[Congressional Record (Bound Edition), Volume 154 (2008), Part 4]
[Senate]
[Pages 4754-4768]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DURBIN (for himself, Ms. Snowe, Mrs. Lincoln, and Mr. 
        Coleman):
  S. 2795. A bill to amend the Public Health Service Act to establish a 
nationwide health insurance purchasing pool for small businesses and 
the self employed that would offer a choice of private health plans and 
make health coverage more affordable, predictable, and accessible; to 
the Committee on Finance.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2795

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business Health 
     Options Program Act of 2008'' or the ``SHOP Act''.

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

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

           ``TITLE XXX--SMALL BUSINESS HEALTH OPTIONS PROGRAM

     ``SEC. 3001. DEFINITIONS.

       ``(a) In General.--In this title:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator appointed under section 3002(a).
       ``(2) Small business health board.--The term `Small 
     Business Health Board' means the Board established under 
     section 3002(d).
       ``(3) Employee.--The term `employee' has the meaning given 
     such term under section 3(6) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1002(6)). Such term 
     shall not include an employee of the Federal Government.
       ``(4) Employer.--The term `employer' has the meaning given 
     such term under section 3(5) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1002(5)), except that 
     such term shall include employers who employed an average of 
     at least 1 but not more than 100 employees (who worked an 
     average of at least 35 hours per week) on business days 
     during the year preceding the date of application, and shall 
     include self-employed individuals with either not less than 
     $5,000 in net earnings or not less than $15,000 in gross 
     earnings from self-employment in the preceding taxable year. 
     Such term shall not include the Federal Government.
       ``(5) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning given such term in 
     section 2791.
       ``(6) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning given such term in section 2791.

[[Page 4755]]

       ``(7) Health status-related factor.--The term `health 
     status-related factor' has the meaning given such term in 
     section 2791(d)(9).
       ``(8) Participating employer.--The term `participating 
     employer' means an employer that--
       ``(A) elects to provide health insurance coverage under 
     this title to its employees; and
       ``(B) is not offering other comprehensive health insurance 
     coverage to such employees.
       ``(b) Application of Certain Rules in Determination of 
     Employer Size.--For purposes of subsection (a)(3):
       ``(1) Application of aggregation rule for employers.--All 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 of the Internal Revenue Code 
     of 1986 shall be treated as 1 employer.
       ``(2) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence for the full 
     year prior to the date on which the employer applies to 
     participate, the determination of whether such employer meets 
     the requirements of subsection (a)(4) shall be based on the 
     average number of employees that it is reasonably expected 
     such employer will employ on business days in the employer's 
     first full year.
       ``(3) Predecessors.--Any reference in this subsection to an 
     employer shall include a reference to any predecessor of such 
     employer.
       ``(c) Waiver and Continuation of Participation.--
       ``(1) Waiver.--The Administrator may waive the limitations 
     relating to the size of an employer which may participate in 
     the health insurance program established under this title on 
     a case by case basis if the Administrator determines that 
     such employer makes a compelling case for such a waiver. In 
     making determinations under this paragraph, the Administrator 
     may consider the effects of the employment of temporary and 
     seasonal workers and other factors.
       ``(2) Continuation of participation.--An employer 
     participating in the program under this title that 
     experiences an increase in the number of employees so that 
     such employer has in excess of 100 employees, may not be 
     excluded from participation solely as a result of such 
     increase in employees.
       ``(d) Treatment of Health Insurance Coverage as Group 
     Health Plan.--Health insurance coverage offered under this 
     title shall be treated as a group health plan for purposes of 
     applying the Employee Retirement Income Security Act of 1974 
     (29 U.S.C. 1001 et seq.) except to the extent that a 
     provision of this title expressly provides otherwise.
       ``(e) Application of HIPAA Rules.--Notwithstanding any 
     provision of State law, the provisions of subparts 1, 3, and 
     4 of part A of title XXVII shall apply to health insurance 
     coverage offered under this title. A State may modify State 
     law as appropriate to provide for the enforcement of such 
     provisions for health insurance coverage offered in the State 
     under this title.

     ``SEC. 3002. ADMINISTRATION OF SMALL BUSINESS HEALTH 
                   INSURANCE POOL.

       ``(a) Office and Administrator.--The Secretary shall 
     designate an office within the Department of Health and Human 
     Services to administer the program under this title. Such 
     office shall be headed by an Administrator to be appointed by 
     the Secretary.
       ``(b) Qualifications.--The Secretary shall ensure that the 
     individual appointed to serve as the Administrator under 
     subsection (a) has an appropriate background with experience 
     in health insurance, business, or health policy.
       ``(c) Duties.--The Administrator shall--
       ``(1) enter into contracts with health insurance issuers to 
     provide health insurance coverage to individuals and 
     employees who enroll in health insurance coverage in 
     accordance with this title;
       ``(2) maintain the contracts for health insurance policies 
     when an employee elects which health plan offered under this 
     title to enroll in as permitted under section 3007(d)(7);
       ``(3) ensure that health insurance issuers comply with the 
     requirements of this title;
       ``(4) ensure that employers meet eligibility requirements 
     for participation in the health insurance pool established 
     under this title;
       ``(5) enter into agreements with entities to serve as 
     navigators, as defined in section 3003;
       ``(6) collect premiums from employers and employees and 
     make payments for health insurance coverage;
       ``(7) collect other information needed to administer the 
     program under this title;
       ``(8) compile, produce, and distribute information (which 
     shall not be subject to review or modification by the States) 
     to employers and employees (directly and through navigators) 
     concerning the open enrollment process, the health insurance 
     coverage available through the pool, and standardized 
     comparative information concerning such coverage, which shall 
     be available through an interactive Internet website, 
     including a description of the coverage plans available in 
     each State and comparative information, about premiums, index 
     rates, benefits, quality, and consumer satisfaction under 
     such plans;
       ``(9) provide information to health insurance issuers, 
     including, at the discretion of the Administrator, 
     notification when proposed rates are not in a competitive 
     range;
       ``(10) conduct public education activities (directly and 
     through navigators) to raise the awareness of the public of 
     the program under this title and the associated tax credit 
     under the Internal Revenue Code of 1986;
       ``(11) develop methods to facilitate enrollment in health 
     insurance coverage under this title, including through the 
     use of the Internet;
       ``(12) if appropriate, enter into contracts for the 
     performance of administrative functions under this title as 
     permitted under section 3009;
       ``(13) carefully consider benefit recommendations that are 
     endorsed by at least two-thirds of the members of the Small 
     Business Health Board;
       ``(14) establish and administer a contingency fund for risk 
     corridors as provided for in section 3008; and
       ``(15) carry out any other activities necessary to 
     administer this title.
       ``(d) Limitations.--The Administrator shall not--
       ``(1) negotiate premiums with participating health 
     insurance issuers; or
       ``(2) exclude health insurance issuers from participating 
     in the program under this title except for violating 
     contracts or the requirements of this title.
       ``(e) Small Business Health Board.--
       ``(1) In general.--There shall be established a Small 
     Business Health Board to monitor the implementation of the 
     program under this title and to make recommendations to the 
     Administrator concerning improvements in the program.
       ``(2) Appointment.--The Comptroller General shall appoint 
     13 individuals who have expertise in health care benefits, 
     financing, economics, actuarial science or other related 
     fields, to serve as members of the Small Business Health 
     Board. In appointing members under the preceding sentence, 
     the Comptroller General shall ensure that such members 
     include--
       ``(A) a mix of different types of professionals;
       ``(B) a broad geographic representation;
       ``(C) not less than 3 individuals with an employee 
     perspective;
       ``(D) not less than 3 individuals with a small business 
     perspective, at least 1 of whom shall have a self-employed 
     perspective; and
       ``(E) not less than 1 individual with a background in 
     insurance regulation.
       ``(3) Terms.--Members of the Small Business Health Board 
     shall serve for a term of 3 years, such terms to end on March 
     15 of the applicable year, except as provided in paragraph 
     (4). The Comptroller General shall stagger the terms for 
     members first appointed. A member may be reappointed after 
     the expiration of a term. A member may serve after expiration 
     of a term until a successor has been appointed.
       ``(4) Small business representatives.--Beginning on March 
     16, 2012, 3 of the individuals the Comptroller General 
     appoints to the Small Business Health Board shall be 
     representatives of the 3 navigators through which the largest 
     number of individuals have enrolled for health insurance 
     coverage over the previous 2-year period. Such appointees 
     shall serve for 1 year. The Comptroller General shall 
     consider for appointment in years prior to the date specified 
     in this paragraph, individuals who are representatives of 
     entities that may serve as navigators.
       ``(5) Chairperson; vice chairperson.--The Comptroller 
     General shall designate a member of the Small Business Health 
     Board, at the time of appointment of such member, to serve as 
     Chairperson and a member to serve as Vice Chairperson for the 
     term of the appointment, except that in the case of a vacancy 
     of either such position, the Comptroller General may 
     designate another member to serve in such position for the 
     remainder of such member's term.
       ``(6) Compensation.--While serving on the business of the 
     Small Business Health Board (including travel time), a member 
     of the Small Business Health Board shall be entitled to 
     compensation at the per diem equivalent of the rate provided 
     for level IV of the Executive Schedule under section 5315 of 
     title 5, United States Code, and while so serving away from 
     home and the member's regular place of business, a member may 
     be allowed travel expenses, as authorized by the Chairperson 
     of the Small Business Health Board.
       ``(7) Disclosure.--The Comptroller General shall establish 
     a system for the public disclosure, by members of the Small 
     Business Health Board, of financial and other potential 
     conflicts of interest.
       ``(8) Meetings.--The Small Business Health Board shall meet 
     at the call of the Chairperson. Each such meeting shall be 
     open to the public.
       ``(9) Duties.--The Small Business Health Board shall--
       ``(A) provide general oversight of the program under this 
     title and make recommendations to the Administrator;
       ``(B) monitor and make recommendations to the Administrator 
     on the benefit requirements for national plans in this title;
       ``(C) make recommendations concerning information that the 
     Administrator, health

[[Page 4756]]

     plans, and navigators should distribute to employers and 
     employees participating in the program under this title; and
       ``(D) monitor and make recommendations to the Administrator 
     on adverse selection within the program under this title and 
     between the coverage provided under the program and the 
     State-regulated health insurance market.
       ``(10) Approval of recommendations.--A recommendation shall 
     require approval by not less than two-thirds of the members 
     of the Board.
       ``(11) Public notice and comment on recommendations.--The 
     Administrator shall--
       ``(A) publish recommendations by the Small Business Health 
     Board in the Federal Register;
       ``(B) solicit written comments concerning such 
     recommendations; and
       ``(C) provide an opportunity for the presentation of oral 
     comments concerning such recommendations at a public meeting.

     ``SEC. 3003. NAVIGATORS.

       ``(a) In General.--The Administrator shall enter into 
     agreements with private and public entities, beginning a 
     reasonable period prior to the beginning of the first 
     calendar year in which health insurance coverage is offered 
     under this title, under which such entities will serve as 
     navigators.
       ``(b) Eligibility.--To be eligible to enter into an 
     agreement under subsection (a), an entity shall demonstrate 
     to the Administrator that the entity has existing 
     relationships with, or could readily establish relationships 
     with, employers and employees, and self-employed individuals, 
     likely to be eligible to participate in the program under 
     this title. Such entities may include trade, industry and 
     professional associations, chambers of commerce, unions, 
     small business development centers, and other entities that 
     the Administrator determines to be capable of carrying out 
     the duties described in subsection (c).
       ``(c) Duties.--An entity that serves as a navigator under 
     an agreement under subsection (a) shall--
       ``(1) coordinate with the Administrator on public education 
     activities to raise awareness of the program under this 
     title;
       ``(2) distribute information developed by the Administrator 
     on the open enrollment process, private health plans 
     available through the program under this title, and 
     standardized comparative information about the health 
     insurance coverage under the program;
       ``(3) distribute information about the availability of the 
     tax credit under section 36 of the Internal Revenue Code of 
     1986 as added by the Small Business Health Options Program 
     Act of 2008;
       ``(4) assist employers and employees in enrolling in the 
     program under this title; and
       ``(5) respond to questions about the program under this 
     title and participating plans.
       ``(d) Supplemental Materials.--In addition to information 
     developed by the Administrator under subsection (c)(2), a 
     navigator may develop and distribute other information that 
     is related to the health insurance program established under 
     this title, subject to review and approval by the 
     Administrator and filing in each State in which the navigator 
     operates.
       ``(e) Standards.--
       ``(1) In general.--The Administrator shall establish 
     standards for navigators under this section, including 
     provisions to avoid conflicts of interest. Under such 
     standards, a navigator may not--
       ``(A) be a health insurance issuer; or
       ``(B) receive any consideration directly or indirectly from 
     any health insurance issuer in connection with the 
     participation of any employer in the program under this title 
     or the enrollment of any eligible employee in health 
     insurance coverage under this title.
       ``(2) Fair and impartial information and services.--The 
     Administrator shall consult with the Small Business Health 
     Board concerning the standards necessary to ensure that a 
     navigator will provide fair and impartial information and 
     services. An agreement between the Administrator and a 
     navigator may include specific provisions with respect to 
     such navigator to ensure that such navigator will provide 
     fair and impartial information and services. If a navigator, 
     or entity seeking to become a navigator, is a party to any 
     arrangement with any health insurance issuer to receive 
     compensation related to other health care programs not 
     covered under this title, the entity shall disclose the terms 
     of such compensation arrangements to the Administrator, and 
     the Administrator shall take such information into account in 
     determining the appropriate standards and agreement terms for 
     such navigator.

     ``SEC. 3004. CONTRACTS WITH HEALTH INSURANCE ISSUERS.

