109th CONGRESS
2d Session
H. R. 4845
To better prepare and develop the United States workforce for the
global economy, and remove barriers that stifle innovation.
IN THE HOUSE OF REPRESENTATIVES
March 2, 2006
Mr. GOODLATTE (for himself, Mr. SMITH of Texas, Mrs. JOHNSON of Connecticut,
Mr. PUTNAM, Mr. SWEENEY, and Mr. TIAHRT) introduced the following bill;
which was referred to the Committee on the Judiciary, and in addition to
the Committees on Ways and Means, Science, Education and the Workforce,
and Energy and Commerce, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction of the committee concerned
A BILL
To better prepare and develop the United States workforce for the
global economy, and remove barriers that stifle innovation.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `Innovation and Competitiveness
Act'.
Sec. 1. Short title; table of contents.
TITLE I--REDUCE RED TAPE AND CREATE OPPORTUNITIES FOR ECONOMIC GROWTH
Subtitle A--Business Activity Tax Simplification
Sec. 102. Removal of certain limitations on the application of Public
Law 86-272.
`Sec. 105. Removal of certain limitations on the application of Public
Law 86-272.
Sec. 103. Jurisdictional standard for State and local net income taxes
and other business activity taxes.
Sec. 105. Effective date.
Subtitle B--Attorney Accountability
Sec. 122. Attorney accountability.
Sec. 123. Applicability of Rule 11 to State cases affecting interstate
commerce.
Sec. 124. Prevention of forum-shopping.
Sec. 125. Rule of construction.
Sec. 126. Three-strikes Rule for suspending attorneys who commit multiple
Rule 11 violations.
Sec. 127. Presumption of Rule 11 violation for repeatedly relitigating
same issue.
Sec. 128. Enhanced sanctions for document destruction in pending Federal
court proceedings.
Sec. 129. Ban on concealment of unlawful conduct.
TITLE II--INCREASE AMERICA'S TALENT POOL
Sec. 201. Innovation Scholarship Program.
`SUBPART 6--INNOVATION SCHOLARSHIP PROGRAM
`Sec. 419A. Innovation mathematics and science honors scholarship program.
`Sec. 419B. Mathematics and science incentive program.
`Sec. 419C. Mathematics and science education coordinating council grants.
`Sec. 419D. Authorization of appropriations.
TITLE III--PROMOTION OF RESEARCH AND DEVELOPMENT
Sec. 303. Permanent extension of research credit.
Sec. 304. Increase in rates of alternative incremental credit.
Sec. 305. Alternative simplified credit for qualified research expenses.
TITLE IV--INCREASE ACCESS TO AND EFFICIENCY OF HEALTH CARE
Subtitle A--Health Care Choice
Sec. 401. Short title of subtitle.
Sec. 402. Specification of constitutional authority for enactment of law.
Sec. 404. Cooperative governing of individual health insurance coverage.
`Part D--Cooperative Governing of Individual Health Insurance Coverage
`Sec. 2795. Definitions.
`Sec. 2796. Application of law.
`Sec. 2797. Primary State must meet Federal floor before issuer may sell
into secondary States.
`Sec. 2798. Enforcement.
Subtitle B--Health Information Technology Promotion
Sec. 411. Short title of subtitle.
Sec. 412. Office of the National Coordinator for Health Information Technology.
`Part D--Health Information Technology
`Sec. 271. Office of the National Coordinator for Health Information Technology.
Sec. 413. Safe harbors for provision of health information technology
and training services to health care professionals.
Sec. 414. Uniform health information laws and regulations.
Sec. 415. Rulemaking to upgrade ASC X12 and NCPDP standards and ICD codes.
Sec. 416. Report on the American Health Information Community.
Sec. 417. Strategic plan for coordinating implementation of health information
technology.
TITLE V--SEAMLESS MOBILITY
Sec. 501. Prohibition on impeding.
TITLE I--REDUCE RED TAPE AND CREATE OPPORTUNITIES FOR ECONOMIC GROWTH
Subtitle A--Business Activity Tax Simplification
SEC. 101. SHORT TITLE.
This subtitle may be cited as the `Business Activity Tax Simplification
Act of 2006'.
SEC. 102. REMOVAL OF CERTAIN LIMITATIONS ON THE APPLICATION OF PUBLIC
LAW 86-272.
(a) Solicitations With Respect to Sales and Transactions of Other Than Tangible
Personal Property- Section 101 of the Act entitled `An Act relating to the
power of the States to impose net income taxes on income derived from interstate
commerce, and authorizing studies by congressional committees of matters
pertaining thereto', approved September 14, 1959 (15 U.S.C. 381 et seq.),
is amended--
(1) in subsection (a)(1) by striking `of tangible' and all that follows
through `State; and' and inserting the following: `or transactions, which
orders are sent outside the State for approval or rejection and, if approved,
are--
`(A) in the case of tangible personal property, filled by shipment or
delivery from a point outside the State; and
`(B) in the case of all other forms of property, services, and other
transactions, fulfilled from a point outside the State;
(A) by inserting `or fulfilling transactions' after `making sales';
(B) by inserting `or transactions' after `sales' the other places it
appears; and
(C) by striking `of tangible personal property' each place it appears;
and
(3) in subsection (d)(1) by striking `the sale of, tangible personal property'
and inserting `a sale or transaction,'.
(b) Application of Prohibitions to Other Business Activity Taxes- Title
I of the Act entitled `An Act relating to the power of the States to impose
net income taxes on income derived from interstate commerce, and authorizing
studies by congressional committees of matters pertaining thereto', approved
September 14, 1959 (15 U.S.C. 381 et seq.), is amended by adding at the
end the following:
`SEC. 105. Beginning with taxable periods beginning on or after the first
day of the first calendar year that begins after the date of the enactment
of the Business Activity Tax Simplification Act of 2006, the prohibitions
of section 101 that apply with respect to net income taxes shall also apply
with respect to each other business activity tax, as defined in section
104 of the Business Activity Tax Simplification Act of 2006. A State or
political subdivision thereof may not assess or collect any tax which by
reason of this section the State or political subdivision may not impose.'.
(c) Effective Date of Subsection (a) Amendments- The amendments made by
subsection (a) shall apply with respect to the imposition, assessment, and
collection of taxes for taxable periods beginning on or after the first
day of the first calendar year that begins after the date of the enactment
of the Business Activity Tax Simplification Act of 2006.
SEC. 103. JURISDICTIONAL STANDARD FOR STATE AND LOCAL NET INCOME TAXES
AND OTHER BUSINESS ACTIVITY TAXES.
(a) In General- No taxing authority of a State shall have power to impose,
assess, or collect a net income tax or other business activity tax on any
person relating to such person's activities in interstate commerce unless
such person has a physical presence in the State during the taxable period
with respect to which the tax is imposed.
(b) Requirements for Physical Presence- For the purposes of subsection (a),
a person has a physical presence in a State only if such person's business
activities in the State include any of the following, collectively and on
more than 21 days in the aggregate, during such person's taxable year:
(1) Being an individual physically in the State, or assigning one or more
employees to be in the State, except that the following shall be excluded
in determining whether such 21-day limit has been exceeded:
(A) Activities in connection with a possible or an actual purchase of
goods or services, for consumption by the person's business.
(B) Gathering news and covering events for print, broadcast, or other
distribution through the media.
(C) Meeting government officials for purposes other than selling goods
or services, for consumption by such government.
(D) Merely attending educational or training conferences, seminars or
other similar functions.
(E) Participating in charitable activities.
(2) Using the services of an agent (excluding an employee) to establish
or maintain the market in the State, if such agent does not perform business
services in the State for any other person during such taxable year.
(3) The leasing or owning of tangible personal property or of real property
in the State, except that the following shall be excluded in determining
whether such 21-day limit has been exceeded:
(A) Tangible personal property located in the State for purposes of
being assembled, manufactured, processed, or tested by another person
for the benefit of the owner or lessee, or used to furnish a service
to the owner or lessee by another person.
(B) Marketing or promotional materials distributed in the State.
(C) Any property to the extent used ancillary to an activity excluded
from the computation of the 21-day period based on paragraph (1) or
(2).
(c) Taxable Periods Not Consisting of a Year- If the taxable period for
which the tax is imposed is not a year, then any requirements expressed
in days for establishing physical presence under this subtitle shall be
adjusted pro rata accordingly.
(1) DOMESTIC BUSINESS ENTITIES AND INDIVIDUALS DOMICILED IN, OR RESIDENTS
OF, THE STATE- Subsection (a) does not apply with respect to--
(A) a person (other than an individual) that is incorporated or formed
under the laws of the State (or domiciled in the State) in which the
tax is imposed; or
(B) an individual who is domiciled in, or a resident of, the State in
which the tax is imposed.
(2) TAXATION OF PARTNERS AND SIMILAR PERSONS- This section shall not be
construed to modify or affect any State business activity tax liability
of an owner or beneficiary of an entity that is a partnership, an S corporation
(as defined in section 1361 of the Internal Revenue Code of 1986 (26 U.S.C.
1361)), a limited liability company, a trust, an estate, or any other
similar entity, if the entity has a physical presence in the State in
which the tax is imposed.
(3) PRESERVATION OF AUTHORITY- This section shall not be construed to
modify, affect, or supersede the authority of a State to bring an enforcement
action against a person or entity that may be engaged in an illegal activity,
a sham transaction, or any perceived or actual abuse in its business activities
if such enforcement action--
(A) is of a kind customarily used by the State; and
(B) does not modify, affect, or supersede the operation of any provision
of this subtitle or of any other Federal law.
(4) CERTAIN ACTIVITIES- With respect to the following, subsection (b)
shall be read by substituting `at least one day' for `more than 21 days
in the aggregate':
(A) The sale within a State of tangible personal property, if delivery
of the property originates and is completed within the State.
(B) The performance of services that physically affect real property
within a State.
(5) EXCEPTION RELATING TO CERTAIN PERFORMANCES AND SPORTING EVENTS- With
respect to the taxation of the following, subsection (b) shall be read
by substituting `at least one day' for `more than 21 days in the aggregate':
(A) A live performance in a State, before a live audience of more than
100 individuals.
(B) A live sporting event in a State before more than 100 spectators
present at the event.
(e) Rule of Construction- This section shall not be construed to modify,
affect, or supersede the operation of title I of the Act entitled `An Act
relating to the power of the States to impose net income taxes on income
derived from interstate commerce, and authorizing studies by congressional
committees of matters pertaining thereto', approved September 14, 1959 (15
U.S.C. 381 et seq.).
SEC. 104. DEFINITIONS.
