[Congressional Record Volume 152, Number 55 (Tuesday, May 9, 2006)]
[Senate]
[Pages S4225-S4239]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 3861. Mr. SMITH submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Local Law Enforcement 
     Enhancement Act of 2005''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The incidence of violence motivated by the actual or 
     perceived race, color, religion, national origin, gender, 
     sexual orientation, or disability of the victim poses a 
     serious national problem.
       (2) Such violence disrupts the tranquility and safety of 
     communities and is deeply divisive.
       (3) State and local authorities are now and will continue 
     to be responsible for prosecuting the overwhelming majority 
     of violent crimes in the United States, including violent 
     crimes motivated by bias. These authorities can carry out 
     their responsibilities more effectively with greater Federal 
     assistance.
       (4) Existing Federal law is inadequate to address this 
     problem.
       (5) The prominent characteristic of a violent crime 
     motivated by bias is that it devastates not just the actual 
     victim and the family and friends of the victim, but 
     frequently savages the community sharing the traits that 
     caused the victim to be selected.
       (6) Such violence substantially affects interstate commerce 
     in many ways, including--
       (A) by impeding the movement of members of targeted groups 
     and forcing such members to move across State lines to escape 
     the incidence or risk of such violence; and
       (B) by preventing members of targeted groups from 
     purchasing goods and services, obtaining or sustaining 
     employment, or participating in other commercial activity.
       (7) Perpetrators cross State lines to commit such violence.
       (8) Channels, facilities, and instrumentalities of 
     interstate commerce are used to facilitate the commission of 
     such violence.
       (9) Such violence is committed using articles that have 
     traveled in interstate commerce.
       (10) For generations, the institutions of slavery and 
     involuntary servitude were defined by the race, color, and 
     ancestry of those held in bondage. Slavery and involuntary 
     servitude were enforced, both prior to and after the adoption 
     of the 13th amendment to the Constitution of the United 
     States, through widespread public and private violence 
     directed at persons because of their race, color, or 
     ancestry, or perceived race, color, or ancestry. Accordingly, 
     eliminating racially motivated violence is an important means 
     of eliminating, to the extent possible, the badges, 
     incidents, and relics of slavery and involuntary 
     servitude.
       (11) Both at the time when the 13th, 14th, and 15th 
     amendments to the Constitution of the United States were 
     adopted, and continuing to date, members of certain religious 
     and national origin groups were and are perceived to be 
     distinct ``races''. Thus, in order to eliminate, to the 
     extent possible, the badges, incidents, and relics of 
     slavery, it is necessary to prohibit assaults on the basis of 
     real or perceived religions or national origins, at least to 
     the extent such religions or national origins were regarded 
     as races at the time of the adoption of the 13th, 14th, and 
     15th amendments to the Constitution of the United States.
       (12) Federal jurisdiction over certain violent crimes 
     motivated by bias enables Federal, State, and local 
     authorities to work together as partners in the investigation 
     and prosecution of such crimes.
       (13) The problem of crimes motivated by bias is 
     sufficiently serious, widespread, and interstate in nature as 
     to warrant Federal assistance to States and local 
     jurisdictions.

     SEC. 3. DEFINITION OF HATE CRIME.

       In this Act, the term ``hate crime'' has the same meaning 
     as in section 280003(a) of the Violent Crime Control and Law 
     Enforcement Act of 1994 (28 U.S.C. 994 note).

     SEC. 4. SUPPORT FOR CRIMINAL INVESTIGATIONS AND PROSECUTIONS 
                   BY STATE AND LOCAL LAW ENFORCEMENT OFFICIALS.

       (a) Assistance Other Than Financial Assistance.--
       (1) In general.--At the request of a law enforcement 
     official of a State or Indian tribe; the Attorney General may 
     provide technical, forensic, prosecutorial, or any other form 
     of assistance in the criminal investigation or prosecution of 
     any crime that--
       (A) constitutes a crime of violence (as defined in section 
     16 of title 18, United States Code);
       (B) constitutes a felony under the laws of the State or 
     Indian tribe; and
       (C) is motivated by prejudice based on the race, color, 
     religion, national origin, gender, sexual orientation, or 
     disability of the victim, or is a violation of the hate crime 
     laws of the State or Indian tribe.
       (2) Priority.--In providing assistance under paragraph (1), 
     the Attorney General shall give priority to crimes committed 
     by offenders who have committed crimes in more than 1 State 
     and to rural jurisdictions that have difficulty covering the 
     extraordinary expenses relating to the investigation or 
     prosecution of the crime.
       (b) Grants.--
       In general.--The Attorney General may award grants to 
     assist State, local, and Indian law enforcement officials 
     with the extraordinary expenses associated with the 
     investigation and prosecution of hate crimes.
       (2) Office of justice programs.--In implementing the grant 
     program, the Office of Justice Programs shall work closely 
     with the funded jurisdictions to ensure that the concerns and 
     needs of all affected parties, including community groups and 
     schools, colleges, and universities, are addressed through 
     the local infrastructure developed under the grants.
       (3) Application.--
       (A) In general.--Each State that desires a grant under this 
     subsection shall submit an application to the Attorney 
     General at such time, in such manner, and accompanied by or 
     containing such information as the Attorney General shall 
     reasonably require.
       (B) Date for submission.--Applications submitted pursuant 
     to subparagraph (A) shall be submitted during the 60-day 
     period beginning on a date that the Attorney General shall 
     prescribe.

[[Page S4226]]

       (C) Requirements.--A State or political subdivision of a 
     State or tribal official applying for assistance under this 
     subsection shall--
       (i) describe the extraordinary purposes for which the grant 
     is needed;
       (ii) certify that the State; political subdivision, or 
     Indian tribe lacks the resources necessary to investigate or 
     prosecute the hate crime;
       (iii) demonstrate that, in developing a plan to implement 
     the grant, the State, political subdivision, or tribal 
     official has consulted and coordinated with nonprofit, 
     nongovernmental victim services programs that have experience 
     in providing services to victims of hate crimes; and
       (iv) certify that any Federal funds received under this 
     subsection will be used to supplement, not supplant, non-
     Federal funds that would otherwise be available for 
     activities funded under this subsection.
       (4) Deadline.--An application for a grant under this 
     subsection shall be approved or disapproved by the Attorney 
     General not later than 30 business days after the date on 
     which the Attorney General receives the application.
       (5) Grant amount.--A grant under this subsection shall not 
     exceed $100,000 for any single jurisdiction within a 1 year 
     period.
       (6) Report.--Not later than December 31, 2006, the Attorney 
     General shall submit to Congress a report describing the 
     applications submitted for grants under this subsection, the 
     award of such grants, and the purposes for which the grant 
     amounts were expended.
       (7) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $5,000,000 
     for each of fiscal years 2006 and 2007.

     SEC. 5. GRANT PROGRAM.

       (a) Authority To Make Grants.--The Office of Justice 
     Programs of the Department of Justice shall award grants, in 
     accordance with such regulations as the Attorney General may 
     prescribe, to State and local programs designed to combat 
     hate crimes committed by juveniles, including programs to 
     train local law enforcement officers in identifying, 
     investigating, prosecuting, and preventing hate crimes.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

     SEC. 6. AUTHORIZATION FOR ADDITIONAL PERSONNEL TO ASSIST 
                   STATE AND LOCAL LAW ENFORCEMENT.

       There are authorized to be appropriated to the Department 
     of the Treasury and the Department of Justice, including the 
     Community Relations Service, for fiscal years 2006, 2007, and 
     2008 such sums as are necessary to increase the number of 
     personnel to prevent and respond to alleged violations of 
     section 249 of title 18, United States Code, as added by 
     section 7.

     SEC. 7. PROHIBITION OF CERTAIN HATE CRIME ACTS.

       (a) In General.--Chapter 13 of title 18, United States 
     Code, is amended by adding at the end the following:

     Sec. 249. Hate crime acts

       ``(a) In General.--
       ``(1) Offenses involving actual or perceived race, color, 
     religion, or national origin.--Whoever, whether or not acting 
     under color of law, willfully causes bodily injury to any 
     person or, through the use of fire, a firearm, or an 
     explosive or incendiary device, attempts to cause bodily 
     injury to any person, because of the actual or perceived 
     race, color, religion, or national origin of any person--
       ``(A) shall be imprisoned not more than 10 years, fined in 
     accordance with this title, or both; and
       ``(B) shall be imprisoned for any term of years or for 
     life, fined in accordance with this title, or both, if--
       ``(i) death results from the offense; or
       ``(ii) the offense includes kidnaping or an attempt to 
     kidnap, aggravated sexual abuse or an attempt to commit 
     aggravated sexual abuse, or an attempt to kill.
       ``(2) Offenses involving actual or perceived religion, 
     national origin, gender, sexual orientation, or disability.--
       ``(A) In general.--Whoever, whether or not acting under 
     color of law, in any circumstance described in subparagraph 
     (B), willfully causes bodily injury to any person or, through 
     the use of fire, a firearm, or an explosive or incendiary 
     device, attempts to cause bodily injury to any person, 
     because of the actual or perceived religion, national origin, 
     gender, sexual orientation, or disability of any person--
       ``(i) shall be imprisoned not more than 10 years, fined in 
     accordance with this title, or both; and
       ``(ii) shall be imprisoned for any term of years or for 
     life, fined in accordance with this title, or both, if--
       ``(I) death results from the offense; or
       ``(II) the offense includes kidnaping or an attempt to 
     kidnap, aggravated sexual abuse or an attempt to commit 
     aggravated sexual abuse, or an attempt to kill.
       ``(B) Circumstances described.--For purposes of 
     subparagraph (A), the circumstances described in this 
     subparagraph are that--
       ``(i) the conduct described in subparagraph (A) occurs 
     during the course of, or as the result of, the travel of the 
     defendant or the victim--
       ``(I) across a State line or national border; or
       ``(II) using a channel, facility, or instrumentality of 
     interstate or foreign commerce;
       ``(ii) the defendant uses a channel, facility, or 
     instrumentality of interstate or foreign commerce in 
     connection with the conduct described in subparagraph (A);
       ``(iii) in connection with the conduct described in 
     subparagraph (A), the defendant employs a firearm, explosive 
     or incendiary device, or other weapon that has traveled in 
     interstate or foreign commerce; or
       ``(iv) the conduct described in subparagraph (A)--
       ``(I) interferes with commercial or other economic activity 
     in which the victim is engaged at the time of the conduct; or
       ``(II) otherwise affects interstate or foreign commerce.
       ``(b) Certification Requirement.--No prosecution of any 
     offense described in this subsection may be undertaken by the 
     United States, except under the certification in writing of 
     the Attorney General, the Deputy Attorney General, the 
     Associate Attorney General, or any Assistant Attorney General 
     specially designated by the Attorney General that--
       ``(1) he or she has reasonable cause to believe that the 
     actual or perceived race, color, religion, national origin, 
     gender, sexual orientation, or disability of any person was a 
     motivating factor underlying the alleged conduct of the 
     defendant; and
       ``(2) he or his designee or she or her designee has 
     consulted with State or local law enforcement officials 
     regarding the prosecution and determined that--
       ``(A) the State does not have jurisdiction or does not 
     intend to exercise jurisdiction;
       ``(B) the State has requested that the Federal Government 
     assume jurisdiction;
       ``(C) the State does not object to the Federal Government 
     assuming jurisdiction; or
       ``(D) the verdict or sentence obtained pursuant to State 
     charges left demonstratively unvindicated the Federal 
     interest in eradicating bias-motivated violence.
       ``(c) Definitions.--In this section--
       ``(1) the term `explosive or incendiary device' has the 
     meaning given the term in section 232 of this title; and
       ``(2) the term `firearm' has the meaning given the term in 
     section 921(a) of this title.''.
       (b) Technical and Conforming Amendment.--The analysis for 
     chapter 13 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``249. Hate crime acts''.

     SEC. 8. DUTIES OF FEDERAL SENTENCING COMMISSION.

       (a) Amendment of Federal Sentencing Guidelines.--Pursuant 
     to the authority provided under section 994 of title 28, 
     United States Code, the United States Sentencing Commission 
     shall study the issue of adult recruitment of juveniles to 
     commit hate crimes and shall, if appropriate, amend the 
     Federal sentencing guidelines to provide sentencing 
     enhancements (in addition to the sentencing enhancement 
     provided for the use of a minor during the commission of an 
     offense) for adult defendants who recruit juveniles to assist 
     in the commission of hate crimes.
       (b) Consistency With Other Guidelines.--In carrying out 
     this section, the United States Sentencing Commission shall--
       (1) ensure that there is reasonable consistency with other 
     Federal sentencing guidelines; and
       (2) avoid duplicative punishments for substantially the 
     same offense.

     SEC. 9. STATISTICS.

       Subsection (b)(1) of the first section of the Hate Crimes 
     Statistics Act (28 U.S.C. 534 note) is amended by inserting 
     ``gender,'' after ``race,''.

     SEC. 10. SEVERABILITY.

       If any provision of this Act, an amendment made by this 
     Act, or the application of such provision or amendment to any 
     person or circumstance is held to be unconstitutional, the 
     remainder of this Act, the amendments made by this Act, and 
     the application of the provisions of such to any person or 
     circumstance shall not be affected thereby.
                                 ______
                                 
  SA 3862. Mr. KERRY submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Kids Come 
     First Act of 2006''.
       (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--EXPANDED COVERAGE OF CHILDREN UNDER MEDICAID AND SCHIP

Sec. 101. State option to receive 100 percent FMAP for medical 
              assistance for children in poverty in exchange for 
              expanded coverage of children in working poor families 
              under medicaid or SCHIP.
Sec. 102. Elimination of cap on SCHIP funding for States that expand 
              eligibility for children.

[[Page S4227]]

   TITLE II--STATE OPTIONS FOR INCREMENTAL CHILD COVERAGE EXPANSIONS

Sec. 201. State option to provide wrap-around SCHIP coverage to 
              children who have other health coverage.
Sec. 202. State option to enroll low-income children of State employees 
              in SCHIP.
Sec. 203. Optional coverage of legal immigrant children under medicaid 
              and SCHIP.
Sec. 204. State option for passive renewal of eligibility for children 
              under medicaid and SCHIP.

  TITLE III--TAX INCENTIVES FOR HEALTH INSURANCE COVERAGE OF CHILDREN

Sec. 301. Refundable credit for health insurance coverage of children.
Sec. 302. Forfeiture of personal exemption for any child not covered by 
              health insurance.