       ``(a) In General.--The Administrator may enter into 
     contracts with qualified health insurance issuers, without 
     regard to section 5 of title 41, United States Code, or other 
     statutes requiring competitive bidding, to provide health 
     benefits plans to employees of participating employers and 
     self-employed individuals under this title. Each contract 
     shall be for a uniform term of at least 1 year, but may be 
     made automatically renewable from term to term in the absence 
     of notice of termination by either party. In entering into 
     such contracts, the Administrator shall ensure that health 
     benefits coverage is provided for an individual only, two 
     adults in a household, one adult and one or more children, 
     and a family.
       ``(b) Eligibility.--A health insurance issuer shall be 
     eligible to enter into a contract under subsection (a) if 
     such issuer--
       ``(1) is licensed to offer health benefits plan coverage in 
     each State in which the plan is offered; and
       ``(2) meets such other reasonable requirements as 
     determined appropriate by the Administrator, after an 
     opportunity for public comment and publication in the Federal 
     Register.
       ``(c) Cost-Sharing and Networks.--The Administrator shall 
     ensure that health benefits plans with a range of cost-
     sharing and network arrangements are available under this 
     title.
       ``(d) Revocation.--Approval of a health benefits plan 
     participating in the program under this title may be 
     withdrawn or revoked by the Administrator only after notice 
     to the health insurance issuer involved and an opportunity 
     for a hearing without regard to subchapter II of chapter 5 
     and chapter 7 of title 5, United States Code.
       ``(e) Conversion.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     contract may not be made or a plan approved under this 
     section if the health insurance issuer under such contract or 
     plan does not provide to each enrollee whose coverage under 
     the plan is terminated, including a termination due to 
     discontinuance of the contract or plan, the option to have 
     issued to that individual a nongroup policy without evidence 
     of insurability. A health insurance issuer shall provide a 
     notice of such option to individuals who enroll in the plan. 
     An enrollee who exercises such conversion option shall pay 
     the full periodic charges for the nongroup policy.
       ``(2) Exceptions.--A health insurance issuer shall not be 
     required to offer a nongroup policy under paragraph (1) if 
     the termination under the plan occurred because--
       ``(A) the enrollee failed to pay any required monthly 
     premiums under the plan;
       ``(B) the enrollee performed an act or practice that 
     constitutes fraud in connection with the coverage under the 
     plan;
       ``(C) the enrollee made an intentional misrepresentation of 
     a material fact under the terms of coverage of the plan; or
       ``(D) the terminated coverage under the plan was replaced 
     by similar coverage within 31 days after the date of 
     termination.
       ``(f) Payment of Premiums.--
       ``(1) In general.--Employers shall collect premium payments 
     from their employees through payroll deductions and shall 
     forward such payments and the contribution of the employer 
     (if any) to the Administrator. The Administrator shall 
     develop procedures through which such payments shall be 
     received and forwarded to the health insurance issuer 
     involved.
       ``(2) Failure to pay.--
       ``(A) In general.--Failure to pay premiums shall be treated 
     as a debt owed to the United States in the same manner as the 
     failure to repay a loan made to an individual under the 
     Higher Education Act of 1965 is treated as such a debt.
       ``(B) Procedures.--The Administrator shall establish 
     procedures--
       ``(i) for the termination of employers that fail, for a two 
     consecutive month period (or such other time period as 
     determined appropriate by the Administrator), to make premium 
     payments in a timely manner; and
       ``(ii) for recovering the cost of unpaid and uncollected 
     premiums through an adjustment in the rates charged for the 
     subsequent year in accordance with section 3007(b)(1)(C).

     ``SEC. 3005. EMPLOYER PARTICIPATION.

       ``(a) Participation Procedure.--The Administrator shall 
     develop a procedure for employers and self-employed 
     individuals to participate in the program under this title, 
     including procedures relating to the offering of health 
     benefits plans to employees and the payment of premiums for 
     health insurance coverage under this title. For the purpose 
     of premium payments, a self-employed individual shall be 
     considered an employer that is making a 100 percent 
     contribution toward the premium amount.
       ``(b) Enrollment and Offering of Other Coverage.--
       ``(1) Enrollment.--A participating employer shall ensure 
     that each eligible employee has an opportunity to enroll in a 
     plan of the employer's choice or a plan of the employee's 
     choice in accordance with section 3007(d)(7).
       ``(2) Prohibition on offering other comprehensive health 
     benefit coverage.--A participating employer may not offer a 
     health insurance plan providing comprehensive health benefit 
     coverage to employees other than a health benefits plan 
     offered under this title.
       ``(3) Prohibition on coercion.--An employer shall not 
     pressure, coerce, or offer inducements to an employee to 
     elect not to enroll in coverage under the program under this 
     title or to select a particular health benefits plan.
       ``(4) Offer of supplemental coverage options.--

[[Page 4757]]

       ``(A) In general.--A participating employer may offer 
     supplementary coverage options to employees.
       ``(B) Definition.--In subparagraph (A), the term 
     `supplementary coverage' means benefits described as 
     `excepted benefits' under section 2791(c).
       ``(c) Regulatory Flexibility.--In developing the procedure 
     under subsection (a), the Administrator shall comply with the 
     requirements specified under the Regulatory Flexibility Act 
     under chapter 6 of title 5, United States Code, consider the 
     economic impacts that the regulation will have on small 
     businesses, and consider regulatory alternatives that would 
     mitigate such impact. The Administrator shall publish and 
     publicly disseminate a small business compliance guide, 
     pursuant to section 212 of the Small Business Regulatory 
     Enforcement Fairness Act, that explains the compliance 
     requirements for employer participation. Such compliance 
     guide shall be published not later than the date of the 
     publication of the final rule under this title, or the 
     effective date of such rules, whichever is later.
       ``(d) Rule of Construction.--Except as provided in section 
     3004(f), nothing in this title shall be construed to require 
     that an employer make premium contributions on behalf of 
     employees.

     ``SEC. 3006. ELIGIBILITY AND ENROLLMENT.

       ``(a) In General.--An individual shall be eligible to 
     enroll in health insurance coverage under this title for 
     coverage beginning in 2011 if such individual is an employee 
     of a participating employer described in section 3001(a)(4) 
     or is a self-employed individual as defined in section 
     401(c)(1)(B) of the Internal Revenue Code of 1986 and meets 
     the definition of a participating employer in section 
     3001(a)(8). An employer may allow employees who average fewer 
     than 35 hours per week to enroll.
       ``(b) Limitation.--A health insurance issuer may not refuse 
     to provide coverage to any eligible individual under 
     subsection (a) who selects a health benefits plan offered by 
     such issuer under this title.
       ``(c) Type of Enrollment.--An eligible individual may 
     enroll as an individual or as an adult with one or more 
     children regardless of whether another adult is present in 
     the enrollee's household or family.
       ``(d) Open Enrollment.--
       ``(1) In general.--The Administrator shall establish an 
     annual open enrollment period during which an employer may 
     elect to become a participating employer and an employee may 
     enroll in a health benefits plan under this title for the 
     following calendar year.
       ``(2) Open enrollment period.--For purposes of this title, 
     the term `open enrollment period' means, with respect to 
     calendar year 2011 and each succeeding calendar year, the 
     period beginning on October 1, 2010, and ending December 1, 
     2010, and each succeeding period beginning October 1 and 
     ending December 1. Coverage in a health benefits plan 
     selected during such an open enrollment period shall begin on 
     January 1 of the calendar year following the selection.
       ``(3) Newly eligible employers and employees.--
     Notwithstanding the open enrollment period provided for under 
     paragraph (2), the Administrator shall establish an 
     enrollment process to enable a newly eligible employer or an 
     employer with an existing health benefits policy whose term 
     is ending to become a participating employer and for an 
     employee of such employer, or a new employee of a 
     participating employer, to enroll in a health benefits plan 
     under this title outside of an open enrollment period. The 
     Administrator may establish a process for setting the renewal 
     date for the participation of an employer that initially 
     becomes a participating employer outside of the open 
     enrollment period to coincide with a subsequent open 
     enrollment period.
       ``(4) Limitation of changing enrollment.--An employer or 
     employee (as the case may be) may elect to change the health 
     benefits plan that the employee is enrolled in only during an 
     open enrollment period.
       ``(5) Effectiveness of election and change of election.--An 
     election to change a health benefits plan that is made during 
     the open enrollment period under paragraph (2) shall take 
     effect as of the first day of the following calendar year.
       ``(6) Continuation of enrollment.--An employee who has 
     enrolled in a health benefits plan under this title is 
     considered to have been continuously enrolled in that health 
     benefits plan until such time as--
       ``(A) the employer or employee (as the case may be) elects 
     to change health benefits plans; or
       ``(B) the health benefits plan is terminated.
       ``(e) Providing Information to Promote Informed Choice.--
     The Administrator shall compile, produce, and disseminate 
     information to employers, employees, and navigators under 
     section 3002(c)(8) to promote informed choice that shall be 
     made available at least 30 days prior to the beginning of 
     each open enrollment period.
       ``(f) Termination of Employment.--An employee may remain 
     enrolled in a health plan under this title for the remainder 
     of the calendar year following the termination or separation 
     of the employee from employment or termination of the 
     employer, if the employee pays 100 percent of the monthly 
     premium for the remainder of the year involved.
       ``(g) Rule of Construction.--Nothing in this title shall be 
     construed to prohibit a health insurance issuer providing 
     coverage through the program under this title from using the 
     services of a licensed agent or broker.

     ``SEC. 3007. HEALTH COVERAGE AVAILABLE WITHIN THE SMALL 
                   BUSINESS POOL.

       ``(a) Preexisting Condition Exclusions.--
       ``(1) In general.--Each contract under this title may 
     include a preexisting condition exclusion as defined under 
     section 9801(b)(1) of the Internal Revenue Code of 1986.
       ``(2) Exclusion period.--A preexisting condition exclusion 
     under this subsection shall provide for coverage of a 
     preexisting condition to begin not later than 6 months after 
     the date on which the coverage of the individual under a 
     health benefits plan commences, reduced by the aggregate of 1 
     day for each day that the individual was covered under 
     creditable health insurance coverage (as defined for purposes 
     of section 2701(c)) immediately preceding the date the 
     individual submitted an application for coverage under this 
     title. This provision shall be applied notwithstanding the 
     applicable provision for the reduction of the exclusion 
     period provided for in section 701(a)(3) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 
     1181(a)(3)).
       ``(b) Rates and Premiums; State Laws.--
       ``(1) In general.--Rates charged and premiums paid for a 
     health benefits plan under this title--
       ``(A) shall be determined in accordance with subsection 
     (d);
       ``(B) may be annually adjusted; and
       ``(C) shall be adjusted to cover the administrative costs 
     of the Administrator under this title and the office 
     established under section 3002.
       ``(2) Benefit mandate laws.--With respect to a contract 
     entered into under this title under which a health insurance 
     issuer will offer health benefits plan coverage, State 
     mandated benefit laws in effect in the State in which the 
     plan is offered shall continue to apply, except in the case 
     of a nationwide plan.
       ``(3) Limitation.--Nothing in this subsection shall be 
     construed to preempt any State or local law (including any 
     State grievance, claims, and appeals procedure laws, State 
     provider mandate laws, and State network adequacy laws) 
     except those laws and regulations described in subsection 
     (b)(2), (d)(2)(B), and (d)(5).
       ``(c) Termination and Reenrollment.--If an individual who 
     is enrolled in a health benefits plan under this title 
     voluntarily terminates the enrollment, except in the case of 
     an individual who has lost or changes employment or whose 
     employer is terminated for failure to pay premiums, the 
     individual shall not be eligible for reenrollment until the 
     first open enrollment period following the expiration of 6 
     months after the date of such termination.
       ``(d) Rating Rules and Transitional Application of State 
     Law.--
       ``(1) Years 2011 and 2012.--With respect to calendar years 
     2011 and 2012 (open enrollment period beginning October 1, 
     2010, and October 1, 2011), the following shall apply:
       ``(A) In the case of an employer that elects to participate 
     in the program under this title, the State rating 
     requirements applicable to employers purchasing health 
     insurance coverage in the small group market in the State in 
     which the employer is located shall apply with respect to 
     such coverage, except that premium rates for such coverage 
     shall not vary based on health-status related factors.
       ``(B) State rating requirements shall apply to health 
     insurance coverage purchased in the small group market in the 
     State, except that a State shall be prohibited from allowing 
     premium rates to vary based on health-status related factors.
       ``(2) Subsequent years.--
       ``(A) NAIC recommendations.--
       ``(i) Study.--Beginning in 2009, the Administrator shall 
     contract with the National Association of Insurance 
     Commissioners to conduct a study of the rating requirements 
     utilized in the program under this title and the rating 
     requirements that apply to health insurance purchased in the 
     small group markets in the States, and to develop 
     recommendations concerning rating requirements. Such 
     recommendations shall be submitted to the appropriate 
     committees of Congress during calendar year 2011.
       ``(ii) Consultation.--In conducting the study under clause 
     (i), the National Association of Insurance Commissioners 
     shall consult with key stakeholders (including small 
     businesses, self-employed individuals, employees of small 
     businesses, health insurance issuers, health care providers, 
     and patient advocates).
       ``(iii) Recommendations.--During calendar year 2011, the 
     recommendations of the National Association of Insurance 
     Commissioners shall be submitted to Congress (in the form of 
     a legislative proposal), and shall concern--

       ``(I) rating requirements for health insurance coverage 
     under this title for calendar year 2013 and subsequent 
     calendar years; and
       ``(II) a maximum permissible variance between State rating 
     requirements and the rating requirements for coverage under 
     this title that will allow State flexibility without

[[Page 4758]]

     causing significant adverse selection for health insurance 
     coverage under this title.