The following definitions apply in this subtitle:
(1) NET INCOME TAX- The term `net income tax' has the meaning given that
term for the purposes of the Act entitled `An Act relating to the power
of the States to impose net income taxes on income derived from interstate
commerce, and authorizing studies by congressional committees of matters
pertaining thereto', approved September 14, 1959 (15 U.S.C. 381 et seq.).
(2) OTHER BUSINESS ACTIVITY TAX-
(A) The term `other business activity tax' means--
(i) a tax imposed on or measured by gross receipts, gross income,
or gross profits;
(ii) a business license tax;
(iii) a business and occupation tax;
(v) a single business tax or a capital stock tax; or
(vi) any other tax imposed by a State on a business for the right
to do business in the State or measured by the amount of, or economic
results of, business or related activity conducted in the State.
(B) The term `other business activity tax' does not include a sales
tax, a use tax, or a similar tax, imposed as the result of the sale
or acquisition of goods or services, whether or not denominated a tax
imposed on the privilege of doing business.
(3) STATE- The term `State' means any of the several States, the District
of Columbia, or any territory or possession of the United States, or any
political subdivision of any of the foregoing.
(4) TANGIBLE PERSONAL PROPERTY- The term `tangible personal property'
does not include computer software that is owned and licensed by the owner
to another person.
SEC. 105. EFFECTIVE DATE.
Except as provided otherwise in this subtitle, this subtitle applies with
respect to taxable periods beginning on and after the first day of the first
year that begins after the date of enactment of this Act.
Subtitle B--Attorney Accountability
SEC. 121. SHORT TITLE.
This subtitle may be cited as the `Lawsuit Abuse Reduction Act of 2006'.
SEC. 122. ATTORNEY ACCOUNTABILITY.
Rule 11(c) of the Federal Rules of Civil Procedure is amended--
(1) by amending the first sentence to read as follows: `If a pleading,
motion, or other paper is signed in violation of this rule, the court,
upon motion or upon its own initiative, shall impose upon the attorney,
law firm, or parties that have violated this subdivision or are responsible
for the violation, an appropriate sanction, which may include an order
to pay the other party or parties for the reasonable expenses incurred
as a direct result of the filing of the pleading, motion, or other paper,
that is the subject of the violation, including a reasonable attorney's
fee.';
(2) in paragraph (1)(A)--
(A) by striking `Rule 5' and all that follows through `corrected.' and
inserting `Rule 5.'; and
(B) by striking `the court may award' and inserting `the court shall
award'; and
(3) in paragraph (2), by striking `shall be limited to what is sufficient'
and all that follows through the end of the paragraph (including subparagraphs
(A) and (B)) and inserting `shall be sufficient to deter repetition of
such conduct or comparable conduct by others similarly situated, and to
compensate the parties that were injured by such conduct. The sanction
may consist of an order to pay to the party or parties the amount of the
reasonable expenses incurred as a direct result of the filing of the pleading,
motion, or other paper that is the subject of the violation, including
a reasonable attorney's fee.'.
SEC. 123. APPLICABILITY OF RULE 11 TO STATE CASES AFFECTING INTERSTATE
COMMERCE.
In any civil action in State court, the court, upon motion, shall determine
within 30 days after the filing of such motion whether the action substantially
affects interstate commerce. Such court shall make such determination based
on an assessment of the costs to the interstate economy, including the loss
of jobs, were the relief requested granted. If the court determines such
action substantially affects interstate commerce, the provisions of Rule
11 of the Federal Rules of Civil Procedure shall apply to such action.
SEC. 124. PREVENTION OF FORUM-SHOPPING.
(a) In General- Subject to subsection (b), a personal injury claim filed
in State or Federal court may be filed only in the State and, within that
State, in the county (or if there is no State court in the county, the nearest
county where a court of general jurisdiction is located) or Federal district
in which--
(1) the person bringing the claim, including an estate in the case of
a decedent and a parent or guardian in the case of a minor or incompetent--
(A) resides at the time of filing; or
(B) resided at the time of the alleged injury;
(2) the alleged injury or circumstances giving rise to the personal injury
claim allegedly occurred;
(3) the defendant's principal place of business is located, if the defendant
is a corporation; or
(4) the defendant resides, if the defendant is an individual.
(b) Determination of Most Appropriate Forum- If a person alleges that the
injury or circumstances giving rise to the personal injury claim occurred
in more than one county (or Federal district), the trial court shall determine
which State and county (or Federal district) is the most appropriate forum
for the claim. If the court determines that another forum would be the most
appropriate forum for a claim, the court shall dismiss the claim. Any otherwise
applicable statute of limitations shall be tolled beginning on the date
the claim was filed and ending on the date the claim is dismissed under
this subsection.
(c) Definitions- In this section:
(1) The term `personal injury claim'--
(A) means a civil action brought under State law by any person to recover
for a person's personal injury, illness, disease, death, mental or emotional
injury, risk of disease, or other injury, or the costs of medical monitoring
or surveillance (to the extent such claims are recognized under State
law), including any derivative action brought on behalf of any person
on whose injury or risk of injury the action is based by any representative
party, including a spouse, parent, child, or other relative of such
person, a guardian, or an estate;
(B) does not include a claim brought as a class action; and
(C) does not include a claim against a debtor in a case pending under
title 11 of the United States Code that is a personal injury tort or
wrongful death claim within the meaning of section 157(b)(5) of title
28, United States Code.
(2) The term `person' means any individual, corporation, company, association,
firm, partnership, society, joint stock company, or any other entity,
but not any governmental entity.
(3) The term `State' includes the District of Columbia, the Commonwealth
of Puerto Rico, the United States Virgin Islands, Guam, and any other
territory or possession of the United States.
(d) Applicability- This section applies to any personal injury claim filed
in Federal or State court on or after the date of the enactment of this
subtitle.
SEC. 125. RULE OF CONSTRUCTION.
Nothing in section 123 or in the amendments made by section 122 shall be
construed to bar or impede the assertion or development of new claims or
remedies under Federal, State, or local civil rights law.
SEC. 126. THREE-STRIKES RULE FOR SUSPENDING ATTORNEYS WHO COMMIT MULTIPLE
RULE 11 VIOLATIONS.
(a) Mandatory Suspension- Whenever a Federal district court determines that
an attorney has violated Rule 11 of the Federal Rules of Civil Procedure,
the court shall determine the number of times that the attorney has violated
that rule in that Federal district court during that attorney's career.
If the court determines that the number is 3 or more, the Federal district
court--
(1) shall suspend that attorney from the practice of law in that Federal
district court for 1 year; and
(2) may suspend that attorney from the practice of law in that Federal
district court for any additional period that the court considers appropriate.
(b) Appeal; Stay- An attorney has the right to appeal a suspension under
subsection (a). While such an appeal is pending, the suspension shall be
stayed.
(c) Reinstatement- To be reinstated to the practice of law in a Federal
district court after completion of a suspension under subsection (a), the
attorney must first petition the court for reinstatement under such procedures
and conditions as the court may prescribe.
SEC. 127. PRESUMPTION OF RULE 11 VIOLATION FOR REPEATEDLY RELITIGATING
SAME ISSUE.
Whenever a party presents to a Federal court a pleading, written motion,
or other paper, that includes a claim or defense that the party has already
litigated and lost on the merits in any forum in final decisions not subject
to appeal on 3 consecutive occasions, and the claim or defense involves
the same plaintiff and the same defendant, there shall be a rebuttable presumption
that the presentation of such paper is in violation of Rule 11 of the Federal
Rules of Civil Procedure.
SEC. 128. ENHANCED SANCTIONS FOR DOCUMENT DESTRUCTION IN PENDING FEDERAL
COURT PROCEEDINGS.
Whoever willfully and intentionally influences, obstructs, or impedes, or
attempts to influence, or obstruct, or impede, a pending Federal court proceeding
through the willful and intentional destruction of documents sought pursuant
to the rules of such Federal court proceeding and highly relevant to that
proceeding--
(1) shall be punished with mandatory civil sanctions of a degree commensurate
with the civil sanctions available under Rule 11 of the Federal Rules
of Civil Procedure, in addition to any other civil sanctions that otherwise
apply; and
(2) shall be held in contempt of court and, if an attorney, referred to
one or more appropriate State bar associations for disciplinary proceedings.
SEC. 129. BAN ON CONCEALMENT OF UNLAWFUL CONDUCT.
(a) In General- In any Rule 11 of the Federal Rules of Civil Procedure proceeding,
a court may not order that a court record not be disclosed unless the court
makes a finding of fact that identifies the interest that justifies the
order and determines that that interest outweighs any interest in the public
health and safety that the court determines would be served by disclosing
the court record.
(b) Applicability- This section applies to any record formally filed with
the court, but shall not include any records subject to--
(1) the attorney-client privilege or any other privilege recognized under
Federal or State law that grants the right to prevent disclosure of certain
information unless the privilege has been waived; or
(2) applicable State or Federal laws that protect the confidentiality
of crime victims, including victims of sexual abuse.
TITLE II--INCREASE AMERICA'S TALENT POOL
SEC. 201. INNOVATION SCHOLARSHIP PROGRAM.
Subpart 6 of part A of title IV is amended to read as follows:
`Subpart 6--Innovation Scholarship Program
`SEC. 419A. INNOVATION MATHEMATICS AND SCIENCE HONORS SCHOLARSHIP PROGRAM.
`(a) Purpose- The purpose of this section is to award scholarships to students
who are enrolled in studies leading to baccalaureate and advanced degrees
in physical, life, or computer sciences, mathematics, and engineering.
`(b) Definitions- As used in this section--
`(1) the term `computer science' means the branch of knowledge or study
of computers, including such fields of knowledge or study as computer
hardware, computer software, computer engineering, information systems,
and robotics;
`(2) the term `eligible student' means a student who--
`(A) is a citizen of the United States;
`(B) is selected by the managing agent to receive a scholarship;
`(C) is enrolled full-time in an institution of higher education, other
than a United States service academy; and
`(D) has shown a commitment to and is pursuing a major in studies leading
to a baccalaureate, masters, or doctoral degree (or a combination thereof)
in physical, life, or computer sciences, mathematics, or engineering;
`(3) the term `engineering' means the science by which the properties
of matter and the sources of energy in nature are made useful to humanity
in structures, machines, and products, as in the construction of engines,
bridges, buildings, mines, and chemical plants, including such fields
of knowledge or study as aeronautical engineering, chemical engineering,
civil engineering, electrical engineering, industrial engineering, materials
engineering, manufacturing engineering, and mechanical engineering;
`(4) the term `life sciences' means the branch of knowledge or study of
living things, including such fields of knowledge or study as biology,
biochemistry, biophysics, microbiology, genetics, physiology, botany,
zoology, ecology, and behavioral biology, except that the term does not
encompass social psychology or the health professions;
`(5) the term `managing agent' means an entity to which an award is made
under subsection (c) to manage a program of Mathematics and Science Honors
Scholarships;
`(6) the term `mathematics' means the branch of knowledge or study of
numbers and the systematic treatment of magnitude, relationships between
figures and forms, and relations between quantities expressed symbolically,
including such fields of knowledge or study as statistics, applied mathematics,
and operations research; and
`(7) the term `physical sciences' means the branch of knowledge or study
of the material universe, including such fields of knowledge or study
as astronomy, atmospheric sciences, chemistry, earth sciences, ocean sciences,
physics, and planetary sciences.