                        TITLE IV--MISCELLANEOUS

Sec. 401. Requirement for group market health insurers to offer 
              dependent coverage option for workers with children.
Sec. 402. Effective date.

                       TITLE V--REVENUE PROVISION

Sec. 501. Partial repeal of rate reduction in the highest income tax 
              bracket. 

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Need for universal coverage.--
       (A) Currently, there are 9,000,000 children under the age 
     of 19 that are uninsured. One out of every 8 children are 
     uninsured while 1 in 5 Hispanic children and 1 in 7 African 
     American children are uninsured. Three-quarters, 
     approximately 6,800,000, of these children are eligible but 
     not enrolled in the medicaid program or the State children's 
     health insurance program (SCHIP). Long-range studies found 
     that 1 in 3 children went without health insurance for all or 
     part of 2002 and 2003.
       (B) Low-income children are 3 times as likely as children 
     in higher income families to be uninsured. It is estimated 
     that 65 percent of uninsured children have at least 1 parent 
     working full time over the course of the year.
       (C) It is estimated that 50 percent of all legal immigrant 
     children in families with income that is less than 200 
     percent of the Federal poverty line are uninsured. In States 
     without programs to cover immigrant children, 57 percent of 
     non-citizen children are uninsured.
       (D) Children in the Southern and Western parts of the 
     United States were nearly 1.7 times more likely to be 
     uninsured than children in the Northeast. In the Northeast, 
     9.4 percent of children are uninsured while in the Midwest, 
     8.3 percent are uninsured. The South's rate of uninsured 
     children is 14.3 percent while the West has an uninsured rate 
     of 13 percent.
       (E) Children's health care needs are neglected in the 
     United States. One-quarter of young children in the United 
     States are not fully up to date on their basic immunizations. 
     One-third of children with chronic asthma do not get a 
     prescription for the necessary medications to manage the 
     disease.
       (F) According to the Centers for Disease Control and 
     Prevention, nearly \1/2\ of all uninsured children have not 
     had a well-child visit in the past year. One out of every 5 
     children has problems accessing needed care, and 1 out of 
     every 4 children do not receive annual dental exams. One in 6 
     uninsured children had a delayed or unmet medical need in the 
     past year. Minority children are less likely to receive 
     proven treatments such as prescription medications to treat 
     chronic disease.
       (G) There are 7,600,000 young adults between the ages of 19 
     and 20. In the United States, approximately 28 percent, or 
     2,100,000 individuals, of this group are uninsured.
       (H) Chronic illness and disability among children are on 
     the rise. Children most at risk for chronic illness and 
     disability are children who are most likely to be poor and 
     uninsured.
       (2) Role of the medicaid and state children's health 
     insurance programs.--
       (A) The medicaid program and SCHIP serve as a crucial 
     health safety net for 30,000,000 children. During the recent 
     economic downturn and the highest number of uninsured 
     individuals ever recorded in the United States, the medicaid 
     program and SCHIP offset losses in employer-sponsored 
     coverage. While the number of children living in low-income 
     families increased by 2,000,000 between 2000 and 2003, the 
     number of uninsured children fell due to the medicaid program 
     and SCHIP.
       (B) In 2003, 25,000,000 children were enrolled in the 
     medicaid program, accounting for \1/2\ of all enrollees and 
     only 19 percent of total program costs.
       (C) The medicaid program and SCHIP do more than just fill 
     in the gaps. Gains in public coverage have reduced the 
     percentage of low-income uninsured by a \1/3\ from 1997 to 
     2003. In addition, a recent study found that publicly-insured 
     children are more likely to obtain medical care, preventive 
     care and dental care than similar low-income privately-
     insured children.
       (D) Publicly funded programs such as the medicaid program 
     and SCHIP actually improve children's health. Children who 
     are currently insured by public programs are in better health 
     than they were a year ago. Expansion of coverage for children 
     and pregnant women under the medicaid program and SCHIP 
     reduces rates of avoidable hospitalizations by 22 percent.
       (E) Studies have found that children enrolled in public 
     insurance programs experienced a 68 percent improvement in 
     measures of school performance.
       (F) Despite the success of expansions in general under the 
     medicaid program and SCHIP, due to current budget 
     constraints, many States have stopped doing aggressive 
     outreach and have raised premiums and cost-sharing 
     requirements on families under these programs. In addition, 8 
     States stopped enrollment in SCHIP for a period of time 
     between April 2003 and July 2004. As a result, SCHIP 
     enrollment fell by 200,000 children for the first time in the 
     program's history.
       (G) It is estimated that nearly 50 percent of children 
     covered through SCHIP do not remain in the program due to 
     reenrollment barriers. A recent study found that between 10 
     and 40 percent of these children are ``lost'' in the system. 
     Difficult renewal policies and reenrollment barriers make 
     seamless coverage in SCHIP unattainable. Studies indicate 
     that as many as 67 percent of children who were eligible but 
     not enrolled for SCHIP had applied for coverage but were 
     denied due to procedural issues.
       (H) While the medicaid program and SCHIP expansions to date 
     have done much to offset what otherwise would have been a 
     significant loss of coverage among children because of 
     declining access to employer coverage, the shortcomings of 
     previous expansions, such as the failure to enroll all 
     eligible children and caps on enrollment in SCHIP because of 
     under-funding, also are clear.

    TITLE I--EXPANDED COVERAGE OF CHILDREN UNDER MEDICAID AND SCHIP

     SEC. 101. STATE OPTION TO RECEIVE 100 PERCENT FMAP FOR 
                   MEDICAL ASSISTANCE FOR CHILDREN IN POVERTY IN 
                   EXCHANGE FOR EXPANDED COVERAGE OF CHILDREN IN 
                   WORKING POOR FAMILIES UNDER MEDICAID OR SCHIP.

       (a) State Option.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended by redesignating section 1939 
     as section 1940, and by inserting after section 1938 the 
     following:


 ``STATE OPTION FOR INCREASED FMAP FOR MEDICAL ASSISTANCE FOR CHILDREN 
  IN POVERTY IN EXCHANGE FOR EXPANDED COVERAGE OF CHILDREN IN WORKING 
              POOR FAMILIES UNDER THIS TITLE OR TITLE XXI

       ``Sec. 1939. (a) 100 Percent FMAP.--
       ``(1) In general.--Notwithstanding any other provision of 
     this title, in the case of a State that, through an amendment 
     to each of its State plans under this title and title XXI (or 
     to a waiver of either such plan), agrees to satisfy the 
     conditions described in subsections (b), (c), and (d) the 
     Federal medical assistance percentage shall be 100 percent 
     with respect to the total amount expended by the State for 
     providing medical assistance under this title for each fiscal 
     year quarter beginning on or after the date described in 
     subsection (e) for children whose family income does not 
     exceed 100 percent of the poverty line.
       ``(2) Limitation on scope of application of increase.--The 
     increase in the Federal medical assistance percentage for a 
     State under this section shall apply only with respect to the 
     total amount expended for providing medical assistance under 
     this title for a fiscal year quarter for children described 
     in paragraph (1) and shall not apply with respect to--
       ``(A) any other payments made under this title, including 
     disproportionate share hospital payments described in section 
     1923;
       ``(B) payments under title IV or XXI; or
       ``(C) any payments made under this title or title XXI that 
     are based on the enhanced FMAP described in section 2105(b).
       ``(b) Eligibility Expansions.--The condition described in 
     this subsection is that the State agrees to do the following:
       ``(1) Coverage under medicaid or schip for children in 
     families whose income does not exceed 300 percent of the 
     poverty line.--
       ``(A) In general.--The State agrees to provide medical 
     assistance under this title or child health assistance under 
     title XXI to children whose family income exceeds the 
     medicaid applicable income level (as defined in section 
     2110(b)(4) but by substituting `January 1, 2006' for `March 
     31, 1997'), but does not exceed 300 percent of the poverty 
     line.
       ``(B) State option to expand coverage through subsidized 
     purchase of family coverage.--A State may elect to carry out 
     subparagraph (A) through the provision of assistance for the 
     purchase of dependent coverage under a group health plan or 
     health insurance coverage if--
       ``(i) the dependent coverage is consistent with the benefit 
     standards under this title or title XXI, as approved by the 
     Secretary; and
       ``(ii) the State provides additional benefits under this 
     title or title XXI.
       ``(C) Deemed satisfaction for certain states.--A State 
     that, as of January 1, 2006, provides medical assistance 
     under this title or child health assistance under title XXI 
     to children whose family income is 300 percent of the poverty 
     line shall be deemed to satisfy this paragraph.
       ``(2) Coverage for children under age 21.--The State agrees 
     to define a child for

[[Page S4228]]

     purposes of this title and title XXI as an individual who has 
     not attained 21 years of age.
       ``(3) Opportunity for higher income children to purchase 
     schip coverage.--The State agrees to permit any child whose 
     family income exceeds 300 percent of the poverty line to 
     purchase full or additional coverage under title XXI at the 
     full cost of providing such coverage, as determined by the 
     State.
       ``(4) Coverage for legal immigrant children.--The State 
     agrees to--
       ``(A) provide medical assistance under this title and child 
     health assistance under title XXI for alien children who are 
     lawfully residing in the United States (including battered 
     aliens described in section 431(c) of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996) and who are otherwise eligible for such assistance in 
     accordance with section 1903(v)(4) and 2107(e)(1)(E); and
       ``(B) not establish or enforce barriers that deter 
     applications by such aliens, including through the 
     application of the removal of the barriers described in 
     subsection (c).
       ``(c) Removal of Enrollment and Access Barriers.--The 
     condition described in this subsection is that the State 
     agrees to do the following:
       ``(1) Presumptive eligibility for children.--The State 
     agrees to--
       ``(A) provide presumptive eligibility for children under 
     this title and title XXI in accordance with section 1920A;
       ``(B) treat any items or services that are provided to an 
     uncovered child (as defined in section 2110(c)(8)) who is 
     determined ineligible for medical assistance under this title 
     as child health assistance for purposes of paying a provider 
     of such items or services, so long as such items or services 
     would be considered child health assistance for a targeted 
     low-income child under title XXI.
       ``(2) Adoption of 12-month continuous enrollment.--The 
     State agrees to provide that eligibility for assistance under 
     this title and title XXI shall not be regularly redetermined 
     more often than once every year for children.
       ``(3) Acceptance of self-declaration of income.--The State 
     agrees to permit the family of a child applying for medical 
     assistance under this title or child health assistance under 
     title XXI to declare and certify by signature under penalty 
     of perjury family income for purposes of collecting financial 
     eligibility information.
       ``(4) Adoption of acceptance of eligibility determinations 
     for other assistance programs.--The State agrees to accept 
     determinations (made within a reasonable period, as found by 
     the State, before its use for this purpose) of an 
     individual's family or household income made by a Federal or 
     State agency (or a public or private entity making such 
     determination on behalf of such agency), including the 
     agencies administering the Food Stamp Act of 1977, the 
     Richard B. Russell National School Lunch Act, and the Child 
     Nutrition Act of 1966, notwithstanding any differences in 
     budget unit, disregard, deeming, or other methodology, but 
     only if--
       ``(A) such agency has fiscal liabilities or 
     responsibilities affected or potentially affected by such 
     determinations; and
       ``(B) any information furnished by such agency pursuant to 
     this subparagraph is used solely for purposes of determining 
     eligibility for medical assistance under this title or for 
     child health assistance under title XXI.
       ``(5) No assets test.--The State agrees to not (or 
     demonstrates that it does not) apply any assets or resources 
     test for eligibility under this title or title XXI with 
     respect to children.
       ``(6) Eligibility Determinations and Redeterminations.--
       ``(A) In general.--The State agrees for purposes of initial 
     eligibility determinations and redeterminations of children 
     under this title and title XXI not to require a face-to-face 
     interview and to permit applications and renewals by mail, 
     telephone, and the Internet.
       ``(B) Nonduplication of information.--
       ``(i) In general.--For purposes of redeterminations of 
     eligibility for currently or previously enrolled children 
     under this title and title XXI, the State agrees to use all 
     information in its possession (including information 
     available to the State under other Federal or State programs) 
     to determine eligibility or redetermine continued eligibility 
     before seeking similar information from parents.
       ``(ii) Rule of construction.--Nothing in clause (i) shall 
     be construed as limiting any obligation of a State to provide 
     notice and a fair hearing before denying, terminating, or 
     reducing a child's coverage based on such information in the 
     possession of the State.
       ``(7) No waiting list for children under schip.--The State 
     agrees to not impose any numerical limitation, waiting list, 
     waiting period, or similar limitation on the eligibility of 
     children for child health assistance under title XXI or to 
     establish or enforce other barriers to the enrollment of 
     eligible children based on the date of their application for 
     coverage.
       ``(8) Adequate provider payment rates.--The State agrees 
     to--
       ``(A) establish payment rates for children's health care 
     providers under this title that are no less than the average 
     of payment rates for similar services for such providers 
     provided under the benchmark benefit packages described in 
     section 2103(b);
       ``(B) establish such rates in amounts that are sufficient 
     to ensure that children enrolled under this title or title 
     XXI have adequate access to comprehensive care, in accordance 
     with the requirements of section 1902(a)(30)(A); and
       ``(C) include provisions in its contracts with providers 
     under this title guaranteeing compliance with these 
     requirements.
       ``(d) Maintenance of Medicaid Eligibility Levels for 
     Children.--
       ``(1) In general.--The condition described in this 
     subsection is that the State agrees to maintain eligibility 
     income, resources, and methodologies applied under this title 
     (including under a waiver of such title or under section 
     1115) with respect to children that are no more restrictive 
     than the eligibility income, resources, and methodologies 
     applied with respect to children under this title (including 
     under such a waiver) as of January 1, 2006.
       ``(2) Rule of construction.--Nothing in this section shall 
     be construed as implying that a State does not have to comply 
     with the minimum income levels required for children under 
     section 1902(l)(2).
       ``(e) Date Described.--The date described in this 
     subsection is the date on which, with respect to a State, a 
     plan amendment that satisfies the requirements of subsections 
     (b), (c), and (d) is approved by the Secretary.
       ``(f) Definition of Poverty Line.--In this section, the 
     term `poverty line' has the meaning given that term in 
     section 2110(c)(5).''.
       (b) Conforming Amendments.--
       (1) The third sentence of section 1905(b) of the Social 
     Security Act (42 U.S.C. 1396d(b)) is amended by inserting 
     before the period the following: ``, and with respect to 
     amounts expended for medical assistance for children on or 
     after the date described in subsection (d) of section 1939, 
     in the case of a State that has, in accordance with such 
     section, an approved plan amendment under this title and 
     title XXI''.
       (2) Section 1903(f)(4) of the Social Security Act (42 
     U.S.C. 1396b(f)(4)) is amended--
       (A) in subparagraph (C), by adding ``or'' after ``section 
     1611(b)(1),''; and
       (B) by inserting after subparagraph (C), the following:
       ``(D) who would not receive such medical assistance but for 
     State electing the option under section 1939 and satisfying 
     the conditions described in subsections (b), (c), and (d) of 
     such section,''.

