[Pages S10151-S10191]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

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

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

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

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

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

[[Page S10152]]

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

S. 1881

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

SECTION 1. SHORT TITLE.

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

SEC. 2. FINDINGS AND PURPOSES.

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

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

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

SEC. 4. DISABILITY DEFINED.

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

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

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

[[Page S10153]]

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

SEC. 5. ADVERSE ACTION.

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

``SEC. 4. ADVERSE ACTION.

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

SEC. 6. DISCRIMINATION ON THE BASIS OF DISABILITY.

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

SEC. 7. QUALIFIED INDIVIDUAL.

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

SEC. 8. RULE OF CONSTRUCTION.

Section 501 of the Americans with Disabilities Act of 1990
(42 U.S.C. 12201) is amended by adding at the end the
following:
``(e) Broad Construction.--In order to ensure that this Act
achieves the purpose of providing a comprehensive prohibition
of discrimination on the basis of disability and to advance
the remedial purpose of this Act, the provisions of this Act
shall be broadly construed.
``(f) Regulations.--
``(1) In general.--Not later than 180 days after the date
of enactment of the Americans with Disabilities Act
Restoration Act of 2007--
``(A) the Attorney General, the Equal Employment
Opportunity Commission, and the Secretary of Transportation
shall issue regulations described in sections 106, 204, 223,
229, 244, and 306, as appropriate, including regulations that
implement sections 3 and 4, to carry out the corresponding
provisions of this Act, as this Act is amended by the
Americans with Disabilities Act Restoration Act of 2007; and
``(B) the Architectural and Transportation Barriers
Compliance Board shall issue supplementary guidelines
described in section 504, to supplement the existing Minimum
Guidelines and Requirements for Accessible Design for
purposes of titles II and III of this Act, as this Act is
amended by the Americans with Disabilities Act Restoration
Act of 2007.
``(2) Construction.--Nothing in this subsection shall be
construed to limit the authority of an officer or agency
described in paragraph (1) to issue regulations or guidelines
under any other provision of this Act, other than this
subsection.
``(g) Deference to Regulations and Guidance.--Duly issued
Federal regulations and guidance for the implementation of
the Americans with Disabilities Act of 1990, including
provisions implementing and interpreting the definition of
disability, shall be entitled to deference by administrative
agencies or officers, and courts, deciding an issue in any
action brought under this Act.''.
______

By Mr. HAGEL (for himself, Mr. Durbin, Mr. Biden, and Mrs.
Boxer):
S. 1882. A bill to amend the Public Health Service Act to establish
various programs for the recruitment and retention of public health
workers and to eliminate critical public health workforce shortages in
Federal, State, local, and tribal public health agencies; to the
Committee on Health, Education, Labor, and Pensions.
Mr. DURBIN. Mr. President, in the last few years, our Nation's public
health has been threatened repeatedly. We have faced natural disasters
like the horrific damage done by Hurricane Katrina. We have endured
human-led catastrophes like the tragic September 11 attacks. Only a
couple of months ago, a man infected with a potentially lethal strain
of extremely drug-resistant tuberculosis was able to travel from his
home in Atlanta to France, Greece, the Czech Republic, and Canada,
before ending up at a center in Denver for treatment.
These emergencies have made it clear that our public health system
must be prepared for the unexpected.
Our ability to prevent, respond to, and recover from incidents like
these depends upon an adequately staffed and well trained public health
workforce. But if we look at our public health workforce today, what we
see is alarming: an aging staff nearing retirement with no clear
pipeline of trained employees to fill the void.
The average age of lab technicians, epidemiologists, environmental
health experts, microbiologists, IT specialists, administrators, and
other public health workers is 47. That is 7 years older than the
average age of the Nation's workforce. Retirement rates are as high as
20 percent in some State public health agencies. Nearly half of the
Federal employees in positions critical to our biodefense will be
eligible to retire by 2012. The average age of a public health nurse is
near 50 years.
These statistics are sobering. As the responsibilities of our public
health workforce are growing, their ranks continue to shrink. These are
shortages that impact not just for the security of our health, but our
national security.
We can't afford to overlook this problem any longer. For the third
consecutive Congress, Senator Hagel and I are introducing the Public
Health Preparedness Workforce Development Act of 2007. This is a bill
that will increase the pipeline of qualified public health workers at
all levels--Federal, State, local, and tribal. It offers scholarships
and loan repayment as recruitment and retention incentives for students
who enter and stay in the field of public health. It also provides
opportunities for mid-career public health professionals to go back for
additional training in public health preparedness or biodefense.
The time to prepare for a public health emergency, whether that be a
natural disaster or one of our own making, is not tomorrow, nor next
month, nor a year from now, but today. Looking forward we must
strengthen our public health workforce. I urge my colleagues to join me
and the Senator from Nebraska in taking up and passing the Public
Health Preparedness Workforce Development Act. We must all make a
commitment to securing the safety of our nation, and that security
begins with our public health.
______