       ``(B) Application of requirements.--If, pursuant to this 
     subsection, an Act is enacted to implement rating 
     requirements pursuant to the recommendations submitted under 
     subparagraph (A), or alternative rating requirements 
     developed by Congress, such rating requirements shall apply 
     to the program under this title beginning in calendar year 
     2013 (open enrollment periods beginning October 1, 2012, and 
     thereafter).
       ``(3) Failure to enact legislation.--If an Act is not 
     enacted as provided for in paragraph (2)(B), the fallback 
     rating rules under paragraph (5) shall apply beginning in 
     calendar year 2013 (open enrollment periods beginning October 
     1, 2012, and thereafter).
       ``(4) Expedited congressional consideration.--
       ``(A) Introduction and committee consideration.--
       ``(i) Introduction.--A legislative proposal submitted to 
     Congress pursuant to paragraph (2) 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 committees of 
     Congress. If the proposal is not introduced in accordance 
     with the preceding sentence, legislation may be introduced in 
     either House of Congress by any member thereof.
       ``(ii) Committee consideration.--Legislation introduced in 
     the House of Representatives and the Senate under clause (i) 
     shall be referred to the appropriate committees of 
     jurisdiction of the House of Representatives and the Senate. 
     Not later than 45 calendar days after the introduction of the 
     legislation or February 15th, 2012, whichever is later, the 
     committee of Congress to which the legislation was referred 
     shall report the legislation or a committee amendment 
     thereto. If the committee has not reported such legislation 
     (or identical legislation) at the end of 45 calendar days 
     after its introduction, or February 15th, 2012, whichever is 
     later, such committee shall be deemed to be discharged from 
     further consideration of such legislation and such 
     legislation shall be placed on the appropriate calendar of 
     the House involved.
       ``(B) Expedited procedure.--
       ``(i) Consideration.--Not later than 15 calendar days after 
     the date on which a committee has been or could have been 
     discharged from consideration of legislation under this 
     paragraph, 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 legislation, 
     and if there is no such amendment, to the legislation. 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 legislation at any time 
     after the conclusion of such 15-day period. All points of 
     order against the legislation (and against consideration of 
     the legislation) with the exception of points of order under 
     the Congressional Budget Act of 1974 are waived. A motion to 
     proceed to the consideration of the legislation 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 
     legislation, 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 legislation in 
     accordance with the Standing Rules of the House of 
     Representatives or the Senate, as the case may be, 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, except as provided in clause (iii).
       ``(ii) Consideration by other house.--If, before the 
     passage by one House of the legislation that was introduced 
     in such House, such House receives from the other House 
     legislation as passed by such other House--

       ``(I) the legislation of the other House shall not be 
     referred to a committee and shall immediately displace the 
     legislation that was introduced in the House in receipt of 
     the legislation of the other House; and
       ``(II) the legislation of the other House shall immediately 
     be considered by the receiving House under the same 
     procedures applicable to legislation reported by or 
     discharged from a committee under this paragraph.

       ``Upon disposition of legislation that is received by one 
     House from the other House, it shall no longer be in order to 
     consider the legislation that was introduced in the receiving 
     House.
       ``(iii) Senate vote requirement.--Legislation under this 
     paragraph shall only be approved in the Senate if affirmed by 
     the votes of 3/5 of the Senators duly chosen and sworn. If 
     legislation in the Senate has not reached final passage 
     within 10 days after the motion to proceed is agreed to 
     (excluding periods in which the Senate is in recess) it shall 
     be in order for the Majority Leader to file a cloture 
     petition on the legislation or amendments thereto, in 
     accordance with rule XXII of the Standing Rules of the 
     Senate. If such a cloture motion on the legislation fails, is 
     shall be in order for the Majority Leader to proceed to other 
     business and the legislation shall be returned to or placed 
     on the Senate calendar.
       ``(iv) Consideration in conference.--Immediately upon a 
     final passage of the legislation that results in a 
     disagreement between the two Houses of Congress with respect 
     to the legislation, conferees shall be appointed and a 
     conference convened. Not later than 15 days after the date on 
     which conferees are appointed (excluding periods in which one 
     or both Houses are in recess), the conferees shall file a 
     report with the House of Representatives and the Senate 
     resolving the differences between the Houses on the 
     legislation. 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 legislation 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. The conference report 
     shall be approved in the Senate only if affirmed by the votes 
     of 3/5 of the Senators duly chosen and sworn.
       ``(C) Rules of the senate and house of representatives.--
     This paragraph is enacted by Congress--
       ``(i) 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 legislation under this 
     paragraph, and it supersedes other rules only to the extent 
     that it is inconsistent with such rules; and
       ``(ii) 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.
       ``(5) Fallback rating rules.--For purposes of paragraph 
     (3), the fallback rating rules are as follows:
       ``(A) Program.--
       ``(i) Rating rules.--A health insurance issuer that enters 
     into a contract under the program under this title shall 
     determine the amount of premiums to assess for coverage under 
     a health benefits plan based on a community rate that may be 
     annually adjusted only--

       ``(I) based on the age of covered individuals (subject to 
     clause (iii));
       ``(II) based on the geographic area involved if the 
     adjustment is based on geographical divisions that are not 
     smaller than a metropolitan statistical area and the issuer 
     provides evidence of geographic variation in cost of 
     services;
       ``(III) based on industry (subject to clause (iv))
       ``(IV) based on tobacco use; and
       ``(V) based on whether such coverage is for an individual, 
     2 adults in a household, 1 adult and 1 or more children, or a 
     family.

       ``(ii) Limitation.--Premium rates charged for coverage 
     under the program under this title shall not vary based on 
     health-status related factors, gender, class of business, or 
     claims experience or any other factor not described in clause 
     (i).
       ``(iii) Age adjustments.--

       ``(I) In general.--With respect to clause (i)(I), in making 
     adjustments based on age, the Administrator shall establish 
     not more than 5 age brackets to be used by a health insurance 
     issuer in establishing rates for individuals under the age of 
     65. The rates for any age bracket shall not exceed 300 
     percent of the rate for the lowest age bracket. Age-related 
     premiums may not vary within age brackets.
       ``(II) Ages 65 and older.--With respect to clause (i)(I), a 
     health insurance issuer may develop separate rates for 
     covered individuals who are 65 years of age or older for whom 
     the primary payor for health benefits coverage is the 
     medicare program under title XVIII of the Social Security 
     Act, for the coverage of health benefits that are not 
     otherwise covered under medicare.

       ``(iv) Industry adjustment.--With respect to clause 
     (i)(III), in making adjustments based on industry, the rates 
     for any industry shall not exceed 115 percent of the rate for 
     the lowest industry and shall be based on evidence of 
     industry variation in cost of services.
       ``(B) State rating rules.--State rating requirements shall 
     apply to health insurance coverage purchased in the small 
     group market, except that a State shall not permit premium 
     rates to vary based on health-status related factors.
       ``(6) State with less premium variation.--Effective 
     beginning in calendar year 2013, in the case of a State that 
     provides a rating variance with respect to age that is less 
     than the Federal limit established under paragraph (2)(B) or 
     (3) or that provides for some

[[Page 4759]]

     form of community rating, or that provides a rating variance 
     with respect to industry that is less than the Federal limit 
     established under paragraph (2)(B) or (3), or that provides a 
     rating variance with respect to the geographic area involved 
     that is less than the Federal limit established in paragraph 
     (2)(B) or (3), premium rates charged for health insurance 
     coverage under this title in such State with respect to such 
     factor shall reflect the rating requirements of such State.
       ``(7) Employee choice.--
       ``(A) Calendar years 2011 and 2012.--With respect to 
     calendar years 2011 and 2012 (open enrollment periods 
     beginning October 1, 2010, and October 1, 2011), in the case 
     of a State that applies community rating or adjusted 
     community rating where any age bracket does not exceed 300 
     percent of the lowest age bracket, employees of an employer 
     located in that State may elect to enroll in any health plan 
     offered under this title.
       ``(B) Subsequent years.--Beginning in calendar year 2013 
     (open enrollment periods beginning October 1, 2012, and 
     thereafter), employees of an employer that participates in 
     the program under this title may elect to enroll in any 
     health plan offered under this title.
       ``(C) Exception.--In any State or year in which an employee 
     is not able to select a health plan as provided for in 
     subparagraph (A) or (B), the employer shall select the health 
     plan or plans that shall be made available to the employees 
     of such employer.
       ``(8) State approval of rates.--State laws requiring the 
     approval of rates with respect to health insurance shall 
     continue to apply to health insurance coverage under this 
     title in such State unless the State fails to enforce the 
     application of rates that would otherwise apply to health 
     insurance issuers under the program under this title.
       ``(e) Benefits.--
       ``(1) Statement of benefits.--Each contract under this 
     title shall contain a detailed statement of benefits offered 
     and shall include information concerning such maximums, 
     limitations, exclusions, and other definitions of benefits as 
     the Administrator considers necessary or reasonable.
       ``(2) Nationwide plans.--
       ``(A) In general.--In the case of contracts with health 
     insurance issuers that offer a health benefit plan on a 
     nationwide basis, in the first year after the date of 
     enactment of this title, the benefit package shall include 
     benefits established by the Administrator.
       ``(B) Process for establishing benefits for nationwide 
     plans.--The benefits provide for under subparagraph (A) shall 
     be determined as follows:
       ``(i) Not later than 30 days after the date of enactment of 
     this title, the Secretary shall enter into a contract with 
     the Institute of Medicine to develop a minimum set of 
     benefits to be offered by nationwide plans.
       ``(ii) In developing such minimum set of benefits, the 
     Institute of Medicine shall convene public forums to allow 
     input from key stakeholders (including small businesses, 
     self-employed individuals, employees of small businesses, 
     health insurance issuers, insurance regulators, health care 
     providers, and patient advocates) and shall consult with the 
     Small Business Health Board.
       ``(iii) The Institute of Medicine shall consider--

       ``(I) the clinical appropriateness and effectiveness of the 
     benefits covered;
       ``(II) the affordability of the benefits covered;
       ``(III) the financial protection of enrollees against high 
     health care expenses;
       ``(IV) access to necessary health care services; and
       ``(V) benefits similar to those available in the small 
     group market on the date of enactment of this title.

       ``(iv) The benefits package shall not be discriminatory or 
     be likely to promote or induce adverse selection.
       ``(v) The Administrator shall publish the benefits 
     recommended by the Institute of Medicine for public comment.
       ``(vi) Based on the comments received, the Administrator 
     may make changes only to the extent that the recommendation 
     from the Institute of Medicine is not consistent with the 
     criteria contained in clause (iii) or there is a compelling 
     need for the changes to ensure the effective functioning of 
     the program.
       ``(C) Changes to benefits.--
       ``(i) In genera1.--By a vote of a two-thirds majority, the 
     Small Business Health Board may recommend to the 
     Administrator changes to the benefit package for nationwide 
     plans under this paragraph for years subsequent to the first 
     year in which such benefits are in effect.
       ``(ii) Reduction in benefits.--The Administrator may reduce 
     benefits that were previously covered under this paragraph 
     only if--

       ``(I) two-thirds of the Small Business Health Board 
     recommend such change; or
       ``(II) there is a compelling need for the change to prevent 
     a substantial reduction in participation in the program under 
     this title.

       ``(f) Additional Premium for Delayed Enrollment.--
       ``(1) In general.--A self-employed individual who is 
     eligible to participate in the program under this title, who 
     does not reside in a State where a self-employed individual 
     is eligible for coverage in the small group market, and who 
     does not elect to enroll in coverage under such program in 
     the first year in which the self-employed individual is 
     eligible to so enroll, shall be subject to an additional 
     premium for delayed enrollment.
       ``(2) Amount.--The Administrator shall establish the amount 
     of the additional premium under paragraph (1), which shall be 
     the amount determined by the Administrator to be actuarially 
     appropriate, to encourage enrollment, and to reduce adverse 
     selection. The amount of the additional premium shall be 
     calculated by the Administrator based on the number of years 
     specified in paragraph (4).
       ``(3) Payment.--A self-employed individual shall pay the 
     additional premium under this subsection, if any, for a 
     period of time equal to the number of years specified in 
     paragraph (4). After the expiration of such period the 
     additional premium for delayed enrollment shall be 
     terminated.
       ``(4) Years.--The number of years specified in this 
     paragraph is the number of years that the self-employed 
     individual involved was eligible to participate in the 
     program under this title but did not enroll in coverage under 
     such program and did not otherwise have creditable coverage 
     (as defined for purposes of section 2701(c)).
       ``(g) State Enforcement.--
       ``(1) State authority.--With respect to the enforcement of 
     provisions in this title that supersede State law (as 
     described in paragraph (2)), a State may require that health 
     insurance issuers that issue, sell, renew, or offer health 
     insurance coverage in the State in the small group market or 
     through the program under this title, comply with the 
     requirements of this title with respect to such issuers.
       ``(2) Provisions described.--The provisions described in 
     this paragraph shall include the following:
       ``(A) Prohibitions on varying premium rates based on 
     health-status related factors (subsections (d)(1)(A) and (B) 
     of section 3007).
       ``(B) The implementation of rating requirements that shall 
     apply to the program under this title beginning in calendar 
     year 2013 (subsections (d)(2)(B) and (d)(3) of section 3007).
       ``(C) Benefit requirements for nationwide plans available 
     in the program under this title (subsection (e)).
       ``(3) Failure to implement or enforce provisions.--In the 
     case of a determination by the Secretary that a State has 
     failed to substantially enforce a provision (or provisions) 
     described in paragraph (2) with respect to health insurance 
     issuers in the State, the Secretary shall enforce such 
     provision (or provisions).
       ``(4) Secretarial enforcement authority.--The Secretary 
     shall have the same authority in relation to the enforcement 
     of the provisions of this title with respect to issuers of 
     health insurance coverage in a State as the Secretary has 
     under section 2722(b)(2) in relation to the enforcement of 
     the provisions of part A of title XXVII with respect to 
     issuers of health insurance coverage in the small group 
     market in the State.
       ``(h) State Opt Out.--A State may prohibit small employers 
     and self-employed individuals in the State from participating 
     in the program under this title if the State--
       ``(1) defines its small group market to include groups of 
     one (so that self-employed individuals are eligible for 
     coverage in such market);
       ``(2) prohibits the use of health-status related factors 
     and other factors described in subsection (d)(5)(A);
       ``(3) has in effect rating rules that--
       ``(A) in calendar years 2011 and 2012, comply with 
     subsection (d)(5)(A); and
       ``(B) in calendar year 2013 and thereafter, comply with 
     subsection (d)(2)(B) or (d)(3), whichever is in effect for 
     such calendar year;
     except that such rules may impose limits on rating variation 
     in addition to those provided for in such subsection;
       ``(4) maintains a State-wide purchasing pool that provides 
     purchasers in the small group market a choice of health 
     benefit plans, with comparative information provided 
     concerning such plans and the premiums charged for such plans 
     made available through the Internet; and
       ``(5) enacts a law to request an opt out under this 
     subsection.

