[Congressional Record Volume 151, Number 103 (Tuesday, July 26, 2005)]
[Senate]
[Pages S8951-S8986]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. SARBANES (for himself, Ms. Mikulski, Mr. Allen, and Mr.
Warner):
S. 1490. A bill to amend the Federal Water Pollution Control Act to
require environmental--accountability and reporting and to reauthorize
the Chesapeake Bay Program; to the Committee on Environment and Public
Works.
______
By Mr. SARBANES (for himself, Ms. Mikulski, Mr. Warner, Mr.
Allen, and Mr. Santorum):
S. 1491. A bill to amend the Federal Water Pollution Control Act to
provide assistance for nutrient removal technologies to States in the
Chesapeake Bay watershed; to the Committee on Environment and Public
Works.
______
By Mr. SARBANES (for himself, Ms. Mikulski, Mr. Warner, and Mr.
Allen):
S. 1492. A bill to amend the Elementary and Secondary Education Act
of 1965 to establish a pilot program to make grants to eligible
institutions to develop, demonstrate, or disseminate information on
practices, methods, or techniques relating to environmental education
and training in the Chesapeake Bay Watershed; to the Committee on
Health, Education, Labor, and Pensions.
______
By Mr. SARBANES (for himself, Ms. Mikulski, Mr. Warner, Mr.
Allen, and Mr. Santorum):
S. 1493. A bill to require the Secretary of Agriculture to establish
a program to expand and strengthen cooperative efforts to restore and
protect forests in the Chesapeake Bay watershed, and for other
purposes; to the Committee on Agriculture, Nutrition, and Forestry.
______
By Mr. SARBANES (for himself, Ms. Mikulski, Mr. Warner, and Mr.
Allen):
S. 1494. A bill to amend the National Oceanic and Atmospheric
Administration Authorization Act of 1992 to establish programs to
enhance protection of the Chesapeake Bay, and for other purposes; to
the Committee on Commerce, Science, and Transportation.
Mr. SARBANES. Mr. President, today I am introducing a package of five
measures to sustain and indeed renew the Federal commitment to
restoring the water quality and living resources of the Chesapeake Bay
watershed. Joining me in sponsoring one or more of these measures are
my colleagues from Virginia, Pennsylvania, and Maryland, Senators
Warner, Allen, Mikulski, and Santorum.
In his 1984 State of the Union message, President Ronald Reagan
called the Chesapeake Bay a ``special national resource'' and pledged
$10 million a year for 4 years to ``begin the long, necessary effort to
clean up'' the Bay. Today, despite more than 2 decades of effort and
the investment of hundreds of millions of dollars on the part of
Federal, State, and local governments and the private sector, the goal
of a clean, restored Bay appears elusive. For the past 3 years, the
Chesapeake Bay Foundation has given the Chesapeake Bay a failing grade
of 27 out of 100 on its annual report card--far short of the ``70''
level believed necessary for the Bay to be declared ``saved.'' The
continued flood of sediments and nutrient pollution from sewage
treatment plants, farms, urban runoff, and air deposition, combined
with continued rapid growth in population and development in the
watershed, is offsetting the progress that has been made to date in
restoring the Bay. The Bay remains an ``impaired water body'' under the
Clean Water Act, and Chesapeake Bay Program scientists are forecasting
another summer of very low oxygen levels in the deep waters of the Bay,
further stressing oysters, crabs, and other living resources. As author
and naturalist Tom Horton points out in a recent National Geographic
article,
[[Page S8952]]
``No one had illusions that the work of the Chesapeake Bay Program, a
massive Federal-State restoration effort, begun in 1983 and unmatched
anywhere in the world, would be quick or easy. But no one anticipated
that 22 years later we would still be struggling.''
If the Bay is to be restored, we must redouble our efforts. Nitrogen
pollution from all sources will have to be substantially reduced,
thousands of acres of watershed property must be preserved, significant
efforts must be made to restore living resources, and buffer zones to
protect rivers and streams need to be created. Likewise, assistance to
community organizations, local governments, and educational
institutions at all levels must be expanded dramatically to help foster
local stewardship and entice more of the 16 million residents who live
in the watershed to play active roles in the efforts to restore the
Bay.
The five measures that we are introducing are an important part of,
but by no means the entire, solution for addressing the Bay's problems.
Earlier in this Congress, Members from the Bay-area States, from both
parties, joined with me in a letter to President Bush, urging him to
make restoration of Chesapeake Bay a top environmental priority and to
commit $1 billion in his budget as a down-payment towards restoring the
Bay's water quality. We called upon the Secretary of Agriculture to
release $100 million provided under the 2002 Farm Bill for farmers to
test new, innovative techniques for reducing agricultural nutrient
pollution in the Chesapeake Bay watershed. Under Senator Warner's
leadership, we succeeded in getting a provision in the Senate-passed
SAFETEA legislation, which would provide more than $70 million for the
Bay area States and local governments to mitigate the impacts of storm-
water runoff from highways and related impervious surfaces. We have
fought to prevent a significant cut in funding for the Clean Water
State Revolving Fund. And we have continued to press the Administrator
of the Environmental Protection Agency to ensure that the Clean Water
Act is fully enforced. All these are critical components of a more
comprehensive effort on the part of the Federal, State and local
governments and the private sector that will be needed over the course
of the next few years to restore the health of the Chesapeake Bay.
The first measure, the Chesapeake Bay Program Reauthorization and
Environmental Accountability Act of 2005, would reauthorize and enhance
EPA's Chesapeake Bay Program and would increase the program's
accountability for improving the health of the Bay. The Chesapeake Bay
Program, which has guided the clean-up effort for the past two decades,
expires this year and must be reauthorized. Originally authorized in
the Water Quality Act of 1987 and reauthorized in the Estuaries and
Clean Water Act of 2000, the Chesapeake Bay Program provides support
and coordination for Federal, State, and local efforts in developing
strategies and action plans, conducting system-wide monitoring and
assessment, implementing projects to restore and protect the Bay and
its living resources, and communicating with the public about the Bay
and efforts to restore and protect it.
Last year, Senator Mikulski, Senator Warner, and I asked the
Government Accountability Office to conduct a review of the Bay Program
that would assess the overall restoration progress reported for the
Bay; determine how progress is measured in the Bay watershed; and
evaluate the effectiveness of Chesapeake Bay Program efforts to ensure
that proper measures are being used. That study is nearing completion.
Its preliminary findings recommend a number of improvements to the
Program, which we have incorporated in this measure. The Chesapeake
2000 Agreement provides goals for the Bay, but the GAO found that EPA
has not developed a plan to achieve these goals. Bay restoration has
also been hampered by a lack of interim goals and time frames against
which progress can be assessed. The legislation we are introducing
today requires the EPA Administrator to develop an implementation plan
for reaching the goals of the Chesapeake 2000 Agreement, including a
timeline with specific annual goals for nutrient and sediment
reduction, associated costs, and measures for assessing progress, and
to prepare an annual report for Congress that describes the
accomplishments of the previous year and the reductions likely to occur
in the future. The legislation also directs the Administrator to
publish and widely circulate annual ``tributary report cards'' that
describe the progress made in achieving the nutrient and sediment
reduction goals for each major tributary or tributary segment in the
Bay watershed. These ``report cards'' will provide the public with a
clear and accurate picture of the progress toward restoring the Bay,
which is currently lacking. In addition, the Director of the Office of
Management and Budget is to submit an annual report on Chesapeake Bay
Program funding.
The second measure, the Chesapeake Bay Watershed Nutrient Removal
Assistance Act, would establish a grants program in the Environmental
Protection Agency to support the installation of nutrient reduction
technologies at major wastewater treatment facilities in the Chesapeake
Bay watershed. I first introduced this measure during the 107th
Congress, and provisions of the legislation were included as part of S.
1961, the Water Investment Act of 2002, reported favorably by the
Senate Environment and Public Works Committee. Unfortunately, no
further action was taken on that legislation.
Despite important water quality improvements over the past decade,
the overabundance of the nutrients nitrogen and phosphorus continues to
rob the Bay of life-sustaining oxygen. Recent modeling of EPA's Bay
Program has found that total nutrient discharges must be reduced by
more than 40 percent from current levels to restore the Chesapeake Bay
and its major tributaries to health. To do so, nitrogen discharges from
all sources must be reduced drastically below current levels. Annual
nitrogen discharges into the Bay will need to be cut by at least 100
million pounds from the current 275 million pounds to less than 175
million pounds. Municipal wastewater treatment plants, in particular,
will have to reduce nitrogen discharges by nearly 75 percent.
In December 2004, the Chesapeake Bay Commission issued a report
entitled ``Cost-Effective Strategies for the Bay''; of the six most
cost-effective strategies listed in that report, upgrading wastewater
treatment plants is Number One. There are more than 300 significant
municipal wastewater treatment plants in the Chesapeake Bay watershed.
These plants contribute almost 60 million pounds of nitrogen per year--
one-fifth--of the total load of nitrogen to the Bay. Upgrading these
plants with nutrient removal technologies to achieve nitrogen levels of
3 mg/liter would remove as much as 30 million pounds of nitrogen in the
Bay each year, or 30 percent of the total nitrogen reductions needed.
Nutrient removal technologies have other benefits, as well. They
provide significant savings in energy usage, 20-30 percent, in chemical
usage, more than 50 percent, and in the amount of sludge produced, 5-15
percent. Furthermore, the benefits from upgrading sewage treatment
plants have an immediate result on the Bay's water quality, unlike
other methods that primarily affect nutrients in ground water and may
take years to produce results. This legislation would provide grants
for 55 percent of the capital cost of upgrading the plants with state-
of-the-art nutrient removal technologies capable of achieving nitrogen
levels of 3 mg/liter. Any publicly owned wastewater treatment plant
which has a permitted design capacity to treat an annual average of 0.5
million gallons per day within the Chesapeake Bay watershed portion of
New York, Pennsylvania, Maryland, West Virginia, Delaware, Virginia,
and the District of Columbia would be eligible to receive these grants.
As a signatory to the Chesapeake Bay Agreement, the EPA has an
important responsibility to assist the states with financing these
water infrastructure needs.
The third measure, the Chesapeake Bay Environmental Education Pilot
Program Act, would establish a new environmental education program in
the U.S. Department of Education for elementary and secondary school
students and teachers within the Chesapeake Bay watershed. There is a
growing consensus that a major commitment to education to promoting an
ethic of responsible stewardship and
[[Page S8953]]
citizenship among the 16 million people who live in the watershed is
necessary if all of the other efforts to save the Bay are to succeed.
Expanding environmental education and training opportunities will lead
not only to a healthier Chesapeake Bay ecosystem but also to a more
educated and informed citizenry, with a deeper understanding of and
appreciation for the environment, their community, and their role in
society as responsible citizens.
One of the principal commitments of the Chesapeake 2000 Agreement is
to ``provide a meaningful Bay or stream outdoor experience for every
school student in the watershed before graduation from high school''
beginning with the class of 2005. There are more than 3.3 million K-12
students in the watershed, and despite important efforts by Bay area
states and not-for-profit organizations, only a very small percentage
of these students have had the opportunity to engage in meaningful
outdoor experiences or receive classroom environmental instruction.
Many of the school systems in the Bay watershed are only at the
beginning stages in developing and implementing environmental education
into their curriculum, let alone exposing students to outdoor watershed
experiences. What's lacking is not the desire or will, but the
resources and training to undertake more comprehensive environmental
education programs.
This legislation would authorize $6 million a year over the next four
years in Federal grant assistance to help close the resource and
training gap for students in the elementary and secondary levels in the
Chesapeake Bay watershed. It would require a 50 percent non-Federal
match, thus leveraging $12 million in assistance. The funding could be
used to help design, demonstrate or disseminate environmental curricula
and field practices, train teachers or other educational personnel, and
support on-the-ground activities or Chesapeake Bay or stream outdoor
educational experiences involving students and teachers, among other
things. The program would complement the NOAA Bay Watershed Education
and Training Program that we established several years ago.
The fourth measure, the Chesapeake Bay Watershed Forestry Act, would
continue and enhance the USDA Forest Service's role in the restoration
of the Chesapeake Bay watershed. Forest loss and fragmentation are
occurring rapidly in the Chesapeake Bay region and are among the most
important issues facing the Bay and forest management today. According
to the National Resources Inventory, the States closest to the Bay lost
350,000 acres of forest between 1987 and 1997--almost 100 acres per
day. More and more rural areas are being converted to suburban
developments, resulting in smaller contiguous forest tracts. These
trends are leading to a regional forest land base that is more
vulnerable to conversion, is less likely to be economically viable in
the future, and is losing its capacity to protect watershed health and
other ecological benefits, such as controlling stormwater runoff,
erosion and air pollution. Restoring and conserving forests is
essential to sustaining the Bay ecosystem.
Since 1990, the USDA Forest Service has been an important part of the
Chesapeake Bay Program. The Service has worked closely with Federal,
State, and local partners in the six-state Chesapeake Bay region to
demonstrate how forest protection, restoration, and stewardship
activities can contribute to achieving the Bay restoration goals. With
the signing of the Chesapeake 2000 Agreement, the role of the USDA
Forest Service has become more important than ever. Among other
provisions, this Agreement requires the signatories to conserve
existing forests along all streams and shoreline; to promote the
expansion and connection of contiguous forests; to assess the Bay's
forest lands; and to provide technical and financial assistance to
local governments to plan for or revise plans, ordinances, and
subdivision regulations to provide for the conservation and sustainable
use of the forest and agricultural lands.
This legislation codifies the role and responsibilities of the USDA
Forest Service to the Bay restoration effort. It requires an evaluation
of the urban and rural forests in the watershed. It strengthens
existing coordination, technical assistance, forest resource
assessment, and planning efforts for urban, suburban and rural areas of
the Chesapeake Bay watershed. It authorizes a small grants program to
support local agencies, watershed associations, and citizen groups in
conducting on-the-ground conservation projects. It establishes a
regional applied forestry research and training program to enhance
urban, suburban and rural forests in the watershed. Finally it
authorizes $3.5 million for each of fiscal years 2004 through 2010, a
modest increase in view of the six-State, 64,000-square-mile watershed.
The fifth measure, the NOAA Chesapeake Bay Watershed Monitoring,
Education, Training, and Restoration Act, would enhance the authorities
of the Chesapeake Bay Office of the National Oceanic and Atmospheric
Administration, NOAA, to address the goals and commitments of the
Chesapeake 2000 Agreement with regard to living-resource restoration
and education and training. It builds upon provisions contained in the
Hydrographic Services Improvement Act Amendments of 2002, and addresses
several urgent and unmet needs in the watershed. To help meet Bay-wide
living resource education and training goals, it codifies the Bay
Watershed Education and Training, or B-WET, Program--the first
federally funded environmental education program focused solely on the
Chesapeake Bay watershed--that we initiated in the Fiscal 2002
Commerce, Justice, State Appropriations bill; it establishes an
aquaculture education program to assist with oyster and blue crab
hatchery production; and it codifies the ongoing oyster restoration
program and authorizes a new restoration program for submerged aquatic
vegetation.
To better coordinate and organize the substantial amounts of weather,
tide, habitat, water-quality and other data collected and compiled by
Federal, State, and local government agencies and academic institutions
and to make this information more useful to resource managers,
scientists, and the public, this bill also establishes an integrated
observing system for the Chesapeake Bay. This system will build on and
coordinate existing monitoring and observing activities in the Bay and
its watershed, and will include development of an internet-based system
for integrating and disseminating the vast amounts of information
available.
These measures would provide an important boost to our efforts to
restore the Chesapeake Bay. They are strongly supported by the
Chesapeake Bay Commission and the Chesapeake Bay Foundation. I ask
unanimous consent that the text of the bills and supporting letters be
printed in the Record. I urge my colleagues to join with us in
supporting the measures and continue the momentum contributing to the
improvement and enhancement of our Nation's most valuable and treasured
natural resource.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1490
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 ``Chesapeake Bay Program
Reauthorization and Environmental Accountability Act of
2005''.
SEC. 2. CHESAPEAKE BAY ENVIRONMENTAL ACCOUNTABILITY AND
REPORTING REQUIREMENTS.
Section 117 of the Federal Water Pollution Control Act (33
U.S.C. 1267) is amended--
(1) by redesignating subsection (j) as subsection (l);
(2) in subsection (e)(7), by inserting ``by the Federal
Government or a State government'' after ``funded'' each
place it appears; and
(3) by inserting after subsection (i) the following:
``(j) Environmental Accountability.--
``(1) Implementation plan.--
``(A) In general.--Not later than 180 days after the date
of enactment of this paragraph, the Administrator shall
complete a plan for achieving the nutrient and sediment
reduction goals described in the agreement entered into by
the Chesapeake Executive Council entitled `Chesapeake 2000'
and dated June 28, 2000.
``(B) Inclusions.--The plan shall include--
``(i) a timeline identifying--
``(I) annual goals for achieving the overall nutrient and
sediment reduction goals; and
``(II) the estimated annual costs of reaching the annual
goals identified under subclause (I);
[[Page S8954]]
``(ii) a description of any measure, including monitoring
or modeling, that the Administrator will use to assess
progress made toward achieving a goal described in
subparagraph (A) in--
``(I) each jurisdictional tributary strategy basin of the
Chesapeake Bay; and
``(II) the Chesapeake Bay watershed as a whole; and
``(iii) a description of any Federal or non-Federal
activity necessary to achieve the nutrient and sediment
reduction goals, including an identification of any party
that is responsible for carrying out the activity.
``(2) Annual tributary health report card.--
``(A) In general.--Not later than January 31 of each year,
the Administrator shall publish and widely circulate a
`tributary health report card' to evaluate, based on
monitoring and modeling data, progress made during the
preceding year (including any practice implemented during the
year), and overall progress made, in achieving and
maintaining nutrient and sediment reduction goals for each
major tributary of the Chesapeake Bay and each separable
segment of such a tributary.
``(B) Baseline.--The baseline for the report card (referred
to in this paragraph as the `baseline') shall be the
tributary cap load allocation agreement numbered EPA 903-R-
03-007, dated December 2003, and entitled `Setting and
Allocating the Chesapeake Bay Basin Nutrient and Sediment
Loads: The Collaborative Process, Technical Tools and
Innovative Approaches'.
``(C) Inclusions.--The report card shall include, for each
jurisdictional tributary strategy basin of the Chesapeake
Bay--
``(i) an identification of the total allocation of
nutrients and sediments under the baseline;
``(ii) the monitored and modeled quantities of nitrogen,
phosphorus, and sediment reductions achieved during the
preceding year, expressed numerically and as a percentage of
reduction;
``(iii) a list (organized from least to most progress made)
that ranks the comparative progress made, based on the
percentage of reduction under clause (ii), by each
jurisdictional tributary strategy basin toward meeting the
annual allocation goal of that jurisdictional tributary
strategy basin for nitrogen, phosphorus, and sediment; and
``(iv) to the maximum extent practicable, an identification
of the principal sources of pollutants of the tributaries,
including airborne sources of pollutants.
``(D) Use of data; consideration.--In preparing the report,
the Administrator shall--
``(i) use monitoring data and data submitted under
paragraph (3)(A); and
``(ii) take into consideration drought and wet weather
conditions.
``(3) Actions by states.--
``(A) Submission of information.--Not later than December
31 of each year, each of the States of Delaware, Maryland,
New York, Pennsylvania, Virginia, and West Virginia and the
District of Columbia shall submit to the Administrator
information describing, for each jurisdictional tributary
strategy basin of the Chesapeake Bay located in the State or
District, for the preceding year--
``(i) the nutrient and sediment cap load allocation of the
jurisdictional tributary strategy basin;
``(ii) the principal sources of nutrients and sediment in
the jurisdictional tributary strategy basin, by category;
``(iii) for each category of pollutant source, the
technologies or practices used to achieve reductions,
including levels of best management practices implementation
and sewage treatment plant upgrades; and
``(iv) any Federal, State, or non-Federal funding used to
implement a technology or practice described in clause (iii).
``(B) Audit.--Not later than 1 year after the date of
enactment of this subparagraph, and triennially thereafter,
the Inspector General of the Environmental Protection Agency
shall audit the information submitted by States under
subparagraph (A) for accuracy.
``(C) Failure to act.--The Administrator shall not make a
grant to a State under this Act if the State fails to submit
any information in accordance with subparagraph (A).
``(k) Reporting Requirements.--
``(1) Office of management and budget.--
``(A) Initial report.--Not later than 180 days after the
date of enactment of this subsection, the Director of the
Office of Management and Budget shall submit to the
appropriate committees of the Senate and the House of
Representatives a report describing the feasibility and
advisability of--
``(i) combining into a single fund certain or all funds
(including formula and grant funds) made available to each
Federal agency to carry out restoration activities relating
to the Chesapeake Bay; and
``(ii) notwithstanding any issue relating to jurisdiction,
distributing amounts from that fund in accordance with the
priority of water quality improvement activities identified
under the Chesapeake Bay Program.
``(B) Annual report.--Not later than February 15 of each
year, the Director of the Office of Management and Budget
shall submit to the appropriate committees of the Senate and
the House of Representatives a report containing--
``(i) an interagency crosscut budget that displays the
proposed budget for use by each Federal agency in carrying
out restoration activities relating to the Chesapeake Bay for
the following fiscal year; and
``(ii) a detailed accounting of all funds received and
obligated by Federal and State governments (including formula
and grant funds, such as State revolving loan funds and
agriculture conservation funds) to achieve the objectives of
the Chesapeake Bay Program during the preceding fiscal year.
``(2) Environmental protection agency.--Not later than
April 15 of each year, the Administrator, in cooperation with
appropriate Federal agencies, as determined by the
Administrator, shall submit to the appropriate committees of
the Senate and the House of Representatives a report
containing--
``(A)(i) an estimate of the reduction in levels of
nutrients and sediments in the Chesapeake Bay and its
tributaries; and
``(ii) a comparison of each estimated reduction under
clause (i) and the appropriate annual goal described in the
implementation plan under subsection (j)(1);
``(B) based on review by the Administrator of the budget
and implementation plans of each Federal agency, and any
tributary strategy of an appropriate State agency--
``(i) an estimate of the reductions in pollutants likely to
occur as a result of each program of an agency under this
section during the subsequent 1-year and 5-year periods,
including--
``(I) an analysis of the success or failure of each program
in achieving nutrient and sediment reduction; and
``(II) an estimated timeline during which a reduction in
nutrient and sediment pollution will occur; and
``(ii) accounting for other trend data, an estimate of the
actual reduction in the quantities of nutrients and sediments
in the Chesapeake Bay and its tributaries from all sources
that has occurred over the preceding 1-year and 5-year
periods; and
``(C) the technical basis and reliability of each estimate
under this paragraph.''.
SEC. 3. AUTHORIZATION OF APPROPRIATIONS.
Section 117 of the Federal Water Pollution Control Act (33
U.S.C. 1267) is amended by striking subsection (l) (as
redesignated by section 2) and inserting the following:
``(l) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $50,000,000 for
each of fiscal years 2006 through 2010, to remain available
until expended.''.
S. 1491
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 ``Chesapeake Bay Watershed
Nutrient Removal Assistance Act''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) nutrient pollution from point sources and nonpoint
sources continues to be the most significant water quality
problem in the Chesapeake Bay watershed;
(2) a key commitment of the Chesapeake 2000 agreement, an
interstate agreement among the Administrator, the Chesapeake
Bay Commission, the District of Columbia, and the States of
Maryland, Virginia, and Pennsylvania, is to achieve the goal
of correcting the nutrient-related problems in the Chesapeake
Bay by 2010;
(3) by correcting those problems, the Chesapeake Bay and
its tidal tributaries may be removed from the list of
impaired bodies of water designated by the Administrator of
the Environmental Protection Agency under section 303(d) of
the Federal Water Pollution Control Act (33 U.S.C. 1313(d));
(4) more than 300 major sewage treatment plants located in
the Chesapeake Bay watershed annually discharge approximately
60,000,000 pounds of nitrogen, or the equivalent of 20
percent of the total nitrogen load, into the Chesapeake Bay;
and
(5) nutrient removal technology is 1 of the most reliable,
cost-effective, and direct methods for reducing the flow of
nitrogen from point sources into the Chesapeake Bay.
(b) Purposes.--The purposes of this Act are--
(1) to authorize the Administrator of the Environmental
Protection Agency to provide financial assistance to States
and municipalities for use in upgrading publicly-owned
wastewater treatment plants in the Chesapeake Bay watershed
with nutrient removal technologies; and
(2) to further the goal of restoring the water quality of
the Chesapeake Bay to conditions that are protective of human
health and aquatic living resources.
SEC. 3. SEWAGE CONTROL TECHNOLOGY GRANT PROGRAM.
The Federal Water Pollution Control Act (33 U.S.C. 1251 et
seq.) is amended by adding at the end the following:
``TITLE VII--MISCELLANEOUS
``SEC. 701. SEWAGE CONTROL TECHNOLOGY GRANT PROGRAM.
``(a) Definition of Eligible Facility.--In this section,
the term `eligible facility' means a municipal wastewater
treatment plant that--
``(1) as of the date of enactment of this title, has a
permitted design capacity to treat an annual average of at
least 500,000 gallons of wastewater per day; and
``(2) is located within the Chesapeake Bay watershed in any
of the States of Delaware, Maryland, New York, Pennsylvania,
Virginia, or West Virginia or in the District of Columbia.
``(b) Grant Program.--
``(1) Establishment.--Not later than 1 year after the date
of enactment of this title, the
[[Page S8955]]
Administrator shall establish a program within the
Environmental Protection Agency to provide grants to States
and municipalities to upgrade eligible facilities with
nutrient removal technologies.
``(2) Priority.--In providing a grant under paragraph (1),
the Administrator shall--
``(A) consult with the Chesapeake Bay Program Office;
``(B) give priority to eligible facilities at which
nutrient removal upgrades would--
``(i) produce the greatest nutrient load reductions at
points of discharge; or
``(ii) result in the greatest environmental benefits to
local bodies of water surrounding, and the main stem of, the
Chesapeake Bay; and
``(iii) take into consideration the geographic distribution
of the grants.
``(3) Application.--
``(A) In general.--On receipt of an application from a
State or municipality for a grant under this section, if the
Administrator approves the request, the Administrator shall
transfer to the State or municipality the amount of
assistance requested.
``(B) Form.--An application submitted by a State or
municipality under subparagraph (A) shall be in such form and
shall include such information as the Administrator may
prescribe.
``(4) Use of funds.--A State or municipality that receives
a grant under this section shall use the grant to upgrade
eligible facilities with nutrient removal technologies that
are designed to reduce total nitrogen in discharged
wastewater to an average annual concentration of 3 milligrams
per liter.
``(5) Cost sharing.--
``(A) Federal share.--The Federal share of the cost of
upgrading any eligible facility as described in paragraph (1)
using funds provided under this section shall not exceed 55
percent.
``(B) Non-federal share.--The non-Federal share of the
costs of upgrading any eligible facility as described in
paragraph (1) using funds provided under this section may be
provided in the form of funds made available to a State or
municipality under--
``(i) any provision of this Act other than this section
(including funds made available from a State revolving fund
established under title VI); or
``(ii) any other Federal or State law.
``(c) Authorization of Appropriations.--
``(1) In general.--There is authorized to be appropriated
to carry out this section $132,000,000 for each of fiscal
years 2006 through 2010, to remain available until expended.
``(2) Administrative costs.--The Administrator may use not
to exceed 4 percent of any amount made available under
paragraph (1) to pay administrative costs incurred in
carrying out this section.''.
S. 1492
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 ``Chesapeake Bay Environmental
Education Pilot Program Act''.
SEC. 2. FINDINGS.
Congress finds that--
(1) increasing public environmental awareness and
understanding through formal environmental education and
meaningful bay or stream field experiences are vital parts of
the effort to protect and restore the Chesapeake Bay
ecosystem;
(2) using the Chesapeake Bay watershed as an integrating
context for learning can help--
(A) advance student learning skills;
(B) improve academic achievement in core academic subjects;
and
(C)(i) encourage positive behavior of students in school;
and
(ii) encourage environmental stewardship in school and in
the community; and
(3) the Federal Government, acting through the Secretary of
Education, should work with the Under Secretary for Oceans
and Atmosphere, the Chesapeake Executive Council, State
educational agencies, elementary schools and secondary
schools, and nonprofit educational and environmental
organizations to support development of curricula, teacher
training, special projects, and other activities, to increase
understanding of the Chesapeake Bay watershed and to improve
awareness of environmental problems.
SEC. 3. CHESAPEAKE BAY ENVIRONMENTAL EDUCATION AND TRAINING
GRANT PILOT PROGRAM.
Title IV of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 7101 et seq.) is amended by adding at the end
the following:
``PART D--CHESAPEAKE BAY ENVIRONMENTAL EDUCATION AND TRAINING GRANT
PILOT PROGRAM
``SEC. 4401. DEFINITIONS.
``In this part:
``(1) Bay watershed state.--The term `Bay Watershed State'
means each of the States of Delaware, Maryland, New York,
Pennsylvania, Virginia, and West Virginia, and the District
of Columbia.
``(2) Chesapeake executive council.--The term `Chesapeake
Executive Council' has the meaning given the term in section
307(d) of the National Oceanic and Atmospheric Administration
Authorization Act of 1992 (15 U.S.C. 1511d(d)).
``(3) Eligible institution.--The term `eligible
institution' means--
``(A) a public elementary school or secondary school
located in a Bay Watershed State; and
``(B) a nonprofit environmental or educational organization
located in a Bay Watershed State.
``(4) Program.--The term `Program' means the Chesapeake Bay
Environmental Education and Training Grant Pilot Program
established under section 4402.
``SEC. 4402. CHESAPEAKE BAY ENVIRONMENTAL EDUCATION AND
TRAINING GRANT PILOT PROGRAM.
``(a) In General.--The Secretary shall establish a grant
program, to be known as the `Chesapeake Bay Environmental
Education and Training Grant Pilot Program', to make grants
to eligible institutions to pay the Federal share of the cost
of developing, demonstrating, or disseminating information on
practices, methods, or techniques relating to environmental
education and training in the Chesapeake Bay watershed.
``(b) Federal Share.--The Federal share referred to in
subsection (a) shall be 50 percent.
``(c) Administration.--The Secretary may offer to enter
into a cooperative agreement or contract with the National
Fish and Wildlife Foundation established by the National Fish
and Wildlife Foundation Establishment Act (16 U.S.C. 3701 et
seq.), the Under Secretary for Oceans and Atmosphere, a State
educational agency, or a nonprofit organization that carries
out environmental education and training programs, for
administration of the Program.
``(d) Use of Funds.--An eligible institution that receives
a grant under the Program shall use the funds made available
through the grant to carry out a project consisting of--
``(1) design, demonstration, or dissemination of
environmental curricula, including development of educational
tools or materials;
``(2) design or demonstration of field practices, methods,
or techniques, including--
``(A) assessments of environmental or ecological
conditions; and
``(B) analyses of environmental pollution or other natural
resource problems;
``(3) understanding and assessment of a specific
environmental issue or a specific environmental problem;
``(4) provision of training or related education for
teachers or other educational personnel, including provision
of programs or curricula to meet the needs of students in
various age groups or at various grade levels;
``(5) provision of an environmental education seminar,
teleconference, or workshop for environmental education
professionals or environmental education students, or
provision of a computer network for such professionals and
students;
``(6) provision of on-the-ground activities involving
students and teachers, such as--
``(A) riparian forest buffer restoration; and
``(B) volunteer water quality monitoring at schools;
``(7) provision of a Chesapeake Bay or stream outdoor
educational experience; or
``(8) development of distance learning or other courses or
workshops that are acceptable in all Bay Watershed States and
apply throughout the Chesapeake Bay watershed.
``(e) Required Elements of Program.--In carrying out the
Program, the Secretary shall--
``(1) solicit applications for projects;
``(2) select suitable projects from among the projects
proposed;
``(3) supervise projects;
``(4) evaluate the results of projects; and
``(5) disseminate information on the effectiveness and
feasibility of the practices, methods, and techniques
addressed by the projects.
``(f) Solicitation of Applications.--Not later than 90 days
after the date on which amounts are first made available to
carry out this part, and each year thereafter, the Secretary
shall publish a notice of solicitation for applications for
grants under the Program that specifies the information to be
included in each application.
``(g) Applications.--To be eligible to receive a grant
under the Program, an eligible institution shall submit an
application to the Secretary at such time, in such form, and
containing such information as the Secretary may require.
``(h) Priority in Selection of Projects.--In making grants
under the Program, the Secretary shall give priority to an
applicant that proposes a project that will develop--
``(1) a new or significantly improved environmental
education practice, method, or technique, in multiple
disciplines, or a program that assists appropriate entities
and individuals in meeting Federal or State academic
standards relating to environmental education;
``(2) an environmental education practice, method, or
technique that may have wide application; and
``(3) an environmental education practice, method, or
technique that addresses a skill or scientific field
identified as a priority by the Chesapeake Executive Council.
``(i) Maximum Amount of Grants.--Under the Program, the
maximum amount of a grant shall be $50,000.
``(j) Notification.--Not later than 3 days before making a
grant under this part, the Secretary shall provide
notification of the grant to the appropriate committees of
Congress.
``(k) Regulations.--Not later than 1 year after the date of
enactment of the Chesapeake Bay Environmental Education Pilot
Program Act, the Secretary shall promulgate regulations
concerning implementation of the Program.
[[Page S8956]]
``SEC. 4403. EVALUATION AND REPORT.
``(a) Evaluation.--Not later than December 31, 2009, the
Secretary shall enter into a contract with an entity that is
not the recipient of a grant under this part to conduct a
detailed evaluation of the Program. In conducting the
evaluation, the Secretary shall determine whether the quality
of content, delivery, and outcome of the Program warrant
continued support of the Program.
``(b) Report.--Not later than December 31, 2010, the
Secretary shall submit a report to the appropriate committees
of Congress containing the results of the evaluation.
``SEC. 4404. AUTHORIZATION OF APPROPRIATIONS.
``(a) In General.--There is authorized to be appropriated
to carry out this part $6,000,000 for each of fiscal years
2006 through 2009.
``(b) Administrative Expenses.--Of the amounts made
available under subsection (a) for each fiscal year, not more
than 10 percent may be used for administrative expenses.''.
S. 1493
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 ``Chesapeake Bay Watershed
Forestry Program Act of 2005''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) trees and forests are critical to the long-term health
and proper ecological functioning of the Chesapeake Bay and
the Chesapeake Bay watershed;
(2) the Chesapeake Bay States are losing forest land to
urban and suburban growth at a rate of nearly 100 acres per
day;
(3) the Forest Service has a vital role to play in
assisting States, local governments, and nonprofit
organizations in carrying out forest conservation,
restoration, and stewardship projects and activities; and
(4) existing programs do not ensure the support necessary
to meet Chesapeake Bay forest goals.
