[Congressional Record Volume 150, Number 36 (Monday, March 22, 2004)]
[Senate]
[Pages S2862-S2865]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DOMENICI:
  S. 2218. A bill to direct the Secretary of the Interior to establish 
a rural water supply program in the Reclamation States for the purpose 
of providing a clean, safe, affordable, and reliable water supply to 
rural residents and for other purposes, to authorize the Secretary to 
conduct appraisal and feasibility studies for rural water projects, and 
to establish the guidelines for any projects authorized under this 
program; to the Committee on Energy and Natural Resources.
  By Mr. DOMENICI. Mr. President, I am introduing the Reclamation Rural 
Water Supply Act of 2004 as a courtesy to the administration.
                                 ______
                                 
      By Mrs. HUTCHISON:
  S. 2220. A bill to amend the Internal Revenue Code of 1986 to 
encourage a strong community-based banking system; to the Committee on 
Finance.
  Mrs. HUTCHISON. Mr. President, today I am pleased to introduce the 
Community Savings and Investment Act of 2004. This will create jobs, 
expand economic activity, and help to revitalize distressed urban and 
rural communities. It will accomplish this by providing tax relief for 
community-focused banks and helping to generate financial opportunities 
in low-income areas.
  As we address the challenges many of our communities face and search 
for ways to help those looking to improve their standard of living, we 
must properly leverage the tax laws to encourage economic development. 
Most people and communities do not want handouts. They want the chance 
to find solutions and make it on their own. However, to do this they 
need financial resources.
  The lifeblood of any economic development is capital. Too often it is 
difficult for people, especially those in distressed areas, to access 
financial resources and other banking services. Providing community 
banking will lead to much-needed investments in communities, allowing 
people to purchase homes, start new businesses, and revitalize their 
neighborhoods.
  The Community Savings and Investment Act will improve access to 
banking services by lowering taxes for community banks. It also 
provides incentives for banks to serve distressed communities by 
excluding any resulting income from taxation. By lowering the costs for 
banks to operate in communities, we can unleash powerful new forces for 
economic development.
  This initiative will make a significant difference in the lives of 
thousands of families and communities across this Nation. As we seek 
ways to further strengthen our economy, I urge the Senate to pass this 
common-sense approach.
  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. 2220

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Community Savings and 
     Investment Act of 2004''.

     SEC. 2. INCOME TAX ON QUALIFIED COMMUNITY LENDERS.

       (a) In General.--Section 11 of the Internal Revenue Code of 
     1986 (relating to tax imposed on corporations) is amended by 
     redesignating subsection (d) as subsection (e) and by 
     inserting after subsection (c) the following:
       ``(d) Qualified Community Lenders.--
       ``(1) In general.--In the case of a qualified community 
     lender, in lieu of the amount of tax under subsection (b), 
     the amount of tax imposed by subsection (a) for a taxable 
     year shall be the sum of--
       ``(A) 15 percent of so much of the taxable income as 
     exceeds $250,000 but does not exceed $1,000,000, and
       ``(B) the highest rate of tax imposed by subsection (b) 
     multiplied by so much of the taxable income as exceeds 
     $1,000,000.
       ``(2) Qualified community lender.--For purposes of 
     paragraph (1), the term `qualified community lender' means a 
     bank--
       ``(A) which achieved a rating of `satisfactory record of 
     meeting community credit needs', or better, at the most 
     recent examination of such bank under the Community 
     Reinvestment Act of 1977,
       ``(B) the outstanding local community loans of which at all 
     times during the taxable year comprised not less than 60 
     percent of the total outstanding loans of that bank,
       ``(C) meets the ownership requirements of paragraph (3), 
     and
       ``(D) at all times during the taxable year has total assets 
     of not more than $1,000,000,000.
       ``(3) Ownership requirements.--
       ``(A) In general.--The ownership requirements of this 
     paragraph are met with respect to any bank if--
       ``(i) no shares of, or other ownership interests in, the 
     bank are publicly traded, or
       ``(ii) in the case of a bank the shares of which or 
     ownership interests in which are publicly traded, the last 
     known address of the holders of at least \2/3\ of all such 
     shares or interests, including persons for whose benefit such 
     shares or interests are held by another, is in the home State 
     of the bank or a State contiguous to such home State.
       ``(B) Home state defined.--For purposes of subparagraph 
     (A), the term `home State' means--
       ``(i) with respect to a national bank or Federal savings 
     association, the State in which the main office of the bank 
     or savings association is located, and
       ``(ii) with respect to a State bank or State savings 
     association, the State by which the bank or savings 
     association is chartered.
       ``(4) Other definitions.--For purposes of this subsection--
       ``(A) Bank.--The term `bank'--
       ``(i) has the meaning given to such term in section 581, 
     and
       ``(ii) includes any bank--

