[Congressional Record Volume 153, Number 121 (Thursday, July 26, 2007)]
[Senate]
[Pages S10151-S10191]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. HARKIN (for himself and Mr. Specter):
  S. 1881. A bill to amend the Americans with Disabilities Act of 1990 
to restore the intent and protections of that Act, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.
  Mr. HARKIN. Mr. President, I am joining, today, with the senior 
Senator from Pennsylvania, Senator Specter, in introducing the ADA 
Restoration Act of 2007.
  Today, July 26, marks the 17th anniversary of the signing of the 
Americans with Disabilities Act, one of the landmark civil rights laws 
of the 20th century, and a long-overdue emancipation proclamation for 
the 50 million Americans with disabilities.
  As chief sponsor of the ADA in the Senate, I take pride in the 
progress we have made as a Nation since 1990. We have removed most 
physical barriers to movement and access for the 50 million Americans 
with disabilities. We have required employers to provide reasonable 
accommodations so that people with disabilities can have equal 
opportunity in the workplace. We have advanced the 4 goals of the ADA, 
equality of opportunity, full participation, independent living, and 
economic self-sufficiency.
  So today is a day, first and foremost, to celebrate all that has been 
accomplished over the last 17 years.
  But despite that progress, there is a problem. In recent years, the 
courts have ignored Congress's clear intent as to who should be 
protected under the ADA. And the courts have narrowed the definition of 
who qualifies as an ``individual with a disability.'' As a consequence, 
millions of people we intended to be protected under the ADA, including 
people with epilepsy, diabetes, and cancer, are not protected any more. 
In a ruling just this spring, the 11th Circuit court even concluded 
that a person with mental retardation was not ``disabled'' under the 
ADA.
  Looking back through the legislative history, it is abundantly clear 
that Congress intended that the protections in the ADA apply to all 
persons without regard to mitigating circumstances, such as taking 
medication or using an assistive device.
  In the Senate Labor and Human Resources Committee report Congress 
said:

       Whether a person has a disability should be assessed 
     without regard to the availability of mitigating measures, 
     such as reasonable accommodations or auxiliary aids.

  The House Education and Labor Committee report says the same thing, 
and goes on to say:

       For example, a person who is hard of hearing is 
     substantially limited in the major life activity of hearing, 
     even though the loss may be corrected through the use of a 
     hearing aid. Likewise, persons with impairments, such as 
     epilepsy or diabetes, which substantially limit a major life 
     activity are covered under . . . the definition of 
     disability, even if the effects of the impairment are 
     controlled by medication.

  Nonetheless, in a series of cases, the Supreme Court ignored 
Congressional intent. Together, these Supreme Court cases have created 
an absurd and unintended Catch 22. People with serious health 
conditions like epilepsy or diabetes who are fortunate to find 
treatments that make them more capable and independent, and more able 
to work, may find that they are no longer protected by the ADA. If 
these individuals are no longer covered under the ADA, then their 
requests for a reasonable accommodation at work can be denied, or they 
can be fired. On the other hand, if they stop taking their medication, 
they will be considered a person with a disability under the ADA, but 
they will be unable to do their job.
  This is not just absurd, it is wrong. It flies in the face of clear, 
unambiguous Congressional intent. When we passed the law, there was 
common agreement on both sides of the aisle, and on the part of the 
White House, that the law was designed to protect any individual who is 
treated less favorably because of a current, past, or perceived 
disability.

[[Page S10152]]

  This situation cries out for a modest, reasonable legislative fix, 
and that is exactly what we are doing, today, by introducing the ADA 
Restoration Act of 2007.
  Our bill amends the definition of ``disability'' so that people who 
Congress originally intended to be protected from discrimination are 
covered under the ADA.
  Mr. Presdient, 17 years ago, the Americans with Disabilities Act 
passed with overwhelming bipartisan support. Likewise, today, we are 
building a strong bicameral, bipartisan majority to support ADA 
Restoration. A companion bill is being introduced, today, in the House.
  As with the original passage of the ADA in 1990, it is going to take 
time to hold hearings and build strong majorities. But I look forward 
to working to restore Congress' original intent, and, once again, to 
ensure that Americans with disabilities are protected from 
discrimination.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was orderd to be 
printed in the Record, as follows:

                                S. 1881

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Americans with Disabilities 
     Act Restoration Act of 2007''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) in enacting the Americans with Disabilities Act of 
     1990, Congress intended that the Act ``establish a clear and 
     comprehensive prohibition of discrimination on the basis of 
     disability'', and provide broad coverage and vigorous and 
     effective remedies without unnecessary and obstructive 
     defenses;
       (2) decisions and opinions of the Supreme Court have unduly 
     narrowed the broad scope of protection afforded by the 
     Americans with Disabilities Act of 1990, eliminating 
     protection for a broad range of individuals whom Congress 
     intended to protect;
       (3) in enacting the Americans with Disabilities Act of 
     1990, Congress recognized that physical and mental 
     impairments are natural parts of the human experience that in 
     no way diminish a person's right to fully participate in all 
     aspects of society, but Congress also recognized that people 
     with physical or mental impairments having the talent, 
     skills, abilities, and desire to participate in society are 
     frequently precluded from doing so because of prejudice, 
     antiquated attitudes, or the failure to remove societal and 
     institutional barriers;
       (4)(A) Congress modeled the Americans with Disabilities Act 
     of 1990 definition of disability on that of section 504 of 
     the Rehabilitation Act of 1973 (referred to in this section 
     as ``section 504''), which had, prior to the date of 
     enactment of the Americans with Disabilities Act of 1990, 
     been construed broadly to encompass both actual and perceived 
     limitations, and limitations imposed by society; and
       (B) the broad conception of the definition contained in 
     section 504 had been underscored by the Supreme Court's 
     statement in its decision in School Board of Nassau County v. 
     Arline, 480 U.S. 273 (1987), that the definition 
     ``acknowledged that society's myths and fears about 
     disability and disease are as handicapping as are the 
     physical limitations that flow from actual impairment'';
       (5) in adopting, in the Americans with Disabilities Act of 
     1990, the concept of disability expressed in section 504, 
     Congress understood that adverse action based on a person's 
     physical or mental impairment is often unrelated to the 
     limitations caused by the impairment itself;
       (6) instead of following congressional expectations that 
     the term ``disability'' would be interpreted broadly in the 
     Americans with Disabilities Act of 1990, the Supreme Court 
     has ruled, in Toyota Motor Manufacturing, Kentucky, Inc. v. 
     Williams, 534 U.S. 184 (2002), that the elements of the 
     definition ``need to be interpreted strictly to create a 
     demanding standard for qualifying as disabled'' and, 
     consistent with that view, has narrowed the application of 
     the definition in various ways; and
       (7) contrary to explicit congressional intent expressed in 
     the committee reports for the Americans with Disabilities Act 
     of 1990, the Supreme Court has eliminated from the Act's 
     coverage individuals who have mitigated the effects of their 
     impairments through the use of such measures as medication 
     and assistive devices.
       (b) Purpose.--The purposes of this Act are--
       (1) to effect the Americans with Disabilities Act of 1990's 
     objectives of providing ``a clear and comprehensive national 
     mandate for the elimination of discrimination'' and ``clear, 
     strong, consistent, enforceable standards addressing 
     discrimination'' by restoring the broad scope of protection 
     available under the Americans with Disabilities Act of 1990;
       (2) to respond to certain decisions of the Supreme Court, 
     including Sutton v. United Air Lines, Inc., (527 U.S. 471 
     (1999), Murphy v. United Parcel Service, Inc., 527 U.S. 516 
     (1999), Albertson's, Inc. v. Kirkingburg, 527 U.S. 555 
     (1999), and Toyota Motor Manufacturing, Kentucky, Inc. v. 
     Williams, 534 U.S. 184 (2002), that have narrowed the class 
     of people who can invoke the protection from discrimination 
     that the Americans with Disabilities Act of 1990 provides; 
     and
       (3) to reinstate the original congressional intent 
     regarding the definition of disability in the Americans with 
     Disabilities Act of 1990 by clarifying that the protection of 
     that Act is available for all individuals who are--
       (A) subjected to adverse treatment based on an actual or 
     perceived impairment, or a record of impairment; or
       (B) adversely affected--
       (i) by prejudiced attitudes, such as myths, fears, 
     ignorance, or stereotypes concerning disability or particular 
     disabilities; or
       (ii) by the failure to remove societal and institutional 
     barriers, including communication, transportation, and 
     architectural barriers, or the failure to provide reasonable 
     modifications to policies, practices, and procedures, 
     reasonable accommodations, and auxiliary aids and services.

     SEC. 3. FINDINGS IN AMERICANS WITH DISABILITIES ACT OF 1990.

       Section 2(a) of the Americans with Disabilities Act of 1990 
     (42 U.S.C. 12101(a)) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1)(A) physical and mental disabilities are natural parts 
     of the human experience that in no way diminish a person's 
     right to fully participate in all aspects of society; and
       ``(B)(i) people with physical or mental disabilities having 
     the talent, skills, abilities, and desire to participate in 
     society are frequently precluded from doing so because of 
     discrimination; and
       ``(ii) other people who have a record of a disability or 
     are regarded as having a disability have also been subjected 
     to discrimination;''; and
       (2) by striking paragraph (7) and inserting the following:
       ``(7)(A) individuals with disabilities have been subjected 
     to a history of purposeful unequal treatment, have had 
     restrictions and limitations imposed upon them because of 
     their disabilities, and have been relegated to positions of 
     political powerlessness in society; and
       ``(B) classifications and selection criteria that exclude 
     individuals with disabilities should be strongly disfavored, 
     subjected to skeptical and meticulous examination, and 
     permitted only for highly compelling reasons, and never on 
     the basis of prejudice, myths, irrational fears, ignorance, 
     or stereotypes about disability;''.

     SEC. 4. DISABILITY DEFINED.

       Section 3 of the Americans with Disabilities Act of 1990 
     (42 U.S.C. 12102) is amended--
       (1) by striking paragraph (2) and inserting the following:
       ``(2) Disability.--
       ``(A) In general.--The term `disability' means--
       ``(i) a physical or mental impairment;
       ``(ii) a record of a physical or mental impairment; or
       ``(iii) being regarded as having a physical or mental 
     impairment.
       ``(B) Rule of construction.--
       ``(i) Determination of impairment.--The determination of 
     whether an individual has a physical or mental impairment 
     shall be made without regard to--

       ``(I) whether the individual uses a mitigating measure;
       ``(II) the impact of any mitigating measures the individual 
     may or may not be using;
       ``(III) whether any manifestation of the impairment is 
     episodic; or
       ``(IV) whether the impairment is in remission or latent.

       ``(ii) Mitigating measures.--The term `mitigating measure' 
     means any treatment, medication, device, or other measure 
     used to eliminate, mitigate, or compensate for the effect of 
     an impairment, and includes prescription and other 
     medications, personal aids and devices (including assistive 
     technology devices and services), reasonable accommodations, 
     and auxiliary aids and services.''; and
       (2) by redesignating paragraph (3) as paragraph (7) and 
     inserting after paragraph (2) the following:
       ``(3) Mental impairment.--The term `mental', used with 
     respect to an impairment, means any mental or psychological 
     disorder such as mental retardation, organic brain syndrome, 
     emotional or mental illness, or specific learning disability.
       ``(4) Physical impairment.--The term `physical', used with 
     respect to an impairment, means any physiological disorder or 
     condition, cosmetic disfigurement, or anatomical loss 
     affecting 1 or more of the following body systems:
       ``(A) Neurological.
       ``(B) Musculoskeletal.
       ``(C) Special sense organs.
       ``(D) Respiratory, including speech organs.
       ``(E) Cardiovascular.
       ``(F) Reproductive.
       ``(G) Digestive.
       ``(H) Genitourinary.
       ``(I) Hemic and lymphatic.
       ``(J) Skin.
       ``(K) Endocrine.
       ``(5) Record of a physical or mental impairment.--The term 
     `record of a physical or mental impairment' means a history 
     of, or a

[[Page S10153]]

     misclassification as having, a physical or mental impairment.
       ``(6) Regarded as having a physical or mental impairment.--
     The term `regarded as having a physical or mental impairment' 
     means perceived or treated as having a physical or mental 
     impairment, whether or not the individual involved has an 
     impairment.''.

     SEC. 5. ADVERSE ACTION.

       The Americans with Disabilities Act of 1990 is amended by 
     inserting after section 3 (42 U.S.C. 12102) the following:

     ``SEC. 4. ADVERSE ACTION.

       ``An adverse action taken by an entity covered under this 
     Act against an individual because of that individual's use of 
     a mitigating measure or because of a side effect or other 
     consequence of the use of such a measure shall constitute 
     discrimination under this Act.''.

     SEC. 6. DISCRIMINATION ON THE BASIS OF DISABILITY.

       Section 102 of the Americans with Disabilities Act of 1990 
     (42 U.S.C. 12112) is amended--
       (1) in subsection (a), by striking ``against a qualified 
     individual with a disability because of the disability of 
     such individual'' and inserting ``against an individual on 
     the basis of disability''; and
       (2) in subsection (b), in the matter preceding paragraph 
     (1), by striking the term ``discriminate'' and inserting 
     ``discriminate against an individual on the basis of 
     disability''.

     SEC. 7. QUALIFIED INDIVIDUAL.

       Section 103(a) of the Americans with Disabilities Act of 
     1990 (42 U.S.C. 2113(a)) is amended by striking ``that an 
     alleged'' and inserting ``that--
       ``(1) the individual alleging discrimination under this 
     title is not a qualified individual with a disability; or
       ``(2) an alleged''.

     SEC. 8. RULE OF CONSTRUCTION.

       Section 501 of the Americans with Disabilities Act of 1990 
     (42 U.S.C. 12201) is amended by adding at the end the 
     following:
       ``(e) Broad Construction.--In order to ensure that this Act 
     achieves the purpose of providing a comprehensive prohibition 
     of discrimination on the basis of disability and to advance 
     the remedial purpose of this Act, the provisions of this Act 
     shall be broadly construed.
       ``(f) Regulations.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of the Americans with Disabilities Act 
     Restoration Act of 2007--
       ``(A) the Attorney General, the Equal Employment 
     Opportunity Commission, and the Secretary of Transportation 
     shall issue regulations described in sections 106, 204, 223, 
     229, 244, and 306, as appropriate, including regulations that 
     implement sections 3 and 4, to carry out the corresponding 
     provisions of this Act, as this Act is amended by the 
     Americans with Disabilities Act Restoration Act of 2007; and
       ``(B) the Architectural and Transportation Barriers 
     Compliance Board shall issue supplementary guidelines 
     described in section 504, to supplement the existing Minimum 
     Guidelines and Requirements for Accessible Design for 
     purposes of titles II and III of this Act, as this Act is 
     amended by the Americans with Disabilities Act Restoration 
     Act of 2007.
       ``(2) Construction.--Nothing in this subsection shall be 
     construed to limit the authority of an officer or agency 
     described in paragraph (1) to issue regulations or guidelines 
     under any other provision of this Act, other than this 
     subsection.
       ``(g) Deference to Regulations and Guidance.--Duly issued 
     Federal regulations and guidance for the implementation of 
     the Americans with Disabilities Act of 1990, including 
     provisions implementing and interpreting the definition of 
     disability, shall be entitled to deference by administrative 
     agencies or officers, and courts, deciding an issue in any 
     action brought under this Act.''.
                                 ______
                                 
      By Mr. HAGEL (for himself, Mr. Durbin, Mr. Biden, and Mrs. 
        Boxer):
  S. 1882. A bill to amend the Public Health Service Act to establish 
various programs for the recruitment and retention of public health 
workers and to eliminate critical public health workforce shortages in 
Federal, State, local, and tribal public health agencies; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. DURBIN. Mr. President, in the last few years, our Nation's public 
health has been threatened repeatedly. We have faced natural disasters 
like the horrific damage done by Hurricane Katrina. We have endured 
human-led catastrophes like the tragic September 11 attacks. Only a 
couple of months ago, a man infected with a potentially lethal strain 
of extremely drug-resistant tuberculosis was able to travel from his 
home in Atlanta to France, Greece, the Czech Republic, and Canada, 
before ending up at a center in Denver for treatment.
  These emergencies have made it clear that our public health system 
must be prepared for the unexpected.
  Our ability to prevent, respond to, and recover from incidents like 
these depends upon an adequately staffed and well trained public health 
workforce. But if we look at our public health workforce today, what we 
see is alarming: an aging staff nearing retirement with no clear 
pipeline of trained employees to fill the void.
  The average age of lab technicians, epidemiologists, environmental 
health experts, microbiologists, IT specialists, administrators, and 
other public health workers is 47. That is 7 years older than the 
average age of the Nation's workforce. Retirement rates are as high as 
20 percent in some State public health agencies. Nearly half of the 
Federal employees in positions critical to our biodefense will be 
eligible to retire by 2012. The average age of a public health nurse is 
near 50 years.
  These statistics are sobering. As the responsibilities of our public 
health workforce are growing, their ranks continue to shrink. These are 
shortages that impact not just for the security of our health, but our 
national security.
  We can't afford to overlook this problem any longer. For the third 
consecutive Congress, Senator Hagel and I are introducing the Public 
Health Preparedness Workforce Development Act of 2007. This is a bill 
that will increase the pipeline of qualified public health workers at 
all levels--Federal, State, local, and tribal. It offers scholarships 
and loan repayment as recruitment and retention incentives for students 
who enter and stay in the field of public health. It also provides 
opportunities for mid-career public health professionals to go back for 
additional training in public health preparedness or biodefense.
  The time to prepare for a public health emergency, whether that be a 
natural disaster or one of our own making, is not tomorrow, nor next 
month, nor a year from now, but today. Looking forward we must 
strengthen our public health workforce. I urge my colleagues to join me 
and the Senator from Nebraska in taking up and passing the Public 
Health Preparedness Workforce Development Act. We must all make a 
commitment to securing the safety of our nation, and that security 
begins with our public health.
                                 ______
                                 
      By Mr. KOHL (for himself, Mr. Dorgan, and Mr. Wyden):
  S. 1883. A bill to amend title XVIII of the Social Security Act to 
provide for standardized marketing requirements under the Medicare 
Advantage program and the Medicare prescription drug program and to 
provide for State certification prior to waiver of licensure 
requirements under the Medicare prescription drug program, and for 
other purposes; to the Committee on Finance.
  Mr. KOHL. Mr. President, I rise today to introduce the Accountability 
and Transparency in Medicare Marketing Act, on behalf of myself and 
Senator Dorgan and Wyden. This legislation aims to regulate the 
marketing standards and sales tactics of Medicare Advantage and 
Medicare prescription drug plans, now the fastest growing segment of 
Medicare and a prime target for fraud, misrepresentation, and deceptive 
sales practices.
  As chairman of the Special Committee on Aging, I recently held a 
hearing entitled, ``Medicare Advantage Marketing and Sales: Who Has the 
Advantage?'' Our hearing uncovered that a large majority of State 
insurance departments have received, and continue to receive, an 
unprecedented number of complaints about inappropriate or confusing 
marketing practices that have led Medicare beneficiaries to enroll in 
Medicare Advantage plans without adequately understanding the 
consequences of their decisions.
  My legislation will facilitate the creation of uniform marketing 
standards that will be adopted and enforced by individual states. Based 
on current law, CMS has exclusive authority to investigate and 
discipline the marketing and selling of Medicare advantage products, 
while States have only been permitted to examine and enforce violations 
against individual insurance agents. This unusual arrangement, which 
some might call a pre-emption of authority, has left a sizable 
enforcement gap that has exacerbated the problems found by the 
committee.
  This legislation will close that gap, giving States the ability to 
standardize marketing and sales regulations, as well as regulate both 
agents and companies in the marketing and sales of

[[Page S10154]]

Medicare Advantage and prescription drug plans. Ultimately, State 
insurance commissioners will have the ability to work in conjunction 
with CMS in order to provide the most comprehensive protection possible 
for Medicare beneficiaries.
  Senior citizens deserve to have access to the health care plan that 
best serves their needs without having to worry about being purposely 
mislead and deceived. I believe we must repair this disconnect in 
oversight and ensure the protection of American seniors, and I hope my 
colleagues will join in my effort to do so.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
placed in the Record, as follows:

                                S. 1883

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Accountability and 
     Transparency in Medicare Marketing Act of 2007''.

     SEC. 2. STANDARDIZED MARKETING REQUIREMENTS UNDER THE 
                   MEDICARE ADVANTAGE AND MEDICARE PRESCRIPTION 
                   DRUG PROGRAMS.

       (a) Medicare Advantage Program.--
       (1) In general.--Section 1856 of the Social Security Act 
     (42 U.S.C. 1395w-26) is amended--
       (A) in subsection (b)(1), by inserting ``or subsection 
     (c)'' after ``subsection (a)''; and
       (B) by adding at the end the following new subsection:
       ``(c) Standardized Marketing Requirements.--
       ``(1) Development by the naic.--
       ``(A) Requirements.--The Secretary shall request the 
     National Association of Insurance Commissioners (in this 
     subsection referred to as the `NAIC') to--
       ``(i) develop standardized marketing requirements for 
     Medicare Advantage organizations with respect to Medicare 
     Advantage plans and PDP sponsors with respect to prescription 
     drug plans under part D; and
       ``(ii) submit a report containing such requirements to the 
     Secretary by not later than the date that is 9 months after 
     the date of enactment of this subsection.
       ``(B) Prohibited activities.--Such requirements shall 
     prohibit the following:
       ``(i) Cross-selling of non-Medicare products or services 
     with products or services offered by a Medicare Advantage 
     plan or a prescription drug plan under part D.
       ``(ii) Up-selling from prescription drug plans under part D 
     to Medicare Advantage plans.
       ``(iii) Telemarketing (including cold calling) conducted by 
     an organization with respect to a Medicare Advantage plan or 
     a PDP sponsor with respect to a prescription drug plan under 
     part D (or by an agent of such an organization or sponsor).
       ``(iv) A Medicare Advantage organization or a PDP sponsor 
     providing cash or other monetary rebates as an inducement for 
     enrollment or otherwise.
       ``(C) Election form.--Such requirements may prohibit a 
     Medicare Advantage organization or a PDP sponsor (or an agent 
     of such an organization or sponsor) from completing any 
     portion of any election form used to carry out elections 
     under section 1851 or 1860D-1 on behalf of any individual.
       ``(D) Agent and broker commissions.--Such requirements 
     shall establish standards--
       ``(i) for fair and appropriate commissions for agents and 
     brokers of Medicare Advantage organizations and PDP sponsors, 
     including a prohibition on extra bonuses or incentives; and
       ``(ii) for the disclosure of such commissions.
       ``(E) Certain conduct of agents.--Such requirements shall 
     address the conduct of agents engaged in on-site promotion at 
     a facility of an organization with which the Medicare 
     Advantage organization or PDP sponsor has a cobranding 
     relationship.
       ``(F) Other standards.--Such requirements may establish 
     such other standards relating to marketing under Medicare 
     Advantage plans and prescription drug plans under part D as 
     the NAIC determines appropriate.
       ``(2) Implementation of requirements.--
       ``(A) Adoption of naic developed requirements.--If the NAIC 
     develops standardized marketing requirements and submits the 
     report pursuant to paragraph (1), the Secretary shall 
     promulgate regulations for the adoption of such requirements. 
     The Secretary shall ensure that such regulations take effect 
     not later than the date that is 10 months after the date of 
     enactment of this subsection.
       ``(B) Requirements if naic does not submit report.--If the 
     NAIC does not develop standardized marketing requirements and 
     submit the report pursuant to paragraph (1), the Secretary 
     shall promulgate regulations for standardized marketing 
     requirements for Medicare Advantage organizations with 
     respect to Medicare Advantage plans and PDP sponsors with 
     respect to prescription drug plans under part D. Such 
     regulations shall prohibit the conduct described in paragraph 
     (1)(B), may prohibit the conduct described in paragraph 
     (1)(C), shall establish the standards described in paragraph 
     (1)(D), shall address the conduct described in paragraph 
     (1)(E), and may establish such other standards relating to 
     marketing under Medicare Advantage plans and prescription 
     drug plans as the Secretary determines appropriate. The 
     Secretary shall ensure that such regulations take effect not 
     later than the date that is 10 months after the date of 
     enactment of this subsection.
       ``(C) Consultation.--In establishing requirements under 
     this subsection, the NAIC or Secretary (as the case may be) 
     shall consult with a working group composed of 
     representatives of Medicare Advantage organizations and PDP 
     sponsors, consumer groups, and other qualified individuals. 
     Such representatives shall be selected in a manner so as to 
     insure balanced representation among the interested groups.
       ``(3) State reporting of violations of standardized 
     marketing requirements.--The Secretary shall request that 
     States report any violations of the standardized marketing 
     requirements under the regulations under subparagraph (A) or 
     (B) of paragraph (2) to national and regional offices of the 
     Centers for Medicare & Medicaid Services.
       ``(4) Report.--The Secretary shall submit an annual report 
     to Congress on the enforcement of the standardized marketing 
     requirements under the regulations under subparagraph (A) or 
     (B) of paragraph (2), together with such recommendations as 
     the Secretary determines appropriate. Such report shall 
     include--
       ``(A) a list of any alleged violations of such requirements 
     reported to the Secretary by a State, a Medicare Advantage 
     organization, or a PDP sponsor; and
       ``(B) the disposition of such reported violations.''.
       (2) State authority to enforce standardized marketing 
     requirements.--
       (A) In general.--Section 1856(b)(3) of the Social Security 
     Act (42 U.S.C. 1395w-26(b)(3)) is amended--
       (i) by striking ``or State'' and inserting ``, State''; and
       (ii) by inserting ``, or State laws or regulations enacting 
     the standardized marketing requirements under subsection 
     (c)'' after ``plan solvency''.
       (B) No preemption of state sanctions.--Nothing in title 
     XVIII of the Social Security Act or the provisions of, or 
     amendments made by, this Act, shall be construed to prohibit 
     a State from imposing sanctions against Medicare Advantage 
     organizations, PDP sponsors, or agents or brokers of such 
     organizations or sponsors for violations of the standardized 
     marketing requirements under subsection (c) of section 1856 
     of the Social Security Act (as added by paragraph (1)) as 
     enacted by that State.
       (3) Conforming amendment.--Section 1851(h)(4) of the Social 
     Security Act (42 U.S.C. 1395w-21(h)(4)) is amended by adding 
     at the end the following flush sentence:
     ``Beginning on the effective date of the implementation of 
     the regulations under subparagraph (A) or (B) of section 
     1856(c)(2), each Medicare Advantage organization with respect 
     to a Medicare Advantage plan offered by the organization (and 
     agents of such organization) shall comply with the 
     standardized marketing requirements under section 1856(c).''.
       (b) Medicare Prescription Drug Program.--Section 1860D-4 of 
     the Social Security Act (42 U.S.C. 1395w-104) is amended by 
     adding at the end the following new subsection:
       ``(l) Standardized Marketing Requirements.--A PDP sponsor 
     with respect to a prescription drug plan offered by the 
     sponsor (and agents of such sponsor) shall comply with the 
     standardized marketing requirements under section 1856(c).''.

     SEC. 3. STATE CERTIFICATION PRIOR TO WAIVER OF LICENSURE 
                   REQUIREMENTS UNDER MEDICARE PRESCRIPTION DRUG 
                   PROGRAM.

       (a) In General.--Section 1860D-12(c) of the Social Security 
     Act (42 U.S.C. 1395w-112(c)) is amended--
       (1) in paragraph (1)(A), by striking ``In the case'' and 
     inserting ``Subject to paragraph (5), in the case''; and
       (2) by adding at the end the following new paragraph:
       ``(5) State certification required.--
       ``(A) In general.--The Secretary may only grant a waiver 
     under paragraph (1)(A) if the Secretary has received a 
     certification from the State insurance commissioner that the 
     prescription drug plan has a substantially complete 
     application pending in the State.
       ``(B) Revocation of waiver upon finding of fraud and 
     abuse.--The Secretary shall revoke a waiver granted under 
     paragraph (1)(A) if the State insurance commissioner submits 
     a certification to the Secretary that the recipient of such a 
     waiver--
       ``(i) has committed fraud or abuse with respect to such 
     waiver;
       ``(ii) has failed to make a good faith effort to satisfy 
     State licensing requirements; or
       ``(iii) was determined ineligible for licensure by the 
     State.''.
       (b) Effective Date.--The amendments made by paragraph (1) 
     shall apply with respect to plan years beginning on or after 
     January 1, 2008.

     SEC. 4. NAIC RECOMMENDATIONS ON THE ESTABLISHMENT OF 
                   STANDARDIZED BENEFIT PACKAGES FOR MEDICARE 
                   ADVANTAGE PLANS AND PRESCRIPTION DRUG PLANS.

       Not later than 30 days after the date of enactment of this 
     Act, the Secretary of Health

[[Page S10155]]

     and Human Services shall request the National Association of 
     Insurance Commissioners to establish a committee to study and 
     make recommendations to the Secretary and Congress on--
       (1) the establishment of standardized benefit packages for 
     Medicare Advantage plans under part C of title XVIII of the 
     Social Security Act and for prescription drug plans under 
     part D of such Act; and
       (2) the regulation of such plans.
                                 ______
                                 
      By Mr. SALAZAR:
  S. 1884. A bill to amend the Farm Security and Rural Investment Act 
of 2002 to reauthorize and improve agricultural energy programs, and 
for other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry,
  Mr. SALAZAR. Mr. President, today I am introducing a bill that will 
help deliver clean energy technologies from the research pipelines of 
our labs into the hands of our farmers and ranchers, so that we can 
take better advantage of our farms and fields for clean energy 
production. This bill, called the Harvesting Energy Act, will bolster 
the energy title of this year's farm bill, building on the good ideas 
that Chairman Harkin, Ranking Member Chambliss, and the rest of us on 
the Agriculture Committee have been working on for several months.
  I am proud that the Harvesting Energy Act reflects the broad-based, 
bipartisan input of the 25 by '25 coalition which, earlier this year, 
provided us with their policy recommendations for how we can produce 25 
percent of our energy from renewable resources by 2025. The 25 by '25 
vision has been endorsed by 22 current and former Governors and several 
State legislatures across the country, along with over 500 
organizations and companies, including the Big Three automobile 
manufacturers, agricultural producers, and environmental groups. We 
established 25 by '25 as a national goal earlier this year when we 
passed the Energy bill in the Senate. We must now implement the 
policies that are necessary to achieve that goal.
  I have spoken many times about the urgency of moving this Nation 
toward energy independence by making better use of the resources we 
have here at home. Responsible development of our oil and gas 
resources, improved efficiency and conservation, and more aggressive 
investment in renewable energy technologies--these are the three 
pillars upon which we must build an economy that is less dependent on 
foreign oil.
  I do not need to remind my colleagues of the dangers that oil 
dependence poses to the United States and to global security. It is oil 
that empowers states such as lran, Venezuela, and Syria. It is oil that 
contributes to violence in Iraq, Nigeria, and the Sudan. It is oil that 
places Russia and China in a dangerous competition for oil in Central 
Asia and Africa.
  This Congress has made remarkable progress since January in 
confronting the daunting task of reducing our dependence on foreign 
oil. It is an effort that has spanned several committees.
  The Energy bill that we passed in early June represented the diligent 
work of the Energy and Natural Resources Committee, the Commerce 
Committee, and the Finance Committee. I was proud of the work we did on 
that bill, from creating meaningful oil savings targets to making 
smarter investments in renewables, improving vehicle standards, and 
establishing a national goal of producing 25 percent of our energy from 
our farms and fields by 2025.
  I am also proud of the energy work we are doing on the farm bill in 
the Agriculture Committee. Thanks to Chairman Harkin's leadership, the 
2007 farm bill will build on the 2002 farm bill's first-ever energy 
title.
  This is an important step that recognizes the central role that our 
farmers and ranchers must play in a new, clean energy economy. We have 
the most productive lands and most efficient farmers in the world, 
allowing America to be the breadbasket for the global community. With 
these resources, talent, and ingenuity, there is no doubt that we can 
grow our way to energy independence.
  As I travel through Colorado, the possibilities of a clean energy 
revolution, driven by farmers and ranchers, are clear.
  In Weld County, Logan County, and Yuma County, we are seeing biofuel 
plants spring to life, creating new markets and new opportunities for 
our rural communities. In 2004, there were no ethanol plants in 
Colorado. Today, three plants produce more than 90 million gallons per 
year, and a fourth plant will come on line later this year, adding 
another 50 million gallons per year.
  But it is not just biofuels. In the San Luis Valley, where my family 
has lived for five generations, Xcel Energy just broke ground on the 
largest solar plant in North America.
  We have added 60 megawatts of wind capacity in Colorado in the last 2 
years, and by the end of 2007, we will add another 775 megawatts, more 
than tripling the State's production of wind power to more than 1,000 
megawatts. This is good for households along the Front Range that get 
clean, affordable power, and it is good for the ranchers in Prowers 
County, who own the land on which the turbines sit.
  These biofuel plants, wind turbines, and solar farms are revitalizing 
rural communities that have been withering on the vine. They are 
bringing life back to main streets that were boarded up and excitement 
back to farmers and ranchers who are eager to be a part of our clean 
energy revolution.
  The bill I am introducing today will help stimulate this revolution 
by getting more renewable energy technologies out of the development 
pipeline and into the fields, where they belong.
  It is based on the recommendations contained in the 25 by 25 Action 
Plan and builds on those ideas with important new initiatives to 
supplement the energy title of the farm bill. Our goal is to ensure 
that the renewable energy work being done at the Department of Energy 
and in colleges and universities throughout the country, in which we 
invested earlier this year through the Energy bill, is accompanied by a 
strong commitment at USDA to bring the resulting technologies and 
methods out to farmers and ranchers.
  USDA has a long history of identifying promising new production 
methods and technologies, refining them, and making them available to 
agricultural producers. The Akron Research Station in Washington 
County, CO, is a great example. For 100 years it has connected our 
farmers in eastern Colorado with the latest practical agricultural 
research available.
  USDA can and should be making the same efforts to disperse the latest 
and best developments from the renewable energy revolution to farmers 
and ranchers.
  I want to briefly describe four ways in which my bill will bolster 
USDA's capabilities in this area and help make the 25x'25 vision a 
reality.
  First, the Harvesting Energy Act of expands and extends Section 9006 
of the farm bill, which offers competitive grants and loan guarantees 
to help farmers, ranchers, and rural small businesses invest in proven 
clean energy technologies. My bill adds $280 million to section 9006, 
following the recommendations of the 25x'25 Agriculture Energy 
Alliance. This will ramp up the loan guarantees for cellulosic ethanol 
facilities, encourage community wind and other electric power projects, 
and expand the number of eligible applicants for these loans and 
grants. This is a responsible way to help more farmers become net 
energy producers of on-farm renewable energy.
  Second, my bill accelerates research, development, demonstration, and 
deployment of renewable resources such as biomass, wind, solar, and 
renewable natural gas. I am proposing that we devote an additional $200 
million per year to these efforts, with the specific goals of bringing 
biomass energy feedstocks such as native grasses and short-rotation 
trees into production; perfecting our biorefinery and conversion 
technologies; refining biofuels from these biomass feedstocks; and 
making use of the biobased coproducts to add value to the process.
  Third, if we are to continue to expand biofuels production, we need 
to ensure that the supply is stable so that we don't encounter major 
shortages in droughts or in periods of adverse weather. Storing 
feedstocks like corn, oilseed crops, and biomass for cellulosic ethanol 
will better protect consumers from huge price fluctuations or 
shortages. My bill would create a voluntary biofuel feedstock reserve 
that would encourage farmers to store these feedstocks on-farm and make 
them available for biofuel production when a price spike or a shortage 
occurs.

[[Page S10156]]

  Fourth, the Harvesting Energy Act invests in research and development 
in new production technologies that promise to yield high energy 
returns and carbon storage. One of the key investments that this bill 
makes is in biochar. Biochar is a type of charcoal produced from 
biomass that is valuable as a soil amendment. The USDA and DOE are 
finding that they can produce biochar as a carbon-capturing byproduct 
of cellulosic ethanol production. This is good for farmers, who put the 
biochar back into the soil as a fertilizer, good for the environment 
because it reduces carbon emissions, and good for consumers because it 
could drive down cellulosic ethanol production costs. My bill would 
provide $50 million in competitive funding for research and development 
grants to scale-up and commercialize biochar production systems. Like 
so much else we are doing in the energy title of the farm bill, this 
would move ideas from the research pipeline out into the field, where 
they need to be.
  This bill includes a wide range of other provisions that build on the 
good work that the Agriculture Committee is doing on the farm bill. 
Like the provisions I have described, they aim to expand the menu of 
renewable energy options we have available as we work to reduce our 
dependence on foreign oil.
  I again thank Chairman Harkin and Senator Chambliss for their 
leadership on the Agriculture Committee and for their commitment to 
creating a robust energy title in this year's farm bill. I firmly 
believe that with the right investments and a commitment from this 
Congress, our farmers and ranchers can help lead us down the path to 
energy independence.
                                 ______
                                 
      By Mr. Smith (for himself and Mr. Kerry):
  S. 1887. A bill to amend title XVIII of the Social Security Act in 
order to ensure access to critical medications under the Medicare Part 
D prescription drug program; to the Committee on Finance.
  Mr. Smith. Mr. President, today I am introducing the Access to 
Critical Medications Act ACMA, a bill that will vastly improve the 
coverage millions of vulnerable Medicare beneficiaries receive through 
the Medicare prescription drug program, known as Part D. The new drug 
benefit has been a tremendous success, providing access to affordable 
prescription drug therapies to millions of beneficiaries, some for the 
very first time. But many of our most vulnerable seniors, especially 
those suffering from serious health conditions like mental illness, 
HIV/AIDS or cancer, often have difficulty obtaining the vital drug 
therapies they need to remain functional, or in some cases, to survive. 
To remedy these problems, the bill I am introducing today will give the 
Centers for Medicare and Medicaid Services, CMS, the regulatory tools 
it needs to ensure that all prescription drug plans, PDP, provide 
unfettered access to medically essential drug therapies.
  My connection to this issue began long before Medicare's new 
prescription drug benefit went into effect. As chairman of the Aging 
Committee, I held a hearing in the spring of 2005 to explore how well 
CMS was preparing to transition dual-eligible beneficiaries, those who 
qualify for both Medicare and Medicaid, into Medicare Part D. At that 
hearing, advocates expressed a number of concerns with the 
implementation of the new drug benefit, and chief among them was 
guaranteeing that vulnerable beneficiaries had access to important drug 
therapies that either stabilized or improved their health condition. I 
made a personal request to then CMS Administrator Dr. Mark McClellan to 
work with prescription drug plans to ensure that their formularies 
provide access to all available drugs in certain pharmaceutical 
classes, including those that contain innovative treatments for mental 
illness, epilepsy, cancer and HIV/AIDS. The result of that conversation 
was the creation of the ``all or substantially all'' policy for six 
protected drug classes. CMS initially included this new policy as part 
of the sub-regulatory formulary guidance it issued to plans in 2005 and 
again in 2006.
  While I was pleased with CMS providing this additional protection for 
the vital drug therapies in the six protected classes, its actual 
impact on beneficiaries gaining access to the medications they need has 
been uneven at best. For one, the policy was issued as sub-regulatory 
guidance, which limits CMS' ability to enforce it. While it is true 
that the annual contracts CMS develops with prescription drug plans 
generally include a requirement that they abide by the ``all or 
substantially all'' guidance, the agency's record of enforcing the 
policy has been quite poor. Instead of plans covering all drugs in the 
six protected classes, as CMS claims plan contracts require, 
beneficiaries, often the most frail and vulnerable, have had extensive 
access problems because their PDPs do not include their medication on 
its formulary. In fact, data from a study being conducted by the 
American Psychiatric Institute for Research and Education, APIRE, 
released earlier this year, showed that roughly 68 percent of surveyed 
beneficiaries, many of them dual eligibles, experienced some sort of 
problem accessing the prescription drug they needed because their PDP's 
formulary did not cover it. This would suggest that CMS' current 
approach to enforcing the ``all or substantially all'' policy is 
woefully lacking.
  I should note that beneficiaries often are able to access a drug that 
should be covered on their plan's formulary by filing a coverage 
appeal. However, that process is usually long and difficult to 
complete, and results in the problem only being solved for one 
beneficiary. I appreciate the responsiveness of drug plans to specific 
beneficiaries' difficulties with accessing the drugs they need, but if 
they are not addressing the concerns raised through the appeals process 
on a broader scale, problems will only continue to occur. I believe we 
need a system-wide approach to ensuring that beneficiaries have access 
to the life-saving and life-improving medications they need and I 
believe that solution lies within the legislation I am filing today.
  The Access to Critical Medications Act ACMA would codify, for a 5-
year period, the current policies in CMS existing ``all or 
substantially all'' sub-regulatory guidance. I am hopeful that 
providing this statutory authority will signal to plans that it is no 
longer an option to cover all available drugs in the six protected 
classes. It is a legal requirement that must be adhered to in order to 
participate in Medicare Part D. Accordingly, I would expect that this 
change will empower CMS to take a more proactive role in ensuring that 
prescription drug plan sponsors are not placing arbitrary barriers to 
accessing these critical medications covered by the ``all or 
substantially all'' policy.
  During the 5 year period that the ``all or substantially all'' policy 
will be effective, the ACMA directs CMS to establish a process through 
regulation, that would allow for this important policy to be updated 
and enforced in future years. None of us hold the knowledge of the 
pharmaceutical and medical developments of tomorrow. In a decade, there 
could be major breakthroughs in treating any number of debilitating 
illnesses, which may require the creation of or modification of 
pharmaceutical classes covered by this important policy. CMS needs to 
have the authority to update the classes and categories it covers and 
the process the ACMA creates will provide them the tools to do that.
  In order to use those tools, the ACMA defines specific, clinically-
based criteria that the Secretary must follow when evaluating whether a 
drug class should be added or removed from coverage under the policy. 
This will ensure that there is consistency in the manner by which the 
policy is evaluated in future years, so that the Secretary is not 
arbitrarily determining which medications are important enough so that 
all plans must provide access to them. The ACMA also makes modest 
changes to the appeals process, to ensure that plans and CMS resolve 
beneficiary complaints in a timely manner, and that access to 
medications is guaranteed while the appeals process runs its course.
  The existing ``all or substantially all'' policy was a step in the 
right direction at the time it was created. However, as we approach the 
third year of Medicare's prescription drug benefit, beneficiaries' 
actual experience in the program provides overwhelming support that we 
need a more robust approach to helping vulnerable beneficiaries get the 
medications they need.

[[Page S10157]]

As importantly, CMS must have a regulatory process in place that will 
enable it to modify the classes covered by the policy in response to 
changes in medical and pharmaceutical science. I believe the ACMA 
clearly addresses both those needs, and I hope my colleagues will 
agree. It is a well thought out policy that strikes a careful balance 
between flexibility and enforceability. Advocacy groups such as the 
American Psychiatric Association, the National Alliance for Mental 
Illness, Mental Health America, the AIDS Institute, the HIV Medicine 
Association and the Epilepsy Foundation all contributed to the 
development of ACMA and all now support the finished product. The 
Senate likely will consider Medicare legislation this fall, and I have 
already mentioned to Chairman Baucus that I would like to see this bill 
advance as part of that effort.
  I ask unanimous consent that the text of therbill and letters of 
support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1887

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Medicare Access to Critical 
     Medications Act of 2007''.

     SEC. 2. FORMULARY REQUIREMENTS WITH RESPECT TO CERTAIN 
                   CATEGORIES AND CLASSES OF DRUGS.

       (a) Required Inclusion of Drugs in Certain Categories and 
     Classes.--
       (1) Initial list.--Section 1860D-4(b)(3) of the Social 
     Security Act (42 U.S.C. 1395w-104(b)(3)) is amended--
       (A) in subparagraph (C)(i), by striking ``The formulary'' 
     and inserting ``Subject to subparagraph (G), the formulary''; 
     and
       (B) by inserting after subparagraph (F) the following new 
     subparagraph:
       ``(G) Initial list of required drugs in certain categories 
     and classes.--
       ``(i) In general.--Subject to clause (iv), the formulary 
     must include all or substantially all drugs in the following 
     categories and classes that are available as of April 30 of 
     the year prior to the year which includes the date of 
     enactment of the Medicare Access to Critical Medications Act 
     of 2007:

       ``(I) Immunosuppressant.
       ``(II) Antidepressant.
       ``(III) Antipsychotic.
       ``(IV) Anticonvulsant.
       ``(V) Antiretroviral.
       ``(VI) Antineoplastic.