     SEC. 102. ELIMINATION OF CAP ON SCHIP FUNDING FOR STATES THAT 
                   EXPAND ELIGIBILITY FOR CHILDREN.

       (a) In General.--Section 2105 of the Social Security Act 
     (42 U.S.C. 1397dd) is amended by adding at the end the 
     following:
       ``(h) Guaranteed Funding for Child Health Assistance for 
     Coverage Expansion States.--
       ``(1) In general.--Only in the case of a State that has, in 
     accordance with section 1939, an approved plan amendment 
     under this title and title XIX, any payment cap that would 
     otherwise apply to the State under this title as a result of 
     having expended all allotments available for expenditure by 
     the State with respect to a fiscal year shall not apply with 
     respect to amounts expended by the State on or after the date 
     described in section 1939(d).
       ``(2) Appropriation.--There is appropriated, out of any 
     money in the Treasury not otherwise appropriated, such sums 
     as may be necessary for the purpose of paying a State 
     described in paragraph (1) for each quarter beginning on or 
     after the date described in section 1939(d), an amount equal 
     to the enhanced FMAP of expenditures described in paragraph 
     (1) and incurred during such quarter.''.
       (b) Conforming Amendments.--Section 2104 of the Social 
     Security Act (42 U.S.C. 1397dd) is amended--
       (1) in subsection (a), by inserting ``subject to section 
     2105(h),'' after ``under this section,'';
       (2) in subsection (b)(1), by inserting ``and section 
     2105(h)'' after ``Subject to paragraph (4)''; and
       (3) in subsection (c)(1), by inserting ``subject to section 
     2105(h),'' after ``for a fiscal year,''.

   TITLE II--STATE OPTIONS FOR INCREMENTAL CHILD COVERAGE EXPANSIONS

     SEC. 201. STATE OPTION TO PROVIDE ADDITIONAL SCHIP COVERAGE 
                   TO CHILDREN WHO HAVE OTHER HEALTH COVERAGE.

       (a) In General.--Section 2110(b) of the Social Security Act 
     (42 U.S.C. 1397jj(b)) is amended--
       (1) in paragraph (1)(C), by inserting ``, subject to 
     paragraph (5),'' after ``under title XIX or''; and
       (2) by adding at the end the following new paragraph:
       ``(5) State option to provide additional coverage.--
       ``(A) In general.--A State may waive the requirement of 
     paragraph (1)(C) that a targeted low-income child may not be 
     covered under a group health plan or under health insurance 
     coverage in order to provide--
       ``(i) items or services that are not covered, or are only 
     partially covered, under such plan or coverage; or
       ``(ii) cost-sharing protection.
       ``(B) Eligibility.--In waiving such requirement, a State 
     may limit the application of the waiver to children whose 
     family income does not exceed a level specified by the State, 
     so long as the level so specified does not exceed the maximum 
     income level otherwise established for other children under 
     the State child health plan.

[[Page S4229]]

       ``(C) Continued application of duty to prevent substitution 
     of existing coverage.--Nothing in this paragraph shall be 
     construed as modifying the application of section 
     2102(b)(3)(C) to a State.''.
       (b) Application of Enhanced Match under Medicaid.--Section 
     1905 of such Act (42 U.S.C. 1396d) is amended--
       (1) in subsection (b), in the fourth sentence, by striking 
     ``subsection (u)(3)'' and inserting ``(u)(3), or (u)(4)''; 
     and
       (2) in subsection (u), by redesignating paragraph (4) as 
     paragraph (5) and by inserting after paragraph (3) the 
     following:
       ``(4) For purposes of subsection (b), the expenditures 
     described in this paragraph are expenditures for items and 
     services for children described in section 2110(b)(5).''.
       (c) Application of Secondary Payor Provisions.--Section 
     2107(e)(1) of such Act (42 U.S.C. 1397gg(e)(1)) is amended--
       (1) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively; and
       (2) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) Section 1902(a)(25) (relating to coordination of 
     benefits and secondary payor provisions) with respect to 
     children covered under a waiver described in section 
     2110(b)(5).''.

     SEC. 202. STATE OPTION TO ENROLL LOW-INCOME CHILDREN OF STATE 
                   EMPLOYEES IN SCHIP.

       Section 2110(b)(2) of the Social Security Act (42 U.S.C. 
     1397jj(b)(2)) is amended--
       (1) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively and realigning the left margins of 
     such clauses appropriately;
       (2) by striking ``Such term'' and inserting the following:
       ``(A) In general.--Such term''; and
       (3) by adding at the end the following:
       ``(B) State option to enroll low-income children of state 
     employees.--At the option of a State, subparagraph (A)(ii) 
     shall not apply to any low-income child who would otherwise 
     be eligible for child health assistance under this title but 
     for such subparagraph.''.

     SEC. 203. OPTIONAL COVERAGE OF LEGAL IMMIGRANT CHILDREN UNDER 
                   MEDICAID AND SCHIP.

       (a) Medicaid Program.--Section 1903(v) of the Social 
     Security Act (42 U.S.C. 1396b(v)) is amended--
       (1) in paragraph (1), by striking ``paragraph (2)'' and 
     inserting ``paragraphs (2) and (4)''; and
       (2) by adding at the end the following:
       ``(4)(A) A State may elect (in a plan amendment under this 
     title) to provide medical assistance under this title for 
     aliens who are lawfully residing in the United States 
     (including battered aliens described in section 431(c) of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996) and who are otherwise eligible for such 
     assistance, within any of the following eligibility 
     categories:
       ``(i) Children.--Children (as defined under such plan), 
     including optional targeted low-income children described in 
     section 1905(u)(2)(B).
       ``(B)(i) In the case of a State that has elected to provide 
     medical assistance to a category of aliens under subparagraph 
     (A), no debt shall accrue under an affidavit of support 
     against any sponsor of such an alien on the basis of 
     provision of assistance to such category and the cost of such 
     assistance shall not be considered as an unreimbursed cost.
       ``(ii) The provisions of sections 401(a), 402(b), 403, and 
     421 of the Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 shall not apply to a State that 
     makes an election under subparagraph (A).''.
       (b) Title XXI.--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 1903(v)(4) (relating to optional coverage of 
     permanent resident alien children), but only if the State has 
     elected to apply such section to that category of children 
     under title XIX.''.

     SEC. 204. STATE OPTION FOR PASSIVE RENEWAL OF ELIGIBILITY FOR 
                   CHILDREN UNDER MEDICAID AND SCHIP.

       (a) In General.--Section 1902(l) of the Social Security Act 
     (42 U.S.C. 1396a(l)) is amended by adding at the end the 
     following:
       ``(5) Notwithstanding any other provision of this title, a 
     State may provide that an individual who has not attained 21 
     years of age who has been determined eligible for medical 
     assistance under this title shall remain eligible for medical 
     assistance until such time as the State has information 
     demonstrating that the individual is no longer so 
     eligible.''.
       (b) Application under Title XXI.--Section 2107(e)(1) of the 
     Social Security Act (42 U.S.C. 1397gg(e)) is amended--
       (1) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively; and
       (2) by inserting after subparagraph (A), the following:
       ``(B) Section 1902(l)(5) (relating to passive renewal of 
     eligibility for children).''.

  TITLE III--TAX INCENTIVES FOR HEALTH INSURANCE COVERAGE OF CHILDREN

     SEC. 301. REFUNDABLE CREDIT FOR HEALTH INSURANCE COVERAGE OF 
                   CHILDREN.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     refundable credits) is amended by redesignating section 36 as 
     section 37 and by inserting after section 35 the following 
     new section:

     ``SEC. 36. HEALTH INSURANCE COVERAGE OF CHILDREN.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     subtitle an amount equal to so much of the amount paid during 
     the taxable year, not compensated for by insurance or 
     otherwise, for qualified health insurance for each dependent 
     child of the taxpayer, as exceeds 5 percent of the adjusted 
     gross income of such taxpayer for such taxable year.
       ``(b) Dependent Child.--For purposes of this section, the 
     term `dependent child' means any child (as defined in section 
     152(f)(1)) who has not attained the age of 19 as of the close 
     of the calendar year in which the taxable year of the 
     taxpayer begins and with respect to whom a deduction under 
     section 151 is allowable to the taxpayer.
       ``(c) Qualified Health Insurance.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified health insurance' 
     means insurance, either employer-provided or made available 
     under title XIX or XXI of the Social Security Act, which 
     constitutes medical care as defined in section 213(d) without 
     regard to--
       ``(A) paragraph (1)(C) thereof, and
       ``(B) so much of paragraph (1)(D) thereof as relates to 
     qualified long-term care insurance contracts.
       ``(2) Exclusion of certain other contracts.--Such term 
     shall not include insurance if a substantial portion of its 
     benefits are excepted benefits (as defined in section 
     9832(c)).
       ``(d) Medical Savings Account and Health Savings Account 
     Contributions.--
       ``(1) In general.--If a deduction would (but for paragraph 
     (2)) be allowed under section 220 or 223 to the taxpayer for 
     a payment for the taxable year to the medical savings account 
     or health savings account of an individual, subsection (a) 
     shall be applied by treating such payment as a payment for 
     qualified health insurance for such individual.
       ``(2) Denial of double benefit.--No deduction shall be 
     allowed under section 220 or 223 for that portion of the 
     payments otherwise allowable as a deduction under section 220 
     or 223 for the taxable year which is equal to the amount of 
     credit allowed for such taxable year by reason of this 
     subsection.
       ``(e) Special Rules.--
       ``(1) Determination of insurance costs.--The Secretary 
     shall provide rules for the allocation of the cost of any 
     qualified health insurance for family coverage to the 
     coverage of any dependent child under such insurance.
       ``(2) Coordination with deduction for health insurance 
     costs of self-employed individuals.--In the case of a 
     taxpayer who is eligible to deduct any amount under section 
     162(l) for the taxable year, this section shall apply only if 
     the taxpayer elects not to claim any amount as a deduction 
     under such section for such year.
       ``(3) Coordination with medical expense and high deductible 
     health plan deductions.--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.
       ``(4) 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 is allowable to another 
     taxpayer for a taxable year beginning in the calendar year in 
     which such individual's taxable year begins.
       ``(5) Denial of double benefit.--No credit shall be allowed 
     under subsection (a) if the credit under section 35 is 
     allowed and no credit shall be allowed under 35 if a credit 
     is allowed under this section.
       ``(6) 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) 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 new 
     section:

     ``SEC. 6050U. RETURNS RELATING TO PAYMENTS FOR QUALIFIED 
                   HEALTH INSURANCE.

       ``(a) In General.--Any governmental unit or 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 a dependent child (as defined in 
     section 36(b)) of such 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 dependent child 
     (as so defined) who was provided by such person with coverage 
     under creditable health insurance by reason of such payments 
     and the period of such coverage, and

[[Page S4230]]

       ``(C) 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(c)).
       ``(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 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 new clause:
       ``(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 the next to last 
     subparagraph, by striking the period at the end of the last 
     subparagraph and inserting ``, or'', and by adding at the end 
     the following new subparagraph:
       ``(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 new item:

``Sec. 6050U. Returns relating to payments for qualified health 
              insurance.''.

       (c) 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 36 of such Code''.
       (2) 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 the last item and inserting the 
     following new items:

``Sec. 36. Health insurance coverage of children.
``Sec. 37. Overpayments of tax.''. Q
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

     SEC. 302. FORFEITURE OF PERSONAL EXEMPTION FOR ANY CHILD NOT 
                   COVERED BY HEALTH INSURANCE.

       (a) In General.--Section 151(d) of the Internal Revenue 
     Code of 1986 (relating to exemption amount) is amended by 
     adding at the end the following new paragraph:
       ``(5) Reduction of exemption amount for any child not 
     covered by health insurance.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the exemption amount otherwise determined under 
     this subsection for any dependent child (as defined in 
     section 36(b)) for any taxable year shall be reduced by the 
     same percentage as the percentage of such taxable year during 
     which such dependent child was not covered by qualified 
     health insurance (as defined in section 36(c)).
       ``(B) Full reduction if no proof of coverage is provided.--
     For purposes of subparagraph (A), in the case of any taxpayer 
     who fails to attach to the return of tax for any taxable year 
     a copy of the statement furnished to such taxpayer under 
     section 6050U, the percentage reduction under such 
     subparagraph shall be deemed to be 100 percent.
       ``(C) Nonapplication of paragraph to taxpayers in lowest 
     tax bracket.--This paragraph shall not apply to any taxpayer 
     whose taxable income for the taxable year does not exceed the 
     initial bracket amount determined under section 
     1(i)(1)(B).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

                        TITLE IV--MISCELLANEOUS

     SEC. 401. REQUIREMENT FOR GROUP MARKET HEALTH INSURERS TO 
                   OFFER DEPENDENT COVERAGE OPTION FOR WORKERS 
                   WITH CHILDREN.

       (a) ERISA.--
       (1) In general.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 714. REQUIREMENT TO OFFER OPTION TO PURCHASE DEPENDENT 
                   COVERAGE FOR CHILDREN.

       ``(a) Requirements for Coverage.--A group health plan, and 
     a health insurance issuer providing health insurance coverage 
     in connection with a group health plan, shall offer an 
     individual who is enrolled in such coverage the option to 
     purchase dependent coverage for a child of the individual.
       ``(b) No Employer Contribution Required.--An employer shall 
     not be required to contribute to the cost of purchasing 
     dependent coverage for a child by an individual who is an 
     employee of such employer.
       ``(c) Definition of Child.--In this section, the term 
     `child' means an individual who has not attained 21 years of 
     age.''.
       (2) Clerical amendment.--The table of contents in section 1 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1001) is amended by inserting after the item relating 
     to section 713 the following:

``Sec. 714. Requirement to offer option to purchase dependent coverage 
              for children.''.