       ``(I) in which at least 80 percent of the shares of, or 
     other ownership interests in, the bank are owned by other 
     qualified community lenders, and
       ``(II) the sole purpose of which is to serve the banking 
     needs of such lenders.

       ``(B) Local community loan.--The term `local community 
     loan' means--
       ``(i) any loan originated by a bank to any person, other 
     than a related person with respect to the bank, who is a 
     resident of a community in which the bank is chartered or in 
     which it operates an office at which deposits are accepted, 
     and
       ``(ii) any loan originated by a bank to any person, other 
     than a related person with respect to the bank, who is 
     engaged in a trade or business in any such community, to the 
     extent that all or substantially all of the proceeds of such 
     loan are expended in connection with the trade or business of 
     such person in any such community.
       ``(C) Related person.--The term `related person' means, 
     with respect to any bank, any affiliate of the bank, any 
     person who is a director, officer, or principal shareholder 
     of the bank, and any member of the immediate family of any 
     such person.''.
       (b) S Corporation Income.--Section 1 of the Internal 
     Revenue Code of 1986 (relating to tax imposed) is amended by 
     adding at the end the following:
       ``(j) Community Lender Income From S Corporation.--
       ``(1) In general.--If a taxpayer has community lender 
     income from a S corporation for any taxable year, the tax 
     imposed by this section for such taxable year shall be the 
     sum of--
       ``(A) the tax computed at the rates and in the same manner 
     as if this subsection had not been enacted on the greater 
     of--
       ``(i) taxable income reduced by community lender income, or
       ``(ii) the lesser of--

       ``(I) the amount of taxable income taxed at a rate below 25 
     percent, or
       ``(II) taxable income reduced by community lender income, 
     and

       ``(B) a tax on community lender income computed at--
       ``(i) a rate of zero on zero-rate community lender income,
       ``(ii) a rate of 15 percent on 15 percent community lender 
     income, and
       ``(iii) the highest rate in effect under this section with 
     respect to the taxpayer on the excess of community lender 
     income on which a tax is determined under clause (i) or (ii).
       ``(2) Community lender income.--For purposes of paragraph 
     (1)--
       ``(A) In general.--The term `qualified community lender 
     income' means taxable income (if any) of a qualified 
     community lender (as defined in section 11(d)(2)) that is an 
     S corporation, determined at the entity level.
       ``(B) Zero-rate community lender income.--The term `zero-
     rate community lender income' means the taxpayer's pro rata 
     share of so much of community lender income as does not 
     exceed $250,000.
       ``(C) 15 percent community lender income.--The term `15 
     percent community lender income' means the taxpayer's pro 
     rata share of so much of community lender income as exceeds 
     $250,000 but does not exceed $1,000,000.
       ``(D) Special rules.--
       ``(i) For purposes of this paragraph, the taxpayer's pro 
     rata share of community lender income shall be determined 
     under part II of subchapter S.
       ``(ii) This subsection shall be applied after the 
     application of subsection (h).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 3. EXCLUSION FROM INCOME TAXATION FOR INCOME DERIVED 
                   FROM BANKING SERVICES WITHIN DISTRESSED 
                   COMMUNITIES.