(b) Purposes.--The purposes of this Act are--
(1) to expand and strengthen cooperative efforts to
protect, restore, and manage forests in the Chesapeake Bay
watershed; and
(2) to contribute to the achievement of the goals of the
Chesapeake Bay Agreement.
SEC. 3. DEFINITIONS.
In this Act:
(1) Chesapeake bay agreement.--The term ``Chesapeake Bay
Agreement'' means the formal, voluntary agreements--
(A) executed to achieve the goal of restoring and
protecting the Chesapeake Bay ecosystem and the living
resources of the Chesapeake Bay ecosystem; and
(B) signed by the Council.
(2) Chesapeake bay state.--The term ``Chesapeake Bay
State'' means each of the States of Delaware, Maryland, New
York, Pennsylvania, Virginia, and West Virginia and the
District of Columbia.
(3) Coordinator.--The term ``Coordinator'' means the
Coordinator of the program designated under section
4(b)(1)(B).
(4) Council.--The term ``Council'' means the Chesapeake Bay
Executive Council.
(5) Program.--The term ``program'' means the Chesapeake Bay
watershed forestry program carried out under section 4(a).
(6) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture, acting through the Chief of the Forest
Service and the Coordinator.
SEC. 4. CHESAPEAKE BAY WATERSHED FORESTRY PROGRAM.
(a) In General.--The Secretary shall carry out a Chesapeake
Bay watershed forestry program under which the Secretary
shall make grants and provide technical assistance to
eligible entities to restore and conserve forests in the
Chesapeake Bay watershed, including grants and assistance--
(1) to promote forest conservation, restoration, and
stewardship efforts in urban, suburban, and rural areas of
the Chesapeake Bay watershed;
(2) to accelerate the restoration of riparian forest
buffers in the Chesapeake Bay watershed;
(3) to assist in developing and carrying out projects and
partnerships in the Chesapeake Bay watershed;
(4) to promote the protection and sustainable management of
forests in the Chesapeake Bay watershed;
(5) to develop communication and education resources that
enhance public understanding of the value of forests in the
Chesapeake Bay watershed;
(6) to conduct research, assessment, and planning
activities to restore and protect forest land in the
Chesapeake Bay watershed; and
(7) to contribute to the achievement of the goals of the
Chesapeake Bay Agreement.
(b) Office; Coordinator.--
(1) In general.--The Secretary shall--
(A) maintain an office within the Forest Service to carry
out the program; and
(B) designate an employee of the Forest Service as
Coordinator of the program.
(2) Duties.--As part of the program, the Coordinator, in
cooperation with the Secretary and the Chesapeake Bay
Program, shall--
(A) provide grants and technical assistance to restore and
protect forests in the Chesapeake Bay watershed;
(B) enter into partnerships to carry out forest restoration
and conservation activities at a watershed scale using the
resources and programs of the Forest Service;
(C) in collaboration with other units of the Forest
Service, other Federal agencies, and State forestry agencies,
carry out activities that contribute to the goals of the
Chesapeake Bay Agreement;
(D) work with units of the National Forest System in the
Chesapeake Bay watershed to ensure that the units are managed
in a manner that--
(i) protects water quality; and
(ii) sustains watershed health;
(E) represent the Forest Service in deliberations of the
Chesapeake Bay Program; and
(F) support and collaborate with the Forestry Work Group
for the Chesapeake Bay Program in planning and implementing
program activities.
(c) Eligible Entities.--To be eligible to receive
assistance under the program, an entity shall be--
(1) a Chesapeake Bay State;
(2) a political subdivision of a Chesapeake Bay State;
(3) a university or other institution of higher education;
(4) an organization operating in the Chesapeake Bay
watershed that is described in section 501(c) of the Internal
Revenue Code of 1986 and is exempt from taxation under
section 501(a) of that Code; or
(5) any other person in the Chesapeake Bay watershed that
the Secretary determines to be eligible.
(d) Grants.--
(1) In general.--The Secretary shall make grants to
eligible entities under the program to carry out projects to
protect, restore, and manage forests in the Chesapeake Bay
watershed.
(2) Federal share.--The Federal share of a grant made under
the program shall not exceed 75 percent, as determined by the
Secretary.
(3) Types of projects.--The Secretary may make a grant to
an eligible entity for a project in the Chesapeake Bay
watershed that--
(A) improves habitat and water quality through the
establishment, protection, or stewardship of riparian or
wetland forests or stream corridors;
(B) builds the capacity of State forestry agencies and
local organizations to implement forest conservation,
restoration, and stewardship actions;
(C) develops and implements watershed management plans
that--
(i) address forest conservation needs; and
(ii) reduce urban and suburban runoff;
(D) provides outreach and assistance to private landowners
and communities to restore or conserve forests in the
watershed;
(E) implements communication, education, or technology
transfer programs that broaden public understanding of the
value of trees and forests in sustaining and restoring the
Chesapeake Bay watershed;
(F) coordinates and implements community-based watershed
partnerships and initiatives that--
(i) focus on--
(I) the expansion of the urban tree canopy; and
(II) the restoration or protection of forest land; or
(ii) integrate the delivery of Forest Service programs for
restoring or protecting watersheds;
(G) provides enhanced forest resource data to support
watershed management;
(H) enhances upland forest health to reduce risks to
watershed function and water quality; or
(I) conducts inventory assessment or monitoring activities
to measure environmental change associated with projects
carried out under the program.
(4) Chesapeake bay watershed foresters.--Funds made
available under section 6 may be used by a Chesapeake Bay
State to employ a State watershed forester to work with the
Coordinator to carry out activities and watershed projects
relating to the program.
(e) Study.--
(1) In general.--The Secretary, in consultation with the
Council, shall conduct a study of urban and rural forests in
the Chesapeake Bay watershed, including--
(A) an evaluation of the state, and threats to the
sustainability, of forests in the Chesapeake Bay watershed;
(B) an assessment of forest loss and fragmentation in the
Chesapeake Bay watershed;
(C) an identification of forest land within the Chesapeake
Bay watershed that should be restored or protected; and
(D) recommendations for expanded and targeted actions or
programs needed to achieve the goals of the Chesapeake Bay
Agreement.
(2) Report.--Not later than 1 year after amounts are first
made available under section 6, the Secretary shall submit to
the Committee on Agriculture of the House of Representatives
and the Committee on Agriculture, Nutrition, and Forestry of
the Senate a report that describes the results of the study.
SEC. 5. WATERSHED FORESTRY RESEARCH PROGRAM.
(a) In General.--The Secretary, in cooperation with the
Council, shall establish a watershed forestry research
program for the Chesapeake Bay watershed.
(b) Administration.--In carrying out the watershed forestry
research program established under subsection (a), the
Secretary shall--
[[Page S8957]]
(1) use a combination of applied research, modeling,
demonstration projects, implementation guidance, strategies
for adaptive management, training, and education to meet the
needs of the residents of the Chesapeake Bay States for
managing forests in urban, developing, and rural areas;
(2) solicit input from local managers and Federal, State,
and private researchers, with respect to air and water
quality, social and economic implications, environmental
change, and other Chesapeake Bay watershed forestry issues in
urban and rural areas;
(3) collaborate with the Chesapeake Bay Program Scientific
and Technical Advisory Committee and universities in the
Chesapeake Bay States to--
(A) address issues in the Chesapeake Bay Agreement; and
(B) support modeling and informational needs of the
Chesapeake Bay program; and
(4) manage activities of the watershed forestry research
program in partnership with the Coordinator.
(c) Watershed Forestry Research Strategy.--Not later than 1
year after the date of enactment of this Act, the Secretary,
in collaboration with the Northeastern Forest Research
Station and the Southern Forest Research Station, shall
submit to Congress a strategy for research to address
Chesapeake Bay watershed goals, including recommendations for
implementation and leadership of the program.
SEC. 6. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out the
program $3,500,000 for each of fiscal years 2006 through
2012, of which--
(1) not more than $500,000 shall be used to conduct the
study required under section 4(e); and
(2) not more than $1,000,000 for any fiscal year shall be
used to carry out the watershed forestry research program
under section 5.
SEC. 7. REPORT.
Not later than December 31, 2007, and annually thereafter,
the Secretary shall submit to Congress a comprehensive report
that describes the costs, accomplishments, and outcomes of
the activities carried out under the program.
S. 1494
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 ``NOAA Chesapeake Bay
Watershed Monitoring, Education, Training, and Restoration
Act''.
SEC. 2. CHESAPEAKE BAY OFFICE PROGRAMS.
Section 307 of the National Oceanic and Atmospheric
Administration Authorization Act of 1992 (15 U.S.C. 1511d) is
amended--
(1) by redesignating subsections (d) and (e), as
subsections (h) and (i), respectively; and
(2) by inserting after subsection (c), the following new
subsections:
``(d) Chesapeake Bay Integrated Observing System.--
``(1) Establishment.--
``(A) In general.--Not later than 1 year after the date of
enactment of the NOAA Chesapeake Bay Watershed Monitoring,
Education, Training, and Restoration Act, the Director shall
collaborate with scientific and academic institutions,
Federal agencies, State and nongovernmental organizations,
and other constituents located in the Chesapeake Bay
watershed to establish a Chesapeake Bay Integrated Observing
System (in this section referred to as the `System').
``(B) Purpose.--The purpose of the System is to provide
information needed to restore the health of the Chesapeake
Bay, on such topics as land use, environmental quality of the
Bay and its shoreline, coastal erosion, ecosystem health and
performance, aquatic living resources and habitat conditions,
and weather, tides, currents, and circulation.
``(C) Elements of system.--The System shall coordinate
existing monitoring and observing activities in the
Chesapeake Bay watershed, identify new data collection needs,
and deploy new technologies to provide a complete set of
environmental information for the Chesapeake Bay, including
the following activities:
``(i) Collecting and analyzing the scientific information
related to the Chesapeake Bay that is necessary for the
management of living marine resources and the marine habitat
associated with such resources.
``(ii) Managing and interpreting the information described
in clause (i).
``(iii) Organizing the information described in clause (i)
into products that are useful to policy makers, resource
managers, scientists, and the public.
``(iv) Developing or supporting the development of an
Internet-based information system for integrating,
interpreting, and disseminating coastal information,
products, and forecasts concerning the Chesapeake Bay
watershed related to--
``(I) climate;
``(II) land use;
``(III) coastal pollution and environmental quality;
``(IV) coastal hazards;
``(V) ecosystem health and performance;
``(VI) aquatic living resources and habitat conditions and
management;
``(VII) economic and recreational uses; and
``(VIII) weather, tides, currents, and circulation that
affect the distribution of sediments, nutrients, organisms,
coastline erosion, and related physical and chemical events
and processes.
``(D) Agreements to provide data, information, and
support.--The Director may enter into agreements with other
entities of the National Oceanic and Atmospheric
Administration, other Federal, State, or local government
agencies, academic institutions, or organizations described
in subsection (e)(2)(A)(i) to provide and interpret data and
information, and may provide appropriate support to such
agencies, institutions, or organizations to fulfill the
purposes of the System.
``(E) Agreements relating to information products.--The
Director may enter into grants, contracts, and interagency
agreements with eligible entities for the collection,
processing, analysis, and interpretation of data and
information and for electronic publication of information
products.
``(e) Chesapeake Bay Watershed Education and Training
Program.--
``(1) Establishment.--
``(A) In general.--The Director, in cooperation with the
Chesapeake Executive Council, shall establish a Chesapeake
Bay watershed education and training program.
``(B) Purposes.--The program established under subparagraph
(A) shall continue and expand the Chesapeake Bay watershed
education programs offered by the Chesapeake Bay Office for
the purposes of--
``(i) improving the understanding of elementary and
secondary school students and teachers of the living
resources of the ecosystem of the Chesapeake Bay;
``(ii) providing community education to improve watershed
protection; and
``(iii) meeting the educational goals of the Chesapeake
2000 agreement.
``(2) Grant program.--
``(A) Authorization.--The Director is authorized to award
grants to pay the Federal share of the cost of a project
described in subparagraph (C) to--
``(i) a nongovernmental organization in the Chesapeake Bay
watershed that is described in section 501(c) of the Internal
Revenue Code of 1986 and is exempt from taxation under
section 501(a) of that Code;
``(ii) a consortium of institutions described in clause
(i);
``(iii) an elementary or secondary school located within
the Chesapeake Bay watershed;
``(iv) a teacher at a school described in clause (iii); or
``(v) a department of education of a State if any part of
such State is within the Chesapeake Bay watershed.
``(B) Criteria.--The Director shall consider, in awarding
grants under this subsection, the experience of the applicant
in providing environmental education and training projects
regarding the Chesapeake Bay watershed to a range of
participants and in a range of settings.
``(C) Functions and activities.--Grants awarded under this
subsection may be used to support education and training
projects that--
``(i) provide classroom education, including the use of
distance learning technologies, on the issues, science, and
problems of the living resources of the Chesapeake Bay
watershed;
``(ii) provide meaningful outdoor experience on the
Chesapeake Bay, or on a stream or in a local watershed of the
Chesapeake Bay, in the design and implementation of field
studies, monitoring and assessments, or restoration
techniques for living resources;
``(iii) provide professional development for teachers
related to the science of the Chesapeake Bay watershed and
the dissemination of pertinent education materials oriented
to varying grade levels;
``(iv) demonstrate or disseminate environmental educational
tools and materials related to the Chesapeake Bay watershed;
``(v) demonstrate field methods, practices, and techniques
including assessment of environmental and ecological
conditions and analysis of environmental problems; and
``(vi) develop or disseminate projects designed to--
``(I) enhance understanding and assessment of a specific
environmental problem in the Chesapeake Bay watershed or of a
goal of the Chesapeake Bay Program;
``(II) protect or restore living resources of the
Chesapeake Bay watershed; or
``(III) educate local land use officials and decision
makers on the relationship of land use to natural resource
and watershed protection.
``(D) Federal share.--The Federal share of the cost of a
project funded with a grant awarded under this subsection
shall not exceed 75 percent of the total cost of that
project.
``(f) Stock Enhancement and Habitat Restoration Program.--
``(1) Establishment.--
``(A) In general.--Not later than 1 year after the date of
enactment of the NOAA Chesapeake Bay Watershed Monitoring,
Education, Training, and Restoration Act, the Director, in
cooperation with the Chesapeake Executive Council, shall
establish a Chesapeake Bay watershed stock enhancement and
habitat restoration program.
``(B) Purpose.--The purpose of the program established in
subparagraph (A) is to support the restoration of oysters and
submerged aquatic vegetation in the Chesapeake Bay.
``(2) Activities.--To carry out the purpose of the program
established under paragraph (1)(A), the Director is
authorized to enter into grants, contracts, and cooperative
agreements with an eligible entity to support--
``(A) the establishment of oyster hatcheries;
[[Page S8958]]
``(B) the establishment of submerged aquatic vegetation
propagation programs; and
``(C) other activities that the Director determines are
appropriate to carry out the purposes of such program.
``(g) Chesapeake Bay Aquaculture Education.--The Director
is authorized to make grants and enter into contracts with an
institution of higher education, including a community
college, for the purpose of--
``(1) supporting education in Chesapeake Bay aquaculture
sciences and technologies; and
``(2) developing aquaculture processes and technologies to
improve production, efficiency, and sustainability of
disease-free oyster spat and submerged aquatic vegetation.''.
SEC. 3. REPORT.
Section 307(b)(7) of the National Oceanic and Atmospheric
Administration Authorization Act of 1992 (15 U.S.C.
1511d(b)(7)), is amended to read as follows:
``(7) submit a biennial report to the Congress and the
Secretary of Commerce with respect to the activities of the
Office, including--
``(A) a description of the progress made in protecting and
restoring the living resources and habitat of the Chesapeake
Bay;
``(B) a description of each grant awarded under this
section since the submission of the most recent biennial
report, including the amount of such grant and the activities
funded with such grant; and
``(C) an action plan consisting of--
``(i) a list of recommended research, monitoring, and data
collection activities necessary to continue implementation of
the strategy described in paragraph (2); and
``(ii) proposals for--
``(I) continuing any new National Oceanic and Atmospheric
Administration activities in the Chesapeake Bay; and
``(II) integration of those activities with the activities
of the partners in the Chesapeake Bay Program to meet the
commitments of the Chesapeake 2000 agreement and subsequent
agreements.''.
SEC. 4. DEFINITIONS.
Subsection (h) of section 307 of the National Oceanic and
Atmospheric Administration Authorization Act of 1992 (15
U.S.C. 1511d), as redesignated by section 2(1), is amended to
read as follows:
``(h) Definitions.--In this section:
``(1) Chesapeake executive council.--The term `Chesapeake
Executive Council' means the representatives from the
Commonwealth of Virginia, the State of Maryland, the
Commonwealth of Pennsylvania, the Environmental Protection
Agency, the District of Columbia, and the Chesapeake Bay
Commission, who are signatories to the Chesapeake Bay
Agreement, and any future signatories to that Agreement.
``(2) Chesapeake 2000 agreement.--The term `Chesapeake 2000
agreement' means the agreement between the United States,
Maryland, Pennsylvania, Virginia, the District of Columbia,
and the Chesapeake Bay Commission entered into on June 28,
2000.
``(3) Eligible entity.--Except as provided in subsection
(c), the term `eligible entity' means--
``(A) the government of a State in the Chesapeake Bay
watershed or the government of the District of Columbia;
``(B) the government of a political subdivision of a State
in the Chesapeake Bay watershed, or a political subdivision
of the government of the District of Columbia;
``(C) an institution of higher education, including a
community college;
``(D) a nongovernmental organization in the Chesapeake Bay
watershed that is described in section 501(c) of the Internal
Revenue Code of 1986 and is exempt from taxation under
section 501(a) of that Code; or
``(E) a private entity that the Director determines to be
appropriate.''.
SEC. 5. AUTHORIZATION OF APPROPRIATIONS.
Subsection (i) of section 307 of the National Oceanic and
Atmospheric Administration Authorization Act of 1992 (15
U.S.C. 1511d), as redesignated by section 2(1), is amended to
read as follows:
``(i) Authorization of Appropriations.--
``(1) FY 2002 through 2005.--There are authorized to be
appropriated to the Department of Commerce for the Chesapeake
Bay Office $6,000,000 for each of the fiscal years 2002
through 2005.
``(2) FY 2006 through 2010.--There are authorized to be
appropriated to the Department of Commerce for the Chesapeake
Bay Office $26,000,000 for each of the fiscal years 2006
through 2010. Of the amount appropriated pursuant to such
authorization of appropriations--
``(A) for each of the fiscal years 2006 through 2010,
$1,000,000 is authorized to be made available to carry out
the provisions of subsection (d);
``(B) for each of the fiscal years 2006 through 2010,
$6,000,000 is authorized to be made available to carry out
the provisions of subsection (e);
``(C) for each of the fiscal years 2006 through 2010,
$10,000,000 is authorized to be made available to carry out
the provisions of subsection (f);
``(D) for each of the fiscal years 2006 through 2010,
$1,000,000 to carry out the provisions of subsection (g).''.
____
Chesapeake Bay Foundation,
June 28, 2005.
Senator Paul S. Sarbanes,
U.S. Senate,
Washington, DC.
Dear Senator Sarbanes: The Chesapeake Bay Foundation (CBF)
wishes to submit this letter in support of the package of
proposed legislation that you have prepared to further the
ongoing efforts to restore the Chesapeake Bay and the
tributaries that feed it. We believe that the series of
legislative proposals you are submitting, in conjunction with
the infusion of new and critical federal funding support, are
key elements of reinvigorating the Bay restoration effort.
The bills we have reviewed and support are the following:
The Chesapeake Bay Watershed Nutrient Removal Assistance
Act. A bill to amend the Federal Water Pollution Control Act
to provide assistance for nutrient removal technologies to
States in the Chesapeake Bay watershed.
Nitrogen and phosphorus pollution are the two largest
problems threatening the water quality of the Chesapeake Bay
and its rivers and streams. Consequently, in the Chesapeake
2000 Agreement (C2K), the Bay states committed to reduce
nutrient pollution (nitrogen and phosphorus pollution) by
millions of pounds each year. One of the most effective tools
in reducing this pollution is upgrading sewage treatment
plants with modern, nutrient pollution removal technologies.
Pennsylvania, Maryland and Virginia have all provided new and
additional funding to assist in the implementation of these
technologies; however, proposed cuts to existing federal
funds designated for wastewater treatment upgrades
jeopardizes the success of these state initiatives.
The federal government must make a greater commitment to
funding. Grant funding, as proposed in this bill, to assist
in the design, construction, and operation of these
technologies is a critical part of successfully achieving the
C2K pollution reduction goals and restoring the Bay.
The Chesapeake Bay Program Reauthorization and
Environmental Accountability Act of 2005. A bill to amend the
Federal Water Pollution Control Act to require environmental
accountability and reporting and to reauthorize the
Chesapeake Bay Program.
There has been much criticism and questioning in recent
years about the implementation of the multijurisdictional
Chesapeake Bay Program. There is no doubt that the members of
the Program, from state partners to the federal Environmental
Protection Agency (EPA), have not moved forward as
aggressively as the resource demands, failing to meet
deadlines for water quality improvement actions that the
signatories themselves established in C2K. In contrast, the
Program has provided essential technical data and the
underlying science critical to our understanding of the
problems facing the Bay and the watershed rivers and streams.
The Chesapeake Bay Program Reauthorization and Environmental
Accountability Act of 2005 places a clear mandate on EPA to
develop and implement a plan for achieving the nutrient
pollution reduction goals of C2K and measure progress through
actual water quality improvements. The legislation also
requires Bay watershed states to report annually on their
progress implementing the plan. Finally, the legislation
provides for a much needed assessment by the Office of
Management and Budget on the potential benefits of federal
monies dedicated to the restoration effort combining into a
single fund. This assessment complements the current
financing authority efforts of the C2K signatories, an effort
looking to develop a vehicle to not only better leverage
state and federal monies, but also obtain additional funds.
Absent a substantial increase in investment in the Bay,
restoration efforts are likely to fail.
The Chesapeake Bay Environmental Education Pilot Program
Act: A bill to amend the Elementary and Secondary Education
Act of 1965 to establish a pilot program to make grants to
eligible institutions to develop, demonstrate, or disseminate
information on practices, methods, or techniques relating to
environmental education and training in the Chesapeake Bay
watershed.
We cannot expect the next generation to be responsible
stewards of the Bay and the rivers and streams that
crisscross its watershed unless we invest in education. We
must provide our youth with the knowledge and tools that
enable them to choose to be stewards of our natural
resources. C2K recognized this need and set a goal of
providing every student in the Bay watershed a meaningful
field experience before he or she graduates from high school.
One single experience alone with the Bay or a river or
stream, however, is not adequate to educate students on
environmental issues and instill in them a sense of
stewardship. The Chesapeake Bay Environmental Education Pilot
Program Act will help to accomplish this goal by providing
much needed funding for designing and implementing
environmental curricula, participation in on-the-ground
restoration projects, interactive opportunities with among
students, and outdoor educational experiences. These tools
and others are key to increasing public environmental
awareness and developing educated and responsible stewards of
the Bay.
The NOAA Chesapeake Bay Watershed Monitoring, Education,
Training and Restoration Act. A bill to establish programs to
enhance protection of the Chesapeake Bay, and for other
purposes.
This legislation proposes a series of important initiatives
from the integration of data
[[Page S8959]]
to the establishment of an oyster and submerged aquatic
vegetation restoration program. In addition, a critical
element is the establishment of the watershed education and
training program, which complements the initiatives contained
in the Chesapeake Bay Environmental Education Pilot Program
Act.
The Chesapeake Bay Watershed Forestry Program Act of 2005.
A bill to require the Secretary of Agriculture to establish a
program to expand and strengthen cooperative efforts to
restore and protect forests in the Chesapeake Bay watershed,
and for other purposes.
Forests provide habitat for wildlife, filter polluted
runoff, and help moderate stream water temperature. Because
of their importance in improving water quality, the Bay
states have committed to restoring thousands of acres of
forested buffers in the watershed. In addition, they are one
of the most cost-effective ways to reduce nitrogen and
phosphorus pollutions. Yet, the Chesapeake Bay watershed is
continuing to lose forests, in both urban and rural areas, at
alarming rates. Preservation and restoration of forests and
forest buffers, as encouraged by this legislation, are
critical elements in Bay restoration efforts.
This package of legislative initiatives will do much to
strengthen and reinvigorate our efforts to Save the Bay. CBF
is grateful to you, Senator, for your constant and unwavering
commitment to the restoration of waters of the Bay watershed
and for your long and distinguished leadership on these
issues.
If CBF can provide you with any additional assistance with
the important initiatives evidenced by these bills, please
let me know.
With sincere appreciation for all you have done for the
Bay, I am,
Very truly yours,
Roy A. Hoagland,
Vice President, Environmental
Protection & Restoration.
____
Chesapeake Bay Commission,
July 5, 2005.
Hon. Paul Sarbanes,
Senate Office Building,
Washington, DC.
Dear Senator Sarbanes: Federal funding has played a crucial
role in supporting the Chesapeake Bay restoration. Thanks in
large part to your efforts, federal funds have supported
nearly one-fifth of the pojects currently underway and served
as a catalyst for countless more.
In October 2004, the Chesapeake Bay Watershed Blue Ribbon
Finance Panel issued a report that underscored the enormous
challenge facing the Chesapeake and concluded, `` . . .
restoring the Chesapeake Bay will require a large-scale
national and regional approach, capitalized by federal and
state governments and directed according to a watershed-wide
strategy.'' The report called for a $15 billion federal and
state investment over the next four years to restore the Bay.
While $15 billion is an enormous sum, failure to take action
and to make the investments needed to restore the health of
our nation's largest and most productive estuary will be even
more costly. A commitment of this size will require the
substantial involvement of all partners, including the
federal, state, and local governments and the private sector.
With this financial need firmly in focus, we are writing to
convey our tri-state Commission's strong support for your
Chesapeake Bay legislative package. Together, these five
bills promote the kinds of enhanced funding and technical
assistance that are needed to meet the goals of the,
Chesapeake 2000 agreement (C2K) and restore the Bay. We hope
that the 109th Congress will join us in our support of:
1. The Chesapeake Bay Program Reauthorization and
Environmental Accountability Act.
2. The Chesapeake Bay Watershed Nutrient Removal Assistance
Act
3. The Chesapeake Bay Environmental Education Pilot Program
Act
4. The Chesapeake Bay Watershed Forestry Act
5. The NOAA Chesapeake Bay Watershed Monitoring, Education,
Training, and Restoration Act
The Chesapeake Bay Watershed Nutrient Removal Assistance
Act is of particular interest to this Commission. As a
signatory to C2K, we have committed to reducing the Bay's
nitrogen loads by 110 million pounds. Meeting this goal will
restore the Bay waters to conditions that are clean, clear,
and productive. Last December, the Commission issued a report
entitled ``Cost-Effective Strategies for the Bay''; of the
six most cost-effective strategies listed in that report,
upgrading wastewater treatment plants is Number One. The Act
provides grants to upgrade the major wastewater treatment
plants in the Bay's six-state watershed with modern
nutrient removal technologies. It will allow the region to
demonstrate that state-of-the-art nutrient removal is
possible on a large scale. It will result in the removal
of as much as 30 million pounds of nitrogen each year, or
30 percent of the reduction that is needed. Furthermore,
the benefits from upgrading sewage treatment plants have
an immediate result on the Bay's water quality, unlike
other methods that primarily affect nutrients in ground
water and may take years to produce results in the Bay.
Only the Federal government is in the position to trigger
such remarkable reductions. It is an opportunity that must
not be ignored.
Reauthorizing the Environmental Protection Agency's
Chesapeake Bay Program is critical to the success of efforts
to restore the Bay. This program provides support and
coordination for Federal, state, and local efforts developing
strategies and actions plans, assessing progress throughout
the watershed, implementing projects to protect the Bay and
its living resources, and communicating with the public.
The Chesapeake Bay Watershed Forestry Act will help to
control pollution by establishing forests and riparian
buffers that can filter and absorb sediment and nutrient
runoff while providing valuable habitat for animals and birds
and food and shelter for fish. Enhanced support for the Bay
Program of the Forest Service will ramp up its ability to
provide interstate coordination, technical assistance, and
forest assessment and planning services that are otherwise
limited or unavailable in our region.
Finally, let us emphasize the important support for
education that this package provides. Sustaining our hard-won
progress in the restoration of the Bay will ultimately rest
in the hands of citizens and communities throughout the
watershed. Expanding environmental education and training
opportunities for a variety of ages, from kindergarten to
adult community education and outreach, will lead to a
healthier Bay and to a more educated and informed citizenry,
yet these kinds of activities are woefully underfunded. The
monies provided by the Chesapeake Bay Environmental Education
Pilot Program Act and the NOAA Chesapeake Bay Watershed
Monitoring, Education, Training, and Restoration Act will
substantially improve our ability to keep our commitments on
track and reach the C2K goals.
The federal government has been a strong partner in efforts
to restore the Bay, and your five-bill package maintains and
enhances the federal commitment to the Bay. The Commission
commends your dedication now and over the past two decades to
the health of the Chesapeake Bay. Please instruct us as to
how we can further support these measures.
Sincerely,
Senator Mike Waugh,
Chairman.
______
By Mr. McCAIN (for himself and Mr. Coburn):
S. 1495. A bill to prohibit Federal agencies from obligating funds
for appropriations earmarks included only in congressional reports, and
for other purposes; to the Committee on Homeland Security and
Governmental Affairs.
Mr. McCAIN. Mr. President, the bill I am introducing today, along
with my friend from Oklahoma, Mr. Coburn, is very simple. The
Obligation of Funds Transparency Act of 2005 would prohibit Federal
agencies from obligating funds which have been earmarked only in
congressional reports. This legislation is designed to help reign in
unauthorized, unrequested, run-of-the-mill pork barrel projects.
As my colleagues may know, report language does not have the force of
law. That fact has been lost when it comes to appropriations bills and
reports. It has become a standard practice to load up committee reports
with literally billions of dollars in unrequested, unauthorized, and
wasteful pork barrel projects.
According to information compiled from the Congressional Research
Service (CRS), the total number of earmarks has grown from 4,126 in
fiscal year 1994 to 14,040 in fiscal year 2004. That's an increase of
240 percent. In terms of dollars, the earmarking has gone from $26.6
billion to $47.9 billion over the same period. The practice of
earmarking funds in appropriations bills has simply lurched out of
control.
At a conference in February, 2005, David Walker, the Comptroller
General of the United States, said this: ``If we continue on our
present path, we'll see pressure for deep spending cuts or dramatic tax
increases. GAO's long-term budget simulations paint a chilling picture.
If we do nothing, by 2040 we may have to cut federal spending by more
than half or raise federal taxes by more than two and a half times to
balance the budget. Clearly, the status quo is both unsustainable and
difficult choices are unavoidable. And the longer we wait, the more
onerous our options will become and the less transition time we will
have.''
Is that really the kind of legacy we should leave to future
generations of Americans?
Referring to our economic outlook, Federal Reserve Chairman Alan
Greenspan testified before Congress that: ``(T)he dimension of the
challenge is enormous. The one certainty is that the resolution of this
situation will require difficult choices and that the future
performance of the economy will depend on those choices. No changes
will be easy, as they all will involve lowering claims on resources or
raising
[[Page S8960]]
financial obligations. It falls on the Congress to determine how best
to address the competing claims.''
It falls on the Congress my friends. The head of the U.S.
Government's chief watchdog agency and the Nation's chief economist
agree--we are in real trouble.
We simply must start making some very tough decisions around here if
we are serious about improving our fiscal future. We need to be
thinking about the future of America and the future generations who are
going to be paying the tab for our continued spending. It is simply not
fiscally responsible for us to continue to load up appropriations bills
with wasteful and unnecessary spending, and good deals for special
interests and their lobbyists. We have had ample opportunities to
tighten our belts in this town in recent years, and we have taken a
pass each and every time. We can't put off the inevitable any longer.
Here is the stark reality of our fiscal situation. According to the
Government Accountability Office, the unfunded federal financial
burden, such as public debt, future Social Security, Medicare, and
Medicaid payments, totals more than $40 trillion or $140,000 per man,
woman and child. To put this in perspective, the average mortgage,
which is often a family's largest liability, is $124,000--and that is
often borne by the family breadwinners, not the children too. But,
instead of fixing the problem, and fixing it will not be easy, we only
succeeded in making it bigger, more unstable, more complicated, and
much, much more expensive.
The Committee for Economic Development, the Concord Coalition, and
the Center on Budget and Policy Priorities jointly stated that,
``without a change in current (fiscal) policies, the federal government
can expect to run a cumulative deficit of $5 trillion over the next 10
years.'' They also stated that, ``after the baby boom generation starts
to retire in 2008, the combination of demographic pressures and rising
health care costs will result in the costs of Medicare, Medicaid and
Social Security growing faster than the economy. We project that by the
time today's newborns reach 40 years of age, the cost of these three
programs as a percentage of the economy will more than double--from 8.5
percent of the GDP to over 17 percent.
Additionally, the Congressional Budget Office has issued warnings
about the dangers that lie ahead if we continue to spend in this
manner. In a report issued at the beginning of the year, CBO stated
that, because of rising health care costs and an aging population,
``spending on entitlement programs--especially Medicare, Medicaid and
Social Security--will claim a sharply increasing share ofthe nation's
economic output over the coming decades.'' The report went on to say
that, ``unless taxation reaches levels that are unprecedented in the
United States, current spending policies will probably be financially
unsustainable over the next 50 years. An ever-growing burden of federal
debt held by the public would have a corrosive. . . effect on the
economy.''
Where is it going to end? We have to face the facts, and one fact is
that we can't continue to spend taxpayer's dollars on wasteful,
unnecessary pork barrel projects or cater to wealthy corporate special
interests any longer. The American people won't stand for it, and they
shouldn't--they deserve better treatment from us. I urge my colleagues
to support this important legislation.
______
By Mr. ALLARD (for himself and Mr. Salazar):
S. 1498. A bill to direct the Secretary of the Interior to convey
certain water distribution facilities to the Northern Colorado Water
Conservancy District; to the Committee on Energy and Natural Resources.
Mr. ALLARD. Mr. President, the Northern Colorado Water Conservancy
District has contacted me, along with other members of the Colorado
Congressional Delegation, seeking the introduction and passage of
Federal legislation authorizing the title transfer of specific features
of the Colorado-Big Thompson Project from the Untied States to
Northern. This title transfer will be similar to a bill that I carried
during the 106th Congress, which transferred other Bureau of Rec
facilities to Northern. The projects involved in the proposed title
transfer are those single-purpose water conveyance facilities used for
the distribution of water released from Carter Lake Reservoir: the St.
