Volume 156, No. 88 covering the 2nd Session of the 111th Congress (2009 - 2010) was published by the Congressional Record.
The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“TEXT OF AMENDMENTS” mentioning the Environmental Protection Agency was published in the Senate section on pages S4887-S4891 on June 14, 2010.
The publication is reproduced in full below:
TEXT OF AMENDMENTS
SA 4343. Mr. WEBB (for himself, Mr. Nelson of Florida, and Mr. Warner) submitted an amendment intended to be proposed to amendment SA 4301 proposed by Mr. Baucus to the bill H.R. 4213, to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes; which was ordered to lie on the table; as follows:
At the end of title VI, insert the following:
SEC. --. GUIDANCE ON TAX TREATMENT OF LOSSES RELATED TO
TAINTED DRYWALL AS CASUALTY LOSS DEDUCTIONS.
Not later than the due date, including extension, for filing a return of tax for taxable year 2009, the Secretary of the Treasury shall issue guidance with respect to the availability of a casualty loss deduction under section 165(c)(3) of the Internal Revenue Code of 1986 for a taxpayer who has sustained a loss due to defective or tainted drywall, including drywall imported from China.
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SA 4344. Mr. REID proposed an amendment to amendment SA 4301 proposed by Mr. Baucus to the bill H.R. 4213, to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes; as follows:
At the end of part I of subtitle B of title II, insert the following:
SEC. --. FIRST-TIME HOMEBUYER CREDIT.
(a) In General.--Paragraph (2) of section 36(h) is amended by striking ``paragraph (1) shall be applied by substituting
`July 1, 2010' '' and inserting ``and who purchases such residence before October 1, 2010, paragraph (1) shall be applied by substituting `October 1, 2010' ''.
(b) Conforming Amendment.--Subparagraph (B) of section 36(h)(3) is amended by inserting ``and for `October 1, 2010'
'' after ``for `July 1, 2010' ''.
(c) Effective Date.--The amendments made by subsections (a) and (b) shall apply to residences purchased after June 30, 2010.
(d) Offset.--
(1) Disallowance of deduction for punitive damages.--
(A) In general.--Section 162(g) (relating to treble damage payments under the antitrust laws) is amended--
(i) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively,
(ii) by striking ``If'' and inserting:
``(1) Treble damages.--If'', and
(iii) by adding at the end the following new paragraph:
``(2) Punitive damages.--No deduction shall be allowed under this chapter for any amount paid or incurred for punitive damages in connection with any judgment in, or settlement of, any action. This paragraph shall not apply to punitive damages described in section 104(c).''.
(B) Conforming amendment.--The heading for section 162(g) is amended by inserting ``Or Punitive Damages'' after
``Laws''.
(2) Inclusion in income of punitive damages paid by insurer or otherwise.--
(A) In general.--Part II of subchapter B of chapter 1
(relating to items specifically included in gross income) is amended by adding at the end the following new section:
``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR
OTHERWISE.
``Gross income shall include any amount paid to or on behalf of a taxpayer as insurance or otherwise by reason of the taxpayer's liability (or agreement) to pay punitive damages.''.
(B) Reporting requirements.--Section 6041 (relating to information at source) is amended by adding at the end the following new subsection:
``(h) Section To Apply to Punitive Damages Compensation.--This section shall apply to payments by a person to or on behalf of another person as insurance or otherwise by reason of the other person's liability (or agreement) to pay punitive damages.''.
(C) Conforming amendment.--The table of sections for part II of subchapter B of chapter 1 is amended by adding at the end the following new item:
``Sec. 91. Punitive damages compensated by insurance or otherwise.''.
(3) Effective date.--The amendments made by this subsection shall apply to damages paid or incurred after December 31, 2011.
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SA 4345. Mr. TESTER submitted an amendment intended to be proposed to amendment SA 4301 proposed by Mr. Baucus to the bill H.R. 4213, to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes; which was ordered to lie on the table; as follows:
Beginning on page 236, strike line 20 and all that follows through page 237, line 5.
