[Congressional Record (Bound Edition), Volume 153 (2007), Part 16]
[Senate]
[Pages 22096-22127]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 2593. Mr. LOTT (for himself, Mr. McConnell, Mr. Kyl, Mr. Gregg, 
Mr. Cornyn, Mr. Bunning, Mr. Coburn, Mr. DeMint, and Mrs. Dole) 
proposed an amendment to amendment SA 2530 proposed by Mr. Baucus (for 
himself, Mr. Grassley, Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 
976, to amend the Internal Revenue Code of 1986 to provide tax relief 
for small businesses, and for other purposes; as follows:

       On page 1, line 3, strike all after ``Section'' and insert 
     the following:

     1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Kids First 
     Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

   TITLE I--STATE CHILDREN'S HEALTH INSURANCE PROGRAM REAUTHORIZATION

Sec. 101. 5-Year reauthorization.
Sec. 102. Allotments for the 50 States and the District of Columbia 
              based on expenditures and numbers of low-income children.
Sec. 103. Limitations on matching rates for populations other than low-
              income children or pregnant women covered through a 
              section 1115 waiver.
Sec. 104. Prohibition on new section 1115 waivers for coverage of 
              adults other than pregnant women.
Sec. 105. Standardization of determination of family income.
Sec. 106. Grants for outreach and enrollment.
Sec. 107. Improved State option for offering premium assistance for 
              coverage through private plans.
Sec. 108. Treatment of unborn children.
Sec. 109. 50 percent matching rate for all Medicaid administrative 
              costs.
Sec. 110. Reduction in payments for Medicaid administrative costs to 
              prevent duplication of such costs under TANF.
Sec. 111. Effective date.

 TITLE II--HEALTH INSURANCE MARKETPLACE MODERNIZATION AND AFFORDABILITY

Sec. 200. Short title; purpose.

                Subtitle A--Small Business Health Plans

Sec. 201. Rules governing small business health plans.
Sec. 202. Cooperation between Federal and State authorities.
Sec. 203. Effective date and transitional and other rules.

                       Subtitle B--Market Relief

Sec. 211. Market relief.

        Subtitle C--Harmonization of Health Insurance Standards

Sec. 221. Health Insurance Standards Harmonization.

                   TITLE III--HEALTH SAVINGS ACCOUNTS

Sec. 301. Special rule for certain medical expenses incurred before 
              establishment of health savings account.
Sec. 302. Use of account for individual high deductible health plan 
              premiums.
Sec. 303. Exception to requirement for employers to make comparable 
              health savings account contributions.

[[Page 22097]]

Sec. 304. Certain health reimbursement arrangement coverage disregarded 
              coverage for health savings accounts.

                            TITLE IV--STUDY

Sec. 401. Study on tax treatment of and access to private health 
              insurance.

   TITLE I--STATE CHILDREN'S HEALTH INSURANCE PROGRAM REAUTHORIZATION

     SEC. 101. 5-YEAR REAUTHORIZATION.

       (a) Increase in National Allotment.--Section 2104(a) of the 
     Social Security Act (42 U.S.C. 1397dd(a)) is amended--
       (1) in paragraph (9), by striking ``and'' at the end;
       (2) in paragraph (10), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following:
       ``(11) for fiscal year 2008, $7,000,000,000;
       ``(12) for fiscal year 2009, $7,200,000,000;
       ``(13) for fiscal year 2010, $7,600,000,000;
       ``(14) for fiscal year 2011, $8,300,000,000; and
       ``(15) for fiscal year 2012, $8,800,000,000.''.
       (b) Continuation of Additional Allotments to Territories.--
     Section 2104(c)(4)(B) of the Social Security Act (42 U.S.C. 
     1397dd(c)(4)(B)) is amended--
       (1) by striking ``and'' after ``2006,''; and
       (2) by inserting before the period the following: ``, 
     $56,000,000 for fiscal year 2008, $58,000,000 for fiscal year 
     2009, $61,000,000 for fiscal year 2010, $66,000,000 for 
     fiscal year 2011, and $70,000,000 for fiscal year 2012''.

     SEC. 102. ALLOTMENTS FOR THE 50 STATES AND THE DISTRICT OF 
                   COLUMBIA BASED ON EXPENDITURES AND NUMBERS OF 
                   LOW-INCOME CHILDREN.

       (a) In General.--Section 2104 of the Social Security Act 
     (42 U.S.C. 1397dd) is amended by adding at the end the 
     following new subsection:
       ``(i) Determination of Allotments for the 50 States and the 
     District of Columbia for Fiscal Years 2008 Through 2012.--
       ``(1) In general.--Notwithstanding the preceding provisions 
     of this subsection and subject to paragraph (3), the 
     Secretary shall allot to each subsection (b) State for each 
     of fiscal years 2008 through 2012,, the amount determined for 
     the fiscal year that is equal to the product of--
       ``(A) the amount available for allotment under subsection 
     (a) for the fiscal year, reduced by the amount of allotments 
     made under subsection (c) (determined without regard to 
     paragraph (4) thereof) for the fiscal year; and
       ``(B) the sum of the State allotment factors determined 
     under paragraph (2) with respect to the State and weighted in 
     accordance with subparagraph (B) of that paragraph for the 
     fiscal year.
       ``(2) State allotment factors.--
       ``(A) In general.--For purposes of paragraph (1)(B), the 
     State allotment factors are the following:
       ``(i) The ratio of the projected expenditures for targeted 
     low-income children under the State child health plan and 
     pregnant women under a waiver of such plan for the fiscal 
     year to the sum of such projected expenditures for all States 
     for the fiscal year, multiplied by the applicable percentage 
     weight assigned under subparagraph (B).
       ``(ii) The ratio of the number of low-income children who 
     have not attained age 19 with no health insurance coverage in 
     the State, as determined by the Secretary on the basis of the 
     arithmetic average of the number of such children for the 3 
     most recent Annual Social and Economic Supplements to the 
     Current Population Survey of the Bureau of the Census 
     available before the beginning of the calendar year before 
     such fiscal year begins, to the sum of the number of such 
     children determined for all States for such fiscal year, 
     multiplied by the applicable percentage weight assigned under 
     subparagraph (B).
       ``(iii) The ratio of the projected expenditures for 
     targeted low-income children under the State child health 
     plan and pregnant women under a waiver of such plan for the 
     preceding fiscal year to the sum of such projected 
     expenditures for all States for such preceding fiscal year, 
     multiplied by the applicable percentage weight assigned under 
     subparagraph (B).
       ``(iv) The ratio of the actual expenditures for targeted 
     low-income children under the State child health plan and 
     pregnant women under a waiver of such plan for the second 
     preceding fiscal year to the sum of such actual expenditures 
     for all States for such second preceding fiscal year, 
     multiplied by the applicable percentage weight assigned under 
     subparagraph (B).
       ``(B) Assignment of weights.--For each of fiscal years 2008 
     through 2012, the following percentage weights shall be 
     applied to the ratios determined under subparagraph (A) for 
     each such fiscal year:
       ``(i) 40 percent for the ratio determined under 
     subparagraph (A)(i).
       ``(ii) 5 percent for the ratio determined under 
     subparagraph (A)(ii).
       ``(iii) 50 percent for the ratio determined under 
     subparagraph (A)(iii).
       ``(iv) 5 percent for the ratio determined under 
     subparagraph (A)(iv).
       ``(C) Determination of projected and actual expenditures.--
     For purposes of subparagraph (A):
       ``(i) Projected expenditures.--The projected expenditures 
     described in clauses (i) and (iii) of such subparagraph with 
     respect to a fiscal year shall be determined on the basis of 
     amounts reported by States to the Secretary on the May 15th 
     submission of Form CMS-37 and Form CMS-21B submitted not 
     later than June 30th of the fiscal year preceding such year.
       ``(ii) Actual expenditures.--The actual expenditures 
     described in clause (iv) of such subparagraph with respect to 
     a second preceding fiscal year shall be determined on the 
     basis of amounts reported by States to the Secretary on Form 
     CMS-64 and Form CMS-21 submitted not later than November 30 
     of the preceding fiscal year.''.
       (b) 2-Year Availability of Allotments; Expenditures Counted 
     Against Oldest Allotments.--Section 2104(e) of the Social 
     Security Act (42 U.S.C. 1397dd(e)) is amended to read as 
     follows:
       ``(e) Availability of Amounts Allotted.--
       ``(1) In general.--Except as provided in the succeeding 
     paragraphs of this subsection, amounts allotted to a State 
     pursuant to this section--
       ``(A) for each of fiscal years 1998 through 2007, shall 
     remain available for expenditure by the State through the end 
     of the second succeeding fiscal year; and
       ``(B) for each of fiscal years 2008 through 2012, shall 
     remain available for expenditure by the State only through 
     the end of the succeeding fiscal year for which such amounts 
     are allotted.
       ``(2) Elimination of redistribution of allotments not 
     expended within 3 years.--Notwithstanding subsection (f), 
     amounts allotted to a State under this section for fiscal 
     years beginning with fiscal year 2008 that remain unexpended 
     as of the end of the second succeeding fiscal year shall not 
     be redistributed to other States and shall revert to the 
     Treasury on October 1 of the third succeeding fiscal year.
       ``(3) Rule for counting expenditures against fiscal year 
     allotments.--Expenditures under the State child health plan 
     made on or after October 1, 2007, shall be counted against 
     allotments for the earliest fiscal year for which funds are 
     available for expenditure under this subsection.''.
       (c) Conforming Amendments.--
       (1) Section 2104(b)(1) of the Social Security Act (42 
     U.S.C. 1397dd(b)(1)) is amended by striking ``subsection 
     (d)'' and inserting ``the succeeding subsections of this 
     section''.
       (2) Section 2104(f) of such Act (42 U.S.C. 1397dd(f)) is 
     amended by striking ``The'' and inserting ``Subject to 
     subsection (e)(2), the''.

     SEC. 103. LIMITATIONS ON MATCHING RATES FOR POPULATIONS OTHER 
                   THAN LOW-INCOME CHILDREN OR PREGNANT WOMEN 
                   COVERED THROUGH A SECTION 1115 WAIVER.

       (a) Limitation on Payments.--Section 2105(c) of the Social 
     Security Act (42 U.S.C. 1397ee(c)) is amended by adding at 
     the end the following new paragraph:
       ``(8) Limitations on matching rate for populations other 
     than targeted low-income children or pregnant women covered 
     through a section 1115 waiver.--For child health assistance 
     or health benefits coverage furnished in any fiscal year 
     beginning with fiscal year 2008:
       ``(A) FMAP applied to payments for coverage of children or 
     pregnant women covered through a section 1115 waiver enrolled 
     in the state child health plan on the date of enactment of 
     the kids first act and whose gross family income is 
     determined to exceed the income eligibility level specified 
     for a targeted low-income child.--Notwithstanding subsections 
     (b)(1)(B) and (d) of section 2110, in the case of any 
     individual described in subsection (c) of section 105 of the 
     Kids First Act who the State elects to continue to provide 
     child health assistance for under the State child health plan 
     in accordance with the requirements of such subsection, the 
     Federal medical assistance percentage (as determined under 
     section 1905(b) without regard to clause (4) of such section) 
     shall be substituted for the enhanced FMAP under subsection 
     (a)(1) with respect to such assistance.
       ``(B) FMAP applied to payments only for nonpregnant 
     childless adults and parents and caretaker relatives enrolled 
     under a section 1115 waiver on the date of enactment of the 
     state children's health insurance program reauthorization of 
     2007.--The Federal medical assistance percentage (as 
     determined under section 1905(b) without regard to clause (4) 
     of such section) shall be substituted for the enhanced FMAP 
     under subsection (a)(1) with respect to payments for child 
     health assistance or health benefits coverage provided under 
     the State child health plan for any of the following:
       ``(i) Parents or caretaker relatives enrolled under a 
     waiver on the date of enactment of the state children's 
     health insurance program reauthorization of 2007.--A 
     nonpregnant parent or a nonpregnant caretaker relative of a 
     targeted low-income child who is enrolled in the State child 
     health plan under a waiver, experimental, pilot, or 
     demonstration project on the date of enactment of the Kids 
     First Act and whose family income does not exceed the income 
     eligibility applied under such waiver with respect to that 
     population on such date.
       ``(ii) Nonpregnant childless adults enrolled under a waiver 
     on such date.--A nonpregnant childless adult enrolled in the

[[Page 22098]]

     State child health plan under a waiver, experimental, pilot, 
     or demonstration project described in section 6102(c)(3) of 
     the Deficit Reduction Act of 2005 (42 U.S.C. 1397gg note) on 
     the date of enactment of the Kids First Act and whose family 
     income does not exceed the income eligibility applied under 
     such waiver with respect to that population on such date.
       ``(iii) No replacement enrollees.--Nothing in clauses (i) 
     or (ii) shall be construed as authorizing a State to provide 
     child health assistance or health benefits coverage under a 
     waiver described in either such clause to a nonpregnant 
     parent or a nonpregnant caretaker relative of a targeted low-
     income child, or a nonpregnant childless adult, who is not 
     enrolled under the waiver on the date of enactment of the 
     Kids First Act.
       ``(C) No federal payment for any new nonpregnant adult 
     enrollees or for such enrollees who no longer satisfy income 
     eligibility requirements.--Payment shall not be made under 
     this section for child health assistance or other health 
     benefits coverage provided under the State child health plan 
     or under a waiver under section 1115 for any of the 
     following:
       ``(i) Parents or caretaker relatives under a section 1115 
     waiver approved after the date of enactment of the state 
     children's health insurance program reauthorization of 
     2007.--A nonpregnant parent or a nonpregnant caretaker 
     relative of a targeted low-income child under a waiver, 
     experimental, pilot, or demonstration project that is 
     approved on or after the date of enactment of the Kids First 
     Act.
       ``(ii) Parents, caretaker relatives, and nonpregnant 
     childless adults whose family income exceeds the income 
     eligibility level specified under a section 1115 waiver 
     approved prior to the state children's health insurance 
     program reauthorization of 2007.--Any nonpregnant parent or a 
     nonpregnant caretaker relative of a targeted low-income child 
     whose family income exceeds the income eligibility level 
     referred to in subparagraph (B)(i), and any nonpregnant 
     childless adult whose family income exceeds the income 
     eligibility level referred to in subparagraph (B)(ii).
       ``(iii) Nonpregnant childless adults, parents, or caretaker 
     relatives not enrolled under a section 1115 waiver on the 
     date of enactment of the state children's health insurance 
     program reauthorization of 2007.--Any nonpregnant parent or a 
     nonpregnant caretaker relative of a targeted low-income child 
     who is not enrolled in the State child health plan under a 
     section 1115 waiver, experimental, pilot, or demonstration 
     project referred to in subparagraph (B)(i) on the date of 
     enactment of the Kids First Act, and any nonpregnant 
     childless adult who is not enrolled in the State child health 
     plan under a section 1115 waiver, experimental, pilot, or 
     demonstration project referred to in subparagraph (B)(ii)(I) 
     on such date.
       ``(D) Definition of caretaker relative.--In this 
     subparagraph, the term `caretaker relative' has the meaning 
     given that term for purposes of carrying out section 1931.
       ``(E) Rule of construction.--Nothing in this paragraph 
     shall be construed as implying that payments for coverage of 
     populations for which the Federal medical assistance 
     percentage (as so determined) is to be substituted for the 
     enhanced FMAP under subsection (a)(1) in accordance with this 
     paragraph are to be made from funds other than the allotments 
     determined for a State under section 2104.''.
       (b) Conforming Amendment.--Section 2105(a)(1) of the Social 
     Security Act ( 42 U.S.C. 1397dd(a)(1)) is amended, in the 
     matter preceding subparagraph (A), by inserting ``or 
     subsection (c)(8)'' after ``subparagraph (B)''.

     SEC. 104. PROHIBITION ON NEW SECTION 1115 WAIVERS FOR 
                   COVERAGE OF ADULTS OTHER THAN PREGNANT WOMEN.

       (a) In General.--Section 2107(f) of the Social Security Act 
     (42 U.S.C. 1397gg(f)) is amended--
       (1) by striking ``, the Secretary'' and inserting ``:
       ``(1) The Secretary''; and
       (2) by adding at the end the following new paragraphs:
       ``(2) The Secretary may not approve, extend, renew, or 
     amend a waiver, experimental, pilot, or demonstration project 
     with respect to a State after the date of enactment of the 
     Kids First Act that would allow funds made available under 
     this title to be used to provide child health assistance or 
     other health benefits coverage for any other adult other than 
     a pregnant woman whose family income does not exceed the 
     income eligibility level specified for a targeted low-income 
     child in that State under a waiver or project approved as of 
     such date.
       ``(3) The Secretary may not approve, extend, renew, or 
     amend a waiver, experimental, pilot, or demonstration project 
     with respect to a State after the date of enactment of the 
     Kids First Act that would waive or modify the requirements of 
     section 2105(c)(8).''.
       (b) Clarification of Authority for Coverage of Pregnant 
     Women.--Section 2106 of the Social Security Act (42 U.S.C. 
     1397ff) is amended by adding at the end the following new 
     subsection:
       ``(f) No Authority to Cover Pregnant Women Through State 
     Plan.--For purposes of this title, a State may provide 
     assistance to a pregnant woman under the State child health 
     plan only--
       ``(1) by virtue of a waiver under section 1115; or
       ``(2) 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 (as in effect on the date of 
     enactment of the Kids First Act).''.
       (c) Assurance of Notice to Affected Enrollees.--The 
     Secretary of Health and Human Services shall establish 
     procedures to ensure that States provide adequate public 
     notice for parents, caretaker relatives, and nonpregnant 
     childless adults whose eligibility for child health 
     assistance or health benefits coverage under a waiver under 
     section 1115 of the Social Security Act will be terminated as 
     a result of the amendments made by subsection (a), and that 
     States otherwise adhere to regulations of the Secretary 
     relating to procedures for terminating waivers under section 
     1115 of the Social Security Act.

     SEC. 105. STANDARDIZATION OF DETERMINATION OF FAMILY INCOME.

       (a) Eligibility Based on Gross Income.--
       (1) In general.--Section 2110 of the Social Security Act 
     (42 U.S.C. 1397jj) is amended by adding at the end the 
     following new subsection:
       ``(d) Standardization of Determination of Family Income.--A 
     State shall determine family income for purposes of 
     determining income eligibility for child health assistance or 
     other health benefits coverage under the State child health 
     plan (or under a waiver of such plan under section 1115) 
     solely on the basis of the gross income (as defined by the 
     Secretary) of the family.''.
       (2) Prohibition on waiver of requirements.--Section 2107(f) 
     (42 U.S.C. 1397gg(f)), as amended by section 104(a), is 
     amended by adding at the end the following new paragraph:
       ``(4) The Secretary may not approve a waiver, experimental, 
     pilot, or demonstration project with respect to a State after 
     the date of enactment of the Kids First Act that would waive 
     or modify the requirements of section 2110(d) (relating to 
     determining income eligibility on the basis of gross income) 
     and regulations promulgated to carry out such 
     requirements.''.
       (b) Regulations.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services shall promulgate interim final regulations defining 
     gross income for purposes of section 2110(d) of the Social 
     Security Act, as added by subsection (a).
       (c) Application to Current Enrollees.--The interim final 
     regulations promulgated under subsection (b) shall not be 
     used to determine the income eligibility of any individual 
     enrolled in a State child health plan under title XXI of the 
     Social Security Act on the date of enactment of this Act 
     before the date on which such eligibility of the individual 
     is required to be redetermined under the plan as in effect on 
     such date. In the case of any individual enrolled in such 
     plan on such date who, solely as a result of the application 
     of subsection (d) of section 2110 of the Social Security Act 
     (as added by subsection (a)) and the regulations promulgated 
     under subsection (b), is determined to be ineligible for 
     child health assistance under the State child health plan, a 
     State may elect, subject to substitution of the Federal 
     medical assistance percentage for the enhanced FMAP under 
     section 2105(c)(8)(A) of the Social Security Act (as added by 
     section 103(a)), to continue to provide the individual with 
     such assistance for so long as the individual otherwise would 
     be eligible for such assistance and the individual's family 
     income, if determined under the income and resource standards 
     and methodologies applicable under the State child health 
     plan on September 30, 2007, would not exceed the income 
     eligibility level applicable to the individual under the 
     State child health plan.

     SEC. 106. GRANTS FOR OUTREACH AND ENROLLMENT.

       (a) Grants.--Title XXI of the Social Security Act (42 
     U.S.C. 1397aa et seq.) is amended by adding at the end the 
     following:

     ``SEC. 2111. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT.

       ``(a) Outreach and Enrollment Grants; National Campaign.--
       ``(1) In general.--From the amounts appropriated for a 
     fiscal year under subsection (f), subject to paragraph (2), 
     the Secretary shall award grants to eligible entities to 
     conduct outreach and enrollment efforts that are designed to 
     increase the enrollment and participation of eligible 
     children under this title and title XIX.
       ``(2) 10 percent set aside for national enrollment 
     campaign.--An amount equal to 10 percent of such amounts for 
     the fiscal year shall be used by the Secretary for 
     expenditures during the fiscal year to carry out a national 
     enrollment campaign in accordance with subsection (g).
       ``(b) Award of Grants.--
       ``(1) Priority for awarding.--
       ``(A) In general.--In awarding grants under subsection (a), 
     the Secretary shall give priority to eligible entities that--
       ``(i) propose to target geographic areas with high rates 
     of--

[[Page 22099]]

       ``(I) eligible but unenrolled children, including such 
     children who reside in rural areas; or
       ``(II) racial and ethnic minorities and health disparity 
     populations, including those proposals that address cultural 
     and linguistic barriers to enrollment; and

       ``(ii) submit the most demonstrable evidence required under 
     paragraphs (1) and (2) of subsection (c).
       ``(B) 10 percent set aside for outreach to indian 
     children.--An amount equal to 10 percent of the funds 
     appropriated under subsection (f) for a fiscal year shall be 
     used by the Secretary to award grants to Indian Health 
     Service providers and urban Indian organizations receiving 
     funds under title V of the Indian Health Care Improvement Act 
     (25 U.S.C. 1651 et seq.) for outreach to, and enrollment of, 
     children who are Indians.
       ``(2) 2-year availability.--A grant awarded under this 
     section for a fiscal year shall remain available for 
     expenditure through the end of the succeeding fiscal year.
       ``(c) Application.--An eligible entity that desires to 
     receive a grant under subsection (a) shall submit an 
     application to the Secretary in such form and manner, and 
     containing such information, as the Secretary may decide. 
     Such application shall include--
       ``(1) evidence demonstrating that the entity includes 
     members who have access to, and credibility with, ethnic or 
     low-income populations in the communities in which activities 
     funded under the grant are to be conducted;
       ``(2) evidence demonstrating that the entity has the 
     ability to address barriers to enrollment, such as lack of 
     awareness of eligibility, stigma concerns and punitive fears 
     associated with receipt of benefits, and other cultural 
     barriers to applying for and receiving child health 
     assistance or medical assistance;
       ``(3) specific quality or outcomes performance measures to 
     evaluate the effectiveness of activities funded by a grant 
     awarded under this section; and
       ``(4) an assurance that the eligible entity shall--
       ``(A) conduct an assessment of the effectiveness of such 
     activities against the performance measures;
       ``(B) cooperate with the collection and reporting of 
     enrollment data and other information in order for the 
     Secretary to conduct such assessments.
       ``(C) in the case of an eligible entity that is not the 
     State, provide the State with enrollment data and other 
     information as necessary for the State to make necessary 
     projections of eligible children and pregnant women.
       ``(d) Supplement, Not Supplant.--Federal funds awarded 
     under this section shall be used to supplement, not supplant, 
     non-Federal funds that are otherwise available for activities 
     funded under this section.
       ``(e) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means 
     any of the following:
       ``(A) A State with an approved child health plan under this 
     title.
       ``(B) A local government.
       ``(C) 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 (25 
     U.S.C. 1651 et seq.), or an Indian Health Service provider.
       ``(D) A Federal health safety net organization.
       ``(E) A State, national, local, or community-based public 
     or nonprofit private organization.
       ``(F) A faith-based organization or consortia, to the 
     extent that a grant awarded to such an entity is consistent 
     with the requirements of section 1955 of the Public Health 
     Service Act (42 U.S.C. 300x-65) relating to a grant award to 
     non-governmental entities.
       ``(G) An elementary or secondary school.
       ``(H) A national, local, or community-based public or 
     nonprofit private organization, including organizations that 
     use community health workers or community-based doula 
     programs.
       ``(2) Federal health safety net organization.--The term 
     `Federal health safety net organization' means--
       ``(A) a Federally-qualified health center (as defined in 
     section 1905(l)(2)(B));
       ``(B) a hospital defined as a disproportionate share 
     hospital for purposes of section 1923;
       ``(C) a covered entity described in section 340B(a)(4) of 
     the Public Health Service Act (42 U.S.C. 256b(a)(4)); and
       ``(D) 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) established under section 17 of the Child 
     Nutrition Act of 1966 (42 U.S.C. 1786), the head start and 
     early head start programs under the Head Start Act (42 U.S.C. 
     9801 et seq.), the school lunch program established under the 
     Richard B. Russell National School Lunch Act, and an 
     elementary or secondary school.
       ``(3) Indians; indian tribe; tribal organization; urban 
     indian organization.--The terms `Indian', `Indian tribe', 
     `tribal organization', and `urban Indian organization' have 
     the meanings given such terms in section 4 of the Indian 
     Health Care Improvement Act (25 U.S.C. 1603).
       ``(4) Community health worker.--The term `community health 
     worker' means an individual who promotes health or nutrition 
     within the community in which the individual resides--
       ``(A) by serving as a liaison between communities and 
     health care agencies;
       ``(B) by providing guidance and social assistance to 
     community residents;
       ``(C) by enhancing community residents' ability to 
     effectively communicate with health care providers;
       ``(D) by providing culturally and linguistically 
     appropriate health or nutrition education;
       ``(E) by advocating for individual and community health or 
     nutrition needs; and
       ``(F) by providing referral and followup services.
       ``(f) Appropriation.--
       ``(1) In general.--There is appropriated, out of any money 
     in the Treasury not otherwise appropriated, for the purpose 
     of awarding grants under this section--
       ``(A) $100,000,000 for each of fiscal years 2008 and 2009;
       ``(B) $75,000,000 for each of fiscal years 2010 and 2011; 
     and
       ``(C) $50,000,000 for fiscal year 2012.
       ``(2) Grants in addition to other amounts paid.--Amounts 
     appropriated and paid under the authority of this section 
     shall be in addition to amounts appropriated under section 
     2104 and paid to States in accordance with section 2105, 
     including with respect to expenditures for outreach 
     activities in accordance with subsections (a)(1)(D)(iii) and 
     (c)(2)(C) of that section.
       ``(g) National Enrollment Campaign.--From the amounts made 
     available under subsection (a)(2) for a fiscal year, the 
     Secretary shall develop and implement a national enrollment 
     campaign to improve the enrollment of underserved child 
     populations in the programs established under this title and 
     title XIX. Such 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 assistance programs each Secretary 
     administers that often serve the same children;
       ``(2) the integration of information about the programs 
     established under this title and title XIX 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 the programs 
     under this title and title XIX.''.
       (b) Nonapplication of Administrative Expenditures Cap.--
     Section 2105(c)(2) of the Social Security Act (42 U.S.C. 
     1397ee(c)(2)) is amended by adding at the end the following:
       ``(C) Nonapplication to expenditures for outreach and 
     enrollment.--The limitation under subparagraph (A) shall not 
     apply with respect to expenditures for outreach activities 
     under section 2102(c)(1), or for enrollment activities, for 
     children eligible for child health assistance under the State 
     child health plan or medical assistance under the State plan 
     under title XIX.''.

     SEC. 107. IMPROVED STATE OPTION FOR OFFERING PREMIUM 
                   ASSISTANCE FOR COVERAGE THROUGH PRIVATE PLANS.

       (a) In General.--Section 2105(c) of the Social Security Act 
     (42 U.S.C. 1397ee(c)), as amended by section 103(a) is 
     amended by adding at the end the following:
       ``(9) Additional state option for offering premium 
     assistance.--
       ``(A) In general.--Subject to the succeeding provisions of 
     this paragraph, a State may elect to offer a premium 
     assistance subsidy (as defined in subparagraph (C)) for 
     qualified employer sponsored coverage (as defined in 
     subparagraph (B)) to all targeted low-income children who are 
     eligible for child health assistance under the plan and have 
     access to such coverage in accordance with the requirements 
     of this paragraph.
       ``(B) Qualified employer sponsored coverage.--
       ``(i) In general.--In this paragraph, the term `qualified 
     employer sponsored coverage' means a group health plan or 
     health insurance coverage offered through an employer that 
     is--

       ``(I) substantially equivalent to the benefits coverage in 
     a benchmark benefit package described in section 2103(b) or 
     benchmark-equivalent coverage that meets the requirements of 
     section 2103(a)(2);
       ``(II) made similarly available to all of the employer's 
     employees and for which the employer makes a contribution to 
     the premium that is not less for employees receiving a 
     premium assistance subsidy under any option available under 
     the State child health plan under this title or the State 
     plan under title XIX to provide such assistance than the

[[Page 22100]]

     employer contribution provided for all other employees; and
       ``(III) cost-effective, as determined under clause (ii).

       ``(ii) Cost-effectiveness.--A group health plan or health 
     insurance coverage offered through an employer shall be 
     considered to be cost-effective if--

       ``(I) the marginal premium cost to purchase family coverage 
     through the employer is less than the State cost of providing 
     child health assistance through the State child health plan 
     for all the children in the family who are targeted low-
     income children; or
       ``(II) the marginal premium cost between individual 
     coverage and purchasing family coverage through the employer 
     is not greater than 175 percent of the cost to the State to 
     provide child health assistance through the State child 
     health plan for a targeted low-income child.