     ``SEC. 3008. ENCOURAGING PARTICIPATION BY HEALTH INSURANCE 
                   ISSUERS THROUGH ADJUSTMENTS FOR RISK.

       ``(a) Application of Risk Corridors.--
       ``(1) In general.--This section shall only apply to health 
     insurance issuers with respect to health benefits plans 
     offered under this Act during any of calendar years 2011 
     through 2013.
       ``(2) Notification of costs under the plan.--In the case of 
     a health insurance issuer that offers a health benefits plan 
     under this title in any of calendar years 2011 through 2013, 
     the issuer shall notify the Administrator, before such date 
     in the succeeding year as the Administrator specifies, of the 
     total amount of costs incurred in providing benefits under 
     the health benefits plan for the year involved and the 
     portion of such costs that is attributable to administrative 
     expenses.
       ``(3) Allowable costs defined.--For purposes of this 
     section, the term `allowable

[[Page 4760]]

     costs' means, with respect to a health benefits plan offered 
     by a health insurance issuer under this title, for a year, 
     the total amount of costs described in paragraph (2) for the 
     plan and year, reduced by the portion of such costs 
     attributable to administrative expenses incurred in providing 
     the benefits described in such paragraph.
       ``(b) Adjustment of Payment.--
       ``(1) No adjustment if allowable costs within 3 percent of 
     target amount.--If the allowable costs for the health 
     insurance issuer with respect to the health benefits plan 
     involved for a calendar year are at least 97 percent, but do 
     not exceed 103 percent, of the target amount for the plan and 
     year involved, there shall be no payment adjustment under 
     this section for the plan and year.
       ``(2) Increase in payment if allowable costs above 103 
     percent of target amount.--
       ``(A) Costs between 103 and 108 percent of target amount.--
     If the allowable costs for the health insurance issuer with 
     respect to the health benefits plan involved for the year are 
     greater than 103 percent, but not greater than 108 percent, 
     of the target amount for the plan and year, the Administrator 
     shall reimburse the issuer for such excess costs through 
     payment to the issuer of an amount equal to 75 percent of the 
     difference between such allowable costs and 103 percent of 
     such target amount.
       ``(B) Costs above 108 percent of target amount.--If the 
     allowable costs for the health insurance issuer with respect 
     to the health benefits plan involved for the year are greater 
     than 108 percent of the target amount for the plan and year, 
     the Administrator shall reimburse the issuer for such excess 
     costs through payment to the issuer in an amount equal to the 
     sum of--
       ``(i) 3.75 percent of such target amount; and
       ``(ii) 90 percent of the difference between such allowable 
     costs and 108 percent of such target amount.
       ``(3) Reduction in payment if allowable costs below 97 
     percent of target amount.--
       ``(A) Costs between 92 and 97 percent of target amount.--If 
     the allowable costs for the health insurance issuer with 
     respect to the health benefits plan involved for the year are 
     less than 97 percent, but greater than or equal to 92 
     percent, of the target amount for the plan and year, the 
     issuer shall be required to pay into a contingency reserve 
     fund established and maintained by the Administrator, an 
     amount equal to 75 percent of the difference between 97 
     percent of the target amount and such allowable costs.
       ``(B) Costs below 92 percent of target amount.--If the 
     allowable costs for the health insurance issuer with respect 
     to the health benefits plan involved for the year are less 
     than 92 percent of the target amount for the plan and year, 
     the issuer shall be required to pay into the contingency fund 
     established under subparagraph (A), an amount equal to the 
     sum of--
       ``(i) 3.75 percent of such target amount; and
       ``(ii) 90 percent of the difference between 92 percent of 
     such target amount and such allowable costs.
       ``(4) Target amount described.--
       ``(A) In general.--For purposes of this subsection, the 
     term `target amount' means, with respect to a health benefits 
     plan offered by an issuer under this title in any of calendar 
     years 2011 through 2013, an amount equal to--
       ``(i) the total of the monthly premiums estimated by the 
     health insurance issuer and accepted by the Administrator to 
     be paid for enrollees in the plan under this title for the 
     calendar year involved; reduced by
       ``(ii) the amount of administrative expenses that the 
     issuer estimates, and the Administrator accepts, will be 
     incurred by the issuer with respect to the plan for such 
     calendar year.
       ``(B) Submission of target amount.--Not later than December 
     31, 2010, and each December 31 thereafter through calendar 
     year 2012, an issuer shall submit to the Administrator a 
     description of the target amount for such issuer with respect 
     to health benefits plans provided by the issuer under this 
     title.
       ``(c) Disclosure of Information.--
       ``(1) In general.--Each contract under this title shall 
     provide--
       ``(A) that a health insurance issuer offering a health 
     benefits plan under this title shall provide the 
     Administrator with such information as the Administrator 
     determines is necessary to carry out this subsection 
     including the notification of costs under subsection (a)(2) 
     and the target amount under subsection (b)(4)(B); and
       ``(B) that the Administrator has the right to inspect and 
     audit any books and records of the issuer that pertain to the 
     information regarding costs provided to the Administrator 
     under such subsections.
       ``(2) Restriction on use of information.--Information 
     disclosed or obtained pursuant to the provisions of this 
     subsection may be used by the office designated under section 
     3002(a) and its employees and contractors only for the 
     purposes of, and to the extent necessary in, carrying out 
     this section.

     ``SEC. 3009. ADMINISTRATION THROUGH REGIONAL OR OTHER 
                   ADMINISTRATIVE ENTITIES.

       ``(a) In General.--In order to provide for the 
     administration of the benefits under this title with maximum 
     efficiency and convenience for participating employers and 
     health care providers and other individuals and entities 
     providing services to such employers, the Administrator--
       ``(1) shall enter into contracts with eligible entities, to 
     the extent appropriate, to perform, on a regional or other 
     basis, activities to receive, disburse, and account for 
     payments of premiums to participating employers by 
     individuals, and for payments by participating employers and 
     employees to health insurance issuers; and
       ``(2) may enter into contracts with eligible entities, to 
     the extent appropriate, to perform, on a regional or other 
     basis, one or more of the following:
       ``(A) Collect and maintain all information relating to 
     individuals, families, and employers participating in the 
     program under this title.
       ``(B) Serve as a channel of communication between health 
     insurance issuers, participating employers, and individuals 
     relating to the administration of this title.
       ``(C) Otherwise carry out such activities for the 
     administration of this title, in such manner, as may be 
     provided for in the contract entered into under this section.
       ``(b) Application.--To be eligible to receive a contract 
     under subsection (a), an entity shall prepare and submit to 
     the Administrator an application at such time, in such 
     manner, and containing such information as the Administration 
     may require.
       ``(c) Process.--
       ``(1) Competitive bidding.--All contracts under this 
     section shall be awarded through a competitive bidding 
     process on a bi-annual basis.
       ``(2) Requirement.--No contract shall be entered into with 
     any entity under this section unless the Administrator finds 
     that such entity will perform its obligations under the 
     contract efficiently and effectively and will meet such 
     requirements as to financial responsibility, legal authority, 
     and other matters as the Administrator finds pertinent.
       ``(3) Publication of standards and criteria.--If the 
     Administrator enters into contracts under subsection (a), the 
     Administrator shall publish in the Federal Register standards 
     and criteria for the efficient and effective performance of 
     contract obligations under this section, and opportunity 
     shall be provided for public comment prior to implementation. 
     In establishing such standards and criteria, the 
     Administrator shall provide for a system to measure an 
     entity's performance of responsibilities.
       ``(4) Term.--Each contract under this section shall be for 
     a term of at least 2 years, and may be made automatically 
     renewable from term to term in the absence of notice by 
     either party of intention to terminate at the end of the 
     current term, except that the Administrator may terminate any 
     such contract at any time (after such reasonable notice and 
     opportunity for hearing to the entity involved as the 
     Administrator may provide in regulations) if the 
     Administrator finds that the entity has failed substantially 
     to carry out the contract or is carrying out the contract in 
     a manner inconsistent with the efficient and effective 
     administration of the program established by this title.
       ``(d) Terms of Contract.--A contract entered into under 
     this section shall include--
       ``(1) a description of the duties of the contracting 
     entity;
       ``(2) an assurance that the entity will furnish to the 
     Administrator such timely information and reports as the 
     Administrator determines appropriate;
       ``(3) an assurance that the entity will maintain such 
     records and afford such access thereto as the Administrator 
     finds necessary to assure the correctness and verification of 
     the information and reports under paragraph (2) and otherwise 
     to carry out the purposes of this title;
       ``(4) an assurance that the entity shall comply with such 
     confidentiality and privacy protection guidelines and 
     procedures as the Administrator may require;
       ``(5) an assurance that the entity does not have, and will 
     continue to avoid, any conflicts of interest relative to any 
     functions it will perform; and
       ``(6) such other terms and conditions not inconsistent with 
     this section as the Administrator may find necessary or 
     appropriate.

     ``SEC. 3010. PUBLIC EDUCATION CAMPAIGN AND REPORT.

       ``(a) In General.--In carrying out this title, the 
     Administrator shall develop and implement an educational 
     campaign with interagency participation (including at a 
     minimum the Small Business Administration, the Department of 
     Labor, and employees of the office established under section 
     3002 who oversee the provision of information through 
     navigators) to provide information to employers and the 
     general public concerning the health insurance program 
     developed under this title, including the contact information 
     relating to an individual or individuals who will be 
     available to resolve various types of problems with health 
     insurance coverage provided under this title.
       ``(b) Public Education Campaign.--There is authorized to be 
     appropriated to carry out this section, such sums as may be 
     necessary for each of fiscal years 2008 through 2010.
       ``(c) Reports to Congress.--Not later than 1 year and 2 
     years after the implementation

[[Page 4761]]

     of the campaign under subsection (a), the Administrator shall 
     submit to the appropriate committees of Congress a report 
     that describes the activities of the Administrator under 
     subsection (a), including a determination by the 
     Administrator of the percentage of employers with knowledge 
     of the health benefits program under this title.

     ``SEC. 3011. APPROPRIATIONS.

       ``There are authorized to be appropriated to the 
     Administrator such sums as may be necessary in each fiscal 
     year for the development and administration of the program 
     under this title.

     ``SEC. 3012. EFFECTIVE DATE.

       ``This title shall take effect on the date of enactment of 
     this title.''.

     SEC. 3. AMENDMENT TO ERISA.

       Section 514(b)(2) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1144(b)(2)) is amended by 
     adding at the end the following:
       ``(C) Notwithstanding subparagraph (A), the provisions of 
     subsections (d)(1)(B) and (g)(2)(A) of section 3007 of the 
     Public Health Service Act (relating to the prohibition on 
     health-status related rating and the Federal enforcement of 
     such provisions) shall supercede any State law that conflicts 
     with such provisions.''.

     SEC. 4. CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH INSURANCE 
                   EXPENSES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     credits) is amended by inserting after section 45N the 
     following new section:

     ``SEC. 45O. SMALL BUSINESS EMPLOYEE HEALTH INSURANCE CREDIT.

       ``(a) Determination of Credit.--In the case of a qualified 
     small employer, there shall be allowed as a credit against 
     the tax imposed by this chapter for the taxable year an 
     amount equal to the credit amount described in subsection 
     (b).
       ``(b) General Credit Amount.--For purposes of this 
     section--
       ``(1) In general.--The credit amount described in this 
     subsection is the product of--
       ``(A) the amount specified in paragraph (2),
       ``(B) the employer size factor specified in paragraph (3), 
     and
       ``(C) the percentage of year factor specified in paragraph 
     (4).
       ``(2) Applicable amount.--For purposes of paragraph (1)--
       ``(A) In general.--The applicable amount is equal to--
       ``(i) $1,000 for each employee of the employer who receives 
     self-only health insurance coverage through the employer,
       ``(ii) $2,000 for each employee of the employer who 
     receives family health insurance coverage through the 
     employer, and
       ``(iii) $1,500 for each employee of the employer who 
     receives health insurance coverage for two adults or one 
     adult and one or more children through the employer.
       ``(B) Bonus for payment of greater percentage of 
     premiums.--The applicable amount otherwise specified in 
     subparagraph (A) shall be increased by $200 in the case of 
     subparagraph (A)(i), $400 in the case of subparagraph 
     (A)(ii), and $300 in the case of subparagraph (A)(iii), for 
     each additional 10 percent of the qualified employee health 
     insurance expenses exceeding 60 percent which are paid by the 
     qualified small employer.
       ``(3) Employer size factor.--For purposes of paragraph (1), 
     the employer size factor is the percentage determined in 
     accordance with the following table:


----------------------------------------------------------------------------------------------------------------
                              ``If the employer size is:                                   The percentage is:
----------------------------------------------------------------------------------------------------------------
10 or fewer full-time employees                                                        100%
More than 10 but not more than 20 full-time employees                                  80%
More than 20 but not more than 30 full-time employees                                  60%
More than 30 but not more than 40 full-time employees                                  40%
More than 40 but not more than 50 full-time employees                                  20%
More than 50 full-time employees                                                       0%
----------------------------------------------------------------------------------------------------------------

       ``(4) Percentage of year factor.--For purposes of paragraph 
     (1), the percentage of year factor is equal to the ratio of--
       ``(A) the number of months during the taxable year for 
     which the employer paid or incurred qualified employee health 
     insurance expenses, and
       ``(B) 12.
       ``(c) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Qualified small employer.--
       ``(A) In general.--The term `qualified small employer' 
     means any employer (as defined in section 3001(a)(4) of the 
     Public Health Service Act) which--
       ``(i) either--

       ``(I) purchases health insurance coverage for its employees 
     in a small group market in a State which meets the 
     requirements under subparagraph (B), or
       ``(II) with respect to any taxable year beginning after 
     2010, is a participating employer (as defined in section 
     3001(a)(8) of such Act) in the program under title XXX of 
     such Act,

       ``(ii) pays or incurs at least 60 percent of the qualified 
     employee health insurance expenses of such employer or is 
     self-employed, and
       ``(iii) employed an average of 50 or fewer full-time 
     employees during the preceding taxable year or was a self-
     employed individual with either not less than $5,000 in net 
     earnings or not less than $15,000 in gross earnings from 
     self-employment in the preceding taxable year.
       ``(B) State small group market requirements.--A State meets 
     the requirements of this subparagraph if--
       ``(i) during calendar years 2009 and 2010, the State--

       ``(I) defines its small group market to include groups of 
     one (so that self-employed individuals are eligible for 
     coverage in such market),
       ``(II) prohibits the use of health-status related factors 
     and other factors described in section 3007(d)(5)(A) of such 
     Act, and
       ``(III) has in effect rating rules that comply with section 
     3007(d)(5)(A) of such Act (except that such rules may impose 
     limits on rating variation in addition to those provided for 
     in such section),

       ``(ii) during calendar years 2011 and 2012, the State--

       ``(I) meets the requirements under clause (i), and
       ``(II) maintains a State-wide purchasing pool that provides 
     purchasers in the small group market a choice of health 
     benefit plans, with comparative information provided 
     concerning such plans and the premiums charged for such plans 
     made available through the Internet, and

       ``(iii) for calendar years after 2012, the State--

       ``(I) meets the requirements under clauses (i)(I), (i)(II), 
     and (ii)(II), and
       ``(II) has in effect rating rules that comply with 
     paragraph (2)(B) or (3) of section 3007(d) of such Act, 
     whichever is in effect for such calendar year (except that 
     such rules may impose limits on rating variation in addition 
     to those provided for in such section).