       (a) In General.--Part III of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to items 
     specifically excluded from gross income) is amended by 
     inserting after section 140A the following new section:

[[Page S2863]]

     ``SEC. 140B. BANKING SERVICES WITHIN DISTRESSED COMMUNITIES.

       ``(a) In General.--At the election of the taxpayer, gross 
     income shall not include distressed community banking income.
       ``(b) Distressed Community Banking Income.--For purposes of 
     subsection (a), the term `distressed community banking 
     income' means net income of a qualified depository 
     institution which is derived from the active conduct of a 
     banking business in a distressed community.
       ``(c) Qualified Depository Institution.--For purposes of 
     this section, an institution is a qualified depository 
     institution if--
       ``(1) such institution is an insured depository institution 
     (as defined in section 3 of the Federal Deposit Insurance Act 
     (12 U.S.C. 1813)),
       ``(2) such institution is located in, or has a branch 
     located in, a qualified distressed community, and
       ``(3) as of the last day of the taxable year, at least 85 
     percent of its loans from its location within the qualified 
     distressed community are local community loans (as defined in 
     section 11(d)(4)(B)).
       ``(d) Distressed Community.--For purposes of this section, 
     the term `distressed community' has the meaning given the 
     term `qualified distressed community' by section 233 of the 
     Bank Enterprise Act of 1991 (12 U.S.C. 1834a(b)).''.
       (b) Clerical Amendment.--The table of sections for part III 
     of subchapter B of chapter 1 of the Internal Revenue Code of 
     1986 is amended by inserting after the item relating to 
     section 140A the following:

``Sec. 140B. Banking services within distressed communities.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
      By Mr. BAUCUS (for himself and Mr. Rockefeller):
  S. 2222. A bill to amend titles XIX and XXI of the Social Security 
Act to clarify and ensure that the authority granted to the Secretary 
of Health and Human Services under section 1115 of that Act is used 
solely to promote the objectives of the medicaid and State children's 
health insurance programs, and for other purposes; to the Committee on 
Finance.
  Mr. BAUCUS. Mr. President, I rise today to introduce the Medicaid and 
CHIP Safety Net Preservation Act, a bill to clarify existing law and to 
preserve the core elements of Medicaid, the State Children's Health 
Insurance Program, (CHIP), and our health care safety net, which 
provide needed health services to more than sixty million Americans. 
These programs, which are so critical to the health of our children, 
our parents and grandparents, and to our communities, have been 
threatened in recent years by waivers that undermine the very 
foundations of these programs. I am introducing this bill with my 
colleague, good friend, and the Ranking Member of the Finance 
Committee's Subcommittee on Health, Senator Rockefeller.
  I have long been concerned about the inappropriate use of the so-
called ``Section 1115'' waiver authority with respect to Medicaid and 
CHIP. Section 1115 of the Social Security Act permits the Secretary of 
HHS to waive provisions of the Medicaid and CHIP statutes at the 
request of a state if the waiver is determined to ``promote the 
Objectives'' of the program, and if it meets certain other criteria 
established in statute. The waiver authority has existed since before 
Medicaid's inception, and it is designed to allow states before 
Medicaid's inception, and it is designed to allow states to experiment 
and engage in pilot and demonstration programs in a variety of Social 
Security Act programs. It has long been used to allow States to try 
innovative approaches to deliver or finance healthcare for some of our 
most vulnerable citizens--poor children, pregnant women and parents, 
individuals with disabilities, and the elderly, including many in 
nursing homes.
  But in recent years, the waiver authority has been used increasingly 
aggressively and, in my view, irresponsibly. I first became concerned 
about these waivers when I learned that waiver programs, which now 
affect millions of people and tens of billions of dollars annually, 
were being negotiated and approved in the dark. In some cases, Medicaid 
enrollees literally could not find what the operative Medicaid rules 
were in their state, because laws and rules had been waived and the new 
program requirements were not published in a place accessible to the 
public. In 2001, I and my colleague, Chairman Chuck Grassley, wrote to 
Secretary Thompson with our concerns that the waiver process was not 
adequately transparent, and that there could be no accountability 
without transparency.
  After many months and much correspondence with Secretary Thompson, I 
noticed some improvement in the posting of approved waiver 
applications. By that time, the General Accounting Office had reported 
that there were serious problems with 1115 waivers. Waivers were being 
approved without adequate public input; waivers were being approved 
that used funds set aside by Congress for children's health care on 
childless adults; and waiver applications were being negotiated and 
approved with different standards applied, depending on the identity of 
the state applicant. Finally, and most disturbing, the GAO noted that 
HHS was applying a condition to one type of waiver that imposed a hard 
cap on Federal spending for a state's elderly Medicaid enrollees over a 
five-year period.

