[Congressional Record Volume 144, Number 29 (Tuesday, March 17, 1998)]
[Senate]
[Pages S2114-S2135]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. McCAIN (for himself, Mr. Campbell, Mr. Inouye, and Mr. 
        Conrad):
  S. 1770. A bill to elevate the position of Director of the Indian 
Health Service to Assistant Secretary of Health and Human Services, to 
provide for the organizational independence of the Indian Health 
Service within the Department of Health and Human Services, and for 
other purposes, to the Committee on Indian Affairs.


           assistant secretary for indian health act of 1998

  Mr. McCAIN. Mr. President, I rise today to introduce legislation to 
redesignate the position of the Director of the Indian Health Service 
(IHS) to an Assistant Secretarial position within the Department of 
Health and Human Services. I am pleased that the Chairman and Vice-
Chairman of the Committee on Indian Affairs, Senator Campbell and 
Senator Inouye, as well as my colleague, Senator Conrad, are joining me 
as co-sponsors of this important legislation. The Senate previously 
approved this legislation in the 103rd session and again considered the 
bill in the 104th session, but we were unable to pass a bill before 
adjournment. We are again pursuing this legislation as the timing for 
enactment could not be more critical.
  Some of my colleagues might be led to believe the standard of living 
for Indian people is improving due to the relatively small economic 
success enjoyed by a few Indian tribes in this country. Nothing could 
be further from reality as the health conditions facing Indian people 
are an endemic crisis.
  Mr. President, Indian reservation areas are among the most 
impoverished areas in our nation, yet remain the least served and the 
most forgotten when it comes to improving health care delivery. 
American Indian and Alaska Native populations are affected by diabetes 
at a rate that overwhelmingly exceeds other national populations. 
Mortality rates for tuberculosis, alcoholism, accidents, homicide, 
pneumonia, influenza and suicides are far higher than all other 
segments of the national population. The number of HIV and AIDS cases 
affecting American Indian communities is increasing at an alarming 
rate.
  The Indian Health Service (IHS) is the lead agency charged with 
providing health care to the more than 550 Indian tribes in this 
country. The IHS currently falls under the authority of the Public 
Health Service within the overall Department of Health and Human 
Services. The Indian Health Service consists of 143 service units 
composed of over 500 direct health care delivery facilities, including 
49 hospitals, 176 health centers, 8 school centers and 277 health 
stations and satellite clinics and Alaska village clinics. This health 
network provides services ranging from facility construction to 
pediatrics, and serves approximately 1.3 million American Indians and 
Alaska Native individuals each year.
  For the past couple of years, the Department has undergone 
reorganizational reforms and removed some of the administrative hurdles 
faced by the IHS Director. I applaud the Secretary

[[Page S2115]]

and the Department for these efforts to prioritize Indian health 
issues. However, I am convinced that we must further institutionalize 
the future of the IHS by allowing the agency to operate at the highest 
levels and by its own authority.
  Mr. President, this bill is more than a symbolic gesture. There are 
several other critical reasons which lead me to believe that this 
legislation is necessary. First, designating the IHS Director as an 
Assistant Secretary of Indian Health would provide the various branches 
and programs of the IHS with a stronger advocacy role within the 
Department and better representation during the budget process. As 
evidenced in the Agency's budget request for FY'99, which represents a 
minimal one percent increase over last year's budget, the ability 
of the IHS to affect budgetary policy is limited.

  Second, I am a strong supporter of the success of tribal governments 
to contract and manage programs through Public Law 93-638, the Indian 
Self-Determination and Education Assistance Act. Through separate 
legislation, Senator Campbell will propose to permanently extend this 
authority to the IHS. Our intent through the 638 law has been to 
devolve the paternalistic federal management of Indian programs and 
place responsibility at the local tribal level where tribes most 
benefit by direct services. This legislation we are introducing today 
is intended to compliment that effort.
  I believe that the IHS would operate more efficiently as an 
independent agency. The IHS is charged with an enormous responsibility 
for Indian country and, therefore, should be afforded direct line 
authority and the ability to operate within its own unique mandates and 
rules. This legislation provides for the appropriate authority for this 
transition, particularly to ensure that the service delivery provided 
to the IHS by other PHS entities, such as the Commissioned Corps, would 
be appropriately addressed. I look forward to working with Secretary 
Shalala on these important matters.
  I am convinced that if the current organizational structure of the 
IHS is maintained, the agency will not be positioned for the long term 
to address the day-to-day health care needs of American Indians. 
Therefore, I believe that the IHS is in dire need of a senior policy 
official who is knowledgeable about the programs administered by the 
IHS and who can provide the leadership for the health care needs of 
American Indians and Alaska Natives.
  Mr. President, this legislation will ensure that health care issues 
facing Indian people are addressed on a par with the rest of this 
nation.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      Section-by-Section analysis


       section 1. office of assistant secretary for indian health

       Subsection (a) establishes the Office of the Assistant 
     Secretary for Indian Health within the Department of Health 
     and Human Services.
       Subsection (b) provides that the Assistant Secretary for 
     Indian Health shall perform such functions as the Secretary 
     of Health and Human Services may designate in addition to the 
     functions performed by the Director of the Indian Health 
     Service (IHS) on the date of the enactment of this Act.
       Subsection (c) provides that references to the IHS Director 
     in any other Federal law, Executive order, rule, regulation, 
     or delegation of authority, or any document shall be deemed 
     to refer to the Assistant Secretary for Indian Health.
       Subsection (d) amends Title 5, Section 5315 of the U.S.C. 
     by striking `Assistant Secretaries of Health and Human 
     Services (6)' and inserting `Assistant Secretaries of Health 
     and Human Services (7)'. Subsection (d) further amends 
     section 5316 of Title 5 by striking `Director, Indian Health 
     Service, Department of Health and Human Services'.
       Subsection (e) provides for conforming amendments in the 
     Indian Health Care Improvement Act. Subsection (e) further 
     amends the Indian Health Care Improvement Act, the 
     Rehabilitation Act of 1973, the Federal Water Pollution 
     Control Act, and the Native American Programs Act of 1974 by 
     striking `Director of the Indian Health Service' and 
     inserting in lieu thereof `the Assistant Secretary for Indian 
     Health'.


 section 2. organization of indian health service within department of 
                       health and human services

       Subsection (a) amends section 601 of the Indian Health Care 
     Improvement Act by striking `within the Public Health Service 
     of the Department of Health and Human Services' each place it 
     appears and inserting `within the Department of Health and 
     Human Services', and striking `report to the Secretary 
     through the Assistant Secretary for Health of the Department 
     of Health and Human Services' and inserting `report to the 
     Secretary'.
       Subsection (b) amends the heading of section 601 of the 
     Indian Health Care Improvement Act.
       Subsection (c) provides that nothing in this section may be 
     interpreted as terminating or otherwise modifying any 
     authority providing for the IHS to use Public Health Service 
     officers or employees to carrying out the purpose and 
     responsibilities of the IHS. Subsection (c) further states 
     that any officers or employees used by IHS shall be treated 
     as officers or employees detailed to an executive department 
     under section 214(a) of the Public Health Service.
                                 ______
                                 
      By Mr. CAMPBELL (for himself and Mr. Allard):
  S. 1771. A bill to amend the Colorado Ute Indian Water Rights 
Settlement Act to provide for a final settlement of the claims of the 
Colorado Ute Indian Tribes, and for other purposes; to the Committee on 
Indian Affairs.


           THE COLORADO UTE SETTLEMENT ACT AMENDMENTS OF 1998

  Mr. CAMPBELL. Mr. President, today I introduce a bill to amend the 
Colorado Ute Indian Water Rights Settlement Act of 1988. I am pleased 
to be joined in this effort by my colleague Senator Allard.
  This bill represents our Nation's last opportunity to live up to an 
agreement we made with the two Indian Tribes in the State of Colorado.
  In 1976, the United States filed a claim asserting the historic 
rights of these Tribes to much of the water in the rivers in 
Southwestern Colorado. Rather than continue this disruptive and 
divisive litigation, the two Ute Tribes were parties to a Settlement 
Agreement in 1986, which was enacted by Congress and signed into law by 
President Reagan in 1988.
  So far, we have failed to construct any of the facilities promised in 
this agreement; even though Presidents Reagan, Bush, and Clinton have 
consistently supported full funding for this Project.
  I was reluctant to introduce this measure because I still believe 
that this country, this Congress, and especially the United States 
Senate can be trusted to fulfill the solemn commitment that was made to 
these Tribes in 1988, when I was a member of the House of 
Representatives. Of course the United States Senate has consistently 
and without exception, voted to abide by every term of this agreement.
  But the Ute Tribes point to the 472 treaties broken by the United 
States. Rather than allowing their 1988 Settlement to become the 473rd, 
they are willing to modify the terms of this agreement to move it 
forward. The original agreement called for construction to start in 
1990. Here it is 8 years later and we have not even started.

  These tribes have provided the United States with their last chance 
to honorably live up to the promises we have made to them.
  If the United States fails to provide these tribes with a water 
supply through the Animas-La Plata Project, the tribes will have no 
choice but to go back to court. Millions of dollars will then have to 
be spent in needless, expensive, and divisive litigation.
  One of our distinguished former colleagues, Arizona Senator Barry 
Goldwater, was fond of saying that in Arizona it is so dry that the 
trees chase the dogs. Mark Twain said that the West is so dry that we 
can't afford to drink water, we are too busy fighting over it. What he 
said was, ``Whiskey is for drinking, water is for fighting.''
  Throughout the history of this region, the need for water has 
dominated and dictated our development. About 85% of the water used in 
the West is stored in mountain reservoirs during spring run-off so it 
can be used during the hot summers. For thousands of years this has 
been a fact of life for those who live in the arid West. We are 
following the example of the Anasazi Indians who also knew the need to 
collect and store water for dry spells 2,000 years ago in the same area 
proposed for the Animas-La Plata.
  In fact, when the Animas-La Plata Project was authorized in 1968, a 
number of other projects were authorized along with it, including the 
Central Arizona Project in the Lower Colorado Basin and projects in the 
Upper Basin.

[[Page S2116]]

 These facilities have already been constructed. We constructed these 
projects to meet the pressing needs of people and development. Only the 
Animas-La Plata languishes.
  The 1988 Colorado Ute Indian Water Rights Settlement Act was a fair 
and honest agreement with the two Indian tribes in my state. 
Furthermore, it was a compromise. The parties participating in these 
Settlement discussions and negotiations included a number of water 
conservancy districts, the states of Colorado and New Mexico, and 
numerous federal agencies. Congress and the President made this 
Agreement the law of the land.
  The two Tribes have every legal and moral right to hold the United 
States to the terms of the 1988 Agreement we enacted. Like any party to 
a binding agreement, they have the right to continue to demand that the 
United States live up to its commitment to build the entire Animas-La 
Plata Project. But the Tribes have made what one of the largest 
newspapers in my state refers to as a ``generous offer.'' This bill is 
that offer. If Congress passes these amendments, we will be paying for 
our obligations under the 1988 agreement with a few cents on the 
dollar. It was once estimated that it would cost almost $700 million to 
fulfill our obligations to these two tribes. Now we can do it for $257 
million. These two tribes have provided us with the opportunity to 
fulfill our legal obligations to them under the 1988 Act at a bargain 
basement price.
  Under the terms of the bill I introduce today, the legal claims 
raised by the Ute Mountain Ute and the Southern Ute tribes will be 
resolved once the Interior Department constructs the following 
facilities:
  A pumping plant to divert no more than 57,100 acre-fee of water per 
year from the Animas River; a facility to convey this water to an off-
river reservoir; and a reservoir to hold this water until it is needed 
for municipal, industrial, instream flow or other authorized and 
approved uses.
  Mr. President, the quantity of water that will be diverted and used 
by this project was not set by the project's beneficiaries, it was not 
set by the Bureau of Reclamation, it was not set by me; rather, it was 
set by the United States Fish and Wildlife Service. I quote the 
Service's recent Biological Opinion:

       An initial depletion not to exceed 57,100 acre feet for the 
     Project is not likely to jeopardize the continued existence 
     of the Colorado squafish or razorback sucker nor adversely 
     modify or destroy their critical habitat.

  The Service then goes on to agree that this level of depletion is 
consistent with the construction of the facilities that I have just 
mentioned.
  In addition: Two-thirds of water made available from these project 
components will be available to the two Ute tribes, with most of the 
balance available for municipal and industrial water, small irrigators 
in Colorado and New Mexico, and the Navajo Nation.
  The facilities to be constructed have been on the drawing board for 
decades. I think I can safely say that no project components in the 
history of developing water projects have gone through more 
environmental changes and more environmental regulations than this. In 
fact, here on the desk, I brought just the final supplement that was 
done after 1986, and it stands about half a foot high. If we stacked 
all of the different regulations that we have compiled end on end, we 
would have a stack over 3 feet high. I did not even bother bringing all 
of it to the Floor. But we have done virtually everything required to 
get this project developed.

  This represents only a portion of the environmental studies of this 
project conducted by just one of the Federal agencies involved.
  Those who have opposed this project in the past have had their own 
agendas: None of these agendas was concerned with this Nation's 
obligations to these two Indian tribes.
  Some complained about the price of the project while they conspired 
to inflate the cost by insisting upon wasteful study after study of 
this project.
  I think the tribes feel that they know there are certain interests 
who oppose the project and that they are the same interest groups that 
have opposed every project. They know that by driving the price up too 
much, it makes it much more difficult to build. But I think the United 
States' claim on being a trustee for tribes can only be fulfilled when 
we realize that our obligations under this original Water Rights 
Settlement Act must be complied with.
  The State of Colorado has done its part. It has expended $35 million 
to construct the pipeline needed to supply domestic water.
  The tribes have received their development funded of $57 million and 
derailed their water rights lawsuit in anticipation of the United 
States fulfilling its obligations.
  This Settlement proposal is the absolute minimum that we can ask 
these tribes to accept. More important, the most expensive part of this 
Project is the delay in constructing it. When I first became involved 
with the A-LP, about 15 years ago, the entire project could be built 
for around $315 million.
  When I think of the promises that were made to the Ute Tribes in my 
State, I am reminded of the words of Chief Joseph, the great Indian 
leader of the Nez Perce Tribe. When Chief Joseph came here to 
Washington he had this to say about the promises and assurances he 
received:

       I have heard talk and talk, but nothing is done. Good words 
     do not last long unless they amount to something. Good words 
     will not give my people good health and stop them from dying. 
     Good words will not give my people a home where they can take 
     care of themselves. I am tired of talk that comes to nothing. 
     It makes my heart sick when I remember all of the good words 
     and broken promises.

  As this bill is presently drafted, it enjoys widespread support among 
the people of Colorado, especially the people, local governments, and 
Indian tribes in Southwestern Colorado. State government, and literally 
all of our major newspapers. It is a significant attempt to compromise 
and make concessions by all parties involved. I believe we have come a 
long way.

  This bill is the product of significant attempts at compromise and 
concessions by all of the parties involved. I am pleased that the bill 
begins its legislative journey this far along. I know that not all of 
the parties who are affected by this bill agree with every one of its 
terms. While I can not respond to all of the concerns that have been 
raised, I can assure everyone that we will continue to work to address 
any legitimate concern raised about this legislation through the 
committee process.
  I urge my colleagues to support passage of this important legislation 
and meet the solemn commitments made to the Ute tribes in 1988.
  Mr. President, several newspapers, public officials and water 
Development Boards, and both of the Indian tribes in my state have 
supported the idea of modifying the Settlement in this manner. Since My 
legislation incorporates this approach, I ask unanimous consent that 
these editorials and Resolutions be included in the Record.
  Mr. ALLARD. Mr. President, will the Senator yield?
  Mr. CAMPBELL. Mr. President, I yield any remaining time to Senator 
Allard, and I thank the Senator.
  Mr. ALLARD. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Chair advises the Senator that he has 2 
minutes.
  Mr. ALLARD. Thank you very much.
  Mr. President, I just wanted to briefly stand up in recognition of 
the hard work of my colleague from Colorado on this very, very 
important issue to Colorado. And I want to add my support to the 
Colorado Ute Indian Water Rights Settlement Act of 1988.
  I have a number of comments that I would like to submit to the 
Record. But I just want to recognize in a public way that Senator 
Campbell has worked very hard on this. Obviously, I think both of us 
would have preferred to have the full project. But in light of what has 
come to light, I think most of us agree that we need to keep our word 
with the Ute Indians in the area, and we need to proceed ahead. It is 
vital to the area. It is important. Even though it might not be ideal 
for what we would like to see happen, at least we need to move ahead.
  I thank the senior Senator from Colorado for yielding to me and wish 
him the very best. I will be there supporting him all the way.
  Mr. CAMPBELL. I thank my colleague from Colorado. We fought for 
fairness when it came to water legislation when we were in the House of 
Representatives together, and here in the

[[Page S2117]]

Senate too, apparently our battles are not over. But I certainly do 
appreciate the support. I know we are on the right side of fairness for 
the people of our State.
  Mr. President, I ask unanmous consent that additicnal material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1771

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

     SECTION 1. SHORT TITLE; FINDINGS.

       (a) Short Title.--This Act may be cited as the ``Colorado 
     Ute Settlement Act Amendments of 1998''.
       (b) Findings.--Congress finds that in order to provide for 
     a full and final settlement of the claims of the Colorado Ute 
     Indian Tribes, the Tribes have agreed to reduced water supply 
     facilities.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Agreement.--The term ``Agreement'' has the meaning 
     given that term in section 3(1) of the Colorado Ute Indian 
     Water Rights Settlement Act of 1988 (Public Law 100-585).
       (2) Animas-la plata project.--The term ``Animas-La Plata 
     Project'' has the meaning given that term in section 3(2) of 
     the Colorado Ute Indian Water Rights Settlement Act of 1988 
     (Public Law 100-585).
       (3) Dolores project.--The term ``Dolores Project'' has the 
     meaning given that term in section 3(3) of the Colorado Ute 
     Indian Water Rights Settlement Act of 1988 (Public Law 100-
     585).
       (4) Tribe; tribes.--The term ``Tribe'' or ``Tribes'' has 
     the meaning given that term in section 3(6) of the Colorado 
     Ute Indian Water Rights Settlement Act of 1988 (Public Law 
     100-585).

     SEC. 3. AMENDMENTS TO THE COLORADO UTE INDIAN WATER RIGHTS 
                   SETTLEMENT ACT OF 1988.

       (a) Reservoir; Municipal and Industrial Water.--Section 
     6(a) of the Colorado Ute Indian Water Rights Settlement Act 
     of 1988 (Public Law 100-585) is amended to read as follows:
       ``(a) Reservoir; Municipal and Industrial Water.--
       ``(1) In general.--After the date of enactment of the 
     Colorado Ute Settlement Act Amendments of 1998, the Secretary 
     shall provide--
       ``(A) for the construction, as components of the Animas-La 
     Plata Project, of--
       ``(i) a reservoir with a storage capacity of 260,000 acre-
     feet; and
       ``(ii) a pumping plant and a reservoir inlet conduit; and
       ``(B) through the use of the project components referred to 
     in subparagraph (A), municipal and industrial water 
     allocations in such manner as to result in allocations--
       ``(i) to the Southern Ute Tribe, with an average annual 
     depletion of an amount not to exceed 16,525 acre-feet of 
     water;
       ``(ii) to the Ute Mountain Ute Indian Tribe, with an 
     average annual depletion of an amount not to exceed 16,525 
     acre-feet of water;
       ``(iii) to the Navajo Nation, with an average annual 
     depletion of an amount not to exceed 2,340 acre-feet of 
     water;
       ``(iv) to the San Juan Water Commission, with an average 
     annual depletion of an amount not to exceed 10,400 acre-feet 
     of water; and
       ``(v) to the Animas-La Plata Conservancy District, with an 
     average annual depletion of an amount not to exceed 2,600 
     acre-feet of water.
       ``(2) Tribal construction costs.--Construction costs 
     allocable to the Navajo Nation and to each Tribe's municipal 
     and industrial water allocation from the Animas-La Plata 
     Project shall be nonreimbursable.
       ``(3) Nontribal water capital obligations.--The nontribal 
     municipal and industrial water capital repayment obligations 
     for the Animas-La Plata Project shall be satisfied, upon the 
     payment in full--
       ``(A) by the San Juan Water Commission, of an amount equal 
     to $8,600,000;
       ``(B) by the Animas-La Plata Water Conservancy District, of 
     an amount equal to $4,400,000; and
       ``(C) by the State of Colorado, of an amount equal to 
     $16,000,000, as a portion of the cost-sharing obligation of 
     the State of Colorado recognized in the Agreement in 
     Principle Concerning the Colorado Ute Indian Water Rights 
     Settlement and Animas-La Plata Cost Sharing that the State of 
     Colorado entered into on June 30, 1986.
       ``(4) Certain nonreimbursable costs.--Any cost of a 
     component of the Animas-La Plata Project described in 
     paragraph (1) that is attributed to and required for 
     recreation, environmental compliance and mitigation, the 
     protection of cultural resources, or fish and wildlife 
     mitigation and enhancement shall be nonreimbursable.
       ``(5) Tribal water allocations.--
       ``(A) In general.--With respect to municipal and industrial 
     water allocated to a Tribe from the Animas-La Plata Project 
     or the Dolores Project, until that water is first used by a 
     Tribe or pursuant to a water use contract with the Tribe, the 
     Secretary shall pay the annual operation, maintenance, and 
     replacement costs allocable to that municipal and industrial 
     water allocation of the Tribe.
       ``(B) Treatment of costs.--A Tribe shall not be required to 
     reimburse the Secretary for the payment of any cost referred 
     to in subparagraph (A).
       ``(6) Repayment of pro rata share.--As an increment of a 
     municipal and industrial water allocation of a Tribe 
     described in paragraph (5) is first used by a Tribe or is 
     first used pursuant to the terms of a water use contract with 
     the Tribe--
       ``(A) repayment of that increment's pro rata share of those 
     allocable construction costs for the Dolores Project shall 
     commence by the Tribe; and
       ``(B) the Tribe shall commence bearing that increment's pro 
     rata share of the allocable annual operation, maintenance, 
     and replacement costs referred to in paragraph (5)(A).''.
       (b) Remaining Water Supplies.--Section 6(b) of the Colorado 
     Ute Indian Water Rights Settlement Act of 1988 (Public Law 
     100-585) is amended by adding at the end the following:
       ``(3) At the request of the Animas-La Plata Water 
     Conservancy District of Colorado or the La Plata Conservancy 
     District of New Mexico, the Secretary shall take such action 
     as may be necessary to provide, after the date of enactment 
     of the Colorado Ute Settlement Act Amendments of 1998, water 
     allocations--
       ``(A) to the Animas-La Plata Water Conservancy District of 
     Colorado, with an average annual depletion of an amount not 
     to exceed 5,230 acre-feet of water; and
       ``(B) to the La Plata Conservancy District of New Mexico, 
     with an average annual depletion of an amount not to exceed 
     780 acre-feet of water.
       ``(4) If depletions of water in addition to the depletions 
     otherwise permitted under this subsection may be made in a 
     manner consistent with the requirements of the Endangered 
     Species Act of 1973 (16 U.S.C. 1531 et seq.), the Secretary 
     shall provide for those depletions by making allocations 
     among the beneficiaries of the Animas-La Plata Project in 
     accordance with an agreement among the beneficiaries relating 
     to those allocations.''.
       (c) Miscellaneous.--Section 6 of the Colorado Ute Indian 
     Water Rights Settlement Act of 1988 (Public Law 100-585) is 
     amended by adding at the end the following:
       ``(i) Transfer of Water Rights.--Upon request of the State 
     Engineer of the State of New Mexico, the Secretary shall, in 
     a manner consistent with applicable State law, transfer, 
     without consideration, to the New Mexico Animas-La Plata 
     Project beneficiaries or the New Mexico Interstate Stream 
     Commission all of the interests in water rights of the 
     Department of the Interior under New Mexico Engineer permit 
     number 2883, Book M-2, dated May 1, 1956, in order to fulfill 
     the New Mexico purposes of the Animas-La Plata Project.
       ``(j) Treatment of Certain Reports.--
       ``(1) In general.--The April 1996 Final Supplement to the 
     Final Environmental Impact Statement, Animas-La Plata Project 
     issued by the Department of the Interior and all documents 
     incorporated therein and attachments thereto, and the 
     February 19, 1996, Final Biological Opinion of the United 
     States Fish and Wildlife Service, Animas-La Plata Project 
     shall be considered to be adequate to satisfy any applicable 
     requirement under the Endangered Species Act of 1973 (16 
     U.S.C. 1531 et seq.), the National Environmental Policy Act 
     of 1969 (42 U.S.C. 4321 et seq.) or the Federal Water 
     Pollution Control Act (33 U.S.C. 1251 et seq.) with respect 
     to--
       ``(A) the amendments made to this section by the Colorado 
     Ute Settlement Act Amendments of 1998;
       ``(B) the initiation of, and completion of construction of 
     the facilities described in this section; and
       ``(C) an aggregate depletion of 57,100 acre-feet of water 
     (or any portion thereof) as described and approved in that 
     biological opinion.
       ``(2) Statutory construction.--Nothing in this subsection 
     shall affect--
       ``(A) the construction of facilities that are not described 
     in this section; or
       ``(B) any use of water that is not described and approved 
     by the Director of the United States Fish and Wildlife 
     Service in the final biological opinion described in 
     paragraph (1).
       ``(k) Final Settlement.--
       ``(1) In general.--The provision of water to the Tribes in 
     accordance with this section shall constitute final 
     settlement of the tribal claims to water rights on the Animas 
     and La Plata Rivers.
       ``(2) Statutory construction.--Nothing in this section may 
     be construed to affect the right of the Tribes to water 
     rights on the streams and rivers described in the Agreement, 
     other than the Animas and La Plata Rivers, to participate in 
     the Animas-La Plata Project, to receive the amounts of water 
     dedicated to tribal use under the Agreement, or to acquire 
     water rights under the laws of the State of Colorado.
       ``(3) Action by the attorney general.--The Attorney General 
     of the United States shall file with the District Court, 
     Water Division Number 7, of the State of Colorado such 
     instruments as may be necessary to request the court to amend 
     the final consent decree to provide for the amendments made 
     to this section under section 2 of the Colorado Ute 
     Settlement Act Amendments of 1998.''.

