) Qualified resident.--For purposes of this 
     subsection--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the term `qualified resident' means, with respect 
     to any foreign country, any foreign entity which is a 
     resident of such foreign country unless--
       ``(i) 50 percent or more (by value) of the stock or 
     beneficial interests in such entity are owned (directly or 
     indirectly) by individuals who are not residents of such 
     foreign country and who are not United States citizens or 
     resident aliens, or
       ``(ii) 50 percent or more of its income is used (directly 
     or indirectly) to meet liabilities to persons who are not 
     residents of such foreign country or citizens or residents of 
     the United States.
       ``(B) Special rule for publicly traded entities.--A foreign 
     entity which is a resident of a foreign country shall be 
     treated as a qualified resident of such foreign country if--
       ``(i) interests in such entity are primarily and regularly 
     traded on an established securities market in such country, 
     or
       ``(ii) such entity is not described in subparagraph (A)(ii) 
     and such entity is wholly owned by another foreign entity 
     which is organized in such foreign country and the interests 
     in which are so traded.
       ``(C) Entities owned by publicly traded domestic 
     corporations.--A foreign entity which is a resident of a 
     foreign country shall be treated as a qualified resident of 
     such foreign country if--
       ``(i) such entity is not described in subparagraph (A)(ii) 
     and such entity is wholly owned (directly or indirectly) by a 
     domestic corporation, and
       ``(ii) stock of such domestic corporation is primarily and 
     regularly traded on an established securities market in the 
     United States.
       ``(D) Secretarial authority.--The Secretary may, in his 
     sole discretion, treat a foreign entity as being a qualified 
     resident of a foreign country if such entity establishes to 
     the satisfaction of the Secretary that such entity meets such 
     requirements as the Secretary may establish to ensure that 
     individuals who are not residents of such foreign country do 
     not use the treaty between such foreign country and the 
     United States in a manner consistent with the purposes of 
     this subsection.
       ``(4) Foreign entity.--For purposes of this subsection, the 
     term `foreign entity' means any corporation, partnership, 
     trust, estate, or other entity which is not a United States 
     person.''
       (b) Conforming Amendment.--Paragraph (4) of section 884(e) 
     is amended to read as follows:
       ``(4) Qualified resident.--For purposes of this subsection, 
     the term `qualified resident' has the meaning given to such 
     term by section 894(c)(3).''
       (c) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 1996, and shall apply to any 
     treaty whether entered into before, on, or after such date.
                                 ______


                 SIMPSON (AND ROBB) AMENDMENT NO. 3017

  Mr. DOMENICI (for Mr. Simpson for himself and Mr. Robb) proposed an 
amendment to the bill S. 1357, supra, as follows:

       At the appropriate place in the bill add the following:
       
[[Page S 16134]]


     SEC.   . GENERATIONAL ACCOUNTING IN PRESIDENT'S BUDGET.

       Section 1105(a) of title 31, United States Code, is amended 
     by adding at the end thereof the following:
       ``(32) an analysis of the generational accounting 
     consequences of the budget including the projected Federal 
     deficit, at current spending levels, in the fiscal year that 
     is 20 years after the fiscal year for which the budget is 
     submitted and the revenue levels (including the increase 
     required in current levels) required to eliminate the 
     projected Federal deficit.''.
                                 ______


               WELLSTONE (AND CHAFEE) AMENDMENT NO. 3018

  Mr. WELLSTONE (for himself and Mr. Chafee) proposed an amendment to 
the bill S. 1357, supra, as follows:

       At the end of section 2171(b) of the Social Security Act, 
     as added by section 7191(a), insert:
       ``The Secretary may waive this section at the request of 
     the State for any category of individuals who, as of the date 
     of enactment of this title, would have qualified for coverage 
     under section 1915(c) and 1902(e)(3).''
                                 ______


              ROCKEFELLER (AND OTHERS) AMENDMENT NO. 3019

  Mr. ROCKEFELLER (for himself, Mr. Feingold, Ms. Moseley-Braun, and 
Mrs. Feinstein) proposed an amendment to the bill S. 1357, supra, as 
follows:

       At the end of part B of title XXI of the Social Security 
     Act, as added by section 7191, add the following new section:

     ``SEC. 2118. EXTENSION OF ELIGIBILITY FOR MEDICAL ASSISTANCE.

       ``(a) 12-Month Extension.--
       ``(1) Requirement.--Notwithstanding any other provision of 
     this title, each State plan approved under this title provide 
     that each family which was receiving assistance pursuant to a 
     plan of the State approved under part A of title IV in at 
     least 3 of the 6 months immediately preceding the month in 
     which such family becomes ineligible for such assistance, 
     because of hours of, or income from, employment of the parent 
     or caretaker relative (as defined in subsection (d)), shall, 
     subject to paragraph (3) and without any reapplication for 
     benefits under the plan, remain eligible for assistance under 
     the plan approved under this title during the immediately 
     succeeding 12-month period in accordance with this subsection
       ``(2) Notice of benefits.--Each State, in the notice of 
     termination of assistance under part A of title IV sent to a 
     family meeting the requirements of paragraph (1)--
       ``(A) shall notify the family of its right to extended 
     medical assistance under this subsection and include in the 
     notice a description of the circumstances (described in 
     paragraph (3)) under which such extension may be modified or 
     terminated and the reporting requirements under paragraph 
     (5); and
       ``(B) shall include a card or other evidence of the 
     family's entitlement to assistance under this title for the 
     period provided in this subsection.
       ``(3) Modification or termination of extension.--
       ``(A) Modification.--Subject to subparagraph (C), and, if 
     the modification relates to the imposition of cost-sharing or 
     premiums, subject to section 2113, the State may modify the 
     terms of the extension of assistance during the 12-month 
     period described in paragraph (1).
       ``(B) Termination.--
       ``(i) No dependent child.--Subject to clause (ii) and 
     subparagraph (C), extension of assistance during the 12-month 
     period described in paragraph (1) to a family shall terminate 
     (during such period) at the close of the first month in which 
     the family ceases to include a child, whether or not the 
     child is a needy child under part A of title IV.
       ``(ii) Continutaion in certain cases until 
     redetermination.--With respect to a child who would cease to 
     receive medical assistance because of clause (i) but who may 
     be eligible for assistance under the State plan because 
     the child is described in section 2111(a)(2), the State 
     may not discontinue such assistance under such clause 
     until the State has determined that the child is not 
     eligible for assistance under the plan.
       ``(C) Notice before modification or termination.--No 
     modification or termination of assistance shall become 
     effective under this paragraph until the State has provided 
     the family with a 60-day notice of the grounds for the 
     modification or termination, which notice shall include (in 
     the case of termination) a description of how the family may 
     reestablish eligibility for medical assistance under the 
     State plan. No such termination shall be effective earlier 
     than 10 days after the date of mailing of such notice.
       ``(4) Scope of coverage.--
       ``(A) In general.--Subject to subparagraphs (B), (C), and 
     (D), during the 12-month extension period under this 
     subsection, the amount, duration, and scope of medical 
     assistance made available with respect to a family shall be 
     the same as if the family were still receiving assistance 
     under the plan approved under part A of title IV.
       ``(B) Elimination of most non-acute care benefits.--At a 
     State's option and notwithstanding any other provision of 
     this title, a State may choose not to provide medical 
     assistance under this subsection with respect to any (or all) 
     non-acute care benefits.
       ``(C) State medicaid `wrap-around' option.--A State, at its 
     option, may pay a family's expenses for premiums, 
     deductibles, coinsurance, and similar costs for health 
     insurance or other health coverage offered by an employer of 
     the parent or caretaker relative or by an employer of the 
     absent parent of a needy child. In the case of such coverage 
     offered by an employer of the parent or caretaker relative--
       ``(i) the State may require the parent or caretaker 
     relative, as a condition of extension of coverage under this 
     subsection for the parent or caretaker and the parent's or 
     caretaker's family, to make application for such employer 
     coverage, but only if--
       ``(I) the parent caretaker relative is not required to make 
     financial contributions for such coverage (whether through 
     payroll deduction, payment of deductibles, coinsurance, or 
     similar costs, or otherwise), and
       ``(II) the State provides, directly or otherwise, for 
     payment of any of the premium amount, deductible, 
     coinsurance, or similar expense that the employee is 
     otherwise required to pay; and
       ``(ii) the State shall treat the coverage under such an 
     employer plan as a third party liability (under section 
     2135).

     Payments for premiums, deductibles, coinsurance, and similar 
     expenses under this subparagraph shall be considered, for 
     purposes of section 2122(a), to be payments for medical 
     assistance.
       ``(D) Alternative assistance.--At a State's option, the 
     State may offer families a choice of health care coverage 
     under one or more of the following, instead of the medical 
     assistance otherwise made available under this subsection:
       ``(i) Enrollment in family option of employer plan.--
     Enrollment of the parent or caretaker relative and needy 
     children in a family option of the group health plan offered 
     to the parent or caretaker relative.
       ``(ii) Enrollment in family option of state employee 
     plan.--Enrollment of the parent or caretaker relative and 
     needy children in a family option within the options of the 
     group health plan or plans offered by the State to State 
     employees.
       ``(iii) Enrollment in state uninsured plan.--Enrollment of 
     the parent or caretaker relative and needy children in a 
     basic State health plan offered by the State to individuals 
     in the State (or areas of the State) otherwise unable to 
     obtain health insurance coverage.
       ``(iv) Enrollment in hmo, etc.--Enrollment of the parent or 
     caretaker relative and needy children in a capitated health 
     care organization (as defined in section 2114(c)(1)) less 
     than 50 percent of the membership (enrolled on a prepaid 
     basis) of which consists of individuals who are eligible 
     to receive benefits under this title (other than because 
     of the option offered under this clause). The option of 
     enrollment under this clause is in addition to, and not in 
     lieu of, any enrollment option that the State might offer 
     under subparagraph (A)(i) with respect to receiving 
     services through a capitated health care organization in 
     accordance with section 2114.

     If a State elects to offer an option to enroll a family under 
     this subparagraph, the State shall pay any premiums and other 
     costs for such enrollment imposed on the family and may pay 
     deductibles and coinsurance imposed on the family. A State's 
     payment of premiums for the enrollment of families under this 
     subparagraph (not including any premiums otherwise payable by 
     an employer and less the amount of premiums collected from 
     such families under paragraph (5)) and payment of any 
     deductibles and coinsurance shall be considered, for purposes 
     of section 2122(a), to be payments for medical assistance.
       ``(5) Reporting requirements.--Each State shall require (as 
     a condition for extended assistance under this subsection) 
     that a family receiving such extended assistance report to 
     the State such eligibility verification as the State deems 
     necessary. A State may permit such extended assistance under 
     this subsection notwithstanding a failure to report under 
     this paragraph if the family has established, to the 
     satisfaction of the State, good cause for the failure to 
     report on a timely basis.
       ``(b) Applicability in States and Territories.--
       ``(1) 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(a), the Secretary shall require the State to meet the 
     requirements of this section in the same manner as the State 
     would be required to meet such requirement if the State had 
     in effect a plan approved under this title.
       ``(2) Inapplicability in commonwealths and territories.--
     The provisions of this section shall only apply to the 50 
     States and the District of Columbia.
       ``(c) General Disqualification for Fraud.--
       ``(1) Ineligibility for assistance.--This section shall not 
     apply to an individual who is a member of a family which has 
     received assistance under part A of title IV if the State 
     makes a finding that, at any time during the last 6 months in 
     which the family was receiving such assistance before 
     otherwise being provided extended eligibility under this 
     section, the individual was ineligible for such assistance 
     because of fraud.

[[Page S 16135]]

       ``(2) General disqualifications.--For additional provisions 
     relating to fraud and program abuse, see sections 1128, 
     1128A, and 1128B.
       ``(d) Caretaker Relative Defined.--In this section, the 
     term `caretaker relative' has the meaning of such term as 
     used in part A of title IV.
       At the end of title VII add the following new subtitle:

  Subtitle K--Home and Community-Based Services for Individuals With 
                              Disabilities

     SEC. 7500. PURPOSES; SHORT TITLE; TABLE OF CONTENTS.

       (a) Purposes.--The purposes of this subtitle are--
       (1) to provide States with a capped source of funding to 
     establish a system of consumer-oriented, consumer-directed 
     home and community-based long-term care services for 
     individuals with disabilities of any age;
       (2) to ensure that all individuals with severe disabilities 
     have access to such services while protecting taxpayers and 
     maximizing program benefits by including significant cost-
     sharing provisions that require individuals with higher 
     incomes to pay a greater share of the cost of their care;
       (3) to build on the experience of Wisconsin's home and 
     community-based long-term care program, the Community Options 
     Program (COP), which has been a national model of reform, and 
     the keystone of Wisconsin's long-term care reforms that have 
     saved Wisconsin taxpayers hundreds of millions of dollars; 
     and
       (4) to continue the recent bipartisan efforts to establish 
     this kind of long-term care reform, including the excellent 
     long-term care proposal included in President Clinton's 
     health care reform bill last year, as well as the provisions 
     establishing home and community-based long-term care benefits 
     in the versions of the President's bill that were reported 
     out of the Senate Committee on Labor and Human Resources and 
     the Senate Community on Finance last session, provisions 
     which had, in both cases, strong bipartisan support.
       (b) Short Title.--This subtitle may be cited as the ``Long-
     Term Care Reform and Deficit Reduction Act of 1995''.
       (c) Table of Contents.--The table of contents of this 
     subtitle is as follows:

Sec. 7500. Purposes; short title; table of contents.
Sec. 7501. State programs for home and community-based services for 
              individuals with disabilities.
Sec. 7502. State plans.
Sec. 7503. Individuals with disabilities defined.
Sec. 7504. Home and community-based services covered under State plan.
Sec. 7505. Cost sharing.
Sec. 7506. Quality assurance and safeguards.
Sec. 7507. Advisory groups.
Sec. 7508. Payments to States.
Sec. 7509. Appropriations; allotments to States.
Sec. 7510. Repeals.

     SEC. 7501. STATE PROGRAMS FOR HOME AND COMMUNITY-BASED 
                   SERVICES FOR INDIVIDUALS WITH DISABILITIES.

       (a) In General.--Each State that has a plan for home and 
     community-based services for individuals with disabilities 
     submitted to and approved by the Secretary under section 
     7502(b) may receive payment in accordance with section 7508.
       (b) Entitlement to Services.--Nothing in this subtitle 
     shall be construed to create a right to services for 
     individuals or a requirement that a State with an approved 
     plan expend the entire amount of funds to which it is 
     entitled under this subtitle.
       (c) Designation of Agency.--Not later than 6 months after 
     the date of enactment of this Act, the Secretary shall 
     designate an agency responsible for program administration 
     under this subtitle.

     SEC. 7502. STATE PLANS.

       (a) Plan Requirements.--In order to be approved under 
     subsection (b), a State plan for home and community-based 
     services for individuals with disabilities must meet the 
     following requirements:
       (1) State maintenance of effort.--
       (A) In general.--A State plan under this subtitle shall 
     provide that the State will, during any fiscal year that the 
     State is furnishing services under this subtitle, make 
     expenditures of State funds in an amount equal to the State 
     maintenance of effort amount for the year determined under 
     subparagraph (B) for furnishing the services described in 
     subparagraph (C) under the State plan under this subtitle or 
     the State plan under title XXI of the Social Security Act.
       (B) State maintenance of effort amount.--
       (i) In general.--The maintenance of effort amount for a 
     State for a fiscal year is an amount equal to--
       (I) for fiscal year 1997, the base amount for the State (as 
     determined under clause (ii)) updated through the midpoint of 
     fiscal year 1997 by the estimated percentage change in the 
     index described in clause (iii) during the period beginning 
     on October 1, 1995, and ending at that midpoint; and
       (II) for succeeding fiscal years, an amount equal to the 
     amount determined under this clause for the previous fiscal 
     year updated through the midpoint of the year by the 
     estimated percentage change in the index described in clause 
     (iii) during the 12-month period ending at that midpoint, 
     with appropriate adjustments to reflect previous 
     underestimations or overestimations under this clause in the 
     projected percentage change in such index.
       (ii) State base amount.--The base amount for a State is an 
     amount equal to the total expenditures from State funds made 
     under the State plan under title XIX of the Social Security 
     Act (42 U.S.C. 1396 et seq.) during fiscal year 1995 with 
     respect to medical assistance consisting of the services 
     described in subparagraph (C).
       (iii) Index described.--For purposes of clause (i), the 
     Secretary shall develop an index that reflects the projected 
     increases in spending for services under subparagraph (C), 
     adjusted for differences among the States.
       (C) Medicaid services described.--The services described in 
     this subparagraph are the following:
       (i) Personal care services (as described in section 
     1905(a)(24) of the Social Security Act (42 U.S.C. 
     1396d(a)(24)), as in effect on the day before the date of the 
     enactment of this Act).
       (ii) Home or community-based services furnished under a 
     waiver granted under subsection (c), (d), or (e) of section 
     1915 of such Act (42 U.S.C. 1396n), as so in effect.
       (iii) Home and community care furnished to functionally 
     disabled elderly individuals under section 1929 of such Act 
     (42 U.S.C. 1396t), as so in effect.
       (iv) Community supported living arrangements services under 
     section 1930 of such Act (42 U.S.C. 1396u), as so in effect.
       (v) Services furnished in a hospital, nursing facility, 
     intermediate care facility for the mentally retarded, or 
     other institutional setting specified by the Secretary.
       (2) Eligibility.--
       (A) In general.--Within the amounts provided by the State 
     and under section 7508 for such plan, the plan shall provide 
     that services under the plan will be available to individuals 
     with disabilities (as defined in section 7503(a)) in the 
     State.
       (B) Initial screening.--The plan shall provide a process 
     for the initial screening of an individual who appears to 
     have some reasonable likelihood of being an individual with 
     disabilities. Any such process shall require the provision of 
     assistance to individuals who wish to apply but whose 
     disability limits their ability to apply. The initial 
     screening and the determination of disability (as defined 
     under section 7503(b)(1)) shall be conducted by a public 
     agency.
       (C) Restrictions.--
       (i) In general.--The plan may not limit the eligibility of 
     individuals with disabilities based on--
       (I) income;
       (II) age;
       (III) residential setting (other than with respect to an 
     institutional setting, in accordance with clause (ii)); or
       (IV) other grounds specified by the Secretary;

       except that through fiscal year 2005, the Secretary may 
     permit a State to limit eligibility based on level of 
     disability or geography (if the State ensures a balance 
     between urban and rural areas).
       (ii) Institutional setting.--The plan may limit the 
     eligibility of individuals with disabilities based on the 
     definition of the term ``institutional setting'', as 
     determined by the State.
       (D) Continuation of services.--The plan must provide 
     assurances that, in the case of an individual receiving 
     medical assistance for home and community-based services 
     under the State Medicaid plan under title XXI of the Social 
     Security Act (42 U.S.C. 1396 et seq.) as of the date a 
     State's plan is approved under this subtitle, the State will 
     continue to make available (either under this plan, under the 
     State Medicaid plan, or otherwise) to such individual an 
     appropriate level of assistance for home and community-based 
     services, taking into account the level of assistance 
     provided as of such date and the individual's need for home 
     and community-based services.
       (3) Services.--
       (A) Needs assessment.--Not later than the end of the second 
     year of implementation, the plan or its amendments shall 
     include the results of a statewide assessment of the needs of 
     individuals with disabilities in a format required by the 
     Secretary. The needs assessment shall include demographic 
     data concerning the number of individuals within each 
     category of disability described in this subtitle, and the 
     services available to meet the needs of such individuals.
       (B) Specification.--Consistent with section 7504, the plan 
     shall specify--
       (i) the services made available under the plan;
       (ii) the extent and manner in which such services are 
     allocated and made available to individuals with 
     disabilities; and
       (iii) the manner in which services under the plan are 
     coordinated with each other and with health and long-term 
     care services available outside the plan for individuals with 
     disabilities.
       (C) Taking into account informal case.--A State plan may 
     take into account, in determining the amount and array of 
     services made available to covered individuals with 
     disabilities, the availability of informal care. Any 
     individual plan of care developed under section 7504(b)(1)(B) 
     that includes informal care shall be required to verify the 
     availability of such care.
       (D) Allocation.--The State plan--
       (i) shall specify how services under the plan will be 
     allocated among covered individuals with disabilities;
       (ii) shall attempt to meet the needs of individuals with a 
     variety of disabilities within the limits of available 
     funding;

[[Page S 16136]]

       (iii) shall include services that assist all categories of 
     individuals with disabilities, regardless of their age or the 
     nature of their disabling conditions;
       (iv) shall demonstrate that services are allocated 
     equitably, in accordance with the needs assessment required 
     under subparagraph (A); and
       (v) shall ensure that--
       (I) the proportion of the population of low-income 
     individuals with disabilities in the State that represents 
     individuals with disabilities who are provided home and 
     community-based services either under the plan, under the 
     State medicaid plan, or under both, is not less than
       (II) the proportion of the population of the State that 
     represents individuals who are low-income individuals.
       (E) Limitation on licensure or certification.--The State 
     may not subject consumer-directed providers of personal 
     assistance services to licensure, certification, or other 
     requirements that the Secretary finds not to be necessary for 
     the health and safety of individuals with disabilities.
       (F) Consumer choice.--To the extent feasible, the State 
     shall follow the choice of an individual with disabilities 
     (or that individual's designated representative who may be a 
     family member) regarding which covered services to receive 
     and the providers who will provide such services.
       (4) Cost sharing.--The plan shall impose cost sharing with 
     respect to covered services in accordance with section 7505.
       (5) Types of providers and requirements for 
     participation.--The plan shall specify--
       (A) the types of service providers eligible to participate 
     in the program under the plan, which shall include consumer-
     directed providers of personal assistance services, except 
     that the plan--
       (i) may not limit benefits to services provided by 
     registered nurses or licensed practical nurses; and
       (ii) may not limit benefits to services provided by 
     agencies or providers certified under title XVII of the 
     Social Security Act (42 U.S.C. 1395 et seq.); and
       (B) any requirements for participation applicable to each 
     type of service provider.
       (6) Provider reimbursement.--
       (A) Payment methods.--The plan shall specify the payment 
     methods to be used to reimburse providers for services 
     furnished under the plan. Such methods may include 
     retrospective reimbursement on a fee-for-service basis, 
     prepayment on a capitation basis, payment by cash or vouchers 
     to individuals with disabilities, or any combination of these 
     methods. In the case of payment to consumer-directed 
     providers of personal assistance services, including payment 
     through the use of cash or vouchers, the plan shall specify 
     how the plan will assure compliance with applicable 
     employment tax and health care coverage provisions.
       (B) Payment rate.--The plan shall specify the methods and 
     criteria to be used to set payment rates for--
       (i) agency administered services furnished under the plan; 
     and
       (ii) consumer-directed personal assistance services 
     furnished under the plan, including cash payments or vouchers 
     to individuals with disabilities, except that such payments 
     shall be adequate to cover amounts required under applicable 
     employment tax and health care coverage provisions.
       (C) Plan payment as payment in full.--The plan shall 
     restrict payment under the plan for covered services to those 
     providers that agree to accept the payment under the plan (at 
     the rates established pursuant to subparagraph (B) and any 
     cost sharing permitted or provided for under section 7505 as 
     payment in full for services furnished under the plan.
       (7) Quality assurance and safeguards.--The State plan shall 
     provide for quality assurance and safeguards for applicants 
     and beneficiaries in accordance with section 7506.
       (8) Advisory group.--The State plan shall--
       (A) assure the establishment and maintenance of an advisory 
     group under section 7507(b); and
       (B) include the documentation prepared by the group under 
     section 7507(b)(4).
       (9) Administration and access.--
       (A) State agency.--The plan shall designate a State agency 
     or agencies to administer (or to supervise the administration 
     of) the plan.
       (B) Coordination.--The plan shall specify how it will--
       (i) coordinate services provided under the plan, including 
     eligibility prescreening, service coordination, and referrals 
     for individuals with disabilities who are ineligible for 
     services under this subtitle with the State medicaid plan 
     under title XXI of the Social Security Act, titles V and XX 
     of such Act (42 U.S.C. 701 et seq. and 1397 et seq.), 
     programs under the Older Americans Act of 1965 (42 U.S.C. 
     3001 et seq.), programs under the Developmental Disabilities 
     Assistance and Bill of Rights Act (42 U.S.C. 6000 et seq.), 
     programs under the Individuals with Disabilities Education 
     Act (20 U.S.C. 1400 et seq.), and any other Federal or State 
     programs that provide services or assistance targeted to 
     individuals with disabilities; and
       (ii) coordinate with health plans.
       (C) Administrative expenditures.--Effective beginning with 
     fiscal year 2005, the plan shall contain assurances that not 
     more than 10 percent of expenditures under the plan for all 
     quarters in any fiscal year shall be for administrative 
     costs.
       (D) Information and assistance.--The plan shall provide for 
     a single point of access to apply for services under the 
     State program for individuals with disabilities. 
     Notwithstanding the preceding sentence, the plan may 
     designate separate points of access to the State program for 
     individuals under 22 years of age, for individuals 65 years 
     of age or older, or for other appropriate classes of 
     individuals.
       (10) Reports and information to secretary; audits.--The 
     plan shall provide that the State will furnish to the 
     Secretary--
       (A) such reports, and will cooperate with such audits, as 
     the Secretary determines are needed concerning the State's 
     administration of its plan under this subtitle, including the 
     processing of claims under the plan; and
       (B) such data and information as the Secretary may require 
     in a uniform format as specified by the Secretary.
       (11) Use of state funds for matching.--The plan shall 
     provide assurances that Federal funds will not be used to 
     provide for the State share of expenditures under this 
     subtitle.
       (12) Health care worker redeployment.--The plan shall 
     provide for the following:
       (A) Before initiating the process of implementing the State 
     program under such plan, negotiations will be commenced with 
     labor unions representing the employees of the affected 
     hospitals or other facilities.
       (B) Negotiations under subparagraph (A) will address the 
     following:
       (i) The impact of the implementation of the program upon 
     the workforce.
       (ii) Methods to redeploy workers to positions in the 
     proposed system, in the case of workers affected by the 
     program.
       (C) The plan will provide evidence that there has been 
     compliance with subparagraphs (A) and (B), including a 
     description of the results of the negotiations.
       (13) Terminology.--The plan shall adhere to uniform 
     definitions of terms, as specified by the Secretary.
       (b) Approval of Plans.--The Secretary shall approve a plan 
     submitted by a State if the Secretary determines that the 
     plan--
       (1) was developed by the State after a public comment 
     period of not less than 30 days; and
       (2) meets the requirements of subsection (a).