       ``(iii) High deductible health plans included.--The term 
     `qualified employer sponsored coverage' includes a high 
     deductible health plan (as defined in section 223(c)(2) of 
     the Internal Revenue Code of 1986) purchased through a health 
     savings account (as defined under section 223(d) of such 
     Code).
       ``(C) Premium assistance subsidy.--
       ``(i) In general.--In this paragraph, the term `premium 
     assistance subsidy' means, with respect to a targeted low-
     income child, the amount equal to the difference between the 
     employee contribution required for enrollment only of the 
     employee under qualified employer sponsored coverage and the 
     employee contribution required for enrollment of the employee 
     and the child in such coverage, less any applicable premium 
     cost-sharing applied under the State child health plan, 
     subject to the annual aggregate cost-sharing limit applied 
     under section 2103(e)(3)(B).
       ``(ii) State payment option.--Subject to clause (iii), a 
     State may provide a premium assistance subsidy directly to an 
     employer or as reimbursement to an employee for out-of-pocket 
     expenditures.
       ``(iii) Requirement for direct payment to employee.--A 
     State shall not pay a premium assistance subsidy directly to 
     the employee, unless the State has established procedures to 
     ensure that the targeted low-income child on whose behalf 
     such payments are made are actually enrolled in the qualified 
     employer sponsored coverage.
       ``(iv) Treatment as child health assistance.--Expenditures 
     for the provision of premium assistance subsidies shall be 
     considered child health assistance described in paragraph 
     (1)(C) of subsection (a) for purposes of making payments 
     under that subsection.
       ``(v) State option to require acceptance of subsidy.--A 
     State may condition the provision of child health assistance 
     under the State child health plan for a targeted low-income 
     child on the receipt of a premium assistance subsidy for 
     enrollment in qualified employer sponsored coverage if the 
     State determines the provision of such a subsidy to be more 
     cost-effective in accordance with subparagraph (B)(ii).
       ``(vi) Not treated as income.--Notwithstanding any other 
     provision of law, a premium assistance subsidy provided in 
     accordance with this paragraph shall not be treated as income 
     to the child or the parent of the child for whom such subsidy 
     is provided.
       ``(D) No requirement to provide supplemental coverage for 
     benefits and additional cost-sharing protection provided 
     under the state child health plan.--
       ``(i) In general.--A State that elects the option to 
     provide a premium assistance subsidy under this paragraph 
     shall not be required to provide a targeted low-income child 
     enrolled in qualified employer sponsored coverage with 
     supplemental coverage for items or services that are not 
     covered, or are only partially covered, under the qualified 
     employer sponsored coverage or cost-sharing protection other 
     than the protection required under section 2103(e)(3)(B).
       ``(ii) Notice of cost-sharing requirements.--A State shall 
     provide a targeted low-income child or the parent of such a 
     child (as appropriate) who is provided with a premium 
     assistance subsidy in accordance with this paragraph with 
     notice of the cost-sharing requirements and limitations 
     imposed under the qualified employer sponsored coverage in 
     which the child is enrolled upon the enrollment of the child 
     in such coverage and annually thereafter.
       ``(iii) Record keeping requirements.--A State may require a 
     parent of a targeted low-income child that is enrolled in 
     qualified employer-sponsored coverage to bear the 
     responsibility for keeping track of out-of-pocket 
     expenditures incurred for cost-sharing imposed under such 
     coverage and to notify the State when the limit on such 
     expenditures imposed under section 2103(e)(3)(B) has been 
     reached for a year from the effective date of enrollment for 
     such year.
       ``(iv) State option for reimbursement.--A State may 
     retroactively reimburse a parent of a targeted low-income 
     child for out-of-pocket expenditures incurred after reaching 
     the 5 percent cost-sharing limitation imposed under section 
     2103(e)(3)(B) for a year.
       ``(E) 6-month waiting period required.--A State shall 
     impose at least a 6-month waiting period from the time an 
     individual is enrolled in private health insurance prior to 
     the provision of a premium assistance subsidy for a targeted 
     low-income child in accordance with this paragraph.
       ``(F) Non application of waiting period for enrollment in 
     the state medicaid plan or the state child health plan.--A 
     targeted low-income child provided a premium assistance 
     subsidy in accordance with this paragraph who loses 
     eligibility for such subsidy shall not be treated as having 
     been enrolled in private health insurance coverage for 
     purposes of applying any waiting period imposed under the 
     State child health plan or the State plan under title XIX for 
     the enrollment of the child under such plan.
       ``(G) Assurance of special enrollment period under group 
     health plans in case of eligibility for premium subsidy 
     assistance.--No payment shall be made under subsection (a) 
     for amounts expended for the provision of premium assistance 
     subsidies under this paragraph unless a State provides 
     assurances to the Secretary that the State has in effect laws 
     requiring a group health plan, a health insurance issuer 
     offering group health insurance coverage in connection with a 
     group health plan, and a self-funded health plan, to permit 
     an employee who is eligible, but not enrolled, for coverage 
     under the terms of the plan (or a child of such an employee 
     if the child is eligible, but not enrolled, for coverage 
     under such terms) to enroll for coverage under the terms of 
     the plan if the employee's child becomes eligible for a 
     premium assistance subsidy under this paragraph.
       ``(H) No effect on previously approved premium assistance 
     programs.--Nothing in this paragraph shall be construed as 
     limiting the authority of a State to offer premium assistance 
     under section 1906, a waiver described in paragraph (2)(B) or 
     (3), a waiver approved under section 1115, or other authority 
     in effect on June 28, 2007.
       ``(I) Notice of availability.--A State shall--
       ``(i) include on any application or enrollment form for 
     child health assistance a notice of the availability of 
     premium assistance subsidies for the enrollment of targeted 
     low-income children in qualified employer sponsored coverage;
       ``(ii) provide, as part of the application and enrollment 
     process under the State child health plan, information 
     describing the availability of such subsidies and how to 
     elect to obtain such a subsidy; and
       ``(iii) establish such other procedures as the State 
     determines necessary to ensure that parents are informed of 
     the availability of such subsidies under the State child 
     health plan.''.
       (b) Application to Medicaid.--Section 1906 of the Social 
     Security Act (42 U.S.C. 1396e) is amended by inserting after 
     subsection (c) the following:
       ``(d) The provisions of section 2105(c)(9) shall apply to a 
     child who is eligible for medical assistance under the State 
     plan in the same manner as such provisions apply to a 
     targeted low-income child under a State child health plan 
     under title XXI. Section 1902(a)(34) shall not apply to a 
     child who is provided a premium assistance subsidy under the 
     State plan in accordance with the preceding sentence.''.

     SEC. 108. TREATMENT OF UNBORN CHILDREN.

       (a) Codification of Current Regulations.--Section 
     2110(c)(1) of the Social Security Act (42 U.S.C. 
     1397jj(c)(1)) is amended by striking the period at the end 
     and inserting the following: ``, and includes, at the option 
     of a State, an unborn child. For purposes of the previous 
     sentence, the term `unborn child' means a member of the 
     species Homo sapiens, at any stage of development, who is 
     carried in the womb.''.
       (b) Clarifications Regarding Coverage of Mothers.--Section 
     2103 of such Act (42 U.S.C. 1397cc) is amended by adding at 
     the end the following new subsection:
       ``(g) Clarifications Regarding Authority to Provide 
     Postpartum Services and Maternal Health Care.--Any State that 
     provides child health assistance to an unborn child under the 
     option described in section 2110(c)(1) may--
       ``(1) continue to provide such assistance to the mother, as 
     well as postpartum services, through the end of the month in 
     which the 60-day period (beginning on the last day of 
     pregnancy) ends; and
       ``(2) in the interest of the child to be born, have 
     flexibility in defining and providing services to benefit 
     either the mother or unborn child consistent with the health 
     of both.''.

     SEC. 109. 50 PERCENT MATCHING RATE FOR ALL MEDICAID 
                   ADMINISTRATIVE COSTS.

       Section 1903(a) of the Social Security Act (42 U.S.C. 
     1396b(a)) is amended--
       (1) by striking paragraph (2);
       (2) by redesignating paragraph (3)(E) as paragraph (2) and 
     re-locating and indenting it appropriately;
       (3) in paragraph (2), as so redesignated, by redesignating 
     clauses (i) and (ii) as subparagraphs (A) and (B), and 
     indenting them appropriately;
       (4) by striking paragraphs (3) and (4);
       (5) in paragraph (5), by striking ``which are attributable 
     to the offering, arranging, and furnishing'' and inserting 
     ``which are for the medical assistance costs of furnishing'';
       (6) by striking paragraph (6);
       (7) in paragraph (7), by striking ``subject to section 
     1919(g)(3)(B),''; and
       (8) by redesignating paragraphs (5) and (7) as paragraphs 
     (3) and (4), respectively.

[[Page 22101]]



     SEC. 110. REDUCTION IN PAYMENTS FOR MEDICAID ADMINISTRATIVE 
                   COSTS TO PREVENT DUPLICATION OF SUCH PAYMENTS 
                   UNDER TANF.

       Section 1903 of such Act (42 U.S.C. 1396b) is amended--
       (1) in subsection (a)(7), by striking ``section 
     1919(g)(3)(B)'' and inserting ``subsection (h)'';
       (2) in subsection (a)(2)(D) by inserting ``, subject to 
     subsection (g)(3)(C) of such section'' after ``as are 
     attributable to State activities under section 1919(g)''; and
       (3) by adding after subsection (g) the following new 
     subsection:
       ``(h) Reduction in Payments for Administrative Costs to 
     Prevent Duplication of Payments Under Title IV.--Beginning 
     with the calendar quarter commencing October 1, 2007, the 
     Secretary shall reduce the amount paid to each State under 
     subsection (a)(7) for each quarter by an amount equal to \1/
     4\ of the annualized amount determined for the Medicaid 
     program under section 16(k)(2)(B) of the Food Stamp Act of 
     1977 (7 U.S.C. 2025(k)(2)(B)).''.

     SEC. 111. EFFECTIVE DATE.

       (a) In General.--Subject to subsection (b), the amendments 
     made by this title take effect on October 1, 2007.
       (b) Delay if State Legislation Required.--In the case of a 
     State child health plan under title XXI of the Social 
     Security Act or a waiver of such plan under section 1115 of 
     such Act which the Secretary of Health and Human Services 
     determines requires State legislation (other than legislation 
     appropriating funds) in order for the plan or waiver to meet 
     the additional requirements imposed by the amendments made by 
     this title, the State child health plan or waiver shall not 
     be regarded as failing to comply with the requirements of 
     such title XXI solely on the basis of its failure to meet 
     such additional 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 the enactment of this title. For purposes of the 
     previous sentence, in the case of a State that has a 2-year 
     legislative session, each year of such session shall be 
     deemed to be a separate regular session of the State 
     legislature.

 TITLE II--HEALTH INSURANCE MARKETPLACE MODERNIZATION AND AFFORDABILITY

     SEC. 200. SHORT TITLE; PURPOSE.

       (a) Short Title.--This title may be cited as the ``Health 
     Insurance Marketplace Modernization and Affordability Act of 
     2007''.
       (b) Purposes.--It is the purpose of this title to--
       (1) make more affordable health insurance options available 
     to small businesses, working families, and all Americans;
       (2) assure effective State regulatory protection of the 
     interests of health insurance consumers; and
       (3) create a more efficient and affordable health insurance 
     marketplace through collaborative development of uniform 
     regulatory standards.

                Subtitle A--Small Business Health Plans

     SEC. 201. RULES GOVERNING SMALL BUSINESS HEALTH PLANS.

       (a) In General.--Subtitle B of title I of the Employee 
     Retirement Income Security Act of 1974 is amended by adding 
     after part 7 the following new part:

         ``PART 8--RULES GOVERNING SMALL BUSINESS HEALTH PLANS

     ``SEC. 801. SMALL BUSINESS HEALTH PLANS.

       ``(a) In General.--For purposes of this part, the term 
     `small business health plan' means a fully insured group 
     health plan whose sponsor is (or is deemed under this part to 
     be) described in subsection (b).
       ``(b) Sponsorship.--The sponsor of a group health plan is 
     described in this subsection if such sponsor--
       ``(1) is organized and maintained in good faith, with a 
     constitution and bylaws specifically stating its purpose and 
     providing for periodic meetings on at least an annual basis, 
     as a bona fide trade association, a bona fide industry 
     association (including a rural electric cooperative 
     association or a rural telephone cooperative association), a 
     bona fide professional association, or a bona fide chamber of 
     commerce (or similar bona fide business association, 
     including a corporation or similar organization that operates 
     on a cooperative basis (within the meaning of section 1381 of 
     the Internal Revenue Code of 1986)), for substantial purposes 
     other than that of obtaining medical care;
       ``(2) is established as a permanent entity which receives 
     the active support of its members and requires for membership 
     payment on a periodic basis of dues or payments necessary to 
     maintain eligibility for membership;
       ``(3) does not condition membership, such dues or payments, 
     or coverage under the plan on the basis of health status-
     related factors with respect to the employees of its members 
     (or affiliated members), or the dependents of such employees, 
     and does not condition such dues or payments on the basis of 
     group health plan participation; and
       ``(4) does not condition membership on the basis of a 
     minimum group size.

     Any sponsor consisting of an association of entities which 
     meet the requirements of paragraphs (1), (2), (3), and (4) 
     shall be deemed to be a sponsor described in this subsection.

     ``SEC. 802. CERTIFICATION OF SMALL BUSINESS HEALTH PLANS.

       ``(a) In General.--Not later than 6 months after the date 
     of enactment of this part, the applicable authority shall 
     prescribe by interim final rule a procedure under which the 
     applicable authority shall certify small business health 
     plans which apply for certification as meeting the 
     requirements of this part.
       ``(b) Requirements Applicable to Certified Plans.--A small 
     business health plan with respect to which certification 
     under this part is in effect shall meet the applicable 
     requirements of this part, effective on the date of 
     certification (or, if later, on the date on which the plan is 
     to commence operations).
       ``(c) Requirements for Continued Certification.--The 
     applicable authority may provide by regulation for continued 
     certification of small business health plans under this part. 
     Such regulation shall provide for the revocation of a 
     certification if the applicable authority finds that the 
     small business health plan involved is failing to comply with 
     the requirements of this part.
       ``(d) Expedited and Deemed Certification.--
       ``(1) In general.--If the Secretary fails to act on an 
     application for certification under this section within 90 
     days of receipt of such application, the applying small 
     business health plan shall be deemed certified until such 
     time as the Secretary may deny for cause the application for 
     certification.
       ``(2) Civil penalty.--The Secretary may assess a civil 
     penalty against the board of trustees and plan sponsor 
     (jointly and severally) of a small business health plan that 
     is deemed certified under paragraph (1) of up to $500,000 in 
     the event the Secretary determines that the application for 
     certification of such small business health plan was 
     willfully or with gross negligence incomplete or inaccurate.

     ``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF 
                   TRUSTEES.

       ``(a) Sponsor.--The requirements of this subsection are met 
     with respect to a small business health plan if the sponsor 
     has met (or is deemed under this part to have met) the 
     requirements of section 801(b) for a continuous period of not 
     less than 3 years ending with the date of the application for 
     certification under this part.
       ``(b) Board of Trustees.--The requirements of this 
     subsection are met with respect to a small business health 
     plan if the following requirements are met:
       ``(1) Fiscal control.--The plan is operated, pursuant to a 
     plan document, by a board of trustees which pursuant to a 
     trust agreement has complete fiscal control over the plan and 
     which is responsible for all operations of the plan.
       ``(2) Rules of operation and financial controls.--The board 
     of trustees has in effect rules of operation and financial 
     controls, based on a 3-year plan of operation, adequate to 
     carry out the terms of the plan and to meet all requirements 
     of this title applicable to the plan.
       ``(3) Rules governing relationship to participating 
     employers and to contractors.--
       ``(A) Board membership.--
       ``(i) In general.--Except as provided in clauses (ii) and 
     (iii), the members of the board of trustees are individuals 
     selected from individuals who are the owners, officers, 
     directors, or employees of the participating employers or who 
     are partners in the participating employers and actively 
     participate in the business.
       ``(ii) Limitation.--

       ``(I) General rule.--Except as provided in subclauses (II) 
     and (III), no such member is an owner, officer, director, or 
     employee of, or partner in, a contract administrator or other 
     service provider to the plan.
       ``(II) Limited exception for providers of services solely 
     on behalf of the sponsor.--Officers or employees of a sponsor 
     which is a service provider (other than a contract 
     administrator) to the plan may be members of the board if 
     they constitute not more than 25 percent of the membership of 
     the board and they do not provide services to the plan other 
     than on behalf of the sponsor.
       ``(III) Treatment of providers of medical care.--In the 
     case of a sponsor which is an association whose membership 
     consists primarily of providers of medical care, subclause 
     (I) shall not apply in the case of any service provider 
     described in subclause (I) who is a provider of medical care 
     under the plan.

       ``(iii) Certain plans excluded.--Clause (i) shall not apply 
     to a small business health plan which is in existence on the 
     date of the enactment of the Health Insurance Marketplace 
     Modernization and Affordability Act of 2007.
       ``(B) Sole authority.--The board has sole authority under 
     the plan to approve applications for participation in the 
     plan and to contract with insurers.
       ``(c) Treatment of Franchise Networks.--In the case of a 
     group health plan which is established and maintained by a 
     franchiser for a franchise network consisting of its 
     franchisees--
       ``(1) the requirements of subsection (a) and section 801(a) 
     shall be deemed met if such requirements would otherwise be 
     met if the

[[Page 22102]]

     franchiser were deemed to be the sponsor referred to in 
     section 801(b), such network were deemed to be an association 
     described in section 801(b), and each franchisee were deemed 
     to be a member (of the association and the sponsor) referred 
     to in section 801(b); and
       ``(2) the requirements of section 804(a)(1) shall be deemed 
     met.

     The Secretary may by regulation define for purposes of this 
     subsection the terms `franchiser', `franchise network', and 
     `franchisee'.

     ``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

       ``(a) Covered Employers and Individuals.--The requirements 
     of this subsection are met with respect to a small business 
     health plan if, under the terms of the plan--
       ``(1) each participating employer must be--
       ``(A) a member of the sponsor;
       ``(B) the sponsor; or
       ``(C) an affiliated member of the sponsor, except that, in 
     the case of a sponsor which is a professional association or 
     other individual-based association, if at least one of the 
     officers, directors, or employees of an employer, or at least 
     one of the individuals who are partners in an employer and 
     who actively participates in the business, is a member or 
     such an affiliated member of the sponsor, participating 
     employers may also include such employer; and
       ``(2) all individuals commencing coverage under the plan 
     after certification under this part must be--
       ``(A) active or retired owners (including self-employed 
     individuals), officers, directors, or employees of, or 
     partners in, participating employers; or
       ``(B) the dependents of individuals described in 
     subparagraph (A).
       ``(b) Individual Market Unaffected.--The requirements of 
     this subsection are met with respect to a small business 
     health plan if, under the terms of the plan, no participating 
     employer may provide health insurance coverage in the 
     individual market for any employee not covered under the plan 
     which is similar to the coverage contemporaneously provided 
     to employees of the employer under the plan, if such 
     exclusion of the employee from coverage under the plan is 
     based on a health status-related factor with respect to the 
     employee and such employee would, but for such exclusion on 
     such basis, be eligible for coverage under the plan.
       ``(c) Prohibition of Discrimination Against Employers and 
     Employees Eligible to Participate.--The requirements of this 
     subsection are met with respect to a small business health 
     plan if--
       ``(1) under the terms of the plan, all employers meeting 
     the preceding requirements of this section are eligible to 
     qualify as participating employers for all geographically 
     available coverage options, unless, in the case of any such 
     employer, participation or contribution requirements of the 
     type referred to in section 2711 of the Public Health Service 
     Act are not met;
       ``(2) information regarding all coverage options available 
     under the plan is made readily available to any employer 
     eligible to participate; and
       ``(3) the applicable requirements of sections 701, 702, and 
     703 are met with respect to the plan.

     ``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, 
                   CONTRIBUTION RATES, AND BENEFIT OPTIONS.

       ``(a) In General.--The requirements of this section are met 
     with respect to a small business health plan if the following 
     requirements are met:
       ``(1) Contents of governing instruments.--
       ``(A) In general.--The instruments governing the plan 
     include a written instrument, meeting the requirements of an 
     instrument required under section 402(a)(1), which--
       ``(i) provides that the board of trustees serves as the 
     named fiduciary required for plans under section 402(a)(1) 
     and serves in the capacity of a plan administrator (referred 
     to in section 3(16)(A)); and
       ``(ii) provides that the sponsor of the plan is to serve as 
     plan sponsor (referred to in section 3(16)(B)).
       ``(B) Description of material provisions.--The terms of the 
     health insurance coverage (including the terms of any 
     individual certificates that may be offered to individuals in 
     connection with such coverage) describe the material benefit 
     and rating, and other provisions set forth in this section 
     and such material provisions are included in the summary plan 
     description.
       ``(2) Contribution rates must be nondiscriminatory.--
       ``(A) In general.--The contribution rates for any 
     participating small employer shall not vary on the basis of 
     any health status-related factor in relation to employees of 
     such employer or their beneficiaries and shall not vary on 
     the basis of the type of business or industry in which such 
     employer is engaged.
       ``(B) Effect of title.--Nothing in this title or any other 
     provision of law shall be construed to preclude a health 
     insurance issuer offering health insurance coverage in 
     connection with a small business health plan, and at the 
     request of such small business health plan, from--
       ``(i) setting contribution rates for the small business 
     health plan based on the claims experience of the plan so 
     long as any variation in such rates complies with the 
     requirements of clause (ii), except that small business 
     health plans shall not be subject to paragraphs (1)(A) and 
     (3) of section 2911(b) of the Public Health Service Act; or
       ``(ii) varying contribution rates for participating 
     employers in a small business health plan in a State to the 
     extent that such rates could vary using the same methodology 
     employed in such State for regulating small group premium 
     rates, subject to the terms of part I of subtitle A of title 
     XXIX of the Public Health Service Act (relating to rating 
     requirements), as added by subtitle B of the Health Insurance 
     Marketplace Modernization and Affordability Act of 2007.
       ``(3) Exceptions regarding self-employed and large 
     employers.--
       ``(A) Self employed.--
       ``(i) In general.--Small business health plans with 
     participating employers who are self-employed individuals 
     (and their dependents) shall enroll such self-employed 
     participating employers in accordance with rating rules that 
     do not violate the rating rules for self-employed individuals 
     in the State in which such self-employed participating 
     employers are located.
       ``(ii) Guarantee issue.--Small business health plans with 
     participating employers who are self-employed individuals 
     (and their dependents) may decline to guarantee issue to such 
     participating employers in States in which guarantee issue is 
     not otherwise required for the self-employed in that State.
       ``(B) Large employers.--Small business health plans with 
     participating employers that are larger than small employers 
     (as defined in section 808(a)(10)) shall enroll such large 
     participating employers in accordance with rating rules that 
     do not violate the rating rules for large employers in the 
     State in which such large participating employers are 
     located.
       ``(4) Regulatory requirements.--Such other requirements as 
     the applicable authority determines are necessary to carry 
     out the purposes of this part, which shall be prescribed by 
     the applicable authority by regulation.
       ``(b) Ability of Small Business Health Plans to Design 
     Benefit Options.--Nothing in this part or any provision of 
     State law (as defined in section 514(c)(1)) shall be 
     construed to preclude a small business health plan or a 
     health insurance issuer offering health insurance coverage in 
     connection with a small business health plan from exercising 
     its sole discretion in selecting the specific benefits and 
     services consisting of medical care to be included as 
     benefits under such plan or coverage, except that such 
     benefits and services must meet the terms and specifications 
     of part II of subtitle A of title XXIX of the Public Health 
     Service Act (relating to lower cost plans), as added by 
     subtitle B of the Health Insurance Marketplace Modernization 
     and Affordability Act of 2007.
       ``(c) Domicile and Non-Domicile States.--
       ``(1) Domicile state.--Coverage shall be issued to a small 
     business health plan in the State in which the sponsor's 
     principal place of business is located.
       ``(2) Non-domicile states.--With respect to a State (other 
     than the domicile State) in which participating employers of 
     a small business health plan are located but in which the 
     insurer of the small business health plan in the domicile 
     State is not yet licensed, the following shall apply:
       ``(A) Temporary preemption.--If, upon the expiration of the 
     90-day period following the submission of a licensure 
     application by such insurer (that includes a certified copy 
     of an approved licensure application as submitted by such 
     insurer in the domicile State) to such State, such State has 
     not approved or denied such application, such State's health 
     insurance licensure laws shall be temporarily preempted and 
     the insurer shall be permitted to operate in such State, 
     subject to the following terms:
       ``(i) Application of non-domicile state law.--Except with 
     respect to licensure and with respect to the terms of 
     subtitle A of title XXIX of the Public Health Service Act 
     (relating to rating and benefits as added by the Health 
     Insurance Marketplace Modernization and Affordability Act of 
     2007), the laws and authority of the non-domicile State shall 
     remain in full force and effect.
       ``(ii) Revocation of preemption.--The preemption of a non-
     domicile State's health insurance licensure laws pursuant to 
     this subparagraph, shall be terminated upon the occurrence of 
     either of the following:

       ``(I) Approval or denial of application.--The approval of 
     denial of an insurer's licensure application, following the 
     laws and regulations of the non-domicile State with respect 
     to licensure.
       ``(II) Determination of material violation.--A 
     determination by a non-domicile State that an insurer 
     operating in a non-domicile State pursuant to the preemption 
     provided for in this subparagraph is in material violation of 
     the insurance laws (other than licensure and with respect to 
     the terms of subtitle A of title XXIX of the Public Health 
     Service Act (relating to rating and benefits added by the 
     Health Insurance Marketplace Modernization and Affordability 
     Act of 2007)) of such State.

       ``(B) No prohibition on promotion.--Nothing in this 
     paragraph shall be construed to prohibit a small business 
     health plan or an insurer from promoting coverage prior to 
     the expiration of the 90-day period provided for

[[Page 22103]]

     in subparagraph (A), except that no enrollment or collection 
     of contributions shall occur before the expiration of such 
     90-day period.
       ``(C) Licensure.--Except with respect to the application of 
     the temporary preemption provision of this paragraph, nothing 
     in this part shall be construed to limit the requirement that 
     insurers issuing coverage to small business health plans 
     shall be licensed in each State in which the small business 
     health plans operate.
       ``(D) Servicing by licensed insurers.--Notwithstanding 
     subparagraph (C), the requirements of this subsection may 
     also be satisfied if the participating employers of a small 
     business health plan are serviced by a licensed insurer in 
     that State, even where such insurer is not the insurer of 
     such small business health plan in the State in which such 
     small business health plan is domiciled.

     ``SEC. 806. REQUIREMENTS FOR APPLICATION AND RELATED 
                   REQUIREMENTS.

       ``(a) Filing Fee.--Under the procedure prescribed pursuant 
     to section 802(a), a small business health plan shall pay to 
     the applicable authority at the time of filing an application 
     for certification under this part a filing fee in the amount 
     of $5,000, which shall be available in the case of the 
     Secretary, to the extent provided in appropriation Acts, for 
     the sole purpose of administering the certification 
     procedures applicable with respect to small business health 
     plans.
       ``(b) Information to Be Included in Application for 
     Certification.--An application for certification under this 
     part meets the requirements of this section only if it 
     includes, in a manner and form which shall be prescribed by 
     the applicable authority by regulation, at least the 
     following information:
       ``(1) Identifying information.--The names and addresses 
     of--
       ``(A) the sponsor; and
       ``(B) the members of the board of trustees of the plan.
       ``(2) States in which plan intends to do business.--The 
     States in which participants and beneficiaries under the plan 
     are to be located and the number of them expected to be 
     located in each such State.
       ``(3) Bonding requirements.--Evidence provided by the board 
     of trustees that the bonding requirements of section 412 will 
     be met as of the date of the application or (if later) 
     commencement of operations.
       ``(4) Plan documents.--A copy of the documents governing 
     the plan (including any bylaws and trust agreements), the 
     summary plan description, and other material describing the 
     benefits that will be provided to participants and 
     beneficiaries under the plan.
       ``(5) Agreements with service providers.--A copy of any 
     agreements between the plan, health insurance issuer, and 
     contract administrators and other service providers.
       ``(c) Filing Notice of Certification With States.--A 
     certification granted under this part to a small business 
     health plan shall not be effective unless written notice of 
     such certification is filed with the applicable State 
     authority of each State in which the small business health 
     plans operate.
       ``(d) Notice of Material Changes.--In the case of any small 
     business health plan certified under this part, descriptions 
     of material changes in any information which was required to 
     be submitted with the application for the certification under 
     this part shall be filed in such form and manner as shall be 
     prescribed by the applicable authority by regulation. The 
     applicable authority may require by regulation prior notice 
     of material changes with respect to specified matters which 
     might serve as the basis for suspension or revocation of the 
     certification.

     ``SEC. 807. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

       ``A small business health plan which is or has been 
     certified under this part may terminate (upon or at any time 
     after cessation of accruals in benefit liabilities) only if 
     the board of trustees, not less than 60 days before the 
     proposed termination date--
       ``(1) provides to the participants and beneficiaries a 
     written notice of intent to terminate stating that such 
     termination is intended and the proposed termination date;
       ``(2) develops a plan for winding up the affairs of the 
     plan in connection with such termination in a manner which 
     will result in timely payment of all benefits for which the 
     plan is obligated; and
       ``(3) submits such plan in writing to the applicable 
     authority.

     Actions required under this section shall be taken in such 
     form and manner as may be prescribed by the applicable 
     authority by regulation.

     ``SEC. 808. DEFINITIONS AND RULES OF CONSTRUCTION.

       ``(a) Definitions.--For purposes of this part--
       ``(1) Affiliated member.--The term `affiliated member' 
     means, in connection with a sponsor--
       ``(A) a person who is otherwise eligible to be a member of 
     the sponsor but who elects an affiliated status with the 
     sponsor, or
       ``(B) in the case of a sponsor with members which consist 
     of associations, a person who is a member or employee of any 
     such association and elects an affiliated status with the 
     sponsor.
       ``(2) Applicable authority.--The term `applicable 
     authority' means the Secretary of Labor, except that, in 
     connection with any exercise of the Secretary's authority 
     with respect to which the Secretary is required under section 
     506(d) to consult with a State, such term means the 
     Secretary, in consultation with such State.
       ``(3) Applicable state authority.--The term `applicable 
     State authority' means, with respect to a health insurance 
     issuer in a State, the State insurance commissioner or 
     official or officials designated by the State to enforce the 
     requirements of title XXVII of the Public Health Service Act 
     for the State involved with respect to such issuer.
       ``(4) Group health plan.--The term `group health plan' has 
     the meaning provided in section 733(a)(1) (after applying 
     subsection (b) of this section).
       ``(5) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning provided in section 
     733(b)(1), except that such term shall not include excepted 
     benefits (as defined in section 733(c)).
       ``(6) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning provided in section 733(b)(2).
       ``(7) Individual market.--
       ``(A) In general.--The term `individual market' means the 
     market for health insurance coverage offered to individuals 
     other than in connection with a group health plan.
       ``(B) Treatment of very small groups.--
       ``(i) In general.--Subject to clause (ii), such term 
     includes coverage offered in connection with a group health 
     plan that has fewer than 2 participants as current employees 
     or participants described in section 732(d)(3) on the first 
     day of the plan year.
       ``(ii) State exception.--Clause (i) shall not apply in the 
     case of health insurance coverage offered in a State if such 
     State regulates the coverage described in such clause in the 
     same manner and to the same extent as coverage in the small 
     group market (as defined in section 2791(e)(5) of the Public 
     Health Service Act) is regulated by such State.
       ``(8) Medical care.--The term `medical care' has the 
     meaning provided in section 733(a)(2).
       ``(9) Participating employer.--The term `participating 
     employer' means, in connection with a small business health 
     plan, any employer, if any individual who is an employee of 
     such employer, a partner in such employer, or a self-employed 
     individual who is such employer (or any dependent, as defined 
     under the terms of the plan, of such individual) is or was 
     covered under such plan in connection with the status of such 
     individual as such an employee, partner, or self-employed 
     individual in relation to the plan.
       ``(10) Small employer.--The term `small employer' means, in 
     connection with a group health plan with respect to a plan 
     year, a small employer as defined in section 2791(e)(4).
       ``(11) Trade association and professional association.--The 
     terms `trade association' and `professional association' mean 
     an entity that meets the requirements of section 1.501(c)(6)-
     1 of title 26, Code of Federal Regulations (as in effect on 
     the date of enactment of this section).
       ``(b) Rule of Construction.--For purposes of determining 
     whether a plan, fund, or program is an employee welfare 
     benefit plan which is a small business health plan, and for 
     purposes of applying this title in connection with such plan, 
     fund, or program so determined to be such an employee welfare 
     benefit plan--
       ``(1) in the case of a partnership, the term `employer' (as 
     defined in section 3(5)) includes the partnership in relation 
     to the partners, and the term `employee' (as defined in 
     section 3(6)) includes any partner in relation to the 
     partnership; and
       ``(2) in the case of a self-employed individual, the term 
     `employer' (as defined in section 3(5)) and the term 
     `employee' (as defined in section 3(6)) shall include such 
     individual.
       ``(c) Renewal.--Notwithstanding any provision of law to the 
     contrary, a participating employer in a small business health 
     plan shall not be deemed to be a plan sponsor in applying 
     requirements relating to coverage renewal.
       ``(d) Health Savings Accounts.--Nothing in this part shall 
     be construed to inhibit the development of health savings 
     accounts pursuant to section 223 of the Internal Revenue Code 
     of 1986.''.
       (b) Conforming Amendments to Preemption Rules.--
       (1) Section 514(b)(6) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1144(b)(6)) is amended by 
     adding at the end the following new subparagraph:
       ``(E) The preceding subparagraphs of this paragraph do not 
     apply with respect to any State law in the case of a small 
     business health plan which is certified under part 8.''.
       (2) Section 514 of such Act (29 U.S.C. 1144) is amended--
       (A) in subsection (b)(4), by striking ``Subsection (a)'' 
     and inserting ``Subsections (a) and (d)'';
       (B) in subsection (b)(5), by striking ``subsection (a)'' in 
     subparagraph (A) and inserting ``subsection (a) of this 
     section and subsections (a)(2)(B) and (b) of section 805'', 
     and by striking ``subsection (a)'' in subparagraph

[[Page 22104]]

     (B) and inserting ``subsection (a) of this section or 
     subsection (a)(2)(B) or (b) of section 805'';
       (C) by redesignating subsection (d) as subsection (e); and
       (D) by inserting after subsection (c) the following new 
     subsection:
       ``(d)(1) Except as provided in subsection (b)(4), the 
     provisions of this title shall supersede any and all State 
     laws insofar as they may now or hereafter preclude a health 
     insurance issuer from offering health insurance coverage in 
     connection with a small business health plan which is 
     certified under part 8.
       ``(2) In any case in which health insurance coverage of any 
     policy type is offered under a small business health plan 
     certified under part 8 to a participating employer operating 
     in such State, the provisions of this title shall supersede 
     any and all laws of such State insofar as they may establish 
     rating and benefit requirements that would otherwise apply to 
     such coverage, provided the requirements of subtitle A of 
     title XXIX of the Public Health Service Act (as added by 
     title II of the Health Insurance Marketplace Modernization 
     and Affordability Act of 2007) (concerning health plan rating 
     and benefits) are met.''.
       (c) Plan Sponsor.--Section 3(16)(B) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 102(16)(B)) 
     is amended by adding at the end the following new sentence: 
     ``Such term also includes a person serving as the sponsor of 
     a small business health plan under part 8.''.
       (d) Savings Clause.--Section 731(c) of the Employee 
     Retirement Income Security Act of 1974 is amended by 
     inserting ``or part 8'' after ``this part''.
       (e) Clerical Amendment.--The table of contents in section 1 
     of the Employee Retirement Income Security Act of 1974 is 
     amended by inserting after the item relating to section 734 
     the following new items:

         ``Part 8--Rules Governing Small Business Health Plans

``801. Small business health plans.
``802. Certification of small business health plans.
``803. Requirements relating to sponsors and boards of trustees.
``804. Participation and coverage requirements.
``805. Other requirements relating to plan documents, contribution 
              rates, and benefit options.
``806. Requirements for application and related requirements.
``807. Notice requirements for voluntary termination.
``808. Definitions and rules of construction.''.