     SEC. 4. STATUTORY CONSTRUCTION; TREATMENT OF CERTAIN FUNDS.

       (a) In General.--Nothing in the amendments made by this Act 
     to section 6 of the

[[Page S2118]]

     Colorado Ute Indian Water Rights Settlement Act of 1988 
     (Public Law 100-585) shall affect--
       (1) the applicability of any other provision of that Act;
       (2) the obligation of the Secretary of the Interior to 
     deliver water from the Dolores Project and to complete the 
     construction of the facilities located on the Ute Mountain 
     Ute Indian Reservation described in--
       (A) the Department of the Interior and Related Agencies 
     Appropriations Act, 1991 (Public Law 101-512);
       (B) the Department of the Interior and Related Agencies 
     Appropriations Act, 1992 (Public Law 102-154);
       (C) the Department of the Interior and Related Agencies 
     Appropriations Act, 1993 (Public Law 102-381);
       (D) the Department of the Interior and Related Agencies 
     Appropriations Act, 1994 (Public Law 103-138); and
       (E) the Department of the Interior and Related Agencies 
     Appropriations Act, 1995 (Public Law 103-332); or
       (3) the treatment of the uncommitted portion of the cost-
     sharing obligation of the State of Colorado referred to in 
     subsection (b).
       (b) Treatment of Uncommitted Portion of Cost-Sharing 
     Obligation.--The uncommitted portion of the cost-sharing 
     obligation of the State of Colorado referred to in section 
     6(a)(3) of the Colorado Ute Indian Water Rights Settlement 
     Act of 1988 (Public Law 100-585), as added by section 3 of 
     this Act, remains available after the date of payment of the 
     amount specified in that section and may be used to assist in 
     the funding of any component of the Animas-La Plata Project 
     that is not described in such section 6(a)(3).
                                                                    ____


                               Resolution

       The Colorado Water Conservation Board in regular session 
     meeting this 25th day of November 1997, is hereby resolved 
     that:
       Whereas, the Colorado Water Conservation Board is the state 
     agency responsible for the conservation and development of 
     the waters of the state apportioned to Colorado by interstate 
     compact, and the encouragement of the development of those 
     waters for the benefit of the citizens of the state of 
     Colorado, all as more fully set forth in C.R.S. Sec. 37-60-
     106; and
       Whereas, from 1968 to the present, the Colorado Water 
     Conservation Board has been continually on record in support 
     of the construction of the Animas-LaPlata Project, a Colorado 
     River Storage Project Act participating project; and
       Whereas, the Director of the Colorado Water Conservation 
     Board and its members have regularly testified before 
     Committees of the U.S. Congress in support of the 
     construction of the Animas-LaPlata Project; and
       Whereas, the Colorado Water Conservation Board, together 
     with other agencies and instrumentalities of the state of 
     Colorado, participated in the negotiation of the Colorado Ute 
     Indian Water Rights Settlement of 1986 which served to 
     resolve all of the reserved water rights claims of the two 
     Colorado Ute Indian Tribes in a way that produced comity, 
     cooperation and harmony in the allocation of the rivers of 
     Colorado's Southwest; and
       Whereas, a feature of that settlement was the agreement by 
     the state of Colorado, the citizens of Southwestern Colorado, 
     the federal government and the two Colorado Ute Indian Tribes 
     that the construction of the Animas-LaPlata Project and the 
     allocation of a portion of the water supply from that project 
     to the two tribes would be a part of the resolution of the 
     Colorado Ute Indian reserve water right claims and in 
     particular, those claims associated with the Animas and the 
     LaPlata Rivers; and
       Whereas, the Congress of the United States adopted and 
     ratified the 1986 Colorado Ute Indian Water Rights Settlement 
     by the passage of the Colorado Ute Indian Water Rights 
     Settlement Act of 1988; and
       Whereas, Colorado, acting through the General Assembly, the 
     Water Conservation Board and other state agencies, has 
     fulfilled all of the responsibilities incumbent upon the 
     state of Colorado and arising from the Colorado Ute Indian 
     Water Rights Settlement and the Colorado Ute Indian Water 
     Rights Settlement Act, including the construction of the 
     Dolores Project with irrigation water being delivered to the 
     Ute Mountain Ute Indian Tribe on its Reservation, the 
     construction of a domestic pipeline to the Town of Towaoc, 
     the successful adoption of Colorado water court decrees 
     recognizing the Indian reserved water rights on various 
     tributaries of the San Juan River and finally the 
     appropriation of funds which now compromise $5.0 million to 
     Tribal Development Funds, $5.6 million from the Colorado 
     Water Conservation Board Construction Fund for construction 
     of Ridges Basin and $42.4 million for the state's 
     participation in the construction of the Animas-LaPlata 
     Project, which funds are currently held by the Colorado Water 
     Resources and Power Development Authority in trust for the 
     eventual construction of the Animas-LaPlata Project; and
       Wheras, the state of Colorado acting through the offices of 
     Governor Roy Romer and Lieutenant Governor Gail Schoettler 
     have sponsored a series of meetings in an effort to resolve 
     objections to the construction of the Animas-LaPlata Project, 
     to allow the fulfillment of the provisions of the Colorado 
     Ute Indian Water Rights Settlement and to reach a consensus 
     which would allow the project to be completed and;
       Whereas, the process convened by Governor Romer and 
     Lieutenant Governor Schoettler resulted in two proposals to 
     comply with the terms of the Colorado Ute Indian Water Rights 
     Settlement. The proposal from persons and entities opposing 
     the construction of the Animas-LaPlata Project called for a 
     cash settlement fund for the Tribes in lieu of Project 
     construction. This proposal was rejected by both Tribes. On 
     the other side of the process, the Colorado Ute Indian 
     Tribes, the Animas-LaPlata Water Conservancy District Board 
     of Directors, New Mexico water users and ultimately Governor 
     Romer and Lieutenant Governor Schoettler have endorsed a 
     proposal to construct a modified and downsized Animas-LaPlata 
     Project; and
       Whereas, the downsized Animas-LaPlata Project, often 
     referred to as Animas-LaPlata Lite, contemplates the 
     construction of the Ridge's Basin Reservoir and a pumping 
     plant and pipeline from the Animas River, with the water 
     stored in the Reservoir to be used to satisfy the two Ute 
     Indian Tribes claims and for municipal and industrial 
     purposes in the Animas River Basin; and
       Whereas, the U.S. Fish and Wildlife Service has completed 
     its Endangered Species Act Section 7 consultation on the 
     project and has authorized the construction of the facilities 
     which are described in the Animas-LaPlata Lite proposal 
     together with an entitlement to make an annual depletion to 
     the San Juan River system of 57,100 acre-feet; and
       Whereas, the project participants have agreed on the 
     allocation of the depletions and the necessity of 
     constructing the authorized facilities; and
       Whereas, the Bureau of Reclamation has completed a 
     supplemental environmental impact statement at a cost of more 
     than $10 million; and
       Whereas, it appears that all environmental laws and 
     regulations of the state of Colorado, the state of New 
     Mexico, and the Federal Government have been addressed; and
       Whereas, it is necessary to amend the Colorado Ute Indian 
     Water Rights Settlement Act of 1988; and
       Whereas, the Board wishes to lend its continued support the 
     construction of the Animas-LaPlata Project and, in 
     particular, to the full compliance by the state of Colorado 
     with the terms of the Colorado Ute Indian Water Rights 
     Settlement: Now therefore, be it
       Resolved by the Colorado Water Conservation Board, That:
       1. The Board endorses the modified Animas-LaPlata Project 
     referred to a the Animas-LaPlata Lite.
       2. The Board expresses its support for Governor Romer and 
     Lieutenant Governor Schoettler and for their recognition and 
     support for this compromise resolution between the two 
     Colorado Ute Tribes and the Project proponents.
       3. The Board expresses its appreciation to the two Colorado 
     Ute Tribes for their continued efforts to work with the water 
     users in Southwest Colorado to ensure that the tribal rights 
     are resolved in a way that avoids taking water from other 
     water users and recognizes that all of the water users in the 
     area must work together to ensure reliable water supplies for 
     all of the residents of the area.
       4. The Board expresses its appreciation to the water users 
     in Southwestern Colorado for their support for this 
     resolution of the Indian reserved rights claims and the Board 
     comments the non-Indian project supporters who sacrificed so 
     much in order to achieve a settlement acceptable to the 
     Colorado Ute Indian Tribes.
       5. The Board expresses its appreciation to the water users 
     in the state of New Mexico and New Mexico's officials and 
     Congressional delegation for their support of the 
     negotiations leading to Animas-LaPlata Lite.
       6. The Board expresses its appreciation to the U.S. 
     Department of the Interior, Environmental Protection Agency, 
     the environmental groups and others who contributed 
     significantly to the series of meetings convened by Governor 
     Romer and Lieutenant Governor Schoettler.
       7. The Board encourages the Colorado delegation to 
     unanimously endorse and support legislation necessary to 
     effectuate the modified Animas-LaPlata Project (Animas-
     LaPlata Lite) and to effectuate the Colorado Ute Indian Water 
     Right Settlement.
       8. The Board instructs its Director to ensure that its a 
     official position concerning the construction of the modified 
     Animas--LaPlata Project and the necessity of complying with 
     the Colorado Ute Indian Water Rights Settlement is conveyed 
     to the two Ute Tribes each of the members of the Colorado 
     Congressional delegation, to the Secretary of the Interior, 
     to the Administrator of the Environmental Protection Agency, 
     to the New Mexico Congressional delegation, to the 
     appropriate officials in each of the Colorado River basin 
     states, to the Chairman of the Navajo Nation, to the Director 
     of the Native American Rights Fund and to the members of the 
     Colorado General Assembly and other interested officials.
                                                                    ____


         Resolution No. 97-160 of the Southern Ute Indian Tribe

       Whereas, authority is vested in the Southern Ute Indian 
     Tribal Council by the Constitution adopted by the Southern 
     Ute Indian Tribe and approved November 4, 1936, and amended 
     October 1, 1975, to act for the Southern Ute Indian Tribe; 
     and
       Whereas, under the provisions of Article VII, Section 1(c) 
     of said Constitution, the

[[Page S2119]]

     Tribal Council has the inherent power to act regarding the 
     water rights of the Southern Ute Indian Tribe and under the 
     provisions of Section 1(n) has the power to protect and 
     preserve the property and natural resources of the Southern 
     Ute Indian Tribe; and
       Whereas, the Southern Ute Indian Tribe has negotiated a 
     settlement of their reserved water rights which were the 
     subject of litigations in the Colorado water courts; and
       Whereas, on December 10, 1986, the Southern Ute Indian 
     Tribe entered into the Colorado Ute Indian Water Rights Final 
     Settlement Agreement of 1986 which has as its foundation, the 
     construction of the Animas-La Plata Project; and
       Whereas, in 1988, legislation was enacted by the United 
     States Congress which would implement portions of the 
     Colorado Ute Indian Water Rights Final Settlement Agreement 
     of 1986; and
       Whereas, certain members of Congress, with the support and 
     encouragement of various environmental groups including the 
     Sierra Club, have refused to recognize and abide by the 
     federal trust responsibility to carry out the letter and the 
     spirit of the Colorado Ute Indian Water Rights Final 
     Settlement Agreement of 1986 and 1988 implementing 
     legislation, which refusal sets a dangerous precedent for all 
     Indian tribes; and
       Whereas, since 1988, the enforcement of the Endangered 
     Species Act and other environmental laws, as well as new 
     budget priorities in Congress, have halted the construction 
     of the Project and caused the United States to fail to live 
     up to its solemn obligations under the settlement; and
       Whereas, under the leadership of Governor Romer and 
     Lieutenant Governor Schoettler, the Southern Ute Indian 
     Tribe, the Ute Mountain Ute Indian Tribe, and other 
     signatories to the 1986 Agreement have been engaged for the 
     past year in discussions with the project opponents about 
     potential alternatives to the Project; and
       Whereas, the Southern Ute Indian Tribal Council received a 
     presentation from SUGO regarding the proposed Southern Ute 
     Land and Legacy Fund and requested the project opponents to 
     attend a public meeting in the vicinity of the Reservation to 
     discuss the Animas River Citizens' Coalition proposal; and
       Whereas, the Southern Ute Indian Tribal Council has 
     carefully considered the advantages and disadvantages of the 
     Animas River Citizens' Coalition proposal as an alternative 
     to carry out the intent of the 1986 Settlement Agreement and 
     1988 Settlement Act: Now, therefore be it
       Resolved, That the Southern Ute Indian Tribal Council 
     acting for and on behalf of the Southern Ute Indian Tribe, 
     hereby determines that Animas River Citizens' Coalition 
     proposal will not meet the tribal objectives that were to be 
     accomplished under the 1986 Settlement Agreement and 1988 
     Settlement Act because among other things, that proposal does 
     not provide the Tribe with certainty that it will receive a 
     firm supply of water from a reliable source that can be used 
     to meet its present and future needs on the west side of the 
     Reservation; and be it further
       Resolved, That the Chairman is authorized to send a copy of 
     this resolution to the Lieutenant Governor.
       This Resolution was duly adopted on the 7th day of October, 
     1997.
                                                                    ____


Resolution No. 4364 of the Ute Mountain Ute Tribal Council; Reference: 
  Conclusion of Romer-Schoettler Water Settlement Negotiation Process

       Whereas, the Constitution and By-Laws of the Ute Mountain 
     Ute Tribe, approved June 6, 1940 and subsequently amended, 
     provides in Article III that the governing body of the Ute 
     Mountain Ute Tribe is the Ute Mountain Ute Tribal Council and 
     sets forth in Article V the powers of the Ute Tribal Council 
     exercised in this Resolution; and
       Whereas, the Tribal Council is responsible for the 
     advancement and protection of the water resources of the Ute 
     Mountain Ute Tribe; and
       Whereas, the Ute Mountain Ute Indian Tribe negotiated a 
     settlement of its reserved water rights which were the 
     subject of litigation in the Colorado water courts in the 
     1980's; and
       Whereas, on December 10, 1986 the Ute Mountain Ute Indian 
     Tribe entered into the Colorado Ute Indian Water Rights 
     Settlement Agreement of 1986 which settled outstanding 
     federal and state water disputes in Southwest Colorado, and 
     has as its foundation, the construction of the Animas-La 
     Plata Project; and
       Whereas, in 1988, legislation was enacted by the United 
     States Congress which implemented portions of the Colorado 
     Ute Indian Water Rights Settlement. Central to the Settlement 
     is a commitment by the United States and the State of 
     Colorado to develop storage capacity to hold for present and 
     future tribal economic uses, unappropriated waters from the 
     Animas River; and
       Whereas, in the past decade opponents of the project have 
     criticized the environmental and financial costs of the 
     proposal facility--the Animas-La Plata Project; and
       Whereas, in an effort to make peace with environmental 
     opponents and others the Ute Mountain Ute Tribe has 
     participated in public discussions led by Governor Romer and 
     Lt. Governor Schoettler for the past year to explore ways of 
     accommodating the interests of environmental and fiscal 
     opponents; and
       Whereas, as a result of these public discussions, the Tribe 
     and other project stakeholders have agreed to \2/3\ less 
     water supply from a significantly reduced facility (almost 
     eliminating all environmental impacts by fully complying with 
     the Endangered Species Act and dropping the cost to taxpayers 
     by \2/3\); and
       Whereas, the opponents have proposed an alternative which, 
     in lieu of providing the region with new and economically 
     viable water supplies, proposes to provide the two Colorado 
     Ute Tribes with funds with which to buy available undeveloped 
     lands and any direct flow water rights associated with such 
     lands which are on the market from time to time, together 
     with a possibility of expanding existing storage facilities; 
     and
       Whereas, the Ute Mountain Ute Tribal Council has evaluated 
     the land and direct flow water rights acquisition 
     alternative. During this evaluation not one member of the 
     United States congress nor one major federal or State of 
     Colorado official has come forward to urge that the Tribe's 
     best interests would be served by the land and water 
     acquisition proposal: Now therefore be it
       Resolved, That the Ute Mountain Tribal Council hereby 
     determines that the land and direct flow water rights fund 
     and facility expansion proposed by the Animas River Citizen's 
     Coalition fails to provide the Tribe with the basic 
     commitment made by the United States and the State of 
     Colorado in 1988--namely a reliable firm supply of water to 
     meet present and future needs of the Tribe.
       The foregoing Resolution was duly adopted on this 22nd day 
     of October, 1977.
                                                                    ____


  Resolution No. 98-5, Colorado Water Resources and Power Development 
 Authority Affirming Continued Support for the Animas-La Plata Project

       Whereas, the Colorado Water Resources and Power Development 
     Authority (``the Authority'') was created by the Colorado 
     Legislature in 1981 to ``initiate, acquire, construct, 
     maintain, repair, and operate projects'' in furtherance of 
     Colorado's declared public policy concerning protection, 
     development, and beneficial use of the water of this state, 
     and was empowered to finance the construction of water 
     projects in the state; and
       Whereas, on February 3, 1982, by Senate Joint Resolution 
     No. 82-6, the Authority was authorized pursuant to C.R.S. 
     Sec. 37-95-107 to proceed with consideration of the Animas-La 
     Plata Project located in southwestern Colorado; and
       Whereas, on June 30, 1986, the Authority executed and 
     entered into the Agreement in Principle concerning the 
     Colorado Ute Indian Water Rights Settlement and Binding 
     Agreement for Animas-La Plata Project Cost Sharing. The other 
     parties to that agreement are the State of Colorado, the 
     Animas-La Plata Water Conservancy District, the New Mexico 
     Interstate Stream Commission, Montezuma County, Colorado, the 
     Southern Ute Indian Tribe, the Ute Mountain Ute Indian Tribe, 
     the San Juan Water Commission, and the United States 
     Secretary of the Interior, and the Agreement provides for the 
     construction of the facilities of the Animas-La Plata Project 
     ``or mutually acceptable alternatives'' in phrases I and II; 
     for cost sharing of the construction costs of the identified 
     Phase I facilities; and for non-federal financing of the 
     identified Phase II facilities; and
       Whereas, on December 10, 1986, the State of Colorado, the 
     Ute Mountain Ute Indian Tribe, the Southern Ute Indian Tribe, 
     the United States Department of the Interior, the United 
     States Department of Justice, the Animas-La Plata Water 
     Conservancy District, the Dolores Water Conservancy District, 
     the Florida Water Conservancy District, the Mancos Water 
     Conservancy District, the Southwestern Water Conservation 
     District, the City of Durango, the Town of Pagosa Springs, 
     the Florida Farmers Ditch Company, the Florida Canal Company, 
     and Fairfield Communities, Inc. entered into the Colorado Ute 
     Indian Water Rights Final Settlement Agreement; and
       Whereas, the Congress of the United States adopted and 
     ratified the Colorado Ute Indian Water Rights Settlement by 
     passage of the Colorado Ute Indian Water Right Settlement Act 
     of 1988; and
       Whereas, on November 10, 1989, the Authority entered into 
     an Escrow Agreement with the United States Department of the 
     Interior and the State Treasurer of the State of Colorado 
     pursuant to which certain funds of the Authority were 
     deposited into the Animas-La Plata Escrow Account with the 
     Colorado State Treasurer for disbursement of up to 42.4 
     million dollars to the United States to defray a portion of 
     the construction costs of certain Phase I facilities of the 
     Animas-La Plata Project. The Escrow Agreement provides that 
     upon the occurrence of certain events the Authority may order 
     cessation of the disbursements from the escrow account, and 
     in addition that the Escrow Agreement will terminate upon the 
     occurrence or non-occurrence of certain events; and
       Whereas, current discussion and negotiations among parties 
     concerned in the development and construction of the Animas-
     La Plata Project have resulted in the development of a 
     proposal to reconfigure the project by eliminating or 
     delaying construction of certain facilities. The reconfigured 
     proposed project is sometimes referred to as Animas-La Plata 
     Project ``Lite''; and
       Whereas, the Animas-La Plata ``Lite'' proposal contemplates 
     reduction of Colorado's cost sharing obligation for the 
     project to $16 million, with the remaining principal of $26.4 
     million currently in the Animas-La Plata