     The approval of such a plan shall take effect as of the first 
     day of the first fiscal year beginning after the date of such 
     approval (except that any approval made before January 1, 
     1997, shall be effective as of January 1, 1997). In order to 
     budget funds allotted under this subtitle, the Secretary 
     shall establish a deadline for the submission of such a plan 
     before the beginning of a fiscal year as a condition of its 
     approval effective with that fiscal year. Any significant 
     changes to the State plan shall be submitted to the Secretary 
     in the form of plan amendments and shall be subject to 
     approval by the Secretary.
       (c) Monitoring.--The Secretary shall annually monitor the 
     compliance of State plans with the requirements of this 
     subtitle according to specified performance standards. In 
     accordance with section 7508(e), States that fail to comply 
     with such requirements may be subject to a reduction in the 
     Federal matching rates available to the State under section 
     7508(a) or the withholding of Federal funds for services or 
     administration until such time as compliance is achieved.
       (d) Technical Assistance.--The Secretary shall ensure the 
     availability of ongoing technical assistance to States under 
     this section. Such assistance shall include serving as a 
     clearinghouse for information regarding successful practices 
     in providing long-term care services.
       (e) Regulations.--The Secretary shall issue such 
     regulations as may be appropriate to carry out this subtitle 
     on a timely basis.

     SEC. 7503. INDIVIDUALS WITH DISABILITIES DEFINED.

       (A) In General.--For purposes of this subtitle, the term 
     ``individual with disabilities'' means any individual within 
     one or more of the following categories of individuals:
       (1) Individuals requiring help with activities of daily 
     living.--An individual of any age who--
       (A) requires hands-on or standby assistance, supervision, 
     or cueing (as defined in regulations) to perform three or 
     more activities of daily living (as defined in subsection 
     (d)); and
       (B) is expected to require such assistance, supervision, or 
     cueing over a period of at least 90 days.
       (2) Individuals with severe cognitive or mental 
     impairment.--An individual of any age--
       (A) whose score, on a standard mental status protocol (or 
     protocols) appropriate for measuring the individual's 
     particular condition specified by the Secretary, indicates 
     either severe cognitive impairment or severe mental 
     impairment, or both;
       (B) who--
       (i) requires hands-on or standby assistance, supervision, 
     or cueing with one or more activities of daily living;
       (ii) requires hand-on or standby assistance, supervision, 
     or cueing with at least such instrumental activity (or 
     activities) of daily living related to cognitive or mental 
     impairment as the Secretary specifies; or
       (iii) displays symptoms of one or more serious behavioral 
     problems (that is on a list of such problems specified by the 
     Secretary) that create a need for supervision to prevent harm 
     to self or others; and
       (C) who is expected to meet the requirements of 
     subparagraphs (A) and (B) over a period of at least 90 days.


[[Page S 16137]]

     Not later than 2 years after the date of enactment of this 
     Act, the Secretary shall make recommendations regarding the 
     most appropriate duration of disability under this paragraph.
       (3) Individuals with severe or profound mental 
     retardation.--An individual of any age who has severe or 
     profound mental retardation (as determined according to a 
     protocol specified by the Secretary).
       (4) Young children with severe disabilities.--An individual 
     under 6 years of age who--
       (A) has a severe disability or chronic medical condition 
     that limits functioning in a manner that is comparable in 
     severity to the standards established under paragraphs (1), 
     (2), or (3); and
       (B) is expected to have such a disability or condition and 
     require such services over a period of at least 90 days.
       (5) State option with respect to individuals with 
     comparable disabilities.--Not more than 2 percent of a 
     State's allotment for services under this subtitle may be 
     expended for the provision of services to individuals with 
     severe disabilities that are comparable in severity to the 
     criteria described in paragraphs (1) through (4), but who 
     fail to meet the criteria in any single category under such 
     paragraphs.
       (b) Determination.--
       (1) In general.--In formulating eligibility criteria under 
     subsection (a), the Secretary shall establish criteria for 
     assessing the functional level of disability among all 
     categories of individuals with disabilities that are 
     comparable in severity, regardless of the age or the nature 
     of the disabling condition of the individual. The 
     determination of whether an individual is an individual with 
     disabilities shall be made by a public or nonprofit agency 
     that is specified under the State plan and that is not a 
     provider of home and community-based services under this 
     subtitle and by using a uniform protocol consisting of an 
     initial screening and a determination of disability specified 
     by the Secretary. A State may not impose cost sharing with 
     respect to a determination of disability. A State may collect 
     additional information, at the time of obtaining information 
     to make such determination, in order to provide for the 
     assessment and plan described in section 7504(b) or for other 
     purposes.
       (2) Periodic reassessment.--The determination that an 
     individual is an individual with disabilities shall be 
     considered to be effective under the State plan for a period 
     of not more than 6 months (or for such longer period in such 
     cases as a significant change in an individual's condition 
     that may affect such determination is unlikely). A 
     reassessment shall be made if there is a significant change 
     in an individual's condition that may affect such 
     determination.
       (c) Eligibility Criteria.--The Secretary shall reassess the 
     validity of the eligibility criteria described in subsection 
     (a) as new knowledge regarding the assessments of functional 
     disabilities becomes available. The Secretary shall report to 
     the Congress on its findings under the preceding sentence as 
     determined appropriate by the Secretary.
       (d) Activity of Daily Living Defined.--For purposes of this 
     subtitle, the term ``activity of daily living'' means any of 
     the following: eating, toileting, dressing, bathing, and 
     transferring.

     SEC. 7504. HOME AND COMMUNITY-BASED SERVICES COVERED UNDER 
                   STATE PLAN.

       (a) Specification.--
       (1) In general.--Subject to the succeeding provisions of 
     this section, the State plan under this subtitle shall 
     specify--
       (A) the home and community-based services available under 
     the plan to individuals with disabilities (or to such 
     categories of such individuals); and
       (B) any limits with respect to such services.
       (2) Flexiblity in meeting individual needs.--Subject to 
     subsection (e)(2), such services may be delivered in an 
     individual's home, a range of community residential 
     arrangements, or outside the home.
       (b) Requirement for Needs Assessment and Plan of Care.--
       (1) In general.--The State plan shall provide for home and 
     community-based services to an individual with disabilities 
     only if the following requirements are met:
       (A) Comprehensive assessment.--
       (i) In general.--A comprehensive assessment of an 
     individual's need for home and community-based services 
     (regardless of whether all needed services are available 
     under the plan) shall be made in accordance with a uniform, 
     comprehensive assessment tool that shall be used by a State 
     under this paragraph with the approval of the Secretary. The 
     comprehensive assessment shall be made by a public or 
     nonprofit agency that is specified under the State plan and 
     that is not a provider of home and community-based services 
     under this subtitle.
       (ii) Exception.--The State may elect to waive the 
     provisions of clause (i) if--
       (I) with respect to any area of the State, the State has 
     determined that there is an insufficient pool of entities 
     willing to perform comprehensive assessments in such area due 
     to a low population of individuals eligible for home and 
     community-based services under this subtitle residing in the 
     area; and
       (II) the State plan specifies procedures that the State 
     will implement in order to avoid conflicts of interest.
       (B) Individualized plan of care.--
       (i) In general.--An individualized plan of care based on 
     the assessment made under subparagraph (A) shall be developed 
     by a public or nonprofit agency that is specified under the 
     State plan and that is not a provider of home and community-
     based services under this subtitle, except that the State may 
     elect to waive the provisions of this sentence if, with 
     respect to any area of the State, the State has determined 
     there is an insufficient pool of entities willing to develop 
     individualized plans of care in such area due to a low 
     population of individuals eligible for home and community-
     based services under this subtitle residing in the area, and 
     the State plan specifies procedures that the State will 
     implement in order to avoid conflicts of interest.
       (ii) Requirements with respect to plan of care.--A plan of 
     care under this subparagraph shall--
       (I) specify which services included under the individual 
     plan will be provided under the State plan under this 
     subtitle;
       (II) identify (to he extent possible) how the individual 
     will be provided any services specified under the plan of 
     care and not provided under the State plan;
       (III) specify how the provision of services to the 
     individual under the plan will be coordinated with the 
     provision of other health care services to the individual; 
     and
       (IV) be reviewed and updated every 6 months (or more 
     frequently if there is a change in the individual's 
     condition).

     The State shall make reasonable efforts to identify and 
     arrange for services described in subclause (II). Nothing in 
     this subsection shall be construed as requiring a State 
     (under the State plan or otherwise) to provide all the 
     services specified in such a plan.
       (C) Involvement of individuals.--The individualized plan of 
     care under subparagraph (B) for an individual with 
     disabilities shall--
       (i) be developed by qualified individuals (specified in 
     subparagraph (B));
       (ii) be developed and implemented in close consultation 
     with the individual (or the individual's designated 
     representative); and
       (iii) be approved by the individual (or the individual's 
     designated representative).
       (c) Requirement for Care Management.--
       (1) In general.--The State shall make available to each 
     category of individuals with disabilities care management 
     services that at a minimum include--
       (A) arrangements for the provision of such services; and
       (B) monitoring of the delivery of services.
       (2) Care management services.--
       (A) In general.--Except as provided in subparagraph (B), 
     the care management services described in paragraph (1) shall 
     be provided by a public or private entity that is not 
     providing home and community-based services under this 
     subtitle.
       (B) Exception.--A person who provides home and community-
     based services under this subtitle may provide care 
     management services if--
       (i) the State determines that there is an insufficient pool 
     of entities willing to provide such services in an area due 
     to a low population of individuals eligible for home and 
     community-based services under this subtitle residing in such 
     area; and
       (ii) the State plan specifies procedures that the State 
     will implement in order to avoid conflicts of interest.
       (d) Mandatory Coverage of Personal Assistance Services.--
     The State plan shall include, in the array of services made 
     available to each category of individuals with disabilities, 
     both agency-administered and consumer-directed personal 
     assistance services (as defined in subsection (h)).
       (e) Additional Services.--
       (1) Types of services.--Subject to subsection (f), services 
     available under a State plan under this subtitle may include 
     any (or all) of the following:
       (A) Homemaker and chore assistance.
       (B) Home modifications.
       (C) Respite services.
       (D) Assistive technology devices, as defined in section 
     3(2) of the Technology-Related Assistance for Individuals 
     With Disabilities Act of 1988 (29 U.S.C. 2202(2)).
       (E) Adult day services.
       (F) Habilitation and rehabilitation.
       (G) Supported employment.
       (H) Home health services.
       (I) Transportation.
       (J) Any other care or assistive services specified by the 
     State and approved by the Secretary that will help 
     individuals with disabilities to remain in their homes and 
     communities.
       (2) Criteria for selection of services.--The State electing 
     services under paragraph (1) shall specify in the State 
     plan--
       (A) the methods and standards used to select the types, and 
     the amount, duration, and scope, of services to be covered 
     under the plan and to be available to each category of 
     individuals with disabilities; and
       (B) how the types, and the amount, duration, and scope, of 
     services specified, within the limits of available funding, 
     provide substantial assistance in living independently to 
     individuals within each of the categories of individuals with 
     disabilities.
       (f) Exclusions and Limitations.--A State plan may not 
     provide for coverage of--
       (1) room and board;
       (2) services furnished in a hospital, nursing facility, 
     intermediate care facility for the mentally retarded, or 
     other institutional setting specified by the Secretary; or
       (3) items and services to the extent coverage is provided 
     for the individual under a health plan or the medicare 
     program.
       (g) Payment for Services.--In order to pay for covered 
     services, a State plan may provide for the use of--
       (1) vouchers;
       (2) cash payments directly to individuals with 
     disabilities;

[[Page S 16138]]

       (3) capitation payments to health plans; and
       (4) payment to providers.
       (h) Personal Assistance Services.--
       (1) In general.--For purposes of this subtitle, the term 
     ``personal assistance services'' means those services 
     specified under the State plan as personal assistance 
     services and shall include at least hands-on and standby 
     assistance, supervision, cueing with activities of daily 
     living, and such instrumental activities of daily living as 
     deemed necessary or appropriate, whether agency-administered 
     or consumer-directed (as defined in paragraph (2)). Such 
     services shall include services that are determined to be 
     necessary to help all categories of individuals with 
     disabilities, regardless of the age of such individuals or 
     the nature of the disabling conditions of such individuals.
       (2) Consumer-directed.--For purposes of this subtitle:
       (A) In general.--The term ``consumer-directed'' means, with 
     reference to personal assistance services or the provider of 
     such services, services that are provided by an individual 
     who is selected and managed (and, at the option of the 
     service recipient, trained) by the individual receiving the 
     services.
       (B) State responsibilities.--A State plan shall ensure that 
     where services are provided in a consumer-directed manner, 
     the State shall create or contract with an entity, other than 
     the consumer or the individual provider, to--
       (i) inform both recipients and providers of rights and 
     responsibilities under all applicable Federal labor and tax 
     law; and
       (ii) assume responsibility for providing effective billing, 
     payments for services, tax withholding, unemployment 
     insurance, and workers' compensation coverage, and act as the 
     employer of the home care provider.
       (C) Right of consumers.--Notwithstanding the State 
     responsibilities described in subparagraph (B), service 
     recipients, and, where appropriate, their designated 
     representative, shall retain the right to independently 
     select, hire, terminate, and direct (including manage, train, 
     schedule, and verify services provided) the work of a home 
     care provider.
       (3) Agency administered.--For purposes of this subtitle, 
     the term ``agency-administered'' means, with respect to such 
     services, services that are not consumer-directed.

     SEC. 7505. COST SHARING.

       (a) No Cost Sharing for Poorest.--
       (1) In general.--The State plan may not impose any cost 
     sharing for individuals with income (as determined under 
     subsection (d)) less than 150 percent of the official poverty 
     level applicable to a family of the size involved (referred 
     to in paragraph (2)).
       (2) Official poverty level.--For purposes of paragraph (1), 
     the term ``official poverty level applicable to a family of 
     the size involved'' means, for a family for a year, the 
     official poverty line (as defined by the Office of Management 
     and Budget, and revised annually in accordance with section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2) applicable to a family of the size involved.
       (b) Sliding Scale for Remainder.--
       (1) Required coinsurance.--The State plan shall impose cost 
     sharing in the form of coinsurance (based on the amount paid 
     under the State plan for a service)--
       (A) at a rate of 10 percent for individuals with 
     disabilities with income not less than 150 percent, and less 
     than 175 percent, of such official poverty line (as so 
     applied);
       (B) at a rate of 15 percent for such individuals with 
     income not less than 175 percent, and less than 225 percent, 
     of such official poverty line (as so applied);
       (C) at a rate of 25 percent for such individuals with 
     income not less than 225 percent, and less than 275 percent, 
     of such official poverty line (as so applied);
       (D) at a rate of 30 percent for such individuals with 
     income not less than 275 percent, and less than 325 percent, 
     of such official poverty line (as so applied);
       (E) at a rate of 35 percent for such individuals with 
     income not less than 325 percent, and less than 400 percent, 
     of such official poverty line (as so applied); and
       (F) at a rate of 40 percent for such individuals with 
     income equal to at least 400 percent of such official poverty 
     line (as so applied).
       (2) Required annual deductible.--The State plan shall 
     impose cost sharing in the form of an annual deductible--
       (A) of $100 for individuals with disabilities with income 
     not less than 150 percent, and less than 175 percent, of such 
     official poverty line (as so applied);
       (B) of $200 for such individuals with income not less than 
     175 percent, and less than 225 percent, of such official 
     poverty line (as so applied);
       (C) of $300 for such individuals with income not less than 
     225 percent, and less than 275 percent, of such official 
     poverty line (as so applied);
       (D) of $400 for such individuals with income not less than 
     275 percent, and less than 325 percent, of such official 
     poverty line (as so applied);
       (E) of $500 for such individuals with income not less than 
     325 percent, and less than 400 percent, of such official 
     poverty line (as so applied); and
       (F) of $600 for such individuals with income equal to at 
     least 400 percent of such official poverty line (as so 
     applied).
       (c) Recommendation of the Secretary.--The Secretary shall 
     make recommendations to the States as to how to reduce cost-
     sharing for individuals with extraordinary out-of-pocket 
     costs for whom the cost-sharing provisions of this section 
     could jeopardize their ability to take advantage of the 
     services offered under this subtitle. The Secretary shall 
     establish a methodology for reducing the cost-sharing burden 
     for individuals with exceptionally high out-of-pocket costs 
     under this subtitle.
       (d) Determination of Income for Purposes of Cost Sharing.--
     The State plan shall specify the process to be used to 
     determine the income of an individual with disabilities for 
     purposes of this section. Such standards shall include a 
     uniform Federal definition of income and any allowable 
     deductions from income.

     SEC. 7506. QUALITY ASSURANCE AND SAFEGUARDS.

       (a) Quality Assurance.--
       (1) In general.--The State plan shall specify how the State 
     will ensure and monitor the quality of services, including--
       (A) safeguarding the health and safety of individuals with 
     disabilities;
       (B) setting the minimum standards for agency providers and 
     how such standards will be enforced;
       (C) setting the minimum competency requirements for agency 
     provider employees who provide direct services under this 
     subtitle and how the competency of such employees will be 
     enforced;
       (D) obtaining meaningful consumer input, including consumer 
     surveys that measure the extent to which participants receive 
     the services described in the plan of care and participant 
     satisfaction with such services;
       (E) establishing a process to receive, investigate, and 
     resolve allegations of neglect or abuse;
       (F) establishing optional training programs for individuals 
     with disabilities in the use and direction of consumer 
     directed providers of personal assistance services;
       (G) establishing an appeals procedure for eligibility 
     denials and a grievance procedure for disagreements with the 
     terms of an individualized plan of care;
       (H) providing for participation in quality assurance 
     activities; and
       (I) specifying the role of the Long-Term Care Ombudsman 
     (under the Older Americans Act of 1965 (42 U.S.C. 3001 et 
     seq.)) and the protection and advocacy system (established 
     under section 142 of the Developmental Disabilities 
     Assistance and Bill of Rights Act (42 U.S.C. 6042) in 
     assuring quality of services and protecting the rights of 
     individuals with disabilities.
       (2) Issuance of regulations.--Not later than 1 year after 
     the date of enactment of this Act, the Secretary shall issue 
     regulations implementing the quality provisions of this 
     subsection.
       (b) Federal Standards.--The State plan shall adhere to 
     Federal quality standards in the following areas:
       (1) Case review of a specified sample of client records.
       (2) The mandatory reporting of abuse, neglect, or 
     exploitation.
       (3) The development of a registry of provider agencies or 
     home care workers and consumer directed providers of personal 
     assistance services against whom any complaints have been 
     sustained, which shall be available to the public.
       (4) Sanctions to be imposed on State or providers, 
     including disqualification from the program, if minimum 
     standards are not met.
       (5) Surveys of client satisfaction.
       (6) State optional training program for informal 
     caregivers.
       (c) Client Advocacy.--
       (1) In general.--The State plan shall provide that the 
     State will expend the amount allocated under section 
     7509(b)(2) for client advocacy activities. The State may use 
     such funds to augment the budgets of the Long-Term Care 
     Ombudsman (under the Older Americans Act of 1965 (42 U.S.C. 
     3001 et seq.) and the protection and advocacy system 
     (established under section 142 of the Developmental 
     Disabilities Assistance and Bill of Rights Act (42 U.S.C. 
     6042)) or may establish a separate and independent client 
     advocacy office in accordance with paragraph (2) to 
     administer a new program designed to advocate for client 
     rights.
       (2) Client advocacy office.--
       (A) In general.--A client advocacy office established under 
     this paragraph shall--
       (i) identify, investigate, and resolve complaints that--
       (I) are made by, or on behalf of, clients; and
       (II) relate to action, inaction, or decisions, that may 
     adversely affect the health, safety, welfare, or rights of 
     the clients (including the welfare and rights of the clients 
     with respect to the appointment and activities of guardians 
     and representative payees), of--
       (aa) providers, or representatives of providers, of long-
     term care services;
       (bb) public agencies; or
       (cc) health and social service agencies;
       (ii) provide services to assist the clients in protecting 
     the health, safety, welfare, and rights of the clients;
       (iii) inform the clients about means of obtaining services 
     provided by providers or agencies described in clause (i)(II) 
     or services described in clause (ii);
       (iv) ensure that the clients have regular and timely access 
     to the services provided through the office and that the 
     clients and complainants receive timely responses from 
     representatives of the office to complaints; and 

[[Page S 16139]]

       (v) represent the interests of the clients before 
     governmental agencies and seek administrative legal, and 
     other remedies to protect the health, safety, welfare, and 
     rights of the clients with regard to the provisions of this 
     subtitle.
       (B) Contracts and arrangements.--
       (i) In general.--Except as provided in clause (ii), the 
     State agency may establish and operate the office, and carry 
     out the program, directly, or by contract or other 
     arrangement with any public agency or nonprofit private 
     organization.
       (ii) Licensing and certification organizations; 
     associations.--The State agency may not enter into the 
     contract or other arrangement described in clause (i) with an 
     agency or organization that is responsible for licensing 
     certifying, or providing long-term care services in the 
     State.
       (d) Safeguards.--
       (1) Confidentiality.--The State plan shall provide 
     safeguards that restrict the use or disclosure of information 
     concerning applications and beneficiaries to purposes 
     directly connected with the administration of the plan.
       (2) Safeguards against abuse.--The State plans shall 
     provide safeguards against physical, emotional, or financial 
     abuse or exploitation (specifically including appropriate 
     safeguards in cases where payment for program benefits in 
     made by cash payments or vouchers given directly to 
     individuals with disabilities). All providers of services 
     shall be required to register with the State agency.
       (3) Regulations.--Not later than January 1, 1997, the 
     Secretary shall promulgate regulations with respect to the 
     requirements on States under this subsection.
       (e) Specified Rights.--The State plan shall provide that in 
     furnishing home and community-based services under the plan 
     the following individual rights are protected:
       (1) The right to be fully informed in advance, orally and 
     in writing, of the care to be provided, to be fully informed 
     in advance of any changes in care to be provided, and (except 
     with respect to an individual determined incompetent) to 
     participate in planning care or changes in care.
       (2) The right to--
       (A) voice grievances with respect to services that are (or 
     fail to be) furnished without discrimination or reprisal for 
     voicing grievances;
       (B) be told how to complain to State and local authorities; 
     and
       (C) prompt resolution of any grievances or complaints.
       (3) The right to confidentiality of personal and clinical 
     records and the right to have access to such records.
       (4) The right to privacy and to have one's property treated 
     with respect.
       (5) The right to refuse all or part of any care and to be 
     informed of the likely consequences of such refusal.
       (6) The right to education or training for oneself and for 
     members of one's family or household on the management of 
     care.
       (7) The right to be free from physical or mental abuse, 
     corporal punishment, and any physical or chemical restraints 
     imposed for purposes of discipline or convenience and not 
     included in an individual's plan of care.
       (8) The right to be fully informed orally and in writing of 
     the individual's rights.
       (9) The right to a free choice of providers.
       (10) The right to direct provider activities when an 
     individual is competent and willing to direct such 
     activities.

     SEC. 7507. ADVISORY GROUPS.

       (a) Federal Advisory Group.--
       (1) Establishment.--The Secretary shall establish an 
     advisory group, to advise the Secretary and States on all 
     aspects of the program under this subtitle.
       (2) Composition.--The group shall be composed of 
     individuals with disabilities and their representatives, 
     providers, Federal and State officials, and local community 
     implementing agencies. A majority of its members shall be 
     individuals with disabilities and their representatives.
       (b) State Advisory Groups.--
       (1) In general.--Each State plan shall provide for the 
     establishment and maintenance of an advisory group to advise 
     the State on all aspects of the State plan under this 
     subtitle.
       (2) Composition.--Members of each advisory group shall be 
     appointed by the Governor (or other chief executive officer 
     of the State) and shall include individuals with disabilities 
     and their representatives, providers, State officials, and 
     local community implementing agencies. A majority of its 
     members shall be individuals with disabilities and their 
     representatives. The members of the advisory group shall be 
     selected from those nominated as described in paragraph (3).
       (3) Selection of members.--Each State shall establish a 
     process whereby all residents of the State, including 
     individuals with disabilities and their representatives, 
     shall be given the opportunity to nominate members to the 
     advisory group.
       (4) Particular concerns.--Each advisory group shall--
       (A) before the State plan is developed, advise the State on 
     guiding principles and values, policy directions, and 
     specific components of the plan;
       (B) meet regularly with State officials involved in 
     developing the plan, during the development phase, to review 
     and comment on all aspects of the plan;
       (C) participate in the public hearings to help assure that 
     public comments are addressed to the extent practicable;
       (D) report to the Governor and make available to the public 
     any differences between the group's recommendations and the 
     plan;
       (E) report to the Governor and make available to the public 
     specifically the degree to which the plan is consumer-
     directed; and
       (F) meet regularly with officials of the designated State 
     agency (or agencies) to provide advice on all aspects of 
     implementation and evaluation of the plan.

     SEC. 7508. PAYMENTS TO STATES.

