[Congressional Record Volume 143, Number 91 (Wednesday, June 25, 1997)]
[Senate]
[Pages S6373-S6379]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          AMENDMENTS SUBMITTED

                                 ______
                                 

                      THE TAX FAIRNESS ACT OF 1997

                                 ______
                                 

                  BOND (AND OTHERS) AMENDMENT NO. 514

  (Ordered to lie on the table.)
  Mr. BOND (for himself, Mr. Enzi, Mr. Nickles, Mrs. Hutchison, and Mr. 
Hagel) submitted an amendment intended to be proposed by them to the 
bill, S. 949, to provide revenue reconciliation pursuant to section 
104(b) of the concurrent resolution on the budget for fiscal year 1998; 
as follows:

       On page 212, between lines 11 and 12, insert the following:

     SEC.   . DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
                   EMPLOYED INDIVIDUALS INCREASED.

       (a) In General.--Section 162(1)(1) (relating to special 
     rules for health insurance costs of self-employed 
     individuals) is amended to read as follows:
       ``(1) Allowance of deduction.--In the case of an individual 
     who is an employee within the meaning of section 401(c)(1), 
     there shall be allowed as a deduction under this section an 
     amount equal to the amount paid during the taxable year for 
     insurance which constitutes medical are for the taxpayer, the 
     taxpayer's spouse, and dependents.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.
                                 ______
                                 

                     DORGAN AMENDMENTS NOS. 515-517

  Mr. DORGAN proposed three amendments to the bill, S. 949, supra; as 
follows:

                           Amendment No. 515

       On page 211, between lines 5 and 6, insert the following:

     SEC. 724. ABATEMENT OF INTEREST ON UNDERPAYMENTS BY TAXPAYERS 
                   IN PRESIDENTIALLY DECLARED DISASTER AREAS.

       (a) In General.--Section 6404 (relating to abatements) is 
     amended by adding at the end the following:
       ``(h) Abatement of Interest on Underpayments by Taxpayers 
     in Presidentially Declared Disaster Areas.--
       ``(1) In general.--If the Secretary extends for any period 
     of time for filing income tax returns under section 6081 and 
     the time for paying income tax with respect to such returns 
     under section 6161 (and waives any penalties relating to the 
     failure to so file or so pay) for any taxpayer located in a 
     Presidentially declared disaster area, the Secretary shall 
     abate for such period the assessment of any interest 
     prescribed under section 6601 on such income tax.
       ``(2) Presidentially declared disaster area.--For purposes 
     of paragraph (1), the term `Presidentially declared disaster 
     area' means, with respect to any taxpayer, any area which the 
     President has determined warrants assistance by the Federal 
     Government under the Disaster Relief and Emergency Assistance 
     Act.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to disasters declared after December 31, 1996.
                                                                    ____


                           Amendment No. 516

       On page 211, between lines 5 and 6, insert the following:

     SEC. 724. DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS 
                   MAY BE USED WITHOUT PENALTY TO REPLACE OR 
                   REPAIR PROPERTY DAMAGED IN PRESIDENTIALLY 
                   DECLARED DISASTER AREA.

       (a) In General.--Section 72(t)(2) (relating to exceptions 
     to 10-percent additional tax on early distributions), as 
     amended by sections 203 and 303, is amended by adding at the 
     end the following new subparagraph:
       ``(G) Distributions for disaster-related expenses.--
     Distributions from an individual retirement plan which are 
     qualified disaster-related distributions.''.
       (b) Qualified Disaster-Related Distributions.--Section 
     72(t), as amended by sections 203 and 303, is amended by 
     adding at the end the following new paragraph:
       ``(9) Qualified disaster-related distributions.--For 
     purposes of paragraph (2)(E)--
       ``(A) In general.--The term `qualified disaster-related 
     distribution' means any payment or distribution received by 
     an individual to the extent that the payment or distribution 
     is used by such individual within 60 days of the payment or 
     distribution to pay for the repair or replacement of tangible 
     property which is disaster-damaged property. Such term shall 
     only include any payment or distribution which is made during 
     the 2-year period beginning on the date of the determination 
     referred to in subparagraph (C).
       ``(B) Disaster-damaged property.--The term `disaster-
     damaged property' means property--
       ``(i) which was located in a disaster area on the date of 
     the determination referred to in subparagraph (C), and
       ``(ii) which was destroyed or substantially damaged as a 
     result of the disaster occurring in such area.
       ``(C) Disaster area.--The term `disaster area' means an 
     area determined by the President to warrant assistance by the 
     Federal Government under the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act.''.
       ``(c) Effective Date.--The amendments made by this section 
     shall apply to payments and distributions after December 31, 
     1996, with respect to disasters occurring after such date.

     SEC. 725. ELIMINATION OF 10 PERCENT FLOOR FOR DISASTER 
                   LOSSES.

       ``(a) General Rule.--Section 165(h)(2)(A) (relating to net 
     casualty loss allowed only to the extent it exceeds 10 
     percent of adjusted gross income) is amended by striking 
     clauses (i) and (ii) and inserting the following new clauses:
       ``(i) the amount of the personal casualty gains for the 
     taxable year,
       ``(ii) the amount of the federally declared disaster losses 
     for the taxable year (or, if lesser, the net casualty loss), 
     plus
       ``(iii) the portion of the net casualty loss which is not 
     deductible under clause (ii) but only to the extent such 
     portion exceeds 10 percent of the adjusted gross income of 
     the individual.
       For purposes of the preceding sentence, the term `net 
     casualty loss' means the excess of personal casualty losses 
     for the taxable year over personal casualty gains.''.
       (b) Federally Declared Disaster Loss Defined.--Section 
     165(h)(3) (relating to treatment of casualty gains and 
     losses) is amended by adding at the end the following new 
     subparagraph:
       ``(C) Federally declared disaster loss.--The term 
     `federally declared disaster loss' means any personal 
     casualty loss attributable to a disaster occurring in an area 
     subsequently determined by the President of the United States 
     to warrant assistance by the Federal Government under the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act.''.
       (c) Conforming Amendment.--The heading for section 
     165(h)(2) is amended by striking ``Net casualty loss'' and 
     inserting ``Net nondisaster casualty loss''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to losses attributable to disasters occurring 
     after December 31, 1996, including for purposes of 
     determining the portion of such losses allowable in taxable 
     years ending before such date pursuant to an election under 
     section 165(i) of the Internal Revenue Code of 1986.
       Strike section 751 of the bill.
       On page 239 strike lines 18 and 19.
       On page 239, line 20, strike ``(5)'' and insert ``(4)''.
       On page 240, line 1, strike ``(6)'' and insert ``(5)''.
                                                                    ____


                           Amendment No. 517

       On page 96, strike lines 11 through 16, and insert:
       ``(3) Adjusted net capital gain.--For purposes of this 
     subsection--
       ``(A) In general.--The term `adjusted net capital gain' 
     means net capital gain determined without regard to--

[[Page S6374]]

       ``(i) collectibles gain, and
       ``(ii) unrecaptured section 1250 gain.
       ``(B) $1,000,000 lifetime limitation.--
       ``(i) In general.--The adjusted net capital gain for any 
     taxable year shall not exceed $1,000,000, reduced by the 
     aggregate adjusted net capital gain for all prior taxable 
     years.
       ``(ii) Special rule for joint returns.--The amount of the 
     adjusted net 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 clause (i) for any succeeding 
     taxable year.
       ``(C) Capital gains rate reduction not to apply to certain 
     taxpayers.--The adjusted net capital gain for any taxable 
     year in the case of any of the following taxpayers shall be 
     zero:
       ``(i) 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.
       ``(ii) A married individual (within the meaning of section 
     7703) filing a separate return for the taxable year.
       ``(iii) An estate or trust.
                                 ______
                                 

                 BUMPERS (AND OTHERS) AMENDMENT NO. 518

  Mr. BUMPERS (for himself, Mr. Gregg, and Mr. Robb) proposed an 
amendment to the bill, S. 949, supra; as follows:

       At the appropriate place in the bill add the following new 
     section:

     SEC.   . REPEAL OF DEPLETION ALLOWANCE FOR CERTAIN HARDROCK 
                   MINES.