[[Page S2120]]

     Escrow Account and committed for cost sharing on construction 
     of the project to be held in escrow and not disbursed pending 
     possible future construction of the remaining facilities of 
     the Animas-La Plata Project; and
       Whereas, the Authority has and continues to support the 
     construction of the Animas-La Plata Project, and has 
     evidenced this support by voluntarily committing up to $42.4 
     million for construction of the Project.
       Now therefore, be it resolved by the Board of Directors of 
     the Colorado Water Resources and Power Development Authority 
     at a regular meeting of the Authority on February 6, 1998, as 
     follows:
       1. The Authority reaffirms its continuing support for 
     construction of the Animas-La Plata Project.
       2. The Authority affirms its willingness, subject to 
     agreement by the other signatories, to enter into appropriate 
     amendments to the agreements to which it is a party 
     (including the 1986 Cost Sharing Agreement and the 1989 
     Escrow Agreement) to reflect and to provide for (1) 
     construction of the so-called Animas-La Plata ``Lite'' 
     Project, with Colorado's cost sharing obligation limited to 
     $16 million to be disbursed from the existing Animas-La Plata 
     Project Escrow Account under acceptable terms, and (2) to 
     provide for the continuing escrow of the remaining principal 
     of $26.4 Million now on deposit in the Animas-La Plata Escrow 
     Account for a mutually acceptable period of time pending 
     possible future construction of the remaining facilities of 
     the Animas-La Plata Project, with all interest accruing upon 
     said principal being paid to and retained by the Authority 
     for its use.
                                                                    ____


 Gov. Roy Romer and Lt. Gov. Gail Schoettler--Concerning the Animas-La 
                          Plata Water Project

       Today, we are announcing our support for ``A-LP Lite''--the 
     scaled-down version of the Animas-La Plata water project. 
     This proposal saves nearly $400 million from the original 
     project and is less environmentally damaging than the 
     original project. Most importantly, it satisfies the state's 
     obligations to deliver water to the Southern Ute and Ute 
     Mountain Ute Tribes.
       In 1986, the State of Colorado, non-Indian water users in 
     Southwest Colorado and New Mexico, and the United States, 
     entered into a landmark settlement agreement with the 
     Southern Ute and the Ute Mountain Ute Tribes. This agreement 
     quantified the Tribes' entitlement to reserved water rights 
     on 11 rivers in Southwest Colorado.
       The settlement agreement set a national standard for 
     cooperation between Indian Tribes and non-Indians. It settled 
     potentially expensive and divisive litigation. It protected 
     the water rights of non-Indians in Southwest Colorado. It 
     maintained the fabric of Indian and non-Indian societies and 
     economies.
       To comply with the agreement, the state has paid or set 
     aside $60.8 million, and has agreed to the adjudication of 
     reserved water rights by the Tribes. The only remaining 
     obligation under the agreement is for the United States to 
     fund and build the Animas-La Plata water project. The project 
     is necessary to satisfy the Tribes' water claims on the 
     Animas and La Plata Rivers.
       Yet after 10 years the project has not been built. 
     Controversy and lawsuits have delayed the start of 
     construction. Each year, Congress debates whether to continue 
     funding the project. The Interior Department has conducted a 
     number of studies which the courts or the Environmental 
     Protection Agency have found inadequate. We understand that 
     one of the EPA's primary objections with the environmental 
     analysis has been that the examination of alternatives is 
     deficient.
       Last year, the project proponents asked us to convene talks 
     among all sides to see if a consensus solution could be 
     reached. Through sometimes heated debate, the ``Romer-
     Schoettler Process'' whittled an initial list of 65 options 
     to two basic alternatives.
       Project proponents, including the Tribes, reduced the size 
     of the project drastically. They cut many project features, 
     principally non-Indian irrigation. Throughout this difficult 
     process, the Tribes steadfastly maintained their desire for 
     construction of a reservoir to hold water which can be an 
     asset for future generations.
       Project opponents developed an alternative involving no 
     reservoir. The alternative calls for the United States to pay 
     money to the Tribes that can be used to buy land and water, 
     or to develop water from other existing water projects on 
     other rivers which have already been adjudicated under the 
     settlement agreement.
       Both Tribal Councils rejected this alternative by official 
     resolutions.
       It was therefore clear that the Romer-Schoettler Process, 
     having made substantial progress, could not bridge the gap 
     between these fundamentally different proposals. Recently, 
     the Tribes asked us to take a position on the two 
     alternatives. Therefore, yesterday we went to Santa Fe, New 
     Mexico, to meet with Tribal leaders and other project 
     participants.
       At that meeting, we reaffirmed our continuing obligations 
     of the State of Colorado to work cooperatively under the 1986 
     settlement agreement, to find and support a solution to the 
     Animas-La Plata controversy. We have maintained that any 
     solution should be fiscally and environmentally responsible.
       Because of that obligation, and the Tribes' legitimate 
     desire for a reservoir, we endorsed the proposal of the 
     project participants for construction of a significantly 
     reduced project. This alternative is more cost-effective and 
     has fewer environmental impacts than the original project 
     configuration. It was developed to fit within all the 
     environmental compliance documentation and approvals that 
     have been done to date. We will be working with the project 
     proponents and the State of New Mexico to develop legislation 
     for introduction in Congress that will authorize this 
     alternative.
       Yesterday, we also committed to meet as soon as possible 
     with Interior Secretary Bruce Babbitt and EPA Administrator 
     Carol Browner. The purpose of our meetings will be to convey 
     our support for the Tribes' and proponents' alternative. We 
     also will express our strong belief that the results of the 
     Romer-Schoettler process should be used to ``fill-in-the-
     gaps'' of the alternatives analysis that the EPA found 
     deficient. We will seek definite commitments from them as to 
     whether they will require any additional information. If so, 
     we will ask them to define the precise time frames for this 
     information so that we can work with the Tribes to introduce 
     legislation in the next Congress.
       We appreciate and value the relationship between the State 
     of Colorado and the Southern Ute and Ute Mountain Ute Tribes. 
     Honoring our promises under the 1986 settlement agreement is 
     critical to that relationship. We will continue to work 
     closely with the Tribes and water users of Southwest Colorado 
     to make sure those promises are kept.
                                                                    ____


                 [From the Denver Post, Nov. 23, 1997]

                         Animas Lite Looks Good

       Gov. Roy Romer and Lt. Gov. Gail Schoettler's endorsement 
     last week of the downsized Animas-La Plata water project has 
     given another boost to a compromise plan that slashes both A-
     LP's cost and its environmental impact by about two-thirds.
       As originally proposed, A-LP would have drawn 190,000 acre-
     feet annually from the Animas River at an estimated cost to 
     taxpayers of $714 million. ``Animas-La Plata Lite,'' as the 
     compromise was inevitably dubbed, would draw only 57,100 
     acre-feet from the river, at a cost of $257 million.
       Even so, A-LP Lite would still meet the legitimate claims 
     of the Southern Ute and Ute Mountain Ute tribes by satisfying 
     the Colorado Ute Indian Water Rights Settlement Act of 1988. 
     The majority of the original project's benefits would have 
     gone to non-Indian users. The scaled-back project eliminates 
     most non-Indian benefits.
       That's as it should be. The Utes were originally granted 
     all of Colorado's Western Slope before being systematically 
     robbed in a series of land grabs that reduced them to their 
     present modest reservations. Colorado and the federal 
     government thus have an obligation to the Utes that is far 
     greater than to non-Indian water users in the area. And as 
     Romer noted last week, A-LP Lite is ``the most realistic way 
     of keeping our obligation to the Indian community.''
       Romer and Schoettler plan to meet with Interior Secretary 
     Bruce Babbitt and Carol Browner, the head of the 
     Environmental Protection Agency, to promote the compromise. 
     We wish them success in their expressed desire of convincing 
     the next session of Congress to fund the compromise plan.
       Schoettler deserves particular credit for midwifing what we 
     hope will be a successful conclusion to this long-running 
     controversy. The lieutenant governor led a series of 
     mediation sessions between project supporters and 
     environmentalists opposed to A-LP. While Schoettler did not 
     succeed in bringing the two sides to a consensus, her efforts 
     went a long way toward crafting the attractive compromise she 
     and Romer endorsed last week. For that, taxpayers, Indians--
     and even those environmentalists willing to settle for two-
     thirds of a loaf--can be grateful.
                                                                    ____


                  [From the Denver Post, Feb. 8, 1998]

                           The Price Is Lite

       Congressional supporters of a radically downsized Animas-La 
     Plata plan are hoping to introduce a bill later this week to 
     fund the long-delayed water project in southwestern Colorado 
     and to at last assure the Southern Ute and Ute Mountain Utes 
     of the rights to ``wet water'' that they have been denied for 
     more than a century.
       The new ``Animas Lite,'' as the proposal is nicknamed, 
     would cost the federal government just $257 million, less 
     than a third of the original $744 million tab.
       The project's environmental impact has also been radically 
     reduced. Originally it would have diverted 150,000 acre-feet 
     of water per year from the Animas River. Now it will take 
     only 57,100 acre-feet. But the cutbacks came mostly at the 
     expense of non-Indian users, and both Ute tribes strongly 
     support the compromise.
       Lt. Gov. Gail Schoettler, who led a year-long mediation 
     effort, deserves much of the credit for mid-wifing the less 
     expensive, more environmentally acceptable alternative, which 
     has also been endorsed by Gov. Roy Romer.
       The upcoming bill to fund the compromise will probably have 
     the support of seven of the eight members of Colorado's 
     congressional delegation. The sole holdout is likely to be 
     Rep. Diana DeGette, D-Denver, who has tended to take the 
     parochial attitude that the southwestern Colorado project 
     doesn't benefit her district.

[[Page S2121]]

       The Post would like to gently remind Rep. DeGette that the 
     federally funded light rail project in southwest Denver 
     provides no direct benefit to southwest Colorado, either--but 
     we haven't seen Rep. Scott McInnis scowling at that crucial 
     link in Colorado's overall transportation needs. Our small 
     state delegation needs to remember Benjamin Franklin's 
     admonition that ``unless we all hang together, we'll all hang 
     separately.''
       More importantly, Animas Lite isn't so much about water as 
     about justice for the Utes, who once owned all the Western 
     Slope before being systematically robbed of most of their 
     lands.
       The insulting alternative to Animas Lite proposed by the 
     Sierra Club--giving the Utes a cash handout--has been 
     unanimously rejected by both tribal councils.
       Animas-La Plata has been debated for more than 30 years. 
     It's time for the government to keep its word to the Utes and 
     build the compromise project.
                                                                    ____


                [From the Durango Herald, Nov. 23, 1997]

                            Build A-LP Lite


 romer-schoettler process did its job--including producing a-lp lite; 
                       now it's time to build it

       No single solution to how to provide the Southern and Ute 
     Mountain Utes the water they have coming resulted from the 
     Romer-Schoettler negotiating process. Far from it. Project 
     proponents still have a reservoir in their plan to store new 
     water, while opponents proposed to strip existing summer 
     water from purchased irrigated land.
       But while the process consumed a year--an additional delay 
     that benefits project opponents who want nothing built--the 
     process was far from wasted.
       Out of it came much-reduced project that would be much more 
     all-Indian. While relatively small amounts of municipal water 
     remain, almost entirely eliminated is the large non-Indian 
     irrigation component. And the two Ute tribes have agreed to 
     accept one-third less water at no charge in exchange for the 
     originally negotiated larger amount at cost.
       In these times of federal budget-balancing, and support for 
     free-flowing rivers, the smaller Animas-La Plata Lite is a 
     big step forward.
       In contrast, the scheme of land purchases the handful of 
     project opponents proposed has little substance. They would 
     find some storage in existing reservoirs, but the bulk of the 
     water would be available in the spring and summer only. 
     Ignored in their plan was the awkward picture of Florida Mesa 
     lands stripped of water, and just how downstream return-flow 
     water users would be compensated.
       Though billed as less expensive than Animas-La Plata Lite 
     and as helping to fulfill the Southern Utes' desire to own 
     more of the land within the external boundaries of their 
     reservation, the land purchases would fall far short of 
     providing the Utes with the kind of water they are owed and 
     would raise plenty of new environmental issues.
       Last week, Gov. Roy Romer and Lt. Gov. Gail Schoettler 
     endorsed Animas-La Plata Lite, and the governor said, if 
     asked, he would urge President Bill Clinton to build it.
       The Environmental Protection Agency, granted extensions to 
     complete its studies, needs to pick up the pace. Removing 
     less water from the Animas River, as spelled out ion A-LP 
     Lite, shouldn't require massive rewrites. The Bureau of 
     Reclamation, which sometimes has behaved as though it wished 
     the Animas-La Plata Project would just go away so it could 
     focus on a new mission of increasing water use efficiency, 
     can't turn its back on the need to build one last dam as 
     cost-effectively as possible.
       The Utes have waited a long time for the water they have 
     coming, and they've reduced their claims to help make Animas-
     La Plata Lite possible. Animas-La Plata Lite ought to be 
     built as soon as possible.
                                                                    ____


               [From the Pueblo Chieftain, Nov. 21, 1997]

                             It's High Time

       The Romer administration has dropped its neutrality on the 
     Animas-La Plata Project in southwestern Colorado to support 
     what's being called Animas-La Plata Lite.
       Gov. Roy Romer and Lt. Gov. Gail Schoettler on Tuesday 
     announced their support of the scaled-back plan to provide 
     water for two Indian tribes in Colorado and northwest New 
     Mexico. The revised proposal would cost an estimated $250 
     million instead of $740 million for the full project.
       The Southern Ute and Ute Mountain Ute tribes suggested the 
     smaller project earlier this year to get the long-stalled 
     project going. A-LP, first authorized by Congress 29 years 
     ago as an irrigation project, was amended in 1986 to include 
     water rights claims by the tribes which were agreed to in a 
     treaty with the United States. Since then, though, 
     environmental groups have fought the project at every 
     juncture.
       Part of their strategy of delay has been to drive up the 
     cost almost geometrically. Thus opponents have aligned 
     themselves with a smattering of fiscally conservative 
     Republicans and liberal Democrats in hypocritically decrying 
     the project's cost.
       A-LP Lite would halve the amount of water diverted for 
     municipal and other uses and would suspend a plan to irrigate 
     non-Indian lands. The amount of water for the tribes would be 
     cut, although they now would receive the lion's share of it.
       During this week's announcement, the governor said he 
     believed the state has an obligation to the tribes, which it 
     does. So does the federal government, which should not 
     abrogate yet another treaty with the Indians, even though the 
     Sierra Club continues to oppose any project other than buying 
     existing water rights and giving them to the tribes.
       With the weight of the state government now behind A-LP 
     Lite, the federal government should press ahead. Three 
     decades of dickering has done no one any good--except those 
     who make their livelihoods being public pests.
                                                                    ____


                [From the Daily Sentinel, Nov. 19, 1997]

                State Leadership, at Long Last, on A-LP

       The era of delays on the Animas-La Plata Water project must 
     end, Gov. Roy Romer and Lt. Gov. Gail Schoettler declared 
     Tuesday. It's time to move forward with the scaled-down 
     version of the project known as A-LP Lite.
       That is the very welcome and long-overdue message Romer and 
     Schoettler delivered to Ute Indian tribal leaders at a 
     meeting in Santa Fe Monday, the same message they promise to 
     take to U.S. Secretary of Interior Bruce Babbitt and EPA 
     Director Carol Browner in the next few weeks.
       One might be forgiven for suggesting that the Romer 
     administration has been at least partially responsible for 
     delays on Animas-La Plata, with its year-long roundtable 
     discussion that failed to reach any resolution between 
     supporters and opponents.
       But Schoettler and Romer maintained Tuesday that the 
     process was important in narrowing the number of alternatives 
     from 65 to two and in prompting project supporters to come up 
     with the ``more realistic'' A-LP Lite. Moreover, the two said 
     in a statewide teleconference with reporters Tuesday, the 
     process could be even more important and timesaving if 
     federal officials accept the various alternatives examined 
     during the Romer-Schoettler discussions rather than requiring 
     yet another reopening of the environmental impact statement 
     for the project to study more alternatives.
       That remains to be seen, of course. But give Romer and 
     Schoettler credit for deciding to push such an idea with 
     Babbitt and Browner.
       And if the governor and lieutenant governor appeared 
     decidedly ambiguous about taking sides a few weeks ago--their 
     Oct. 30 letter to Babbitt and Browner took no position on 
     either alternative and said it was up to the federal agencies 
     to resolve the issue--that ambiguity is gone now.
       ``We both favor A-LP Lite as the most realistic way to meet 
     our commitments to the tribes,'' Romer said. ``We want to 
     expedite the decision-making process so we can get it before 
     Congress in the next session.''
       Echoed Schoettler. ``Our job now is to push this forward to 
     meet our commitments to the tribes.''
       Given Romer's position as chairman of the Democratic 
     National Committee and Schoettler's own eminent stature 
     within the Democratic Party, the two are in positions to have 
     a great deal of influence on Babbitt, Browner and others in 
     the Clinton administration.
       They are less likely, of course, to influence opponents of 
     the Animas-La Plata, who will undoubtedly take Tuesday's 
     announcement as a form of betrayal by the governor and 
     lieutenant governor.
       Romer stressed Tuesday that he didn't want this process 
     dragged out by litigation and delay. Unfortunately, he and 
     Schoettler will be hard-pressed to convince the Sierra Club 
     and its minions of that. The Romer administration should be 
     prepared to commit all of the state's resources at its 
     disposal to overcome the relentless obstructionism of the 
     environmental community to, at long last, fulfill the long-
     denied water promises to Colorado's Ute Indians.

  Mr. ALLARD. Mr. President, I want to add my support to the Colorado 
Ute Indian Water Rights Settlement Act of 1998.
  The project that is before us now represents a scaled down version of 
what was originally promised.
  This project will be inexpensive enough to allow it to pass through 
Congress and finally do something towards fulfilling the obligations of 
the United States to the Tribes and their members, while at the same 
time not being so scaled down and cheap as to fail to live up to the 
promise our government made years ago.
  The Ute Tribes have accepted this proposal even though it is 
significantly less than what they were first offered.
  As to whether they are doing this because a smaller project fits all 
their needs, or because they are realistic enough to admit that the 
long history of broken treaties is most likely not about to stop now, 
I'm sure we all have opinions.
  The Utes are willing to accept this deal for a very simple reason:
  They need water.
  Anybody here can go to a water cooler and get a glass of water. But 
if you want to water your garden, you need a bigger source--a garden 
hose and a faucet.
  And if you need to water your farm, or supply industry, you need a 
bigger source yet.

[[Page S2122]]

  The Ute Indians are hoping they can rely on the Animas La Plata for 
their water needs, and they are hoping they can rely on the Government 
that promised them that water to follow through on delivering the 
water.
  The Act before us focuses on the three main items needed to fulfill 
our obligation. It calls for a storage reservoir to be built to hold 
the promised water, the conveyance needed to transport water to the 
reservoir, and the guarantee to the Ute tribes of the water in that 
reservoir.
  These three things are only, oh, 130 years or so in the coming. The 
Ute Indian Tribe signed a treaty with the U.S. Government in 1868. This 
treaty promised the Ute Indian Tribes a permanent, reliable source of 
water.
  In 1988, the Colorado Ute Indian Water Rights Settlement Act 
reaffirmed these rights. It called for a much larger project than is 
before us now.
  The Ute Indian Tribe would, of course, probably still prefer the full 
Animas La Plata Project. Those who favor upholding the word of the 
United States government to the Ute Indian Tribe would probably prefer 
the full project. However, there are those who don't seem to care about 
these matters who have blocked a larger project.
  What we are considering now is smaller, cheaper, and less extensive, 
but the beneficiaries of it are willing to compromise. They need 
something, anything, more than they need an ideal.
  There are many reasons to vote for this project. I think the best 
reason is not because it is authorized by Congress, not because it is 
ratified by the Supreme Court, not because it is supported by the last 
three Presidents, and not even because it will save the country over 
$400 million from the originally agreed-to project.
  The best reason is simply that this project should be voted for 
because it is the duty and treaty obligation of the United States to 
the Ute Indian Tribes.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 1773. A bill for the relief of Mrs. Ruth Hairston by the waiver of 
a filing deadline for appeal from a ruling relating to her application 
for a survivor annuity; to the Committee on Governmental Affairs.


                       private relief legislation

  Mrs. FEINSTEIN. Mr. President, I rise this morning to introduce 
private relief legislation to assist Mrs. Ruth Hairston, of Carson, 
California. Identical legislation is proceeding through the House, an 
effort led by Representative Juanita Millender-McDonald and I am 
pleased to support this effort.
  Mrs. Hairston requires this extreme step in order to be able to 
pursue a federal court appeal of the Merit Systems Protection Board (# 
CSF 2221413), which denied Mrs. Hairston's eligibility for an annuity 
following the retirement and untimely death of her former husband. The 
legislation does not require the annuity, but will only permit the 
filing of an appeal with the United States Court of Appeals. As a 
result, Mrs. Hairston will be permitted to challenge the denial on the 
merits, rather than accept the denial due to the failure to file an 
appeal within thirty days.
  I would briefly like to describe the facts which warrant this 
legislation.
  Mr. Paul Hairston retired in 1980, electing a survivor annuity for 
Mrs. Hairston. However, the couple was divorced in 1985, entitling Mrs. 
Hairston to receive \1/2\ the retirement benefit under the settlement 
terms. Mr. and Mrs. Hairston began receiving benefits in 1988.
  The Merit Systems Protection Board, which reviews Civil Service 
retirement claims, concluded Mr. Hairston had failed to register Mrs. 
Hairston for survivors benefits following passage of 1985 law, renewing 
the survivor annuity previously selected in 1985. As a result, the 
spousal survivor benefits for Mrs. Hairston were canceled. Following 
Mr. Hairston's death in 1995, Mrs. Hairston's benefits, her portion of 
his retirement benefit under the divorce settlement, ceased. Mrs. 
Hairston was denied eligibility as a surviving spouse, but did not 
challenge or appeal the denial of eligibility, due to hospitalization 
and poor health.
  I am pleased to introduce this private relief legislation to assist 
my constituent Mrs. Ruth Hairston. While this legislation represents an 
extraordinary measure, the step is necessary in order to permit a 
federal court appeal of the denial of eligibility by he Merit Systems 
Protection Board. As I have previously stated, this legislation does 
not require any specific outcome. The federal court will review the 
appeal with all the rigor the case deserves. However, Mrs. Hairston 
will receive her day in court and the opportunity to challenger the 
decision by the Merit Systems Protection Board to deny eligibility.
  This legislation was brought to my attention by Representative 
Juanita Millender-McDonald, who has been pursuing identical legislation 
in the House. I understand Mrs. Hairston is under considerable 
financial pressure and could face foreclosure on her home. I am pleased 
to try to assist Mrs. Hairston in her appeal.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1773

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

     SECTION 1. WAIVER OF DEADLINE FOR APPEAL.