       (b) Public Health Service Act.--Subpart 2 of part A of 
     title XXVII of the Public Health Service Act (42 U.S.C. 
     300gg-4 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 2707. REQUIREMENT TO OFFER OPTION TO PURCHASE 
                   DEPENDENT COVERAGE FOR CHILDREN.

       ``(a) Requirements for Coverage.--A group health plan, and 
     a health insurance issuer providing health insurance coverage 
     in connection with a group health plan, shall offer an 
     individual who is enrolled in such coverage the option to 
     purchase dependent coverage for a child of the individual.
       ``(b) No Employer Contribution Required.--An employer shall 
     not be required to contribute to the cost of purchasing 
     dependent coverage for a child by an individual who is an 
     employee of such employer.
       ``(c) Definition of Child.--In this section, the term 
     `child' means an individual who has not attained 21 years of 
     age.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to plan years beginning on or after 
     January 1, 2007.

     SEC. 402. EFFECTIVE DATE.

       Unless otherwise provided, the amendments made by this Act 
     shall take effect on October 1, 2006, and shall apply to 
     child health assistance and medical assistance provided on or 
     after that date without regard to whether or not final 
     regulations to carry out such amendments have been 
     promulgated by such date.

                       TITLE V--REVENUE PROVISION

     SEC. 501. PARTIAL REPEAL OF RATE REDUCTION IN THE HIGHEST 
                   INCOME TAX BRACKET.

       Section 1(i)(2) of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following flush sentence:
     ``In the case of taxable years beginning during calendar year 
     2006 and thereafter, the final item in the fourth column in 
     the preceding table shall be applied by substituting for 
     `35.0%' such rate as the Secretary determines is necessary to 
     provide sufficient revenues to offset the Federal outlays 
     required to implement the provisions of, and amendments made 
     by, the Kids Come First Act of 2006.''.
                                 ______
                                 
  SA 3863. Mr. SMITH submitted an amendment intended to be proposed by 
him to the bill S. 1955 to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       In section 2922 of the Public Health Service Act, as added 
     by section 201 of the bill, strike subsection (a) and insert 
     the following:
       ``(a) Benefit Choice Options.--
       ``(1) Development.--Not later than 6 months after the date 
     of enactment of this title, the Secretary shall issue, by 
     interim final rule, Benefit Choice Standards that implement a 
     standard benefit package as provided for in this part.
       ``(2) Requirement.--The Benefit Choice Standards shall 
     provide that a health insurance issuer in a State, may offer 
     a coverage plan or plan in the small group market, individual 
     market, large group market, or through a small business 
     health plan, that does not comply with one or more mandates 
     regarding covered benefits, services, or category of provider 
     as may be in effect in such State with respect to such market 
     or markets (either prior to or following the date of 
     enactment of this title), if such coverage or plan provides 
     for coverage of a standard benefit package as provided for in 
     paragraph (3).
       ``(3) Standard benefit package.--A health insurance issuer 
     described in paragraph (2) shall offer to purchasers 
     (including, with respect to a small business health plan, the 
     participating employers of such plan) a plan that, at a 
     minimum, provides coverage for such benefits, services, and 
     categories of providers as are required under the laws of at 
     least 25 States, as determined by the Secretary.
       ``(4) Publication of benefit package.--Not later than 3 
     months after the date of enactment of this title, and on the 
     first day of every calendar year thereafter, the Secretary 
     shall publish in the Federal Register

[[Page S4231]]

     the standard benefit package required under this subsection. 
     In making such publication the Secretary shall resolve any 
     variations that exist in the scope of the benefits, services, 
     and categories of providers required under the laws of the 
     States considered by the Secretary for purposes of paragraph 
     (3).
       ``(5) Updating of benefit package.--Not later than 2 years 
     after the date on which the standard benefit package is 
     issued under paragraph (3), and every 2 years thereafter, the 
     Secretary, in consultation with the National Association of 
     Insurance Commissioners, shall update the package. The 
     Secretary shall issue the updated package by regulation, and 
     such updated package shall be effective upon the first plan 
     year following the issuance of such regulation.
                                 ______
                                 
  SA 3864. Mr. SMITH submitted an amendment intended to be proposed by 
him to the bill S. 1955 to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the end of the amendment, add the following:
       ``(__) Provision of Mental Health Benefits.--The standard 
     benefit package under this part shall require that health 
     plans include coverage (and cost sharing if applicable) for 
     mental health care in a manner that is comparable to the 
     coverage (and cost sharing if applicable) provided under such 
     plan for items and services relating to physical health.
                                 ______
                                 
  SA 3865. Mr. SMITH submitted an amendment intended to be proposed by 
him to the bill S. 1955 to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       In section 2922(a) of the Public Health Service Act, as 
     added by section 201 of the bill, add at the end the 
     following:
       ``(5) Application of cost sharing.--A health insurance 
     issuer in a State that offers a basic option plan as provided 
     for in paragraph (2) and an enhanced option plan as provided 
     for in paragraph (3), shall ensure that any cost sharing 
     required under either such option is comparable, with respect 
     to dollar amounts, to the cost sharing required under the 
     other such option.
                                 ______
                                 
  SA 3866. Mr. SMITH submitted an amendment intended to be proposed by 
him to the bill S. 1955 to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       In section 2922(a) of the Public Health Service Act, as 
     added by section 201 of the bill, add at the end the 
     following:
       ``(5) Provision of mental health benefits.--A health 
     insurance issuer in a State that offers a basic option plan 
     as provided for in paragraph (2) and an enhanced option plan 
     as provided for in paragraph (3), shall ensure that each such 
     plan provides coverage (and cost sharing if applicable) for 
     mental health care in a manner that is comparable to the 
     coverage (and cost sharing if applicable) provided under each 
     such plan for items and services relating to physical health.
                                 ______
                                 
  SA 3867. Ms. SNOWE submitted an amendment intended to be proposed by 
her to the bill S. 1955 to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. NEGOTIATING FAIR PRICES FOR MEDICARE PRESCRIPTION 
                   DRUGS.

       (a) In General.--Section 1860D-11 (42 U.S.C. 1395w-111) is 
     amended by striking subsection (i) (relating to 
     noninterference) and inserting the following:
       ``(i) Authority To Negotiate Prices With Manufacturers.--
       ``(1) In general.--Subject to paragraph (4), in order to 
     ensure that beneficiaries enrolled under prescription drug 
     plans and MA-PD plans pay the lowest possible price, the 
     Secretary shall have authority similar to that of other 
     Federal entities that purchase prescription drugs in bulk to 
     negotiate contracts with manufacturers of covered part D 
     drugs, consistent with the requirements and in furtherance of 
     the goals of providing quality care and containing costs 
     under this part.
       ``(2) Mandatory responsibilities.--The Secretary shall be 
     required to--
       ``(A) negotiate contracts with manufacturers of covered 
     part D drugs for each fallback prescription drug plan under 
     subsection (g); and
       ``(B) participate in negotiation of contracts of any 
     covered part D drug upon request of an approved prescription 
     drug plan or MA-PD plan.
       ``(3) Rule of construction.--Nothing in paragraph (2) shall 
     be construed to limit the authority of the Secretary under 
     paragraph (1) to the mandatory responsibilities under 
     paragraph (2).
       ``(4) No particular formulary or price structure.--In order 
     to promote competition under this part and in carrying out 
     this part, the Secretary may not require a particular 
     formulary or institute a price structure for the 
     reimbursement of covered part D drugs.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of enactment of this Act.
                                 ______
                                 
  SA 3868. Mr. OBAMA submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Hospital Quality Report Card 
     Act of 2006''.

     SEC. 2. PURPOSE.

       The purpose of this Act is to expand hospital quality 
     reporting by establishing the Hospital Quality Report Card 
     Initiative under the Medicare program to ensure that hospital 
     quality measures data are readily available and accessible in 
     order to--
       (1) assist patients and consumers in making decisions about 
     where to get health care;
       (2) assist purchasers and insurers in making decisions that 
     determine where employees, subscribers, members, or 
     participants are able to go for their health care;
       (3) assist health care providers in identifying 
     opportunities for quality improvement and cost containment; 
     and
       (4) enhance the understanding of policy makers and public 
     officials of health care issues, raise public awareness of 
     hospital quality issues, and to help constituents of such 
     policy makers and officials identify quality health care 
     options.

     SEC. 3. HOSPITAL QUALITY REPORT CARD INITIATIVE.

       (a) In General.--Title XVIII of the Social Security Act (42 
     U.S.C. 1395 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 1898. HOSPITAL QUALITY REPORT CARD INITIATIVE.

       ``(a) In General.--Not later than 18 months after the date 
     of the enactment of the Hospital Quality Report Card Act of 
     2006, the Secretary, acting through the Administrator of the 
     Centers for Medicare & Medicaid Services (in this section 
     referred to as the `Administrator') and in consultation with 
     the Director of the Agency for Healthcare Research and 
     Quality, shall, directly or through contracts with States, 
     establish and implement a Hospital Quality Report Card 
     Initiative (in this section referred to as the `Initiative') 
     to report on health care quality in subsection (d) hospitals.
       ``(b) Subsection (d) Hospital.--For purposes of this 
     section, the term `subsection (d) hospital' has the meaning 
     given such term in section 1886(d)(1)(B).
       ``(c) Requirements of Initiative.--
       ``(1) Quality measurement reports for hospitals.--
       ``(A) Quality measures.--Not less than 2 times each year, 
     the Secretary shall publish reports on hospital quality. Such 
     reports shall include quality measures data submitted under 
     section 1886(b)(3)(B)(viii), and other data as feasible, that 
     allow for an assessment of health care--
       ``(i) effectiveness;
       ``(ii) safety;
       ``(iii) timeliness;
       ``(iv) efficiency;
       ``(v) patient-centeredness; and
       ``(vi) equity.
       ``(B) Report card features.--In collecting and reporting 
     data as provided for under subparagraph (A), the Secretary 
     shall include hospital information, as possible, relating 
     to--
       ``(i) staffing levels of nurses and other health 
     professionals, as appropriate;
       ``(ii) rates of nosocomial infections;
       ``(iii) the volume of various procedures performed;
       ``(iv) the availability of interpreter services on-site;
       ``(v) the accreditation of hospitals, as well as sanctions 
     and other violations found by accreditation or State 
     licensing boards;
       ``(vi) the quality of care for various patient populations, 
     including pediatric populations and racial and ethnic 
     minority populations;
       ``(vii) the availability of emergency rooms, intensive care 
     units, obstetrical units, and burn units;

[[Page S4232]]

       ``(viii) the quality of care in various hospital settings, 
     including inpatient, outpatient, emergency, maternity, and 
     intensive care unit settings;
       ``(ix) the use of health information technology, 
     telemedicine, and electronic medical records;
       ``(x) ongoing patient safety initiatives; and
       ``(xi) other measures determined appropriate by the 
     Secretary.
       ``(C) Tailoring of hospital quality reports.--The Director 
     of the Agency for Healthcare Research and Quality may modify 
     and publish hospital reports to include quality measures for 
     diseases and health conditions of particular relevance to 
     certain regions, States, or local areas.
       ``(D) Risk adjustment.--
       ``(i) In general.--In reporting data as provided for under 
     subparagraph (A), the Secretary may risk adjust quality 
     measures to account for differences relating to--

       ``(I) the characteristics of the reporting hospital, such 
     as licensed bed size, geography, teaching hospital status, 
     and profit status; and
       ``(II) patient characteristics, such as health status, 
     severity of illness, insurance status, and socioeconomic 
     status.

       ``(ii) Availability of unadjusted data.--If the Secretary 
     reports data under subparagraph (A) using risk-adjusted 
     quality measures, the Secretary shall establish procedures 
     for making the unadjusted data available to the public in a 
     manner determined appropriate by the Secretary.
       ``(E) Costs.--The Secretary shall--
       ``(i) compile data relating to the average hospital cost 
     for ICD-9 conditions for which quality measures data are 
     collected; and
       ``(ii) report such information in a manner that allows cost 
     comparisons between or among subsection (d) hospitals.
       ``(F) Verification.--Under the Initiative, the Secretary 
     may verify data reported under this paragraph to ensure 
     accuracy and validity.
       ``(G) Disclosure.--The Secretary shall disclose the entire 
     methodology for the reporting of data under this paragraph to 
     all relevant organizations and all subsection (d) hospitals 
     that are the subject of any such information that is to be 
     made available to the public prior to the public disclosure 
     of such information.
       ``(H) Public input.--The Secretary shall provide an 
     opportunity for public review and comment with respect to the 
     quality measures to be reported for subsection (d) hospitals 
     under this section for at least 60 days prior to the 
     finalization by the Secretary of the quality measures to be 
     used for such hospitals.
       ``(I) Availability of reports and findings.--
       ``(i) Electronic availability.--The Secretary shall ensure 
     that reports are made available under this section in an 
     electronic format, in an understandable manner with respect 
     to various populations (including those with low functional 
     health literacy), and in a manner that allows health care 
     quality comparisons to be made between local hospitals.
       ``(ii) Findings.--The Secretary shall establish procedures 
     for making report findings available to the public, upon 
     request, in a non-electronic format, such as through the 
     toll-free telephone number 1-800-MEDICARE.
       ``(J) Identification of methodology.--The analytic 
     methodologies and limitations on data sources utilized by the 
     Secretary to develop and disseminate the comparative data 
     under this section shall be identified and acknowledged as 
     part of the dissemination of such data, and include the 
     appropriate and inappropriate uses of such data.
       ``(K) Adverse selection of patients.--On at least an annual 
     basis, the Secretary shall compare quality measures data 
     submitted by each subsection (d) hospital under section 
     1886(b)(3)(B)(viii) with data submitted in the prior year or 
     years by the same hospital in order to identify and report 
     actions that would lead to false or artificial improvements 
     in the hospital's quality measurements, including--
       ``(i) adverse selection against patients with severe 
     illness or other factors that predispose patients to poor 
     health outcomes; and
       ``(ii) provision of health care that does not meet 
     established recommendations or accepted standards for care.
       ``(2) Data safeguards.--
       ``(A) Unauthorized use and disclosure.--The Secretary shall 
     develop and implement effective safeguards to protect against 
     the unauthorized use or disclosure of hospital data that is 
     reported under this section.
       ``(B) Inaccurate information.--The Secretary shall develop 
     and implement effective safeguards to protect against the 
     dissemination of inconsistent, incomplete, invalid, 
     inaccurate, or subjective hospital data.
       ``(C) Identifiable data.--The Secretary shall ensure that 
     identifiable patient data shall not be released to the 
     public.
       ``(d) Grants and Technical Assistance.--The Secretary may 
     award grants to national or State organizations, 
     partnerships, or other entities that may assist with hospital 
     quality improvement.
       ``(e) Hospital Quality Advisory Committee.--
       ``(1) Establishment.--The Administrator, in consultation 
     with the Director of the Agency for Healthcare Research and 
     Quality, shall establish the Hospital Quality Advisory 
     Committee (in this subsection referred to as the `Advisory 
     Committee') to provide advice to the Administrator on the 
     submission, collection, and reporting of quality measures 
     data. The Administrator shall serve as the chairperson of the 
     Advisory Committee.
       ``(2) Membership.--The Advisory Committee shall include 
     representatives of the following (except with respect to 
     subparagraphs (A) through (D), to be appointed by the 
     Administrator):
       ``(A) The Agency for Healthcare Research and Quality.
       ``(B) The Health Resources and Services Administration.
       ``(C) The Department of Veterans Affairs.
       ``(D) The Centers for Disease Control and Prevention.
       ``(E) National membership organizations that focus on 
     health care quality improvement.
       ``(F) Public and private hospitals.
       ``(G) Physicians, nurses, and other health professionals.
       ``(H) Patients and patient advocates.
       ``(I) Health insurance purchasers and other payers.
       ``(J) Health researchers, policymakers, and other experts 
     in the field of health care quality.
       ``(K) Health care accreditation entities.
       ``(L) Other agencies and groups as determined appropriate 
     by the Administrator.
       ``(3) Duties.--The Advisory Committee shall review and 
     provide guidance and recommendations to the Administrator 
     on--
       ``(A) the establishment of the Initiative;
       ``(B) integration and coordination of Federal quality 
     measures data submission requirements, to avoid needless 
     duplication and inefficiency;
       ``(C) legal and regulatory barriers that may hinder quality 
     measures data collection and reporting; and
       ``(D) necessary technical and financial assistance to 
     encourage quality measures data collection and reporting;
       ``(4) Staff and resources.--The Administrator shall provide 
     the Advisory Committee with appropriate staff and resources 
     for the functioning of the Advisory Committee.
       ``(5) Duration.--The Advisory Committee shall terminate at 
     the discretion of the Administrator, but in no event later 
     than 5 years after the date of enactment of this section.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of fiscal years 2007 
     through 2016.''.
       (b) Conforming Amendment.--Section 1886(b)(3)(B)(viii) of 
     the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(viii)), as 
     added by section 5001 of the Deficit Reduction Act of 2005, 
     is amended to read as follows:
       ``(VII) The Secretary shall use the data submitted under 
     this clause for the Hospital Quality Report Card Initiative 
     under section 1898.''.