Vrain Supply Canal; the Boulder Feed Canal; the Boulder Creek Supply
Canal; and the South Platte Supply Canal.
The entire project, called the Colorado-Big Thompson Project, was
built from 1938 to 1957, and provides supplemental water to more than
30 cities and towns. The water is used to help irrigate over 600,000
acres of northeastern Colorado farmland.
The proposed legislation will divest Reclamation of all present and
future responsibility for and cost associated with the management,
operation, maintenance, repair, rehabilitation and replacement of, and
liability for the transferred facilities. This responsibility will
become that of the Northern Colorado Water Conservancy District.
The legislation will eliminate the duplication of efforts between the
District and Reclamation in issuing and administering crossing licenses
and other forms of permission to utilize the land on which the
facilities are located. Finally, the legislation will provide for
enhanced local control over water facilities that are not of national
importance, and allow these facilities to be used for more efficient
and effective water management. Local control, especially in the case
of matters in relation to water, has always been a major component of
my philosophy. I am proud to introduce this bill which will serve to
further that intent.
______
By Mr. BUNNING (for himself and Mr. McConnell):
S. 1499. A bill to amend the Federal Power Act to provide for
competitive and reliable electricity transmission in the Commonwealth
of Kentucky; to the Committee on Energy and Natural Resources.
Mr. BUNNING. Mr. President, I rise to introduce the Kentucky
Competitive Access Program (KCAP) bill that would allow Kentucky
electric distribution companies to purchase cheaper power. This means
lower rates for many Kentucky consumers served by the Tennessee Valley
Authority (TVA). I am pleased Senator McConnell has joined me in
introducing this bill.
Kentucky has some of the cheapest electric power available in the
Nation. However, some Kentucky consumers in TVA are paying higher
electricity rates than Kentucky consumers outside of TVA.
Kentucky electric distribution companies served by the TVA can not
provide their customers with access to Kentucky's inexpensive power.
This is because under existing federal law the Federal Energy
Regulatory Commission (FERC) has limited authority over TVA and can not
require it to transmit the cheaper power to most, if not all, of the
Kentucky distributors. The legislation removes this restriction and
provides the FERC with the authority to require TVA to transmit power
to all Kentucky distributors.
In addition to allowing Kentucky customers to access less expensive
power, the legislation would not harm TVA or result in higher rates to
TVA's remaining customers. The Kentucky distributors, in total,
constitute only about 6 percent of TVA's revenues and load. Further,
TVA is experiencing load growth of about 3 percent per year which
should quickly result in the replacement of any load lost in Kentucky.
Thus, the departure of some portion of the Kentucky distributors should
not result in any significant cost shift to remaining TVA system
customers.
All Kentuckians deserve to choose where they receive their power.
This bill will not only give them that choice, but it will also create
a more competitive environment among Kentucky distributors and allow
our businesses and residential consumers to keep more money in their
pockets.
______
By Mr. CORZINE:
S. 1502. A bill to clarify the applicability of State law to national
banks and Federal savings associations, and for other purposes; to the
Committee on Banking, Housing, and Urban Affairs.
Mr. CORZINE. Mr. President, I rise today to introduce legislation,
the Preservation of Federalism in Banking Act, to clarify the
relationship between
[[Page S8961]]
State consumer protection laws and national banks.
This legislation responds to a sweeping new rule issued by the Office
of the Comptroller of the Currency, the agency that regulates national
banks. The OCC's new rule gives the agency unprecedented authority to
pre-empt state laws, thereby shielding national banks and their non-
bank and state-chartered bank affiliates from many important consumer
protections. It also potentially limits the ability of states to
enforce many related laws. The most important immediate consequence of
the OCC rule has been the preemption of state anti-predatory lending
laws.
I feel strongly about the need to address predatory lending, which
can trap people in endless cycles of debt and escalating fees. Many
States, such as my own state of New Jersey, have enacted tough laws to
deal with the problem. Unfortunately, the OCC's ruling substantially
undermines these laws by regulatory fiat. That will leave many
consumers unprotected, and it shifts too many responsibilities to a
single agency here in Washington that is not equipped to handle them.
After all, according to its own website, the OCC ``does not have the
mandate to engage in consumer advocacy''.
Although the OCC has a long and successful record of regulating for
safety and soundness, it has little experience dealing with abusive
local practices, such as predatory lending. Believe it or not, the OCC
actually is proposing to handle all consumer complaints through a
single, lightly staffed call center in Houston. This is totally
unrealistic. Each year, State officials receive thousands of related
complaints, which usually are very local in nature. These officials are
at the forefront of the enforcement effort, identifying and combating
new practices as they arise. The OCC's system simply could not fill
this role without major changes.
The OCC rule also raises concerns about regulatory charter
competition, the viability of a broad range of State laws, and the
ability of consumers and State officials to seek remedies in court.
This concern is only reinforced by two other developments.
First is a general counsel opinion by the Office of Thrift
Supervision that attempts to extend federal preemption beyond a
thrift's corporate family. That effort would nullify the application of
state consumer protection laws over independent, third-party agents of
federal thrifts, and is particularly threatening to state insurance and
securities efforts.
And second is the FDIC's consideration of a rule that would allow
State-chartered banks the same preemptive privileges for out-of-State
branches as those of national banks. These two recent developments only
reinforce concerns of a ``race to the bottom'' scenario.
The OCC rule has provoked strong opposition from governors, attorneys
general, banking supervisors, and many consumer advocacy groups, not to
mention the public. The OCC received over 2,600 letters in response to
its rules, and more than 90 percent opposed them.
The Preservation of Federalism in Banking Act is a reasonable
response to the OCC rule. The bill will clarify that national banks
must comply with certain state consumer protection laws, such as anti-
predatory lending laws and privacy acts.
While the OCC has long had the statutory responsibility to regulate
the activities of national banks, it has never denied the ability of
States to protect their citizens. The OCC historically has used its
authority under the National Bank Act in a reasonable way to shield
national banks from State banking laws that intrude on the OCC's
congressionally-granted powers. While we should continue to support the
appropriate use of the agency's authority, it is important that we
immediately intervene to reverse the OCC's regulatory overreach and
prevent the agency from preemption all state consumer protection laws
and State authority to enforce related laws.
I ask unanimous consent that the text of the legislation be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1502
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 ``Preservation of Federalism
in Banking Act''.
TITLE I--NATIONAL BANKS
SEC. 101. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS
CLARIFIED.
(a) In General.--Chapter One of title LXII of the Revised
Statutes of the United States (12 U.S.C. 21 et seq.) is
amended by inserting after section 5136B the following new
section:
``SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NATIONAL
BANKS AND SUBSIDIARIES CLARIFIED.
``(a) State Consumer Laws of General Application.--
``(1) In general.--Notwithstanding any other provision of
Federal law, any consumer protection in State consumer law of
general application (including any law relating to unfair or
deceptive acts or practices, any consumer fraud law and
repossession, foreclosure, and collection) shall apply to any
national bank.
``(2) National bank defined.--For purposes of this section,
the term `national bank' includes any Federal branch
established in accordance with the International Banking Act
of 1978.
``(b) State Laws Related to Laws Used by National Banks for
Their Benefit.--When a national bank avails itself of a State
law for its benefit, all related consumer protections in
State law shall apply.
``(c) State Banking Laws Enacted Pursuant to Federal Law.--
``(1) In general.--Notwithstanding any other provision of
Federal law and except as provided in paragraph (2), any
State law that--
``(A) is applicable to State banks; and
``(B) was enacted pursuant to or in accordance with, and is
not inconsistent with, an Act of Congress, including the
Gramm-Leach-Bliley Act, the Consumer Credit Protection Act,
and the Real Estate Settlement Procedures Act, that
explicitly or by implication, permits States to exceed or
supplement the requirements of any comparable Federal law,
shall apply to any national bank.
``(2) Exceptions.--Paragraph (1) shall not apply with
respect to any State law if--
``(A) the State law discriminates against national banks;
or
``(B) State law is inconsistent with provisions of Federal
law other than this title LXII, but only to the extent of the
inconsistency (as determined in accordance with the provision
of the other Federal Law).
``(d) State Laws Protecting Against Predatory Mortgage
Loans.--To the extent not otherwise addressed in this
section, State laws providing greater protection in high cost
mortgage loans, however denominated, both in coverage and
content, than is provided under the Truth in Lending Act
(including the provisions amended by the Home Ownership and
Equity Protection Act of 1994) shall apply to any national
bank.
``(e) Comparable Federal Regulation Required.--In relation
to the regulation of consumer credit and deposit
transactions, the Comptroller may preempt State law pursuant
to this title only when there is a comparable Federal
statute, or regulations pursuant to a Federal statute other
than this title, expressly governing the activity, except in
relation to interest pursuant to section 5197.
``(f) No Negative Implications for Applicability of Other
State Laws.--No provision of this section shall be construed
as altering or affecting the applicability, to national
banks, of any State law which is not described in this
section.
``(g) Effect of Transfer of Transaction.--A transaction
that is not entitled to preemption at the time of the
origination of the transaction does not become entitled to
preemption under this title by virtue of its subsequent
acquisition by a national bank.
``(h) Denial of Preemption Not a Deprivation of a Civil
Right.--The preemption of any provision of the law of any
State with respect to any national bank shall not be treated
as a right, privilege, or immunity for purposes of section
1979 of the Revised Statutes of the United States (42 U.S.C.
1983).
``(i) Definition.--For purposes of this section, the terms
`includes' and `including' have the same meaning as in
section 3(t) of the Federal Deposit Insurance Act.''.
(b) Clerical Amendment.--The table of sections for chapter
One of title LXII of the Revised Statutes of the United
States is amended by inserting after the item relating to
section 5136B the following new item:
``5136C. State law preemption standards for national banks and
subsidiaries clarified''.
SEC. 102. VISITORIAL STANDARDS.
Section 5136C of the Revised Statutes of the United States
(as added by section 101(a) of this Act) is amended by adding
at the end the following new subsections:
``(j) Visitorial Powers.--No provision of this title which
relates to visitorial powers or otherwise limits or restricts
the supervisory, examination, or regulatory authority to
which any national bank is subject shall be construed as
limiting or restricting the authority of any attorney general
(or other chief law enforcement officer) of any State to
bring any action in any court of appropriate jurisdiction--
``(1) to enforce any applicable Federal or State law, as
authorized by such law; or
``(2) on behalf of residents of such State, to enforce any
applicable provision of any Federal or State law against a
national bank, as
[[Page S8962]]
authorized by such law, or to seek relief and recover damages
for such residents from any violation of any such law by any
national bank.
``(k) Enforcement Actions.--The ability of the Comptroller
to bring an enforcement action under this title or section 5
of the Federal Trade Commission Act does not preclude private
parties from enforcing rights granted under Federal or State
law in the courts.''.
SEC. 103. CLARIFICATION OF LAW APPLICABLE TO STATE-CHARTERED
NONDEPOSITORY INSTITUTION SUBSIDIARIES.
Section 5136C of the Revised Statutes of the United States
(as added by section 101(a) of this Act) is amended by
inserting after subsection (k) (as added by section 102) the
following new subsection:
``(l) Clarification of Law Applicable to Nondepository
Institution Subsidiaries and Affiliates of National Banks;
Definitions.--
``(1) In general.--No provision of this title shall be
construed as preempting the applicability of State law to any
State-chartered nondepository institution, subsidiary, other
affiliate, or agent of a national bank.
``(2) Definitions.--For purposes of this section, the
following definitions shall apply:
``(A) Depository institution, subsidiary, affiliate.--The
terms `depository institution', `subsidiary', and `affiliate'
have the same meanings as in section 3 of the Federal Deposit
Insurance Act.
``(B) Nondepository institution.--The term `nondepository
institution' means any entity that is not a depository
institution.''.
SEC. 104. DATA COLLECTION AND REPORTING.
(a) Collecting and Monitoring Consumer Complaints.--
(1) In general.--The Comptroller of the Currency shall
record and monitor each complaint received directly or
indirectly from a consumer regarding a national bank or any
subsidiary of a national bank and record the resolution of
the complaint.
(2) Factors to be included.--In carrying out the
requirements of paragraph (1), the Comptroller of the
Currency shall include--
(A) the date the consumer complaint was received;
(B) the nature of the complaint;
(C) when and how the complaint was resolved, including a
brief description of the extent, and the results, of the
investigation made by the Comptroller into the complaint, a
brief description of any notices given and inquiries made to
any other Federal or State officer or agency in the course of
the investigation or resolution of the complaint, a summary
of the enforcement action taken upon completion of the
investigation, and a summary of the results of subsequent
periodic reviews by the Comptroller of the extent and nature
of compliance by the national bank or subsidiary with the
enforcement action; and
(D) if the complaint involves any alleged violation of a
State law (whether or not Federal law preempts the
application of such State law to such national bank) by such
bank, a cite to and a description of the State law that
formed the basis of the complaint.
(b) Report to the Congress.--
(1) Periodic reports required.--The Comptroller of the
Currency shall submit a report semi-annually to the Congress
on the consumer protection efforts of the Office of the
Comptroller of the Currency.
(2) Contents of report.--Each report submitted under
paragraph (1) shall include the following:
(A) The total number of consumer complaints received by the
Comptroller during the period covered by the report with
respect to alleged violations of consumer protection laws by
national banks and subsidiaries of national banks.
(B) The total number of consumer complaints received during
the reporting period that are based on each of the following:
(i) Each title of the Consumer Credit Protection Act
(reported as a separate aggregate number for each such
title).
(ii) The Truth in Savings Act.
(iii) The Right to Financial Privacy Act of 1978.
(iv) The Expedited Funds Availability Act.
(v) The Community Reinvestment Act of 1977.
(vi) The Bank Protection Act of 1968.
(vii) Title LXII of the Revised Statutes of the United
States.
(viii) The Federal Deposit Insurance Act.
(ix) The Real Estate Settlement Procedures Act of 1974.
(x) The Home Mortgage Disclosure Act of 1975.
(xi) Any other Federal law.
(xii) State consumer protection laws (reported as a
separate aggregate number for each State and each State
consumer protection law).
(xiii) Any other State law (reported separately for each
State and each State law).
(C) A summary description of the resolution efforts by the
Comptroller for complaints received during the period
covered, including--
(i) the average amount of time to resolve each complaint;
(ii) the median period of time to resolve each complaint;
(iii) the average and median time to resolve complaints in
each category of complaints described in each clause of
subparagraph (B); and
(iv) a summary description of the longest outstanding
complaint during the reporting period and the reason for the
difficulty in resolving such complaint in a more timely
fashion.
(3) Disclosure of report on occ website.--Each report
submitted to the Congress under this subsection shall be
posted, by the Comptroller of the Currency, in a timely
fashion and maintained on the website of the Office of the
Comptroller of the Currency on the World Wide Web.
TITLE II--SAVINGS ASSOCIATIONS
SEC. 201. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
ASSOCIATIONS CLARIFIED.
(a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461
et seq.) is amended by inserting after section 5 the
following new section:
``SEC. 6. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
ASSOCIATIONS AND AFFILIATES CLARIFIED.
``(a) State Consumer Laws of General Application.--
Notwithstanding any other provision of Federal law, any
consumer protection in State consumer law of general
application (including any law relating to unfair or
deceptive acts or practices, any consumer fraud law and
repossession, foreclosure, and collection) shall apply to any
Federal savings association.
``(b) State Laws Related to Laws Used by Federal Savings
Associations for Their Benefit.--When a Federal savings
association avails itself of a State law for its benefit, all
related consumer protections in State law shall apply.
``(c) State Banking or Thrift Laws Enacted Pursuant to
Federal Law.--
``(1) In general.--Notwithstanding any other provision of
Federal law and except as provided in paragraph (2), any
State law that--
``(A) is applicable to State savings associations (as
defined in section 3 of the Federal Deposit Insurance Act);
and
``(B) was enacted pursuant to or in accordance with, and is
not inconsistent with, an Act of Congress, including the
Gramm-Leach-Bliley Act, the Consumer Credit Protection Act,
and the Real Estate Settlement Procedures Act, that
explicitly or by implication, permits States to exceed or
supplement the requirements of any comparable Federal law,
shall apply to any Federal savings association.
``(2) Exceptions.--Paragraph (1) shall not apply with
respect to any State law if--
``(A) the State law discriminates against Federal savings
associations; or
``(B) the State law is inconsistent with provisions of
Federal law other than this Act, but only to the extent of
the inconsistency (as determined in accordance with the
provision of the other Federal law).
``(d) State Laws Protecting Against Predatory Mortgage
Loans.--To the extent not otherwise addressed in this
section, State laws providing greater protection in high cost
mortgage loans, however denominated, both in coverage and
content, than is provided under the Truth in Lending Act
(including the provisions amended by the Home Ownership and
Equity Protection Act of 1994) shall apply to any Federal
savings association.
``(e) Comparable Federal Regulation Required.--In relation
to the regulation of consumer credit and deposit
transactions, the Director of the Office of Thrift
Supervision may preempt State law pursuant to this Act only
when there is a comparable Federal statute, or regulations
pursuant to a Federal statute other than this Act, expressly
governing the activity, except in relation to interest
pursuant to section 4(g).
``(f) No Negative Implications for Applicability of Other
State Laws.--No provision of this section shall be construed
as altering or affecting the applicability, to Federal
savings associations, of any State law which is not described
in this section.
``(g) Effect of Transfer of Transaction.--A transaction
that is not entitled to preemption at the time of the
origination of the transaction does not become entitled to
preemption under this Act by virtue of its subsequent
acquisition by a Federal savings association.
``(h) Denial of Preemption Not a Deprivation of a Civil
Right.--The preemption of any provision of the law of any
State with respect to any Federal savings association shall
not be treated as a right, privilege, or immunity for
purposes of section 1979 of the Revised Statutes of the
United States (42 U.S.C. 1983).
``(i) Definition.--For purposes of this section, the terms
`includes' and `including' have the same meaning as in
section 3(t) of the Federal Deposit Insurance Act.''.
(b) Clerical Amendment.--The table of sections for the Home
Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended by
striking the item relating to section 6 and inserting the
following new item:
``6. State law preemption standards for Federal savings associations
and affiliates clarified''.
SEC. 202. VISITORIAL STANDARDS.
Section 6 of the Home Owners' Loan Act (as added by section
201(a) of this title) is amended by adding at the end the
following new subsections:
``(j) Visitorial Powers.--No provision of this Act shall be
construed as limiting or restricting the authority of any
attorney general (or other chief law enforcement officer) of
any State to bring any action in any court of appropriate
jurisdiction--
``(1) to enforce any applicable Federal or State law, as
authorized by such law; or
``(2) on behalf of residents of such State, to enforce any
applicable provision of any Federal or State law against a
Federal savings
[[Page S8963]]
association, as authorized by such law, or to seek relief and
recover damages for such residents from any violation of any
such law by any Federal savings association.
``(k) Enforcement Actions.--The ability of the Director of
the Office of Thrift Supervision to bring an enforcement
action under this Act or section 5 of the Federal Trade
Commission Act does not preclude private parties from
enforcing rights granted under Federal or State law in the
courts.''.
SEC. 203. CLARIFICATION OF LAW APPLICABLE TO STATE-CHARTERED
NONDEPOSITORY INSTITUTION SUBSIDIARIES.
Section 6 of the Home Owners' Loan Act (as added by section
201(a) of this title) is amended by inserting after
subsection (k) (as added by section 202) the following new
subsection:
``(l) Clarification of Law Applicable to Nondepository
Institution Affiliates of Federal Savings Associations.--
``(1) In general.--No provision of this Act shall be
construed as preempting the applicability of State law to any
State-chartered nondepository institution, subsidiary, other
affiliate, or agent of a Federal savings association.
``(2) Definitions.--For purposes of this section, the
following definitions shall apply:
``(A) Depository institution, subsidiary, affiliate.--The
terms `depository institution', `subsidiary', and `affiliate'
have the same meanings as in section 3 of the Federal Deposit
Insurance Act.
``(B) Nondepository institution.--The term `nondepository
institution' means any entity that is not a depository
institution.''.
SEC. 204. DATA COLLECTION AND REPORTING.
(a) Collecting and Monitoring Consumer Complaints.--
(1) In general.--The Director of the Office of Thrift
Supervision shall record and monitor each complaint received
directly or indirectly from a consumer regarding a Federal
savings association or any subsidiary of a Federal savings
association and record the resolution of the complaint.
(2) Factors to be included.--In carrying out the
requirements of paragraph (1), the Director of the Office of
Thrift Supervision shall include--
(A) the date the consumer complaint was received;
(B) the nature of the complaint;
(C) when and how the complaint was resolved, including a
brief description of the extent, and the results, of the
investigation made by the Director into the complaint, a
brief description of any notices given and inquiries made to
any other Federal or State officer or agency in the course of
the investigation or resolution of the complaint, a summary
of the enforcement action taken upon completion of the
investigation, and a summary of the results of subsequent
periodic reviews by the Comptroller of the extent and nature
of compliance by the Federal savings association or
subsidiary with the enforcement action; and
(D) if the complaint involves any alleged violation of a
State law (whether or not Federal law preempts the
application of such State law to such Federal savings
association) by such savings association, a cite to and a
description of the State law that formed the basis of the
complaint.
(b) Report to the Congress.--
(1) Periodic reports required.--The Director of the Office
of Thrift Supervision shall submit a report semi-annually to
the Congress on the consumer protection efforts of the Office
of Thrift Supervision.
(2) Contents of report.--Each report submitted under
paragraph (1) shall include the following:
(A) The total number of consumer complaints received by the
Director during the period covered by the report with respect
to alleged violations of consumer protection laws by Federal
savings associations and subsidiaries of Federal savings
associations.
(B) The total number of consumer complaints received during
the reporting period that are based on each of the following:
(i) Each title of the Consumer Credit Protection Act
(reported as a separate aggregate number for each such
title).
(ii) The Truth in Savings Act.
(iii) The Right to Financial Privacy Act of 1978.
(iv) The Expedited Funds Availability Act.
(v) The Community Reinvestment Act of 1977.
(vi) The Bank Protection Act of 1968.
(vii) Title LXII of the Revised Statutes of the United
States.
(viii) The Federal Deposit Insurance Act.
(ix) The Real Estate Settlement Procedures Act of 1974.
(x) The Home Mortgage Disclosure Act of 1975.
(xi) Any other Federal law.
(xii) State consumer protection laws (reported as a
separate aggregate number for each State and each State
consumer protection law).
(xiii) Any other State law (reported separately for each
State and each State law).
(C) A summary description of the resolution efforts by the
Director for complaints received during the period covered,
including--
(i) the average amount of time to resolve each complaint;
(ii) the median period of time to resolve each complaint;
(iii) the average and median time to resolve complaints in
each category of complaints described in each clause of
subparagraph (B); and
(iv) a summary description of the longest outstanding
complaint during the reporting period and the reason for the
difficulty in resolving such complaint in a more timely
fashion.
(3) Disclosure of report on ots website.--Each report
submitted to the Congress under this subsection shall be
posted, by the Director of the Office of Thrift Supervision,
in a timely fashion and maintained on the website of the
Office of Thrift Supervision on the World Wide Web.
______
By Mr. FRIST (for himself, Mr. McConnell, Mr. Gregg, Mr. Enzi,
Ms. Murkowski, and Mr. DeMint):
S. 1503. A bill to reduce healthcare costs, expand access to
affordable healthcare coverage, and improve healthcare and strengthen
the health care safety net, and for other purposes; to the Committee on
Finance.
Mr. FRIST. Mr. President, wherever I travel, Americans tell me the
same things about our health care system: it costs too much, leaves too
many without insurance, and does too little to help those in need.
America has the world's best hospitals, doctors, nurses, and medical
research labs. But we do not always provide the best care. And we
certainly do not provide it at an affordable price. We face real
problems. And we need to act.
Two years ago, I appointed a task force to investigate what Congress
could do. Under the leadership of Senator Judd Gregg, the task force
reported back with a series of comprehensive recommendations. The
President has also proposed some very constructive policy initiatives.
We took all of these proposals into account when we wrote this bill.
The legislation we propose today will build upon our record of
accomplishment on health care. The Republican Congress has created a
Medicare drug benefit for seniors, made tax-free, portable Health
Savings Accounts available to all Americans, and has begun the process
of moving our medical system into the information age.
This week, we will pass and send to the President a long-overdue
measure to encourage doctors and hospitals to report medical errors
voluntarily. The measure will save lives, and it will improve health
care quality.
But we still have more to do.
The legislation we are proposing today focuses on three broad areas:
reducing costs, expanding health coverage, and improving the quality of
care. In this bill--``The Healthy America Act of 2005''--we provide
comprehensive solutions that will improve health care for every
American.
Let me begin by speaking about cost. Every year, Americans see their
health care costs soar. Just 15 years ago, less than 1 out of every 10
dollars Americans spent went for health care. In 10 years, almost one
out of every five dollars you spend will go towards health care.
Rising life expectancies and the cost of new technologies,
treatments, and medical procedures all drive up costs. But we can do
more to hold them in check. And we must.
Rapidly rising health costs threaten our Nation's small business
owners, and our largest corporations. They can harm our economy; cost
jobs, and hurt Americans from all walks of life. During the past few
years, for example, health care costs have grown three to four times
more quickly than wages.
First, we need to reform our broken medical liability system. Under
our current medical system, doctors face enormous incentives to order
unnecessary tests and procedures simply to avoid the risk of lawsuits.
It's expensive, it's wasteful, and unnecessary, and, most of all,
it's dangerous. It needs to change and, under this bill, it will.
Hospitals, doctors, patients, and insurers all shoulder some
responsibility for rising costs. To keep costs down, we need to put the
patient at the heart of health care. That's why we propose reforms to
let patients own and control privacy-protected electronic medical
records, cut down on fraud in our Medicare and Medicaid programs,
reduce medical errors, and reduce unnecessary regulations and mandates.
Lower costs alone will help many Americans get the care they need and
deserve. But we also have to look at ways to cover more Americans who
would still find themselves left behind.
[[Page S8964]]
Through changes to tax laws, we can make it easier for lower-income
individuals and small businesses to purchase affordable, high quality
health insurance.
And we can also provide more options for those who take charge of
their own health care by making flexible spending accounts more
flexible and health savings accounts even more affordable for
individuals and small businesses.
Finally, the Federal Government can help support State high-risk
pools that help provide health coverage to individuals who couldn't
otherwise afford care.
America is a caring Nation and we must recognize that not everyone
has equal ability to take care of his or her own health. That's why we
need to expand our safety net for the truly needy.
Many of those without health insurance--particularly children--
qualify for benefits under existing programs but do not receive them.
By providing grants to faith-based and community organizations, we can
help more families sign up their children for available health
coverage.
We also need to expand the availability of health care services to
individuals in need by expanding Community Health Centers and Rural
Health Clinics to more rural areas and poor counties.
We should also act to make prescription drugs more affordable for
low-income Americans and provide legal protections and loan forbearance
that will make it easier for health care practitioners who volunteer
their time and services to provide needed care in community health
centers and free clinics.
Every American should have health care that's available, affordable,
and always there.
And we must hold fast to this principle: patients should sit at the
center of the health care system, not the government, not insurance
companies, and certainly not predatory trial lawyers.
The system should free providers to focus on caring for their
patients: not dealing with regulations, bureaucrats, or lawyers.
Today, we've put forward a plan that will take a major step towards
centering America's health care system on the patient.
We have the vision for what American health care should look like.
Now we only need the courage to make it happen.
I want to thank Senator Gregg, and all of the members of the Task
Force who worked so diligently on this legislation. I also want to
recognize the contributions of the other cosponsors of this
legislation: Senators Mitch McConnell, Mike Enzi, Lisa Murkowski, and
Jim DeMint, I urge all of my colleagues to join us in supporting this
bill. 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. 1503
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 ``Healthy
America Act of 2005''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I--MAKING HEALTH CARE MORE AFFORDABLE
Subtitle A--Medical Liability Reform
Sec. 101. Short title.
Sec. 102. Findings and purpose.
Sec. 103. Encouraging speedy resolution of claims.
Sec. 104. Compensating patient injury.
Sec. 105. Maximizing patient recovery.
Sec. 106. Additional health benefits.
Sec. 107. Punitive damages.
Sec. 108. Authorization of payment of future damages to claimants in
health care lawsuits.
Sec. 109. Definitions.
Sec. 110. Effect on other laws.
Sec. 111. State flexibility and protection of States' rights.
Sec. 112. Applicability; effective date.
Subtitle B--Health Information Technology
Chapter 1--General Provisions
Sec. 121. Improving health care, quality, safety, and efficiency.
Sec. 122. HIPAA report.
Sec. 123. Study of reimbursement incentives.
Sec. 124. Reauthorization of incentive grants regarding telemedicine.
Sec. 125. Sense of the Senate on physician payment.
Sec. 126. Establishment of quality measurement systems for medicare
value-based purchasing programs.
Sec. 127. Exception to Federal anti-kickback and physician self
referral laws for the provision of permitted support.
Chapter 2--Value Based Purchasing
Sec. 131. Value based purchasing programs.
Subtitle C--Patient Safety and Quality Improvement
Sec. 141. Short title.
Sec. 142. Findings and purposes.
Sec. 143. Amendments to Public Health Service Act.
Sec. 144. Studies and reports.
Subtitle D--Fraud and Abuse
Sec. 151. National expansion of the medicare-medicaid data match pilot
program.
Subtitle E--Miscellaneous Provisions
Sec. 161. Sense of the Senate on establishing a mandated benefits
commission.
Sec. 162. Enforcement of reimbursement provisions by fiduciaries.
TITLE II--EXPANDING ACCESS TO AFFORDABLE HEALTH COVERAGE THROUGH TAX
INCENTIVES AND OTHER INITIATIVES
Subtitle A--Refundable Health Insurance Credit
Sec. 201. Refundable health insurance costs credit.
Sec. 202. Advance payment of credit to issuers of qualified health
insurance.
Subtitle B--High Deductible Health Plans and Health Savings Accounts
Sec. 211. Deduction of premiums for high deductible health plans.
Sec. 212. Refundable credit for contributions to health savings
accounts of small business employees.
Subtitle C--Improvement of the Health Coverage Tax Credit
Sec. 221. Change in State-based coverage rules related to preexisting
conditions.
Sec. 222. Eligibility of spouse of certain individuals entitled to
medicare.
Sec. 223. Eligible PBGC pension recipient.
Sec. 224. Application of option to offer State-based coverage to Puerto
Rico, Northern Mariana Islands, American Samoa, Guam, and
the United States Virgin Islands.
Sec. 225. Clarification of disclosure rules.
Sec. 226. Clarification that State-based COBRA continuation coverage is
subject to same rules as Federal COBRA.
Sec. 227. Application of rules for other specified coverage to eligible
alternative taa recipients consistent with rules for
other eligible individuals.
Subtitle D--Long-Term Care Insurance
Sec. 231. Sense of the Senate concerning long-term care.
Subtitle E--Other Provisions
Sec. 241. Disposition of unused health benefits in cafeteria plans and
flexible spending arrangements.
Sec. 242. Microentrepreneurs.
Sec. 243. Study on access to affordable health insurance for full-time
college and university students.
Sec. 244. Extension of funding for operation of State high risk health
insurance pools.
Sec. 245. Sense of the senate on affordable health coverage for small
employers.
Subtitle F--Covering Kids
Sec. 251. Short title.
Sec. 252. Grants to promote innovative outreach and enrollment under
medicaid and SCHIP.
Sec. 253. State option to provide for simplified determinations of a
child's financial eligibility for medical assistance
under medicaid or child health assistance under SCHIP.
TITLE III--IMPROVING CARE AND STRENGTHENING THE SAFETY NET
Subtitle A--High Needs Areas
Sec. 301. Purpose.
Sec. 302. High need community health centers.
Sec. 303. Grant application process.
Subtitle B--Qualified Integrated Health Care systems
Sec. 321. Grants to qualified integrated health care systems.
Subtitle C--Miscellaneous Provisions
Sec. 331. Community health center collaborative access expansion.
Sec. 332. Improvements to section 340B program.
Sec. 333. Forbearance for student loans for physicians providing
services in free clinics.
Sec. 334. Amendments to the Public Health Service Act relating to
liability.
Sec. 335. Sense of the Senate concerning health disparities.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Health care costs are growing rapidly, putting health
insurance and needed care out of reach for too many
Americans.
[[Page S8965]]
(2) Rapidly growing health care costs pose a threat to the
United States economy, as they make American businesses less
competitive and make it more difficult to create new jobs.
(3) Growing health care costs are compromising the
stability of health care safety net and entitlement programs.
(4) There are a series of steps Congress can and should
take to slow the growth of health care costs, expand access
to health coverage, and improve access to quality health care
for millions of Americans.
TITLE I--MAKING HEALTH CARE MORE AFFORDABLE
Subtitle A--Medical Liability Reform
SEC. 101. SHORT TITLE.
This subtitle may be cited as the ``Patients First Act of
2005''.
SEC. 102. FINDINGS AND PURPOSE.
(a) Findings.--
(1) Effect on health care access and costs.--Congress finds
that our current civil justice system is adversely affecting
patient access to health care services, better patient care,
and cost-efficient health care, in that the current health
care liability system is a costly and ineffective mechanism
for resolving claims of health care liability and
compensating injured patients, and is a deterrent to the
sharing of information among health care professionals which
impedes efforts to improve patient safety and quality of
care.
(2) Effect on interstate commerce.--Congress finds that the
health care and insurance industries are industries affecting
interstate commerce and the health care liability litigation
systems existing throughout the United States are activities
that affect interstate commerce by contributing to the high
costs of health care and premiums for health care liability
insurance purchased by health care system providers.
(3) Effect on federal spending.--Congress finds that the
health care liability litigation systems existing throughout
the United States have a significant effect on the amount,
distribution, and use of Federal funds because of--
(A) the large number of individuals who receive health care
benefits under programs operated or financed by the Federal
Government;
(B) the large number of individuals who benefit because of
the exclusion from Federal taxes of the amounts spent to
provide them with health insurance benefits; and
(C) the large number of health care providers who provide
items or services for which the Federal Government makes
payments.
(b) Purpose.--It is the purpose of this subtitle to
implement reasonable, comprehensive, and effective health
care liability reforms designed to--
(1) improve the availability of health care services in
cases in which health care liability actions have been shown
to be a factor in the decreased availability of services;
(2) reduce the incidence of ``defensive medicine'' and
lower the cost of health care liability insurance, all of
which contribute to the escalation of health care costs;
(3) ensure that persons with meritorious health care injury
claims receive fair and adequate compensation, including
reasonable noneconomic damages;
(4) improve the fairness and cost-effectiveness of our
current health care liability system to resolve disputes
over, and provide compensation for, health care liability by
reducing uncertainty in the amount of compensation provided
to injured individuals;
(5) provide an increased sharing of information in the
health care system which will reduce unintended injury and
improve patient care.