`(1)(A) From funds authorized under section 419D to carry out this section,
the Secretary is authorized, through a grant or cooperative agreement,
to make an award to a private, non-profit organization, other than an
institution of higher education or system of institutions of higher education,
to manage, through a public and private partnership, a program of Mathematics
and Science Honors Scholarships under this section.
`(B) The award under subparagraph (A) shall be for a five-year period.
`(2)(A) One hundred percent of the funds awarded under paragraph (1)(A)
for any fiscal year shall be obligated and expended solely on scholarships
to eligible students.
`(B) No Federal funds shall be used to provide more than 50 percent of
the cost of any scholarship to an eligible student.
`(C) The maximum scholarship award shall be the difference between an
eligible student's cost of attendance minus any non-loan based aid such
student receives.
`(3)(A) The secretary may establish--
`(i) eligibility criteria for applicants for managing agent, including
criteria regarding financial and administrative capability; and
`(ii) operational standards for the managing agent, including management
and performance requirements, such as audit, recordkeeping, record retention,
and reporting procedures and requirements.
`(B) The Secretary, as necessary, may review and revise any criteria,
standards, and rules established under this paragraph and, through the
agreement with the managing agent, see that any revisions are implemented.
`(4) If the managing agent fails to meet the requirements of this section
the Secretary may terminate the award to the managing agent.
`(5) The Secretary shall conduct outreach efforts to help raise awareness
of the Mathematics and Science Honors Scholarships.
`(d) Duties of the Managing Agent- The managing agent shall--
`(1) develop criteria to award Mathematics and Science Honors Scholarships
based on established measurements available to secondary students who
wish to pursue degrees in physical, life, or computer sciences, mathematics,
and engineering;
`(2) establish a Mathematics and Science Honors Scholarship Fund in a
separate, named account that clearly discloses the amount of Federal and
non-Federal funds deposited in the account and used for scholarships under
this section;
`(3) solicit funds for scholarships and for the administration of the
program from non-Federal sources;
`(4) solicit applicants for scholarships;
`(5) from the amounts in the Fund, award scholarships to eligible students
and transfer such funds to the institutions of higher education that they
attend; and
`(6) annually submit to the Secretary a financial audit and a report on
the progress of the program, and such other documents as the Secretary
may require to determine the effective management of the program.
`(1) Any eligible entity that desires to be the managing agent under this
section shall submit an application to the Secretary, in such form and
containing such information, as the Secretary may require.
`(2) Each application shall include a description of--
`(A) how the applicant meets or will meet requirements established under
subsections (c)(3)(A) and (d);
`(B) how the applicant will solicit funds for scholarships and for the
administration of the program from non-Federal sources;
`(C) how the applicant will provide nationwide outreach to inform students
about the program and to encourage students to pursue degrees in physical,
life, or computer sciences, mathematics, and engineering;
`(D) how the applicant will solicit applications for scholarships, including
how the applicant will balance efforts in urban and rural areas;
`(E) the selection criteria based on established measurements available
to secondary students the applicant will use to award scholarships and
to renew those awards;
`(F) how the applicant will inform the institution of higher education
chosen by the recipient of the name and scholarship amount of the recipient;
`(G) what procedures and assurances the applicant and the institution
of higher education that the recipient attends will use to verify student
eligibility, attendance, degree progress, and academic performance and
to deliver and account for payments to such institution;
`(H) the management (including audit and accounting) procedures the
applicant will use for the program;
`(I) the human, financial, and other resources that the applicant will
need and use to manage the program;
`(J) how the applicant will evaluate the program and report to the Secretary
annually; and
`(K) a description of how the entity will coordinate with, complement,
and build on similar public and private mathematics and science programs.
`(f) Scholarship Recipients-
`(1) A student receiving a scholarship under this section shall be known
as a `Innovation Mathematics and Science Honors Scholar'.
`(2) Any student desiring to receive a scholarship under this section
shall submit an application to the managing agent in such form, and containing
such information, as the managing agent may require.
`(3) Any student that receives a scholarship under this section shall
enter into an agreement with the managing agent to complete 5 consecutive
years of service to begin no later than 12 months following completion
of the final degree in a position related to physical, life, or computer
sciences, mathematics, or engineering as defined under this section.
`(4) If any student that receives a scholarship under this section fails
to earn at least a baccalaureate degree in physical, life, or computer
sciences, mathematics, or engineering as defined under this section, the
student shall repay to the managing agent the amount of any financial
assistance paid to such student.
`(5) If any student that receives a scholarship under this section fails
to meet the requirements of paragraph (3), the student shall repay to
the managing agent the amount of any financial assistance paid to such
student.
`(6)(A) Scholarships shall be awarded for only one academic year of study
at a time.
`(B)(i) A scholarship shall be renewable on an annual basis for the established
length of the academic program if the student awarded the scholarship
remains eligible.
`(ii) The managing agent may condition renewal of a scholarship on measures
of academic progress and achievement, with the approval of the Secretary.
`(C)(i) If a student fails to either remain eligible or meet established
measures of academic progress and achievement, the managing agent shall
instruct the student's institution of higher education to suspend payment
of the student's scholarship.
`(ii) A suspension of payment shall remain in effect until the student
is able to demonstrate to the satisfaction of the managing agent that
he or she is again eligible and meets the established measures of academic
progress and achievement.
`(iii) A student's eligibility for a scholarship shall be terminated if
a suspension period exceeds 12 months.
`(D)(i)(I) A student awarded a scholarship may, in a manner and under
the terms established by, and with the approval of, the managing agent,
postpone or interrupt his or her enrollment at an institution of higher
education for up to 12 months.
`(II) Such a postponement or interruption shall not be considered a suspension
for purposes of subparagraph (C).
`(ii) Neither a student nor the student's institution of higher education
shall receive the student's scholarship payments during the period of
postponement or interruption, but such payments shall resume upon enrollment
or reenrollment.
`(iii) In exceptional circumstances, such as serious injury or illness
or the necessity to care for family members, the student's postponement
or interruption may, upon notification and approval of the managing agent,
be extended beyond the 12 month period described in clause (i)(I).
`(g) Responsibilities of Institution of Higher Education-
`(1) The managing agent shall require any institution of higher education
that enrolls a student who receives a scholarship under this section to
annually provide an assurance, prior to making any payment, that the student--
`(A) is eligible in accordance with subsection (b)(2); and
`(B) has provided the institution with a written commitment to attend,
or is attending, classes and is satisfactorily meeting the institution's
academic criteria for enrollment in its program of study.
`(2)(A) The managing agent shall provide the institution of higher education
with payments from the Fund for selected recipients in at least two installments.
`(B) An institution of higher education shall return prorated amounts
of any scholarship payment to the managing agent, who shall deposit it
in to the Fund, if a recipient declines a scholarship, does not attend
courses, transfers to another institution of higher education, or becomes
ineligible for a scholarship.
`SEC. 419B. MATHEMATICS AND SCIENCE INCENTIVE PROGRAM.
`(1) IN GENERAL- The Secretary is authorized to carry out a program of
assuming the obligation to pay, pursuant to the provisions of this section,
the interest on a loan made, insured, or guaranteed under part B or D
of this title.
`(2) ELIGIBILITY- The Secretary may assume interest payments under paragraph
(1) only for a borrower who--
`(A) has submitted an application in compliance with subsection (d);
`(B) obtained one or more loans described in paragraph (1) as an undergraduate
student;
`(C) is a new borrower (within the meaning of section 103(7) of this
Act) on or after the date of enactment of the College Access and Opportunity
Act of 2005;
`(D) is a highly qualified teacher of science, technology, engineering
or mathematics at an elementary or secondary school in a high need local
educational agency, or is a mathematics, science, or engineering professional;
and
`(E) enters into an agreement with the Secretary to complete 5 consecutive
years of service in a position described in subparagraph (D), starting
on the date of the agreement.
`(3) PRIOR INTEREST LIMITATIONS- The Secretary shall not make any payments
for interest that--
`(A) accrues prior to the beginning of the repayment period on a loan
in the case of a loan made under section 428H or a Federal Direct Unsubsidized
Stafford Loan; or
`(B) has accrued prior to the signing of an agreement under paragraph
(2)(E).
`(4) INITIAL SELECTION- In selecting participants for the program under
this section, the Secretary--
`(A) shall choose among eligible applicants on the basis of--
`(i) the national security, homeland security, and economic security
needs of the United States, as determined by the Secretary, in consultation
with other Federal agencies, including the Departments of Labor, Defense,
Homeland Security, Commerce, and Energy, the Central Intelligence
Agency, and the National Science Foundation; and
`(ii) the academic record or job performance of the applicant; and
`(B) may choose among eligible applicants on the basis of--
`(i) the likelihood of the applicant to complete the 5-year service
obligation;
`(ii) the likelihood of the applicant to remain in science, mathematics,
or engineering after the completion of the service requirement; or
`(iii) other relevant criteria determined by the Secretary.
`(5) AVAILABILITY SUBJECT TO APPROPRIATIONS- Loan interest payments under
this section shall be subject to the availability of appropriations. If
the amount appropriated for any fiscal year is not sufficient to provide
interest payments on behalf of all qualified applicants, the Secretary
shall give priority to those individuals on whose behalf interest payments
were made during the preceding fiscal year.
`(6) REGULATIONS- The Secretary is authorized to prescribe such regulations
as may be necessary to carry out the provisions of this section.
`(b) Duration and Amount of Interest Payments- The period during which the
Secretary shall pay interest on behalf of a student borrower who is selected
under subsection (a) is the period that begins on the effective date of
the agreement under subsection (a)(2)(E), continues after successful completion
of the service obligation, and ends on the earlier of--
`(1) the completion of the repayment period of the loan;
`(2) payment by the Secretary of a total of $5,000 on behalf of the borrower;
`(3) if the borrower ceases to fulfill the service obligation under such
agreement prior to the end of the 5-year period, as soon as the borrower
is determined to have ceased to fulfill such obligation in accordance
with regulations of the Secretary; or
`(4) 6 months after the end of any calendar year in which the borrower's
gross income equals or exceeds 4 times the national per capita disposable
personal income (current dollars) for such calendar year, as determined
on the basis of the National Income and Product Accounts Tables of the
Bureau of Economic Analysis of the Department of Commerce, as determined
in accordance with regulations prescribed by the Secretary.