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SA 4346. Mr. COBURN submitted an amendment intended to be proposed to amendment SA 4301 proposed by Mr. Baucus to the bill H.R. 4213, to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes; which was ordered to lie on the table; as follows:
Strike section 522.
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SA 4347. Mr. REID (for Ms. Klobuchar) proposed an amendment to the bill S. 1660, to amend the Toxic Substances Control Act to reduce the emissions of formaldehyde from composite wood products, and for other purposes, as follows:
In lieu of the matter proposed to be inserted, insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Formaldehyde Standards for Composite Wood Products Act''.
SEC. 2. FORMALDEHYDE STANDARDS FOR COMPOSITE WOOD PRODUCTS.
(a) Amendment.--The Toxic Substances Control Act (15 U.S.C. 2601 et seq.) is amended by adding at the end the following:
``TITLE VI--FORMALDEHYDE STANDARDS FOR COMPOSITE WOOD PRODUCTS
``SEC. 601. FORMALDEHYDE STANDARDS.
``(a) Definitions.--In this section:
``(1) Finished good.--
``(A) In general.--The term `finished good' means any good or product (other than a panel) containing--
``(i) hardwood plywood;
``(ii) particleboard; or
``(iii) medium-density fiberboard.
``(B) Exclusions.--The term `finished good' does not include--
``(i) any component part or other part used in the assembly of a finished good; or
``(ii) any finished good that has previously been sold or supplied to an individual or entity that purchased or acquired the finished good in good faith for purposes other than resale, such as--
``(I) an antique; or
``(II) secondhand furniture.
``(2) Hardboard.--The term `hardboard' has such meaning as the Administrator shall establish, by regulation, pursuant to subsection (d).
``(3) Hardwood plywood.--
``(A) In general.--The term `hardwood plywood' means a hardwood or decorative panel that is--
``(i) intended for interior use; and
``(ii) composed of (as determined under the standard numbered ANSI/HPVA HP-1-2009) an assembly of layers or plies of veneer, joined by an adhesive with--
``(I) lumber core;
``(II) particleboard core;
``(III) medium-density fiberboard core;
``(IV) hardboard core; or
``(V) any other special core or special back material.
``(B) Exclusions.--The term `hardwood plywood' does not include--
``(i) military-specified plywood;
``(ii) curved plywood; or
``(iii) any other product specified in--
``(I) the standard entitled `Voluntary Product Standard-Structural Plywood' and numbered PS 1-07; or
``(II) the standard entitled `Voluntary Product Standard-Performance Standard for Wood-Based Structural-Use Panels' and numbered PS 2-04.
``(C) Laminated products.--
``(i) Rulemaking.--
``(I) In general.--The Administrator shall conduct a rulemaking process pursuant to subsection (d) that uses all available and relevant information from State authorities, industry, and other available sources of such information, and analyzes that information to determine, at the discretion of the Administrator, whether the definition of the term
`hardwood plywood' should exempt engineered veneer or any laminated product.
``(II) Modification.--The Administrator may modify any aspect of the definition contained in clause (ii) before including that definition in the regulations promulgated pursuant to subclause (I).
``(ii) Laminated product.--The term `laminated product' means a product--
``(I) in which a wood veneer is affixed to--
``(aa) a particleboard platform;
``(bb) a medium-density fiberboard platform; or
``(cc) a veneer-core platform; and
``(II) that is--
``(aa) a component part;
``(bb) used in the construction or assembly of a finished good; and
``(cc) produced by the manufacturer or fabricator of the finished good in which the product is incorporated.
``(4) Manufactured home.--The term `manufactured home' has the meaning given the term in section 3280.2 of title 24, Code of Federal Regulations (as in effect on the date of promulgation of regulations pursuant to subsection (d)).
``(5) Medium-density fiberboard.--The term `medium-density fiberboard' means a panel composed of cellulosic fibers made by dry forming and pressing a resinated fiber mat (as determined under the standard numbered ANSI A208.2-2009).