  Most recently, I was deeply disturbed to read press reports 
indicating that HHS was inviting states to prepare new more 
comprehensive waiver applications that would impose enforceable, global 
caps on state Medicaid programs. One of the crucial elements of the 
Medicaid program is its unique state-federal financing structure, which 
requires every state dollar expended on Medicaid to be matched by at 
least one Federal dollar. This guaranteed matching structure provides 
financial stability and an incentive for states to maintain levels of 
health care spending in good and bad economic times. The matching 
structure has, over time, allowed a swift response to economic 
recessions, high rates of uninsurance, epidemics, disasters like 9/11, 
and innovative treatment advances, like the advent of expensive 
protease inhibitors to threat AIDS. The law does not, and it should 
not, allow a Secretarial waiver of such a core element of Medicaid.
  Another press report indicated that one governor intended to seek a 
waiver to the Medicaid entitlement in exchange for accepting a hard cap 
on Federal Medicaid spending. In the absence of the individual 
entitlement, a state could turn away eligible applicants; impose 
waiting lists; or terminate a health care benefit in the middle of 
treatment for a serious illness or a stay in a nursing home. For the 
poor, for children, for individuals with disabilities, such as 
``innovation'' in Medicaid could be devastating.
  I also heard reported an instance where HHS announced in court, for 
the very first time, that the Secretary has waived the essential 
``EPSDT'' benefit for children in one state. Beneficiaries did not even 
know that they were no longer entitled to the comprehensive benefit for 
children until they were in litigation with the State over inadequacies 
in the state's Medicaid program.
  And finally, I am concerned about efforts to undermine Medicaid 
financing for Community Health Clinics and Rural Health Clinics through 
the use of the 1115 waiver authority. These clinics provide desperately 
needed care for Medicaid and CHIP enrollees as well as millions of 
uninsured Americans. Without fair payment from Medicaid, CHCs and RHCs 
have reduced capacity to see the patients who rely on them for care.
  There are some features of the Medicaid program that are so 
fundamental to the program that they should never be waived with the 
stroke of the pen of one person. And I am pleased to quote the new 
Administrator of the Centers on Medicare and Medicaid Services, Mark 
McClellan, who agreed at his nomination hearing that, and I quote from 
a news article citing his testimony, ``federally imposed caps on 
spending are not envisioned as part of Medicaid's structure.'' He also 
said that core Medicaid principles, such as the program's state and 
federal funding partnership and citizens' entitlement to benefits, 
should not be waived.
  I am hopeful that, one day in the not too distant future, the 
Congress can have a meaningful debate on how to improve the Medicaid 
program that is now a healthcare lifeline for more than 50 million 
people, and how to improve CHIP and expand coverage to the uninsured. 
But in the meantime, we must ensure that efforts to innovate through 
waivers are made publicly and openly, with an opportunity for 
stakeholder

[[Page S2864]]

input at every level of decision making, and with a promise that 
innovation will ``do no harm'' to the foundational principles of these 
safety net programs. I urge my colleagues to cosponsor this bill, which 
will improve the integrity of Medicaid and CHIP and ensure that they 
remain available and responsive to the needs of so many Americans.
  I ask unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2222