By Mr. KOHL (for himself, Mr. Dorgan, and Mr. Wyden):
S. 1883. A bill to amend title XVIII of the Social Security Act to
provide for standardized marketing requirements under the Medicare
Advantage program and the Medicare prescription drug program and to
provide for State certification prior to waiver of licensure
requirements under the Medicare prescription drug program, and for
other purposes; to the Committee on Finance.
Mr. KOHL. Mr. President, I rise today to introduce the Accountability
and Transparency in Medicare Marketing Act, on behalf of myself and
Senator Dorgan and Wyden. This legislation aims to regulate the
marketing standards and sales tactics of Medicare Advantage and
Medicare prescription drug plans, now the fastest growing segment of
Medicare and a prime target for fraud, misrepresentation, and deceptive
sales practices.
As chairman of the Special Committee on Aging, I recently held a
hearing entitled, ``Medicare Advantage Marketing and Sales: Who Has the
Advantage?'' Our hearing uncovered that a large majority of State
insurance departments have received, and continue to receive, an
unprecedented number of complaints about inappropriate or confusing
marketing practices that have led Medicare beneficiaries to enroll in
Medicare Advantage plans without adequately understanding the
consequences of their decisions.
My legislation will facilitate the creation of uniform marketing
standards that will be adopted and enforced by individual states. Based
on current law, CMS has exclusive authority to investigate and
discipline the marketing and selling of Medicare advantage products,
while States have only been permitted to examine and enforce violations
against individual insurance agents. This unusual arrangement, which
some might call a pre-emption of authority, has left a sizable
enforcement gap that has exacerbated the problems found by the
committee.
This legislation will close that gap, giving States the ability to
standardize marketing and sales regulations, as well as regulate both
agents and companies in the marketing and sales of

[[Page S10154]]

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

S. 1883

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

SECTION 1. SHORT TITLE.

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

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

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

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

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

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

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

[[Page S10155]]

and Human Services shall request the National Association of
Insurance Commissioners to establish a committee to study and
make recommendations to the Secretary and Congress on--
(1) the establishment of standardized benefit packages for
Medicare Advantage plans under part C of title XVIII of the
Social Security Act and for prescription drug plans under
part D of such Act; and
(2) the regulation of such plans.
______

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

[[Page S10156]]

Fourth, the Harvesting Energy Act invests in research and development
in new production technologies that promise to yield high energy
returns and carbon storage. One of the key investments that this bill
makes is in biochar. Biochar is a type of charcoal produced from
biomass that is valuable as a soil amendment. The USDA and DOE are
finding that they can produce biochar as a carbon-capturing byproduct
of cellulosic ethanol production. This is good for farmers, who put the
biochar back into the soil as a fertilizer, good for the environment
because it reduces carbon emissions, and good for consumers because it
could drive down cellulosic ethanol production costs. My bill would
provide $50 million in competitive funding for research and development
grants to scale-up and commercialize biochar production systems. Like
so much else we are doing in the energy title of the farm bill, this
would move ideas from the research pipeline out into the field, where
they need to be.
This bill includes a wide range of other provisions that build on the
good work that the Agriculture Committee is doing on the farm bill.
Like the provisions I have described, they aim to expand the menu of
renewable energy options we have available as we work to reduce our
dependence on foreign oil.
I again thank Chairman Harkin and Senator Chambliss for their
leadership on the Agriculture Committee and for their commitment to
creating a robust energy title in this year's farm bill. I firmly
believe that with the right investments and a commitment from this
Congress, our farmers and ranchers can help lead us down the path to
energy independence.
______

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

[[Page S10157]]

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

S. 1887

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

SECTION 1. SHORT TITLE.