SEC. 103. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.
The time for the commencement of a health care lawsuit
shall be 3 years after the date of manifestation of injury or
1 year after the claimant discovers, or through the use of
reasonable diligence should have discovered, the injury,
whichever occurs first. In no event shall the time for
commencement of a health care lawsuit exceed 3 years after
the date of manifestation of injury unless tolled for any of
the following:
(1) Upon proof of fraud;
(2) Intentional concealment; or
(3) The presence of a foreign body, which has no
therapeutic or diagnostic purpose or effect, in the person of
the injured person.
Actions by a minor shall be commenced within 3 years from the
date of the alleged manifestation of injury except that
actions by a minor under the full age of 6 years shall be
commenced within 3 years of manifestation of injury or prior
to the minor's 8th birthday, whichever provides a longer
period. Such time limitation shall be tolled for minors for
any period during which a parent or guardian and a health
care provider or health care organization have committed
fraud or collusion in the failure to bring an action on
behalf of the injured minor.
SEC. 104. COMPENSATING PATIENT INJURY.
(a) Unlimited Amount of Damages for Actual Economic Losses
in Health Care Lawsuits.--In any health care lawsuit, the
full amount of a claimant's economic loss may be fully
recovered without limitation.
(b) Additional Noneconomic Damages.--In any health care
lawsuit, the amount of noneconomic damages recovered may be
as much as $250,000, regardless of the number of parties
against whom the action is brought or the number of separate
claims or actions brought with respect to the same
occurrence.
(c) No Discount of Award for Noneconomic Damages.--In any
health care lawsuit, an award for future noneconomic damages
shall not be discounted to present value. The jury shall not
be informed about the maximum award for noneconomic damages.
An award for noneconomic damages in excess of $250,000 shall
be reduced either before the entry of judgment, or by
amendment of the judgment after entry of judgment, and such
reduction shall be made before accounting for any other
reduction in damages required by law. If separate awards are
rendered for past and future noneconomic damages and the
combined awards exceed $250,000, the future noneconomic
damages shall be reduced first.
(d) Fair Share Rule.--In any health care lawsuit, each
party shall be liable for that party's several share of any
damages only and not for the share of any other person. Each
party shall be liable only for the amount of damages
allocated to such party in direct proportion to such party's
percentage of responsibility. A separate judgment shall be
rendered against each such party for the amount allocated to
such party. For purposes of this section, the trier of fact
shall determine the proportion of responsibility of each
party for the claimant's harm.
SEC. 105. MAXIMIZING PATIENT RECOVERY.
(a) Court Supervision of Share of Damages Actually Paid to
Claimants.--In any health care lawsuit, the court shall
supervise the arrangements for payment of damages to protect
against conflicts of interest that may have the effect of
reducing the amount of damages awarded that are actually paid
to claimants. In particular, in any health care lawsuit in
which the attorney for a party claims a financial stake in
the outcome by virtue of a contingent fee, the court shall
have the power to restrict the payment of a claimant's damage
recovery to such attorney, and to redirect such damages to
the claimant based upon the interests of justice and
principles of equity. In no event shall the total of all
contingent fees for representing all claimants in a health
care lawsuit exceed the following limits:
(1) 40 percent of the first $50,000 recovered by the
claimant(s).
(2) 33\1/3\ percent of the next $50,000 recovered by the
claimant(s).
(3) 25 percent of the next $500,000 recovered by the
claimant(s).
(4) 15 percent of any amount by which the recovery by the
claimant(s) is in excess of $600,000.
(b) Applicability.--The limitations in subsection (a) shall
apply whether the recovery is by judgment, settlement,
mediation, arbitration, or any other form of alternative
dispute resolution. In a health care lawsuit involving a
minor or incompetent person, a court retains the authority to
authorize or approve a fee that is less than the maximum
permitted under this section.
(c) Expert Witnesses.--
(1) Requirement.--No individual shall be qualified to
testify as an expert witness concerning issues of negligence
in any health care lawsuit against a defendant unless such
individual--
(A) except as required under paragraph (2), is a health
care professional who--
(i) is appropriately credentialed or licensed in 1 or more
States to deliver health care services; and
(ii) typically treats the diagnosis or condition or
provides the type of treatment under review; and
(B) can demonstrate by competent evidence that, as a result
of training, education, knowledge, and experience in the
evaluation, diagnosis, and treatment of the disease or injury
which is the subject matter of the lawsuit against the
defendant, the individual was substantially familiar with
applicable standards of care and practice as they relate to
the act or omission which is the subject of the lawsuit on
the date of the incident.
(2) Physician review.--In a health care lawsuit, if the
claim of the plaintiff involved treatment that is recommended
or provided by a physician (allopathic or osteopathic), an
individual shall not be qualified to be an expert witness
under this subsection with respect to issues of negligence
concerning such treatment unless such individual is a
physician.
(3) Specialties and subspecialties.--With respect to a
lawsuit described in paragraph (1), a court shall not permit
an expert in one medical specialty or subspecialty to testify
against a defendant in another medical specialty or
subspecialty unless, in addition to a showing of substantial
familiarity in accordance with paragraph (1)(B), there is a
showing that the standards of care and practice in the two
specialty or subspecialty fields are similar.
(4) Limitation.--The limitations in this subsection shall
not apply to expert witnesses testifying as to the degree or
permanency of medical or physical impairment.
SEC. 106. ADDITIONAL HEALTH BENEFITS.
(a) In General.--The amount of any damages received by a
claimant in any health care lawsuit shall be reduced by the
court by the amount of any collateral source benefits to
which the claimant is entitled, less any insurance premiums
or other payments made by the claimant (or by the spouse,
parent, child, or legal guardian of the claimant) to obtain
or secure such benefits.
(b) Preservation of Current Law.--Where a payor of
collateral source benefits has a right of recovery by
reimbursement or subrogation and such right is permitted
under Federal or State law, subsection (a) shall not apply.
[[Page S8966]]
(c) Application of Provision.--This section shall apply to
any health care lawsuit that is settled or resolved by a fact
finder.
SEC. 107. PUNITIVE DAMAGES.
(a) In General.--Punitive damages may, if otherwise
permitted by applicable State or Federal law, be awarded
against any person in a health care lawsuit only if it is
proven by clear and convincing evidence that such person
acted with malicious intent to injure the claimant, or that
such person deliberately failed to avoid unnecessary injury
that such person knew the claimant was substantially certain
to suffer. In any health care lawsuit where no judgment for
compensatory damages is rendered against such person, no
punitive damages may be awarded with respect to the claim in
such lawsuit. No demand for punitive damages shall be
included in a health care lawsuit as initially filed. A court
may allow a claimant to file an amended pleading for punitive
damages only upon a motion by the claimant and after a
finding by the court, upon review of supporting and opposing
affidavits or after a hearing, after weighing the evidence,
that the claimant has established by a substantial
probability that the claimant will prevail on the claim for
punitive damages. At the request of any party in a health
care lawsuit, the trier of fact shall consider in a separate
proceeding--
(1) whether punitive damages are to be awarded and the
amount of such award; and
(2) the amount of punitive damages following a
determination of punitive liability.
If a separate proceeding is requested, evidence relevant only
to the claim for punitive damages, as determined by
applicable State law, shall be inadmissible in any proceeding
to determine whether compensatory damages are to be awarded.
(b) Determining Amount of Punitive Damages.--
(1) Factors considered.--In determining the amount of
punitive damages, if awarded, in a health care lawsuit, the
trier of fact shall consider only the following:
(A) the severity of the harm caused by the conduct of such
party;
(B) the duration of the conduct or any concealment of it by
such party;
(C) the profitability of the conduct to such party;
(D) the number of products sold or medical procedures
rendered for compensation, as the case may be, by such party,
of the kind causing the harm complained of by the claimant;
(E) any criminal penalties imposed on such party, as a
result of the conduct complained of by the claimant; and
(F) the amount of any civil fines assessed against such
party as a result of the conduct complained of by the
claimant.
(2) Maximum award.--The amount of punitive damages, if
awarded, in a health care lawsuit may be as much as $250,000
or as much as two times the amount of economic damages
awarded, whichever is greater. The jury shall not be informed
of this limitation.
(c) No Penalties for Providers in Compliance With FDA
Standards.--A health care provider who prescribes a medical
product approved or cleared by the Food and Drug
Administration shall not be named as a party to a product
liability lawsuit involving such product and shall not be
liable to a claimant in a class action lawsuit against the
manufacturer, distributor, or seller of such product.
SEC. 108. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO
CLAIMANTS IN HEALTH CARE LAWSUITS.
(a) In General.--In any health care lawsuit, if an award of
future damages, without reduction to present value, equaling
or exceeding $50,000 is made against a party with sufficient
insurance or other assets to fund a periodic payment of such
a judgment, the court shall, at the request of any party,
enter a judgment ordering that the future damages be paid by
periodic payments in accordance with the Uniform Periodic
Payment of Judgments Act promulgated by the National
Conference of Commissioners on Uniform State Laws.
(b) Applicability.--This section applies to all actions
which have not been first set for trial or retrial before the
effective date of this Act.
SEC. 109. DEFINITIONS.
In this subtitle:
(1) Alternative dispute resolution system; adr.--The term
``alternative dispute resolution system'' or ``ADR'' means a
system that provides for the resolution of health care
lawsuits in a manner other than through a civil action
brought in a State or Federal court.
(2) Claimant.--The term ``claimant'' means any person who
brings a health care lawsuit, including a person who asserts
or claims a right to legal or equitable contribution,
indemnity or subrogation, arising out of a health care
liability claim or action, and any person on whose behalf
such a claim is asserted or such an action is brought,
whether deceased, incompetent, or a minor.
(3) Collateral source benefits.--The term ``collateral
source benefits'' means any amount paid or reasonably likely
to be paid in the future to or on behalf of the claimant, or
any service, product or other benefit provided or reasonably
likely to be provided in the future to or on behalf of the
claimant, as a result of the injury or wrongful death,
pursuant to--
(A) any State or Federal health, sickness, income-
disability, accident, or workers' compensation law;
(B) any health, sickness, income-disability, or accident
insurance that provides health benefits or income-disability
coverage;
(C) any contract or agreement of any group, organization,
partnership, or corporation to provide, pay for, or reimburse
the cost of medical, hospital, dental, or income disability
benefits; and
(D) any other publicly or privately funded program.
(4) Compensatory damages.--The term ``compensatory
damages'' means objectively verifiable monetary losses
incurred as a result of the provision of, use of, or payment
for (or failure to provide, use, or pay for) health care
services or medical products, such as past and future medical
expenses, loss of past and future earnings, cost of obtaining
domestic services, loss of employment, and loss of business
or employment opportunities, damages for physical and
emotional pain, suffering, inconvenience, physical
impairment, mental anguish, disfigurement, loss of enjoyment
of life, loss of society and companionship, loss of
consortium (other than loss of domestic service), hedonic
damages, injury to reputation, and all other nonpecuniary
losses of any kind or nature. The term ``compensatory
damages'' includes economic damages and noneconomic damages,
as such terms are defined in this section.
(5) Contingent fee.--The term ``contingent fee'' includes
all compensation to any person or persons which is payable
only if a recovery is effected on behalf of one or more
claimants.
(6) Economic damages.--The term ``economic damages'' means
objectively verifiable monetary losses incurred as a result
of the provision of, use of, or payment for (or failure to
provide, use, or pay for) health care services or medical
products, such as past and future medical expenses, loss of
past and future earnings, cost of obtaining domestic
services, loss of employment, and loss of business or
employment opportunities.
(7) Health care lawsuit.--The term ``health care lawsuit''
means any health care liability claim concerning the
provision of health care goods or services affecting
interstate commerce, or any health care liability action
concerning the provision of health care goods or services
affecting interstate commerce, brought in a State or Federal
court or pursuant to an alternative dispute resolution
system, against a health care provider, a health care
organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product,
regardless of the theory of liability on which the claim is
based, or the number of claimants, plaintiffs, defendants, or
other parties, or the number of claims or causes of action,
in which the claimant alleges a health care liability claim.
(8) Health care liability action.--The term ``health care
liability action'' means a civil action brought in a State or
Federal Court or pursuant to an alternative dispute
resolution system, against a health care provider, a health
care organization, or the manufacturer, distributor,
supplier, marketer, promoter, or seller of a medical product,
regardless of the theory of liability on which the claim is
based, or the number of plaintiffs, defendants, or other
parties, or the number of causes of action, in which the
claimant alleges a health care liability claim.
(9) Health care liability claim.--The term ``health care
liability claim'' means a demand by any person, whether or
not pursuant to ADR, against a health care provider, health
care organization, or the manufacturer, distributor,
supplier, marketer, promoter, or seller of a medical product,
including, but not limited to, third-party claims, cross-
claims, counter-claims, or contribution claims, which are
based upon the provision of, use of, or payment for (or the
failure to provide, use, or pay for) health care services or
medical products, regardless of the theory of liability on
which the claim is based, or the number of plaintiffs,
defendants, or other parties, or the number of causes of
action.
(10) Health care organization.--The term ``health care
organization'' means any person or entity which is obligated
to provide or pay for health benefits under any health plan,
including any person or entity acting under a contract or
arrangement with a health care organization to provide or
administer any health benefit.
(11) Health care provider.--The term ``health care
provider'' means any person or entity required by State or
Federal laws or regulations to be licensed, registered, or
certified to provide health care services, and being either
so licensed, registered, or certified, or exempted from such
requirement by other statute or regulation.
(12) Health care goods or services.--The term ``health care
goods or services'' means any goods or services provided by a
health care organization, provider, or by any individual
working under the supervision of a health care provider, that
relates to the diagnosis, prevention, or treatment of any
human disease or impairment, or the assessment of the health
of human beings.
(13) Malicious intent to injure.--The term ``malicious
intent to injure'' means intentionally causing or attempting
to cause physical injury other than providing health care
goods or services.
(14) Medical product.--The term ``medical product'' means a
drug or device intended for humans, and the terms ``drug''
and ``device'' have the meanings given such terms in sections
201(g)(1) and 201(h) of the Federal Food,
[[Page S8967]]
Drug and Cosmetic Act (21 U.S.C. 321), respectively,
including any component or raw material used therein, but
excluding health care services.
(15) Noneconomic damages.--The term ``noneconomic damages''
means damages for physical and emotional pain, suffering,
inconvenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of
domestic service), hedonic damages, injury to reputation, and
all other nonpecuniary losses of any kind or nature.
(16) Punitive damages.--The term ``punitive damages'' means
damages awarded, for the purpose of punishment or deterrence,
and not solely for compensatory purposes, against a health
care provider, health care organization, or a manufacturer,
distributor, or supplier of a medical product. Punitive
damages are neither economic nor noneconomic damages.
(17) Recovery.--The term ``recovery'' means the net sum
recovered after deducting any disbursements or costs incurred
in connection with prosecution or settlement of the claim,
including all costs paid or advanced by any person. Costs of
health care incurred by the plaintiff and the attorneys'
office overhead costs or charges for legal services are not
deductible disbursements or costs for such purpose.
(18) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, the Trust Territory of the Pacific Islands,
and any other territory or possession of the United States,
or any political subdivision thereof.
SEC. 110. EFFECT ON OTHER LAWS.
(a) Vaccine Injury.--
(1) To the extent that title XXI of the Public Health
Service Act establishes a Federal rule of law applicable to a
civil action brought for a vaccine-related injury or death--
(A) this subtitle does not affect the application of the
rule of law to such an action; and
(B) any rule of law prescribed by this subtitle in conflict
with a rule of law of such title XXI shall not apply to such
action.
(2) If there is an aspect of a civil action brought for a
vaccine-related injury or death to which a Federal rule of
law under title XXI of the Public Health Service Act does not
apply, then this subtitle or otherwise applicable law (as
determined under this subtitle) will apply to such aspect of
such action.
(b) Other Federal Law.--Except as provided in this section,
nothing in this subtitle shall be deemed to affect any
defense available to a defendant in a health care lawsuit or
action under any other provision of Federal law.
SEC. 111. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.
(a) Health Care Lawsuits.--The provisions governing health
care lawsuits set forth in this subtitle preempt, subject to
subsections (b) and (c), State law to the extent that State
law prevents the application of any provisions of law
established by or under this subtitle. The provisions
governing health care lawsuits set forth in this subtitle
supersede chapter 171 of title 28, United States Code, to the
extent that such chapter--
(1) provides for a greater amount of damages or contingent
fees, a longer period in which a health care lawsuit may be
commenced, or a reduced applicability or scope of periodic
payment of future damages, than provided in this subtitle; or
(2) prohibits the introduction of evidence regarding
collateral source benefits, or mandates or permits
subrogation or a lien on collateral source benefits.
(b) Protection of States' Rights.--Any issue that is not
governed by any provision of law established by or under this
subtitle (including State standards of negligence) shall be
governed by otherwise applicable State or Federal law. This
subtitle does not preempt or supersede any law that imposes
greater protections (such as a shorter statute of
limitations) for health care providers and health care
organizations from liability, loss, or damages than those
provided by this subtitle.
(c) State Flexibility.--No provision of this subtitle shall
be construed to preempt--
(1) any State law (whether effective before, on, or after
the date of the enactment of this subtitle) that specifies a
particular monetary amount of compensatory or punitive
damages (or the total amount of damages) that may be awarded
in a health care lawsuit, regardless of whether such monetary
amount is greater or lesser than is provided for under this
subtitle, notwithstanding section 104(a); or
(2) any defense available to a party in a health care
lawsuit under any other provision of State or Federal law.
SEC. 112. APPLICABILITY; EFFECTIVE DATE.
This subtitle shall apply to any health care lawsuit
brought in a Federal or State court, or subject to an
alternative dispute resolution system, that is initiated on
or after the date of the enactment of this Act, except that
any health care lawsuit arising from an injury occurring
prior to the date of the enactment of this Act shall be
governed by the applicable statute of limitations provisions
in effect at the time the injury occurred.
Subtitle B--Health Information Technology
CHAPTER 1--GENERAL PROVISIONS
SEC. 121. IMPROVING HEALTH CARE, QUALITY, SAFETY, AND
EFFICIENCY.
The Public Health Service Act (42 U.S.C. 201 et seq.) is
amended by adding at the end the following:
``TITLE XXIX--HEALTH INFORMATION TECHNOLOGY
``SEC. 2901. DEFINITIONS.
``In this title:
``(1) Health care provider.--The term `health care
provider' means a hospital, skilled nursing facility, home
health entity, health care clinic, federally qualified health
center, group practice (as defined in section 1877(h)(4) of
the Social Security Act), a pharmacist, a pharmacy, a
laboratory, a physician (as defined in section 1861(r) of the
Social Security Act), a health facility operated by or
pursuant to a contract with the Indian Health Service, a
rural health clinic, and any other category of facility or
clinician determined appropriate by the Secretary.
``(2) Health information.--The term `health information'
has the meaning given such term in section 1171(4) of the
Social Security Act.
``(3) Health insurance plan.--The term `health insurance
plan' means--
``(A) a health insurance issuer (as defined in section
2791(b)(2));
``(B) a group health plan (as defined in section
2791(a)(1)); and
``(C) a health maintenance organization (as defined in
section 2791(b)(3)).
``(4) Laboratory.--The term `laboratory' has the meaning
given that term in section 353.
``(5) Pharmacist.--The term `pharmacist' has the meaning
given that term in section 804 of the Federal Food, Drug, and
Cosmetic Act.
``(6) State.--The term `State' means each of the several
States, the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Northern Mariana
Islands.
``SEC. 2902. OFFICE OF THE NATIONAL COORDINATOR OF HEALTH
INFORMATION TECHNOLOGY.
``(a) Office of National Health Information Technology.--
There is established within the Office of the Secretary an
Office of the National Coordinator of Health Information
Technology (referred to in this section as the `Office'). The
Office shall be headed by a National Coordinator who shall be
appointed by the Secretary, in consultation with the
President, and shall report directly to the Secretary.
``(b) Purpose.--It shall be the purpose of the Office to
coordinate with relevant Federal agencies and oversee
programs and activities to develop a nationwide interoperable
health information technology infrastructure that--
``(1) ensures that patients' individually identifiable
health information is secure and protected;
``(2) improves health care quality, reduces medical errors,
and advances the delivery of patient-centered medical care;
``(3) reduces health care costs resulting from
inefficiency, medical errors, inappropriate care, and
incomplete information;
``(4) ensures that appropriate information to help guide
medical decisions is available at the time and place of care;
``(5) promotes a more effective marketplace, greater
competition, and increased choice through the wider
availability of accurate information on health care costs,
quality, and outcomes; and
``(6) improves the coordination of care and information
among hospitals, laboratories, physician offices, and other
entities through an effective infrastructure for the secure
and authorized exchange of health care information.
``(c) Duties of the National Coordinator.--The National
Coordinator shall--
``(1) provide support to the public-private American Health
Information Collaborative established under section 2903;
``(2) serve as the principal advisor to the Secretary
concerning the development, application, and use of health
information technology, and coordinate and oversee the health
information technology programs of the Department;
``(3) facilitate the adoption of a nationwide,
interoperable system for the electronic exchange of health
information;
``(4) ensure the adoption and implementation of standards
for the electronic exchange of health information to reduce
cost and improve health care quality;
``(5) ensure that health information technology policy and
programs of the Department are coordinated with those of
relevant executive branch agencies (including Federal
commissions) with a goal of avoiding duplication of efforts
and of helping to ensure that each agency undertakes health
information technology activities primarily within the areas
of its greatest expertise and technical capability;
``(6) to the extent permitted by law, coordinate outreach
and consultation by the relevant executive branch agencies
(including Federal commissions) with public and private
parties of interest, including consumers, payers, employers,
hospitals and other health care providers, physicians,
community health centers, laboratories, vendors and other
stakeholders;
``(7) advise the President regarding specific Federal
health information technology programs; and
``(8) submit the reports described under section 2903(i)
(excluding paragraph (4) of such section).
[[Page S8968]]
``(d) Rule of Construction.--Nothing in this section shall
be construed to require the duplication of Federal efforts
with respect to the establishment of the Office, regardless
of whether such efforts were carried out prior to or after
the enactment of this title.
``SEC. 2903. AMERICAN HEALTH INFORMATION COLLABORATIVE.
``(a) Purpose.--The Secretary shall establish the public-
private American Health Information Collaborative (referred
to in this section as the `Collaborative') to--
``(1) advise the Secretary and recommend specific actions
to achieve a nationwide interoperable health information
technology infrastructure;
``(2) serve as a forum for the participation of a broad
range of stakeholders to provide input on achieving the
interoperability of health information technology; and
``(3) recommend standards (including content,
communication, and security standards) for the electronic
exchange of health information for adoption by the Federal
Government and voluntary adoption by private entities.
``(b) Composition.--
``(1) In general.--The Collaborative shall be composed of--
``(A) the Secretary, who shall serve as the chairperson of
the Collaborative;
``(B) the Secretary of Defense, or his or her designee;
``(C) the Secretary of Veterans Affairs, or his or her
designee;
``(D) the Secretary of Commerce, or his or her designee;
``(E) representatives of other relevant Federal agencies,
as determined appropriate by the Secretary; and
``(F) representatives from among the following categories
to be appointed by the Secretary from nominations submitted
by the public--
``(i) consumer and patient organizations;
``(ii) experts in health information privacy and security;
``(iii) health care providers;
``(iv) health insurance plans or other third party payors;
``(v) standards development organizations;
``(vi) information technology vendors;
``(vii) purchasers or employers; and
``(viii) State or local government agencies or Indian tribe
or tribal organizations.
``(2) Considerations.--In appointing members under
paragraph (1)(F), the Secretary shall select individuals with
expertise in--
``(A) health information privacy;
``(B) health information security;
``(C) health care quality and patient safety, including
those individuals with experience in utilizing health
information technology to improve health care quality and
patient safety;
``(D) data exchange; and
``(E) developing health information technology standards
and new health information technology.
``(3) Terms.--Members appointed under paragraph (1)(G)
shall serve for 2 year terms, except that any member
appointed to fill a vacancy for an unexpired term shall be
appointed for the remainder of such term. A member may serve
for not to exceed 180 days after the expiration of such
member's term or until a successor has been appointed.
``(c) Recommendations and Policies.--The Collaborative
shall make recommendations to identify uniform national
policies for adoption by the Federal Government and voluntary
adoption by private entities to support the widespread
adoption of health information technology, including--
``(1) protection of individually identifiable health
information through privacy and security practices;
``(2) measures to prevent unauthorized access to health
information;
``(3) methods to facilitate secure patient access to health
information;
``(4) the ongoing harmonization of industry-wide health
information technology standards;
``(5) recommendations for a nationwide interoperable health
information technology infrastructure;
``(6) the identification and prioritization of specific use
cases for which health information technology is valuable,
beneficial, and feasible;
``(7) recommendations for the establishment of an entity to
ensure the continuation of the functions of the
Collaborative; and
``(8) other policies determined to be necessary by the
Collaborative.
``(d) Standards.--
``(1) Existing standards.--The standards adopted by the
Consolidated Health Informatics Initiative shall be deemed to
have been recommended by the Collaborative under this
section.
``(2) First year review.--Not later than 1 year after the
date of enactment of this title, the Collaborative shall--
``(A) review existing standards (including content,
communication, and security standards) for the electronic
exchange of health information, including such standards
adopted by the Secretary under paragraph (2)(A);
``(B) identify deficiencies and omissions in such existing
standards; and
``(C) identify duplication and overlap in such existing
standards;
and recommend modifications to such standards as necessary.
``(3) Ongoing review.--Beginning 1 year after the date of
enactment of this title, and annually thereafter, the
Collaborative shall--
``(A) review existing standards (including content,
communication, and security standards) for the electronic
exchange of health information, including such standards
adopted by the Secretary under paragraph (2)(A);
``(B) identify deficiencies and omissions in such existing
standards; and
``(C) identify duplication and overlap in such existing
standards;
and recommend modifications to such standards as necessary.
``(4) Limitation.--The standards described in this section
shall be consistent with any standards developed pursuant to
the Health Insurance Portability and Accountability Act of
1996.
``(e) Federal Action.--Not later than 60 days after the
issuance of a recommendation from the Collaborative under
subsection (d)(2), the Secretary of Health and Human
Services, in consultation with the Secretary of Veterans
Affairs, the Secretary of Defense, and representatives of
other relevant Federal agencies, as determined appropriate by
the Secretary, shall review such recommendations. The
Secretary shall provide for the adoption by the Federal
Government of any standard or standards contained in such
recommendation.
``(f) Coordination of Federal Spending.--Not later than 1
year after the adoption by the Federal Government of a
recommendation as provided for in subsection (e), and in
compliance with chapter 113 of title 40, United States Code,
no Federal agency shall expend Federal funds for the purchase
of any form of health information technology or health
information technology system for clinical care or for the
electronic retrieval, storage, or exchange of health
information that is not consistent with applicable standards
adopted by the Federal Government under subsection (e).
``(g) Coordination of Federal Data Collection.--Not later
than 3 years after the adoption by the Federal Government of
a recommendation as provided for in subsection (e), all
Federal agencies collecting health data for the purposes of
surveillance, epidemiology, adverse event reporting,
research, or for other purposes determined appropriate by the
Secretary shall comply with standards adopted under
subsection (e).
``(h) Voluntary Adoption.--
``(1) In general.--Any standards adopted by the Federal
Government under subsection (e) shall be voluntary with
respect to private entities.
``(2) Rule of construction.--Nothing in this section shall
be construed to require that a private entity that enters
into a contract with the Federal Government adopt the
standards adopted by the Federal Government under section
2903 with respect to activities not related to the contract.
``(3) Limitation.--Private entities that enter into a
contract with the Federal Government shall adopt the
standards adopted under section 2903 for the purpose of
activities under such Federal contract.
``(i) Effect on other provisions.--Nothing in this title
shall be construed to effect the scope or substance of--
``(1) section 264 of the Health Insurance Portability and
Accountability Act of 1996;
``(2) sections 1171 through 1179 of the Social Security
Act; and
``(3) any regulation issued pursuant to any such section;
and such sections shall remain in effect and shall apply to
the implementation of standards, programs and activities
under this title.
``(j) Reports.--The Secretary shall submit to the Committee
on Health, Education, Labor, and Pensions and the Committee
on Finance of the Senate and the Committee on Energy and
Commerce and the Committee on Ways and Means of the House of
Representatives, on an annual basis, a report that--
``(1) describes the specific actions that have been taken
by the Federal Government and private entities to facilitate
the adoption of an interoperable nationwide system for the
electronic exchange of health information;
``(2) describes barriers to the adoption of such a
nationwide system;
``(3) contains recommendations to achieve full
implementation of such a nationwide system; and
``(4) contains a plan and progress toward the establishment
of an entity to ensure the continuation of the functions of
the Collaborative.
``(k) Application of FACA.--The Federal Advisory Committee
Act (5 U.S.C. App.) shall apply to the Collaborative, except
that the term provided for under section 14(a)(2) shall be 5
years.
``(l) Rule of Construction.--Nothing in this section shall
be construed to require the duplication of Federal efforts
with respect to the establishment of the Collaborative,
regardless of whether such efforts were carried out prior to
or after the enactment of this title.
``SEC. 2904. IMPLEMENTATION AND CERTIFICATION OF HEALTH
INFORMATION STANDARDS.
``(a) Implementation.--
``(1) In general.--The Secretary, based upon the
recommendations of the Collaborative, shall develop criteria
to ensure uniform and consistent implementation of any
standards for the electronic exchange of health information
voluntarily adopted by private entities in technical
conformance with such standards adopted under this title.
``(2) Implementation assistance.--The Secretary may
recognize a private entity or entities to assist private
entities in the implementation of the standards adopted under
[[Page S8969]]
this title using the criteria developed by the Secretary
under this section.
``(b) Certification.--
``(1) In general.--The Secretary, based upon the
recommendations of the Collaborative, shall develop criteria
to ensure and certify that hardware, software, and support
services that claim to be in compliance with any standard for
the electronic exchange of health information adopted under
this title have established and maintained such compliance in
technical conformance with such standards.
``(2) Certification assistance.--The Secretary may
recognize a private entity or entities to assist in the
certification described under paragraph (1) using the
criteria developed by the Secretary under this section.
``(c) Delegation Authority.--The Secretary, through
consultation with the Collaborative, may delegate the
development of the criteria under subsections (a) and (b) to
a private entity.
``SEC. 2905. STUDY OF STATE HEALTH INFORMATION LAWS AND
PRACTICES.
``(a) In General.--The Secretary shall carry out, or
contract with a private entity to carry out, a study that
examines--
``(1) the variation among State laws and practices that
relate to the privacy, confidentiality, and security of
health information;
``(2) how such variation among State laws and practices may
impact the electronic exchange of health information--
``(A) among the States;
``(B) between the States and the Federal Government; and
``(C) among private entities; and
``(3) how such laws and practices may be harmonized to
permit the secure electronic exchange of health information.
``(b) Report and Recommendations.--Not later than 1 year
after the date of enactment of this title, the Secretary
shall submit to Congress a report that--
``(1) describes the results of the study carried out under
subsection (a); and
``(2) makes recommendations based on the results of such
study.
``SEC. 2906. SECURE EXCHANGE OF HEALTH INFORMATION; INCENTIVE
GRANTS.
``(a) In General.--The Secretary may make grants to States
to carry out programs under which such States cooperate with
other States to develop and implement State policies that
will facilitate the secure electronic exchange of health
information utilizing the standards adopted under section
2903--
``(1) among the States;
``(2) between the States and the Federal Government; and
``(3) among private entities.
``(b) Priority.--In awarding grants under subsection (a),
the Secretary shall give priority to States that provide
assurance that any funding awarded under such a grant shall
be used to harmonize privacy laws and practices between the
States, the States and the Federal Government, and among
private entities related to the privacy, confidentiality, and
security of health information.
``(c) Dissemination of Information.--The Secretary shall
disseminate information regarding the efficacy of efforts of
a recipient of a grant under this section.
``(d) Technical Assistance.--The Secretary may provide
technical assistance to recipients of a grant under this
section.
``(e) Authorization of Appropriations.--For the purpose of
carrying out subsection (a), there are authorized to be
appropriated such sums as may be necessary for each of the
fiscal years 2006 through 2010.
``SEC. 2907. LICENSURE AND THE ELECTRONIC EXCHANGE OF HEALTH
INFORMATION.
``(a) In General.--The Secretary shall carry out, or
contract with a private entity to carry out, a study that
examines--
``(1) the variation among State laws that relate to the
licensure, registration, and certification of medical
professionals; and
``(2) how such variation among State laws impacts the
secure electronic exchange of health information--
``(A) among the States; and
``(B) between the States and the Federal Government.
``(b) Report and Recommendations.--Not later than 1 year
after the date of enactment of this title, the Secretary
shall publish a report that--
``(1) describes the results of the study carried out under
subsection (a); and
``(2) makes recommendations to States regarding the
harmonization of State laws based on the results of such
study.
``SEC. 2908. AUTHORIZATION OF APPROPRIATIONS.
``(a) In General.--For the purpose of carrying out this
title, there is authorized to be appropriated $125,000,000
for fiscal year 2006, and such sums as may be necessary for
each of fiscal years 2007 through 2010.
``(b) Availability.--Amounts appropriated under subsection
(a) shall remain available through fiscal year 2010.''.
SEC. 122. HIPAA REPORT.
(a) Study.--Not later than 2 years after the date of
enactment of this Act, the Secretary of Health and Human
Services shall carry out, or contract with a private entity
to carry out, a study that examines the integration of the
standards adopted under the amendments made by this subtitle
with the standards adopted under the Health Insurance
Portability and Accountability Act of 1996 (Public Law 104-
191).
(b) Plan; Report.--
(1) Plan.--Not later than 3 years after the date of
enactment of this Act, the Secretary of Health and Human
Services shall, based on the results of the study carried out
under subsection (a), develop a plan for the integration of
the standards described under such subsection and submit a
report to Congress describing such plan.
(2) Periodic reports.--The Secretary shall submit periodic
reports to Congress that describe the progress of the
integration described under paragraph (1).
SEC. 123. STUDY OF REIMBURSEMENT INCENTIVES.
The Secretary of Health and Human Services shall carry out,
or contract with a private entity to carry out, a study that
examines methods to create efficient reimbursement incentives
for improving health care quality in Federally qualified
health centers, rural health clinics, and free clinics.
SEC. 124. REAUTHORIZATION OF INCENTIVE GRANTS REGARDING
TELEMEDICINE.
Section 330L(b) of the Public Health Service Act (42 U.S.C.