       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 ``Medicaid 
     and CHIP Safety Net Preservation Act of 2004''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents. 
Sec. 2. Findings; purposes; rule of construction. 
Sec. 3. Clarification that section 1115 authority does not permit a cap 
              on Federal financial participation. 
Sec. 4. Clarification that section 1115 authority does not permit 
              elimination of, or modification limiting, individual 
              entitlement.
Sec. 5. Clarification that section 1115 authority does not permit 
              elimination or modification of requirements relating to 
              EPSDT services. 
Sec. 6. Clarification that section 1115 authority does not permit 
              elimination or modification of requirements relating to 
              certain safety-net services. 
Sec. 7. Prohibition on use of CHIP funds for health benefits coverage 
              for childless adults. 
Sec. 8. Improvement of the process for the development and approval of 
              medicaid and CHIP demonstration projects. 
Sec. 9. Effective date. 

     SEC. 2. FINDINGS; PURPOSES; RULE OF CONSTRUCTION.

       (a) Findings.--Congress makes the following findings:
       (1) Certain requirements of titles XIX and XXI of the 
     Social Security Act (42 U.S.C. 1396 et seq., 1397aa et seq.) 
     are central to the overall objectives of the medicaid and 
     State children's health insurance programs and are not 
     properly subject to waiver, modification, or disregard under 
     the authority of section 1115 of the Social Security Act (42 
     U.S.C. 1315).
       (2) Some of the requirements of titles XIX and XXI of the 
     Social Security Act that promote the overall objectives of 
     the medicaid and State children's health insurance programs 
     have been waived, modified, or otherwise disregarded by the 
     Secretary of Health and Human Services under such section 
     1115, despite the explicit requirement in that section that 
     certain requirements of the medicaid and State children's 
     health insurance programs only may be waived, modified, or 
     disregarded for the purpose of approving an experimental, 
     pilot, or demonstration project if the waiver, modification, 
     or disregard ``is likely to assist in promoting the 
     objectives'' of those programs.
       (b) Purposes.--The purposes of this Act are the following:
       (1) To clarify that certain requirements of titles XIX and 
     XXI of the Social Security Act (42 U.S.C. 1396 et seq., 
     1397aa et seq.), which are among those critical to achieving 
     the objectives of the medicaid and State children's health 
     insurance programs, may not be waived, modified, or otherwise 
     disregarded by the Secretary of Health and Human Services 
     under the authority of section 1115 of the Social Security 
     Act (42 U.S.C. 1315).
       (2) To ensure that the authority granted to the Secretary 
     of Health and Human Services under section 1115 of the Social 
     Security Act (42 U.S.C. 1315) with respect to the medicaid 
     and State children's health insurance programs for the 
     purpose of approving experimental, pilot, or demonstration 
     projects is not used inappropriately.
       (c) Rule of Construction.--Nothing in this Act or the 
     amendments made by this Act shall be construed to--
       (1) authorize the waiver, modification, or other disregard 
     of any provision of title XIX or XXI of the Social Security 
     Act (42 U.S.C. 1396 et seq., 1397aa et seq.); or
       (2) imply congressional approval of any demonstration 
     project affecting the medicaid program under title XIX of the 
     Social Security Act or the State children's health insurance 
     program under title XXI of such Act that has been approved by 
     the Secretary of Health and Human Services as of the date of 
     enactment of this Act.

     SEC. 3. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT 
                   PERMIT A CAP ON FEDERAL FINANCIAL 
                   PARTICIPATION.

       Title XIX of the Social Security Act is amended by 
     inserting after section 1925 the following:


            ``clarifications of authority under section 1115

       ``Sec. 1926. (a) Clarification That Section 1115 Authority 
     Does Not Permit a Cap on Federal Financial Participation.--
     The Secretary may not impose or approve under the authority 
     of section 1115 a cap, limitation, or other restriction on 
     payment under section 1903(a) to a State for amounts expended 
     as medical assistance in accordance with the requirements of 
     this title.''.

     SEC. 4. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT 
                   PERMIT ELIMINATION OF, OR MODIFICATION 
                   LIMITING, INDIVIDUAL ENTITLEMENT.