     SEC. 202. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

       Section 506 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1136) is amended by adding at the end the 
     following new subsection:
       ``(d) Consultation With States With Respect to Small 
     Business Health Plans.--
       ``(1) Agreements with states.--The Secretary shall consult 
     with the State recognized under paragraph (2) with respect to 
     a small business health plan regarding the exercise of--
       ``(A) the Secretary's authority under sections 502 and 504 
     to enforce the requirements for certification under part 8; 
     and
       ``(B) the Secretary's authority to certify small business 
     health plans under part 8 in accordance with regulations of 
     the Secretary applicable to certification under part 8.
       ``(2) Recognition of domicile state.--In carrying out 
     paragraph (1), the Secretary shall ensure that only one State 
     will be recognized, with respect to any particular small 
     business health plan, as the State with which consultation is 
     required. In carrying out this paragraph such State shall be 
     the domicile State, as defined in section 805(c).''.

     SEC. 203. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

       (a) Effective Date.--The amendments made by this subtitle 
     shall take effect 12 months after the date of the enactment 
     of this Act. The Secretary of Labor shall first issue all 
     regulations necessary to carry out the amendments made by 
     this subtitle within 6 months after the date of the enactment 
     of this Act.
       (b) Treatment of Certain Existing Health Benefits 
     Programs.--
       (1) In general.--In any case in which, as of the date of 
     the enactment of this Act, an arrangement is maintained in a 
     State for the purpose of providing benefits consisting of 
     medical care for the employees and beneficiaries of its 
     participating employers, at least 200 participating employers 
     make contributions to such arrangement, such arrangement has 
     been in existence for at least 10 years, and such arrangement 
     is licensed under the laws of one or more States to provide 
     such benefits to its participating employers, upon the filing 
     with the applicable authority (as defined in section 
     808(a)(2) of the Employee Retirement Income Security Act of 
     1974 (as amended by this subtitle)) by the arrangement of an 
     application for certification of the arrangement under part 8 
     of subtitle B of title I of such Act--
       (A) such arrangement shall be deemed to be a group health 
     plan for purposes of title I of such Act;
       (B) the requirements of sections 801(a) and 803(a) of the 
     Employee Retirement Income Security Act of 1974 shall be 
     deemed met with respect to such arrangement;
       (C) the requirements of section 803(b) of such Act shall be 
     deemed met, if the arrangement is operated by a board of 
     trustees which--
       (i) is elected by the participating employers, with each 
     employer having one vote; and
       (ii) has complete fiscal control over the arrangement and 
     which is responsible for all operations of the arrangement;
       (D) the requirements of section 804(a) of such Act shall be 
     deemed met with respect to such arrangement; and
       (E) the arrangement may be certified by any applicable 
     authority with respect to its operations in any State only if 
     it operates in such State on the date of certification.

     The provisions of this subsection shall cease to apply with 
     respect to any such arrangement at such time after the date 
     of the enactment of this Act as the applicable requirements 
     of this subsection are not met with respect to such 
     arrangement or at such time that the arrangement provides 
     coverage to participants and beneficiaries in any State other 
     than the States in which coverage is provided on such date of 
     enactment.
       (2) Definitions.--For purposes of this subsection, the 
     terms ``group health plan'', ``medical care'', and 
     ``participating employer'' shall have the meanings provided 
     in section 808 of the Employee Retirement Income Security Act 
     of 1974, except that the reference in paragraph (7) of such 
     section to an ``small business health plan'' shall be deemed 
     a reference to an arrangement referred to in this subsection.

                       Subtitle B--Market Relief

     SEC. 211. MARKET RELIEF.

       The Public Health Service Act (42 U.S.C. 201 et seq.) is 
     amended by adding at the end the following:

      ``TITLE XXX--HEALTH CARE INSURANCE MARKETPLACE MODERNIZATION

     ``SEC. 3001. GENERAL INSURANCE DEFINITIONS.

       ``In this title, the terms `health insurance coverage', 
     `health insurance issuer', `group health plan', and 
     `individual health insurance' shall have the meanings given 
     such terms in section 2791.

                      ``Subtitle A--Market Relief

                     ``PART I--RATING REQUIREMENTS

     ``SEC. 3011. DEFINITIONS.

       ``(a) General Definitions.--In this part:
       ``(1) Adopting state.--The term `adopting State' means a 
     State that, with respect to the small group market, has 
     enacted either the Model Small Group Rating Rules or, if 
     applicable to such State, the Transitional Model Small Group 
     Rating Rules, each in their entirety and as the exclusive 
     laws of the State that relate to rating in the small group 
     insurance market.
       ``(2) Applicable state authority.--The term `applicable 
     State authority' means, with respect to a health insurance 
     issuer in a State, the State insurance commissioner or 
     official or officials designated by the State to enforce the 
     insurance laws of such State.
       ``(3) Base premium rate.--The term `base premium rate' 
     means, for each class of business with respect to a rating 
     period, the lowest premium rate charged or that could have 
     been charged under a rating system for that class of business 
     by the small employer carrier to small employers with similar 
     case characteristics for health benefit plans with the same 
     or similar coverage
       ``(4) Eligible insurer.--The term `eligible insurer' means 
     a health insurance issuer that is licensed in a State and 
     that--
       ``(A) notifies the Secretary, not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage 
     consistent with the Model Small Group Rating Rules or, as 
     applicable, transitional small group rating rules in a State;
       ``(B) notifies the insurance department of a nonadopting 
     State (or other State agency), not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer small group health insurance 
     coverage in that State consistent with the Model Small Group 
     Rating Rules, and provides with such notice a copy of any 
     insurance policy that it intends to offer in the State, its 
     most recent annual and quarterly financial reports, and any 
     other information required to be filed with the insurance 
     department of the State (or other State agency); and
       ``(C) includes in the terms of the health insurance 
     coverage offered in nonadopting States (including in the 
     terms of any individual certificates that may be offered to 
     individuals in connection with such group health coverage) 
     and filed with the State pursuant to subparagraph (B), a 
     description in the insurer's contract of the Model Small 
     Group Rating Rules and an affirmation that such Rules are 
     included in the terms of such contract.
       ``(5) Health insurance coverage.--The term `health 
     insurance coverage' means any coverage issued in the small 
     group health insurance market, except that such term shall 
     not include excepted benefits (as defined in section 
     2791(c)).

[[Page 22105]]

       ``(6) Index rate.--The term `index rate' means for each 
     class of business with respect to the rating period for small 
     employers with similar case characteristics, the arithmetic 
     average of the applicable base premium rate and the 
     corresponding highest premium rate.
       ``(7)  Model small group rating rules.--The term ` Model 
     Small Group Rating Rules' means the rules set forth in 
     subsection (b).
       ``(8) Nonadopting state.--The term `nonadopting State' 
     means a State that is not an adopting State.
       ``(9) Small group insurance market.--The term `small group 
     insurance market' shall have the meaning given the term 
     `small group market' in section 2791(e)(5).
       ``(10) State law.--The term `State law' means all laws, 
     decisions, rules, regulations, or other State actions 
     (including actions by a State agency) having the effect of 
     law, of any State.
       ``(b) Definition Relating to Model Small Group Rating 
     Rules.--The term `Model Small Group Rating Rules' means 
     adapted rating rules drawn from the Adopted Small Employer 
     Health Insurance Availability Model Act of 1993 of the 
     National Association of Insurance Commissioners consisting of 
     the following:
       ``(1) Premium rates.--Premium rates for health benefit 
     plans to which this title applies shall be subject to the 
     following provisions relating to premiums:
       ``(A) Index rate.--The index rate for a rating period for 
     any class of business shall not exceed the index rate for any 
     other class of business by more than 20 percent.
       ``(B) Class of businesses.--With respect to a class of 
     business, the premium rates charged during a rating period to 
     small employers with similar case characteristics for the 
     same or similar coverage or the rates that could be charged 
     to such employers under the rating system for that class of 
     business, shall not vary from the index rate by more than 25 
     percent of the index rate under subparagraph (A).
       ``(C) Increases for new rating periods.--The percentage 
     increase in the premium rate charged to a small employer for 
     a new rating period may not exceed the sum of the following:
       ``(i) The percentage change in the new business premium 
     rate measured from the first day of the prior rating period 
     to the first day of the new rating period. In the case of a 
     health benefit plan into which the small employer carrier is 
     no longer enrolling new small employers, the small employer 
     carrier shall use the percentage change in the base premium 
     rate, except that such change shall not exceed, on a 
     percentage basis, the change in the new business premium rate 
     for the most similar health benefit plan into which the small 
     employer carrier is actively enrolling new small employers.
       ``(ii) Any adjustment, not to exceed 15 percent annually 
     and adjusted pro rata for rating periods of less then 1 year, 
     due to the claim experience, health status or duration of 
     coverage of the employees or dependents of the small employer 
     as determined from the small employer carrier's rate manual 
     for the class of business involved.
       ``(iii) Any adjustment due to change in coverage or change 
     in the case characteristics of the small employer as 
     determined from the small employer carrier's rate manual for 
     the class of business.
       ``(D) Uniform application of adjustments.--Adjustments in 
     premium rates for claim experience, health status, or 
     duration of coverage shall not be charged to individual 
     employees or dependents. Any such adjustment shall be applied 
     uniformly to the rates charged for all employees and 
     dependents of the small employer.
       ``(E) Use of industry as a case characteristic.--A small 
     employer carrier may utilize industry as a case 
     characteristic in establishing premium rates, so long as the 
     highest rate factor associated with any industry 
     classification does not exceed the lowest rate factor 
     associated with any industry classification by more than 15 
     percent.
       ``(F) Consistent application of factors.--Small employer 
     carriers shall apply rating factors, including case 
     characteristics, consistently with respect to all small 
     employers in a class of business. Rating factors shall 
     produce premiums for identical groups which differ only by 
     the amounts attributable to plan design and do not reflect 
     differences due to the nature of the groups assumed to select 
     particular health benefit plans.
       ``(G) Treatment of plans as having same rating period.--A 
     small employer carrier shall treat all health benefit plans 
     issued or renewed in the same calendar month as having the 
     same rating period.
       ``(H) Restricted network provisions.--For purposes of this 
     subsection, a health benefit plan that contains a restricted 
     network provision shall not be considered similar coverage to 
     a health benefit plan that does not contain a similar 
     provision if the restriction of benefits to network providers 
     results in substantial differences in claims costs.
       ``(I) Prohibition on use of certain case characteristics.--
     The small employer carrier shall not use case characteristics 
     other than age, gender, industry, geographic area, family 
     composition, group size, and participation in wellness 
     programs without prior approval of the applicable State 
     authority.
       ``(J) Require compliance.--Premium rates for small business 
     health benefit plans shall comply with the requirements of 
     this subsection notwithstanding any assessments paid or 
     payable by a small employer carrier as required by a State's 
     small employer carrier reinsurance program.
       ``(2) Establishment of separate class of business.--Subject 
     to paragraph (3), a small employer carrier may establish a 
     separate class of business only to reflect substantial 
     differences in expected claims experience or administrative 
     costs related to the following:
       ``(A) The small employer carrier uses more than one type of 
     system for the marketing and sale of health benefit plans to 
     small employers.
       ``(B) The small employer carrier has acquired a class of 
     business from another small employer carrier.
       ``(C) The small employer carrier provides coverage to one 
     or more association groups that meet the requirements of this 
     title.
       ``(3) Limitation.--A small employer carrier may establish 
     up to 9 separate classes of business under paragraph (2), 
     excluding those classes of business related to association 
     groups under this title.
       ``(4) Additional groupings.--The applicable State authority 
     may approve the establishment of additional distinct 
     groupings by small employer carriers upon the submission of 
     an application to the applicable State authority and a 
     finding by the applicable State authority that such action 
     would enhance the efficiency and fairness of the small 
     employer insurance marketplace.
       ``(5) Limitation on transfers.--A small employer carrier 
     shall not transfer a small employer involuntarily into or out 
     of a class of business. A small employer carrier shall not 
     offer to transfer a small employer into or out of a class of 
     business unless such offer is made to transfer all small 
     employers in the class of business without regard to case 
     characteristics, claim experience, health status or duration 
     of coverage since issue.
       ``(6) Suspension of the rules.--The applicable State 
     authority may suspend, for a specified period, the 
     application of paragraph (1) to the premium rates applicable 
     to one or more small employers included within a class of 
     business of a small employer carrier for one or more rating 
     periods upon a filing by the small employer carrier and a 
     finding by the applicable State authority either that the 
     suspension is reasonable when considering the financial 
     condition of the small employer carrier or that the 
     suspension would enhance the efficiency and fairness of the 
     marketplace for small employer health insurance.

     ``SEC. 3012. RATING RULES.

       ``(a) Implementation of Model Small Group Rating Rules.--
     Not later than 6 months after the enactment of this title, 
     the Secretary shall promulgate regulations implementing the 
     Model Small Group Rating Rules pursuant to section 3011(b).
       ``(b) Transitional Model Small Group Rating Rules.--
       ``(1) In general.--Not later than 6 months after the date 
     of enactment of this title and to the extent necessary to 
     provide for a graduated transition to the Model Small Group 
     Rating Rules, the Secretary, in consultation with the NAIC, 
     shall promulgate Transitional Model Small Group Rating Rules 
     in accordance with this subsection, which shall be applicable 
     with respect to certain non-adopting States for a period of 
     not to exceed 5 years from the date of the promulgation of 
     the Model Small Group Rating Rules pursuant to subsection 
     (a). After the expiration of such 5-year period, the 
     transitional model small group rating rules shall expire, and 
     the Model Small Group Rating Rules shall then apply with 
     respect to all non-adopting States pursuant to the provisions 
     of this part.
       ``(2) Premium variation during transition.--
       ``(A) Transition states.--During the transition period 
     described in paragraph (1), small group health insurance 
     coverage offered in a non-adopting State that had in place 
     premium rating band requirements or premium limits that 
     varied by less than 12.5 percent from the index rate within a 
     class of business on the date of enactment of this title, 
     shall not be subject to the premium variation provision of 
     section 3011(b)(1) of the Model Small Group Rating Rules and 
     shall instead be subject to the Transitional Model Small 
     Group Rating Rules as promulgated by the Secretary pursuant 
     to paragraph (1).
       ``(B) Non-transition states.--During the transition period 
     described in paragraph (1), and thereafter, small group 
     health insurance coverage offered in a non-adopting State 
     that had in place premium rating band requirements or premium 
     limits that varied by more than 12.5 percent from the index 
     rate within a class of business on the date of enactment of 
     this title, shall not be subject to the Transitional Model 
     Small Group Rating Rules as promulgated by the Secretary 
     pursuant to paragraph (1), and instead shall be subject to 
     the Model Small Group Rating Rules effective beginning with 
     the first plan year or calendar year following the 
     promulgation of such Rules, at the election of the eligible 
     insurer.
       ``(3) Transitioning of old business.--In developing the 
     transitional model small

[[Page 22106]]

     group rating rules under paragraph (1), the Secretary shall, 
     after consultation with the National Association of Insurance 
     Commissioners and representatives of insurers operating in 
     the small group health insurance market, promulgate special 
     transition standards and timelines with respect to 
     independent rating classes for old and new business, to the 
     extent reasonably necessary to protect health insurance 
     consumers and to ensure a stable and fair transition for old 
     and new market entrants.
       ``(4) Other transitional authority.--In developing the 
     Transitional Model Small Group Rating Rules under paragraph 
     (1), the Secretary shall provide for the application of the 
     Transitional Model Small Group Rating Rules in transition 
     States as the Secretary may determine necessary for a an 
     effective transition.
       ``(c) Market Re-Entry.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, a health insurance issuer that has voluntarily withdrawn 
     from providing coverage in the small group market prior to 
     the date of enactment of the Health Insurance Marketplace 
     Modernization and Affordability Act of 2007 shall not be 
     excluded from re-entering such market on a date that is more 
     than 180 days after such date of enactment.
       ``(2) Termination.--The provision of this subsection shall 
     terminate on the date that is 24 months after the date of 
     enactment of the Health Insurance Marketplace Modernization 
     and Affordability Act of 2007.

     ``SEC. 3013. APPLICATION AND PREEMPTION.

       ``(a) Superseding of State Law.--
       ``(1) In general.--This part shall supersede any and all 
     State laws of a non-adopting State insofar as such State laws 
     (whether enacted prior to or after the date of enactment of 
     this subtitle) relate to rating in the small group insurance 
     market as applied to an eligible insurer, or small group 
     health insurance coverage issued by an eligible insurer, 
     including with respect to coverage issued to a small employer 
     through a small business health plan, in a State.
       ``(2) Nonadopting states.--This part shall supersede any 
     and all State laws of a nonadopting State insofar as such 
     State laws (whether enacted prior to or after the date of 
     enactment of this subtitle)--
       ``(A) prohibit an eligible insurer from offering, 
     marketing, or implementing small group health insurance 
     coverage consistent with the Model Small Group Rating Rules 
     or transitional model small group rating rules; or
       ``(B) have the effect of retaliating against or otherwise 
     punishing in any respect an eligible insurer for offering, 
     marketing, or implementing small group health insurance 
     coverage consistent with the Model Small Group Rating Rules 
     or transitional model small group rating rules.
       ``(b) Savings Clause and Construction.--
       ``(1) Nonapplication to adopting states.--Subsection (a) 
     shall not apply with respect to adopting states.
       ``(2) Nonapplication to certain insurers.--Subsection (a) 
     shall not apply with respect to insurers that do not qualify 
     as eligible insurers that offer small group health insurance 
     coverage in a nonadopting State.
       ``(3) Nonapplication where obtaining relief under state 
     law.--Subsection (a)(1) shall not supercede any State law in 
     a nonadopting State to the extent necessary to permit 
     individuals or the insurance department of the State (or 
     other State agency) to obtain relief under State law to 
     require an eligible insurer to comply with the Model Small 
     Group Rating Rules or transitional model small group rating 
     rules.
       ``(4) No effect on preemption.--In no case shall this part 
     be construed to limit or affect in any manner the preemptive 
     scope of sections 502 and 514 of the Employee Retirement 
     Income Security Act of 1974. In no case shall this part be 
     construed to create any cause of action under Federal or 
     State law or enlarge or affect any remedy available under the 
     Employee Retirement Income Security Act of 1974
       ``(c) Effective Date.--This section shall apply, at the 
     election of the eligible insurer, beginning in the first plan 
     year or the first calendar year following the issuance of the 
     final rules by the Secretary under the Model Small Group 
     Rating Rules or, as applicable, the Transitional Model Small 
     Group Rating Rules, but in no event earlier than the date 
     that is 12 months after the date of enactment of this title.

     ``SEC. 3014. CIVIL ACTIONS AND JURISDICTION.

       ``(a) In General.--The courts of the United States shall 
     have exclusive jurisdiction over civil actions involving the 
     interpretation of this part.
       ``(b) Actions.--An eligible insurer may bring an action in 
     the district courts of the United States for injunctive or 
     other equitable relief against any officials or agents of a 
     nonadopting State in connection with any conduct or action, 
     or proposed conduct or action, by such officials or agents 
     which violates, or which would if undertaken violate, section 
     3013.
       ``(c) Direct Filing in Court of Appeals.--At the election 
     of the eligible insurer, an action may be brought under 
     subsection (b) directly in the United States Court of Appeals 
     for the circuit in which the nonadopting State is located by 
     the filing of a petition for review in such Court.
       ``(d) Expedited Review.--
       ``(1) District court.--In the case of an action brought in 
     a district court of the United States under subsection (b), 
     such court shall complete such action, including the issuance 
     of a judgment, prior to the end of the 120-day period 
     beginning on the date on which such action is filed, unless 
     all parties to such proceeding agree to an extension of such 
     period.
       ``(2) Court of appeals.--In the case of an action brought 
     directly in a United States Court of Appeal under subsection 
     (c), or in the case of an appeal of an action brought in a 
     district court under subsection (b), such Court shall 
     complete all action on the petition, including the issuance 
     of a judgment, prior to the end of the 60-day period 
     beginning on the date on which such petition is filed with 
     the Court, unless all parties to such proceeding agree to an 
     extension of such period.
       ``(e) Standard of Review.--A court in an action filed under 
     this section, shall render a judgment based on a review of 
     the merits of all questions presented in such action and 
     shall not defer to any conduct or action, or proposed conduct 
     or action, of a nonadopting State.

     ``SEC. 3015. ONGOING REVIEW.

       ``Not later than 5 years after the date on which the Model 
     Small Group Rating Rules are issued under this part, and 
     every 5 years thereafter, the Secretary, in consultation with 
     the National Association of Insurance Commissioners, shall 
     prepare and submit to the appropriate committees of Congress 
     a report that assesses the effect of the Model Small Group 
     Rating Rules on access, cost, and market functioning in the 
     small group market. Such report may, if the Secretary, in 
     consultation with the National Association of Insurance 
     Commissioners, determines such is appropriate for improving 
     access, costs, and market functioning, contain legislative 
     proposals for recommended modification to such Model Small 
     Group Rating Rules.

                      ``PART II--AFFORDABLE PLANS

     ``SEC. 3021. DEFINITIONS.

       ``In this part:
       ``(1) Adopting state.--The term `adopting State' means a 
     State that has enacted the Benefit Choice Standards in their 
     entirety and as the exclusive laws of the State that relate 
     to benefit, service, and provider mandates in the group and 
     individual insurance markets.
       ``(2) Benefit choice standards.--The term `Benefit Choice 
     Standards' means the Standards issued under section 3022.
       ``(3) Eligible insurer.--The term `eligible insurer' means 
     a health insurance issuer that is licensed in a nonadopting 
     State and that--
       ``(A) notifies the Secretary, not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage 
     consistent with the Benefit Choice Standards in a nonadopting 
     State;
       ``(B) notifies the insurance department of a nonadopting 
     State (or other State agency), not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage in 
     that State consistent with the Benefit Choice Standards, and 
     provides with such notice a copy of any insurance policy that 
     it intends to offer in the State, its most recent annual and 
     quarterly financial reports, and any other information 
     required to be filed with the insurance department of the 
     State (or other State agency) by the Secretary in 
     regulations; and
       ``(C) includes in the terms of the health insurance 
     coverage offered in nonadopting States (including in the 
     terms of any individual certificates that may be offered to 
     individuals in connection with such group health coverage) 
     and filed with the State pursuant to subparagraph (B), a 
     description in the insurer's contract of the Benefit Choice 
     Standards and that adherence to such Standards is included as 
     a term of such contract.
       ``(4) Health insurance coverage.--The term `health 
     insurance coverage' means any coverage issued in the group or 
     individual health insurance markets, except that such term 
     shall not include excepted benefits (as defined in section 
     2791(c)).
       ``(5) Nonadopting state.--The term `nonadopting State' 
     means a State that is not an adopting State.
       ``(6) Small group insurance market.--The term `small group 
     insurance market' shall have the meaning given the term 
     `small group market' in section 2791(e)(5).
       ``(7) State law.--The term `State law' means all laws, 
     decisions, rules, regulations, or other State actions 
     (including actions by a State agency) having the effect of 
     law, of any State.

     ``SEC. 3022. OFFERING AFFORDABLE PLANS.

       ``(a) Benefit Choice Options.--
       ``(1) Development.--Not later than 6 months after the date 
     of enactment of this title, the Secretary shall issue, by 
     interim final rule, Benefit Choice Standards that implement 
     the standards provided for in this part.
       ``(2) Basic options.--The Benefit Choice Standards shall 
     provide that a health insurance issuer in a State, may offer 
     a coverage

[[Page 22107]]

     plan or plan in the small group market, individual market, 
     large group market, or through a small business health plan, 
     that does not comply with one or more mandates regarding 
     covered benefits, services, or category of provider as may be 
     in effect in such State with respect to such market or 
     markets (either prior to or following the date of enactment 
     of this title), if such issuer also offers in such market or 
     markets an enhanced option as provided for in paragraph (3).
       ``(3) Enhanced option.--A health insurance issuer issuing a 
     basic option as provided for in paragraph (2) shall also 
     offer to purchasers (including, with respect to a small 
     business health plan, the participating employers of such 
     plan) an enhanced option, which shall at a minimum include 
     such covered benefits, services, and categories of providers 
     as are covered by a State employee coverage plan in one of 
     the 5 most populous States as are in effect in the calendar 
     year in which such enhanced option is offered.
       ``(4) Publication of benefits.--Not later than 3 months 
     after the date of enactment of this title, and on the first 
     day of every calendar year thereafter, the Secretary shall 
     publish in the Federal Register such covered benefits, 
     services, and categories of providers covered in that 
     calendar year by the State employee coverage plans in the 5 
     most populous States.
       ``(b) Effective Dates.--
       ``(1) Small business health plans.--With respect to health 
     insurance provided to participating employers of small 
     business health plans, the requirements of this part 
     (concerning lower cost plans) shall apply beginning on the 
     date that is 12 months after the date of enactment of this 
     title.
       ``(2) Non-association coverage.--With respect to health 
     insurance provided to groups or individuals other than 
     participating employers of small business health plans, the 
     requirements of this part shall apply beginning on the date 
     that is 15 months after the date of enactment of this title.

     ``SEC. 3023. APPLICATION AND PREEMPTION.

       ``(a) Superceding of State Law.--
       ``(1) In general.--This part shall supersede any and all 
     State laws insofar as such laws relate to mandates relating 
     to covered benefits, services, or categories of provider in 
     the health insurance market as applied to an eligible 
     insurer, or health insurance coverage issued by an eligible 
     insurer, including with respect to coverage issued to a small 
     business health plan, in a nonadopting State.
       ``(2) Nonadopting states.--This part shall supersede any 
     and all State laws of a nonadopting State (whether enacted 
     prior to or after the date of enactment of this title) 
     insofar as such laws--
       ``(A) prohibit an eligible insurer from offering, 
     marketing, or implementing health insurance coverage 
     consistent with the Benefit Choice Standards, as provided for 
     in section 3022(a); or
       ``(B) have the effect of retaliating against or otherwise 
     punishing in any respect an eligible insurer for offering, 
     marketing, or implementing health insurance coverage 
     consistent with the Benefit Choice Standards.
       ``(b) Savings Clause and Construction.--
       ``(1) Nonapplication to adopting states.--Subsection (a) 
     shall not apply with respect to adopting States.
       ``(2) Nonapplication to certain insurers.--Subsection (a) 
     shall not apply with respect to insurers that do not qualify 
     as eligible insurers who offer health insurance coverage in a 
     nonadopting State.
       ``(3) Nonapplication where obtaining relief under state 
     law.--Subsection (a)(1) shall not supercede any State law of 
     a nonadopting State to the extent necessary to permit 
     individuals or the insurance department of the State (or 
     other State agency) to obtain relief under State law to 
     require an eligible insurer to comply with the Benefit Choice 
     Standards.
       ``(4) No effect on preemption.--In no case shall this part 
     be construed to limit or affect in any manner the preemptive 
     scope of sections 502 and 514 of the Employee Retirement 
     Income Security Act of 1974. In no case shall this part be 
     construed to create any cause of action under Federal or 
     State law or enlarge or affect any remedy available under the 
     Employee Retirement Income Security Act of 1974

     ``SEC. 3024. CIVIL ACTIONS AND JURISDICTION.

       ``(a) In General.--The courts of the United States shall 
     have exclusive jurisdiction over civil actions involving the 
     interpretation of this part.
       ``(b) Actions.--An eligible insurer may bring an action in 
     the district courts of the United States for injunctive or 
     other equitable relief against any officials or agents of a 
     nonadopting State in connection with any conduct or action, 
     or proposed conduct or action, by such officials or agents 
     which violates, or which would if undertaken violate, section 
     3023.
       ``(c) Direct Filing in Court of Appeals.--At the election 
     of the eligible insurer, an action may be brought under 
     subsection (b) directly in the United States Court of Appeals 
     for the circuit in which the nonadopting State is located by 
     the filing of a petition for review in such Court.
       ``(d) Expedited Review.--
       ``(1) District court.--In the case of an action brought in 
     a district court of the United States under subsection (b), 
     such court shall complete such action, including the issuance 
     of a judgment, prior to the end of the 120-day period 
     beginning on the date on which such action is filed, unless 
     all parties to such proceeding agree to an extension of such 
     period.
       ``(2) Court of appeals.--In the case of an action brought 
     directly in a United States Court of Appeal under subsection 
     (c), or in the case of an appeal of an action brought in a 
     district court under subsection (b), such Court shall 
     complete all action on the petition, including the issuance 
     of a judgment, prior to the end of the 60-day period 
     beginning on the date on which such petition is filed with 
     the Court, unless all parties to such proceeding agree to an 
     extension of such period.
       ``(e) Standard of Review.--A court in an action filed under 
     this section, shall render a judgment based on a review of 
     the merits of all questions presented in such action and 
     shall not defer to any conduct or action, or proposed conduct 
     or action, of a nonadopting State.

     ``SEC. 3025. RULES OF CONSTRUCTION.

       ``(a) In General.--Notwithstanding any other provision of 
     Federal or State law, a health insurance issuer in an 
     adopting State or an eligible insurer in a non-adopting State 
     may amend its existing policies to be consistent with the 
     terms of this subtitle (concerning rating and benefits).
       ``(b) Health Savings Accounts.--Nothing in this subtitle 
     shall be construed to inhibit the development of health 
     savings accounts pursuant to section 223 of the Internal 
     Revenue Code of 1986.''.

        Subtitle C--Harmonization of Health Insurance Standards

     SEC. 221. HEALTH INSURANCE STANDARDS HARMONIZATION.

       Title XXIX of the Public Health Service Act (as added by 
     section 201) is amended by adding at the end the following:

                 ``Subtitle B--Standards Harmonization

     ``SEC. 3031. DEFINITIONS.

       ``In this subtitle:
       ``(1) Adopting state.--The term `adopting State' means a 
     State that has enacted the harmonized standards adopted under 
     this subtitle in their entirety and as the exclusive laws of 
     the State that relate to the harmonized standards.
       ``(2) Eligible insurer.--The term `eligible insurer' means 
     a health insurance issuer that is licensed in a nonadopting 
     State and that--
       ``(A) notifies the Secretary, not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage 
     consistent with the harmonized standards in a nonadopting 
     State;
       ``(B) notifies the insurance department of a nonadopting 
     State (or other State agency), not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage in 
     that State consistent with the harmonized standards published 
     pursuant to section 3032(d), and provides with such notice a 
     copy of any insurance policy that it intends to offer in the 
     State, its most recent annual and quarterly financial 
     reports, and any other information required to be filed with 
     the insurance department of the State (or other State agency) 
     by the Secretary in regulations; and
       ``(C) includes in the terms of the health insurance 
     coverage offered in nonadopting States (including in the 
     terms of any individual certificates that may be offered to 
     individuals in connection with such health coverage) and 
     filed with the State pursuant to subparagraph (B), a 
     description of the harmonized standards published pursuant to 
     section 3032(g)(2) and an affirmation that such standards are 
     a term of the contract.
       ``(3) Harmonized standards.--The term `harmonized 
     standards' means the standards certified by the Secretary 
     under section 3032(d).
       ``(4) Health insurance coverage.--The term `health 
     insurance coverage' means any coverage issued in the health 
     insurance market, except that such term shall not include 
     excepted benefits (as defined in section 2791(c).
       ``(5) Nonadopting state.--The term `nonadopting State' 
     means a State that fails to enact, within 18 months of the 
     date on which the Secretary certifies the harmonized 
     standards under this subtitle, the harmonized standards in 
     their entirety and as the exclusive laws of the State that 
     relate to the harmonized standards.
       ``(6) State law.--The term `State law' means all laws, 
     decisions, rules, regulations, or other State actions 
     (including actions by a State agency) having the effect of 
     law, of any State.

     ``SEC. 3032. HARMONIZED STANDARDS.