       (a) In General.--The first sentence of section 611(a) of 
     the Internal Revenue Code of 1986, 26 U.S.C. 611(a), is 
     amended by inserting immediately after ``mines'' the 
     following: ``(except for hardrock mines located on land 
     subject to the general mining laws or on land patented under 
     the general mining laws unless such patented land was 
     acquired (subsequent to the date the patent was issued), 
     pursuant to an arms-length transaction prior to June 25, 
     1997)''.
       (b) Definition.--Section 611 of the Internal Revenue Code 
     of 1986 is amended by redesignating subsection (c) as 
     subsection (d) and inserting after subsection (b) the 
     following new subsection:
       ``(c) Definitions.--For purposes of subsection (a), 
     `general mining laws' means those Acts which comprise 
     chapters 2, 12A, and 16, and sections 161 and 162 of title 30 
     of the United States Code.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.
                                 ______
                                 

                 DURBIN (AND OTHERS) AMENDMENT NO. 519

  Mr. DURBIN (for himself, Mr. Dorgan, Mr. Daschle, and Mr. Harkin) 
proposed an amendment to the bill, S. 949, supra; as follows:

       On page 267, between lines 15 and 16, insert the following:

     SEC. 780. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
                   EMPLOYED INDIVIDUALS INCREASED.

       (a) In General.--Section 162(l)(1) (relating to special 
     rules for health insurance costs of self-employed 
     individuals) is amended to read as follows:
       ``(1) Allowance of deduction.--In the case of an individual 
     who is an employee within the meaning of section 401(c)(1), 
     there shall be allowed as a deduction under this section an 
     amount equal to the amount paid during the taxable year for 
     insurance which constitutes medical care for the taxpayer, 
     the taxpayer's spouse, and dependents.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.
       On page 337, beginning with line 14, strike all through 
     page 339, line 15, and insert the following:
       (a) Cigarettes.--Subsection (b) of section 5701 is 
     amended--
       (1) by striking ``$12 per thousand ($10 per thousand on 
     cigarettes removed during 1991 or 1992)'' in paragraph (1) 
     and insert ``$27.50 per thousand'', and
       (2) by striking ``$25.20 per thousand ($21 per thousand on 
     cigarettes removed during 1991 or 1992)'' in paragraph (2) 
     and insert ``$57.75 per thousand'',
       (b) Cigars.--Subsection (a) of section 5701 is amended--
       (1) by striking ``1.125 cents per thousand (93.75 cents per 
     thousand on cigars removed during 1991 or 1992)'' in 
     paragraph (1) and inserting ``$2.531 cents per thousand'', 
     and
       (2) by striking ``equal to'' and all that follows in 
     paragraph (2) and inserting ``equal to 28.6875 percent of the 
     price for which sold but not more than $67.50 per thousand.
       (c) Cigarette Papers.--Subsection (c) of section 5701 is 
     amended by striking ``0.75 cent (0.625 cent on cigarette 
     papers removed during 1991 or 1992)'' and inserting ``1.69 
     cents''.
       (d) Cigarette Tubes.--Subsection (d) of section 5701 is 
     amended by striking ``1.5 cents (1.25 cents on cigarette 
     tubes removed during 1991 or 1992)'' and inserting ``3.38 
     cents''.
       (e) Smokeless Tobacco.--Subsection (e) of section 5701 is 
     amended--
       (1) by striking ``36 cents (30 cents on snuff removed 
     during 1991 or 1992)'' in paragraph (1) and inserting 
     ``$1.9933 cents'', and
       (2) by striking ``12 cents (10 cents on chewing tobacco 
     removed during 1991 or 1992)'' in paragraph (2) and inserting 
     ``75.33 cents''.
       (f) Pipe Tobacco.--Subsection (f) of section 5701 is 
     amended by striking ``67.5 cents (56.25 cents on pipe tobacco 
     removed during 1991 or 1992)'' and inserting ``$1.5188 
     cents''.
       (g) Imposition of Excise Tax on Manufacture or Importation 
     of Roll-Your-Own Tobacco.--
       (1) In general.--Section 5701 (relating to rate of tax) is 
     amended by redesignating subsection (g) as subsection (h) and 
     by inserting after subsection (f) the following new 
     subsection:
       ``(g) Roll-Your-Own Tobacco.--On roll-your-own tobacco, 
     manufactured in or imported into the United States, there 
     shall be imposed a tax of 81 cents per pound (and a 
     proportionate tax at the like rate on all fractional parts of 
     a pound).''
                                 ______
                                 

                         ROTH AMENDMENT NO. 520

  Mr. ROTH proposed an amendment to the bill, S. 949, supra; as 
follows:

       At the appropriate place, insert the following:
          TITLE ____--CHILDREN'S HEALTH INSURANCE INITIATIVES

     SEC. ____. ESTABLISHMENT OF CHILDREN'S HEALTH INSURANCE 
                   INITIATIVES.

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

            ``TITLE XXI--CHILD HEALTH INSURANCE INITIATIVES

     ``SEC. 2101. PURPOSE.

       The purpose of this title is to provide funds to States to 
     enable such States to expand the provision of health 
     insurance coverage for low-income children. Funds provided 
     under this title shall be used to achieve this purpose 
     through outreach activities described in section 2106(a) and, 
     at the option of the State through--
       ``(1) a grant program conducted in accordance with section 
     2107 and the other requirements of this title; or
       ``(2) expansion of coverage of such children under the 
     State medicaid program who are not required to be provided 
     medical assistance under section 1902(l) (taking into account 
     the process of individuals aging into eligibility under 
     subsection (l)(1)(D)).

     ``SEC. 2102. DEFINITIONS.

       In this title:
       ``(1) Base-year covered low-income child population.--The 
     term `base-year covered low-income child population' means 
     the total number of low-income children with respect to whom, 
     as of fiscal year 1996, an eligible State provides or pays 
     the cost of health benefits either through a State funded 
     program or through eligibility under the State plan under 
     title XIX (including under a waiver of such plan), as 
     determined by the Secretary.
       ``(2) Child.--The term `child' means an individual under 19 
     years of age.
       ``(3) Eligible state.--The term `eligible State' means, 
     with respect to a fiscal year, a State that--
       ``(A) provides, under section 1902(l)(1)(D) or under a 
     waiver, for eligibility for medical assistance under a State 
     plan under title XIX of individuals under 19 years of age, 
     regardless of date of birth; and
       ``(B) has submitted to the Secretary under section 2104 a 
     program outline that--
       ``(i) sets forth how the State intends to use the funds 
     provided under this title to provide health insurance 
     coverage for low-income children consistent with the 
     provisions of this title; and
       ``(ii) is approved under section 2104; and
       ``(iii) otherwise satisfies the requirements of this title.
       ``(4) Federal medical assistance percentage.--The term 
     `Federal medical assistance percentage' means, with respect 
     to a State, the meaning given that term under section 
     1905(b).
       ``(5) FEHBP-equivalent children's health insurance 
     coverage.--The term `FEHBP-equivalent children's health 
     insurance coverage' means, with respect to a State, any plan 
     or arrangement that provides, or pays the cost of, health 
     benefits that the Secretary has certified are actuarially 
     equivalent to the benefits required to be offered for a child 
     under chapter 89 of title 5, United States Code, and that 
     otherwise satisfies State insurance standards and 
     requirements.
       ``(6) Indians.--The term `Indians' has the meaning given 
     that term in section 4(c) of the Indian Health Care 
     Improvement Act (25 U.S.C. 1601 et seq.).
       ``(7) Low-income child.--The term `low-income child' means 
     a child in a family whose income is below 200 percent of the 
     poverty line for a family of the size involved.
       ``(8) Poverty line.--The term `poverty line' has the 
     meaning given that term in section 673(2) of the Community 
     Services Block Grant Act (42 U.S.C. 9902(2)), including any 
     revision required by such section.
       ``(9) Secretary.--The term `Secretary' means the Secretary 
     of Health and Human Services.
       ``(10) State.--The term `State' means each of the 50 
     States, the District of Columbia, Puerto Rico, Guam, the 
     Virgin Islands, American Samoa, and the Northern Mariana 
     Islands.
       ``(11) State children's health expenditures.--The term 
     `State children's health