       ``(ii) Newly approved drugs.--

       ``(I) In general.--In the case of a drug in any of the 
     categories and classes described in subclauses (I) through 
     (VI) of clause (i) that becomes available after the April 30 
     date described in clause (i), the formulary shall include 
     such drug within 30 days of the drug becoming available, 
     except that, in the case of such a drug that becomes 
     available during the period beginning on such April 30 and 
     ending on the date of enactment of the Medicare Access to 
     Critical Medications Act of 2007, the formulary shall include 
     such drug within 30 days of such date of enactment.
       ``(II) Use of formulary management practices and 
     policies.--Nothing in this clause shall be construed as 
     preventing the Pharmacy and Therapeutic Committee of a PDP 
     sponsor from advising such sponsor on the clinical 
     appropriateness of utilizing formulary management practices 
     and policies with respect to a newly approved drug that is 
     required to be included on the formulary under subclause (I).

       ``(iii) Unique dosages and forms.--A PDP sponsor of a 
     prescription drug plan shall include coverage of all unique 
     dosages and forms of drugs required to be included on the 
     formulary pursuant to clause (i) or (ii).
       ``(iv) Sunset.--The provisions of this subparagraph shall 
     not apply after December 31 of the year which includes the 
     date that is 5 years after the date of enactment of the 
     Medicare Access to Critical Medications Act of 2007.''
       (2) Review of drugs covered under the medicare part d 
     prescription drug program.--Section 1860D-4(b)(3) of the 
     Social Security Act (42 U.S.C. 1395w-104(b)(3)), as amended 
     by paragraph (1), is amended--
       (A) in subparagraph (C)(i), by striking ``subparagraph 
     (G)'' and inserting ``subparagraphs (G) and (H)''; and
       (B) by inserting after subparagraph (G) the following new 
     subparagraph:
       ``(H) Required inclusion of drugs in certain categories and 
     classes.--
       ``(i) Required inclusion of drugs in certain categories and 
     classes.--

       ``(I) In general.--Beginning January 1 of the year after 
     the year which includes the date that is 5 years after the 
     date of enactment of the Medicare Access to Critical 
     Medications Act of 2007, PDP sponsors offering prescription 
     drug plans shall be required to include all unique dosages 
     and forms of all or substantially all drugs in certain 
     categories and classes, including the categories and classes 
     described in subclauses (I) through (VI) of subparagraph 
     (G)(i), on the formulary of such plans within 30 days of the 
     drug becoming available.
       ``(II) Regulations.--Not later than January 1 of the year 
     after the year which includes the date that is 4 years after 
     the date of enactment of the Medicare Access to Critical 
     Medications Act of 2007, the Secretary shall issue 
     regulations to carry out this clause.

       ``(ii) Periodic review.--The Secretary shall establish 
     procedures to provide for periodic review of the drugs 
     required to be included on the formulary under clause (i).
       ``(iii) Updating.--

       ``(I) In general.--The Secretary may update the list of 
     drugs required to be included on the formulary under clause 
     (i) if the Secretary determines, in accordance with this 
     clause, that updating such list is appropriate.
       ``(II) Adding categories or classes.--In issuing the 
     regulations under clause (i) and updating the list in order 
     to add a drug in a category or class to the list of drugs 
     required to be included on the formulary under such clause, 
     the Secretary shall consider factors that justify requiring 
     coverage of drugs in a certain category or class, including 
     the following:

       ``(aa) Whether the drugs in a category or class are used to 
     treat a disease or disorder that can cause significant 
     negative clinical outcomes to individuals in a short 
     timeframe.
       ``(bb) Whether there are special or unique benefits with 
     respect to the majority of drugs in a given category or 
     class.
       ``(cc) High predicted drug and medical costs for the 
     diseases or disorders treated by the drugs in a given 
     category or class.
       ``(dd) Whether restricted access to the drugs in the 
     category or class has major clinical consequences for 
     individuals enrolled in a prescription drug plan who have a 
     disease or disorder treated by the drugs in such category or 
     class.
       ``(ee) The potential for the development of discriminatory 
     formulary policies based on the clinical or functional 
     characteristics of such individuals and the high cost of 
     certain drugs in a category or class.
       ``(ff) The need for access to multiple drugs within a 
     category or class due to the unique chemical action and 
     pharmacological effects of drugs within the category or class 
     and any variation in clinical response based on differences 
     in such individuals' metabolism, age, gender, ethnicity, 
     comorbidities, drug-resistance, and severity of disease.
       ``(gg) Any applicable revisions that have been made to 
     widely-accepted clinical practice guidelines endorsed by 
     pertinent medical specialty organizations.

       ``(III) Removal of categories or classes.--In updating the 
     list in order to remove a drug in a category or class from 
     the list of drugs required to be included on the formulary 
     under clause (i), the Secretary may remove a drug from such 
     list in the case where the Secretary determines that widely-
     accepted clinical practice guidelines endorsed by pertinent 
     national medical specialty organizations indicate that, for 
     substantially all drugs in the category or class, restricting 
     access to such drugs is unlikely to result in adverse 
     clinical consequences for individuals with conditions for 
     which the drugs are clinically indicated.''.

       (b) Limitation of Utilization Management Tools for Drugs in 
     Certain Categories and Classes.--Section 1860D-4(c) of the 
     Social Security Act (42 U.S.C. 1395w-104(c)) is amended--
       (1) in paragraph (1)(A), by striking ``A cost-effective'' 
     and inserting ``Subject to paragraph (3), a cost-effective''; 
     and
       (2) by adding at the end the following new paragraph:
       ``(3) Limitation of utilization management tools for drugs 
     in certain categories and classes.--
       ``(A) In general.--A PDP sponsor of a prescription drug 
     plan may not apply a utilization management tool, such as 
     prior authorization or step therapy, to the following:
       ``(i) During the period beginning on the date of enactment 
     of this paragraph and ending on December 31 of the year which 
     includes the date that is 5 years after such date of 
     enactment--

       ``(I) a drug in a category or class described in subsection 
     (b)(3)(G)(i)(V); and
       ``(II) a drug in a category or class described in subclause 
     (I), (II), (III), (IV), or (VI) of subsection (b)(3)(G)(i) in 
     the case where an enrollee was engaged in a treatment regimen 
     using such drug in the 90-day period prior to the date on 
     which such tool would be applied to the drug with respect to 
     the enrollee under the plan or the PDP sponsor is unable to 
     determine if the enrollee was engaged in such a treatment 
     regimen prior to such date.

       ``(ii) Beginning January 1 of the year after the year which 
     includes the date that is 5 years after the date of enactment 
     of this paragraph--

       ``(I) a drug in a category or class described in subsection 
     (b)(3)(G)(i)(V), if such drug is required to be included on 
     the formulary under subsection (b)(3)(H); and
       ``(II) a drug in any other category or class required to be 
     included on the formulary under subsection (b)(3)(H) in the 
     case where an enrollee was engaged in a treatment regimen 
     using such drug in the 90-day period prior to the date on 
     which such tool would be applied to the drug with respect to 
     the enrollee under the plan or the PDP sponsor is unable to 
     determine if the enrollee was engaged in such a treatment 
     regimen prior to such date

       ``(B) Statement of evidence base for application of 
     utilization management

[[Page S10158]]

     tool.--In the case where a utilization management tool is 
     applied to a drug in a category or class required to be 
     included on a plan formulary under subparagraph (G) or (H) of 
     subsection (b)(3), the PDP sponsor of such plan shall provide 
     a statement of the evidence base substantiating the clinical 
     appropriateness of the application of such tool.''.
       (c) Rule of Construction.--Nothing in the provisions of 
     this section, or the amendments made by this section, shall 
     be construed as prohibiting the Secretary of Health and Human 
     Services from issuing guidance or regulations to establish 
     formulary or utilization management requirements under 
     section 1860D-4 of the Social Security Act (42 U.S.C. 1395w-
     104) as long as they do not conflict with such provisions and 
     amendments.
       (d) Effective Date.--The amendments made by this section 
     shall apply to contract years beginning on or after January 
     1, 2008.

     SEC. 3. APPEALS REQUIREMENTS FOR CERTAIN CATEGORIES AND 
                   CLASSES OF DRUGS.

       (a) Coverage Determinations and Reconsideration.--Section 
     1860D-4(g) of the Social Security Act (42 U.S.C. 1395w-
     104(g)) is amended by adding at the end the following new 
     paragraph:
       ``(3) Request for a determination or reconsideration for 
     the treatment of drugs in certain categories and classes.--
       ``(A) In general.--In the case where an individual enrolled 
     in a prescription drug plan disputes a utilization management 
     requirement, an adverse coverage determination, a 
     reconsideration by a PDP sponsor of a prescription drug plan, 
     or an adverse reconsideration by an Independent Review Entity 
     with respect to a covered part D drug in the categories and 
     classes required to be included on the formulary under 
     subparagraph (G) of subsection (b)(3) or under the 
     regulations issued under subparagraph (H) of such subsection, 
     the PDP sponsor shall continue to cover such prescription 
     drug until the date that is not less that 60 days after the 
     latest of the following has occurred:
       ``(i) The enrollee has received written notice of an 
     adverse reconsideration by a PDP sponsor.
       ``(ii) In the case where an enrollee has requested 
     reconsideration by an Independent Review Entity, such Entity 
     has issued an adverse reconsideration.
       ``(iii) In the case where an appeal of such adverse 
     reconsideration has been filed by the individual, an 
     administrative law judge has decided or dismissed the appeal.
       ``(B) Definition of independent review entity.--In this 
     paragraph, the term `Independent Review Entity' means the 
     independent, outside entity the Secretary contracts with 
     under section 1852(g)(4), including such an entity that the 
     Secretary contracts with in order to meet the requirements of 
     such section under section 1860D-4(h)(1).''.
       (b) Appeals.--Section 1860D-4(h) of the Social Security Act 
     (42 U.S.C. 1395w-104(h)) is amended--
       (1) in paragraph (2), by striking ``A part D'' and 
     inserting ``Subject to paragraph (4), a part D''; and
       (2) by adding at the end the following new paragraph:
       ``(4) Treatment of appeals for drugs in certain categories 
     and classes.--
       ``(A) In general.--A part D eligible individual who is 
     enrolled in a prescription drug plan offered by a PDP sponsor 
     may appeal under paragraph (1) a determination by such 
     sponsor not to provide coverage of a covered part D drug in a 
     category or class required to be included on the formulary 
     under subparagraph (G) of subsection (b)(3) or under the 
     regulations issued under subparagraph (H) of such subsection 
     at any time after such determination by requesting a 
     reconsideration by an Independent Review Entity.
       ``(B) Definition of independent review entity.--In this 
     paragraph, the term `Independent Review Entity' has the 
     meaning given such term in subsection (g)(3)(B).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contract years beginning on or after January 
     1, 2008.

     SEC. 4. DATA REPORTING REQUIREMENTS FOR CERTAIN CATEGORIES 
                   AND CLASSES OF DRUGS UNDER THE MEDICARE PART D 
                   PRESCRIPTION DRUG PROGRAM.

       (a) In General.--Section 1860D-4 of the Social Security Act 
     (42 U.S.C. 1395w-104) is amended by adding at the end the 
     following new subsection
       ``(l) Data Reporting for Certain Categories and Classes of 
     Drugs.--
       ``(1) In general.--A PDP sponsor offering a prescription 
     drug plan shall disclose to the Secretary (in a manner 
     specified by the Secretary) data at the plan level on the 
     number of--
       ``(A) favorable and adverse decisions made with respect to 
     exceptions requested to formulary policies--
       ``(i) during the period beginning on the date of enactment 
     of this subsection and ending on December 31 of the year 
     which includes the date that is 5 years after such date of 
     enactment, for each of the categories and classes of drugs 
     described in subclauses (I) through (VI) of subsection 
     (b)(3)(G)(i); and
       ``(ii) beginning January 1 of the year after the year which 
     includes the date that is 5 years after such date of 
     enactment, for each of the categories and classes of drugs 
     required to be included on the formulary under the 
     regulations issued under subsection (b)(3)(H);
       ``(B) favorable and adverse coverage determinations made 
     with respect to each of such categories and classes during 
     the applicable period;
       ``(C) favorable and adverse reconsiderations made by a PDP 
     sponsor with respect to each of such categories and classes 
     during the applicable period;
       ``(D) favorable and adverse reconsiderations made by an 
     Independent Review Entity (as defined in subsection 
     (g)(3)(B)) with respect to each of such categories and 
     classes during the applicable period; and
       ``(E) appeals made to an administrative law judge and the 
     decisions made on such appeals with respect to each of such 
     categories and classes during the applicable period.
       ``(2) Annual report.--The Secretary shall--
       ``(A) submit an annual report to Congress containing the 
     data disclosed to the Secretary under paragraph (1); and
       ``(B) publish such report in the Federal Register.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to contract years beginning on or after January 
     1, 2008.
                                  ____

                                    Access to Critical Medications


                                                    Coalition,

                                                    July 20, 2007.
     Hon. Gordon Smith,
     404 Russell Office Building,
     Washington, DC.
       Dear Senator Smith: We are writing on behalf of the Access 
     to Critical Medications Coalition to offer our strong support 
     for your Medicare Access to Critical Medications Act. The 
     Coalition represents a diverse group of national and 
     community-based patient, provider and advocacy organizations 
     dedicated to ensuring that Medicare beneficiaries with HIV/
     AIDS, mental illnesses, epilepsy, cancer, organ failure, and 
     autoimmune diseases have reliable access through Medicare 
     Part D to the prescriptions that they need to stay healthy.
       The Medicare Access to Critical Medications Act will 
     strengthen protections for these medically vulnerable 
     populations by codifying the requirement that Medicare Part D 
     plans cover ``all or substantially all'' drugs in the six 
     classes of drugs that are critical to treating HIV/AIDS, 
     mental illnesses, cancer, epilepsy, autoimmune diseases such 
     as Crohn's, and transplant patients. As you may know, 
     coverage of nearly all of the drugs in these categories is 
     standard practice among state Medicaid programs and private 
     insurers because it is more cost effective and better for 
     people with these conditions when clinicians have the 
     flexibility to prescribe the drug or drugs most appropriate 
     to manage the condition according to factors unique to them.
       Passage of this bill is important because the current 
     protections for these drug classes offered in Centers for 
     Medicare and Medicaid (CMS) guidance are not guaranteed 
     beyond this year and are being ignored by drug plans with no 
     risk of sanctions. Surveys of HIV and mental health medical 
     providers indicate that Medicare beneficiaries with these 
     conditions have been hospitalized or experienced dangerous 
     treatment interruptions due to challenges with Medicare Part 
     D coverage, including burdensome prior authorization 
     processes. Many of the beneficiaries reporting problems are 
     very low-income and live on Supplemental Security Income 
     (SSI) checks or modest disability payments. Paying out of 
     pocket for drugs denied by Medicare Part D drug plans is not 
     an option for most.
       On behalf of Medicare beneficiaries with these life-
     threatening illnesses, thank you for your leadership in 
     working to ensure access to critical medications through 
     Medicare Part D by requiring drug plans to cover ``all or 
     substantially all'' of the drugs available to treat these 
     serious, but treatable conditions.
                                  ____



                             American Psychiatric Association,

                                     Arlington, VA, July 24, 2007.
     Hon. Gordon Smith,
     U.S. Senate, 404 Russell Senate Office Building, Washington, 
         DC.
       Dear Senator Smith: I am writing on behalf of the American 
     Psychiatric Association (AP A), the medical specialty 
     representing more than 38,000 psychiatric physicians 
     nationwide, to express our strong support for your Medicare 
     Access to Critical Medications Act of 2007.
       This bill will provide crucial protections in the Medicare 
     Part D program for six classes of life-saving medications. 
     Part D drug plans will be required to place substantially all 
     anticancer, HIV/AIDS, and immunosuppressant medications on 
     their formularies, as well as drugs that are important to 
     people with severe mental illnesses--antipsychotics, 
     antidepressants, and anticonvulsants. In addition, when a 
     drug plan and a patient's physician disagree about whether a 
     critical medication is needed, your legislation will require 
     that the medication be covered until the appeals process can 
     be completed.
       Unfortunately, data from the first year of the Part D 
     program point to the need for additional protections for 
     patients with serious diseases. In 2006, an American 
     Psychiatric Institute for Research and Education (APIRE) 
     study tracked 1,193 dually-eligible Medicare/Medicaid 
     psychiatric patients and found that 53.4 percent experienced 
     at least one problem with medication access or continuity. 
     Among these patients, 19.8 percent had a subsequent emergency 
     room visit reported, and 11 percent had a hospitalization.

[[Page S10159]]

     Furthermore, the study found that the most common medication 
     classes with coverage problems included atypical 
     antipsychotics, antidepressants, and anticonvulsants (West, 
     Wilk, Muszynski et al, American Journal of Psychiatry, 164:5 
     May 2007).
       Clearly, Part D patients will receive better care, and the 
     Medicare program as a whole will save money, if access to 
     important medications can be improved. Your legislation will 
     create new statutory protections that will address a number 
     of the most serious barriers.
       We greatly appreciate your leadership--and the hard work of 
     your staff Matthew Canedy and Catherine Finley--in addressing 
     this serious problem.
           Sincerely,
                                      Carolyn B. Robinowitz, M.D.,
                                                        President.
                                 ______
                                 
      By Ms. CANTWELL (for herself, Ms. Snowe, Mr. Inouye, Mr. Stevens, 
        Mr. Lautenberg, and Mr. Lott):
  S. 1892. A bill to reauthorize the Coast Guard for fiscal year 2008, 
and for other purposes; to the Committee on Commerce, Science, and 
Transportation.
  Ms. CANTWELL. Mr. President, I rise today to introduce the Coast 
Guard Authorization Act for the fiscal year 2008 along with Senators 
Snowe, Inouye, Stevens, Lautenberg, and Lott. This comprehensive 
legislation will provide the Coast Guard with needed resources to carry 
out missions critical to our Nation's security, environmental 
protection, and fisheries enforcement.
  The U.S. Coast Guard plays a critical role in keeping our oceans, 
coasts, and waterways safe, secure, and free from environmental harm. 
After September 11 and Hurricane Katrina, the Coast Guard has been a 
source of strength. As marine traffic grows, the number of security 
threats in our ports increases. Climate change is raising the stakes of 
another Katrina happening.
  The Coast Guard faces many challenges, and those serving in the Coast 
Guard routinely serve with discipline and courage. From saving lives 
during natural disasters like Hurricanes Katrina and Rita, to 
protecting our shores in a post-9/11 world, the Coast Guard has served 
America well, and continues to serve us every day.
  Each year, maritime smugglers transport thousands of aliens to the 
U.S. with virtual impunity because the existing law does not 
sufficiently punish or deter such conduct. During fiscal years 2004 and 
2005, over 840 mariners made $13.9 million smuggling people into the 
U.S. illegally. Less than 3 percent of those who were interdicted were 
referred for prosecution.
  This bill gives the Coast Guard the authority it needs to prosecute 
mariners who intentionally smuggle aliens on board their vessels with a 
reckless disregard of our laws. It also provides protection for 
legitimate mariners who encounter stowaways or those who may need 
medical attention.
  Our Nation relies heavily on polar icebreakers to conduct missions in 
the Arctic and Antarctic. They conduct vital research on the oceans and 
climate, resupply U.S. outposts in Antarctica, and provide one of our 
Nation's only platforms for carrying out security and rescue missions 
in some of the world's most rapidly changing environments.
  Currently, the United States' icebreaking capabilities lie with the 
Coast Guard's three vessels: the HEALY; the Polar Sea; and the Polar 
Star. But the fleet is aging rapidly and requires extensive 
maintenance. In fact, the Polar Star is currently not even operational 
because the Coast Guard lacks the resources required to maintain this 
vessel.
  With increased climate change, the role of icebreakers is changing. 
With an ice-free Arctic summer expected by 2050, more and more 
international expeditions will be headed to the region to examine newly 
revealed oil and gas reserves and other natural resources.
  Canada, Russia and other countries will begin to compete with America 
over jurisdiction and, without a strong polar icebreaker fleet, our 
Nation will suffer a severe disadvantage.
  A recent 2007 report by the National Academy of Sciences found that 
the U.S. needs to maintain polar icebreaking capacity and construct at 
least two new polar icebreakers. This bill follows those 
recommendations.
  This bill includes many provisions of the Oil Pollution Prevention 
and Response Act of 2007, which I introduced on June 14, 2007. These 
provisions are vital for the environmental protection of our Nation's 
oceans and coasts. For example, this bill would require improved 
coordination with federally-recognized tribes on oil spill prevention, 
preparedness, and response. It would also address oil spills resulting 
from the transfer of oil to or from vessels, spills resulting from 
human error, and small oil spills that are an all-too-common occurrence 
in many of our waterways.
  For my home State of Washington, it provides a mechanism for year-
round funding of the Neah Bay response tug, a key element of the oil 
spill prevention safety net for Washington State's Olympic Coast. It 
would also increase oil spill preparedness in the Strait of Juan de 
Fuca by changing the definition of ``High Volume Port Line'' so as to 
deliver better incident response throughout Puget Sound.
  The Coast Guard is responsible for ensuring our country's security, 
marine safety and protecting our environment and fisheries. Every day 
the Coast Guard carries out these missions and does so with limited 
resources. It is our job to ensure the Coast Guard has the tools it 
requires to continue getting the job done. This bill will go a long way 
towards that goal. I urge my colleagues to consider this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1892

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Coast Guard Authorization 
     Act for Fiscal Year 2008''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.

                        TITLE I--AUTHORIZATIONS

Sec. 101. Authorization of appropriations.
Sec. 102. Authorized levels of military strength and training.
Sec. 103. Web-based risk management data system.

                         TITLE II--ORGANIZATION

Sec. 201. Vice commandant; vice admirals.
Sec. 202. Merchant Mariner Medical Advisory Committee.
Sec. 203. Authority to distribute funds through grants, cooperative 
              agreements, and contracts to maritime authorities and 
              organizations.
Sec. 204. Assistance to foreign governments and maritime authorities.

                          TITLE III--PERSONNEL

Sec. 301. Emergency leave retention authority.
Sec. 302. Legal assistance for Coast Guard reservists.
Sec. 303. Reimbursement for certain medical-related travel expenses.
Sec. 304. Number and distribution of commissioned officers on the 
              active duty promotion list.
Sec. 305. Reserve commissioned warrant officer to lieutenant program.
Sec. 306. Enhanced status quo officer promotion system.
Sec. 307. Appointment of civilian Coast Guard judges.
Sec. 308. Coast Guard Participation in the Armed Forces Retirement Home 
              (AFRH) System.

                        TITLE IV--ADMINISTRATION

Sec. 401. Cooperative Agreements for Industrial Activities.
Sec. 402. Defining Coast Guard vessels and aircraft.
Sec. 403. Specialized industrial facilities.
Sec. 404. Authority to construct Coast Guard recreational facilities.

                    TITLE V--SHIPPING AND NAVIGATION

Sec. 501. Technical amendments to chapter 313 of title 46, United 
              States Code.
Sec. 502. Clarification of rulemaking authority.
Sec. 503. Coast Guard to maintain LORAN-C navigation system.
Sec. 504. Nantucket Sound ship channel weather buoy.
Sec. 505. Limitation on maritime liens on fishing permits.
Sec. 506. Vessel rebuild determinations.

                   TITLE VI--MARITIME LAW ENFORCEMENT

Sec. 601. Maritime law enforcement.

                  TITLE VII--OIL POLLUTION PREVENTION

Sec. 701. Rulemakings.
Sec. 702. Oil spill response capability.
Sec. 703. Oil transfers from vessels.
Sec. 704. Improvements to reduce human error and near-miss incidents.
Sec. 705. Olympic Coast National Marine Sanctuary.

[[Page S10160]]

Sec. 706. Prevention of small oil spills.
Sec. 707. Improved coordination with tribal governments.
Sec. 708. Report on the availability of technology to detect the loss 
              of oil.
Sec. 709. Use of oil spill liability trust fund.
Sec. 710. International efforts on enforcement.
Sec. 711. Grant project for development of cost-effective detection 
              technologies.
Sec. 712. Higher volume port area regulatory definition change.
Sec. 713. Response tugs.
Sec. 714. Tug escorts for laden oil tankers.
Sec. 715. Extension of financial responsibility.
Sec. 716. Vessel traffic risk assessments.
Sec. 717. Oil spill liability trust fund investment amount.
Sec. 718. Liability for use of unsafe single-hull vessels.

             TITLE VIII--MARITIME HAZARDOUS CARGO SECURITY

Sec. 801. International committee for the safe and secure 
              transportation of especially hazardous cargo.
Sec. 802. Validation of compliance with ISPFC standards.
Sec. 803. Safety and security assistance for foreign ports.
Sec. 804. Coast Guard port assistance program.
Sec. 805. EHC facility risk-based cost sharing.
Sec. 806. Transportation security incident mitigation plan.
Sec. 807. Incident command system training.
Sec. 808. Pre-positioning interoperable communications equipment at 
              interagency operational centers.
Sec. 809. Definitions.

                   TITLE IX--MISCELLANEOUS PROVISIONS

Sec. 901. Marine mammals and sea turtles report.
Sec. 902. Umpqua lighthouse land conveyance.
Sec. 903. Lands to be held in trust.
Sec. 904. Data.
Sec. 905. Extension.
Sec. 906. Forward operating facility.
Sec. 907. Enclosed hangar at Air Station Barbers Point, Hawaii.
Sec. 908. Conveyance of decommissioned Coast Guard Cutter STORIS.
Sec. 909. Conveyance of the Presque Isle Light Station Fresnel Lens to 
              Presque Isle Township, Michigan.
Sec. 910. Repeals.
Sec. 911. Report on ship traffic.
Sec. 912. Small vessel exception from definition of fish processing 
              vessel.
Sec. 913. Right of first refusal for Coast Guard property on Jupiter 
              Island, Florida.
Sec. 914. Ship disposal working group.
Sec. 915. Full multi-mission response station in Valdez, Alaska.
Sec. 916. Protection and fair treatment of seafarers.
Sec. 917. Icebreakers.
Sec. 918. Fur Seal Act authorization.
Sec. 919. Study of relocation of Coast Guard Sector Buffalo facilities.
Sec. 920. Inspector General report on Coast Guard dive program.

                        TITLE I--AUTHORIZATIONS

     SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

       Funds are authorized to be appropriated for necessary 
     expenses of the Coast Guard for fiscal year 2008 as follows:
       (1) For the operation and maintenance of the Coast Guard, 
     $5,894,295,000, of which $24,500,000 is authorized to be 
     derived from the Oil Spill Liability Trust Fund to carry out 
     the purposes of section 1012(a)(5) of the Oil Pollution Act 
     of 1990.
       (2) For the acquisition, construction, renovation, and 
     improvement of aids to navigation, shore and offshore 
     facilities, vessels, and aircraft, including equipment 
     related thereto, $998,068,000, of which $20,000,000 shall be 
     derived from the Oil Spill Liability Trust Fund to carry out 
     the purposes of section 1012(a)(5) of the Oil Pollution Act 
     of 1990, to remain available until expended; such funds 
     appropriated for personnel compensation and benefits and 
     related costs of acquisition, construction, and improvements 
     shall be available for procurement of services necessary to 
     carry out the Integrated Deepwater Systems program.
       (3) For retired pay (including the payment of obligations 
     otherwise chargeable to lapsed appropriations for this 
     purpose), payments under the Retired Serviceman's Family 
     Protection and Survivor Benefit Plans, and payments for 
     medical care of retired personnel and their dependents under 
     chapter 55 of title 10, United States Code, $1,184,720,000.
       (4) For environmental compliance and restoration functions 
     under chapter 19 of title 14, United States Code, 
     $12,079,000.
       (5) For research, development, test, and evaluation 
     programs related to maritime technology, $17,583,000.
       (6) For operation and maintenance of the Coast Guard 
     reserve program, $126,883,000.
       (7) For the construction of a new Chelsea Street Bridge in 
     Chelsea, Massachusetts, $3,000,000.

     SEC. 102. AUTHORIZED LEVELS OF MILITARY STRENGTH AND 
                   TRAINING.

       (a) Active Duty Strength.--The Coast Guard is authorized an 
     end-of-year strength of active duty personnel of 45,500 as of 
     September 30, 2008.
       (b) Military Training Student Loads.--For fiscal year 2008, 
     the Coast Guard is authorized average military training 
     student loads as follows:
       (1) For recruit and special training, 2,500 student years.
       (2) For flight training, 165 student years.
       (3) For professional training in military and civilian 
     institutions, 350 student years.
       (4) For officer acquisition, 1,200 student years.

     SEC. 103. WEB-BASED RISK MANAGEMENT DATA SYSTEM.

       (a) In General.--There are authorized to be appropriated 
     $1,000,000 for each of fiscal years 2008 and 2009 to the 
     Secretary of the department in which the Coast Guard is 
     operating to continue deployment of a World Wide Web-based 
     risk management system to help reduce accidents and 
     fatalities.
       (b) Implementation Status Report.--Within 90 days after the 
     date of enactment of this Act, the Commandant of the Coast 
     Guard shall submit a report to the Senate Committee on 
     Commerce, Science, and Transportation on the status of 
     implementation of the system.

                         TITLE II--ORGANIZATION

     SEC. 201. VICE COMMANDANT; VICE ADMIRALS.

        (a) Vice Commandant.--The fourth sentence of section 47 of 
     title 14, United States Code, is amended by striking ``vice 
     admiral'' and inserting ``admiral''.
       (b) Vice Admirals.--Section 50 of such title is amended to 
     read as follows:

     ``Sec. 50. Vice admirals

       ``(a)(1) The President may designate no more than 4 
     positions of importance and responsibility that shall be held 
     by officers who--
       ``(A) while so serving, shall have the grade of vice 
     admiral, with the pay and allowances of that grade; and
       ``(B) shall perform such duties as the Commandant may 
     prescribe.
       ``(2) The President may appoint, by and with the advice and 
     consent of the Senate, and reappoint, by and with the advice 
     and consent of the Senate, to any such position an officer of 
     the Coast Guard who is serving on active duty above the grade 
     of captain. The Commandant shall make recommendations for 
     such appointments.
       ``(b)(1) The appointment and the grade of vice admiral 
     shall be effective on the date the officer assumes that duty 
     and, except as provided in paragraph (2) of this subsection 
     or in section 51(d) of this title, shall terminate on the 
     date the officer is detached from that duty.
       ``(2) An officer who is appointed to a position designated 
     under subsection (a) shall continue to hold the grade of vice 
     admiral--
       ``(A) while under orders transferring the officer to 
     another position designated under subsection (a), beginning 
     on the date the officer is detached from that duty and 
     terminating on the date before the day the officer assumes 
     the subsequent duty, but not for more than 60 days;
       ``(B) while hospitalized, beginning on the day of the 
     hospitalization and ending on the day the officer is 
     discharged from the hospital, but not for more than 180 days; 
     and
       ``(C) while awaiting retirement, beginning on the date the 
     officer is detached from duty and ending on the day before 
     the officer's retirement, but not for more than 60 days.
       ``(c)(1) An appointment of an officer under subsection (a) 
     does not vacate the permanent grade held by the officer.
       ``(2) An officer serving in a grade above rear admiral who 
     holds the permanent grade of rear admiral (lower half) shall 
     be considered for promotion to the permanent grade of rear 
     admiral as if the officer was serving in the officer's 
     permanent grade.
       ``(d) Whenever a vacancy occurs in a position designated 
     under subsection (a), the Commandant shall inform the 
     President of the qualifications needed by an officer serving 
     in that position or office to carry out effectively the 
     duties and responsibilities of that position or office.''.
       (c) Repeal.--Section 50a of such title is repealed.
       (d) Conforming Amendments.--Section 51 of such title is 
     amended--
       (1) by striking subsections (a), (b), and (c) and inserting 
     the following:
       ``(a) An officer, other than the Commandant, who, while 
     serving in the grade of admiral or vice admiral, is retired 
     for physical disability shall be placed on the retired list 
     with the highest grade in which that officer served.
       ``(b) An officer, other than the Commandant, who is retired 
     while serving in the grade of admiral or vice admiral, or 
     who, after serving at least 2\1/2\ years in the grade of 
     admiral or vice admiral, is retired while serving in a lower 
     grade, may in the discretion of the President, be retired 
     with the highest grade in which that officer served.
        ``(c) An officer, other than the Commandant, who, after 
     serving less than 2\1/2\ years in the grade of admiral or 
     vice admiral, is retired while serving in a lower grade, 
     shall be retired in his permanent grade.''; and
       (2) by striking ``Area Commander, or Chief of Staff'' in 
     subsection (d)(2) and inserting ``or Vice Admiral''.
       (e) Clerical Amendments.--
       (1) The section caption for section 47 of such title is 
     amended to read as follows:

     ``Sec. 47. Vice commandant; appointment''.

       (2) The chapter analysis for chapter 3 of such title is 
     amended--
       (A) by striking the item relating to section 47 and 
     inserting the following:
``47. Vice Commandant; appointment'';

[[Page S10161]]

       (B) by striking the item relating to section 50a; and
       (C) by striking the item relating to section 50 and 
     inserting the following:
``50. Vice admirals''.
       (f) Technical Correction.--Section 47 of such title is 
     further amended by striking ``subsection'' in the fifth 
     sentence and inserting ``section''.

     SEC. 202. MERCHANT MARINER MEDICAL ADVISORY COMMITTEE.

       (a) In General.--Chapter 3 of title 14, United States Code, 
     is amended by adding at the end the following new section:

     ``Sec. 55. Merchant Mariner Medical Advisory Committee

        ``(a) Establishment; Membership; Status.--
       ``(1) There is established a Merchant Mariner Medical 
     Advisory Committee.
       ``(2) The Committee shall consist of 12 members, none of 
     whom shall be a Federal employee--
       ``(A) 10 of whom shall be health-care professionals with 
     particular expertise, knowledge, or experience regarding the 
     medical examinations of merchant mariners or occupational 
     medicine; and
       ``(B) 2 of whom shall be professional mariners with 
     knowledge and experience in mariner occupational 
     requirements.
       ``(3) Members of the Committee shall not be considered 
     Federal employees or otherwise in the service or the 
     employment of the Federal Government, except that members 
     shall be considered special Government employees, as defined 
     in section 202(a) of title 18 and any administrative 
     standards of conduct applicable to the employees of the 
     department in which the Coast Guard is operating.
       ``(b) Appointments; Terms; Vacancies; Organization.--
       ``(1) The Secretary shall appoint the members of the 
     Committee, and each member shall serve at the pleasure of the 
     Secretary.
       ``(2) The members shall be appointed for a term of 3 years, 
     except that, of the members first appointed, 3 members shall 
     be appointed for a term of 2 years and 3 members shall be 
     appointed for a term of 1 year.
       ``(3) Any member appointed to fill the vacancy prior to the 
     expiration of the term for which such member's predecessor 
     was appointed shall be appointed for the remainder of such 
     term.
       ``(4) The Secretary shall designate 1 member as the 
     Chairman and 1 member as the Vice Chairman. The Vice Chairman 
     shall act as Chairman in the absence or incapacity of, or in 
     the event of a vacancy in the office of, the Chairman.
       ``(5) No later than 6 months after the date of enactment of 
     the Coast Guard Authorization Act for Fiscal Year 2008, the 
     Committee shall hold its first meeting.
       ``(c) Function.--The Committee shall advise the Secretary 
     on matters relating to--
       ``(1) medical certification determinations for issuance of 
     merchant mariner credentials;
       ``(2) medical standards and guidelines for the physical 
     qualifications of operators of commercial vessels;
       ``(3) medical examiner education; and
       ``(4) medical research.
       ``(d) Compensation; Reimbursement.--Members of the 
     Committee shall serve without compensation, except that, 
     while engaged in the performance of duties away from their 
     homes or regular places of business of the member, the member 
     of the Committee may be allowed travel expenses, including 
     per diem in lieu of subsistence, as authorized by section 
     5703 of title 5.
       ``(e) Staff; Services.--The Secretary shall furnish to the 
     Committee such personnel and services as are considered 
     necessary for the conduct of its business.''.
       (b) Clerical Amendment.--The analysis for chapter 3 of such 
     title is amended by adding at the end the following:
``55. Merchant Mariner Medical Advisory Committee.''.

     SEC. 203. AUTHORITY TO DISTRIBUTE FUNDS THROUGH GRANTS, 
                   COOPERATIVE AGREEMENTS, AND CONTRACTS TO 
                   MARITIME AUTHORITIES AND ORGANIZATIONS.

       Section 149 of title 14, United States Code, is amended by 
     adding at the end the following:
       ``(c) Grants to International Maritime Organizations.--The 
     Commandant may, after consultation with the Secretary of 
     State, make grants to, or enter into cooperative agreements, 
     contracts, or other agreements with, international maritime 
     organizations for the purpose of acquiring information or 
     data about merchant vessel inspections, security, safety and 
     environmental requirements, classification, and port state or 
     flag state law enforcement or oversight.''.

     SEC. 204. ASSISTANCE TO FOREIGN GOVERNMENTS AND MARITIME 
                   AUTHORITIES.

       Section 149 of title 14, United States Code, is amended by 
     adding at the end the following:
       ``(d) Authorized Activities.--
       ``(1) The Commandant may transfer or expend funds from any 
     appropriation available to the Coast Guard for--
       ``(A) the activities of traveling contact teams, including 
     any transportation expense, translation services expense, or 
     administrative expense that is related to such activities;
       ``(B) the activities of maritime authority liaison teams of 
     foreign governments making reciprocal visits to Coast Guard 
     units, including any transportation expense, translation 
     services expense, or administrative expense that is related 
     to such activities;
       ``(C) seminars and conferences involving members of 
     maritime authorities of foreign governments;
       ``(D) distribution of publications pertinent to engagement 
     with maritime authorities of foreign governments; and
       ``(E) personnel expenses for Coast Guard civilian and 
     military personnel to the extent that those expenses relate 
     to participation in an activity described in subparagraph (C) 
     or (D).
       ``(2) An activity may not be conducted under this 
     subsection with a foreign country unless the Secretary of 
     State approves the conduct of such activity in that foreign 
     country.''.

                          TITLE III--PERSONNEL

     SEC. 301. EMERGENCY LEAVE RETENTION AUTHORITY.

       Section 701(f)(2) of title 10, United States Code, is 
     amended by inserting ``or a declaration of a major disaster 
     or emergency by the President under the Robert T. Stafford 
     Disaster Relief and Emergency Assistance Act (Public Law 93-
     288, 42 U.S.C. 5121 et seq.)'' after ``operation''.

     SEC. 302. LEGAL ASSISTANCE FOR COAST GUARD RESERVISTS.

       Section 1044(a)(4) of title 10, United States Code, is 
     amended--
       (1) by striking ``(as determined by the Secretary of 
     Defense),'' and inserting ``(as determined by the Secretary 
     of Defense and the Secretary of the department in which the 
     Coast Guard is operating, with respect to the Coast Guard 
     when it is not operating as a service of the Navy),''; and
       (2) by striking ``prescribed by the Secretary of Defense,'' 
     and inserting ``prescribed by Secretary of Defense and the 
     Secretary of the department in which the Coast Guard is 
     operating, with respect to the Coast Guard when it is not 
     operating as a service of the Navy,''.

     SEC. 303. REIMBURSEMENT FOR CERTAIN MEDICAL-RELATED TRAVEL 
                   EXPENSES.

       Section 1074i(a) of title 10, United States Code, is 
     amended--
       (1) by striking ``In General.--In'' and inserting ``In 
     General.--(1) In''; and
       (2) by adding at the end the following:
       ``(2) In any case in which a covered beneficiary resides on 
     an INCONUS island that lacks public access roads to the 
     mainland and is referred by a primary care physician to a 
     specialty care provider on the mainland who provides services 
     less than 100 miles from the location in which the 
     beneficiary resides, the Secretary shall reimburse the 
     reasonable travel expenses of the covered beneficiary, and, 
     when accompaniment by an adult is necessary, for a parent or 
     guardian of the covered beneficiary or another member of the 
     covered beneficiary's family who is at least 21 years of 
     age.''.

     SEC. 304. NUMBER AND DISTRIBUTION OF COMMISSIONED OFFICERS ON 
                   THE ACTIVE DUTY PROMOTION LIST.

       (a) In General.--Section 42 of title 14, United States 
     Code, is amended--
       (1) by striking subsections (a), (b), and (c) and inserting 
     the following:
       ``(a) The total number of Coast Guard commissioned officers 
     on the active duty promotion list, excluding warrant 
     officers, shall not exceed 6,700. This total number may be 
     temporarily increased up to 2 percent for no more than the 60 
     days that follow the commissioning of a Coast Guard Academy 
     class.
        ``(b) The total number of commissioned officers authorized 
     by this section shall be distributed in grade not to exceed 
     the following percentages:
       ``(1) 0.375 percent for rear admiral.
       ``(2) 0.375 percent for rear admiral (lower half).
       ``(3) 6.0 percent for captain.
       ``(4) 15.0 percent for commander.
       ``(5) 22.0 percent for lieutenant commander.
     The Secretary shall prescribe the percentages applicable to 
     the grades of lieutenant, lieutenant (junior grade), and 
     ensign. The Secretary may, as the needs of the Coast Guard 
     require, reduce any of the percentages set forth in 
     paragraphs (1) through (5) and apply that total percentage 
     reduction to any other lower grade or combination of lower 
     grades.
       ``(c) The Secretary shall, at least once a year, compute 
     the total number of commissioned officers authorized to serve 
     in each grade by applying the grade distribution percentages 
     of this section to the total number of commissioned officers 
     listed on the current active duty promotion list. In making 
     such calculations, any fraction shall be rounded to the 
     nearest whole number. The number of commissioned officers on 
     the active duty promotion list serving with other departments 
     or agencies on a reimbursable basis or excluded under the 
     provisions of section 324(d) of title 49, shall not be 
     counted against the total number of commissioned officers 
     authorized to serve in each grade.'';
       (2) by striking subsection (e) and inserting the following:
       ``(e) The number of officers authorized to be serving on 
     active duty in each grade of the permanent commissioned 
     teaching staff of the Coast Guard Academy and of the Reserve 
     serving in connection with organizing, administering, 
     recruiting, instructing, or training the reserve components 
     shall be prescribed by the Secretary.''; and
       (3) by striking the caption of such section and inserting 
     the following:

[[Page S10162]]

     ``Sec. 42. Number and distribution of commissioned officers 
       on the active duty promotion list''.

       (b) Clerical Amendment.--The chapter analysis for chapter 3 
     of such title is amended by striking the item relating to 
     section 42 and inserting the following:
``42. Number and distribution of commissioned officers on the active 
              duty promotion list''.

     SEC. 305. RESERVE COMMISSIONED WARRANT OFFICER TO LIEUTENANT 
                   PROGRAM.

       Section 214(a) of title 14, United States Code, is amended 
     to read as follows:
       ``(a) The President may appoint temporary commissioned 
     officers--
       ``(1) in the Regular Coast Guard in a grade, not above 
     lieutenant, appropriate to their qualifications, experience, 
     and length of service, as the needs of the Coast Guard may 
     require, from among the commissioned warrant officers, 
     warrant officers, and enlisted members of the Coast Guard, 
     and from licensed officers of the United States merchant 
     marine; and
       ``(2) in the Coast Guard Reserve in a grade, not above 
     lieutenant, appropriate to their qualifications, experience, 
     and length of service, as the needs of the Coast Guard may 
     require, from among the commissioned warrant officers of the 
     Coast Guard Reserve.''.

     SEC. 306. ENHANCED STATUS QUO OFFICER PROMOTION SYSTEM.

       (a) Section 253(a) of title 14, United States Code, is 
     amended--
       (1) by inserting ``and'' after ``considered,''; and
       (2) by striking ``consideration, and the number of officers 
     the board may recommend for promotion'' and inserting 
     ``consideration''.
       (b) Section 258 of such title is amended--
       (1) by inserting ``(a)'' before ``The Secretary''; and
       (2) by adding at the end the following:
       ``(b) In addition to the information provided pursuant to 
     subsection (a), the Secretary may furnish the selection 
     board--
       ``(1) specific direction relating to the needs of the 
     service for officers having particular skills, including 
     direction relating to the need for a minimum number of 
     officers with particular skills within a specialty; and
       ``(2) such other guidance that the Secretary believes may 
     be necessary to enable the board to properly perform its 
     functions.
     Selections made based on the direction and guidance provided 
     under this subsection shall not exceed the maximum percentage 
     of officers who may be selected from below the announced 
     promotion zone at any given selection board convened under 
     section 251 of this title.''.
       (c) Section 259(a) of such title is amended by striking 
     ``board'' the second place it appears and inserting ``board, 
     giving due consideration to the needs of the service for 
     officers with particular skills so noted in the specific 
     direction furnished pursuant to section 258 of this title,''.
       (d) Section 260(b) of such title is amended by inserting 
     ``to meet the needs of the service (as noted in the specific 
     direction furnished the board under section 258 of this 
     title)'' after ``qualified for promotion''.