254c-18(b)) is amended by striking ``2002 through 2006'' and
inserting ``2006 through 2010''.
SEC. 125. SENSE OF THE SENATE ON PHYSICIAN PAYMENT.
It is the sense of the Senate that modifications to the
medicare fee schedule for physicians' services under section
1848 of the Social Security Act (42 U.S.C. 1394w-4) should
include provisions based on the reporting of quality measures
pursuant to those adopted in section 2909 of the Public
Health Service Act (as added by section 121) and the overall
improvement of healthcare quality through the use of the
electronic exchange of health information pursuant to the
standards adopted under section 2903 of such Act (as added by
section 121).
SEC. 126. ESTABLISHMENT OF QUALITY MEASUREMENT SYSTEMS FOR
MEDICARE VALUE-BASED PURCHASING PROGRAMS.
(a) In General.--Title XVIII (42 U.S.C. 1395 et seq.) is
amended--
(1) by redesignating part E as part F; and
(2) by inserting after part D the following new part:
``Part E--Value-Based Purchasing
``quality measurement systems for value-based purchasing programs
``Sec. 1860E-1. (a) Establishment.--
``(1) In general.--The Secretary shall develop quality
measurement systems for purposes of providing value-based
payments to--
``(A) hospitals pursuant to section 1860E-2;
``(B) physicians and practitioners pursuant to section
1860E-3;
``(C) plans pursuant to section 1860E-4;
``(D) end stage renal disease providers and facilities
pursuant to section 1860E-5; and
``(E) home health agencies pursuant to section 1860E-6.
``(2) Quality.--The systems developed under paragraph (1)
shall measure the quality of the care furnished by the
provider involved.
``(3) High quality health care defined.--In this part, the
term `high quality health care' means health care that is
safe, effective, patient-centered, timely, equitable,
efficient, necessary, and appropriate.
``(b) Requirements for Systems.--Under each quality
measurement system described in subsection (a)(1), the
Secretary shall do the following:
``(1) Measures.--
``(A) In general.--Subject to subparagraph (B), the
Secretary shall select measures of quality to be used by the
Secretary under each system.
``(B) Requirements.--In selecting the measures to be used
under each system pursuant to subparagraph (A), the Secretary
shall, to the extent feasible, ensure that--
``(i) such measures are evidence-based, reliable and valid,
and feasible to collect and report;
``(ii) measures of process, structure, outcomes,
beneficiary experience, efficiency, and equity are included;
``(iii) measures of overuse and underuse of health care
items and services are included;
``(iv)(I) at least 1 measure of health information
technology infrastructure that enables the provision of high
quality health care and facilitates the exchange of health
information, such as the use of one or more elements of a
qualified health information system (as defined in
subparagraph (E)), is included during the first year each
system is implemented; and
``(II) additional measures of health information technology
infrastructure are included in subsequent years;
``(v) in the case of the system that is used to provide
value-based payments to hospitals under section 1860E-2, by
not later than January 1, 2008, at least 5 measures that take
into account the unique characteristics of small hospitals
located in rural areas and frontier areas are included; and
``(vi) measures that assess the quality of care furnished
to frail individuals over the age of 75 and to individuals
with multiple complex chronic conditions are included.
``(C) Requirement for collection of data on a measure for 1
year prior to use under the systems.--Data on any measure
selected by the Secretary under subparagraph (A) must be
collected by the Secretary for at least a 12-month period
before such measure may be used to determine whether a
provider receives a value-based payment under a program
described in subsection (a)(1).
[[Page S8970]]
``(D) Authority to vary measures.--
``(i) Under system applicable to hospitals.--In the case of
the system applicable to hospitals under section 1860E-2, the
Secretary may vary the measures selected under subparagraph
(A) by hospital depending on the size of, and the scope of
services provided by, the hospital.
``(ii) Under system applicable to physicians and
practitioners.--In the case of the system applicable to
physicians and practitioners under section 1860E-3, the
Secretary may vary the measures selected under subparagraph
(A) by physician or practitioner depending on the specialty
of the physician, the type of practitioner, or the volume of
services furnished to beneficiaries by the physician or
practitioner.
``(iii) Under system applicable to esrd providers and
facilities.--In the case of the system applicable to
providers of services and renal dialysis facilities under
section 1860E-5, the Secretary may vary the measures selected
under subparagraph (A) by provider or facility depending on
the type of, the size of, and the scope of services provided
by, the provider or facility.
``(iv) Under system applicable to home health agencies.--In
the case of the system applicable to home health agencies
under section 1860E-6, the Secretary may vary the measures
selected under subparagraph (A) by agency depending on the
size of, and the scope of services provided by, the agency.
``(E) Qualified health information system defined.--For
purposes of subparagraph (B)(iv)(I), the term `qualified
health information system' means a computerized system
(including hardware, software, and training) that--
``(i) protects the privacy and security of health
information and properly encrypts such health information;
``(ii) maintains and provides access to patients' health
records in an electronic format;
``(iii) incorporates decision support software to reduce
medical errors and enhance health care quality;
``(iv) is consistent with data standards and certification
processes recommended by the Secretary;
``(v) allows for the reporting of quality measures; and
``(vi) includes other features determined appropriate by
the Secretary.
``(2) Weights of measures.--
``(A) In general.--The Secretary shall assign weights to
the measures used by the Secretary under each system.
``(B) Consideration.--If the Secretary determines
appropriate, in assigning the weights under subparagraph
(A)--
``(i) measures of clinical effectiveness shall be weighted
more heavily than measures of beneficiary experience; and
``(ii) measures of risk adjusted outcomes shall be weighted
more heavily than measures of process; and
``(3) Risk adjustment.--The Secretary shall establish
procedures, as appropriate, to control for differences in
beneficiary health status and beneficiary characteristics. To
the extent feasible, such procedures may be based on existing
models for controlling for such differences.
``(4) Maintenance.--
``(A) In general.--The Secretary shall, as determined
appropriate, but not more often than once each 12-month
period, update each system, including through--
``(i) the addition of more accurate and precise measures
under the systems and the retirement of existing outdated
measures under the system;
``(ii) the refinement of the weights assigned to measures
under the system; and
``(iii) the refinement of the risk adjustment procedures
established pursuant to paragraph (3) under the system.
``(B) Update shall allow for comparison of data.--Each
update under subparagraph (A) of a quality measurement system
shall allow for the comparison of data from one year to the
next for purposes of providing value-based payments under the
programs described in subsection (a)(1).
``(5) Use of most recent quality data.--
``(A) In general.--Except as provided in subparagraph (B),
the Secretary shall use the most recent quality data with
respect to the provider involved that is available to the
Secretary.
``(B) Insufficient data due to low volume.--If the
Secretary determines that there is insufficient data with
respect to a measure or measures because of a low number of
services provided, the Secretary may aggregate data across
more than 1 fiscal or calendar year, as the case may be.
``(c) Requirements for Developing and Updating the
Systems.--In developing and updating each quality measurement
system under this section, the Secretary shall--
``(1) take into account the quality measures developed by
nationally recognized quality measurement organizations,
researchers, health care provider organizations, and other
appropriate groups;
``(2) consult with, and take into account the
recommendations of, the entity that the Secretary has an
arrangement with under subsection (e);
``(3) consult with provider-based groups and clinical
specialty societies;
``(4) take into account existing quality measurement
systems that have been developed through a rigorous process
of validation and with the involvement of entities and
persons described in subsection (e)(2)(B); and
``(5) take into account--
``(A) each of the reports by the Medicare Payment Advisory
Commission that are required under the Medicare Value
Purchasing Act of 2005;
``(B) the results of--
``(i) the demonstrations required under such Act;
``(ii) the demonstration program under section 1866A;
``(iii) the demonstration program under section 1866C; and
``(iv) any other demonstration or pilot program conducted
by the Secretary relating to measuring and rewarding quality
and efficiency of care; and
``(C) the report by the Institute of Medicine of the
National Academy of Sciences under section 238(b) of the
Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (Public Law 108-173).
``(d) Requirements for Implementing the Systems.--In
implementing each quality measurement system under this
section, the Secretary shall consult with entities--
``(1) that have joined together to develop strategies for
quality measurement and reporting, including the feasibility
of collecting and reporting meaningful data on quality
measures; and
``(2) that involve representatives of health care
providers, health plans, consumers, employers, purchasers,
quality experts, government agencies, and other individuals
and groups that are interested in quality of care.
``(e) Arrangement With an Entity To Provide Advice and
Recommendations.--
``(1) Arrangement.--On and after July 1, 2006, the
Secretary shall have in place an arrangement with an entity
that meets the requirements described in paragraph (2) under
which such entity provides the Secretary with advice on, and
recommendations with respect to, the development and updating
of the quality measurement systems under this section,
including the assigning of weights to the measures under
subsection (b)(2).
``(2) Requirements described.--The requirements described
in this paragraph are the following:
``(A) The entity is a private nonprofit entity governed by
an executive director and a board.
``(B) The members of the entity include representatives
of--
``(i)(I) health plans and providers receiving reimbursement
under this title for the provision of items and services,
including health plans and providers with experience in the
care of the frail elderly and individuals with multiple
complex chronic conditions; or
``(II) groups representing such health plans and providers;
``(ii) groups representing individuals receiving benefits
under this title;
``(iii) purchasers and employers or groups representing
purchasers or employers;
``(iv) organizations that focus on quality improvement as
well as the measurement and reporting of quality measures;
``(v) State government health programs;
``(vi) persons skilled in the conduct and interpretation of
biomedical, health services, and health economics research
and with expertise in outcomes and effectiveness research and
technology assessment; and
``(vii) persons or entities involved in the development and
establishment of standards and certification for health
information technology systems and clinical data.
``(C) The membership of the entity is representative of
individuals with experience with--
``(i) urban health care issues;
``(ii) safety net health care issues; and
``(iii) rural and frontier health care issues.
``(D) The entity does not charge a fee for membership for
participation in the work of the entity related to the
arrangement with the Secretary under paragraph (1). If the
entity does require a fee for membership for participation in
other functions of the entity, there shall be no linkage
between such fee and participation in the work of the entity
related to such arrangement with the Secretary.
``(E) The entity--
``(i) permits any member described in subparagraph (B) to
vote on matters of the entity related to the arrangement with
the Secretary under paragraph (1); and
``(ii) ensures that such members have an equal vote on such
matters .
``(F) With respect to matters related to the arrangement
with the Secretary under paragraph (1), the entity conducts
its business in an open and transparent manner and provides
the opportunity for public comment.
``(G) The entity operates as a voluntary consensus
standards setting organization as defined for purposes of
section 12(d) of the National Technology Transfer and
Advancement Act of 1995 (Public Law 104-113) and Office of
Management and Budget Revised Circular A-119 (published in
the Federal Register on February 10, 1998).''.
(b) Conforming References to Previous Part E.--Any
reference in law (in effect before the date of the enactment
of this Act) to part E of title XVIII of the Social Security
Act is deemed a reference to part F of such title (as in
effect after such date).
SEC. 127. EXCEPTION TO FEDERAL ANTI-KICKBACK AND PHYSICIAN
SELF REFERRAL LAWS FOR THE PROVISION OF
PERMITTED SUPPORT.
(a) Anti-Kickback.--Section 1128B(b) (42 U.S.C. 1320a-
7b(b)(3)) is amended--
(1) in paragraph (3)--
(A) in subparagraph (G), by striking ``and'' at the end;
(B) in subparagraph (H), as added by section 237(d) of the
Medicare Prescription
[[Page S8971]]
Drug, Improvement, and Modernization Act of 2003 (Public Law
108-173; 117 Stat. 2213)--
(i) by moving such subparagraph 2 ems to the left; and
(ii) by striking the period at the end and inserting a
semicolon;
(C) by redesignating subparagraph (H), as added by section
431(a) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173; 117 Stat.
2287), as subparagraph (I);
(D) in subparagraph (I), as so redesignated--
(i) by moving such subparagraph 2 ems to the left; and
(ii) by striking the period at the end and inserting ``;
and''; and
(E) by adding at the end the following new:
``(J) during the 5-year period beginning on the date the
Secretary issues the interim final rule under section
801(c)(1) of the Medicare Value Purchasing Act of 2005, the
provision, with or without charge, of any permitted support
(as defined in paragraph (4)).''; and
(2) by adding at the end the following new paragraph:
``(4) Permitted support.--
``(A) Definition of permitted support.--Subject to
subparagraph (B), in this section, the term `permitted
support' means the provision of any equipment, item,
information, right, license, intellectual property, software,
training, or service used for developing, implementing,
operating, or facilitating the use of systems designed to
improve the quality of health care and to promote the
electronic exchange of health information.
``(B) Exception.--The term `permitted support' shall not
include the provision of--
``(i) any support that is determined in a manner that is
related to the volume or value of any referrals or other
business generated between the parties for which payment may
be made in whole or in part under a Federal health care
program;
``(ii) any support that has more than incidental utility or
value to the recipient beyond the exchange of health care
information; or
``(iii) any health information technology system, product,
or service that is not capable of exchanging health care
information in compliance with data standards consistent with
interoperability.
``(C) Determination.--In establishing regulations with
respect to the requirement under subparagraph (B)(iii), the
Secretary shall take in account--
``(I) whether the health information technology system,
product, or service is widely accepted within the industry
and whether there is sufficient industry experience to ensure
successful implementation of the system, product, or service;
and
``(II) whether the health information technology system,
product, or service improves quality of care, enhances
patient safety, or provides greater administrative
efficiencies.''.
(b) Physician Self-Referral.--Section 1877(e) (42 U.S.C.
1395nn(e)) is amended by adding at the end the following new
paragraph:
``(9) Permitted support.--During the 5-year period
beginning on the date the Secretary issues the interim final
rule under section 801(c)(1) of the Medicare Value Purchasing
Act of 2005, the provision, with or without charge, of any
permitted support (as defined in section 1128B(b)(4)).''.
(c) Regulations.--In order to carry out the amendments made
by this section--
(1) the Secretary shall issue an interim final rule with
comment period by not later than the date that is 180 days
after the date of enactment of this Act;
(2) the Secretary shall issue a final rule by not later
than the date that is 180 days after the date that the
interim final rule under paragraph (1) is issued.
CHAPTER 2--VALUE BASED PURCHASING
SEC. 131. VALUE BASED PURCHASING PROGRAMS; SENSE OF THE
SENATE.
(a) Medicare Value Based Purchasing Pilot Program.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall
establish under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) a value based purchasing pilot program
based on the reporting of quality measures pursuant to those
adopted in section 1860E-1 of the Social Security Act (as
added by section 126). Such pilot program should be based on
experience gained through previous demonstration projects
conducted by the Secretary, including demonstration projects
conducted under sections 1866A and 1866C of the Social
Security Act (42 U.S.C. 1395cc-1; 1395cc-3), section 649 of
the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173; 117 Stat.
2322), and other relevant work conducted by private entities.
(2) Expansion.--Not later than 2 years after conducting the
pilot program under paragraph (1), the Secretary shall
transition and implement such program on a national basis.
(3) Information technology.--Providers reporting quality
measurement data electronically under this section shall
report such data pursuant to the standards adopted under
title XXIX of the Public Health Service Act (as added by
section 121).
(4) Funding.--The Secretary shall ensure that the total
amount of expenditures under this Act in a year does not
exceed the total amount of expenditures that would have been
expended in such year under this Act if this subsection had
not been enacted.
(b) Medicaid Value Based Purchasing Programs.--
(1) In general.--The Secretary shall authorize waivers
under section 1115 of the Social Security Act (42 U.S.C.
1315) for States to establish value based purchasing programs
for State medicaid programs established under title XIX of
such Act (42 U.S.C. 1396 et seq.). Such programs shall be
based on the reporting of quality measures pursuant to those
adopted in section 1860E-1 of the Social Security Act (as
added by section 126).
(2) Information technology.--Providers reporting quality
measurement data electronically under this section shall
report such data pursuant to the standards adopted under
title XXIX of the Public Health Service Act (as added by
section 121).
(3) Waiver.--In authorizing such waivers, the Secretary
shall waive any provisions of title XI or XIX of the Social
Security Act that would otherwise prevent a State from
establishing a value based purchasing program in accordance
with paragraph (1).
Subtitle C--Patient Safety and Quality Improvement
SEC. 141. SHORT TITLE.
This subtitle may be cited as the ``Patient Safety and
Quality Improvement Act of 2005''.
SEC. 142. FINDINGS AND PURPOSES.
(a) Findings.--Congress makes the following findings:
(1) In 1999, the Institute of Medicine released a report
entitled To Err is Human that described medical errors as the
eighth leading cause of death in the United States, with as
many as 98,000 people dying as a result of medical errors
each year.
(2) To address these deaths and injuries due to medical
errors, the health care system must identify and learn from
such errors so that systems of care can be improved.
(3) In their report, the Institute of Medicine called on
Congress to provide legal protections with respect to
information reported for the purposes of quality improvement
and patient safety.
(4) The Health, Education, Labor, and Pensions Committee of
the Senate held 4 hearings in the 106th Congress and 1
hearing in the 107th Congress on patient safety where experts
in the field supported the recommendation of the Institute of
Medicine for congressional action.
(5) Myriad public and private patient safety initiatives
have begun. The Quality Interagency Coordination Taskforce
has recommended steps to improve patient safety that may be
taken by each Federal agency involved in health care and
activities relating to these steps are ongoing.
(6) The research on patient safety unequivocally calls for
a learning environment, rather than a punitive environment,
in order to improve patient safety.
(7) Voluntary data gathering systems are more supportive
than mandatory systems in creating the learning environment
referred to in paragraph (6) as stated in the Institute of
Medicine's report.
(8) Promising patient safety reporting systems have been
established throughout the United States and the best ways to
structure and use these systems are currently being
determined, largely through projects funded by the Agency for
Healthcare Research and Quality.
(9) Many organizations currently collecting patient safety
data have expressed a need for legal protections that will
allow them to review protected information and collaborate in
the development and implementation of patient safety
improvement strategies. Currently, the State peer review
protections are inadequate to allow the sharing of
information to promote patient safety.
(b) Purposes.--It is the purpose of this subtitle to--
(1) encourage a culture of safety and quality in the United
States health care system by providing for legal protection
of information reported voluntarily for the purposes of
quality improvement and patient safety; and
(2) ensure accountability by raising standards and
expectations for continuous quality improvements in patient
safety.
SEC. 143. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.
Title IX of the Public Health Service Act (42 U.S.C. 299 et
seq.) is amended--
(1) in section 912(c), by inserting ``, in accordance with
part C,'' after ``The Director shall'';
(2) by redesignating part C as part D;
(3) by redesignating sections 921 through 928, as sections
931 through 938, respectively;
(4) in 934(d) (as so redesignated), by striking the second
sentence and inserting the following: ``Penalties provided
for under this section shall be imposed and collected by the
Secretary using the administrative and procedural processes
used to impose and collect civil money penalties under
section 1128A of the Social Security Act (other than
subsections (a) and (b), the second sentence of subsection
(f), and subsections (i), (m), and (n)), unless the Secretary
determines that a modification of procedures would be more
suitable or reasonable to carry out this subsection and
provides for such modification by regulation.'';
(5) in section 938(1) (as so redesignated), by striking
``921'' and inserting ``931''; and
(6) by inserting after part B the following:
``PART C--PATIENT SAFETY IMPROVEMENT
``SEC. 921. DEFINITIONS.
``In this part:
[[Page S8972]]
``(1) Non-identifiable information.--
``(A) In general.--The term `non-identifiable information'
means, with respect to information, that the information is
presented in a form and manner that prevents the
identification of a provider, a patient, or a reporter of
patient safety data.
``(B) Identifiability of patient.--For purposes of
subparagraph (A), the term `presented in a form and manner
that prevents the identification of a patient' means, with
respect to information that has been subject to rules
promulgated pursuant to section 264(c) of the Health
Insurance Portability and Accountability Act of 1996 (42
U.S.C. 1320d-2 note), that the information has been de-
identified so that it is no longer individually identifiable
health information as defined in such rules.
``(2) Patient safety data.--
``(A) In general.--The term `patient safety data' means--
``(i) any data, reports, records, memoranda, analyses (such
as root cause analyses), or written or oral statements that
are--
``(I) collected or developed by a provider for reporting to
a patient safety organization, provided that they are
reported to the patient safety organization within 60 days;
``(II) requested by a patient safety organization
(including the contents of such request), if they are
reported to the patient safety organization within 60 days;
``(III) reported to a provider by a patient safety
organization; or
``(IV) collected by a patient safety organization from
another patient safety organization, or developed by a
patient safety organization;
that could result in improved patient safety, health care
quality, or health care outcomes; or
``(ii) any deliberative work or process with respect to any
patient safety data described in clause (i).
``(B) Limitation.--
``(i) Collection.--If the original material from which any
data, reports, records, memoranda, analyses (such as root
case analyses), or written or oral statements referred to in
subclause (I) or (IV) of subparagraph (A)(i) are collected
and is not patient safety data, the act of such collection
shall not make such original material patient safety data for
purposes of this part.
``(ii) Separate data.--The term `patient safety data' shall
not include information (including a patient's medical
record, billing and discharge information or any other
patient or provider record) that is collected or developed
separately from and that exists separately from patient
safety data. Such separate information or a copy thereof
submitted to a patient safety organization shall not itself
be considered as patient safety data. Nothing in this part,
except for section 922(f)(1), shall be construed to limit--
``(I) the discovery of or admissibility of information
described in this subparagraph in a criminal, civil, or
administrative proceeding;
``(II) the reporting of information described in this
subparagraph to a Federal, State, or local governmental
agency for public health surveillance, investigation, or
other public health purposes or health oversight purposes; or
``(III) a provider's recordkeeping obligation with respect
to information described in this subparagraph under Federal,
State, or local law.
``(3) Patient safety organization.--The term `patient
safety organization' means a private or public entity or
component thereof that is currently listed by the Secretary
pursuant to section 924(c).
``(4) Patient safety organization activities.--The term
`patient safety organization activities' means the following
activities, which are deemed to be necessary for the proper
management and administration of a patient safety
organization:
``(A) The conduct, as its primary activity, of efforts to
improve patient safety and the quality of health care
delivery.
``(B) The collection and analysis of patient safety data
that are submitted by more than one provider.
``(C) The development and dissemination of information to
providers with respect to improving patient safety, such as
recommendations, protocols, or information regarding best
practices.
``(D) The utilization of patient safety data for the
purposes of encouraging a culture of safety and of providing
direct feedback and assistance to providers to effectively
minimize patient risk.
``(E) The maintenance of procedures to preserve
confidentiality with respect to patient safety data.
``(F) The provision of appropriate security measures with
respect to patient safety data.
``(G) The utilization of qualified staff.
``(5) Person.--The term `person' includes Federal, State,
and local government agencies.
``(6) Provider.--The term `provider' means--
``(A) a person licensed or otherwise authorized under State
law to provide health care services, including--
``(i) a hospital, nursing facility, comprehensive
outpatient rehabilitation facility, home health agency,
hospice program, renal dialysis facility, ambulatory surgical
center, pharmacy, physician or health care practitioner's
office, long term care facility, behavior health residential
treatment facility, clinical laboratory, or health center; or
``(ii) a physician, physician assistant, nurse
practitioner, clinical nurse specialist, certified registered
nurse anesthetist, certified nurse midwife, psychologist,
certified social worker, registered dietitian or nutrition
professional, physical or occupational therapist, pharmacist,
or other individual health care practitioner; or
``(B) any other person specified in regulations promulgated
by the Secretary.
``SEC. 922. PRIVILEGE AND CONFIDENTIALITY PROTECTIONS.
``(a) Privilege.--Notwithstanding any other provision of
Federal, State, or local law, patient safety data shall be
privileged and, subject to the provisions of subsection
(c)(1), shall not be--
``(1) subject to a Federal, State, or local civil,
criminal, or administrative subpoena;
``(2) subject to discovery in connection with a Federal,
State, or local civil, criminal, or administrative
proceeding;
``(3) disclosed pursuant to section 552 of title 5, United
States Code (commonly known as the Freedom of Information
Act) or any other similar Federal, State, or local law;
``(4) admitted as evidence or otherwise disclosed in any
Federal, State, or local civil, criminal, or administrative
proceeding; or
``(5) utilized in a disciplinary proceeding against a
provider.
``(b) Confidentiality.--Notwithstanding any other provision
of Federal, State, or local law, and subject to the
provisions of subsections (c) and (d), patient safety data
shall be confidential and shall not be disclosed.
``(c) Exceptions to Privilege and Confidentiality.--Nothing
in this section shall be construed to prohibit one or more of
the following uses or disclosures:
``(1) Disclosure by a provider or patient safety
organization of relevant patient safety data for use in a
criminal proceeding only after a court makes an in camera
determination that such patient safety data contains evidence
of a wanton and criminal act to directly harm the patient.
``(2) Voluntary disclosure of non-identifiable patient
safety data by a provider or a patient safety organization.
``(d) Protected Disclosure and Use of Information.--Nothing
in this section shall be construed to prohibit one or more of
the following uses or disclosures:
``(1) Disclosure of patient safety data by a person that is
a provider, a patient safety organization, or a contractor of
a provider or patient safety organization, to another such
person, to carry out patient safety organization activities.
``(2) Disclosure of patient safety data by a provider or
patient safety organization to grantees or contractors
carrying out patient safety research, evaluation, or
demonstration projects authorized by the Director.
``(3) Disclosure of patient safety data by a provider to an
accrediting body that accredits that provider.
``(4) Voluntary disclosure of patient safety data by a
patient safety organization to the Secretary for public
health surveillance if the consent of each provider
identified in, or providing, such data is obtained prior to
such disclosure. Nothing in the preceding sentence shall be
construed to prevent the release of patient safety data that
is provided by, or that relates solely to, a provider from
which the consent described in such sentence is obtained
because one or more other providers do not provide such
consent with respect to the disclosure of patient safety date
that relates to such nonconsenting providers. Consent for the
future release of patient safety data for such purposes may
be requested by the patient safety organization at the time
the data is submitted.
``(5) Voluntary disclosure of patient safety data by a
patient safety organization to State of local government
agencies for public health surveillance if the consent of
each provider identified in, or providing, such data is
obtained prior to such disclosure. Nothing in the preceding
sentence shall be construed to prevent the release of patient
safety data that is provided by, or that relates solely to, a
provider from which the consent described in such sentence is
obtained because one or more other providers do not provide
such consent with respect to the disclosure of patient safety
date that relates to such nonconsenting providers. Consent
for the future release of patient safety data for such
purposes may be requested by the patient safety organization
at the time the data is submitted.
``(e) Continued Protection of Information after
Disclosure.--
``(1) In general.--Except as provided in paragraph (2),
patient safety data that is used or disclosed shall continue
to be privileged and confidential as provided for in
subsections (a) and (b), and the provisions of such
subsections shall apply to such data in the possession or
control of--
``(A) a provider or patient safety organization that
possessed such data before the use or disclosure; or
``(B) a person to whom such data was disclosed.
``(2) Exception.--Notwithstanding paragraph (1), and
subject to paragraph (3)--
``(A) if patient safety data is used or disclosed as
provided for in subsection (c)(1), and such use or disclosure
is in open court, the confidentiality protections provided
for in subsection (b) shall no longer apply to such data; and
``(B) if patient safety data is used or disclosed as
provided for in subsection (c)(2), the privilege and
confidentiality protections provided for in subsections (a)
and (b) shall no longer apply to such data.
[[Page S8973]]
``(3) Construction.--Paragraph (2) shall not be construed
as terminating or limiting the privilege or confidentiality
protections provided for in subsection (a) or (b) with
respect to data other than the specific data used or
disclosed as provided for in subsection (c).
``(f) Limitation on Actions.--
``(1) Patient safety organizations.--Except to enforce
disclosures pursuant to subsection (c)(1), no action may be
brought or process served against a patient safety
organization to compel disclosure of information collected or
developed under this part whether or not such information is
patient safety data unless such information is specifically
identified, is not patient safety data, and cannot otherwise
be obtained.
``(2) Providers.--An accrediting body shall not take an
accrediting action against a provider based on the good faith
participation of the provider in the collection, development,
reporting, or maintenance of patient safety data in
accordance with this part. An accrediting body may not
require a provider to reveal its communications with any
patient safety organization established in accordance with
this part.
``(g) Reporter Protection.--
``(1) In general.--A provider may not take an adverse
employment action, as described in paragraph (2), against an
individual based upon the fact that the individual in good
faith reported information--
``(A) to the provider with the intention of having the
information reported to a patient safety organization; or
``(B) directly to a patient safety organization.
``(2) Adverse employment action.--For purposes of this
subsection, an `adverse employment action' includes--
``(A) loss of employment, the failure to promote an
individual, or the failure to provide any other employment-
related benefit for which the individual would otherwise be
eligible; or
``(B) an adverse evaluation or decision made in relation to
accreditation, certification, credentialing, or licensing of
the individual.
``(h) Enforcement.--
``(1) Prohibition.--Except as provided in subsections (c)
and (d) and as otherwise provided for in this section, it
shall be unlawful for any person to negligently or
intentionally disclose any patient safety data, and any such
person shall, upon adjudication, be assessed in accordance
with section 934(d).
``(2) Relation to hipaa.--The penalty provided for under
paragraph (1) shall not apply if the defendant would
otherwise be subject to a penalty under the regulations
promulgated under section 264(c) of the Health Insurance
Portability and Accountability Act of 1996 (42 U.S.C. 1320d-2
note) or under section 1176 of the Social Security Act (42
U.S.C. 1320d-5) for the same disclosure.
``(3) Equitable relief.--
``(A) In general.--Without limiting remedies available to
other parties, a civil action may be brought by any aggrieved
individual to enjoin any act or practice that violates
subsection (g) and to obtain other appropriate equitable
relief (including reinstatement, back pay, and restoration of
benefits) to redress such violation.
``(B) Against state employees.--An entity that is a State
or an agency of a State government may not assert the
privilege described in subsection (a) unless before the time
of the assertion, the entity or, in the case of and with
respect to an agency, the State has consented to be subject
to an action as described by this paragraph, and that consent
has remained in effect.
``(i) Rule of Construction.--Nothing in this section shall
be construed to--
``(1) limit other privileges that are available under
Federal, State, or local laws that provide greater
confidentiality protections or privileges than the privilege
and confidentiality protections provided for in this section;
``(2) limit, alter, or affect the requirements of Federal,
State, or local law pertaining to information that is not
privileged or confidential under this section;
``(3) alter or affect the implementation of any provision
of section 264(c) of the Health Insurance Portability and
Accountability Act of 1996 (Public Law 104-191; 110 Stat.
2033), section 1176 of the Social Security Act (42 U.S.C.
1320d-5), or any regulation promulgated under such sections;
``(4) limit the authority of any provider, patient safety
organization, or other person to enter into a contract
requiring greater confidentiality or delegating authority to
make a disclosure or use in accordance with subsection (c) or
(d); and
``(5) prohibit a provider from reporting a crime to law
enforcement authorities, regardless of whether knowledge of
the existence of, or the description of, the crime is based
on patient safety data, so long as the provider does not
disclose patient safety data in making such report.
``SEC. 923. PATIENT SAFETY NETWORK OF DATABASES.
``(a) In General.--The Secretary shall maintain a patient
safety network of databases that provides an interactive
evidence-based management resource for providers, patient
safety organizations, and other persons. The network of
databases shall have the capacity to accept, aggregate, and
analyze nonidentifiable patient safety data voluntarily
reported by patient safety organizations, providers, or other
persons.
``(b) Network of Database Standards.--The Secretary may
determine common formats for the reporting to the patient
safety network of databases maintained under subsection (a)
of nonidentifiable patient safety data, including necessary
data elements, common and consistent definitions, and a
standardized computer interface for the processing of such
data. To the extent practicable, such standards shall be
consistent with the administrative simplification provisions
of Part C of title XI of the Social Security Act.
``SEC. 924. PATIENT SAFETY ORGANIZATION CERTIFICATION AND
LISTING.
``(a) Certification.--
``(1) Initial certification.--Except as provided in
paragraph (2), an entity that seeks to be a patient safety
organization shall submit an initial certification to the
Secretary that the entity intends to perform the patient
safety organization activities.
``(2) Delayed certification of collection from more than
one provider.--An entity that seeks to be a patient safety
organization may--
``(A) submit an initial certification that it intends to
perform patient safety organization activities other than the
activities described in subparagraph (B) of section 921(4);
and
``(B) within 2 years of submitting the initial
certification under subparagraph (A), submit a supplemental
certification that it performs the patient safety
organization activities described in subparagraphs (A)
through (F) of section 921(4).
``(3) Expiration and renewal.--
``(A) Expiration.--An initial certification under paragraph
(1) or (2)(A) shall expire on the date that is 3 years after
it is submitted.
``(B) Renewal.--
``(i) In general.--An entity that seeks to remain a patient
safety organization after the expiration of an initial
certification under paragraph (1) or (2)(A) shall, within the
3-year period described in subparagraph (A), submit a renewal
certification to the Secretary that the entity performs the
patient safety organization activities described in section
921(4).
``(ii) Term of renewal.--A renewal certification under
clause (i) shall expire on the date that is 3 years after the
date on which it is submitted, and may be renewed in the same
manner as an initial certification.
``(b) Acceptance of Certification.--Upon the submission by
an organization of an initial certification pursuant to
subsection (a)(1) or (a)(2)(A), a supplemental certification
pursuant to subsection (a)(2)(B), or a renewal certification
pursuant to subsection (a)(3)(B), the Secretary shall review
such certification and--
``(1) if such certification meets the requirements of
subsection (a)(1), (a)(2)(A), (a)(2)(B), or (a)(3)(B), as
applicable, the Secretary shall notify the organization that
such certification is accepted; or
``(2) if such certification does not meet such
requirements, as applicable, the Secretary shall notify the
organization that such certification is not accepted and the
reasons therefor.
``(c) Listing.--
``(1) In general.--Except as otherwise provided in this
subsection, the Secretary shall compile and maintain a
current listing of patient safety organizations with respect
to which the Secretary has accepted a certification pursuant
to subsection (b).
``(2) Removal from listing.--The Secretary shall remove
from the listing under paragraph (1)--
``(A) an entity with respect to which the Secretary has
accepted an initial certification pursuant to subsection
(a)(2)(A) and which does not submit a supplemental
certification pursuant to subsection (a)(2)(B) that is
accepted by the Secretary;
``(B) an entity whose certification expires and which does
not submit a renewal application that is accepted by the
Secretary; and
``(C) an entity with respect to which the Secretary revokes
the Secretary's acceptance of the entity's certification,
pursuant to subsection (d).
``(d) Revocation of Acceptance.--
``(1) In general.--Except as provided in paragraph (2), if
the Secretary determines (through a review of patient safety
organization activities) that a patient safety organization
does not perform one of the patient safety organization
activities described in subparagraph (A) through (F) of
section 921(4), the Secretary may, after notice and an
opportunity for a hearing, revoke the Secretary's acceptance
of the certification of such organization.