[[Page S6375]]

     expenditures' means the State share of expenditures by the 
     State for providing children with health care items and 
     services under--
       ``(A) the State plan for medical assistance under title 
     XIX;
       ``(B) the maternal and child health services block grant 
     program under title V;
       ``(C) the preventive health services block grant program 
     under part A of title XIX of the Public Health Services Act 
     (42 U.S.C. 300w et seq.);
       ``(D) State-funded programs that are designed to provide 
     health care items and services to children;
       ``(E) school-based health services programs;
       ``(F) State programs that provide uncompensated or indigent 
     health care;
       ``(G) county-indigent care programs for which the State 
     requires a matching share by a county government or for which 
     there are intergovernmental transfers from a county to State 
     government; and
       ``(H) any other program under which the Secretary 
     determines the State incurs uncompensated expenditures for 
     providing children with health care items and services.
       ``(12) State medicaid program.--The term `State medicaid 
     program' means the program of medical assistance provided 
     under title XIX.

     ``SEC. 2103. APPROPRIATION.

       ``(a) Appropriation.--
       ``(1) In general.--Subject to subsection (b), out of any 
     money in the Treasury of the United States not otherwise 
     appropriated, there is appropriated for the purpose of 
     carrying out this title--
       ``(A) for each of fiscal years 1998 and 1999, 
     $1,000,000,000;
       ``(B) for each of fiscal years 2000 through 2002, 
     $2,000,000,000; and
       ``(C) for each of fiscal years 2003 through 2007, $0.
       ``(2) Availability.--Funds appropriated under this section 
     shall remain available without fiscal year limitation, as 
     provided under section 2105(b)(4).
       ``(b) Reduction for Increased Medicaid Expenditures.--With 
     respect to each of the fiscal years described in subsection 
     (a)(1), the amount appropriated under subsection (a)(1) for 
     each such fiscal year shall be reduced by an amount equal to 
     the amount of the total Federal outlays under the medicaid 
     program under title XIX resulting from--
       ``(1) the amendment made by section 5732 of the Balanced 
     Budget Act of 1997 (regarding the State option to provide 12-
     month continuous eligibility for children);
       ``(2) increased enrollment under State plans approved under 
     such program as a result of outreach activities under section 
     2106(a); and
       ``(3) the requirement under section 2102(3)A) to provide 
     eligibility for medical assistance under the State plan under 
     title XIX for all children under 19 years of age who have 
     families with income that is at or below the poverty line.
       ``(c) State Entitlement.--This title 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 provided in accordance with the 
     provisions of this title.
       ``(d) Effective Date.--No State is eligible for payments 
     under section 2105 for any calendar quarter beginning before 
     October 1, 1997.

     ``SEC. 2104. PROGRAM OUTLINE.

       ``(a) General Description.--A State shall submit to the 
     Secretary a program outline, consistent with the requirements 
     of this title, that--
       ``(1) identifies which of the 2 options described in 
     section 2101 the State intends to use to provide low-income 
     children in the State with health insurance coverage;
       ``(2) describes the manner in which such coverage shall be 
     provided; and
       ``(3) provides such other information as the Secretary may 
     require.
       ``(b) Other Requirements.--The program outline submitted 
     under this section shall include the following:
       ``(1) Eligibility standards and methodologies.--A summary 
     of the standards and methodologies used to determine the 
     eligibility of low-income children for health insurance 
     coverage under a State program funded under this title.
       ``(2) Eligibility screening; coordination with other health 
     coverage.--A description of the procedures to be used to 
     ensure--
       ``(A) through both intake and followup screening, that only 
     low-income children are furnished health insurance coverage 
     through funds provided under this title; and
       ``(B) that any health insurance coverage provided for 
     children through funds under this title does not reduce the 
     number of children who are provided such coverage through any 
     other publicly or privately funded health plan.
       ``(3) Indians.--A description of how the State will ensure 
     that Indians are served through a State program funded under 
     this title.
       ``(c) Deadline for submission.--A State program outline 
     shall be submitted to the Secretary by not later than March 
     31 of any fiscal year (October 1, 1997, in the case of fiscal 
     year 1998).

     ``SEC. 2105. DISTRIBUTION OF FUNDS.