     SEC. 307. APPOINTMENT OF CIVILIAN COAST GUARD JUDGES.

       Section 875 of the Homeland Security Act of 2002 (6 U.S.C. 
     455) is amended--
       (1) by redesignating subsection (c) as subsection (d); and
       (2) by inserting after subsection (b) the following:
       ``(c) Appointment of Judges.--The Secretary may appoint 
     civilian employees of the Department of Homeland Security as 
     appellate military judges, available for assignment to the 
     Coast Guard Court of Criminal Appeals as provided for in 
     section 866(a) of title 10, United States Code.''.

     SEC. 308. COAST GUARD PARTICIPATION IN THE ARMED FORCES 
                   RETIREMENT HOME SYSTEM.

       (a) Eligibility under the Armed Forces Retirement Home 
     Act.--Section 1502 of the Armed Forces Retirement Home Act of 
     1991 (24 U.S.C. 401) is amended--
       (1) by striking ``does not include the Coast Guard when it 
     is not operating as a service of the Navy.'' in paragraph (4) 
     and inserting ``has the meaning given such term in section 
     101(4) of title 10.'';
       (2) by striking ``and'' in paragraph (5)(C);
       (3) by striking ``Affairs.'' in paragraph (5)(D) and 
     inserting ``Affairs; and'';
       (4) by adding at the end of paragraph (5) the following:
       ``(E) the Assistant Commandant of the Coast Guard for Human 
     Resources.''; and
       (5) by adding at the end of paragraph (6) the following:
       ``(E) The Master Chief Petty Officer of the Coast Guard.''.
       (b) Deductions.--
       (1) Section 2772 of title 10, United States Code, is 
     amended--
       (A) by striking ``of the military department'' in 
     subsection (a);
       (B) by striking ``Armed Forces Retirement Home Board'' in 
     subsection (b) and inserting ``Chief Operating Officer of the 
     Armed Forces Retirement Home''; and
       (C) by striking subsection (c).
       (2) Section 1007(i) of title 37, United States Code, is 
     amended--
       (A) by striking ``Armed Forces Retirement Home Board'' in 
     paragraph (3) and inserting ``Chief Operating Officer of the 
     Armed Forces Retirement Home''; and
       (B) by striking ``does not include the Coast Guard when it 
     is not operating as a service of the Navy.'' in paragraph (4) 
     and inserting ``has the meaning given such term in section 
     101(4) of title 10.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the first day of the first pay period 
     beginning on or after January 1, 2008.

                        TITLE IV--ADMINISTRATION

     SEC. 401. COOPERATIVE AGREEMENTS FOR INDUSTRIAL ACTIVITIES.

       Section 151 of title 14, United States Code, is amended--
       (1) by inserting ``(a) In General.--'' before ``All 
     orders''; and
       (2) by adding at the end the following:
       ``(b) Orders and Agreements for Industrial Activities.--
     Under this section, the Coast Guard industrial activities may 
     accept orders and enter into reimbursable agreements with 
     establishments, agencies, and departments of the Department 
     of Defense and the Department of Homeland Security.''.

     SEC. 402. DEFINING COAST GUARD VESSELS AND AIRCRAFT.

       (a) In General.--Chapter 17 of title 14, United States 
     Code, is amended by inserting after section 638 the following 
     new section:

     ``Sec. 638a. Coast Guard vessels and aircraft defined

       ``For the purposes of sections 637 and 638 of this title, 
     the term Coast Guard vessels and aircraft means--
       ``(1) any vessel or aircraft owned, leased, transferred to, 
     or operated by the Coast Guard and under the command of a 
     Coast Guard member; and
       ``(2) any other vessel or aircraft under the tactical 
     control of the Coast Guard on which one or more members of 
     the Coast Guard are assigned and conducting Coast Guard 
     missions.''.
       (b) Clerical Amendment.--The chapter analysis for chapter 
     17 of such title is amended by inserting after the item 
     relating to section 638 the following:
``638a. Coast Guard vessels and aircraft defined.''.

     SEC. 403. SPECIALIZED INDUSTRIAL FACILITIES.

       (a) In General.--Section 648 of title 14, United States 
     Code, is amended--
       (1) by striking the section caption and inserting the 
     following:

     ``Sec. 648. Specialized industrial facilities'' ;
       (2) by inserting ``(a) In General.--'' before ``The 
     Secretary''; and
       (3) by adding at the end the following:
        ``(b) Public-private Partnerships or Other Cooperative 
     Arrangements.--
       ``(1) In general.--For purposes of entering into joint 
     public-private partnerships or other cooperative arrangements 
     for the performance of work to provide supplies or services 
     for government use, the Coast Guard Yard, the Aviation Repair 
     and Supply Center, or other similar Coast Guard industrial 
     establishments may--
       ``(A) enter into agreements or other arrangements with 
     public or private entities, foreign or domestic;
       ``(B) pursuant to contracts or other arrangements, receive 
     and retain funds from, or pay funds to, such public or 
     private entities; or
       ``(C) accept contributions of funds, materials, services, 
     or the use of facilities from such public or private 
     entities, subject to regulations promulgated by the Coast 
     Guard.
       ``(2) Accounting for funds received.--Amounts received 
     under this subsection may be credited to the Coast Guard Yard 
     Revolving Fund or other appropriate Coast Guard account.
       ``(3) Reimbursement.--Any partnership, agreement, contract, 
     or arrangement entered into under this section shall require 
     the private entity to reimburse the Coast Guard for such 
     entity's proportional share of the operating and capital 
     costs of maintaining and operating such facility, as 
     determined by the Commandant of the Coast Guard.
       ``(4) Noninterference.--No partnership, agreement, 
     contract, or arrangement entered into under this section may 
     interfere with the performance of any operational or support 
     function of the Coast Guard industrial establishment.''.
       (b) Clerical Amendment.--The chapter analysis for chapter 
     17 of such title is amended by striking item relating to 
     section 648 and inserting the following:
``648. Specialized industrial facilities''.

     SEC. 404. AUTHORITY TO CONSTRUCT COAST GUARD RECREATIONAL 
                   FACILITIES.

       (a) General Authority.--Section 681 of title 14, United 
     States Code, is amended--
       (1) in subsection (a)--
       (A) by striking ``housing or military unaccompanied 
     housing'' and inserting ``housing, military unaccompanied 
     housing, or Coast Guard recreational facilities''; and
       (B) by adding at the end the following:
       ``(3) Coast Guard recreational facilities.''; and
       (2) by striking ``housing or military unaccompanied 
     housing'' in subsection (b) and inserting ``housing, military 
     unaccompanied housing, or Coast Guard recreational 
     facilities''.
       (b) Direct Loans.--Section 682 of such title is amended--
       (1) by inserting after ``military unaccompanied housing'' 
     in subsection (a)(1) the following: ``or facilities that the 
     Secretary determines are suitable for use as Coast Guard 
     recreational facilities''; and
       (2) by inserting after ``military unaccompanied housing'' 
     in subsection (b)(1) the following: ``or facilities that the 
     Secretary determines are suitable for use as Coast Guard 
     recreational facilities''.

[[Page S10163]]

       (c) Leasing of Housing to Be Constructed.--Section 683(a) 
     of such title is amended by striking ``or military 
     unaccompanied housing units'' and inserting ``units, military 
     unaccompanied housing units, or Coast Guard recreational 
     facilities''.
       (d) Limited Partnerships With Eligible Entities.--Section 
     684 of such title is amended--
       (1) by inserting after ``military unaccompanied housing'' 
     in subsection (a) the following: ``or facilities that the 
     Secretary determines are suitable for use as Coast Guard 
     recreational facilities'';
       (2) by striking ``construction of housing, means the total 
     amount of the costs included in the basis of the housing'' in 
     subsection (b)(3) and inserting ``construction of housing or 
     facilities, means the total amount of the costs included in 
     the basis of the housing or facilities''; and
       (3) by inserting ``or facilities'' in subsection (c) after 
     ``housing units''.
       (e) Deposit of Certain Amounts in Coast Guard Housing 
     Fund.--Section 687 of such title is amended--
       (1) in subsection (b)--
       (A) in paragraph (2), by striking ``or unaccompanied 
     housing'' and inserting ``, military unaccompanied housing, 
     or Coast Guard recreational facilities''; and
       (B) in paragraph (3), by striking ``and military 
     unaccompanied housing'' and inserting ``, military 
     unaccompanied housing, and Coast Guard recreational 
     facilities''; and
       (2) by striking ``and military unaccompanied housing 
     units'' in subsection (c)(1) and inserting ``, military 
     unaccompanied housing units, and Coast Guard recreational 
     facilities''.
       (f) Reports.--Section 688 of such title is amended--
       (1) by inserting after ``housing units'' in paragraph (1) 
     the following: ``or Coast Guard recreational facilities''; 
     and
       (2) by striking ``and military unaccompanied housing'' in 
     paragraph (4) and inserting ``, military unaccompanied 
     housing, and Coast Guard recreational facilities''.
       (g) Definitions.--Section 680 of such title is amended--
       (1) by redesignating paragraphs (1) through (5) as 
     paragraphs (2) through (6), respectively;
       (2) by inserting before paragraph (2), as redesignated by 
     paragraph (1) of this subsection, the following:
       ``(1) The term `Coast Guard recreational facilities' means 
     recreation lodging buildings, recreation housing units, and 
     ancillary supporting facilities constructed, maintained, and 
     used by the Coast Guard to provide rest and recreation 
     amenities for military personnel.''; and
       (3) by striking ``housing units and ancillary supporting 
     facilities or the improvement or rehabilitation of existing 
     units'' in paragraph (2), as redesignated by paragraph (1) of 
     this subsection, and inserting ``housing units or Coast Guard 
     recreational facilities and ancillary supporting facilities 
     or the improvement or rehabilitation of existing units or 
     facilities''.

                    TITLE V--SHIPPING AND NAVIGATION

     SEC. 501. TECHNICAL AMENDMENTS TO CHAPTER 313 OF TITLE 46, 
                   UNITED STATES CODE.

       (a) In General.--Chapter 313 of title 46, United States 
     Code, is amended--
       (1) by striking ``of Transportation'' in sections 31302, 
     31306, 31321, 31330, and 31343 each place it appears;
       (2) by striking ``and'' after the semicolon in section 
     31301(5)(F);
       (3) by striking ``office.'' in section 31301(6) and 
     inserting ``office; and''; and
       (4) by adding at the end of section 31301 the following:
       ``(7) `Secretary' means the Secretary of the Department of 
     Homeland Security, unless otherwise noted.''.
       (b) Secretary As Mortgagee.--Section 31308 of such title is 
     amended by striking ``When the Secretary of Commerce or 
     Transportation is a mortgagee under this chapter, the 
     Secretary'' and inserting ``The Secretary of Commerce or 
     Transportation, as a mortgagee under this chapter,''.
       (c) Secretary Of Transportation.--Section 31329(d) of such 
     title is amended by inserting ``of Transportation'' after 
     ``Secretary''.
       (d) Mortgagee.--
       (1) Section 31330(a)(1) of such title is amended--
       (A) by inserting ``or'' after the semicolon in subparagraph 
     (B);
       (B) by striking ``Transportation; or'' in subparagraph (C) 
     and inserting ``Transportation.''; and
       (C) by striking subparagraph (D).
       (2) Section 31330(a)(2) is amended--
       (A) by inserting ``or'' after the semicolon in subparagraph 
     (B);
       (B) by striking ``faith; or'' in subparagraph (C) and 
     inserting ``faith.''; and
       (C) by striking subparagraph (D).

     SEC. 502. CLARIFICATION OF RULEMAKING AUTHORITY.

       (a) In General.--Chapter 701 of title 46, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 70122. Regulations

       ``Unless otherwise provided, the Secretary may issue 
     regulations necessary to implement this chapter.''.
       (b) Clerical Amendment.--The chapter analysis for chapter 
     701 of such title is amended by adding at the end the 
     following new item:
``70122. Regulations''.

     SEC. 503. COAST GUARD TO MAINTAIN LORAN-C NAVIGATION SYSTEM.

       (a) In General.--The Secretary of Transportation shall 
     maintain the LORAN-C navigation system until such time as the 
     Secretary is authorized by statute, explicitly referencing 
     this section, to cease operating the system.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Transportation, in 
     addition to funds authorized under section 101 of this Act 
     for the Coast Guard for operation of the LORAN-C system, for 
     capital expenses related to the LORAN-C infrastructure, 
     $25,000,000 for each of fiscal years 2008 and 2009. The 
     Secretary of Transportation may transfer from the Federal 
     Aviation Administration and other agencies of the Department 
     of Transportation such funds as may be necessary to reimburse 
     the Coast Guard for related expenses.

     SEC. 504. NANTUCKET SOUND SHIP CHANNEL WEATHER BUOY.

       Within 180 days after the date of enactment of this Act, 
     the National Weather Service shall deploy a weather buoy 
     adjacent to the main ship channel of Nantucket Sound.

     SEC. 505. LIMITATION ON MARITIME LIENS ON FISHING PERMITS.

       (a) In General.--Subchapter I of chapter 313 of title 46, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 31310. Limitation on maritime liens on fishing permits

       ``(a) In General.--A maritime lien shall not attach to a 
     permit that--
       ``(1) authorizes use of a vessel to engage in fishing; and
       ``(2) is issued under State or Federal law.
       ``(b) Limitation on Enforcement.--No civil action may be 
     brought to enforce a maritime lien on a permit described in 
     subsection (a).
       ``(c) Limitation on Statutory Construction.--Nothing in 
     subsections (a) and (b) shall be construed as imposing any 
     limitation upon the authority of the Secretary of Commerce to 
     modify, suspend, revoke, or sanction any Federal fishery 
     permit issued by the Secretary of Commerce or to bring a 
     civil action to enforce such modification, suspension, 
     revocation, or sanction.''.
       (b) Clerical Amendment.--The analysis for such chapter is 
     amended by inserting after the item relating to section 31309 
     the following:
``31310. Limitation on maritime liens on fishing permits.''.

     SEC. 506. VESSEL REBUILD DETERMINATIONS.

       (a) In General.--The Secretary of the department in which 
     the Coast Guard is operating shall provide a report on Coast 
     Guard rebuild determinations under section 67.177 of title 
     46, Code of Federal Regulations. Specifically, the report 
     shall provide recommendations for--
       (1) improving the application of the ``major component 
     test'' under such section;
       (2) a review of the application of the steelweight 
     calculation thresholds under such section;
       (3) recommendations for improving transparency in the Coast 
     Guard's foreign rebuild determination process; and
       (4) recommendations on whether or not there should be 
     limits or cumulative caps on the amount of steel work that 
     can be done to the hull and superstructure of a vessel in 
     foreign shipyards over the life of the vessel.
       (b) Report Deadline.--The Secretary shall provide this 
     report to the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Transportation and Infrastructure within 90 days after the 
     enactment of this Act.

                   TITLE VI--MARITIME LAW ENFORCEMENT

     SEC. 601. MARITIME LAW ENFORCEMENT.

       (a) In General.--Subtitle VII of title 46, United States 
     Code, is amended by adding at the end the following:

                ``CHAPTER 707--MARITIME LAW ENFORCEMENT

``Sec.
``70701. Offense
``70702. Attempt or conspiracy
``70703. Affirmative defenses
``70704. Penalties
``70705. Criminal forfeiture
``70706. Civil forfeiture
``70707. Extraterritorial jurisdiction
``70708. Claim of failure to comply with international law; 
              jurisdiction of court
``70709. Federal activities
``70710. Definitions

     ``Sec. 70701. Offense

       ``It shall be unlawful for any person on board a covered 
     vessel to transport or facilitate the transportation, 
     harboring, or concealment of an alien on board such vessel 
     knowing or having reason to believe that the alien is 
     attempting to unlawfully enter the United States.

     ``Sec. 70702. Attempt or conspiracy

       ``Any person on board a covered vessel who attempts or 
     conspires to commit a violation of section 70701 shall be 
     subject to the same penalties as those prescribed for the 
     violation, the commission of which was the object of the 
     attempt or conspiracy.

     ``Sec. 70703. Affirmative defenses

       ``It is an affirmative defense to a prosecution under this 
     section, which the defendant must prove by a preponderance of 
     the evidence, that--
       ``(1)(A) the alien was on board pursuant to a rescue at 
     sea, or was a stowaway; or
       ``(B) the entry into the United States was a necessary 
     response to an imminent threat of death or serious bodily 
     injury to the alien;

[[Page S10164]]

       ``(2) the defendant, as soon as reasonably practicable, 
     informed the Coast Guard of the presence of the alien on the 
     vessel and the circumstances of the rescue; and
       ``(3) the defendant complied with all orders given by law 
     enforcement officials of the United States.

     ``Sec. 70704. Penalties

       ``(a) In General.--Any person who commits a violation of 
     this chapter shall be fined or imprisoned, or both, in 
     accordance with subsection (b) and (c) of this section. For 
     purposes of subsection (b), each individual on board a vessel 
     with respect to whom the violation occurs shall be treated as 
     a separate violation.
       ``(b) Fines.--Any person who commits a violation of this 
     chapter shall be fined not more than $100,000, except that--
       ``(1) in any case in which the violation causes serious 
     bodily injury to any person, regardless of where the injury 
     occurs, the person shall be fined not more than $500,000; and
       ``(2) in any case where the violation causes or results in 
     the death of any person regardless of where the death occurs, 
     the person shall be fined not more than $1,000,000, or both.
       ``(c) Imprisonment.--Any person who commits a violation of 
     this chapter shall be imprisoned for not less than 3 nor more 
     than 20 years, except that--
       ``(1) in any case in which the violation causes serious 
     bodily injury to any person, regardless of where the injury 
     occurs, the person shall be imprisoned for not less than 7 
     nor more than 30 years; and
       ``(2) in any case where the violation causes or results in 
     the death of any person regardless of where the death occurs, 
     the person shall be imprisoned for not less than 10 years nor 
     more than life.

     ``Sec. 70705. Criminal forfeiture

       ``The court, at the time of sentencing a person convicted 
     of an offense under this chapter, shall order forfeited to 
     the United States any vessel used in the offense in the same 
     manner and to the same extent as if it were a vessel used in 
     an offense under section 274 of the Immigration and 
     Nationality Act (8 U.S.C. 1324).

     ``Sec. 70706. Civil forfeiture

       ``A vessel that has been used in the commission of a 
     violation of this chapter shall be seized and subject to 
     forfeiture in the same manner and to the same extent as if it 
     were used in the commission of a violation of section 274(a) 
     of the Immigration and Nationality Act (8 U.S.C. 1324(a)).

     ``Sec. 70707. Extraterritorial jurisdiction

       ``There is extraterritorial jurisdiction of an offense 
     under this chapter.

     ``Sec. 70708. Claim of failure to comply with international 
       law; jurisdiction of court

       ``A claim of failure to comply with international law in 
     the enforcement of this chapter may be invoked as a basis for 
     a defense solely by a foreign nation. A failure to comply 
     with international law shall not divest a court of 
     jurisdiction or otherwise constitute a defense to any 
     proceeding under this chapter.

     ``Sec. 70709. Federal activities

       ``Nothing in this chapter applies to otherwise lawful 
     activities carried out by or at the direction of the United 
     States Government.

     ``Sec. 70710. Definitions

       ``In this chapter:
       ``(1) Alien.--The term `alien' has the meaning given that 
     term in section 70105(f).
       ``(2) Covered vessel.--The term `covered vessel' means a 
     vessel of the United States, or a vessel subject to the 
     jurisdiction of the United States, that is less than 300 
     gross tons (or an alternate tonnage prescribed by the 
     Secretary under section 14104 of this title) as measured 
     under section 14502 of this title.
       ``(3) Serious bodily injury.--The term `serious bodily 
     injury' has the meaning given that term in section 1365 of 
     title 18, United States Code.
       ``(4) United states.--The term `United States' has the 
     meaning given that term in section 2101.
       ``(5) Vessel of the united states.--The term `vessel of the 
     United States' has the meaning given that term in section 
     70502.
       ``(6) Vessel subject to the jurisdiction of the united 
     states.--The term `vessel subject to the jurisdiction of the 
     United States' has the meaning given that term in section 
     70502.''.
       (b) Clerical Amendment.--The analysis for such subtitle is 
     amended by inserting after the item relating to chapter 705 
     the following:
``707. Maritime Law Enforcement...............................70701.''.

                  TITLE VII--OIL POLLUTION PREVENTION

     SEC. 701. RULEMAKINGS.

       (a) Status Report.--
       (1) In general.--Within 90 days after the date of enactment 
     of this Act, the Secretary shall provide a report to the 
     Senate Committee on Commerce, Science, and Transportation and 
     the House of Representatives Committee on Transportation and 
     Infrastructure on the status of all Coast Guard rulemakings 
     required (but for which no final rule has been issued as of 
     the date of enactment of this Act)--
       (A) under the Oil Pollution Act of 1990 (33 U.S.C. 2701 et 
     seq.); and
       (B) for--
       (i) automatic identification systems required under section 
     70114 of title 46, United States Code; and
       (ii) inspection requirements for towing vessels required 
     under section 3306(j) of that title.
       (2) Information required.--The Secretary shall include in 
     the report required by paragraph (1)--
       (A) a detailed explanation with respect to each such 
     rulemaking as to--
       (i) what steps have been completed;
       (ii) what areas remain to be addressed; and
       (iii) the cause of any delays; and
       (B) the date by which a final rule may reasonably be 
     expected to be issued.
       (b) Final Rules.--The Secretary shall issue a final rule in 
     each pending rulemaking under the Oil Pollution Act of 1990 
     (33 U.S.C. 2701 et seq.) as soon as practicable, but in no 
     event later than 18 months after the date of enactment of 
     this Act.

     SEC. 702. OIL SPILL RESPONSE CAPABILITY.

       (a) Safety Standards for Towing Vessels.--In promulgating 
     regulations for towing vessels under chapter 33 of title 46, 
     United States Code, the Secretary of the department in which 
     the Coast Guard is operating shall--
       (1) give priority to completing such regulations for towing 
     operations involving tank vessels; and
       (2) consider the possible application of standards that, as 
     of the date of enactment of this Act, apply to self-propelled 
     tank vessels, and any modifications that may be necessary for 
     application to towing vessels due to ship design, safety, and 
     other relevant factors.
       (b) Reduction of Oil Spill Risk in Buzzards Bay.--No later 
     than January 1, 2008, the Secretary of the department in 
     which the Coast Guard is operating shall promulgate a final 
     rule for Buzzards Bay, Massachusetts, pursuant to the notice 
     of proposed rulemaking published on March 29, 2006, (71 Fed. 
     Reg. 15649), after taking into consideration public comments 
     submitted pursuant to that notice, to adopt measures to 
     reduce the risk of oil spills in Buzzards Bay, Massachusetts.
       (c) Reporting.--The Secretary shall transmit an annual 
     report to the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Resources on the extent to which tank vessels in Buzzards 
     Bay, Massachusetts, are using routes recommended by the Coast 
     Guard.

     SEC. 703. OIL TRANSFERS FROM VESSELS.

       (a) Regulations.--Within 1 year after the date of enactment 
     of this Act, the Secretary shall promulgate regulations to 
     reduce the risks of oil spills in operations involving the 
     transfer of oil from or to a tank vessel. The regulations--
       (1) shall focus on operations that have the highest risks 
     of discharge, including operations at night and in inclement 
     weather; and
       (2) shall consider--
       (A) requirements for use of equipment, such as putting 
     booms in place for transfers;
       (B) operational procedures such as manning standards, 
     communications protocols, and restrictions on operations in 
     high-risk areas; or
       (C) both such requirements and operational procedures.
       (b) Application with State Laws.--The regulations 
     promulgated under subsection (a) do not preclude the 
     enforcement of any State law or regulation the requirements 
     of which are at least as stringent as requirements under the 
     regulations (as determined by the Secretary) that--
       (1) applies in State waters;
       (2) does not conflict with, or interfere with the 
     enforcement of, requirements and operational procedures under 
     the regulations; and
       (3) has been enacted or promulgated before the date of 
     enactment of this Act.

     SEC. 704. IMPROVEMENTS TO REDUCE HUMAN ERROR AND NEAR-MISS 
                   INCIDENTS.

       (a) Report.--Within 1 year after the date of enactment of 
     this Act, the Secretary shall transmit a report to the Senate 
     Committee on Commerce, Science, and Transportation, the 
     Senate Committee on Environment and Public Works, and the 
     House of Representatives Committee on Transportation and 
     Infrastructure that, using available data--
       (1) identifies the types of human errors that, combined, 
     account for over 50 percent of all oil spills involving 
     vessels that have been caused by human error in the past 10 
     years;
       (2) identifies the most frequent types of near-miss oil 
     spill incidents involving vessels such as collisions, 
     groundings, and loss of propulsion in the past 10 years;
       (3) describes the extent to which there are gaps in the 
     data with respect to the information required under 
     paragraphs (1) and (2) and explains the reason for those 
     gaps; and
       (4) includes recommendations by the Secretary to address 
     the identified types of errors and incidents and to address 
     any such gaps in the data.
       (b) Measures.--Based on the findings contained in the 
     report required by subsection (a), the Secretary shall take 
     appropriate action, both domestically and at the 
     International Maritime Organization, to reduce the risk of 
     oil spills from human errors.

     SEC. 705. OLYMPIC COAST NATIONAL MARINE SANCTUARY.

       (a) Olympic Coast National Marine Sanctuary Area to be 
     Avoided.--The Secretary and the Under Secretary of Commerce 
     for Oceans and Atmosphere shall revise the area

[[Page S10165]]

     to be avoided off the coast of the State of Washington so 
     that restrictions apply to all vessels required to prepare a 
     response plan under section 311(j) of the Federal Water 
     Pollution Control Act (33 U.S.C. 1321(j)) (other than fishing 
     or research vessels while engaged in fishing or research 
     within the area to be avoided).
       (b) Emergency Oil Spill Drill.--
       (1) In general.--In cooperation with the Secretary, the 
     Under Secretary of Commerce for Oceans and Atmosphere shall 
     conduct a Safe Seas oil spill drill in the Olympic Coast 
     National Marine Sanctuary in fiscal year 2008. The Secretary 
     and the Under Secretary of Commerce for Oceans and Atmosphere 
     jointly shall coordinate with other Federal agencies, State, 
     local, and tribal governmental entities, and other 
     appropriate entities, in conducting this drill.
       (2) Other required drills.--Nothing in this subsection 
     supersedes any Coast Guard requirement for conducting 
     emergency oil spill drills in the Olympic Coast National 
     Marine Sanctuary. The Secretary shall consider conducting 
     regular field exercises, such as National Preparedness for 
     Response Exercise Program (PREP) in other national marine 
     sanctuaries.
       (3) Authorization of appropriations.--There are authorized 
     to be appropriated to the Under Secretary of Commerce for 
     Oceans and Atmosphere for fiscal year 2008 $700,000 to carry 
     out this subsection.

     SEC. 706. PREVENTION OF SMALL OIL SPILLS.

       (a) In General.--The Under Secretary of Commerce for Oceans 
     and Atmosphere, in consultation with other appropriate 
     agencies, shall establish an oil spill prevention and 
     education program for small vessels. The program shall 
     provide for assessment, outreach, and training and voluntary 
     compliance activities to prevent and improve the effective 
     response to oil spills from vessels and facilities not 
     required to prepare a vessel response plan under the Federal 
     Water Pollution Control Act, including recreational vessels, 
     commercial fishing vessels, marinas, and aquaculture 
     facilities. The Under Secretary may provide grants to sea 
     grant colleges and institutes designated under section 207 of 
     the National Sea Grant College Program Act (33 U.S.C. 1126) 
     and to State agencies, tribal governments, and other 
     appropriate entities to carry out--
       (1) regional assessments to quantify the source, incidence 
     and volume of small oil spills, focusing initially on regions 
     in the country where, in the past 10 years, the incidence of 
     such spills is estimated to be the highest;
       (2) voluntary, incentive-based clean marina programs that 
     encourage marina operators, recreational boaters and small 
     commercial vessel operators to engage in environmentally 
     sound operating and maintenance procedures and best 
     management practices to prevent or reduce pollution from oil 
     spills and other sources;
       (3) cooperative oil spill prevention education programs 
     that promote public understanding of the impacts of spilled 
     oil and provide useful information and techniques to minimize 
     pollution including methods to remove oil and reduce oil 
     contamination of bilge water, prevent accidental spills 
     during maintenance and refueling and properly cleanup and 
     dispose of oil and hazardous substances; and
       (4) support for programs, including outreach and education 
     to address derelict vessels and the threat of such vessels 
     sinking and discharging oil and other hazardous substances, 
     including outreach and education to involve efforts to the 
     owners of such vessels.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Under Secretary of Commerce for 
     Oceans and Atmosphere to carry out this section, $10,000,000 
     annually for each of fiscal years 2008 through 2012.

     SEC. 707. IMPROVED COORDINATION WITH TRIBAL GOVERNMENTS.

       (a) In General.--Within 6 months after the date of 
     enactment of this Act, the Secretary shall complete the 
     development of a tribal consultation policy, which recognizes 
     and protects to the maximum extent practicable tribal treaty 
     rights and trust assets in order to improve the Coast Guard's 
     consultation and coordination with the tribal governments of 
     federally recognized Indian tribes with respect to oil spill 
     prevention, preparedness, response and natural resource 
     damage assessment.
       (b) National Planning.--The Secretary shall assist tribal 
     governments to participate in the development and capacity to 
     implement the National Contingency Plan and local Area 
     Contingency Plans to the extent they affect tribal lands, 
     cultural and natural resources. The Secretary shall ensure 
     that in regions where oil spills are likely to have an impact 
     on natural or cultural resources owned or utilized by a 
     federally recognized Indian tribe, the Coast Guard will--
       (1) ensure that representatives of the tribal government of 
     the potentially affected tribes are included as part of the 
     regional response team cochaired by the Coast Guard and the 
     Environmental Protection Agency to establish policies for 
     responding to oil spills; and
       (2) provide training of tribal incident commanders and 
     spill responders.
       (c) Inclusion of Tribal Government.--The Secretary shall 
     ensure that, as soon as practicable after identifying an oil 
     spill that is likely to have an impact on natural or cultural 
     resources owned or utilized by a federally recognized Indian 
     tribe, the Coast Guard will--
       (1) ensure that representatives of the tribal government of 
     the affected tribes are included as part of the incident 
     command system established by the Coast Guard to respond to 
     the spill;
       (2) share information about the oil spill with the tribal 
     government of the affected tribe; and
       (3) to the extent practicable, involve tribal governments 
     in deciding how to respond to such spill.
       (d) Cooperative Arrangements.--The Coast Guard may enter 
     into memoranda of agreement and associated protocols with 
     Indian tribal governments in order to establish cooperative 
     arrangements for oil pollution prevention, preparedness, and 
     response. Such memoranda may be entered into prior to the 
     development of the tribal consultation and coordination 
     policy to provide Indian tribes grant and contract assistance 
     and may include training for preparedness and response and 
     provisions on coordination in the event of a spill. As part 
     of these memoranda of agreement, the Secretary may carry out 
     demonstration projects to assist tribal governments in 
     building the capacity to protect tribal treaty rights and 
     trust assets from oil spills to the maximum extent possible.
       (e) Funding for Tribal Participation.--Subject to the 
     availability of appropriations, the Commandant of the Coast 
     Guard shall provide assistance to participating tribal 
     governments in order to facilitate the implementation of 
     cooperative arrangements under subsection (d) and ensure the 
     participation of tribal governments in such arrangements. 
     There are authorized to be appropriated to the Commandant 
     $500,000 for each of fiscal years 2008 through 2012 to be 
     used to carry out this section.

     SEC. 708. REPORT ON THE AVAILABILITY OF TECHNOLOGY TO DETECT 
                   THE LOSS OF OIL.

       Within 1 year after the date of enactment of this Act, the 
     Secretary shall submit a report to the Senate Committee on 
     Commerce, Science, and Transportation and the House of 
     Representatives Committee on Energy and Commerce on the 
     availability, feasibility, and potential cost of technology 
     to detect the loss of oil carried as cargo or as fuel on tank 
     and non-tank vessels greater than 400 gross tons.

     SEC. 709. USE OF OIL SPILL LIABILITY TRUST FUND.

       Section 1012(a)(5) of the Oil Pollution Act of 1990 (33 
     U.S.C. 2712(a)(5)) is amended--
       (1) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (C) and (D), respectively; and
       (2) by inserting after subparagraph (A) the following:
       ``(B) not more than $15,000,000 in each fiscal year shall 
     be available to the Under Secretary of Commerce for Oceans 
     and Atmosphere for expenses incurred by, and activities 
     related to, response and damage assessment capabilities of 
     the National Oceanic and Atmospheric Administration;''.

     SEC. 710. INTERNATIONAL EFFORTS ON ENFORCEMENT.

       The Secretary, in consultation with the heads of other 
     appropriate Federal agencies, shall ensure that the Coast 
     Guard pursues stronger enforcement in the International 
     Maritime Organization of agreements related to oil 
     discharges, including joint enforcement operations, training, 
     and stronger compliance mechanisms.

     SEC. 711. GRANT PROJECT FOR DEVELOPMENT OF COST-EFFECTIVE 
                   DETECTION TECHNOLOGIES.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, the Commandant shall establish a grant 
     program for the development of cost-effective technologies, 
     such as infrared, pressure sensors, and remote sensing, for 
     detecting discharges of oil from vessels as well as methods 
     and technologies for improving detection and recovery of 
     submerged and sinking oils.
       (b) Matching Requirement.--The Federal share of any project 
     funded under subsection (a) may not exceed 50 percent of the 
     total cost of the project.
       (c) Report to Congress.--Not later than 3 years after the 
     date of enactment of this Act the Secretary shall provide a 
     report to the Senate Committee on Commerce, Science, and 
     Transportation, and to the House of Representatives Committee 
     on Transportation and Infrastructure on the results of the 
     program.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Commandant to carry out this 
     section $2,000,000 for each of fiscal years 2008, 2009, and 
     2010, to remain available until expended.
       (e) Transfer Prohibited.--Administration of the program 
     established under subsection (a) may not be transferred 
     within the Department of Homeland Security or to another 
     department or Federal agency.

     SEC. 712. HIGHER VOLUME PORT AREA REGULATORY DEFINITION 
                   CHANGE.

       (a) In General.--Within 30 days after the date of enactment 
     of this Act, notwithstanding subchapter 5 of title 5, United 
     States Code, the Commandant shall modify the definition of 
     the term ``higher volume port area'' in section 155.1020 of 
     the Coast Guard regulations (33 C.F.R. 155.1020) by striking 
     ``Port Angeles, WA'' in paragraph (13) of that section and 
     inserting ``Cape Flattery, WA'' without initiating a 
     rulemaking proceeding.
       (b) Emergency Response Plan Reviews.--Within 5 years after 
     the date of enactment of

[[Page S10166]]

     this Act, the Coast Guard shall complete its review of any 
     changes to emergency response plans pursuant to the Federal 
     Water Pollution Control Act (33 U.S.C. 1251 et seq.) 
     resulting from the modification of the higher volume port 
     area definition required by subsection (a).

     SEC. 713. RESPONSE TUGS.

       (a) In General.--Paragraph (5) of section 311(j) of the 
     Federal Water Pollution Control Act (33 U.S.C. 1321(j)) is 
     amended by adding at the end the following:
       ``(J) Response tug.--
       ``(i) In general.--The Secretary shall require the 
     stationing of a year round response tug of a minimum of 70-
     tons bollard pull in the entry to the Strait of Juan de Fuca 
     at Neah Bay capable of providing rapid assistance and towing 
     capability to disabled vessels during severe weather 
     conditions.
       ``(ii) Shared resources.--The Secretary may authorize 
     compliance with the response tug stationing requirement of 
     clause (i) through joint or shared resources between or among 
     entities to which this subsection applies.
       ``(iii) Existing state authority not affected.--Nothing in 
     this subparagraph supersedes or interferes with any existing 
     authority of a State with respect to the stationing of rescue 
     tugs in any area under State law or regulations.
       ``(iv) Administration.--In carrying out this subparagraph, 
     the Secretary--

       ``(I) shall require the vessel response plan holders to 
     negotiate and adopt a cost-sharing formula and a schedule for 
     carrying out this subparagraph by no later than June 1, 2008;
       ``(II) shall establish a cost-sharing formula and a 
     schedule for carrying out this subparagraph by no later than 
     July 1, 2008 (without regard to the requirements of chapter 5 
     of title 5, United States Code) if the vessel response plan 
     holders fail to adopt the cost-sharing formula and schedule 
     required by subclause (I) of this clause by June 1, 2008; and
       ``(III) shall implement clauses (i) and (ii) of this 
     subparagraph by June 1, 2008, without a rulemaking and 
     without regard to the requirements of chapter 5 of title 5, 
     United States Code.

       ``(v) Long term tug capabilities.--Within 6 months after 
     implementing clauses (i) and (ii), and section 707 of the 
     Coast Guard Authorization Act for Fiscal Year 2008, the 
     Secretary shall execute a contract with the National Academy 
     of Sciences to conduct a study of regional response tug and 
     salvage needs for Washington's Olympic coast. In developing 
     the scope of the study, the National Academy of Sciences 
     shall consult with Federal, State, and Tribal trustees as 
     well as relevant stakeholders. The study--

       ``(I) shall define the needed capabilities, equipment, and 
     facilities for a response tug in the entry to the Strait of 
     Juan de Fuca at Neah Bay in order to optimize oil spill 
     protection on Washington's Olympic coast, provide rescue 
     towing services, oil spill response, and salvage and fire-
     fighting capabilities;
       ```(II) shall analyze the tug's multi-mission capabilities 
     as well as its ability to utilize cached salvage, oil spill 
     response, and oil storage equipment while responding to a 
     spill or a vessel in distress and make recommendations as to 
     the placement of this equipment;
       ``(III) shall address scenarios that consider all vessel 
     types and weather conditions and compare current Neah Bay tug 
     capabilities, costs, and benefits with other United States 
     industry funded response tugs, including those currently 
     operating in Alaska's Prince William Sound;
       ``(IV) shall determine whether the current level of 
     protection afforded by the Neah Bay response tug and 
     associated response equipment is comparable to protection in 
     other locations where response tugs operate, including Prince 
     William Sound, and if it is not comparable, shall make 
     recommendations as to how capabilities, equipment, and 
     facilities should be modified to achieve optimum 
     protection.''.

       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary for fiscal year 2008 such 
     sums as necessary to carry out section 311(j)(5)(J)(v) of the 
     Federal Water Pollution Control Act (33 U.S.C. 
     1321(j)(5)(J)(v)).

     SEC. 714. TUG ESCORTS FOR LADEN OIL TANKERS.

       Within 1 year after the date of enactment of this Act, the 
     Secretary of State, in consultation with the Commandant, 
     shall enter into negotiations with the Government of Canada 
     to ensure that tugboat escorts are required for all tank 
     ships with a capacity over 40,000 deadweight tons in the 
     Strait of Juan de Fuca, Strait of Georgia, and in Haro 
     Strait. The Commandant shall consult with the State of 
     Washington and affected tribal governments during 
     negotiations with the Government of Canada.

     SEC. 715. EXTENSION OF FINANCIAL RESPONSIBILITY.

       Section 1016(a) of the Oil Pollution Act of 1990 (33 U.S.C. 
     2716(a)) is amended--
       (1) by striking ``or'' after the semicolon in paragraph 
     (1);
       (2) by inserting ``or'' after the semicolon in paragraph 
     (2); and
       (3) by inserting after paragraph (2) the following:
       ``(3) any tank vessel over 100 gross tons (except a non-
     self-propelled vessel that does not carry oil as cargo) using 
     any place subject to the jurisdiction of the United 
     States;''.

     SEC. 716. VESSEL TRAFFIC RISK ASSESSMENTS.

       (a) Requirement.--The Commandant of the Coast guard, acting 
     through the appropriate Area Committee established under 
     section 311(j)(4) of the Federal Water Pollution Control Act, 
     shall prepare a vessel traffic risk assessment--
       (1) for Cook Inlet, Alaska, within 1 year after the date of 
     enactment of this Act; and
       (2) for the Aleutian Islands, Alaska, within 2 years after 
     the date of enactment of this Act.
       (b) Contents.--Each of the assessments shall describe, for 
     the region covered by the assessment--
       (1) the amount and character of present and estimated 
     future shipping traffic in the region; and
       (2) the current and projected use and effectiveness in 
     reducing risk, of--
       (A) traffic separation schemes and routing measures;
       (B) long-range vessel tracking systems developed under 
     section 70115 of title 46, United States Code;
       (C) towing, response, or escort tugs;
       (D) vessel traffic services;
       (E) emergency towing packages on vessels;
       (F) increased spill response equipment including equipment 
     appropriate for severe weather and sea conditions;
       (G) the Automatic Identification System developed under 
     section 70114 of title 46, United States Code;
       (H) particularly sensitive sea areas, areas to be avoided, 
     and other traffic exclusion zones;
       (i) aids to navigation; and
       (J) vessel response plans.
       (c) Recommendations.--
       (1) In general.--Each of the assessments shall include any 
     appropriate recommendations to enhance the safety and 
     security, or lessen potential adverse environmental impacts, 
     of marine shipping.
       (2) Consultation.--Before making any recommendations under 
     paragraph (1) for a region, the Area Committee shall consult 
     with affected local, State, and Federal government agencies, 
     representatives of the fishing industry, Alaska Natives from 
     the region, the conservation community, and the merchant 
     shipping and oil transportation industries.
       (d) Provision to Congress.--The Commandant shall provide a 
     copy of each assessment to the Senate Committee on Commerce, 
     Science, and Transportation and the House of Representatives 
     Committee on Transportation and Infrastructure.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Commandant $1,800,000 for each of 
     fiscal years 2008 and 2009 to conduct the assessments.

     SEC. 717. OIL SPILL LIABILITY TRUST FUND INVESTMENT AMOUNT.

       Within 30 days after the date of enactment of this Act, the 
     Secretary of the Treasury shall increase the amount invested 
     in income producing securities under section 5006(b) of the 
     Oil Pollution Act of 1990 (33 U.S.C. 2736(b)) by 
     $12,851,340..

     SEC. 718. LIABILITY FOR USE OF UNSAFE SINGLE-HULL VESSELS.

       Section 1001(32) of the Oil Pollution Act of 1990 (33 
     U.S.C. 2701(32)) is amended by striking subparagraph (A) and 
     inserting the following:
       ``(A) Vessels.--In the case of a vessel (other than a 
     vessel described in section 3703a(b) of title 46, United 
     States Code)--
       ``(i) any person owning, operating, or demise chartering 
     the vessel; and
       ``(ii) the owner of oil being transported in a tank vessel 
     with a single hull after December 31, 2010, if the owner of 
     the oil knew, or should have known, from publicly available 
     information that the vessel had a poor safety or operational 
     record.''.

             TITLE VIII--MARITIME HAZARDOUS CARGO SECURITY

     SEC. 801. INTERNATIONAL COMMITTEE FOR THE SAFE AND SECURE 
                   TRANSPORTATION OF ESPECIALLY HAZARDOUS CARGO.

       (a) In General.--Chapter 701 of title 46, United States 
     Code, is amended by inserting after section 70109 the 
     following:

     ``Sec. 70109A. International committee for the safe and 
       secure transportation of especially hazardous cargo

       ``(a) In General.--The Secretary, in consultation with the 
     Secretary of State and other appropriate entities, shall, in 
     a manner consistent with international treaties, conventions, 
     and agreements to which the United States is a party, 
     establish a committee within the International Maritime 
     Organization that includes representatives of United States 
     trading partners that supply tank or break-bulk shipments of 
     especially hazardous cargo to the United States.
       ``(b) Safe and Secure Loading, Unloading, and 
     Transportation of Especially Hazardous Cargoes.--In carrying 
     out this section, the Secretary, in cooperation with the 
     International Maritime Organization and in consultation with 
     the International Standards Organization and shipping 
     industry stakeholders, shall develop protocols, procedures, 
     standards, and requirements for receiving, handling, loading, 
     unloading, vessel crewing, and transportation of especially 
     hazardous cargo to promote the safe and secure operation of 
     ports, facilities, and vessels that transport especially 
     hazardous cargo to the United States.
       ``(c) Deadlines.--The Secretary shall--
       ``(1) initiate the development of the committee within 180 
     days after the date of enactment of the Maritime Hazardous 
     Cargo Security Act; and

[[Page S10167]]

       ``(2) endeavor to have the protocols, procedures, 
     standards, and requirements developed by the committee take 
     effect within 3 years after the date of enactment of that 
     Act.
       ``(d) Reports.--The Secretary shall report annually to the 
     Senate Committee on Commerce, Science, and Transportation, 
     the House of Representatives Committee on Transportation and 
     Infrastructure, and the House of Representatives Committee on 
     Homeland Security on the development, implementation, and 
     administration of the protocols, procedures, standards, and 
     requirements developed by the committee established under 
     subsection (a).''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     701 of title 46, United States Code, is amended by inserting 
     after the item relating the section 70109 the following:

``70109A. International committee for the safe and secure 
              transportation of especially hazardous cargo''.