``(6) Modular home.--The term `modular home' means a home that is constructed in a factory in 1 or more modules--
``(A) each of which meet applicable State and local building codes of the area in which the home will be located; and
``(B) that are transported to the home building site, installed on foundations, and completed.
``(7) No-added formaldehyde-based resin.--
``(A) In general.--(i) The term `no-added formaldehyde-based resin' means a resin formulated with no added formaldehyde as part of the resin cross-linking structure in a composite wood product that meets the emission standards in subparagraph (C) as measured by--
``(I) one test conducted pursuant to test method ASTM E-1333-96 (2002) or, subject to clause (ii), ASTM D-6007-02; and
``(II) 3 months of routine quality control tests pursuant to ASTM D-6007-02 or ASTM D-5582 or such other routine quality control test methods as may be established by the Administrator through rulemaking.
``(ii) Test results obtained under clause (i)(I) or (II) by any test method other than ASTM E-1333-96 (2002) must include a showing of equivalence by means established by the Administrator through rulemaking.
``(B) Inclusions.--The term `no-added formaldehyde-based resin' may include any resin made from--
``(i) soy;
``(ii) polyvinyl acetate; or
``(iii) methylene diisocyanate.
``(C) Emission standards.--The following are the emission standards for composite wood products made with no-added formaldehyde-based resins under this paragraph:
``(i) No higher than 0.04 parts per million of formaldehyde for 90 percent of the 3 months of routine quality control testing data required under subparagraph (A)(ii).
``(ii) No test result higher than 0.05 parts per million of formaldehyde for hardwood plywood and 0.06 parts per million for particleboard, medium-density fiberboard, and thin medium-density fiberboard.
``(8) Particleboard.--
``(A) In general.--The term `particleboard' means a panel composed of cellulosic material in the form of discrete particles (as distinguished from fibers, flakes, or strands) that are pressed together with resin (as determined under the standard numbered ANSI A208.1-2009).
``(B) Exclusions.--The term `particleboard' does not include any product specified in the standard entitled
`Voluntary Product Standard-Performance Standard for Wood-Based Structural-Use Panels' and numbered PS 2-04.
``(9) Recreational vehicle.--The term `recreational vehicle' has the meaning given the term in section 3282.8 of title 24, Code of Federal Regulations (as in effect on the date of promulgation of regulations pursuant to subsection
(d)).
``(10) Ultra low-emitting formaldehyde resin.--
``(A) In general.--(i) The term `ultra low-emitting formaldehyde resin' means a resin in a composite wood product that meets the emission standards in subparagraph (C) as measured by--
``(I) 2 quarterly tests conducted pursuant to test method ASTM E-1333--96 (2002) or, subject to clause (ii), ASTM D-6007-02; and
``(II) 6 months of routine quality control tests pursuant to ASTM D-6007-02 or ASTM D-5582 or such other routine quality control test methods as may be established by the Administrator through rulemaking.
``(ii) Test results obtained under clause (i)(I) or (II) by any test method other than ASTM E-1333-96 (2002) must include a showing of equivalence by means established by the Administrator through rulemaking.
``(B) Inclusions.--The term `ultra low-emitting formaldehyde resin' may include--
``(i) melamine-urea-formaldehyde resin;
``(ii) phenol formaldehyde resin; and
``(iii) resorcinol formaldehyde resin.
``(C) Emission standards.--
``(i) The Administrator may, pursuant to regulations issued under subsection (d), reduce the testing requirements for a manufacturer only if its product made with ultra low-emitting formaldehyde resin meets the following emission standards:
``(I) For hardwood plywood, no higher than 0.05 parts per million of formaldehyde.
``(II) For medium-density fiberboard--
``(aa) no higher than 0.06 parts per million of formaldehyde for 90 percent of 6 months of routine quality control testing data required under subparagraph (A)(ii); and
``(bb) no test result higher than 0.09 parts per million of formaldehyde.