       For purposes of a petition by Mrs. Ruth Hairston of Carson, 
     California, for review of the final order issued October 31, 
     1995, by the Merit Systems Protection Board with respect to 
     docket number SF-0831-95-0754-I-1, the 30-day filing deadline 
     in section 7703(b)(1) of title 5, United States Code, is 
     waived.
                                 ______
                                 
      By Mr. LOTT (for himself and Mr. Cochran):
  S. 1774. A bill to amend the Consolidated Farm and Rural Development 
Act to authorize the Secretary of Agriculture to make guaranteed farm 
ownership loans and guaranteed farm operating loans of up to $600,000, 
and to increase the maximum loan amounts with inflation; to the 
Committee on Agriculture, Nutrition, and Forestry.


             the family farm credit opportunity act of 1998

  Mr. LOTT. Mr. President, I rise today to introduce the Family Farm 
Credit Opportunity Act of 1997, a bill that will correct an inequity in 
the Farm Service Agency's (FSA) Guaranteed Loan Program. Currently, 
this program has upper limits on the amounts that can be guaranteed by 
the FSA. Specifically, the two types of loans administered under this 
program--farm ownership loans and operating loans--have caps of 
$300,000 and $400,000, respectively. The farm ownership loan cap was 
adjusted to its current level in 1978, while the operating loan cap was 
last raised in 1984. That is 20 years ago for one and 14 years ago for 
the other. A great deal has changed. Prices have gone up and inflation 
has eroded the value of the caps. Back then, farm ownership and 
operating costs could be adequately financed within both of these cap 
limits. Not anymore. It is time for a cap correction.
  Given today's larger and more capital-intensive farming operations, 
the limits must be raised in order to realistically meet the needs of 
those seeking financing through the Guaranteed Loan Program. For 
example, in my home state of Mississippi, poultry is a growing 
industry. In the early 1980's a typical poultry house cost 
approximately $65,000. Today the same poultry house can cost up to 
$125,000. However, most banks will not finance a beginning poultry farm 
with less than four poultry houses. That makes the initial costs 
$500,000. It is easy to see that a minimum of four poultry houses at a 
cost of $125,000 per house exceeds the farm ownership cap level of 
$300,000 in the Guaranteed Loan Program. This is just one example of 
how the upper limits on loans can eliminate qualified applicants. This 
type of problem exists throughout the entire agricultural community, 
not just the poultry industry.
  To address this problem, I am introducing the Family Farm Credit 
Opportunity Act of 1998 which would raise the cap limits on both the 
farm ownership loan and the operating loan to $600,000.
  Mr. President, this is the companion bill to the one introduced by 
Representative Chip Pickering from Mississippi. He saw a problem and he 
has proposed a responsible fix. The poultry example displays how much 
agriculture has changed since the caps were last amended twenty years 
ago. In fact, while the increase in the cap limits may seem substantial 
at first, neither

[[Page S2123]]

increase reflects the increase just caused by inflation. We should at 
least keep up with inflation for a program that has served as a vehicle 
of opportunity for the small family farmer. In today's budget-minded 
era, I believe we must find solutions that will not only correct 
problems that have been developing over the years, but find solutions 
at a relatively low cost to the taxpayer. That is why my bill increases 
the cap limits to specific amounts ($600,000) for the coming year, but 
also includes a provision to index both caps for inflation beginning in 
year two. This last provision will allow the caps to automatically 
adjust for inflation, which will provide a long-term fix to assure that 
the family farm does not again outgrow the upper limits of the farm 
ownership loan or the operating loan over time.

  I would like to point out that my bill will not guarantee acceptance 
of applications submitted to the FSA. Farmers would still have to go 
through the vigorous application process, but if the individual is 
eligible and accepted he or she would have the opportunity to receive 
adequate financing through a farm ownership or operating loan.
  Mr. President, we must preserve the family farm and continue 
America's tradition of promoting family farmers. Congress must provide 
a mechanism which enables family farmers to receive the necessary funds 
for ownership and operation of a farming business.
  Congress appropriates money for the FSA Guarantee Loan Program each 
year. Congress should put this money to its best and most efficient 
use. We should take a step back and take a good look at what a family 
farmer in 1997 really is? It is not the 1978 farmer with 1978 costs. Of 
course these programs should be run as efficiently as possible.
  Mr. President, as for the ``family farmer,'' they still exist and are 
successful, but they aren't the same as they were 20 years ago. Why? 
Well, let's look at some of the changes that have occurred over this 
period.
  First of all, markets have become global. Not only do our farmers 
have to compete with each other, but also with farmers around the 
world--farmers in China, Japan, Russia, Canada, Mexico just to name a 
few. Technology and research have both been overwhelmingly successful 
in allowing America to increase its production with less land. We are 
now able to idle environmentally sensitive land that is less productive 
and therefore ensure that we never revert back to the ``Dust Bowl'' 
days of the 1930's. Today farmers live in a capital intensive world. In 
fact, we cannot talk about agriculture today without mentioning how the 
industry has drastically shifted from a labor-intensive industry to an 
industry dominated by capital.
  Twenty years ago, who could have imagined that farmers would be using 
satellites to level their land or to tell them exactly where chemical 
applications are needed? Who could have imagined that biotechnology 
would yield such complex seed developments?
  Who could have imagined that farmers would have the technology to so 
closely monitor the growth of animals or that farmers would have the 
ability to specifically and scientifically regulate diets in order to 
achieve faster growth with less fat?
  Mr. President my point is that agriculture has changed and so has the 
family farmer. The Guaranteed Loan Program was designed to help the 
family farmer. Let's make sure it is big enough to do just that. In 
order to continue this goal, we must address the needs of today, not of 
1978 by providing the capital necessary to compete and be successful in 
1998.
  The family farmer is a larger operator relative to 1978 standards. We 
need new cap limits that reflect this change.
  Mr. President, I want to truly help the family farmer. Mr. President, 
Mr. Pickering, my colleague in the House wants to truly help the family 
farmer.
  Let's fix a program that has been successful in the past in helping 
this critical sector of our country. Let us not stop the progress of 
our family farmers. Congress should not deny any eligible person in our 
nation the opportunity to own and operate a family farm in order to 
pursue their idea of the American dream.
  Mr. President, I ask unanimous consent that the text of the bill be 
inserted in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1774

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

     SECTION 1. INCREASE IN MAXIMUM AMOUNT OF GUARANTEED FARM 
                   OWNERSHIP LOANS; INDEXATION TO INFLATION.

       Section 305 of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1925) is amended--
       (1) by striking ``Sec. 305. The'' and inserting:

     ``SEC. 205. MAXIMUM AMOUNT OF FARM OWNERSHIP LOANS.

       ``(a) In General.--The'';
       (2) by striking ``of (1) the'' and inserting ``of--
       ``(1) the'';
       (3) by striking ``security, or (2) in'' and inserting 
     ``security; or
       ``(2) in'';
       (4) by striking ``$300,000'' and inserting ``$600,000 
     (increased, beginning with fiscal year 1998, by the inflation 
     percentage applicable to the fiscal year in which the loan is 
     made or insured)'';
       (5) by striking ``In determining'' and inserting the 
     following:
       ``(b) Value of Farms.--In determining''; and
       (6) by adding at the end the following:
       ``(c) Inflation Percentage.--For purposes of subsection 
     (a)(2), the inflation percentage applicable to a fiscal year 
     is the percentage (if any) by which--
       ``(1) the average of the Consumer Price Index (as defined 
     in section 1(f)(5) of the Internal Revenue Code of 1986) for 
     the 12-month period ending on August 31 of the preceding 
     fiscal year; exceeds
       ``(2) the average of the Consumer Price Index for the 12-
     month period ending on August 31, 1996.''.

     SEC. 2. INCREASE IN MAXIMUM AMOUNT OF GUARANTEED FARM 
                   OPERATING LOANS; INDEXATION TO INFLATION.

       Section 313 of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1943) is amended--
       (1) by striking ``Sec. 313. The'' and inserting:

     ``SEC. 313. MAXIMUM AMOUNT OF FARM OPERATING LOANS.

       ``(a) In General.--The'';
       (2) by striking ``subtitle (1) that'' and inserting 
     ``subtitle--
       ``(1) that'';
       (3) by striking ``$400,000; or (2) for'' and inserting 
     ``$600,000 (increased, beginning with fiscal year 1998, by 
     the inflation percentage applicable to the fiscal year in 
     which the loan is made or insured); or
       ``(2) for''; and
       (4) by adding at the end the following:
       ``(b) Inflation Percentage.--For purposes of subsection 
     (a)(1), the inflation percentage applicable to a fiscal year 
     is the percentage (if any) by which--
       ``(1) the average of the Consumer Price Index (as defined 
     in section 1(f)(5) of the Internal Revenue Code of 1986) for 
     the 12-month period ending on August 31 of the preceding 
     fiscal year; exceeds
       ``(2) the average of the Consumer Price Index for the 12-
     month period ending on August 31, 1996.''.
                                 ______
                                 
      By Mr. FAIRCLOTH:
  S. 1786. A bill to provide for the conduct of a study and report 
concerning the ability of the Centers for Disease Control and 
Prevention to address the growing threat of viral epidemics and 
biological and chemical terrorism; to the Committee on Labor and Human 
Resources.


         centers for disease control and prevention legislation

  Mr. FAIRCLOTH. Mr. President, I rise today to introduce legislation 
to address the growing threats of viral epidemics and bioterrorism in 
our nation. I have serious concerns that one of our nation's first 
lines of defense, the CDC, may not have adequate resources to address 
these increasingly serious problems.
  Scientists meeting at the International Conference on Emerging 
Infectious Disease in Atlanta last week concluded we were only slightly 
better prepared today to handle a biologic attack than we were in 1991 
at the start of Desert Storm, and we were totally ill-prepared then! 
While the U.S. military prepares to vaccinate our troops against 
anthrax, there is currently no national plan to protect civilians from 
this deadly virus.
  Ironically, the day after the International Infectious Disease 
conference, a business located in Phoenix was threatened with a 
bioterrorism attack involving an envelope supposedly soaked with the 
deadly anthrax virus, sending ten employees to the hospital. This comes 
on the heels of an earlier FBI arrest of two men in Las Vegas who 
claimed to have anthrax in their possession.
  This growing threat is real, and not limited to germs used in war. 
The first

[[Page S2124]]

recorded case of bioterrorism occurred in 1984, when members of a 
religious cult in Oregon deliberately contaminated local salad bars 
with the salmonella bacteria, causing 751 cases of fever, diarrhea and 
abdominal pain. Their goal had been to incapacitate voters so they 
could sway a local election.
  More recently, we've seen many diseases we thought we'd conquered 
reappearing in more virulent forms. Since December, 26 Texans have died 
and hundreds fallen ill from an outbreak of an invasive Group A 
streptococcus bacteria. In Milwaukee, contaminated drinking water 
sickened 400,000 citizens and sent 4,000 to the hospital with over 50 
deaths.
  Mr. President, I voiced my concern that the Centers for Disease 
Control does not have the resources necessary to fight these wars with 
Secretary Shalala at the Labor, Health and Human Services 
Appropriations Subcommittee hearing last week, and have asked that the 
Subcommittee Chairman, my colleague from Pennsylvania, Senator Specter 
join me in holding a hearing on the agency's role and abilities to meet 
these growing threats.
  Let me take a few moments now to share my concern with my colleagues 
by asking a question: What do bioterrorism, natural and manmade 
disasters, contaminated food and water supplies, and epidemics have in 
common? The answer may come as a surprise--the lynchpin to combating 
any of these life-threatening situations are the 3,000 state, county 
and local health departments in this country, working in cooperation 
with the Centers for Disease Control.
  Most people would be shocked to learn that the very network that is 
supposed to play a role in providing a first line of defense against 
these threats--the 3,000 health departments scattered across the United 
States--are in most cases not computer linked with the command center, 
CDC. Only 40 percent of our health departments are on-line today. The 
remainder need computer hardware, training and manpower to be able to 
connect. Local health departments also need laboratory capability to be 
able to test the agents suspected of causing a threat--presently these 
samples have to be shipped off-site to be tested, wasting valuable 
response time.
  The warning signs are there. Were this a military operation, with the 
enemy amassing on our borders, we would have no hesitation nor would we 
question the need for additional resources. We should do nothing less 
when lives are threatened by disease. CDC forms a triage with state and 
local health departments and other important governmental agencies to 
combat disease and biologic threats.
  While CDC has become well known world-wide as the ``disease 
detectives,'' the public and many of my colleagues are probably unaware 
of the work they perform with their law enforcement, military and 
intelligence agency colleagues in the biologic and chemical warfare 
arena. CDC's Epidemiologic Intelligence Service school produces highly 
trained epidemiologists from these agencies to deal with these deadly, 
newly emerging threats. Every state should have at least one graduate 
from the Epidemiologic Intelligence Service School--currently, less 
than half have someone with these skills.
  Additionally, CDC's National Center for Infectious Diseases, the 
Public Health Practice Program Office and the National Center for 
Environmental Health also play key roles in ensuring the preparedness 
of the public health response.
  The legislation I'm introducing today is simple. It asks that the 
Centers for Disease Control report to Congress within sixty days in 
regard to their resources and readiness to respond to the growing 
threats of viral epidemics, biologic and chemical threats. I intend to 
focus on this when we discuss this at a future hearing, and am looking 
forward to learning how we can improve our ability to address this 
growing threat.
  Unfortunately, our public health departments are operating under 
severe constraints with about one-third lacking even the most basic 
technology for communications or access to advanced training. One thing 
is certain, not one link in our public health defense can operate in a 
vacuum because disease knows no political or geographic boundaries.
  In the days ahead as we set our priorities for appropriations and 
budget, it is time, and past time, that we place a priority on 
investing in local public health department infrastructure. Otherwise, 
we may find that the cost of our neglect is more than any of us are 
willing to pay.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1786

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

     SECTION 1. STUDY CONCERNING THE CAPABILITIES OF THE CENTERS 
                   FOR DISEASE CONTROL AND PREVENTION.

       (a) Study.--The Secretary of Health and Human Services 
     shall conduct a study concerning the ability of, and 
     resources available to, the Centers for Disease Control and 
     Prevention to address the growing threats of viral epidemics 
     and biologic and chemical terrorism.
       (b) Report.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services shall prepare and submit to the appropriate 
     committees of Congress a report concerning the results of the 
     study conducted under subsection (a), including the 
     recommendations of the Secretary for improving the ability 
     and resources of the Centers for Disease Control and 
     Prevention to address the growing threats of viral epidemics 
     and biologic and chemical terrorism.
                                 ______
                                 
      By Mr. GRAMM (for himself, Mrs. Hutchison, Mr. Grassley, Mr. 
        D'Amato, Mr. Kyl, Mr. Gorton, Mrs. Feinstein, Mr. Bingaman, 
        Mrs. Murray, Mr. McCain, and Mr. Domenici):
  S. 1787. A bill to authorize additional appropriations for United 
States customs Service personnel and technology in order to expedite 
the flow of legal commercial and passenger traffic at United States 
land borders; to the Committee on Finance.


                   united states customs legislation

  Mr. GRAMM. Mr. President, on behalf of Senators Hutchison, Kyl, 
Feinstein, Boxer, Bingaman, McCain, and Domenici (all the Southwest 
Border senators), as well as Senators Grassley, D'Amato, Gorton, and 
Murray, I am introducing legislation today which will authorize the 
United States Customs Service to acquire the necessary personnel and 
technology to reduce delays at our border crossings with Mexico and 
Canada to no more than 20 minutes, while strengthening our commitment 
to interdict illegal narcotics and other contraband.
  I am very concerned about the impact of narcotics trafficking on 
Texas and the nation and have worked closely with federal and state law 
enforcement officials to identify and secure the necessary resources to 
battle the onslaught of illegal drugs. At the same time, however, our 
current enforcement strategy is burdened by insufficient staffing, a 
gross underuse of vital interdiction technology and is effectively 
closing the door to legitimate trade.
  At a time when NAFTA and the expanding world marketplace are making 
it possible for us to create more commerce, freedom and opportunity for 
people on both sides of the border, it is important that we eliminate 
the border crossing delays that are stifling these goals. In order for 
all Americans to fully enjoy the benefits of growing trade with Mexico 
and Canada, we must ensure that the Customs Service has the resources 
necessary to accomplish its mission. Customs inspections should not be 
obstacles to legitimate trade and commerce. Customs staffing needs to 
be increased significantly to facilitate the flow of substantially 
increased traffic on both the Southwestern and Northern borders, and 
these additional personnel need the modern technology that will allow 
them to inspect more cargo, more efficiently. The practical effect of 
these increases will be to open all the existing primary inspection 
lanes where congestion is a problem during peak hours and to enhance 
investigative capabilities on the Southwest border.
  Long traffic lines at our international crossings are 
counterproductive to improving our trade relationship with Mexico and 
Canada. This bill is designed to shorten those lines and promote 
legitimate commerce, while providing the Customs Service with the means 
necessary to tackle the drug trafficking operations that are now 
rampant along the 1,200-mile border that my State shares with Mexico.

[[Page S2125]]

I will be speaking further to my colleagues about this initiative and 
urge their support for the bill.
                                 ______
                                 
      By Mr. MOYNIHAN:
  S. 1788. A bill to amend titles XI and XVIII of the Social Security 
Act to combat waste, fraud, and abuse in the medicare program; to the 
Committee on Finance.


             the medicare fraud and overpayment act of 1998

  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1788

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

     SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; 
                   TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Medicare 
     Fraud and Overpayment Act of 1998''.
       (b) Amendments to Social Security Act.--Except as otherwise 
     specifically provided, whenever in this Act an amendment is 
     expressed in terms of an amendment to or repeal of a section 
     or other provision, the reference shall be considered to be 
     made to that section or other provision of the Social 
     Security Act.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; amendments to Social Security Act; table of 
              contents.
Sec. 2. No mark-up for drugs, biologicals, or parenteral nutrients.
Sec. 3. Mental health partial hospitalization services
Sec. 4. Information requirements.
Sec. 5. Eliminate overpayments for epogen.
Sec. 6. Centers of excellence.
Sec. 7. Repeal of clarification concerning levels of knowledge required 
              for imposition of civil monetary penalties.
Sec. 8. Repeal of expanded exception for risk-sharing contract to anti-
              kickback provisions.
Sec. 9. Limiting the use of automatic stays and discharge in bankruptcy 
              proceedings for provider liability for health care fraud.
Sec. 10. Administrative fees for medicare overpayment collection.

     SEC. 2. NO MARK-UP FOR DRUGS, BIOLOGICALS, OR PARENTERAL 
                   NUTRIENTS.

       (a) In General.--Section 1842(o) (42 U.S.C. 1395u(o)), as 
     added by section 4556(a) of the Balanced Budget Act of 1997, 
     is amended to read as follows:
       ``(o)(1) If a physician's, supplier's, or any other 
     person's bill or request for payment for services includes a 
     charge for a drug, biological, or parenteral nutrient for 
     which payment may be made under this part and the drug, 
     biological, or parenteral nutrient is not paid on a cost or 
     prospective payment basis as otherwise provided in this part, 
     the payment amount established in this subsection for the 
     drug, biological, or parenteral nutrient shall be the lowest 
     of the following:
       ``(A) The actual acquisition cost, as defined in paragraph 
     (2), to the person submitting the claim for payment for the 
     drug, biological, or parenteral nutrient.
       ``(B) 95 percent of the average wholesale price of such 
     drug, biological, or parenteral nutrient, as determined by 
     the Secretary.
       ``(C) For payments for drugs, biologicals, or parenteral 
     nutrients furnished on or after January 1, 2000, the median 
     actual acquisition cost of all claims for payment for such 
     drugs, biologicals, or parenteral nutrients for the 12-month 
     period beginning July 1, 1998 (and adjusted, as the Secretary 
     determines appropriate, to reflect changes in the cost of 
     such drugs, biologicals, or parenteral nutrients due to 
     inflation, and such other factors as the Secretary determines 
     appropriate).
       ``(D) The amount otherwise determined under this part.
       ``(2) For purposes of paragraph (1)(A), the term `actual 
     acquisition cost' means, with respect to such drugs, 
     biologicals, or parenteral nutrients the cost of the drugs, 
     biologicals, or parenteral nutrients based on the most 
     economical case size in inventory on the date of dispensing 
     or, if less, the most economical case size purchased within 
     six months of the date of dispensing whether or not that 
     specific drug, biological, or nutrient was furnished to an 
     individual whether or not enrolled under this part. Such term 
     includes appropriate adjustments, as determined by the 
     Secretary, for all discounts, rebates, or any other benefit 
     in cash or in kind (including travel, equipment, or free 
     products). The Secretary shall include an additional payment 
     for administrative, storage, and handling costs.
       ``(3)(A) No payment shall be made under this part for 
     drugs, biologicals, or parenteral nutrients to a person whose 
     bill or request for payment for such drugs, biologicals, or 
     parenteral nutrients does not include a statement of the 
     person's actual acquisition cost.
       ``(B) A person may not bill an individual enrolled under 
     this part--
       ``(i) any amount other than the payment amount specified in 
     paragraph (1), (4), or (5) (plus any applicable deductible 
     and coinsurance amounts), or
       ``(ii) any amount for such drugs, biologicals, or 
     parenteral nutrients for which payment may not be made 
     pursuant to subparagraph (A).
       ``(C) If a person knowingly and willfully in repeated cases 
     bills one or more individuals in violation of subparagraph 
     (B), the Secretary may apply sanctions against that person in 
     accordance with subsection (j)(2).
       ``(4) The Secretary may pay a reasonable dispensing fee 
     (less the applicable deductible and coinsurance amounts) for 
     drugs or biologicals to a licensed pharmacy approved to 
     dispense drugs or biologicals under this part, if payment for 
     such drugs or biologicals is made to the pharmacy.
       ``(5) The Secretary shall pay a reasonable amount (less the 
     applicable deductible and coinsurance amounts) for the 
     services associated with the furnishing of parenteral 
     nutrients for which payment is determined under this 
     subsection.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to drugs, biologicals, and parenteral nutrients 
     furnished on or after January 1, 1999.
       (c) Elimination of Report on Average Wholesale Price.--
     Section 4556 of the Balanced Budget Act of 1997 is amended--
       (1) by striking subsection (c); and
       (2) by redesignating subsection (d) as subsection (c).