       Section 1926 of the Social Security Act, as added by 
     section 3, is amended by adding at the end the following:
       ``(b) Clarification That Section 1115 Authority Does Not 
     Permit Elimination of, or Modification Limiting, Individual 
     Entitlement.--The Secretary may not approve or impose under 
     the authority of section 1115 an elimination of, or 
     modification limiting, the entitlement (established under 
     section 1902(a), 1905(a), or otherwise) of an individual to 
     receive any medical assistance for which Federal financial 
     participation is claimed under this title.''.

     SEC. 5. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT 
                   PERMIT ELIMINATION OR MODIFICATION OF 
                   REQUIREMENTS RELATING TO EPSDT SERVICES.

       Section 1926 of the Social Security Act, as added by 
     section 3 and amended by section 4, is amended by adding at 
     the end the following:
       ``(c) Clarification That Section 1115 Authority Does Not 
     Permit Elimination or Modification of Requirements Relating 
     to EPSDT Services.--The Secretary may not impose or approve 
     under the authority of section 1115 an elimination or 
     modification of the amount, duration, or scope of the 
     services described in section 1905(a)(4)(B) (relating to 
     early and periodic screening, diagnostic, and treatment 
     services (as defined in section 1905(r))) or of the 
     requirements of subparagraphs (A) through (C) of section 
     1902(a)(43).''.

     SEC. 6. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT 
                   PERMIT ELIMINATION OR MODIFICATION OF 
                   REQUIREMENTS RELATING TO CERTAIN SAFETY-NET 
                   SERVICES.

       Section 1926 of the Social Security Act, as added by 
     section 3 and amended by sections 4 and 5, is amended by 
     adding at the end the following:
       ``(d) Clarification That Section 1115 Authority Does Not 
     Permit Elimination or Modification of Requirements Relating 
     to Certain Safety-Net Services.--The Secretary may not impose 
     or approve under the authority of section 1115 an elimination 
     or modification of the amount, duration, or scope of the 
     services described in subparagraphs (B) and (C) of section 
     1905(a)(2) (relating to services provided by a rural health 
     clinic (as defined in section 1905(l)(1)) and services 
     provided by a Federally-qualified health center (as defined 
     in section 1905(l)(2))) or of the requirements of section 
     1902(bb) (relating to payment for such services).''.

     SEC. 7. PROHIBITION ON USE OF CHIP FUNDS FOR HEALTH BENEFITS 
                   COVERAGE FOR CHILDLESS ADULTS.

       (a) In General.--Section 2107 of the Social Security Act 
     (42 U.S.C. 1397gg) is amended by adding at the end the 
     following:''
       ``(f) Limitation of Waiver Authority.--Notwithstanding 
     subsection (e)(2)(A) and section 1115(a), on and after the 
     date of enactment of this subsection, the Secretary may not 
     approve a waiver, experimental, pilot, or demonstration 
     project, or an amendment to such a project, that would allow 
     funds made available under this title to be used to provide 
     child health assistance or other health benefits coverage to 
     a nonpregnant childless adult. For purposes of the preceding 
     sentence, a caretaker relative (as such term is defined for 
     purposes of carrying out section 1931) shall not be 
     considered a childless adult.''.
       (b) Conforming Amendments.--Section 2105(c)(1) of such Act 
     (42 U.S.C. 1397ee(c)(1)) is amended--
       (1) by inserting ``and may not include coverage of a 
     nonpregnant childless adult'' after ``section 2101)''; and
       (2) by adding at the end the following: ``For purposes of 
     the preceding sentence, a caretaker relative (as such term is 
     defined for purposes of carrying out section 1931) shall not 
     be considered a childless adult.''.

     SEC. 8. IMPROVEMENT OF THE PROCESS FOR THE DEVELOPMENT AND 
                   APPROVAL OF MEDICAID AND CHIP DEMONSTRATION 
                   PROJECTS.