     SEC. 4. EVALUATION OF THE HOSPITAL QUALITY REPORT CARD 
                   INITIATIVE.

       (a) In General.--The Director of the Agency for Healthcare 
     Research and Quality, directly or through contract, shall 
     evaluate and periodically report to Congress on the 
     effectiveness of the Hospital Quality Report Card Initiative 
     established under section 1898 of the Social Security Act, as 
     added by section 3, including the effectiveness of the 
     Initiative in meeting the purpose described in section 2. The 
     Director shall make such reports available to the public.
       (b) Research.--The Director of the Agency for Healthcare 
     Research and Quality, in consultation with the Administrator 
     of the Centers for Medicare & Medicaid Services, shall use 
     the outcomes from the evaluation conducted pursuant to 
     subsection (a) to increase the usefulness of the Hospital 
     Quality Report Card Initiative, particularly for patients, as 
     necessary.
                                 ______
                                 
  SA 3869. Mr. OBAMA submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Health Care for Hybrids 
     Act''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The United States imports over half the oil it 
     consumes.
       (2) According to present trends, the United States reliance 
     on foreign oil will increase to 68 percent of its total 
     consumption by 2025.
       (3) With only 3 percent of the world's known oil reserves, 
     the health of the United States economy is dependent on world 
     oil prices.
       (4) World oil prices are overwhelmingly dictated by 
     countries other than the United States, thus endangering our 
     economic and national security.
       (5) Legacy health care costs associated with retiree 
     workers are an increasing burden on the global 
     competitiveness of American industries.
       (6) American automakers have lagged behind their foreign 
     competitors in producing

[[Page S4233]]

     hybrid and other energy efficient automobiles.
       (7) Innovative uses of new technology in automobiles in the 
     United States will help retain American jobs, support health 
     care obligations for retiring workers in the automotive 
     sector, decrease America's dependence on foreign oil, and 
     address pressing environmental concerns.

                            TITLE I--PROGRAM

     SEC. 101. COORDINATING TASK FORCE.

       Not later than 6 months after the date of enactment of this 
     Act, the Secretary of Energy, the Secretary of Health and 
     Human Services, the Secretary of Transportation, and the 
     Secretary of the Treasury shall establish, and appoint an 
     equal number of representatives to, a task force (referred to 
     in this Act as the ``task force'') to administer the program 
     established under this Act.

     SEC. 102. ESTABLISHMENT OF PROGRAM.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the task force established under 
     section 101 shall establish a program to provide financial 
     assistance to eligible domestic automobile manufacturers for 
     the costs incurred in providing health benefits to their 
     retired employees.
       (b) Consultation.--In establishing the program under 
     subsection (a), the task force shall consult with 
     representatives from the domestic automobile manufacturers, 
     unions representing employees of such manufacturers, and 
     consumer and environmental groups.
       (c) Eligible Domestic Automobile Manufacturer.--To be 
     eligible to receive financial assistance under the program 
     established under subsection (a), a domestic automobile 
     manufacturer shall--
       (1) submit an application to the task force at such time, 
     in such manner, and containing such information as the task 
     force shall require;
       (2) certify that such manufacturer is providing full health 
     care coverage to all of its domestic employees;
       (3) provide an assurance that the manufacturer will invest 
     an amount equal to not less than 50 percent of the amount of 
     health savings derived by the manufacturer as a result of its 
     retiree health care costs being covered under the program 
     under this section, in--
       (A) the domestic manufacture and commercialization of 
     petroleum fuel reduction technologies, including alternative 
     or flexible fuel vehicles, hybrids, and other state-of-the-
     art fuel saving technologies;
       (B) the retraining of workers and retooling of assembly 
     lines for such domestic manufacture and commercialization;
       (C) research and development, design, commercialization, 
     and other costs related to the diversifying of domestic 
     production of automobiles through the offering of high 
     performance fuel efficient vehicles; and
       (D) assisting domestic automobile component suppliers to 
     retool their domestic manufacturing plants to produce 
     components for petroleum fuel reduction technologies, 
     including alternative or flexible fuel vehicles, hybrid, 
     advanced diesel, or other state-of-the-art fuel saving 
     technologies; and
       (4) provide additional assurances and information as the 
     task force may require, including information needed by the 
     task force to audit the manufacturer's compliance with the 
     requirements of the program.
       (d) Limitation.--The total amount of financial assistance 
     that may be provided each year under the program under this 
     section with respect to any single domestic automobile 
     manufacturer shall not exceed an amount equal to 10 percent 
     of the retiree health care costs of that manufacturer for 
     that year.

     SEC. 103. REPORTING.

       Not later than 6 months after the date of enactment of this 
     Act, and every 6 months thereafter, the task force shall 
     submit to Congress a report on any financial assistance 
     provided under this program under this Act and the resulting 
     changes in the manufacture and commercialization of fuel 
     saving technologies implemented by auto manufacturers as a 
     result of such financial assistance. Not later than 1 year 
     after the date of enactment of this Act, the task force shall 
     submit a report to Congress on the effectiveness of current 
     consumer incentives available for the purchase of hybrid 
     vehicles in encouraging the purchase of such vehicles and 
     whether these incentives should be expanded.

     SEC. 104. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated, such sums as may 
     be necessary in each fiscal year to carry out this Act.

     SEC. 105. LIMITATION ON BACKSLIDING.

       To be eligible to receive financial assistance under this 
     title, a manufacturer shall provide assurances to the task 
     force that fuel savings achieved with respect its average 
     adjusted fuel economy will not result in decreases with 
     respect to fuel economy elsewhere in the domestic fleet. The 
     task force shall determine compliance with such assurances 
     using accepted measurements of fuel savings.

     SEC. 106. TERMINATION OF PROGRAM.

       The program established under this title shall terminate on 
     December 31, 2015.

                           TITLE II--OFFSETS

     SEC. 201. CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.

       (a) In General.--Section 7701 of the Internal Revenue Code 
     of 1986 is amended by redesignating subsection (o) as 
     subsection (p) and by inserting after subsection (n) the 
     following new subsection:
       ``(o) Clarification of Economic Substance Doctrine; Etc.--
       ``(1) General rules.--
       ``(A) In general.--In any case in which a court determines 
     that the economic substance doctrine is relevant for purposes 
     of this title to a transaction (or series of transactions), 
     such transaction (or series of transactions) shall have 
     economic substance only if the requirements of this paragraph 
     are met.
       ``(B) Definition of economic substance.--For purposes of 
     subparagraph (A)--
       ``(i) In general.--A transaction has economic substance 
     only if--

       ``(I) the transaction changes in a meaningful way (apart 
     from Federal tax effects) the taxpayer's economic position, 
     and
       ``(II) the taxpayer has a substantial nontax purpose for 
     entering into such transaction and the transaction is a 
     reasonable means of accomplishing such purpose.

     In applying subclause (II), a purpose of achieving a 
     financial accounting benefit shall not be taken into account 
     in determining whether a transaction has a substantial nontax 
     purpose if the origin of such financial accounting benefit is 
     a reduction of income tax
       ``(ii) Special rule where taxpayer relies on profit 
     potential.--A transaction shall not be treated as having 
     economic substance by reason of having a potential for profit 
     unless--

       ``(I) the present value of the reasonably expected pre-tax 
     profit from the transaction is substantial in relation to the 
     present value of the expected net tax benefits that would be 
     allowed if the transaction were respected, and
       ``(II) the reasonably expected pre-tax profit from the 
     transaction exceeds a risk-free rate of return.

       ``(C) Treatment of fees and foreign taxes.--Fees and other 
     transaction expenses and foreign taxes shall be taken into 
     account as expenses in determining pre-tax profit under 
     subparagraph (B)(ii).
       ``(2) Special rules for transaction with tax-indifferent 
     parties.--
       ``(A) Special rules for financing transactions.--The form 
     of a transaction which is in substance the borrowing of money 
     or the acquisition of financial capital directly or 
     indirectly from a tax-indifferent party shall not be 
     respected if the present value of the deductions to be 
     claimed with respect to the transaction is substantially in 
     excess of the present value of the anticipated economic 
     returns of the person lending the money or providing the 
     financial capital. A public offering shall be treated as a 
     borrowing, or an acquisition of financial capital, from a 
     tax-indifferent party if it is reasonably expected that at 
     least 50 percent of the offering will be placed with tax-
     indifferent parties.
       ``(B) Artificial income shifting and basis adjustments.--
     The form of a transaction with a tax-indifferent party shall 
     not be respected if--
       ``(i) it results in an allocation of income or gain to the 
     tax-indifferent party in excess of such party's economic 
     income or gain, or
       ``(ii) it results in a basis adjustment or shifting of 
     basis on account of overstating the income or gain of the 
     tax-indifferent party.
       ``(3) Definitions and special rules.--For purposes of this 
     subsection--
       ``(A) Economic substance doctrine.--The term `economic 
     substance doctrine' means the common law doctrine under which 
     tax benefits under title I with respect to a transaction are 
     not allowable if the transaction does not have economic 
     substance or lacks a business purpose.
       ``(B) Tax-indifferent party.--The term `tax-indifferent 
     party' means any person or entity not subject to tax imposed 
     by title I. A person shall be treated as a tax-indifferent 
     party with respect to a transaction if the items taken into 
     account with respect to the transaction have no substantial 
     impact on such person's liability under title I.
       ``(C) Exception for personal transactions of individuals.--
     In the case of an individual, this subsection shall apply 
     only to transactions entered into in connection with a trade 
     or business or an activity engaged in for the production of 
     income.
       ``(D) Treatment of lessors.--In applying paragraph 
     (1)(B)(ii) to the lessor of tangible property subject to a 
     lease--
       ``(i) the expected net tax benefits with respect to the 
     leased property shall not include the benefits of--

       ``(I) depreciation,
       ``(II) any tax credit, or
       ``(III) any other deduction as provided in guidance by the 
     Secretary, and

       ``(ii) subclause (II) of paragraph (1)(B)(ii) shall be 
     disregarded in determining whether any of such benefits are 
     allowable.
       ``(4) Other common law doctrines not affected.--Except as 
     specifically provided in this subsection, the provisions of 
     this subsection shall not be construed as altering or 
     supplanting any other rule of law, and the requirements of 
     this subsection shall be construed as being in addition to 
     any such other rule of law.
       ``(5) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this subsection. Such regulations may include 
     exemptions from the application of this subsection.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after the date of 
     the enactment of this Act.

[[Page S4234]]

     SEC. 202. PENALTY FOR UNDERSTATEMENTS ATTRIBUTABLE TO 
                   TRANSACTIONS LACKING ECONOMIC SUBSTANCE, ETC.

       (a) In General.--Subchapter A of chapter 68 of the Internal 
     Revenue Code of 1986 is amended by inserting after section 
     6662A the following new section:

     ``SEC. 6662A. PENALTY FOR UNDERSTATEMENTS ATTRIBUTABLE TO 
                   TRANSACTIONS LACKING ECONOMIC SUBSTANCE, ETC.