`(c) Repayment to Eligible Lenders- Subject to the regulations prescribed
by the Secretary by regulation under subsection (a)(6), the Secretary shall
pay to each eligible lender or holder for each payment period the amount
of the interest that accrues on a loan of a student borrower who is selected
under subsection (a).
`(d) Application for Repayment-
`(1) IN GENERAL- Each eligible individual desiring loan interest payment
under this section shall submit a complete and accurate application to
the Secretary at such time, in such manner, and containing such information
as the Secretary may require.
`(2) FAILURE TO COMPLETE SERVICE AGREEMENT- Such application shall contain
an agreement by the individual that, if the individual fails to complete
the 5 consecutive years of service required by subsection (a)(2)(E), the
individual agrees to repay the Secretary the amount of any interest paid
by the Secretary on behalf of the individual.
`(e) Treatment of Consolidation Loans- A consolidation loan made under section
428C of this Act, or a Federal Direct Consolidation Loan made under part
D of title IV of this Act, may be a qualified loan for the purpose of this
section only to the extent that such loan amount was used by a borrower
who otherwise meets the requirements of this section to repay--
`(1) a loan made under section 428 or 428H of this Act; or
`(2) a Federal Direct Stafford Loan, or a Federal Direct Unsubsidized
Stafford Loan, made under part D of title IV of this Act.
`(f) Prevention of Double Benefits- No borrower may, for the same service,
receive a benefit under both this section and--
`(1) any loan forgiveness program under title IV of this Act; or
`(2) subtitle D of title I of the National and Community Service Act of
1990 (42 U.S.C. 12601 et seq.).
`(g) Definitions- As used in this section--
`(1) the term `high need local educational agency' has the same meaning
given such term in section 201(b)(4); and
`(2) the term `mathematics, science, or engineering professional' means
a person who--
`(A) holds a baccalaureate, masters, or doctoral degree (or a combination
thereof) in science, mathematics, or engineering; and
`(B) works in a field the Secretary determines is closely related to
that degree, which shall include working as a professor at a two- or
four-year institution of higher education.
`SEC. 419C. MATHEMATICS AND SCIENCE EDUCATION COORDINATING COUNCIL GRANTS.
`(a) Purposes- The purposes of this section include--
`(1) supporting programs that encourage students to enroll in and successfully
complete baccalaureate and advanced degrees in science, technology, engineering,
and mathematics;
`(2) achieving the common objective of organizing, leading, and implementing
State-based reform agendas that support the continuing improvement of
mathematics and science education; and
`(3) improving collaboration in a State among the State educational agency,
2-year and 4-year institutions of higher education, and the business community
through the development or improvement of a coordinating council.
`(b) Definitions- For the purposes of this section:
`(1) the term `eligible State' means--
`(A) the Governor of a State; or
`(B) in the case of a State for which the constitution or laws of the
State designate an individual, entity, or agency in the State, other
than the Governor, to be responsible for coordination among segments
of the State's educational systems, such individual, entity, or agency.
`(2) the term `mathematics and science education coordinating council'
means an organization that is charged by a State with coordinating mathematics
and science education in the State. Such a council shall be composed of
education, business, and community leaders working together to increase
student participation and academic achievement in mathematics and science.
`(c) State Grants- From amounts made available under section 419D for this
section, the Secretary is authorized to use not more than $5,000,000 to
award grants on a competitive basis to eligible States for the purpose of
carrying out activities described in subsection (d).
`(d) Uses of Funds- An eligible State that receives a grant under this section
is authorized to use grant funds to carry out one or more of the following
activities:
`(1) In a State in which a mathematics and science education coordinating
council does not exist, planning and establishing such a council.
`(2) In a State in which such a council exists, reforming or expanding
the activities of the council, including implementing State-based reform
agendas that support the continuing improvement of mathematics and science
education, and support services that lead to better teacher recruitment
and training, increased student academic achievement, and increased student
enrollment and degree attainment in science, technology, engineering,
and mathematics.
`(3) Coordinating with activities under part B of title II of the Elementary
and Secondary Education Act of 1965 and with title II of this Act, especially
as it pertains to the recruitment and preparation of highly qualified
mathematics and science teachers.
`(e) Application- To be eligible to receive a grant under this section,
an eligible State shall submit an application to the Secretary that--
`(1) describes the activities the State will carry out with the funds;
`(2) contains a plan for continuing such activities once Federal funding
ceases; and
`(3) contains such other information and assurances as the Secretary may
require.
`(f) Consultation- The Governor of a State, or the individual, entity, or
agency in the State described in subsection (b)(1)(B), shall consult with
the State board of education, State educational agency, and the State agency
for higher education, as appropriate, with respect to the activities assisted
under this section. In the case of an individual, entity, or agency described
in subsection (b)(1)(B), such consultation shall also include the Governor.
`(g) Construction- Nothing in this section shall be construed to negate
or supersede the legal authority under State law of any State agency, State
entity, or State public official over programs that are under the jurisdiction
of the agency, entity, or official.
`(h) Administrative Provisions-
`(A) Grants awarded under this section shall be awarded for a period
not to exceed 5 years.
`(B) A grantee may receive a grant under this part only once.
`(C) Payments of grant funds under this section shall be annual.
`(2) SECRETARIAL SELECTIONS- The Secretary shall determine which applications
receive funds under this section, and the amount of the grant. In determining
grant amounts, the Secretary shall take into account the total amount
of funds available for all grants under this section and the nature of
each grant proposal, including whether funds are being sought to assist
in the creation of a new State mathematics and science education coordinating
council or to extend the work of an existing council. The Secretary shall
also take into account the equitable geographic distribution of grants
throughout the United States.
`(3) MATCHING REQUIREMENT- Each eligible State receiving a grant under
this section shall provide, from non-Federal sources, an amount equal
to 50 percent of the amount of the grant (in cash or in kind) to carry
out the activities supported by the grant.
`(i) Accountability and Evaluation-
`(1) STATE GRANT ACCOUNTABILITY REPORT- An eligible State that receives
a grant under this section shall submit an annual accountability report
to the Secretary. Such report shall include a description of the degree
to which the eligible State, in using grant funds, has made substantial
progress in meeting its objectives.
`(2) EVALUATION AND DISSEMINATION- The Secretary shall evaluate the activities
funded under this section and report the Secretary's findings regarding
such activities to the authorizing committees. The Secretary shall broadly
disseminate successful practices developed by eligible States under this
section, and shall broadly disseminate information regarding such practices
that were found to be ineffective.
`(3) REVOCATION- If the Secretary determines that an eligible State is
not making substantial progress in meeting the purposes, objectives, and
measures, as appropriate, required under this section by the end of the
second year of a grant, then the grant payment shall not be made for the
third year and subsequent years of the grant.
`SEC. 419D. AUTHORIZATION OF APPROPRIATIONS.
`There are authorized to be appropriated $41,000,000 for fiscal year 2006
and such sums as may be necessary for each of the 5 succeeding fiscal years
to carry out this subpart.'.
TITLE III--PROMOTION OF RESEARCH AND DEVELOPMENT
SEC. 301. SHORT TITLE.
This title may be cited as the `Investment in America Act of 2006'.
SEC. 302. FINDINGS.
The Congress finds as follows:
(1) Research and development performed in the United States results in
quality jobs, better and safer products, increased ownership of technology-based
intellectual property, and higher productivity in the United States.
(2) The extent to which companies perform and increase research and development
activities in the United States is in part dependent on Federal tax policy.
(3) The Congress should make permanent a research and development credit
that provides a meaningful incentive to all types of taxpayers.
SEC. 303. PERMANENT EXTENSION OF RESEARCH CREDIT.
(a) In General- Section 41 of the Internal Revenue Code of 1986 (relating
to credit for increasing research activities) is amended by striking subsection
(h).
(b) Conforming Amendment- Paragraph (1) of section 45C(b) of such Code is
amended by striking subparagraph (D).
(c) Effective Date- The amendments made by this section shall apply to amounts
paid or incurred after the date of the enactment of this Act.
SEC. 304. INCREASE IN RATES OF ALTERNATIVE INCREMENTAL CREDIT.
(a) In General- Subparagraph (A) of section 41(c)(4) of the Internal Revenue
Code of 1986 (relating to election of alternative incremental credit) is
amended--
(1) by striking `2.65 percent' and inserting `3 percent',
(2) by striking `3.2 percent' and inserting `4 percent', and
(3) by striking `3.75 percent' and inserting `5 percent'.
(b) Effective Date- The amendment made by this section shall apply to taxable
years ending after the date of the enactment of this Act.
SEC. 305. ALTERNATIVE SIMPLIFIED CREDIT FOR QUALIFIED RESEARCH EXPENSES.
(a) In General- Subsection (c) of section 41 of the Internal Revenue Code
of 1986 (relating to base amount) is amended by redesignating paragraphs
(5) and (6) as paragraphs (6) and (7), respectively, and by inserting after
paragraph (4) the following new paragraph:
`(5) ELECTION OF ALTERNATIVE SIMPLIFIED CREDIT-
`(A) IN GENERAL- At the election of the taxpayer, the credit determined
under subsection (a)(1) shall be equal to 12 percent of so much of the
qualified research expenses for the taxable year as exceeds 50 percent
of the average qualified research expenses for the 3 taxable years preceding
the taxable year for which the credit is being determined.
`(B) SPECIAL RULE IN CASE OF NO QUALIFIED RESEARCH EXPENSES IN ANY OF
3 PRECEDING TAXABLE YEARS-
`(i) TAXPAYERS TO WHICH SUBPARAGRAPH APPLIES- The credit under this
paragraph shall be determined under this subparagraph if the taxpayer
has no qualified research expenses in any one of the 3 taxable years
preceding the taxable year for which the credit is being determined.
`(ii) CREDIT RATE- The credit determined under this subparagraph shall
be equal to 6 percent of the qualified research expenses for the taxable
year.
`(C) ELECTION- An election under this paragraph shall apply to the taxable
year for which made and all succeeding taxable years unless revoked
with the consent of the Secretary. An election under this paragraph
may not be made for any taxable year to which an election under paragraph
(4) applies.'.