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

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

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

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

``(ii) Newly approved drugs.--

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

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

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

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

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

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

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

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

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

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

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

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

[[Page S10158]]

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

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

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

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

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

Access to Critical Medications

Coalition,

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

American Psychiatric Association,

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

[[Page S10159]]

Furthermore, the study found that the most common medication
classes with coverage problems included atypical
antipsychotics, antidepressants, and anticonvulsants (West,
Wilk, Muszynski et al, American Journal of Psychiatry, 164:5
May 2007).
Clearly, Part D patients will receive better care, and the
Medicare program as a whole will save money, if access to
important medications can be improved. Your legislation will
create new statutory protections that will address a number
of the most serious barriers.
We greatly appreciate your leadership--and the hard work of
your staff Matthew Canedy and Catherine Finley--in addressing
this serious problem.
Sincerely,
Carolyn B. Robinowitz, M.D.,
President.
______

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

S. 1892

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

SECTION 1. SHORT TITLE.

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

SEC. 2. TABLE OF CONTENTS.

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

TITLE I--AUTHORIZATIONS

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

TITLE II--ORGANIZATION

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

TITLE III--PERSONNEL

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

TITLE IV--ADMINISTRATION

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

TITLE V--SHIPPING AND NAVIGATION

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

TITLE VI--MARITIME LAW ENFORCEMENT

Sec. 601. Maritime law enforcement.

TITLE VII--OIL POLLUTION PREVENTION

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

[[Page S10160]]

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

TITLE VIII--MARITIME HAZARDOUS CARGO SECURITY

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

TITLE IX--MISCELLANEOUS PROVISIONS

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

TITLE I--AUTHORIZATIONS

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

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

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

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

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

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

TITLE II--ORGANIZATION

SEC. 201. VICE COMMANDANT; VICE ADMIRALS.

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

``Sec. 50. Vice admirals

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

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

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

[[Page S10161]]

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

SEC. 202. MERCHANT MARINER MEDICAL ADVISORY COMMITTEE.

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

``Sec. 55. Merchant Mariner Medical Advisory Committee

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

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

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

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

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

TITLE III--PERSONNEL

SEC. 301. EMERGENCY LEAVE RETENTION AUTHORITY.

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

SEC. 302. LEGAL ASSISTANCE FOR COAST GUARD RESERVISTS.

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

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

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

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

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

[[Page S10162]]

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

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

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

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

SEC. 306. ENHANCED STATUS QUO OFFICER PROMOTION SYSTEM.

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

SEC. 307. APPOINTMENT OF CIVILIAN COAST GUARD JUDGES.

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

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

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

TITLE IV--ADMINISTRATION

SEC. 401. COOPERATIVE AGREEMENTS FOR INDUSTRIAL ACTIVITIES.

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

SEC. 402. DEFINING COAST GUARD VESSELS AND AIRCRAFT.

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

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

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

SEC. 403. SPECIALIZED INDUSTRIAL FACILITIES.

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

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

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

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

[[Page S10163]]

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

TITLE V--SHIPPING AND NAVIGATION

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

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

SEC. 502. CLARIFICATION OF RULEMAKING AUTHORITY.

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

``Sec. 70122. Regulations

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

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

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

SEC. 504. NANTUCKET SOUND SHIP CHANNEL WEATHER BUOY.

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

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

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

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

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

SEC. 506. VESSEL REBUILD DETERMINATIONS.

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

TITLE VI--MARITIME LAW ENFORCEMENT

SEC. 601. MARITIME LAW ENFORCEMENT.

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

``CHAPTER 707--MARITIME LAW ENFORCEMENT

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

``Sec. 70701. Offense

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

``Sec. 70702. Attempt or conspiracy

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

``Sec. 70703. Affirmative defenses

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

[[Page S10164]]

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

``Sec. 70704. Penalties

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

``Sec. 70705. Criminal forfeiture

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

``Sec. 70706. Civil forfeiture

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

``Sec. 70707. Extraterritorial jurisdiction

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

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

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

``Sec. 70709. Federal activities

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

``Sec. 70710. Definitions

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

TITLE VII--OIL POLLUTION PREVENTION

SEC. 701. RULEMAKINGS.