       Section 1115 of the Social Security Act (42 U.S.C. 1315) is 
     amended by inserting after subsection (c) the following:
       ``(d) In the case of any experimental, pilot, or 
     demonstration project under subsection (a) to assist in 
     promoting the objectives of title XIX or XXI in a State that 
     would result in a substantive change in eligibility, 
     enrollment, benefits, financing, or cost-sharing (to the 
     extent permitted under section 1916(f)) with respect to a 
     State program under title XIX or XXI (in this subsection 
     referred to as a `demonstration project') the following shall 
     apply:
       ``(1) The Secretary may not approve a proposal for a 
     demonstration project, or for an amendment of a demonstration 
     project, submitted by a State on or after the date of 
     enactment of this subsection, unless the State requesting 
     approval certifies that the State provided reasonable public 
     notice and a reasonable opportunity for receipt and 
     consideration of public comment on the proposal

[[Page S2865]]

     prior to submission of the proposal to the Secretary. Such 
     notice shall include--
       ``(A) the proposal;
       ``(B) the methodologies underlying the proposal;
       ``(C) the justifications for the proposal;
       ``(D) the State's projections regarding the likely effect 
     and impact of the proposal on individuals eligible for 
     assistance and providers or suppliers of items or services 
     under title XIX or XXI (including under any demonstration 
     project conducted in conjunction with either of those 
     titles); and
       ``(E) the State's assumptions on which the projections 
     described in subparagraph (D) are based.
       ``(2) With respect to any proposal for a demonstration 
     project, or for an amendment or extension of a demonstration 
     project, which has not been approved or disapproved by the 
     Secretary as of the date of enactment of this subsection, the 
     Secretary shall--
       ``(A) provide public notice in the Federal Register and on 
     the Internet website of the Centers for Medicare & Medicaid 
     Services of the proposal, any revisions of the proposal, and 
     any conditions for the financing or approval of the proposal;
       ``(B) provide adequate opportunity for public comment on 
     the proposal, any revisions of the proposal, and any such 
     conditions;
       ``(C) approve such proposal, any revisions of the proposal, 
     and any such conditions only if, after consideration of the 
     public comments received, the Secretary determines that the 
     proposal, any revisions of the proposal, and any such 
     conditions are likely to assist in promoting the objectives 
     of title XIX or XXI and identifies in writing the basis for 
     such determination; and
       ``(D) publish on such website all documentation relating to 
     the proposal (including the written determination required 
     under subparagraph (C)), any revisions of the proposal, and 
     any such conditions, including if the proposal, any revisions 
     of the proposal, and any such conditions are approved--
       ``(i) the final terms and conditions for the demonstration 
     project; and
       ``(ii) a list identifying each provision of title XIX or 
     XXI, and each regulation relating to either such title, with 
     which compliance is waived, modified, or otherwise 
     disregarded or for which costs that would otherwise not be 
     permitted under such title will be allowed.''.

     SEC. 9. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), the 
     amendments made by sections 3 through 6 shall apply to the 
     approval on or after the date of enactment of this Act of--
       (1) a waiver, experimental, pilot, or demonstration project 
     under section 1115 of the Social Security Act (42 U.S.C. 
     1315); and
       (2) an amendment or extension of such a project.
       (b) Exception.--The amendment made by section 5 shall not 
     apply with respect to any extension of approval of a waiver, 
     experimental, pilot, or demonstration project with respect to 
     title XIX of the Social Security Act that was first approved 
     before 1994 and that provides a comprehensive and preventive 
     child health program under such project that includes 
     screening, diagnosis, and treatment of children who have not 
     attained age 21.