       ``(a) Establishment of Funding Pools.--
       ``(1) In general.--From the amount appropriated under 
     section 2103(a)(1) for each fiscal year, determined after the 
     reduction required under section 2103(b), the Secretary 
     shall, for purposes of fiscal year 1998, reserve 85 percent 
     of such amount for distribution to eligible States through 
     the basic allotment pool under subsection (b) and 15 percent 
     of such amount for distribution through the new coverage 
     incentive pool under subsection (c)(2)(B)(ii).
       ``(2) Annual adjustment of reserve percentages.--The 
     Secretary shall annually adjust the amount of the percentages 
     described in paragraph (1) in order to provide sufficient 
     basic allotments and sufficient new coverage incentives to 
     achieve the purpose of this title.
       ``(b) Distribution of Funds Under the Basic Allotment 
     Pool.--
       ``(1) States.--
       ``(A) In general.--From the total amount reserved under 
     subsection (a) for a fiscal year for distribution through the 
     basic allotment pool, the Secretary shall first set aside 
     0.25 percent for distribution under paragraph (2) and shall 
     allot from the amount remaining to each eligible State not 
     described in such paragraph the State's allotment percentage 
     for such fiscal year.
       ``(B) State's allotment percentage.--
       ``(i) In general.--For purposes of subparagraph (A), the 
     allotment percentage for a fiscal year for each State is the 
     percentage equal to the ratio of the number of low-income 
     children in the base period in the State to the total number 
     of low-income children in the base period in all States not 
     described in paragraph (2).
       ``(ii) Number of low-income children in the base period.--
     In clause (i), the number of low-income children in the base 
     period for a fiscal year in a State is equal to the average 
     of the number of low-income children in the State for the 
     period beginning on October 1, 1992, and ending on September 
     30, 1995, as reported in the March 1994, March 1995, and 
     March 1996 supplements to the Current Population Survey of 
     the Bureau of the Census.
       ``(2) Other states.--
       ``(A) In general.--From the amount set aside under 
     paragraph (1)(A) for each fiscal year, the Secretary shall 
     make allotments for such fiscal year in accordance with the 
     percentages specified in subparagraph (B) to Puerto Rico, 
     Guam, the Virgin Islands, American Samoa, and the Northern 
     Mariana Islands, if such States are eligible States for such 
     fiscal year.
       ``(B) Percentages specified.--The percentages specified in 
     this subparagraph are in the case of--
       ``(i) Puerto Rico, 91.6 percent;
       ``(ii) Guam, 3.5 percent;
       ``(iii) the Virgin Islands, 2.6 percent;
       ``(iv) American Samoa, 1.2 percent; and
       ``(v) the Northern Mariana Islands, 1.1 percent.
       ``(3) Three-year availability of amounts allotted.--Amounts 
     allotted to a State pursuant to this subsection for a fiscal 
     year shall remain available for expenditure by the State 
     through the end of the second succeeding fiscal year.
       ``(4) Procedure for distribution of unused funds.--The 
     Secretary shall determine an appropriate procedure for 
     distribution of funds to eligible States that remain unused 
     under this subsection after the expiration of the 
     availability of funds required under paragraph (3). Such 
     procedure shall be developed and administered in a manner 
     that is consistent with the purpose of this title.
       ``(c) Payments.--
       ``(1) In general.--The Secretary shall--
       ``(A) before October 1 of any fiscal year, pay an eligible 
     State an amount equal to 1 percent of the amount allotted to 
     the State under subsection (b) for conducting the outreach 
     activities required under section 2106(a); and
       ``(B) make quarterly fiscal year payments to an eligible 
     State from the amount remaining of such allotment for such 
     fiscal year in an amount equal to the Federal medical 
     assistance percentage for the State, as determined under 
     section 1905(b)(1), of the cost of providing health insurance 
     coverage for a low-income child in the State plus the 
     applicable bonus amount.
       ``(2) Applicable bonus.--
       ``(A) In general.--For purposes of paragraph (1), the 
     applicable bonus amount is--
       ``(i) 5 percent of the cost, with respect to a period, of 
     providing health insurance coverage for the base-year covered 
     low-income child population (measured in full year 
     equivalency); and
       ``(ii) 10 percent of the cost, with respect to a period, of 
     providing health insurance coverage for the number (as so 
     measured) of low-income children that are in excess of such 
     population.
       ``(B) Source of bonuses.--
       ``(i) Base-year covered low-income child population.--A 
     bonus described in subparagraph (A)(i) shall be paid out of 
     an eligible State's allotment for a fiscal year.
       ``(ii) For other low-income child populations.--A bonus 
     described in subparagraph (A)(ii) shall be paid out of the 
     new coverage incentive pool reserved under subsection (a)(1).
       ``(3) Definition of cost of providing health insurance 
     coverage.--For purposes of this subsection the cost of 
     providing health insurance coverage for a low-income child in 
     the State means--
       ``(A) in the case of an eligible State that opts to use 
     funds provided under this title through the medicaid program, 
     the cost of providing such child with medical assistance 
     under the State plan under title XIX; and

[[Page S6376]]

       ``(B) in the case of an eligible State that opts to use 
     funds provided under this title under section 2107, the cost 
     of providing such child with health insurance coverage under 
     such section.
       ``(4) Limitation on total payments.--With respect to a 
     fiscal year, the total amount paid to an eligible State under 
     this title (including any bonus payments) shall not exceed 85 
     percent of the total cost of a State program conducted under 
     this title for such fiscal year.
       ``(5) Maintenance of effort.--No funds shall be paid to a 
     State under this title if--
       ``(A) in the case of fiscal year 1998, the State children's 
     health expenditures are less than the amount of such 
     expenditures for fiscal year 1996; and
       ``(B) in the case of any succeeding fiscal year, the State 
     children's health expenditures described in section 
     2102(11)(A) are less than the amount of such expenditures for 
     fiscal year 1996, increased by a medicaid child population 
     growth factor determined by the Secretary.
       ``(6) Advance payment; retrospective adjustment.--The 
     Secretary may make payments under this subsection for each 
     quarter on the basis of advance estimates of expenditures 
     submitted by the State and such other investigation as the 
     Secretary may find necessary, and shall reduce or increase 
     the payments as necessary to adjust for any overpayment or 
     underpayment for prior quarters.

     ``SEC. 2106. USE OF FUNDS.

       ``(a) Set-Aside for Outreach Activities.--
       ``(1) In general.--From the amount allotted to a State 
     under section 2105(b) for a fiscal year, each State shall 
     conduct outreach activities described in paragraph (2).
       ``(2) Outreach activities described.--The outreach 
     activities described in this paragraph include activities 
     to--
       ``(A) identify and enroll children who are eligible for 
     medical assistance under the State plan under title XIX; and
       ``(B) conduct public awareness campaigns to encourage 
     employers to provide health insurance coverage for children.
       ``(b) State Options for Remainder.--A State may use the 
     amount remaining of the allotment to a State under section 
     2105(b) for a fiscal year, determined after the payment 
     required under section 2105(c)(1)(A), in accordance with 
     section 2107 or the State medicaid program (but not both).
       ``(c) Prohibition on use for abortions.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     funds provided under this title may be used to pay for any 
     abortion or to assist in the purchase, in whole or in part, 
     of health benefit coverage that includes coverage of 
     abortion.
       ``(2) Exception.--Paragraph (1) shall not apply to an 
     abortion if necessary to save the life of the mother or if 
     the pregnancy is the result of an act of rape or incest.
       ``(d) Use Limited to State Program Expenditures.--Funds 
     provided to an eligible State under this title shall only be 
     used to carry out the purpose of this title.
       ``(e) Administrative expenditures.--Not more than 10 
     percent of the amount allotted to a State under section 
     2105(b), determined after the payment required under section 
     2105(c)(1)(A), shall be used for administrative expenditures 
     for the program funded under this title.
       ``(f) Nonapplication of Five-Year Limited Eligibility for 
     Means-Tested Public Benefits.--The provisions of section 403 
     of the Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 (8 U.S.C. 1613) shall not apply 
     with respect to a State program funded under this title.

     ``SEC. 2107. STATE OPTION FOR THE PURCHASE OR PROVISION OF 
                   CHILDREN'S HEALTH INSURANCE.

       ``(a) State Option.--
       ``(1) In general.--An eligible State that opts to use funds 
     provided under this title under this section shall use such 
     funds to--
       ``(A) subsidize payment of employee contributions for 
     health insurance coverage for a dependent low-income child 
     that is available through group health insurance coverage 
     offered by an employer in the State; or
       ``(B) to provide FEHBP-equivalent children's health 
     insurance coverage for low-income children who reside in the 
     State.
       ``(2) Priority for low-income children.--A State that uses 
     funds provided under this title under this section shall not 
     cover low-income children with higher family income without 
     covering such children with a lower family income.
       ``(3) Determination of eligibility and form of 
     assistance.--An eligible State may establish any additional 
     eligibility criteria for the provision of health insurance 
     coverage for a low-income child through funds provided under 
     this title, so long as such criteria and assistance are 
     consistent with the purpose and provisions of this title.
       ``(4) Coverage of certain benefits.--Any eligible State 
     that opts to use funds provided under this title under this 
     section for the coverage described in paragraph (1)(B) is 
     encouraged to include as part of such coverage, coverage for 
     items and services needed for vision, hearing, and dental 
     health.
       ``(b) Nonentitlement.--Nothing in this section shall be 
     construed as providing an entitlement for an individual or 
     person to any health insurance coverage, assistance, or 
     service provided through a State program funded under this 
     title. If, with respect to a fiscal year, an eligible State 
     determines that the funds provided under this title are not 
     sufficient to provide health insurance coverage for all the 
     low-income children that the State proposes to cover in the 
     State program outline submitted under section 2104 for such 
     fiscal year, the State may adjust the applicable eligibility 
     criteria for such children appropriately or adjust the State 
     program in another manner specified by the Secretary, so long 
     as any such adjustments are consistent with the purpose of 
     this title.