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

SEC. 702. OIL SPILL RESPONSE CAPABILITY.

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

SEC. 703. OIL TRANSFERS FROM VESSELS.

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

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

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

SEC. 705. OLYMPIC COAST NATIONAL MARINE SANCTUARY.

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

[[Page S10165]]

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

SEC. 706. PREVENTION OF SMALL OIL SPILLS.

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

SEC. 707. IMPROVED COORDINATION WITH TRIBAL GOVERNMENTS.

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

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

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

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

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

SEC. 710. INTERNATIONAL EFFORTS ON ENFORCEMENT.

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

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

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

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

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

[[Page S10166]]

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

SEC. 713. RESPONSE TUGS.

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

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

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

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

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

SEC. 714. TUG ESCORTS FOR LADEN OIL TANKERS.

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

SEC. 715. EXTENSION OF FINANCIAL RESPONSIBILITY.

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

SEC. 716. VESSEL TRAFFIC RISK ASSESSMENTS.

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

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

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

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

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

TITLE VIII--MARITIME HAZARDOUS CARGO SECURITY

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

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

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

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

[[Page S10167]]

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

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

SEC. 802. VALIDATION OF COMPLIANCE WITH ISPFC STANDARDS.

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

``70110A. Port safety and security validations

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

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

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

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

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

SEC. 804. COAST GUARD PORT ASSISTANCE PROGRAM.

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

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

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

SEC. 806. TRANSPORTATION SECURITY INCIDENT MITIGATION PLAN.

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

SEC. 807. INCIDENT COMMAND SYSTEM TRAINING.

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

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

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

[[Page S10168]]

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

SEC. 809. DEFINITIONS.

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

TITLE IX--MISCELLANEOUS PROVISIONS

SEC. 901. MARINE MAMMALS AND SEA TURTLES REPORT.

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

SEC. 902. UMPQUA LIGHTHOUSE LAND CONVEYANCE.

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

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

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

[[Page S10169]]

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

SEC. 904. DATA.

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

SEC. 905. EXTENSION.

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

SEC. 906. FORWARD OPERATING FACILITY.

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

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

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

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

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

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

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

[[Page S10170]]

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

SEC. 910. REPEALS.

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

SEC. 911. REPORT ON SHIP TRAFFIC.

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

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

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

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

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

SEC. 914. SHIP DISPOSAL WORKING GROUP.

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

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

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

[[Page S10171]]

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

SEC. 916. PROTECTION AND FAIR TREATMENT OF SEAFARERS.

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

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

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

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

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

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

[[Page S10172]]

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

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

SEC. 917. ICEBREAKERS.

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

SEC. 918. FUR SEAL ACT AUTHORIZATION.

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

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

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

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

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

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

[[Page S10173]]

thousands of illegal immigrants annually. The Maritime Alien Smuggling
Law Enforcement Act, contained within this bill would close this
serious loophole at the frontline of our homeland security efforts.
The bill also contains provisions vital to navigation security,
including a requirement that the Coast Guard continue to operate the
LORAN-C navigation system. Though advances in Global Positioning System
technology have allowed our mariners to receive accurate, timely
positioning data, many seafarers, particularly in the northern
latitudes where GPS signals are less strong, still rely on LORAN
signals as a back-up to their more modern systems, or in some cases, as
a primary navigation aid.
The service men and women of the Coast Guard do yeoman's work in
support of our homeland security and to ensure the safety of the
maritime domain, and this bill also contains provisions to help them in
numerous ways. Provisions ensure the Government is providing adequate
access to medical care for those stationed on remote islands; grants
Coast Guard servicemen and women access to the armed forces retirement
homes; and authorizes funding for additional facilities to improve
their quality of life.
In sum, this bill contains provisions too numerous to mention
individually that support the Coast Guard's missions and enhance its
ability to safeguard our homeland, our environment, and our maritime
operations. I thank Senator Cantwell and the rest of my fellow co-
sponsors for all their hard work on this bill, and I ask my colleagues
in this body to join me in expressing support for the valiant men and
women of the Coast Guard and this bill that will facilitate execution
of their appointed missions.
______