       ``(2) Qualified employee health insurance expenses.--
       ``(A) In general.--The term `qualified employee health 
     insurance expenses' means any amount paid by an employer or 
     an employee of such employer for health insurance coverage 
     under such Act to the extent such amount is attributable to 
     coverage--
       ``(i) provided to any employee (as defined in subsection 
     3001(a)(3) of such Act), or
       ``(ii) for the employer, in the case of a self-employed 
     individual.
       ``(B) Exception for amounts paid under salary reduction 
     arrangements.--No amount paid or incurred for health 
     insurance coverage pursuant to a salary reduction arrangement 
     shall be taken into account under subparagraph (A).
       ``(3) Full-time employee.--The term `full-time employee' 
     means, with respect to any period, an employee (as defined in 
     section 3001(a)(3) of such Act) of an employer if the average 
     number of hours worked by such employee in the preceding 
     taxable year for such employer was at least 35 hours per 
     week.
       ``(d) Inflation Adjustment.--
       ``(1) In general.--For each taxable year after 2009, the 
     dollar amounts specified in subsections (b)(2)(A), (b)(2)(B), 
     and (c)(1)(A)(iii) (after the application of this paragraph) 
     shall be the amounts in effect in the preceding taxable year 
     or, if greater, the product of--
       ``(A) the corresponding dollar amount specified in such 
     subsection, and
       ``(B) the ratio of the index of wage inflation (as 
     determined by the Bureau of Labor Statistics) for August of 
     the preceding calendar year to such index of wage inflation 
     for August of 2008.
       ``(2) Rounding.--If any amount determined under paragraph 
     (1) is not a multiple of $100, such amount shall be rounded 
     to the next lowest multiple of $100.
       ``(e) Application of Certain Rules in Determination of 
     Employer Size.--For purposes of this section--
       ``(1) Application of aggregation rule for employers.--All 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 shall be treated as 1 
     employer.
       ``(2) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence for the full 
     preceding taxable year, the determination of whether such 
     employer meets the requirements of this section shall be 
     based on the average number of full-time employees that it is 
     reasonably expected such employer will employ on business 
     days in the employer's first full taxable year.

[[Page 4762]]

       ``(3) Predecessors.--Any reference in this subsection to an 
     employer shall include a reference to any predecessor of such 
     employer.
       ``(f) Coordination With Advance Payments of Credit.--With 
     respect to any taxable year, the amount which would (but for 
     this subsection) be allowed as a credit to the taxpayer under 
     subsection (a) shall be reduced by the aggregate amount paid 
     on behalf of such taxpayer under section 7527A for months 
     beginning in such taxable year. If the amount determined 
     under this subsection is less than zero, the taxpayer shall 
     owe additional tax in such amount under this chapter.
       ``(g) Credits for Nonprofit Organizations.--Any credit 
     which would be allowable under subsection (a) with respect to 
     a qualified small business if such qualified small business 
     were not exempt from tax under this chapter shall be treated 
     as a credit allowable under this subpart to such qualified 
     small business.''.
       (b) Advance Payments of Credit.--Chapter 77 of the Internal 
     Revenue Code of 1986 is amended by inserting after section 
     7527 the following new section:

     ``SEC. 7527A. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE 
                   COSTS FOR QUALIFIED SMALL EMPLOYERS.

       ``(a) General Rule.--Not later than December 31, 2008, the 
     Secretary shall establish a program for making monthly 
     payments on behalf of qualified small employers to the 
     program established under title XXX of the Public Health 
     Service Act. The amount of the monthly payment for a 
     qualified small employer shall be one twelfth of the amount 
     of the credit for the tax year to which the qualified small 
     employer is entitled under section 36. If a monthly payment 
     is made by the Secretary for which the employer is not 
     entitled to a corresponding credit, the employer shall owe 
     additional tax in such amount under this chapter.
       ``(b) Qualified Small Employer.--For purposes of this 
     section, the term `qualified small employer' has the meaning 
     given such term in section 36(c)(1).''.
       (c) Conforming Amendments.--
       (1) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new items:

``Sec. 45O. Small business employee health insurance credit.''.

       (2) The table of sections for chapter 77 of such Code is 
     amended by inserting after the item relating to section 7527 
     the following new item:

``Sec. 7527A. Advance payment of credit for health insurance costs for 
              qualified small employers.''.

       (d) Deductibility.--The payment of premiums by a 
     participating employer under this Act shall be considered to 
     be an ordinary and necessary expense in carrying on a trade 
     or business for purposes of the Internal Revenue Code of 1986 
     and shall be deductible.
       (e) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31, 2008.

  Ms. SNOWE. Mr. President, I rise today to join with my colleagues 
Senators Durbin, Coleman, and Lincoln, to introduce the landmark Small 
Business Health Options Program Act of 2008 or the SHOP Act because 
after more than 10 years of discussion in Congress of this No. 1 
priority for America's small businesses, this bill should finally be 
the vehicle that brings us to the finish line in passing legislation 
that's critical not only to our small businesses but also to millions 
of America's uninsured.
  This compromise proposal represents the culmination of 15 months of 
coming together, of reaching across the partisan divide, to fashion a 
workable solution to pass this year. So I want to thank Assistant 
Majority Leader Durbin for his steadfast and stalwart leadership on 
this issue--he has been a true champion in this cause--and Senator 
Lincoln, my esteemed colleague on the Senate Finance Committee--she and 
I had pledged to work together on small business health insurance at 
the start of this Congress--for her remarkable dedication to making 
this moment possible. I also thank Senator Coleman, who recently held a 
Small Business Committee field hearing on health insurance reform in 
St. Paul, Minnesota, for joining us and for his staunch support of our 
Nation's small businesses.
  As former chair and now ranking member of the Senate Small Business 
Committee, if there is one concern I have heard time and again--from 
small businesses in Maine and across the country--it is the exorbitant 
cost to small businesses of providing health insurance to their 
employees. Throughout America, health insurance premiums have increased 
by a staggering 78 percent since 2001--far outpacing inflation and wage 
gains. In Maine, annual premiums in the small group market now average 
an astronomical $4,868 for individual coverage and $14,605 for a family 
plan. Just recently a group of Maine small businesses told me that, 
incredibly, the most ``affordable'' insurance policies available to 
them included a $636 monthly premium with a $2,500 annual deductible
  This is just simply unacceptable. And the reality of these unreal 
increases is that it perpetuates a vicious cycle of spiraling costs and 
declining access--as fewer and fewer small businesses can afford to 
offer health insurance to their employees. Today, only 45 percent of 
our smallest businesses are able to provide this workplace benefit--a 
13-percent drop from 2002. No wonder that nearly 9 out of 10 to firms 
told the National Association of Manufacturers last year that the cost 
of health insurance is one of their top-three concerns--even above 
Government regulations and foreign competition. And when you couple all 
this with the fact there are already around 47 million uninsured in 
America, shouldn't we be helping to add to the rolls of the insured, 
rather than the uninsured? What exactly is there not to get when the 
status quo absolutely makes no sense?
  That is why in the 108th and 109th Congresses, when I was chair of 
the Small Business Committee, I championed a Small Business Health 
Insurance Plan bill the full Senate considered back in May 2006--thanks 
largely to the stewardship of Senator Enzi--and we came up just a 
handful of votes short. At the same time, Senators Durbin and Lincoln 
advocated for a different approach, the Small Employer Health Benefits 
Program. Yet, regrettably, Congress has failed to muster the bipartisan 
support to pass either of these measures--despite overwhelming public 
support, on both sides of the aisle, to pass something.
  Well, the clock has been ticking for far too long for America's small 
businesses--and with this bill, we believe their hour may have finally 
arrived because with the SHOP Act, we blend the best of the previous 
approaches and address the major concerns critics have expressed in a 
package that both the National Federation of Independent Businesses, 
the National Association of Realtors, and the Service Employees 
International Union agree on--and that is what I call a diverse base of 
support that speaks volumes for this bill's chances for success.
  In short, we make health insurance more affordable and accessible by 
encouraging development of State-based purchasing pools backstopped by 
a voluntary, nationwide small business risk pool. The SHOP Act 
maintains the basic premise of allowing small businesses and the self-
employed to pool together, across State lines--just as larger employers 
are able to do--to secure quality coverage that is more affordable, 
thanks to a reduction in administrative costs, which today account for 
an astonishing 25 percent of small business premiums--compared to just 
10 percent for large employers.
  So the creation of these purchasing pools will increase competition 
among insurers and provide more coverage choices for small businesses. 
And that is all the more critical as small group insurance markets--
like those in Maine--currently have no real competition. In fact, the 
largest insurers now control 43 percent of the small group markets, and 
in Maine, a sum total of 4 large insurers now control 98 percent of the 
small group market. This cannot be allowed to continue because no 
competition means higher costs. Higher costs mean no health insurance. 
And we need more insured in America, not fewer.
  Moreover, under the SHOP Act, business and trade associations would 
serve as health plan ``navigators,'' helping employers and employees 
alike with enrollment in health insurance plans and in responding to 
questions and distributing information about SHOP. And to assist small 
employers who offer health insurance, we provide a targeted tax credit 
of up to $1,000 for each covered employee, and $2,000 for family 
coverage--with a bonus credit for employers who contribute more

[[Page 4763]]

than 60 percent of the premium--encouraging our Nation's smallest 
businesses to offer health insurance for their employees as a workplace 
benefit.
  But perhaps most significantly, what this bill does that others have 
not is it resolves the persistent policy concerns that have thwarted 
previous attempts to pass small business health insurance legislation 
in the Senate.
  As we know, some have voiced concern that small business health 
insurance plans could offer stripped-down, ``bare-bones'' coverage 
plans that would leave out such key benefits as cancer screenings, 
diabetic supplies, mammograms, and maternity care. Well, we agree and 
we address this concern by requiring SHOP's nationwide plans to meet or 
exceed a minimum benefit ``floor'' to be developed by the nonpartisan 
and highly respected National Academies of Science's Institute of 
Medicine--based on clinically appropriate and affordable practices in 
today's small group market. So this issue of coverage should no longer 
be a legitimate roadblock.
  Others have said that small business health insurance legislation 
could drive up premium costs for all those who don't participate in 
these new small business plans because these plans would be playing by 
different and more advantageous rules. They have been concerned that, 
as a result, companies would set up plans that would attract a 
healthier pool of individuals--who would pay lower premiums--while 
potentially relegating the less healthy to existing group or individual 
plans that would then have to raise premiums.
  So we worked closely with the nonpartisan National Association of 
Insurance Commissioners to create strong incentives for states to 
ensure a level playing field for all plans--both inside and outside of 
SHOP. We say, if you want the small businesses in your State to be 
eligible for that targeted tax credit of up to $1,000 for individual 
employees and $2,000 for family coverage that's included in our bill, 
you must have rules prohibiting ``health status'' as a factor for 
varying insurance and reducing excessive variations for other factors. 
As an additional benefit to the self-employed, States must also ensure 
that those individuals have the option to purchase a small group plan--
rather than being left with only the far more expensive option of the 
individual insurance market.
  Still others have expressed concerns about a potential role of the 
Federal Government in insurance regulation, which has traditionally 
been left to the States. So under the SHOP Act, we ensure that State 
insurance commissioners--not the Federal Government--would handle all 
consumer complaints about health plans and would be responsible for 
ensuring that all SHOP health plans operating in their State meet State 
requirements for financial solvency and for grievance claim and appeals 
procedures.
  In conclusion, for all of these reasons I firmly believe they Small 
Business Health Options Program Act represents our best hope for 
achieving passage this Congress. By addressing the major concerns about 
previous legislation, frankly there is now no longer any good reason we 
cannot make it happen. I look forward to working with Chairman Baucus 
and Ranking Member Grassley on the Finance Committee to consider this 
bipartisan measure, so it can be passed by the full Senate.
                                 ______
                                 