``(2) Delayed certification of collection from more than
one provider.--A revocation under paragraph (1) may not be
based on a determination that the organization does not
perform the activity described in section 921(4)(B) if--
``(A) the listing of the organization is based on its
submittal of an initial certification under subsection
(a)(2)(A);
``(B) the organization has not submitted a supplemental
certification under subsection (a)(2)(B); and
``(C) the 2-year period described in subsection (a)(2)(B)
has not expired.
``(e) Notification of Revocation or Removal from Listing.--
``(1) Supplying confirmation of notification to
providers.--Within 15 days of a revocation under subsection
(d)(1), a patient safety organization shall submit to the
Secretary a confirmation that the organization has taken all
reasonable actions to notify each provider whose patient
safety data is
[[Page S8974]]
collected or analyzed by the organization of such revocation.
``(2) Publication.--Upon the revocation of an acceptance of
an organization's certification under subsection (d)(1), or
upon the removal of an organization from the listing under
subsection (c)(2), the Secretary shall publish notice of the
revocation or removal in the Federal Register.
``(f) Status of Data After Removal from Listing.--
``(1) New data.--With respect to the privilege and
confidentiality protections described in section 922, data
submitted to an organization within 30 days after the
organization is removed from the listing under subsection
(c)(2) shall have the same status as data submitted while the
organization was still listed.
``(2) Protection to continue to apply.--If the privilege
and confidentiality protections described in section 922
applied to data while an organization was listed, or during
the 30-day period described in paragraph (1), such
protections shall continue to apply to such data after the
organization is removed from the listing under subsection
(c)(2).
``(g) Disposition of Data.--If the Secretary removes an
organization from the listing as provided for in subsection
(c)(2), with respect to the patient safety data that the
organization received from providers, the organization
shall--
``(1) with the approval of the provider and another patient
safety organization, transfer such data to such other
organization;
``(2) return such data to the person that submitted the
data; or
``(3) if returning such data to such person is not
practicable, destroy such data.
``SEC. 925. TECHNICAL ASSISTANCE.
``The Secretary, acting through the Director, may provide
technical assistance to patient safety organizations,
including convening annual meetings for patient safety
organizations to discuss methodology, communication, data
collection, or privacy concerns.
``SEC. 926. PROMOTING THE INTEROPERABILITY OF HEALTH CARE
INFORMATION TECHNOLOGY SYSTEMS.
``(a) Development.--Not later than 36 months after the date
of enactment of the Patient Safety and Quality Improvement
Act of 2005, the Secretary shall develop or adopt voluntary
standards that promote the electronic exchange of health care
information.
``(b) Updates.--The Secretary shall provide for the ongoing
review and periodic updating of the standards developed under
subsection (a).
``(c) Dissemination.--The Secretary shall provide for the
dissemination of the standards developed and updated under
this section.
``SEC. 927. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated such sums as may
be necessary to carry out this part.''.
SEC. 144. STUDIES AND REPORTS.
(a) In General.--The Secretary of Health and Human Services
shall enter into a contract (based upon a competitive
contracting process) with an appropriate research
organization for the conduct of a study to assess the impact
of medical technologies and therapies on patient safety,
patient benefit, health care quality, and the costs of care
as well as productivity growth. Such study shall examine--
(1) the extent to which factors, such as the use of labor
and technological advances, have contributed to increases in
the share of the gross domestic product that is devoted to
health care and the impact of medical technologies and
therapies on such increases;
(2) the extent to which early and appropriate introduction
and integration of innovative medical technologies and
therapies may affect the overall productivity and quality of
the health care delivery systems of the United States; and
(3) the relationship of such medical technologies and
therapies to patient safety, patient benefit, health care
quality, and cost of care.
(b) Report.--Not later than 18 months 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 containing the results of the
study conducted under subsection (a).
Subtitle D--Fraud and Abuse
SEC. 151. NATIONAL EXPANSION OF THE MEDICARE-MEDICAID DATA
MATCH PILOT PROGRAM.
(a) Requirement of the Medicare Integrity Program.--Section
1893 of the Social Security Act (42 U.S.C. 1395ddd) is
amended--
(1) in subsection (b), by adding at the end the following:
``(6) The Medicare-Medicaid data match program in
accordance with subsection (g).''; and
(2) by adding at the end the following:
``(g) Medicare-Medicaid Data Match Program.--
``(1) Expansion of program.--
``(A) In general.--The Secretary shall enter into contracts
with eligible entities for the purpose of ensuring that,
beginning with 2006, the Medicare-Medicaid data match program
(commonly referred to as the `Medi-Medi Program') is
conducted with respect to the program established under this
title and the applicable number of State Medicaid programs
under title XIX for the purpose of--
``(i) identifying vulnerabilities in both such programs;
``(ii) assisting States, as appropriate, to take action to
protect the Federal share of expenditures under the Medicaid
program; and
``(iii) increasing the effectiveness and efficiency of both
such programs through cost avoidance, savings, and
recoupments of fraudulent, wasteful, or abusive expenditures.
``(B) Applicable number.--For purposes of subparagraph (A),
the term `applicable number' means--
``(i) in the case of fiscal year 2006, 10 State Medicaid
programs;
``(ii) in the case of fiscal year 2007, 12 State Medicaid
programs; and
``(iii) in the case of fiscal year 2008, 15 State Medicaid
programs.
``(2) Limited waiver authority.--The Secretary shall waive
only such requirements of this section and of titles XI and
XIX as are necessary to carry out paragraph (1).''.
(b) Funding.--Section 1817(k)(4) of the Social Security Act
(42 U.S.C. 1395i(k)(4)) is amended--
(1) in subparagraph (A), by striking ``subparagraph (B)''
and inserting ``subparagraphs (B) and (C)''; and
(2) by adding at the end the following:
``(C) Expansion of the medicare-medicaid data match
program.--Of the amount appropriated under subparagraph (A)
for a fiscal year, the following amounts shall be used to
carry out section 1893(b)(6) for that year:
``(i) $10,000,000 of the amount appropriated for fiscal
year 2006.
``(ii) $12,200,000 of the amount appropriated for fiscal
year 2007.
``(iii) $15,800,000 of the amount appropriated for fiscal
year 2008.''.
Subtitle E--Miscellaneous Provisions
SEC. 161. SENSE OF THE SENATE ON ESTABLISHING A MANDATED
BENEFITS COMMISSION.
It is the Sense of the Senate that--
(1) there should be established an independent Federal
entity to study and provide advice to Congress on existing
and proposed federally mandated health insurance benefits
offered by employer-sponsored health plans and insurance
issuers; and
(2) advice provided under paragraph (1) should be evidence-
and actuarially-based, and take into consideration the
population costs and benefits, including the health,
financial, and social impact on affected populations, safety
and medical efficacy, the impact on costs and access to
insurance generally, and to different types of insurance
products, the impact on labor costs and jobs, and any other
relevant factors.
SEC. 162. ENFORCEMENT OF REIMBURSEMENT PROVISIONS BY
FIDUCIARIES.
Section 502(a)(3) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1132(a)(3)) is amended by
inserting before the semicolon the following: ``(which may
include the recovery of amounts on behalf of the plan by a
fiduciary enforcing the terms of the plan that provide a
right of recovery by reimbursement or subrogation with
respect to benefits provided to a participant or
beneficiary)''.
TITLE II--EXPANDING ACCESS TO AFFORDABLE HEALTH COVERAGE THROUGH TAX
INCENTIVES AND OTHER INITIATIVES
Subtitle A--Refundable Health Insurance Credit
SEC. 201. REFUNDABLE HEALTH INSURANCE COSTS CREDIT.
(a) Allowance of Credit.--
(1) In general.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable personal credits) is amended by redesignating
section 36 as section 37 and by inserting after section 35
the following new section:
``SEC. 36. HEALTH INSURANCE COSTS FOR UNINSURED INDIVIDUALS.
``(a) Allowance of Credit.--In the case of an individual,
there shall be allowed as a credit against the tax imposed by
this subtitle for the taxable year an amount equal to the
amount paid by the taxpayer during such taxable year for
qualified health insurance for the taxpayer and the
taxpayer's spouse and dependents.
``(b) Limitations.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), the amount allowed as a credit under subsection (a) to
the taxpayer for the taxable year shall not exceed the lesser
of--
``(A) 90 percent of the sum of the amounts paid by the
taxpayer for qualified health insurance for each individual
referred to in subsection (a) for coverage months of the
individual during the taxable year, or
``(B) $3,000.
``(2) Monthly limitation.--
``(A) In general.--For purposes of paragraph (1), amounts
paid by the taxpayer for qualified health insurance for an
individual for any coverage month of such individual during
the taxable year shall not be taken into account to the
extent such amounts exceed the amount equal to \1/12\ of--
``(i) $1,111 if such individual is the taxpayer,
``(ii) $1,111 if--
``(I) such individual is the spouse of the taxpayer,
``(II) the taxpayer and such spouse are married as of the
first day of such month, and
[[Page S8975]]
``(III) the taxpayer files a joint return for the taxable
year,
``(iii) $1,111 if such individual has attained the age of
24 as of the close of the taxable year and is a dependent of
the taxpayer for such taxable year, and
``(iv) one-half of the amount described in clause (i) if
such individual has not attained the age of 24 as of the
close of the taxable year and is a dependent of the taxpayer
for such taxable year.
``(B) Limitation to 2 young dependents.--If there are more
than 2 individuals described in subparagraph (A)(iv) with
respect to the taxpayer for any coverage month, the aggregate
amounts paid by the taxpayer for qualified health insurance
for such individuals which may be taken into account under
paragraph (1) shall not exceed 1/12 of the dollar amount in
effect under subparagraph (A)(i) for the coverage month.
``(C) Special rule for married individuals.--In the case of
a taxpayer--
``(i) who is married (within the meaning of section 7703)
as of the close of the taxable year but does not file a joint
return for such year, and
``(ii) who does not live apart from such taxpayer's spouse
at all times during the taxable year,
any dollar limitation imposed under this paragraph on amounts
paid for qualified health insurance for individuals described
in subparagraph (A)(iv) shall be divided equally between the
taxpayer and the taxpayer's spouse unless they agree on a
different division.
``(3) Income phaseout of credit percentage for one-person
coverage.--
``(A) Phaseout for unmarried individuals (other than
surviving spouses and heads of households).--In the case of
an individual (other than a surviving spouse, the head of a
household, or a married individual) with one-person coverage,
if such individual has modified adjusted gross income--
``(i) in excess of $15,000 for a taxable year but not in
excess of $20,000, the 90 percent under paragraph (1)(B)
shall be reduced by the number of percentage points which
bears the same ratio to 40 percentage points as--
``(I) the excess of modified adjusted gross income in
excess of $15,000, bears to
``(II) $5,000, or
``(ii) in excess of $20,000 for a taxable year, the 90
percent under paragraph (1)(B) shall be reduced by the sum of
40 percentage points plus the number of percentage points
which bears the same ratio to 50 percentage points as--
``(I) the excess of modified adjusted gross income in
excess of $20,000, bears to
``(II) $10,000.
``(B) Phaseout for other individuals.--In the case of a
taxpayer (other than an individual described in subparagraph
(A) or (C)) with one-person coverage, if the taxpayer has
modified adjusted gross income in excess of $25,000 for a
taxable year, the 90 percent under paragraph (1)(B) shall be
reduced by the number of percentage points which bears the
same ratio to 90 percentage points as--
``(i) the excess of modified adjusted gross income in
excess of $25,000, bears to
``(ii) $15,000.
``(C) Married filing separate return.--In the case of a
taxpayer who is married filing a separate return for the
taxable year and who has one-person coverage, if the taxpayer
has modified adjusted gross income in excess of $12,500 for
the taxable year, the 90 percent under paragraph (1)(B) shall
be reduced by the number of percentage points which bears the
same ratio to 90 percentage points as--
``(i) the excess of modified adjusted gross income in
excess of $12,500, bears to
``(ii) $7,500.
``(4) Income phaseout of credit percentage for coverage of
more than one person.--
``(A) In general.--Except as provided in subparagraph (B),
in the case of a taxpayer with coverage of more than one
person, if the taxpayer has modified adjusted gross income in
excess of $25,000 for a taxable year, the 90 percent under
paragraph (1)(B) shall be reduced by the number of percentage
points which bears the same ratio to 90 percentage points
as--
``(i) the excess of modified adjusted gross income in
excess of $25,000, bears to
``(ii) $35,000.
``(B) Married filing separate return.--In the case of a
taxpayer who is married filing a separate return for the
taxable year and who has coverage of more than one person, if
the taxpayer has modified adjusted gross income in excess of
$12,500 for the taxable year, the 90 percent under paragraph
(1)(B) shall be reduced by the number of percentage points
which bears the same ratio to 90 percentage points as--
``(i) the excess of modified adjusted gross income in
excess of $12,500, bears to
``(ii) $17,500.
``(5) Rounding.--Any percentage resulting from a reduction
under paragraphs (3) and (4) shall be rounded to the nearest
one-tenth of a percent.
``(6) Modified adjusted gross income.--The term `modified
adjusted gross income' means adjusted gross income
determined--
``(A) without regard to this section and sections 911, 931,
and 933, and
``(B) after application of sections 86, 135, 137, 219, 221,
and 469.
``(c) Coverage Month.--For purposes of this section--
``(1) In general.--The term `coverage month' means, with
respect to an individual, any month if--
``(A) as of the first day of such month such individual is
covered by qualified health insurance, and
``(B) the premium for coverage under such insurance for
such month is paid by the taxpayer.
``(2) Group health plan coverage.--
``(A) In general.--The term `coverage month' shall not
include any month for which if, as of the first day of the
month, the individual participates in any group health plan
(within the meaning of section 5000 without regard to section
5000(d)).
``(B) Exception for certain permitted coverage.--
Subparagraph (A) shall not apply to an individual if the
individual's only coverage for a month is coverage described
in clause (i) or (ii) of section 223(c)(1)(B).
``(3) Employer-provided coverage.--The term `coverage
month' shall not include any month during a taxable year if
any amount is not includible in the gross income of the
taxpayer for such year under section 106 (other than coverage
described in clause (i) or (ii) of section 223(c)(1)(B)).
``(4) Medicare, medicaid, and schip.--The term `coverage
month' shall not include any month with respect to an
individual if, as of the first day of such month, such
individual--
``(A) is entitled to any benefits under part A of title
XVIII of the Social Security Act or is enrolled under part B
of such title, or
``(B) is enrolled in the program under title XIX or XXI of
such Act (other than under section 1928 of such Act).
``(5) Certain other coverage.--The term `coverage month'
shall not include any month during a taxable year with
respect to an individual if, as of the first day of such
month at any time during such month, such individual is
enrolled in a program under--
``(A) chapter 89 of title 5, United States Code, or
``(B) chapter 55 of title 10, United States Code.
``(6) Prisoners.--The term `coverage month' shall not
include any month with respect to an individual if, as of the
first day of such month, such individual is imprisoned under
Federal, State, or local authority.
``(7) Insufficient presence in united states.--The term
`coverage month' shall not include any month during a taxable
year with respect to an individual if such individual is
present in the United States on fewer than 183 days during
such year (determined in accordance with section 7701(b)(7)).
``(d) Qualified Health Insurance.--For purposes of this
section--
``(1) In general.--The term `qualified health insurance'
means health insurance coverage (as defined in section
9832(b)(1)) which--
``(A) is coverage described in paragraph (2), and
``(B) meets the requirements of paragraph (3).
``(2) Eligible coverage.--Coverage described in this
paragraph is the following:
``(A) Coverage under individual health insurance.
``(B) Coverage through a private sector health care
coverage purchasing pool.
``(C) Coverage through a State care coverage purchasing
pool.
``(D) Coverage under a State high-risk pool described in
subparagraph (C) of section 35(e)(1).
``(E) Coverage after December 31, 2006, under an eligible
State buy in program.
``(3) Requirements.--The requirements of this paragraph are
as follows:
``(A) Cost limits.--The coverage meets the requirements of
section 223(c)(2)(A)(ii).
``(B) Maximum benefits.--Under the coverage, the annual and
lifetime maximum benefits are not less than $700,000.
``(C) Broad coverage.--The coverage includes inpatient and
outpatient care, emergency benefits, and physician care.
``(D) Guaranteed renewability.--Such coverage is guaranteed
renewable by the provider.
``(4) Eligible state buy in program.--For purposes of
paragraph (2)(E)--
``(A) In general.--The term `eligible State buy in program'
means a State program under which an individual who--
``(i) is not eligible for assistance under the State
medicaid program under title XIX of the Social Security Act,
``(ii) is not eligible for assistance under the State
children's health insurance program under title XXI of such
Act, or
``(iii) is not a State employee,
is able to buy health insurance coverage through a purchasing
arrangement entered into between the State and a private
sector health care purchasing group or health plan.
``(B) Requirements.--Subparagraph (A) shall only apply to a
State program if--
``(i) the program uses private sector health care
purchasing groups or health plans, and
``(ii) the State maintains separate risk pools for
participants under the State buy in program and other
participants.
``(C) Subsidies.--
``(i) In general.--A State program shall not fail to be
treated as an eligible State buy in program merely because
the State subsidizes the costs of an individual in buying
health insurance coverage under the program.
``(ii) Exception.--Clause (i) shall not apply if the State
subsidy under the program for any adult for any consecutive
12-month period exceeds the applicable dollar amount.
``(iii) Applicable dollar amount.--
[[Page S8976]]
``(I) In general.--For purposes of clause (ii), the
applicable dollar amount is $2,000.
``(II) Reduction.--In the case of a family with annual
income in excess of 133 percent of the applicable poverty
line (as determined in accordance with criteria established
by the Director of the Office of Management and Budget) but
not in excess of 200 percent of such line, the dollar amount
under clause (i) shall be ratably reduced (but not below
zero) for each dollar of such excess. In the case of a family
with annual income in excess of 200 percent of such line, the
applicable dollar amount shall be zero.
``(e) Arrangements Under Which Insurers Contribute to
HSA.--
``(1) In general.--For purposes of this section, health
insurance shall not be treated as qualified health insurance
if the insurer makes contributions to a health savings
account of the taxpayer unless such insurance is provided
under an arrangement described in paragraph (2).
``(2) Arrangements described.--
``(A) Amounts paid for coverage exceed monthly
limitation.--In the case of amounts paid under an arrangement
for health insurance for a coverage month in excess of the
amount in effect under subsection (b)(2)(A) for such month,
an arrangement is described in this subparagraph if under the
arrangement--
``(i) the aggregate amount contributed by the insurer to
any health savings account of the taxpayer does not exceed 90
percent of the excess of--
``(I) the amount paid by the taxpayer for qualified health
insurance under such arrangement for such month, over
``(II) the amount in effect under subsection (b)(2)(A) for
such month, and
``(ii) the amount contributed by the insurer to a qualified
health savings account of the taxpayer, reduced by the amount
of the excess under clause (i), does not exceed 27 percent of
the amount in effect under subsection (b)(2)(A) for such
month.
``(B) Amounts paid for coverage less than monthly
limitation.--In the case of an arrangement under which the
amount paid for qualified health insurance for a coverage
month does not exceed the amount in effect under subsection
(b)(2)(A) for such month, an arrangement is described in this
subparagraph if--
``(i) under the arrangement the value of the insured
benefits (excluding overhead) exceeds 65 percent of the
amount paid for qualified health insurance for such month,
and
``(ii) the amount contributed by the insurer to a qualified
health savings account of the taxpayer does not exceed 27
percent of the amount in effect under subsection (b)(2)(A)
for such month.
``(3) Qualified health savings account.--
``(A) In general.--The term `qualified health savings
account' means a health savings account (as defined in
section 223(d))--
``(i) which is designated (in such form as the Secretary
may prescribe) as a qualified account for purposes of this
section,
``(ii) which may not include any amount other than
contributions described in this subsection and earnings on
such contributions, and
``(iii) with respect to which section 223(f)(4)(A) is
applied by substituting `100 percent' for `10 percent'.
``(B) Subaccounts and separate accounting.--The Secretary
may prescribe rules under which a subaccount within a health
savings account, or separate accounting with respect to
contributions and earnings described in subparagraph (A)(ii),
may be treated in the same manner as a qualified health
savings account.
``(C) Rollovers.--A contribution of a distribution from a
qualified health savings account to another health savings
account shall be treated as a rollover contribution for
purposes of section 223(f)(5) only if the other account is a
qualified health savings account.
``(f) Dependents.--For purposes of this section--
``(1) Dependent defined.--The term `dependent' has the
meaning given such term by section 152 (determined without
regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof).
``(2) Special rule for dependent child of divorced
parents.--An individual who is a child to whom section 152(e)
applies shall be treated as a dependent of the custodial
parent for a coverage month unless the custodial and
noncustodial parent provide otherwise.
``(3) Denial of credit to dependents.--No credit shall be
allowed under this section to any individual with respect to
whom a deduction under section 151(c) is allowable to another
taxpayer for a taxable year beginning in the calendar year in
which such individual's taxable year begins.
``(g) Inflation Adjustments.--
``(1) Credit and health insurance amounts.--In the case of
any taxable year beginning after 2006, each dollar amount
referred to in subsections (b)(1)(B), (b)(2)(A), (d)(3)(B),
and (d)(4)(C)(iii)(I) shall be increased by an amount equal
to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 213(d)(10)(B)(ii) for the calendar year in which the
taxable year begins, determined by substituting `2005' for
`1996' in subclause (II) thereof.
If any amount as adjusted under the preceding sentence is not
a multiple of $10, such amount shall be rounded to the
nearest multiple of $10.
``(2) Income phaseout amounts.--In the case of any taxable
year beginning after 2006, each dollar amount referred to in
paragraph (3) and (4) of subsection (b) shall be increased by
an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2005'
for `calendar year 1992' in subparagraph (B) thereof.
If any amount as adjusted under the preceding sentence is not
a multiple of $50, such amount shall be rounded to the next
lowest multiple of $50.
``(h) Archer MSA Contributions; HSA Contributions.--If a
deduction would be allowed under section 220 to the taxpayer
for a payment for the taxable year to the Archer MSA of an
individual or under section 223 to the taxpayer for a payment
for the taxable year to the Health Savings Account of such
individual, subsection (a) shall not apply to the taxpayer
for any month during such taxable year for which the
taxpayer, spouse, or dependent is an eligible individual for
purposes of either such section.
``(i) Other Rules.--For purposes of this section--
``(1) Coordination with medical expense and premium
deductions for high deductible health plans.--The amount
which would (but for this paragraph) be taken into account by
the taxpayer under section 213 or 224 for the taxable year
shall be reduced by the credit (if any) allowed by this
section to the taxpayer for such year.
``(2) Coordination with deduction for health insurance
costs of self-employed individuals.--No credit shall be
allowable under this section for a taxable year if a
deduction is allowed under section 162(l) for the taxable
year.
``(3) Coordination with advance payment.--Rules similar to
the rules of section 35(g)(1) shall apply to any credit to
which this section applies.
``(4) Coordination with section 35.--If a taxpayer is
eligible for the credit allowed under this section and
section 35 for any taxable year, the taxpayer shall elect
which credit is to be allowed.
``(j) Expenses Must Be Substantiated.--A payment for
insurance to which subsection (a) applies may be taken into
account under this section only if the taxpayer substantiates
such payment in such form as the Secretary may prescribe.
``(k) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of
this section.''.
(b) Information Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 of the Internal Revenue Code of 1986 (relating to
information concerning transactions with other persons) is
amended by inserting after section 6050T the following:
``SEC. 6050U. RETURNS RELATING TO PAYMENTS FOR QUALIFIED
HEALTH INSURANCE.
``(a) In General.--Any person who, in connection with a
trade or business conducted by such person, receives payments
during any calendar year from any individual for coverage of
such individual or any other individual under creditable
health insurance, shall make the return described in
subsection (b) (at such time as the Secretary may by
regulations prescribe) with respect to each individual from
whom such payments were received.
``(b) Form and Manner of Returns.--A return is described in
this subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains--
``(A) the name, address, and TIN of the individual from
whom payments described in subsection (a) were received,
``(B) the name, address, and TIN of each individual who was
provided by such person with coverage under creditable health
insurance by reason of such payments and the period of such
coverage,
``(C) the aggregate amount of payments described in
subsection (a), and
``(D) such other information as the Secretary may
reasonably prescribe.
``(c) Creditable Health Insurance.--For purposes of this
section, the term `creditable health insurance' means
qualified health insurance (as defined in section 36(d)).
``(d) Statements To Be Furnished to Individuals With
Respect to Whom Information Is Required.--Every person
required to make a return under subsection (a) shall furnish
to each individual whose name is required under subsection
(b)(2)(A) to be set forth in such return a written statement
showing--
``(1) the name and address of the person required to make
such return and the phone number of the information contact
for such person,
``(2) the aggregate amount of payments described in
subsection (a) received by the person required to make such
return from the individual to whom the statement is required
to be furnished, and
``(3) the information required under subsection (b)(2)(B)
with respect to such payments.
The written statement required under the preceding sentence
shall be furnished on or before January 31 of the year
following the
[[Page S8977]]
calendar year for which the return under subsection (a) is
required to be made.
``(e) Returns Which Would Be Required To Be Made by 2 or
More Persons.--Except to the extent provided in regulations
prescribed by the Secretary, in the case of any amount
received by any person on behalf of another person, only the
person first receiving such amount shall be required to make
the return under subsection (a).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) of such Code
(relating to definitions) is amended by redesignating clauses
(xiii) through (xviii) as clauses (xiv) through (xix),
respectively, and by inserting after clause (xii) the
following:
``(xiii) section 6050U (relating to returns relating to
payments for qualified health insurance),''.
(B) Paragraph (2) of section 6724(d) of such Code is
amended by striking ``or'' at the end of subparagraph (AA),
by striking the period at the end of the subparagraph (BB)
and inserting ``, or'', and by adding at the end the
following:
``(CC) section 6050U(d) (relating to returns relating to
payments for qualified health insurance).''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 of such Code is
amended by inserting after the item relating to section 6050T
the following:
``Sec. 6050U. Returns relating to payments for qualified health
insurance.''.
(c) Criminal Penalty for Fraud.--Subchapter B of chapter 75
of the Internal Revenue Code of 1986 (relating to other
offenses) is amended by adding at the end the following:
``SEC. 7276. PENALTIES FOR OFFENSES RELATING TO HEALTH
INSURANCE TAX CREDIT.
``Any person who knowingly misuses Department of the
Treasury names, symbols, titles, or initials to convey the
false impression of association with, or approval or
endorsement by, the Department of the Treasury of any
insurance products or group health coverage in connection
with the credit for health insurance costs under section 36
shall on conviction thereof be fined not more than $10,000,
or imprisoned not more than 1 year, or both.''.
(d) Conforming Amendments.--
(1) Section 162(l) of the Internal Revenue Code of 1986 is
amended by adding at the end the following:
``(6) Election to have subsection apply.--No deduction
shall be allowed under paragraph (1) for a taxable year
unless the taxpayer elects to have this subsection apply for
such year.''.
(2) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``, or
from section 36 of such Code''.
(3) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by striking ``35'' and inserting ``36'' and
by inserting after the item relating to section 35 the
following:
``Sec. 36. Health insurance costs for uninsured individuals.''.
(4) The table of sections for subchapter B of chapter 75 of
such Code is amended by adding at the end the following:
``Sec. 7276. Penalties for offenses relating to health insurance tax
credit.''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2005.
(2) Penalties.--The amendments made by subsections (c) and
(d)(4) shall take effect on the date of the enactment of this
Act.
SEC. 202. ADVANCE PAYMENT OF CREDIT TO ISSUERS OF QUALIFIED
HEALTH INSURANCE.
(a) In General.--Chapter 77 of the Internal Revenue Code of
1986 (relating to miscellaneous provisions) is amended by
adding at the end the following:
``SEC. 7529. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE
COSTS OF ELIGIBLE INDIVIDUALS.
``Not later than July 1, 2007, the Secretary shall
establish a program for making payments to providers of
qualified health insurance (as defined in section 36(d)) on
behalf of individuals eligible for the credit under section
36. Such payments shall be made on the basis of modified
adjusted gross income of eligible individuals for the
preceding taxable year.''.
(b) Clerical Amendment.--The table of sections for chapter
77 of the Internal Revenue Code of 1986 is amended by adding
at the end the following:
``Sec. 7529. Advance payment of health insurance credit for purchasers
of qualified health insurance.''.
Subtitle B--High Deductible Health Plans and Health Savings Accounts
SEC. 211. DEDUCTION OF PREMIUMS FOR HIGH DEDUCTIBLE HEALTH
PLANS.
(a) In General.--Part VII of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to additional
itemized deductions for individuals) is amended by
redesignating section 224 as section 225 and by inserting
after section 223 the following new section:
``SEC. 224. PREMIUMS FOR HIGH DEDUCTIBLE HEALTH PLANS.
``(a) Deduction Allowed.--In the case of an individual,
there shall be allowed as a deduction for the taxable year
the aggregate amount paid by or on behalf of such individual
as premiums under a high deductible health plan with respect
to months during such year for which such individual is an
eligible individual with respect to such health plan.
``(b) Definitions.--For purposes of this section--
``(1) Eligible individual.--The term `eligible individual'
has the meaning given such term by section 223(c)(1).
``(2) High deductible health plan.--The term `high
deductible health plan' has the meaning given such term by
section 223(c)(2).
``(c) Special Rules.--
``(1) Deduction allowable for only 1 plan.--For purposes of
this section, in the case of an individual covered by more
than 1 high deductible health plan for any month, the
individual may only take into account amounts paid for 1 of
such plans for such month.
``(2) Group health plan coverage.--
``(A) In general.--No deduction shall be allowed to an
individual under subsection (a) for any amount paid for
coverage under a high deductible health plan for a month if,
as of the first day of that month, that individual
participates in any coverage under a group health plan
(within the meaning of section 5000 without regard to section
5000(d)).
``(B) Exception for certain permitted coverage.--
Subparagraph (A) shall not apply to an individual if the
individual's only coverage under a group health plan for a
month is coverage described in clause (i) or (ii) of section
223(c)(1)(B).
``(3) Medicare eligible individuals.--No deduction shall be
allowed under subsection (a) with respect to any individual
for any month if the individual is entitled to benefits under
title XVIII of the Social Security Act for the month.
``(4) Health savings account required.--A deduction shall
not be allowed under subsection (a) for a taxable year with
respect to an individual unless the individual is an account
beneficiary of a health savings account during a portion of
the taxable year.
``(5) Medical and health savings accounts.--Subsection (a)
shall not apply with respect to any amount which is paid or
distributed out of an Archer MSA or a health savings account
which is not included in gross income under section 220(f) or
223(f), as the case may be.
``(6) Coordination with deduction for health insurance of
self-employed individuals.--The amount taken into account by
the taxpayer in computing the deduction under section 162(l)
shall not be taken into account under this section.
``(7) Coordination with medical expense deduction.--The
amount taken into account by the taxpayer in computing the
deduction under this section shall not be taken into account
under section 213.''.
(b) Deduction Allowed Whether or Not Individual Itemizes
Other Deductions.--Subsection (a) of section 62 of the
Internal Revenue Code of 1986 (defining adjusted gross
income) is amended by inserting before the last sentence at
the end the following new paragraph:
``(21) Premiums for high deductible health plans.--The
deduction allowed by section 224.''.
(c) Coordination With Health Insurance Costs Credit.--
Section 35(g)(2) of the Internal Revenue Code of 1986 is
amended by striking ``or 213'' and inserting ``,213, or
224''.
(d) Clerical Amendment.--The table of sections for part VII
of subchapter B of chapter 1 of the Internal Revenue Code of
1986 is amended by redesignating section 224 as section 225
and by inserting before such item the following new item:
``Sec. 224. Premiums for high deductible health plans.''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2005.
SEC. 212. REFUNDABLE CREDIT FOR CONTRIBUTIONS TO HEALTH
SAVINGS ACCOUNTS OF SMALL BUSINESS EMPLOYEES.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986, as amended by
subtitle A, is amended by inserting after section 36 the
following new section:
``SEC. 36A. SMALL EMPLOYER CONTRIBUTIONS TO HEALTH SAVINGS
ACCOUNTS.
``(a) General Rule.--In the case of an eligible employer,
there shall be allowed as a credit against the tax imposed by
this subtitle an amount equal to the lesser of--
``(1) the amount contributed by such employer to any
qualified health savings account of any employee who is an
eligible individual (as defined in section 223(c)(1)) during
the taxable year, or
``(2) an amount equal to the product of--
``(A) $200 ($500 if coverage for all months described in
subparagraph (B)(i) is family coverage), and
``(B) a fraction--
``(i) the numerator of which is the number of months that
the employee was covered under a high deductible health plan
maintained by the employer, and
``(ii) the denominator of which is the number of months in
the taxable year.
``(b) Eligible Employer.--For purposes of this section--
``(1) In general.--The term `eligible employer' means, with
respect to any taxable year, an employer which--
[[Page S8978]]
``(A) is a small employer, and
``(B) maintains a high deductible health plan under which
all employees of the employer reasonably expected to receive
at least $5,000 of compensation during the taxable year are
eligible to participate.
An employer may exclude from consideration under subparagraph
(B) employees who are covered by an agreement described in
section 410(b)(3)(A) if there is evidence that health
benefits were the subject of good faith bargaining.
``(2) Exception for governmental and tax-exempt
employers.--The term `eligible employer' shall not include
the Federal Government or any employer described in section
457(e)(1).
``(3) Small employer.--
``(A) In general.--The term `small employer' means, with
respect to any calendar year, any employer if such employer
employed an average of 100 or fewer employees on business
days during either of the 2 preceding calendar years. For
purposes of the preceding sentence, a preceding calendar year
may be taken into account only if the employer was in
existence throughout such year.
``(B) Employers not in existence in preceding year.--In the
case of an employer which was not in existence throughout the
1st preceding calendar year, the determination under
subparagraph (A) shall be based on the average number of
employees that it is reasonably expected such employer will
employ on business days in the current calendar year.
``(C) Special rule.--Any reference in this paragraph to an
employer shall include a reference to any predecessor of such
employer.
``(c) Definitions.--For purposes of this section--
``(1) High deductible health plan.--The term `high
deductible health plan' has the meaning given such term by
section 223(c)(2).
``(2) Qualified health savings account.--
``(A) In general.--The term `qualified health savings
account' means a health savings account (as defined in
section 223(d))--
``(i) which is designated (in such form as the Secretary
may prescribe) as a qualified account for purposes of this
section,
``(ii) which may not include any amount other than
contributions described in subsection (a) and earnings on
such contributions, and
``(iii) with respect to which section 223(f)(4)(A) is
applied by substituting `100 percent' for `10 percent'.