       (a) In General.--Subject to section 7502(a)(9)(C) (relating 
     to limitation on payment for administrative costs), the 
     Secretary, in accordance with the Cash Management Improvement 
     Act, shall authorize payment to each State with a plan 
     approved under this subtitle, for each quarter (beginning on 
     or after January 1, 1997), from its allotment under section 
     7509(b), an amount equal to--
       (1)(A) with respect to the amount demonstrated by State 
     claims to have been expended during the year for home and 
     community-based services under the plan for individuals with 
     disabilities that does not exceed 20 percent of the amount 
     allotted to the State under section 7509(b), 100 percent of 
     such amount; and
       (B) with respect to the amount demonstrated by State claims 
     to have been expended during the year for home and community-
     based services under the plan for individuals with 
     disabilities that exceeds 20 percent of the amount allotted 
     to the State under section 7509(b), the Federal home and 
     community-based services matching percentage (as defined in 
     subsection (b)) of such amount; plus
       (2) an amount equal to 90 percent of the amount 
     demonstrated by the State to have been expended during the 
     quarter for quality assurance activities under the plan; plus
       (3) an amount equal to 90 percent of amount expended during 
     the quarter under the plan for activities (including 
     preliminary screening) relating to determination of 
     eligibility and performance of needs assessment; plus
       (4) an amount equal to 90 percent (or, beginning with 
     quarters in fiscal year 2005, 75 percent) of the amount 
     expended during the quarter for the design, development, and 
     installation of mechanical claims processing systems and for 
     information retrieval; plus
       (5) an amount equal to 50 percent of the remainder of the 
     amounts expended during the quarter as found necessary by the 
     Secretary for the proper and efficient administration of the 
     State plan.
       (b) Federal Home and Community-Based Services Matching 
     Percentage.--In subsection (a), the term ``Federal home and 
     community-based services matching percentage'' means, with 
     respect to a State, the State's Federal medical assistance 
     percentage (as defined in section 2122(c) of the Social 
     Security Act) increased by 15 percentage points, except that 
     the Federal home and commuity-based services matching 
     percentage shall in no case be more than 95 percent.
       (c) Payments on Estimates With Retrospective Adjustments.--
     The method of computing and making payments under this 
     section shall be as follows:
       (1) The Secretary shall, prior to the beginning of each 
     quarter, estimate the amount to be paid to the State under 
     subsection (a) for such quarter, based on a report filed by 
     the State containing its estimate of the total sum to be 
     expended in such quarter, and such other information as the 
     Secretary may find necessary.
       (2) From the allotment available therefore, the Secretary 
     shall provide for payment of the amount so estimated, reduced 
     or increased, as the case may be, by any sum (not previously 
     adjusted under this section) by which the Secretary finds 
     that the estimate of the amount to be paid the State for any 
     prior period under this section was greater or less than the 
     amount that should have been paid.
       (d) Application of Rules Regarding Limitations on Provider-
     Related Donations and Health Care-Related Taxes.--The 
     provisions of section 2122(d) of the Social Security Act 
     shall apply to payments to States under this section in the 
     same manner as they apply to payments to States under section 
     2122(a) of such Act.
       (e) Failure To Comply With State Plan.--If a State 
     furnishing home and community-based services under this 
     subtitle fails to comply with the State plan approved under 
     this subtitle, the Secretary may either reduce the Federal 
     matching rates available to the State under subsection (a) or 
     withhold an amount of funds determined appropriate by the 
     Secretary from any payment to the State under this section.

     SEC. 7509. APPROPRIATIONS; ALLOTMENTS TO STATES.

       (a) Appropriations.--
       (1) Fiscal years 1997 through 2005.--Subject to paragraph 
     (5)(C), for purposes of this subtitle, the appropriation 
     authorized under this subtitle for each of fiscal years 1997 
     through 2005 is the following:
       (A) For fiscal year 1997, $800,000,000.
       (B) For fiscal year 1998, $1,600,000,000.
       (C) For fiscal year 1999, $2,600,000,000.
       (D) For fiscal year 2000 $3,700,000,000.
       (E) For fiscal year 2001, $5,000,000,000.
       (F) For fiscal year 2002, $6,500,000,000.
       (G) For fiscal year 2003, $8,200,000,000.
       (H) For fiscal year 2004, $10,100,000,000.
       (I) For fiscal year 2005, $12,100,000.
       (2) Subsequent fiscal years.--For purposes of this 
     subtitle, the appropriation authorized for State plans under 
     this subtitle 

[[Page S 16140]]
     for each fiscal year after fiscal year 2005 is the appropriation 
     authorized under this subsection for the preceding fiscal 
     year multiplied by--
       (A) a factor (described in paragraph (3)) reflecting the 
     change in the consumer price index for the fiscal year; and
       (B) a factor (described in paragraph (4)) reflecting the 
     change in the number of individuals with disabilities for the 
     fiscal year.
       (3) CPI increase factor.--For purposes of paragraph (2)(A), 
     the factor described in this paragraph for a fiscal year is 
     the ratio of--
       (A) the annual average index of the consumer price index 
     for the preceding fiscal year to--
       (B) such index, as so measured, for the second preceding 
     fiscal year.
       (4) Disabled population factor.--For purposes of paragraph 
     (2)(B), the factor described in this paragraph for a fiscal 
     year is 100 percent plus (or minus) the percentage increase 
     (or decrease) change in the disabled population of the United 
     States (as determined for purposes of the most recent update 
     under subsection (b)(3)(D)).
       (5) Additional funds due to medicaid offsets.--
       (A) In general.--Each participating State must provide the 
     Secretary with information concerning offsets and reductions 
     in the medicaid program resulting from home and community-
     based services provided disabled individuals under this 
     subtitle, that would have been paid for such individuals 
     under the State medicaid plan. At the time a State first 
     submits its plan under this subtitle and before each 
     subsequent fiscal year (through fiscal year 2005), the State 
     also must provide the Secretary with such budgetary 
     information (for each fiscal year through fiscal year 2005), 
     as the Secretary determines to be necessary to carry out this 
     paragraph.
       (B) Reports.--Each State with a program under this subtitle 
     shall submit such reports to the Secretary as the Secretary 
     may require in order to monitor compliance with subparagraph 
     (A). The Secretary shall specify the format of such reports 
     and establish uniform data reporting elements.
       (C) Adjustments to appropriation.--
       (i) In general.--For each fiscal year (beginning with 
     fiscal year 1997 and ending with fiscal year 2005) and based 
     on a review of information submitted under subparagraph (A), 
     the Secretary shall determine the amount by which the 
     appropriation authorized under subsection (a) will increase. 
     The amount of such increase for a fiscal year shall be 
     limited to the reduction in Federal expenditures of medical 
     assistance (as determined by Secretary) that would have been 
     made under title XXI of the Social Security Act but for the 
     provision of home and community-based services under the 
     program under this subtitle.
       (ii) Annual publication.--The Secretary shall publish 
     before the beginning of such fiscal year, the revised 
     appropriation authorized under this subsection for such 
     fiscal year.
       (D) Construction.--Nothing in this subsection shall be 
     construed as requiring States to determine eligibility for 
     medical assistance under the State medicaid plan on behalf of 
     individuals receiving assistance under this subtitle.
       (b) Allotments to States.--
       (1) In general.--The Secretary shall allot the amounts 
     available under the appropriation authorized for the fiscal 
     year under paragraph (1) of subsection (a) (without regard to 
     any adjustment to such amount under paragraph (5) of such 
     subsection), to the States with plans approved under this 
     subtitle in accordance with an allocation formula developed 
     by the Secretary that takes into account--
       (A) the percentage of the total number of individuals with 
     disabilities in all States that reside in particular State;
       (B) the per capita costs of furnishing home and community-
     based services to individuals with disabilities in the State; 
     and
       (C) the percentage of all individuals with incomes at or 
     below 150 percent of the official poverty line (as described 
     in section 7505(a)(2)) in all States that reside in a 
     particular State.
       (2) Allocation for client advocacy activities.--Each State 
     with a plan approved under this subtitle shall allocate one-
     half of one percent of the State's total allotment under 
     paragraph (1) for client advocacy activities as described in 
     section 7506(c).
       (3) No duplicate payment.--No payment may be made to a 
     State under this section for any services provided to an 
     individual to the extent that the State received payment for 
     such services under section 2122(a) of the Social Security 
     Act.
       (4) Reallocations.--Any amounts allotted to States under 
     this subsection for a year that are not expended in such year 
     shall remain available for State programs under this subtitle 
     and may be reallocated to States as the Secretary determines 
     appropriate.
       (5) Savings due to medicaid offsets.--
       (A) In general.--Except as provided in subparagraph (B), 
     from the total amount of the increase in the amount available 
     for a fiscal year under paragraph (1) of subsection (a) 
     resulting from the application of paragraph (5) of such 
     subsection, the Secretary shall allot to each State with a 
     plan approved under this subtitle, an amount equal to the 
     Federal offsets and reductions in the State's medicaid plan 
     for such fiscal year that was reported to the Secretary under 
     subsection (a)(5), reduced or increased, as the case may be, 
     by any amount by which the Secretary determines that any 
     estimated Federal offsets and reductions in such State's 
     medicaid plan reported to the Secretary under subsection 
     (a)(5) for the previous fiscal year were greater or less than 
     the actual Federal offsets and reductions in such State's 
     medicaid plan.
       (B) Cap on state savings allotment.--In no case shall the 
     allotment made under this paragraph to any State for a fiscal 
     year exceed the product of--
       (i) the Federal medical assistance percentage for such 
     State (as defined under section 2122(c) of the Social 
     Security Act); multiplied by
       (ii)(I) for fiscal year 1997, the base medical assistance 
     amount for the State (as determined under subparagraph (C)) 
     updated through the midpoint of fiscal year 1997 by the 
     estimated percentage change in the index described in section 
     7502(a)(1)(B)(iii) during the period beginning on October 1, 
     1995, and ending at that midpoint; and
  (II) for succeeding fiscal years, an amount equal to the amount 
determined under this clause for the previous fiscal year updated 
through the midpoint of the year by the estimated percentage change in 
such index during the 12-month period ending at that midpoint, with 
appropriate adjustments to reflect previous underestimations or 
overestimations under this clause in the projected percentage change in 
such index.
       (C) Base medical assistance amount.--The base medical 
     assistance amount for a State is an amount equal to the total 
     expenditures from Federal and State funds made under the 
     State plan under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) during fiscal year 1995 with respect to 
     medical assistance consisting of the services described in 
     section 7502(a)(1)(C).
       (c) State Entitlement.--This subtitle constitutes budget 
     authority in advance of appropriations Acts, and represents 
     the obligation of the Federal Government to provide for the 
     payment to States of amounts described in subsection (a).

     SEC. 7510. REPEALS.

       Section 12111 and chapter 1 of subtitle C of title XII of 
     this Act are hereby repealed.
       Sec.   . It is the sense of the Senate that the Congress 
     shall define a basic health benefit package for pregnant 
     women, all children up to age 12 years, and individuals with 
     disabilities living under 100% of federal poverty in order to 
     ensure that these groups are entitled to a federal guarantee 
     of health care services for a meaningful set of benefits.
                                 ______


                 HARKIN (AND OTHERS) AMENDMENT NO. 3020

  Mr. HARKIN (for himself, Mr. Dorgan, Mr. Wellstone, Mr. Daschle, Mr. 
Heflin, and Mr. Bumpers) proposed an amendment to the bill S. 1357, 
supra, as follows:

       (a) In Title I strike Subtitles A, B, and C and insert the 
     following:
       TITLE I--COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

     SECTION 1001. SHORT TITLE.

       This title may be cited as the ``Farm Security Act of 
     1995''.
                     Subtitle A--Commodity Programs

     SEC. 1101. WHEAT, FEED GRAIN, AND OILSEED PROGRAM.

       (a) In General.--Title I of the Agricultural Act of 1949 (7 
     U.S.C. 1441 et seq.) is amended by adding the end the 
     following:

     ``SEC. 116. MARKETING LOANS AND LOAN DEFICIENCY PAYMENTS FOR 
                   1996 THROUGH 2002 CROPS OF WHEAT, FEED GRAINS, 
                   AND OILSEEDS.

       ``(a) Definitions.--In this section:
       ``(1) Covered commodities.--The term `covered commodities' 
     means wheat, feed grains, and oilseeds.
       ``(2) Feed grains.--The term `feed grains' means corn, 
     grain sorghum, barley, oats, millet, rye, or as designated by 
     the Secretary, other feed grains.
       ``(3) Oilseeds.--The term `oilseeds' means soybeans, 
     sunflower seed, rapeseed, canola, safflower, flaxseed, 
     mustard seed, or as designated by the Secretary, other 
     oilseeds.
       ``(b) Adjustment Account.--
       ``(1) Definition of payment bushel of production.--In this 
     subsection, the term `payment bushel of production' means--
       ``(A) in the case of wheat, \7/10\ of a bushel;
       ``(B) in the case of corn, a bushel; and
       ``(C) in the case of other feed grains, a quantity 
     determined by the Secretary.
       ``(2) Establishment.--The Secretary shall establish an 
     Adjustment Account (referred to in this subsection as the 
     `Account') for making--
       ``(A) payments to producers of the 1996 through 2002 crops 
     of covered commodities who participate in the marketing loan 
     program established under subsection (c); and
       ``(B) payments to producers of the 1994 and 1995 crops of 
     covered commodities that are authorized, but not paid, under 
     sections 105B and 107B prior to the date of enactment of this 
     section.
       ``(3) Amount in account.--The Secretary shall transfer from 
     funds of the Commodity Credit Corporation into the Account--
       ``(A) $4,500,000,000 for fiscal year 1996; and
       ``(B) $2,800,000,000 for each of fiscal years 1997 through 
     2002;
     to remain available until expended.
       ``(4) Payments.--The Secretary shall use funds in the 
     Account to make payments to producers of wheat and feed 
     grains in accordance with this subsection.

[[Page S 16141]]

       ``(5) Tier 1 support.--
       ``(A) In general.--The producers on a farm referred to in 
     paragraph (2) shall be entitled to a payment computed by 
     multiplying--
       ``(i) the payment quantity determined under subparagraph 
     (B); by
       ``(ii) the payment factor determined under subparagraph 
     (C).
       ``(B) Payment quantity.--
       ``(i) In general.--Subject to clause (ii), the payment 
     quantity for payments under subparagraph (A) shall be 
     determined by the Secretary based on--

       ``(I) 90 percent of the 5-year average of the quantity of 
     wheat and feed grains produced on the farm;
       ``(II) an adjustment to reflect any disaster or other 
     circumstance beyond the control of the producers that 
     adversely affected production of wheat or feed grains, as 
     determined by the Secretary; and
       ``(III) an adjustment for planting resource conservation 
     crops on the crop acreage base for covered commodities, and 
     adopting conserving uses, on the base not enrolled in the 
     environmental reserve program provided in paragraph (6).

       ``(ii) Limitations.--The quantity determined under clause 
     (i) for an individual, directly or indirectly, shall not 
     exceed 22,000 payment bushels of wheat or feed grains and may 
     be adjusted by the Secretary to reflect the availability of 
     funds.
       ``(C) Payment factor.--
       ``(i) Wheat.--The payment factor for wheat under 
     subparagraph (A) shall be equal to the difference between a 
     price established by the Secretary, of not to exceed $4.00 
     per bushel, and the greater of--

       ``(I) the marketing loan rate for the crop of wheat; or
       ``(II) the average domestic price for wheat for the crop 
     for the calendar year in which the crop is normally 
     harvested.

       ``(ii) Corn.--The payment factor for corn under 
     subparagraph (A) shall be equal to the difference between a 
     price established by the Secretary, of not to exceed $2.75 
     per bushel, and the greater of--

       ``(I) the marketing loan rate for the crop of corn; or
       ``(II) the average domestic price for corn for the crop for 
     the calendar year in which the crop is normally harvested;

       ``(iii) Other feed grains.--The payment factor for other 
     feed grains under subparagraph (A) shall be established by 
     the Secretary at such level as the Secretary determines is 
     fair and reasonable in relation to the payment factor for 
     corn.
       ``(D) Advance payment.--The Secretary shall make available 
     to producers on a farm 50 percent of the projected payment 
     under this subsection at the time the producers agree to 
     participate in the program.
       ``(6) Environmental reserve program.--
       ``(A) In general.--The Secretary may enter into 1 to 5 year 
     contracts with producers on a farm referred to in paragraph 
     (2) for the purposes of enrolling flexible acreage base for 
     conserving use purposes.
       ``(B) Limitation.--Flexible acreage base enrolled in the 
     environmental reserve program shall not be eligible for 
     benefits provided in paragraph (5)(B).
       ``(c) Marketing Loans.--
       ``(1) In general.--The Secretary shall make available to 
     producers on a farm marketing loans for each of the 1996 
     through 2002 crops of covered commodities produced on the 
     farm.
       ``(2) Eligibility.--
       ``(A) In general.--To be eligible for a loan under this 
     subsection, the producers on a farm may not plant covered 
     commodities on the farm in excess of the flexible acreage 
     base of the farm determined under section 502.
       ``(B) Amount.--The Secretary shall provide marketing loans 
     for their normal production of covered commodities produced 
     on a farm.
       ``(3) Loan rate.--Loans made under this subsection shall be 
     made at the rate of 95 percent of the average price for the 
     commodity for the previous 5 crop years, as determined by the 
     Secretary.
       ``(4) Repayment.--
       ``(A) Calculation.--Producers on a farm may repay loans 
     made under this subsection for a crop at a level that is the 
     lesser of--
       ``(i) the loan level determined for the crop; or
       ``(ii) the prevailing domestic market price for the 
     commodity (adjusted to location and quality), as determined 
     by the Secretary.
       ``(B) Prevailing domestic market price.--The Secretary 
     shall prescribe by regulation--
       ``(i) a formula to determine the prevailing domestic market 
     price for each covered commodity; and
       ``(ii) a mechanism by which the Secretary shall announce 
     periodically the prevailing domestic market prices 
     established under this subsection.
       ``(d) Loan Deficiency Payments.--
       ``(1) In general.--The Secretary may, for each of the 1996 
     through 2002 crops of covered commodities, make payments 
     (referred to in this subsection as `loan deficiency 
     payments') available to producers who, although eligible to 
     obtain a marketing loan under subsection (c), agree to forgo 
     obtaining the loan in return for payments under this 
     subsection.
       ``(2) Computation.--A payment under this subsection shall 
     be computed by multiplying--
       ``(A) the loan payment rate; by
       ``(B) the quantity of a covered commodity the producer is 
     eligible to place under loan but for which the producer 
     forgoes obtaining the loan in return for payments under this 
     subsection.
       ``(3) Loan payment rate.--
       ``(A) In general.--For the purposes of this subsection, the 
     loan payment rate shall be the amount by which--
       ``(i) the marketing loan rate determined for the crop under 
     subsection (c)(3); exceeds
       ``(ii) the level at which a loan may be repaid under 
     subsection (c)(4).
       ``(B) Date.--The date on which the calculation required 
     under subparagraph (A) for the producers on a farm shall be 
     determined by the producers, except that the date may not be 
     later than the earlier of--
       ``(i) the date the producers lost beneficial interest in 
     the crop; or
       ``(ii) the end of the marketing year for the crop.
       ``(4) Application.--Producers on a farm may apply for a 
     payment for a covered commodity under this subsection at any 
     time prior to the end of the marketing year for the 
     commodity.
       ``(e) Program Cost Limitation.--
       ``(1) In general.--If the Secretary determines that the 
     costs of providing marketing loans and loan deficiency 
     payments for covered commodities under this section will 
     exceed an amount of $9,000,000,000 for the 1996 through 2002 
     fiscal years, the Secretary shall carry out a program cost 
     limitation program to ensure that the cost of providing 
     marketing loans and loan deficiency payments do not exceed 
     the amount.
       ``(2) Terms.--If the Secretary determines that a program 
     cost limitation program is required for a crop year, the 
     Secretary shall carry out for the crop year--
       ``(A) a proportionate reduction in the number of bushels 
     that a producer may directly or indirectly place under loan;
       ``(B) a limitation on the number of bushels the producers 
     on a farm may directly or indirectly place under loan;
       ``(C) an acreage limitation program; or
       ``(D) any combination of actions described in subparagraphs 
     (A), (B), and (C).
       ``(3) Limitation.--The program cost limitation program may 
     only be applied to a crop of a covered commodity for which 
     the domestic price is projected, by the Secretary, to be less 
     than the 5-year average price for the commodity.
       ``(4) Announcements.--If the Secretary elects to implement 
     a program cost limitation program for any crop year, the 
     Secretary shall make an announcement of the program not later 
     than--
       ``(A) in the case of wheat, June 1 of the calendar year 
     preceding the year in which the crop is harvested; and
       ``(B) in the case of feed grains and oilseeds, September 30 
     of the calendar year preceding the year in which the crop is 
     harvested, and
       ``(f) Equitable Relief.--If the failure of a producer to 
     comply fully with the terms and conditions of programs 
     conducted under this section precludes the making of loans 
     and payments, the Secretary may, nevertheless, make the loans 
     and payments in such amounts as the Secretary determines are 
     equitable in relation to the seriousness of the failure.
       ``(g) Commodity Credit Corporation.--The Secretary shall 
     carry out the program authorized by this section through the 
     Commodity Credit Corporation.
       ``(h) Assignment of Payments.--The provisions of section 
     8(g) of the Soil Conservation and Domestic Allotment Act (16 
     U.S.C. 590h(g)) (relating to assignment of payments) shall 
     apply to payments under this section.
       ``(i) Tenants and Sharecroppers.--In carrying out this 
     section, the Secretary shall provide adequate safeguards to 
     protect the interest of tenants and sharecroppers.
       ``(j) Crops.--This section shall be effective only for the 
     1996 through 2002 crops of a covered commodity.''.
       (b) Flexible Acreage Base.--
       (1) Definitions.--Section 502 of the Agricultural Act of 
     1949 (7 U.S.C. 1462) is amended by striking paragraphs (2) 
     and (3) and inserting the following:
       ``(2) Feed grains.--The term `feed grains' means corn, 
     grain sorghum, barley, oats, millet, rye, or as designated by 
     the Secretary, other feed grains.
       ``(3) Go crops.--The term `GO crops' means wheat, feed 
     grains, and oilseeds.
       ``(4) Oilseeds.--The term `oilseed' means a crop of 
     soybeans, sunflower seed, rapeseed, canola, safflower, 
     flaxseed, mustard seed, or, if designated by the Secretary, 
     other oilseeds.
       ``(5) Program crop.--The term `program crop' means a GO 
     crop and a crop of upland cotton or rice.''.
       (2) Crop acreage bases.--Section 503(a) of the Act (7 
     U.S.C. 1463(a)) is amended by striking paragraph (1) and 
     inserting the following:
       ``(1) In general.--
       ``(A) Go crops.--The Secretary shall provide for the 
     establishment and maintenance of a single crop acreage base 
     for GO crops, including any GO crops produced under an 
     established practice of double cropping.
       ``(B) Cotton and rice.--The Secretary shall provide for the 
     establishment and maintenance of crop acreage bases for 
     cotton and rice crops, including any program crop produced 
     under an established practice of double cropping.''.

     SEC. 1102. UPLAND COTTON PROGRAM.

       (a) Extension.--Section 103B of the Agricultural Act of 
     1949 (7 U.S.C. 1444-2) is amended--

[[Page S 16142]]

       (1) in the section heading, by striking ``1997'' and 
     inserting ``2002'';
       (2) in subsections (a)(1), (b)(1), (c)(1), and (o), by 
     striking ``1997'' each place it appears and inserting 
     ``2002'';
       (3) in subsection (a)(5), by striking ``1998'' each place 
     it appears and inserting ``2002'';
       (4) in the heading of subsection (c)(1)(D)(v)(II), by 
     striking ``1997'' and inserting ``2002'';
       (5) in subsection (e)(1)(D), by striking ``the 1997 crop'' 
     and inserting ``each of the 1997 through 2002 crops''; and
       (6) in subsections (e)(3)(A) and (f)(1), by striking 
     ``1995'' each place it appears and inserting ``2002''.
       (b) Increase in Nonpayment Acres.--Section 103B(c)(1)(C) of 
     the Act is amended by striking ``85 percent'' and inserting 
     ``77.5 percent for each of the 1996 through 2002 crops''.

     SEC. 1103. RICE PROGRAM.

       (a) Extension.--Section 101B of the Agricultural Act of 
     1949 (7 U.S.C. 1441-2) is amended--
       (1) in the section heading, by striking ``1995'' and 
     inserting ``2002'';
       (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 ``2002'';
       (3) in subsection (a)(5)(D)(i), by striking ``1996'' and 
     inserting ``2003''; and
       (4) in subsection (c)(1)--
       (A) in subparagraph (B)(ii)--
       (i) by striking ``and 1995'' and inserting ``through 
     2002''; and
       (ii) by striking ``and 1995'' and inserting ``through 
     2002''; and
       (B) in subparagraph (D)--
       (i) in clauses (i) and (v)(II), by striking ``1997'' each 
     place it appears and inserting ``2002''; and
       (ii) in the heading of clause (v)(II), by striking ``1997'' 
     and inserting ``2002''.
       (b) Increase in Nonpayment Acres.--Section 
     101B(c)(1)(C)(ii) of the Act is amended by striking ``85 
     percent'' and inserting ``77.5 percent for each of the 1998 
     through 2002 crops''.

     SEC. 1104. PEANUT PROGRAM.

       (a) Extension.--
       (1) Agricultural act of 1949.--Section 108B of the 
     Agricultural Act of 1949 (7 U.S.C. 1445c-3) is amended--
       (A) in the section heading, by striking ``1997'' and 
     inserting ``2002'';
       (B) in subsection (a)(1), (b)(1), and (h), by striking 
     ``1997'' each place it appears and inserting ``2002''; and
       (C) in subsection (g)--
       (i) by striking ``1997'' in paragraphs (1) and 
     (2)(A)(ii)(II) and inserting ``2002''; and
       (ii) by striking ``the 1997 crop'' each place it appears 
     and inserting ``each of the 1997 through 2002 crops''.
       (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 ``1997'' and 
     inserting ``2002''; and
       (ii) in subsections (a)(1), (b), and (f), by striking 
     ``1997'' each place it appears and inserting ``2002'';
       (B) in section 358b (7 U.S.C. 1358b)--
       (i) in the section heading, by striking ``1995'' and 
     inserting ``2002''; and
       (ii) in subsection (c), by striking ``1995'' and inserting 
     ``2002'';
       (C) in section 358c(d) (7 U.S.C. 1358c(d)), by striking 
     ``1995'' and inserting ``2002''; and
       (D) in section 358e (7 U.S.C. 1359a)--
       (i) in the section heading, by striking ``1997'' and 
     inserting ``2002''; and
       (ii) in subsection (i), by striking ``1997'' and inserting 
     ``2002''.
       (b) Support Rates for Peanuts.--Section 108B(a)(2) of the 
     Agricultural Act of 1949 (7 U.S.C. 1445c-3(a)(2)) is 
     amended--
       (1) by striking ``(2) Support rates.--The'' and inserting 
     the following:
       ``(2) Support rates.--
       ``(A) 1991-1995 crops.--The''; and
       (2) by adding at the end the following:
       ``(B) 1996-2002 crops.--The national average quota support 
     rate for each of the 1996 through 2002 crops of quota peanuts 
     shall be $678 per ton.''.
       (c) Undermarketings.--
       (1) In general.--Section 358-1(b) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1358-1(b)) is amended--
       (A) in paragraph (7), by adding at the end the following::
       ``(C) Transfer of additional peanuts.--Additional peanuts 
     on a farm from which the quota poundage was not harvested or 
     marketed may be transferred to the quota loan pool for 
     pricing purposes at the quota price on such basis as the 
     Secretary shall be regulation provide, except that the 
     poundage of the peanuts so transferred shall not exceed the 
     difference in the total quantity of peanuts meeting quality 
     requirements for domestic edible use, as determined by the 
     Secretary, marketed from the farm and the total farm poundage 
     quota.''; and
       (B) by striking paragraphs (8) and (9).
       (2) Conforming amendments.--Section 358b(a) of the Act (7 
     U.S.C. 1358b(a)) is amended--
       (A) in paragraph (1)(A), by striking ``undermarketings 
     and''; and
       (B) in paragraph (3), by striking ``(including any 
     applicable undermarketings)''.