      By Mr. AKAKA:
  S. 2796. A bill to require a pilot program on the use of community-
based organizations to ensure that veterans receive the care and 
benefits they need, and for other purposes; to the Committee on 
Veterans' Affairs.
  Mr. AKAKA. Mr. President, I am pleased to introduce legislation today 
that will help the Department of Veterans Affairs reach out to 
underserved veterans, through collaboration with community 
organizations.
  The Department of Veterans Affairs is the second largest cabinet 
level Federal department, operating the Nation's largest health care 
system. VA provides benefits and health care to millions of veterans 
and their families every year. Without question, VA helps countless 
veterans through its various programs every day, largely thanks to its 
employees, who make it their mission to serve those who served their 
country honorably.
  Unfortunately, while VA makes a positive impact on the veterans it 
serves, many others are left underserved. Far too often, these are 
veterans already in difficult circumstances, those who could benefit 
most from VA support. For example, veterans from rural areas must do 
without the kind of local support systems urban and suburban veterans 
often enjoy. Many veterans from racial and ethnic minority groups also 
remain underserved by VA, regardless of their physical proximity to 
veterans' programs.
  More must be done for these veterans, who look at VA and see a system 
either out of reach or out of touch. The legislation I have introduced 
today pursues one potential solution: VA partnerships with community 
based organizations.
  If enacted, this bill would require VA to work with community based 
organizations to reach out to veterans who are underserved. Five 
community organizations, chosen by VA, would be selected for pilot 
partnerships. Special consideration would be given to rural communities 
and areas with a high proportion of minorities and other underserved 
veterans. The five pilots, each in partnership with a VA medical 
center, would focus on providing support to their underserved group by 
helping servicemembers transition from military service to veteran 
status, and helping them navigate the complicated veterans' health care 
and benefits system. Also, the pilot programs would reach out to the 
families of veterans, in recognition of the central role that families 
play in helping veterans readjust and reintegrate.
  As Mental Health America, the country's oldest and largest mental 
health nonprofit, has pointed out, America's newest generation of 
veterans is returning from combat with invisible wounds that require 
care. These and other complicated injuries place new challenges on VA 
to provide the quality health care and benefits veterans have earned 
through their service. I hope that through the partnerships outlined in 
this legislation, VA will be better able to provide services to 
veterans who deserve support, yet are underserved.
                                 ______
                                 
      By Mr. AKAKA:
  S. 2797. A bill to authorize major medical facility projects and 
major medical facility leases for the Department of Veterans Affairs 
for fiscal year 2009, and for other purposes; to the Committee on 
Veterans' Affairs.
  Mr. AKAKA. Mr. President, today I introduce legislation requested by 
the Secretary of Veterans Affairs, as a courtesy to the Secretary and 
the Department of Veterans Affairs. Except in unusual circumstances, it 
is my practice to introduce legislation requested by the administration 
so that such measures will be available for review and consideration.
  This ``by-request'' bill would authorize $1.87 billion in 
construction projects in various areas of the country in fiscal year 
2009. It also would authorize one new polytrauma center in San Antonio, 
TX, and upgrades to the polytrauma center in Palo Alto, CA.
  The bill would also extend and increase the total authorizations for 
new VA Medical Centers in Denver, CO, and New Orleans, LA.
  Finally, this bill authorizes $60 million in leases for 12 outpatient 
clinics in various States and territories.
  I am introducing this bill for the review and consideration of my 
colleagues at the request of the administration. As chairman of the 
Committee on Veterans' Affairs, I have not taken a position on this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill and 
a transmittal letter be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2797

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

[[Page 4764]]



     SECTION 1. AUTHORIZATION OF FISCAL YEAR 2009 MAJOR MEDICAL 
                   FACILITY PROJECTS.

       The Secretary of Veterans Affairs may carry out the 
     following major medical facility projects in fiscal year 
     2009, with each project to be carried out in the amount 
     specified for each project:
       (1) Construction of an 80-bed replacement facility in Palo 
     Alto, California, to replace a seismically unsafe acute 
     psychiatric inpatient building, in an amount not to exceed 
     $54,000,000.
       (2) Construction of an outpatient clinic to meet the 
     increased demand for diagnostic procedures, ambulatory 
     surgery, and specialty care in Lee County, Florida, in an 
     amount not to exceed $131,800,000.
       (3) Seismic corrections to Building 1 at the Department of 
     Veterans Affairs Medical Center in San Juan, Puerto Rico, in 
     an amount not to exceed $225,900,000.
       (4) Construction of a facility for a state-of-the-art 
     polytrauma healthcare and rehabilitation center in San 
     Antonio, Texas, in an amount not to exceed $66,000,000.

     SEC. 2. EXTENSION OF AUTHORIZATION FOR MAJOR MEDICAL FACILITY 
                   CONSTRUCTION PROJECTS PREVIOUSLY AUTHORIZED.

       The Secretary of Veterans Affairs may carry out the 
     following major medical facility projects in fiscal year 
     2009, as originally authorized by section 801 of the Veterans 
     Benefits, Health Care, and Information Technology Act of 2006 
     (Public Law 109-461; 120 Stat. 3442) and as follows with each 
     project to be carried out in the amount specified for that 
     project:
       (1) Replacement of the Department of Veterans Affairs 
     Medical Center, Denver, Colorado, in an amount not to exceed 
     $769,200,000.
       (2) Restoration, new construction, or replacement of the 
     medical center facility for the Department of Veterans 
     Affairs Medical Center, New Orleans, Louisiana, due to damage 
     from Hurricane Katrina, in an amount not to exceed 
     $625,000,000.

     SEC. 3. AUTHORIZATION OF FISCAL YEAR 2009 MAJOR MEDICAL 
                   FACILITY LEASES.

       The Secretary of Veterans Affairs may carry out the 
     following major medical facility leases in fiscal year 2009 
     at the locations specified, and in an amount for each lease 
     not to exceed the amount shown for each such location:
       (1) For an outpatient clinic, Brandon, Florida, $4,326,000.
       (2) For a community-based outpatient clinic, Colorado 
     Springs, Colorado, $3,995,000.
       (3) For an outpatient clinic, Eugene, Oregon, $5,826,000.
       (4) For expansion of an outpatient clinic, Green Bay, 
     Wisconsin, $5,891,000.
       (5) For an outpatient clinic, Greenville, South Carolina, 
     $3,731,000.
       (6) For a community-based outpatient clinic, Mansfield, 
     Ohio, $2,212,000.
       (7) For a satellite outpatient clinic, Mayaguez, Puerto 
     Rico, $6,276,000.
       (8) For a community-based outpatient clinic for Southeast 
     Phoenix, Mesa, Arizona, $5,106,000.
       (9) For interim research space, Palo Alto, California, 
     $8,636,000.
       (10) For expansion of a community-based outpatient clinic, 
     Savannah, Georgia, $3,168,000.
       (11) For a community-based outpatient clinic for Northwest 
     Phoenix, Sun City, Arizona, $2,295,000.
       (12) For a primary care annex, Tampa, Florida, $8,652,000.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       (a) Authorization of Appropriations for Major Medical 
     Facility Projects.--There is authorized to be appropriated to 
     the Secretary of Veterans Affairs for fiscal year 2009 for 
     the Construction, Major Projects, account--
       (1) $477,700,000 for the projects authorized in section 1; 
     and
       (2) $1,394,200,000 for projects whose authorization is 
     extended by section 2.
       (b) Authorization of Appropriations for Medical Facility 
     Leases.--There is authorized to be appropriated to the 
     Secretary of Veterans Affairs for fiscal year 2009 for the 
     Medical Facilities account, $60,114,000 for the leases 
     authorized in section 3.
       (c) Limitation.--The projects authorized in sections 1 and 
     2 may only be carried out using--
       (1) funds appropriated for fiscal year 2009 pursuant to the 
     authorization of appropriations in subsection (a) of this 
     section;
       (2) funds available for Construction, Major Projects, for a 
     fiscal year before fiscal year 2009 that remain available for 
     obligation;
       (3) funds available for Construction, Major Projects, for a 
     fiscal year after fiscal year 2009 that remain available for 
     obligation;
       (4) funds appropriated for Construction, Major Projects, 
     for fiscal year 2009 for a category of activity not specific 
     to a project;
       (5) funds appropriated for Construction, Major Projects, 
     for a fiscal year before 2009 for a category of activity not 
     specific to a project; and
       (6) funds appropriated for Construction, Major Projects, 
     for a fiscal year after 2009 for a category of activity not 
     specific to a project.
                                  ____



                                Secretary of Veterans Affairs,

                                Washington, DC, February 13, 2008.
     Hon. Richard B. Cheney,
     President of the Senate,
     Washington, DC.
       Dear Mr. Vice President: I am pleased to submit the 
     enclosed draft bill to authorize $1,871,900,000 for 
     Department of Veterans Affairs (VA) major facility 
     construction projects for Fiscal Year 2009 and $60,114,000 
     for major facility leases for Fiscal Year 2009.
       Title 38 U.S.C. section 8104(a)(2) requires statutory 
     authorization for all VA major medical facility construction 
     projects and all major medical facility leases prior to the 
     appropriation of funds. In accordance with title 38, the 
     draft bill authorizes six major medical facility construction 
     projects and twelve major medical facility leases. The six 
     major medical facility construction projects are located in: 
     Lee County, Florida; Palo Alto, California; San Antonio, 
     Texas; San Juan, Puerto, Rico; Denver, Colorado; and New 
     Orleans, Louisiana. Previously, Congress authorized funds 
     necessary for Denver and New Orleans under P.L. 109-461. This 
     proposed bill would authorize additional funds necessary to 
     complete the remaining construction for these projects.
       The proposed project in Lee County provides a state-of-the-
     art ambulatory care facility which is expected to improve the 
     ``quality of life'' of the veteran population. Needed 
     services for diagnostic procedures, ambulatory surgery, and 
     specialty care will be provided in response to these areas 
     being identified as service shortfalls in the CARES analysis. 
     The proposed project in Palo Alto is required to replace a 
     functionally deficient and seismically unsafe acute 
     psychiatric inpatient building. This will be accomplished by 
     constructing an approximately 80-bed replacement facility. 
     The proposed project in San Antonio is for a state-of-the-art 
     polytrauma healthcare and rehabilitation center that will 
     include patient ward space and transitional housing space. 
     The proposed project in San Juan will provide needed seismic 
     corrections to Building 1 at the VA Medical Center.
       The proposed project in Denver will provide a replacement 
     facility near the University of Colorado, Fitzsimons campus. 
     The project will accommodate the tertiary, secondary and 
     primary care operations for the Eastern Colorado Health Care 
     System. Previous authorization, in the amount of $98,000,000, 
     provided pursuant to P.L. 109-461, only satisfied the cost of 
     land acquisition and some architect engineering costs. 
     Additional authorization is required to complete this 
     project.
       The proposed project in New Orleans will reestablish the 
     services in Southeast Louisiana that existed prior to 
     Hurricane Katrina. A tertiary care medical complex will be 
     constructed and will include 200 inpatient beds with 60 
     nursing home beds. Through P.L. 109-461, this project, as a 
     facility to be co-located with the Louisiana State University 
     Health Sciences Center in New Orleans (LSU), was authorized 
     in the amount of $300,000,000; however, additional 
     authorization is required to deliver the project described. 
     Authorization is requested in an amount not to exceed 
     $625,000,000 regardless of whether the project is co-located 
     with LSU as prescribed in P.L. 109-461.
       The proposed authorization will allow leases for Outpatient 
     Clinics in Brandon, Florida; Eugene, Oregon; and Greenville, 
     South Carolina. An Outpatient Clinic will be expanded through 
     a lease in Green Bay, Wisconsin. A lease for a Satellite 
     Outpatient Clinic will be acquired in Mayaguez, Puerto Rico. 
     Leases for Community Based Outpatient Clinics will be 
     acquired in Colorado Springs, Colorado; Mansfield; Ohio; 
     Mesa, Arizona; and Sun City, Arizona. A lease in Savannah, 
     Georgia, will expand its Community Based Outpatient Clinic. A 
     lease for Interim Research Space will be acquired in Palo 
     Alto, California. A lease for a Primary Care Annex will be 
     acquired in Tampa, Florida.
       The Office of Management and Budget advises that the 
     transmission of this legislative package is in accord with 
     the Administration's program.
           Sincerely yours,
                                                   James B. Peake.
                                 ______
                                 
      By Mr. NELSON of Florida:
  S. 2803. A bill to amend the Act entitled ``An Act authorizing 
associations of producers of aquatic products'' to include persons 
engaged in the fishery industry as charter boats or recreational 
fishermen, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.
  Mr. NELSON of Florida. Mr. President. I rise today to introduce 
legislation to aid an industry that is vital to the State of Florida 
and that, like many others in this Nation, is suffering during the 
current economic downturn: the charter and recreational fishing 
industry.
  I am introducing the Charter and Recreational Fishing Collective 
Marketing Act of 2008. This bill would allow charter boat and other 
recreational fishermen to act together in associations for the purposes 
of catching, producing, and marketing aquatic

[[Page 4765]]

products. By gaining strength in numbers through such associations, 
charter and recreational fishermen could negotiate lower prices when 
purchasing services and products, such as insurance, fuel, ice, and 
other supplies.
  If they choose to do so, this bill would also allow these 
associations to implement vessel capacity reduction programs--in other 
words, to buy-out those members who already wish to leave the industry 
voluntarily but lack the financial wherewithal to do so. These 
associations could also undertake research, such as scientific 
monitoring of their fisheries, and in the process help improve 
conservation and management of fishery resources.
  Mr. President, this legislation does nothing more than provide 
charter and recreational fishermen the same rights and abilities to 
work collectively that commercial fishermen have enjoyed since 1934. 
This legislation has no hearing on fishing allocations or related 
regulations. In light of the great economic challenges that our country 
is facing, we have an obligation to ensure the viability of industries 
that support our coastal communities. The Charter and Recreational 
Fishing Collective Marketing Act of 2008 would help us meet that 
obligation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2803

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``The Charter and Recreational 
     Fishing Collective Marketing Act of 2008''.

     SEC. 2. CHARTER BOATS AND RECREATIONAL FISHERMEN.