     SEC. 802. VALIDATION OF COMPLIANCE WITH ISPFC STANDARDS.

       (a) In General.--Chapter 701 of title 46, United States 
     Code, is amended by inserting after section 70110 the 
     following:

     ``70110A. Port safety and security validations

       ``(a) In General.--The Secretary, in consultation with the 
     Secretary of State, shall, in a manner consistent with 
     international treaties, conventions, and agreements to which 
     the United States is a party, develop and implement a 
     voluntary program under which foreign ports and facilities 
     can certify their compliance with applicable International 
     Ship and Port Facility Code standards.
       ``(b) Third-party Validation.--
       ``(1) In general.--In carrying out this section, the 
     Secretary, in cooperation with the International Maritime 
     Organization and the International Standards Organization, 
     shall develop and implement a program under which 
     independent, third-party entities are certified to validate a 
     foreign port's or facility's compliance under the program 
     developed under subsection (a).
       ``(2) Program components.--The international program shall 
     include--
       ``(A) international inspection protocols and procedures;
       ``(B) minimum validation standards to ensure a port or 
     facility meets the applicable International Ship and Port 
     Facility Code standards;
       ``(C) recognition for foreign ports or facilities that 
     exceed the minimum standards;
       ``(D) uniform performance metrics by which inspection 
     validations are to be conducted;
       ``(E) a process for notifying a port or facility, and its 
     host nation, of areas of concern about the port's or 
     facility's failure to comply with International Ship and Port 
     Facility Code standards;
       ``(F) provisional or probationary validations;
       ``(G) conditions under which routine monitoring is to occur 
     if a port or facility receives a provisional or probationary 
     validation;
       ``(H) a process by which failed validations can be 
     appealed; and
       ``(I) an appropriate cycle for re-inspection and 
     validation.
       ``(c) Certification of Third Party Entities.--The Secretary 
     may not certify a third party entity to validate ports or 
     facilities under subsection (b) unless--
       ``(1) the entity demonstrates to the satisfaction of the 
     Secretary the ability to perform validations in accordance 
     with the standards, protocols, procedures, and requirements 
     established by the program implemented under subsection (a); 
     and
       ``(2) the entity has no beneficial interest in or any 
     direct control over the port and facilities being inspected 
     and validated.
       ``(d) Monitoring--The Secretary shall regularly monitor and 
     audit the operations of each third party entity conducting 
     validations under this section to ensure that it is meeting 
     the minimum standards, operating protocols, procedures, and 
     requirements established by international agreement.
       ``(e) Revocation.--The Secretary shall revoke the 
     certification of any entity determined by the Secretary not 
     to meet the minimum standards, operating protocol, 
     procedures, and requirements established by international 
     agreement for third party entity validations.
       ``(f) Protection of Security and Proprietary Information.--
     In carrying out this section, the Secretary shall take 
     appropriate actions to protect from disclosure information 
     that--
       ``(1) is security sensitive, proprietary, or business 
     sensitive; or
       ``(2) is otherwise not appropriately in the public domain.
       ``(g) Deadlines.--The Secretary shall--
       ``(1) initiate procedures to carry out this section within 
     180 days after the date of enactment of the Maritime 
     Hazardous Cargo Security Act; and
       ``(2) develop standards under subsection (b) for third 
     party validation within 2 years after the date of enactment 
     of that Act.
       ``(h) Reports.--The Secretary shall report annually to the 
     Senate Committee on Commerce, Science, and Transportation, 
     the House of Representatives Committee on Transportation and 
     Infrastructure, and the House of Representatives Committee on 
     Homeland Security on activities conducted pursuant to this 
     section.''.
       (c) Conforming Amendment.--The chapter analysis for chapter 
     701 of title 46, United States Code, is amended by inserting 
     after the item relating to section 70110 the following:

``70110A. Port safety and security validations''.

     SEC. 803. SAFETY AND SECURITY ASSISTANCE FOR FOREIGN PORTS.

       (a) In General.--Section 70110(e)(1) of title 46, United 
     States Code, is amended by striking the second sentence and 
     inserting the following: ``The Secretary shall establish a 
     strategic plan to utilize those assistance programs to assist 
     ports and facilities that are found by the Secretary under 
     subsection (a) not to maintain effective antiterrorism 
     measures in the implementation of port security antiterrorism 
     measures.''.
       (b) Conforming Amendments.--
       (1) Section 70110 of title 46, United States Code, is 
     amended--
       (A) by inserting ``or facilities'' after ``ports'' in the 
     section heading;
       (B) by inserting ``or facility'' after ``port'' each place 
     it appears; and
       (C) by striking ``Ports'' in the heading for subsection (e) 
     and inserting ``Ports, Facilities,''.
       (2) The chapter analysis for chapter 701 of title 46, 
     United States Code, is amended by striking the item relating 
     to section 70110 and inserting the following:

``70110. Actions and assistance for foreign ports or facilities and 
              United States territories''.

     SEC. 804. COAST GUARD PORT ASSISTANCE PROGRAM.

       Section 70110 of title 46, United States Code, is amended 
     by adding at the end thereof the following:
       ``(f) Coast Guard Assistance Program.--
       ``(1) In general.--The Secretary may lend, lease, donate, 
     or otherwise provide equipment, and provide technical 
     training and support, to the owner or operator of a foreign 
     port or facility--
       ``(A) to assist in bringing the port or facility into 
     compliance with applicable International Ship and Port 
     Facility Code standards;
       ``(B) to assist the port or facility in meeting standards 
     established under section 70109A of this chapter; and
       ``(C) to assist the port or facility in exceeding the 
     standards described in subparagraph (A) and (B).
       ``(2) Conditions.--The Secretary--
       ``(A) shall provide such assistance based upon an 
     assessment of the risks to the security of the United States 
     and the inability of the owner or operator of the port or 
     facility otherwise to bring the port or facility into 
     compliance with those standards and to maintain compliance 
     with them;
       ``(B) may not provide such assistance unless the facility 
     or port has been subjected to a comprehensive port security 
     assessment by the Coast Guard or a third party entity 
     certified by the Secretary under section 70110A(b) to 
     validate foreign port or facility compliance with 
     International Ship and Port Facility Code standards; and
       ``(C) may only lend, lease, or otherwise provide equipment 
     that the Secretary has first determined is not required by 
     the Coast Guard for the performance of its missions.''.

     SEC. 805. EHC FACILITY RISK-BASED COST SHARING.

       The Commandant shall identify facilities sited or 
     constructed on or adjacent to the navigable waters of the 
     United States that receive, handle, load, or unload 
     especially hazardous cargos that pose a risk greater than an 
     acceptable risk threshold, as determined by the Secretary 
     under a uniform risk assessment methodology. The Secretary 
     may establish a security cost-share plan to assist the Coast 
     Guard in providing security for the transportation of 
     especially hazardous cargo to such facilities.

     SEC. 806. TRANSPORTATION SECURITY INCIDENT MITIGATION PLAN.

       Section 70103(b)(2) of title 46, United States Code, is 
     amended--
       (1) by redesignating subparagraphs (E) through (G) as 
     subparagraphs (F) through (H), respectively; and
       (2) by inserting after subparagraph (D) the following:
       ``(E) establish regional response and recovery protocols to 
     prepare for, respond to, mitigate against, and recover from a 
     transportation security incident consistent with section 202 
     of the Security and Accountability for Every Port Act of 2006 
     (6 U.S.C. 942) and section 70103(a) of title 46, United 
     States Code;''.

     SEC. 807. INCIDENT COMMAND SYSTEM TRAINING.

       The Secretary shall ensure that Federal, State, and local 
     personnel responsible for the safety and security of vessels 
     in port carrying especially hazardous cargo have successfully 
     completed training in the Department of Homeland Security's 
     incident command system protocols.

     SEC. 808. PRE-POSITIONING INTEROPERABLE COMMUNICATIONS 
                   EQUIPMENT AT INTERAGENCY OPERATIONAL CENTERS.

       Section 70107A of title 46, United States Code, is 
     amended--
       (1) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively; and
       (2) by inserting after subsection (d) the following:
       ``(e) Deployment of Interoperable Communications Equipment 
     at Interagency Operational Centers.--
       ``(1) In general.--The Secretary shall ensure that 
     interoperable communications

[[Page S10168]]

     technology is deployed at all interagency operational centers 
     established under subsection (a).
       ``(2) Considerations.--In carrying out paragraph (1), the 
     Secretary shall consider the continuing technological 
     evolution of communications technologies and devices, with 
     its implicit risk of obsolescence, and shall ensure, to the 
     maximum extent feasible, that a substantial part of the 
     technology deployed involves prenegotiated contracts and 
     other arrangements for rapid deployment of equipment, 
     supplies, and systems rather than the warehousing or storage 
     of equipment and supplies currently available at the time the 
     technology is deployed.
       ``(3) Requirements and characteristics.--The interoperable 
     communications technology deployed under paragraph (1) 
     shall--
       ``(A) be capable of re-establishing communications when 
     existing infrastructure is damaged or destroyed in an 
     emergency or a major disaster;
       ``(B) include appropriate current, widely-used equipment, 
     such as Land Mobile Radio Systems, cellular telephones and 
     satellite equipment, Cells-On-Wheels, Cells-On-Light-Trucks, 
     or other self-contained mobile cell sites that can be towed, 
     backup batteries, generators, fuel, and computers;
       ``(C) include contracts (including prenegotiated contracts) 
     for rapid delivery of the most current technology available 
     from commercial sources;
       ``(D) include arrangements for training to ensure that 
     personnel are familiar with the operation of the equipment 
     and devices to be delivered pursuant to such contracts; and
       ``(E) be utilized as appropriate during live area exercises 
     conducted by the United States Coast Guard.
       ``(4) Additional characteristics.--Portions of the 
     communications technology deployed under paragraph (1) may be 
     virtual and may include items donated on an in-kind 
     contribution basis.
       ``(5) Rule of construction.--Nothing in this subsection 
     shall be construed or interpreted to preclude the use of 
     funds under this section by the Secretary for interim or 
     long-term Internet Protocol-based interoperable solutions, 
     notwithstanding compliance with the Project 25 standard.''.

     SEC. 809. DEFINITIONS.

       In this title:
       (1) Commandant.--The term ``Commandant'' means the 
     Commandant of the Coast Guard.
       (2) Especially hazardous cargo.--The term ``especially 
     hazardous cargo'' means any substance identified by the 
     Secretary of the department in which the Coast Guard is 
     operating as especially hazardous cargo.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the department in which the Coast Guard is operating.

                   TITLE IX--MISCELLANEOUS PROVISIONS

     SEC. 901. MARINE MAMMALS AND SEA TURTLES REPORT.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, and annually thereafter, the Secretary 
     of the department in which the Coast Guard is operating shall 
     provide a report to the Senate Committee on Commerce, 
     Science, and Transportation and the House of Representatives 
     Committee on Transportation and Infrastructure on Coast Guard 
     activities with respect to the protection of marine mammals 
     and sea turtles under United States statutes and 
     international agreements.
       (b) Required Content.--The Secretary shall include in the 
     report, at a minimum--
       (1) a detailed summary of actions that the Coast Guard has 
     undertaken annually from fiscal year 2000 through fiscal year 
     2007 with respect to enforcement efforts, and cooperative 
     agreements and activities with other Federal and State 
     agencies, training programs, and other initiatives;
       (2) an annual summary for fiscal year 2000 through fiscal 
     year 2007 by Coast Guard district of the level of effort 
     measured by personnel hours and other available data, for 
     enforcement of the Lacey Act Amendments of 1981 (16 U.S.C. 
     3371 et seq.), the Endangered Species Act (16 U.S.C. 1531 et 
     seq.), and the Marine Mammal Protection Act (16 U.S.C. 1361 
     et seq.) as well as international agreements that include 
     provisions on sea turtles or marine mammals to which the 
     United States is a party; and
       (3) a summary of any new Coast Guard initiatives for this 
     mission area.

     SEC. 902. UMPQUA LIGHTHOUSE LAND CONVEYANCE.

       (a) Conveyance Authorized.--
       (1) In general.--The Commandant of the Coast Guard may 
     convey to Douglas County, Oregon, all right, title, and 
     interest of the United States in and to the Umpqua Lighthouse 
     property, including improvements thereon, for the purpose of 
     permitting the County to use the property as a park.
       (2) Property description.--
       (A) In general.--The Umpqua Lighthouse property is the 
     parcel of approximately 14.81 acres of Coast Guard controlled 
     land located in the NW \1/4\ of sec. 13, T. 22 S., R. 13 W., 
     Willamette Meridian, and identified as Exhibit A on the 
     aerial map entitled ``U.S. Coast Guard Property at Salmon 
     Harbor/Winchester Bay, Oregon'' dated February 22, 2006.
       (B) Surveys.--The exact acreage and legal description of 
     the real property to be conveyed under subsections (a) and 
     (c) shall be determined by surveys satisfactory to the 
     Commandant. The cost of the surveys shall be borne by the 
     County.
       (b) Use of property conveyed.--Notwithstanding section 59.3 
     of title 36, Code of Federal Regulations (or any successor 
     regulation), and the limitations on the use of land provided 
     assistance under the Land and Water Conservation Fund Act of 
     1965 (16 U.S.C. 460l-4 et seq.), the real property to be 
     conveyed under this section may be converted to a use other 
     than a public outdoor recreation use.
       (c) Provision of Replacement Facilities.--
       (1) In general.--As consideration for the conveyance 
     authorized by subsection (a), the County--
       (A) may, at its expense design and construct the 
     replacement facilities for the Coast Guard to replace the 
     facilities conveyed under that subsection;
       (B) may design and construct the replacement facilities to 
     the specifications of the Commandant; and
       (C) may construct the replacement facilities upon a parcel 
     of real property determined by the Commandant to be an 
     appropriate location for the replacement facilities; and
       (2) shall convey to the United States all right, title, and 
     interest in and to the replacement facilities and the parcel 
     of real property on which the facilities are located.
       (d) Memorandum of Agreement.--The County and the Commandant 
     may enter into a memorandum of agreement to effectuate the 
     transactions authorized by this section.
       (e) Additional Terms and Conditions.--The Commandant may 
     require such additional terms and conditions in connection 
     with the conveyance under subsection (a) as the Commandant 
     considers appropriate to protect the interests of the United 
     States.
       (f) Limitation.--Nothing in this section compels the County 
     or the Commandant to execute a memorandum of agreement or 
     deed, except upon such terms and conditions that the County 
     and the Commandant may consider appropriate, in the exercise 
     of their discretion, to protect the interests of the County 
     and the United States.

     SEC. 903. TRANSFER OF LANDS TO BE HELD IN TRUST.

       (a) In General.--As soon as practical but not later than 3 
     years after the date of enactment of this Act, the Commandant 
     of the Coast Guard shall take such actions as are necessary 
     to transfer administrative jurisdiction over lands, including 
     all structures and buildings on lands, depicted on the maps 
     prepared pursuant to subsection (c) of this section to the 
     Secretary of the Interior to hold in trust for the benefit of 
     the Confederated Tribes of the Coos, Lower Umpqua, and 
     Siuslaw Indians.
       (b) Conditions of Transfer.--
       (1) Prior to the transfer of administrative jurisdiction 
     over the lands, the Coast Guard, in its sole discretion, 
     shall execute actions required to comply with applicable 
     environmental and cultural resources law.
       (2) Upon such transfer to the Secretary of the Interior, 
     the lands shall be held in trust by the United States for the 
     Confederated Tribes of the Coos, Lower Umpqua, and Siuslaw 
     Indians, Oregon, and shall be part of the Confederated Tribes 
     of Coos, Lower Umpqua, and Siuslaw's Reservation.
       (c) Map and Legal Description of Land.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, the Commandant shall file maps 
     entitled ``Confederated Tribes of the Coos, Lower Umpqua, and 
     Siuslaw Land Transfer Maps'', which shall depict and provide 
     a legal description of the parcels to be transferred in Coos 
     County, Oregon, totaling approximately 24.0 acres in the 
     areas commonly known as Gregory Point and Chief's Island, 
     with--
       (A) the Senate Committee on Commerce, Science, and 
     Transportation;
       (B) the House of Representatives Committee on 
     Transportation and Infrastructure; and
       (C) the Secretary of the Interior.
       (2) Force of law.--The maps and legal descriptions filed 
     under paragraph (1) shall have the same force and effect as 
     if included in this Act, except that the Commandant may 
     correct typographical errors in the maps and each legal 
     description.
       (3) Public availability.--Each map and legal description 
     filed under paragraph (1) shall be on file and available for 
     public inspection in the appropriate office of the Department 
     of the Interior.
       (d) Use of Coast Guard Aids to Navigation.--The Coast Guard 
     may retain easements, or other property interests as may be 
     necessary, across the property described in subsection (c) 
     for access to aids to navigation located on the lands so long 
     as such aids may be required by the Coast Guard.
       (e) Maintenance of Cape Arago Light Station.--
       (1) The conveyance of Cape Arago Light Station on Chief's 
     Island by the Coast Guard shall be made on condition that the 
     Confederated Tribes of the Coos, Lower Umpqua and Siuslaw 
     Indians shall--
       (A) use and make reasonable efforts to maintain the Cape 
     Arago Light Station in accordance with the National Historic 
     Preservation Act (16 U.S.C. 470 et seq.), the Secretary of 
     the Interior's Standards for the Treatment of Historic 
     Properties set forth in part 68 of title 36, Code of Federal 
     Regulations, and other applicable laws, and submit any 
     proposed changes to the Cape Arago Light Station for review 
     and approval by the Secretary of the Interior in consultation 
     with the Oregon State Historic Preservation Officer, for 
     consistency with section 800.5(a)(2)(vii) of title 36, Code 
     of Federal Regulations, and the Secretary of the Interior's 
     Standards for Rehabilitation, set forth

[[Page S10169]]

     in part 67.7 of title 36, Code of Federal Regulations;
       (B) make the Cape Arago Light Station available for 
     education, park, recreation, cultural, or historic 
     preservation purposes for the general public at reasonable 
     times and under reasonable conditions;
       (C) not sell, convey, assign, exchange, or encumber the 
     Cape Arago Light Station, any part thereof, or any associated 
     historic artifact conveyed in conjunction with the transfer 
     under this section unless such sale, conveyance, assignment, 
     exchange, or encumbrance is approved by Secretary of the 
     Interior;
       (D) not conduct any commercial activities at the Cape Arago 
     Light Station, any part thereof, or in connection with any 
     historic artifact conveyed in conjunction with the transfer 
     under this section in any manner, unless such commercial 
     activities are approved by the Secretary of the Interior; and
       (E) allow the United States, at any time, to enter the Cape 
     Arago Light Station without notice, for purposes of ensuring 
     compliance with this section, to the extent that it is not 
     possible to provide advance notice.
       (2) The Cape Arago Light Station, or any associated 
     historic artifact conveyed in conjunction with the transfer 
     under this section, at the option of the Secretary of the 
     Interior, shall revert to the United States and be placed 
     under the administrative control of the Secretary of the 
     Interior if the Confederated Tribes of the Coos, Lower 
     Umpqua, and Siuslaw Indians fail to meet any condition 
     described in paragraph (1).
       (f) Tribal Fishing Rights.--No fishing right of the 
     Confederated Tribes of the Coos, Lower Umpqua, and Siuslaw 
     Indians in existence on the date of enactment of this Act 
     shall be enlarged, impaired, or otherwise affected by the 
     transfer under this section.

     SEC. 904. DATA.

       In each of fiscal years 2008 through 2010, there are 
     authorized to be appropriated to the Administrator of the 
     National Oceanic and Atmospheric Administration $7,000,000 to 
     acquire through the use of unmanned aerial vehicles data to 
     improve the management of natural disasters, the safety of 
     marine and aviation transportation, and fisheries 
     enforcement.

     SEC. 905. EXTENSION.

       Section 607 of the Coast Guard and Maritime Transportation 
     Act of 2006 is amended--
       (1) by striking ``2007'' in subsection (h) and inserting 
     ``2012''; and
       (2) by striking ``terminate'' and all that follows in 
     subsection (i) and inserting ``terminate on September 30, 
     2012.''.

     SEC. 906. FORWARD OPERATING FACILITY.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary of the department in which the Coast Guard 
     is operating may construct or lease hangar, berthing, and 
     messing facilities in the Aleutian Island-Bering Sea 
     operating area. These facilities shall--
       (1) support aircraft maintenance, including exhaust 
     ventilation, heat, engine wash system, head facilities, fuel, 
     ground support services, and electrical power; and
       (2) shelter for both current helicopter assets and those 
     projected to be located at Air Station Kodiak, Alaska for up 
     to 20 years.

     SEC. 907. ENCLOSED HANGAR AT AIR STATION BARBERS POINT, 
                   HAWAII.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary of the department in which the Coast Guard 
     is operating may construct an enclosed hangar at Air Station 
     Barbers Point, Hawaii. The hangar shall--
       (1) support aircraft maintenance, including exhaust 
     ventilation, heat, engine wash system, head facilities, fuel, 
     ground support services, and electrical power; and
       (2) shelter all current aircraft assets and those projected 
     to be located at Air Station Barbers Point, Hawaii, over the 
     next 20 years.

     SEC. 908. CONVEYANCE OF DECOMMISSIONED COAST GUARD CUTTER 
                   STORIS.

       (a) In General.--Upon the scheduled decommissioning of the 
     Coast Guard Cutter STORIS, the Commandant of the Coast Guard 
     shall convey, without consideration, all right, title, and 
     interest of the United States in and to that vessel to the 
     USCG Cutter STORIS Museum and Maritime Education Center, LLC, 
     located in the State of Alaska if the recipient--
       (1) agrees--
       (A) to use the vessel for purposes of a museum and 
     historical display;
       (B) not to use the vessel for commercial transportation 
     purposes;
       (C) to make the vessel available to the United States 
     Government if needed for use by the Commandant in time of war 
     or a national emergency; and
       (D) to hold the Government harmless for any claims arising 
     from exposure to hazardous materials, including asbestos and 
     polychlorinated biphenyls, after conveyance of the vessel, 
     except for claims arising from the use by the Government 
     under subparagraph (C);
       (2) has funds available that will be committed to operate 
     and maintain in good working condition the vessel conveyed, 
     in the form of cash, liquid assets, or a written loan 
     commitment and in an amount of at least $700,000; and
       (3) agrees to any other conditions the Commandant considers 
     appropriate.
       (b) Maintenance and Delivery of Vessel.--
       (1) Maintenance.--Before conveyance of the vessel under 
     this section, the Commandant shall make, to the extent 
     practical and subject to other Coast Guard mission 
     requirements, every effort to maintain the integrity of the 
     vessel and its equipment until the time of delivery.
       (2) Delivery.--If a conveyance is made under this section, 
     the Commandant shall deliver the vessel--
       (A) at the place where the vessel is located; and
       (B) without cost to the Government.
       (3) Treatment of conveyance.--The conveyance of the vessel 
     under this section shall not be considered a distribution in 
     commerce for purposes of section 6(e) of Public Law 94-469 
     (15 U.S.C. 2605(e)).
       (c) Other Excess Equipment.--The Commandant may convey to 
     the recipient of a conveyance under subsection (a) any excess 
     equipment or parts from other decommissioned Coast Guard 
     vessels for use to enhance the operability and function of 
     the vessel conveyed under subsection (a) for purposes of a 
     museum and historical display.

     SEC. 909. CONVEYANCE OF THE PRESQUE ISLE LIGHT STATION 
                   FRESNEL LENS TO PRESQUE ISLE TOWNSHIP, 
                   MICHIGAN.

       (a) Conveyance of Lens Authorized.--
       (1) Transfer of possession.--Notwithstanding any other 
     provision of law, the Commandant of the Coast Guard may 
     transfer to Presque Isle Township, a township in Presque Isle 
     County in the State of Michigan (in this section referred to 
     as the ``Township''), possession of the Historic Fresnel Lens 
     (in this section referred to as the ``Lens'') from the 
     Presque Isle Light Station Lighthouse, Michigan (in this 
     section referred to as the ``Lighthouse'').
       (2) Condition.--As a condition of the transfer of 
     possession authorized by paragraph (1), the Township shall, 
     not later than one year after the date of transfer, install 
     the Lens in the Lighthouse for the purpose of operating the 
     Lens and Lighthouse as a Class I private aid to navigation 
     pursuant to section 85 of title 14, United States Code, and 
     the applicable regulations under that section.
       (3) Conveyance of lens.--Upon the certification of the 
     Commandant that the Township has installed the Lens in the 
     Lighthouse and is able to operate the Lens and Lighthouse as 
     a private aid to navigation as required by paragraph (2), the 
     Commandant shall convey to the Township all right, title, and 
     interest of the United States in and to the Lens.
       (4) Cessation of united states operations of aids to 
     navigation at lighthouse.--Upon the making of the 
     certification described in paragraph (3), all active Federal 
     aids to navigation located at the Lighthouse shall cease to 
     be operated and maintained by the United States.
       (b) Reversion.--
       (1) Reversion for failure of aid to navigation.--If the 
     Township does not comply with the condition set forth in 
     subsection (a)(2) within the time specified in that 
     subsection, the Township shall, except as provided in 
     paragraph (2), return the Lens to the Commandant at no cost 
     to the United States and under such conditions as the 
     Commandant may require.
       (2) Exception for historical preservation.--Notwithstanding 
     the lack of compliance of the Township as described in 
     paragraph (1), the Township may retain possession of the Lens 
     for installation as an artifact in, at, or near the 
     Lighthouse upon the approval of the Commandant. The Lens 
     shall be retained by the Township under this paragraph under 
     such conditions for the preservation and conservation of the 
     Lens as the Commandant shall specify for purposes of this 
     paragraph. Installation of the Lens under this paragraph 
     shall occur, if at all, not later than two years after the 
     date of the transfer of the Lens to the Township under 
     subsection (a)(1).
       (3) Reversion for failure of historical preservation.--If 
     retention of the Lens by the Township is authorized under 
     paragraph (2) and the Township does not install the Lens in 
     accordance with that paragraph within the time specified in 
     that paragraph, the Township shall return the lens to the 
     Coast Guard at no cost to the United States and under such 
     conditions as the Commandant may require.
       (c) Conveyance of Additional Personal Property.--
       (1) Transfer and conveyance of personal property.--
     Notwithstanding any other provision of law, the Commandant 
     may transfer to the Township any additional personal property 
     of the United States related to the Lens that the Commandant 
     considers appropriate for conveyance under this section. If 
     the Commandant conveys the Lens to the Township under 
     subsection (a)(3), the Commandant may convey to the Township 
     any personal property previously transferred to the Township 
     under this subsection.
       (2) Reversion.--If the Lens is returned to the Coast Guard 
     pursuant to subsection (b), the Township shall return to the 
     Coast Guard all personal property transferred or conveyed to 
     the Township under this subsection except to the extent 
     otherwise approved by the Commandant.
       (d) Conveyance Without Consideration.--The conveyance of 
     the Lens and any personal property under this section shall 
     be without consideration.
       (e) Delivery of Property.--The Commandant shall deliver 
     property conveyed under this section--
       (1) at the place where such property is located on the date 
     of the conveyance;
       (2) in condition on the date of conveyance; and

[[Page S10170]]

       (3) without cost to the United States.
       (f) Maintenance of Property.--As a condition of the 
     conveyance of any property to the Township under this 
     section, the Commandant shall enter into an agreement with 
     the Township under which the Township agrees--
       (1) to operate the Lens as a Class I private aid to 
     navigation under section 85 of title 14, United States Code, 
     and application regulations under that section; and
       (2) to hold the United States harmless for any claim 
     arising with respect to personal property conveyed under this 
     section.
       (g) Limitation on Future Conveyance.--The instruments 
     providing for the conveyance of property under this section 
     shall--
       (1) require that any further conveyance of an interest in 
     such property may not be made without the advance approval of 
     the Commandant; and
       (2) provide that, if the Commandant determines that an 
     interest in such property was conveyed without such 
     approval--
       (A) all right, title, and interest in such property shall 
     revert to the United States, and the United States shall have 
     the right to immediate possession of such property; and
       (B) the recipient of such property shall pay the United 
     States for costs incurred by the United States in recovering 
     such property.
       (h) Additional Terms and Conditions.--The Commandant may 
     require such additional terms and conditions in connection 
     with the conveyances authorized by this section as the 
     Commandant considers appropriate to protect the interests of 
     the United States.

     SEC. 910. REPEALS.

        The following sections are repealed:
       (1) Section 689 of title 14, United States Code, and the 
     item relating to such section in the analysis for chapter 18 
     of such title.
       (2) Section 216 of title 14, United States Code, and the 
     item relating to such section in the analysis for chapter 11 
     of such title.

     SEC. 911. REPORT ON SHIP TRAFFIC.

       (a) Report.--No later than 1 year after the date of 
     enactment of this Act and annually thereafter, the Secretary 
     of the department in which the Coast Guard is operating shall 
     provide a report to the Senate Committee on Commerce, 
     Science, and Transportation and the House of Representatives 
     Committee on Transportation and Infrastructure on the volume 
     of foreign flag ships entering waters subject to the 
     jurisdiction of the United States. The report may be 
     submitted in classified format if the Secretary deems it to 
     be necessary for national security.
       (b) Contents.--The report shall include a breakdown of the 
     number or percentage of such foreign flag ships that--
       (1) enter a United States port or place;
       (2) do not enter a United States port or place but pass 
     through the territorial sea of the United States; or
       (3) do not enter a United States port or place but pass 
     only through the exclusive economic zone of the United 
     States.
       (c) Definitions.--In this section:
       (1) Exclusive economic zone.--The term ``exclusive economic 
     zone'' means the Exclusive Economic Zone of the United States 
     established by Proclamation Number 5030, dated March 10, 1983 
     (16 U.S.C. 1453 note).
       (2) Territorial sea.--The term ``territorial sea'' means 
     the waters of the Territorial Sea of the United States under 
     Presidential Proclamation 5928, dated December 27, 1988 (43 
     U.S.C. 1331 note).

     SEC. 912. SMALL VESSEL EXCEPTION FROM DEFINITION OF FISH 
                   PROCESSING VESSEL.

       Section 2101(11b) of title 46, United States Code, is 
     amended by striking ``chilling.'' and inserting ``chilling, 
     but does not include a fishing vessel operating in Alaskan 
     waters under a permit or license issued by Alaska that--
       (A) fillets only salmon taken by that vessel;
       (B) fillets less than 5 metric tons of such salmon during 
     any 7-day period.''.

     SEC. 913. RIGHT OF FIRST REFUSAL FOR COAST GUARD PROPERTY ON 
                   JUPITER ISLAND, FLORIDA.

       (a) Right of First Refusal.--Notwithstanding any other law 
     (other than this section), the Town of Jupiter Island, 
     Florida, shall have the right of first refusal to select and 
     take without consideration fee simple title to real property 
     within the jurisdiction of the Town comprising Parcel #35-38-
     42-004-000-02590-6 (Bon Air Beach lots 259 and 260 located at 
     83 North Beach Road) and Parcel #35-38-42-004-000-02610-2 
     (Bon Air Beach lots 261 to 267), including any improvements 
     thereon that are not authorized or required by another 
     provision of law to be conveyed to another person.
       (b) Identification of Property.--The Commandant of the 
     Coast Guard may identify, describe, and determine the 
     property referred to in subsection (a) that is subject to the 
     right of the Town under that subsection.
       (c) Limitation.--The property referred to in subsection (a) 
     may not be conveyed under that subsection until the 
     Commandant of the Coast Guard determines that the property is 
     not needed to carry out Coast Guard operations.
       (d) Required Use.--Any property conveyed under this section 
     shall be used by the Town of Jupiter Island, Florida, solely 
     for conservation of habitat and as protection against damage 
     from wind, tidal, and wave energy.
       (e) Reversion.--Any conveyance of property under this 
     section shall be subject to the condition that all right, 
     title, and interest in the property, at the option of the 
     Commandant of the Coast Guard, shall revert to the United 
     States Government if the property is used for purposes other 
     than conservation.
       (f) Implementation.--The Commandant of the Coast Guard 
     shall upon request by the Town--
       (1) promptly take those actions necessary to make property 
     identified under subsection (b) and determined by the 
     Commandant under subsection (c) ready for conveyance to the 
     Town; and
       (2) convey the property to the Town subject to subsections 
     (d) and (e).

     SEC. 914. SHIP DISPOSAL WORKING GROUP.

       (a) In General.--Within 30 days after the date of enactment 
     of this Act, the Secretary of Transportation shall convene a 
     working group, composed of senior representatives from the 
     Maritime Administration, the Coast Guard, the Environmental 
     Protection Agency, the National Oceanic and Atmospheric 
     Administration, and the United States Navy. The Secretary may 
     request the participation of senior representatives of any 
     other Federal department or agency, as appropriate, and shall 
     consult with appropriate State environmental agencies. The 
     working group shall review and make recommendations on 
     environmental practices for the storage and disposal of 
     obsolete vessels owned or operated by the Federal Government.
       (b) Scope.--Among the vessels to be considered by the 
     working group are Federally owned or operated vessels that 
     are--
       (A) to be scrapped or recycled;
       (B) to be used as artificial reefs; or
       (C) to be used for the Navy's SINKEX program.
       (c) Purpose.--The working group shall--
       (1) examine current storage and disposal policies, 
     procedures, and practices for obsolete vessels owned or 
     operated by Federal agencies;
       (2) examine Federal and State laws and regulations 
     governing such policies, procedures, and practices and any 
     applicable environmental laws; and
       (3) within 90 days after the date of enactment of this Act, 
     submit a plan to the Senate Committee on Commerce, Science, 
     and Transportation, the Senate Committee on Environment and 
     Public Works, and the House of Representatives Committee on 
     Armed Services to improve and harmonize practices for storage 
     and disposal of such vessels, including the interim 
     transportation of such vessels.
       (d) Contents of Plan.--The working group shall include in 
     the plan submitted under subsection (c)(3)--
       (1) a description of existing measures for the storage, 
     disposal, and interim transportation of obsolete vessels 
     owned or operated by Federal agencies in compliance with 
     Federal and State environmental laws in a manner that 
     protects the environment;
       (2) a description of Federal and State laws and regulations 
     governing current policies, procedures, and practices for the 
     storage, disposal, and interim transportation of such 
     vessels;
       (3) recommendations for environmental best practices that 
     meet or exceed, and harmonize, the requirements of Federal 
     environmental laws and regulations applicable to the storage, 
     disposal, and interim transportation of such vessels;
       (4) recommendations for environmental best practices that 
     meet or exceed the requirements of State laws and regulations 
     applicable to the storage, disposal, and interim 
     transportation of such vessels;
       (5) procedures for the identification and remediation of 
     any environmental impacts caused by the storage, disposal, 
     and interim transportation of such vessels; and
       (6) recommendations for necessary steps, including 
     regulations if appropriate, to ensure that best environmental 
     practices apply to all such vessels.
       (e) Implementation of Plan.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, the head of each Federal department or 
     agency participating in the working group, in consultation 
     with the other Federal departments and agencies participating 
     in the working group, shall take such action as may be 
     necessary, including the promulgation of regulations, under 
     existing authorities to ensure that the implementation of the 
     plan provides for compliance with all Federal and State laws 
     and for the protection of the environment in the storage, 
     interim transportation, and disposal of obsolete vessels 
     owned or operated by Federal agencies.
       (2) Armed services vessels.--The Secretary and the 
     Secretary of Defense, in consultation with the Administrator 
     of the Environmental Protection Agency, shall each ensure 
     that environmental best practices are observed with respect 
     to the storage, disposal, and interim transportation of 
     obsolete vessels owned or operated by the Department of 
     Defense.
       (f) Rule of Construction.--Nothing in this section shall be 
     construed to supersede, limit, modify, or otherwise affect 
     any other provision of law, including environmental law.

     SEC. 915. FULL MULTI-MISSION RESPONSE STATION IN VALDEZ, 
                   ALASKA.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary of the department in which the Coast Guard 
     is operating may construct a full multi-mission Coast Guard 
     Response Station in Valdez, Alaska. The Station shall include 
     shore and

[[Page S10171]]

     maintenance infrastructure facilities to support all current 
     and projected Coast Guard waterborne security forces to be 
     located in Valdez, Alaska, over the next 20 years.

     SEC. 916. PROTECTION AND FAIR TREATMENT OF SEAFARERS.

       (a) In General.--Chapter 5 of title 14, United States Code, 
     is amended by inserting after section 89 the following:

     ``Sec. 89a. Protection and fair treatment of seafarers

       ``(a) Authority of the Secretary.--
       ``(1) In general.--The Secretary is authorized--
       ``(A) to require a bond or surety satisfactory as an 
     alternative to withholding or revoking clearance required 
     under section 60105 of title 46 if, in the opinion of the 
     Secretary, such bond or surety satisfactory is necessary to 
     facilitate an investigation, reporting, documentation, or 
     adjudication of any matter that is related to the 
     administration or enforcement of any treaty, law, or 
     regulation by the Coast Guard, provided that corporate 
     sureties underwriting any such bonds be certified by the 
     Department of the Treasury to write Federal bonds under 
     sections 9304 and 9305 of title 31;
       ``(B) at the discretion of the Secretary, to pay, in whole 
     or in part, without further appropriation and without fiscal 
     year limitation, from amounts in the Fund, necessary support 
     of--
       ``(i) any seafarer who enters, remains, or has been paroled 
     into the United States and is involved in an investigation, 
     reporting, documentation, or adjudication of any matter that 
     is related to the administration or enforcement of any 
     treaty, law, or regulation by the Coast Guard; and
       ``(ii) any seafarer whom the Secretary finds to have been 
     abandoned in the United States; and
       ``(C) at the sole discretion of the Secretary, to 
     reimburse, in whole or in part, without further appropriation 
     and without fiscal year limitation, from amounts in the Fund, 
     a shipowner, who has filed a bond or surety satisfactory 
     pursuant to subparagraph (A) of this paragraph and provided 
     necessary support of a seafarer who has been paroled into the 
     United States to facilitate an investigation, reporting, 
     documentation, or adjudication of any matter that is related 
     to the administration or enforcement of any treaty, law, or 
     regulation by the Coast Guard, for costs of necessary 
     support, when the Secretary deems reimbursement necessary to 
     avoid serious injustice.
       ``(2) Application.--The authority to require a bond or a 
     surety satisfactory or to request the withholding or 
     revocation of the clearance required under section 60105 of 
     title 46 is applicable to any investigation, reporting, 
     documentation, or adjudication of any matter that is related 
     to the administration or enforcement of any treaty, law, or 
     regulation by the Coast Guard.
       ``(3) Limitations.--Nothing in this section shall be 
     construed--
       ``(A) to create a right, benefit, or entitlement to 
     necessary support; or
       ``(B) to compel the Secretary to pay, or reimburse the cost 
     of, necessary support.
       ``(b) Fund.--
       ``(1) In general.--There is established in the Treasury a 
     special fund known as the `Support of Seafarers Fund'.
       ``(2) Availability.--The amounts covered into the Fund 
     shall be available to the Secretary, without further 
     appropriation and without fiscal year limitation--
       ``(A) to pay necessary support, pursuant to subsection 
     (a)(1)(B) of this section; and
       ``(B) to reimburse a shipowner for necessary support, 
     pursuant to subsection (a)(1)(C) of this section.
       ``(3) Receipts.--Notwithstanding any other provision of 
     law, the Fund shall be authorized to receive--
       ``(A) amounts reimbursed or recovered pursuant to 
     subsection (c) of this section;
       ``(B) amounts appropriated to the Fund pursuant to 
     subsection (f) of this section; and
       ``(C) appropriations available to the Secretary for 
     transfer.
       ``(4) Limitation on certain credits.--The Fund may receive 
     credits pursuant to paragraph (3)(A) of this subsection only 
     when the unobligated balance of the Fund is less than 
     $5,000,000.
       ``(5) Report required.--
       ``(A) Except as provided in subparagraph (B) of this 
     paragraph, the Secretary shall not obligate any amount in the 
     Fund in a given fiscal year unless the Secretary has 
     submitted to Congress, concurrent with the President's budget 
     submission for that fiscal year, a report that describes--
       ``(i) the amounts credited to the Fund, pursuant to 
     paragraph (3) of this section, for the preceding fiscal year;
       ``(ii) a detailed description of the activities for which 
     amounts were charged; and
       ``(iii) the projected level of expenditures from the Fund 
     for the coming fiscal year, based on--

       ``(I) on-going activities; and
       ``(II) new cases, derived from historic data.

       ``(B) The limitation in subparagraph (A) of this paragraph 
     shall not apply to obligations during the first fiscal year 
     during which amounts are credited to the Fund.
       ``(6) Fund manager.--The Secretary shall designate a Fund 
     manager, who shall--
       ``(A) ensure the visibility and accountability of 
     transactions utilizing the Fund;
       ``(B) prepare the report required pursuant to paragraph (5) 
     of this subsection; and
       ``(C) monitor the unobligated balance of the Fund and 
     provide notice to the Secretary and the Attorney General 
     whenever the unobligated balance of the Fund is less than 
     $5,000,000.
       ``(c) Reimbursements--
       ``(1) Recovery.--Any shipowner--
       ``(A)(i) who, during the course of an investigation, 
     reporting, documentation, or adjudication of any matter that 
     the Coast Guard referred to a United States Attorney or the 
     Attorney General, fails to provide necessary support of a 
     seafarer who has been paroled into the United States to 
     facilitate the investigation, reporting, documentation, or 
     adjudication, and
       ``(ii) against whom a criminal penalty is subsequently 
     imposed, or
       ``(B) who, under any circumstance, abandons a seafarer in 
     the United States, as determined by the Secretary,

     shall reimburse the Fund an amount equal to the total amount 
     paid from the Fund for necessary support of the seafarer, 
     plus a surcharge of 25 per cent of such total amount.
       ``(2) Enforcement.--If a shipowner fails to reimburse the 
     Fund as required under paragraph (1) of this subsection, the 
     Secretary may--
       ``(A) proceed in rem against any vessel of the shipowner in 
     the Federal district court for the district in which such 
     vessel is found; and
       ``(B) withhold or revoke the clearance, required by section 
     60105 of title 46, of any vessel of the shipowner wherever 
     such vessel is found.
       ``(3) Clearance.--Whenever clearance is withheld or revoked 
     pursuant to paragraph (2)(B) of this subsection, clearance 
     may be granted if the shipowner reimburses the Fund the 
     amount required under paragraph (1) of this subsection.
       ``(d) Definitions.--In this section:
       ``(1) Abandons; abandoned.--The term `abandons' or 
     `abandoned' means a shipowner's unilateral severance of ties 
     with a seafarer or the shipowner's failure to provide 
     necessary support of a seafarer;
       ``(2) Bond or surety satisfactory.--The term `bond or 
     surety satisfactory' means a negotiated instrument, the terms 
     of which may, at the discretion of the Secretary, include 
     provisions that require the shipowner to--
       ``(A) provide necessary support of a seafarer who has or 
     may have information pertinent to an investigation, 
     reporting, documentation, or adjudication of any matter that 
     is related to the administration or enforcement of any 
     treaty, law, or regulation by the Coast Guard;
       ``(B) facilitate an investigation, reporting, 
     documentation, or adjudication of any matter that is related 
     to the administration or enforcement of any treaty, law, or 
     regulation by the Coast Guard;
       ``(C) stipulate to certain incontrovertible facts, 
     including, but not limited to, the ownership or operation of 
     the vessel, or the authenticity of documents and things from 
     the vessel;
       ``(D) facilitate service of correspondence and legal 
     papers;
       ``(E) enter an appearance in Federal district court;
       ``(F) comply with directions regarding payment of funds;
       ``(G) name an agent in the United States for service of 
     process;
       ``(H) make stipulations as to the authenticity of certain 
     documents in Federal district court;
       ``(I) provide assurances that no discriminatory or 
     retaliatory measures will be taken against a seafarer 
     involved in an investigation, reporting, documentation, or 
     adjudication of any matter that is related to the 
     administration or enforcement of any treaty, law, or 
     regulation by the Coast Guard;
       ``(J) provide financial security in the form of cash, bond, 
     or other means acceptable to the Secretary; and
       ``(K) provide for any other appropriate measures as the 
     Secretary deems necessary to ensure the Government is not 
     prejudiced by granting the clearance required by section 
     60105 of title 46.
       ``(3) Fund.--The term `Fund' means the Support of Seafarers 
     Fund, established by subsection (b);
       ``(4) Necessary support.--The term `necessary support' 
     means normal wages, lodging, subsistence, clothing, medical 
     care (including hospitalization), repatriation, and any other 
     expense the Secretary deems appropriate;
       ``(5) Seafarer.--The term `seafarer' means an alien crewman 
     who is employed or engaged in any capacity on board a vessel 
     subject to the jurisdiction of the United States;
       ``(6) Shipowner.--The term `shipowner' means the individual 
     or entity that owns, has an ownership interest in, or 
     operates a vessel subject to the jurisdiction of the United 
     States;
       ``(7) Vessel subject to the jurisdiction of the united 
     states.--The term `vessel subject to the jurisdiction of the 
     United States' has the same meaning it has in section 
     70502(c) of title 46, except that it excludes a vessel owned 
     or bareboat chartered and operated by the United States, by a 
     State or political subdivision thereof, or by a foreign 
     nation, except when such vessel is engaged in commerce.
       ``(e) Regulations.--The Secretary is authorized to 
     promulgate regulations to implement this subsection.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated to

[[Page S10172]]

     the Fund $1,500,000 for each of fiscal years 2009, 2010, and 
     2011.''.
       (b) Clerical Amendment.--The chapter analysis for chapter 5 
     of such title is amended by inserting after the item relating 
     to section 89 the following:

``89a. Protection and fair treatment of seafarers''.