``(B) Subaccounts and separate accounting.--The Secretary
may prescribe rules under which a subaccount within a health
savings account, or separate accounting with respect to
contributions and earnings described in subparagraph (A)(ii),
may be treated in the same manner as a qualified health
savings account.
``(C) Rollovers.--A contribution of a distribution from a
qualified health savings account to another health savings
account shall be treated as a rollover contribution for
purposes of section 223(f)(5) only if the other account is a
qualified health savings account.
``(d) Special Rules.--For purposes of this section--
``(1) Aggregation rules.--All persons treated as a single
employer under subsection (a) or (b) of section 52, or
subsection (n) or (o) of section 414, shall be treated as one
person.
``(2) Disallowance of deduction.--No deduction shall be
allowed for that portion of contributions to any health
savings accounts for the taxable year which is equal to the
credit determined under subsection (a).
``(3) Election not to claim credit.--This section shall not
apply to a taxpayer for any taxable year if such taxpayer
elects to have this section not apply for such taxable
year.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``, or
from section 36A of such Code''.
(2) The table of sections for subpart C of part IV of
chapter 1 of the Internal Revenue Code of 1986, as amended by
subtitle A, is amended by inserting after the item relating
to section 36 the following new item:
``Sec. 36A. Small employer contributions to health savings accounts.''.
(c) Effective Date.--The amendments made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2005.
Subtitle C--Improvement of the Health Coverage Tax Credit
SEC. 221. CHANGE IN STATE-BASED COVERAGE RULES RELATED TO
PREEXISTING CONDITIONS.
(a) In General.--Section 35(e)(2) of the Internal Revenue
Code of 1986 (relating to requirements for State-based
coverage) is amended by adding at the end the following:
``(C) Limitation on preexisting condition exclusion
period.--The term `qualified health insurance' does not
include any coverage described in subparagraphs (C) through
(H) of paragraph (1) that imposes a pre-existing condition
exclusion with respect to any individual unless--
``(i) such exclusion relates to a physical or mental
condition, regardless of the cause of the condition, for
which medical advice, diagnosis, care, or treatment was
recommended or received within the 6-month period ending on
the date the individual seeks to enroll in the coverage,
``(ii) such exclusion extends for a period of not more than
12 months after the individual seeks to enroll in the
coverage,
``(iii) the period of any such preexisting condition
exclusion is reduced by the length of the aggregate of the
periods of creditable coverage (as defined in section
9801(c)) applicable to the individual as of the enrollment
date, and
``(iv) such exclusion is not an exclusion described in
section 9801(d).''.
(b) Conforming Amendments.--
(1) Internal revenue code of 1986.--Subparagraph (A) of
section 35(e)(2) of such Code is amended--
(A) by striking clause (ii); and
(B) by redesignating clauses (iii) and (iv) as clauses (ii)
and (iii), respectively.
(2) Workforce investment act of 1998 amendments.--Section
173(f)(2)(B) of the Workforce Investment Act of 1998 (29
U.S.C. 2918(f)(2)(B)) is amended--
(A) in clause (i)--
(i) by striking subclause (II); and
(ii) by redesignating subclauses (III) and (IV) as
subclauses (II) and (III), respectively; and
(B) by adding at the end the following:
``(iii) Limitation on preexisting condition exclusion
period.--The term `qualified health insurance' does not
include any coverage described in clauses (iii) through (ix)
of subparagraph (A) that imposes a pre-existing condition
exclusion with respect to any individual unless--
``(I) such exclusion relates to a physical or mental
condition, regardless of the cause of the condition, for
which medical advice, diagnosis, care, or treatment was
recommended or received within the 6-month period ending on
the date the individual seeks to enroll in the coverage;
``(II) such exclusion extends for a period of not more than
12 months after the individual seeks to enroll in the
coverage;
``(III) the period of any such preexisting condition
exclusion is reduced by the length of the aggregate of the
periods of creditable coverage (as defined in section 9801(c)
of the Internal Revenue Code of 1986) applicable to the
individual as of the enrollment date; and
``(IV) such exclusion is not an exclusion described in
section 9801(d) of such Code.''.
(c) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2005.
SEC. 222. ELIGIBILITY OF SPOUSE OF CERTAIN INDIVIDUALS
ENTITLED TO MEDICARE.
(a) In General.--Subsection (b) of section 35 of such Code
(defining eligible coverage month) is amended by adding at
the end the following:
``(3) Special rule for spouse of individual entitled to
medicare.--Any month which would be an eligible coverage
month with respect to a taxpayer (determined without regard
to subsection (f)(2)(A)) shall be an eligible coverage month
for any spouse of such taxpayer, provided the spouse has
attained age 55 and meets the requirements of clauses (ii),
(iii), and (iv) of paragraph (1)(A).''.
(b) Effective Date.--The amendment made by subsection (a)
applies to taxable years beginning after December 31, 2005.
SEC. 223. ELIGIBLE PBGC PENSION RECIPIENT.
(a) In General.--Subparagraph (B) of section 35(c)(4) of
such Code (relating to eligible PBGC pension recipients) is
amended by inserting before the period the following ``, or,
after August 6, 2002, received from such Corporation a one-
time single-sum pension payment in lieu of an annuity''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as if included in the enactment of section
201 of the Trade Act of 2002 (Public Law 107-210, 116 Stat.
954).
SEC. 224. APPLICATION OF OPTION TO OFFER STATE-BASED COVERAGE
TO PUERTO RICO, NORTHERN MARIANA ISLANDS,
AMERICAN SAMOA, GUAM, AND THE UNITED STATES
VIRGIN ISLANDS.
(a) In General.--Section 35(e) of such Code (relating to
requirements for qualified health insurance) is amended by
adding at the end the following:
``(4) Application to puerto rico, northern mariana islands,
american samoa, guam, and the united states virgin islands.--
For purposes of this section, Puerto Rico, Northern Mariana
Islands, American Samoa, Guam, and the United States Virgin
Islands shall be considered States.''.
(b) Conforming Amendment.--Section 173(f)(2) of the
Workforce Investment Act of 1998 (29 U.S.C. 2918(f)(2)) is
amended by adding at the end the following:
``(D) Application to northern mariana islands, american
samoa, guam, and the united states virgin islands.--For
purposes of subsection (a)(4)(A) and this subsection, the
term `State' shall include the Northern Mariana Islands,
American Samoa, Guam, and the United States Virgin
Islands.''.
(c) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2005.
SEC. 225. CLARIFICATION OF DISCLOSURE RULES.
(a) In General.--Subsection (k) of section 6103 of such
Code (relating to disclosure of certain returns and return
information for tax administration purposes) is amended by
adding at the end the following:
``(10) Disclosure of certain return information for
purposes of carrying out a program for advance payment of
credit for health insurance costs of eligible individuals.--
The Secretary may disclose to providers of health insurance,
administrators of health plans, or contractors of such
[[Page S8979]]
providers or administrators, for any certified individual (as
defined in section 7527(c)) the taxpayer identity and health
insurance member and group numbers of the certified
individual (and any qualifying family member as defined in
section 35(d), if applicable) and the amount and period of
the payment, to the extent the Secretary deems necessary for
the administration of the program established by section 7527
(relating to advance payment of credit for health insurance
costs of eligible individuals).''.
(b) Conforming Amendments.--
(1) Section 6103 of such Code (relating to confidentiality
and disclosure of returns and return information) is
amended--
(A) in subsection (a)(3), by inserting ``(k)(10),'' after
``(e)(1)(D)(iii),'';
(B) in subsection (l), by striking paragraph (18); and
(C) in subsection (p)--
(i) in paragraph (3)(A)--
(I) by striking ``or (9)'' and inserting ``(9), or (10)'';
and
(II) by striking ``(17), or (18)'' and inserting ``or
(17)''; and
(ii) in paragraph (4), by striking ``(18)'' after
``(l)(16)'' each place it appears.
(2) Section 7213(a)(2) of such Code (relating to
unauthorized disclosure of information) is amended by
inserting ``(k)(10)'' before ``(l)(6)''.
(3) Section 7213A(a)(1)(B) of such Code (relating to
unauthorized inspection of returns or return information) is
amended by striking ``subsection (l)(18) or (n) of section
6103'' and inserting ``section 6103(n)''.
(c) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2005.
SEC. 226. CLARIFICATION THAT STATE-BASED COBRA CONTINUATION
COVERAGE IS SUBJECT TO SAME RULES AS FEDERAL
COBRA.
(a) In General.--Section 35(e)(2) of such Code (relating to
state-based coverage requirements) is amended--
(1) in subparagraph (A), in the matter preceding clause
(i), by striking ``(B)'' and inserting ``(C)''; and
(2) in subparagraph(B)(i), by striking ``(B)'' and
inserting ``(C)''.
(b) Conforming Amendments.--Section 173(f)(2)(B) of the
Workforce Investment Act of 1998 (29 U.S.C. 2918(f)(2)(B)) is
amended--
(1) in clause (i), in the matter preceding subclause (I),
by striking ``(ii)'' and inserting ``(iii)''; and
(2) in clause (ii)(I), by striking ``(ii)'' and inserting
``(iii)''.
(c) Effective Date.--The amendments made by this section
shall take effect as if included in the enactment of sections
201 and 203, respectively, of the Trade Act of 2002 (Public
Law 107-210, 116 Stat. 954).
SEC. 227. APPLICATION OF RULES FOR OTHER SPECIFIED COVERAGE
TO ELIGIBLE ALTERNATIVE TAA RECIPIENTS
CONSISTENT WITH RULES FOR OTHER ELIGIBLE
INDIVIDUALS.
(a) In General.--Section 35(f)(1) of such Code (relating to
subsidized coverage) is amended by striking subparagraph (B)
and redesignating subparagraph (C) as subparagraph (B).
(b) Conforming Amendments.--Section 173(f)(7)(A) of the
Workforce Investment Act of 1998 (29 U.S.C. 2918(f)(7)(A)) is
amended by striking clause (ii) and redesignating clause
(iii) as clause (ii).
Subtitle D--Long-Term Care Insurance
SEC. 231. SENSE OF THE SENATE CONCERNING LONG-TERM CARE.
It is the sense of the Senate that Congress should take
steps to make long-term care more affordable by providing tax
incentives for the purchase of long-term care insurance,
support for family caregivers, and making necessary public
program reforms.
Subtitle E--Other Provisions
SEC. 241. DISPOSITION OF UNUSED HEALTH BENEFITS IN CAFETERIA
PLANS AND FLEXIBLE SPENDING ARRANGEMENTS.
(a) In General.--Section 125 of the Internal Revenue Code
of 1986 (relating to cafeteria plans) is amended by
redesignating subsections (h) and (i) as subsections (i) and
(j), respectively, and by inserting after subsection (g) the
following:
``(h) Contributions of Certain Unused Health Benefits.--
``(1) In general.--For purposes of this title, a plan or
other arrangement shall not fail to be treated as a cafeteria
plan solely because qualified benefits under such plan
include a health flexible spending arrangement under which
not more than $500 of unused health benefits may be--
``(A) carried forward to the succeeding plan year of such
health flexible spending arrangement, or
``(B) to the extent permitted by section 106(c),
contributed by the employer to a health savings account (as
defined in section 223(d)) maintained for the benefit of the
employee.
``(2) Health flexible spending arrangement.--
``(A) In general.--For purposes of this subsection, the
term `health flexible spending arrangement' means a flexible
spending arrangement (as defined in section 106(c)) that is a
qualified benefit and only permits reimbursement for expenses
for medical care (as defined in section 213(d)(1), without
regard to subparagraphs (C) and (D) thereof).
``(B) Flexible spending arrangement.--A flexible spending
arrangement is a benefit program which provides employees
with coverage under which--
``(i) specified incurred expenses may be reimbursed
(subject to reimbursement maximums and other reasonable
conditions), and
``(ii) the maximum amount of reimbursement which is
reasonably available to a participant for such coverage is
less than 500 percent of the value of such coverage.
In the case of an insured plan, the maximum amount reasonably
available shall be determined on the basis of the underlying
coverage.
``(3) Unused health benefits.--For purposes of this
subsection, with respect to an employee, the term `unused
health benefits' means the excess of--
``(A) the maximum amount of reimbursement allowable to the
employee for a plan year under a health flexible spending
arrangement, over
``(B) the actual amount of reimbursement for such year
under such arrangement.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to taxable years beginning after December 31,
2004.
SEC. 242. MICROENTREPRENEURS.
Section 404(8) of the Assets for Independence Act (42
U.S.C. 604 note) is amended by adding at the end the
following:
``(F) High deductible health insurance.--
``(i) In general.--The eligible individual's contribution
(as an employer or employee) for coverage under a high
deductible health plan (as defined in section 223(c)(2) of
the Internal Revenue Code of 1986).
``(ii) Definition of employee.--For purposes of clause (i),
the term `employee' includes an individual described in
section 401(c)(1) of the Internal Revenue Code of 1986.''.
SEC. 243. STUDY ON ACCESS TO AFFORDABLE HEALTH INSURANCE FOR
FULL-TIME COLLEGE AND UNIVERSITY STUDENTS.
(a) Sense of the Senate.--It is the sense of the Senate
that, because a considerable number of the United States'
uninsured population are young adults who are enrolled full-
time at an institution of higher education, Congress should
determine whether health care coverage proposals targeting
this population would be effective.
(b) Study Required.--The Government Accountability Office
shall provide for the conduct of a study to evaluate existing
and potential sources of affordable health insurance coverage
for graduate and undergraduate students enrolled at an
institution of higher education (as defined in section 1201
of the Higher Education Act of 1965 (20 U.S.C. 1141)).
(c) Required Elements of Study.--In conducting the study
under subsection (b), the Government Accountability Office
shall, at a minimum, examine the following:
(1) Student demographics.--
(A) In general.--The size and characteristics of the
insured and uninsured population of undergraduate and
graduate students enrolled at institutions of higher
education. Such data shall be differentiated as provided for
in subparagraphs (B) and (C).
(B) Statistical breakdown.--The data concerning the
uninsured student population collected under subparagraph (A)
shall be differentiated by--
(i) the full-time, full-time equivalent, and part-time
enrollment status of the students involved;
(ii) the type of institution involved (such as a public,
private, non-profit, or community institution);
(iii) the length and type of educational program involved
(such as a certificate or diploma program, a 2-year or 4-year
degree program, a masters degree program, or a doctoral
degree program); and
(iv) the undergraduate and graduate student populations
involved.
(C) Coverage.--The data concerning the insured student
population collected under subparagraph (A) shall be
differentiated by the sources of coverage for such students,
including the number and percentage of such insured students
who lose parental (or other) coverage during the course of
their enrollment at such institutions and the age at which
such coverage is lost.
(2) Impact analysis.--The financial and other impact of
uninsured students at such institutions, as compared to
insured students, on--
(A) the health of students;
(B) the student's family;
(C) the student's educational progress; and
(D) education and health care institutions and facilities.
(3) Assessment of existing programs.--The effect of
mandatory and voluntary programs on the access of students to
health insurance coverage, including--
(A) the level and type of coverage provided through
mandatory and voluntary State and institutionally-sponsored
health care programs currently providing health care
insurance coverage to students;
(B) the average premium paid with respect to students
covered under such plans;
(C) the extent to which any State or institutional health
insurance plan may serve as a model for the expansion of
access to health insurance for all full-time undergraduate
and graduate students attending an institution of higher
education; and
(D) whether such programs targeted to the student
population would be more effective in reducing the overall
rate of uninsured relative to proposals targeted to broader
populations.
(4) Incentives and disincentives.--The existence of
incentives and disincentives offered to institutions of
higher education to expand access to health care coverage for
students, including--
[[Page S8980]]
(A) an assessment of the types of incentives and
disincentives that may be used to encourage or require an
institution of higher education to include health care
coverage for all of its students on a mandatory basis,
including financial, regulatory, administrative, and other
incentives or disincentives;
(B) a list of burdensome regulatory or administrative
reporting and other requirements (from the Department of
Education or other governmental agencies) that could be
waived without compromising program integrity as a means of
encouraging institutions of higher education to provide
uninsured students with access to health care coverage;
(C) other incentives or disincentives that would increase
the level of institutional participation in health care
coverage programs; and
(D) an analysis of the costs and effectiveness (to reduce
the number of uninsured students) of including the cost of
health insurance as an allowable cost of attendance under the
Higher Education Act of 1965, and the impact of such
inclusion on the student's financial aid package.
(e) Consultation with Congress.--In carrying out the study
under subsection (b), the Government Accountability Office
shall consult on a regular basis with the Secretary of
Education, the Secretary of Health and Human Services, the
Committee on the Budget of the Senate, the Committee on
Health, Education, Labor, and Pensions of the Senate, and the
Committee on Education and the Workforce of the House of
Representatives.
(f) Report.--Not later than 1 year after the date of
enactment of this Act, the Government Accountability Office
shall prepare and submit to the Committee on the Budget and
the Committee on Health, Education, Labor, and Pensions of
the Senate, and the Committee on Education and the Workforce
of the House of Representatives, a report concerning the
results of the study conducted under this section.
SEC. 244. EXTENSION OF FUNDING FOR OPERATION OF STATE HIGH
RISK HEALTH INSURANCE POOLS.
Section 2745 of the Public Health Service Act (42 U.S.C.
300gg-45) is amended to read as follows:
``SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS.
``(a) Extension of Seed Grants to States.--The Secretary
shall provide from the funds appropriated under subsection
(d)(1)(A) a grant of up to $1,000,000 to each State that has
not created a qualified high risk pool as of the date of
enactment of this section for the State's costs of creation
and initial operation of such a pool.
``(b) Grants for Operational Losses.--
``(1) In general.--In the case of a State that has
established a qualified high risk pool that--
``(A) restricts premiums charged under the pool to no more
than 150 percent of the premium for applicable standard risk
rates;
``(B) offers a choice of two or more coverage options
through the pool; and
``(C) has in effect a mechanism reasonably designed to
ensure continued funding of losses incurred by the State
after the end of fiscal year 2004 in connection with
operation of the pool;
the Secretary shall provide, from the funds appropriated
under subsection (d)(1)(B)(i) and allotted to the State under
paragraph (2), a grant for the losses incurred by the State
in connection with the operation of the pool.
``(2) Allotment.--The amounts appropriated under subsection
(d)(1)(B)(i) for a fiscal year shall be made available to the
States (or the entities that operate the high risk pool under
applicable State law) as follows:
``(A) An amount equal to 50 percent of the appropriated
amount for the fiscal year shall be allocated in equal
amounts among each eligible State that applies for assistance
under this subsection.
``(B) An amount equal to 25 percent of the appropriated
amount for the fiscal year shall be allocated among the
States so that the amount provided to a State bears the same
ratio to such available amount as the number of uninsured
individuals in the State bears to the total number of
uninsured individuals in all States (as determined by the
Secretary).
``(C) An amount equal to 25 percent of the appropriated
amount for the fiscal year shall be allocated among the
States so that the amount provided to a State bears the same
ratio to such available amount as the number of individuals
enrolled in health care coverage through the qualified high
risk pool of the State bears to the total number of
individuals so enrolled through qualified high risk pools in
all States (as determined by the Secretary).
``(c) Bonus Grants for Supplemental Consumer Benefits.--
``(1) In general.--In the case of a State that has
established a qualified high risk pool, the Secretary shall
provide, from the funds appropriated under subsection
(d)(1)(B)(ii) and allotted to the State under paragraph (3),
a grant to be used to provide supplemental consumer benefits
to enrollees or potential enrollees (or defined subsets of
such enrollees or potential enrollees) in qualified high risk
pools.
``(2) Benefits.--A State shall use amounts received under a
grant under this subsection to provide one or more of the
following benefits:
``(A) Low-income premium subsidies.
``(B) A reduction in premium trends, actual premiums, or
other cost-sharing requirements.
``(C) An expansion or broadening of the pool of individuals
eligible for coverage, including eliminating waiting lists,
increasing enrollment caps, or providing flexibility in
enrollment rules.
``(D) Less stringent rules, or additional waiver authority,
with respect to coverage of pre-existing conditions.
``(E) Increased benefits.
``(F) The establishment of disease management programs.
``(3) Limitation.--In allotting amounts under this
subsection, the Secretary shall ensure that no State receives
an amount that exceeds 10 percent of the amount appropriated
for the fiscal year involved under subsection (d)(1)(B)(ii).
``(4) Rule of construction.--Nothing in this subsection
shall be construed to prohibit States that, on the date of
enactment of the State High Risk Pool Funding Extension Act
of 2005, are in the process of implementing programs to
provide benefits of the type described in paragraph (2), from
being eligible for a grant under this subsection.
``(d) Funding.--
``(1) In general.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are
authorized and appropriated--
``(A) $15,000,000 for the period of fiscal years 2005 and
2006 to carry out subsection (a); and
``(B) $75,000,000 for each of fiscal years 2005 through
2009, of which--
``(i) two-thirds of the amount appropriated for a fiscal
year shall be made available for allotments under subsection
(b)(2); and
``(ii) one-third of the amount appropriated for a fiscal
year shall be made available for allotments under subsection
(c)(2).
``(2) Availability.--Funds appropriated under this
subsection for a fiscal year shall remain available for
obligation through the end of the following fiscal year.
``(3) Reallotment.--If, on June 30 of each fiscal year, the
Secretary determines that all amounts appropriated under
paragraph (1)(B)(ii) for the fiscal year are not allotted,
such remaining amounts shall be allotted among States
receiving grants under subsection (b) for the fiscal year in
amounts determined appropriate by the Secretary.
``(4) No entitlement.--Nothing in this section shall be
construed as providing a State with an entitlement to a grant
under this section.
``(e) Applications.--To be eligible for a grant under this
section, a State shall submit to the Secretary an application
at such time, in such manner, and containing such information
as the Secretary may require.
``(f) Definitions.--In this section:
``(1) Qualified high risk pool.--
``(A) In general.--The term `qualified high risk pool' has
the meaning given such term in section 2744(c)(2), except
that with respect to subparagraph (A) of such section a State
may elect to provide for the enrollment of eligible
individuals through--
``(i) a combination of a qualified high risk pool and an
acceptable alternative mechanism; or
``(ii) other health insurance coverage described in
subparagraph (B).
``(B) Health insurance coverage.--Health insurance coverage
described in this subparagraph is individual health insurance
coverage--
``(i) that meets the requirements of section 2741;
``(ii) that is subject to limits on the rates charged to
individuals;
``(iii) that is available to all individuals eligible for
health insurance coverage under this title who are not able
to participate in a qualified high risk pool; and
``(iv) the defined rate limit of which does not exceed the
limit allowed for a qualified risk pool that is otherwise
eligible to receive assistance under a grant under this
section.
``(C) Other coverage.--In addition to coverage described in
subparagraph (B), a State may provide for the offering of
health insurance coverage that provides first dollar
coverage, limits on cost-sharing, and comprehensive medical,
hospital and surgical coverage, if the limits on rates for
such coverage do not exceed 125 percent of the limit
described in subparagraph (B)(iv).
``(2) Standard risk rate.--The term `standard risk rate'
means a rate--
``(A) determined under the State high risk pool by
considering the premium rates charged by other health
insurers offering health insurance coverage to individuals in
the insurance market served;
``(B) that is established using reasonable actuarial
techniques; and
``(C) that reflects anticipated claims experience and
expenses for the coverage involved.
``(3) State.--The term `State' means any of the 50 States
and the District of Columbia.''.
SEC. 245. SENSE OF THE SENATE ON AFFORDABLE HEALTH COVERAGE
FOR SMALL EMPLOYERS.
It is the sense of the Senate that Congress should pass
legislation to support expanded, affordable health coverage
options for individuals, particularly those who work for
small businesses, by streamlining and reducing regulations
and expanding the role of associations and other group
purchasing arrangements.
[[Page S8981]]
Subtitle F--Covering Kids
SEC. 251. SHORT TITLE.
This subtitle may be cited as the ``Covering Kids Act of
2005''.
SEC. 252. GRANTS TO PROMOTE INNOVATIVE OUTREACH AND
ENROLLMENT UNDER MEDICAID AND SCHIP.
(a) Grants for Expanded Outreach Activities.--Title XXI of
the Social Security Act (42 U.S.C. 1397aa et seq.) is amended
by adding at the end the following:
``SEC. 2111. EXPANDED OUTREACH ACTIVITIES.
``(a) Grants To Conduct Innovative Outreach and Enrollment
Efforts.--
``(1) In general.--The Secretary shall award grants to
eligible entities to--
``(A) conduct innovative outreach and enrollment efforts
that are designed to increase the enrollment and
participation of eligible children under this title and title
XIX; and
``(B) promote understanding of the importance of health
insurance coverage for prenatal care and children.
``(2) Performance bonuses.--The Secretary may reserve a
portion of the funds appropriated under subsection (g) for a
fiscal year for the purpose of awarding performance bonuses
during the succeeding fiscal year to eligible entities that
meet enrollment goals or other criteria established by the
Secretary.
``(b) Priority for Award of Grants.--
``(1) In general.--In making grants under subsection
(a)(1), the Secretary shall give priority to--
``(A) eligible entities that propose to target geographic
areas with high rates of--
``(i) eligible but unenrolled children, including such
children who reside in rural areas; or
``(ii) racial and ethnic minorities and health disparity
populations, including those proposals that address cultural
and linguistic barriers to enrollment; and
``(B) eligible entities that plan to engage in outreach
efforts with respect to individuals described in subparagraph
(A) and that are--
``(i) Federal health safety net organizations; or
``(ii) faith-based organizations or consortia.
``(2) 10 percent set aside for outreach to indian
children.--An amount equal to 10 percent of the funds
appropriated under subsection (g) for a fiscal year shall be
used by the Secretary to award grants to Indian Health
Service providers and urban Indian organizations receiving
funds under title V of the Indian Health Care Improvement Act
(25 U.S.C. 1651 et seq.) for outreach to, and enrollment of,
children who are Indians.
``(c) Application.--An eligible entity that desires to
receive a grant under subsection (a)(1) shall submit an
application to the Secretary in such form and manner, and
containing such information, as the Secretary may decide.
Such application shall include--
``(1) quality and outcomes performance measures to evaluate
the effectiveness of activities funded by a grant awarded
under this section to ensure that the activities are meeting
their goals; and
``(2) an assurance that the entity shall--
``(A) conduct an assessment of the effectiveness of such
activities against such performance measures; and
``(B) cooperate with the collection and reporting of
enrollment data and other information determined as a result
of conducting such assessments to the Secretary, in such form
and manner as the Secretary shall require.
``(d) Dissemination of Enrollment Data and Information
Determined From Effectiveness Assessments; Annual Report.--
The Secretary shall--
``(1) disseminate to eligible entities and make publicly
available the enrollment data and information collected and
reported in accordance with subsection (c)(2)(B); and
``(2) submit an annual report to Congress on the outreach
activities funded by grants awarded under this section.
``(e) Supplement, Not Supplant.--Federal funds awarded
under this section shall be used to supplement, not supplant,
non-Federal funds that are otherwise available for activities
funded under this section.
``(f) Definitions.--In this section:
``(1) Eligible entity.--The term `eligible entity' means
any of the following:
``(A) A State or local government.
``(B) A Federal health safety net organization.
``(C) A national, local, or community-based public or
nonprofit private organization.
``(D) A faith-based organization or consortia, to the
extent that a grant awarded to such an entity is consistent
with the requirements of section 1955 of the Public Health
Service Act (42 U.S.C. 300x-65) relating to a grant award to
non-governmental entities.
``(E) An elementary or secondary school.
``(2) Federal health safety net organization.--The term
`Federal health safety net organization' means--
``(A) an Indian tribe, tribal organization, or an urban
Indian organization receiving funds under title V of the
Indian Health Care Improvement Act (25 U.S.C. 1651 et seq.),
or an Indian Health Service provider;
``(B) a Federally-qualified health center (as defined in
section 1905(l)(2)(B));
``(C) a hospital defined as a disproportionate share
hospital for purposes of section 1923;
``(D) a covered entity described in section 340B(a)(4) of
the Public Health Service Act (42 U.S.C. 256b(a)(4)); and
``(E) any other entity or a consortium that serves children
under a federally-funded program, including the special
supplemental nutrition program for women, infants, and
children (WIC) established under section 17 of the Child
Nutrition Act of 1966 (42 U.S.C. 1786), the head start and
early head start programs under the Head Start Act (42 U.S.C.
9801 et seq.), the school lunch program established under the
Richard B. Russell National School Lunch Act, and an
elementary or secondary school.
``(3) Indians; indian tribe; tribal organization; urban
indian organization.--The terms `Indian', `Indian tribe',
`tribal organization', and `urban Indian organization' have
the meanings given such terms in section 4 of the Indian
Health Care Improvement Act (25 U.S.C. 1603).
``(g) Appropriation.--There is appropriated, out of any
money in the Treasury not otherwise appropriated, $50,000,000
for each of fiscal years 2006 and 2007 for the purpose of
awarding grants under this section. Amounts appropriated and
paid under the authority of this section shall be in addition
to amounts appropriated under section 2104 and paid to States
in accordance with section 2105, including with respect to
expenditures for outreach activities in accordance with
subsection (a)(1)(D)(iii) of that section.''.
(b) Extending Use of Outstationed Workers To Accept Title
XXI Applications.--Section 1902(a)(55) of the Social Security
Act (42 U.S.C. 1396a(a)(55)) is amended by striking ``or
(a)(10)(A)(ii)(IX)'' and inserting ``(a)(10)(A)(ii)(IX), or
(a)(10)(A)(ii)(XIV), and applications for child health
assistance under title XXI''.
SEC. 253. STATE OPTION TO PROVIDE FOR SIMPLIFIED
DETERMINATIONS OF A CHILD'S FINANCIAL
ELIGIBILITY FOR MEDICAL ASSISTANCE UNDER
MEDICAID OR CHILD HEALTH ASSISTANCE UNDER
SCHIP.
(a) Medicaid.--Section 1902(e) of the Social Security Act
(42 U.S.C. 1396a(e)) is amended by adding at the end the
following:
``(13)(A) At the option of the State, the plan may provide
that financial eligibility requirements for medical
assistance are met for a child who is under an age specified
by the State (not to exceed 21 years of age) by using a
determination made within a reasonable period (as determined
by the State) before its use for this purpose, of the child's
family or household income, or if applicable for purposes of
determining eligibility under this title or title XXI, assets
or resources, by a Federal or State agency, or a public or
private entity making such determination on behalf of such
agency, specified by the plan, including (but not limited to)
an agency administering the State program funded under part A
of title IV, the Food Stamp Act of 1977, the Richard B.
Russell National School Lunch Act, or the Child Nutrition Act
of 1966, notwithstanding any differences in budget unit,
disregard, deeming, or other methodology, but only if--
``(i) the agency has fiscal liabilities or responsibilities
affected or potentially affected by such determination; and
``(ii) any information furnished by the agency pursuant to
this subparagraph is used solely for purposes of determining
financial eligibility for medical assistance under this title
or for child health assistance under title XXI.
``(B) Nothing in subparagraph (A) shall be construed--
``(i) to authorize the denial of medical assistance under
this title or of child health assistance under title XXI to a
child who, without the application of this paragraph, would
qualify for such assistance;
``(ii) to relieve a State of the obligation under
subsection (a)(8) to furnish medical assistance with
reasonable promptness after the submission of an initial
application that is evaluated or for which evaluation is
requested pursuant to this paragraph;
``(iii) to relieve a State of the obligation to determine
eligibility for medical assistance under this title or for
child health assistance under title XXI on a basis other than
family or household income (or, if applicable, assets or
resources) if a child is determined ineligible for such
assistance on the basis of information furnished pursuant to
this paragraph; or
``(iv) as affecting the applicability of any non-financial
requirements for eligibility for medical assistance under
this title or child health assistance under title XXI.''.
(b) SCHIP.--Section 2107(e)(1) of the Social Security Act
(42 U.S.C. 1397gg(e)(1)) is amended by adding at the end the
following:
``(E) Section 1902(e)(13) (relating to the State option to
base a determination of child's financial eligibility for
assistance on financial determinations made by a program
providing nutrition or other public assistance).''.
(c) Effective Date.--The amendments made by this section
take effect on October 1, 2005.
TITLE III--IMPROVING CARE AND STRENGTHENING THE SAFETY NET
Subtitle A--High Needs Areas
SEC. 301. PURPOSE.
It is the purpose of this subtitle to enhance the quality
of life of residents of high need areas by increasing their
access to the preventive and primary healthcare services
provided by community health centers and rural health
centers.
[[Page S8982]]
SEC. 302. HIGH NEED COMMUNITY HEALTH CENTERS.
Section 330 of the Public Health Service Act (42 U.S.C.
254b) is amended--
(1) by redesignating subsections (k) through (r) as
subsections (l) through (s), respectively;
(2) by inserting after subsection (j), the following:
``(k) Priority for Residents of High Need Areas.--
``(1) In general.--In awarding grants under this section,
the Secretary shall give priority to eligible health centers
in high need areas.
``(2) Eligible health centers.--A health center is
described in this paragraph if such health center--
``(A) is a health center as defined under subsection (a) or
a rural health clinic that receives funds under section 330A;
``(B) agrees to use grant funds to provide preventive and
primary healthcare services to residents of high need areas;
``(C) specifically requests such priority in the grant
application;
``(D) describes how the community to be served meets the
definition of high need area; and
``(E) otherwise meets all other grant requirements.
``(3) High need area.--
``(A) In general.--In this subsection, the term `high need
area' means a county or a regional area identified by the
Secretary pursuant to the regulations promulgated under
subparagraph (B).
``(B) Regulations.--The Secretary shall promulgate
regulations that define the term `high need area' for
purposes of this subsection. Such regulations shall specify
procedures that the Department shall follow in determining
estimates on a periodic basis in the United States of the
number of medically uninsured persons and the national
percentage of medically uninsured persons served by health
centers (referred to in this subsection as the `ENP') and for
the designation of an area as a `high need area' if the
estimated percentage of medically uninsured individuals in
the area is higher than the national average and the
estimated percentage of medically uninsured individuals in
the area served by health centers in the area is below the
ENP.
``(C) Medically underserved area.--The Secretary shall
designate residents of high need areas as medically
underserved for purposes of this section.