       ``(a) Board.--
       ``(1) Establishment.--Not later than 3 months after the 
     date of enactment of this title, the Secretary, in 
     consultation with the NAIC, shall establish the Health 
     Insurance Consensus Standards Board (referred to in this 
     subtitle as the `Board') to develop recommendations that 
     harmonize inconsistent

[[Page 22108]]

     State health insurance laws in accordance with the procedures 
     described in subsection (b).
       ``(2) Composition.--
       ``(A) In general.--The Board shall be composed of the 
     following voting members to be appointed by the Secretary 
     after considering the recommendations of professional 
     organizations representing the entities and constituencies 
     described in this paragraph:
       ``(i) Four State insurance commissioners as recommended by 
     the National Association of Insurance Commissioners, of which 
     2 shall be Democrats and 2 shall be Republicans, and of which 
     one shall be designated as the chairperson and one shall be 
     designated as the vice chairperson.
       ``(ii) Four representatives of State government, two of 
     which shall be governors of States and two of which shall be 
     State legislators, and two of which shall be Democrats and 
     two of which shall be Republicans.
       ``(iii) Four representatives of health insurers, of which 
     one shall represent insurers that offer coverage in the small 
     group market, one shall represent insurers that offer 
     coverage in the large group market, one shall represent 
     insurers that offer coverage in the individual market, and 
     one shall represent carriers operating in a regional market.
       ``(iv) Two representatives of insurance agents and brokers.
       ``(v) Two independent representatives of the American 
     Academy of Actuaries who have familiarity with the actuarial 
     methods applicable to health insurance.
       ``(B) Ex officio member.--A representative of the Secretary 
     shall serve as an ex officio member of the Board.
       ``(3) Advisory panel.--The Secretary shall establish an 
     advisory panel to provide advice to the Board, and shall 
     appoint its members after considering the recommendations of 
     professional organizations representing the entities and 
     constituencies identified in this paragraph:
       ``(A) Two representatives of small business health plans.
       ``(B) Two representatives of employers, of which one shall 
     represent small employers and one shall represent large 
     employers.
       ``(C) Two representatives of consumer organizations.
       ``(D) Two representatives of health care providers.
       ``(4) Qualifications.--The membership of the Board shall 
     include individuals with national recognition for their 
     expertise in health finance and economics, actuarial science, 
     health plans, providers of health services, and other related 
     fields, who provide a mix of different professionals, broad 
     geographic representation, and a balance between urban and 
     rural representatives.
       ``(5) Ethical disclosure.--The Secretary shall establish a 
     system for public disclosure by members of the Board of 
     financial and other potential conflicts of interest relating 
     to such members. Members of the Board shall be treated as 
     employees of Congress for purposes of applying title I of the 
     Ethics in Government Act of 1978 (Public Law 95-521).
       ``(6) Director and staff.--Subject to such review as the 
     Secretary deems necessary to assure the efficient 
     administration of the Board, the chair and vice-chair of the 
     Board may--
       ``(A) employ and fix the compensation of an Executive 
     Director (subject to the approval of the Comptroller General) 
     and such other personnel as may be necessary to carry out its 
     duties (without regard to the provisions of title 5, United 
     States Code, governing appointments in the competitive 
     service);
       ``(B) seek such assistance and support as may be required 
     in the performance of its duties from appropriate Federal 
     departments and agencies;
       ``(C) enter into contracts or make other arrangements, as 
     may be necessary for the conduct of the work of the Board 
     (without regard to section 3709 of the Revised Statutes (41 
     U.S.C. 5));
       ``(D) make advance, progress, and other payments which 
     relate to the work of the Board;
       ``(E) provide transportation and subsistence for persons 
     serving without compensation; and
       ``(F) prescribe such rules as it deems necessary with 
     respect to the internal organization and operation of the 
     Board.
       ``(7) Terms.--The members of the Board shall serve for the 
     duration of the Board. Vacancies in the Board shall be filled 
     as needed in a manner consistent with the composition 
     described in paragraph (2).
       ``(b) Development of Harmonized Standards.--
       ``(1) In general.--In accordance with the process described 
     in subsection (c), the Board shall identify and recommend 
     nationally harmonized standards for each of the following 
     process categories:
       ``(A) Form filing and rate filing.--Form and rate filing 
     standards shall be established which promote speed to market 
     and include the following defined areas for States that 
     require such filings:
       ``(i) Procedures for form and rate filing pursuant to a 
     streamlined administrative filing process.
       ``(ii) Timeframes for filings to be reviewed by a State if 
     review is required before they are deemed approved.
       ``(iii) Timeframes for an eligible insurer to respond to 
     State requests following its review.
       ``(iv) A process for an eligible insurer to self-certify.
       ``(v) State development of form and rate filing templates 
     that include only non-preempted State law and Federal law 
     requirements for eligible insurers with timely updates.
       ``(vi) Procedures for the resubmission of forms and rates.
       ``(vii) Disapproval rationale of a form or rate filing 
     based on material omissions or violations of non-preempted 
     State law or Federal law with violations cited and explained.
       ``(viii) For States that may require a hearing, a rationale 
     for hearings based on violations of non-preempted State law 
     or insurer requests.
       ``(B) Market conduct review.--Market conduct review 
     standards shall be developed which provide for the following:
       ``(i) Mandatory participation in national databases.
       ``(ii) The confidentiality of examination materials.
       ``(iii) The identification of the State agency with primary 
     responsibility for examinations.
       ``(iv) Consultation and verification of complaint data with 
     the eligible insurer prior to State actions.
       ``(v) Consistency of reporting requirements with the 
     recordkeeping and administrative practices of the eligible 
     insurer.
       ``(vi) Examinations that seek to correct material errors 
     and harmful business practices rather than infrequent errors.
       ``(vii) Transparency and publishing of the State's 
     examination standards.
       ``(viii) Coordination of market conduct analysis.
       ``(ix) Coordination and nonduplication between State 
     examinations of the same eligible insurer.
       ``(x) Rationale and protocols to be met before a full 
     examination is conducted.
       ``(xi) Requirements on examiners prior to beginning 
     examinations such as budget planning and work plans.
       ``(xii) Consideration of methods to limit examiners' fees 
     such as caps, competitive bidding, or other alternatives.
       ``(xiii) Reasonable fines and penalties for material errors 
     and harmful business practices.
       ``(C) Prompt payment of claims.--The Board shall establish 
     prompt payment standards for eligible insurers based on 
     standards similar to those applicable to the Social Security 
     Act as set forth in section 1842(c)(2) of such Act (42 U.S.C. 
     1395u(c)(2)). Such prompt payment standards shall be 
     consistent with the timing and notice requirements of the 
     claims procedure rules to be specified under subparagraph 
     (D), and shall include appropriate exceptions such as for 
     fraud, nonpayment of premiums, or late submission of claims.
       ``(D) Internal review.--The Board shall establish standards 
     for claims procedures for eligible insurers that are 
     consistent with the requirements relating to initial claims 
     for benefits and appeals of claims for benefits under the 
     Employee Retirement Income Security Act of 1974 as set forth 
     in section 503 of such Act (29 U.S.C. 1133) and the 
     regulations thereunder.
       ``(2) Recommendations.--The Board shall recommend 
     harmonized standards for each element of the categories 
     described in subparagraph (A) through (D) of paragraph (1) 
     within each such market. Notwithstanding the previous 
     sentence, the Board shall not recommend any harmonized 
     standards that disrupt, expand, or duplicate the benefit, 
     service, or provider mandate standards provided in the 
     Benefit Choice Standards pursuant to section 3022(a).
       ``(c) Process for Identifying Harmonized Standards.--
       ``(1) In general.--The Board shall develop recommendations 
     to harmonize inconsistent State insurance laws with respect 
     to each of the process categories described in subparagraphs 
     (A) through (D) of subsection (b)(1).
       ``(2) Requirements.--In adopting standards under this 
     section, the Board shall consider the following:
       ``(A) Any model acts or regulations of the National 
     Association of Insurance Commissioners in each of the process 
     categories described in subparagraphs (A) through (D) of 
     subsection (b)(1).
       ``(B) Substantially similar standards followed by a 
     plurality of States, as reflected in existing State laws, 
     relating to the specific process categories described in 
     subparagraphs (A) through (D) of subsection (b)(1).
       ``(C) Any Federal law requirement related to specific 
     process categories described in subparagraphs (A) through (D) 
     of subsection (b)(1).
       ``(D) In the case of the adoption of any standard that 
     differs substantially from those referred to in subparagraphs 
     (A), (B), or (C), the Board shall provide evidence to the 
     Secretary that such standard is necessary to protect health 
     insurance consumers or promote speed to market or 
     administrative efficiency.
       ``(E) The criteria specified in clauses (i) through (iii) 
     of subsection (d)(2)(B).
       ``(d) Recommendations and Certification by Secretary.--

[[Page 22109]]

       ``(1) Recommendations.--Not later than 18 months after the 
     date on which all members of the Board are selected under 
     subsection (a), the Board shall recommend to the Secretary 
     the certification of the harmonized standards identified 
     pursuant to subsection (c).
       ``(2) Certification.--
       ``(A) In general.--Not later than 120 days after receipt of 
     the Board's recommendations under paragraph (1), the 
     Secretary shall certify the recommended harmonized standards 
     as provided for in subparagraph (B), and issue such standards 
     in the form of an interim final regulation.
       ``(B) Certification process.--The Secretary shall establish 
     a process for certifying the recommended harmonized standard, 
     by category, as recommended by the Board under this section. 
     Such process shall--
       ``(i) ensure that the certified standards for a particular 
     process area achieve regulatory harmonization with respect to 
     health plans on a national basis;
       ``(ii) ensure that the approved standards are the minimum 
     necessary, with regard to substance and quantity of 
     requirements, to protect health insurance consumers and 
     maintain a competitive regulatory environment; and
       ``(iii) ensure that the approved standards will not limit 
     the range of group health plan designs and insurance 
     products, such as catastrophic coverage only plans, health 
     savings accounts, and health maintenance organizations, that 
     might otherwise be available to consumers.
       ``(3) Effective date.--The standards certified by the 
     Secretary under paragraph (2) shall be effective on the date 
     that is 18 months after the date on which the Secretary 
     certifies the harmonized standards.
       ``(e) Termination.--The Board shall terminate and be 
     dissolved after making the recommendations to the Secretary 
     pursuant to subsection (d)(1).
       ``(f) Ongoing Review.--Not earlier than 3 years after the 
     termination of the Board under subsection (e), and not 
     earlier than every 3 years thereafter, the Secretary, in 
     consultation with the National Association of Insurance 
     Commissioners and the entities and constituencies represented 
     on the Board and the Advisory Panel, shall prepare and submit 
     to the appropriate committees of Congress a report that 
     assesses the effect of the harmonized standards on access, 
     cost, and health insurance market functioning. The Secretary 
     may, based on such report and applying the process 
     established for certification under subsection (d)(2)(B), in 
     consultation with the National Association of Insurance 
     Commissioners and the entities and constituencies represented 
     on the Board and the Advisory Panel, update the harmonized 
     standards through notice and comment rulemaking.
       ``(g) Publication.--
       ``(1) Listing.--The Secretary shall maintain an up to date 
     listing of all harmonized standards certified under this 
     section on the Internet website of the Department of Health 
     and Human Services.
       ``(2) Sample contract language.--The Secretary shall 
     publish on the Internet website of the Department of Health 
     and Human Services sample contract language that incorporates 
     the harmonized standards certified under this section, which 
     may be used by insurers seeking to qualify as an eligible 
     insurer. The types of harmonized standards that shall be 
     included in sample contract language are the standards that 
     are relevant to the contractual bargain between the insurer 
     and insured.
       ``(h) State Adoption and Enforcement.--Not later than 18 
     months after the certification by the Secretary of harmonized 
     standards under this section, the States may adopt such 
     harmonized standards (and become an adopting State) and, in 
     which case, shall enforce the harmonized standards pursuant 
     to State law.

     ``SEC. 3033. APPLICATION AND PREEMPTION.

       ``(a) Superceding of State Law.--
       ``(1) In general.--The harmonized standards certified under 
     this subtitle shall supersede any and all State laws of a 
     non-adopting State insofar as such State laws relate to the 
     areas of harmonized standards as applied to an eligible 
     insurer, or health insurance coverage issued by a eligible 
     insurer, including with respect to coverage issued to a small 
     business health plan, in a nonadopting State.
       ``(2) Nonadopting states.--This subtitle shall supersede 
     any and all State laws of a nonadopting State (whether 
     enacted prior to or after the date of enactment of this 
     title) insofar as they may--
       ``(A) prohibit an eligible insurer from offering, 
     marketing, or implementing health insurance coverage 
     consistent with the harmonized standards; or
       ``(B) have the effect of retaliating against or otherwise 
     punishing in any respect an eligible insurer for offering, 
     marketing, or implementing health insurance coverage 
     consistent with the harmonized standards under this subtitle.
       ``(b) Savings Clause and Construction.--
       ``(1) Nonapplication to adopting states.--Subsection (a) 
     shall not apply with respect to adopting States.
       ``(2) Nonapplication to certain insurers.--Subsection (a) 
     shall not apply with respect to insurers that do not qualify 
     as eligible insurers who offer health insurance coverage in a 
     nonadopting State.
       ``(3) Nonapplication where obtaining relief under state 
     law.--Subsection (a)(1) shall not supercede any State law of 
     a nonadopting State to the extent necessary to permit 
     individuals or the insurance department of the State (or 
     other State agency) to obtain relief under State law to 
     require an eligible insurer to comply with the harmonized 
     standards under this subtitle.
       ``(4) No effect on preemption.--In no case shall this 
     subtitle be construed to limit or affect in any manner the 
     preemptive scope of sections 502 and 514 of the Employee 
     Retirement Income Security Act of 1974. In no case shall this 
     subtitle be construed to create any cause of action under 
     Federal or State law or enlarge or affect any remedy 
     available under the Employee Retirement Income Security Act 
     of 1974.
       ``(c) Effective Date.--This section shall apply beginning 
     on the date that is 18 months after the date on harmonized 
     standards are certified by the Secretary under this subtitle.

     ``SEC. 3034. CIVIL ACTIONS AND JURISDICTION.

       ``(a) In General.--The district courts of the United States 
     shall have exclusive jurisdiction over civil actions 
     involving the interpretation of this subtitle.
       ``(b) Actions.--An eligible insurer may bring an action in 
     the district courts of the United States for injunctive or 
     other equitable relief against any officials or agents of a 
     nonadopting State in connection with any conduct or action, 
     or proposed conduct or action, by such officials or agents 
     which violates, or which would if undertaken violate, section 
     3033.
       ``(c) Direct Filing in Court of Appeals.--At the election 
     of the eligible insurer, an action may be brought under 
     subsection (b) directly in the United States Court of Appeals 
     for the circuit in which the nonadopting State is located by 
     the filing of a petition for review in such Court.
       ``(d) Expedited Review.--
       ``(1) District court.--In the case of an action brought in 
     a district court of the United States under subsection (b), 
     such court shall complete such action, including the issuance 
     of a judgment, prior to the end of the 120-day period 
     beginning on the date on which such action is filed, unless 
     all parties to such proceeding agree to an extension of such 
     period.
       ``(2) Court of appeals.--In the case of an action brought 
     directly in a United States Court of Appeal under subsection 
     (c), or in the case of an appeal of an action brought in a 
     district court under subsection (b), such Court shall 
     complete all action on the petition, including the issuance 
     of a judgment, prior to the end of the 60-day period 
     beginning on the date on which such petition is filed with 
     the Court, unless all parties to such proceeding agree to an 
     extension of such period.
       ``(e) Standard of Review.--A court in an action filed under 
     this section, shall render a judgment based on a review of 
     the merits of all questions presented in such action and 
     shall not defer to any conduct or action, or proposed conduct 
     or action, of a nonadopting State.

     ``SEC. 3035. AUTHORIZATION OF APPROPRIATIONS; RULE OF 
                   CONSTRUCTION.

       ``(a) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out this subtitle.
       ``(b) Health Savings Accounts.--Nothing in this subtitle 
     shall be construed to inhibit the development of health 
     savings accounts pursuant to section 223 of the Internal 
     Revenue Code of 1986.''.

                   TITLE III--HEALTH SAVINGS ACCOUNTS

     SEC. 301. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED 
                   BEFORE ESTABLISHMENT OF HEALTH SAVINGS ACCOUNT.

       (a) In General.--Paragraph (2) of section 223(d) of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new subparagraph:
       ``(D) Certain medical expenses incurred before 
     establishment of account treated as qualified.--An expense 
     shall not fail to be treated as a qualified medical expense 
     solely because such expense was incurred before the 
     establishment of the health savings account if such expense 
     was incurred--
       ``(i) during either--

       ``(I) the taxable year in which the health savings account 
     was established, or
       ``(II) the preceding taxable year in the case of a health 
     savings account established after the taxable year in which 
     such expense was incurred but before the time prescribed by 
     law for filing the return for such taxable year (not 
     including extensions thereof), and

       ``(ii) for medical care of an individual during a period 
     that such individual was an eligible individual.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 302. USE OF ACCOUNT FOR INDIVIDUAL HIGH DEDUCTIBLE 
                   HEALTH PLAN PREMIUMS.

       (a) In General.--Section 223(d)(2)(C) of the Internal 
     Revenue Code of 1986 (relating to exceptions) is amended by 
     striking ``or'' at the end of clause (iii), by striking the 
     period at the end of clause (iv) and inserting ``, or'', and 
     by adding at the end the following new clause:

[[Page 22110]]

       ``(v) a high deductible health plan, other than a group 
     health plan (as defined in section 5000(b)(1)).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 303. EXCEPTION TO REQUIREMENT FOR EMPLOYERS TO MAKE 
                   COMPARABLE HEALTH SAVINGS ACCOUNT 
                   CONTRIBUTIONS.

       (a) Greater Employer-Provided Contributions to HSAs for 
     Chronically Ill Employees Treated as Meeting Comparability 
     Requirements.--Subsection (b) of section 4980G of the 
     Internal Revenue Code of 1986 (relating to failure of 
     employer to make comparable health savings account 
     contributions) is amended to read as follows:
       ``(b) Rules and Requirements.--
       ``(1) In general.--Except as provided in paragraph (2), 
     rules and requirements similar to the rules and requirements 
     of section 4980E shall apply for purposes of this section.
       ``(2) Treatment of employer-provided contributions to hsas 
     for chronically ill employees.--For purposes of this 
     section--
       ``(A) In general.--Any contribution by an employer to a 
     health savings account of an employee who is (or the spouse 
     or any dependent of the employee who is) a chronically ill 
     individual in an amount which is greater than a contribution 
     to a health savings account of a comparable participating 
     employee who is not a chronically ill individual shall not 
     fail to be considered a comparable contribution.
       ``(B) Nondiscrimination requirement.--Subparagraph (A) 
     shall not apply unless the excess employer contributions 
     described in subparagraph (A) are the same for all 
     chronically ill individuals who are similarly situated.
       ``(C) Chronically ill individual.--For purposes of this 
     paragraph, the term `chronically ill individual' means any 
     individual whose qualified medical expenses for any taxable 
     year are more than 50 percent greater than the average 
     qualified medical expenses of all employees of the employer 
     for such year.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 304. CERTAIN HEALTH REIMBURSEMENT ARRANGEMENT COVERAGE 
                   DISREGARDED COVERAGE FOR HEALTH SAVINGS 
                   ACCOUNTS.

       (a) In General.--Section 223(c)(1)(B)(iii) of the Internal 
     Revenue Code of 1986 is amended by inserting ``or a health 
     reimbursement arrangement'' after ``health flexible a 
     spending arrangement''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

                            TITLE IV--STUDY

     SEC. 401. STUDY ON TAX TREATMENT OF AND ACCESS TO PRIVATE 
                   HEALTH INSURANCE.

       (a) Study.--
       (1) In general.--The Secretary of the Treasury shall study 
     various options and make recommendations--
       (A) for reforming the tax treatment of health insurance to 
     improve tax equity and increase access to private health care 
     coverage; and
       (B) for providing meaningful assistance to low-income 
     individuals and families to purchase private health 
     insurance.
       (2) Consideration of various options.--In carrying out the 
     study under paragraph (1), the Secretary of the Treasury 
     shall consider--
       (A) options which rely on changes to Federal law not 
     included in the Internal Revenue Code of 1986;
       (B) options which have a goal of minimizing Federal 
     Government outlays;
       (C) options which minimize tax increases;
       (D) at least one option which retains the Federal tax 
     exclusion for employer-provided health coverage;
       (E) at least one option which is budget neutral; and
       (F) at least one option which maintains the current 
     distribution of the Federal income tax burden.
       (b) Report.--Not later than 6 months after the date of the 
     enactment of this Act, the Secretary of the Treasury shall 
     report the results of the study and the recommendations 
     required under subsection (a) to the Committee on Finance of 
     the Senate and the Committee on Ways and Means of the House 
     of Representatives.
                                 ______
                                 
  SA 2594. Mrs. McCASKILL submitted an amendment intended to be 
proposed to amendment SA 2011 proposed by Mr. Nelson of Nebraska (for 
Mr. Levin) to the bill H.R. 1585, to authorize appropriations for 
fiscal year 2008 for military activities of the Department of Defense, 
for military construction, and for defense activities of the Department 
of Energy, to prescribe military personnel strengths for such fiscal 
year, and for other purposes; which was ordered to lie on the table; as 
follows:

       At the end of subtitle E of title VI, add the following:

     SEC. 673. INDEPENDENT STUDENT.

       Section 480(d)(3) of the Higher Education Act of 1965 (20 
     U.S.C. 1087vv(d)(3)) is amended by inserting ``or is a 
     current active member of the National Guard or Reserve forces 
     of the United States who has completed initial military 
     training'' after ``purposes''.
                                 ______
                                 
  SA 2595. Mr. DeMINT submitted an amendment intended to be proposed to 
amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. Grassley, 
Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to amend the 
Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 217, after line 25, insert the following:

     SEC. _. DISPOSITION OF UNUSED HEALTH BENEFITS IN CAFETERIA 
                   PLANS AND FLEXIBLE SPENDING ARRANGEMENTS.

       (a) In General.--Section 125 of the Internal Revenue Code 
     of 1986 (relating to cafeteria plans) is amended by 
     redesignating subsections (h) and (i) as subsections (i) and 
     (j), respectively, and by inserting after subsection (g) the 
     following:
       ``(h) Contributions of Certain Unused Health Benefits.--
       ``(1) In general.--For purposes of this title, a plan or 
     other arrangement shall not fail to be treated as a cafeteria 
     plan solely because qualified benefits under such plan 
     include a health flexible spending arrangement under which 
     not more than $500 of unused health benefits may be--
       ``(A) carried forward to the succeeding plan year of such 
     health flexible spending arrangement, or
       ``(B) to the extent permitted by section 106(d), 
     contributed by the employer to a health savings account (as 
     defined in section 223(d)) maintained for the benefit of the 
     employee.
       ``(2) Health flexible spending arrangement.--For purposes 
     of this subsection, the term `health flexible spending 
     arrangement' means a flexible spending arrangement (as 
     defined in section 106(c)) that is a qualified benefit and 
     only permits reimbursement for expenses for medical care (as 
     defined in section 213(d)(1), without regard to subparagraphs 
     (C) and (D) thereof).
       ``(3) Unused health benefits.--For purposes of this 
     subsection, with respect to an employee, the term `unused 
     health benefits' means the excess of--
       ``(A) the maximum amount of reimbursement allowable to the 
     employee for a plan year under a health flexible spending 
     arrangement, over
       ``(B) the actual amount of reimbursement for such year 
     under such arrangement.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2007.
                                 ______
                                 
  SA 2596. Mr. VITTER submitted an amendment intended to be proposed to 
amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. Grassley, 
Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to amend the 
Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end of title I, insert the following:

     SEC. ___. REQUIREMENT THAT INDIVIDUALS WHO ARE ELIGIBLE FOR 
                   CHIP AND EMPLOYER-SPONSORED COVERAGE USE THE 
                   EMPLOYER-SPONSORED COVERAGE INSTEAD OF CHIP.

       Section 2105(c) (42 U.S.C. 1397ee(c)), as amended by 
     section 401(a), is amended by adding at the end the following 
     new paragraph:
       ``(12) Requirement regarding employer-sponsored coverage.--
       ``(A) In general.--Subject to subparagraph (B), no payment 
     may be made under this title with respect to an individual 
     who is eligible for coverage under a group health plan or 
     health insurance coverage offered through an employer, either 
     as an individual or as part of family coverage.
       ``(B) State option to offer premium assistance for high-
     cost plans.--
       ``(i) In general.--In the case of an individual who is 
     otherwise eligible for coverage under this title but for the 
     application of subparagraph (A) and who is eligible for high-
     cost heath insurance coverage, a State may elect to offer a 
     premium assistance subsidy for such coverage.
       ``(ii) Amount.--The amount of a premium assistance subsidy 
     under this paragraph shall be determined by the State but in 
     no case shall exceed the lesser of--

       ``(I) an amount equal to the value of the coverage under 
     this title that would otherwise apply with respect to the 
     individual but for the application of subparagraph (A); or
       ``(II) an amount equal to the difference between--

       ``(aa) the amount of the employee's share of the premium 
     costs for the high-cost health insurance coverage (for the 
     family or the individual, as the case may be); and
       ``(bb) an amount equal to 20 percent of the total premium 
     costs for such coverage, including both the employer and 
     employee share, (for the family or the individual, as the 
     case may be).

[[Page 22111]]

       ``(C) High-cost health insurance coverage.--For purposes of 
     this paragraph, the term `high cost health insurance 
     coverage' means a group health plan or health insurance 
     coverage offered through an employer in which the employee is 
     required to pay more than 20 percent of the premium costs.
       ``(D) Treatment as child health assistance.--Expenditures 
     for the provision of premium assistance subsidies under this 
     paragraph shall be considered child health assistance 
     described in paragraph (1)(C) of subsection (a) for purposes 
     of making payments under that subsection.''.
                                 ______
                                 
  SA 2597. Mr. VOINOVICH (for himself and Mr. Bingaman) submitted an 
amendment intended to be proposed by him to the bill H.R. 976, to amend 
the Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

                      TITLE __--HEALTH PARTNERSHIP

     SEC. _01. SHORT TITLE.

       This title may be cited as the ``Health Partnership Act''.

     SEC. _02. STATE HEALTH REFORM PROJECTS.

       (a) Purpose; Establishment of State Health Care Expansion 
     and Improvement Program.--The purposes of the programs 
     approved under this section shall include, but not be limited 
     to--
       (1) achieving the goals of increased health coverage and 
     access;
       (2) ensuring that patients receive high-quality, 
     appropriate health care;
       (3) improving the efficiency of health care spending; and
       (4) testing alternative reforms, such as building on the 
     public or private health systems, or creating new systems, to 
     achieve the objectives of this Act.
       (b) Applications by States, Local Governments, and 
     Tribes.--
       (1) Entities that may apply.--
       (A) In general.--A State, in consultation with local 
     governments, Indian tribes, and Indian organizations involved 
     in the provision of health care, may apply for a State health 
     care expansion and improvement program for the entire State 
     (or for regions of the State) under paragraph (2).
       (B) Regional groups.--A regional entity consisting of more 
     than one State may apply for a multi-State health care 
     expansion and improvement program for the entire region 
     involved under paragraph (2).
       (C) Definition.--In this Act, the term ``State'' means the 
     50 States, the District of Columbia, and the Commonwealth of 
     Puerto Rico. Such term shall include a regional entity 
     described in subparagraph (B).
       (2) Submission of application.--In accordance with this 
     section, each State desiring to implement a State health care 
     expansion and improvement program may submit an application 
     to the State Health Innovation Commission under subsection 
     (c) (referred to in this section as the ``Commission'') for 
     approval.
       (3) Local government applications.--
       (A) In general.--Where a State declines to submit an 
     application under this section, a unit of local government of 
     such State, or a consortium of such units of local 
     governments, may submit an application directly to the 
     Commission for programs or projects under this subsection. 
     Such an application shall be subject to the requirements of 
     this section.
       (B) Other applications.--Subject to such additional 
     guidelines as the Secretary may prescribe, a unit of local 
     government, Indian tribe, or Indian health organization may 
     submit an application under this section, whether or not the 
     State submits such an application, if such unit of local 
     government can demonstrate unique demographic needs or a 
     significant population size that warrants a substate program 
     under this subsection.
       (c) State Health Innovation Commission.--
       (1) In general.--Within 90 days after the date of the 
     enactment of this Act, the Secretary shall establish a State 
     Health Innovation Commission that shall--
       (A) be comprised of--
       (i) the Secretary;
       (ii) four State governors to be appointed by the National 
     Governors Association on a bipartisan basis;
       (iii) two members of a State legislature to be appointed by 
     the National Conference of State Legislators on a bipartisan 
     basis;
       (iv) two county officials to be appointed by the National 
     Association of Counties on a bipartisan basis;
       (v) two mayors to be appointed by the United States 
     Conference of Mayors and the National League of Cities on a 
     joint and bipartisan basis;
       (vi) two individuals to be appointed by the Speaker of the 
     House of Representatives;
       (vii) two individuals to be appointed by the minority 
     leader of the House of Representatives;
       (viii) two individuals to be appointed by the majority 
     leader of the Senate;
       (ix) two individuals to be appointed by the minority leader 
     of the Senate; and
       (x) two individuals who are members of federally-recognized 
     Indian tribes to be appointed on a bipartisan basis by the 
     National Congress of American Indians;
       (B) upon approval of \2/3\ of the members of the 
     Commission, provide the States with a variety of reform 
     options for their applications, such as tax credit 
     approaches, expansions of public programs such as medicaid 
     and the State Children's Health Insurance Program, the 
     creation of purchasing pooling arrangements similar to the 
     Federal Employees Health Benefits Program, individual market 
     purchasing options, single risk pool or single payer systems, 
     health savings accounts, a combination of the options 
     described in this clause, or other alternatives determined 
     appropriate by the Commission, including options suggested by 
     States, Indian tribes, or the public;
       (C) establish, in collaboration with a qualified and 
     independent organization such as the Institute of Medicine, 
     minimum performance measures and goals with respect to 
     coverage, quality, and cost of State programs, as described 
     under subsection (d)(1);
       (D) conduct a thorough review of the grant application from 
     a State and carry on a dialogue with all State applicants 
     concerning possible modifications and adjustments;
       (E) submit the recommendations and legislative proposal 
     described in subsection (d)(4)(B);
       (F) be responsible for monitoring the status and progress 
     achieved under program or projects granted under this 
     section;
       (G) report to the public concerning progress made by States 
     with respect to the performance measures and goals 
     established under this Act, the periodic progress of the 
     State relative to its State performance measures and goals, 
     and the State program application procedures, by region and 
     State jurisdiction;
       (H) promote information exchange between States and the 
     Federal Government; and
       (I) be responsible for making recommendations to the 
     Secretary and the Congress, using equivalency or minimum 
     standards, for minimizing the negative effect of State 
     program on national employer groups, provider organizations, 
     and insurers because of differing State requirements under 
     the programs.
       (2) Period of appointment; representation requirements; 
     vacancies.--Members shall be appointed for a term of 5 years. 
     In appointing such members under paragraph (1)(A), the 
     designated appointing individuals shall ensure the 
     representation of urban and rural areas and an appropriate 
     geographic distribution of such members. Any vacancy in the 
     Commission shall not affect its powers, but shall be filled 
     in the same manner as the original appointment.
       (3) Chairperson, meetings.--
       (A) Chairperson.--The Commission shall select a Chairperson 
     from among its members.
       (B) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (C) Meetings.--Not later than 30 days after the date on 
     which all members of the Commission have been appointed, the 
     Commission shall hold its first meeting. The Commission shall 
     meet at the call of the Chairperson.
       (4) Powers of the commission.--
       (A) Negotiations with states.--The Commission may conduct 
     detailed discussions and negotiations with States submitting 
     applications under this section, either individually or in 
     groups, to facilitate a final set of recommendations for 
     purposes of subsection (d)(4)(B). Such negotiations shall 
     include consultations with Indian tribes, and be conducted in 
     a public forum.
       (B) Hearings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out the purposes of this subsection.
       (C) Meetings.--In addition to other meetings the Commission 
     may hold, the Commission shall hold an annual meeting with 
     the participating States under this section for the purpose 
     of having States report progress toward the purposes in 
     subsection (a)(1) and for an exchange of information.
       (D) Information.--The Commission may secure directly from 
     any Federal department or agency such information as the 
     Commission considers necessary to carry out the provisions of 
     this subsection. Upon request of the Chairperson of the 
     Commission, the head of such department or agency shall 
     furnish such information to the Commission if the head of the 
     department or agency involved determines it appropriate.
       (E) Postal services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (5) Personnel matters.--
       (A) Compensation.--Each member of the Commission who is not 
     an officer or employee of the Federal Government or of a 
     State or local government shall be compensated at a rate 
     equal to the daily equivalent of the annual rate of basic pay 
     prescribed for level IV of the Executive Schedule under 
     section 5315 of title 5, United States Code, for each day 
     (including travel time) during which such member is engaged