(b) Coordination With Election of Alternative Incremental Credit-
(1) IN GENERAL- Section 41(c)(4)(B) of such Code (relating to election)
is amended by adding at the end the following: `An election under this
paragraph may not be made for any taxable year to which an election under
paragraph (5) applies.'.
(2) TRANSITION RULE- In the case of an election under section 41(c)(4)
of the Internal Revenue Code of 1986 which applies to the taxable year
which includes the date of the enactment of this Act, such election shall
be treated as revoked with the consent of the Secretary of the Treasury
if the taxpayer makes an election under section 41(c)(5) of such Code
(as added by subsection (a)) for such year.
(c) Effective Date- The amendments made by this section shall apply to taxable
years ending after the date of the enactment of this Act.
TITLE IV--INCREASE ACCESS TO AND EFFICIENCY OF HEALTH CARE
Subtitle A--Health Care Choice
SEC. 401. SHORT TITLE OF SUBTITLE.
This subtitle may be cited as `Health Care Choice Act of 2006'.
SEC. 402. SPECIFICATION OF CONSTITUTIONAL AUTHORITY FOR ENACTMENT OF LAW.
This subtitle is enacted pursuant to the power granted Congress under article
I, section 8, clause 3, of the United States Constitution.
SEC. 403. FINDINGS.
Congress finds the following:
(1) The application of numerous and significant variations in State law
impacts the ability of insurers to offer, and individuals to obtain, affordable
individual health insurance coverage, thereby impeding commerce in individual
health insurance coverage.
(2) Individual health insurance coverage is increasingly offered through
the Internet, other electronic means, and by mail, all of which are inherently
part of interstate commerce.
(3) In response to these issues, it is appropriate to encourage increased
efficiency in the offering of individual health insurance coverage through
a collaborative approach by the States in regulating this coverage.
(4) The establishment of risk-retention groups has provided a successful
model for the sale of insurance across State lines, as the acts establishing
those groups allow insurance to be sold in multiple States but regulated
by a single State.
SEC. 404. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE.
(a) In General- Title XXVII of the Public Health Service Act (42 U.S.C.
300gg et seq.) is amended by adding at the end the following new part:
`Part D--Cooperative Governing of Individual Health Insurance Coverage
`DEFINITIONS
`SEC. 2795. In this part:
`(1) PRIMARY STATE- The term `primary State' means, with respect to individual
health insurance coverage offered by a health insurance issuer, the State
designated by the issuer as the State whose covered laws shall govern
the health insurance issuer in the sale of such coverage under this part.
An issuer, with respect to a particular policy, may only designate one
such State as its primary State with respect to all such coverage it offers.
Such an issuer may not change the designated primary State with respect
to individual health insurance coverage once the policy is issued, except
that such a change may be made upon renewal of the policy. With respect
to such designated State, the issuer is deemed to be doing business in
that State.
`(2) SECONDARY STATE- The term `secondary State' means, with respect to
individual health insurance coverage offered by a health insurance issuer,
any State that is not the primary State. In the case of a health insurance
issuer that is selling a policy in, or to a resident of, a secondary State,
the issuer is deemed to be doing business in that secondary State.
`(3) HEALTH INSURANCE ISSUER- The term `health insurance issuer' has the
meaning given such term in section 2791(b)(2), except that such an issuer
must be licensed in the primary State and be qualified to sell individual
health insurance coverage in that State.
`(4) INDIVIDUAL HEALTH INSURANCE COVERAGE- The term `individual health
insurance coverage' means health insurance coverage offered in the individual
market, as defined in section 2791(e)(1).
`(5) APPLICABLE STATE AUTHORITY- The term `applicable State authority'
means, with respect to a health insurance issuer in a State, the State
insurance commissioner or official or officials designated by the State
to enforce the requirements of this title for the State with respect to
the issuer.
`(6) HAZARDOUS FINANCIAL CONDITION- The term `hazardous financial condition'
means that, based on its present or reasonably anticipated financial condition,
a health insurance issuer is unlikely to be able--
`(A) to meet obligations to policyholders with respect to known claims
and reasonably anticipated claims; or
`(B) to pay other obligations in the normal course of business.
`(7) COVERED LAWS- The term `covered laws' means the laws, rules, regulations,
agreements, and orders governing the insurance business pertaining to--
`(A) individual health insurance coverage issued by a health insurance
issuer;
`(B) the offer, sale, and issuance of individual health insurance coverage
to an individual; and
`(C) the provision to an individual in relation to individual health
insurance coverage of--
`(i) health care and insurance related services;
`(ii) management, operations, and investment activities of a health
insurance issuer; and
`(iii) loss control and claims administration for a health insurance
issuer with respect to liability for which the issuer provides insurance.
`(8) STATE- The term `State' means only the 50 States and the District
of Columbia.
`(9) UNFAIR CLAIMS SETTLEMENT PRACTICES- The term `unfair claims settlement
practices' means only the following practices:
`(A) Knowingly misrepresenting to claimants and insured individuals
relevant facts or policy provisions relating to coverage at issue.
`(B) Failing to acknowledge with reasonable promptness pertinent communications
with respect to claims arising under policies.
`(C) Failing to adopt and implement reasonable standards for the prompt
investigation and settlement of claims arising under policies.
`(D) Failing to effectuate prompt, fair, and equitable settlement of
claims submitted in which liability has become reasonably clear.
`(E) Refusing to pay claims without conducting a reasonable investigation.
`(F) Failing to affirm or deny coverage of claims within a reasonable
period of time after having completed an investigation related to those
claims.
`(10) FRAUD AND ABUSE- The term `fraud and abuse' means an act or omission
committed by a person who, knowingly and with intent to defraud, commits,
or conceals any material information concerning, one or more of the following:
`(A) Presenting, causing to be presented or preparing with knowledge
or belief that it will be presented to or by an insurer, a reinsurer,
broker or its agent, false information as part of, in support of or
concerning a fact material to one or more of the following:
`(i) An application for the issuance or renewal of an insurance policy
or reinsurance contract.
`(ii) The rating of an insurance policy or reinsurance contract.
`(iii) A claim for payment or benefit pursuant to an insurance policy
or reinsurance contract.
`(iv) Premiums paid on an insurance policy or reinsurance contract.
`(v) Payments made in accordance with the terms of an insurance policy
or reinsurance contract.
`(vi) A document filed with the commissioner or the chief insurance
regulatory official of another jurisdiction.
`(vii) The financial condition of an insurer or reinsurer.
`(viii) The formation, acquisition, merger, reconsolidation, dissolution
or withdrawal from one or more lines of insurance or reinsurance in
all or part of a State by an insurer or reinsurer.
`(ix) The issuance of written evidence of insurance.
`(x) The reinstatement of an insurance policy.
`(B) Solicitation or acceptance of new or renewal insurance risks on
behalf of an insurer reinsurer or other person engaged in the business
of insurance by a person who knows or should know that the insurer or
other person responsible for the risk is insolvent at the time of the
transaction.
`(C) Transaction of the business of insurance in violation of laws requiring
a license, certificate of authority or other legal authority for the
transaction of the business of insurance.
`(D) Attempt to commit, aiding or abetting in the commission of, or
conspiracy to commit the acts or omissions specified in this paragraph.
`APPLICATION OF LAW
`SEC. 2796. (a) In General- The covered laws of the primary State shall
apply to individual health insurance coverage offered by a health insurance
issuer in the primary State and in any secondary State, but only if the
coverage and issuer comply with the conditions of this section with respect
to the offering of coverage in any secondary State.
`(b) Exemptions From Covered Laws in a Secondary State- Except as provided
in this section, a health insurance issuer with respect to its offer, sale,
renewal, and issuance of individual health insurance coverage in any secondary
State is exempt from any covered laws of the secondary State (and any rules,
regulations, agreements, or orders sought or issued by such State under
or related to such covered laws) to the extent that such laws would--
`(1) make unlawful, or regulate, directly or indirectly, the operation
of the health insurance issuer operating in the secondary State, except
that any secondary State may require such an issuer--
`(A) to pay, on a nondiscriminatory basis, applicable premium and other
taxes (including high risk pool assessments) which are levied on insurers
and surplus lines insurers, brokers, or policyholders under the laws
of the State;
`(B) to register with and designate the State insurance commissioner
as its agent solely for the purpose of receiving service of legal documents
or process;
`(C) to submit to an examination of its financial condition by the State
insurance commissioner in any State in which the issuer is doing business
to determine the issuer's financial condition, if--
`(i) the State insurance commissioner of the primary State has not
done an examination within the period recommended by the National
Association of Insurance Commissioners; and
`(ii) any such examination is conducted in accordance with the examiners'
handbook of the National Association of Insurance Commissioners and
is coordinated to avoid unjustified duplication and unjustified repetition;
`(D) to comply with a lawful order issued--
`(i) in a delinquency proceeding commenced by the State insurance
commissioner if there has been a finding of financial impairment under
subparagraph (C); or
`(ii) in a voluntary dissolution proceeding;
`(E) to comply with an injunction issued by a court of competent jurisdiction,
upon a petition by the State insurance commissioner alleging that the
issuer is in hazardous financial condition;
`(F) to participate, on a nondiscriminatory basis, in any insurance
insolvency guaranty association or similar association to which a health
insurance issuer in the State is required to belong;
`(G) to comply with any State law regarding fraud and abuse (as defined
in section 2795(10)), except that if the State seeks an injunction regarding
the conduct described in this subparagraph, such injunction must be
obtained from a court of competent jurisdiction; or
`(H) to comply with any State law regarding unfair claims settlement
practices (as defined in section 2795(9));
`(2) require any individual health insurance coverage issued by the issuer
to be countersigned by an insurance agent or broker residing in that Secondary
State; or
`(3) otherwise discriminate against the issuer issuing insurance in both
the primary State and in any secondary State.
`(c) Clear and Conspicuous Disclosure- A health insurance issuer shall provide
the following, in 12-point bold type, in any insurance coverage offered
in a secondary State under this part by such a health insurance issuer and
at renewal of the policy, with the 5 blank spaces therein being appropriately
filled with the name of the health insurance issuer, the name of primary
State, the name of the secondary State, the name of the secondary State,
and the name of the secondary State, respectively, for the coverage concerned:
`Notice
`This policy is issued by XXXXX and is governed by the
laws and regulations of the State of XXXXX, and it has met
all the laws of that State as determined by that State's Department of Insurance.
This policy may be less expensive than others because it is not subject
to all of the insurance laws and regulations of the State of XXXXX,
including coverage of some services or benefits mandated by the law of the
State of XXXXX. Additionally, this policy is not subject to
all of the consumer protection laws or restrictions on rate changes of the
State of XXXXX. As with all insurance products, before purchasing
this policy, you should carefully review the policy and determine what health
care services the policy covers and what benefits it provides, including
any exclusions, limitations, or conditions for such services or benefits.'.