     ``SEC. 2108. PROGRAM INTEGRITY.

       ``The following provisions of the Social Security Act shall 
     apply to eligible States under this title in the same manner 
     as such provisions apply to a State under title XIX:
       ``(1) Section 1116 (relating to administrative and judicial 
     review).
       ``(2) Section 1124 (relating to disclosure of ownership and 
     related information).
       ``(3) Section 1126 (relating to disclosure of information 
     about certain convicted individuals).
       ``(4) Section 1128A (relating to exclusion from individuals 
     and entities from participation in State health care plans).
       ``(5) Section 1128B(d) (relating to criminal penalties for 
     certain additional charges).
       ``(6) Section 1132 (relating to periods within which claims 
     must be filed).
       ``(7) Section 1902(a)(4)(C) (relating to conflict of 
     interest standards).
       ``(8) Section 1903(i) (relating to limitations on payment).
       ``(9) Section 1903(w) (relating to limitations on provider 
     taxes and donations).
       ``(10) Section 1905(a)(B) (relating to the exclusion of 
     care or services for any individual who has not attained 65 
     years of age and who is a patient in an institution for 
     mental diseases from the definition of medical assistance).
       ``(11) Section 1921 (relating to state licensure 
     authorities).
       ``(12) Sections 1902(a)(25), 1912(a)(1)(A), and 1903(o) 
     (insofar as such sections relate to third party liability).

     ``SEC. 2109. ANNUAL REPORTS.

       ``(a) Annual State Assessment of Progress.--An eligible 
     State shall--
       ``(1) assess the operation of the State program funded 
     under this title in each fiscal year, including the progress 
     made in providing health insurance coverage for low-income 
     children; and
       ``(2) report to the Secretary, by January 1 following the 
     end of the fiscal year, on the result of the assessment.
       ``(b) Report of the Secretary.--The Secretary shall submit 
     to the appropriate committees of Congress an annual report 
     and evaluation of the State programs funded under this title 
     based on the State assessments and reports submitted under 
     subsection (a). Such report shall include any conclusions and 
     recommendations that the Secretary considers appropriate.''.
       (b) Conforming Amendment.--Section 1128(h) (42 U.S.C. 
     1320a-7(h)) is amended by--
       (1) in paragraph (2), by striking ``or'' at the end;
       (2) in paragraph (3), by striking the period and inserting 
     ``, or''; and
       (3) by adding at the end the following:
       ``(4) a program funded under title XXI.''.

     SEC. ____. APPLICABILITY.

       If, on the date of enactment of this Act, the Social 
     Security Act contains a title XXI, the amendments made to the 
     Social Security Act by this title shall not take effect, 
     except that amounts appropriated under such title XXI for a 
     fiscal year shall be increased by the amounts that would have 
     been appropriated for such fiscal year under section 2103 of 
     the Social Security Act, as added by this title.
                                 ______
                                 

                         ROTH AMENDMENT NO. 521

  Mr. ROTH proposed an amendment to amendment No. 520 proposed by him 
to the bill, S. 949, supra; as follows:

       On page 1, line 2 of the amendment strike all after the 
     first word and insert the following:
             ____--CHILDREN'S HEALTH INSURANCE INITIATIVES

     SEC. ____. ESTABLISHMENT OF CHILDREN'S HEALTH INSURANCE 
                   INITIATIVES.

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

            ``TITLE XXI--CHILD HEALTH INSURANCE INITIATIVES

     ``SEC. 2101. PURPOSE.

       ``The purpose of this title is to provide funds to States 
     to enable such States to expand the provision of health 
     insurance coverage for low-income children. Funds provided 
     under this title shall be used to achieve this purpose 
     through outreach activities described in section 2106(a) and, 
     at the option of the State through--
       ``(1) a grant program conducted in accordance with section 
     2107 and the other requirements of this title; or
       ``(2) expansion of coverage of such children under the 
     State medicaid program who are not required to be provided 
     medical assistance under section 1902(l) (taking into account 
     the process of individuals aging into eligibility under 
     subsection (l)(1)(D)).

     ``SEC. 2102. DEFINITIONS.

       ``In this title:
       ``(1) Base-year covered low-income child population.--The 
     term `base-year covered low-income child population' means 
     the total number of low-income children with respect to whom, 
     as of fiscal year 1996, an eligible State provides or pays 
     the cost of health benefits either through a State funded 
     program or through expanded eligibility under the State plan 
     under title XIX (including

[[Page S6377]]

     under a waiver of such plan), as determined by the Secretary. 
     Such term does not include any low-income child described in 
     paragraph (3)(A) that a State must cover in order to be 
     considered an eligible State under this title.
       ``(2) Child.--The term `child' means an individual under 19 
     years of age.
       ``(3) Eligible state.--The term `eligible State' means, 
     with respect to a fiscal year, a State that--
       ``(A) provides, under section 1902(l)(1)(D) or under a 
     waiver, for eligibility for medical assistance under a State 
     plan under title XIX of individuals under 17 years of age in 
     fiscal year 1998, and under 19 years of age in fiscal year 
     2000, regardless of date of birth;
       ``(B) has submitted to the Secretary under section 2104 a 
     program outline that--
       ``(i) sets forth how the State intends to use the funds 
     provided under this title to provide health insurance 
     coverage for low-income children consistent with the 
     provisions of this title; and
       ``(ii) is approved under section 2104; and
       ``(iii) otherwise satisfies the requirements of this title; 
     and
       ``(C) satisfies the maintenance of effort requirement 
     described in section 2105(c)(5).''.
       ``(4) Federal medical assistance percentage.--The term 
     `Federal medical assistance percentage' means, with respect 
     to a State, the meaning given that term under section 
     1905(b). Any cost-sharing imposed under this title may not be 
     included in determining Federal medical assistance percentage 
     for reimbursement of expenditures under a State program 
     funded under this title.
       ``(5) FEHBP-equivalent children's health insurance 
     coverage.--The term `FEHBP-equivalent children's health 
     insurance coverage' means, with respect to a State, any plan 
     or arrangement that provides, or pays the cost of, health 
     benefits that the Secretary has certified are equivalent to 
     or better than the services covered for a child, including 
     hearing and vision services, under the standard Blue Cross/
     Blue Shield preferred provider option service benefit plan 
     offered under chapter 89 of title 5, United States Code.
       ``(6) Indians.--The term `Indians' has the meaning given 
     that term in section 4(c) of the Indian Health Care 
     Improvement Act (25 U.S.C. 1601 et seq.).
       ``(7) Low-income child.--The term `low-income child' means 
     a child in a family whose income is below 200 percent of the 
     poverty line for a family of the size involved.
       ``(8) Poverty line.--The term `poverty line' has the 
     meaning given that term in section 673(2) of the Community 
     Services Block Grant Act (42 U.S.C. 9902(2)), including any 
     revision required by such section.
       ``(9) Secretary.--The term `Secretary' means the Secretary 
     of Health and Human Services.
       ``(10) State.--The term `State' means each of the 50 
     States, the District of Columbia, Puerto Rico, Guam, the 
     Virgin Islands, American Samoa, and the Northern Mariana 
     Islands.
       ``(11) State children's health expenditures.--The term 
     `State children's health expenditures' means the State share 
     of expenditures by the State for providing children with 
     health care items and services under--
       ``(A) the State plan for medical assistance under title 
     XIX;
       ``(B) the maternal and child health services block grant 
     program under title V;
       ``(C) the preventive health services block grant program 
     under part A of title XIX of the Public Health Services Act 
     (42 U.S.C. 300w et seq.);
       ``(D) State-funded programs that are designed to provide 
     health care items and services to children;
       ``(E) school-based health services programs;
       ``(F) State programs that provide uncompensated or indigent 
     health care;
       ``(G) county-indigent care programs for which the State 
     requires a matching share by a county government or for which 
     there are intergovernmental transfers from a county to State 
     government; and
       ``(H) any other program under which the Secretary 
     determines the State incurs uncompensated expenditures for 
     providing children with health care items and services.
       ``(12) State medicaid program.--The term `State medicaid 
     program' means the program of medical assistance provided 
     under title XIX.