``(III) For particleboard--
``(aa) no higher than 0.05 parts per million of formaldehyde for 90 percent of 6 months of routine quality control testing data required under subparagraph (A)(ii); and
``(bb) no test result higher than 0.08 parts per million of formaldehyde.
``(IV) For thin medium-density fiberboard--
``(aa) no higher than 0.08 parts per million of formaldehyde for 90 percent of 6 months of routine quality control testing data required under subparagraph (A)(ii); and
``(bb) no test result higher than 0.11 parts per million of formaldehyde.
``(ii) The Administrator may not, pursuant to regulations issued under subsection (d), exempt a manufacturer from third party certification requirements unless its product made with ultra low-emitting formaldehyde resin meets the following emission standards:
``(I) No higher than 0.04 parts per million of formaldehyde for 90 percent of 6 months of routine quality control testing data required under subparagraph (A)(ii).
``(II) No test result higher than 0.05 parts per million of formaldehyde for hardwood plywood and 0.06 parts per million for particleboard, medium-density fiberboard, and thin medium-density fiberboard.
``(b) Requirement.--
``(1) In general.--Except as provided in an applicable sell-through regulation promulgated pursuant to subsection
(d), effective beginning on the date that is 180 days after the date of promulgation of those regulations, the emission standards described in paragraph (2), shall apply to hardwood plywood, medium-density fiberboard, and particleboard sold, supplied, offered for sale, or manufactured in the United States.
``(2) Emission standards.--The emission standards referred to in paragraph (1), based on test method ASTM E-1333-96
(2002), are as follows:
``(A) For hardwood plywood with a veneer core, 0.05 parts per million of formaldehyde.
``(B) For hardwood plywood with a composite core--
``(i) 0.08 parts per million of formaldehyde for any period after the effective date described in paragraph (1) and before July 1, 2012; and
``(ii) 0.05 parts per million of formaldehyde, effective on the later of the effective date described in paragraph (1) or July 1, 2012.
``(C) For medium-density fiberboard--
``(i) 0.21 parts per million of formaldehyde for any period after the effective date described in paragraph (1) and before July 1, 2011; and
``(ii) 0.11 parts per million of formaldehyde, effective on the later of the effective date described in paragraph (1) or July 1, 2011.
``(D) For thin medium-density fiberboard--
``(i) 0.21 parts per million of formaldehyde for any period after the effective date described in paragraph (1) and before July 1, 2012; and
``(ii) 0.13 parts per million of formaldehyde, effective on the later of the effective date described in paragraph (1) or July 1, 2012.
``(E) For particleboard--
``(i) 0.18 parts per million of formaldehyde for any period after the effective date described in paragraph (1) and before July 1, 2011; and
``(ii) 0.09 parts per million of formaldehyde, effective on the later of the effective date described in paragraph (1) or July 1, 2011.
``(3) Compliance with emission standards.--(A) Compliance with the emission standards described in paragraph (2) shall be measured by--
``(i) quarterly tests shall be conducted pursuant to test method ASTM E-1333-96 (2002) or, subject to subparagraph (B), ASTM D-6007-02; and
``(ii) quality control tests shall be conducted pursuant to ASTM D-6007-02, ASTM D-5582, or such other test methods as may be established by the Administrator through rulemaking.
``(B) Test results obtained under subparagraph (A)(i) or
(ii) by any test method other than ASTM E-1333-96 (2002) must include a showing of equivalence by means established by the Administrator through rulemaking.
``(C) Except where otherwise specified, the Administrator shall establish through rulemaking the number and frequency of tests required to demonstrate compliance with the emission standards.
``(4) Applicability.--The formaldehyde emission standard referred to in paragraph (1) shall apply regardless of whether an applicable hardwood plywood, medium-density fiberboard, or particleboard is--
``(A) in the form of an unfinished panel; or
``(B) incorporated into a finished good.