`(d) Prohibition on Certain Reclassifications and Premium Increases-
`(1) IN GENERAL- For purposes of this section, a health insurance issuer
that provides individual health insurance coverage to an individual under
this part in a primary or secondary State may not upon renewal--
`(A) move or reclassify the individual insured under the health insurance
coverage from the class such individual is in at the time of issue of
the contract based on the health-status related factors of the individual;
or
`(B) increase the premiums assessed the individual for such coverage
based on a health status-related factor or change of a health status-related
factor or the past or prospective claim experience of the insured individual.
`(2) CONSTRUCTION- Nothing in paragraph (1) shall be construed to prohibit
a health insurance issuer--
`(A) from terminating or discontinuing coverage or a class of coverage
in accordance with subsections (b) and (c) of section 2742;
`(B) from raising premium rates for all policy holders within a class
based on claims experience;
`(C) from changing premiums or offering discounted premiums to individuals
who engage in wellness activities at intervals prescribed by the issuer,
if such premium changes or incentives--
`(i) are disclosed to the consumer in the insurance contract;
`(ii) are based on specific wellness activities that are not applicable
to all individuals; and
`(iii) are not obtainable by all individuals to whom coverage is offered;
`(D) from reinstating lapsed coverage; or
`(E) from retroactively adjusting the rates charged an individual insured
individual if the initial rates were set based on material misrepresentation
by the individual at the time of issue.
`(e) Prior Offering of Policy in Primary State- A health insurance issuer
may not offer for sale individual health insurance coverage in a secondary
State unless that coverage is currently offered for sale in the primary
State.
`(f) Licensing of Agents or Brokers for Health Insurance Issuers- Any State
may require that a person acting, or offering to act, as an agent or broker
for a health insurance issuer with respect to the offering of individual
health insurance coverage obtain a license from that State, except that
a State many not impose any qualification or requirement which discriminates
against a nonresident agent or broker.
`(g) Documents for Submission to State Insurance Commissioner- Each health
insurance issuer issuing individual health insurance coverage in both primary
and secondary States shall submit--
`(1) to the insurance commissioner of each State in which it intends to
offer such coverage, before it may offer individual health insurance coverage
in such State--
`(A) a copy of the plan of operation or feasibility study or any similar
statement of the policy being offered and its coverage (which shall
include the name of its primary State and its principal place of business);
`(B) written notice of any change in its designation of its primary
State; and
`(C) written notice from the issuer of the issuer's compliance with
all the laws of the primary State; and
`(2) to the insurance commissioner of each secondary State in which it
offers individual health insurance coverage, a copy of the issuer's quarterly
financial statement submitted to the primary State, which statement shall
be certified by an independent public accountant and contain a statement
of opinion on loss and loss adjustment expense reserves made by--
`(A) a member of the American Academy of Actuaries; or
`(B) a qualified loss reserve specialist.
`(h) Power of Courts To Enjoin Conduct- Nothing in this section shall be
construed to affect the authority of any Federal or State court to enjoin--
`(1) the solicitation or sale of individual health insurance coverage
by a health insurance issuer to any person or group who is not eligible
for such insurance; or
`(2) the solicitation or sale of individual health insurance coverage
by, or operation of, a health insurance issuer that is in hazardous financial
condition.
`(i) State Powers To Enforce State Laws-
`(1) IN GENERAL- Subject to the provisions of subsection (b)(1)(G) (relating
to injunctions) and paragraph (2), nothing in this section shall be construed
to affect the authority of any State to make use of any of its powers
to enforce the laws of such State with respect to which a health insurance
issuer is not exempt under subsection (b).
`(2) COURTS OF COMPETENT JURISDICTION- If a State seeks an injunction
regarding the conduct described in paragraphs (1) and (2) of subsection
(h), such injunction must be obtained from a Federal or State court of
competent jurisdiction.
`(j) States' Authority To Sue- Nothing in this section shall affect the
authority of any State to bring action in any Federal or State court.
`(k) Generally Applicable Laws- Nothing in this section shall be construed
to affect the applicability of State laws generally applicable to persons
or corporations.
`PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE ISSUER MAY SELL INTO SECONDARY
STATES
`SEC. 2797. A health insurance issuer may not offer, sell, or issue individual
health insurance coverage in a secondary State if the primary State does
not meet the following requirements:
`(1) The State insurance commissioner must use a risk-based capital formula
for the determination of capital and surplus requirements for all health
insurance issuers.
`(2) The State must have legislation or regulations in place establishing
an independent review process for individuals who are covered by individual
health insurance coverage unless the issuer provides an independent review
mechanism functionally equivalent (as determined by the primary State
insurance commissioner or official) to that prescribed in the `Health
Carrier External Review Model Act' of the National Association of Insurance
Commissioners for all individuals who purchase insurance coverage under
the terms of this part.
`ENFORCEMENT
`SEC. 2798. (a) In General- Subject to subsection (b), with respect to specific
individual health insurance coverage the primary State for such coverage
has sole jurisdiction to enforce the primary State's covered laws in the
primary State and any secondary State.
`(b) Secondary State's Authority- Nothing in subsection (a) shall be construed
to affect the authority of a secondary State to enforce its laws as set
forth in the exception specified in section 2796(b)(1).
`(c) Court Interpretation- In reviewing action initiated by the applicable
secondary State authority, the court of competent jurisdiction shall apply
the covered laws of the primary State.
`(d) Notice of Compliance Failure- In the case of individual health insurance
coverage offered in a secondary State that fails to comply with the covered
laws of the primary State, the applicable State authority of the secondary
State may notify the applicable State authority of the primary State.'.
(b) Effective Date- The amendment made by subsection (a) shall apply to
individual health insurance coverage offered, issued, or sold after the
date of the enactment of this Act.
SEC. 405. SEVERABILITY.
If any provision of this subtitle or the application of such provision to
any person or circumstance is held to be unconstitutional, the remainder
of this subtitle and the application of the provisions of such to any other
person or circumstance shall not be affected.
Subtitle B--Health Information Technology Promotion
SEC. 411. SHORT TITLE OF SUBTITLE.
This subtitle may be cited as the `Health Information Technology Promotion
Act of 2006'.
SEC. 412. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION TECHNOLOGY.
(a) In General- Title II of the Public Health Service Act is amended by
adding at the end the following new part:
`Part D--Health Information Technology
`OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION TECHNOLOGY
`SEC. 271. (a) Establishment- There is established within the Department
of Health and Human Services an Office of the National Coordinator for Health
Information Technology that shall be headed by the National Coordinator
for Health Information Technology (referred to in this section as the `National
Coordinator'). The National Coordinator shall be appointed by the President
and shall report directly to the Secretary. The National Coordinator shall
be paid at a rate equal to the rate of basic pay for level IV of the Executive
Schedule.
`(b) Goals of Nationwide Interoperable Health Information Technology Infrastructure-
The National Coordinator shall perform the duties under subsection (c) in
a manner consistent with the development of a nationwide interoperable health
information technology infrastructure that--
`(1) improves health care quality, reduces medical errors, increases the
efficiency of care, and advances the delivery of appropriate, evidence-based
health care services;
`(2) promotes wellness, disease prevention, and management of chronic
illnesses by increasing the availability and transparency of information
related to the health care needs of an individual for such individual;
`(3) ensures that appropriate information necessary to make medical decisions
is available in a usable form at the time and in the location that the
medical service involved is provided;
`(4) produces greater value for health care expenditures by reducing health
care costs that result from inefficiency, medical errors, inappropriate
care, and incomplete information;
`(5) promotes a more effective marketplace, greater competition, greater
systems analysis, increased choice, enhanced quality, and improved outcomes
in health care services;
`(6) improves the coordination of information and the provision of such
services through an effective infrastructure for the secure and authorized
exchange and use of health care information; and
`(7) ensures that the confidentiality of individually identifiable health
information of a patient is secure and protected.
`(c) Duties of National Coordinator-
`(1) STRATEGIC PLANNER FOR INTEROPERABLE HEALTH INFORMATION TECHNOLOGY-
The National Coordinator shall maintain, direct, and oversee the continuous
improvement of a strategic plan to guide the nationwide implementation
of interoperable health information technology in both the public and
private health care sectors consistent with subsection (b).
`(2) PRINCIPAL ADVISOR TO HHS- The National Coordinator shall serve as
the principal advisor of the Secretary on the development, application,
and use of health information technology, and coordinate the health information
technology programs of the Department of Health and Human Services.
`(3) COORDINATOR OF FEDERAL GOVERNMENT ACTIVITIES-
`(A) IN GENERAL- The National Coordinator shall serve as the coordinator
of Federal Government activities relating to health information technology.
`(B) SPECIFIC COORDINATION FUNCTIONS- In carrying out subparagraph (A),
the National Coordinator shall provide for--
`(i) the development and approval of standards used in the electronic
creation, maintenance, or exchange of health information; and
`(ii) the certification and inspection of health information technology
products, exchanges, and architectures to ensure that such products,
exchanges, and architectures conform to the applicable standards approved
under clause (i).
`(C) USE OF PRIVATE ENTITIES- The National Coordinator shall, to the
maximum extent possible, contract with or recognize private entities
in carrying out subparagraph (B).
`(D) UNIFORM APPLICATION OF STANDARDS- A standard approved under subparagraph
(B)(i) for use in the electronic creation, maintenance, or exchange
of health information shall preempt a standard adopted under State law,
regulation, or rule for such a use.
`(4) INTRAGOVERNMENTAL COORDINATOR- The National Coordinator shall ensure
that health information technology policies and programs of the Department
of Health and Human Services are coordinated with those of relevant executive
branch agencies and departments with a goal to avoid duplication of effort
and to ensure that each agency or department conducts programs within
the areas of its greatest expertise and its mission in order to create
a national interoperable health information system capable of meeting
national public health needs effectively and efficiently.
`(5) ADVISOR TO OMB- The National Coordinator shall provide to the Director
of the Office of Management and Budget comments and advice with respect
to specific Federal health information technology programs.
`(d) Authorization of Appropriations- There are authorized to be appropriated
such sums as may be necessary to carry out this section for each of fiscal
years 2007 through 2011.'.
(b) Treatment of Executive Order 13335- Executive Order 13335 shall not
have any force or effect after the date of the enactment of this Act.