     SEC. 1105. DAIRY PROGRAM.

       (a) Price support.--Section 204 of the Agricultural Act of 
     1949 (7 U.S.C. 1446e) is amended--
       (1) in the section heading, by striking ``1996'' and 
     inserting ``2002'';
       (2) in subsections (a), (b), (f), (g), and (k), by striking 
     ``1996'' each place it appears and inserting ``2002'';
       (3) in subsection (h)(2)(C), by striking ``and 1997'' and 
     inserting ``through 2002''.
       (b) Support Price for Butter and Powdered Milk.--Section 
     204(c)(3) of the Act is amended--
       (1) in subparagraph (A), by striking ``Subject to 
     subparagraph (B), the'' and inserting ``The'';
       (2) by striking subparagraph (B); and
       (3) by redesignating subparagraph (C) as subparagraph (B).
       (c) Support Rate.--Section 204(d) of the Act is amended--
       (1) by striking paragraphs (1) through (3); and
       (2) by redesignating paragraphs (4) and (5) as paragraphs 
     (1) and (2) respectively.

     SEC. 1106. SUGAR PROGRAM.

       (a) In General.--Section 206 of the Agricultural Act of 
     1949 (7 U.S.C. 1446g) is amended to read as follows:

     ``SEC. 206. SUGAR SUPPORT FOR 1996 THROUGH 2002 CROPS.

       ``(a) Definitions.--In this section:
       ``(1) Agreement on agriculture.--The term `Agreement on 
     Agriculture' means the Agreement on Agriculture resulting 
     from the Uruguay Round of Multilateral Trade Negotiations.
       ``(2) Major country.--The term `major country' includes--
       ``(A) a country that is allocated a share of the tariff 
     rate quota for imported sugars and syrups by the United 
     States Trade Representative pursuant to additional U.S. note 
     5 to chapter 17 of the Harmonized Tariff Schedule;
       ``(B) a country of the European Union; and
       ``(C) the People's Republic of China.
       ``(3) Market.--The term `market' means to sell or otherwise 
     dispose of in commerce in the United States (including, with 
     respect to any integrated processor and refiner, the movement 
     of raw cane sugar into the refining process) and delivery to 
     a buyer.
       ``(4) Total estimated disappearance.--The term `total 
     estimated disappearance' means the quantity of sugar, as 
     estimated by the Secretary, that will be consumed in the 
     United States during a fiscal year (other than sugar imported 
     for the production of polyhydric alcohol or to be refined and 
     reexported in refined form or in a sugar-containing product), 
     plus the quantity of sugar that would provide for adequate 
     carryover stocks.
       ``(b) Price Support.--The price of each of the 1996 through 
     2002 crops of sugar beets and sugarcane shall be supported in 
     accordance with this section.
       ``(c) Sugarcane.--Subject to subsection (e), the Secretary 
     shall support the price of domestically grown sugarcane 
     through loans at a support level of 18 cents per pound for 
     raw cane sugar.
       ``(d) Sugar Beets.--Subject to subsection (e), the 
     Secretary shall support the price of each crop of 
     domestically grown sugar beets through loans at the level 
     provided for refined beet sugar produced from the 1995 crop 
     of domestically grown sugar beets.
       ``(e) Adjustment in Support Level.--
       ``(1) Downward adjustment in support level.--
       ``(A) In general.--The Secretary shall decrease the support 
     price of domestically grown sugarcane and sugar beets from 
     the level determined for the preceding crop, as determined 
     under this section, if the quantity of negotiated reductions 
     in export and domestic subsidies of sugar that apply to the 
     European Union and other major countries in the aggregate 
     exceed the quantity of the reductions in the subsidies agreed 
     to under the Agreement of Agriculture.
       ``(B) Extent of reduction.--The Secretary shall not reduce 
     the level of price support under subparagraph (A) below a 
     level that provides an equal measure of support to the level 
     provided by the European Union or any other major country 
     through domestic and export subsidies that are subject to 
     reduction under the Agreement on Agriculture.
       ``(2) Increases in support level.--The Secretary may 
     increase the support level for each crop of domestically 
     grown sugarcane and sugar beets from the level determined for 
     the preceding crop based on such factors as the Secretary 
     determines appropriate, including changes (during the 2 crop 
     years immediately preceding the crop year for which the 
     determination is made) in the cost of sugar products, the 
     cost of domestic sugar production, the amount of any 
     applicable assessments, and other factors or circumstances 
     that may adversely affect domestic sugar production.
       ``(f) Loan Type; Processor Assurances.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall carry out this section by making recourse loans to 
     sugar producers.
       ``(2) Modification.--During any fiscal year in which the 
     tariff rate quota for imports of sugar into the United States 
     is established at, or is increased to, a level that exceeds 
     the minimum level for the imports committed to by the United 
     States under the Agreement on Agriculture, the Secretary 
     shall carry out this section by making nonrecourse loans 
     available to sugar producers. Any recourse loan previously 
     made available by the Secretary and not repaid under this 
     section during the fiscal year shall be converted into a 
     nonrecourse loan.
       ``(3) Processor assurances.--To effectively support the 
     prices of sugar beets and sugarcane received by a producer, 
     the Secretary shall obtain from each processor that 

[[Page S 16143]]
     receives a loan under this section such assurances as the Secretary 
     considers adequate that, if the Secretary is required under 
     paragraph (2) to make nonrecourse loans available, or convert 
     recourse loans into nonrecourse loans, each producer served 
     by the processor will receive the appropriate minimum payment 
     for sugar beets and sugarcane delivered by the producer, as 
     determined by the Secretary.
       ``(g) Announcements.--The Secretary shall announce the type 
     of loans available and the loan rates for beet and cane sugar 
     for any fiscal year under this section as far in advance as 
     is practicable.
       ``(h) Loan Term.--
       ``(1) In general.--Except as provided in paragraph (2) and 
     subsection (i), a loan under this section during any fiscal 
     year shall be made available not earlier than the beginning 
     of the fiscal year and shall mature at the end of 3 months.
       ``(2) Extension.--The maturity of a loan under this section 
     may be extended for up to 2 additional 3-month periods, at 
     the option of the borrower, except that the maturity of a 
     loan may not be extended under this paragraph beyond the end 
     of the fiscal year.
       ``(i) Supplementary Loans.--Subject to subsection (e), the 
     Secretary shall make available to eligible processors price 
     support loans with respect to sugar processed from sugar 
     beets and sugarcane harvested in the last 3 months of a 
     fiscal year. The loans shall mature at the end of the fiscal 
     year. The processor may repledge the sugar as collateral for 
     a price support loan in the subsequent fiscal year, except 
     that the second loan shall--
       ``(1) be made at the loan rate in effect at the time the 
     second loan is made; and
       ``(2) mature in not more than 9 months, less the quantity 
     of time that the first loan was in effect.
       ``(j) Use of Commodity Credit Corporation.--The Secretary 
     shall use the funds, facilities, and authorities of the 
     Commodity Credit Corporation to carry out this section.
       ``(k) Marketing Assessments.--
       ``(1) In general.--Assessments shall be collected in 
     accordance with this subsection with respect to all sugar 
     marketed within the United States during the 1996 through 
     2002 fiscal years.
       ``(2) Beet sugar.--The first seller of beet sugar produced 
     from domestic sugar beets or domestic sugar beet molasses 
     shall remit to the Commodity Credit Corporation a 
     nonrefundable marketing assessment in an amount equal to 
     1.1894 percent of the loan level established under subsection 
     (d) per pound of sugar marketed.
       ``(3) Cane sugar.--The first seller of raw cane sugar 
     produced from domestic sugarcane or domestic sugarcane 
     molasses shall remit to the Commodity Credit Corporation a 
     nonrefundable marketing assessment in an amount equal to 1.11 
     percent of the loan level established under subsection (c) 
     per pound of sugar marketed (including the transfer or 
     delivery of the sugar to a refinery for further processing or 
     marketing).
       ``(4) Collection.--
       ``(A) Timing.--Marketing assessments required under this 
     subsection shall be collected and remitted to the Commodity 
     Credit Corporation not later than 30 days after the date that 
     the sugar is marketed.
       ``(B) Manner.--Subject to subparagraph (A), marketing 
     assessments shall be collected under this subsection in the 
     manner prescribed by the Secretary and shall be 
     nonrefundable.
       ``(5) Penalties.--If any person fails to remit an 
     assessment required by this subsection or fails to comply 
     with such requirements for recordkeeping or otherwise fails 
     to comply with this subsection, the person shall be liable to 
     the Secretary for a civil penalty of not more than an amount 
     determined by multiplying--
       ``(A) the quantity of sugar involved in the violation; by
       ``(B) the loan level for the applicable crop of sugarcane 
     or sugar beets from which the sugar is produced.
     For the purposes of this paragraph, refined sugar shall be 
     treated as produced from sugar beets.
       ``(6) Enforcement.--The Secretary may enforce this 
     subsection in the courts of the United States.
       ``(l) Information Reporting.--
       ``(1) Duty of processors and refiners to report.--A 
     sugarcane processor, cane sugar refiner, and sugar beet 
     processor shall furnish the Secretary, on a monthly basis, 
     such information as the Secretary may require to administer 
     sugar programs, including the quantity of purchases of 
     sugarcane, sugar beets, and sugar, and production, 
     importation, distribution, and stock levels of sugar.
       ``(2) Duty of producers to report.--To efficiently and 
     effectively carry out the program under this section, the 
     Secretary may require a producer of sugarcane or sugar beets 
     to report, in the manner prescribed by the Secretary, the 
     producer's sugarcane or sugar beet yields and acres planted 
     to sugarcane or sugar beets, respectively.
       ``(3) Penalty.--Any person willfully failing or refusing to 
     furnish the information, or furnishing willfully any false 
     information, required under this subsection shall be subject 
     to a civil penalty of not more than $10,000 for each such 
     violation.
       ``(4) Monthly reports.--Taking into consideration the 
     information received under paragraph (1), the Secretary shall 
     publish on a monthly basis composite data on production, 
     imports, distribution, and stock levels of sugar.
       ``(m) Sugar Estimates.--
       ``(1) Domestic requirement.--Before the beginning of each 
     fiscal year, the Secretary shall estimate the domestic sugar 
     requirement of the United States in an amount that is equal 
     to the total estimated disappearance, minus the quantity of 
     sugar that will be available from carry-in stocks.
       ``(2) Quarterly reestimates.--The Secretary shall make 
     quarterly reestimates of sugar consumption, stocks, 
     production, and imports for a fiscal year not later than the 
     beginning of each of the second through fourth quarters of 
     the fiscal year.
       ``(n) Crops.--This section shall be effective only for the 
     1996 through 2002 crops of sugar beets and sugarcane.''.
       (b) Marketing Quotas.--Part VII of subtitle B of title III 
     of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa 
     et seq.) is repealed.

     SEC. 1107. SHEEP INDUSTRY TRANSITION PROGRAM.

       Title II of the Agricultural Act of 1949 (7 U.S.C. 1446 et 
     seq.) is amended by adding at the end the following:

     ``SEC. 208. SHEEP INDUSTRY TRANSITION PROGRAM.

       ``(a) Loss.--
       ``(1) In general.--The Secretary shall, on presentation of 
     warehouse receipts or other acceptable evidence of title as 
     determined by the Secretary, make available for each of the 
     1996 through 1999 marketing years recourse loans for wool at 
     a loan level, per pound, that is not less than the smaller 
     of--
       ``(A) the average price (weighted by market and month) of 
     the base quality of wool at average location in the United 
     States as quoted during the 5-marketing year period preceding 
     the year in which the loan level is announced, excluding the 
     year in which the average price was the highest and the year 
     in which the average price was the lowest in the period; or
       ``(B) 90 percent of the average price for wool projected 
     for the marketing year in which the loan level is announced, 
     as determined by the Secretary.
       ``(2) Adjustments to loan level.--
       ``(A) Limitation on decrease in loan level.--The loan level 
     for any marketing year determined under paragraph (1) may not 
     be reduced by more than 5 percent from the level determined 
     for the preceding marketing year, and may not be reduced 
     below 50 cents per pound.
       ``(B) Limitation on increase in loan level.--If for any 
     marketing year the average projected price determined under 
     paragraph (1)(B) is less than the average United States 
     market price determined under paragraph (1)(A), the Secretary 
     may increase the loan level to such level as the Secretary 
     may consider appropriate, not in excess of the average United 
     States market price determined under paragraph (1)(A).
       ``(C) Adjustment for quality.--
       ``(i) In general.--Notwithstanding subparagraphs (A) and 
     (B), the Secretary may adjust the loan level of a loan made 
     under this section with respect to a quantity of wool to more 
     accurately reflect the quality of the wool, as determined by 
     the Secretary.
       ``(ii) Establishment of grading system.--To allow producers 
     to establish the quality of wool produced on a farm, the 
     Secretary shall establish a grading system for wool, based on 
     micron diameter of the fibers in the wool.
       ``(iii) Fees.--The Secretary may charge each person that 
     requests a grade for a quantity of wool a fee to offset the 
     costs of testing and establishing a grade for the wool.
       ``(iv) Testing facilities.--To the extent practicable, the 
     Secretary may certify State, local, or private facilities to 
     carry out the grading of wool for the purpose of carrying out 
     this subparagraph.
       ``(3) Announcement of loan level.--The loan level for any 
     marketing year of wool shall be determined and announced by 
     the Secretary not later than December 1 of the calendar year 
     preceding the marketing year for which the loan is to be 
     effective or, in the case of the 1996 marketing year, as soon 
     as is practicable after December 1, 1995.
       ``(4) Term of loan.--
       ``(A) In general.--Recourse loans provided for in this 
     section may be made for an initial term of 9 months from the 
     first day of the month in which the loan is made.
       ``(B) Extensions.--Except as provided in subparagraph (C), 
     recourse loans provided for in this section shall, on request 
     of the producer during the 9th month of the loan period for 
     the wool, be made available for an additional term of 8 
     months.
       ``(C) Limitation.--A request to extend the loan period 
     shall not be approved in any month in which the average price 
     of the base quality of wool, as determined by the Secretary, 
     in the designated markets for the preceding month exceeded 
     130 percent of the average price of the base quality of wool 
     in the designated United States markets for the preceding 36-
     month period
       ``(5) Marketing loan provisions.--If the Secretary 
     determines that the prevailing world market price for wool 
     (adjusted to United States quality and location) is below the 
     loan level determined under paragraphs (1) through (4), to 
     make United States wool competitive, the Secretary shall 
     permit a producer to repay a loan made for any marketing year 
     at the lesser of--
       ``(A) the loan level determined for the marketing year; or
       ``(B) the higher of--
       ``(i) the loan level determined for the marketing year 
     multiplied by 70 percent; or

[[Page S 16144]]

       ``(ii) the prevailing world market price for wool (adjusted 
     to United States quality and location), as determined by the 
     Secretary.
       ``(6) Prevailing world market price.--
       ``(A) In general.--The Secretary shall prescribe by 
     regulation--
       ``(i) a formula to define the prevailing world market price 
     for wool (adjusted to United States quality and location); 
     and
       ``(ii) a mechanism by which the Secretary shall announce 
     periodically the prevailing world market price for wool 
     (adjusted to United States quality and location).
       ``(B) Use.--The prevailing world market price for wool 
     (adjusted to United States quality and location) established 
     under this paragraph shall be used to carry out paragraph 
     (5).
       ``(C) Adjustment of prevailing world market price.--
       ``(i) In general.--The prevailing world market price for 
     wool (adjusted to United States quality and location) 
     established under this paragraph shall be further adjusted if 
     the adjusted prevailing world market price is less than 115 
     percent of the current marketing year loan level for the base 
     quality of wool, as determined by the Secretary.
       ``(ii) Further adjustment.--The adjusted prevailing world 
     market price shall be further adjusted on the basis of some 
     or all of the following data, as available:

       ``(I) The United States share of world exports.
       ``(II) The current level of wool export sales and wool 
     export shipments.
       ``(III) Other data determined by the Secretary to be 
     relevant in establishing an accurate prevailing world market 
     price for wool (adjusted to United States quality and 
     location).

       ``(D) Market price quotation.--The Secretary may establish 
     a system to monitor and make available on a weekly basis 
     information with respect to the most recent average domestic 
     and world market prices for wool.
       ``(7) Participation.--The Secretary may make loans 
     available under this subsection to producers, cooperatives, 
     or marketing pools.
       ``(b) Loan Deficiency Payments.--
       ``(1) In general.--The Secretary shall, for each of the 
     1996 through 1999 marketing years of wool, make payments 
     available to producers who, although eligible to obtain a 
     loan under subsection (a), agree to forgo obtaining the loan 
     in return for payments under this subsection.
       ``(2) Computation.--A payment under this subsection shall 
     be computed by multiplying--
       ``(A) the loan payment rate; by
       ``(B) the quantity of wool the producer is eligible to 
     place under loan but for which the producer forgoes obtaining 
     the loan in return for payments under this subsection.
       ``(3) Loan payment rate.--For purposes of this subsection, 
     the loan payment rate shall be the amount by which--
       ``(A) the loan level determined for the marketing year 
     under subsection (a); exceeds
       ``(B) the level at which a loan may be repaid under 
     subsection (a).
       ``(c) Deficiency Payments.--
       ``(1) In general.--The Secretary shall make available to 
     producers deficiency payments for each of the 1996 through 
     1999 marketing years of wool in an amount computed by 
     multiplying--
       ``(A) the payment rate; by
       ``(B) the payment quantity of wool for the marketing year.
       ``(2) Payment rate.--
       ``(A) In general.--The payment rate for wool shall be the 
     amount by which the established price for the marketing year 
     of wool exceeds the higher of--
       ``(i) the national average market price received by 
     producers during the marketing year, as determined by the 
     Secretary; or
       ``(ii) the loan level determined for the marketing year.
       ``(B) Minimum established price.--The established price for 
     wool shall not be less than $2.12 per pound on a grease wool 
     basis for each of the 1996 through 1999 marketing years.
       ``(3) Payment quantity.--Payment quantity of wool for a 
     marketing year shall be the number of pounds of wool produced 
     during the marketing year.
       ``(d) Equitable Relief.--
       ``(1) Loans and payments.--If the failure of a producer to 
     comply fully with the terms and conditions of the program 
     conducted under this section precludes the making of loans 
     and payments, the Secretary may, nevertheless, make the loans 
     and payments in such amounts as the Secretary determines are 
     equitable in relation to the seriousness of the failure. The 
     Secretary may consider whether the producer made a good faith 
     effort to comply fully with the terms and conditions of the 
     program in determining whether equitable relief is warranted 
     under this paragraph.
       ``(2) Deadlines and program requirements.--The Secretary 
     may authorize the county and State committees established 
     under section 8(b) of the Soil Conservation and Domestic 
     Allotment Act (16 U.S.C. 590h(b)) to waive or modify 
     deadlines and other program requirements in cases in which 
     lateness or failure to meet such other requirements does not 
     affect adversely the operation of the program.
       ``(e) Regulations.--The Secretary may issue such 
     regulations as the Secretary determines necessary to carry 
     out this section.
       ``(f) Commodity Credit Corporation.--The Secretary shall 
     carry out the program authorized by this section through the 
     Commodity Credit Corporation.
       ``(g) Assignment of Payments.--The provisions of section 
     8(g) of the Soil Conservation and Domestic Allotment Act (16 
     U.S.C. 590h(g)) (relating to assignment of payments) shall 
     apply to payments under this section.
       ``(h) Sharing of Payments.--The Secretary shall provide for 
     the sharing of payments made under this section for any farm 
     among the producers on the farm on a fair and equitable 
     basis.
       ``(i) Tenants and Sharecroppers.--The Secretary shall 
     provide adequate safeguards to protect the interests of 
     tenants and sharecroppers.
       ``(j) Cross-Compliance.--
       ``(1) In general.--Compliance on a farm with the terms and 
     conditions of any other commodity program, or compliance with 
     marketing year acreage base requirements for any other 
     commodity, may not be required as a condition of eligibility 
     for loans or payments under this section.
       ``(2) Compliance on other farms.--The Secretary may not 
     require producers on a farm, as a condition of eligibility 
     for loans or payments under this section for the farm, to 
     comply with the terms and conditions of the wool program with 
     respect to any other farm operated by the producers.
       ``(k) Limitation on Outlays.--
       ``(1) In general.--The total amount of payments that may be 
     made available to all producers under this section may not 
     exceed--
       ``(A) $75,000,000, during any single marketing year; or
       ``(B) $200,000,000 in the aggregate for marketing years 
     1996 through 1999.
       ``(2) Proration of benefits.--To the extent that the total 
     amount of benefits for which producers are eligible under 
     this section exceeds the limitations in paragraph (1), funds 
     made available under this section shall be prorated among all 
     eligible producers.
       ``(3) Person limitation.--
       ``(A) Loans.--No person may realize gains or receive 
     payments under subsection (a) or (b) that exceed $75,000 
     during any marketing year.
       ``(B) Deficiency Payments.--No person may receive payments 
     under subsection (c) that exceed $50,000 during any marketing 
     year.
       ``(l) Marketing Years.--Notwithstanding any other provision 
     of law, this section shall be effective only for the 1996 
     through 1999 marketing years for wool.''.

     SEC. 1108. SUSPENSION OF PERMANENT PRICE SUPPORT AUTHORITY.

       (a) Wheat.--
       (1) Nonapplicability of certificate requirements.--Sections 
     379d through 379j of the Agricultural Adjustment Act of 1938 
     (7 U.S.C. 1379d-1379j) shall not be applicable to wheat 
     processors or exporters during the period June 1, 1995, 
     through May 31, 2003.
       (2) Suspension of land use, wheat marketing allocation, and 
     producer certificate provisions.--Sections 331 through 339, 
     379b, and 379c of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1331 through 1339, 1379b, and 1379c) shall not be 
     applicable to the 1996 through 2002 crops of wheat.
       (3) Suspension of certain quota provisions.--The joint 
     resolution entitled ``A joint resolution relating to corn and 
     wheat marketing quotas under the Agricultural Adjustment Act 
     of 1938, as amended'', approved May 26, 1941 (7 U.S.C. 1330 
     and 1340), shall not be applicable to the crops of wheat 
     planted for harvest in the calendar years 1996 through 2002.
       (4) Nonapplicability of section 107 of the agricultural act 
     of 1949.--Section 107 of the Agricultural Act of 1949 (7 
     U.S.C. 1445a) shall not be applicable to the 1996 through 
     2002 crops of wheat.
       (b) Feed Grains.--
       (1) Nonapplicability of section 105 of the agricultural act 
     of 1949.--Section 105 of the Agricultural Act of 1949 (7 
     U.S.C. 1444b) shall not be applicable to the 1996 through 
     2002 crops of feed grains.
       (2) 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 ``2002''.
       (c) Oilseeds.--Section 201(a) of the Agricultural Act of 
     1949 (7 U.S.C. 1446(a)) is amended by striking ``oilseeds'' 
     and all that follows through ``determine),''.
       (d) Upland Cotton.--
       (1) Suspension of base acreage allotments, marketing 
     quotas, and related provisions.--Sections 342, 343, 344, 345, 
     346, and 377 of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1342-1346 and 1377) shall not be applicable to any of 
     the 1996 through 2002 crops of upland cotton.
       (2) Miscellaneous cotton provisions.--Section 103(a) of the 
     Agricultural Act of 1949 (7 U.S.C. 1444(a)) shall not be 
     applicable to the 1996 through 2002 crops.
       (e) Peanuts.--
       (1) Suspension of marketing quotas and acreage 
     allotments.--The following provisions of the Agricultural 
     Adjustment Act of 1938 shall not be applicable to the 1996 
     through 2002 crops of peanuts:
       (A) Subsections (a) through (j) of section 358 (7 U.S.C. 
     1358).
       (B) Subsections (a) through (h) of section 358a (7 U.S.C. 
     1358a).
       (C) Subsections (a), (b), (d), and (e) of section 358d (7 
     U.S.C. 1359).
       (D) Part I of subtitle C of title III (7 U.S.C. 1361 et 
     seq.).
       (E) Section 371 (7 U.S.C. 1371).

[[Page S 16145]]

       (2) Reports and records.--Effective only for the 1996 
     through 2002 crops of peanuts, the first sentence of section 
     373(a) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
     1373(a)) is amended by inserting before ``all brokers and 
     dealers in peanuts'' the following: ``all producers engaged 
     in the production of peanuts,''.
       (3) Suspension of certain price support provisions.--
     Section 101 of the Agricultural Act of 1949 (7 U.S.C. 1441) 
     shall not be applicable to the 1996 through 2002 crops of 
     peanuts.

     SEC. 1109. EXTENSION OF RELATED PRICE SUPPORT PROVISIONS.

       (a) Deficiency and Land Diversion Payments.--Section 114 of 
     the Agricultural Act of 1949 (7 U.S.C. 1445j) is amended--
       (1) in subsections (a)(1) and (c), by striking ``1997'' 
     each place it appears and inserting ``2002''; and
       (2) in subsection (b), by striking ``1995'' and inserting 
     ``2002'';
       (b) Adjustment of Established Prices.--Section 402(b) of 
     the Agricultural Act of 1949 (7 U.S.C. 1422(b)) is amended by 
     striking ``1995'' and inserting ``2002''.
       (c) Adjustment of Support Prices.--Section 403(c) of the 
     Agricultural Act of 1949 (7 U.S.C. 1423(c)) is amended by 
     striking ``1995'' and inserting ``2002''.
       (d) Application of Terms in the Agricultural Act of 1949.--
     Section 408(k)(3) of the Agricultural Act of 1949 (7 U.S.C. 
     1428(k)(3)) is amended by striking ``1995'' and inserting 
     ``2002''.
       (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 ``1997'' each place it appears and 
     inserting ``2002'';
       (2) in paragraphs (1) and (2) of section 505(b) (7 U.S.C. 
     1465(b)), by striking ``1997'' each place it appears and 
     inserting ``2002''; and
       (3) in section 509 (7 U.S.C. 1469), by striking ``1997'' 
     and inserting ``2002''.
       (f) Payment Limitations.--Section 1001 of the Food Security 
     Act of 1985 (7 U.S.C. 1308) is amended by striking ``1997'' 
     each place it appears and inserting ``2002''.
       (g) Normally Planted Acreage.--Section 1001 of the Food and 
     Agriculture Act of 1977 (7 U.S.C. 1309) is amended by 
     striking ``1995'' each place it appears in subsections (a), 
     (b)(1), and (c) and inserting ``2002''.
       (h) 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 ``2002''; and
       (2) in section 1154(b)(1)(A), by striking ``1995'' each 
     place it appears and inserting ``2002''.
       (i) 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'' each place it appears and 
     inserting ``2002''.