[[Page 22112]]

     in the performance of the duties of the Commission. All 
     members of the Commission who are officers or employees of 
     the United States shall serve without compensation in 
     addition to that received for their services as officers or 
     employees of the United States.
       (B) Travel expenses.--The members of the Commission shall 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Commission.
       (C) Staff.--The Chairperson of the Commission may, without 
     regard to the civil service laws and regulations, appoint and 
     terminate an executive director and such other additional 
     personnel as may be necessary to enable the Commission to 
     perform its duties. The employment of an executive director 
     shall be subject to confirmation by the Commission.
       (D) Detail of government employees.--Any Federal Government 
     employee may be detailed to the Commission without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       (E) Temporary and intermittent services.--The Chairperson 
     of the Commission may procure temporary and intermittent 
     services under section 3109(b) of title 5, United States 
     Code, at rates for individuals which do not exceed the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level V of the Executive Schedule under section 5316 of such 
     title.
       (6) Funding.--For the purpose of carrying out this 
     subsection, there are authorized to be appropriated 
     $3,000,000 for fiscal year 2007 and each fiscal year 
     thereafter.
       (d) Requirements for Programs.--
       (1) State plan.--A State that seeks to receive a grant 
     under subsection (f) to operate a program under this section 
     shall prepare and submit to the Commission, as part of the 
     application under subsection (b), a State health care plan 
     that shall have as its goal improvements in coverage, quality 
     and costs. To achieve such goal, the State plan shall comply 
     with the following:
       (A) Coverage.--With respect to coverage, the State plan 
     shall--
       (i) provide and describe the manner in which the State will 
     ensure that an increased number of individuals residing 
     within the State will have expanded access to health care 
     coverage with a specific 5-year target for reduction in the 
     number of uninsured individuals through either private or 
     public program expansion, or both, in accordance with the 
     options established by the Commission;
       (ii) describe the number and percentage of current 
     uninsured individuals who will achieve coverage under the 
     State health program;
       (iii) describe the minimum benefits package that will be 
     provided to all classes of beneficiaries under the State 
     health program;
       (iv) identify Federal, State, or local and private programs 
     that currently provide health care services in the State and 
     describe how such programs could be coordinated with the 
     State health program, to the extent practicable; and
       (v) provide for improvements in the availability of 
     appropriate health care services that will increase access to 
     care in urban, rural, and frontier areas of the State with 
     medically underserved populations or where there is an 
     inadequate supply of health care providers.
       (B) Quality.--With respect to quality, the State plan 
     shall--
       (i) provide a plan to improve health care quality in the 
     State, including increasing effectiveness, efficiency, 
     timeliness, patient focused, equity while reducing health 
     disparities, and medical errors; and
       (ii) contain appropriate results-based quality indicators 
     established by the Commission that will be addressed by the 
     State as well as State-specific quality indicators.
       (C) Costs.--With respect to costs, the State plan shall--
       (i) provide that the State will develop and implement 
     systems to improve the efficiency of health care, including a 
     specific 5-year target for reducing administrative costs 
     (including paperwork burdens);
       (ii) describe the public and private sector financing to be 
     provided for the State health program;
       (iii) estimate the amount of Federal, State, and local 
     expenditures, as well as, the costs to business and 
     individuals under the State health program;
       (iv) describe how the State plan will ensure the financial 
     solvency of the State health program; and
       (v) provide that the State will prepare and submit to the 
     Secretary and the Commission such reports as the Secretary or 
     Commission may require to carry out program evaluations.
       (D) Health information technology.--With respect to health 
     information technology, the State plan shall provide 
     methodology for the appropriate use of health information 
     technology to improve infrastructure, such as improving the 
     availability of evidence-based medical and outcomes data to 
     providers and patients, as well as other health information 
     (such as electronic health records, electronic billing, and 
     electronic prescribing).
       (2) Technical assistance.--The Secretary shall, if 
     requested, provide technical assistance to States to assist 
     such States in developing applications and plans under this 
     section, including technical assistance by private sector 
     entities if determined appropriate by the Commission.
       (3) Initial review.--With respect to a State application 
     for a grant under subsection (b), the Secretary and the 
     Commission shall complete an initial review of such State 
     application within 60 days of the receipt of such 
     application, analyze the scope of the proposal, and determine 
     whether additional information is needed from the State. The 
     Commission shall advise the State within such period of the 
     need to submit additional information.
       (4) Final determination.--
       (A) In general.--Not later than 90 days after completion of 
     the initial review under paragraph (3), the Commission shall 
     determine whether to submit a State proposal to Congress for 
     approval.
       (B) Voting.--
       (i) In general.--The determination to submit a State 
     proposal to Congress under subparagraph (A) shall be approved 
     by \2/3\ of the members of the Commission who are eligible to 
     participate in such determination subject to clause (ii).
       (ii) Eligibility.--A member of the Commission shall not 
     participate in a determination under subparagraph (A) if--

       (I) in the case of a member who is a Governor, such 
     determination relates to the State of which the member is the 
     Governor; or
       (II) in the case of member not described in subclause (I), 
     such determination relates to the geographic area of a State 
     of which such member serves as a State or local official.

       (C) Submission.--Not later than 90 days prior to October 1 
     of each fiscal year, the Commission shall submit to Congress 
     a list, in the form of a legislative proposal, of the State 
     applications that the Commission recommends for approval 
     under this section.
       (D) Approval.--With respect to a fiscal year, a State 
     proposal that has been recommended under subparagraph (B) 
     shall be deemed to be approved, and subject to the 
     availability of appropriations, Federal funds shall be 
     provided to such program, unless a joint resolution has been 
     enacted disapproving such proposal as provided for in 
     subsection (e). Nothing in the preceding sentence shall be 
     construed to include the approval of State proposals that 
     involve waivers or modifications in applicable Federal law.
       (5) Program or project period.--A State program or project 
     may be approved for a period of 5 years and may be extended 
     for subsequent 5-year periods upon approval by the Commission 
     and the Secretary, based upon achievement of targets, except 
     that a shorter period may be requested by a State and granted 
     by the Secretary.
       (e) Expedited Congressional Consideration.--
       (1) Introduction and committee consideration.--
       (A) Introduction.--The legislative proposal submitted 
     pursuant to subsection (d)(4)(B) shall be in the form of a 
     joint resolution (in this subsection referred to as the 
     ``resolution''). Such resolution shall be introduced in the 
     House of Representatives by the Speaker, and in the Senate, 
     by the majority leader, immediately upon receipt of the 
     language and shall be referred to the appropriate committee 
     of Congress. If the resolution is not introduced in 
     accordance with the preceding sentence, the resolution may be 
     introduced in either House of Congress by any member thereof.
       (B) Committee consideration.--A resolution introduced in 
     the House of Representatives shall be referred to the 
     Committee on Ways and Means of the House of Representatives. 
     A resolution introduced in the Senate shall be referred to 
     the Committee on Finance of the Senate. Not later than 15 
     calendar days after the introduction of the resolution, the 
     committee of Congress to which the resolution was referred 
     shall report the resolution or a committee amendment thereto. 
     If the committee has not reported such resolution (or an 
     identical resolution) at the end of 15 calendar days after 
     its introduction or at the end of the first day after there 
     has been reported to the House involved a resolution, 
     whichever is earlier, such committee shall be deemed to be 
     discharged from further consideration of such reform bill and 
     such reform bill shall be placed on the appropriate calendar 
     of the House involved.
       (2) Expedited procedure.--
       (A) Consideration.--Not later than 5 days after the date on 
     which a committee has been discharged from consideration of a 
     resolution, the Speaker of the House of Representatives, or 
     the Speaker's designee, or the majority leader of the Senate, 
     or the leader's designee, shall move to proceed to the 
     consideration of the committee amendment to the resolution, 
     and if there is no such amendment, to the resolution. It 
     shall also be in order for any member of the House of 
     Representatives or the Senate, respectively, to move to 
     proceed to the consideration of the resolution at any time 
     after the

[[Page 22113]]

     conclusion of such 5-day period. All points of order against 
     the resolution (and against consideration of the resolution) 
     are waived. A motion to proceed to the consideration of the 
     resolution is highly privileged in the House of 
     Representatives and is privileged in the Senate and is not 
     debatable. The motion is not subject to amendment, to a 
     motion to postpone consideration of the resolution, or to a 
     motion to proceed to the consideration of other business. A 
     motion to reconsider the vote by which the motion to proceed 
     is agreed to or not agreed to shall not be in order. If the 
     motion to proceed is agreed to, the House of Representatives 
     or the Senate, as the case may be, shall immediately proceed 
     to consideration of the resolution without intervening 
     motion, order, or other business, and the resolution shall 
     remain the unfinished business of the House of 
     Representatives or the Senate, as the case may be, until 
     disposed of.
       (B) Consideration by other house.--If, before the passage 
     by one House of the resolution that was introduced in such 
     House, such House receives from the other House a resolution 
     as passed by such other House--
       (i) the resolution of the other House shall not be referred 
     to a committee and may only be considered for final passage 
     in the House that receives it under clause (iii);
       (ii) the procedure in the House in receipt of the 
     resolution of the other House, with respect to the resolution 
     that was introduced in the House in receipt of the resolution 
     of the other House, shall be the same as if no resolution had 
     been received from the other House; and
       (iii) notwithstanding clause (ii), the vote on final 
     passage shall be on the reform bill of the other House.

     Upon disposition of a resolution that is received by one 
     House from the other House, it shall no longer be in order to 
     consider the resolution bill that was introduced in the 
     receiving House.
       (C) Consideration in conference.--Immediately upon a final 
     passage of the resolution that results in a disagreement 
     between the two Houses of Congress with respect to the 
     resolution, conferees shall be appointed and a conference 
     convened. Not later than 10 days after the date on which 
     conferees are appointed, the conferees shall file a report 
     with the House of Representatives and the Senate resolving 
     the differences between the Houses on the resolution. 
     Notwithstanding any other rule of the House of 
     Representatives or the Senate, it shall be in order to 
     immediately consider a report of a committee of conference on 
     the resolution filed in accordance with this subclause. 
     Debate in the House of Representatives and the Senate on the 
     conference report shall be limited to 10 hours, equally 
     divided and controlled by the Speaker of the House of 
     Representatives and the minority leader of the House of 
     Representatives or their designees and the majority and 
     minority leaders of the Senate or their designees. A vote on 
     final passage of the conference report shall occur 
     immediately at the conclusion or yielding back of all time 
     for debate on the conference report.
       (3) Rules of the senate and house of representatives.--This 
     subsection is enacted by Congress--
       (A) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and is deemed to 
     be part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a resolution, and it supersedes 
     other rules only to the extent that it is inconsistent with 
     such rules; and
       (B) with full recognition of the constitutional right of 
     either House to change the rules (so far as they relate to 
     the procedure of that House) at any time, in the same manner, 
     and to the same extent as in the case of any other rule of 
     that House.
       (4) Limitation.--The amount of Federal funds provided with 
     respect to any State proposal that is deemed approved under 
     subsection (d)(3) shall not exceed the cost provided for such 
     proposals within the concurrent resolution on the budget as 
     enacted by Congress for the fiscal year involved.
       (f) Funding.--
       (1) In general.--The Secretary shall provide a grant to a 
     State that has an application approved under subsection (b) 
     to enable such State to carry out an innovative State health 
     program in the State.
       (2) Amount of grant.--The amount of a grant provided to a 
     State under paragraph (1) shall be determined based upon the 
     recommendations of the Commission, subject to the amount 
     appropriated under subsection (k).
       (3) Performance-based funding allocation and 
     prioritization.--In awarding grants under paragraph (1), the 
     Secretary shall--
       (A) fund a diversity of approaches as provided for by the 
     Commission in subsection (c)(1)(B);
       (B) give priority to those State programs that the 
     Commission determines have the greatest opportunity to 
     succeed in providing expanded health insurance coverage and 
     in providing children, youth, and other vulnerable 
     populations with improved access to health care items and 
     services; and
       (C) link allocations to the State to the meeting of the 
     goals and performance measures relating to health care 
     coverage, quality, and health care costs established under 
     this Act through the State project application process.
       (4) Maintenance of effort.--A State, in utilizing the 
     proceeds of a grant received under paragraph (1), shall 
     maintain the expenditures of the State for health care 
     coverage purposes for the support of direct health care 
     delivery at a level equal to not less than the level of such 
     expenditures maintained by the State for the fiscal year 
     preceding the fiscal year for which the grant is received.
       (5) Report.--At the end of the 5-year period beginning on 
     the date on which the Secretary awards the first grant under 
     paragraph (1), the State Health Innovation Advisory 
     Commission established under subsection (c) shall prepare and 
     submit to the appropriate committees of Congress, a report on 
     the progress made by States receiving grants under paragraph 
     (1) in meeting the goals of expanded coverage, improved 
     quality, and cost containment through performance measures 
     established during the 5-year period of the grant. Such 
     report shall contain the recommendation of the Commission 
     concerning any future action that Congress should take 
     concerning health care reform, including whether or not to 
     extend the program established under this subsection.
       (g) Monitoring and Evaluation.--
       (1) Annual reports and participation by states.--Each State 
     that has received a program approval shall--
       (A) submit to the Commission an annual report based on the 
     period representing the respective State's fiscal year, 
     detailing compliance with the requirements established by the 
     Commission and the Secretary in the approval and in this 
     section; and
       (B) participate in the annual meeting under subsection 
     (c)(4)(B).
       (2) Evaluations by commission.--The Commission, in 
     consultation with a qualified and independent organization 
     such as the Institute of Medicine, shall prepare and submit 
     to the Committee on Finance and the Committee on Health, 
     Education, Labor, and Pensions of the Senate and the 
     Committee on Energy and Commerce, the Committee on Education 
     and Labor, and the Committee on Ways and Means of the House 
     of Representatives annual reports that shall contain--
       (A) a description of the effects of the reforms undertaken 
     in States receiving approvals under this section;
       (B) a description of the recommendations of the Commission 
     and actions taken based on these recommendations;
       (C) an evaluation of the effectiveness of such reforms in--
       (i) expanding health care coverage for State residents;
       (ii) improving the quality of health care provided in the 
     States; and
       (iii) reducing or containing health care costs in the 
     States;
       (D) recommendations regarding the advisability of 
     increasing Federal financial assistance for State ongoing or 
     future health program initiatives, including the amount and 
     source of such assistance; and
       (E) as required by the Commission or the Secretary under 
     subsection (f)(5), a periodic, independent evaluation of the 
     program.
       (h) Noncompliance.--
       (1) Corrective action plans.--If a State is not in 
     compliance with a requirement of this section, the Secretary 
     shall develop a corrective action plan for such State.
       (2) Termination.--For good cause and in consultation with 
     the Commission, the Secretary may revoke any program granted 
     under this section. Such decisions shall be subject to a 
     petition for reconsideration and appeal pursuant to 
     regulations established by the Secretary.
       (i) Relationship to Federal Programs.--
       (1) In general.--Nothing in this Act, or in section 1115 of 
     the Social Security Act (42 U.S.C. 1315) shall be construed 
     as authorizing the Secretary, the Commission, a State, or any 
     other person or entity to alter or affect in any way the 
     provisions of title XIX of such Act (42 U.S.C. 1396 et seq.) 
     or the regulations implementing such title.
       (2) Maintenance of effort.--No payment may be made under 
     this section if the State adopts criteria for benefits, 
     income, and resource standards and methodologies for purposes 
     of determining an individual's eligibility for medical 
     assistance under the State plan under title XIX that are more 
     restrictive than those applied as of the date of enactment of 
     this Act.
       (j) Miscellaneous Provisions.--
       (1) Application of certain requirements.--
       (A) Restriction on application of preexisting condition 
     exclusions.--
       (i) In general.--Subject to subparagraph (B), a State shall 
     not permit the imposition of any preexisting condition 
     exclusion for covered benefits under a program or project 
     under this section.
       (ii) Group health plans and group health insurance 
     coverage.--If the State program or project provides for 
     benefits through payment for, or a contract with, a group 
     health plan or group health insurance coverage, the program 
     or project may permit the imposition of a preexisting 
     condition exclusion but only insofar and to the extent that 
     such exclusion is permitted under the

[[Page 22114]]

     applicable provisions of part 7 of subtitle B of title I of 
     the Employee Retirement Income Security Act of 1974 and title 
     XXVII of the Public Health Service Act.
       (B) Compliance with other requirements.--Coverage offered 
     under the program or project shall comply with the 
     requirements of subpart 2 of part A of title XXVII of the 
     Public Health Service Act insofar as such requirements apply 
     with respect to a health insurance issuer that offers group 
     health insurance coverage.
       (2) Prevention of duplicative payments.--
       (A) Other health plans.--No payment shall be made to a 
     State under this section for expenditures for health 
     assistance provided for an individual to the extent that a 
     private insurer (as defined by the Secretary by regulation 
     and including a group health plan (as defined in section 
     607(1) of the Employee Retirement Income Security Act of 
     1974), a service benefit plan, and a health maintenance 
     organization) would have been obligated to provide such 
     assistance but for a provision of its insurance contract 
     which has the effect of limiting or excluding such obligation 
     because the individual is eligible for or is provided health 
     assistance under the plan.
       (B) Other federal governmental programs.--Except as 
     provided in any other provision of law, no payment shall be 
     made to a State under this section for expenditures for 
     health assistance provided for an individual to the extent 
     that payment has been made or can reasonably be expected to 
     be made promptly (as determined in accordance with 
     regulations) under any other federally operated or financed 
     health care insurance program, other than an insurance 
     program operated or financed by the Indian Health Service, as 
     identified by the Secretary. For purposes of this paragraph, 
     rules similar to the rules for overpayments under section 
     1903(d)(2) of the Social Security Act shall apply.
       (3) Application of certain general provisions.--The 
     following sections of the Social Security Act shall apply to 
     States under this section in the same manner as they apply to 
     a State under such title XIX:
       (A) Title xi provisions.--
       (i) Section 1902(a)(4)(C) (relating to conflict of interest 
     standards).
       (ii) Paragraphs (2), (16), and (17) of section 1903(i) 
     (relating to limitations on payment).
       (iii) Section 1903(w) (relating to limitations on provider 
     taxes and donations).
       (iv) Section 1920A (relating to presumptive eligibility for 
     children).
       (B) Title xi provisions.--
       (i) Section 1116 (relating to administrative and judicial 
     review), but only insofar as consistent with this title.
       (ii) Section 1124 (relating to disclosure of ownership and 
     related information).
       (iii) Section 1126 (relating to disclosure of information 
     about certain convicted individuals).
       (iv) Section 1128A (relating to civil monetary penalties).
       (v) Section 1128B(d) (relating to criminal penalties for 
     certain additional charges).
       (vi) Section 1132 (relating to periods within which claims 
     must be filed).
       (4) Relation to other laws.--
       (A) HIPAA.--Health benefits coverage provided under a State 
     program or project under this section shall be treated as 
     creditable coverage for purposes of part 7 of subtitle B of 
     title I of the Employee Retirement Income Security Act of 
     1974, title XXVII of the Public Health Service Act, and 
     subtitle K of the Internal Revenue Code of 1986.
       (B) ERISA.--Nothing in this section shall be construed as 
     affecting or modifying section 514 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1144) with respect to 
     a group health plan (as defined in section 2791(a)(1) of the 
     Public Health Service Act (42 U.S.C. 300gg-91(a)(1))).
       (k) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, such sums as 
     may be necessary in each fiscal year. Amounts appropriated 
     for a fiscal year under this subsection and not expended may 
     be used in subsequent fiscal years to carry out this section.
                                 ______
                                 
  SA 2598. Mr. CRAIG submitted an amendment intended to be proposed to 
amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. Grassley, 
Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to amend the 
Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 217, after line 25, insert the following:

     SEC. 61_. REPEAL OF IMPOSITION OF WITHHOLDING ON CERTAIN 
                   PAYMENTS MADE TO VENDORS BY GOVERNMENT 
                   ENTITIES.

       The amendment made by section 511 of the Tax Increase 
     Prevention and Reconciliation Act of 2005 is repealed and the 
     Internal Revenue Code of 1986 shall be applied as if such 
     amendment had never been enacted.
                                 ______
                                 
  SA 2599. Mr. McCONNELL (for himself, Mr. Specter, and Mr. Thune) 
proposed an amendment to amendment SA 2530 proposed by Mr. Baucus (for 
himself, Mr. Grassley, Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 
976, to amend the Internal Revenue Code of 1986 to provide tax relief 
for small businesses, and for other purposes; as follows:

       At the end of the substitute, insert the following:

     SEC. ___. SENSE OF THE SENATE REGARDING THE NOMINATION OF 
                   JUDGE LESLIE SOUTHWICK.

       (a) Findings.--The Senate makes the following findings:
       (1) Judge Leslie Southwick served on the Mississippi Court 
     of Appeals from January 1995 to December 2006, during which 
     time he was honored by his peers for his outstanding service 
     on the bench.
       (2) The Mississippi State Bar honored Judge Southwick in 
     2004 with its judicial excellence award, which is awarded 
     annually to a judge who is ``an example of judicial 
     excellence; a leader in advancing the quality and integrity 
     of justice; and a person of high ideals, character and 
     integrity''.
       (3) The American Bar Association has twice rated Judge 
     Southwick well-qualified for Federal judicial service, its 
     highest rating. As part of its evaluation, the American Bar 
     Association considers a nominee's ``compassion,'' ``open-
     mindedness,'' ``freedom from bias and commitment to equal 
     justice under law''.
       (4) In 2006, the President nominated Judge Southwick to the 
     United States District Court for the Southern District of 
     Mississippi.
       (5) Last fall, the Senate Judiciary Committee unanimously 
     reported Judge Southwick's nomination to the full Senate for 
     its favorable consideration.
       (6) In 2007, the President nominated Judge Southwick to the 
     United States Court of Appeals for the Fifth Circuit.
       (7) The Administrative Office of the Courts has declared 
     the Fifth Circuit vacancy to which Judge Southwick has been 
     nominated a ``judicial emergency'' with one of the highest 
     case filing rates in the country.
       (8) Judge Southwick is the third consecutive Mississippian 
     whom the President has nominated to address this judicial 
     emergency.
       (9) Both Senators from Mississippi strongly support Judge 
     Southwick's nomination to the Fifth Circuit, and they 
     strongly supported his 2 predecessor nominees to that 
     vacancy.
       (10) The only material change in Judge Southwick's 
     qualifications between last fall when the Senate Judiciary 
     Committee unanimously reported his district court nomination 
     to the floor, and this year when the Committee is considering 
     his nomination to the Fifth Circuit is that the American Bar 
     Association has increased its rating of him from well-
     qualified to unanimously well-qualified.
       (11) While on the State appellate bench, Judge Southwick 
     has continued to serve his country admirably in her armed 
     forces.
       (12) In 1992, Judge Southwick sought an age waiver to join 
     the Army Reserves, and in 2003, he volunteered to serve in a 
     line combat unit, the 155th Separate Armor Brigade. In 2004, 
     he took a leave of absence from the bench to serve in Iraq 
     with the 155th Brigade Combat Team of the Mississippi 
     National Guard. There he distinguished himself at Forward 
     Operating Base Duke near Najaf and at Forward Operating Base 
     Kalsu.
       (b) Sense of Senate.--It is the sense of the Senate that 
     the nomination of Judge Leslie Southwick to the United States 
     Court of Appeals for the Fifth Circuit should receive an up 
     or down vote by the full Senate.
                                 ______
                                 
  SA 2600. Mr. SANDERS submitted an amendment intended to be proposed 
to amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. Grassley, 
Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to amend the 
Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 83, strike line 2 and insert the following:
     level.
       ``(C) Use of funds.--Payments under this paragraph may only 
     be used to provide health care coverage or to expand health 
     care access or infrastructure, including, but not limited to, 
     the provision of school-based health services, dental care, 
     mental health services, Federally-qualified health center 
     services, and educational debt forgiveness for health care 
     practitioners in fields experiencing local shortages.''.
                                 ______
                                 
  SA 2601. Mr. LEVIN (for himself, Ms. Stabenow, and Mr. Bingaman) 
submitted an amendment intended to be proposed to amendment SA 2530 
proposed by Mr. Baucus (for himself, Mr. Grassley, Mr. Rockefeller, and 
Mr. Hatch) to the bill H.R. 976, to amend the Internal Revenue Code of 
1986 to provide tax relief for small businesses, and for other 
purposes; which was ordered to lie on the table; as follows:


[[Page 22115]]

       Beginning on page 42, strike line 14 and all that follows 
     through page 49, line 4 and insert the following:
       ``(a) Termination of Coverage for Nonpregnant Childless 
     Adults.--
       ``(1) No new chip waivers; automatic extensions at state 
     option through fiscal year 2010.--Notwithstanding section 
     1115 or any other provision of this title, except as provided 
     in this subsection--
       ``(A) the Secretary shall not on or after the date of the 
     enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2007, approve or renew a waiver, 
     experimental, pilot, or demonstration project that would 
     allow funds made available under this title to be used to 
     provide child health assistance or other health benefits 
     coverage to a nonpregnant childless adult; and
       ``(B) notwithstanding the terms and conditions of an 
     applicable existing waiver, the provisions of paragraphs (2) 
     and (3) shall apply for purposes of any fiscal year beginning 
     on or after October 1, 2010, in determining the period to 
     which the waiver applies, the individuals eligible to be 
     covered by the waiver, and the amount of the Federal payment 
     under this title.
       ``(2) Termination of chip coverage under applicable 
     existing waivers at the end of fiscal year 2010.--
       ``(A) In general.--No funds shall be available under this 
     title for child health assistance or other health benefits 
     coverage that is provided to a nonpregnant childless adult 
     under an applicable existing waiver after September 30, 2010.
       ``(B) Extension upon state request.--If an applicable 
     existing waiver described in subparagraph (A) would otherwise 
     expire before October 1, 2010, and the State requests an 
     extension of such waiver, the Secretary shall grant such an 
     extension, but only through September 30, 2010.
       ``(C) Application of enhanced fmap.--The enhanced FMAP 
     determined under section 2105(b) shall apply to expenditures 
     under an applicable existing waiver for the provision of 
     child health assistance or other health benefits coverage to 
     a nonpregnant childless adult during each of fiscal years 
     2008 through 2010.
       ``(3) Optional 1-year transitional coverage block grant 
     funded from state allotment.--Subject to paragraph (4)(B), 
     each State for which coverage under an applicable existing 
     waiver is terminated under paragraph (2)(A) may elect to 
     provide nonpregnant childless adults who were provided child 
     health assistance or health benefits coverage under the 
     applicable existing waiver at any time during fiscal year 
     2010 with such assistance or coverage during fiscal year 
     2011, as if the authority to provide such assistance or 
     coverage under an applicable existing waiver was extended 
     through that fiscal year, but subject to the following terms 
     and conditions:
       ``(A) Block grant set aside from state allotment.--The 
     Secretary shall set aside for the State an amount equal to 
     the Federal share of the State's projected expenditures under 
     the applicable existing waiver for providing child health 
     assistance or health benefits coverage to all nonpregnant 
     childless adults under such waiver for fiscal year 2010 (as 
     certified by the State and submitted to the Secretary by not 
     later than August 31, 2010, and without regard to whether any 
     such individual lost coverage during fiscal year 2010 and was 
     later provided child health assistance or other health 
     benefits coverage under the waiver in that fiscal year), 
     increased by the annual adjustment for fiscal year 2011 
     determined under section 2104(i)(2)(B)(i). The Secretary may 
     adjust the amount set aside under the preceding sentence, as 
     necessary, on the basis of the expenditure data for fiscal 
     year 2010 reported by States on CMS Form 64 or CMS Form 21 
     not later than November 30, 2010, but in no case shall the 
     Secretary adjust such amount after December 31, 2010.
       ``(B) No coverage for nonpregnant childless adults who were 
     not covered during fiscal year 2010.--
       ``(i) FMAP applied to expenditures.--The Secretary shall 
     pay the State for each quarter of fiscal year 2011, from the 
     amount set aside under subparagraph (A), an amount equal to 
     the Federal medical assistance percentage (as determined 
     under section 1905(b) without regard to clause (4) of such 
     section) of expenditures in the quarter for providing child 
     health assistance or other health benefits coverage to a 
     nonpregnant childless adult but only if such adult was 
     enrolled in the State program under this title during fiscal 
     year 2010 (without regard to whether the individual lost 
     coverage during fiscal year 2010 and was reenrolled in that 
     fiscal year or in fiscal year 2011).
       ``(ii) Federal payments limited to amount of block grant 
     set-aside.--No payments shall be made to a State for 
     expenditures described in this subparagraph after the total 
     amount set aside under subparagraph (A) for fiscal year 2011 
     has been paid to the State.
       ``(4) State option to apply for medicaid waiver to continue 
     coverage for nonpregnant childless adults.--
       ``(A) In general.--Each State for which coverage under an 
     applicable existing waiver is terminated under paragraph 
     (2)(A) may submit, not later than June 30, 2011, an 
     application to the Secretary for a waiver under section 1115 
     of the State plan under title XIX to provide medical 
     assistance to a nonpregnant childless adult whose coverage is 
     so terminated (in this subsection referred to as a ``Medicaid 
     nonpregnant childless adults waiver'').
       ``(B) Deadline for approval.--The Secretary shall make a 
     decision to approve or deny an application for a Medicaid 
     nonpregnant childless adults waiver submitted under 
     subparagraph (A) within 90 days of the date of the submission 
     of the application. If no decision has been made by the 
     Secretary as of September 30, 2011, on the application of a 
     State for a Medicaid nonpregnant childless adults waiver that 
     was submitted to the Secretary by June 30, 2011, the 
     application shall be deemed approved.
       ``(C) Standard for budget neutrality.--The budget 
     neutrality requirement applicable with respect to 
     expenditures for medical assistance under a Medicaid 
     nonpregnant childless adults waiver shall--
       ``(i) in the case of fiscal year 2012, allow expenditures 
     for medical assistance under title XIX for all such adults to 
     not exceed the total amount of payments made to the State 
     under paragraph (3)(B) for fiscal year 2011, increased by the 
     percentage increase (if any) in the projected nominal per 
     capita amount of National Health Expenditures for calendar 
     year 2012 over calendar year 2011, as most recently published 
     by the Secretary; and
       ``(ii) in the case of any succeeding fiscal year, allow 
     such expenditures to not exceed the amount in effect under 
     this subparagraph for the preceding fiscal year, increased by 
     the percentage increase (if any) in the projected nominal per 
     capita amount of National Health Expenditures for the 
     calendar year that begins during the fiscal year involved 
     over the preceding calendar year, as most recently published 
     by the Secretary.
       ``(5) Special rules.--Notwithstanding the amendments made 
     by the Children's Health Insurance Program Reauthorization 
     Act of 2007:
       ``(A) Section 2104(e)(4)(C)(i) shall be applied by 
     substituting `2011' for `2009'.
       ``(B) Section 2104(j)(1)(B)(ii)(V) shall be applied by 
     substituting `2011' for `2009' each place it appears.
                                 ______
                                 
  SA 2602. Mr. KERRY (for himself, Mr. Bingaman, Mr. Sanders, Mr. 
Casey, Mr. Menendez, Mr. Durbin, Mr. Reed, Mr. Brown, Mr. Whitehouse, 
and Mr. Biden) submitted an amendment intended to be proposed to 
amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. Grassley, 
Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to amend the 
Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; as follows:

       At the end, add the following:

TITLE IX--IMPROVED INCENTIVES TO ENROLL UNINSURED CHILDREN AND PROTECT 
                       EXISTING COVERAGE OPTIONS

     SEC. 901. IMPROVEMENTS TO THE INCENTIVE BONUSES FOR STATES.