       (a) In General.--The Act entitled ``An Act authorizing 
     associations of producers of aquatic products'', approved 
     June 25, 1934 (15 U.S.C. 521), is amended--
       (1) in the second undesignated paragraph, by inserting 
     ``and recreational'' after ``includes all commercial''; and
       (2) by inserting after the first undesignated paragraph the 
     following:
       ``Persons engaged in the fishery industry, as charter boat 
     or recreational fishermen catching aquatic products, may act 
     together in associations, corporate or otherwise, with or 
     without capital stock, in collectively catching, producing, 
     and marketing such aquatic products, including implementing a 
     vessel capacity reduction program, improving the operational 
     and economic efficiency of a fishery, undertaking research, 
     and improving the conservation and management of a fishery 
     resource.''.
       (b) Construction.--Nothing in this section or the 
     amendments made by this section shall be construed to 
     diminish or supersede any authority or provision of the 
     Magnuson-Sevens Fishery Conservation and Management Act (16 
     U.S.C. 1801 et seq.).
                                 ______
                                 
      By Mr. NELSON of Florida (for himself and Mr. Martinez):
  S. 2804. A bill to adjust the boundary of the Everglades National 
Park, and for other purposes; to the Committee on Energy and Natural 
Resources.
  Mr. NELSON of Florida. Mr. President, I ask unanimous consent that 
the text of the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2804

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Everglades National Park 
     Boundary Adjustment Act of 2008''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the Tarpon Basin property proposed for acquisition by 
     the Secretary (acting through the Director of the National 
     Park Service) contains habitat for--
       (A) the wood stork and the West Indian manatee, each of 
     which is listed as an endangered species under the Endangered 
     Species Act of 1973 (16 U.S.C. 1531 et seq.); and
       (B) the roseate spoonbill and the white-crowned pigeon, 
     each of which is listed as a threatened species by the 
     Florida Game and Fresh Water Fish Commission;
       (2) the Tarpon Basin property also includes approximately 
     10 acres of subtropical hardwood hammock, a habitat found 
     only in South Florida and the Florida Keys;
       (3) more than 70 percent of the hardwood hammock in South 
     Key Largo has been lost to development; and
       (4) vessel owners often anchor the vessels of the owners in 
     a saltwater pond--
       (A) that is located within the Tarpon Basin property; and
       (B) to protect the vessels from tropical storms and 
     hurricanes.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Hurricane hole.--The term ``Hurricane Hole'' means the 
     saltwater pond that--
       (A) is located east of the Intracoastal Waterway as the 
     Waterway passes through Dusenbury Creek; and
       (B) has been used historically to moor sailboats during 
     tropical storms and hurricanes.
       (2) Map.--The term ``map'' means the map entitled 
     ``Proposed Tarpon Basin Boundary Revision'' and dated April 
     14, 2003.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (4) Tarpon basin property.--The term ``Tarpon Basin 
     property'' means the land that--
       (A) is comprised of approximately 600 acres of land and 
     water surrounding Tarpon Basin, as generally depicted on the 
     map; and
       (B) is located in South Key Largo.

     SEC. 4. BOUNDARY REVISION.

       (a) Boundary Revision.--The boundary of the Everglades 
     National Park is adjusted to include the Tarpon Basin 
     property.
       (b) Acquisition Authority.--
       (1) In general.--In accordance with paragraph (2), the 
     Secretary may acquire, through a voluntary donation, sale, or 
     exchange, any land or interest in land that is located in the 
     Tarpon Basin property.
       (2) Requirement relating to sales.--With respect to a sale 
     to acquire any land or interest in land under paragraph (1) 
     that is located in the Tarpon Basin property, the Secretary 
     may only use donated or appropriated funds.
       (c) Availability of Map.--The map shall be on file and 
     available for public inspection in the appropriate offices of 
     the National Park Service.
       (d) Administration.--The Secretary shall administer each 
     land and water added to the Everglades National Park by 
     subsection (a), or through a voluntary donation, sale, or 
     exchange under subsection (b)--
       (1) as part of the Everglades National Park; and
       (2) in accordance with applicable laws (including 
     regulations).

     SEC. 5. USE OF HURRICANE HOLE.

       (a) Authority to Issue Permits.--The Secretary may issue a 
     permit to any owner of a sailing vessel who, before the date 
     of enactment of this Act, had secured the sailing vessel of 
     the owner in Hurricane Hole to protect the sailing vessel 
     from a tropical storm or hurricane.
       (b) Eligibility.--
       (1) Evidence of prior use.--To be eligible to receive a 
     permit under subsection (a), an owner of a sailing vessel 
     shall provide to the Secretary evidence that the Secretary 
     determines to be sufficient to establish that the owner of 
     the sailing vessel had, before the date of enactment of this 
     Act, secured the sailing vessel of the owner in Hurricane 
     Hole to protect the vessel from a tropical storm or 
     hurricane.
       (2) Indemnity requirement.--To be eligible to receive a 
     permit under subsection (a), an owner of a sailing vessel 
     shall agree to hold the United States harmless, and to 
     indemnify the United States from any claim or damage that may 
     arise from any activity conducted under the permit (including 
     damage to the sailing vessel that is the subject of the 
     permit).
       (c) Conditions of Permit.--
       (1) Sailing vessels.--A permit issued under subsection (a) 
     shall be valid only for a sailing vessel.
       (2) Transferability.--A permit issued under subsection (a) 
     shall not be transferrable.
       (3) Expiration.--A permit issued under subsection (a) shall 
     expire on the date of the death of the holder of the permit.
       (d) Protection of Resources.--
       (1) Authority of secretary.--The Secretary may include in a 
     permit issued under subsection (a) any term or condition that 
     the Secretary determines to be necessary--
       (A) to protect the resources of the Everglades National 
     Park; and
       (B) to ensure the safety of the public at the Everglades 
     National Park.
       (2) Bond.--To accomplish each goal described in paragraph 
     (1), the Secretary may require each holder of a permit issued 
     under subsection (a) to post a bond.
       (e) Fees.--The Secretary may charge a fee to recover the 
     cost of issuing, and monitoring the compliance of, the 
     permits under subsection (a).

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this Act.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 2805. A bill to direct the Secretary of the Interior, acting 
through the Commissioner of Reclamation, to assess the irrigation 
infrastructure of the Rio Grande Pueblos in the State of New Mexico and 
provide grants to, and enter into cooperative agreements with, the Rio 
Grande Pueblos to repair, rehabilitate, or reconstruct existing 
infrastructure, and for other purposes; to

[[Page 4766]]

the Committee on Energy and Natural Resources.
  Mr. BINGAMAN. Mr. President, I rise today to introduce the Rio Grande 
Pueblos Irrigation Infrastructure Improvement Act of 2008. This 
legislation is based on recommendations made by the 2000 report by the 
Bureau of Reclamation and Bureau of Indian Affairs entitled Pueblo 
Irrigation Facilities Rehabilitation Report. This report identifies the 
serious needs that exist in rehabilitating Pueblo Indian irrigation 
infrastructure, and more importantly, the lack of any existing program 
to meet these challenges.
  The 18 Pueblos of the Rio Grande basin have historically sustained 
themselves through agriculture, irrigating their crops with water from 
the Rio Grande watershed. However, the number of Pueblo irrigation 
works in serious disrepair has placed this way of life in jeopardy. In 
many cases, diversion structures and other facilities are unsafe, 
barely operable, and wholly inefficient, thereby preventing the 
irrigation of historical farmland. Despite the time and effort the 
Pueblo people have committed to operating and maintaining these 
irrigation systems, the tribes lack the financial and technical 
resources to carry out the necessary improvements by themselves.
  Unfortunately, according to a recent GAO Report on the Bureau of 
Indian Affairs' irrigation program, it appears that the BIA also lacks 
the resources necessary to maintain irrigation infrastructure on Indian 
land. Given this and the BIA's historical lack of attention to the 
issue, it is clear that the Bureau of Reclamation may be best suited to 
provide the technical expertise needed to assist the Pueblos. Over the 
last 5 years, Reclamation has funded a number of water conservation 
efforts within its irrigation projects in New Mexico. The work that's 
been done has been highly beneficial, and it's time to include the Rio 
Grande Pueblos in that effort.
  Accordingly, this bill directs the Secretary of the Interior, through 
the Bureau of Reclamation, to work with the eighteen Pueblos in the Rio 
Grande basin to assess Pueblo irrigation infrastructure and initiate 
projects to rehabilitate and repair such infrastructure on Pueblo 
lands. Moreover, the activity authorized in the bill is consistent with 
the goals of Reclamation's Water 2025 program. Recognizing the limited 
resources available within Reclamation, though, the bill directs the 
Secretary of the Interior to work with BIA, the Natural Resources 
Conservation Service, and the Army Corps of Engineers to identify 
opportunities to use the authorities of those agencies to collaborate 
on projects that make sense to all involved.
  By focusing Federal resources and expertise on this problem now, the 
federal government, as part of its trust responsibility, will help 
prevent further deterioration of Pueblo irrigation systems and any 
additional rehabilitation costs in the future. The Rio Grande Pueblos 
will benefit markedly from increased agricultural productivity, 
increased water conservation, and overall safer facilities. More 
importantly however, these improvements have the capacity to assist the 
Pueblos in sustaining their historical way of life, both economically 
and culturally. Finally, the overall health of the Rio Grande basin 
will likely benefit through increased efficiency in water use. For 
these reasons, I urge my colleagues to support this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2805

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Rio Grande Pueblos 
     Irrigation Infrastructure Improvement Act''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) drought, population increases, and environmental needs 
     are exacerbating water supply issues across the western 
     United States, including the Rio Grande Basin in New Mexico;
       (2) a report developed by the Bureau of Reclamation and the 
     Bureau of Indian Affairs in 2000 identified a serious need 
     for the rehabilitation and repair of irrigation 
     infrastructure of the Rio Grande Pueblos;
       (3) inspection of existing irrigation infrastructure of the 
     Rio Grande Pueblos shows that many key facilities, such as 
     diversion structures and main conveyance ditches, are unsafe 
     and barely, if at all, operable;
       (4) the benefits of rehabilitating and repairing irrigation 
     infrastructure of the Rio Grande Pueblos include--
       (A) water conservation;
       (B) extending available water supplies;
       (C) increased agricultural productivity;
       (D) economic benefits;
       (E) safer facilities; and
       (F) the preservation of the culture of Indian Pueblos in 
     the State;
       (5) certain Indian Pueblos in the Rio Grande Basin receive 
     water from facilities operated or owned by the Bureau of 
     Reclamation; and
       (6) rehabilitation and repair of irrigation infrastructure 
     of the Rio Grande Pueblos would improve--
       (A) overall water management by the Bureau of Reclamation; 
     and
       (B) the ability of the Bureau of Reclamation to help 
     address potential water supply conflicts in the Rio Grande 
     Basin.
       (b) Purpose.--The purpose of this Act is to direct the 
     Secretary--
       (1) to assess the condition of the irrigation 
     infrastructure of the Rio Grande Pueblos;
       (2) to establish priorities for the rehabilitation of 
     irrigation infrastructure of the Rio Grande Pueblos in 
     accordance with specified criteria; and
       (3) to implement projects to rehabilitate and improve the 
     irrigation infrastructure of the Rio Grande Pueblos.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) 2004 agreement.--The term ``2004 Agreement'' means the 
     agreement entitled ``Agreement By and Between the United 
     States of America and the Middle Rio Grande Conservancy 
     District, Providing for the Payment of Operation and 
     Maintenance Charges on Newly Reclaimed Pueblo Indian Lands in 
     the Middle Rio Grande Valley, New Mexico'' and executed in 
     September 2004 (including any successor agreements and 
     amendments to the agreement).
       (2) Designated engineer.--The term ``designated engineer'' 
     means a Federal employee designated under the Act of February 
     14, 1927 (69 Stat. 1098, chapter 138) to represent the United 
     States in any action involving the maintenance, 
     rehabilitation, or preservation of the condition of any 
     irrigation structure or facility on land located in the Six 
     Middle Rio Grande Pueblos.
       (3) District.--The term ``District'' means the Middle Rio 
     Grande Conservancy District, a political subdivision of the 
     State established in 1925.
       (4) Pueblo irrigation infrastructure.--The term ``Pueblo 
     irrigation infrastructure'' means any diversion structure, 
     conveyance facility, or drainage facility located on land of 
     a Rio Grande Pueblo that is associated with the delivery of 
     water for the irrigation of agricultural land.
       (5) Rio grande basin.--The term ``Rio Grande Basin'' means 
     the headwaters of the Rio Chama and the Rio Grande Rivers 
     (including any tributaries) from the State line between 
     Colorado and New Mexico downstream to the elevation 
     corresponding with the spillway crest of Elephant Butte Dam 
     at 4,457.3 feet mean sea level.
       (6) Rio grande pueblo .--The term ``Rio Grande Pueblo'' 
     means any of the 18 Pueblos that--
       (A) occupy land in the Rio Grande Basin; and
       (B) are included on the list of federally recognized Indian 
     tribes published by the Secretary in accordance with section 
     104 of the Federally Recognized Indian Tribe List Act of 1994 
     (25 U.S.C. 479a-1).
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the Commissioner of 
     Reclamation.
       (8) Six middle rio grande pueblos.--The term ``Six Middle 
     Rio Grande Pueblos'' means each of the Pueblos of Cochiti, 
     Santo Domingo, San Felipe, Santa Ana, Sandia, and Isleta.
       (9) Special project.--The term ``special project'' has the 
     meaning given the term in the 2004 Agreement.
       (10) State.--The term ``State'' means the State of New 
     Mexico.

     SEC. 4. IRRIGATION INFRASTRUCTURE STUDY.

       (a) Study.--
       (1) In general.--On the date of enactment of this Act, the 
     Secretary, in accordance with paragraph (2), and in 
     consultation with the Rio Grande Pueblos, shall--
       (A) conduct a study of Pueblo irrigation infrastructure; 
     and
       (B) based on the results of the study, develop a list of 
     projects (including a cost estimate for each project), that 
     are recommended to be implemented over a 10-year period to 
     repair, rehabilitate, or reconstruct Pueblo irrigation 
     infrastructure.
       (2) Required consent.--The Secretary shall carry out 
     paragraph (1) with the consent of each Pueblo that notifies 
     the Secretary of the intention of the Pueblo to participate 
     in--
       (A) the conduct of the study under paragraph (1)(A); and

[[Page 4767]]

       (B) the development of the list of projects under paragraph 
     (1)(B).
       (b) Priority.--
       (1) Consideration of factors.--
       (A) In general.--In developing the list of projects under 
     subsection (a)(1)(B), the Secretary shall--
       (i) consider each of the factors described in paragraph 
     (2); and
       (ii) prioritize the projects recommended for implementation 
     based on--

       (I) a review of each of the factors; and
       (II) a consideration of the projected benefits of the 
     project on completion of the project.