     SEC. 1110. EFFECTIVE DATE.

       (a) In General.--Except as otherwise specifically provided 
     in this subtitle, this subtitle and the amendments made by 
     this subtitle shall apply beginning with the 1996 crop of an 
     agricultural commodity.
       (b) Prior Crops.--Except as otherwise specifically provided 
     and notwithstanding any other provision of law, this subtitle 
     and the amendments made by this subtitle shall not affect the 
     authority of the Secretary of Agriculture to carry out a 
     price support, production adjustment, or payment program 
     for--
       (1) any of the 1991 through 1995 crops of an agricultural 
     commodity established under a provision of law as in effect 
     immediately before the enactment of this Act; or
       (2) the 1996 crop of an agricultural commodity established 
     under section 406(b) of the Agricultural Act of 1949 (7 
     U.S.C. 1426(b)).
                        Subtitle B--Conservation

     SEC. 1201. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

       Chapter 2 of subtitle D of title XII of the Food Security 
     Act of 1985 (16 U.S.C. 3838 et seq.) is amended to read as 
     follows:

         ``CHAPTER 2--ENVIRONMENTAL QUALITY INCENTIVES PROGRAM

     ``SEC. 1238. DEFINITIONS.

       ``In this chapter:
       ``(1) Land management practice.--The term `land management 
     practice' means nutrient or manure management, integrated 
     pest management, irrigation management, tillage or residue 
     management, grazing management, or another land management 
     practice the Secretary determines is needed to protect soil, 
     water, or related resources in the most cost efficient 
     manner.
       ``(2) Large confined livestock operation.--The term `large 
     confined livestock operation' means a farm or ranch that--
       ``(A) is a confined animal feeding operation; and
       ``(B) has more than--
       ``(i) 700 mature dairy cattle;
       ``(ii) 1,000 beef cattle;
       ``(iii) 100,000 laying hens or broilers;
       ``(iv) 55,000 turkeys;
       ``(v) 2,500 swine; or
       ``(vi) 10,000 sheep or lambs.
       ``(3) Livestock.--The term `livestock' means mature dairy 
     cows, beef cattle, laying hens, broilers, turkeys, swine, 
     sheep, or lambs.
       ``(4) Operator.--The term `operator' means a person who is 
     engaged in crop or livestock production (as defined by the 
     Secretary).
       ``(5) Structural practice.--The term `structural practice' 
     means the establishment of an animal waste management 
     facility, terrace, grassed waterway, contour grass strip, 
     filterstrip, permanent wildlife habitat, or another 
     structural practice that the Secretary determines is needed 
     to protect soil, water, or related resources in the most cost 
     effective manner.

     ``SEC. 1238A ESTABLISHMENT AND ADMINISTRATION OF 
                   ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

       ``(a) Establishment.--
       ``(1) In general.--During the 1996 through 2006 fiscal 
     years, the Secretary shall enter into contracts with 
     operators to provide technical assistance, cost-sharing 
     payments, and incentive payments to operators, who enter into 
     contracts with the Secretary, through an environmental 
     quality incentives program in accordance with this chapter.
       ``(2) Consolidation of existing programs.--In establishing 
     the environmental quality incentives program authorized under 
     this chapter, the Secretary shall combine into a single 
     program the functions of--
       ``(A) the agricultural conservation program authorized by 
     sections 7 and 8 of the Soil Conservation and Domestic 
     Allotment Act (16 U.S.C. 590g and 590h) (as in effect before 
     the amendments made by section 201(b)(1) of the Agricultural 
     Reconciliation Act of 1995);
       ``(B) the Great Plains conservation program established 
     under section 16(b) of the Soil Conservation and Domestic 
     Allotment Act (16 U.S.C. 590p(b)) (as in effect before the 
     amendment made by section 201(b)(2) of the Agricultural 
     Reconciliation Act of 1995);
       ``(C) the water quality incentives program established 
     under this chapter (as in effect before amendment made by 
     section 201(a) of the Agricultural Reconciliation Act of 
     1995); and
       ``(D) the Colorado River Basin salinity control program 
     established under section 202(c) of the Colorado River Basin 
     Salinity Control Act (43 U.S.C. 1592(c)) (as in effect before 
     the amendment made by section 201(b)(3) of the Agricultural 
     Reconciliation Act of 1995).
       ``(b) Application and Term.--
       ``(1) In general.--A contract between an operator and the 
     Secretary under this chapter may--
       ``(A) apply to 1 or more structural practices or 1 or more 
     land management practices, or both; and
       ``(B) have a term of not less than 5, nor more than 10, 
     years, as determined appropriate by the Secretary, depending 
     on the practice or practices that are the basis of the 
     contract.
       ``(2) Contract effective date.--A contract between an 
     operator and the Secretary under this chapter shall become 
     effective on October 1st following the date the contract is 
     fully entered into.
       ``(c) Cost-Sharing and Incentive Payments.--
       ``(1) Cost-sharing payments.--
       ``(A) In general.--The Federal share of cost-sharing 
     payments to an operator proposing to implement 1 or more 
     structural practices shall not be more than 75 percent of the 
     projected cost of the practice, as determined by the 
     Secretary, taking into consideration any payment received by 
     the operator from a State or local government.
       ``(B) Limitation.--An operator of a large confined 
     livestock operation shall not be eligible for cost-sharing 
     payments to construct an animal waste management facility.
       ``(C) Other payments.--An operator shall not be eligible 
     for cost-sharing payments for structural practices on 
     eligible land under this chapter if the operator receives 
     cost-sharing payments or other benefits for the same land 
     under chapter 1 or 3.
       ``(2) Incentive payments.--The Secretary shall make 
     incentive payments in an amount and at a rate determined by 
     the Secretary to be necessary to encourage an operator to 
     perform 1 or more land management practices.
       ``(d) Technical Assistance.--
       ``(1) Funding.--The Secretary shall allocate funding under 
     this chapter for the provision of technical assistance 
     according to the purpose and projected cost for which the 
     technical assistance is provided in a fiscal year. The 
     allocated amount may vary according to the type of expertise 
     required quantity of time involved, and other factors as 
     determined appropriate by the Secretary. Funding shall not 
     exceed the projected cost to the Secretary of the technical 
     assistance provided in a fiscal year.
       ``(2) Other authorities.--The receipt of technical 
     assistance under this chapter shall not affect the 
     eligibility of the operator to receive technical assistance 
     under other authorities of law available to the Secretary.
       ``(e) Funding.--The Secretary shall use to carry out this 
     chapter not less than--
       ``(1) $200,000,000 for fiscal year 1997; and
       ``(2) $250,000,000 for each of fiscal years 1998 through 
     2002.
       ``(f) Commodity Credit Corporation.--The Secretary may use 
     the funds, facilities, and authorities of the Commodity 
     Credit Corporation to carry out this subchapter.

     ``SEC. 1238B. CONSERVATION PRIORITY AREAS.

       ``(a) In General.--The Secretary shall designate watersheds 
     or regions of special environmental sensitivity, including 
     the Chesapeake Bay region (located in Pennsylvania, Maryland, 
     and Virginia), the Great Lakes region, the Long Island Sound 
     region, prairie pothole region (located in North Dakota, 

[[Page S 16146]]
     South Dakota, and Minnesota), Rainwater Basin (located in Nebraska), 
     and other areas the Secretary considers appropriate, as 
     conservation priority areas that are eligible for enhanced 
     assistance through the programs established under this 
     chapter and chapter 1.
       ``(b) Applicability.--A designation shall be made under 
     this section if an application is made by a State agency and 
     agricultural practices within the watershed or region pose a 
     significant threat to soil, water, and related natural 
     resources, as determined by the Secretary.

     ``SEC. 1238C. EVALUATION OF OFFERS AND PAYMENTS.

       ``(a) Regional Priorities.--The Secretary shall provide 
     technical assistance, cost-sharing payments, and incentive 
     payments to operators in a region, watershed, or conservation 
     priority area under this chapter based on the significance of 
     soil, water, and related natural resources problems in the 
     region, watershed, or area, and the structural practices or 
     land management practices that best address the problems, as 
     determined by the Secretary.
       ``(b) Maximization of Environmental Benefits.--
       ``(1) In general.--In providing technical assistance, cost-
     sharing payments, and incentive payments to operators in 
     regions, watersheds, or conservation priority areas under 
     this chapter, the Secretary shall accord a higher priority to 
     assistance and payments that maximize environmental benefits 
     per dollar expended.
       ``(2) State or local contributions.--The Secretary shall 
     accord a higher priority to operators whose agricultural 
     operations are located within watersheds, regions, or 
     conservation priority areas in which State or local 
     governments have provided, or will provide, financial or 
     technical assistance to the operators for the same 
     conservation or environmental purposes.

     ``SEC. 1238D. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM PLAN.

       ``(a) In General.--Prior to approving cost-share or 
     incentive payments authorized under this chapter, the 
     Secretary shall require the preparation and evaluation of an 
     environmental quality incentives program plan described in 
     subsection (b), unless the Secretary determines that such a 
     plan is not necessary to evaluate the application for the 
     payments.
       ``(b) Terms.--An environmental quality incentives program 
     plan shall include (as determined by the Secretary) a 
     description of relevant--
       ``(1) farming or ranching practices on the farm;
       ``(2) characteristics of natural resources on the farm;
       ``(3) specific conservation and environmental objectives to 
     be achieved including those that will assist the operator in 
     complying with Federal and State environmental laws;
       ``(4) dates for, and sequences of, events for implementing 
     the practices for which payments will be received under this 
     chapter; and
       ``(5) information that will enable evaluation of the 
     effectiveness of the plan in achieving the conservation and 
     environmental objectives, and that will enable evaluation of 
     the degree to which the plan has been implemented.

     ``SEC. 1238E. LIMITATION ON PAYMENTS.

       ``(a) Payments.--The total amount of cost-share and 
     incentive payments paid to a person under this chapter may 
     not exceed--
       ``(1) $10,000 for any fiscal year; or
       ``(2) $50,000 for any multiyear contract.
       ``(b) Regulations.--The Secretary shall issue regulations 
     that are consistent with section 1001 for the purpose of--
       ``(1) defining the term `person' as used in subsection (a); 
     and
       ``(2) prescribing such rules as the Secretary determines 
     necessary to ensure a fair and reasonable application of the 
     limitations contained in subsection (a).''.
       (b) Strike sections 12161 and 12162.
                                 ______


              WELLSTONE (AND LIEBERMAN) AMENDMENT NO. 3021

  Mr. WELLSTONE (for himself and Mr. Lieberman) proposed an amendment 
to the bill S. 1357, supra as follows:

     SEC. 1. PAYMENT LIMITATION.

       Strike section 1110 and insert the following:

     ``SEC. 1110. EXTENSION OF RELATED PRICE SUPPORT PROVISIONS.

       ``(a) In General.--Section 1001 of the Food Security Act of 
     1985 (7 U.S.C. 1308) is amended by striking paragraph (1) and 
     inserting the following:
       ``(1) Limitation.--
       ``(A) Payments.--Subject to sections 1001A through 1001C, 
     for each of the 1996 and subsequent crops, the total amount 
     of deficiency payments and land diversion payments and 
     payments specified in clauses (iii), (iv), and (v) of 
     paragraph (2)(B) that a person shall be entitled to receive 
     under 1 or more of the annual programs established under the 
     Agricultural Act of 1949 (7 U.S.C. 1421 et seq.) for wheat, 
     feed grains, upland cotton, extra long staple cotton, rice 
     and oilseeds (as defined in section 205(a) of the Act (7 
     U.S.C. 1446f) may not exceed $40,000.
       ``(B) Direct Attribution.--The Secretary shall attribute 
     payments specified in subparagraphs (A) and (B) and paragraph 
     (2) to persons who receive the payments directly and 
     attribute the payments received by entities to individuals 
     who own the entities in proportion to their ownership 
     interest in the entity.
       ``(b) Conforming Amendments.--
       ``(1) Section 1001(2)(A) of the Act (7 U.S.C. 1308(2)(a)) 
     is amended by striking `1991 through 1997' and inserting 
     `1996 and subsequent'.
       ``(2) Section 1001(2)(B)(iv) of the Act (7 U.S.C. 
     1308(2)(B)(iv) is amended by striking `107B(a)(3) or 
     105B(a)(3)' and insert `304(a)(3) or 305(a)(3)'.
       ``(3) Section 1001(2)(B)(v) of the Act (7 U.S.C. 
     1308(2)(B)(v)) is amended by striking `107B(b), 105B(b), 
     103(B)(b), 101B(b), 101B(b),' and insert `302, 303, 304, 
     305,'
       ``(4) Section 1001C(a) of the Act (7 U.S.C. 1308-3(a)) is 
     amended by striking `1991 through 1997' each place it appears 
     and inserting `1996 and subsequent'.''

     SEC. 2. COMMODITY PROGRAMS.

       (a) Strike section 1103(4)(C)(ii)(I) and insert the 
     following:
       ``(I) by striking `85 percent' and inserting `72.5 
     percent';''.
       (b) Strike section 1104(4)(C)(ii)(I) and inserting the 
     following:
       ``(I) by striking `85 percent' and inserting `72.5 
     percent';''.
       (c) Strike section 1105(4)(C)(ii)(I) and inserting the 
     following:
       ``(I) by striking `85 percent' and inserting `72.5 
     percent';'' and
       (d) Strike section 1106(4)(C)(ii)(I) and inserting the 
     following:
       ``(I) by striking `85 percent' and inserting `72.5 
     percent'.''.

     SEC. 3. CONSERVATION RESERVE PROGRAM.

       Amend section 1201(a) by striking ``(1) $1,787,000,000 for 
     fiscal year 1996'' and all that follows through 
     ``$974,000,000 for fiscal year 2002'' and insert the 
     following--
       ``(1) $1,802,000,000 for the fiscal year 1996;
       ``(2) $1,811,000,000 for the fiscal year 1997;
       (3) ``$1,476,000,000 for the fiscal year 1998;
       (4) ``$1,277,000,000 for the fiscal year 1999;
       (5) ``$1,131,000,000 for the fiscal year 2000;
       (6) ``$1,029,000,000 for the fiscal year 2001; and
       (7) ``$1,004,000,000 for the fiscal year 2002.''
                                 ______


                        BROWN AMENDMENT NO. 3022

  Mr. DOMENICI (for Mr. Brown) proposed an amendment to the bill S. 
1357, supra; as follows:

       On page 13, strike line 6 through 12 and insert the 
     following:

     SEC. 121. LEASE-PURCHASE OF OVERSEAS PROPERTY.

       (a) Authority for Lease-Purchase.--Subject to subsections 
     (b) and (c), the Secretary is authorized to acquire by lease-
     purchase such properties as are described in subsection (b), 
     if--
       (1) the Secretary of State, and
       (2) the Director of the Office of Management and Budget.

     certify and notify the appropriate committees of Congress 
     that the lease-purchase arrangement will result in a net cost 
     savings to the Federal government when compared to a lease, a 
     direct purchase, or direct construction of comparable 
     property.
       (b) Locations and Limitations.--The authority granted in 
     subsection (a) may be exercised only--
       (1) to acquire appropriate housing for Department of State 
     personnel stationed abroad and for the acquisition of other 
     facilities, in locations in which the United States has a 
     diplomatic mission; and
       (2) during fiscal years 1996 through 1999.
       (c) Authorization of Funding.--Funds for lease-purchase 
     arrangements made pursuant to subsection (a) shall be 
     available from amounts appropriated under the authority of 
     section 111(a)(3) (related to the Acquisition and Maintenance 
     of Buildings Abroad'' account).
                                 ______


                       BRADLEY AMENDMENT NO. 3023

  Mr. BRADLEY proposed an amendment to the bill S. 1357, supra; as 
follows:

       Strike sections 5400 and 5401.
                                 ______


                        LEAHY AMENDMENT NO 3024

  Mr. EXON (for Mr. Leahy) proposed an amendment to the bill S. 1357, 
supra; as follows:

       On page 103, on line 6, strike ``(D)'' and insert ``(E)''.
       On page 103, strike line 5 and insert the following:
       ``(D) until October 1, 1998, a pregnant woman not otherwise 
     exempt under this paragraph; or''
       On page 130, strike line 14 and insert the following:

     ``SEC. 1430. PROVIDING FUNDING FOR AMERICA SAMOA.

       ``Section 19 of the Food Stamp Act of 1977 (7 U.S.C. 2028) 
     is amended by adding the following new subsection--
       `(e) From the sums appropriated under this Act, the 
     Secretary shall pay to the Territory of American Samoa up to 
     $5,300,000 for each of the 1996 and 1997 fiscal years to 
     finance 100 percent of the expenditures of a nutrition 
     assistance program extended under P.L. 96-597 during that 
     fiscal year.'.''.

     SEC. 1431. EFFECTIVE DATE.''

       On page 152, line 7, strike ``December 31, 1995'' and 
     insert ``November 30, 1995''.
       On page 152, line 8, strike ``January 1, 1996'' and insert 
     ``December 1, 1995''.
                                 ______

                                 
[[Page S 16147]]


                BUMPERS (AND OTHERS) AMENDMENT NO. 3025

  Mr. BUMPERS (for himself, Mr. Bradley, and Mr. Leahy) proposed an 
amendment to the bill S. 1357, supra; as follows:

       Strike pages 360-382 and insert the following in lieu 
     thereof:

      Property Act of 1944 (50 U.S.C. App. sec. 1622). In order to 
     avoid market disruptions, the Secretary shall consult with 
     appropriate executive agencies with respect to 
     dispositions under this section.
       (c) Disposition of Proceeds.--After deduction of 
     administrative costs of disposition under this section not to 
     exceed $7 million per year, the remainder of the proceeds 
     from dispositions under this section shall be returned to the 
     Treasury as miscellaneous receipts. There shall be 
     established a new receipt account in the Treasury for 
     proceeds of asset sales under this section.

     SEC. 5651. WEEKS ISLAND.

       Notwithstanding section 161 of the Energy Policy and 
     Conservation Act, the Secretary of Energy shall draw down and 
     sell 7 million barrels of oil contained in the Weeks Island 
     Strategic Petroleum Reserve Facility.

     SEC. 5652. LEASE OF EXCESS SPRO CAPACITY.

       The Energy Policy and Conservation Act (42 U.S.C. 6201 to 
     6422) is amended by adding the following new section after 
     section 167:

     ``SEC. 168. USE OF UNDERUTILIZED FACILITIES.

       ``(a) Notwithstanding any other provision of this title, 
     the Secretary, by lease or otherwise, for any term and under 
     such other conditions as the Secretary considers necessary or 
     appropriate, may store in underutilized Strategic Petroleum 
     Reserve facilities petroleum product owned by a foreign 
     government or its representative.
       ``(b) Petroleum product stored under this section is not 
     part of the Reserve and may be exported from the United 
     States.''.
       ``(c) Beginning in fiscal year 2001 and in each fiscal year 
     thereafter, 50 percent of the funds resulting from the 
     leasing of Strategic Petroleum Reserve facilities authorized 
     by subsection (a) shall be available to the Secretary of 
     Energy without further appropriation for the purchase of oil 
     for the Strategic Petroleum Reserve.''.
                           Subtitle H--Mining

     SEC. 5700. SHORT TITLE.

       This subtitle may be cited as ``The Mining Law Revenue Act 
     of 1995''.

     SEC. 5701. DEFINITIONS.

       When used in this subtitle:
       (1) ``Assessment year'' means the annual period commencing 
     at 12 o'clock noon on the 1st day of September and ending at 
     12 o'clock noon on the 1st day of September of the following 
     year.
       (2) ``Federal lands'' means lands and interests in lands 
     owned by the United States that are open to mineral location, 
     or that were open to mineral location when a mining claim or 
     site was located and which have not been patented under the 
     general mining laws.
       (3) ``General mining laws'' means those Acts which 
     generally comprise chapters 2, 11, 12, 12A, 15, and 16, and 
     sections 161 and 162, of Title 30 of the United States Code, 
     all Acts heretofore enacted which are amendatory of or 
     supplementary to any of the foregoing Acts, and the judicial 
     and administrative decisions interpreting such Acts.
       (4) ``Locatable minerals'' means those minerals owned by 
     the United States and subject to location and disposition 
     under the general mining laws on or after the effective date 
     of this Subtitle, but not including any mineral held in trust 
     by the United States for any Indian or Indian tribe, as 
     defined in section 2 of the Indian Mineral Development Act of 
     1982 (25 U.S.C. 2101), or any mineral owned by any Indian or 
     Indian tribe, as defined in that section, that is subject to 
     a restriction against alienation imposed by the United 
     States, or any mineral owned by any incorporated Native 
     group, village corporation, or regional corporation and 
     acquired by the group or corporation under the provisions of 
     the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
     seq.).
       (5) ``Mineral activities'' means any activity on Federal 
     lands related to, or incidental to, exploration for or 
     development, mining, production, beneficiation, or processing 
     of any locatable mineral, or reclamation of the impacts of 
     such activities.
       (6) ``Mining claim or site'', except where provided 
     otherwise, means a lode mining claim, placer mining claim, 
     mill site or tunnel site.
       (7) ``Operator'' means any person conducting mineral 
     activities subject to this Subtitle.
       (8) ``Person'' means an individual, Indian tribe, 
     partnership, association, society, joint venture, joint stock 
     company, firm, company, limited liability company, 
     corporation, cooperative or other organization, and any 
     instrumentality of State or local government, including any 
     publicly owned utility or publicly owned corporation of State 
     or local government.
       (10) ``Secretary'' means the Secretary of the Interior.

     SEC. 5702. CLAIM MAINTENANCE REQUIREMENTS.

       (a) Maintenance Fee.--After the date of enactment of this 
     Subtitle, the owner of each unpatented mining claim or site 
     located pursuant to the general mining laws, whether located 
     before or after the enactment of this Subtitle, shall pay in 
     advance to the Secretary annually on or before September 1, 
     and until a patent has been issued therefor, a maintenance 
     fee of $100 per mining claim or site. The owner of each 
     unpatented mining claim or site located after the date of 
     enactment of this Subtitle pursuant to the general mining 
     laws shall pay to the Secretary, at the time the copy of the 
     notice or certificate of location is filed with the Bureau of 
     Land Management pursuant to section 314(b) of the Federal 
     Land Policy and Management Act of 1976 (43 U.S.C. 1744(b)), 
     in addition to the location fee required under subsection (c) 
     of this section, an initial maintenance fee of $100 per 
     mining claim or site for the assessment year which includes 
     the date of location of such mining claim or site. If a 
     mining claim or site is located within 90 days before 
     September 1 and the copy of the notice or certificate of 
     location is timely filed with the Bureau of Land Management 
     under subsection 314(b) of the Federal Land Policy and 
     Management Act of 1976 after September 1, the annual 
     maintenance fee payable under the first sentence of this 
     subsection shall be paid at the time such notice or 
     certificate of location is filed, in addition to the location 
     fee and the initial $100 maintenance fee. No maintenance fee 
     shall be required if the fee is waived or the owner of the 
     mining claim or site is exempt as provided in section 5703 of 
     this Subtitle.
       (b) Maintenance Fee Statement.--Each payment under 
     subsection (a) of this section shall be accompanied by a 
     statement which reasonably identifies the mining claim or 
     site for which the maintenance fee is being paid. Such 
     statement may include the name of the mining claim or site, 
     the serial number assigned by the Secretary to such mining 
     claim or site, the description of the book and page in which 
     the notice or certificate of location for such mining claim 
     or site is recorded under State law, any combination of the 
     foregoing, or any other information that reasonably 
     identifies the mining claim or site for which the maintenance 
     fee is being paid. The statement required under this 
     subsection shall be in lieu of any annual filing requirements 
     for mining claims or sites, under any other Federal law, but 
     shall not supersede any such filing requirement under 
     applicable State law.
       (c) Location Fee.--The owner of each unpatented mining 
     claim or site located on or after the date of enactment of 
     this Subtitle pursuant to the general mining laws shall pay 
     to the Secretary, at the time the notice or certificate of 
     location is filed with the Bureau of Land Management pursuant 
     to subsection 314(b) of the Federal Land Policy and 
     Management Act of 1976 (43 U.S.C. 1744(b)), a location fee of 
     $25.00 per claim.
       (d) Credit Against Royalty.--The annual claim maintenance 
     fee paid for any unpatented mining claim or site on or before 
     September 1 of any year shall be credited against the amount 
     of royalty required to be paid under Section 5705 for such 
     mining claim or site during the following assessment year.
       (e) Failure To Comply.--The failure of the owner of the 
     mining claim or site to pay the claim maintenance fee or 
     location fee for a mining claim or site on or before the date 
     such payment is due under subsection (a) or subsection (c) of 
     this section shall constitute forfeiture of the mining claim 
     or site and such mining claim or site shall be null and void, 
     effective as of the day after the date such payment is due: 
     Provided, however, That, if such maintenance fee or location 
     fee is paid or tendered on or before the 30th day after such 
     payment was due under subsection (a) or subsection (c) of 
     this section, such mining claim or site shall not be 
     forfeited or null or void, and such maintenance fee or 
     location fee shall be deemed timely paid.
       (f) Repeal of Omnibus Budget Reconciliation Act Fee 
     Requirements.--Sections 10101 through 10106 of the Omnibus 
     Budget Reconciliation Act of 1993 (30 U.S.C. 28f through 28k) 
     are hereby repealed.
       (g) Amendment of FLPMA Filing Requirements.--Section 314 
     (a) of the Federal Land Policy and Management Act of 1976 (43 
     U.S.C. 1744 (a)) is hereby repealed.

     SEC. 5703. WAIVER AND EXEMPTION.