     ``SEC. 2103. APPROPRIATION.

       ``(a) Appropriation.--
       ``(1) In general.--Subject to subsection (b), out of any 
     money in the Treasury of the United States not otherwise 
     appropriated, there is appropriated for the purpose of 
     carrying out this title--
       ``(A) for each of fiscal years 1998 and 1999, 
     $1,000,000,000;
       ``(B) for each of fiscal years 2000 through 2002, 
     $2,000,000,000; and
       ``(C) for each of fiscal years 2003 through 2007, $0.
       ``(2) Availability.--Funds appropriated under this section 
     shall remain available without fiscal year limitation, as 
     provided under section 2105(b)(4).
       ``(b) Reduction for Increased Medicaid Expenditures.--With 
     respect to each of the fiscal years described in subsection 
     (a)(1), the amount appropriated under subsection (a)(1) for 
     each such fiscal year shall be reduced by an amount equal to 
     the amount of the total Federal outlays under the medicaid 
     program under title XIX resulting from--
       ``(1) the amendment made by section 5732 of the Balanced 
     Budget Act of 1997 (regarding the State option to provide 12-
     month continuous eligibility for children);
       ``(2) increased enrollment under State plans approved under 
     such program as a result of outreach activities under section 
     2106(a); and
       ``(3) the requirement under section 2102(3)A) to provide 
     eligibility for medical assistance under the State plan under 
     title XIX for all children under 19 years of age who have 
     families with income that is at or below the poverty line.
       ``(c) State Entitlement.--This title 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 provided in accordance with the 
     provisions of this title.
       ``(d) Effective Date.--No State is eligible for payments 
     under section 2105 for any calendar quarter beginning before 
     October 1, 1997.

     ``SEC. 2104. PROGRAM OUTLINE.

       ``(a) General Description.--A State shall submit to the 
     Secretary for approval a program outline, consistent with the 
     requirements of this title, that--
       ``(1) identifies, on or after the date of enactment of the 
     Balanced Budget Act of 1997, which of the 2 options described 
     in section 2101 the State intends to use to provide low-
     income children in the State with health insurance coverage;
       ``(2) describes the manner in which such coverage shall be 
     provided; and
       ``(3) provides such other information as the Secretary may 
     require.
       ``(b) Other Requirements.--The program outline submitted 
     under this section shall include the following:
       ``(1) Eligibility standards and methodologies.--A summary 
     of the standards and methodologies used to determine the 
     eligibility of low-income children for health insurance 
     coverage under a State program funded under this title.
       ``(2) Eligibility screening; coordination with other health 
     coverage.--A description of the procedures to be used to 
     ensure--
       ``(A) through both intake and followup screening, that only 
     low-income children are furnished health insurance coverage 
     through funds provided under this title; and
       ``(B) that any health insurance coverage provided for 
     children through funds under this title does not reduce the 
     number of children who are provided such coverage through any 
     other publicly or privately funded health plan.
       ``(3) Indians.--A description of how the State will ensure 
     that Indians are served through a State program funded under 
     this title.
       ``(c) Deadline for submission.--A State program outline 
     shall be submitted to the Secretary by not later than March 
     31 of any fiscal year (October 1, 1997, in the case of fiscal 
     year 1998).

     ``SEC. 2105. DISTRIBUTION OF FUNDS.

       ``(a) Establishment of Funding Pools.--
       ``(1) In general.--From the amount appropriated under 
     section 2103(a)(1) for each fiscal year, determined after the 
     reduction required under section 2103(b), the Secretary 
     shall, for purposes of fiscal year 1998, reserve 85 percent 
     of such amount for distribution to eligible States through 
     the basic allotment pool under subsection (b) and 15 percent 
     of such amount for distribution through the new coverage 
     incentive pool under subsection (c)(2)(B)(ii).
       ``(2) Annual adjustment of reserve percentages.--The 
     Secretary shall annually adjust the amount of the percentages 
     described in paragraph (1) in order to provide sufficient 
     basic allotments and sufficient new coverage incentives to 
     achieve the purpose of this title.
       ``(b) Distribution of Funds Under the Basic Allotment 
     Pool.--
       ``(1) States.--
       ``(A) In general.--From the total amount reserved under 
     subsection (a) for a fiscal year for distribution through the 
     basic allotment pool, the Secretary shall first set aside 
     0.25 percent for distribution under paragraph (2) and shall 
     allot from the amount remaining to each eligible State not 
     described in such paragraph the State's allotment percentage 
     for such fiscal year.
       ``(B) State's allotment percentage.--
       ``(i) In general.--For purposes of subparagraph (A), the 
     allotment percentage for a fiscal year for each State is the 
     percentage equal to the ratio of the number of low-income 
     children in the base period in the State to the total number 
     of low-income children in the base period in all States not 
     described in paragraph (2).
       ``(ii) Number of low-income children in the base period.--
     In clause (i), the number of low-income children in the base 
     period for a fiscal year in a State is equal to the average 
     of the number of low-income children in the State for the 
     period beginning on October 1, 1992, and ending on September 
     30, 1995, as reported in the March 1994, March 1995, and 
     March 1996 supplements to the Current Population Survey of 
     the Bureau of the Census.
       ``(2) Other states.--
       ``(A) In general.--From the amount set aside under 
     paragraph (1)(A) for each fiscal year, the Secretary shall 
     make allotments for such fiscal year in accordance with the 
     percentages specified in subparagraph (B) to Puerto Rico, 
     Guam, the Virgin Islands, American Samoa, and the Northern 
     Mariana Islands, if such States are eligible States for such 
     fiscal year.

[[Page S6378]]