     SEC. 3. MENTAL HEALTH PARTIAL HOSPITALIZATION SERVICES

       (a) Limitation on Location of Provision of Services.--
       (1) In general.--Section 1861(ff)(2) (42 U.S.C. 
     1395x(ff)(2)) is amended in the matter following subparagraph 
     (I)--
       (A) by striking ``and furnished'' and inserting 
     ``furnished''; and
       (B) by inserting before the period the following: ``, and 
     furnished other than in a skilled nursing facility or in an 
     individual's home or other residential setting''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply to partial hospitalization services furnished on 
     or after the first day of the sixth month beginning after the 
     date of the enactment of this Act.
       (b) Qualifications for Community Mental Health Centers.--
     Section 1861(ff)(3)(B) (42 U.S.C. 1395x(ff)(3)(B)) is amended 
     by striking ``entity'' and all that follows and inserting the 
     following: ``entity that--
       ``(i) provides the mental health services described in 
     paragraph (1) of section 1913(c) of the Public Health Service 
     Act;
       ``(ii) meets applicable licensing or certification 
     requirements for community mental health centers in the State 
     in which it is located; and
       ``(iii) meets such additional standards as the Secretary 
     shall specify to ensure (I) the health and safety of 
     individuals being furnished such services, (II) the effective 
     or efficient furnishing of such services, and (III) the 
     compliance of such entity with the criteria described in such 
     section.''.

     SEC. 4. INFORMATION REQUIREMENTS.

       (a) Information from Group Health Plans.--Section 1862(b) 
     is amended by adding at the end the following:
       ``(7) Information from group health plans.--
       ``(A) Provision of information by group health plans.--The 
     administrator of a group health plan subject to the 
     requirements of paragraph (1) shall provide to the Secretary 
     such of the information elements described in subparagraph 
     (C) as the Secretary specifies, and in such manner and at 
     such times as the Secretary may specify (but not more 
     frequently than four times per year), with respect to each 
     individual covered under the plan who is entitled to any 
     benefits under this title.
       ``(B) Provision of information by employers and employee 
     organizations.--An employer (or employee organization) that 
     maintains or participates in a group health plan subject to 
     the requirements of paragraph (1) shall provide to the 
     administrator of the plan such of the information elements 
     required to be provided under subparagraph (A), and in such 
     manner and at such times as the Secretary may specify, at a 
     frequency consistent with that required under subparagraph 
     (A) with respect to each individual described in subparagraph 
     (A) who is covered under the plan by reason of employment 
     with that employer or membership in the organization.
       ``(C) Information elements.--The information elements 
     described in this subparagraph are the following:
       ``(i) Elements concerning the individual.--

       ``(I) The individual's name.
       ``(II) The individual's date of birth.
       ``(III) The individual's sex.
       ``(IV) The individual's social security insurance number.
       ``(V) The number assigned by the Secretary to the 
     individual for claims under this title.
       ``(VI) The family relationship of the individual to the 
     person who has or had current or employment status with the 
     employer.

       ``(ii) Elements concerning the family member with current 
     or former employment status.--

       ``(I) The name of the person in the individual's family who 
     has current or former employment status with the employer.
       ``(II) That person's social security insurance number.
       ``(III) The number or other identifier assigned by the plan 
     to that person.
       ``(IV) The periods of coverage for that person under the 
     plan.
       ``(V) The employment status of that person (current or 
     former) during those periods of coverage.

[[Page S2126]]

       ``(VI) The classes (of that person's family members) 
     covered under the plan.

       ``(iii) Plan elements.--

       ``(I) The items and services covered under the plan.
       ``(II) The name and address to which claims under the plan 
     are to be sent.

       ``(iv) Elements concerning the employer.--

       ``(I) The employer's name.
       ``(II) The employer's address.
       ``(III) The employer identification number of the employer.

       ``(D) Use of identifiers.--The administrator of a group 
     health plan shall utilize a unique identifier for the plan in 
     providing information under subparagraph (A) and in other 
     transactions, as may be specified by the Secretary, related 
     to the provisions of this subsection. The Secretary may 
     provide to the administrator the unique identifier described 
     in the preceding sentence.
       ``(E) Penalty for noncompliance.--Any entity that knowingly 
     and willfully fails to comply with a requirement imposed by 
     the previous subparagraphs shall be subject to a civil money 
     penalty not to exceed $1,000 for each incident of such 
     failure. The provisions of section 1128A (other than 
     subsections (a) and (b)) shall apply to a civil money penalty 
     under the previous sentence in the same manner as those 
     provisions apply to a penalty or proceeding under section 
     1128A(a).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect 180 days after the date of enactment of 
     this Act.

     SEC. 5. ELIMINATE OVERPAYMENTS FOR EPOGEN.

       Section 1881(b)(11)(B)(ii) (42 U.S.C. 1395rr(b)(11)(B)(ii)) 
     is amended--
       (1) in subclause (I)--
       (A) by striking ``provided during 1994'' and inserting 
     ``provided before fiscal year 1999''; and
       (B) by striking ``and'' at the end;
       (2) by redesignating subclause (II) as subclause (III);
       (3) by inserting after subclause (I) the following new 
     subclause:
       ``(II) for erythropoietin provided during fiscal year 1999, 
     in an amount equal to $9 per thousand units (rounded to the 
     nearest 100 units), and''; and
       (4) in subclause (III), as so redesignated, by striking 
     ``year'' each place it occurs and inserting ``fiscal year''.

     SEC. 6. CENTERS OF EXCELLENCE.

       (a) In General.--Title XVIII is amended by inserting after 
     section 1896 the following new section:


                        ``centers of excellence

       ``Sec. 1897. (a) In General.--The Secretary shall use a 
     competitive process to contract with specific hospitals or 
     other entities for furnishing services related to surgical 
     procedures, and for furnished services (unrelated to surgical 
     procedures) to hospital inpatients that the Secretary 
     determines to be appropriate. Such services may include any 
     services covered under this title that the Secretary 
     determines to be appropriate, including post-hospital 
     services.
       ``(b) Quality Standards.--Only entities that meet quality 
     standards established by the Secretary shall be eligible to 
     contract under this section. In considering quality, the 
     Secretary shall take into account the quality, experience, 
     and quantity of services of physicians who provide services 
     in more than one entity. Contracting entities shall implement 
     a quality improvement plan approved by the Secretary.
       ``(c) Payment.--Payment under this section shall be made on 
     the basis of negotiated all-inclusive rates. The amount of 
     payment made by the Secretary to an entity under this title 
     for services covered under a contract shall be less than the 
     aggregate amount of the payments that the Secretary would 
     have otherwise made for the services.
       ``(d) Contract Period.--A contract period shall be 3 years 
     (subject to renewal), as long as the entity continues to meet 
     quality and other contractual standards.
       ``(e) Incentives for Use of Centers.--The Secretary may 
     permit entities under a contract under this section to 
     furnish additional services or waive beneficiary cost-
     sharing, subject to the approval of the Secretary.
       ``(f) Limit on Number of Centers.--The Secretary shall 
     limit the number of centers in a geographic area to the 
     number needed to meet projected demand for contracted 
     services.''.
       (b) Effective Dates.--
       (1) The amendment made by subsection (a) applies to 
     services furnished on or after October 1, 1998.
       (2) By October 1, 1998, the Secretary shall enter into 
     contracts under the amendment made by subsection (a) for 
     coronary artery by-pass surgery and other heart procedures, 
     knee replacement surgery, and hip replacement surgery, in 
     geographic areas nationwide such that at least 20 percent of 
     the projected number of those procedures can be provided 
     under such contracts.

     SEC. 7. REPEAL OF CLARIFICATION CONCERNING LEVELS OF 
                   KNOWLEDGE REQUIRED FOR IMPOSITION OF CIVIL 
                   MONETARY PENALTIES.

       (a) Elimination of ``Knowing'' Standard.--Section 1128A(a) 
     (42 U.S.C. 1320a-7a(a)) is amended by striking ``knowingly'' 
     in paragraphs (1), (2), and (3).
       (b) Elimination of Statutory Definition of ``Should 
     Know''.--Section 1128A(i) (42 U.S.C. 1320a-7a(i)) is amended 
     by striking paragraph (7).
       (c) Effective Date.--The amendments made by this section 
     shall apply to acts or omissions occurring on or after the 
     date of the enactment of this Act.

     SEC. 8. REPEAL OF EXPANDED EXCEPTION FOR RISK-SHARING 
                   CONTRACT TO ANTI-KICKBACK PROVISIONS.

       (a) In General.--Section 1128B(b)(3) (42 U.S.C. 1320a-
     7b(b)(3)) is amended--
       (1) by adding ``and'' at the end of subparagraph (D);
       (2) by striking ``; and'' at the end of subparagraph (E) 
     and inserting a period; and
       (3) by striking subparagraph (F).
       (b) Elimination of Report.--Subsection (b) of section 216 
     of the Health Insurance Portability and Accountability Act of 
     1996 is repealed.
       (c) Effective Dates.--(1) The amendments made by subsection 
     (a) shall apply to remuneration provided on or after the date 
     of the enactment of this Act, regardless of whether it is 
     pursuant to an agreement or arrangement entered into before 
     such date.
       (2) Subsection (b) shall take effect on the date of the 
     enactment of this Act.

     SEC. 9. LIMITING THE USE OF AUTOMATIC STAYS AND DISCHARGE IN 
                   BANKRUPTCY PROCEEDINGS FOR PROVIDER LIABILITY 
                   FOR HEALTH CARE FRAUD.

       (a) Nonapplicability of Automatic Stay Provisions.--
       (1) In exclusion proceedings.--Section 1128 (42 U.S.C. 
     1320a-7), as amended by section 4303(a) of the Balanced 
     Budget Act of 1997, is amended by adding at the end the 
     following new subsection:
       ``(k) Nonapplicability of Bankruptcy Stay.--An exclusion 
     imposed under this section or a proceeding seeking an 
     exclusion under this section is not subject to the automatic 
     stay under section 362(a) of title 11, United States Code.''.
       (2) In civil money penalty proceedings.--Section 1128A(a) 
     (42 U.S.C. 1320a-7a(a)) is amended by adding at the end the 
     following: ``An exclusion, penalty, or assessment imposed 
     under this section or a proceeding that seeks an exclusion, 
     penalty, or assessment under this section, is not subject to 
     the automatic stay under section 362(a) of title 11, United 
     States Code. Notwithstanding any other provision of law, 
     amounts made payable under this section are not dischargeable 
     under any provision of such title.''.
       (3) In recoupment under part a of medicare.--Section 
     1815(d) (42 U.S.C. 1395g(d)) is amended--
       (A) by inserting ``(1)'' after ``(d)'', and
       (B) by adding at the end the following:
       ``(2) The recoupment of an overpayment under this section 
     is not subject to the automatic stay under section 362(a) of 
     title 11, United States Code. Notwithstanding any other 
     provision of law, amounts due to the Secretary under this 
     section are not dischargeable under any provision of such 
     title.''.
       (4) In recoupment under part b of medicare.--Section 
     1833(j) (42 U.S.C. 1395l(j)) is amended--
       (A) by inserting ``(1)'' after``(j)'', and
       (B) by adding at the end the following:
       ``(2) The recoupment of an overpayment under this section 
     is not subject to the automatic stay under section 362(a) of 
     title 11, United States Code. Notwithstanding any other 
     provision of law, amounts due to the Secretary under this 
     section are not dischargeable under any provision of such 
     title.''.
       (5) In collection of overdue payments on scholarships and 
     loans.--Section 1892(a)(4) (42 U.S.C. 1395ccc(a)(4)) is 
     amended by adding at the end the following:
       ``(5) An exclusion imposed under paragraph (2)(C)(ii) or 
     (3)(B) is not subject to the automatic stay under section 
     362(a) of title 11, United States Code.''.
       (b) Nondischargability.--
       (1) In civil money penalty proceedings.--Section 1128A(a) 
     (42 U.S.C. 1320a-7a(a)), as amended by subsection (a)(2), is 
     further amended by adding at the end the following: 
     ``Notwithstanding any other provision of law, amounts made 
     payable under this section are not dischargeable under any 
     provision of such title.''.
       (2) In recoupment under part a of medicare.--Section 
     1815(d) (42 U.S.C. 1395g(d)(2)), as amended by subsection 
     (a)(3), is further amended by adding at the end the 
     following:
       ``(3) Notwithstanding any other provision of law, amounts 
     due to the Secretary under this section are not dischargeable 
     under any provision of such title.''.
       (3) In recoupment under part b of medicare.--Section 
     1833(j) (42 U.S.C. 1395l(j)), as amended by subsection 
     (a)(4), is further amended by adding at the end the 
     following: ``Notwithstanding any other provision of law, 
     amounts due to the Secretary under this section are not 
     dischargeable under any provision of such title.''.
       (c) Effective Dates.--
       (1) The amendments made by subsection (a) shall apply to 
     bankruptcy petitions filed after the date of the enactment of 
     this Act.
       (2) The amendments made by subsection (b) shall apply on 
     and after the date of the enactment of this Act to any 
     proceeding which has not been completed as of such date.

     SEC. 10. ADMINISTRATIVE FEES FOR MEDICARE OVERPAYMENT 
                   COLLECTION.

       (a) Administrative Fees for Providers of Services Under 
     Part A.--Section 1815(d) (42 U.S.C. 1395g(d)), as amended by 
     section 9(a)(3), is amended by adding at the end the 
     following new paragraph:
       ``(3)(A) Except as provided in subparagraph (B), if the 
     payment of the excess described in paragraph (1) is not made 
     (or effected by offset) within 30 days of the date of the 
     determination, an administrative fee of 1 percent

[[Page S2127]]

     of the outstanding balance of the excess (after application 
     of paragraph (1)), or such lower amount as an Administrative 
     Law Judge may determine upon an appeal of the initial 
     determination of the excess, shall be imposed on the 
     provider, for deposit into the Trust Fund under this part.
       ``(B) The administrative fee shall be imposed under 
     subparagraph (A) on a provider of services paid on a 
     prospective basis only if such provider's cost report with 
     respect to the payment determined to be in excess of the 
     payment due under this part indicates that the provider's 
     projected costs exceeded its actual costs by 30 percent or 
     more.''.
       (b) Administrative Fees for Providers of Services or Other 
     Persons Under Part B.--Section 1833(j) (42 U.S.C. 1395l(j)), 
     as amended by section 9(a)(4), is amended by adding at the 
     end the following new paragraph:
       ``(3) If the excess described in paragraph (1) is not made 
     (or effected by offset) within 30 days of the date of the 
     determination, an administrative fee of 1 percent of the 
     outstanding balance of the excess (after application of 
     paragraph (1)), or such lower amount as an Administrative Law 
     Judge may determine upon an appeal of the initial 
     determination of the excess, shall be imposed on the 
     provider, or other person receiving the excess, for deposit 
     into the Trust Fund under this part.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to final determinations made on or after the date 
     of enactment of this Act.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself, Mr. Kennedy, Mr. Daschle, Mrs. 
        Boxer, Mr. Dodd, Mr. Durbin, Mr. Glenn, Mr. Harkin, Mr. Kerry, 
        Mr. Lautenberg, Ms. Moseley-Braun, Mr. Rockefeller, and Mr. 
        Torricelli):
  S. 1789. A bill to amend title XVIII of the Social Security Act and 
the Employee Retirement Income Security Act of 1974 to improve access 
to health insurance and medicare benefits for individuals ages 55 to 65 
to be fully funded through premiums and anti-fraud provision, and for 
other purposes; to the Committee on finance.


                 the medicare early access act of 1998

  Mr. MOYNIHAN. Mr. President, I rise to introduce a bill to provide 
access to health insurance for individuals between the ages of 55-65. 
These individuals are too young for Medicare, not poor enough to 
qualify for Medicaid, and in many cases, are forced into early 
retirement or pushed out of their jobs in corporate downsizing.
  The ``Medicare Early Access Act'' is based on the President's three-
part initiative announced on January 6, 1998. The bill is a targeted, 
self-financing proposal to give older Americans under 65 new options to 
obtain health insurance coverage. Many of these Americans have worked 
hard all their lives, but, through no fault of their own, find 
themselves uninsured just as they are entering the years when the risk 
of serious illness is increasing. This legislation attempts to bridge 
the gap in coverage between years when persons are in the labor and the 
age--(65) when they become eligible for Medicare.
  The bill has three parts: (1) It enables persons between ages 62 and 
64 to buy into Medicare by paying a full premium; (2) it provides 
displaced workers over age 55 access to Medicare by offering a similar 
Medicare buy-in option; and (3) it extends COBRA coverage to persons 55 
and over whose employers withdraw retiree health benefits. A more 
detailed description of the proposal is attached.


                                THE COST

  The program is self-financing and is largely paid for by premiums 
from the beneficiaries themselves. The financing of the program is 
carefully walled off from the Medicare Part A and Part B Trust Funds, 
to ensure that it will not adversely impact the existing program.
  There is a modest cost to the buy-in proposal for 62-65 year-olds 
because participants would pay the premium in two parts: most of the 
cost would be paid by the individual up front; a smaller amount would 
be paid after they turn 65 years old. Medicare would in effect ``loan'' 
participants the second part of the premium until they reach 65, when 
they would make small monthly payments in addition to their regular 
Medicare Part B premium. That ``loan'' accounts for most of the 
Medicare costs of the legislation, and is fully offset by a separate 
savings from a separate bill to reduce Medicare waste, fraud and 
overpayment that I am also introducing at this time.
  The CBO analysis of this bill found no impact on the Medicare Part A 
or Part B Trust Funds. The net cost of the two bills is virtually 
zero--an average of about $60 million per year. CBO also predicted that 
about 410,000 individuals would participate (or 33 percent more than 
first estimated by the Administration). Finally, CBO estimated that the 
post-65 premium that people ages 62-65 would pay would be only $10 per 
month per year--$6 per month, or $72 less per year, than the 
Administration estimated.
  Mr. President, the problem of health insurance for the near elderly 
is getting worse. Congress should act now to provide valuable coverage 
for these individuals.
  Mr. President, I ask unanimous consent that the full text and summary 
of the bill be printed in the Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                S. 1789

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Medicare 
     Early Access Act of 1998''.
       (b) Table of Contents.--

Sec. 1. Short title; table of contents.

TITLE I--ACCESS TO MEDICARE BENEFITS FOR INDIVIDUALS 62-TO-65 YEARS OF 
                                  AGE

Sec. 101. Access to medicare benefits for individuals 62-to-65 years of 
              age.

 ``Part D--Purchase of Medicare Benefits by Certain Individuals Age 62-
                           to-65 Years of Age

``Sec. 1859. Program benefits; eligibility.
``Sec. 1859A. Enrollment process; coverage.
``Sec. 1859B. Premiums.
``Sec. 1859C. Payment of premiums.
``Sec. 1859D. Medicare Early Access Trust Fund.
``Sec. 1859E. Oversight and accountability.
``Sec. 1859F. Administration and miscellaneous.

 TITLE II--ACCESS TO MEDICARE BENEFITS FOR DISPLACED WORKERS 55-TO-62 
                              YEARS OF AGE

Sec. 201. Access to medicare benefits for displaced workers 55-to-62 
              years of age.

             TITLE III--COBRA PROTECTION FOR EARLY RETIREES

 Subtitle A--Amendments to the Employee Retirement Income Security Act 
                                of 1974

Sec. 301. COBRA continuation benefits for certain retired workers who 
              lose retiree health coverage.

        Subtitle B--Amendments to the Public Health Service Act

Sec. 311. COBRA continuation benefits for certain retired workers who 
              lose retiree health coverage.

      Subtitle C--Amendments to the Internal Revenue Code of 1986

Sec. 321. COBRA continuation benefits for certain retired workers who 
              lose retiree health coverage.

                          TITLE IV--FINANCING

Sec. 401. Reference to financing provisions.
TITLE I--ACCESS TO MEDICARE BENEFITS FOR INDIVIDUALS 62-TO-65 YEARS OF 
                                  AGE

     SEC. 101. ACCESS TO MEDICARE BENEFITS FOR INDIVIDUALS 62-TO-
                   65 YEARS OF AGE.

       (a) In General.--Title XVIII of the Social Security Act is 
     amended--
       (1) by redesignating section 1859 and part D as section 
     1858 and part E, respectively; and
       (2) by inserting after such section the following new part:

 ``Part D--Purchase of Medicare Benefits by Certain Individuals Age 62-
                           to-65 Years of Age

     ``SEC. 1859. PROGRAM BENEFITS; ELIGIBILITY.

       ``(a) Entitlement to Medicare Benefits For Enrolled 
     Individuals.--
       ``(1) In general.--An individual enrolled under this part 
     is entitled to the same benefits under this title as an 
     individual entitled to benefits under part A and enrolled 
     under part B.
       ``(2) Definitions.--For purposes of this part:
       ``(A) Federal or state cobra continuation provision.--The 
     term `Federal or State COBRA continuation provision' has the 
     meaning given the term `COBRA continuation provision' in 
     section 2791(d)(4) of the Public Health Service Act and 
     includes a comparable State program, as determined by the 
     Secretary.
       ``(B) Federal health insurance program defined.--The term 
     `Federal health insurance program' means any of the 
     following:
       ``(i) Medicare.--Part A or part B of this title (other than 
     by reason of this part).
       ``(ii) Medicaid.--A State plan under title XIX.
       ``(iii) FEHBP.--The Federal employees health benefit 
     program under chapter 89 of title 5, United States Code.
       ``(iv) TRICARE.--The TRICARE program (as defined in section 
     1072(7) of title 10, United States Code).
       ``(v) Active duty military.--Health benefits under title 
     10, United States Code, to an individual as a member of the 
     uniformed services of the United States.