     SEC. 917. ICEBREAKERS.

       (a) In General.--The Secretary of the department in which 
     the Coast Guard is operating shall acquire or construct 2 
     polar icebreakers for operation by the Coast Guard in 
     addition to its existing fleet of polar icebreakers.
       (b) Necessary Measures.--The Secretary shall take all 
     necessary measures, including the provision of necessary 
     operation and maintenance funding, to ensure that--
       (1) the Coast Guard maintains, at a minimum, its current 
     vessel capacity for carrying out ice breaking in the Arctic 
     and Antarctic, Great Lakes, and New England regions; and
       (2) any such vessels that are not fully operational are 
     brought up to, and maintained at full operational capability.
       (c) Reimbursement.--Nothing in this section shall preclude 
     the Secretary from seeking reimbursement for operation and 
     maintenance costs of such polar icebreakers from other 
     Federal agencies and entities, including foreign countries, 
     that benefit from the use of the icebreakers.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated for fiscal year 2008 to the Secretary of 
     the department in which the Coast Guard is operating such 
     sums as may be necessary to acquire the icebreakers 
     authorized by subsection (a), as well as maintaining and 
     operating the icebreaker fleet as authorized in subsection 
     (b).

     SEC. 918. FUR SEAL ACT AUTHORIZATION.

       Section 206(c)(1) of the Fur Seal Act of 1966 (16 U.S.C. 
     1166(c)(1)) is amended by striking ``and 2007'' and inserting 
     ``2007, 2008, and 2009''.

     SEC. 919. STUDY OF RELOCATION OF COAST GUARD SECTOR BUFFALO 
                   FACILITIES.

       (a) Purposes.--The purposes of this section are--
       (1) to authorize a project study to evaluate the 
     feasibility of consolidating and relocating Coast Guard 
     facilities at Coast Guard Sector Buffalo within the study 
     area;
       (2) to obtain a preliminary plan for the design, 
     engineering, and construction for the consolidation of Coast 
     Guard facilities at Sector Buffalo; and
       (3) to distinguish what Federal lands, if any, shall be 
     identified as excess after the consolidation.
       (b) Definitions.--In this section:
       (1) Commandant.--The term ``Commandant'' means the 
     Commandant of the Coast Guard.
       (2) Sector buffalo.--The term ``Sector Buffalo'' means 
     Coast Guard Sector Buffalo of the Ninth Coast Guard District.
       (3) Study area.--The term ``study area'' means the area 
     consisting of approximately 31 acres of real property and any 
     improvements thereon that are commonly identified as Coast 
     Guard Sector Buffalo, located at 1 Fuhrmann Boulevard, 
     Buffalo, New York, and under the administrative control of 
     the Coast Guard.
       (c) Study.--
       (1) In general.--Within 12 months after the date on which 
     funds are first made available to carry out this section, the 
     Commandant shall conduct a project proposal report of the 
     study area and shall submit such report to the Committee on 
     Commerce, Science, and Transportation of the Senate and the 
     Committee on Transportation and Infrastructure of the House 
     of Representatives.
       (2) Requirements.--The project proposal report shall--
       (A) evaluate the most cost-effective method for providing 
     shore facilities to meet the operational requirements of 
     Sector Buffalo;
       (B) determine the feasibility of consolidating and 
     relocating shore facilities on a portion of the existing 
     site, while--
       (i) meeting the operational requirements of Sector Buffalo; 
     and
       (ii) allowing the expansion of operational requirements of 
     Sector Buffalo; and
       (C) contain a preliminary plan for the design, engineering, 
     and construction of the proposed project, including--
       (i) the estimated cost of the design, engineering, and 
     construction of the proposed project;
       (ii) an anticipated timeline of the proposed project; and
       (iii) a description of what Federal lands, if any, shall be 
     considered excess to Coast Guard needs.
       (d) Limitation.--Nothing in this section shall affect the 
     current administration and management of the study area.

     SEC. 920. INSPECTOR GENERAL REPORT ON COAST GUARD DIVE 
                   PROGRAM.

       (a) Inspector General Report.--Within 1 year after the date 
     of enactment of this Act, the Inspector General of the 
     Department of Homeland Security shall submit a report to the 
     Senate Committee on Commerce, Science, and Transportation and 
     the House of Representatives Committee on Transportation and 
     Infrastructure on the circumstances surrounding the 
     accidental death of Coast Guard crew members on a training 
     dive while serving aboard the Coast Guard icebreaker HEALY on 
     August 17, 2006. The Inspector General shall include in the 
     report--
       (1) a description of programmatic changes made by the Coast 
     Guard in its dive program in response to the accident;
       (2) an evaluation of whether those changes are effective 
     and are sufficient to prevent similar accidents; and
       (3) recommendations for further improvement in the safety 
     of the dive program.
       (b) Hill-Duque Coast Guard Dive Program Report.--Within 6 
     months after the date of enactment of this Act, the Inspector 
     General shall submit an interim report to the Committees 
     describing the progress made in preparing the report required 
     by subsection (a).

  Ms. SNOWE. Mr. President, as Ranking Member on the Coast Guard's 
oversight subcommittee, I am pleased today to co-sponsor the Coast 
Guard Authorization Act for fiscal year 2008.
  The Coast Guard serves as the guardian of our maritime homeland 
security and provides many critical services for our nation. Last year 
alone, the Coast Guard responded to over 28,000 calls for assistance, 
and saved nearly 5,300 lives. These brave men and women risk their 
lives to defend our borders from drugs, illegal immigrants, acts of 
terror, and other national security threats. In 2004, the Coast Guard 
seized 287,000 pounds of cocaine, including over 20 tons in a single 
interdiction action, the largest drug bust ever recorded. They also 
stopped nearly 8,000 illegal migrants from reacting our shores. In 
addition they conducted 6,100 boardings to protect our vital fisheries 
stocks and they responded to 4,400 pollution incidents.
  In today's post-9/11 world, the men and women of the Coast Guard have 
been working harder than ever securing the nation's coastline, 
waterways, and ports. This rapid escalation of the Coast Guard's 
homeland security mission catalogue continues today. While our new 
reality requires the Coast Guard to maintain a robust homeland security 
posture, these new priorities must not diminish the Coast Guard's focus 
on its traditional missions such as marine safety, search and rescue, 
aids to navigation, fisheries law enforcement, and marine environmental 
protection.
  The bill we introduce today would authorize funding at $8.3 billion 
for fiscal year 2008. This authorization will continue to allow the 
Coast Guard to perform non-homeland security missions such as search 
and rescue, fisheries enforcement, and marine environmental protection, 
as well as fund the necessary missions related to ports, waterways, and 
coastal security. It also includes funding to allow the service to 
continue replacing its rapidly aging assets so it can increase 
efficiency of its actions and reap the benefits of advances of modern 
technology and engineering.
  The Coast Guard's rapid operational escalation has taken a 
significant toll on the ships, boats, and aircraft that the Coast Guard 
uses on a daily basis, putting additional strain on vessels that 
already collectively comprise the world's third oldest navel fleet. The 
Coast Guard is now 5 years into the acquisition phase of a program 
designed to recapitalize its aging infrastructure the Integrated 
Deepwater Program. In recent months, we have heard a litany of bad news 
regarding Deepwater, from the decommissioning of eight 123-foot patrol 
boats following a failed effort to extend them, to reports that 
Deepwater's flagship, the National Security Cutter, will not meet the 
specifications required by the Coast Guard. The service has taken 
numerous steps to rectify contractual shortcomings that have led to 
many of these problems, but much work remains to be done before the 
Coast Guard can regain the confidence of its overseers and the American 
public. This bill authorizes nearly $1 billion for Coast Guard 
acquisitions programs, a large sum to be sure. But Senator Cantwell and 
I, and the rest of the Coast Guard's oversight subcommittee will 
closely monitor developments with the program to ensure that the 
mistakes of Deepwater's past are not carried over into its future.
  This bill also includes a provision to increase the Coast Guard's 
ability to prosecute those engaged in illegal alien smuggling in the 
maritime environment. Under current law and practice, individuals have 
to be seriously injured or die in a maritime migrant smuggling event 
before the smugglers are faced with meaningful legal penalties. This 
allows organized groups of experienced smugglers to operate with near 
impunity, facilitating the entry of

[[Page S10173]]

thousands of illegal immigrants annually. The Maritime Alien Smuggling 
Law Enforcement Act, contained within this bill would close this 
serious loophole at the frontline of our homeland security efforts.
  The bill also contains provisions vital to navigation security, 
including a requirement that the Coast Guard continue to operate the 
LORAN-C navigation system. Though advances in Global Positioning System 
technology have allowed our mariners to receive accurate, timely 
positioning data, many seafarers, particularly in the northern 
latitudes where GPS signals are less strong, still rely on LORAN 
signals as a back-up to their more modern systems, or in some cases, as 
a primary navigation aid.
  The service men and women of the Coast Guard do yeoman's work in 
support of our homeland security and to ensure the safety of the 
maritime domain, and this bill also contains provisions to help them in 
numerous ways. Provisions ensure the Government is providing adequate 
access to medical care for those stationed on remote islands; grants 
Coast Guard servicemen and women access to the armed forces retirement 
homes; and authorizes funding for additional facilities to improve 
their quality of life.
  In sum, this bill contains provisions too numerous to mention 
individually that support the Coast Guard's missions and enhance its 
ability to safeguard our homeland, our environment, and our maritime 
operations. I thank Senator Cantwell and the rest of my fellow co-
sponsors for all their hard work on this bill, and I ask my colleagues 
in this body to join me in expressing support for the valiant men and 
women of the Coast Guard and this bill that will facilitate execution 
of their appointed missions.
                                 ______
                                 
      By Mr. BAUCUS:
  S. 1893. An original bill to amend title XXI of the Social Security 
Act to reauthorize the State Children's Health Insurance Program, and 
for other purposes; from the Committee on Finance; placed on the 
calendar.
  Mr. BAUCUS. Mr. President, I ask unanimous consent the following 
material regarding today's introduction of S. 1893, the Children's 
Health Insurance Program Reauthorization Act of 2007, be included in 
the Record, July 26, 2007 letter from the Congressional Budget Office; 
and Technical Summary of the Children's Health Insurance Program 
Reauthorization Act of 2007.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                    Washington, DC, July 26, 2007.
     Hon. Max Baucus,
     Chairman Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office (CBO) 
     and the Joint Committee on Taxation (JCT) have prepared the 
     attached cost estimate for the Children's Health Insurance 
     Program Reauthorization Act of 2007, based on the legislative 
     language (ERN07632) that was provided by the Committee on 
     Finance on July 26, 2007.
       CBO estimates that enacting this legislation would increase 
     federal direct spending by $35.2 billion over the 2008-2012 
     period and by $71.0 billion over the 2008-2017 period. CBO 
     and JCT estimate that net revenues would increase under the 
     bill by $36.1 billion over the next five years and $72.8 
     billion over the 10-year period. A portion of that increase 
     would be in off-budget revenues: $0.8 billion for the 2008-
     2012 period and $1.1 billion over the 2008-2017 period. On 
     balance, the spending and revenue changes would reduce 
     federal on-budget deficits by $0.1 billion through 2012 and 
     $0.8 billion for the 2008-2017 period. The two attached 
     tables provide estimates of year-by-year changes and a 
     summary of the estimated change in enrollment of children 
     under the State Children's Health Insurance Program (SCHIP) 
     and Medicaid.
       Projected spending would exceed estimated on-budget revenue 
     increases beginning in fiscal year 2015. Pursuant to section 
     203 of S. Con. Res. 21, the Concurrent Resolution on the 
     Budget for Fiscal Year 2008, CBO estimates that the changes 
     in direct spending and revenues would cause an increase in 
     the on-budget deficit greater than $5 billion in at least one 
     of the 10-year periods between 2018 and 2057.
       CBO has reviewed the non-tax provisions of the bill--titles 
     I through VI, excluding section 411, and title VII--for 
     mandates and determined that they contain no 
     intergovernmental mandates as defined in the Unfunded 
     Mandates Reform Act (UMRA). The bill would affect the way 
     states administer SCHIP and Medicaid, but because of the 
     flexibility in those programs, the new requirements would not 
     be intergovernmental mandates as UMRA defines that term. In 
     general, state, local, and tribal governments would benefit 
     from the continuation of existing SCHIP grants, the creation 
     of new grant programs, and broader flexibility and options in 
     some programs.
       According to JCT, the tax provisions of the bill contain no 
     intergovernmental mandates as defined in UMRA. JCT has 
     determined that the tax provisions of the bill contain a 
     private-sector mandate, as defined in UMRA, by increasing the 
     excise tax rate on cigarettes and other tobacco products. The 
     costs of that mandate would be similar to the estimated 
     budget effects of the provision (as shown in the attached 
     table), and thus would significantly exceed the threshold 
     established in UMRA for private-sector mandates in each year 
     (the threshold is $131 million in 2007, and is adjusted 
     annually for inflation).
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contacts are Eric 
     Rollins and Jeanne De Sa.
           Sincerely,
                                                  Peter R. Orszag,
                                                         Director.

          CBO'S ESTIMATE OF THE EFFECTS ON DIRECT SPENDING AND REVENUES OF THE CHILDREN'S HEALTH INSURANCE PROGRAM REAUTHORIZATION ACT OF 2007
                       [Based on the legislative language ERN07632, provided by the Senate Committee on Finance on July 26, 2007]
  Figures are outlays, by fiscal year, in billions of dollars. Costs or savings of less than $50 million are shown with an asterisk. Components may not
                                                           sum to totals because of rounding.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Section                        2008    2009    2010    2011    2012    2013    2014    2015    2016    2017    2008-12    2008-17
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING
 
SCHIP outlays from the funding provided in
 sections 101, 103, 104, and 105 of the bill:
    Benefits and administration costs.............     2.2     3.8     5.5     6.5     7.4    -0.4    -1.8    -1.8    -1.7    -1.6       25.4       18.1
    Incentive payments............................       0     0.4     0.6     0.8     0.9     1.0     1.1     1.2     1.2     1.3        2.7        8.4
                                                   -----------------------------------------------------------------------------------------------------
        Subtotal..................................     2.2     4.1     6.1     7.2     8.4     0.6    -0.7    -0.6    -0.4    -0.3       28.1       26.5
Medicaid outlays due to interactions with the         -0.3     0.3     1.2     1.6     1.8     4.5     6.0     7.1     7.7     8.4        4.7       38.4
 SCHIP outlays shown above........................
Other changes in direct spending that are not
 included with the SCHIP and Medicaid totals
 above:
    104  Additional administrative funding for           *       *       *       *       *       *       *       *       *       *        0.1        0.1
     territories..................................
    105  Funding for improved reporting of               *       *       0       0       0       0       0       0       0       0          *          *
     Medicaid enrollment..........................
    108  Contingency fund.........................       0     0.1     0.1     0.1     0.1     0.2     0.2     0.2     0.2     0.2        0.3        1.1
    201  Grants for outreach and enrollment.......       *       *       *       *     0.1       *       *       *       *       *        0.2        0.4
    203  Express Lane demonstration project.......       *       *       *       *       *       0       0       0       0       0          *          *
    301  Revise requirement to document                  0     0.3     0.3     0.4     0.4     0.4     0.4     0.5     0.5     0.6        1.4        3.7
     citizenship..................................
    501  Development of quality measures for child       *     0.1     0.1     0.1     0.1       *       *       *       *       *        0.3        0.4
     health.......................................
    604  Additional funding for Current Population       *       *       *       *       *       *       *       *       *       *        0.1        0.1
     Survey.......................................
    608  Dental health grants.....................       *     0.1     0.1     0.1       *       0       0       0       0       0        0.2        0.2
    609  Transition grants for payment of FQHC /         *       *       0       0       0       0       0       0       0       0          *          *
     RHC services.................................
                                                   -----------------------------------------------------------------------------------------------------
        Subtotal..................................     0.1     0.5     0.6     0.6     0.6     0.7     0.7     0.7     0.8     0.8        2.4        6.1
            Total changes in direct spending......     2.1     5.0     7.9     9.4    10.8     5.8     6.0     7.2     8.0     8.9       35.2       71.0
 
                                                                   CHANGES IN REVENUES
On-budget revenues:
    701  Increased taxes on tobacco products......     6.2     7.6     7.4     7.3     7.3     7.2     7.1     7.1     7.0     6.9       35.7       71.1
    703  Changed timing of corporate estimated tax       0       0       0       0    -0.9    -0.9       0       0       0       0       -0.9          0
     payments.....................................
    Effect of SCHIP provisions on on-budget              *     0.1     0.1     0.1     0.1     0.1       *       *       *       *        0.5        0.7
     revenues.....................................
                                                   -----------------------------------------------------------------------------------------------------
        Subtotal..................................     6.2     7.7     7.5     7.4     6.5     8.2     7.2     7.1     7.0     7.0       35.3       71.7
Off-budget revenues (due to SCHIP provisions).....     0.1     0.2     0.2     0.2     0.2     0.1       *       *       *     0.1        0.8        1.1
            Total changes in revenues.............     6.3     7.8     7.7     7.6     6.7     8.3     7.2     7.1     7.1     7.0       36.1       72.8
Net budgetary effect of legislation:
    Direct spending and on-budget revenues........    -4.2    -2.7     0.4     2.0     4.3    -2.4    -1.2     0.1     1.0     1.9       -0.1       -0.8
    Direct spending and all revenues..............    -4.3    -2.8     0.2     1.3     4.1    -2.5    -1.2       *     0.9     1.8       -0.9       -1.8
Memorandum:
SCHIP outlays under CBO's baseline................     5.4     5.4     5.5     5.5     5.6     5.5     5.3     5.3     5.2     5.1       27.4       53.8
Additional SCHIP outlays under proposal...........     2.3     4.3     6.2     7.4     8.5     0.7    -0.6    -0.5    -0.3    -0.2       28.6       27.9
Total SCHIP outlays under proposal................     7.7     9.7    11.7    12.9    14.1     6.2     4.7     4.8     4.9     5.0       56.1       81.7
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page S10174]]


                        CBO's ESTIMATE OF CHANGES IN SCHIP AND MEDICAID ENROLLMENT OF CHILDREN UNDER THE CHILDREN'S HEALTH INSURANCE PROGRAM REAUTHORIZATION ACT OF 2007
                                           (Based on the legislative language ERN07632, provided by the Senate Committee on Finance on July 26, 2007)
                                  All figures are average monthly enrollment, in millions of individuals. Components may not sum to totals because of rounding.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              SCHIP a                                         Medicaid b                             SCHIP/Medicaid total
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
                                                          Enrollees    Reduction    Reduction               Enrollees    Reduction    Reduction               Reduction    Reduction
                                                           moved to      in the     in private    Total      moved to      in the     in private    Total       in the     in private    Total
                                                            SCHIP      uninsured     coverage                 SCHIP      uninsured     coverage               uninsured     coverage
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal Year 2012:
CBO's baseline projections.............................  ...........  ...........  ...........        3.3  ...........  ...........  ...........       25.0  ...........  ...........       28.3
    Effect of providing funding to maintain current              0.6          0.8          0.5        1.9         -0.6         n.a.         n.a.       -0.6          0.8          0.5        1.3
     SCHIP programs....................................
    Effect of additional SCHIP funding and other
     provisions:
        Additional enrollment within existing                   n.a.          0.9          0.6        1.5         n.a.          1.7          0.4        2.2          2.7          1.0        3.7
         eligibility groups c,d........................
        Expansion of SCHIP eligibility to new                   n.a.          0.6          0.6        1.1         n.a.         n.a.         n.a.       n.a.          0.6          0.6        1.1
         populations...................................
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
        Subtotal.......................................         n.a.          1.5          1.2        2.6         n.a.          1.7          0.4        2.2          3.2          1.6        4.8
    Total proposed changes.............................          0.6          2.2          1.7        4.5         -0.6          1.7          0.4        1.5          4.0          2.1        6.1
Estimated enrollment under proposal....................  ...........  ...........  ...........        7.9  ...........  ...........  ...........       26.5  ...........  ...........      34.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
a The figures in this table include the program's adult enrollees, who account for less than 10 percent of total SCHIP enrollment.
b The figures in this table do not include children who receive Medicaid because they are disabled.
c For simplicity of display, the Medicaid figures in this line include the additional children enrolled as a side effect of expansions of SCHIP eligibility.
d The Medicaid figures and SCHIP/Medicaid totals in this line include about 100,000 adults who would gain eligibility under section 301 of the bill.
 
n.a. = not applicable

     Technical Summary of the Children's Health Insurance Program 
                      Reauthorization Act of 2007


Section 1. Short title; Amendments to Social Security Act; References; 
                           Table of Contents

     Current Law
       No provision.
     Explanation of Provision
       This act may be cited as the ``Children's Health Insurance 
     Program (CHIP) Reauthorization Act of 2007.'' Unless 
     otherwise noted, this act amends, or repeals provisions of 
     the Social Security Act. When this act references: ``CHIP'' 
     it is referring to the State Children's Health Insurance 
     Program established under Title XXI; ``MEDICAID'' it is 
     referring to the program for medical assistance established 
     under title XIX; ``Secretary'' it is referring to the 
     Secretary of Health and Human Services.

                       Title I--Financing of CHIP


                     Section 101. Extension of CHIP

     Current Law
       Title XXI of the Social Security Act specifies the 
     following national appropriation amounts in Sec. 2104(a) from 
     FY 1998 to FY2007 for SCHIP:
       $4,295,000,000 in FY1998;
       $4,275,000,000 in FY 1999;
       $4,275,000,000 in FY2000;
       $4,275,000,000 in FY 2001;
       $3,150,000,000 in FY 2002;
       $3,150,000,000 in FY2003;
       $3,150,000,000 in FY2004;
       $4,050,000,000 in FY2005;
       $4,050,000,000 in FY2006; and
       $5,000,000,000 in FY2007.
       These amounts are alloted to states, including the District 
     of Columbia, except for (1) 0.25% of the total annual amount 
     is alloted to the territories and commonwealths (hereafter 
     referred to simply as ``the territories''), and (2) from 
     FY1998 to FY2002, $60 million was set aside annually for 
     special diabetes grants (Public Health Service Act Sec. 330B 
     and Sec. 330C), which are now funded by direct 
     appropriations. the territories are also alloted the 
     following appropriation amounts in Sec. 2104(c)(4)(B):
       $32,000,000 in FY1999;
       $34,200,000 in FY2000;
       $34,200,000 in FY2001;
       $25,200,000 in FY2002;
       $25,200,000 in FY2003;
       $25,200,000 in FY2004;
       $32,400,000 in FY2005;
       $32,400,000 in FY2006; and
       $40,000,000 in FY2007.
     Explanation of Provision
       The following national appropriation amounts are specified 
     for CHIP in Sec. 2104(a):
       $9,125,000,000 in FY 2008;
       $10,675,000,000 in FY2009;
       $11,850,000,000 in FY 2010;
       $13,750,000,000 in FY 2001; and
       $3,500,000,000 in FY2012.


 Section 102. Allotments for the 50 States and the District of Columbia

     Current Law
       The annual SCHIP appropriation available to states, 
     including the District of Columbia, is the amount of the 
     total appropriation remaining after amounts set aside for the 
     territories and, for FY1998 to FY2002, the special diabetes 
     grants. Each state's share, or percentage, of the available 
     appropriation is determined by a formula using the state's 
     ``number of children,'' as adjusted for geographic variation 
     in health costs and subject to certain floors and a ceiling.
       Beginning with the FY2001 SCHIP allotment, the ``number of 
     children'' is equal to (1) 50 percent of the number of 
     children in the state who are low income (with ``low income'' 
     defined as having family income below 200% of the federal 
     poverty threshold), plus (2) 50 percent of the number of 
     uninsured low-income children in the state. The source of 
     data is the average of the number of such children, as 
     reported and defined in the three most recent Annual Social 
     and Economic (ASEC) Supplements (formerly known as the March 
     supplements) to the Census Bureau's Current Population Survey 
     (CPS) before the beginning of the calendar year in which the 
     applicable fiscal year begins. For example, in determining 
     the FY2007 allotments, the three most recent supplements 
     available before January 1, 2006, were used. Thus, states' 
     FY2007 allotments were based on the ``number of children'' 
     using data that covered calendar years 2002, 2003 and 2004.
       The adjustment for geographic variations in health costs is 
     85% of each state's variation from the national average in 
     its average wages in the health services industry. The source 
     of data is the average wages from mandatory reports filed 
     quarterly by every employer on their unemployment insurance 
     contributions and provided to the Department of Labor's 
     Bureau of Labor Statistics (BLS). A three-year average of 
     these data is also required in the statute.
       Each state's ``number of children,'' as adjusted for 
     geographic variation in health costs, is calculated as a 
     percentage of the national total. This is the state's 
     preliminary proportion of the available SCHIP appropriation, 
     against which the floors and ceiling are compared.
       Since the beginning of SCHIP, no state's share of the 
     available appropriation could result in an allotment of less 
     than $2 million. No state has ever been affected by this 
     floor. Beginning with the FY2000 allotment, two additional 
     floors also applied: (1) no state's share could be less than 
     90% of last year's share, and (2) no state's share could be 
     less than 70% of its FY1999 share. (Each state's FY1999 share 
     was identical to its FY1998 share, per P.L. 105-277.)
       A ceiling has also applied beginning with the FY2000 
     allotment: No state's share can exceed 145% of its FY1999 
     share.
       Once the floors and ceiling are applied to affected states 
     to produce their adjusted proportion, the other states' 
     shares are adjusted proportionally to use exactly 100% of the 
     available appropriation. Each state's adjusted proportion 
     multiplied by the appropriation available to states for a 
     fiscal year results in each state's federal SCHIP allotment 
     for that fiscal year.
     Explanation of Provision
       The annual CHIP funds available to states, including the 
     District of Columbia--that is, the available national 
     allotment--is the amount of the total appropriation remaining 
     after amounts allotted to the territories.
       For FY2008, a state's allotment is calculated as 110% of 
     the greatest of the following four amounts: (1) the state's 
     FY2007 federal CHIP spending multiplied by the annual 
     adjustment; (2) the state's FY2007 federal CHIP allotment 
     multiplied by the annual adjustment; (3) for states that were 
     determined in FY2007 to have exhausted their own federal CHIP 
     allotments (and therefore designated a shortfall state for 
     FY2007), the state's FY2007 projected spending as of November 
     2006 (or as of May 2006, for a state whose May 2006 
     projection was $95 million to $96 million higher than its 
     November 2006 projection) multiplied by the annual 
     adjustment; and (4) the state's FY2008 federal CHIP projected 
     spending as of August 2007 and certified by the state to the 
     Secretary not later than September 30, 2007.
       The annual adjustment for health care cost growth and child 
     population growth is the product of (1) 1 plus the percentage 
     increase (if any) in the projected per capita spending in the 
     National Health Expenditures for the fiscal year over the 
     prior fiscal year, and (2) 1.01 plus the percentage increase 
     in the child population (under age 19) in each state as of 
     July 1 of the fiscal year over the prior fiscal year's, 
     based on the most timely and accurate published estimates 
     from the Census Bureau.
       For FY2009 to FY2012, a state's allotment is calculated as 
     110% of its projected spending for that year, as submitted to 
     CMS no later than August 31 of the preceding fiscal year.

[[Page S10175]]

       For FY2008, if the state allotments as calculated exceed 
     the available national allotment, the allotments are reduced 
     proportionally. For FY2009 to FY2012, if the state allotments 
     as calculated exceed the available national allotment, then 
     the available national allotment is distributed to each state 
     according to its percentage calculated as the sum of the 
     following four factors:
       Each state's projected federal CHIP expenditures for that 
     fiscal year (as certified by the state to the Secretary no 
     later than the August 31 of the preceding fiscal year), 
     calculated as a percentage of the national total, multiplied 
     by 75%;
       Each state's number of low-income children (based on the 
     most timely and accurate published estimates from the Census 
     Bureau), calculated as a percentage of the national total, 
     multiplied by 12\1/2\%;
       Each state's projected federal CHIP expenditures for the 
     preceding fiscal year (as certified by the state to the 
     Secretary in November of the fiscal year), calculated as a 
     percentage of the national total, multiplied by 7\1/2\%; and
       Each state's actual federal CHIP expenditures for the 
     second preceding fiscal year, as determined by the Secretary, 
     calculated as a percentage of the national total, multiplied 
     by 5%.
       If a state's projected CHIP expenditures for FY2009 to 
     FY2012 are at least 10% more than the last year's allotment 
     (excluding any reduction in states' allotments due to 
     insufficient available national allotment) then, unless the 
     state received approval in the prior year of a state plan 
     amendment or waiver to expand CHIP coverage or the state 
     received a payment from the CHIP Contingency Fund, the state 
     must submit to the Secretary by August 31 before the fiscal 
     year information relating to the factors that contributed to 
     the need for the increase in the state's allotment, as well 
     as any other information that the Secretary may require for 
     the state to demonstrate the need for the increase in the 
     state's allotment. The Secretary shall notify the state in 
     writing within 60 days after receipt of the information that 
     (1) the projected expenditures are approved or disapproved 
     (and if disapproved, the reasons for disapproval); or (2) 
     specified additional information is needed. If the Secretary 
     disapproved the projected expenditures or determined 
     additional information is needed, the Secretary shall provide 
     the state with a reasonable opportunity to submit additional 
     information to demonstrate the need for the increase in the 
     State's allotment for the fiscal year. If a determination has 
     not determined by September 30 whether the state has 
     demonstrated the need for the increase in its allotment, the 
     Secretary shall provide the state with a provisional 
     allotment for the fiscal year equal to 110% of last year's 
     allotment (excluding any reduction in states' allotments due 
     to insufficient available national allotment). Once the 
     Secretary makes a determination, the Secretary may adjust the 
     state's allotment (and the allotments of other states) 
     accordingly, but not later than November 30 of the fiscal 
     year.
       For FY2008 allotment factors based on CHIP expenditures, 
     the Secretary of Health and Human Services (HHS) shall use 
     the most recent FY2007 expenditure data available to the 
     Secretary before the start of FY2008. The Secretary may 
     adjust the FY2008 allotments based on the actual expenditure 
     data reported to CMS no later than November 30, 2007; the 
     Secretary may not make adjustments after December 31, 2007.
       For purposes of determining a state's allotment, the 
     state's projected expenditures shall include payments 
     projected using Sec. 2105(g) (discussed in Section 110) and 
     for certain CHIP-enrolled parents and childless adults 
     (discussed in Section 105).


             Section 103. One-Time Appropriation for FY2012

     Current Law
       No provision.
     Explanation of Provision
       In FY 2012, a one-time appropriation of $12,500,000,000 
     shall be made to the Secretary of Health and Human Services 
     to add to the funds already provided under section 2104(a) 
     for that year only. Such funds shall be distributed by the 
     Secretary in a manner consistent with and under the same 
     terms and conditions of section 102 of this Act.


   Section 104. Improving funding for the territories under CHIP and 
                                Medicaid

     Current Law
       The territories were to receive 0.25 percent of the total 
     appropriations provided in Sec. 2104(a). Later legislation 
     added specific appropriations for the territories in FY1999 
     to FY2007:
       $32,000,000 in FY 1999;
       $34,200,000 in FY 2000;
       $34,200,000 in FY 2001;
       $25,200,000 in FY 2002;
       $25,200,000 in FY 2003;
       $25,200,000 in FY 2004;
       $32,400,000 in FY 2005;
       $32,400,000 in FY 2006; and
       $40,000,000 in FY 2007.
       For FY 1999, the $32 million represented approximately 0.75 
     percent of the total appropriations in Sec. 2104(a). For 
     FY2000 to FY2007, the additional appropriation equaled 0.8 
     percent of the total appropriations in Sec. 2104(a). Combined 
     with the 0.25 percent available through the original enacting 
     legislation, the territories were allotted 1.05% of the total 
     appropriations in Sec. 2104(a) from FY2000 to FY2007.
       The amounts set aside for the territories were distributed 
     according to the following percentages provided in statute: 
     Puerto Rico, 91.6 percent; Guam, 3.5 percent; the Virgin 
     Islands, 2.6 percent; American Samoa, 1.2 percent; and the 
     Northern Mariana Islands, 1.1 percent.
       Medicaid (and SCHIP) programs in the territories are 
     subject to spending caps specified in statute. The federal 
     Medicaid matching rate, which determines the share if 
     Medicaid expenditures paid for by the federal government, is 
     statutorily set at 50 percent of the territories. Therefore, 
     the federal government pays 50% of the cost of Medicaid items 
     and services in the territories up to the spending caps. For 
     the 50 states and DC, certain administrative functions have a 
     higher federal match. For example, startup expenses for 
     specified computer systems are matched at 90%, and there is a 
     100% match for the implementation and operation of 
     immigration status verification systems.
     Explanation of Provision
       From the national CHIP appropriation, the allotments to the 
     territories are calculated as follows. For FY2008, each 
     territory's allotment is its highest annual federal CHIP 
     spending between FY1998 and FY2007, plus the annual 
     adjustment for health care cost growth and national child 
     population growth. FY2007 spending will be determined by the 
     Secretary based on the most timely and accurate published 
     estimates of the Census Bureau. For FY2009 through FY2012, 
     each territory's allotment is the prior year's allotment, 
     plus the annual adjustment for health care cost growth and 
     national child population growth.
       For FY2008 and each fiscal year thereafter, federal 
     matching payments for specified data reporting systems (i.e., 
     the design, development, and operations of claims processing 
     systems and citizenship documentation data systems in each of 
     Puerto Rico, the Virgin Islands, Guam, the Northern Mariana 
     Islands, and American Samoa would be subject to the 90% 
     federal match rate for the start-up expenses associated with 
     such systems and the 75% federal match rate for the operation 
     of such systems without regard to the specified spending 
     caps.
       The provision would require the Government Accountability 
     Office (GAO) to submit a report to the appropriate committees 
     of Congress not later than September 30, 2009, with regard to 
     the territories' eligible Medicaid and CHIP populations, 
     their historical and projected spending and the ability of 
     capped funding streams to address such needs, the extent to 
     which the federal poverty level is used for determining 
     Medicaid and CHIP eligibility in the territories, and the 
     extent to which the territories participate in data 
     collection and reporting with regard to Medicaid and CHIP 
     and specifically the extent to which they participate in 
     the Current Population Survey versus the American 
     Community Survey, which are federal surveys that estimate 
     the number of low-income children in the states. The 
     report is also to provide recommendations for improving 
     Medicaid and CHIP funding to the territories.


               Section 105. Incentive bonuses for states

     Current Law
       No provision.
     Explanation of Provision
       Incentive Pool
       A CHIP Incentive Bonuses Pool is established in the U.S. 
     Treasury. The Incentive Pool receives deposits from an 
     initial appropriation in FY2008 of $3 billion, along with 
     transfers from six different potential sources, with the 
     currently available but not immediately required funds 
     invested in interest-bearing U.S. securities that provide 
     additional income into the Incentive Pool. The six sources 
     for deposits are as follows:
       On December 1, 2007, the amount by which states' FY2006 and 
     FY2007 allotments not expended by September 30, 2007, exceed 
     50% of the federal share of the FY2008 allotment, as 
     determined by the Secretary by not later than October 1, 
     2007;
       On each December 1 from 2008 to 2012, any of the annual 
     CHIP appropriation not used by the states;
       On October 1 of fiscal years 2009 to 2012, the amount by 
     which the unspent funds from the prior year's allotment 
     exceeds the applicable percentage of that allotment. The 
     applicable percentage is 20% for FY2009, and 10% for FY2010, 
     FY2011, and FY2012;
       Any original allotment amounts not expended by the end of 
     their second year of availability;
       On October 1, 2009, any amounts set aside for transition 
     off of CHIP coverage for childless adults that are not 
     expended by September 30, 2009; and
       On October 1 of FY2009 through FY2012, any amounts in the 
     CHIP Contingency Fund in excess of the fund's aggregate cap, 
     as well as any Contingency Fund payments provided to a state 
     that are unspent at the end of the fiscal year following the 
     one in which the funds were provided.
       Funds from the Incentive Pool are payable in FY2008 to 
     FY2012 to states that have increased their Medicaid and CHIP 
     enrollment among low-income children above a defined 
     baseline, with associated payments as follows (reduced 
     proportionally if necessary). (For purposes of Incentive Pool 
     policies, a ``child'' enrolled in Medicaid means an 
     individual under age 19--or age 20 or 21, if a state has so 
     elected under its Medicaid plan; and ``low-income children'' 
     means children in

[[Page S10176]]

     families with incomes at 200% of federal poverty or below.) 
     Beginning in FY2009, a state may receive a payment from the 
     Incentive Pool if its average monthly enrollment of low-
     income children in CHIP and Medicaid for the coverage period 
     (which is defined as the last two quarters of the preceding 
     fiscal year and the first two quarters of the fiscal year, 
     except that for FY2009 it is based only on the first two 
     quarters of FY2009) exceeds the baseline monthly average.
       For FY2009, the baseline monthly average is each state's 
     average monthly enrollment in the first two quarters of 
     FY2007 enrollment (as determined over a 6-month period on the 
     basis of the most recent information reported through the 
     Medicaid Statistical Information System (MSIS) multiplied by 
     the sum of 1.02 and the percentage increase in the population 
     of low-income children in the state from FY2007 to FY2009, as 
     determined by the Secretary based on the most recent 
     published estimates from the Census Bureau before the 
     beginning of FY2009. For FY2010 onward, the baseline monthly 
     average is the prior year's baseline monthly average 
     multiplied by the sum of 1.01 and the percentage increase in 
     the population of low-income children in the state over the 
     preceding fiscal year, as determined by the Secretary based 
     on the most recent published estimates from the Census Bureau 
     before the beginning of the fiscal year.
       A state eligible for a bonus shall receive in the last 
     quarter of the fiscal year the following amount, depending on 
     the ``excess'' of the state's enrollment above the baseline 
     monthly average: (i) If such excess with respect to the 
     number of individuals who are enrolled in the State plan 
     under title XIX does not exceed 2 percent, the product of $75 
     and the number of such individuals included in such excess; 
     (ii) if such excess with respect to the number of individuals 
     who are enrolled in the State plan under title XIX exceeds 2 
     percent, but does not exceed 5 percent, the product of $300 
     and the number of such individuals included in such excess; 
     and (iii) if such excess with respect to the number of 
     individuals who are enrolled in the State plan under title 
     XIX exceeds 5 percent, the product of $625 and the number of 
     such individuals included in such excess. For FY2010 onward, 
     these dollar amounts are to be increased by the percentage 
     increase (if any) in the projected per capita spending in the 
     National Health Expenditures for the calendar year beginning 
     on January 1 of the coverage period over that of the 
     preceding coverage period.
  Payments from the Incentive Pool shall be used for any purpose that 
the State determines is likely to reduce the percentage of low-income 
children in the State without health insurance.
       Redistribution of FY2005 Allotments
       An appropriation of $5,000,000 is provided to the Secretary 
     for FY2008 for improving the timeliness of MSIS and to 
     provide guidance to states with respect to any new reporting 
     requirements related to such improvements. Amounts 
     appropriated are available until expended. The resulting 
     improvements are to be designed and implemented so that 
     beginning no later than October 1, 2008, Medicaid and CHIP 
     enrollment data are collected and analyzed by the Secretary 
     within six months of submission.
       FY2005 original CHIP allotments unspent at the end of 
     FY2007 are to be redistributed on a proportional basis to 
     states that were projected at any point in FY2007 to exhaust 
     their federal CHIP allotments.