       Paragraphs (2) and (3) of section 2104(j), as added by 
     section 105(a), are amended to read as follows:
       ``(2) Payments to states increasing enrollment.--
       ``(A) In general.--Subject to paragraph (3)(D), with 
     respect to each of fiscal years 2008 through 2012, the 
     Secretary shall make payments to States from the Incentive 
     Pool determined under subparagraph (B).
       ``(B) Amount.--The amount described in this subparagraph 
     for a State for a fiscal year is equal to the sum of the 
     following amounts:
       ``(i) First tier above baseline medicaid enrollees.--An 
     amount equal to the number of first tier above baseline child 
     enrollees (as determined under paragraph (3)(A)(i)) under 
     title XIX for the State and fiscal year multiplied by 6 
     percent of the projected per capita State Medicaid 
     expenditures (as determined under paragraph (3)(B)) for the 
     State and fiscal year under title XIX.
       ``(ii) Second tier above baseline medicaid enrollees.--An 
     amount equal to the number of second tier above baseline 
     child enrollees (as determined under paragraph (3)(A)(ii)) 
     under title XIX for the State and fiscal year multiplied by 
     35 percent of the projected per capita State Medicaid 
     expenditures (as determined under paragraph (3)(B)) for the 
     State and fiscal year under title XIX.
       ``(iii) Third tier above baseline medicaid enrollees.--An 
     amount equal to the number of third tier above baseline child 
     enrollees (as determined under paragraph (3)(A)(iii)) under 
     title XIX for the State and fiscal year multiplied by 90 
     percent of the projected per capita State Medicaid 
     expenditures (as determined under paragraph (3)(B)) for the 
     State and fiscal year under title XIX.
       ``(3) Definitions and rules.--For purposes of this 
     paragraph and paragraph (2):
       ``(A) Tiers above baseline.--
       ``(i) First tier above baseline child enrollees.--The 
     number of first tier above baseline child enrollees for a 
     State for a fiscal year under title XIX is equal to the 
     number (if any, as determined by the Secretary) by which--

       ``(I) the monthly average unduplicated number of qualifying 
     children (as defined in

[[Page 22116]]

     subparagraph (C)) enrolled during the fiscal year under the 
     State plan under title XIX; exceeds
       ``(II) the baseline number of enrollees described in clause 
     (iv) for the State and fiscal year under title XIX, 
     respectively;

     but not to exceed 2 percent of the baseline number of 
     enrollees described in subclause (II).
       ``(ii) Second tier above baseline child enrollees.--The 
     number of second tier above baseline child enrollees for a 
     State for a fiscal year under title XIX is equal to the 
     number (if any, as determined by the Secretary) by which--

       ``(I) the monthly average unduplicated number of qualifying 
     children (as defined in subparagraph (C)) enrolled during the 
     fiscal year under title XIX, as described in clause (i)(I); 
     exceeds
       ``(II) the sum of the baseline number of child enrollees 
     described in clause (iv) for the State and fiscal year under 
     title XIX, as described in clause (i)(II), and the maximum 
     number of first tier above baseline child enrollees for the 
     State and fiscal year under title XIX, as determined under 
     clause (i),

     but not to exceed 7 percent of the baseline number of 
     enrollees described in clause (i)(II), reduced by the maximum 
     number of first tier above baseline child enrollees for the 
     State and fiscal year under title XIX, as determined under 
     clause (i).
       ``(iii) Third tier above baseline child enrollees.--The 
     number of second tier above baseline child enrollees for a 
     State for a fiscal year under title XIX is equal to the 
     number (if any, as determined by the Secretary) by which--

       ``(I) the monthly average unduplicated number of qualifying 
     children (as defined in subparagraph (C)) enrolled during the 
     fiscal year under title XIX, as described in clause (i)(I); 
     exceeds
       ``(II) the sum of the baseline number of child enrollees 
     described in clause (iv) for the State and fiscal year under 
     title XIX, as described in clause (i)(II), the maximum number 
     of first tier above baseline child enrollees for the State 
     and fiscal year under title XIX, as determined under clause 
     (i), and the maximum number of second tier above baseline 
     child enrollees for the State and fiscal year under title 
     XIX, as determined under clause (ii).

       ``(iv) Baseline number of child enrollees.--The baseline 
     number of child enrollees for a State under title XIX--

       ``(I) for fiscal year 2008 is equal to the monthly average 
     unduplicated number of qualifying children enrolled in the 
     State plan under title XIX, respectively, during fiscal year 
     2007 increased by the population growth for children in that 
     State for the year ending on June 30, 2006 (as estimated by 
     the Bureau of the Census) plus 1 percentage point; or
       ``(II) for a subsequent fiscal year is equal to the 
     baseline number of child enrollees for the State for the 
     previous fiscal year under this title or title XIX, 
     respectively, increased by the population growth for children 
     in that State for the year ending on June 30 before the 
     beginning of the fiscal year (as estimated by the Bureau of 
     the Census) plus 1 percentage point.

       ``(B) Projected per capita state medicaid expenditures.--
     For purposes of subparagraph (A), the projected per capita 
     State Medicaid expenditures for a State and fiscal year under 
     title XIX is equal to the average per capita expenditures 
     (including both State and Federal financial participation) 
     for children under the State plan under such title, including 
     under waivers but not including such children eligible for 
     assistance by virtue of the receipt of benefits under title 
     XVI, for the most recent fiscal year for which actual data 
     are available (as determined by the Secretary), increased 
     (for each subsequent fiscal year up to and including the 
     fiscal year involved) by the annual percentage increase in 
     per capita amount of National Health Expenditures (as 
     estimated by the Secretary) for the calendar year in which 
     the respective subsequent fiscal year ends and multiplied by 
     a State matching percentage equal to 100 percent minus the 
     Federal medical assistance percentage (as defined in section 
     1905(b)) for the fiscal year involved.
       ``(C) Qualifying children defined.--For purposes of this 
     subsection, the term `qualifying children' means, with 
     respect to this title or title XIX, children who meet the 
     eligibility criteria (including income, categorical 
     eligibility, age, and immigration status criteria) in effect 
     as of July 1, 2007, for enrollment under this title or title 
     XIX, respectively, taking into account criteria applied as of 
     such date under this title or title XIX, respectively, 
     pursuant to a waiver under section 1115.''.

     SEC. 902. OPTIONAL COVERAGE OF OLDER CHILDREN UNDER MEDICAID 
                   AND CHIP.

       (a) Medicaid.--
       (1) In general.--Section 1902(l)(1)(D) (42 U.S.C. 
     1396a(l)(1)(D)) is amended by striking ``but have not 
     attained 19 years of age'' and inserting ``but is under 19 
     years of age (or, at the option of a State, under such higher 
     age, not to exceed 21 years of age, as the State may 
     elect)''.
       (2) Conforming amendments.--
       (A) Section 1902(e)(3)(A) (42 U.S.C. 1396a(e)(3)(A)) is 
     amended by striking ``18 years of age or younger'' and 
     inserting ``under 19 years of age (or under such higher age 
     as the State has elected under subsection (l)(1)(D))'' after 
     ``18 years of age''.
       (B) Section 1902(e)(12) (42 U.S.C. 1396a(e)(12)) is amended 
     by inserting ``or such higher age as the State has elected 
     under subsection (l)(1)(D)'' after ``19 years of age''.
       (C) Section 1905(a) (42 U.S.C. 1396d(a)) is amended, in 
     clause (i), by inserting ``or under such higher age as the 
     State has elected under subsection (l)(1)(D)'' after ``as the 
     State may choose''.
       (D) Section 1920A(b)(1) (42 U.S.C. 1396r-1a(b)(1)) is 
     amended by inserting ``or under such higher age as the State 
     has elected under section 1902(l)(1)(D)'' after ``19 years of 
     age''.
       (E) Section 1928(h)(1) (42 U.S.C. 1396s(h)(1)) is amended 
     by striking ``18 years of age or younger'' and inserting 
     ``under 19 years of age or under such higher age as the State 
     has elected under section 1902(l)(1)(D)''.
       (F) Section 1932(a)(2)(A) (42 U.S.C. 1396u-2(a)(2)(A)) is 
     amended by inserting ``(or under such higher age as the State 
     has elected under section 1902(l)(1)(D))'' after ``19 years 
     of age''.
       (b) Title XXI.--Section 2110(c)(1) (42 U.S.C. 1397jj(c)(1)) 
     is amended by inserting ``(or, at the option of the State, 
     under such higher age as the State has elected under section 
     1902(l)(1)(D))''.

     SEC. 903. MODERNIZING TRANSITIONAL MEDICAID.

       (a) Four-Year Extension.--
       (1) In general.--Sections 1902(e)(1)(B) and 1925(f) (42 
     U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are each amended by 
     striking ``September 30, 2003'' and inserting ``September 30, 
     2011''.
       (2) Effective date.--The amendments made by this subsection 
     shall take effect on October 1, 2007.
       (b) State Option of Initial 12-Month Eligibility.--Section 
     1925 (42 U.S.C. 1396r-6) is amended--
       (1) in subsection (a)(1), by inserting ``but subject to 
     paragraph (5)'' after ``Notwithstanding any other provision 
     of this title'';
       (2) by adding at the end of subsection (a) the following:
       ``(5) Option of 12-month initial eligibility period.--A 
     State may elect to treat any reference in this subsection to 
     a 6-month period (or 6 months) as a reference to a 12-month 
     period (or 12 months). In the case of such an election, 
     subsection (b) shall not apply.''; and
       (3) in subsection (b)(1), by inserting ``but subject to 
     subsection (a)(5)'' after ``Notwithstanding any other 
     provision of this title''.
       (c) Removal of Requirement for Previous Receipt of Medical 
     Assistance.--Section 1925(a)(1) (42 U.S.C. 1396r-6(a)(1)), as 
     amended by subsection (b)(1), is further amended--
       (1) by inserting ``subparagraph (B) and'' before 
     ``paragraph (5)'';
       (2) by redesignating the matter after ``Requirement.--'' as 
     a subparagraph (A) with the heading ``In general.--'' and 
     with the same indentation as subparagraph (B) (as added by 
     paragraph (3)); and
       (3) by adding at the end the following:
       ``(B) State option to waive requirement for 3 months before 
     receipt of medical assistance.--A State may, at its option, 
     elect also to apply subparagraph (A) in the case of a family 
     that was receiving such aid for fewer than three months or 
     that had applied for and was eligible for such aid for fewer 
     than 3 months during the 6 immediately preceding months 
     described in such subparagraph.''.
       (d) CMS Report on Enrollment and Participation Rates Under 
     TMA.--Section 1925 (42 U.S.C. 1396r-6), as amended by this 
     section, is further amended by adding at the end the 
     following new subsection:
       ``(g) Collection and Reporting of Participation 
     Information.--
       ``(1) Collection of information from states.--Each State 
     shall collect and submit to the Secretary (and make publicly 
     available), in a format specified by the Secretary, 
     information on average monthly enrollment and average monthly 
     participation rates for adults and children under this 
     section and of the number and percentage of children who 
     become ineligible for medical assistance under this section 
     whose medical assistance is continued under another 
     eligibility category or who are enrolled under the State's 
     child health plan under title XXI. Such information shall be 
     submitted at the same time and frequency in which other 
     enrollment information under this title is submitted to the 
     Secretary.
       ``(2) Annual reports to congress.--Using the information 
     submitted under paragraph (1), the Secretary shall submit to 
     Congress annual reports concerning enrollment and 
     participation rates described in such paragraph.''.
       (e) Effective Date.--The amendments made by subsections (b) 
     through (d) shall take effect on the date of the enactment of 
     this Act.

     SEC. 904. REPEAL OF TOP INCOME TAX RATE REDUCTION FOR 
                   TAXPAYERS WITH $1,000,000 OR MORE OF TAXABLE 
                   INCOME.

       (a) In General.--Section 1(i) of the Internal Revenue Code 
     of 1986 (relating to rate reductions) is amended by 
     redesignating paragraph (3) as paragraph (4) and by inserting 
     after paragraph (2) the following new paragraph:

[[Page 22117]]

       ``(3) Exception for taxpayers with taxable income of 
     $1,000,000, or more.--
       ``(A) In general.--Notwithstanding paragraph (2), in the 
     case of taxable years beginning in a calender year after 
     2007, the last item in the fourth column of the table under 
     paragraph (2) shall be applied by substituting `39.6%' for 
     `35.0%' with respect to taxable income in excess of 
     $1,000,000 (one-half of such amount in the case of taxpayers 
     to whom subsection (d) applies).
       ``(B) Inflation adjustment.--In the case of the dollar 
     amount under subparagraph (A), paragraph (1)(C) shall be 
     applied by substituting `2008' for `2003' and `2007' for 
     `2002'.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.
       (c) Application of Egtrra Sunset.--The amendment made by 
     this section shall be subject to title IX of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001 to the same 
     extent and in the same manner as the provision of such Act to 
     which such amendment relates.
                                 ______
                                 
  SA 2603. Mrs. HUTCHISON submitted an amendment intended to be 
proposed to amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. 
Grassley, Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to 
amend the Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end of title I add the following:

     SEC. 112. FUNDING PRIORITY FOR STATES WITH AN EFFECTIVE 
                   INCOME ELIGIBILITY LEVEL FOR CHILDREN THAT DOES 
                   NOT EXCEED 200 PERCENT OF THE POVERTY LINE.

       (a) Priority for Determination of Fiscal Year 2008 
     Allotments.--Subparagraph (D) of section 2104(i)(2) (42 
     U.S.C. 1397dd(i)(2))), as added by section 102, is amended to 
     read as follows:
       ``(D) Priority and proration rules.--If, after the 
     application of this paragraph without regard to this 
     subparagraph, the sum of the State allotments determined 
     under this paragraph for fiscal year 2008 exceeds the 
     available national allotment for fiscal year 2008, the 
     Secretary shall--
       ``(i) first, provide the allotments for all subsection (b) 
     States for which the effective income eligibility level for 
     child health assistance for targeted low-income children 
     under the State child health plan does not exceed 200 percent 
     of the poverty line (and if, the sum of such allotments 
     exceeds the available national allotment for fiscal year 
     2008, reduce each such allotment on a proportional basis); 
     and
       ``(ii) only to the extent there are any amounts remaining 
     available for allotment from the available national allotment 
     for fiscal year 2008 after the application of clause (i), 
     provide, on a proportional basis, allotments for any other 
     subsection (b) States.''.
       (b) Priority for Determination of Fiscal Year 2009 Through 
     2012 Allotments.--Subparagraph (A) of section 2104(i)(3) (42 
     U.S.C. 1397dd(i)(3)), as so added, is amended to read as 
     follows:
       ``(A) In general.--If the sum of the State allotments 
     determined under paragraph (1)(A)(ii) for any of fiscal years 
     2009 through 2011 exceeds the available national allotment 
     for the fiscal year, the Secretary shall--
       ``(i) first, allot to each subsection (b) State for which 
     the effective income eligibility level for child health 
     assistance for targeted low-income children under the State 
     child health plan does not exceed 200 percent of the poverty 
     line from the available national allotment for the fiscal 
     year an amount equal to the product of--

       ``(I) the available national allotment for the fiscal year; 
     and
       ``(II) the percentage equal to the sum of the State 
     allotment factors for the fiscal year determined under 
     paragraph (4) with respect to the State; and

       ``(ii) only to the extent there are any amounts remaining 
     available for allotment from the available national allotment 
     for the fiscal year after the application of clause (i), 
     determine the allotments for any other subsection (b) States 
     in the same manner as how allotments are determined under 
     clause (i).''.
       (c) CHIP Contingency Fund.--Section 2104(k)(3) (42 U.S.C. 
     1397dd(k)(3)), as added by section 108, is amended by adding 
     at the end the following new subparagraph:
       ``(I) Priority for states with an effective income 
     eligibility level for children that does not exceed 200 
     percent of the poverty line.--Notwithstanding subparagraph 
     (E), the Secretary shall make monthly payments from the 
     Fund--
       ``(i) first, to those States that are determined to be 
     eligible States with respect to a month and for which the 
     effective income eligibility level for child health 
     assistance for targeted low-income children under the State 
     child health plan does not exceed 200 percent of the poverty 
     line (and, if the sum of such payments exceed the amount in 
     the Fund, reduced on a proportional basis); and
       ``(ii) only to the extent that there are any amounts 
     remaining in the Fund for a month, to any other States that 
     are determined to be eligible States with respect to the 
     month (and reduced, if necessary, on a proportional 
     basis).''.
                                 ______
                                 
  SA 2604. Mrs. HUTCHISON submitted an amendment intended to be 
proposed to amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. 
Grassley, Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to 
amend the Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 142, strike lines 14 through 23 and insert the 
     following:
       ``(J) No effect on previously approved premium assistance 
     programs or pending waivers for such programs.--Nothing in 
     this paragraph shall be construed as--
       ``(i) limiting the authority of a State to offer premium 
     assistance under section 1906, a waiver described in 
     paragraph (2)(B) or (3), a waiver approved under section 
     1115, or other authority in effect prior to the date of 
     enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2007; or
       ``(ii) limiting the authority of a State to offer premium 
     assistance under a waiver pending approval by the Secretary 
     prior to such date of enactment that is approved on or after 
     such date of enactment.''.
                                 ______
                                 
  SA 2605. Mr. DeMINT submitted an amendment intended to be proposed by 
him to the bill S. 1, to provide greater transparency in the 
legislative process; which was ordered to lie on the table; as follows:

       Strike subtitle B of title V of the amendment and insert 
     the following:

    Subtitle B--Earmark, Conference, and Conflict of Interest Reform

     SEC. 521. OUT OF SCOPE MATTERS IN CONFERENCE REPORTS.

       (a) In General.--A point of order may be made by any 
     Senator against any item contained in a conference report 
     that includes or consists of any matter not committed to the 
     conferees by either House. The point of order may be made and 
     disposed of separately for each item in violation of this 
     section.
       (b) Disposition.--If the point of order raised against an 
     item in a conference report under subsection (a) is 
     sustained--
       (1) the matter in such conference report shall be stricken; 
     and
       (2) when all other points of order under this section have 
     been disposed of--
       (A) the Senate shall proceed to consider the question of 
     whether the Senate should recede from its amendment to the 
     House bill, or its disagreement to the amendment of the 
     House, and concur with a further amendment, which further 
     amendment shall consist of only that portion of the 
     conference report that has not been stricken (any 
     modification of total amounts appropriated necessary to 
     reflect the deletion of the matter struck from the conference 
     report shall be made);
       (B) the question shall be debatable; and
       (C) no further amendment shall be in order.
       (c) Limitation.--
       (1) In general.--In this section, the term ``matter not 
     committed to the conferees by either House'' shall include 
     any item which consists of a specific provision containing a 
     specific level of funding for any specific account, specific 
     program, specific project, or specific activity, when no such 
     specific funding was provided for such specific account, 
     specific program, specific project, or specific activity in 
     the measure originally committed to the conferees by either 
     House.
       (2) Rule xxviii.--For the purpose of rule XXVIII of the 
     Standing Rules of the Senate, the term ``matter not 
     committed'' shall include any item which consists of a 
     specific provision containing a specific level of funding for 
     any specific account, specific program, specific project, or 
     specific activity, when no such specific funding was provided 
     for such specific account, specific program, specific 
     project, or specific activity in the measure originally 
     committed to the conferees by either House.
       (d) Supermajority Waiver and Appeal.--This section may be 
     waived or suspended in the Senate only by an affirmative vote 
     of \3/5\ of the Members, duly chosen and sworn. An 
     affirmative vote of \3/5\ of the Members of the Senate, duly 
     chosen and sworn, shall be required in the Senate to sustain 
     an appeal of the ruling of the Chair on a point of order 
     raised under this section.

     SEC. 522. CONGRESSIONAL EARMARK REFORM.

       The Standing Rules of the Senate are amended by adding at 
     the end the following:

                              ``RULE XLIV

                               ``earmarks

       ``1. It shall not be in order to consider--
       ``(a) a bill or joint resolution reported by a committee 
     unless the report includes a list, which shall be made 
     available on the Internet in a searchable format to the 
     general public for at least 48 hours before consideration of 
     the bill or joint resolution, of congressional earmarks, 
     limited tax benefits, and limited tariff benefits in the bill 
     or in the report (and the name of any Member who submitted a 
     request to the committee for

[[Page 22118]]

     each respective item included in such list) or a statement 
     that the proposition contains no congressional earmarks, 
     limited tax benefits, or limited tariff benefits;
       ``(b) a bill or joint resolution not reported by a 
     committee unless the chairman of each committee of 
     jurisdiction has caused a list, which shall be made available 
     on the Internet in a searchable format to the general public 
     for at least 48 hours before consideration of the bill or 
     joint resolution, of congressional earmarks, limited tax 
     benefits, and limited tariff benefits in the bill (and the 
     name of any Member who submitted a request to the committee 
     for each respective item included in such list) or a 
     statement that the proposition contains no congressional 
     earmarks, limited tax benefits, or limited tariff benefits to 
     be printed in the Congressional Record prior to its 
     consideration; or
       ``(c) a conference report to accompany a bill or joint 
     resolution unless the joint explanatory statement prepared by 
     the managers on the part of the House and the managers on the 
     part of the Senate includes a list, which shall be made 
     available on the Internet in a searchable format to the 
     general public for at least 48 hours before consideration of 
     the conference report, of congressional earmarks, limited tax 
     benefits, and limited tariff benefits in the conference 
     report or joint statement (and the name of any Member, 
     Delegate, Resident Commissioner, or Senator who submitted a 
     request to the House or Senate committees of jurisdiction for 
     each respective item included in such list) or a statement 
     that the proposition contains no congressional earmarks, 
     limited tax benefits, or limited tariff benefits.
       ``2. For the purpose of this rule--
       ``(a) the term `congressional earmark' means a provision or 
     report language included primarily at the request of a 
     Member, Delegate, Resident Commissioner, or Senator 
     providing, authorizing or recommending a specific amount of 
     discretionary budget authority, credit authority, or other 
     spending authority for a contract, loan, loan guarantee, 
     grant, loan authority, or other expenditure with or to an 
     entity, or targeted to a specific State, locality or 
     Congressional district, other than through a statutory or 
     administrative formula-driven or competitive award process;
       ``(b) the term `limited tax benefit' means--
       ``(1) any revenue provision that--
       ``(A) provides a Federal tax deduction, credit, exclusion, 
     or preference to a particular beneficiary or limited group of 
     beneficiaries under the Internal Revenue Code of 1986; and
       ``(B) contains eligibility criteria that are not uniform in 
     application with respect to potential beneficiaries of such 
     provision; or
       ``(2) any Federal tax provision which provides one 
     beneficiary temporary or permanent transition relief from a 
     change to the Internal Revenue Code of 1986; and
       ``(c) the term `limited tariff benefit' means a provision 
     modifying the Harmonized Tariff Schedule of the United States 
     in a manner that benefits 10 or fewer entities.
       ``3. A Member may not condition the inclusion of language 
     to provide funding for a congressional earmark, a limited tax 
     benefit, or a limited tariff benefit in any bill or joint 
     resolution (or an accompanying report) or in any conference 
     report on a bill or joint resolution (including an 
     accompanying joint explanatory statement of managers) on any 
     vote cast by another Member, Delegate, or Resident 
     Commissioner.
       ``4. (a) A Member who requests a congressional earmark, a 
     limited tax benefit, or a limited tariff benefit in any bill 
     or joint resolution (or an accompanying report) or in any 
     conference report on a bill or joint resolution (or an 
     accompanying joint statement of managers) shall provide a 
     written statement to the chairman and ranking member of the 
     committee of jurisdiction, including--
       ``(1) the name of the Member;
       ``(2) in the case of a congressional earmark, the name and 
     address of the intended recipient or, if there is no 
     specifically intended recipient, the intended location of the 
     activity;
       ``(3) in the case of a limited tax or tariff benefit, 
     identification of the individual or entities reasonably 
     anticipated to benefit, to the extent known to the Member;
       ``(4) the purpose of such congressional earmark or limited 
     tax or tariff benefit; and
       ``(5) a certification that the Member or spouse has no 
     financial interest in such congressional earmark or limited 
     tax or tariff benefit.
       ``(b) Each committee shall maintain the written statements 
     transmitted under subparagraph (a). The written statements 
     transmitted under subparagraph (a) for any congressional 
     earmarks, limited tax benefits, or limited tariff benefits 
     included in any measure reported by the committee or 
     conference report filed by the chairman of the committee or 
     any subcommittee thereof shall be published in a searchable 
     format on the committee's or subcommittee's website not later 
     than 48 hours after receipt on such information.
       ``5. It shall not be in order to consider any bill, 
     resolution, or conference report that contains an earmark 
     included in any classified portion of a report accompanying 
     the measure unless the bill, resolution, or conference report 
     includes to the greatest extent practicable, consistent with 
     the need to protect national security (including intelligence 
     sources and methods), in unclassified language, a general 
     program description, funding level, and the name of the 
     sponsor of that earmark.''.

     SEC. 523. PROHIBITION ON FINANCIAL GAIN FROM EARMARKS BY 
                   MEMBERS, IMMEDIATE FAMILY OF MEMBERS, STAFF OF 
                   MEMBERS, OR IMMEDIATE FAMILY OF STAFF OF 
                   MEMBERS.

       Rule XXXVII of the Standing Rules of the Senate is amended 
     by adding at the end the following:
       ``15. (a) No Member shall use his official position to 
     introduce, request, or otherwise aid the progress or passage 
     of a congressional earmark that will financially benefit or 
     otherwise further the pecuniary interest of such Member, the 
     spouse of such Member, the immediate family member of such 
     Member, any employee on the staff of such Member, the spouse 
     of an employee on the staff of such Member, or immediate 
     family member of an employee on the staff of such Member.
       ``(b) For purposes of this paragraph--
       ``(1) the term `immediate family member' means the son, 
     daughter, stepson, stepdaughter, son-in-law, daughter-in-law, 
     mother, father, stepmother, stepfather, mother-in-law, 
     father-in-law, brother, sister, stepbrother, or stepsister of 
     a Member or any employee on the staff (including staff in 
     personal, committee and leadership offices) of a Member; and
       ``(2) the term `congressional earmark' shall have the same 
     meaning as in rule XLIV of the Standing Rules of the 
     Senate.''.
                                 ______
                                 
  SA 2606. Mr. DODD submitted an amendment intended to be proposed by 
him to the bill H.R. 180, to require the identification of companies 
that conduct business operations in Sudan, to prohibit United States 
Government contracts with such companies, and for other purposes; which 
was ordered to lie on the table; as follows:

       Strike section 3 and insert the following:

     SEC. 3. TRANSPARENCY IN CAPITAL MARKETS.

       (a) List of Persons Directly Investing in or Conducting 
     Business Operations in Certain Sudanese Sectors.--
       (1) Publication of list.--Not later than 6 months after the 
     date of the enactment of this Act and every 6 months 
     thereafter, the President, in consultation with the Secretary 
     of the Treasury, the Secretary of Energy, the Secretary of 
     State, the Securities and Exchange Commission, and the heads 
     of other appropriate Federal departments and agencies, shall, 
     using only publicly available (including proprietary) 
     information, ensure publication in the Federal Register of a 
     list of each person, whether within or outside of the United 
     States, that, as of the date of the publication, has a direct 
     investment in, or is conducting, business operations in 
     Sudan's power production, mineral extraction, oil-related, or 
     military equipment industries, subject to paragraph (2). To 
     the extent practicable, the list shall include a description 
     of the investment made by each such person, including the 
     dollar value, intended purpose, and status of the investment, 
     as of the date of the publication.
       (2) Exceptions.--The President shall exclude a person from 
     the list if all of the business operations by reason of which 
     the person would otherwise be included on the list--
       (A) are conducted under contract directly and exclusively 
     with the regional government of southern Sudan;
       (B) are conducted under a license from the Office of 
     Foreign Assets Control, or are expressly exempted under 
     Federal law from the requirement to be conducted under such a 
     license;
       (C) consist of providing goods or services to marginalized 
     populations of Sudan;
       (D) consist of providing goods or services to an 
     internationally recognized peacekeeping force or humanitarian 
     organization;
       (E) consist of providing goods or services that are used 
     only to promote health or education;
       (F) are conducted by a person that has also undertaken 
     significant humanitarian efforts as described in section 
     10(14)(B);
       (G) have been voluntarily suspended; or
       (H) will cease within 1 year after the adoption of a formal 
     plan to cease the operations, as determined by the President.
       (3) Consideration of scrutinized business operations.--The 
     President should give serious consideration to including on 
     the list any company that has a scrutinized business 
     operation with respect to Sudan (within the meaning of 
     section 10(4)).
       (4) Prior notice to persons.--The President shall, at least 
     30 days before the list is published under paragraph (1), 
     notify each person that the President intends to include on 
     the list.
       (5) Delay in including persons on the list.--After 
     notifying a person under paragraph (4), the President may 
     delay including that person on the list for up to 60 days if 
     the President determines and certifies to the Congress that 
     the person has taken specific and effective actions to 
     terminate the involvement of the person in the activities 
     that resulted in the notification under paragraph (4).

[[Page 22119]]

       (6) Removal of persons from the list.--The President may 
     remove a person from the list before the next publication of 
     the list under paragraph (1) if the President determines that 
     the person no longer has a direct investment in or is no 
     longer conducting business operations as described in 
     paragraph (1).
       (7) Advance notice to congress.--Not later than 30 days 
     (or, in the case of the 1st such list, 60 days) before the 
     date by which paragraph (1) requires the list to be 
     published, the President shall submit to the Committees on 
     Financial Services, on Education and Labor, and on Oversight 
     and Government Reform of the House of Representatives and the 
     Committees on Banking, Housing, and Urban Affairs, on Health, 
     Education, Labor, and Pensions, and on Homeland Security and 
     Governmental Affairs of the Senate a copy of the list which 
     the President intends to publish under paragraph (1).
       (b) Publication on Website.--The President shall ensure 
     that the list is published on an appropriate, publicly 
     accessible Government website, updating the list as necessary 
     to take into account any person removed from the list under 
     subsection (a)(6).
       (c) Definition.--In this section, the term ``investment'' 
     has the meaning given the term in section 4(b)(3).
                                 ______
                                 
  SA 2607. Mr. DODD submitted an amendment intended to be proposed by 
him to the bill H.R. 180, to require the identification of companies 
that conduct business operations in Sudan, to prohibit United States 
Government contracts with such companies, and for other purposes; which 
was ordered to lie on the table; as follows:

       On page 13, between lines 4 and 5, insert the following:
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated $2,000,000 for the purposes of carrying 
     out this section.
                                 ______
                                 
  SA 2608. Ms. SNOWE (for herself, Mr. Bingaman, Mr. Cardin, Ms. 
Mikulski, and Ms. Collins) submitted an amendment intended to be 
proposed to amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. 
Grassley, Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to 
amend the Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       Beginning on page 213, strike line 13 and all that follows 
     through page 216, line 6 and insert the following:

     SEC. 608. REQUIRING COVERAGE OF DENTAL SERVICES.

       (a) Required Coverage of Dental Services.--
       (1) In general.--Section 2103 (42 U.S.C. 1397cc) is 
     amended--
       (A) in subsection (a), in the matter preceding paragraph 
     (1), by striking ``subsection (c)(5)'' and inserting 
     ``paragraphs (5) and (6) of subsection (c)''; and
       (B) in subsection (c)--
       (i) by redesignating paragraph (5) as paragraph (6); and
       (ii) by inserting after paragraph (4), the following new 
     paragraph:
       ``(5) Dental services.--The child health assistance 
     provided to a targeted low-income child (whether through 
     benchmark coverage or benchmark-equivalent coverage or 
     otherwise) shall include coverage of dental services 
     necessary to--
       ``(A) prevent disease and promote oral health;
       ``(B) restore oral structures to health and function; and
       ``(C) treat emergency conditions.''.
       (2) State child health plan requirement.--Section 
     2102(a)(7)(B) (42 U.S.C. 1397bb(a)(7)(B)) is amended by 
     inserting ``and services described in section 2103(c)(5)'' 
     after ``emergency services''.
       (3) Inclusion in basic services for benchmark-equivalent 
     coverage.--Section 2103(c)(1) (42 U.S.C. 1397cc(c)(1)) is 
     amended by adding at the end the following new subparagraph:
       ``(E) Services described in paragraph (5).''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to health benefits coverage provided on or after 
     October 1, 2008.
       (b) Denial of Deduction for Punitive Damages.--
       (1) Disallowance of deduction.--
       (A) In general.--Section 162(g) (relating to treble damage 
     payments under the antitrust laws) is amended--
       (i) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively,
       (ii) by striking ``If'' and inserting:
       ``(1) Treble damages.--If'', and
       (iii) by adding at the end the following new paragraph:
       ``(2) Punitive damages.--No deduction shall be allowed 
     under this chapter for any amount paid or incurred for 
     punitive damages in connection with any judgment in, or 
     settlement of, any action. This paragraph shall not apply to 
     punitive damages described in section 104(c).''.
       (B) Conforming amendment.--The heading for section 162(g) 
     is amended by inserting ``Or Punitive Damages'' after 
     ``Laws''.
       (2) Inclusion in income of punitive damages paid by insurer 
     or otherwise.--
       (A) In general.--Part II of subchapter B of chapter 1 
     (relating to items specifically included in gross income) is 
     amended by adding at the end the following new section:

     ``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR 
                   OTHERWISE.