(c) Transition From ONCHIT Under Executive Order-
(1) IN GENERAL- All functions, personnel, assets, liabilities, administrative
actions, and statutory reporting requirements applicable to the old National
Coordinator or the Office of the old National Coordinator on the date
before the date of the enactment of this Act shall be transferred, and
applied in the same manner and under the same terms and conditions, to
the new National Coordinator and the Office of the new National Coordinator
as of the date of the enactment of this Act.
(2) ACTING NATIONAL COORDINATOR- Before the appointment of the new National
Coordinator, the old National Coordinator shall act as the National Coordinator
for Health Information Technology until the office is filled as provided
in section 271(a) of the Public Health Service Act, as added by subsection
(a). The President may appoint the old National Coordinator as the new
National Coordinator.
(3) DEFINITIONS- For purposes of this subsection:
(A) NEW NATIONAL COORDINATOR- The term `new National Coordinator' means
the National Coordinator for Health Information Technology appointed
under section 271(a) of the Public Health Service Act, as added by subsection
(a).
(B) OLD NATIONAL COORDINATOR- The term `old National Coordinator' means
the National Coordinator for Health Information Technology appointed
under Executive Order 13335.
SEC. 413. SAFE HARBORS FOR PROVISION OF HEALTH INFORMATION TECHNOLOGY
AND TRAINING SERVICES TO HEALTH CARE PROFESSIONALS.
(a) For Civil Penalties- Section 1128A(b) of the Social Security Act (42
U.S.C. 1320a-7a(b)) is amended by adding at the end the following new paragraph:
`(4)(A) For purposes of this subsection, a payment described in paragraph
(1) does not include any nonmonetary remuneration (in the form of health
information technology and related training services) made by an entity
to a physician if--
`(i) such remuneration is made without a condition that--
`(I) limits or restricts the use of the health information technology
to services provided by the physician to individuals receiving services
at the entity;
`(II) limits or restricts the use of the health information technology
in conjunction with other health information technology; or
`(III) takes into account the volume or value of referrals (or other
business generated) by the physician to the entity;
`(ii) in the case of such remuneration made on a date that is on or after
the date described in section 413(d)(2) of the Health Information Technology
Promotion Act of 2006, to the extent the National Coordinator of Health
Information Technology has approved a standard under section 271(c)(3)(B)(i)
of the Public Health Service Act, the health information technology provided
conforms to such standard;
`(iii) in the case of such remuneration made on or after the date that
is three years after the date described in section 413(d)(2) of the Health
Information Technology Promotion Act of 2006, if the Secretary establishes
criteria under section 413(e)(3) of such Act, such remuneration is made
in accordance with such criteria; and
`(iv) such remuneration is arranged for in a written agreement that is
signed by a representative of the entity and by the physician and that
specifies the remuneration made.
`(B) For purposes of subparagraph (A) and sections 1128B(b)(3)(J) and 1877(e)(9),
the term `health information technology' means hardware, software, license,
right, intellectual property, equipment, or other information technology
used primarily for the electronic creation, maintenance, and exchange of
clinical health information to improve health care quality or efficiency.'.
(b) For Criminal Penalties- Section 1128B(b)(3) of such Act (42 U.S.C. 1320a-7b(b)(3))
is amended--
(1) in subparagraph (G), by striking `and' at the end;
(2) in the subparagraph (H) added by section 237(d) of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173;
117 Stat. 2213)--
(A) by moving such subparagraph 2 ems to the left; and
(B) by striking the period at the end and inserting a semicolon;
(3) in the subparagraph (H) added by section 431(a) of such Act (117 Stat.
2287)--
(A) by redesignating such subparagraph as subparagraph (I);
(B) by moving such subparagraph 2 ems to the left; and
(C) by striking the period at the end and inserting `; and'; and
(4) by adding at the end the following new subparagraph:
`(J) any nonmonetary remuneration (in the form of health information technology,
as defined in section 1128A(b)(4)(B), and related training services) made
to a person if--
`(i) such remuneration is solicited or received (or offered or paid)
without a condition that--
`(I) limits or restricts the use of the health information technology
to services provided by the person to individuals receiving services
at the location of the entity providing such technology;
`(II) limits or restricts the use of the health information technology
in conjunction with other health information technology; or
`(III) takes into account the volume or value of referrals (or other
business generated) by the person to the entity providing such technology;
`(ii) in the case of such remuneration made on a date that is on or
after the date described in section 413(d)(2) of the Health Information
Technology Promotion Act of 2006, to the extent the National Coordinator
of Health Information Technology has approved a standard under section
271(c)(3)(B)(i) of the Public Health Service Act, the health information
technology provided conforms to such standard;
`(iii) in the case of such remuneration made on or after the date that
is three years after the date described in section 413(d)(2) of the
Health Information Technology Promotion Act of 2006, if the Secretary
establishes criteria under section 413(e)(3) of such Act, such remuneration
is made in accordance with such criteria; and
`(iv) such remuneration is arranged for in a written agreement that
is signed by the parties involved and that specifies the remuneration
solicited or received (or offered or paid).'.
(c) For Limitation on Certain Physician Referrals- Section 1877(e) of such
Act (42 U.S.C. 1395nn(e)) is amended by adding at the end the following
new paragraph:
`(9) INFORMATION TECHNOLOGY AND TRAINING SERVICES- Any nonmonetary remuneration
(in the form of health information technology, as defined in section 1128A(b)(4)(B),
and related training services) made by an entity to a physician if--
`(A) such remuneration is made without a condition that--
`(i) limits or restricts the use of the health information technology
to services provided by the physician to individuals receiving services
at the location of the entity providing such technology;
`(ii) limits or restricts the use of the health information technology
in conjunction with other health information technology; or
`(iii) takes into account the volume or value of referrals (or other
business generated) by the physician to the entity providing such
technology;
`(B) in the case of such remuneration made on a date that is on or after
the date described in section 413(d)(2) of the Health Information Technology
Promotion Act of 2006, to the extent the National Coordinator of Health
Information Technology has approved a standard under section 271(c)(3)(B)(i)
of the Public Health Service Act, the health information technology
provided conforms to such standard;
`(C) in the case of such remuneration made on or after the date that
is three years after the date described in section 413(d)(2) of the
Health Information Technology Promotion Act of 2006, if the Secretary
establishes criteria under section 413(e)(3) of such Act, such remuneration
is made in accordance with such criteria; and
`(D) such remuneration is arranged for in a written agreement that is
signed by a representative of the entity and by the physician and that
specifies the remuneration made.'.
(d) Regulation, Effective Date, and Effect on State Laws-
(1) REGULATIONS- Not later than 180 days after the date of the enactment
of this Act, the Secretary of Health and Human Services shall promulgate
such regulations as may be necessary to carry out the provisions of this
section.
(2) EFFECTIVE DATE- The amendments made by this section shall take effect
on the date that is 180 days after the date of the enactment of this Act.
(3) PREEMPTION OF STATE LAWS- No State (as defined in section 414(a)(3))
shall have in effect a State law that imposes a criminal or civil penalty
for a transaction described in section 1128A(b)(4); 1128B(b)(3)(J); or
1877(e)(9) of the Social Security Act, as added by this section, if the
conditions described in the respective section, with respect to such transaction,
are met.
(e) Study and Report To Assess Effect of Safe Harbors on Health System-
(1) IN GENERAL- The Secretary of Health and Human Services shall conduct
a study to determine the impact of each of the safe harbors described
in paragraph (4). In particular, the study shall examine the following:
(A) The effectiveness of each safe harbor in increasing the adoption
of health information technology.
(B) The types of health information technology provided under each safe
harbor.
(C) The extent to which the financial or other business relationships
between providers under each safe harbor have changed as a result of
the safe harbor in a way that adversely affects the health care system
or choices available to consumers.
(2) REPORT- Not later than three years after the effective date described
in subsection (d)(2), the Secretary of Health and Human Services shall
submit to Congress a report on the study under paragraph (1) and shall
include such recommendations for changes in the safe harbors as the Secretary
determines may be appropriate.
(3) UPDATED CRITERIA FOR PERMISSIBLE HEALTH INFORMATION TECHNOLOGY REMUNERATION
UNDER SAFE HARBORS- Not later than three years after the effective date
described in subsection (d)(2), the Secretary of Health and Human Services
may issue regulations that establish updated criteria for nonmonetary
remuneration (in the form of health information technology and related
training services) for purposes of the safe harbors described in paragraph
(4). Such criteria may be based on the extent to which the health information
technology conforms to a standard developed under section 271(c)(3)(B)(i)
of the Public Health Service Act, as added by section 412, only to the
extent that such standard is recognized by the National Coordinator of
Health Information Technology under such section 271(c)(3)(B)(i).
(4) SAFE HARBORS DESCRIBED- For purposes of paragraphs (1) and (3), the
safe harbors described in this paragraph are--
(A) the safe harbor under section 1128A(b)(4) of the Social Security
Act (42 U.S.C. 1320a-7a(b)(4)), as added by subsection (a);
(B) the safe harbor under section 1128B(b)(3)(J) of such Act (42 U.S.C.
1320a-7b(b)(3)(J)), as added by subsection (b); and
(C) the safe harbor under section 1877(e)(9) of such Act (42 U.S.C.
1395nn(e)(9)), as added by subsection (c).
SEC. 414. UNIFORM HEALTH INFORMATION LAWS AND REGULATIONS.
(a) Study to Determine Extent of Variation in State Health Information Laws
and Regulations-
(1) IN GENERAL- The Secretary of Health and Human Services shall conduct
a study of State security and confidentiality laws and current Federal
security and confidentiality standards to determine--
(A) the degree to which such State laws vary among States, and between
the States and such current Federal standards;
(B) how any such variation may adversely impact the security and confidentiality
of individually identifiable health information and the electronic exchange
of clinical health information among States, the Federal government,
and private entities; and
(C) the strengths and weaknesses of such State laws and of such current
Federal standards for purposes of protecting the security and confidentiality
of individually identifiable health information while also taking into
account the need for timely and efficient exchanges of health information
to improve quality of care and ensure the availability of health information
necessary to make medical decisions at the the location in which the
medical care involved is provided.
(2) REPORT- Not later than 18 months after the date of the enactment of
this Act, the Secretary of Health and Human Services shall submit to Congress
a report on the study under paragraph (1) and shall include in such report--
(A) a determination by the Secretary whether State security and confidentiality
laws and current Federal security and confidentiality standards should
be conformed to create a single set of national standards to preserve
and protect the security and confidentiality of patient health information
in order to improve health care quality and efficiency; and
(B) if the Secretary determines such State laws and such current Federal
standards should be conformed to create such a single set of national
standards, what the single set of standards should be.