  Section 106. Phase-out of coverage for nonpregnant childless adults 
             under CHIP, conditions for coverage of parents

     Current Law
       Section 1115 of the Social Security Act gives the Secretary 
     of HHS broad authority to modify virtually all aspects of the 
     Medicaid and SCHIP programs. Under Section 1115, the 
     Secretary may waive requirements in Section 1902 (usually, 
     freedom of choice of provider, comparability, and 
     statewideness). For SCHIP, no specific sections or 
     requirements are cited as ``waive-able.'' SCHIP statute 
     simply states that Section 1115, pertaining to research and 
     demonstration projects, applies to SCHIP. States may obtain 
     waivers that allow them to provide services to individuals 
     not traditionally eligible for SCHIP, or limit benefit 
     packages for certain groups as long as the Secretary 
     determines that these programs further the goals of SCHIP.
       Approved SCHIP Section 1115 waivers are deemed to be part 
     of a state's SCHIP state plan for purposes of federal 
     reimbursement. Costs associated with waiver programs are 
     subject to each state's enhanced-FMAP. Under SCHIP Section 
     1115 waivers, states must meet an ``allotment neutrality 
     test'' where combined federal expenditures for the state's 
     regular SCHIP program and for the state's SCHIP demonstration 
     program are capped at the state's individual SCHIP allotment. 
     This policy limits federal spending to the capped allotment 
     levels.
       Under current law, including 1115 waiver authority, states 
     cover pregnant women, parents of Medicaid and SCHIP eligible 
     children and childless adults in their SCHIP programs.
       The Deficit Reduction Act of 2005 prohibited the approval 
     of new demonstration programs that allow federal SCHIP funds 
     to be used to provide coverage to nonpregnant childless 
     adults, but allowed for the continuation and renewal of such 
     existing Medicaid or SCHIP waiver projects affecting federal 
     SCHIP funds that were approved under the Section 1115 waiver 
     authority before February 8, 2006.
     Explanation of Provision
       Childless Adults
       The provision would prohibit the approval or renewal of 
     Section 1115 demonstration waivers that allow federal CHIP 
     funds to be used to provide coverage to nonpregnant childless 
     adults (hereafter referred to as applicable existing waivers) 
     on or after the date of enactment of this Act. Beginning on 
     or after October 1, 2008, rules regarding the period to which 
     an applicable existing waiver would apply, individuals 
     eligible for coverage under such waivers, and the amount of 
     federal payment available for such coverage would be subject 
     to the following requirements: (1) no federal CHIP funds 
     would be available for coverage of nonpregnant childless 
     adults under an applicable existing waiver after September 
     30, 2008, (2) State-requested extensions of applicable 
     existing waivers that would otherwise expire before October 
     1, 2008, would be granted by the Secretary but only through 
     September 30, 2008, and (3) coverage to a nonpregnant 
     childless adult under applicable existing waivers provided 
     during FY2008 will be reimbursed at the CHIP enhanced FMAP 
     rate.
       States with applicable existing waivers (that are otherwise 
     terminated under this provision) would be permitted to extend 
     coverage, through FY2009, to individual nonpregnant childless 
     adults who received coverage under the applicable existing 
     waiver at any time during FY2008 (regardless of whether the 
     individual lost coverage at any time during FY2008 and was 
     later provided benefit coverage under the waiver in that 
     fiscal year) subject to the following restrictions: (1) for 
     each such State, the Secretary would be required to set aside 
     an amount as part of a separate allotment equal to the 
     federal share of the State's projected FY2008 expenditures 
     (as certified by the state and submitted to the Secretary by 
     August 31, 2008) for providing coverage under the waiver to 
     such individuals in FY2008 increased by the annual adjustment 
     for per capita health care growth (described in Section 102 
     of this bill), (2) the Secretary may adjust the set aside 
     amount based on State-reported FY2008 expenditure data 
     (reported on CMS Form 64 or CMS Form 21 not later than 
     November 30, 2008), but in no case shall the Secretary adjust 
     such amount after December 31, 2008, and (3) the Secretary 
     would pay an amount equal to the federal Medicaid matching 
     rate for expenditures related to such coverage (provided 
     during FY2009) up to the set-aside spending cap.
       States with existing CHIP waivers to extend coverage to 
     nonpregnant childless adults (that are otherwise terminated 
     under this provision) would be permitted to submit a request 
     to CMS (not later than June 30, 2009) for a Medicaid 
     nonpregnant childless adult waiver. For such states, the 
     Secretary would be required to make a decision to deny or 
     approve such application within 90 days of the date of 
     submission. For such states, if no CMS decision to approve or 
     deny such request has been made as of September 30, 2009, the 
     provision would allow such application to be deemed approved.
       States with applicable existing waivers that request a 
     Medicaid nonpregnant childless adult waiver under this 
     provision would be required to meet the following ``budget 
     neutrality'' requirements. For fiscal year 2010, allowable 
     waiver expenditures for such populations would not be 
     permitted to exceed the total amount payments made to the 
     State (as specified above) for FY2009, increased by the 
     percentage increase (if any) in the projected per capita 
     spending in the National Health Expenditures for fiscal year 
     2010 over fiscal year 2009). In the case of any succeeding 
     fiscal year, allowable waiver expenditures for such 
     populations would not be permitted to exceed each such 
     State's set aside amount (described above) for the preceding 
     fiscal year, increased by the percentage increase (if any) in 
     the projected per capita spending in the National Health 
     Expenditures for such fiscal year over the prior fiscal year.
       Parents
       The provision would also prohibit the approval of 
     additional Section 1115 demonstration waivers that allow 
     federal CHIP funds to be used to provide coverage to 
     parent(s) of a targeted low-income child(ren) (hereafter 
     referred to as applicable existing CHIP parent coverage 
     waiver) on or after the date of enactment of this Act. 
     Beginning on or after October 1, 2009, rules regarding the 
     period to which an applicable existing CHIP parent coverage 
     waiver extends coverage to eligible populations, and the 
     amount of federal payment available for coverage to such 
     populations under the waiver would be subject to the 
     following requirements: (1) State-requested extensions of 
     applicable existing CHIP-financed Section 1115 parent 
     coverage waivers that would otherwise expire before October 
     1, 2009, would be granted by the Secretary but only through 
     September 30, 2009, and (2) the CHIP enhanced FMAP rate would 
     apply for such coverage to such eligible populations during 
     FY2008 and FY2009.
       States with existing CHIP waivers to extend coverage to 
     parent(s) of targeted low-income child(ren) would be 
     permitted to continue such assistance during each of fiscal

[[Page S10177]]

     years 2010, 2011, and 2012 subject to the following 
     requirements: (1) for each such State and for each such 
     fiscal year, the Secretary would be required to set aside an 
     amount as part of a separate allotment equal to the federal 
     share of 110% of the State's projected expenditures (as 
     certified by the state and submitted to the Secretary by 
     August 31 of the preceding fiscal year) for providing waiver 
     coverage to such individuals enrolled in the waiver in the 
     applicable fiscal year, and (2) the Secretary would pay the 
     State from the set aside amount (specified above) for each 
     such fiscal year an amount equal to the applicable percentage 
     for expenditures in the quarter to provide coverage as 
     specified under the waiver to parent(s) of targeted low-
     income child(ren).
       In fiscal year 2010 only, costs associated with such parent 
     coverage would be subject to each such state's CHIP enhanced 
     FMAP for States that meet one of the outreach or coverage 
     benchmarks (listed below) in FY2009, or each such state's 
     Medicaid FMAP rate for all other states. The provision would 
     prohibit federal matching payments for the payment of 
     services beyond the set-aside spending cap.
       For fiscal year 2011 or 2012, costs associated with such 
     parent coverage would be subject to: (1) each such state's 
     Reduced Enhanced Matching Assistance Percentage (REMAP) 
     (i.e., a percentage which would be equal to the sum of (a) 
     each such state's FMAP percentage and (b) the number of 
     percentage points equal to one-half of the difference between 
     each such state's FMAP rate and each such state's enhanced 
     FMAP rate) if the state meets one of the coverage benchmarks 
     (listed below) for FY2010 or FY2011 (as applicable), or (2) 
     each such state's FMAP rate if the state failed to meet any 
     of the coverage benchmarks (listed below) for the applicable 
     fiscal year. The provision would prohibit federal matching 
     payments for the payment of services beyond the setaside 
     spending cap.
       FY2010 outreach and coverage benchmarks include: (1) the 
     state implemented a significant child outreach campaign 
     including (a) the state was awarded an outreach and 
     enrollment grant (under Section 201 of this bill) for fiscal 
     year 2009, (b) the state implemented 1 or more process 
     measures for that fiscal year, or (c) the state has submitted 
     a specific plan for outreach for such fiscal year, (2) the 
     state ranks in the lowest 1/3 of the States in terms of the 
     State's percentage of low-income children without health 
     insurance based on timely and accurate published estimates of 
     the Bureau of the Census, or (3) the State qualified for a 
     payment from the Incentive Fund for the most recent coverage 
     period.
       FY2011 and 2012 coverage benchmarks include: (1) the state 
     ranks in the lowest \1/3\ of the States in terms of the 
     State's percentage of low-income children without health 
     insurance based on timely and accurate published estimates of 
     the Bureau of the Census, and (2) the State qualified for a 
     payment from the Incentive Fund for the most recent coverage 
     period.
       A rule of construction clarifies that states are not 
     prohibited from submitting applications for 1115 waivers to 
     provide medical assistance to a parent of a targeted low-
     income child.
       The General Accountability Office would be required to 
     conduct a study to determine if the coverage of a parent, 
     caretaker relative, or legal guardian of a targeted low-
     income child increases the enrollment of or quality of care 
     for children, and if such parents, relatives, and legal 
     guardians are more likely to enroll their children in CHIP or 
     Medicaid. Results of the study (and report recommended 
     changes) would be reported to appropriate committees of 
     Congress 2 years after the date of enactment.


Section 107. State option to cover low-income pregnant women under CHIP 
                     through a State plan amendment

     Current Law
       Under SCHIP, states can cover pregnant women ages 19 and 
     older in one of two ways: (1) via a special waiver of program 
     rules (through Section 1115 authority), or (2) by providing 
     coverage as permitted through regulation. In the latter case, 
     coverage includes prenatal and delivery services only.
       In general, SCHIP allows states to cover targeted low-
     income children with family income that is above applicable 
     Medicaid eligibility levels in a given state. States can set 
     the upper income level up to 200% FPL, or if the applicable 
     Medicaid income level was at or above 200% FPL before SCHIP, 
     the upper income limit may be raised an additional 50 
     percentage points above that level. Other SCHIP eligibility 
     restrictions include (1) the child must be uninsured, (2) the 
     child must be otherwise ineligible for regular Medicaid, and 
     (3) the child cannot be an inmate of a public institution 
     or a patient in an institution for mental disease, or 
     eligible for coverage under a state employee health plan. 
     States may provide SCHIP coverage to children who are 
     covered under a health insurance program that has been in 
     operation since before July 1, 1997 and that is offered by 
     a state that receives no federal funds for this program. 
     States may use enrollment restrictions such as capping 
     total program enrollment, creating waiting lists, and 
     instituting a minimum period of no insurance (e.g., 6 
     months) before being eligible.
       Under regular Medicaid, states must provide coverage for 
     pregnant women with income up to 133% FPL, and at state 
     option, may extend such coverage to pregnant women with 
     income up to 185% FPL. States must also provide coverage to 
     first-time pregnant women with income that meets former cash 
     assistance program rules (which were generally well below 
     100% FPL). The period of coverage for these mandatory and 
     optional pregnant women is during pregnancy through the end 
     of the month in which the 60 days postpartum period ends. In 
     addition, waiver authority may be used to cover pregnant 
     women at even higher income levels and for extended periods 
     of time (e.g., 18 or 24 months postpartum).
       Under regular Medicaid, states may temporarily enroll 
     pregnant women whose family income appears to be below 
     Medicaid income standards for up to 2 months until a final 
     formal determination of eligibility is made. Entities that 
     may qualify to make such presumptive eligibility 
     determinations for pregnant women include Medicaid providers 
     that are outpatient hospital departments, rural health 
     clinics and certain other clinics, and other entities 
     including certain primary care health centers and rural 
     health care programs funded under Sections 330 and 330A of 
     the Public Health Service Act, grantees under the Maternal 
     and Child Health Block Grant Program, entities receiving 
     funds under the Health Services for Urban Indians program, 
     and entities that participate in WIC, the Commodity 
     Supplemental Food Program, a state perinatal program (as 
     designated by the state), or in the Indian Health Service or 
     a health program or facility operated by tribes or tribal 
     organizations under the Indian Self Determination Act.
       Mandatory Medicaid eligibility applies to children under 
     age 6 in families with income at or below 133% FPL. In 
     addition, states may cover newborns under age 1 up to 185% 
     FPL under Medicaid. Children born to Medicaid-eligible 
     pregnant women must be deemed to be eligible for Medicaid 
     from the date of birth up to age 1 so long as the child is a 
     member of the mother's household, and the mother remains 
     eligible for Medicaid (or would remain eligible if pregnant). 
     During this period of deemed eligibility for the newborn, for 
     claiming and payment purposes, the Medicaid identification 
     (ID) number of the mother must also be used for the newborn, 
     unless the state issues a separate ID number for the child 
     during this period. In general, newborns may also be enrolled 
     in SCHIP if they meet the applicable financial standards in a 
     given state, which build on top of Medicaid's rules.
       For families with income below 150% FPL, premiums cannot 
     exceed nominal amounts specified in Medicaid regulations, and 
     service-related cost-sharing is limited to nominal Medicaid 
     amounts for the subgroup under 100% FPL and slightly higher 
     amounts in SCHIP regulations for the subgroup with income 
     between 100-150% FPL.
       For families with income above 150% FPL, premiums and cost-
     sharing may be imposed in any amount as long as such costs 
     for higher-income children are not less than the costs for 
     lower-income children. Total premiums and cost-sharing 
     incurred by all SCHIP children cannot exceed 5% of annual 
     family income.
       Other cost-sharing protections also apply. Applicable 
     premium and cost-sharing amounts cannot favor children from 
     families with higher income over children in families with 
     lower income. No cost-sharing may be applied to preventive 
     services.
     Explanation of Provision
       The provision would allow states to provide optional 
     coverage under CHIP to pregnant women, through a state plan 
     amendment, if certain conditions are met, including (1) the 
     state has established an income eligibility level of at least 
     185% FPL for mandatory, welfare-related qualified pregnant 
     women and optional poverty-related pregnant women under 
     Medicaid, (2) the state does not apply an effective income 
     level under the state plan amendment for pregnant women that 
     is lower than the effective income level (expressed as a 
     percent of poverty and accounting for applicable income 
     disregards) for mandatory, welfare-related qualified pregnant 
     women and optional poverty-related pregnant women under 
     Medicaid on the date of enactment of this provision to be 
     eligible for Medicaid as pregnant women, (3) the state does 
     not provide coverage for pregnant women with higher family 
     income without covering such pregnant women with a lower 
     family income, (4) the state provides pregnancy-related 
     assistance (defined below) for targeted low-income pregnant 
     women in the same manner, and subject to the same 
     requirements, as the state provides child health assistance 
     for targeted low-income children under the state CHIP plan, 
     and in addition to providing child health assistance for such 
     women, (5) the state does not apply any exclusion of benefits 
     for pregnancy-related assistance based on any pre-existing 
     condition or any waiting period (including waiting periods to 
     ensure that CHIP does not substitute for private insurance 
     coverage), and (6) the state must provide the same cost-
     sharing protections to pregnant women as applied to CHIP 
     children, and all cost-sharing incurred by targeted low-
     income pregnant women under CHIP would be capped at 5% of 
     annual family income.
       States that elect this new optional coverage for pregnant 
     women under CHIP and that meet all the above conditions 
     associated with this option, may also elect to provide 
     presumptive eligibility for pregnant women, as defined in the 
     Medicaid statute, to targeted low-income pregnant women under 
     CHIP.

[[Page S10178]]

       Pregnancy-related assistance would include all the services 
     covered as child health assistance under the state's CHIP 
     program, and includes medical assistance that would be 
     provided to a pregnant woman under Medicaid, during pregnancy 
     through the end of the month in which the 60 day postpartum 
     period ends. The upper income limit for coverage of targeted 
     low-income pregnant women under CHIP could be up to the level 
     for coverage of targeted low-income children in the state. As 
     with targeted low-income children under CHIP, the new group 
     of targeted low-income pregnant women must be determined 
     eligible, be uninsured, and must not be an inmate of a public 
     institution or a patient in an institution for mental disease 
     or eligible for coverage under a state employee health 
     benefit plan. Also as with targeted low-income children, 
     pregnant women may include those covered under a health 
     insurance program that has been in operation since before 
     July 1, 1997 and that is offered by a state that receives no 
     federal funds for this program.
       The provision would also deem children born to the new 
     group of targeted low-income pregnant women under CHIP to be 
     eligible for Medicaid or CHIP, as applicable.
       Such newborns would be covered from birth to age 1. During 
     this period of eligibility, the mother's identification 
     number must also be used for filing claims for the newborn, 
     unless the state issues a separate identification number for 
     that newborn.
       The provision would also address States that provide 
     assistance through other options. The option to provide 
     assistance in accordance with the preceding subsections of 
     this section shall not limit any other option for a State to 
     provide (A) child health assistance through the application 
     of sections 457.10, 457.350(b)(2), 457.622(c)(5), and 
     457.626(a)(3) of title 42, Code of Federal Regulations, or 
     (B) pregnancy-related services through the application of any 
     other waiver authority (as in effect on June 1, 2007).
       Any State that provides child health assistance under any 
     authority described in paragraph (1) may continue to provide 
     such assistance, as well as postpartum services, through the 
     end of the month in which the 60-day period (beginning on the 
     last day of the pregnancy) ends, in the same manner as 
     assistance and postpartum services would be provided if 
     provided under the State plan under title XIX, but only if 
     the mother would otherwise satisfy the eligibility 
     requirements that apply under the State child health plan 
     (other than with respect to age) during such period.
       A rule of construction clarifies that nothing in this 
     subsection shall be construed to (A) infer the congressional 
     intent regarding the legality or illegality of the content of 
     sections of title 42, Code of Federal Regulations, specified 
     in paragraph (l)(A), or (B) modify the authority to provide 
     pregnancy-related services under a waiver specified in 
     paragraph (l)(B).
       For the new group of targeted low-income pregnant women, 
     additional conforming amendments would prohibit cost-sharing 
     for pregnancy-related services and waiting periods prior to 
     enrollment or for the purpose of preventing crowd-out of 
     private health insurance.


                   Section 108. CHIP contingency fund

     Current Law
       No provision.
     Explanation of Provision
       A CHIP Contingency Fund is established in the U.S. 
     Treasury. The Contingency Fund receives deposits through a 
     separate appropriation. For FY2009, the appropriation to the 
     Fund is equal to 12.5% of the available national allotment 
     for CHIP. For FY2010 through FY2012, the appropriation is 
     such sums as are necessary for making payments to eligible 
     states for the fiscal year, as long as the annual payments do 
     not exceed 12.5% of that fiscal year's available national 
     allotment for CHIP. Balances that are not immediately 
     required for payments from the Fund are to be invested in 
     U.S. securities that provide addition income to the Fund, as 
     long as the annual payments do not cause the Fund to exceed 
     12.5% of the available national allotment for CHIP. Amounts 
     in excess of the 12.5% limit shall be deposited into the 
     Incentive Pool. For purposes of the CHIP Contingency Fund, 
     amounts set aside for block grant payments for transitional 
     coverage of childless adults shall not count as part of the 
     available national allotment.
       Payments from the Fund are to be used only to eliminate any 
     eligible state's shortfall (that is, the amount by which a 
     state's available federal CHIP allotments are not adequate to 
     cover the state's federal CHIP expenditures, on the basis of 
     the most recent data available to the Secretary or requested 
     from the state by the Secretary).
       The Secretary shall separately compute the shortfalls 
     attributable to children and pregnant women, to childless 
     adults, and to parents of low-income children. No payment 
     from the Contingency Fund shall be made for nonpregnant 
     childless adults. Any payments for shortfalls attributable to 
     parents shall be made from the Fund at the relevant matching 
     rate. Contingency funds are not transferable among 
     allotments.
       Eligible states, which cannot be a territory, for a month 
     in FY2009 to FY2012 are those that meet any of the following 
     criteria:
       The state's available federal CHIP allotments are at least 
     95% but less than 100% of its projected federal CHIP 
     expenditures for the fiscal year (i.e., less than 5% 
     shortfall in federal funds), without regard to any payments 
     provided from the Incentive Fund; or
       The state's available federal CHIP allotments are less than 
     95% of its projected federal CHIP expenditures for the fiscal 
     year (i.e., more than 5% shortfall in federal funds) and that 
     such shortfall is attributable to one or more of the 
     following: (1) One or more parishes or counties has been 
     declared a major disaster and the President has determined 
     individual and public assistance has been warranted from the 
     federal government pursuant to the Stafford Act, or a public 
     health emergency was declared by the Secretary pursuant to 
     the Public Health Service Act; (2) the state unemployment 
     rate is at least 5.5% during any 13 consecutive week period 
     during the fiscal year and such rate is at least 120% of the 
     state unemployment rate for the same period as averaged over 
     the last three fiscal years; (3) the state experienced a 
     recent event that resulted in an increase in the percentage 
     of low-income children in the state without health insurance 
     (as determined on the basis of the most timely and accurate 
     published estimates from the Census Bureau) that was outside 
     the control of the state and warrants granting the state 
     access to the Fund, as determined by the Secretary.
       The Secretary shall make monthly payments from the Fund to 
     all states determined eligible for a month. If the sum of the 
     payments from the Fund exceeds the amount available, the 
     Secretary shall reduce each payment proportionally.
       If a state was determined to be eligible in a given fiscal 
     year, that does not make the state eligible in the following 
     fiscal year. In the case of an event that occurred after July 
     1 of the fiscal year that resulted in the declaration of a 
     Stafford Act or public health emergency that increased the 
     number of uninsured low-income children as described above, 
     any related Contingency Fund payment shall remain available 
     until the end of the following fiscal year.
       The Secretary shall provide annual reports to Congress on 
     the Contingency Fund, the payments from it, and the events 
     that caused states to apply for payment.


 Section 109. 2-year availability of allotments; expenditures counted 
                       against oldest allotments

     Current Law
       SCHIP allotments (currently through FY2007) are available 
     for three years. Allotments unspent after three years are 
     available for reallocation. For example, the FY2004 allotment 
     was available through the end of FY2006; any remaining 
     balances at the end of FY2006 were redistributed to other 
     states.
     Explanation of Provision
       CHIP allotments through FY2006 are available for three 
     years. CHIP allotments made for FY2007 through FY2012 are 
     available for two years.
       Payments to states from the Incentive Pool are available 
     until expended by the state. Payments for a month from the 
     Contingency Fund are available through the end of the fiscal 
     year, except in the case of an event that occurred after July 
     1 of the fiscal year that resulted in the declaration of a 
     Stafford Act or public health emergency that increased the 
     number of uninsured low-income children.
       States' federal CHIP expenditures on or after October 1, 
     2007, shall be counted first against the Contingency Funds 
     from the earliest available month in the earliest fiscal 
     year, then against the earliest available allotments.
       A State may elect, but is not required, to count CHIP 
     expenditures against any incentive bonuses paid to the State.
       Expenditures for coverage of nonpregnant childless adults 
     in FY2009 and of parents of targeted low-income children in 
     FY2010 through FY2012 shall be counted only against the 
     amount set aside for such coverage


  Section 110. Limitation on matching rate for States that propose to 
cover children with effective family income that exceeds 300 percent of 
                            the poverty line

     Current Law
       The federal medical assistance percentage (FMAP) is the 
     rate at which states are reimbursed for most Medicaid service 
     expenditures. It is based on a formula that provides higher 
     reimbursement to states with lower per capita incomes 
     relative to the national average (and vice versa); it has a 
     statutory minimum of 50% and maximum of 83%. There are 
     statutory exceptions to the FMAP formula for the District of 
     Columbia (since FY1998) and Alaska (for FY1998-FY2007). In 
     addition, the territories have FMAPs set at 50% and are 
     subject to federal spending caps.
       The enhanced FMAP (E-FMAP) for SCHIP equals a state's 
     Medicaid FMAP increased by the number of percentage points 
     that is equal to 30% multiplied by the number of percentage 
     points by which the FMAP is less than 100%. For example, in 
     states with an FMAP of 60%, the E-FMAP equals the FMAP 
     increased by 12 percentage points (60% + [30% multiplied by 
     40 percentage points] = 72%). The E-FMAP has a statutory 
     minimum of 65% and maximum of 85%.
     Explanation of Provision
       For child health assistance or health benefits coverage 
     furnished in any fiscal year inning with FY2008 to a targeted 
     low-income child whose effective family income would exceed 
     300% of the federal poverty line but for the application of a 
     general exclusion of

[[Page S10179]]

     a block of income that is not determined by type of expense 
     or type of income, states would be reimbursed using the FMAP 
     instead of the E-FMAP for services provided to that child. An 
     exception would be provided for states that, on the date of 
     enactment of the Children's Health Insurance Program (CHIP) 
     Reauthorization Act of 2007 has an approved State plan 
     amendment or waiver or has enacted a State law to submit a 
     State plan amendment to provide child health assistance or 
     health benefits under their state child health plan or its 
     waiver of such plan to children above 300% of the poverty 
     line.


   Section 111. Option for qualifying States to receive the enhanced 
  portion of the CHIP matching rate for Medicaid coverage of certain 
                          children current Law

     Current Law
       Section 2105(g) of the Social Security Act permits 
     qualifying states to apply federal SCHIP funds toward the 
     coverage of certain children already enrolled in regular 
     Medicaid (that is, not SCHIP-funded expansions of Medicaid). 
     Specifically, these federal SCHIP funds are used to pay the 
     difference between SCHIP's enhanced Federal Medical 
     Assistance Percentage (FMAP) and the Medicaid FMAP that the 
     state is already receiving for these children. Funds under 
     this provision may only be claimed for expenditures occurring 
     after August 15, 2003.
       Qualifying states are limited in the amount they can claim 
     for this purpose to the lesser of the following two amounts: 
     (1) 20% of the state's original SCHIP allotment amounts (if 
     available) from FY1998, FY1999, FY2000, FY2001, FY2004, 
     FY2005, FY2006, and FY2007 (hence the ``terms ``20% 
     allowance'' and ``20% spending''); and (2) the state's 
     available balances of those allotments. If there is no 
     balance, states may not claim Section 2105(g) spending.
       The statutory definitions for qualifying states capture 
     most of those that had expanded their upper-income 
     eligibility levels for children in their Medicaid programs to 
     185% of the federal poverty level or higher prior to the 
     enactment of SCHIP. Based on statutory definitions, 11 states 
     were determined to be qualifying states: Connecticut, Hawaii, 
     Maryland, Minnesota, New Hampshire, New Mexico, Rhode Island, 
     Tennessee, Vermont, Washington and Wisconsin.
       SCHIP spending under Sec. 2105(g) can be used by qualifying 
     states only for Medicaid enrollees (excluding those covered 
     by an SCHIP-funded expansion of Medicaid) who are under age 
     19 and whose family income exceeds 150% of poverty, to pay 
     the difference between the SCHIP enhanced FMAP and the 
     regular Medicaid FMAP.
     Explanation of Provision
       Qualifying states under Sec. 2105(g) may also use available 
     balances from their CHIP allotments from FY2008 to FY2012 to 
     pay the difference between the regular Medicaid FMAP and the 
     CHIP enhanced FMAP for Medicaid enrollees under age 19 (or 
     age 20 or 21, if the state has so elected in its Medicaid 
     plan) whose family income exceeds 133% of poverty.

                  Title II--A Outreach and Enrollment


            Section 201. Grants for outreach and enrollment

     Current Law
       The federal and state governments share in the costs of 
     both Medicaid and SCHIP, based on formulas defining the 
     federal contribution in federal law. States are responsible 
     for the non-federal share, using state tax revenues, for 
     example, but can also use local government funds to comprise 
     a portion of the non-federal share. Generally, the non-
     federal share of costs under Medicaid and SCHIP cannot be 
     comprised of other federal funds.
       Under Medicaid, there are no caps on administrative 
     expenses that may be claimed for federal matching dollars. 
     Title XXI specifies that federal SCHIP funds can be used for 
     SCHIP health insurance coverage, called child health 
     assistance, which meets certain requirements. Apart from 
     these benefit payments; SCHIP payments for four other 
     specific health care activities can be made, including: (1) 
     other child health assistance for targeted low-income 
     children; (2) health services initiatives to improve the 
     health of SCHIP children and other low-income children; (3) 
     outreach activities; and (4) other reasonable administrative 
     costs. For a given fiscal year, payments for other specific 
     health care activities cannot exceed 10% of the total amount 
     of expenditures for SCHIP benefits and other specific health 
     care activities combined.
     Explanation of Provision
       The provision would establish a new grant program under 
     CHIP to finance outreach and enrollment efforts that increase 
     participation of eligible children in both Medicaid and CHIP. 
     For the purpose of awarding grants, the provision would 
     appropriate $100 million for fiscal years 2008 through 2012. 
     These amounts would be in addition to amounts appropriated 
     for CHIP allotments to states (as per Section 2104 of the 
     CHIP statute) and would not be subject to restrictions on 
     expenditures for outreach activities under current law.
       For each fiscal year, the provision would require that ten 
     percent of the funds appropriated for this new grant would be 
     set aside to finance a national enrollment campaign 
     (described below), and an additional 10 percent would be set-
     side to be used by the Secretary to award grants to Indian 
     Health Service providers and Urban Indian Organizations that 
     receive funds under title V of the Indian Health Care 
     Improvement Act for outreach to, and enrollment of, children 
     who are Indians.
       The provision would require the Secretary to develop and 
     implement a national enrollment campaign to improve the 
     enrollment of under-served child populations in Medicaid and 
     CHIP. Such a campaign may include: (1) the establishment of 
     partnerships with the Secretary of Education and the 
     Secretary of Agriculture to develop national campaigns to 
     link the eligibility and enrollment systems for the programs 
     each Secretary administers that often serve the same 
     children, (2) the integration of information about Medicaid 
     and CHIP in public health awareness campaigns administered by 
     the Secretary, (3) increased financial and technical support 
     for enrollment hotlines maintained by the Secretary to ensure 
     that all states participate in such hotlines, (4) the 
     establishment of joint public awareness outreach initiatives 
     with the Secretary of Education and the Secretary of Labor 
     regarding the importance of health insurance to building 
     strong communities and the economy, (5) the development of 
     special outreach materials for Native Americans or for 
     individuals with limited English proficiency, and (6) such 
     other outreach initiatives as the Secretary determines would 
     increase public awareness of Medicaid and CHIP.
       In awarding grants, the Secretary would be required to give 
     priority to entities that propose to target geographic areas 
     with high rates of eligible but not enrolled children who 
     reside in rural areas, or racial and ethnic minorities and 
     health disparity populations, including proposals that 
     address cultural and linguistic barriers to enrollment, and 
     which submit the most demonstrable evidence that (1) the 
     entity includes members with access to, and credibility with, 
     ethnic or low-income populations in the targeted communities, 
     and (2) the entity has the ability to address barriers to 
     enrollment (e.g., lack of awareness of eligibility, stigma 
     concerns, punitive fears associated with receipt of benefits) 
     as well as other cultural barriers to applying for and 
     receiving coverage under CHIP or Medicaid.
       To receive grant funds, eligible entities would be required 
     to submit an application to the Secretary in such form and 
     manner, and containing such information as the Secretary 
     chooses. As noted above, such applications must include 
     evidence that the entity (a) includes members with access to, 
     and credibility with, ethnic or low-income populations in the 
     targeted communities, and (b) has the ability to address 
     barriers to enrollment (e.g., lack of awareness of 
     eligibility, stigma concerns, punitive fears associated with 
     receipt of benefits) as well as other cultural barriers to 
     applying for and receiving CHIP or Medicaid benefits. The 
     applicable must also include specific quality or outcome 
     performance measures to evaluate the effectiveness of 
     activities funded by the grant. In addition, the applicable 
     must contain an assurance that the entity will (1) conduct an 
     assessment of the effectiveness of such activities against 
     the performance measures, (2) cooperate with the collection 
     and reporting of enrollment data and other information in 
     order for the Secretary to conduct such assessment, and (3) 
     in the case of an entity that is not a state, provide the 
     state with enrollment data and other information necessary 
     for the state to make projections of eligible children and 
     pregnant women. The Secretary would be required to make 
     publicly available the enrollment data and information 
     collected and reported by grantees, and would also be 
     required to submit an annual report to Congress on the funded 
     outreach and enrollment activities conducted under the new 
     grant.
       Seven types of entities would be eligible to receive 
     grants, including (1) a state with an approved CHIP plan, (2) 
     a local government, (3) an Indian tribe or tribal consortium, 
     a tribal organization, an urban Indian organization receiving 
     funds under title V of the Indian Health Care Improvement 
     Act, or an Indian Health Service provider, (4) a federal 
     health safety net organization, (5) a national, local, or 
     community-based public or nonprofit organization, including 
     organizations that use community health workers or community-
     based doula programs, (6) a faith-based organization or 
     consortia, to the extent that a grant awarded to such an 
     entity is consistent with requirements of section 1955 of the 
     Public Health Service Act relating to a grant award to non-
     governmental entities, or (7) an elementary or secondary 
     school.
       Federal health safety net organizations include a number of 
     different types of entities, including for example: (1) 
     federally qualified health centers, (2) hospitals that 
     receive disproportionate share hospital (DSH) payments, (3) 
     entities described in Section 340B(a)(4) of the Public Health 
     Service Act (e.g., certain family planning projects, certain 
     grantees providing early intervention services for HIV 
     disease, certain comprehensive hemophilia diagnostic 
     treatment centers, and certain Native Hawaiian health 
     centers), and (4) any other entity or consortium that 
     serves children under a federally-funded program, 
     including the Special Supplemental Nutrition Program for 
     Women, Infants and Children (WIC), Head Start programs, 
     school lunch programs, and elementary or secondary 
     schools.
       The provision defines ``community health worker'' as an 
     individual who promotes health or nutrition within the 
     community in which the individual resides by (1) serving as a 
     liaison between communities and health

[[Page S10180]]

     care agencies, (2) providing guidance and social assistance 
     to residents, (3) enhancing residents' ability to effectively 
     communicate with health care providers, (4) providing 
     culturally and linguistically appropriate health or nutrition 
     education, (5) advocating for individual and community health 
     or nutrition needs, and (6) providing referral and follow-up 
     services.
       In the case of a State that is awarded an Outreach and 
     Enrollment grant, the State would be required to meet a 
     maintenance of effort requirement with regard to the state 
     share of funds spent on outreach and enrollment activities 
     under the CHIP state plan. For such states, the funds spent 
     on outreach and enrollment under the state plan for a fiscal 
     year would not permitted to be less than the State share of 
     funds spent in the fiscal year preceding the first fiscal 
     year for which the grant is awarded.
       The provision would add translation and interpretation 
     services to the specific health care activities that can be 
     reimbursed under CHIP. Translation or interpretation services 
     in connection with the enrollment and use of services under 
     CHIP by individuals for whom English is not their primary 
     language (as found by the Secretary for the proper and 
     efficient administration of the state plan) would be matched 
     at either 75% or the sum of the enhanced FMAP for the state 
     plus five percentage points, whichever is higher.
       In addition, the 10% limit on payments for other specific 
     health care activities in current CHIP statute would not 
     apply to expenditures for outreach and enrollment activities 
     funded under this section.


       Section 202. Increased outreach and enrollment of Indians

       (a) Agreements with States for Medicaid and CHIP Outreach 
     on or Near Reservations to Increase the Enrollment of Indians 
     in Those Programs
     Current Law
       No provision in the Social Security Act.
       Section 404(a) of the IHCIA requires the Secretary to make 
     grants or enter into contracts with Tribal Organizations for 
     establishing and administering programs on or near federal 
     Indian reservations and trust areas and in or near Alaska 
     Native villages. The purpose of the programs is to assist 
     individual Indians to enroll in Medicare, apply for Medicaid 
     and pay monthly premiums for coverage due to financial need 
     of such individuals. Section 404(b) of the IHCIA directs the 
     Secretary, through the IHS, to set conditions for any grant 
     or contract. The conditions include, but are not limited to: 
     (1) determining the Indian population that is, or could be, 
     served by Medicare and Medicaid; (2) assisting individual 
     Indians to become familiar with and use benefits; (3) 
     providing transportation to Indians to the appropriate 
     offices to enroll or apply for medical assistance; and (4) 
     developing and implementing both an income schedule to 
     determine premium payment levels for coverage of needy 
     individuals and methods to improve Indian participation in 
     Medicare and Medicaid. Section 404( c) of the IHCIA 
     authorizes the Secretary, acting through the IHS, to enter 
     into agreements with tribes, Tribal Organizations, and Urban 
     Indian Organizations to receive and process applications for 
     medical assistance under Medicaid and benefits under Medicare 
     at facilities administered by the IHS, or by a tribe, Tribal 
     Organization or Urban Indian Organization under the Indian 
     Self-Determination Act.
     Explanation of Provision
       The provision would amend Section 1139 of the Social 
     Security Act (replacing the current Section 1139 provision 
     dealing with an expired National Commission on Children).
       The provision would encourage states to take steps to 
     provide for enrollment of Indians residing on or near a 
     reservation in Medicaid and CHIP. The steps could include 
     outreach efforts such as: outstationing of eligibility 
     workers; entering into agreements with the IHS, Indian Tribes 
     (ITs), Tribal Organizations (TOs), and Urban Indian 
     Organizations (UIOs) to provide outreach; education regarding 
     eligibility, benefits, and enrollment; and translation 
     services. The provision would not affect the arrangements 
     between states and Indian Tribes, Tribal Organizations, and 
     Urban Indian Organizations to conduct administrative 
     activities under Medicaid and CHIP.
       The provision would require the Secretary, acting through 
     CMS, to take such steps as necessary to facilitate 
     cooperation with and agreements between states, and the IHS, 
     ITs, TOs, or UIOs relating to the provision of benefits to 
     Indians under Medicaid and CHIP.
       The provision would specify that the following terms have 
     the meanings given to these terms in Section 4 of the Indian 
     Health Care Improvement Act: Indian, Indian Tribe, Indian 
     Health Program, Tribal Organization, and Urban Indian 
     Organization.
       (b) Nonapplication of 10 Percent Limit On Outreach and 
     Certain Other Expenditures
     Current Law
       Title XXI of the Social Security Act provides states with 
     annual federal SCHIP allotments based on a formula set in 
     law. State SCHIP payments are matched by the federal 
     government at an enhanced rate that builds on the base rate 
     applicable to Medicaid. The SCHIP statute also specifies that 
     federal SCHIP funds can be used for SCHIP health insurance 
     coverage, called child health assistance that meets certain 
     requirements. States may also provide benefits to SCHIP 
     children, called targeted low-income children, through 
     enrollment in Medicaid. Apart from these benefit payments, 
     SCHIP payments for four other specific health care activities 
     can be made, including: (1) other child health assistance for 
     targeted low-income children; (2) health services initiatives 
     to improve the health of targeted low-income children and 
     other low-income children; (3) outreach activities; and (4) 
     other reasonable administrative costs. For a given fiscal 
     year, SCHIP statute specifies that payments for these four 
     other specific health care activities cannot exceed 10% of 
     the total amount of expenditures for benefits (excluding 
     payments for services rendered during periods of presumptive 
     eligibility under Medicaid) and other specific health care 
     activities combined.
     Explanation of Provision
       The provision would exclude from the 10% cap on CHIP 
     payments for the four other specific health care activities 
     described above: (1) expenditures for outreach activities to 
     families of Indian children likely to be eligible for CHIP or 
     Medicaid, or under related waivers, and (2) related informing 
     and enrollment assistance activities for Indian children 
     under such programs, expansions, or waivers, including such 
     activities conducted under grants, contracts, or agreements 
     entered into under Section 1139 of this Act.


 Section 203. Option for states to rely on findings by an Express Lane 
agency to determine components of a child's eligibility for Medicaid or 
                                  CHIP

     Current Law
       Medicaid law and regulations contain requirements regarding 
     determinations of eligibility and applications for 
     assistance. Generally, the Medicaid agency must determine the 
     eligibility of each applicant no more than 90 days from the 
     date of application for disability-based applications and 45 
     days for all other applications. The agency must assure that 
     eligibility for care and services under the plan is 
     determined in a manner consistent with the best interests of 
     the recipients.
       In limited circumstances outside agencies are permitted to 
     determine eligibility for Medicaid. For example, when a joint 
     TANF-Medicaid application is used the state TANF agency may 
     make the Medicaid eligibility determination, or the Secretary 
     may enter into an agreement with a given state to allow the 
     Social Security Administration (SSA) to determine Medicaid 
     eligibility of aged, blind, or disabled individuals in that 
     state.
       Applicants must attest to the accuracy of the information 
     submitted on their Medicaid applications, and sign 
     application forms under penalty of perjury. Each state must 
     have an income and eligibility verification system under 
     which (1) applicants for Medicaid and several other 
     specified government programs must furnish their Social 
     Security numbers to the state as a condition for 
     eligibility, and (2) wage information from various 
     specified government agencies is used to verify 
     eligibility and to determine the amount of available 
     benefits. Subsequent to initial application, states must 
     request information from other federal and state agencies, 
     to verify applicants' income, resources, citizenship 
     status, and validity of Social Security number (e.g., 
     income from the Social Security Administration (SSA), 
     unearned income from the Internal Revenue Service (IRS), 
     unemployment information from the appropriate state 
     agency, qualified aliens must present documentation of 
     their immigration status, which states must then verify 
     with the Immigration and Naturalization Service, and the 
     state must verify the SSN with the Social Security 
     Administration). States must also establish a Medicaid 
     eligibility quality control (MEQC) program designed to 
     reduce erroneous expenditures by monitoring eligibility 
     determinations. State Medicaid overpayments made on behalf 
     of individuals due to an error in determining eligibility 
     may not exceed 3% of the State's total Medicaid 
     expenditures in a given fiscal year. Erroneous excess 
     payments that exceed the 3% error rate will not be matched 
     with Federal Medicaid funds.
       With regard to criteria for State Personnel Administration 
     and Offices, current law requires each state plan to 
     establish and maintain methods of personnel administration in 
     accordance with the Administration of the Standards for a 
     Merit System of Personnel Administration, 5 CFR Part 900, 
     Subpart F. States must assure compliance with the standards 
     by local jurisdictions; assure that the U.S. Civil Service 
     Commission has reviewed and determined the adequacy of state 
     laws, regulations, and policies; obtain statements of 
     acceptance of the standards by local agencies; submit 
     materials to show compliance with these standards when 
     requested by HHS; and have in effect an affirmative action 
     plan, which includes specific action steps and timetables, to 
     assure equal employment opportunity.
       SCHIP defines a targeted low-income child as one who is 
     under the age of 19 years with no health insurance, and who 
     would not have been eligible for Medicaid under the rules in 
     effect in the state on March 31, 1997. Federal law requires 
     that eligibility for Medicaid and SCHIP be coordinated when 
     states implement separate SCHIP programs. In these 
     circumstances, applications for SCHIP coverage must first be 
     screened for Medicaid eligibility.
       Under Medicaid presumptive eligibility rules, states are 
     allowed to temporarily enroll children whose family income 
     appears to be below Medicaid income standards for up

[[Page S10181]]

     to 2 months until a final formal determination of eligibility 
     is made. Entities qualified to make presumptive eligibility 
     determinations for children include Medicaid providers, 
     agencies that determine eligibility for Head Start, 
     subsidized child care, or the Special Supplemental Food 
     Program for Women, Infants and Children (WIC). BIPA 2000 
     added several entities to the list of those qualified to make 
     Medicaid presumptive eligibility determinations. These 
     include agencies that determine eligibility for Medicaid or 
     the State Children's Health Insurance Program (SCHIP); 
     certain elementary and secondary schools; state or tribal 
     child support enforcement agencies; certain organizations 
     providing food and shelter to the homeless; entities involved 
     in enrollment under Medicaid, TANF, SCHIP, or that determine 
     eligibility for federally funded housing assistance; or any 
     other entity deemed by a state, as approved by the Secretary 
     of HHS. These Medicaid presumptive eligibility rules for 
     children also apply to SCHIP.
     Explanation of Provision
       The provision would create a three year demonstration 
     program that would allow up to 10 states to use Express Lane 
     at Medicaid and SCHIP enrollment and renewal. The 
     demonstration would provide $44 million for systems upgrades 
     and implementation (not coverage costs) and $5 million for an 
     independent evaluation of the demonstration at the end of 
     three years and a report on the demonstration's effectiveness 
     to Congress. The report would be due one year after 
     completion of the demonstration.
       The Demonstration would allow states the option to rely on 
     a finding made by an Express Lane Agency within the preceding 
     12 months to determine whether a child under age 19 (or at 
     state option age 20, or 21) has met one or more of the 
     eligibility requirements (e.g., income, assets or resources, 
     citizenship, or other criteria) necessary to determine an 
     individual's initial eligibility, eligibility 
     redetermination, or renewal of eligibility for medical 
     assistance under Medicaid (including the waiver of 
     requirements of this title).
       If a finding from an Express Lane agency results in a child 
     not being found eligible for Medicaid or CHIP, the State 
     would be required to determine Medicaid or CHIP eligibility 
     using its regular procedures. The provision does not relieve 
     states of their obligation to determine eligibility for 
     medical assistance under Medicaid, or prohibit state options 
     intended to increase enrollment of eligible children under 
     Medicaid or CHIP. In addition, the provision requires states 
     to inform the families (especially those whose children are 
     enrolled in CHIP) that they may qualify for lower premium 
     payments or more comprehensive health coverage under Medicaid 
     if the family's income were directly evaluated for an 
     eligibility determination by the State Medicaid agency, and 
     at the family's option they can seek a regular Medicaid 
     eligibility determination.
       The provision would allow States to rely on an Express Lane 
     Agency finding that a child is a qualified alien as long as 
     the Agency complies with guidance and regulatory procedures 
     issued by the Secretary of Homeland Security for eligibility 
     determinations of qualified aliens, and verifications of 
     immigration status (that meet the requirements of Section 301 
     of this bill).
       States that opt to use an Express Lane Agency to determine 
     eligibility for Medicaid or CHIP may meet the CHIP screen and 
     enroll requirements by using any of the following 
     requirements: (1) establishing a threshold percentage of the 
     Federal poverty level that is 30 percentage points (or such 
     other higher number of percentage points) as the state 
     determines reflects the income methodologies of the program 
     administered by the Express Lane Agency and the Medicaid 
     State plan, (2) providing that the child satisfies all income 
     requirements for Medicaid eligibility, or (3) providing that 
     such child has a family income that exceeds the Medicaid 
     income eligibility threshold that serves as the lower income 
     eligibility threshold for CHIP.
       The provision would allow states to provide for presumptive 
     eligibility under CHIP for a child who, based on an 
     eligibility determination of an income finding from an 
     Express Lane agency, would qualify for child health 
     assistance under CHIP. During the period of presumptive 
     eligibility, the State may determine the child's eligibility 
     for CHIP based on telephone contact with family members, 
     access to data available in electronic or paper format, or 
     other means that minimize to the maximum extent feasible the 
     burden on the family.
       A State may initiate a Medicaid eligibility determination 
     (and determine program eligibility) without a program 
     application based on data obtained from sources other than 
     the child (or the child's family), but such child can only be 
     automatically enrolled in Medicaid (or CHIP) if the family 
     affirmatively consented to being enrolled through affirmation 
     and signature on an Express Lane agency application. The 
     provision requires the State to have procedures in place to 
     inform the individual of the services that will be covered, 
     appropriate methods for using such services, premium or other 
     cost sharing charges (if any) that apply, medical support 
     obligations created by the enrollment (if applicable), and 
     the actions the individual must take to maintain enrollment 
     and renew coverage. For children who consent to enrollment in 
     the State plan, the provision would allow the State to waive 
     signature requirements on behalf of such child.
       States that participate in the Express Lane Eligibility 
     Demonstration would not be required to direct a child (or a 
     child's family) to submit information or documentation 
     previously submitted by the child or family to an Express 
     Lane agency that the State relies on for its Medicaid 
     eligibility determination. A participating state may rely on 
     information from an Express Lane agency when evaluating a 
     child's eligibility for Medicaid or SCHIP without a separate, 
     independent confirmation of the information at the time of 
     enrollment.
       An Express Lane agency must be a public agency determined 
     by the State agency to be capable of making the 
     determinations described in the provisions of this section 
     and is identified in the state plan under this title or Title 
     XXI. Express Lane Agencies would include: (1) a public agency 
     that determines eligibility for assistance under a State 
     program funded under part A of title IV, a program funded 
     under Part D of title IV, a State child health plan under 
     title XXI, the Food Stamp Act of 1977, the Head Start Act, 
     the Richard B. Russell National School Lunch Act, the Child 
     Nutrition Act of 1966, or the Child Care and Development 
     Block Grant, the Steward B. McKinney Homeless Assistance Act, 
     the United States Housing Act of 1937, the Native American 
     Housing Assistance and Self-Determination Act of 1996, (2) a 
     state specified governmental agency that has fiscal liability 
     or legal responsibility for the accuracy of the eligibility 
     determination findings, and (3) a public agency that is 
     subject to an interagency agreement limiting the disclosure 
     and use of such information for eligibility determination 
     purposes.
       Programs run through Title XX (SSBG) are not eligible 
     Express Lane agencies. Private for-profit organizations are 
     not eligible Express Lane agencies. Current law applies 
     regarding the ability of Medicaid to contract with non-profit 
     and for-profit agencies to administer the Medicaid 
     application process with clarifying language that nothing in 
     this demonstration exempts states from the merit-based system 
     for Medicaid employees. A rule of construction would also 
     clarify that states may not use the Express Lane option as a 
     means of avoiding current merit-based employment requirements 
     for Medicaid determinations.
       In addition, the provision would require such agencies to 
     notify the child's family (1) of the information that will be 
     disclosed under this provision, (2) that the information will 
     be used solely for the purposes of determining eligibility 
     under Medicaid and CHIP, (3) that the family may elect not to 
     have the information disclosed for such purposes. The Express 
     Lane agency must also enter into or be subject to an 
     interagency agreement to limit the disclosure and use of such 
     information.
       As part of the demonstration, signatures under penalty of 
     perjury would not be required on a Medicaid application form 
     attesting to any element of the application for which 
     eligibility is based on information received from a source 
     other than an applicant. The provision would provide that any 
     signature requirement for a Medicaid application may be 
     satisfied through an electronic signature.
       States participating in the Demonstration will have to code 
     which children are enrolled in Medicaid or CHIP by way of 
     Express Lane for the duration of the demonstration. States 
     must take a statistically valid sample, approved by CMS, of 
     the children enrolled via Express Lane annually for full 
     Medicaid eligibility review to determine eligibility error 
     rate. States submit the error rate to CMS and if the error 
     rate exceeds 3% either of the first two years, the state must 
     show CMS what corrective actions are in place to improve upon 
     their error rate and will be required to reimburse erroneous 
     excess payments that exceed the allowable error rate of 3%. 
     However, CMS does not have the authority to apply the error 
     rate derived from the Express Lane sample to the entire 
     Express Lane or Medicaid child population, or to take other 
     punitive action against a state based on the error rate. 
     States that participate in the Express Lane demonstration 
     will continue to be subject to existing requirements under 
     Medicaid requiring states to reimburse erroneous excess 
     payments that exceed the allowable error rate of 3% 
     consistent with 1903(u).