[[Page S2128]]

       ``(C) Group health plan.--The term `group health plan' has 
     the meaning given such term in section 2791(a)(1) of the 
     Public Health Service Act.
       ``(b) Eligibility of Individuals Age 62-to-65 Years of 
     Age.--
       ``(1) In general.--Subject to paragraph (2), an individual 
     who meets the following requirements with respect to a month 
     is eligible to enroll under this part with respect to such 
     month:
       ``(A) Age.--As of the last day of the month, the individual 
     has attained 62 years of age, but has not attained 65 years 
     of age.
       ``(B) Medicare eligibility (but for age).--The individual 
     would be eligible for benefits under part A or part B for the 
     month if the individual were 65 years of age.
       ``(C) Not eligible for coverage under group health plans or 
     federal health insurance programs.--The individual is not 
     eligible for benefits or coverage under a Federal health 
     insurance program (as defined in subsection (a)(2)(B)) or 
     under a group health plan (other than such eligibility merely 
     through a Federal or State COBRA continuation provision) as 
     of the last day of the month involved.
       ``(2) Limitation on eligibility if terminated enrollment.--
     If an individual described in paragraph (1) enrolls under 
     this part and coverage of the individual is terminated under 
     section 1859A(d) (other than because of age), the individual 
     is not again eligible to enroll under this subsection unless 
     the following requirements are met:
       ``(A) New coverage under group health plan or federal 
     health insurance program.--After the date of termination of 
     coverage under such section, the individual obtains coverage 
     under a group health plan or under a Federal health insurance 
     program.
       ``(B) Subsequent loss of new coverage.--The individual 
     subsequently loses eligibility for the coverage described in 
     subparagraph (A) and exhausts any eligibility the individual 
     may subsequently have for coverage under a Federal or State 
     COBRA continuation provision.
       ``(3) Change in health plan eligibility does not affect 
     coverage.--In the case of an individual who is eligible for 
     and enrolls under this part under this subsection, the 
     individual's continued entitlement to benefits under this 
     part shall not be affected by the individual's subsequent 
     eligibility for benefits or coverage described in paragraph 
     (1)(C), or entitlement to such benefits or coverage.

     ``SEC. 1859A. ENROLLMENT PROCESS; COVERAGE.

       ``(a) In General.--An individual may enroll in the program 
     established under this part only in such manner and form as 
     may be prescribed by regulations, and only during an 
     enrollment period prescribed by the Secretary consistent with 
     the provisions of this section. Such regulations shall 
     provide a process under which--
       ``(1) individuals eligible to enroll as of a month are 
     permitted to pre-enroll during a prior month within an 
     enrollment period described in subsection (b); and
       ``(2) each individual seeking to enroll under section 
     1859(b) is notified, before enrolling, of the deferred 
     monthly premium amount the individual will be liable for 
     under section 1859C(b) upon attaining 65 years of age as 
     determined under section 1859B(c)(3).
       ``(b) Enrollment Periods.--
       ``(1) Individuals 62-to-65 years of age.--In the case of 
     individuals eligible to enroll under this part under section 
     1859(b)--
       ``(A) Initial enrollment period.--If the individual is 
     eligible to enroll under such section for July 1999, the 
     enrollment period shall begin on May 1, 1999, and shall end 
     on August 31, 1999. Any such enrollment before July 1, 1999, 
     is conditioned upon compliance with the conditions of 
     eligibility for July 1999.
       ``(B) Subsequent periods.--If the individual is eligible to 
     enroll under such section for a month after July 1999, the 
     enrollment period shall begin on the first day of the second 
     month before the month in which the individual first is 
     eligible to so enroll and shall end four months later. Any 
     such enrollment before the first day of the third month of 
     such enrollment period is conditioned upon compliance with 
     the conditions of eligibility for such third month.
       ``(2) Authority to correct for government errors.--The 
     provisions of section 1837(h) apply with respect to 
     enrollment under this part in the same manner as they apply 
     to enrollment under part B.
       ``(c) Date Coverage Begins.--
       ``(1) In general.--The period during which an individual is 
     entitled to benefits under this part shall begin as follows, 
     but in no case earlier than July 1, 1999:
       ``(A) In the case of an individual who enrolls (including 
     pre-enrolls) before the month in which the individual 
     satisfies eligibility for enrollment under section 1859, the 
     first day of such month of eligibility.
       ``(B) In the case of an individual who enrolls during or 
     after the month in which the individual first satisfies 
     eligibility for enrollment under such section, the first day 
     of the following month.
       ``(2) Authority to provide for partial months of 
     coverage.--Under regulations, the Secretary may, in the 
     Secretary's discretion, provide for coverage periods that 
     include portions of a month in order to avoid lapses of 
     coverage.
       ``(3) Limitation on payments.--No payments may be made 
     under this title with respect to the expenses of an 
     individual enrolled under this part unless such expenses were 
     incurred by such individual during a period which, with 
     respect to the individual, is a coverage period under this 
     section.
       ``(d) Termination of Coverage.--
       ``(1) In general.--An individual's coverage period under 
     this part shall continue until the individual's enrollment 
     has been terminated at the earliest of the following:
       ``(A) General provisions.--
       ``(i) Notice.--The individual files notice (in a form and 
     manner prescribed by the Secretary) that the individual no 
     longer wishes to participate in the insurance program under 
     this part.
       ``(ii) Nonpayment of premiums.--The individual fails to 
     make payment of premiums required for enrollment under this 
     part.
       ``(iii) Medicare eligibility.--The individual becomes 
     entitled to benefits under part A or enrolled under part B 
     (other than by reason of this part).
       ``(B) Termination based on age.--The individual attains 65 
     years of age.
       ``(2) Effective date of termination.--
       ``(A) Notice.--The termination of a coverage period under 
     paragraph (1)(A)(i) shall take effect at the close of the 
     month following for which the notice is filed.
       ``(B) Nonpayment of premium.--The termination of a coverage 
     period under paragraph (1)(A)(ii) shall take effect on a date 
     determined under regulations, which may be determined so as 
     to provide a grace period in which overdue premiums may be 
     paid and coverage continued. The grace period determined 
     under the preceding sentence shall not exceed 60 days; except 
     that it may be extended for an additional 30 days in any case 
     where the Secretary determines that there was good cause for 
     failure to pay the overdue premiums within such 60-day 
     period.
       ``(C) Age or medicare eligibility.--The termination of a 
     coverage period under paragraph (1)(A)(iii) or (1)(B) shall 
     take effect as of the first day of the month in which the 
     individual attains 65 years of age or becomes entitled to 
     benefits under part A or enrolled for benefits under part B 
     (other than by reason of this part).

     ``SEC. 1859B. PREMIUMS.

       ``(a) Amount of Monthly Premiums.--
       ``(1) Base monthly premiums.--The Secretary shall, during 
     September of each year (beginning with 1998), determine the 
     following premium rates which shall apply with respect to 
     coverage provided under this title for any month in the 
     succeeding year:
       ``(A) Base monthly premium for individuals 62 years of age 
     or older.--A base monthly premium for individuals 62 years of 
     age or older, equal to \1/12\ of the base annual premium rate 
     computed under subsection (b) for each premium area.
       ``(2) Deferred monthly premiums for individuals 62 years of 
     age or older.--The Secretary shall, during September of each 
     year (beginning with 1998), determine under subsection (c) 
     the amount of deferred monthly premiums that shall apply with 
     respect to individuals who first obtain coverage under this 
     part under section 1859(b) in the succeeding year.
       ``(3) Establishment of premium areas.--For purposes of this 
     part, the term `premium area' means such an area as the 
     Secretary shall specify to carry out this part. The Secretary 
     from time to time may change the boundaries of such premium 
     areas. The Secretary shall seek to minimize the number of 
     such areas specified under this paragraph.
       ``(b) Base Annual Premium for Individuals 62 Years of Age 
     or Older.--
       ``(1) National, per capita average.--The Secretary shall 
     estimate the average, annual per capita amount that would be 
     payable under this title with respect to individuals residing 
     in the United States who meet the requirement of section 
     1859(b)(1)(A) as if all such individuals were eligible for 
     (and enrolled) under this title during the entire year (and 
     assuming that section 1862(b)(2)(A)(i) did not apply).
       ``(2) Geographic adjustment.--The Secretary shall adjust 
     the amount determined under paragraph (1) for each premium 
     area (specified under subsection (a)(3)) in order to take 
     into account such factors as the Secretary deems appropriate 
     and shall limit the maximum premium under this paragraph in a 
     premium area to assure participation in all areas throughout 
     the United States.
       ``(3) Base annual premium.--The base annual premium under 
     this subsection for months in a year for individuals 62 years 
     of age or older residing in a premium area is equal to the 
     average, annual per capita amount estimated under paragraph 
     (1) for the year, adjusted for such area under paragraph (2).
       ``(c) Deferred Premium Rate for Individuals 62 Years of Age 
     or Older.--The deferred premium rate for individuals with a 
     group of individuals who obtain coverage under section 
     1859(b) in a year shall be computed by the Secretary as 
     follows:
       ``(1) Estimation of national, per capita annual average 
     expenditures for enrollment group.--The Secretary shall 
     estimate the average, per capita annual amount that will be 
     paid under this part for individuals in such group during the 
     period of enrollment under section 1859(b). In making such 
     estimate for coverage beginning in a year before 2003, the 
     Secretary may base such estimate on the average, per capita 
     amount that would be payable if the program had been in 
     operation over a previous period of at least 4 years.
       ``(2) Difference between estimated expenditures and 
     estimated premiums.--

[[Page S2129]]

     Based on the characteristics of individuals in such group, 
     the Secretary shall estimate during the period of coverage of 
     the group under this part under section 1859(b) the amount by 
     which--
       ``(A) the amount estimated under paragraph (1); exceeds
       ``(B) the average, annual per capita amount of premiums 
     that will be payable for months during the year under section 
     1859C(a) for individuals in such group (including premiums 
     that would be payable if there were no terminations in 
     enrollment under clause (i) or (ii) of section 
     1859A(d)(1)(A)).
       ``(3) Actuarial computation of deferred monthly premium 
     rates.--The Secretary shall determine deferred monthly 
     premium rates for individuals in such group in a manner so 
     that--
       ``(A) the estimated actuarial value of such premiums 
     payable under section 1859C(b), is equal to
       ``(B) the estimated actuarial present value of the 
     differences described in paragraph (2).

     Such rate shall be computed for each individual in the group 
     in a manner so that the rate is based on the number of months 
     between the first month of coverage based on enrollment under 
     section 1859(b) and the month in which the individual attains 
     65 years of age.
       ``(4) Determinants of actuarial present values.--The 
     actuarial present values described in paragraph (3) shall 
     reflect--
       ``(A) the estimated probabilities of survival at ages 62 
     through 84 for individuals enrolled during the year; and
       ``(B) the estimated effective average interest rates that 
     would be earned on investments held in the trust funds under 
     this title during the period in question.

     ``SEC. 1859C. PAYMENT OF PREMIUMS.

       ``(a) Payment of Base Monthly Premium.--
       ``(1) In general.--The Secretary shall provide for payment 
     and collection of the base monthly premium, determined under 
     section 1859B(a)(1) for the age (and age cohort, if 
     applicable) of the individual involved and the premium area 
     in which the individual principally resides, in the same 
     manner as for payment of monthly premiums under section 1840, 
     except that, for purposes of applying this section, any 
     reference in such section to the Federal Supplementary 
     Medical Insurance Trust Fund is deemed a reference to the 
     Trust Fund established under section 1859D.
       ``(2) Period of payment.--In the case of an individual who 
     participates in the program established by this title, the 
     base monthly premium shall be payable for the period 
     commencing with the first month of the individual's coverage 
     period and ending with the month in which the individual's 
     coverage under this title terminates.
       ``(b) Payment of Deferred Premium for Individuals Covered 
     After Attaining Age 62.--
       ``(1) Rate of payment.--
       ``(A) In general.--In the case of an individual who is 
     covered under this part for a month pursuant to an enrollment 
     under section 1859(b), subject to subparagraph (B), the 
     individual is liable for payment of a deferred premium in 
     each month during the period described in paragraph (2) in an 
     amount equal to the full deferred monthly premium rate 
     determined for the individual under section 1859B(c).
       ``(B) Special rules for those who disenroll early.--
       ``(i) In general.--If such an individual's enrollment under 
     such section is terminated under clause (i) or (ii) of 
     section 1859A(d)(1)(A), subject to clause (ii), the amount of 
     the deferred premium otherwise established under this 
     paragraph shall be pro-rated to reflect the number of months 
     of coverage under this part under such enrollment compared to 
     the maximum number of months of coverage that the individual 
     would have had if the enrollment were not so terminated.
       ``(ii) Rounding to 12-month minimum coverage periods.--In 
     applying clause (i), the number of months of coverage (if not 
     a multiple of 12) shall be rounded to the next highest 
     multiple of 12 months, except that in no case shall this 
     clause result in a number of months of coverage exceeding the 
     maximum number of months of coverage that the individual 
     would have had if the enrollment were not so terminated.
       ``(2) Period of payment.--The period described in this 
     paragraph for an individual is the period beginning with the 
     first month in which the individual has attained 65 years of 
     age and ending with the month before the month in which the 
     individual attains 85 years of age.
       ``(3) Collection.--In the case of an individual who is 
     liable for a premium under this subsection, the amount of the 
     premium shall be collected in the same manner as the premium 
     for enrollment under such part is collected under section 
     1840, except that any reference in such section to the 
     Federal Supplementary Medical Insurance Trust Fund is deemed 
     to be a reference to the Medicare Early Access Trust Fund 
     established under section 1859D.
       ``(c) Application of Certain Provisions.--The provisions of 
     section 1840 (other than subsection (h)) shall apply to 
     premiums collected under this section in the same manner as 
     they apply to premiums collected under part B, except that 
     any reference in such section to the Federal Supplementary 
     Medical Insurance Trust Fund is deemed a reference to the 
     Trust Fund established under section 1859D.

     ``SEC. 1859D. MEDICARE EARLY ACCESS TRUST FUND.

       ``(a) Establishment of Trust Fund.--
       ``(1) In general.--There is hereby created on the books of 
     the Treasury of the United States a trust fund to be known as 
     the `Medicare Early Access Trust Fund' (in this section 
     referred to as the `Trust Fund'). The Trust Fund shall 
     consist of such gifts and bequests as may be made as provided 
     in section 201(i)(1) and such amounts as may be deposited in, 
     or appropriated to, such fund as provided in this title.
       ``(2) Premiums.--Premiums collected under section 1859B 
     shall be transferred to the Trust Fund.
       ``(3) Transfer of savings from new fraud and abuse 
     initiatives.--
       ``(A) In general.--There is hereby transferred to the Trust 
     Fund from the Federal Hospital Insurance Trust Fund and from 
     the Federal Supplementary Medical Insurance Trust Fund 
     amounts equivalent to the amounts (specified under 
     subparagraph (B)) of the reductions in expenditures under 
     such respective trust fund as may be attributable to the 
     enactment of the Medicare Fraud and Overpayment Act of 1998.
       ``(B) Use of cbo estimates.--For each fiscal year during 
     the 10-fiscal-year period beginning with fiscal year 1999, 
     the amounts under subparagraph (A) shall be the amounts 
     described in such subparagraph as determined by the 
     Congressional Budget Office at the time of, and in connection 
     with, the enactment of the Medicare Early Access Act of 1998. 
     For subsequent fiscal years, the amounts under subparagraph 
     (A) shall be the amount determined under this subparagraph 
     for the previous fiscal year increased by the same percentage 
     as the percentage increase in aggregate expenditures under 
     this title from the second previous fiscal year to the 
     previous fiscal year.
       ``(b) Incorporation of Provisions.--
       ``(1) In general.--Subject to paragraph (2), subsections 
     (b) through (i) of section 1841 shall apply with respect to 
     the Trust Fund and this title in the same manner as they 
     apply with respect to the Federal Supplementary Medical 
     Insurance Trust Fund and part B, respectively.
       ``(2) Miscellaneous references.--In applying provisions of 
     section 1841 under paragraph (1)--
       ``(A) any reference in such section to `this part' is 
     construed to refer to this part D;
       ``(B) any reference in section 1841(h) to section 1840(d) 
     and in section 1841(i) to sections 1840(b)(1) and 1842(g) are 
     deemed references to comparable authority exercised under 
     this part; and
       ``(C) payments may be made under section 1841(g) to the 
     Trust Funds under sections 1817 and 1841 as reimbursement to 
     such funds for payments they made for benefits provided under 
     this part.

     ``SEC. 1859E. OVERSIGHT AND ACCOUNTABILITY.

       ``(a) Through Annual Reports of Trustees.--The Board of 
     Trustees of the Medicare Early Access Trust Fund under 
     section 1859D(b)(1) shall report on an annual basis to 
     Congress concerning the status of the Trust Fund and the need 
     for adjustments in the program under this part to maintain 
     financial solvency of the program under this part.
       ``(b) Periodic GAO Reports.--The Comptroller General of the 
     United States shall periodically submit to Congress reports 
     on the adequacy of the financing of coverage provided under 
     this part. The Comptroller General shall include in such 
     report such recommendations for adjustments in such financing 
     and coverage as the Comptroller General deems appropriate in 
     order to maintain financial solvency of the program under 
     this part.

     ``SEC. 1859F. ADMINISTRATION AND MISCELLANEOUS.

       ``(a) Treatment for Purposes of Title.--Except as otherwise 
     provided in this part--
       ``(1) individuals enrolled under this part shall be treated 
     for purposes of this title as though the individual were 
     entitled to benefits under part A and enrolled under part B; 
     and
       ``(2) benefits described in section 1859 shall be payable 
     under this title to such individuals in the same manner as if 
     such individuals were so entitled and enrolled.
       ``(b) Not Treated As Medicare Program for Purposes of 
     Medicaid Program.--For purposes of applying title XIX 
     (including the provision of medicare cost-sharing assistance 
     under such title), an individual who is enrolled under this 
     part shall not be treated as being entitled to benefits under 
     this title.
       ``(c) Not Treated As Medicare Program for Purposes of COBRA 
     Continuation Provisions.--In applying a COBRA continuation 
     provision (as defined in section 2791(d)(4) of the Public 
     Health Service Act), any reference to an entitlement to 
     benefits under this title shall not be construed to include 
     entitlement to benefits under this title pursuant to the 
     operation of this part.''.
       (b) Conforming Amendments to Social Security Act 
     Provisions.--
       (1) Section 201(i)(1) of the Social Security Act (42 U.S.C. 
     401(i)(1)) is amended by striking ``or the Federal 
     Supplementary Medical Insurance Trust Fund'' and inserting 
     ``the Federal Supplementary Medical Insurance Trust Fund, and 
     the Medicare Early Access Trust Fund''.
       (2) Section 201(g)(1)(A) of such Act (42 U.S.C. 
     401(g)(1)(A)) is amended by striking `` and the Federal 
     Supplementary Medical Insurance Trust Fund established by 
     title

[[Page S2130]]

     XVIII'' and inserting ``, the Federal Supplementary Medical 
     Insurance Trust Fund, and the Medicare Early Access Trust 
     Fund established by title XVIII''.
       (3) Section 1820(i) of such Act (42 U.S.C. 1395i-4(i)) is 
     amended by striking ``part D'' and inserting ``part E''.
       (4) Part C of title XVIII of such Act is amended--
       (A) in section 1851(a)(2)(B) (42 U.S.C. 1395w-21(a)(2)(B)), 
     by striking `` 1859(b)(3)'' and inserting ``1858(b)(3);
       (B) in section 1851(a)(2)(C) (42 U.S.C. 1395w-21(a)(2)(C)), 
     by striking ``1859(b)(2)'' and inserting ``1858(b)(2)'';
       (C) in section 1852(a)(1) (42 U.S.C. 1395w-22(a)(1)), by 
     striking `` 1859(b)(3)'' and inserting ``1858(b)(3);
       (D) in section 1852(a)(3)(B)(ii) (42 U.S.C. 1395w-
     22(a)(3)(B)(ii)), by striking ``1859(b)(2)(B)'' and inserting 
     ``1858(b)(2)(B)'';
       (E) in section 1853(a)(1)(A) (42 U.S.C. 1395w-23(a)(1)(A)), 
     by striking ``1859(e)(4)'' and inserting ``1858(e)(4)''; and
       (F) in section 1853(a)(3)(D) (42 U.S.C. 1395w-23(a)(3)(D)), 
     by striking ``1859(e)(4)'' and inserting ``1858(e)(4)''.
       (5) Section 1853(c) of such Act (42 U.S.C. 1395w-23(c)) is 
     amended--
       (A) in paragraph (1), by striking ``or (7)'' and inserting 
     ``, (7), or (8)'', and
       (B) by adding at the end the following:
       ``(8) Adjustment for early access.--In applying this 
     subsection with respect to individuals entitled to benefits 
     under part D, the Secretary shall provide for an appropriate 
     adjustment in the Medicare+Choice capitation rate as may be 
     appropriate to reflect differences between the population 
     served under such part and the population under parts A and 
     B.''.
       (c) Other Conforming Amendments.--
       (1) Section 138(b)(4) of the Internal Revenue Code of 1986 
     is amended by striking ``1859(b)(3)'' and inserting 
     ``1858(b)(3)''.
       (2)(A) Section 602(2)(D)(ii) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1162(2)) is amended by 
     inserting ``(not including an individual who is so entitled 
     pursuant to enrollment under section 1859A)'' after ``Social 
     Security Act''.
       (B) Section 2202(2)(D)(ii) of the Public Health Service Act 
     (42 U.S.C. 300bb-2(2)(D)(ii)) is amended by inserting ``(not 
     including an individual who is so entitled pursuant to 
     enrollment under section 1859A)'' after ``Social Security 
     Act''.
       (C) Section 4980B(f)(2)(B)(i)(V) of the Internal Revenue 
     Code of 1986 is amended by inserting ``(not including an 
     individual who is so entitled pursuant to enrollment under 
     section 1859A)'' after ``Social Security Act''.
 TITLE II--ACCESS TO MEDICARE BENEFITS FOR DISPLACED WORKERS 55-TO-62 
                              YEARS OF AGE

     SEC. 201. ACCESS TO MEDICARE BENEFITS FOR DISPLACED WORKERS 
                   55-TO-62 YEARS OF AGE.