       (B) Eligibility of projects.--A project is eligible to be 
     considered and prioritized by the Secretary if the project 
     addresses at least 1 factor described in paragraph (2).
       (2) Factors.--The factors referred to in paragraph (1) 
     are--
       (A)(i) the extent of disrepair of the Pueblo irrigation 
     infrastructure; and
       (ii) the effect of the disrepair on the ability of the 
     applicable Rio Grande Pueblo to irrigate agricultural land 
     using Pueblo irrigation infrastructure;
       (B) whether, and the extent that, the repair, 
     rehabilitation, or reconstruction of the Pueblo irrigation 
     infrastructure would provide an opportunity to conserve 
     water;
       (C)(i) the economic and cultural impacts that the Pueblo 
     irrigation infrastructure that is in disrepair has on the 
     applicable Rio Grande Pueblo; and
       (ii) the economic and cultural benefits that the repair, 
     rehabilitation, or reconstruction of the Pueblo irrigation 
     infrastructure would have on the applicable Rio Grande 
     Pueblo;
       (D) the opportunity to address water supply or 
     environmental conflicts in the applicable river basin if the 
     Pueblo irrigation infrastructure is repaired, rehabilitated, 
     or reconstructed; and
       (E) the overall benefits of the project to efficient water 
     operations on the land of the applicable Rio Grande Pueblo.
       (c) Consultation.--In developing the list of projects under 
     subsection (a)(1)(B), the Secretary shall consult with the 
     Director of the Bureau of Indian Affairs (including the 
     designated engineer with respect to each proposed project 
     that affects the Six Middle Rio Grande Pueblos), the Chief of 
     the Natural Resources Conservation Service, and the Chief of 
     Engineers to evaluate the extent to which programs under the 
     jurisdiction of the respective agencies may be used--
       (1) to assist in evaluating projects to repair, 
     rehabilitate, or reconstruct Pueblo irrigation 
     infrastructure; and
       (2) to implement--
       (A) a project recommended for implementation under 
     subsection (a)(1)(B); or
       (B) any other related project (including on-farm 
     improvements) that may be appropriately coordinated with the 
     repair, rehabilitation, or reconstruction of Pueblo 
     irrigation infrastructure to improve the efficient use of 
     water in the Rio Grande Basin.
       (d) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Energy and Natural Resources of the Senate and 
     the Committee on Resources of the House of Representatives a 
     report that includes--
       (1) the list of projects recommended for implementation 
     under subsection (a)(1)(B); and
       (2) any findings of the Secretary with respect to--
       (A) the study conducted under subsection (a)(1)(A);
       (B) the consideration of the factors under subsection 
     (b)(2); and
       (C) the consultations under subsection (c).
       (e) Biennial Review.--Not later than 2 years after the date 
     on which the Secretary submits the report under subsection 
     (d) and biennially thereafter, the Secretary, in consultation 
     with each Rio Grande Pueblo, shall--
       (1) review the report submitted under subsection (d); and
       (2) update the list of projects described in subsection 
     (d)(1) in accordance with each factor described in subsection 
     (b)(2), as the Secretary determines to be appropriate.

     SEC. 5. IRRIGATION INFRASTRUCTURE GRANTS.

       (a) In General.--The Secretary may provide grants to, and 
     enter into cooperative agreements with, the Rio Grande 
     Pueblos to plan, design, construct, or otherwise implement 
     projects to repair, rehabilitate, reconstruct, or replace 
     Pueblo irrigation infrastructure that are recommended for 
     implementation under section 4(a)(1)(B)--
       (1) to increase water use efficiency and agricultural 
     productivity for the benefit of a Rio Grande Pueblo;
       (2) to conserve water; or
       (3) to otherwise enhance water management or help avert 
     water supply conflicts in the Rio Grande Basin.
       (b) Limitation.--Assistance provided under subsection (a) 
     shall not be used for--
       (1) the repair, rehabilitation, or reconstruction of any 
     major impoundment structure;
       (2) any on-farm improvements; or
       (3) the rehabilitation of any Pueblo irrigation 
     infrastructure for the purpose of irrigating Rio Grande 
     Pueblo land that has not been historically irrigated.
       (c) Consultation.--In carrying out a project under 
     subsection (a), the Secretary shall--
       (1) consult with, and obtain the approval of, the 
     applicable Rio Grande Pueblo;
       (2) consult with the Director of the Bureau of Indian 
     Affairs; and
       (3) as appropriate, coordinate the project with any work 
     being conducted under the irrigation operations and 
     maintenance program of the Bureau of Indian Affairs.
       (d) Cost-Sharing Requirement.--
       (1) Federal share.--
       (A) In general.--Except as provided in subparagraph (B), 
     the Federal share of the total cost of carrying out a project 
     under subsection (a) shall be not more than 75 percent.
       (B) Exception.--The Secretary may waive or limit the non-
     Federal share required under subparagraph (A) if the 
     Secretary determines, based on a demonstration of financial 
     hardship by the Rio Grande Pueblo, that the Rio Grande Pueblo 
     is unable to contribute the required non-Federal share.
       (2) District contributions.--
       (A) In general.--The Secretary may accept from the District 
     a partial or total contribution toward the non-Federal share 
     required for a project carried out under subsection (a) on 
     land located in any of the Six Middle Rio Grande Pueblos if 
     the Secretary determines that the project is a special 
     project.
       (B) Limitation.--Nothing in subparagraph (A) requires the 
     District to contribute to the non-Federal share of the cost 
     of a project carried out under subsection (a).
       (3) State contributions.--
       (A) In general.--The Secretary may accept from the State a 
     partial or total contribution toward the non-Federal share 
     for a project carried out under subsection (a).
       (B) Limitation.--Nothing in subparagraph (A) requires the 
     State to contribute to the non-Federal share of the cost of a 
     project carried out under subsection (a).
       (4) Form of non-federal share.--The non-Federal share under 
     paragraph (1)(A) may be in the form of in-kind contributions, 
     including the contribution of any valuable asset or service 
     that the Secretary determines would substantially contribute 
     to a project carried out under subsection (a).
       (e) Operation and Maintenance.--The Secretary may not use 
     any amount made available under section 8(b) to carry out the 
     operation or maintenance of any project carried out under 
     subsection (a).

     SEC. 6. EFFECT ON EXISTING AUTHORITY AND RESPONSIBILITIES.

       Nothing in this Act--
       (1) affects any existing project-specific funding 
     authority; or
       (2) limits or absolves the United States from any 
     responsibility to any Rio Grande Pueblo (including any 
     responsibility arising from a trust relationship or from any 
     Federal law (including regulations), Executive order, or 
     agreement between the Federal Government and any Rio Grande 
     Pueblo).

     SEC. 7. EFFECT ON PUEBLO WATER RIGHTS OR STATE WATER LAW.

       (a) Pueblo Water Rights.--Nothing in this Act (including 
     the implementation of any project carried out in accordance 
     with this Act) affects the right of any Pueblo to receive, 
     divert, store, or claim a right to water, including the 
     priority of right and the quantity of water associated with 
     the water right under Federal or State law.
       (b) State Water Law.--Nothing in this Act preempts or 
     affects--
       (1) State water law; or
       (2) an interstate compact governing water.

     SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

       (a) Study.--There is authorized to be appropriated to carry 
     out section 4 $4,000,000.
       (b) Projects.--There is authorized to be appropriated to 
     carry out section 5 $6,000,000 for each of fiscal years 2010 
     through 2019.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Ms. Snowe):
  S. 2806. A bill to require the Administrator of the Environmental 
Protection Agency to reconsider the decision of the Administrator to 
deny the request of the State of California to regulate greenhouse gas 
emissions from new motor vehicles, and to complete further proceedings 
in accordance with the decision of the Supreme Court in Massachusetts 
v. Environmental Protection Agency; to the Committee on Environment and 
Public Works.
  Mrs. FEINSTEIN. Mr. President, I rise today, on the 1-year 
anniversary of the Supreme Court's landmark Massachusetts v. EPA 
decision on global warming pollution, to introduce the Greenhouse Gas 
Endangerment Finding Deadline and California Waiver Reconsideration 
Act. The bill would force the EPA and this administration to act--at 
long last--against global warming.
  This legislation will impose two significant deadlines on the 
Environmental Protection Agency.
  First, the legislation gives EPA 60 days to respond to the 
Massachusetts v. EPA ruling.
  Second, this bill requires EPA to reconsider its unprecedented 
decision to deny the State of California a Federal

[[Page 4768]]

waiver that would have allowed the State to limit tailpipe greenhouse 
gas pollution from cars and trucks.
  Unfortunately, deadlines for EPA action are necessary in both cases.
  In its landmark Massachusetts v. EPA ruling, issued 1 year ago today, 
the Supreme Court gave EPA a specific task: Determine whether the 
emissions of greenhouse gases endanger public health and welfare, and 
then comply with the Clean Air Act requirements that result from this 
determination.
  Yet 1 year later, EPA has done nothing. EPA Administrator Johnson 
pledged to act by December, but that day came and went.
  I wrote to Administrator Johnson in January asking for a timeline for 
action.
  He wrote back to tell me he could not give me one.
  Last month, when I asked Mr. Johnson how many people were working on 
this endangerment finding, he could not tell me if anyone was working 
on it.
  In a March 27, 2008, letter to me and many of my colleagues, EPA 
indicated that it intends to begin soliciting comments from the public 
as the Agency ``considers'' regulations of greenhouse gas emissions.
  EPA's letter indicates that it does not intend to determine whether 
greenhouse gases endanger public health and welfare, as the court 
instructed it to do, anytime in the near future.
  Instead EPA's Administrator stated that ``implementing the Supreme 
Court's decision could affect many sources beyond just the cars and 
trucks considered by the Court,'' suggesting that the U.S. Supreme 
Court would have come to a different conclusion had it better 
understood the Clean Air Act.
  The process will not begin until ``later this spring.''
  EPA has no further timeline for action, nor has it set a deadline for 
completion.
  The plaintiffs in the Massachusetts v. EPA case today returned to 
court to compel the EPA to act. This bill is intended to work in tandem 
with their suit, compelling EPA to take an action, which both the 
courts and the law indicate should not be unreasonably delayed. No one 
should interpret this bill as a substitute for the courts taking action 
to compel EPA to act without delay under existing law. Both the new 
lawsuit and this bill are prompted by the clear failure of EPA to act 
on a reasonable timeline.
  Bottom Line: Responding to the Supreme Court's remand cannot and 
should not be delayed for an undefined period of time.
  EPA has had a full year to collect public comment and consider the 
implications of its response, and it has done so. EPA staff told 
Congress that they spent thousands of hours writing an endangerment 
finding and proposed regulations this past autumn. A draft has already 
been submitted to the White House Office of Management and Budget.
  This legislation puts EPA on the clock to finish the job it was 
assigned by the highest court in the land.
  The second deadline in this legislation requires the EPA 
Administrator to reconsider, and either confirm or reject, EPA 
Administrator Johnson's December decision to deny California a Clean 
Air Act waiver.
  Without the waiver, California and 15 other States are unable to 
control greenhouse gas emissions from automobiles.
  EPA Administrator Johnson denied this waiver even though EPA's legal 
and technical staff unanimously recommended that the waiver be issued.
  EPA's attorneys had told Mr. Johnson that a waiver denial in this 
case would ``in effect, amend the Clean Air Act by Administrative 
Action.''
  They told him that EPA would be sued and ``was likely to lose suit.''
  The decision was made before the legal justification had been 
written. EPA staff had been cut out of the process entirely.
  His official legal document, issued more than 2 months after Mr. 
Johnson issued the decision, asserts that the waiver was denied based 
almost entirely on the legislative history of the 1967 Clean Air Act. 
His legal document made no mention of the fact that Congress rewrote 
the operative section in 1977.
  In hearing after hearing, Mr. Johnson has asserted that he made this 
decision himself. Apparently he read the law differently than every one 
of his agency's experts and attorneys--a different reading he has never 
explained. But even he has acknowledged that the process under which 
this decision was made was unusual.
  I believe that an unusual process led to an unusual result.
  This bill would give EPA the opportunity to reconsider this decision. 
And with this reconsideration we will see whether a normal process will 
produce a different result.
  This legislation sets firm deadlines by which EPA must complete its 
work. It instructs the administration to act in the face of climate 
change. It brings an end to the delay and obfuscation that impede 
progress.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2806

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Greenhouse Gas Endangerment 
     Finding Deadline and California Waiver Reconsideration Act''.

     SEC. 2. REQUIREMENTS OF ADMINISTRATOR OF ENVIRONMENTAL 
                   PROTECTION AGENCY.

       (a) Reconsideration of Denial.--Not later than June 30, 
     2009, the Administrator of the Environmental Protection 
     Agency (referred to in this section as the ``Administrator'') 
     shall reconsider, and confirm or reverse, the decision of the 
     Administrator to deny the request of the State of California 
     to regulate greenhouse gas emissions from new motor vehicles.
       (b) Issuance of Finding.--Not later than 60 days after the 
     date of enactment of this Act, the Administrator shall issue 
     a finding in accordance with--
       (1) section 202(a)(1) of the Clean Air Act (42 U.S.C. 
     7521(a)(1)) with respect to whether the emission of 
     greenhouse gases from any 1 or more classes of new motor 
     vehicles or new motor vehicle engines, in the judgment of the 
     Administrator, causes or contributes to air pollution that 
     may reasonably be anticipated to endanger public health or 
     welfare; and
       (2) the decision of the Supreme Court in Massachusetts v. 
     Environmental Protection Agency, 127 S. Ct. 1438 (2007).

                          ____________________