    Section 204. Authorization of certain information disclosure to 
                simplify health coverage determinations

     Current Law
       Each state must have an income and eligibility verification 
     system under which (1) applicants for Medicaid and several 
     other specified government programs must furnish their Social 
     Security numbers to the state as a condition for eligibility, 
     and (2) wage information from various specified government 
     agencies is used to verify eligibility and to determine the 
     amount of available benefits. Subsequent to initial 
     application, states must request information from other 
     federal and state agencies, to verify applicants' income, 
     resources, citizenship status, and validity of Social 
     Security number (e.g., income from the Social Security 
     Administration (SSA), unearned income from the Internal 
     Revenue Service (IRS), unemployment information from the 
     appropriate state agency, qualified aliens must present 
     documentation of their immigration status, which states must 
     then verify with the Immigration and Naturalization Service, 
     and the state must verify the SSN with the Social

[[Page S10182]]

     Security Administration). States must also establish a 
     Medicaid eligibility quality control (MEQC) program designed 
     to reduce erroneous expenditures by monitoring eligibility 
     determinations.
     Explanation of Provision
       The provision would authorize federal or State agencies or 
     private entities with potential data sources relevant for the 
     determination of eligibility under Medicaid (e.g., 
     eligibility files, vital records about births, etc.) to share 
     such information with the Medicaid agency if: (1) the child 
     (or such child's parent, guardian, or caretaker relative) has 
     provided advanced consent to disclosure, and has not objected 
     to disclosure, (2) such data are used solely for the purpose 
     of identifying, enrolling, and verifying potential 
     eligibility for Medicaid medical assistance, and (3) an 
     interagency agreement prevents the unauthorized use, 
     disclosure, or modification of such data, and otherwise meets 
     federal standards for safeguarding privacy and data security, 
     and requires the State agency to use such data for the 
     purposes of child enrollment in Medicaid. The provision would 
     impose criminal penalties for persons who engage in 
     unauthorized activities with such data.
       For purposes of the Express Lane Demonstration only, the 
     provision would also authorize the Medicaid and CHIP programs 
     to receive data directly relevant to eligibility 
     determinations and determining the correct amount of benefits 
     under such program from (1) the National New Hires Database, 
     (2) the National Income Data collected by the Commissioner of 
     Social Security, or (3) data about enrollment in insurance 
     that may help to facilitate outreach and enrollment under 
     Medicaid, CHIP and certain other programs.

              Title III--Removal of Barriers to Enrollment


Section 301. Verification of declaration of citizenship or nationality 
           for purposes of eligibility for Medicaid and CHIP

     Current Law
       To be eligible for the full range of benefits offered under 
     Medicaid, an individual must be a citizen or national of the 
     United States or a qualified alien. Nonqualified aliens can 
     only receive limited emergency Medicaid benefits. Noncitizens 
     who apply for full Medicaid benefits have been required since 
     1986 to present documentation that indicates a ``satisfactory 
     immigration status.''
       Due to recent changes in federal law, citizens and 
     nationals also must present documentation that proves 
     citizenship and documents personal identity in order for 
     states to receive federal Medicaid reimbursement for services 
     provided to them. This citizenship documentation requirement 
     was included in the Deficit Reduction Act of 2005 (DRA, P.L. 
     109-171) and modified by the Tax Relief and Health Care Act 
     of 2006 (P.L. 109-432). Before the DRA, states could accept 
     self-declaration of citizenship for Medicaid, although some 
     chose to require additional supporting evidence.
       The citizenship documentation requirement is outlined under 
     Section 1903(x) of the Social Security Act and applies to 
     Medicaid eligibility determinations and redeterminations made 
     on or after July 1, 2006. The law specifies documents that 
     are acceptable for this purpose and exempts certain groups 
     from the requirement, including people who receive Medicare 
     benefits, Social Security benefits on the basis of a 
     disability, Supplemental Security Income benefits, child 
     welfare assistance under Title IV-B of the Social Security 
     Act, or adoption or foster care assistance under Title IV-E 
     of the Social Security Act. An interim final rule on the 
     requirement was issued in July 2006, and a final rule was 
     issued in July 2007.
       The citizenship documentation requirement does not apply to 
     SCHIP. However, some states use the same enrollment 
     procedures for all Medicaid and SCHIP applicants. As a 
     result, it is possible that some SCHIP enrollees would be 
     asked to present evidence of citizenship.
     Explanation of Provision
       As part of its Medicaid state plan and with respect to 
     individuals declaring to be U.S. citizens or nationals for 
     purposes of establishing Medicaid eligibility, a state would 
     be required to provide that it satisfies existing Medicaid 
     citizenship documentation rules under Section 1903(x) or new 
     rules under Section 1902(dd). The Secretary would not be 
     allowed to waive this requirement.
       Under a new Section 1902(dd), a state could meet its 
     Medicaid state plan requirement for citizenship documentation 
     by: (1) submitting the name and Social Security number (SSN) 
     of an individual to the Commissioner of Social Security as 
     part of a plan established under specified rules and (2) in 
     the case of an individual whose name or SSN is invalid, 
     providing the individual with an opportunity to cure the 
     invalid determination with the Social Security 
     Administration, followed by 90 days to present evidence of 
     citizenship as defined in Section 1903(x) and disenrolling 
     the individual within 30 days after the end of the 90-day 
     period if evidence is not provided.
       A state opting for name and SSN validation would be 
     required to establish a program under which it submits each 
     month to the Commissioner of Social Security for verification 
     of the name and SSN of each individual enrolled in Medicaid 
     that month who has attained the age of 1 before the date of 
     the enrollment. In establishing its program, a state could 
     enter into an agreement with the Commissioner to provide for 
     the electronic submission and verification of name and SSN 
     before an individual is enrolled in Medicaid.
       At such times and in such form as the Secretary may 
     specify, states would be required to provide information on 
     the percentage of invalid names and SSNs submitted each 
     month. If the average monthly percentage for any fiscal year 
     is greater than 7%, the state shall develop and adopt a 
     corrective plan and pay the Secretary an amount equal to 
     total Medicaid payments for the fiscal year for individuals 
     who provided invalid information multiplied by the ratio of 
     the number of individuals with invalid information in excess 
     of the 7% limited divided by the total number of individuals 
     with invalid information. The Secretary could waive, in 
     certain limited cases, all or part of such payment if a state 
     is unable to reach the allowable error rate despite a good 
     faith effort by the state. This provision shall not apply to 
     a State for a fiscal year, if there is an agreement with the 
     Commissioner to provide for the electronic submission and 
     verification of name and SSN before an individual is enrolled 
     in Medicaid, as of the close of the fiscal year.
       States would receive 90% reimbursement for costs 
     attributable to the design, development, or installation of 
     such mechanized verification and information retrieval 
     systems as the Secretary determines are necessary to 
     implement name and SSN validation, and 75% for the operation 
     of such systems.
       The provision would also clarify requirements under the 
     existing Section 1903(x). It would add ``a document issued by 
     a federally-recognized Indian tribe evidencing membership or 
     enrollment in, or affiliation with, such tribe'' to the list 
     of documents that provide satisfactory documentary evidence 
     of citizenship or nationality, except for tribes located 
     within states having an international border whose membership 
     includes noncitizens, who would only be allowed to use such 
     documents until the Secretary of HHS issues regulations 
     authorizing the presentation of other evidence. It would 
     require states to provide citizens with the same reasonable 
     opportunity to present evidence that is provided under 
     Section 1137(d)(4)(A) to noncitizens who must present 
     evidence of satisfactory immigration status. Groups that are 
     exempt from the Section 1903(x) citizenship documentation 
     requirement would remain the same as under current law, 
     except for the inclusion of a permanent exemption for 
     children who are deemed eligible for Medicaid coverage by 
     virtue of being born to a mother on Medicaid. The provision 
     would clarify that deemed eligibility applies to children 
     born to noncitizen women on emergency Medicaid, and would 
     require separate identification numbers for children born to 
     these women.
       In order to receive reimbursement for an individual who 
     has, or is, declared to be a U.S. citizen or national for 
     purposes of establishing CHIP eligibility, a state would be 
     required to meet the Medicaid state plan requirement for 
     citizenship documentation described above. The 90% and 75% 
     reimbursement for name and SSN validation would be available 
     under SCHIP, and would not count towards a state's CHIP 
     administrative expenditures cap.
       Except for technical amendments made by the provision and 
     the application of citizenship documentation to CHIP, which 
     would be effective upon enactment, the provision would be 
     effective as if included in the Deficit Reduction Act of 
     2005. States would be allowed to provide retroactive 
     eligibility for certain individuals who had been determined 
     ineligible under previous citizenship documentation rules.


      Section 302. Reducing administrative barriers to enrollment

     Current Law
       During the implementation of SCHIP states instituted a 
     variety of enrollment facilitation and outreach strategies to 
     bring eligible children into Medicaid and SCHIP. As a result, 
     substantial progress was made at the state level to simplify 
     the application and enrollment processes to find, enroll, and 
     maintain eligibility among those eligible for the program.
     Explanation of Provision
       The provision would require the State plan to describe the 
     procedures used to reduce the administrative barriers to the 
     enrollment of children and pregnant women in Medicaid and 
     CHIP, and to ensure that such procedures are revised as often 
     as the State determines is appropriate to reduce newly 
     identified barriers to enrollment. States would be deemed to 
     comply with the above-listed requirement if (1) the State's 
     application and renewal forms, and information verification 
     processes are the same under Medicaid and CHIP for 
     establishing and renewing eligibility for children and 
     pregnant women, and (2) the state does not require a face-to-
     face interview during the application process.

    Title IV--Elmination of Barriers to Providing Premium Assistance

  Subtitle A--Additional State Option for Providing Premium Assistance


 Section 401. Additional State option for providing premium assistance

     Current Law
       Under Medicaid, a provision in the Omnibus Budget 
     Reconciliation Act (OBRA) of 1990 created the health 
     insurance premium payment (HIPP) program. The original HIPP 
     provision required state Medicaid programs to pay a Medicaid 
     beneficiary's share of costs

[[Page S10183]]

     for group (employer-based) health coverage for any Medicaid 
     enrollee for whom employer-based coverage is available when 
     that coverage is both comprehensive and cost effective for 
     the state. An individual's enrollment in an employer plan is 
     considered cost effective if paying the premiums, 
     deductibles, coinsurance and other cost-sharing obligations 
     of the employer plan is less expensive than the state's 
     expected cost of directly providing Medicaid-covered 
     services. Under the original provision, states were also 
     required to purchase employer-based health insurance for non-
     Medicaid eligible family members if such family coverage was 
     necessary for Medicaid-eligible individual to receive 
     coverage, and as long as it was still cost-effective. States 
     were also to provide coverage for those Medicaid covered 
     services that are not included in the private plans. In 
     August 1997, as part of the Balanced Budget Act, Congress 
     amended the mandatory nature of the HIPP provision. Today, 
     states can opt to use Medicaid funds to pay for premiums and 
     other cost-sharing for Medicaid beneficiaries when coverage 
     is available, comprehensive, and cost-effective.
       Under SCHIP, the Secretary has the authority to approve 
     funding for the purchase of ``family coverage'' if it is cost 
     effective relative to the amount paid to cover only the 
     targeted low-income children and does not substitute for 
     coverage under group health plans that would otherwise be 
     provided to the children. While the term ``family coverage'' 
     is not specifically defined in the statute, it has been 
     interpreted to refer to either coverage for the entire family 
     under an SCHIP program or under an employer-sponsored health 
     insurance plan. In addition, states using SCHIP funds for 
     employer-based plan premiums must ensure that SCHIP minimum 
     benefits are provided and SCHIP cost-sharing ceilings are 
     met.
       Because of these requirements, implementation of premium 
     assistance programs under Medicaid and SCHIP are not 
     widespread. States cited difficulty in identifying potential 
     enrollees, determining whether the subsidy would be cost-
     effective, and obtaining necessary information (e.g., 
     information about the availability of employer-sponsored 
     plans, covered benefits, available contributions, and the 
     remaining costs) as some of the barriers to the 
     implementation of such programs.
       In August 2001, the Bush Administration introduced the 
     Health Insurance Flexibility and Accountability (HIFA) 
     Initiative under the Section 1115 waiver authority. Under 
     HIFA, states were to direct unspent SCHIP funds to extend 
     coverage to uninsured populations with annual income less 
     than 200% FPL and to use Medicaid and SCHIP funds to pay 
     premium costs for waiver enrollees who have access to 
     Employer Sponsored Insurance (ESI). This resulted in an 
     increased emphasis on states' use of the Section 1115 waiver 
     authority to offer premium assistance for employer-based 
     health coverage in lieu of full Medicaid and/or SCHIP 
     coverage. ESI programs approved under the Section 1115 waiver 
     authority are not subject to the same current law constraints 
     required under Medicaid's HIPP program or SCHIP's family 
     coverage variance option (i.e., the comprehensiveness and 
     cost-effectiveness tests).
     Explanation of Provision
       The provision would allow states to offer a premium 
     assistance subsidy for qualified employer sponsored coverage 
     to all targeted low-income children who are eligible for 
     child health assistance and have access to such coverage. 
     Qualified employer sponsored coverage would be defined as a 
     group health plan or health insurance coverage offered 
     through an employer that (1) qualifies as credible health 
     coverage as a group health plan under the Public Health 
     Service Act, (2) for which the employer contributes at least 
     40 percent toward the cost of the premium, and (3) is non-
     discriminatory in a manner similar to section 105(h) of the 
     Internal Revenue Code but would not allow employers to 
     exclude workers who had less than 3 years of service. 
     Qualified employer-sponsored insurance would not include (1) 
     benefits provided under a health flexible spending 
     arrangement, (2) a high deductible health plan purchased in 
     conjunction with a health savings account as defined in the 
     Internal Revenue Code of 1986.
       The provision would establish a new cost effectiveness test 
     for ESI programs. A group health plan or health insurance 
     coverage offered through an employer would be considered 
     qualified employer sponsored coverage if the state 
     establishes that (1) the cost of such coverage is less than 
     the expenditures that the State would have made to enroll the 
     child or the family (as applicable) in CHIP, or (2) the State 
     establishes that the aggregate amount of State expenditures 
     for the purchase of all such coverage for targeted low-income 
     children under CHIP (including administrative expenses) does 
     not exceed the aggregate amount of expenditures that the 
     State would have made for providing coverage under the CHIP 
     state plan for all such children.
       Premium assistance subsidies would be considered child 
     health assistance for the purpose of making federal matching 
     payments under the CHIP program, and the state would be 
     considered a secondary payor for any items or services 
     provided under ESI coverage. The provision defines premium 
     assistance subsidies as an amount equal to the difference 
     between the employee contribution for the employee only, and 
     the employee contribution for the employee and CHIP-eligible 
     child, less applicable premium cost sharing imposed under 
     title XXI (including the employee contribution toward the 5 
     percent total annual aggregate cost-sharing limit under 
     CHIP). States would be permitted to provide a premium 
     assistance subsidy as reimbursement for out-of-pocket 
     expenses directly to an employee, or directly to the 
     employer. At the employer's option, the provision permits the 
     employer to notify the State that it elects to opt out of 
     being directly paid a premium assistance subsidy on behalf of 
     an employee. In the event of such notification, the employer 
     would be required to withhold the total amount of the 
     employee contribution required for enrollment of the employee 
     (and the child) in the ESI coverage and then the State would 
     then pay the premium subsidy directly to the employee.
       States would be required to provide supplemental coverage 
     for each targeted low income child enrolled in the ESI plan 
     consisting of items or services that are not covered, or are 
     only partially covered, and cost-sharing protections 
     consistent with the requirements of CHIP. States would be 
     permitted to directly pay out-of-pocket expenditures for 
     cost-sharing imposed under the qualified ESI coverage and 
     collect all (or any) portion for cost-sharing imposed on the 
     family.
       Waiting periods (to prevent crowd-out of private coverage 
     with public coverage) imposed under the CHIP state plan would 
     also apply to premium assistance coverage. Parents would be 
     permitted to disenroll their child(ren) from ESI coverage 
     and enroll them in CHIP coverage effective on the first 
     day of any month for which the child is eligible for such 
     coverage.
       States that provide ESI coverage to parents of targeted 
     low-income children, would be permitted to offer a premium 
     assistance subsidy to eligible parents in the same manner as 
     that State offers such subsidy to eligible child(ren). The 
     amount of the premium subsidy would be increased to take into 
     account the cost of enrollment of the parent in the ESI 
     coverage, or at state option, the cost of the enrollment of 
     the child's family (if the states determines that it is cost-
     effective).
       Each state has the option to establish an employer/family 
     premium assistance purchasing pool for employers with less 
     than 250 employees who have at least one CHIP-eligible 
     employee (pregnant woman) or child.
       The state, or a state designated entity, will identify and 
     offer access to not less than two privately delivered health 
     products that meet the CHIP benefits benchmark.
       States that provide ESI coverage to parents of targeted 
     low-income children, would be permitted to offer a premium 
     assistance subsidy to eligible parents in the same manner as 
     that State offers such subsidy to eligible child(ren). The 
     amount of the premium subsidy would be increased to take into 
     account the cost of enrollment of the parent in the ESI 
     coverage, or at state option, the cost of the enrollment of 
     the child's family (if the states determines that it is cost-
     effective).
       This provision would not limit the state's authority to 
     offer premium assistance under the Medicaid HIPP program, a 
     section 1115 demonstration waiver, or any other authority in 
     effect prior to the enactment of this Act. States would be 
     required to inform parents about the availability of premium 
     assistance subsidies for CHIP eligible children in qualified 
     employer-sponsored insurance, how the family would elect such 
     subsides during the application process and ensure that 
     parents are fully informed of the choices for receiving child 
     health assistance under the CHIP or through the receipt of a 
     premium assistance subsidy.
       The provision would also allow States to provide premium 
     assistance subsidies for enrollment of targeted low-income 
     children in coverage under a group health plan or health 
     insurance coverage offered through an employer if it is 
     determined that such coverage is actuarially equivalent to 
     CHIP benchmark benefits coverage, or CHIP benchmark-
     equivalent coverage. Plans that meet the CHIP benefit 
     coverage requirements would not be required to provide 
     supplemental coverage for benefits and cost-sharing 
     protections as required under CHIP. Such provisions would be 
     applied to Medicaid-eligible children and to the parents of 
     Medicaid-eligible children in the same manner as they are 
     applied to CHIP.
       Finally, the provision would require the General 
     Accountability Office to submit a report to the appropriate 
     committees of Congress on cost and coverage issues relating 
     to any State premium assistance programs for which federal 
     matching payments are made under Medicaid, CHIP, or the 
     Section 1115 waiver authority. Such report will be due to 
     Congress no later than January 1, 2009.


      Section 402. Outreach, education, and enrollment assistance

     Current Law
       SCHIP states plans are required to include a description of 
     the procedures in place to provide outreach to children 
     eligible for SCHIP child health assistance, or other public 
     or private health programs to (1) inform these families of 
     the availability of SCHIP coverage, and (2) to assist them in 
     enrolling such children in SCHIP. In addition, states are 
     required to provide a description of the state's efforts to 
     ensure coordination between SCHIP and other public and 
     private health coverage.
       There is a limit on federal spending for SCHIP 
     administrative expenses, which include activities such as 
     data collection and

[[Page S10184]]

     reporting, as well as outreach and education. For federal 
     matching purposes, a 10% cap applies to state administrative 
     expenses. This cap is tied to the dollar amount that a state 
     draws down from its annual allotment to cover benefits under 
     SCHIP, as opposed to 10% of a state's total annual allotment. 
     In other words, no more than 10% of the federal funds that a 
     state draws down for SCHIP benefit expenditures can be used 
     for administrative expenses.
     Explanation of Provision
       The provision would require states to include a description 
     of the procedures in place to provide outreach, education, 
     and enrollment assistance for families of children likely to 
     be eligible for premium assistance subsidies under CHIP or a 
     waiver approved under Section 1115. For employers likely to 
     provide qualified employer-sponsored coverage, the state is 
     required to include the specific resources the State intends 
     to apply to educate employers about the availability of 
     premium assistance subsidies under the CHIP state plan. 
     Expenditures for such outreach activities would not be 
     subject to the 10 percent limit on spending for 
     administrative costs associated with the CHIP program.

   Subtitle B--Coordinating Premium Assistance With Private Coverage


Section 411. Special enrollment period under group health plans in case 
    of termination of Medicaid or CHIP coverage or eligibility for 
          assistance in purchase of employment-based coverage

     Current Law
       Under the Internal Revenue Code, a group health plan is 
     required to provide special enrollment opportunities to 
     qualified individuals. Special enrollment refers to the 
     opportunity given to qualified individuals to enroll in a 
     health plan without having to wait until a late enrollment 
     opportunity or open season. Such individuals must have lost 
     eligibility for other group coverage, or lost employer 
     contributions towards health coverage, or added a dependent 
     due to marriage, birth, adoption, or placement for adoption. 
     In addition, the individual must meet the health plan's 
     substantive eligibility requirements, such as being a full-
     time worker or satisfying a waiting period. Health plans must 
     give qualified individuals at least 30 days after the 
     qualifying event (e.g., loss of eligibility) to make a 
     request for special enrollment.
       The same special enrollment opportunities apply to group 
     health plans and health insurance issuers offering group 
     health insurance under the Employee Retirement Income 
     Security Act.
       The Employee Retirement Income Security Act specifies the 
     persons who may bring civil action to enforce the provisions 
     under this statute. Such persons include a plan participant 
     or beneficiary, a fiduciary, the Secretary of Labor, and a 
     State. Current law allows the Secretary to assess a maximum 
     financial penalty.against a plan administrator or employer 
     for certain violations, including failure to meet the 
     existing notice requirement.
     Explanation of Provision
       The provision would require (under the Internal Revenue 
     Code) a group health plan to permit an eligible but not 
     enrolled employee (or dependent(s) of such an employee) to 
     enroll for coverage under the group health plan if either of 
     the following conditions are met: (1) the employee or 
     dependent(s) is/are covered under Medicaid or CHIP, and 
     coverage of the employee or dependent(s) is terminated as a 
     result of loss of eligibility and the employee requests 
     coverage under the group health plan not later than 60 days 
     after the date of coverage termination, or (2) the employee 
     or dependent(s) becomes eligible for assistance, with respect 
     to coverage under the group health plan under Medicaid or 
     CHIP (including under any waiver or demonstration project), 
     if the employee requests coverage under the group health plan 
     no later than 60 days after the date the employee or 
     dependent is determined to be eligible for such assistance.
       Each employer that maintains a group health plan in a State 
     that provides premium assistance under Medicaid or CHIP would 
     be required to provide each employee a written notice of the 
     potential opportunities for premium assistance available in 
     the State under Medicaid and CHIP. For compliance purposes, 
     the employer may use any State-specific model notice issued 
     by the Secretary of Labor or the Secretary of Health and 
     Human Services in accordance with the model notice 
     requirements established under this section of the bill.
       The plan administer of the group health plan would be 
     required to disclose to the State, upon request, information 
     about the benefits available under the group health plan so 
     as to permit the State to make a determination concerning 
     cost-effectiveness, and in order for the State to provide 
     supplemental benefits if required.
       The provision includes conforming amendments. A group 
     health plan and a health insurance issuer offering group 
     health insurance (under the Employee Retirement Income 
     Security Act) would be required to permit an eligible but not 
     enrolled employee (or dependent(s) of such an employee) to 
     enroll for coverage under the group health plan if either of 
     the following conditions are met: (1) the employee or 
     dependent(s) is/are covered under Medicaid or CHIP, and 
     coverage of the employee or dependent(s) is terminated as a 
     result of loss of eligibility and the employee requests 
     coverage under the group health plan not later than 60 days 
     after the date of coverage termination, or (2) the employee 
     or dependent(s) becomes eligible for assistance, with respect 
     to coverage under the group health plan under Medicaid or 
     CHIP (including under any waiver or demonstration project), 
     if the employee requests coverage under the group health plan 
     not later than 60 days after the date the employee or 
     dependent is determined to be eligible for such assistance.
       Each employer that maintains a group health plan in a State 
     that provides premium assistance under Medicaid or CHIP would 
     be required to provide each employee a written notice of the 
     potential opportunities for premium assistance available in 
     the State under Medicaid and CHIP. Not later than 1 year 
     after the date of enactment, the Secretary of Labor and the 
     Secretary of Health and Human Services (HHS), in consultation 
     with State Medicaid Directors and State CHIP Directors, would 
     be required to develop model notices to enable employers to 
     comply with notice requirements in a timely manner. Model 
     notices would include information regarding how an employee 
     would contact the State for information regarding premium 
     assistance and how to apply for such assistance.
       The plan administer of the group health plan would be 
     required to disclose to the State, upon request, information 
     about the benefits available under the group health plan so 
     as to permit the State to make a determination concerning 
     cost-effectiveness, and in order for the State to provide 
     supplemental benefits if required.
       The HHS Secretary and the Labor Secretary would be required 
     to jointly establish a Medicaid, CHIP, and Employer-Sponsored 
     Coverage Coordination Working Group not later than 60 days 
     after the date of enactment. The purpose of the Working Group 
     would be to develop the model coverage coordination 
     disclosure form, and to identify the impediments to effective 
     coordination of coverage available to families. The purpose 
     of the disclosure form would be to allow the State to 
     determine the availability and cost-effectiveness of 
     coverage, and allow for coordination of coverage for 
     enrollees of such plans. The forms will include (1) 
     information that will allow for the determination of an 
     employee's eligibility for coverage under the group health 
     plan, (2) the name and contact information of the plan 
     administrator of the group health plan, (3) benefits offered 
     under the plan, (4) premiums and cost-sharing under the plan, 
     and (5) any other information relevant to coverage under the 
     plan.
       The Working Group would consist of no more than 30 members 
     and be composed of representatives from the Department of 
     Labor, the Department of Health and Human Services, State 
     directors of Medicaid and CHIP programs, employers (including 
     owners of small businesses and their trade or industry 
     representatives and certified human resource and payroll 
     professionals), plan administrations and plan sponsors of 
     group health plans, and children and other beneficiaries of 
     Medicaid and CHIP. Members would be required to serve without 
     compensation. The Department of Health and Human Services and 
     the Department of Labor would be required to jointly provide 
     appropriate administrative support to the Working Group, 
     including technical assistance. The Working Group would be 
     required to submit the model coverage coordination disclosure 
     form, along with a report containing recommendations for 
     appropriate measures to address impediments to effective 
     coordination of coverage between Medicaid, CHIP and group 
     health plans, to the Labor Secretary and the HHS Secretary no 
     later than 18 months after the date of enactment. The 
     Secretaries shall jointly submit a report regarding the 
     Working Group report recommendations to each chamber of the 
     Congress no later than 2 months after receipt of the report 
     from the Working Group. The Working Group shall terminate 30 
     days after the issuance of its report.
       The Labor Secretary and the HHS Secretary would be required 
     to develop the initial model notices, and the Labor Secretary 
     would provide such notices to employers no later than 1 year 
     after the date of enactment. Each employer would be required 
     to provide initial annual notices to its employees beginning 
     the first year after the date on which the model notices are 
     first issued. The model coverage coordination disclosure form 
     would also apply to requests made by States beginning the 
     first year after the date on which the model notices are 
     first issued.
       The provision would amend current law by allowing the Labor 
     Secretary to assess a civil penalty (up to $100 a day) 
     against an employer for failure to meet the new notice 
     requirement established under this section of the bill. Each 
     violation with respect to any employee would be treated as a 
     separate violation. The Labor Secretary would also be allowed 
     to assess a civil penalty (up to $100 a day) against a plan 
     administrator for failure to comply with the new disclosure 
     requirement established under this section of the bill. Each 
     violation with respect to any participant or beneficiary 
     would be treated as a separate violation.

 Title V--Strengthening Quality of Care and Health Outcomes of Children


 Section 501. Child health quality improvement activities for children 
                      enrolled in Medicaid or CHIP

     Current Law
       The Centers for Medicare and Medicaid Services (CMS) and 
     the Agency for

[[Page S10185]]

     Healthcare Research and Quality (AHRQ) are both actively 
     involved in funding and implementing an array of quality 
     improvement initiatives, though only AHRQ has engaged in 
     activities specific to children.
       In November 2002, CMS started the Quality Initiative (QI), 
     a multi-faceted effort to improve health care quality. This 
     program includes the Nursing Home Quality Initiative, the 
     Home Health Quality Initiative, the National Voluntary 
     Hospital Quality Reporting Initiative, and the Physician 
     Focused Quality Initiative. The Medicare Prescription Drug, 
     Improvement, and Modernization Act of 2003 (MMA) included 
     provisions for hospitals to report data on quality 
     indicators. In addition, the MMA included a variety of 
     provisions designed to promote quality care, such as 
     demonstrations that focus on improving the treatment of 
     chronic illnesses and on identifying effective approaches for 
     rewarding superlative performance. In 2005, quality reporting 
     was expanded for inpatient hospital services and extended to 
     home health. The development of plans for value-based 
     purchasing in hospitals and home health settings was also 
     required. In 2006, quality reporting was extended to hospital 
     outpatient services and ambulatory service centers. 
     Additionally, the 2007 Physician Quality Reporting Initiative 
     (PQRI) implemented a voluntary quality reporting system for 
     physicians and other eligible professionals with incentive 
     payments for covered professional services tied to the 
     reporting of claims data.
       None of the CMS QI programs to date have focused on 
     children. Rather, most have focused on the general 
     population, adults with chronic conditions, or the frail 
     elderly.
       AHRQ has made quality improvement for children a priority 
     in recent years. In part, this is because of the high costs 
     incurred by children on Medicaid/SCHIP.
       Many AHRQ projects to implement and evaluate improved 
     health care strategies for the care of children are underway. 
     These include:
       1. Pediatric Quality Indicators that includes a set of 
     measures that can be used with hospital inpatient discharge 
     data to detect patient safety events and potentially 
     avoidable hospitalizations.
       2. The Consumer Assessment of Healthcare Providers and 
     Systems (CAHPS) program is a public-private initiative to 
     develop standardized surveys of patients' experiences with 
     ambulatory and facility-level care. Medicaid uses CAHPS to 
     measure quality of care for children with special health care 
     needs.
       3. AHRQ's Child Health Care Quality Toolbox lists tips and 
     tools for evaluating health care quality for children. It is 
     available to providers and consumers at www.ahrq.gov/
chtoolbx/index.htm.
       Other AHRQ-supported initiatives to improve the quality and 
     safety of health care for children and adolescents, focusing 
     on health care IT, and the development of pediatric 
     electronic medical records, among other quality improvement 
     activities.
     Explanation of Provision
       (a) Development of Child Health Quality Measures For 
     Children Enrolled in Medicaid or CHIP.
       The provision would add a new section to the Social 
     Security Act defining child health quality improvement 
     activities for children enrolled in Medicaid and CHIP. Not 
     later than January 1, 2009, the Secretary would be required 
     to identify and publish for general comment an initial 
     recommended core set of child health quality measures for use 
     by states with respect to Medicaid and CHIP, health insurance 
     issuers and managed care entities that enter into contracts 
     under Medicaid and CHIP, and providers under those two 
     programs.
       With consultation with specific groups (identified below), 
     the Secretary must identify existing quality of care measures 
     for children that are in use under public and privately 
     sponsored health care coverage arrangements, or that are part 
     of reporting systems that measure both the presence and 
     duration of health insurance coverage over time. Based on 
     such measures, the Secretary published an initial core set of 
     child health quality measures that includes, but is not 
     limited to, the following: (1) duration of insurance coverage 
     over a 12-month period, (2) availability of a full range of 
     preventive services, treatments, and services for acute 
     conditions, including services to promote healthy birth and 
     prevent and treat premature birth, and treatments to correct 
     or ameliorate the effects of chronic physical and mental 
     conditions, (3) availability of care in a range of ambulatory 
     and inpatient settings, and (4) measures that, taken 
     together, can be used to estimate the overall national 
     quality of health care for children and to perform 
     comparative analyses of pediatric health care quality and 
     racial, ethnic, and socioeconomic disparities in child health 
     and health care for children.
       Not later than 2 years after the enactment of the 
     Children's Health Insurance Program Reauthorization Act of 
     2007, the Secretary, in consultation with the states, must 
     develop a standardized format for reporting information and 
     procedures and approaches that encourage states to use the 
     initial core measurement set to voluntarily report 
     information regarding quality of pediatric care under 
     Medicaid and CHIP.
       In addition, the Secretary must disseminate information to 
     states regarding best practices with respect to measuring and 
     reporting quality of care for children, and must facilitate 
     adoption of such best practices. In developing these best 
     practices approaches, the Secretary must give particular 
     attention to state measurement techniques that ensure 
     timeliness and accuracy of provider reporting, encourage 
     provider reporting compliance and encourage successful 
     quality improvement strategies, and improve efficiency in 
     data collection using health information technology.
       Not later than January 1, 2010, and every 3 years 
     thereafter, the Secretary must report to Congress on (1) the 
     status of the Secretary's efforts to improve quality related 
     to the duration and stability of health insurance coverage 
     for children under Medicaid and CHIP, (2) the quality of 
     children's health care under those programs, including 
     preventive health services, health care for acute conditions, 
     chronic health care, and health services to ameliorate the 
     effects of physical and mental conditions, as well as to aid 
     in growth and development of children, and (3) quality of 
     children's health care, including clinical quality, health 
     care safety, family experience with health care, health 
     care in the most integrated setting, and elimination of 
     racial, ethnic, and socioeconomic disparities in health 
     and health care. In these reports to Congress, the 
     Secretary must also describe the status of voluntary 
     reporting by states under Medicaid and CHIP utilizing the 
     initial core set of quality measures, and provide any 
     recommendations for legislative changes needed to improve 
     quality of care provided to Medicaid and CHIP children, 
     including recommendations for quality reporting by states. 
     The Secretary must also provide technical assistance to 
     states to assist them in adopting and utilizing core child 
     health quality measures for their Medicaid and CHIP 
     programs.
       The provision defines ``core set'' to mean a group of 
     valid, reliable and evidence-based quality measures for 
     children that provide information regarding the quality of 
     health coverage and health care for children, address the 
     needs of children throughout the developmental age span, and 
     that allow purchasers, families, and health care providers to 
     understand the quality of care in relation to the preventive 
     needs of children, treatments aimed at managing and resolving 
     acute conditions, and diagnostic and treatment services to 
     correct or ameliorate physical, mental or developmental 
     conditions that could become chronic if left untreated or 
     poorly treated.
       (b) Advancing and Improving Pediatric Quality Measures.
       The provision would also require the Secretary to establish 
     a pediatric quality measures program not later than January 
     1, 2010. The purpose of this program would be to (1) improve 
     and strengthen the initial core child health care quality 
     measures, (2) expand on existing pediatric quality measures 
     used by both public and private purchasers and advance the 
     development of new and emerging measures, and (3) increase 
     the portfolio of evidence-based, consensus pediatric quality 
     measures available to public and private purchases of 
     children's health care services, providers and consumers.
       At a minimum, the pediatric quality measures developed 
     under this program must be (1) evidence-based and where 
     appropriate, risk-adjusted, (2) designed to identify and 
     eliminate racial and ethnic disparities in child health and 
     the provision of health care, (3) designed to ensure that the 
     data required for such measures is collected and reported in 
     a standard format that permits comparisons at the state, plan 
     and provider level, (4) periodically adjusted, and (5) 
     responsive to child health needs, services and stability of 
     coverage.
       In identifying gaps in existing pediatric quality measures 
     and establishing priorities for the development and use of 
     such measures, the Secretary must consult with a variety of 
     entities, including (1) states, (2) institutional and non-
     institutional providers that specialize in the care and 
     treatment of children, particularly those with special needs, 
     (3) dental professionals, including pediatric dental 
     professionals, (4) primary care providers for children and 
     families living in medically under-served areas, or who are 
     members of population subgroups at heightened risk for poor 
     health outcomes, (5) national organizations representing 
     consumers and purchasers of children's health care, (6) 
     national organizations and individuals with expertise in 
     pediatric health quality measurement, and (7) voluntary 
     consensus standard setting organizations and other 
     organizations involved in the advancement of evidence-based 
     measures of health care.
       In addition, the Secretary must award grants and contracts 
     for the development, testing, and validation of new, 
     emerging, and innovative evidence-based measures for 
     children's health care services across the domains of quality 
     identified above, and must also award grants and contracts 
     for the (1) development of consensus on evidence-based 
     measures for children's health care services, (2) 
     dissemination of such measures to public and private 
     purchasers of health care for children, and (3) updating of 
     such measures as necessary.
       Beginning no later than January 1, 2012 and annually 
     thereafter, the Secretary must publish recommended changes to 
     the core measures described above that must reflect the 
     testing, validation, and consensus process for the 
     development of pediatric quality measures also described 
     above.
       The term ``pediatric quality measure'' means a measurement 
     of clinical care that is capable of being examined through 
     the collection and analysis of relevant information, that is 
     developed in order to assess one or

[[Page S10186]]

     more aspects of pediatric health care quality in various 
     institutional and ambulatory health care settings, including 
     the structure of the clinical care system, the process of 
     care, the outcome of care, or patient experiences in care.
       (c) Annual State Reports Regarding State-Specific Quality 
     of Care Measures Applied Under Medicaid or CHIP.
       Each state with an approved state plan for Medicaid or CHIP 
     must report annually to the Secretary the following: (1) 
     state-specific child health quality measures, including 
     measures of duration and stability of insurance coverage; 
     quality with respect to preventive services and care for 
     acute and chronic conditions as well as services to 
     ameliorate the effects of physical and mental conditions, and 
     to aid in growth and development; clinical quality, health 
     care safety, family experience with health care, care 
     delivered in the most integrated setting, and elimination of 
     racial, ethnic and socioeconomic disparities in health care; 
     and other measures in the initial core quality measurement 
     set identified above, and (2) state-specific information on 
     the quality of care provided to children under Medicaid and 
     CHIP, including information collected through external 
     quality reviews of Medicaid managed care organizations (under 
     Section 1932) and Medicaid benchmark plans (under Section 
     1937), and CHIP benchmark plans (under Section 2103). Not 
     later than September 30, 2009, and annually thereafter, the 
     Secretary must collect, analyze and make publicly available 
     the information reported by states as described above.
       (d) Demonstration Projects for Improving the Quality of 
     Children's Health Care and the Use of Health Information 
     Technology.
       During FY2008 through FY2012, the Secretary must award not 
     more than 10 grants to states and child health providers to 
     conduct demonstration projects to evaluate promising ideas 
     for improving the quality of children's health care furnished 
     under Medicaid and CHIP. Such projects would include efforts 
     designed to: (1) experiment with and evaluate new measures of 
     the quality of children's health care (including testing the 
     validity and suitability for reporting of such measures), (2) 
     promote the use of health information technology in care 
     delivery for children, (3) evaluate provider-based models 
     that improve the delivery of services to children, including 
     care management for children with chronic conditions and the 
     use of evidence-based approaches to improve the 
     effectiveness, safety and efficiency of health care for 
     children, or (4) demonstrate the impact of the model 
     electronic health record format for children on improving 
     pediatric health, including the effects of chronic childhood 
     health conditions, and pediatric health care quality as well 
     as reducing health care costs.
       In awarding these grants, the Secretary must ensure that 
     (1) only one demonstration project funded by such a grant 
     shall be conducted in a state, and (2) such demonstration 
     projects must be conducted evenly between states with large 
     urban areas and states with large rural areas. Grants may be 
     conducted on a multi-state basis, as needed.
       Of the total amount appropriated for this new grant program 
     for a fiscal year (described below), $20 million must be used 
     to carry out these activities.
       (e) Demonstration Projects for Reducing Childhood Obesity
      Current Law
       Greater awareness of the obesity crisis and its long-term 
     social and economic implications has encouraged policy makers 
     to fund an array of programs aimed at promoting physical 
     activity and appropriate nutrition. While many of these have 
     been state-based efforts, the federal government has actively 
     funded obesity research as well as health promotion campaigns 
     and public health surveillance systems.
       Title III of the Public Health Service Act (42 USC) obliges 
     the Secretary of Health and Human Services to ``conduct . . . 
     encourage, cooperate with, and render assistance to other 
     appropriate public authorities, scientific institutions, and 
     scientists in the conduct of, and promote the coordination 
     of, research, investigations, experiments, and 
     demonstrations, and studies relating to the causes, 
     diagnosis, treatment, control, and prevention of physical and 
     mental diseases and impairments''. In carrying out these 
     responsibilities, the Secretary is authorized to make grants-
     in-aid to universities, hospitals, laboratories, other public 
     or private institutions, and to individuals for research 
     projects.
       The National Academy of Sciences (NAS) recently noted that 
     the fundamental problem plaguing national programs seeking to 
     address the obesity crisis is that these efforts ``remain 
     fragmented and small-scale''. Moreover, obesity prevention 
     programs remain largely uncoordinated. Although many federal 
     agencies are involved in overseeing different types of 
     obesity-related programs, including the Centers for 
     Disease Control and Prevention (CDC), the Department of 
     Agriculture, the National Institutes of Health, and 
     Department of Health and Human Services, NAS concluded 
     that the lack of a dedicated funding stream for obesity 
     prevention and inadequate coordination between federal 
     agencies has led to inefficient uses of resources or 
     unnecessary redundancies in programmatic efforts.
       Another problem is that many federal funding streams 
     available to support healthy lifestyles among children have 
     been very narrowly focused on small target populations or 
     they have only addressed obesity indirectly. Examples of the 
     former include efforts which have exclusively targeted low-
     income families (usually, Medicaid recipients); by contrast, 
     health education courses aimed at American Indians with Type 
     2 diabetes exemplify the types of federally-funded efforts 
     which have indirectly served as obesity prevention programs 
     but which have reached very limited numbers of individuals in 
     the aggregate.
     Explanation of Provision
       The Secretary, in consultation with the Administrator of 
     the Centers for Medicare a Medicaid Services, shall conduct a 
     demonstration project to develop a comprehensive and 
     systematic model for reducing childhood obesity by awarding 
     grants to eligible entities to carry out such a project. The 
     model will (1) identify behavioral risk factors for obesity 
     among children; (2) identify needed clinical preventive and 
     screening benefits among those children identified as target 
     individuals on the basis of such risk factors; (3) provide 
     ongoing support to such target individuals and their families 
     to reduce risk factors and promote the appropriate use of 
     preventive and screening benefits; and (4) be designed to 
     improve health outcomes, satisfaction, quality of life, and 
     appropriate use of items and services for which medical 
     assistance is available under CHIP and Medicaid.
       Eligible entities include a city, county, or Indian tribe; 
     a local or tribal educational agency; an accredited 
     university, college, or community college; a federally-
     qualified health center; a local health department; a health 
     care provider; a community-based organization; or any other 
     entity determined appropriate by the Secretary, including a 
     consortium or partnership.
       An eligible entity awarded a grant under this provision 
     shall use the funds to (1) carry out community-based 
     activities related to reducing childhood obesity, (2) carry 
     out age-appropriate school-based activities that are designed 
     to reduce childhood obesity, (3) carry out educational, 
     counseling, promotional, and training activities through the 
     local health care delivery systems, and (4) provide, through 
     qualified health professionals, training and supervision for 
     community health workers to engage in educational efforts 
     related to obesity.
       Not later than 3 years after the Secretary implements the 
     demonstration project under this subsection, the Secretary 
     shall submit to Congress a report that describes the project, 
     evaluates the effectiveness and cost effectiveness of the 
     project, evaluates beneficiary satisfaction under the 
     project, and includes any other information the Secretary 
     deems appropriate. $25 million is authorized for this 
     purpose.
       (f) Development of Model Electronic Health Record Format 
     for Children Enrolled in Medicaid or CHIP.
       Not later than January 1, 2009, the Secretary must 
     establish a program to encourage the development and 
     dissemination of a model electronic health record format for 
     children enrolled under state plans for Medicaid or CHIP. 
     Such an electronic health record would be (1) subject to 
     state laws, accessible to parents, caregivers and other 
     consumers for the sole purpose of demonstrating compliance 
     with school or leisure activity requirements, (2) designed to 
     allow interoperable exchanges that conform with federal and 
     state privacy and security requirements, (3) structured in a 
     manner that permits parents and caregivers to view and 
     understand the extent to which the care their children 
     receive is clinically appropriate and of high quality, and 
     (4) capable of being incorporated into, and otherwise 
     compatible with, other standards developed for electronic 
     health records. Of the total amount appropriated for this new 
     grant program for a fiscal year, $5 million must be used to 
     carry out these activities.
       (g) Study of Pediatric Health and Health Care Quality 
     Measures.
       Not later than July 1, 2009, the Institute of Medicine must 
     study and report to Congress on the extent and quality of 
     efforts to measure child health status and the quality of 
     health care for children across the age span and in relation 
     to preventive care, treatments for acute conditions, and 
     treatments to ameliorate or correct physical, mental, and 
     developmental conditions in children. In conducting this 
     study, the IOM must: (1) consider all the major national 
     population-based reporting systems sponsored by the federal 
     government, including reporting requirements under federal 
     grant programs and national population surveys and estimates 
     conducted directly by the federal government, (2) identify 
     the information regarding child health and health care 
     quality that each system is designed to capture and generate, 
     the study and reporting periods covered by each system, and 
     the extent to which the information is made widely available 
     through publication, (3) identify gaps in knowledge related 
     to children's health status, health disparities among 
     subgroups of children, the effects of social conditions on 
     children's health status and use and effectiveness of health 
     care, and the relationship between child health status and 
     family income, family stability and preservation, and 
     children's school readiness and educational achievement and 
     attainment, and (4) make recommendations regarding improving 
     and strengthening the timeliness, quality, and public 
     transparency and accessibility of information about child 
     health and health care

[[Page S10187]]

     quality. Of the total amount appropriated for this new grant 
     program, up to $1 million must be used to carry out these 
     activities.
       (h) Rule of Construction.
       No evidence-based quality measure developed, published, or 
     used as a basis of measurement or reporting under this 
     section may be used to establish an irrebuttable presumption 
     regarding either the medical necessity of care or the maximum 
     permissible coverage for any individual child who is eligible 
     for and receiving assistance under Medicaid or CHIP.
       (i) Appropriations.
       An appropriation of $45 million for FY2008 through FY2012 
     would be made for the purpose of carrying out the provisions 
     of this section. Such funds would remain available until 
     expended.
       The provision would also use the federal medical assistance 
     percentage (FMAP) applicable to a given state to determine 
     the federal share of costs incurred by states for the 
     development or modification of existing claims processing and 
     retrieval systems as is necessary for the efficient 
     collection and reporting on child health measures.