``(c) Exemptions.--The formaldehyde emission standard referred to in subsection (b)(1) shall not apply to--
``(1) hardboard;
``(2) structural plywood, as specified in the standard entitled `Voluntary Product Standard-Structural Plywood' and numbered PS 1-07;
``(3) structural panels, as specified in the standard entitled `Voluntary Product Standard-Performance Standard for Wood-Based Structural-Use Panels' and numbered PS 2-04;
``(4) structural composite lumber, as specified in the standard entitled `Standard Specification for Evaluation of Structural Composite Lumber Products' and numbered ASTM D 5456-06;
``(5) oriented strand board;
``(6) glued laminated lumber, as specified in the standard entitled `Structural Glued Laminated Timber' and numbered ANSI A190.1-2002;
``(7) prefabricated wood I-joists, as specified in the standard entitled `Standard Specification for Establishing and Monitoring Structural Capacities of Prefabricated Wood I-Joists' and numbered ASTM D 5055-05;
``(8) finger-jointed lumber;
``(9) wood packaging (including pallets, crates, spools, and dunnage);
``(10) composite wood products used inside a new--
``(A) vehicle (other than a recreational vehicle) constructed entirely from new parts that has never been--
``(i) the subject of a retail sale; or
``(ii) registered with the appropriate State agency or authority responsible for motor vehicles or with any foreign state, province, or country;
``(B) rail car;
``(C) boat;
``(D) aerospace craft; or
``(E) aircraft;
``(11) windows that contain composite wood products, if the window product contains less than 5 percent by volume of hardwood plywood, particleboard, or medium-density fiberboard, combined, in relation to the total volume of the finished window product; or
``(12) exterior doors and garage doors that contain composite wood products, if--
``(A) the doors are made from composite wood products manufactured with no-added formaldehyde-based resins or ultra low-emitting formaldehyde resins; or
``(B) the doors contain less than 3 percent by volume of hardwood plywood, particleboard, or medium-density fiberboard, combined, in relation to the total volume of the finished exterior door or garage door.
``(d) Regulations.--
``(1) In general.--Not later than January 1, 2013, the Administrator shall promulgate regulations to implement the standards required under subsection (b) in a manner that ensures compliance with the emission standards described in subsection (b)(2).
``(2) Inclusions.--The regulations promulgated pursuant to paragraph (1) shall include provisions relating to--
``(A) labeling;
``(B) chain of custody requirements;
``(C) sell-through provisions;
``(D) ultra low-emitting formaldehyde resins;
``(E) no-added formaldehyde-based resins;
``(F) finished goods;
``(G) third-party testing and certification;
``(H) auditing and reporting of third-party certifiers;
``(I) recordkeeping;
``(J) enforcement;
``(K) laminated products; and
``(L) exceptions from the requirements of regulations promulgated pursuant to this subsection for products and components containing de minimis amounts of composite wood products.
The Administrator shall not provide under subparagraph (L) exceptions to the formaldehyde emission standard requirements in subsection (b).
``(3) Sell-through provisions.--
``(A) In general.--Sell-through provisions established by the Administrator under this subsection, with respect to composite wood products and finished goods containing regulated composite wood products (including recreational vehicles, manufactured homes, and modular homes), shall--
``(i) be based on a designated date of manufacture (which shall be no earlier than the date 180 days following the promulgation of the regulations pursuant to this subsection) of the composite wood product or finished good, rather than date of sale of the composite wood product or finished good; and
``(ii) provide that any inventory of composite wood products or finished goods containing regulated composite wood products, manufactured before the designated date of manufacture of the composite wood products or finished goods, shall not be subject to the formaldehyde emission standard requirements under subsection (b)(1).
``(B) Implementing regulations.--The regulations promulgated under this subsection shall--
``(i) prohibit the stockpiling of inventory to be sold after the designated date of manufacture; and
``(ii) not require any labeling or testing of composite wood products or finished goods containing regulated composite wood products manufactured before the designated date of manufacture.