       ``(B) Percentages specified.--The percentages specified in 
     this subparagraph are in the case of--
       ``(i) Puerto Rico, 91.6 percent;
       ``(ii) Guam, 3.5 percent;
       ``(iii) the Virgin Islands, 2.6 percent;
       ``(iv) American Samoa, 1.2 percent; and
       ``(v) the Northern Mariana Islands, 1.1 percent.
       ``(3) Three-year availability of amounts allotted.--Amounts 
     allotted to a State pursuant to this subsection for a fiscal 
     year shall remain available for expenditure by the State 
     through the end of the second succeeding fiscal year.
       ``(4) Procedure for distribution of unused funds.--The 
     Secretary shall determine an appropriate procedure for 
     distribution of funds to eligible States that remain unused 
     under this subsection after the expiration of the 
     availability of funds required under paragraph (3). Such 
     procedure shall be developed and administered in a manner 
     that is consistent with the purpose of this title.
       ``(c) Payments.--
       ``(1) In general.--The Secretary shall--
       ``(A) before October 1 of any fiscal year, pay an eligible 
     State an amount equal to 1 percent of the amount allotted to 
     the State under subsection (b) for conducting the outreach 
     activities required under section 2106(a); and
       ``(B) make quarterly fiscal year payments to an eligible 
     State from the amount remaining of such allotment for such 
     fiscal year in an amount equal to the Federal medical 
     assistance percentage for the State (as defined under section 
     2102(4) and determined without regard to the amount of 
     Federal funds received by the State under title XIX before 
     the date of enactment of this title) of the Federal and State 
     incurred cost of providing health insurance coverage for a 
     low-income child in the State plus the applicable bonus 
     amount.
       ``(2) Applicable bonus.--
       ``(A) In general.--For purposes of paragraph (1), the 
     applicable bonus amount is--
       ``(i) 5 percent of the Federal and State incurred cost, 
     with respect to a period, of providing health insurance 
     coverage for children covered at State option among the base-
     year covered low-income child population (measured in full 
     year equivalency) (including such children covered by the 
     State through expanded eligibility under the medicaid program 
     under title XIX before the date of enactment of this title, 
     but excluding any low-income child described in section 
     2102(3)(A) that a State must cover in order to be considered 
     an eligible State under this title); and
       ``(ii) 10 percent of the Federal and State incurred cost, 
     with respect to a period, of providing health insurance 
     coverage for children covered at State option among the 
     number (as so measured) of low-income children that are in 
     excess of such population.
       ``(B) Source of bonuses.--
       ``(i) Base-year covered low-income child population.--A 
     bonus described in subparagraph (A)(i) shall be paid out of 
     an eligible State's allotment for a fiscal year.
       ``(ii) For other low-income child populations.--A bonus 
     described in subparagraph (A)(ii) shall be paid out of the 
     new coverage incentive pool reserved under subsection (a)(1).
       ``(3) Definition of cost of providing health insurance 
     coverage.--For purposes of this subsection the cost of 
     providing health insurance coverage for a low-income child in 
     the State means--
       ``(A) in the case of an eligible State that opts to use 
     funds provided under this title through the medicaid program, 
     the cost of providing such child with medical assistance 
     under the State plan under title XIX; and
       ``(B) in the case of an eligible State that opts to use 
     funds provided under this title under section 2107, the cost 
     of providing such child with health insurance coverage under 
     such section.
       ``(4) Limitation on total payments.--With respect to a 
     fiscal year, the total amount paid to an eligible State under 
     this title (including any bonus payments) shall not exceed 85 
     percent of the total cost of a State program conducted under 
     this title for such fiscal year.
       ``(5) Maintenance of effort.--
       ``(A) Deemed compliance.--A State shall be deemed to be in 
     compliance with this provision if--
       ``(i) it does not adopt income and resource standards and 
     methodologies that are more restrictive than those applied as 
     of June 1, 1997, for purposes of determining a child's 
     eligibility for medical assistance under the State plan under 
     title XIX; and
       ``(ii) in the case of fiscal year 1998 and each fiscal year 
     thereafter, the State children's health expenditures defined 
     in section 2102(11) are not less than the amount of such 
     expenditures for fiscal year 1996.
       ``(B) Failure to maintain medicaid standards and 
     methodologies.--A State that fails to meet the conditions 
     described in subparagraph (A) shall not receive--
       ``(i) funds under this title for any child that would be 
     determined eligible for medical assistance under the State 
     plan under title XIX using the income and resource standards 
     and methodologies applied under such plan as of June 1, 1997; 
     and
       ``(ii) any bonus amounts described in paragraph (2)(A)(ii).
       ``(C) Failure to maintain spending on child health 
     programs.--A State that fails to meet the condition described 
     in subparagraph (A)(ii) shall not receive funding under this 
     title.
       ``(6) Advance payment; retrospective adjustment.--The 
     Secretary may make payments under this subsection for each 
     quarter on the basis of advance estimates of expenditures 
     submitted by the State and such other investigation as the 
     Secretary may find necessary, and shall reduce or increase 
     the payments as necessary to adjust for any overpayment or 
     underpayment for prior quarters.

     ``SEC. 2106. USE OF FUNDS.

       ``(a) Set-Aside for Outreach Activities.--
       ``(1) In general.--From the amount allotted to a State 
     under section 2105(b) for a fiscal year, each State shall 
     conduct outreach activities described in paragraph (2).
       ``(2) Outreach activities described.--The outreach 
     activities described in this paragraph include activities 
     to--
       ``(A) identify and enroll children who are eligible for 
     medical assistance under the State plan under title XIX; and
       ``(B) conduct public awareness campaigns to encourage 
     employers to provide health insurance coverage for children.
       ``(b) State Options for Remainder.--A State may use the 
     amount remaining of the allotment to a State under section 
     2105(b) for a fiscal year, determined after the payment 
     required under section 2105(c)(1)(A), in accordance with 
     section 2107 or the State medicaid program (but not both). 
     Nothing in the preceding sentence shall be construed as 
     limiting a State's eligibility for receiving the 5 percent 
     bonus described in section 2105(c)(2)(A)(i) for children 
     covered by the State through expanded eligibility under the 
     medicaid program under title XIX before the date of enactment 
     of this title.
       ``(c) Prohibition On Use of Funds.--No funds provided under 
     this title may be used to provide health insurance coverage 
     for--
       ``(1) families of State public employees; or
       ``(2) children who are committed to a penal institution.
       ``(d) Use Limited to State Program Expenditures.--Funds 
     provided to an eligible State under this title shall only be 
     used to carry out the purpose of this title (as described in 
     section 2101), and any health insurance coverage provided 
     with such funds may include coverage of abortion only if 
     necessary to save the life of the mother or if the pregnancy 
     is the result of an act of rape or incest.
       ``(e) Administrative expenditures.--
       ``(1) In general.--Not more than the applicable percentage 
     of the amount allotted to a State under section 2105(b) for a 
     fiscal year, determined after the payment required under 
     section 2105(c)(1)(A), shall be used for administrative 
     expenditures for the program funded under this title.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage with respect to a fiscal year 
     is--
       ``(A) for the first 2 years of a State program funded under 
     this title, 10 percent;
       ``(B) for the third year of a State program funded under 
     this title, 7.5 percent; and
       ``(C) for the fourth year of a State program funded under 
     this title and each year thereafter, 5 percent.
       ``(f) Nonapplication of Five-Year Limited Eligibility for 
     Means-Tested Public Benefits.--The provisions of section 403 
     of the Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 (8 U.S.C. 1613) shall not apply 
     with respect to a State program funded under this title.
       ``(g) Audits.--The provisions of section 506(b) shall apply 
     to funds expended under this title to the same extent as they 
     apply to title V.
       ``(h) Requirement to Follow State Program Outline.--The 
     State shall conduct the program in accordance with the 
     program outline approved by the Secretary under section 2104.

     ``SEC. 2107. STATE OPTION FOR THE PURCHASE OR PROVISION OF 
                   CHILDREN'S HEALTH INSURANCE.

       ``(a) State Option.--
       ``(1) In general.--An eligible State that opts to use funds 
     provided under this title under this section shall use such 
     funds to provide FEHBP-equivalent children's health insurance 
     coverage for low-income children who reside in the State.
       ``(2) Priority for low-income children.--A State that uses 
     funds provided under this title under this section shall not 
     cover low-income children with higher family income without 
     covering such children with a lower family income.
       ``(3) Determination of eligibility and form of 
     assistance.--An eligible State may establish any additional 
     eligibility criteria for the provision of health insurance 
     coverage for a low-income child through funds provided under 
     this title, so long as such criteria and assistance are 
     consistent with the purpose and provisions of this title.
       ``(4) Affordability.--An eligible State may impose any 
     family premium obligations or cost-sharing requirements 
     otherwise permitted under this title on low-income children 
     with family incomes that exceed 150 percent of the poverty 
     line. In the case of a low-income child whose family income 
     is at or below 150 percent of the poverty line, limits on 
     beneficiary costs generally applicable under title XIX apply 
     to coverage provided such children under this section.
       ``(b) Nonentitlement.--Nothing in this section shall be 
     construed as providing an entitlement for an individual or 
     person to any health insurance coverage, assistance, or 
     service provided through a State program funded under this 
     title. If, with respect to a fiscal year, an eligible State 
     determines that the funds provided under this title are not 
     sufficient to provide health insurance coverage for all the 
     low-income children that

[[Page S6379]]

     the State proposes to cover in the State program outline 
     submitted under section 2104 for such fiscal year, the State 
     may adjust the applicable eligibility criteria for such 
     children appropriately or adjust the State program in another 
     manner specified by the Secretary, so long as any such 
     adjustments are consistent with the purpose of this title.