By Mr. BAUCUS:
S. 1893. An original bill to amend title XXI of the Social Security
Act to reauthorize the State Children's Health Insurance Program, and
for other purposes; from the Committee on Finance; placed on the
calendar.
Mr. BAUCUS. Mr. President, I ask unanimous consent the following
material regarding today's introduction of S. 1893, the Children's
Health Insurance Program Reauthorization Act of 2007, be included in
the Record, July 26, 2007 letter from the Congressional Budget Office;
and Technical Summary of the Children's Health Insurance Program
Reauthorization Act of 2007.
There being no objection, the material was ordered to be printed in
the Record, as follows:

U.S. Congress,

Congressional Budget Office,

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

CBO'S ESTIMATE OF THE EFFECTS ON DIRECT SPENDING AND REVENUES OF THE CHILDREN'S HEALTH INSURANCE PROGRAM REAUTHORIZATION ACT OF 2007
[Based on the legislative language ERN07632, provided by the Senate Committee on Finance on July 26, 2007]
Figures are outlays, by fiscal year, in billions of dollars. Costs or savings of less than $50 million are shown with an asterisk. Components may not
sum to totals because of rounding.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008-12 2008-17
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING

SCHIP outlays from the funding provided in
sections 101, 103, 104, and 105 of the bill:
Benefits and administration costs............. 2.2 3.8 5.5 6.5 7.4 -0.4 -1.8 -1.8 -1.7 -1.6 25.4 18.1
Incentive payments............................ 0 0.4 0.6 0.8 0.9 1.0 1.1 1.2 1.2 1.3 2.7 8.4
-----------------------------------------------------------------------------------------------------
Subtotal.................................. 2.2 4.1 6.1 7.2 8.4 0.6 -0.7 -0.6 -0.4 -0.3 28.1 26.5
Medicaid outlays due to interactions with the -0.3 0.3 1.2 1.6 1.8 4.5 6.0 7.1 7.7 8.4 4.7 38.4
SCHIP outlays shown above........................
Other changes in direct spending that are not
included with the SCHIP and Medicaid totals
above:
104 Additional administrative funding for * * * * * * * * * * 0.1 0.1
territories..................................
105 Funding for improved reporting of * * 0 0 0 0 0 0 0 0 * *
Medicaid enrollment..........................
108 Contingency fund......................... 0 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.3 1.1
201 Grants for outreach and enrollment....... * * * * 0.1 * * * * * 0.2 0.4
203 Express Lane demonstration project....... * * * * * 0 0 0 0 0 * *
301 Revise requirement to document 0 0.3 0.3 0.4 0.4 0.4 0.4 0.5 0.5 0.6 1.4 3.7
citizenship..................................
501 Development of quality measures for child * 0.1 0.1 0.1 0.1 * * * * * 0.3 0.4
health.......................................
604 Additional funding for Current Population * * * * * * * * * * 0.1 0.1
Survey.......................................
608 Dental health grants..................... * 0.1 0.1 0.1 * 0 0 0 0 0 0.2 0.2
609 Transition grants for payment of FQHC / * * 0 0 0 0 0 0 0 0 * *
RHC services.................................
-----------------------------------------------------------------------------------------------------
Subtotal.................................. 0.1 0.5 0.6 0.6 0.6 0.7 0.7 0.7 0.8 0.8 2.4 6.1
Total changes in direct spending...... 2.1 5.0 7.9 9.4 10.8 5.8 6.0 7.2 8.0 8.9 35.2 71.0