       (a) Eligibility.--Section 1859 of the Social Security Act, 
     as inserted by section 101(a)(2), is amended by adding at the 
     end the following new subsection:
       ``(c) Displaced Workers and Spouses.--
       ``(1) Displaced workers.--Subject to paragraph (3), an 
     individual who meets the following requirements with respect 
     to a month is eligible to enroll under this part with respect 
     to such month:
       ``(A) Age.--As of the last day of the month, the individual 
     has attained 55 years of age, but has not attained 62 years 
     of age.
       ``(B) Medicare eligibility (but for age).--The individual 
     would be eligible for benefits under part A or part B for the 
     month if the individual were 65 years of age.
       ``(C) Loss of employment-based coverage.--
       ``(i) Eligible for unemployment compensation.--The 
     individual meets the requirements relating to period of 
     covered employment and conditions of separation from 
     employment to be eligible for unemployment compensation (as 
     defined in section 85(b) of the Internal Revenue Code of 
     1986), based on a separation from employment occurring on or 
     after January 1, 1998. The previous sentence shall not be 
     construed as requiring the individual to be receiving such 
     unemployment compensation.
       ``(ii) Loss of employment-based coverage.--Immediately 
     before the time of such separation of employment, the 
     individual was covered under a group health plan on the basis 
     of such employment, and, because of such loss, is no longer 
     eligible for coverage under such plan (including such 
     eligibility based on the application of a Federal or State 
     COBRA continuation provision) as of the last day of the month 
     involved.
       ``(iii) Previous creditable coverage for at least 1 year.--
     As of the date on which the individual loses coverage 
     described in clause (ii), the aggregate of the periods of 
     creditable coverage (as determined under section 2701(c) of 
     the Public Health Service Act) is 12 months or longer.
       ``(D) Exhaustion of available cobra continuation 
     benefits.--
       ``(i) In general.--In the case of an individual described 
     in clause (ii) for a month described in clause (iii)--

       ``(I) the individual (or spouse) elected coverage described 
     in clause (ii); and
       ``(II) the individual (or spouse) has continued such 
     coverage for all months described in clause (iii) in which 
     the individual (or spouse) is eligible for such coverage.

       ``(ii) Individuals to whom cobra continuation coverage made 
     available.--An individual described in this clause is an 
     individual--

       ``(I) who was offered coverage under a Federal or State 
     COBRA continuation provision at the time of loss of coverage 
     eligibility described in subparagraph (C)(ii); or
       ``(II) whose spouse was offered such coverage in a manner 
     that permitted coverage of the individual at such time.

       ``(iii) Months of possible cobra continuation coverage.--A 
     month described in this clause is a month for which an 
     individual described in clause (ii) could have had coverage 
     described in such clause as of the last day of the month if 
     the individual (or the spouse of the individual, as the case 
     may be) had elected such coverage on a timely basis.
       ``(E) Not eligible for coverage under federal health 
     insurance program or group health plans.--The individual is 
     not eligible for benefits or coverage under a Federal health 
     insurance program or under a group health plan (whether on 
     the basis of the individual's employment or employment of the 
     individual's spouse) as of the last day of the month 
     involved.
       ``(2) Spouse of displaced worker.--Subject to paragraph 
     (3), an individual who meets the following requirements with 
     respect to a month is eligible to enroll under this part with 
     respect to such month:
       ``(A) Age.--As of the last day of the month, the individual 
     has not attained 62 years of age.
       ``(B) Married to displaced worker.--The individual is the 
     spouse of an individual at the time the individual enrolls 
     under this part under paragraph (1) and loses coverage 
     described in paragraph (1)(C)(ii) because the individual's 
     spouse lost such coverage.
       ``(C) Medicare eligibility (but for age); exhaustion of any 
     cobra continuation coverage; and not eligible for coverage 
     under federal health insurance program or group health 
     plan.--The individual meets the requirements of subparagraphs 
     (B), (D), and (E) of paragraph (1).
       ``(3) Change in health plan eligibility affects continued 
     eligibility.--For provision that terminates enrollment under 
     this section in the case of an individual who becomes 
     eligible for coverage under a group health plan or under a 
     Federal health insurance program, see section 1859A(d)(1)(C).
       ``(4) Reenrollment permitted.--Nothing in this subsection 
     shall be construed as preventing an individual who, after 
     enrolling under this subsection, terminates such enrollment 
     from subsequently reenrolling under this subsection if the 
     individual is eligible to enroll under this subsection at 
     that time.''.
       (b) Enrollment.--Section 1859A of such Act, as so inserted, 
     is amended--
       (1) in subsection (a), by striking ``and'' at the end of 
     paragraph (1), by striking the period at the end of paragraph 
     (2) and inserting ``; and'', and by adding at the end the 
     following new paragraph:
       ``(3) individuals whose coverage under this part would 
     terminate because of subsection (d)(1)(B)(ii) are provided 
     notice and an opportunity to continue enrollment in 
     accordance with section 1859E(c)(1).'';
       (2) in subsection (b), by inserting after Notwithstanding 
     any other provision of law, (1) the following:
       ``(2) Displaced workers and spouses.--In the case of 
     individuals eligible to enroll under this part under section 
     1859(c), the following rules apply:
       ``(A) Initial enrollment period.--If the individual is 
     first eligible to enroll under such section for July 1999, 
     the enrollment period shall begin on May 1, 1999, and shall 
     end on August 31, 1999. Any such enrollment before July 1, 
     1999, is conditioned upon compliance with the conditions of 
     eligibility for July 1999.
       ``(B) Subsequent periods.--If the individual is eligible to 
     enroll under such section for a month after July 1999, the 
     enrollment period based on such eligibility shall begin on 
     the first day of the second month before the month in which 
     the individual first is eligible to so enroll (or reenroll) 
     and shall end four months later.'';
       (3) in subsection (d)(1), by amending subparagraph (B) to 
     read as follows:
       ``(B) Termination based on age.--
       ``(i) At age 65.--Subject to clause (ii), the individual 
     attains 65 years of age.
       ``(ii) At age 62 for displaced workers and spouses.--In the 
     case of an individual enrolled under this part pursuant to 
     section 1859(c), subject to subsection (a)(1), the individual 
     attains 62 years of age.'';
       (4) in subsection (d)(1), by adding at the end the 
     following new subparagraph:
       ``(C) Obtaining access to employment-based coverage or 
     federal health insurance program for individuals under 62 
     years of age.--In the case of an individual who has not 
     attained 62 years of age, the individual is covered (or 
     eligible for coverage) as a participant or beneficiary under 
     a group health plan or under a Federal health insurance 
     program.'';
       (5) in subsection (d)(2), by amending subparagraph (C) to 
     read as follows:
       ``(C) Age or medicare eligibility.--
       ``(i) In general.--The termination of a coverage period 
     under paragraph (1)(A)(iii) or (1)(B)(i) shall take effect as 
     of the first day of the month in which the individual attains 
     65 years of age or becomes entitled to benefits under part A 
     or enrolled for benefits under part B.
       ``(ii) Displaced workers.--The termination of a coverage 
     period under paragraph (1)(B)(ii) shall take effect as of the 
     first day of the month in which the individual attains

[[Page S2131]]

     62 years of age, unless the individual has enrolled under 
     this part pursuant to section 1859(b) and section 
     1859E(c)(1).''; and
       (6) in subsection (d)(2), by adding at the end the 
     following new subparagraph:
       ``(D) Access to coverage.--The termination of a coverage 
     period under paragraph (1)(C) shall take effect on the date 
     on which the individual is eligible to begin a period of 
     creditable coverage (as defined in section 2701(c) of the 
     Public Health Service Act) under a group health plan or under 
     a Federal health insurance program.''.
       (c) Premiums.--Section 1859B of such Act, as so inserted, 
     is amended--
       (1) in subsection (a)(1), by adding at the end the 
     following:
       ``(B) Base monthly premium for individuals under 62 years 
     of age.--A base monthly premium for individuals under 62 
     years of age, equal to \1/12\ of the base annual premium rate 
     computed under subsection (d)(3) for each premium area and 
     age cohort.''; and
       (2) by adding at the end the following new subsection:
       ``(d) Base Monthly Premium for Individuals Under 62 Years 
     of Age.--
       ``(1) National, per capita average for age groups.--
       ``(A) Estimate of amount.--The Secretary shall estimate the 
     average, annual per capita amount that would be payable under 
     this title with respect to individuals residing in the United 
     States who meet the requirement of section 1859(c)(1)(A) 
     within each of the age cohorts established under subparagraph 
     (B) as if all such individuals within such cohort were 
     eligible for (and enrolled) under this title during the 
     entire year (and assuming that section 1862(b)(2)(A)(i) did 
     not apply).
       ``(B) Age cohorts.--For purposes of subparagraph (A), the 
     Secretary shall establish separate age cohorts in 5 year age 
     increments for individuals who have not attained 60 years of 
     ages and a separate cohort for individuals who have attained 
     60 years of age.
       ``(2) Geographic adjustment.--The Secretary shall adjust 
     the amount determined under paragraph (1)(A) for each premium 
     area (specified under subsection (a)(3)) in the same manner 
     and to the same extent as the Secretary provides for 
     adjustments under subsection (b)(2).
       ``(3) Base annual premium.--The base annual premium under 
     this subsection for months in a year for individuals in an 
     age cohort under paragraph (1)(B) in a premium area is equal 
     to 165 percent of the average, annual per capita amount 
     estimated under paragraph (1) for the age cohort and year, 
     adjusted for such area under paragraph (2).
       ``(4) Pro-ration of premiums to reflect coverage during a 
     part of a month.--If the Secretary provides for coverage of 
     portions of a month under section 1859A(c)(2), the Secretary 
     shall pro-rate the premiums attributable to such coverage 
     under this section to reflect the portion of the month so 
     covered.''.
       (d) Administrative Provisions.--Section 1859F of such Act, 
     as so inserted, is amended by adding at the end the 
     following:
       ``(d) Additional Administrative Provisions.--
       ``(1) Process for continued enrollment of displaced workers 
     who attain 62 years of age.--The Secretary shall provide a 
     process for the continuation of enrollment of individuals 
     whose enrollment under section 1859(c) would be terminated 
     upon attaining 62 years of age. Under such process such 
     individuals shall be provided appropriate and timely notice 
     before the date of such termination and of the requirement to 
     enroll under this part pursuant to section 1859(b) in order 
     to continue entitlement to benefits under this title after 
     attaining 62 years of age.
       ``(2) Arrangements with states for determinations relating 
     to unemployment compensation eligibility.--The Secretary may 
     provide for appropriate arrangements with States for the 
     determination of whether individuals in the State meet or 
     would meet the requirements of section 1859(c)(1)(C)(i).''.``
       (e) Conforming Amendment to Heading to Part.--The heading 
     of part D of title XVIII of the Social Security Act, as so 
     inserted, is amended by striking ``62'' and inserting ``55''.
             TITLE III--COBRA PROTECTION FOR EARLY RETIREES
 Subtitle A--Amendments to the Employee Retirement Income Security Act 
                                of 1974

     SEC. 301. COBRA CONTINUATION BENEFITS FOR CERTAIN RETIRED 
                   WORKERS WHO LOSE RETIREE HEALTH COVERAGE.

       (a) Establishment of New Qualifying Event.--
       (1) In general.--Section 603 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1163) is amended by 
     inserting after paragraph (6) the following new paragraph:
       ``(7) The termination or substantial reduction in benefits 
     (as defined in section 607(7)) of group health plan coverage 
     as a result of plan changes or termination in the case of a 
     covered employee who is a qualified retiree.''.
       (2) Qualified retiree; qualified beneficiary; and 
     substantial reduction defined.--Section 607 of such Act (29 
     U.S.C. 1167) is amended--
       (A) in paragraph (3)--
       (i) in subparagraph (A), by inserting ``except as otherwise 
     provided in this paragraph,'' after ``means,''; and
       (ii) by adding at the end the following new subparagraph:
       ``(D) Special rule for qualifying retirees and 
     dependents.--In the case of a qualifying event described in 
     section 603(7), the term `qualified beneficiary' means a 
     qualified retiree and any other individual who, on the day 
     before such qualifying event, is a beneficiary under the plan 
     on the basis of the individual's relationship to such 
     qualified retiree.''; and
       (B) by adding at the end the following new paragraphs:
       ``(6) Qualified retiree.--The term `qualified retiree' 
     means, with respect to a qualifying event described in 
     section 603(7), a covered employee who, at the time of the 
     event--
       ``(A) has attained 55 years of age; and
       ``(B) was receiving group health coverage under the plan by 
     reason of the retirement of the covered employee.
       ``(7) Substantial reduction.--The term `substantial 
     reduction'--
       ``(A) means, as determined under regulations of the 
     Secretary and with respect to a qualified beneficiary, a 
     reduction in the average actuarial value of benefits under 
     the plan (through reduction or elimination of benefits, an 
     increase in premiums, deductibles, copayments, and 
     coinsurance, or any combination thereof), since the date of 
     commencement of coverage of the beneficiary by reason of the 
     retirement of the covered employee (or, if later, January 6, 
     1998), in an amount equal to at least 50 percent of the total 
     average actuarial value of the benefits under the plan as of 
     such date (taking into account an appropriate adjustment to 
     permit comparison of values over time); and
       ``(B) includes an increase in premiums required to an 
     amount that exceeds the premium level described in the fourth 
     sentence of section 602(3).
       (b) Duration of Coverage Through Age 65.--Section 602(2)(A) 
     of such Act (29 U.S.C. 1162(2)(A)) is amended--
       (1) in clause (ii), by inserting ``or 603(7)'' after 
     ``603(6)'';
       (2) in clause (iv), by striking ``or 603(6)'' and inserting 
     ``, 603(6), or 603(7)'';
       (3) by redesignating clause (iv) as clause (vi);
       (4) by redesignating clause (v) as clause (iv) and by 
     moving such clause to immediately follow clause (iii); and
       (5) by inserting after such clause (iv) the following new 
     clause:
       ``(v) Special rule for certain dependents in case of 
     termination or substantial reduction of retiree health 
     coverage.--In the case of a qualifying event described in 
     section 603(7), in the case of a qualified beneficiary 
     described in section 607(3)(D) who is not the qualified 
     retiree or spouse of such retiree, the later of--

       ``(I) the date that is 36 months after the earlier of the 
     date the qualified retiree becomes entitled to benefits under 
     title XVIII of the Social Security Act, or the date of the 
     death of the qualified retiree; or
       ``(II) the date that is 36 months after the date of the 
     qualifying event.''.

       (c) Type of Coverage in Case of Termination or Substantial 
     Reduction of Retiree Health Coverage.--Section 602(1) of such 
     Act (29 U.S.C. 1162(1)) is amended--
       (1) by striking ``The coverage'' and inserting the 
     following:
       ``(A) In general.--Except as provided in subparagraph (B), 
     the coverage''; and
       (2) by adding at the end the following:
       ``(B) Certain retirees.--In the case of a qualifying event 
     described in section 603(7), in applying the first sentence 
     of subparagraph (A) and the fourth sentence of paragraph (3), 
     the coverage offered that is the most prevalent coverage 
     option (as determined under regulations of the Secretary) 
     continued under the group health plan (or, if none, under the 
     most prevalent other plan offered by the same plan sponsor) 
     shall be treated as the coverage described in such sentence, 
     or (at the option of the plan and qualified beneficiary) such 
     other coverage option as may be offered and elected by the 
     qualified beneficiary involved.''.
       (d) Increased Level of Premiums Permitted.--Section 602(3) 
     of such Act (29 U.S.C. 1162(3)) is amended by adding at the 
     end the following new sentence: ``In the case of an 
     individual provided continuation coverage by reason of a 
     qualifying event described in section 603(7), any reference 
     in subparagraph (A) of this paragraph to `102 percent of the 
     applicable premium' is deemed a reference to `125 percent of 
     the applicable premium for employed individuals (and their 
     dependents, if applicable) for the coverage option referred 
     to in paragraph (1)(B)'.''.
       (e) Notice.--Section 606(a) of such Act (29 U.S.C. 1166) is 
     amended--
       (1) in paragraph (4)(A), by striking ``or (6)'' and 
     inserting ``(6), or (7)''; and
       (2) by adding at the end the following:

     ``The notice under paragraph (4) in the case of a qualifying 
     event described in section 603(7) shall be provided at least 
     90 days before the date of the qualifying event.''.
       (f) Effective Dates.--
       (1) In general.--The amendments made by this section (other 
     than subsection (e)(2)) shall apply to qualifying events 
     occurring on or after January 6, 1998. In the case of a 
     qualifying event occurring on or after such date and before 
     the date of the enactment of this Act, such event shall be 
     deemed (for purposes of such amendments) to have occurred on 
     the date of the enactment of this Act.
       (2) Advance notice of terminations and reductions.--The 
     amendment made by subsection (e)(2) shall apply to qualifying 
     events occurring after the date of the enactment of this Act, 
     except that in no case shall notice

[[Page S2132]]

     be required under such amendment before such date.
        Subtitle B--Amendments to the Public Health Service Act

     SEC. 311. COBRA CONTINUATION BENEFITS FOR CERTAIN RETIRED 
                   WORKERS WHO LOSE RETIREE HEALTH COVERAGE.

       (a) Establishment of New Qualifying Event.--
       (1) In general.--Section 2203 of the Public Health Service 
     Act (42 U.S.C. 300bb-3) is amended by inserting after 
     paragraph (5) the following new paragraph:
       ``(6) The termination or substantial reduction in benefits 
     (as defined in section 2208(6)) of group health plan coverage 
     as a result of plan changes or termination in the case of a 
     covered employee who is a qualified retiree.''.
       (2) Qualified retiree; qualified beneficiary; and 
     substantial reduction defined.--Section 2208 of such Act (42 
     U.S.C. 300bb-8) is amended--
       (A) in paragraph (3)--
       (i) in subparagraph (A), by inserting ``except as otherwise 
     provided in this paragraph,'' after ``means,''; and
       (ii) by adding at the end the following new subparagraph:
       ``(C) Special rule for qualifying retirees and 
     dependents.--In the case of a qualifying event described in 
     section 2203(6), the term `qualified beneficiary' means a 
     qualified retiree and any other individual who, on the day 
     before such qualifying event, is a beneficiary under the plan 
     on the basis of the individual's relationship to such 
     qualified retiree.''; and
       (B) by adding at the end the following new paragraphs:
       ``(5) Qualified retiree.--The term `qualified retiree' 
     means, with respect to a qualifying event described in 
     section 2203(6), a covered employee who, at the time of the 
     event--
       ``(A) has attained 55 years of age; and
       ``(B) was receiving group health coverage under the plan by 
     reason of the retirement of the covered employee.
       ``(6) Substantial reduction.--The term `substantial 
     reduction'--
       ``(A) means, as determined under regulations of the 
     Secretary of Labor and with respect to a qualified 
     beneficiary, a reduction in the average actuarial value of 
     benefits under the plan (through reduction or elimination of 
     benefits, an increase in premiums, deductibles, copayments, 
     and coinsurance, or any combination thereof), since the date 
     of commencement of coverage of the beneficiary by reason of 
     the retirement of the covered employee (or, if later, January 
     6, 1998), in an amount equal to at least 50 percent of the 
     total average actuarial value of the benefits under the plan 
     as of such date (taking into account an appropriate 
     adjustment to permit comparison of values over time); and
       ``(B) includes an increase in premiums required to an 
     amount that exceeds the premium level described in the fourth 
     sentence of section 2202(3).
       (b) Duration of Coverage Through Age 65.--Section 
     2202(2)(A) of such Act (42 U.S.C. 300bb-2(2)(A)) is amended--
       (1) by redesignating clause (iii) as clause (iv); and
       (2) by inserting after clause (ii) the following new 
     clause:
       ``(iii) Special rule for certain dependents in case of 
     termination or substantial reduction of retiree health 
     coverage.--In the case of a qualifying event described in 
     section 2203(6), in the case of a qualified beneficiary 
     described in section 2208(3)(C) who is not the qualified 
     retiree or spouse of such retiree, the later of--

       ``(I) the date that is 36 months after the earlier of the 
     date the qualified retiree becomes entitled to benefits under 
     title XVIII of the Social Security Act, or the date of the 
     death of the qualified retiree; or
       ``(II) the date that is 36 months after the date of the 
     qualifying event.''.

       (c) Type of Coverage in Case of Termination or Substantial 
     Reduction of Retiree Health Coverage.--Section 2202(1) of 
     such Act (42 U.S.C. 300bb-2(1)) is amended--
       (1) by striking ``The coverage'' and inserting the 
     following:
       ``(A) In general.--Except as provided in subparagraph (B), 
     the coverage''; and
       (2) by adding at the end the following:
       ``(B) Certain retirees.--In the case of a qualifying event 
     described in section 2203(6), in applying the first sentence 
     of subparagraph (A) and the fourth sentence of paragraph (3), 
     the coverage offered that is the most prevalent coverage 
     option (as determined under regulations of the Secretary of 
     Labor) continued under the group health plan (or, if none, 
     under the most prevalent other plan offered by the same plan 
     sponsor) shall be treated as the coverage described in such 
     sentence, or (at the option of the plan and qualified 
     beneficiary) such other coverage option as may be offered and 
     elected by the qualified beneficiary involved.''.
       (d) Increased Level of Premiums Permitted.--Section 2202(3) 
     of such Act (42 U.S.C. 300bb-2(3)) is amended by adding at 
     the end the following new sentence: ``In the case of an 
     individual provided continuation coverage by reason of a 
     qualifying event described in section 2203(6), any reference 
     in subparagraph (A) of this paragraph to `102 percent of the 
     applicable premium' is deemed a reference to `125 percent of 
     the applicable premium for employed individuals (and their 
     dependents, if applicable) for the coverage option referred 
     to in paragraph (1)(B)'.''.
       (e) Notice.--Section 2206(a) of such Act (42 U.S.C. 300bb-
     6(a)) is amended--
       (1) in paragraph (4)(A), by striking ``or (4)'' and 
     inserting ``(4), or (6)''; and
       (2) by adding at the end the following:

     ``The notice under paragraph (4) in the case of a qualifying 
     event described in section 2203(6) shall be provided at least 
     90 days before the date of the qualifying event.''.
       (f) Effective Dates.--
       (1) In general.--The amendments made by this section (other 
     than subsection (e)(2)) shall apply to qualifying events 
     occurring on or after January 6, 1998. In the case of a 
     qualifying event occurring on or after such date and before 
     the date of the enactment of this Act, such event shall be 
     deemed (for purposes of such amendments) to have occurred on 
     the date of the enactment of this Act.
       (2) Advance notice of terminations and reductions.--The 
     amendment made by subsection (e)(2) shall apply to qualifying 
     events occurring after the date of the enactment of this Act, 
     except that in no case shall notice be required under such 
     amendment before such date.
      Subtitle C--Amendments to the Internal Revenue Code of 1986

     SEC. 321. COBRA CONTINUATION BENEFITS FOR CERTAIN RETIRED 
                   WORKERS WHO LOSE RETIREE HEALTH COVERAGE.