       (a) Waiver of Fee.--The maintenance fee provided for in 
     subsection 5702(a) shall be waived for the owner of a mining 
     claim or site who certifies in writing to the Secretary, on 
     or before the date the payment is due, that, as of the date 
     such payment is due, such owner and all related persons own 
     not more than twenty-five unpatented mining claims or sites. 
     Any owner of a mining claim or site that is not required to 
     pay a maintenance fee under this subsection shall continue to 
     be subject to the assessment work requirements of the general 
     mining laws or of any other State or Federal law, subject to 
     any suspension or deferment of annual assessment work 
     provided by law, for the assessment year following the filing 
     of the certification required by this subsection.
       (b) Related Persons.--As used in subsection (a), the term 
     ``related persons'' includes--
       (1) the spouse and dependent children (as defined in 
     section 152 of the Internal Revenue Code of 1986), of the 
     owner of the mining claim or site; and
       (2) a person controlled by, controlling, or under common 
     control with the owner of the mining claim or site.
       (c) Exemption.--The owner of any mining claim or site who 
     certifies in writing to the Secretary on or before the first 
     day of any assessment year that access to such mining claim 
     or site was denied or impeded during the prior assessment 
     year by the action or 

[[Page S 16148]]
     inaction of any local, State, or Federal Governmental officer, agency, 
     or court, or by any Indian tribal authority, shall be exempt 
     from the maintenance fee requirement of subsection (a) of 
     section 5702 for the assessment year following the filing of 
     the certification.

     SEC. 5704. PATENTS.

       (a) In General.--Except as provided in subsection (c), any 
     patent issued by the United States under the general mining 
     laws after the date of enactment of this Subtitle shall be 
     issued only--
       (1) upon payment by the owner of the claim of the fair 
     market value for the interest in the land owned by the United 
     States exclusive of and without regard to the mineral 
     deposits in the land or the use of the land for mineral 
     activities; and
       (2) subject to reservation by the United States of the 
     royalty provided in section 5705.
       (b) Right of Reentry.--
       (1) Except as provided in subsection 5704(c), and 
     notwithstanding any other provision of law, a patent issued 
     pursuant to this section shall be subject to a right of 
     reentry by the United States if the patented estate is used 
     by the patentee for any purpose other than for conducting 
     mineral activities in good faith and such unauthorized use is 
     not discontinued as provided in this subsection.
       (2) If the surface of the patented estate is used by the 
     patentee, or any subsequent owners, for any purpose other 
     than for conducting mineral activities in good faith, the 
     Secretary shall serve on all owners of interests in such 
     patented estate, in the manner prescribed for service of a 
     summons and complaint under the Federal Rules of Civil 
     Procedure, notice specifying such unauthorized use and 
     providing not more than 90 days in which such unauthorized 
     use must be terminated. The giving of such notice shall 
     constitute final agency action appealable by any owner of an 
     interest in such patented estate. The Secretary may exercise 
     the right of reentry as provided in paragraph (3) of this 
     subsection if such unauthorized use has not been terminated 
     in the time provided in this paragraph, and only after all 
     appeal rights have expired and any appeals of such notice 
     have been finally determined.
       (3) The Secretary may exercise the right of the United 
     States to reenter such patented estate by filing a 
     declaration of reentry in the office of the Bureau of Land 
     Management designated by the Secretary and recording such 
     declaration where the notice or certificate of location for 
     the patented claim or site is recorded under State law. Upon 
     the filing and recording of such declaration, all right, 
     title and interest in such patented estate shall revert to 
     the United States. Lands and interests in lands for which the 
     United States exercises its right of reentry under this 
     section shall remain open to the location of mining claims 
     and mill sites, unless withdrawn under other applicable law.
       (c) Patent Transition.--Notwithstanding any other provision 
     of law, the requirements of this subtitle (except the payment 
     of maintenance and location fees in accordance with sections 
     5702 and 5703) shall not apply to those patent applications 
     pending at the Department of the Interior as of September 30, 
     1995. Such patents shall be issued under or subject to the 
     general mining laws in effect prior to the date of enactment 
     of this subtitle.

     SEC. 5705. ROYALTY.

       (a) Reservation of Royalty.--
       (1) In general.--Production of locatable minerals 
     (including associated minerals) from any unpatented mining 
     claim (other than those from Federal lands to which 
     subsection 5704(c) applies) or any mining claim patented 
     under subsection 5704(a), including mineral concentrates and 
     products derived from locatable minerals, shall be subject to 
     the payment of a royalty of 2.5 percent on the Net Smelter 
     Return of all ores, minerals, metals, and materials mined and 
     removed and sold.
       (2) Waiver.--If the Secretary determines that the 
     Secretary's cost of accounting for and collecting a royalty 
     for any mineral exceeds or is likely to exceed the amount of 
     royalty to be collected, the Secretary shall waive such 
     royalty. The obligation to pay royalties hereunder shall 
     accrue only upon the sale of locatable minerals or mineral 
     products produced from a mining claim subject to such 
     royalty, and not upon the stockpiling of the same for future 
     processing.
       (3) Exemption.--Any mine with an annual Revenues Received 
     of less than $500,000 shall be exempt from the requirement to 
     pay a royalty under this section.
       (5)Revenues received.--All Revenues Received shall be 
     determined in accordance with generally accepted accounting 
     principles and practices consistently applied. Revenues 
     Received shall be determined by the accrual method.
       (7) Commingling.--The payor shall have the right to 
     commingle ore and minerals from the claim, group of claims, 
     or patent comprising an operation, with ore from other lands 
     and properties: Provided, however, That the payor shall 
     calculate from representative samples the average grade of 
     the ore before commingling. If concentrates are produced from 
     the commingled ores, the payor shall calculate from 
     representative samples calculating the average grade of the 
     ore, and calculating average recovery percentages the payor 
     shall use procedures accepted in the mining and metallurgical 
     industry suitable for the type of mining and processing 
     activity being conducted.
       (8) Effective date.--
       (A) In general.--The royalty required under this section 
     shall take effect with respect to production on or after the 
     first day of the first month following the date of enactment 
     of this subtitle.
       (C) Time for payment.--Any royalty payment attributable to 
     production during the first 15 calendar months after the date 
     of enactment of this subtitle shall be due on the date that 
     is 12 months after the date of enactment of this subtitle.
       (10) Split estates.--For circumstances where a claim, group 
     of claims or patent is subject to this section but does not 
     comprise the entirety of a mine, the Annual Revenues and 
     Costs of Produc- * * *
                                 ______


               BINGAMAN (AND DOMENICI) AMENDMENT NO. 3026

  Mr. DOMENICI (for Mr. Bingaman, for himself and Mr. Domenici) 
proposed an amendment to the bill S. 1357, supra; as follows:

       At the appropriate place in subtitle A of title VII, insert 
     the following new section:

     SEC.   . ELIMINATION OF REASONABLE COST REIMBURSEMENT FOR 
                   CERTAIN LEGAL FEES.

       Section 1861(v)(1)(R) (42 U.S.C. 1395x(v)(1)(R)) is amended 
     by striking ``section 1869(b)'' and inserting ``section 1869 
     (a) or (b)''.
                                 ______


                LOTTS (AND JEFFORDS) AMENDMENT NO. 3027

  Mr. DOMENICI (for Mr. Lott, for himself and Mr. Jeffords) proposed an 
amendment to the bill S. 1357, supra; as follows:

       On page 205, between lines 13 and 14, insert the following:

     SEC. 3005. AMENDMENTS TO THE CIVIL WAR BATTLEFIELD 
                   COMMEMORATIVE COIN ACT OF 1992.

       (a) Distribution and Use of Surcharges.--
       (1) In general.--Section 6 of the Civil War Battlefield 
     Commemorative Coin Act of 1992 (31 U.S.C. 5112 note) is 
     amended to read as follows:

     ``SEC. 6. DISTRIBUTION AND USE OF SURCHARGES.

       ``(a) Distribution.--An amount equal to $5,300,000 of the 
     surcharges received by the Secretary from the sale of coins 
     issued under this Act shall be promptly paid by the Secretary 
     to the Association for the Preservation of Civil War Sites, 
     Incorporated (hereafter in this Act referred to as the 
     `Association'), to be used for the acquisition of 
     historically significant and threatened Civil War sites 
     selected by the Association.
       ``(b) Civil war sites included.--In using amounts paid to 
     the Association under subsection (a), the Association may 
     spend--
       ``(1) not more than $500,000 to acquire sites at Malvern 
     hill, Virginia;
       ``(2) not more than $1,000,000 to acquire sites at Cornith, 
     Mississippi;
       ``(3) not more than $300,000 to acquire sites at Spring 
     Hill, Tennessee;
       ``(4) not more than $1,000,000 to acquire sites at 
     Winchester, Virginia;
       ``(5) not more than $500,000 to acquire sites at Resaca, 
     Georgia;
       ``(6) not more than $250,000 to acquire sites at Brice's 
     Cross Roads, Mississippi;
       ``(7)not more than $250,000 to acquire sites at Perryville, 
     Kentucky;
       ``(8) not more than $1,000,000 to acquire sites at Brandy 
     Station, Virginia;
       ``(9) not more than $250,000 to acquire sites at Kernstown, 
     Virginia; and
       ``(10) not more than $250,000 to acquire sites at Glendale, 
     Virginia.''.
       (2) Transfer of surcharges.--
       (A) To treasury.--Not later than 10 days after the date of 
     enactment of this Act, the Civil War Trust, formerly called 
     the Civil War Battlefield Foundation (hereafter in this 
     section referred to as the ``Foundation'') shall transfer to 
     the Secretary of the Treasury an amount equal to $5,300,000.
       (B) To the association.--Not later than 10 days after the 
     transfer under subparagraph (A) is completed, the Secretary 
     of the Treasury shall transfer to the Association an amount 
     equal to the amount transferred under subparagraph (A).
                                 ______


                BUMPERS (AND OTHERS) AMENDMENT NO. 3028

  Mr. BUMPERS (for himself, Mr. Bradley, Mrs. Murray, and Mr. Leahy) 
proposed an amendment to the bill S. 1357, supra; as follows:

       At the end of the bill add the following new title:

                      ``TITLE XIII--BUDGET PROCESS

       ``For purposes of the Congressional Budget Act of 1974, the 
     amounts realized from sales of assets shall not be scored 
     with respect to the level of budget authority, outlays or 
     revenues.''
                                 ______


                        BIDEN AMENDMENT NO. 3029

  Mr. BIDEN proposed an amendment to the bill S. 1357, supra; as 
follows:

       On page 1463, between lines 2 and 3, insert the following:

     SEC. 11042. AUTHORITY TO PAY PLOT OR INTERMENT ALLOWANCE FOR 
                   VETERANS BURIED IN STATE CEMETERIES.

       Section 2303 of title 38, United States Code, is amended by 
     adding at the end the following:

[[Page S 16149]]

       ``(c) Subject to the availability of funds appropriated, in 
     addition to the benefits provided for under section 2302 of 
     this title, section 2307 of this title, and subsection (a) of 
     this section, in the case of a veteran who--
       ``(1) is eligible for burial in a national cemetery under 
     section 2402 of this title, and
       ``(2) is buried (without charge for the cost of a plot or 
     interment) in a cemetery, or a section of a cemetery, that 
     (A) is used solely for the interment of persons eligible for 
     burial in a national cemetery, and (b) is owned by a State or 
     by an agency or political subdivision of a State,

     the Secretary may pay to such State, agency, or political 
     subdivision the sum of $150 as a plot or interment allowance 
     for such veteran, provided that payment was not made under 
     clause (1) of subsection (b) of this section.''.
                                 ______


                BUMPERS (AND OTHERS) AMENDMENT NO. 3030

  Mr. BUMPERS (for himself, Mr. Bradley, Mr. Lautenberg, and Mr. Leahy) 
proposed an amendment to the bill S. 1357, supra; as follows:

       Strike ``for'' on line 4 of page 369 through ``thereby'' on 
     line 19 on page 395.
                                 ______


                       BRADLEY AMENDMENT NO. 3031

  Mr. BRADLEY proposed an amendment to the bill S. 1357, supra; as 
follows:

       On page 1622, beginning on line 8, strike all through page 
     1636, line 12, and insert the following:

     SEC. 12301. MODIFICATIONS TO TIME EXTENSION PROVISIONS FOR 
                   CLOSELY HELD BUSINESSES.

       (a) Increased Cap on 4 Percent Interest Rate.--Subparagraph 
     (A) of section 6601(j)(2) (relating to 4-percent portion) is 
     amended by striking ``$345,800'' and inserting ``$780,800''.
       (b) Partnership, Etc., Restrictions Lifted.--Subparagraph 
     (A) of section 6166(b)(7) (relating to partnership interests 
     and stock which is not readily tradable) is amended to read 
     as follows:
       ``(A) In general.--If the executor elects the benefits of 
     this paragraph (at such time and in such manner as the 
     Secretary shall by regulations prescribe), then for purposes 
     of paragraph (1)(B)(i) or (1)(C)(i) (whichever is 
     appropriate) and for purposes of subsection (c), any capital 
     interest in a partnership and any non-readily-tradable stock 
     which (after the application of paragraph (2)) is treated as 
     owned by the decedent shall be treated as included in 
     determining the value of the decedent's gross estate.''
       (c) Holding Company Restrictions Lifted.--Paragraph (8) of 
     section 6166(b) (relating to stock in holding company treated 
     as business company stock in certain cases) is amended--
       (1) by striking subparagraph (A) and inserting the 
     following new subparagraph:
       ``(A) In general.--If the executor elects the benefits of 
     this paragraph, then for purposes of this section, the 
     portion of the stock of any holding company which represents 
     direct ownership (or indirect ownership through 1 or more 
     other holding companies) by such company in a business 
     company shall be deemed to be stock in such business 
     company.'',
       (2) by striking subparagraph (B),
       (3) by striking ``any corporation'' in subparagraph (D)(i) 
     and inserting ``any entity'', and
       (4) by redesigning subparagraphs (C) and (D) as 
     subparagraphs (B) and (C), respectively.
       (b) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying after December 31, 
     1995.
       One page 1639, beginning on line 10, strike all through 
     page 1649, line 9, and insert the following:

     SEC. 12304. OPPORTUNITY TO CORRECT CERTAIN FAILURES UNDER 
                   SECTION 2032A.

       (a) General Rule.--Paragraph (3) of section 2032A(d) 
     (relating to modification of election and agreement to be 
     permitted) is amended to read as follows:
       ``(3) Modification of election and agreement to be 
     permitted.--The Secretary shall prescribe procedures which 
     provide that in any case in which the executor makes an 
     election under paragraph (1) (and submits the agreement 
     referred to in paragraph (2)) within the time prescribed 
     therefor but)--
       ``(A) the notice of election, as filed, does not contain 
     all required information, or
       ``(B) signatures of 1 or more persons required to enter 
     into the agreement described in paragraph (2) are not 
     included on the agreement as filed, or the agreement does not 
     contain all required information,

     the executor will have a reasonable period of time (not 
     exceeding 90 days) after notification of such failures to 
     provide such information or signatures.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to the estates of decedents dying after the date 
     of the enactment of this Act.
                                 ______


                BRADLEY (AND HARKIN) AMENDMENT NO. 3032

  Mr. BRADLEY (for himself and Mr. Harkin) proposed an amendment to the 
bill S. 1357, supra, as follows:

       On page 1772, after line 23, add the following new section:

     SEC. 12809. DISALLOWANCE OF DEDUCTIONS FOR ADVERTISING AND 
                   PROMOTIONAL EXPENSES RELATING TO TOBACCO 
                   PRODUCT USE.

       (a) In General.--Part IX of subchapter B of chapter 1 of 
     subtitle A (relating to items not deductible) is amended by 
     adding at the end the following new section:

     ``SEC. 280I. DISALLOWANCE OF DEDUCTION FOR TOBACCO 
                   ADVERTISING AND PROMOTIONAL EXPENSES.

       No deduction shall be allowed under this chapter for 
     expenses relating to advertising or promoting cigars, 
     cigarettes, smokeless tobacco, pipe tobacco, or any similar 
     tobacco product. For purposes of this section, any term used 
     in this section which is also used in section 5702 shall have 
     the same meaning given such term by section 5702.''
       (b) Use of Funds for Medicaid Program.--Section 2121(b) of 
     the Social Security Act, as added by section 7901 of this Act 
     is amended by adding at the end the following new paragraph:
       ``(3) Appropriation of additional amounts for pool 
     amounts.--For purposes of paragraph (1), the pool amount for 
     each fiscal year is increased by an amount that is hereby 
     authorized to be appropriated and is appropriated equal to 
     the increase in revenues for such year as estimated by the 
     Secretary of the Treasury resulting from the amendment made 
     by section 12809(a) of the Balanced Budget Reconciliation Act 
     of 1995.''
       (c) Conforming Amendment.--The table of sections for such 
     part IX is amended by adding after the item relating to 
     section 280H the following new item:

``Sec. 280I. Disallowance of deduction for tobacco advertising and 
              promotion expenses.''

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.
                                 ______


                 DORGAN (AND OTHERS) AMENDMENT NO. 3033

  Mr. DORGAN (for himself, Mr. Harkin, and Mr. Kennedy) proposed an 
amendment to the bill S. 1357, supra, as follows:

                           amendment no. 3033

       Strike section 12141 and insert:

     SEC. 12141. CAPITAL GAINS DEDUCTION.

       (a) General Rule.--Part I of subchapter P of chapter 1 
     (relating to treatment of capital gains) is amended by 
     redesignating section 1202 as section 1203 and by inserting 
     after section 1201 the following new section:

     ``SEC. 1202. CAPITAL GAINS DEDUCTION FOR INDIVIDUALS.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a deduction for the taxable year an 
     amount equal to the lesser of--
       ``(1) the qualified capital gain of the taxpayer for the 
     taxable year, or
       ``(2) the excess of--
       ``(A) $250,000, over
       ``(B) the aggregate amount allowable as a deduction under 
     this section for prior taxable years.
       ``(b) Qualified Capital Gain.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified capital gain' means 
     the lesser of--
       ``(A) the net capital gain for the taxable year, or
       ``(B) gain for the taxable year from sales or exchanges 
     after October 13, 1995, of capital assets held more than 10 
     years.
       ``(2) Sales between related parties.--Gains from sales and 
     exchanges to any related person (within the meaning of 
     section 267(b) or 707(b)(1)) shall not be taken into account 
     in determining qualified capital gain.
       ``(3) Special rule for section 1250 property.--Solely for 
     purposes of this section, in applying section 1250 to any 
     disposition of section 1250 property, all depreciation 
     adjustments in respect of the property shall be treated as 
     additional depreciation.
       ``(c) Section Not To Apply to Certain Taxpayers.--No 
     deduction shall be allowed under this section to--
       ``(1) an individual with respect to whom a deduction under 
     section 151 is allowable to another taxpayer for a taxable 
     year beginning in the calendar year in which such 
     individual's taxable year begins,
       ``(2) a married individual (within the meaning of section 
     7703) filing a separate return for the taxable year, or
       ``(3) an estate or trust.
       ``(d) Special Rules.--
       ``(1) Joint returns.--The amount of the qualified capital 
     gain taken into account under this section on a joint return 
     for any taxable year shall be allocated equally between the 
     spouses for purposes of applying the limitation under 
     subsection (a)(2) for any succeeding taxable year.
       ``(2) Special rule for pass-thru entities.--
       ``(A) In general.--In applying this section with respect to 
     any pass-thru entity, the determination of when the sale or 
     exchange occurs shall be made at the entity level.
       ``(B) Pass-thru entity defined.--For purposes of 
     subparagraph (A), the term `pass-thru entity' means--
       ``(i) a regulated investment company,
       ``(ii) a real estate investment trust,
       ``(iii) an S corporation,
       ``(iv) a partnership,
       ``(v) an estate or trust, and
       ``(vi) a common trust fund.
       ``(e) Transitional Rule.--
       ``(1) In general.--In the case of a taxable year which 
     includes October 14, 1995, the 

[[Page S 16150]]
     amount taken into account as the net capital gain under subsection (a) 
     shall not exceed the net capital gain determined by only 
     taking into account gains and losses properly taken into 
     account for the portion of the taxable year on or after 
     October 14, 1995.''
       (b) Coordination With Maximum Capital Gains Rate.--
     Subsection (h) of section 1 (relating to maximum capital 
     gains rate) is amended to read as follows:
       ``(h) Maximum Capital Gains Rate.--
       ``(1) In general.--If a taxpayer has a net capital gain for 
     any taxable year, then the tax imposed by this section shall 
     not exceed the sum of--
       ``(A) a tax computed at the rates and in the same manner as 
     if this subsection had not been enacted on the greater of--
       ``(i) taxable income reduced by the amount of the net 
     capital gain, or
       ``(ii) the amount of taxable income taxed at a rate below 
     28 percent, plus
       ``(B) a tax of 28 percent of the amount of taxable income 
     in excess of the amount determined under subparagraph (A).
       ``(2) Coordination with other provisions.--For purposes of 
     paragraph (1), the amount of the net capital gain shall be 
     reduced (but not below zero) by the sum of--
       ``(A) the amount of the qualified capital gain (as defined 
     in section 1202(b)) for the taxable year to the extent taken 
     into account under section 1202(a) for the taxable year, plus
       ``(B) the amount which the taxpayer elects to take into 
     account as investment income for the taxable year under 
     section 163(d)(4)(B)(iii).''
       (c) Deduction Allowable in Computing Adjusted Gross 
     Income.--Subsection (a) of section 62 is amended by inserting 
     after paragraph (15) the following new paragraph:
       ``(16) Long-term capital gains.--The deduction allowed by 
     section 1202.''
       (d) Alternative Minimum Tax.--
       (1) Half of deduction disallowed.--Section 56(b)(1) 
     (relating to limitations on deductions of individuals) is 
     amended by adding at the end the following new subparagraph:
       ``(G) Capital gains deduction reduced.--In determining the 
     deduction allowable under section 1202, section 1202(a) shall 
     be applied by substituting `25 percent' for `50 percent' ''.
       (2) Conforming amendment.--Section 57(a)(7) is amended by 
     striking ``1202'' and inserting ``1203''.
       (e) Treatment of Collectibles.--
       (1) In general.--Section 1222 is amended by inserting after 
     paragraph (11) the following new paragraph:
       ``(12) Special rule for collectibles.--
       ``(A) In general.--Any gain or loss from the sale or 
     exchange of a collectible shall be treated as a short-term 
     capital gain or loss (as the case may be), without regard to 
     the period such asset was held. The preceding sentence shall 
     apply only to the extent the gain or loss is taken into 
     account in computing taxable income.
       ``(B) Treatment of certain sales of interest in 
     partnership, etc.--For purposes of subparagraph (A), any gain 
     from the sale or exchange of an interest in a partnership, S 
     corporation, or trust which is attributable to unrealized 
     appreciation in the value of collectibles held by such entity 
     shall be treated as gain from the sale or exchange of a 
     collectible. Rules similar to the rules of section 751(f) 
     shall apply for purposes of the preceding sentence.
       ``(C) Collectible.--For purposes of this paragraph, the 
     term `collectible' means any capital asset which is a 
     collectible (as defined in section 408(m) without regard to 
     paragraph (3) thereof).''
       (2) Charitable deduction not affected.--
       (A) Paragraph (1) of section 170(e) is amended by adding at 
     the end the following new sentence: ``For purposes of this 
     paragraph, section 1222 shall be applied without regard to 
     paragraph (12) thereof (relating to special rule for 
     collectibles).''
       (B) Clause (iv) of section 170(b)(1)(C) is amended by 
     inserting before the period at the end the following: ``and 
     section 1222 shall be applied without regard to paragraph 
     (12) thereof (relating to special rule for collectibles)''.
       (f) Technical and Conforming Changes.--
       (1) Clause (iii) of section 163(d)(4)(B) is amended to read 
     as follows:
       ``(iii) the sum of--

       ``(I) the portion of the net capital gain referred to in 
     clause (ii)(II) (or, if lesser, the net capital gain referred 
     to in clause (ii)(I)) taken into account under section 1202, 
     reduced by the amount of the deduction allowed with respect 
     to such gain under section 1202, plus
       ``(II) so much of the gain described in subclause (I) which 
     is not taken into account under section 1202 and which the 
     taxpayer elects to take into account under this clause.''

       (2) Subparagraph (B) of section 172(d)(2) is amended to 
     read as follows:
       ``(B) the deduction under section 1202 and the exclusion 
     under section 1203 shall not be allowed.''
       (3) The last sentence of section 453A(c)(3) is amended by 
     striking all that follows ``long-term capital gain,'' and 
     inserting ``the maximum rate on net capital gain under 
     section 1201 or the deduction under section 1202 and the 
     exclusion under section 1203 (whichever is appropriate) shall 
     be taken into account.''
       (4) 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 from the sale or exchange of capital assets held for 
     more than 1 year or gain described in section 1203(a), proper 
     adjustment shall be made for any deduction allowable to the 
     estate or trust under section 1202 (relating to deduction for 
     excess of capital gains over capital losses) or for the 
     exclusion allowable to the estate or trust under section 1203 
     (relating to exclusion for gain from certain small business 
     stock). In the case of a trust, the deduction allowed by this 
     subsection shall be subject to section 681 (relating to 
     unrelated business income).''
       (5) The last sentence of section 643(a)(3) is amended to 
     read as follows: ``The deduction under section 1202 (relating 
     to deduction of excess of capital gains over capital losses) 
     and the exclusion under section 1203 (relating to exclusion 
     for gain from certain small business stock) shall not be 
     taken into account.''
       (6) Subparagraph (C) of section 643(a)(6) is amended by 
     inserting ``(i)'' before ``there shall'' and by inserting 
     before the period ``, and (ii) the deduction under section 
     1202 (relating to capital gains deduction) and the exclusion 
     under section 1203 (relating to exclusion for gain from 
     certain small business stock) shall not be taken into 
     account''.
       (7) Paragraph (4) of section 691(c) is amended inserting 
     ``1203,'' after ``1202,''.
       (8) The second sentence of section 871(a)(2) is amended by 
     inserting ``or 1203'' after ``section 1202''.
       (9)(A) Paragraph (2) of section 904(b) is amended by 
     striking subparagraph (A), by redesignating subparagraph (B) 
     as subparagraph (A), and by inserting after subparagraph (A) 
     (as so redesignated) the following new subparagraph:
       ``(B) Other taxpayers.--In the case of a taxpayer other 
     than a corporation, taxable income from sources outside the 
     United States shall include gain from the sale or exchange of 
     capital assets only to the extent of foreign source capital 
     gain net income.''
       (B) Subparagraph (A) of section 904(b)(2), as so 
     redesignated, is amended--
       (i) by striking all that precedes clause (i) and inserting 
     the following:
       ``(A) Corporations.--In the case of a corporation--'', and
       (ii) by striking in clause (i) ``in lieu of applying 
     subparagraph (A),''.
       (C) Paragraph (3) of section 904(b) is amended by striking 
     subparagraphs (D) and (E) and inserting the following new 
     subparagraph:
       ``(D) Rate differential portion.--The rate differential 
     portion of foreign source net capital gain, net capital gain, 
     or the excess of net capital gain from sources within the 
     United States over net capital gain, as the case may be, is 
     the same proportion of such amount as the excess of the 
     highest rate of tax specified in section 11(b) over the 
     alternative rate of tax under section 1201(a) bears to the 
     highest rate of tax specified in section 11(b).''
       (D) Clause (v) of section 593(b)(2)(D) is amended--
       (i) by striking ``if there is a capital gain rate 
     differential (as defined in section 904(b)(3)(D)) for the 
     taxable year,'', and
       (ii) by striking ``section 904(b)(3)(E)'' and inserting 
     ``section 904(b)(3)(D)''.
       (10) The last sentence of section 1044(d) is amended by 
     striking ``1202'' and inserting ``1203''.
       (11)(A) Paragraph (2) of section 1211(b) is amended to read 
     as follows:
       ``(2) the sum of--
       ``(A) the excess of the net short-term capital loss over 
     the net long-term capital gain, and
       ``(B) one-half of the excess of the net long-term capital 
     loss over the net short-term capital gain.''
       (B) So much of paragraph (2) of section 1212(b) as precedes 
     subparagraph (B) thereof is amended to read as follows:
       ``(2) Special rules.--
       ``(A) Adjustments.--
       ``(i) For purposes of determining the excess referred to in 
     paragraph (1)(A), there shall be treated as short-term 
     capital gain in the taxable year an amount equal to the 
     lesser of--

       ``(I) the amount allowed for the taxable year under 
     paragraph (1) or (2) of section 1211(b), or
       ``(II) the adjusted taxable income for such taxable year.