``(C) Definition.--For purposes of this paragraph, the term
`stockpiling' means manufacturing or purchasing a composite wood product or finished good containing a regulated composite wood product between the date of enactment of the Formaldehyde Standards for Composite Wood Products Act and the date 180 days following the promulgation of the regulations pursuant to this subsection at a rate which is significantly greater (as determined by the Administrator) than the rate at which such product or good was manufactured or purchased during a base period (as determined by the Administrator) ending before the date of enactment of the Formaldehyde Standards for Composite Wood Products Act.
``(4) Import regulations.--Not later than July 1, 2013, the Administrator, in coordination with the Commissioner of Customs and Border Protection and other appropriate Federal departments and agencies, shall revise regulations promulgated pursuant to section 13 as the Administrator determines to be necessary to ensure compliance with this section.
``(5) Successor standards and test methods.--The Administrator may, after public notice and opportunity for comment, substitute an industry standard or test method referenced in this section with its successor version.
``(e) Prohibited Acts.--An individual or entity that violates any requirement under this section (including any regulation promulgated pursuant to subsection (d)) shall be considered to have committed a prohibited act under section 15.''.
(b) Conforming Amendment.--The table of contents of the Toxic Substances Control Act (15 U.S.C. prec. 2601) is amended by adding at the end the following:
``TITLE VI--FORMALDEHYDE STANDARDS FOR COMPOSITE WOOD PRODUCTS
``Sec. 601. Formaldehyde standards.''.
SEC. 3. REPORTS TO CONGRESS.
Not later than one year after the date of enactment of this Act, and annually thereafter through December 31, 2014, the Administrator of the Environmental Protection Agency shall submit to the Committee on Environment and Public Works of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing, with respect to the preceding year--
(1) the status of the measures carried out or planned to be carried out pursuant to title VI of the Toxic Substances Control Act; and
(2) the extent to which relevant industries have achieved compliance with the requirements under that title.
SEC. 4. MODIFICATION OF REGULATION.
Not later than 180 days after the date of promulgation of regulations pursuant to section 601(d) of the Toxic Substances Control Act (as amended by section 2), the Secretary of Housing and Urban Development shall update the regulation contained in section 3280.308 of title 24, Code of Federal Regulations (as in effect on the date of enactment of this Act), to ensure that the regulation reflects the standards established by section 601 of the Toxic Substances Control Act.
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SA 4348. Mrs. MURRAY submitted an amendment intended to be proposed to amendment SA 4301 proposed by Mr. Baucus to the bill H.R. 4213, to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes; which was ordered to lie on the table; as follows:
At the end of title VI, insert the following:
SEC. ___. APPLICATION OF GRANTS FOR SPECIFIED ENERGY PROPERTY
TO CERTAIN REGULATED COMPANIES.
(a) In General.--The first sentence of section 1603(f) of division B of the American Recovery and Reinvestment Act of 2009 is amended by inserting ``(other than subsection (d)(2) thereof)'' after ``section 50 of the Internal Revenue Code of 1986''.
(b) Effective Date.--The amendment made by this section shall take effect as if included in section 1603 of division B the American Recovery and Reinvestment Act of 2009.
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SA 4349. Mr. BINGAMAN submitted an amendment intended to be proposed to amendment SA 4301 proposed by Mr. Baucus to the bill H.R. 4213, to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes; which was ordered to lie on the table; as follows:
Beginning on page 255, strike line 14 and all that follows through line 18 on page 260 and insert the following:
``(i) In general.--A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a covered inpatient drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.
``(ii) Establishment of mechanism.--The Secretary shall establish a mechanism to ensure that covered entities comply with clause (i). If the Secretary does not establish a mechanism under the previous sentence within 12 months of the enactment of this section, the requirements of section 1927(a)(5)(C) of the Social Security Act shall apply.
``(iii) Prohibiting disclosure to group purchasing organizations.--In the event that a covered entity is a member of a group purchasing organization, such entity shall not disclose the price or any other information pertaining to any purchases under this section directly or indirectly to such group purchasing organization.