CHANGES IN REVENUES
On-budget revenues:
701 Increased taxes on tobacco products...... 6.2 7.6 7.4 7.3 7.3 7.2 7.1 7.1 7.0 6.9 35.7 71.1
703 Changed timing of corporate estimated tax 0 0 0 0 -0.9 -0.9 0 0 0 0 -0.9 0
payments.....................................
Effect of SCHIP provisions on on-budget * 0.1 0.1 0.1 0.1 0.1 * * * * 0.5 0.7
revenues.....................................
-----------------------------------------------------------------------------------------------------
Subtotal.................................. 6.2 7.7 7.5 7.4 6.5 8.2 7.2 7.1 7.0 7.0 35.3 71.7
Off-budget revenues (due to SCHIP provisions)..... 0.1 0.2 0.2 0.2 0.2 0.1 * * * 0.1 0.8 1.1
Total changes in revenues............. 6.3 7.8 7.7 7.6 6.7 8.3 7.2 7.1 7.1 7.0 36.1 72.8
Net budgetary effect of legislation:
Direct spending and on-budget revenues........ -4.2 -2.7 0.4 2.0 4.3 -2.4 -1.2 0.1 1.0 1.9 -0.1 -0.8
Direct spending and all revenues.............. -4.3 -2.8 0.2 1.3 4.1 -2.5 -1.2 * 0.9 1.8 -0.9 -1.8
Memorandum:
SCHIP outlays under CBO's baseline................ 5.4 5.4 5.5 5.5 5.6 5.5 5.3 5.3 5.2 5.1 27.4 53.8
Additional SCHIP outlays under proposal........... 2.3 4.3 6.2 7.4 8.5 0.7 -0.6 -0.5 -0.3 -0.2 28.6 27.9
Total SCHIP outlays under proposal................ 7.7 9.7 11.7 12.9 14.1 6.2 4.7 4.8 4.9 5.0 56.1 81.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page S10174]]

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

n.a. = not applicable

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

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

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

Title I--Financing of CHIP

Section 101. Extension of CHIP

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

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

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

[[Page S10175]]

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

Section 103. One-Time Appropriation for FY2012

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

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

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

Section 105. Incentive bonuses for states

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

[[Page S10176]]

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

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

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

[[Page S10177]]

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

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

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

[[Page S10178]]

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

Section 108. CHIP contingency fund

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

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

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

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

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

[[Page S10179]]

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

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

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

Title II--A Outreach and Enrollment

Section 201. Grants for outreach and enrollment

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

[[Page S10180]]

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

Section 202. Increased outreach and enrollment of Indians

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

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

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

[[Page S10181]]

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

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

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

[[Page S10182]]

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

Title III--Removal of Barriers to Enrollment

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

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

Section 302. Reducing administrative barriers to enrollment

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

Title IV--Elmination of Barriers to Providing Premium Assistance

Subtitle A--Additional State Option for Providing Premium Assistance

Section 401. Additional State option for providing premium assistance

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

[[Page S10183]]

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

Section 402. Outreach, education, and enrollment assistance

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

[[Page S10184]]

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

Subtitle B--Coordinating Premium Assistance With Private Coverage

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

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

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

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

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

[[Page S10185]]

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

[[Page S10186]]

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

[[Page S10187]]

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

Section 502. Improved information regarding access to overage under
CHIP

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

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

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

Title VI--Miscellaneous

Section 601. Technical correction regarding current State authority
under Medicaid

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

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

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

[[Page S10188]]

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

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

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

Section 604. Improving data collection

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

[[Page S10189]]

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

Section 605. Deficit Reduction Act Technical Correction

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

Section 606. Elimination of confusing program references

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

Section 607. Mental Health Parity in CHIP Plans

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

Section 608. Dental Health Grants

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

[[Page S10190]]

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

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

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

Title VII--Revenue Provisions

Title VIII--Effective Date

Section 801. Effective date

Current Law
No provision.
Explanation of Provision
The effective date of this bill except with respect to
section 301 would be October 1, 2007, whether or not final
regulations to carry out provisions in the bill have been
promulgated by that date. In the case of both current state
CHIP and Medicaid plans, if the Secretary of HHS determines
that a state must pass new state legislation to implement the
requirements of this bill, the state's existing CHIP and/or
Medicaid plans, if applicable, would not be considered to be
out of compliance solely on the basis of its failure to meet
such requirements before the first day of the first calendar
quarter beginning after the close of the first regular
session of the state legislature that begins after the date
of enactment of this bill. In the case of a state that has a
2-year legislative session, each year of such session must be
considered to be a separate regular session of the state
legislature. With respect to section 301, the effective date
will be October 1, 2008.
______

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

S. 1894

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

SECTION 1. SHORT TITLE.

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

SEC. 2. SERVICEMEMBER FAMILY LEAVE.

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

[[Page S10191]]

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

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

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

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