       ``Gross income shall include any amount paid to or on 
     behalf of a taxpayer as insurance or otherwise by reason of 
     the taxpayer's liability (or agreement) to pay punitive 
     damages.''.
       (B) Reporting requirements.--Section 6041 (relating to 
     information at source) is amended by adding at the end the 
     following new subsection:
       ``(h) Section To Apply to Punitive Damages Compensation.--
     This section shall apply to payments by a person to or on 
     behalf of another person as insurance or otherwise by reason 
     of the other person's liability (or agreement) to pay 
     punitive damages.''.
       (C) Conforming amendment.--The table of sections for part 
     II of subchapter B of chapter 1 is amended by adding at the 
     end the following new item:

``Sec. 91. Punitive damages compensated by insurance or otherwise.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to damages paid or incurred on or after the date 
     of the enactment of this Act.
       (c) Denial of Deduction for Certain Fines, Penalties, and 
     Other Amounts.--
       (1) In general.--Subsection (f) of section 162 (relating to 
     trade or business expenses) is amended to read as follows:
       ``(f) Fines, Penalties, and Other Amounts.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     deduction otherwise allowable shall be allowed under this 
     chapter for any amount paid or incurred (whether by suit, 
     agreement, or otherwise) to, or at the direction of, a 
     government or entity described in paragraph (4) in relation 
     to the violation of any law or the investigation or inquiry 
     by such government or entity into the potential violation of 
     any law.
       ``(2) Exception for amounts constituting restitution or 
     paid to come into compliance with law.--Paragraph (1) shall 
     not apply to any amount which--
       ``(A) the taxpayer establishes--
       ``(i) constitutes restitution (including remediation of 
     property) for damage or harm caused by or which may be caused 
     by the violation of any law or the potential violation of any 
     law, or
       ``(ii) is paid to come into compliance with any law which 
     was violated or involved in the investigation or inquiry, and
       ``(B) is identified as restitution or as an amount paid to 
     come into compliance with the law, as the case may be, in the 
     court order or settlement agreement.

     A taxpayer shall not meet the requirements of subparagraph 
     (A) solely by reason an identification under subparagraph 
     (B). This paragraph shall not apply to any amount paid or 
     incurred as reimbursement to the government or entity for the 
     costs of any investigation or litigation.
       ``(3) Exception for amounts paid or incurred as the result 
     of certain court orders.--Paragraph (1) shall not apply to 
     any amount paid or incurred by order of a court in a suit in 
     which no government or entity described in paragraph (4) is a 
     party.
       ``(4) Certain nongovernmental regulatory entities.--An 
     entity is described in this paragraph if it is--
       ``(A) a nongovernmental entity which exercises self-
     regulatory powers (including imposing sanctions) in 
     connection with a qualified board or exchange (as defined in 
     section 1256(g)(7)), or
       ``(B) to the extent provided in regulations, a 
     nongovernmental entity which exercises self-regulatory powers 
     (including imposing sanctions) as part of performing an 
     essential governmental function.
       ``(5) Exception for taxes due.--Paragraph (1) shall not 
     apply to any amount paid or incurred as taxes due.''.
       (2) Reporting of deductible amounts.--
       (A) In general.--Subpart B of part III of subchapter A of 
     chapter 61 is amended by inserting after section 6050V the 
     following new section:

     ``SEC. 6050W. INFORMATION WITH RESPECT TO CERTAIN FINES, 
                   PENALTIES, AND OTHER AMOUNTS.

       ``(a) Requirement of Reporting.--
       ``(1) In general.--The appropriate official of any 
     government or entity which is described in section 162(f)(4) 
     which is involved in a suit or agreement described in 
     paragraph (2) shall make a return in such form as determined 
     by the Secretary setting forth--
       ``(A) the amount required to be paid as a result of the 
     suit or agreement to which paragraph (1) of section 162(f) 
     applies,
       ``(B) any amount required to be paid as a result of the 
     suit or agreement which constitutes restitution or 
     remediation of property, and
       ``(C) any amount required to be paid as a result of the 
     suit or agreement for the purpose of coming into compliance 
     with any law which was violated or involved in the 
     investigation or inquiry.
       ``(2) Suit or agreement described.--

[[Page 22120]]

       ``(A) In general.--A suit or agreement is described in this 
     paragraph if--
       ``(i) it is--

       ``(I) a suit with respect to a violation of any law over 
     which the government or entity has authority and with respect 
     to which there has been a court order, or
       ``(II) an agreement which is entered into with respect to a 
     violation of any law over which the government or entity has 
     authority, or with respect to an investigation or inquiry by 
     the government or entity into the potential violation of any 
     law over which such government or entity has authority, and

       ``(ii) the aggregate amount involved in all court orders 
     and agreements with respect to the violation, investigation, 
     or inquiry is $600 or more.
       ``(B) Adjustment of reporting threshold.--The Secretary may 
     adjust the $600 amount in subparagraph (A)(ii) as necessary 
     in order to ensure the efficient administration of the 
     internal revenue laws.
       ``(3) Time of filing.--The return required under this 
     subsection shall be filed not later than--
       ``(A) 30 days after the date on which a court order is 
     issued with respect to the suit or the date the agreement is 
     entered into, as the case may be, or
       ``(B) the date specified Secretary.
       ``(b) Statements To Be Furnished to Individuals Involved in 
     the Settlement.--Every person required to make a return under 
     subsection (a) shall furnish to each person who is a party to 
     the suit or agreement a written statement showing--
       ``(1) the name of the government or entity, and
       ``(2) the information supplied to the Secretary under 
     subsection (a)(1).
     The written statement required under the preceding sentence 
     shall be furnished to the person at the same time the 
     government or entity provides the Secretary with the 
     information required under subsection (a).
       ``(c) Appropriate Official Defined.--For purposes of this 
     section, the term `appropriate official' means the officer or 
     employee having control of the suit, investigation, or 
     inquiry or the person appropriately designated for purposes 
     of this section.''.
       (B) Conforming amendment.--The table of sections for 
     subpart B of part III of subchapter A of chapter 61 is 
     amended by inserting after the item relating to section 6050V 
     the following new item:

``Sec. 6050W. Information with respect to certain fines, penalties, and 
              other amounts.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred on or after the date 
     of the enactment of this Act, except that such amendments 
     shall not apply to amounts paid or incurred under any binding 
     order or agreement entered into before such date. Such 
     exception shall not apply to an order or agreement requiring 
     court approval unless the approval was obtained before such 
     date.
                                 ______
                                 
  SA 2609. Ms. SNOWE (for herself, Mr. Bingaman, Mr. Cardin, Ms. 
Mikulski, and Ms. Collins) submitted an amendment intended to be 
proposed to amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. 
Grassley, Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to 
amend the Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 216, between lines 6 and 7, insert the following:
       (b) Amount Appropriated for Dental Health Grants.--
     Notwithstanding subsection (e) of section 2114 of the Social 
     Security Act, as added by this section, out of any funds in 
     the Treasury not otherwise appropriated, there is 
     appropriated, $500,000,000 for the period of fiscal years 
     2008 through 2012, to remain available until expended, for 
     the purpose of awarding grants to States under such section. 
     Amounts appropriated under this subsection and paid under the 
     authority of such section 2114 shall be in addition to 
     amounts appropriated under section 2104 of the Social 
     Security Act (42 U.S.C. 1397dd) and paid to States in 
     accordance with section 2105 of such Act (42 U.S.C. 1397ee).
       (c) Denial of Deduction for Punitive Damages.--
       (1) Disallowance of deduction.--
       (A) In general.--Section 162(g) (relating to treble damage 
     payments under the antitrust laws) is amended--
       (i) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively,
       (ii) by striking ``If'' and inserting:
       ``(1) Treble damages.--If'', and
       (iii) by adding at the end the following new paragraph:
       ``(2) Punitive damages.--No deduction shall be allowed 
     under this chapter for any amount paid or incurred for 
     punitive damages in connection with any judgment in, or 
     settlement of, any action. This paragraph shall not apply to 
     punitive damages described in section 104(c).''.
       (B) Conforming amendment.--The heading for section 162(g) 
     is amended by inserting ``Or Punitive Damages'' after 
     ``Laws''.
       (2) Inclusion in income of punitive damages paid by insurer 
     or otherwise.--
       (A) In general.--Part II of subchapter B of chapter 1 
     (relating to items specifically included in gross income) is 
     amended by adding at the end the following new section:

     ``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR 
                   OTHERWISE.

       ``Gross income shall include any amount paid to or on 
     behalf of a taxpayer as insurance or otherwise by reason of 
     the taxpayer's liability (or agreement) to pay punitive 
     damages.''.
       (B) Reporting requirements.--Section 6041 (relating to 
     information at source) is amended by adding at the end the 
     following new subsection:
       ``(h) Section To Apply to Punitive Damages Compensation.--
     This section shall apply to payments by a person to or on 
     behalf of another person as insurance or otherwise by reason 
     of the other person's liability (or agreement) to pay 
     punitive damages.''.
       (C) Conforming amendment.--The table of sections for part 
     II of subchapter B of chapter 1 is amended by adding at the 
     end the following new item:

``Sec. 91. Punitive damages compensated by insurance or otherwise.''.

       (3) Effective date.--The amendments made by this subsection 
     shall apply to damages paid or incurred on or after the date 
     of the enactment of this Act.
       (d) Denial of Deduction for Certain Fines, Penalties, and 
     Other Amounts.--
       (1) In general.--Subsection (f) of section 162 (relating to 
     trade or business expenses) is amended to read as follows:
       ``(f) Fines, Penalties, and Other Amounts.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     deduction otherwise allowable shall be allowed under this 
     chapter for any amount paid or incurred (whether by suit, 
     agreement, or otherwise) to, or at the direction of, a 
     government or entity described in paragraph (4) in relation 
     to the violation of any law or the investigation or inquiry 
     by such government or entity into the potential violation of 
     any law.
       ``(2) Exception for amounts constituting restitution or 
     paid to come into compliance with law.--Paragraph (1) shall 
     not apply to any amount which--
       ``(A) the taxpayer establishes--
       ``(i) constitutes restitution (including remediation of 
     property) for damage or harm caused by or which may be caused 
     by the violation of any law or the potential violation of any 
     law, or
       ``(ii) is paid to come into compliance with any law which 
     was violated or involved in the investigation or inquiry, and
       ``(B) is identified as restitution or as an amount paid to 
     come into compliance with the law, as the case may be, in the 
     court order or settlement agreement.

     A taxpayer shall not meet the requirements of subparagraph 
     (A) solely by reason an identification under subparagraph 
     (B). This paragraph shall not apply to any amount paid or 
     incurred as reimbursement to the government or entity for the 
     costs of any investigation or litigation.
       ``(3) Exception for amounts paid or incurred as the result 
     of certain court orders.--Paragraph (1) shall not apply to 
     any amount paid or incurred by order of a court in a suit in 
     which no government or entity described in paragraph (4) is a 
     party.
       ``(4) Certain nongovernmental regulatory entities.--An 
     entity is described in this paragraph if it is--
       ``(A) a nongovernmental entity which exercises self-
     regulatory powers (including imposing sanctions) in 
     connection with a qualified board or exchange (as defined in 
     section 1256(g)(7)), or
       ``(B) to the extent provided in regulations, a 
     nongovernmental entity which exercises self-regulatory powers 
     (including imposing sanctions) as part of performing an 
     essential governmental function.
       ``(5) Exception for taxes due.--Paragraph (1) shall not 
     apply to any amount paid or incurred as taxes due.''.
       (2) Reporting of deductible amounts.--
       (A) In general.--Subpart B of part III of subchapter A of 
     chapter 61 is amended by inserting after section 6050V the 
     following new section:

     ``SEC. 6050W. INFORMATION WITH RESPECT TO CERTAIN FINES, 
                   PENALTIES, AND OTHER AMOUNTS.

       ``(a) Requirement of Reporting.--
       ``(1) In general.--The appropriate official of any 
     government or entity which is described in section 162(f)(4) 
     which is involved in a suit or agreement described in 
     paragraph (2) shall make a return in such form as determined 
     by the Secretary setting forth--
       ``(A) the amount required to be paid as a result of the 
     suit or agreement to which paragraph (1) of section 162(f) 
     applies,
       ``(B) any amount required to be paid as a result of the 
     suit or agreement which constitutes restitution or 
     remediation of property, and
       ``(C) any amount required to be paid as a result of the 
     suit or agreement for the purpose of coming into compliance 
     with any law which was violated or involved in the 
     investigation or inquiry.
       ``(2) Suit or agreement described.--
       ``(A) In general.--A suit or agreement is described in this 
     paragraph if--

[[Page 22121]]

       ``(i) it is--

       ``(I) a suit with respect to a violation of any law over 
     which the government or entity has authority and with respect 
     to which there has been a court order, or
       ``(II) an agreement which is entered into with respect to a 
     violation of any law over which the government or entity has 
     authority, or with respect to an investigation or inquiry by 
     the government or entity into the potential violation of any 
     law over which such government or entity has authority, and

       ``(ii) the aggregate amount involved in all court orders 
     and agreements with respect to the violation, investigation, 
     or inquiry is $600 or more.
       ``(B) Adjustment of reporting threshold.--The Secretary may 
     adjust the $600 amount in subparagraph (A)(ii) as necessary 
     in order to ensure the efficient administration of the 
     internal revenue laws.
       ``(3) Time of filing.--The return required under this 
     subsection shall be filed not later than--
       ``(A) 30 days after the date on which a court order is 
     issued with respect to the suit or the date the agreement is 
     entered into, as the case may be, or
       ``(B) the date specified Secretary.
       ``(b) Statements To Be Furnished to Individuals Involved in 
     the Settlement.--Every person required to make a return under 
     subsection (a) shall furnish to each person who is a party to 
     the suit or agreement a written statement showing--
       ``(1) the name of the government or entity, and
       ``(2) the information supplied to the Secretary under 
     subsection (a)(1).

     The written statement required under the preceding sentence 
     shall be furnished to the person at the same time the 
     government or entity provides the Secretary with the 
     information required under subsection (a).
       ``(c) Appropriate Official Defined.--For purposes of this 
     section, the term `appropriate official' means the officer or 
     employee having control of the suit, investigation, or 
     inquiry or the person appropriately designated for purposes 
     of this section.''.
       (B) Conforming amendment.--The table of sections for 
     subpart B of part III of subchapter A of chapter 61 is 
     amended by inserting after the item relating to section 6050V 
     the following new item:

``Sec. 6050W. Information with respect to certain fines, penalties, and 
              other amounts.''.

       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred on or after the date 
     of the enactment of this Act, except that such amendments 
     shall not apply to amounts paid or incurred under any binding 
     order or agreement entered into before such date. Such 
     exception shall not apply to an order or agreement requiring 
     court approval unless the approval was obtained before such 
     date.
                                 ______
                                 
  SA 2610. Mr. COBURN submitted an amendment intended to be proposed to 
amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. Grassley, 
Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to amend the 
Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       Beginning on page 133, strike line 4 and all that follows 
     through page 165, line 2, and insert the following:

     SEC. 401. IMPROVED STATE OPTION FOR OFFERING PREMIUM 
                   ASSISTANCE FOR COVERAGE THROUGH PRIVATE PLANS.

       (a) In General.--Section 2105(c) (42 U.S.C. 1397ee(c)), as 
     amended by section 301(c) is amended by adding at the end the 
     following:
       ``(10) Additional state option for offering premium 
     assistance.--
       ``(A) In general.--Subject to the succeeding provisions of 
     this paragraph, a State may elect to offer a premium 
     assistance subsidy (as defined in subparagraph (C)) for 
     qualified employer sponsored coverage (as defined in 
     subparagraph (B)) to all targeted low-income children who are 
     eligible for child health assistance under the plan and have 
     access to such coverage in accordance with the requirements 
     of this paragraph.
       ``(B) Qualified employer sponsored coverage.--
       ``(i) In general.--In this paragraph, the term `qualified 
     employer sponsored coverage' means a group health plan or 
     health insurance coverage offered through an employer that 
     is--

       ``(I) substantially equivalent to the benefits coverage in 
     a benchmark benefit package described in section 2103(b) or 
     benchmark-equivalent coverage that meets the requirements of 
     section 2103(a)(2);
       ``(II) made similarly available to all of the employer's 
     employees and for which the employer makes a contribution to 
     the premium that is not less for employees receiving a 
     premium assistance subsidy under any option available under 
     the State child health plan under this title or the State 
     plan under title XIX to provide such assistance than the 
     employer contribution provided for all other employees; and
       ``(III) cost-effective, as determined under clause (ii).

       ``(ii) Cost-effectiveness.--A group health plan or health 
     insurance coverage offered through an employer shall be 
     considered to be cost-effective if--

       ``(I) the marginal premium cost to purchase family coverage 
     through the employer is less than the State cost of providing 
     child health assistance through the State child health plan 
     for all the children in the family who are targeted low-
     income children; or
       ``(II) the marginal premium cost between individual 
     coverage and purchasing family coverage through the employer 
     is not greater than 175 percent of the cost to the State to 
     provide child health assistance through the State child 
     health plan for a targeted low-income child.

       ``(iii) High deductible health plans included.--The term 
     `qualified employer sponsored coverage' includes a high 
     deductible health plan (as defined in section 223(c)(2) of 
     the Internal Revenue Code of 1986) purchased through a health 
     savings account (as defined under section 223(d) of such 
     Code).
       ``(C) Premium assistance subsidy.--
       ``(i) In general.--In this paragraph, the term `premium 
     assistance subsidy' means, with respect to a targeted low-
     income child, the amount equal to the difference between the 
     employee contribution required for enrollment only of the 
     employee under qualified employer sponsored coverage and the 
     employee contribution required for enrollment of the employee 
     and the child in such coverage, less any applicable premium 
     cost-sharing applied under the State child health plan, 
     subject to the annual aggregate cost-sharing limit applied 
     under section 2103(e)(3)(B).
       ``(ii) State payment option.--Subject to clause (iii), a 
     State may provide a premium assistance subsidy directly to an 
     employer or as reimbursement to an employee for out-of-pocket 
     expenditures.
       ``(iii) Requirement for direct payment to employee.--A 
     State shall not pay a premium assistance subsidy directly to 
     the employee, unless the State has established procedures to 
     ensure that the targeted low-income child on whose behalf 
     such payments are made are actually enrolled in the qualified 
     employer sponsored coverage.
       ``(iv) Treatment as child health assistance.--Expenditures 
     for the provision of premium assistance subsidies shall be 
     considered child health assistance described in paragraph 
     (1)(C) of subsection (a) for purposes of making payments 
     under that subsection.
       ``(v) State option to require acceptance of subsidy.--A 
     State may condition the provision of child health assistance 
     under the State child health plan for a targeted low-income 
     child on the receipt of a premium assistance subsidy for 
     enrollment in qualified employer sponsored coverage if the 
     State determines the provision of such a subsidy to be more 
     cost-effective in accordance with subparagraph (B)(ii).
       ``(vi) Not treated as income.--Notwithstanding any other 
     provision of law, a premium assistance subsidy provided in 
     accordance with this paragraph shall not be treated as income 
     to the child or the parent of the child for whom such subsidy 
     is provided.
       ``(D) No requirement to provide supplemental coverage for 
     benefits and additional cost-sharing protection provided 
     under the state child health plan.--
       ``(i) In general.--A State that elects the option to 
     provide a premium assistance subsidy under this paragraph 
     shall not be required to provide a targeted low-income child 
     enrolled in qualified employer sponsored coverage with 
     supplemental coverage for items or services that are not 
     covered, or are only partially covered, under the qualified 
     employer sponsored coverage or cost-sharing protection other 
     than the protection required under section 2103(e)(3)(B).
       ``(ii) Notice of cost-sharing requirements.--A State shall 
     provide a targeted low-income child or the parent of such a 
     child (as appropriate) who is provided with a premium 
     assistance subsidy in accordance with this paragraph with 
     notice of the cost-sharing requirements and limitations 
     imposed under the qualified employer sponsored coverage in 
     which the child is enrolled upon the enrollment of the child 
     in such coverage and annually thereafter.
       ``(iii) Record keeping requirements.--A State may require a 
     parent of a targeted low-income child that is enrolled in 
     qualified employer-sponsored coverage to bear the 
     responsibility for keeping track of out-of-pocket 
     expenditures incurred for cost-sharing imposed under such 
     coverage and to notify the State when the limit on such 
     expenditures imposed under section 2103(e)(3)(B) has been 
     reached for a year from the effective date of enrollment for 
     such year.
       ``(iv) State option for reimbursement.--A State may 
     retroactively reimburse a parent of a targeted low-income 
     child for out-of-pocket expenditures incurred after reaching 
     the 5 percent cost-sharing limitation imposed under section 
     2103(e)(3)(B) for a year.
       ``(E) 6-month waiting period required.--A State shall 
     impose at least a 6-month waiting period from the time an 
     individual is enrolled in private health insurance prior to

[[Page 22122]]

     the provision of a premium assistance subsidy for a targeted 
     low-income child in accordance with this paragraph.
       ``(F) Non application of waiting period for enrollment in 
     the state medicaid plan or the state child health plan.--A 
     targeted low-income child provided a premium assistance 
     subsidy in accordance with this paragraph who loses 
     eligibility for such subsidy shall not be treated as having 
     been enrolled in private health insurance coverage for 
     purposes of applying any waiting period imposed under the 
     State child health plan or the State plan under title XIX for 
     the enrollment of the child under such plan.
       ``(G) Assurance of special enrollment period under group 
     health plans in case of eligibility for premium subsidy 
     assistance.--No payment shall be made under subsection (a) 
     for amounts expended for the provision of premium assistance 
     subsidies under this paragraph unless a State provides 
     assurances to the Secretary that the State has in effect laws 
     requiring a group health plan, a health insurance issuer 
     offering group health insurance coverage in connection with a 
     group health plan, and a self-funded health plan, to permit 
     an employee who is eligible, but not enrolled, for coverage 
     under the terms of the plan (or a child of such an employee 
     if the child is eligible, but not enrolled, for coverage 
     under such terms) to enroll for coverage under the terms of 
     the plan if the employee's child becomes eligible for a 
     premium assistance subsidy under this paragraph.
       ``(H) No effect on previously approved premium assistance 
     programs.--Nothing in this paragraph shall be construed as 
     limiting the authority of a State to offer premium assistance 
     under section 1906, a waiver described in paragraph (2)(B) or 
     (3), a waiver approved under section 1115, or other authority 
     in effect on June 28, 2007.
       ``(I) Notice of availability.--A State shall--
       ``(i) include on any application or enrollment form for 
     child health assistance a notice of the availability of 
     premium assistance subsidies for the enrollment of targeted 
     low-income children in qualified employer sponsored coverage;
       ``(ii) provide, as part of the application and enrollment 
     process under the State child health plan, information 
     describing the availability of such subsidies and how to 
     elect to obtain such a subsidy; and
       ``(iii) establish such other procedures as the State 
     determines necessary to ensure that parents are informed of 
     the availability of such subsidies under the State child 
     health plan.''.
       (b) Application to Medicaid.--Section 1906 (42 U.S.C. 
     1396e) is amended by inserting after subsection (c) the 
     following:
       ``(d) The provisions of section 2105(c)(10) shall apply to 
     a child who is eligible for medical assistance under the 
     State plan in the same manner as such provisions apply to a 
     targeted low-income child under a State child health plan 
     under title XXI. Section 1902(a)(34) shall not apply to a 
     child who is provided a premium assistance subsidy under the 
     State plan in accordance with the preceding sentence.''.
                                 ______
                                 
  SA 2611. Mr. COBURN submitted an amendment intended to be proposed to 
amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. Grassley, 
Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to amend the 
Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       Beginning on page 133, strike line 4 and all that follows 
     through page 165, line 2, and insert the following:

     SEC. 401. PREMIUM ASSISTANCE FOR HIGHER INCOME CHILDREN AND 
                   PREGNANT WOMEN WITH ACCESS TO EMPLOYER-
                   SPONSORED COVERAGE.

       (a) In General.--Section 2105(c) (42 U.S.C. 1397ee(c)), as 
     amended by section 301(c) is amended by adding at the end the 
     following:
       ``(10) Premium assistance.--
       ``(A) In general.--Beginning with fiscal year 2008, a State 
     may only provide child health assistance for a targeted low-
     income child or a pregnant woman whose family income exceeds 
     200 percent of the poverty line and who has access to 
     qualified employer sponsored coverage (as defined in 
     subparagraph (B)) through the provision of a premium 
     assistance subsidy in accordance with the requirements of 
     this paragraph. The enhanced FMAP under subsection (a)(1) 
     shall be zero with respect to any expenditures for providing 
     child health assistance for a targeted low-income child or 
     pregnant woman described in the preceding sentence in any 
     manner other than through the provision of such a subsidy.
       ``(B) Qualified employer sponsored coverage.--
       ``(i) In general.--In this paragraph, the term `qualified 
     employer sponsored coverage' means a group health plan or 
     health insurance coverage offered through an employer that 
     is--

       ``(I) substantially equivalent to the benefits coverage in 
     a benchmark benefit package described in section 2103(b) or 
     benchmark-equivalent coverage that meets the requirements of 
     section 2103(a)(2);
       ``(II) for which the employer contribution toward any 
     premium for such coverage is at least 50 percent (75 percent, 
     in the case of an employer with more than 50 employees);
       ``(III) made similarly available to all of the employer's 
     employees and for which the employer makes a contribution to 
     the premium that is not less for employees receiving a 
     premium assistance subsidy under any option available under 
     the State child health plan under this title or the State 
     plan under title XIX to provide such assistance than the 
     employer contribution provided for all other employees; and
       ``(IV) cost-effective, as determined under clause (ii).

       ``(ii) Cost-effectiveness.--A group health plan or health 
     insurance coverage offered through an employer shall be 
     considered to be cost-effective if--

       ``(I) the marginal premium cost to purchase family coverage 
     through the employer is less than the State cost of providing 
     child health assistance through the State child health plan 
     for all the children in the family who are targeted low-
     income children; or
       ``(II) the marginal premium cost between individual 
     coverage and purchasing family coverage through the employer 
     is not greater than 175 percent of the cost to the State to 
     provide child health assistance through the State child 
     health plan for a targeted low-income child.

       ``(iii) High deductible health plans included.--The term 
     `qualified employer sponsored coverage' includes a high 
     deductible health plan (as defined in section 223(c)(2) of 
     the Internal Revenue Code of 1986) purchased through a health 
     savings account (as defined under section 223(d) of such 
     Code).
       ``(C) Premium assistance subsidy.--
       ``(i) In general.--In this paragraph, the term `premium 
     assistance subsidy' means, with respect to a targeted low-
     income child, the amount equal to the difference between the 
     employee contribution required for enrollment only of the 
     employee under qualified employer sponsored coverage and the 
     employee contribution required for enrollment of the employee 
     and the child in such coverage, less any applicable premium 
     cost-sharing applied under the State child health plan, 
     subject to the annual aggregate cost-sharing limit applied 
     under section 2103(e)(3)(B).
       ``(ii) State payment option.--Subject to clause (iii), a 
     State may provide a premium assistance subsidy directly to an 
     employer or as reimbursement to an employee for out-of-pocket 
     expenditures.
       ``(iii) Requirement for direct payment to employee.--A 
     State shall not pay a premium assistance subsidy directly to 
     the employee, unless the State has established procedures to 
     ensure that the targeted low-income child on whose behalf 
     such payments are made are actually enrolled in the qualified 
     employer sponsored coverage.
       ``(iv) Treatment as child health assistance.--Expenditures 
     for the provision of premium assistance subsidies shall be 
     considered child health assistance described in paragraph 
     (1)(C) of subsection (a) for purposes of making payments 
     under that subsection.
       ``(v) State option to require acceptance of subsidy.--A 
     State may condition the provision of child health assistance 
     under the State child health plan for a targeted low-income 
     child on the receipt of a premium assistance subsidy for 
     enrollment in qualified employer sponsored coverage if the 
     State determines the provision of such a subsidy to be more 
     cost-effective in accordance with subparagraph (B)(ii).
       ``(vi) Not treated as income.--Notwithstanding any other 
     provision of law, a premium assistance subsidy provided in 
     accordance with this paragraph shall not be treated as income 
     to the child or the parent of the child for whom such subsidy 
     is provided.
       ``(D) No requirement to provide supplemental coverage for 
     benefits and additional cost-sharing protection provided 
     under the state child health plan.--
       ``(i) In general.--A State that elects the option to 
     provide a premium assistance subsidy under this paragraph 
     shall not be required to provide a targeted low-income child 
     enrolled in qualified employer sponsored coverage with 
     supplemental coverage for items or services that are not 
     covered, or are only partially covered, under the qualified 
     employer sponsored coverage or cost-sharing protection other 
     than the protection required under section 2103(e)(3)(B).
       ``(ii) Notice of cost-sharing requirements.--A State shall 
     provide a targeted low-income child or the parent of such a 
     child (as appropriate) who is provided with a premium 
     assistance subsidy in accordance with this paragraph with 
     notice of the cost-sharing requirements and limitations 
     imposed under the qualified employer sponsored coverage in 
     which the child is enrolled upon the enrollment of the child 
     in such coverage and annually thereafter.
       ``(iii) Record keeping requirements.--A State may require a 
     parent of a targeted low-income child that is enrolled in 
     qualified employer-sponsored coverage to bear the 
     responsibility for keeping track of out-of-pocket 
     expenditures incurred for cost-sharing imposed under such 
     coverage and to notify the State when the limit on such 
     expenditures imposed under section 2103(e)(3)(B) has been 
     reached for a year from the effective date of enrollment for 
     such year.

[[Page 22123]]

       ``(iv) State option for reimbursement.--A State may 
     retroactively reimburse a parent of a targeted low-income 
     child for out-of-pocket expenditures incurred after reaching 
     the 5 percent cost-sharing limitation imposed under section 
     2103(e)(3)(B) for a year.
       ``(E) 6-month waiting period required.--A State shall 
     impose at least a 6-month waiting period from the time an 
     individual is enrolled in private health insurance prior to 
     the provision of a premium assistance subsidy for a targeted 
     low-income child in accordance with this paragraph.
       ``(F) Non application of waiting period for enrollment in 
     the state medicaid plan or the state child health plan.--A 
     targeted low-income child provided a premium assistance 
     subsidy in accordance with this paragraph who loses 
     eligibility for such subsidy shall not be treated as having 
     been enrolled in private health insurance coverage for 
     purposes of applying any waiting period imposed under the 
     State child health plan or the State plan under title XIX for 
     the enrollment of the child under such plan.
       ``(G) Assurance of special enrollment period under group 
     health plans in case of eligibility for premium subsidy 
     assistance.--No payment shall be made under subsection (a) 
     for amounts expended for the provision of premium assistance 
     subsidies under this paragraph unless a State provides 
     assurances to the Secretary that the State has in effect laws 
     requiring a group health plan, a health insurance issuer 
     offering group health insurance coverage in connection with a 
     group health plan, and a self-funded health plan, to permit 
     an employee who is eligible, but not enrolled, for coverage 
     under the terms of the plan (or a child of such an employee 
     if the child is eligible, but not enrolled, for coverage 
     under such terms) to enroll for coverage under the terms of 
     the plan if the employee's child becomes eligible for a 
     premium assistance subsidy under this paragraph.
       ``(H) No effect on previously approved premium assistance 
     programs.--Nothing in this paragraph shall be construed as 
     limiting the authority of a State to offer premium assistance 
     under section 1906, a waiver described in paragraph (2)(B) or 
     (3), a waiver approved under section 1115, or other authority 
     in effect on June 28, 2007, for targeted low-income children 
     or pregnant women whose family income does not exceed 200 
     percent of the poverty line.
       ``(I) Notice of availability.--A State shall--
       ``(i) include on any application or enrollment form for 
     child health assistance a notice of the availability of 
     premium assistance subsidies for the enrollment of targeted 
     low-income children in qualified employer sponsored coverage 
     and the requirement to provide such subsidies to the 
     individuals described in subparagraph (A);
       ``(ii) provide, as part of the application and enrollment 
     process under the State child health plan, information 
     describing the availability of such subsidies and how to 
     elect to obtain such a subsidy, or if required, to obtain 
     such subsidies; and
       ``(iii) establish such other procedures as the State 
     determines necessary to ensure that parents are informed of 
     the availability of such subsidies under the State child 
     health plan.''.
       (b) Application to Medicaid.--Section 1906 (42 U.S.C. 
     1396e) is amended by inserting after subsection (c) the 
     following:
       ``(d) The provisions of section 2105(c)(10) shall apply to 
     a child who is eligible for medical assistance under the 
     State plan in the same manner as such provisions apply to a 
     targeted low-income child under a State child health plan 
     under title XXI. Section 1902(a)(34) shall not apply to a 
     child who is provided a premium assistance subsidy under the 
     State plan in accordance with the preceding sentence.''.
                                 ______
                                 
  SA 2612. Mr. STEVENS submitted an amendment intended to be proposed 
by him to the bill S. 1, to provide greater transparency in the 
legislative process; which was ordered to lie on the table; as follows:

       Strike section 544 (c) of the amendment and insert the 
     following:
       (c) Limited Flight Exception.--
       (1) In general.--Paragraph 1 of rule XXXV of the Standing 
     Rules of the Senate is amended by adding at the end the 
     following:
       ``(h) For purposes of subparagraph (c)(1) and rule XXXVIII, 
     if there is not more than 1 regularly scheduled flight daily 
     from a point in a Member's State to another point within that 
     Member's State, the Select Committee on Ethics may provide a 
     waiver to the requirements in subparagraph (c)(1) (except in 
     those cases where regular air service is not available 
     between 2 cities) if--
       ``(1) there is no appearance of or actual conflict of 
     interest; and
       ``(2) the Member has the trip approved by the committee at 
     a rate determined by the committee.