       ``(ii) For purposes of determining the excess referred to 
     in paragraph (1)(B), there shall be treated as short-term 
     capital gain in the taxable year an amount equal to the sum 
     of--

       ``(I) the amount allowed for the taxable year under 
     paragraph (1) or (2) of section 1211(b) or the adjusted 
     taxable income for such taxable year, whichever is the least, 
     plus
       ``(II) the excess of the amount described in subclause (I) 
     over the net short-term capital loss (determined without 
     regard to this subsection) for such year.''

       (C) Subsection (b) of section 1212 is amended by adding at 
     the end the following new paragraph:
       ``(3) Transitional rule.--In the case of any amount which, 
     under this subsection and section 1211(b) (as in effect for 
     taxable years beginning before January 1, 1996), is treated 
     as a capital loss in the first taxable year beginning after 
     December 31, 1995, paragraph (2) and section 1211(b) (as so 
     in effect) shall apply (and paragraph (2) and section 1211(b) 
     as in effect for taxable years beginning after December 31, 
     1995, shall not apply) to the extent such amount exceeds the 
     total 

[[Page S 16151]]
     of any capital gain net income (determined without regard to this 
     subsection) for taxable years beginning after December 31, 
     1995.''
       (12) Paragraph (1) of section 1402(i) is amended by 
     inserting ``, and the deduction provided by section 1202 and 
     the exclusion provided by section 1203 shall not apply'' 
     before the period at the end thereof.
       (13) Subsection (e) of section 1445 is amended--
       (A) in paragraph (1) by striking ``35 percent (or, to the 
     extent provided in regulations, 28 percent)'' and inserting 
     ``28 percent (or, to the extent provided in regulations, 19.8 
     percent)'', and
       (B) in paragraph (2) by striking ``35 percent'' and 
     inserting ``28 percent''.
       (14)(A) The second sentence of section 7518(g)(6)(A) is 
     amended--
       (i) by striking ``during a taxable year to which section 
     1(h) or 1201(a) applies'', and
       (ii) by striking ``28 percent (34 percent in the case of a 
     corporation'' and inserting ``19.8 percent (28 percent in the 
     case of a corporation or a taxpayer who has exceeded the 
     limitation under section 1202(a)(2)''.
       (B) The second sentence of section 607(h)(6)(A) of the 
     Merchant Marine Act, 1936 is amended--
       (i) by striking ``during a taxable year to which section 
     1(h) or 1201(a) of such Code applies'', and
       (ii) by striking ``28 percent (34 percent in the case of a 
     corporation'' and inserting ``19.8 percent (28 percent in the 
     case of a corporation or a taxpayer who has exceeded the 
     limitation under section 1202(a)(2)''.
       (15) Section 1203, as redesignated by subsection (a), is 
     amended by adding at the end the following new subsection:
       ``(l) Cross Reference.--

  ``For treatment of eligible gain not excluded under subsection (a), 
see section 1202.''

       (f) Clerical Amendment.--The table of sections for part I 
     of subchapter P of chapter 1 is amended by striking the item 
     relating to section 1202 and by inserting after the item 
     relating to section 1201 the following new items:

``Sec. 1202. Capital gains deduction.
``Sec. 1203. 50-percent exclusion for gain from certain small business 
              stock.''

       (g) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years ending after October 13, 1995.
       (2) Collectibles.--The amendments made by subsection (e) 
     shall apply to sales and exchanges after October 13, 1995.
       (3) Use of long-term losses.--The amendments made by 
     subsection (f)(11) shall apply to taxable years beginning 
     after December 31, 1995.
       (4) Withholding.--The amendment made by subsection (f)(13) 
     shall apply only to amounts paid after the date of the 
     enactment of this Act.
       On page 1703, between lines 17 and 18, insert:
       (g) Citizens Becoming Covered Expatriates To be Taxed as 
     Residents Upon Return to United States.--Paragraph (3) of 
     section 7701(b) is amended by adding at the end the following 
     new subparagraph:
       ``(E) Special rule for covered Expatriates.--
     Notwithstanding any other provision of this paragraph, in the 
     case of an individual who is treated as a covered expatriate 
     under section 877A by reason of relinquishing the 
     individual's United States citizenship, such individual shall 
     be treated as meeting the substantial presence test of this 
     paragraph with respect to any calendar year if the individual 
     is present in the United States for more than 30 days during 
     the calendar year. The preceding sentence shall not apply to 
     the extent that the Secretary determines its application 
     would contravene any treaty of the United States.''

     SEC.   . SENSE OF THE SENATE.

       It is the sense of the Senate that (a) the Senate conferees 
     should not recede to the House on the provisions of this 
     chapter eliminating the tax loophole for billionaires and 
     other wealthy individuals who renounce their United States 
     citizenship in order to avoid their fair share of United 
     States taxes; and (b) the Senate reaffirms its commitment to 
     eliminate this tax loophole.
                                 ______


                FEINGOLD (AND OTHERS) AMENDMENT NO. 3034

  Mr. FEINGOLD (for himself, Mr. Wellstone, and Mr. Bumpers) proposed 
an amendment to the bill S. 1357, supra; as follows:

       At the end of chapter 8 of subtitle I of title XII add the 
     following new section:

     SEC.   . CERTAIN MINERALS NOT ELIGIBLE FOR PERCENTAGE 
                   DEPLETION.

       (a) General Rule.--
       (1) Paragraph (1) of section 613(b) (relating to percentage 
     depletion rates) is amended--
       (A) by striking ``and uranium'' in subparagraph (A), and
       (B) by striking ``asbestos,'', ``lead,'', and ``mercury,'' 
     in subparagraph (B).
       (2) Subparagraph (A) of section 613(b)(3) is amended by 
     inserting ``other than lead, mercury, or uranium'' after 
     ``metal mines''.
       (3) Paragraph (4) of section 613(b) is amended by striking 
     ``asbestos (if paragraph (1)(B) does not apply),''.
       (4) Paragraph (7) of section 613(b) 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 
     inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) mercury, uranium, lead, and asbestos.''
       (b) Conforming Amendments.--Subparagraph (D) of section 
     613(c)(4) is amended by striking ``lead,'' and ``uranium,''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.
                                 ______


                 SIMON (AND OTHERS) AMENDMENT NO. 3035

  Mr. SIMON (for himself, Mr. Stevens, and Mr. Breaux) proposed an 
amendment to the bill S. 1357, supra; as follows:

       On page 1771, line 25, strike ``1995'' and insert ``1997''.
       On page 1772, line 3, strike ``1995'' and insert ``1997''.
                                 ______


                      WELLSTONE AMENDMENT NO. 3036

  Mr. WELLSTONE proposed an amendment to the bill S. 1357, supra; as 
follows:

       Strike sections 5930, 5931, and 5932.
                                 ______


                       D'AMATO AMENDMENT NO. 3037

  Mr. DOMENICI (for Mr. D'Amato) proposed an amendment to the bill S. 
1357, supra; as follows:

       On page 187, line 3: and on page 187, line 22, strike ``5'' 
     and insert ``10.''
                                 ______


                        ROTH AMENDMENT NO. 3038

  Mr. ROTH proposed an amendment to the bill S. 1357, supra; as 
follows:

       On page 541, strike line 22, and all that follows through 
     page 542, line 2, and insert:

       ``(II) October 1, 1995, and before October 1, 1996, `c' is 
     equal to 1.65;
       ``(III) October 1, 1996, and before October 1, 1997, `c' is 
     equal to 1.48;
       ``(IV) October 1, 1997, and before October 1, 1998, `c' is 
     equal to 1.33; and
       ``(V) October 1, 1998, and before October 1, 2002, `c' is 
     equal to 1.23.''.

       On page 548, between lines 2 and 3, insert the following 
     new section:

     SEC. 7019. NURSE AIDE TRAINING IN SKILLED NURSING FACILITIES 
                   SUBJECT TO EXTENDED SURVEY AND CERTAIN OTHER 
                   CONDITIONS.

       Section 1819(f)(2)(B)(iii)(I) (42 U.S.C. 1395i-
     3(f)(2)(B)(iii)(I)) is amended, in the matter preceding item 
     (a), by striking ``by or in a skilled nursing facility'' and 
     inserting ``by a skilled nursing facility (or in such a 
     facility, unless the State determines that there is no other 
     such program offered within a reasonable distance, provides 
     notice of the approval to the State long term care ombudsman, 
     and assures, through an oversight effort, that an adequate 
     environment exists for such a program)''.
       On page 548, strike line 3, and all that follows through 
     page 568, line 13, and insert the following:

          Subchapter B--Payments to Skilled Nursing Facilities

                   PART I--PROSPECTIVE PAYMENT SYSTEM

     SEC. 7025. PROSPECTIVE PAYMENT SYSTEM FOR SKILLED NURSING 
                   FACILITIES.

       Title XVIII (42 U.S.C. 1395 et seq.) is amended by adding 
     the following new section after section 1888:


      ``prospective payment system for skilled nursing facilities

       ``Sec. 1889. (a) Establishment of System.--Notwithstanding 
     any other provision of this title, the Secretary shall 
     establish a prospective payment system under which fixed 
     payments for episodes of care shall be made, instead of 
     payments determined under section 1861(v), section 1888, or 
     section 1888A, to skilled nursing facilities for all extended 
     care services furnished during the benefit period established 
     under section 1812(a)(2). Such payments shall constitute 
     payment for capital costs and all routine and non-routine 
     service costs covered under this title that are furnished to 
     individuals who are inpatients of skilled nursing facilities 
     during such benefit period, except for physicians' services. 
     The payment amounts shall vary depending on case-mix, patient 
     acuity, and such other factors as the Secretary determines 
     are appropriate. The prospective payment system shall apply 
     for cost reporting periods (or portions of cost reporting 
     periods) beginning on or after October 1, 1997.
       ``(b) 90 Percent of Levels Otherwise In Effect.--The 
     Secretary shall establish the prospective payment amounts 
     under subsection (a) at levels such that, in the Secretary's 
     estimation, the amount of total payments under this title 
     shall not exceed 90 percent of the amount of payments that 
     would have been made under this title for all routine and 
     non-routine services and capital expenditures if this section 
     had not been enacted.
       ``(c) Adjustment in Rates to Take Into Account Beneficiary 
     Cost-Sharing.--The Secretary shall reduce the prospective 
     payment rates established under this section to take into 
     account the beneficiary coinsurance amount required under 
     section 1813(a)(3).''.
     
[[Page S 16152]]


                    PART II--INTERIM PAYMENT SYSTEM

     SEC. 7031. PAYMENTS FOR ROUTINE SERVICE COSTS.

       (a) Clarification of Definition of Routine Service Costs.--
     Section 1888 (42 U.S.C. 1395yy) is amended by adding at the 
     end the following new subsection:
       ``(e) For purposes of this section, the `routine service 
     costs' of a skilled nursing facility are all costs which are 
     attributable to nursing services, room and board, 
     administrative costs, other overhead costs, and all other 
     ancillary services (including supplies and equipment), 
     excluding costs attributable to covered non-routine services 
     subject to payment amounts under section 1888A.''.
       (b) Conforming Amendment.--Section 1888 (42 U.S.C. 1395yy) 
     is amended in the heading by inserting ``and certain 
     ancillary'' after ``service''.

     SEC. 7032. COST-EFFECTIVE MANAGEMENT OF COVERED NON-ROUTINE 
                   SERVICES.

       (a) In General.--Title XVIII (42 U.S.C. 1395 et seq.), as 
     amended by section 7025, is amended by inserting after 
     section 1888 the following new section:


``cost-effective management of covered non-routine services of skilled 
                           nursing facilities

       ``Sec. 1888A. (a) Definitions.--For purposes of this 
     section:
       ``(1) Covered non-routine services.--The term `covered non-
     routine services' means post-hospital extended care services 
     consisting of any of the following:
       ``(A) Physical or occupational therapy or speech-language 
     pathology services, or respiratory therapy.
       ``(B) Prescription drugs.
       ``(C) Complex medical equipment.
       ``(D) Intravenous therapy and solutions (including enteral 
     and parenteral nutrients, supplies, and equipment).
       ``(E) Radiation therapy.
       ``(F) Diagnostic services, including laboratory, radiology 
     (including computerized tomography services and imaging 
     services), and pulmonary services.
       ``(2) SNF market basket percentage increase.--The term `SNF 
     market basket percentage increase' for a fiscal year means a 
     percentage equal to input price changes in routine service 
     costs for the year under section 1888(a).
       ``(3) Stay.--The term `stay' means, with respect to an 
     individual who is a resident of a skilled nursing facility, a 
     period of continuous days during which the facility provides 
     extended care services for which payment may be made under 
     this title for the individual during the individual's spell 
     of illness.
       ``(b) New Payment Method for Covered Non-Routine Services 
     Beginning in Fiscal Year 1996.--
       ``(1) In general.--The payment method established under 
     this section shall apply with respect to covered non-routine 
     services furnished during cost reporting periods (or portions 
     of cost reporting periods) beginning on or after October 1, 
     1995.
       ``(2) Interim payments.--Subject to subsection (c), a 
     skilled nursing facility shall receive interim payments under 
     this title for covered non-routine services furnished to an 
     individual during cost reporting periods (or portions of cost 
     reporting periods) described in paragraph (1) in an amount 
     equal to the reasonable cost of providing such services in 
     accordance with section 1861(v). The Secretary may adjust 
     such payments if the Secretary determines (on the basis of 
     such estimated information as the Secretary considers 
     appropriate) that payments to the facility under this 
     paragraph for a cost reporting period would substantially 
     exceed the cost reporting period amount determined under 
     subsection (c)(2).
       ``(3) Responsibility of skilled nursing facility to manage 
     billings.--
       ``(A) Clarification relating to part a billing.--In the 
     case of a covered non-routine service furnished to an 
     individual who (at the time the service is furnished) is a 
     resident of a skilled nursing facility who is entitled to 
     coverage under section 1812(a)(2) for such service, the 
     skilled nursing facility shall submit a claim for payment 
     under this title for such service under part A (without 
     regard to whether or not the item or service was furnished by 
     the facility, by others under arrangement with them made by 
     the facility, under any other contracting or consulting 
     arrangement, or otherwise).
       ``(B) Part b billing.--In the case of a covered non-routine 
     service furnished to an individual who (at the time the 
     service is furnished) is a resident of a skilled nursing 
     facility who is not entitled to coverage under section 
     1812(a)(2) for such service but is entitled to coverage under 
     part B for such service, the skilled nursing facility shall 
     submit a claim for payment under this title for such service 
     under part B (without regard to whether or not the item or 
     service was furnished by the facility, by others under 
     arrangement with them made by the facility, under any other 
     contracting or consulting arrangement, or otherwise).
       ``(C) Maintaining records on services furnished to 
     residents.--Each skilled nursing facility receiving payments 
     for extended care services under this title shall document on 
     the facility's cost report all covered non-routine services 
     furnished to all residents of the facility to whom the 
     facility provided extended care services for which payment 
     was made under part A during a fiscal year (beginning with 
     fiscal year 1996) (without regard to whether or not the 
     services were furnished by the facility, by others under 
     arrangement with them made by the facility, under any other 
     contracting or consulting arrangement, or otherwise).
       ``(c) No Payment in Excess of Product of Per Stay Amount 
     and Number of Stays.--
       ``(1) In general.--If a skilled nursing facility has 
     received aggregate payments under subsection (b) for covered 
     non-routine services during a cost reporting period beginning 
     during a fiscal year in excess of an amount equal to the cost 
     reporting period amount determined under paragraph (2), the 
     Secretary shall reduce the payments made to the facility with 
     respect to such services for cost reporting periods beginning 
     during the following fiscal year in an amount equal to such 
     excess. The Secretary shall reduce payments under this 
     subparagraph at such times and in such manner during a fiscal 
     year as the Secretary finds necessary to meet the requirement 
     of this subparagraph.
       ``(2) Cost reporting period amount.--The cost reporting 
     period amount determined under this subparagraph is an amount 
     equal to the product of--
       ``(A) the per stay amount applicable to the facility under 
     subsection (d) for the period; and
       ``(B) the number of stays beginning during the period for 
     which payment was made to the facility for such services.
       ``(3) Prospective reduction in payments.--In addition to 
     the process for reducing payments described in paragraph (1), 
     the Secretary may reduce payments made to a facility under 
     this section during a cost reporting period if the Secretary 
     determines (on the basis of such estimated information as the 
     Secretary considers appropriate) that payments to the 
     facility under this section for the period will substantially 
     exceed the cost reporting period amount for the period 
     determined under this paragraph.
       ``(d) Determination of Facility Per Stay Amount.--
       ``(1) Amount for fiscal year 1996.--
       ``(A) In general.--
       ``(i) Establishment.--Except as provided in subparagraph 
     (B) and clause (ii), the Secretary shall establish a per stay 
     amount for each nursing facility for the 12-month cost 
     reporting period beginning during fiscal year 1996 that is 
     the facility-specific stay amount for the facility (as 
     determined under subsection (e)) for the last 12-month cost 
     reporting period ending on or before September 30, 1994, 
     increased (in a compounded manner) by the SNF market basket 
     percentage increase (as defined in subsection (a)(2)) for 
     each fiscal year through fiscal year 1996.
       ``(ii) Adjustment if implementation delayed.--If the amount 
     under clause (i) is not established prior to the cost 
     reporting period described in clause (i), the Secretary shall 
     adjust such amount for stays after such amount is established 
     in such a manner so as to recover any amounts in excess of 
     the amounts which would have been paid for stays before such 
     date if the amount had been in effect for such stays.
       ``(B) Facilities not having 1994 cost reporting period.--In 
     the case of a skilled nursing facility for which payments 
     were not made under this title for covered non-routine 
     services for the last 12-month cost reporting period ending 
     on or before September 30, 1994, the per stay amount for the 
     12-month cost reporting period beginning during fiscal year 
     1996 shall be the average of all per stay amounts determined 
     under subparagraph (A).
       ``(2) Amount for fiscal year 1997 and subsequent fiscal 
     years.--The per stay amount for a skilled nursing facility 
     for a 12-month cost reporting period beginning during a 
     fiscal year after 1996 is equal to the per stay amount 
     established under this subsection for the 12-month cost 
     reporting period beginning during the preceding fiscal year 
     (without regard to any adjustment under paragraph 
     (1)(A)(ii)), increased by the greater of--
       ``(A) the SNF market basket percentage increase for such 
     subsequent fiscal year minus 2.5 percentage points; or
       ``(B) 1.2 percent (1.1 percent for fiscal years after 
     1997).
       ``(e) Determination of Facility-Specific Stay Amounts.--The 
     `facility-specific stay amount' for a skilled nursing 
     facility for a cost reporting period is--
       ``(1) the sum of--
       ``(A) the amount of payments made to the facility under 
     part A during the period which are attributable to covered 
     non-routine services furnished during a stay; and
       ``(B) the Secretary's best estimate of the amount of 
     payments made under part B during the period for covered non-
     routine services furnished to all residents of the facility 
     to whom the facility provided extended care services for 
     which payment was made under part A during the period 
     (without regard to whether or not the services were furnished 
     by the facility, by others under arrangement with them made 
     by the facility under any other contracting or consulting 
     arrangement, or otherwise), as estimated by the Secretary; 
     divided by
       ``(2) the average number of days per stay for all residents 
     of the skilled nursing facility.
       ``(f) Intensive Nursing or Therapy Needs.--
       ``(1) In general.--In applying subsection (b) to covered 
     non-routine services furnished during a stay beginning during 
     a cost reporting period to a resident of a skilled nursing 
     facility who requires intensive nursing or therapy services, 
     the per stay amount for such resident shall be the per stay 
     amount developed under paragraph (2) instead of the per stay 
     amount determined under subsection (d)(1)(A). 

[[Page S 16153]]

       ``(2) Per stay amount for intensive need residents.--The 
     Secretary, after consultation with the Prospective Payment 
     Assessment Commission and skilled nursing facility experts, 
     shall develop and publish a per stay amount for residents of 
     a skilled nursing facility who require intensive nursing or 
     therapy services.
       ``(3) Budget neutrality.--The Secretary shall adjust 
     payments under subsection (b) in a manner that ensures that 
     total payments for covered non-routine services under this 
     section are not greater or less than total payments for such 
     services would have been but for the application of paragraph 
     (1).
       ``(g) Exceptions and Adjustments to Amounts.--
       ``(1) In general.--The Secretary may make exceptions and 
     adjustments to the cost reporting period amounts applicable 
     to a skilled nursing facility under subsection (c)(2) for a 
     cost reporting period, except that the total amount of any 
     additional payments made under this section for covered non-
     routine services during the cost reporting period as a result 
     of such exceptions and adjustments may not exceed 5 percent 
     of the aggregate payments made to all skilled nursing 
     facilities for covered non-routine services during the cost 
     reporting period (determined without regard to this 
     paragraph).
       ``(2) Budget neutrality.--The Secretary shall adjust 
     payments under subsection (b) in a manner that ensures that 
     total payments for covered non-routine services under this 
     section are not greater or less than total payments for such 
     services would have been but for the application of paragraph 
     (1).
       ``(h) Special Treatment for Medicare Low Volume Skilled 
     Nursing Facilities.--The Secretary shall determine an 
     appropriate manner in which to apply this section, taking 
     into account the purposes of this section, to non-routine 
     costs of a skilled nursing facility for which payment is made 
     for routine service costs during a cost reporting period on 
     the basis of prospective payments under section 1888(d).
       ``(i) Maintaining Savings From Payment System.--The 
     prospective payment system established under section 1889 
     shall reflect the payment methodology established under this 
     section for covered non-routine services.''.
       (b) Conforming Amendment.--Section 1814(b) (42 U.S.C. 
     1395f(b)) is amended in the matter preceding paragraph (1) by 
     striking ``1813 and 1886'' and inserting ``1813, 1886, 1888, 
     1888A, and 1889''.

     SEC. 7033. PAYMENTS FOR ROUTINE SERVICE COSTS.

       (a) Maintaining Savings Resulting From Temporary Freeze on 
     Payment Increases.--
       (1) Basing updates to per diem cost limits on limits for 
     fiscal year 1993.--
       (A) In general.--The last sentence of section 1888(a) (42 
     U.S.C. 1395yy(a)) is amended by adding at the end the 
     following: ``(except that such updates may not take into 
     account any changes in the routine service costs of skilled 
     nursing facilities occurring during cost reporting periods 
     which began during fiscal year 1994 or fiscal year 1995).''.
       (B) No exceptions permitted based on amendment.--The 
     Secretary of Health and Human Services shall not consider the 
     amendment made by subparagraph (A) in making any adjustments 
     pursuant to section 1888(c) of the Social Security Act.
       (2) Payments to low medicare volume skilled nursing 
     facilities.--Any change made by the Secretary of Health and 
     Human Services in the amount of any prospective payment paid 
     to a skilled nursing facility under section 1888(d) of the 
     Social Security Act for cost reporting periods beginning on 
     or after October 1, 1995, may not take into account any 
     changes in the costs of services occurring during cost 
     reporting periods which began during fiscal year 1994 or 
     fiscal year 1995.
       (b) Basing 1996 Limits on New Definition of Routine 
     Costs.--The Secretary of Health and Human Services shall take 
     into account the new definition of routine service costs 
     under section 1888(e) of the Social Security Act, as added by 
     section 7031, in determining the routine per diem cost limits 
     under section 1888(a) for fiscal year 1996 and each fiscal 
     year thereafter.
       (c) Establishment of Schedule for Making Adjustments to 
     Limits.--Section 1888(c) (42 U.S.C. 1395yy(c)) is amended by 
     striking the period at the end of the second sentence and 
     inserting ``, and may only make adjustments under this 
     subsection with respect to a facility which applies for an 
     adjustment during an annual application period established by 
     the Secretary.''.
       (d) Limitation to Exceptions Process of the Secretary.--
     Section 1888(c) (42 U.S.C. 1395yy(c)) is amended--
       (1) by striking ``(c) The Secretary'' and inserting 
     ``(c)(1) Subject to paragraph (2), the Secretary''; and
       (2) by adding at the end the following new paragraph:
       ``(2) The Secretary may not make any adjustments under this 
     subsection in the limits set forth in subsection (a) for a 
     cost reporting period beginning during a fiscal year to the 
     extent that the total amount of the additional payments made 
     under this title as a result of such adjustments is greater 
     than an amount equal to--
       ``(A) for cost reporting periods beginning during fiscal 
     year 1996, the total amount of the additional payments made 
     under this title as a result of adjustments under this 
     subsection for cost reporting periods beginning during fiscal 
     year 1994 increased (on a compounded basis) by the SNF market 
     basket percentage increase (as defined in section 
     1888A(a)(2)) for each fiscal year; and
       ``(B) for cost reporting periods beginning during a 
     subsequent fiscal year, the amount determined under this 
     paragraph for the preceding fiscal year, increased by the SNF 
     market basket percentage increase (as defined in section 
     1888A(a)(2)) for each fiscal year.''.
       (e) Maintaining Savings From Payment System.--The 
     prospective payment system established under section 1889 of 
     the Social Security Act, as added by section 7025, shall 
     reflect the routine per diem cost limits under section 
     1888(a) of such Act.