       ``(a) Imposition of Penalty.--If a taxpayer has an 
     noneconomic substance transaction understatement for any 
     taxable year, there shall be added to the tax an amount equal 
     to 40 percent of the amount of such understatement.
       ``(b) Reduction of Penalty for Disclosed Transactions.--
     Subsection (a) shall be applied by substituting `20 percent' 
     for `40 percent' with respect to the portion of any 
     noneconomic substance transaction understatement with respect 
     to which the relevant facts affecting the tax treatment of 
     the item are adequately disclosed in the return or a 
     statement attached to the return.
       ``(c) Noneconomic Substance Transaction Understatement.--
     For purposes of this section--
       ``(1) In general.--The term `noneconomic substance 
     transaction understatement' means any amount which would be 
     an understatement under section 6662A(b)(1) if section 6662A 
     were applied by taking into account items attributable to 
     noneconomic substance transactions rather than items to which 
     section 6662A would apply without regard to this paragraph.
       ``(2) Noneconomic substance transaction.--The term 
     `noneconomic substance transaction' means any transaction 
     if--
       ``(A) there is a lack of economic substance (within the 
     meaning of section 7701(o)(1)) for the transaction giving 
     rise to the claimed benefit or the transaction was not 
     respected under section 7701(o)(2), or
       ``(B) the transaction fails to meet the requirements of any 
     similar rule of law.
       ``(d) Rules Applicable to Compromise of Penalty.--
       ``(1) In general.--If the 1st letter of proposed deficiency 
     which allows the taxpayer an opportunity for administrative 
     review in the Internal Revenue Service Office of Appeals has 
     been sent with respect to a penalty to which this section 
     applies, only the Commissioner of Internal Revenue may 
     compromise all or any portion of such penalty.
       ``(2) Applicable rules.--The rules of paragraphs (2) and 
     (3) of section 6707A(d) shall apply for purposes of paragraph 
     (1).
       ``(e) Coordination With Other Penalties.--Except as 
     otherwise provided in this part, the penalty imposed by this 
     section shall be in addition to any other penalty imposed by 
     this title.
       ``(f) Cross References.--
       ``(1) For coordination of penalty with understatements 
     under section 6662 and other special rules, see section 
     6662A(e).
       ``(2) For reporting of penalty imposed under this section 
     to the Securities and Exchange Commission, see section 
     6707A(e).''.
       (b) Coordination With Other Understatements and 
     Penalties.--
       (1) The second sentence of section 6662(d)(2)(A) of the 
     Internal Revenue Code of 1986 is amended by inserting ``and 
     without regard to items with respect to which a penalty is 
     imposed by section 6662B'' before the period at the end.
       (2) Subsection (e) of section 6662A of the Internal Revenue 
     Code of 1986 is amended--
       (A) in paragraph (1), by inserting ``and noneconomic 
     substance transaction understatements'' after ``reportable 
     transaction understatements'' both places it appears,
       (B) in paragraph (2)(A), by inserting ``and a noneconomic 
     substance transaction understatement'' after ``reportable 
     transaction understatement'',
       (C) in paragraph (2)(B), by inserting ``6662B or'' before 
     ``6663'',
       (D) in paragraph (2)(C)(i), by inserting ``or section 
     6662B'' before the period at the end,
       (E) in paragraph (2)(C)(ii), by inserting ``and section 
     6662B'' after ``This section'',
       (F) in paragraph (3), by inserting ``or noneconomic 
     substance transaction understatement'' after ``reportable 
     transaction understatement'', and
       (G) by adding at the end the following new paragraph:
       ``(3) Noneconomic substance transaction understatement.--
     For purposes of this subsection, the term `noneconomic 
     substance transaction understatement' has the meaning given 
     such term by section 6662B(c).''.
       (3) Subsection (e) of section 6707A of the Internal Revenue 
     Code of 1986 is amended--
       (A) by striking ``or'' at the end of subparagraph (B), and
       (B) by striking subparagraph (C) and inserting the 
     following new subparagraphs:
       ``(C) is required to pay a penalty under section 6662B with 
     respect to any noneconomic substance transaction, or
       ``(D) is required to pay a penalty under section 6662(h) 
     with respect to any transaction and would (but for section 
     6662A(e)(2)(C)) have been subject to penalty under section 
     6662A at a rate prescribed under section 6662A(c) or under 
     section 6662B,''.
       (c) Clerical Amendment.--The table of sections for part II 
     of subchapter A of chapter 68 of the Internal Revenue Code of 
     1986 is amended by inserting after the item relating to 
     section 6662A the following new item:

``Sec. 6662B. Penalty for understatements attributable to transactions 
              lacking economic substance, etc.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after the date of 
     the enactment of this Act.

     SEC. 203. DENIAL OF DEDUCTION FOR INTEREST ON UNDERPAYMENTS 
                   ATTRIBUTABLE TO NONECONOMIC SUBSTANCE 
                   TRANSACTIONS.

       (a) In General.--Section 163(m) of the Internal Revenue 
     Code of 1986 (relating to interest on unpaid taxes 
     attributable to nondisclosed reportable transactions) is 
     amended--
       (1) by striking ``attributable'' and all that follows and 
     inserting the following: ``attributable to--
       ``(1) the portion of any reportable transaction 
     understatement (as defined in section 6662A(b)) with respect 
     to which the requirement of section 6664(d)(2)(A) is not met, 
     or
       ``(2) any noneconomic substance transaction understatement 
     (as defined in section 6662B(c)).''; and
       (2) by inserting ``and noneconomic substance transactions'' 
     after ``transactions''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions after the date of the enactment 
     of this Act in taxable years ending after such date.
                                 ______
                                 
  SA 3870. Mr. OBAMA submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       Strike out all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Healthy Places Act of 
     2006''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Built environment.--The term ``built environment'' 
     means an environment consisting of all buildings, spaces, and 
     products that are created or modified by people, including--
       (A) homes, schools, workplaces, parks and recreation areas, 
     greenways, business areas, and transportation systems;
       (B) electric transmission lines;
       (C) waste disposal sites; and
       (D) land-use planning and policies that impact urban, 
     rural, and suburban communities.
       (3) Director.--The term ``Director'' means the Director of 
     the Centers for Disease Control and Prevention.
       (4) Environmental health.--The term ``environmental 
     health'' means the health and well-being of a population as 
     affected by--
       (A) the direct pathological effects of chemicals, 
     radiation, and some biological agents; and
       (B) the effects (often indirect) of the broad physical, 
     psychological, social, and aesthetic environment.
       (5) Health impact assessment.--The term ``health impact 
     assessment'' means any combination of procedures, methods, 
     tools, and means used under section 4 to analyze the actual 
     or potential effects of a policy, program, or project on the 
     health of a population (including the distribution of those 
     effects within the population).
       (6) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.

     SEC. 3. INTERAGENCY WORKING GROUP ON ENVIRONMENTAL HEALTH.

       (a) Definitions.--In this section:
       (1) Institute.--The term ``Institute'' means the Institute 
     of Medicine of the National Academies of Science.
       (2) IWG.--The term ``IWG'' means the interagency working 
     group established under subsection (b).
       (b) Establishment.--The Secretary, in coordination with the 
     Administrator, shall establish an interagency working group 
     to discuss environmental health concerns, particularly 
     concerns disproportionately affecting disadvantaged 
     populations.
       (c) Membership.--The IWG shall be composed of a 
     representative from each Federal agency (as appointed by the 
     head of the agency) that has jurisdiction over, or is 
     affected by, environmental policies and projects, including--
       (1) the Council on Environmental Quality;
       (2) the Department of Agriculture;
       (3) the Department of Commerce;
       (4) the Department of Defense;
       (5) the Department of Education;
       (6) the Department of Energy;
       (7) the Department of Health and Human Services;
       (8) the Department of Housing and Urban Development;
       (9) the Department of the Interior;
       (10) the Department of Justice;
       (11) the Department of Labor;
       (12) the Department of State;
       (13) the Department of Transportation;
       (14) the Environmental Protection Agency; and
       (15) such other Federal agencies as the Administrator and 
     the Secretary jointly determine to be appropriate.

[[Page S4235]]

       (d) Duties.--The IWG shall--
       (1) facilitate communication and partnership on 
     environmental health-related projects and policies--
       (A) to generate a better understanding of the interactions 
     between policy areas; and
       (B) to raise awareness of the relevance of health across 
     policy areas to ensure that the potential positive and 
     negative health consequences of decisions are not overlooked;
       (2) serve as a centralized mechanism to coordinate a 
     national effort--
       (A) to discuss and evaluate evidence and knowledge on the 
     relationship between the general environment and the health 
     of the population of the United States;
       (B) to determine the range of effective, feasible, and 
     comprehensive actions to improve environmental health; and
       (C) to examine and better address the influence of social 
     and environmental determinants of health;
       (3) survey Federal agencies to determine which policies are 
     effective in encouraging, and how best to facilitate outreach 
     without duplicating, efforts relating to environmental health 
     promotion;
       (4) establish specific goals within and across Federal 
     agencies for environmental health promotion, including 
     determinations of accountability for reaching those goals;
       (5) develop a strategy for allocating responsibilities and 
     ensuring participation in environmental health promotions, 
     particularly in the case of competing agency priorities;
       (6) coordinate plans to communicate research results 
     relating to environmental health to enable reporting and 
     outreach activities to produce more useful and timely 
     information;
       (7) establish an interdisciplinary committee to continue 
     research efforts to further understand the relationship 
     between the built environment and health factors (including 
     air quality, physical activity levels, housing quality, 
     access to primary health care practitioners and health care 
     facilities, injury risk, and availability of nutritional, 
     fresh food) that coordinates the expertise of the public 
     health, urban planning, and transportation communities;
       (8) develop an appropriate research agenda for Federal 
     agencies--
       (A) to support--
       (i) longitudinal studies;
       (ii) rapid-response capability to evaluate natural 
     conditions and occurrences; and
       (iii) extensions of national databases; and
       (B) to review evaluation and economic data relating to the 
     impact of Federal interventions on the prevention of 
     environmental health concerns;
       (9) initiate environmental health impact demonstration 
     projects to develop integrated place-based models for 
     addressing community quality-of-life issues;
       (10) provide a description of evidence-based best 
     practices, model programs, effective guidelines, and other 
     strategies for promoting environmental health;
       (11) make recommendations to improve Federal efforts 
     relating to environmental health promotion and to ensure 
     Federal efforts are consistent with available standards and 
     evidence and other programs in existence as of the date of 
     enactment of this Act;
       (12) monitor Federal progress in meeting specific 
     environmental health promotion goals;
       (13) assist in ensuring, to the maximum extent practicable, 
     integration of the impact of environmental policies, 
     programs, and activities on the areas under Federal 
     jurisdiction;
       (14) assist in the implementation of the recommendations 
     from the reports of the Institute of Medicine entitled ``Does 
     the Built Environment Influence Physical Activity? Examining 
     the Evidence'' and dated January 11, 2005, and ``Rebuilding 
     the Unity of Health and the Environment: A New Vision of 
     Environmental Health for the 21st Century'' and dated January 
     22, 2001, including recommendations for--
       (A) the expansion of national public health and travel 
     surveys to provide more detailed information about the 
     connection between the built environment and health, 
     including expansion of such surveys as--
       (i) the Behavioral Risk Factor Surveillance System, the 
     National Health and Nutrition Examination Survey, and the 
     National Health Interview Survey conducted by the Centers for 
     Disease Control and Prevention;
       (ii) the American Community survey conducted by the Census 
     Bureau;
       (iii) the American Time Use Survey conducted by the Bureau 
     of Labor Statistics;
       (iv) the Youth Risk Behavior Survey conducted by the 
     Centers for Disease Control and Prevention; and
       (v) the National Longitudinal Cohort Survey of American 
     Children (the National Children's Study) conducted by the 
     National Institute of Child Health and Human Development;
       (B) collaboration with national initiatives to learn from 
     natural experiments such as observations from changes in the 
     built environment and the consequent effects on health;
       (C) development of a program of research with a defined 
     mission and recommended budget, concentrating on multiyear 
     projects and enhanced data collection;
       (D) development of interdisciplinary education programs--
       (i) to train professionals in conducting recommended 
     research; and
       (ii) to prepare practitioners with appropriate skills at 
     the intersection of physical activity, public health, 
     transportation, and urban planning;
       (15) not later than 2 years after the date of enactment of 
     this Act, submit to Congress a report that describes the 
     extent to which recommendations from the Institute of 
     Medicine reports described in paragraph (14) were executed; 
     and
       (16) assist the Director with the development of guidance 
     for the assessment of the potential health effects of land 
     use, housing, and transportation policy and plans.
       (e) Meetings.--
       (1) In general.--The IWG shall meet at least 3 times each 
     year.
       (2) Annual conference.--The Secretary, acting through the 
     Director and in collaboration with the Administrator, shall 
     sponsor an annual conference on environmental health and 
     health disparities to enhance coordination, build 
     partnerships, and share best practices in environmental 
     health data collection, analysis, and reporting.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

     SEC. 4. HEALTH IMPACT ASSESSMENTS.

       (a) Definition of Eligible Entity.--In this section, the 
     term ``eligible entity'' means any unit of State or local 
     government the jurisdiction of which includes individuals or 
     populations the health of which are or will be affected by an 
     activity or a proposed activity.
       (b) Establishment.--The Secretary, acting through the 
     Director and in collaboration with the Administrator, shall--
       (1) establish a program at the National Center of 
     Environmental Health at the Centers for Disease Control and 
     Prevention focused on advancing the field of health impact 
     assessment, including--
       (A) collecting and disseminating best practices;
       (B) administering capacity building grants, in accordance 
     with subsection (d);
       (C) providing technical assistance;
       (D) providing training;
       (E) conducting evaluations; and
       (F) awarding competitive extramural research grants;
       (2) in accordance with subsection (f), develop guidance to 
     conduct health impact assessments; and
       (3) establish a grant program to allow eligible entities to 
     conduct health impact assessments.
       (c) Guidance.--The Director, in collaboration with the IWG, 
     shall--
       (1) develop guidance for the assessment of the potential 
     health effects of land use, housing, and transportation 
     policy and plans, including--
       (A) background on international efforts to bridge urban 
     planning and public health institutions and disciplines, 
     including a review of health impact assessment best practices 
     internationally;
       (B) evidence-based causal pathways that link urban 
     planning, transportation, and housing policy and objectives 
     to human health objectives;
       (C) data resources and quantitative and qualitative 
     forecasting methods to evaluate both the status of health 
     determinants and health effects; and
       (D) best practices for inclusive public involvement in 
     planning decision-making;
       (2) not later than 1 year after the date of enactment of 
     this Act, promulgate the guidance; and
       (3) present the guidance to the public at the annual 
     conference described in section 3(e)(2).
       (d) Grant Program.--The Secretary, acting through the 
     Director and in collaboration with the Administrator, shall 
     establish a program under which the Secretary shall provide 
     funding and technical assistance to eligible entities to 
     prepare health impact assessments--
       (1) to ensure that appropriate health factors are taken 
     into consideration as early as practicable during any 
     planning, review, or decision-making process; and
       (2) to evaluate the effect on the health of individuals and 
     populations, and on social and economic development, of 
     decisions made outside of the health sector that result in 
     modifications of a physical or social environment.
       (e) Applications.--
       (1) In general.--To receive a grant under this section, an 
     eligible entity shall submit to the Secretary an application 
     in accordance with this subsection, in such time, in such 
     manner, and containing such additional information as the 
     Secretary may require.
       (2) Inclusion.--
       (A) In general.--An application under this subsection shall 
     include an assessment by the eligible entity of the 
     probability that an applicable activity or proposed activity 
     will have at least 1 significant, adverse health effect on an 
     individual or population in the jurisdiction of the eligible 
     entity, based on the criteria described in subparagraph (B).
       (B) Criteria.--The criteria referred to in subparagraph (A) 
     include, with respect to the applicable activity or proposed 
     activity--
       (i) any substantial adverse effect on--