     ``SEC. 2108. PROGRAM INTEGRITY.

       ``The following provisions of the Social Security Act shall 
     apply to eligible States under this title in the same manner 
     as such provisions apply to a State under title XIX:
       ``(1) Section 1116 (relating to administrative and judicial 
     review).
       ``(2) Section 1124 (relating to disclosure of ownership and 
     related information).
       ``(3) Section 1126 (relating to disclosure of information 
     about certain convicted individuals).
       ``(4) Section 1128 (relating to exclusion from individuals 
     and entities from participation in State health care plans).
       ``(5) Section 1128A (relating to civil monetary penalties).
       ``(6) Section 1128B (relating to criminal penalties).
       ``(7) Section 1132 (relating to periods within which claims 
     must be filed).
       ``(8) Section 1902(a)(4)(C) (relating to conflict of 
     interest standards).
       ``(9) Section 1903(i) (relating to limitations on payment).
       ``(10) Section 1903(m)(5) (as in effect on the day before 
     the date of enactment of the Balanced Budget Act of 1997).
       ``(11) Section 1903(w) (relating to limitations on provider 
     taxes and donations).
       ``(12) Section 1905(a)(B) (relating to the exclusion of 
     care or services for any individual who has not attained 65 
     years of age and who is a patient in an institution for 
     mental diseases from the definition of medical assistance).
       ``(13) Section 1921 (relating to state licensure 
     authorities).
       ``(14) Sections 1902(a)(25), 1912(a)(1)(A), and 1903(o) 
     (insofar as such sections relate to third party liability).
       ``(15) Sections 1948 and 1949 (as added by section 
     5701(a)(2) of the Balanced Budget Act of 1997).

     ``SEC. 2109. ANNUAL REPORTS.

       ``(a) Annual State Assessment of Progress.--An eligible 
     State shall--
       ``(1) assess the operation of the State program funded 
     under this title in each fiscal year, including the progress 
     made in providing health insurance coverage for low-income 
     children; and
       ``(2) report to the Secretary, by January 1 following the 
     end of the fiscal year, on the result of the assessment.
       ``(b) Report of the Secretary.--The Secretary shall submit 
     to the appropriate committees of Congress an annual report 
     and evaluation of the State programs funded under this title 
     based on the State assessments and reports submitted under 
     subsection (a). Such report shall include any conclusions and 
     recommendations that the Secretary considers appropriate.''.
       (b) Conforming Amendment.--Section 1128(h) (42 U.S.C. 
     1320a-7(h)) is amended by--
       (1) in paragraph (2), by striking ``or'' at the end;
       (2) in paragraph (3), by striking the period and inserting 
     ``, or''; and
       (3) by adding at the end the following:
       ``(4) a program funded under title XXI.''.

     SEC. ____. APPLICABILITY.

       If, on the date of enactment of this Act, the Social 
     Security Act contains a title XXI, the amendments made to the 
     Social Security Act by this title shall not take effect, 
     except that amounts appropriated under such title XXI for a 
     fiscal year shall be increased by the amounts that would have 
     been appropriated for such fiscal year under section 2103 of 
     the Social Security Act, as added by this title.
                                 ______
                                 

                       JEFFORDS AMENDMENT NO. 522

  Mr. JEFFORDS proposed an amendment to the bill, S. 949, supra; as 
follows:

       Beginning on page 168, line 8, strike all through page 174, 
     line 19, and insert the following:

     ``SEC. 1400B. TRUST FUND FOR DC SCHOOLS.

       ``(a) Creation of Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Trust Fund for DC Schools', consisting of such amounts as 
     may be appropriated or credited to the Fund as provided in 
     this section.
       ``(b) Transfer to Trust Fund of Amounts Equivalent to 
     Certain Taxes.--
       ``(1) In general.--There are hereby appropriated to the 
     Trust Fund for DC Schools amounts equivalent to the revenues 
     received in the Treasury from the applicable percentage of 
     the income taxes imposed by this chapter after December 31, 
     1997, and before January 1, 2003, on individual taxpayers 
     during their residency in the District of Columbia.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the term `applicable percentage' means the percentage 
     necessary, as determined by the Secretary, to result in 
     revenues equal to the net losses in revenues to the Treasury 
     that would have occurred during the period beginning after 
     December 31, 1997, and before January 1, 2003, if the section 
     identified as section 1400B of the Internal Revenue Code of 
     1986 as added by section 601 of S. 949, 105th Congress, as 
     reported by the Committee on Finance of the Senate, had been 
     enacted.
       ``(3) Transfer of amounts.--The amounts appropriated by 
     paragraph (1) shall be transferred at least monthly from the 
     general fund of the Treasury to the Trust Fund for DC Schools 
     on the basis of estimates made by the Secretary of the 
     amounts referred to in such paragraph. Proper adjustments 
     shall be made in the amounts subsequently transferred to the 
     extent prior estimates were in excess of or less than the 
     amounts required to be transferred.
       ``(c) Expenditures From Fund.--
       ``(1) In general.--Amounts in the Trust Fund for DC Schools 
     shall be available, without fiscal year limitation, in an 
     amount not to exceed $70,000,000 for the period beginning 
     after December 31, 1997, and ending before January 1, 2008, 
     for qualified service expenses with respect to State or local 
     bonds issued by the District of Columbia to finance the 
     construction, rehabilitation, and repair of schools under the 
     jurisdiction of the government of the District of Columbia.
       ``(2) Qualified service expenses.--The term `qualified 
     service expenses' means expenses incurred after December 31, 
     1997, and certified by the District of Columbia Control Board 
     as meeting the requirements of paragraph (1) after giving 60-
     day notice of any proposed certification to the Subcommittees 
     on the District of Columbia of the Committees on 
     Appropriations of the House of Representatives and the 
     Senate.
       ``(d) Report.--It shall be the duty of the Secretary to 
     hold the Trust Fund for DC Schools and to report to the 
     Congress each year on the financial condition and the 
     results of the operations of such Fund during the 
     preceding fiscal year and on its expected condition and 
     operations during the next fiscal year. Such report shall 
     be printed as a House document of the session of the 
     Congress to which the report is made.
       ``(e) Investment.--
       ``(1) In general.--It shall be the duty of the Secretary to 
     invest such portion of the Trust Fund for DC Schools as is 
     not, in the Secretary's judgment, required to meet current 
     withdrawals. Such investments may be made only in interest-
     bearing obligations of the United States. For such purpose, 
     such obligations may be acquired--
       ``(A) on original issue at the issue price, or
       ``(B) by purchase of outstanding obligations at the market 
     price.
       ``(2) Sale of obligations.--Any obligation acquired by the 
     Trust Fund for DC Schools may be sold by the Secretary at the 
     market price.
       ``(3) Interest on certain proceeds.--The interest on, and 
     the proceeds from the sale or redemption of, any obligations 
     held in the Trust Fund for DC Schools shall be credited to 
     and from a part of the Trust Fund for DC Schools.''
                                 ______
                                 

                        ALLARD AMENDMENT NO. 523

  Mr. ALLARD proposed an amendment to the bill, S. 949, supra; as 
follows:

       On page 397, strike section 881.

                          ____________________