     In determining rates under clause (2), the committee may 
     consider Ethics Committee Interpretive Ruling 412.''.
       (2) Disclosure.--
       (A) Rules.--Paragraph 2 of rule XXXV of the Standing Rules 
     of the Senate is amended by adding at the end the following:
       ``(g) A Member, officer, or employee of the Senate shall--
       ``(1) disclose a flight on an aircraft that is not licensed 
     by the Federal Aviation Administration to operate for 
     compensation or hire, excluding a flight on an aircraft 
     owned, operated, or leased by a governmental entity, taken in 
     connection with the duties of the Member, officer, or 
     employee as an officeholder or Senate officer or employee; 
     and
       ``(2) with respect to the flight, file a report with the 
     Secretary of the Senate, including the date, destination, and 
     owner or lessee of the aircraft, the purpose of the trip, and 
     the persons on the trip, except for any person flying the 
     aircraft.

     This subparagraph shall apply to flights approved under 
     paragraph 1(h).''.
       (B) FECA.--Section 304(b) of the Federal Election Campaign 
     Act of 1971 (2 U.S.C. 434(b)) is amended--
       (i) by striking ``and'' at the end of paragraph (7);
       (ii) by striking the period at the end of paragraph (8) and 
     inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(9) in the case of a principal campaign committee of a 
     candidate (other than a candidate for election to the office 
     of President or Vice President), any flight taken by the 
     candidate (other than a flight designated to transport the 
     President, Vice President, or a candidate for election to the 
     office of President or Vice President) during the reporting 
     period on an aircraft that is not licensed by the Federal 
     Aviation Administration to operate for compensation or hire, 
     together with the following information:
       ``(A) The date of the flight.
       ``(B) The destination of the flight.
       ``(C) The owner or lessee of the aircraft.
       ``(D) The purpose of the flight.
       ``(E) The persons on the flight, except for any person 
     flying the aircraft.''.
       (C) Public availability.--Paragraph 2(e) of rule XXXV of 
     the Standing Rules of the Senate is amended to read as 
     follows:
       ``(e) The Secretary of the Senate shall make available to 
     the public all disclosures filed pursuant to subparagraphs 
     (f) and (g) as soon as possible after they are received and 
     such matters shall be posted on the Member's official website 
     but no later than 30 days after the trip or flight.''.
       (D) Repeal.--Section 601 of this Act shall be null and 
     void.
                                 ______
                                 
  SA 2613. Mr. FEINGOLD (for himself, Mr. Graham, Mr. Voinovich, and 
Mr. Bingaman) submitted an amendment intended to be proposed to 
amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. Grassley, 
Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to amend the 
Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

     SEC. __. GAO REPORT ON STATE HEALTH CARE REFORM INITIATIVES.

       (a) Report.--Not later than November 30, 2008, the 
     Comptroller General of the United States shall submit to 
     Congress a report on State health care reform initiatives.
       (b) Elements.--The report required by subsection (a) shall 
     include the following:
       (1) Assessment.--An assessment of State efforts to 
     reexamine health care delivery and health insurance systems 
     and to expand access of residents to health insurance and 
     health care services, including the following:
       (A) An overview of State approaches to reexamining health 
     care delivery and insurance.
       (B) Whether and to what extent State health care 
     initiatives have resulted in improved access to health care 
     and insurance.
       (C) The extent to which public and private cooperation has 
     occurred in State health care initiatives.
       (D) Outcomes of State insurance coverage mandates.
       (E) The effects of increased health care costs on State 
     fiscal choices.
       (F) The effects of Federal law and funding on State health 
     care initiatives and fiscal choices.
       (G) Outcomes of State efforts to increase health care 
     quality and control costs.
       (2) Potential role of congress.--Recommendations regarding 
     the potential role of Congress in supporting State-based 
     reform efforts, including (but not limited to) the following:
       (A) Enacting changes in Federal law that would facilitate 
     State-based health reform and expansion efforts.
       (B) Creating new or realigning existing Federal funding 
     mechanisms to support State-based reform and expansion 
     efforts.
       (C) Expanding existing Federal health insurance programs 
     and increasing other sources of Federal health care funding 
     to support State-based health reform and expansion efforts.
                                 ______
                                 
  SA 2614. Mr. FEINGOLD (for himself, and Ms. Collins) submitted an 
amendment intended to be proposed to amendment SA 2530 proposed by Mr. 
Baucus (for himself, Mr. Grassley,

[[Page 22124]]

Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to amend the 
Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

     SEC. __. AUTOMATED DEFIBRILLATION IN ADAM'S MEMORY 
                   REAUTHORIZATION.

       Section 312(e) of the Public Health Service Act (42 U.S.C. 
     244(e)) is amended in the first sentence by striking ``fiscal 
     year 2003'' and all that follows through ``2006'' and 
     inserting ``for each of fiscal years 2003 through 2011''.
                                 ______
                                 
  SA 2615. Mrs. FEINSTEIN (for herself and Mrs. Boxer) submitted an 
amendment intended to be proposed to amendment SA 2530 proposed by Mr. 
Baucus (for himself, Mr. Grassley, Mr. Rockefeller, and Mr. Hatch) to 
the bill H.R. 976, to amend the Internal Revenue Code of 1986 to 
provide tax relief for small businesses, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. AUTHORITY TO CONTINUE PROVIDING ADULT DAY HEALTH 
                   SERVICES APPROVED UNDER A STATE MEDICAID PLAN.

       (a) In General.--During the period described in subsection 
     (b), the Secretary shall not--
       (1) withhold, suspend, disallow, or otherwise deny Federal 
     financial participation under section 1903(a) of the Social 
     Security Act (42 U.S.C. 1396b(a)) for the provision of adult 
     day health care services, day activity and health services, 
     or adult medical day care services, as defined under a State 
     medicaid plan approved during or before 1994, during such 
     period if such services are provided consistent with such 
     definition and the requirements of such plan; or
       (2) withdraw Federal approval of any such State plan or 
     part thereof regarding the provision of such services (by 
     regulation or otherwise).
       (b) Period Described.--The period described in this 
     subsection is the period that begins on November 3, 2005, and 
     ends on March 1, 2009.
                                 ______
                                 
  SA 2616. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. 
Grassley, Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to 
amend the Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

     SEC. __. PERMITTING LOCAL PUBLIC AGENCIES TO ACT AS MEDICAID 
                   ENROLLMENT BROKERS.

       Section 1903(b)(4) (42 U.S.C. 1396b(b)(4)) is amended by 
     adding at the end the following new subparagraph:
       ``(C)(i) Subparagraphs (A) and (B) shall not apply in the 
     case of a local public agency that is acting as an enrollment 
     broker under a contract or memorandum with a State medicaid 
     agency, provided the local public agency does not have a 
     direct or indirect financial interest with any medicaid 
     managed care plan for which it provides enrollment broker 
     services.
       ``(ii) In determining whether a local public agency has a 
     direct or indirect financial interest with a medicaid managed 
     care plan under clause (i), the status of a local public 
     agency as a contractor of the plan does not constitute having 
     a direct or indirect financial interest with the plan.''.
                                 ______
                                 
  SA 2617. Mrs. McCASKILL (for herself and Ms. Collins) submitted an 
amendment intended to be proposed to amendment SA 2011 proposed by Mr. 
Nelson of Nebraska (for Mr. Levin) to the bill H.R. 1585, to authorize 
appropriations for fiscal year 2008 for military activities of the 
Department of Defense, for military construction, and for defense 
activities of the Department of Energy, to prescribe military personnel 
strengths for such fiscal year, and for other purposes; which was 
ordered to lie on the table; as follows:

       Beginning on page 223, strike line 20 and all that follows 
     through page 227, line 19, and insert the following:
       (2) by striking ``information relating to a substantial 
     violation of law related to a contract (including the 
     competition for or negotiation of a contract)'' and inserting 
     ``information that the employee reasonably believes is 
     evidence of gross mismanagement of a Department of Defense 
     contract, grant, or direct payment if the United States 
     Government provides any portion of the money or property 
     which is requested or demanded, a gross waste of Department 
     of Defense funds, a substantial and specific danger to public 
     health or safety, or a violation of law related to a 
     Department of Defense contract (including the competition for 
     or negotiation of a contract), grant, or direct payment if 
     the United States Government provides any portion of the 
     money or property which is requested or demanded''.
       (b) Acceleration of Schedule for Denying Relief or 
     Providing Remedy.--Subsection (c) of such section is 
     amended--
       (1) in paragraph (1)--
       (A) by inserting after ``(1)'' the following: ``Not later 
     than 90 days after receiving an Inspector General report 
     pursuant to subsection (b), the head of the agency concerned 
     shall determine whether the contractor concerned has 
     subjected the complainant to a reprisal prohibited under 
     subsection (a).''; and
       (B) by adding at the end the following new subparagraphs:
       ``(D) In the event the disclosure relates to a cost-plus 
     contract, prohibit the contractor from receiving one or more 
     award fee payments to which the contractor would otherwise be 
     eligible until such time as the contractor takes the actions 
     ordered by the head of the agency pursuant to subparagraphs 
     (A) through (C).
       ``(E) Take the reprisal into consideration in any past 
     performance evaluation of the contractor for the purpose of a 
     contract award.'';
       (2) by redesignating paragraph (3) as paragraph (4); and
       (3) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3)(A) In the case of a contract covered by subsection 
     (f), an employee of a contractor who has been discharged, 
     demoted, or otherwise discriminated against as a reprisal for 
     a disclosure covered by subsection (a) or who is aggrieved by 
     the determination made pursuant to paragraph (1) or by an 
     action that the agency head has taken or failed to take 
     pursuant to such determination may, after exhausting his or 
     her administrative remedies, bring a de novo action at law or 
     equity against the contractor to seek compensatory damages 
     and other relief available under this section in the 
     appropriate district court of the United States, which shall 
     have jurisdiction over such an action without regard to the 
     amount in controversy. Such an action shall, at the request 
     of either party to the action, be tried by the court with a 
     jury.
       ``(B) An employee shall be deemed to have exhausted his or 
     her administrative remedies for the purpose of this 
     paragraph--
       ``(i) 90 days after the receipt of a written determination 
     under paragraph (1); or
       ``(ii) 15 months after a complaint is submitted under 
     subsection (b), if a determination by an agency head has not 
     been made by that time and such delay is not shown to be due 
     to the bad faith of the complainant.''.
       (c) Legal Burden of Proof.--Such section is further 
     amended--
       (1) by redesignating subsection (e) as subsection (g); and
       (2) by inserting after subsection (d) the following new 
     subsection:
       ``(e) Legal Burden of Proof.--The legal burdens of proof 
     specified in section 1221(e) of title 5 shall be controlling 
     for the purposes of any investigation conducted by an 
     inspector general, decision by the head of an agency, or 
     hearing to determine whether discrimination prohibited under 
     this section has occurred.''.
       (d) Requirement To Notify Employees of Rights Related to 
     Protection From Reprisal.--Such section, as amended by 
     subsection (c), is further amended by inserting after 
     subsection (e) the following new subsection:
       ``(f) Notice of Rights Related to Protection From 
     Reprisal.--
       ``(1) In general.--Each Department of Defense contract in 
     excess of $5,000,000, other than a contract for the purchase 
     of commercial items, shall include a clause requiring the 
     contractor to ensure that all employees of the contractor who 
     are working on Department of Defense contracts are notified 
     of--
       ``(A) their rights under this section;
       ``(B) the fact that the restrictions imposed by any 
     employee contract, employee agreement, or non-disclosure 
     agreement may not supersede, conflict with, or otherwise 
     alter the employee rights provided for under this section; 
     and
       ``(C) the telephone number for the whistleblower hotline of 
     the Inspector General of the Department of Defense.
       ``(2) Form of notice.--The notice required by paragraph (1) 
     shall be made by posting the required information at a 
     prominent place in each workplace where employees working on 
     the contract regularly work.''.
       (e) Definitions.--Subsection (g) of such section, as 
     redesignated by subsection (c)(1), is amended--
       (1) in paragraph (4), by inserting after ``an agency'' the 
     following: ``and includes any person receiving funds covered 
     by the prohibition against reprisals in subsection (a)'';
       (2) in paragraph (5), by inserting after ``1978'' the 
     following: ``and any Inspector General that receives funding 
     from or is under the jurisdiction of the Secretary of 
     Defense''; and
       (3) by adding at the end the following new paragraphs:
       ``(6) The term `employee' means an individual (as defined 
     by section 2105 of title 5)

[[Page 22125]]

     or any individual or organization performing services for a 
     contractor, grantee, or other recipient if the United States 
     Government provides any portion of the money or property 
     which is requested or demanded (including as an employee of 
     an organization).
       ``(7) The term `Department of Defense funds' includes funds 
     controlled by the Department of Defense and funds for which 
     the Department of Defense may be reasonably regarded as 
     responsible to a third party.''.
                                 ______
                                 
  SA 2618. Mr. WEBB submitted an amendment intended to be proposed to 
amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. Grassley, 
Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to amend the 
Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; as follows:

       At the end of title VII, insert the following:

     SEC. __. ELIMINATION OF DEFERRAL OF TAXATION OF CERTAIN 
                   INCOME OF CONTROLLED FOREIGN CORPORATIONS.

       (a) In General.--Section 952 (relating to subpart F income 
     defined) is amended by adding at the end the following new 
     subsection:
       ``(e) Special Application of Subpart.--
       ``(1) In general.--For taxable years beginning after 
     December 31, 2007, notwithstanding any other provision of 
     this subpart, the term `subpart F income' means, in the case 
     of any controlled foreign corporation, the income of such 
     corporation derived from any foreign country.
       ``(2) Applicable rules.--Rules similar to the rules under 
     the last sentence of subsection (a) and subsection (d) shall 
     apply to this subsection.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of controlled foreign 
     corporations beginning after December 31, 2007, and to 
     taxable years of United States shareholders with or within 
     which such taxable years of such corporations end.
                                 ______
                                 
  SA 2619. Mr. NELSON of Florida (for himself and Mr. Alexander) 
submitted an amendment intended to be proposed to amendment SA 2530 
proposed by Mr. Baucus (for himself, Mr. Grassley, Mr. Rockefeller, and 
Mr. Hatch) to the bill H.R. 976, to amend the Internal Revenue Code of 
1986 to provide tax relief for small businesses, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 218, line 16, strike ``$10.00'' and insert 
     ``$3.00''.
                                 ______
                                 
  SA 2620. Mrs. HUTCHISON submitted an amendment intended to be 
proposed to amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. 
Grassley, Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to 
amend the Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       Strike section 110 and insert the following:

     SEC. 110. COVERAGE FOR INDIVIDUALS RESIDING IN HIGH COST 
                   AREAS WITH FAMILY INCOME ABOVE 200 PERCENT OF 
                   THE FEDERAL POVERTY LINE.

       (a) In General.--Section 2105(c) (42 U.S.C. 1397ee(c)) is 
     amended by adding at the end the following new paragraph:
       ``(8) Coverage of individuals residing in high-cost 
     areas.--
       ``(A) In general.--For fiscal years beginning with fiscal 
     year 2008, a State shall receive payments under subsection 
     (a)(1) with respect to child health assistance provided to an 
     individual who resides in a high cost county or metropolitan 
     statistical area (as defined by the Secretary, taking into 
     account the national average cost-of-living) and whose 
     effective family income exceeds 200 percent of the poverty 
     line (as determined under the State child health plan), only 
     if such family income does not exceed 200 percent of the 
     poverty line as adjusted for the cost-of-living in the State 
     under subparagraph (B)).
       ``(B) Adjusted poverty line.--The Secretary shall adjust 
     the poverty line applicable to a family of the size involved 
     with respect to each State to take into account the cost-of-
     living for each county or metropolitan statistical area in 
     the State, based on the most recent index data from the 
     Council for Community and Economic Research (previously known 
     as the American Chamber of Commerce Research Association),the 
     2004 Consumer Expenditure Survey of the Bureau of Labor 
     Statistics, and the Bureau of Economic Analysis of the 
     Department of Commerce.''.
       (b) Conforming Amendment.--Section 2105(a)(1) ( 42 U.S.C. 
     1397dd(a)(1)) is amended, in the matter preceding 
     subparagraph (A), by inserting ``or subsection (c)(8)'' after 
     ``subparagraph (B)''.
       (c) Regulations.--Not later than 90 days after the date of 
     enactment of this subparagraph, the Secretary shall 
     promulgate interim final regulations to carry out the 
     amendments made by subsections (a) and (b).
                                 ______
                                 
  SA 2621. Mrs. LINCOLN (for herself, Ms. Snowe, Mr. Nelson of 
Nebraska, Mr. Baucus, Mr. Grassley, Mr. Kennedy, Mr. Enzi, Mr. Durbin, 
Mr. Crapo, and Mr. Smith) submitted an amendment intended to be 
proposed to amendment SA 2530 proposed by Mr. Baucus (for himself, Mr. 
Grassley, Mr. Rockefeller, and Mr. Hatch) to the bill H.R. 976, to 
amend the Internal Revenue Code of 1986 to provide tax relief for small 
businesses, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end of title VI, insert the following:

     SEC. __. SENSE OF SENATE REGARDING ACCESS TO AFFORDABLE AND 
                   MEANINGFUL HEALTH INSURANCE COVERAGE.

       (a) Findings.--The Senate finds the following:
       (1) There are approximately 45 million Americans currently 
     without health insurance.
       (2) More than half of uninsured workers are employed by 
     businesses with less than 25 employees or are self-employed.
       (3) Health insurance premiums continue to rise at more than 
     twice the rate of inflation for all consumer goods.
       (4) Individuals in the small group and individual health 
     insurance markets usually pay more for similar coverage than 
     those in the large group market.
       (5) The rapid growth in health insurance costs over the 
     last few years has forced many employers, particularly small 
     employers, to increase deductibles and co-pays or to drop 
     coverage completely.
       (b) Sense of the Senate.--The Senate--
       (1) recognizes the necessity to improve affordability and 
     access to health insurance for all Americans;
       (2) acknowledges the value of building upon the existing 
     private health insurance market; and
       (3) affirms its intent to enact legislation this year that, 
     with appropriate protection for consumers, improves access to 
     affordable and meaningful health insurance coverage for 
     employees of small businesses and individuals by--
       (A) facilitating pooling mechanisms, including pooling 
     across State lines, and
       (B) providing assistance to small businesses and 
     individuals, including financial assistance and tax 
     incentives, for the purchase of private insurance coverage.
                                 ______
                                 
  SA 2622. Mr. CASEY (for Mr. Enzi (for himself and Ms. Mikulski)) 
proposed an amendment to the bill S. 845, to direct the Secretary of 
Health and Human Services to expand and intensify programs with respect 
to research and related activities concerning elder falls; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Safety of Seniors Act of 
     2007''.

     SEC. 2. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

       Part J of title III of the Public Health Service Act (42 
     U.S.C. 280b et seq.) is amended--
       (1) by redesignating section 393B (as added by section 1401 
     of Public Law 106-386) as section 393C and transferring such 
     section so that it appears after section 393B (as added by 
     section 1301 of Public Law 106-310); and
       (2) by inserting after section 393C (as redesignated by 
     paragraph (1)) the following:

     ``SEC. 393D. PREVENTION OF FALLS AMONG OLDER ADULTS.

       ``(a) Public Education.--The Secretary may--
       ``(1) oversee and support a national education campaign to 
     be carried out by a nonprofit organization with experience in 
     designing and implementing national injury prevention 
     programs, that is directed principally to older adults, their 
     families, and health care providers, and that focuses on 
     reducing falls among older adults and preventing repeat 
     falls; and
       ``(2) award grants, contracts, or cooperative agreements to 
     qualified organizations, institutions, or consortia of 
     qualified organizations and institutions, specializing, or 
     demonstrating expertise, in falls or fall prevention, for the 
     purpose of organizing State-level coalitions of appropriate 
     State and local agencies, safety, health, senior citizen, and 
     other organizations to design and carry out local education 
     campaigns, focusing on reducing falls among older adults and 
     preventing repeat falls.
       ``(b) Research.--
       ``(1) In general.--The Secretary may--
       ``(A) conduct and support research to--
       ``(i) improve the identification of older adults who have a 
     high risk of falling;
       ``(ii) improve data collection and analysis to identify 
     fall risk and protective factors;
       ``(iii) design, implement, and evaluate the most effective 
     fall prevention interventions;
       ``(iv) improve strategies that are proven to be effective 
     in reducing falls by tailoring these strategies to specific 
     populations of older adults;
       ``(v) conduct research in order to maximize the 
     dissemination of proven, effective fall prevention 
     interventions;
       ``(vi) intensify proven interventions to prevent falls 
     among older adults;

[[Page 22126]]

       ``(vii) improve the diagnosis, treatment, and 
     rehabilitation of elderly fall victims and older adults at 
     high risk for falls; and
       ``(viii) assess the risk of falls occurring in various 
     settings;
       ``(B) conduct research concerning barriers to the adoption 
     of proven interventions with respect to the prevention of 
     falls among older adults;
       ``(C) conduct research to develop, implement, and evaluate 
     the most effective approaches to reducing falls among high-
     risk older adults living in communities and long-term care 
     and assisted living facilities; and
       ``(D) evaluate the effectiveness of community programs 
     designed to prevent falls among older adults.
       ``(2) Educational support.--The Secretary, either directly 
     or through awarding grants, contracts, or cooperative 
     agreements to qualified organizations, institutions, or 
     consortia of qualified organizations and institutions, 
     specializing, or demonstrating expertise, in falls or fall 
     prevention, may provide professional education for physicians 
     and allied health professionals, and aging service providers 
     in fall prevention, evaluation, and management.
       ``(c) Demonstration Projects.--The Secretary may carry out 
     the following:
       ``(1) Oversee and support demonstration and research 
     projects to be carried out by qualified organizations, 
     institutions, or consortia of qualified organizations and 
     institutions, specializing, or demonstrating expertise, in 
     falls or fall prevention, in the following areas:
       ``(A) A multistate demonstration project assessing the 
     utility of targeted fall risk screening and referral 
     programs.
       ``(B) Programs designed for community-dwelling older adults 
     that utilize multicomponent fall intervention approaches, 
     including physical activity, medication assessment and 
     reduction when possible, vision enhancement, and home 
     modification strategies.
       ``(C) Programs that are targeted to new fall victims who 
     are at a high risk for second falls and which are designed to 
     maximize independence and quality of life for older adults, 
     particularly those older adults with functional limitations.
       ``(D) Private sector and public-private partnerships to 
     develop technologies to prevent falls among older adults and 
     prevent or reduce injuries if falls occur.
       ``(2)(A) Award grants, contracts, or cooperative agreements 
     to qualified organizations, institutions, or consortia of 
     qualified organizations and institutions, specializing, or 
     demonstrating expertise, in falls or fall prevention, to 
     design, implement, and evaluate fall prevention programs 
     using proven intervention strategies in residential and 
     institutional settings.
       ``(B) Award 1 or more grants, contracts, or cooperative 
     agreements to 1 or more qualified organizations, 
     institutions, or consortia of qualified organizations and 
     institutions, specializing, or demonstrating expertise, in 
     falls or fall prevention, in order to carry out a multistate 
     demonstration project to implement and evaluate fall 
     prevention programs using proven intervention strategies 
     designed for single and multifamily residential settings with 
     high concentrations of older adults, including--
       ``(i) identifying high-risk populations;
       ``(ii) evaluating residential facilities;
       ``(iii) conducting screening to identify high-risk 
     individuals;
       ``(iv) providing fall assessment and risk reduction 
     interventions and counseling;
       ``(v) coordinating services with health care and social 
     service providers; and
       ``(vi) coordinating post-fall treatment and rehabilitation.
       ``(3) Award 1 or more grants, contracts, or cooperative 
     agreements to qualified organizations, institutions, or 
     consortia of qualified organizations and institutions, 
     specializing, or demonstrating expertise, in falls or fall 
     prevention, to conduct evaluations of the effectiveness of 
     the demonstration projects described in this subsection.
       ``(d) Priority.--In awarding grants, contracts, or 
     cooperative agreements under this section, the Secretary may 
     give priority to entities that explore the use of cost-
     sharing with respect to activities funded under the grant, 
     contract, or agreement to ensure the institutional commitment 
     of the recipients of such assistance to the projects funded 
     under the grant, contract, or agreement. Such non-Federal 
     cost sharing contributions may be provided directly or 
     through donations from public or private entities and may be 
     in cash or in-kind, fairly evaluated, including plant, 
     equipment, or services.
       ``(e) Study of Effects of Falls on Health Care Costs.--
       ``(1) In general.--The Secretary may conduct a review of 
     the effects of falls on health care costs, the potential for 
     reducing falls, and the most effective strategies for 
     reducing health care costs associated with falls.
       ``(2) Report.--If the Secretary conducts the review under 
     paragraph (1), the Secretary shall, not later than 36 months 
     after the date of enactment of the Safety of Seniors Act of 
     2007, submit to Congress a report describing the findings of 
     the Secretary in conducting such review.''.
                                 ______
                                 
  SA 2623. Mr. SALAZAR submitted an amendment intended to be proposed 
by him to the bill H.R. 976, to amend the Internal Revenue Code of 1986 
to provide tax relief for small businesses, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. DEMONSTRATION PROJECT TO PROVIDE NURSE HOME 
                   VISITATION SERVICES UNDER MEDICAID AND CHIP.

       (a) Findings and Purpose.--
       (1) Findings.--Congress makes the following findings:
       (A) Medicaid and CHIP have collectively provided health 
     insurance coverage to over 38,000,000 low-income pregnant 
     women and children.
       (B) Evidence-based home visitation programs can improve the 
     health status of low-income pregnant women and children 
     enrolled in Medicaid and CHIP by promoting access to prenatal 
     and well-baby care, reducing pre-term births, reducing high-
     risk pregnancies, increasing time intervals between first and 
     subsequent births, and improving child cognitive, social, and 
     behavioral skills, and development.
       (C) In addition to health benefits, evidence-based home 
     visitation programs have been proven to increase maternal 
     employment and economic self-sufficiency and significantly 
     reduce child abuse and neglect, child arrests, maternal 
     arrests, and involvement in the criminal justice system.
       (D) Evidence-based nurse home visitation programs are cost 
     effective, yielding a 5-to-1 return on investment for every 
     dollar spent on services, and producing a net benefit to 
     society of $34,000 per high risk family served.
       (2) Purpose.--The purpose of this section is to establish a 
     demonstration project to evaluate the cost-effectiveness and 
     impact on the health and well-being of low-income pregnant 
     mothers and children of providing evidence-based home 
     visitation services for low-income pregnant mothers and 
     children under Medicaid and CHIP, particularly with respect 
     to the impact of such services on--
       (A) improving the prenatal health of children;
       (B) improving pregnancy outcomes;
       (C) improving child health and development;
       (D) improving child development and mental health related 
     to elementary school readiness;
       (E) improving family stability and economic self-
     sufficiency;
       (F) reducing the incidence of child abuse and neglect; and
       (G) increasing birth intervals between pregnancies.
       (b) Requirement To Conduct Demonstration Project.--
       (1) In general.--The Secretary shall establish a 
     demonstration project under which a State may apply under 
     section 1115 of the Social Security Act (42 U.S.C. 1315) to 
     provide, in accordance with the provisions of this section, 
     medical assistance under the State plan under title XIX of 
     the Social Security Act, child health assistance under the 
     State child health plan under title XXI of such Act, or both 
     for evidence-based home visitation services to children and 
     pregnant women who are eligible for such assistance under 
     such plans.
       (2) Limitation on number of approved applications.--The 
     Secretary shall only approve as many State applications to 
     provide medical assistance or child health assistance in 
     accordance with this section as will not exceed the 
     limitation on aggregate payments under subsection (d)(2)(A).
       (3) Authority to waive restrictions on payments to 
     territories.--The Secretary shall waive the limitations on 
     payment under subsections (f) and (g) of section 1108 of the 
     Social Security Act (42 U.S.C. 1308) in the case of a State 
     that is subject to such limitations and submits an approved 
     application to provide medical assistance, child health 
     assistance, or both in accordance with this section.
       (c) Length of Period for Provision of Assistance.--A State 
     shall not be approved to provide medical assistance or child 
     health assistance for evidence-based home visitation services 
     in accordance with the demonstration project established 
     under this section for a period of more than 5 consecutive 
     years.
       (d) Limitations on Federal Funding.--
       (1) Appropriation.--
       (A) In general.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated to carry out 
     this section, $25,000,000 for the period of fiscal years 2008 
     through 2012.
       (B) Budget authority.--Subparagraph (A) constitutes budget 
     authority in advance of appropriations Acts and represents 
     the obligation of the Federal Government to provide for the 
     payment of the amounts appropriated under that subparagraph.
       (2) Limitation on payments.--In no case may--
       (A) the aggregate amount of payments made by the Secretary 
     to eligible States under this section exceed $25,000,000; or
       (B) payments be provided by the Secretary under this 
     section after September 30, 2012.
       (3) Funds allocated to states.--The Secretary shall 
     allocate funds to States with approved applications under 
     this section based

[[Page 22127]]

     on their applications and the availability of funds.
       (4) Payments to states.--The Secretary shall pay to each 
     State, from its allocation under paragraph (3), an amount 
     each quarter equal to the Federal medical assistance 
     percentage, as defined with respect to the State in section 
     1905(b) of the Social Security Act (42 U.S.C. 1396d(b)), or 
     the enhanced FMAP, as defined with respect to the State in 
     section 2105(b) of such Act (42 U.S.C. 1397ee(b)) (as 
     applicable) of expenditures in the quarter for medical 
     assistance or child health assistance for evidence-based home 
     visitation services provided to low-income pregnant mothers 
     and children who are eligible for such assistance under a 
     State plan under title XIX or XXI of such Act in accordance 
     with the demonstration project established under this 
     section.
       (e) Evaluation and Report.--
       (1) Evaluation.--The Secretary shall conduct an evaluation 
     of the demonstration project established under this section. 
     Such evaluation shall include an analysis of the cost-
     effectiveness of the project with differentiation between the 
     different types of home health programs and the impact of the 
     programs on Medicaid and CHIP. For purposes of conducting 
     such evaluation, the Secretary shall require a State that 
     submits an application to participate in the demonstration 
     project established under this section to agree, as a 
     condition of approval of such application, to maintain data 
     related to, and be subject to, periodic evaluations based on 
     performance outcomes regarding the following:
       (A) Substance abuse during pregnancy.
       (B) Prematurity.
       (C) Immunizations.
       (D) Developmental delay.
       (E) Language development.
       (F) Emergency room visits and hospitalizations for injury.
       (G) Interval between pregnancies.
       (H) Workforce participation.
       (I) Government assistance use.
       (2) Report to congress.--Not later than December 31, 2012, 
     the Secretary shall submit a report to Congress on the 
     results of the evaluation of the demonstration project 
     established under this section.
       (f) Definition.--In this section, the term ``evidence-based 
     home visitation services'' means services (such as services 
     related to improving prenatal health, pregnancy outcomes, 
     child health and development, school readiness, family 
     stability and economic self-sufficiency, reducing child 
     abuse, neglect, and injury, reducing maternal and child 
     involvement in the criminal justice system, and increasing 
     birth intervals between pregnancies) on behalf of a targeted 
     low-income child who has not attained age 2 and is born to a 
     first-time pregnant mother, but only if such services are 
     provided in accordance with outcome standards that have been 
     replicated in multiple, rigorous, randomized clinical trials 
     in multiple sites, with outcomes that improve prenatal health 
     of children, pregnancy outcomes, child health and 
     development, child development, and mental health related to 
     elementary school readiness, reduce child abuse, neglect, and 
     injury, increase birth intervals between pregnancies, and 
     improve maternal employment.
       (g) Rule of Construction.--Nothing in the demonstration 
     project established under this section shall be construed as 
     affecting the ability of a State under Medicaid or CHIP to 
     provide home visitation services as part of medical 
     assistance, child health assistance, or an administrative 
     expense, for which any State received payment under section 
     1903(a) or 2105(a) of the Social Security Act (42 U.S.C. 
     1396b(a), 1397ee(a)) for the provision of such services 
     before, on, or after the date of enactment of this Act.

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