(3) DEFINITIONS- For purposes of this subsection:
(A) STATE SECURITY AND CONFIDENTIALITY LAWS- The term `State security
and confidentiality laws' means State laws and regulations relating
to the privacy and confidentiality of individually identifiable health
information or to the security of such information.
(B) CURRENT FEDERAL SECURITY AND CONFIDENTIALITY STANDARDS- The term
`current Federal security and confidentiality standards' means the Federal
privacy standards established pursuant to section 264(c) of the Health
Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d-2
note) and security standards established under section 1173(d) of the
Social Security Act.
(C) STATE- The term `State' has the meaning given such term when used
in title XI of the Social Security Act, as provided under section 1101(a)
of such Act (42 U.S.C. 1301(a)).
(b) Establishment of Uniform Confidentiality and Security Standards-
(1) IN GENERAL- Section 1178(a) of the Social Security Act (42 U.S.C.
1320d-7(a)), is amended--
(A) in paragraph (1), by inserting after `Except as provided in paragraph
(2)' the following: `and subject to paragraph (3)';
(B) in paragraph (2), by striking `A provision' and inserting `Subject
to paragraph (3)(B), a provision'; and
(C) by adding at the end the following new paragraph:
`(3) UNIFORM NATIONAL STANDARDS-
`(i) CREATING UNIFORM NATIONAL STANDARDS- If the conditions under
clause (ii) are met, then the regulation and standards described in
subparagraph (C) shall become the single set of national standards
to preserve and protect the security and confidentiality of individually
identifiable patient health information in order to improve health
care quality and efficiency and supersede the current Federal security
and confidentiality standards and State security and confidentiality
laws, as defined in section 414(a)(3) of the Health Information Technology
Promotion Act of 2006.
`(ii) CONDITIONS- For purposes of clause (i), the conditions under
this clause are the following:
`(I) DETERMINATION OF NEED FOR SINGLE SET OF STANDARDS- The Secretary
determines under section 414(a)(2)(A) of the Health Information
Technology Promotion Act of 2006 that State security and confidentiality
laws and current Federal security and confidentiality standards
should be conformed to create a single set of national standards
to preserve and protect the security and confidentiality of individually
identifiable patient health information in order to improve health
care quality and efficiency.
`(II) SECRETARY SPECIFIES STANDARDS- The Secretary specifies that
the regulation and standards described in subparagraph (C) should
be the single set of national standards.
`(III) NO LEGISLATION ESTABLISHING STANDARDS- Legislation creating
a single set of national standards and preempting State security
and confidentiality laws is not enacted by the date that is 36 months
after the date of the enactment of the Health Information Technology
Promotion Act of 2006.
`(B) NARROWING OF PREEMPTION EXCEPTIONS-
`(i) SUBSEQUENT LEGISLATION- If legislation described in subparagraph
(A) is enacted by the date described in such subparagraph, as of the
date of enactment of such legislation paragraph (2) shall be superseded
by such exceptions as may be provided for in such legislation. It
is the intent of Congress that such exceptions be as narrow as possible
to maximize the uniform application of the regulation and standards
described in subparagraph (C).
`(ii) NO LEGISLATION- If legislation described in subparagraph (A)
is not enacted by the date described in such subparagraph, paragraph
(2) shall be superseded by such exceptions as may be provided for
by the Secretary by regulation issued in connection with the regulation
and standards described in subparagraph (C). It is the intent of Congress
that such exceptions be as narrow as possible to maximize the uniform
application of the regulation and standards described in subparagraph
(C).
`(C) APPLICATION OF UNIFORM STANDARDS- The regulation and standards
described in this subparagraph are the regulation promulgated under
section 264(c)(1) of the Health Insurance Portability and Accountability
Act of 1996 (42 U.S.C. 1320d-2 note) and standards under section 1173(d),
as modified by the Secretary to the extent the Secretary determines,
after consideration of the results of the study conducted under section
414(a) of the Health Information Technology Promotion Act of 2006, necessary
to promote uniformity and efficiency in the application of confidentiality
and security standards with respect to individually identifiable health
information.'.
(2) HIPAA CONFORMING AMENDMENT- Section 264(c)(2) of the Health Insurance
Portability and Accountability Act of 1996 (42 U.S.C. 1320d-2 note) is
amended by striking `A regulation' and inserting `(A) Subject to section
1178(a)(3) of the Social Security Act, a regulation'.
SEC. 415. RULEMAKING TO UPGRADE ASC X12 AND NCPDP STANDARDS AND ICD CODES.
(a) In General- Not later than April 1, 2007, the Secretary of Health and
Human Services shall promulgate a final rule under section 1174(b) of the
Social Security Act (42 U.S.C. 1320d-3(b)) to provide for the following
modification of standards:
(1) ACCREDITED STANDARDS COMMITTEE X12 (ASC X12) STANDARD- The replacement
of the Accredited Standards Committee X12 (ASC X12) version 4010 adopted
under section 1173(a) of such Act (42 U.S.C. 1320d-2(a)), including for
purposes of part A of title XVIII of such Act, with the ASC X12 version
5010, as reviewed by the National Committee on Vital Health Statistics.
(2) NATIONAL COUNCIL FOR PRESCRIPTION DRUG PROGRAMS (NCPDP) TELECOMMUNICATIONS
STANDARDS- The replacement of the National Council for Prescription Drug
Programs (NCPDP) Telecommunications Standards version 5.1 adopted under
section 1173(a) of such Act (42 U.S.C. 1320d-2(a)), including for purposes
of part A of title XVIII of such Act, with NCPDP Telecommunications Standards
version C.3, as approved by such Council and reviewed by the National
Committee on Vital Health Statistics.
(3) ICD CODES- The replacement of the International Statistical Classification
of Diseases and Related Health Problems, 9th revision, Clinical Modification
(ICD-9-CM) under the regulation promulgated under section 1173(c) of such
Act (42 U.S.C. 1320d-2(c)), including for purposes of part A of title
XVIII of such Act, with both of the following:
(A) The International Statistical Classification of Diseases and Related
Health Problems, 10th revision, Clinical Modification (ICD-10-CM).
(B) The International Statistical Classification of Diseases and Related
Health Problems, 10th revision, Procedure Coding System (ICD-10-PCS).
(b) Rule of Construction- Nothing in subsection (a)(3) shall be construed
as affecting the application of classification methodologies or codes, such
as CPT or HCPCS codes, other than under the International Statistical Classification
of Diseases and Related Health Problems (ICD).
(c) Notice- Not later than 30 days after the date of the enactment of this
Act, the Secretary of Health and Human Services shall publish in the Federal
Register a notice of the requirements to promulgate final rules under subsection
(a). Such notice shall include--
(1) the respective date by which each such rule must be promulgated under
such subsection;
(2) the respective compliance date described in subsection (e) for each
such rule; and
(3) a statement that entities covered under the Health Insurance Portability
and Accountability Act of 1996 and health information technology vendors
should plan for the implementation of upgraded ASC X12, NCPDP, and ICD
codes under such subsection.
(d) No Judicial Review- The final rules promulgated under subsections (a)
shall not be subject to judicial review.
(e) Compliance With Upgraded Standards- For purposes of section 1175(b)(2)
of the Social Security Act (42 U.S.C. 1320d-4(b)(2))--
(1) ASC X12 AND NCPDP STANDARDS- The final rules promulgated under paragraphs
(1) and (2) of subsection (a) shall apply to transactions occurring on
or after April 1, 2009.
(2) ICD CODES- The final rule promulgated under paragraph (3) of subsection
(a) shall apply to transactions occurring on or after October 1, 2009.
SEC. 416. REPORT ON THE AMERICAN HEALTH INFORMATION COMMUNITY.
Not later than two years after the date of the enactment of this Act, the
Secretary of Health and Human Services shall submit to Congress a report
on the work conducted by the American Health Information Community (in this
section referred to as `AHIC'), as established by the Secretary. Such report
shall include the following:
(1) A description of the accomplishments of AHIC, with respect to the
promotion of the development of a nationwide health information network
and the increased adoption of health information technology.
(2) Information identifying the practices that are used to protect health
information and to guarantee confidentiality and security of such information.
(3) Information on the progress in--
(A) establishing uniform industry-wide health information technology
standards;
(B) achieving an internet-based nationwide health information network;
and
(C) achieving interoperable electronic health record adoption across
health care providers.
(4) Recommendations for the transition of the AHIC to a permanent advisory
entity, including--
(A) a schedule for such transition;
(B) options for structuring the entity as either a public-private or
private sector entity;
(C) the role of the Federal Government in the entity; and
(D) the ongoing responsibilities of the entity, such as in establishing
standards, certifying health information technology, and providing long-term
governance for health care transformation.
SEC. 417. STRATEGIC PLAN FOR COORDINATING IMPLEMENTATION OF HEALTH INFORMATION
TECHNOLOGY.
(a) In General- Not later than 180 days after the date of the enactment
of this Act, the Secretary of Health and Human Services, in consultation
with entities involved in the area of health information technology, shall
develop a strategic plan related to the need for coordination in such area.
(b) Coordination of Specific Implementation Processes- The strategic plan
under subsection (a) shall address the need for coordination in the implementation
of the following:
(1) HEALTH INFORMATION TECHNOLOGY STANDARDS- Health information technology
standards approved under section 271(c)(3)(B)(i) of the Public Health
Service Act, as added by section 412.
(2) HIPAA TRANSACTION STANDARDS- Transaction standards under section 1173(a)
of the Social Security Act (42 U.S.C. 1320d-2(d)).
(3) UPDATED ICD CODES- The International Statistical Classification of
Diseases and Related Health Problems, 10th revision, Clinical Modification
(ICD-10-CM) and the International Statistical Classification of Diseases
and Related Health Problems, 10th revision, Procedure Coding System (ICD-10-PCS)
described in section 415.
(c) Coordination Among Specific Federal Entities- The strategic plan under
subsection (a) shall address any methods to coordinate, with respect to
the electronic exchange of health information, actions taken by the following
entities:
(1) The Office of the National Coordinator for Health Information Technology.
(2) The American Health Information Community.
(3) The Office of Electronic Standards and Security of the Centers for
Medicare and Medicaid Services.
(4) The National Committee on Vital Health Statistics.
(5) Any other entity involved in the electronic exchange of health information
that the Secretary determines appropriate.
TITLE V--SEAMLESS MOBILITY
SEC. 501. PROHIBITION ON IMPEDING.
(a) Prohibition- The Federal Communications Commission shall not, in this
or any other proceeding, take any action to impede the development of seamless
mobility.
(b) Definition- For purposes of this section, the term `seamless mobility'
means the ability of a user and a user's connecting devices to move easily
and smoothly between and among Internet-protocol enabled technology platforms,
facilities, and networks.
END