       (a) Establishment of New Qualifying Event.--
       (1) In general.--Section 4980B(f)(3) of the Internal 
     Revenue Code of 1986 is amended by inserting after 
     subparagraph (F) the following new subparagraph:
       ``(G) The termination or substantial reduction in benefits 
     (as defined in subsection (g)(6)) of group health plan 
     coverage as a result of plan changes or termination in the 
     case of a covered employee who is a qualified retiree.''.
       (2) Qualified retiree; qualified beneficiary; and 
     substantial reduction defined.--Section 4980B(g) of such Code 
     is amended--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by inserting ``except as otherwise 
     provided in this paragraph,'' after ``means,''; and
       (ii) by adding at the end the following new subparagraph:
       ``(E) Special rule for qualifying retirees and 
     dependents.--In the case of a qualifying event described in 
     subsection (f)(3)(G), the term `qualified beneficiary' means 
     a qualified retiree and any other individual who, on the day 
     before such qualifying event, is a beneficiary under the plan 
     on the basis of the individual's relationship to such 
     qualified retiree.''; and
       (B) by adding at the end the following new paragraphs:
       ``(5) Qualified retiree.--The term `qualified retiree' 
     means, with respect to a qualifying event described in 
     subsection (f)(3)(G), a covered employee who, at the time of 
     the event--
       ``(A) has attained 55 years of age; and
       ``(B) was receiving group health coverage under the plan by 
     reason of the retirement of the covered employee.
       ``(6) Substantial reduction.--The term `substantial 
     reduction'--
       ``(A) means, as determined under regulations of the 
     Secretary of Labor and with respect to a qualified 
     beneficiary, a reduction in the average actuarial value of 
     benefits under the plan (through reduction or elimination of 
     benefits, an increase in premiums, deductibles, copayments, 
     and coinsurance, or any combination thereof), since the date 
     of commencement of coverage of the beneficiary by reason of 
     the retirement of the covered employee (or, if later, January 
     6, 1998), in an amount equal to at least 50 percent of the 
     total average actuarial value of the benefits under the plan 
     as of such date (taking into account an appropriate 
     adjustment to permit comparison of values over time); and
       ``(B) includes an increase in premiums required to an 
     amount that exceeds the premium level described in the fourth 
     sentence of subsection (f)(2)(C).
       (b) Duration of Coverage Through Age 65.--Section 
     4980B(f)(2)(B)(i) of such Code is amended--
       (1) in subclause (II), by inserting ``or (3)(G)'' after 
     ``(3)(F)'';
       (2) in subclause (IV), by striking ``or (3)(F)'' and 
     inserting ``, (3)(F), or (3)(G)'';
       (3) by redesignating subclause (IV) as subclause (VI);
       (4) by redesignating subclause (V) as subclause (IV) and by 
     moving such clause to immediately follow subclause (III); and
       (5) by inserting after such subclause (IV) the following 
     new subclause:

       ``(V) Special rule for certain dependents in case of 
     termination or substantial reduction of retiree health 
     coverage.--In the case of a qualifying event described in 
     paragraph (3)(G), in the case of a qualified beneficiary 
     described in subsection (g)(1)(E) who is not the qualified 
     retiree or spouse of such retiree, the later of--

       ``(a) the date that is 36 months after the earlier of the 
     date the qualified retiree becomes entitled to benefits under 
     title XVIII of the Social Security Act, or the date of the 
     death of the qualified retiree; or
       ``(b) the date that is 36 months after the date of the 
     qualifying event.''.
       (c) Type of Coverage in Case of Termination or Substantial 
     Reduction of Retiree Health Coverage.--Section 4980B(f)(2)(A) 
     of such Code is amended--
       (1) by striking ``The coverage'' and inserting the 
     following:

[[Page S2133]]

       ``(i) In general.--Except as provided in clause (ii), the 
     coverage''; and
       (2) by adding at the end the following:
       ``(ii) Certain retirees.--In the case of a qualifying event 
     described in paragraph (3)(G), in applying the first sentence 
     of clause (i) and the fourth sentence of subparagraph (C), 
     the coverage offered that is the most prevalent coverage 
     option (as determined under regulations of the Secretary of 
     Labor) continued under the group health plan (or, if none, 
     under the most prevalent other plan offered by the same plan 
     sponsor) shall be treated as the coverage described in such 
     sentence, or (at the option of the plan and qualified 
     beneficiary) such other coverage option as may be offered and 
     elected by the qualified beneficiary involved.''.
       (d) Increased Level of Premiums Permitted.--Section 
     4980B(f)(2)(C) of such Code is amended by adding at the end 
     the following new sentence: ``In the case of an individual 
     provided continuation coverage by reason of a qualifying 
     event described in paragraph (3)(G), any reference in clause 
     (i) of this subparagraph to `102 percent of the applicable 
     premium' is deemed a reference to `125 percent of the 
     applicable premium for employed individuals (and their 
     dependents, if applicable) for the coverage option referred 
     to in subparagraph (A)(ii)'.''.
       (e) Notice.--Section 4980B(f)(6) of such Code is amended--
       (1) in subparagraph (D)(i), by striking ``or (F)'' and 
     inserting ``(F), or (G)''; and
       (2) by adding at the end the following:

     ``The notice under subparagraph (D)(i) in the case of a 
     qualifying event described in paragraph (3)(G) shall be 
     provided at least 90 days before the date of the qualifying 
     event.''.
       (f) Effective Dates.--
       (1) In general.--The amendments made by this section (other 
     than subsection (e)(2)) shall apply to qualifying events 
     occurring on or after January 6, 1998. In the case of a 
     qualifying event occurring on or after such date and before 
     the date of the enactment of this Act, such event shall be 
     deemed (for purposes of such amendments) to have occurred on 
     the date of the enactment of this Act.
       (2) Advance notice of terminations and reductions.--The 
     amendment made by subsection (e)(2) shall apply to qualifying 
     events occurring after the date of the enactment of this Act, 
     except that in no case shall notice be required under such 
     amendment before such date.
                          TITLE IV--FINANCING

     SEC. 401. REFERENCE TO FINANCING PROVISIONS.

       Any increase in payments under the medicare program under 
     title XVIII of the Social Security Act that results from the 
     enactment of this Act shall be offset by reductions in 
     payments under such program pursuant to the anti-fraud and 
     anti-abuse provisions enacted as part of the Medicare Fraud 
     and Overpayment Act of 1998.
                                                                    ____


                   MEDICARE EARLY ACCESS ACT OF 1998


  A BILL DESIGNED TO PROVIDE AMERICANS 55 TO 65 NEW HEALTH INSURANCE 
                                OPTIONS

                               Background

       Americans ages 55 to 65 face special problems of access to 
     and affordability of health insurance. They face greater 
     risks of health problems and are twice as likely to have 
     heart disease, strokes, or cancer as people aged 45 to 54. As 
     people approach 65, many retire or shift to part-time work or 
     self-employment as a bridge to retirement, sometimes 
     involuntarily. Displaced workers aged 55 to 65 are much less 
     likely than younger workers to be re-employed or re-insured 
     through a new employer. As a result, more of them rely on the 
     individual health insurance market. Without the benefits of 
     having their costs averaged with younger people, as with 
     employer-based insurance, these people often face high 
     premiums.
  Such access problems will increase, due to two trends: declines in 
retiree health coverage and the aging of the baby boom generation. 
Recently, businesses have cut back on offering health coverage to pre-
65-year-old retirees; only 40 percent of large firms now do so. In 
several small but notable cases, businesses have dropped retirees' 
health benefits after workers have retired. These ``broken promise'' 
retirees lack access to employer continuation coverage and could have 
problems finding affordable individual insurance. Finally, the number 
of people 55 to 65 years old will rise from 22 million to 35 million by 
2010 -- or by 60 percent.

                                Summary

       This bill creates three important health insurance choices 
     for certain people ages 55 to 65:
       1. People ages 62 to 65 without access to group insurance 
     could buy into Medicare;
       2. Workers ages 55 and older and their spouses who lose 
     their health insurance when their firm closes or they are 
     laid off could buy into Medicare; and
       3. Retirees ages 55 and older whose employers drop their 
     retiree health coverage after they have retired could buy 
     into the employer's health plan through ``COBRA'' coverage.
       Participants would pay premiums to cover almost the entire 
     costs of coverage. Any shortfall would be paid for by 
     policies to reduce Medicare fraud and overpayments, proposed 
     in a companion bill called the Medicare Anti-Fraud and 
     Overpayment Act of 1998.
       The Medicare buy-in would be completely walled off from the 
     Medicare Trust Funds, to ensure that it does not in any way 
     affect current beneficiaries.

Title I. Access to Medicare Benefits for Individuals 62-to-65 Years of 
                                  Age

       The centerpiece of this initiative is the Medicare buy-in 
     for people ages 62 to 65.
       Eligibility: People ages 62 to 65 who do not have access to 
     employer sponsored or federal health insurance may 
     participate.
       Premium Payments: Participants would pay two separate 
     premiums--one before age 65 and one between age 65 and 85:
       Base premium: The base premium would be paid monthly 
     between enrollment and when the participant turns age 65. It 
     is the part of the full premium that represents what Medicare 
     would pay on average for all people in this age group. CBO 
     estimates that this would be about $300 per month. It would 
     be adjusted for geographic variation, but the maximum premium 
     would be limited to ensure participation in all areas of the 
     country.
       Deferred premium: The deferred premium would be paid 
     monthly beginning at age 65 until the beneficiary turns age 
     85. It is the part of the premium that covers the extra costs 
     for participants who are sicker than average. Participants 
     will be told before they enroll what their deferred premium 
     will be. CBO estimates that this would be about $10 per month 
     per year of participation.
       This two-part payment plan acts like a mortgage: it makes 
     the up-front premium affordable but requires participants to 
     pay back the Medicare ``loan'' with interest. It also ensures 
     that in the long-run, this buy-in is self-financing.
       Enrollment: Eligible people can enroll within two months of 
     either turning 62 or losing access to employer-based or 
     federal insurance.
       Applicability of Medicare Rules: Services covered and cost 
     sharing would be, for paying participants, the same as those 
     of Medicare beneficiaries. Participants would have the choice 
     of fee-for-service or managed care. No Medicaid assistance 
     would be offered to participants for premiums or cost 
     sharing. Medigap policy protections would apply, but the open 
     enrollment provision remains at age 65.
       Disenrollment: People could stop buying into Medicare at 
     any time. People who disenroll would pay the deferred premium 
     as though they had been enrolled for a full year (e.g., a 
     person who buys in for 3 months in 1999 would pay the 
     deferred premium as though they participated for 12 months). 
     This is intended to act as a disincentive for temporary 
     enrollment.

 Title II. Access to Medicare Benefits for Displaced Workers 55-to-62 
                              Years of Age

       In addition to people ages 62 to 65, a targeted group of 55 
     to 61 year olds could buy into Medicare. The Medicare buy-in 
     would be the same as above, with the following exceptions.
       Eligibility: People would be eligible if they are between 
     ages 55 and 61 and: (1) lost their job because their firm 
     closed, downsized, or moved, or their position was eliminated 
     (defined as being eligible for unemployment insurance) after 
     January 6, 1998; (2) had health insurance through their 
     previous job for at least one year (certified through the 
     process created under HIPAA to guarantee continuation 
     coverage); and (3) do not have access to employer sponsored, 
     COBRA, or federal health insurance. Spouses of these eligible 
     people may also buy into Medicare.
       Premium Payments: Participants would pay one, 
     geographically adjusted premium, with no Medicare ``loan''. 
     This premium represents what Medicare would pay on average 
     for all people in this age group plus an add-on (65 percent 
     of the age average) to compensate for some of the extra costs 
     of participants who may be sicker than average. These 
     premiums would be about $400 per month.
       Disenrollment: Like people ages 62 to 65, eligible 
     displaced workers and their spouses must enroll in the buy-in 
     within 63 days of becoming eligible. Participants continue to 
     pay premiums until they voluntarily disenroll, gain access to 
     federal or employer-based insurance or turn 62 and become 
     eligible for the more general Medicare buy-in. Once they 
     disenroll, they may only re-enroll if they meet all the 
     eligibility rules again.

           Title III. Retiree Health Benefits Protection Act

       The bill would also help retirees and their dependents 
     whose former employer unexpectedly drops their retiree health 
     insurance, leaving them uncovered and with few places to 
     turn.
       Eligibility: People ages 55 to 65 and their dependents who 
     were receiving retiree health coverage but whose coverage was 
     terminated or substantially reduced (benefits' value reduced 
     by half or premiums increased to a level above 125 percent of 
     the applicable premium) would qualify them for ``COBRA'' 
     continuation coverage.
       Premium Payments: Participants would pay 125 percent of the 
     applicable premium. This premium is higher than what most 
     other COBRA participants pay (102 percent) to help offset the 
     additional costs of participants.
       Enrollment: Participants would enroll through their former 
     employer, following the same rules as other COBRA eligibles.
       Disenrollment: Retirees would be eligible until they turn 
     65 years-old.

    Companion Bill: Medicare Anti-Fraud and Overpayment Act of 1998

       This bill improves the financial integrity of Medicare and 
     helps fund the Medicare

[[Page S2134]]

     buy-in. It does this through a series of policies, including:
       Eliminating Excessive Medicare Reimbursement for Drugs. A 
     recent report by the HHS Inspector General found that 
     Medicare currently pays hundreds of millions of dollars more 
     for 22 of the most common and costly drugs than would be paid 
     if market prices were used. For more than one-third of these 
     drugs, Medicare pays more than double the actual acquisition 
     costs, and in one case, pays as high as ten times the amount. 
     This proposal would ensure that Medicare payments are 
     provider's actual acquisition cost of the drug without mark-
     ups.
       Eliminating Overpayments for Epogen. A 1997 HHS Inspector 
     General report found that Medicare overpays for Epogen (a 
     drug used for kidney dialysis patients). This policy would 
     change Medicare reimbursement to reflect current market 
     prices (from $10 per 1,000 units administered to $9).
       Eliminating Abuse of Medicare's Outpatient Mental Health 
     Benefits. The HHS Inspector General has found abuses in 
     Medicare's outpatient mental health benefit--specifically, 
     that Medicare is sometimes billed for services in inpatient 
     or residential settings. This proposal would eliminate this 
     abuse by requiring that these services are only provided in 
     the appropriate treatment setting.
       Ensuring Medicare Does Not Pay For Claims Owed By Private 
     Insurers. Too often, Medicare pays claims that are owed by 
     private insurers because Medicare has no way of knowing the 
     private insurer is the primary payer. This proposal would 
     require insurers to report any Medicare beneficiaries they 
     cover. Also, Medicare would be allowed to recoup double the 
     amount owed by insurers who purposely let Medicare pay claims 
     that they should have paid, and impose fines for failure to 
     report no-fault or liability settlements for which Medicare 
     should have been reimbursed.
       Enabling Medicare to Negotiate Single, Simplified Payments 
     for Certain Routine Surgical Procedures. This proposal would 
     expand HCFA's current ``Centers of Excellence'' demonstration 
     that enables Medicare to pay for hospital and physician 
     services for certain high-cost surgical procedures through a 
     single negotiated payment. This lets Medicare receive volume 
     discounts and, in return, enables hospitals to increase their 
     market share, gain clinical expertise, and improve quality.
       Deleting Civil Monetary Penalty Provision that Weakens 
     Ability to Reduce Fraud and Abuse. HIPAA limited the standard 
     used in imposing civil monetary penalties regarding false 
     Medicare claims. It limited the duty on providers to exercise 
     reasonable diligence to submit true and accurate claims. This 
     provision would repeal this weakening of the standard.
       Deleting the Exceptions from Anti-Kickback Statute for 
     Certain Managed Care Arrangements. Current law makes an 
     exception from the anti-kickback rules for any arrangement 
     where a medical provider is at ``substantial financial risk'' 
     whether through a ``withhold, capitation, incentive pool, per 
     diem payment, or any other risk arrangement.'' Because of the 
     difficulty of defining this exception, this provision may be 
     serving as a loophole to get around the anti-kickback 
     provisions. This provision would eliminate the exception.
       Parenteral Nutrition Reform. According to the Office of the 
     Inspector General, there is an overpayment for these 
     services. This proposal would pay for these products at 
     actual acquisition cost and add a requirement that the 
     Secretary provides for administrative costs and sets 
     standards for the quality of delivery of parenteral 
     nutrition.

  Mr. KENNEDY. Mr. President, too many Americans nearing age 65 face a 
crisis in health care. They are too young for Medicare, but too old for 
affordable private coverage. Many of them face serious health problems 
that threaten to destroy the savings of a lifetime and prevent them 
from finding or keeping a job. Many are victims of corporate down-
sizing or a company's decision to cancel the health insurance 
protection they relied on. No American nearing retirement can be 
confident that the health insurance they have today will protect them 
until they are 65 and are eligible for Medicare.
  Three million Americans aged 55 to 64 have no health insurance today. 
The consequences are often tragic. As a group, they are in relatively 
poor health, and their condition is more likely to worsen the longer 
they remain uninsured. They have little or no savings to protect 
against the cost of serious illness. Often, they are unable to afford 
the routine care that can prevent minor health problems from turning 
into serious disabilities or even life-threatening illness.
  The number of uninsured is growing every day. Between 1991 and 1995, 
the number of workers whose employers promise them benefits if they 
retire early dropped twelve percent. Barely a third of all workers now 
have such a promise. In recent years, many who have counted on an 
employer's commitment found themselves with only a broken promise. 
Their coverage was canceled after they retired.
  The plight of older workers who lose their jobs through layoffs or 
downsizing is also grim. It is hard to find a new job at age 55 or 60--
and even harder to find a job that provides health insurance. For these 
older Americans left out and left behind through no fault of their own 
after decades of hard work, it is time to provide a helping hand.
  And finally, significant numbers of retired workers and their 
families have found themselves left high and dry when their employers 
cut back their coverage or canceled it altogether.
  The legislation we are introducing today is a lifeline for millions 
of these Americans. It provides a bridge to help them through the years 
before they qualify for full Medicare eligibility. It is a constructive 
next step toward the day when every American will be guaranteed the 
fundamental right to health care. It will impose no additional burden 
on Medicare, because it is fully paid for by premiums from the 
beneficiaries themselves.
  I commend Senator Moynihan and Senator Daschle and our other co-
sponsors for their leadership on this issue. I especially commend the 
President for his initiation of this national debate by including this 
proposal in his budget. When this legislation becomes law, millions of 
older families will have him to thank.
  The opponents of this constructive step are already waging a campaign 
of disinformation against the program. They claim that it will somehow 
harm Medicare--even though that is not true. They say we should wait 
for the Medicare Advisory Commission to report--but older uninsured 
Americans have waited too long for the help they need. They say that 
this is just another entitlement program--ignoring the fact that it 
will be paid for in full--and primarily by the participants themselves. 
They say it is another attempt to inject government into the health 
care system--even though it simply gives uninsured older Americans 
better access to the health care they need through the most successful 
health program ever enacted.
  The opponents of this proposal will do everything they can to keep 
the program from coming to the floor of the House and Senate for a full 
and fair debate. They have a lot of power in Congress. But they don't 
have the President on their side. They don't have the vast majority of 
Democrats in Congress on their side. And most of all, they do not have 
the American people on their side.
  We intend to do all we can to bring this issue to the floor of the 
Senate early this year. There will be a vote, and, if necessary, there 
will be many votes. Despite the opposition of the Republican 
Leadership, this Congress has already taken a major step to expand 
health insurance coverage for American children. This can also be the 
Congress that extends help to older Americans who need health care. The 
American people want us to act, and I am confident that Congress will 
respond.
  Mr. DASCHLE. Mr. President, today I join my colleagues in introducing 
the Medicare Early Access Act. The bill offers new coverage options for 
a population that faces significant problems finding affordable 
insurance, individuals between age 55 and 65, the age at which they 
become eligible for Medicare.
  It is not easy to be without health insurance between the ages of 55 
and 65. You are twice as likely as someone just 10 years younger to 
experience heart disease, cancer, or other significant health problems.
  And it is not easy to find health insurance when you're between 55 
and 65. Prices for coverage often are unaffordable. For those with 
serious health problems, finding coverage can be impossible.
  There are 2.9 million individuals ages 55 to 65 without health 
insurance. Some individuals in this age group lose their employer-based 
health insurance when their spouse becomes eligible for Medicare. Many 
lose their coverage because their company downsizes or their plant 
closes. Still, others lose insurance when promised retiree health 
coverage is dropped unexpectedly.
  A little over 3 years ago, 1,200 former employees of the John Morrell 
meatpacking plant in Sioux Falls, South Dakota, received letters in the 
mail telling them their retiree health

[[Page S2135]]

benefits would be canceled in a matter of weeks. These were men and 
women who had worked for 20, 30, even 40 years at the Morrell plant.
  The company did not give them retiree health benefits out of the 
goodness of their hearts. The Morrell workers earned those benefits. 
They took smaller pay increases and made other sacrifices while they 
were still working so they could have some measure of security when 
they retired.
  The letters telling the Morrell retirees that their former company 
was canceling their health benefits was just the first of many shocks. 
An additional shock came when those Morrell employees under 65 were 
forced to buy exorbitant private health insurance--an extremely 
difficult purchase on a retiree's pension.
  To address these concerns, I introduced legislation, S. 1307, the 
Retiree Health Benefits Protection act of 1997. S. 1307 would require 
companies to keep the promises they make to their retirees and their 
families.
  I am pleased that the President, Senator Moynihan, and Representative 
Stark have incorporated a key piece of that bill in the Medicare Early 
Access Act. This provision would allow retirees between ages 55 and 65 
to buy into their former employer's health plan if the employer cancels 
or substantially reduces promised benefits. Retirees and their spouses 
would remain eligible until they turn 65 and become eligible for 
Medicare.
  The Medicare Early Access Act includes two additional important 
provisions for individuals ages 55 to 65. First, it would allow people 
between the ages of 62 and 65 who do not have access to group coverage 
to buy into the Medicare program. Second, it would offer access to 
Medicare for workers between the ages of 55 and 65, and their spouses, 
when their employer downsizes or their plant shuts down.
  Some have questioned whether this program will hurt the current 
Medicare program. Let me emphasize that the proposal will pay for 
itself. All workers and retirees who buy into Medicare under our plan 
would pay premiums out of their own pockets. Any additional costs would 
be paid through savings from Medicare anti-fraud and abuse measures. 
Because the bill is self-financing, it does not in any way threaten 
Medicare's solvency or its future. It is responsible proposal that pays 
for itself.
  Mr. President, there are hundreds of thousands of Americans who could 
benefit from this bill. It is my hope that we can engage in productive 
debate over the next few weeks and find a way to fill these gaps in 
health insurance coverage, instead of making excuses about why we are 
waiting to help these individuals.

                          ____________________