       (I) existing air quality, ground or surface water quality 
     or quantity, or traffic or noise levels;
       (II) a significant habitat area;
       (III) physical activity;
       (IV) injury;
       (V) mental health;
       (VI) social capital;
       (VII) accessibility;

[[Page S4236]]

       (VIII) the character or quality of an important historical, 
     archeological, architectural, or aesthetic resource 
     (including neighborhood character) of the community of the 
     eligible entity; or
       (IX) any other natural resource;

       (ii) any increase in--

       (I) solid waste production; or
       (II) problems relating to erosion, flooding, leaching, or 
     drainage;

       (iii) any requirement that a large quantity of vegetation 
     or fauna be removed or destroyed;
       (iv) any conflict with the plans or goals of the community 
     of the eligible entity;
       (v) any major change in the quantity or type of energy used 
     by the community of the eligible entity;
       (vi) any hazard presented to human health;
       (vii) any substantial change in the use, or intensity of 
     use, of land in the jurisdiction of the eligible entity, 
     including agricultural, open space, and recreational uses;
       (viii) the probability that the activity or proposed 
     activity will result in an increase in tourism in the 
     jurisdiction of the eligible entity;
       (ix) any substantial, adverse aggregate impact on 
     environmental health resulting from--

       (I) changes caused by the activity or proposed activity to 
     2 or more elements of the environment; or
       (II) 2 or more related actions carried out under the 
     activity or proposed activity; and

       (x) any other significant change of concern, as determined 
     by the eligible entity.
       (C) Factors for consideration.--In making an assessment 
     under subparagraph (A), an eligible entity may take into 
     consideration any reasonable, direct, indirect, or cumulative 
     effect relating to the applicable activity or proposed 
     activity, including the effect of any action that is--
       (i) included in the long-range plan relating to the 
     activity or proposed activity;
       (ii) likely to be carried out in coordination with the 
     activity or proposed activity;
       (iii) dependent on the occurrence of the activity or 
     proposed activity; or
       (iv) likely to have a disproportionate impact on 
     disadvantaged populations.
       (f) Use of Funds.--
       (1) In general.--An eligible entity shall use assistance 
     received under this section to prepare and submit to the 
     Secretary a health impact assessment in accordance with this 
     subsection.
       (2) Purposes.--The purposes of a health impact assessment 
     are--
       (A) to facilitate the involvement of State and local health 
     officials in community planning and land use decisions to 
     identify any potential health concern relating to an activity 
     or proposed activity;
       (B) to provide for an investigation of any health-related 
     issue addressed in an environmental impact statement or 
     policy appraisal relating to an activity or a proposed 
     activity;
       (C) to describe and compare alternatives (including no-
     action alternatives) to an activity or a proposed activity to 
     provide clarification with respect to the costs and benefits 
     of the activity or proposed activity; and
       (D) to contribute to the findings of an environmental 
     impact statement with respect to the terms and conditions of 
     implementing an activity or a proposed activity, as 
     necessary.
       (3) Requirements.--A health impact assessment prepared 
     under this subsection shall--
       (A) describe the relevance of the applicable activity or 
     proposed activity (including the policy of the activity) with 
     respect to health issues;
       (B) assess each health impact of the applicable activity or 
     proposed activity;
       (C) provide recommendations of the eligible entity with 
     respect to--
       (i) the mitigation of any adverse impact on health of the 
     applicable activity or proposed activity; or
       (ii) the encouragement of any positive impact of the 
     applicable activity or proposed activity;
       (D) provide for monitoring of the impacts on health of the 
     applicable activity or proposed activity, as the eligible 
     entity determines to be appropriate; and
       (E) include a list of each comment received with respect to 
     the health impact assessment under subsection (e).
       (4) Methodology.--In preparing a health impact assessment 
     under this subsection, an eligible entity--
       (A) shall follow guidelines developed by the Director, in 
     collaboration with the IWG, that--
       (i) are consistent with subsection (c);
       (ii) will be established not later than 1 year after the 
     date of enactment of this Act; and
       (iii) will be made publicly available at the annual 
     conference described in section 3(e)(2); and
       (B) may establish a balance, as the eligible entity 
     determines to be appropriate, between the use of--
       (i) rigorous methods requiring special skills or increased 
     use of resources; and
       (ii) expedient, cost-effective measures.
       (g) Public Participation.--
       (1) In general.--Before preparing and submitting to the 
     Secretary a final health impact assessment, an eligible 
     entity shall request and take into consideration public and 
     agency comments, in accordance with this subsection.
       (2) Requirement.--Not later than 30 days after the date on 
     which a draft health impact assessment is completed, an 
     eligible entity shall submit the draft health impact 
     assessment to each Federal agency, and each State and local 
     organization, that--
       (A) has jurisdiction with respect to the activity or 
     proposed activity to which the health impact assessment 
     applies;
       (B) has special knowledge with respect to an environmental 
     or health impact of the activity or proposed activity; or
       (C) is authorized to develop or enforce any environmental 
     standard relating to the activity or proposed activity.
       (3) Comments requested.--
       (A) Request by eligible entity.--An eligible entity may 
     request comments with respect to a health impact assessment 
     from--
       (i) affected Indian tribes;
       (ii) interested or affected individuals or organizations; 
     and
       (iii) any other State or local agency, as the eligible 
     entity determines to be appropriate.
       (B) Request by others.--Any interested or affected agency, 
     organization, or individual may--
       (i) request an opportunity to comment on a health impact 
     assessment; and
       (ii) submit to the appropriate eligible entity comments 
     with respect to the health impact assessment by not later 
     than--

       (I) for a Federal, State, or local government agency or 
     organization, the date on which a final health impact 
     assessment is prepared; and
       (II) for any other individual or organization, the date 
     described in subclause (I) or another date, as the eligible 
     entity may determine.

       (4) Response to comments.--A final health impact assessment 
     shall describe the response of the eligible entity to 
     comments received within a 90-day period under this 
     subsection, including--
       (A) a description of any means by which the eligible 
     entity, as a result of such a comment--
       (i) modified an alternative recommended with respect to the 
     applicable activity or proposed activity;
       (ii) developed and evaluated any alternative not previously 
     considered by the eligible entity;
       (iii) supplemented, improved, or modified an analysis of 
     the eligible entity; or
       (iv) made any factual correction to the health impact 
     assessment; and
       (B) for any comment with respect to which the eligible 
     entity took no action, an explanation of the reasons why no 
     action was taken and, if appropriate, a description of the 
     circumstances under which the eligible entity would take such 
     an action.
       (h) Health Impact Assessment Database.--The Secretary, 
     acting through the Director and in collaboration with the 
     Administrator, shall establish and maintain a health impact 
     assessment database, including--
       (1) a catalog of health impact assessments received under 
     this section;
       (2) an inventory of tools used by eligible entities to 
     prepare draft and final health impact assessments; and
       (3) guidance for eligible entities with respect to the 
     selection of appropriate tools described in paragraph (2).
       (i) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section such sums as are 
     necessary.

     SEC. 5. GRANT PROGRAM.

       (a) Definitions.--In this section:
       (1) Director.--The term ``Director'' means the Director of 
     the Centers for Disease Control and Prevention, acting in 
     collaboration with the Administrator and the Director of the 
     National Institute of Environmental Health Sciences.
       (2) Eligible entity.--The term ``eligible entity'' means a 
     State or local community that--
       (A) bears a disproportionate burden of exposure to 
     environmental health hazards;
       (B) has established a coalition--
       (i) with not less than 1 community-based organization; and
       (ii) with not less than 1--

       (I) public health entity;
       (II) health care provider organization; or
       (III) academic institution;

       (C) ensures planned activities and funding streams are 
     coordinated to improve community health; and
       (D) submits an application in accordance with subsection 
     (c).
       (b) Establishment.--The Director shall establish a grant 
     program under which eligible entities shall receive grants to 
     conduct environmental health improvement activities.
       (c) Application.--To receive a grant under this section, an 
     eligible entity shall submit an application to the Director 
     at such time, in such manner, and accompanied by such 
     information as the Director may require.
       (d) Cooperative Agreements.--An eligible entity may use a 
     grant under this section--
       (1) to promote environmental health; and
       (2) to address environmental health disparities.
       (e) Amount of Cooperative Agreement.--
       (1) In general.--The Director shall award grants to 
     eligible entities at the 2 different funding levels described 
     in this subsection.
       (2) Level 1 cooperative agreements.--
       (A) In general.--An eligible entity awarded a grant under 
     this paragraph shall use the funds to identify environmental 
     health problems and solutions by--
       (i) establishing a planning and prioritizing council in 
     accordance with subparagraph (B); and
       (ii) conducting an environmental health assessment in 
     accordance with subparagraph (C).

[[Page S4237]]

       (B) Planning and prioritizing council.--
       (i) In general.--A prioritizing and planning council 
     established under subparagraph (A)(i) (referred to in this 
     paragraph as a ``PPC'') shall assist the environmental health 
     assessment process and environmental health promotion 
     activities of the eligible entity.
       (ii) Membership.--Membership of a PPC shall consist of 
     representatives from various organizations within public 
     health, planning, development, and environmental services and 
     shall include stakeholders from vulnerable groups such as 
     children, the elderly, disabled, and minority ethnic groups 
     that are often not actively involved in democratic or 
     decision-making processes.
       (iii) Duties.--A PPC shall--

       (I) identify key stakeholders and engage and coordinate 
     potential partners in the planning process;
       (II) establish a formal advisory group to plan for the 
     establishment of services;
       (III) conduct an in-depth review of the nature and extent 
     of the need for an environmental health assessment, including 
     a local epidemiological profile, an evaluation of the service 
     provider capacity of the community, and a profile of any 
     target populations; and
       (IV) define the components of care and form essential 
     programmatic linkages with related providers in the 
     community.

       (C) Environmental health assessment.--
       (i) In general.--A PPC shall carry out an environmental 
     health assessment to identify environmental health concerns.
       (ii) Assessment process.--The PPC shall--

       (I) define the goals of the assessment;
       (II) generate the environmental health issue list;
       (III) analyze issues with a systems framework;
       (IV) develop appropriate community environmental health 
     indicators;
       (V) rank the environmental health issues;
       (VI) set priorities for action;
       (VII) develop an action plan;
       (VIII) implement the plan; and
       (IX) evaluate progress and planning for the future.

       (D) Evaluation.--Each eligible entity that receives a grant 
     under this paragraph shall evaluate, report, and disseminate 
     program findings and outcomes.
       (E) Technical assistance.--The Director may provide such 
     technical and other non-financial assistance to eligible 
     entities as the Director determines to be necessary.
       (3) Level 2 cooperative agreements.--
       (A) Eligibility.--
       (i) In general.--The Director shall award grants under this 
     paragraph to eligible entities that have already--

       (I) established broad-based collaborative partnerships; and
       (II) completed environmental assessments.

       (ii) No level 1 requirement.--To be eligible to receive a 
     grant under this paragraph, an eligible entity is not 
     required to have successfully completed a Level 1 Cooperative 
     Agreement (as described in paragraph (2).
       (B) Use of grant funds.--An eligible entity awarded a grant 
     under this paragraph shall use the funds to further 
     activities to carry out environmental health improvement 
     activities, including--
       (i) addressing community environmental health priorities in 
     accordance with paragraph (2)(C)(ii), including--

       (I) air quality;
       (II) water quality;
       (III) solid waste;
       (IV) land use;
       (V) housing;
       (VI) food safety;
       (VII) crime;
       (VIII) injuries; and
       (IX) healthcare services;

       (ii) building partnerships between planning, public health, 
     and other sectors, to address how the built environment 
     impacts food availability and access and physical activity to 
     promote healthy behaviors and lifestyles and reduce obesity 
     and related co-morbidities;
       (iii) establishing programs to address--

       (I) how environmental and social conditions of work and 
     living choices influence physical activity and dietary 
     intake; or
       (II) how those conditions influence the concerns and needs 
     of people who have impaired mobility and use assistance 
     devices, including wheelchairs and lower limb prostheses; and

       (iv) convening intervention programs that examine the role 
     of the social environment in connection with the physical and 
     chemical environment in--

       (I) determining access to nutritional food; and
       (II) improving physical activity to reduce morbidity and 
     increase quality of life.

       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section--
       (1) $25,000,000 for fiscal year 2007; and
       (2) such sums as are necessary for the period of fiscal 
     years 2008 through 2011.

     SEC. 6. ADDITIONAL RESEARCH ON THE RELATIONSHIP BETWEEN THE 
                   BUILT ENVIRONMENT AND THE HEALTH OF COMMUNITY 
                   RESIDENTS.