  Section 502. Improved information regarding access to overage under 
                                  CHIP

     Current Law
       Under SCHIP, states must assess the operation of the SCHIP 
     state plan in each fiscal Year, including the progress made 
     in reducing the number of uncovered low-income children. They 
     must also report to the Secretary of HHS, by January 1 
     following the end of the fiscal year, the results of that 
     assessment.
       Federal regulations stipulate that each annual report 
     include the following additional information: (1) progress in 
     meeting strategic objectives and performance goals identified 
     in the state SCHIP plan, (2) effectiveness of policies to 
     discourage the institution of public coverage for private 
     coverage, (3) identification of successes and barriers in 
     state plan design and implementation, and the approaches the 
     state is considering to overcome these barriers, (4) progress 
     in addressing any specific issues (such as outreach) that the 
     state plan proposed to periodically monitor and assess, (5) 
     an updated 3-year budget, including any changes in the 
     sources of non-federal share of state pan expenditures, (6) 
     identification of total state expenditures for family 
     coverage and total number of children and adults, 
     respectively, provided family coverage during the preceding 
     fiscal year, and (7) current income standards and 
     methodologies for its SCHIP Medicaid expansion program, 
     separate SCHIP program, and its regular Medicaid program, as 
     appropriate.
     Explanation of Provision
       (a) Inclusion of Process and Access Measures in Annual 
     State Reports.
       The provision would require each state to include the 
     following information in its annual CHIP report to the 
     Secretary of HHS: (1) eligibility criteria, enrollment, and 
     retention data (including information on continuity of 
     coverage or duration of benefits), (2) data regarding the 
     extent to which the state uses process measures with respect 
     to determining the eligibility of children, including 
     measures such as 12-months of continuous eligibility, self-
     declaration of income for applications or renewals, or 
     presumptive eligibility, (3) data regarding denials of 
     eligibility and redeterminations of eligibility, (4) data 
     regarding access to primary and specialty services, access to 
     networks of care, and care coordination provided under the 
     state CHIP plan, using quality of care and consumer 
     satisfaction measures included in the Consumer Assessment of 
     Healthcare Providers and Systems (CAHPS) survey, (5) if the 
     state provides child health assistance in the form of premium 
     assistance for the purchase of coverage under a group health 
     plan, data regarding the provision of such assistance, 
     including the extent to which employer-sponsored health 
     insurance coverage is available for children eligible for 
     CHIP, the range of the monthly amount of such assistance 
     provided on behalf or a child or family, the number of 
     children or families provided such assistance on a monthly 
     basis, the income of the children or families provided such 
     assistance, the benefits and cost-sharing protection provided 
     under the state CHIP plan to supplement the coverage 
     purchased with such premium assistance, the effective 
     strategies the state engages in to reduce any administrative 
     barriers to the provision of such assistance, and, the 
     effects, if any, of the provision of such assistance on 
     preventing the coverage under CHIP from substituting for 
     coverage provided under employer-sponsored health insurance 
     offered in the state, and (6) to the extent applicable, a 
     description of any state activities that are designed to 
     reduce the number of uncovered children in the state, 
     including through a state health insurance connector program 
     or support for innovative private health coverage 
     initiatives.
       (b) GAG Study and Report on Access to Primary and Specialty 
     Services.
       The provision would require GAO to conduct a study of 
     children's access to primary and specialty services under 
     Medicaid and CHIP, including (1) the extent to which 
     providers are willing to treat children eligible for such 
     programs, (2) information on such children's access to 
     networks of care, (3) geographic availability of primary and 
     specialty services under such programs, (4) the extent to 
     which care coordination is provided for children's care under 
     Medicaid and CHIP, and (5) as appropriate, information on the 
     degree of availability of services for children under such 
     programs.
       In addition, not later than 2 years after the date of 
     enactment of this Act, GAO must submit a report to the 
     appropriate committees of Congress on this study that 
     includes recommendations for such federal and state 
     legislative and administrative changes as GAO determines are 
     necessary to address any barriers to access to children's 
     care under Medicaid and CHIP that may exist.


Section 503. Application of certain managed care quality safeguards to 
                                  CHIP

     Current Law
       A number of sections of the Social Security Act apply to 
     states under title XXI (SCHIP) in the same manner as they 
     apply to a state under title XIX (Medicaid). These include:
       Section 1902(a)(4)(C) (relating to conflict of interest 
     standards).
       Paragraphs (2), (16), and (17) of section 1903(i) (relating 
     to limitations on payment).
       Section 1903(w) (relating to limitations on provider taxes 
     and donations).
       Section 1920A (relating to presumptive eligibility for 
     children).
     Explanation of Provision
       The provision would add the same requirements for CHIP 
     managed care entities as currently exist under Medicaid. 
     Specifically, the provision would add reference to Medicaid's 
     statutory requirements on: the process for plan enrollment, 
     termination, and change of enrollment; the type of 
     information provided to enrollees and potential enrollees on 
     providers, covered services, enrollee rights, and other forms 
     of information; beneficiary protections; quality assurance 
     standards; protections against fraud and abuse; and sanctions 
     against managed care plans for noncompliance.

                        Title VI--Miscellaneous


  Section 601. Technical correction regarding current State authority 
                             under Medicaid

     Current Law
       States may provide SCHIP through an expansion of their 
     Medicaid programs. Expenditures for such populations of 
     targeted low-income children are matched at the enhanced FMAP 
     rate and are paid out of SCHIP allotments.
     Explanation of Provision
       With respect to expenditures for Medicaid for fiscal years 
     2007 and 2008 only, a state may elect (1) to cover optional 
     poverty-related children and, may apply less restrictive 
     income methodologies to such individuals (via authority in 
     Section 1902(r) or through Section 1931 (b )(2)( C)), for 
     which the regular Medicaid FMAP, rather than the enhanced 
     FMAP applicable to CHIP, would be used to determine the 
     federal share of such expenditures, or (2) to receive the 
     regular Medicaid FMAP, rather than the enhanced CHIP FMAP, 
     for CHIP children under an expansion of the state's Medicaid 
     program. This provision would be repealed as of October 1, 
     2008 (i.e., the beginning of fiscal year 2009). States 
     electing these options would be ``held harmless'' for related 
     expenditures in FY2007 and FY2008, once this repeal takes 
     effect.


         Section 602. Payment Error Rate Measurement (``PERM'')

     Current Law
       P.L. 107-300 requires the heads of Federal agencies 
     annually to review programs they oversee that are susceptible 
     to significant erroneous payments, and to estimate the amount 
     of improper payments, to report those estimates to Congress, 
     and to submit a report on actions the agency is taking to 
     reduce erroneous expenditures.
       The Center for Medicare and Medicaid Services (CMS), the 
     federal agency within HHS that administers the Medicaid and 
     SCHIP programs, issued an interim final rule with comment 
     period on August 28, 2006, regarding Payment Error Rate 
     Measurement (PERM) for the Medicaid and SCHIP programs. This 
     rule was effective on October 1, 2006. In addition to P.L. 
     107-300, this regulation points to Sections 1102, 1902(a)(6) 
     and 2107(b)(1) of the Social Security Act which contains the 
     Secretary's general rulemaking authority and obligation of 
     the states to provide information, as the Secretary may 
     require, to monitor program performance. Section 
     1902(a)(27)(B) also requires states to require providers to 
     furnish State Medicaid Agencies and the Secretary with 
     information regarding payments claimed by Medicaid providers 
     for furnishing Medicaid services. Payment error rates will be 
     calculated for fee-for-service (FFS) claims, managed care 
     claims and for eligibility determinations. The preamble to 
     this regulation notes that CMS will hire Federal contractors 
     to review Medicaid and SCHIP FFS and managed care claims and 
     to calculate the state-specific and national error rates for 
     both programs. States will calculate the state-specific 
     eligibility error rates. Based on those rates, the Federal 
     contractor will calculate the national eligibility error rate 
     for each program. CMS plans to sample a subset of states each 
     year rather than measure every state every year.
       With respect to Medicaid and SCHIP eligibility reviews 
     under PERM, states selected for review in a given year must 
     conduct reviews of a statistically valid random sample of 
     beneficiary claims to determine if improper payments were 
     made based on errors in the state agency's eligibility 
     determinations. States must have a CMS-approved sampling 
     plan. In addition to reporting error

[[Page S10188]]

     rates, states must also submit a corrective action plan based 
     on its error rate analysis, and must return overpayments of 
     federal funds.
       Medicaid Eligibility Quality Control (MEQC) is operated by 
     State Medicaid agencies to monitor and improve the 
     administration of its Medicaid program. The traditional MEQC 
     program is based on State reviews of Medicaid beneficiaries 
     identified through a statistically reliable statewide sample 
     of cases selected from the eligibility files. These reviews 
     are conducted to determine whether the sampled cases meet 
     applicable Title XIX eligibility requirements and to 
     determine if a State has made erroneous excess payments in 
     its program. ``Erroneous excess payments for medical 
     assistance'' reflect: a) payments made on behalf of 
     ineligible individuals and families, and b) overpayments on 
     behalf of eligible individuals and families by reason of 
     error in determining the amount of expenditures for medical 
     care required of an individual or family as a condition of 
     eligibility.
       The SCHIP statute specifies that federal SCHIP funds can be 
     used for SCHIP health insurance coverage, called child health 
     assistance that meets certain requirements. States may also 
     provide benefits to SCHIP children, called targeted low-
     income children, through enrollment in Medicaid. Apart from 
     these benefit payments, SCHIP payments for four other 
     specific health care activities can be made, including: (1) 
     other child health assistance for targeted low-income 
     children; (2) health services initiatives to improve the 
     health of targeted low-income children and other low-income 
     children; (3) outreach activities; and (4) other reasonable 
     administrative costs. For a given fiscal year, SCHIP statute 
     specifies that payments for these four other specific health 
     care activities cannot exceed 10% of the total amount of 
     expenditures for benefits (excluding payments for services 
     rendered during periods of presumptive eligibility under 
     Medicaid) and other specific health care activities combined.
     Explanation of Provision
       The provision would apply a federal matching rate of 90 
     percent to expenditures related to administration of PERM 
     requirements applicable to CHIP.
       The provision would also exclude from the 10% cap on CHIP 
     administrative costs all expenditures related to the 
     administration of PERM requirements applicable to CHIP in 
     accordance with P.L. 107-300, existing regulations, and any 
     related or successor guidance or regulations.
       In addition, the Secretary must not calculate or publish 
     any national or state-specific error rate based on the 
     application of PERM requirements to CHIP until after the date 
     that is 6 months after the date on which a final rule 
     implementing such requirements (described below) is in effect 
     for all states. Any calculation of a national error rate or a 
     state specific error rate after such a final rule is in 
     effect for all states may only be inclusive of errors, as 
     defined in such final rule or in guidance issued within a 
     reasonable time frame after the effective date for such final 
     rule that includes detailed guidance for the specific 
     methodology for error determinations.
       The final rule implementing the PERM requirements must 
     include: (1) clearly defined criteria for errors for both 
     states and providers, (2) a clearly defined process for 
     appealing error determinations by review contractors, and (3) 
     clearly defined responsibilities and deadlines for states in 
     implementing any corrective action plans.
       After the final PERM rule is in effect for all states, a 
     state for which the PERM requirements were first in effect 
     under an interim final rule for FY2007 may elect to accept 
     any payment error rate determined in whole or in part for the 
     state on the basis of data for that fiscal year or may elect 
     to not have an payment error rate determined on the basis of 
     such data and, instead, must be treated as if FY2010 were the 
     first year for which the PERM requirements apply to the 
     state.
       If the final PERM rule is not in effect for all states by 
     July 1, 2008, a state for which the PERM requirements were 
     first in effect under an interim final rule for FY2008 may 
     elect to accept any payment error rate determined in whole or 
     in part for the state on the basis of data for that fiscal 
     year, or may elect to not have any payment error rate 
     determined on the basis of such data and, instead, must be 
     treated as if FY2011 were the first fiscal year for which the 
     PERM requirements apply to the state.
       In addition, the provision would require the Secretary to 
     review the Medicaid Eligibility Quality Control (MEQC) 
     requirements with the PERM requirements and coordinate 
     consistent implementation of both sets of requirements, while 
     reducing redundancies. A state may elect, for purposes of 
     determining the erroneous excess payments for medical 
     assistance ratio applicable to the state under MEQC, to 
     substitute data resulting from the application of PERM 
     requirements after the final PERM rule is in effect for all 
     states for the data used for the MEQC requirements.
       The Secretary must also establish state-specific sample 
     sizes for application of the PERM requirements with respect 
     to CHIP for FY2009 and thereafter, on the basis of 
     information as the Secretary determines is appropriate. In 
     establishing such sample sizes, the Secretary must, to the 
     greatest extent possible (1) minimize the administrative cost 
     burden on states under Medicaid and CHIP, and (2) maintain 
     state flexibility to manage these programs.


    Section 603. Elimination of counting Medicaid child presumptive 
             eligibility costs against Title XXI Allotment

     Current Law
       Under Medicaid presumptive eligibility rules, states are 
     allowed to temporarily enroll (for up to 2 months) children 
     whose family income appears to be below applicable Medicaid 
     income standards, until a formal determination of eligibility 
     is made. Payments on behalf of Medicaid children during 
     periods of presumptive eligibility are matched at the regular 
     Medicaid FMAP, but are paid out of state SCHIP allotments.
     Explanation of Provision
       The provision would strike the language in existing CHIP 
     statute that sets the federal share of costs incurred during 
     periods of presumptive eligibility for children at the 
     Medicaid FMAP rate, and also strikes the language that allows 
     payment out of CHIP allotments for Medicaid benefits received 
     by Medicaid children during periods of presumptive 
     eligibility.


                 Section 604. Improving data collection

     Current Law
       As discussed in Section 102, the percentage of the SCHIP 
     appropriation that is allotted to individual states is based 
     primarily on state-level estimates of (1) the number of low-
     income children and (2) the number of uninsured low-income 
     children, based on a three-year average of the Annual Social 
     and Economic (ASEC) Supplements (formerly known as the March 
     supplements) to the Census Bureau's Current Population Survey 
     (CPS). Based on these CPS estimates, some states' share of 
     the available national allotment in the second year of SCHIP 
     (FY1999) was going to differ markedly from the prior year's 
     (e.g., a share of the available national allotment in FY1999 
     that would have been approximately 40% lower or higher than 
     in FY1998). As a result, legislation was enacted to base the 
     FY1999 SCHIP allotments on the states' share of the available 
     national allotment as calculated for FY1998.
       Separate legislation was also enacted to add two new floors 
     and a ceiling to ensure that a state's share of the available 
     national allotment did not change by more than certain 
     amounts, as compared to the state's prior-year share and the 
     state's FY1998/FY1999 share.
       Another piece of legislation was also enacted that required 
     appropriate adjustments to the CPS (1) to produce 
     statistically reliable annual state data on the number of 
     low-income children who do not have health insurance 
     coverage, so that real changes in the uninsurance rates of 
     children can reasonably be detected; (2) to produce data that 
     categorizes such children by family income, age, and race or 
     ethnicity; and (3) where appropriate, to expand the sample 
     size used in the state sampling units, to expand the number 
     of sampling units in a state, and to include an appropriate 
     verification element. For this purpose, $10 million was 
     appropriated annually, beginning in FY2000. Because of this 
     legislation, the number of sampled households in the ASEC CPS 
     increased by about 50% (34,500 households). Even with the 
     sample expansion, the margins of error of the state-level 
     estimates of the number of low-income children, and 
     particularly the estimates of low-income children without 
     health insurance, can be relatively high, especially in 
     smaller states.
     Explanation of Provision
       Besides the $10 million provided annually for the CPS since 
     FY2000, an additional $10 million (for a total of $20 million 
     additionally) is appropriated. In addition to the current-law 
     requirements of the additional appropriation, for data 
     collection beginning in FY2008, in appropriate consultation 
     with the HHS Secretary, the Secretary of Commerce shall do 
     the following:
       Make appropriate adjustments to the CPS to develop more 
     accurate state-specific estimates of the number of children 
     enrolled in CHIP or Medicaid;
       Make appropriate adjustments to the CPS to improve the 
     survey estimates used to compile the state-specific and 
     national number of low-income children without health 
     insurance for purposes of determining annual CHIP allotments, 
     and for making payments to states from the CHIP Incentive 
     Pool, the CHIP Contingency Fund, and, to the extent 
     applicable to a State, from the block grant set aside for 
     CHIP payments on behalf of parents in FY2010 through FY2012;
       Include health insurance survey information in the American 
     Community Survey (ACS) related to children;
       Assess whether ACS estimates, once such survey data are 
     first available, produce more reliable estimates than the CPS 
     for CHIP allotments and payments;
       On the basis of that assessment, recommend to the HHS 
     Secretary whether ACS estimates should be used in lieu of, or 
     in some combination with, CPS estimates for CHIP purposes; 
     and
       Continue making the adjustments to expansion of the sample 
     size used in State sampling units, the number of sampling 
     units in a State, and using an appropriate verification 
     element.
       If the Commerce Secretary recommends to the HHS Secretary 
     that ACS estimates should be used instead of, or in 
     combination with, CPS estimates for CHIP purposes, the HHS 
     Secretary may provide a transition period for using ACS 
     estimates, provided that

[[Page S10189]]

     the transition is implemented in a way that avoids adverse 
     impacts on states.


        Section 605. Deficit Reduction Act Technical Correction

       State Flexibility in Benefit Packages.
     Current Law
       Under the Early and Periodic, Screening, Diagnostic and 
     Treatment (EPSDT) benefit under Medicaid, most children under 
     age 21 receive comprehensive basic screening services (i.e., 
     well-child visits including age-appropriate immunizations) as 
     well as dental, vision and hearing services. In addition, 
     EPSDT guarantees access to all federally coverable services 
     necessary to treat a problem or condition among eligible 
     individuals.
       Under Medicaid, categorically needy (CN) eligibility groups 
     include families with children, the elderly, certain 
     individuals with disabilities, and certain other pregnant 
     women and children who meet applicable financial eligibility 
     standards. Some CN eligibility groups must be covered while 
     others are optional. Medically needy (MN) groups include the 
     same types of individuals, but different, typically higher 
     financial standards apply. All MN eligibility groups are 
     optional.
       The Deficit Reduction Act of 2005 (DRA; P.L. 109-171) gave 
     states the option to provide Medicaid to state-specified 
     groups through enrollment in benchmark and benchmark-
     equivalent coverage which is nearly identical to plans 
     available under SCHIP (described above). For any child under 
     age 19 in one of the major mandatory and optional CN 
     eligibility groups (defined in Section 1902(a)(10)(A)), wrap-
     around benefits to the DRA benchmark and benchmark-equivalent 
     coverage includes EPSDT (described above). In traditional 
     Medicaid, EPSDT is available to individuals under age 21 in 
     CN groups, and may be offered to individuals under 21 in MN 
     groups.
       DRA identifies a number of groups as exempt from mandatory 
     enrollment in benchmark or benchmark equivalent plans. One 
     such exempted group is children in foster care receiving 
     child welfare services under Part B of title IV of the Social 
     Security Act and children receiving foster care or adoption 
     assistance under Part E of such title.
     Explanation of Provision
       The provision would require that EPSDT be covered for any 
     individual under age 21 who is eligible for Medicaid through 
     the state plan under one of the major mandatory and optional 
     CN groups and is enrolled in benchmark or benchmark-
     equivalent plans authorized under DRA. The provision would 
     also give states flexibility in providing coverage of EPSDT 
     services through the issuer of benchmark or benchmark-
     equivalent coverage or otherwise.
       The provision would also make a correction to the reference 
     to children in foster care receiving child welfare services.
       Finally, not later than 30 days after the date the 
     Secretary approves a state plan amendment to provide 
     benchmark or benchmark-equivalent coverage under Medicaid, 
     the Secretary must publish in the Federal Register and on the 
     internet website of CMS, a list of the provisions in Title 
     XIX that the Secretary has determined do not apply in order 
     to enable the state to carry out such a state plan amendment 
     and the reason for each such determination.
       The amendments made by this provision would become 
     effective as if included in Section 6044(a) of the DRA (i.e., 
     March 31, 2006).


        Section 606. Elimination of confusing program references

     Current Law
       P.L. 106-113 directed the Secretary of HHS or any other 
     Federal officer or employee, with respect to references to 
     the program under Title XXI of the Social Security Act, in 
     any publication or official communication to use the term 
     ``SCHIP'' instead of ``CHIP'' and to use the term ``State 
     children's health insurance program'' instead of ``children's 
     health insurance program.''
     Explanation of Provision
       The provision would repeal the section in P.L 106-113 
     providing the program references to ``SCHIP'' and ``State 
     children's health insurance program'' for official 
     publication and communication purposes.


            Section 607. Mental Health Parity in CHIP Plans

     Current Law
       In 1996, Congress passed the Mental Health Parity Act 
     (MHPA) that established new federal standards for mental 
     health coverage offered by group health plans, most of which 
     are employment-based. Under provisions included in the 1997 
     Balanced Budget Act (P.L. 105-33), Medicaid managed care 
     plans and SCHIP programs must comply with the requirements of 
     MHPA.
       Medicaid expansions under SCHIP follow Medicaid rules. 
     Thus, when such expansions provide for enrollment in Medicaid 
     managed care plans, the MHPA applies. Separate state programs 
     under SCHIP follow SCHIP rules that have broader application 
     than the Medicaid rules. In separate state SCHIP programs, to 
     the extent that a health insurance issuer offers group health 
     insurance coverage, which can include, but is not limited to 
     managed care, the MHPA applies.
       Under MHPA, Medicaid and SCHIP plans may define what 
     constitutes mental health benefits (if any). The MHPA 
     prohibits group plans from imposing annual and lifetime 
     dollar limits on mental health coverage that are more 
     restrictive than those applicable to medical and surgical 
     coverage. Full parity is not required, that is, group plans 
     may still impose more restrictive treatment limits (e.g., 
     with respect to total number of outpatient visits or 
     inpatient days) or cost-sharing requirements on mental health 
     coverage compared to their medical and surgical services.
       Under Medicaid managed care, state Medicaid agencies 
     contract with managed care organizations (MCOs) to provide a 
     specified set of benefits to enrolled beneficiaries. These 
     MCOs may be paid under a variety of arrangements, but are 
     frequently reimbursed on the basis of a pre-determined 
     monthly fee (called a capitation rate) for each enrolled 
     beneficiary. The contracted benefits may include all, some, 
     or none of the mandatory and optional mental health services 
     covered under the state Medicaid plan. When Medicaid managed 
     care plans do not include all covered mental health benefits, 
     these additional services are sometimes ``carved out'' to a 
     separate, specialized behavioral health managed care entity 
     (usually subject to its own prepaid capitation rates), or may 
     be provided in the fee-for-service setting, in which Medicaid 
     providers are paid directly by the state Medicaid agency for 
     each covered service delivered to a Medicaid beneficiary. All 
     prepaid Medicaid managed care contracts that cover medical/
     surgical benefits and mental health benefits must comply with 
     the MHPA without exemptions. The MHPA does not apply to fee-
     for-service arrangements because state Medicaid agencies do 
     not meet the definition of a group health plan.
       With respect to covered benefits, separate SCHIP programs 
     tend to look more like private insurance models than like 
     Medicaid. That is, these programs are more likely to cover 
     traditional benefits (e.g., inpatient hospital services, 
     physician services) that would be found in employer-based 
     health insurance plans than certain service categories that 
     are largely unique to Medicaid (e.g., EPSDT, residential 
     treatment facilities, intermediate care facilities for the 
     mentally retarded or ICF/MRs, and institutions for mental 
     disease or IMDs). Most separate SCHIP programs also provide 
     services through managed care plans, although this situation 
     varies by state. Again, all or some covered mental health 
     services may be included in MCO contracts, or carved out to 
     specialized behavioral health managed care plans, or may be 
     provided on a fee-for-service basis.
       Under CHIP, states may provide coverage under their 
     Medicaid programs (MXP), create a new separate SCHIP program 
     (SSP), or both. Under SSPs, states may elect any of three 
     benefit options: (1) a benchmark plan, (2) a benchmark-
     equivalent plan, or (3) any other plan that the Secretary of 
     HHS deems would provide appropriate coverage for the target 
     population (called Secretary-approved benefit plans). 
     Benchmark plans include (1) the standard Blue Cross/Blue 
     Shield preferred provider option under FEHBP, (2) the 
     coverage generally available to state employees, and (3) the 
     coverage offered by the largest commercial HMO in the state.
       Benchmark-equivalent plans must cover basic benefits (i.e., 
     inpatient and outpatient hospital services, physician 
     services, lab/x-ray, and well-child care including 
     immunizations), and must include at least 75% of the 
     actuarial value of coverage under the selected benchmark plan 
     for specific additional benefits (i.e., prescription drugs, 
     mental health services, vision care and hearing services).
     Explanation of Provision
       This section prohibits discriminatory limits on mental 
     health care in separate CHIP plans by directing that any 
     financial requirements or treatment limitations that apply to 
     mental health or substance abuse services must be no more 
     restrictive than the financial requirements or treatment 
     limits that apply to other medical services. It also 
     eliminates a current law provision that authorizes states to 
     reduce the mental health coverage provided to 75 percent of 
     the coverage provided in CHIP benchmark plans.


                   Section 608. Dental Health Grants

     Current Law
       Under SCHIP, states may provide coverage under their 
     Medicaid programs (MXP), create a new separate SCHIP program 
     (SSP), or both. Under SSPs, states may elect any of three 
     benefit options: (1) a benchmark plan, (2) a benchmark-
     equivalent plan, or (3) any other plan that the Secretary of 
     HHS deems would provide appropriate coverage for the target 
     population (called Secretary-approved benefit plans). 
     Benchmark plans include (1) the standard Blue Cross/Blue 
     Shield preferred provider option under FEHBP, (2) the 
     coverage generally available to state employees, and (3) the 
     coverage offered by the largest commercial HMO in the state.
       Benchmark-equivalent plans must cover basic benefits (i.e., 
     inpatient and outpatient hospital services, physician 
     services, lab/x-ray, and well-child care including 
     immunizations), and must include at least 75% of the 
     actuarial value of coverage under the selected benchmark plan 
     for specific additional benefits (i.e., prescription drugs, 
     mental health services, vision care and hearing services).
       SCHIP regulations specify that, regardless of the type of 
     SCHIP health benefits coverage, states must provide coverage 
     of well-baby and well-child care (as defined by the state), 
     age-appropriate immunizations based on recommendations of the 
     Advisory Committee on Immunization Practices (ACIP), and 
     emergency services.

[[Page S10190]]

     Explanation of Provision
       This section provides up to $200 million in federal grants 
     for states to improve the availability of dental services and 
     strengthen dental coverage for children covered under CHIP. 
     States that receive grants would be required to maintain 
     prior levels of spending for dental services provided under 
     CHIP.


  Section 609. Application of Prospective Payment System for Services 
Provided by Federally-Qualified Health Centers and Rural Health Clinics

     Current Law
       Under current Medicaid law, federally-qualified health 
     centers (FQHCs) and rural health clinics (RHCs) are paid 
     based on a prospective payment system. Beginning in FY200l, 
     per visit payments were based on 100% of average costs during 
     1999 and 2000 adjusted for changes in the scope of services 
     furnished. (Special rules applied to entities first 
     established after 2000). For subsequent years, the per visit 
     payment for all FQHCs and RHCs equals the amounts for the 
     preceding fiscal year increased by the percentage increase in 
     the Medicare Economic Index applicable to primary care 
     services, and adjusted for any changes in the scope of 
     services furnished during that fiscal year. In managed care 
     contracts, states are required to make supplemental payments 
     to the facility equal to the difference between the 
     contracted amount and the cost-based amounts.
     Explanation of Provision
       This section would establish a prospective payment system 
     in CHIP for FQHCs and RHCs similar to the payment system 
     established by the Medicare, Medicaid, and SCHIP Benefits 
     Improvement and Protection Act of 2000 (BIPA) applicable 
     under Medicaid law. States that operate separate or 
     combination CHIP programs would be required to reimburse 
     FQHCs and RHCs based on the Medicaid Prospective Payment 
     System, starting in FY 09. A one-time appropriation of $5 
     million will be made available to the Secretary of HHS to be 
     provided to affected states to enable them to transition to 
     the new payment system on the affected states. The Secretary 
     would be required to monitor the impact of the application of 
     the payment system on states and report to Congress within 
     two years of implementation on any effect on access to 
     benefits, provider payment rates, or scope of benefits 
     offered by affected states.

                     Title VII--Revenue Provisions

                       Title VIII--Effective Date


                      Section 801. Effective date

     Current Law
       No provision.
     Explanation of Provision
       The effective date of this bill except with respect to 
     section 301 would be October 1, 2007, whether or not final 
     regulations to carry out provisions in the bill have been 
     promulgated by that date. In the case of both current state 
     CHIP and Medicaid plans, if the Secretary of HHS determines 
     that a state must pass new state legislation to implement the 
     requirements of this bill, the state's existing CHIP and/or 
     Medicaid plans, if applicable, would not be considered to be 
     out of compliance solely on the basis of its failure to meet 
     such requirements before the first day of the first calendar 
     quarter beginning after the close of the first regular 
     session of the state legislature that begins after the date 
     of enactment of this bill. In the case of a state that has a 
     2-year legislative session, each year of such session must be 
     considered to be a separate regular session of the state 
     legislature. With respect to section 301, the effective date 
     will be October 1, 2008.
                                 ______
                                 
      By Mr. REID (for Mr. Dodd (for himself, Mr. Nelson of Nebraska, 
        Mr. Kennedy, Mr. Reed, and Mr. Lieberman)):
  S. 1894. A bill to amend the Family and Medical Leave Act of 1993 to 
provide family and medical leave to primary caregivers of 
servicemembers with combat-related injuries; to the Committee on 
Health, Education, Labor, and Pensions.
  (At the request of Mr. Reid, the following statement was ordered to 
be printed in the Record.)
 Mr. DODD. Mr. President, I rise today to introduce the Support 
for Injured Servicemembers Act of 2007. This bill will implement one of 
the key recommendations of the President's Commission on Care for 
America's Returning Wounded Warriors. First of all, I commend former 
Senator Bob Dole, former Secretary of Health and Human Services Donna 
Shalala, and the distinguished members of the Commission for their 
thoughtfulness and thorough work on this critically important matter.
  More than 20 years ago, I began the effort to bring job protection to 
hard-working Americans so they wouldn't have to choose between the 
family they love and the job they need. This effort, after more than 
seven years, three presidents, and two vetoes, eventually led to the 
enactment of the Family Medical Leave Act, FMLA, which provides 12 
weeks of unpaid leave for eligible employees to care for a newborn or 
adopted child, their own serious illness or that of a loved one. Since 
its passage, I have worked to expand this act to cover more workers and 
to provide for wage replacement, so that more employees can afford to 
take leave when necessary.
  Mr. President, it is essential that we do everything possible to 
support our troops and to allow their loved ones to be with them as 
they recover from a combat-related injury or illness. That is why we 
must expand and improve leave benefits to those caring for our injured 
or ill servicemembers. The bill I introduce today provides up to 6 
months of FMLA leave for primary caregivers of servicemembers who 
suffer from a combat-related injury or illness. FMLA currently provides 
for 3 months of unpaid leave to a spouse, parent or child acting as a 
caregiver for a person with a serious illness. However, some of those 
injured in service to our country rely on other family members or 
friends to care for them as they recover. This legislation allows these 
other primary caregivers, such as siblings, cousins, friends or 
significant others to take leave from their employment when our 
returning heroes need them most.
  Our troops are giving their all on the battlefield. The very least 
our Government owes them is its total support for their family and 
medical needs. While FMLA has provided critical support to more than 50 
million American families, I will not rest until we are able to 
modernize this statute to cover our wounded warriors. Plain and simple, 
the loved ones of these brave men and women should be allowed to care 
for them without the fear of losing their job.
  I am pleased that I am joined today by Senators Ben Nelson, Kennedy, 
Reed and Lieberman in introducing the Support for Injured 
Servicemembers Act of 2007 and ask for the support of all my colleagues 
for this critically important effort to care for our returning wounded 
warriors and their loved ones.
  I ask unanimous consent that the text of the bill be printed in the 
Record. 
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1894

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Support for Injured 
     Servicemembers Act of 2007''.

     SEC. 2. SERVICEMEMBER FAMILY LEAVE.

       (a) Definitions.--Section 101 of the Family and Medical 
     Leave Act of 1993 (29 U.S.C. 2611) is amended by adding at 
     the end the following:
       ``(14) Combat-related injury.--The term `combat-related 
     injury' means an injury or illness that was incurred (as 
     determined under criteria prescribed by the Secretary of 
     Defense)--
       ``(A) as a direct result of armed conflict;
       ``(B) while an individual was engaged in hazardous service;
       ``(C) in the performance of duty under conditions 
     simulating war; or
       ``(D) through an instrumentality of war.
       ``(15) Servicemember.--The term `servicemember' means a 
     member of the Armed Forces.''.
       (b) Entitlement to Leave.--Section 102(a) of such Act (29 
     U.S.C. 2612(a)) is amended by adding at the end the 
     following:
       ``(3) Servicemember family leave.--Subject to section 103, 
     an eligible employee who is the primary caregiver for a 
     servicemember with a combat-related injury shall be entitled 
     to a total of 26 workweeks of leave during any 12-month 
     period to care for the servicemember.
       ``(4) Combined leave total.--An eligible employee shall be 
     entitled to a combined total of 26 workweeks of leave under 
     paragraphs (1) and (3).''.
       (c) Requirements Relating to Leave.--
       (1) Schedule.--Section 102(b) of such Act (29 U.S.C. 
     2612(b)) is amended--
       (A) in paragraph (1), by inserting after the second 
     sentence the following: ``Subject to paragraph (2), leave 
     under subsection (a)(3) may be taken intermittently or on a 
     reduced leave schedule''; and
       (B) in paragraph (2), by inserting ``or subsection (a)(3)'' 
     after ``subsection (a)(1)''.
       (2) Substitution of paid leave.--Section 102(d) of such Act 
     (29 U.S.C. 2612(d)) is amended--
       (A) in paragraph (1)--
       (i) by inserting ``(or 26 workweeks in the case of leave 
     provided under subsection (a)(3))'' after ``12 workweeks'' 
     the first place it appears; and
       (ii) by inserting ``(or 26 workweeks, as appropriate)'' 
     after ``12 workweeks'' the second place it appears; and
       (B) in paragraph (2)(B), by adding at the end the 
     following: ``An eligible employee

[[Page S10191]]

     may elect, or an employer may require the employee, to 
     substitute any of the accrued paid vacation leave, personal 
     leave, family leave, or medical or sick leave of the employee 
     for leave provided under subsection (a)(3) for any part of 
     the 26-week period of such leave under such subsection.''.
       (3) Notice.--Section 102(e) of such Act (29 U.S.C. 2612(e)) 
     is amended by adding at the end the following:
       ``(3) Notice for servicemember family leave.--In any case 
     in which an employee seeks leave under subsection (a)(3), the 
     employee shall provide such notice as is practicable.''.
       (4) Certification.--Section 103 of such Act (29 U.S.C. 
     2613) is amended by adding at the end the following:
       ``(f) Certification for Servicemember Family Leave.--An 
     employer may require that a request for leave under section 
     102(a)(3) be supported by a certification issued at such time 
     and in such manner as the Secretary may by regulation 
     prescribe.''.
       (5) Failure to return.--Section 104(c) of such Act (29 
     U.S.C. 2614(c)) is amended--
       (A) in paragraph (2)(B)(i), by inserting ``or section 
     102(a)(3)'' before the semicolon; and
       (B) in paragraph (3)(A)--
       (i) in clause (i), by striking ``or'' at the end;
       (ii) in clause (ii), by striking the period and inserting 
     ``; or''; and
       (iii) by adding at the end the following:
       ``(iii) a certification issued by the health care provider 
     of the person for whom the employee is the primary caregiver, 
     in the case of an employee unable to return to work because 
     of a condition specified in section 102(a)(3).''.
       (6) Enforcement.--Section 107 of such Act (29 U.S.C. 2617) 
     is amended, in subsection (a)(1)(A)(i)(II), by inserting 
     ``(or 26 weeks, in a case involving leave under section 
     102(a)(3))'' after ``12 weeks''.
       (7) Instructional employees.--Section 108 of such Act (29 
     U.S.C. 2618) is amended, in subsections (c)(1), (d)(2), and 
     (d)(3), by inserting ``or section 102(a)(3)'' after ``section 
     102(a)(1)''.

     SEC. 3. SERVICEMEMBER FAMILY LEAVE FOR CIVIL SERVICE 
                   EMPLOYEES.

       (a) Definitions.--Section 6381 of title 5, United States 
     Code, is amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) in paragraph (6), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(7) the term `combat-related injury' means an injury or 
     illness that was incurred (as determined under criteria 
     prescribed by the Secretary of Defense)--
       ``(A) as a direct result of armed conflict;
       ``(B) while an individual was engaged in hazardous service;
       ``(C) in the performance of duty under conditions 
     simulating war; or
       ``(D) through an instrumentality of war; and
       ``(8) the term `servicemember' means a member of the Armed 
     Forces.''.
       (b) Entitlement to Leave.--Section 6382(a) of such title is 
     amended by adding at the end the following:
       ``(3) Subject to section 6383, an employee who is the 
     primary caregiver for a servicemember with a combat-related 
     injury shall be entitled to a total of 26 administrative 
     workweeks of leave during any 12-month period to care for the 
     servicemember.
       ``(4) An employee shall be entitled to a combined total of 
     26 administrative workweeks of leave under paragraphs (1) and 
     (3).''.
       (c) Requirements Relating to Leave.--
       (1) Schedule.--Section 6382(b) of such title is amended--
       (A) in paragraph (1), by inserting after the second 
     sentence the following: ``Subject to paragraph (2), leave 
     under subsection (a)(3) may be taken intermittently or on a 
     reduced leave schedule.''; and
       (B) in paragraph (2), by inserting ``or subsection (a)(3)'' 
     after ``subsection (a)(1)''.
       (2) Substitution of paid leave.--Section 6382(d) of such 
     title is amended by adding at the end the following: ``An 
     employee may elect to substitute for leave under subsection 
     (a)(3) any of the employee's accrued or accumulated annual or 
     sick leave under subchapter I for any part of the 26-week 
     period of leave under such subsection.''.
       (3) Notice.--Section 6382(e) of such title is amended by 
     adding at the end the following:
       ``(3) In any case in which an employee seeks leave under 
     subsection (a)(3), the employee shall provide such notice as 
     is practicable.''.
       (4) Certification.--Section 6383 of such title is amended 
     by adding at the end the following:
       ``(f) An employing agency may require that a request for 
     leave under section 6382(a)(3) be supported by a 
     certification issued at such time and in such manner as the 
     Office of Personnel Management may by regulation 
     prescribe.''.

                          ____________________