``(B) Prohibiting resale, dispensing, or administration of drugs except to certain patients.--With respect to any covered inpatient drug that is subject to an agreement under this subsection, a covered entity shall not dispense, administer, resell, or otherwise transfer the covered inpatient drug to a person unless--
``(i) such person is an inpatient of the entity; and
``(ii) such person does not have health plan coverage (as defined in subsection (c)(3)) that provides prescription drug coverage in the inpatient setting with respect to such covered inpatient drug.
For purposes of clause (ii), a person shall be treated as having health plan coverage (as defined in subsection (c)(3)) with respect to a covered inpatient drug if benefits are not payable under such coverage with respect to such drug for reasons such as the application of a deductible or cost sharing or the use of utilization management.
``(C) Auditing.--A covered entity shall permit the Secretary and the manufacturer of a covered inpatient drug that is subject to an agreement under this subsection with the entity (acting in accordance with procedures established by the Secretary relating to the number, duration, and scope of audits) to audit at the Secretary's or the manufacturer's expense the records of the entity that directly pertain to the entity's compliance with the requirements described in subparagraph (A) or (B) with respect to drugs of the manufacturer. The use or disclosure of information for performance of such an audit shall be treated as a use or disclosure required by law for purposes of section 164.512(a) of title 45, Code of Federal Regulations.
``(D) Additional sanction for noncompliance.--If the Secretary finds, after notice and hearing, that a covered entity is in violation of a requirement described in subparagraph (A) or (B), the covered entity shall be liable to the manufacturer of the covered inpatient drug that is the subject of the violation in an amount equal to the reduction in the price of the drug (as described in subparagraph (A)) provided under the agreement between the Secretary and the manufacturer under this subsection.
``(E) Maintenance of records.--
``(i) In general.--A covered entity shall establish and maintain an effective recordkeeping system to comply with this section and shall certify to the Secretary that such entity is in compliance with subparagraphs (A) and (B). The Secretary shall require that hospitals that purchase covered inpatient drugs for inpatient dispensing or administration under this subsection appropriately segregate inventory of such covered inpatient drugs, either physically or electronically, from drugs for outpatient use, as well as from drugs for inpatient dispensing or administration to individuals who have (for purposes of subparagraph (B)) health plan coverage described in clause (ii) of such subparagraph.
``(ii) Certification of no third-party payer.--A covered entity shall maintain records that contain certification by the covered entity that no third party payment was received for any covered inpatient drug that is subject to an agreement under this subsection and that was dispensed to an inpatient.
``(5) Treatment of distinct units of hospitals.--In the case of a covered entity that is a distinct part of a hospital, the distinct part of the hospital shall not be considered a covered entity under this subsection unless the hospital is otherwise a covered entity under this subsection.
``(6) Notice to manufacturers.--The Secretary shall notify manufacturers of covered inpatient drugs and single State agencies under section 1902(a)(5) of the Social Security Act of the identities of covered entities under this subsection, and of entities that no longer meet the requirements of paragraph (4), by means of timely updates of the Internet website supported by the Department of Health and Human Services relating to this section.
``(7) No prohibition on larger discount.--Nothing in this subsection shall prohibit a manufacturer from charging a price for a drug that is lower than the maximum price that may be charged under paragraph (1).
``(b) Covered Entity Defined.--In this section, the term
`covered entity' means an entity that meets the requirements described in subsection (a)(4) that has applied for and enrolled in the program described under this section and is one of the following:
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SA 4350. Mr. BINGAMAN submitted an amendment intended to be proposed to amendment SA 4301 proposed by Mr. Baucus to the bill H.R. 4213, to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes; which was ordered to lie on the table; as follows:
On page 255, line 18, strike ``a drug'' and insert ``a covered inpatient drug''.
On page 256, line 24, strike ``a patient'' and insert ``an inpatient''.
On page 260, line 17, after ``subsection (a)(4)'' insert the following: ``that has applied for and enrolled in the program described under this section''.
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