``(4) Funding preference.--The Secretary may limit the
amount of grants awarded to applicants from high need areas
as provided for in this subsection to not less than 25
percent of the total amount of grants awarded under this
subsection for each grant category for each grant period.'';
(3) in subsection (e)(1)(B), by striking ``subsection
(k)(3)'' and inserting ``subsection (l)(3)'';
(4) in subsection (l)(3)(H)(iii) (as so redesignated), by
striking ``or (p)'' and inserting ``or (q)'';
(5) in subsection (m) (as so redesignated), by striking
``subsection (k)(3)'' and inserting ``subsection (l)(3)'';
(6) in subsection (q) (as so redesignated), by striking
``subsection (k)(3)(G)'' and inserting ``subsection
(l)(3)(G)''; and
(7) in subsection (s)(2)(A) (as so redesignated), by
striking ``subsection (k)'' each place that such appears and
inserting ``subsection (l)''.
SEC. 303. GRANT APPLICATION PROCESS.
Section 330(k) of the Public Health Service Act (42 U.S.C.
254b(k)) is amended by adding at the end the following:
``(5) Economic viability of applicants.--
``(A) In general.--In considering applications under this
section, the Secretary shall ensure that an application that
demonstrates economic viability, consistent with funding
guidelines established by the Secretary for purposes of this
section, is not disadvantaged in the evaluation process on
the basis that it relies solely on Federal funding.
``(B) Qualification of individuals reviewing
applications.--The Secretary shall require verification that
all individuals who are evaluating community health center
grant applications have completed within the 3-year period
ending on the date on which the application is being
evaluated a training course on the community health center
program which addresses the purposes served by community
health centers, the critical role of community health centers
in the safety net, expectations for the evaluation of
applications, and the criteria for awarding grant funding.
``(C) Medically underserved designations.--Not later than 6
months after the date of enactment of this paragraph, the
Administrator of the Health Resources and Services
Administration shall submit to the appropriate committees of
Congress a report concerning the process for designating an
area or population as medically underserved. Such report
shall contain recommendations for ensuring that such
designations are current within the last 3 years. The report
shall also detail plans for ensuring subsequent review to
maintain an accurate reflection of community needs in areas
and populations designated as medically underserved. Not
later than 1 year after such date of enactment, the Secretary
shall promulgate regulations based on the recommendations
contained in the report.''.
Subtitle B--Qualified Integrated Health Care systems
SEC. 321. GRANTS TO QUALIFIED INTEGRATED HEALTH CARE SYSTEMS.
(a) Eligibility for Grants Under PHSA.--Part D of title III
of the Public Health Service Act (42 U.S.C. 254b et seq.) is
amended by adding at the end the following new subpart:
``Subpart XI--Promotion of Integrated Health Care Systems Serving
Medically Underserved Populations
``SEC. 340H. GRANTS TO QUALIFIED INTEGRATED HEALTH CARE
SYSTEMS.
``(a) Definitions.--For purposes of this section:
``(1) Qualified integrated health care system.--The term
`qualified integrated health care system' means an integrated
health care system that--
``(A) has a demonstrated capacity and commitment to provide
a full range of primary, specialty, and hospital care to a
medically underserved population in both inpatient and
outpatient settings, as appropriate;
``(B) is organized to provide such care in a coordinated
fashion;
``(C) operates one or more integrated health centers
meeting the requirements of section 340I;
``(D) meets the requirements of subsection (c)(3); and
``(E) agrees to use any funds received under this section
to supplement and not to supplant amounts received from other
sources for the provision of such care.
``(2) Medically underserved population.--The term
`medically underserved population' has the meaning given such
term in section 330(b)(3).
``(b) Operating Grants.--
``(1) Authority.--The Secretary may make grants to private
nonprofit entities for the costs of the operation of
qualified integrated health care systems that provide
primary, specialty, and hospital care to medically
underserved populations.
``(2) Amount.--
``(A) In general.--The amount of any grant made in any
fiscal year under paragraph (1) to an integrated health care
system shall be determined by the Secretary (taking into
account the full range of care, including specialty services,
provided by the system), but may not exceed the amount by
which the costs of operation of the system in such fiscal
year exceed the total of--
``(i) State, local, and other operational funding provided
to the system; and
``(ii) the fees, premiums, and third-party reimbursements
which the system may reasonably be expected to receive for
its operations in such fiscal year.
``(B) Payments.--Payments under grants under paragraph (1)
shall be made in advance or by way of reimbursement and in
such installments as the Secretary finds necessary and
adjustments may be made for overpayments or underpayments.
``(C) Use of nongrant funds.--Nongrant funds described in
clauses (i) and (ii) of subparagraph (A), including any such
funds in excess of those originally expected, shall be used
as permitted under this section, and may be used for such
other purposes as are not specifically prohibited under this
section if such use furthers the objectives of the project.
``(c) Applications.--
``(1) Submission.--No grant may be made under this section
unless an application therefore is submitted to, and approved
by, the Secretary. Such an application shall be submitted in
such form and manner and shall contain such information as
the Secretary shall prescribe.
``(2) Description of need.--
``(A) In general.--An application for a grant under
subsection (b)(1) for an integrated health care system shall
include--
``(i) a description of the need for health care services in
the area served by the integrated health care system;
``(ii) a demonstration by the applicant that the area or
the population group to be served by the applicant has a
shortage of personal health services; and
``(iii) a demonstration that the health care system will be
located so that it will provide services to the greatest
number of individuals residing in such area or included in
such population group.
``(B) Demonstrations.--A demonstration shall be made under
clauses (ii) or (iii) of subparagraph (A) on the basis of the
criteria prescribed by the Secretary under section 330(b)(3)
or on the basis of any other criteria which the Secretary may
prescribe to determine if the area or population group to be
served by the applicant has a shortage of personal health
services.
``(C) Condition of approval.--In considering an application
for a grant under subsection (b)(1), the Secretary may
require as a condition to the approval of such application an
assurance that any integrated health center operated by the
applicant will provide any required primary health services
and any additional health services (as defined in section
340I) that the Secretary finds are needed to meet specific
health needs of the area to be served by the applicant. Such
a finding shall be made in writing and a copy shall be
provided to the applicant.
``(3) Requirements.--The Secretary shall approve an
application for a grant under subsection (b)(1) if the
Secretary determines that the entity for which the
application is submitted is an integrated health care system
(within the meaning of subsection (a)) and that--
``(A) the primary, specialty, and hospital care provided by
the system will be available
[[Page S8983]]
and accessible in the service area of the system promptly, as
appropriate, and in a manner which assures continuity;
``(B) the system is participating (or will participate) in
a community consortium of safety net providers serving such
area (unless other such safety net providers do not exist in
a community, decline or refuse to participate, or place
unreasonable conditions on their participation);
``(C) all of the centers operated by the system are
accredited by a national accreditation body recognized by the
Secretary;
``(D) the system will demonstrate its financial
responsibility by the use of such accounting procedures and
other requirements as may be prescribed by the Secretary;
``(E) the system provides or will provide services to
individuals who are eligible for medical assistance under
title XIX of the Social Security Act and to individuals who
are eligible for assistance under title XXI of such Act;
``(F) the system--
``(i) has prepared a schedule of fees or payments for the
provision of its services consistent with locally prevailing
rates or charges and designed to cover its reasonable costs
of operation and has prepared a corresponding schedule of
discounts to be applied to the payment of such fees or
payments, and which discounts are adjusted on the basis of
the patient's ability to pay;
``(ii)(I) will assure that no patient will be denied health
care services due to an individual's inability to pay for
such services; and
``(II) will assure that any fees or payments required by
the system for such services will be reduced or waived to
enable the system to fulfill the assurance described in
subclause (I); and
``(iii) has submitted to the Secretary such reports as the
Secretary may require to determine compliance with this
subparagraph;
``(G) the system has established a governing board that
selects the services to be provided by the center, approves
the center's annual budget, approves the selection of a
director for the center, and establishes general policies for
the center;
``(H) the system has developed--
``(i) an overall plan and budget that meets the
requirements of the Secretary; and
``(ii) an effective procedure for compiling and reporting
to the Secretary such statistics and other information as the
Secretary may require relating to--
``(I) the costs of its operations;
``(II) the patterns of use of its services;
``(III) the availability, accessibility, and acceptability
of its services; and
``(IV) such other matters relating to operations of the
applicant as the Secretary may require;
``(I) the system will review periodically its service area
to--
``(i) ensure that the size of such area is such that the
services to be provided through the system (including any
satellite) are available and accessible to the residents of
the area promptly and as appropriate;
``(ii) ensure that the boundaries of such area conform, to
the extent practicable, to relevant boundaries of political
subdivisions, school districts, and Federal and State health
and social service programs; and
``(iii) ensure that the boundaries of such area eliminate,
to the extent possible, barriers to access to the services of
the system, including barriers resulting from the area's
physical characteristics, its residential patterns, its
economic and social grouping, and available transportation;
``(J) in the case of a system which serves a substantial
proportion of individuals of limited English-speaking
ability, the system has--
``(i) developed a plan and made arrangements for providing
services, to the extent practicable, in the predominant
language or languages of such individuals and in the cultural
context most appropriate to such individuals; and
``(ii) identified one or more individuals on its staff who
are fluent in such predominant language or languages and in
English and whose responsibilities shall include providing
guidance to such individuals and to other appropriate staff
members with respect to cultural sensitivities and bridging
linguistic and cultural differences;
``(K) the system maintains appropriate referral
relationships between its hospitals, its physicians with
hospital privileges, and any integrated health center
operated by the system so that primary, specialty care, and
hospital care is provided in a continuous and coordinated
way; and
``(L) the system encourages persons receiving or seeking
health services from the system to participate in any public
or private (including employer-offered) health programs or
plans for which the persons are eligible, so long as the
center, in complying with this paragraph, does not violate
the requirements of subparagraph (F)(ii)(I).
``(d) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
to carry out this section such sums as may be necessary for
each of fiscal years 2006 through 2010.
``(2) Funding report.--The Secretary shall annually prepare
and submit to the appropriate committees of Congress a report
concerning the distribution of funds under this section that
are provided to meet the health care needs of medically
underserved populations, and the appropriateness of the
delivery systems involved in responding to the needs of the
particular populations. Such report shall include an
assessment of the relative health care access needs of the
targeted populations and the rationale for any substantial
changes in the distribution of funds.
``(e) Records.--
``(1) In general.--Each entity which receives a grant under
subsection (b)(1) shall establish and maintain such records
as the Secretary shall require.
``(2) Availability.--Each entity which is required to
establish and maintain records under this subsection shall
make such books, documents, papers, and records available to
the Secretary or the Comptroller General of the United
States, or any of their duly authorized representatives, for
examination, copying, or mechanical reproduction on or off
the premises of such entity upon a reasonable request
therefore. The Secretary and the Comptroller General of the
United States, or any of their duly authorized
representatives, shall have the authority to conduct such
examination, copying, and reproduction.
``(f) Audits.--
``(1) In general.--Each entity which receives a grant under
this section shall provide for an independent annual
financial audit of any books, accounts, financial records,
files, and other papers and property which relate to the
disposition or use of the funds received under such grant and
such other funds received by or allocated to the project for
which such grant was made. For purposes of assuring accurate,
current, and complete disclosure of the disposition or use of
the funds received, each such audit shall be conducted in
accordance with generally accepted accounting principles.
Each audit shall evaluate--
``(A) the entity's implementation of the guidelines
established by the Secretary respecting cost accounting;
``(B) the processes used by the entity to meet the
financial and program reporting requirements of the
Secretary; and
``(C) the billing and collection procedures of the entity
and the relation of the procedures to its fee schedule and
schedule of discounts and to the availability of health
insurance and public programs to pay for the health services
it provides.
A report of each such audit shall be filed with the Secretary
at such time and in such manner as the Secretary may require.
``(2) Records.--Each entity which receives a grant under
this section shall establish and maintain such records as the
Secretary shall by regulation require to facilitate the audit
required by paragraph (1). The Secretary may specify by
regulation the form and manner in which such records shall be
established and maintained.
``(3) Availability of records.--Each entity which is
required to establish and maintain records or to provide for
an audit under this subsection shall make such books,
documents, papers, and records available to the Secretary or
the Comptroller General of the United States, or any of their
duly authorized representatives, for examination, copying, or
mechanical reproduction on or off the premises of such entity
upon a reasonable request therefore. The Secretary and the
Comptroller General of the United States, or any of their
duly authorized representatives, shall have the authority to
conduct such examination, copying, and reproduction.
``(4) Waiver.--The Secretary may, under appropriate
circumstances, waive the application of all or part of the
requirements of this subsection with respect to an entity.
``SEC. 340I. INTEGRATED HEALTH CENTER.
``(a) Integrated Health Center .--The term `integrated
health center' means an health center that is operated by an
integrated health care system and that serves a medically
underserved population (as defined for purposes of section
330(b)(3)) by providing, either through the staff and
supporting resources of the center or through contracts or
cooperative arrangements--
``(1) required primary health services (as defined in
subsection (b)(1)); and
``(2) as may be appropriate for particular centers
additional health services (as defined in subsection (b)(2))
necessary for the adequate support of the primary health
services required under paragraph (1);
for all residents of the area served by the center.
``(b) Definitions.--For purposes of this section:
``(1) Required primary health services.--The term `required
primary health services' means--
``(A) basic health services which, for purposes of this
section, shall consist of--
``(i) health services related to family medicine, internal
medicine, pediatrics, obstetrics, or gynecology that are
furnished by physicians and where appropriate, physician
assistants, nurse practitioners, and nurse midwives;
``(ii) diagnostic laboratory and radiologic services;
``(iii) preventive health services, including--
``(I) prenatal and perinatal services;
``(II) appropriate cancer screening;
``(III) well-child services;
``(IV) immunizations against vaccine-preventable diseases;
``(V) screenings for elevated blood lead levels,
communicable diseases, and cholesterol;
``(VI) pediatric eye, ear, and dental screenings to
determine the need for vision and hearing correction and
dental care;
``(VII) voluntary family planning services; and
[[Page S8984]]
``(VIII) preventive dental services;
``(iv) emergency medical services; and
``(v) pharmaceutical services and medication therapy
management services as may be appropriate for particular
centers;
``(B) referrals to providers of medical services (including
specialty and hospital care referrals when medically
indicated) and other health-related services (including
substance abuse and mental health services);
``(C) patient case management services (including
counseling, referral, and follow-up services) and other
services designed to assist health center patients in
establishing eligibility for and gaining access to Federal,
State, and local programs that provide or financially support
the provision of medical, social, housing, educational, or
other related services;
``(D) services that enable individuals to use the services
of the center (including outreach and transportation services
and, if a substantial number of the individuals in the
population served by a center are of limited English-speaking
ability, the services of appropriate personnel fluent in the
languages spoken by a predominant number of such
individuals); and
``(E) education of patients and the general population
served by the center regarding the availability and proper
use of health services.
``(2) Additional health services.--The term `additional
health services' means services that are not included as
required primary health services and that are appropriate to
meet the health needs of the population served by the center
involved. Such term may include--
``(A) behavioral and mental health and substance abuse
services;
``(B) recuperative care services; and
``(C) environmental health services.
(b) Coverage Under the Medicare Program.--
(1) Part b benefit.--Section 1861(s)(2)(E) of the Social
Security Act (42 U.S.C. 1395x(s)(2)(E)) is amended--
(A) by striking ``services and'' and inserting
``services,''; and
(B) by striking ``services'' the second place it appears
and inserting ``services, and integrated health center
services''.
(2) Definitions.--Section 1861(aa) of the Social Security
Act (42 U.S.C. 1395x(aa)) is amended--
(A) in the heading--
(i) by striking ``Services and'' and inserting
``Services,''; and
(ii) by striking ``Services'' the second place it appears
and inserting ``Services, and Integrated Health Center
Services'';
(B) in paragraph (1)(B), by striking ``paragraph (5))'' and
inserting ``paragraph (7));
(C) by redesignating paragraphs (5), (6), and (7) as
paragraphs (7), (8), and (9), respectively; and
(D) by inserting after paragraph (4) the following new
paragraph:
``(5) The term `integrated health center services' means--
``(A) services of the type described in subparagraphs (A)
through (C) of paragraph (1); and
``(B) preventive primary health services that a center is
required to provide under section 340I of the Public Health
Service Act,
when furnished to an individual as an outpatient of an
integrated health center, and for this purpose, any reference
to a rural health clinic or a physician described in
paragraph (2)(B) is deemed a reference to an integrated
health center or a physician at the center, respectively.
``(6) The term `integrated health center' means a center
that is operated by a qualified integrated health care system
(as defined in section 340H(a)(1) of the Public Health
Service Act that--
``(A) is receiving a grant under section 340H of such Act;
or
``(B) is determined by the Secretary to meet the
requirements for receiving such a grant.''.
(3) Payment.--
(A) In general.--Section 1832(a)(2)(D) of the Social
Security Act (42 U.S.C. 1395k(a)(2)(D)) is amended--
(i) by striking ``and (ii)'' and inserting ``, (ii)''; and
(ii) by striking ``services'' the second place it appears
and inserting ``services, and (iii) integrated health center
services.''.
(B) Part b deductible does not apply.--Section 1833(b)(4)
of the Social Security Act (42 U.S.C. 13951(b)(4)) is amended
by inserting ``or integrated health center services'' after
``Federally qualified health center services''.
(C) Exclusion from payment removed.--The second sentence of
section 1862(a) of the Social Security Act (42 U.S.C.
1395y(a)) is amended by inserting ``or integrated health
center services described in section 1861 (aa)(5)(B)'' after
``section 1861(aa)(3)(B)''.
(D) Waiver of anti-kickback restriction.--Section
1128B(b)(3)(D) of the Social Security Act (42 U.S.C. 1320a-
7b(b)(3)(D)) is amended by inserting ``or by an integrated
health center'' after ``Federally qualified health center''.
(4) Conforming amendments.--(A) Clauses (ii) and (iv) of
section 1834(a)(1)(E) of the Social Security Act (42 U.S.C.
1395m(a)(1)(E)) are each amended by striking ``section
1861(aa)(5)'' and inserting ``section 1861(aa)(7)''.
(B) Section 1842(b)(18)(C)(i) of the Social Security Act
(42 U.S.C. 1395u(b)(18)(C)(i)) is amended by striking
``section 1861(aa)(5)'' and inserting ``section
1861(aa)(7)''.
(C) Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)) is amended--
(i) in subparagraph (H)(i), by striking ``subsection
(aa)(5)'' and inserting ``subsection (aa)(7)''; and
(ii) in subparagraph (K)--
(I) by striking ``subsection (aa)(5)'' each place it
appears and inserting ``subsection (aa)(7)''; and
(II) by striking ``subsection (aa)(6)'' and inserting
``subsection (aa)(8)''.
(D) Section 1861(dd)(3)(B) of the Social Security Act (42
U.S.C. 1395x(dd)(3)(B)) is amended by striking ``subsection
(aa)(5)'' and inserting ``subsection (aa)(7)''.
(c) Recognition Under Medicaid.--
(1) Coverage.--Section 1905(a)(2) of the Social Security
Act (42 U.S.C. 1396d(a)(2)) is amended--
(A) by striking ``and (C)'' and inserting ``, (C)''; and
(B) by inserting ``, and
``(D) integrated health center services (as defined in
subsection (1)(3)(A)) and any other ambulatory services
offered by the integrated health center and which are
otherwise included in the plan.'' after ``included in the
plan'' the second place it appears.
(2) Definitions.--Section 1905(l) of such Act (42 U.S.C.
1396d(l)) is amended by adding at the end the following:
``(3)(A) The term `integrated health center services' means
services of the type described in subparagraphs (A) through
(C) of section 1861(aa) when furnished to an individual as a
patient of an integrated health center and, for this purpose,
any reference to a rural health clinic or a physician
described in section 1861(aa)(2)(B) is deemed a reference to
an integrated health center or a physician at the center,
respectively.
``(B) The term `integrated health center' means a center
that is operated by a qualified integrated health care system
that--
``(i) is receiving a grant under section 340H of the Public
Health Service Act; or
``(ii) is determined by the Secretary, based on the
recommendations of the Administrator of the Centers for
Medicare & Medicaid Services, to meet the requirements for
receiving such a grant.''.
(3) Payment.--Section 1902(a) of such Act (42 U.S.C.
1396a(a)) is amended--
(A) in paragraph (15), by inserting ``and for services
described in clause (D) of section 1905(a)(2) in accordance
with the provisions of subsection (cc)'' after ``subsection
(bb)''; and
(B) by adding at the end the following:
``(cc) Payment for Services Provided by Integrated Health
Centers.--
``(1) In general.--Beginning with fiscal year 2006 with
respect to services furnished on or after January 1, 2006,
and each succeeding fiscal year, the State plan shall provide
for payment for services described in section 1905(a)(2)(D)
furnished by an integrated health center in accordance with
the provisions of this subsection.
``(2) Fiscal year 2006.--Subject to paragraph (4), for
services furnished on and after January 1, 2006, during
fiscal year 2006, the State plan shall provide for payment
for such services in an amount (calculated on a per visit
basis) that is equal to 100 percent of the average of the
costs of the center of furnishing such services during fiscal
years 2004 and 2005 which are reasonable and related to the
cost of furnishing such services, or based on such other
tests of reasonableness as the Secretary prescribes in
regulations under section 1833(a)(3), or, in the case of
services to which such regulations do not apply, the same
methodology used under section 1833(a)(3), adjusted to take
into account any increase or decrease in the scope of such
services furnished by the center during fiscal years 2004 and
2005.
``(3) Fiscal year 2007 and succeeding fiscal years.--
Subject to paragraph (4), for services furnished during
fiscal year 2007 or a succeeding fiscal year, the State plan
shall provide for payment for such services in an amount
(calculated on a per visit basis) that is equal to the amount
calculated for such services under this subsection for the
preceding fiscal year--
``(A) increased by the percentage increase in the MEI (as
defined in section 1842(i)(3)) for that fiscal year; and
``(B) adjusted to take into account any increase or
decrease in the scope of such services furnished by the
center during that fiscal year.
``(4) Establishment of initial year payment amount for new
centers.--In any case in which an entity first qualifies as
an integrated health center after fiscal year 2006, the State
plan shall provide for payment for services described in
section 1905(a)(2)(D) furnished by the center in the first
fiscal year in which the center so qualifies in an amount
(calculated on a per visit basis) that is equal to 100
percent of the costs of furnishing such services during such
fiscal year based on the rates established under this
subsection for the fiscal year for other such centers located
in the same or adjacent area with a similar case load or, in
the absence of such a center, in accordance with the
regulations and methodology referred to in paragraph (2) or
based on such other tests of reasonableness as the Secretary
may specify. For each fiscal year following the fiscal year
in which the entity first qualifies as an integrated health
center, the State plan shall provide for the payment amount
to be calculated in accordance with paragraph (3).
``(5) Administration in the case of managed care.--
[[Page S8985]]
``(A) In general.--In the case of services furnished by an
integrated health center pursuant to a contract between the
center and a managed care entity (as defined in section
1932(a)(1)(B)), the State plan shall provide for payment to
the center by the State of a supplemental payment equal to
the amount (if any) by which the amount determined under
paragraphs (2), (3), and (4) exceeds the amount of the
payments provided under the contract.
``(B) Payment schedule.--The supplemental payment required
under subparagraph (A) shall be made pursuant to a payment
schedule agreed to by the State and the integrated health
center, but in no case less frequently than every 4 months.
``(6) Alternative payment methodologies.--Notwithstanding
any other provision of this section, the State plan may
provide for payment in any fiscal year to an integrated
health center for services described in section 1905(a)(2)(D)
in an amount which is determined under an alternative payment
methodology that--
``(A) is agreed to by the State and the center; and
``(B) results in payment to the center of an amount which
is at least equal to the amount otherwise required to be paid
to the center under this section.''.
(4) Waiver prohibited.--Section 1915(b) of the Social
Security Act (42 U.S.C.1396n(b)) is amended in the matter
preceding paragraph (1), by inserting ``1902(cc),'' after
``1902(bb),''.
(d) Protection Against Liability.--Section 224(g) of the
Public Health Service Act (42 U.S.C. 233(g)) is amended--
(1) In paragraph (4), by striking ``An entity'' and
inserting ``Subject to paragraph (6), an entity''; and
(2) by adding at the end the following:
``(6) For purposes of this section--
``(A) a qualified integrated health care system receiving a
grant under section 340H and any integrated health center
operated by such system shall be considered to be an entity
described in paragraph (4); and
``(B) the provisions of this section shall apply to such
system and centers in the same manner as such provisions
apply to an entity described in such paragraph (4), except
that--
``(i) notwithstanding paragraph (1)(B), the deeming of any
system or center, or of an officer, governing board member,
employee, or contractor of such system or center, to be an
employee of the Public Health Service for purposes of this
section shall apply only with respect to items and services
that are furnished to a member of the underserved population
served by the entity;
``(ii) notwithstanding paragraph (3), this paragraph shall
apply only with respect to causes of action arising from acts
or omissions that occur on or after January 1, 2006; and
``(iii) the Secretary shall make separate estimates under
subsection (k)(1) with respect to such systems and centers
and entities described in paragraph (4) (other than such
systems and centers), establish separate funds under
subsection (k)(2) with respect to such groups of entities,
and any appropriations under this subsection for such systems
and centers shall be separate from the amounts authorized by
subsection (k)(2).''.
(e) Effective Date.--The amendments made subsections (b)
and (c) shall apply to items and services furnished on or
after October 1, 2005.
Subtitle C--Miscellaneous Provisions
SEC. 331. COMMUNITY HEALTH CENTER COLLABORATIVE ACCESS
EXPANSION.
Section 330 of the Public Health Service Act (42 U.S.C.
254b) is amended by adding at the end the following:
``(s) Miscellaneous Provisions.--
``(1) Rule of construction with respect to rural health
clinics.--
``(A) In general.--Nothing in this section shall be
construed to prevent a community health center from
contracting with a federally certified rural health clinic
(as defined by section 1861(aa)(2) of the Social Security
Act) for the delivery of primary health care services that
are available at the rural health clinic to individuals who
would otherwise be eligible for free or reduced cost care if
that individual were able to obtain that care at the
community health center. Such services may be limited in
scope to those primary health care services available in that
rural health clinic.
``(B) Assurances.--In order for a rural health clinic to
receive funds under this section through a contract with a
community health center under paragraph (1), such rural
health clinic shall establish policies to ensure--
``(i) nondiscrimination based upon the ability of a patient
to pay; and
``(ii) the establishment of a sliding fee scale for low-
income patients.''.
SEC. 332. IMPROVEMENTS TO SECTION 340B PROGRAM.
(a) Elimination of Group Purchasing Prohibition for Certain
Hospitals.--Section 340B(a)(4)(L) of the Public Health
Service Act (42 U.S.C. 256b(a)(4)(L)) is amended--
(1) in clause (i), by adding ``and'' at the end;
(2) in clause (ii), by striking ``; and'' and inserting a
period; and
(3) by striking clause (iii).
(b) Permitting Use of Multiple Contract Pharmacies.--
Section 340B f the Public Health Service Act (42 U.S.C. 256b)
is amended by adding at the end the following:
``(e) Permitting Use of Multiple Contract Pharmacies.--
Nothing in this section shall be construed as prohibiting a
covered entity from entering into contracts with more than
one pharmacy for the provision of covered drugs, including a
contract that--
``(1) supplements the use of an in-house pharmacy
arrangement; or
``(2) requires the approval of the Secretary.''.
(c) Improvements in Program Administration.--Section 340B
of the Public Health Service Act (42 U.S.C. 256b), as amended
by subsection (b), is further amended by adding at the end
the following:
``(f) Improvements in Program Administration.--
``(1) In general.--The Secretary shall provide, from funds
appropriated under paragraph (2), for improvements in the
integrity and administration of the program under this
section in order to prevent abuse and misuse of discounted
prices made available under this section. Such improvements
shall include the following:
``(A) The development of a system to verify the accuracy of
information regarding covered entities that is listed on the
Internet website of the Department of Health and Human
Services relating to this section.
``(B) The establishment of a third-party auditing system by
which covered entities and manufacturers are regularly
audited to ensure compliance with the requirements of this
section.
``(C) The conduct of such audits under subsection (a)(5)(C)
that supplement the audits conducted under subparagraph (B)
as the Secretary determines appropriate and the
implementation of dispute resolution guidelines and other
compliance programs.
``(D) The development of more detailed guidance regarding
the definition of section 340B patients and describing
options for billing under the medicaid program under title
XIX of the Social Security Act in order to avoid duplicative
discounts.
``(E) The issuance of advisory opinions within defined time
periods in response to questions from manufacturers or
covered entities regarding the application of the
requirements of this section in specific factual
circumstances.
``(F) Insofar as the Secretary determines feasible,
providing access through the Internet website of the
Department of Health and Human Services on the prices for
covered drugs made available under this section, but only in
a manner (such as through the use of password protection)
that limits such access to covered entities.
``(G) The improved dissemination of educational materials
regarding the program under this section to covered entities
that are not currently participating in such programs
including regional educational sessions.
``(2) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection,
such sums as may be necessary for fiscal year 2006 and each
succeeding fiscal year.''.
SEC. 333. FORBEARANCE FOR STUDENT LOANS FOR PHYSICIANS
PROVIDING SERVICES IN FREE CLINICS.
(a) In General.--Section 428(c)(3)(A) of the Higher
Education Act of 1965 (20 U.S.C. 1078(c)(3)(A)) is amended--
(1) in clause (i)--
(A) in subclause (III), by striking ``or'' at the end;
(B) in subclause (V), by adding ``or'' at the end; and
(C) by adding at the end the following:
``(V) is volunteering without pay for at least 80 hours per
month at a free clinic as defined under section 224 of the
Public Health Service Act;''; and
(2) in clause (ii)(III), by inserting ``or (i)(V)'' after
``clause (i)(III)''.
(b) Perkins Program.--Section 464(e) of the Higher
Education Act of 1965 (20 U.S.C. 1087dd(e)) is amended--
(1) in paragraph (1), by striking ``or'' at the end;
(2) in paragraph (2), by striking the period and inserting
``; or''; and
(3) by adding at the end the following:
``(3) the borrower is volunteering without pay for at least
80 hours per month at a free clinic as defined under section
224 of the Public Health Service Act.''.
SEC. 334. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT
RELATING TO LIABILITY.
Section 224 of the Public Health Service Act (42 U.S.C.
233) is amended--
(1) in subsection (g)(1)--
(A) in subparagraph (A)--
(i) in the first sentence, by striking ``or employee'' and
inserting ``employee, or (subject to subsection (k)(4))
volunteer practitioner''; and
(ii) in the second sentence, by inserting ``and subsection
(k)(4)'' after ``subject to paragraph (5)''; and
(B) by adding at the end the following:
``(I) For purposes of this subsection, the term `employee'
shall include a health professional who volunteers to provide
health-related services for an entity described in paragraph
(4).'';
(2) in subsection (k), by adding at the end the following:
``(4)(A) Subsections (g) through (m) apply with respect to
volunteer practitioners beginning with the first fiscal year
for which an appropriations Act provides that amounts in the
fund under paragraph (2) are available with respect to such
practitioners.
[[Page S8986]]
``(B) For purposes of subsections (g) through (m), the term
`volunteer practitioner' means a practitioner who, with
respect to an entity described in subsection (g)(4), meets
the following conditions:
``(i) The practitioner is a licensed physician or a
licensed clinical psychologist.
``(ii) At the request of such entity, the practitioner
provides services to patients of the entity, at a site at
which the entity operates or at a site designated by the
entity. The weekly number of hours of services provided to
the patients by the practitioner is not a factor with respect
to meeting conditions under this subparagraph.
``(iii) The practitioner does not for the provision of such
services receive any compensation from such patients, from
the entity, or from third-party payors (including
reimbursement under any insurance policy or health plan, or
under any Federal or State health benefits program).'';
(3) in subsection (o)(2)--
(A) in subparagraph (D), by striking clause (i) and
inserting the following:
``(i) The health care practitioner may provide the services
involved as an employee of the free clinic, or may receive
repayment from the free clinic only for reasonable expenses
incurred by the health care practitioner in the provision of
the services to the individual.''; and
(B) by adding at the end the following:
``(G) The health care practitioner is providing the
services involved as a paid employee of the free clinic.'';
and
(4) in each of subsections (g), (i), (j), (k), (l), and
(m), by striking ``employee, or contractor'' each place such
term appears and inserting ``employee, volunteer
practitioner, or contractor'';
SEC. 335. SENSE OF THE SENATE CONCERNING HEALTH DISPARITIES.
It is the sense of the Senate that additional measures are
needed to reduce or eliminate disparities in health care
related to race, ethnicity, socioeconomic status, and
geography that affect access to quality health care.
______
By Mr. SPECTER (for himself, Mr. Corzine, Mr. Lautenberg, Mr.
Schumer, and Ms. Snowe):
S.J. Res. 21. A joint resolution recognizing Commodore John Barry as
the first flag officer of the United States Navy; to the Committee on
Armed Services.
Mr. SPECTER. Mr. President, I ask unanimous consent that the text of
the joint resolution be printed in the Record.
There being no objection, the joint resolution was ordered to be
printed in the Record, as follows:
S.J. Res. 21
Whereas John Barry, American merchant marine captain and
native of County Wexford, Ireland, volunteered his services
to the Continental Navy during the American War for
Independence and was assigned by the Continental Congress as
captain of the Lexington, taking command of that vessel on
March 14, 1776, and later participating in the victorious
Trenton campaign;
Whereas the quality and effectiveness of Captain John
Barry's service to the American war effort was recognized not
only by George Washington but also by the enemies of the new
Nation;
Whereas Captain John Barry rejected British General Lord
Howe's flattering offer to desert Washington and the patriot
cause, stating: ``Not the value and command of the whole
British fleet can lure me from the cause of my country.'';
Whereas Captain John Barry, while in command of the frigate
Alliance, successfully transported French gold to America to
help finance the American War for Independence and also won
numerous victories at sea;
Whereas when the First Congress, acting under the new
Constitution of the United States, authorized the raising and
construction of the United States Navy, it was to Captain
John Barry that President George Washington turned to build
and lead the new Nation's infant Navy, the successor to the
Continental Navy of the War for Independence;
Whereas Captain John Barry supervised the building of his
flagship, the U.S.S. United States;
Whereas on February 22, 1797, President Washington
personally conferred upon Captain John Barry, by and with the
advice and consent of the Senate, the rank of Captain, with
``Commission No. 1'', United States Navy, dated June 7, 1794;
Whereas John Barry served as the senior officer of the
United States Navy, with the title of ``Commodore'' (in
official correspondence), under Presidents Washington, John
Adams, and Jefferson;
Whereas as commander of the first United States naval
squadron under the Constitution of the United States, which
included the U.S.S. Constitution (``Old Ironsides''), John
Barry was a Commodore, with the right to fly a broad pendant,
which made him a flag officer; and
Whereas in this sense it can be said that Commodore John
Barry was the first flag officer of the United States Navy:
Now, therefore, be it
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, That
Commodore John Barry is recognized, and is hereby honored, as
the first flag officer of the United States Navy.
____________________