  Mr. ROCKEFELLER. Mr. President, I rise today to join the 
distinguished ranking member from Montana, Mr. Baucus, in introducing 
the Medicaid and CHIP Safety Net Preservation Act of 2004. Medicaid and 
the Children's Health Insurance Program (CHIP) provide health insurance 
coverage to more than 50 million vulnerable Americans, including 
pregnant women, kids, people with disabilities, and seniors in nursing 
homes. Preserving the integrity of each of these programs should be one 
of our top priorities. The bill that we are introducing today would 
ensure that Section 1115 of the Social Security Act--the so-called 
``1115 waiver authority''--does not erode the core objectives of 
Medicaid and CHIP.
  Medicaid and CHIP form the foundation of our Nation's health care 
safety net. Without them, many more Americans would be uninsured. 
Unfortunately, the central objectives of these entitlement programs 
have been threatened in recent years by short-sighted proposals to cap 
Federal funding, questionable administrative rules and regulations, and 
inappropriate waivers that essentially waive the requirements of 
Federal law. The Medicaid and CHIP Safety Net Preservation Act would 
address each of these issues by reaffirming the core requirements of 
Medicaid and SCHIP.
  Congress created Medicaid in 1965 as Federal-State partnership to 
provide health insurance coverage to low-income families on welfare. 
Over the years, Medicaid has evolved into a multi-faceted health 
insurance program that serves working families, the disabled, and the 
elderly. Throughout the evolution of Medicaid, two aspects of the 
program have remained the same: Federal guidelines for program 
administration and shared Federal and State responsibility for 
financing. This structure has served the Medicaid program well. It 
maintains the national health care safety net, while also allowing 
Federal and State policymakers to tailor the program to meet local 
needs.
  In 1997, I was joined by Senator Chafee in introducing the Children's 
Health Insurance Program as part of the Balanced Budget Act. The 
purpose of this program has always been to help the children of 
families that do not qualify for Medicaid. At the time that CHIP was 
enacted, 10 million children were uninsured. Today, over 5 million 
children have coverage through CHIP; this includes nearly 23,000 
children in the State of West Virginia. While we still have a long way 
to go in order to provide every child with health insurance, I believe 
the families touched by the CHIP program thus far would agree it serves 
its purpose well.
  The legislation that Senator Baucus and I are introducing today is 
designed to make it very clear that certain requirements under Medicaid 
and CHIP are central to the overall objectives of these programs and 
are not subject to waiver. Specifically, this legislation would ensure 
that 1115 waivers are not used to impose global caps on Federal 
payments to Medicaid. It would protect the Federal guarantee of 
Medicaid for any eligible individual. Children would continue to have 
access to comprehensive health benefits under the Early and Periodic 
Screening, Diagnostic, and Treatment (EPSDT) program. Money intended 
for the care of children under CHIP would be used for that purpose. 
Finally, the process for reviewing and approving 1115 waivers would be 
more transparent, allowing greater opportunities for public notice and 
comment.
  The Medicaid and CHIP Safety Net Preservation Act is a good first 
step toward preserving these critical health insurance programs. 
However, in order to strengthen Medicaid and CHIP for the future, we 
must also enact legislation that gives States the resources they need 
to cover eligible Medicaid beneficiaries, restores funding for the CHIP 
program, and allows states greater flexibility within the guidelines of 
the law. I urge my colleagues to support all of these important 
measures.
                                 ______
                                 
      By Mr. ALLARD (for himself, Mr. Brownback, Mr. Enzi, Mr. Inhofe, 
        Mr. Miller, Mr. Lott, Mr. Santorum, Mr. Sessions, and Mr. 
        Shelby):
  S.J. Res. 30. A joint resolution proposing an amendment to the 
Constitution of the United States relating to marriage; to the 
Committee on the Judiciary.

                              S.J. Res. 30

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, That the 
     following article is proposed as an amendment to the 
     Constitution of the United States, which shall be valid to 
     all intents and purposes as part of the Constitution when 
     ratified by the legislatures of three-fourths of the several 
     States:

                              ``Article --

     ``SECTION 1. SHORT TITLE.

       ``This Article may be cited as the `Federal Marriage 
     Amendment'.

     ``SECTION 2. MARRIAGE AMENDMENT.

       ``Marriage in the United States shall consist only of the 
     union of a man and a woman. Neither this Constitution, nor 
     the constitution of any State, shall be construed to require 
     that marriage or the legal incidents thereof be conferred 
     upon any union other than the union of a man and a woman.''.

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