     SEC. 7034. REDUCTIONS IN PAYMENT FOR CAPITAL-RELATED COSTS.

       (a) In General.--Section 1861(v)(1) (42 U.S.C. 1395x(v)(1)) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(T) Such regulations shall provide that, in determining 
     the amount of the payments that may be made under this title 
     with respect to all the capital-related costs of skilled 
     nursing facilities, the Secretary shall reduce the amounts of 
     such payments otherwise established under this title by 15 
     percent for payments attributable to portions of cost 
     reporting periods occurring beginning in fiscal years 1996 
     through 2002.''.
       (b) Maintaining Savings Resulting From 15 Percent Capital 
     Reduction.--The prospective payment system established under 
     section 1889 of the Social Security Act, as added by section 
     7025 of the Balanced Budget Reconciliation Act of 1995, shall 
     reflect the 15 percent reduction in payments for capital-
     related costs of skilled nursing facilities as such reduction 
     is in effect under section 1861(v)(1)(T) of such Act, as 
     added by subsection (a).

     SEC. 7035. TREATMENT OF ITEMS AND SERVICES PAID FOR UNDER 
                   PART B.

       (a) Requiring Payment for All Items and Services To Be Made 
     to Facility.--
       (1) In general.--The first sentence of section 1842(b)(6) 
     (42 U.S.C. 1395u(b)(6)) is amended--
       (A) by striking ``and (D)'' and inserting ``(D)''; and
       (B) by striking the period at the end and inserting the 
     following: ``, and (E) in the case of an item or service 
     furnished to an individual who (at the time the item or 
     service is furnished) is a resident of a skilled nursing 
     facility, payment shall be made to the facility (without 
     regard to whether or not the item or service was furnished by 
     the facility, by others under arrangement with them made by 
     the facility, under any other contracting or consulting 
     arrangement, or otherwise), except that this subparagraph 
     shall not preclude a physician from providing evaluation and 
     management services to patients under the physician's 
     care.''.
       (2) Exclusion for items and services not billed by 
     facility.--Section 1862(a) (42 U.S.C. 1395y(a)) is amended--
       (A) by striking ``or'' at the end of paragraph (14);
       (B) by striking the period at the end of paragraph (15) and 
     inserting ``; or''; and
       (C) by inserting after paragraph (15) the following new 
     paragraph:
       ``(16) where such expenses are for covered non-routine 
     services (as defined in section 1888A(a)(1)) furnished to an 
     individual who is a resident of a skilled nursing facility 
     and for which the claim for payment under this title is not 
     submitted by the facility.''.
       (3) Conforming amendment.--Section 1832(a)(1) (42 U.S.C. 
     1395k(a)(1)) is amended by striking ``(2);'' and inserting 
     ``(2) and section 1842(b)(6)(E);''.
       (b) Reduction in Payments for Items and Services Furnished 
     by or Under Arrangements With Facilities.--Section 1861(v)(1) 
     (42 U.S.C. 1395x(v)(1)), as amended by section 7034, is 
     amended by adding at the end the following new subparagraph:
       ``(U) In the case of an item or service furnished by a 
     skilled nursing facility (or by others under arrangement with 
     them made by a skilled nursing facility or under any other 
     contracting or consulting arrangement or otherwise) for which 
     payment is made under part B in an amount determined in 
     accordance with section 1833(a)(2)(B), the Secretary shall 
     reduce the reasonable cost for such item or service otherwise 
     determined under clause (i)(I) of such section by 5.8 percent 
     for payments attributable to portions of cost reporting 
     periods occurring during fiscal years 1996 through 2002.''.

     SEC. 7036. MEDICAL REVIEW PROCESS.

       In order to ensure that medicare beneficiaries are 
     furnished appropriate extended care services, the Secretary 
     of Health and Human Services shall establish and implement a 
     thorough medical review process to examine the effects of the 
     amendments made by this subchapter on the quality of extended 
     care services furnished to medicare beneficiaries. In 
     developing such a medical review process, the Secretary shall 
     place a particular emphasis on the quality of non-routine 
     covered services for which payment is made under section 
     1888A of the Social Security Act.

     SEC. 7037. REVISED SALARY EQUIVALENCE LIMITS.

       The Secretary of Health and Human Services shall determine 
     the non-routine per stay payment amounts for each skilled 
     nursing facility established under section 1888A of the 
     Social Security Act, as added by section 7032, as if salary 
     equivalence guidelines were 

[[Page S 16154]]
     in effect for occupational, physical, respiratory, and speech pathology 
     therapy services for the last 12-month cost reporting period 
     of the facility ending on or before September 30, 1994.

     SEC. 7038. REPORT BY PROSPECTIVE PAYMENT ASSESSMENT 
                   COMMISSION.

       Not later than October 1, 1997, the Prospective Payment 
     Assessment Commission shall submit to Congress a report on 
     the system under which payment is made under the medicare 
     program for extended care services furnished by skilled 
     nursing facilities, and shall include in the report the 
     following:
       (1) An analysis of the effect of the methodology 
     established under section 1888A of the Social Security Act 
     (as added by section 7032) on the payments for, and the 
     quality of, extended care services under the medicare 
     program.
       (2) An analysis of the advisability of determining the 
     amount of payment for covered non-routine services of 
     facilities (as described in such section) on the basis of the 
     amounts paid for such services when furnished by suppliers 
     under part B of the medicare program.
       (3) An analysis of the desirability of maintaining separate 
     routine cost-limits for hospital-based and freestanding 
     facilities in the costs of extended care services recognized 
     as reasonable under the medicare program.
       (4) An analysis of the quality of services furnished by 
     skilled nursing facilities.
       (5) An analysis of the adequacy of the process and 
     standards used to provide exceptions to the limits described 
     in paragraph (3).
       (6) An analysis of the effect of the prospective payment 
     methodology established under section 1889 of the Social 
     Security Act (as added by section 7025) on the payments for, 
     and the quality of, extended care services under the medicare 
     program, including an evaluation of the baseline used in 
     establishing a system for payment for extended care services 
     furnished by skilled nursing facilities.

     SEC. 7038. EFFECTIVE DATE.

       Except as otherwise provided in this part, the amendments 
     made by this part shall apply to services furnished during 
     cost reporting periods (or portions of cost reporting 
     periods) beginning on or after October 1, 1996.
       On page 774, between lines 2 and 3, insert the following:
       ``(g) Solvency Standards.--A medicaid plan shall provide 
     that any State law solvency requirements that apply to 
     private sector health plans and providers shall apply to the 
     State medicaid plan and providers under such plan.
       Beginning on page 775, strike line 14 and all that follows 
     through page 776, line 10, and insert the following:
       ``(1) Set-asides.--Subject to subsection (e)--
       ``(A) General set-aside.--A medicaid plan shall provide 
     that the amount of funds expended under the plan for medical 
     assistance for eligible low-income individuals who have 
     attained retirement age for a fiscal year shall be not less 
     than the minimum low-income-elderly percentage specified in 
     paragraph (2)(A) of the total funds expended under the plan 
     for all medical assistance for the fiscal year.
       ``(B) Set-aside for medicare premium assistance.--A 
     medicaid plan shall provide that the amount of funds expended 
     under the plan for medical assistance for medicare cost-
     sharing described in section 2171(c)(1) for a fiscal year 
     shall be not less than the minimum medicare premium 
     assistance percentage specified in paragraph (2)(B) of the 
     total funds expended under the plan for all medical 
     assistance for the fiscal year. The medicaid plan shall 
     provide priority for making such assistance available for 
     targeted low-income elderly individuals (as defined in 
     paragraph (3)).
       ``(2) Minimum percentages.--
       ``(A) For general set-aside.--The minimum low-income-
     elderly percentage specified in this subparagraph for a State 
     is equal to 85 percent of the expenditures under title XIX 
     for medical assistance in the State during Federal fiscal 
     year 1995 (not including expenditures for such fiscal year 
     taken into account under subparagraph (B)) which was 
     attributable to expenditures for medical assistance for 
     mandated benefits furnished to individuals--
       ``(i) whose eligibility for such assistance was based on 
     their being 65 years of age or older; and
       ``(ii)(I) whose coverage (at such time) under a State plan 
     under title XIX was required under Federal law, or (II) who 
     (at such time) were residents of a nursing facility.
       ``(B) For set-aside for medicare premium assistance.--The 
     minimum medicare premium assistance percentage specified in 
     this subparagraph for a State is equal to 90 percent of the 
     average percentage of the expenditures under title XIX for 
     medical assistance in the State during Federal fiscal years 
     1993 through 1995 which was attributable to expenditures for 
     medical assistance for medicare premiums described in section 
     1905(p)(3)(A) for individuals whose coverage (at such time) 
     for such assistance for such premiums under a State plan 
     under title XIX was required under Federal law.
       ``(3) Targeted low-income elderly individual defined.--For 
     purposes of this subsection, the term `targeted low-income 
     elderly individual' means an individual who has attained 
     retirement age and whose income does not exceed 100 percent 
     of the poverty line applicable to a family of the size 
     involved.
       On page 813, strike lines 4 through 10, and insert the 
     following:
       ``(A) fiscal year 1996 is $97,245,440,000;
       ``(B) fiscal year 1997 is $102,607,730,702;
       ``(C) fiscal year 1998 is $106,712,039,930;
       ``(D) fiscal year 1999 is $110,980,521,527;
       ``(E) fiscal year 2000 is $115,419,742,389;
       ``(F) fiscal year 2001 is $120,036,532,084;
       ``(G) fiscal year 2002 is $124,837,993,367;
       On page 814, strike lines 9 through 24, and insert the 
     following:
     fiscal year 1996, subject to paragraph (4), is 109 percent 
     of--
       ``(i) the greatest of--

       ``(I) the total amount of Federal expenditures (minus the 
     amount paid under section 1923) made to such State or 
     District under title XIX for the 4 quarters in fiscal year 
     1995,
       ``(II) 103.379859 percent of the total amount of Federal 
     expenditures made to such State or District under title XIX 
     for the 4 quarters in fiscal year 1994, or
       ``(III) 95 percent of the total amount of Federal 
     expenditures (minus the amount paid under section 1923) made 
     to such State or District under title XIX for the 4 quarters 
     in fiscal year 1993; multiplied by

       ``(ii) the scalar factor described in subparagraph (D).
       Beginning on page 815, line 10, strike all through page 
     816, line 13 and insert the following:
       ``(D) Scalar factor.--The scalar factor under this 
     subparagraph for fiscal year 1996 is the ratio of 
     $89,216,000,000 to the total amount of Federal expenditures 
     (minus the amount paid under section 1923) made to all States 
     and the District of Columbia for the 4 quarters in fiscal 
     year 1995.
       Beginning on page 818, line 12, strike all through page 
     819, line 8, and insert the following:
       ``(A) Floor.--
       ``(i) In general.--In no case shall the amount of the State 
     outlay allotment under paragraph (2) for a fiscal year be 
     less than the greatest of--

       ``(I) 102 percent of the amount of the State outlay 
     allotment under this subsection for the preceding fiscal 
     year;
       ``(II) .24 percent of the pool amount for such fiscal year; 
     or
       ``(III) in the case of a State or District with an outlay 
     allotment under this subsection for fiscal year 1998 that 
     exceeds 103.9 percent of such State's or District's outlay 
     allotment for 1997, the applicable percentage, as determined 
     under clause (ii), of the amount of the State outlay 
     allotment under this subsection for the preceding fiscal 
     year.

       ``(ii) Applicable percentage.--The applicable percentage 
     determined under this clause is as follows:

       ``(I) For fiscal year 1999, 104.25 percent.
       ``(II) For fiscal years 2000 and 2001, 104 percent.
       ``(III) For fiscal year 2002, 103.4 percent.

       ``(B) Ceiling.--
       ``(i) In general.--In no case shall the amount of the State 
     outlay allotment under paragraph (2) for a fiscal year be 
     greater than the product of--

       ``(I) the State outlay allotment under this subsection for 
     the State or the District of Columbia for the preceding 
     fiscal year; and
       ``(II) the applicable percentage of the national medicaid 
     growth percentage (as determined under subsection (b)(2)) for 
     the fiscal year involved.

       ``(ii) Applicable percentage.--For purposes of clause 
     (i)(II), the applicable percentage is--

       ``(I) for fiscal year 1997, 125.5 percent;
       ``(II) for fiscal year 1998, 132 percent;
       ``(III) for fiscal year 1999, 151 percent;
       ``(IV) for fiscal year 2000, 156 percent;
       ``(V) for fiscal year 2001, 144 percent.
       ``(VI) for fiscal year 2002, 146 percent.

       On page 833, line 21, after ``section 2121'' insert ``, 
     plus any additional amount available to such State under 
     subsection (g) or (h),''.
       On page 858, before line 19, insert the following new 
     subsection:
       ``(g) Carryover Amounts Available for Payment.--
       ``(1) Carryover of allotment permitted.--
       ``(A) In general.--If the amount of the payment to a State 
     under this section for a fiscal year does not exceed--
       ``(i) the amount of the allotment provided to such State 
     under section 2121 for such fiscal year, plus
       ``(ii) subject to subparagraph (B), the amount available to 
     the State for such fiscal year (other than amounts available 
     under paragraph (2)) resulting from the application of this 
     subparagraph in the preceding fiscal year,

     then the amount of the difference shall be added to the 
     amount of the allotment otherwise provided under section 2121 
     for the succeeding fiscal year.
       ``(B) Maximum carryover amount.--With respect to each 
     fiscal year, the maximum amount of the difference described 
     in subparagraph (A) which may be added to the allotment 
     otherwise provided under section 2121 to a State may not 
     exceed the total amount for the 2 immediately preceding 
     fiscal years of the difference in each such fiscal year 
     between the payment to a State under this section and the 
     amount of the allotment provided under section 2121.
       ``(2) Excess amounts reallocated.--
       ``(A) In general.--The sum of the amounts in excess of the 
     maximum carryover amounts determined under paragraph (1)(B) 
     for any fiscal year for all of the 50 States and 

[[Page S 16155]]
     the District of Columbia shall be available for payment in such fiscal 
     year to qualified States on a quarterly basis as otherwise 
     determined under this section.
       ``(B) Qualified state.--For purposes of subparagraph (A), 
     in the case of any fiscal year, a qualified State is a 
     State--
       ``(i) with a State outlay allotment under section 2121 
     which is--

       ``(I) subject to the ceiling determined under section 
     2121(c)(3)(B) for the fiscal year,
       ``(II) not subject to such ceiling or to the floor 
     determined under section 2121(c)(3)(A), or
       ``(III) subject to such floor;

       ``(ii) which has no amount of difference as determined 
     under paragraph (1) for any preceding fiscal year which may 
     be added to the amount of the allotment provided under 
     section 2121 for the fiscal year; and
       ``(iii) which applies for payments under subparagraph (A) 
     in such manner as the Secretary determines.
       ``(C) Allocation rules.--For any fiscal year, in the event 
     the total amount of payments applied for by all qualified 
     States under subparagraph (B) exceeds the excess amount 
     available for such fiscal year under subparagraph (A), the 
     Secretary shall allocate such payments among groups of 
     qualified States in the following order:
       ``(i) All qualified States described in subparagraph 
     (B)(i)(I).
       ``(ii) All qualified States described in subparagraph 
     (B)(i)(II).
       ``(iii) All qualified States described in subparagraph 
     (B)(i)(III).

     If such excess amount is not sufficient with respect to any 
     group of qualified States, the Secretary shall allocate such 
     payments proportionately among the qualified States in such 
     group.
       ``(h) Additional Amounts Available for Payment.--
       ``(1) Appropriation.--There is hereby authorized to be 
     appropriated and there are appropriated additional amounts 
     described in paragraph (2) which shall be paid to the States 
     described in such paragraph and may be used without fiscal 
     year limitation.
       ``(2) Additional amounts described.--The additional amounts 
     described in this paragraph are as follows:
       ``(A) For Arizona, $63,000,000.
       ``(B) For Florida, $250,000,000.
       ``(C) For Georgia, $34,000,000.
       ``(D) For Kentucky, $76,500,000.
       ``(E) For South Carolina, $181,000,000.
       ``(F) For Washington, $250,000,000.
       ``(G) For Vermont, $50,000,000.
       On page 858, line 19, strike ``(g)'' and insert ``(i)''.
       At the end of Subtitle B of Title VII insert:

     SEC. 7196: ADJUSTMENT OF POOL AMOUNTS

       Notwithstanding any other provisions in law, the Secretary 
     shall adjust Medicaid pool amounts in FY 1996, FY 1997, FY 
     2000, and FY 2001 for each state by a proportionate amount 
     such that total Medicaid pool amounts in FY 1996, FY 1997, FY 
     2000, and FY 2001 shall not exceed the amounts provided in 
     section 2121(b)(1) of Social Security Act as added by section 
     7191(a) of this Act,
       a. reduced by $1,900,000,000 in FY 1996, and increased by a 
     similar amount in the subsequent fiscal year; and
       2b. reduced by $2,300,000,000 in FY 2000, and increased by 
     a similar amount in the subsequent fiscal year.
       Beginning on page 889, line 20, strike all through page 
     897, line 19, and insert the following: collected shall be 
     paid to such individual.
       ``(c) Effective Date--Notwithstanding any other 
     provision of law, subsection (b) shall be effective on and 
     after January 1, 1996.

     ``SEC. 2137. REQUIREMENTS FOR NURSING FACILITIES.

       ``(a) Requirements for Nursing Facilities.--
       ``(1) In general.--Subject to paragraph (2), the provisions 
     of section 1919, as in effect on the day after the date of 
     the enactment of this title shall apply to nursing facilities 
     which furnish services under the State plan.
       ``(2) Waiver for states with stricter requirements.--
       ``(A) Authority to seek waiver.--Any State with State law 
     requirements for nursing facilities that, as determined by 
     the Secretary--
       ``(i) are equivalent to or stricter than the requirements 
     imposed under paragraph (1); and
       ``(ii) contain State oversight and enforcement authority 
     over nursing facilities, including penalty provisions, that 
     are equivalent to or stricter than such oversight and 
     enforcement authority in section 1919, as so in effect,
     may apply to the Secretary for a waiver of the requirements 
     imposed under paragraph (1).
       ``(B) 120-day approval period.--The Secretary shall approve 
     or deny an application submitted under subparagraph (A) not 
     later than 120 days after the date the application is 
     submitted.
       ``(C) Approval after public comment.--The Secretary shall 
     approve or deny an application for a waiver under 
     subparagraph (A) after providing for public comment on such 
     application during the 120-day approval period.
       ``(D) No waiver of enforcement.--A State granted a waiver 
     under subparagraph (A) shall be subject to--
       ``(i) the penalty described in subsection (b);
       ``(ii) suspension or termination, as determined by the 
     Secretary, of the waiver granted under subparagraph (A); and
       ``(iii) any other authority available to the Secretary to 
     enforce the requirements of section 1919, as so in effect.
       ``(b) Penalty for Noncompliance.--For any fiscal year, the 
     Secretary shall withhold up to but not more than 2 percent of 
     the State outlay allotment under section 2121(c) for such 
     fiscal year if the Secretary makes a determination that a 
     State medicaid plan has failed to comply with a provision of 
     section 1919, as so in effect, or any State law requirements 
     applicable to such plan under a waiver granted under 
     subsection (a)(2)(A).
       On page 980, between lines 2 and 3, insert the following 
     new sections:

     SEC. 7196. STATE REVIEW OF MENTALLY ILL OR RETARDED NURSING 
                   FACILITY RESIDENTS UPON CHANGE IN PHYSICAL OR 
                   MENTAL CONDITION.

       (a) State Review on Change in Resident's Condition.--
     Section 1919(e)(7)(B)(iii) (42 U.S.C. 1396r(e)(7)(B)(iii)) is 
     amended to read as follows:
       ``(iii) Review required upon change in resident's 
     condition.--A review and determination under clause (i) or 
     (ii) shall be conducted promptly after a nursing facility has 
     notified the State mental health authority or State mental 
     retardation or developmental disability authority, as 
     applicable, with respect to a mentally ill or mentally 
     retarded resident that there has been a significant change in 
     the resident's physical or mental condition.''.
       (b) Conforming Amendments.--
       (1) Section 1919(b)(3)(E) (42 U.S.C. 1396r(b)(3)(E)) is 
     amended by adding at the end the following new sentence: ``In 
     addition, a nursing facility shall notify the State mental 
     health authority or State mental retardation or developmental 
     disability authority, as applicable, promptly after a 
     significant change in the physical or mental condition of a 
     resident who is mentally ill or mentally retarded.''.
       (2) The heading for section 1919(e)(7)(B) (42 U.S.C. 
     1396r(e)(7)(B)) is amended by striking ``annual''.
       (3) The heading for section 1919(e)(7)(D)(i) (42 U.S.C. 
     1396r(e)(7)(D)(i)) is amended by striking ``annual''.

     SEC. 7197. NURSE AIDE TRAINING IN NURSING FACILITIES SUBJECT 
                   TO EXTENDED SURVEY AND UNDER CERTAIN OTHER 
                   CONDITIONS.

       Section 1919(f)(2)(B)(iii)(I) (42 U.S.C. 
     1396r(f)(2)(B)(iii)(I)) is amended in the matter preceding 
     item (a), by striking ``by or in a nursing facility'' and 
     inserting ``by a nursing facility (or in such a facility, 
     unless the State determines that there is no other such 
     program offered within a reasonable distance, provides notice 
     of the approval to the State long term care ombudsman, and 
     assures, through an oversight effort, that an adequate 
     environment exists for such a program)''.

     SEC. 7198. MEDICARE/MEDICAID INTEGRATION DEMONSTRATION 
                   PROJECT.

       (a) Description of Projects.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     conduct demonstration projects under this section to 
     demonstrate the manner in which States may use funds from the 
     medicare program under title XVIII of the Social Security Act 
     and the medicaid program under title XXI of such Act (in this 
     section referred to as the ``medicare and medicaid 
     programs'') for the purpose of providing a more cost-
     effective full continuum of care for delivering services to 
     meet the needs of chronically-ill elderly and disabled 
     beneficiaries who are eligible for items and services under 
     such programs, through integrated systems of care, with an 
     emphasis on case management, prevention, and interventions 
     designed to avoid institutionalization whenever possible. The 
     Secretary shall use funds from the amounts appropriated for 
     the medicare and medicaid programs to make the payments 
     required under subsection (d)(1).
       (2) Option to participate.--A State, or a coalition of 
     States, may not require an individual eligible to receive 
     items and services under the medicare and medicaid programs 
     to participate in a demonstration project under this section.
       (b) Establishment.--The Secretary shall make payments in 
     accordance with subsection (d) to not more than 10 States, or 
     coalitions of States, for the conduct of demonstration 
     projects that provide for integrated systems of care in 
     accordance with subsection (a).
       (c) Applications.--Each State, or a coalition of States, 
     desiring to conduct a demonstration project under this 
     section shall prepare and submit to the Secretary an 
     application at such time, in such manner, and containing such 
     information as the Secretary may require, including an 
     explanation of a plan for evaluating the project. The 
     Secretary shall approve or deny an application not later than 
     90 days after the receipt of such application.
       (d) Payments.--
       (1) In general.--For each fiscal year quarter occurring 
     during a demonstration project conducted under this section, 
     the Secretary shall pay to each entity designated under 
     paragraph (3) an amount equal to the Federal capitated 
     payment rate determined under paragraph (2).
       (2) Federal capitated payment rate.--The Secretary shall 
     determine the Federal capitated payment rate for purposes of 
     this section based on the anticipated Federal quarterly cost 
     of providing care to chronically-ill elderly and disabled 
     beneficiaries 

[[Page S 16156]]
     who are eligible for items and services under the medicare and medicaid 
     programs and who have opted to participate in a demonstration 
     project under this section.
       (3) Designation of entity.--
       (A) In general.--Each State, or coalition of States, shall 
     designate entities to directly receive the payments described 
     in paragraph (1).
       (B) Requirement.--A State, or a coalition of States, may 
     not designate an entity under subparagraph (A) unless such 
     entity meets the quality, solvency, and coverage standards 
     applicable to providers of items and services under the 
     medicare and medicaid programs.
       (4) State payments.--Each State conducting, or in the case 
     of a coalition of States, participating in a demonstration 
     project under this section shall pay to the entities 
     designated under paragraph (3) the State percentage, as 
     defined in section 1905(b) of the Social Security Act (42 
     U.S.C. 1396d(b)) (as such section is in effect on the day 
     before the date of the enactment of this Act), of any items 
     and services provided to chronically-ill elderly and disabled 
     beneficiaries who have opted to participate in a 
     demonstration project under this section.
       (5) Budget neutrality.--The aggregate amount of Federal 
     payments to entities designated by a State, or coalition of 
     States, under paragraph (3) for a fiscal year shall not 
     exceed the aggregate amount of such payments that would 
     otherwise have been made under the medicare and medicaid 
     programs for such fiscal year for items and services provided 
     to beneficiaries under such programs but for the election of 
     such beneficiaries to participate in a demonstration project 
     under this section.
       (e) Duration.--
       (1) In general.--The demonstration projects conducted under 
     this section shall be conducted for a 5-year period, subject 
     to annual review and approval by the Secretary.
       (2) Termination.--The Secretary may, with 90 days' notice, 
     terminate any demonstration project conducted under this 
     section that is not in substantial compliance with the terms 
     of the application approved by the Secretary under this 
     section.
       (f) Oversight.--The Secretary shall establish quality 
     standards for evaluating and monitoring the demonstration 
     projects conducted under this section.
       (g) Reports.--Not later than 90 days after the conclusion 
     of a demonstration project conducted under this section, the 
     Secretary shall submit to the Congress a report containing 
     the following:
       (1) A description of the demonstration project.
       (2) An analysis of beneficiary satisfaction under such 
     project.
       (3) An analysis of the quality of the services delivered 
     under the project.
       (4) A description of the savings to the medicaid and 
     medicare programs as a result of the demonstration project.
       On page 1394, after line 19, insert the following:

     SEC. 7482. COST-OF-LIVING ADJUSTMENTS DURING FISCAL YEAR 
                   1996.

       Notwithstanding any other provision of law, in the case of 
     any program within the jurisdiction of the Committee on 
     Finance of the United States Senate which is adjusted for any 
     increase in the consumer price index for all urban wage 
     earners and clerical workers (CPI-W) for the United States 
     city average for all items, any such adjustment which takes 
     effect during fiscal year 1996 shall be equal to 2.6 percent.
       Beginning on page 786, strike line 9 and all that follows 
     through page 788, line 6.

                          ____________________