       (a) Definition of Eligible Institution.--In this section, 
     the term ``eligible institution'' means a public or private 
     nonprofit institution that submits to the Secretary and the 
     Administrator an application for a grant under the grant 
     program authorized under subsection (b)(2) at such time, in 
     such manner, and containing such agreements, assurances, and 
     information as the Secretary and Administrator may require.
       (b) Research Grant Program.--
       (1) Definition of health.--In this section, the term 
     ``health'' includes--
       (A) levels of physical activity;
       (B) consumption of nutritional foods;
       (C) rates of crime;
       (D) air, water, and soil quality;
       (E) risk of injury;
       (F) accessibility to healthcare services; and
       (G) other indicators as determined appropriate by the 
     Secretary.
       (2) Grants.--The Secretary, in collaboration with the 
     Administrator, shall provide grants to eligible institutions 
     to conduct and coordinate research on the built environment 
     and its influence on individual and population-based health.
       (3) Research.--The Secretary shall support research that--
       (A) investigates and defines the causal links between all 
     aspects of the built environment and the health of residents;
       (B) examines--
       (i) the extent of the impact of the built environment 
     (including the various characteristics of the built 
     environment) on the health of residents;
       (ii) the variance in the health of residents by--

       (I) location (such as inner cities, inner suburbs, and 
     outer suburbs); and
       (II) population subgroup (such as children, the elderly, 
     the disadvantaged); or

       (iii) the importance of the built environment to the total 
     health of residents, which is the primary variable of 
     interest from a public health perspective;
       (C) is used to develop--
       (i) measures to address health and the connection of health 
     to the built environment; and
       (ii) efforts to link the measures to travel and health 
     databases;
       (D) distinguishes carefully between personal attitudes and 
     choices and external influences on observed behavior to 
     determine how much an observed association between the built 
     environment and the health of residents, versus the lifestyle 
     preferences of the people that choose to live in the 
     neighborhood, reflects the physical characteristics of the 
     neighborhood; and
       (E)(i) identifies or develops effective intervention 
     strategies to promote better health among residents with a 
     focus on behavioral interventions and enhancements of the 
     built environment that promote increased use by residents; 
     and
       (ii) in developing the intervention strategies under clause 
     (i), ensures that the intervention strategies will reach out 
     to high-risk populations, including low-income urban and 
     rural communities.
       (4) Priority.--In providing assistance under the grant 
     program authorized under paragraph (2), the Secretary and the 
     Administrator shall give priority to research that 
     incorporates--
       (A) interdisciplinary approaches; or
       (B) the expertise of the public health, physical activity, 
     urban planning, and transportation research communities in 
     the United States and abroad.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
                                 ______
                                 
  SA 3871. Mrs. FEINSTEIN (for herself, Mr. Dorgan, Mr. Bingaman, and 
Ms. Stabenow) submitted an amendment intended to be proposed by her to 
the bill S. 1955, to amend title I of the Employee Retirement Security 
Act of 1974 and the Public Health Service Act to expand health care 
access and reduce costs through the creation of small business health 
plans and through modernization of the health insurance marketplace; 
which was ordered to lie on the table; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Medicare Drug Formulary 
     Protection Act''.

     SEC. 2. REMOVAL OF COVERED PART D DRUGS FROM THE PRESCRIPTION 
                   DRUG PLAN FORMULARY.

       (a) Limitation on Removal or Change of Covered Part D Drugs 
     From the Prescription Drug Plan Formulary.--Section 1860D-
     4(b)(3)(E) of the Social Security Act (42 U.S.C. 1395w-
     104(b)(3)(E)) is amended to read as follows:
       ``(E) Removing a drug from formulary or imposing a 
     restriction or limitation on coverage.--
       ``(i) Limitation on removal, limitation, or restriction.--

       ``(I) In general.--Subject to subclause (II) and clause 
     (ii), beginning with 2006, the PDP sponsor of a prescription 
     drug plan may not remove a covered part D drug from the plan 
     formulary or impose a restriction or limitation on the 
     coverage of such a drug (such as through the application of a 
     preferred status, usage restriction, step therapy, prior 
     authorization, or quantity limitation) other than at the 
     beginning of each plan year.
       ``(II) Special rule for newly enrolled individuals.--
     Subject to clause (ii), in the case of an individual who 
     enrolls in a prescription drug plan on or after the date of 
     enactment of this subparagraph, the PDP sponsor of such plan 
     may not remove a covered part D drug from the plan formulary 
     or impose a restriction or limitation on the coverage of such 
     a drug (such as through the application

[[Page S4238]]

     of a preferred status, usage restriction, step therapy, prior 
     authorization, or quantity limitation) during the period 
     beginning on the date of such enrollment and ending on 
     December 31 of the immediately succeeding plan year.

       ``(ii) Exceptions to limitation on removal.--Clause (i) 
     shall not apply with respect to a covered part D drug that--

       ``(I) is a brand name drug for which there is a generic 
     drug approved under section 505(j) of the Food and Drug 
     Cosmetic Act (21 U.S.C. 355(j)) that is placed on the market 
     during the period in which there are limitations on removal 
     or change in the formulary under clause (i);
       ``(II) is a brand name drug that goes off-patent during 
     such period;
       ``(III) is a drug for which the Commissioner of Food and 
     Drugs issues a clinical warning that imposes a restriction or 
     limitation on the drug during such period or removes the drug 
     from the market;
       ``(IV) is a drug that the plan's pharmacy and therapeutic 
     committee determines, based on scientific evidence, to be 
     unsafe or ineffective during such period; or
       ``(V) is a drug for which the Secretary has determined an 
     exception to such application is appropriate (such as to take 
     into account new therapeutic uses and newly covered part D 
     drugs).

       ``(iii) Notice of removal under application of exception to 
     limitation.--The PDP sponsor of a prescription drug plan 
     shall provide appropriate notice (such as under subsection 
     (a)(3)) of any removal or change under clause (ii) to the 
     Secretary, affected enrollees, physicians, pharmacies, and 
     pharmacists.''.
       (b) Notice for Change in Formulary and Other Restrictions 
     or Limitations on Coverage.--
       (1) In general.--Section 1860D-4(a) of such Act (42 U.S.C. 
     1395w-104(a)) is amended by adding at the end the following 
     new paragraph:
       ``(5) Annual notice of changes in formulary and other 
     restrictions or limitations on coverage.--Each PDP sponsor 
     offering a prescription drug plan shall furnish to each 
     enrollee at the time of each annual coordinated election 
     period (referred to in section 1860D-1(b)(1)(B)(iii)) for a 
     plan year a notice of any changes in the formulary or other 
     restrictions or limitations on coverage of a covered part D 
     drug under the plan that will take effect for the plan 
     year.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to annual, coordinated election periods beginning 
     after the date of the enactment of this Act.
                                 ______
                                 
  SA 3872. Mr. KERRY submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place insert the following:

     SEC. __. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business-related credits) is amended by adding at the end the 
     following:

     ``SEC. 45N. EMPLOYEE HEALTH INSURANCE EXPENSES.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of a qualified small employer, the employee health 
     insurance expenses credit determined under this section is an 
     amount equal to the applicable percentage of the amount paid 
     by the taxpayer during the taxable year for qualified 
     employee health insurance expenses.
       ``(b) Applicable Percentage.--For purposes of subsection 
     (a), the applicable percentage is--
       ``(1) 50 percent in the case of an employer with less than 
     10 qualified employees,
       ``(2) 25 percent in the case of an employer with more than 
     9 but less than 25 qualified employees, and
       ``(3) 20 percent in the case of an employer with more than 
     24 but less than 50 qualified employees.
       ``(c) Per Employee Dollar Limitation.--
       ``(1) In general.--The amount of qualified employee health 
     insurance expenses taken into account under subsection (a) 
     with respect to any qualified employee for any taxable year 
     shall not exceed--
       ``(A) $4,000 for self-only coverage, and
       ``(B) $10,000 for family coverage.
       ``(2) Phaseout of per employee dollar limitation.--
       ``(A) In general.--The amount determined under paragraph 
     (1) with respect to any qualified employee for any taxable 
     year shall be reduced by the amount determined under 
     subparagraph (B).
       ``(B) Amount of reduction.--The amount determined under 
     this subparagraph shall be the amount which bears the same 
     ratio to such amount determined under paragraph (1) as--
       ``(i) the excess of--

       ``(I) the qualified employee's compensation from the 
     qualified small employer for such taxable year, over
       ``(II) $30,000, bears to

       ``(ii) $20,000.
     The rules of subparagraphs (B) and (C) of section 219(g)(2) 
     shall apply to any reduction under this subparagraph.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Qualified small employer.--
       ``(A) In general.--The term `qualified small employer' 
     means any small employer which--
       ``(i) provides eligibility for health insurance coverage 
     (after any waiting period (as defined in section 9801(b)(4))) 
     to all qualified employees of the employer under similar 
     terms, and
       ``(ii) pays at least 50 percent of the cost of such 
     coverage for each qualified employee.
       ``(B) Small employer.--
       ``(i) In general.--For purposes of this paragraph, the term 
     `small employer' means, with respect to any taxable year, any 
     employer if--

       ``(I) the average gross receipts of such employer for the 
     preceding 3 taxable years does not exceed $5,000,000, and
       ``(II) such employer employed an average of more than 1 but 
     less than 50 employees on business days during the preceding 
     taxable year.

       ``(ii) Employers not in existence in preceding year.--For 
     purposes of clause (i)(II)--

       ``(I) a preceding taxable year may be taken into account 
     only if the employer was in existence throughout such year, 
     and
       ``(II) in the case of an employer which was not in 
     existence throughout the preceding taxable year, the 
     determination of whether such employer is a qualified small 
     employer shall be based on the average number of employees 
     that it is reasonably expected such employer will employ on 
     business days in the current taxable year.

       ``(iii) Aggregation rules.--All persons treated as a single 
     employer under subsection (a) or (b) of section 52 or 
     subsection (m) or (o) of section 414 shall be treated as one 
     person for purposes of this subparagraph.
       ``(iv) Predecessors.--The Secretary may prescribe 
     regulations which provide for references in this subparagraph 
     to an employer to be treated as including references to 
     predecessors of such employer.
       ``(2) Qualified employee health insurance expenses.--
       ``(A) In general.--The term `qualified employee health 
     insurance expenses' means any amount paid by an employer for 
     health insurance coverage to the extent such amount is 
     attributable to coverage provided to any employee while such 
     employee is a qualified employee.
       ``(B) Exception for amounts paid under salary reduction 
     arrangements.--No amount paid or incurred for health 
     insurance coverage pursuant to a salary reduction arrangement 
     shall be taken into account under subparagraph (A).
       ``(C) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning given such term by 
     section 9832(b)(1).
       ``(3) Qualified employee.--
       ``(A) In general.--The term `qualified employee' means an 
     employee of an employer who, with respect to any period, is 
     not provided health insurance coverage under--
       ``(i) a health plan of the employee's spouse,
       ``(ii) title XVIII, XIX, or XXI of the Social Security Act,
       ``(iii) chapter 17 of title 38, United States Code,
       ``(iv) chapter 55 of title 10, United States Code,
       ``(v) chapter 89 of title 5, United States Code, or
       ``(vi) any other provision of law.
     For purposes of clause (i), the Secretary shall prescribe by 
     regulation the manner by which an employee's health insurance 
     coverage under a health plan of the employee's spouse is 
     certified to the employee's employer.
       ``(B) Employee.--The term `employee'--
       ``(i) means any individual, with respect to any calendar 
     year, who is reasonably expected to receive at least $5,000, 
     but not more than $50,000, of compensation from the employer 
     during such year, and
       ``(ii) includes a leased employee within the meaning of 
     section 414(n).
       ``(C) Compensation.--The term `compensation' means amounts 
     described in section 6051(a)(3).
       ``(D) Inflation adjustment.--
       ``(i) In general.--In the case of a taxable year beginning 
     after 2007, the $50,000 amount in subparagraph (B)(i) shall 
     be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) 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 2006' 
     for `calendar year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any amount as adjusted under clause 
     (i) is not a multiple of $1,000, such amount shall be rounded 
     to the next lowest multiple of $1,000.
       ``(e) Portion of Credit Made Refundable.--
       ``(1) In general.--The aggregate credits allowed to a 
     taxpayer under subpart C shall be increased by the lesser 
     of--
       ``(A) the credit which would be allowed under subsection 
     (a) without regard to this subsection and the limitation 
     under section 38(c), or
       ``(B) the amount by which the aggregate amount of credits 
     allowed by this subpart (determined without regard to this 
     subsection) would increase if the limitation imposed by 
     section 38(c) for any taxable year

[[Page S4239]]

     were increased by the amount of employer payroll taxes 
     imposed on the taxpayer during the calendar year in which the 
     taxable year begins.
     The amount of the credit allowed under this subsection shall 
     not be treated as a credit allowed under this subpart and 
     shall reduce the amount of the credit otherwise allowable 
     under subsection (a) without regard to section 38(c).
       ``(2) Employer payroll taxes.--For purposes of this 
     subsection--
       ``(A) In general.--The term `employer payroll taxes' means 
     the taxes imposed by--
       ``(i) subsections (a) and (b) of section 3111, and
       ``(ii) sections 3211(a) and 3221(a) (determined at a rate 
     equal to the sum of the rates under subsections (a) and (b) 
     of section 3111).
       ``(B) Special rule.--A rule similar to the rule of section 
     24(d)(2)(C) shall apply for purposes of subparagraph (A).
       ``(f) Denial of Double Benefit.--No deduction or credit 
     under any other provision of this chapter shall be allowed 
     with respect to qualified employee health insurance expenses 
     taken into account under subsection (a).''.
       (b) Credit to Be Part of General Business Credit.--Section 
     38(b) of the Internal Revenue Code of 1986 (relating to 
     current year business credit) is amended by striking ``and'' 
     at the end of paragraph (29), by striking the period at the 
     end of paragraph (30) and inserting ``, plus'', and by adding 
     at the end the following:
       ``(31) the employee health insurance expenses credit 
     determined under section 45N.''.
       (c) Conforming Amendment.--Section 6211(b)(4)(A) of the 
     Internal Revenue Code of 1986 is amended by striking ``and 
     34'' and inserting ``34, and 45N(e)''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following:

``Sec. 45N. Employee health insurance expenses.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31, 2006.
                                 ______
                                 
  SA 3873. Mr. LEAHY submitted an amendment intended to be proposed by 
him to the bill S. 1955, to amend title I of the Employee Retirement 
Security Act of 1974 and the Public Health Service Act to expand health 
care access and reduce costs through the creation of small business 
health plans and through modernization of the health insurance 
marketplace; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. MEDICAL MALPRACTICE INSURANCE ANTITRUST PROVISIONS.

       (a) Short Title.--This section may be cited as the 
     ``Medical Malpractice Insurance Antitrust Act of 2005''.
       (b) Prohibition on Anti-Competitive Activities.--
     Notwithstanding any other provision of law, nothing in the 
     Act of March 9, 1945 (15 U.S.C. 1011 et seq., commonly known 
     as the ``McCarran-Ferguson Act'') shall be construed to 
     permit commercial insurers to engage in any form of price 
     fixing, bid rigging, or market allocations in connection with 
     the conduct of the business of providing medical malpractice 
     insurance.
       (c) Application to Activities of State Commissions of 
     Insurance and Other State Insurance Regulatory Bodies.--This 
     section does not apply to the information gathering and rate 
     setting activities of any State commissions of insurance, or 
     any other State regulatory body with authority to set 
     insurance rates.

                          ____________________